South Africa ready to increase volume of Ugandan imports – Ramaphosa

Pretoria- South African President Cyril Ramaphosa has expressed the country’s willingness to increasing the quantity and diversity of products they source from Uganda. 

Uganda is South Africa’s 15th-largest trading partner in Africa and the second largest in East Africa, according to South African government figures.

However, there’s a big trade imbalance tilting in favour of South Africa. For instance, the total value of Uganda’s exports to South Africa in 2021/22 was USD 27.34 million while the total value of its imports from the latter in the same period was USD 126.86 million according to Bank of Uganda statistics.

While hosting his Ugandan counterpart Yoweri Museveni at Union Buildings in Tshwane Pretoria on Tuesday, President Ramaphosa said when it comes to trade and investment linkages between the two countries, there is room for improvement.

He noted that the success of intra-Africa trade hinges on each of them sourcing from one another and prioritising “made and grown in Africa” products and services.

To do so, he said, the two countries need to focus on two aspects in particular: increasing the level of reciprocal investment and increasing the levels of trade.

Below is President Ramaphosa’s full speech

Thank you for the opportunity to address this inaugural South Africa-Uganda Business Forum.

It is my pleasure to welcome His Excellency President Museveni back to South Africa.

Earlier today we held productive discussions on how to re-invigorate and boost our trade and investment relations. We considered a number of challenges in the landscape but also opportunities.

This Business Forum is an opportunity for business exchanges and sectoral conversations that will enable us to intensify our efforts on several fronts.

It is particularly important that we inject vigour into the operationalisation of the African Continental Free Trade Area. I hope to see a strong showing from Ugandan and South African business at the inaugural AfCFTA Business Forum that will be hosted in Cape Town in a few months’ time.

When it comes to trade and investment linkages between South Africa and Uganda there is certainly room for improvement.

Last year, 2022, saw a decline in volumes of trade between our two countries compared to the preceding year.

In 2022, our two-way trade amounted to US$ 130 million, or just over R1.8 billion at the time.

We should aim to more than double this to at least R4 billion within the next five years.

South Africa is open to increasing the quantity and diversity of products we source from Uganda, because the success of intra-Africa trade hinges on each of us sourcing from one another and prioritising “made and grown in Africa” products and services.

To do so, we need to focus on two aspects in particular: increasing the level of reciprocal investment and increasing the levels of trade.

The confectionary industry is one example of opportunities for the creation of new value chains.

Building relationships between major South African food producers and Ugandan suppliers of inputs like vanilla, coffee and cocoa could provide a route to expanding into the broader consumer goods market.

Global food supply disruptions and changing climatic conditions have underscored the need for improved irrigation in farming.

South African irrigation equipment producers and services providers can assist to enable a more resilient Ugandan agricultural industry.

Uganda’s infrastructure-build programme offers opportunities for partnership, drawing on the expertise of South African firms to help achieve Uganda’s national objectives.

Uganda’s construction drive and increasing urbanisation offer substantial opportunities in the supply of electro-technical equipment by South African manufacturers.

I am hopeful, Mr President, that we will see an improvement in two-way sourcing of goods and services between our two countries.

Challenges at ports and the regulatory red tape that delays logistics and supply-chains will have to be addressed.

When it comes to investment, we share a common aspiration to see more South African companies in Uganda and more Ugandan companies in South Africa.

South African corporations such as ABSA, Stanbic, Multichoice, Eskom, Woolworths, MTN and the IDC all have a footprint in Uganda.

We are proud that they add tremendous value to the national economy and tax base.

It is a concern, however, that South Africa’s investments in Uganda have declined from 70 firms before the Covid-19 pandemic to 36 at present.

At the same time the appetite of South African firms to expand into East Africa is considerable.

To unlock the potential, and ensure that Uganda benefits from the outward investment drive, we will need to deepen our collaboration to address the challenges and concerns facing investors.

Like Uganda, South Africa has identified agriculture, infrastructure, mining, energy, transport and logistics and manufacturing as some of the key growth areas that will aid economic reconstruction and recovery.

We are therefore implementing structural reforms in key network industries such as electricity, ports, rail, telecommunications and water.

We are working to improve the business operating environment, including setting up a red tape reduction team in the Presidency to coordinate efforts to remove bureaucratic hurdles investors face.

Resolving South Africa’s debilitating electricity crisis is our foremost priority.

Our focus is on improving the availability of supply from existing coal-fired power stations; accelerating private investment in generation capacity; producing new capacity from renewables, gas and battery storage; incentivising investment in rooftop solar; and transforming the electricity sector to achieve long-term energy security.

One of the most far-reaching reforms we have implemented is removing the licensing requirements for self-generation and we now have more than 100 projects in the pipeline.

Our renewable energy programme is also forging ahead, with a number of new projects expected to enter construction soon.

The increasing effects of climate change on our countries make the decarbonisation of our respective economies all the more important.

Last year, South Africa released a Just Energy Transition Investment Plan that outlines the investments that will be required to meet our decarbonisation commitments.

Low-carbon, climate change resilient and sustainable development isn’t just about people and planet. It also makes sound business sense.

There are therefore numerous opportunities for Ugandan investors in South Africa’s clean energy and green economy space.

The Just Energy Transition must be a catalyst for development, job creation, beneficiation and localisation and business expansion for both countries.

The opportunities for both private and public investment in our respective countries is indeed immense.

I certainly forward to seeing Ugandan investors at the 5th South Africa Investment Conference in April this year.

In conclusion, I urge that throughout our interactions, we must promote the principles of mutual benefit and empowerment.

We must foster industrialisation in Africa and use African products and raw materials.

We must invest more in our people, particularly women and youth, and in rural enterprises.

We must work together to improve the conditions of Africa’s workers.

I look forward to a new era of trade, commerce and investment between South Africa and Uganda.

I thank you.

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