Uganda exports $2.4 billion and imports $6 billion worth of goods and services.
There is something wrong with this ratio. Our Balance of Payments are definitely out of whack because of such numbers.
What Uganda needs to do is to increase their exports in order to get closer to what we import.
The job for this is for the Uganda Export Promotion Board.
Importers live in countries which have regulations for receiving the products that Uganda sends them. It is the job of the Export Promotion Board to know all the regulations in each country where Ugandans export their products. These countries do not take short cuts so compliance is key.
Since the EU introduced mandatory Traceability, many countries had to change the way they do things. Learn to love technology. I will talk about Canada because it is the only country I have lived in since I left Uganda.
The Export Development Centre (EDC) is in charge of looking after all the exporters to grow markets. They also provide insurance on shipments. It costs a bit of money. They analyse and approve each country for a rate of the risk which affects how much you pay when exporting to that country. They also keep records of the particular company you want to trade with. For example, if a company has previously defaulted on payments, EDC can refuse to insure them and tell you “ship at your own risk”.
EDC also provides business advice, business plan help, business consulting, all funded by the government of Canada. You can visit their website and see for yourself. http://www.edc.ca/en/Pages/default.aspx
Payment terms are also determined by the Export Board (in our case EDC). Some countries are TT (wire before shipping) or net 60, net 90 or even net 120. So you ship and after the customer has sold the products, they have that many days to pay you. As wonderful as this sounds, you need a lot of working capital. One company I was involved with had net 15 days to pay the suppliers and yet our customers wanted net 60, 90, 120. Imagine if they default, you have emptied your bank account to ship for them and you do not get paid.
This is where the Export Board comes in because in case of default, that insurance you paid will come in handy and you will get your money in time. Might kill your operations while you wait to get the money though.
I feel strongly that the Export Promotion Board is not serving the average Ugandan who wants to grow their sales.
In 2015 when Kyambadde and team banned exporting flowers and other perishables to EU in order to avoid a total ban, pray tell me who paid the suppliers and compensated them for that ban.
The other thing is the banks have to help the exporters and help them to lock in currencies for their payments so that in case of fluctuations of the shilling, they have already locked in a rate and are less affected.
Ugandan exporters are working in the dark on their own and yet we have a board funded by the tax payers.
This board should help people to get all the training they need to comply with the import regulations for the countries where Ugandans export their products.
Electronic monitoring, clearance and tracking is very crucial. I laughed when I found out that Kenya and Uganda were signing an MoU to provide Electronic cargo tracking. Mmmmh, I had assumed that in this age, all countries have it. Generally, most countries have electronic systems where you go to a website, put in your bill of lading (BOL) and track your shipment from the point of departure to the point of destination. Shaaaa… Uganda needs help.
Martha Leah Nangalama
The writer is an IT analyst for an oil company and was a half owner of a company (5yrs) that exported perishables via Air freight and ocean freight to Europe, Asia as well Canada and USA.