By KT Reporter
The European Union has assured Uganda that the trade and economic relations that exist will continue even when Uganda is finally declared a middle-income country.
Ambassador Jan Sadek, the head of the EU Delegation in Uganda, says that when Uganda attains middle-income status, it will no longer benefit from the Everything But Arms (EBA).
Under the Everything But Arms (EBA) scheme for a 99 percent duty-free, quota-free facility, more than 95 percent of Uganda’s exports to the EU are tariff-free and quota-free, which has made the EU Uganda’s third largest trading partner.
The EU’s EBA scheme removes tariffs and quotas for all imports of goods (except arms and ammunition) coming into the EU from least developed countries (LDCs).
On March 11, 2024, the Chair of the CDP formally communicated that the Republic of Uganda had fulfilled the criteria for graduation from the LDC category for the first time.
This implies that the CDP will consider Uganda for eligibility and a possible recommendation for graduation from the LDC category at the 2027 triennial review.
After a recommendation by CDP, and an endorsement by the political bodies of the UN (Economic and Social Council and the General Assembly) in 2027
The EU has stated that should Uganda want to continue enjoying a preference, it will have to sign the Economic Partnership Agreement.
The European Union remains a lucrative market with over 500 million inhabitants. The EU has stated that the signing of the economic partnership agreement would guarantee immediate duty-free and quota-free access to the EU market.
However, the EBA facility favours least developed countries, a category Uganda is expected to graduate from soon, and this means it would lose the preferential trade treatment.
The ambassador was responding to concerns over the future of trade with Uganda as the European Union marks 50 years of diplomatic relations with Kampala.
Sadek says that while the Economic Partnership Agreement is not as lucrative as the Everything But Arms (EBA), it is also important to the European citizens who prefer goods from Uganda, especially agricultural products.
In response, Ambassador John Leonard Mugerwa, the Head of International Legal and Social Affairs at Uganda’s Ministry of Foreign Affairs, said Uganda is yet to be declared a middle-income country, a role of the UN, and that until now, there is time to negotiate deals.
He adds that they are sure Uganda and the EU will reach an agreement for the two to sign the Economic Partnership Agreement, which has been on the table since 2007, but has never been signed because of disagreements amongst the East African Community Partner States.
However, on graduation, Uganda will be able to sign the agreement, which Mugerwa says will have a smaller number of products that will be allowed into the EU than under the EBA.
He adds that this new deal will have provisions for value addition, which has been a major bottleneck in the realisation of high export earnings from exports to the EU and other developed markets. According to Mugerwa, this is part of the wider plans under the EPA for the economic development of the country, and not just trade.
On Value addition, Ambassador Sadek says the EU commends and supports Uganda’s drive to see that its products are processed before being exported. However, this will take longer, especially for the coffee sector, to have processed and parked coffee into the EU, because, according to him, Coffee is a conservative industry.
He urged the country to continue working to improve the phytosanitary standards so that more products can take advantage of the EU market.
On the 50 years of the EU in Uganda, Amb Sadek, “We are celebrating something simple, but powerful: a partnership that has lasted, adapted, and delivered.”
He revealed that over these fifty years, for example, the European Union has invested over €5 billion in development cooperation in Uganda, and another €5 billion in European private investments like companies building, trading, employing, and innovating in Uganda, and “taking long-term bets on Uganda’s future.”
In 2024, trade between Uganda and the EU hit a record €2.1 billion (about UGX 8.8 trillion) with a 60 percent surge in Ugandan exports, mainly coffee, fish, and fruits, which reached €1.25 billion (UGX 5.2 trillion).
In the same year, the balance shifted in favour of Uganda, with a reported trade surplus of €500 million (UGX 2 trillion).
The EU has invested in projects in schools and skills, health, roads, and energy, as well as in the refugee sector, on top of trade.
“One place where this partnership has been visible in very human terms is Northern Uganda. Conflict left deep scars – social, economic, personal. The EU stood with communities during recovery: rebuilding, restoring livelihoods, strengthening local governance, and reconnecting the region to national development through programmes like the Development Initiative for Northern Uganda. The lesson from that experience is simple: peace and development are inseparable,” he says.
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