Investment into Uganda is expected to nearly double in 2010 to $3 billion from last year thanks to growing foreign interest in its oil sector, the head of the state-run Uganda Investment Authority said.
The landlocked east African country, which has long been hailed for its liberal and stable macroeconomic environment, has emerged relatively unscathed from the global economic slowdown.
Its finance ministry forecasts growth at 6% in the 2009/2010 financial year, from 7% the 12 months before.
Maggie Kigozi, executive director of the authority, told Reuters in an interview that she expected investment in 2010 to stand at around $3 billion, up from $1.57 billion in 2009.
“Uganda’s economic potential is expanding very fast. We’re witnessing a huge rise in interest from foreign investors in our economy, and oil is driving a lot of this interest,” she said.
Explorers discovered commercial petroleum deposits in 2006 in the Albertine Graben area that straddles Uganda’s western border with the Democratic Republic of Congo (DRC). Production is expected to start later this year.
Investment slumped 35% in 2009, from $2.4 billion the year before, as the global credit crisis triggered investor flight from many poor, emerging markets like Uganda.
Kigozi said a significant portion of the investment this year would be in infrastructure and supply of heavy equipment and machinery to support petroleum production.
“Oil production will require a lot of support services, particularly in terms of equipment, and we will see an increase in companies seeking to invest in this area,” she said.
About 70 000 new jobs are foreseen, and the UIA expects much of the investment to come from Britain, India, China and Libya.
Manufacturing, construction and the ICT sectors are expected to dominate new investments, Kigozi said.
The Kampala Industrial and Business Park (KBIP), which is about to be completed, will also drive a great deal of the new investment, she said.
Construction of the 2300-acre, $43 million KBIP began three years ago and was planned to accommodate $2.9 billion worth of investments when fully occupied.
Kigozi said investors were also keen to tap the potential of the country’s fast-growing regional markets in southern Sudan, Rwanda and eastern Congo.
South Sudan and eastern DRC emerged from devastating conflicts recently and currently import nearly everything mostly from neighbouring Uganda.