Investment Climate in Uganda

Investment Climate in Uganda


Global Factors affecting the economy

The global economy is estimated at 3.9 percent in 2018, up from 3.2 percent in 2017. This is mainly due to recovery in advanced world economies, and rising commodity prices including the price of crude oil resulting in increased trade volumes.

 Regional and domestic factors affecting the economy

  • Civil conflicts in South Sudan , DRC and Somalia
  • Climate change and environmental degradation.
  • High interest rates and non-performing loans.
  • Undue Delays and inefficiency in execution of Government programmes and projects.
  • High rate of corruption.

The economic outlook

Uganda’s real gross domestic product (GDP) growth  for FY 2018/19 is projected 5.8 % compared to the 3.9 % growth for FY2017/18. The size of the economy is now UGX. 101.8 trillion equivalent to USD 27.9 billion and is driven mainly  by industry, services and public infrastructure investment. All sectors of the economy registered higher growth. Gross value added in the agriculture, forestry and fishing sector grew by 3.2% compared to the 1.6% registered in 2016/2017. Economic activity in the industry sector expanded by 6.2% compared to 3.4% in 2016/17, while services sector grow by 7.3% compared to the 5.4% registered in 2016/17.


Inflation has remained relatively low in 2017/18. Annual headline and core inflation declined to 1.8 percent and 1.6 percent in April 2018 from  6.4 percent and 5.0 percent, respectively in June 2017. The favorable supply shock triggered by good weather conditions in 2017 led to suppressed inflationary pressures leading to a fall in food crops inflation from a high of 23.1 percent in May 2017 to minus 2.1 percent in April 2018. Consequently, overall food inflation dropped from a high of 15.6 percent in May 2017 to minus 1.8 percent in April 2018.

Central Bank Rate

Bank of Uganda reduced the Central Bank Rate (CBR) by a further 100 basis points to 9% in April 2018, from 10% in June 2017.

Projected economic growth

Uganda envisions graduating from the category of least developed countries to a lower middle income country with a GDP per capita of USD 1,039 by 2020, and to an upper middle income county with a GDP per capita of 9,500 by 2040. Economic activity is projected to expand by at least 6 percent next financial year and increase to 7 percent per annum in the medium term. This higher growth will be supported by stronger cash crop yields, through reorganized agricultural activities, ICT, financial services, and efficiency gains from public infrastructure investments. In addition, oil production, regional integration, and the completion of many infrastructure projects will further support this higher growth.

Government will pursue fiscal and monetary policies that maintain macroeconomic stability and support inclusive growth, while safeguarding debt sustainability.

Fiscal policy will continue to support ongoing infrastructure investment and social service delivery. To achieve this, the Domestic Revenue Mobilization Strategy (DRMS) targets a revenue-to-GDP ratio of 16 percent over the medium term. In the long-term, our desired revenue-to-GDP ratio is 18-20%.

Structural reforms will focus on enhancing the budget process, public investment management, preparing for oil production including putting in place a strong  governance framework for the sector, and strengthening the financial sector.

Sector growth

Economic output is estimated to grow by 5.8% during this financial year, higher than the performance of 3.9% last year. The size of the economy is now Shs 101.8 Trillion equivalent to USD 27.9 Billion. This growth was the result of the following:

  • The Services sector which grew at 7.3% compared to 5.4% last financial year. This performance was mainly as a result of improvement in the financial, Information and Communications and trade subsectors.
  • The Industrial sector which expanded by 6.2% compared to 3.4% last financial year due to good performance in construction and agro-processing, and recovery in the Mining and Quarrying sub-sectors.
  • The Agriculture sector whose growth doubled during the year to 3.2% compared to 1.6% last year.

Export Earnings

Export earnings rose by 9.6% to US$ 3.93 billion in the period July 2017 to March 2018 from USD 3.59 billion a year earlier. This increase was mainly on account of a rise in the export volumes of beans, coffee, tea and maize.  Over the same period, exports to the rest of the EAC grew from USD 792.3 million to USD 943.5 million; while exports to Europe grew from USD 415.8 million to USD 466.1 million


Imports increased by 16.4% valued at US$ 5.7 billion in the period July 2017 to March 2018 from US$ 4.9 billion over the same period the previous year. This was attributed to the increase in the prices of oil imports and the increased inflow of capital goods to support domestic investment, particularly in oil and gas, electricity and roads.

International reserves and borrowing

Uganda’s international reserves at end December 2017 stood at US$ 3,654.4 million, equivalent to 5.3 months of imports of goods and services which is more than the target of 4.5 months of import cover to be achieved in 2021 as agreed in the EAC Monetary Union protocol.

Foreign direct investment (FDI) inflows more than doubled to USD 253.3 million during the quarter ended December 2017, compared to USD 122 million in the previous quarter, driven mainly by increase in investment in equities by non-residents.

The provisional total public debt stock (at nominal value) as at end December 2017 stood at Shs. 37.9 trillion, representing an increase of 9.4 per cent relative to June 2017. This growth in the stock of public debt was mainly on account of a 12.2 per cent growth in public external debt (in Shillings terms), which continues to have the dominant share of 66.3 per cent of total public debt. In December 2017, external and domestic debt amounted to Shs. 25.1 trillion and Shs. 12.8 trillion, respectively, which is an increase of 12.2 per cent and 4.2 per cent, respectively, compared to June 2017. The provisional stock of public external debt disbursed and outstanding stood at USD 6,902.7 million as at end December 2017, representing an increase of 10.8 per cent from June 2017 compared to an increase of 24.6 per cent in the corresponding period a year ago. The total external debt exposure (debt disbursed and outstanding and debt committed but undisbursed) amounted to USD 11,690.6 million as at end December 2017.

Sectoral Priorities for FY 2018/19

Increasing Production and Productivity in Agriculture in FY 2018/19, the following interventions will be undertaken to improve production and productivity in the Agriculture sector:

  1. Ensure that inter and intra Sectoral coordination and synergies are enhanced between agricultural research, supply of inputs and extension services as well as agro-processing and value addition;
  2. Improve storage/post harvest handling services and market access
  3. Expedite finalisation of the irrigation policy and strategy to harmonize interventions under provision of Water for Production under the mandate of Ministry of Water and Environment. Complementary action plan will focus on: research in irrigation technologies; strengthening measures to protect the environment to avert climate change effects on food security – tree planting, wetland restoration and enforcing EAC polythene bags regulation;
  4. Review the Operation Wealth Creation and streamline provision of inputs to ensure quality and timely delivery; and enforcement of standards.
  5. Implement the agriculture zoning strategy, specialization and value chain cluster. This will entail strengthening farmer associations or cooperatives guided by the already mapped ten (10) ecological zones and the nine (9) Zonal Agricultural Research Development Institutions (ZARDIs) to streamline provision of extension services, improve farmer sensitization and linkage of farmer associations to agro-industries;
  6. Continue promoting agriculture mechanization in the different agricultural zones through distribution of tractors and establishment of regional mechanization centers to provide repair/maintenance to the existing fleet. Government will also procure three state-of-the-art mobile tractor workshops to provide repair/maintenance on site
  7. Improving agricultural financing through the Agriculture Credit Facility and enhancing uptake of agricultural insurance policies;
  8. Enforcing laws and regulations to address the challenges of crop and livestock diseases, and, providing funds for development of the vaccine for tick borne diseases.
  9. Commodity specific interventions will target:
  • Continued implementation of the Coffee 2020 road map aimed at achieving 20 million bags of 60Kg each per annum, including supporting research interventions at the National Agricultural Coffee Research Institute (NACORI) to produce high yielding coffee varieties and disease resistant tissue culture plants for coffee as well as development of a National Coffee Bill, 2017 that focuses on developing the entire coffee value chain and enable the country consolidate its dominant position in export earnings and employment.
  • Strengthening the capacity of NARO in Agricultural research including rehabilitation of the Tea Research Institute at Rwebitaba and development of vaccines;
  • Promoting food safety and standards for both domestically consumed products and exports through enforcement of standards and enhancing regulations.
  • Aquaculture development and intensifying fisheries enforcement and surveillance to control illegal fishing and trade in immature fish;
  • Promoting collaboration between Government and the private sector on post-harvest handling; and,
  • Construction of three livestock holding grounds to support the Bombo Abattoir and two more internationally accredited abattoirs.

Real GDP Growth Rates FY 2013/14 to FY 2017/18

The real GDP growth rates for the last five  financial years are summarized as follows;

2013/14 2014/15 2015/16 2016/17 2017/18
Real GDP at market prices 5.1 5.2 4.8 3.9 5.8
Agriculture, forestry and fishing 2.7 2.3 2.8 1.6 3.2
Cash crops -0.3 4.0 7.9 7.7 5.8
Food crops 2.9 2.2 1.3 2.0 3.7
Livestock 2.7 2.9 2.8 1.6 2.0
Agriculture support services 0.5 17.6 -4.6 2.6 4.0
Forestry 3.5 1.7 4.7 -2.3 3.4
Fishing 2.1 1.5 4.8 1.7 -2.9
Industry 6.3 7.8 4.6 3.4 6.2
Mining & quarrying 5.7 18.1 12.4 -5.7 17.6
Manufacturing 2.2 11.6 0.6 2.2 4.4
Electricity 1.9 5.7 4.0 8.3 6.4
Water 6.3 6.1 6.3 6.8 6.1
Construction 12.5 1.9 7.3 5.3 5.7
Services 5.4 4.8 6.2 5.4 7.3
Trade and Repairs -1.8 3.2 3.5 1.6 6.6
Transportation and Storage 6.1 6.6 8.2 3.5 5.5
Accommodation and Food Service Activities 8.8 -0.5 5.7 7.5 6.3
Information and Communication 14.5 -1.8 14.1 13.9 7.9
Financial and Insurance Activities 17.8 10.9 9.6 2.3 8.3
Real Estate Activities 6.3 6.5 6.1 5.6 6.4
Professional, Scientific and Technical Activities 0.8 -5.6 -0.3 -3.0 5.7
Administrative and Support Service Activities 8.0 25.5 -13.9 -4.8 5.9
Public Administration 0.6 24.2 8.4 2.1 10.6
Education 4.4 5.2 7.8 9.3 6.7
Human Health and Social Work Activities 5.2 5.4 3.4 4.4 6.2
Arts, Entertainment and Recreation 6.5 5.3 -5.0 -2.4 19.1
Other Service Activities 10.7 7.9 9.2 13.3 15.6
Activities of Households as Employers 2.4 2.8 3.4 4.1 4.9
Adjustments 7.5 9.9 2.2 1.3 2.6
Taxes on Products 7.5 9.9 2.2 1.3 2.6

Source: UBOS

Why invest in Uganda?

  • Foreign investors have access to land  for investment purposes
  • Uganda has achieved macro-economic stability with low inflation rate around the target of 5% and annual economic growth averaging 6% per annum;
  • Liberalised economy with free inflow and outflow of capital;
  • All sectors are liberalized for investment;
  • Uganda gives an investor access to Eastern African market and The Common Market for Eastern and Southern Africa (COMESA);
  • Uganda enjoys a unique location at the heart of Sub-Saharan Africa giving it a commanding base for regional trade and investment;
  • Rich endowment  of rainfall, fertile soils, and favourable temperature range;
  • Unexploited mineral resources and tourism potential 
  • Government is committed to private sector led economy;
  • Uganda has a good education system  that produces trainable human resources;
  • The country guarantees security of investment;


Uganda is a Sovereign State and a member of the United Nations, African Union, the Commonwealth and a number of international organisations. The Constitution of Uganda provides for three branches of government namely the executive, the legislature, and the Judiciary with roles and powers of each of the Government properly spelt out. President Yoweri Kaguta Museveni under National Resistance Movement has ruled Uganda without interruption since in 1986. Yoweri Kaguta Museveni who has been credited with restoring relative stability and economic prosperity to Uganda since 1986 was in February 2016 democratically re-elected for another term with a vote of 60.62%.


According to the 2014 National Population and Housing Census (Census) Uganda’s population stood at 34.9 million with average annual growth of 3.0%.

According to UBOS 2018 projection report, the national population projections for 2015-2020 are as follows



2015 2016 2017 2018 2019 2020
Total population 35,492,100 36,560,700 37,673,800 38,823,100 40,006,700 41,222,200
Male population 17,337,600 17,882,300 18,449,000 19,033,600 19,635,000 20,252,000
Female population 18,154,500 18,678,400 19,224,800 19,789,500 20,371,700 20,970,200

The population is expected to reach 54 million by 2025. Nearly half of the population is below the age of 15 years and the population structure is expected to remain youthful for the next fifteen years. Many Ugandans are now living longer and better lives as summarized below;

  1. Life expectancy today is 63 years, up from 48 years in 2002.
  2. Literacy rates for adults stand at 74% rising from 68% in 2002.
  • 79% of the population has access to safe water compared to 59% over the same period.
  1. Immunization of children against measles is 82% up from 62% fifteen years ago.
  2. Per capita incomes in real terms have more than tripled to USD 773 in 2016 up from USD 250 in 2002. This is despite an increase in population from 26 million to 36.9 million people.


Uganda’s urban population has increased rapidly from less than 1 million in 1980 to 6.4 million persons in 2014, indicating a more than six fold increase and estimated to be over 7 million in 2017. The percentage of Uganda’s population living in urban areas increased from 15.77% in 2014 to 16.1% in 2015 and stands at 19% in 2017. Uganda’s urbanisation rate stands at 5.43 % per annum an indication that Uganda is becoming urbanised at a fast rate.

Doing business in Uganda

The highlights of World Bank score of doing business in Uganda are summarised as follows;

Topics DB 2018 Rank DB 2018 DTF DB 2017 DTF Change in DTF (% points)
Overall 122 56.94 56.52 0.42
Starting a Business 165 72.25 71.30 0.95
Dealing with Construction Permits 148 58.37 57.11 1.26
Getting Electricity 173 34.11 32.28 1.83
Registering Property 124 54.99 55.81 0.82
Getting Credit 55 65.00 65.00 ..
Protecting Minority Investors 108 50.00 50.00 ..
Paying Taxes 84 73.10 73.10 ..
Trading across Borders 127 62.08 60.62 1.46
Enforcing Contracts 64 60.60 60.60 ..
Resolving Insolvency 113 38.94 39.40 0.46

Credit Rating

In March 2018 Moody’s credit rating for Uganda was affirmed at B2 with stable outlook. Fitch’s credit rating for Uganda was last reported at B+ with stable outlook.


Uganda keeps open capital accounts and the law imposes no restrictions on capital transfers in and out of Uganda. Investors can obtain foreign exchange and make transfers at commercial banks without approval from the Bank of Uganda in order to repatriate profits and dividends and make payments for imports and services.


Uganda’s legal system is based on English Common Law and a number of commercial laws aiming at regulating the conduct of business are in place. All commercial disputes are required to go through mediation to reduce backlogs in the court system and the Center of Arbitration for Dispute Resolution (CADER) can assist in mediating disputes. Uganda has created a Commercial Court to deliver an efficient, expeditious, and cost-effective mode of adjudicating commercial disputes. In order to increase transparency and efficiency an “e-court environment” has been established. The government is a signatory to the Convention on the Recognition and Enforcement of Foreign Judgments in which binding international arbitration of investment disputes is recognized. Pursuant to the Reciprocal Enforcement of Judgment Act, judgments of foreign courts are accepted and enforced by Ugandan courts where those foreign courts accept and enforce the judgments of Ugandan courts. Uganda is a party to both the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID) and the New York Convention of 1958 on the Recognition and Enforcement of Foreign Arbitral Awards.

Key development challenges

  • Per capita income has been growing at only 2% annually compared with population growth of 3% per annum. This presents several challenges to future economic growth and structural transformation unless serious measures are taken to convert population growth into a population dividend;
  • Inadequate and unreliable power supply remains one of the largest obstacles to private sector investment;
  • Dealing with high rate of corruption;
  • Land fragmentation;
  • Uncertainty surrounding the recovery in global economic growth;
  • Weak commodity prices;
  • Geopolitical events in some of the key trading partners;
  • FDI flows and remittances; and
  • Excessive reliance on rain fed agriculture.

Corruption index

Uganda ranks number 151 least corrupt nation out of 175 countries and scored 25 points out of 100 according to the 2016 Corruption Perceptions Index reported by Transparency International. The government has given a commitment to decisively deal with corruption in the public service that frustrate investors.


During FY 2017/18, Government continued to play one of its pivotal roles of preserving, protecting and defending the sovereignty and territorial integrity of Uganda. The security situation is generally stable around the country but one has to take extra care to avoid opportunistic crimes. The government has guaranteed to provide the peace and security across the country. Uganda is involved in maintenance of peace and stability at regional and international level under the auspices of different legal frameworks.

Unemployment and skilled labour

According to the National Household Survey 2016/17, the size of the labor force in 2016/17 was estimated to be about 10 million and this was an increase from 8.8 million in 2012/13. The size of the working age population also increased from 16.5 to 19.1 million people. However, the contribution of paid employment to total employment has fallen. The share of people in paid employment has contracted from 47.4 percent in 2012/13 to 38 percent in FY 2016/17. The contraction affected men (from 54.4 percent to 46 percent) and women (39.1 percent to 31 percent) equally. However the employment elasticity of economic growth has significantly increased for the formal sector despite this contraction. The growth rate of formal employment has steadily improved, averaging 6.1 percent for the NDP I period (2010 to 2015). As of FY2016/17, the unemployment rate was estimated at 9 percent, a significant decline from 11 percent in FY2012/13. However, urban unemployment has remained high (21 percent in Kampala). Both the Labor Force Participation rate and Employment to population ratio experienced a significant decline of 16.1 percent and 9.1 percent respectively. The findings further confirm the agriculture sector as the main employer of the population. The sector accounted for the largest share of employment at 36 percent. This was slightly higher than in 2012/13 when it accounted for 34 percent.

Nationally, the Labor force Participation Rate (LFPR) was 52 percent and Employment to Population Ratio (EPR) was 48 percent. The LFPR was higher for males (60%) than females (46%). Similarly the Employment to Population Ratio was higher for males (56%) than females (40%). Nationally, 38 percent of persons in employment were in paid employment with a higher proportion of males (46%) compared to females (28%). Service and sales workers constituted the highest proportion of the employed population (29%).

Attitude to Foreign Direct Investment

Ugandan investment code and supporting policies, laws, and regulations have created a conducive investment climate. Uganda Investment Authority (UIA), a government agency, has the responsibility of attracting and assisting foreign investors. UIA operates a dedicated one-stop-center that helps investors to quickly comply with the investment code and the laws and regulations of Uganda. Uganda offers investment incentives for investors in four “priority” sectors of information and communication technology; tourism; value-added agriculture; and value-added investments in mineral extraction. Uganda also plans to attract investors to several industrial parks under development in various Uganda’s urban centres. Uganda Investment Authority has been mandated to establish twenty-two (22) Industrial and Business Parks (IBP’s) throughout the Country to create jobs and add value to locally available raw materials.The Namanve Industrial Park  on the outskirts of Kampala divided into four main industrial clusters: food processing, light industry and services, heavy industry, and  small and medium enterprises (SMEs)  has already attracted a number of investors. The government also provides generous incentives for industrial development. The country guarantees security of investment under the Constitution and the Investment Code 1991. Uganda is a signatory to main international investment related institutions including Multi lateral Investment Guarantee Agency (MIGA), Overseas Private Investment Corporation (OPIC) of US; Convention on the recognition and enforcement of foreign arbitral award (CREFAA), ICSID, TRIMS, GATS, and TRIPS.

Restrictions on Foreign investment

Ugandan law allows for 100 percent foreign-owned businesses and foreign businesses are allowed to partner with Ugandans without restrictions. There is no screening of foreign direct investment apart for general review of the application to ensure investors comply with the laws of the country and are accorded the necessary assistance.

Intellectual Property (IP) Rights.

Ugandan law protects intellectual property rights (IPR) and allows for investors to enforce their rights through the court system. Uganda Registration Services Bureau provides a standardized process for registering each type of intellectual property.  The enforcement of IPR however remains weak mainly due to lack of resources by the enforcement agencies. The laws enhancing the protection of the intellectual property rights include The Industrial Property Act, The 2006 Copyright and Neighboring Act and The 2010 Trademarks Act and The 2014 Industrial Property Act among others. The Uganda National Bureau of Standards (UNBS), the Uganda Revenue Authority (URA) and the Uganda Police Force (UPF) are responsible for enforcing the existing laws.

Natural Resources

The key natural resources include copper, cobalt, limestone, salt, gold, hydropower, arable land and tourism potential.

Information on Investment in Uganda

The key information on investment in Uganda is organised as follows

Uganda Vision 2040
Investment Incentives in Uganda
Investment Policy
Investment Climate
Land in Uganda
Tax Climate
Investment Facilitation
Facilitating Organisations
Business Environment
Taxation Treaties in Uganda
Economy of Uganda
Corruption in Uganda
Intellectual Property Rights
International Arbitration
Remittance Policies
Settlement of disputes
Uganda credit rating
Uganda Property rights
Urbanisation rate in Uganda
Attitude toward Foreign Direct Investment


Sources of information