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PHIONA RWANDARUGALI: Uganda-Rwanda relations; the border is open, now let us focus on improving trade between the two member states of the EAC

Phiona Rwandarugali is a managing partner with Ssewagudde Kalema & Co. Advocates Kampala –Uganda (PHOTO/Courtesy)

Phiona Rwandarugali is a managing partner with Ssewagudde Kalema & Co. Advocates Kampala –Uganda (PHOTO/Courtesy)

KAMPALA – At the end of January this year 2022, Rwanda re-opened its common border with Uganda after a three-year-long closure. The opening followed months of protracted engagements to solve the political impasse between the two countries of the EAC.

The impasse was brought about by counter-accusations between the two neighbours that saw their relationship deteriorate to a historically low level.

On the one hand, Rwanda accused Kampala of harassing its nationals and supporting dissidents bent on removing the government in Kigali, Kampala on the other hand accused Rwanda of conducting illegal espionage in Uganda.

But following several high-level talks at diplomatic, security, and Heads of State level, the tensions have gradually deescalated resulting into Rwanda opening the border to both passenger and cargo traffic.

The efforts to resolve the border disputes are commendable primarily because it is in the spirit of good neighborliness but also it takes us a step closer to a seamless, productive, and mutually beneficial regional integration that is in the national and regional interest of both countries.

Now, the two countries have to make up for a lost time, especially in terms of trade with each other.

According to the monitor newspaper of August 27th, 2020, Uganda’s exports had fallen to a paltry Shs. 328 million, compared to Shs. 52 billion that the country had fetched during the same time in the year 2019 thus explaining the damage caused by the boarder dispute.

For instance, in May 2019, Uganda’s earnings from Rwanda fell to $2.64 million (Shs. 9.9billion) down from $ 14.51 million (Shs 54.7 billion) in February.

Uganda’s exports to Rwanda range from electricity, agricultural produce, refined fuels, cement, milk, textiles, tents, sails, iron, and steel among others while Kigali mainly exports Cotton Fabrics, aluminum scrap, and poultry products.

According to the Bank of Uganda, the country has lost more than US$400 million in potential trade earnings from Rwanda since 2019, with Kigali losing less than half of that.

The absence of Ugandan goods on the Rwandan market coupled with the choice to use the central corridor trade route which is far and more expensive saw commodity prices in Kigali skyrocket, especially for food items like maize and other household items. The situation was Exacerbated by the COVID 19 pandemic which resulted in the breakdown of alternative local and international supply chains and inevitably led to economically debilitating shutdowns in both countries.

But now with the reopening of the border, bilateral trade is expected to improve starting this year 2022, benefitting sectors such as food and agriculture, mining, and iron and steel-related industries in the short-to-medium term.

Whereas this is good news, it can only take off if there is a continued political will by both governments to facilitate the smooth movement of goods, services, and people across the boarder in the true spirit of the EAC treaty and customs union.

The two countries and the region on the whole need to focus on eliminating all remaining non-tariff barriers on the northern corridor which the business community have decried for years now.

Currently, business people from both countries are already re-organizing themselves to win back a market that they have been out of for three years, and coming from a devastating pandemic, they will need full support from their governments.

This is not to overlook the informal business people doing informal trade in towns like Kyanika/Cyanika in Kisoro and Katuna in Kabale, on which their families and livelihoods largely depend. The governments should facilitate the informal sector in the border towns as their growth eventually into formal businesses enhances revenue collection and discourages smuggling and other illegal practices.

Uganda and Rwanda already have favourable road connections through both Kyanika and Katuna crossings thanks to the commitment of their governments to develop good infrastructure. But the two countries should also fast-track and harmonise the timelines of connecting their capitals onto the EAC standard gauge railway system, which has been a long outstanding issue.

It is a universally accepted principle that the economics of a country closely follows its politics. The EAC region is no exception. It follows that the recent visit of the president of Rwanda to Kampala after three years bodes extremely well for the economic relations between the two countries as well. It is greatly welcomed.

It is now time to focus on the true spirit of brotherhood between the two countries as enshrined in article 5(3) (f) and Article 6(b) of the EAC treaty. Let us now focus on fulfilling our commitments toward each other. Let us focus on improving the economic and social well-being of our people. Let us encourage open and honest dialogue to resolve our differences. For God and my Country, Jumuiya Africa Mashariki!

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Phiona Rwandarugali is an Advocate of the High Court of Uganda and Kenya and EALA MP Aspirant 2022-2027

1 Comment

1 Comment

  1. Peter Rwandarugari

    02/05/2022 at 8:26 PM

    Very good outline of social and economic politics. Ugandans should take the advantage of the available opportunities especially food supplies. Thank you Phiona Rwandarugali for your outline. Wish you success in your contesting for EALA MP SHIP.

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