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Analysis

10 ways in which Rwanda plans to economically squeeze Uganda

Uganda’s President Museveni (L) is at the receiving end of his erstwhile ally Paul Kagame of Rwanda. Rwanda has decided to freeze economic ties with Uganda (FILE PHOTO)

KAMPALA – The simmering tension between Uganda and erstwhile neighbor and ally Rwanda boiled over last week with Rwanda’s unprecedented move to close Katuna border, the first time it was closed since President Juvenal Habyarimana’s regime was toppled by the ruling Rwanda Patriotic Front, a quarter century ago.

Though this move caught many off-guard, those who have been paying close attention to the souring relations between the two countries fear worse is yet to come since Rwanda has been preparing for this for the past two years as the country’s intelligence services stood idly by though they seem to have woken up to the reality on the ground.

PML Daily, after speaking to multiple sources looks at ten economic measures Rwanda has silently implemented against its northern giant Uganda that dates as far as the beginning of the year 2017.

Increased taxation of all goods from Uganda

Hitherto 2017, goods from Uganda would enjoy preferential treatment when entering Rwanda and would hardly attract any taxes. But this has changed in the recent past when Rwanda Revenue Authority instituted a stringent tax regime for all goods coming from Uganda where any three similar items for even mundane items like sandals are now subject to taxes. Word at Kagitumba border is that recently, a farmer crossed to cut grass for his cows across the border and on return he was asked to pay for taxes.

Order to withdraw Rwandan students from educational institutions in Uganda

Rwanda graduands in some of the Ugandan educational institutions. (FILE PHOTO)

In the recent past, you could hardly go any education institution in central and western Uganda without finding Rwandan students.  But that changed when Rwandan parents were warned to stop taking their Children to Uganda education institutions. One education institution that has been most affected by this directive is the nascent Kabale University and the wider Kabale Municipality which until recently was buzzing with Rwandan students.

Financing Traders to import directly from Turkey and China

In early 2018, Rwanda Chamber of Commerce called a meeting for all traders and importers who were mostly buying goods from Uganda and announced the ‘change in government policy’ discouraging them from importing goods from Uganda. When traders complained that they didn’t have enough capital to import full container loads, the government agency presented a sweetener, by providing loans to cover their import budget deficit.

Cancellation of contracts of all Ugandan companies

In mid-2017, when this round of simmering tension between Uganda and Rwanda came to the fore, the Rwanda government issued an order to cancel all contracts that had been awarded to Ugandan companies. For contracts that were already running, an order was given to frustrate the companies by delaying or even cancelling payments. A number of companies lost money in Rwanda. We cannot name the companies here, for fear of retribution.

Termination of employment for Ugandans working in Rwanda

Some of the Ugandan job seekers in Rwanda. (FILE PHOTO)

It is now an open secret that Ugandans are no longer welcome in Rwanda’s workforce. When the ruling RPF came to power in 1994, a decree was issued to adopt English as the official language replacing French which meant teaching in schools had to be in English but Rwanda had no teachers and the country turned to Ugandans to fill that gap. Most of these teachers after two decades of service have had their contract renewal applications rejected and many forced to return back to Uganda.

Complicating cross-border tourism especially for Gorilla tracking

In 2016, Rwanda increased their Gorilla tracking permits to USD $3,500 while Uganda maintained Gorilla tracking permits at USD $600. But due to the proximity of Kigali International Airport to Bwindi Impenetrable Forest as compared to any other airport in the region, visitors continued to prefer to fly into Kigali and travel by road to Bwindi. However, the Rwanda authorities have made crossing of any vehicles carrying tourists very complicated including issuing threats to tour operators in the country.

Banning Uganda food traders in Rwanda

For a very long timing dating pre-independence for both countries, farmers, food traders and dealers along the border areas would establish their businesses on both sides of the border with the Ugandan location used for sourcing food while Rwanda location is used for sales. However, the Ugandan traders were banned from Rwanda on the pretext that trade in foodstuffs should be left to the locals in complete disregard to the East African Community protocol.

Withdraw from the MTN IT hub

Rwanda has been vying to position itself as the regional IT hub. In trying to streamline their IT operations in the region, Telecom giants MTN decided to set-up an IT Hub serve all its operations in East & Central Africa and Rwanda had hoped to host the IT Hub. However, MTN overlooked Rwanda and established the IT Hub in Uganda hence creating a number of jobs in the country but this did not go down well with the Rwanda government and looked for a way to hit back. The country later pulled out of this arrangement and instituted fines against MTN, a move that eventually crippled IT Hub operations and MTN ended abandoning the arrangement.

Banning Rwanda delegations to Uganda Conferences

Minister James Musoni heading Rwanda delegation in round table meeting on the infrastructure of deepening and widening regional Integration. (FILE PHOTO)

International conference organizers in Uganda would always be looking forward to a big Rwanda delegation that would usually spice up the conference. However, a directive was issued banning attendance of all-conference in Uganda or having limited numbers in case the conference was essential a move that has severely affected conference attendances in the country.

Blocking Rwandan citizens from touring Uganda

Before this latest tensions between the two countries, most Rwandan would look forward to take their weekend breaks in Uganda either visiting family and friends or plain tourism. Lake Bunyonyi in South West Kabale was a favorite destination for Rwandese taking a weekend break. However, all these have been stopped from visiting Uganda and been encouraged instead to support local tourism or visit Kenya or Tanzania.

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