Kampala: When Trade and Industry minister Amelia Kyambadde appeared before parliament to defend her 2012/2013 budget, attention surprisingly zeroed on the Shs482 million provision (Approx. US$195,000) for the African Growth and Opportunity Act (AGOA). Members on the Parliamentary Committee on Trade and Industry threatened to block passage of the ministry budget unless Kyambadde justified continued government expenditure on a “failed” venture.
AGOA, the American-government sponsored initiative under which poor countries are allowed to export up to 7000 selected items duty and quota-free to the U.S., was praised when it was introduced in 2002 but has been a disappointment for Uganda.
Although the government has invested over US$10 million, approximately US$1 million per year on the initiative, it has failed to take off due to political interference, corruption, foreigner domination, and favouritism.
In 2011, AGOA exports from Uganda to the U.S. amounted to just US$1.4 million. Although small, the figure represents a 300% rise over 2010 when AGOA exports were just US$ 345,000. In 2009, the exports were worth just US$222,000.
A closer look at AGOA-Uganda’s flagship, the apparel and textile segment, reveals an even bleaker picture. In 2011, exports to the U.S. in this segment fetched US$ 984,000 only.
Meanwhile, the AGOA initiative was allocated Shs382 million in the 2010/11 budget the same as in 2009/10. The question, therefore, is what does this money do?
Trade Minister Kyambadde under whose ministry the AGOA vote falls says she does not know. “I need to be honest, this AGOA money is just passed through my ministry and they demand it with a lot of force,” she told journalists, “Money is from my ministry but they (AGOA officials) tell me they are answerable to the President.”
The minister told the parliamentary committee scrutinizing her budget that she is preparing strategic papers that would ensure all presidential initiatives have a structure for proper implementation.
Although AGOA is listed as Output 060405 of Vote 015 of the Ministry of Trade in the budget framework papers, the section that should detail its activity is marked: “Information not available” for 2010/2011. In the 2011/2012 section its single activity is listed as “Trade Promotion” of AGOA products.
Makindye East MP, John Simbwa, who sits on the Trade and industry Parliament Committee, says the AGOA money is misallocated. “AGOA falls under the Industry and Trade ministry and is answerable to the President but AGOA money doesn’t go where it is supposed to go, it went into monitoring instead of the AGOA activities, we don’t know its relevance,” he said.
Busia Municipality MP Taaka Kevina said AGAO activities smack of conflict of interest and marginalization. She said parliament is unable to monitor AGOA activities because of President Yoweri Museveni’s interference.
“Am not happy with AGOA and I don’t know why it is personalised and as Uganda we have not benefitted at all. It is personalised and money just passes through the Ministry of Trade and we don’t know how it is used,” Taaka said.
“I think we will withhold AGOA funding because we can’t monitor it and we don’t know why. This AGOA killed Co-operative Societies and the coffee Marketing Board and the government started funding Tri-Star, a foreign company,” she added.
But the Presidential Advisor on AGOA, Susan Muhwezi who was also in parliament to defend the vote, says confusion over its budget is a result of ignorance of its role.
“People have not yet understood AGOA,” she told The Independent in a phone interview. "AGOA is a private sector initiative and it works with all the government sectors and there is an AGOA committee which reports to the President and it is responsible for over 8,000 products in agriculture and chemical among others.”
“We need to have right policies in place that support AGOA and a reasonable budget that helps us to implement. AGOA is a private sector initiative, so we need to sensitise sector players to take advantage of this opportunity,” she said.
Part of the confusion results from numbers that show that although Uganda’s trade balance with the U.S. remains unfavourable, the value of Uganda exports has been rising. In 2011, the U.S. imported US$ 55 million from Uganda and exported US$116 million worth of goods leaving a trade balance of US$61million between them.
Most of Uganda’s exports were in the agricultural segment which fetched US$ 39 million in 2011. It remains unclear how much of this value results from the budget allocation to AGOA since some of the items are covered under theU.S. Generalised System of Preferences (GSP) and not AGOA.