President Yoweri Museveni has assured Ugandan investors that the Government of South Africa will solve the issue of entry visas to that country since it is one of the crucial requirements in doing business.

“On the issue of the visas I am sure the government of South Africa is going to solve this because there is no way you can do business without multiple entry visas. If I am doing business, I should go any time I want to travel, I should not come to look for a new visa every time,” Museveni said.

Museveni made the remarks on Wednesday at the Business Breakfast meeting with investors from Uganda and South Africa in Pretoria, South Africa after the two day Business Forum at Gallagher Convention Centre, Midland, South Africa.

The meeting was organized by the Chairman of the Presidential Advisory Committee on Export and Industrial Development (PACEID) Mr. Odrek Rwabwogo, to appraise the President on the outcome of the two-day business engagements between Uganda and South African business people.

President Museveni also commended Mr. Rwabwogo for a holistic view on identifying bottlenecks that impede bilateral trade between the two countries.

An investor in the telecommunication sector, Mr. Charles Mbire who also attracted MTN Telecommunications Company to Uganda assured the investors of the good business climate in Uganda because there is stability, security and excellent leadership.

“I appeal to investors from South Africa to come to Uganda. I assure you we are the Pearl of Africa, we are landlocked, but we are very land linked. Let’s work together to develop our countries,” Mr. Mbire said.

Equally, the President assured South African investors that his Government is not interested in levying direct tax saying that is the reason why his government has continued to offer a holiday tax of at least 10 years.

He said: “Our doctrine is that we are not interested in direct tax. If you come and start a factory even if you don’t pay corporate tax for 10 years, the people you have employed are earning income and they are now paying income tax.”

“You know Ugandans like enjoying life once you pay them their salary, they will spend some of that money in bars and so pay tax indirectly,” he added.

Gen Museveni used the same opportunity to commit the government’s total support to Ugandan business people to enable them to grow their value-addition businesses.

The Minister of Energy and Mineral Development, Hon. Ruth Nankabirwa reiterated that the Ugandan government has already reduced the cost of doing business when it comes to energy tariffs.

“I can assure you that the low tariff rates have already been approved and we have removed the monopoly of the single buyer model,” she said adding that: “Every company will now be free to invest in generation, transmission and distribution and we shall reach you at an affordable tariff of 5 US cents.”

To improve the business environment in both countries Mr. Rwabwogo revealed that they are going to appoint trade representatives who will work hand in hand to push their business agenda.

Stories Continues after ad

The Stanbic Bank market analysis shows the Purchasing Managers’ Index (PMI) dipped to 51.2 during February from 53.2 in January as business activity increased in the services, wholesale and retail categories, but decreased in agriculture, construction and industry.

However, the Ugandan private sector remained in growth territory at the midway point of the first quarter of 2023, with output and new orders continuing to increase. Less positive were a first reduction in employment in five months and continued price pressures.

Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show deterioration. The latest reading was lower than the average of 52.4 since the survey began in June 2016.

The Stanbic PMI is compiled by S&P Global from responses to questionnaires sent to purchasing managers in a panel of around 400 private sector companies. The sectors covered by the survey include agriculture, mining, manufacturing, construction, wholesale, retail and services.

Mulalo Madula, Economist at Standard Bank said, “PMI continues to show resilient economic performance in Uganda after seven consecutive months of rising demand. New orders continued to rise, supporting output, despite a second straight month of declines in new export orders and increases in input and output prices. Activity increased in the services, wholesale and retail sectors, but decreased in the agriculture, construction and industrial sectors.”

Helping to support the overall strengthening in the health of the private sector were sustained by increases in both output and new orders, with successful advertising and improving demand reportedly behind growth. Activity and new orders each rose for the seventh month running in February.

There were some reports, however, of extremely dry weather conditions limiting output growth. Hopes are that rains would come to alleviate these conditions as one of the factors behind an optimistic outlook for the coming year, alongside predictions of higher customer numbers and softer inflation.

Madula said, “According to some reports, extremely dry weather conditions have negatively impacted output. Employment fell in February, the first drop in five months. The decrease in hiring reflects a combination of resignations and efforts to manage capacity. Businesses are optimistic that production will pick up over the next 12 months given increased demand, lower inflationary pressures and expected rainfall.”

Although some companies raised workforce numbers in line with higher workloads, others reported that resignations and efforts to manage capacity had led employment to fall. Meanwhile, backlogs of work were depleted again.

Input costs rose further in February, with higher prices for electricity, water and purchases all widely reported. Wages were also up overall, but a reduction in employment led to a drop in staff costs at some firms.

The pass through of higher input costs to customers resulted in an eighteenth consecutive monthly increase in selling prices. Charges rose in the agriculture, industry and wholesale & retail categories, but fell in construction and services. Finally, suppliers’ delivery times lengthened for the third time in the past four months.

Growth of new orders encouraged companies to raise their purchasing activity again midway through the first quarter of the year. Input buying has now increased in each of the past four months. The agriculture and industry sectors raised purchasing.

Companies remained optimistic that output will increase over the coming year, with close to 68% of respondents predicting a rise. Higher customer numbers, softer inflationary pressures and the coming rains are expected to boost activity. Positive sentiment was signaled across all five monitored sectors.

Stories Continues after ad

The shilling opened the week trading at the 3715/3725 levels. The unit weakened marginally to trade at the 3720/3730 levels but later settled to trade at the 3695/3705 levels on Friday morning. 

It was a relatively quiet week as clients worked out their requirements for the month. The few demand tickets during the week were outweighed by inflows from NGOs and commodity exporters. The unit is still likely to buoy within the 3660 – 3750 trading range in the near term as some companies prepare to purchase for dividends and flows should continue to trickle in from NGOs and other sectors.

Speaking to Catherine Kijjagulwe, the Head of Trading at Absa Bank Uganda said Money Markets were fairly liquid during the week as overnight yields continued to trade within the 11.50% -12.50% levels. Bank of Uganda held a Treasury Bill auction on Wednesday and yields in the 91-day, 182-day and 364-day tenors traded at averages of 10.384%, 10.512% and 12.302% respectively. There is no government securities auction scheduled during the week.

Dollars remain scare in the Kenyan market with the currency continuing to weaken. Tea flows were seen during the week but bid at high levels as dollar buyers continue to look for dollars. The unit is expected to trade within the 127.00 -137.00 trading range in the near term.

She said yields in the US Treasuries edged upward during the week. Jobless claims data declined to 190k indicating an improvement in the labour market and further cementing view that the Fed will hike rates. The dollar remained strong against most major currencies.

The Euro weakened on Thursday to touch lows of $1.0600 as the dollar strengthened. Inflation in the Eurozone softened to 8.5% versus 8.6% in January as market players gear up for a possible 50bps rate hike by the European Central Bank.

The Pound also weakened during the Thursday session as the dollar strengthened, touching lows of $1.1924 before closing the session at $1.1946. There is speculation of a halt or slowdown in rate hikes by the Bank of England.

Brent Crude traded at $84.61 a barrel, West Texas Intermediate traded at $78.04 a barrel. Positive China factory activity had boosted oil prices during the week however there are still concerns about the continued build up in US oil inventories.

Gold traded at $1844.76 an ounce.

Stories Continues after ad

Court has ordered Absa Bank formerly Barclays to pay Shs5.2Billion for selling off Progressive Group of Schools. The group sought for a Shs1.3 billion loan however only Shs400 million was given to them.  

The bank pretended that their client failed to service the loan and sold the group properties to Luyanzi Academic Foundation.

In 2009, the group through their lawyers, the group, Ab’mooti Investments Ltd and Kaahwa Erisa Amooti dragged the bank and Luyanzi Academic Foundation for fraudulently taking over School properties. In 2019 High Court Judge Wangutusi ruled in favor of the respondents. The applicants however appealed against the court ruling.

Appearing before court, a panel of judges led by Justice Richard Buteera, Catherine Bamugemereire and Stephen Musota set aside the high court ruling and ordered the respondents to pay Shs400 million for the 13 years.

“The sale, transfer of the applicant’s suit properties by the bank and Progressive Group of Schools is set aside and the registrar of titles is hereby ordered to cancel the transfer and registration of Luyanzi Academic Foundation and reinstate the appellants as the registered proprietors of the suit properties who shall be entitled to vacate possession thereof,” Court ruled.

The story will be updated.

Stories Continues after ad