Uganda top investment destination in East Africa
Uganda is pacing ahead of its East African counterparts, becoming the top investment destination, the latest World Investment report indicates.
The 2013 UNCTAD World Investment Report shows that Uganda is the leading recipient of Foreign Direct Investment (FDI) in the East African region again, ahead of Tanzania which had beaten the country to this position since 2008.
“Among the EAC, flows to Uganda, Tanzania and Rwanda remained at high levels compared with Kenya and Burundi which recorded a drop,” the Uganda Investment Authority executive director, Mr Frank Sebowa, said while quoting the report.
EAC FDI flows increased by 50 per cent in 2012 to $4 billion (about Shs10 trillion) compared with $3 billion (about Shs7.7 trillion) in 2011.
According to the UIA statement, FDI inflows to Uganda alone rose for the third year running by 92 per cent hitting a record high of $1.72 billion (about Shs4 trillion).
“This makes us [Uganda] the highest FDI recipient in 2012. Tanzania lost its position as frontrunner FDI recipient in 2012 accounting for 44 per cent of total EAC FDI compared with Uganda’s 45 per cent,” said Mr Sebowa.
Economic analysts and industry players agree with the report saying it is “fairly accurately” report.
“If you consider investment in energy and the fact that energy has increased, let alone more activities in extractive sector, then the report paints a fair assessment,” Makerere University Economics lecturer Augustine Nuwagaba said.
FDI flows to Tanzania grew by 39 per cent reaching $1.71 billion compared with $1.23 billion in 2011. Kenya maintained its position as the third FDI recipient in the region but the flows dropped by 26 percent to $259 million.
Rwanda recorded $160 million up from $106 million in 2011 while Burundi recorded $1million, a decline from $3 million in 2011.
Uganda’s improved performance is partly due to the increased investments in oil manufacturing and services sectors.
“Recent natural resource discoveries also contributed to the increase in FDI inflows to East Africa, from $4.6 billion (about Shs11.8 trillion) in 2011 to $6.3 billion (about Shs16 trillion) in 2012,” reads part of the report.
Private Sector Foundation (PSFU) executive director Gideon Badagawa said the ultimate results lie in witnessing a marked improvement in terms of jobs created.