On Thursday, we were delighted to host an overview of opportunities in Uganda with Her Excellency Kate Airey OBE, British High Commissioner to Uganda, Louis Arinaitwe, DBT Country Director for Uganda and Robert Mukiza, Director General of the Uganda Investment Authority.
It is important to look at Uganda within a broader historical context and how far it has come. From 1986 onwards Uganda has been a real development success, with strong economic growth leading to a doubling GDP per capita. The proportion of the population living in poverty in Uganda fell by third during that time, demonstrating stable macroeconomics. A broadly supportive environment for investment has provided growth for the private sector and enabled Uganda to stay resilient in the face of many shocks through quite a significant amount of regional instability, with economic growth being forecast consistently up until the pandemic at 6%.
2020 saw this economy hit quite hard and we saw GDP growth falling considerably. But we have also seen a response from the pandemic, and while economic growth perhaps hasn't returned to its pre-COVID potential, the projection of growth this year is 5.3% revised slightly down because of the impact of the war in Ukraine.
Inflation remains high, reaching 10.6% in November, which has required the Bank of Uganda to retain elevated interest rates, which has had a knock on effect on borrowing. But what we have actually seen is very responsible, commendable behaviour from both the Bank of Uganda and broader fiscal policy to ensure that containing inflation is actually dealt with in a proportional way. Debt remains sustainable and the government is making strides to ensure revenues are rising, to ensure that making interest payments on that debt is affordable within the national budget.
Uganda is of a similar geographical size to the UK and it is the third fastest growing population in Africa. This presents challenges with regard to jobs, and the need for job creation here is absolutely critical. It has some of the lowest costs of labour in the East African Community, while also having the highest literacy levels in East Africa. There is a huge potential for investment in education services, where the system is modelled on the UK.
Uganda is the second most biodiverse country in Africa. This provides a great platform for green investment and carbon offset potential. It is one of the few countries across the globe with very large arable land. Over 70% of the land in Uganda is arable, and with two rainy seasons there is already a vibrant organic agriculture industry - but a need to develop irrigation, post harvest handling and value-adding operations - as well as capacity building to ensure the produce meets UK and European standards. The UK government has worked with Government of Uganda and some UK companies to provide investment on the large scale solar clean energy and water pump systems that will support a lot of small to medium scale farmers across the country, and the British High Commission continues to work very closely with government of Uganda's Minister of Finance, Agriculture and Uganda Investment Authority to support British investment and business success.
This all builds a favourable picture for the longer-term context and potential for UK plc across a whole range of sectors, including green investment, agriculture, education and skills development, as well as of course infrastructure - which is very much a priority for President Museveni and it's one that the British Government are very keen to support Uganda on and that it gets right. There have been a number of successful UKEF deals in the market, with around £550 million capacity still available.
We look forward to continuing our engagement with the Uganda Investment Authority as well as the British High Commission and UKEF to present details on specific opportunities in this market.
Alexandra Barnes, Director of Infrastructure and Climate Resilience - firstname.lastname@example.org