A wide variety of sectors await development

WITH LESS than 30 percent of the country’s 18 million hectares of arable land under cultivation and good market prospects for its produce in neighboring countries and in Europe, the agricultural sector is the leading candidate for investment. Opportunities range from agribusiness, forestry and fisheries to food processing.
Uganda’s high-quality cotton makes it particularly well placed to benefit from the opening of the U.S. market to textile exports under AGOA. “Now we have an opportunity to export apparel to the U.S., but we need investment,” says Maggie Kigozi ,Executive Director of Uganda Investment Authority (UIA). “There is a future opportunity to supply textiles to all the countries around us–to Kenya, Lesotho, South Africa and Tanzania–and we are marketing it.”

Uganda is a member of the East African Community (EAC), together with Kenya and Tanzania, and the Common Market for Eastern and Southern African States (Comesa), a 21-nation trading bloc of more than 385 million people. Trade within Comesa is tariff-free.
One company which has been quick to take advantage of AGOA is the Sri Lankan Tri-Star Group, which has recently established a factory near Kampala. Tri-Star is targeting the U.S. market, which has already placed in an order for 1.6 million garments to be delivered by December.
AGOA creates opportunities for other products as well as textiles. For example, horticulture is expanding–rising in value from $2.3 million in 1995 to $10.9 million in 2001. “This is a sector in which Uganda can do very well and can market through AGOA,” says Dr. Kigozi.

Manufacturing is one of the fastest-growing sectors, with opportunities in beverages, leather, tobacco processing, paper, textiles, pharmaceuticals and assembly of electronic goods. The UIA has been overseeing construction of an industrial and business park at Namanve, east of the capital, Kampala, that is designed to be a center of excellence in industrial and manufacturing services.
Mining is another potentially profitable area for investment. Uganda has barely explored mineral deposits of gold, iron ore, tin and phosphates, and the search is on for petroleum and natural gas. “We already have a Canadian company exporting vermiculite, which is used as fertilizer, to the U.S. duty free,” says Dr. Kigozi.

Other major areas in need of investment include infrastructure and tourism (see pages 7 and 8). Looking further ahead, information and communications technology (ICT ) is a sector that is beginning to open up. ICT is already being integrated into the education system to produce a computer-literate labor force.
Another area with development prospects is services. “We hope to become a hub for financial services and we are already a hub for education,” says Dr. Kigozi. “We have many students from Kenya, Tanzania, Sudan and Rwanda because they like the traditional British education system, which we have retained.”