Investment opportunities in Uganda

Uganda is one of the best countries to do business in Africa as it has stable macroeconomic policies, a growing domestic market of about 50 million people and accessible regional markets.

Uganda offers a wide range of business opportunities across many economic sectors.

Opportunities in the field of information and communication technologies (ICT)

Uganda's ICT sector is one of the most dynamic in the region and a fast-growing economic sector offering many opportunities. Growth in this sector is supported by a strong regulatory framework.

The ITC sector is connected to three maritime fiber optic cables off the east coast of Africa in the Indian Ocean. The newly developed and quantified ICT infrastructure is ready to accommodate new investments. Uganda is positioning itself as a hub for business processing and management outsourcing in East Africa.

The main opportunities for outsourcing business processes and ICT services exist in agriculture, healthcare, tourism, banking, insurance and public administration. Uganda National Backbone Infrastructure, an initiative aimed at connecting all major cities in the country to a fiber network and connecting government agencies to the e-government network.

The total length of fiber optic cables installed throughout the country by both the government and the private sector is 5,110 km, providing uninterrupted connectivity. Additionally, 4G technologies have been introduced to provide faster Internet speeds to transform access to public and private spectrum, as well as promote e-commerce to drive economic growth and efficiency.

Opportunities in the energy sector

Energy is the main driving force of economic growth and prosperity of any country. Uganda needs adequate, reliable and affordable energy to achieve sustainable development. It is for this reason that energy is a priority sector for the country's development.

The country is rich in huge natural resources, such as minerals, hydro, geothermal, oil resources, solar energy, but only a small part of this potential has been used.

Uganda is estimated to have about 6.5 billion barrels of oil, most of which is located in the Albertina region, near the western border with the Democratic Republic of Congo. Total, CNOOC and Tullow Oil currently hold licenses to develop this resource.

The final investment decision (FID) was announced on February 1, 2022. The project's current joint venture partners are TotalEnergies, China National Offshore Oil Corporation (CNOOC) and Uganda National Oil Company (UNOC). This announcement of the Lake Albert development project in Uganda is an important step in the country's oil sector.

Also one of the largest expected projects in this area is a 1,400 km oil pipeline project running from western Uganda to the port of Tanga across the Indian Ocean and through the United Republic of Tanzania. The oil industry and mainly the oil and gas sector will require significant investment in infrastructure to build an oil refinery with two central processing facilities, including an oil export pipeline.

Investment opportunities for service providers potentially needed by the Ugandan oil and gas sector:

• Automation and process equipment and services
• Valves, controls and instrumentation
• Geosciences
• LNG, geophysics and geology
• Marine equipment and services
• Measurement and automation technologies
• Oil and gas transportation
• Construction (prefabricated structures, site, related equipment)
• Providers of equipment corrosion protection and insulation services
• Drilling and well servicing
• Electronic equipment and services
• Exploration and production
• Telecommunications and IT
• Tools and electrical power equipment
• Transport and pipelines
• Oilfield, gas equipment and services
• Onshore and offshore technologies
• Maintenance and repair of pipeline equipment
• Oil refineries, processing plants, petrochemical and gas plants
• Hospitality and other consulting and non-consulting services, including retail and distribution services.

Opportunities in tourism

Tourism is a fast-growing sector, helped by the fact that Uganda is considered one of only three countries to be home to about 50% of the world's known population of critically endangered mountain gorillas. Uganda has a diverse landscape that includes the snow-capped Rwenzori Mountains and the vast Lake Victoria. The country is also the source of the Nile, the longest river in the world. It was named by CNN as one of the top travel destinations to visit in 2023.

The country is home to a wealth of wildlife, including the rare Ishashi tree lion, white rhinoceros and elephant, and is home to 11% of the world's bird species (1,060 bird species in total). Remote Bwindi Impenetrable National Park — famous mountain gorilla sanctuary. Murchison Falls National Park in the north-west is famous for its 43 meter high waterfall and abundance of wildlife such as hippos.

The Rwenzori region is undoubtedly one of the most beautiful places on earth. The region is rich in natural resources such as fertile volcanic soils, rich forest cover and mineral deposits. This place is home to leading tourist destinations such as Queen Elizabeth, Mount, Rwenzori and other national parks.

The Rwenzori region borders five countries in the Great Lakes region (Democratic Republic of Congo, Rwanda, Burundi, Tanzania and Zambia). This provides significant investment opportunities in the country and potential for development, regional cooperation and integration.

Tourism opportunities include: 

• Construction of quality accommodation facilities 
• Excursions and travel itineraries (biking tours, hot air balloon rides, sea activities on Lake Victoria and rafting on the Nile River) 
• Development of specialized eco-tourism, community tourism and religious tourism such as pilgrimages to the Martyrs of Namugongo-Uganda, the Mahatma Gandhi statue and the landing site of Bishop Hannington on the Nile. 

It is estimated that the steadily growing number of tourists has reached 1.5 million per year, representing 7.7% of GDP.

Electronics Opportunities

Uganda provides virtually untapped opportunities for electronics assembly operations such as: 

• Lowest labor and operating costs in EAC.
• Highly trained workforce, excellent recruitment and workforce participation potential.
• Good availability of management and technical personnel in the country.
• Benefits on taxes, import tariffs and training costs.
• Large and growing market opportunity.
• The main member of free trade zones — EAC (175 million) and COMESA (529 million).
• Stable and investor-friendly political and economic environment.
• Good location for key employees — excellent conditions for work and life.
• Excellent potential for early player advantage.

Chinese firm Hisense assembled its first television in Uganda in 2012 and is building a new 2,000-employee plant in Uganda that will assemble televisions, DVD players, radios, speakers, LEDs, home theaters and white goods.

The American firm CTI Africa has invested $10 million to begin assembling smartphones in Uganda.

Opportunities in edible oil production

With the region's lowest cost and fastest growing workforce, suitable land and investor-friendly environment, Uganda is a good location for edible oil production.

Uganda has a large domestic market where demand for edible oils is growing rapidly (Uganda's imports of edible oils increased more than fivefold to over US$30 million in 2017).

Uganda has a strong position in agricultural production and is the most open trading country in the region.

35% of Uganda's land is arable and suitable for growing edible oilseeds. such as sesame, soybeans and sunflower.

Premium oils

Production of Premium Virgin oils for export is possible in Uganda in the medium to long term. The premium oils segment is more marginal and less aggressive. There are also opportunities for value chain investment in Uganda to expand the supply of raw materials (such as avocado production) for which there is high demand. 

Some players such as Mukwano are already exporting premium sunflower oil from Uganda to Switzerland and Belgium and demand in these and Asian markets is expected to continue to grow steadily as awareness and incomes rise. Founded in Uganda in the 1980s, Mukwano has grown into a diversified enterprise involved in the production of oilseeds (mainly sunflower and soybeans, employing more than 100,000 farmers) and the production of petroleum products, soaps, detergents, plastics and water.< /p>

Bidco Uganda was founded as a joint venture with Singapore-based Wilmar International (a leading agribusiness group in Asia). The company produces oils, fats, soaps and other products in Uganda and is investing US$160 million in its refining capacity in Uganda. Currently, the company has about 2,000 registered farmers with an annual production of 2.734 million US dollars.

Opportunities in infrastructure

Infrastructure is a key priority for the Government of Uganda. Over the past few years, infrastructure development has made a huge contribution to increasing productivity by facilitating efficient communication and facilitating the movement of goods and services.

Infrastructure financing currently accounts for about 32.8% of total annual government spending.

Road transport

The road network includes national, city, as well as regional, city and village access roads. In accordance with the government's goal to begin commercial oil production, physical work is underway on three oil roads with a length of 363 km out of 600 km. This will help develop the oil and gas industrial park in western Uganda and promote new businesses.

Railway transport

The Government of Uganda is committed to developing the national railway system as the cheapest mode of transport. The rail transport sub-sector will undergo major changes, including a transition from meter gauge (1,067 mm) to standard gauge (1,435 mm).

Air transport

The air transport system is served by 47 airfields, evenly distributed throughout the country. Of these, 14 are owned and operated by the Uganda Civil Aviation Authority (UCAA), including Entebbe International Airport, which is the main entry and exit point for international traffic.

The government has designated five other airports as entry/exit points (international) to promote trade and tourism. These are Arua, Gulu, Pakuba, Kidepo and Kasese. The remaining airfields are owned, operated and managed by the private sector and local authorities.

The government has revived the Uganda National Airline to fully support the aviation industry. The company is also building Kabale International Airport in the Albertine region of western Uganda to serve the oil sector

Inland water transport

Water transport — one of the fastest and cheapest modes of transport in Uganda. The country has 18 inland waterway ports scattered across various water bodies, most of which are on Lake Victoria, with more than 170 ships handling approximately 6 to 8 million passengers per year.

The government is increasing investment in water transport infrastructure to increase passenger and freight traffic. Underutilized infrastructure provides a viable investment opportunity, especially for the growing tourism market and intra-regional trade activities.

Energy infrastructure

The total electricity production capacity is currently 1200 MW. A total of 17 hydro and solar power plants are under construction and a further 800 MW will be added to the national grid. The government is adding 726.3 km of transmission lines to the network.

Opportunities in pharmaceuticals

Uganda combines a growing pharmaceutical market with access to an EAC market reaching 175 million people. With relatively high levels of skills and education and an investor-friendly environment, Uganda is a fast-growing pharmaceutical hub.

In 2018, there were more than 300 life sciences companies and more than 30 pharmaceutical and medical device manufacturing companies operating in Uganda.

These companies currently manufacture 173 pharmaceutical products in Uganda.

Uganda is highly specialized in pharmaceuticals. The chemical sector (including pharmaceuticals) accounts for more than 10% of the value added of Uganda's manufacturing industry — the highest figure in the region.

Medical consumables

Medical consumables — a fast growing segment of the Ugandan healthcare sector. Uganda's imports of medical supplies grew by more than 60% in 2017, compared with 6% growth in sub-Saharan Africa as a whole.

Total imports of medical supplies into the EAC average over $250 million annually, with Uganda being the fastest growing market.

There is significant investment potential in Uganda for the production of cotton-based consumables, including cotton wool, gauze, bandages and surgical wool. The raw material can be sourced locally given Uganda's comparative advantage in cotton production.

There are also opportunities for the production of medical goods and instruments.

CIPLA India has set up a WHO pre-qualified plant in Uganda to produce ARVs, anti-malarials and hepatitis drugs by signing procurement agreements with the governments of Uganda and Zambia. In 2018, CIPLA Uganda raised US$43.8 million in a local IPO.

Alfasan from the Netherlands has invested in Uganda through a joint venture with Ugandan company Farm Support to produce veterinary and human medicines.

Opportunities in the field of mining

More than 80% of the country's territory has been explored for the amount and location of minerals. New geographic data shows that Uganda has large undeveloped mineral deposits of gold, oil, high-grade tin, tungsten, salt, beryllium, cobalt, kaolin, iron ore, glass sand, vermiculite, phosphates (agricultural fertilizers), uranium and rare minerals . elements of the earth. 

There are also significant quantities of clay and gypsum. Investment opportunities exist in the mining and processing industries, with special incentives available to the mining sector, including a full write-off of capital costs.

Opportunities in agriculture

The agriculture sector continues to be the most important sector in Uganda, employing about 72% of the population and contributing about 32% to GDP.  However, productivity is limited by dependence on natural weather conditions and the still widespread use of traditional methods and equipment.

Uganda is one of the leading producers of coffee, bananas and oilseeds (sesame, soybeans, sunflowers, etc.). The country is also a major producer of other crops such as tea, cotton, tobacco, grains, fresh produce and vegetables, nuts, essential oils, flowers, poultry and freshwater fish.

The Ugandan government is pushing for greater commercialization of agriculture, encouraging the use of irrigation and mechanized farming.

Investment opportunities exist in:

• Commercial agriculture in both crop and livestock production and aquaculture
• Agro-industrial complex, agro-food industry
• Produce resources such as improved seeds, fertilizers and pesticides
• Refrigerated warehouses and logistics
• Production and assembly of agricultural machinery
• Packaging
• Irrigation schemes

Investment parks

The Uganda Investment Authority has been tasked with building 22 industrial and business parks across the country with the aim of creating more jobs, facilitating access to land for investment, introducing new research, technology and skills development, and increasing Uganda's exports, hence increasing Uganda's revenue base.

In 2017, the UIA Council approved the creation of 1 more industrial park in Buliis and 4 regional scientific and technological industrial parks, for a total of 27 industrial parks.

The completion of these industrial parks will increase the value of local raw materials, thereby boosting the development of the agricultural and mining sectors. There are three government industrial parks in the Kampala-Mukono region. These include Kampala Industrial and Business Park (KIBP), Namanwe Industrial Park, Luzira Industrial Park and Bweyogerere Industrial Park.

Advantages of industrial parks:

• Industrial parks support local manufacturing, which in turn creates jobs.
• Projects in industrial parks have lower development costs due to shared infrastructure.
• Industrial parks support industrialization, which leads to economic growth.

Map of industrial parks in Uganda

Based on materials from the Uganda Investment Authority website.