Ugandan economists and officials expressed confidence in the country’s economy and urged investors to ignore a U.S. government advisory about risks they may face if they conduct business there.
The advisory, in the U.S. 2023 Investment Climate Statements, warned of the financial and reputational risks posed by endemic corruption in Uganda.
The statement also noted Uganda’s enactment of the Anti-Homosexuality Act in May, a move condemned by LGBTQ+ advocates worldwide.
Morrison Rwakakamba, chairperson of the Uganda Investment Authority, a government arm mandated with promoting investment in the country, told VOA that organizations such as the Oxford University Center of African Economies have ranked Uganda as one of the least risky economies on the continent.
The African Development Bank’s 2023 report also ranked Uganda among the top investment destinations in East Africa.
According to the African Development Bank, Uganda’s gross domestic product is projected to grow 6.5% in 2023 and 6.7% in 2024, assuming any global growth slowdown will be short lived.
Rwakakamba said current investors are rational and know they will continue to make money in Uganda.
“Investors follow money. Investors don’t follow geopolitics,” he said. “They don’t follow cultural wars that seem to be what is embedded in that advisory. … We even also continue to encourage our American investors that there is money to be made in Africa. There’s money to be made in Uganda because of the market, because of the return on investment. We are not worried about these advisories.”
The Uganda Investment Authority said the country has seen exponential growth in direct foreign investment over the past four years from investors in United Arab Emirates, China, Germany, Japan and the Netherlands, among others.
However, Corti Paul Lakuma, a senior research fellow and head of the macroeconomics department at the Economic Policy Research Centre in Kampala, said the advisory is a disadvantage for Uganda because the country still wants to attract investors.
Despite investments from China, India and Europe, Lakuma said, Uganda cannot disregard the fact that the United States is still the biggest social and public investor in the sectors of health and education.
“Those other countries, yes, they are good and dependable, but their kind of investments are different from the investments America makes,” Lakuma said. “America makes investments with long-term repayment period and return period. Not many countries are willing to take that risk.”
Rwakakamba argued that even though there is corruption in Uganda, the East African country has set up online mechanisms that enable direct contact between potential investors and Ugandan officials, in an effort to cut out middlemen who demand bribes.
Regarding the Anti-Homosexuality Act, Uganda has experienced a political backlash for what has been described as the harshest law against the LGBTQ+ community in the world.
Lakuma said Uganda may need to reconsider the law.
“The world is becoming very sensitive [to] issues of diversity, inclusivity,” he said. “I think it demanded for some sensitivity from our lawmakers. We don’t live in a vacuum, even though we want to keep our cultures and morals. But also, you must observe what is the changing world order.”
In August, the World Bank said the Anti-Homosexuality Act contradicted its values. The bank said it would halt new loans to Uganda until it could test measures to prevent discrimination in the Ugandan projects it finances.