SA, Uganda push cooperation to improve trade

Tuesday, January 30, 2018

South Africa and Uganda have put in place various measures to boost and diversify trade, promote inclusive growth and create jobs.

The two countries on Tuesday signed a collaboration agreement between the Uganda Industrial Research Institution (UIRI) and the Centre for Scientific and Industrial Research (CSIR). The agreement will see Uganda and South Africa cooperating in an agro sector project on essential oils.

The project, which has already been piloted in Uganda, will see the establishment of the Essential Oil Out Grower Farmers Programme. This project will see university students being attached to this project to enhance local content creation and human capital development skills.

The two countries are committing about R2 million each towards this project.

South Africa and the landlocked East African country will also work on projects based on MoUs in the areas of agro-processing, minerals, pharmaceuticals, textiles, footwear and chemicals.

These will be led by South Africa’s Industrial Development Corporation (IDC) and Uganda Development Cooperation and the Uganda Development Bank Limited.

The agreement will see the agencies continually engaging on the prospects of lines of credit given to the common projects.

Creating conducive conditions for improved trade

Collaboration between the two countries will see the reviewing of laws around retail distribution value chains, which will be inclusive of shelf life standards.

As things stand, the Uganda National Bureau of Standards requires South African retailers trading in dairy products to have a 75% remaining period of shelf life on the products by the time the products are placed on supermarket shelves. This affects the traders because it escalates the costs of trade and often leads to loses, as there are often delays in transportation.

There will also be collaboration in the areas of small and medium enterprises incubation, skills development and best practice exchanges. South Africa wants to learn from Uganda in this area, as the Ugandan economy has its foundations in the small enterprise economy.

Uganda’s exports are predominantly produced by small scale enterprises, with about 60% of products traded in the East Africa region produced by that country.

Furthermore, the two countries agreed to negotiate a cooperation agreement on investment.

SA-Uganda JTC

South Africa and Uganda on Tuesday concluded in a two-day Joint Trade Committee (JTC), which was held in Tshwane.

 The JTC was set up in 2015 to strengthen bilateral economic relations between the two countries.

The session was co-chaired by Trade and Industry Deputy Minister Gratitude Magwanishe and Ugandan counterpart Amelia Kyambadde.

Deputy Minister Magwanishe said the JTC explored new trade, investment and technical cooperation opportunities, as well as removing obstacles to equitable trade.

He said improving trade conditions remains critical, despite low demand for commodities, drought and protectionism.

“Trade imbalance between the two countries, volatile markets and the need for export promotion are changes which only demand a positive response,” said Deputy Minister Magwanishe.

The Ugandan delegation called for a flexible market environment to try even the trade imbalance, which is in favour of South Africa.  

Ugandan companies have had little success in penetrating the South African market due to inadequate phytosanitary standards, high visa fees and lack of import codes.

“Many South African companies already have a footprint in Uganda. However, Ugandan companies are minimal. As such, we seek improved trade and preferential access to the SA market,” Kyambadde said.

She urged institutions to devise additional mechanisms to further promote equitable trade for the benefit of the people, while calling on both governments to be more active in implementing the mutual projects.

A joint working group will be formed in order to implement, monitor and evaluate the commitments from the JTC.  

The next JTC will be held in 2019. – SAnews.gov.za

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