Local traders want minimum investment for foreigners raised

By Francis Kagolo

THE Kampala City Traders Association (KACITA) has asked the Government to raise the minimum financial capital required of foreign investors to $0.5m (about sh1.3b), up from $10,000 (about sh24.6m).

Ephraim Ssentamu, the KACITA secretary general, said if approved, the move will limit the number of foreigners flocking into Uganda masquerading as investors, only to put up retail shops and other petty businesses.

“Our biggest problem is the unfair competition from foreigners who register as investors but end up in petty trade,” Ssentamu said during a meeting with Chinese investors.

The meeting, called to foster security and harmonious relationship between Ugandan and Chinese traders, was held at Fang Fang Restaurant last week.

Ssentamu explained that internationally, businesses with capital below $0.5m were regarded as small.

He said foreigners sell their products at almost the same price Ugandans buy the goods in China and India, which is unfair competition.

Ssentamu, however, applauded China for contributing enormously to Uganda’s development.

“We appreciate Chinese industries that provide us with raw materials. We have no intention of stopping to trade with China. We appreciate the good prices in China because they enable us to get good profit margins,” he said.

In February, the retail shops opened by foreigners in the city centre were among the factors that sparked off a week-long strike by local traders.

The Government last month barred foreign investors from operating small businesses.

Internal affairs minister Hillary Onek said all investors engaged in small scale economic activities would have their investment licenses cancelled.

“You are (investors) not given licenses to make chapattis and samosas,” Onek told Indian investors during a press conference at the ministry headquarters.