As Britain seeks to rekindle its ties with the Commonwealth for a post-Brexit era, its investors are increasingly viewing the East African nation as a promising destination
As the United Kingdom prepares to leave the European Union, British government officials have made clear their aims to forge trade deals with Commonwealth partners. For international trade secretary Liam Fox, the April 2018 Heads of Government Meeting (CHOGM) in London is a chance to “showcase the Commonwealth’s ability to lead the response to global economic challenges, influencing global trade policy and setting an ambitious pace for the delivery of multilateral agreements.”
Uganda – tipped by the Center for International Development at Harvard University to top the list of the fastest-growing economies to 2025 – is receiving plenty of attention. Trade between the two nations is growing, with the Office for National Statistics reporting that Uganda’s exports to the UK more than doubled in the period between 1999 and 2016. However, as Amelia Kyambadde, minister for trade, industry and cooperatives, points out, Uganda still has a large trade imbalance with the UK. “A way forward to improve our trade relations requires investment in value addition and the export of processed agricultural products like coffee and cotton,” she says, calling for UK companies to look at areas such as car assembly, drug manufacture and generator manufacturing in order to take advantage of Uganda’s strategic location and access to regional markets.
Over 100 UK companies already operate in the country, from Tullow Oil to Barclays Bank, and a recent high-level delegation led by Mr Fox to Uganda saw meetings held with top managers of private and public companies to discuss a range of investment opportunities.
Aside from trade and investment, the two countries are collaborating on a number of other issues. This month, the UK’s Department for Environment, Food and Rural Affairs (DEFRA) minister Therese Coffey met with her Ugandan counterpart, Dr Mary Kitutu, minister of state for the environment, to discuss marine pollution and the wildlife trade as part of a visit to the Nile Basin Initiative, highlighting the upcoming CHOGM as an opportunity for Uganda and the UK to work together to tackle environmental issues.
Uganda is also a beneficiary of the UK’s focus on Africa infrastructure investment, seen as crucial for the continent’s continued economic development. UK Export Finance (UKEF) recently announced that it would double export credit for Uganda to £600 million from £300 million. Ugandan-born Lord Dolar Popat, the prime minister’s trade envoy to Rwanda and Uganda, said that the facility will help the country to achieve its major infrastructure objectives by providing access to highly competitive long-term finance with very flexible UK content requirements, long tenures and attractive funding costs.
One project already underway is the construction of a new international airport in the Kabaale region. UKEF is providing 270 million euros – its largest-ever loan to an African government – to help support work on the construction of the runway, taxiway and cargo terminal to be carried out by UK infrastructure company Colas. The airport is due for completion in 2021, and will support a number of large-scale infrastructure and energy projects planned in the area.
“Interest has dramatically improved. UK credit agencies are now providing more credit to us and other East African countries. The investment promotion and credit facilities that are being made available are also very welcome,” says Mr Muhakanizi.
Collaboration between the Department for International Development (DFID) – through Trade Mark East Africa (TMEA) – and the Uganda Revenue Authority has brought about several trade facilitation projects, including an automated system for customs data, a one-stop border post and an electronic cargo tracking system, which Ugandan officials say will lead to a reduction in clearance time by over 83 per cent in Mutukula on the Tanzanian border from 45 hours to eight hours, and a 79 per cent reduction at Busia on the Kenyan border from 14 hours to three hours, further facilitating intra-African trade for landlocked Uganda.