Despite the challenges occasioned by COVID 19, Government has continued to attract high-quality Foreign Direct Investments (FDIs) into the country in all sectors.
This was said by His Excellency Julius Peter Moto, High Commissioner of Uganda in London, during the Uganda UK Investment and Trade convention.
The virtual event which was held on September 11, 2021 was attended by over 500 participants.
Moto stressed that even with lockdown effects and other inherent issues like poverty, inadequate infrastructures, and inequitable distribution of utilities, industrial power and financial services, a lot of FDIs have been attracted into Uganda.
“Uganda is endowed with natural resources. I encourage all investors to come to this gifted country,” he appealed.
He added that Uganda’s location in the heart of sub-Saharan Africa gives it a strategic base as a regional hub of tourism, trade, and investment.
“It is mainly through trade and investment that nations rise to wealth and prosperity,” he affirmed.
Ambassador Moto urged investors to take advantage of a stable political climate and economic growth strategies under the leadership of President Museveni to engage in investment activities as the country implements the third National Development Plan (NDP III) towards the attainment of Uganda Vision 2040.
The vision states that; A transformed Ugandan society from a peasant to a modern and prosperous country within 30 years.
Moto thanked Willy Mutenza, a Ugandan investor based in the UK for organizing the convention that brings together Ugandans, diasporans and foreigners interested in investing in Uganda.
It was officiated by Prime Minister, Hon. Robinah Nabbanja who highlighted that the event aims at promoting and strengthening investment opportunities between Uganda and UK.
“Uganda is open for business and ready to partner in all sectors. Investors are welcome and assured of a favorable and safe investment environment,” she said.
UK Prime Minister’s trade envoy to Uganda, Democratic Republic of Congo and Rwanda, Lord Dolar Popat said United Kingdom wants to continue being a critical partner for Uganda.
“UK is Uganda’s largest donor. In 2020, we donated 100,000 COVID 19 test kits to 27 districts and reached over 500,000 children,” he stated.
Additionally, UK has to date donated 1,725,280 vaccines through the COVAX scheme.
Popat added that they will continue to support the COVID response in Uganda and other countries, contributing over 100 million doses globally in the coming months.
“The UK plans to invest over $594 billion in different sectors including agriculture and trade,” he announced.
He was quick to add that UK export finance scheme was increased from £300 million to £1 billion and is now ready to continue to support technology transfer to Uganda.
Popat also applauded the Ugandan government for investing in Uganda Airlines. He said this will help boost trade and tourism between the two countries.
Uganda’s trade and investment future is bright
According to the latest United Nations Conference on Trade and Development (UNCTAD) Uganda is one of the countries attracting the most FDIs in East Africa.
Unfortunately, the COVID 19 pandemic has significantly slowed down its performance.
Moto highlighted that According to UNCTAD’s 2020 World Investment Report, FDI in Uganda decreased by 35% from US$ 1.3 billion in 2019 to US$ 823 million in 2018. Also, engineering works on the Lake Albert oil project slowed down due to COVID 19.
The approval of the US$ 3.5bn East African crude oil pipeline project, which will lead to the construction of a 1,400km pipeline from Uganda to Tanga seaport in Tanzania, bodes well for investment in both countries.
FDI rose from US$1055 million in 2018 to US$1266 million in 2019, representing 20% increase, as per UNCTAD report 2020. FDI stock rose from US$ 13,051 million to US$14,317 million representing 9.7% during the same period, with the resultant rise in greenfield investments that rose in number from 17 to 29 in the same period and associate value of greenfield investment also rose from US$366 million in 2018 to US$960 million in 2019 representing a whopping 162%.
“These statistics point at political stability and steady economic growth under the leadership of President Museveni. I expect more progress in all sectors,” Moto opined.
He was quick to add that since 1986, government has made tremendous progress in regulatory development in financial services. These included insurance, capital market, privatization and banking. They have attracted FDI while maintaining a tight monetary policy that kept inflation rates in single digits at 8% for the last 35 years compared to over 100% four decades ago.
“Government has continued to ease doing business in Uganda,” he affirmed adding that Industrial incentives for industrial investments, including 75% import duty reduction on factory equipment, depreciating start-up costs over four years, and 100% tax deduction on research and training costs have contributed to the rise in the FDIs.
Also, mineral exploration costs, including tax free imports of capital good for holders of investment licenses have been significant as reported by UNCTAD.
“Export of processed products is encouraged. There are no taxes paid,” he assured.
Investors engaged in export-oriented production can also enjoy a 10-year tax holiday.
“We encourage Ugandans to set up processing facilities country wide to provide decent jobs for our people, expand the tax base, and contribute to national development,” he appealed.