The World Bank has called on Uganda to remove trade barriers if it’s to earn 2.5 million US dollars and close the trade deficit in the next five years.
The additional money from non-traditional trading partners in the region would help Uganda stabilise its economy in the face of a slowdown in overall growth and reduced aid flows, according to Ahmadou Moustapha Ndiaye, the World Bank Country Manager.
Ndiaye advises that looking beyond the East African Community (EAC); Uganda should position herself as the land bridge to link other landlocked countries to the coastal economies.
These recommendations are in the first economic update for Uganda for 2013 titled “Bridges across Borders: Unleashing Uganda’s Regional Trade Potential.” The World Bank notes that a more rapid diversification of the economy and the appropriate use of resources, including oil, will drive renewed growth momentum.
The report also points out that Uganda should work at eliminating non-tariff trade barriers to reduce the cost of doing business as well as cut transport costs in order to raise productivity. There should also be an increase in connectivity, and improvement of transport logistics to make the country a better land-locked partner.
While Uganda’s economy is poised to grow by 4.5 percent during the Financial Year ending June 30, 2013, up from 3.4 percent in 2012, the World Bank cautioned authorities that it falls below potential and far lower than recent historic rates.
Maria Kiwanuka, the Finance Minister noted that with regional agreements there have been significant dividends, almost doubling Uganda’s regional exports over five years, to 25 percent of total exports in Financial Year 2011.
The Bank suggests that Uganda will need to boost trade with African countries as it has with the rest of the world. In 2012, Official Development Assistance to Uganda was approximately 882 million dollars, almost the same amount as average annual exports to Sudan and DR Congo.
Rachel Sebudde, the World Bank senior economist and author of the report is positive that the economy shall grow as long as Uganda concentrates her efforts on improving productivity in agriculture, manufacturing and service sectors.