Country Profile UGANDA
About Uganda
Uganda, officially the Republic of Uganda, is a landlocked country in East Africa. It is in the African Great Lakes region and lies within the Nile basin. The climate is tropical to equatorial and generally rainy with two dry seasons.
Endowed with significant natural resources, ample fertile land, and mineral deposits, it is thought that Uganda could feed all of Africa if it were commercially farmed. Gold and coffee are the main income generating exports.
Uganda is a presidential republic, in which the President is both the head of state and head of government. There is a multi-party system based on a democratic parliamentary system with universal suffrage for all citizens over 18 years of age. Yoweri Museveni is the current president and has held this post since 1986. Despite this, Uganda has great potential and appears poised for rapid economic growth and development. Known as the “Pearl of Africa,” it has a number of eco-tourist attractions, including Lake Victoria and several wildlife reserves. Despite increasing numbers of tourists, the sites remain largely underdeveloped, opening the way for investment opportunities.
Economy
Overview
Despite chronic political instability, erratic economic management, the country has experienced consistent economic growth since the 1990s. Real GDP growth averaged 6.7% p.a. during 1990–2015, and real GDP per Capita grew at 3.3%. The Ugandan economy has experienced economic transformation: agriculture, which accounted for 56% of the economy in 1986, has been surpassed by the services sector at 55% of the economy in 2015.
Trade
- Uganda has an open trade regime and is a member of the World Trade Organization, East African Community (EAC) and Common Market for Eastern and Southern Africa (COMESA). Furthermore, Uganda is a member of the EPA, which creates a free trade area between the EAC and the EU and enjoys preferential access to a number of foreign markets. It benefits from the African Growth and Opportunity Act (AGOA) with respect to the US market and the Everything But Arms (EBA) initiative with respect to the EU market. There are similar advantages vis-à-vis the markets of Canada, Japan and other countries
- The top exports of Uganda are Gold ($707M), Coffee ($391M), Raw Tobacco ($95.5M), Tea ($81.9M) and Cocoa Beans ($74.6M). Its top imports are Refined Petroleum ($683M), Packaged Medicaments ($246M), Palm Oil ($195M), Cars ($130M) and Delivery trucks ($113M). The top export destinations are the United Arab Emirates, Kenya, Rwanda, South Sudan and DRC. The import origins are China, India, Kenya, the United Arab Emirates and Japan.
Source: UNCTAD
Investment Climate
Overview
The Government of Uganda maintains a generally favourable attitude towards foreign investment. Policies, laws, and regulations are generally favourable towards foreign investors, although poorly enforced legislation, bureaucratic delays, and corruption hamper trade development. Ugandan law allows for 100% foreign-owned businesses and foreigners are allowed to partner with Ugandans without restrictions. The GOU offers incentives for industrial investments including: a 75% import duty reduction on factory equipment, depreciating start-up costs over four years, and a 100% tax deduction on research and training costs as well as mineral exploration costs.
Legal Framework
Uganda’s legal and regulatory systems are broadly consistent with international standards even though bureaucratic hurdles severely affect efficiency. The Uganda Investment Authority (UIA) facilitates granting licenses to foreign investors. The Authority performs a range of functions including promoting, facilitating, and supervising investments in Uganda.
The Uganda Investment Code Act prevents foreigners from investing in crop or animal production, however, they can create a Ugandan-based firm to invest in crops and animal production — a practice widely used in large-scale farms. In addition, foreign investors engaging in certain sectors (notably wholesale and retail commerce, personal services, public relations, car hire services, operation of taxis, bakeries, confectioneries and food processing for the Ugandan market only, as well as postal services and professional services) are ineligible for incentives granted to investors in other business undertakings.
There are no general restrictions imposed on foreign investors. Licensing from the UIA requires a commitment to invest over $100,000 over three years. Most foreign investors establish themselves as limited liability companies. Ugandan law also permits foreign investors to acquire domestic enterprises or establish green field investments. The 2010 Companies Act allows for the creation of single-person companies, permits the registration of companies incorporated outside of Uganda, and regulates share capital allotments and transfers.
Source: https://www.state.gov/
Why Invest In Uganda?
- Safe, peaceful and attractive location for expatriates
- Continously ranked as the most entrepreneurial city in the world with people ranking among the most welcoming in the world.
- Uganda Investment Authority has a One Stop Centre (OSC) for business registration, licensing and providing support and oversight throughout the investment process.
- Growing middle income class population with reasonable expendable income.
- Trainable and fast adaptable workforce from over 30 universities.
- Member of the Common Market for Eastern and Southern Africa (COMESA), a region with over 400million people in 19 countries.
- Stable location next to mineral-rich eastern Democratic Republic of the Congo
Key Sectors
Sector I: Agriculture & Agro-processing
Uganda has the unrivalled potential to be the food basket of the East African Community, the Great Lakes regions, and the capacity to export processed food to the COMESA economic bloc if more investment is targeted at processing agro-products. Uganda is a leading producer of coffee, bananas, tea, cotton, tobacco and cereals. Opportunities include commercial farming, value addition, manufacture of inputs, supply of agricultural machinery and the establishment of cold storage facilities. Public Private Partnerships investment opportunities exist in the commercial production of cereals (maize and rice) and beans.
Sector II: Minerals & Extraction
Uganda has large under-exploited mineral deposits of gold, oil, high-grade tin, tungsten, salt, cobalt, iron-ore, Uranium and other rare earth elements. There are also significant quantities of clay and gypsum. Gold occurs in many areas of the country. The demand for iron and steel is rising due to the need to develop the infrastructure projects in energy, oil and gas, and the railways.
Uganda provides special incentives to the mining sector with some capital expenditures being written off in full.
Uhusiano Capital
Established in May 2016, Uhusiano Capital addresses the capital requirement needs for African-based projects and opportunities. The founding principle of Uhusiano Capital is the fundamental belief that commercial capital and impact capital can come together. This interaction can generate sustainable long-term projects in Africa for which both impact capital and commercial capital can be catalysts.
Disclaimer
The contents of this document are communicated by, and the property of, Uhusiano Capital Limited. Uhusiano Capital Limited is an appointed representative of Thornbridge Investment Management LLP which is authorised and regulated by the Financial Conduct Authority (“FCA”). The information and opinions contained in this document are subject to updating and verification and may be subject to amendment. No representation, warranty, or undertaking, express or limited, is given as to the accuracy or completeness of the information or opinions contained in this document by Uhusiano Capital Limited or its directors. No liability is accepted by such persons for the accuracy or completeness of any information or opinions. As such, no reliance may be placed for any purpose on the information and opinions contained in this document. The information contained in this document is strictly confidential. The value of investments and any income generated may go down as well as up and is not guaranteed. Past performance is not necessarily a guide to future performance.
