Investment opportunities in_uganda_by_hon._ajedra
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Transcript of Investment opportunities in_uganda_by_hon._ajedra
Investment Opportunities in Uganda
Dr. Eng. Ajedra Gabriel Aridru
Minister of State for Finance, Planning & Economic Development (Investment)
April 11, 2013
Uganda Investment Forum 2013
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
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Key Fact HighlightsGeographical & Demographical
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Male, 7.27
Female, 7.04
Sex distribution in labor force (millions, 2012 est.)
Proportion engaged in agriculture
Urban Population:
13.5%
Population: 35.6 million (2012 est.)
World Population Rank: 35
Population Growth Rate: 3.2%
Rural Population:
86.5%
81.8% 80.7%
Location
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
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Security of Investment
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
Investment Guarantees
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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
Favorable Tax Environment
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.
Dispute Settlement
Agreements and AssociationsUganda 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
Regional Trade Associations and Blocs
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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)
International Investment Guarantees and
Agreements
Bilateral Investment Treaties (BIT) Avoidance of Double Taxation Treaties (DTT)
Country Date Country Date
Mauritius Tuesday, August 19, 2003 Mauritius Tuesday, August 19, 2003
France Friday, January 03, 2003 India Wednesday, April 30, 2003
Denmark Monday, November 26, 2001 Italy Friday, October 06, 2000
Netherlands Tuesday, May 30, 2000 Netherlands Wednesday, May 03, 2000
South Africa Monday, May 08, 2000 Denmark Dec. 22, 1954 & Jan, 2000
U. K. & Ireland Monday, April 20, 1998 Norway Tuesday, September 07, 1999
Italy Friday, December 12, 1997 Kenya Wednesday, April 14, 1999
Egypt Saturday, November 04, 1995 Tanzania Wednesday, April 14, 1999
Germany Monday, August 19, 1968 South Africa Tuesday May 27, 1997
Switzerland Monday, May 08, 1972 Zambia Saturday, August 24, 1968
United Kingdom Wednesday, Dec. 23, 1959
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
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254229 237 237
295
380
644
792
729
842
544
792
0
100
200
300
400
500
600
700
800
900
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
FDI VALUE (US$ MILLIONS)
Source: UNCTAD World Investment Reports
FDI Attraction in the EAC
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2006 2007 2008 2009 2010 2011Uganda 644 792 729 842 544 792Kenya 51 729 96 116 178 335TZ 403 582 1247 953 1023 1095Rwanda 31 82 103 119 42 106Burundi 0 1 4 0 1 2
0
200
400
600
800
1000
1200
1400
U.S
$ (M
illio
ns) Uganda
Kenya
TZ
Rwanda
Burundi
Source: UNCTAD World Investment Report, 2012
Top Ten Sources of FDI by Value (2009-2012)
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2009/2010 2010/2011 2011/2012
CountryInvestment Country Investment Investment
1 China 288,222,949 India 149,394,923 Netherlands 200,886,162
2 Kenya 231,219,751 Kenya 76,506,737 UnitedKingdom
104,394,191
3 India 196,702,034Netherlands
69,808,590 Sweden 78,400,539
4 U.K 95,060,500 Norway 67,931,140 Kenya 36,743,653
5 UAE 35,000,000 China 56,293,500 India 25,861,789
6 Russia 20,848,000 Iran 22,724,376 China 22,686,821
7 Canada 18,630,500 Turkey 14,515,100 Sri Lanka 18,460,000
8 Nigeria 16,194,895 Mauritius 14,318,000 South Korea 5,731,000
9 Togo 12,351,000 UnitedKingdom
14,254,194 Iran 5,000,000
10 VirginIslands
8,589,000 South Africa 13,238,465 Eritrea 4,210,250Source: UIA Database
Ownership of Investments in Uganda
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Percentage ownership ofnumber of projects.
Source: UIA Data
33.336 Ugandan Owned
Foreign Owned
Percentage ownership ofvalue of investment
59.659.7
Ugandan Owned
Foreign Owned
Joint ventures make up about 30 % of the investments in Uganda
Investment into Uganda by Sector (US$), 2011/2012
Electricity, Gas & Water, 564,396,700
Transport, Storage and Communication, 296,880,553
Fin, Ins, Real Estate and Business Services , 165,137,207
Agric, Hunt, Forest & Fish, 135,136,380
Mining & Quarrying, 130,583,682
Other, 182,330,026
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12Source: Investment Statistical Abstract, 2011/12, UIA
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 forexport is granted a 10 year tax holiday among otherexport incentives (terms and conditions apply)
In the UIA Industrial Parks, investment in the followingareas may access free land; Agro processing, ICT, andMineral beneficiation and Tourism.
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Key Sectors for Investment 6/25
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Agriculture and Agro processing Opportunities
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• Public Private Partnership investments in theenhancement of maize, beans and rice production forexport regionally and provide for household food ansecurity (machinery and agro inputs provision)
• International and national bidding opportunities forthe establishment and rehabilitation of irrigationschemes in partnership with the Government of Uganda
•Cotton Processing for a fully foreign owned firm: Thereare only 12 private cotton seed crushing and extractionfacilities in the country producing less than 20% of theedible oil consumed in Uganda. There are only two fullyintegrated textiles mills that use cotton the rest isexported to Kenya, Europe and the Far East.
• Among many private sector joint ventureopportunities is the manufacture of Dairy Products witha Ugandan Firm Soroti Dairy Ltd (Total investment – US$2,570,000, Foreign Contribution sought US$2.2M)
Tourism Opportunities
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• The Government coordinated projects include the constructionof up / mid market accommodation within Queen Elizabeth andother Conservation areas
•Development and management of 20-50 bed facilities in theprotected areas
•A fully foreign owned opportunity is proposed to construct aWildlife Forest Lodge comprising 20 spacious cottages to provideadditional accommodation for mid range travelers within theTourist Areas of Mabira and Budongo Forests, Queen ElizabethNational park and Murchison national Park.
• Private joint venture to expand the 22 acre Ssese Palm BeachResort (SPBR) locally owned by SPBR Ltd. It is one of the beachhotels in Lutoboka Bay, Bugala Island in Lake Victoria.
• Other opportunities include; Eco and Community Tourismfacilities, and establishment of tourism and hospitality training tocater for increasing tourist visitors
Mining Opportunities
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• 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 marbleand Limestonedeposits in Karamojawith prospects ofeither joint venture orfully foreign ownedprocessing plant
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
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Energy Generation Opportunities
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Uganda’s electricity demand is growing at 10% per year. Current peak demand is484MW, while installed capacity is 814MW. The current firm supply is 501MW.
Site Location Capacity Status
Kalagala Jinja/Mukono 450 Feasibility Done
Karuma Masindi/Apac 600 Government looking for investor
Ayago South Gulu/Masindi 600 Preliminary Studies
Ayago North Gulu/Masindi 304 Preliminary studies
Murchison Gulu/Masini 642 Preliminary studies
Source: Electricity Regulatory Authority
Opportunities in Smaller Energy Projects
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Site River Estimated Capacity
(MW)
Muzizi Musizi 10
Bogoye Mubuku 7.5
Nengo Bridge Ntungu 12.0
Various Joint Venture opportunities exists to partner withUgandan Companies, among which is Greenwus EnergyAfrica Ltd for Mini hydro Plant to produce 8 MW with atotal investment cost valued at US$17.5 Million in 2010
Other Renewable Energy Projects
Power generation Location
1. Small and large Hydro 1,400MW Countrywide
2. Peat power development 30 MW Kabale, SW Uganda
3. Waste to Energy Country wide
4. Charcoal Production 600,000 tons Land available under NFA for tree planting
5. Improved household stoves 4,300,000 Country wide
Solar Energy Unlimited Eastern & Northern Uganda
6. Biogas technology cookingAnd power generation
>100,000 units Huge potential
7. Gasification technology for power generation and heat
Country wide
8. Wind power generation
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Infrastructure and Construction
Public Private Partnership Opportunities:
1. Construction of the Kampala – JinjaExpressway (75 Kms at US$850 M)
2. Construction of new standard gaugerailway line from Kampala to Malaba(300 Kms at US$500 M)
3. Reconstruction (on existing alignment /right of way) of the Kampala – Kaseserailway (334 Kms at US$366M)
4. Construction of new railway line fromPakwach in the North to Kasese in theSouth East
5. Others include the upgrading of thenational airport, air strips, as well asroads and airstrips in the tourist and oilareas
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Other Major Opportunities
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- 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
Some Constraints to Investment
1. Infrastructure – lack of functioning railway from the sea port.However, efforts are underway to solve this. Electricity supply isstill insufficient and costly
2. Access to Finance - interest rates are still high. With the increaseof financial services in the liberalised financial sector, rates arehoped to come down
3. A few Administrative barriers. Efforts to reduce bureaucracy areunderway through Team Uganda (about 50 investment relatedagencies), as well as the Presidential Investor Roundtable
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In a Nut Shell: Why Uganda?
Ranked 12th
in Africa In ‘Doing Business’
Pearl of Africa
2nd in attracting FDI in East Africa
Resource rich economy
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Thank You
Invest in Uganda