State House Unit pledges zero-delay investment environment

Col Edith Nakalema has said The Netherlands remains one of Uganda’s largest sources of foreign direct investment (FDI), with more than 200 Dutch-affiliated companies operating in the country.

Nakalema, who heads the State House Investors Protection Unit (SHIPU), said Dutch investments have made significant contributions to Uganda’s agriculture and agribusiness, renewable energy, transportation and logistics sectors, among others.

She made the remarks on Wednesday (October 7) during a strategic engagement on trade and investment with members of the Netherlands-Uganda Trade and Investment Platform (NUTIP) at the SHIPU offices in Kampala.

The engagement brought together SHIPU, government agencies and members of the business community to discuss challenges affecting investors, including taxation, tax arbitration, economic policy and governance.

The meeting built on an earlier engagement hosted by SHIPU last November.

She said the continued engagements reflect the strong economic partnership between Uganda and the Netherlands, which has existed for 56 years.

By June 2026, the Netherlands accounted for 58.8 percent of total FDI inflows into Uganda.

The investments go beyond capital injection; they contribute to innovation, local capacity development, employment creation and other economic opportunities for Ugandans.

Zero-delay 

Nakalema assured Dutch investors that SHIPU was committed to creating an investment environment in which government agencies work together to resolve challenges and minimise unnecessary delays.

“Our mandate is to protect your capital from economic disruptions by deploying collaborative mechanisms, as MDAs, to expedite attention to any concerns that may set you back."

She encouraged NUTIP members to use the Electronic Investors’ Protection Portal (EIPP).

The platform links more than 75 government MDAs, enabling investors to conduct due diligence and verify administrative processes with minimal human interaction.

“The President recognises that you are not merely doing business in Uganda; you are strategic partners in our country’s economic transformation journey,” said Nakalema.

She reaffirmed SHIPU’s commitment to protecting existing investments while supporting investors seeking to expand their operations in Uganda.

The Deputy Ambassador of the Kingdom of the Netherlands to Uganda, Bouwe-Jan Smeding, said Uganda and the Netherlands share a common objective of creating a better business environment that benefits investors, businesses and the wider economy.

“We all have the same horizon: getting a better business environment in Uganda, because that will help Uganda in connecting, in getting forex, and it helps all businesses to have healthy businesses with healthy profits,” he said.

He saw the engagement as being important in identifying and understanding the barriers investors continue to face, noting that even where a government institution cannot immediately resolve an issue, providing clear explanations can help build confidence and understanding.

He cited tax administration as one of the areas requiring continued dialogue, saying investors need clarity on policies and the handling of tax disputes.

Smeding also said the Netherlands is increasingly moving from traditional development cooperation towards an investment-oriented relationship.

He said the Netherlands’ Multiannual Country Strategy for 2026 onwards reflects this direction while maintaining support for key development areas, including smallholder agriculture.

Economic pressures

Moses Kaggwa, the director of economic affairs at the finance ministry, said Uganda is facing several external economic pressures, including rising fuel prices, geopolitical tensions in the Middle East and exchange-rate depreciation.

Deputy Ambassador of the Kingdom of the Netherlands to Uganda, Bouwe-Jan Smeding speaking during a strategic engagement on trade and investment with members of the Netherlands-Uganda Trade and Investment Platform (NUTIP) in Kampala Courtesy photo

He said supply disruptions associated with the conflict in the Middle East were among the factors affecting the Uganda shilling, although he noted that the currency had historically been one of the most stable in Africa.

He said the government and the Bank of Uganda were monitoring the situation and implementing measures to contain excessive depreciation and inflation.

Kaggwa is optimistic the shilling could stabilise at around sh3,900 to the US dollar in the near term, but he cautions against speculation and panic buying of dollars.

Despite the challenges, he said Uganda’s export performance remained strong, with exports expected to reach about $18.42 billion.

Coffee, cocoa and vegetables exported to the European Union are among the products supporting Uganda’s external earnings.

Uganda's government remains committed to building an economy based on production and value addition rather than one dominated by imports and retail trade.

Manufacturing accounts for about 15 percent of Uganda’s GDP, making it one of the largest manufacturing sectors in the region.

Agriculture, tourism, mineral development, science, technology and industry are key pillars of Uganda’s economic transformation agenda.

Kaggwa assured investors that the government is committed to creating a predictable and supportive business environment, adding that the private sector contributes about 80 percent of Uganda’s GDP, making it a critical partner in economic development.

Stronger government-business partnership

Mark Dieleman, the chairperson of the NUTIP Board, called for stronger collaboration between the business community and government to create a safe, predictable and supportive environment for investors in Uganda.

He said a strong private sector is critical to economic growth, emphasizing the importance of government support and protection of businesses.

“We always say, no business, no economy. It’s as simple as that."

Dieleman called for continued cooperation between the government and the business community to sustain and increase trade and investment between the two countries.

Protection of Sovereignty Act

Dr Stephen Okello, the Secretary of the NGO Bureau who represented the permanent secretary of the internal affairs ministry, said the implementation of the Protection of Sovereignty Act was among the concerns raised during the meeting.

He said no foreign agency had been registered under the Act at the time of the engagement, adding that the government had put in place an implementation framework to ensure it was fully operationalised.

“Another key step which should be taken is sensitisation. We are going to have a sensitisation drive around the country so that people know what the Act means and whether it affects investments or not."

Investor-friendly tax administration

Abel Kagumire, who represented the Commissioner General of the Uganda Revenue Authority (URA), said the tax body was committed to facilitating investors in line with President Museveni’s directive to ensure that business operators are not unnecessarily delayed.

He said URA was committed to operating with patriotism, integrity and professionalism while supporting businesses to contribute to Uganda’s economic growth.

On remission of duty on imported raw materials, Kagumire explained that Uganda and the East African Community have mechanisms through which eligible raw materials can be considered for duty remission.

He said once URA confirms that an imported item is a raw material used in production rather than an item intended for immediate sale, the relevant committee can assess the factory and recommend its inclusion on the list of eligible raw materials.

Kagumire also clarified that URA administers taxes strictly in accordance with laws passed by Parliament and assented to by the President.

He said agricultural inputs, plant and machinery, and equipment used in agro-processing enjoy various tax incentives, although some components may attract duty depending on their classification under the law.

Tax and regulatory concerns

Donah Loyce Katushabe, a NUTIP board member, highlighted challenges affecting investors, including access to tax incentives, tax treatment of different business models and implementation of the Protection of Sovereignty Act.

“Members want clarity on the strategic investor exemptions provided for in the Income Tax Act."

She also said foreign companies supplying goods from abroad want the government to reconsider its approach to contracting them in foreign currency.