Tanzanian, Ugandan businesses discuss ways to boost trade, investment

Dar es Salaam. For Tanzania and Uganda's trade and investment relations to thrive, some pertinent issues that affect businesses between the two countries have to be addressed, a business forum heard on May 24, 2024.

The second Uganda-Tanzania Business Forum forum held in Dar es Salaam was, itself, part of the efforts to boost trade relations between the two sisterly countries.

The two-day event, themed “Enhancing Our Win-Win Bilateral Relationship,” saw stakeholders discussing critical issues hindering trade and proposing actionable solutions.

Tanzania’s Prime Minister, Kassim Majaliwa, officiated the event, underscoring the importance of addressing barriers to foster a more conducive business environment.

“We have already started to address these challenges on our part to allow investors and businesspeople from abroad to enter and conduct business in the country,” he noted.

He further added that he believed that the forum resolutions would lead to significant commercial revolutions between the two countries.

The forum highlighted that Tanzania and Uganda have the highest number of unresolved non-tariff barriers (NTBs) within the East African Community (EAC), which significantly impede trade.

These NTBs manifest as import quotas, subsidies, customs delays, and technical barriers.

According to the EAC Regional Meeting Committee report of 2023, the direct costs of NTBs in the EAC are estimated at $16.7 million, with the total trade impact being $94.9 million, resulting in a 58 percent reduction in trade.

The Chief Executive Officer of the Tanzania Private Sector Foundation (TPSF), Mr Raphael Maganga, pointed out the high cost of flying within the region as a major impediment.

“Airfares are double the cost of those in Europe and Asia. This disparity is largely due to the high taxes and levies imposed on the aviation sector, with average airport taxes in the EAC being $67 compared to $38 at Heathrow,” Mr Maganga noted.

He called for the opening of regional skies to make air travel more affordable, thereby facilitating the movement of people and goods in line with the EAC treaty.

For trade volumes to increase, Mr Maganga stressed the need for investment in manufacturing and value addition, particularly in the agriculture and mining sectors.

“Modernising agriculture and boosting industrial productivity are crucial. Tanzania’s manufacturing sector has grown in terms of the size and quality of goods manufactured locally,” he stated.

A significant point of discussion was the operationalization of the Mutukula One-Stop Border Post (OSBP).

Participants suggested transforming it into a “No stop border post” to expedite the movement of goods.

“We still call for harmonised calibration procedures for road tankers. As the private sector, we request our counterparts from Uganda to waive the requirement for recalibration while we wait for the EAC procedures,” Mr Maganga urged.

The forum emphasised the pivotal role of Small and Medium Enterprises (SMEs) in driving trade expansion within the EAC.

SMEs often lack adequate knowledge of trading prerequisites, and the forum underscored the necessity of equipping them to seize available opportunities.

“Private sector foundations and other business facilitation agencies have a crucial role to play in this regard. They should ensure that SMEs in Tanzania and Uganda are well-equipped to take advantage of the opportunities available within the EAC,” Mr Maganga highlighted.

Despite balanced trade volumes between the two countries, the figures remain low compared to their potential.

In 2023, Tanzania and Uganda traded approximately $400 million, with Tanzania exporting goods worth $192 million to Uganda.

The Vice Chairperson of the Private Sector Foundation Uganda, Ms Sarah Kagingo, expressed optimism that the forum would address existing challenges and bolster investment.

“It is through this forum that all these challenges and others will be addressed by the governments of our two countries, so that together we can increase investment between us,” she said.

Uganda’s Minister of State for Foreign Affairs in charge of Regional Affairs, Mr John Mulimba, underscored the strategic partnership between Tanzania and Uganda in various sectors such as trade, security, education, agriculture, and energy.

“This forum must consider multisectoral opportunities, obstacles, and challenges to doing business together. It is a promotional event to attract foreign direct investment, mobilise diaspora investment, and promote trade in locally produced products,” Mr Mulimba stated.

Mulimba highlighted the forum’s role in strengthening historic ties and exploring new avenues for collaboration.

“I am confident that if we openly discuss the opportunities and resolve these constraints, we will further enhance our mutual understanding, deepen our bilateral cooperation, enhance trade and investment, and promote common prosperity,” he said.

He said by the end of the forum, the collective resolve to tackle existing challenges and harness the potential of Tanzania-Uganda trade relations will be palpable.