infrastructure of uganda

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GLOBAL / COUNTRY STUDY AND REPORTON

INFRASTRUCTURE OF UGANDA

Submitted toSOM LALIT INSTITUTE OF BUSINESS ADMINISTRATION

IN PARTIAL FULFILLMENT OF THEREQUIREMENT OF THE AWARD FOR THE DEGREE OF

MASTER OF BUSINESS ASMINISTRATIONIn

Gujarat Technological UniversityUNDER THE GUIDANCE OF

Professor Kalika Bansal

Submitted by(STUDENT NAME)

[Batch : 2010-12, Enrollment No.:____]

MBA SEMESTER III/IV

SOM LALIT INSTITUTE OF BUSINESS ADMINISTRATION

MBA PROGRAMMEAffiliated to Gujarat Technological University

AhmedabadAPRIL, 2012


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Students Declaration

We, __________________________________, hereby declare that the report forGlobal/ Country Study Report entitled

________________________________________________________in (Name of thecountry) is a result of our own work and our indebtedness to other work

publications, references, if any, have been duly acknowledged.Place : .. (Signature)Date : (Name of Student)

------------------------------------------------------

Institutes Certificate

Certified that this Global /Country Study and Report Titled is the bonafide work of Mr./ Ms .. (Enrollment

No..), who carried out the research under my supervision. I also certifyfurther, that to the best of my knowledge the work reported herein does not formpart of any other project report or dissertation on the basis of which a degree or

award was conferred on an earlier occasion on this or any other candidate.

Signature of the Faculty Guide(Name and Designation of Guide)

(Certificate is to be countersigned by the Director/HoD)


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PREFACE(SEPARATE PAGE)

_______________________________________________________


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ACKNOWLEDGEMENT(SEPARATE PAGE)

________________________________________________________


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TABLE OF CONTENTS


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LIST OF TABLES

Trade of Uganda (in Billion Dollars)

LIST OF FIGURES

$ Currency of United States

% Percentage

List of Abbreviations

NDP National Development Plan

GDP Gross Domestic Product

EIB European Investment Bank

IFI International Financial Institutions

UEB Uganda Electricity Board

IDA International Development Association

USH Uganda Shillings

IMF International Monetary Funds

EU European Union

SARS Severe Acute Respiratory Syndrome

US United States (Of America)

AAI Airport Authority Of India

MW Mega Watts

ICT Information and Communications Technology

HIPC Heavily Indebted Poor Country

BOT Build Operate Transfer

SPV Special Purpose Vehicle

B2B Business 2 Business

UN United Nations

ACP African Caribbean & Pacific

EPA Economic Partnership Agreement

AGOA African Growth & Opportunity ActEBA European Banking Authority

UPTOP Uganda Programme for Trade Opportunities & Policy


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EXECUTIVE SUMMARY

This report has been prepared to analyse the current infrastructure scenario of

Uganda and with its development what are the benefits with the Indian context. Here is

a brief about the report. Uganda is landlocked country with over 27000 Km of Road

Connectivity which is partially paved. The main Airport of the country is Entebbe Airport.

Its capital is Kampala.

The telecom and transport sectors are strong sectors of Uganda, while

Education, Finance & Energy Sectors are relatively young and less developed.

Infrastructure is an emerging sector with huge growth potential. Real Estate is the mostdeveloping Industry in the sector.

Political Dissonance, lack of trained workforce and strong chances of natural

calamities are repulsive factors in the infrastructure industry. Instability in market and

inefficiency in planning are major threats to the Industry. Partnership between Public

and Private Sector in Infrastructure can enhance the growth of the Industry. Developing

and managing a supply chain can enhance the profitability of the sector, and also

reduce the inefficiencies in its planning. Grants by EIBand various private sector banks

have been approved for Wate Management. Uganda is poised to achieve a high GDP

growth. According to a feasibility study it will need $15 Billion for Infrastructuraldevelopment and it must invest this fund heavily in rail, road, transport and telecom

sectors.

According to NDP, Uganda should achieve status of a middle income country by

2030.To achieve this, it requires to train the workforce. Despite political, natural and

economic instabilities, Uganda continues to get financial assistance from outside,

significantly, from the World Bank.

India has strong EXIM ties with India, Indias membership with African

Development Bank is a proof in itself. BHELs intentions to invest in Uganda will further

enhance ties between the two countries. Many JVs have been formed between

companies from Uganda and India. Further, India also provided heavy technical

assistance and foreign trade to Uganda. Several bilateral agreements have also been

concluded in the fields of trade, technical and economic cooperation. Under Focus

Africa programme, India provides financial assistance to various Trade Promotion

Councils of Uganda. UnderIAIFTIndia is providing India is developing and executing


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Pan African Projects , while $5 Billion credit line has also been approved for various

African Nations.

Thus the bottom line is that Uganda is a developing country with booming

infrastructure, but Political & Financial instabilities, lack of planning and financial

assistance come in its way. India is providing full support and co-operation to Ugandathrough various ways of Financial and Technical Assistance to help Uganda achieve its

target by 2030.


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PARTI ECONOMIC OVERVIEW

OF THE SELECTED COUNTRY


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Demographic Profile

As of 2012 the polulation of Uganda is 34,612,250.The major population of Uganda is

youth and children considering the facts that 49.1 % of the population is 0-14 years old ,48.1 % is 15-64 years old and the rest 2.1 % is 65-100 years old.

Men consist of 17367389 i.e -% of polulation whereas women consist of 17244861 ie -

% of population. The median age for men is 15 years whereas it is 15.1 years for

women.The estimated polulation growth rate is 3.58 %.Roughly 13% of polulation are

located in cities and urban centers whereas remaining 87% of polulation lives in

villages.

The birth rate is 47.49 Births/ 1000 men and the death rate is 11.71 Deaths / 1000

men.The sex ratio of Uganda is 1.01 Males/ 1 Female

Other details are as under

Infant mortality rate

total: 62.47 deaths/1,000 live birthsmale: 66.05 deaths/1,000 live birthsfemale: 58.77 deaths/1,000 live births (2011 est.)

Life expectancy at birth

total population: 53.24 yearsmale: 52.17 yearsfemale: 54.33 years (2011 est.)

Total fertility rate:6.69 children born/woman

HIV/AIDS Prevalence Rate:6.5%

People living with HIV/AIDS:1.2 million

HIV/AIDS Deaths caused by AIDS:64,000

Ethnic groups

Baganda 16.9%, Banyakole 9.5%, Basoga 8.4%, Bakiga 6.9%, Iteso 6.4%, Langi 6.1%,Acholi 4.7%, Bagisu 4.6%, Lugbara 4.2%, Bunyoro 2.7%, other 29.6% (2002 census)


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Religions

Roman Catholic 41.9%, Protestant 42% (Anglican 35.9%, Pentecostal 4.6%, Seventh-

Day Adventist 1.5%), Muslim 12.1%, other 3.1%, none 0.9% (2002 census)

Literacy

total population: 66.8%male: 76.8%


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Economic Overview

Peasant agricultural production has been the predominant economic activity since

precolonial times. Despite an active trade in ivory and animal hides linking Uganda withthe east coast of Africa long before the arrival of Europeans, most Ugandans weresubsistence farmers. Cotton cultivation increased in importance after 1904, By 1910cotton had become Uganda's leading export. After cotton the government encouragedthe growth of sugar and tea plantations.Uganda enjoyed a strong and stable economyin the years approaching independence. Agriculture was the dominant activity, but theexpanding manufacturing sector appeared capable of increasing its contribution toGDP, especially through the production of foodstuffs and textiles. Some valuableminerals, notably copper, had been discovered, and water power resources weresubstantial. The economy deteriorated under the rule of President Idi Amin Dada. In1972 he expelled holders of British passports, including approximately 70,000 Asians of

Indian and Pakistani descent and such a mass expulsion and undermined investorconfidence in Uganda.Succesive governments attempted to restore internationalconfidence in the economy through a mixture of development plans and austeregovernment budgets. The manifesto also set out specific goals for achieving this self-sufficiency: diversifying agricultural exports and developing industries that used localraw materials to manufacture products necessary for development. In 1989, Ugandafaced devastating losses in export earnings and sought increased internationalassistance to stave off economic collapse.


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Overview of Industries in Trade and Commerce

Peasant agricultural production has been the predominant economic activity since

precolonial times. Despite an active trade in ivory and animal hides linking Uganda withthe east coast of Africa long before the arrival of Europeans, most Ugandans weresubsistence farmers. By 1910 cotton had become Uganda's leading export. In thefollowing decades, the government encouraged the growth of sugar and tea plantations.Following World War II, officials introduced coffee cultivation to bolster declining exportrevenues, and coffee soon earned more than half of Uganda's export earnings.

Growth structure of economy

When coffee replaced cotton as Uganda's principal export in the 1950s, it was stillproduced in the pattern of small peasant holdings and local marketing associations thathad arisen early in the century. The economy registered substantial growth, but almostall real growth was in agriculture, centered in the southern provinces. The fledglingindustrial sector, which emphasized food processing for export, also increased itscontribution as a result of the expansion of agriculture.

Direct Economic Involvement

By 1987 the Ugandan government was directly involved in the economy through fourinstitutions. First, it owned a number of parastatals that had operated as privatecompanies before being abandoned by their owners or expropriated by the government.Second, the government operated marketing boards to monitor sales and regulateprices for agricultural producers. Third, the government owned the country's majorbanks, including the Bank of Uganda and Uganda Commercial Bank. And fourth, thegovernment controlled all imports and exports through licensing procedures.

In July 1988, officials announced that they would sell twenty-two companies that were

entirely or partially government owned. These parastatals included the electric powercompany, railroads and airlines, and cement and steel manufacturers. Banking andexportimport licensing would remain in government hands, along with a substantialnumber of the nation's hotels. By late 1989, however, efforts to privatize parastatalorganizations had just begun, as personal and political rivalries delayed the sale ofseveral lucrative corporations. The International Development Association (IDA)awarded Uganda US$16 million to help improve the efficiency of government-ownedenterprises. Funds allocated through this Public Enterprise Project would be used to


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pay for consultancy services and supplies, and to commission a study of ways to reformpublic-sector administration.

Budgets

Uganda registered a substantial budget deficit for every year of the 1970s except 1977,when world coffee price increases provided the basis for a surplus. Deficits equivalentto 50 to 60 percent of revenues were not unusual, and the deficit reached 100 percentin 1974.

Government expenditures increased during the early 1980s, and the rate of increaserose after 1984. In 1985 civil service salaries were tripled, but in general, the Ministriesof Defense, Education, and Finance, and the Office of the President were the biggestspenders.

The government implemented measures to reform the tax system in FY 1988 and FY

1989. A graduated tax rate, with twenty-five grades, rose from a USH300 minimum to aUSH5,000 maximum to account for all classes of income earners.

Uganda operated under a separate development budget during the 1980s. This budgetconsisted of domestic revenues and expenditures on development projects, but itexcluded revenues from foreign donors. The development budget increased from FY1981 to FY 1988, primarily because of inflation, but was trimmed slightly in FY 1989.The Ministry of Finance and Ministry of Defense consumed most of the developmentbudget, however, in part because agricultural and livestock projects were often fundedby foreign donors. The Ministry of Housing also received nearly 17.3 percent of FY 1988development allocations, and much of this amount was earmarked for renovations on

government-owned tourist hotels.

Rehabilitation and Development Plan

In June 1987, the government launched a four-yearRDPfor fiscal years 1988-91. Itaimed to restore the nation's productive capacity, especially in industry and commercialagriculture; to rehabilitate the social and economic infrastructure; to reduce inflation by

10 percent each year; and to stabilize the balance of payments. The plan targetedindustrial and agricultural production, transportation, and electricity and water servicesfor particular improvements Throughout the decade, official wages failed to keep up withthe rising cost of living, and most wage earners were able to survive only because theyhad access to land and raised food crops. By the mid-1980s, typical average wages atthe official exchange rate were only US$10 a month for factory workers, US$20 a monthfor lower-level civil servants, and US$40 a month for university lecturers. In the late1980s, the converted value of these wages declined even further as the value of the


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shilling dropped. In addition, the decline in industrial production in the 1970s and 1980shad reduced the proportion of high-paying jobs. As a result, more industrial workerspursued black market activities in order to support themselves.

But the Museveni government tried to improve the status of wage laborers. The 1987

RDP aimed to enhance the country's self-sufficiency by increasing the number of skilledworkers in industry. During the late 1980s, the government initiated a number ofprograms to improve working conditions in industry and provide training for industrialworkers as well as government administrators. The Occupational Health and HygieneDepartment implemented several projects to minimize occupational hazards in industryand to improve workers' health care.. Makerere University also established severaltraining programs in surveying skills, agriculture, environmental studies, pharmacy, andcomputer science. By the late 1980s, the government, which had become the singlemajor employer in the country, experienced significant problems as a result of almosttwo decades of economic decline and lax accounting procedures. A major problem wasthe lack of an accurate count of public wage earners, and to meet this urgent need, the

government conducted a census of civil servants in 1987.Low wage scales led to thesecond serious problem confronting the government--i.e., corruption and inefficiency inthe public sector. Both in government departments and parastatals, charges ofcorruption were widespread and were often attributed to low earnings..

Then in an attempt to streamline the civil service, the government announced plans toeliminate 30 percent of the nation's civil service jobs, leaving about 200,000 peopleemployed by the government. This plan was not implemented, however. A labor surveyin 1989 revealed that more than 244,000 people still worked for the nationalgovernment, in addition to those in parastatal organizations.


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Overview of different economic sectors/Industries

Manufacturing industries, based primarily on processing agricultural productsunavailable in Uganda. The mining industry had almost come to a standstill. The

rudiments of industrial production existed in the form of power stations, factories, mines,and hotels, but these facilities needed repairs and improved maintenance, andgovernment budgets generally assigned these needs lower priority than security andcommercial agricultural development..

Industrial growth was a high priority in the late 1980s, however. The government's initialgoal was to decrease. Engineers and repair people ,in particular, were in demand, andgovernment planners sought ways to gear vocational training toward these needs.

Energy Mining

Manufacturing

Energy

In the 1980s, local officials estimated that charcoal and fuel wood met more than 95percent of Uganda's total energy requirements. So, the government sought alternateenergy sources to reduce the nation's reliance on forestry resources for fuelwood.

Alternative technologies were sought for the tobacco-curing and brick and tilemanufacturing industries, in particular, because they both consumed substantialquantities of fuelwood. More than 80 percent of fuelwood consumption was still in thehome-- primarily for cooking--and to reduce this dependence, the governmentattempted to promote the manufacture and use of more fuel-efficient stoves. Even thismodest effort was difficult and expensive to implement on a nationwide basis, in partbecause cooking methods were established by long-standing tradition

In the 1980s Uganda imported all its petroleum products. The transportation sector

consumed about 69 percent of the available supply, while the aviation and industrialsectors required 9 percent and 5 percent, respectively. Roughly 17 percent of Uganda'spetroleum imports were for domestic use. Uganda relied on Kenyan road and railsystems to transport oil imports. Several international companies were also exploring foroil in western Uganda in 1989.


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Manufacturing

In the late 1980s, most manufacturing industries relied on agricultural products for raw

materials and machinery, and as a result, the problems plaguing the agriculture sectorhampered both production and marketing in manufacturing. Processing cotton, coffee,sugar, and food crops were major industries, but Uganda also produced textiles,tobacco, beverages, wood and paper products, construction materials, and chemicals.

Construction Material

Eight companies produced steel products in Uganda, Their most widely used productswere gardening hoes and galvanized corrugated sheets of steel. The production of steelsheets declined dramatically in 1987, leaving some factories operating at only 5 percentof capacity.The government attempted to rejuvenate the industry in 1987 by assessingthe availability of scrap iron and the demand for steel products and by providing US$2.7million in machinery and equipment for use by the government-operated East AfricanSteel Corporation.The nation's two cement-producing plants at Hoima and Tororo,both operated by the Uganda Cement Industry, also reduced production sharply, frommore than 76,000 tons of cement in 1986 to less than 16,000 tons in 1988.

Consumer Goods

The production of beverages, including alcoholic beverages and soft drinks, increasedin the late 1980s, and officials believed Uganda could achieve self-sufficiency in thisarea in the 1990s. In 1987 three breweries increased their production by an average of100 percent, to more than 16 million liters. In the same year, five soft drink producersincreased output by 15 percent to nearly 6 million liters. In addition, Lake VictoriaBottling Company, producers of Pepsi Cola, completed construction of a new plant at

Nakawa.

Sugar production was vital to the soft drink industry, so rehabilitating the sugar industrypromised to assist in attaining self-sufficiency in beverage production.


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Uganda's dairy industry relied on imports of dried milk powder and butter to producemilk for sale to the general public. Processed milk registered an increase of 29.5percent, from 13 million liters in 1986 to 16.9 million liters in 1987. To improve the localdairy industry, the government rehabilitated milk cooling and collection centers, milkprocessing plants, and the industry's vehicles. And in the late 1980s, the Ministry of

Agriculture, Animal Husbandry, and Fisheries imported 1,500 in-calfreisian heifers toform the nucleus of a restocking effort on private and government farms. Production ofwheat and corn flour increased in 1987.

Mining

Although the government recognized the existence of several commercially important

mineral deposits, it had not conducted comprehensive exploration surveys for non-oilminerals and, therefore, lacked estimates of their size. In the early 1970s, copper, tin,bismuth, tungsten, rare earths, phosphates, limestone, and beryl were being mined bycommercial companies. The mining sector employed 8,000 people and accounted for 9percent of exports. By 1979 almost all mineral production had ceased, and in 1987 onlythe mining and quarrying sector recorded any growth. Mining output increased anestimated 20 percent, largely because of the rapid growth in demand for road andhousing construction materials, such as sand and gravel. In 1988 the governmentestablished a National Mining Commission, intended to encourage investment in themining sector through joint ventures with the government.

TOURISM

Revenue from tourism, including restaurants, hotels, and related services, is more thanany other sector of the economy. Recognizing the role tourism could play in economicdevelopment, the government assigned high priority to restoring the tourisminfrastructure in its RDP.

BANKING AND CURRENCY

Uganda's years of political turmoil left the country with substantial loan repayments, aweak currency, and soaring inflation. During the 1970s and early 1980s, numerous


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foreign loans were for nonproductive uses, especially military purchases. Debts climbedwhile the productive capacity of the country deteriorated. To resolve these problems,the government tapped both external creditors and domestic sources, crowding outprivate-sector borrowers..

Banking

Government-owned institutions dominated most banking in Uganda. In 1966 the Bankof Uganda, which controlled currency issue and managed foreign exchange reserves,became the Central Bank. The Uganda Commercial Bank, which had fifty branchesthroughout the country, dominated commercial banking and was wholly owned by thegovernment. The Uganda Development Bank was a state-owned development financeinstitution, During the 1970s and early 1980s, the number of commercial bank branchesand services contracted significantly. Whereas Uganda had 290 commercial bankbranches in 1970, by 1987 there were only 84, of which 58 branches were operated bygovernmentowned banks. This number began to increase slowly the following year, and

in 1989 the gradual increase in banking activity signaled growing confidence inUganda's economic recovery.

AGRICULTURE

Uganda's favorable soil conditions and climate have contributed to the country'sagricultural success. But technological improvements had been delayed by economic

stagnation, and agricultural production still used primarily unimproved methods ofproduction on small, widely scattered farms, with low levels of capital outlay. Otherproblems facing farmers included the disrepair of the nation's roads, the nearlydestroyed marketing system, increasing inflation, and low producer prices. Thesefactors contributed to low volumes of export commodity production and a decline in percapita food production and consumption in the late 1980s.

The decline in agricultural production posed major problems in terms of maintainingexport revenues and feeding Uganda's expanding population. Despite these seriousproblems, agriculture continued to dominate the economy. Agricultural output wasgenerated by about 2.2 million small-scale producers on farms with an average of 2.5

hectares of land. The 1987 RDP called for efforts both to increase production oftraditional cash crops, including coffee, cotton, tea, and tobacco, and to promote theproduction of nontraditional agricultural exports, such as corn, beans, groundnuts(peanuts), soybeans, sesame seeds, and a variety of fruit and fruit products.

Crop Livestock Fishing


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Forestry

Coffee

Coffee continued to be Uganda's most important cash crop throughout the 1980s. Thegovernment estimated that farmers planted approximately 191,700 hectares of robustacoffee, most of this in southeastern Uganda, and about 33,000 hectares of arabicacoffee in high-altitude areas of southeastern and southwestern Uganda.

When the NRM seized power in 1986, Museveni set high priorities on improving coffeeproduction, reducing the amount of coffee smuggled into neighboring countries, anddiversifying export crops to reduce Uganda's dependence on world coffee prices.

Cotton

Cotton provided the raw materials for several local industries, such as textile mills, oiland soap factories, and animal feed factories. And in the late 1980s, it provided anothermeans of diversifying the economy. The government accordingly initiated an emergencycotton production program, which provided extension services, tractors, and otherinputs for cotton farmers. At the same time, the government raised cotton prices fromUSh32 to USh80 for a kilogram of grade A cotton and from USh18 to USh42 for Grade

B cotton in 1989. However, prospects for the cotton industry in the 1990s were stilluncertain.

Tea

Favorable climate and soil conditions enabled Uganda to develop some of the world'sbest quality tea. Production almost ceased in the 1970s, however, when the

government expelled many owners of tea estates--mostly Asians. Many tea farmersalso reduced production as a result of warfare and economic upheaval. Successivegovernments after Amin encouraged owners of tea estates to intensify their cultivationof existing hectarage. Mitchell Cotts (British) returned to Uganda in the early 1980s andformed the Toro and Mityana Tea Company (Tamteco) in a joint venture with thegovernment. Tea production subsequently increased from 1,700 tons of tea produced in1981 to 5,600 tons in 1985. These yields did not approach the high of 22,000 tons that


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had been produced in the peak year of 1974, however, and they declined slightly after1985.

Tobacco

For several years after independence, tobacco was one of Uganda's major foreignexchange earners, ranking fourth after coffee, cotton, and tea. Like all other traditionalcash crops, tobacco production also suffered from Uganda's political insecurity andeconomic mismanagement. Most tobacco grew in the northwestern corner of thecountry, where violence became especially severe in the late 1970s, and rehabilitationof this industry was slow. In 1981, for example, farmers produced only sixty-three tonsof tobacco. There was some increase in production after 1981, largely because of the

efforts of the British American Tobacco Company, which repossessed its formerproperties in 1984. Although the National Tobacco Corporation processed andmarketed only 900 tons of tobacco in 1986, output had more than quadrupled by 1989.

Sugar

Uganda's once substantial sugar industry, which had produced 152,000 tons in 1968,almost collapsed by the early 1980s. By 1989 Uganda imported large amounts of sugar,despite local industrial capacity that could easily satisfy domestic demand. Achieving

local self-sufficiency by the year 1995 was the major government aim in rehabilitatingthis industry.

The two largest sugar processors were Kakira and Lugazi estates, which by the late1980s were joint government ventures with the Mehta and Madhvani families. Thegovernment commissioned the rehabilitation of these two estates in 1981, but thespreading civil war delayed the projects. By mid-1986 ,work on the two estatesresumed, and Lugazi resumed production in 1988. The government, together with anumber of African and Arab donors, also commissioned the rehabilitation of the KinyalaSugar Works, and this Masindi estate resumed production in 1989. Rehabilitation of theKakira estate, delayed by ownership problems, was completed in 1990 at a cost of

about US$70 million, giving Uganda a refining capacity of at least 140,000 tons peryear.


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International Trade

The twenty-thousand Ugandan shilling banknote, issued by the Bank of Uganda.

Since assuming power in early 1986, Museveni's government has taken important steps

toward economic rehabilitation. The country's infrastructure notably its transport andcommunications systems which were destroyed by war and neglectis being rebuilt.Recognizing the need for increased external support, Uganda negotiated a policyframework paper with the IMFand the World Bank in 1987. It subsequently beganimplementing economic policies designed to restore price stability and sustainablebalance of payments, improve capacity utilization, rehabilitate infrastructure, restoreproducer incentives through proper price policies, and improve resource mobilizationand allocation in the public sector. These policies produced positive results. Inflation,which ran at 240% in 1987 and 42% in June 1992, was 5.4% for fiscal year 1995-96and 7.3% in 2003.

Investment as a percentage ofGDP was estimated at 20.9% in 2002 compared to13.7% in 1999. Private sector investment, largely financed by private transfers fromabroad, was 14.9% of GDP in 2002. Gross national savings as a percentage of GDPwas estimated at 5.5% in 2002. The Ugandan Government has also worked with donorcountries to reschedule or cancel substantial portions of the country's external debts.

Uganda is a member of theWTO.

Uganda is becoming increasingly dependent on the import of capital through loans and

grants, the import of services, and of manufactured goods. The value of imports was

consistently double the value of exports throughout the 1990s, and in 1999 the ratio of

imports to exports came close to being 3 times in size. Apart from cash-crops such as

tea and coffee, Uganda's principal exports in 1998 were US$39.9 million of fish and fish

products, US$47.4 million of iron and steel, and US$47.2 million worth of electrical

machinery and supplies. It should be noted that the EUbanned the import of fish from

Uganda between 1999 and mid-2000 as some supplies were poisonous; although this

ban has now been lifted this event seems likely to effect future sales. The main recipient

of these exports in 1998 was the EU, which received 50.9 percent of the total; broken

down individually, the key countries were the Netherlands, which imported 6.3 percent,

Switzerland (6.2 percent), Germany (5 percent), and Belgium (3.7 percent). Other key

export-partners are the United States which regularly receives around 25 percent, and

Kenya which received 4.6 percent in 1998.
http://en.wikipedia.org/wiki/Ugandan_shillinghttp://en.wikipedia.org/wiki/Bank_of_Ugandahttp://en.wikipedia.org/wiki/Musevenihttp://en.wikipedia.org/wiki/World_Bankhttp://en.wikipedia.org/wiki/Inflationhttp://en.wikipedia.org/wiki/Gross_domestic_producthttp://en.wikipedia.org/wiki/WTOhttp://en.wikipedia.org/wiki/WTOhttp://en.wikipedia.org/wiki/WTOhttp://en.wikipedia.org/wiki/WTOhttp://en.wikipedia.org/wiki/Gross_domestic_producthttp://en.wikipedia.org/wiki/Inflationhttp://en.wikipedia.org/wiki/World_Bankhttp://en.wikipedia.org/wiki/Musevenihttp://en.wikipedia.org/wiki/Bank_of_Ugandahttp://en.wikipedia.org/wiki/Ugandan_shilling


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Uganda's imports in 1998 consisted of US$130.3 million of road vehicles, US$111.6

million of petroleum.

Trade (expressed in billions of US$): Uganda

Exports Imports

1975 .026 .200

1980 .345 .293

1985 .387 .327

1990 .147 .213

1995 .461 1.058

1998 .512 1.409

Source: International Monetary Fund. International Financial Statistics Yearbook 1999.

US$72.4 million in cereals, and US$53.65 million of medical goods and

pharmaceuticals. These imports were predominantly sourced from the EU, which

supplied 17.3 percent (the United Kingdom being the main partner, providing 5.6

percent), neighboring Kenya supplied 12.3 percent, Japan 4.5 percent, and India 4.1

percent. The countries of East Africa have been trying to create a meaningful intra-

regional trade organization since the 1960s. The signing of the East African

Cooperation (EAC) treaty between Uganda, Tanzania, and Kenya in 1999 was a

continuation of this historic aim; however, in practice little has been done to

reduce tariffs . Uganda is also a member of the Common Market for Eastern and

Southern Africa (COMESA), which in 1996 introduced an 80 percent tariff reduction on

trade within COMESA countries; by 2001 Uganda was one of the only members to

implement this reduction in full.


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Trade Relations Between India and Uganda

Uganda and India have been actively engaged in trade with one another for a number ofyears. This trade relationship has been significant in contributing to economic benefits

for both countries.

Relations between India and Uganda have been problem-free, but episodic, theFederation of Indias Chambers of Commerce and Industry notes. The Indian community played a prominent role prior to and in the early years ofUgandas independence, a factor that resulted in cordial relations from 1962 till the Idi

Amins take-over in 1971.

Ugandas relations with India suffered most notably in 1972 when Amin expelled themfrom the country. In the late 1980s, Indian nationals started returning to Uganda andrepossessing most of the properties they had lost at expulsion.

Today, the number of people of Indian origin in Uganda is estimated at between12,000 and 15,000. Out of this, about 5,000 hold Indian passports and the remaininghold British, Canadian, Ugandan and other passports.

Most Indian nationals in Uganda are occupied with business, owing to their good

entrepreneurial acumen. There is also an inflow of new entrants, mostly in thecategory of professional or skilled and semi-skilled workers.

Many of the prominent Indian nationals are executives in the banking and insurancesectors, as well as that for Information Technology.

The volume of trade between India and Uganda has increased. Between 1984 and2003, the volume rose from $5.6m to $105.5m. In subsequence, Indias exports toUganda, have also increased.

India is now the second biggest exporter to Uganda (after Kenya). Exports constitutearound 8.5% of Ugandas total imports.

Major exports items are: pharmaceuticals, bicycle and bicycle parts, automobile


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components, tyres, small industry and agro-processing machinery, 2-wheelers, textilefabrics, sports goods etc.

According to the federation, Indian products account for 30% of the total

pharmaceutical imports into Uganda. India is the largest exporter ofpharmaceuticals/chemicals to Uganda, states the federation.

Indias performance in the field of tyres and tubes is also satisfactory, with a share of25%. After Kenya, it is the second biggest exporter of tyres and tubes in Uganda.Imports from Uganda are, however, negligible.

India-Uganda trade is tilted largely towards India. Mainly raw hides and skins, cobalt& allows, teak wood, scrap etc are imported in very small quantities. Information at

the Uganda Investment Authority (UIA)shows also that India is potentially, thelargest investor in Uganda. Among the Indian companies registered with the Authorityare Tata Group of Companies; APTECH Uganda; Roadmaster Cycles; and MahindraTractors.


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SWOT ANALYSIS OF INFRASTUCTURE

STRENGTHS:

Emerging Industry:

The infrastructure Industry is at a nascent stage. So there is a long way to go

for the industry. The life of the industry goes with the economy, which is the

end user of the Infrastructure.

Huge Growth Potential:

The Uganda's infrastructure Industry has a huge potential to grow. Even at

todays nascent stage the industry is growing at the rate of fifteen percent,

which is almost double than that of the current GDP rate of the country.

Improves the Productivity:

The infrastructure improves the productivity of the economy by increasing

the life of the structures.

Availability of raw materialsThere is sufficient availability of raw materials in the region.

Real Estate Development

It is on a high and is attracting the focus of the industry towards

construction.

WEAKNESS:

Distance between projects reduces business efficiency.

Chances of Natural disadvantages are there.

Training itself has become a challenge.

Lacks of clear define process and procedures for construction and its

management.


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Low financial support.

OPPORTUNITIES:

Public sector projects through Public Private Partnerships will bring

further opportunities.

Developing supply chain through involvement in large projects is likely

to enhance the chances in construction.

Financial supports like loan and insurance and growth in income of

people is in support of construction industry.

THREATS: Long term market instability and uncertainty may damage the

opportunities and prevent the expansion of training and development

facilities.

Lack of political willingness and support on promoting new strategies.

Natural abnormal casualties such as earth quake and floods are uncertain

and can prevent the construction boom.

Inefficient accessibility in planning and concerning the infrastructure and

signs.

Political and security conditions in the region and Late legislative

enforcement measures are always threats to any industry in Uganda.


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PARTII INDUSTRY SPECIFIC

STUDY


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Chapter 1:

Introduction of the infrastructure Industry and its effect in theeconomy of Uganda:

Uganda's case is a common one in Africa with inadequate infrastructure holding

back development and economic growth. The government and its development

partners are aware of this restraint and are taking active steps to address this

problem.

Although significant efforts have been made to develop and rehabilitate theexisting physical and non-physical infrastructure, potential investment

opportunities still abound. For instance, the communications and energy sectors

still require further investment particularly from the private sector. The

Government of Uganda is seeking private in the energy sector given the bright

prospects of Uganda's economy. With less than 10% of the mainstream capacity of

2,700 megawatts of power exploited, Uganda has the potential to be a major power

supplier in the Sub-Saharan African region. Other areas with possible investment

potential could include storage, education, communication & related services,general construction/real estate development and medical services.

Uganda has gazetted over 1000 hectares of prime industrial land to be developed

into fully serviced industrial estates and export processing zones. The Uganda

Investment Authority, which holds the government interest in the proposed project,

is actively courting private sector participation in the development of industrial

estates and export processing zones.


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EFFECT OF THE INFRASTRUCTURE on the

economy of Uganda:

Quality of Life:The quality and cost of living in Kampala and other major towns in

the country compares favourably with what investors may hope to find

elsewhere in Africa. Modern first class hotels, serviced apartments are to be

found in the urban centres.

Leisure facilities exist for such pass-times as golf, horse riding and

equestrian sports, tennis, white water rafting and sailing on the Lake

Victoria. Uganda's education system is still among the best in Africa and

provides good quality education at different levels. Foreign investors and

their expatriates can enrol their children at a number of reputable

international schools in the country. Unfurnished housing accommodation in

Kampala goes for between US$500 and US$2000 per month.

Education

There are presently eleven universities in the country and a number of

polytechnics with Makerere University being the major national higher

institution of learning. All levels of skills and training needed for a growing

economy are to a great extent addressed. Particular emphasis has been

placed by the country on the development of the science-based skills such as

medicine, research, engineering and technology.

The country generally boasts of an impressive literacy rate by any

standards and this is likely to improve following the recent introduction by

Government of the Universal Free Primary Education. Ugandan labour is

relatively cheap and large percentage of the population can speak and write

English which should prove a major asset for foreign investors wanting tocome to Uganda.


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Structure and Function of the infrastructure Industry in Uganda:

The infrastructure of Uganda includes four sectors.

-

Telecommunications- Road & Transport (Logistics)

- Real-Estate

- Energy

1)TelecommunicationsThe Telecommunication sector is growing with the introduction of

new technology. Uganda has two national telecom operators, namely,

Mobile telecommunications Network (MTN) - a South Africa led

consortium, and Uganda Telecom Limited (UTL), which was privatised in2000. The companies provide mobile cellular phone networks, paging

services and other modern communication services to meet the business

needs of users.

Service delivery is improving steadily with various players

introducing new products into the market. For instance, MTN announced

plans to set up a fibre-optic network in Uganda, expected to be operational

by the second quarter of 2001.

2)Road & Transport (Logistics)Uganda continues to invest heavily in the development of its

infrastructure. Uganda's excellent road system is well linked to its principal

trading partners, Kenya and Tanzania. The bulk of the country's imports and

exports are handled through the port of Mombasa in Kenya.

Road transport costs per ton range from US$40 - 50 per ton and

delivery time from Mombasa to Kampala is normally four days at most. The

costs by rail are up to 50% cheaper and this mode of transportation is

recommended for bulk cargo. The main airport at Entebbe currently handles

more than 40 international flight connections per week to various cities in

Europe, thus easing travel in and out of the country. Direct flights exist to

London, Paris, Brussels, Johannesburg, Cairo, Tehran, Dubai and Moscow.

In addition, a number of international courier firms such as DHL, TNT and


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Skypak are actively represented in the country making delivery of urgent

documents and materials easy.

3) Real-EstateIn Uganda large amount of land is available for the use. Land is

considered as a big benefit for the development of any country. The prices in

real estate are fluctuating in different regions of Uganda with ample

resources in the land Investors may acquire land on leasehold basis for

renewable periods of up to 99 years. Land can be obtained from private

owners, local councils and other government agencies. Land in Kampala is

more expensive than land in other areas of the country. The Uganda

Investment Authority (UIA) maintains a database of land that is available for

investors. In addition, the UIA owns large tracts of land in various parts of

the country.

4)EnergyThis has been Uganda's major infrastructure constraint. In spite of

having a potential hydroelectric power generation capacity of some 2,700

megawatts, Uganda currently produces less than 200 megawatts of energy.

National demand for electricity continues to expand rapidly on account of

the fast growing economy.

Uganda has taken steps to address this deficiency, three private power

projects have been commissioned and has added another 700 MW toUganda's energy production by the year 2003. The private projects include

the Kalagala Falls Power Project promoted by Arabian International

Construction Ltd - Egypt and Nile Independent Power promoted by Applied

Energy Services, USA. Together, these two projects are investing an

estimated US$1 billion. Work on all the projects is already underway.


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SWOT Analysis of the sectors in Infrastructure in

Uganda(Business Activities Point of View):

1)TELECOMMUNICATION

Strength

Sector rapidly grew leading to coverage in 90% of the country

One of the most competitive sectors in Uganda

Price point has decreased rapidly, making phones affordable to growingmasses of Ugandans

Six months from the introduction of mobile money transfer, MTN andZain registered approximately 250,000 clients onto the mobile moneytransfer service moving over 40 billion shillings in transactions.

Voice SMS service offered.

Uganda telecom recently launched solar-powered GSM phone.

Weakness

Penetration has leveled off

Price point may not lower further

Value-added services slow in developing (compared to other regional

countries like Kenya and Rwanda)

Opportunities

Value-added services including mobile banking and other SMS-basedoptions

East African fiber optic cable will lead to vast internet opportunities

Sector deregulated in 2000


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Threats

Low literacy rates limits rural penetration

Rapid expansion sector may have too much competition

Urban market is near full maturation

2)Road & Transport

Strength & Opportunities

Demand for transport growing faster than GDP

Increasing interest from IFI, institutional investors & some specializedoperators

Availability of instruments to mitigate risks

Weakness & Threats Weak legal framework for PPP/PSP

Risk of head to head competition between various modes

Region perceived as high risk (political risk, regulatory risk)

3)Real Estate

Strength & Opportunities Vast available land resource

FDI in real estate is also increasing

Increasing prices of land

Weakness & Threats Lack of regulation from government

Irregularity in the pricing of the land

4)Energy


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Strength Fast growing demand (especially for power)

Availability of vast under-exploited resources (hydro & thermal

generation) Reasonable openness towards private foreign investors (but less so in

water & sewage)

Weakness

Limited pool of suitable local partners

Weaknesses in the legal & regulatory framework

Opportunities

Increasing interest from IFI and institutional investors

High priority for national governments and regional cooperation

bodies/initiatives

Threats

EAIO region perceived as a high risk area


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Chapter 2(Part A):

Comparitive position of Infrastructure with India and Gujarat(Achievements & Challenges):

Transport

Achievements

Transport Relatively low cost of moving goods across borders.

Trucking sector is liberalized and more mature than other parts of Africa.

Challenges

Improving infrastructure and transport services to hinterland countries particularly SouthSudan.

Addressing bottlenecks at regional ports.

Roads

Achievements

Roads Adequate road density and high traffic volumes.

National network is in relatively good condition.

Challenges

Providing adequate funding for road maintenance.

Improving rural road quality and connectivity.

Improving road safety conditions


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Railways

Achievements

Kenya-Uganda railway is one of the more heavily used railways in East Africa.

Challenges

Boosting traffic and productivity

Air

Achievements

Liberalized air transport markets with growing traffic and good connectivity to East

African hubs.

Challenges

Boosting air safety standards.

Water Resources

Achievements

Well endowed with water resources relative tobenchmarks.

Challenges

Managing conflicts between alternative water uses.

Protecting water resources, such as wetlands, from encroachment, degradation andpollution

Irrigation Development of irrigation has been strategicallyplanned around areas of high cultivation.Exploiting major potential for development of high-return,small-scale schemes on the eastern side of the country.


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Water Supply & Sanitation

Achievements

Achievement of MDG for sanitation and close to achieving MDG for water based on

expansion of intermediate service levels.

Efficiency of water utility improved significantlydue to use of performance contracts.

Challenges

Expanding supply of utility water to keep pace with rapid urbanization.

Increasing access to improved water and sanitation services for poor households.

Addressing stubbornly high system losses and furtherimproving cost recovery.

Power Sector

Achievements

Power Major power sector reform.

Recent doubling of power generation capacity.

Accelerating electrification, particularly in rural areas.

Challenges

Addressing very high system losses and improving costrecovery of the utility.


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Information and Communication Technology (ICT)

Achievements

Early and successful ICT sector reform.

Huge expansion of mobile telephony penetration and footprint with highly competitivemarket.

Terrestrial connection to new submarine cables via Kenya.

Challenges

Optimizing industry tax burden.

Reducing costs of broadband services.


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Trend of business with India:

India, one of Asias fastest growing economies, plans to establish a

Shs48 billion knowledge centre in Kampala to promote international

trade in Africa. Mr K.T Chacko, the director Indian Institute of ForeignTrade, revealed the plan at a conference aimed at getting the input of

beneficiaries of the India-Africa Institute of Foreign Trade (IAIFT) in

Kampala.

Pan African project

It is meant to be a Pan-African project that will promote the marketing

of products from Africa to the world. There will be a huge opportunity

for acquiring professional knowledge, Mr Chacko told Daily Monitor onthe sidelines of a conference.

The institute which will kick off at the Uganda Management Institute

(UMI) this year, before getting its headquarters due in 2013, will train

students in management courses including; International Business,

Masters in Business Administration and several executive development

programmes. Mr Deo Lukonji Bbosa, the acting director of UMI said

IAIFT will initially be hosted at faculty of business and competiveness at

the institute.

Strengthen cooperation

The institute is part of efforts by the Indian government to strengthen

economic cooperation and trade with African nations, under its Pan-

African Project. The programme was initiated at the first India-Africa

Forum Summit held in New Delhi in 2008. At the second summit in

Ethiopia last month, Indias Prime Minister Manmohan Singh also

announced a $5 billion credit line for African nations pursuingdevelopment goals. The initiatives come at time when major powers in

several parts of the world are scrambling for a share of business and

mineral resources in Africa.


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Other economic powers competing for Africa include; China and the

European Union which have initiated various trade agreements with

African governments such as the European Partnership Agreements.

Indian Perspective

BHEL (Bharat Heavy Electricals Limited ) a major player in Indian

economy is planning to invest in Uganda for the development of the

Electricity and power generation in the country.

The labour in the country is found to be cheap in comparison to other

African nations so for infrastructure improvement Uganda is the best

suited and has seen increase in Indian colaboration. Recently oil has been found in the fields of Uganda and India is

exploring the opportunities for its petroleum needs.

Uganda has flexible foreign investment rules so with the use of it Indian

investors are gaining good returns over their investment in the

infrastructure sector.

There has been an establishment of Foreign agreement of $20 million

with a target to bring growth in the transactions for both the countries.

Uganda is growing in comparison to other African nations also Uganda isalso prime importer of Indian products so with the development of

Uganda, Indian exports will also sees a rise of 12% every year since

2002.


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Chapter 2(Part B):

Policies and Norms of Uganda for Infarstructure Industry for

cooperation and licensing:

Authorities in International Trade

Uganda Export Promotion Board- UEPB carries whose mandate "tofacilitate the development, diversification, promotion and co-ordination ofall export related activities that lead to export growth on a sustainable basis.

Uganda Revenue Authority - Maximizing central government tax revenue

while optimizing resource utilization by ensuring a fair and equitable taxadministration.

Uganda Investment Authority -Uganda offers an exceptional opportunityfor your business in the heart of Africa. Located almost in the center of thewidespread African Market, Uganda is already the preferred home of severalleading Global Corporations and International Organizations. Uganda is oneof the fastest growing economies (+6%) and one of the most liberalcountries for foreign investment in Africa. A place where opportunities for

business are plenty, it is an ideal place to set up a bridgehead to accessAfrica. Uganda Investment Authority provides pro-active assistance in allaspects for investing in Uganda.

Uganda Manufacturers Association- UMA's role is to promote, protectand coordinate the interests of industrialists in Uganda.To act as a watchdogand an effective mouth piece for it's members.,To initiate discussions andexchange of information amongst members on industrial issues, UgandaManufacturers Association advises Government on key policies affecting the

industry


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ICT and Infrastructure policy (Key strategic issues and suggested remidial

actions)

The rapid developments witnessed during the recent years in the field of ICT

directly impact on the economic, social and cultural life and are now broadlylinked to the ability of countries to keep pace with the advances. The disparity

among countries as measured by the digital divide separating them is a major

challenge facing the developing countries in regard to economic revival and the

guarantee of a secure future for their people.

Uganda is consequently working within the scope of a comprehensive and

integrated plan intended to promote the communications technology sector with a

view to supporting the countrys development effort and fulfilling the requirements

for boosting investment and opening up the economy to the outside world in thecontext of an external environment characterized by economic globalization,

competition in trade, industry and technology.

Infrastructure: policies

Key Strategic Issues:

1. Any action to deal with infrastructure and content development should stemfrom a national e-strategy reflecting each countrys conditions and priorities. To

ensure sustainability of the e-strategies relevant stakeholders should be involved in

their development and implementation and appropriate financial and technical

support offered to developing e-strategies.

2. The urgent need to mobilize massive resources for investments in information

and communication technology in the developing countries especially the least

developed countries.

3. The need for the provision of ICT equipment at the lowest cost.

4. Special attention should be given to inclusion of remote and underserved areas

and disadvantaged groups including women, youth and persons with disabilities in

deployment of infrastructure.


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5. Enabling Public Private Partnership (PPP) for the deployment of national ICT

infrastructure

6. Investing in and deploying broadband communication technologies to enhance

capacity of ICT infrastructure.7. Seek affordable and sustainable solutions for infrastructure development.

8. The need to develop and strengthen Libraries, Archives and Documentation

Centres.

Actions:

1.

Develop national policies and implementation mechanisms to address specificobstacles to ICT deployment.

2.

a) Government should source financing for ICT innovations in order to turn them

into productive enterprises.

b) ICT development debt swaps under the HIPC for e-government initiatives.

3.

a) Government should promote manufacture of ICT equipment locally.

b) Government should reduce and where possible waive all taxes on ICT

equipment and software and put in place mechanisms for follow up.

4.

Establish a universal access fund for infrastructure especially geared to

underprivileged areas and disadvantaged groups including women, youth andpersons with disabilities.

5.

Create incentives for local and Foreign Direct Investment


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6.

a) Establish a National Information Portal to promote dissemination and access to

information in the public and private sector domain

b) Establish a National Internet Protocol backbone network, and adequateconnectivity to the Global Information Infrastructure (GII).

c) Establish infrastructure that addresses ICT applications of crosscutting sectors

like health, education, agriculture, local administration, etc.

7.

a) Government to promote and support development of appropriate ICT solutions

that are affordable and sustainable.

b) Promote and guide the establishment of community radio stations so as to

increase levels of information dissemination and public participation.

8.

a) Government should promote and where necessary invest in strengthening

libraries, archives and documentation centers.

b) Create national and regional Resource Centres.


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Policies and norms of India related to Infrastructure:

POLICY IN INDIA

It is a republic with a federal structure and well-developed independent judiciary

with political consensus in reforms and stable democratic environment. GDP at

current prices stood at US $ 479.40 billion and present growth rate is 5.4 percent

(2001-02) with a low inflation rate of 1.9%. India is the 4th largest economy in

terms of Purchasing Power Parity (PPP). It has a rapidly growing consumer market

of more than 300 million people and has developed as one of the largest cost-

competitive technical workforce nations with large pool of skilled manpower and

Professional management including engineers, lawyers, managerial personnel,

accountants etc. India was identified by 82 percent of US companies as their top

destination for software outsourcing and there is a promising future in the

burgeoning information technology industry. In the recent years India has also

adopted conducive foreign investment policies and well-balanced package of

fiscal incentives with free repatriation of profits and capital investment.

While the Government has so far been the predominant provider of infrastructure

facilities, social obligations of governance have led to increasing pressures on

finances of the service providers resulting in inadequate availability of resourcesfor improvement of existing systems and additions of capacity. The immediate

requirement of funds for development of new facilities and improvement of

existing ones has been estimated at US$ 500 billion in various sectors.

Requirement of funds during 2005-06 for Power, Roads and Port sectors is

expected to be US$ 12.2, 2.7 and 0.7 billion respectively.

The Government has been putting in place legal and policy structures in vital

sectors of telecom, roads, oil & gas and ports to foster private participation. Fiscal

incentives are being provided for projects in these sectors and private participationis being sought for bringing in technology, management and financial resources in

setting up new capacities and improvement of existing ones. Government has also

been participating in the development of private projects as partner cum facilitator.


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Government Financing

Infrastructure projects typically involve large capital expenditures in order to

create physical assets that will subsequently be used for the production of

economic and social services in the long term. They are complex activities

requiring specific expertise and resources for both the construction and

operating phases, significant financial outlays, and the need for some parties

to bear the risks associated with the project. Historically, the tendency has

been for infrastructure financing, construction and operation to be primarily

within the public sector, although contracting out some specific construction

or operational tasks was undertaken by the private sector. Highways,

telecommunications, power, railroads, hospitals, prisons and schools arecommon examples of utilities that were funded by the state. These were

viewed as having natural monopoly characteristics, involving externalities,

or as not appropriate for a userpays approach, and thus not suitable or

feasible for private sector provision.

Private Sector in Infrastructure Financing

Since the late 1980s, there has been a profound reassessment of public

policy towards the infrastructure sectors as a result of technological change,

better appreciation of the linkages between incentive structures and

operational efficiency, and greater acceptance of a user pays philosophy

(Grimsey and Lewis, 2004). Consequently, there has been a shift towards

private management (private sector participation) and private ownership

(privatization) of these industries, as well as the competitive provision ofservices within parts or all of these sectors (liberalization) for two major

reasons. First, because of the generally poor performance of state-owned

monopolies. Second, because of the rapid globalization of world economies,

which has brought into sharp focus the economic costs of inadequate

infrastructure, prompting several developing countries to seek new


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initiatives to promote competition, involving private and foreign interests in

the provision of infrastructure.


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Chapter 3

Business Opportunities in future in Infrastructure:

Uganda must invest at least $20-billion in infrastructure over the next

five years to drive economic growth and put the East African nation on

the path to transformation into a middle-income economy by 2030, a new

study has shown.

The study, by consulting firm Deloitte, shows that, for Uganda to achieve

the aspirations of the National Development Plan (NDP), the countrymust invest heavily in energy, rail, road, airport and telecoms

infrastructure.

According to the Uganda Infrastructure Fund (UIF) feasibility study, the

country currently faces an infrastructure funding deficit of $15-billion,

having managed to secure funding commitments totalling $5-billion from

various financiers.

The NDP, Ugandas development blueprint, outlines President Yoweri

Musevenis governments vision to improve road and rail networks,create employment opportunities, improve labour force distribution and

the training of human resources, and use the private sector as the engine

of growth and development. The plan envisages that Uganda will be a

middle-income economy by 2030.

The study suggests that an initial government investment of $300-

million, in the form of equity or debt, could provide sufficient seed

capital for the UIF, whose total capital is projected at $1-billion in the

early phase, with the balance being, raised from private investors.It reveals that, with a legal and regulatory framework that facilitates

private investment in infrastructure (through a publicprivate partnership

framework), the UIF has the potential to create significant private-sector

development opportunities.


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Uganda continues to attract high levels of foreign investment despite

unrest, endemic corruption and wildly fluctuating currency prices. The

strength of the countrys natural resources have ensured that industrial

construction projects continue to take place, but to date these have had

little impact on the countrys antiquated infrastructure. The constructionsector is forecast to demonstrate year-on-year (y-oy) growth of 14.9 % in

2011, taking the industry value to US$2.6bn.

Uganda received a US$120mn loan from the World Bank with which to

carry out vital improvement work to the countrys national electricity

grid, according to Engineering News. The work, which is part of a drive

to connect more citizens to the network, will address power shortages

across the country and reduce the need for businesses to rely on

expensive diesel generators. The Ugandan government has received a US$120mn loan from the

World Bank (WB) to finance a project to upgrade the national electricity

grid. The five-year project will consist of building 137km of transmission

lines and substations, along with offering technical support and

connecting approximately 6,500 new customers to the grid in the

countrys south-western region. The funds will also be used to move

people residing on land through which the line will run.
http://www.pr-inside.com/uganda-infrastructure-report-q-r2967632.htmhttp://www.pr-inside.com/uganda-infrastructure-report-q-r2967632.htmhttp://www.pr-inside.com/uganda-infrastructure-report-q-r2967632.htmhttp://www.pr-inside.com/uganda-infrastructure-report-q-r2967632.htm


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Future Trade Opportunities between India & Uganda

Ugandas abundant natural resources like oil, gas, minerals and many more yet tobe discovered imply Uganda has a good future ahead. He urged Ugandans,

regardless of political differences, to rally behind government to harness theextraction of these resources now.

Technology is another factorbrightening up Ugandas future. That Uganda haschance to adopt sophisticated technologies, like Brazil did 40 years ago, to harnessinnovation and productivity in agriculture and transport sector. He said technology

transfer is cheaper and more affordable today than 40 years ago.

Thirdly, are trade opportunities coming with creation of the East AfricanCommunity. Moving together, he said, the region has higher bargaining power inworld trade whereby a mere 1% increase in our share of the world trade will bringus $70m.

The ever widening middle class is an additional opportunity for Uganda. Hedefined this as Ugandans living on between $2-$20 per day. By 2030, one in every

two Ugandans will be in this middle class. This will increase localconsumption/market, which is an incentive for increased production. He saidgovernment must attract more Foreign Direct Investments to nourish this middleclass.

The demographic dividend arising from a growing population whereby in future

there will be fewer children and elderly people to support. Uganda has lots of landnear urban centers which is an advantage to be harnessed to increase foodproduction.

China will soon start outsourcing low-skill manufacturing jobs perhaps as manyas 85m over the next 10 years. Katongole says Ugandas young labor force standsto benefit from this. Uganda also has a relative proximity to US and Europe, themajor destinations for Chinese products.


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Existence of the growing number of younger entrepreneurs in both business andindustry. The social media revolution exposes these younger entrepreneurs toknowledge, curiosity and readiness to take business risks.The ever improving quality of corporate governance in Uganda. There isincreasing dependence on market research, relationship trust, ethical businessstandards, quality consciousness and global branding among todays businessclass. The advent of capital markets and venture capital is further evidence.Katongoles paper prescribed urgent necessary regulatory reforms in the energysector to take the development pace to another level.

Potential for trade between Gujarat & Uganda

Following sectors have high potential to develop trade between Gujarat andUganda

Agriculture and Agro Processing Dairy Industries Technical Skill Up Gradation Petro-Energy Research

The progressive State like Gujarat can play a decisive role in the

development of Uganda.

India has emerged as one of the largest investors and tradingpartners of Uganda in the last two decades.

These include manufacturing, agro-processing, banking, sugar, real estate, hotel,tourism, textiles, pharmaceuticals, construction and the ICT sector. Srivastavapoints out that bilateral trade between both countries has grown from $5.6m in1984 to more than $262m in 2007, while planned investment from India was$377.25m, the largest from any foreign country.Relations between India andUganda date back to the 19th Century, when over 30,000 Indians were brought toUganda during the colonial times to build the railway line from Mombasa toKampala.


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CONCLUSION

According to the report and SWOT analysis we can conclude that theinfrastructure sector Uganda is growing rapidly. among the infrastructuresector logistics and energy are the developing sectors. the sector is on theverge of developing but due to corruption and political turmoil there hasntbeen significant growth. Uganda has recently changed its foreign policyhence lot of investments are about to pump in to the country. World BankIndia, china and various other countries are investing in Uganda. EspeciallyIndia with various trade agreements and infrastructure projects investing inUganda. so investment in infrastructure sector of Uganda will give greatreturns.

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