72788 v1 World Trade Indicators 2009/10 Uganda Trade Brief Trade Policy with the rates for agricultural goods and non- agricultural goods at 4.5 percent and 3.1 percent, Uganda adopted the Common External Tariff (CET) respectively. Over the course of 2008, the trade- of the East African Community (EAC) in 2005. weighted real exchange rate of the Ugandan shilling Judged by its MFN Tariff Trade Restrictiveness Index appreciated by 2.7 percent, reducing the external (TTRI)1, Uganda’s trade barriers are more restrictive competitiveness of the country’s exports. than those of its comparators. Uganda’s TTRI is 14.6 percent, which is above the Sub-Saharan Africa (SSA) In July 2008, Uganda, together with the other and the low-income country group averages of 11.3 members of the EAC, signed a Trade and Investment percent and 11.6 percent, respectively. Based on the Framework Agreement (TIFA) with the United States TTRI, it ranks 116th out of 125 countries (where 1st is as a step towards strengthening the economic least restrictive). The agricultural sector is afforded a relationship between the two parties. Uganda is already very high degree of tariff protection (33.2 percent) eligible for quota-free and duty-free entry of certain compared to the non-agricultural sector (9 percent). goods into the United States under the African The country’s MFN applied tariff has increased Growth and Opportunity Act (AGOA). As gradually since 2000 to 12.6 percent. In 2005, negotiations between the EAC and the EU towards a Uganda’s maximum tariff on all goods (excluding comprehensive Economic Partnership Agreement alcohol and tobacco) increased from 15 to 100 percent (EPA) could not be completed prior to the December and has remained at that value through 2008. The 2007 deadline, the EAC signed a regional “interim� trade policy space, as measured by the wedge between agreement with the EU at the end of 2007. The bound and applied tariffs (the overhang), is 56.1 “interim� EPA gives the EAC members duty-free and percent. Regarding its commitment to liberalizing quota-free access to the EU market in exchange for an services trade, Uganda ranks 134th (out of 148) on the asymmetric and gradual opening of their own GATS Commitments Index. economies to EU imports. The EAC continues to negotiate a comprehensive EPA with the EU. Uganda also belongs to the 19-member Common Market for External Environment Eastern and Southern Africa (COMESA) which launched a customs union in June 2009 and plans to Uganda’s exports face an unfavorable trading fully implement it by 2012. environment, especially when compared to the average SSA or low-income country. Uganda’s Market Access TTRI2 (including preferences) is 6.3 percent, above the Behind the Border Constraints SSA country group average of 3.9 percent and the low-income country group average of 5.6 percent. The Uganda ranked 112th in the Ease of Doing Business weighted average rest of the world tariff (including index in 2009, which compares the business preferences) faced by Uganda’s exports is 3.8 percent, environment of 183 countries. During last year it has implemented reforms in the Trading Across Borders subcategory, by speeding up trading times through better customs processes, increased operating hours at Unless otherwise indicated, all data are as of August 2009 the port of Mombasa, and improved cooperation at and are drawn from the World Trade Indicators 2009/10 the border. This is consistent with the country’s Database. The database, Country Trade Briefs and performance on the Logistics Performance Index Trade-at-a-Glance Tables, are available at (LPI), a measure of the extent of trade facilitation. It http://www.worldbank.org/wti. scores 2.49 on a scale of 1 to 5 on the LPI, compared to averages of 2.35 for the SSA region and 2.29 for If using information from this brief, please provide the countries in the low-income group. It ranks 83rd (out following source citation: World Bank. 2010. “Uganda of 150) in the world and 8th (out of 39) in the SSA Trade Brief.� World Trade Indicators 2009/10: Country Trade region (with South Africa leading the regional group). Briefs. Washington, DC: World Bank. Available at Among the LPI subcategories, its best performance is http://www.worldbank.org/wti. World Trade Indicators 2009/10 Uganda Trade Brief in lowering domestic logistics costs, while its weakest References performance is in the quality of transport and IT infrastructure for logistics. Bank of Uganda. 2009. Quarterly Economic Report—March 2009. . Real trade growth of goods and services (in constant COMESA. 2009. “COMESA Launches its Customs 2000 U.S. dollars) accelerated to 20.7 percent in 2008 Union.� COMESA. July 24, 2009. . percent in 2008, up from 16.7 percent in 2007, but are Europa. 2009. “Fact Sheet on the Interim Economic projected to grow at only 2.2 percent in 2009. With Partnership Agreements—The Eastern African increased production of coffee, the country’s main export, exports increased by 7.3 percent in 2008 but Community (EAC).� Europa. January 2009. this was lower than the growth rate of 12.2 percent in . 5.2 percent in 2009. Integrated Framework. 2005. “Uganda—Diagnostic Trade Integration Study under the Integrated In nominal terms, trade growth slowed to 30.3 percent Framework—Concept Paper.� . the same as the rate of 31.8 percent in 2007. Export U.S. Treasury. 2008. “Ambassador Schwab Signs Trade growth on the other hand was slashed from 51.9 and Investment Agreement with the East African percent in 2007 to 28.3 percent in 2008. Goods Community.� U.S. Treasury. July 16, 2008. exports grew at 34.5 percent in 2008 after record . in coffee prices. This decline can be traced to the fourth quarter of 2008 when, according to national statistics,3 goods exports dropped by 24 percent in nominal U.S. dollar terms compared to the same period in 2007. Services exports increased by 5.8 percent in 2008, compared to 12.2 percent in 2007, and are expected to be more resilient than goods exports in 2009 with a projected growth rate of 5.6 percent. FDI inflows which are mainly directed at the telecommunications, oil and gas sectors, decreased to 5.4 percent of GDP in 2008 from 6.2 percent of GDP in 2007. Notes 1. TTRI calculates the equivalent uniform tariff that would keep domestic welfare constant. It is weighted by import shares and import demand elasticity. 2. MA-TTRI calculates the equivalent uniform tariff of trading partners that would keep their level of imports constant. It is weighted by import values and import demand elasticities of trading partners. 3. Bank of Uganda, 2009, p. 38.