A thirty member business delegation from China arrived in Kampala on Monday afternoon on a mission to scout for investment opportunities and get local companies to appreciate the diversity their companies bring into the business space.
Days after this Uganda-China investment and trade forum, Mr Basil Ajer, acting executive director Uganda Investment Authority (UIA), said the forum is expected to spur more investments from China.
“They mentioned areas of interest in agricultural value addition, information communication technology (ICT) and tourism. As UIA, we mobilise counterparts in those sectors so we expect more inflow of foreign direct investment and more cooperation between Ugandans and their Chinese counterparts,” Mr Ajer said.
Progressively, China has been among the top two sources for foreign direct investment for the last six years, and this is expected to grow in future.
“Since 2011, we have licensed investments from China now worth USD1.2b and this is projected to create at least 45,000 jobs in Uganda,” Mr Ajer said.
Most of these investments are in agricultural value addition according to UIA. Mr Lyu Xinhua, leader of the delegation and acting chairman Council for Promoting South-South Cooperation (CPSSC), said the companies’ investments would tackle Uganda’s high import bill. “Like many developing countries, for its day-to-day products, Uganda relies on imports. If the local manufacturing companies can be established in Uganda, their products will not only be able to reduce Uganda’s import bill but also meet specific local needs,” Mr Xinhua said.
The companies were satisfied with Uganda’s investment climate and expect it to improve with the current incentives in place.
“I think your legal infrastructure is very comprehensive and you have very affordable labour. I heard of the tax holidays and profit repatriation, I think these measures will indeed be attractive for investors,” he said.
However, he hinted on private ownership of land, high cost of credit and high cost of manufacturing caused by absence of infrastructure as some of the things that could hinder investment.
CPSSC and UIA will now be cooperating to visit Uganda for detailed information on ongoing projects.
UIA expressed hope for joint ventures with local companies. Mr Xinhua’s thinking was that although working with local companies turns a profit because of their understanding of the business environment, the idea must be well analysed first.
Mr Michael Galabuzi, country director East African Entrepreneurs Association, said they are pushing for modalities through which joint ventures can come to life for Chinese investments to be more meaning to the economy.