Uganda has registered a 19% decline in investment according to Uganda Investment Authority’s 2014/15 investment assessment.
The relatively sharp reduction in licensed investment is attributed to the depreciation of the shilling over the dollar as well as the signing of the Anti-Homosexuality Bill in 2013.
Uganda Investment Authority (UIA) Executive Director, Dr. Frank Sebowa told journalists on Wednesday that a total of 372 projects were licensed over the last financial year compared to 461 projects in 2013/14.
“The passing of the Anti- Homosexuality Bill impacted on Uganda’s effort to attract investment especially for European and American investors. We are however glad it was later restrained by court. Also, the robust US dollar in most of the countries affected the sector,” explained Dr. Sebowa at a news conference at UIA’s offices in Namanve industrial park.
According to the assessment, the manufacturing sector registered the highest number of projects (14) accounting for 43% of total licensed projects, while agriculture ranked second with 57 projects (17%).
India has maintained its position as the biggest player in regard to foreign direct investment (FDI) with a total of 65 projects of all FDI projects last year. This has been the trend since 2011. China was the second biggest foreign investor with 55 projects. In the same year, the actual investment realized amounted to USD 456M which is 171% increase from USD 187M in 2013/14.
Dr Sebbowa referred to the increase in actual investment as a good indicator of investor confidence and an improving investment environment.
Along with growing the economy through industrialization and value addition, investment should tackle unemployment of the local citizens, he observed.
However the 2014/15 financial year also registered a 26% drop in employment with 44,763 jobs from 60,294 jobs in the previous year.
This according to UIA is due to the developments in technology which have replaced much of the manual labor.
The actual jobs realized amounted to 12,717 compared to 8,851 in 2013/14, representing a 44 percent increase.
Despite the decline, UIA remains confident that investment will slowly pick up especially with its recent interventions to ease the way of doing business. With the online One Stop Centre platform, businesses can now complete the process of registration and acquiring licenses, titles in less than a week.