Country Report Uganda March 2010

Economic performance: A new joint committee will supervise trade with Sudan

A joint trade committee was established in February between Uganda and Sudan to address trade problems, marking recognition of the growing import-ance of trade between the two countries and the absence of formal regulation structures on the border. Sudan has emerged as Uganda's main export destination in recent years, overtaking Kenya in 2006. In 2008, the latest year for which annual data are available, Sudan accounted for 14.3% of formal exports (US$245m), compared with the 9.5% that went to Kenya. Trade increased steadily after the establishment of South Sudan as an autonomous region in 2005, and surged with security improvements on both sides of the border following the sidelining of the rebel Lord's Resistance Army and a rise in demand from returning Sudanese refugees. The value of Uganda's formal exports to Sudan in 2008, mainly agricultural commodities, was more than ten times the value in 2004. Informal exports have grown even faster but the system of data collection is rudimentary. A survey of informal crossborder trade estimated export earnings of US$909m in 2008, almost a doubling of informal exports from the previous year. However, these figures come with a large caveat: they are based on only two weeks of border monitoring during each month of the year excluding June, and the Nimule/Bibia crossing point and the Juba bus terminals in Arua and Kampala were included for the first time in 2008. Nonetheless, even accounting for these difficulties with the data, trade with Sudan is clearly crucial for the country and this trend will continue as long as peaceful conditions can be maintained, stoking growing demand.

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