WHY INVEST IN UGANDA?
1. Predictable Environment
Uganda has been able to achieve macro-economic stability when clouds of uncertainty rocked many regions of the world.
Inflation rate has been single digit for over 15 years.
Strong economic growth averaging 7.7% per annum since the year 2000 making Uganda the fastest growing economy in East Africa.
Maintained a competitive real exchange rate that supports export growth.
2. Fully Liberalized Economy
All sectors liberalized for investment and marketing.
Free inflow and outflow of capital.
100% foreign ownership of investment permitted.
Ranked the 4th freest economy in Sub-Saharan Africa by the 2009 Index of Economic Freedom.
3. Market Access
Uganda enjoys a unique location at the heart of Sub-Saharan Africa giving it a commanding base for regional trade and investment.
Uganda is a member of the Common Market for Eastern and Southern African States (COMESA), a region with a market of over 400 million people in 19 countries.
Uganda is a member of the East African Community (EAC) comprising Burundi, Kenya, Rwanda, Uganda and Tanzania with a population of over 125 million people.
Duty and quota free access into the US (AGOA), Generalized System of Preferences (GPS) scheme and EU (EBA) markets.
4. Strong Natural Resource Base
Abundant rainfall evenly spread in two seasons, rich loamy soils, and favourable temperature which enhance the productivity of the land to support the cultivation of both food and cash crops, organically.
Unexploited mineral deposits; confirmed deposits include Phosphates, Gold, Zinc, Wolfram, Petroleum, Diamond, vermiculite, Silica etc.
Lush green tropical forests, inhabited by a wide variety of birds and fauna.
5. Government Commitment to Private Sector
Government and private sector dialogue in policy formulation.
Continuous improvement in provisions of infrastructure and other social services.
6. Trainable Labour
Uganda presently produces over 15,000 University graduates per year.
Quality of labour is one of the biggest attractions.
7. Security of Investment
Guaranteed under the Constitution and the Investment Code Act Cap .92 Laws of Uganda 2000 edition.
Uganda is a signatory to major international investment related institutions such as:
-Multilateral Investment Guarantee Agency (MIGA).
-Overseas private Investment Corporation (OPIC) of USA.
-Convention of the Recognition and Enforcement of Foreign Arbitral Award (CREFAA).
-Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC).
-ICSID, TRIMS, GATS and TRIPS
8. Investment Incentives
a) Investment Capital Allowances
Initial Allowance on plant and machinery 50 – 75%
Start-up cost spread over 4 years 25% p.a.
Scientific research expenditure 100%
Training expenditure 100%
Mineral exploration expenditure 100%
Initial Allowances on hotels, hospitals and industrial buildings 20%
Deductible annual Allowances (depreciable assets)
Depreciation rate for Hotels, Industrial Buildings and Hospitals 5%
b) Investors who register as investment traders are entitled to VAT refund on building materials for industrial/commercial buildings.
c) Duty and Tax free import of Plant and machinery
d) First Arrival privileges in the form of duty exemptions for personal effects and motor vehicle (previously owned for at least twelve months) to all investors and expatriates coming to Uganda.
e) Export promotion Incentives and Facilities.
Manufacturing Under Bond
Duty exemption on plant and machinery and other inputs.
Stamp duty exemption.
Duty draw backs – a refund of all or part of any duty paid on materials inputs imported on produce for export.
Withholding tax exemptions on plant and machinery, scholastic materials, human and animal drugs and raw materials.
Ten-year tax holiday.
Duty remission scheme for exporters involved in value addition.
INVESTMENT OPPORTUNITIES
Agribusiness
Uganda is one of the leading producers of coffee and bananas in the world. It is also a major producer of tea, cotton (including organic cotton), tobacco, cereals, oilseeds (simsim, soya, sunflower etc.), fresh and preserved fruit, vegetables, nuts, essential oils, orchids, flowers and sericulture (silk). Opportunities include commercial farming and value addition, as well as the manufacture of inputs and supply of agricultural machinery.
Fisheries
The sector is the second highest foreign exchange earner for Uganda with export revenues amounting to an estimated US$124 million in the year 2008. Large fresh water expanses are home to a wide variety of fish products. Opportunities are available for fish farming and establishment of more fish processing factories on other lakes other than Lake Victoria. Uganda’s fish is a delicacy in Europe and has recently penetrated the US market.
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 and poles.
Manufacturing
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.
Mining
Uganda has large under-exploited mineral deposits of gold, oil, high grade tin, tungsten/wolfram, salt, beryllium, cobalt, kaolin, iron-ore, glass sand, vermiculite and phosphates (fertilizer). A discovery of petroleum wells in the Lake Albert region has enhanced the sector. There are also significant quanties of clay and gypsum. Uganda provides special incentives to the mining sector with some capital expenditures being written off in full.
Infrastructure
Although significant efforts have been made to develop and rehabilitate the existing physical and non-physical infrastructure, potential investment opportunities still abound. In particular, transport & logistics and energy sectors still require further investment. With less than 10% of the mainstream capacity of 2,700 megawatts of power exploited, Uganda has the potential to be a major supplier of hydroelectric power to the entire East Africa region.
Financial Services
Opportunities for investment exist for international multinational banking groups particularly promoting new or innovative financial products (i.e. Mortgage finance, venture capital, merchant banking and leasing finance) and also micro finance saving institutions, which propose to operate in rural areas. Insurance, in particular, is still a relatively young sector and offers several opportunities for investment.
Tourism
The distinctive attraction of Uganda as a tourist destination arises from the variety of its game stock and its unspoiled scenic beauty. Within a relatively limited space of just over 240,000 square kilometres, Uganda offers an interesting contrast ranging from wide East African plains and expansive savannah grasslands to the impenetrable, mountain rain forests and snow peaked mountains in the South Western parts of the country.
Uganda offers a wide range of bird species for viewing in addition to numerous sporting opportunities such as mountain climbing and water sports including white water rafting. The opportunities in tourism range from constructing high quality accommodation facilities, operating tours and travel circuits to the development of specialized eco-tourism.
Printing and Publishing
In the printing and publishing sub-sector, opportunities exist for the printing of textbooks for schools. Currently, imports supply over 90% of Uganda’s textbook requirement (estimated at over US$7 million a year). Investment opportunities, therefore exist in the various types of printing including flexography, screen printing, off-set printing and digital printing. Other opportunities include electronic printing, magnetography, thermographic printing, ion deposition printing and direct charge deposition printing.
Information Communication Technology
Uganda’s Information and Communication Technology (ITC) sector is one of the most vibrant within the region. This vibrancy hinges largely on the good legal and regulatory frameworks. The supportive investment climate therein has exposed numerous opportunities in ITC innovation services leading to maximum utilization of existing youthful human resource base. The newly developed and highly qualitative ICT infrastructure is also ready to accommodate more future investments.
Opportunities in the ITC include establishment of information and communication infrastructure and broadband services, business process outsourcing services, computer and related equipment hardware assembly, high level ICT training facilities on international standards, ICT business services incubation, hardware repair training facilities, software development niches, setting up information technology virtual zones (ITVZ), and setting up internet service provider facilities in other parts of Uganda.