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Uganda: Finland And China Drive Country's FDI in First Quarter
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East African Business Week (Kampala)
28 April 2008
Posted to the web 28 April 2008
Edris Kisambira
Kampala
New investors from Finland and China combined to drive Uganda's foreign direct investment (FDI) value for the first quarter (January - March) of this year to US$379 million.
Uganda Investment Authority (UIA) reported last week that it had licensed 88 projects in total but the investments from Finland and China stand out.
Finland registered a single project in the real estate sector with a planned investment of $50 million while China registered eight projects with planned investment of $28,845,000.
One of the projects from China is a $10 million leather tanning business.
Presenting investment results for the period January 1 to March 31 2008, Dr. Maggie Kigozi (pictured), the executive director UIA said Finland was not a common source of investment for Uganda.
On the whole, investments were registered in the manufacturing sector, which saw new investment worth Ush300 billion ($178 million) and finance and real estate ($125.8 million).
UIA also licensed new investment in transport, communication and storage ($46.8 million), community, social and personal services ($16 million), mining and quarrying ($11.7 million).
While a lot of effort has been put into FDI, domestic investment still leads with a majority of projects licensed (19 projects with planned investment of $186 million) coming from within Uganda.
Kenya topped the FDI list in the first quarter followed Finland, China, India, United Arab Emirates (UAE), Netherlands, Australia, Russia and Armenia.
Of the FDI sources, China was the biggest mover from position number eight in the over the last three years to number three.
The investments are expected to create some 8,225 jobs and according to UIA, past experience has shown that re-investments surpass number of jobs planned.
Dr. Kigozi said that by the end of 2012, since its establishment, UIA will have created 1,000,000 new jobs for Uganda from new investments and re-investments.
Since last year, UIA has kept investment targets in sight with 2007 standing out as a sparkling performance. FDI for 2006 was $307m up from $258m in 2005. Planned investment for the same period increased by 35% from $1.7 billion to $2.3 billion in 2007.
That level of performance has been helped by the fact that since 2002, Uganda's economy has maintained stable growth in investment value with the share of investment in GDP increasing from 17.4% in 2003/4 to 22.5% in 2006/7.
Dr. Kigozi said further impressive growth rates in new investment contributing to GDP will be driven by higher private investment.
Dr. Kigozi said the crisis in Kenya did affect both trade and investment in this quarter but the return of peace in northern Uganda and southern Sudan has been a big bonus, suffice it to mention eastern DR Congo.
Meanwhile, UIA is working on a northern Uganda investment drive. The region has suffered from a two-decade war that killed all manner of economic activity, which is justification for the extra attention that UIA is giving the region.
In June, UIA will hold an investment conference in Kampala, which will focus on the opportunities that northern Uganda presents. In September, UIA will brief the Uganda North America Association (UNAA) on investment opportunities in northern Uganda while in December 2008, UIA will hold an investment conference in Gulu town (northern Uganda).
UIA director for industrial parks, Mr. Arthur Tukahirwa said 163 companies had been pre-qualified to set up business in the Kampala Industrial and Business Park at Namanve.
"A total of 163 investment projects worth $1.9b have been pre-qualified and it is estimated that they will create 30,000 new jobs," he announced.
"By the end of May we shall open their bids and award the tenders. Once we have concluded all the paper work, it is expected the works at Namanve will start by the end of June."
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Tukahirwa said phase one will include opening up of 12km of road after the completion of the Environment Impact Assessment (EIA) plan.
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