Overview:
According to the World Investment Report 2024 by the United Nations Trade and Development (UNCTAD), Uganda attracted about $2.886 billion (about Shs10.8) trillion in 2023. However, this is 2.3 percent lower than the $2.953 billion (about Shs11.08 trillion) Uganda attracted in 2022.
The latest UN World Investment Report indicates that Uganda is one of the countries that attracted the most Foreign Direct Investment (FDI) in East Africa.
According to the World Investment Report 2024 by the United Nations Trade and Development (UNCTAD), Uganda attracted about $2.886 billion (about Shs10.8) trillion in 2023. However, this is 2.3 percent lower than the $2.953 billion (about Shs11.08 trillion) Uganda attracted in 2022.
Tanzania attracted $19.973b (about Shs75 trillion) in 2023, a 7.2% rise from the $18.634 in attracted in 2022.
However, Kenya only attracted investments estimated at Ksh193 billion (about Shs1.5 billion or UGX5.6 trillion) in 2023.
Rwanda attracted FDI worth $523b (about Shs1.9 trillion) in 2023, which 5.4% more than it attracted in 2022 ($496b).
The report attributes Uganda’s better FDI to its digital single window model that makes it easy for businesses to register, get clearances and pay taxes.
Uganda on the other hand had investments worth $400,000 being taken to other countries.
The report indicates that in the entire East African region, FDI inflows fell by 3%, mainly due to an 11% decrease in Ethiopia. However, greenfield projects and international project finance deals increased by more than 30%, indicating better prospects ahead.
The entire African continent attracted FDI worth $52.633 billion in 2023, which is 3.4% less than what it attracted in 2022. However, the continent attracted a growing share of global greenfield megaprojects, six of them valued above $5 billion.
Topping the list was a green hydrogen project in Mauritania, a least developed country in Northwest Africa. This project is expected to generate $34 billion in investment, an amount several times greater than the nation’s GDP.
Africa also received more than $10 billion in project finance for wind and solar electricity production, with the largest projects located in Egypt, South Africa, and Zimbabwe.
Value chains for electric vehicles also prompted foreign investments. The largest deals announced included one to establish a $6.4-billion electric vehicle battery manufacturing facility in Morocco.
Tight financing conditions led to a 26% fall in international project finance deals, critical for infrastructure investment. International project finance is crucial for the poorest countries, making them more vulnerable to the global downturn in this type of investment.
The report, however, indicates that global FDI flows fell 2% to $1.3 trillion in 2023, as trade and geopolitical tensions weighed on a slowing global economy. The report underscores that the headline figure exceeds -10% when excluding a few European conduit economies that registered large swings in investment flows.