Uganda - how good a trade policy benchmark for Sub-Saharan Africa (SSA)?

This note evaluates Uganda's trade regime in 1997 and 2001, using the methodology developed by Hinkle et al (2003) in How far did Africa's First Generation Trade Reforms Go? An Intermediate Methodology for Comparative Analysis of Trade Policies. Uganda's trade regime was more open in 2001 than in 1997, as during these intervening years Uganda has made considerable progress in providing a level playing field for the tradable sector. On the import side, lower maximum and average tariffs had significantly reduced the level of protection in 2001. On the export side, absence of export taxes and an effectively functioning VAT reimbursement scheme for exporters had sharply reduced the disincentives for exporting. By 2001, Uganda had also initiated policy changes for enhancing the efficiency and transparency of its trade regime through customs administration policy changes, duty-drawback schemes and policies aimed at reducing the scope for scope for administrative discretion in granting tariff exemptions. Due to these sustained policy changes, the overall anti-export bias of Uganda's trade regime was significantly lower in 2001 than in 1997. On the other hand, Uganda has used discriminatory excise taxes to raise the level of effective protection accorded to certain domestic industries. Uganda's trade regime would have been closer to the international good practice observed among low and middle income developing countries in the absence of such discriminatory excise taxes on imported goods. Despite the remaining weakness, however, Uganda's trade regime in 2001 was among the most open among the African countries to which the methodology developed by Hinkle et al has been applied to date.