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«Malaba Mutukula Lwakhakha May 2007 FOREWORD The Informal Cross Border Trade (ICBT) Survey is an economic survey covering unrecorded trade ...»

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Imports from DRC through Vura are mainly agricultural commodities while exports from Uganda are industrial products.

3.3.5 Odramachaku Odramachaku is located on the western side of Arua town, a distance of about 10 Km. It is connected to Arua by a good murrum road via Lia customs post. Odramachaku is adjacent to Lia customs post that handles official trade, and transit goods destined for DRC.

The bulk of Ugandan exports through Odramachaku are industrial products like electronics, textiles, leather products and mattresses. Imports from DRC consisted of agricultural commodities. A lot of unrecorded trade takes place on market days (Wednesdays and Fridays), which are twice a week.

163.3.6 Phaidha

Phaidha customs post is located in Nebbi district near the border with DRC. It has several entry and exit routes like Alisi, Asina, Nyibola, Awasi, Padea and Zeu. These entry points cover a vast area without physical barriers where goods are ferried into the country informally to Paidha post. Of these, Nyibola and Padea are monitored under ICBT Survey because of the volume of trade involved. Trade through Alisi and Asina routes is insignificant, while Zeu was left out because of insecurity on the DRC side.

Other border points that exist along the Uganda and Congo border which are not monitored include Kerwa, Goli, Erusi, Parambo, and Panyimulu which are also experiencing ICBT flows. It is important to note that communities along this economic boundary on either side of the countries speak Alur and practice more less similar cultures.

Paidha has a well-established Revenue Authority Office and a Police Post, which were key to the successful execution of the survey.

The main imports from DRC include agricultural produce like unprocessed coffee, fish, timber, avocadoes, groundnuts, mangoes, bananas, millet, and dry cassava. Meanwhile exports consisted of industrial products like clothes, shoes, maize flour, mattresses, and beverages. The Ugandan shilling is the main currency used in trade transactions.

3.4 Border Posts along the Tanzanian Border 3.4.1 Mutukula Mutukula border post is situated in southern Uganda in Kebisagazi parish, Kakuuto subcounty, Rakai District. It is the key crossing point between Uganda and Tanzania, and, is about 220Km from Kampala. The station is connected to a tarmac road with good telecommunication network. There are two other crossing routes, which are not monitored, namely Mukabawo and Kulwazi. Besides these two, there is a 7feet trench, which was dug in the 1970s to separate the two countries, that is currently filled with, logs and sand, and, is used by some vehicles to ferry goods in guise of carrying firewood.

Mutukula has been experiencing unprecedented formal and informal trade flows. The station also handles transit goods and is busy throughout the week with the peak being the market day of Saturday.

A Pick up Loaded with unrecorded agricultural produce destined for Tanzania at Mutukula Border Post The major exports to Tanzania included Maize, Beans, clothes, shoes and maize flour, while imports comprised of coffee, peas and rice.

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3.5 Border Posts along the Rwanda Border 3.5.1 Mirama Hills Mirama Hills is located in Southwestern Uganda, approximately 38 Kilometers from Ntungamo town. The area is fairly hilly and the access road from Ntungamo is quite rough and murram. There is good mobile telecommunication network on both sides and electricity being only on the Rwandan side of the border post. Lack of electricity has limited traders engaged in maize and millet business to process into flour as a finished product, which is on high demand in Rwanda.

Informal trade transactions at Mirama hills are somewhat low compared to other border posts especially for unrecorded imports. The busy days are mainly market days of Wednesdays and Fridays. Wednesday is a market day in Rwanda while Friday is a market day in Uganda.

The main modes of transport used in conveying goods are bicycles and head/hand. The main exports to Rwanda through Mirama include clothes, shoes, maize, maize flour and bananas.

Kamwezi and Kikagati are the other nearby busy crossing points along the borders of Rwanda and Tanzania with Uganda respectively.

3.5.2 Katuna Katuna is located in the southwestern region of Uganda in Kabale district. It is about 90 Km from Kigali and 22 Km from Kabale towms. It is the busiest customs post along the Rwanda/Uganda border for both formal and informal trade. It has well developed infrastructure to facilitate trade and its access road is tarmac. It’s also serves as the main transit route for formal goods to Rwanda and Burundi. All supportive government institutions like revenue, immigration and police exist with well-established offices.

Similarly, there are several other nearby routes used by informal traders along the vast border stretch. Although the volume of trade transacted through these routes may be small on ordinary days, the volume on market days reaches significant levels and when aggregated, may be highly significant. The ICBT monitoring covered only unrecorded trade flows through the main designated entrance. Moreover informal exports carried by passenger buses destined to Rwanda and Burundi could not be captured.

It was observed that some exports cross regularly at night through the main entrance for purposes of tax evasion on the Rwandan side, which may contribute to under estimation of true levels of trade between the two countries. The three dominant currencies used in trade transactions are the Ugandan shilling, United States dollars and Rwandese francs.

The main informal exports through Katuna included industrial products like maize flour, sugar, bread, while agricultural produce were irish potatoes, maize, beans, bananas and ground nuts. The main imports were cowpeas, avocados and scrap metals. The trading center on the Uganda side stocks a lot of manufactured products, which target Rwanda as an export market.

183.6 Border Posts along the Sudan Border

Sudan is a potential big market within the COMESA region following the conflict resolution in the Southern Sudan and cessation of hostilities in Northern Uganda. The current peace prevailing in the Southern Sudan led to unprecedented levels of trade flows. The Nimule route was opened in 2006 hence reducing the trade volume through Oraba significantly, although it is not monitored under ICBT survey. In the same year, there was some insecurity along the border where some traders lost merchandise, which affected trade flows through Oraba and Nimule border posts.

3.6.1 Oraba

Oraba customs post is located in Northwestern Uganda along the border with Sudan.

Oraba is about 87 kilometers from Arua town and is a key gateway to various Sudanese towns like Yei, Morobo, Maridi and Juba. Before 2006, it was the main route for goods originating from Uganda, both from Kampala and Arua towns. However, the peace negations between the government of Uganda and the LRA rebels opened Nimule route which is nearer to Juba. In addition, goods in transit from Kenya destined to Sudan also use the same route. The road from Kampala to Arua is tarmac except for a small stretch between Karuma and Pakwach, and, from Arua to Oraba is murram.

The customs post has supporting government institutions like URA, the Police, Immigration and security agencies. The people along the border post speak similar local languages in addition to English and Swahili. The main currencies used are the United States Dollar and the Uganda Shilling. The immigration and Revenue officials on the Sudanese side sometimes harass traders demanding for bribes hence acting as a barrier to trade.

The bulk of Ugandan exports are industrial products like beer, sodas, cooking oil, building materials (iron sheets, cement, iron bars), textiles, mattresses, exercise books etc.

Imports are mainly agricultural produce, which are seasonal in nature.

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60,000 40,000 20,000

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The analysis classifies the products into three categories of Agricultural, Industrial and Other products. Industrial products are all items that have been processed under the International Standard Industrial Classification (ISIC). This category includes processed agricultural commodities and manufactured goods. Other products category are the goods that are not classified under the two groups above and are mainly natural resources which include Sand and Soil (Murram), Crude salt, Stones and Water.

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The study confirmed further that all the five countries neighbouring Uganda are actively Uganda was a involved in informal cross border trade transactions of all categories of products. Uganda net food remained the net food exporter to all the neighbouring countries as observed also in the exporter to all previous survey findings. Although Uganda registered a considerable trade surplus under neighbouring countries agricultural products exported to Kenya by US $ 67.0 Million, it recorded a trade deficit of approximately US $ 34.0 Million on imports of industrial products from Kenya. Under other products, which are mainly natural resources, a small deficit was recorded also with Kenya and Tanzania.

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Uganda’s unrecorded/informal export trade with Tanzania increased substantially from US $ 2.8 million in 2005 to US $ 21.5 million in 2006. While informal imports also increased from US $ 0.6 million to US $ 4.3 million in the same period. This trend shows that trade between the partner states is likely to increase to unprecedented levels in the near future.

Uganda’s leading agricultural exports to Tanzania were maize and beans, whose values were estimated at US $ 5.8 million (30,288 tones) and US $ 0.8 million (1,849 tones) respectively. The other agricultural commodities exported were root crops (cassava, potatoes, and yams), groundnuts and bananas that earned a combined value of approximately US $ 0.5 million.

Under industrial products category, Uganda’s main exported commodities to Tanzania comprised of clothes (new and second hand clothes) which fetched US $ 3.9 million, followed by shoes (new and second hand shoes) whose value was estimated at US $ 3.0 million, then Bitenges earned US $ 2.3 million, while maize flour’s earnings stood at US $

1.4 million.

The unprocessed coffee was the main imported agricultural product from Tanzania under unrecorded trade during the year 2006. Coffee imports accounted for US $ 0.9 million from an estimated volume of 2,010 tones. The other agricultural products that were imported included peas, beans and rice whose values were estimated at US $ 0.8 million (376 tones), US $ 0.6 million (1,095 tones) and US $ 0.4 million (585 tones) respectively.

4.4.3 Trade with Rwanda in Major Agricultural and Industrial Products

Rwanda is the new EAC member country whose trade with Uganda has increased considerably in the last two years under informal/unrecorded trade. For instance, Uganda’s informal exports to Rwanda more than tripled from US $ 7.3 million in 2005 to US $ 25.0 million in 2006. The main agricultural products exported to Rwanda were maize, root crops, beans, bananas and ground nuts. Maize exports alone fetched US $

1.6 million (7,697 tones); followed by root crops which earned US $ 1.4 million, and then beans, bananas and ground nuts with earnings estimated at US $1.1 million, US $ 0.9 million and US $ 0.3 respectively.

The main industrial products exported to Rwanda consisted of shoes, maize flour, and clothes whose earnings were estimated at US $ 4.6 million, US $ 4.3 million, and US $

1.2 million respectively.

Meanwhile Uganda’s major agricultural imports from Rwanda were fruits, peas and hides and skins whose combined value was estimated at US $ 0.5 million. Under industrial products category, scrap and weighing scales took an estimated imports bill of US $ 0.08 and US $ 0.04 million respectively.

264.5 2006 Overall Main Informal Exports

From table 7 below, the major five overall agricultural products that featured prominently in the export trade under ICBT were Fish, Maize, Beans, Ground Nuts and Bananas (which includes Bogoya, Gonja, Matooke and sweet bananas) whose earnings stood at US $ 33.4 million, US $ 27.0 million, US $ 20.1 million, US $ 6.2 million and US $ 5.6 million respectively. The other agricultural products, which contributed substantially to informal export earnings, were Fruits, Millet, Sorghum, Eggs and Peas. Under other products category (mainly natural resources), which consisted of crude salt, tin mineral, stones, and sand had combined earnings of approximately at US $ 1.0 Million.

The main exported products under industrial goods was shoes whose earning was estimated at US $ 25.2 million representing 10.9 percent of total exports market share.

This was followed by clothes with foreign exchange earnings of US $17.6 million (7.6 percent), then maize flour fetched US $ 6.9 million ( 3.0 percent) and Bitenge/boutiques earned US $ 5.7 million representing 2.5 percent of total exports. Other exported industrial products that contributed significantly were Bags (school bags, hand bags, suitcases), Bicycles parts, Petroleum jelly, Alcohol/Waragi, wheat flour and Sodas whose combined share is estimated at 10.2 percent of total exports. Each of the other items under the industrial products category had a share of less than one percent. The top ten industrial items in this category accounted for 33.0 percent of the total foreign exchange earnings.

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Table 8 above indicate that polythene bags (Kavera) were the main imported goods under industrial products category whose value stood at US $ 25.9 million accounting for

32.1 percent of the total imports bill. This was followed by clothes with import bill of US $

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