Govt projects revenue boost, economic growth

Based on the current developments going on in Uganda’s economy, the government is projecting increased inflows of foreign direct investments, increase in tourism earnings and expansion in the size of Uganda’s economy. Foreign direct investment (FDI) is a crucial factor in economic development, particularly for developing countries. 

This is because it can ease capital constraints, boost economic growth, create jobs, and increase productivity through technology transfers. While for the case of tourism to national economic development, tourism significantly impacts a nation's economy by boosting GDP growth rate, generating foreign exchange, creating jobs and stimulating various sectors like retail and agriculture. 

It can also lead to infrastructure development and improvements in the quality of life for locals. Furthermore, tourism can support local communities, particularly women and disadvantaged groups, and contribute to the preservation of cultural and natural assets in the country. 

The Permanent Secretary of the Ministry of Finance/ Secretary to Treasury, Mr Ramathan Ggoobi, said FDI inflows are projected at $3.8 billion (Shs13.8 trillion), while tourism and remittance receipts are projected at $1.5 billion (Shs5.4 trillion) and $1.4 billion (Shs5.1 trillion) respectively. “During the next five years, it’s projected that Uganda’s GDP is going to more than double, to $158 billion (Shs574.6 trillion) in 2030,” he said. 

Mr Ggoobi, who was speaking in London yesterday in the Open for Business - Harnessing the Trade and Investment Opportunities between Uganda and the United Kingdom, said there are a lot of investment opportunities in Uganda. 

“In Uganda, we have a mission. We have set out to make Uganda a $500 billion economy by 2040. We are targeting the ATMS. In agro-industrialisation, we are looking for serious partners to add value to the abundant agricultural raw materials - coffee, dairy, beef, freshwater fish, tropical fruits and vegetables, cotton, tea, cocoa, cereals, poultry and piggery, etc. These value chains have a combined untapped value-added potential of $20 billion,” he said. 

He added: “In tourism and travel, we have set out a strategy to increase tourist inflows five-fold by doubling the average spend and average stay-per-tourist. Uganda’s tourism value chain has a $50 billion potential.” 

Under mineral beneficiation and manufacturing, including oil and gas, Mr Ggoobi said the government is finalising the quantification of our mineral deposits. We want serious partners to add value to our gold, iron ore, phosphates, limestone, tin, copper and cobalt, lithium, uranium, etc. The confirmed potential is $5 billion (Shs18.1 trillion). Mr Ggoobi said they have also finalised plans and signed the first contract to build East Africa’s largest petrochemical industry around our oil and gas reserves. 

“We also need serious partners to bring knowhow into our nascent STI sector to accelerate our knowledge economy and digital transformation.

For example, Uganda has an untapped $1 billion pharmaceutical export potential,” he said. Apart from the ATMS, Mr Ggoobi told investors that they want partners in the following enabler sectors: - Infrastructure – roads and bridges, railways, airports and urban infrastructure, Electricity generation, transmission and distribution. Social service sector – education, health, social security, water and environment, Irrigation infrastructure, Industrial Park developments.  

Besides, the country having an abundance of natural resources to be exploited for national development, Mr Ggoobi said opportunities are also plentiful in Financial services - investment banking, insurance, private equities among others.

Why invest in Uganda and Africa

  The Permanent Secretary of the Ministry of Finance, Mr Ramathan Ggoobi, said Return on Investment in Uganda is one of the highest, 14 percent on average, and the Return on Equity for listed companies is 30 percent on average.
 “Uganda’s macro economy is well managed and thus stable. Apart from the macro indicators I already highlighted, the public debt is sustainable (now at 46.8 percent); we adhere to fiscal rules, and the central bank is independent. Our government is pro-private sector. We do whatever is necessary to support private investment with both tax and non-tax incentives,” he said.  

The Ugandan economy is one of the most fully liberalised - the capital account is open; all markets (labour, money, goods, capital) are fully liberalised. 

Mr Ggoobi said the legal/regulatory frameworks have been strengthened to enhance corporate governance, strengthen capital markets, and protect private investment from all non-commercial risks. While the tariffs are currently the biggest threat to the global/national economies, as countries move to retaliate against US President Donald Trump’s move to impose high tariffs on goods coming from other countries to the US. 

However, Mr Ggoobi said: “When you invest in Uganda, you gain tariff- and quota-free access to the EAC, COMESA and AfCFTA markets with a combined population of a billion people, and a GDP of about $3 trillion.