Uganda has fully recovered from the global financial crisis and although infrastructure deficits pose threats to its sustained growth, investors’ bullish expectations of the country will be driven by opportunities in its oil, financial services and agricultural sectors, said Maria Kiwanuka, Uganda’s minister of finance.

Ms Kiwanuka said that Uganda’s GDP grew by more than 5.8% last year and the decision by the ratings agency Fitch to give Uganda its best rating yet of B+ reveals the government’s disciplined approach to managing Uganda’s finances, and its efforts to plug its infrastructure deficit, enabling the country to grow.  

“What is driving renewed confidence is we have shown that we are resilient,” said Ms Kiwanuka. “Fitch’s rating speaks to the fact that Uganda has been very disciplined; we have not rushed out to borrow just because we can. We have so many offers from people wanting to cash in on our oil reserves, but we have been very cautious.”

Pointing to the World Bank’s decision in March 2013 to issue $150m worth of credit to finance the development of Uganda’s urban infrastructure and improve service delivery across 14 municipalities, Ms Kiwanuka said the government has embarked on an ambitious programme to double Uganda’s electricity capacity with two hydroelectric dams on Lake Victoria. In addition, the government’s efforts to roll out more than two kilometres of electricity transmission lines this year has created significant opportunities in the agricultural and financial services sectors.

“The financial services sector has been very robust and we have recorded a lot of growth from a small base,” said Ms Kiwanuka. “We have gone out and shown very clearly what our competitive advantages are, what our productive strong points are and [with respect to] agriculture we aim to become the breadbasket of east Africa as our geographical location in the middle of east Africa means we are land-linked.”

Despite the government’s efforts, infrastructure developments have been unable to keep up with the country’s growth, admitted Ms Kiwanuka. The African Development Bank expects that the country’s GDP will slow to 4.9% by the end of 2013 due to a host of bottlenecks ranging from insufficient road, rail and electrical infrastructure, to the lack of sufficiently qualified labour.

“The four biggest needs of a local or foreign investor are reliable power supply, [good] roads, water availability and a skilled work force,” said Ms Kiwanuka. “We have gaps in road maintenance and we have gaps when it comes to the modernisation of our railways and waterways. [And] we must not forget to keep our foreign exchange rates stable, to give investors the predictability that they want. Yet we are doing everything that is needed by the private sector for them to get on with their jobs of providing growth. Uganda is going to be a very good place to do business in coming years.”