Investors demand information on business opportunities
Kampala, Uganda |Ian Katusiime| Since her appointment in April, Jolly Kaguhangire, the new executive director of Uganda Investment Authority (UIA) has been in discussions with business people and government officials on how to make the country a globally competitive destination for investment.
She has set herself a target of creating one million jobs in the next four years, mainly through attracting new investments in the country’s manufacturing and agriculture sectors.
Her biggest meeting so far was an investment and consultative conference she hosted in Kampala on June 22 at which she came face to face with business people and investors and their challenges. As always, she appealed to prospective investors to contact UIA for any opportunity. She also offered space in the country’s 22 industrial parks and announced that UIA has planned regional tours to discuss investment options with local business people.
Kaguhangire also gave Morrison Rwakakamba, a public policy analyst, the role of giving the keynote address under the theme “The role of Foreign Domestic Investment (FDI) and domestic investment in the development of Uganda’s economy”.
Rwakakamba said Foreign Direct Investment (FDI) plays a major investment role in Uganda but it has limitations, including its focus on the service sector. According to him investment in the service sector does not involve huge capital investments in the country and does not contribute many jobs. He, therefore, said focusing on industries is a better option.
He also advised UIA to provide incentives for Ugandan investors.
“Ugandans are less sensitive to the political and economic risks in the country because as citizens they have a non-pecuniary interest in the investments they make in the country,” he said.
In his talk, Rwakakamba advised UIA to carry out an economic and political risk profile of the country’s business environment. He said the profile would enable the country to plan strategically to attract and guide investors; foreign and domestic.
He said as merchants of global capital are making investment decisions, investor have benchmarks they consider; including politics, legislation, and national budget priorities. He said they assess economic risk through the World Bank Ease of Doing Business Index and central bank reports, and other micro economic indicators. He said UIA should consider these as it maps the way forward for, especially new foreign investors.
He urged UIA to do analytical research on the country’s market profile including secret reports to other government agencies like Kampala Capital City Authority, Uganda Registration Services Bureau and Uganda Revenue Authority to generate information on doing business.
David Ssepuuya, a consultant and author of a new book entitled `Africa’s industrialisation & Prosperity” said Uganda needs to harness domestic savings for industrialisation rather than rely on Foreign Direct Investment. He said although lack of significant domestic savings is a major gap, money for funding industrialisation can be raised locally.
“When you add up the asset size of NSSF (Shs6.9trilion), Funds under management and other collective investment schemes, you will realise we have a pool of over Shs9trillion,” Ssepuuya said that is more than double the country’s FDI of 2016 which was Shs4.2trillion.
He also concurred with Rwakakamba saying while FDI plays a role in investment, it provides limited jobs as it remains established in the service industry.
“Manufacturing is labour intensive and it is what creates jobs,” he said, adding that FDI considers profits and not a country’s strategic and social needs.
Sepuuya added that the huge cash portfolio at NSSF can be profitably channelled towards industrialisation as long as international fund managers are engaged on how to use savings to boost industries.
The presentations by Rwakakamba and Ssepuuya set the stage for local investors to put UIA on the spot regarding its criteria for identifying investors. They advised that focus also needs to be placed on upcountry investments and Ugandans in the diaspora. They blamed UIA for not reaching out to Ugandans who have just returned or those who are still in the diaspora, saying a lot of attention is geared towards foreign investors.
UIA was also advised to generate a database of domestic investors, hire investment attaches for Uganda’s missions abroad as well as take centre stage in negotiations with development banks to spur more domestic investment.