By Vincent Kisembo
Over the years, Uganda has been earning over US$ 76 Million from Tea Exports annually at least-over the last 10 years, making it the fourth largest agricultural export after Coffee, Maize, Fisheries, according to Uganda Bureau of Statistics Records. Further, Uganda currently produces 80,000 Metric tons of tea which is over and above the processing capacity of 32 existing tea processing factories in Kabale, Kisoro, Kabarole, Kyenjonjo, Bushenyi, Mityana, Sheema, Buikwe among others.
In Uganda, Tea is exported after adding value which is in line with President Museveni’s continuous calls to entrepreneurs to promote value addition for all commodities so as to generate higher revenue returns, foster employment and enhance innovations along the value chain.
Further, despite Tea being one of the leading export earning commodities for Uganda, in comparison with other regional countries such as Rwanda, Kenya and Tanzania, export revenue earnings remain lower for Uganda because our quality of tea is not good.
Sadly, however, unlike Coffee that is regulated by Uganda Coffee Development Authority (UCDA), the tea sub sector continues to be unregulated. Although, there have been some efforts by government to moot a tea policy to help streamline the sector, the efforts have often been sloppy.
The poor quality is as a result of absence of an enabling policy and legal framework with no dedicated government entity to regulate tea along its value chain. Currently, there exist only a ‘desk’ at the Ministry of Agriculture Animal Husbandry and Fisheries (MAAIF). The Desk cannot ably handle the ever increasing complex tea issues in Uganda.
Sighting the example of Rwanda, for example, its tea has gained international recognition for its exceptional quality and characteristics. The tea has gained acclaim at prestigious tea competitions, attracting the attention of connoisseurs and buyers worldwide. The demand for Rwanda tea continues to grow with exports reaching numerous countries including the United States, United Kingdom, Germany, Pakistan, and Japan. Rwanda earns US4 Per Kg of black Tea, while Uganda earns a USD 1.5 per Kg. Kenya is earning USD 3 per Kg, Tanzania USD 2.5-3.
According to the Uganda Tea Development Association, revenue earnings for Tea exports have drastically reduced due to ongoing Russia-Ukraine Conflict and the deteriorating Pakistan economy. As at June 30, 2023, for example, Uganda earned USD0.85 Per Kg compared to USD 1.28 earned in July 2022 per Kg translating a reduction by -0.43 USD/kg. Contrary, Kenya as at June 30, 2023 earned USD 2.02 Per Kg of processed tea compared to USD2.35 Per Kg earned as at end of July 2022. This translates to a negative change -0.33 dollars/kg.
Relatedly, Rwanda as at the end of June 30, 2023, a Kg of processed tea earned USD 2.39 compared to USD 2.8 earned per Kg as at end of July 2022. Although there is notable price reduction, the change is not very significant.
Therefore, our neighboring countries are earning higher revenues from tea exports because the tea sub sector is well regulated in their countries from start to finish (along the value chain). Most of the tea players in Kenya and Rwanda, besides, Uganda have emphasized the acquisition of international accreditation certifications (ISO Standards) in addition to their own internal compliance standards. This has resulted easy access to direct international market for their processed tea. This, unfortunately, is quite different for Uganda because 90% of our tea is auctioned at the Mombasa, Kenya Auction market.
Therefore, in order to increase tea revenue earnings for Uganda, it is important that government institute a Tea Regulator as a key mechanism that will help ensure the smooth functioning, growth and sustainability of the tea industry. This move, when effected will have enormous benefits largely for Uganda in the following ways; –
A tea regulator will help to ensure quality Control: The regulator will play a pivotal role in establishing and enforcing quality standards for tea production and processing. Ensuring consistent and high-quality tea products is essential for maintaining the reputation of the country’s tea in both domestic and international markets.
Market Stability: By monitoring and regulating the tea industry, the regulator when instituted will help stabilize market conditions. It can address issues related to supply and demand imbalances, price fluctuations, and unfair trade practices, creating a more predictable and sustainable market environment for tea growers and stakeholders in Uganda.
Consumer Protection: the regulator will help protect consumers by ensuring that tea products meet safety, health, and quality standards. This can involve inspecting tea factories, conducting product testing, and imposing penalties on those who violate regulations. This will as well boost international confidence in our tea
Sustainability and Environment: The Regulator will encourage sustainable agricultural practices and environmental conservation in the tea industry. This will include promoting responsible land use, water management, and reducing the use of harmful chemicals across tea concentrated farming zones in Toro, Kigezi, Ankole, Mityana and Buikwe.
The regulator will provide valuable data and insights to policy and Law makers, helping them formulate effective policies and regulations that will foster growth and competitiveness in the tea sector in Uganda, regional and at global fronts.
Lastly, the tea regulator will work towards opening new export markets and resolving trade barriers, ensuring that the country’s tea industry has access to a diverse range of international buyers as opposed to selling at a single market currently being the Mombasa Auction Market, Kenya.
The writer is a, PhD Fellow and Senior Monitoring and Evaluation Specialist
Uganda Development Corporation (UDC)
