The European Union has agreed to support Ugandan agribusinesses in the coffee and cocoa sector under the EU-EAC Market Access Upgrade Programme (MARKUP).
Funded by the European Development Fund for a total amount of UGX 150 billion (EUR 35 million), MARKUP aims to assist small and medium-size enterprises across the region to improve access to the EU market and increase interregional trade. The amount earmarked to Uganda under this programme is UGX 15.6 billion (EUR 3.7 million).
This morning, Finance Minister Hon. Matia Kasaija and European Union Ambassador H.E Attilio Pacifici signed the financing agreement to kick start the programme.
MARKUP is meant to address supply side constraints and help increase exports, especially to the EU. Interventions will target selected value chains and cover quality assurance and certification, value addition, trade facilitation and business promotion. In Uganda the focus is on coffee and cocoa vale chains in line with the current National Export Development Strategy.
According to EU data, in 2017 coffee exports from Uganda to the EU market have increased to over UGX 1.3 trillion (EUR 312 million). In ten years they have more than doubled. Cocoa exports from Uganda to EU countries have peaked UGX 153 billion (EUR 36 million) in 2015 and the cocoa sector presents strong potential for further development.
Coffee and cocoa are predominantly grown as smallholder cash crops, providing income for thousands of households in Uganda. There is increased demand in specialty coffees from the region and, overall, long term global coffee demand is expected to outstrip global supply. The demand of cocoa is also constantly on the rise, as the EU accounts for over 60% of the world’s cocoa bean imports and more than 40% of the cocoa powder and butter import.
Currently any Ugandan product except for arms and ammunitions can access the EU market duty-free, quota-free under the EU’s “Everything but Arms” preferential regime offered to all Least Developed Countries. In the long term Uganda can secure free access to the EU market under the EU-EAC Economic Partnership Agreement concluded in 2016 and waiting to be signed and ratified by all EAC countries.