Uganda Rolls Out Red Carpet for Foreign Investors, Highlights Key Opportunities
At the recent 15th UK-Africa Business Summit, Professor Augustus Nuwagaba, the Deputy Governor of the Bank of Uganda, outlined a comprehensive strategy to bolster foreign investment, detailing key opportunities for UK investors and the measures being taken to ensure a stable and profitable business environment.
In his address, Prof. Nuwagaba identified several fiscal and regulatory reforms designed to strengthen Uganda’s Foreign Direct Investment (FDI) profile. Key among these are reducing harmful taxes, simplifying payment processes, and offering targeted incentives in priority sectors. He also emphasized critical infrastructure investments in transport and energy to lower operational costs for businesses.
To further streamline the investment process, the government is developing industrial parks with ready access to utilities and streamlined services, aiming for a “plug-and-play” model. Additional measures include incorporating ESG (Environmental, Social, and Governance) standards, simplifying licensing procedures through the Uganda Investment Authority’s one-stop centre, and liberalising capital accounts to allow free movement of investment capital.
High-Growth Sectors for UK Investors
Prof. Nuwagaba pinpointed several sectors offering strong returns for UK investors:
· Clean Energy and Green Infrastructure: Opportunities exist in high-tech businesses that support the transition to clean energy and climate-resilient agriculture.
· Financial Services: The expanding sector shows strong returns, with significant room for growth, particularly in the ongoing digital transition.
· Large Infrastructure Projects: Public-private partnerships are being encouraged for projects like hydroelectric plants and railway networks, following the successful model of the Entebbe Expressway.
· Value Addition in Minerals and Oil & Gas: The newly discovered minerals and the Kabalega Industrial Park in Hoima present significant potential for adding value to raw materials for regional markets.
Boosting Trade with Logistics and Diaspora Bonds
The Deputy Governor highlighted the critical role of major logistics projects like the Bukasa Port and the Standard Gauge Railway in boosting regional trade efficiency by reducing business costs and improving supply chain integration.
To finance long-term national growth, Prof. Nuwagaba promoted the use of diaspora bonds. Noting that remittances to Uganda have grown to over $1.4 billion, he described these bonds as a safe instrument for the diaspora and a vital source of funding for large-scale public infrastructure.
Safeguarding the Economy
Addressing concerns about economic stability, Prof. Nuwagaba detailed the Bank of Uganda’s safeguards against inflation and foreign exchange volatility.
· Inflation: The central bank uses the Central Bank Rate (CBR) as its primary tool to keep inflation low and stable, closely coordinating with the Ministry of Finance.
· Forex Volatility: Operating a floating exchange rate regime, the Bank intervenes only to smooth extreme short-term fluctuations. It also maintains a strong foreign exchange reserve base and is adopting international risk management tools to deepen the financial system.
Prof. Nuwagaba’s presentation positions Uganda as a nation actively reforming its economic landscape to attract sustainable foreign investment, with a clear focus on high-growth sectors and robust macroeconomic safeguards.
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