1,200 UIA projects fail to take off
Nov 16, 2008
UP TO 1,200 projects licensed by the Uganda Investment Authority (UIA) have not taken off for the past 17 years. Dr. Maggie Kigozi, the head of UIA, explained last week that the delay was caused by various factors.
By David Muwanga
UP TO 1,200 projects licensed by the Uganda Investment Authority (UIA) have not taken off for the past 17 years. Dr. Maggie Kigozi, the head of UIA, explained last week that the delay was caused by various factors.
She was, however, happy that out of the 4,000 projects her agency licensed since 1991, at least 2,800 had taken off.
“The 1,200 have delayed due to a number of problems,†said Kigozi.
Quoting the UIA investor survey for the year 2005, Kigozi said challenges to investment keep on changing according to demand.
“For example, in 1996, the major hindrance to investment was electricity shortage. But in 2001, it was access to finance that shifted to cost of finance as a major challenge in 2004, while the 2005 survey identified unstable exchange.
Kigozi said the survey of 1996 identified poor tax policy, tax administration, cost of finance, access to finance and corruption as the major bottlenecks to investment.
The 2001 survey, she added, identified bureaucracy, corruption, poor transport, tax policy, lack of incentives and government’s discriminatory measures as the inhibiting factors to investement.
High costs of finance, corruption, electricity, tax administration, tax rates, theft and disorder, land access, labour regulations and delays in licensing projects were identified in 2004.
In 2005, corruption, high interest rates, inflation, value added tax, customs duty, tax policy and availability of power were identified.
“UIA and Bank of Uganda recently launched another study to identify the challenges,†Kigozi said.
“Investors are very sensitive people. They don’t want to invest their money where they will make losses so at times they take time to study a country’s stability system and this is coupled with challenges of bureaucracy.
“For example, we licensed TATA to start processing coffee but they have just acquired the 50 acres of land at Njeru Stock Farm in Jinja. They have now started carrying out feasibility studies,†she disclosed.
Kigozi attributed the delay to difficult processes of acquiring land where they have to deal with the land owners, bonafide occupants, the Uganda Land Commission and the lands ministry.
“We start with finding land, either government, privately-owned, mailo or leased land, then wait in the queue for the few government valuers’ who determines the price,†she elaborated.
“We open the boundaries after payment is effected, do a topographic survey, value the property of bonafide occupants and compensating them, but this is the most difficult stage,†Kigozi added.
This is followed by carrying out an environmental impact assessment and physical planning before the land is allocated.
“But before the land is occupied, you need to get a land lease from the Land Office which again must be cleared by the Solicitor General,†Kigozi enumerated.
“However, the Government has mandated UIA to establish industrial parks all over Uganda in the next five year.â€
Patrick Bitature, the UIA chairman, disclosed that policy issues were being solved by the Presidential Investor Roundtable aimed at identifying and find solutions to investment problems.
UP TO 1,200 projects licensed by the Uganda Investment Authority (UIA) have not taken off for the past 17 years. Dr. Maggie Kigozi, the head of UIA, explained last week that the delay was caused by various factors.
She was, however, happy that out of the 4,000 projects her agency licensed since 1991, at least 2,800 had taken off.
“The 1,200 have delayed due to a number of problems,†said Kigozi.
Quoting the UIA investor survey for the year 2005, Kigozi said challenges to investment keep on changing according to demand.
“For example, in 1996, the major hindrance to investment was electricity shortage. But in 2001, it was access to finance that shifted to cost of finance as a major challenge in 2004, while the 2005 survey identified unstable exchange.
Kigozi said the survey of 1996 identified poor tax policy, tax administration, cost of finance, access to finance and corruption as the major bottlenecks to investment.
The 2001 survey, she added, identified bureaucracy, corruption, poor transport, tax policy, lack of incentives and government’s discriminatory measures as the inhibiting factors to investement.
High costs of finance, corruption, electricity, tax administration, tax rates, theft and disorder, land access, labour regulations and delays in licensing projects were identified in 2004.
In 2005, corruption, high interest rates, inflation, value added tax, customs duty, tax policy and availability of power were identified.
“UIA and Bank of Uganda recently launched another study to identify the challenges,†Kigozi said.
“Investors are very sensitive people. They don’t want to invest their money where they will make losses so at times they take time to study a country’s stability system and this is coupled with challenges of bureaucracy.
“For example, we licensed TATA to start processing coffee but they have just acquired the 50 acres of land at Njeru Stock Farm in Jinja. They have now started carrying out feasibility studies,†she disclosed.
Kigozi attributed the delay to difficult processes of acquiring land where they have to deal with the land owners, bonafide occupants, the Uganda Land Commission and the lands ministry.
“We start with finding land, either government, privately-owned, mailo or leased land, then wait in the queue for the few government valuers’ who determines the price,†she elaborated.
“We open the boundaries after payment is effected, do a topographic survey, value the property of bonafide occupants and compensating them, but this is the most difficult stage,†Kigozi added.
This is followed by carrying out an environmental impact assessment and physical planning before the land is allocated.
“But before the land is occupied, you need to get a land lease from the Land Office which again must be cleared by the Solicitor General,†Kigozi enumerated.
“However, the Government has mandated UIA to establish industrial parks all over Uganda in the next five year.â€
Patrick Bitature, the UIA chairman, disclosed that policy issues were being solved by the Presidential Investor Roundtable aimed at identifying and find solutions to investment problems.