Investor confidence depends not only on the availability of opportunities, but also on the assurance that legitimate investments will be protected and that challenges can be addressed effectively. What role does the State House Investors Protection Unit play in strengthening Uganda’s investment climate?

The State House Investors Protection Unit, abbreviated as SHIPU, was established by His Excellency President Yoweri Kaguta Museveni, a general who is retired but never tired.

Before we turned it into a mandate, he gave us the task to ensure that coming to Uganda to add value, to create wealth in any way, including the local investors or domestic investors, should be given the best attention in terms of collaboratively coordinating with them. We need to ensure that investors are not delayed through unnecessary bureaucracies in public service, because public service systems can be too bureaucratic for no reason. Yet for investments, time matters. Time is money.

That’s why the President established this unit on the 1st of May, 2023, and entrusted me as the first leader on the 14th of May.

I know every corner of Uganda. But I’ve also been in Beijing, in Tokyo, in Washington, in New York; I attended the UN General Assembly three times, including the 2015 participation, when Uganda was chairing the UN General Assembly. So, I have had great exposure, both nationally and internationally. Thanks to that, I have the privilege of understanding how to strategize for economic development. When I’m protecting investments, I have a global picture in my head. I have travelled the world, and I know what makes investments thrive. It’s about ensuring that you don’t lose time, that you have coordination between agencies of government and they are in touch with the private sector. Because economies grow faster when they are private sector-led.

What are some of the most common challenges or grievances raised by investors when doing business in Uganda, and how does the Unit work to ensure that these issues are addressed and resolved efficiently?

I want to categorize, because they are not all the same. With foreign investors the challenge used to be coordination. So, they would come not knowing where to start from. They arrive in the country, they know that there is a Uganda Investment Authority (UIA), but they don’t know where to get the work permit, which is given by the Directorate of Citizenship and Immigration. So, there was a lack of coordinating government ministries, departments, and agencies.

The other challenge with foreign investors was the unnecessary delays in the public service system. To get a permanent secretary was a problem, and he or she is the accounting officer. If you wanted to invest in minerals, gold, oil, agro-processing, you could make the appointment and come, but getting the right authority was a problem. So, unnecessary bureaucracies and -again- the lack of coordination in the central office to coordinate government ministries.

And also, the common and well-known corruption in terms of fraudsters that would divert them through duplicating government websites. But this has been reduced by the efforts of NITA-U, because they are working on setting clear differences between a real government website or portal and the fabricated or the duplicated ones. Those were the three big challenges for foreign investors.

The challenges with the domestic investors in Uganda would be the high interest rates on commercial bank loans. These local investors would think that they would make the money in the shortest time possible. So, by the time the rest period ended, they had not even broken even, and their businesses would die. There was lack of sensitization to the local investors on going slow and understanding terms and conditions of getting commercial loans to start their investments.

The second challenge is that the local investors perceive that the Uganda Revenue Authority has high taxes, yet the tax regime is the same in the whole of East Africa. So again, they needed an office like ours, the State House Investors Protection Unit, to have conversations with the heads of those agencies, like the Commissioner General of Uganda Revenue Authority.

So, when there were perceived high commercial interest rates, we started mobilizing the bankers. We sit with the bankers, the regulator, the Central Bank, the Ministry of Finance, Planning and Economic Development, and the National Planning Authority; and we sit with these local investors, the SMEs, the traders, and the Uganda Chamber of Commerce and Industry. Everyone raises their issues and then the leaders of these agencies can interact with the investors directly. We have seen a lot of great success in doing this, because then they understand the processes better. We have helped to increase the collaboration between investors and government ministries, departments and agencies. But we have also helped in increasing sensitization, especially with the domestic investors, understanding how government works, how banks work, how you must understand terms and conditions before you sign for a loan, how long their business will take to break even before they sign for this big loan.

For the foreign investors, we have established an Electronic Investors Protection Portal (EIPP). We won an award at a continental level, the Africa Association of Public Administration and Management gave us a presidential award for addressing a challenge that has been hindering investments in the whole of Africa: the challenge of bureaucracies, of government agencies working in silos, each one being independent of the other so the investor has to move from office to office. This is a competition between 46 African countries and it evaluates IT innovations that help economies and administration to perform better. In the end, we were down to 16 countries, and Uganda took the special award on investment promotion. Everybody recognised that Uganda’s investment climate is completely welcoming. It’s better because of the online portal that interconnects all government agencies and can be accessed from any place in the world at any time.

Uganda has so far won about five awards from different countries. The Annual Investment Meeting (AIME) that takes place in Abu Dhabi, has been awarding Uganda the best investment destination on the African continent for three consecutive years. We are happy that we have added value by bringing in awards for addressing the challenges that were diverting investments on the African continent. 

What mechanisms are being used by SHIPU to protect investors from extortion?

This Electronic Investors Protection Portal is the key, because its main work is to ensure that every investor, before they fall in hands of wrong elements, go through due diligence.

The portal is hosted by NITA-U, the National Information Technology Authority. It is always monitoring, and it’s managed by us at State House Investors Protection Unit, so it has all credibility. It can’t be duplicated; it’s fully protected from hackers.

For me, it’s all about showing results. I don’t believe in just putting the efforts, I want results. And we see them. We are fighting corruption through leveraging technology. Ensuring that we eliminate the middlemen that were asking for bribes, soliciting for favors. But also, another way we are fighting corruption is to be physically available at our offices, so that whoever enters our office is served. We even have a 24/7 call center. So, we are both online and physically present to protect investors from being diverted.

Unfortunately, there are some corruption cases that we can’t prevent from happening. In those scenarios, we help the investors recover big part of what they had already lost. What we do is coordinate them with the anti-corruption agencies. When there is a need for investigation, we receive the complaint on the EIPP, and once it’s loaded there with evidence, we forward it to the anti-corruption agencies. But our main work is to give attention to every investor not to be defrauded, not to be diverted, not to be delayed.

Through collaboration, coordination, and determination, we vow to every investor, every value that is added to our country. We will protect with passion.

What types of international investors are attracted to Uganda?

We have actually attracted investors from nearly every country.  I was recently looking at our dashboard on the EIPP and found out, for example, that the Danish investors have invested so much, especially in agribusinesses led by agriculture, dairy and fish. They are over USD72 million.

We have many, many FDIs coming in. From Korea, Thailand, the United States, the United Kingdom, the Netherlands, China, India; we have also seen a number of Arab investors increasingly coming to Uganda from United Arab Emirates, from Saudi Arabia, from Qatar.

The Electronic Investors Protection Portal, when we assessed the worth of investments, it’s approximately USD172 million within our three years of operation. We see Uganda going higher and higher in receiving foreign direct investments.

Our good collaboration with the Uganda Tourism Board has made investments increase even more. Many tourists end up staying as investors. Originally, they come as tourists, and then they end up finding opportunities.