Trading up: Harnessing the African Continental Free Trade Area for growth in Uganda

Project report Firms and Trade

African economies, including Uganda, have embarked on an ambitious programme of regional integration in the form of the African Continental Free Trade Area (AfCFTA). This paper uses newly sourced transaction level trade data for Uganda, and a partial equilibrium simulation model to assess the trade and revenue implications of reductions in tariffs and improvements in trade facilitation under the AfCFTA for Uganda. The analysis reveals that Ugandan exports are already regionalised with exports to its major market, the East Africa Community (EAC), driven by a large number of firms, exporting many products at low values under high preference margins. While the AfCFTA opens up new export markets to Ugandan exporters, preference erosion in the EAC market exposes regional exporters to increased competition.