Uganda’s exporters are bracing for bumpy waters as escalating tensions in the Middle East disrupt key shipping lanes, potentially driving up costs and delaying deliveries.
The President’s Advisory Committee on Exports and Industrial Development (PACEID) said unrest around the Strait of Hormuz and the Bab el‑Mandeb Strait could ripple through Uganda’s export flows and industrial supply chains.
PACEID chairperson Odrek Rwabwogo painted a stark picture in a March 7 advisory: trade routes are like a six-lane highway that suddenly narrows into a pothole-strewn country road. “You cannot go back but must keep moving despite the logjam,” he warned.
About 35–37% of Uganda’s exports—including coffee, tea, gold, fruits, and vegetables—flow to the Gulf region. Airlines connecting the Middle East to Entebbe also feed tourism, while the United Arab Emirates alone has poured over $3.5 billion into Ugandan infrastructure and agricultural projects.
At the same time, Uganda imports over $1 billion in industrial inputs from the Gulf, including petroleum products crucial to factories. PACEID cautioned that disruptions in the region could hit Uganda hard, affecting both exports and vital supplies.
The alert comes on the heels of March 4 advisories from global shipping giants, including Maersk, halting vessel transits in parts of the Gulf due to security concerns. The Strait of Hormuz, one of the world’s most strategic trade arteries, channels more than 21 million barrels of oil per day.
Shipping companies have responded with Emergency Freight Increases (EFI), raising surcharges to roughly $1,800 for a 20-foot container and over $3,800 for a 40-foot container. Some ships are detouring around the Cape of Good Hope, adding 10–20 days to delivery times.
PACEID warned that higher transport costs could inflate the Cost, Insurance, and Freight (CIF) value of goods, with knock-on effects on VAT and duties at key border posts like Malaba and Busia.
Air freight has not escaped unscathed. Emirates and Flydubai have faced booking suspensions since March 2, while Qatar Airways operates with limited capacity. Exporters were urged to confirm shipments at least 48 hours in advance and explore alternative routes, such as Flynas flights between Entebbe and Riyadh.
Uganda’s diplomatic missions in the Gulf reported that trade in the UAE is experiencing constraints, though flights to Saudi Arabia continue, albeit with temporarily slowed export demand due to Ramadan.
PACEID’s advice to exporters: stay calm, but stay alert. Monitor stock levels, maintain supply to existing markets, and honor contracts. Those tapping into the export fund should stay in close contact with fund managers to avoid surprises.
The committee also recommended reviewing cargo schedules, budgeting for higher freight charges, and keeping sufficient stock to ride out delays. PACEID promises to continue tracking the situation and issuing updates to help Uganda navigate these turbulent trade waters.
