Unpacking Uganda’s investment landscape

Industries in Uganda have been grappling with the triple blow of the COVID-19 pandemic, low commodity prices, and locust invasion. To shed light on the investment landscape in Uganda in the face of these challenges, CNBC Africa spoke with Rwakakamba Morrison, Chairman of Uganda Investment Authority. The country faced a triple challenge with locust invasion affecting the agriculture sector, heavy rains leading to floods disrupting supply chains, and the global COVID-19 pandemic. However, under the leadership of President Museveni, Uganda has managed to recover, with over 90% of COVID-19 cases making a full recovery. The country has also made progress in vaccinations, with hopes of normalizing the investment climate. According to Finance Minister Matia Kasaija, Uganda's economy is expected to grow at 4.3% in the 2021-2022 financial year, reaching 6% in the medium term and 9% in the long term. There has been a decline in Foreign Direct Investments (FDI) due to the pandemic, travel restrictions, and disruptions in global supply chains, but the agricultural sector has shown resilience. Agricultural exports accounted for 57% of total export receipts. Despite the challenges, Uganda saw an increase in exports in USD value in 2020 compared to the previous year, indicating the significance of the agriculture sector in FDI. Local investments have also surged by 27%, with investors focusing on agriculture, manufacturing, and PPE production. Many factories have shifted their focus to producing essential supplies in response to the pandemic. The government is actively supporting SMEs by providing financing options to help them recover and thrive. Uganda is also capitalizing on its gold exports, with initiatives to improve production and support farmers. Investments in the oil and gas sector are expected to boost the economy, creating opportunities in related industries such as real estate and construction. Looking ahead, Uganda Investment Authority plans to establish 25 industrial parks to accommodate factories and create jobs. The focus is on reducing costs and providing essential infrastructure to attract investors. The country is committed to transparent procurement processes to ensure timely completion of infrastructure projects, with partnerships with the private sector and defense forces. The outlook for 2021 is optimistic, with expectations of recovery in FDI and economic growth as global vaccinations progress. Uganda aims to enhance its business environment to attract more investors and drive economic development.