Mpondwe export zone to boost trade between Uganda and DR Congo

USD9.4m Trade infrastructure at Mpondwe border to boost Uganda’s exports to DR Congo

Kampala, Uganda | GODFREY SSALI | The Democratic Republic of Congo is one of Uganda’s export destinations ranking number three within the COMESA region. Uganda’s exports to DR Congo are valued at USD177m and these are mainly construction materials like lime and cement, iron and steel, cereals and fruits and vegetables. On the other hand, Uganda imports little from DR Congo with the values standing at USD2.5m and these are mainly essential oils, cosmetics and some iron and steel.

Most of the trade between Uganda and DR Congo is done at the three major border points of Mpondwe in Kasese district, Bunagana in Kiroso district and Goli in Nebbi district, with Mpondwe being the busiest border point in terms of trade activities. Most of the trade is conducted by the cross border traders who cross to and from Uganda taking and bringing back merchandise. However, most of these cross border traders are facing challenges including poor market structures where they operate from at the borders, complicated border crossing procedures, mistreatment from scrupulous individuals among others.

In order to address the challenges faced by these cross border traders, the Government of Uganda through the Ministry of Trade, Industry and Cooperatives secured a loan to a tune of $14m which is approximately shs.50.4bn from the World Bank to implement the Great Lakes Trade Facilitation Project (GTLF) which is aimed at facilitating cross border trade between Uganda and DR Congo at the three borders of Mpondwe, Bunagana and Goli. The project aims at increasing the capacity for commerce and reducing the costs faced by the cross border traders.

Through the Great Lakes Trade Facilitation Project, the Ministry of trade in collaboration with the Ministry of works and transport and the border agencies will construct appropriate infrastructure that improves conditions at borders and increases capacity to trade together, put in place measures that simplify border crossing procedures especially the customs procedures and improve the standards of treatment of traders and officials.

With funds from the World Bank, Government has started preparations for the construction of a One Stop Border Post (OSPB) and a Border Export Zone/modern Border Market at Mpondwe to create a conducive environment for the cross border traders.

The Minister of State for Cooperatives Hon. Fredrick Ngobi Gume, on Friday March 2^nd 2018 led a team of members of Parliament on the Tourism, Trade and Industry Committee for a monitoring visit to the proposed construction site for both the One Stop Border Post and Border Export Zone at Mpondwe.

Minister Gume told MPs that Government has already secured 4.3 acres of URA land for the construction of the OSBP and is currently negotiating with squatters for an extra 6.9 acres for construction the OSBP at Mpondwe. “We have done the boundary opening for the land and we are negotiating for an extra 6.9 acres that goes up to the border line, to enable government have full control of the Mpondwe border point”, explained Gume.

The Minister also told MP’s that for the modern border market, land has already been secured and the Ministry has called for proposals to procure companies that will do the actual construction for both the OSBP and the border market. The construction of the two structures will cost USD9.4m with the actual construction expected to begin at the end of 2018.

The GTLF project coordinator and Principle commercial Officer in the Ministry of trade Steven Kamukama says the OSBP project is concurrently being implemented by DR Congo and the facility will house all government agencies from Uganda and DR Congo under one roof to complete all entry and exit formalities for both passengers and cargo. This will reduce the time of clearance for cross border traders and other users. Kamukama says the same infrastructure will be constructed in Bunagana and Goli, however these two are still awaiting funding.

The Chairperson of the Parliamentary Committee on Tourism, Trade and Industry Alex Ruhunda, however, cautioned the implementing agencies to directly involve the local leaders and the traders in Mpondwe in the implementation of the project.

With the completion of the project, the revenue collection at the Mpondwe border is expected to increase. The in-charge of Uganda Revenue Authority at the border Sabiiti Fred says URA been losing a lot of revenue due to smuggling which is encouraged by the open border.

“Currently, we clear around 60 trucks everyday and we collect an average of shs.250m per month, but with the construction of the OSBP this revenue is expected to increase to shs.400m per month”, said Sabiiti.

In addition to the OSBP and modern border market, the Ministry of trade has established a trade information desk at Mpondwe border to assist cross border traders in doing business. The officer in charge of the desk Muhindo Eri says on average they assist 15 traders in the areas of commodity prices, guidance on taxation and clearance procedures.