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Uganda “the most investment friendly economy in the region”

Interview - May 19, 2014
In an interview with United World, Ugandan Ambassador to the US Oliver Wonekha talks about Uganda’s rapid economic growth, its attractive investment incentives and the country’s “very good” relations with the United States
OLIVER WONEKHA, UGANDAN AMBASSADOR TO THE US AND BARACK OBAMA
OLIVER WONEKHA | UGANDAN AMBASSADOR TO THE US
Over the last 3 years, Uganda has enjoyed robust growth spurred by investments in infrastructure, energy, agriculture and services. Kindly give us your assessment of the rapid growth of the economy, and some insight about future trends. 
 
Uganda is an agricultural country, which aspires for industrialization in various sectors—not just agriculture. At the moment, a lot of effort is being put into the development of oil and gas (O&G). We are looking for companies to set up refineries. We are laying out the pipelines in preparation for those who are interested in refining. 
 
Of course, industrialization brings with it challenges in energy (particularly, when you talk about consistent and sufficient electricity). At present only about 6% of the population has access to electricity. Several initiatives are being implemented to address this predicament through rural electrification. Power is a priority sector for government. 
 
When we talk about infrastructure, we are not just referring to roads. There is a big project in the area of rail. There is an agreement between Kenya, Rwanda and Uganda in the area of connectivity, by roads, rail, and ICT. We expect that all these investments in infrastructure should propel our economic  growth and better the living conditions of our peoples. 
 
One of the things that Uganda has done to make it grow so rapidly is to improve its policy framework. The country has very sound macroeconomic policies. The liberalization of the economy has been followed by a stronger emphasis on private sector led growth and the expansion of markets through regional integration. 
 
The good business climate has attracted a lot of investments.  Uganda has very attractive investment incentives, and has been described as the most investment friendly economy in the region. Versatile reforms of the economy and other forms of liberalization (such as the foreign exchange market and the development of the stock markets) have also contributed to the overall growth of Uganda’s economy. 
 
Efforts towards regional integration have attracted the attention of the international community. 
 
Yes, that is true. Here in the US, for example, we are happy that our relations continue to be good. America’s focus on the East African Community (EAC) gives us hope. We are positive that Uganda will be a land-linked country instead of a landlocked country, thanks to the EAC projects and programs. It will allow Uganda to access regional and external markets more easily.  
 
Growth has a lot to do with human capital. Uganda has increased its focus on human resources development (HRD), health, education and poverty alleviation.  What can you tell us about the programs that have been put in place in these areas? What sort of challenges have you had to overcome?
 
Education and Health services takes up a huge portion of our budget. In the area of education, the government of Uganda introduced Universal Primary Education (UPE) and the Universal Secondary Education (USE) programs. For over fifteen years or so, government has been sponsoring  per year, some 4000 students enrolled in public universities. There has also been a lot of government support to private educational institutions. 
 
Besides, the Government of Uganda is working with the international community; particularly, in the area of IT and education. We have sent students abroad for training in professional courses such as IT, accounting etc. 
 
In the area of education we still face the challenge of skills training and development—particularly vocational education. We are still in the process of trying to get more institutions that offer vocational courses—programs that adapt to the changes in industrialization. We have got a lot of degree holders who lack skills. Every year, universities in Uganda churn out about 50,000 graduates, many of whom remain unemployed because of lack of skills. We are therefore in dire need for the equipping of our youth with trade skills. This, at the moment,  remains a big challenge.     
 
Uganda believes that a healthy population is a wealthy population. The provision of health services to the population continues to feature strongly in our HRD programs. Let me mention here our appreciation and gratitude to the uS government and the American people for the role you have and continue to play in the health sector in general but more specifically, in addressing the scourge of HIV/AIDS. 
 
Child and Maternal health is another challenge that calls for concerted effort but where progress continues to be made. The government of Uganda with the assistance from development  partners have done a commendable job in the area of provision of clean potable water and sanitation facilities to the population as a means to scaling down water-borne diseases.
 
Today, Uganda has achieved up-to 65% countrywide clean water coverage.   
 
The government of Uganda has devoted a lot of effort in the procurement, distribution and supervision of medication. Furthermore, there has been a surge in the construction of health units so as to make them more accessible to the population. Whereas, the provision of drugs to the population still remains a challenge, a lot has been done to put in place the required infrastructure. 
 
What kind of impact does the oil wealth (OW) have on the economy (specifically, in the area of infrastructure)? Is there a policy to reinvest OW into the different sectors?
 
Yes, there is. The government of Uganda aims to use the wealth from O&G for infrastructure development. The infrastructure sector  covers a number of development priority areas, including road; rail; ICT; power generation, transmission, and distribution;   development and transformation of agricultural sector through industrialization and value addition etc.
Part of the Oil wealth will be saved for Uganda’s future generations. 
 
US President  Barack Obama launched the Power Africa Initiative (PAI) and Trade Africa Initiative (TAI) to further strengthen ties between the American and African continents. Which areas present opportunities for US investments?

There are several areas in Uganda ready for US investment; particularly, in infrastructure development (road, rail and water transport), Oil & Gas exploration extraction, refinery, pipilines construction and operation and affiliate services; electricity generation, transmission and distribution from hydropower, biomass, wind, thermal sources; development of ICT and other Services sector, and so on.
 
 You may wish to note that the economy of Uganda is undergoing transformation. Some years back, the agricultural sector used to dominate Uganda’s economy generating up-to 85%of the country’s GDP. This has over time shifted towards the services sector. Today, agriculture makes up about 45% of the economy’s GDP and the rest is generated by the services.. 
 
Uganda being one of the leading countries on the continent with a robust  economic growth, and undergoing quantum leaps in industrialization and transformation in infrastructure, ICT and services, I believe that the US private sector should take advantage of the opportunity available. The major problems that hinder the American private sector from taking advantage is that of perception and unfounded fears.
 
The perception that you will lose your money when you invest in Africa is completely outdated. Today, investments in Africa have the highest rates of return. Secondly, the perception that the markets are small is unfounded. Uganda, today, belongs to two regional economic blocks notably the East African Community with a combined population of nearly 150 Million people; and COMESA with a combined population of some 300 Million people. 
 
Soon, the African continent will become a Free Trade Area with a combined population of nearly one billion people.
 
 The truth is, when you invest in Uganda, you open yourself up to an even larger market. 
 
Tourism is another sector ready for US investments. Uganda is a beautiful country, with good climate all the year round, a welcoming English speaking population with diverse cultures, and with plenty of wildlife and flora and fauna. Uganda offers a myriad of unique tourist products and has largely untapped potential in tourism, ranging from infrastructure such as hotels and lodges, to transportation, and hospitality industry.
 
 We believe that with more investments in the industry, tourism will soon become the leading sources of foreign exchange earnings. 
 
The mining sector is another area that I would like to recommend because it is  ready for foreign direct investment. Uganda has a lot of untapped mineral deposits such as phosphate, iron ore, gold, diamond etc. There are opportunities for gold digging and adding value through refining, lapidary (i.e., gemstone cutting and polishing), and so on. The US private sector operators can take advantage to invest in this sector, too. 
 
In the last year, most of the East African investments have been directed to Uganda. What makes the country a good investment destination?
 
I must say first and foremost that the fundamental change and the able political leadership and vision provided by President Yoweri Kaguta Museveni, and the ruling National Resistance Movement, is the most important factor that has ensured Uganda’s stability and development. There can be no development without peace, security, stability and predictability.
 
Secondly, Uganda is a country that has been lauded by all the international financial institutions for having carried our far reaching economic reforms. The economy is private sector led with sound macro-economic policy framework, a liberalized economy, a single digit inflation rate with tight monetary policy and fiscal discipline on set benchmarks, a liberalized foreign exchange market without restrictions on repatriation of capital and accrued profits, and above all a stable political situation and an expanded regional market through regional integration and partnerships. 
 
Thirdly, the regular review and improvements on the policy framework, as well as the complete liberalization of the market, and strict application of the EAC Treaty provisions, have enhanced the mobility people, goods and capital in the region. The coming into force of the East African Customs Union and the Common Market Protocols have resulted into more than double the volume of trade within the region. This trend will no doubt be enhanced with the recent signing of the Monetary Union Protocol. 
 
Finally, Uganda is a country endowed with a lot of wealth. It has a very rich and fertile arable land, and many minerals. The good climate all the year round and a hardworking population, trained but cheap labour and developed infrastructure have all contributed to this robust economic growth and development. 
 
As for safety, Uganda is a very secure country for foreign direct investments. The country is known for its judicial independence and freedom of legal process and redress. Uganda is a member of internationally recognized institutions for the settlement of commercial disputes such as MIGA, and this reassures and guarantees the security of foreign investments. 
 
Because Uganda is a part of the Intergovernmental Authority on Development (IGAD) in Eastern Africa, the Common Market for Eastern and Southern Africa (COMESA), and the EAC, it has a large regional market. Uganda is also working on being a part of the African Union Free Trade Area (AU/FTA), which will be an even bigger market.   
 
Thanks to the East African Submarine System (EASSy), Uganda now has a very efficient ICT infrastructure. 
 
In the area of aviation, several international airlines have direct flights into and out of Uganda. They include, our national carrier Air Uganda, Kenya Airways, Ethiopian Airlines, the Royal Dutch Airlines (KLM), Qatar Airlines (QA), British Airways (BA), Emirates Airways, South African Airways, Brussels Airlines, Turkish Airlines, Egypt Air to mention but those few. 
 
How would you describe Uganda’s relationships within the region?
 
Uganda’s foreign policy towards its neighbours is that of good neighbourliness, peace, security and regional integration. Uganda  desires to live at peace with all its neighbours and to forge together efforts to develop our region for the betterment of our populations.. Our national Anthem says so.
 
Let me emphasize that, our President, H.E. Yoweri Museveni, is very passionate about regional peace and security. Geographically, Uganda is located in the interior of the continent, and Uganda’s goal is to be land-linked and not landlocked. As such, our government takes a keen interest in regional peace and security. 
 
One of the foreign policy pillars of Uganda is Pan-Africanism. This is the reason our forces are part of the international and regional efforts to restore peace in Somalia (AMISOM), the AU initiative to restore peace in the Central African Republic, and we have been actively involved in efforts to restore lasting peace and stability in the Democratic Republic of Congo. Uganda is also part of the IGAD initiative to restore peace in South Sudan.
 
We are very aware that insecurity is contagious and we have been home to several thousands of refugees from the neighbouring countries. It is therefore in Uganda’s interest that all neighbours are at peace, because insecurity in any part of the region affects our own security.
 
At the national level Uganda is safe and secure, and is conducive for business.
 
 EAC leaders signed a protocol late last year to establish a regional monetary union for Kenya, Uganda, Tanzania, Rwanda and Burundi. The East African Community common customs union has been in operation since 2010, and there are plans to establish a regional central bank and a common currency. Can you elaborate on this?
 
The recent signing of the EAC monetary union protocol is the natural outcome of our aspirations towards integration. It comes with the implementation of the EAC’s common market protocol, the customs union, and will soon be followed by the establishment of the EAC Central Bank and common currency.. All these are meant to eliminate trade barriers, deepen regional  integration and promote the free movement of people, capital, goods, and services within the region. 
 
The drive for harmonization within the region has led to the establishment of  legal frameworks and institutions in order to make East Africa a truly regional bloc in the areas of services, trade, markets, and so on. The East African Legislative Assembly (EALA), as well as the East African Court of Justice (EACJ) have been established to foster integration.. 
 
In to have a solid integration, the economic integration process will soon be followed by the establishment of the East African Federation
 
The Heads of State of the region and the population of East Africa are sparing no efforts to revive the EAC, to the level before the “first” community was  dissolved in 1977, merely10 years after it was formed. History tells us that East Africa’s integration started way back before independence. In 1948, we saw the creation of the East African Railways and Harbors Corporation (EAR&H), the East Africa Posts and Telecommunications (EAPTs and the East African Common Services Organisation. 
 
What are your thoughts on possible US-EAC trade partnerships?
 
East African countries have already been trading with the USA for a long time. In 2000 this trade was formalized by the signing of the AGOA Protocol that gives non-reciprocal quota and tax free entry into the US market of a wide range of products from the East African countries. 
 
At the regional level, the EAC and the US signed a Trade and Investment Framework Agreement (TIFA) in 2008. There are plans to create, in future, a Free trade Area between the EAC and the USA, through the conclusion of a treaty, but this is still work in progress.
 
During the visit of President Obama to Africa in June 2013, he announced the Trade Africa Initiative and Power Africa Initiative, and chose East Africa to take the lead in implementing the trade initiative, before it is rolled out to the rest of the continent. 
 
We in East Africa wholeheartedly welcome this initiative to use the East African region as a platform for TAI. We also note with satisfaction that the Power Africa Initiative has some programmes in East Africa. Our request is that because of the acute power deficits in the region, particularly, in Uganda, we welcome American investments in the generation, transmission and distribution of electric power.   
 
Have you benefitted from The African Growth and Opportunity Act Protocol?
 
Yes, We have benefitted from the African Growth and Opportunity Act (AGOA), but to a very small degree. Uganda did export some products under this protocol but infrastructure deficits and lack of competitiveness has made it difficult for us to fully take advantage of the protocol. Under AGOA some jobs opportunities have been created. My plea is for more US investments to be made in Uganda so that we can take full advantage of this arrangement. There is still great need for capacity building and trade facilitation before the protocol can be truly meaningful to many African countries, including Uganda.
 
We are also looking forward to the seamless reauthorization of the AGOA Protocol beyond the 2015 expiry date, and for the improvement of the rules of origin and other stringent US regulatory frameworks that stifle the smooth functioning of the protocol. 
 
How would you assess the bilateral relations between the US and Uganda?
 
Uganda’s bilateral relations with the US are very good. The United States of America is still the leading development partner to Uganda. I think the strongest point of our cooperation is in the area of peace and security, especially, the fight against terrorism in the region. 
 
We are very grateful for all the assistance that the USA has extended to Uganda in the hunt for the LRA and the renegade forces of Joseph Kony. We are equally grateful for the logistic, technical and financial assistance the USA has extended to Uganda to build its peace keeping capability and the capacity to fight terrorism.
 
The USA, through its development agency, USAID, has also extended tremendous assistance to Uganda in the area of health, especially, in the fight against HIV/AIDS epidemic. A lot of lives have been saved through the provision of anti-retrovirals to HIV/AIDS patients.
 
Education and training is another key area of cooperation. Many Ugandan professionals and students have benefitted from scholarships and educational exchange programs.  
 
We are also grateful that the USA is sponsoring the Feed the Future programmes, food security, and, of late, tourism development.
 
We have also received support from American NGOs in various fields. We cannot forget to mention the formidable work that has been rendered by the American Peace Corps in the various grass-root communities. 
 
The World Tourism Organization (WTO) sees tourism as a new sector that could tremendously transform the lives of the people of Uganda, and could promote promotes conservation and local and regional bio-diversity. Tourism allows development to occur beyond the business capitals.  What is your comment on this and what makes Uganda a great place to visit in East Africa?
 
There are so many reasons why you should go to Uganda. By whatever means you arrive in Uganda you will be surprised by the lustrous greenery of the country, some of which are undisturbed jungles and tropical forests. If you fly into Uganda, you will land into this greenery. The first thing you will see is Lake Victoria, the 2nd largest freshwater lake in the world. 
 
Uganda has a lot of unique tourist products to offer to our visitors, including: beautiful lakes, lush forests, rich wildlife such as  the famed tree climbing lions, and the only area where you can still see habituated families of mountain gorillas. Uganda is the source of the Nile River. 
 
The country has the largest number of bird species in the whole world, many of which are permanently resident on account of the good weather all the year round, and bird watching is a major tourist attraction.
 
Uganda has warm and hospitable people, diverse vibrant culture. The country’s over 50 ethnic groups—each has something unique to offer in terms of dance drama, food, music, etc.
 
It has a lot to offer in terms of sports and adventure. The country is famous for its white water rafting. Most people know about “the Big Five”,  in Uganda, we talk of “the Big Eight”. 
 
 Uganda is a peaceful, safe and secure place and visitors can freely move around the country. It has something to offer for everyone—backpackers, business travelers and those who seek leisure. I invite you to visit Uganda so that you can tell your own story. I am sure that you will come back with a lifetime memory that you will pass over to the next generation. 
 
When the late British prime Minister visited Uganda in the 1896 he gave it the name, “The Pearl of Africa” owing to its beauty and diversity.
 
What message would you like to convey to investors looking to establish a footprint in East Africa?
 
Uganda welcomes all investors and tourists. Our country is safe, offers multiple opportunities and has a robust growing  economy that is open for business. It has an investor-friendly environment. It has the necessary legislative framework to protect your investments, as well as the pool of skilled  but cheap labor to support your endeavors. 
 
Today, Uganda is among those that offer high returns on investment (ROI), with a projected 6% to 7% growth, but is projected to reach 10% of GDP growth in the near future. The country is today the youngest in the world in terms of demographic growth and has a growing middle class. 
 
Uganda is set to become a middle income country by 2017, and by 2050 to become a first world country. There is nothing to regret. Come one, come all. 
 
What message would you like to say to the readers of USA Today?
 
Come to Uganda and see how things are for yourselves, discover the opportunities and choose where you can come in.

You will be amazed by what you see and you will never regret your visit to Uganda, “The Pearl of Africa” 

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