Impact of the USAID/Uganda agricultural non-traditional export promotion (ANEP) program -- an analysis of recent developments : 1990-1991

This report updates developments in the ANEP program since the 8/90 impact evaluation, which concluded that the ANEP program has had a positive impact on the growth of nontraditional agricultural exports. Despite a variety of adverse macroeconomic pressures, NTE's continued to demonstrate robust growth during the past year. NTE's grew by 70% from 1989 to 1990 and there are strong signs that there will be similar growth in 1991, despite continued infrastructural problems (primarily in financial services and transport services) and the loss of important markets in Rwanda and the Middle East. This growth is primarily due to incentives created by additional GOU policy and regulatory reforms, such as exchange rate reform (legalization of the foreign exchange bureaus and liberalization of foreign exchange transactions), export licensing reform, and modest improvements in the agricultural marketing infrastructure, especially the roads. ANEP has firmly supported the GOU policy reform program. Through ANEP, USAID/Uganda has provided general support to nontraditional exporters and specific assistance to a few firms, which has led to increases in NTE's. The Export Policy Analysis and Development Unit (EPADU), which is supported by A.I.D. funding and TA, has provided important policy analysis and advice to the reform program; additionally, specific technical advice and export promotion programs offered by the EPADU have provided critical support to a few firms which has had a positive impact on the growth of NTE's. One example of EPADU's recent success is its support of a women's organization making handicraft exports. However, while EPADU has had much success analyzing the policy environment and arguing within the GOU for policy and regulatory change to promote NTE's, its seminars and training activities have been too broad and not focused enough to meet the specific marketing needs of export-oriented firms. Moreover, EPADU is late in publishing the results of an Exporters' Survey done in 8/90 and has not yet initiated the 1991 survey which is intended to build baseline data required to measure program and institutional success in promoting NTE's. During 1990, the agricultural NTE's earning the most foreign exchange were: hides and skins; sesame; maize; beans; fish; and timber, all of which earned more than half a million dollars. Interviews with exporters indicate that all of these commodities, with the notable exception of timber, continue to be the most lucrative and highest volume agricultural NTE's during 1991. Indeed, these commodities have been the leading agricultural NTE's for the past 3 years. While horticultural products, especially banana and pineapples, have also been exports of high value, infrastructural constraints (especially appropriate storage and transport) currently prevent these commodities from growing as rapidly as other NTE's. Commodity specific analyses indicate that most marketing arrangements remain fragile for NTE's. Lack of adequate financing to maintain high levels of marketing activities is a common constraint cited by firms involved in virtually every NTE. In addition, the ability of speculators to undermine contractual relationships between exporters and producers or to threaten the marketing relationships made by private investors also poses a threat to the development of sustainable growth in NTE's. Nevertheless, the potential for continued growth in NTE's remains high. Fish exports, in particular, will continue to grow as new processing facilities are opened in 1991. But additional investments in marketing infrastructure, including storage and transport, could increase exports at an even faster rate than has been achieved to date. Moreover, more focused TA to specific firms could help them increase their export marketing efforts. (Author abstract)