{"id":25039,"date":"2022-01-22T18:59:59","date_gmt":"2022-01-22T18:59:59","guid":{"rendered":"https:\/\/www.africa-press.net\/uganda\/?p=25039"},"modified":"2022-01-22T18:01:12","modified_gmt":"2022-01-22T18:01:12","slug":"what-uganda-stands-to-gain-from-dr-congo-eac-union","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/uganda\/all-news\/what-uganda-stands-to-gain-from-dr-congo-eac-union","title":{"rendered":"What Uganda stands to gain from DR Congo-EAC union"},"content":{"rendered":"

Africa-Press – Uganda. <\/strong><\/span>It is a matter of time before the Democratic Republic of Congo joins the East African Community (EAC).<\/p>\n

Africa\u2019s second largest country (after Algeria), and the 11th largest in the world embroiled in conflict since independence on June 30, 1960 from Belgium, will take a seat in Arusha, Tanzania, in what is expected to open massive trade opportunities for the regional bloc, among other benefits.<\/p>\n

A 2020 study prepared by Aaron Ecel, a senior lecturer of International Business at Makerere University Business School (Mubs) dubbed \u201cThe Opportunities for Trade in the Democratic Republic of Congo\u201d makes a compelling case for current members of the EAC to pay attention.<\/p>\n

The study focuses on select commodities, including plastics and rubber, processed foodstuffs and leather. Most of the trade between the EAC and the DRC is concentrated in the eastern part of the DRC, with a large stretch covering the western borders of Uganda, Rwanda, Burundi and Tanzania.<\/p>\n

At least 47 percent of the DRC\u2019s imports are dominated by two supplying markets (China and South Africa), and that the DRC is sourcing most of what the EAC can ably supply from very distant markets, according to the research.<\/p>\n

\u201cGiven its geographic and even psychic proximity, the EAC is better placed to supply most of that the DRC imports. The findings reveal that trade flows from the EAC into the DRC are declining, with the exception of exports from Rwanda and Uganda,\u201d Ecel writes.<\/p>\n

On the flipside, the DRC has the highest rate of import and export transactional costs in Africa which, the report notes, translates into high costs manifested in terms of non-tariff barriers (NTBs). Some of the cited challenges include poor road infrastructure, political instability and safety concerns.<\/p>\n

\u201cAs a nation with the highest import and export transaction costs in Africa, doing business in the DRC requires additional dexterity compared to most regional markets and, therefore, operational and strategic readiness ought to account for the several hurdles (NTBs) between the small and medium size enterprises (SMEs) and the insatiable opportunities in the DRC.\u201d<\/p>\n

The ongoing formal processes to admit DRC into the EAC is seen as a signal to businesses in the EAC to tap into the lucrative DRC market. In order to achieve this, Ecel argues, a reasonable starting point would be to establish the opportunities for trade in the DRC that are aligned to the strengths of businesses in the EAC.<\/p>\n

The study highlights the opportunities for trade in the DRC for SMEs in the EAC, including pointing out the actual market sizes for commodities in the DRC.<\/p>\n

Most of the imports from the DRC are sourced from China (31.2 percent), South Africa (15.8 percent), Zambia (13 percent), Belgium (5.4 percent) and India (5.3 percent).<\/p>\n

DRC\u2019s imports from China, for example, grew by 14 percent between 2015 and 2019. Of the top 20 supplying markets for DRC\u2019s imports, the greatest growth was experienced from Thailand (75 percent), Netherlands (41 percent) and Zambia (18 percent).<\/p>\n

While EAC does not feature in the top three, this is expected when the DRC becomes a partner state.<\/p>\n

During the 18th Extraordinary EAC Heads of State summit meeting in December 2021, regional presidents consented to the conclusion of negotiations that will see the DRC join the six-member bloc.<\/p>\n

EAC exports to the DRC<\/b><\/p>\n

The total value of EAC partner states\u2019 exports to the DRC amounted to $855.4m (about Shs3 trillion) in 2018, representing a growth of 13.1 percent since 2012. Of the EAC partner states, Rwanda exported the most goods (products worth $337.4m or Shs1.2 trillion) to the DRC in 2018.<\/p>\n

Uganda was the second largest exporter among the partner states and exported goods worth $204.3m (Shs723b). Kenya and Tanzania exported goods of almost equal proportion at $149.8m (Shs530b) and $144.9m (Shs513b) respectively. Burundi exported the least value of products of the all the EAC partner states ($18.9m or Shs70b)<\/p>\n

Rwanda\u2019s exports to the DRC are rising faster compared to the other partner states, while Kenya\u2019s exports to the DRC have been falling over the years, especially over the period of 2014-2018.<\/p>\n

Also evident is the sharp fall in Tanzania\u2019s exports to the DRC between the periods of 2014-2017.<\/p>\n

DRC\u2019s imports from the EAC are dominated by petroleum oils and oils obtained from bituminous minerals, excluding crude ($125.1m or Shs442b), wheat or meslin flour ($52.4m or Shs185b), Rice ($52m or Shs184b), Cement ($46.6m or Shs165b) and Palm oil and its fractions ($41.2m or Shs146b).<\/p>\n

EAC\u2019s exports of petroleum oils to the DRC is growing faster than that of other products.<\/p>\n

For Uganda, the top exports to the DRC as of 2018 were Portland cement ($29.3m or Shs104b), palm oil and its fractions ($19.8m or Shs70b), broken rice ($17.5m or Shs62b), cane or beet sugar ($14.4m or Shs51b) and tubes, pipes and hollow profiles ($7.2m or Shs25b).<\/p>\n

Uganda\u2019s exports of prepared foodstuffs also increased between 2015 and 2018. In 2018, Uganda exported prepared foodstuffs worth $42.4m (Shs150b) to the DRC and this largely comprised of cane or beet sugar and chemically pure sucrose, in solid form ($14.4m or Shs51b).<\/p>\n

In 2019, Kenya\u2019s total exports to DRC amounted to $132m (Shs467b) and was dominated by cigarettes ($12.4 or Shs44b), flat-rolled products of iron or non-alloy steel ($9.6m or Shs34b) and food preparations ($7.6m or Shs27b).<\/p>\n

The top exports from Rwanda to the DRC were petroleum oils and oils obtained from bituminous minerals ($108.4m or Shs383b) rice ($32.5m or Shs115b). In the period 2015 to 2018, Rwanda\u2019s exports of processed foodstuffs to the DRC increased from $13.1m (Shs46b) to $25.3m (Shs89b) – (93 percent).<\/p>\n

Tanzania exports to the DRC cigarettes ($19.1m or Shs68b), Ammonium nitrate ($12.3m or Shs44b). Tanzania\u2019s exports of prepared foodstuffs to the DRC dropped from $45.2m (Shs160b) to $26.3m (Shs93b) – (1.7 percent).<\/p>\n

Burundi\u2019s exports to the DRC are concentrated in a single export commodity; Wheat or meslin flour ($10.1m or Shs36b) in 2019. Whereas the exports of beer by Burundi dropped between 2017 and 2018, those of wheat almost doubled in the same period.<\/p>\n

Some of the term agreements that facilitate trade between the EAC partner states and the DRC are regional group, and the Common Market for Eastern and Southern Africa (Comesa).<\/p>\n

With the exception of Tanzania, the other EAC partner states are able to trade on preferential terms with the DRC on the basis of Comesa. The Southern African Development Community (SADC), to which Tanzania is a member, that is not a member of Comesa, covers up for the preferential terms Tanzania would get through Comesa from DRC.<\/p>\n

The report doesn\u2019t cover South Sudan.<\/p>\n

Already, there are trade projects or programmes in place to facilitate trade between the EAC and the DRC. This include AFRI RI-Great Lakes Trade Facilitation project, which covers Uganda, Rwanda and the DRC, and aims to facilitate cross-border trade by increasing the capacity for commerce and reduce the costs faced by traders at targeted locations in the borderlands.<\/p>\n

Trademark East Africa (TMEA) DRC programmes 2017-2023 have also played a significant role in the reduction of trade barriers in East Africa, according to the report.<\/p>\n

They entail upgrading infrastructure and border systems, upgrading the port of Kalundu, which is the main entry point for trade into Kivu, Ituri and the hinterland until Kisangani, among others.<\/p>\n

Prepared foodstuffs<\/b><\/p>\n

As of 2019, the DRC imported prepared foodstuffs worth $514m (Shs1.8 trillion), representing growth of 20 percent since 2012.<\/p>\n

Beverages, spirits and vinegar, were the most imported in the category of prepared foodstuffs in 2019.<\/p>\n

Sugar and sugar confectionery was the second most imported at $118.2m (Shs418b). This was followed by preparations of cereals, flour, starch or milk. Most of the imports in the prepared foodstuffs category were sourced from Zambia (33.3 percent), Kenya (7.46 percent), South Africa (7.3 percent), Belgium (6.9 percent) and China (6.2 percent).<\/p>\n

In the same year, all EAC partner states combined exported prepared foodstuffs amounting to $146.4m or Shs518b (28.4 percent) of DRCs prepared foodstuff imports that year.<\/p>\n

Textiles<\/b><\/p>\n

The market for imported textiles into the DRC was worth $235m (Shs831b) in 2019, representing a 12 percent decline for the period 2015-2019. Most of the textile imports are sourced from China (54.6 percent in 2019) at $128.9m (Shs456b).<\/p>\n

In the same period, the rest of the imports were from Belgium ($20m or Shs71b), India ($13.1m or Shs46b), South Africa ($12.9m or Shs46b) and the Netherlands ($10.2m or Shs36).<\/p>\n

As a bloc, the EAC supplied textiles worth $30.7m (Shs109b) in 2019, and most of it was from Rwanda (53.3 percent or $16.3m or Shs58b).<\/p>\n

Kenya\u2019s exports of textiles to the DRC has shrank in the period between 2015 and 2019 from $7.8m (Shs28b) to $3.9m (Shs14b), while Uganda\u2019s increased in the period 2015 to 2018, from $7.3m (Shs26b) to $8.6m (Shs30b) respectively. Rwanda\u2019s exports of textiles to the DRC have significantly risen over the years, from $2.2m (Shs8b) in 2015 to $16m (Shs57b) in 2018.<\/p>\n

Burundi\u2019s exports of textiles are still very low at only $339,000 (Shs1b) in 2019.<\/p>\n

Exports to DRC<\/b><\/p>\n

A 2020 study prepared by Aaron Ecel, a senior lecturer of International Business at Makerere University Business School (Mubs) dubbed \u201cThe Opportunities for Trade in the Democratic Republic of Congo\u201d shows that all the East African countries, with the exception of South Sudan, which is not covered in the analysis, are able to increase their exports to DRC significantly.<\/p>\n

Kenya would be a top contender in processed food products, while Uganda would lead when it comes to prepared foodstuffs.<\/p>\n

The East African Business Council (EABC), an apex body of private sector associations based in Arusha, Tanzania, recommends that partner states fast-track finalisation of Standardisation, Accreditation and Conformity Assessment (SACA) Bill.<\/p>\n

The EAC should also expedite harmonisation of standards for the prioritised 20 most traded goods, facilitate and apply mutual recognition and its equivalence, among other moves.<\/p>\n

Plastic and rubber<\/b><\/p>\n

Plastic products worth $284.9m (Shs1 trillion) were imported into the DRC in 2019, up from $316.2m (Shs1.1 trillion) in 2012. At least $85.6m (Shs303b) of rubber products were imported into the DRC in 2019. Most of the plastics were sourced from China ($94.6m or Shs335b), South Africa ($48.3m or Shs171b), Saudi Arabia ($21.7m or Shs77b) and India ($17.8m or Shs63b).<\/p>\n

In the same period, the main suppliers of rubber products into the DRC were China ($37.6m or Shs133b), South Africa ($26.5m or Shs94b), Zambia ($5.5m or Shs19b) and France ($2.9m or Shs10b).<\/p>\n

In 2018, the EAC\u2019s supply of both plastics and rubber products to the DRC totalled $29.2m (Shs103b), down from $46.5m (Shs164b) in 2016. Most of it was exported by Uganda ($11.8m or Shs42b).<\/p>\n

For More News And Analysis About Uganda<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Uganda. It is a matter of time before the Democratic Republic of Congo joins the East African Community (EAC). Africa\u2019s second largest country (after Algeria), and the 11th largest in the world embroiled in conflict since independence on June 30, 1960 from Belgium, will take a seat in Arusha, Tanzania, in what is […]<\/p>\n","protected":false},"author":84,"featured_media":25038,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,8,12],"tags":[233,240,234],"class_list":["post-25039","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-homepage-english","category-policy","tag-africa-press","tag-africa-press-uganda","tag-uganda"],"yoast_head":"\nWhat Uganda stands to gain from DR Congo-EAC union - Uganda<\/title>\n<meta name=\"description\" content=\"It is a matter of time before the Democratic Republic of Congo joins the East African Community (EAC). 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