US hails Uganda as favourable investment destination

A new report by the American Embassy in Uganda says the East African nation has favourable climate for foreign investment.

Published on the embassy website on Aug. 11, the report says Uganda’s ideal climate and oil prospects make it a good place to invest in.

“With a market economy, ideal climate, ample arable land, a young and English-speaking population, and ongoing development of fields containing at least 1.4 billion barrels of recoverable oil, Uganda offers numerous opportunities for investors,” the report says. 

According to the report, in 2022, Uganda lifted all restrictions that had been imposed to curb the spread of COVID-19, which inspired confidence in the economy.

“In the Fiscal Year (FY) 2021/22, Uganda’s economy grew by 4.7%, a slight improvement from 3.5% in FY 2020/21. According to the BOU, Foreign Direct Investment (FDI) increased by 37% to $1.4 billion in 2022 compared to $911 million in 2021. The growth in FDI was influenced by oil sector project-related spending,” the report adds.

The report also quotes the country’s central bank forecasting that pre-oil investment will average $2 billion annually until first oil is achieved in 2025. 

“Uganda maintains a liberal trade and foreign exchange regime. Uganda also sustained liberal policies even as commodity prices rose, and policymakers ignored political pressure to implement a subsidy regime to cushion the population from rising prices,” the report states.

The report credits the IMF’s 2022 Extended Credit Facility (ECF) to the government which helped the country deal with the COVID-19 crisis and boost private-sector led growth.

“As the economy continues to recover to pre-pandemic levels, Uganda’s power, agricultural, construction, infrastructure, technology, and healthcare sectors present attractive opportunities for U.S. business and investment,” the report says.

In addition, the US embassy applauded President Yoweri Museveni and government officials for vocally welcoming foreign investment in Uganda.

Uganda is also hailed for the legislative front’s efforts by passing amendments to seven existing laws to remove Uganda from the Financial Action Task Force (FATF) grey list. 

“The amendments to Trustee Incorporation (Amendment) Act 2022, The Partnerships (Amendment) Act, Anti-Terrorism (Amendment) Act 2022, Insolvency (Amendment) Act 2022, Cooperative Society (Amendment) Act 2022, Anti-Money Laundering (Amendment) Act 2022, and Companies (Amendment) Act 2022 aimed at improving anti-money laundering and combatting the financing of terrorism (AML/CFT),” the embassy notes.

The embassy further hails government for improving its services departments and agencies such as the Uganda Revenue Authority, Uganda Investment Authority and Uganda Export Promotions Board among others.

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