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Uganda’s Golden Opportunity On The Investment Horizon

By Claire Moraa

  • Uganda has secured more than $1B in Foreign Direct Investment (FDI) from the UAE in just two years
  • FDI plays a significant role in Uganda’s economy, contributing over 4% to its GDP

Uganda has been working behind the scenes and it seems to be paying off. The country just scooped the award for best investment destination in Africa beating six other contenders. And it’s not the first time it is bringing the award home. In 2023, the country was awarded the best investment destination in East Africa. These efforts seem to be paying off as its FDI inflows also increased from $1.36 billion to $1.5 billion in 2023.

What’s Next: Uganda is still a third-world country but an acknowledgment as a prime investment destination signifies the country’s potential for economic growth and development. Among the reasons why Uganda snatched this top position is its agricultural sector. At least 68% of Ugandans work in the agricultural sector and contribute to a fifth of its GDP. The proceeds to their vibrant agricultural economy also brings in the big bucks as it is Africa’s top coffee exporter and eighth worldwide. So what is Uganda doing that others are not? To stimulate economic growth and development, Uganda is focused on promoting specific sectors with high potential for FDI. For instance, agriculture and green projects so its not surprising that a solar project is among those that brought the top investor award home.

The Ugandan government also offers various incentives to attract FDI, such as tax holidays, tax exemptions or reductions and a favorable business environment. It may seem an easy feat at face view but Uganda has been on the spot especially from investors. Recently, the World Bank put Uganda loans on pause over anti-LGBTQ laws. However, despite these sanctions, the country has surprisingly been able to keep its head above water. It is growing at an unprecedented rate and its economic growth is set to go from 5.3% in 2023 to 6.0% in 2024.

Situational Awareness: Recognition as an attractive investment destination elevates Uganda’s global visibility and credibility within the international investment community. This can lead to partnerships with multinational corporations, increased foreign direct investment, and collaboration with global financial institutions. Uganda should leverage this recognition and build on this momentum. It can capitalize on it by implementing strategic measures to create an enabling environment for investment and sustainable development.

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