Odrek Rwabwogo is Senior Advisor on Exports and Industrial Development to the Government of Uganda.

 

During the two-year COVID-19 lockdown my East African country of Uganda went through, I took a deliberate four months away from home, living in one of the remotest places on earth, in neighboring South Sudan. The place, Tirrangore, is a small village with abandoned school building structures that we turned into our temporary accommodation. The village is bounded by a stretch of high-rise Immatong and Lopit mountains. These give the lowlands a rising morning mist and, joined with the singing of common brown thrasher birds here, it is a veritable natural orchestra. The village, 50 kilometers from the nearest town of Torit (itself 150 kilometers from Juba, South Sudan’s capital), is rainy, humid, and has stretched-out valleys filled with run-off water that flood the sorghum crop, staple of the area. The people who live here are often tall, skinny, and dark, cousins of many tribal groups in Ethiopia, Kenya, and Uganda.

 

This place is frozen in history with stories of the nineteenth-century European explorers who walked from Alexandria searching for the source of the River Nile. Next to our camp, I was shown a place British explorer Sir Samuel Baker rested in 1863 on his expedition to the source of the Nile. A majority of youths and women passed by our camp half-naked. We would find them bathing in waters of a tributary of the River Khoss nearby, which flows from the Immatong hills. Tirrangore has no surplus production and simply carries on with little calorie intake for women and children—even if, 162 years ago, Baker estimated it at more than 3,000 homes! In my diary, after a visit to one of the houses, I recorded my thoughts:

Uganda’s President Yowerei Museveni during a news conference | Source: Guliver Image

 

“Outside the large animal kraal-like facility, we kept jumping over human excrement right a few meters to the spruce new solar panel pole and a diesel fired generator sound, near the grass thatched living quarters. On close observation, the human excreta showed a poor diet - sorghum for I could see some seeds excreted without being digested. The large mound of feces almost the size of an elephant’s could only mean from a non-biologist like me, as people taking in so much ruffage with little value to the body and all of it comes out as it went in.”

 

To lift this and a number of other communities on the margins of our modern world, we must join hands. When we don’t, or do it late, these places pull our world down. When we act, we elevate humanity, creating mutual prosperity and stability. Rich nations, the private sector, and local leadership of the developing countries must work ground-up on the issue of education, production, and markets above petty local politics or geopolitics. Education and production are the foundational material with which good society is crafted.

 

Even with limitations, welders, carpenters, mechanics, and plumbers—skilled professionals that are needed to wake these places up into a world of trade, exports, and household income—can be created in these circumstances. Why this has been slow in our modern world, I suspect, is a consequence of the fact that policymakers and trading companies in the developed world have an undertone of neglect in their actions. They seem interested in keeping trading relations with Africa a one-way street.

 

Africa is mostly seen as a source of raw material for green energy products. Cesium and rubidium, minerals used in atomic clocks, electronics, optics, and satellite technology, or lithium, copper, and nickel are highly sought in Africa to cater to the growing semiconductor industry. Not much thinking goes into partnerships to lift these communities. This leaves little value where they are sourced: only a trail of poverty and war. The developed world responds to catastrophes, disease, or terrorism, and not much beyond the interest of their own constituencies. They seem largely concerned about the future sources of food and water in an Africa that still possesses much of it, yet remains unprotected. This singular focus, along with environmental concerns and the votes they need at the UN, seems to drive the agenda about Africa by the West.

 

These are wrong levers to manage a strategic relationship, let alone a continent with more than 20 percent of the world’s population. This thinking breeds anger and resentment, and we aim at changing it by rebalancing our trade relations to create jobs for young people on the continent. Therefore, working late in my tent on a rechargeable solar flashlight, I asked myself questions about the purpose in living and work and what one can do to build up these resource-rich, yet food-and-cash-poor places in Africa: to find a new way of nudging them into joining the modern world. One thing that never left me was the role of young people with small and medium-sized enterprises (SMEs) that export if given a chance. Even with no income here, I would meet significant numbers of youth at our work site in search of jobs and food. Education, opportunity, and trade are crucial tools to stability and social change. This is not just a problem for South Sudan, Zambia, or Nigeria. In Uganda, with 46 million people, one million youth annually graduate out of more than ten million between the ages of 18–30, the bulk of the unemployed age group.

 

Many are in disguised unemployment, because universities and colleges don’t prepare them for a demanding world, one that asks for technical skills as well as the right attitude that the few available jobs require. Neither do universities and colleges probe deeper into the mental, emotional, and intellectual resources required of these youth to start their own enterprises. In Tirrangore, I had a team of youths from the suburbs of Kampala—26 engineers, machine operators, cooks—all of us staying in tents. Occasionally, the sound of nearby gunfire would get us on alert, where youth groups raiding cattle and goats from each other fought pitched battles. Once, on a moonless night, as I took a bath from a plastic basin outside the building, whizzing tracer bullets flew above us.

 

We were here in the first place to keep people working, and to recover some of the jobs lost under the COVID-19 shutdowns. The irony is that Tirrangore lay at an intersection of a trade route connecting Uganda, Ethiopia, and Kenya. Trucks, dangerously loaded with cement, iron sheets, solar panels, and household goods from the Kenyan port of Mombasa, plied this route to the vast hinterland of South Sudan from dawn to dusk, braving the lack of security.

 

This situation represents many growing sub-Saharan African nations. They are bursting at the seams with a young population, yet they provide little of the infrastructure to rapidly create jobs to match overwhelming demand. It is ironic because countries with many unmet needs are also where the highest opportunity lies.

 

We believe the way out is young people’s own enterprises exporting to regional markets and the developed world. Just before COVID-19, Africa exported $421 billion, several times higher than the Overseas Development Assistance (ODA) at $31 billion, or five times more than the remittances from her diaspora at $88 billion. However, to trade and export with startups requires fresh thinking and moving beyond government policy discussions toward removal of constraints that keep the continent from trading with each other. The same barriers stand in the way of learning and improving Africa’s performance in global markets.

 

My family owns a small dairy processing plant in the western part of Uganda, on a farm bequeathed by my parents just after I finished school. The farm’s closeness to the markets of Rwanda, Burundi, and the Democratic Republic of the Congo (DRC) does not guarantee its products’ access, even with this geographical advantage. The markets, instead, are exploited faster (especially the western DRC) and at lower transaction costs by the developed world. In 2018, I drove a truck with 2,000 liters of milk through three borders, with officials at each opening the boxes. This was repeated several times in 48 hours, and my customer refused to pay because the milk went bad due to poor handling. Banks in the market I targeted use a different currency and have no central-bank-level interconnection with East African banks, despite their membership in the same regional economic bloc.

 

Because of this experience, we think that Africa can stand on her own if given access to markets of the world with no conditionalities, tariffs, and non-tariff barriers from the developed world—and more so if the developed world deals with the continent through regional economic groups and, ideally, as one common market. To answer the challenge of jobs and exports, we put together a team of public and private sector officials in Uganda in 2022 to coordinate four interventions on exports. When these are implemented and begin to bear fruit, Uganda and her neighbors will have a pathway to creating jobs.

 

First is to understand and deal with markets in a more deliberate manner than Africa has done in the past, and to demand more goodwill from regulators in developed markets. In each of the markets—Uganda has the EU, UAE, U.S., and Asia as top tier—we appoint selected trade representatives with a strong private sector background in their regions, conduct market research for tastes and preferences, and open new ways for African firms to sell foods, culture, and tourism. The markets receiving these products bring to their consumers new and adventurous tastes. The Gen Z consumers love this freedom to taste the world. Take Uganda with her ten different species of gluten-free bananas (matooke in the local language), or the ancient millet grain of northern Uganda and Senegal (called Fonio), and Tef in Ethiopia, with its protein, carbohydrates, and dietary fiber combined in a single meal.

 

A trading hub in each of these markets means that African firms can reach a higher-spending customer without abandoning regional markets. The firms showcase products and, working with local media, translate what Africa grows for the new markets. We think consumer-level interaction helps the developed world understand African producers and builds trust. This gives Africa the ability to raise capital, structure new global partnerships, and build skills to lift millions of youths into work.

 

Partly because of the new approaches, as well as increasing capacity, Uganda achieved a positive trade balance with Europe in 2023, even if we sold more food and bought expensive machinery and equipment.

 

Trade hubs are teaching us to insist on retaining value at home. For instance, in 2022, we sold $175 million worth of coffee to one European country, and that country re-sold our coffee at more than $4.5 billion. We learned our lesson and are now firm on roasting some at home. Ugandan firms can attract orders of a sizable realm today, provide finance for the orders, and roast coffees in more than 25 small roasteries in Kampala. We are beginning to sell a kilogram at $8–10, still low by the global standard but much better than green beans we sold at $3.5 for 80 years! Trade hubs show us a sense of solidarity from the buyers and drive us to pursue a balanced trade relationship with the developed world. To keep Africa at less than 25 percent of the industry value of coffee is not just criminal but a source of friction. 

 

What I say of coffee, it holds true for freshwater catch as well. Uganda has more than 41,000 square kilometers of fresh water but exports less than 130,000 metric tons of freshwater fish annually, much of it to Europe, China, and Egypt. Major fish producers often do not have these kinds of natural resources; Egypt, with only 6,000 square kilometers of fresh water, sells a million tons of fish a year! Uganda resolved to raise a million tons of fish, with a target of $2 billion in export revenues. This figure is twice what we currently earn in coffee. For every 1,000 tons of tilapia fillet that we sell to developed markets, Uganda has the chance to create 200 new jobs.

 

The jobs are waiting in fish feeds with inputs of maize and soya that our farmers will produce, given this expanded market. They are also in fish transportation, seed stocks, storage, and refrigeration.

 

The same goes for vegetables such as chilis, pineapples, garden egg, strawberries, and sweet potatoes, where farmers in Uganda fetch only $300 an acre per year, while their counterparts in the Middle East make $30,000. It is ending these structural and market distortions that will create more jobs with our natural resources and build a mutually reinforcing future with our allies in the developed north. If Uganda supplies just 30 percent of all the roasted coffee Saudi Arabia consumes (72,000 metric tons), it will lift 20 percent of our 2 million households in the coffee value chain into a better living standard. This is why we have committed the government of Serbia and some of the nation’s private-sector actors to a minimum of 6,000 tons to be roasted in Uganda by 2028 for the Balkan market. This test is a learning curve for both Uganda and Serbia, which share many historical linkages. Those who believe the story of a brighter future for humanity can learn from this story.

 

The second aspect is food safety, product standards, and the high bar for African firms to comply with the requirements of the elusive consumer in the developed markets. A number of African firms are doing their best to meet the shifting standards—especially with segments that demand traceability—even when they already consume our food as tourists to Africa or through ethnic food markets in their home countries. Western consumers demand to know where the coffee or cocoa is sourced, how it is harvested, and by whom, but rarely do they ever ask why the value needs to be extracted from the source—roasting, packaging, distribution—and all this has to be done in the Global North! I thought that what is good for the consumer should be good for the producer too, if we want to support each other.

 

Imagine someone coming to your garden. They pick your soil nutrients and the air with it, the culture domesticated around your product for generations, and they simply return with a ready-to-drink item in which you have had no participation. In the ready-to-drink item, you have had no decision other than to toil away in the heat to plant and keep the coffee or cocoa tree! How do you react if the buyer only shows up with penalties of increasingly unbearable demands for standards and compliance? This is how Africa feels about the shifting standards from those who buy from us and leave us with little to no value. If you check, the top ten global roasters, who make more than $55 billion a year (Africa makes only $2.5 billion in green beans), have presence in six European countries with outposts in the United States and Asia. There is nothing at the source! Yet when Asia, South America, and the Middle East were industrializing at the end of the 1980s, there were no such barriers placed in their way to growth—the kind Africa faces, now in her infancy, on the path toward jobs for millions of her youth.

 

Africa gets demands that become commands in short order on climate change mitigation measures—those that are difficult to meet quickly given the state of our economies, restrictions on basic technology transfer so that firms can replicate what the West and China did on their ascent to prosperity, along with cultural and political sanctions that require Africa to acquiesce in what it does not like. All this is done in order for us to kowtow to the West’s consumer demands. We now have demands on growing, harvesting, processing, packaging, and packing of food that require stronger partnerships if Africa is to meet them and keep jobs. For example, firms in Africa have hardly gotten beyond paper and plastic packaging, and now the new requirement for fruits to be packed and sold in glass jars is live. The continent does not yet have a glass or tin industry, the transportation of food in glass requires higher capabilities, and the competition is light years ahead in the North. How are we supposed to create jobs, let alone compete in global trade?

 

In view of this, in December of 2024, Uganda decided to organize her house and confront these demands on young firms. We are establishing a new food safety regulatory agency: a type of ombudsman for food and food standards, to oversee the use of pesticides in the growing and processing of food, and streamline licensing and certification, including plant and animal health. We are doing this for our young population’s health and, in the process, to deal with the ever-increasing demands from our developed-market allies. The law establishing this new food authority seeks integration of formerly disparate institutions of government handling food into one entity, with specialized departments to respond quicker to the market and health signals in our world. Exporting firms will secure certification faster and, on the backbone of this work, we will deploy blockchain technology for young entrepreneurs who need centralized sources of export documentation.

 

The third aspect we are tackling is to improve trade infrastructure, given that Uganda is a hinterland country with 1,000 kilometers to the nearest ocean waves. An efficient logistics network drives trade and exports. Uganda, along with many parts of Africa, has not had new railways built in the last 70-100 years. For a continent that is 23 percent of the world’s land mass and 20 percent of the global population, to have less than 90,000 kilometers laid in 100 years against Asia’s 230,000, means we have work to do in financing and managing transport needs of firms to remain competitive.

 

We do not despair, for these are opportunities as well as pains of growth. In Uganda, we are working on multimodal transport infrastructure, combining our needs in the air, on water, and by land.

 

We keep the negotiations on with shippers for lower unit charges based on cargo size, destinations, frequency, and nature of contracts. Slowly, we will get to compete and give our youth the runway to succeed in business.

 

In the refrigerated trucks segment alone—for fruits and vegetables, one hauler in the industry carries 30 percent of the Uganda market requirements—there is a gap of 200 trucks every month to ship cargo to the Indian Ocean ports of Mombasa and Dar es Salaam. What if we were able to assemble these trucks in-country and provide for farmers’ transportation of produce to collection centers in the country? What if we had 10,000-ton capacity barges on Lakes Victoria and Albert, our connecting water arteries to DRC, Tanzania, and Kenya? This would allow joint border projects to process minerals, agricultural products, and timber products from each other’s territories, and to ship these products across parts of the Central and East African market.

 

How about new airports near our game parks? These would allow tourists seeking nature and wildlife to avoid flying into Entebbe International Airport and being on the road for hours to get to their destinations. These and many other aspects of our logistics and transportation are a rallying point to raise funding in public and private investment, and to reduce shipping charges. As Uganda reduces the cost of energy from 8 cents to 5 cents per kilowatt hour, the bottleneck remains in transmission to the rural parts of the country, a modern railway line, and efficient airports.

 

The fourth aspect of our intervention is the provision of export funding to start-up firms that have secured external orders. Interest rates in Uganda favor short-term bank loans for traders in imported goods, yet exporters require plenty of time to source, add value, and ship the right quality at the right time. Uganda is now able to provide low-cost, competitive underwriting of invoices and other financial tools for all firms that generate external market orders. At the end of December 2024, our intervention had more than $460 million worth of orders by exporting SMEs. These are sesame, coffee, dairy, beef, vanilla, fruits, and vegetables orders. They are from some 41 applicants seeking this credit facility. We are excited about the long-term impact of this measure. If Europe has put up €3 billion to finance her exporting firms, with much of this dedicated to exporters into Africa (mostly aimed at fighting Chinese competition in Africa), why should African countries be shy to support their firms with low-interest export funding? Remember, Europe and the United States still spend, in the twenty-first century, $360 billion in agricultural subsidies—on top of having better WTO negotiation capacity!

 

We understand the nature and type of business infrastructure in our country and continent. The reason we insist on setting up counselling clinics and business support services for firms is to stave off potential failure or credit going to unprepared hands. For many of us, who in the last 40 years have become used to astronomical bank charges and loan sharks in Africa (who take twice the figure charged by high street banks), the partnership between public and private sectors to provide low-cost export funds is a new dawn!

 

It is an absolute pleasure to see firms which had closed doors to 100 employees during COVID-19 lockdowns reopen, with new processing lines in dairy or coffee roasting or aggregation of fruits and vegetables to supply the Middle East and Europe. It gives young people hope about the value of resilience that an enterprise teaches its founders.

 

Beginning in mid-2025, we will be raising funding to start four agricultural value and mineral processing hubs: one in northern Uganda for all our minerals, one in the center for electronics, one in the west for dairy, beef, and coffee, and one in the east for chemicals, fertilizers, and building materials. The estimated jobs from the four privately managed industrial hubs are 436,000 jobs. They will be paying a minimum of $350 as a starting monthly salary. These aggregation and manufacturing hubs will deal with the issue of limited supplies for the orders we secure. China, in particular, takes large framework agreements lasting many years of supply. This triggers a need for large-scale farmer involvement and aggregation for these industrial centers. It is also easier to agglomerate factories and service providers unique to each of our export sector products. It is our plan to use these hubs to build socio-economic infrastructure—hospitals, housing estates, insurance, airports—and reverse the current rural-urban migration of young people seeking opportunities in towns.

 

With aggregation centers, our effort will shift to the building of data and analytics capacity to secure better pricing for our commodities at an international level. We will be able to put to use the more than 60 bilateral agreements Uganda has signed in the last 50 years. We will translate them into local languages so that farmers, aggregators, and government can speak to them with ease.

 

The lessons of Tirrangore gave us courage, commitment, and a feeling that no one should put a cap on Africa’s ambitions to provide for her people—unless we choose stagnation by our inaction, by ourselves and our allies. What we seek is solidarity, respect, and dignity, regardless of our stage in development.

 

An African story describes how two men on a journey confronted a lion and chased it courageously. As soon as they were regaining their balance to reflect on what had just happened, they were chased by a wounded buffalo! They dealt with it too, and it ran away. After a short while, they met a swarm of bees. The men, terrified, threw away their sticks, bows, and arrows and lay on the ground for the bees to pass over their heads. When it was over, one of them asked, “How could we flee from a swarm of little bees after we had confronted the big and dangerous animals?” His colleague answered, “Those little insects are intense and united. They fly together in a single formation. They are difficult to defeat and are much more dangerous.”

 

Where there is unity of purpose and action, size does not matter. Africa, united with her allies and those who care about the future of humanity, can confront the challenges of unemployment, end poverty, provide homestead production, build a middle class from the ground up, and protect the future of our planet.

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