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Investors lose land in industrial parks

Limited access to water, electricity and roads remains a big headache in these areas

Kampala, Uganda | ISAAC KHISA | Uganda Investment Authority (UIA) has withdrawn land allocated to 164 firms in the industrial and business parks over the last five years due to non-compliance to the set terms.

The Authority’s Acting Executive Director, Basil Ajer, told The Independent in an interview that the firms lost land for failure to develop it within the stipulated period.

“Once a firm has been allocated land in these industrial parks, there are activities that need to be carried out to show that it is committed to its goal,” he said.

“The firm, for instance, should ensure that the allocated land has been surveyed, plans approved, perimeter walls constructed, among others within 18 months. However, this was not fulfilled.”

This comes exactly a year since the UIA gave firms that had been allocated land in the more than 10 industrial parks up to 18 months to prove that they are able to develop the land or lose it.

Last year, the investment promotion agency revealed that it withdrew 52.4 acres from 10 companies that failed to utilise their land in the Kampala Business and Industrial Park, Namanve, while 7.5 acres were repossessed from four companies in Soroti Industrial and Business Park.

The government has in the past years courted prospective local and foreign investors especially those in manufacturing to set up investments in the industrial parks.

However, a section of investors have been reluctant to set investments there citing limited extension of utilities such as water, roads and electricity.

Meanwhile, UIA released a report on the level of investment licenced last year, with statistics indicating a more than 50% drop in licenced projects from 512 during the FY2016/17 to 247 during the FY2017/18 citing a drop in Foreign Direct Investments (FDIs).

“The way we attract FDI is not unique from other countries, so if the global trends are declining, you expect that we shall attract less,” said Joseph Kiggundu, a consultant director at UIA.

Available data shows that FDI inflow declined from US$1.05million during 2016/17 to US$701.76million last financial year.

In terms of sector contribution, manufacturing sector registered the biggest number of licenced projects (125), accounting for over 50% of all the licenced projects in 20217/18.

This is attributed to the government policy towards value addition and incentives such as free land in Namamve and the 10 year tax holiday for foreign investors.

This was followed up closely with the mining and quarrying sector that accounted for 11%, finance, insurance, real estate and business services at 9.3% and electricity, gas and water accounting for 9.1%.

The sectors that registered the lowest number licenced firm included wholesale & retail, catering & accommodation services that recorded only 1% followed up with transport, storage and communications as well as community and social services that each registered 3%.

Central region registered the highest number of licenced projects (201), representing 81% of all the licenced projects in 2017/18. This has been driven by economic infrastructure, financial services, markets and skilled manpower which are abundant in this region.

Eastern and western region accounted for 8.1% each for the licenced firms and the rest taken up by the northern region.

Current status

A total of 33 industries are currently in operation within the Namanve, directly employing 15,000 Ugandans within the park, 87 commenced constructions whereas 121 companies are still in the pre-stage – surveying, processing of title deed plans and titles, environmental impact assessment among others.

Going forward, the public will keep an eye on Ajer especially on how he goes about the UIA work after temporarily replacing the troubled Jolly Kaguhangire  – who was recently forced to step aside by the Board of Directors.

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