Uganda: Country On The Move

Uganda is recognised as one of the best places for investments in East Africa

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Uganda is clearly a country on the move. The country has attracted increasing amounts of foreign direct investment (FDI) since the beginning of the 1990s. Between 2005 and 2007, the country attracted an average of over US$100 million in FDI. This increased steadily with FDI being USD 210 million in 2006. This means that Uganda attracts more FDI than most other countries in the region and indeed, most developing countries.

The Government of Uganda has pursued a steady policy of improving the investment climate by reducing bureaucracy, streamlining the legal framework, fighting corruption and stabilizing the economy. The government has adopted 'The Big Push' strategy intended to make Uganda the most competitive destination for FDI in Africa and establish Multi-Facility Economic Zones, extra-territorial zones exempt from cumbersome and archaic domestic laws.

Uganda is a country rich in natural resources and offers a wide range of investment opportunities in agriculture, forestry and mineral resources. Because the country's young economy, the potential and the choice of investment opportunities is much wider for the prospective investor than would be the case in more developed economies. The recent economic dynamism has also opened up opportunities in manufacturing and services. Linked to almost all of the primary-sector industries are opportunities in upstream or down-stream manufacturing activities. These include, among other things, packaging and the construction of storage facilities.

The extensive privatisation programme undertaken by the Government has opened up industries that were formerly closed to the private sector, particularly in the infrastructure sector.

Uganda was one of the first African countries to liberalise its telecommunication sector and there are now several private telecommunication companies in operation. The poor condition of many other infrastructure facilities, in particular air, road and rail transport, is an obstacle to users but an opportunity for investors.

Perhaps the biggest long-term opportunities are to be found in the tourism industry. Uganda, commonly known as the 'Pearl of Africa', offers a number of unique tourist attractions.These include Lake Victoria, the source of the Nile, the Murchinson Falls and the Mountains of the Moon, along with a number of national parks and wildlife reserves hosting, among other fauna, half the world ’s mountain gorilla population. However, the tourism infrastructure is still underdeveloped. This offers plenty of opportunities for tour and hotel operators.

Apart from the availability of natural resources, Uganda offers a well educated domestic labour force. On top of this, the government provides a fiscal incentive package which in turn provides for generous capital recovery terms, particularly for investors whose projects entail significant investment in plant and machinery and whose investments are medium/long term.

Economic Growth

After a year of turbulence, the Ugandan government stabilised the economy in 2012 with inflation falling to 14.6% from 18.7% in 2011. Tightened fiscal and monetary policy helped bring fiscal balances under control. While laying the foundations for recovery and growth, stabilisation came at the cost of a slowdown in gross domestic product (GDP) growth to 3.2% by June 2012

Agribusiness

Uganda is among leading producers of coffee and bananas. It is also a major producer of tea, cotton (including organic cotton), tobacco, cereals, oilseeds (simsim, soya, sunflower, etc), fresh and preserved fruit, vegetables and nuts, essential oils, orchids..

Factory Growth

Uganda's manufacturing output has been expanding by more than 10% annually over the last eight years. Opportunities exist in virtually all areas ranging from beverages, leather, tobacco based processing, paper, textiles and garments, pharmaceuticals, fabrication, ceramics, glass, fertilizers, plastic / PVC, assembly of electronic goods, hi-tech and medical products.

Forestry

With over 4.9 million hectares of rich forest vegetation, Uganda possesses abundant potential in areas like timber processing for export, manufacture of high quality furniture/wood products and various packaging materials. There are also opportunities in afforestation and reforestation especially of medicinal trees and plants, soft wood plantations for timber, pulp poles.

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