Uganda attractive investor destination
Feb 08, 2007
A World Bank survey has found that Uganda is one of the sub-Saharan countries that is becoming increasingly attractive to foreign investment. The survey in which more than 300 investors were interviewed focused on the cost of doing business in nine sub-Saharan Africa countries.
A World Bank survey has found that Uganda is one of the sub-Saharan countries that is becoming increasingly attractive to foreign investment. The survey in which more than 300 investors were interviewed focused on the cost of doing business in nine sub-Saharan Africa countries.
The selling points for Uganda were the government’s commitment to a pro-business environment, liberalisation, low labour and land costs.
This is heartening news more so because the survey was carried out by the Multilateral Investment Guarantee Agency (MIGA), the arm of the World Bank which among other things insures investors against political risk. But the government should not sit on it laurels.
First of all, we should recognise that Africa only received $31b of the world’s $1,000b in Foreign Direct Investment (FDI) in 2005 and most of this investment went to North Africa. In sub-Saharan Africa $10b of FDI went to South Africa and Nigeria. So we are not moving in illustrious company being heralded as top achievers in sub-Saharan Africa.
Secondly we still have a lot to do to make our investment environment more attractive. Our transport network – road and rail needs a lot of work, we need to generate more cheap power, there is a need for long term credit and we urgently need to stamp out corruption in order to attract more investment. In addition we need to rejig our policies to be more sensitive to private sector development.
For instance, expediting social security reform will promote long term savings; targeted incentives to strategic sectors of the economy such as agriculture, power generation and financial intermediation will generate jobs and have a huge ripple effect on the economy; and giving anti-corruption agencies more latitude to execute their duties will greatly lower the cost of doing business here.
We must remember that we are not alone in this race. Investors whether foreign or local are fickle and are driven to put money on the table if we can prove we are a more attractive destination than our neighbours.
The selling points for Uganda were the government’s commitment to a pro-business environment, liberalisation, low labour and land costs.
This is heartening news more so because the survey was carried out by the Multilateral Investment Guarantee Agency (MIGA), the arm of the World Bank which among other things insures investors against political risk. But the government should not sit on it laurels.
First of all, we should recognise that Africa only received $31b of the world’s $1,000b in Foreign Direct Investment (FDI) in 2005 and most of this investment went to North Africa. In sub-Saharan Africa $10b of FDI went to South Africa and Nigeria. So we are not moving in illustrious company being heralded as top achievers in sub-Saharan Africa.
Secondly we still have a lot to do to make our investment environment more attractive. Our transport network – road and rail needs a lot of work, we need to generate more cheap power, there is a need for long term credit and we urgently need to stamp out corruption in order to attract more investment. In addition we need to rejig our policies to be more sensitive to private sector development.
For instance, expediting social security reform will promote long term savings; targeted incentives to strategic sectors of the economy such as agriculture, power generation and financial intermediation will generate jobs and have a huge ripple effect on the economy; and giving anti-corruption agencies more latitude to execute their duties will greatly lower the cost of doing business here.
We must remember that we are not alone in this race. Investors whether foreign or local are fickle and are driven to put money on the table if we can prove we are a more attractive destination than our neighbours.