KAMPALA
The Chairman Board of Directors for Uganda Investment Authority, Morrison Rwakakamba has said there is untapped potential and significant opportunities in investing in agriculture, mining and ICT in Uganda.
“Owing to the stable political and economic environment, investing in Uganda is attractive, profitable and provides significant benefits,” said Rwakakamba
He was speaking at the Uganda – South Africa Investment summit at Speaker Resort Munyonyo when he said agricultural key commodities such as coffee, cocoa, maize and bananas require deliberate value addition and have had good yields at a national level over the years.
“Agricultural value addition is profitable and provide a huge investment opportunity for investment,” he said
“Studies by UIA show average earnings before interest and tax between 33-35% in key export crops; coffee, cotton, cocoa, Maize, Banana among others. The average estimated payback is 5 years,” he added
According to the researched figure, Rwakakamba notes, “a hectare of Coffee plantation yields about 3.4 Metric Tonnes, and at an average price of USD1,370 MT, there is a huge processing opportunity of 1.3million MT valued at USD 1.87 billion per year.”
Meanwhile a hectare of Cocoa, as presented by Rwakakamba, has the potential to generate 17.3 million Metric Tonnes at an average price of USD 2,175 per MT of dried cocoa beans, resulting to a processing potential of 1.2 million MT valued at USD 2.64Bn per year.
“Establishing fish cage farming in Lake Victoria and L. Albert provides have potential production volume of 18.3 million MT valued at USD 31.8 million. Similarly, investment in fish farming provides an import substitution of 86,000 MT of fish feed valued at USD 112.8 million per year,” he noted
Sesame has production potential yield of 1.25 MT per hectare and at the market price of USD 1,876 per metric tonne, the processing potential is USD 186 million per year.
Soya beans has production potential of 2.5 metric tons per hectare at the current price of USD 556 per ton presenting a processing potential of USD 290 million per year.
Beans has a production potential yield of 1.8 metric tonnes per hectare at a price of USD 982 per MT of dried beans offering processing potential of 467,000 metric tonnes valued at USD 468 million per year.
He listed other lucrative farming areas like milk (USD$6.1bn), maize (USD$2.7bn), Cassava (USD$7.4bn), poultry (USD$26.6m) and rice (USD$2.7bn).
According to him, the mining sector in Uganda has over 300 Million Metric Tons of iron ore with the untapped value of USD$15.6Bn, gold untapped reserves of 221 Metric Tons valued USD$3.4bn, Copper, Cobalt and Nickel potential is 6 Million Tons with 100% untapped reserves valued at USD 181bn, which makes it a profitable area of investment.
He urged local and foreign investors to invest in information communication technology (ICT) park such as establishment of incubation centre, business process outsourcing centre, innovation centre and other ancillary services noting that there is a huge investment opportunity with average return in excess of 30%.
The UIA Board chair further highlighted benefits of investing in Uganda including tax subsidies and large domestic market.
“Uganda is strategically located in the heart of Africa, and therefore grants immediate access to a large and growing domestic market of nearly 45 million people and an estimated 300 million people in the EAC, including the DRC,” he said
He added, “beyond the EAC, through COMESA, investors can access a market of over 700 million people. Our ratification of the African Continental Free Trade Area (AFCTA), which removes barriers to inter and intra Africa trade makes us a perfect launch pad into the wider African market- whose population is 1.3 billion and expected to stretch to 2 billion people by 2050.”
“Uganda has a competitive tax and non- tax incentive regime which including a 10-year tax holiday for investors; Agriculture sector (both commercial and value addition sector), the developers and operators in the Industrial Parks, manufactures who export 80% of their production outside the domestic market (i.e. outside the East African Community market.”
There is also Import duty exemptions on plant and machinery;100% allowable expenditure on training 100% allowable expenditure in research and development;100% cost recovery on exploration, development and production costs expenditure on mining operations
The Uganda-South Africa Trade and Investment Summit organized by the Government of Uganda, MTN Group, Absa Bank Uganda and various South African owned business entities. The discussions were focused on how to improve relations between the two countries with the aim of enhancing bilateral trade and ultimately economic growth.
