According to this report titled ‘Performance Report of Actual Activities for Quarter 3 (January – March, 2020) Financial Year 2019/2020’, released by the UIA Acting Director-General Lawrence Byensi, the entity also projects a severe reduction in job creation as a result of the effects of COVID-19 on the economy and is conducting a survey to establish how various companies have been affected by the Pandemic.
Here is the UIA report, which is evidence that the COVID-19 lockdown has had very significant effects on investment in Uganda and that investor’s need government intervention;
Performance on Licensing of Investments and Investment Outlook due to COVID-19 on Job Creation
There has been an improvement in registered companies and planned values of the licensed projects were 75 projects worth US$ 302.6 million. For the last three quarters, from 226 licensed projects worth US$ 751.3 million.
The report also indicates that the Construction / Real Estate, Accommodation / Tourism, and other Services sectors continue to constitute a higher percentage of licensed projects than the agri-related industries during the last quarter.
During the last quarter, the licensed companies planned to create 7,551 jobs, of which 1,428 were by DDI and 6,123 were by FDI. Due to the precautionary measures undertaken by Uganda and countries globally to curb the spread of the COVID-19 pandemic, there has been a slow down on the response to the investment promotion activities of the Authority, as well as on the implementation of the licensed investments.
UIA envisages a reduction in the creation of jobs if the interventions under discussion by the Government are not implemented. Cumulatively the planned jobs in the last 3 quarters total to 23,055 of which 7,716 are being created by DDI and 15,339 are created by FDI. The numbers are significantly below target considering the investment licensed last financial year planned to create about 60,000 jobs.
UIA expects a slowdown in implementation considering a number of investment owners were caught up in their home countries; various company staff were also caught up away from their homes and work, interruptions in transfer of investment funds; and negotiations in some join venture projects were interrupted.
The slowdown effects can be mitigated in the short and long run by providing more support to the existing investments to facilitate expansions and diversifications, as well as enhancing the domestic investment sector.
UIA is undertaking a survey on the impact of the COVID-19 on investments in order to further inform Government policy interventions. The survey ends on 15th May 2020. Preliminary feedback from most entities indicates that it is too soon for them establish the full impact since the country and its trading partners have been under lockdown.
According to them, they will be able to know the impact when economic activities after they have established how the policy interventions will facilitate businesses to get back on their feet. This refers to sectors that have been as hard hit as tourism, transport, Manufacturing and agro processing.
An analysis of the investment data indicates that the reduction in job creation will not only be occasioned by the reduced or slow implementation caused by the COVID-19 but the type of jobs and investment funds required. Fifty two (52%) percent of the projects licensed are in manufacturing and light manufacturing, while only 4% are in agri-related industry.
A number of manufacturing firms are beginning to employ automated machinery hence requiring less man power. Existing and especially, domestic investors are better placed to invest in labour intensive industry like the agri sector for export and import substitution. It is therefore imperative that DDI is enhanced through Development Funds as has already been proposed.
Policy Advocacy
UIA facilitated Presidential Investors’ Roundtable (PIRT) Technical Working Group meetings during the last quarter, which culminated into a meeting on 10- 12 March 2020 chaired by H. E. the President, at State House Entebbe.
The priority areas under discussion included: Oil and Gas, Mining and Mineral value addition, Agricultural value addition, Tourism, and Competitiveness. The TWGs have continued to meet during the COVID-19 Lock-down to develop proposals on intervention policies aimed at mitigating the impacts of COVID-19 precaution measures on investments in the listed sectors.
The proposals have been submitted to the office of Prime Minister and a meeting between the investors and the Rt. Hon Prime Minister is expected soon. UIA is happy to note that some of the proposals have been agreed and passed like the VAT exemption on services offered in hotels and lodges up country.
One Stop Centre Activities
Under the Investment Code 2019, UIA has been mandated to provide One Stop Centre services for investors, which has improved the ease of doing business significantly. Since the Financial Year 2019/20 began the One Stop Centre services have registered a number of key achievements, key among them include:
a) The beginning of the development of call centre services to ease engagement between UIA and investors. This is in addition to the online facilitation of investment registration and licensing
b) The implementation plans for continued integration of the eBiz platform commenced this quarter following the signing of the support and maintenance contract. The first phase of meetings have included KCCA, URA and NEMA;
c) The number of clients utilizing the online services in Q3 were 29,500 against an annual target of 30,000. Cumulatively the first 3 Quarters were 79,000clients.
Industrial Parks
The current operational Industrial Parks under UIA’s jurisdiction include:
Kampala Industrial Business Park (Namanve), Luzira Industrial Park, Bweyogerere Industrial Park, as well as the Industrial and Business parks in Jinja, Mbale, Soroti, Mbarara and Kasese. Other parks sites are in the process.
UIA is happy to inform stakeholders on the some of the achievements registered during the last quarter just before and during the current lock-down. These have been in collaboration with the relevant service MDAs and they include:
a) The extension of a 2 Kilometres Power line in the Kasese Industrial and Business Park.
b) Renovation in the Work spaces in Mbarara Industrial SME Park.
c) There is commendable progress on the Infrastructure Development of the Kampala Industrial and Business Park (KIBP) under funding from UK Export Finance (UKEF).
The project ground-breaking ceremony was held on 12 Jan 2020 at Namanve and was attended by the Hon. Minister for Overseas Development, UK Government as Chief Guest, hosted by Hon. Evelyn Anite – Minister of State for Privatization and Investment, MFPED and Board Members. The function was attended by various Investors who have secured plots of land in Namanve.
Since the ground breaking ceremony UIA working together with MFPED has worked tirelessly to fulfil all the terms and conditions set by the financier, UK Export Finance (UKEF).
Just last week (5 May 20) the first partial disbursement was paid to the Construction company, Lagan Dott JV Uganda Ltd. The second partial payment is expected in the last week of May 2020.
The development of the Infrastructure project will include: a network of tarmac roads, bridges; traffic management systems and solar lighting; water distribution network including a reservoir; sewerage network, waste treatment system including for solid waste; power supply systems (grid power and solar); fibre optic network; a close circuit television network; workspaces for Small and Medium Enterprises (SMEs); fire-fighting systems; and other facilities. The developed park will contribute significantly to Uganda’s development through industrialization and creation of jobs. It is estimated that the project will create 25,484 direct jobs in the construction phase, a further 39,800 in the short term and over 200,000 jobs once the industrial park is fully operational.
UIA has the target of developing 22 industrial and business parks and five innovation parks throughout Uganda.
Facilitation of SMEs
Small and Medium Enterprises are the backbone of many developing economies and in Uganda, they provide for the employment of a larger segment of Ugandans. In order to enhance their contribution to the economy, UIA strategically focuses on their development in liaison with relevant private and public entities.
Some of the activities undertaken during the last Quarter 3 include:
a) The creation of six (6) District Investment Committees (DICs); these are required to attract investment away from the urban areas and enable the implementation of investment all over Uganda to promote regional balanced investment.
b) The profiling of 2,395 SMEs into the UIA SME database; this enables UIA to cluster SMEs for linking to markets and potential partner, as well as the development of value chains which enhances their growth
c) Four (4) business skills training were undertaken in Ishaka, Mbale, Gulu and Kampala;
d) Value Addition Clusters were formed for silkworm farmers and Apiary were formed in Kasese and Lira Districts, respectively.
e) UIA has also developed 50 business ideas for SMEs to enable individuals and companies to either diversify or begin new businesses in the wake of the post COVID period when people may be looking for viable businesses to invest in.
The COVID-19 Pandemic
UIA would like to use this opportunity to assure the business community as well as those looking to set up investments, that UIA remains open for business during this Covid-19 lock-down, through the eBiz online One Stop Centre services on www.ebiz.go.ug through which licenses can be issued. Face to face meetings are also being undertaken through the online ZOOM meeting systems.
We would like to urge all investors who have not responded to the UIA survey which is assessing the impact of the COVID-19 on their operations to do so, as we aim to establish together the solutions that will mitigate the negative impacts and inform Government on policy interventions to keep companies, not only afloat but thrive as we focus on strengthening existing business.
For more information, don’t hesitate to contact us at [email protected]
