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Uganda among top 20 FDI destinations in 2024

Peter 19th Nov, 2024 Economy Business Edge Reporter
Uganda among top 20 FDI destinations in 2024

Engineers inspect the first batch of pipes for the East African Oil Pipeline (EACOP) on arrival in Uganda recently. FILE PHOTO


Uganda has been named among the top 20 investment destinations on the African continent in 2024.

The report titled; "Where to Invest in Africa," is compiled by Rand Merchant Bank (RMB) of South Africa.

The report, which provides an in-depth analysis of investment opportunities across African countries, assesses economic conditions, growth potential, and other factors influencing investment decisions in various sectors throughout Africa.

  • It has ranked 31 African countries, which jointly account for 92% of Africa’s GDP. It put Uganda in the 19th position on the continent, behind Kenya (11th), Tanzania (12th) and Rwanda (15th).

The two small island economies of Seychelles and Mauritius rank first and second as the most attractive investment destinations on the continent, while the significantly larger economies of Egypt, South Africa, and Morocco rank in third, fourth and fifth places respectively.

The scorecard draws on 20 different metrics spanning four measurement pillars, drawing on publicly available data sets from global institutions, including the World Bank, the IMF, the African Development Bank, the United Nations, and the International Labour Organisation.

  • Among the 31 countries, Uganda’s best score was in the category of ‘Economic Performance & Potential’ where it was ranked 9th among the 31 countries, ‘Market Accessibility & Innovation’ (19th), ‘Economic Stability & Investment Climate’ (20th), and Social & Human Development (19th).

The report notes that the significant drivers of Uganda’s positivity in 2024 include an oil-related construction boost, solid agricultural growth, raised private investment, gold exports (more than one third of the export basket) and a post-COVID-19 tourism recovery.

“However, these positives are countered by some low scores that move Uganda to a final ranking of 19th. Its poorest positioning is 28th for import concentration, which leave it vulnerable to shocks in the price of its main imports. Urbanisation is low (27th overall), with just a quarter of the country living in urban areas,” the report reads in part.

It adds; “Uganda's political landscape and regulatory environment have sometimes been flagged as concerns for investors. The country's legal and regulatory frameworks, although improving, can be seen as inconsistent or challenging for businesses.”

It also notes that although the government has made strides in infrastructure development, Uganda still faces challenges in transport and energy infrastructure, which can impact business operations and investments.

  • Uganda, however, is cited as one of the countries with ‘People Potential’ - markets with a young and growing demographic, creating a sizeable consumer base and a future workforce.
  • The ‘Where to Invest in Africa’ report is highly regarded and widely followed, particularly among investors, business leaders, and policymakers focused on the African continent.

To a typical investor, Uganda's performance may be viewed as reflecting a mix of opportunity and caution.

While the country has been credited for its economic potential, particularly in agriculture and natural resources, investors are often advised to consider the broader political and regulatory environment when making investment decisions.

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