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Katuna cooperatives hit hard by Uganda-Rwanda standoff

Cooperatives operating in Katuna town, which is situated in Kabale district, along the Uganda-Rwanda border, have decried the ongoing standoff between the two countries, saying it has cost them business.

Relations between Uganda and Rwanda have been strained after Rwanda, in 2018, accused her Northern neighbor of illegally detaining Rwandan citizens resident in Uganda and supporting rebel groups hostile to Kigali. Kampala denied the allegations.

In the years that followed, businesses based at the border town have paid the price as the Katuna border has faced several closures, with the latest one being a six-months ban on cross-border travel imposed by both countries in March 2020 as part of efforts to curb the spread of the COVID-19 pandemic.

At a recent visit to Katuna, theCooperator found that business is sluggish at the once-vibrant border point. Cooperatives too, have not been spared.

According to Mable Korugyendo, the Chairperson Katuna Traders Co-operative Savings and Credit Society Ltd located in Ndorwa West, the border closure has been a nightmare for members of the cooperative.

“Most of our members are business people but ever since the two states started being on bad terms, members ceased earning anything to support the cooperative,” says Korugyendo

She adds that most members, unable to raise money for weekly savings following the closure of the border, opted to stay away from savings groups instead.

“Since many members were no longer running any business, Katuna Traders Co-op Ltd faced some financial challenges as members started defaulting.” 

Other challenges

In addition to the border closure, Korugyendo points to a number of factors that conspired to bring down Katuna Traders Cooperative, including the COVID-19 pandemic, Emyooga fund and NGO pressures.

Emyooga lure

Emyooga refers to a Presidential Wealth and Job creation initiative under which enterprise groups, each with a minimum membership of 30, are entitled to receive up to Shs 30m in funding to be borrowed by members at interest rates as low as 5 percent annually. 

Korugyendo says the initiative, while good, inadvertently contributed to the demise of Katuna Traders Co-op.

“When the Emyooga fund was introduced, they were encouraging people to form smaller groups in order to benefit from it, so most of our members had to quit to form small groups amongst themselves in order to benefit from the government program,” says Korugyendo.

NGO issue

She also revealed that members of the cooperative are often lured out of active participation in the coop’s activities by non-governmental organizations (NGOs) offering grants or lucrative job opportunities.

“NGOs usually come to the border interested in sponsoring women and giving them grants and most of our members have exited to go and earn something from them,” she explains.

The COVID-19 effect

Korugyendo says COVID-19 was the final nail in the already ailing Katuna Traders Cooperative’s coffin, resulting in the mass migration of the majority of the coop’s members to other business centers.

“When COVID-19 came, the border was completely closed: there was no transport and no more business, so most of the people were forced to go back to their villages while others vacated to other places where they could survive,” Korugyendo noted.

The almost defunct Katuna Traders Co-operative Savings and Credit Society Ltd has a total turnover of 4.7m and a loan portfolio of about 2m.

Korugyendo appealed to government to resolve the Uganda-Rwanda border conflict such that business can return to normal at Katuna Trading Centre.

“Border issues are in the hands of our leaders and they are aware of our hardships in the business, so I think they are playing their part at the higher level,” Korugyendo said.

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