Emiratis attend the Dubai expo. PHOTO/FILE
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The rise and rise of Uganda – UAE trade relations
What you need to know:
Foreign Direct Investment from the UAE increased from $300 million in 2018 to about $2 billion in 2022.
United Arab Emirates (UAE) is currently the leading market for Uganda’s exports in the Middle East and Gulf countries, Prosper Magazine has learnt.
And globally, the country located at the eastern end of the Arabian Peninsula comes fifth.
“This country is our number one market in the Middle East and growing steadily over time,” the director trade information at Uganda Export Promotion Board, Mr Lawrence Micheal Oketcho, told Prosper Magazine in an exclusive interview.
He further revealed: “It contributes 94 per cent of our exports to the Middle East and nearly 15 per cent to our total exports as by end Financial Year 2022/23. Dubai is currently a financial and commercial centre in the Middle East hence its importance.”
According to Uganda’s Ambassador to the United Arab Emirates, Zaake Kibedi, it is easy to spot Uganda’s goods in supermarkets across the UAE.
This demand partly explains the increase in exports to the UAE from $300 million in 2018 to $2 billion by close of 2022.
Government records, quoted by Foreign Affairs Ministry, further indicate simultaneous growth in Foreign Direct Investments (FDI) from the UAE to Uganda – growing from $300 million in 2018 to $3 billion by end of 2022.
Overall, Uganda’s exports to UAE have increased by 38 per cent, according to the Prime Minister, Ms Robinah Nabbanja.
During the Dubai Expo 2020, Uganda signed investment deals in form of FDI from UAE to the tune of $300 million, bringing the total value of investment so far to approximately $3 billion in that very year alone - 2020.
Uganda exported goods and services to UAE to the tune of $562 million in 2020, bringing the total value by close of 2021 year to over $2.2 billion, with gold, fish fillets and dry legumes (see detailed list below) being some of the major exports.
In the preceding year, it dropped to slightly over $31 million as the economy was in early stages of regaining her footing, thanks to Covid-19 pandemic effects. Currently, the export is picking up, standing at $808 million, with a couple of months to go before close of the year.
Meanwhile, Uganda, according to Uganda Export Promotion Board records, imported goods and services from UAE to the tune of $843.99 million last year which has since peaked to $1.1 billion currently.
Post Covid-19 recovery targets
Since containment of Covid-19 pandemic, Uganda has registered a total of 185,253 international passengers in July 2023 with 93,727 arrivals and 91,526 departures. This is an average of 5,975 passengers daily – making it the highest passenger traffic ever recorded, according to national aviation body.
“Majority of these passengers are taken by Airline Carriers from the UAE including Emirates Airlines, AirArabia, and Fly Dubai,” Amb Kibedi noted in his speech at the second edition of the Uganda- UAE Business Forum held last week in Kampala.
He noted that this explains why Uganda registered the highest coffee exports over the same period with 743,517 60 kilo-bags worth $121.64 million over the same period.”
Geraldine Ssali, the Permanent Secretary at the Ministry of Trade, interacts with officials from United Arab Emirates during the Dubai expo. PHOTO/ MICHAEL KAKUMIRIZI
Growth sectors
Following the meeting between the two countries which is the first of its kind, the Consul General of Uganda’s Consulate in Dubai, Amb. Henry Mayega, targeted investment priority areas of the country’s economic sectors such as commercial agriculture and agro-processing/industry, tourism, energy and minerals, oil and gas and manufacturing.
Other areas of interest include Infrastructure, public transport, health, education and real estate.
Real investment Vs labour externalisation
Ministry of Gender migrant labour report that covers 11 months to December 2022 indicates an average of 7,720 Ugandans on monthly basis leave the country in search labour in the Middle East and Gulf Countries.
It is estimated that more than 80,000 Ugandans are migrant workers across the Middle East countries. But as investment from UAE in the form of FDI continues pouring into Uganda, it may not be long before the exodus of young migrant workers in search of work elsewhere becomes something of the past.
In an interview with Ms Evelyn Anite, the State Minister for Investments, this initiative with UAE is another form of prescription to the insatiable quench by young people to leave the country in search of work elsewhere including in jurisdictions where government’s control over their treatment and well-being is limited.
“We have real investment emanating from real partnerships between the two countries. There will be real benefits in terms of jobs for our population. The Emiratis are willing to invest in value addition of coffee, tea, gold and generally across sectors and in return have Uganda as their gateway to the EAC region,” Ms Anite told Prosper Magazine in an interview last week in Wednesday.
End game
The excitement, especially among public officials, including for President Museveni during the Uganda – UAE business forum signals that the Emiratis have no option but to seriously inject their capital in Uganda.
Already, according to the chairperson of Uganda Investment Authority (UIA), Mr Morrison Rwakakamba, the 23 three companies from UAE combined are worth $4 billion with all of them eager to find a suitable deal either as partnership with local SMEs or solo.
Rwakakamba urged SMEs to interact with Emiratis businesses and foster relationships with them.
He believes UAE is a perfect destination to attract FDI, saying it will in turn expand “our” ability to export to this market.
“They are here to not only discuss business but also explore opportunities to exploit. This relationship is going to enhance commercial and economic promises of the two countries and this is going to deepen relationships between the local and foreign investors,” he said.
The Emiratis are banking on Uganda’s trade relations as a gateway to the region. In his remarks, the Under Secretary Abu Dhabi Department for Economic Development, Mr Rasheed Abdulkarim Al Blooshi, said: “Successful business happens when there is a win-win situation for both parties.”
He continued: “We are looking at promoting trade, tourism and technology transfer for both countries.”
Rooting for $500million
The concentration during the course of the Uganda-UAE Business Convention 2023 was solely on business and how the two countries can help each other grow and develop their economy. According to Mr Rwakakamba who was keeping tabs on the development, business to business discussions were on point with both parties looking to cut a deal.
The reward of the 2nd Uganda-UAE Business Forum, will be evident in the near future.
“We believe that in six months, we shall begin to see some of the fruits of this meeting.
“If you look at the valuation of these companies that are here, we think we could get between $500 million to $1 billion coming into this economy as a result of these engagements we have had. At least 50 per cent of the discussion will mature into solid investments over the next 6-12 months,” Mr Rwakakamba concluded.
Emiratis and Ugandan officials during the Uganda-UAE Business Forum in Kampala last week. UAE is one of the top destinations for Uganda’s exports. PHOTO/MICHAEL KAKUMIRIZI
Going forward, Mr Oketcho recommends that there is need to continue researching on UAE market, engage the current and potential clients as well as build a market hub. He is of the view that it is also important to have export field support staff with UAE to enable follow up on both current and potential clients in UAE. This is in addition to Uganda doing solo country exhibitions in this country.
