Uganda earned $241 million in trade surplus from DRC in 2020, and $177 million estimated informal trade exports that push the figure to $418 million trade earnings. This makes DRC Uganda’s number one source of trade surplus.
Museveni and DRC's Felix Antoine Tshisekedi Mpondwe Border in Kasese during the launch of infrastructure projects between Uganda and DRC
The Democratic Republic of Congo (DRC) was Uganda’s number one
source of trade surplus in 2020 according to Bank of Uganda trade statistics.
And road projects launched yesterday by President Museveni and his DR Congo counterpart Felix Antoine
Tshisekedi will likely further boost Uganda’s trade with DRC.
earned $241 million in trade surplus from DRC in 2020, and $177 million
estimated informal trade exports that push the figure to $418 million trade
earnings. This makes DRC Uganda’s number one source of trade surplus.
surplus refers to the amount by which the value of a country’s exports exceeds
the value of imports.
Second to DRC
is South Sudan. Uganda earned $276 million (trade surplus) from goods exported
to the country, slightly above DRC formal trade earnings. The $80 million
estimate of informal trade exports to South Sudan is almost half of DRC’s
such as Kenya and Tanzania, Uganda’s other main trading partners in the region,
Uganda’s export earnings are subdued by a large import bill, tilting the balance
to trade deficit. For instance, Uganda exported goods worth $465 million in
2020 to Kenya but imported goods worth $809 million. This means Uganda’s trade
deficit with Kenya was more than $300 million in 2020.
goods worth $95 million to Tanzania in 2020 and imported goods worth $772 million,
translating into trade deficit of almost $700 million. And the Rwanda market was decimated by border
closure in 2019. In
2019, Uganda exported goods worth $194 million to Rwanda and the value of
exports diminished to $5 million in 2020 a year after the border was closed,
according to statistics from Bank of Uganda.
Such trade statistics makes Uganda’s investment infrastructure investment in eastern DRC 'tick'. Finance Minister Matia Kasaija last month, speaking at media center
during launch of budget month activities, described DRC’s a “huge
sleeping market.” Uganda investment in the country is strategic, he said.
Kasaija revealed that a legislator had described him as “a stupid man” for
going to construct roads in DRC yet he had told the legislator that there is no
money to build a road in his constituency.
Africa Kiiza, a
trade negotiations and policy analyst at Southern and Eastern Africa Trade
Information and Negotiations Institute (SEATINI) says DRC market has
become vital for Uganda given Rwanda’s failure to reopen the border and Kenya's recent
schemes to block Uganda products from entering its market.
“We classify some markets as
troubled," Kiiza said in a recent interview. "Rwanda and South Sudan are classified as troubled. Kenya is also
starting to show signs of becoming a troubled market. Amidst these shifting
geopolitical aspects, DRC market becomes important.”
But Kiiza warns; “It is not automatic that when you construct a
road in Congo which is now our biggest trading neighbor, that the benefit that
accrue will be felt by all. We can continue having increased trade without
government should put in place mechanisms for maximum utilization of DRC market.
“Should we not utilize this market, it’s the tax payers to lose,” he said.
Three roads (330 kilometers long) will be
constructed. They are: Nebbi-Goli Mahagi-Bunia (190kms), Bunia-Bogoro-Kasenyi
(55km) and Rwebisengo-Budiba-Buguma-Nyiyapandam, including Budiaba Bridge
across River Semuliki (49km).
Uganda will contribute 20 per
cent of the total cost of the projects while the rest will be paid by DRC. Museveni during the launch said, “These projects will cause
tremendous social-economic transformation of the lives of the people in the two
countries. People of DR Congo and Uganda are
interlinked and have existed as neighbors since time immemorial.”
DRC’s Tshisekedi said the road
project will boost the DRC economy and improve trade relations between the two
countries. He said the two countries should strengthen relations in
other sectors such as security and agriculture.
DRC could soon by admitted to the East Africa
Community, expanding regional organization market by 87 million people which is
DRC’s population. DRC as a country shares more borders with EAC member countries.
EAC heads of state summit earlier
this year directed the Council of Ministers to undertake the verification
mission to Kinshasa and report to the next summit. The next summit will
be at the end of this year or earlier next year.
If interlinked with DRC more
than other EAC countries, Uganda stands reap big from its market when DRC is
fully admitted into the EAC.