"Ask ABI" QUESTION 1: As A Foreign Firm, Why Should I Invest In Or Expand Into Uganda?

 

"As a foreign firm, why should I invest in or expand into Uganda?"

 
 

AUTHORS (in alphabetical order):  Beatrice Jean Somanje, Daniel Mtombosola, Moses Kuthyola

 
 
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Geographic Position

Without question, one of the biggest advantages of doing business in Uganda is its geographic position. Uganda is located in East Africa, and it is bordered by South Sudan to the north, Kenya to the east, DRC to the west, and Rwanda and Tanzania to the south. It’s strategic location makes it the regional hub for trade, transport, and logistics. The majority of trade in Africa’s interior go to or come from the Kenyan port of Mombasa or the Tanzanian port of Dar Es Salaam … through Uganda, thanks to shared borders, transport infrastructure, and political stability.

Economic Freedom

According to the 2013 Index of Economic Freedom, Uganda was ranked as the 8th freest economy, out of the 46 sub-Saharan countries, where full repatriation of profits and 100% foreign ownership of private investments is allowed. The country’s political and economic environment is stable and consistently improving, promoting development of infrastructure and creating a secure environment for business to thrive.

Economic Position

Another major advantage of investing or expanding into Uganda is its proximity to Kenya, one of the three major economic hubs of sub-Saharan Africa. Africa has 6 of the 10 fastest growing economies in the world, according to the World Bank. The top three sub-Saharan economic powerhouses are Nigeria, South Africa and Kenya. But from an investment point of view, the markets that provide the most growth tend to be the countries beside or close to these three major economic hubs, for instance Ghana (close to Nigeria), Zimbabwe or Botswana (bordering South Africa), and of course, Uganda (bordering Kenya). These are the countries that are gaining economic momentum as a result of 1) pursuing and following in the wake of their giant neighbor’s success and 2) benefiting from the trade and capital that inevitably flows across their neighbor’s borders. Nigeria, South Africa, and Kenya may be big in economic scale, but somewhat saturated for the tastes of some. For example, as of 2016, there were 18 Japanese companies in Uganda, as opposed to 280 in South Africa, according to a JETRO study. For foreign businesses looking for fresh markets and “first-mover” opportunities, Uganda would be an intelligent choice of destination.