Uganda 2

Trade instead of Aid!

The Republic of Uganda. A nation with a promising precedent for the future. One set to benefit its economy, and enhance unrealised opportunities. The country is working toward self-sufficiency, stepping away from its current reliance on aid and into the future of trade.

The country is steadily building foundations for rapid economic growth, with new incentives for attracting business.

President Lieutenant General Yoweri Kaguta Museveni came to power in 1986. Since then the government has been rehabilitating the economy through currency reform and leading policy changes, designed to boost goods production and export earnings.

The State of the Nation Address I am delivering today, therefore, gives a broader picture concentrating on the basic priority sectors which are: agriculture, industry, services and ICT.

Museveni has emerged as one of the most significant leaders in the developing world. Under his helm, Uganda has distinguished itself as a model post-conflict reformer – leading the world in tackling HIV/AIDS, poverty, and illiteracy. Uganda, among the fastest growing economies in Africa, has maintained an average growth rate of 6.5 percent over the past ten years; reduced poverty from 56 percent to under 27 percent; decreased the rate of HIV/AIDS infection from 30 percent to six percent in 10 years; increased primary-level education from 40 percent to 99 percent in twelve years; and leads the developing world in empowering women.

There are still stepping stones to realising Uganda’s full potential, and the republic is willingly addressing any trepidations around corruption, infrastructure and access to power. The nation is increasingly working through positive changes to facilitate trade, and with it growth. Its existing wealth of natural assets make for welcome investments in a multitude of sectors.

Uganda is a land of potential with one of the fastest growing economies in East Africa. Whilst clouds of uncertainty covered many regions of the world, Uganda was able to achieve macro-economic stability. Since two thousand seven, the nation has seen steady annual economic growth of around seven percent, even reaching a GDP increase of nine point one per cent in the last quarter of 2013.

We have potential for logistics and transport systems. We have potential for marketing to a very wide market of East Africa – 150 million people, and COMESA, which is another 200 million.
We are a gateway to the Middle East and the markets of Asia. So an investor coming to set up in Uganda and given our open market economy I think it would be very reassuring to the American investor.

The central bank, The Bank of Uganda is welcoming investments from the United States, citing short and long term FDI as key to getting Uganda on track to its full potential.

This is a country with a track record on macroeconomic stability. This is not only in the recent period, we have a track record which is almost over 10 years. We have a track record where inflation on average has been 7 %. We have a very good track record on growth. Growth in this economy has been between 6 and 7 %. We have an open current account. We have an open capital account. Investors can bring in their money and if they feel like leaving, they are free to take out their money.

For investors, a new ‘one stop shop’ service has been created, meaning a business can be established in just three days, benefiting from further incentives such as tax holidays and building land.

We have one stop shop which enables the investors in one room in our office to be able to register their companies, to be able to get tax identification numbers and advice, to be able to get advice on environmental practices and the requirements of the country. And those who have requirements for work permits for the expatriates. They can apply here and they can within a matter of days get their work permits.

Importantly, Uganda is also addressing other areas potentially preventing growth. The long awaited ‘anti-money laundering bill’ was passed in August 2013, and is now awaiting assentation to law.

Laundering has been a significant stumbling block on the path to Uganda’s progression, and this law has been developed to combat concerns around corruption and crime related profits.

The creation of a Financial Intelligence Unit will allow investigation of suspicious activity. Through receiving and analysing reports of suspicious transactions from banks and other institutions, the unit will pass results to relevant authorities for action. This is an enormously positive step towards positioning Uganda as a destination for doing business.

The area that we would like the American private investors to handle in Uganda fast and foremost is in the area of rail connectivity. We are now moving into special cage railways and this railway should not only connect within Uganda. We would like to connect with other regional blocks which are neighboring Uganda, so that there is intra-African trade. So that is a very big area of investment. Secondly, the private sector can come in the area of ICT. This is still open, it is growing and we would like to be connected more effectively with the rest of the world.
Then, also in the area of water transportation, we still have a lot that can be done.

The US State Department has already named Uganda as a ‘Liberal Market for Trade’, and Uganda has a unique opportunity to extend its existing potential. It has previously utilised close trading ties with neighbouring emerging markets, such as South Sudan and the Democratic Republic of Congo, enabling farmers to see profit margins increase.
However, the nation needs to extend its gaze from close neighbours to the markets across Sub-Saharan Africa and beyond.

The trade industry and cooperatives sector in Uganda is quite vibrant because Uganda as a country is the center of the region. And it is based on mainly the regional integration.
America could benefit from this regional integration by engaging blocks, economic blocks. Trading with economic blocks, rather than countries.

Over the last eight years Uganda’s manufacturing output has been expanding by more than ten percent per annum. Prospects lay in virtually all areas, ranging from ceramics, product assembly and forestry, through to textile and cotton, the food and beverage sector and more.
At present, humble maintenance of roads and inadequate transportation infrastructure increases travel time on some interstate trade routes, while rail and water transport only account for around ten percent of trade paths.

Taking things abroad sometimes freight is a challenge. you don’t have direct flights to some destinations. So you find that goods have to go through various, through certain stations before they get to their destination. But we are overcoming some of these challenges.

Although the nation has performed well in the last twenty years, the ‘Uganda Economic Update’ highlights methods to maximise trade opportunity, through unleashing the potential of service exports by eliminating restrictions for example.

Agriculture is arguably the most important sector of Uganda’s economy. Presently employing over 80 percent of the work force, and accounting for around 37 percent of the GDP.

Compliments of a warm climate and regular rainfall, Uganda is enriched with ample fertile land, creating one of the best environments for agricultural production in sub-Saharan Africa.

We’re trying to promote our agricultural commodities. And I’d like to reiterate that coffee is doing very well. I did not mention rice, it’s another area, another prospective area and maize is also another prospective area.
So if someone could open up and start an industry here, they would benefit because he will be sure of the market in the entire region. Because where you have 149 million in the East African community, where you have 449 people in COMESA and now we are working towards further regional integration. COMESA, SADEC, East African community with about 600 million people.

To move past these tribulations, the government is working towards sustainable economic development – concluding that investing in agriculture will achieve higher growth rates, help reduce poverty and improve the overall sector offering.
There are opportunities in fast-growing floriculture through to increasing cotton exports, as well as developing fisheries and forestry, and the country’s natural environment provide good grazing for livestock.
Overall, macro policy framework has been put in place by the government, providing a conductive investment environment. Investors can expect liberalisation, investment guarantees and privatisation, as well as a one-stop centre of advice in the Uganda Investment Authority.

First, most investors are interested in macro-economic stability. The prices here have been good for the past 15 or so years, if not longer. And you have a free liberalized economy. So you don’t have things to worry about. The government is committed to international treaties which ensure that your business or transactions with us is embedded within the international accepted treaties and so on.

Energy
Energy is a key focal point for the Ugandan government. Not only does this liberalised sector hold great potential in recently discovered oil reserves, but it’s also rich in natural energy potential including hydropower, biomass, solar, and geothermal.
One of the major infrastructure bottlenecks to Uganda’s socio-economic growth falls within low access to modern energy, including electricity.

To increase access of electricity services to the population and here our goal is to move from the current 14 % coverage of electricity in the country to 50% coverage by 2022, in 10 years time. So that is a huge opportunity. I would like to see that by 2035 we have universal access to electricity services so therefore that also creates a huge opportunity and in terms of access we are looking at A) opportunities for construction of transmission lines and submission lines, those are engineering procurement and construction opportunities. Which I’m sure the American market would like to have. But also we are looking at increasing access in the rural areas.

Uganda has a diverse range of opportunity to develop this sector. Water networks have considerable hydropower potential, predominantly along the White Nile, while previously less capable industries like solar are increasingly prevalent.

Well the electricity sector can be looked at in 2 aspects. 1 is electricity generation or power generation and the other one is access to electricity services. If we look at the issue of power generation we start with where we want to be. Right now the power, its total capacity is relatively low: 850 MW. I would like to in the next 5-6 years to have at least 3800 MW. That’s a long toll. It’s a challenge but we shall be there. So therefore that creates a very huge opportunity in electricity generation. We have large hydropower plants which we would like to promote for investment.

Uganda’s proven crude oil went from zero in 2010, to 2.5 billion barrels in 2014. And this is just the beginning –other likely areas such as the Hoima Basin are yet to be fully explored, prompting speculation that eventual reserves could rise to around six billion barrels.

We have 6 international well-known companies that are looking to compete to built together the refinery from 60,000 barrels a day to what the market will be able to take. We will start with 30,000 barrels and then grow to 60,000 and if the market is available we will do more. The rest of it will be exported through the pipeline to the coast, the East-African coast in Mombasa or Lamu. All this has been worked out. That is in the gas sector. And of course the petro-chemical industries that will come out because of the refinery. That will be another kick starting the economy.

Kampala, Uganda’s capital city and main centre of commercial activity. Once a dilapidated city, it’s now a transformation of modern buildings, renovation projects and ongoing development prospects.
The Kampala Capital City Authority, or KCCA, was formed in 2010 to harness the challenging task of restoring, maintaining and developing the city to enhance quality of life.

The most recent developments that have taken place in Kampala is the change of the administration of the city which started three years ago. So the entire management and the running of services in the city has changed. And the government put in place a team of technical people to manage the city away from the original set-up where the politically elected leaders had executive powers in the city. And with that we’ve got a new strategic plan for the city, a revamping of service delivery coming up with all sorts of strategies to improve the city.

Kampala is said to be built on seven hills, and has now expanded to include many of the surrounding communities. The city’s already attracted upscale hotels and properties in its Nakasero Hill area, boasting well-known chains like the Sheraton, along with attractions including the Uganda Museum, National Theatre and several casinos.

Our vision is to make Kampala an investment destination, not just a transit point where people have to go through Kampala because they have to go through Kampala to other parts of Uganda or other parts of East Africa. We want people to want … investors to desire to come to Kampala, to desire to bring their money into Kampala, to desire to raise their families in Kampala.

A need for further infrastructure projects remains. 2013 saw a slump in the market with interest rates rising from 16 to 30per cent, leading to a drop in property prices. Experts are predicting a rise in the market as business and trade improves.

There are a lot of opportunities in Uganda for real estate, development and in the construction industry. There is a very big need for accommodation, housing estates, office complexes. Within the city there are a lot of opportunities for building schools, health centers and other public facilities; stadia, markets, slum redevelopment. All these are areas that are available for investors. We want to improve the slums and upgrade them to decent facilities. So we are looking out for investors who come and develop the slums in partnership with the city or the government of Uganda.

Along with real estate, water infrastructure has vastly improved. The National Water and Sewerage Corporation has significantly expanded coverage from reaching 48 percent of the population to 78, whilst reducing water losses from 65 to 34 percent. They’re now seeking international partners and investors to produce water treatment chemicals and materials within the country.

The investment potentials in the water sector are quite many. We are still serving 78% of our customers and therefore we need investors to come in and invest in water production under the public-private partnership. We also need investors to come and invest in production of pipes. Because those are key inputs we need in our work. We need investors to come and invest in production of chemicals because chemicals are in very high demand so we need investors in here. We also need investors to come and manage some schemes.

For those who invest in Uganda, it’s known to be a safe and friendly African nation. But for additional needs, businesses can rest assured that companies like Saracen provide a full range of security services and products. However if you ask a Ugandan if their country is safe, you’ll likely hear the reply ‘Why are you fearing – this is Uganda!’

For magnificence, for variety of form and colour, for profusion of brilliant life… Uganda is truly the pearl of Africa’. These famous words by Sir Winston Churchill still resonate through Uganda’s many tourist offerings today.

For magnificence, for variety of form and colour, for profusion of brilliant life… Uganda is truly the pearl of Africa’. These famous words by Sir Winston Churchill still resonate through Uganda’s many tourist offerings today.

This might be through discovering dense misty forests, sprawling savannas or snow-capped mountains. Whatever activity you pursue, this dazzling nation is widely regarded as one of Africa’s friendliest locations, arguably representing the best Africa has to offer.

Rare mountain gorillas, unbeatable biodiversity, and ten unrivalled national parks are just some of the must-see sights ensconced in Uganda. Impressive parks such as Murchison Falls are home to elephants, hippos and buffalo, while wildcats roam in the magnificent Queen Elizabeth Park. To complete the ‘big five’ sightings, the elusive white rhino can even be found at the Ziwa Sanctuayy. As described by The Lonely Planet – Uganda has all of the animals, minus the crowds.

In terms of tourism Uganda could offer lots of different activities. But our most important package is ecotourism where we offer nature-based tourism. And of course we have got other aspects of tourism, like cultural tourism, water sports tourism, religious tourism and also we have experimental or adventurous tourism.

Uganda is a relative newcomer to the international tourist scene, and has compelling reasons to visit – for both leisure seekers and investors. It’s one of the World Bank’s top ten nations for tourism potential in Sub-Saharan Africa, and sector resources are less commercialized than its counterparts.

Actually the challenges are priority we are tackling one by one. But the biggest challenge right now is the marketing of the tourism facilities that we have.
Kenya and Tanzania, even Rwanda have been able to export themselves. They have been able to market widely. We haven’t done that. Of course that comes to resources available for that. So we are looking at how to maximize the little resources that we have. But we also lobby. We also invite people to appreciate tourism so that we can have more exposure in the world.

Tourism is a top foreign exchange earner for the nation, bringing potential for economic growth, employment and poverty reduction. There are plenty of investment opportunities, particularly in relation to the country’s extensive natural attractions.

We are looking at tourism as becoming number one foreign exchange. At the moment we are contributing 9% of the GDP, which is quite good. And we consider potential so that we can actually achieve what we want to be.

Uganda’s renewed focus on attracting more attention to its noteworthy tourist offerings is planning on giving Uganda the spotlight it deserves.

This nation is steadily working towards its overall goal of trade instead of aid, creating a widespread offering of potential and access for business, investment and tourism while addressing previous obstacles to realise it. It’s a country with promise, equipped with an awe-inspiring landscape and a naturally welcoming disposition.

My message to the people of America if you never knew where the Garden of Eden got lost, it is Uganda. Come and rediscover the Garden of Eden.

Uganda. The Pearl of Africa ready and waiting to shine.

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