East Africa's Trade Boost: Uganda, South Sudan Forge Ahead with Key MOU

Uganda and South Sudan have formally signed a memorandum of understanding (MoU) on trade, aimed at enhancing cross-border commerce by addressing pervasive issues such as delays, high costs, and other trade barriers. The agreement was concluded during the second Uganda-South Sudan Business Forum and Exhibition, held in Kampala under the theme, "Easing the Cost of Doing Business and Unlocking Regional Market Opportunities for Uganda and South Sudan." The MoU was signed by Uganda's Minister of State for Industry, David Bahati, and South Sudan's Minister of Trade and Industry, Dr Labanya Margaret Mathya, covering crucial areas like trade promotion, information exchange, investment facilitation, and the monitoring of governmental commitments.

To ensure the effective implementation of the MoU and the resolutions from the forum, officials pledged to establish joint technical committees. Uganda's Ambassador to South Sudan, Brigadier General Ronnie Balya, stated that these committees would be supported by a joint communiqué, a detailed roadmap with timelines and measurable outcomes for resolving border-related challenges, and regular review meetings. Minister Bahati emphasized that the success of the MoU should be measured by its tangible results, such as the removal of trade barriers, realization of investments, establishment of new businesses, and job creation, rather than merely the signing ceremony itself. He stressed the need for a practical framework for continuous consultations and structured engagements between the two governments.

Despite the collaborative spirit, Bahati highlighted a significant trade imbalance, with Uganda exporting goods worth $524 million to South Sudan, while South Sudan's exports to Uganda amounted to only $22 million. He underscored Uganda's need for South Sudan, attributing part of this disparity to population differences (Uganda: 46 million, South Sudan: 12.4 million). Ugandan traders and transporters frequently report issues including delays with South Sudan's electronic permit system, repeated cargo verification, multiple checkpoints, unofficial charges, and inconsistent clearance procedures along the Kampala-Gulu-Nimule-Juba corridor. Bahati urged an urgent review of the electronic permit system to improve transparency, eliminate duplicate assessments and payments, clarify applicable charges, and establish dispute resolution mechanisms. He also noted that the full benefits of Uganda's one-stop border post at Elegu could only be realized with corresponding facilities and coordinated operations at Nimule on the South Sudanese side. Furthermore, he called for both countries to prioritize local production over the re-export of imported goods and encouraged cooperation in steel production, citing Uganda's annual $1 billion steel import bill and the substantial iron ore deposits in both nations.

Dr Labanya Margaret Mathya expressed gratitude for Uganda's hospitality, recognizing it as a priority trading partner and a major source of goods for South Sudan. She informed attendees that a high-level committee, established by President Salva Kiir and on which she serves, is actively working to reduce non-tariff barriers. Key achievements include the abolition of alien registration requirements and the removal of obstacles related to visa payments, though foreign nationals working in South Sudan are still required to obtain work permits. These assurances came amidst prior concerns from Ugandan traders about a potential restriction on foreign nationals in South Sudan's retail trade, which the government in Juba had disowned. Labanya also addressed security concerns, affirming Juba's accessibility through fully occupied flights and buses, and highlighted the widespread presence of Ugandan chapati makers and products in Juba's Konyokonyo Market as evidence of strong economic ties. She reiterated President Kiir's commitment to maintaining robust trade relations and welcomed all investors.

However, South Sudan's Ambassador to Uganda, Paul Malong Akaro, defended their electronic permit system, asserting that its joint introduction with the Uganda Revenue Authority last year had improved revenue collection and border clearance. He urged the revenue authorities of both countries to utilize existing mechanisms to resolve system-related concerns. Akaro also outlined challenges faced by South Sudanese traders, such as difficulties in directly accessing Ugandan manufacturers and distributors, and concerns about the apparent dominance of Juba-based transporters from other neighboring countries in supplying Ugandan goods. He called upon the Uganda National Bureau of Standards and the South Sudan Bureau of Standards to address the issues encountered by South Sudanese exporters of dried fish transiting Uganda en route to the Democratic Republic of the Congo, while affirming that "South Sudan remains open for business."

Closing the forum, Uganda's Minister of State for Foreign Affairs in charge of Regional Cooperation, Haruna Kasolo Kyeyune, echoed the sentiment that the MoU's value hinges on its implementation. He urged ministries and government agencies in both countries to enhance coordination, establish clear follow-up mechanisms, and maintain private-sector involvement. Kasolo also stressed the importance of commitments under the East African Community (EAC) and the Common Market for Eastern and Southern Africa (COMESA) for addressing trade barriers and promoting regional integration. Ambassador Balya noted that the forum offered an opportunity to assess progress in bilateral trade relations. Previously, ambitious trade targets were set, with Uganda announcing plans in 2022 to increase bilateral trade from $400 million to $1 billion. Current estimates from Uganda's Ministry of Finance place annual exports to South Sudan at approximately $500 million, while UN figures indicate South Sudan exported goods worth about $21.5 million to Uganda in 2025. Balya clarified that the proposed committees and implementation roadmap are part of broader efforts to strengthen bilateral cooperation following a meeting between Presidents Yoweri Museveni and Salva Kiir, where they called for joint border meetings to address trade, security, and immigration. An upcoming Joint Permanent Commission meeting is expected to further these efforts. The latest agreement, building on South Sudan's independence in 2011 and its EAC membership in 2016, along with both countries' membership in IGAD, aims to bolster bilateral trade and investment, with its ultimate success tied to the effective implementation of measures designed to reduce trade barriers, improve border operations, and foster a more predictable business environment for all traders.