Uganda, South Sudan: Sign MoU to Cut Trade Barriers

• Uganda and South Sudan signed a Memorandum of Understanding to reduce trade barriers and foster economic cooperation.
• Joint technical committees will be established to oversee the implementation of the MoU and address specific challenges.
• Uganda highlighted issues like South Sudan's electronic permit system and the need for coordinated border facilities at Nimule.
• South Sudan has eased visa payment obstacles, but alien registration requirements for stays longer than three days and work permits are still mandatory.
• The agreement aims to address the significant trade imbalance, with Uganda currently exporting $524 million to South Sudan compared to South Sudan's $22 million to Uganda.

The success of the newly signed memorandum will hinge not merely on the signing ceremony itself, but on its practical outcomes, as emphasized by Minister Bahati.

Uganda and South Sudan have formally committed to enhancing cross-border commerce by signing a memorandum of understanding (MoU) aimed at dismantling existing trade impediments. This significant agreement, inked on Wednesday in Kampala, seeks to mitigate high costs, delays, and other obstacles that have historically hampered trade relations between the two nations. The signing ceremony took place at the Mestil Hotel during the second Uganda-South Sudan Business Forum and Exhibition, an event themed "Easing the Cost of Doing Business and Unlocking Regional Market Opportunities for Uganda and South Sudan."

The MoU was officially signed by Uganda's Minister of State for Industry, David Bahati, and South Sudan's Minister of Trade and Industry, Dr. Labanya Margaret Mathya. Its provisions encompass a broad spectrum of cooperation, including trade promotion, the exchange of vital information, the facilitation of investment opportunities, and the diligent monitoring of commitments made by both governments. A central pillar of this new accord is the establishment of joint technical committees, tasked with overseeing the MoU's implementation and ensuring that the pledges made during the forum translate into tangible actions.

Despite the collaborative spirit, the current trade landscape between Uganda and South Sudan remains significantly imbalanced, with Uganda holding a substantial advantage. Uganda's exports to South Sudan amount to $524 million, while South Sudan's exports to Uganda are a mere $22 million. Minister Bahati attributed this disparity, in part, to the differing population sizes, citing Uganda's 46 million residents compared to South Sudan's 12.4 million. He also highlighted persistent challenges reported by Ugandan traders and transporters, including delays associated with South Sudan's electronic permit system, repeated cargo verification processes, numerous checkpoints, unauthorized charges, and inconsistent clearance procedures along the crucial Kampala-Gulu-Nimule-Juba corridor.

In response to these operational hurdles, Bahati urged an immediate review of the electronic permit system to enhance transparency, eliminate redundant assessments and payments, clarify applicable fees, and establish effective mechanisms for dispute resolution. He also pointed out that the one-stop border post constructed by Uganda at Elegu cannot achieve its full potential without corresponding facilities and coordinated operations at Nimule, on the South Sudanese side of the border. Meanwhile, Dr. Labanya Margaret Mathya confirmed that a high-level committee, established by President Salva Kiir and on which she serves, is actively working to reduce non-tariff barriers affecting trade. She further announced the removal of obstacles related to visa payments, though alien registration requirements for stays longer than three days remain in force. Foreign nationals working in South Sudan are still obligated to obtain work permits.

The success of the newly signed memorandum will hinge not merely on the signing ceremony itself, but on its practical outcomes, as emphasized by Minister Bahati. He articulated that the true measure of the MoU's effectiveness would be the number of trade barriers removed, the investments realized, new businesses established, and jobs created. Brigadier General Ronnie Balya, Uganda's Ambassador to South Sudan, underscored the role of the joint technical committees in ensuring the implementation of commitments, supported by a joint communiqué, a roadmap detailing timelines and measurable outcomes for resolving border-related challenges, and regular review meetings.

This agreement is envisioned as a practical framework for ongoing consultations and structured engagements, enabling both governments to agree upon and implement their shared commitments. Beyond immediate barrier reduction, Bahati advocated for a strategic shift towards prioritizing trade in locally produced goods over the re-export of imported products. He also called for enhanced cooperation in key sectors such as steel production, noting Uganda's annual expenditure of approximately $1 billion on steel imports, despite both countries possessing significant iron ore deposits. Dr. Labanya reiterated South Sudan's view of Uganda as a priority trading partner and a vital source of goods for its market, signaling a mutual desire for deeper economic integration and a more balanced trade relationship.

Lawyers and compliance officers advising businesses engaged in Uganda-South Sudan cross-border trade should monitor the progress of the newly established joint technical committees. These committees are tasked with addressing specific trade barriers, including the South Sudan electronic permit system and customs procedures, which could lead to significant changes in compliance requirements and operational costs for clients. The reported abolition of alien registration requirements and easing of visa payment obstacles (though work permits are still required) represents a direct change to be communicated to foreign national employees or investors.

Source: Original reporting via independent news sources.