Delay in signing pacts affects Uganda-Turkish trade

By David Mugabe & Isaac Omoding in Turkey

Four years since Uganda opened a foreign mission in Turkey, almost 10 protocols and memoranda of understanding (MoU) reportedly remain unsigned by Ugandan authorities, further stifling cooperation and the entry of Turkish investments in Uganda.

Ugandan ambassador to Turkey Johnson Olwa estimates that about 10 memorandum of understanding drafted by the Turkish government and forwarded to the Ugandan government remain unprocessed.

Olwa said the ministry of foreign affairs had informed him at the beginning of the year that ministry of Justice is still reviewing the MoUs since 2010. A more recent MoU between Uganda police and the Turkish authorities on tackling terrorism has meanwhile been signed and is being implemented. 45 policemen have since been trained in Turkey.

During a Uganda media tour of Turkey organized by the Turkish government, most of the Turkish government agencies including the ministry of agriculture reasoned that without signing agreements, it is difficult to move on cooperation, business and support.

But the solicitor general Francis Atoke said the remaining MoUs were cleared about two weeks ago following earlier complaints which were brought to the attention of deputy attorney general Mwesigwa Rukutana.

“It is unfair for them to generalize, if there is any, let them be specific and forward, I will be glad to have the specifics,” noted Atoke. The Ankara embassy in Turkey opened in 2011.

A rising power in global affairs, Turkey is now the 18th biggest economy in the world and sixth in Europe with an average income per capita of about $10,500 and economic output of about $800b. Now the largest contributor to North Atlantic Treaty Organization (NATO), Turkey is now seeking global partnerships with rising African economies like Uganda. But trade volumes are still comparatively very low compared to what Uganda trades with China or India.

“We have a surplus and Uganda has a deficit,” noted Nurettin Ozdebir, president of Ankara chamber of industry.

By 2013, total trade volumes between Uganda and Turkey was just $38m. Of this, $26.5m was in exports while $11.5m in imports. To overcome this, the Turkish ministry of economy says having trade pacts and institutional presence in the form of commercial counselors in each country will be crucial to move trade volumes up.



Ambassador Olwa with journalist and students in a group photo in his office May 10, 2015


Erguc Ulker, from the Turkish ministry of economy said trade pacts will create free trade areas which will boost from African countries as has been exemplified by Egypt and Ethiopia. Turkey signed a Free Trade Area agreement with Egypt in 2005 when trade was negligible.

“Egyptian companies thought they would not compete, now more than $1b Turkish investments are in Egypt,” recounted Ulker.

A former commercial attaché in Ethiopia, Ulker says the same Turkish firms operating under an FTA would produce from their country of investment and then start to export Ugandan made products to Turkey.

“We don’t have a FTA with any other country in that region (East Africa), only Mauritius, this has worked in Ethiopia and Egypt,” notes Ulker.

Uganda currently exports tobacco, sesame and hides and skins to Turkey while Uganda imports machinery and cereals mainly from Turkey. In Uganda, some Turkish firms are already in construction.

The Turkish business community has been offered $350m loan by the government to explore business opportunities in Uganda.

Olwa says Ugandan citizens and entities also face specific challenges in the restriction of imports and visa restrictions. There are estimated 4,000 Ugandans resident in Turkey.

“It can be difficult, I am always asked to recommend people, while it is easy for Turks to get visas, it is not easy for Ugandans.

Africa has in the last three years opened for Turkey and the African Union receives $1b in support from the Turkish government.

In-roads

Uganda has however made inroads in courting Turkey as a credible trade and global partner. The ambassador has today launched the East Africa single visa in three main cities of Istanbul, Ankara and Izmir.

Formal launches of Ugandan communities doing business in Turkey have also been conducted and the ambassador estimates that the about 4,000 Ugandans are playing a crucial role through their foreign remittances.

Olwa says despite the funding shortages in the foreign missions, his staff are doing a commendable job in promoting trade and business.

“Certain products are not found here like matooke (bananas), our pineapple is the sweetest,” noted Olwa.

 There are also currently 65 Ugandans on state scholarship in Turkey.