Uganda-South Africa summit kicks off, showcases lucrative investment opportunities

The Uganda-South Africa Summit kicked off Tuesday, with great enthusiasm at the Speke Resort in Munyonyo. 

The summit, which aims to foster stronger economic ties between the two nations, brought together key figures from the private sector, government representatives, and business regulatory agencies.

Morison Rwakakamba, the chairperson of the Uganda Investment Authority (UIA), highlighted the vast investment opportunities that Uganda has to offer, with a particular focus on agriculture, mining, and information communication technology (ICT) sectors.

Rwakakamba emphasized the appeal of investing in Uganda due to its stable political and economic environment, which promises significant benefits to investors. 

He noted that agriculture, in particular, presents a substantial opportunity for investment, with impressive returns.

“In the agricultural sector, the potential for investment is vast. studies reveal that key export crops such as coffee, cotton, cocoa, maize, banana, and more have average earnings before interest and tax ranging from 33% to 35%. Furthermore, a hectare of coffee plantation can yield approximately 3.4 metric tonnes, presenting a significant processing opportunity valued at about $1.87b annually,” he said.

Rwakakamba said the estimated payback period for these investments is approximately 5 years, with the potential to generate as much as $2.64b per year.

He said Fish cage farming in Lake Victoria and Lake Albert could potentially produce 18.3 million metric tonnes valued at approximately $31.8m, along with an import substitution benefit of $112.8m per year.

Other lucrative areas he pointed out include milk, maize, cassava, poultry, and rice whose combined yields is estimated at about $45.5m, adding that cocoa, sesame, soya beans, and beans offer substantial processing potential, attracting investors to explore these lucrative farming areas.

Rwakakamba also highlighted the tremendous potential in the ICT sector, advocating for the establishment of an ICT park, incubation center, business process outsourcing center, innovation center, and other related services. With an average return on investment exceeding 30%, this sector, he said, promises substantial rewards for investors.

He also stressed that Uganda possesses abundant natural resources, including over 300 million metric tons of iron ore, 221 metric tons of gold, and significant reserves of copper, cobalt, and nickel.

“The untapped value of these resources presents a compelling investment proposition, with the potential to contribute significantly to the nation's economy,” he said.

He pointed out that Uganda offers a competitive tax and non-tax incentive regime, including a 10-year tax holiday for certain investors, import duty exemptions on plant and machinery, and various allowances for training, research and development, and exploration costs.

It should be noted that the summit coincides with the Bank of Uganda's report showing a steady growth in Uganda's exports to South Africa over the past decade.

However, South Africa's exports to Uganda have decreased during the same period. 

The trade summit seeks to address this imbalance and foster a more robust exchange of ideas among private sector players, government representatives, and business regulatory agencies.

The summit aimed to strengthen economic ties between the two nations. Uganda has seen the value of its exports to South Africa steadily grow, doubling to $21.24 million over the past decade. 

Conversely, South Africa's exports to Uganda decreased from $251.6 million to $127.6 million during the same period. Key exports from Uganda to South Africa include cotton, gold, fish fillets, tobacco, coffee, and fresh flowers.

South Africa's exports to Uganda include machinery, vehicles, plastics, chemicals, electronics, parts and accessories, petroleum, live animals, books and newsprint, textiles, footwear, aircraft, and household goods.

The summit also provided a platform for a robust exchange of ideas and initiatives to enhance trade and investment cooperation between Uganda and South Africa, fostering economic growth and prosperity for both nations.

Humphrey Nzeyi, Chairman of the Private Sector Foundation, emphasized the long history of collaboration between Uganda and South Africa, both politically and economically.

He recalled the shared struggle for freedom from colonial and apartheid regimes, emphasizing their Pan African outlook.

He noted that today, there are already over 70 South African companies operating in Uganda, with a collective investment of over $2.4b in the Ugandan economy, as a result of unity and shared values between Uganda and South Africa.

He reiterated that both nations had successfully transitioned from political collaboration to forging robust economic partnerships.

"Uganda already boasts a large number of South African companies, ranging from MTN, our sponsor today, to ABSA, ESKOM, and many more. These companies have not only invested significantly but are also reaping substantial dividends from their endeavors in Uganda," he proudly stated.

Nzeyi expressed gratitude on behalf of Uganda's thriving private sector to both governments for their unwavering dedication to strengthening bilateral relations. 

He also acknowledged the invaluable support provided by Uganda's High Commission in Pretoria and the South African High Commission in Uganda.

Ebenezer Twum Asante, MTN Group Senior Vice President, reiterated MTN's commitment to Uganda's development and growth.

He said MTN will invest over $1trillion in infrastructure development in the next three years to reach 90% of Ugandans.

Asante highlighted Uganda's low inflation rate and strong currency performance, underscoring the country's economic potential.

“Today, as we come together under the banner of trade and investment, it's heartening to see the collaborative efforts of various stakeholders. We remain convinced about the buoyancy of the Ugandan economy which is one where inflation is relatively low and the currency is amongst the highest performers,” he said.

Lulama Xingwana, South African High Commissioner to Uganda, encouraged Ugandan businesspeople to explore opportunities in South Africa, assuring them of the embassy's support in obtaining visas.

She emphasized the importance of strengthening bilateral relations, particularly in the face of global challenges such as the COVID-19 pandemic and climate change.

Thoko Didiza, Minister of Agriculture, Land Reform, and Rural Development in South Africa, emphasized the need to build resilient economies and food systems in the post-pandemic era.

She highlighted the importance of policies that account for the challenges posed by climate change and the potential for increased trade within the African Continental Free Trade Area (AfCFTA).

Paul Amoru, Ambassador of Uganda to South Africa, announced that the Uganda-South Africa summit will become an annual event, with the goal of further enhancing bilateral relations and encouraging Ugandan businesses to invest formally in South Africa.

The Uganda-South Africa summit is poised to create a robust platform for collaboration and investment, strengthening the economic ties between these two vibrant African nations.