SMEs call for AGOA negotiations

Local entrepreneurs in the Small and Medium Scale Enterprises (SME) sector have called upon the Government to court the US administration over the suggestion to drop Uganda from the Africa Growth and Opportunities Act (AGOA) trade partnership. ;

In 2000, AGOA was instituted to give 30 African states preferential, tax-free access to the lucrative US market for almost 2,000 products. ;

Uganda, which is one of those 30 countries, has benefited from that arrangement and has been exporting four highly demanded products which include coffee, cut flowers, fish, and textiles and apparel. ;

Speaking during a summit to commemorate the 14th Global Entrepreneurship Week in Kampala, Charles Ocici, the Enterprise Uganda Executive Director said the Government should push for negotiations to enable continued access to the US market. ;

“The US market is the largest consumer market in the world. Uganda’s exit will spell doom to the SMEs who have prospered through the years by exporting small quantities of merchandise to the US,” he said. ;

Ocici added that Uganda’s exit from AGOA will additionally affect the pricing of exports to the US for Ugandan exports, adding that this may likely cause lots of firms to collapse under the weight of debt since they will not be able to service their loans due to loss of market for their products. ;

“While U.S importers were buying products at $1 through AGOA, due to the exit they will now buy the same Ugandan product at $1 and 20 cents. This will make it more expensive and they will instead choose another supplier for the same quality at a lower price,” he said. ;

Some participants called the move to push Uganda out of AGOA a political one whose answers should be hatched politically. ;

“Uganda has been America’s ally for many years in matters political and economic. The political leaders of the two countries should meet and iron out the disagreements,” said Silaje Matovu, an entrepreneur with a shop in Kikuubo. ;

John Senoga, a dealer in confectionaries questioned why AGOA exited Uganda at such a time when the country is trying to emerge from economic doldrums. ;

“If the decision is upheld and Uganda is thrown into the cold. It will deal a lethal blow to the Ugandan economy and hurt Ugandan industrialists who have assumed the role of exporters and those who had the plan to start exporting. ;

A year before the pandemic (2018/19), thanks to the AGOA initiative, Uganda’s exports to the US were valued at $1m (sh4b). In 2019/2020, the exports grew to $3.4m (sh13b), and by the close of 2021, they rose to $5.1m (sh20b). In 2022, Uganda exported goods worth $10.6m under AGOA, according to the Uganda Bureau of Statistics. ;

Odrek Rwabwogo, a Senior Presidential Advisor on exports said Kampala was open to discussing the issue with the United States. ;

He said the decision, if upheld, will hit Ugandan farmers and small business owners the most. ;

“While Ugandan trade through AGOA was insubstantial, growth of Uganda’s exports to the U.S. and other partners was an important pillar of our economic strategy,” Rwabwogo said in a recent statement. ; ;

Museveni resolute ;

President Museveni recently told Ugandans “not to be over-concerned by the recent actions of the American government in discouraging their companies from investing in Uganda and on removing Uganda from the AGOA list.” ;

Posting his message on social media site X, formerly known as Twitter, he said, “As far as Uganda is concerned, we can achieve our growth and transformation targets, even if some of the actors do not support us.” ;

Uganda has faced criticism from rights groups, the United Nations, and Western powers over a harsh anti-gay law adopted in May. President Biden henceforth called for the immediate repeal of the anti-gay legislation after it was passed and threatened to cut aid and investment to Uganda. ;

The World Bank announced in August it was suspending new loans to Uganda, and last month the U.S. State Department warned about the risk of doing business in the country. ;

Provided by SyndiGate Media Inc. (Syndigate.info).