KAMPALA —In a move to boost exports and close budget funding gaps, Uganda has rolled out the Trade Frontier Fund (TFF) with an ambitious target of generating an additional USD 6bn (about UGX 22.4tn) in exports over the next five years.
Launched by President Museveni last week, TFF is an innovative program designed to facilitate and support the growth of exports in Uganda. Through the TFF, returnable resources will be made available to the private sector to support various aspects of the export process, such as invoice factoring, working capital, recapitalization, research and development, and value addition. TFF will target Tourism and Agriculture sectors with special focus on Coffee, Diary, Fruits and Vegetables, Flowers, Sugar, Poultry, Beef and Fish.
“The Trade Frontier Fund will help exporters to underwrite their invoices and provide them with working capital. We will continue to increase this fund. I thank the Private Sector Foundation, UNDP and others who have joined the efforts to increase our exports, drive manufacturing and industry and support the private companies,” President Museveni said, while launching the Trade Frontier Fund.
The Fund has been developed by the Presidential Advisory Committee on Exports and Industrial Development (PACEID) in collaboration with the Science, Technology, and Innovation Secretariat (STI) and Private Sector Foundation Uganda (PSFU).
According to Sarah Kagingo, the PSFU vice chairperson, the new fund will help boost exports as it will address funding gaps, stabilize supply chains and stimulate access to market information.
Productive day as revolving Trade Frontier Fund is launched; MoU between Private Sector Foundation Uganda @PSF_Uganda and @STIsecretariat at State House Entebbe.
As the Private Sector roots for patient capital to build sustainable business models, the Trade Frontier Fund with an… pic.twitter.com/mIa5pIbUna
— Sarah Kagingo (@SarahKagingo) April 22, 2023
“Despite the progress made in growing Uganda’s exports, there are still several challenges faced by our private sector players in accessing the export markets. One of the biggest challenges faced by our exporters is limited access to low interest and patient financing,” Kagingo said, adding;
“As private sector, we welcome the establishment of the Trade Frontier Fund which is expected to transform the entire trajectory of exports in Uganda. We wish to thank the President of Uganda and the government for committing seed funding to kick start Trade Frontier Fund.”
Led by Vice Chair @SarahKagingo, at State House Entebbe, we signed a Trade Frontier Fund MoU with @STIsecretariat.
The fund with $10M seed funding from @KagutaMuseveni will support exports of coffee, fruits, vegetables, flowers, dairy, grain, beef, poultry, sugar, fish & tourism pic.twitter.com/SZcxEAVIoC
— Private Sector Foundation Uganda (@PSF_Uganda) April 22, 2023
Uganda continues to grapple with balance of payment deficits. According to the Ministry of Finance, export earnings increased from $323.96 million in December 2021 to $371.81 million in December, 2022, representing a 15.1 percent growth.
Nonetheless Uganda continues to import more than it exports, the Ministry of Finance said the value of merchandise imports increased by 4.9 percent to $666.71 million in December 2022 from $635.60 million in November 2022.
Mr Odrek Rwabwogo, the PACEID chairperson noted that the new fund will sync Tourism and Agriculture, ensure that the country is marketed jointly and eventually grow export earnings.
“We need to get the country from bottom and bring forward what people don’t see every day. The more we expand the levers in Tourism and Agriculture, the better for the country.”
Uganda mostly exports agricultural products (80 percent of total exports). The most important export is coffee (22 percent of total exports) followed by tea, cotton, copper, oil and fish. Uganda’s main export partners are Sudan (15 percent), Kenya (10 percent), DR Congo, Netherlands, Germany, South Africa and UAE.