Business Opportunities in Uganda

The Ugandan economy grew by 5.7 percent in fiscal year (FY) 2013/14, up from 5.1 percent the previous year. Economic growth is expected to accelerate six percent in FY 2014/15. The country however still is highly dependent on foreign aid. Direct budgetary support from donors makes up about 19 percent of the Ugandan budget. However, many donors, including the U. S., have moved away from direct budget support to the Ugandan government and provide millions of dollars in aid to NGOs, contractors, and other civil society organizations that are not reflected in the budget. In 2012, total trade was $9.3 billion, with $2.86 billion worth of exports, and $6.42 billion worth of imports. Trade contributed 42 percent of GDP. Trade balance improved from a deficit of $2.6 billion to $1.8 billion as a result of increased exports. Foreign Direct Investment (FDI) declined from $1.7 billion in 2012 to $1.2 billion in 2013, although the UNCTAD World Investment Report shows that Uganda remains the leading recipient of Foreign Direct Investment in the East African region. FDI in Uganda continues to be driven largely by heavy investments from oil exploring companies. As Uganda moves toward active oil production in the next several years, it will likely continue to attract FDI. Major investments were made in construction, banking and financial services, telecommunications, and petroleum exploration. Uganda?s gross domestic product (GDP) was $25.3 billion in FY 2013/14 and the World Bank reports that GDP per capita is $551. The service sector was the largest contributor to GDP in 2012 at 44.7 percent and industry contributed about 26.6 percent. The agriculture and fishing sectors have stagnated at about 22 percent over the past years. Nonetheless, the sector provides approximately 66 percent of employment in Uganda. Of the 37 million people living in Uganda, 24.5 percent of the population lives on less than $1 per day.