What you need to know:
For Ugandans, accessing the South African VISA remains a problem, considering that all South Africans need to do is just apply online and receive their VISAs upon arrival in Uganda.
As the private sector players keep negotiating for daily flights between Entebbe and Johannesburg, the Private Sector Foundation Uganda (PSFU), chief executive officer Stephen Asiimwe, explains to Prosper Magazine’s Ismail Musa Ladu, what needs to be done to walk-the-talk from the recently concluded summit between Uganda and South Africa. Excerpts
What is the value of the recent Uganda - South Africa Trade and Tourism Summit held in South Africa? Was it really worth the money?
It was worth every bit. The summit recognised that there is a lot of trade potential between the two countries. In the EAC region, Uganda is currently the second largest trading partner with South Africa. The summit also noted that private sector plays a big role especially in the tourism sector. The two countries have since agreed to develop joint tourism packages to increase the value and volume of tourism business.
The summit also recognised that infrastructure is a shared trade barrier. This can be mitigated through an infrastructure bond that can be leveraged to fund the trade infrastructure such as roads and ports to facilitate the movement of people and goods. This can be made possible through existing trade blocs such as East African Community (EAC), Southern African Development Community (SADC) and Common Market for Eastern and Southern Africa (COMESA). At the end of the summit, cooperation agreements were signed including in the fields of tourism, transport and information and communication technologies. So, this was a fruitful engagement.
Speaking of being fruitful, can that be tangibly demonstrated in terms of evident business opportunities to pursue?
There is a lot to invest in between the two countries. On our part, we are primarily looking forward to leveraging on our comparative advantage in commercial agriculture, agro-processing and agribusiness. We also have advantage in manufacturing such as pharmaceuticals, tourism infrastructure and accommodation but also in services like health, education and finance.
The other areas are mining – for example gold, iron ore and steel; infrastructure development like light rail mass transit and housing; and ICT.
How easy is it for a Ugandan business to set up shop in South Africa?
Just like every strong economy, there are minimum requirements that every potential investor needs to meet before accessing the local market. This is the same with South Africa. The good thing is that the South African government has expressed willingness to welcome our investors as well as exports. We just need to be genuine in our dealings – serious investors and consistent with our supplies.
Then there is this Visa headache. Getting to South African is not only frustrating but annoying. Actually, it is one of the non-tariff barriers (NTBs), hindering trade between the two countries. Was this issue addressed during the Summit?
When you are trading with another country, the ease of movement of people and goods is very important. Southern African Development Community (SADC) members such as Eswatini, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Seychelles, United Republic Tanzania, Zambia and Zimbabwe don’t need VISAs to South Africa.
They just walk in. A couple of months ago, the President of Kenya and delegation of Kenya Business Community went to South Africa and were able to get an ease of movement for their business people. For us - Uganda, accessing South African VISA remains a problem, considering that all South Africans need to do is just apply online and receive their VISAs upon arrival in Uganda. This gives them an unfair advantage over Ugandans that wish to do business in South Africa.
Indeed, this challenge formed the basis of some of the strongest points we discussed. The good news is that both Presidents of Uganda and South Africa agreed in principle to address this matter. The South African government through President Cyril Ramaphosa committed to conclusively address this issue. As communicated by Uganda’s High Commissioner to Pretoria, Amb. Paul Amoru, the new guidelines for Uganda and South Africa VISAs will be announced by October 2023 and our hope is that it will include the Visa on Arrival policy for Ugandans going to South Africa.
You keep talking about the importance of the two markets – what exactly is at stake?
Look, South Africa is a lucrative market that we haven’t paid real attention to. Uganda exports cotton, gold, fish fillets, tobacco, coffee, vanilla, fresh flowers and skilled labour to South Africa. Remember, South African offers a cheaper importation option for Uganda to get commodities that we would otherwise need to get from China or Europe. Pharmaceuticals, electronics, iron ore, car parts, among others, all come from South Africa.
Additionally, there are several big South African businesses operating in Uganda spread across different industries including Telecommunication, Banking, Insurance, Energy, Pay TV and Retail Outlets among others. As Private Sector Foundation Uganda, we are advocating and pushing for more Ugandan businesses to get established in South Africa as well.
The fact that Uganda is South Africa’s 15th-largest trading partner in Africa and the second largest in East Africa shows the importance of good trade relations between the two countries.
Between 2017 and 2021, total trade between the two countries reached a peak of about $170 million. South Africa´s exports to the Republic of Uganda amounted to $169 million in 2018, while its imports from Uganda increased from $ 6.8 million in 2017 to $ 17.5 million in 2020.
Clearly this kind of trade is imbalanced …
Yes, from the above figures, it is clear that we have a balance of payment problem. We spend so much on South African imports compared to what we earn from our exports to South Africa. This is what we are working to address. The opportunities to grow our numbers with South Africa are endless. For example, South Africa consumes a lot of coffee. We discovered that most of this coffee is from Uganda but routed through Europe. It is exported to European countries like Germany, they add value and sell it in the South African market expensively. This we can do ourselves and export directly to South Africa.
What should be the focus for Ugandan traders interested in trading with South Africa, considering market access and the value it can attract?
First and foremost, our coffee is an instant seller. South Africa has a population of 60 million people and surrounded by non-coffee growing nations such as Namibia, Botswana, Eswatini, and Lesotho among others. They all don’t grow coffee. So we can directly tap into the sixty million people in South Africa, but also the ecosystem of another 40 million South Africa neighbuors, using South Africa as an entry point.
Thirdly, our milk in powder form.
Fourth; our NAADs products, soya, cashew nuts, chai seeds and ground nuts. Our matooke is also a big ticket item in South Africa. With a population of half a million indigenous Ugandans living in South Africa, the market for matooke is straight forward.
Our fruits, vegetables, flowers and fish are marketable items in South Africa. A few weeks ago, we signed a fantastic deal with our pharmaceuticals specially to export Antiretroviral treatment (ARVs) to South Africa. Our professional services (doctors, and engineers) are much sought after in South Africa.