South African Companies Flourish in Uganda

kampala
Downtown Kampala

When you drive through Kampala’s shopping district, you can’t help, but notice a number of new investments under construction. There is Shoprite and Game supermarkets, mtn, stanbic bank, among a few.

A common thing about these businesses is that they are South Africa based. They go a long way in demonstrating the good business bi-lateral relations between the countries. South Africa is one of the fastest growing sources of foreign direct investment into Uganda.

The investments are in the areas of telecommunications (MTN Uganda), breweries (SAB Millers), finance (Stanbic Bank), wholesale and retail (Shoprite checkers, Metro Cash and Carry, Woolworths, Game), poultry (Bokomo), Sanlam Insurance, energy (Eskom) and many others.

Currently, South Africa’s investment on the continent is vast. Movement of capital from South Africa has impacted a number of African businesses. South African companies can access financing from South African banks and have experience in working with different cultures because of their diverse population.

After the barriers to investment came down in the early 1990s, businesses moved quickly with encouragement from the SA government to take advantage of the market opportunities on the continent.

Trade relations between the two countries continue to grow, even though there is an imbalance in South Africa’s favour.

Uganda’s exports to South Africa include cotton, gold, fish fillets, and tobacco, coffee and fresh flowers. South Africa’s exports include machinery, motorcars, plastics, chemicals and electronics, parts and accessories, petroleum, live animals, books and news print, textiles, footwear, vehicles, aircrafts and household goods. SA could strengthen links in a number of areas including information technology, health services, agro-processing, biotechnology and chemicals.

A solid framework for co-operation exists between the two countries. South Africa and Uganda concluded a Convention on the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income in 1997. In May 2000 they signed an agreement on the promotion and protection of investments.

In 2002, South Africa and Uganda signed a Bi-Lateral Trade agreement. The two countries are in the final stages of concluding an agreement establishing a joint Commission on Cooperation. It will enhance cooperation in areas like defence, trade, investment, foreign relations, health, agriculture and education.

Politically, SA and Uganda have also enjoyed good relations, the state visits by President Yoweri Museveni and former president Nelson Mandela and various working visits by presidents Mbeki and Jacob Zuma have strengthened bi-lateral relations and inspired confidence in the business community.

On the education front, we have seen a number of Ugandans go to South Africa in pursuit of higher education. A lot of SA universities also have Ugandans pursuing, undergraduate programmes. When he became president, Nelson Mandela adopted both Dutch songs and African songs as national anthems from 1995 until they were merged in 1997.