UGANDA- TURKEY INVESTMENT, TRADE, INDUSTRY AND TOURISM
SPEECH BY THE CHAIRMAN BOARD OF DIRECTORS, UGANDA INVESTMENT AUTHORITY
Mr. MORRISON RWAKAKAMBA
MAY 12, 2022
H.E the President of Uganda (Mr. Yoweri Kaguta Museveni),
Honorable Ministers Present,
H.E. the Ambassadors
The Turkish and Ugandan Business communities
Government Officials Present,
Ladies and Gentlemen,
On behalf of Uganda Investment Authority, I thank the Government and business community representatives of Uganda and Turkey for successfully participating in the Uganda – Turkey Investment, Trade, Industry and Tourism Summit.
The summit signifies Uganda’s consistency and commitment to private sector development and further indicates the renewed focus to further increase the profitable execution of Uganda’s abundant investment potential. It also enhances the partnership between Turkish and Ugandan Business community. From the go, I want to state that our laws and practice facilitate joint ventures between Ugandan Companies and Foreign Companies. This practice combines context, on-ground experience – and expertise. This practice builds robustness of businesses with potential for global reach. To Ugandan businesses and Turkish businesses here we have set up deals rooms at this conference for you to engage and seal profitable joint venture deals.
Turkey – African business engagement began in 1500s. Then Ottoman Empire opened trade routes through Egypt to Kanemobunu Empire. Today Turkey is pivoting beyond trade with Africa to investment. Investment is more transformative because it delivers balanced benefits.
Uganda and Turkey have enjoyed warm and cordial bilateral relations since 1969 and have implemented several joint projects in the Education, Agriculture value addition, Environment, Infrastructural Development, ICT and Construction spheres through the Turkish Cooperation and Coordination Agency (TIKA). As a result of these and other efforts, the trade volume between both countries increased to US$71 million in 2021, up from US$63 million in 2020. In 2021 alone, Turkish exports to Uganda increased by 26% and Uganda’s exports to Turkey increased by 418%.
The Uganda Investment Authority is therefore keen to attract more Turkish companies and businesses to invest in Uganda’s economy, specifically in; Agriculture and Agro Value Addition, Education, Infrastructure, Health, ICT among others. Likewise, Turkey is happy to offer a ready market for many Ugandan products including coffee, tea, processed fruits, fish, handicrafts among others.
Investment in Uganda is attractive and provides significant benefits;
- Uganda has proven itself to be highly stable country over the past 30 years: “Under H.E. President Yoweri Museveni, Uganda has experienced political stability, democratic progress and economic growth” (Source: US Department of Commerce, 2017). Uganda if fully peaceful and secure – border to border. This continues to guarantee investors long term confidence.
- According to the latest datasets from the World Bank, Uganda has one of the lowest crime rates and most stable inflation rate in East Africa – averaging 4.89%.
- Uganda is the most open economy to FDI within the EAC. There are no restrictions on ownership of investments, movement of capital or foreign exchange. FDI track record shows net FDI in flows of nearly USD 1bn a year on average (Source: World Bank)
- According to Benchmark from Financial Times Limited; Uganda has an excellent working and living environment: Rated as the 3rdmost welcoming country in the world and 4th best country in the world to visit. Uganda has excellent housing and international schools and the lowest cost of living in the region.
- Uganda has a robust young and trainable population. Uganda has the fastest growing work force in the region and flexible labour regulations, a key advantage for companies investing in labour intensive operations. Average annual growth, 2018-2022 was 3.97%. The average labour costs for unskilled and skilled production operatives in the agribusiness operation labour costs in Uganda excluding social security costs is USD 440, which is the lowest in the EAC region.
- Uganda’s electricity costs are competitive at 80% of Kenya’s costs. The average industrial cost per kwh for large industrial user in 2019 is USD 0.085 and off peak at USD O.05 Cents.
- Property costs in Uganda are competitive with industrial shed monthly rents in the range of USD 4-6 per sq.
- Large and growing domestic market of nearly 45 million people, strategically located in the heart of Africa, with a combined market population of over 700 million in the East African Community, and COMESA Region.
Recently, the EAC welcomed the DRC into its growing family, giving investors in Uganda access to new markets and opportunities for growth, the new EAC now offers a combined market-driven economy of 266 million people and a GDP of $243 billion. The EAC now stretches from Indian ocean to Atlantic Ocean.
Uganda has also ratified to the African Continental Free Trade Area, removing barriers to inter and intra Africa trade. Africa,s population is 1.3 billion – expected to stretch to 2 billion people. The global trend for innovation, agile and robust market is in Africa.
This large continental market access is supported by access to external markets under special agreements with over 6000 products eligible for US markets under Africa Growth and Opportunities Act, and Quota free and tax-free access to all products into the European Union under EBA (Everything else except Arms. This is the right time for enhancing the partnership and investing in Uganda.
Our valued investors begin their journey by applying for and being issued with an investment license. Through this license, investors gain access to incentives to assist them commence operations in the county. They include the provision of land in serviced industrial parks, generous and competitive tax incentives and coordinated institutional support from over 13 government agencies at UIA’s One Stop Centre.
Uganda has robust institutions to deal quickly with business disputes. The Commercial court prioritises mediation and abitration to solve business disputes.
We give free land in industrial parks. The investment land Bank is stretching over 16 square miles. Government of Uganda has deployed resources to make these parks fully serviced with industrial electricity, industrial water, tarmac roads, high speed internet and industrial waste treatment.
Globally, Uganda is enriched with a competitive tax incentive regime which include;
- The 10-year tax holiday for investors; Agriculture sector (both commercial and value addition sector), the developers and operators in the Industrial Parks, manufactures who export 80% of their production outside the domestic market (i.e. outside the East African Community market),
- Import duty exemptions on plant and machinery,
- 100% allowable expenditure on training
- 100% allowable expenditure in research and development.
- 100% cost recovery on exploration, development and production costs expenditure on mining operations.
- Tourism specific vehicles are exempt from import taxes; Hotel equipment, fixtures and furniture are exempt from taxes at importation; VAT is exempt on accommodation in Tourist Hotels and Lodges located up-country.
Uganda is guided by the triple bottom-line of People, Profit and Planet.
On behalf of Uganda Investment Authority, allow me to thank you for honouring our invitation and to be part of Turkey- Uganda, Investment, Trade, Industry and Tourism Summit.
You are welcome to invest and do business in Uganda.
God bless you and happy deliberations.