Rwanda, Uganda trade slows on strike

Local traders have said that the recent strike by traders in Uganda disrupted trade between the two countries, leading to slow business activity.
Cargo at Magerwa.  The New Times / File.
Cargo at Magerwa. The New Times / File.

Local traders have said that the recent strike by traders in Uganda disrupted trade between the two countries, leading to slow business activity.

Traders in Uganda under their organ, Kampala City Traders Association (KACITA) went on a three day strike protesting high lending rates from commercial banks after Bank of Uganda; the country’s central bank raised its policy rate, forcing banks to transfer the burden to borrowers.

The central bank’s policy rate acts as a bench mark to all interest rates in the market.

Some traders in Rwanda reported delays and failure to procure their goods as major cross border exports slowed down.
Janet Nkubana, Chairperson of Exporters Association, the umbrella arm of the Private Sector Federation (PSF) said that cross border exports such as foodstuffs were affected as many traders failed to meet their supply orders.

“Some of perishable goods that go through cross border trade faced challenges because they could not be delivered on time,” she told Business Times in an exclusive interview last week.

Nkubana noted that traders who had procured goods from Uganda were not able to retrieve them in time as shops were closed increasing delays and dishonouring purchase orders to their (traders) clientele in the country.

“So our traders had to stay in Kampala for some days which increased their costs,” she said, adding that the strike had paralysed the trade chain.
Uganda dominates Rwanda’s imports from the East African region.

According to trade statistics from the Ministry of Trade and Industry, Uganda accounts for 49.9 per cent of EAC imports to Rwanda while Kenya comes second with 30.3 percent.

Phillipe Nzabihimana, a trader in Kigali, said that most traders halted their businesses as they were unable to travel to Uganda.

He added: “We are currently spending much on purchasing goods from Uganda because of inflation, so we need to be extra careful not to incur more costs.”

Claude Mugabo, who deals in household goods, said that traders were forced to stay outside Kampala for three days until the strike was over for fear that their money and goods would be lost in the strike, which also brought about extra expenses especially in accommodation.

However, Alphonse Ngumije said that despite being stranded in the bus park coupled with delays in purchasing goods, no Rwandan traders lost their wares in the strike.

“There were no shops opened and even Forex Bureaus were also closed such that we had to hide in hotels until the strike was over,” Judith Nabunya, a dealer in children’s clothing in Kigali told Business Times.

Abdul Ndarubogoye said that the strike did not affect the supply of goods in the country as traders always stock enough to last for months without any new supplies, adding that this helped to avert a price increase.

At Mateus, Kigali’s major wholesale bazaar, business was as usual.

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