Ugandan companies fight over US$20bn in oil logistics

Richard Kamajugo, the senior director at TradeMark East Africa, a non-profit agency that works around the region to strengthen trade and markets says in terms of competitiveness, there is already competition among countries to be logistics hubs in the region but what will make Uganda better than the others is efficiency.

“It will be the ultimate determinant of where the business goes,” he says, “That is why all parties involved, public and private must buy into the vision of turning Uganda into a logistics hub.”

Kamajugo says although infrastructure is a key contributor to logistics efficiency, Uganda should also focus on processes that lead to simplification and coordination of trade procedures. He says lengthy, bureaucratic and repetitive procedures increase the time and therefore cost of trade.

He says improvements in automation through upgrade of customs and other government agency IT systems; enhancing exchange of information and implementation of One Stop Border Post (OSBP) clearance procedures have had a positive impact on border processes in Uganda.

Another expert; Jennifer Mwijukye who is the Chief Executive Officer of Unifreight, a local logistics firm, says much as the government has over the last decade invested massively in road and other infrastructure projects around the country, there is need for linkage of the transport and warehousing infrastructure across the country.

Uganda’s logistics performance is already showing improvement, according to the World Bank Logistics Performance Index, which is an interactive benchmarking tool that measures performance of the logistics supply chain on parameters such as customs clearance, infrastructure, logistics competence, tracking and timeliness. Last year Uganda was ranked 58^th out of 160 countries around the world and fifth best in Africa.

The Logistics Performance Index report 2016 noted that the soft reforms implemented on the northern corridor in 2014-2015 provided a greater and more rapid return on investment relative to hard infrastructure.

Thanks to the customs modernisationprogramme and construction of OSBPs, there has been a reported reduction in transit cost from US$ 3,390 to US$ 1,176 and reduced average transit time from 34 days in 2010 to 13 days in 2016.

Going forward, TradeMark East Africa intends to work on a 10-year strategy on logistics with a special focus on Uganda’s private sector needs.

The strategy will identify constraints impacting growth of the logistics industry in Uganda, highlight growth targets, develop recommendations to achieve the growth targets, and develop a mechanism to monitor implementation of the recommendations after its validation with the key players.

Uganda is already playing an important role in the logistics sector within the Great Lakes region despite its geographical handicap of having no access to the sea.

The country has seen transit volumes of cargo grow over the years. The 2016 Mombasa Port report, for instance, shows that 82% or six million tonnes of all the transit cargo through the Mombasa Port were destined to Uganda.  Some of this cargo is distributed throughout the region, thanks to Uganda being at the near geographical centre of the continent.

Uganda’s position has already been exploited by the United Nations, according to Rosa Malango, the UNDP Country Representative in Uganda.

She said the UN’s peacekeeping field support hub which used to be in Italy was moved to the Regional Service Centre at Entebbe (RSCE) and now provides support to about 16,000 personnel across nine missions. These missions comprise almost 60% of the UN peacekeeping personnel around the world.

“From where the UN stands, Uganda is already a regional logistics hub,” she said during the expo.

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