May 13, 2019

Cost of Rwanda-Uganda Fight: Prices of Goods From Uganda Up 40%

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Aerial photo of the Gatuna border, which is in the left-hand corner. Rwanda is in background. The foreground is Uganda’s Kabale district. Rwanda temporarily closed Gatuna border to heavy duty traffic, which Kigali said would be diverted to Mirama Hill-Kagitumba, more than 100km away (Photo by TradeMark East Africa)

From the famous Uganda Waragi and the Movit body jelly to various brands of maize floor – all have been exported to Rwanda for consumption─until recently.

A three week mini-survey conducted by The Chronicles shows that the prices of these goods have gone up since the governments of Rwanda and Uganda fell out. Some have increased by as much as 40% and more.

On February 28, the crucial Gatuna border was closed to heavy duty traffic for planned renovations. The incident opened a can of worms that have infected relations between Kigali and Kampala so badly that no one wants to talk.

As the crisis has rolled on, the economic impact is slowly coming to light.

The Uganda Export Promotion Board said on March 5 that its members are losing $600,000 daily in lost revenue because they are unable to enter Rwanda.

Annual exports to Rwanda in 2018 was worth $240m but Kigali only made about $27m from its goods going to Uganda.

Rwandan businessman Mupenzi Claude, who until February had been importing containers of Uganda goods has seen his business dwindle ever since current crisis started. The quantity he brings is now down.

He, and other importers told The Chronicles that they have opted to go via Tanzania instead of using Uganda-Rwanda common border points. As a result, transport costs have gone up, and prices on the shelves in Rwanda have followed suit.

For example, a 25kg sack of maize flour has increased from Rwf7,500 to Rwf12,000 in Kigali supermarkets. It could be higher in regions.

Another commonly used Ugandan product is the Movit body jelly. A small tin of Movit Herbal Jelly was selling at Rwf1,000, but now goes for Rwf1,600.

The flavoured Uganda Waragi gin has been a popular drink in local hangouts. A 200ml bottle, before the crisis, was Rwf 2,000. Today, depending on where you buy it, prices go as high as Rwf 3,000. But even with this cost, you will be lucky to find it.

The Chronicles only looked at the products consumed by many ordinary Rwandans. We have been conducting the mini-survey for over three weeks.

President Yoweri Museveni (above) is accused by President Kagame of providing organisational infrastructure for Kayumba Nyamwasa’s Rwanda National Congress (RNC), which is funded by tycoon Tribert Rujugiro. Meanwhile, Seth Sendashonga was a minister in Rwanda in the government immediately following the 1994 genocide against the Tutsi. He fled Rwanda in 1996 and shot dead in Nairobi two years later. President Kagame says Sendashonga had been planning to launch armed group with help of Gen Salim Saleh, Museveni’s brother

The Kampala City Traders Association (KACITA) says that they are compiling losses from individual traders and will share the details at an appropriate time. It is quoted by The Independent magazine in its current edition of last week.

A spokesman said all goods destined from Uganda to Rwanda or those that are branded ‘Made in Uganda’ continue to be rejected by Rwandan authorities at the border. Only those goods from Tanzania and Kenya enter Rwanda, the magazine claims.

Rwandan trader Bimenyimana Emmanuel operating from Matheus here is Kigali, told The Chronicles: “If Rwanda and Uganda continue like this, within a year there may be no single Ugandan product on the shelves here.”

Cedrick Mutabazi who owns a wholesale shop said that his clients have yet to understand why the prices of Ugandan goods have increased.

“When I tell them the price, some clients leave and do not return because maybe they think it is me who is increasing the prices,” he said.

Mutabazi used to buy a pack of Mukwano soap from the importer at Rwf 5,200 and sell it at Rwf 6,000 – making a profit of Rwf 800. Today, he makes a profit of only Rwf 200 from the same pack.

Mutabazi says very soon he will increase the price to be able to keep the soap in his shop. “If I increase the price, people will not buy because there are many other alternative soaps. So I will have to choose between keeping current price or remove it from my supplies,” he said.

The Uganda Revenue Authority and the Bank of Uganda (central bank) released new data last week. The Chronicles review show that in the first quarter, Uganda exports to Rwanda were $34.1m – way below the $ 51.9m in the same period of last year.

The last time Uganda got that small amount of revenue from its Rwanda exports was back in the Q1 of 2010 – some 9 years ago. It earned $32m for that quarter.

However, Rwanda’s exports to Uganda for the same Q1 2019, according the URA and central bank, went up from $2.73m to $3.9m.

Clearly, the conflict in which Rwanda accuses Uganda of what it describes as “three outstanding issues” is directly affecting business between the two countries.

These issues have been publicly outlined by President Paul Kagame as: support to individual dissidents and groups including RNC’s Kayumba Nyamwasa and “P5″─groups intent on destabilizing the Rwandan government; arresting, torturing and deporting Rwandans, as well as economic sabotage.

As counter action, Rwanda stopped its nationals from traveling to Uganda – saying it cannot allow them to travel there since it cannot guarantee their security.

On its part, Uganda has not officially accused Rwanda of anything. Instead, through obscure websites, Ugandan officials have accused Rwanda of spying and funding internal opposition groups to cause chaos in in the country.

Evidently, a total 986 Rwandans have so far been arrested in Uganda since 2017. Some have been dumped at borders in terrible conditions.

Some of the products which Uganda exports to Rwanda

Publicly, the last time President Yoweri Museveni made a direct comment on relations with Rwanda, he said there was “no fundamental” problem between the two countries.

He also wrote to President Kagame on March 10, saying he had met RNC officials by “accident”.

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