Few countries in Africa provide the sort of strategic location that Uganda offers to investors. Located at the heart of East and Central Africa, it shares borders with some of Africa’s most economically important and resource rich countries, from the mineral rich DR Congo to the rapidly expanding Southern Sudan economy. Uganda boarders the Sudan to the north, the Democratic Republic of Congo to the west, Kenya to the east and Tanzania and Rwanda to the south.
Though landlocked, the many borders it shares with her neighbors, give her a commanding importance as a base for reional trade and investment.
Predictability is possible because of macro-economic stability with inflation maintained at single digit level for over 10 years from a record high of 240% in 1988. The country has also had an annual and fairly stable economic growth averaging 6% per annum, a result of good macroeconomic policies and political stability.
A liberal economic regime is another consistent characteristic of the Uganda Economy. There is free inflow and outflow of capital (both current and capital accounts), 100% foreign ownership of investment is permitted and exchange rates are freely determined by the market.
Market Access
Uganda has been secured and guaranteed by membership in various free trade and market access preferences offered to the country. The Common Market for Eastern and Southern African states (COMESA), a region with a market of over 380 million people in 20 countries is one of the groupings in which Uganda is a member, guaranteeing the business community more than 80% tariffreduction in this regional market.
Strong Natural Resource Base
The country has got great physical endowments. The locationin the heart of Sub-Saharan Africa and astride the Equator, gives Uganda one of the best climates in the world. With rainfall all year round, fertile soils and favorable temperature range, one can grow any crops in the country in the most natural conditions any country can have. The country takes pride in being the leader in organic agriculture in Africa. Many food stuffs are produced, in an environment free of harmful chemical inputs. There are plenty of unexploited mineral deposits (over 117 minerals). Confirmed deposits include: gold, zinc, wolfram, petroleum, diamonds, vermiculite, silica, uranium and iron ore.
Government Commitment to Private Sector
Government and private sector dialogue in policy formulation are at the highest level and at the center of business development processes in the country. A Presidential Investor’s Roundtable chaired by the Country’s President is in place to ensure that government policies keep the private sector at the center. Business Development Strategies including the Investment Climate Strategy (CICS), the National Export Strategy (NES) and other regulatory frameworks have all been put in place under Public - Private Sector Partnerships. As a result, many vibrant private sector associations have come up to advance their members’ concerns.
Cost and Trainable Labour
Uganda presently produces over 20,000 University graduates per year. The quality of this labour is one of the biggest attractions, being a product of an education system with strong links with the British Education System inherited at independence.The World Bank Doing Business Report (2006) ranks Uganda among the top 25 countries where hiring labour is simplest. The country is also a regional base for training the labour force from the East African region. Being among World Bank’s low income economy classification, one of the key advantages of such an economy is low labor costs. Using the GDP per capita as a proxy to gauge possible wage competitiveness, an evaluation of Uganda with her immediate neigbours shows her in the fifth lowest per capita income bracket based on Purchasing Power Parity. Using the conventional per capita measure, Uganda has the third lowest as illustrated in the figure across.
English Speaking Labour Force
Although English is an official language in most of the countries in East and Southern Africa, it is not the primary language spoken by the majority of the population in any of them. Uganda is however the only Country in East Africa where English is the sole official language. Using the Test of English as a Foreign Language (TOEFL) as an indicator of English language skills, studies in the region have shown that Uganda ranks second in mean TOEFL score among the six neighboring Countries
Based on the scores, it would appear that presently only Kenya and Uganda labour might have the requisite English language skills that are today vital for managing the rapidly changing global business, where transactions are largely conducted in English.
Protecting Investors
The country’s investors have complete international protection made possible by the local laws and international conventions to which the country is signatory. The Ugandan constitution (1995) and the Investment Code Act 2000, stipulate sufficient laws to protect investors rights and property. The International Conventions and institutions to which Uganda is signatory include the Multi lateral Investment Guarantee Agency (MIGA); Overseas Private Investment Corporation (OPIC) of US; Convention on the recognition and enforcement of foreign arbitral award (CREFAA) and several others.
