Ugandan economists and officials are displaying confidence in their country’s economy and encouraging potential investors to disregard a U.S. government advisory concerning potential business risks.
The U.S. 2023 Investment Climate Statements issued an advisory highlighting concerns about the financial and reputational risks associated with Uganda’s prevalent corruption. It also noted the passage of Uganda’s Anti-Homosexuality Act in May, a move met with condemnation from LGBTQ+ advocates worldwide.
Morrison Rwakakamba, Chairperson of the Uganda Investment Authority, a government body dedicated to promoting investment, stressed that Uganda has received favorable assessments from organizations like the Oxford University Center of African Economies, ranking it among the least risky economies on the continent. The African Development Bank’s 2023 report similarly positioned Uganda as a prime investment destination in East Africa.
The African Development Bank’s data indicates that Uganda’s gross domestic product is expected to grow by 6.5% in 2023 and 6.7% in 2024, with the assumption that any global growth slowdown will be short-lived.
Rwakakamba emphasized that existing investors are pragmatic and are well aware of the continued profitability of conducting business in Uganda, as they prioritize economic considerations over geopolitical issues and cultural debates that might be embedded in advisory reports.
The Uganda Investment Authority pointed out the significant surge in foreign direct investment over the past four years, with investors hailing from countries such as the United Arab Emirates, China, Germany, Japan, and the Netherlands, among others.
Nevertheless, Corti Paul Lakuma, a senior research fellow and head of the macroeconomics department at the Economic Policy Research Centre in Kampala, noted that the advisory presents a challenge for Uganda as it aims to attract investors. While Uganda has secured investments from China, India, and Europe, it cannot overlook the fact that the United States remains a substantial investor in the areas of health and education.
Rwakakamba defended Uganda’s position by mentioning that despite the presence of corruption, the country has implemented online mechanisms to facilitate direct interactions between potential investors and Ugandan officials, seeking to eliminate intermediaries who demand bribes.
He also underscored the importance of considering the evolving global landscape in terms of diversity and inclusivity, emphasizing the need for Uganda to adapt to the changing world order.
In August, the World Bank announced that Uganda’s Anti-Homosexuality Act was in conflict with its principles and stated that it would halt new loans to Uganda until measures to prevent discrimination in World Bank-financed Ugandan projects were introduced.