The Ugandan High Commissioner to South Africa, Joseph Tumasange, yesterday outlined various investment incentives designed to attract potential investors, including investors from South Africa.

Speaking at a business briefing in Johannesburg, Tumasange claimed that there was signficant potential for South African companies in Uganda’s agriculture, mining, financial, education, medical, tourism and information and communication technology (ICT) sectors.

He said that the agricultural industry, in particular, was “rich with opportunity”, due to the country’s position as a low-cost producer of coffee, tea, cotton and floriculture.

The High Commissioner laid specific emphasis on the country’s cotton sector, as Uganda has an advantage in agronomic and climatic conditions.

He said that the country has the potential to produce one million bales a year, and that cotton output was already rising.

Uganda has over 18-million hectares of arable land, of which less than 30% is currently under cultivation.

The Ugandan government, supported by donors, has put in place a series of support mechanisms, including credits to private farmers, export incentives and marketing assistance.

Tumasange said that there is also a large and untapped mining sector, and that incentives were for both exploration and mining activities, which in some cases, allows capital expenditure to be fully written off.

Untapped resources include, among others, gold, copper, cobalt and phosphates.

The Ugandan financial sector, which was still in its infancy also offered strong potential for growth.

Tumasange reported that the surge in private investment had created demand for specialised services such as insurance and management support services.

Uganda has a uniform corporation tax rate of 30%, which compares favourably to many other countries.

While Tumasange admitted that Uganda’s information communication technology sector was currently lagging world trends, he said there was significant potential for growth, especially in data processing, software development, call centre development, training and setting up of ICT hubs.

He pointed out that South African cellular firm MTN, which has invested in Uganda, is showing good returns in its investment.

Meanwhile, the East African country was also seeking foreign investment in its education and medical sectors, especially in the establishment of secondary education centres and private clinics and hospitals.

But Tumasange also admitted that many challenges still faced investors in Uganda, but that these, too, were areas of opportunity for foreign and local business.

He highlighted the fact that the country desperately needs to modernise its agricultural sector, expand and rebuild roads and further the financial and telecoms sectors.

Counter-balancing these challenges was Uganda’s low-cost labour, fairly well established water transport infrastructure of on Lake Victoria as well as supportive government policies, which makes foreign investment particularly attractive.

In addition there was significant scope to boost trade relations between South Africa and Uganda.

In February 2003, statistics revealed that South Africa exported R55-million goods to Uganda, and Uganda exported goods worth R5-million to South Africa.

“Each sector is very small, and therefore has potential to grow significantly with the help of foreign business,” Tumasange concluded.