Uganda keen to bolster trade ties with Somalia

For the last decade, Uganda has flexed muscle by intervening militarily in South Sudan and the Democratic Republic of the Congo (DRC). 

The intervention to pacify the war-ravaged Somalia has helped Kampala score a number of diplomatic points with the global north.

During his two-day visit to Uganda this past week, President Hassan Sheikh Mohamud made it abundantly clear that security was on top bill.

“I had a productive meeting with [His Excellency] Kaguta Museveni today as a part of my state visit. We discussed further strengthening the strong bilateral relations between Somalia and Uganda in all areas of mutual benefit,” he said, adding, “Uganda is a strong ally of Somalia in our fight against [international] terrorism.”

Since 2007, the Uganda People’s Defence Forces (UPDF) has been in Somalia taking the fight to al-Shabaab, an Islamic insurgency group.

“Uniting and developing a country calls for a correct ideology, that’s how we managed to develop the UPDF,” Mr Museveni said, adding, “When we send them for missions like in Somalia, they see it as their duty to protect their African brothers in the true spirit of pan-Africanism.”

Also at the top of Mr Mohamud’s bill was Somalia’s request to join the East African Community (EAC). Despite being in the job for only three months, Mr Mohamud has made becoming the eighth EAC partner state his pet project. 

Last month, the bloc’s Heads of State Summit agreed to fast track the verification of Somalia’s application to join a community that is still struggling with its objectives of economic and political integration.  

Third time lucky?

This is the third time Mogadishu is applying to join the Community, with the first attempt having come between 2012 and 2017 during Mr Mohamud’s first spell as president. In 2019, then President Mohamed Farmaajo also tried—unsuccessfully—to join the bloc. The request in 2019 was met with such indifference that the bloc never sent a team of experts to Mogadishu to assess if Somalia qualified for membership.  

The return of Mr Mohamud, who is seen among leaders in the region, as a more outward-looking president, is widely expected to act as a tonic.

“Somalia belongs to East Africa. There is no country among the seven countries sitting here that Somalia is not linked to by business, by the community, or by any other means,” Mr Mohamud said during the Heads of State high-level retreat of the EAC Common Market protocol hosted in Arusha in July.   

During his two-day visit to Uganda, Mr Mohamud received assurances from Mr Museveni that Kampala will back Mogadishu’s request to join the EAC. Mr Museveni said he will support Somalia’s application because “the country fulfils all the requirements to join the bloc.”

Although Uganda has contributed a lot to the relative stability in Somalia, trade relations between the two countries are at best patchy. 

“We deployed the UPDF there but when you look at our exports to Somalia, they are few. The figures don’t look good at all,” Mr Stephen Asiimwe, the executive director of Private Sector Foundation Uganda (PSFU), told Sunday Monitor. 

Kenya, which shares a 681-kilometre border with Somalia, has burgeoning trade relations with its eastern neighbour. Records indicate that in 2021, Kenya exported tobacco ($42m or Shs158b), miscellaneous edible preparations ($19m or Shs72b), pharmaceutical products ($16m or Shs60b), soaps and lubricants ($6.79m or Shs26b), cereal, flour, starch and milk products ($6.4m or Shs24b) to Somalia, among others.  

In fact, Kenya’s exports to Somalia annually total up to $110m (Shs414b). The imports from Somalia, on the other hand, are worth $905,000 (Shs3.4b). 

Big Somali community

On top of having a large population of ethnic Somalis, Kenya hosts roughly 278,000 refugees and also invested deeply in Somalia’s post-conflict renovation. It has even hosted several conferences that augmented peace-building efforts in Somalia. 

Mr Asiimwe told Sunday Monitor that he hoped Uganda-Somalia trade relations can improve in the wake of Mohamud’s visit.  

“They were talking about security and other bilateral agreements, but for us, we said we can have a summit because Uganda and Somalia are one. We also have a big Somali community here in Uganda. They are doing a good job in our transport sector,” Mr Asiimwe said, adding, “We need to exploit this relationship such that we increase our exports to Somalia because that country has a lot to offer.”  

Many of the Somali refugees in Uganda pitch camp in Kisenyi, a slum in Kampala City that has now been christened Little Mogadishu. Somalis, however, don’t only live in the slums. 

“Our Somali community has grown because we have very wealthy businessmen like Omar Mandela,” Mr Asiimwe said, referring to the businessman who owns Mandela Group (that counts Café Javas, City Tyres, City Oil, and City Lubes among its string of businesses).  

Uganda Investment Authority (UIA) has also taken relations with Somalia seriously. 

“We want to form a joint investment council that looks at opportunities in Uganda and Somalia for partnership and investments for both countries,” Mr Morrison Rwakakamba, the UIA board chairperson, said. 

Uganda-Somalia relations 

Being landlocked, Uganda has been heavily reliant on the Kenyan port of Mombasa. In recent times, it has also gradually increased its usage of the Central Corridor via Tanzania. Mr Rwakakamba says, adding a third option will have rich rewards.  

“We want to harness the long coastline that Somalia has. If they can join the East Africa Community, it expands our ability to access maritime-associated resources but we also believe we need to expand the trade flows between the two countries…if you look at the year 2020, our exports to Somalia were approximately $67,000 (Shs252m) and our imports stood at $6,000 (Shs23m),” he said, adding, “And the year before that, it was $550 (Shs2m) in imports. So, we still see limited flows of trade between the countries. We need to figure out pathways to expand that. Now we have Uganda Airlines, it presents an opportunity.”  

Uganda’s ambitions to upsurge trade with Somalia are contingent on the latter joining the EAC, a process that could take two years amid skepticism from some member countries. Just recently, Somalia was feuding with Kenya—the bloc’s biggest economy—in maritime border dispute. 

Last year, Somalia cut diplomatic ties with Kenya on grounds that its neighbour has time and again intruded in its internal affairs and violated its sovereignty. Kenya further annoyed authorities in Mogadishu when it walked back on an agreement to issue its citizens visas on arrival yet the presidents of both countries had agreed to it in 2019.   

The smouldering tensions had seen Mogadishu institute a two-year ban on air shipments of khat—a mildly narcotic leaf popular in Somalia. The ban, which was under the pretext of fighting coronavirus, hit central Kenya hardest since every day, 50 tonnes of khat worth $50,000 (Shs188m) was being shipped to Somalia.  

The ban was recently lifted after talks between Mr Mohamud and Mr Uhuru Kenyatta, the outgoing Kenyan president.  

A lot on the plate

Somalia’s inclusion into the bloc also faces skepticism that the EAC is so far not working despite signing a lot of paperwork in protocols and this demonstrated trade wars between—Kenya Vs Uganda-Kenya Vs Tanzania and Uganda Vs Rwanda. 

“We have not integrated Congo, but we are now working on Somalia,” Mr Dan Wandera-Ogalo, a member of the first East African Legislative Assembly, said, adding, “Why don’t we first work on what we have on our plates before adding more members?”     

So far, targets such as East African Customs Union, the single currency due in 2024, and the East African Central Bank, remain on paper. 

“Countries ignore most of the protocols and they only apply them when it fits them. There are no clear penalties for countries that violate them but then you hear that more members are being added to the Community,” Mr Wandera-Ogalo said.    

The business community, however, doesn’t agree that the expansion is being hurried. 

“I think we need more integration and quickly for trade to happen smoothly. You need to work under the same rules and frameworks.  If I want to go to Congo now, I need a Visa and there are many taxes but once we integrate, such barriers are removed.  I argue that we need Somalia quickly in the East African Community,” Mr Asiimwe said.