Uganda Investment Up-date 2010 - Minister of Finance

Let me start by wishing you all a Happy New Year and pray that 2011 will be a fruitful year for all of us.

As we have done in the past years, the Uganda Investment Authority brings you the planned investment figures for the just concluded calendar year while looking at the projected figures of expected foreign direct investment in the New Year.

As you are all aware, 2010 was a rather challenging, on both the political and socio-economic fronts; excitement over the first football World Cup on the African Continent ; terrorist attacks and threats on the lives of innocent Ugandans; Uganda’s double gold medals at the Commonwealth games; political rallies across the Country in preparation for the upcoming elections, among others.

Overall, however, the general investment climate was very good. The Uganda Investment Authority licensed a total of three hundred and twenty three (323) projects between January and December 2010, with a planned investment figure of about US$ 1,673,032,595 (approx. US$ 1.7 billion), and with 149,659 planned jobs.

This implies a 3% rise in planned investments, and a 36% increment in planned jobs compared to the same period the previous year – 2009, where planned investments and planned employment were estimated at US$ 1,573,115,243 (approx.US$ 1.6 billion), and 70,289 respectively.

Manufacturing (119 projects), Financial Services (63 projects) and Agriculture (50 projects) took centre stage, accounting for 20%, 18% and 40% of the planned investments respectively.

Uganda Investment Authority’s strategic plan is to create jobs for Ugandans in line with the National Development Strategy, and as such, 149,659 jobs shall be created from the licensed projects.

Although a recent UNDP Study on productivity negatively portrayed Ugandans as less productive than Kenyans and Tanzanians, a UIA, BOU and UBOS Study revealed that 96.4% of the workers in 1000 companies surveyed are Ugandan.

Although Uganda has the most educated people in the region, we lack the technical industrial experience as our industries were destroyed in the 1970s up to about 1989 when the present Government liberalized the economy, improved the investment climate and put UIA in place as a one-stop shop to promote and facilitate investors.

Both domestic and foreign investors continue to set up in Uganda as can be seen by the FDI trends – from US$ 82 million in 2000, to US$ 799 million in 2009.

As in the past, the 2010 results show that Ugandans continue to be the largest investors in their own country, breaking the myth that foreign companies are taking up all the major investments.

We are seeing more Ugandans take over from expatriates as Managers and Chief Executive Officers of large Multi-National Companies such as Shell, MTN, Crown Beverages, among others; as production managers, HR Managers, Accountants or Auditors, especially, given that it is preferable for companies to hire local workers who are more cost-effective.

Additionally, out of the 323 projects licensed, 143 are Ugandan owned companies, accounting for 59% of the total planned investments registered in 2010. India, with 47 projects and China with 33 projects come a close second and third, in terms of projects licensed.

With regards to levels of planned investments, Uganda tops with US$ 1.1 billion worth of planned investments, followed by India with US$ 173 million and the United Kingdom with US$ 76 million. The Netherlands, China and Kenya also registered significant investments in the Manufacturing, Construction and Transport and Communications.

This positive trend is a sign that investors, both local and foreign have confidence in the fact that the Ugandan economy is stable and thus, have no cause to worry despite the current developments on the political scene.

We, as Government would like to assure all current and would-be investors that we will continue business as usual, prior to and after the elections on February 18 2011, because we are assured that elections will be peaceful throughout the country.

Given the trend we are now experiencing, with the rising demand for investment in petroleum, mining and agricultural industries, we are projecting even greater foreign direct investment in 2011.

I thank you.

Hon. Prof. Ephraim Kamuntu