Uganda sees export earnings rising by at least 15% in 2014

By Elias Biryabarema

KAMPALA (Reuters) – Uganda expects its export earnings to grow by at least 15 percent this year, helped by the removal of tariffs on sales to a regional trading bloc it joined this month, a government official said on Monday.

Uganda's exports were virtually flat last year, totalling $2.89 billion, a notch up from $2.80 billion in 2012.

The country, which is a member of the East African Community (EAC) trading bloc, also joined the Common Market for Eastern and Southern Africa (Comesa), a free trade area, this month.

Emmanuel Mutahunga, executive director of the state-run Uganda Export Promotion Board (UEPB), told Reuters that Ugandan companies will no longer be subject to any duties when exporting to the 14 other Comesa member countries, which should improve competitiveness.

"We expect that our exports will grow much faster so our projection is that our exports earnings will grow by at least 15 percent," he said.

The government forecasts economic growth of 6.8 percent for the fiscal year ending in June 2015, up from a projected 6 percent expansion in the fiscal year that ended last month.

Comesa is currently Uganda's biggest export market and the ministry of trade estimates the removal of tariffs will increase Uganda's shipments to the bloc by about 50 percent.

However, Ugandan exports took a hit when a conflict broke out in neighbouring South Sudan in December and trade ground to a halt. Uganda sells mainly food, beverages and construction materials to its northern neighbour, raking in $174 million last year from exports to South Sudan, according to UEPB.

Uganda's President Yoweri Museveni sent troops to South Sudan soon after the war broke out to prop up President Salva Kiir's government, a move which helped reopen trade between the two countries.

"With UPDF (Uganda People's Defence Forces) moving in and playing a stabilising role we have seen our exports start to recover," Mutahunga added, without giving exact figures.