This comes in the wake of Uganda’s suspension from the African Growth and Opportunity Act (AGOA), a trade programme that previously granted African nations, including Uganda, duty-free access to the US market.

The suspension of Uganda from AGOA follows concerns from Washington over serious humanitarian issues in the country. The impact of this suspension has been significant, and the introduction of the new tax will further challenge Ugandan exporters, who had already been grappling with reduced access to the US market.

In 2024, Uganda’s total trade with the US was valued at approximately $240 million. The repercussions of this new tax are likely to stretch beyond Uganda, with other African nations benefiting from AGOA, such as South Africa, closely watching the situation. The move signals a tougher US stance on trade with Africa, which could prompt African nations to explore alternative markets, particularly in Asia and the Gulf, to offset the economic impact.

While the Ugandan government has expressed its intention to engage the US diplomatically in a bid to resolve the issue, businesses in Uganda are already preparing for difficult times ahead.

A local business leader expressed concern, saying, “We are very worried about the effect this will have on our exports. It’s going to be challenging, and we will have to find ways to adapt.”

--ChannelAfrica--