THE INFORMAL CROSS BORDER TRADE SURVEY REPORT 2007

Transcription

1 THE INFORMAL CROSS BORDER TRADE SURVEY REPORT 2007 Busia Border Goli Border Lwakhakha Border November 2008

2 FOREWORD The Informal Cross Border Trade (ICBT) Survey covers trade transactions in goods across Uganda s borders that are not recorded through the official customs system. During the financial Year 2007/08, the Uganda Bureau of Statistics (UBOS) and the Bank of Uganda (BOU) undertook border expansion program where the monitored border posts increased from fourteen to twenty following the return of peace and security in Southern Sudan and Eastern Democratic Republic of Congo. In addition, three bus terminals were included under border expansion program to capture unrecorded trade through these terminals to the neighboring countries. The objective of the survey was to collect data on the nature of unrecorded trade transactions including the commodities traded, their quantities and values, modes of transport used and the direction of trade. The information gathered will be useful for monitoring the performance of the external trade sector, monetary policy formulation, understanding food security situation in the region, private investment opportunities and foreign currency flows. UBOS and BOU are working on producing complete and timely monthly external trade statistics that cover both formal and informal trade. There is also an understanding that the five East African Central Banks will make progress in generating mirror statistics on informal trade that will improve the quality of Trade Statistics and Balance of Payments Statistics in the Region. We express our gratitude to the Department for International Development (DFID) of the United Kingdom for the financial support. Lastly, we thank the ICBT technical team and our stakeholders for the support and cooperation in executing the survey. Emmanuel Tumusime-Mutebile Governor Bank of Uganda J.B Male-Mukasa Executive Director Uganda Bureau of Statistics i

3 TABLE OF CONTENTS DEFINITIONS... iv ACRONYMS... v EXECUTIVE SUMMARY... vi CHAPTER ONE: INTRODUCTION Recent Trade Developments ICBT Regional perspective The National Trade Environment Institutional and Funding Arrangement Survey Objectives Scope and coverage Survey Organization Data Processing and Analysis Data revision and integration Other ICBT Pertinent Issues...4 CHAPTER TWO: BORDER POST PROFILES Introduction Border Posts Profile Uganda/Kenya Border Border posts along the Uganda/Sudan border Border Posts along the Uganda/ DRC Border posts along the Uganda/Rwanda border Border posts along the Uganda /Tanzania border...11 CHAPTER THREE: METHODOLOGY Introduction Selection of Customs Stations for monitoring Selection of weeks for monitoring Direct Observation Technique Up-rating of Survey Results The Up-rating Model Estimation of missing data for un-monitored months Interpolation Method Extrapolation Method Data Limitation...17 CHAPTER FOUR: FINDINGS AND ANALYSIS OF RESULTS Introduction Informal Trade Flows, Direction of Trade A Comparison of Formal and Informal Trade Flows, Uganda s Informal Trade with East African Community Trade with Kenya in Agricultural and Industrial Products Trade with Tanzania in Agricultural and Industrial Products Trade with Rwanda in Agricultural and Industrial Products Overall Main Informal Exports Overall Main Informal Imports Trade flows by border station Modes of Transport...33 CHAPTER FIVE: ICBT IMPLICATIONS, CONCLUSIONS AND RECOMMENDATIONS Summary of findings Implications Price competitiveness of informal goods Domestic industrial competition Conclusion and recommendations Recommendations Challenges...37 REFERENCES APPENDIX I: LIST OF TABLES APPENDIX II: LIST OF ICBT TECHNICAL TEAM ii

4 List of Tables Table 1: Informal Trade Flows ( 000 US$), 2005 to Table 2: 2007 Informal Exports and Imports by Country and Trade Balances (000 US $) Table 3: Formal and Informal trade flows (000 US$), 2005 to Table 4: 2007 Estimates of Informal Trade, by Product Category with Neighbouring Countries ('000 US $) Table 5: 2007 Estimates of Informal Trade, by Product Category and Percentage Share Table 6: Informal Exports, Imports and Trade Balance per Product Category, 2006 to Table 7: 2007 Informal Exports, Imports and Trade Balances for EAC Region (US $ `000) Table 8: 2007 Overall Main Informal Exports of Industrial, Agricultural and Other Products (in Shs and US $) Table 9: 2007 Overall Informal Imports of Industrial, agricultural and other products (in Shs and US $) Table 10: 2007 Informal Exports and Imports by Border Station, Value and Percentage Share Table 11: 2007 Modes of transport by Value and Percentage Share of Exports and Imports Table 12: 2007 ICBT Exports by Destination, Commodity Type and Value (Shs & US$) Table 13: 2007 ICBT Imports by Origin, Commodity Type and Value (Shs & US$) Table 14: 2007 Exports by Customs Station, Commodity Type, Quantity and Value (Shs & US$) Table 15: 2007 Imports by Customs Station, Commodity Type, Quantity and Value (Shs & US$) Table 16: 2007 ICBT Exports by Commodity, Quantity and Value (U Shs & US$) Table 17: 2007 ICBT Imports by Commodity, Quantity and Value (UShs & US$) Table 18: 2007 Major Informal Exports of Agricultural and Industrial Products to EAC Table 19: 2007 Major Informal Imports of Agricultural and Industrial Products from EAC List of Figures Figure 1: The Map of Uganda Showing Monitored Border Posts... 5 Figure 2: A comparison of 2007, 2006 and 2005 Informal Exports by Destination iii

5 DEFINITIONS Balance of Payments Statistics Industrial Products Agricultural Products Informal Cross-Border Trade Other Products Re-exports Smuggling Trade Balance This is a statistical statement that systematically summarizes the economic transactions of an economy with the rest of the world for a given period of time. Industrial products are all items that have been Classified under the International Standard Industrial Classification (ISIC). The category includes processed agricultural commodities and manufactured goods. These are mainly unprocessed commodities Refers to trade transactions between residents and non-residents across the economic boundaries of two or more countries, and, are largely not recorded by customs authorities. These are a category of goods that are not classified under the industrial or agricultural products and are mainly natural resources like sand and soil (murram), crude salt, stones and water under ICBT survey. These are imports that are exported without much value addition according to prevailing COMESA Rules of Origin. Domestically produced goods may include imported goods that undergo value addition to alter the product significantly as per required Rules of Origin (ROO). The ROO normally specify a certain percentage of value added to a product in order for a good/commodity to qualify as originating from an economic territory. Is an illegal undertaking, which involves bringing in or taking out goods illicitly/stealthily without paying lawful charges or duties to customs authorities. Is the difference between foreign exchange earnings from exports and the expenditure on imported goods. iv

6 ACRONYMS BOP BOU COMESA DFID DRC EAC EPA EU GDP HS ICBT IMF ISIC ITSC MFPED MTTI NES NTP SADC SITC STR TEDD UBOS URA USAID VAT WTO Balance of Payments Bank of Uganda Common Market for Eastern and Southern Africa Department for International Development Democratic Republic of Congo East African Community Economic Partnership Agreement European Union Gross Domestic Product Harmonized Commodity Coding and Description System Informal Cross Border Trade International Monetary Fund International Standard for Industrial Classification International Trade Statistics Committee Ministry of Finance Planning and Economic Development Ministry of Trade, Tourism and Industry National Export Strategy National Trade Policy Southern Africa Development Community Standard International Trade Classification Simplified Trade Regime Trade and External Debt Department Uganda Bureau of Statistics Uganda Revenue Authority United States Agency for International Development Value Added Tax World Trade Organization v

7 EXECUTIVE SUMMARY This report is based on estimates of the ICBT survey carried out in 2007 during the nine months of February, May, June, July, August, September, October, November and December. The monitoring covered six new border posts and three Bus terminals in addition to the fourteen main customs stations monitored previously. The survey objectives was to gather information on the nature of unrecorded commodities transacted, their quantities and values, different modes of transport used for conveyance, and the direction of trade. In 2007, Uganda informally exported goods worth US $ million and imported goods estimated at US $ 57.2 million thereby recording a trade surplus of US $ million. On the other hand, officially recorded exports and imports were valued at US $ 1,336.7 million and US $ 3,495.4 million respectively. Therefore, Uganda s overall merchandise export earnings from both trading arrangements (formal and informal trade) amounted to US $ 2.11 billion in 2007 compared to the combined export earnings of US $ 1.19 billion in The merchandise trade deficit resulting from both formal and informal trade is estimated at US $ 1,439.5 million in 2007 compared to US $ 1,444.0 million registered in All the five neighboring countries are actively involved in informal/unrecorded cross border trade in all product categories. Overall, Uganda earned US $ million and US $ million from export of industrial and agricultural goods respectively. The main agricultural commodity exported informally was fish valued at US $ 53.3 million, while the major imported industrial product was clothes (new and second hand clothes) whose imports bill was estimated at US $ 6.8 million. The summary of the informal trade flows with Uganda s neighbours are given below. Sudan Informal exports to Sudan increased significantly from US $ 9.1 million in 2006 to US $ million in The commodities exported were mainly industrial products whose earnings were estimated at US $ million, while agricultural products fetched US $ 72.9 million. The improvement in security and the reconstruction efforts being pursued by the government of Southern Sudan could have contributed to the trade boost. Besides, the inclusion of Nimule under border expansion program could have improved on the recording of trade flows. The main Industrial products comprised of clothes, shoes, mattresses, soft drinks, and cement; while imports from there were mainly agricultural products like beans, maize, millet and sorghum. The leading informal exports were clothes which accounted for US $ 18.1 million, followed by shoes with US $ 9.3 million while mattresses fetched US $ 4.3 million. Oraba customs post was the busiest border post for exports in Kenya During 2007, Uganda exported to Kenya goods worth US $ 86.0 million, of which agricultural commodities accounted for US $ 56.2 million compared to an estimated exports value of US $ 96.9 million in Meanwhile, Uganda s imports from Kenya were estimated at US $ 27.0 million, of these, industrial products were valued at US $ 23.4 million. Overall, Uganda recorded a trade surplus of US $ 59.0 million in 2007 compared to US $ 33.0 million in The main agricultural and industrial products exported to Kenya were maize and shoes (new and second hand shoes) whose earnings were valued at US $ 10.3 million and US $ 2.2 million respectively. In 2007, 47.2 percent of Uganda s informal imports originated from Kenya compared to 80 percent in The reduction in trade between Uganda and Kenya could be attributed to fluctuations in Kenyan currency which made merchandise expensive, government fiscal policy on items such as polythene bags and the political instability in western Kenya during the last vi

8 quarter of the year. Busia was the busiest crossing point for informal imports in 2007 as well as Democratic Republic of Congo (DRC) Uganda s informal export trade with the Democratic Republic of Congo (DRC) increased from US $ 80.5 million in 2006 to US $ million in The total informal trade (imports and exports) with DRC was estimated at US $ million with a trade surplus of US $ million. Exports to DRC were dominated by industrial products valued at US $ million, while agricultural products fetched US $ 28.3 million. Meanwhile imports from DRC were mainly agricultural commodities valued at US $ 11.0 million and industrial products were worth US $ 7.0 million. Overall, Uganda had both comparative and competitive advantage in export of industrial and agricultural products to DRC which is less industrialized. It is important to note that, the flow of agricultural goods was in both directions emphasizing the economic interdependence of both countries in terms of food security. DRC was the second export destination for industrial products in the region under unrecorded trade arrangement in The busiest border posts along the DRC frontier were Mpondwe and Odramachaku. Fish was the main commodity exported to DRC whose earnings were estimated at US $ 24.4 million. Tanzania Uganda s unrecorded/informal export trade with Tanzania increased substantially from US $ 21.5 million in 2006 to US $ 38.5 million in The informal imports decreased remarkably from US $ 4.3 million in 2006 to US $ 2.9 million in The leading agricultural exports to Tanzania were beans and maize whose values were estimated at US $ 1.4 million and US $ 1.2 million respectively. Under industrial products category, the main exported commodity to Tanzania were clothes (new and second hand clothes) which fetched US $ 5.6 million. The main informally imported agricultural commodity from Tanzania was beans which accounted for US $ 0.6 million. The other agricultural products that were imported included unprocessed coffee, fish and rice whose values were estimated at US $ 0.5 million, US $ 0.2 million and US $ 0.1 million respectively. The recent inflows of unprocessed coffee from Tanzania and other neighbouring countries could be attributed to readily available market and favorable prices offered for the commodity under the liberalized trade environment in Uganda. Rwanda During 2007, informal exports to Rwanda increased from US $ 25.0 million in 2006 to US $ 39.1 million in Industrial products dominated the informal export commodities to Rwanda, fetching an estimated value of US $ 26.5 million compared to agricultural products earnings of US $ 12.4 million. The main industrial products exported to Rwanda consisted of maize flour, shoes, and clothes whose earnings were estimated at US $ 7.8 million, US $ 6.6 million and US $ 5.0 million respectively. Maize was the leading agricultural export whose earnings were estimated at US $ 5.2 million followed by beans and bananas which earned US $ 1.8 million and US $ 0.3 million respectively. Conversely, Uganda s major agricultural imports from Rwanda were peas and fruits, both valued at US $ 0.1 million. vii

9 Conclusion and Recommendations The survey findings reveal that a substantial proportion of the informal trade involves agricultural commodities which have a direct implication on regional food security. In general, Uganda has a comparative advantage in export of agricultural commodities although it imported similar products in small quantities from her neighbors. The export earnings from industrial products continued to surpass agricultural commodities underscoring the relevance of value addition. The policy recommendation is that value addition pursued under the National Export Strategy (NES) should be implemented expeditiously to improve on the competitiveness of traded commodities under informal and formal trade. Informal traders should be supported by institutions responsible for standards and quality control to improve on their products. Such services could make their products competitive in the region and global markets where competition is stiff. Traders should also be encouraged to form commodity cooperatives to bargain for favourable prices. The foreign exchange earnings accruing from informal trade show the significant contribution of informal trade to economic development and poverty reduction among the border communities. The government should partner with the private sector to improve on the conditions of informal trading environment so as to maximally harness the proceeds of informal trade. Moreover, the relative political stability in South Sudan and DRC which contributed to unprecedented growth in trade should be supported further by instituting relevant economic infrastructure that promotes trade. Furthermore, continuous monitoring of ICBT activities should become a permanent feature of the collaborating institutions to capture the ever-changing trade environment. viii

10 CHAPTER ONE: INTRODUCTION 1.0 Recent Trade Developments Uganda like other developing countries has continued to pursue global and regional trade initiatives to enable her goods access international markets without any hindrance. These initiatives culminated into the recent signing of an interim Economic Partnership Agreement (EPAs) under the EAC cluster, which would in effect allow her products trade on EU markets quota free and tariff free. The EU products would also access EAC market with similar treatment. However, the entry of the EU agricultural products into EAC under EPAs trade deal, whose production is highly subsidized, could impact adversely on domestically produced products. The prices of subsidized agricultural commodities produced by EU on the market would be artificially low thus leading to price slump and dumping. This could further translate into a disincentive to farmers and traders engaged in informal trade. Dumping food stuffs in poor nations at subsidized or low market prices undercuts local farmers, who cannot compete effectively and are driven out of jobs into poverty. This distortion favors larger producers who end up monopolizing the entire market. The Doha Round provides new opportunities for developing countries to primarily access markets of developed countries. The new trade agenda of the developed world was dubbed the Doha Development Agenda, and from there all countries were committed to negotiations opening agricultural and manufacturing markets, as well as services negotiations and expanded intellectual property regulation. The intent of the round, according to its proponents, was to make trade rules fairer for developing countries. However, this does not seem to be taking shape after the collapse of the negotiations when the rich countries farm subsidies (both the EU s Common Agricultural Policy and the U.S. government agro-subsidies) became a major sticking point. This situation as seen by the developing countries is unfavorable and resulted into the creation of new trade bloc of 20 developed and industrised Nations (the G20). Although the G20 presumes to negotiate on behalf of the entire developing world, many of the poorest nations continue to have little influence over the emerging WTO proposals which presage the fact that this Round agreement will not certainly make the developed countries open their markets to goods from the world's poorest nations. Considering that most goods transacted under Informal Cross Border Trade in the region are mainly agricultural raw materials, which are subject to weather vagaries and price fluctuations, their competitiveness at global level remains a serious challenge. Moreover, production of agricultural products within the EAC region is faced by a myriad of supply constraints which are difficult to overcome in the short run. 1.1 ICBT Regional perspective Uganda and her neighbors; Kenya, Tanzania, Rwanda, Sudan and DRC are important trading partners whose trade links have been constrained by political and economic factors. The communities spread along the territorial boundaries share a lot in common both culturally and socially. They speak the same or similar languages, inter-marry and own land on either side of the borders. This alone provides an incentive to these communities to engage in informal trade to exploit available opportunities on either sides of the border. The recent return of peace and relative security in the DRC and the Southern Sudan has led to unprecedented increase in both formal and informal trade flows along the borders of these countries. The quest for food security and economic development spurred the growth of merchandise trade among the partner countries. Agricultural food stuffs constitute the bulk of traded items under ICBT among the COMESA and EAC member states. This underscores the economic interdependence among the regional states in mitigating food demand which keep increasing annually with population growth. 1

11 The export of raw materials continues to undermine the competitiveness of Uganda s products in regional markets in terms of prices. Traders under ICBT do not observe international regulations and standards which complicate goods access to regional and international markets. Moreover, traders are faced with insufficient capital to ensure consistent supply chain of merchandise throughout the year. During bumper harvest, traders involved in cross border trade face serious storage problems of goods which end up compromising their quality and market prices. Besides, ICBT traders lack sufficient market information which could be bridged through national trade institutions to enable traders benefit from existing market opportunities within the region. These shortcomings require regional concerted efforts to improve on the informal trading environment. 1.2 The National Trade Environment The government of Uganda liberalized the current and capital accounts which have made Cross Border Trade (CBT) activities thrive attracting both formal and informal traders to participate in international trade. The National Export Strategy (NES) targets specific sectors under the formal trade sector for product improvement and marketing with little emphasis on informal trade which has grown to significant levels. Traders require assistance in product development, timely market information which the strategy is yet to address. The National Trade Policy and the NES if well implemented could harness the proceeds of trade to contribute to poverty reduction. The issue of value addition is critical for Uganda s products to become competitive and fetch high premium in the regional markets. Investment into agro-processing of agricultural commodities could guarantee price stability of these products and international market accessibility. The Sanitary and Phyto-Sanitary (SPS) requirements including observing international standards need to be popularized among the informal traders to forestall future hindrances to regional market access. 1.3 Institutional and Funding Arrangement The three stake holder institutions; UBOS, BOU and URA contributed technical personnel and financial resources that ensured the success of the survey. The other stakeholders that have been supportive to the survey include; the Immigration Department, the Uganda Police and the Local Leaders at various border posts. This and the previous ICBT surveys have been funded by the two main stake holders UBOS and BOU. UBOS funds were provided by Department for International Development (DFID) as a development grant to support Economic Statistics. The Bank of Uganda made provision for ICBT funding from its annual budgetary allocation. 1.4 Survey Objectives The main objective of ICBT Survey was to establish the magnitude of unrecorded/informal trade flows between Uganda and her neighbours. However, specific objective were as follows. 1. To determine the nature and composition of commodities transacted under informal trade 2. To establish the direction of trade for informally traded goods (i.e. country of destination/origin); 3. To estimate flows in terms of values and quantities; 4. To compare the unit prices of informal and formal trade for selected agricultural products 5. To provide a comparative analysis of recorded and unrecorded trade including net trade balances; 2

12 6. To generate monthly and annual ICBT estimates for Balance of Payments and National Accounts compilation and; 7. To establish the position of Uganda in terms of comparative and competitive advantage under the informal trading arrangement. 1.5 Scope and coverage The ICBT survey previously covered fourteen selected border posts that were known to have high concentration of informal trade transactions. The other border posts were not covered mainly due to financial constraints, poor communication (i.e. transport, telecommunications), insecurity and low trade volumes. During the Financial Year 2007/08, the ICBT Technical Team considered six new border posts and three bus terminals under ICBT border expansion program. This was aimed at widening the scope and coverage of informal trade activities that kept soaring as security improved in the neighboring countries. The signing of the Comprehensive Peace Agreement (CPA) between the Government of Sudan and the Sudanese People s Liberation Movement/Army resulted into the return of political stability to Southern Sudan. In addition political stability in DRC resulted in opening up of new crossing points. These developments led to unprecedented flows necessitating further border expansion for ICBT monitoring. In addition to the previous fourteen customs posts covered, the border expansion program considered the following: Sono in Eastern Region, Nimule/Bibia and Goli in Northern region, Kikagati and Cyanika in South western region and Ntoroko in Western region. The Bus Terminals considered include; Arua/Juba; Kampala/Kigali and Kampala/ Juba. 1.6 Survey Organization UBOS and BOU Technical Staff carried out monthly coordination and supervision of ICBT field work activities. The two institutions provide technical officers who formed the bulk of the national and individual border point s supervisory team. At least two enumerators were positioned at each of the surveyed border posts for purposes of collecting data during the monitoring weeks. The team of enumerators is composed of persons of proven integrity, honesty and is knowledgeable with the languages spoken and topology of the border posts. Through training, the enumerators acquired requisite competencies in metric system, quantity estimation methods, and tactical extraction of information from traders to achieve intended survey objectives. Where necessary, the enumerators were assisted by the Immigration and Revenue Officers at border posts to identify the goods as they enter or leave the country. 1.7 Data Processing and Analysis The ICBT data processing was jointly done by the collaborating institutions. The process involved capturing data from the field returns, data cleaning, coding and conducting validation checks to ensure consistency and accuracy of the collected data. During the coding process, the data was transformed into the Harmonized Commodity Coding and Description System (HS) and Standard International Trade Classification (SITC) Nomenclature. The ICBT data tabulation and analysis followed a predetermined tabulation scheme approved by the technical team in line with intended survey objectives. 1.8 Data revision and integration The ICBT findings have been fully incorporated into the Balance of Payments Statistics current account for the years 2002 to Further revisions are expected in 3

13 merchandise trade figures after completion of commodity coding using internationally recommended HS and SITC nomenclatures. 1.9 Other ICBT Pertinent Issues The International and Regional Organisations acknowledge the significance of ICBT activities among the Eastern and Southern African (ESA) countries whose exclusion had led to under estimation of true intra-african trade, and, the Balance of Payments and National Accounts Statistics. In a frantic effort to capture unrecorded cross border trade across the region, the COMESA Secretariat designed an instrument called COMESA Simplified Trade Regime (STR) to capture these transactions. The STR is in its initial stage of piloting after which it will be implemented across the COMESA region to assist countries to record informal trade flows to improve economic statistics. At an International Workshop on Country Practices in Compilation of International Merchandise Trade Statistics convened by United Nations on November 2007 in Addis Ababa, Ethiopia; it was recommended that ICBT be considered and included in the UN Compilation Manual as a supplementary source of collecting International Merchandise Trade Statistics (IMTS). In addition, the COMESA Secretariat was urged to develop a detailed framework similar to Uganda s model to guide informal cross border trade data collection in the region. 4

14 CHAPTER TWO: BORDER POST PROFILES 2. 0 Introduction There are several gazzetted exit and entry points along the boundary separating Uganda and her neighbours. During ICBT monitoring, a total of twenty customs posts that were known to have a high concentration of informal trade transactions were selected. These include Suam River, Lwakhakha, Malaba, Busia and Sono on Uganda/Kenya border; Mutukula and Kikagati, on Uganda/Tanzania border, Oraba and Nimule/Bibia on Uganda/Sudan border, Katuna, Mirama and Cyanika along Uganda/Rwanda border and Vurra, Paidha, Ishasha River, Odramachaku, Goli, Mpondwe, Ntoroko along the Uganda / DRC border as indicated in the map below. 2.1 Border Posts Profile Figure 1: The Map of Uganda Showing Monitored Border Posts THE MAJOR BOARDER STATIONS ORABA c c SUDAN NIMULE/BIBIA ODRAMADAKU VURRA c c c Legend Monitored Stations Road Network District Boundaries MPONDWE NTOROKO c c PAIDHA DRC cc GOLI UGANDA c c c c MALABA cbusia SONO LWAKHAKHA KENYA SUAM RIVER ISHASHA RIVER c cc KIKAGATI BUNAGANA MIRAMA HILL CYANIKA cc KATUNA c RWANDA c MUTUKULA TANZANIA 5

15 2.1.1 Uganda/Kenya Border There are five border points along the Uganda/Kenya border that were monitored. These included Malaba located in Tororo, Busia in Busia, Suam in Bukwa, and, Lwakhakha and Sono in Manafwa districts. Malaba and Busia border posts are the busiest and the main gateways for both imported and exported goods. The two border posts receive heavy traffic flow of trucks, buses, small vehicles and are key points on the northern corridor. There are well established government institutions that oversee the smooth flow of traffic and trade Malaba The border has river Malaba as a barrier separating the two countries. There is a railway line and road network connecting Uganda and Kenya. The other infrastructure available is the telecommunications, posta and financial institutions. The financial services are provided by Stanbic and Barclays Banks, which are both in Malaba and Tororo towns. Peak days are mainly Wednesdays and Saturdays which are market days on the Kenyan side of the border. There is no forex bureau in Malaba. However, currency conversion is handled through the informal system of Money Changers who are registered by the local authorities Busia At Busia border post, there is no physical barrier separating the two countries hence making the border porous. There are two important unofficial crossing points along the border that is Sophie and Malachi that are monitored in addition to the main gate. The persons involved in informal trade in this area are mainly women and men cyclist who provide the transport services. The market days for Busia are on Wednesdays and Saturdays on the Kenyan side. On the Ugandan side, there is a central gathering point for agricultural commodities around the no mans land. There is no forex bureau in Busia. However, currency conversion is handled through the informal system of Money Changers. Agricultural produce ferried on bicycles into Kenya at Busia border post 6

16 Sono Sono border point is in Manafwa district located about 15 kilometres from Lwakhaka and 69 kms from Mbale town. It is near Bumbo trading centre which is about 4 kilometers from the crossing border point. Traders move across river Sono which acts as a natural barrier separating Uganda and Kenya. The surrounding area is hilly with steep slopes at the foot of Mt. Elgon. The area does not have government institutions like Customs, Police and Immigration offices except a small army detach. The market days are on Tuesdays in Uganda and Fridays on the Kenyan side of the border. The border has no well established infrastructure to facilitate trade. The poor road network renders the border impassable with no traffic presence except for donkeys. The border point becomes dysfunctional during heavy rains when the river floods. The tribal clashes on the Kenyan side disrupted trade in The major currencies used are the Uganda and Kenyan shillings Lwakhakha Lwakhakha border post, located in Manafwa district has well established government institutions such as Immigration, Revenue offices and Police that facilitate trade. River lwakhakha acts as a natural barrier between Uganda and Kenya. The border post is connected by the main Uganda telecommunication service providers and safari com operator on the Kenyan side. The border post is currently not connected with electric power; hence Customs offices on the Kenyan and Ugandan sides use solar power and generators respectively Suam River Suam is approximately 77 kilometers from Kapchorwa and is located in Bukwo district in the eastern part of Uganda. There are two other crossing points at Suam called Karita and Amudat. However they are occasionally used due to insecurity and poor road network. River Suam acts as the natural barrier separating Uganda and Kenya. There exist police posts, immigration and customs offices on either sides of the customs station. There are no formal financial institutions; however, currency conversion is carried out by unlicensed individuals in shops around the area. Telecommunication services are limited and only provided by Safari COM the Kenyan mobile operator. The road to the border post is not well developed and some times impassable particularly during the rainy season. The major forms of transport are donkeys and pickups. The market days are on Sundays at Chepchoina trading centre Border posts along the Uganda/Sudan border There are two border points along the Uganda Sudan border that were monitored. These include Oraba and Nimule/Bibia, with Oraba being the busiest. After the devastating effects of the wars, infrastructure along the borders of Uganda and Sudan are being developed. This is evidenced by construction of permanent government offices, lodgings, restaurants and shops. There are several buses and trucks from Arua and Kampala that ply this route. Both formal and informal trade between Uganda and Sudan increased significantly as a result of return of peace and security prevailing in south Sudan Oraba Devastate Oraba border point is located Koboko district in the West Nile region. The distance from Koboko to Oraba is approximately 25 kilometers and is connected by a murram road. There are no financial services available at the border post; but could be accessed in Koboko town. The currencies used at the border are the Sudanese pound, Uganda shillings and the US dollars. 7

17 The bulk of goods from Kampala, Arua and other towns destined to South Sudan towns of Yei, Maridi, Juba and Yambio go through Oraba. The station also handles transits from Kenya and other neighboring countries to Sudan. The infrastructure and security on this route is fair compared to other crossing points Nimule/Bibia Nimule is a border town on the southern tip of Sudan's border with Uganda. The border was opened to the users in 2007 after the return of peace in Southern Sudan up to the public for Nimule border post is located in Amuru district, about 84 Km from Gulu town. River Nimule acts as the natural barrier separating Uganda from Sudan. This route is much nearer to most South Sudan towns than Oraba. However, the road network is in poor condition and the security situation keeps changing from time to time making it risky for traders. There no financial services available although Money changers facilitate the exchange of currencies. Business transactions are settled in Sudanese Pounds, Uganda shillings and United States dollars thus creating an inflow of foreign currency to Uganda. The hinterland on the side of Uganda is sparsely populated while the Sudan side is heavily populated with very many people doing business. The population on the Sudan side heavily depends on goods from Uganda. The shops in Nimule are stocked with consumer goods like sugar, rice, maize, soap, soft drinks, beers, cooking oil, textiles and agricultural products like bananas, beans, maize and meat. The Lorries ferrying goods from Gulu, Masindi, Mbale and Kampala use this exit point to deliver merchandise as far as Juba. This has created a bonanza for Ugandan traders who sell commodities at three times the original price Border Posts along the Uganda/ DRC There are seven border posts along Uganda/DRC border that were monitored. These include Ishasha, Ntoroko, Goli, Paidha, Bunagana, Vurra and Odramchaku. Due to insufficient resources a number of border posts, with significant trade flows were not monitored, which include Butogota, Panyamulu, Mupaka, Zeu and Asina Bunagana Bunagana border post located in Southwestern Uganda in Kisoro District is the main Southern crossing point from Uganda to DRC. It is about 10km from Kisoro town. The area is mountainous with poor road network and the access road from Kisoro is rough and murram. The main means of transporting goods are wooden bicycles and head/hand due to the nature of the terrain. Mondays and Tuesday are the busiest market days when the border post records high volume of trade flows. On the Uganda side, the market days are on Monday and Tuesday in Kisoro, while on the DRC side Tuesday and Friday. The major currencies used at the border are Ugandan shillings, Congolese Francs and United States Dollar. The political instability in DRC greatly affected the trade activities at the station during the months of August to December 2007 leading to a reduction in cross border trade activities and scarcity of food due to increased number of refugees in the area. The other unmonitored crossing point in the vicinity experiencing large informal trade flows is Mupaka in Busanza Sub-county Mpondwe Mpondwe is located in Kasese district about 59 kilometers from Kasese town. River Mpondwe acts as the physical barrier Uganda and DRC. The other entry and exit points in the vicinity not monitored are Kisenyi, Kitoma, Kabuyiri and Kamukumbi. The border post is linked with a tarmac road and good telecommunication facilities. The station is busy throughout the month, with industrial goods forming the bulk of exports to DRC, especially on market days of Tuesdays and Fridays. 8

18 The Uganda shillings, US Dollars and Congolese Francs are used as a medium of exchange at the border and money conversion is done by the informal money changers The financial services could be accessed in Bwera and Kasese towns 10 and 59 kilometers away respectively. Government institutions like customs, immigration and police are available while the customs post on the DRC side is at Kasindi about 5 Km away. in addition to formal trade activities, during market days, goods are off loaded directly from Ugandan trucks onto Congolese trucks as shown in the picture below.. Assorted merchandise being loaded on a truck for export to DRC through Mpondwe Border Post Vurra The road is the natural barrier separating Uganda and DRC, hence making it porous. Due to the porousness of the border there are many smaller busy crossing points and markets (Ojupala and Kinshasha markets) along the border which are not monitored. The means of transport commonly used include pick-ups, vehicles and bicycles. There exist government institutions like customs, police and immigration with efficient mobile communication network for all service providers. Despite the other services available at the border, there are no financial services to facilitate trade Odramachaku Odramachaku located on the western side of Arua town, a distance of about 16 kilometers is connected to Arua by a murram road via Lia customs post. At Odramachaku, there is no physical barrier at the border which makes it difficult to record trade passing through small paths along the vast porous border. The border has the Immigration as well as the police offices but there is no customs office and official trade is only handled at Lia customs. There are no financial services and the currency used is mainly Uganda Shillings. The market days are Wednesdays and Fridays when trade is highest. The market day in Ariwara Township in DRC attracts many traders on pick up vehicles to transport goods from Uganda into DRC. 9

19 Ishasha River At Ishasha border, Uganda is separated from DRC by River Ishasha as the natural barrier. The road network from Rukungiri to Ishasha River is murrum. The telecommunication network is well developed on the Uganda side with MTN, Uganda telecom and Celtel services readily accessible. The nearest trading centre is Kihihi which is about 9 Km away. There are several government institutions including Forestry Department, Wild Life Authority Office, Customs, Internal Security, Police and Immigration Offices. The currency used at the border is predominately Uganda shillings and US dollars. There are no financial services at the border; however, they could be accessed at Kihihi. The busy days are the market days which are Mondays on DRC side of the border and Thursday and Saturday on the Uganda side Goli Goli is located in Nebbi district in the vicinity of Paidha Town council. River Goli acts as a natural boundary separating DRC and Uganda. The access road to the post is murram. The financial services are lacking, however, they can be accessed in Nebbi and Paidha towns. Telecommunications services are generally unstable and for those accessed the network is poor. There are well established government offices such as immigration, police and customs. The Uganda Shilling is the only medium of exchange used at the border post Paidha Paidha border post has several crossing points in the neighborhood but only three were monitored under informal cross border trade survey. These include Nyibola, Alisi and Padea located 1 Km, 1.5 Km and 14 Km away from the customs post respectively. The station has well established customs, police and migration offices. The road network from Nebbi is murram and communication network services readily accessible. There exist microfinance services, electricity, water and hotel services. The main currencies used to transact business are the Uganda shillings and Congolese Francs. See below women carrying goods at Nyibola crossing point. Women and Children carrying informal agricultural imports from DRC to Uganda at Nyibola Crossing Point 10

20 Ntoroko Ntoroko is located in Bundibugyo district on the shores of Lake Albert, in Semliki National Park and is approximately 76 Km from Fort portal town. The road network is very poor and sometimes impassable during rainy seasons. The main languages spoken are Rutooro and Swahili. There exists a Customs Post, UPDF detach, Immigration and Fisheries Offices. The major modes of transport are vehicles and boats. At the border financial services are nonexistent but could be accessed in Bundibugyo and Fort Portal towns. The major currencies used are Uganda shillings and United States dollars. In the area around the border during the month of December 2007, there was insecurity and Ebola outbreak which affected the monitoring process at the border Border posts along the Uganda/Rwanda border Three border crossing points were monitored between Uganda/Rwanda. These include Katuna, Cyanika and Mirima Hills Katuna Katuna is the busiest border point along the Uganda/Rwanda border that handles formal and informal trade. It is located in western Uganda in Kabale district about 22 kilometers away from Kabale town. The border is covered by all the telecommunication network services. There are no financial services but they can be accessed at Kabale town. Money changers facilitate the conversion of currencies into Uganda shillings, Rwandese Francs and US Dollars. Wednesday and Saturdays are the two market days on the Ugandan side of the border with none on the side of Rwanda Cyanika Cyanika border station is located in Kisoro district about 12 Km from Kisoro town. The area is hilly and the road from Kisoro to Cyanika border post is murrum. All supportive government institutions like revenue authority, immigration and police exist with well established offices. The people along the border post speak Kifumbira and Swahili in addition to English and French on the Rwandan side. There are no foreign exchange bureaux in Cyanika however; traders and travelers transact business in any of the currencies; Uganda shillings, United States dollars and Rwandese Francs. The busy days are mainly Mondays, Thursdays and Fridays which are open markets days on the Uganda side. The other crossing point that was not monitored is Mulemule at the lower slopes of mountain Muhabura Mirama Hills Mirama hills is located in Ntungamo district about 40 Kilometers away from Ntungamo town. The area is fairly hilly and accessible by a murram road. There exist government offices like police, URA and Immigration that facilitate trade. The local money changers facilitate the conversion currencies required as there are no formal financial providers. The main modes of transport used in ferrying goods are bicycles and head/hand. The station has piped water and all the telecommunications networks are accessible in addition to Rwandacell from Rwanda operators. Market days are on Wednesdays and Saturdays on the Ugandan side with none on the Rwanda side. Kamwezi is another unmonitored crossing point along the Uganda/Rwanda border Border posts along the Uganda /Tanzania border The two border posts monitored between Uganda/Tanzania borders were Mutukula and Kikagati. Kikagati was included under ICBT border expansion program. There are several other crossing points used by informal traders along River Kagera like 11

21 Kyebukube that were not monitored. The common languages spoken at these border stations are Swahili, Runyankole and Luganda Mutukula Mutukula border post is situated in southern Uganda in Rakai District. There is no natural barrier separating the two countries at this point and hence several crossing points which poses a serious challenge during the monitoring. The road from Masaka to Mutukula border is tarmac. There exists good telecommunication links with all the networks. There are two other crossing routes which were not monitored, namely Mukabawo and Kulwazi. The station has well established government offices like Police, URA, Immigration, and Ministry of Agriculture hat facilitate trade. Saturday is the market day and is the busiest day when there is high trade flows. During the time of monitoring in 2007, there were no financial services available however; in 2008 one bank and microfinance were opened in the area Kikagati Kikagati border is located in Isingiro district and is about 74km from Mbarara town. The border is connected to Mbarara by a murram road and River Kagera acts as the natural barrier separating Uganda from Tanzania. There exists effective telecommunication network on both sides of the border. The border has the supportive government institutions like revenue authority, immigration and police. The market days are Wednesdays and Saturdays. The main modes of transporting goods at this border are bicycles and head/hand. There are no financial institutions but the local money changers facilitate currency conversion. The other unmonitored crossing points along the border include Kyebukube along River Kagera. 12

22 CHAPTER THREE: METHODOLOGY 3.0 Introduction The techniques for data collection took into account the characteristics and prevailing habits of unrecorded/informal trade practitioners at the borders. These techniques were deemed most appropriate for the circumstances in Eastern Africa as experimented earlier in the survey carried out by Prof. Ackello-Ogutu in 1996, and the subsequent ICBT surveys conducted by UBOS, BOU and URA. 3.1 Selection of Customs Stations for monitoring The border posts monitored under ICBT survey were purposely selected based on practical considerations of availability of supporting government institutions (like immigrations, revenue offices and police stations), road accessibility, security and the volume of unrecorded trade involved. The customs stations that are known to have informal trade transactions and are strategically positioned at the frontier between Uganda and her neighbors comprised the entire population. This implies that inland ports were not considered for monitoring. At present, there are many customs stations that are officially gazetted with most of them having no evidence of ICBT activities taking place within their vicinity. The sampling frame therefore consisted of a list of all customs stations (twenty seven) in the population domain selected using the above criteria. This was made possible by prior assessment visits mounted by the technical team. A total of twenty customs posts were then purposively selected for monitoring in order to generate estimates for unrecorded trade flows. The border expansion program raised the number of monitored stations from the previous fourteen to twenty to ensure coverage of about 90 percent. The border expansion program was implemented during the 2007/08 financial year at six border posts and three bus terminals where informally traded merchandise is loaded and offloaded. The purposive selection of the border posts ensured monitoring of significant border posts and minimization of resource wastage. 3.2 Selection of weeks for monitoring Due to resource constraints, it was not possible to monitor ICBT activities for a full month. The next stage therefore required specification of two weeks randomly selected from each month for monitoring. The method devised was to divide the month into four weeks, whereby two weeks in a month were monitored and the flows for the remaining two weeks estimated. Ideally, the selection of the weeks to be monitored was supposed to be random to avoid bias. However, due to financial constraints again, it was only possible to select the first week randomly and the subsequent week would follow automatically. This was done to minimize the double costs involved in moving the survey team twice to the field if the weeks were not following each other. For instance, if the month of April was monitored say the second and third weeks, it is denoted as 4.2 and 4.3 respectively. 3.3 Direct Observation Technique The direct observation method of data collection was the most cost-effective way of gathering data under border conditions, which are far from ideal. Under this technique, enumerators were positioned strategically at border posts to record all merchandise entering or leaving the country by observation in accordance to the General Trade System. All traded goods that were not recorded or officially cleared by customs authorities with evidence of documentations were recorded at a point of crossing the stations in the counter books and later transferred in aggregated form into the Summary Form A. All transits goods were identified and excluded accordingly at the point of entry or exit. 13

23 3.4 Up-rating of Survey Results This was necessary in order to generate monthly estimates from two weeks data for each month monitored. The up rating of survey results was based on the following assumptions: (a) The supply and demand for industrial and other products from either side of the border were fairly constant throughout the months of monitoring. (b) The supply and demand of agricultural products fluctuate depending on the season, whether planting or harvesting season and the day of the week whether a normal day or market day. The average value of flows (imports/exports) for a day of the week, say Tuesday is multiplied by the number of times Tuesday occurs in a month. The procedure is repeated for all the days of the week and a sum of the values estimated to get the monthly estimates. The maximum number a day say Tuesday occurs in a month is 5 times while the least is 4 times. (c) Trade transactions through other crossing points in the neighborhood of the monitored border stations were estimated individually based on qualitative monthly reports that were compiled by the supervisors after every monitoring month. Therefore, the reported percentage of (a) and (b) yields the estimated trade that crossed via the neighbourhood of each monitored border station. 3.5 The Up-rating Model Under assumption (a) above, for industrial and other products with constant trade flows, consider a given month having n days with a daily average value of industrial and other products of µ i. The total value of inflows/outflows of industrial and other products in a month are therefore mathematically presented as: A i = n µ i (1) Equation (1) states that to get the monthly value estimates for the months in question/consideration, the average daily values of industrial and other products from survey figures are multiplied by number of days in a given month. Therefore, the aggregate value of inflows/outflows during the survey period is the sum of the estimates of the nine months monitored. Mathematically, 9 A T = nµ i.(2) i= 1 Where i = month monitored and A T are total export/import flow for industrial and other product categories. Equation (2) represents estimated total value of informal exports/ imports of the industrial and other products traded during the 9 months of border monitoring. These are informal trade flows (exports and imports) of goods in industrial products and other products category that passed through the monitored borders during the full days of the months of monitoring. 14

24 To up rate informal trade flows of agricultural and other agricultural products during the nine months of the survey, assumption (b) is taken into consideration. The monthly aggregate of agricultural trade flows can be expressed as the sum of product of the number of particular days in a month and the average imports/exports for the day of the week. Let d j represent the number of particular days in a month, say four Mondays in March 2007 and j the daily average value of agricultural exports/imports of a given day computed from the observed trade figures. Then, B = d j j (3) Where B, stands for the monthly total value of trade for a given day, say Monday in a month of agricultural exports/imports (i.e. total of all Mondays). Therefore, the monthly informal agricultural exports/imports aggregates for all days in a month are estimated as; 5 B T= d j j.(4) j= 1 Where j represents day of the week, i.e. Monday, Tuesday Sunday. Note that, the maximum number of times a day of the week appears in a month is 5 times. Adding the monthly totals for 9 months we get the aggregate informal (unrecorded) agricultural flows as; 9 k= 1 5 j= 1 d j j.(5) Where k, stands for the months monitored which were nine in our case (February, May, June, July, August, September, October, November and December). Equation (5) represents the estimated total value of informal exports/ imports of the agricultural products traded during the nine months of monitoring. What remains is to estimate total informal traded goods that passed through the routes known as panya routes in the vicinity of the monitored border stations that enumerators could not capture. From assumption (c) above, the percentages provided for each border post was multiplied by equation (2) and (5) to yield trade estimates through the neighborhood. For instance, informal trade through Busia neighborhood alone was estimated at 25 percent. Other stations had percentages ranging from 5 to 25 percent as trade through nearby routes or panya s. For Busia alone, this is expressed as, C= [ i d j j i= 1 nµ + k= 1 j= 1 ]1/ 4.(6) Equation (6) represents informal trade flows (exports and imports) of goods in all categories that passed through the routes within the vicinity of the monitored sites but not captured by the fieldworkers. 15

25 A summation of the results from the three equations (2), (5) and (6) gives the up rated estimates of informal cross border trade figures. Hence, 5 i= nµ i+ d j +1/4[ nµ i+ d j ] (7) k= 1 j= 1 5 i= 1 Equation (7) shows the trade estimates from unrecorded/informal transactions with Uganda s neighbours during the nine months of monitoring. 9 k= Estimation of missing data for un-monitored months In order to show the magnitude of trade flows for un-monitored months, estimation is necessary to fill the existing data gaps. Filling the gaps would improve the analytical usefulness of trade data so as to allow easy integration of the figures into BOP and National Accounts Statistics framework. The practice of estimating missing trade data is in consonant with internationally accepted standards by international organizations such as UN, UNECA, World Bank, and IMF. The estimation methods stipulated by these organizations are documented in the book entitled, Manual on Methods of Estimation of Missing International Trade Data in Africa (UNECA 1995). Two techniques were found useful in attempting to estimate monthly flows that were missed out due to logistical constraints. These are linear interpolation and extrapolation models Interpolation Method This method estimates intermediate terms of a sequence of which particular terms are known. Consider the line defined by the two points (X 0, Y 0 ) and (X 1, Y 1 ), and a third point to be determined (X, Y) lies on this line only if the following relation holds: (Y 1 -Y 0 )/(X 1 -X 0 ) =(Y-Y 0 )/(X-X 0 ),. (8) Suppose that the value of X is known, but not that of Y, Solving for Y from 8 above Y = (Y 1 -Y 0 ) (X-X 0 )/ (X 1 -X 0 ) + Y 0. (9) Re-arranging (9) becomes Y = ((X-X 0 )/ (X 1 -X 0 )) Y 1 + (1.0-((X-X 0 )/ (X 1 -X 0 ))) Y 0 (10) Equation (10) can be rewritten as; Y = α Y 1 + (1.0- α) Y 0.. (11) Where α =(X- X 0 )/(X 1 - X 0 ). (12) Equation (12) is the interpolation factor, while (11) is the linear interpolation model Extrapolation Method The linear projection model is based on the assumption that there are no sudden or dramatic changes occurring on conditions affecting growth during the period under review. 5 j= 1 16

26 The mathematical formula is thus, Y t+n = Y t +bn (13) Where Y t+n is the value being projected, n units from time t Y t is the recent time interval of the historical data and the starting point of projection b is the average amount of growth or decline per unit of time. n is the number of units of time(e.g. months, weeks, years etc) To use model (13) above, b is estimated using the formula below. m b= i= 1 (Y t- Y t-1 )/m (14) Where m is the historical interval over which the average growth is calculated Y t-1 is the level of Y one time period before Y t. 3.7 Data Limitation The ICBT survey had some of the following limitations: (i) (ii) (iii) (iv) (v) (vi) The survey did not cover all the border stations in the country. Some of the border stations that were not covered may be experiencing significant amount of informal cross border trade flows; Trade occurring at night and beyond stipulated time of monitoring 7.00 a.m to 6.p.m was not covered; The porous nature of the Ugandan borders and failure to monitor all cross border sites led to underestimation of the volumes of informal trade flows; The survey took utmost two weeks of border monitoring instead of four weeks in a month, thus failing to capture the transactions for the entire months in which border monitoring took place; The Direct Observation technique did not accurately estimate the quantities of some traded items especially where assorted goods were involved in one package. Other estimation problems arose as a result of items being transported in packages not transparent, and those in bulk like sugar canes, fruits etc. Assignment of values, quantities and units of measure to some unique commodities was not accurately done because of the nature of the goods traded at respective border stations. Limitations (i) to (iv) rendered the survey procedures unable to cover 100 percent of the trade in all the monitored sites. The following measures were taken to address limitations (iv), (v) and to a significant extent (vi) stated above: a) Data verification, which included validation, consistency checks and coding in line with international merchandise trade statistics recommendations. b) Data up-rating 17

27 Limitation (ii) has not been addressed because of failure to find conclusive technical solution at the moment. Limitation (i) was partially tackled through ICBT border expansion program implemented during FY 2007/08. 18

28 CHAPTER FOUR: FINDINGS AND ANALYSIS OF RESULTS 4.0 Introduction This Chapter presents findings and analysis of results in line with the survey objectives. The indicators derived from the survey data include levels of inflows (imports) and outflows (exports), trade balance, direction of trade, comparative values of recorded and unrecorded trade, and, the volume and value of imported and exported commodities under informal trade. The results presented are estimates based nine months border monitoring during the months of February, May, June, July, August, September, October, November and December in In each month, two weeks were monitored continuously while the remaining two were estimated using the stipulated methods in chapter three. 4.1 Informal Trade Flows, From Table 1 below, Uganda s informal (unrecorded) export earnings in 2007 were estimated at US $ million compared to US $ million and US $ million recorded in 2006 and 2005 respectively. During 2007, informal exports increased substantially by percent on account of increased trade with Southern Sudan. Meanwhile, informal imports were estimated at US $ 57.2 million in 2007 compared to US $ 80.6 million and US $ 65.9 million in 2006 and 2005 respectively. Informal imports declined by 29 percent or US $ 23.4 million in The decline in informal imports could be attributed to Uganda s fiscal policy framework during the FY 2007/8 which affected mainly imports of polythene bags which dominated the informal imports sector in the previous years. The depreciation of the Kenyan shilling made imports expensive thereby affecting informal trade considerably. Tariffs being Uganda s main policy fiscal instruments, the tax authorities are vigilant to collect duties on any imported goods even small items. Exports do not attract any taxes except for hides and skins. This explains partly why informal export s values are higher than informal imports. Overall, Uganda recorded a trade surplus of US $ million in 2007 compared to the value of US $ Million recorded in 2006 and US$ million in Table 1: Informal Trade Flows ( 000 US$), 2005 to 2007 Trade Flow Years Exports 200, , ,508.9 Imports 65,872 80,633 57,238.6 Trade Balance 134, , , Direction of Trade The study further revealed that there was unprecedented shift in the direction of trade between Uganda and her neighbours. As seen in table 2 below, Sudan emerged as the main informal trading partner during 2007 with total unrecorded trade estimated at US $ million and a trade surplus of US $ million. During 2007, informal exports to Sudan amounted to US $ million (58.8 percent) while the expenditure on imports was estimated at US $ 8.7 million or 15.1 percent of the total imports. The increase in trade with Sudan could be attributed to the relative political stability in both Northern Uganda and Southern Sudan, and, the recovery efforts being pursued by the Government of Southern Sudan that increased the demand for consumer and producer goods. The Democratic Republic of Congo (DRC) maintained its second position with total informal trade estimated at US $ million and a trade surplus estimated at US $ 19

29 138.3 million. Informal export earnings from DRC were estimated at US $ million while imports were valued at US $ 18.2 million in This was followed by Kenya, whose total informal trade stood at US $ million with a trade surplus of US $ 59.0 million. These results show a shift from the previous estimates derived from surveys conducted in 2006, and 2005, which showed Kenya and DRC as the main export destinations of Uganda s products under informal trade. Table 2: 2007 Informal Exports and Imports by Country and Trade Balances (000 US $) Country Exports Imports Total Trade Trade Balance DRC 73,964 80, ,534 19,550 11,288 18, , ,292 Kenya 107,042 96,882 86,013 44,214 63,880 7, ,050 58,976 Rwanda 7,340 25,046 39, ,509 38,699 Sudan 9,119 7, , , , ,704 Tanzania 2,842 21,518 38, ,255 2,886 41,373 35,600 Overall 200, , ,509 65,872 80, , , ,270 The informal exports to Sudan increased substantially compared to the previous two years (refer to figure 2 below). The increase in trade with Sudan could be attributed to the increased demand for mainly consumer and industrial goods to meet the ever increasing population of returnees. During the period under review, DRC, Tanzania and Rwanda registered significant increase in informal exports except for Kenya. The slump in exports to Kenya could be attributed to favorable prices offered in other countries like DRC and Sudan leading to diversion of trade. For instance, exports to Kenya declined from US $ 96.9 million in 2006 to US 86.0 million in 2007, while informal exports to Sudan increased from mere US $ 7.8 million in 2006 to US$ million in The inclusion of Nimule/Bibia crossing point and the bus terminals (Arua/Juba and Kampala/Juba) boosted Sudan s trade flows considerably. Some of the goods informally exported to Sudan include beverages (beers, soda, and wines), iron sheets, construction materials, shoes, and clothes (both second hand and new). In 2007, the total informal imports to Uganda amounted to US$ 57.2 million, of which, Kenya accounted for US$ 27.0 million (47.2percent). Although Kenya remained the leading source of Uganda s informal imports during the three year period, its share reduced considerably compared to the previous years. DRC maintained the second position with informal imports increasing by 62 percent in the year The increase could partly be explained by the relative political stability on the Eastern DRC and the return to normalcy after the Ebola outbreak. Sudan followed with a significant increase in the imports bill estimated at US $ 8.7 million in 2007 compared to US $ 0.5 million registered in Meanwhile, Tanzania and Rwanda ranked fourth and fifth as informal imports source respectively. 20

30 Figure 2: A comparison of 2007, 2006 and 2005 Informal Exports by Destination Export Value in Million US $ DRC Kenya Rwanda Sudan Tanzania Country of destination A Comparison of Formal and Informal Trade Flows, From Table 3 below, during 2007 Uganda s informal exports amounted to US $ million compared to formal merchandise exports worth US $ 1.34 billion. This brings the overall combined (formal and informal) export earnings to US $ 2.11 billion in 2007 compared to US $ 1.19 billion in 2006 indicating an increase of 77.3 percent from both trading arrangements. Meanwhile, the combined import bill for both informal and formal trade stood at US $ 2.63 billion and US $ 3.55 billion in 2006 and 2007 respectively. The overall merchandise trade deficit stabilized at US $ 1.44 billion in 2006 and 2007 compared to US $ 1.11 billion recorded in Table 3: Formal and Informal trade flows (000 US$), 2005 to 2007 Trade Flow Year Informal Exports 200, , ,508.9 Formal/Official Exports 812, , ,336,668.0 Total Exports 1,013, ,193, ,113,176.9 Informal Imports 65, , ,238.6 Formal/Official Imports 2,054, ,557, ,495,391.0 Total Imports 2,120, ,637, ,552,629.6 Overall Trade balance (1,106,845.0) (1,444,007.0) (1,439,452.7) The proportion of informal exports to formal stood at 24.6 percent, 24.1 and 58.1 percent in 2005, 2006 and 2007 respectively. Meanwhile, the share of informal exports to overall merchandise exports was 19.7 percent, 19.4 percent and 36.7 percent in 2005, 2006 and 2007 respectively. On the other hand, the proportion of informal imports to formal imports was marginal at 3 percent in 2005 and 2006, and reduced to 1.6 percent in This 21

31 underscores the significance of informal export trade to overall merchandise trade whose share has continued to increase during the period under review. Table 4 below, gives a summary of findings in respect to the direction of trade by product category, values of exports, values of imports and trade balance. The findings indicate that Uganda is still the net exporter of food items to all the neighboring countries. Uganda registered a considerable trade surplus on agricultural, industrial and other products with her neighbors in In the previous years, Uganda imported more industrial products than it exported to Kenya under informal trade. This trend was reversed in 2007 due to the difference in fiscal policies of the two counties where industrial products were cheaper in Uganda. It should be noted that some of the informal exports to Kenya like shoes, clothes are re-exports. During the year 2007, industrial products dominated informal exports to Sudan accounting for US$ million compared to US$ 5.7 million recorded in The increase in Industrial product exports to Sudan can be attributed to the increased demand for consumer and capital goods as the country recovers from the effect of war.. Meanwhile imports from Sudan were estimated at US$ 8.7m of which industrial products accounted for US $ 7.2 million. Informal exports to DRC were valued at US$ 156.5m, of these; industrial products were estimated at US$ million up from US$ 58.0 million recorded in On the other hand, informal Imports from DRC were estimated at US$18.2m, of which, US$ 11.0 (60.4 percent) were agricultural products. Conversely, industrial products dominated the informal export products to Tanzania and Rwanda accounting for US$ 34.6 million and US$ 26.5 million respectively. Under Agricultural products, Uganda recorded a trade surplus with all her neighbors, with Sudan and Kenya being the biggest recipients during the period under review. In 2007, agricultural commodities worth US$ 72.9 million, US$ 56.2 million were informally exported to Sudan and Kenyan respectively. This was followed by DRC with an estimated value of US$ 28.3 million, then Rwanda valued at US$ 12.4 million and Tanzania with only US$ 3.5 million. The findings indicate that Uganda has both a comparative and a competitive advantage in export of agricultural and industrial products in the region. The flow of food items among the regional states in both directions indicates the interdependence in terms of food security during scarcity. Uganda is also positioned strategically to exploit the market potential that the Eastern DRC and South Sudan offers given her industrial base. 22

32 Table 4: 2007 Estimates of Informal Trade, by Product Category with Neighbouring Countries ('000 US $). Country Product Exports Imports Trade Balance DRC All products 156, , ,292.1 Agricultural products 28, , ,257.2 Industrial products 124, , ,212.0 Other products 4, ,822.9 Kenya All products 86, , ,976.0 Agricultural products 56, , ,699.0 Industrial products 29, , ,212.3 Other products Rwanda All products 39, ,698.9 Agricultural products 12, ,107.7 Industrial products 26, ,416.4 Other products Sudan All products 456, , ,703.7 Agricultural products 72, , ,497.4 Industrial products 382, , ,252.2 Other products Tanzania All products 38, , ,599.8 Agricultural products 3, , ,763.9 Industrial products 34, ,612.5 Other products Overall 776, , ,270.3 The percentage share of products in terms of export earnings and expenditure on imports per partner country is shown in Table 5 below. During the year 2007, Sudan took the largest market share of informal exports estimated at 58.8 percent compared to the previous year where Kenya led with 41.8 percent. Of these, exports of industrial products to Sudan accounted for 49.3 percent per cent, agricultural products were 9.4 percent and other products took only 0.1 percent. DRC came second with 20.2 percent of informal exports with industrial products accounting for 16 percent, while import accounted for 31.9 percent. Kenya came third with a market share of 11.1 percent of informal exports while imports accounted for 47.2 percent. Meanwhile, 40.8 percent of the imports that originated from Kenya were industrial products. Although Kenya is the leading source of Uganda s imports, its share reduced significantly in 2007 on account of exchange rate fluctuations which made Kenyan goods expensive coupled with a ban on polythene bags which used to be the leading item imported. The share of imports from DRC increased considerably from 14.0 percent in 2006 to 31.9 percent in Agricultural Products from DRC took the highest import market share of 19.2 percent while Industrial Products accounted for 12.3 percent. It is important to note that most industrial products imports from DRC do not originate from there but are re-exports from other countries. Conversely, the share of imports from Rwanda and Tanzania declined marginally in 2007 compared to 2006 performance. 23

33 Table 5: 2007 Estimates of Informal Trade, by Product Category and Percentage Share Country Product Exports (US $ `000) percent Share Imports (US $ `000) percent Share DRC All products 156, , Agricultural products 28, , Industrial products 24, , Other products 4, Kenya All products 86, , Agricultural products 56, , Industrial products 29, , Other products Rwanda All products 39, Agricultural products 12, Industrial products 26, Other products Sudan All products 456, , Agricultural products 72, , Industrial products 382, , Other products Tanzania All products 38, , Agricultural products 3, , Industrial products 34, Other products Overall 776, , Table 6 below summarizes the performance of informal trade by product type and share contribution of exports and imports. During 2007, Uganda informally exported industrial products worth US $ million accounting for 76.9 percent of the total informal export s share. This was followed by agricultural products whose value was estimated at US $ million (22.3 percent), while other products accounted for only US $ 5.7 million (0.7 percent). Likewise, industrial products dominated the informal import sector accounting for US $ 38.7 million (67.6 percent) of the total imports bill, followed by agricultural products whose value was estimated at US $ 18.0 million accounting for only 31.5 percent. This compares with the industrial and agricultural products valued at US $ million (50.9 percent) and US $ million (48.7 percent) in 2006 respectively. Despite the decline in the exports share of agricultural products in 2007, the value increased from US $ million in 2006 to US $ million in The overall trade surplus recorded on export of industrial products stood at US $ million, agricultural products was estimated at US $ million and US $ 5.2 million on other products. The findings show that Uganda had a comparative advantage in export of both agricultural and industrial products under informal trade during The high demand for industrial products in Sudan and DRC increased informal exports to unprecedented levels compared to the previous years. 24

34 Table 6: Informal Exports, Imports and Trade Balance per Product Category, 2006 to 2007 Exports Product Export Percentage Share Agricultural products 112, ,360, Industrial products 117, ,424, Other products 1, ,724, Overall 231, ,508, Imports Product Import Percentage Share Agricultural products 20, ,035, Industrial products 59, ,719, Other products , Overall 80, ,238, Uganda s Informal Trade with East African Community EAC region is working towards establishing a Common Market for the five countries as well as a Monetary Union by In this regard, the findings were disaggregated to analyze the trade flows for EAC countries separately. The region is comprised of five countries; Uganda, Kenya, Tanzania, Rwanda and Burundi. However, ICBT monitoring covers only Tanzania, Rwanda and Kenya. From table 7 below, the informal exports to the three EAC countries in 2007 was estimated at US $ million compared to US $ million recorded in 2006, indicating an increase 14.2 percent. On the other hand, informal imports from these countries reduced by over 56.4 percent, from US $ 68.8 million in 2006 to US $ 30.0 million in Overall, Uganda registered a trade surplus of US $ million and the total informal trade value of US $ million in This compares with the 2006 trade surplus of US $ 74.6 million and total trade of US $ million. These findings underscore the significance of informal trade transactions among the EAC partner states which has kept on increasing over time. Table 7: 2007 Informal Exports, Imports and Trade Balances for EAC Region (US $ `000) Country Exports Imports Total Trade Trade Balance Kenya 86, , , ,976.0 Rwanda 39, , ,698.9 Tanzania 38, , , ,599.8 Overall 163, , , , Trade with Kenya in Agricultural and Industrial Products Uganda s informal exports to Kenya were mainly agricultural commodities which accounted for US $ 56.2 million (65.4 percent), followed by industrial products estimated at US $ 29.6 million and other products valued at US $ 0.2 million. The main agricultural commodities were maize, fish, beans, ground nuts, and bananas (See table 18 and 19). Maize grains alone fetched US $10.3 million for 58,212 tones exported in 2007 when compared to US $19.6 million for 123,173 tones in The significant reduction in the quantity of maize grains exported to Kenya could be attributed to the high domestic and 25

35 regional demand after the floods which devastated the northern part of Uganda and the food scarcity in South Sudan where maize flour was among the food items exported respectively. During 2007, fish ranked second among the agricultural exports to Kenya with an estimated value of US $8.7 million, followed by Beans with US $8.3 million, then ground nuts with US $ 5.8 million and bananas valued at US $ 5.3 million. The leading agricultural commodities informally imported from Kenya were coffee(unprocessed), rice, potatoes(irish), and peas with values estimated at US $ 1.0 million, US $ 0.8 million, US $ 0.4 million and US $0.3 million respectively in There was a general reduction on informal imports bill on these products compared to For instance, the of rice was estimated at US $ 3.4 million in 2006, but drastically fell to US $ 0.80 million in 2007 due to reduction in its exports to avert food crisis in Kenya. The agricultural commodities exported under informal trade to Kenya were mainly food stuffs highlighting the interstate dependence of regional states during food scarcity. The informal exports of manufactured goods to Kenya were Shoes (both second hand and new), clothes and petroleum jelly whose foreign export earnings were estimated at US $ 17.0 million, US $ 2.8 million and US $ 1.4 million in 2007 respectively. The polythene bags remained as the main informally imported industrial product from Kenya although it value reduced remarkably from US $ 25.6 million in 2006 to US $ 5.6 million in The significant reduction in the value of polythene bags could be attributed to the Government policy that limited the importation of polythene bags of less than 30 microns. Other commodities that featured highly among the main industrial imports were clothes (new and second hand), cooking oil and sugar whose expenditure bill was estimated at US $ 3.6 million, US $ 1.3 million and US $ 1.2 million respectively Trade with Tanzania in Agricultural and Industrial Products Uganda continued to recorded a favourable trade balance with Tanzania with informal exports to Tanzania rising from US $ 2.8 million in 2005 to US $ 21.5 million in 2006 and then to US $ 38.5 million in Meanwhile, the informal imports increased from US $0.6 million in 2005 to US $ 4.3 million in 2006 and then dropped to US$2.9 million in The main agricultural exports to Tanzania included beans, maize and bananas whose values were estimated at US $ 1.4 million, US $ 1.2 million and US $ 0.4 million respectively. In 2007, the main imported agricultural products from Tanzania were beans, unprocessed coffee, fish, and rice valued at US $ 0.6 million, US$ 0.5 million, US $ 0.2 million and US $ 0.1 million respectively. The major industrial exports to Tanzania comprised of clothes (second hand and new), human medicine, polythene bags and shoes estimated at US $ 5.6 million, US $ 5.3 million, US $ 5.0 million, US $ 4.5 million, and US $ 4.0 million respectively. The other industrial products exported were Match boxes, alcohol/spirits, maize flour and boutiques. Meanwhile, the main industrial products informally imported were Human medicine, cooking oil, ghee and sugar estimated at US $ 0.2 million, US $ 0.1 million, US $ 0.1 million and US $ 0.08 million respectively (as in table 18 and 19) Trade with Rwanda in Agricultural and Industrial Products Uganda s unrecorded/informal export trade with Rwanda continued to increase from US $ 7.3 million in 2005 to US $ 25.0 million in 2006 and then to US $ 39.1 million in The trend suggests that trade between Uganda and Rwanda is likely to increase to unprecedented levels following the entry of Rwanda into the EAC regional bloc and the improved bilateral relationship between the two countries. The main agricultural exports were maize grain, beans, bananas and sorghum estimated at US $ 5.2 million, US $ 1.8 million, US $ 1.6 million and US $ 1.1 million respectively. Uganda s informal agricultural imports from Rwanda were Peas, Passion Fruits, Avocadoes estimated at US $

36 million, US $ 0.07 million and US $ 0.04 million respectively. On the other hand, the major industrial products exported to Rwanda were maize flour, shoes and clothes which accounted for US $ 7.8 million, US $ 6.6 million and US $ 5.0 million in 2007 respectively as shown in table 18 and 19. The overall informal import bill on industrial products from Rwanda was valued at US $ 0.09 million in 2007 compared to an estimated value of 0.70 million in

37 Overall Main Informal Exports From Table 8 below, the five main informally exported agricultural commodities were fish, maize, beans, bananas and ground nuts whose values were estimated at US $ 53.3 million, US $ 18.7 million, US $ 17.6 million, US $ 11.3 million and US $ 7.8 million respectively. With the exception of fish which recorded a substantial increase in value from US $ 33.4 million in 2006 to US $ 53.3 million in 2007, the other commodities mentioned above recorded a drastic decline in volume and value on account of increased domestic demand after the flood devastated the northern part of Uganda that could have reduced the quantity available for export. The main five industrial products exported informally comprised of clothes, shoes, beers, mattresses and maize flour which accounted for nearly 40 percent of the total informal exports. Clothes (New and second hand) fetched the highest value of US $ million taking a share of 16.1 percent, followed by shoes with an estimated value of US $ 93.3 million (12.0 percent), beers earned US $ 34.0 million (4.1 percent), mattresses and maize flour accounted for US $ 21.8 million (2.8 percent) and US $ 19.3 million (2.3 percent) respectively. The other manufactured products that contributed significantly to the informal export earnings included radios, blankets, wheat flour, human medicine and soda. It is important to note that some of these industrial products exported under informal trade are re-exports. 28

38 Table 8: 2007 Overall Main Informal Exports of Industrial, Agricultural and Other Products (in Shs and US $) Item Value (Shs) US $ Percent Share Agricultural Products Total 296,868,463, ,360, Fish 95,578,409,022 53,251, Maize 28,662,660,796 18,687, Beans 30,182,071,725 17,582, Bananas 18,423,816,864 11,336, Ground Nuts 14,422,110,657 7,841, Onions 12,641,990,911 7,281, Tomatoes 10,043,002,192 5,917, Cattle 10,182,532,576 5,745, Millet Grain 8,294,111,222 5,209, Eggs 7,211,130,447 3,988, Industrial Products Total 1,046,593,524, ,424, Clothes 222,448,525, ,053, Shoes 168,107,325,712 93,318, Beer 59,857,328,246 33,985, Mattresses 38,262,567,508 21,844, Maize Flour 32,204,021,943 19,306, Radios 23,737,669,391 13,620, Blankets 22,522,516,360 12,818, Wheat Flour 21,297,358,670 12,267, Human Medicine 18,093,389,578 11,863, Soda 19,312,332,175 11,057, Sandals 19,571,847,479 10,866, Other Products Total 8,415,357,434 5,724, Stone Aggregates 5,565,744,736 3,657, Salt (Crude) 1,771,387,788 1,007, Sand 671,965, , Water 182,901, , Fire Wood 98,266,471 60,

39 Overall Main Informal Imports From Table 9 below, clothes (new and second hand) were the main imported goods under industrial products category with an expenditure bill estimated at US $ 6.8 million. This was followed by polythene bags valued at US $ 5.7 million (10.0 percent), shoes estimated at US $ 2.4 million and then cooking oil worth US $ 2.3 million. The other commodities in this category with significant values were; sugar, vehicle parts, cassava flour, paraffin, paint and salt. The polythene bags (Kavera) whose import bill estimated at US $ 25.9 million in 2006 reduced considerably to US $ 5.6 million in 2007 due to the effect of polythene ban instituted by the government during 2007/08 financial year. In 2007, the major agricultural commodities imported informally were; coffee (unprocessed), beans, ground nuts, bananas, and rice. The unprocessed coffee accounted for US $ 2.9 million (5.0 percent) followed by beans, ground nuts, bananas and rice estimated at US $ 2.8 million, US $ 2.2 million, US $ 1.8 million and US $ 1.2 million respectively. The unprocessed coffee which originates mainly from Kenya and Tanzania has found readily available market with competitive prices under the liberalized trade environment in Uganda. Although Uganda imported the above food stuff, it is a net exporter of these same items to her neighbours. 30

40 Table 9: 2007 Overall Informal Imports of Industrial, agricultural and other products (in Shs and US $) Item Value (Shs) US $ percent Share Agricultural Products Total 30,323,407,337 18,035, Coffee (Unprocessed) 4,942,443,527 2,847, Beans 4,715,801,773 2,832, Ground Nuts 3,947,235,453 2,191, Bananas 2,749,568,683 1,826, Rice 2,131,045,639 1,167, Cassava 1,359,212, , Hides & Skins 1,461,460, , Fish 1,439,919, , Peas 1,010,678, , Onions 899,638, , Potatoes (Irish) 707,976, , Maize 663,735, , Avocados 642,086, , Sorghum 457,455, , Industrial Products Total 68,145,235,862 38,719, Clothes 12,410,037,496 6,797, Polythene Bags 10,280,489,145 5,657, Shoes 4,463,607,586 2,438, Cooking Oil 3,994,123,883 2,261, Sugar 2,531,883,419 1,439, Vehicle Parts 2,085,505,423 1,183, Cassava Flour 1,139,912, , Paraffin 1,209,274, , Paint 1,126,459, , Salt 1,053,513, , Motorcycle Parts 991,793, , Bitenges 913,533, , Mattresses 919,107, , Other Products Total 633,883, , Sand 329,153, , Fire Wood 147,392, , Brooms 117,455,030 83,

41 4.7 Trade flows by border station This part discusses the informal exports and imports for each border station covered during the period 2007 as shown in table 10 below. The survey covered twenty crossing border points compared to the fourteen customs posts covered in the previous years of 2005 and Oraba customs post along the Uganda/Sudan border was the busiest station under informal cross border trade during The value of exports and imports through Oraba stood at US $ million (51.9 percent) and US $ 1.1 million (2.0 percent) respectively. The exported products through Oraba were mainly industrial products such as shoes, cement, milk (powder), motorcycle parts, radios, generators, clothes, maize flour, mats, chocolate, television, computers, juices, sugar, soap, rice and sauce pans. In 2007, Mpondwe border post along the Uganda/DRC border ranked second with exports and imports worth US $ million (13.5 percent) and US $ 5.4 million (9.5 percent) respectively. Busia, which took the largest share in the previous years, came third, with exports and imports estimated at US $ 65.0 million (8.4 percent) and US$ 18.2 million (31.8 percent) respectively. Nimule, which was not included in the previous surveys ranked fourth with exports valued at US $ 53.2 million (6.9 percent) and imports valued at US $ 7.5 million (13.1 percent) as indicated in table 10 below. The other stations that recorded significant informal trade flows were Mutukula, Katuna, Odramachaku, Malaba, Ntoroko, and Mirama Hills. The combined exports and imports value that accrued from the ICBT Border expansion from the six border posts of Nimule, Cyanika, Ntororko, Goli, Sono, and Kikagati were estimated at US $ 72.6 million and US $ 11.2 million respectively. The bus terminal data was added onto respective stations where the buses exited such as Katuna, Mirama Hills and Oraba. Overall, Oraba and Busia took the largest share of 51.9percent and 31.8 percent of all the exports and imports transacted under informal trade respectively. Although Sono contributed least on the informal exports, its informal imports were quite significant compared to other crossing points. In 2007, nearly 85 percent of informal exports went through Oraba, Mpondwe, Busia, Nimule, and Mutukula border stations while 70 percent of the informal imports went through five border stations of Busia, Nimule, Mpondwe,Malaba and Odramachaku 32

42 Table 10: 2007 Informal Exports and Imports by Border Station, Value and Percentage Share Station Exports (US $ percent Share Imports (US $) percent Share Oraba 403, , Mpondwe 104, , Busia 65, , Nimule 53, , Mutukula 37, , Katuna 22, Odramachaku 22, , Malaba 13, , Ntoroko 13, Mirama Hills 12, Bunagana 5, , Vvura 5, , Suam River 3, Cyanika 3, Lwakhakha 2, , Paidha 2, , Ishasha River 1, Kikagati 1, Goli Sono , Totals 776, , Modes of Transport The Table 11 below shows the modes of transport used in conveying informally traded goods. The main modes of transport were vehicles, bicycles and head/hand with a combined value of US $ million (95.5 percent) and US $ 50.2 million (87.6 percent) of the total informal exports and imports respectively. The Vehicle mode of transport accounted for the highest share of 81.9 percent in transportation of informal exports worth US $ million and 33.3 percent (US $ 19.1 million) of the informal imports. Vehicles were mostly used in Oraba, Mpondwe, Nimule, Katuna and Mutukula border posts. Bicycles ranked second in conveyance of goods valued at US $ 80.7 million (10.4 percent) of exports and US $ 19.8 million (34.6 percent) of imports. Head/Hand came third as a means of transport accounting for goods estimated at US $ 24.8 million (3.2 percent) of exports and US $ 11.3 million (19.7 percent) of imports. Pushcarts ranked fourth taking a share of 2.0 percent (US$ 15.8 million) of exports and 1.9 percent (US$ 1.1 million) of imports. Boat/Canoe conveyed goods worth a share of US $ 13.6 million (1.7 percent) of exports and US $ 0.7 million (1.3 percent) of imports. Goods destined to DRC through Ntoroko border point were transported using boats. Wheel Chairs used by people with disabilities accounted for US $ 3.7 million (6.4 percent) of imports and only US $ 1.6 million (0.2 percent) of exports. This suggests that people with disabilities participate in transporting informal imports of industrial goods that are light but valuable. The people with disabilities are mainly hired by traders especially along Uganda/Kenya border to ferry goods into Uganda such as sugar, salt, soap cooking oil and plastics. 33

43 Other modes of transport which include motorcycles and animals (mainly donkeys), contributed US $ 4.2 million (0.5 percent ) of exports and US $ 1.6 million (2.7 percent) of imports transacted under informal arrangement for the period under review. Table 11: 2007 Modes of transport by Value and Percentage Share of Exports and Imports Mode Product Exports ('000 US $) percent Share Imports ('000 US $) percent Share Head/Hand All products 24, , Agricultural products 8, , Industrial products 15, , Other products Bicycle All products 80, , Agricultural products 51, , Industrial products 28, , Other products Push Carts All products 15, , Agricultural products 11, Industrial products 4, Other products Vehicles All products 635, , Agricultural products 98, , Industrial products 531, , Other products 5, Boat/Canoe All products 13, Agricultural products Industrial products 12, Other products Wheel Chairs All products 1, , Agricultural products Industrial products 1, , Other products Others All products 4, , Agricultural products 1, Industrial products 2, Other products Total 776, ,

44 CHAPTER FIVE: ICBT IMPLICATIONS, CONCLUSIONS AND RECOMMENDATIONS This chapter provides a summary of the survey findings; states the implications of informal trade activities and suggests possible recommendations. It further highlights challenges and the way forward. 5.1 Summary of findings The main findings of the survey are as follows: 1) Informal cross border trade between Uganda and her neighbours is significant and involves transactions of large amounts of both agricultural and industrial products. 2) During 2007, Uganda s informal exports were estimated at US $ million while imports were estimated at US $ 57.2 million with a trade surplus of US $ million. The estimated total export earnings (formal and informal trade) were US $ 2.11 billion in 2007 compared to an estimated value of US $ 1.19 billion in ) Uganda had a comparative advantage in export of industrial and agricultural products to all neighbouring countries. The overall earnings from informal exports of agriculture and industrial products were estimated at US $ million and US $ million respectively. 4) Sudan was the main export destination for manufactured products from Uganda accounting for 51.9 percent of the total export earnings. 5) Fish and maize were the main informal exports among the agricultural products whose earnings were estimated at U $ 53.3 million and US $ 18.7 million in 2007 respectively. The two main imported industrial products were clothes (new and second hand) and polythene paper/bags valued at US $ 6.8 million and 5.6 million respectively. The effect of the fiscal policy that could have contributed to the drastic reduction in the value of imported polythene bags from US $ 25.9 million in 2006 to US $ 5.6 million in 2007, affected the overall imports bill in 2007 compared to the previous years. 6) Vehicles and bicycles were the main means of transport for informal exports while hand/head and bicycles were mainly used for imports. 7) During 2007, Oraba and Busia border posts were the busiest for informal exports and imports respectively. 5.2 Implications Price competitiveness of informal goods Agricultural commodities traded under ICBT were predominantly raw materials with virtually no value added. Under ICBT, no particular standards and quality control measures are observed hence adversely impacting on the price competitiveness of the traded products Domestic industrial competition Domestic industries face stiff competition from cheap goods produced from neigbouring countries, especially manufactured goods from Kenya, whose industries are enjoying economies of scale. 35

45 5.3 Conclusion and recommendations Recommendations 1. The agricultural commodities transacted under informal trade like maize, beans, rice, groundnuts, and tubers (cassava, Irish potatoes, and yams) have a direct implication on the country s food security situation. Building silos and applying modern preservative methods on perishable commodities in bumper harvest period could ensure availability of such foodstuffs during scarcity times is highly recommended. This would lessen the burden of the government to meet food demands during disasters when the country experiences food scarcity. 2. Regional states should initiate joint trade policies that target players in informal trade in order to enhance their income and product competitiveness. The current EPA negotiations if implemented (where EU and USA farmers obtain subsidies) could distort prices thereby exacerbating the poverty situation in most Africa countries. Hence the negotiations should also take into account the interest of informal traders. The harmonization of fiscal policies in the region could contribute to price stability and mitigate the impact of informal trade transactions on the economies concerned. 3. Government should introduce a legal framework that compels informal traders to declare their merchandise at the time of crossing whether on bicycle or foot. Simplified procedures and documents similar to COMESA STR should be designed and administered by URA and its stakeholders. Moreover sensitization of trader s is crucial in achieving this objective. 4. There is need for sensitization of various stakeholders including customs, immigration, police, and other border authorities to enhance coordination of their activities in guiding informal traders. The awareness should focus on the rights of informal traders and the need to declare their goods formally. 5. A number of border posts are operating below capacity due to infrastructural problems. A case in point is Sono where the road connecting Uganda to Kenya is impassable especially during the rainy season and the river separating the two countries has no bridge. It is thus recommended that infrastructural development be given priority in areas where volume of trade is increasing steadily. 6. Value addition pursued under the National Export Strategy (NES) should be implemented in order to improve on price and the quality of traded commodities under informal trade. Informal traders should be supported by institutions responsible for standards and quality control to improve on their products. Such services could make their products competitive in the region and global market where competition is stiff. Traders engaged in sale of agricultural commodities should be encouraged to form cooperatives to bargain for favourable prices. 7. Given the good performance of informal cross border trade and its potential to grow, the government in partnership with the private sector should take advantage of the peace in South Sudan, DRC and the return of peace in the Northern Uganda by planning strategically and developing markets at the border points. This would ensure that the border residents harness the proceeds of informal trade to increase household incomes. 8. All the neghbouring countries should be encouraged to under take ICBT survey to generate statistics for comparison purposes. 36

46 5.4 Challenges The insecurity problem is still a strong impediment to trade which result into loss of merchandise and lives of traders. Some border posts close completely for weeks and months and movement of persons is restricted leading to slow down of business activities at the border posts. Countries should jointly address the insecurity issue along the borders to promote trade and development. Recording and pricing of assorted goods was problematic due quality and quantity variation. The porous nature of the Ugandan borders is a major challenge that needs to be addressed in order for the survey to capture accurate trade flows during monitoring. 37

47 REFERENCES 1. Ackello-Ogutu, Chris, (1996), Methodologies for Estimating Informal Cross-border Trade in Eastern and Southern Africa : A USAID SD Publication Series; Office of Sustainable Development Bureau for Africa 2. Ackello-ogutu, Chris (July 1997), Unrecorded Cross-Border Trade between Kenya and Uganda Implications for Food Security. SD Publication Series; Office of Sustainable Development Bureau for Africa. 3. John Mwaniki; the Impact Of Informal Cross Border Trade On Regional Integration In SADC And Implications For Wealth Creation. 4. L. W. Mauyo, J. R. Okalebo, R. A. Kirkby, R. Buruchara, M. Ugen and R.O. Musebe; Legal and Institutional Constraints to Kenya-Uganda Cross-Border Bean Marketing 38

48 APPENDIX I: LIST OF TABLES Table 12: 2007 ICBT Exports by Destination, Commodity Type and Value (Shs & US$) Country Commodity Unit Quantity Value Shs US $ Percent Share DRC Maize Kg 307,293 81,901,128 48, Beans Kg 356, ,679, , Sugar Kg 330, ,193, , Other Grains Kg 11,121,001 43,957,463,189 24,389, Bananas Kg 57, ,971,249 61, Other Agricultural Multiple 191,221, ,948,626, ,190, Fish Kg 4,246,689 5,972,532,181 3,430, Industrial Products Multiple 203, ,470, , Other Products Multiple 9,997,573 6,178,411,488 4,005, Kenya Maize Kg 58,211,983 15,828,859,190 10,335, Beans Kg 11,052,707 9,120,867,681 5,335, Sugar Kg 15,879,306 14,094,080,064 8,289, Other Grains Kg 6,675,040 16,081,366,293 8,740, Bananas Kg 12,084 23,549,483 12, Other Agricultural Multiple 15,106,485 52,849,572,263 29,579, Fish Kg 31,928,253 30,481,151,615 17,587, Industrial Products Multiple 19,396,299 8,988,921,074 5,948, Other Products Multiple 1,865, ,410, , Rwanda Maize Kg 17,482,337 7,408,105,542 5,190, Beans Kg 9,492,960 1,851,364,094 1,624, Sugar Kg 2,974,850 3,030,410,871 1,768, Other Grains Kg 18,114 53,569,878 30, Bananas Kg 57, ,734,752 60, Other Agricultural Multiple 27,757,656 49,857,847,228 26,444, Fish Kg 5,418,238 4,009,491,397 2,519, Industrial Products Multiple 3,322,734 2,061,942,975 1,288, Other Products Multiple 1,499, ,750, , Sudan Maize Kg 5,232,210 3,249,442,688 1,884, Beans Kg 4,063,880 6,740,220,824 3,898, Sugar Kg 7,614,673 10,317,690,085 5,946, Other Grains Kg 4,744,217 35,462,416,390 20,077, Bananas Kg 705,201 1,295,117, , Other Agricultural Multiple 144,251, ,692,649, ,752, Fish Kg 26,127,532 66,775,145,508 38,360, Industrial Products Multiple 5,389,378 4,746,870,571 2,752, Other Products Multiple 4,254,364 1,282,958, , Tanzania Maize Kg 7,537,777 2,094,352,249 1,229, Beans Kg 1,011, ,865, , Sugar Kg 2,399,197 2,427,697,272 1,397, Other Grains Kg 14,181 26,205,359 14, Bananas Kg 266,345,046 57,655,255,159 34,557, Other Agricultural Multiple 7,927 39,201,029 21, Fish Kg 261, ,385, , Industrial Products Multiple 603, ,800, , Other Products Multiple 1,868, ,825, , Total 1,351,877,344, ,508,

49 Table 13: 2007 ICBT Imports by Origin, Commodity Type and Value (Shs & US$) Country Commodity Unit Quantity Value (Shs) US $ percent Share DRC Maize Kg 747, ,475, , Beans Kg 4,947, ,432,632, ,045, Sugar Kg 83, ,536, , Other Grains Kg 1,588, ,709, , Bananas Kg 6,959, ,505,936, ,672, Other Agricultural Multiple 12,602, ,210,484, ,006, Fish Kg 106, ,764, , Industrial Products Multiple 12,291, ,908,684, ,962, Other Products Multiple 1,471, ,813, , Kenya Maize Kg 1,287, ,908, , Beans Kg 101, ,751, , Sugar Kg 1,099, ,039,033, ,156, Other Grains Kg 1,328, ,604,602, , Bananas Kg 158, ,823, , Other Agricultural Multiple 4,492, ,874,449, ,279, Fish Kg 66, ,905, , Industrial Products Multiple 22,620, ,765,290, ,224, Other Products Multiple 721, ,032, , Rwanda Maize Kg 1, ,242, Beans Kg 28, ,805, , Other Grains Kg 7, ,656, , Bananas Kg 4, ,184, Other Agricultural Multiple 623, ,678, , Fish Kg , Industrial Products Kg 132, ,150, , Other Products Multiple 14, ,272, , Sudan Maize Kg 14, ,560, , Beans Kg 170, ,775, , Sugar Kg 124, ,909, , Other Grains Kg 153, ,488, , Bananas Kg 4, ,410, , Other Agricultural Multiple 508, ,995,643, ,153, Fish Kg 7, ,114, , Industrial Products Multiple 1,939, ,254,428, ,118, Other Agricultural Multiple 4, ,689, , Tanzania Maize Kg 54, ,549, , Beans Kg 1,410, ,917, , Sugar Kg 76, ,532, , Other Grains Kg 229, ,079, , Bananas Kg 778, ,110, , Other Agricultural Multiple 1,119, ,248,711, , Fish Kg 31, ,863, , Industrial Products Multiple 1,778, ,534,670, , Other Products Multiple 1,064, ,072, , Total 99,102,526, ,238,

50 Table 14: 2007 Exports by Customs Station, Commodity Type, Quantity and Value (Shs & US$) Customs Commodity Unit Quantity Value (Shs) US $ percent Station Share Bunagana Maize Kgs 11,955 4,756,000 2, Beans Kgs 74,534 73,826,707 42, Sugar Kgs 1,174 2,204,207 1, Other Grain Kgs 19,920 17,634,917 10, Bananas Kgs , Other Agric Multiple 202, ,237, , Fish Kgs 1,111,677 4,026,211,207 2,133, Industrial Multiple 4,185,309 4,730,479,939 2,734, Other Product Multiple 492, ,255, , Busia Maize Kgs 34,423,076 10,091,731,166 6,513, Beans Kgs 12,127,563 11,242,763,862 6,633, Sugar Kgs 6,219 12,506,915 7, Other Grain Kgs 15,918,429 7,008,353,992 4,748, Bananas Kgs 1,765,458 1,567,633, , Other Agric Multiple 21,891,054 22,700,935,001 13,047, Fish Kgs 4,832,692 11,906,039,553 6,462, Industrial Multiple 12,313,103 47,719,276,066 26,627, Other Product Multiple 396, ,891,212 76, Cyanika Maize Kgs 2,829,238 1,638,730, , Beans Kgs 461, ,477, , Sugar Kgs , Other Grain Kgs 1,597,274 1,089,980, , Bananas Kgs 16,889 9,995,801 5, Other Agric Multiple 151, ,129,477 78, Fish Kgs 9,161 30,641,599 17, Industrial Multiple 911,788 2,759,751,605 1,591, Other Product Multiple 162,387 48,869,122 28, Goli Beans Kgs 12,786 11,257,600 6, Sugar Kgs , Other Grain Kgs , Other Agric Multiple 66, ,900,235 62, Industrial Multiple 465, ,097, , Other Product Multiple 302, ,263, , Ishasha River Maize Kgs 228,425 52,255,817 29, Beans Kgs 9,025 8,574,252 5, Sugar Kgs 2,163 2,642,161 1, Other Grain Kgs 40,734 29,512,425 16, Bananas Kgs 40,108 14,076,889 9, Other Agric Multiple 278, ,689, , Fish Kgs 358,815 1,347,341, , Industrial Multiple 871,520 1,936,742,095 1,042, Other Product Multiple 8,909 3,053,692 1,

51 Table 14 cont: Exports by Customs Station, Commodity Type, Quantity and Value (Shs & US$) Customs Commodity Unit Quantity Value (Shs) US $ percent Station Share Katuna Maize Kgs 13,393,121 5,314,089,008 3,883, Beans Kgs 1,749,237 1,721,372,000 1,006, Sugar Kgs 13,931 27,248,041 15, Other Grain Kgs 643, ,428, , Bananas Kgs 3,234, ,048, , Other Agric Multiple 4,859,835 3,231,055,696 2,114, Fish Kgs 8 20, Industrial Multiple 20,935,060 24,635,370,039 14,898, Other Product Multiple 679,297 43,061,050 71, Kikagati Maize Kgs 2,182 1,075, Beans Kgs 2,470 2,802,207 1, Sugar Kgs , Other Grain Kgs 102,363 58,996,097 34, Bananas Kgs 136,777 53,038,317 30, Other Agric Multiple 17,101 14,722,939 8, Fish Kgs 9,411 11,363,502 6, Industrial Multiple 1,619,244 1,144,279, , Other Product Multiple 1,819, ,340, , Lwakhakha Maize Kgs 4,594,848 1,044,983, , Beans Kgs 1,254, ,233, , Sugar Kgs 4,446 8,503,165 4, Other Grain Kgs 35,992 27,286,333 16, Bananas Kgs 3,419,151 1,854,714,636 1,131, Other Agric Multiple 348, ,927, , Fish Kgs 140, ,514, , Industrial Multiple 467, ,898, , Other Product Multiple 352,879 2,708,891 17, Malaba Maize Kgs 2,563, ,725, , Beans Kgs 456, ,396, , Sugar Kgs 60 94, Other Grain Kgs 3,224,555 1,843,827,584 1,120, Bananas Kgs 5,787,016 5,648,011,184 3,251, Other Agric Multiple 8,615,281 7,013,645,003 4,090, Fish Kgs 1,702,159 3,832,812,032 2,084, Industrial Multiple 1,965,932 4,390,969,129 2,514, Other Product Multiple 1,115,331 9,733,494 89, Mirama Hills Maize Kgs 1,256, ,486, , Beans Kgs 764, ,561, , Sugar Kgs 43,114 95,877,711 45, Other Grain Kgs 1,081, ,534, , Bananas Kgs 6,241, ,319, , Other Agric Multiple 405, ,935, , Fish Kgs 8,945 22,908,279 13, Industrial Multiple 5,908,156 22,451,590,571 9,947, Other Product Multiple 657,674 34,820,484 76,

52 Table 14 cont: Exports by Customs Station, Commodity Type, Quantity and Value (Shs & US$) Customs Commodity Unit Quantity Value (Shs) US $ percent Station Share Mpondwe Maize Kgs 8,165 2,449,500 1, Beans Kgs 156, ,309,577 89, Sugar Kgs 3,585 7,697,176 4, Other Grain Kgs 72,900 99,208,595 57, Bananas Kgs 150,906 48,758,082 30, Other Agric Multiple 2,735,315 2,834,380,148 1,660, Fish Kgs 7,955,964 31,774,481,537 17,670, Industrial Multiple 164,357, ,620,377,041 85,049, Other Product Multiple 8,850, ,854, , Mutukula Maize Kgs 7,535,595 2,093,276,997 1,228, Beans Kgs 2,396,727 2,424,895,064 1,396, Sugar Kgs 7,514 38,335,479 20, Other Grain Kgs 501, ,804, , Bananas Kgs 874, ,827, , Other Agric Multiple 244, ,662, , Fish Kgs 4,770 14,841,857 8, Industrial Multiple 264,725,801 56,510,975,808 33,893, Other Product Multiple 49, ,485,217 69, Nimule Maize Kgs 1,694,607 1,455,471, , Beans Kgs 1,360,366 2,163,175,421 1,259, Sugar Kgs 23,935 53,025,075 30, Other Grain Kgs 1,093, ,187, , Bananas Kgs 1,550,939 2,591,732,854 1,505, Other Agric Multiple 4,578,746 17,877,220,106 10,386, Fish Kgs 491,393 2,240,279,866 1,302, Industrial Multiple 18,302,266 64,290,362,190 37,351, Other Product Multiple 31,386 51,009,810 29, Ntoroko Beans Kgs , Sugar Kgs 11,960 24,700,000 13, Other Grain Kgs 10,548 15,984,984 9, Bananas Kgs 122, ,710,845 59, Other Agric Multiple 439,132 1,379,768, , Industrial Multiple 8,204,918 22,092,425,503 12,686, Other Product Multiple 2,028 12,519,015 7, Odramachaku Maize Kgs 35,550 14,894,557 10, Beans Kgs 26,814 27,098,859 15, Sugar Kgs 13,937 21,256,098 12, Other Grain Kgs 45,071 27,809,206 16, Bananas Kgs 17,861 8,454,143 5, Other Agric Multiple 403, ,408, , Fish Kgs 1,212,327 5,342,233,769 3,030, Industrial Multiple 10,215,651 34,493,368,754 18,615, Other Product Multiple 190, ,018, ,

53 Table 14 cont: Exports by Customs Station, Commodity Type, Quantity and Value (Shs & US$) Customs Commodity Unit Quantity Value (Shs) US $ percent Station Share Oraba Maize Kgs 3,541,203 1,795,770,981 1,038, Beans Kgs 6,254,308 8,154,514,664 4,687, Sugar Kgs 681,266 1,242,092, , Other Grain Kgs 4,295,651 3,879,682,585 2,247, Bananas Kgs 2,512,940 4,148,487,970 2,392, Other Agric Multiple 21,550,072 48,966,295,852 28,014, Fish Kgs 4,252,823 33,222,136,524 18,774, Industrial Multiple 125,951, ,413,421, ,407, Other Product Multiple 4,222,979 1,231,948, , Paidha Maize Kgs 15,190 4,358,695 2, Beans Kgs 44,759 31,234,794 18, Sugar Kgs 23,045 45,769,426 26, Other Grain Kgs 11,378 11,510,806 6, Bananas Kgs 24,374 5,434,222 3, Other Agric Multiple 45,156 42,914,218 25, Fish Kgs 287, ,492, , Industrial Multiple 1,685,489 3,100,641,532 1,785, Other Product Multiple 106,612 16,819,874 9, Sono Maize Kgs 101,817 44,449,214 25, Beans Kgs 128,937 96,793,970 55, Sugar Kgs , Other Grain Kgs 1,425 2,031,335 1, Bananas Kgs 56,778 34,933,182 20, Other Agric Multiple 643, ,628, , Industrial Multiple 65, ,239,788 60, Other Product Multiple , Suam River Maize Kgs 16,529,164 3,856,969,773 2,596, Beans Kgs 1,911,719 1,427,892, , Sugar Kgs 1,225 2,191,629 1, Other Grain Kgs 215, ,421,830 61, Bananas Kgs 24,304 15,575,358 9, Other Agric Multiple 429, ,015, , Industrial Multiple 294, ,188, , Other Product Multiple 55 22, Vvura Maize Kgs 8,009 3,186,558 1, Beans Kgs 5,863 5,791,645 3, Sugar Kgs 1,870 3,228,324 1, Other Grain Kgs 3,104 3,264,057 1, Bananas Kgs , Other Agric Multiple 76,542 77,233,612 46, Fish Kgs 194, ,702, , Industrial Multiple 1,235,628 3,262,493,929 1,867, Other Product Multiple 43,133 4,654,626,772 2,822, Total 1,351,877,344, ,508,

54 Table 15: 2007 Imports by Customs Station, Commodity Type, Quantity and Value (Shs & US$) Customs Station Commodity Unit Quantity Value (Shs) US $ Percent s hare Bunagana Maize Kg 218,590 93,622,824 75, Beans Kg 369, ,926, , Sugar Kg 650 1,299, Other Grain Kg 790, ,551, , Bananas Kg 775, ,440, , Other Agric Multiple 2,000,820 1,238,060, , Fish Kg 72, ,954,913 78, Industrial Multiple 660,947 1,616,721, , Other Product Multiple 461,646 20,315,338 11, Busia Maize Kg 825, ,918, , Beans Kg 87,962 80,160,417 46, Sugar Kg 521,212 1,065,250, , Other Grain Kg 1,228,900 1,488,283, , Bananas Kg 47,405 34,774,064 21, Other Agric Multiple 2,058,993 1,883,221,437 1,111, Fish Kg 44, ,892,579 62, Industrial Multiple 14,519,829 27,629,655,747 15,376, Other Product Multiple 15, ,071,660 75, Cyanika Other Grain Kg 4,596 2,152,543 1, Bananas Kg , Other Agric Multiple 84,278 31,759,546 18, Industrial Multiple 97, ,724,189 65, Other Product Multiple 2, , Goli Maize Kg 4,819 1,300, Beans Kg 188, ,893,209 67, Other Grain Kg 2, , Bananas Kg 26,339 9,882,276 5, Other Agric Multiple 314, ,059,714 69, Fish Kg 849 1,405, Industrial Multiple 4,535 7,603,876 4, Other Product Multiple 39 21, Ishasha River Maize Kg 9,189 5,447,069 3, Beans Kg 11,562 9,784,382 5, Sugar Kg , Other Grain Kg 9,237 4,650,554 3, Bananas Kg 88 31, Other Agric Multiple 72, ,056,905 56, Fish Kg 929 2,883,972 1, Industrial Multiple 112, ,226, , Other Product Multiple 17,089 3,683,034 3,

55 Table 15: Cont Imports by Customs Station, Commodity Type, Quantity and Value (Shs & US $) Customs Station Commodity Unit Quantity Value (Shs) US $ percent Share Katuna Maize Kg , Beans Kg 7,212 7,038,839 4, Bananas Kg 3, , Other Agric Multiple 516, ,271, , Fish Kg , Industrial Multiple 21,261 23,817,227 14, Other Product Multiple 12,000 2,049,935 1, Kikagati Maize Kg 21,455 4,594,628 2, Beans Kg 851, ,404, , Sugar Kg , Other Grain Kg 4,777 4,431,397 2, Bananas Kg 567,833 99,066,047 57, Other Agric Multiple 124,081 64,812,978 37, Fish Kg 408 2,160,500 1, Industrial Multiple 62,604 81,563,237 47, Other Product Multiple 39,919 3,174,371 1, Lwakhakha Maize Kg 41,947 14,871,397 10, Beans Kg 7,066 5,527,065 3, Sugar Kg 69, ,963,541 73, Other Grain Kg 4,917 6,236,101 3, Bananas Kg 10,972 6,171,357 3, Other Agric Multiple 127,995 73,009,427 43, Fish Kg 1,667 1,647, Industrial Multiple 1,568,884 1,504,603, , Other Product Multiple 17,733 4,173,556 2, Malaba Maize Kg 29,065 9,027,445 5, Beans Kg 3,746 3,574,927 2, Sugar Kg 194, ,586, , Other Grain Kg 85, ,408,739 58, Bananas Kg 63,357 37,956,554 22, Other Agric Multiple 824, ,008, , Fish Kg 14,944 33,547,184 19, Industrial Multiple 2,516,758 6,980,961,554 3,899, Other Product Multiple 30,610 8,255,969 5, Mirama Hills Maize Kg 1, , Beans Kg 21,435 14,766,535 9, Other Grain Kg 2,465 1,503, Bananas Kg , Other Agric Multiple 23,069 18,647,348 10, Fish Kg 26 75, Industrial Multiple 13,586 12,609,155 7,

56 Table 15 Cont: Imports by Customs Station, Commodity Type, Quantity and Value (Shs & US $) Customs Commodity Unit Quantity Value (Shs) US $ percent Station Share Mpondwe Maize Kg 33,949 8,927,432 7, Beans Kg 265, ,522, , Sugar Kg 1,901 3,930,320 1, Other Grain Kg 111,476 95,058,269 55, Bananas Kg 4,008,389 1,121,843, , Other Agric Multiple 1,144, ,110, , Industrial Multiple 10,052,441 6,353,216,874 3,829, Other Product Multiple 836, ,048, , Mutukula Maize Kg 32,698 6,954,512 4, Beans Kg 558, ,512, , Sugar Kg 76, ,399,353 81, Other Grain Kg 225, ,647, , Bananas Kg 210,482 44,044,428 37, Other Agric Multiple 995,146 1,183,898, , Fish Kg 31, ,702, , Industrial Multiple 1,716,035 1,453,107, , Other Product Multiple 1,024, ,897, , Nimule Beans Kg 147, ,586, , Sugar Kg 89, ,683,033 87, Other Grain Kg 88, ,253,036 84, Bananas Kg 1,558 1,209, Other Agric Multiple 185,616 1,479,022, , Fish Kg 7,047 16,925,695 9, Industrial Multiple 1,413,595 10,963,793,918 6,371, Other Product Multiple 31 1,450, Ntoroko Other Agric Multiple 62,444 87,489,223 50, Odramach aku Fish Kg 24, ,877, , Industrial Multiple 139, ,791, , Maize Kg 101,572 44,446,569 28, Beans Kg 260, ,270, , Sugar Kg 80, ,916,185 74, Other Grain Kg 168, ,580,929 90, Bananas Kg 27,376 12,906,305 8, Other Agric Multiple 3,323,476 3,970,044,994 2,231, Fish Kg , Industrial Multiple 1,038,257 2,463,044,027 1,420, Other Product Multiple 61,433 19,270,753 14, Oraba Maize Kg 14,165 7,560,198 4, Beans Kg 22,902 27,188,954 15, Sugar Kg 35,340 64,226,956 37, Other Grain Kg 64,436 62,235,294 36, Bananas Kg 3,074 4,201,088 2, Other Agric Multiple 323, ,621, , Fish Kg 463 2,188,564 1, Industrial Multiple 525,950 1,290,621, , Other Product Multiple 4,575 2,239,423 1,

57 Table 15 Cont: Imports by Customs Station, Commodity Type, Quantity and Value Shs & US $) Customs Commodity Unit Quantity Value (Shs) US $ percent Station Share Paidha Maize Kg 55,566 24,023,404 14, Beans Kg 3,361,888 2,103,191,510 1,250, Other Grain Kg 4,502 2,906,358 1, Bananas Kg 63,491 19,151,388 12, Other Agric Multiple 2,080,639 2,331,512,026 1,347, Fish Kg 5,057 9,273,678 5, Industrial Multiple 113, ,341, , Other Product Multiple 10,603 3,478,636 2, Sono Maize Kg 294,717 57,315,785 33, Beans Kg 1, , Sugar Kg 294, ,018, , Other Grain Kg 4,275 4,758,839 2, Bananas Kg 20,001 4,454,632 2, Other Agric Multiple 1,436,682 1,139,878, , Industrial Multiple 2,755,422 2,222,138,197 1,285, Other Product Multiple 9,226 1,984,338 1, Suam River Maize Kg 96,462 36,775,348 22, Beans Kg , Sugar Kg 19,356 36,214,666 19, Other Grain Kg 5,032 2,915,456 1, Bananas Kg 16,780 12,466,848 7, Other Agric Multiple 79,982 63,894,474 39, Fish Kg 4,866 16,817,602 9, Industrial Multiple 1,259,603 1,427,944, , Other Product Multiple 647,915 39,546,951 33, Vvura Maize Kg 323, ,707,568 90, Beans Kg 489, ,043, , Sugar Kg 43 71, Other Grain Kg 501, ,104, , Bananas Kg 2,058,516 1,100,680, , Other Agric Multiple 3,567,528 1,588,587,391 1,004, Fish Kg 2,059 6,398,376 2, Industrial Multiple 169, ,739, , Other Product Multiple 84,279 15,995,687 18, Total 99,102,526, ,238,

58 Table 16: 2007 ICBT Exports by Commodity, Quantity and Value (U Shs & US$) Commodity Unit Quantity Value (Shs) US $ percent Share Maize Kg 88,771,600 28,662,660,796 18,687, Beans Kg 29,198,470 30,182,071,725 17,582, Sugar Kg 840,730 1,589,574, , Other Grains Kg 28,916,227 16,297,005,405 10,328, Bananas Kg 25,976,914 18,423,997,795 11,337, Other Agricultural Commodities Multiple 67,981, ,721,706,373 62,171, Fish Kg 22,572,551 95,581,021,110 53,252, Industrial Products Multiple 644,681,839 1,045,003,949, ,524, Other products Multiple 19,485,470 8,415,357,434 5,724, Total 1,351,877,344, ,508, Table 17: 2007 ICBT Imports by Commodity, Quantity and Value (UShs & US$) Commodity Unit Quantity Value (Shs) US $ percent Share Maize Kg 2,104, ,735, , Beans Kg 6,657,870 4,715,882,773 2,832, Sugar Kg 1,383,885 2,532,011,990 1,439, Other Grains Kg 3,306,696 2,914,535,661 1,655, Bananas Kg 7,906,231 2,751,465,549 1,828, Other Agricultural Commodities Multiple 19,346,213 17,835,967,556 10,467, Fish Kg 212,598 1,441,823, , Industrail Products Multiple 38,763,044 65,613,223,872 37,279, Other products Multiple 3,276, ,879, , Total 99,102,526,233 57,238,

59 Table 18: 2007 Major Informal Exports of Agricultural and Industrial Products to EAC Country Item Value (US $) percent Share Kenya Agricultural products 56,237, Maize 10,335, Fish 8,740, Beans 8,289, Ground Nuts 5,836, Bananas 5,331, Millet Grain 4,555, Tomatoes 2,320, Eggs 1,609, Water Melons 1,472, Sorghum 1,276, Peas 1,028, Oranges 880, Pineapples 763, Potatoes 747, Simsim 552, Mangoes 538, Cassava 396, Onions 240, Lemons 239, Soya Beans 182, Other Industrial Products 29,592, Shoes 16,994, Bitenges 3,382, Clothes 2,783, Petroleum Jelly 1,427, Dry Cells 642, Maize Flour 525, Charcoal 470, Bed Covers 339, Bags 329, Scrap 312, Timber 309, Suit Cases 233, Ropes 227, Bed Sheets 184, Bicycle Parts 136, Millet Flour 115, Other 1,177, Other Products 183,

60 Table 18 Cont: 2007 Major Exports of Agricultural and Industrial Products to EAC Country Item Value (US $) percent Share Rwanda Agricultural Products 12,422, Maize 5,190, Beans 1,768, Bananas 1,627, Sorghum 1,061, Potatoes (Irish) 979, Tobacco 628, Ground Nuts 168, Rice 166, Apples 142, Pineapples 199, Peas 72, Millet Grain 60, Oranges 52, Goats 40, Other 262, Industrial Products 26,504, Maize Flour 7,812, Shoes 6,566, Clothes 4,987, Bicycle Parts 384, Polythene Bags 362, Matresses 344, Computer Accessories 259, Fertilizers 252, Suit Cases 235, Bitenges 227, Biscuits 205, Juice 203, Bags 202, Dry Cells 183, Cememt 176, Tanks 155, Other 3,944, Other Products 176,

61 Table 18 Cont: 2007 Major Exports of Agricultural and Industrial Products to EAC Country Item Value (US $) percent Share Tanzania Agricultural Products 3,505, Beans 1,397, Maize 1,229, Bananas 371, Millet Grain 125, Eggs 105, Sorghum 91, Ground Nuts 46, Coffee Seedlings 36, Tomatoes 23, Fish 14, Water Melons 8, Potatoes (Irish) 8, Chicken 5, Other 38, Industrial Products 34,578, Human Medicine 5,310, Polythene Bags 4,519, Shoes 3,979, Clothes 2,966, Clothes (New) 2,671, Match Boxes 1,761, Alcohol/Spirits 1,610, Maize Flour 1,539, Bitenges 1,351, Sandals 1,037, Shoes (New) 722, Veterinary Medicine 469, Body Cream 468, Slippers 377, Bags 296, Blankets 295, Shoes (Second Hand) 291, Panties 230, Pesticides 225, Other 4,453, Other Products 401, Total 163,602,

62 Table 19: 2007 Major Informal Imports of Agricultural and Industrial Products from EAC Country Item Value (US $) percent Share Kenya Agricultural products 3,537, Coffee (Unprocessed) 990, Rice 806, Potatoes (Irish) 353, Peas 281, Maize 191, Passion Fruits 135, Milk (Fresh) 107, Fish 92, Other 578, Industrial Products 23,380, Polythene Bags 5,595, Clothes 3,576, Cooking Oil 1,286, Sugar 1,156, Shoes 750, Paraffin 684, Salt 586, Matresses 453, Mosquito Nets 443, Tanks 416, Soda 389, Basins 382, Sauce Pans 347, Cooking Fat 334, Soap 514, Bread 294, Diesel 294, Blankets 282, Soap (Powder) 269, Soap (Washing) 244, Flasks 229, Other 5,361, Other Products 118, Rwanda Agricultural products 314, Peas 70, Passion Fruits 65, Ovacadoes 40, Onions 32, Chicken 27, Berries 15, Beans 13, Other 48, Industrial Products 88, Alcohol/Spirits 22, Clothes 13, Veterinary Medicine 9, Mats (Art and Crafts) 8, Vehicle Parts 5, Beer 4, Other 24, Other Products 1,

63 Table 19 Cont: 2007 Major Informal Imports of Agricultural and Industrial Products from EAC Country Item Value (US $) percent Share Tanzania Agricultural products 1,741, Beans 592, Coffee (Unprocessed) 498, Fish 189, Rice 125, Bananas 93, Meat 45, Peas 42, Other 154, Industrial Products 966, Human Medicine 231, Cooking Oil 132, Ghee 113, Sugar 81, Bitenges 36, Soda 33, Clothes 32, Charcoal 24, Matresses 21, Honey 20, Fishing Nets 19, Cigarattes 13, Alcohol/Spirits 13, Shawls 12, Maize Flour 12, Other 165, Other Products 178, Total 30,328,

64 APPENDIX II: LIST OF ICBT TECHNICAL TEAM EXECUTIVES Mr. Emmanuel Tumusiime Mutebile Mr. J B Male-Mukasa COORDINATORS Mr. Y. Wassswa Kajubi Mrs. Alex Ntale Mr. Matthews Sewanyana Mr. John Mayende SUPERVISORS Mrs. Aliziki.K. Lubega Mrs. Rose Christine Tumwine MS. Rachael Musulube Mr. Ben Himbisa Mr. Yunus Koire Mr. Aggrey Kaziba Mr. Hudson Bunya ENUMERATORS Alsad Bigirimana A Namara Stella Oroma Abudul Mukomya Solome Bamanya Albert Kazoora Aloysius Dhungu Andiendu Amos Bena Angom R. Kironde Carl Andrua Christine Okello Conie Tukahirwa Charles Kawinya G. Walimbwa Juliet Birungi Fred Nguni Catherine Asimwe Grace Nayebare Goerge Odoch G. Wamalwa H. Ngabirano Irine Kabunga J Kintu Jackson Mafabi E Oketcha J. Arinanye Josephine Namuto John Ssenkumba Julius Hatanga Julius Nampurira Lydia Arago Namugenze Irene Susan Akello Norah Nabyonga Oliver Chebet Omar Zainab Patrick Wamala Peter Tushabe Rachael Asekenye Ruth Sentuya Irine Naliaka Solomon Mayanja Abudulreof Mwidu Sulaiman Mulawa Balibali M Tony Mwidyeki W Opio W. Walimbwa Fredrick Owinyi 55