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Blessed with huge natural resources

Article - August 4, 2014
Unexplored horizons for being discovered. Uganda is blessed with abundant natural resources, including fertile soils, regular rainfall, deposits of copper, gold, and other minerals, and recently discovered oil. Agriculture is the most important sector of the economy, employing over 80% of the workforce
TEA PLANTATIONS IN TORO KINGDOM
If you’re a coffee drinker chances are you may have sampled some Uganda Robusta, but not so well known is the fact that Uganda grows some of the most delicious pineapples in the world, a commodity that it hopes to turn into sweet currency.

“Ugandan pineapples are sweet and fresh with the highest concentration of Vitamin C, you do not need supplements,” says Amelia Anne Kyambadde, Minister of Trade, Industry and Cooperatives – a post she’s held since 2011.

Pineapples and Ugandan agricultural business are among the litany of areas that the country is looking to develop to keep economic growth in step with its population growth.

“Uganda has a population of 36.5 million as of 2012 and a population growth of 3.4%. Our GDP is between $25 to $26 billion, with a growth rate of up to 7%,” says Ms. Kyambadde. “So we are working very hard to make sure that we correlate the population growth with infrastructure development.”

Already one of the fastest growing economies in the world, Uganda – once referred to as the “Pearl of Africa” by Sir Winston Churchill – has a set of unique attributes that offers a wealth of potential investment opportunities. The country is replete with natural resources, including fertile soils, abundant rainfall, sizeable deposits of copper, cobalt and other minerals, untapped oil reserves, and cheap land.

“We would like to cover the entire value chain of some of our commodities, especially in agriculture, but also in mining, tourism, industry and energy”

Amelia Anne Kyambadde, Minister of Trade, Industry
and Cooperative.

----------------------------------

“We are your passport to the marketplace”

Dr. Ben Manyindo,
Executive Director of the UNBS
“We used to give out the land freely, but that was controversial,” says Ms. Kyambadde.

“Now we offer it on an equity basis. We have industrial parks, which are a potential target for investment. You pay a certain fee, which is really minimal; it is just a token, a commitment fee that is deposited with the Uganda Investment Authority before they process your lease for the 49 years. The chunk of land you get is a minimum of five acres.”

Bargain basement prices for space are just some of the incentives that Uganda is offering to lure some much needed dollars to help key sectors like agriculture, energy and manufacturing.

“Investors can expect a well regulated highly liberalized economy where they can repatriate their funds as they wish,” says Ms. Kyambadde. They get to enjoy a number of incentives, for example they can bring in machinery without paying taxes. Likewise they are exempt from corporation taxes for 10 years. Unlike other administrations in the region, the Ugandan government does not require a 50% ownership.”

But the business environment is not all rosy. Instability in South Sudan is a risk for the Ugandan economy, with Sudanese refugees seeking to escape violent conflicts in northern Uganda. Unreliable power, high energy costs, inadequate transportation, infrastructure and corruption are also factors in inhibiting economic development and investor confidence. Some of these challenges Ms. Kyambadde and her ministry are meeting head on.

“In a bid to fight corruption, we have had people audited and taken to court. Disputes are taken to the commercial court and the Inspector General of Government. We have representatives in every office who monitor operations. Not everybody is keen about it. But I like it because it increases accountability and helps end corruption,” she affirms.

In recent years, Uganda has increased exports to the United States from $26 million in 2004, to $45.8 million in 2011 and $47 million in 2013. Conversely, the country has imported more than $110 million worth of U.S. goods.

To further increase trade and take advantage of Uganda’s abundant natural resources and strategic location, Dr. Ben Manyindo, Executive Director of the Uganda National Bureau of Standards (UNBS), identifies four things are needed: fixed standards for products and services; technology; skilled labor; and infrastructure.

Progress is evident. Dr. Manyindo says that a total of 1,212 East African standards have been harmonized and are currently under implementation and benchmarked to international best practices. He adds that investors should take a wider view of the opportunities on offer and look at three main markets: the Common Market for Eastern and Southern Africa (COMESA), East African Community (EAC), and Southern African Development Community (SADC).

“The regional market is getting bigger and bigger and the possibilities of these trade areas are unexplored. Uganda’s business environment is very friendly, market oriented and with lot of incentives,” says Dr. Manyindo. “We are your passport to the marketplace.”

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