Uganda, South Sudan Sign Trade MoU to Ease Cross-Border Barriers

• Uganda and South Sudan signed a Memorandum of Understanding on trade in Kampala to ease business costs and unlock market opportunities.
• Joint technical committees will be established to oversee the MoU's implementation and resolve delays and costs for traders.
• Ugandan officials highlighted issues like South Sudan's electronic permit system, multiple checkpoints, and a significant trade imbalance.
• South Sudan's Caretaker Minister confirmed efforts to reduce non-tariff barriers, including abolishing alien registration and easing visa processes.
• The agreement aims to promote trade, facilitate investment, and foster cooperation on local production, such as steel.

The success of this agreement, according to Ugandan Minister David Bahati, will ultimately be measured not by its signing, but by the tangible resolution of trade barriers, the realization of new investments, the establishment of businesses, and the creation of employment opportunities.

Officials from Uganda and South Sudan have formalized a significant trade agreement, signing a Memorandum of Understanding (MoU) aimed at enhancing commercial ties and streamlining cross-border operations. The accord was inked in Kampala, Uganda, 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." This Uganda South Sudan trade MoU encompasses crucial areas such as trade promotion, information exchange, investment facilitation, and a commitment to follow up on agreed actions.

The signing ceremony saw Uganda's Minister of State for Industry, David Bahati, and South Sudan's Caretaker Minister of Trade and Industry, Dr. Labanya Margaret Mathya, affix their signatures. A key component of the agreement involves the establishment of joint technical committees. These committees are tasked with overseeing the MoU's implementation and proactively addressing the delays and financial burdens currently faced by traders operating between the two nations. Uganda's Ambassador to South Sudan, Brigadier General Ronnie Balya, underscored the importance of these committees in preventing any post-signing complacency, noting they would be supported by a joint communique, a detailed roadmap with timelines for resolving border issues, and regular review meetings to ensure progress.

Despite the strong economic links, significant Uganda South Sudan non-tariff barriers continue to impede the flow of goods and services. Minister Bahati highlighted several critical issues affecting traders along the vital Kampala-Gulu-Nimule-Juba corridor. These include persistent delays attributed to South Sudan's electronic permit system, instances of repeated cargo verification, the presence of multiple checkpoints, the imposition of unofficial charges, and inconsistent clearance procedures. The cumulative effect of these challenges significantly increases the cost and complexity of the Nimule Elegu border trade.

Bahati specifically called for an urgent review of the electronic permit system to enhance transparency, eliminate redundant assessments and payments, clarify existing charges, and establish a clear mechanism for dispute resolution. He also pointed out that the full benefits of the one-stop border post constructed by Uganda at Elegu remain unrealized without corresponding facilities and coordinated operational procedures at Nimule, on the South Sudanese side. Furthermore, Bahati drew attention to the substantial trade imbalance, with Uganda exporting goods worth $524 million to South Sudan, while South Sudan's exports to Uganda amount to only $22 million. He attributed part of this disparity to population differences, citing Uganda's 46 million people compared to South Sudan's 12.4 million.

Responding to these concerns, South Sudan's Caretaker Minister of Trade and Industry, Dr. Labanya Margaret Mathya, expressed gratitude for Uganda's hospitality and reaffirmed Uganda's status as a priority trading partner and a primary source of goods for her country. Dr. Labanya, an alumna of Makerere University, informed delegates about a high-level committee established by President Salva Kiir, on which she serves, specifically mandated to reduce non-tariff barriers. She cited concrete steps already taken, including the abolition of alien registration and the removal of hurdles associated with visa payments, though work permits for foreigners in South Sudan are still required.

These assurances from Dr. Labanya followed earlier concerns among Ugandan traders regarding a disowned threat to exclude foreigners from the retail sector in Juba. While acknowledging security challenges in some areas of South Sudan, she emphasized the safety of the capital, Juba, evidenced by full flights and buses into the city. Dr. Labanya highlighted the deep economic integration between the two nations, referencing the presence of Ugandan chapati makers across South Sudan and the Konyokonyo market in Juba, renowned for its Ugandan goods. She concluded by extending a warm welcome to all types of investors, underscoring President Kiir's unwavering commitment to fostering continued trade.

Beyond addressing immediate trade friction, the MoU also signals a broader strategic vision for economic cooperation. Minister Bahati advocated for both countries to prioritize the trade of goods they produce domestically, rather than re-exporting imports. He specifically proposed collaboration on steel production, noting Uganda's annual expenditure of approximately $1 billion on steel imports and the significant iron ore deposits present in both nations. This focus on local production and joint industrial ventures represents a key area for future Uganda South Sudan investment facilitation.

The agreement is designed to provide a practical framework for regular consultations and a systematic forum for formalizing commitments between the two governments. The success of this agreement, according to Ugandan Minister David Bahati, will ultimately be measured not by its signing, but by the tangible resolution of trade barriers, the realization of new investments, the establishment of businesses, and the creation of employment opportunities. Lawyers advising businesses engaged in cross-border trade or investment between Uganda and South Sudan should closely monitor the implementation of this MoU, anticipating potential changes in customs procedures, electronic permit requirements, and border operations, which could reduce compliance burdens and operational costs for clients, and advise on new investment opportunities as trade barriers are addressed.

Lawyers advising businesses engaged in cross-border trade or investment between Uganda and South Sudan should closely monitor the implementation of this MoU. Anticipate potential changes in customs procedures, electronic permit requirements, and border operations, which could reduce compliance burdens and operational costs for clients, and advise on new investment opportunities as trade barriers are addressed.

Source: Original reporting via local media reports