According to economists in Uganda, the country remains an attractive place for investment, despite the advisory issued by the United States.
Economists and officials from Uganda are displaying optimism in regards to the nation’s economy and are advising investors to disregard a warning from the U.S. government about potential risks associated with conducting business in the country.
The warning in the U.S. 2023 Investment Climate Statements cautioned about the potential financial and reputational consequences of widespread corruption in Uganda.
The announcement also mentioned that Uganda passed the Anti-Homosexuality Act in May, a decision criticized by LGBTQ+ activists around the globe.
Chairperson of the Uganda Investment Authority, Morrison Rwakakamba, reported to VOA that Uganda has been ranked as one of the least risky economies in Africa by organizations like the Oxford University Center of African Economies. This government agency is responsible for promoting investment in the country.
According to the 2023 report from the African Development Bank, Uganda has been ranked as one of the leading investment options in East Africa.
The African Development Bank reports that Uganda’s gross domestic product is expected to increase by 6.5% in 2023 and 6.7% in 2024, as long as any potential global economic slowdown is temporary.
According to Rwakakamba, the present investors are logical and are aware that they will keep earning profits in Uganda.
According to the speaker, investors are primarily interested in financial opportunities and are not influenced by geopolitical concerns or cultural conflicts mentioned in the advisory. They also advise American investors to consider opportunities in Africa, particularly in Uganda, due to its market and potential for return on investment. The advisories do not deter their confidence in investing in these regions.
The Uganda Investment Authority reported a significant increase in foreign investment from countries such as the United Arab Emirates, China, Germany, Japan, and the Netherlands in the past four years.
Unfortunately, according to Corti Paul Lakuma, a senior research fellow and head of the macroeconomics department at the Economic Policy Research Centre in Kampala, the advisory poses a setback for Uganda as the country is still seeking to draw in investors.
Lakuma stated that despite receiving investments from China, India, and Europe, Uganda cannot ignore the fact that the United States remains the largest contributor to social and public funding for health and education.
According to Lakuma, while other countries may also have dependable investments, they differ from those made by America. The investments made by America have longer repayment and return periods, which not many countries are willing to take on due to the risk involved.
Rwakakamba stated that while corruption exists in Uganda, the nation has implemented digital systems that allow direct communication between potential investors and Ugandan officials. This aims to eliminate intermediaries who request bribes.
Uganda has faced significant opposition for the Anti-Homosexuality Act, which has been deemed as the most severe legislation against the LGBTQ+ community globally.
Lakuma suggested that Uganda should possibly reconsider the legislation.
“The increasing awareness and importance placed on diversity and inclusivity in the world has led to a demand for sensitivity from our lawmakers,” he stated. “We cannot exist in isolation, despite our desire to preserve our cultural and moral beliefs. It is crucial to also take note of the evolving global landscape.”
In August, the World Bank expressed concerns that the Anti-Homosexuality Act went against its principles. The bank announced that it would suspend any new loans to Uganda until it could implement measures to eliminate discrimination in the projects it funds in the country.