The Uganda National Export Strategy 2008-2012

1.0 INTRODUCTION .................................................................. ........... 1

1.1 A STRATEGIC PARTNERSHIP ........................................................ 1 1.2 THE NES: AN INTEGRAL PART OF THE NATIONAL PLANNING FRAMEWORK .................................................................. 1

1.3 UGANDA EXPORT SECTOR: KEY CHALLENGES ...................... 1

1.4 NES RATIONALE .................................................................. 3

1.5 NES VISION AND OBJECTIVES ............................................ 3

2.0 THE UGANDA NES PROCESS ...................... ...................... 4

2.1 A PARTICIPATORY PROCESS ............................................ 4

2.2 SCOPE .............................................................................. 4

2.3 SYNERGETIC RELATIONSHIP WITH OTHER NATIONAL POLICES/STRATEGIES/PLANS ............................................. 5

3.0 STATUS OF UGANDA’S EXPORT SECTOR ...................... 7

3.1 GENERAL OVERVIEW ...................... ................................. 7

3.2 EXPORT GROWTH TRENDS ............................................ 7

3.3 EXPORT SECTOR GENERAL SWOT ANALYSIS ...................... 10

4.0 CROSS-CUTTING STRATEGIC ISSUES ...................... ........... 11

4.1 COMPETITIVENESS ISSUES ...................... ................................. 11

4.2 QUALITY AND STANDARDS MANAGEMENT ISSUES ........... 16

4.3 EXPORT COMPETENCE DEVELOPMENT ISSUES ...................... 19

4.4. TRADE FINANCE ISSUES ....................................................... 22

4.5 TRADE INFORMATION AND CUSTOMS DOCUMENTATION ISSUES ............................................ 25

4.6 MARKET ACCESS ISSUES AND MARKET ENTRY STRATEGIES...... 28

5.0 NES STRATEGIC PRIORITY SECTORS ................................. 34

5.1 CRITERIA FOR SELECTING PRIORITY SECTORS ....................... 34

5.2 THE COFFEE SECTOR ........................................................ 35

5.3 THE FISH SECTOR .................................................................. 40

5.4 THE COTTON, TEXTILES AND GARMENTS SECTOR ............ 47

5.5 THE TEA SECTOR ................................................................... 55

5.6 THE FLORICULTURE SECTOR ............................................. 64

5.7 THE SERVICES SECTOR ....................................................... 70 ii The Uganda National Expor t Strategy 2008-2012

5.8 THE FRUITS AND VEGETABLE SECTOR ................................. 86

5.9 THE DAIRY SECTOR .................................................................. 93

5.10 THE CEREALS, PULSES AND OIL SEEDS ................................. 100

5.11 NATURAL INGREDIENTS FOR THE FOOD PHARMACEUTICALS AND COSMETIC INDUSTRIES ............................................ 105

5.12 THE COMMERCIAL HANDICRAFTS SECTOR ...................... 111

5.13 THE MANUFACTURING SECTOR ................................. 117

6.0 FINANCING THE STRATEGY ............................................. 118

6.1 FINANCING NES INITIATIVES ............................................ 118

6.2 SECRETARIAT AND NES COORDINATION COSTS ........... 118

7.0 INSTITUTIONAL FRAMEWORK FOR NES IMPLEMENTATION ................................................................... 119

7.1 NES MANAGEMENT STRUCTURE ............................................ 119

7.2 THE NES STEERING COMMITTEE ............................................ 119

7.3 MONITORING AND EVALUATION ............................................ 120 ANNEXES ................................................................................................... 121 A. NES PRIORITY SECTORS VALUE CHAINS ...................... 122 1. COFFEE VCAs .................................................................. 122 2. FISH VCAs .............................................................................. 124 3. COTTON, TEXTILES AND GARMENTS VCAs ............................. 126 4. TEA VCAs ............................................................................. 128 5. FLOWERS VCAs .................................................................. 130 6. TOURISM VCAs .................................................................. 131 7. EDUCATIONAL SERVICES VCAs ............................................ 133 8. FRUITS AND VEGETABLE VCAs ............................................ 138 9. DAIRY SECTOR VCAs ....................................................... 140 10. CEREALS, PULSES AND OIL SEEDS VCAs ................................. 142 11. NATURAL INGREDIENTS VCAs ............................................ 144 12. COMMERCIAL HANDICRAFTS VCAs ............................................ 146 B. OTHER ANNEXES ............................................................................. 148

1.0 TABULATED DATA ON CRITERIA FOR THE SELECTED NES STRATEGIC PRIORITY SECTORS ................................. 148

2.0 FORMAL GOODS EXPORTS –VOLUME AND VALUE 2002-2006 ............................................................................. 152

3.0 NUMBER OF EXPORT COMPANIES BY PRODUCT 2004-2005... 153

4.0 ILLUSTRATIVE STANDARDS AND REQUIREMENTS FOR SELECTED PRODUCTS ....................................................... 154

5.0 LIST OF NES DESIGN PARTICIPANTS ................................. 156 iii The Uganda National Expor t Strategy 2008-2012 ACRONYMS ACODE Action Coalition for Development and Environment AGOA African Growth and Opportunities Act AICAD African Institute for Capacity Development ASYCUDA Automated System for Customs Data BDS Business Development Services BMU Beach Management Units BOU Bank of Uganda BRC British Retail Consortium CAA Civil Aviation Authority CAO Chief Administrative Officer CBC Customs Business Centre CBI Centre for the Promotion of Imports from Developing Countries CDO Cotton Development Organization CET Common External Tariff C&F Clearing and Forwarding CICS Competitiveness and Investment Climate Strategy COMESA Common Market for Eastern and Southern Africa DCO District Commercial Officer DDA Dairy Development Authority DFID Department for International Development (UK) DFR Department of Fisheries Resources DP Development partners DTIS Diagnostic Trade Integrated Study EAC East African Community EBA Everything But Arms ECGS Export Credit Guarantee Scheme EPA Economic Partnership Agreement ERS Export Refinance Scheme EU European Union EUREPGAP Euro-Retailer Produce Good Agricultural Practices FAUEX Federation of Associations of Uganda Exporters FDI Foreign Direct Investment FRRI Fisheries Resources Research Institute FHL Fresh Handling Limited FOB Free on Board FTA Free Trade Area GAP Good Agriculture Practices GDP Gross Domestic Product GMO Genetically Modified Organisms GMP Good Manufacturing Practices GOU Government of Uganda GSP Generalised System of Preferences HACCP Hazard Analysis and Critical Control Points HORTEXA Horticulture Exporters Association iv The Uganda National Expor t Strategy 2008-2012 HPOU Horticulture Promotion Organisation of Uganda ICBT Informal Cross Border Trade IFAD International Fund for Agricultural Development IFIs International Financial Institutions IFWG Integrated Framework Working Group IMF International Monetary Fund ISO International Organization for Standardization IT Information Technology ITC International Trade Centre JICA Japan International Cooperation Agency KARI Kawanda Agricultural Research Institute LDC Least Developed Countries LGs Local Governments LVFO Lake Victoria Fisheries Organisation MAAIF Ministry of Agriculture, Animal Industry and Fisheries MAAPS Marketing and Agro-processing Strategy MEMD Ministry of Energy and Mineral Development MOFPED Ministry of Finance, Planning and Economic Development MJCA Ministry of Justice and Constitutional Affairs MICT Ministry of Information, Communications, and Technology MIS Market Information Systems MOLG Ministry of Local Government MOES Ministry of Education and Sports MOW Ministry of Works, Transport and Communication MSY Maximum Sustainable Yield MSMEs Micro Small and Medium Enterprises MTTI Ministry of Tourism, Trade, and Industry MWE Ministry of Water and Environment NAADS National Agricultural Advisory Services NARO National Agricultural Research Organization NBFP National Budget Framework Paper NCDC National Curriculum Development Center NEMA National Environment Management Authority NES National Export Strategy NFA National Forest Authority NGO Non-Governmental Organization NOGAMU National Organic Agriculture Movement of Uganda NPA National Planning Authority NTP National Trade Policy OECD Organization for Economic Co-operation and Development OPM Office of the Prime Minister PEAP Poverty Eradication Action Plan PFA Prosperity For All PIP Pesticide Initiative Program PIRT Presidential Investors Roundtable v The Uganda National Expor t Strategy 2008-2012 PMA Plan for Modernization of Agriculture PSFU Private Sector Foundation Uganda PSOM Programma Samenwerking Opkomende Market Programme RAFU Road Agency Formation Unit ROO Rules of Origin RTA Regional Trade Arrangements SADC South African Development Community SCOPE Strengthening the Competitiveness of Private Enterprise SEP Strategic Exports Program SHFs Small Holder Farmers SIDA Swedish International Development Agency SPS Sanitary and Phytosanitary Standards SSA Sub-Saharan Africa SWOT Strengths, Weaknesses, Opportunities and Threats TBT Technical Barriers to Trade TEXDA Textiles Development Agency TUNADO The Uganda National Apiculture Development Organization UAE United Arab Emirates UBOS Uganda Bureau of Statistics UCC Uganda Communications Commission UCDA Uganda Coffee Development Authority UCEF Uganda Coffee Exporters Federation UCFFA Uganda Commercial Fish Farmers Association UCGEA Uganda Cotton Growers and Exporters Association UEPB Uganda Export Promotion Board UFA Uganda Fisheries Authority UFEA Uganda Flower Exporters Association UGSTDP Uganda Sustainable Tourism Development Programme UIA Uganda Investment Authority UIP Uganda Integrated Program UIRI Uganda Industrial Research Institute UMA Uganda Manufacturers Association UNBS Uganda National Bureau of Standards UNCCI Uganda National Chamber of Commerce and Industry UNCTAD United Nations Conference on Trade and Development UNDP United Nations Development Programme UNFFE Uganda National Farmers Federation UNIDO United Nations Industrial Development Organization URA Uganda Revenue Authority URC Uganda Railways Corporation USAID United States Agency for International Development USh Uganda Shilling UTA Uganda Tea Association VAT Value Added Tax WB World Bank WFP World Food Programme vi WTO World Trade Organization The Uganda National Expor t Strategy 2008-2012 Republic of Uganda FOREWORD T ransformation of Uganda’s economy is one of the fundamental goals of the current government. We have very clearly pronounced ourselves on this issue in the NRM Election Manifesto, the Poverty Eradication Action Plan and the subsequent programme we have designed to economically empower all Ugandans, the National Prosperity for all (PFA). Uganda’s per capita export ratio of US$ 82 for both goods and services must be rigorously raised to at least US$ 200 in the next few years. Countries such as Singapore that had a similar level of economic development with Uganda two decades ago, now enjoy a per capita export ratio of well over US$ 40,000! To achieve transformation requires investment in improving the quality of life of our people through health and education. We have made formidable strides in this direction with every Ugandan being able to go to school. Literate Ugandans will undoubtedly be better contributors to export development. We now need to invest in sectors of our economy that are capable of enabling Uganda earn money from both the local and the international markets. I have argued before that the transformation of our economy cannot be achieved by handouts from donors but through effective trade. The export sector can play a fundamental role in transforming our country through trade but only if it can develop beyond exportation of primary commodities that are characterized by poor terms of trade. To earn better values and realize substantial contribution of the Sector to our GDP, we must invest in value addition and processing, improve productive capacities at home and avail the necessary business supportive infrastructure and climate. This National Export Strategy contains a plan to guide specific priority sectors to both expand and metamorphose so as to generate more revenue into our economy. It also offers all policy makers, government functionaries and private sector leaders a framework to guide coordinated support for national export development. I call for total commitment from everyone towards its implementation. We should all be able to monitor and review it regularly and after 5 years, we should take stock of our progress and achievements. I am aware that both the Public and the Private Sectors have worked together to formulate the Strategy. There can be no better institutional framework to implement the strategy than this same Public-Private sector genuine partnership. Government will continue to spur and support such efforts. I am pleased to forward the Strategy for implementation. vii The Uganda National Expor t Strategy 2008-2012 Republic of Uganda Statement by the Minister of Tourism, Trade and Industry I n the Ministerial Policy Statement of 2006/07, My Ministry committed itself to designing a National Export Strategy (NES) to principally serve as a holistic national medium term plan to revamp the export sector. I am happy that this commitment has been fulfilled by UEPB and other key Stakeholders. The NES is meant to further improve the export sector’s positive performance that has experienced an average growth rate of 18% between 2002 - 2006. As we launch the Strategy, let me briefly highlight its importance in furthering the country’s trade objectives and goals as stipulated in the National Trade policy, and recommendations of the Diagnostic Trade Integrated Study (DTIS), which the Ministry of Tourism, Trade and Industry concluded in 2007 in cooperation with our development partners in the Integrated Framework. NES fulfills statutory obligation No. 6 of the UEPB Act that requires the institution to develop strategies for national export development. NES has been approved by cabinet as an instrument of the National Trade Policy and in particular, it provides a comprehensive framework for developing detailed plans for the export sector. It focuses on coordinated action on 12 strategic sectors, with demonstrated export capacity and others that have enormous potential for export. The NES places emphasis on stepping up production organization, value addition and marketing. These are important ingredients of the country’s national trade policy. It also details our action plans on several other issues that affect export performance across all the sectors. These include; Quality and standards management, Trade Finance, Infrastructure related issues and Export development skills. Some of these were highlighted by the DTIS I have already referred to above. The NES also takes into account the Investment and Competitiveness Strategy (CICS) and in particular seeks to deliver international competitiveness of Uganda’s productive sectors. This is one of the major objectives of CICS. Let me also state that NES makes important strides to implement the Prosperity for All (PFA) Program. By ensuring coordinated and comprehensive actions and initiatives to stimulate production and international marketability of products across twelve actual and potential export sectors, the NES will undoubtedly lead to creation of more wealth for many Ugandan communities linked to the value chains of these sectors. Lastly I thank UEPB, NPA, PSFU and the entire national team that formulated the NES. Special thanks also go to the Commonwealth Secretariat, which funded the process and provided extensive technical assistance. I also recognise the International Trade Centre that technically supported the process through their international and local consultants . Let us again work together to implement the strategy to help transform the country’s export sector in line with the Government’s overall goal of economic and social transformation of Uganda. Hon. Janat .B. Mukwaya Minister viii The Uganda National Expor t Strategy 2008-2012 PREFACE AND ACKNOWLEDGEMENTS T his NES has been prepared with the financial and technical support of the Commonwealth Secretariat, The International Trade Centre and the Government of the Republic of Uganda. The President, H.E Yoweri Kaguta Museveni has been the patron of the process and formally gave full support to the team formulating the Strategy in a meeting he held with the UEPB Board of Directors on March, 23 2007. NES working meetings were held during November 2006 – June 2007. The NES has been prepared by a team led by UEPB, NPA and PSFU. The team formed a working Secretariat and coordination centre for formulating the Strategy. International Consultants from ITC and the Commonwealth Secretariat supported the teams in various technical sessions. The NES has been prepared in close consultation with a core group of representatives of the Ugandan Institutions in Core committees and large Sector working groups. The core committee that played a leading role comprised of representatives from the Ministry of Tourism, Trade and Industry (MTTI), the Private Sector Foundation Uganda (PSFU), The Uganda Industrial Research Institute (UIRI), Uganda National Bureau of Standards (UNBS), Enterprise Uganda, Uganda Revenue Authority (URA), The Competitiveness and Investment Climate Strategy Secretariat (CICS), Action Coalition for Development and Environment (ACODE), Ministry of Finance, Planing and Economic Development (MOFPED), The National Planning Authority (NPA) and finally the Uganda Export Promotion Board (UEPB). The NES Secretariat extends its thanks to the representatives of the public and private sector agencies and institutions, civil society organizations, donor agencies, research institutes and universities who have shared their time and information, without which the NES could not have been produced. These include: Ministry of Agriculture, Animals and Fisheries (MAAIF), Ministry of Foreign Affairs (MOFA), Bank of Uganda (BOU), National Agricultural Advisory Services (NAADS) Secretariat, National Agricultural Research Organization (NARO), Kawanda Agricultural Research Institute (KARI), Dairy Development Authority (DDA), Uganda Bureau of Statistics (UBOS), Government Analytical Laboratory, Cotton Development Organization (CDO), Uganda Coffee Development Authority (UCDA), National Environment Management Authority (NEMA), Uganda Communications Commission (UCC), ix The Uganda National Expor t Strategy 2008-2012 Uganda Investment Authority (UIA), Uganda National Chamber of Commerce and Industry (UNCCI), Uganda Wildlife Authority (UWA), The District local Governments of Mbale, Lira, Soroti, Bushenyi, Mukono, Jinja, Kisoro, Luwero, Kampala, Ntungamo, Wakiso, Nakasongola and Masaka. Further thanks go to the Economic Policy Research Centre (EPRC), Private Sector companies and associations including Britania Allied Industries, Uganda Flower Exporters Association (UFEA), Bee Natural Products, Chemiphar, Toro Mityana Tea Estates, Kawacom, Icemark, Land O’Lakes, Flona Commodities Limited, Ssemwanga Group, Cayman Consults, Uganda Community Tourism Association (UCOTA), Horticulture Exporters Association of Uganda (HORTEXA), Federation of Associations of Uganda Exporters (FAUEX), Uganda Fish Processors and Exports Association (UFPEA), Uganda Fish Packers, National Organic Agriculture Movement of Uganda (NOGAMU), Uganda Tea Association (UTA), etc. A full list of these is attached in the annexes. The NES Secretariat also appreciates the contribution of members of the various Committees of Parliament for the many useful views they put into the process. Thanks also go to the Private Sector Donor Group comprising of Danish International Development Agency (Danida), Department for International Development (DFID) of the UK, Royal Netherlands Embassy (RNE), Swedish International Development Cooperation Agency (SIDA), The EU delegation in Uganda, the World Bank Group, USAID, Austrian Development Cooperation (ADC), GTZ, UNDP and Norwegian Embassy. The Government through the CICS Steering committee also reviewed the NES and adopted it as a national export plan for the medium term within the overall country competitiveness agenda. The NES Design team appreciates the views and work of the CICS Steering Committee. x The Uganda National Expor t Strategy 2008-2012 EXECUTIVE SUMMARY

1.0 The NES Rationale T he NES focuses on how to revamp, develop and sustain export growth over the medium term (2008-2012). After a review of the export growth trend that has on average been 18% over the past 4 years, the NES sets strategies/measures that will not only sustain this growth, but also qualitatively improve the country’s exports. NES targets over the medium term are as follows; • At least US$ 5 billion per year in revenue from the export of goods and services. • More than 16 % contribution to GPD, this being the minimum set by the Poverty Eradication Action Plan for the medium term. • A per capita export Ratio of US$ 200 by 2012.

2.0 The Strategies At sector level the focus is on: • Capacity Diversification involving expanding product range. • Capacity Expansion involving enhancing productivity and value addition. • Human capital development especially in the area of export skills and business development. • In-market business support involving trade fair management and distribution networks expansion schemes. • Image and branding. • Strengthening service delivery networks including efficient production organization schemes. At Cross-sectoral level the focus is on • Infrastructure development • Development of supportive commercial laws • Quality and standards enhancements management programs • Export competence development • Provision of affordable trade finance • Market Information management and customs documentation The proposals made are largely in harmony or supplementary to those under other various programs designed to address these cross sectoral challenges. These programs include mainly the Competitiveness and Investment Strategy (CICS), the Plan for the modernization of Agriculture (PMA) and the Diagnostic Trade Integrated Study of the Integrated Framework (DTIS).

3.0 NES Development Perspectives Export growth without substantial effect on poverty reduction is less desirable. The NES thus does not only focus on the development and marketability of priority sector products but also seeks to enhance their contribution to overall development goals as stipulated in the Prosperity for all Program (PFA) and wealth creation as stipulated in the National Trade Policy (NTP). Other goals include employment generation, environment conservation, gender equality xi The Uganda National Expor t Strategy 2008-2012 and regional development. This is reflected in the NES Vision of realizing ‘A dynamic and competitive export-driven economy for national prosperity and development’ It is also reflected in sector specific objectives in which every other NES sector has set itself a development objective.

4.0 NES Strategic Priority Sectors Twelve sectors have been highlighted by the NES for the medium term. These include Coffee, Tea, Flowers, Fish, Cotton and Services as the main priorities which have been largely agreed upon under other national programs and studies including CICS and DTIS. However, due to the need to further the export diversification process, Textiles and garments, cereals and pulses, Commercial Crafts, Natural Ingredients and Dairy have also been included in the NES. For each of these sectors, stakeholders have set a vision, defined key objectives and targets they want to achieve in the medium term. They have also highlighted initiatives with which they hope to achieve these objectives. Integrated management Framework Matrices containing these objectives and initiatives are presented in Chapter 5 of the Strategy. In choosing the sectors, many factors were considered but the major ones included: 1. Possession or potential to possess a significant competitive advantage 2. Possession or potential to possess high value-addition 3. Extent of Contribution to development (employment, incomes, etc) 4. High-growth in international demand

5.0 Institutional Arrangements for NES Implementation The proposed management structure leverages on the synergies with existing structures especially within those already established under CICS. The Presidential Economic Policy Council (PEC) shall provide overall political oversight. The oversight for implementation will be provided by MTTI political leadership, while the CICS Steering Committee supported by the CICS Secretariat and the NES Secretariat at UEPB and MTTI will provide coordination oversight and streamline NES in the national budget process. This committee shall be involved in making key technical decisions relating to NES implementation, monitoring and evaluation. PSFU and NPA having been part of the lead agencies in designing the NES and shall be part of the NES Secretariat. The PSFU in particular will bring into the Secretariat the voice and requirements of the private sector at the Secretariat level.

6.0 Resources for the Strategy Best practice dictates that resources for NES implementation be provided to implementing agencies through the annual budgetary appropriations and private sector business processes. It is also proposed that Government negotiates special instruments including grants and loans to finance strategic aspects of the Strategy. The matrices of sector objectives and initiatives highlight possible sources of funds which mainly include government, donors and private sector investment. To enable proper planning for strategy implementation and monitoring, the NES Secretariat (UEPB) will require annual resources amounting about US$ 1 million. These resources will finance adequate staff size and institutional retooling for effective strategy management and improved linkages with supply side centers. xii The Uganda National Expor t Strategy 2008-2012

7.0 Monitoring and Evaluation Annual review of progress will be done before the commencement of the national budget preparation process. A review conference will be organized by the Steering Committee supported by the CICS and the NES Secretariats. Monitoring and assessment of progress on specific initiatives will be achieved using a set of tools and mechanisms which the NES Secretariat will design and have approved by the steering committee within the first year of NES launch. xiii The Uganda National Expor t Strategy 2008-2012

1.0 INTRODUCTION

1.1 A STRATEGIC PARTNERSHIP T he Uganda National Export Strategy (NES) is a result of a strong partnership between the Government of Uganda, The Commonwealth Secretariat and The International Trade Centre (ITC). The tripartite partnership constructively worked together over a five-month period to produce the NES. The Commonwealth Secretariat provided financial and technical support to the process. Additional technical support came from ITC. The Uganda Government supported a strong network of national human resource teams from both the Public and Private Sectors which, through a consultative process, assessed national export needs and proposed comprehensive strategies to respond to these needs.

1.2 THE NES: AN INTEGRAL PART OF THE NATIONAL PLANNING FRAMEWORK The National Export Strategy is not an isolated strategy but fits into the existing National policy/planning frameworks. It responds to identified national priorities contained in the Poverty Eradication Action Plan (PEAP) and the National Trade Policy (NTP). The PEAP has 5 pillars, namely, economic management; enhancing production, competitiveness and income; good governance; peace, security and conflict resolution and human development. NES thus forms an integral part of PEAP responding to pillar 2 as shown in figure 01 below. It is also a tool for implementing the NTP approved by cabinet in July 2007. Figure 1: Uganda’s National Economic Planning Framework. National Vision Poverty Eradication Action Plan (PEAP) PEAP Pillar 2: Enhancing production, competitiveness and incomes Other PEAP Pillar 2 response Competitiveness and Investment programs, e.g., PMA Climate Strategy (CICS) National Export Strategy (NES) Other Sub Sector Strategies (Uganda’s international competitiveness strengthened)

1.3 Uganda Export Sector: Key Challenges Although the export sector has had impressive average growth rate of 18 % during the last 4 years, the current account deficit continues to widen. Uganda’s export Sector continues to suffer from small volumes of low value-added goods and this has heavily affected the country’s capacity to effectively respond to international demand. The Sector is also characterized 1 The Uganda National Expor t Strategy 2008-2012 by poor factor productivity of labour, land utilization, limited application of science and technology and insufficient research and development that has led to low levels of innovation and learning. Institutions that support export development also remain weak, under-resourced and without sufficient linkages to the productive sectors. Coupled with this, are infrastructure bottlenecks (utilities, transportation, telecommunication, logistics and storage, etc), limited financial services and systems, all of which have compounded to the larger problem of lack of competitiveness. Enterprises continue to lose on business opportunities due to the lack of adequate trade information, and the export incentive scheme remains largely uncompetitive vis-à-vis those of neighbouring countries. The infrastructure that should enforce the adherence to standards is inadequate. In general, the export sector is characterized by limited skills as a result of lack of effective support to enable enterprises position themselves as strong players and reliable business partners. Although the sector has experienced some export diversification in the last one and half decades, the export basket continues to be dominated by agricultural unprocessed commodities resulting in low income realized for the country. Not withstanding the above challenges, the Sector’s contribution to national development goals is significant. It provides employment to millions of Ugandans. Coffee, for example, employs more than 1.2 million people and supports more than 6 million livelihoods1. The fish sector employs an estimate of 250,000 people in lake side fishing communities and about 5,000 in urban factories2 and more than 5 million people depend on it for their livelihood. Cotton employs an estimate of 0.8 million Ugandans and 6 million people depend on the sector for their livelihoods. The tourism sector employs more than 400,000 Ugandans both formally and informally3. These are basic examples of the significance of the sector to national development. The above state of affairs thus demands that a systematic and practical plan be developed to guide the stakeholders at the macro, meso and micro levels in confronting these challenges and maximizing the potential of the sector’s contribution to national development. The National Export Strategy provides such a plan. 1 Figures obtained from the Competitiveness and Investment Climate Strategy (2006-2010) as compiled by SCOPE. 2 These are estimates by the DFR as reported in the Fish Sector Newsletter Vol. 01 of January–April 2007. 3 Figures obtained from the DTIS Report (2006). The report suggests that they may not be perfect but they provide a reasonable basis for the assessment of sector potential. 2 The Uganda National Expor t Strategy 2008-2012

1.4 NES RATIONALE From the above assessment the rationale for the NES is as follows: Firstly, it provides guidance to ensure that the scarce resources available for export development are allocated to the top priorities – sectoral, cross-sectoral and institutional. Secondly, the national Export Strategy provides the framework for the public and private sectors to work within a partnership to achieve mutually agreed objectives for Uganda’s export development. And thirdly, NES emphasizes the contribution of the export sector to the overall economic and social development of the country in terms of; foreign exchange earnings, employment creation, poverty eradication, regional development, gender equality, inclusion of disadvantaged groups, and environmental sustainability. As a target, NES will aim at achieving US$ 5 billion4 in export revenue and a contribution of more than 16%5 to GDP by the 2012.

1.5 NES VISION AND OBJECTIVES The Uganda National Export Strategy is inspired by the following vision; “A dynamic and competitive export-driven economy for national prosperity and development” To realize this Vision, the NES will focus on the principal objectives summarized in the textbox below: To increase the contribution of exports to the economic and social transformation of Uganda by focussing on wealth creation, prosperity for all, employment gen- eration, gender equality and regional development, among others. To enhance the competitiveness of Uganda’s exports through developing supply side capabilities, improving the quality of the business operating environment, reducing the cost of doing business and enhancing demand side conditions such as market access, in-market support and branding. To provide effective trade support services (Market information, trade finance, and competence development, trade promotion, quality management) to enable export enterprises to operate better in international markets. To enhance coherence of export support policies, improve inter-institutional coor- dination and strengthen the capacity of export support institutions to effectively provide adequate services to the export sector. 4 This figure is based on maintaining or exceeding the current average export growth of 18% from 2001-2006. It takes into account of both goods and services. 5 This figure is slightly above the US$ 4 billion target by 2009 as set by the PEAP. 3 The Uganda National Expor t Strategy 2008-2012

2.0 THE UGANDA NES PROCESS

2.1 A PARTICIPATORY PROCESS T he formulation process involved use of participatory methodologies in which multi-sectoral teams through a process of extensive stakeholder consultation, gathered critical sector issues and problems. The work of the Multi-sectoral teams was supplemented by that of the NES Secretariat which gathered and reviewed many sector plans and strategies built by the sector operatives themselves. Some of the sector strategies reviewed covered fish, flowers, coffee, honey, cotton, tea, services and tourism. This review was also extended to key national studies including, among others, the Diagnostic Trade Integrated Study (2006) of the Integrated Framework (IF) of the World Bank and other donors, the National Trade Policy, the NRM Manifesto, just to mention but a few. To deepen the understanding of sector specific issues, problems and benefits along the supply chains, a value chain approach was used. This mainly sought to establish centers of high value along the chains with the main aim of building a strategy that would minimize value leakages along the chain. The Strategy also seeks to create efficiencies, and add or create greater value in the country. To ensure that the value chains were realistic and reflected the actual experiences of enterprises, the strategy design team intensively involved sector exporters in building and reviewing those value chains. The NES was essentially concluded in early June 2007. It had earlier been subjected to a Validation process on May 24th 2007. The review Symposium was attended by stakeholders from the public sector, the private sector, and civil society that had been involved with the NES process. The final NES has incorporated the outcomes of the Validation Symposium. The methodology used has its main foundation in the ITC National Export Strategy Design and Management Framework which emphasizes taking into account the interests and perspectives of national and sectoral stakeholder groups, namely, the Competitiveness, the Client, the Institutional and the Development perspectives. This methodology provides for a comprehensive framework.

2.2 SCOPE Parliamentary Statute No. 2 of 1996 that formed UEPB mandates the institution to, among others, develop national export development plans particularly, Export Development Strategies. NES has been developed in fulfillment of this mandate. NES provides a comprehensive framework for developing detailed plans for the export sector. It highlights both sector specific issues and challenges and proposes a set of initiatives to address them over the medium term (5 years). Owing to limitations of financial and human resources, and avoidance of over-scoping, it was not feasible to build a NES incorporating all sectors. The solution to this is sector prioritisation in the first phase. Other emerging export sectors will be considered for incorporation in subsequent NES reviews. It should however be noted that sectors not highlighted will still experience growth benefits from interventions that cut across all sectors. 4 The Uganda National Expor t Strategy 2008-2012 The NES is more than an export promotion plan – it is a roadmap for export development. In this regard it addresses: • Supply-side constraints and opportunities (Border-In Gear) • The quality of the business operating environment (Border Gear) • Demand-side constraints and opportunities (Border-Out Gear) • Development initiatives (Development gear) The Strategy focuses on twelve sectors whose choice was based on a range of factors that took into consideration key national development goals. The sectors were further harmonized with what other key national studies and programs have highlighted. Measures to stimulate increased production and marketability of the sector products are proposed including adding value to these products. The Strategy also highlights key cross-cutting challenges including those that relate to trade information, trade finance, quality management, business competency development, promotion and branding. Addressing the challenges above cannot in any measure be the responsibility of any single institution but rather a multi-sectoral team working together in a public-private sector partnership and with Uganda’s development partners, each bringing on board its core competences and resources. This is the implementation approach that is proposed for this strategy.

2.3 SYNERGETIC RELATIONSHIP WITH OTHER NATIONAL POLICES/ STRATEGIES/PLANS The main policies, plans and strategies referred to here, include the Prosperity For All, (PFA), the National Trade Policy (NTP), the Competitiveness and Investment Climate Strategy (CICS), The Marketing and Agro-processing Strategy (MAAPS) and the Diagnostic Trade Integrated Study of the Integrated Framework (DTIS) done by MTTI. NES operationalises several aspects of these policies and plans as follows:

2.3.1 The PFA This is a multi-faceted policy involving integrated socio-economic programmes that mainly target the rural poor in order to transform them into productive and prosperous communities. It focuses on stimulating income oriented production, value addition and improved marketing of different products that enable the individuals to earn steadily from both periodic and annual income sources. A micro credit scheme has been designed to support producer groups with low interest capital. The main development objectives of the NES have been oriented towards this goal by particularly focusing on raising income and employment levels of producers in the value chains of the different sectors NES promotes. 5 The Uganda National Expor t Strategy 2008-2012

2.3.2 The NTP Approved by cabinet in 2007 the NTP defines and provides recommendations that seek to stimulate the growth of both the local and external markets. NES implements recommendations given under Chapter 8.2 clauses, vii – ix, relating to information systems, measures and strategies for effective participation in international trade and identifying and supporting products and services where the county has both comparative and competitive advantage.

2.3.3 The DTIS The DTIS, formally a diagnostic trade study of the Integrated Framework, has been standardised into a response plan to many challenges that affect the trade sector in general. NES tackles in a considerable measure some of the challenges and recommendations of the Diagnostic Trade Integrated Study (DTIS). It particularly responds to the market entry challenges identified in the DTIS with particular reference to the sectors of fish, coffee, tourism, tea, cotton and services identified by the study. It also recommends strengthening of the trade support institutions.

2.3.4 The CICS NES also operationalises several aspects of Uganda’s Competitiveness and Investment Climate Strategy (CICS) by particularly focusing on strengthening Uganda’s international competitiveness, which is a key output of the CICS. It assists in implementing the sector/ cluster strategies of the CICS. The MAAPS Finally, NES takes into account and seeks to implement several aspects of the Marketing and Agro-processing Strategy (MAAPS) with a special focus on provisions captioned in MAAPS 4.2.3 regarding deepening the provision of market information. NES proposals on market information will be implemented synergistically with institutions and arrangements stipulated in the MAAPS especially the National Agriculture Advisory Service (NAADS). 6 The Uganda National Expor t Strategy 2008-2012

3.0 STATUS OF UGANDA’S EXPORT SECTOR SUMMARISED

3.1 GENERAL OVERVIEW Uganda has made considerable progress in diversifying its exports. The shift towards more diversified export products was particularly pronounced during the second half of the 1990s when Uganda’s exports went beyond the traditional exports of coffee, tea, tobacco and cotton to non traditional exports of fish, flowers, fruits etc. Notwithstanding the encouraging diversification trend, Uganda’s exports remain highly concentrated in a limited number of commodities. The top-5 product lines, which are all commodities, account for more than 55 per cent of total exports. The sector has not progressed well in the direction of value addition neither has it fully embraced trade in services. There is also need for stronger linkages between trade policy and export growth by taking advantage of market access opportunities provided through various market preferences offered to Uganda and the growing regional markets occasioned by economic integration. There is substantial informal trade between Uganda with its neighbours. A survey of informal cross-border trade between Uganda and five neighbouring countries, namely the Democratic Republic of Congo (DRC), Kenya, Rwanda, Sudan, and Tanzania, launched by the Uganda Bureau of Statistics (UBOS) and the Bank of Uganda (BOU), indicates that Uganda has an informal trade surplus with its neighbours worth US$ 151.1 million6 . Such informal trade has come about because shipments across borders by bicycle or wheelbarrow of up to 200 kg do not require official registration. The Sector could benefit more from the expansion of cross border trade by scaling up efforts to eliminate barriers and trade impediments.

3.2 EXPORT GROWTH TRENDS The export sector has experienced an annual growth rate of about 18% over the last five years. This is considerable recovery given the declines experienced in 1990/91 and 1996/97. Merchandise exports had stagnated for several years before they picked up in 2002/03, reaching US$ 1.19 billion7 in both formal (US$ 962.1 million) and informal (US$ 231.7 million) merchandise exports in 2006. When added to US$ 504.98 million from the formal service sector, the total export earnings amounted to US$ 1.695 billion. It is also important to note that remittances by Ugandan workers abroad brought in a total of US$ 731.3 million9 in 2006 well above earnings from the rest of the services. Compared to the previous year, there was a growth of about 25%. It is important therefore that the export of labour is given adequate attention in promotional strategies and multilateral trade negotiations particularly under General Agreements on Trade in Services (GATS). Reasons for improved performance include mainly high commodity prices, private sector growth and national export development and promotional efforts that have continued to stimulate export diversification. Figure 2 below demonstrates trends in absolute values over a five-year period. 6 See Informal Cross Border Trade Publication of the Uganda National Bureau of Statistics, May 2007. 7 Ibid. 8 See Background to the budget 2007/08, MOFPED 9 Ibid. 7 The Uganda National Expor t Strategy 2008-2012 Figure 2: Trend of total formal Merchandise Exports 962.1 1000 889.5 900 786.3 800 647.2 700 US$ Million 600 507.9 500 400 300 200 100 0 2002/03 2003/04 2004/05 2005/06 2006/07 Illustration done by UEPB with data from The Background to the Budget 2007/08 In the late 1990s up to 2002, the sector’s traditional exports had been trending downwards while non-traditional exports trended upwards. By 2002, the non-traditional exports had surpassed traditional exports. The major non-traditional exports include fish which fetched US$170 million in 2004/05, surpassing coffee exports as the largest merchandise export item. Cut flowers rose six-fold from US$5 million in 1996/97, when they first emerged, to US$ 32 million in 2004/05. Cereals, hides and skins, cobalt, and beans have also been part of the key non-traditional exports. Service exports dominated by tourism have also been on the rise from US$24m in 1992/93 to US$ 505 million in 2006. When added to workers remittances (US$ 731.3 million), the service sector contributed US$ 1,386.3 million to the economy. Figure 3 below illustrates the absolute growth values for Services (excluding worker’s remittances). Figure 3: Total Service Exports US$ million 600 505 500 423 400 323 US$ Million 300 242.9 200 100 0 2002/03 2003/04 2004/05 2005/06 8 Illustration done by UEPB with data from The Background to the Budget 2007/08 The Uganda National Expor t Strategy 2008-2012 Despite overall growth in exports, Uganda still suffers a negative balance of payments problem on both the goods and services accounts. As illustrated in Figures 4 and 5 below, it can be noted that between 2000/01 – 2004/05, the deficit has widened from about US$ 621 million in 2002/03 to over US$ 1,400 million in 2006/07 on the goods account and from US$ 275 to 485 million on the services account. Figure 4: Balance of Trade - formal merchandise account 0 -200 -400 -600 -621.4 US$ Million -672.3 -800 -837.6 -1000 -1101.8 -1200 -1400 -1,444 -1600 2002/03 2003/04 2004/05 2005/06 2006/07 Illustration done by UEPB with data from Bank of Uganda, Annual Report (2006) and Informal Cross Boarder Trade Survey UBOS Report 200610. Figure 5: Balance of Trade - formal services account 0 -50 -100 -150 -200 US$ Million -241.08 -250 -275.63 -300 -320.09 -350 -369.04 -400 -450 -485.59 -500 2002/03 2003/04 2004/05 2005/06 2006/07 Illustration done by UEPB with data from Bank of Uganda, Annual Report (2006) & Background to the Budget 2007/08 10 The BOP position of 2006/07 is as given in the UBOS Cross Boarder Trade report. 9 The Uganda National Expor t Strategy 2008-2012 The above widening negative BOP dictates that more measures be put in place to expand the export sector in order to contain the situation.

3.3 EXPORT SECTOR GENERAL SWOT ANALYSIS The summary of the sector’s main SWOT is intended to highlight the main weaknesses that the strategy must address, building mainly on the sector’s strengths and exploiting the opportunities available. The main ones are summarized in the textbox below: Strengths Weaknesses • Natural Resource base (Good and fertile • Poor and inadequate infrastructure soils, Good ecosystem for tourism and agri- • Poor factor productivity culture, minerals etc.) • Weak private sector facilitation, Support • The existence of an Institutional framework services to support the export sector • Weak and unsustainable export support fi- • Existence of export incentives (Zero rating of nancial system (high cost and no sustainable exports, manufacturing under bond, etc) institutional arrangements etc.) • Liberal trade environment • Weak R&D for development, • Abundant and trainable labour • Weak standards and quality infrastructure • Existence of export enterprises/sectors with • Limited access to Business Development considerable presence in the international Services markets • High transport costs • Political goodwill and commitment from the • Limited processing and value addition highest political authority • Stable macro economic framework Opportunities Threats • Non reciprocal Preferential Treatments • Vagaries of weather (Bilateral and Regional, Multilateral) • Cut-throat global competition in Uganda’s • Regional Integration with lowering tariff key markets levels and reduced non tariff barriers • Dumping and counterfeit of goods • Global outsourcing • Subsidies in developed countries • Unexploited natural resources (land, Oil) • Non Tariff Barriers and Sanitary and Phyto- • Changing consumer preferences towards sanitary requirements organic and natural food items making pos- • Diseases (Threat to products and human sible niche markets resources) • Internal and regional conflict This SWOT forms the basis of analysis, strategy proposals and initiatives that are presented in the chapters that follow. 10 The Uganda National Expor t Strategy 2008-2012

4.0 CROSS-CUTTING STRATEGIC ISSUES I n the context of this strategy, cross-cutting strategic issues refer to those aspects that generally affect the performance of all the target export sectors. These include infrastructure, energy, macro economic variables such as exchange rates, commercial laws, etc. Most of these have been grouped specifically as competitiveness issues. Other issues include quality and standards management, export management competences, production and trade finance which are treated separately.

4.1 COMPETITIVENESS ISSUES

4.1.1 Overview Many factors determine the competitiveness of a country’s exports. These include, notably, the macro-economic situation, in particular inflation levels and the real exchange rate, the trade policy regime, the business environment, the cost and availability of infrastructure, taxes, etc. Uganda has a particularly poor ranking in infrastructure compared with its East African and African neighbours (CICS 2006-2010). Uganda has fared well in the areas of macro economic stability with for example inflation maintained at a singe digit level for the last decade. It however has not fared well in respect to technology acquisition and adaptation, infrastructure etc.

4.1.2 Summary Situational Analysis Detailed analysis of competitiveness issues and challenges for Uganda is done in the CICS 2006 -2010 Strategy of the Ministry of Finance and Economic Development11. Additional analysis is done in the DTIS Report 200612. These shall serve as key points of reference for the NES recommendations and as such, the analysis is not replicated here. Suffice to state the key challenges to include the following: The country suffers from poor transport infrastructure, especially road and rail networks. This is a huge competitiveness setback considering that Uganda is landlocked. Uganda also experiences high freight and cargo handling costs at the key ports. This is especially so at the country’s main airport, Entebbe, where on average, exporters pay above US$ 2.4 per kg to key destinations in Europe. This is less competitive considering that in the immediate next door neighbours, Kenya and Tanzania, the cost is less than US$ 2. Power is another key constraint. Cross country analysis indicates that Uganda faces considerable cost disadvantages from energy and indirect costs (the latter include land, rent, transportation, telecommunications, and water). The electricity sector has the poorest performance. Access coverage is at just about only 8.6% of the population13. The power situation has worsened recently with the reduction of hydropower output at the main power stations on River Nile. 11 www.cics.go.ug 12 www.mtti.go.ug 13 Figures quoted from the DTIS 2006 11 The Uganda National Expor t Strategy 2008-2012 The other key challenge is factor productivity especially land. Uganda’s productivity is around 47 per cent of the Chinese benchmark and only 30 per cent when energy and indirect costs are taken into account . Other factors affecting competitiveness include a deficient legal system characterized by absence of effective business enabling commercial laws and finally weak and poorly coordinated trade support institutions. To address the above competitiveness challenges, NES proposes several objectives and action initiatives as detailed in the integrated management framework on the pages that follow below. The framework also highlights other initiatives different strategies have proposed to address other factors affecting competitiveness. In all strategy matrices, an indication is given on the possible sources of funds which mainly include, Government, Donors and the Private sector. The strategy also attempts to give an indicative level of resource requirements the details of which will be computed by the lead implementing agencies. In all the matrices the following apply on resource requirements. Low = US$ 100,000-500,000 Medium = US$500,000-1,000,000 High = US$ 1,000 000 and beyond 12 The Uganda National Expor t Strategy 2008-2012 TABLE 1: STRATEGY INTEGRATED MANAGEMENT FRAMEWORK/MATRIX FOR COMPETITIVENESS OBJECTIVE MEASURE TARGET1 INITIATIVES LEAD SUPPORT MILESTONES RESOURCES INSTITUTION INSTITUTION Number of From Create an effective road fund MoW 5 years GOU new and 10,008 -15000kms to garner the needed resources Donor rehabilitated in 5 years High roads Explore and implement “Road upgrade programmes partially financed on ‘user pays’ principle” Airport and Rehabilitate 3 Offer liberal and attractive GOU railways Cargo aerodromes terms for use of Entebbe. MoW Donor 1. To provide handling Railway lines to MTTI, CAA 5 years adequate capacity link Uganda with Feasibility studies for reopening URA Medium export its immediate of various railway lines and UMEME support neigbours airfields ERA infrastructure especially Sudan UIA and D.R. Congo CICS Develop Entebbe Secretariat into a business hub PSFU Facilities and Full energy lines, Continue to operationalize and UIA RAFU 2 years GOU utilities in the and complete construct Namanve Industrial LGs Donor industrial park demarcation of park PMA High land Secretariat Amount One major 250 Implement large project to add Ministry of NPA 5 years GOU of energy MW dam at energy on the National grid Energy Donor generated Bujagali High Number of mini 5 stations in Accelerate rural electrification Ministry of - hydro power different parts of programmes. Energy 5 years GOU stations the country Donor 13 1 Targets were obtained from the National Budget Framework Paper (NBFP) for FY 2007/08-2009/10 High The Uganda National Expor t Strategy 2008-2012 OBJECTIVE MEASURE TARGET1 INITIATIVES LEAD SUPPORT MILESTONES RESOURCES INSTITUTION INSTITUTION Number of Enact into laws Fast track revision of key Ministry of 2 Years Donor 2. Provide commercial the 17 commercial commercial laws Justice GOU adequate laws in place bills in cabinet Law Reform MTTI, Low commercial Commission CICS justice for Secretariat the country’s Legal capacity All state attorneys Training programmes for State Uganda Uganda Law 3 Years GOU business sector of the trained in three attorneys in commercial law Commercial Society Low commercial years and tax tribunals Courts Ministry courts of Internal Affairs URA Computerised All existing land Modernise land information Ministry of GOU and 3. Achieve records titles and acquisition office Lands 2 years Donor efficient (Computerisation at national Medium acquisition and district level offices) PSFU and CICs productive Secretariat use of land Uganda Land Amount of From the present Continue to divest government Ministry of 2 years GOU and resources Commission government 192 titles to 300 land for private investment Lands Donor Local land surveyed, Low Governments divested and NPA transferred to the Land Commission for investment use Inventory Inventory extended Countrywide survey and Ministry of As above 2 years GOU and of existing from the current 22 inventory of government land Lands Donor government – 56 districts in 4 Low land years 14 The Uganda National Expor t Strategy 2008-2012 OBJECTIVE MEASURE TARGET1 INITIATIVES LEAD SUPPORT MILESTONES RESOURCES INSTITUTION INSTITUTION 4. Increase Capacities of Full staff capacities Initiate proposals for MTTI/IF MoFPED 1year GOU and and enhance export support institutional strengthening as NPA Donor institutional institutions proposed in the DTIS Integrated UEPB Medium coordination Framework Report UIA in export Public – Public PPP management Initiate the process of MoFPED PSFU 1 year GOU and development – Private structures in all streamlining functional CICs Donor Sector export programmes responsibilities in relevant Secretariat Low partnerships institutions and agencies OPM in export development programmes 5. Develop Number of NPA and strengthen product clusters Initiate Cluster formation UEPB 2 year GOU clusters for formed process with lead enterprises NAADS MAAIF Low identified NES At least one and designate them as supply PSFU priority sectors Number of functioning cluster centers CICs clusters serving for each NES Secretariat as focal export Sectors LGs supply centres PMA Secretariat NPA 15 The Uganda National Expor t Strategy 2008-2012

4.2 QUALITY AND STANDARDS MANAGEMENT ISSUES 4.2. 1 Overview A s Uganda seeks to expand and further diversify its food and agricultural exports, it will increasingly encounter more stringent regulations and private standards in relation to food safety and plant and animal health. Suppliers of such exports increasingly need to demonstrate compliance with environmental and social regulations or protocols of the main importing countries. Compliance with these standards will form an increasingly important part of Uganda’s international competitiveness. 4.2 .2 Summary Situational Analysis For many of Uganda’s emerging non-traditional agro-food exports, issues related to food safety, agricultural health and/or environmental standards are of comparatively greater importance in international trade. The issues that face many sectors especially fish and horticulture include: • Need to pay greater attention to hygienic conditions at fish landing sites and in processing facilities. The regulatory framework for fish quality and safety controls also needs to be improved. • For fresh fruits and vegetables, the market demands attention to food safety product and process standards and also requires that suppliers adopt certain environmental and social protocols. Compliance comes with enormous costs. Particular attention has to be given to the use and storage of agro-chemicals and the presence of pesticide residues in fresh produce. • Environmental and social standards are now rigorously monitored in the cut flower trade. • For live animals and livestock products, there have been long-standing concerns about the possible transmission of contagious and economically significant animal diseases through trade. Uganda is at the centre of this problem, with the presence of several endemic animal diseases being one factor restricting its trade in livestock products, especially beyond East Africa. • For cereals and oil seeds, there has been growing international attention to microbiological contamination, plant health risks, etc • For several other Ugandan non-traditional agricultural and food exports including honey, hides and skins, vanilla and silk, there are also applicable food safety, agricultural health or other standards which may come into play when certain external markets are targeted. (Annex 4 illustrates Standard and Quality requirements for different products). To address the above issues and challenges, the NES proposes several objectives and action initiatives and targets as detailed in the integrated management Framework matrix on the pages that follow below. 16 The Uganda National Expor t Strategy 2008-2012 TABLE 2: STRATEGY INTEGRATED MANAGEMENT FRAMEWORK/MATRIX FOR QUALITY AND STANDARDS MANAGEMENT OBJECTIVE MEASURE TARGET1 INITIATIVES LEAD SUPPORT MILESTONES RESOURCES INSTITUTION INSTITUTION 1. To build ca- Number of At least Work with Ugandan universities UNBS UNBS, pacity through trained qual- 200/year to create a laboratory technician MAAIF, 3 years GOU training of ity managers course to provide hands-on testing Chemiphar, Medium more quality 2 courses and training in laboratory man- SGS, managers Number of per year agement Universities courses initi- (1 elemen- ated at high- tary and 1 Introduce total product quality er institutions advanced) management in curriculums of high- 3 years GOU of learning er institutions of learning Low TQM in Na- tional Cur- riculum 2.To achieve Test Certifi- All ex- Develop a laboratory plan that ra- UNBS MTTI, UNBS, international cates issued ported tionalizes existing capacities Chemiphar, accreditation products SGS, and other GOU for Uganda Number of covered in Develop programme to strengthen laboratories 3 years Donor testing labo- accredited 3 years capacity of inspectorate services MAAIF Low ratories labs 1 lab/year with particular emphasis on poten- tially high risk sub-sectors 3. To have a Full data- Source for IT resources to build the UNBS MTTI, UNBS, 2 years GOU data bank on Data bank bank in 2 data bank Chemiphar, Donor global prod- years SGS, and other Low uct quality re- laboratories quirements 17 The Uganda National Expor t Strategy 2008-2012 OBJECTIVE MEASURE TARGET1 INITIATIVES LEAD SUPPORT MILESTONES RESOURCES INSTITUTION INSTITUTION Number of 50% of all Develop and implement a continu- MAAIF MTTI, UNBS 2 years GOU 4. To achieve exporters in exporters ous awareness raising and training Sector Associa- Low total Product awareness trained in programme among mainly fish and tions hygiene in programmes 2 years horticultural producers sensitive sectors 5. To encour- 50 certifi- MTTI, UNBS 3 years GOU and Do- age the ap- Number of cates per Initiate broad based programmes UNBS Sector Associa- nors plication of firms possess- year in the food and manufacturing sec- tions, MAIIF Medium GMP, GHP, ing relevant tor generally or in designated pilot HAACP, ISO certificates sectors 22000 6. To en- 50 firms MTTI, UNBS 2 years courage Number of per year Subsidize the conformity assess- UNBS Sector Associa- Private Sector producers/ firms and ment costs for exporters tions, MAIIF Low exporters to exporters implement implementing the system of the system Self-declara- tion of Con- formity 1 Targets under this matrix were largely set by the Uganda National Bureau of Standards 18 The Uganda National Expor t Strategy 2008-2012

4.3 EXPORT COMPETENCE DEVELOPMENT ISSUES

4.3.1 Overview O f the many factors constraining Uganda’s export growth and development, the widespread scarcity of knowledge and skills in managing export development and marketing is one critical factor. Too many entrepreneurs who have jumped on to the export bandwagon tend to equate export marketing with domestic trading, and their attempts to export are often cut short by the lack of thorough understanding of the international nature of export business.

4.3.2 Summary Situational Analysis Several situational analyses have been carried out in Uganda as follows: 1. The Kwesi report of 2003 sponsored by the Commonwealth Secretariat that recommended the establishment of the Uganda Export School (UGETS). 2. The 2003 Riborg report sponsored by NORAD that highlighted a large training need that needed to be responded to with a well established export training framework in the country. 3. The Harriet and team 2005 report sponsored by JICA/AICAD that recommended an integrated training programme for various MSMEs. Lack of quality consciousness, disrespect for timely delivery, inappropriate packaging, unscientific costing and pricing are some of the constraining attributes of the Ugandan SMEs in export. Most operatives are unaware that the international nature of the export business makes it more exacting, requiring that the rules governing it must be thoroughly learnt and properly and expertly applied. The lack of personnel with the requisite training and skills to plan and implement export market programmes and operations cuts across the private and public sectors, the service sector and the business facilitating agencies such as Customs, the financial institutions, the Ministries of Foreign Affairs and Trade and Industry, among others. Compounding the problem is the lack of an institution in Uganda, which offers trade-related training with emphasis on export trade. Uganda has some of the best renowned Management Institutes such as the Uganda Management Institute (UMI), the Management Training and Advisory Centre (MTAC), Makerere University Business School (MUBS) and Post-Secondary Institutions of learning. Unfortunately apart from MUBS the rest have not integrated export trade training in their curriculum. Most of the other institutions tend to focus on general management curriculum in the areas of General Strategic Management, Human Resource Development and Management, Administrative Management, Finance and Accounting, Production and Engineering Management, Project and Business Plan Development and Management, Marketing and Procurement Management, Entrepreneurship Development, among others. 19 The Uganda National Expor t Strategy 2008-2012 It is against the above situational analysis that the NES export competence component proposes measures focusing on the following issues: • Increase the availablity of options for students in the area of short and medium term courses highlighting hands-on vocational training in export related subjects. These should be integrated into existing national training and education curricula. • Provide enterprenuership training. This should be included in the career right from secondary school to give students wider career options. • Continuous learning on the part of the institutions delivering the export competences training, so as to take care of emerging new fields of export as a result of strategic changes in the business environment, locally and globally. • Provide management training for owner-managers and their key staff in functional areas of management, including export business planning. • Highlight the role of Business Development Services Providers (BDS) to the export sector. • Build teams of qualified, certified export consultants with relevant skills and the capacity to create relevant export training programmes. • Leverage on the knowledge and accumulated experience of international Business Support Organanizations such as the International Trade Centre (ITC) or The Centre for the Promotion of Imports from Developing Countries (CBI) to built internal capacities to train. • Strengthen co-ordination among the major organizations involved in activities related to export competency development. Better management and promotion of the existing training programmes, as well as their value in leading to participant success is needed. • From the Long Term perspective, one of the most important strategic response is to set up a “National Centre for Export Management” to provide all professional services and consulting services, with a co-ordination and network development role in the field. To address the above issues and challenges, the NES proposes several objectives and action initiatives and targets as detailed in the integrated management Framework matrix on the pages that follow below. 20 The Uganda National Expor t Strategy 2008-2012 TABLE 3: STRATEGY INTEGRATED MANAGEMENT FRAMEWORK /MATRIX FOR THE EXPORT COMPETENCE DEVELOPMENT OBJECTIVE MEASURE TARGET1 INITIATIVES LEAD RESPONSIBLE MILESTONES RESOURC- INSTITUTION INSTITUTION ES 1. To enhance Number of 2000 exporters Identify exporters for training UEPB MTTI, FAUEX, 1 year GOU, Do- the manage- exporters that trained in a year and sensitize them on the impor- Sector asso- nors and rial competitive have received tance of enhancing their mana- ciations Firms capability of export manage- gerial skills EUg Low exporters in the ment training. BDS institutions export markets. 2. To improve the Number of ex- 2000 exporters Regularize and together with suc- UEPB MAAIF 2 years GoU, technical compe- porters that re- trained in a year cessful exporters conduct annual EUg Firms, Do- tences along the ceive technical practical training programme for BSOs nors production value training exporters PSFU Low chain. UNCCI 3. To build entre- Growth in num- From the present Initiate processes to integrate MOES preneurial com- ber of export 600 to 1500 by export training into BTVET cur- UEPB MUBS Entre- 2 year GOU and petences among sector entrepre- 2009 riculum preneurship Donors potential and neurs PSFU Unit Low existing export- 3% of the total Massive country mentoring pro- EUg ers. population in rec- gram using successful enterprises. NPA ognizable business by 2012 4. To create an Number of insti- Export curriculum Baseline survey to identify needs NPA 2 years effective nation- tutions that offer developed in 2 MUBS Entre- GOU al export train- hands-on entre- years Mobilize Academic Institutions to preneurship funds ing infrastructure preneurship and develop and adopt the curriculum Unit Donors export manage- An export develop- to meet the needs UEPB Enterprise 1 year Low ment training. ment centre estab- Uganda lished by 2012 Export Development centre proj- ect developed and discussed MoES GOU and within Government and donors UEPB MTTI 2 years Donors MFPED High 1 Targets were mainly drawn from the practical training experiences and programmes of UEPB with its network of international institutions, CBI and ITC. Additional targets drew from the experiences of Enterprise Uganda that has had a long experience of training programmes for SMEs 21 The Uganda National Expor t Strategy 2008-2012

4.4. TRADE FINANCE ISSUES

4.4.1 Overview One of the major systems through which sectoral export capabilities can be enhanced is the development of the domestic financial system and institutions. The financial system is crucial for the development of enterprises and productive capacities.

4.4.2 Summary Situational Analysis Unfortunately, in Uganda, the financial system still lacks the robustness to respond rapidly and adequately to the financing needs of the country’s business sector particularly the exporters. The formal financial sector remains largely undiversified and commercial bank dominated. The available alternative financial systems of credit rationing through micro-finance institutions are short term. These do not respond to long term productive investment needs. The formal banking sector has high liquidity levels but because of high risk perceptions, it only delivers low levels of domestic credit favouring a small number of large firms. Again, Ugandan firms suffer from very low credit market participation and high costs of finance (with costs of borrowing reportedly averaging 20 per cent). Private sector lending in Uganda is significantly lower than in comparative countries (Kenya and Tanzania) as well as the averages for SSA and low-income countries14. Deficiencies in the contractual and informational frameworks in Uganda have contributed substantially to the low level of credit market participation15 . There is no credit information sharing in Uganda. This is attributed to banks being more interested in maintaining their dominance of certain market niches than sharing information. The establishment of a credit reference bureau, which has been under preparation for sometime, would certainly help in this regard, and the establishment of a national identification system would also be critical in enhancing credit information sharing. The services sector which has emerged as a key driver of economic growth in developing countries still lacks adequate financing. This is especially so for non traditional services such as consulting works which are hardly viewed by banks as bankable proposals suitable for financing. Finally, the agricultural sector which happens to be the main source of the country’s exports seems unattractive to the country’s financial system and would probably benefit from a specialized financing framework or institution. To address the above issues and challenges, the NES proposes several objectives and action initiatives and targets as detailed in the integrated management Framework matrix on the pages that follow below. 22 15 See DTIS Report 2006 The Uganda National Expor t Strategy 2008-2012 TABLE 4: STRATEGY INTEGRATED MANAGEMENT FRAMEWORK/MATRIX FOR TRADE FINANCE OBJECTIVES MEASURES TARGETS1 INITIATIVES LEAD RESPONSIBLE MILE- RESOURCES AGENCY INSTITUTIONS STONES 1. To widen Diversity of collat- At least one ware- Promote the use of commodity BOU MTTI, MFPED, instruments for eral instruments house per district based instruments especially UBA. collateral for in main export via the warehouse receipt 2 years Commercial capital access at Number of certi- producing areas/ systems. MTTI, Producer Banks the production fied warehouses zones MTTI Associations stage. MOLG GOU UCE Low PMA Secretariat 2. To create Exporters receiving UDB fully op- Capitalise the Uganda De- MoFPED BOU long-term pro- long term financing erational within 2 velopment bank UDB duction, process- years UBA ing and export Trend of commer- Introduce and encourage cor- Commercial Banks GOU and financing espe- cial bonds on capi- porate commercial bonds on Capital Mar- PSFU 2 years Donors cially for SMEs tal markets the capital markets kets Authority MTTI High UEPB SMEs listed on the Atleast all com- Moblise and prepare SMEs Uganda NPA stock exchange panies already in to list on the stock exchange Stock Ex- export business market. change (USE) with sales turnover US$ 500,000 and Designate a percentage of BOU above. UDB funds for Agriculture fi- nancing 3. To increase Number of Insti- 10% and below Implement programmes and BOU MOFPED financial institu- tutions and their by 2012 measures that increase com- Commercial Banks tions lending to lending rates petition in the financial sector UDB 2 years GOU and exporters. At least one ex- UBA Private Sec- port bank by Investment drive for a large UIA tor 2010 export sector banking institu- PMA Secretariat Low tion. 23 The Uganda National Expor t Strategy 2008-2012 OBJECTIVES MEASURES TARGETS1 INITIATIVES LEAD RESPONSIBLE MILE- RESOURCES AGENCY INSTITUTIONS STONES 4. To increase Geographical Countrywide by Design an outreach plan fo- BOU MOFPED 2 years GOU, Donor trade finance spread of microfi- 2009 cusing on providing loan capi- Commercial Banks and MFIs outreach. nance institutions in tal especially to SMEs. UDB Low the country UBA 5. To enhance Number of project 20 every year Capacity building and ad- UIB, UMI, Produc- 3 years Self sponsor- capacity of proposals suitable visory services to producers er/ Exporter As- ship producers and for capitalization and exporters. sociations, MLG. GOU exporters to for- PSFU PSFU-BUDS Donor mulate tradable Number of produc- Regional workshops/training UEPB Low finance project ers and exporters 1000 a year on business proposal formula- Enterprise Ugan- proposals. receiving Business tion. da training NPA 6. Provide Amount of funds At least Shs 10 bil- MoFPED MTTI 2 years GOU value addition mobilised and set lion2 every year Capitalise UDB with Value UMA Donor funds to sup- aside for Value addition funds and design UDB High port enterprises addition effective access criteria and Sector Associa- participating in procedures tions processing the Number of compa- At least 100 every Universities country’s raw nies accessing the year materials. fund To encourage Number of banks All banks subscrib- Establish a credit refinance BOU MOFPED 2 years GOU, Donors credit informa- sharing information ing to a credit re- bureau Banks Banks tion sharing finance bureau by Microfinance insti- Low among banks 2010 tutions 1. Targets largely harmonized with those of the Competitiveness and Investment Climate Strategy (CICS). Others were obtained from the NBFP for FY2007/8. 2. This target is based on the Ministry of Finance proposals for the NBFP 2007/08 24 The Uganda National Expor t Strategy 2008-2012

4.5 TRADE INFORMATION AND CUSTOMS DOCUMENTATION ISSUES

4.5.1 Overview U ganda’s competitiveness environment is negatively impacted upon by inadequate and inefficient flow of market information to the business community and farmer/producer groups. This has in turn impacted the supply side, hampering the capacity of producers to meet the demands of a vibrant global market. Exporters and Rural producers have information needs across many trade areas, and there is a need for intermediaries - with a community development commitment - to match that demand with the most appropriate and affordable combination of media and relevant information sources.

4.5.2 Summary Situational Analysis With respect to information: The problem is primarily due to constraints resulting from inadequate facilitation for service providers and inadequate capacities of various market information providers to generate and disseminate the required information. Main issues are highlighted below. • Inadequate Trade Promotion Organisation (TPO) and Business Support Organisation (BSO) facilitation for accessing domestic and international market information journals, market analysis tools and other sources of information. Currently, UEPB in particular and sister Business Support Organizations in general, lack adequate access to international price and market information databases. • Inhibitive cost of delivery of services where in most cases, Trade Promotion Organizations are required to provide market information free of charge to the trading community, ignoring the cost of generation, analysis and dissemination. Furthermore, the costs of communication are still relatively high. • Lack of appropriate technologies and insufficient technology diffusion which hamper the smooth adoption of existing working technologies that fit the rural setting. With respect to customs, URA has made substantial reforms leading to an improved institutional image, increased tax compliance and strong integrity has been built. However the following issues requires attention. • Lengthy customs Procedures that contribute significantly to business costs. • Need for efficient administration of customs related export incentive schemes including timely management of duty drawbacks, VAT etc. Entries are lodged using Direct Trader Input (DTI) and are physically inspected in many cases, particularly where they involve refund or drawback claims, regardless of the compliance record of the exporter. This unnecessarily slows down the operations of the exporters. • The customs checkpoints and mandatory weigh bridges for goods in transit contribute greatly to transportation costs and serve as a real impediment to international trade. To address the above issues and challenges, the NES proposes several objectives and action initiatives and targets as detailed in the integrated management Framework matrix on the pages that follow. 25 The Uganda National Expor t Strategy 2008-2012 TABLE 5: STRATEGY INTEGRATED MANAGEMENT FRAMEWORK/MATRIX FOR TRADE INFORMATION AND CUSTOMS DOCUMENTATION OBJECTIVES MEASURES TARGETS INITIATIVES LEAD RESPONSIBLE TIME FRAME RESOURCES AGENCY INSTITUTIONS 1. To establish Number of 5 International Harmonize existing information NPA MTTI 1 year GOU adequate information sources sub- systems UEPB Low trade infor- sources ac- scribed to NPA mation sys- cessed by Complete the construction and URA tems TPOs and domestication of Regional Infor- UEPB PSFU BSOs 2 Complimentary mation System for Export (RISE) UCA 1 year GOU and information sys- UCE Donor tems built Low Number of (CMIS, SMS Price) International informa- UEPB Trade Sup- tion systems 40 districts hooked Enhance SMS pricing mecha- UEPB 2 years port institu- established onto the system nism. Private Informa- tions and inte- per year tion Service Pro- grated vider GOU and Donor Districts using 3 months Low the informa- GOU and tion systems Donor 2. To achieve Number of All Exporters, im- Develop the capability of direct URA PSFU an effi- trade and porters, shippers, electronic submission of import MTTI cient and transaction Banks and trans- information by all system clients UNCCI automated support or- porters UCCA 3 years GOU and system of ganizations Roll out the ASYCUDA++ to all MoFPED Donor managing hooked onto Border posts High customs and the system trade trans- Initiate and start implement- actions and ing a risk-based approach for procedures physical inspection of exports involving duty drawbacks and VAT refunds 26 The Uganda National Expor t Strategy 2008-2012 OBJECTIVES MEASURES TARGETS INITIATIVES LEAD RESPONSIBLE TIME FRAME RESOURCES AGENCY INSTITUTIONS 3. To widely Number of All producers & Enter into agreements with in- UEPB MTTI 1 year GOU and disseminate producers exporters (poten- formation dissemination media MAAIF Donor market in- & exporters tial and actual) (Radios, Newspapers and com- NAADS Low formation receiving in- plimentary portals/websites UNCCI formation NES Priority Sec- Integrate District Commercial tor Associations Number of Officers and district baded sec- informa- tor Associations in the market tion journals information dissemination sys- available to tems. exporters, farmers 4. Equip Number 4 training events Establish a training programme UEPB UCE GOU market of training per year targeting and calendar and circulate to UEPB Low information events 100 potential clients on a half year basis NPA analysts and actual trade PSFU with Number of information Develop a training proposal NAADS requisite information managers, and seek project financing UEPB UNCCI skills of analysts commercial officers domestically and from Sector 1 year GOU and translating trained etc International Agencies. Associations Donor market information to market intelligence 5. Eliminate The length Instant cargo Establish advance shipping URA KPA 1 year GOU delays at the of cargo clearing by way information systems KRA Donor main ports of clearance of automented and integrate them into TPA Medium Mombasa and time at the procedures and ASYCUDA++ Dar es Salaam ports. practices. 27 The Uganda National Expor t Strategy 2008-2012

4.6 MARKET ACCESS ISSUES AND ENTRY STRATEGIES

4.6.1 Brief Situational Analysis

4.6.1.1 Market Access - Tariff Barriers A lthough Uganda does not face tariffs in the main industrialized countries because of preferential treatment, the country’s main exports (fish fillets, coffee, tea, tobacco, and cotton) are subject to tariffs among the world’s twenty largest importers of these products, especially in the medium income countries. For instance, Mexico levies a 30 per cent tariff on fish fillets, India charges import duties of 100 per cent on coffee and tea, Sri Lanka has 75 per cent tariffs on tobacco. Although these markets may not be strategic for Uganda at the moment, the tariffs affect on-going trade and growth with these countries. Additionally, trade may considerably expand in the foreseeable future. India, for example, has strong business relationships with Uganda and these may translate into considerable exports in future. Although not a key issue at the moment, tariff escalation in both developed and developing country markets could also constrain Uganda’s ability to diversify exports. Tariff escalation affords higher protection to final goods than intermediate goods. The significance of this for the NES is that it confines a developing country like Uganda to raw material rather than value- added exports.

4.6.1.2 Market Access - Non Tariff Barriers (NTBs) A new generation of them, especially from developed countries, undermines the effectiveness of preferential treatment to enhance trade. The notable NTBs include: • Subsidies in industrialized countries, especially in the agricultural sector. These lead to depressed and fluctuating prices in the industrialized markets and promote import surges in developing countries, Uganda inclusive. • Product and process standards which have occasioned a myriad of Phytosanitary, hygiene, environmental controls and strict standards. These are often justified as a response to consumer pressures for safer goods. The result is heavy compliance costs for exporters in the form of certification and traceability processes which severely affect market entry. • Regional level markets are also prone to NTBs that may deeply damage intra regional trade. Often there are reported inconsistencies in signed commitments to greater regional integration while simultaneous administrative and bureaucratic measures impede trade. • Again at a regional level, controls on in-transit shipments are inefficient and constitute a serious non-tariff barrier to trade. This is especially so at the port of Mombasa. 28 The Uganda National Expor t Strategy 2008-2012

4.6.3 Strategic Markets and Entry Strategies Uganda enjoys several market preferences and the NES does define strategies for effectively exploiting these markets to achieve adequate entry and presence. The Markets summarized Figure 6. below illustrates the market destination of Uganda’s exports and as can be noted Europe, COMESA and the Middle East are the main markets for Uganda. Figure 6: Market destination of Uganda’s exports Illustration done by UEPB with data from UBOS 2006 Europe is Uganda’s largest export partner, where 34 per cent of Uganda’s exports were destined in 2006. The EU in particular accounts for 29% of the total exports. The EU’s Everything But Arms initiative of 2001 grants duty-free access to imports of all products from LDCs, except arms and ammunitions. Countries in the region are also important export destinations for Uganda, with COMESA16 being the most important regional grouping. It absorbed 31% of Uganda’s exports in 2006. The importance of regional trade may increase further with the recent peace settlement in Sudan. Given the vast construction and development needs of that country, there is strong potential for Uganda to expand its exports and re-exports to the country. The East African Customs Union is the immediate next door market that should foster faster growth in regional trade. 16 COMESA stands for Common Market for Eastern and Southern Africa. 29 The Uganda National Expor t Strategy 2008-2012 The Middle East has the potential to become a more important export market for Uganda. In 2006, 21% of the country’s export earnings were from this region. In this market, the United Arab Emirates (UAE) ranked as the top fifth export destination for Uganda’s products in 2006. It should however be noted that much of the export earnings from this region are from gold (over 80%). Many other countries avail themselves of potential markets for Uganda under The Generalised System of Preferences (GSP). Under this scheme, selected products originating from Uganda are granted non-reciprocal preferences in the form of reduced or zero tariff rates. The following countries currently operate GSP schemes: Australia, Belarus, Bulgaria, Canada, Japan, New Zealand and Norway. The African Growth and Opportunities Act of 2000 extends the GSP scheme of the United States to additional products, notably garments from African countries that satisfy certain economic, social and political criteria. More than 5,000 products are eligible for duty free access to this market. Other bilateral preferences exist for Uganda, the notable and most recent of them being China where more than 400 product lines qualify to enter the vast Chinese market duty free. These markets and different strategies for entry are presented in the table below: 30 The Uganda National Expor t Strategy 2008-2012 TABLE 6: STRATEGY INTEGRATED MANAGEMENT FRAMEWORK FOR MARKETS AND ENTRY STRATEGIES Market Market Strategies Lead In- Support Resources Preferences stitution Institutions 1. The EU - Duty and quota-free • Supporting Ugandan companies to effectively participate MTTI GOU Uganda’s most market access to in unique but important trade fairs in the region MOFA Donors important trading Uganda and other • Promoting a national branding initiative such as Gifted By Gifted By Export Enter- partner account- least developing coun- Nature to raise more awareness about the country and its Nature Inc. prises ing for 30% of tries under the EBA natural products and tourism potential PSFU Medium • Promoting Ugandan products in the growing fair-trade op- Uganda’s exports initiative. UEPB UNCCI portunities and organic niche markets in the region • Heightening Training for Uganda’s exporters in the sophisti- UIA cated requirements of the EU Market • Deepening relationships between Trade Support organi- zations in the EU with those in Uganda to leverage on the former’s vast knowledge of the EU market • Promoting and using the EU Help desk to facilitate Ugandan exporters to access critical market information and require- ments of the EU 2. Common Mar- Uganda’s exports to • Organizing Contact Promotion Programmes for selected UEPB Gifted By GOU ket for Eastern the region are being products in target countries. This will involve identifying tar- Nature Inc. Donors and Southern charged 20% tariff. get market experts and entering into contractual arrange- MOFA Export Enter- Africa (COMESA) When Uganda joins ments with them to promote and secure market contracts for PSFU prises has 380 million the FTA, her exports selected products. UNCCI High • Opening up trade points and show rooms in target markets people and ac- will enter the member UIA such as the Sudan counts for 31% countries duty free • Identifying contact promotional agencies in specific markets of Uganda’s ex- and working with the private sector to use these agencies to ports promote their products and services in these markets MTTI • Speedy review and ratification of Uganda’s entry into the FTA 31 The Uganda National Expor t Strategy 2008-2012 Market Market Strategies Lead In- Support Resources Preferences stitution Institutions 3. The EAC -This The 3 original partner • Joint trade export activities including common trade infor- UEPB MTTI GOU covers an area states agreed to a mation portals such as RISE: MOFA Donors of 1.8 million three-band structure of • Elimination of Trade barriers through fostering more coop- PSFU Export Enter- square kilometres the common external eration between the region’s different Trade Promotion or- UNCCI prises with a combined tariff with a minimum ganizations. UIA Medium • Facilitating regular business forums that shall enable Ugan- population of rate of 0% (for raw dan Businesses forge close ties over 100 million. materials and capi- • Promotional efforts focusing on specific products which al- tal goods), 10% (for ready demonstrate high demand in the market. intermediate goods) • Opening permanent trade points in the region and deepen- and 25% (for finished ing the role of commercial attaches in export business pro- goods) in respect of all motion programs and events. goods imported into the EAC. Again, goods from the 3 countries are traded duty and quota free in the re- gion. 2007 saw the entry of Rwanda and Burundi into the EAC. 4. African • Promoting linkages between Ugandan and USA firms using AGOA MTTI GOU Growth and Op- Duty/quota-free ac- US based market experts. Country MOFA Donors portunity Act cess to the US mar- • Business related capacity building programmes to enable Response PSFU Export Enter- (AGOA), under ket for essentially all Uganda enterprises cope with issues of dealing with the Office UNCCI prises which 35 Sub- products through the complexities of the USA markets. UIA Medium • Trade and Industry Shows: The NES Secretariat together with Saharan African Generalised System of the AGOA Country response Office will coordinate organ- countries could Preferences (GSP) ised participation in the shows. access the Ameri- • Attracting American Investment interest in Uganda will be can market. pursued by the Uganda Investment Authority under the vari- ous incentive schemes the authority manages. 32 The Uganda National Expor t Strategy 2008-2012 Market Market Strategies Lead In- Support Resources Preferences stitution Institutions 5. The Middle None • Negotiate bilateral preferences in the region MTTI UEPB GOU East – Is an af- • Encourage trade points in the region MOFA Donors fluent market be- • Country branding in the region through business media Gifted By Export Enter- cause of huge oil and participation in trade fairs. Nature Inc. prises revenues and is • Open an embassy with a focus on trade promotion PSFU Medium a centre of trade UNCCI especially in UAE UIA 6. China - Vast Duty free access has • Pursue product and service exhibition reciprocal ar- UEPB MTTI GOU market of more been offered by China rangements with Chinese private investors who are MOFA Donors than 1.2 bil- for over 400 Ugandan interested in establishing trade exhibition centres in Gifted By Export Enter- lion people with products since January Uganda Nature Inc. prises rising incomes. 2005. • Encourage joint ventures with Chinese to market Ugan- PSFU Medium Uganda has dan coffee and other products through hotels and su- UNCCI good prospects permarkets. This effort was began in 2002 and will be UIA to export the fol- continued lowing commodi- • Training and awareness raising events about the Chi- ties to China: nese market and the range of preferences offered to coffee, art and Uganda. crafts, fish, va- • Use of Ugandan Communities in China to overcome lan- nilla and other guage barriers and hold agency portfolios for Ugan- spices, fruits, veg- dan enterprises interested in China. etables, leather • Active participation/representation in various trade and leather fairs and exhibitions in the country. products. • Linking Ugandan students in various cities to Ugandan enterprises via Uganda’s embassy to help in interpreta- tion of documents and other promotional efforts. 33 The Uganda National Expor t Strategy 2008-2012

5.0 NES STRATEGIC PRIORITY SECTORS T his chapter analyses sector specific issues, defines 12 NES sectors and proposes strategies for their development.

5.1 CRITERIA FOR SELECTING PRIORITY SECTORS Several criteria were used to select the 12 strategic sectors considered important for Uganda. These criteria are summarized below. Criteria scores are in annex B1. • Sectors which possess, or have the potential to possess significant competitive advantages; • Sectors which possess, or have the potential to possess high value-addition. • Sectors which already contribute significantly to employment, regional development, poverty reduction, gender equity, etc. • Sectors which have a high potential developmental impact • Sectors experiencing high-growth in international demand. • Sectors with potential to mainstream gender and vulnerable groups into export trade. A total of 20 product sectors were subjected to these criteria using a weighted index. From this list, the final twelve Sectors that offer the best opportunity for Uganda were arrived at. To further allow for setting priorities within priorities, the twelve sectors were reviewed against recommendations of other key studies and strategies done within the export sector including The DTIS, CICS and the recently concluded Scope projects. The NES thus takes up as main priorities the following: • Coffee • Fish • Tea • Cotton and Textiles, • Flowers and • Services. However, to further enhance the export diversification process, six other sectors were evaluated according to the above criteria and equally proposed for NES. These include: • Fruits & Vegetables • Dairy • Cereals and pulses • Natural Ingredients • Commercial crafts • Manufactures (To advance the value addition goal) On the pages that follow, an analysis is made of all the twelve sectors’ highlighting critical issues, SWOT and summary of market trends. A comprehensive framework is then presented containing the strategic initiatives to address the issues. 34 The Uganda National Expor t Strategy 2008-2012

5.2 THE COFFEE SECTOR

5.2.1. Overview C offee is Uganda’s largest export crop and also its largest merchandise export to international markets, amounting to US$ 189.8 million in 2006. This was up from US$ 172 million in 2005. It is a low input intensity small-holder crop with an average farm size of 0.2 hectares. Its the main source of income for some 500,000 rural households. Over 80 per cent of the coffee produced and exported from Uganda is Robusta, with Arabica making up the remainder. Uganda’s Robusta coffee is considered to be one of the best in the world, and commands a considerable premium.

5.2.2 Market Size and Trends In 2005, the Global market size of Coffee was estimated to be US$ 12.8 Billion. Global growth trends in value over the period 2001 – 2005 were 15% p.a. (Trademap, 2006). For the soluble coffee, world consumption is at 420,000MT per annum. This represents 20% of the world’s total coffee consumption. Uganda experienced a recovery in export values averaging a growth of 15% p.a. over the same period. Most Ugandan coffee is imported by the EU which together with Switzerland account for more than 80 per cent of Uganda’s coffee exports. Sudan imports 15 per cent while the remainder goes to other destinations. All these imports are coffee beans.

5.2.3 Critical Sector Issues • The coffee wilt disease (CWD) currently affects all 21 Robusta-producing districts in Uganda. 122,400 of the total 240,000 hectares in these districts have been infected, equivalent to about 136 million Robusta trees and representing a 5% cumulative infection rate. • The other key challenge is the continued export of green beans that has deprived the country of great revenues from final processed coffee products. A plastic container with a capacity of 100 grams of blended coffee (Robusta/ Arabic) originating from Uganda but processed abroad costs US $ 14. The Ugandan exporter on the other hand fetches only US $ 1.3 by exporting green beans. Opportunities to be exploited, strengths to be built upon, weaknesses that need to be overcome and threats to be confronted are outlined in the SWOT Analysis below. 35 The Uganda National Expor t Strategy 2008-2012 SWOT Analysis for the Coffee Sector Strengths Weaknesses • Highly skilled and experienced • Absence of grassroots structures to enable workforce at the processor level buying direct from farmers; buying from • Knowledge, skills and experience traders (middle-men) suffocates quality developed in coffee over decades • Continuous exportation of beans with • Trust and respect for good quality resultant failure to tap into huge markets for and grades that can compete with final coffees Internationally known markets like • Lack of ethics/trust among the personnel Brazil employed to watch quality • Small firms with low levels of • Limited storage capacity and storage management costs facilities • Existence in the country of • Logistics-instruments to mitigate trading subsidiaries of multinationals with factors like trucks to transport the coffee from easy access to pre-financing and the field are lacking markets. • A weak capital base i.e. working capital to cover operating costs • Lack of follow-up and implementation of findings from researchers Opportunities Threats • A growing and stable organic • Decreasing volumes of coffee in Uganda over market the last 5 years • Specialty markets that demand for • High production and operating costs that make certified special coffees like fair- it difficult to break-even, e.g. Electricity, Fuel, trade, Utz-Kapeh Rent, Salaries and other miscellaneous costs • UCDA enforcement of quality • Climatic and drastic weather changes that have standards (“Good quality sells”). affected the agricultural sector in general • Low supply from large producing • Price variability/volatility which basically countries like Brazil hikes the market means price uncertainty that may lead to prices and gives Ugandan coffee market crushes the opportunity as it is second in • Substitution from Vietnam that has just joined demand the market but now out-competes original • Differentiated market that seeks for exporters different varieties • Potential for value addition (International corporations e.g. TATA have expressed interest in Uganda) To address the above sector issues and weaknesses and confront the envisaged threats, the NES proposes a comprehensive management framework of several objectives and action initiatives as detailed in the matrix on the pages that follow. Coffee being one of the sectors highlighted by the DTIS, all action recommendations relating to export development in the implementation plan of the DTIS shall form part of the initiatives of this NES. 36 The Uganda National Expor t Strategy 2008-2012 TABLE 7: STRATEGY INTEGRATED MANAGEMENT FRAMEWORK / MARIX FOR THE COFEE SECTOR Vision: Maintaining the sector’s position as the leading contributor to Uganda’s Export Earnings and breaking into the lucrative soluble coffee market Objective Measure Target Initiative Lead Support Mile-stones Resources institution Institution Development Perspective1 Household Income Increase Develop Cooperative UCA GOU Improving household levels farmer’s income Marketing programs CICS 3 years Donors UCDA incomes of many small- levels by 20% that link more producers MAAIF scale farmers dependent in 5 years directly to the market, PMA on coffee as a cash crop reducing to the extent Secretariat possible the middlemen. NPA Competitiveness Amount of Disease Develop and source UCDA CICS Perspective resources invested eradicated by funds for research to MAAIF 2 years GOU (Border-In Gear) in disease control 2012 develop wilt resistant PMA Donors Capacity Development research Robusta plant stock Secretariat Medium Coffee To combat coffee wilt Research that heavily affects Institute production volumes (CORI) MOFPED 1. Most of these initiatives take into account recommendations of the Competitiveness and Investment Strategy (CICS) 2006-2010 and the Diagnostic Trade Integrated Study (DTIS) 2006. 2. The development perspective takes into account the goals of the Prosperity for All program of Government that seeks to get as many producers as possible earn more from their productive activities and enterprises. 37 The Uganda National Expor t Strategy 2008-2012 Objective Measure Target Initiative Lead Support Milestones Resources institution Institution Amount of 10% of the value Carry out investor drive UIA UCDA 2 years GOU Capacity soluble coffee of current exports missions to attract major MAAIF Medium Diversification targeted DFI by 2012 brand coffee houses such MTTI To strive for into the country as Starbucks to invest in MOFA exportation of Uganda soluble coffees that account for 90% of the final coffee value Roaster 3 bankable Conduct Value addition UIRI UEPB 2 years GOU technology in feasibility studies feasibility studies MTTI Private the country UCDA Sector Roaster Roaster and Establish Coffee roasting UIRI UCDA 5 years pilot projects extraction tech pilot projects with investors MTTI GOU and pilot in the making efforts to export UIA Private country in 5 years soluble coffees Sector Human Capital Number of At least 3 training Design and conduct MTTI (De- Development post-harvest events in all main integrated post harvest partment of 3 years GOU Enhance coffee farm handling coffee clusters handling training programs UCDA Coopera- Donors management and training events. every year that cover production, tives) Medium post-harvest handling processing and export NAADS knowledge and skills Post-harvest related subjects UNFFE among the sector’s handling PMA many small-scale infrastructure Secretariat producers. 38 The Uganda National Expor t Strategy 2008-2012 Objective Measure Target Initiative Lead Support Milestones Resources institution Institution Competitiveness Storage All coffee Clusters Develop programme to re- MAAIF GOU Perspective (Cont) facilities in invest in silos in different URA Private Border Gear coffee clusters Better drying clusters and promote drying UCDA 4 years Sector Infrastructure technologies (off above the ground. UCDA MOW To develop efficient the ground drying PMA local storage systems) Secretariat capacities and NPA efficient hygenic drying methods. Border-Out Gear Number of Develop a special trade UCDA UEPB 1 year GOU In-market Business facilitated fairs calendar and design UCEF Private Support trade fairs per At least 3 per programme to enlist firm MOFA Sector Support for year year interest and participation, Low Participation in special coffee trade fairs. Image and Branding Number of At least 2 major Develop programme to UCDA MTTI 5 years GOU To market Uganda as international commercials mobilize coffee exporters UEPB Private a source of specialty media to adopt sector branding Gifted by Sector and organic coffees commercials initiatives including joint Nature Inc. on Uganda’s promotion of the country’s MOFA specialty special coffees. UCEF coffees Institutional Number of Regional Clusters Initiate Sector Cluster concept UCDA MTTI 1 year GOU Perspective clusters in coffee training events in the sector CICS Private Sector Support producing regions Secretariat Sector Network (SSN) Develop a programme to UEPB To ensure that the mobilize exporters to be part Gifted by sector’s SSN gives of these clusters and attract Nature Inc. requisite priority to Government and donor MOFA strengthening private support to cluster activities. UCF sector industry NAADS 39 support organizations The Uganda National Expor t Strategy 2008-2012

5.3 THE FISH SECTOR

5.3.1 Overview F ish remains the most outstanding non traditional export from Uganda. In 2006, Uganda’s fish exports continued to grow, earning US$145.8 million up from US$ 142.6 million in 2005. In 2006, fish and fish products accounted for 15.2% of Uganda’s total exports by value, making fish Uganda’s biggest product export after coffee. Uganda produces an estimated catch of about 100,000 metric tones of Nile Perch a year, all from Lake Victoria. The fish sector provides employment to over 700,000 people at different levels of the value chain.

5.3.2 Market Size and Trends In 2005, the Global market size of Fish and fish products was estimated at US$ 8.7 billion. Global growth trends in value over the period 2001 – 2005 were 10% p.a. (Trademap, 2006). Uganda’s fish fillet export values averaged a growth of 20% p.a. over the same period. In 2005, 16 firms accounted for over 90% of national export earnings from fish fillets. Most of Uganda’s fish is imported by the EU.

5.3.3 Critical Sector Issues Despite phenomenal success, the Fish sector still faces critical challenges that are summarized as follows: • Existing levels of exploitation especially for Nile Perch are considered to be nearing maximum sustainable yield. This implies a possible collapse of stock levels and loss of supplies for export. • There is inadequate research and development in the sector for product development, value addition and increasing the market scope of the Nile Perch beyond just being a wild fish. • Coupled with the above, 97% of the exports are a single product – just Nile Perch. • The Sector operates at a competitive disadvantage with respect to export distribution cost due to high freight charges compared to Kenya and Tanzania. • The fisheries resources authorities also highlight a problem of lack of effective management of the fisheries resources. This is at the heart of fears that the fisheries resource may collapse17. • Although Beach Management Units (BMU) have been established to guarantee among others, better hygiene practices, the fishing communities still lack the facilities and attitudes that would qualify Uganda to worry less about possible hitches in the market over food safety concerns. • Roads to and from landing sites are in a sorry state and fishing equipment is largely composed of small canoes that affect quality and level of fish catch. • Sanitary and phyto-sanitary requirements still impose considerable costs on producers in view of traceability systems that have to be put in place and complied with. 17 See article titled “Uganda’s Fish Sector competitiveness” by Dick Nyeko, Commissioner, Department of Fisheries in the first edition of the Fish Newsletter, January –April 2007 40 The Uganda National Expor t Strategy 2008-2012 • The Sector also has considerable worries about escalated competition come 2008 when the largest market for the sector (70%) relaxes preference offers under Everything But Arms (EBA). Opportunities to be exploited, strengths to be built upon, weaknesses that need to be overcome and threats to be confronted are outlined in the SWOT Analysis below. The Sector’s SWOT Analysis Strengths Weaknesses • Well established and organized modern • Most of the upstream where the product processing factories, all being ISO is sourced suffers from hygiene problems certified • The fisheries resources management still • Well organized and effective sector lacks adequate control capacities Association • Poor fishing equipment dominated by • Existence of a large resource base in small canoes and unregulated net sizes form of large water bodies that affect stocks • Strong presence in the main markets • Beach management practices still • Existence of traceability system fall short of adequate international standards Opportunities Threats • Existence of Market preferences that • Dwindling stocks in the main resource allow tax free imports for Uganda • De-oxygenation of lake Victoria which • Differentiated market that seeks for will adversely affect stocks varieties • Strong competition from Asia in the main • Considerable recognition from market, the EU government of the sector significance in • High production and operating costs exports, a strong point for lobbying occasioned by national infrastructure • Increasing consumer health consciousness challenges of freight and energy which has caused increased demand for deficiencies white meat • Climate change, though distant, poses a threat to the main fisheries resources To address the above sector issues and weaknesses and confront the envisaged threats, the NES proposes a comprehensive management framework of several objectives and action initiatives as detailed in the matrix on the pages that follow. Again fish is one of the sectors highlighted as a priority sector by the DTIS. Therefore, all action recommendations relating to export development in the implementation plan of the DTIS have been incorporated in action initiatives of the NES. 41 The Uganda National Expor t Strategy 2008-2012 TABLE 8: STRATEGY INTEGRATED MANAGEMENT FRAMEWORK / MATRIX FOR THE FISH SECTOR Vision: “To make the Ugandan Fish industry sustainable, quality oriented and highly proficient in export of value added products”. Objective Measure Target Initiative Lead insti- Support Mile- Resources tution Institution stones Development Number of jobs From the estimated Countrywide MTTI 5 Years Perspective 700,000 jobs expansion of sector UFPEA GOU To increase sector present to 1,000,00 activities through DFR Private MAIIF contribution to in 5 years aquaculture promotion LGs Sector poverty alleviation PMA Medium through creation of Secretariat more employment NPA opportunities Legend DFR Department of Fisheries Resources FRRI Fisheries Resource Research Institute LVFO Lake Victoria Fisheries Organization UCFFA Uganda Commercial Fish Farmers Association BMU Beach Management Unit MSY Maximum Sustainable Yield 42 The Uganda National Expor t Strategy 2008-2012 Objective Measure Target Initiative Lead Support Milestones Resources institution Institution Competitiveness From the present Develop and implement MAAIF FRRI 5 years GOU Perspective Volume of fish 100, 000 metric new fisheries resources UFPEA Donor Border-In Gear capture for tones to 150,000 right from feasibility studies LVFO High Capacity Development exports in 5 years and resource mapping to DFR To increase export volumes full scale aquaculture. BMUs of fish and fish products MTTI Establish aquaculture NPA demonstration sites at district level. To Promote resource Declining Comanagement UFPEA RRI 2 years GOU sustainability trends of of resource area Set up resource UFPEA Donor immature fish(Kenya, Uganda sustainability projects and LVFO Private capture and Tanzania). upstream activity control DFR sector programs on the main BMUs Medium Upstream Standard resource- L. Victoria MTTI control operating NPA measures and procedure and evidence control system by 2009. Capacity Diversification Trend of Fillet portions, Develop programme and MAAIF 5 years GOU To ensure value addition range of steaks and incentive schemes to enable FRRI UIRI Donor and product range products skewers and fish the private processors UNBS Private diversification exported oils upgrade processing MTTI Sector other than technologies UIRI High Nile perch UFPEA fillet Develop appropriate R & PMA Secretariat Ready to eat D for product development fish recipes and widely share results development. with private sector processors 43 The Uganda National Expor t Strategy 2008-2012 Objective Measure Target Initiative Lead Support Milestones Resources institution Institution Human Capital Aquaculture At least one Design and implement a Development demonstration demonstration programme to upgrade Manpower development to sites site in each aquaculture training MAAIF MoES 2 years GOU support aquaculture and district targeted facilities MLG Donor product diversification Practical for aquaculture UFPEA High training Develop project proposals FRRI facilities Reviewed for upgrading existing curriculum in two facilities at Fisheries Curriculum years Training Institute and structure and Makerere University subjects Start syllabus review meetings to reflect national strategic priorities of the fish sector Number of At least all Initiate proposals to MOW 5 years GOU Competitiveness operational landing sites secure resources to DFR MOLG Donors Perspective (Cont) feeder roads fully equipment implement a Fisheries Road MAAIF High Border Gear to landing in 5 years. Maintenance programme UFPEA Infrastructure sites MOW Upgrade roads and Jointly develop a landing BMUs provide water supply, Amount and sites modernization MFPED electrification, etc. for reliability of programme Local landing sites power Governments Procedures and Number of All permits Develop and share with DFR MAAIF 1 year Gou Documentation permits and approval stakeholders a simple MTTI Reduce documentation processes should approval system and Local levels especially relating to Length of take 2 weeks regulations relating to all Governments regulation and movement approval maximum. types of permits UPEA processes 44 The Uganda National Expor t Strategy 2008-2012 Objective Measure Target Initiative Lead Support Milestones Resources institution Institution Border-Out Gear Number of Middle East Negotiate trade MTTI MAAIF 3 years GOU Market Access countries countries preference particularly UFPEA Low Negotiate for market offering with the UAE as it has Processors preferences for this and preferences become a trading hub PSFU other sectors in other for fish originating from UEPB markets other than the EU. Uganda1 Image and Branding All exports to Mobilize fish exporters to MTTI MTTI 2 years GOU To brand and position Market bear the include the Uganda Gifted UEPB Private Ugandan fish and fish signals Gifted By By nature logo on the Gifted by Sector products as a quality Nature logo. export product packages Nature Inc. Low product of Uganda for the UFPEA top segment of the target MOFA markets Client Perspective: Number 2 sector specific UFPEA GOU Export Competency of sector institutionalized Develop and incorporate UEPB Enterprise 2 years Donor Equip new and emerging operatives training a sector training module Uganda Private exporters with critical trained programs every in the major training DFR Sector export skills year programmes of the main Low Trade training Support Institutions of UEPB and Enterprise Uganda Design and implement Expert Coaching programmes for the sector Information: Number SMEs Build and include an UFPEA MAAIF 1 year GOU To provide market of clients information module in the DFR Private information to SMEs that reporting Regional Information for MTTI Sector may enter the trade once receiving Export (RISE) UEPB Low aquaculture takes firm root information 1 Concerns about challenges in this market have been raised by fish exporters. It became a main issue when the WTO Secretary General interacted with exporters during his visit to 45 Uganda in 2006. UAE however is not a member of the WTO. The Uganda National Expor t Strategy 2008-2012 Objective Measure Target Initiative Lead Support Milestones Resources institution Institution Quality Mitigation Implement approved To ensure comprehensive measures for mitigation measures to NEMA MAAIF 3 years GOU quality management and all effluents reduce de-oxygenation of UNBS Donor compliance practices in the water in L. Victoria UFPEA Medium fisheries Supply Chain Number Train all staff Develop appropriate of staff within 1-2 years. regulatory framework for DFR MAAIF trained in fish aquaculture, train staff UNBS 2 Years GOU management of competent authority UFPEA Donor and risk to monitor and enforce NPA Low assessment regulations and conduct practices risk assessments in the fish industry practices. Number All BMUs in Initiate and implement a of hygiene a hygiene comprehensive hygiene DFR programmes programme in 2 programme for the sector. MAAIF 2 Years GOU being years UNBS Donor implemented UFPEA Medium Institutional Perspective: Operationali- UFA in place by UFPEA Strategy Support Network sation of the 2009 Finalize procedures for MAIIF MTTI 2 years GOU (SSN) UFA the establishment of the DFR Donors Uganda Fisheries Authority MTTI Low Ensure the establishment (UFA) of an effective sector regulatory and management authority Services Delivery Network Sector Asso- Strong Networks Sector Association capacity UFPEA DFR 2 years Private (SDN) ciation capac- with BSOs and building programme MAAIF Sector Provide support to the ity TPOs PMA Secretariat Donors Sector Association. Association National Drive to establish branches in UFPEA branches in fish districts producing areas 46 The Uganda National Expor t Strategy 2008-2012

5.4 THE COTTON, TEXTILES AND GARMENTS SECTOR

5.4.1 Overview C otton is the second most important traditional export crop for Uganda. It is grown in several regions of the country, with a concentration in the eastern, northern, north-eastern, western parts of the country. It is estimated to contribute to the incomes of 10% of the country’s population (or 2.5 million people in the rural areas of the east, north, and west). Uganda’s cotton production has shown extreme swings over the years, ranging from a peak in 1969/70 of 86,344 MT (which accounted for 40% of total foreign exchange earnings) to a low of 5,896 MT during 1992/93 to current levels of approximately 18,143 MT annually. With respect to garments and textiles, Uganda’s competitive advantage has been questioned. Arguments have focussed on the lack of locally produced yarn and fabric that is of appropriate quality and competitively priced. However, exporting simple cotton bales of lint robs the country of opportunities provided by a huge and lucrative garments and textile market worldwide. Government policy focuses on achieving export of apparels and garments. Silk is another fibre produced in a few districts of the country mainly in Bushenyi, Kanungu, and Mukono. The Silk sector, if sustainably developed, has the potential to spur village level processing especially the handloom cottage industry, which would offer income opportunities to women and the youth. Two silk processing plants exist in the country, the main in Kampala and another in Bushenyi. These have however suffered serious capacity under-utilization as a result of lack of cocoon threads occasioned by lack of hatcheries in the country. JICA is making interventions in this area and NES builds on these efforts.

5.4.2 Market Size and Trends In the year 2005, the global market size for raw cotton (not carded or combed) was an estimated US$ 9.6 billion having grown at a rate of 8% p.a. over the period 2001 – 2005. The global market size for lint was US$ 106 million falling at a rate of -3% p.a. over the same period. In sharp contrast, the global market demand for textiles and apparels is an estimated US$ 126,290 million (2005 est.). Current estimates put it over US$ 1 trillion and it continues to grow. China dominates about a quarter of the market. Uganda’s cotton and lint exports grew 46% p.a. and 90% p.a. respectively over the period 2001 – 2005. Although the rate of growth for Uganda is high, the amounts exported are quite insignificant and remain largely raw and unprocessed. Over 90% of all cotton produced is exported raw. Very little cotton is consumed by local millers. It is however worthwhile noting that from almost no textile exports in the last couple of years, Uganda was able to export over US$ 1.7 million worth of assorted textile wear to the United States in 2003. 47 The Uganda National Expor t Strategy 2008-2012

5.4.3 Critical Sector Issues • Under-utilization of installed ginning capacity. The estimated installed capacity of ginneries is around 350,000 bales of cotton per year. Production remains in the region of 100,000 bales giving an estimated capacity utilization of 40%. • Some ginneries are in dire need of repair and/or upgrading in order to maintain high quality lint. • Lack of a cotton and lint quality maintenance regime to ensure high grade of lint and garments. • Inadequate measures to ensure this high quality staple cotton (medium staple length 32- 34mm) have to be sustainably maintained at farm, gin and marketing levels. • Uganda’s textile workers are considered to have a low productivity due to several factors that include basic skills, poor training, ineffective wage incentives, lack of bundling processes etc. • Many production units in other exporting countries benefit from export promotion schemes such as tax holidays and duty free imports of inputs. The absence of these incentives in Uganda is a drawback to the sector. • Lack of affordable financing for the sector poses severe challenges for the textile mills and garment exporters. • In the case of silk, the lack of hatcheries to ensure uninterrupted supply of eggs to farmers is the biggest sector issue. • Inadequate transportation and logistics, timely delivery of consignments and in the right amounts is necessary to maintain markets. Unreliable and costly transport to Mombasa from Kampala is still a big challenge to exporters. Opportunities to be exploited, strengths to be built upon, weaknesses that need to be overcome and threats to be confronted are outlined in the SWOT Analysis below. 48 The Uganda National Expor t Strategy 2008-2012 The SWOT Analysis for the Cotton, Textiles and Garment Sector Strengths Weaknesses • High quality cotton fetching a premium • Rain fed agriculture on the world market. • Fluctuating World Market prices • Consistent quality throughout the year • Slow and bureaucratic procedures of • Conducive conditions for organic cotton registering agro-chemicals (especially production. for organic cotton) • Cheap labour. • Limited value addition. • Existing cotton research institutions to • Relatively small base of commercial improve on varieties. farmers • Adequate Ginning capacity • Inadequate funding for research. • Non-existence of organised co- operatives. • Low technology equipment and expertise. Opportunities Threats • Market opportunities under the AGOA • Other competing crops such as sunflower, and EBA. simsim etc. that attract the attention of • Opportunities for increased Yields farmers away from cotton and silk through the introduction of Bt varieties. • Cheaper synthetic materials. • Availability of land for commercial cotton • Importation of second-hand clothing. production. • Emergence of the spiny bollworm pest. • Tariff safeguards for cotton yarn and • Continued unrest in the Northern Cotton fabrics under CET with EAC/COMESA growing areas. • Competition of cotton seed oil from cheaper imported crude palm oil • Unfair trading practices such as subsidies • Cut throat competition in the global market from low cost textile producers of Asia To address the above sector issues and weaknesses and confront the envisaged threats, the NES proposes a comprehensive management framework of several objectives and action initiatives as detailed in the matrix on the pages that follow. Again cotton is one of the sectors highlighted as a priority sector by the DTIS. Therefore all action recommendations relating to export development in the implementation plan of the DTIS have been incorporated in action initiatives of NES. 49 The Uganda National Expor t Strategy 2008-2012 TABLE 9: INTEGRATED MANAGEMENT FRAMEWORK /ACTION MATRIX FOR THE COTTON, TEXTILES AND GARMENTS SECTOR Vision: Be a leading producer of high quality Cotton, Textiles, Garments and other cotton products in East and Central Africa Objective Measure Target Initiative Lead Support Milestones Resources institution institution Development Perspective From the present Introduce low cost GOU Maximize the Cotton and Number of estimate of 0.8m to mechanization NAADS 3 years. Donors Textiles sector’s contribution Jobs 1million in 3 years to increase UGCEA Private to employment and Income levels Increase earnings to land acreage CDO PMA Secretariat Sector poverty reduction. US $ 150 M/yr in under cotton NARS/NARO Medium 3yrs and increase NPA community participation in production 50 The Uganda National Expor t Strategy 2008-2012 Objective Measure Target Initiative Lead Responsi- Milestones Resources institution ble Competitiveness Perspective Yields From 187kg to Introduce best 3 years GOU Border-In Gear 1,000kg of lint/acre agronomic practices CDO MAAIF Donors Capacity Development by 2010 UGCEA NAADS Private To increase cotton and silk Levels of From 133,000 Carry out campaigns LGs Sector cocoon yields and production production (2005/6) to 400,000 for increased cotton Medium volumes bales of cotton by production Silk Sector 2010 Associations Support private sector MAIIF UEPB /farmer production Exporters inputs initiatives KARI PMA Number of One hatchery in each Develop a silk sector Secretariat cocoon egg silk producing district renovation strategy NPA hatcheries with a focus on technical support for Number of From 480,000 to hatcheries farmers 530,000 for cotton and from 250 to 1000 in silk by 2010 To ensure maximum Ginning From 34% to 37 - Programme to install UGCEA CDO GOU competences in cotton ginning outturn 40% efficient ginners UIRI 3 years Private and exporting; and in value (GOT) UEPB Sector addition products UOSPA High 51 The Uganda National Expor t Strategy 2008-2012 Objective Measure Target Initiative Lead Responsi- Milestones Resources institution ble Capacity Diversification Range of Lint, animal feeds Offer special tax UIA MAAIF 3 years GOU To increase range of value products and cooking oil waivers to attract CDO (Low) added products from cotton oil extraction and UIRI feed manufacturing MFPED investors Garments From the Support for MOFPED CDO, NPA 5 years GOU and approximate US$ 2 technology upgrade UIRI apparels million ( 2005) to 5 for selected promising MFPED exports million in 5 years textile and apparel UDB industries TEXDA Range of Animal feeds and Program to diversify UOSPA CDO 3 years Private products seed cake , cooking products. UGCEA investors from lint oil UIRI Medium and seed Human Capital Development Number of 50 per year Revamp Busitema MOES MTTI GOU To introduce specialised graduates Ginning School UIRI 3 years Donors training in cotton ginning, every year and the Textile UGCEA High spinning and weaving in Department at MFPED Uganda’s vocational institutions Kyambogo University TEXDA Number Upgrade 600kms Implement a feeder MOLG UGCEA 3 years GOU Competitiveness Perspective of feeder feeder roads that link roads rehabilitation MFPED (Donors) (Cont) roads most farms to main programme in cotton LGs Border Gear repaired roads by 2010 growing areas NPA Infrastructure To provide necessary rural infrastructure especially feeder roads. Procedures and Documentation Establish a one- UGCEA to negotiate UGCEA MTTI 1 year Private To streamline government Number stop centre for mill with Central and Local MFPED Sector procedures for licensing textile of steps licensing. governments UEPB Low mills and export documentation to acquire UOSPA licenses. TEXDA 52 The Uganda National Expor t Strategy 2008-2012 Objective Measure Target Initiative Lead Responsi- Milestones Resources institution ble Transaction Support Market All cotton farmers Implement the MTTI MTTI 1 year GOU To improve efficiency and price efficiency marketing as groups/ Warehouse Receipt UEPB Donors support mechanism for cotton co-operatives System (WRS) UGCEA Low farmers. Prices Provide Weekly CDO PMA received by prices/and market Secretariat farmers information in print media Border-Out Gear Volumes 25% of cotton Deepen promotion CDO UGCEA 2 years GOU Market Access of cotton exports efforts in markets CDO Low To explore niche markets for lint and (organic/ fair trade) NOGAMU organic cotton and organic apparels UEPB textiles and fair trade sold in niche Affirmative market MOFA opportunities markets development support TEXDA scheme for textile PMA factories targeting Secretariat niche markets Image and Branding: Volumes of To make Uganda as Brand name CDO UNBS 3 years GOU To create a national image and branded ‘premier organic development NOGAMU Private recognized brand for Ugandan cotton cotton supplier in initiative NGOs Sector cotton Africa’ Gifted by Low Nature Inc. Client Perspective Number 50% of cotton Weekly Cotton UGCEA Telecom 3 years GOU Information of farmers farmers by end of Farmer News in service Private To provide farmers and accessing 2009. the print media and providers Sector exporters with relevant trade and export portals. UCC RDS Medium information using the Install boosters in TEXDA information areas with poor telecom network to aid information delivery via mobile 53 phones. The Uganda National Expor t Strategy 2008-2012 Objective Measure Target Initiative Lead Responsi- Milestones Resources institution ble Financial Volume of Revive farmers’ MFPED MFPED 2 years GOU To enable commercial firms loans 6-7 % p. a bank and strengthen CDO High access loans from Banks at Interest specicfic sector UGCEA competitive interest rates rates SACCOS UDB BOU Parliament Quality Compliance All ginners Design programme UGCEA TEXDA 3 years GOU To ensure necessary quality levels 90% of Uganda to minimize trading in MTTI Private conformance by all exporters/ Reject factor cotton grades to unsorted cotton CDO MAAIF Sector ginners. be of world selling Enforce cotton UIRI Low grade. standards UNBS NOGAMU Introduce watering UGCEA cotton grades at primary level Upgrade textile technology Institutional Perspective: Number 2 national meetings Initiate regular sector UGCEA CDO 1 year GOU Strategy Support Network of public- but with more at meetings MTTI Private (SSN): private regional and district MAAIF Sector To strengthen pubic - private meetings levels UIA Low partnerships in the sector for held every NPA effective policy development year UEPB UOSPA Services Delivery Network Functional All cotton growing Farmer mobilization CDO UGCEA 3 years GOU (SDN) Association areas programmes under MAAIF Private Strengthen sector associations branches cluster framework. NAADS Sector especially at grassroots UIRI Low production levels UNBS 54 The Uganda National Expor t Strategy 2008-2012

5.5 THE TEA SECTOR

5.5.1 Overview A round 37,000 tons of tea were produced and 35,000 tons exported in 2005. 70% of the production was accounted for by 5 large private estates18, while smallholder production accounted for 27 per cent, and 20 small private estates accounted for the remainder. With an estimated 16,300 hectares of tea under production (8,500 ha in large estates and 7,800 ha in smallholder cultivation), total employment in the tea sub-sector is estimated to be around 40,750 people. Uganda produces good quality tea that is primarily used in blends with premium quality teas, such as those from Kenya. Quality is comparable to teas from Tanzania. The price discount of Ugandan tea to Kenyan tea at the Mombasa auction, where 90 per cent of the Ugandan tea is sold, has declined slightly in recent years, from 24.8 per cent during 1994-97 to 22.5 per cent during 2001-05. Even at current discounts, Ugandan tea compares favorably with most of the neighbouring countries.

5.5.2 Global Market Trends The value of the global retail tea market is estimated at US $ 25 billion. Global import demand for tea has been relatively strong for the past several years because of its high demand by the petroleum producing countries of the East. Kenya, the world’s largest exporter, has steadily increased production and exports as has Sri Lanka, the second largest exporter. 90 per cent of Ugandan tea is exported through the Mombasa auction, 3 per cent sold directly to foreign buyers, and the remainder consumed locally. The price of tea has remained relatively stable between US$1.50-US$ 2.00 per kilogram at the Mombasa auction since 1990 except for the sharp increase in 1997 and 1998 when drought reduced production in the region. Prices in early 2006 started to rise again in response to drought in the region and are expected to remain strong in 2006 and 2007 before declining to historical trends.

5.5.3 Critical Sector Issues • Research and planting materials: The Government has largely been absent from the tea sector since the economic collapse of the 1980s and limited research has been done since 1978 when the Tea Research Institute of East Africa collapsed. Restarting tea research is a high priority for the competitiveness of the sector, and especially for the smallholders who have no alternative access to improved varieties. • Multiplication and distribution of improved planting materials: The efforts of GOU to disseminate high yielding clonal varieties obtained from Kenya and distributed under the SEP in 2001 met with partial success. A more sustainable approach to dissemination of improved planting materials is needed and the best approach appears to be to rely on the industry to fund and direct the programme as was done successfully in Tanzania. 18 James Finlay, Toro-Mityana, Rwenzori, Madhvani, and Mehta. 55 The Uganda National Expor t Strategy 2008-2012 • Transportation costs: Costs are quite high compared to other competing countries, which have direct access to the sea and/or are closer to the same markets. This is exacerbated further by the high cost of moving commodities from the rural agricultural areas to the urban processing and marketing areas for onward distribution to the international markets. • Dependence on the Mombasa auction: Uganda tea producers and exporters are largely dependent on the Mombasa auction for marketing the commodity. It is an uphill task when companies try to market their tea through other avenues. Efforts to diversity tea products (specialty tea) and to explore alternative markets are underway. The Uganda Tea Association has applied for financial assistance from an Arab bank to carry out research on marketing the country’s teas to other countries. • Product development and diversification: The health conscious consumer of beverages now has wider choices of tea from the traditional choices of English black tea to the nutraceutical herbal teas, green tea, and value added instant teas. Uganda needs more innovations in this sector to remain relevant. Opportunities to be exploited, strengths to be built upon, weaknesses that need to be overcome and threats to be confronted are outlined in the SWOT Analysis below. SWOT Analysis for Tea Strengths Weaknesses • Land availability • Unskilled labour • Abundant and trainable • Land tenure system that does not favour quick land labour acquisition from non-land-using landlords • Favourable weather for all • Land fragmentation year round production • Lack of investment capital • Fairly well organized sector • High transport costs due to distant markets and • Stable market though with landlocked position an inelastic price • Utility shortages and unavailability • Failure to diversify markets (Mombassa auction only) Opportunities Threats • Tax free preferential • Fluctuating foreign exchange rates markets (EBA, AGOA) etc. • Increases in exports by leading exporters (Kenya • Stable market demand and Sri-Lanka) and the emergence of Vietnam as • Emerging new markets new exporter may surge prices of the former communist countries To address the above sector issues, weaknesses and confront the envisaged threats, the NES proposes a comprehensive management framework of several objectives and action initiatives as detailed in the matrix on the pages that follow. The tea is highlighted as a priority sector by the DTIS. Therefore, all action recommendations relating to export development in the implementation plan of the DTIS have been incorporated in action initiatives of the NES. 56 The Uganda National Expor t Strategy 2008-2012 TABLE 10: STRATEGY INTEGRATED MANAGEMENT FRAMEWORK / MATRIX FOR THE TEA SECTOR Vision: “To make Uganda a reputable producer and exporter of high volume, high quality, diversified, blended and branded Teas” Objective Measure Target Initiative Lead Support Mile- Resources Institution institution stones Development Perspective Employment Increase small Design and implement UTA NAADS 3 years GOU Expand employment and and income holders from programmes that take MAAIF Donors income levels in the sector levels the present farmers to higher levels of MWLE Medium 11,000 to the Value chain including PMA Secretariat 15,000 within establishing cluster based NPA 3 years processing industries. Design and implement a programme to mobilize more farmers to engage in tea production. Competitiveness From 37,000 Design and implement a UTA GOU Perspective tones to tea growing expansion MAIIF NAADS 2 years Donors Border-In Gear Production 55,000 by programme LGs (Low) Capacity Development volumes 2011 MAAIF To increase tea yields and UNFFE Private volumes of production NPA sector. Yield per ha Increase tea Replace seed tea with UTA MAAIF 3 years GOU/ yield from clone tea NAADS donors 1,800 - PMA Secretariat Medium 3,000kg/ ha. 57 The Uganda National Expor t Strategy 2008-2012 Objective Measure Target Initiative Lead Support Mile- Resources Institution institution stones Capacity Diversification Number of To have Negotiate with MAAIF to UTA MAAIF 1 year To re-instate tea cloned tea the two tea have UTRI under the UTA. NAADS Private research (especially for plantlets research UNFFE Sector smallholders) and diversify distributed toinstitutes Low into value addition farmers (Rwebitaba and Musizizi under the control of UTA) by 2009 Number of One Establish tea demonstration MAAIF MAAIF 2 years demonstration demonstration farms for research and UTRI GOU/ farms farm in each development. UTA donors of the major PMA Secretariat Private producing NPA Sector areas Low (Kanungu, Buhweju and Kyenjojo) Other teas Herbal and Initiate research projects UIRI UTRI 5 years UIRI other than essential oils into herbal and other teas. UNCST UTRI black roasted teas by 2012 MTTI Low tea PMA Secretariat NPA 58 The Uganda National Expor t Strategy 2008-2012 Objective Measure Target Initiative Lead Support Mile- Resources Institution institution stones Human Capital Development Level of Establish UTRI affiliated tea UTA 3 years To increase technical and skills in the One UTRI training centres MAAIF GOU export management skills in tea sector affiliated UTRI Donor the sector. (farmers and centre in Low technicians) Kanungu, Buhweju, Kyenjojo and Musizizi 15,000 small Design a comprehensive UTA MAAIF 2 years GOU holder farmers training programme on NAADS Private and their fertilizer use and tea UNFFE Sector operative staff plucking in agronomic NPA Low trained in 5 practices for smallholder years farmers All estate Design a training UTA MAAIF 3 years GOU managers and programme for large farm NAADS Private supervisors managers and supervisors UNFFE Sector in technical management, Low logistics and marketing of tea 59 The Uganda National Expor t Strategy 2008-2012 Objective Measure Target Initiative Lead Support Mile- Resources Institution institution stones Number of All access Design a project to reopen Competitiveness motorable roads in tea old and develop new tea MOW 2 years GOU Perspective (Cont) access roads growing areas roads MOLG MOFPED Donors Border Gear in tea growing of Kanungu, PSFU High Infrastructure areas Buhweju, To provide necessary Kyenjojo and infrastructure for the tea Musizizi sector Number Develop programme for Ministry of GOU of areas alternative sources of Rural Energy 3 years Donors connected to electricity in tea areas to Electri- UERA High the electricity All the tea supplement national grid fication UMEME grid growing areas Agency MOFPED NPA Availability All trading Mobilize and provide MICT UCC of telecom centres in tea incentives to telecom sectors Telecom service 3 years GOU and internet growing areas to install satellite boosters providers Private facilities in tea in tea growing areas Sector growing areas Donors High Border-Out Gear Market outlets 3 market Carry out market research UEPB 1 year GOU Market Access outside the outlets outside and establish strategy UTA MTTI Private To develop alternative Mombasa Mombasa in for marketing Uganda’s Sector markets other than the Auction 3 continents tea outside the Mombasa Low Mombasa Auction (Especially auction markets in Eastern Europe and Africa, Middle and the far East countries) 60 The Uganda National Expor t Strategy 2008-2012 Objective Measure Target Initiative Lead Support Mile- Resources Institution institution stones In-market Business Support Number of At least one Design program for UEPB MTTI 1 year GOU To support tea exporters trade fairs promotion/ effective participation in UTA Private to effectively promote attended by trade fair per bilateral trade fairs. MOFA Sector Ugandan tea in existing exporters year in major Low international markets non-traditional Intensify the usage of and emerging markets of markets commercial attaches in the former communist countries, (Russia, region for insider reports to the Middle East and the Poland, avoid market development African Continents Northern programs. Africa, Lebanon – Middle East) Number of To penetrate Design programme UTA MTTI 2 years GOU alternative at least 3 of to establish agency UEPB Private markets. the target relationships in the target MOFA Sector. markets in 3 markets UNFFE Low years Image and Branding Volumes of 10 companies Design a brand for UTA PSFU 3 years GOU To sell Ugandan tea as branded and exporting Ugandan teas and UEPB Private high quality branded and blended tea branded tea encourage use of the Gifted by Nature Sector blended tea by 2012 Gifted by Nature logo. insurance Low 3 companies Design programme to train UTA MTTI 3 years GOU blending by in blending skills UIRI Private 2012 Sector Low 61 The Uganda National Expor t Strategy 2008-2012 Objective Measure Target Initiative Lead Support Mile- Resources Institution institution stones Client Perspective Number of At least UTA MAAIF Private Competency members ½ of the Carry out a training needs UTRI Sector To build capacity of tea among the responsible assessment UEPB 2 years GOU factories (especially factories staff in all Prepare training materials EUg Low smallholder factories) in trained in smallholder and a module in major export and marketing skills export and factories training curriculum of marketing trained in five UEPB/Enterprise Uganda skills years Information Number of All Establish information UTA Tea factories To build an information tea factories smallholder sharing system Private network system among all accessing tea factories 3 years Sector tea factories to access and and using the Low share non-business secret network information in the sector. Financial Volume of All Design proposals and UTA MFPED GOU Effective availability development smallholder source financial support BOU 2 years Donors and accessibility of capital tea factories from UDB and other NPA High development capital for accessed by development banks and smallholder tea factories smallholder micro finance institutions etc. tea factories Quality Number of All processors Design and implement a UTA PSFU To facilitate all tea certified and packers sector specific certification Processing GOU processing companies to companies by 2009 programme for ISO 9000 companies 3 years Private acquire internationally UNBS Sector recognised quality Quality marks Low certification. on Ugandan tea 62 Objective Measure Target Initiative Lead Support Mile- Resources Institution institution stones Institutional Perspective Number of in- MAAIF Strategy support stitutions par- Have Formation, strengthening NAADS RDS GOU Network(SSN) ticipating in grass roots and training in farmer UTA 2 years Private To strengthen sector the decision institutions institutional development PMA Secretariat Sector grassroots institutions and making in all tea umbrella association to processes of growing areas effectively participate and the industry influence decision making Effectiveness To have all tea Review Policy in the tea UTA MAAIF 1 year GOU processes in the industry of development sector MTTI Private government issues under UEPB Sector policy in UTA as it is UTRI developing with coffee the tea sector under UCDA Service Delivery Network Extension 1:500 Reinstitute tea specific NAADS MAAIF 1 year GOU To improve service delivery agent: extension service system NAADS Donor in the sector from growing Farmer ratio UTA Low through marketing PMA Secretariat The Uganda National Expor t Strategy 2008-2012 63 The Uganda National Expor t Strategy 2008-2012

5.6 THE FLORICULTURE SECTOR

5.6.1 Overview F loriculture has emerged as one of the major non-traditional export sectors for Uganda, contributing around US$35 million in export earnings in 2005. This makes it the third largest non-traditional export after gold and fish. Currently, there are 18 export firms engaged in the flower sector. The average size of the farms is about 8 hectares each. The first rose farms were established in Uganda in 1992. However commercial production started in 2001. Farms are situated along Lake Victoria basin in Mukono, Wakiso and Mpigi districts. New attempts are being made to move to high altitude areas which have seen new places like Ntungamo in Western Uganda planted with T-hybrid roses. The industry is continually increasing in hectarage which now stands at about 200 Ha with more than 40 rose varieties as well as Chrysanthemums. There has been an average annual growth of 20% in flower production in Uganda over the last 8 years. The industry is well organised through the Uganda Flower Exporters Association (UFEA) which is a private sector trade association supported by all growers.

5.6.2 The Market trends The global market value of floriculture products is over US$6 billion (2005 est.) Uganda’s exports stood at US$35 million in 2005 compared to US$ 31.92 million in 2004. Floriculture exports are dominated by cut-flowers (virtually all are cut-roses), estimated to be around US$27 million in 2005, with the remainder being made up of mostly chrysanthemums which are estimated to be just under US$10 million. Between 2002 and 2004, there was an average annual increment of 26 % in value and only 8 % between 2004 and 2005. Flowers exports include Roses, which represent about 70 per cent, and Chrysanthemums, which represent 25%, the remaining 5% are other potted plants, which have been introduced recently. Most exports (70%) go to Europe through the Dutch auction market and independent Dutch traders and distributors. The major final destinations are Germany, UK, France and Italy.

5.6.3 Critical Sector Issues • The European flower market is becoming increasingly competitive. Considerable investments in intermediate and T-hybrid production in Kenya and Ethiopia have put prices under pressure. Whilst these investments do not compete directly with Uganda’s sweetheart production, the increased output will result in a decline in all rose prices, including sweethearts. • The demands of the European supermarkets for traceability needed to achieve standards such as EurepGAP adds considerably to the start-up costs for the cut flower export business. • Airport cold rooms and other infrastructure require substantial improvement in management and holding capacity expansion. • Human resources management capacity programmes of the sectors have been achieved mainly with assistance from abroad. The current support mainly by the USAID-APEP programme, ends this year. There is need for continuity by building more capacity within 64 the country. The Uganda National Expor t Strategy 2008-2012 • All too often, erratic voltages and electricity blackouts affect cold stores, processing equipment and irrigation systems, damaging expensive equipment and also forcing firms to resort to generators. This adds to running costs and capital expenditure. • The exporter’s biggest direct cost is that of freight. Current rates for Uganda are US$2.40/ kg compared to Kenya at US$ 1.77/kg and Ethiopia at US$ 1.55/kg. The Kenyan flower industry is much larger and can negotiate better deals because of its economies of scale. The high cost of aviation fuel in Uganda further dampens the situation. • There is also the issue of double phyto-sanitary inspection charges per consignment every week ranging from Euros 15-20. • The sector has had no new investors/major expansion for the last 8 years. • Value addition in Uganda’s floriculture is also an issue to address. Since the emergency of the sector the exports have mainly remained bunched flowers. Shelf ready flowers, colouring, drying, extraction of scents and oils etc need to be developed. Opportunities to be exploited, strengths to be built upon, weaknesses that need to be overcome and threats to be confronted are outlined in the SWOT Analysis below. 65 The Uganda National Expor t Strategy 2008-2012 SWOT analysis for the flower sector in Uganda. Strengths Weaknesses • Relative political and economic • Sub-tropical temperatures prevent profitable stability production of many products, significantly • Consistent quality throughout the year reducing market opportunities. • Floricultural industry now has • Inexperienced labor and shortage of skilled the critical mass to facilitate management and supervisors geographical diversification • Some incentives for exporters are not • Considerable support from the donor promptly recognized by some GOU community, particularly USAID and departments, for example VAT refunds the Dutch PSOM grants • Relatively small base of commercial farmers • Good cooperation between exporters • Erratic electricity supply • UFEA works actively to promote Uganda’s floricultural exports • Cheap labour Opportunities Threats • Expanding market opportunities as • Other countries offer more attractive production increasingly moves away incentives and provide a quicker, more from Europe to developing countries helpful support service to new investors (for • Opportunities for increasing output as example Ethiopia) production moves away from South • Better growing climate in competitor Africa and South America to countries countries (Ethiopia and Kenya) for T-hybrids on the Equator which are better yielding • Depressed production in Zimbabwe • Technical support and inputs available in gives opportunity for new suppliers of competitor countries such as Kenya sweetheart roses • Unstable exchange rates that affect export • Market preferences that allow tax outturns free imports in major markets. • Increasing requirement for traceability by the European supermarkets adds to future sector competitiveness challenges. To address the above sector issues and weaknesses and confront the envisaged threats, the NES proposes a comprehensive management framework of several objectives and action initiatives as detailed in the matrix on the pages that follow. Again, floriculture is one of the sectors highlighted as a priority by the DTIS. Therefore all action recommendations relating to export development in the implementation plan of the DTIS have been incorporated in action initiatives of the NES. 66 The Uganda National Expor t Strategy 2008-2012 TABLE 6: STRATEGY INTEGRATED MANAGEMENT FRAMEWORK /MATRIX FOR THE FLOWER SECTOR Vision: To become the leading commercial sector with substantial contribution to national export revenues Objective Measure Target Initiative Lead Support Mile- Resources Institution Institutions stones Development Jobs created 10,000 – 15,00 Demarcate and allocate UIA MLUD 5 years GOU Perspective Income levels jobs by 2012 more land for flower growing MAAIF Private Maximize the flower Export earnings MOLG Sector sector’s contribution of US$50 -75 Design and implement LGs High to employment and million per year a programme to spread UFEA PMA poverty reduction in 5 years floriculture to other parts of Secretariat the country NPA Number of 20 smallholder Carry out feasibility study MAAIF PSFU 2 years GOU smallholder commercial for the involvement of UFEA Private farmers flower growers smallholder flower farmers CICS Sector participating by 2012 like in Kenya secretariat Low in commercial floriculture Competitiveness Demarcate and allocate MAAIF 5 Yrs GOU Perspective Amount of land Increase serviced land to flower UIA PSFU Private Border-In Gear under flower acreage from investors UIA Sector Capacity Development production 200 to 400 ha MTTI High To increase volumes Start high altitude production UFPEA LGs of production of clusters PMA existing flower farms Secretariat NPA Capacity Diversification Productivity per 300 – 400 Establish trial programmes in UFEA MAAIF 2 years GOU To increase M2 stems /M2 one or more farms to identify PMA Private sector productivity and best agronomic practices and Secretariat High add value to flower new crop opportunities NPA exports Expand cold storage Capacity and Double the Put the management of cold CAA MOFPED 2 years GOU capacity at Entebbe ownership present rooms under FHL & UFEA UFEA Private 67 Airport capacity. Sector Private sector ownership. The Uganda National Expor t Strategy 2008-2012 Objective Measure Target Initiative Lead Support Mile- Resources Institution Institutions stones ownership. Design and seek Human Capital Number of All technical Design new training UFEA MAAIF 1 year Private Development personnel level manage- programme to build on PSFU Sector Continue to build trained ment in farms assistance that has been Low capacity especially mainly provided by the that of production Number USAID-APEP programme that level managers and of training ends in 2007. technical workers programmes/ projects in place Client Perspective Number of Double the Step up applied Tropical UFEA BAC GOU Competency Supervisors present number Floriculture courses to Mountains International To ensure maximum trained of trained train supervisors and of the Moon Trade knowledge and supervisors widen curriculum to include University Capacity skills in floriculture floriculture at higher altitudes UFEA development management Number of Complete Include a module on export UEPB MTTI organizations export training module by skills in the present curriculum 3 years Private events 2008 of floriculture training and Sector integrate it in the UEPB Number Two specialized export training curriculum of sector training events operatives for the sector every year Information: Number Mainly Build and include an UEPB UFEA, 2 years GOU To provide market of clients emerging SMEs information module in the MTTI Private information to the reporting/ Regional Information System Sector present firms and receiving for Export (RISE) Low SMEs that may enter information the trade 68 The Uganda National Expor t Strategy 2008-2012 Objective Measure Target Initiative Lead Support Mile- Resources Institution Institutions stones Financial Level of interest 6-7%p.a. Design a programme to help MOFPED & 2 years GOU To enable commercial rates the sector access low cost MTTI Donors firms access loans value addition funds in UDB BOU Private for expansion at and other development banks UFEA PSFU-BUDS Sector competitive interest that may be identified. PMA High rates. Secretariat Design a programme to enable the sector leverage their capital with grant support such as PSFU managed Business Development funds Quality Technical support program UFEA MAAIF 2 years GOU To build capacity Quality and Traceability for continuous improvement UEPB Donors for implementation standards compliance by in the management of MTTI Private of appropriate compliance all firms traceability, a GAP Exporters Sector standards set by the levels requirement PSFU Low industry and market. PMA Secretariat Institutional Level of reach Representation Design Capacity building Floriculture 2 years UFEA Perspective with respect in all present programme for the farmers Members Strategy Support to present and future association UFEA MAAIF GOU Network (SSN) and and future floriculture UEPB Donors Services Delivery floriculture areas UIA Network (SDN) areas MTTI To expand the Level of policy capacity of UFEA as a influence sector association 69 The Uganda National Expor t Strategy 2008-2012

5.7 THE SERVICES SECTOR

5.7.1 Overview T rade in services approximately accounts for two-thirds of the world’s economic activity. Service exports currently account for about US$1 trillion or 20% of world exports. The share of developing countries in world exports of services is relatively small and over 30% of the world’s workforce is employed by service firms, which also create most of the new jobs. The contribution of services to Gross Domestic Product (GDP) in least developed countries is over 45% in most of them. Growth of Trade in Services have been one of the major trends in international trade markets. Trade in services is important to Uganda’s economy because of the significant role the sector plays in facilitating numerous other areas of the economic activity, job creation and generating tax revenues. At the same time services have of recent become one of the biggest contributors to GDP (47.1% in 2006/07). The national export strategy will focus on mainly two sub sectors of tourism and higher education services. Tourism is well articulated in the IF DTIS report (2006) while the higher education is well treated in the Services Sector Strategy (2005). Below, key sector issues are highlighted and strategic interventions proposed.

5.7.2 Tourism

5.7.2.1 Sub sector overview In the year 2005, Uganda recorded 467, 728 visitors. Total arrivals by air increased by 31 per cent while arrivals by road decreased by 24 per cent. Total tourist arrivals decreased by 10.3 per cent between 2004 and 2005. The DTIS report puts estimates of employment in tourism at approximately 21,000 in direct tourism employment, and up to 240,000 in informal employment ( such as street vendors catering to tourists). In addition to these direct effects, tourism also contributes to the economy through the linkages it has with other sectors. The estimate of total employment that includes informal employment provided above would rise to 420,000 if all the backward linkages are taken into consideration.

5.7.2.2 Sub-Sector Critical issues • The case for tourism as a driver of growth and poverty reduction has yet to be redefined and refocused in the national economic agenda. There are frail efforts between the different arms of government at the national and the district levels for planning and implementing tourism development programs. Their impact is however yet to be substantially visible. • There is need for focused and innovative product (and market) development. • There is a need to expand the options for accommodation in terms of affordability and availability especially mid-range income tourists (both foreign and domestic). • The sector suffers from very low levels of domestic tourism. Development of the domestic resident tourist market could play an important role in the development of Uganda’s tourism 70 The Uganda National Expor t Strategy 2008-2012 industry in general. This is a missed opportunity given the growing middle class with the spending power to spur growth in this area. • Lack of a focused product and market development programme for Niche tourism - Uganda has several tourist products that allow it to differentiate itself from its neighbouring competitors (Kenya and Tanzania). These are also products that are attracting independent travellers. Product and market development must focus on these products both as unique Ugandan products as well as those complementary to the East African regional offer. • The issue of sustained marketing resources (as opposed to those that come with specific donor packages and last a couple of years) must be addressed in Uganda. Marketing and promotion are often overlooked when countries establish a tourism sector, yet without it, demand may never be generated for the product in sufficient quantity for it to be viable. • Weak skills and service delivery among suppliers in the tourism sector need to be strategically addressed. Firms in the tourism sector offering support services along the value chain (hotels, in-bound tour operators and transport providers) in Uganda are all small, relatively underexposed and inexperienced with international tourism. With a few exceptions, operators in Uganda are not actively working with international agents or independently marketing their products and services in key target markets. Many of the tour operators and accommodation owners have a less proactive and aggressive approach with regard to marketing. • Insecurity is another key issue that should be addressed. Apparent or real, it is often the major setback and scare to tourists. It is also a cause for negative travel advisories issued by developed countries to their wealthy holiday seeking citizens. Opportunities to be exploited, strengths to be built upon, weaknesses that need to be overcome and threats to be confronted are outlined in the SWOT Analysis below. 71 The Uganda National Expor t Strategy 2008-2012 SWOT Analysis for the Tourism Sector Strengths Weaknesses • Uganda has unique biodiversity • Poor tourism training curricula at the (primates, birds, rivers and lakes, diverse different levels. culture. Pleasant climate (average • Low involvement of the government temperature 18 degrees centigrade). compared to competitor countries. • Beautiful scenery compared to EAC • Poor organisation of the tourism private • Unique products; White water rafting, sector gorillas. • Overpricing (compared to competing • A hospitable population countries) • Vibrant culture • Poor services and facility maintenance (vehicles, roads, toilets, buildings.). • Poor traffic control and poor roads. • No documentation on ethical conduct in the sector. • Opportunities Threats • A lot of the potential products have not • Insecurity in some tourist parts of the yet been developed (e.g. agro-tourism, country eco-tourism, community experiences • Gorilla migrations (village walks, homestead, cooking • Road safety tours, heritage, culture, handcrafts • Seasonality of tourism demonstrations and classes,) • Lack of Transparency by stakeholders in • Domestic and foreign residents’ tourism the tourism sector towards the clients. market not yet tapped. • Pollution (Air and other wastes). • Rapidly spreading telecommunication networks • Growing IT (internet). • Tourism product is demand driven (can be customized). • Community based tourism as supplement to wildlife To address the above sector issues and weaknesses and confront the envisaged threats, the NES proposes a comprehensive management framework of several objectives and action initiatives as detailed in the matrix on the pages that follow. Again tourism is one of the sectors highlighted as a priority by the DTIS. Therefore, all action recommendations relating to export development in the implementation plan of the DTIS have been incorporated in action initiatives of the NES. 72 The Uganda National Expor t Strategy 2008-2012 TABLE 7: STRATEGY INTEGRATED MANAGEMENT FRAMEWORK /MATRIX FOR THE TOURISM SECTOR Vision: “To become the largest source of foreign exchange and serve as a vehicle for poverty reduction to the extent possible through sustainable tourism” Objective Measure Target Initiative Lead Support Mile- Resources institution Institution stones Development Jobs created Double the current Design and implement UTB UWA, MTTI GOU Perspective levels (450,000 more community Tourism 3 years Private Maximize the tourism both formal and programmes to create UWA, UTB, Sector sector’s contribution informal) in 3 years jobs in rural areas MTTI, LGs, Donors to employment and Design programmes to MTTI AUTO Medium poverty reduction train many Ugandans in the hospitality industry to be employed Legend UTB Uganda Tourist Board UWA Uganda Wildlife Authority AUTO Association of Uganda Tour Operators NEMA National Environment Management Authority UGSTDP Uganda Sustainable Tourism Development Programme UTA Uganda Tourism Association TUGATA The Uganda Association of Tour Agents UHOA Uganda Hotel Owners Association VFR Visiting Friends and Relatives 73 The Uganda National Expor t Strategy 2008-2012 Objective Measure Target Initiative Lead Support Mile- Resources institution Institution stones Competitiveness Encourage and GOU Perspective Range of tourist Adequate provide incentives to UHOA 3 years Private Border-In Gear: support facilities middle income the private sector to UTB MTTI Sector Capacity Development: in tourist areas accommodation increase the middle AUTO High To increase facilities and facilities along class accommodation UWA and amenities in the tourist routes capacity. tourism industry. Design and implement projects to increase the number of quality stop- over places for food and drinks and with modern welfare and recreation amenities. Capacity Diversification: Range of Canopy walkways, Establish and offer MTTI MFPED 2 years GOU To increase the range tourist activities camping circuit, Investment incentives, UIA Private of tourism products publicized and houseboats with preferential rates UTB Sector especially in the niche promoted on Lakes, for investments in rural AUTO Low tourism segment mountaineering, areas and projects UHOA conferences and focused on developing PSFU meetings new products UWA Human Capital Number of Skills in sales, Revitalize the curriculum UTB MOES 2 years Development: professionals in customer care, of the tourism training Tertiary GOU To upgrade human the tourism sector hotel management, institutes. institutions Private resource capacity tour guiding, NCDC Sector in the tourism marketing, and AUTO Low sector (especially food safety and UWA management and hygiene staff in the hospitality segment) 74 The Uganda National Expor t Strategy 2008-2012 Objective Measure Target Initiative Lead Support Mile- Resources institution Institution stones Competitiveness Operational Rail journey from Design a rail and MOW Private sector, 5 years GOU Perspective (Cont) Railway Nairobi to Jinja water transport system DP Donor Border Gear: and ferry and Kampala development project UIA, Infrastructure infrastructure and source funding for UWA, Private To improve Tourist ferry its implementation CAA, , Sector infrastructure; road, between Tanzania, Local High train, airlines, electricity, Kenya and Uganda Governments, telecommunication, and RAFU water in designated NPA areas Quality of roads Uganda-Ishasha Design and implement MOW Private sector, 5 years GOU Road, Masindi- a project to upgrade DP Donor Paraa, Kabale- key roads leading to UWA, Kanungu-Buhoma tourist sites IGs, Private Road, Jinja- RAFU Sector Budondo Road NPA High Number and Regional air Establish an incentive CAA Private sector, GOU frequency of charter services to scheme to encourage UWA, Donor flights to National National Parks more charter services CAA, , parks targeted at tourists. Local Private Governments Sector Number UIA Low of airfield NPA infrastructure in National Parks Procedures and UTB documentation Number of steps Single license and Sector Stakeholder MTTI AUTO 1 year GOU To streamline and and licenses by one institution. policy review meetings KCC Private shorten procedures for required involving mainly MTTI, Sector licensing tour operators UTB, KCC and Tour Low Operators 75 The Uganda National Expor t Strategy 2008-2012 Objective Measure Target Initiative Lead Support Mile- Resources institution Institution stones Transaction support Number of Over 50% of Design and implement AUTO BOU 3 years GOU To ease the booking tourists coming the total tourists programme to deepen UTB Private and tourist travel in through e- coming into the e- booking , ticketing MTTI Sector arrangements into ticketing country and payments MFPED Medium Uganda and payment for the services Payment methods Over 50% of payments by tourists done by credit cards and other e - forms Boarder-Out Gear Tourist numbers Adventure tourism UTB MTTI 3 years GOU In-Market Business and trends (for backpacker/ Undertake market AUTO (Specifi- Support over-lander intelligence reports UEPB cally tourism To ensure attraction of markets, EU for specific market Private sector levy) more tourists through market, USA segments (See highlights MOFA Donors market development market, South in the targets) UWEC Private Sec- programmes. African market, tor Asian markets Low (China and Japan especially) regional tourism 76 The Uganda National Expor t Strategy 2008-2012 Objective Measure Target Initiative Lead Support Mile- Resources institution Institution stones Image and Branding: Country brand Gifted by Nature Promote the Gifted MTTI 2 years GOU To reposition Uganda applied by all By Nature brand UTB UEPB Private as a tourism and sector stakeholder in key international UWA Sector conference hub. fraternity and programmes, national UCOTA Medium improved to reflect events and in national Private sector conference hub institutions both within MOFA capacity. and abroad. Gifted by Nature Inc. Artists Associations Client Perspective Functional Information point in Implement information AUTO 3 years GOU websites each district sharing system between UTB MTTI Private Information: all local tourism UWA Sector To enhance tourism Tourist operators, foreign Low information generation information points visa-issuing missions, and dissemination to in the country regional and district the target markets and municipalities and other users private sector Updated data on Conduct annual exit UBOS AUTO 2 years GOU tourist flows surveys MTTI Private UWA Sector Low Financial: Number of Investment capital Design and implement UTB MTTI 3 years GOU To provide long term tourism investors of 6-7% interest a sector specific Development IFIs finance at competitive accessing low pa programme to promote Banks High lending rates cost investment access to international PSFU finance credit facilities BOU MOFPED 77 The Uganda National Expor t Strategy 2008-2012 Objective Measure Target Initiative Lead Support Mile- Resources institution Institution stones Quality: Level of All main hotels Design and implement MTTI MOJ 2 years GOU To ensure high classification of and restaurants a national programme AUTO Donor standards of service in hotels and other classified by 2010 to classify all hotels UTB Private the tourism industry. services and restaurants Sector Low Enact the tourism bill to reflect and enforce new international standards Institutional National, local (i) completing six Develop project to UTB UWA, UTB, 2 years GOU Perspective and regional district tourism complete the plans NFA, NEMA, Private Strategy Support plans plans and source funds UWEC, AUTO, Sector Network (SSN) (ii) completing Jinja to implement them UTA, UCOTA, High To improve strategic Tourism plan including building local NPA planning for the sector capacity of Districts to effectively market their tourism potentials Service Delivery Capacity of key A Strengthened Capacity assessment MTTI AUTO 2 years GOU Network (SDN) sector promoters UTB and a strong and development UWA, UTB, , Private To ensure a competitive and unified Sector programme for both UWEC, AUTO, sector service delivery Association UTB and the Sector UTA, UCOTA, Low mechanism in the region Association. NEMA 78 The Uganda National Expor t Strategy 2008-2012

5.7.3 Education Services

5.7.3.1 Overview of the Sub Sector Uganda Services Export Strategy (2005)19 makes an extensive analysis of the sector. The NES shall therefore consider the sector Strategy as one of its key components. Suffice here to summarize a few issues about the sector as follows. Uganda’s education sector is one of the most robust, with good export potential. This involves institutions at all levels but most especially secondary and tertiary institutions. The sector has undergone tremendous transformation and growth since sector liberalization programmes of the late 1990s. This encouraged private sector participation in education services. The sector has proactively attracted sizeable proportions of international students contributing to national export earnings (USD 30 Million in 2005) through cross border mode of supply. The primary and secondary education enrolment by foreigners tends to be largely driven by alumina and foreign parents who come and stay for some time by virtue of their job placements. The accompanying children are compelled to enlist in good quality schools whose curricula and facilities are acceptable to the parents while the alumina become advocates for Uganda’s education. This is mostly in urban areas. In tertiary institutions, the enrolment tends to be driven by students’ quest for good, affordable and competitive schools in the region. By the end of December 2005, (Ministry of Education and Sports, Planning Department), private investment was highest in secondary education. Out of 980 secondary schools, 400 were public and 580 (60%) were private.

5.7.3.2 Market Trends Recent studies estimate the global market for higher education services at US$ 30 billion. World leaders in export of education services include the US, UK and Australia. Uganda’s education sector attracts students mostly from our neighbouring countries. In 2005, for example, Uganda attracted 20,716 students from Kenya, 5,211 from Tanzania, 2,457 from Sudan, 1,228 from Rwanda and 2,435 from DRC. EAC and COMESA regions thus become the major export markets. There is however strong competition from UK, Australia, South Africa and Malaysia that have made aggressive marketing of their education.

5.7.3.3 Critical Sector Issues • Lack of awareness of the business opportunity in export of education services. • Lack of a well-defined regulatory framework for educational service export. • Inadequate international marketing programmes. • Lack of marketing skills by sector players. • Inadequate learning facilities and scholastic material. • Minimal integration of ICT and absence of E-learning capacity and facilities. • Low adaptation of the national curriculum, to international standards. • Competition from other countries like the British, Australian, and Malaysian institutions among others. Opportunities to be exploited, strengths to be built upon, weaknesses that need to be overcome and threats to be confronted are outlined in the SWOT Analysis below. 19 The Service Export Strategy can be found at www.Ugandaexportsonline.Com/reports 79 The Uganda National Expor t Strategy 2008-2012 SWOT Analysis for the Education sector Strengths Weaknesses • The historical foundation of Uganda’s • Poor and old infrastructure educational system based on the • Poor remuneration of tutors British system acceptable regionally • A bigger population of the country is not and internationally. able to access higher education • Massive investment by private • Curriculum not able to sufficiently address investors in education in a short market demands period • Poor marketing and advertising • The Government Policy. i.e. Education • Poor distribution of Tertiary institutions in the For All, at primary and secondary country levels • Dominance of arts rather than science and • The use of English language as a practical related courses medium of instruction at all levels • Migration of teaching staff and • Comparative cheap education administration regionally and internationally. Opportunities Threats • Regional market readily available • Internal and regional wars • A large number of population within • Competition from developed countries, e.g. the country and regionally seeking Australia, UK, India, S. Africa, Malaysia, etc. for quality higher education. • Declining overall standards and falling • Political instability in neighbouring international ratings. countries forcing students to seek • Compromised quality at the expense of high education in Uganda demand • Liberalisation of education system • Economic integration that eases cross border movement of students To address the above sector issues and weaknesses and confront the envisaged threats, the NES proposes a comprehensive management framework of several objectives and action initiatives as detailed in the matrix on the pages that follow. 80 The Uganda National Expor t Strategy 2008-2012 TABLE 8: STRATEGY INTEGRATED MANAGEMENT FRAMEWORK /ACTION MATRIX FOR THE EDUCATION SECTOR Vision: “To be a centre for quality and affordable education in the region and beyond” Objective Measure Target Initiative Lead Support Mile- Resourc- Institution Institution stones es Development No. of Ugandan 50% of students In partnership with private MOES Universities 3 years GOU Perspective students trained on business sector entrepreneurs, design Tertiary Donors To increase study in export related courses. and integrate relevant Institutions Private options for export entrepreneurship. subjects in the curricula Private Sector entrepreneurship in of higher institutions of Sector High Uganda’s education learning. PSFU system. UIA UEPB UCCI NPA Competitiveness Adequate Revised Higher Carry out a curriculum National Universities 3 years GOU Perspective curriculum Education review process beginning Council MOES Donors Border-In Gear Employability of curriculum in 3 with a survey of investors for Higher ESA Private Capacity Development graduates years and employers’ skill and Education NCDC Sector To develop courses that research needs. (NCHE) PSFU High quickly respond to the Private sector UIA Investors changing needs of the response Roundtable market NPA 81 The Uganda National Expor t Strategy 2008-2012 Objective Measure Target Initiative Lead Support Mile- Resourc- Institution Institution stones es Capacity Diversification Number of A least the 5 Programme to facilitate NCHE Universities 5 years GOU Aim at offering universities investing major Universities extensive IT upgrades and MOES Donors education online in online education every year training of Online tutors Private Private Sector Sector IT Firms High MOICT UCC Human Capital Number of PhDs Increase the Offer and source for NCHE MOES 5 years GOU Development: and Masters in the number of PhDs scholarships MOFPED Donors Manpower academic staff and Masters by Implement exchange Universities Private development to support 30% in 5 years programmes with reputable and others Sector diversification and universities Tertiary Medium increased intake institutions Capacity of the IT supported Design programme to NCHE MOES 5 years GOU Competitiveness lecture theatres in Teleconference build theatres equipped MFPED Donors Perspective (Cont) major Universities lecture theatres with more screen learning Private Private Border Gear and colleges in all major facilities than more brick Sector Sector Infrastructure universities and mortar structures that Association. High To provide efficient are expensive Universities and cost effective and other infrastructure including Design programs that Tertiary lecture halls and encourage offcampus study institutions computers programmes Computer: student 1 computer to 10 Design and implement NCHE MOES 3 years GOU ratio students research partnership MFPED Donors programmes between Private Private universities and Sector Sector international computer firms Universities like Microsoft to access IT services of such firms 82 The Uganda National Expor t Strategy 2008-2012 Objective Measure Target Initiative Lead Support Mile- Resourc- Institution Institution stones es Procedures and Number of Students All foreign Design online entry forms NCHE MOES 2 years GOU Documentation admitted online Students and at and integrate them in a Universities Private To ease processing least more than joint education marketing Sector of university entry 50% of the local website. Low documents especially students for foreign students Transaction Support Number of external External students Establish external students NCHE MOES 2 years GOU To develop the departments department in departments to specialize Universities Donors academic staff’s established every institution. in export of educational Private understanding of the services Sector export of educational Low services and its marketing requirements Number of At least 2 every Develop and integrate a UEPB MOES 2 years GOU workshops year module on services in the NCHE Interna- on managing export training programmes Universities tional education as an and other Trade intangible export Tertiary Training institutions Institutions Border-Out Gear Number of One exhibition Design an integrated project UEPB MTTI 2 years GOU facilitated every 2 years for promoting education MOES Donors In-market Business university in every target service exports in the Universities Private Support exhibitions in target country regional markets. NCHE Sector To provide the countries Sector education sector with a Number of Associations full service in countries enquiries resulting USEA interested in studying in from the shows Uganda 83 The Uganda National Expor t Strategy 2008-2012 Objective Measure Target Initiative Lead Support Mile- Resourc- Institution Institution stones es Image and Branding Number of All colleges and Jointly create a marketing Private Gifted by 4 years GOU To brand and position universities universities brand targeting the region Sector Nature Donors Uganda as the top participating in and carry out regional Association MOES Private of the market in the the brand linkage campaigns to popularize it. Universities Sector education sector in the programme NCHE Great Lakes Region USEA Client Perspective: Number of An integrated MOES 3 years GOU Information: clients accessing information Jointly develop an Sector UEPB Private Provide information information online system to which interactive marketing portal Association Universities Sector online to prospective all Higher Afro Educare Low students and their institutions sponsors. of learning subscribe Financial: Number of Develop a compendium of UNCST MOES 5 years GOU Provide research grants research grant research proposals and MFPED Donors to facilitate innovative options market them for grant NPA Private research financing Sector High Quality: Quality awards A 1:40 teacher Revise and enforce national ESA MOES 5 years GOU To achieve high quality - student ratio standards MFPED Donors and ensure compliance Teacher to student NCHE Private with accepted ratio 20 publications Train more lecturers and UNCHE Sector international education annually, per implement exchange UNCST High standards Publications in University programmes with other international Universities journals Programme to encourage more research by Academic Staff 84 The Uganda National Expor t Strategy 2008-2012 Objective Measure Target Initiative Lead Support Mile- Resourc- Institution Institution stones es Institutional Education At least 2 Develop and standardize Private MOES 1 year GOU Perspective: management conferences an annual Education Sector NCDC Donors Strategy Support training events every year management conference Higher Umbrella Private Network (SSN Services with innovative themes Education Business Sector Delivery Network in the areas of research, Association Associations High (SDN): business development and (UMA, PSFU To build the capacity international marketing. etc) of Higher Education Government management Institutions associations and USEA institutions to be able to innovatively plan for the sector. 85 The Uganda National Expor t Strategy 2008-2012

5.8 THE FRUITS & VEGETABLE SECTOR

5.8.1 Overview Uganda’s main export fruits include bananas, Victoria pineapples, mangoes, citrus, purple and yellow passion fruits. Vegetables include okra, chillies, beans etc. Uganda’s Fruit and Vegetable sector is important because the downstream end of its supply chain supports close to 1 million small rural farmers for whom the sector provides an alternative source of income to the traditional cash crops. About 60 small and medium companies are active exporters in the sector. They source their products from small scale rural farmers in typical out-grower schemes. Export values are still modest. In 2006 for example, the combined value of sector exports dried fruits, vegetables and fruit juices was just about US $ 5.0 million. The Uganda local market is reasonably well supplied with fruits and vegetables. A recent study of the fresh fruit and vegetable market noted that “smallholder farmers control almost all the market, even in the recently opened foreign-owned supermarkets.” Only very small quantities of fresh fruit are imported especially those which Uganda’s climate does not favour. The sector engages in very little value addition. Most fruits are exported fresh and unprocessed. There is great potential for processing in the following areas: • Dried fruits which are high value, low volume. • Fruit juices and concentrates • Fruit pulp processing • Flour processing for the bakery industry • Fruit caning • Vegetable purees and chutneys Fruit drying is already widely practiced by exporters, mainly with locally made wooden solar driers. There is however need to scale up to higher technologies. A few companies are involved in fruit juice processing. These include Britania Allied Industries, Reko Industries, Jacana and Elgonia Ltd. The local fruit juice industry largely imports fruit pulp from Kenya and India to feed into their local processing industry. There is on-going research in banana flour processing both for export and for the local bakery industry. Initiatives in this area have involved Makerere University and the Poverty Alleviation Unit of the Office of the President. Processing plants are envisaged in the main banana growing areas of western Uganda. 86 The Uganda National Expor t Strategy 2008-2012

5.8.2 Market Size and Trends In 2005, global demand for fresh fruits (dates, figs, pineapples, mangoes, avocadoes, guavas etc) was estimated at US$ 4.3 billion. In 2005, global demand for bananas was estimated at US$ 8.7 billion, pineapples at US$ 1.4 billion, and mangoes at US$ 945 million. Global demand for unfermented fruit and vegetable juices was an estimated US$ 9.2 billion growing at 11% p.a. in value and 5% by volume over the period 2001-2005(Trade map 2006). Uganda’s exports of fresh fruit and juices are mainly into the neighbouring countries of Rwanda, DRC, Sudan and Kenya. There is also considerable demand in the local market.

5.8.3 Critical sector Issues • With respect to fresh fruits and vegetable exports to Europe, many face the freight rate problem which stands at about US$2.5 per kilo compared to competitors in Asia that ship to Europe for as low as 9 cents a kilo. • Apart from freight costs, all operators face a high cost structure stemming from poorly developed infrastructure, namely, roads, marketing and storage facilities to lack of cold chain facilities. • Many farmers have attempted to go organic in order to avoid TBTs occasioned by food safety concerns in the western world markets. However, the high cost of formal certification of farms ( Over US$ 15,000 for organic) still poses enormous stress on practitioners. • Laws and legislation in the EU markets (Euregap, MRL, Traceability, Animal Feeds, environmentally acceptable packaging etc) have left the sector totally stressed and unable to register considerable growth in export markets. • With respect to processing, lack of technology is the main setback. This partly explains why fresh fruits are exported to Kenya and then concentrates imported from the same country to support the industry in Uganda. • Fruits processors have also pointed out the seasonality of fruits as another major problem. The small scale producers’ dominance in the sector raises fears that production may not be able to maintain uninterrupted supplies of fruits to the existing factories. • Lack of strong entrepreneurs willing to invest in value addition in the sector is also an issue to address. Opportunities to be exploited, strengths to be built upon, weaknesses that need to be overcome and threats to be confronted are outlined in the SWOT Analysis below. 87 The Uganda National Expor t Strategy 2008-2012 SWOT Analysis for the Fruits & Vegetables Sector Strengths Weaknesses • Organized sector • Overall lack of business skills on the side of small scale associations farmers. • Existence of airport • Dominance of subsistence farmers compared to competitors cold store like India with more agricultural commercialization • Cheap labour • Poor codes of practice and their enforcement • Cheap and plentiful • Opportunistic trade between Small Holder Farmers (SHFs), land traders and exporters • High quality fruits • Poor post-harvest handling practices (sorting, packing and and vegetables loading) • Lack of value addition, save for a few companies which however largely depend on imported pulp and concentrates • Absence of adequate research to support value addition in the sector. Opportunities Threats • Expanding and • Potential use of DDT will affect organic exports and growing market acceptability of conventional products into the EU market opportunities • Continued power irregularities as production • Increasing requirement for traceability by the European increasingly moves supermarkets makes it difficult for small-farmers to away from Europe to participate in horticulture exports developing countries • Competition especially from emerging economies of Asia • A growing for the EU market. international organic market for fruits and vegetables • A distinct tropical climate with excellent soils and climate To address the above sector issues and weaknesses and confront the envisaged threats, the NES proposes a comprehensive management framework of several objectives and action initiatives as detailed in the matrix on the pages that follow. 88 The Uganda National Expor t Strategy 2008-2012 TABLE 9: STRATEGY INTEGRATED MANAGEMENT FRAMEWORK /MATRIX FOR THE FRUITS AND VEGETABLES SECTOR Vision: “Improved livelihoods of small scale farmers through integrating them in the sector export value chain.” Objective Measure Target Initiative Lead Support Milestones Resources Institution Institution Development Create market linkages NAADS 5 years Perspective 50% between farmers and UEPB LGs GOU Improve the Income improvement exporters MAAIF Donors livelihood of fruit levels LGs Processors and vegetable Strengthen linkages between NPA Low farmers lead exporter and out- grower schemes and export production villages (clusters) Competitiveness From the present Design and conduct a MAAIF 5years GOU Perspective Volume and US$ 5m (2005) to program to form and widen NAADS UEPB Donors Border-In Gear value of 15m in 5 years production clusters. PSFU Processors Capacity exports LGs Low Development Design and implement strong PMA To increase volumes producer – processor linkage Secretariat and sustain supply programme of fruits and fruit products to the export market 89 The Uganda National Expor t Strategy 2008-2012 Objective Measure Target Initiative Lead Support Milestones Resources Institution Institution Capacity MTTI (De- GOU Diversification Range of Five product Design and implement partment Donors To widen the export products ranges product research UIRI of Industry) 3 years Processors basket to include, exported development programmes in MAAIF Low more packed juices, partnership with processors NAADS concentrates and Percentage From the present in the sector under clusters Processors more dried fruits, increase in US$ 5 million to UEPB chutneys etc volume and 14 million in 5 Design and implement a UNIDO value of years. programme to scale up UMA dried fruits technology for fruit drying Universities exports PMA Establish processing Secretariat incubation pilots in fruit NPA producing areas Competitiveness Number Kayunga Develop and source MAIIF MTTI GOU Perspective (Cont) of fruit Luweero funds for a cold storage (Depart- Donors Border Gear producing Mukono intervention project in ment of Private sector Infrastructure clusters Soroti partnership with FAO Industry) 3 years High To provide fresh linked to Mbarara NAADS fruit cold storage cold storage Bushenyi Processors and fresh handling facilities and UEPB infrastructure transport UNIDO particularly in fruit trucks Universities producing areas Sector As- sociations Transaction Support Efficient Refunds made in Implement a programme URA MTTI GOU Facilitate quicker System at less than 2 weeks. to automate all tax refund UEPB 2 years Donors VAT refunds and URA related procedures and C& F Duty Drawback processes. Agencies processes Banks UIA 90 The Uganda National Expor t Strategy 2008-2012 Objective Measure Target Initiative Lead Support Milestones Resources Institution Institution Border-Out Gear Number of Agencies in Design and conduct a UEPB MTTI GOU In-market Business export firms Sudan, DRC, contact promotional PSFU 2 years Private Sector. Support with agent Kenya, Tanzania programme in the regional UEPB To establish and outlets and Rwanda markets of COMESA UIA sustain agency in target UMA relationships in markets In partnership with MOFA target markets particularly exporters, establish and in the manage permanent trade regional points in the regional markets markets Client Perspective Frequency Four Major Develop and incorporate a GOU Competence of training training events sector training module in the UEPB UMA 2 years Private Sector To achieve programmes every year major training programmes EUg International BSOs continuous for the of the main Trade Support Export improvement in sector Institution of UEPB, Enterprise Trainers the field of Good Uganda and UMA Consortium Manufacturing and export practices Design and implement an for fruit related Export Coaching programme products for the sector using the pool of UEPB trained export trainers. Information Information One Regional Design a programme to UEPB Export GOU Efficient access of System built Information System integrate fruit exports sector Firms 2 years Private Sector market information for Exports in the regional Information and Fruit Ugandan fruit system for export operated Processors Exporters by the three East African UMA TPOs 91 The Uganda National Expor t Strategy 2008-2012 Objective Measure Target Initiative Lead Support Milestones Resources Institution Institution Financial Number All fruit processors Design Value addition HPOU PSFU GOU To enable the of firms targeting the Business Proposals and Export 2 years Private Sector sector tap into accessing export market jointly market them to large Firms Donors available sources value financing institutionss both and Fruit of Value addition addition local and Foreign Processors funds. funds UMA Various BDSs Quality: Number of All fruit processors ISO Training events UMA Export Private Sector To facilitate companies firms 3 years firms achieve certified UMACIS internationally with ISO UEPB recognized quality 9000 UNBS certification Institutional Effective Deliver all the Programme to provide HPOU PSFU GOU Perspective cluster major services government and NGO Export 2 years Private Sector Strategy Support and sup- through the cluster Services to the sector Firms Donors Network (SSN) port pro- Association through a commonly agreed and Fruit To ensure effective grammes upon cluster Processors and efficient to cluster UMA service delivery members UEPB to all sector stakeholders 92 The Uganda National Expor t Strategy 2008-2012

5.9 THE DAIRY SECTOR

5.9.1 Overview Uganda’s annual milk yield is 900 million litres. Half of this is retained at the farms and only about 450 million litres is commercially traded, 85% of it is consumed unprocessed. Uganda has a total of 87 active collection centres gathering approximately 156,000 litres of milk per day equivalent to only 15% of the milk available for collection. As a result most of the processing plants are operating at 20% installed capacity. There are 9 large scale dairy processing plants with an aggregate installed capacity of over 343,000 litres/day of milk. With respect to economic contribution, the livestock sub sector contributes 18% of the agricultural Gross Domestic Product. Of the GDP attributed to the sub-sector, the dairy industry is estimated to contribute up to 45%. Ugandan milk production is cyclical. Some seasons produce a glut of milk, while at other times supply is insufficient to meet domestic demand. Over 2.5 million households in Uganda engage in milk production with a national herd of 6.3 million heads of cattle comprising 5.85 million indigenous and 0.5 million either exotic or cross breeds.

5.9.2 Markets Trends The regional market (EAC and COMESA) for dairy products is an estimated US$ 90 million per year. Product diversification through value addition offers an opportunity in the regional market in the EAC and COMESA for dairy products (including powder milk, UHT milk, yoghurt, cheese, ghee and butter where Uganda has both comparative and competitive advantages of being the least cost producer.

5.9.3 Critical Sector Issues • Poor quality milk handling facilities in collection centers. • Seasonality of Production resulting into flash surpluses and drought shortages • Weak farmer level Organizations (including lack of well functioning cooperatives) • Lack of adequate cold storage and transportation chain • Lack of access to affordable financing, resulting in low new investment in processing for value addition • High Cost of achieving the HACCP quality Certification • Limited value addition success in cheese, yoghurt and butter. Opportunities to be exploited, strengths to be built upon, weaknesses that need to be overcome and threats to be confronted are outlined in the SWOT Analysis below. 93 The Uganda National Expor t Strategy 2008-2012 Dairy Sector SWOT ANALYSIS Strengths Weaknesses • High quality milk, rich in nutrients • Poor milk handling practices at producer group • Existence of good regulatory and and farm level legal framework, e.g. DDA , UNBS • Poor animal husbandry practices • Institutional network – Development • High cost of support factors of production Institutions, academic and research (water, power unreliability, transport-high cost • Existence of dairy processors of diesel, packaging materials) association ( UDPA) • Low per capita consumption leading to low capacity utilization, hence high cost of production and poor price competitiveness • Deficits in human capital - dairy experts, extension workers etc. Opportunities Threats • Export Market availability mainly • Epidemics in milk deficient neighbouring • Competitive beverages (black tea/coffee and countries juices from imported concentrates) • Technology – modern facilities for • Premature implementation of EAC Customs competitiveness Union lifting import duties for dairy products, • Expanding local market especially coming from Kenya • Poor enforcement of import duties on dairy imports To address the above sector issues and weaknesses and confront the envisaged threats, the NES proposes a comprehensive management framework of several objectives and action initiatives as detailed in the matrix on the pages that follow. 94 The Uganda National Expor t Strategy 2008-2012 TABLE 10: STRATEGY INTEGRATED MANAGEMENT FRAMEWORK / MATRIX FOR DAIRY SECTOR Sector Vision: “To be the leading suppliers of high quality dairy products in the COMESA region and beyond” Objective Measure Target Initiative Lead Institution Support Milestones Resources institution Development Average Countrywide Uganda Crane Farmer groups 3 years GOU Perspective income of programme to Creameries Co- Processors Donor Countrywide $460 per improve husbandry operative Union DDA Private Sector improvement Household month practices; (animal Ltd (UCCCU) MAAIF Low of the quality incomes disease control, PMA Secretariat of life of dairy improved breeding, NPA farmers animal feeding and pasture management) 95 The Uganda National Expor t Strategy 2008-2012 Objective Measure Target Initiative Lead Support Mile- Resources institution institution stones Competitiveness Capacity utilisation From the present Design and implement DDA GOU Perspective levels 40% to 75% a milk collection Private Sector Donor Border-In Gear improvement MAAIF Private Capacity Development programme MAAIF NAADS 3 years Sector Increase capacity Reduce losses from Design and implement PMA Low utilisation of existing 21% to 2% in 5 a national programme Secretariat processing plants and years for reduction of post reduce production costs harvest losses Productivity per From 2L for local Design and implement DDA MAAIF To increase national cow breeds and 7L for an improved breeding NAADS 3 years GOU milk production and improved breeds and feeding research DDA Donors productivity per cow to 10-12 L for programme UDPA Private improved breeds UCCCU Sector by 2012 NARO/NARS High Number of litres From 1.2 billion, to PMA per annum 2.4 billion litres Secretariat Number of value Powdered and UHT Design and implement DDA UIA 4 years GOU Capacity Diversification added products milk, butter, cheese program to attract DDA Donors Increase product and ghee investors in the UCCCU Private diversification and processing segment in Sector value addition milk production areas. Medium Human Capital Number of skilled Dairy sector In partnership with DDA MOES 3 years GOU Development: dairy management management processors , design Tertiary Donors To develop dairy personnel course in and provide industrial institutions Medium expertise and universities, training opportunities Processors specialization in line colleges and for college graduates NCDC with industry needs Agricultural training institutes 96 The Uganda National Expor t Strategy 2008-2012 Objective Measure Target Initiative Lead Support Mile- Resources institution institution stones To increase availability Extension: farmer Extension: farmer Extensive practical MAAIF MAAIF 3 years GOU and access of dairy ratio ratio of 1:500 training and Processors Donors farmers to extension deployment of NAADS Private workers community based DDA Sector extensionists PMA Medium Secretariat Competitiveness Number of feeder To have all access Design and implement Local MFPED 5 years GOU Perspective (Cont) roads in good roads in dairy a programme for Governments MAAIF Donors Border Gear working condition farming areas rehabilitation and DDA High Infrastructure: To in milk producing usable all year expansion of rural UDPA provide efficient areas round road network PMA and cost effective Secretariat infrastructure for service delivery and milk collection Number of well Cooling centre in Milk sector appropriate DDA MAAIF 5 years GOU developed and all trading centres technology support NAADS Donors equipped milk in milk producing scheme with a focus on DDA High collection centers regions rural areas UDPA UCCCU UNFFE PMA Secretariat Procedures and Level of document Harmonized Negotiations at EAC UNCCI GOU Documentation harmonization standards and level and between MTTI UEPB 1 year Low To ease quality quality related Standards Agencies in Processors/ related documentation documents the region exporters requirements in target especially at the URA markets EAC level 97 The Uganda National Expor t Strategy 2008-2012 Objective Measure Target Initiative Lead Support Mile- Resources institution institution stones Border-Out Gear Harmonized Negotiations at EAC MTTI DDA 1 year GOU Market Access Incidences of NTBs regional standards level and between UDPA Private Overcome sector and quality Standards Agencies UEPB Sector specific tariff Non management in the region UCCCU Low Tariff Barriers on procedures. UDPA processed milk exports UNBS In-market Business Number of trade At least one trade Carry out contact DDA UNFFE 2 years GOU Support fairs facilitated fair in every promotional UEPB Donors To achieve sector every year country every year programmes in EAC , UDPA Private business presence in Sudan and Congo UEPB Sector regional markets Number of trade One contact UCCCU Medium enquiries resulting promotional Identify and support UNBS from the fairs programme in the sector to the region a year participate in dairy after strategy specific trade fairs launch and exhibitions Client Perspective Compliance levels to 80% of the An integrated farmer DDA MAAIF 1 year GOU Competence the codes of practice farmers and SMEs training programme UNFFE Donors To develop business involved in primary in business skills, UEPB Private competences Frequency of processing of milk dairy standards UDPA Sector among the various training events management and UEPB stakeholders of the 2 major training hygiene practices, UNBS GOU dairy sector especially events every year export standards Low farmers and procedures etc. Information Number of All farmers in Design an DDA UDPA 1 year GOU To provide dairy farmers and the major milk integrated UEPB Private farmers and exporters accessing producing areas information system MAAIF Sector processors with information through radio, UCCCU Low relevant trade mobile phones and MTTI information print media UNFFE 98 The Uganda National Expor t Strategy 2008-2012 Objective Measure Target Initiative Lead Support Mile- Resources institution institution stones Quality Number of All Implement a MAAIF MAAIF 2 years GOU To ensure compliance processors meeting continuous training MTTI Donors with export quality export standards programme on UEPB Private standards throughout milk handling UNBS Sector the milk value chain hygiene and quality UNFFE Low management UCCCU Compliance levels All farmers and Strengthen DDA DDA 1 year processors regulations that UCCU prohibit milk UDPA adulteration practices Institutional National, local All Dairy producing Develop project to DDA MAAIF 2 years GOU Perspective and regional dairy districts to have the build integrated NAADS Private sec- Strategy Support development plans plans plans and source DDA tor Network (SSN)and funds to implement UDPA Service Delivery them including UCCCU Network (SDN) building local UNFFE To improve strategic capacity of Districts planning for the sector to effectively market their Dairy potentials 99 The Uganda National Expor t Strategy 2008-2012

5.10 THE CEREALS, PULSES AND OIL SEEDS SECTOR

5.10.1 Overview Uganda’s cereals, pulses and oil seeds sector which mainly comprises maize, beans, rice, chickpeas and sesame seeds, sunflower, soyabeans and different types of nuts, supports livelihoods of over 60% of the population especially in rural Uganda. Most of them are grown on small holder peasant farms spread across the country. A few institutions including prisons authorities do commercial farming. Official statistics put production figures of maize grain (the main cereal) at about 1,350,000 metric tones in 2004-2005 having slightly increased from 1,200,000 tones in 2001.

5.10.2 Markets and Trends The regional markets of EAC and COMESA are the main destination of Uganda’s cereals, pulses and oil seeds and their bi-products. In 2006, the combined sector export earnings were US $ 32.5 million. 85% of all these was from the regional markets and 25% from others which mainly include; the UK, Denmark, UAE and USA mainly for sesame seeds. With respect to cereals, earning were mainly from the sub-sectors of maize (including grain, flour and maize meal) amounting to US$19.7 million, rice with earnings of approximately US $ 4 million and finally re-exports wheat grain and flour worth US $ 2.8 million earnings. Overall market growth rates were 12.5%. With respect to oil seeds, total export earnings in 2006 were US$ 6.2 million and the average market growth rate between 2001 and 2006 was approximately 10.5%. Main subsector exports include sesame seeds with US $ 4.6 million, Soya Beans at US $ 0.6 million and sunflower at US $ 0.39 million.

5.10.3 Critical Sector Issues • Limited storage capacities, • Severe and unpredictable weather and over-dependence on rain fed agriculture • Poor quality and fluctuating commodity prices. • Lack of Confidence by commercial banks in the sector which increases the level of risk and therefore the cost of finance. • Lack of machinery and equipment at the Commercial farm and community level. • Limited value addition in the sector (e.g. animal feed, breakfast cereals, etc) • High post harvest losses of up to 40% Opportunities to be exploited, strengths to be built upon, weaknesses that need to be overcome and threats to be confronted are outlined in the SWOT Analysis below. 100 The Uganda National Expor t Strategy 2008-2012 The Sector’s SWOT Analysis Strengths Weaknesses • Existence of sector associations • Overdependence on rain-fed agriculture that are trying to regulate • The sector is dominated by poor subsistence quality farmers with limited formal knowledge and skills • Wide source of the commodities • Poor production methods causing low production (virtually from all parts of the volumes country) • Use of hand hoes for land opening, weeding and • Existence of a wide range harvesting which does not allow for commercial of varieties of sub sector scale production commodities • Grains/pulses not sorted at the harvest stage • Re-emergence of cooperatives (contain soil, husks, cobs) which facilitate better farmer • Improper drying of the seed resulting in poor organization (Over 200 quality and low prices Cooperative Societies now • Little focus on value addition by many enterprises registered by MTTI) in the sector • Existence of a stable support • Dominance of many small informal traders in the institution (Uganda Cooperative trade segment of the value chain (These care less alliance) with political goodwill about quality and high standards) from government Opportunities Threats • Export Market availability • Inferior quality ex-farm seed mainly in neighbouring countries • The value-added segment (breakfast cereals, • Expanding local market fortified foods, edible oils etc.) is being overtaken with the emergence of large by imported substitutes yet it would be the base supermarkets. for value addition • Favorable climate and soil • Pests and diseases against limited capacity by conditions that give Uganda an farmers to control them edge over its neighbours • The bulk nature of the product exported by land • Possibility of value addition at over large distances affects competitiveness a local level with small scale oil • The dominance of one buyer (World Food mills Programme) relief/Aid buyer of the cereals and pulses segment in the market leaves the sector at risk. • Steady growth of the agriculture sectors of neighbouring countries to which Uganda largely exports. To address the above sector issues and weaknesses and confront the envisaged threats, the NES proposes a comprehensive management framework of several objectives and action initiatives as detailed in the matrix on the pages that follow. 101 The Uganda National Expor t Strategy 2008-2012 TABLE 11: STRATEGY INTEGRATED MANAGEMENT FRAMEWORK / MATRIX FOR THE CEREALS, PULSES AND OIL SEEDS SECTOR Vision: To increase food security, rural employment and household incomes through trade. Objective Measure Target Initiative Lead Support Mile- Resources institution Institution stones Development Employment Double the Develop and conduct media NAADS UNFFE GOU Perspective levels present one community mobilization LGs 2 years Donors To make the sector a million estimated programmes to encourage MAAIF NGOs major employer of rural households more households to take on PMA Private communities. in gainful farming in the sector PSFU Sector employment in the UGTA Ltd. sector NGOs Competitiveness Production 10% increase in Design and implement LGs Donors Perspective Volumes volumes every research programmes for MAAIF GOU Border-In Gear year improved plant varieties NAADS Medium Capacity Development PMA 3 years To increase production Farmer mobilization Secretariat volumes programmes to plant more NPA acreage MAIIF Design and implement projects for improving post- harvest handling practices Capacity Diversification Processed Edible oils, Design and support PSFU GOU To widen sector product products range Breakfast cereals research and technology Uganda 3 years Donors range especially by Flour enhancement projects in the UIRI Oilseed Private encouraging processing. Fortified foods etc sector Producers sector and To increase application of Design and implement Processors technology in the sector. programmes for small scale Association oil mills, animal feeds etc at (UOSPA) community level GATSBY KARI 102 The Uganda National Expor t Strategy 2008-2012 Objective Measure Target Initiative Lead Support Mile- Resources institution Institution stones Human Capital Number of At least 3 training Design and conduct MTTI Donor Development post-harvest events in all integrated post-harvest Uganda 3 years Donors Achieve adequate handling main producing handling training NAADS Grain Ex- Medium post-harvest handling training events. regions every programmes that cover porters As- knowledge and skills year production, processing and sociation among the sector’s many Post harvest export related subjects (UGEA) small scale producers. handling UNFFE infrastructure Design a programme to PMA re-invest in and promote Secretariat community silos Competitiveness Number of As per local Develop and source MOLG Perspective (Cont) rural feeder government’s funding for local MFPED GoU Border Gear: roads in targets1 Governments to expand NPA 5 years Donor Infrastructure: good working and maintain rural road MOW UGEA To provide efficient condition network in major growing UGTA and cost effective areas PMA transport system for rural Secretariat producers Transaction Support Reduction Zero cross border Design and implement a URA MTTI 3 years GOU in number stop points programme that enables MAAIF Donor Ease movement of of trans- districts manage their MOLG produce within the boundary local tax collection procedures UGEA country administration with less inconveniences to UGTA stops traders LGs Border-Out Gear: Number of All countries in Design and implement UEPB Private In-market Business Support new markets COMESA programmes for effective UGEA MOFA 1 year Sector To diversify markets participation in regional PSFU GOU away from one main trade fairs and other UNCCI buyer (the WFP) promotional events 1 It will be necessary to conduct a countrywide survey first to establish what producing districts have identified as feeder roads that are important for which areas. 103 The Uganda National Expor t Strategy 2008-2012 Objective Measure Target Initiative Lead Support Mile- Resources institution Institution stones Client Perspective: Number of All producers and Domesticate RISE and UCE GOU Information producers and exporters in the link it with the Community UEPB NPA 2 years Low To establish an exporters using main producing Information System of NPA PSFU information system that the information areas UCA effectively links producers system UNFFE with the exporters and MTTI the market in general. UGEA UNCCI NPA Quality Reject factor Initiate the process of UNBS MTTI GOU To facilitate the reduced from the establishing by- laws for UEPB Private establishment of quality Reject factor present 30% to quality regulations in the UGEA Sector management systems less than 5% in 5 sector MTTI Low along the value chains years. UGEA of the sector to reduce Evaluate and apply quick produce reject levels in and inexpensive screening the market tests for mycotoxins that can be used at collection centres and storage warehouses. Institutional Perspective Sector Clusters in all Facilitate meetings and NAADS PSFU 1 year GOU Strategy Support Network organisation producing areas. information to form sector UCA Private (SSN) capacity. clusters UNFFE Sector To ensure that the sector MTTI has national, district and UGEA sub-county associations UNCCI (farmers and traders) to effectively participate in all matters affecting the sector 104 The Uganda National Expor t Strategy 2008-2012

5.11 NATURAL INGREDIENTS FOR THE FOOD, ACEUTICALS AND COSMETIC INDUSTRIES

5.11.1 Overview T he long standing use of plant materials for medicinal cosmetic and culinary purposes is an activity that transcends generations and is embedded in the cultural traits of a number of indigenous communities in Uganda. The establishment of the Natural Chemotherapeutic Research Laboratory by Government in 1964 was aimed at recognizing the significance and potential of plant materials in improving livelihoods. The focus of Government however, was research into and use of the natural medicines as alternatives or complementary to modern medicine in the health sector. Less attention was paid to commercialization of the sector. Countries that focused on commercialization now reap heavily from a multi-billion dollar market of natural ingredients. These range from food, to pharmaceutical and cosmetic ingredients. An assessment of the natural ingredients sector, specifically for pharmaceutical and cosmetic use has been undertaken with input from the literature generated by the Uganda Bio-trade Programme, and a participatory value chain analysis workshop organized for the key actors in the sector. According to the Bio-trade Pre-assesment report 2004 and Natural ingredients sector assessment reports of 2005, Uganda’s stock of these ingredients includes mainly honey, jetropa, herbal teas, aloes, essential oils, Shea nut butter, Papain, Red chilies etc. which all suffer from inadequate development for international commercialization

5.11.2 Markets and trends According to Organic Monitor UK, the European natural personal care market in 2004 was valued between € 700 - 1,300 million, which equates to 1-2% of the EU personal care market, or € 2.60 per person. The Nutrition Business Journal reported the global sales for herbs/ botanicals at € 18.5 billion. In 2005, the global market for cosmetics and toiletries was an estimated € 117 billion. The West-European market represents a massive share of over 47% of the global cosmetics market. However, major European markets such as Italy, Germany and France all show slight sales declines or stagnant markets, both in 2004 and 2005, reflecting slow economic growth and price pressure. Eastern Europe is one of the fastest growing markets . The principal market drivers for natural ingredients products are: Growing consumer concerns about health, increasingly affluent groups keen to spend more on maintaining a youthful appearance, the growing demand for “green products” or environmentally responsible products that also promote sustainable agriculture, fair trade certification to address the growing concern that labourers throughout the product chain should earn a sustainable living wage. More than 70% of the medicinal products used in Uganda are based on plant materials sourced directly from the wild. The extensive use of unprocessed plant materials from farmers and wild collectors continues to inhibit the potential of value addition and research for the domestic market. 105 The Uganda National Expor t Strategy 2008-2012

5.11.3 Critical Sector Issues A summary of key issues identified in the natural ingredients sector include: • Invisibility of the sector to policy markers • Lack of National standards for production and processing of extracts. • Limited value addition initiatives in the sector, with over 70% of production sold as raw material • Low technology levels whereby processors use locally fabricated equipment, which does not conform to the international standards. • The cosmetic sub sector is relatively new, with a few operatives and a large proportion of their raw material inputs are imported. • No regulatory and coordination mechanisms exist to support the development of the sector. • Capacity inadequacies at enterprise level. • Absence of adequate information on Uganda’s commercial plant species. • Complexity of market entry and acceptability into the lucrative foreign markets. Opportunities to be exploited, strengths to be built upon, weaknesses that need to be overcome and threats to be confronted are outlined in the SWOT Analysis below. SWOT Analysis for Natural Ingredients Strengths Weaknesses • Availability of varieties of NI • Poor product quality • Private sector investment in NI is • Insufficient quantities for export vibrant though on a small scale. • Lack of government policy to regulate the sector • Sector support initiative under • Poor grassroots infrastructure the Biotrade program sponsored • Lack of appropriate and affordable technology by UNCTAD for NI value addition • Researched information available • Available traditional knowledge in NI Opportunities Threats • Global demand for NI • Environmental degradation • Favourable climatic condition for • Controlled global prices NI production • High production and processing costs • Growing consumer preference • Prohibitive international quality standards for green products • Insecurity in areas regarded Potential for NI production To address the above sector issues and weaknesses and confront the envisaged threats, the NES proposes a comprehensive management framework of several objectives and action initiatives as detailed in the matrix on the pages that follow. 106 The Uganda National Expor t Strategy 2008-2012 TABLE 12: INTEGRATED MANAGEMENT FRAMEWORK /MATRIX FOR NATURAL INGREDIENTS SECTOR Vision: “To transform the sector from subsistence to a commercially export driven sector as a way of improving livelihood of the stakeholders” Objective Measure Target Initiative Lead Support Milestones Resources institution Institution Development Perspective Number of 10% pa for Nationwide sector UEPB- MAAIF GOU Commercially harness the Jobs the next three reorganization into Biotrade LGs Private sector’s potential with a view years. SMEs associations to Program Umbrella sector Sector of generating incomes and enable expansion Association Low jobs for the participating MTTI communities. Income levels More than Build the capacity of Natural 3 years Donor US$ 3/day for participating communities Chemothera- the participant in commercial production peutic Research communities practices under Laboratory outgrower schemes. (NCRL) Environment Design and implement NEMA Mininistry of 3 years GOU sustainability pilot projects for UEPB Natural Resources Low sustainable utilisation of and environment. natural resources UEPB- Biotrade unit Competitiveness Production 10% increase Design and promote NI Sector MAAIF 3 years GOU Perspective and export in production group production Association Donor Border-In Gear volumes and export practices and improved UEPB-Biotrade Private Capacity Development: quantities in 3 organic practices. program Sector To improve production units years PSFU Low and design centres in order NCRL to enhance production efficiency 107 The Uganda National Expor t Strategy 2008-2012 Objective Measure Target Initiative Lead Support Milestones Resources institution Institution Capacity Diversification Range of 10 product Awareness programme NI Sector MAAIF 2 years GOU To increase the range of products ranges as a on the commercial Association UNBS Donor products from a wider base minimum. significance of many PSFU Private of raw materials but also unexploited resources in Sector from similar bases of raw the wild Low materials Variety of Extensive research NCRL UNCST 5 years GOU products from 10 and development UIRI NI Sector Donor similar raw programme. Association Private materials NCRL Sector Programme to attract UIA UEPB-Biotrade Low FDI in the processing Unit. segment of the sector’s PMA Secretariat value chain. NPA Human Capital Development: Number 3 major training Design and implement NI Sector NCRL 3 years GOU To equip sector human of sector events every a training programme Association UEPB Donor capital with necessary skills enterprise year targeting in processing, business CICS Private in processing raw materials trained. all SMEs and development, marketing UIRI &UNBS Sector into usable products those with strategies and enterprise EUg Low potential to management. export Infrastructure Level of Small scale Identify the needed NI Sector MOFPED 2 years Private Lobbying for support equipment processing equipment and lobby Association MTTI Sector towards processing support equipment in for incentives to acquire UIA GOU equipment rural settings them at low cost. URA Medium UIRI PMA Secretariat NPA Transaction support Number One Design, standardize and UEPB (Bio- MTTI 1 year Private To facilitate the of local regularized source funding for the trade unit) NI Sector Sector development of the local promotional local Naturals Expo on an annual basis. Association GOU market as springboard for events Expo every Low the export sector year 108 The Uganda National Expor t Strategy 2008-2012 Objective Measure Target Initiative Lead Support Milestones Resources institution Institution Border out Gear Number of At least one fair Design promotion and UEPB Bio- UNCCI 1 year GOU In-Market Business support fairs for NI’s every year in marketing programme trade Unit NI sector Donor To create awareness on in EU, USA target countries to support companies in Association. Private the quality of Uganda’s and Japan trade fairs and missions MOFA Sector NIs especially in countries in potential markets Low with high levels of health concerns Image and Branding Number Minimum of 1 Register national species MTTI NCR 5 years GOU Patent Uganda’s species of species every year and initiate a project MOJA Donor patented with World Patents UEPB- Biotrade Private Organization (WIPO) Unit Sector to support the patenting PSFU Low process in the country NI Sector Association Client Perspective Number At least each Design and incorporate NI sector UNCCI GOU Competence of training of the technical a sector specific Association EUg 1 year Donor To ensure maximum business programmes personnel training module in the UEPB- Biotrade Private competences among established among the current UEPB training Unit Sector Sector SMEs and potential Number of existing programmes targeting MTTI Low exporters SMEs trained commercialised exporters SMEs Information Number Internet based Develop a sector specific NI sector NRC 2 years GOU To establish a trade of clients information marketing website Association UNCCI Donor information source for accessing system hyperlinked to the UEPB- Biotrade Private NI potential and actual information Regional Information Unit Sector exporters System for Export (RISE) MTTI and other working Low websites 109 The Uganda National Expor t Strategy 2008-2012 Objective Measure Target Initiative Lead Support Milestones Resources institution Institution Financial Mobilize SMEs into NI Sector MOFPED 2 years GOU Ensure the sector small scale Number All SMEs with SACCOS and design Association MTTI Donor producers and processors accessing export potential value addition proposals (Coop, Private access funds especially for funds for financing support Department) Sector value addition UDB Medium Identifying and link Other Banks enterprises with appropriate business financing institutions. Quality Raw material Manpower in Design and implement UNBS NCRL 2 years GOU To increase the production of production key institutions Quality guidelines and UWA Donor quality natural ingredients and standards of NCRL and standards compliance CITIS Private to meet the national and in place. UNBS system and schemes. UNBS Sector international market UNIPA Medium standard Quality All producers system in and exporters place in a traceable quality chain Institutional Perspective Number of All exporting Develop a coordination NI sector MTTI 1 year Private Strategy support Network companies SMEs framework in form of Association UEPB By 2013 Sector (SSN) involved an annual stakeholder NCRL Medium To ensure a framework for in a united conference and a NPA strengthening associations/ association national association. companies involved in the framework. sector Service Delivery Network Capacity of A Strengthened Capacity assessment and UEPB- MTTI 2 years GOU (SDN) key sector NIC Sector development programme Biotrade MAAIF Donor To ensure a competitive promoters Association for the Sector Association UEPB Private service delivery mechanism and other service NCRL Sector in the sector providers Medium 110 The Uganda National Expor t Strategy 2008-2012

5.12 THE COMMERCIAL HANDICRAFTS SECTOR

5.12.1 Overview Uganda has a wide array of handicraft products ranging from basketry, mats, ceramics, beads, pottery, hand textiles and woven products, toys, jewellery, bags, ornaments, leather products, batiks and wood craft among others. These items are produced in almost all the Districts and Regions of Uganda, using locally available raw materials, with limited product differentiation based on culture, history and traditions. The sector is dominated by women, youth and the disabled all selling mainly to the country’s tourists.

5.12.2 Markets and trends The EU-25 gifts and decorative articles market is worth about € 20.8 billion20 . During 2000- 2004, the market experienced an average percentage growth of 5.0%. Basketware, wicker ware and other articles made up of plaited vegetable twine (HS 460210), commanded a global demand size of US$ 1.26 billion, growing at 4% p.a. in value between 2001 and 2005. The United States is the world’s largest importer of handicrafts, gifts and decorative articles. The European Union under EBA and the USA under AGOA both offer preferential treatment for Uganda’s handicraft products. There are opportunities in other markets established through bilateral trade agreements. Uganda exports very small quantities of handicrafts especially basketry and wicker ware. Statistical figures indicate modest export values of US $ 48,000 to US $ 141,000 between 2004 & 2005. These values could be enormously enhanced in a very short period if the sector was formalised given the vast global market and the sectors relationship with tourism. Currently most of the handicrafts in Uganda are sold domestically to local buyers and tourists with a few being exported to USA, Canada, Australia, Germany, UK and Japan. Other existing markets for Uganda’s crafts are Ugandans in the diaspora and Kenyan traders who buy and blend Ugandan craft pieces and re-export them to Europe and the USA.

5.12.3 Critical Sector Issues • Need to properly organize the sector, focusing mainly on overcoming fragmented production units. • The challenge of inadequate capital which largely is due to the dominance of under- resourced women groups. These are not able to muscle the needed collateral and capacity to secure access to credit. • The sector is also dominated by players with less practical skills at all levels of the value chain. • Lack of international market awareness is high and competences in international marketing are lacking. • The sector is also affected by infrastructure challenges given that the real producers are far away from the marketing centers. This translates into poor linkages between the many producers in the countryside and the marketing points in urban center. 20 Source: Eurostats 111 The Uganda National Expor t Strategy 2008-2012 • The sector also suffers from high reject rates mainly due to the lack of skill and precision in crafts making processes. • Environmental degradation and global warming affecting raw material resources. Additional issues, particularly relating to weaknesses that need to be overcome and threats that need to be confronted are outlined in the SWOT Analysis below. Commercial Handicraft Sector SWOT Analysis Strengths Weaknesses • Availability of abundant and • Unstructured and individualized production unique local raw materials, e.g. systems raffia, backcloth, banana fibre, • Limited capitalization and low investment animal skin etc • Limited technical skills, capacity, technology • Rich and diversified culture integration and innovations producing a wide array of • Limited resources for production, distribution and handicrafts marketing • Wide range of traditional • Disjointed and duplication of efforts by production knowledge derived stakeholders in capacity building, research and from indigenous knowledge training. • Current and potential Internal market based on tourism Opportunities Threats • Preferential trade arrangements • Handicraft sector not mainstreamed in national with USA (AGOA) and the EU planning priorities (EBA), other bilateral markets • Absence of institutional support • Several initiatives to support • High freight costs associated with air cargo and sector capacity building shipment including a sector strategy • Competitor countries like China, India, Vietnam, • Fair Trade Agreements Kenya etc. which produce cheap and good • Increasing flow of Tourists who quality crafts provide market for products • Unique of products rooted in the country’s diverse culture To address the above sector issues and weaknesses and confront the envisaged threats, the NES proposes a comprehensive management framework of several objectives and action initiatives as detailed in the matrix on the pages that follow. 112 The Uganda National Expor t Strategy 2008-2012 TABLE 13: STRATEGY INTEGRATED MANAGEMENT FRAMEWORK /ACTION MATRIX FOR THE HANDICRAFTS SECTOR Vision: “To be the leading exporters of a wide range of indigenous and culturally branded articles in the region” Objective Measure Target Initiative Lead Support Mile- Resources institution Institutions stones Development Income 50% of the Training and strengthening Uganda MTTI 3 years GOU Perspective levels final value of market linkage programme National UEPB Private Sector Raise the incomes of the product to to move producers to higher Arts and Ministry of Donors1 mainly women, youth producers levels of the Value chain Crafts Gender Low and disabled groups Association Labour dominant at the (UNACA) and Social production level of the Development sector’s value chain (MGLSD) PSFU Exposure Africa NAWOU UWEAL Competitiveness Volumes of 2 centres per Train SMEs in handicraft UNACA UEPB 2 years GOU Perspective production region by 2010 design and sensitise them MGLSD Private Sector Border-In Gear: on using regional centres to PSFU Low Capacity Development: Number enhance their skills as teams. Exposure To improve production of design Africa units and design centres centres in order to enhance production efficiency and higher volumes JICA through AICAD Uganda and UEPB is already training Trainers of Trainers for grassroots support while UNIDO is supporting design enhancement projects. 113 The Uganda National Expor t Strategy 2008-2012 Objective Measure Target Initiative Lead Support Mile- Resources institution Institutions stones Capacity Diversification: Variety of At least 5 Set up design/ common UNACA UEPB 3 years Equipment Diversification of products products from facility centres for SMEs and PSF Leasing production processes from the a category of to share knowledge and Exposure LGs Companies (technology) to enhance same raw material equipment Africa UWEAL GOU material usage and category of NPA Donors application materials Low Human Capital Number 50 graduates Programme to strengthen UNACA Vocational 2 years GOU Development of sector per year for 5 crafts making in vocational institutions Donors To ensure human capital operatives years training insitutions MOES Private Sector with necessary skills in trained UEPB Low processing raw materials PSFU into crafts Competitiveness Number 2 collection Identify the regions, UNAC and MTTI GOU Perspective (Cont) of support and training develop project and seek Exposure UEPB 3 years Donors Border Gear: infrastructure centres in each financing support for the Africa PSFU Private Sector Infrastructure of the main establishment of centres UCOTA Medium To establish a crafts producing supportive infrastructure regions across the whole country Procedures and Number of All handicrafts Design a programme to UEPB UNACA 1 year GOU Documentation handicraft exporters and train all crafts traders Exposure Donors To develop skills in producers. producers under and potential exporters in Africa Private Sector preparing export and associations. documentation management MGLSD Low documentation exporters trained Transaction Support Number All clusters Programme to educate UNAC UEPB 1 year GOU To consolidate export of SMEs Consolidation SMEs on cargo consolidation MGLSD Private Sector orders to lower freight consolidating cargo practices and benefits within Clearing Low costs per exporter cargo clusters. firms PSFU UEPB 114 The Uganda National Expor t Strategy 2008-2012 Objective Measure Target Initiative Lead Support Mile- Resources institution Institutions stones Border-Out Gear: Number of 5-10 large Programme to participate in UEPB MTTI GOU In market Support buyers in buyers each in targeted trade fairs in the UNCCI 1 year Private Sector To access all markets preferential EU and USA target markets using market UNACA and Low where Uganda has markets experts. Exposure been given preferential Africa treatment NAWOU Image and Branding: All export All Crafts Design and implement a MTTI UEPB By 2012 GOU To have all Ugandan products to export products. business brand linkage UNACA and Private Sector. products branded bare the programme for the crafts Exposure Low “GIFTED BY NATURE” as “Gifted by sector Africa a national brand and Nature” PSFU logo Logo Gifted by Nature Inc. Client Perspective Number. SMEs on market SME Coaching programmes UEPB UNACA and 1 year GOU Competences of SMEs development in marketing skills and best Exposure International Enable actual and receiving coaching practices Africa Trade potential exporters coaching programmes PSFU Development acquire practical skills in Institutions export development and Private Sector management Information Number Marketing Establish sector marketing UNAC MTTI 1 year GOU To ensure availability of of clients website website and hyperlink it UNACA and Private Sector. market information to accessing to RISE and other visible Exposure Low crafts manufacturers information websites especially in Africa Tourism UEPB 115 The Uganda National Expor t Strategy 2008-2012 Objective Measure Target Initiative Lead Support Mile- Resources institution Institutions stones Financial Amount Support to Jointly develop financial UNACA MFPED 2 years MFPED To ensure accessibility to of low exporters that proposals based on PSFU BOU affordable production cost credit have secured evidence of market and BOU Donors and pre-shipment accessed orders seek financing support from MTTI High finance by crafts UDB and SME financing Exposure exporters schemes such as PSFU-BUDS Africa NAWOU NPA Quality Reject factor Minimize this to Programme to set UNACA UNBS 2 years GOU To ensure necessary less than 5% industry standards and MTTI Private Sector. quality conformance harmonize them with known Exposure Low with international international standards UEPB standards Exposure Africa Institutional Perspective Number of One annual Establish and designate Strategy Support planning conference an annual sector review UNACA MGLSD 1 year GOU Network (SSN) meetings/ conference to review Exposure Private Sector. Regular forum to review conferences progress and innovatively Africa Low plans for the sector plan for the sector NAWOU NPA Services Delivery Functional 5 per region Initiate process of cluster UEPB MOES 2 years GOU Network (SDN) clusters formation as a BDS MGLSD Private Sector. Build a strong and development framework for UEPB Low regionalized service crafts SMEs Exposure delivery framework Africa LGs. 116 The Uganda National Expor t Strategy 2008-2012

5.13 THE MANUFACTURING SECTOR

5.13.1 Overview O ver the last five years, the manufacturing sector in Uganda has experienced moderate growth, in various product sectors, in the process, significantly contributing to job creation and economic growth. According to the Uganda Bureau of Statistics, value added to the economy by the sector, both formal and informal, grew by 3.3% in 2003 and by 9.7% of GDP in 2004. Again, the Bureau reports on nine principal manufactured commodities, where an identifiable manufacturing and export base exists, namely, sugar, beer, soft drinks, cigarettes, textiles, cement, laundry soap, edible oil and metal products. Each of these presents interesting trends in production growth. For example, in the fiscal year 2003/04 and 2004/2005, soft drinks production grew by 28% from 107,883 litres to 137,96 litres. Textiles production grew by 20% from 10,607 metres to 12,765 metres. Cement production grew by 16% from 581,531 tonnes to 675,095 tonnes. Soap production grew by 18% from 73,641 tonnes to 86,986 tonnes and lastly Metal products production grew by 14% from 73,862 tonnes to 84,200 tonnes.

5.13.2 Markets and Trends Uganda’s manufactured exports continue to make strong in-roads in regional markets. Manufactured exports, excluding processed tobacco (traditional exports) rose in value from US$148 million in 2004 to US$ 198 million in 2005. Exports grew to approximately US$ 306 million in 2006, a fairly large growth of 31.8% compared to the previous year. The exports are mainly to the regional markets of DR Congo, Sudan, Rwanda and Burundi.

5.13.3 Sector issues The main issues for the sector include: • Energy deficiencies • Utilities - high costs and availability • Regional market access • Unfair competition due to low quality and low cost imports • Over-dependency on imported raw materials • Uganda’s non membership in the COMESA FTA costs the sector additional taxes in the region’s importing countries Many of these have been addressed under the cross-cutting issues of the strategy and as such a matrix of strategic actions need not be repeated here. The NES also recognizes the need for strong linkage between agriculture and industry and as such, all agricultural Sectors of the NES have had Value addition as one of their key objectives. 117 The Uganda National Expor t Strategy 2008-2012

6.0 FINANCING THE STRATEGY

6.1 Financing NES Initiatives NES implementation requires enormous resources (both human and financial). These cannot be raised by any single institution. Where responsibility for financing specific initiatives falls squarely on Government, best practice dictates that resources for such an initiative be provided to implementing agencies through the annual budgetary appropriations. Lead Agencies will in such cases be responsible for preparing resource estimates and have them submitted and reviewed through the annual budget processes. Where responsibility for specific initiatives falls squarely on the Private Sector, the lead private sector agencies indicated in the matrices will closely work with the NES Secretariat to cost the initiatives and mobilise private Sector support. It is also proposed that in both cases, Government negotiates special instruments including grants and loans to finance strategic aspects of the Strategy. In all these cases, the steering committee, supported by the CICS and the NES Secretariats will originate costed projects and seek their approval for financing before they are presented to donors for support. The matrices of sector objectives and initiatives have highlighted where Government, Donors and the Private Sector may be the appropriate sources of funds.

6.2 Secretariat and NES Coordination Costs During the NES approval process in a CICS National Steering Committee of 2nd August 2007, at Ministry of Finance, Planning and Economic Development it was decided that instead of creating a new NES Secretariat, UEPB should be strengthened to carry out this role. Thus, to enable the NES Secretariat (i.e. UEPB) properly plan for and manage strategy implementation processes, it will require annual resources amounting to US$ 1 million21 . These resources will finance adequate staff size and institutional retooling for effective strategy management and improved linkages with supply side centers in various parts of the country. PARTICULARS AMOUNT (SHS) Employee costs for the NES Secretariat (UEPB) 978,075,788 NES Steering committee costs 38,250,000 Administration and other costs 38,250,000 Vehicle operation and maintenance 440,403,500 Utilities 144,804,000 Consumables 19,162,450 Other Goods and Services 3,665,000 Office rent and Related Property Costs 117,604,000 TOTAL BUDGET (SHILLINGS) 1,741,964,738 US $ EQUIVALENT 1,000,000 USD Estimate based on an exchange rate of 1US$ to Shs 1740 21 This figure has been based on the annual subvention requirement of UEPB considering its rightful staff size of 118 33 employees. Additional estimate has been made for annual review meetings of the NES Implementation Steering Committee The Uganda National Expor t Strategy 2008-2012

7.0 INSTITUTIONAL FRAMEWORK FOR NES IMPLEMENTATION

7.1 NES Management Structure T he implementation of the NES shall be the joint responsibility of both the public and private sectors through a public private sector partnership approach. The proposed management structure leverages on the synergies with existing structures, especially within MTTI under the Integrated Framework and those already established under CICS. The Presidential Economic Policy Council (PEC) shall provide overall political supervision of the NES as it is in the case of CICS. The PEC will play the role of the watchdog and raise yellow and red flags when NES implementation targets and goals fall short of the expected results. It will also constitute a powerful lobby and supervisory group for the export sector and regularly knock on the doors of policy-makers, leaders and development partners to cause the needed policy interventions and resource allocation for achieving stated plans in the export sector.

7.2 The NES Steering Committee The oversight for implementation will be provided by the CICS Steering Committee jointly headed by the permanent secretaries of MTTI and MFPED supported by the CICS Secretariat and the NES Secretariat at UEPB and MTTI. This committee shall be involved in making key technical decisions relating to NES implementation, monitoring and evaluation. PSFU and NPA having been part of the lead agencies in designing the NES shall be part of the NES Secretariat. The PSFU in particular will bring into the Secretariat the voice and requirements of the private sector at the Secretariat level.

7.2.1 NES Implementation Secretariat - UEPB The NES implementation secretariat, as described under 7.2, shall be the statutory national agency responsible for export development in the country, the UEPB. The body shall however require strengthening within the first year of the NES launch to enable it effectively perform activities under its mandate and to create appropriate linkages with the grassroots as per the proposals of the IF Diagnostic Trade Integrated Study of 2006. It will also involve affording it the right staff size and calibre as per the recommendations of the Commonwealth restructuring project of 2003-2004.

7.2.2 Place and role of Districts The Districts shall play a key role in implementing the NES under the decentralization frameworks of the country. They shall work very closely with the District Private Sector Associations (e.g. PSFU, UNFFE and UNCCI) where these exist. Other key government programme structures that shall be part of the NES implementation team at the local level will include NAADS and DCOs. The partnership between the District and the Private Sector Chapters shall form the point of contact for NES implementation programmes in the District. Note that this does not constitute an additional structure but simply leverages on the already established institutions and running programmes at the districts. Their key role shall include identifying District Export Supply Centres, push for ordinances that will enable the integration of NES issues in District Development Plans and Budgets. This particular role was a recommendation by district leaders themselves made during the NES Formulation process. 119 The Uganda National Expor t Strategy 2008-2012 Figure 7: Organorgram of NES implementation Institutional Arrangements Presidential Economic Policy Commission (PEC) Other Development Ministries CICS Partners NES Secretariat (UEPB, MTTI, PSFU. NPA) District NES Implementation Government Coordination Unit Trade Support Institutions (LGs, NAADS, PSFU, DCOs, etc Network KEY Working Relationship Direct coordination Relationship Note UEPB will play the central coordination role, reporting progress to MTTI District leadership will in close cooperation with the private sector define NES focal point/ contact in accordance with provisions of 7.22 above. PSFU and NPA are independent institutions out of MTTI structures. They will be co-opted on the secretariat whenever important decisions are to be taken.

7.2.3 NES Implementation Plan Immediately after the launch of NES, the secretariat will design an implementation plan in close cooperation with the lead institutions. The plan will highlight priority initiatives drawn from the strategy integrated framework matrices. It will also draw a critical path for implementing the priority initiatives.

7.3 Monitoring and Evaluation Regular assessment of progress and mechanisms for addressing constraints shall be placed in the ambit of the CICS steering Committee, again supported by the CICS and NES Secretariats. On an annual basis, the CICS and the NES secretariat will organise a NES implementation review and monitoring conference to track how the players named in the strategy matrices are faring in terms of delivering results on different NES initiatives and targets. This review conference will often take place before the commencement of the government’s budget preparation period. Also a monitoring and evaluation tool will be developed in the initial year of NES launch. 120 The Uganda National Expor t Strategy 2008-2012 Annexes Annexes 121 The Uganda National Expor t Strategy 2008-2012 A 1. NES PRIORITY SECTORS VALUE CHAINS A1.1 Current Coffee VCA - Current BUYING CENTRES TRANSPORTER COMPANIES/ COFFEE FARMER BROKERS ROASTER WHOLESALER RETAILER (middlemen) EXPORTERS Raw, unprocessed or Hulling Roasting semi-processed (using Cleaning Brewing both dry method and wet Grading Blending method) up to patchment Colour sort- Packaging ing Unsorted Cherries; mainly dry semiprocessed Pre-selecting, and de- Standardiza- (>98%) pulping, fermentation, tion 3.5 million people depend on coffee for their washing livelihoods Export ready Arabica(20%) mainly grown in Eastern Uganda, green beans Robusta mainly grown in the South/Southwest (80%) Middlemen bulk coffee from different Inadequate access to skilled labour Expensive and constrained Current production is about 2 million bags, mainly sources to increase volumes (quality Aneamic supplies of standard coffee marketing due to poor agricultural practices leading to low invariably falls) Inefficient sourcing supply chain yields Little price information available to Limited number of indigenous Complex distribution channels Smallholders planting less than an acre farmers sector players. Sector largely in the EU and US markets Yield estimate 1kg per tree and declining Small processing plants with limited characterized by multinationals. Arabica (0.6 to 0.8 kg per tree) processing capacity (approx 20 tons per Limited incentives to roast and pack Expensive and complex High incidence of improper picking practices day) finished coffee branding options (unripe cherries) Loss of about 5-10% Limited incentive to transform the coffee Lack of roasting infrastructure Rudimentary production methods Price margins vary significantly Little Investment in roasting Growing specialty coffee Smallholder has limited access to seedlings depending on who incurs the cost of technology segment commanding Typically the farmer sells indivudually to buying transportation to the next processing Price volatility premium prices centre facility Loss rate of approximately 15% Associations are non existent Middlemen are highly speculative. - 20% due to waste because of Cheerry size is declining (variery of factors) Their advantage is to find bulk for the defects, chalky whites, stones, etc. Coffee wilt desease severely impacted robusta companies to buy. High operating costs (electricity, production forcing re-planting interventions Middlemen have limited control of the water etc) pricing. 122 The Uganda National Expor t Strategy 2008-2012 A1.2 Future Coffee VC PACKAGING BUYING TRANSPORTER COMPANIES/ COFFEE FARMER EXPORTERS ROASTER WHOLESALER RETAILER CENTRES (Middlemen) Roasting Hulling Cleaning Brewing Raw semi-processed Grading Blending CONSUMER (using both dry method Color sorting Packing Pre-selecting, Standardization and wet method) up to and de-pulping, patchment fermentation, washing ROASTER Improved post harvest handling (drying and sorting) Export ready green Increase production from 2 million bags to beans approximetely 4 million bags in the next 5 years, through improved and modern agricultural practices Eliminate Adequate access to skilled labour Increased export promotion and Increase number of trees from an estimated 1.6 (middlemen) Improved sourcing and coffee supply marketing billion currently to 3 billion in the next five years. speculation chain Reduce cherry loss from 5% to <1% in the next 5 Reducing loss rate from 15% to about years aspect of the Engagement in distribution channels in value chain 5% in the next 5 years the EU and US markets (partnerships Stem decline of and Increase Yields, from 1kg Intensive investment in coffee roasting Robusta per tree to approximately 2.5 kg per tree, in with supermarket chains and the next 5 years. and processing. (Approx. 25% per Increase bulking annum over a 5 year period). wholesalers) Increase Arabica yields (from 0.8 kg per tree to through the about 2.5 kg per tree) Increased branding initiatives Improved and increased best picking practices, commodity Improved modern processing and Exploration of alternative markets increased sensitisation exchange roasting technology (opportunities in China, etc) Modern production methods (from hand hoe to (warehouse Certifications (4C, utz kapeh, organic etc) Aggressive Brand Promotion in the EU tractor) receipt system) Adequate access to capital finance and the US Increased access to seedlings and better seedling to ensure Increase Research and Development varieties. Improved access market and product Re-establishment of producer groups (co-operatives) quality and Emphasis on specialty coffee (fair supply. information trade, organic, utz kapeh, 4C etc) to sustain high levels of production Intensify and sustain re-planting initiatives and Access to affordable electricity to cater for a growing segment of sensitisation on the coffee wilt Acquisition and investment in packaging organic and specialty consumers Make price information more accesible to farmers technology plus improved capacities in Increase organically ceritified land packaging and branding Introduce good traceability practices 123 The Uganda National Expor t Strategy 2008-2012 A2. FISH VCAS A2.1Current VCA Lack of Control by Competent Authority Control by Competent Authority Boat Ice Packaging Product Constructor Producer Supplier Analysis Fish Transporter/ Fish Fish Wholesaler/ Fishers Suppliers/ Collectors Processor Storage Retailer Transporters - Selector - Washer Landing BMVs/ Portable - Filletor Inspectors Water - Skinner - Trimmer - Packer - Storage • Artisanal fisheries – use of traditional methods • Many fishers involved – 300 000 • Limited fishing capacity (unseaworthy boats) • Currently 17 fish processing establishments • High post harvest loss (27% fishers, 3% factory) • Migratory: following fish catches • HACCP system is implemented • Lack of effective resource management • ISO 9001: 2000 + ISO 22000: 2005 certified • Prevalence of unsustainable fishing gear/methods & ISO 14000 standard • Unsuitable boat design/resistance to change/costs involved high • Establishments meet world class standards • Sub-standard fish handling due to lack of training/monitoring • Have support from CDE, UNIDO for • Inadequate facilities at some landing sites • Fishers have low bargaining power due to perishable product, prices establishment/ dictated by fish suppliers • quality improvement, capacity building, market • Fish suppliers use insulated containers and ice research and product development • Insufficient hygiene and quality control/monitoring due to lack of • By-products are sold locally staff/inspectors • 16 Processors are under the umbrella of UFPEA • Fishers and suppliers have no association respectively (fishers in particular due to migratory nature and low level of education) • EU regulations are observed 124 The Uganda National Expor t Strategy 2008-2012 A2.2 Future VCA Control by Competent Authority Boat Ice Packaging Product Product Development Constructor Producer Supplier Analysis & Branding Fish Wholesaler/ Fish Fish Transporter/ Fishers Suppliers/ Retailer Collectors Processor Storage Transporters Fish Potable Chemical By-product Farmers Water Supplier value addition • Diversified resources from aquaculture • Improved landing facilities through external support • Better resources management and sustainability • Comprehensive supplier training/audits in place • Better boat design to support quality enhancement measures • Branded products • Good handling practices implemented • Product development for existing products (e.g. instant dinners) • Adequate facilities at landing sites leading to increased value addition • Reduced post harvest losses to 5% upstream and 0.3% at • Organic products factory level • Viable products developed from by-products and waste: • Sustainable fishing methods and appropriate fishing gear - Fish meal • Effective traceability system implemented - Silage • Organic products in development - Fish oils • Environmentally and socially acceptable fishing methods - Fish skins (leather) through eco-labelling - Delicacies • Upstream fisher, fish farmers and fish suppliers associations formed 125 The Uganda National Expor t Strategy 2008-2012 Cotton, Textiles & Garments Current Value Chain Spinning Yarn & Ext CDO and textile Procures Grades companies finishrd Seed + subsidised chemical inputs Seed Cotton garments Other lint Wholeselers exporters Middlemen Merchant Cotton to buying Ginnery Ginnery Transporter Spinning Finished Transporter retailers Famer centre Activities: Outputs: & textile garment • Weigh Lint millers Raw • Sort Ginning Finished unsorted Weighed • Grade garments Aggregated Outturn Yarn (finished seed cotton ungaded affloaded • Pre-clean • Roller Gin =34% Lint garments) seed cotton seed cotton • Bale (185kgs =64% Seed bale) =2% Waste • Weigh • 480 000 farmers on less than ½ hectare • Farmer mostly relies on • Hi-grade medium staple length, which can command a premium price plot size each agent s (middlemen) for • CDO funded by 2% cess on exports, which is now inadequate • Rudimentary production, using hand hoes • 38 technologically aging ginneries producing for land opening and weeding price information and • Lack of necessary fertilizers & pesticides selling of cotton 250 000 bales = ¼ of capacity (2004, 2005 season) Currently production has fallen to 133,000 • Low yield (187kg lint/acre vs world • Low bargaining power bales (2005, 2006 season) average 700kg) CSF by farmers due to lack of • High incidence of improper picking organized groups • GOT Lint @ 34% lower than accepted norm of 37% to 40% - CSF practices (use of polypropylene bags • Export markets: for harvesting rather than recommended • Long supply to market hessian cloth)- CSF chain - UK 36%, Germany 17%, Netherlands 10%, • No sorting of cotton by farmers- CSF • Contamination of seed Malaysia 18%, Singapore 5%, Kenya 14% • lack of organised farmer groups (CSF) cotton to exaggerate • lack of credit finance for farming inputs weight (approx 4%) • Lack of marketing strategy – CSF: Lint bought mainly by merchants in Europe for blending and • contamination of seed cotton to sale to spinners in Far East exaggerate weight. (4%) • tampered-with weighing • deterioration in quality due to longer storage periods and inadequate storage capacity CSF • poor storage habits (animals, dust etc) scales used to cheat • constraints in pricing and earnings due to fixed-price sale contracts (when the world price goes • Organic cotton production (10%) farmers (between 5-10% up, the ginners loose out) • pests and diseases (limited use of organic loss) • Frequent power outages and shortage pesticide in organic growing areas) • High utility costs (water, etc) • lack of market and price information high costs of crop financing . This heavily impacts on indigenous investors’ capacity(CSF) • Overdependent on Rainfed production High volatility of world market prices and Forex exchange rates • Difficulty to market access due to poor skilled ginning personnel (20 per year) infrastructure i .e feeder roads high transport costs to ports of export which impact on price paid to farmer 126 The Uganda National Expor t Strategy 2008-2012 Cotton, Textiles & Garments Future Value Chain Ext CDO Yarn & Procures Grades Spinning finishrd Seed + subsidised chemical inputs and textile garments Seed Cotton companies Fertilizer Wholeselers Animal feed Middlemen Cotton to buying Ginnery Ginnery Spinning Finished Transporter retailers Famer centre Activities: Outputs: & textile garment • Weigh millers Raw Lint • Sort Ginning Finished unsorted Weighed • Grade Aggregated Outturn garments seed cotton affloaded • Pre-clean Yarn (finished ungaded =34% Lint seed cotton seed cotton • Roller Gin garments) • Bale (185kgs =64% Seed bale) =2% Waste • Weigh • 530 000 farmers by 2010 • Price information system • Part of funding from 2% cess extended to strengthen private sector association • More efficient land opening and implemented (radio and • Alternative and viable funding structure devised weeding techniques devised cell phone, telecentres) • UCGEA and Farmers Association bolstered (mechanization) • Extension Model (6 tier • 360 000 bales by 2007 and 700 000 bales by 2010 • Adequate fertilizers & structure) and Producer • More efficient grading system endorsed by stakeholders pesticides provided Organization Model • Yield of 1000kg/acre by 2010 implemented • Export markets more diversified, greater focus on Africa through African Cotton • High quality picking practices • retention of commission & Textile Industry Alliance. implemented by farmer groups • Open end spinners supplier of choice – targeted marketing strategy • Cotton sorted by farmers originally taken by • increase local consumption of our cotton by spinners and millers; increase (incentive: price etc) middlemen spinning and milling capacity (30% over 5 years) • Farmer groups formed in • stronger bargaining • Uganda ‘premier organic cotton’ supplier from Africa adequate numbers power with ginner and • Branding from ‘Source of Nile’ campaign operational by 2009 • timely market information possibility of contract • Viable seed processing industry up and running provided to the farmer ginning thus retaining • 3 more companies spinning for local and export market (in 5 years) • strengthening of SACCOs to re- both seed and lint • More edible oil factories established (5 more established making the total 11, in invigorate financing for inputs (approx >25% value • increased organic production to obtained over and above 5 years) 40% in 5 years prevailing market prices offered by ginners) 127 The Uganda National Expor t Strategy 2008-2012 A4. TEA VCAS A4.1 Current VCA Local packers & consumers Auction Foreign Transportation Warehouse Tea Farmers Tea Factory Market Packers & Consumers Green leaf Made tea • Poor leaf • Low capacity • Poor roads • Expensive transit • Low prices • Low Volume • Old machines • Diesel shortage bonds and charges • Prices • Low labour • Erratic power • Too many exit at Mombasa • Warehouse owners determined productivity supply control points • Low yield (1800kg/ are poor at arbitrarily • Insufficient skilled • Excessive communicating sale ha made for tea vs manpower border delays of tea 3000kg/ha for Kenya) Action Required: • Increase output by giving incentives to farmers • Acquire and zone more land to tea • Make inputs more readily available and tax free • Maximize plant population/ha Acquire Greater Value By: • Improving quality of green leaf • Packing tea for both local and export market • Producing green, orthodox and instant tea • Increasing local consumption 128 The Uganda National Expor t Strategy 2008-2012 A4.2 Future VCA Local packers & consumers Auction Foreign Transportation Warehouse Tea Farmers Tea Factory Market Packers & Consumers Improved yield, quality and Packaged Direct Market varieties Made tea Tea grown • 15 000 small farmers by • Production of black • Railway • Transit system • Less delays in 2015 tea increased to 55 system revived revised remittances of • 5 000 more ha under tea 000 tonnes pa by • Modern farming methods in • Existing roads • Immediate money 2011 improved and communication of • Better prices place to produce “top of the • Old factories more access sale by broker obtained market quality” • Better clones planted rehabilitated & roads built • Production/ha increased to expanded • New factories built • Border 3000kg/ha • 15 million plantlets distributed and • Efficient and controls planted affordable power reduced • Greater variety of teas produced supply (green tea, orthodox and essential • More variety of oils potential) packaged/instant/ • Advisory services to farmers green/herbal tea available from an adequately offered equipped tea research station • Farmers better organized and • Packaged tea information flow greatly improved exported directly • Special fund for development to 3 lead markets of tea put in place and farmers overseas adequately funded 129 The Uganda National Expor t Strategy 2008-2012 A5. FLOWERS VCA • Cost of Imported young plants • Poor practices • FHL has ranges US$2 to US$3 (Kenya, present, i.e. mixing insufficient Holland & Israel) ripe & unripe flowers storage capacity • Harvest and Air Freight • Propagating young plants locally at airport so ranges US$0.25 to US$0.30 and Young transportation to Harvesting handling delays plants (e.g. rosebud) US$0.50 to Flower sorting room, further affect US$0.58 labour intensive so quality • Currently only 6 farms out of 22 Plants compromises quality & propagate their own plants speed Clearing • Grading: Insufficient machines & • Maintenance of cold Agent expensive. Tractor hire > USh1m/ rooms is expensive due hect Preparation to expertise involved • At auction and • Electricity installation: Expensive to • Frequent power Cold direct market, have of fluctuations require Distribution tap power. Approx. USh1m/pole right to reject flowers • Greenhouse Construction: growing generator backup Room and dispose of them Agent Imported greenhouse US$11 to environment • Some cold rooms don’t without consultation. US$15/m2.. Local US$3 to US$4/ maintain the required • Only one quality m2, but inferior quality. 20C temp control check by Flower Watch in Netherlands Semi-direct • Periodic shortage of pre-planting • Labour intensive Unpacking Sales fertilizers & expensive and done by hand facility • Use of hoes time consuming. 10 Planting so inconsistency agent people takes 2 months, equivalent Sorting & in selection of tractor 3-4 days opening/ripening Sizing 1. Snapshot: stages 2. Flower sector 2nd • Overhandling leading non-traditional Auction affects the quality export and 7th largest • Equipment mainly sourced from Irrigation exporter earner Israel. Installation cost US$17K to • Packaging 3. 200 ha, 22 farms & US$20K per hectare Wholesalers/ materials employs 6000 people expensive & Packing 4. Export volume grown Buyer • Management expertise, expensive from 1150mt in 1995 inferior quality • Imported fertilizers/chemicals are to 7500mt in 2005 & expensive Plant revenue increased from • Poor quality of protective gear • Predominance of US$2.3m to US$35m Supermarket/ • Spraying contaminants harmful to Management insulated trucks Retailer humans. Equivalent 1 machine = to instead of cold 8 people trucks • Poor standard Self of feeder roads Transport Customer compromises delivery quality 130 standards The Uganda National Expor t Strategy 2008-2012 A6. TOURISM VCAS A6.1 Tourism current value chain Major Attractions: Scenery, Gorillas, Other Wildlife, Culture, Lakes and Rivers TRAVEL ATTRACTIONS ACCOMMODATION TOUR OPERATOR/ INT’ CARRIER AGENT TRAVEL AGENT PRODUCT & TOURISM ONLINE RESERVATION HANDICRAFT SUPPORT SERVICES SUPPLIERS SERVICES TOURIST • Tourists are about 350,000 in 2005, • Inadequate number of beds • No SOI certified restaurants on upcountry routes • Uganda attracts mainly Fluctuating exchange rates, • Fluctuating exchange rates, Hotels in particular and Uganda in general the low budget tourist • Limited research and development, Poor not graded, Poor hotel services, High • Limited multilingual skills, Poor mechanical (CSF) conservation and poaching taxes condition road vehicles • Uganda has limited • Poor services/no value for money • Poor infrastructure (roads, electricity, • Need to improve and increase e-ticketing (CSF) knowledge about • Under development of attractions (CSF) telecommunication and water in • Lack of an effective marketing strategy, Lack of different cultures and currently approximately 10 game parks some areas) (CSF) unified tourism message for Uganda, High taxes languages (Japanese and • Poor infrastructure (roads) • Lack of strong accommodation for their businesses, Lack of affordable finance, Chinese) • Use of un-recyclable materials providers association (CSF) Low number of tourists, High fuel prices, Limited • Limited use of credit • Limited access to finance, Low tourist • Lack of affordable finance services or risky use of credit cards (CSF) cards numbers • Poor hotel billing , Limited marketing • Very limited e-commerce (CSF) • Uganda lacks an • Insecurity, Limited diversity of attractions of hotel industry in Uganda (CSF) • Limited skilled tour operators, tour guides (CSF) international country • Limited information about Uganda’s products • Limited use of credit cards • Uncompetitive pricing practices, Low cooperation brand identity worldwide (CSF) • Reliance on imported supplies among tour operators (CSF) • Poor perceptions of • Wildlife numbers (big game, Rhinos are (packed food, building materials) • Licensing done by KCC and MTTI (duplication Uganda in general no more) continued to decline in the 70s • Lack of standard unit of sale for raw of roles). introducing unwanted pocket tour • Low awareness of the and 80s. Only recently do we see a slight foods (heaps rather than kgs etc) operators Uganda tourism product. increase (CSF). (CSF) • limited cooperation with Kenya and Tanzania on • Limited international • Limited range of cultural products (art and • Poor waste management by local pricing carriers in number handicrafts) governments (adverse effects on • limited cooperation with Kenya and Tanzania on • No Ugandan airline flag • Limited hunting permits and legalized sanitation) (CSF) trans-boundary tourism carrier (CSF) companies to conduct hunting safari’s • Rampant Malaria and other • Poor tourism guiding services.(CSF) • Insufficient publicity of (adversely affected by limited numbers of sicknesses • Poor public transport upcountry, Low number of Visa acquisition process wild game) • Lack of an early warning system for travellers, Insecurity threat, Seasonality of tourist • High air taxes 131 safety assurance for tourists (MoH) • Insecurity The Uganda National Expor t Strategy 2008-2012 A6.2 Tourism Future value chain: Major Attractions: Scenery, Gorillas, Other Wildlife, Culture, Lakes and Rivers ACCOMMODATION TOUR OPERATOR/ TRAVEL ATTRACTIONS INT’ CARRIER TRAVEL AGENT AGENT PRODUCT & TOURISM ONLINE HANDICRAFT SUPPORT RESERVATION SUPPLIERS SERVICES SERVICES • Increase number of hotel beds from • Enforce SOI certification for restaurants TOURIST • Target increased tourists from 350,000 all over the country approximately 3000 beds to 15,000 in currently to 1,000,000 in 5 years. • Increase multilingual skills in the • Increased research and development 3 – 5 years restaurants, hotels, tourism areas etc • Better conservation and anti-poaching • Ensure that all hotels are graded (1 star • Improve and increase e-ticketing • Uganda should attract measures to 5 star) facilities more of high class • Increased quality of service of support • Improve all hotel services (trained • Operationalise existing marketing tourists (Japanese, services to tourism sector (from approx. service providers) strategy Develop or Intensify promotion and use plus the hunting 100 tour guides to 5000 guides in 5 • Improve access to stable electricity and • tourist) of Uganda’s Unique Selling Proposition years) good access roads. (USP); the slogan (tourism message) for • Intensive conservation to improve game • Training in Japanese • Strengthen accommodation providers Uganda (Gifted by Nature) parks (more game, more bio-diversity) association • Avail easy access to business finance and Chinese cultures • Improved infrastructure to access game • Improve hotel facilities, including hotel • Encourage and promote use and (tour operators, etc) parks and other tourist attractions acceptance of credit cards (Financial • Uganda should billing to become client friendly (roads) system!) • Aggressively market Uganda’s hotel • Increase e-commerce facilities and aggressively promote • Intensive promotion of use of recyclable material industry (CSF) practices (in next 5 years, all Gorilla an international • Intensive information campaign on • Encourage and promote use and permits should be paid for and country brand identity Uganda’s tourism sector targeting acceptance of credit cards (Financial accessed over the internet) (Gifted by Nature) • Intensive training of skilled tour opportunity markets (EU, USA and system!) • Deepen entry into EU operators, tour guides (CSF) Canada China and Japan) • Institute standard unit of sale for raw • Strengthen the tour operators and US markets • Increase numbers of wildlife game; foods association • Increase range and quality of cultural • Increase domestic and • Improve waste management by local • Centralize licensing with MTTI products (art and handicrafts) governments (anti-littering initiatives) • Increase cooperation with Kenya regional tourism • Encourage investment in hunting safaris, and Tanzania on pricing , and trans- • Improve the early warning system for and increase number of hunting permits boundary tourism safety assurance of tourists (MoH) • Improved public transport to upcountry touristic areas. 132 The Uganda National Expor t Strategy 2008-2012 A7. EDUCATIONAL SERVICES VCAS A7.1 Cross Border Model (Distance Learning) Mode 1 Skilled Intellectual Equipment & Licensing or Manpower Property Software Accreditation Platform Development of Foreign Research and Design of Delivery of service: Internet Student Development Curriculum and Education On- Quality and Affordable on-line training Line Education materials On-Line Abroad Design Marketing IT Technical Tutor Strategies Support Support • Computer ratios with students is very low • Unreliable ICT services and internet connectivity • Very few IT specialists • Computer accessories are expensive • Very low is being done in R&D in the IT line • On-line training materials are expensive to develop • Lack of planning & foresight by investors and government • Poor response to market demands - industries 133 The Uganda National Expor t Strategy 2008-2012 A7.2 Foreign Consumption Abroad (Foreign Students Study in Uganda) Mode 2 Trained Public & Private Intellectual Educator Institutions Property Equipment Development of Qualified Adequate Capitation service concept: Lecturers Education Grants & Quality and Institutions Delivery of Investment Foreign Affordable Institutions + face to face Research & Student Education IGAs education Development Ancillary Services - Hostels Design - Meals Marketing Design of curriculum - Entertainment Strategies and training - Health facilities materials - Sports • Curriculum lacks applied education due to insufficient R&D • Lack of marketing initiatives and poor response to market needs • Foreign to local student ratio is low (1:1000) • Local student enrolment in higher education is low (low household incomes and literacy levels) • Educational institutions are few and cannot meet the demand • Low ratio of qualified lecturers • Inadequate ancillary services • Lack of equipment (e.g. PCs), materials (e.g. textbooks) and state of the art lecture facilities • Lack of institutions willing to invest in educational services 134 The Uganda National Expor t Strategy 2008-2012 A7.3 Permanent External Presence Abroad (Satellite Campuses) Mode 3 Trained Licensed & Equipment Educator Accredited & Facilities Design of curriculum Development of and training Adaptation of service concept: materials curriculum & teaching Quality and materials Affordable Home HQ Education Research & Establishment of Support Delivery of Development satellite campus education (face to Foreign face) Student Design Marketing Strategies Qualified IT Support Qualified in-market Lecturers lecturers & tutors • Lack of qualified in-market tutors (regionally) • Lack of R&D regionally • Lack of funds (start-up) • Lack of centralized design of the curriculum and training materials (text books) regionally • Lack of cohesion of educational policies regionally • Capital expenditure required abroad 135 The Uganda National Expor t Strategy 2008-2012 A7.4 Temporary External Presence Abroad (Lecturers Travel) Mode 4 Trained Licensed & Equipment Educator Accredited & Facilities Design of curriculum Development of and training Adaptation of service concept: materials curriculum & teaching Quality and materials Affordable Home HQ Education Research & Establishment of Support Delivery of Development satellite campus education (face to Foreign face) Student Design Marketing Strategies Qualified IT Support Qualified in-market Lecturers lecturers & tutors • Transport is expensive in the region • Unreliable ICT services 136 The Uganda National Expor t Strategy 2008-2012 A7.5 Temporary External Presence Abroad (Lecturers Travel) Mode 4 Institutional Skilled Intellectual Educational Licensing or Funding & Public & Private Manpower Property Facilities Accreditation Self Funding Executive Adequate Teaching Capitation grants Conducive political Management qualified Quality Assurance: infrastructure & & Investment environment Support & lecturers, tutors, - Curriculum equipment Institutions Innovation IT experts & in- - Teaching house experts materials - Teaching staff Foreign Ancillary - Learning Franchise Student services (Hostels, environment Partners Development of Centralised entertainment service: Quality design of etc) and Affordable Curriculum Regional Excellent Education & teaching/ Trade Marketing training materials IT Technical Strategies Agreements Delivery of Education: Support The Four Modes Research and Development Uganda has potential to exploit all four modes, but the priority (short term to long term) is likely to be: 1. Mode 2: Students come to Uganda from across the continent to study 2. Mode 1: Ugandan institutions offer Distance Learning facilities via the Internet 3. Mode 4: Ugandan institutions work with partners in other countries as affiliations, franchises or consortia 4. Mode 3: Set up satellite centres in various African countries 137 The Uganda National Expor t Strategy 2008-2012 A8. FRUITS AND VEGETABLES VCA A8.1 Current VCA Fruit Pulp Packaging Fruits and Collection Processing vegetable Centre Fresh Fruit and Dried Fruits Fruit Juice Facility Farmers vegetables - Wash - Lab analysis - Sort - Weigh - Quality checks - Wash - Cut - Sort/Weigh/ Raw, Wash - Pack - Dry (+2days) unsorted Semi-sorted, - Sorting - Cut/Store - Weigh fruits and washed - Packing - Crush/Blend - Export vegetables Yield 16kg - Pack fresh fruit = 1 - Store kg dry fruit - Export - Export • Farmers growing on approx 3 to 10 acre plot • Distance to collection centres from • Insufficient supply of raw sizes farms varies between 80 to 450 materials • Pineapple (sourced from Kayunga, Luweero & kms. Sub-standard feeder roads • Low technology levels Masaka) 160 000 mt pa, passion fruit (Mubende • Lack of qualified personnel • Low utilisation of processing & Mpigi) 8 000 mt pa, mango (Iganga & Lira) 40 • High wastage varies from 10% to capacity (dried fruit approx 10% 000 mt pa, apple banana (Kiboga & Masaka) 20% to 25%, fruit juice 40%) 2,300,000 MT pa • Inadequate cold storage facilities • Logistical constraints caused by • Characterised by seasonality & low yields • Inadequate utilities (water and delays in delivery of pulp and • Inconsistent quality electricity) packaging • Poor post harvest handling • Inadequate transportation, • Lack of skilled personnel • Lack of storage and transportation infrastructure (mainly trucks many of which are • Local government tariffs not refrigerated) • No organic certification 138 The Uganda National Expor t Strategy 2008-2012 A8.2 Future VCA Packaging Fruit Pulp Fruits Collection Processing Farmers Centre Fresh Fruit Dried Fruits Fruit Juice Facility - Sort - Wash - Lab analysis - Wash - Weigh - Quality checks - Pack - Cut - Sort/Weigh/Wash - Weigh - Dry (+2days) - Cut/Store Quality, - Export - Sorted - Crush/Blend Assorted & picked, - Branded - Branded packed fruits sorted fruits - Pre-clean & - Pack pack for market - Store - Export - Export • Double pineapple production to • Upgraded road and utilities • Increased volumes of quality raw • 320,000MT p.a. over the next 5 infrastructure within 3 years materials years • Sufficient qualified personnel • Increased processing capacity of • Increased yields per ha • Post harvest losses reduced to 50% in 5 years • Improved quality picking and less than 5% in 5 years • Local production of fruit pulps handling practices implemented • Adequate cold supply • Better drying & fruit processing • Produce sorted by trained farmers chain infrastructure in place technology (more state of the art • Post harvest storage improved (refrigerated trucks, pack production) • Shared primary irrigation network houses, collection centres e.t.c) • Better logistics at customs points implemented • Lack of skilled personnel • Increase in organically certified farms 139 The Uganda National Expor t Strategy 2008-2012 A9 DAIRY SECTOR VCAS A9.1 Current VCA Export Market Regulatory and policy UHT, Cheese Input suppliers & extension Major Processor (9) service providers Cooperative Yoghourt, Ghee,P/ milk, Domestic Market 12% Butter, ice-creams, UHT Institutions Dairy HORECA Farmers Processors Transporter Supermarkets 8% Raw Milk Vending point Vendors On farm 80% consumption sales Retailers’ Shops, Micro Processors kiosks, bicycle vendors Machinery and equipment suppliers yoghurt, ice cream, ghee • 6 million head of cattle • Low bargaining power by farmers • Inefficient processing facilities (40% utilization capacity and 21% • 80% local breed producing 2litres of milk (few organized groups, do not own losses) (very low productivity) infrastructure) • Majority of ingredients are imported, expensive, not readily • On farm consumption sales = 40% of total • Inadequate capacity to monitor and available ( white sugar – 100% duty, packaging materials for production enforce quality standards butter at 25% duty) flavours • 20% improved breeds producing average • Poor market information access and flow • Outdated technology in most processing plants 7 litres per day • High operation costs (power shortages, • Infrastructure insufficient, expensive, imported (prime movers • Milk Production concentrated in South West fuel scarcity) taxed at 80%) and central 70%, North and Eastern only • Inadequate infrastructure • High cost of finance (interest rates at 24- 27% p.a.) produce 30% • Unfavourable policies • Inadequate investment in cold chain • Inefficiency in production (high cost • Poor governance and management for • High cost of production (irregular and expensive power supply of production, poor breeds, poor organized groups and fuel) management) • Poor milk handling practices leading to • Limited technical expertise • Inadequate extension services low quality milk and high losses • Export markets: Rwanda, Burundi, TZ, Southern Sudan, DRC, • Unavailability and expensive input supplies Kenya • Poor quality milk • Limited marketing and brand building activities • Lack of dairy export strategy 140 The Uganda National Expor t Strategy 2008-2012 A9.2 Future VCA Policy and regulation services Input suppliers and extension Export Market service providers UHT, Cheese, Yogurt, Powder milk, Ghee , Major Processor (9) Butter, Flavoured milk Dairy Dairy Yoghurt,Ghee,P/ milk, Farmers Cooperatives Butter, Ice-cream, UHT, Domestic Market Institutions HORECA Development and Supermarkets, Machinery and equipment Micro Processors Advocacy Retailers Shops, suppliers Yoghurt, Ice cream, Ghee Groups Kiosks, Bicycle vendors • Improved breeding practices 40% cross • Partnership agreements between • Increase number of processors exporting dairy processors to 10 by breeds by 2012 cooperatives and processors (terms and 2012 • Increased productivity per cow from 7 litres conditions) by 2012 • Increased utilisation of capacity to 75% by 2012 per day to 12 litres by 2010 • Product diversification (New products for export markets i.e. powder • Increased milk production in North and East • Improved milk handling practices- reduce milk, flavoured milk, yoghurt) by 10% by 2012 spoilage rate to 1% by 2012 • Implement Quality certification programme (HACCP, ISO) for all • Adoption of improved management • Improved operation and financial processors (10) in export market practices ( AI usage, improved pastures, management practices – increased • Increased marketing and brand building activities by disease control) adoption rate of 30% p.a. profitability by 20% and cost reduction by • Increased per capital consumption of milk and dairy products from • Improved access and coverage of extension 45 litres per person per year to 60 litres per person per annum by workers to a ratio of 1:500 farmers by 10% by 2012 2012 2012 • Improved access to market information – (a • Utilisation of modern technologies by 2012 • Increased accessibility of affordable input dairy bulletin twice a year by 2012 and • Implement policy on consumption of processed products in urban supplies – one supply shop per sub county dissemination to relevant stakeholders centres by 2012 by 2012 • Cooperative owned collection infrastructure • Implementation of policies encouraging investment in processing • Improve on farm milk hygiene practices by such as tax breaks, infrastructure development, availability and achieving 30% adoption rate (cans, coolers, transportation by 2012) affordability of utilities e.g. fuel, power and water by 2012 • Increased accessibility to water. • Ongoing capacity building and • Ongoing Capacity building and strengthen processors association • All dairy farmers to belong to cooperatives strengthening of producer associations (UDPA) by 2012 • 5 umbrella dairy cooperatives formed by 2012 141 The Uganda National Expor t Strategy 2008-2012 A10 GRAINS, PULSES AND OIL SEEDS A10.1 Current VCA Seed Grains/Pulse and Other Farmers/ Warehouse/ Oil seeds Transportation Middlemen Storage Export Farmers - moisture content - cleanliness Unsorted, Aggregated, - weighing bagged raw unsorted raw - sorting product product - drying - weighing • Approx. 500,000 farmers on ½ acre plots, - packaging (50kg) primarily maize & beans • Farmers dependent on - loading • Seed primarily from farmers’ own crop middlemen for prices (inferior quality) • Transportation organized • Poor quality harvesting practices lead to about a • Staple food grown primarily for own by farmers and 30% reject factor which reinforces low prices consumption. Any excess then sold middlemen (10 to 20 • No facilitation in form of funding. Commercial • Poor production methods tonne trucks) loan interest rates are too high • Use of land hoes for land opening, weeding • Raw material has a reasonably short shelf life (6 and harvesting months) • Grains/pulses not sorted at the harvest • Storage facilities expensive to construct stage (contains soil, husks, cobs) • Export markets – mainly World Food Programme • Improper drying of the seed results in poor (WFP) 90% quality & low prices • Transport organized by exporters – 50 tonne • Low yields due to poor crop breeds & lack trucks of necessary inputs (fertilizers) • No organized structures in the production system 142 The Uganda National Expor t Strategy 2008-2012 A10.2 FUTURE VCA Quality Seed Grains/Pulse and Oil Improved & seeds Buying centres expanded Processing Export Farmers warehouse facilities • Breakfast cereals Quality, hand picked, Quality graded • Edible oils dried, clean product raw product • Fortified foods • Animal feeds • Improved seed breeds • Increased acreage size for farmers • Transparent pricing system • Increased number of commercial farmers implemented • Improved husbandry practices thereby • Organized buying centres operational • Significantly improved reject factor improving production volumes and quality • Better road network and • Increased volumes of grains and pulses • Increased utilisation of more efficient land graded feeder roads • Increased storage facilities at exporters preparation methods, e.g. ox-ploughs, • Rail system overhauled to disposal small tractors, irrigation methods reduce transport costs • Loan financing scheme with preferential • Improved technology application to • Reduction of telephone interest rates in place to facilitate importation achieve modern farming practices rates of required machinery (dryers, cleaners, silos • Laws exacted which prohibit improper and spare parts) harvest and post harvest practices • Increased competency base of exporters • Provision of affordable inputs especially for export documentation and use • Producer Associations formed and savings of media group schemes in operation • Improved grading and packaging system in • Joint stores opened place • Self-empowered sector mobilization and sensitization of fair farm gate prices 143 The Uganda National Expor t Strategy 2008-2012 A11. NATURAL INGREDIENTS VCAS A11.1 Current VCA Preservatives Flavourants Colourants Packaging Produced by Gathered from Collection Farmers Wild Centre Trade Support Network Factory - sort Local Export - Weigh - Papain Honey Marula - weigh - Re-sort - Herbs Markets Markets Papaya Collosena - bag - Crush/press - Pure essential oils - Filtrate - Blended essential oils Herbal plants etc Herbal plants etc - Concentrate - Honey - Spray - Cake - Dry Foods, Drugs, Cosmetics General Production Issues: Processing: Markets: • Inadequate research and development into high yielding • Inconsistent power supply • Producers rely on agents variety of papaya/other plants • High power costs • (middlemen) for market/ • Low quantity of raw material gathered from wild • Lack of product diversification pricing information • Insecurity issues in other regions and wild • Lack of appropriate or suitable • Demand for organic • Poor infrastructure (roads) especially in rural areas machinery/equipment certification growing • Lack of coordination amongst activities of agents and • Lack of appropriate packaging • Lack of product awareness middlemen material (especially locally) • Farmers: • Long lead times (papain) • Competition from Mexico • Essentially subsistence based – better papain • Inadequate handling and collection methods/facilities • Low bargaining power by • Poor prices to farmers producers • Inadequate access to implements and information Gatherers: • Essentially subsistence based • Little incentive to switch to growing for commercial production • Inadequate handling and collection methods/facilities 144 The Uganda National Expor t Strategy 2008-2012 A11.2 Future VCA Imported Preservatives Imported Flavourants Packaging Colourants Produced by Sustainable Export Commercial Gathering Collection Markets Farmers from Wild Centre Factory (More variety of Transport products) By product/ Local Coordinated waste Markets Consolidation Local points Preservatives Local - Animal feed Flavourants Packaging - Biofuel Colourants General Production Issues: Processing: Markets: • Improved research and development into high yielding variety • Stable power supply • Direct contact between of papaya/other plants • Promote use of alternative energy producers and buyers • Introduction of new varieties sources established • Greater source of supply through advanced propagation • Appropriate and cheaper • Substantial increase in number techniques packaging materials through of local institutions able to • Better collection, improved and increased storage and flexible encouragement of local industries accredit certification of products supply chain that also allows direct transport to factory (e.g. • Increased diversification of achieved honey) products and blending (vegetable • Easy market-map access • Significantly higher proportion of commercially driven farmers oils, branded products) and gatherers • Increased use of local sources of • Strengthened producer association thereby improving supply for inputs representation and bargaining power • Better utilization of by-products • Improved infrastructure, especially roads and utilities and waste products (e.g. animal • Clear demarcation of protected areas, forests, woodlands, feed & bio-fuel) wetlands and unused communal lands 145 The Uganda National Expor t Strategy 2008-2012 A12 COMMERCIAL HANDICRAFTS VCA A12.1 Current VCA Producers Raw (Artisans, carvers, Domestic Material Middlemen/ carpenters etc? Retailers & Suppliers women Exporters - Harvest from nature, - Consolidate Activities : End products: plantations & gardens products from Domestic retailers: - Weave - Baskets Exporters: - Processors producers - Carve - Textiles - act as outlets to the - fumigate - Production accessories (glue, - Transport - label - Paint - Mats domestic market dyes, wax, varnish, nails, clips products to - pack - Dye - Bags etc) exporters - sell products to - packaging - Assemble - Furniture - export - Jewellery tourists, nationally and documentation - Dry - Mould - Paintings internationally - shipping - Tie & dyes - act as a link between - Sew • Profit driven and producers & international - Glue - Batiks exploit producers markets - Fire/Bake - Leather products - promote & • Products rendered - Sand - Carvings market national products uncompetitive/ - Wax - Ceramics & unprofitable Pottery • Limited feedback • Environmental/regulatory given to producers limitations • Poor harvest methods lead to • Lack of technical skills environmental degradation • Lack of appropriate • Limited international market • Rudimentary production equipment • Inadequate infrastructure roads infrastructure for • awareness and competency in • Fragmented production units selling points • international marketing • Poor harvest methods leading to wastage • Poor quality management systems • Lack of proper • Lack of technical skills in packaging, • Rudimentary processing • Lack of standards and R&D display skills labelling & packing equipment • Inadequate financial resources • Insufficient Uganda • Limited knowledge in export • Packaging accessories in • Poor credit access product stocked (vs • documentation quantities not affordable for • Limited capitalisation to support neighbouring countries • High shipping costs most SMEs investment promotion products) • High reject rate • Lack of domestic suppliers for • Inadequate infrastructure • Limited availability • Complicated and costly certification production accessories • Limited e-commerce enabling of quality Uganda procedures products • Barriers to obtaining export finance equipment • No innovation clusters & systems 146 The Uganda National Expor t Strategy 2008-2012 A12.2 Future VCA Producers Raw (Artisans, Material carvers, Professional Domestic Suppliers carpenters etc? Commission Retailers & Agents Exporters • Public Private Partnership • Training programmes in agreement established to place to improve technical • Specifically manage/control harvests skills trained from forest reserves • Increased use of energy • Earn realistic • Trained in better harvest and time saving precision commissions methods tools and equipment (either • Improved access roads to made locally or imported) collection centres • Equipment leasing schemes • Retailers: • Exporters: • Established collection centres established • Permanent Exhibition & • Export Support Centre established to to overcome infrastructure • Common Facility Centres constraints established Selling Centres established cater for all the sector’s export needs • Equipment leasing schemes • Improved roads to collection by Government • Quality standards for crafts established and market centres • Trade Fairs & Exhibition • established • Established Common Facility • Tax incentives offered for Training • Group certification and shipment Centres (e.g. Crane Share investment in craft sector • Greater uptake of • schemes in place Centre, Industrial Area TCF • Design Centres established Ugandan products stocked • Clusters formed in the Handicraft for leather products) to improve innovation and • Associations formed for • Sector • Encourage product accessory to work in conjunction with respective stakeholders • Export finance scheme established manufacturers to pack in National Council of Science • Umbrella body for sector • Widespread application of ICT quantities affordable for and Technology for R&D established to oversee • and internet SMEs through taxation policy • Producers have requisite • Encourage domestic access to internet development of sector production of accessories through a tax policy 147 The Uganda National Expor t Strategy 2008-2012 B. OTHER ANNEXES B1.0 Tabulated data on Criteria for the selected NES Strategic Priority Sectors B1. 1 Criteria and weights Criteria Weight Score No- of Total Scores Respondents Market access and entry 4 100 7 2800 Earning Capacity (value per unit) 4 100 7 2800 Production/supply capacity 4 100 7 2800 Relevancy to Government policy 4 100 7 2800 Market size (global) 3 100 7 2100 Value addition potential 3 100 7 2100 Poverty focus 2 100 7 1400 Job creation 2 100 7 1400 Market trends (fast growing?) 2 100 7 1400 Food security 1 100 7 700 Gender balance 1 100 7 700 Niche markets 1 100 7 700 Environmental impact 1 100 7 700 Natural resource component 1 100 7 700 Current performance 1 100 7 700 23800 148 The Uganda National Expor t Strategy 2008-2012 B1.2 Average Product Evaluation Scores based on returns from 7 Evaluators of the NES Priority Sectors Team cotton tea coffee horticulture fish Market access and 2,280 2,280 2,480 2,124 2,572 entry Earning Capacity 1,728 1,832 2,128 1,960 2,500 (value per unit) Production/supply 1,780 2,020 2,236 1,700 2,380 capacity Relevancy to 2,368 2,412 2,440 2,296 2,360 Government -policy Market size (global) 1,680 1,656 1,773 1,404 1,824 Value addition 1,920 1,785 1,779 1,719 1,635 potential Poverty focus 1,160 1,110 1,228 1,160 1,050 Job creation 1,130 1,210 1,174 1,116 1,040 Market trends (fast 934 796 840 1,040 1,226 growing?) Food security 315 320 395 480 475 Gender balance 485 470 460 470 385 Niche markets 503 410 503 543 543 Environmental 405 465 450 498 415 impact Natural resource 460 483 473 480 570 component Current 355 405 455 350 537 performance Total score 17,503 17,654 18,814 17,340 19,512 Average Score 1,167 1,177 1,254 1,156 1,301 Rank 4 3 2 5 1 149 The Uganda National Expor t Strategy 2008-2012 Continuation of B1.2 Average Product Evaluation Scores based on returns from 7 Evaluators of the NES Priority Sectors Team cassava services Cashew G. nuts Aquatic. wood sugar Cereals Pulses nuts fish Market access 980 1,892 1,692 1,440 1,120 760 920 2,140 1,360 and entry Earning 864 2,300 1,560 1,292 1,220 1,180 1,240 1,860 1,400 Capacity (value per unit) Production/ 1,160 1,880 940 1,308 640 880 840 2,200 1,612 supply capacity Relevancy to 1,120 2,252 1,292 1,400 952 1,080 1,104 2,100 1,580 Government policy Market size 768 1,755 1,170 984 750 780 660 1,335 855 (global) Value 969 1,440 1,215 1,089 600 870 915 1,395 975 addition potential Poverty focus 650 850 810 674 370 476 490 1,080 764 Job creation 550 970 640 596 322 430 520 970 706 Market trends 370 1,100 800 570 496 480 516 790 570 Food security 390 293 308 321 98 185 230 602 420 Gender 245 370 250 275 90 155 165 430 320 balance Niche markets 243 426 368 330 258 215 157 360 225 Environmental 275 400 365 240 246 260 168 395 230 impact Natural 270 325 405 306 293 275 180 477 292 resource component Current 115 355 195 197 171 190 202 385 272 performance Total score 8,969 16,608 12,010 11,022 7,626 8,216 8,307 16,519 11,581 Average 598 1,107 801 735 508 548 554 1,101 772 Score Rank 6 7 150 The Uganda National Expor t Strategy 2008-2012 B1.3 SECTOR EVALUATION SUMMARISED Product Sector Ranking Comment Fish 1 Okay and in harmony with CICs and DTIS sectors Coffee 2 Okay and in harmony with CICs and DTIS sectors Tea 3 Okay and in harmony with CICs and DTIS sectors Cotton, textiles and garments 4 Okay and in harmony with CICs and DTIS sectors Horticulture 5 Okay and important for furthering diversification Services (Education & Tourism) 6 Okay and partly in harmony with CICs and DTIS sectors Honey 7 Okay and important for furthering diversification and integrated in Natural ingredients sector Diary 8 Important for furthering export diversification Flowers 9 Okay and in harmony with CICs and DTIS sectors Cereals, oil seeds & Pulses 10 Important for furthering export diversification Special comments on some sectors. 1. Natural Ingredients Though evaluated low, UEPB chose to include the sector because of the ongoing intervention by UNCTAD to uplift the sector under Biotrade initiatives. World issues of sustainable use of the enviroment also prompted key interest in the sector. The sub-sector of honey that was ranked high has been integrated in this sector. 2. Handicrafts Though not evaluated by the priority sector selection committee, the sector has an Export Strat- egy that was developed by UEPB in 2005. As a result, it has attracted support from interna- tional development partners particularly JICA. It is also considered important for engendering the NES considering that many rural women groups are active in this sector. The sector also has a strong relationship with the country’s culture and the tourism sector. 3. Manufacturing sector Though not subjected to the evaluation process above, NES considers it an important sector. For this reason almost all the sectors have a value addition component specifically relating to processing. It is also important to point out that the sector is leading in regional markets with regard to the export of value added products which are important for furthering Uganda’s industrialisation goals. 151 The Uganda National Expor t Strategy 2008-2012 B2.0 Formal Goods Exports –Volume and Value 2006-2006 UGANDA: EXPORT PERFORMANCE BY VOLUME AND VALUE (US$ ‘000) - 2002 - 2006 Commodity Unit 2002 2003 2004 2005 2006 Traditional Export Crops Vol Value Vol Value Vol Value Vol Value Vol Value Coffee Tonne 201,591 96,626 146,299 100,233 159,983 124,237 142,513 172,942 126,887 189,830 Cotton Tonne 12,322 9,519 16,762 17,755 29,293 42,758 30,403 28,821 18,480 20,474 Tea Tonne 30,400 31,293 36,669 38,314 36,874 37,258 36,532 34,274 30,584 50,873 Tobacco Tonne 23,266 45,262 24,669 43,042 27,843 40,702 23,730 31,486 15,794 26,964 Non-Traditional Exports Maize Tonne 59,642 10,609 60,298 13,724 90,576 17,896 92,794 21,261 115,259 24,114 Beans and other Legumes Tonne 10,753 3,284 18,070 5,235 26,233 8,968 28,332 8,693 27,087 8,162 Fish and Fish products Tonne 25,525 87,945 26,422 88,113 31,808 103,309 39,201 142,691 36,461 145,837 Cattle hides Tonne 20,049 9,810 18,565 4,925 18,502 5,409 25,349 7,064 22,214 8,032 Sesame seeds Tonne 1,380 510 4,108 2,183 4,283 2,788 7,412 4,779 7,568 4,547 Soya beans Tonne 499 74 592 87 468 118 574 126 3,048 609 Soap Tonne 7,594 3,434 11,402 5,553 16,281 7,708 17,072 7,194 11,681 5,530 Electric Current 000 Kwh 264,685 15,645 217,486 13,778 193,104 12,075 62,577 4,465 53,019 4,855 Cocoa beans Tonne 1,626 2,023 4,328 7,001 5,155 6,801 7,600 9,638 7,632 10,016 Cobalt Tonne 8,748 7,032 - 0 438 11,548 582 14,320 861 18,063 Hoes and hand tools ‘000 169 385 407 580 180 348 466 1,159 68 518 Pepper Tonne 128 111 103 176 394 368 817 594 218 189 Vanilla Tonne 63 6,898 91 13,546 71 6,120 234 6,135 195 4,808 Live animals ‘000 24 80 8 61 37 130 12 29 0 28 Fruits Tonne 708 670 425 436 1,297 917 3,061 1,158 7,821 1,167 Groundnuts Tonne 45 75 4 7 1 1 22 23 63 8 Bananas Tonne 1,561 225 1,646 110 1,792 850 2,196 806 494 127 Roses and Cut flowers Tonne 4,504 17,828 5,636 22,080 6,092 26,424 6,162 24,128 4,989 20,987 Ginger Tonne 28 462 13 15 14 - 8 78 4 12 Gold and gold compounds Kg. 7,117 60,342 3,478 38,446 5,465 61,233 4,241 73,072 6,937 122,579 Other Precious Compounds Kg. 0 0 22 13,612 0 4,713 2 6 20 117 Manufactures/Other Products Kg. - 46,714 - 77,193 - 114,507 - 183,935 - 257,345 Petroleum products Litre 25,090 10,749 63,645 27,901 65,277 27,904 74,380 32,015 81,977 36,401 Traditional export 182,700 199,344 244,955 267,522 288,142 Non-traditional exports 284,905 334,762 420,134 545,335 674,051 Total 152 Source: Uganda Bureau of Statistics 467,605 534,106 665,090 812,857 962,193 The Uganda National Expor t Strategy 2008-2012 B3.0 Number of export Companies by product 2004-2005 Sectors 2004 2005 Number of Destinations Number of Destinations Companies Companies Fish and Fish Products 34 59 46 50 Floriculture 32 21 36 32 Cereals and Products 54 26 70 15 Horticulture (fruits and 75 32 93 29 vegetables) Cocoa and cocoa 8 7 products Spices 47 20 61 22 Oil seeds 30 20 30 16 Mining 4 6 8 20 Gold 5 3 12 4 Animal and animal 65 34 51 32 products TOTAL 354 414 Source: Analysis done by UEPB with data from Uganda Bureau of Statistics 153 The Uganda National Expor t Strategy 2008-2012 B4.0 Illustrative Standards and Requirements for selected products Product Group Standards, Regulations or Private Protocols Related to: Food Safety Animal/Plant Quality or Environment Social Health Technical Attributes Fresh Fruits and Pesticide residue Plant material Quality Pesticide use Monitoring of Vegetables limits quarantine grades restrictions child labour Microbiological Pest risk analysis General Water/soil Occupational standards Fumigation labelling contamination health Traceability requirements requirements regulations standards requirement Phyto-sanitary Packaging Codes for Hygiene certification. standards organic requirement practices/ certification Fish and Fish Microbiological Restrictions on Quality Fish catch - Products and foreign antibiotic use in grades restrictions matter standards aquaculture Labeling re- Environmental Pesticide residue Animal health quirement management limits certificates Packaging certification HACCP checks standard Qual- ity Manage- ment. Certifi- cation Live Animals Veterinary drug Disease-free Quality Codes for Animal and Meat residue limits areas grades organic welfare Products Microbiological Disease Labelling practices and monitoring standards surveillance requirements certification Restrictions on Packaging Regulations veterinary drugs standards on animal Animal waste effluent traceability Hides and Skins - Animal health Quality Water effluent - status for raw attributes regulations hides/skins Chemical use restrictions Honey Pesticide + Pesticide and Quality Codes for antibiotic residue antibiotic grades organic limits surveillance General practices and Microbiological Antibiotic use labelling certification standards restrictions requirements Antibiotic use Hygiene Export Packaging restrictions requirement certificates standards GMP conformity 154 The Uganda National Expor t Strategy 2008-2012 Continuation of B4.0 AIllustrative Standards and Requirements for selected products Product Group Standards, Regulations or Private Protocols Related to: Food Safety Animal/Plant Quality or Environment Social Health Technical Attributes Spices Limits on Fumigation Quality Codes for - Pesticide residues requirements and grades organic + mycotoxins restrictions Consumer practices and Microbiological pack certification standards labelling requirements Packaging standards Cereals, Microbiological Fumigation Quality Bio-safety/ - Oilseeds, and standards requirements or grades GMO Animal Feed Limits on restrictions GMO regulations Pesticide residues labelling Codes for + Mycotoxins Restriction on organic animal feed practices and ingredients certification Nutritional labels Cut Flowers - Plant material Quality Pesticide use Monitoring of quarantine attributes restrictions child labour, Phyto-sanitary Packaging Regulations Occupational certification standards on water/soil health stand. Pest risk analysis contamination Fair Trade needs provisions Fumigation requirement Coffee, Tea, Microbiological Fumigation Quality Codes for Monitoring of Cocoa standards requirements attributes organic child labor Pesticide residue Packaging practices and Fair Trade limits standards certification provisions Biodiversity code Cotton Pesticide residue GMO variety Quality Codes for Occupational limits in cotton approval attributes organic health seed oil practices standards Restrictions on pesticide use 155 The Uganda National Expor t Strategy 2008-2012 B5.0 List of NES design participants PRIVATE SECTOR DONOR GROUP NAME ORGANISATION Maria Selin Embassy of Sweden Peter Rhode GTZ – Sida FSD Anne Margrethe Tingleff Danida Adrian Stone DFID Uganda Steven Baguma Embassy of Austria Mary Mabweijano Embassy of Norway Céline Prud´homme European Commission Estella Aryada European Commission Ravi Ruparel World Bank Rachel Kaggwa Sebudde World Bank Marieke Jansen Embassy of Netherlands Tyge Korsgaard Danida DISTRICT REPRESENTATIVES Odara Oryem C. NAADS Coordinator, Gulu Kitara McMot Q.S Vice C/man, LC5 Gulu Adea Nelson Adar Speaker, Lira Francis Okello District Planner, Lira for CAO Opio Bunga Chairman, Apac Goduzu Peter Owiny Mayor, Lira Municipal Mugeni Milly News Reporter, Radio Lira Wabudi Albert D/CAO, Busia Wakapisi Fred Production Officer, Busia Esos Opolot DCO, Tororo Malowa Charles For C/Person LC5, Busia Ojamuge Norman DCO, Soroti Okwi Ekwiit B. D/DAO, Kapchorwa Chelangat Francis LC5 Kapchorwa Dr. Joel F. Okalany Head Prod. & Mkting, Soroti Atuhaire Elijah Vice Chair Person, Ntungamo Museuta Agantore ACAO, Mbarara Mbamanya Hamu ACAO, Bushenyi Byensi Expedito Chairperson, Kisoro Nyakaana Richard Secretary, Kabarole Nalubowa Rose Chairman, Rakai Vincent Mujuni Chairman, Mbarara Kalyesubula F. CAO, Rakai Karyaija Benon Vicechairman, Bushenyi Mugenyi Alfred Ntungamo Osoto Joseph Opio District Speaker, Soroti Osuna Emmanuel District C/Person, Tororo Wandwasi Robert For LC5, Mbale Mwambu Magdalene CPO, Mbale Ndagire Juliet Open Gate Radio 103.2 Muwanga Gaster DCO, Nakasongola Mufumbira Paul DAO, Jinja 156 The Uganda National Expor t Strategy 2008-2012 Ddansa Joel Asst. CAO, Masaka Musika Annet For LC5 C/Person, Jinja Kwizera M. DVO, Livestock scientist, K’la Namubiru Sarah DAO, Luwero Ssempa Stephen For LC5, C/Person Luweero Ministers and Members of Parliament Hon. Jannat B Mukwaya Minister Tourism, Trade and Industry Hon. Ggagawala N. W. Minister of State for Trade Hon. Kawanga J.B. Parliamentary Committee on Trade Hon. Steven Mondo Parliamentary Committee on Trade Hon. Ruth Kavuma Parliamentary Committee on Trade Hon. Maj Gen Oketa Parliamentary Committee on Trade Hon. Ekemu Charles Parliamentary Committee on Trade Hon. Ahabwe Perez Parliamentary Committee on Trade Hon. Obwa Ogwal B. Parliamentary Committee on Trade Hon. Angiro Gutomoi Parliamentary Committee on Trade Hon. Rugyendo S. Parliamentary Committee on Trade Hon Stephen Tadhobys Parliamentary Committee on Trade Hon. Toolit Simon Parliamentary Committee on Trade Hon. Tindamanyire K National Economy Committee Hon. Alhaj Kaddunabbi National Economy Committee Hon. Okecho W. Parliamentary Committee, Budget and Finance Hon. Oduman Okello Parliamentary Committee, Budget and Finance Hon. Drawa Rose Parliamentary Committee, Budget and Finance Hon. Banyenzaki H. Parliamentary Committee, Budget and Finance Hon. Bintu Jalia L.N. Parliamentary Committee, Equal Opportunities Hon. Ssentogo T.N. Parliamentary Committee, Gender, Labour & Soc. Dev’t Hon. Ekanya G. Parliamentary Committee, public accounts Hon. Deo Mugusha Parliamentary Committee, public accounts Hon. Onyango Kakoba Parliamentary Committee, Foreign Affairs Private Sector Associations and Companies Carolyn N. Nalawuk PSFU Eva Ekanya PSFU Namuwoza Charity NOGAMU Ndabarema Robert TUNADO D. Damulira Gabriel FAUEX Rosemary Mutyabule Enterprise Uganda Esther Nsubuga S. UWEAL Chebet Maikut UNFFE John Sempebwa PSFU Tumwesigye Bashir ACODE Kaddu Peter UMA Byamukama John UMA Ronald Naluwairo ACODE Ovia Katiti Matovu UFPEA Annete Ssemuwemba PSFU Stanley Mulumba Board Member, UEPB John Kavuma FAUEX Augustine Mwendya Farmers Federation 157 The Uganda National Expor t Strategy 2008-2012 Kepher K Kateu Chemiphar (U) Ltd. Doreen Kansiime The E. A. Business Dorothy Nakaweesi The Daily Monitor Alice Kiingi The New Vision Stephen Mwiri WBS Television Nakyanzi Haspah D Britania Allied Ind. Ltd Bbosa Richard Biofresh (U) Ltd Juliet Musoke ED, Uganda Flower Exporters Association Naiga Sarah Uganda Flower Exporters Association Okee Stephen Nile Botanical Resource Isiko Nabongo Anold Flona Commodities Ltd Ndabarema Robert TUNADO James Arinda TUNADO Mugisha Grace Ugarose Ltd Kennedy Odera Bee Natural (U) Ltd Elisabeth Ssemwanga Semwanga Research Center James Kanyije Icemark Africa Ltd Beehamya Baker Aponye (U) Ltd Kasimbazi A. Toro-Mityana Tea Co. T.G. Munabi Uganda Tea Association Ntaki P.C. Eagle Investments Ltd Dick Kamugasha UIRI Regina Mukiri Land O’Lakes Inc Henry Lyadds Kampala International University John Bazarra Bugema University Bonifence Byamukama L. Kitandara Tours & Travel Ineke Jangenius UCOTA Helen Lubowa UCOTA Victoria Byoma Gifts A’ Curios Moses Kyayise Erimu Co. Ltd. Grace Barya UWEAL Paul Ssozi Mutongole Kubira Enterprise Ltd Lydia Namuteebi Kawacom (U) Ltd. James Muhumuza Tropical Aloe Lands Ltd. Venkatasamy Kesavamoorthi Phenix Logistics Kyomukama George Ugarose Flowers Ltd. Abubaker Luwaga Cayman Consult Ltd. Prabua Kumathe Mukwano Industries Rajesh Nair Roofings (U) Ltd Saijui Parickee Red Dot Distribution Rajiv Joshi Gaggar Sameer Agriculture Sarah Kamulindwa Uganda Tea Development Agency Public Institutions Ronald Ndawula Advocates Coalition for Development & Environment (ACODE) Deo Bitariho URA Customs Department, Rebecca Nalumu URA Deus Mubangizi UNBS Koire Y Hagya UBOS Ngoma Ngime State House Kissa Ibrahim State House 158 The Uganda National Expor t Strategy 2008-2012 John Ndyabagye Silk Association Amos Lugoloobi NPA Wamsambo Richard NPA Bosco Okello UEPB Byamugisha Benon MAAIF Rudaheranwa N. EPRC Makokhar UIRI Andrey Kahara- Kawuki MUBS Moses Mabala UEPB Ben Naturinda UEPB Richard Bakojja UEPB Saul B. Kaye NPA (ED) Robert Kimera NPA Emmanuel Mutahunga MTTI Mayanja Fred MAAIF-PMA Dr. Dick M. Kamugasha UIRI William Babigumira UEPB Juliet Nambuya UEPB Keith Muhakanizi MoFPED Silver Ojakol MTTI H.G.K. Nyakoojo UPTOP Sylvia Tereka NPA Katwesigye C. UIRI Byantwale T. Stephen MAAIF Tom Kakuba PMA Secretariat Nsubuga Emmanuel Government Chemist Lab. Dr. Godfrey Asea NARO Ssemboga Ann Rita N. UCC Robert S. Muyanja UEPB Board Chairman Bingi Susan UEPB/Biotrade Oule D.E. MTTI Ntwirenabo Juliet Poverty Alleviation Unit, Office of the President John Okumu UNBS Magara K. Cornelius MGLSD Richard Bakojja State House Esther Katuura NCRL (MOH) Florence Kata ED, UEPB Kisu Kusera Biotrade Program-UEPB Muzora Hans W. Cotton Dev. Organisation Muzira Isha Dairy Dev’t Authority Geoffrey Onen Government Chemist/UNBS Habumugisha Gratiano Uganda Revenue Authority John Sempebwa PSFU Peter Ngategize CICS/MFPED Angela Katama Private Sector Expert Dr. David Balikowa Project Manager, DDA Mrs. Rhoda P. Tumusiime MAAIF Dr. Maggie Kigozi UIA Mr. Kayondo Kalanguka MOFPED 159 The Uganda National Expor t Strategy 2008-2012 Appreciation to the NES leadership team Special thanks to the team below that coordinated and managed the entire NES process 1. Florence Kata, UEPB Executive Director who was the NES Chief Steward 2. Ben Naturinda of UEPB who was the NES National Coordinator 3. Amos Lugolobi of NPA for NES Institutional linkage and integration into National planning 4. John Sempebwa for coordinating private sector role and inputs into the NES and the international team that included: 1. Isaac Njoroge of the Commonwealth Secretariat for technical assistance 2. Owen Skae of ITC as visiting International consultant 3. Pascal Nyabuntu local consultant on Agriculture Sector issues 160 The Uganda National Expor t Strategy 2008-2012 Bibliography 1. The Marketing and Agro processing Strategy 2005, Ministry of Tourism Trade and Industry, Kampala, Uganda. 2. Competitiveness and Investment Climate Strategy 2006, Ministry of Finance Planning and Economic Development (MOFPED), Kampala, Uganda. 3. Plan for Modernization of Agriculture (PMA) 2000, Ministry of Agriculture, Animal Industry and Fisheries, Kampala, Uganda. 4. The National Trade Policy 2006, Ministry of Tourism Trade and Industry, Kampala, Uganda. 5. The Informal Cross Border Survey Report 2006, Published May 2007by Uganda National Bureau of Statistics, Kampala, Uganda. 6. Background to the Budget 2007/08, Ministry of Finance Planning and Economic Development, Kampala, Uganda. 7. The Diagnostic Trade Integrated Study of the Integrated Framework 2006, Ministry of Tourism Trade and Industry, Kampala Uganda. 8. Plan for Zonal Agricultural Production, Processing and Marketing, 2004, Kampala, Uganda. 9. The Poverty Eradication Action Plan, 2004/05- 2007/08, Ministry of Finance Planning and Economic Development, Kampala, Uganda. 10. Fith PMA Annual Review, 2006, Aide Memoire and Report, Kampala Uganda 11. Jorg Wiergratz and Pascal Nyabuntu; Trade Policy and Poverty in Uganda 2006, ACGE Analysis, UPTOP Publications, Kampala, Uganda. 12. Competing and Learning in Global Value Chains, UPTOP Publications, Kampala, Uganda. 13. Production Response of Uganda’s Key Agricultural Commodities to Trade Liberalization by Premium Consulting Ltd, UPTOP Publications, Kampala Uganda, 2006 14. 2006/07 Ministerial Policy Statement of the Ministry of Tourism Trade and Industry, Kampala, Uganda. 15. The 2006 Least Developed Countries Report of the UN, prepared by the UNCTAD Secretariat, Geneva, Switzerland. 16. Uganda Service Exports Strategy 2005, UEPB Publication, Kampala, Uganda. 17. The Handicrafts Export Development Strategy 2005, UEPB Publication, Kampala, Uganda. 18. The Strategic Exports Program 2001-2004, MAAIF, Kampala, Uganda. 19. Sector Assessment Report for the Natural Ingredients for Cosmetics and Pharmaceuticals, 2004, A Publication of the Uganda Bio-trade Proramme. 20. Export Strategy Design - Guidlines for Strategy makers, 2003, ITC Executive Forum, Geneva, Switzerland 21. The Fish Newsletter, first edition vol.1 January –April 2007, UFPEA, Kampala Uganda 2007 22. The Fish Newsletter, second edition vol.2 May –August 2007, UFPEA, Kampala Uganda 2007 23. Bank of Uganda Annual Report 2005/06, Kampala, Uganda. 161 The Uganda National Expor t Strategy 2008-2012 National Export Strategy – Gender Dimension 1 National Export Strategy Gender Dimension Uganda Export Promotion Board The Republic of Uganda Uganda Export Promotion Board National Export Strategy – Gender Dimension i The Republic of Uganda Foreword I t is our pleasure to present to you the Gender Dimensions of the National Export Strategy. For us to realise the full potential of our country, gender issues which are at play in economic, social, political and other spheres need to be addressed. Many national and international initiatives have been undertaken to address gender-related issues in society, but very little has been done to exploit the opportunities that women and men jointly contribute to national development, when proper gender-sensitive trade related practices are embraced. As a result, many gender gaps still exist, inter alia, in export trade. As Government, we aim at achieving the Millennium Development Goal (MDG) Number 3, which underscores the need to reduce gender disparity in education, and in access and control of productive resources; reduced discrimination and violence against women and to raise women’s participation in leadership and decision making positions. The National Development Plan which is being developed to replace the Poverty Eradication Action Plan (PEAP) is critically looking at bringing gender issues into the limelight of the national development agenda. Other policy instruments such as the National Gender Policy and the National Trade and Industrialisation Policy  also  clearly  define  the  importance  of  harnessing  gender  aspects  into  both   social and economic activities of the nation. In line with these, the National Export Strategy sets a centre stage for the development of Uganda’s export trade sector. Therefore, engendering the NES is a worthwhile, relevant, and commendable initiative. As Uganda targets to achieve annual US$5 billion export revenue and a per capita export ratio of US$200 on both goods and services, it is clear that this will be attained only if the production activity and potential of both men and women is recognised, harnessed and utilised. It is certain that the export sector can play a fundamental role in transforming our country when targeted interventions are made in shaping the minds and actions of Ugandans. There will also be need to shift from producing goods at primary level to high value products and services which offer better terms of trade and cascade value down to the communities. This document therefore highlights issues that the NES needs to address to achieve its objectives which are elaborately stated on page 3 of the NES document. The overall aim of engendering the NES is to ensure that it fully accommodates both genders so that it is a catalyst for greater and better social and economic development. This will be achieved by pursuing the following specific  objectives: ii National Export Strategy – Gender Dimension • To unlock the untapped potential of Ugandan women and increase their contribution in export trade. This will in turn contribute to the economic and social transformation of Uganda. • To add greater value to the current NES initiatives and yield competitiveness and developmental benefits  beyond  the  set  targets. • To facilitate the achievement of the Millennium Development Goals which emphasize gender equality, in particular MDG Number 3. • To create gender sensitive export support policies and to improve and strengthen the capacity of export support institutions to provide relevant, targeted support services to women engaged in the export sector. We appreciate the efforts of both the public and private sectors in working together to formulate the Strategy which will form the basis for the implementation of the NES. The Government of Uganda will render its full support to implement the recommendations of the Strategy. We are also convinced that the lead implementing agency, the Uganda Export Promotion Board (UEPB), has sufficient  momentum  and  thrust  for  implementing  the  Strategy.     We thank the development partners who continue to support trade for development and request them to lend all the necessary support towards effective implementation of the Engendered Export Strategy.    We  particularly  wish  to  thank  the  International  Trade  Centre  (ITC)  for  providing  financial   and technical assistance in formulating the Strategy. We also thank the following organisations/ Institutions  for  their  technical  inputs  in  the  formulation  process  of  the  strategy:  Council  for  Economic   Empowerment of Women in Africa (CEEWA), Makerere University Gender Department, Uganda Women Entrepreneurs’ Association Ltd (UWEAL), Enterprise Uganda, Uganda Investment Authority, Private Sector Foundation Uganda (PSFU) and National Planning Authority. We now have the pleasure of endorsing and forwarding the Strategy for implementation. ............................................................................................ ..................................................................................................... Hon.  Major  General  Kahinda  Otafiire,   Hon.  Gabriel  Opio, Minister of Tourism Trade and Industry, Minister of Gender, Labour THE REPUBLIC OF UGANDA. and Social Development, THE REPUBLIC OF UGANDA. National Export Strategy – Gender Dimension iii Contents Abbreviations ........................................................................................................................................................ v Executive summary ............................................................................................................................................... vi Foreword ......................................................................................................................................................... i Introduction and rationale .............................................................................................................................. 1 Part 1 ........................................................................................................................................................... 1

1.1. The International Context ....................................................................................................... 1

1.2     The  Benefits  of  Engendering  the  National  Export  Strategy  (NES)  .......................... 1

1.3     Uganda’s  Gender  Profile:  Key  Facts  ........................................................................................... 2

1.4 Current Government Policy and Strategy in Support of Export Development 2 Part II ................................................................................................................................................................. 4 The  strategy  design:    Process  and  scope     ............................................................................................... 4

2.1     Key  Stakeholders  ................................................................................................................................... 4

2.2. Where We Want to Be - The Vision ...................................................................................... 4

2.3 The imperative of a Gender-sensitive Approach to Export Development ... 5

2.4 Where are we now? - An assessment ...................................................................................... 5

2.5 National Competitiveness and Gender Cross-cutting Issues ...................................... 6

2.5.1 Border In .................................................................................................................................................... 6

2.5.2 Border Issues ......................................................................................................................................... 6

2.5.3 Border Out ......................................................................................................................................... 7

2.5.4 Client priorities ....................................................................................................................................... 7

2.5.5 Institutional Issues ................................................................................................................................. 7 Part III .............................................................................................................................................................. 21 The way forward - The export development strategy ................................................................. 21

3.0 Future orientation and overall focus ......................................................................................... 21

3.0.1 Uganda’s Coffee export trends ..................................................................................................... 21

3.0.2 Commercial Crafts in exports ....................................................................................................... 21

3.0.3 Tourism Sector in exports ............................................................................................................... 22

3.0.4 Dairy in exports ..................................................................................................................................... 22 3.1 Prioritization of Gender-sensitive Strategic Considerations ......................................... 22

3.1.1 Coffee Sector .......................................................................................................................................... 22

3.3 Commercial Handicrafts ................................................................................................................... 30

3.4 Tourism sector ....................................................................................................................................... 36

3.5 Dairy sector .............................................................................................................................................. 42

3.6 Monitoring ................................................................................................................................................. 48 Part IV .......................................................................................................................................................... 49 Strategy management ....................................................................................................................................... 49

4.0 Structure ..................................................................................................................................................... 49

4.1 Existing Government Machinery .................................................................................................. 49

4.2 Private Sector-led Machinery ......................................................................................................... 49 Part V: .............................................................................................................................................................. 51 Resource mobilization ...................................................................................................................................... 51

5.1 Priorities ...................................................................................................................................................... 51

5.2.1 Funding Through the National Budget ...................................................................................... 51

5.2.2 Funding Through Development Partners ................................................................................. 52

5.2.3 Private Sector Funding ...................................................................................................................... 52

5.2.4 Quantum of Funding ............................................................................................................................... 52 iv National Export Strategy – Gender Dimension Annex ................................................................................................................................................................. 53 References ................................................................................................................................................................. 56 Tables Table 1: Constraints to Women’s Progress ............................................................... 8 Table 2: Strategic Priorities and Considerations .................................. 12 Table 3: Criteria for determining Sectors ................................................... 21 Table 4: Total world Imports and leading Importers ..................................... 23 Table 5: Leading World Importers of Roasted Coffee .................................. 24 Table 6: Key Considerations for the Coffee Sector .................................. 27 Table 7: Key Considerations for Commercial Crafts Sector ................. 34 Table 8: Tourist Arrivals by Purpose of Visit (000’s) .................................. 36 Table 9: Key considerations for Tourism sector .................................. 40 Table 10: Leading World Importers of Milk and Cream – 2006 ............. 42 Table 11: Leading Importers of Uganda’s Milk ........................................................ 43 Table 12: Key Considerations for the Dairy Exports ................................... 46 Value Chains

3.0.2 Current Coffee Value Chain ....................................................................................................... 25

3.2.1 Engendered Coffee Value Chain ..................................................................................... 26 3.3.2 current commercial handicrafts VCA ..................................................................... 32

3.3.3 Engendered Handicrafts Value Chains ..................................................................... 33

3.4.0 Tourism current value chain Major Attractions: ............................................................ 38

3.4.1 Engendered Tourism Sector Value Chain ..................................................................... 39

3.5.0 Current Dairy Value Chain ....................................................................................................... 44

3.5.1 Engendered Dairy Sector Value Chain ..................................................................... 45 National Export Strategy – Gender Dimension v Abbreviations BOU – Bank of Uganda CBI – Netherlands – Centre for Promotion for of Imports, Netherlands CEEWA – Centre for Economic Empowerment of Women in Africa COBATI – Community Based Tourism Initiative DDA – Dairy Development Authority EDF – European Development Fund EU – European Union GOU – Government of Uganda ICTs – Information Communication and Technology IFC – International Finance Cooperation ITC – International Trade Centre MDG – Millennium Development Goals MGLSD – Ministry of Gender, Labor and Social Development MOES – Ministry of Education and Sports MOF – Ministry of Finance MoL – Ministry of Lands MTTI – Ministry of Tourism, Trade and Industry MUBS – Makerere University Business School NAWU – National Association of Women in Uganda NES – National Export Strategy NPA – National Planning Authority PSFU – Private Sector Foundation Uganda R&D – Research and Development UCDA – Uganda Coffee Development Authority UDB – Uganda Development Bank UEPB – Uganda Export Promotion Board UNBOS – Uganda National Bureau of Statistics UNCCI – Uganda National Chamber of Commerce and Industries UNBS – Uganda National Bureau of Standards USSIA – Uganda Small Scale Industries Association UDB – Uganda Development Bank UWEAL – Uganda Women Entrepreneurs Association Limited WCO – World Customs Organisation WEF – World Economic Forum WTO – World Trade Organisation vi National Export Strategy – Gender Dimension Executive summary W ith the country’s National Export Strategy (NES) satisfactorily completed and launched in  October  2007  under  the  patronage  of  H.E.  the  President,  Yoweri  Kaguta  Museveni,   Uganda presented an appropriate and opportune case for piloting the guidelines for strategy makers to incorporate gender dimensions into national export strategies. In the late 2007,  the  International  Trade  Centre  (ITC)  finalized  its  methodology  (the  ‘gender  guidelines’)  and   complimentary material on gender sensitizing national export strategies to allow export strategy makers integrate a gender dimension into their export development efforts. Uganda was privileged to be chosen to pilot this methodology with the support of the International Trade Centre. In order to  fulfill  the  dual  objective  of  greater  competitiveness  and  lasting  socio-economic  development,  the   implementation of the NES required a gender sensitive approach to unlock the untapped potential of Ugandan women and make their participation in the export sector more effective. The process towards integrating gender into the NES took a multi-stakeholder consultative effort which included public, private, civil society actors and academia as well as development partners. Uganda Export Promotion Board (UEPB), being the premier institution in export development, led the process and worked closely with other national stakeholders and gender sensitive trade and business support networks. The Gender Strategy Team which included representatives from the NES priority sectors and cross-sectoral support services validated the processes at wider consultative sessions   with   technical   and   financial   support   from   the   International   Trade   Centre.   Collaborating   institutions provided valuable inputs to the strategy development through a highly consultative and collaborative approach that led to the selection of four sectors (coffee, tourism, commercial crafts and dairy) which will form the basis of the pilot projects. Detailed gender sensitive value chain analyses were  undertaken  and  key  cross-sectoral  issues  were  identified  and  strategies  designed  to  support  the   realization of the potential of women in these sectors. The  following  are  the  existing  cross-cutting  sector  constraints  which  were  identified  and  have  limited   women’s  participation  in  exports: • Lack of access to affordable energy • Unequal land accessibility • Unfair commercial environment • Lack  of  access  to  credit  finance • Lack of access to information • Lack of export competence among women These are some of the strategies which have been designed to address these issues at cross sector and  sector  levels:   • Expand export management and related skills • Business counseling programmes for women by concerned agencies, ministries, private sector, associations,   build   women’s   competences   in   financial   management   so   that   they   can   produce   bankable  projects  and  run  their  businesses  with  better  financial  literacy. • Continuation   of   sensitization   and   affirmative   support   towards   women   entrepreneurs   by   empowering them in business through hand holding programmes, business coaching, mentoring and training programmes The  identified  initiatives  will  be  implemented  by  various  agencies  in  line  with  the  rolling  out  of  the   NES 3-year action plan. National Export Strategy – Gender Dimension 1 Part 1 Introduction and rationale

1.1. The International Context T he issues of gender and women’s empowerment are receiving increasing attention internationally. Globally, gender equality is increasingly recognized as a key economic growth and competitiveness factor. The Millennium Development Goals (MDGs), in particular MDG 3 (reduce gender disparity in education, in access to and control of productive resources) provide a solid pillar on which to rally calls for gender empowerment. “It is indeed very likely that there is a strong and positive correlation between Africa’s economic growth and the unleashing of female talent.” Augusto Lopez-Claros, Chief Economist, World Economic Forum (WEF). Furthermore Uganda ranks 50th out of 128 countries in the World Economic Forum (WEF) Global Gender Gap Index for narrowing the gender gap, behind South Africa (20), Lesotho (26), Namibia (29), Tanzania (34) and Mozambique (43), but ahead of Malawi (87), Zimbabwe (88) and Zambia (101). Although there is limited disaggregated data by gender in economic activity and business operations in Uganda, it is generally acknowledged that women’s share in the ownership and control of productive resources is far less than men’s. Engendering of the NES, therefore, is a step in the direction of making exports work for the good of all; men and women alike. Some work needs to be done to put this goal into context relevant to gender issues and concerns of national plans such as the NES and to mobilize relevant stakeholders to ensure that the role of exports in development covers all sectors of  the  society.  There  is  also  need  for  in-depth  integration  of  specific  policies  to  ensure  that  gender   needs are clearly addressed.

1.2     The  Benefits  of  Engendering  the  National  Export  Strategy  (NES) With   gender   considerations   more   specifically   addressed   in   the   NES,   new   benefits   are   bound   to   accrue  to  the  country.  These  will  include: • Increased real income for women, higher standard of living, higher export receipts and employment  creation  with  the  associated  secondary  and  multiplier  benefits  for  family  life,  health   and education. • Creation and strengthening of reliable partnerships for poverty reduction, especially in rural areas where over 80% of the poor live. • Improved  operating  environment  with  enhanced  productivity  and  more  efficient  functioning  of   the value chain, leading to reliable supply of inputs. • Expansion of access to productive assets and economic opportunities for the marginalized groups. • Mainstreaming of women and other marginalized groups into global value chains and multilateral trading systems. 2 National Export Strategy – Gender Dimension

1.3     Uganda’s  Gender  Profile:  Key  Facts Uganda has an estimated population of 30 million people with women constituting almost 51%. There are numerous actors and institutions of relevance and substantial research has been undertaken at the micro, meso, macro and meta levels. Current evidence indicates that in Uganda the untapped potential  is  sizeable;  for  example: • Of the economically active women, 88.2% are self-employed or unpaid family workers. • Women own about 40% of private enterprises, mostly at the micro-enterprise, informal level. • About 29.5% of women in business are already exporting. Unfortunately,   cultural   influences   have   confined   women’s   role   in   development   activities   to   the   periphery.    Their  enormous  contribution  to  economic  development  is  not  proportionately  reflected   in either the income gains or ownership and control of wealth. Available statistics show that women in Uganda are employed mainly in the agricultural sector which represents 72% of all women employed; 90% of all rural women work in agriculture compared to 53% of rural men. Women are also responsible for 90% of the total food production in Uganda and 50% of cash crop production. In addition, it has been revealed that women work longer hours (12-18) a day as compared to men (8-10)1 . To make matters worse there are more women than men living on less than US$ 1 a day.2 Anecdotal evidence also indicates that more men than women are successful in credit application with women getting smaller credit amounts. Women tend to face a wide range of systemic inequalities, including constraints to accessing income earning opportunities, access to education, information and training, remuneration of effort, as well as participation in decision-making. The current Land Act provides for women land rights in terms of ownership, inheritance and acquisition. However the level of access to and control over and use of productive land is still very low with only 7% of women owning registered land.

1.4     Current  Government  Policy  and  Strategy  in  Support  of  Export   Development The law in Uganda has endeavoured to make the ground even for both men and women. For instance, the Land Act provides for women land rights in terms of ownership, inheritance and acquisition, even though  the  reality  is  that  only  7%  of  women  own  registered  land.  There  is  an  affirmative  action  in   education which has resulted in equal enrollments to primary and secondary education for boys and girls, although there is an increased dropout rate with girls. This has increased the number of female enrollment from 29.2% in 1990-91 to 45.2% in 2005-6 and led to females getting better jobs than they would ordinarily have, enabling the emergence of a cadre of women holding big management positions in both private and public companies. The country also has made concessions in political representation by setting aside vacancies for women in parliament and this has boosted their public image and contributed to better income to support their families, and greater participation in National development debates and programmes. There exists an elaborate institutional support structure in the country which can be tapped to drive a vibrant gender empowerment process comprising public, private and civil institutions. There is  even  a  fully  fledged  Ministry  of  Gender,  Labour  and  Social  Development  that  has,  among  other   things, developed a National Gender Policy. What are lacking perhaps, are coherent approaches and  strategies  to  pinpoint  the  specific  needs  of  women.  This  is  the  gap  this  process  seeks  to  fill  with   1 The Uganda Strategic Gender Assessment (National Gender Policy 2007) 2 Uganda Bureau of Standards (UBOS) National Export Strategy – Gender Dimension 3 regard to export development. Other initiatives have included studies on gender and trade as well as capacity building efforts mainly supported by development agencies. There has been recognition of gender issues in formulating government policy strategies such as the Poverty Eradication Action Plan (PEAP) 2002, which was revised in 2007. Gender-based NGOs and other institutions have been lobbying for mainstreaming of gender issues in national policies and strategies. However, the incorporation and implementation of the gender issues in trade are still in their   infancy.   Gender   issues   have   not   been   firmly   addressed   in   trade   policy   formulation   although   this could have a profound effect on women and the community at large. UEPB’s effort towards engendering  the  National  Export  Strategy  is  a  significant  milestone  in  empowering  gender  through   trade and export development. 4 National Export Strategy – Gender Dimension Part II The  strategy  design:    Process  and  scope

2.1     Key  Stakeholders With  the  coordination  of  Uganda  Export  Promotion  Board  (UEPB)  and  with  technical  and  financial   support from International Trade Centre (ITC), the participation of the following relevant stakeholders was  instrumental  and  formed  the  core  team: • Government Ministries and departments, e.g. Ministry of Tourism, Trade and Industry; Ministry of Gender, Labour and Social Development and Ministry of Education and Sports; • Civil society organizations for women, like Centre for Economic Empowerment of Women in Africa - CEEWA and Uganda Women Entrepreneurs Association Limited - UWEAL; • Academia, such as Makerere University; • The private sector and the export community from the twelve priority sectors, e.g. Federation of Uganda Employers, Private Sector Foundation and sector representatives; • Other trade development support agencies like International Trade Centre. The formulation of the engendered NES took a period of 5 months. It was launched by Hon. Janet Mukwaya, Minister of Trade, Tourism and Industries after which there was a breakfast meeting to inform the key stakeholders and request them to participate in the drafting of the position paper. A number of working retreats with sector representatives, several stakeholder meetings and a national symposium with key stakeholders to validate the draft document were held. A larger working group (the Gender Strategy Team), including representatives from the NES priority sectors and cross-sectoral support services validated the processes at wider consultative sessions. These sessions included the private sector and the export community in the NES, Federation of Uganda Employers, Private Sector Foundation and sector representatives and other trade development support agencies like Uganda Bureau of Statistics - UBOS and Uganda Industrial Research Institute - UIRI. On the basis of a consultative process, an initial gender audit and background analysis was undertaken to  determine  the  current  gender  equality  and  competitiveness  situation  and  to  confirm  the  need  for   integrating a gender dimension. Based on agreed criteria, a few NES priority sectors were selected with the objective of undertaking detailed gender sensitive value chain analyses and identifying key cross-sectoral support services to realize the potential of women in these sectors. The selection of only four of the NES priority sectors was based on resource availability. These are sectors which will  bring  out  the  entrepreneurship  potential  of  both  women  and  men.  The  chosen  sectors  include:   coffee, commercial crafts, dairy and tourism. These are expected to have the highest potential among the NES sectors to ease women’s integration into export business and move up to higher levels of the  value  chain.  The  impact  and  experience  will  nevertheless  benefit  and  be  replicable  in  the  other   sectors as well.

2.2. Where We Want to Be - The Vision The  National  Export  Strategy  for  Uganda  has  set  as  its  vision  to  be: “A dynamic and competitive export-driven economy for national prosperity and development” National Export Strategy – Gender Dimension 5 Further  to  this  vision  and  with  respect  to  gender,  the  country  aspires  to  achieve: “A dynamic and competitive export sector with more participation of women” The overall aim of engendering the NES is to ensure that it fully accommodates both genders so that it causes greater and better social and economic development. This will be achieved by pursuing the following  specific  objectives: • To unlock the untapped potential of Ugandan women, and increase their contribution in export trade to contribute to the economic and social transformation of Uganda. • To add greater value to the current NES initiatives, and yield competitiveness and developmental benefits  beyond  the  set  targets. • To facilitate the achievement of the Millennium Development Goals (MDGs) which emphasize gender e quality, in particular MDG 3 (reduce gender disparity in education, in access to and control of productive resources). • To create gender sensitive export support policies and to improve and strengthen the capacity of export support institutions to provide relevant, targeted support services to women engaged in the export sector.

2.3   The  imperative  of  a  Gender-­sensitive  Approach  to  Export         Development The full impact of the export strategy is unlikely to be totally realized without the optimum participation of both men and women in Uganda. They have enormous untapped potential which has been impeded by lack of the necessary capacities. Therefore, integrating the gender dimension into the NES is a critical value capture that will enable women to take advantage of export trade as an opportunity for economic empowerment. It will also strengthen NES and make it more effective, leading to greater delivery of socio-economic gains. The process will require changing attitudes to give more recognition to the role and contribution of women to the export sector in Uganda. To achieve good results, aligning the gender sensitive NES process with other existing national gender efforts and initiatives is critical, as well as linking organizations which have vital roles to play in the export development process.

2.4 Where are we now? - An assessment Export Performance (national and sectoral) The   export   sector   has   experienced   an   annual   growth   rate   of   about   19%   over   the   last   five   years   (2002-2007). This is a considerable recovery given the declines experienced in 1990/91 and 1996/97. Merchandise exports which had stagnated for several years before, began picking up in 2002/03, reaching US$ 910m in 2005/06 (UBOS). The sector’s non-traditional exports have grown with an upward trend and have surpassed traditional exports  as  the  dominant  export  category.  The  major  non-traditional  exports  include  fish  which  fetched   US$170m  in  2004/05  and  cut  flowers,  which  rose  six-fold  from  a  little  over  US$5m  in  1996/97  to   US$32m in 2004/05. Cereals, hides and skins, soap and coco beans, and legumes have also been part of the key non-traditional exports. The services sector where most women are grew by 13% in 2007/08 compared to 8.8% growth in 2006\07. With a total contribution of 51.5%, the services sector contributed about half of the total GDP in 2007/08. In the tourism sector, transport dominated with an increase of 18.8% in 2007/8 compared to 17.7% in 2006. 6 National Export Strategy – Gender Dimension

2.5   National  Competitiveness  and  Gender  Cross-­cutting  Issues Many factors affect export competitiveness in Uganda and these factors affect men, women and people with disabilities differently. There are some cross cutting issues that affect the performance of  the  entire  target  export  sectors.  These  include:  infrastructure,  energy,  macroeconomic  variables   (e.g. exchange rates, commercial laws), quality and standards management, export management competence,  production  and  trade  finance.  With  gender  mainstreaming  being  core  to  this  strategy,   addressing such issues from a gender perspective is of paramount importance for the success of the export sector. Even though the above issues affect men and women, the latter are worse off on account of being less mobile and also having particularly demanding obligations which are hard to delegate. Women have faced historically disadvantaging circumstances. The traditional chores they have to handle often leave them more constrained, vulnerable and with their competitiveness compromised, hence the need to look at these issues with a gender lens. The following constraints have impeded gender performance  in  the  export  sector:

2.5.1 Border In Border in issues refer to in-country capacity relating to competences, capabilities, knowledge and environment that enhance women groups in export business. Capacity and human capital development - Women’s capacity relating to capabilities, skills and  productivity  is  compromised  by: • Negative cultural attitudes and social discrimination towards women, which deny them access to vital skills and personal development. • The traditional courses and training “assigned to women” have tended to be those with lesser rewards and lacking in development of robust and core competences. • Lack of cumulative knowledge and experience translate into failure to get a good pool of women to manage big businesses and in particular exports. • Women’s multiplicity of roles leaves them with limited time for continuous training, development, and strategic networking for business insights. • Affirmative   action   in   education   is   a   recent   development;   there   are   many   women   who   have   previously been denied an opportunity to go to school.

2.5.2 Border Issues Energy - The existing energy facilities are isolated, unreliable and costly. In addition, the level of rural electrification  where  most  of  the  production  takes  place  is  still  limited  and  not  affordable  to  rural   women.    This   makes  it  difficult  for  a  woman  to  achieve  productivity  and  achieve  enhanced  value   options in the value chain. Land - Women have traditionally been excluded from land ownership and control. It is only about 7% of women who own land. This limits their ability to offer collateral and raises the cost of doing business. The existing situation does not offer incentives for women to participate in the lucrative land market in the country and thus limiting their productive investment on land. Commercial environment – In spite of the legal provisions, there is still silent discrimination against women in the regulatory and business environment. Women lack awareness and it is often difficult  for  them  to  find  time  in  the  midst  of  family  commitments  to  redress  this. National Export Strategy – Gender Dimension 7 Infrastructure – Poor infrastructure is most noticeable in rural areas. The poor rural transport, the  burden  of  obtaining  water,  firewood  and  agricultural  labor  rests  with  women.  These  impede  the   ability of women to mobilize factors of production and exploit natural resources.

2.5.3 Border Out Market access issues and entry strategies – Lack of information limits women’s participation in foreign markets. The extent to which bilateral and other trade negotiations make recognition of gender issues is small. With increasing worldwide recognition of the need to mainstream gender issues into business, there is a general lack of gender focused bias. There is limited networking to exploit regional opportunities and international buyer- seller gender interactions.

2.5.4   Client  priorities Export competence  -  Women  often  tend  to  lack  specific  knowledge  and  skills  in  export  trade  and   documentation.  This  leads  to  lack  of  confidence  to  venture  into  export  markets  and  especially  when   coupled with culture and personal attitudes which have tended to make exports a man’s domain. Enterprising women at times have to contend with resentment and hostile treatment by spouses who may view their motives suspiciously. Many women do not always see their talents as tradable skills with business potential to be harnessed. Instead they treat them as God-given attributes and suffer from a form of inertia and/or status quo. Trade information - Often compounded by low literacy levels and family commitments, women’s access to information is compromised. This affects their ability to respond to opportunities and to match products and services to buyer and market requirements. Trade   finance - Women face peculiar challenges in accessing credit facilities. They often lack collateral   to   offer   to   financial   institutions.   Further   lack   of   competence   makes   it   hard   for   them   to   prepare convincing business proposals to support applications. In addition, they are often required to seek spouse’s endorsement when applying for credit. They also tend to be more active in sectors that have traditionally been considered “un-bankable”. Quality and Standards Management issues   –   Women’s   financial   position   makes   it   difficult   for   them   to   afford   quality   and   standards   certification.   It   also   compromises   their   ability   to   acquire   appropriate technology to improve their products. There are very few women producers who have effectively integrated quality management procedures for their products, and worse still, since the producers are scattered, coordination and quality control become very hard and costly. Other support services - Access to branding, packaging and labelling as well as transport logistics often pose greater challenges to women.

2.5.5 Institutional Issues The existing trade support networks in the country have tried to build capacity of enterprises through lobbying, training and other business development programmes. However, their efforts are limited due to lack of resources, coordination and institutional capacity constraints. Some of the interventions are very costly and therefore not affordable by the women entrepreneurs. Many of the service providers are based in the city. This limits women, especially in the rural communities, to access the programmes. Furthermore, there are very few initiatives directly targeting women entrepreneurs and this has limited their participation in export trade. 8 National Export Strategy – Gender Dimension The table below depicts the current institutional arrangement in place. It shows the constraints to women’s  progress  in  export  development  as  well  as  the  impact  consequential  to  those  constraints:   Table 1: Constraints to Women’s Progress in Export Trade Development CURRENT SUPPORT PERSPECTIVE CONSTRAINTS IMPACT STRUCTURES Policy and  Ministry of Gender, Labour Gender policy has  Gender policy not Legislation and  Social  Development:   no plan of action and adequately implemented, The National Gender limited resources monitored and enforced. Policy 2007 is in place to gender mainstream Many women  Limited  specific   programmes and Activities organizations remain programmes exist for of Government. largely as advocacy empowering women at and lobbying groups. grass-root level.  National Women Council advocates for women  The Land Act of empowerment. 1998 does not adequately provide  Cultural practices still  The Land Act 1998 for spousal relation in prevail and constrain provides for increased control and consent women’s control of land. access to and control of on land matters at  Where women have land by women. household level. benefited,  these  are   Land Act does not predominantly the properly  define   elite who already have property rights and economic power. equality at household  Most of the reforms level. provided for in the Land Act of 1998 have remained unimplemented and have not improved women’s control of land. Trade Facilitation  Registrar of Companies,  Registration  Women have continued UBOS, UIA, URA, UEPB procedures do to miss out on export and the Uganda Chamber not provide for opportunities. of Commerce are in place recognition of gender to register companies specific  data.  Very few women have and names, provide been able to join export trade information, export Services provided by business. competence development, these agencies are not customs documentation, tailored  to  the  specific    There continues to be no deliberate policies to and traders’ representation. needs of women aspiring to export support women’s efforts in export due to lack of information.  It  is  difficult  to   disaggregate data and objectively measure its impact on women in business. National Export Strategy – Gender Dimension 9 CURRENT SUPPORT PERSPECTIVE CONSTRAINTS IMPACT STRUCTURES Skills and export  UEPB runs a programme  Limited resources Few women have competence on export coaching for are available for benefited  from  these   development export consultants and conducting tailored training programmes has a target to ensure training to women. especially those in rural gender sensitive capacity areas. development for export Women have limited trainers. time to attend long Fewer girls/women training programs. graduating with requisite  UWEAL and NAWOU skills. train women in Business Training programs skills and export. tend  to  be  inflexible   Most women continue and offered mainly in to do business without  Enterprise Uganda started urban settings. skills on better business the Strengthening Women management, export Entrepreneurs Program The dropout rate specific  skills  and  business   (SWEP) which is a country- of young girls is still expansion. wide initiative to support unacceptably high. women to develop their businesses to become more competitive.  Uganda Industrial Research Institute supports entrepreneurs in areas of Research and Development and quality management as well as sourcing of appropriate technologies and viable industrial production processes.  Affirmative  action  on   education has created greater opportunities for women to access education and training facilities. 10 National Export Strategy – Gender Dimension CURRENT SUPPORT PERSPECTIVE CONSTRAINTS IMPACT STRUCTURES Trade/Market UWEAL runs an Information is mainly  Limited access to Information Information resource accessible to urban information by women. centre for provision of business women and trade market information to rural women have  Many rural women women entrepreneurs. not been adequately are not able to pick reached. information in good time UWEAL runs information to utilize it effectively. sharing network program Resource constraints through an electronic (to afford  Many women remain newsletter. communication ignorant about devices and TV/ opportunities in the CEEWA opened up Tele- radios) and illiteracy export market. centres in peri-urban among rural women. areas to provide market  Women continue to be information to women in Limited information exploited in the export the agricultural sector. dissemination value chain due to lack of capacity to reach information UEPB market information rural areas where resource centre provides most women live. market information. UWEAL pilots an Access for Information project for training women to use ICTs for trade information National Export Strategy – Gender Dimension 11 CURRENT SUPPORT PERSPECTIVE CONSTRAINTS IMPACT STRUCTURES Trade Finance UWEAL runs a small loan  Banks reluctant  Whilst  loan  financing  is   scheme targeting women to lend to certain available, the uptake is producers and traders. sectors e.g. unacceptably low. agriculture and UWEAL runs an investment handicrafts.  Women businesses club and saving scheme result in slow growth and which target support to  Uganda does not expansion. women to invest and have a development expand businesses. bank which is  The mindset and mandated as a credibility of women’s PSFU runs a business special purpose potential in business development grant vehicle for lending continues to be that targets SMEs from for development stereotyped. (Attitudes which women can access purposes. are slow to change). financing.  Women lack  Women continue to lose Enterprise Uganda has collateral to offer out on lucrative export Women in Business training banks. orders of a sizeable centered on business demand due to lack of planning, access to trade  Women lack finance. finances  and  financial   business skills to management. prepare bankable project proposals. Schemes available by financial  institutions  to  lend    Women lack to women. confidence  to   approach banks for Financing of exports can loans and are often also be achieved by women required to take through registration with spouses along for the Warehouse Receipt endorsement. System.  Women and African Trade Insurance sometimes their (ATI) provides trade related affiliated  business   finance  and  insurance. organizations lack information on these International agencies like existing services. IFC and other development banks provide guaranteed  Women in rural financing  to  women   areas are so organizations. fragmented that even where a service Bank of Uganda provides exists access remains export lines of credit difficult. under the Export Credit Guarantee Scheme (ECGS)  Bank of Uganda and International agencies require sound practices in terms of proper books of accounts, credit worthy organizations and companies to access funds. 12 National Export Strategy – Gender Dimension Proposed Strategic Responses and Resources This  is  a  matrix  that  highlights  strategic  priorities  and  consideration  for  the  strategy  manager.  It  identifies  objectives,  performance  targets,  measurements   and initiatives that have to be mounted to achieve the objectives. It is the management matrix that forms the basis of the Strategy Plan. Table 2: Strategic Priorities and Considerations Lead Support Time Objective Measures Target Initiative Resources Institution Institution frame Border-In: Policy and Legislation To mainstream the Number of 50% of NES focal Promotional strategy (literature, UEPB MTTI 3 Months US$ 40,000. Uganda Gender organizations point  offices  formally   website, media, events, etc) on NES Policy (UGP) into within NES acknowledge tabling and Gender to be compiled and export sector. support of UGP in their distributed under joint championship of MGLSD and services institutions by end of Ministry of Tourism, Trade and Industry delivery year 1 and 100% by (MTTI) Minister of Gender, Labour and networks who year 2. Social Development (MGLSD) . embrace the principles and spirit of the 20% of the institutions UGP. commence formulation of their own gender policy in support of UGP by end of year 1 Land Act to be Parliamentary By next sitting of Draft legislation to adequately address Ministry of MGLSD 1 year US$ 40,000 reviewed  to  reflect   procedures. Parliament. the constraints that have been Lands (MoL) current realities. identified  i.e.  defining  property  rights  at   household level. To effect a cultural The overall The NES Scorecard The guiding principles of UGP to be Offices  of   MGLSD, MoL, On-going US$ 35.000 attitude change evaluation to incorporate OEIs visibly promoted in all levels of the the President Ministry of and to towards women indicators directly relevant to society. (School, public meetings, and Prime Education and continue and property (OEIs) as export sector by etc):  Gender  equality;  cross-cutting;   Minister. Sports (MoES), for 2 ownership rights. outlined in the end of year 1 and affirmative  action;  household  and  family   CICS, years UGP. commence reporting relations; and promotion of Gender on it. and Development (GAD) and Women in Development (WID) approaches. The CICS subcommittee which oversees NES implementation is to play its part in achieving this initiative. National Export Strategy – Gender Dimension 13 Lead Support Time Objective Measures Target Initiative Resources Institution Institution frame To enhance rural Number At least four clusters in Initiate cluster formation process with UWEAL NAADS, PSFU, 3 years US$150,000 women’s capacity of product each district of Uganda lead women enterprises and lead CEEWA, to increase clusters formed with at least 2 per women groups and associations. CICS, Local volumes of in key sectors sector of priority within governments, production with two years. NPA, MAAIF, better quality and Encourage women to engage in value UIRI. prices. Number addition and branding in order to tap of clusters into  the  growing  market  and  finally   servicing focal compliance with voluntary market export supply standards. centres. Border: Trade Facilitation To develop Gender All service providers The institutions involved with key UBOS UEPB, 2 years US$ 20,000 a system of classification in the commercial services e.g. licensing, company Chamber of gender equity environment to registration, training, funding to Commerce, measurement and establish a system introduce  gender  classification  and   URA, Registrar representation within 2 years. reporting. of Companies. To have a Length of Improvement on the Instil a customer relationship UEPB UEPB, streamlined time taken current average time management system within the service Chamber of commercial for women taken by 40%. providers. Commerce, Environment to register Registrar of 3 years business, obtain Companies, license and Establish focal points for service UIA provision in the rural areas. US$ 40,000 commence operations. Partner with the Chamber of Commerce  contact  offices  countrywide   to increase district and local authority registration of businesses for women 14 National Export Strategy – Gender Dimension Lead Support Time Objective Measures Target Initiative Resources Institution Institution frame To ensure Increase Enhancing linkages and To provide a range of appropriate PSFU, UEPB, UWEAL, 3 years US$ 30,000 that women information coordination between business development services (BDS) CEEWA, have adequate access on business registration that  are  flexible  (modular,  based  on   UEPB, information business agencies and women ability to pay, offer different modes of NAWOU, in business registration business support delivery, etc) PSFU registration, organizations, licensing and commercial justice Border In: Client Priorities - Skills and export competence development Develop and Number At least 4 clusters in Initiate cluster formation process with UEPB NPA, 3 years US$ 100,000 strengthen clusters of product each district of Uganda lead women enterprises and lead for sectors that clusters formed with at least 2 per women groups and associations UEPB, present high in sectors sector of priority in 2 potential for of Coffee, years Enterprise women to export Commercial UWEAL Uganda, crafts, Dairy sector and UWEAL, Tourism NAADS CEEWA, Number of NAWU, clusters serving as focal export MAAIF, supply centres. PSFU, CICs, Secretariat, Local Governments National Export Strategy – Gender Dimension 15 Lead Support Time Objective Measures Target Initiative Resources Institution Institution frame To enhance Number of 200 exporters trained Identify exporters for training and Enterprise UEPB the managerial women and in a year with 50% sensitize them on the importance of Uganda competitive men exporters women enhancing their managerial skills. UWEAL capability of boththat have 1 year US$ 100,000 women and men received export NPA in the export management One cluster trained per markets training. year per region MTTI Baseline study carried out in year 1, and UBOS Improved Survival rate of women thereafter annual assessment studies to PSFU profitability  and   companies in the measure the gender impact and growth performance export market over a indicators. UNCCI of export period of 3 years. companies USSIA owned by women. To improve Number of 60% of women Regularize and coordinate practical UEPB Enterprise the technical exporters involved reporting training programmes addressing export Uganda competences along that receive productivity, related issues along the value chains. the production technical profitability  and   UWEAL 2 years US$ value chain training and efficiency   the proportion BSOs 150,000 of women involved PSFU UNCCI USSIA DDA UTB UCDA SNV 16 National Export Strategy – Gender Dimension Lead Support Time Objective Measures Target Initiative Resources Institution Institution frame To build Growth in the 40% of participants Training programmes in basic business MUBS 1 year US$ 50,000 entrepreneurial number of in each training management and entrepreneurship competences women joining programme to be development. UEPB among aspiring, the export women MOES potential and sector Enterprise existing women Introduce an export trade module Uganda exporters Increase the number into the entrepreneurship syllabus in Improved and value of exports by secondary and post-secondary school UWEAL performance women by 40% curriculum targeting young girls and among existing boys. USSIA women exporters Expand export management related skills and business counselling, mentoring and attitude change programmes for women. To build capacity Number For every training, Enabling women organizations integrate UNBS UNBS, US$ 250,000 through training of quality to have a 50/50 quality management training in their of more women assurance representation for men businesses. MAAIF, and men in managers by and women UEPB 2 years export quality gender MOF, DP, management Introduce total product quality At least 20 women management programmes at all levels DDA, UCDA, Evidence of owned businesses to of the value chains with a strong sector improved be  certified  by  UNBS   regulator. UTB, USSIA product within the year standards Chemiphar, Set up common facility centers for Number of women standardized value addition and quality businesses possessing control in each region in the country, as SGS, and other relevant international replicable pilots in each sector. laboratories certificates:  GMP,  GHP,   HAACP, ISO 22000 National Export Strategy – Gender Dimension 17 Lead Support Time Objective Measures Target Initiative Resources Institution Institution frame Trade and Market Information To have an active Data bank Atleast 50% of Establish a resource person or desk UEPB MTTI 2 years US $ data bank on with up- to- business women and office  for  market  research     165,000 global product date market support organizations UBOS requirements information having access Harmonize existing information systems UNBS for easy utilization Number of Regular and instant NPA established access to current trade market information Link women producers and exporters to RISE and TRACE projects URA information systems that PSFU meet the needs At least three Enhance SMS pricing mechanism and of women to international sources subscribed to by enabling women in priority sectors UCA export receive information. women organizations UWEAL Two complimentary Enter into agreements with CEEWA information systems information dissemination media and built for women (CMIS, complimentary portals/websites to UEPB SMS Price) such as tailor information package in simple and CEEWA Telecentres usable form by women at all levels of Private the value chain. Information Service Provider 18 National Export Strategy – Gender Dimension Lead Support Time Objective Measures Target Initiative Resources Institution Institution frame To widely Number 4 training events per Establish a training calendar and UEPB MTTI, MFPED, disseminate of women year targeting 30 circulate it to clients and linking it with market information exporters women potential and existing programmes at UWEAL MTTI, BOU to reach to and women actual exporters with 2 years US$ 6 0,000 grassroots producers trade information Producer producers receiving Develop a training proposal and seek Associations information project  financing  domestically  and  from   Establish at least one international agencies (1 year) MOLE ICT centre per district Number of UWEAL ICT based Encourage the usage of ICT in information trade information, management and dissemination. USSIA management training seminars conducted for women Trade Finance To widen Diversity of At  least  3  trade  finance   Promote the use of commodity BOU UDB 3 years US $ 20,000 instruments for collateral schemes accessible to based instruments and trust amongst collateral to access instruments women cooperative society members. UWEAL financing   including group lending Women favourable to Enabling  women  to  get  certification  of   Finance Trust, women suitable warehouses and promoting the warehouse receipt systems to women Commercial associations. Banks, PSFU National Export Strategy – Gender Dimension 19 Lead Support Time Objective Measures Target Initiative Resources Institution Institution frame To create long- Exporters Development  finance   Strengthen women associations’ BOU Microfinance   2 years US $ 50,000 term export receiving long schemes available to financial  initiatives  and  village  banks  to   Ministry, financing  accessible   term  financing   women groups that lend to women borrowers. Such as to women at favourable are operational within SACCOS,  Rural  finance  schemes.   GOU terms which 2 years Commercial will allow them Banks, to fully develop Introduce and encourage commercial their businesses lending to women with no collateral. UDB, Diversity of Establish loan guarantee schemes for women groups and entrepreneurs in UEPB, credit facilities that are public and the private sector agencies. tailored to Women women run Gender groups to make formal organisations businesses presentations  to  financial  institutions   to motivate preferential packages for women exporters- demonstrating women’s potential. Support women to access credit insurance through ATI (African Trade Insurance). To increase trade Geographical At least 2 outreach Design an outreach plan focusing on BOU Microfinance   2 years finance  outreach spread of drives per district every specific  finance  needs  of  women,   Ministry, microfinance   year. providing loan capital to the sector institutions in where the potential of women has GOU US$ 150,000 the country been  identified. Commercial targeting Banks, women producers and UDB, entrepreneurs UEPB, Women organisations 20 National Export Strategy – Gender Dimension Lead Support Time Objective Measures Target Initiative Resources Institution Institution frame To enhance Number At least 50 women Capacity building and advisory services PSFU MUG, 1 year US $ capacity of women of project trained in bankable to producers and exporters. 200,000 to formulate proposals project proposal bankable project suitable for development every UEPB, proposals capitalization year. Regional workshops/training on business proposal formulation. Microfinance   Number of Ministry, producers Development of new training modules and exporters to  address  specific  financial  competency   issues. Women receiving organisations business training National Export Strategy – Gender Dimension 21 Part III The  way  forward  -­  The  export  development   strategy

3.0   Future  orientation  and  overall  focus  (gender  sensitive  weighting  of   stakeholder  perspectives) T he engendered NES will concentrate on four priority sectors which include Commercial Crafts, Coffee, Dairy products and Tourism. These sectors are deemed to have high potential to mainstream gender and vulnerable groups into export trade and were selected depending on the  following  criteria: Table 3: Criteria for determining Sectors Criteria Score (%) Sectors with contribution and relevance to national socio-economic goals, including 30 greater participation of women in the economy and exporting. Sectors where women have demonstrated high potential for entrepreneurship\ investment  but  their  capacity  is  hampered  by  many  factors  such  as  finance,   information and skills 25 Sectors experiencing high level of growth in international market, with women’s 20 participation visible in their value chains, e.g. Dairy and Tourism. Sectors with high potential of value addition and where women have capacity for 15 growth and sustainability. Sectors where production resources (competitive advantage) are readily available but 10 not equitably shared by men, women and vulnerable groups.

3.0.1   Uganda’s  Coffee  export  trends Coffee exports from Uganda largely go to Switzerland, Germany, Sudan and Singapore. Coffee exports have been growing positively for the last 5 years. This trend is partly due to the opening of the Southern Sudan market and the growing Fair Trade Market in the EU countries such as Germany. With regard to future trends, overall rising global demand for agricultural products, especially foods and beverages, exports are expected to continue growing in the foreseeable future. Uganda’s ability to tap into this growth will largely be dictated by improvement in value addition, branding, tapping into  the  growing  market  for  organic  coffee  and  finally  compliance  with  voluntary  market  standards,   such as those of Fair Trade and Global-GAPs.

3.0.2  Commercial  Crafts  in  exports Globally, the value of trade in handicrafts has increased from approximately US$ 75 billion in 1999 to about US$ 235 billion in 2005 (Indian Exim Bank, 2000 and Tribune India, 2005), representing a 213% increase in 6 years. The principal export destinations for all handicrafts in the world have been  identified  as  USA,  Germany,  France,  UK,  Japan,  Italy,  Canada  and  Netherlands  with  over  31%  of   export value in 2003-2004 being accounted for by the USA alone. Some of the main export products from Uganda are bags, hand-made dolls, baskets and wall hangings made by women artisans. 22 National Export Strategy – Gender Dimension

3.0.3  Tourism  Sector  in  exports The total annual number of visitors (citizens and foreigners) to the national parks in Uganda increased during  2007  to  about  127,000  persons,  compared  to  about  110,000,  in  2006.  This  reflects  an  increase   of 15.5%. With the new phenomena, education tourism has become one of the number one areas of foreign exchange earnings for the country. The leading tourism foreign market for Uganda is Africa (Kenya,  Rwanda  and  Tanzania)  with  74%  of  the  market  share.  Europe  (United  Kingdom,  Germany,   Netherlands, Italy, Belgium, Sweden, Denmark, France, and Norway) is the second largest market with 13% of market share. Other growing markets are USA, Canada, Asia and the Middle East.

3.0.4  Dairy  in  exports Trade in milk and other dairy products takes place mainly in the neighbouring markets with Sudan being   the   major   importer   of   Uganda’s   milk,   followed   by   DR   Congo   and   Kenya.   Sudan   presents   the highest growth rates and therefore a favourable market for Uganda’s milk exports. The world demand for milk and cream stood at US $10.7 billion in 2006 and grew by 11% between 2002 and 2006 (DDA Performance Report February 2008). Trade in volumes grew by 5% in the same period. Netherlands, Algeria, Saudi Arabia, Indonesia and Mexico are the major importing countries of milk and cream.

3.1 Prioritization of Gender-sensitive Strategic Considerations In order for strategy to be relevant, we must take into account the expectations and priorities of the   different   stakeholders.   This   unifies   stakeholders   around   a   common   vision   and   helps   them   to   identify all the key issues affecting export competitiveness and shaping development prospects. The four perspectives which have been considered here are the development perspective, competitive perspective, client perspective and institutional perspective, and these have guided us to formulate options which will improve the performance of gender in national exports.

3.1.1 Coffee Sector Coffee Beans Coffee is the most essential cash crop in Uganda, playing a major role in the livelihood of poor people in many rural areas of the country. In developing countries over 20 million households produce coffee and it is sometimes the only source of income, contributing to export earnings of more than 55%. Furthermore, The Fair Trade Foundation, 2006, noted that worldwide, about 100 million people depend on growing, processing, trading and retailing coffee for their livelihood. Therefore, in such countries, coffee is not only a source of livelihood to the farmers but also a source of foreign exchange.  There  are  two  types  of  coffee  grown  in  Uganda:  Arabica  and  Robusta  which  are  grown   in  the  ratio  of  1:  4.  Arabica  coffee  is  more  competitive  on  the  international  market  because  of  its   superior quality. However, Uganda Robusta coffee too has intrinsic quality attributes which even attract a premium on the international coffee market. Coffee global market Coffee is grown and exported by more than 50 developing countries including Uganda, but the major consumers are all industrialized countries like USA, EU and, more recently, Japan. Globally, coffee is the second major traded commodity to oil and thus plays a vital role in the balance of trade between developed and developing countries. World consumption of coffee is projected to increase by 0.4% annually. Coffee consumption in developing countries is projected to grow from 1.7 million tonnes in 1998-2000 to 1.9 million tonnes in 2010. World coffee traded volumes stood at approximately 6 million metric tonnes in 2006 with a value of US $15 billion. Trade change indices show an increase in traded volumes by 3% over the previous 4 years with increasing values by 21 % over the same period. National Export Strategy – Gender Dimension 23 Statistics for world leading importers (see Table 1) indicate positive growth trends in virtually all the top  5  importing  countries,  reflecting  a  steady  recovery  in  international  coffee  prices. Table 4:Total world Imports and leading Importers of Coffee Beans – 2006 Value Annual growth Annual growth Top 5 Quantity imported in in value in quantity Importing imported in 2006,  in  USD   between 2002- from 2002 to countries. 2006 (thousand) 2006,            (in  %) 2006,  (%) ‘World 15,040,510 21 6,393,469 3 ‘United  States  of   3,220,454 20 1,320,993 2 America ‘Germany 2,346,024 25 1,045,599 4 ‘Japan 1,021,725 18 428,302 2 ‘France 919,395 18 313,647 -5 ‘Italy 872,800 22 438,862 3 Graph 1 Source:  ITC  Trademap  2007 Uganda’s Coffee Markets and Export Trends Coffee exports from Uganda largely go to Switzerland, Germany, Sudan and Singapore (UEPB, 2007). Coffee exports have been growing positively for the last 5 years. This trend is partly due to the opening of the Southern Sudan market and the growing Fair Trade Market in the EU countries such as Germany. With regard to future trends, overall rising global demand for agricultural products especially foods and beverages, exports are expected to continue growing in the foreseeable future. Uganda’s ability to tap into this growth will largely be dictated by improvement in value addition, branding,  tapping  into  the  growing  market  for  organic  coffee  and  finally  compliance  with  voluntary   market standards such as those of Fair Trade and Global-GAPs. Roasted Coffee World traded volumes for roasted coffee in 2006 stood at 587 million metric tonnes with a value of US$ 2.9 billion. Trade change indices show an increase in traded volumes by 12% over the previous 4 years with increasing values by 24 % over the same period. Statistics for world leading importers (see Table 3) indicate positive growth trends in virtually all top 5 importing countries. The roasted coffee market  is  also  characterized  by  relatively  stable  demand  less  often  affected  by  fluctuating  prices.  It  is   also tightly controlled by leading coffee roasters. 24 National Export Strategy – Gender Dimension Table 5: Leading World Importers of Roasted Coffee Value Annual growth Annual growth Quantity imported in in value in quantity Importers imported in 2006,  in  USD   between 2002- between 2002- 2006 thousand 2006,  % 2006,  % World 2,898,944 24 587,268 12 France 446,733 28 89,761 10 Germany 269,067 31 42,390 15 Canada 268,227 22 54,559 13 United States of 232,129 15 40,325 4 America United  Kingdom 144,714 23 36,726 23 Uganda’s Export Performance Uganda’s  export  of  roasted  coffee  still  remains  insignificant  due  to  limited  efforts  on  value  addition   in the country. However, isolated efforts are visible with different companies attempting to market roasted coffee such as Rwenzori Coffee, Crane coffee with a roaster in China and Source of the Nile Coffee under Fair Trade schemes. There are, however, interesting value addition development efforts that could be supported with large scale investments. As a forecast, growth rates both in value and volumes are expected to continue for the foreseeable future and as such investments towards commercialization of coffee roasting business projects could result into substantial earnings. However, to realize this, it requires that the government continues to negotiate for preferential tariff treatment to guard against tariff escalations for exporters of value-added roasted coffees. Women in the Coffee Value Chain In the coffee sector, the role of women is profound as they offer the bulk of coffee producers and they provide all the labour in harvesting and drying. Coffee marketing and sale is done largely by men in a household. Coffee is a key cash crop at household level and men tend to protect this sector for   their   own   benefits.   Coffee   production   requires   expanse   land   and   given   the   limited   access   to   land  by  most  women,  this  sector  has  largely  remained  a  benefit  of  men.  An  interesting  observation   from several coffee importers in Europe is that cooperation with women exporters is often much appreciated. Women exporters are often very careful about the documentation, respond quickly to requests, deliver products as agreed and often listen to advice. Although most women are found at the farm level, strong women are present at all levels of the value  chain.  For  example  at  Processing:  Zigoti-  Rose  Kato,  Ugacof-  Rose  Karigirwa,  Export:  Robina   of  IBERO,  Management:  Jane  Nakandi  of  UCDA,  Roasters:  Zicafe  Rose  Kato,  Cafes:  Café  Pap  -  Jolly   Ngabirano. Key success factors In order for women to be successful in the coffee sector, they must get engaged in value addition programmes and brand their coffee in order to tap into the growing market for organic coffee and those  of  Fair  Trade.  Other  aspects  to  put  into  consideration  are: • Quality   Management:   This   ranges   from   farm   level   (soils,   fertilizers,   spacing,   weeding,   pruning,   plucking), processing (drying, sorting) to grading and packing. • Finances:  Trading  in  coffee  necessitates  availability  of  funds  at  each  level  of  the  value  chain. • Access to higher value market. • Direct link to buyers abroad • Inside knowledge of foreign markets National Export Strategy – Gender Dimension 25

3.0.2 Current Coffee Value Chain BUYING TRANSPORTER COMPANIES/ COFFEE FARMER CENTRES BROKERS ROASTER WHOLESALER RETAILER EXPORTERS (middlemen) Raw, unprocessed or semi- Hulling Roasting processed (using both dry Cleaning Brewing method and wet method) up Grading Blending to parchment Color sorting Packaging Standardization • Unsorted cherries; mainly dry semi- Pre-selecting, and de- processed (>98%) pulping, fermentation, • 3.5 million people depend on coffee for washing their livelihoods Export ready green beans Expensive and constrained marketing • Arabica (20%) mainly grown in Eastern Uganda, Robusta mainly grown in the • Middlemen solicit bulk coffee • Inadequate access to skilled labour Complex distribution channels in the EU South/Southwest (80%) from different sources to increase • Anemic supplies of standard coffee and US markets • Current production is about 2 million bags, mainly due to poor agricultural practices volumes (quality invariably falls) • Inefficient  sourcing  supply  chain   • Little price information available to Expensive and complex branding options leading to low yields • Limited number of indigenous • Smallholders planting less than an acre farmers sector players. Sector largely Growing specialty coffee segment • Yield estimate 1kg per tree and declining • Small processing plants with limited characterized by multinationals. commanding premium prices (CSF) Arabica (0.6 to 0.8 kg per tree) processing capacity (approx 20 tons • Limited incentives to roast and • High incidence of improper picking per day) pack  finished  coffee   practices (unripe cherries) Loss of about • Limited incentive to transform the • Lack of roasting infrastructure 5-10% (CSF) coffee sector • Little investment in roasting • Rudimentary production methods • Price  margins  vary  significantly,   technology • Smallholder has limited access to seedlings (CSF) depending on who incurs the • Price volatility • Typically, the farmer sells indivudually to cost of transportation to the next • Loss rate of approximately 15% buying centre processing facility - 20% due to waste because of • Associations are non existent (CSF) • Middlemen are highly speculative. defects, chalky whites, stones, etc • Cherry size is declining (variety of factors) Their  advantage  is  to  find  bulk  for   (CSF) • Coffee wilt desease severely impacted the companies to buy. • High operating costs (electricity, robusta production, forcing re-planting • Middlemen have limited control of water etc) (CSF) interventions the pricing. 26 National Export Strategy – Gender Dimension

3.2.1 Engendered Coffee Value Chain PACKAGING TRANSPORTER COMPANIES/ WHOLESALER RETAILER COFFEE FARMER BUYING CENTRES ROASTER EXPORTERS (Middlemen) Roasting Brewing Hulling Blending Cleaning CONSUMER Raw semi-processed Packing Grading (using both dry and wet Colour sorting methods) Pre-selecting, and de-pulping, Standardization Women fermentation, washing ROASTER • Improved women skills in post harvest handling (drying and sorting). Export ready green • More women as direct farm owners and coffee beans producers through cooperatives and women organizations • More women in • Women accessing skilled labor • Increased export promotion and • Better land ownership and control at household level bulking through • Improved sourcing and coffee supply chain marketing by women groups. with more women participation the commodity • Women intensively engaged in investment in • Improved  women’s  access  to  finance  to  invest  in  coffee,   • Women engagement in distribution exchange coffee roasting and processing. channels in the EU and US markets acquire land and access modern production methods (warehouse receipt • Increased branding initiatives for women (from hand -hoe to tractor) (partnerships with supermarket chains system) to ensure produced coffee and acquisition of packaging • Increased women access to seedlings and high yeilding and wholesalers). quality and supply technology. varieties. • Aggressive brand promotion in the EU and better sources • Improved modern processing and roasting • Re-established producer groups run by women (co- of  trade  finance.   technology for women. and the US by women exporters operatives) to sustain high levels of production. • Supported  certification  of  production  systems   • Emphasis is on specialty coffee (Fair • Intensifed and sustained re-planting initiatives and especially organic and Fair-Trade Coffee Trade, organic, etc.) to cater for a sensitisation of women on the coffee wilt. • Facilitated women access to market, product growing segment of organic and specialty • Accessible market and price information for farmers information  and  capital  finance.   consumers. • Increase  organically  ceritified  land • Introduce good traceability practices National Export Strategy – Gender Dimension 27 The selection of sectors for the strategy was largely based on their performance in international markets  and  the  participation  of  women  in  the  value  chain.  However  these  sectors  present  significant   gaps for effective participation of women to the higher levels of the value chain, and these gaps are taken as the key considerations that need to be addressed based on different perspectives as below. Table 6: 3.2.2 Key Considerations for the Coffee Sector Perspective Issues/Gaps Development 1. Development perspective Poverty alleviation and employment Perspective Promoting gender equality in the coffee value chain will contribute to poverty eradication especially of women who are estimated to contribute more than 60% of  production.  Developing  specific  programmes  for  them  will  be  one  of  the  avenues   of empowering and enhancing their ability to transform their capabilities by lifting their status in the value chain. Regional development About 70% of economically active women work in rural areas, especially in agricultural related activities like coffee farming. Most of the women work as unpaid workers or as domestic housewives without any pay. There is need for designing initiatives which directly address rural challenges, especially at household level where women own no land. Environmental Sustainability Women in the coffee sector work long hours and sometimes under unsafe environmental conditions with exposure to environmentally hazardous effects like pesticides.  Working  conditions  for  women  in  the  coffee  sector  include  open  fields   and dusty environments during the sorting stage. 28 National Export Strategy – Gender Dimension Perspective Issues/Gaps Competitiveness 2. Border-in gear  There are limited efforts geared towards developing women’s capacity relating Perspective to production capabilities and skills with regard to productivity, volume, quality and value addition.  Capacity  diversification  for  women  is  still  limited.  Cultural  attitudes  towards   a woman’s role are still strong with men dominating and taking decisions to trade and manage wealth on behalf of the family. This has limited women’s ability to produce new products by adding value to them.  Human capital development is another critical issue which has limited women’s participation in the sector. There is biased human resource development, social discrimination,  lack  of  self  awareness  and  self  confidence  among  the  women   forcing them to be employed in the menial jobs like picking and sorting which command small wages. 3.  Border  gear  Transport and expeditious business procedures affect women’s involvement in the business. Women producers are fragmented and individualized and the cooperative unions are dominated by men who take decisions.  Trade facilitation issues involving regulations, administrative procedure and documentation requirements affect women a lot due to their numerous tasks (production, reproduction, and community work) and technical knowledge.  The cost of doing business is sometimes too high for an ordinary woman to survive in a business environment. For instance, wet processing of coffee is expensive and needs expertise and technology which is not readily available. 4.  Border-out  gear  Market access for women is still weak due to the fact that they are fragmented and therefore lack opportunities to network since they stop at farm level.  There is limited gender sensitive efforts to cater for and promote the preparation of women to enter the coffee sector by giving them trade information and facilitating them to make initial contacts with potential buyers. National Export Strategy – Gender Dimension 29 Perspective Issues/Gaps Client 5. Sector and client priorities  Currently, at the primary level, coffee farmers are mainly women who do the Perspective actual production. At the secondary processing level, women do the hand picking to remove defects. The export level is mainly dominated by men with only one woman out of 20 exporters.  There  is  great  need  to  develop  specific  programmes  for  current  exporters  and   other potential and aspiring women as one of the avenues of empowering and enhancing their ability to engage into coffee exports. 6. Business Competency  Generally, women are more entrepreneurial than men. However, in the coffee sector,  women  have  challenges  of  confidence  and  lack  of  skills  to  negotiate  with   potential partners.  Since women are found at lower levels of the value chain, the illiteracy levels are very high. Also, centres of training/support services are very far and limited, impeding women’s chances of gaining skills. 7.  Trade  information  There is limited access to information on standards, quality management and packaging. Family burden constraints limit women’s time and resources to gain information and useful networks. 8.  Trade  finance  There  is  lack  of  trade  financing  for  women  due  to  lack  of  collateral.  Even  though   women  are  better  credit  worthy  than  men,  a  lot  of  women  are  still  financially   illiterate   and   therefore   can’t   manage   large   finances   which   are   needed   in   the   coffee sector.  Although coffee is one of the sectors which have national emphasis, there is lack of  government  support  for  specific  development  fund  for  women  entrepreneurs.   Also, women lack the competence to develop bankable projects. 9.  Quality  Management  Quality   is   one   of   the   key   success   factors   for   the   coffee   sector   ‘from   seed   to   cup’. However, due to dry processing, the coffee aroma reduces. Also, since women are the majority at the drying and sorting stage, they control the quality of the coffee; however, most of the coffee is dried on the ground, leading to contamination. There are also challenges for storage facilities at husbandry level. 10. Other support • Since, currently, women mainly stop at lower levels of the value chain within the coffee sector, issues of research and development, packaging, labelling, document handling and customs don’t affect them much. However, there is need to develop competences and provision of support to existing, aspiring and potential coffee exporters in these areas. 30 National Export Strategy – Gender Dimension Perspective Issues/Gaps Institutional 11. Strategy support network perspective  There are several institutions which directly support the coffee sector, some of which are Coffee Development Authority and East African Finer Coffee Development Association. However, there is lack of targeted support for women since they are a minority in the sector. There is also lack of institutional support to reach out to rural communities where coffee is grown. 12. Service delivery network  Numerous organizations offer business development services to build capacity in enterprises through training, counselling, mentoring and market access programmes.   However,   there   are   limited   programmes   specifically   done   for   women in the coffee sector. Another challenge is the fact that most of the providers   are   urban   based   and   therefore   the   programmes   don’t   benefit   the   rural communities where coffee is produced. Furthermore, because of limited financing,  the  women  cannot  afford  the  services.  This  has  led  to  stagnation  or   failure of their businesses.

3.3 Commercial Handicrafts Handicraft production in Uganda is predominantly a cottage industry activity engaged in by the rural youth of both genders but largely by the women folk to supplement household incomes. Women contribute over 70% of export revenues in handicrafts in Uganda and they make over 90% of handicraft producers. The village producers who are mainly women sell their wares to domestic buyers or directly to domestic users and tourists. The domestic buyers serve as market intermediaries who sell on the local markets or to exporters or trade directly on the export market. Uganda’s handicraft export trade is largely informal, marked by inconsistent and ad hoc market entry approaches and inadequate  market  distribution  networks.  Many  handicraft  exporters  have  burnt  their  fingers  while   testing the market because of the constraints at production and marketing. The sub-sector is characterized on the production side by low production levels, fragmented, unstructured, individualized production systems, inadequate supply system of raw materials, lack of specialization, inconsistent product standardization, design and quality, and inadequate design skills. At the organizational and marketing levels, the sub-sector is constrained by lack of vibrant national industry associations,  inadequate  support  for  marketing  and  promotion,  insufficient  market  information  and   dissemination, high freight charges and inadequate capitalization. The artisans have access to very little or no technical and artistic advice for product design, standardization, development and marketing. Capacity building is minimal. Handicrafts have become one of the key internationally traded goods but mainly by women entrepreneurs. Handicrafts are products produced by artisans, either completely by hand, or with the help of hand tools or even mechanical means, as long as the direct manual contribution of the artisan  remains  the  most  substantial  component  of  the  finished  product.  (UNESCO/ITC  Symposium   on  “Crafts  and  the  International  market:  Trade  and  Customs  Codification.”  Manila  1997). National Export Strategy – Gender Dimension 31 Global Markets Trade  in  handicrafts  is  classified  under  the  World  Customs  Organization  (WCO)  Harmonized  System   (HS) code 97. Globally, the value of trade in handicrafts has increased from approximately US$ 75 billion in 1999 to about US$ 235 billion in 2005 (Indian Exim Bank, 2000 and Tribune India, 2005), representing a 213% increase in 6 years. Promoting  handicraft  exports  in  Uganda  is  critical  towards  export  diversification  and  poverty  alleviation   and is very timely since world demand for handicrafts is currently valued at 235 US $ billion (est..2006) and has increased by over 213% since 2000. The   principal   export   destinations   for   all   handicrafts   in   the   world   have   been   identified   as   U.S.A.,   Germany,  France,  U.K.,  Japan,  Italy,  Canada  and  The  Netherlands  with  over  31  per  cent  of  export   value in 2003-2004 being accounted for by the U.S.A. alone. The prominent EU countries listed above together accounted for another 30 per cent of the export value. As single country destinations, U.S.A.,  Germany  and  U.K.,  among  themselves,  accounted  for  one  half  of  exports  by  value. The largest chunk of Uganda’s handicraft is sold to export markets or to tourists within Uganda because the internal demand for handicraft is limited mainly by the low purchasing power. In the export  markets,  handicrafts  were  perhaps  the  first  product  marketed  internationally  with  the  explicit   goal of increasing the income of local producers. Women in Commercial Crafts Handicraft is a sector which has proved to be favourable to most women entering the export trade due  to  being  a  field  where  culturally  women  possess  the  necessary  skills  and  at  the  same  time  capital   requirements  are  not  very  high.  Women  have  also  demonstrated  significant  level  of  entrepreneurship   and investment in handicrafts. Key Success Factors • Variety  in  production:  Gift  articles  which  vary  with  seasons,  for  example,  some  articles  are  used   for Christmas decorations. These therefore call for timely delivery of such products as there will be no market for delayed supply into the market. • There are series in production. Some products supplement each other both in terms of design, colour and function. • Availability of raw materials to sustain production. • Formation of cluster organizations to boost production and improve bargaining. • In  terms  of  quality  standards,  the  crafts  must  be  well  constructed  with  a  professional  finish,  and   with a decorative and functional appeal free from any hazards to the user. • Government  support:  To  organize  trade  fair  exhibitions  in  order  to  support  women  to  enter  new   markets. • The  uniqueness  and  possibility  of  ‘niche’  status  in  production  and  marketing. 32 National Export Strategy – Gender Dimension 3.3.2 current commercial handicrafts VCA Raw Producers Artisans,   Domestic Material Middlemen/ carvers,   Retailers & Suppliers women carpenters etc. Exporters - Harvest from nature, Activities : End products: plantations and gardens - Weave - Baskets • Consolidate products Domestic retailers: Exporters: - Processors - Carve - Textiles from producers • To act as outlets to the - fumigate - Production accessories (glue, - Paint - Mats • Transport products to domestic market - label dyes, wax, varnish, nails, clips, - Dye - Bags exporters • To sell products to - pack etc.) - Assemble - Furniture tourists, nationally and - packaging - Filletor - Dry - Jewellery internationally - export documentation - Skinner - Mould - Paintings - shipping - Trimmer - Sew - Tie & dyes - act as a link between producers • Profit  driven  and  exploit   & international markets - Packer - Glue - Batiks producers - Storage - Fire/Bake - Leather products - promote and market national • Products rendered products - Sand - Carvings uncompetitive/ - Wax - Ceramics and Pottery unprofitable • Limited feedback given to producers • Environmental/regulatory limitations • Poor harvest methods lead to • Lack of technical skills • Limited international market awareness and environmental degradation • Rudimentary production equipment competency in international marketing • Inadequate infrastructure (roads) • Fragmented production units • Lack of technical skills in packaging, labelling and • Poor harvest methods leading to • Poor quality management systems • Lack of appropriate packing wastage • Lack of standards and Research and Development infrastructure for selling points • Limited knowledge in export documentation • Rudimentary processing • Inadequate  financial  resources • Lack of proper display skills • High shipping costs equipment • Poor credit access • Insufficient  Uganda  products   • High reject rate • Packaging accessories in quantities • Limited capitalisation to support investment promotion stocked (vs neighbouring • Complicated  and  costly  certification  procedures not affordable for most SMEs • Inadequate infrastructure countries products) • Barriers  to  obtaining  export  finance • Lack of domestic suppliers for • Limited e-commerce enabling equipment • Limited availability of quality production accessories • No innovation clusters & systems Uganda products National Export Strategy – Gender Dimension 33

3.3.3 Engendered Handicrafts Value Chains Producers Professional Raw (Women Female Women Domestic Material Artisans,   Commission Retailers and Suppliers weavers) Agents\Brokers Exporters • Controlled harvests from • Growth in women artisan groups • Women  specifically   forest reserves capable of producing for the trained for the tasks • Train in better harvesting market. • Women earning methods • Women tailor- made training realistic commissions Exporters: • Establish collection centres for programmes in place to improve • Export support desk (at UEPB) women weavers and artisans women technical skills. established to cater for women needs in to overcome infrastructural • Increased use of energy and exports. constraints time saving precision tools and Retailers: • Women trained in quality standards and • Enabled women to secure equipment among women artisans • Permanent exhibition and assurance. equipment through leasing (either made locally or imported). selling centres established. • Women  group  to    attain  certification  in   schemes • Common facility centres established • Trade fairs and exhibition international standards. for value addition for women. training targeting women • Clusters formed in the handicraft sector. • Tax incentives offered for women • Women trade associations • Export  finance  scheme  established. investment in craft sector. formed. • Widespread application of ICT and • Design centres established to • Umbrella body established internet. improve innovation among women to oversee development of • Women trained in market research and in crafts through Research and sector surveillance Development. • Women producers and traders have pre-requisite access to internet. • Women clusters for craft producers established 34 National Export Strategy – Gender Dimension Table 7: 3.3.4 Key Considerations for Commercial Crafts Sector Perspective Issues/Gaps Development 1. Development perspective Perspective Poverty alleviation and employment The craft sector is one of the sectors which, when well nurtured, will lead to poverty eradication among women. Since women already have a competitive advantage in the sector,  developing  specific  programmes  for  them  will  enhance  their  competitiveness   which will bring real income to them. Regional development A lot of crafts are produced in rural areas. However, the production is fragmented and individualized, limiting proper quality and quantities. Organizing of women into clusters will lead to the development of disadvantaged rural areas as a result of improved production systems. Environmental Sustainability Currently, women who are engaged in the production of crafts work under harsh environments. There is no protection since most of the women have limited skills. Some women work with chemical dyes and paints without any protective masks or gloves and others work with harmful tools. Competitiveness 2. Border-in gear Perspective  Women’s capacity in the crafts sector is still very low with no visible efforts to support them to meet the international demand in terms of volumes and quality.  Product   diversification   for   women   is   still   limited   due   to   lack   of   value   addition   competences and exposure. Women are not aware of the latest market trends which determine size, colours and quality of the products.  A lot of women in the crafts sector do not do it as a business and therefore treat it as a mere talent or social activity which doesn’t require enhancement. There are limited efforts geared at developing women’s competence in the crafts making and exporting. 3.  Border  gear  Since most of the raw materials are procured from rural areas, the cost of transportation of products greatly affects women’s business.  Women are affected by the trade facilitation issues involving regulations, administrative procedure and documentation requirements which are laborious and complicated.  Because most women don’t own land and other property, the cost of doing business is too high due to rented premises where production processes take place and hired equipment. 4.  Border-out  gear  Women in the crafts sector are still strained on market access issues due to lack of exposure to foreign markets. Also, there is the problem of poor policies to enable access to markets.  There are still limited gender sensitive efforts to cater for and promote the preparation of women to enter international markets by giving them trade information and facilitating them to make initial contacts with potential buyers. National Export Strategy – Gender Dimension 35 Perspective Issues/Gaps Client Perspective 5. Sector and client priorities  In crafts, women contribute about 80% of handicraft exporters and production is mainly done by women from peri-urban areas. There is high potential to enable more  women  join  the  export  sector.  Some  of  the  main  crafts  are:  Basketry  products,   Beads, Bags, Wall Hangings and other decorative crafts.  There  is  however  great  need  to  improve  efficiency  by  connecting  women  groups   to international markets, organizing them into production clusters, access to information (sensitization of the women on market trends) and training women with  presentation  skills  and  self  confidence. 6. Business Competency  Women in crafts are from poor communities. This does not only reduce their confidence   but   greatly   negatively   affect   their   businesses.   Moreover,   people’s   attitude towards crafts as a low grade profession makes it even harder for more women to aspire for it. Innovation is still low with numerous groups producing similar products. 7.  Trade  information  This is one of the key constraints for women entrepreneurs in the crafts sector. Due to high illiteracy levels and family burdens, women’s access to information is limited. This affects the quality, quantity and times of production and leads to poor needs assessment to determine which crafts can easily be marketed, to whom and when. 8.  Trade  finance  Crafts  not  being  a  traditional  business,  there  is  lack  of  trade  financing  in  the  sector   since  financial  institutions  cannot  fully  understand  and  assess  business  plans.  A  lot  of  women  are  not  aware  of  other  existing  sources  of  financing  which  may  be   within their reach and may not need collateral. 9.  Quality  Management  The quality of the Uganda crafts is still poor and unstable. There are very few producers who have put quality management procedures for their products, and worse still, since the producers are scattered, coordination of production becomes very hard and costly. 10. Other support  Women in the crafts sector clearly lack support in the areas of research and development, packaging, labelling, document handling and customs. The development of such competences and provision of support to existing, aspiring and potential crafts exporters will greatly raise availability of Ugandan crafts on the international market. 36 National Export Strategy – Gender Dimension Perspective Issues/Gaps Institutional 11. Strategy support network Perspective There are no institutions which directly support the crafts sector apart from UEPB and Uganda Small Scale Industries Association (USSIA) which have provided support in areas of technology enhancement. 12. Service delivery network Numerous organizations like UWEAL offer business development services to build capacity in enterprises through training, counselling, mentoring and market access programmes.  However,  there  are  limited  programs  specifically  done  for  women  in  the   crafts sector. Another challenge is the fact that most of the providers are urban based and   therefore   the   programmes   don’t   benefit   the   rural   communities.   Furthermore,   because   of   limited   financing,   the   women   can’t   afford   the   services.   This   has   led   to   stagnation or failure of their businesses.

3.4 Tourism sector T ourism in Uganda focuses on natural and cultural resources and can provide a range of alternative economic activities in areas of a country where other commercial activities are limited. Uganda has  a  variety  of  animal  and  plant  species  with  prolific  and  attractive  populations  capable  of  creating   indelible   impressions   on   tourists.   Tourism   in   Uganda   has   developed   into   a   “green   profile”   mainly   focusing on sustainability. Leisure, Recreation and Holidays, Business and Professional, Visiting friends and relatives, and for other reasons, such as, health or religion, comprise the major opportunities of tourism in Uganda. Most visiting tourists coming into the country, especially those from Europe are predominantly seeking holiday experiences to relax and rejuvenate their minds. South Africa is the major source of visitors from African region of which 20% are seeking holiday experiences. Leading source of tourists to Uganda The  leading  tourism  foreign  market  for  Uganda  is  Africa  with  74%  of  the  market  share  where  Kenya,   Rwanda and Tanzania are the main markets. Europe is the second largest market with 13% of market share   where   United   Kingdom   leads,   followed   by   Germany,   Netherlands,   Italy,   Belgium,   Sweden,   Denmark, France, and Norway. United States of America is the third largest market with 7% of the market share focusing on United States of America and, followed by Canada. Asia with 4% is the fourth major market mainly focusing on India, China, Pakistan and Japan. Other growing markets are Middle East (1%) and Oceania (1%) focusing on Australia and New Zealand. Table 8: Tourist Arrivals by Purpose of Visit (000’s) Purpose of visit 2003 2004 2005 2006 2007 Leisure,  recreation   77 86 9 30 140 and holidays Business and 67 81 31 72 110 conference Visiting friends and 52 71 35 90 272 relatives Others 110 274 393 347 120 Total 306 512 468 539 642 Source:  Uganda  Bureau  of  Statistics  2008 National Export Strategy – Gender Dimension 37 Markets According to the World Trade Organisation (WTO), the annual average growth in outbound travel is expected to be approximately 4.1% per annum until 2020. East Asia, South Asia, Africa, the Middle East  and  the  Pacific  are  forecasted  to  record  growth  at  rates  of  over  5%,  compared  to  the  world   average of 4.1%. The more mature regions, Europe and the Americas, are anticipated to show lower than average growth rates of 3.0% and 3.9% respectively3. Long-haul travel worldwide will grow faster, at 5.4% per year during 1995-2020, than intra-regional travel, at 3.8%. Consequently, the ratio between  intra-regional  and  long-haul  travel  will  shift  from  around  82:18  in  1995  to  close  to  76:24  in   2020. Women in Tourism sector From a gender perspective, women constitute the majority of those running tour and travel services, hospitality workers and managers and creative and souvenir shops in tourism resorts. The sector has a 20% growth trend, with women leading the sector. Women’s contribution ranges from tourism products, rural women provide food and accommodation to backpackers, handicrafts to tourists, local dances and other entertainment as well as providing beauty and massage services. Key Success Factors • Influx  of  tourists  in  the  country  due  to  good  publicity. • High returns particularly from foreign tourists. • Political stability, hence attracting investment in service sectors such hotels. • Emergence of the middle class with disposal income that can be spent on leisure and recreation. • Institutional and policy framework that has to be put in place by government. • Quality service management and exceptional customer care. • Emergence of new tourist attraction products like community tourism, folklore and cultural tourism. 3 World Tourism Organization 38 National Export Strategy – Gender Dimension

3.4.0  Tourism  current  value  chain  Major  Attractions:  Scenery,  Gorillas,  Other  Wildlife,  Culture,  Lakes  and  Rivers ATTRACTIONS ACCOMMODATION INTERNATIONAL TRAVEL TOUR OPERATOR/ CARRIER AGENT TRAVEL AGENT PRODUCT & ONLINE RESERVATION HANDICRAFT TOURISM SUPPORT SERVICES SUPPLIERS SERVICES TOURIST • Tourists were about 350,000 in 2005, • Inadequate number of beds • No  SOI  certified  restaurants  on  upcountry  routes   • Uganda attracts mainly the low Fluctuating exchange rates, • Fluctuating exchange rates, Hotels not in particular and Uganda in general budget tourist (CSF) • Limited research and development, Poor graded, poor hotel services, high taxes • Limited multilingual skills, poor mechanical • Uganda has limited knowledge conservation and poaching • Poor infrastructure (roads, electricity, conditions of vehicles and bad road networks about different cultures (Japanese • Poor services/no value for money telecommunication and water in some • Need to improve and increase e-ticketing (CSF) and Chinese) • Underdevelopment of attractions (CSF) areas) (CSF) • Lack of an effective marketing strategy, Lack of • Limited use of credit cards currently approximately 10 game parks • Lack of strong accommodation providers’ unified  tourism  message  for  Uganda,  high  taxes   • Uganda lacks an international • Poor infrastructure (roads) association (CSF) for  their  businesses,  lack  of  affordable  finance,  low   country brand identity • Use of un-recyclable materials • Lack  of  affordable  finance  services number of tourists, High fuel prices, limited or risky • Poor perceptions of Uganda in • Limited  access  to  finance,  Low  tourist   • Poor hotel billing , limited marketing of use of credit cards (CSF) general numbers hotel industry in Uganda (CSF) • Very limited e-commerce (CSF) • Low awareness of the Uganda • Insecurity, Limited diversity of attractions • Limited use of credit cards • Limited skilled tour operators, tour guides (CSF) tourism product. • Limited information about Uganda’s • Reliance on imported supplies (packed food, • Uncompetitive pricing practices, low cooperation • Limited international carriers in products worldwide (CSF) building materials) among tour operators (CSF) number • Wildlife numbers (big game, rhinos are no • Lack of standard unit of sale for raw foods • Licensing done by KCC and MTTI (duplication of • No  Ugandan  airline  flag  carrier   more) continued to decline in the 1970s (heaps rather than kgs etc.) (CSF) roles), introducing unwanted pocket tour operators (CSF) and 1980s. Only recently do we see a slight • Poor waste management by local • Limited cooperation with Kenya and Tanzania on • Insufficient  publicity  of  Visa   increase (CSF). governments (adverse effects on sanitation) pricing acquisition process • Limited range of cultural products (art and (CSF) • Limited cooperation with Kenya and Tanzania on • High air taxes handicrafts) • Rampant Malaria and other sicknesses trans-boundary tourism • Insecurity • Limited hunting permits and legalized • Lack of an early warning system for safety • Poor tourism guiding services.(CSF) companies to conduct hunting safaris assurance for tourists (MoH) • Poor public transport upcountry, low number of (adversely affected by limited numbers of travellers, insecurity threat, Seasonality of tourists wild game) National Export Strategy – Gender Dimension 39

3.4.1 Engendered Tourism Sector Value Chain ATTRACTIONS ACCOMMODATION TOUR OPERATOR/TRAVEL AGENT PRODUCT and TOURISM SUPPORT HANDICRAFT SERVICES SUPPLIERS • Increased women participation in tour • Increased employment opportunities of women to senior • Better  access  to  business  finance  affordable  to   guiding. levels in hotel and hospitality women • Increased community tourism projects • Increased number of women trained in hotel services • Increased e-commerce facilities and practices manned by women • Uganda’s hotel industry aggressively marketed • Intensive training of skilled tour operators and tour • Integration of tourism attraction with cultural • Growth of women investors in the tourism facilities , guides with more women participation activities that are performed by women especially hotels and tour services • Improved public transport to upcountry tourist • Enhanced training of women in management areas to tap into community tourism where more of tourism product women take part. 40 National Export Strategy – Gender Dimension Table 9: 3. 4.2 Key considerations for Tourism sector Perspective Issues/Gaps Development 1. Development Perspective Perspective Poverty alleviation and employment Tourism is one of the key sectors through which poverty eradication among women can be achieved. The tourism sector is so diverse, consisting of many areas in which women can be engaged as tour operators or employees. Regional development About 60% of tourism activities and businesses are in rural areas, for instance, national parks and game reserves. Rural people act as guides for tourists, provide them with accommodation, security, food, entertainment and sell to them souvenirs to take back home. Environmental Sustainability There are no major environmental threats for women in the tourism sector apart from effects of global warming e.g. change of weather patterns. Competitiveness 2. Border-in gear Perspective  There are limited efforts to developing women’s capacity and skills geared at raising them higher into the value chain.  Innovation of the value and variety of tourism activity is still a challenge with all operators offering the same services. This may be attributed to lack of product development initiatives, lack of market research and weak predisposition towards Research and Development in Uganda.  Human capital development is another critical issue which has limited women’s participation in the sector. There is biased human resource development, social discrimination,  lack  of  self  awareness  and  self  confidence  among  the  women   leading them to be employed as waitresses, cabin crew and as cleaners who command small wages. There is also inadequate tourism training in general with the centres of training\support services being very far and limited. 3.  Border  gear  Trade facilitation issues involving regulations, administrative procedure and documentation requirements are not gender sensitive and therefore affect women’s businesses.  The cost of doing business is too high for an ordinary woman, for instance, to install  internet,  purchase  computers  or  own  a  fleet  of  vehicles. 4.  Border-out  gear  Market access for women in the tourism sector is high. However, there is need for more innovation and network as a result of participation in international fairs which will expose Uganda’s potential as a tourist destination.  The government, ministry of tourism trade and industries and other relevant institutions have not prioritized tourism in their budgets and planning. This has led  to  limited  tourist  inflow  into  the  country  and  has  increased  the  cost  of  doing   business for individual entrepreneurs who have gone out to market Uganda on their own. National Export Strategy – Gender Dimension 41 Perspective Issues/Gaps Client 5. Sector and client priorities Perspective  The tourism sector is one of the fastest growing sectors with 20% growth trend. Women are the leading entrepreneurs in the sector. They are mainly found in tour and travel – issuing tickets, customer service, in beauty and massage parlours and serving as waitresses. Women dominate jobs but are paid  low  wages,  while  men  in  the  field  earn  much  more. 6. Business Competency  Most of the women in tourism are doing very well. However, they have a challenge of marketing their services. They also lack skills to negotiate with potential partners, lack of information about trends and mainly have family burdens which constrain their time and resources to gain new skills and they work long hours. 7.  Trade  Information  Women in the sector generally lack information about tourist seasonal timings, numbers and needs. This hinders their planning and therefore affects their cash flows. 8.  Trade  Finance  There  is  lack  of  trade  financing  for  women  due  to  high  interest  rates  and  lack  of   collateral.  Furthermore,  a  lot  of  women  are  still  financially  illiterate  and  therefore   can’t  manage  large  finances  which  are  needed  in  the  tourism  sector.  Some tour activities necessitate high capital base and this has limited women’s participation in areas like hotels and travel companies. 9.  Quality  Management  Being a service industry, quality management and consistence are still a major challenge. For instance, there is evidence of a number of businesses thriving for years due to excellent services but collapse due to poor food, limited quality, poor  customer  service  and  inefficient  workers. 10. Other Support  Although some entrepreneurs have got support in areas of security training, community tourism and international marketing, there is still need for targeted support from the relevant institutions to further support the sector. 42 National Export Strategy – Gender Dimension Perspective Issues/Gaps Institutional 11. Strategy Support Network  There are some institutions which directly support the tourism sector like Ministry of Tourism, Trade and Industries, Uganda Wildlife Authority and Uganda perspective Tourism Board. However, most of the support is limited and doesn’t reach the disadvantaged regions where most tourism activities are found. 12. Service Delivery Network  Despite there being various organizations offering business development services to   build   capacity   in   enterprises,   there   are   no   specific   programs   targeting   the   tourism sector. What is offered is not only generic and prescriptive but also very expensive for an ordinary woman entrepreneur.

3.5 Dairy sector Global Market T he world demand for milk and other dairy products stood at US $10.7 billion in 2006 and grew by 11% between 2002 and 2006. Trade in volumes grew by 5% in the same period. The major markets for milk and other dairy products are Netherlands, Algeria, Saudi Arabia, Indonesia and Mexico. Global trade in the medium term is forecast to continue to rise mainly due to increasing demand for food. However, many of the major consuming countries have well developed dairy industries, very often with stringent quality and food safety regimes. These are likely to continue to occasion  market  entry  difficulties.  Market  indices  show  positive  trends  in  all  the  major  markets.  The   table below illustrates the world leading importers of milk and other dairy products. Table 10: Leading World Importers of Milk and Cream – 2006 Value Annual growth Quantity Annual growth imported in Importers in value 2002- imported in in quantity 2006,  in  USD   2006,  % 2006 2002-2006,  % thousand ‘World 10,781,020 11 5,090,491 5 ‘Netherlands 849,931 2 449,166 12 ‘Algeria 640,217 12 249,976 3 ‘Saudi  Arabia 502,147 17 195,903 14 ‘Indonesia 402,360 28 175,084 17 ‘Mexico 393,949 12 187,723 2 Uganda’s Performance Trade in milk and other dairy products takes place mainly in the neighborhood markets with Sudan being  the  major  importer  of  Uganda’s  milk,  followed  by  DR  Congo  and  Kenya.  Sudan  presents  the   highest growth rates and therefore a favourable market for Uganda’s milk exports as illustrated in table 54 below. National Export Strategy – Gender Dimension 43 Table 11: Leading Importers of Uganda’s Milk and Other Dairy Products Value imported Annual growth Exported Annual growth Importers in  2006,  in  USD   in value 2002- Quantity in in Volume thousand 2006,  % 2006 2002-2006,  % ‘World 87 9 47 10 ‘Sudan 40 120 13 - ‘Democratic   Republic of the 34 - 13 - Congo ‘Kenya 12 - 21 - Dairy Sector Performance The dairy sector has continued to grow at an average rate of 8-10% per annum over the last 10 years. The steady growth is attributed to the favorable macroeconomic environment, policy and institutional reforms  as  well  as  specific  interventions  by  government  to  promote  development  of  the  sector.  The   livestock sub-sector contributes 13.1% to the Agricultural Gross Domestic Product (GDP) and 4.2% to the National GDP (MFPED, 2007). The dairy industry employs many people that are involved in various economic activities such as milk production, collection, transportation, processing, distribution and marketing as well as provision of inputs and support services. There is no up-to-date statistics regarding the number of people involved in dairy value addition and marketing. The total national milk production has been increasing steadily over the last two decades, from approximately 395 million litres in 1986 to an estimated 1.5 billion litres per year in 2007 due to better farming methods and importation of exotic cattle which give big milk quantities. The infrastructure for rural milk collection is not well developed in most parts of the country. There are 24 insulated milk transport tankers dedicated to delivering milk from the farmers’ cooperative unions and societies to the processing plants with a total capacity of 253,700 litres. There are thirteen operational milk processing plants and mini dairies with a total of 32.88 million litres of fresh milk processed in 2007. There are also many micro-/small-scale processors of value added products particularly yoghurt, ice cream, sour butter, ghee and cheese. Some companies like Sameer Agriculture and Livestock have already registered remarkable progress in export of powdered milk and other Dairy products. Institutional Support Dairy Development Authority organised dairy farmers into groups, associations, cooperative societies and unions from the grass-root to national level. Dairy farmer organizations are playing a major role in bulking, transportation and marketing of milk. They also serve as focal points for delivery of extension services as well as implementation of development and capacity building programs. Key Success Factors • Exploiting of the existing regional markets and investing in modern technology. • Improvement in milk handling practices to guard against market entry challenges on account of inferior quality standards. • Value addition into powdered milk, yoghurt, cheese and chocolates among others, • Establishment of new dairy processing plants with big capacities to handle orders. • Joint ventures in dairy processing and marketing. • Dairy support services along the dairy value chain. • Good cattle breeding to ensure large milk quantities. • It is one of the priority sectors under the Prosperity for all Programme. 44 National Export Strategy – Gender Dimension

3.5.0 Current Dairy Value Chain PRODUCT & HANDICRAFT SUPPLIERS Input suppliers and extension Export Market service providers UHT,  Cheese Major  Processor  (9) Cooperative Yoghourt,  Ghee,  Pasteurized   12% milk, Dairy Butter,  ice-creams,  UHT,  etc. Domestic Market Farmers Processors Transporter Institutions 8%   Supermarkets Raw Milk Vending point On farm consumption sales Vendors 80%     Retailer  Shops,  kiosks,   bicycle vendors Micro Processors Machinery and equipment yoghurt,  ice  cream,  ghee suppliers • 6 million head of cattle • Low bargaining power by farmers (few • Inefficient  processing  facilities  (40%  utilization  capacity  and  21%   • 80% local breed each producing 2 litres of milk organized groups, do not own infrastructure) losses) (very low productivity) • Inadequate capacity to monitor and enforce • Majority of ingredients are imported, expensive, not readily • On-farm consumption sales = 40% of total quality standards available ( white sugar – 100% duty, packaging materials for production • Poor  market  information  access  and  flow butter  at  25%  duty)  flavours • 20% improved breeds each producing an average • High operational costs (power shortages, fuel • Outdated technology in most processing plants 7 liters per day scarcity) • Infrastructure  insufficient,  expensive,  imported  (prime  movers   • Milk Production concentrated in South West and • Inadequate infrastructure taxed at 80%) central 70%, North and Eastern only produce • Unfavorable policies • High  cost  of  finance  (interest  rates  at  24-  27%  p.a). 30% • Poor governance and management for • Inadequate investment in cold chain • Inefficiency  in  production  (high  cost  of   organized groups • High cost of production (irregular and expensive power supply production, poor breeds, poor management) • Poor milk handling practices, leading to low and fuel) • Inadequate extension services quality milk and high losses • Limited technical expertise • Unavailability and expensive input supplies • Export markets: Rwanda, Burundi, Tanzania, Southern Sudan, • Poor quality milk DRC, Kenya • Limited marketing and brand building activities • Lack of dairy export strategy National Export Strategy – Gender Dimension 45

3.5.1 Engendered Dairy Sector Value Chain Regulatory and policy Input suppliers and extension service providers Export Market UHT, Cheese, Yoghurt, Powder milk, Ghee, Major  Processor  (9) Butter, Flavoured milk Dairy Dairy Yoghurt, Ghee, P/ milk, Farmers Cooperatives Butter, Ice-cream, UHT Domestic Market Institutions Supermarkets, Retailer Shops, Micro Processors Kiosks, Bicycle vendor On farm consumption On farm consumption sales Yoghurt,  Ice  cream,  Ghee sales • Improved commercial dairy farming for women • improved milk handling practices by • Increased number of women processors exporting • Women trained in improved management women farmers dairy products practices • Improved  operation  and  financial   •  Women  getting  involved  in  product  diversification   • Improved access and coverage of extension management practices among women (New  products  for  export  markets  i.e.  flavoured   workers  to  rural  areas  to  benefit  women   • Improved access to market information by milk, yoghurt) producers women • Increased marketing and brand building activities by • Women increased accessibility to affordable • Cooperatives owned by women with milk women inputs collection infrastructure (cans, coolers, • Utilization of modern technologies by women • Improved farm milk hygiene practices by transportation • Implementation of policies (such as tax breaks, women farmers • Ongoing capacity building and infrastructure development, availability and • More women dairy farmers involved in strengthening of women producers and affordability of utilities) that encourage investment in cooperatives entrepreneurs dairy sector • Women in the management of processing • Ongoing capacity building and strengthen processors plants association with women playing central roles. 46 National Export Strategy – Gender Dimension Table 12: 3.5.3 Key Considerations for the Dairy Exports Perspective Issues/Gaps Development 1. Development Perspective perspective Poverty alleviation and employment Development of gender sensitive dairy value chain will contribute to poverty eradication especially among women who are estimated to contribute to more that  40%  of  production.  Developing  specific  programs  for  them  will  be  one  of  the   avenues of empowering and enhancing their ability to transform their capabilities by lifting their status in the value chain. Regional Development About 70% of economically active women work in rural areas, especially in agricultural related activities like dairy farming. There is need for designing initiatives which directly address rural challenges especially at household level where most of the production takes place. Environmental Sustainability Women working in the dairy sector sometimes face un-safe conditions due to exposure to environmentally hazardous effects like pesticides which are used to control pests. Promoting safe working conditions for women will encourage more women to participate in the sector. Competitiveness 2. Border-in gear perspective • Women in the dairy sector have no opportunities for capacity and skills development relating to production volume, quality and value addition • Cultural attitudes towards women’s role are still strong and this has hindered their  efforts  towards  capacity  diversification  and  the  ability  to  produce  new   products by adding value to them. This has led to men owning most of the large farms and processing plants, leaving the women at farm and trading level where the exploitation of women’s labour is still high. • There is biased human resource development and social discrimination towards women with men taking the major role of being at the top of each level of the dairy value chain. 3.  Border  gear • Women producers at the farm level are fragmented and individualized and this makes transport and expeditious business procedures very expensive. • Women are currently getting little trade facilitation in relation to regulations, administrative procedures and documentation requirements to enable them perform better in their businesses. • The  most  profitable  levels  of  the  value  chain  like  milk  processing  are  very  high   capital intensive, limiting women’s involvement. 4.  Border-out  gear • Market access is still limited for women traders due to high competition and low facilitation and protection from the regulatory bodies • Women have not received much support to prepare them for export markets. National Export Strategy – Gender Dimension 47 Perspective Issues/Gaps Client perspective 5. Sector and client priorities • The dairy industry contributes more than 50% of the total output from the livestock sub-sector. It employs many people that are involved in various economic activities such as milk production, collection, transportation, processing, distribution and marketing as well as provision of inputs and support services. The sector has continued to grow at an average rate of 8-10% per annum over the last 10 years. • The infrastructure for rural milk collection is not well developed in most parts of the country except the south western region and to a less extent the central region. • There are great opportunities in exploiting the existing regional markets, investing in modern technology and improvement in milk handling practices to guard against market entry challenges on account of inferior quality standards. More opportunities for women lie in value addition into powdered milk, yoghurt, cheese, milk chocolates among others as well as dairy farming and breeding 6. Business Competency • Since women are found at lower levels of the value chain, the illiteracy levels are very high. This has limited their ability to learn and adapt to new skills and technologies which can facilitate them to grow their businesses and improve productivity. However, at trading level, women are found to be more entrepreneurial   than   men,   with   women   being   better   financial   managers   and   administrators. 7.  Trade  Information • In the dairy sector, there is still low level of access to information among women because they are burdened with family duties in addition to running businesses. Most of the women spend their time at the farm, in the shop or at the processing plant and this limits their chances of interacting and networking. 8.  Trade  Finance • Even though women are better credit worthy than men, a lot of women are still financially  illiterate  and  therefore  can’t  manage  large  finances  which  are  needed   in  the  dairy  sector.  And  those  who  manage  to  access  microfinance  funds  fail  to   pay back due to high interest rates. • Financial institutions are still wary about funding agricultural projects, more especially when they are run by women. 48 National Export Strategy – Gender Dimension Perspective Issues/Gaps 9.  Quality  Management • Dairy has very stringent quality standards in the export market. Quality is very hard to maintain because dairy products are perishable. Even though the Dairy • Development Authority has enforced better hygiene for milk production, storage and transportation, the women entrepreneurs still depend on men to transport the milk for them in the process of which the milk is adulterated. Another challenge is due to the fact that milk producers are scattered and maintenance of the quality becomes costly and hard to coordinate. 10. Other Support • There has been a lot of support from Dairy Development Authority and other relevant organizations to promote the sector. However, there are no notable programs   specifically   targeting   women   entrepreneurs   in   areas   of   research   and   development, packaging, labeling, document handling and customs. Institutional 11. Strategy support network Perspective • Dairy Development Authority has organized dairy farmers into groups, associations, cooperative societies and unions from the grass-root to national level. Most of the active dairy farmer associations, cooperative societies and unions are playing a major role in bulking, transportation and marketing of milk. They also serve as focal points for delivery of extension services as well as implementation of development and capacity building programs. 12. Service delivery network • Numerous organizations offer business development services to build capacity in enterprises through training, counseling, mentoring and market access programs. However,  there  are  limited  programs  specifically  done  for  women  in  the  dairy   sector. Another challenge is the fact that most of the providers are urban based and  therefore  the  programs  don’t  benefit  the  rural  communities  where  milk  is   produced.  Furthermore,  because  of  limited  financing,  the  women  can’t  afford   the services. This has led to stagnation or failure of their businesses.

3.6 Monitoring Regular quarterly and annual assessment of progress and mechanism for addressing constraints shall be put in place. Before implementation proceeds, clear situational analyses will be done to determine the current performance of the selected sectors and will be measured against the targeted indicators to  determine  growth  and  performance  versus  the  set  objectives.  Such  indicators  will  be:  number  of   women who have entered a particular sector, level of exportation, level of participation in the value chain, business capacity growth and human resource skills development. The comprehensive monitoring frame work will be within the frame work of the National Export Strategy for Uganda. National Export Strategy – Gender Dimension 49 Part IV Strategy management S uccessful implementation of the strategy depends very much on how this is managed and monitored. The commitment of all stakeholders is necessary, particularly that of the responsible executing agencies in prioritizing their respective activities. One of the major reasons for the unsuccessful implementation of good policy initiatives is the lack of resources, management capacity, monitoring systems and committed lead drivers. Our strategy will seek to identify the least costly, but most effective management mechanism to implement the engendered National Export Strategy. It is imperative that we provide an assessment of the existing machinery.

4.0 Structure

4.1 Existing Government Machinery The primary focus for implementing the gender sensitive National Export Strategy lies within the existing delivery mechanism, through the appropriate ministries and agencies and other levels of support.  Focal  agencies  and  line  ministries  are  allocated  necessary  resources  to  implement  specific   Government policies some of which are gender focused. There are three general categories for the ministries  and  agencies.  These  are: Central Agencies: Aid coordination to support the strategy is the responsibility of three central Government ministries. These are the Ministry of Tourism, Trade and Industry, the Ministry of Finance, Planning and Economic Development, The Ministry of Gender, Labour and Social Development and Ministry of Justice. Policy Implementation Agencies: These are the line ministries and agencies responsible for implementing sector policies in trade, agriculture,  tourism,  ICTs,  public  utilities,  the  financial  system,  and  border  management. Promotional Agencies: A number of agencies are involved in promoting export development activities and investment. They are the Uganda Export Promotion Board, the Uganda Investment Authority, Uganda Tourism Board, Diary Development Authority, and Uganda Coffee Development Authority.

4.2 Private Sector-led Machinery Uganda Women Entrepreneurs Association Limited (UWEAL) is a private sector organization and was established primarily to support women in doing business both local and export business. UWEAL  enables  women  exporters  to  access  inputs,  finance,  market  information      and  training  on   business skills and competences. UWEAL was established to encourage women to do business and trade. The membership of this organization is drawn from women in business and companies run by women that export. Although UWEAL is widely represented throughout the private sector, there are limitations on its scope of operation, and activities due to resource and capacity constraints. Other considerations 50 National Export Strategy – Gender Dimension include the absence of support for the expansion of the organization’s activities. There are also certain  challenges  on  financial  resources. Dairy Development Authority was established as a semi-autonomous body under the Ministry of Agriculture, Animal Industry and Fisheries with the mandate to develop and regulate the dairy industry. It  is  responsible  for  coordination  and  efficient  implementation  of  all  government  policies,  which  are   designed  to  achieve  and  maintain  self-sufficiency  in  the  production  of  milk  in  Uganda.  The  Authority’s   five-year  Strategic  Plan  highlights  the  actions  that  must  be  undertaken  to  achieve  sustainable  growth   of the dairy sector. It describes the major development and regulatory programs, support services and their outputs. Areas of focus include human resource development, policy and planning, research and  development,  quality  assurance,  dairy  financing  and  the  regulatory  framework. To  ensure  that  Ugandans  are  engaged  in  dairy  farming  and  earning  profits  from  the  enterprise,  Dairy   Development Authority carries out training of all stakeholders in the dairy value chain, particularly farmers who undertake organized milk bulking and marketing. The Authority is currently implementing the Dairy (Marketing of Milk and Milk Products) Regulations, 2003, which has led to better handling and  transportation  of  milk.  This  has  resulted  in  a  significant  improvement  in  the  quality  and  safety  of   milk and milk products in the country and has improved access to high value markets, both locally and regionally. National Export Strategy – Gender Dimension 51 Part V: Resource  mobilization

5.1 Priorities S uccessful implementation of the engendered NES-export strategy, and its future performance, will depend on the availability of necessary resources, as well as the support of an effective stakeholder’s network. The availability of resources must therefore be given serious early consideration. Projects involving institutional assets will involve the re-engineering of existing institutions in order to implement some of the strategies effectively. This will involve re-prioritization and  re-positioning.  Specific  export  programmes  will  involve  issues  such  as  incentives  relating  to  export   finance  and  partnership  to  be  developed  to  increase  access  to  trade  finance  schemes  and  services  to   women in exports. Resource  mobilization  involves  not  only  financial  resources  provided  by  Government,  but  human,   and other resources that could be made available by development partners and the private sector stakeholders. In order to appreciate the level of funding required for the successful implementation of  all  the  strategies  in  the  document,  effort  has  been  made  to  group  them  into  four  broad  categories:   financial,  institutional,  human  resource,  and  export  specific. With  regard  to  financial  resources,  a  clear  road  map,  proper  sequencing,  and  the  prioritization  of  the   strategies  to  be  implemented  are  equally  important.  Specific  and  unique  action  plans  are  necessary   for the selected sectors that are contained in the engendered NES, well linked to the overall NES. In  the  case  of  financial  resources,  this  could  be  provided  through  the  national  budget,  by  the  private   sector,   and   possibly   by   development   partners.   Financial   resources   will   be   specifically   targeted   to   programs or activities earmarked for implementation by executing agencies. Human  resource  needs  will  very  much  depend  on  requirements  identified  in  each  of  the  strategies   for the selected sectors. While specialized expertise will be inevitable in certain areas, some tasks will be more generic in nature, and can be carried out during day-to-day operations of responsible agencies. With regard to human resource development, the emphasis will be to build up existing capacity to strength competences at UEPB, UWEAL, sector institutions and other relevant agencies. A coordinated approach making maximum use of all available resources from all stakeholders must be encouraged by the Management structure of the Engendered NES Strategy. Resources provided through development partners will take many forms, and will come through either bilateral or multilateral arrangements. Assistance via a bilateral arrangement could be in kind, or a cash grant. Multilateral arrangements could provide technical assistance (TA), for example, or a soft loan. The assistance  given  must  be  need  driven,  flexible  and  relevant  to  beneficiaries  for  the  desired  results.   One   of   the   identified   major   challenges   is   the   capacity   of   government   to   implement   some   policy   initiatives. It is necessary, therefore, that resources from donors be directed to capacity building in both  the  soft  and  hard  areas,  and  making  available  expertise  in  problem  areas  identified  by  UEPB  as   the strategy secretariat.

5.2.1      Funding  Through  the  National  Budget Although the country’s budgeting system is moving towards being output based, the allocation of resources is still based on programme budgeting, whereby funds are input based and directed to executing  agencies  through  their  respective  identified  programs. Since most of the strategies are to be made consistent with those of the Strategic Development Plans of  stakeholder  institutions,  it  might  be  assumed  that  financial  resources  will  be  provided  through  the   52 National Export Strategy – Gender Dimension normal budgetary process of these institutions. However, for those priorities not covered under the annual budget allocation of UEPB, due consideration must be given to prioritizing separate special projects and funding arrangements.

5.2.2      Funding  Through  Development  Partners As indicated earlier, cash grants and aid in kind are provided through bilateral and multilateral arrangements and UEPB secretariat will need to tap into these. The bulk of development assistance from bilateral donors is closely governed by the line Ministry of Trade, Tourism and Industry (MTTI) and Ministry of Finance, although we often get direct aid proposals from other donors such as the Irish Aid. Most of the assistance provided will need to be well linked to export development activities and  funded  through  the  responsible  institution.  The  assistance  should  specifically  target  sectors  where   the greatest impact on women in exports is expected. On multilateral arrangements, the European Union provides assistance through well-targeted sectors pre-determined under the European Development Fund (EDF). Borrowed funds from multilateral financial   institutions   are   targeted   at   major   national   infrastructure   development   to   support   export   infrastructure in gender sensitive sectors.

5.2.3 Private Sector Funding It  is  very  difficult  to  determine  the  level  of  funding  that  will  be  directly  injected  by  the  private  sector   into implementing each action plan of the Engendered NES strategy. Private sector funding will be based on individual initiative, and targeted at activities that match with the private sector operational areas and activities. Government will therefore continue to provide the necessary resources to foster the enabling environment for members of the private sector to invest in their own areas of priority that will support export development and in particular, women in export activities. Such agencies include the Private Sector Foundation Uganda (PSFU).

5.2.4 Quantum of Funding The  actual  quantum  of  funding  required  is  also  very  difficult  to  assess.  Most  funding  will  be  provided   through the budget allocation to UEPB and collaborating stakeholder agencies of government in respect to export trade. Availability of funding to implement the strategy will very much depend on priorities given by the executing agencies, based on their annual corporate plans and budget submissions to the Government of Uganda. At the operational level, the implementation of the Engendered NES will either be undertaken within the existing budgetary provision, or additional resources will be requested. Funding for implementation of the strategy should not be looked at in isolation, but considered along with the priorities outlined in the NES Document (2009 – 2012), UEPB strategic plan and National Development Plan (NDP). Although  the  strategy  has  indicative  figures,  these  have  to  be  finalized  by  the  executing  agency. National Export Strategy – Gender Dimension 53 Annex Women success stories Coffee Sector Mrs.  Nakayenga  Rose  Kato  is  the  owner  of  Zigoti  Coffee  works.  Zigoti  was  founded  in  1985  and  was   the number one supplier to the then Coffee Marketing Board before the liberalization of the coffee sector in Uganda. In 1995 the company built a coffee processing plant and started roasting coffee for the local market. The company exports both Arabica and Robusta ground coffee and coffee beans. Success Zigoti has been able to rise up the coffee value chain from just selling coffee beans to roasted coffee, thus making headway into the international markets. After successful participation in international trade fairs supported by UEPB, such as the Expo in China (2004) which helped introduce Ugandan coffee into the Chinese market, and in 2005, the company attended another Expo in Japan for over 3 months and this led to the establishment of a coffee shop in Nagoya Sakae, Japan. To-date the company has been able to purchase a coffee hulling machine, 2 roasters and has managed to sustain a brand name and image by promoting quality coffee. Zigoti does not have its own coffee farms or plantations  but  sources  its  coffee  from  local  farmers  of  Bugisu,  Budadiri  and  Kapchorwa  districts. Challenges The   company   faces   resource   constraints   such   as   trade   finance   which   limits   its   ability   to   serve   international   markets   efficiently.   Another   constraint   ensues   from   the   increasing   macro-economic   problems  such  as  inflation  which  is  raising  costs  of  operation,  transport  and  freight  charges. Commercial Handicraft Sector Ms.  Sarah  Katebarirwe:    Sarah  is  a  proud  owner  of  Marie  Sar  Agencies,  producer  and  exporter  of   bark  cloth  handloom  woven  banana  fibre/leaf  and  handloom  woven  raffia  products.  She  owns  retail   outlets  at  National  Arts  and  Crafts  Association,  Crafts  Village  at  National  Theatre  in  Kampala  and   Exposure Africa. She exports to Germany, Canada, and South Africa and through Fair Trade outlets in Europe. She attended UWEAL Access programme and she noted an increase in her sales by 30% in 2003, then 50% in 2005 and 2006. She has developed her products to a high level after a series of training programmes at UWEAL and UEPB. She has successfully participated in selected fairs to exhibit in Europe by the Centre for Promotion of Imports from developing countries (CBI), Netherlands. She has participated in several trade fairs worldwide, and has attended training in export product development and export marketing. Success Sarah has built a brand of exports on the bark cloth which comes from Mutuba tree common in central Uganda. She has passion and knowledge into this specialty to produce bags, wall hangings and other accessories. Sarah says that specialty improves one’s expertise on a product and perfects one’s performance. Sarah says that her fortunes have come due to exporting environmentally friendly products. She had an opportunity to join CBI of Netherlands and UN Habitat which have helped her move ahead. These have helped her to get more exposed in the international market and to link to many possible buyers of her products. 54 National Export Strategy – Gender Dimension Challenges The challenge is that her capital is relatively small and that commercial lending is not good for the handicraft  sector.    She  notes  that  even  commercial  banks  find  it  difficult  to  support  traders  like  her.   Therefore,   trade   finance   is   her   key   challenge   and   high   shipment   costs   for   export   consignments.   Sarah also works with few producers and directly employs not more than 5 people due to capital constraints. Tourism Sector Community Based Tourism Initiative (COBATI) founder, Mrs. Maria Baryamujura was recognized among the “Ugandans Making a Difference” and received an award of recognition from The New Vision Corporation for the outstanding contribution to improving the lives of others for a better Uganda. The award was presented on 9th June 2008, a day reserved for Heroes in Uganda. With her over 20-year experience in tourism development in and outside Uganda, Maria was aware of the shift in global tourism, as tourists became more independent, environmentally and socially conscious and travellers moved to sustainable models that preserve culture and environment. She saw the socio-economic potential of tourism in bringing opportunities which are especially important in rural areas where few opportunities exist. Local people are trained to understand that Community Based Tourism in its widest form. The training covers all kinds of activities and attractions found in rural areas, which are mainly, or uniquely, for tourism purposes. It is linked to poverty alleviation, and used to promote the diversity of attractions and activities mainly found in rural areas, and to generate income for the local people. Success Maria’s approach encourages local participation at homestead and community level, and empowers local people through mentoring and training, linking them to opportunities in tourism. This approach brings about economic tourism -opportunities, which are especially important in rural areas where few opportunities exist. COBATI plans to go beyond mainstream vacations to open up a world of adventure and opportunity. It includes directing tourists to Uganda’s countryside, balancing the biased geographical  distribution  of  tourists  and  offering  opportunity  to  spread  benefits  from  tourism  into  the   rural economy. Sustainability strategy COBATI collaborates with various international and local NGO’s, Government, Private Sector, development agencies, communities and individuals in innovative ideas in sustainable community tourism development through partnerships. Maria has excelled in her business by linking communities to local and international tour operators, mobilizing public opinion around key community tourism development issues and engaging communities in innovative ideas on community tourism through partnerships. Dairy Sector Maama Omulunji Dairy Limited is owned by Mrs. Nalubanjawa Justine. Justine started her business in 2000 following training she had received from Dairy Development Authority. She started with one cooler, which handled a capacity of 700 litres a day. Her major clients have been the local residents, restaurants and household families. A year after she opened her business, she was able to purchase a 1500-litre cooler to meet her customers’ demands. National Export Strategy – Gender Dimension 55 Success Justine has since 2000 registered tremendous success in her dairy business. She has established other  collection  centres  in  Rushere  Kiruhura  District,  with  a  4000-litre  cooler.  Justine  currently  handles   to the tune of 6000 litres a day of fresh milk. Challenges The company has a plan to expand and diversify its activities into production of yogurt and pasteurized milk.  They  have  identified  and  are  in  the  process  of  acquiring  machinery  for  the  expansion.  However,   capital is still small and commercial lending interest rates are too high. 56 National Export Strategy – Gender Dimension References 1. The Uganda National Export Strategy October 2007 2. UEPB 3-year Strategic Action Plan 2008 - 2010 3. Uganda National Gender Policy (1997, recently updated) Ministry of Gender, Labour and Social Development 4. National Action Plan for Women (1999, recently updated) Ministry of Gender, Labour and Social Development, Uganda 5. Women’s role in Flower Sector (2002) CEEWA-Obwona 6. Participation of women in export sector (Sept, 2004) CEEWA 7. Poverty Eradication Programme Action Plan of Uganda - PEAP Ministry of Finance, Planning and Economic Development 8. Global Gender Gap Report 2006 -2008 World Economic Forum 9. Support for Growth-oriented Women Entrepreneurs in Uganda 2005\6 ILO, SEED Programme, written by Lois Stevenson and Annette St-Onge 10. Bridge:  Gender  and  Trade,  Overview  Report  Zo  Randriamaro 11. Global Entrepreneurship Monitor, Uganda Executive Report Makerere University Business School 12. Uganda Gender & Growth Assessment IFC 13. Poverty and Social Impact Analysis – The Strategic Exports Initiative in Uganda (2003), Department for International Development 14. Gender   Wage   Differentials   in   Uganda:   Evidence   from   the   Uganda   National   Household Survey Andrew Young School of Policy Studies Research Paper Series No.  07-26,  written  by  Andrew  Kiggundu  and  Olga  Pavlova 15. Gender  Inequality  in  Uganda:  The  status,  Causes  and  Effects  Ministry  of  Finance,   Planning and Economic Development 16. Global Employment Agenda. ILO 17. Report of the Diagnostic trade integration study of Uganda (2006) World Bank, Ministry of Tourism, Trade and Industry 18. Dairy Development Authority, Report February 2008 19. The least Developed countries Report 2006, United Nations 20. Gender and Trade. Action Guide( 2007) Commonwealth Secretariat National Export Strategy – Gender Dimension 57 58 National Export Strategy – Gender Dimension Uganda Export Promotion Board P.O Box 5045 Kampala, Uganda, Plot 22, Conrad Plaza, Entebbe Road. Tel; +256 414 230250,230233, Fax: +256 414 259779 Web: www.ugandaexportsonline.com Design  Layout       Kyalie  +256  712876143 Cover  Illustration:   Birungi  Anold  +256772470881