Top Reasons Why You Should Invest In Uganda

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Officially known as the Republic of Uganda, the country is a landlocked country in East Africa bordered to the east by Kenya, to the north by South Sudan, to the west by the Democratic Republic of the Congo, to the south-west by Rwanda, and the south by Tanzania. The southern part of the country includes a substantial portion of Lake Victoria, shared with Kenya and Tanzania. Uganda is in the African Great Lakes region. It also lies within the Nile basin and has a varied but generally modified equatorial climate. It has a population of over 42 million, of which 8.5 million live in the capital and largest city of Kampala.

Before we go indepth, lets outline the top investment opportunities in Uganda. They are:

  • Minning
  • Agriculture
  • Manufacturing
  • Services sector
  • Education
  • Finance
  • Health

Uganda is named after the Buganda kingdom, which encompasses a large portion of the south of the country, including the capital Kampala. country.

The country occupies an area of 241,551 square kilometers, compared to Uganda is slightly smaller than the UK or slightly smaller than the U.S. state of Oregon.

The country’s highest point is Margherita Peak on Mount Stanley which is about 5,110 meters, a mountain located in the Rwenzori range within Rwenzori National Park.

The dictatorial regime of Idi AMIN between 1971 to 1979 was responsible for the deaths of some 300,000 people. Guerrilla war and human rights abuses under Milton Obote between 1980 to 1985 claimed another 100,000 lives.

The rule of Yoweri MUSEVENI since 1986 has brought relative stability and economic growth to Uganda. During the 1990s the government promulgated non-party presidential and legislative elections.
A constitutional referendum in 2005 canceled a 19-year ban on multi-party politics and lifted presidential term limits.


Investment Opportunities in Uganda:

In the whole African region, Uganda’s economy is the fastest rising due to its political stability and sound economic policies. Political stability is the main success of business in Uganda. The country’s political and economic environment has been consistently improving and stable since 1986. Under the leadership of the President of Uganda, H.E. Yoweri Kaguta Museveni, Uganda has been able to be a political stabilizing force in the region, which has provided a secure environment for private businesses to thrive. Security of investment is also guaranteed under the Constitution of Uganda and the Investment Code 1991, as well as the major international investment-related agreements and treaties to which Uganda is a signatory.

A potential investor considering investing in Uganda will find a highly liberalized economy in which all sectors are open for investment and there is a free movement of capital to and from the country. Uganda’s economy rose because of the implementation of structural development programs. Agriculture continues to dominate the business bringing at least 80 percent of its export earnings. Uganda has the unrivaled potential to be the food basket of the East African Community, as well as the Great Lakes regions, with the capacity to export processed food to the wider COMESA economic bloc if more investment is targeted at processing more of the agro products. Uganda is among the leading producers of coffee and bananas. It is also a major producer of tea, and cotton including organic cotton, tobacco, cereals, oilseeds simsim, soya, sunflower, etc, fresh and preserved fruit, vegetables and nuts, essential oils, orchids, fish, flowers, and sericulture.

Efforts have been made to ease investments, consequently, the Ugandan Parliament in 1991, came up with Uganda Investment Authority, a stop center for all investors in Uganda. The mission of the UIA is to promote and facilitate investment projects, provide serviced land, and advocate for a competitive business environment. The UIA works with the Government and the private sector to promote the economic growth of Uganda through investment and infrastructure development.


Companies need to meet the minimum capital threshold of 50,000 dollars for domestic investors and 250,000 dollars for foreign investors. Please note that some sectors require secondary regulatory licenses examples are mining, and the manufacture of drugs, before applying for an investment license. These secondary licenses can be obtained from other government agencies, facilitated by the One-Stop Centre at UIA.

Persons intending to engage in a trade do not require a license from UIA but must prove they have access to operating capital of 100,000 dollars before trading licenses and the recommendations for work permits can be issued by local authorities. The Investment license is free of charge and issued within 48 hours if the application meets the stated criteria.

Opportunities that investors can take on in Uganda include commercial farming and value addition, as well as the manufacture of inputs such as fertilizers, pesticides, etc., supply of agricultural machinery, and the establishment of cold storage facilities as well as the production of packing materials. Public-Private Partnership investment opportunities exist in the commercial production of cereals like maize and rice as well as beans.

The manufacturing sector is also a very viable investment sector. Uganda has large under-exploited mineral deposits of gold, oil, high-grade tin, tantalite, tungsten, salt, beryllium, cobalt, kaolin, iron-ore, glass sand, vermiculite, phosphates, lithium, uranium, and rare earth elements. Uganda provides special incentives to the mining sector with some capital expenditures being written off in full.
Other viable investment opportunities that can be explored are in Services, Education, Finance, and Health.

Natural resources in Uganda are substantial and largely unexploited. These include arable land, adequate rainfall, mineral deposits, and freshwater, including Lake Victoria which is significant for fishing. Even though the country is landlocked, there are numerous opportunities for both domestic and foreign investment. The first phase of economic take-off was interfered with by the conquest of power by Idi Amin’s regime in 1971. Most of the foreign investors were compelled to leave Uganda, which generated an economic crisis in the country. Asians were the major targets of Idi Amin’s tyranny, yet ironically they were the key sources of FDI in Uganda. Nevertheless, subsequent governments have tried to encourage foreign investors by promising a safe environment for investment.


Foreign Direct Investment in Uganda:

There has been an increasing trend of FDI in Uganda since 1990. The year 2008 had a marked rise in FDI to 799 million dollars, which has continued to grow steadily reaching a high of 1.67 billion dollars in the year 2010 according to the World Investment Report.

The recent trend dates back to the year 1991 when the country began recording remarkable improvements in capital inflows. The period between early 1991 and the end of 1996 saw a significant rise in employment opportunities, with totally foreign companies accounting for 38 percent of the emerging job opportunities, while the joint ventures between local firms and the foreign-owned accounted for 24 percent.

Generally, local and foreign investments in 40 Uganda generated 149,000 employment opportunities n Uganda in 2010. According to the Uganda Bureau of Statistics, FDI accounted for 47 percent of the jobs created while 53 percent of the opportunities were in the locally owned firms.

UK companies had the greatest share of investments followed by Canada, Kenya, the USA, Kenya, South Africa, and India among others. Indian multinational companies have continued to exist in the Ugandan market in spite of the drawbacks encountered during Idi Amin’s regime. The manufacturing sector leads in FDI inflows to Uganda. 80 percent of the more than 1.02 billion USD invested in the first three quarters of 2010 was manufacturing.

Nevertheless, most of the new firms springing up in the country are not greenfield investments. Rather, they have refurbished industries that were reacquired by the rightful owners who were forced out of Uganda during Amin’s regime. Firms in the manufacturing sector mainly concentrate on beverages that have a ready market locally. For example, Coca-Cola and Pepsi are major soft drink manufacturers that directly employ 664 and 850 employees respectively.

There are more than 20, 000 Ugandans who are indirectly employed by dealing in the companies’ products. The Madhvani Group of companies that manufacture safety matches and sugar among other products directly employ more than 10,000 workers and more than 70,000 people indirectly.

They offer a market for raw agricultural products such as sugarcane that are a source of livelihood for thousands of Ugandan farmers. Lafarge Cement Company and its affiliate firms directly employ 1,700 permanent workers and 7,200 on contract terms.

Uganda Bata Shoe Company from Switzerland directly employs 2,000 Ugandans and more than 150,000 indirectly. Other firms in the manufacturing sector include producers of packaging and synthetic materials as well as food processing. Generally, the manufacturing sector directly employs 41 percent of Uganda’s working population.

The services sector of Uganda is also flourishing in terms of FDI. Generally, local and foreign firms need service providers to enhance their success. Global banks have acquired local banks, such as Citibank and Stanbic bank. The bank of Baroda, Trans Africa Bank, Standard Chartered, and Barclays are also among the major foreign-owned banks that have 86 percent market share in the country. Nevertheless, the financial sector employs many expatriates due to the high level of experience required to run the institutions. The same case applies to insurance, stock markets, and the media.

However, the tenure for expatriate workers is usually short-lived since companies are encouraged to train locals to take over the tasks that require skills.

Communication has also led to more foreign direct investments in Uganda. These include MTN and Vodafone. Many people are earning their livelihood from providing telephone services as well as selling their products such as airtime. Many other people are employed by the agencies that provide the company’s services, such as the MTN mobile money transfer. Generally, FDI in Uganda’s communication industry is experiencing fast growth and has directly employed more than 6,000 and over 320,000 indirectly. Agriculture, mining, and forestry have attracted minimal FDI mainly because of inappropriate policies to encourage foreign investors in these sectors. Nevertheless, Agriculture supports 80 percent of Uganda’s population through subsistence farming. Foreign firms investing in the agricultural sector are mainly involved in projects such as the production of flowers for export markets, growing of oilseed and processing it into finished products, cotton growing, processing, spinning, and knitting, producing, and processing of livestock products such as milk and hides. They also engage in the farming of horticultural crops such as fruits and vegetables while on the other hand 43 they buy locally produced coffee and cereals for value addition. Generally, foreign investors are mainly involved in processing agricultural products such as coffee, flowers, and fish or adding value for export.

FDI in mining is also scanty although in the early 1950s it contributed more than 30 percent of the country’s exports.

The agricultural sector which is the source of livelihood for 80 percent of Uganda’s population has thrived as a result of the backward linkages between local producers and the foreign firms that require semi-processed goods for the production of finished goods for consumption locally and abroad. Food and beverage firms are the major consumers of agricultural products from the local producers. Semi-processed cotton is also sold to foreign textile firms.

The entire supply chain indirectly employs a substantial number of Ugandans. It can be seen that the manufacturing and services sector has attracted the most FDI and has also been able to create direct employment. This explains why the agricultural sector has less FDI pumped into it, but it nevertheless has gained through indirect employment due to the demand for its products by the firms involved through FDI.

Exporting firms are offered incentives to help them cope with the country’s infrastructure shortfalls as well as the expenses of bureaucratic indolence. Furthermore, the export incentives are also targeted at developing a level and favorable playing field to enhance the competitiveness of the economy’s exports. The Cotonou accord as well as AGOA initiative allows entry of Uganda’s exports to the EU market as well as the USA duty-free. This encourages foreign investors to establish in Uganda. Manufacturers of export products are also allowed to Manufacture under Bond, which entails using imported inputs with a custom license, meaning that they do not have to pay duty upon importation. In other words, their working capital is not withheld in refundable duties.




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Uganda is a landlocked country bordered to the east by Kenya, the north by South Sudan, the west by the Democratic Republic of the Congo, and the south by Tanzania. Agriculture continues to dominate the business bringing at least 80 percent of its export earnings.



top reasons why you should invest in uganda
top reasons why you should invest in uganda




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