Uganda and South African governments have enjoyed a momentous, warm and friendly
relations since the signing of a formal diplomatic relation in 1994. This bilateral relation has
deepened not only social and political ties but also helped promote trade and investment
between the two countries.
Latest data from the Bank of Uganda shows that the East African nation and South Africa’s
trade volumes increased from merely US $76million in 1999 to US $334million in 2019 before
slowing down to US $148.8million in 2022 owing to the effects of coronavirus pandemic.
However, most of these trade volumes are in favour of South Africa because it exports mostly
high-value products such as machinery, vehicles, plastics, chemicals, electronics, parts and
accessories, petroleum, live animals, books and newsprint, textiles, footwear, aircraft, and
household goods.
On the other hand, Uganda exports low-value products such as cotton, gold, fish fillets, tobacco,
coffee, and fresh flowers.
It is on this basis that Uganda and South African governments have organized for a second leg
of trade and investment summit to be held in Kampala next month to actualize deals and
initiatives that started during the first summit held in Pretoria, South Africa, in February this year.
The first summit registered numerous successes for the two countries including signing three
agreements in the areas of promotion and protection of investments, bilateral trade, and the
establishment of a Joint Permanent Commission.
Some local entrepreneurs like Andrew Mukiibi, have since set up businesses in South Africa to
import Ugandan products. Mukiibi has established Federal Foods Company in South Africa and
awarded a permit to import 700,000 tonnes of pineapple and 1.5 million tonnes of avocado from
Uganda following the inaugural summit. He has also been granted permission to export South
African products including apples to Uganda.
We are looking forward to more Ugandan entrepreneurs such as Mukiibi producing and
exporting products to the South African market, and thus help minimize trade imbalance, boost
trade and investment and improve the livelihood of our people.
However, we shall be happier to see more South African businesses invest here in agri and
agro-processing, ICT, energy, tourism, electronics, infrastructure, pharmaceutical and mineral
value addition to boost production, backward and forward linkages and foreign exchange.
Now employing approximately 72% of the population and contributing about 32% to the Gross
Domestic Product, Uganda’s agricultural productivity remains low due to reliance on natural
weather conditions and the widespread of traditional methods and equipment. It is therefore a
sector that is thirsty for commercial farming in both crops and animal industries as well as
aquaculture, value addition (agro-industries, agro food industries), manufacturing of inputs such
as improved seeds, fertilizers and pesticides, cold storage facilities and logistics as well as farm
machinery manufacturing and assembly, irrigation and packaging.
Uganda’s ICT sector is also one of the most vibrant within the region and a fast-growing sector
in the economy, offering many opportunities. Growth in this sector is supported by solid legal
and regulatory frameworks. The country is connected to the three marine fibre optic cables off
Africa’s east coast in the Indian Ocean and is currently positioning itself as a hub for business
processing and management outsourcing in East Africa.
This implies huge opportunities for business process outsourcing and ICT services in numerous
sectors such as agriculture, health, tourism, banks, insurance and public administration.
Moreover, the East African nation has a large youthful population that is so much tech-savvy.
Looking at the mineral sub-sector, Uganda has large underexploited mineral deposits of gold,
oil, high-grade tin, wolfram, salt, beryllium, cobalt, kaolin, iron ore, glass sand, vermiculite,
phosphates (agricultural fertiliser), uranium, clay, gypsum and rare earth elements. There’s
therefore a huge investment opportunity in mining and mineral processing with special
incentives provided to the mining sector, including writing off capital expenditures in full.
Tourism is another sector that presents huge opportunities for South African companies,
especially in the construction of high-quality accommodation facilities, operating tour and travel
circuits (bicycle tours, air balloon travel, marine activities on Lake Victoria and river rafting on
the Nile River) and development of specialised eco and community tourism facilities. The tourist
arrivals in the country have been on the increase over the years signaling a huge growth
potential.
Furthermore, Uganda has a conducive environment to enable businesses to thrive, and this
explains the success of South African investments across the country in various sectors –
telecommunication, banking, insurance, beverages, energy and among others.
Thus, the second leg of the Uganda-South Africa trade and investment provides an opportunity
for trade and investment policy makers, key business communities, trade support institutions,
regional and multilateral organizations from Uganda and South Africa to once again network,
exchange experiences, eliminate all the non-tariff barriers, and explore win-win investment and
trade opportunities for the development of the two countries.