Manufacturing tops Uganda investments

Kampala
Uganda’s manufacturing sector, which had for years lagged behind, is finally catching up following the increasing number of projects licenced in the country every year.
The 2009 annual investment report released yesterday shows that the manufacturing sector licensed the highest number of projects totaling to 136 with total planned investments of $577.4 million (about Shs101 billion) with projected employment of 20,920 jobs.

Finance, insurance, real estate and business services emerged second with 72 projects, worth $309.8 million (about Shs588.4 billion)of planned investment and expected to create 10, 890 jobs.

Agriculture, which is Uganda’s backbone, emerged third with 45 projects, with a total of planned investments of $203.3 million (about Shs386 billion) and projected employment of 27, 591 jobs.

In total, Uganda Investment Authority licenced a total of 358 projects in various sectors, with planned investment of $1.6 billion expected to create 70,289 jobs for the population. Local investments were the highest with projects totaling to 171 worth $655.2 million (about Shs112 billion) of planned investment and 35,961 of planned employment. Local investments were followed by United Kingdom, China, India, Russia and Kenya in the second, third, fourth, fifth and sixth position respectively.

Addressing a news conference at the release of the report at the Media Centre, the minister of State for investment Mr Aston Kajara said this was the first time that the 70, 000 planned jobs mark had been achieved since the creation of Uganda Investment Authority (UIA) in 1991.

He attributed the increasing investments in the country to improvements in infrastructure including liberalisation of the telecommunications sector, rehabilitation of the air port and air fields and increased passenger and cargo routings. He also said that government’s intervention in the energy crisis and efforts at improved water and rail transport also contributed to the country’s attractiveness as an investment location.

“Uganda is now one of the fastest growing economies and one of the most liberal countries for foreign direct investment,” he said.

The government reduced electricity tariffs in the country where electricity for large industries was subsidised by Shs8 billion to bring down the cost of a unit from Shs187.2 to Shs184.8 as a way of increasing Uganda’s competitiveness in the region.

Though more jobs have been created, Uganda continues to suffer from a high rate of unemployment.

“Much as we try to create more jobs, they are not yet enough because of the increasing number of people seeking employment but we are yet to reach there,” Mr Kajara said.
Uganda’s exports to the COMESA states, according to the Uganda Bureau of Statistics show that the country registered an increase in the value of goods sold outside its boundaries with Sudan accounting for 14.3 per cent-the highest share, followed by Kenya with 9.5 per cent, Rwanda with 7.9 per cent and DRC with 7.2 per cent.

Mr Kajara, however, said there is need to draw a strategy for sustained attraction to Uganda’s business opportunities if the country is to continue experiencing the increasing trend in investments.

The executive director Uganda Investment Authority, Dr Maggie Kigozi, said despite the general economic downturn around the world, the body licenced 87 new companies with total planned investments of $564 million (about Shs107.1 billion), projected to create 29, 000 jobs in the October - December quarter compared to the 12, 000 planned jobs in the same period in 2008. Though the quarter registered more projects, their value was less by $436 million from $1 billion in 2008 to $564 in 2009.

The manufacturing sector licenced 30 projects in the quarter accounting for 44 per cent of the total planned investments, agriculture and construction accounted for 14 per cent with 15 and four projects respectively.

Agriculture, however, accounted for the highest number of planned jobs at approximately 16, 000 jobs.

She said that UIA targets a total of investments worth $850 million (about Shs1.6 trillion)in 2010.
China and India were top sources of Uganda’s Foreign Direct Investments in the quarter, which Dr Kigozi attributed to their investment in value addition.

“China and India are investing in value addition which the United Kingdom and United States were not doing,” she said.
She added that there is need to draw up a strategy for sustainable attraction to Uganda’s business opportunities if the country is to continue experiencing the increasing trends in investments.

“We intend to introduce an outward mission to include Saudi Arabia, Iran, United Arab Emirates, Egypt, India and China and we will continue supporting domestic SMEs to strengthen their business through the SME division,” she said.