PRETORIA– South Africa and Uganda have signed a collaboration agreement to put in place various measures to boost and diversify bilateral trade, promote inclusive growth and create jobs.

The agreement which was signed here Tuesday by the Uganda Industrial Research Institution (UIRI) and the Centre for Scientific and Industrial Research (CSIR) of South Africa will see the two countries co-operating in an agro-sector project on essential oils.

The project, which has already been piloted in Uganda, will lead to the establishment of the Essential Oil Out Grower Farmers Programme which will see university students being attached to the project to enhance local content creation and human capital development skills.

The two countries are committing about two million Rand (about 167,000 US dollars) each towards this project.

South Africa and landlocked Uganda will also work on projects in the areas of agro-processing, minerals, pharmaceuticals, textiles, footwear and chemicals. These will be led by South Africa’s Industrial Development Corporation (IDC) and Uganda Development Cooperation and the Uganda Development Bank Limited.

The agreement will see the agencies continually engaging on the prospects of lines of credit given to the common projects.

Collaboration between the two countries will see the reviewing of laws around retail distribution value chains, which will be inclusive of shelf life standards.

At present, the Uganda National Bureau of Standards requires South African retailers trading in dairy products to have a 75 per cent remaining period of shelf life on the products by the time the products are placed on supermarket shelves. This escalates the costs of trade and often leads to losses, as there are often delays in transportation.

There will also be collaboration in the areas of small and medium enterprises (SMEs) incubation, skills development and best practice exchanges. South Africa wants to learn from Uganda in this area, as the Ugandan economy has its foundations in the small enterprise economy.

Uganda’s exports are predominantly produced by SMEs, with about 60 per cent of products traded in the East Africa region produced by that country.

The two countries also agreed Tuesday to negotiate a co-operation agreement on investment at the end of a two-day Joint Trade Committee (JTC) here. The JTC was set up in 2015 to strengthen bilateral economic relations between the two countries.

The session was co-chaired by Trade and Industry Deputy Minister Gratitude Magwanishe and his Ugandan counterpart Amelia Kyambadde.

Magwanishe said the JTC explored new trade, investment and technical cooperation opportunities, as well as removing obstacles to equitable trade. It remains critical to improve trade conditions, despite low demand for commodities, the effects of drought and protectionism.

Trade imbalance between the two countries, volatile markets and the need for export promotion are changes which demand a positive response, said Magwanishe.

The Ugandan delegation called for a flexible market environment to try even the trade imbalance, which is in favour of South Africa. Ugandan companies have had little success in penetrating the South African market due to inadequate phytosanitary standards, high visa fees and lack of import codes.

Many South African companies already have a footprint in Uganda. However, Ugandan companies are minimal. As such, we seek improved trade and preferential access to the SA market, Kyambadde said.

She urged institutions to devise additional mechanisms to further promote equitable trade for the benefit of the people, while calling on both governments to be more active in implementing the mutual projects.

A joint working group will be formed in order to implement, monitor and evaluate the commitments from the JTC which will hold its next meeting in 2019.