Impressive Uganda, EU trade balance hailed as business forum opens at Munyonyo

The balance between Uganda has been hailed as being impressive but with calls to further amplify it.

Speaking during the opening ceremony of the third Uganda-EU business forum at the Speke Commonwealth Resort Munyonyo, the Minister for Finance, Matia Kasaija said Uganda’s exports to the European Union remained resilient even after the onset of the Covid pandemic.

“Uganda’s exports to Europe posted an increase from $502million in the financial year 2019/2020 to $770.4 million in the financial year 2022/2023. The trade balance has been largely in favour of Uganda with the country posting a trade surplus of $33.9million in the financial year 2022/2023 despite its reliance on mainly low value-added agricultural exports like coffee, fruits, cereals and vegetables,” Kasaija said.

The European Union Ambassador to Uganda, Jan Sadek  also shared delight at the healthy trade turnover, currently at €1.5 billion (shs6.2 trillion) between Uganda and the European Union.

"I congratulate Uganda, because since 2022, Uganda have a positive trade balance with the EU. In 2022, Uganda exported EUR 800 million and imported EUR 700 million from the EU. This is very different from Ugandan trade with other global partners, where the import dominates. Trade is not a competition and it is not a zero-sum game, but I think Ugandan exports are worth an applause,"Sadek said.

He said since 2020, Uganda's exports have doubled which he said is partly attributed to the previous business forums.

"One of the largest export products to Europe is coffee and the EU buys 65 percent of Uganda’s coffee export. I'm a coffee enthusiast myself, for its taste but also for the role it plays in bolstering Uganda’s economy. I see coffee as a delicious and beautiful link between Uganda and the EU."

The finance minister, Matia Kasaija said this impressive performance is a testament to the huge potential Uganda has in maintaining this momentum but also registering better performance with a shift from low to high value-added exports.

The minister said as of 2022, the European Union was Uganda’s largest Foreign Direct Investment source with over 38% of FDI inflows originating from the EU partner states, the largest share of these inflows coming from Netherlands at $1.11 billion.

“The European Union is also Uganda’s key tourism partner accounting for over 50% of the European arrivals with Germany contributing the highest number from the EU.”

He said the EU has been a major partner in fostering development and technical assistance for several projects in Uganda especially under infrastructure, forestry, agriculture, fishing and human capital development.

Myriam Ferran, the deputy director general in charge  of international partnerships at the European Commission said the Global Gateway is the EU’s strategy to support economic development, foster sustainable investments in connectivity and to engage with the private sector for achieving transformative change in our partner countries , noting that Uganda can tap into it.

"It is a distinctively European offer. We work with partner countries like Uganda to address their own priorities in support of shared objectives. And we do so in a rules-based and sustainable way. Our partners know that when they choose to team up on Global Gateway projects, the EU offers attractive financial conditions to reduce risks and improve debt sustainability. Projects are inclusive and transparent, ensuring the highest environmental, social, and labour standards. Our quality projects help build trust,"Ferran said.

Not yet time to celebrate

The chairperson of the Uganda Investment Authority, Morrison Rwakakamba said whereas the trade balance figures between Uganda and the European Union are impressive, it is not yet time to celebrate as more is needed to be done.

“What we need is actually increase the gear so the volume of exports goes up but most importantly, to sustain this trade balance, we must diversify it. Currently, most of our exports are in agricultural products like flowers, vegetables and fish but we need to go into electrical products,medicines and medical equipment,” Rwakakamba said.

“We need more investments from the European Union states to come here other than investing in Europe , America or Asia. We want them to bring this capital and invest here to grow out FDIs.”

Rwakakamba said  Uganda is an appealing investment destination in East Africa and Africa at large with one of the highest rate of return on investment.

He said investing in Uganda is also advantageous in terms of a large East African, and African Continental Free Trade Area markets with over 1.3 billion people that can be tapped into basing in Uganda.

 The forum

The three day business forum will run up to Thursday, March, 7  with an objective of attracting European investment in Uganda and to increase trade and notably Ugandan exports to the EU.

According to the EU Ambassador to Uganda, the forum will have business to business matchmaking between Uganda and European investors but also boost trade and investment in Uganda.