Uganda remains best investment destination in East African region

(HornTrade) – The World Investment Report has again ranked Uganda the leading investment destination in East Africa for the fourth year running. The WIR report prepared by the United Nations Conference on Trade and Development (UNCTAD) simultaneously released globally; indicated that in the year 2009, Uganda’s Foreign Direct Investment was $799 million (Shs1.79 trillion) up from the $787 million (Shs1.45 trillion) recorded the previous year.

Investment Minister Aston Kajara while releasing the results of the WIR 2010 in Kampala yesterday, said: “I am happy to report that despite growing unease in the West about the global economic crisis, Uganda continued to witness growth in foreign direct investments.”
This increase, although still low, was the highest in the East African region, accounting for about 27 per cent of all FDI inflows into the region.

According to UNCTAD, the East African region comprises the Comoros, Djibouti, Eritrea, Ethiopia, Kenya, Madagascar, Mauritius, Seychelles, Somalia and the United Republic of Tanzania.

The report states that developing and transition economies absorbed half of global FDI inflows in 2009 and accounted for a quarter of the global outflows. Their relative weight as both FDI destinations and sources is expected to increase further, as these economies lead the FDI recovery.

Secondly, FDI stock and assets continued to increase despite the impact of the crisis on Transnational Corporations’ sales and value added. According to the report, Uganda’s FDI stocks in the last decade increased by 83 per cent from $807 million (Shs1.8 trillion) to $4,988 billion (Shs 11,223 trillion).

“For instance, the African region is witnessing the rise of new geographical sources of FDI, in particular from developing Asia,” the report said.
In the just-concluded financial year, for example, the Uganda Investment Authority recorded significant planned investments from China and India, of approximately $276 million and $149 million respectively, and with commodity prices recovering, inward FDI is expected to rise even higher in 2010.

Other countries
In the region, Tanzania came second with $645 million, Kenya followed at $145 million, Rwanda recorded $119 million and Burundi recorded $19 million respectively. Africa’s inward FDI recorded $58,565 million compared to the global total ranking of $1.114 trillion.

Mr Kajara said as Uganda moves into the larger EAC common market, the government has put in place a number of interventions to support and strengthen both domestic investment and attract more FDI.

“Uganda continues to liberalise and promote both local and foreign investment, whilst at the same time strengthening its investment regulatory framework for various policy objectives,” Mr Kajara said.

On international investment agreements, Mr Kajara said: “Uganda continues to conclude new treaties, and has so far entered into 15 bilateral investment treaties, 11 double taxation treaties and nine international investment agreements with a number of countries”.

Source: monitor.co.ug

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