I greet you and also extend warm greetings from Uganda. My delegation and myself are here to interest you in investing in Uganda. Business is not charity. It is about profitability through providing quality goods and services to the consumers.
I am, therefore, here to show you that Uganda is the right place to go as far as investments are concerned and that, it is the right time to go. The two crucial elements in business are the producers and the consumers.
All the major global economic developments and metamorphosis in the last 300 years have been triggered and sustained by these two actors ─ the consumer and the producer.
If somebody produces and nobody buys, the business will collapse. Indeed, many of the major economic crises, like the crisis of 1929 for instance, were caused by the decline in demand (consumption).
A few years ago, the prices of commodities like copper, steel, etc. went up. Why? On account of the big infrastructure developments that were going on in China and India ─ those heavily populated countries. In the 1980s, the price of a tonne of steel was US$200. On account of the boom of building in China and India, the price went up to US$900 per tonne. Since the boom of building and construction has slowed down, the price of a tonne of steel is now around US$550.
This is where Uganda comes in, as a very interesting investment destination. Uganda, today, has a population of 38 million people. This population will be 101 million people by 2050. Besides, Uganda is part of the East African Community (EAC) which has a population of 160 million people.
The population of the EAC will be 234 million people by 2050. All these are part of the huge African continent, 30 million square kms of land area and a population of 1.25 billion people today. The population of Africa in 2050 will be 2.5 billion. The purchasing power of Africa is growing rapidly.
Only 10 years ago, the purchasing power of Africa was US$ 500 billion. Today, the purchasing power of Africa is US$8.2 trillion. By 2050, the purchasing power of Africa will exceed US$36.2 trillion. I must point out that these rates of growth of Africa are very conservative.
Uganda’s economy, for instance, has been growing at the rate of 6.6% for the last twenty years in spite of lack of electricity, high transport costs on account of poor roads, an antiquated railway system, costly money from commercial banks, etc. In the case of Uganda, we are solving these bottlenecks. Each year we are investing the equivalent of US$ 900 million of our money in electricity generation and distribution. We shall never ever have an electricity deficit again.
Each year, we are investing US$ 1billion in the roads. That is how the network of tarmacked roads has expanded. Government will borrow US$3.75 billion from China to modernize the railway to the sea and electrify it so that it takes 1 day to transport a train load of goods instead of the present 21 days. Where we are heading, the rates of growth of Uganda will be in double digits.
In the few paragraphs above, I have shown you that profitable business needs a producer and a consumer. I have shown you that consumption in Africa is expanding as a totality and also as per individual consumer. I have also shown you that the consumer and the producer must be linked by cost effective and efficient infrastructure and utilities. The infrastructure and the necessary utilities include: abundant and cheap electricity; efficient and cheap road transport; cheap and efficient rail transport; piped water, etc., etc. I forgot to mention the ICT backbone and the undersea cables. Both of these are now in place.
The cost of telephones and data transmissions has gone down from US$ 1,200 to US$ 300 per megabite per month and it will soon go to US$ 200 per month.
If Uganda’s consumption is growing, if Africa’s consumption is growing, it means Uganda and Africa in general are good destinations for investment.
A country like China has stimulated global business by offering its huge market. Uganda and Africa are offering more than market. We also have abundant natural resources: ─ agriculture, minerals, fresh-water resources, forest products and tourism. Uganda is almost unique in the world. Only two other countries in the world are like Uganda ─ Kenya and Ecuador in South America. The uniqueness of Uganda is that it is right on the equator, belonging to both the Northern and the Southern hemispheres, but it is also high by elevation.
Altitude-wise, Uganda is between 620 metres and 5,109 metres above sea level. It always, therefore, has mild climate and alot of bio-diversity on account of the geographical location and elevation.
Add to all these, the investment policies. We do not tax machinery for manufacturing, we do not tax raw-materials for manufactured goods, intermediate products attract a tax of 10% and we give tax holidays of 10 years to companies that are exporting up to 80% of their final products, that are manufactured in Uganda. We are also developing industrial parks in different parts of the country so that the investors find a developed and serviced site where to put a factory.
I urge German and European companies to invest in Uganda and in Africa. By so doing, they are, actually, supporting German and European prosperity as well as our own prosperity. Why? It is because a German company investing in Uganda, provided the investment climate is right, helps Uganda to earn more money and to create more jobs. Everybody who earns an income can now buy more. That expands the purchasing power of Africa. We, then, buy more from partners abroad, Europeans included.
The actual sectors where we need investments are: grain milling and making of animal feeds; fruit-processing; making of starch and its derivatives from bananas, maize, cassava, etc.; industrial alcohol; baby foods from milk and bananas; steel manufacture from high grade iron ore (obutare); minerals beneficiation for gold, coltan, wolfram, tin, nickel, copper, aluminum, etc.; coffee processing; chocolate making from our cocoa and milk; tea factories are many but we need more; milk factories are quite a number but we need more; paper making from trees and papyrus; textiles from our very good cotton; leather industry from our very good skins and hides, with 14 million cattle; packaging material of plastics and paper; glass from our very good sand for building and bottling purposes; electronic goods ─ radios, computers, televisions, etc.; assembly and manufacture of cars and vehicles; herbal medicine and anti-vermin drugs from plants ─ part of the ancient knowledge of Africa that is not known outside our area; human drugs (we have got an infant industry); veterinary drugs, acaricides, fungicides, etc.; crop production drugs; human and livestock vaccines; defense equipment; hydro-power stations; solar-powered water pumps for irrigation; etc., etc. I cannot exhaust the list.
I welcome you to Uganda and wish you good luck.
I thank you all.
Keynote Address by H.E. Yoweri Kaguta Museveni PRESIDENT OF THE REPUBLIC OF UGANDA at The German-African Business Day