Uganda

Population

Population Projections (millions)

Source: United Nations Population Division, Department of Economic and Social Affairs.

Population Residing in Urban Areas (%)

Source: United Nations Population Division, Department of Economic and Social Affairs.

Youth Literacy Rates (2018, %)

Source: United Nations Educational, Scientific and Cultural Organization, UNESCO Institute of Statistics.

Labour

Unemployment (2018, % of Total Labour Force)

Source: World Bank, World Development Indicators 2019.

Labour Force (2017, % of Ages 15+)

Source: World Bank, World Development Indicators 2019.

Economy Overview

GDP

Source: World Bank, World Development Indicators 2019.

Value Added by Sector (% of GDP)

Source: AFDB Socio Economic Database.

Trade Profile

Import Partners (USD ‘000)

Source: COMTRADE Statistics.

Export Partners (USD ‘000)

Source: COMTRADE Statistics.

Uganda’s Top Import Products (USD ‘000)

Source: COMTRADE Statistics.

Uganda’s Top Export Products (USD ‘000)

Source: COMTRADE Statistics.

Investment Profile

FDI Inflows (millions of USD)

Source: United Nations Conference on Trade and Development, World Investment Report 2021

FDI Outflows (millions of USD)

Source: United Nations Conference on Trade and Development, World Investment Report 2021

FDI Inward Stock (millions of USD)

Source: United Nations Conference on Trade and Development, World Investment Report 2021

FDI Outward Stock (millions of USD)

Source: United Nations Conference on Trade and Development, World Investment Report 2021

FDI Inflows Main Source Countries (in terms of number of projects)

Kenya, United Kingdom, India, United Arab Emirates, South Africa, Nigeria, United States of America, France, Japan, and Mauritius.

Source: Financial Times, fDi Markets, 2018

FDI Inflows Main Sectors (in terms of number of projects)

Financial Services, Communications, Business Services, Coal, Oil and Natural Gas, Food and Tobacco, Transportation, Beverages, Metals, Software and IT services, and Alternative/ Renewable Energy.

Source: Financial Times, fDi Markets, 2018

FDI Inflows Main Companies (in terms of number of projects)

KCB Bank Uganda, Diamond Trust Bank, Bridge International Academies, Ecobank Uganda, United Bank for Africa (UBA), MTN Uganda, NILE Breweries (NBL), Barclays Bank, Fina Bank, and Heritage Oil.

Source: Financial Times, fDi Markets, 2018

Doing Business

Overall Doing Business Ranking

Source: World Bank, Doing Business, 2020

Starting a Business

*GNI per capita used: USD 280
Source: World Bank, Doing Business, 2020

Paying Taxes

Paying Taxes

Source: World Bank, Doing Business, 2020

Trading Across Borders

Assumptions

• It is assumed that shipment travels from a warehouse in the largest business city of the exporting economy to a warehouse in the largest business city of the importing economy.
• It is assumed that each economy imports a standardized shipment of 15 metric tons of containerized auto parts (HS 8708) from its natural import partner—the economy from which it imports the largest value (price times quantity) of auto parts. It is assumed that each economy exports the product of its comparative advantage (defined by the largest export value) to its natural export partner—the economy that is the largest purchaser of this product.
• A shipment is a unit of trade. Export shipments do not necessarily need to be containerized, while import shipments of auto parts are assumed to be containerized.
• Shipping cost based on weight is assumed to be greater than shipping cost based on volume.
• If government fees are determined by the value of the shipment, the value is assumed to be $50,000.
• The mode of transport is the one most widely used for the chosen export or import product and the trading partner, as is the seaport, airport or land border crossing.
• Time is measured in hours, and 1 day is 24 hours.
• Costs do not include tariffs.

Source: World Bank, Doing Business, 2020

Investment Regime

Legal Framework

Investment Code Act 2019 

Key guarantees in terms of investment protection include: 

• The registered business enterprise of an investor or an interest or right over any property or undertaking forming part of that enterprise, shall not be compulsorily taken possession of or acquired except in accordance with the Constitution
• A dispute between an investor and Government in respect of a registered business enterprise which is not settled through negotiations may be submitted to arbitration in accordance with the following methods as may be mutually agreed by the parties

Investment Incentives

The Investment Code Act 2091 details a list of 26 priority sectors government is focusing on to incentivize investors. The Act also emphasizes the enhancement of local content by detailing areas that warrant incentives. These include: ensuring that 60 percent of the jobs created are for Ugandans, 70 percent of materials used in production are sourced locally, production substitutes 30 percent of imports, 80 percent of products is exported and advanced technology is used and adapted in the country, amongst other areas.

Tax Incentives 

• Special Tax Allowances: 

• • Mining operations are allowed a 100% first-year deduction for capital expenditure incurred in searching for, discovering, testing, or gaining access to mineral deposits.
  • An industrial buildings allowance (5% annual) is granted to factories, hotels and hospitals.
  • The cost of acquiring an intangible asset having an ascertainable useful life is allowed a deduction on a straight-line basis over the useful life of the asset.
  • On disposal of the asset, the cost base of the asset is reduced by the deductions granted above.
  • Wear-and-tear allowances of 20% to 40% apply to most assets.

Non-Cash Incentives 

• Export Incentives:  
  • • Foreign exchange liberalization – The foreign exchange regime is fully liberalized and exporters are entitled to retain 100% of their foreign exchange earnings accruing from their export transactions.
    • Duty and VAT exemptions – There are no taxes charged on exports (zero-rated). This is meant to reduce costs for the exporters and to make exports from Uganda more competitive.
    • Market access – The Government strongly supports global economic integration as it increases volume of trade, as well as offers other economic opportunities. Because of membership, Uganda’s exports qualify for preferential tariff rates in COMESA, EAC. In addition, Ugandan products enter the European Union (EU) and US markets duty and quota-free under the Cotonou Agreement (ACP – EU) and the African Growth and Opportunity Act (AGOA) initiatives respectively.
    • VAT on exports – All exports of goods and services are zero-rated for VAT. However, exporters are required to be VAT-registered. This enables them to reclaim VAT expended on all inputs used in the process of producing and processing exports.
    • Duty drawback – The rationale for duty drawback is to enable manufacturers, and other exporters, to compete in foreign markets without the handicap of including costs of imported inputs in the final export price (the duty paid on imported inputs). This allows exports to drawback up to 100% duties paid on materials inputs imported to produce for export.
    • Manufacturing under bond – This scheme allows manufacturers to seek a customs licence to hold and use imported raw materials intended for manufacture for export in secured places without payment of taxes. It makes available working capital, which would have been tied up through paying duties immediately after importation.
    • Other incentives are available under the Investment Code, as administered under the Income Tax Act, 1997, by the URA for export-oriented investment projects.
• Export zones:  

• • A 10-year corporation tax holiday;
  • Duty exemption on raw materials, plant and machinery and other inputs;
  • Stamp duty exemption;
  • Duty drawback to apply on input of goods from domestic tariff area;
  • No export tax;
  • Exemption of withholding tax on interest on external loans; and
  • Dividends repatriated to get relief from double taxation.

Sources: Uganda Investment Authority (UIA).