KAMPALA (Reuters) - Uganda forecast on Friday a 25 percent rise in foreign investment in the east African nation to $3 billion in 2009 despite the global economic crisis.
Uganda Investment Authority (UIA) chairman Patrick Bitature told reporters the rise on the $2.4 billion foreign direct investment (FDI) during 2008 would be largely in the mining, agro-processing, petroleum and services sectors.
“We believe that Uganda will not in the short-term be impacted as heavily as the developed economies,” he said.
“As the need for lower costs of operations becomes vital for companies to keep afloat, they will look for cheaper options, and we want to make Uganda a well-placed location for that.”
He noted, however, that the global crisis would hurt Uganda in terms of remittances and lower values for exports.
The government is expecting economic growth for 2008 to be 5-6 percent, instead of an initially forecast 8 percent.
“This growth rate, though lower, is still good considering the global financial state,” Bitature added.
Western donors have praised Uganda’s record on macroeconomic stability, with its average 6 percent annual economic growth in the past 20 years, relatively low inflation and stable currency.
UIA executive director Maggie Kigozi said the 2008 increase in FDI, from $2.2 billion in 2007, was due to investment in the energy, gas, telecommunications and manufacturing sectors.
She added that the major sources of investment in 2009 were expected to be India, China, Japan, Kenya and Sudan.
“We have investment projects in the pipeline that we will aggressively follow up from these countries,” she said.
“Investment is a process and some of the projects which will come on board this year are still undergoing feasibility studies. We are very positive about 2009.”