Kampala — The attractiveness of Uganda as an investment destination needs to be made a priority if the country is to witness an increase in licensed projects, an expert has said.

This comes on the heels of an abstract report that was released by the Uganda Investment Authority (UIA) last week showing that investment projects for the FY2011/12 declined by 29.6%.

Mr. Lawrence Bategeka, a Senior Research Fellow, Public Sector Policy at the Economic Policy Research Center says that government needs to put emphasis into attracting investment by reducing red tape.

"There's no way you can grow an economy without investment. We need to look at both the foreign and domestic investments during the year to ascertain the declines.

"I am not surprised that there was a drop in domestic investments given the economic climate at the time but what needs to be done now is to attract as much investment as possible," he told East African Business Week.

He however did not agree with reports that suggested that the allegations of corruption and fraud would further compromise planned investments going forward.

"Public service management has nothing to do with investor confidence. We just need to ensure that there's a conducive environment for the investors to set up here," Bategeka said.

The report released by the investment body indicated that the overall investment performance for Uganda as measured by the number of licensed projects for the Fiscal Year 2011/12 reflects a decline in the number of licensed projects compared to 2010/2011.

"In 2011/2012, 236 projects were licensed compared with 335 projects licensed in 2010/2011.

"The 29.6% decline in the number of licensed projects between the two fiscal years resulted from the introduction of new requirements for acquisition of the Investment license such as attachment of copies of the tenancy agreements, land titles, bills of lending, bank statements and bank reference letters.

According to the report, the top destinations for investment by value were Electricity, Gas and Water, with an estimated US$ 564 million. In contrast the top destination for job creation was Finance, Insurance, Real Estate and Business Services, Manufacturing and Agriculture.