Uganda’s Foreign Direct Investment(FDI) Surpasses Kenya, Tanzania After An Improved Business Structure
Uganda has emerged as the East Africa Community’s top foreign direct investment (FDI) destination.
According to the United Nations Trade and Development (UNCTAD) 2024 World Investment Report, foreign investments in Uganda are expected to total Ksh370 billion in 2023.
Kenya, on the other hand, only received approximately Ksh193 billion in investments.
The UN noted that Uganda was one of the most appealing countries for investors due to the ease of starting a business.
Uganda was reported to be one of the few countries to have adopted the digital single window model, which makes it simple for businesses to register, obtain clearances, and pay taxes.
Kenya, on the other hand, has similar technology, but it does not cover county governments, where investors must also apply for licenses before opening a shop.
“Although some applications can be completed online, the lack of integration among systems adds significant barriers for investors and entrepreneurs. There is a pressing need for enhanced facilitation to elevate investment levels sufficiently to address interconnected economic, health, security and climate challenges.
Foreign direct investment inflows to Africa declined by 3% to $53 billion, according to the World Investment Report.@UNCTAD calls for international organizations to increase international project finance to structurally weak & vulnerable economies. https://t.co/HsJq5DC9sc pic.twitter.com/GkX0cOIJ3U
— UN Trade and Development (@UNCTAD) June 21, 2024
“The Kenya Investment Authority (Keninvest) offers one-stop, in-person services such as assistance with foreign taxpayer registration, electrical grid connection and work permits. However, its services do not extend to crucial permits and licences at the county, sectoral or environmental levels,” read the statement in part.
Outflows.
Kenya, on the other hand, suffered the greatest loss of investments when compared to Uganda.
For example, Kenya is expected to lose Ksh71 billion (USD 558,000,000) in foreign investment by 2023.
Uganda, on the other hand, had only Ksh51 million (USD 400,000) in investments taken to other countries.
“The Kenya Investment Single Window project, being developed by UNCTAD, aims to tackle these issues. It will introduce an online system to streamline the investment process in the country and enhance the Government’s capacity to attract and monitor investments effectively.
The system will connect with existing government databases such as the eCitizen portal, the Kenya Revenue Authority’s iTax system and county government portals. This integration will enhance the functionality of existing platforms, making it easier for businesses to navigate the regulatory environment,” read the report in part.
Uganda’s Foreign Direct Investment(FDI) Surpasses Kenya, Tanzania After An Improved Business Structure
