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Border closure, delay in seasonal rains dampen business mood – New index

FILE PHOTO: Banana plantation

Kampala, Uganda | THE INDEPENDENT | Business owners’ mood for the operation climate dampened in the first months of 2019 when Rwanda closed its border with Uganda, a new business climate index has shown.

Also, the index says, the seasonal rains’ delay in the first season of this year meant farmers had to wait longer before they could plant, a move that might be reflected in food prices going up.

The index, published by Economic Policy Research Centre (EPRC), shows how business owners see the investment climate and how it would improve or decline in future.

“The agriculture sector registered the highest decline [in the mood] largely explained by delayed rains in most parts of the country. This point the index notes.

The delayed and below-average rains in the country are partly attributed to tropical cyclone Idai southern Africa, which drove moisture away from the East Africa region, the index says.

The below-average rains have led to a significant decline in agricultural labour demand and casual labour wages, reducing household income and food access. Three-quarters of Ugandans depend on the sector for survival.

On the issue of Rwanda closure of the Gatuna border, the results have been spectacularly disappointing. Monthly export earnings for Uganda from Rwanda have dropped by 85% from about $14m to less than $1m, according to figures from the Bank of Uganda.

Uganda Revenue Authority has indicated that while there was an improvement on trucks crossing at Mirama hills, many traders have mainly stayed away from Rwanda.

Dickson Kateshumbwa, the URA commissioner customs, said Rwanda border the closure has negatively hit companies that depended on Kigali to do most of their trade.

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