Faridah N Kulumba
Africa-Press – Uganda. On 11th March 2023, The President of the Republic of Uganda Yoweri Kaguta Museveni visited Algeria’s President Abdelmadjid Tebboune on a three-day official visit that saw both leaders signing two agreements and five Memorandums of understanding (MoUs) to strengthen both countries’ relations and cooperation in various sectors.
Museveni and his host held talks that covered areas of mutual interest and later witnessed the signing of the agreement that took place at the Algerian presidency in the capital Algiers.
Projects that were discussed
Among the top issues discussed were the USD1 billion that Algeria is planning to spend on finance development projects across Africa, building and funding a refinery as Uganda is in preparations for constructing the drilling oil wells that will be completed in 2025.
President Museveni revealed that Uganda is turning to the north African country for support by investing in the first country’s refinery. According to Museveni, it is absolutely necessary for Uganda to construct an inland refinery because it reduces the cost of transport being a landlocked country in East Africa.
Uganda and Algeria’s presidents also discussed issues on growing the prosperity of Africa and agreed to work together in areas of trade, energy, education, agriculture, and counter-terrorism where both nations have experience.
The two heads of nations also discussed ways of coordinating positions aiming at supporting just causes in Africa and international arenas.
Signed deals
President Museveni and his Algeria counterpart signed two memorandums of understanding in the fields of energy as well as agreements in the sectors of agriculture, tourism, animal health, scientific research, and trade.
The President of Algeria announced that 150 Algerian businessmen will very soon travel to Uganda’s capital Kampala to discuss potential partnerships with Uganda companies, with the aim of strengthening trade relationships.
Uganda and Algeria trade relations
Algeria is a reliable partner to Uganda in the past years. The East African country exports several products to Algeria including milk, coffee, tea, beef, poultry, and other agricultural products, although exports are still low. Whereas Algeria exports products to Uganda including petroleum and petrochemicals.
According to the Bank of Uganda report, in 2020 the export earnings from Algeria stood at USD2 million.
Mr. Museveni’s visit came days after officials at Dairy Development Authority (DDA) assured farmers and all partners in the dairy industry that Uganda would soon launch full-scale penetration into Algeria with the country’s powdered milk as the East African nation seeks to expand its market.
Uganda’s annual dairy performance report for the year 2021/2022 showed that there is a large market for dairy products in Algeria and Uganda being the second milk producer in East Africa –after Kenya– should take advantage of all the available market opportunities.
Uganda has quality milk on the market which is organically produced which give the country the advantage of earning much from milk exported to Algeria given the fact that Algeria’s milk production is generally low and most of their milk products are being imported from other countries.
In November last year, President Museveni held a meeting with the Algerian Ambassador in Kampala. Cherif Qualid showed interest in buying Ugandan milk worth 500 million dollars (1.85 trillion shillings).
Authorities in Uganda are planning to do whatever is necessary for the deal to export milk to Algeria to be concluded as soon as possible, starting to complete the signing of all necessary documents with Algeria.
The Diary Development Authority says that in addition to milk powder, Uganda will be exporting other dairy products, having completed a technical verification of the diary value chain regulatory framework by the Algerian team in December last year.
Does Uganda have the capacity of supplying such quantities?
According to the Diary Development Authority report Uganda produces 3.2 billion liters of milk every year, with just over three quarters put onto the market.
The 2021/2022 report also shows that the country earned USD1 billion (3.8 trillion Ugandan Shillings). This was an improvement from 3.01 trillion in the previous year.
Uganda’s diary exports bounced back to USD102.6 million last year from USD92.4 million recorded in the year 2020/2021. The exports are yet to reach the 2018 USD 130 million levels.
Uganda’s officials from the dairy market stressed that the joint Permanent Commission and business-to-business meetings between the two nations in Algiers will see some agreements being signed off.
The country’s neighbor Kenya is the biggest milk consumer, but in the past few years, the two countries have been having a cold trade war. In 2019 the administration of the then President of Kenya Uhuru Kenyatta refused entry of milk from Uganda, and the two countries lost billions and billions of money. In 2018, Kenya began complaining about Uganda’s cheap milk import in an effort to protect the local market.
At first, Kenya raised its concern about Uganda’s milk production capacity but was debunked through a fact-finding mission in 2019. In the same year, Uganda’s export dairy products were worth USD 135.9 million, according to Ugandan government statistics.
This year Kenya’s Dairy Board announced to stop the importation of powdered milk due to unexpected increased production in the country.
The milk agreement would be a relief to milk producers and exporters who have been suffering for years due to uncertainties in the regional market.
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