Uganda Virgin Investment Opportunities. It is one of the fastest growing economy in the East African region.
In the past few years, Uganda has been continuously improving. Experts believe that the country’s economy has great potential as it has several major advantages and virgin opportunities. It is one of the fastest growing economy in the East African region.
Executive Director of Uganda Investment Authority, Eng. Dr. Frank Sebbowa explained why Uganda is the topmost investment destination.
Why would anyone invest in Uganda?
A: Investors look for stable environment, stable economy with good economic policies as well as a stable society, within which to do business and Uganda has been stable for more than twenty something years. They need reasonable infrastructure and we are lucky that government has worked and is continuing to work on roads and railway lines.
Uganda is land locked and has potential customers on all its boarders.We are 149 million consumers in East Africa, plus the 340 million COMESA members where we have trade arrangements.
Additionally, we have an educated population which is fairly young, most of them almost ready to be employed. With just minimal skills training, you can definitely get a good and cheap workforce.
Uganda is also committed to exports within the country and outside.
Which opportunities are available for investments?
A: Nearly all areas are available for investment, but currently we would strongly encourage four strategic sectors because of their importance to the economy:
Agriculture and processing agricultural products to add value; inputs such as fertilizers, tractors, irrigation systems and commercial farming.
ICT would attract and benefit the young workforce I mentioned earlier who are well educated. We also recognize the fact that no country can move forward without the ICT base in its economy.
Tourism, especially eco-tourism which is based on culture or environment should be highly focused on.
Minerals. We have close to 50 different minerals which need to be explored and mined and mineral beneficiations, a term they use when minerals get polished and made marketable.
Are you able to give us some statistics on the inflow of investments in recent years?
A: We carried out a joint survey with Bank of Uganda and Uganda National Bureau of Statistics looking at which investments have come in for the period 1991-2012. FDI has grown tremendously to about $ 2 billion by 2008, with over 3500 projects licensed. Power stations have been developed with some support from government and other donors but mainly by FDI; we are doing quite a number of roads etc. In the agriculture sector, we have made a lot of difference. You are aware of the Kaweri Coffee, Mukwano Sunflower and huge ranches among others.
Any government guarantees?
A: Uganda is the only country I know in the world where you can come in with your money and go away with your money without anybody asking you about it, as long as it’s legal money. Between you and your bank, subject to legal taxation, you take away all your money without any restrictions.
Is it a good thing to the economy?
A: I think so because anyone who thinks it’s a bad thing, they need to try other countries where to change even $100, you fill two pages of form. And to take it back is also another hassle. If you have a solid sound investment environment, there will be more money flowing in than flowing out.
Like I said earlier, our survey report shows that more has come in over the years. FDI has been growing steadily, not reducing. It creates jobs for us, brings in new technology with new equipment which we didn’t have before; it brings in new skills, and pays taxes that government can use to do other things.
There has been a lot of concern over the quality of investments UIA approves and yet many of these so called investors get tax holiday.
What is your comment?
A: I don’t think it’s correct to say they get tax holiday because tax holiday has been tightened in only specific sectors and they are being closely monitored by Uganda Revenue Authority (URA). And because their job is to collect taxes, by the time they give you a waiver you have really qualified for it. And there are provisions under which they are guided to give waivers.
My business is to license investors. These investors come with the sort of money and technology we don’t have and they usually come with skilled manpower we don’t have. But they are compelled on the personnel side to train our locals and after five years or so, they must demonstrate to the immigration department why they would still need expatriates and what they have done about training local people.
What are some of the requirements for investing here?
A: Foreigners we license must bring in $100,000 and for locals, it’s a half of that amount.
Downtown in the central business district, you find Chinese operating businesses with far less capital than the stipulated minimum amount of $100,000.
Who is responsible for this?
A: These people get an annual trading license from the local town council, from Kampala Capital City Authority (KCCA) or from somebody.
Additionally, those people have saved some money from abroad. May be they didn’t come with a lot of money but their money is here. And even if they employ one or two drivers, those are jobs created which were not there before.
The truth of the matter is, the people you are referring to are not really the way we describe our investors because those are traders and UIA does not license traders. The people we license are genuine investors who bring in money, equipment and invest in manufacturing systems.
So there is as a lot of difference but I am emphasizing the fact that whether they are traders as we are referring to them or investors, to the economy they are all good – we need them.
The people who are complaining are inefficient traders, and don’t want the competition. I think that there should be open competition so that somebody, whether Chinese or anyone with a good genuine business, are helping the consumers to lower costs. People think we should create a ring fence around them so that they continue working inefficiently and charge our population highly. I don’t agree. I think that people should compete openly, transparently and fairly so that the real consumers get value for their money.
What would you advise to anyone intending to invest here?
A: They need to know their target market and we advise anyone to project in an environmentally friendly way.They should know how many people they are planning to employ because it’s key to us.
What are the requirements for investing here?
- A: These are really simple requirements we need to know:
- you are a genuine entity, meaning you are recognized by the law
- you have the money
- you have a project
- whether you need land from government or you have your own
Is land available from government?
A: Yes, land is available from government if you have a good project.
Is this a good time to invest in Uganda?
A: I think it’s a good time because of several reasons. We are now close to our oil boom which I seehappening in 2-3 years from now. You need to get in the market now rather later so that by the time the benefits of oil start flowing in you are already there. You can’t wait for the oil to take off; you need be on the ground in good time.
The economy is ready to set off in many ways. It has been growing and our population is expanding. People are going to need food, so if you have a passion for agriculture I would encourage anyone to get in and start investing now rather than later.
The traditional food we used to enjoy is now hard to find, why?
Because the market and the consumers have increased. Before we could not take goods to Southern Sudan, now things like eggs, chicken, cabbages etc are going there every day. Fish used to be plenty, now with new markets in Europe, we may need to grow fish, and we can no longer rely on the lake, the natural fishing.
The needs of the oil industry are incredible. They will need people to give them cabbages, Irish potatoes, eggs etc, cleaning services, simple mechanics and so on. So I will advise anyone to go into training people with hands on experience so that by time the oil market demands many of these people, they are already there and still many young people will come to you for training.
Uganda for a long time was not connected on the Marine Cable for ICT. Now we are connected to the three rights from the East African coast. So why not start businesses in say, call centres? In fact, some people might want to process routine accounts. So almost in all fields I see opportunities, so just make your package now. It is the time to do so.
What is UIA doing to attract new investments?
A: Well, we have our road shows. We have developed a catalogue of projects that people can invest in and we are sending these to all our 30 embassies.
We are launching these catalogues ourselves, in Nairobi after we launched it in Uganda. Soon we will go to USA, UK, Denmark, Middle East so that people get to know the projects are available.
We are also using foreigners who have invested here as our goodwill ambassadors. When they hear it from their colleagues, they think it’s more believable.
We have TV talk shows here and even when we go abroad, we give as many interviews as we can.
Even government is taking the right steps to ensure that our macro and economic policies are correct and ensuring peace and stability in the country.
How about the local investors, how are you attracting them?
A: We have developed a small to medium enterprise division within UIA which looks after those numerous investments. We started training them since last year into business and entrepreneur skills, improving productivity in their businesses, improving quality and standards.
For the larger ones, we are trying to cut down bottlenecks so we work for the whole spectrum.
One of the contentions is the elaborate procedures for licensing an investment. Is anything being done about it?
A: We have restructured our front office into a physical one-stop centre.
We will house all offices we think are key to an investor, for example, UIA, Registrar of Companies, Immigration, NEMA. So all these desk officers will be will be connected by computers to their parent organizations. This, we think will quicken the processes. And as I speak now, if you come with the requirements, you will walk away with your license in two days.
by Milly Kalyabe – Editor, Uganda Economy