President Museveni’s 6th term: What does it mean for the regional business community?

It is a new dawn for Uganda and the regional economies after the much-celebrated inauguration of H.E. Yoweri Kaguta Museveni for the 6 th term on May 12, 2021.. We are also working for the political integration of East Africa together with our partners of Kenya, Tanzania, Rwanda and Burundi.. These political tensions have always hindered the smooth flow of business…

It is a new dawn for Uganda and the regional economies after the much-celebrated inauguration of H.E. Yoweri Kaguta Museveni for the 6th term on May 12, 2021.

The ceremony was attended by local and regional dignitaries – heads of states, ministers, heads of diplomatic missions and international organizational heads. H.E. Museveni in his speech gave highlights and assurance to the business community around the East African region, Africa and the world at large, stating that the National Resistance Movement (NRM), – the ruling party, stands for Pan-Africanism which translates into economic and political integration. Economic integration in this case refers to having a common market for products and freely doing business within the borders of the neighbours. This is an assurance that the Ugandan market specifically, is open for interested economies and individual business owners and investors.

He further stated, “We are very happy with the market of 130 million people of the East African Community. We are happy with the COMESA market of over 400 million people. We are also working for the political integration of East Africa together with our partners of Kenya, Tanzania, Rwanda and Burundi.

This points to a commitment towards ending the frequent occurrence of political tensions amongst the East African countries. These political tensions have always hindered the smooth flow of business within the East African nations, for instance, the Kenya-Tanzanian custom barriers at their border points that arose during the reign of the late Tanzanian President John Magufuli. Recently, H.E. Uhuru Kenyatta and H.E. Samia Hassan met in Nairobi on 4th May 2021 in order to solve these business hindering tensions.

Once a close ally of Kenya in the East African Community (EAC), Tanzania had distanced itself in recent years from the regional bloc under President Magufuli—a period of growing economic rivalry and accusations of unfair trade practices between the two countries.

Hassan, who became her country’s first female president in late March after Magufuli’s sudden death, was received by two ministers on her arrival in Nairobi before heading to the presidency.

“Your visit has given us an opportunity to renew our relationship,” Kenyan President Kenyatta said in a joint statement. He added that Kenya would work with Tanzania to ensure that unity between the two countries “continues to grow and is strengthened for the benefit of our people.”

The two leaders announced the signing of an agreement to transport liquefied petroleum gas from the Kenyan port of Mombasa to the Tanzanian economic capital Dar es Salaam. This is a key to the petroleum investors between these two countries since it will further ease doing petroleum business between Kenya and Tanzania.

Of the six nations that make up the EAC, Kenya is the largest investor in Tanzania and the fifth largest on the continent.

Dr. Magufuli, nicknamed the “Bulldozer”, had refused in 2016 to take part in several projects initiated by Nairobi, including a railway and a road linking different countries in the region.

A series of disputes followed in 2017 and 2018 when Tanzania burned alive over 11,000 chicks imported from Kenya.

The Covid-19 pandemic has provided further fuel for this animosity, with disagreements over border closures.

“We have agreed that our health ministers should draw up a programme to facilitate border crossings and controls,” said President Hassan, who is making her second foreign visit after Uganda. This visit, five years after Dr. Magufuli’s marks a new break from the style of her predecessor.

President Hassan’s visit to Kenya came barely weeks after she visited Uganda for the same mission of economic and political integration. We see an effort to having a peaceful East African economic environment as stated by H.E. President Museveni on his inaugural speech.

Uganda and Rwanda too have in the past years had border related challenges that resulted in both locking their border points. This political bad blood has affected the business communities amongst the East African member states hence billions of shillings have been lost in cross-border trade. H.E. Museveni’s speech towards this on his inauguration gives fresh breath to the political environment amongst his East African counterparts.

Both Uganda and Rwanda have traded accusations, with Kigali accusing Kampala of supporting armed groups against it and harbouring hostile groups, kidnappings as well as torturing Rwandans in Uganda. Uganda too has accused Rwanda of trying to impose a trade embargo and espionage. Addressing the ruling party’s Extended National Executive Committee meeting on May 1, President Paul Kagame described relations with Tanzania and DR Congo as cordial while relations with Burundi are on the mend.

“We want to normalise relations with Burundians and they have proved they are keen on having good relations with us. We are in the process of finding solutions to the existing problems,” he said, adding that all Rwanda wants is “to live in peace” with its neighbours.

President Kagame, however, expressed frustration at the state of impasse in the relations with Uganda, despite multiple diplomatic efforts. “The neighbour in the north (Uganda) has a problem with us. I lived there, I worked with them. If you asked me to tell you its (crisis) roots I don’t understand. For me, I will roof my house so that I do not get rained on. I will put strong doors so that you cannot intrude and take my property. If you force your way in, I will force you out…” President Kagame said, in a veiled message to Kampala.

All these may be things of the past if H.E. Museveni’s inaugural speech is anything to go by.

Realizing that the internal market of Uganda is not enough, in order to support our producers of goods and services, we saw that Pan-Africanism was a necessity for the prosperity of our society. In saying this, the president meant that he will be opening the Ugandan markets for both investors and any other individuals interested in doing business with Uganda.

It is evidenced that the Ugandan market is therefore, ready for any African national interested in doing business or investing in Uganda.

Ugandans could not, however, benefit fully from the Ugandan market, the African market or, indeed, the global market, unless they underwent social-economic transformation ─ changing from the pre-capitalist traditional culture of only working for the stomach or engaging in uneconomic colonially demanded cash-crops production, to producing remunerative products and services that are market-driven. While joining the money-economy is one of the stimuli for social-economic transformation, we cannot also forget the other one ─ the development of the human resource through education and improved health.

Regarding the current short-term problems of increased fuel prices and increased food prices H.E. Museveni stated, “We are looking at the option of buying fuel in bulk and also the option of approaching the government of South Sudan. I am told that buying in bulk lowers prices. I am also told that fuel in Juba is cheaper. In fact, some of our people from West Nile are already using that fuel, especially diesel. I intend to approach the government of South Sudan to see the possibilities. In the next three years, we shall be using our own fuel after the building of the Refinery is finished.”

We are also analysing the price of fuel up to Eldoret. Is it all justified?

This gives the green light to more business between South Sudan and Uganda. Investors in the petroleum businesses between the two countries will have an opportunity to get busier as soon as the implementation of this starts.

Eldoret, Kenya is also on the radar of President Museveni heralding more cross-border business possibilities.

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