Remarks by H.E Yoweri Kaguta Museveni
President of the Republic of Uganda
At Dinner hosted in His honour
May 29, 2013: STATE VISIT TO SOUTH KOREA
Ladies and gentlemen,
I greet all of you. I am here to address you on the topic of: “Investment, Trade and other Opportunities that are in Uganda.” Uganda is a country with a land size of 240,000sqkms and 35 million people. She is a member of the East African Community (EAC) which has got 140 million people and a land area of 1,716,000sq.kms. East Africa is part of the huge African continent with a land area of 11.7 sq.miles and, currently, with a population of one billion people. By 2050, the population of Africa will be 1.803 billion people. Apart from the EAC, the African continent is organized, currently, into the following trading blocs: COMESA, ECOWAS, SADDEC and ECCAS. These are building blocs that aim at, eventually, forming a Continental Economic Community. The African continent is flanked by two huge oceans: The Indian Ocean and the Atlantic. It also has huge rivers like the Nile (from Uganda to the Mediterranean Sea), the Congo, the Niger and the Zambezi, not to mention the many other smaller ones, such as the Kagera, the Rufiji, the Ruvuma, the Limpopo, the Manu etc etc.
Africa is a land of people that are either similar or linked. The only weakness is that they were not governed together. This is what we are overcoming by economic and political integration. This economic and political integration removes irrationality of fragmented markets and, therefore, improves business opportunities.
With the economic integration we have carried out to remove the colonial balkanization of the market, the two crucial ingredients for a conducive business atmosphere exist: big markets that are growing rapidly and abundant raw materials that have always been in plenty.
Apart from the two factors above – market and raw materials – there is the human resource that is getting more skilled with universal education and vigorous efforts at skilling the youth. Then there is a stable and conducive macro-economic and regulatory framework. Inflation is always in single digits. It is currently 6% per annum.
On account of the above, the economy has been growing at an average rate of 5.3% per annum for the last 25 years the bottleneck of inadequate infrastructure (e.g electricity) notwithstanding.
Infrastructure development was slow because, initially, we were depending on external funding. We now have a little of our own finances and, by focusing; we can build certain elements of infrastructure by ourselves (e.g electricity, some roads, the railways etc). Our economy will, therefore, grow by double digits.
Apart from our internal and regional markets, there are the market access agreements we have with USA, EU, China, India and Japan. These are quota-free tariff-free market access agreements:
the internal, regional and internal markets that are available for our products;
the raw materials that are in plenty
the educated and increasingly skilled population;
a stable macro-economic and regulatory framework; and
the improving infrastructure – especially electricity supply.
If our economy could grow at 5.3% per annum without electricity, how much more will it grow with electricity? Infrastructure development is itself an opportunity for development.
The raw materials are plenty in agriculture for agro-processing – cereals, tubers, fruits, bananas, milk, beef, fish, cotton, coffee, tea, cocoa, vanilla, tobacco, timber, rubber, minerals, herbal medicine etc. In the minerals there are phosphates, iron ore, copper, petroleum, gas, marble, gold etc etc. Then there is the Tourism sector, ICT sector, engineering sector etc etc.
Apart from the factors mentioned above, there are also investment incentives outlined below:
Investment capital allowance on land and machinery at 50 – 75 %
Investment capital allowance on Mineral Exploration Expenditure of 100%
Investment Capital allowance on scientific research 100%
Investment capital allowance on hotels , hospitals and industrial buildings at 20%
Duty and tax-free imports of plant and machinery for all investments
Export promotion incentives including: 10 year income tax holiday, Duty rebate on exports of value addition and stamp duty exemption; among others.
In spite of some bottle-necks that still exist, the rate of return on investment in Uganda is 25%. Since bottlenecks like shortages of electricity have been removed, the return on investment will be 40-45%.
You are welcome to Uganda.