Has Uganda Lost 440 Billion Shillings in Potential Earnings Since the Rwanda Border Closure ? Arthur Kakande

 






An article published by the Independent Newspaper on November 19, 2019 claims that Uganda traders missed UGX440 Billion in potential earnings for the period between March and September 2019 as a result of the Uganda-Rwanda border closure at Gatuna in February 2019.

The article adds that traders in Rwanda earned more from Uganda during the 7 months following the border closure compared to Ugandan traders from Kampala, earning USD 9.98 million (UGX 36 billion) during the period under review compared to the USD 12 million earned during a similar period in during 2018.

PesaCheck has looked into these two claims and found the following:

On February 27, 2019, Rwanda closed the Katuna/Gatuna border crossing following a diplomatic spat with Uganda and accusations by both countries of interference in each other’s affairs. Rwanda denied its citizens entry into Uganda and blocked the entry of commercial trucks from Uganda. Numerous attempts for reconciliation have not borne fruit.

Rwanda is one of Uganda’s top five export earners, importing raw materials, hides & skins, metals and vegetable fats/oils. So the question is, how has the border closure affected trade between the two countries?

Claim 1: Uganda traders have missed UGX 440 Billion in potential earnings for the period between March and September 2019.

Verdict: Mostly True

Basis: Data from the Bank of Uganda shows that between March and September 2018, Uganda earned a total of USD 128.75 million from its exports to Rwanda, averaging USD 18.39 million during the 7 months under review.

Export earnings dropped drastically to USD 8.35 million during a similar period in 2019 after the border closure, averaging USD 1.19 million each month during the border standoff. This means that Rwanda lost potential earnings amounting to USD 120.4 million, equivalent to UGX 445.78 billion. (1USD= 3702.52 UGX in November 2019).

The above data shows that Uganda missed USD 120.4 million (UGX 445.78 billion) in potential revenue in the first 7 months after the Rwanda border closure making the UGX 440 billion claim by The Independent Mostly True.

Claim 2: Rwandan traders earned more from Uganda compared to what their counterparts in Kampala earned from Rwanda.

Verdict: Partially True

Basis: Uganda imported goods worth USD 11.03 million from Rwanda between March and September 2019, compared to USD 8.35 million earned from Rwanda during the period.

The above shows that although traders from Rwanda earned more than Ugandan traders during the 7 month period to September 2019, the Independent Newspaper understates the figure by USD 1.05 million, making the claim Partially True.