What you need to know:
If Ugandan business owners cannot move freely, without visa restrictions, then Uganda’s exports to South Africa will be curtailed, because it is people who trade, it is people who do business.
The trade and business relationship between Uganda and South Africa has been growing steadily over the years. Uganda offers attractive incentives for investors which include the right to expatriate up to 100 per cent of profits made in the country.
South African companies including MTN, Stanbic Bank, Eskom, and Absa Bank, have made investments in Uganda in sectors such as telecommunications, banking, finance, energy, and agriculture. It is reported that there are over 70 South African companies, which have collectively invested more than $2.4 billion. These investments contribute to job creation and economic development.
Furthermore, there have been several collaborations between Ugandan and South African businesses and government entities with trade missions organised to promote business partnerships.
The most current trade data indicates that the total value of Uganda’s exports to South Africa stands at $20 million, while South Africa’s exports to Uganda stand at $187 million. However, these numbers can be quadrupled, to create a win-win trade position for both countries, if the most pressing issue of visa restrictions on the Ugandan business community is addressed.
Whilst South African citizens are not required to apply for a visa if they are coming for a short stay in Uganda, it is very difficult for the Ugandan business owners and entrepreneurs to travel to South Africa. The visa restrictions not only hinder trade between the two countries, but also, greatly disadvantages Uganda. Comparatively, both Kenyan and Tanzanian citizens have visa free travel to South Africa for up to 90 days.
Pain of visa restrictions
The visa restrictions on Ugandan business owners and entrepreneurs make it difficult for them to personally visit potential clients, attend trade fairs, or engage in face-to-face business meetings.
This limitation hampers their ability to explore market opportunities, establish relationships, and negotiate deals effectively. Obtaining visas, is an additional business cost, as it includes visa processing fees and potentially lost business opportunities, due to delays in obtaining visas.
Visa restrictions introduce an uncertainty and risk into business planning which makes Ugandan business owners, and entrepreneurs, hesitant to engage in long-term business agreements or investments due to the uncertainty of visa approvals. This is hindering the growth and expansion of trade between the two countries.
The reality is that visa free movement is a trade facilitator, especially for trade in services. Services are offered through the movement of a service supplier, such as a travel agent or a lawyer, from one country to another.
Also, for businesses to set up a commercial presence, which can be done by setting up an office, joint venture, or appointing distributer in another country, the business owner must be able to have free movement to enable them to conduct due diligence and build business relationships.
At the regional and continental level, studies have shown that free movement can boost tourism and increase cultural exchange. This is why in 2018, the African Union adopted the Protocol on free movement of people. This protocol is yet to be ratified by most countries on the continent. However if implemented, it could have significant impact on trade.
Despite the operationalisation of the Africa Continental Free Trade Area (AfCFTA) in 2019, intra-African trade remains dismally low. At less than 15 per cent of total trade, intra-African trade lies well below other regions.
By comparison, in Europe and Asia, intra-regional exports account for roughly 70 per cent and 60 per cent respectively. Trade among African countries is partly stifled by visa restrictions which make it strenuous for citizens to move from one country to the next.
Damali Ssali is a trade facilitation expert.