Govt turns its focus to the Far East to achieve industrialization
Mr Ggoobi (left), Mr Wandera, and Ms Nsibirwa chat during the 2025/26 Absa-NTV Budget Forum in Kampala last week. Photo / Courtesy
What you need to know:
Mr Ramathan Ggoobi says that for Uganda to achieve its industrialisation targets is searching in the Far East countries such as China, Russia, and Turkey
Government has been on a mission to industrialise Uganda for more than 30 years now.
Yet, a lot remains in its plan to achieve the import substitution agenda.
Thus, as a mitigation, government is searching in all corners, and unlike previously, focus has been widened to the Far East as part of the push to industrialise and by extension achieve the ten-fold growth, in which is seeking to grow the economy from $50b to $500b in the next 15 years.
“We need long-term capital and innovators in the country,” Ministry of Finance Permanent Secretary, Ramathan Ggoobi said at the Absa-NTV 2025/26 Budget Forum, noting that to mitigate the challenge of capital, government is partnering with the Far East countries such as China, Russia, and Turkey to pursue the industrialisation agenda.
Uganda has traditionally relied on the West to achieve industrialisation targets. But in the last 10 years, there have been efforts to widen foreign direct investment (FDI) sources. Data indicate that much of Uganda’s FDI still comes from the West, with Europe being the largest source.
For instance, in the 12 months to December 2023, Bank of Uganda data shows that, Netherlands, France, and the UK contributed a combined 79 percent of the $3b worth of FDI, with the Netherlands contributing 55 percent, while France and the UK contributed 20 percent and 4 percent, respectively.
Mining, transport, manufacturing, and finance, data shows, remain the biggest recipients of FDI inflows.
No data was readily available to understand how the push to diversify FDI sources in countries such as China, Russia, and Turkey has so far performed. Bank of Uganda and Uganda Investment Authority had not responded to our request by press time.
Mr Ggoobi also noted that to achieve the $500b economy, Uganda is focusing on agro-industrialisation, industrialisation, tourism, mineral development, and science and technology to accelerate growth.
At the same meeting, business leaders said tax exemptions and waivers in the 2025/26 budget will lead to growth of small enterprises and increase economic activity.
Absa managing director David Wandera said tax changes will allow businesses to put focus on enterprise development as well as retaining capital.
Government changed tax laws, including a three-year income tax waiver for start-ups established by Ugandans as of July 1, to support businesses that struggle with high initial investment costs.
Other exemptions, such as capital gains on transactions, Bujagali Hydro-Power Project, removal of Stamp Duty on mortgages and agreements, the waiver of interest and penalty for voluntary payment of outstanding principal tax, and reforming the penalty regime for non-compliance with EFRIS, are expected to ease the cost of business.
Nation Media Group managing director Susan Nsibirwa said Ugandans expect a lot from the 2025/26 budget.
To manage expectation, she said, there is need to have a performance tracking mechanism of the budget every quarter to find out whether people’s expectations have been met or whether progress is being made or not and where there is need for improvement the by both government and the private sector.
