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Uganda Investment, Guidelines and Procedures

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Investment Opportunities in Uganda

a photo of Uganda Serena Hotel a new Uganda Investnment opportunity in hotels

Uganda´s political and economic development in the past 20 years has been extraordinary. The country has fully recovered from the ruinous. regimes of Idi Amin and. Milton Obote to become one of the most dynamic economies in sub-Saharan Africa. It is rich in natural resources and offers a wide range of investment opportunities in mining (cobalt and limestone), agriculture (coffee, tea and fruit) ,fishing and of recent oil.

Linked to almost all of the primary-sector industries are opportunities in up-stream or down-stream manufacturing activities. In addition, the extensive privatization programme has opened up areas formerly closed to the private sector. Uganda was one of the first African countries to liberalize its telecom industry and there are now several private companies in operation.

Perhaps the biggest long-term investment opportunities are to be found in the Uganda. Tourism Sector, labelled the ´Pearl of Africa´ by former British Prime Minister Winston Churchill, offers a number of unique attractions, including Lake Victoria (the source of the Nile), the Murchison 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. mountain gorilla population On the downside, the condition of much of Uganda´s infrastructure is poor.

Decades of negligence and even deliberate destruction have left much of it in disarray. The intermittent and expensive power supply continues to be a problem. Although the workforce is generally well-educated, there is a considerable shortage of mid-level managers and technicians.

Despite this, with its dynamism and its track record of stability, Uganda is now a land of investment opportunities and challenges that investors ignore to their own loss. Its membership of the recently founded East African Community (EAC), with its 120 million consumers, is yet another reason to expect bright prospects for Uganda.

Investors can expect further integration of the EAC, which established a Customs Union in January 2005 and is expected to form a political federation by 2013.

Uganda entrusts to you the decision to chose which industry to invest in. Because the country's economy is still young, the potential and the choice of investment opportunities is much wider for the prospective investor than would be the case in more developed economies.

Uganda's existing comparative advantage is heavily concentrated in agriculture , forestry and mineral resources and their primary processing.

The identified potential investment opportunities are based on the availability of domestic natural resources and intermediaries, the existence of surplus domestic labour, the good market prospects, the "high value low transport costs" to export markets as well as the relative competitive advantage of Uganda vis a vis her main trading partners in the region.

The available opportunities include but are not limited to the following:

HIGHLIGHTS ON SOME OF UGANDA INVESTMENT OPPORTUNITIES IN DETAILS

East Africa Community Leaders ie Uganda, Kenya Tanzania Rwanda and Burundi Signing the last papers to ease Investnment in EAC

(a)Uganda Investment in Floriculture

Floriculture gives the most attractive return on investment in agriculture in Uganda (30-40%) but requires high investment. The industry requires expansion and new enterprises, and the market can absorb an increase in production. Opportunities include production and supply of propagation materials to farmers, manufacture of greenhouse construction and packaging materials.

(b)Uganda Investment in Cotton and Textile Industry

A number of investment opportunities exist in the textile sector. These include growing of cotton for export, establishment of ginneries, supply of inputs to farmers and production of edible oil from cotton. Building and Construction Industry Opportunities include the provision of low cost housing in the urban and semi-urban areas, provision of housing and mortgage finance, and provision of construction equipment and build materials.

(c)Uganda Investment in Foods and Beverages SectorInvestment opportunities do exist mainly utilization of local agricultural raw materials to manufacture agro-processed products with higher export potential. Additional opportunities exist for support industries to the sector for example in packaging, value added processing and cold storage at export points.

(d)Uganda Investment in Education Sector

There are more opportunities in the education sector most especially at post primary level. These include secondary education, technical and vocational education, development of computer skills, managerial skills training.

(e)Uganda Investment in Financial Services

Given the favorable climate, stable macro-economic environment and political stability, there is enormous potential in the following areas: Merchant Banking, Development Banking, Commercial Banking, Insurance Services, Mortgage Financing, Building Societies, Micro-Financing Services, Specialized Training Institutions.

(e)Uganda Investment in Fruits and Vegetables

Opportunities include commercial farming of fruits and vegetables, processing, production and export of de-hydrated fruits, cold storage facilities at collection points, organic farming, irrigation schemes for commercial farms to ensure harvest throughout the year Information Technology.

(f)Uganda Investment in Electronics Sector.

Opportunities include the establishment of service centers for the available brand radio, television and power conditioning equipment and the manufacture and assembly of computer equipment targeting the local and regional markets.

(g)Uganda Investment in Dairy Sector

Major investment opportunities exist in the production of powder milk and long life milk such as condensed milk or ultra heat-treated (UHT) milk, processing of dairy products such as butter, cheese, ice cream, yogurt and ghee. There also exist opportunities in dairy cattle and goat breeding and dairy farm management.

(h)Uganda Investment in Tourism Sector

Opportunities in the sector include water sports and related activities, accommodation, national park concessions and joint ventures with existing players.

(i)Uganda Investment in Printing and Packaging

The printing, publishing and packaging sector also has considerable potential. In the printing and publishing sub-sector, opportunities exist for the printing of textbooks for schools.

Currently, over 90% of Uganda's textbook requirement (estimated at over U$7 million a year) is met by foreign suppliers. Given Uganda's situation as a predominantly agricultural country, there is potential for a vibrant packaging industry supplying the agro-processing industry.

(j)Uganda Investment in Commercial Agriculture

Large-scale commercial agriculture is encouraged because Uganda is largely a fertile country with plenty of arable land that is currently unutilized or under-utilised. Uganda enjoys comparative advantage in agriculture because of the lesser requirement for inputs i.e. water (irrigation) and fertilizer.

(k)Uganda Investment in Agro-Processing

Agro-processing is a major opportunity in so far as it exploits local products by adding value through canning or manufacture of value added products. There is significant scope for export both to the regional and the international market.

Uganda government often calls investors with moneyl to invest in the country where entrepreneurial safety and relative friendly incentives are guaranteed. Since land is one of the factors of production, all the investment areas above have to be done on land which is available in Uganda from the capital city, to district urban and peri-urban areas up to rural areas.

It’s the nature of any investment, investor’s interest and the available capital that determines which part of Uganda one should locate a viable business. For about two decades, Uganda has recovered economically, law and order have been restored and good working climate for investors is among Uganda’s top priorities.

WHY INVEST IN UGANDA?

Uganda’s economy has been growing for the last two decades and today the country is on a normal progress as far growth and development are a concerned. There is an influx of foreign investors in the country in addition to the already existing ones both locals and foreigners.

The government is so much friendly and the people are good. Given its geographical location in the Great Lakes Regions, Uganda is in position to exploit the bigger local, regional and international market.

The following reasons explain why it viable to invest in Uganda:

1. Vibrant Economy

Uganda’s economy has been growing at a rate of 5 - 9% per annum for the last 22 years, one of the fastest growing in sub-Saharan Africa. The country has achieved macroeconomic stability, characterized by single digit annual inflation rates and stable exchange rates over a period 1993-todate. Uganda has a sound financial sector, with the shilling fairly stable and fully convertible into bigger foreign currencies like the dollar, pound sterling, the euro and others.

2. Fully Liberalized Economy

Today Uganda’s economy is fully liberalized and open to foreign investors, with no restrictions on remittance of dividends. Foreign investors allowed investing in the country as long as they have the capital. The Uganda government has a lot of interest in having foreigners invest in the country as this creates jobs, widening the tax base and increase consumer goods and services in the country.

3. Access to Regional and International Markets

Ugandan investors have a wider access to the East African Community market which has a population of over 100million people. Uganda is a member of the Common Market for Eastern and Southern Africa (COMESA) consisting of 23 member states and a population of over 400 million people. The country is strategically located on the continent and shares borders with Kenya, Tanzania, Rwanda, the Democratic Republic of Congo and Sudan. This geographical proximity to many countries gives Uganda an easy inter-country trade.

Ugandan products enjoy preferential access to the European Union, the US and other regions. Uganda also has bilateral trade and promotion arrangements with the United Kingdom, South Africa, Kenya, Italy, Tanzania and many other countries.

4. Abundance of Natural Resources

Uganda is endowed with reliable rainfall, favourable temperatures, fertile soils, vast under exploited water bodies and a wealth of mineral deposits which offer unrivalled investment opportunities. Uganda also boasts of a wealth of beautiful natural scenery.

5. Availability of qualified Labour Force

there are over 27 Uganda’s public and private universities and several polytechnics offering quality education in over 50 fields of study producing over 10,000 graduates and thousands of diploma and certificate holders in various fields annually. Ugandan graduates are responsive to the needs of the private sector and it partly tells why they are highly sought for globally. A number of Ugandan graduates are proficient in English, their traditional languages and a little bit of international languages like French and Germany to some few.

6. Developed Infrastructure

Uganda has a relatively well-connected road network linking the country to its trading partners and has a rail link to the seaport of Mombassa. It has road networks to all its neighbouring countries, something that favours trade. The international airport at Entebbe has developed into a hub for regional trade and tourism. Uganda also has power in reasonable amount that can support well especially industrial investors. Installed capacity for power generation has risen to about 400MW through the extension of the Owen Falls Dam and combining hydro and thermal power.

The construction of Bujagali Power Dm expected to generate over 200MW is also underway, other power projects are expected at Kalagala, Isimba along the River Nile and Nyagak Power Project in Nebbi district. The telecommunication industry has also developed where all rural areas are also covered especially by the mobile telephone providers. The Uganda Government has so far licensed over 6 telecom companies are already serving Ugandans.

7. Support from Government and International Development Partners

The Government of Uganda has the Uganda Investment Authority, which is a one-stop facility for private investors. The Uganda Government values private investors as partners in efficient and productive development. Numerous International Development Agencies such as United States Agency for International Development (USAID), Department for International Development (DFID), United Nations Development Programme (UNDP) and African Development Bank (ADB) have invested millions of dollars in promoting the private sector investments in Uganda.

8. Security of Uganda Investment

Uganda is a member of the Multilateral Investment Guarantee Agency (MIGA) under which foreign investors can insure their investment in Uganda against a wide range of non-commercial risks. Uganda also has bilateral investment protection arrangements with a number of countries. Uganda’s constitution and other legal provisions guarantee the right to property by both citizens and foreigners. Uganda has a strong and independent judiciary to cater for the commercial and legal requirements of investors.

9. Good Quality of Life

Uganda has a wealth of natural and man-made attractions that makes it one of Africa’s greenest and most scenic countries. Uganda has friendly people and a rich cultural diversity. There is high quality medical facilities, first class hotels, restaurants, resorts, beaches and many entertainment facilities like clubs, theatres, and casinos among others.