WE NEED TO GET OUT OF OUR WAY

Last week I had the privilege of interacting with exporters of agricultural produce and was pleasantly surprised to discover that there are people in this country who while they may have reservations about how the country is run or the economy is behaving, have decided they will make the best of the situation anyway.

One exporter told me he exports a ton a day of bananas – matooke, bogoya, gonja and ndizi, through Entebbe airport but estimates that at least two Fuso trucks of bananas fly out of Entebbe daily. A FUSO truck does about eight tonnes so that would be 16 tons daily.

Following the meeting I went to the Uganda Bureau of Statistics web page and found that in 2018 we exported 16,336 tons of bananas. This comes down to about 45 tons a day, assuming we are exporting every day of the week.

As I learnt at the event, “The Uganda-UK Agri-connect conference” organized by the Uganda Export Promotion Board (UEPB) and the UK’s Department for International Trade, that these numbers which have grown over the last two decades are in spite of huge challenges of policy and infrastructure faced by our people.

Banana exports are a good test case for us. Uganda is the largest producer of bananas in the world after India and the highest producer by a mile in Africa. Tanzania produces about three million tons to our 12 million tons. So we are exporting less than a percent of our production.

There is a worldwide demand for ndizi and bogoya as a fruit but who buys matooke and gonja abroad I wondered. I was duly informed by one exporter that apart from the Ugandan diaspora there is great demand from the Congolese, Rwandans, Burundians and West Africans.

So there may be scope of increasing exports by a factor of ten, to one percent of our production or 120,000 tons annually. The possibility is mind boggling.

Last year we earned $6.4m from the export of bananas.

Why the banana statistics caught my eyes is that these were being exported in quantities I never imagined, through Entebbe airport.

But a cursory look down the list of non-traditional exports shows the untapped potential of non-traditional agricultural exports. Fish led the pack bringing in $210m in export receipts, followed by maize, $147m, beans and legumes, $144m.

And as mentioned earlier this is in spite of this government’s inadequate support and sometimes obstruction of this progress.

"High freight charges out of Entebbe were a big issue, but officials of the logistics industry who were present in the conference pointed out that if there was as much freight coming in as was going out, for one, the rates would fall...

However, the greatest impediment to the long term development for the export of perishable agricultural products was the inadequacy of the cold storage facilities at the airport. Exporters complained of their consignments being held up for ours in the blazing sun because of the limited capacity of the cold rooms at the airport.

Exporters consignments are often rejected by their clients because he goods are spoilt when they arrive at their intended destinations. One exporter complained he had lost $30,000 just the previous week because his goods were rejected in Europe.

I came away from the event with two major learnings. That the cliché that we are not living up to our potential is true and obviously understated.

While challenges still remain in generating the quantities, up to the standards and quality required in markets, this can be easily surmounted with correct strategy and execution from the national to the farm level.

"But my biggest take away was reinforcement of the belief that the one of the greatest legacies of this government will be that they liberalized the economy. That an individual can see an opportunity and organize himself or herself to take advantage of it without recourse to higher authorities is what has spurred this exponential growth in non-traditional exports. None if any is driven by government agencies ....

Nontraditional exports overtook traditional exports – listed as coffee, cotton, tea and tobacco by UBOS in 2001 and have never looked back, to the point that last year we exported almost five times as much in non-traditional exports $3b than traditional exports of $659m.

Liberalizing the economy unlocked individual initiative which was stifled by the giant state marketing monopolies which were not even doing a decent job.

As an example I met a lady who is doing a rip roaring business exporting sugar cane to Germany! Shipping out a few tons a month to serve a juice bar chain in Hamburg.

UBOS has no entry for sugar cane exports in its official statistics.

That being said there is a lot more government can do in facilitating the whole agricultural value chain. Production needs to and can be pushed up several fold across everything we produce through improved farming methods, irrigation and improved post-harvest handling. Huge improvements are need in infrastructure to improve access to markets. Paved roads and improved feeder roads are good but a functioning railway to significantly reduce costs is critical. Export promotion and other support for exporters needs to be beefed up as many of these exporters cannot break into foreign markets unassisted. In the same vein we need to commit to some sort of agricultural financing model that does not use existing commercial banks as a delivery model.

Another impression I got is that apart from paying lip service to the fact that most of our people -- at least seven in ten Ugandans, derive a livelihood from agriculture, government is behaving as if we have all the time in the world to tap into this bounty. That it will always be there for us to exploit....

A case in point is the fact that the UK imported $1.8b in coffee products last year, Uganda’s share of that figure is $1.8m or less than a percent. If you think about it as the largest coffee exporter on the continent, Commonwealth member state, how can’t we manage at least five- or even ten percent of the UK market? It boggles the mind!