By Damali Ssali
Uganda is predominately an informal exporter mainly trading with its neighbours. According to 2014 Bank of Uganda (BoU) data, the country registered an informal trade surplus.
The 2014 BoU data indicates that informal trade accounted for more than 30 per cent of all Ugandan exports, earning about Shs1.5 trillion. DR Congo, which fetched $139m, was Uganda’s largest informal exports destination followed by South Sudan and Kenya, which fetched $119m and $92m, respectively.
Additionally, data from BoU further indicates that informal cross-border exports earned a combined $595m in the 2017/18 financial year with DR Congo continuing to dominate as Uganda’s export destination fetching up to $291m in the period. It was followed by Kenya at $149m, Rwanda and South
Sudan at $54m each while Tanzania fetched some $45m.
Agricultural produce, mainly beans, maize, sugar, other grains, bananas and fish as well as locally manufactured goods were the most informally exported items during the period.
Therefore, it is quite important and urgent, that while priority continues to be given to formal traders, some focus and steadfastness ought to be directed towards informal cross border traders too.
A 2015 study conducted by United Nations Economic Commission for Africa indicated that informal trade in Uganda provided more than 59 per cent of non-farm private sector jobs, underscoring its significance in addressing the employment challenge that Uganda finds herself in.
Different studies indicate that more than70 per cent of women-owned businesses are in informal trade, accounting for a significant majority of employment in this sector.
Women spend much of their income on uplifting family livelihoods, among which include buying food, paying school fees and re-investing in their enterprises. Therefore, informal trade, which is mainly dominated by women, must be supported to enable women improve their disposable income to contribute towards social and economic development.
It is important to highlight that women informal cross border traders face a number of unique challenges that limit their growth opportunities. Key among the challenges is low knowledge of export requirements, lack of understanding of quality inspection procedures, lack of information on markets, lack of access to certification procedures and general gender based harassment as well as the general lack of appreciation for the certification processes.
The challenges are compounded by the limited time that women have to invest in their enterprises therefore they have to rely on middlemen to help them uplift and get value for their businesses.
However, amid all this, informal cross border traders have been organizing themselves into associations, cooperatives, and Saccos, which will help them to reason and speak with a single voice to advance their cause.
Additionally, government through the Ministry of Trade and the Ministry of East African Community Affairs is addressing some of these challenges by developing several policy frameworks such as Cross-Border Trade Strategy, which seeks to increase the value of Uganda’s exports of the specified products and services to the targeted markets over the next five years. Other polices are Micro, Small and Medium Sized Enterprise Strategy and the Cross-Border Trade Charter.
Government has also appointed district commercial officers in every district and established regional integration centres at some busy border points and Uganda Revenue Authority is implementing the Women Trader’s Trade Facilitation Framework.
Finally, there are also some other agencies that are supporting cross border trade such as the Stanbic Business Incubator, which is providing business skills development to MSMEs, AbiTrust which is providing support to enhance the export capacity of agri-businesses and Financial Sector Deepening which is looking at provision of inclusive finance.
However, even with this kind of arrangement, there is need to ensure that the full spectrum of informal cross border traders is identified and supported to respond to existing constraints such as non-tariff barriers, limited export capability, lack of information, financing and exclusion of women.
This must be mitigated by putting in place comprehensive interventions and policy regulatory frameworks that support informal cross border traders given that an all-inclusive approach will ensure that Uganda leverages on its geographical location to access the markets around it.
We also need to enhance capacity of small and medium enterprises to provide products and services that meet export standards to ensure easy penetration to intra-regional markets. This will not only enhance cross-border trade but will also promote social and economic development of Uganda.
Informal cross border trade provides a significant source of employment, which, if enhanced, can be the bedrock of the social economic transformation of Uganda.
It is also an economic buffer that can contribute to sustainable, inclusive and youth employment.
Damali Ssali is a Trade Development Expert.
Fanfare in Masaka as MTN launches “MoMo Nyabo” promo
By Our Reporter
Business was brought to a standstill in Masaka town on Friday afternoon as MTN Uganda launched the second edition of the “MoMo Nyabo” campaign which is aimed at encouraging customers to transact using Mobile Money.
The campaign which was officially launched during a press briefing held at Brovad Hotel was marked by a flurry of fanfare, much to the excitement of the town dwellers.
The launch was followed by a procession around the town displaying the brand new Toyota Wish cars and motorbikes that will be given away during the campaign.
It culminated in a mega concert which was hosted at the Masaka Recreation grounds. Revelers were entertained by Uganda’s top artistes including Jose Chameleone and Bebe Cool among others.
During the concert, the first winners in this year’s MoMo Nyabo campaign were also announced. Kigundu Rashid and Steven Nanziga emerged the lucky winners and each walked away with a motorcycle.
Meanwhile, prizes worth Ugx 1.5billion will be won by lucky customers in the eight week campaign.The prizes include 24 cars, 32 Boda bodas, 160 smartphones as well as mobile money.
The MoMo Nyabo promotion is part of a series of offers the telecom company has launched in recent times to reward customers including bonus on data bundle purchase via MTN Mobile Money and a few days ago, MTN slashed mobile money sending rates by more than half.
“This will be a double win for our customers. First of all, they will be sending money at half price. While doing that, they will be entered into a draw to win one of those exciting prizes. So in a way, all our customers will be winners”. Samuel Gitta, MTN Uganda’s Ag. GM Risk & Compliance said.
“We are continually evolving to make our customers’ lives better. We value and appreciate our customers and all that we are doing is just to give back to them for continuing to support us,” he added.
For customers to stand a chance to win one of the prizes, all they have to do is dial *165*1#. Customers will then automatically enter into a draw to win the exciting prizes.
Vivo Energy in joint venture with Kuku Foods to accelerate roll-out of KFC restaurants
By Our Reporter
Vivo Energy plc (Vivo Energy), the pan-African retailer and distributor of Shell and Engen-branded fuels and lubricants, has agreed to form a non-fuel joint venture to accelerate the roll-out of KFC restaurants in Kenya, Uganda and Rwanda. The 50:50 joint venture will manage and operate the restaurants in the three markets on behalf of Kuku Foods East Africa Holdings (Kuku Foods), who will remain the local KFC franchisee. Completion of this transaction is subject to standard legal agreements and regulatory and competition authority approval.
The restaurants, 22 in Kenya and 8 in Uganda, are located in shopping malls, city centre locations, and service stations. Kuku Foods plans to open its first KFC restaurant in Rwanda in 2019.
The 5 KFC restaurants operated by Kuku Foods Tanzania, the KFC franchisee in Tanzania, will not form part of the transaction.
The joint venture will enable a significant increase in the number of KFC restaurants in the portfolio in the coming years. It is envisaged that many of the new restaurants will be opened at Vivo Energy’s network of service stations across Kenya, Uganda and Rwanda, which leverages Vivo Energy’s retail footprint, with more countries to be considered in the future, based on market opportunities.
Commenting on the transaction, Christian Chammas, CEO of Vivo Energy, said: “We are delighted to be partnering with Kuku Foods to replicate the KFC joint venture model we pioneered in Botswana and Côte d’Ivoire. Kuku Foods shares our ambition to invest in order to grow the number of restaurants and give more African customers access to the internationally renowned KFC brand. This partnership further demonstrates our ambition to continue to offer more convenience to satisfy the evolving needs of our growing number of African customers.”
Derrick Van Houten, Group CEO of Kuku Foods and Principal Operator of the KFC franchises, added: “Having launched our first KFC in East Africa in 2011, we have successfully grown the business over the last eight years. We are delighted to announce this new partnership with Vivo Energy to continue this growth, bringing our world-renowned KFC products and experience to as many customers as possible.”
KFC Africa’s General Manager, Tarun Lal concluded: “We are delighted that KFC can leverage the joint venture entered into between Vivo Energy and Kuku Foods to continue to grow its network of KFC restaurants in Africa. We are confident that the KFC franchisee will continue to provide customers with a great KFC experience, driving improvements in customer
service and quality through its relationship with Vivo Energy.”
Rising Woman initiative returns for second edition
By Our Reporter
Monitor Publications Limited’s (MPL) flagship brand Daily Monitor in partnership with dfcu Bank’s Women in Business Program and Uganda Investment Authority(UIA) have launched the second edition of the Rising Woman initiative.
The Rising Woman initiative which was started last year under the theme ‘Taking your business ahead’ is meant to recognize, celebrate and promote a culture of mentorship among women in business in Uganda and targets Ugandan business women, Small scale investors, Entrepreneurs, Members of Uganda Women Entrepreneurs Association Limited (UWEAL), Members of Uganda Small Scale Industries Association (USSIA) and Uganda Manufacturers Association (UMA) members.
Speaking at the launch, dfcu Chief Executive Officer Mathias Katamba called the initiative a “…fundamental step on the path to creating a financially-enabling environment for female entrepreneurs.”
He went on to note that the bank has created programs and products which specifically address the financial needs of women across the country. “As a financial institution that believes in building thriving communities, dfcu embarked on a journey to creating an enabling environment for Small and Medium Women owned Enterprises starting in 2007, with the introduction of the Women in Business program. Our primary motivation is the fact that despite women making up over 52% of the population of Uganda, it is not reflected in the ratio of women who have access to financial services.”
“Through the program, we work with women in diverse ventures to turn business ideas into realities which in turn become vehicles for change in communities. With over 53 years of lending to SMEs, and at least 10 years running the WiB program, dfcu Bank understands the financial needs of women and goes ahead to provide tailor-made solutions for them,” Katamba added.
He also officially announced the call for business proposals through the bank’s official website which will begin the contention for the top 10 business ideas.
The proposal submission is already underway and will run up to 20th September 2019. The top 3 winners will walk away with Ugx 15 million, Ugx 10 million and Ugx 5 million respectively and the top 10 will take part in an all-expense study tour trip to Nairobi.
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