Investment Opportunities in Uganda

1. Investment Opportunities in Uganda Uganda Investment Forum 2013 Dr. Eng. Ajedra Gabriel Aridru Minister of State for Finance, Planning & Economic Development (Investment) April 11, 2013

2. Presentation Structure • Introduction • Key Country Facts • Investment Climate • Security of Investment • Status of Investment • Investment trends • Sources of FDI • Ownership of investment • Investment by sector • Incentives • Key Sectors for Investment • Investment Constraints • Why Uganda? • Conclusion

3. Key Fact Highlights Geographical & Demographical Population: 35.6 million (2012 est.) World Population Rank: 35 Population Growth Rate: 3.2% Location Urban Population: 13.5% Rural Population: 86.5% Proportion engaged in agriculture 81.8% 80.7%

4. Investment Climate • - Predictable economic environment • - Fully liberalized economy • - Competitive market access • - Good Governance • - Trainable labor force • - Excellent weather Climate • and conditions. • - Strong natural resource base Friendly population • - Government commitment to private sector • -Security of investment

5. Security of Investment Favorable Tax Environment • Following tax incentives are listed in the Investment Law: • VAT refund on building materials for industrial/commercial buildings for investors who register as investment traders • Duty and Tax free import of Plant & Machinery • Duty exemptions for personal effects and motor vehicle (previously owned for at least 12 months) to all investors and expatriates coming to Uganda Investment Guarantees Dispute Settlement • The Investment Code provides the following guarantees to an investor: • Non-nationalization, or non-confiscation of investment • Such acquisition is only allowed by law and in consideration of a just compensation • The compensation so determined is fully transferrable outside Uganda and not subject to any exchange controls The law stipulates a clear mechanism of dispute settlement between business parties and between the government and a private investor. In case the dispute is not solved through the national courts, the law also allows settlement via international bilateral or multilateral agreements or any other international machinery agreed to by the parties.

6. Agreements and Associations International Investment Guarantees and Agreements • Uganda is a signatory to and member of the following : • Multilateral Investment Guarantee Agency (MIGA), which provides guarantee against non commercial risks • International Centre for Settlement of Investment Disputes (ICSID), which is a channel for settling disputes between foreign investors and host governments • Overseas Private Investment Corporation (OPIC) of USA • Convention on the recognition and enforcement of foreign arbitral award (CREFAA) • Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) Regional Trade Associations and Blocs • Uganda is a member of/ signatory to the following: • Common Market for Eastern and Southern Africa (COMESA), which creates a full free trade area among its 19 members • Intergovernmental Authority on Development (IGAD) • East African Community (EAC) • African Growth and Opportunity Act (AGOA), giving duty free access to the US market • Generalized System of Preferences (GSP) • EU Everything but Arms initiative

7. BITs and DTTs Concluded with Uganda Most recent BITS (by December 2010): Belgium and Luxembourg signed in 2005 and with China in 2004 : Most recent DTTs (by December 2010): Belgium in 2007 and Netherlands and India in 2004

8. Source: UNCTAD World Investment Reports

9. FDI Attraction in the EAC Source: UNCTAD World Investment Report, 2012

10. Top Ten Sources of FDI by Value (2009-2012) Source: UIA Database

11. Ownership of Investments in Uganda • Percentage ownership of number of projects. Percentage ownership of value of investment Joint ventures make up about 30 % of the investments in Uganda Source: UIA Data

12. Investment into Uganda by Sector (US$), 2011/2012 Source: Investment Statistical Abstract, 2011/12, UIA

13. Incentives • Non negotiable – Stipulated by the Investment Code • Non discretionary • Available to all investors, local and foreign • There are some additional sector specific tax exemptions • Value addition on agro and mineral raw materials for export is granted a 10 year tax holiday among other export incentives (terms and conditions apply) • In the UIA Industrial Parks, investment in the following areas may access free land; Agro processing, ICT, and Mineral beneficiation and Tourism.

14. Key Sectors for Investment

15. Agriculture and Agro processing Opportunities • Public Private Partnership investments in the enhancement of maize, beans and rice production for export regionally and provide for household food an security (machinery and agro inputs provision) • International and national bidding opportunities for the establishment and rehabilitation of irrigation schemes in partnership with the Government of Uganda • Cotton Processing for a fully foreign owned firm: There are only 12 private cotton seed crushing and extraction facilities in the country producing less than 20% of the edible oil consumed in Uganda. There are only two fully integrated textiles mills that use cotton the rest is exported to Kenya, Europe and the Far East. • Among many private sector joint venture opportunities is the manufacture of Dairy Products with a Ugandan Firm Soroti Dairy Ltd (Total investment – US$ 2,570,000, Foreign Contribution sought US$2.2M)

16. Tourism Opportunities • The Government coordinated projects include the construction of up / mid market accommodation within Queen Elizabeth and other Conservation areas • Development and management of 20-50 bed facilities in the protected areas • A fully foreign owned opportunity is proposed to construct a Wildlife Forest Lodge comprising 20 spacious cottages to provide additional accommodation for mid range travelers within the Tourist Areas of Mabira and Budongo Forests, Queen Elizabeth National park and Murchison national Park. • Private joint venture to expand the 22 acre Ssese Palm Beach Resort (SPBR) locally owned by SPBR Ltd. It is one of the beach hotels in Lutoboka Bay, Bugala Island in Lake Victoria. • Other opportunities include; Eco and Community Tourism facilities, and establishment of tourism and hospitality training to cater for increasing tourist visitors

17. Mining Opportunities • Dimension stone products (Marble & granite) • Phosphates (Sukulu) • Gold (Buhweju, Busia, Mubende, etc) • Iron ore (Muko) • Vermiculite • Container glass from silica sands • Petroleum (Petrochemical related Ind.) Commercial marble and Limestone deposits in Karamoja with prospects of either joint venture or fully foreign owned processing plant

18. ICT Business Opportunities • Business Process Outsourcing • Software development • Software testing & assurance • Data Storage area networks • Integrated Solution Planning • Hardware Assembly • Multimedia Development • Internet Applications • Translation Services • Film Industry and Graphics • Rural Communications

19. Energy Generation Opportunities Uganda’s electricity demand is growing at 10% per year. Current peak demand is 484MW, while installed capacity is 814MW. The current firm supply is 501MW. Source: Electricity Regulatory Authority

20. Opportunities in Smaller Energy Projects Various Joint Venture opportunities exists to partner with Ugandan Companies, among which is Greenwus Energy Africa Ltd for Mini hydro Plant to produce 8 MW with a total investment cost valued at US$17.5 Million in 2010

21. Other Renewable Energy Projects

22. Infrastructure and Construction Public Private Partnership Opportunities: • Construction of the Kampala – Jinja Expressway (75 Kms at US$850 M) • Construction of new standard gauge railway line from Kampala to Malaba (300 Kms at US$500 M) • Reconstruction (on existing alignment / right of way) of the Kampala – Kasese railway (334 Kms at US$366M) • Construction of new railway line from Pakwach in the North to Kasese in the South East • Others include the upgrading of the national airport, air strips, as well as roads and airstrips in the tourist and oil areas

23. Other Major Opportunities • Services (Health, Education, Financial Services) Uganda has 34 Universities in Uganda • Manufacturing, Cars, Light Bulbs, Ceramics • Large Scale Commercial Agriculture • Private Hospitals for specialised treatment (Heart Surgery, Kidney transplant, cancer treatment • Pharmaceticals

24. Some Constraints to Investment • Infrastructure – lack of functioning railway from the sea port. However, efforts are underway to solve this. Electricity supply is still insufficient and costly • Access to Finance - interest rates are still high. With the increase of financial services in the liberalised financial sector, rates are hoped to come down • A few Administrative barriers. Efforts to reduce bureaucracy are underway through Team Uganda (about 50 investment related agencies), as well as the Presidential Investor Roundtable

25. In a Nut Shell: Why Uganda? Pearl of Africa Resource rich economy 2nd in attracting FDI in East Africa Ranked 12th in Africa In ‘Doing Business’

26. Thank You Invest in Uganda