Uncertainty For Uganda's Exports As Fighting Continues South Sudan

2235 Views Kampala, Uganda

In short
As the South Sudan crisis continues to escalate, Uganda’s exports to that country are being affected but with likely outcome yet to be known. Uganda exported goods worth Shillings one trillion to South Sudan in 2012; however with the crisis that has now entered its third week these figures are likely to remain unmatched, if it drags on.

As the South Sudan crisis continues to escalate, Uganda’s exports to that country are being affected but with likely outcome yet to be known.
 
Uganda exported goods worth Shillings one trillion to South Sudan in 2012; however with the crisis that has now entered its third week these figures are likely to remain unmatched, if it drags on. Dr Adam Mugume, the Director for Research at Bank of Uganda notes that it all depends on how long the crisis in South Sudan takes.
 
//Cue in: “For South Sudan…
Cue out: …more than 0.5percent.”//
 
Dr Mugume explains that as long as the conflict drags on, then exports from Uganda to South Sudan will be the most affected. South Sudan only became independent in 2011 after breaking off from Sudan. This was after a long protracted war led by the SPLM against the Government of Sudan – Khartoum, eventually leading to the breakaway. As a result, South Sudan was undertaking massive construction projects for government offices and roads since independence. Building materials were supplied by Ugandan companies. Additionally, food items in a country that doesn’t practice that much agriculture also partly came from Uganda. Ugandan traders in South Sudan, most of them doing informal trade have already been feeling the pinch. Dr Mugume, however explains that some sectors in Uganda are likely to benefit.
 
//Cue in: “But also if…
Cue out: …kind of spill-offs.”//
 
The International Monetary Fund (IMF) Policy Support Instrument made at the end of 2013 indicates that Uganda was still vulnerable and susceptible to violence in the region. South Sudan borders Uganda to the north and that trade route has already been affected, negatively. That said, economic growth projections by both IMF and BOU indicate that it is still on track to grow by 6.5percent in 2013/14.
 
Direct talks aimed at ending more than two weeks of violence are due to begin in the Ethiopian capital, Addis Ababa.
 
On Friday, delegations from the warring parties met mediators, with Ethiopia's Foreign Affairs Minister Tedros Adhanom saying the initial meetings had been "fruitful".
 
Fighting between supporters of President Salva Kiir and his sacked deputy, Dr Riek Machar, has killed at least 1,000 people since 15 December when shooting started in Juba. The fighting has since spread to at least three other states.