Uganda & India: Walking the development track together
Uganda and India share a strong trading relationship but the country is now keen on redressing an imbalance with the help of greater Indian technological support. The country's investment chief lays out the landscape of what future ties between the two trading nations can look like. Uganda and India share a history. The two countries have a social, political and economic relationship that dates back to the colonial times. India has over the years been among the top five foreign direct investment (FDI) sources in Uganda. For instance, according to statistics from the UIA database of licensed investments, during the last financial year 2014/15, India ranked highest as the source of Uganda's FDI (number of projects) with projects in engineering, pharmaceuticals and ICT taking the lead. India has invested and continues to also invest in, agro processing, fisheries, pharmaceuticals (CIPLA Quality Chemical involvement in the biggest ARV producing plant in the region), construction (real estate and roads), alternative sources of energy, and services especially education (lower and higher, international and professional courses in IT) and healthcare (Norvik hospital and a number of specialised services in dental, optical and gynaecological areas). Investors of Indian and other Asian origin are influential in the financial services, telecoms and hospitality sectors. For instance most of the the top investors in the hotel industry are from India and/or Asia. Most of Uganda's imports come from Asia, with products from India comprising about 10 per cent. Uganda's exports to India are predominantly agricultural commodities like coffee, tea and legumes, wood products among others. India is among the top 10 actual and dynamic importing markets for Uganda's coffee, which ranks third among the coffee exporting countries to India with competitors including; Vietnam, Indonesia, Honduras, and China. However, the balance of trade is heavily in favour of India. Uganda's imports from India include, among others, pharmaceuticals (30 per cent of Uganda's pharmaceutical imports), bicycles and bicycle parts, automobile components, small industry and agro-processing machinery, textiles, tyres and sports equipment. Uganda Investment Authority (UIA) seeks to contribute to the change in the unfavourable trade balance, which as has been detailed is caused by the export of unprocessed agricultural products. India has opened its market for all products from Uganda, but there is a need for more technology transfer from India to Uganda in order to enable Uganda to increase on its productivity and add value to its resources. We are looking out for win-win engagements and that is why UIA is compiling bankable projects in various sectors, especially agro processing, IT, tourism and mineral beneficiation, to market to potential investors in India. What does investing in Uganda offer to potential investors from India For starters, Uganda's location in the East and Central Africa, as well as the Great Lakes region, is very strategic. It is land linked to viable regional economic blocs (EAC, COMESA and SADC) and its central position at the heart of sub Saharan Africa gives it a viable location as a base for regional trade and investment. The liberal economy allows 100 per cent foreign-owned investment and free inflow and outflow of capital. The doing business environment has improved tremendously with the establishment of a 'One Stop Centre' for investors at the UIA, from which one can register their business, be issued with an investment license, get a tax Identification Number and tax advice, acquire work permits and get environmental impact assessments, all under one roof. The government services have now been integrated into one website portal called the eBiz, which can be accessed at www.ebiz.go.ug All the developments geared at making Uganda a profitable location and easing the business environment make the case for locating business in Uganda. An investor will find a worthy partner in Uganda, which was last year named the most entrepreneurial country in the world in a report by B2B Marketplace Approved Index (for the second time running). In 2003, the Global Entrepreneurship Monitor published a study that established the same. Also last year, Uganda was ranked among the top 20 global investment destinations on Foreign Policy′s 'Where to Invest Now' Baseline Profitability Index. Uganda is reported to have improved its ease of doing business ranking by World Bank (Doing Business Ranking 2016) from 135 to 122 out of 189 economies. It is with open arms therefore that Uganda welcomes increased Indian investment in priority sectors like tourism. 'National Geographic' named Uganda among the top 20 global tourism destinations in 2013, while a recent survey by Bloom Consulting (Country Brand Ranking), ranked Uganda highly for tourism (8th in Africa) as a result of online searches by prospective tourists and investors respectively. There are tourism projects available ready for investment in the areas of tourism accommodation and the development of tourism products along the tourist circuits. Uganda invites processors to add value to this coffee. Uganda is now Africa's lead coffee exporter before Ethiopia, which has traditionally led the major exporter's pack. This makes Uganda seventh globally in 2015 after Brazil, Vietnam, Colombia, Honduras, Indonesia and India. Uganda is one of the world's major Robusta producers and Uganda-washed Arabica is being increasingly favoured by roasters and consumers around the world. There are also opportunities to add value to bananas and cotton where Uganda's produce is ranked highly in quality and quantity globally. UIA in partnership with the relevant ministries, departments and agencies have compiled and are still in the process of compiling investment projects that can be taken up by fully private companies and public private partnership arrangements. Uganda's national development priorities are in infrastructure development, energy and, most definitely, agro-processing. Return on investment is supported by various incentives as already outlined. Uganda and India did sign a Double Tax Agreement in 2003, which has been in effect since 2004. This should continue to facilitate, enhance and increase investment and trade. There are various other bilateral agreements that have been signed, including cooperation in agriculture and allied sectors. Uganda is not only a liberal economy but is one of the fastest growing economies (+6%) in Africa. The government is focused on providing an enabling investment environment in the development of transport and energy infrastructure, as well as human resource development to take up jobs created and create their own jobs. Uganda invites India as a long-term development ally to walk this development track together for the good of the people in both countries. Dr Frank Sebbowa is the Executive Director of the Uganda Investment Authority (UIA), the Investment Promotion Agency for Uganda.