AidData Working Paper

Leveraging Aid for Trade Capacity in Uganda

Date Published

Oct 1, 2014

Authors

Alex Thomas Ijjo, Isaac Shinyekwa

Publisher

Citation

‍Ijjo, Alex Thomas and Isaac Shinyekwa. 2014. Leveraging Aid for Trade Capacity in Uganda. AidData Working Paper #1. Williamsburg, VA: AidData. Accessed at http://aiddata.org/working-papers.

AidData Working Paper

Leveraging Aid for Trade Capacity in Uganda

Date Published

Oct 1, 2014

Authors

Alex Thomas Ijjo, Isaac Shinyekwa

Citation

‍Ijjo, Alex Thomas and Isaac Shinyekwa. 2014. Leveraging Aid for Trade Capacity in Uganda. AidData Working Paper #1. Williamsburg, VA: AidData. Accessed at http://aiddata.org/working-papers.

The hindrances to the gainful participation of least developed countries (LDCs) in international trade are predominantly domestic supply related constraints rather than foreign market access. These constraints include variable productive capacity, economic infrastructure bottlenecks, and inability to meet international quality standards. In recognition of such challenges facing LDCs, the World Trade Organization (WTO) launched the “Aid for Trade” (AFT) initiative in 2005 to coordinate international support for strengthening trade capacity in LDCs. Looking at the case of Uganda, we initially examine the role of overall Official Development Assistance (ODA) in driving Uganda’s external trade and then specifically that of AFT in strengthening national trade capacity. Although we find reasonable alignment between aid and national development priorities, there is, as yet, very little evidence of a robust aid impact especially on export capability vis-à-vis that of import. The paper underscores persisting deficiency in Uganda’s capacity to meet internationally accepted standards and to ensure stability and consistency in export supplies. While we note the development of some capacity in trade policy formulation and the mainstreaming of more relevant trade strategies into the country’s National Development Plan (NDP) with aid support, we recommend that future aid support be directed into unlocking the crippling constraints in Uganda’s productive capacity, standards development, economic infrastructure and sound trade policy analysis and formulation.