Kampala | December 28, 2022
(as prepared for delivery)
Good morning. Thank you all for hosting me today. I am delighted to be with you in person this morning to discuss trade and investment in Uganda. Though COVID-19 and Ebola are still issues we have to contend with, it does finally feel like we can breathe a bit of a sigh of relief as many aspects of our lives get back on track.
We are here to discuss opportunities in Uganda, but this conversation should be considered in the context of the Biden-Harris administration’s focus on Africa writ large. We are just on the heels of the U.S.-Africa Leaders Summit and the associated U.S.-Africa Business Forum. This was the first Africa Leaders Summit since 2014. In August this year, the administration published the U.S. Strategy Toward Sub-Saharan Africa. There are a number of items in the strategy that relate to things we will discuss today, like conservation, climate change, pandemic recovery, and economic opportunity, all of which were discussed at our recent Summit.
The Summit was a tremendous success and produced clear results. President Biden pledged $55 billion for Africa over the next three years to address core challenges. This includes $370 million from the Development Finance Corporation for climate change efforts, a partnership with Microsoft to bring internet access to 5 million people on the continent, a $100 million expansion of the Young African Leaders Initiative, and an agreement from my government to support the African Union in its bid to join the G20.
For Uganda specifically, the U.S.-Africa Business Forum announced a significant expansion of private sector economic engagement with the United States, including:
- An announcement that U.S.-based Yaatra Ventures is in the final stages of agreeing on a multi-billion dollar investment in Uganda’s energy sector that will help Uganda add value to its natural resources and create up to 40,000 jobs;
- The recognition that Ugandan telecommunications company Ubuntu Towers utilized advisory services from our Prosper Africa initiative to receive a $35 million loan to expand information and communications technology infrastructure in the region; and
- An exciting statement from the U.S. African Development Foundation that it will utilize part of a new $5 million regional investment to expand a grant funding program for micro, small, and medium enterprises in Uganda,
President Biden said it best when he told leaders from across the continent that the United States is “all in,” on Africa, “Because when Africa succeeds, the United States succeeds,” he said. “Quite frankly, the whole world succeeds as well.”
But I think particularly relevant to our discussion is the focus on engagement with America’s African diaspora, which is noted in the strategy itself. It is part of a larger effort to build what we are calling “21st century partnerships.” Those partnerships span governments, civil society, the private sector, and the diaspora. And they aim to animate conversations about the world’s most pressing challenges, like the ones I noted earlier, as well as Russia’s invasion of Ukraine, democracy and governance, security, trade and investment, and development. These issues are in many ways intertwined, as you well know.
That is why we are thrilled that President Biden recently announced the Presidential Advisory Council on African Diaspora Engagement in the United States. Secretary of State Antony Blinken will oversee this new effort which aims to build cultural, social, political, and economic ties among the global African diaspora and the United States. A significant part of this effort will look at ways to strengthen both public and private sector economic engagement on the continent.
As a senior U.S. Department of Commerce official noted recently, “the private sector plays a critical role in driving the broader relationship between the United States and African countries.” He said, “It is our role as the U.S. government to work with African governments to create commercially enabling environments in which two-way trade and investment can flourish.”
Now I want to share with you some of the contributions the United States has made to help improve trade and investment here in Uganda, and how we have made them. The U.S. government’s Mission in Uganda is composed of representatives from 13 U.S. federal government agencies, and together we look for opportunities to increase trade and business ties between our two countries. The U.S. Agency for International Development (or USAID), the U.S. Foreign Commercial Service, and the U.S. Department of State take the lead on trade and investment issues as well as complimentary efforts to improve the business environment. Much of the U.S. government’s foreign assistance in Uganda is focused on health, and this, too, supports a more viable business environment, as businesses need healthy workers to sustain themselves. We work on conservation issues, which have a direct impact on the quality of tourism in Uganda. We support activities to improve food security; develop and implement policies to improve marketing and trade; and create an enabling environment for the private sector to invest. We support civil society and good governance practices, which a country needs to attract investors. Let me also note that U.S. engagement in Uganda and with Ugandans in these many areas have been taking place since independence 60 years ago. And we continue to work towards a brighter future, together with the Ugandan people and with the Ugandan diaspora.
Countries that are open to international trade tend to grow faster, innovate, improve productivity, and provide more opportunities to their people. The U.S. government assists the Government of Uganda to improve the free and efficient movement of goods and services in the region by reducing the time and cost of trade, and to strengthen regional trading networks’ ability to take advantage of these improvements.
During the last seven years, we have provided substantial technical and institutional capacity-building to the Ministry of Trade, Industry and Cooperatives (MTIC).
The U.S. government’s Feed the Future initiative, which started here in 2011, has supported Uganda to improve access to markets and trade in agricultural commodities locally, regionally, and internationally. The program is currently building the capacities of two parastatals under MTIC—the Uganda National Bureau of Standards and the Uganda Warehouse Receipts Authority.
We are also supporting the establishment of a Management Information System at the Uganda National Bureau of Standards to improve private sector access to information on standards and certification.
Due to the COVID-19 disruptions in services and supply chains, Uganda’s exports declined by 29.6 percent, and imports declined by 27.4 percent, according to the Bank of Uganda. To address the challenge, we supported MTIC to digitize its trade registry to provide new channels of electronic trade. This reduced transaction costs and improved service delivery.
In 2021, we advanced the formulation, review, and implementation of various enabling environment policies to help Ugandan enterprises offer competitive, safe, reliable, and cost-effective products to local and global markets.
Strengthening Uganda’s institutional capacity is key to growth in trade and investment. The African Growth and Opportunity Act (AGOA) is a good example of a program to support this capacity. Uganda is eligible to take advantage of this legislation that enhances market access to the U.S. for qualifying Sub-Saharan African countries. But to qualify and remain eligible for AGOA, each country must be working to improve its rule of law, human rights, and respect for core labor standards. This is a topic on which we regularly engage the Ugandan government. As Ambassador Brown wrote in her op-ed published on Human Rights Day, “The need for governments to respect human rights is not just based on altruism. It also makes good business sense. Countries that respect human rights are seen as safer investment destinations. Investors fear that if people’s human rights are not respected, then their companies’ rights may not be enforced either. Put simply, countries can develop fastest and most equitably by protecting the rights and freedoms for all its people.”
You know better than anyone the great opportunities that exist in Uganda, and you can play an important role in attracting diaspora entrepreneurs and U.S. investors here, while also advocating for the policies and conditions that will allow businesses to prosper and Ugandans to benefit from the growth.
Two years ago, Ambassador Brown spoke to this group and laid out several areas where we saw potential opportunities. These have not changed, and I will lay them out again.
The oil & gas sector where there are opportunities around engineering, project management services, vocational training services, environmental hazard management services, and petroleum industry equipment exports.
The power sector where there are opportunities for exporting renewable energy equipment and services for on-grid, off-grid, and micro-grid applications; energy transmission and distribution projects; and engineering and environmental management services.
In agriculture we see opportunities such as equipment for value-added production of agricultural products, irrigation systems and their components, and provision of agriculture management services.
In construction where there are opportunities like architecture services; construction equipment sales; project management services; and environment management services.
In information and communications technology where there are opportunities for building data centers; providing data security services and internet services; and exporting telecommunications hardware, fiber optic equipment, and network hardware.
And finally, the healthcare space where there are opportunities for the provision of pharmaceutical, medical diagnostic, and treatment equipment; and investing in pharmaceutical facilities.
While the pandemic and climate change have contributed to economic concerns for Uganda, they also provide opportunities. For example, as Uganda depends largely on seasonal rains for agriculture, but the effects of climate change disrupt the seasonal cycle, irrigation is an investment opportunity. Uganda soil remains largely fertile, with low fertilizer usage. However, climate change may require greater use of fertilizer over time, providing an opportunity for fertilizer manufacturing or export. There is also an opportunity to sell U.S. agricultural equipment to farmers and processors within Uganda.
Tourism declined during the pandemic but is on the rise again. This is another growth sector, and it needs additional accommodation for both high and low value customers.
Ugandan Economic Potential
Uganda’s population of 44 million presents a significant opportunity on the international market. Uganda is part of the East African Community (EAC), which has a market potential of 300 million people in seven countries which extend preferential tariff rates to members. Additionally, Uganda is now part of the African Continental Free Trade Area, which aims to facilitate intra-African trade. Uganda has a fast-growing youth population that needs jobs and therefore provides workers for labor-intensive business.
The recent EAC expansion to include the Democratic Republic of the Congo presents Uganda with excellent opportunities to reinvigorate the trade sector and support Uganda’s economic recovery.
U.S. FDI and Trade in Uganda
A small but mighty American Chamber of Commerce stands ready to welcome new U.S. businesses and Ugandan companies doing substantial business in the U.S. According to the latest numbers from the Office of the United States Trade Representative, Uganda puts U.S. foreign direct investment at $42 million. We are proud to have U.S. companies in Uganda, such as Citibank, Coca-Cola, ATC, Agilis Partners, and Sheraton, among others. Sama, a U.S. tech company has invested in both Gulu and Kampala, where they employ Ugandans to do Geotagging for American tech firms like Google, Amazon and Microsoft. Sama employs about 500 Ugandans. ATC’s tower business enables 90% of Uganda’s communications.
And while we are delighted to see the financial success of U.S. business in Uganda, we also recognize, as I’m sure you do, that U.S. companies do more than make money and create jobs. They bring expertise, experience, and value that helps improve the overall business environment. When we speak of democratic values, we are not only talking about governance. American companies believe in transparency, accountability, employing local labor, paying living wages, following the law, and, increasingly, diversity, equity, inclusion, and accessibility. American businesses deliver quality goods and services. Many American companies have a robust corporate social responsibility mandate. These are values that are often communicated, shared, and instilled in places where American companies operate. You know this. And as members of the diaspora, you can be the bridge between our two countries to help bring more opportunities and more benefits to the American and Ugandan people.
I thank you again for inviting me to be with you today. I hope you enjoy the holiday season and that the New Year brings good health, prosperity, and peace to you, your families, and both Uganda and the United States.