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LEATHER VALUE CHAIN INVESTMENT PROFILE
UGANDA
UGANDA
2018
LEATHER VALUE CHAININVESTMENT PROFILE
UGANDA
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FOREWORD
Information is arguably the most powerful tool available to individuals, companies and even countries to achieve their aspirations. However, on its own, information may not achieve much, unless it is used appropriately, which in turn can only be used appropriately, if packaged properly.
It is indeed my honour, on behalf of Uganda Investment Authority (UIA), to endorse this well packaged profile on Uganda’s Leather Sector. The information in the profile
has been put together by SITA International Trade Centre with whom UIA has forged a very fruitful relationship in the area of building the capacity of Ugandan companies; especially SMEs
and Women owned companies, to increase their productivity and competitiveness in trade with India.
UIA is Uganda’s investment promotion agency and works under the Ministry of Finance, Planning and Economic Development to provide investment information and facilitate investors to set up their businesses. UIA also provides aftercare services to ensure sustained investment growth.
Investment opportunities in Uganda are vast; ranging from value addition of natural resources, services to hi-technology. The main opportunities are in mineral beneficiation, manufacturing, tourism, ICT and agro processing, as well the nascent oil and gas sector. The other areas are detailed in this profile. Agro processing in Uganda is considered to be a major driver of economic growth because if its viability and ability to create jobs for the majorly young population. The National Development Plan II identifies leather as one of the sectors that can play a major role to achieving the goals of job creation, income generation and alleviation of poverty by 2040.
Uganda is among the highest exporters of hides and skins in Africa. Approximately 95% of processed hides and skins are being exported as semi-processed leather (wet blue). One the flip side, the country imports more than half of its processed leather needs. There is therefore profitable investment potential in the huge demand gap. For instance, footwear from Uganda can be exported at zero duty into the EAC market. Uganda is also eligible for the USA’s African Growth and Opportunity Act (AGOA), European Union’s Everything but Arms (EBA) and provides access to the Tripartite Free Trade Area of EAC, COMESA and SADC, where it is signatory.
Setting up business in Uganda has been made easy through UIA, which is a One Stop Centre for investors, both physically and online through the eBiz portal www.ebiz.go.ug.
Information is a powerful tool that informs investment decisions. It is my pleasure to now invite you to read this profile on Uganda’s leather sector. Your investment is truly our Business.
Basil Ajer
AG EXECUTIVE DIRECTOR
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ACKNOWLEDGEMENTS
This profile has been produced under the framework of the Supporting Indian Trade and Investment for Africa ( SITA ) project, funded by the Department for International Development, Government of the United Kingdom, and implemented by International Trade Centre. SITA is a South-South trade and investment project aimed at improving the competitiveness of select value chains and increasing investment in five East African countries through partnerships with institutions and businesses from India.
Special contributions to writing this report have been provided by:
Quality Assurance: International Trade Centre ( ITC ), Supporting Indian Trade and Investment for Africa ( SITA ) – T.C.A. Ranganathan,
External Consultant; Jarmila Sarda, Investment Expert ( SITA );Authors: Aristide Djimgou Tchakounte, Nicholas Mudungwe
Layout: Jesús Alés
Editor: Vanessa Finaughty
The views expressed in this report are those of the authors and do not represent the official position of International Trade Centre, Tanzania Investment Centre or the Government of the United Kingdom. The images used in this profile may not always accurately reflect the country context.
© International Trade Centre 2018
ITC encourages reprints and translations for wider dissemination. Short extracts may be freely reproduced, with due acknowledgement, using the suggestion citation. For more extensive reprints or translations, please contact ITC, using the online permission request form: http://www.intracen.org/Reproduction-Permission-Request/
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Table of Contents
WHY UGANDA? 10
geographical overview 10
Political overview 11
Economic and financial overview 12
GLOBAL AND REGIONAL IMPORTANCE OF LEATHER 18
Overview 20
UGANDAN LEATHER INDUSTRY 20
Ugandan leather value chain: Overview and investment opportunities 24
Animal husbandry 24
Slaughter slabs, slaughterhouses and abattoirs 24
Tanning 26
Leather footwear manufacturing 27
Leather goods manufacturing 28
Trade 30
TRADE AND INVESTMENT CLIMATE 30
Taxation 32
Investment incentives 34
Fiscal and financial incentives 34
Export incentives 35
Security of investment 36
Visas and work permits 37
Registration procedures for companies 38
Industrial utilities 39
Electricity 39
Water 39
Labour and wage rates 40
Land availability 40
Land acquisition by foreigners 41
1. Application 42
2. Land allocation procedure 43
3. Terms and conditions of land allocation 43
4. Important notes 44
USEFUL CONTACTS 45
selected support agencies 45
Some leather goods (shoes) manufacturers 47
Financial institutions 47
Selected licences in Ugandan trade and manufacturing sector 50
REFERENCES 52
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List of Tables
TABLE 1: ANNUALIZED AVERAGE INTEREST RATES, 2012–2016 16
TABLE 2: ESTIMATED ANNUAL LOSSES OF UGANDAN LEATHER VALUE CHAIN 20
TABLE 3: RELATIONSHIP BETWEEN THE LEATHER VALUE CHAIN STRATEGY AND NATIONAL INDUSTRIAL POLICY 21
TABLE 4: RELATIONSHIP BETWEEN THE LEATHER VALUE CHAIN STRATEGY AND EXPORT STRATEGY 21
TABLE 5: LOSS ESTIMATION OF SLAUGHTER DEFECTS ON H&S IN THE REPUBLIC OF UGANDA 25
TABLE 6: SELECTED TANNERY CAPACITIES IN 2018 26
TABLE 7: INDIVIDUAL INCOME TAX FOR RESIDENTS (MONTHLY PAYE TAX RATES) 33
TABLE 8: INDIVIDUAL INCOME TAX FOR NON-RESIDENTS (MONTHLY PAYE TAX RATES) 33
TABLE 9: BUSINESS TAXES 33
TABLE 10: SELECTED TAX INCENTIVES AND EXEMPTIONS AVAILABLE TO INVESTORS IN THE REPUBLIC OF UGANDA 34
TABLE 11: OTHER TAX INCENTIVES 35
TABLE 12: EXPORT INCENTIVES 35
TABLE 13: SELECTED INCENTIVES FOR FREE ZONE INVESTORS 36
TABLE 14: SELECTED WORK PERMIT CLASSES AND THEIR RESPECTIVE REQUIREMENTS 37
TABLE 15: VISA AND WORK PERMIT FEES 37
TABLE 16: REGISTERING A NEW COMPANY IN THE REPUBLIC OF UGANDA 38
TABLE 17: ANNUAL AVERAGE WEIGHTED LARGE INDUSTRIAL TARIFFS (UGX*/KWH), 2012–2015 39
TABLE 18: NWSC TARIFF STRUCTURE 40
TABLE 19: LAND TENURE SYSTEM IN THE REPUBLIC OF UGANDA 40
INSTITUTION 45
CONTACT 45
ISSUING AUTHORITY 50
LICENCES 50
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List of Figures
FIGURE 1: KEY MACROECONOMIC ASSUMPTIONS 12
FIGURE 2: TOTAL VALUE OF PRODUCTS EXPORTED BY THE REPUBLIC OF UGANDA (2002–2017) 13
FIGURE 3: MAIN IMPORTERS OF UGANDAN PRODUCTS IN 2017 13
FIGURE 4: DISTRIBUTION OF IMPORTING MARKETS FOR UGANDAN EXPORTS 14
FIGURE 5: TOTAL VALUE OF PRODUCTS IMPORTED BY THE REPUBLIC OF UGANDA (2002–2017) 15
FIGURE 6: MAIN SUPPLYING MARKETS FOR PRODUCTS IMPORTED BY THE REPUBLIC OF UGANDA IN 2017 15
FIGURE 7: DISTRIBUTION OF SUPPLYING MARKETS FOR PRODUCTS IMPORTED BY THE REPUBLIC OF UGANDA IN 2017 16
FIGURE 8: FDI INFLOW, THE REPUBLIC OF UGANDA (2002–2017) 17
FIGURE 9: STATUS OF FDI INFLOWS IN THE EAST AFRICAN COMMUNITY (EAC) (2018) 17
FIGURE 10: LEATHER VALUE CHAIN 18
FIGURE 11: PRODUCTION TREND OF HIDES AND SKINS IN AFRICA (2003–2014) 19
FIGURE 12: UGANDAN LEATHER EXPORTS (2010–2017) 22
FIGURE 14: IMPORTING MARKETS FOR UGANDAN RAW HIDES AND SKINS (OTHER THAN FURSKINS) AND LEATHER (2002–2017) 23
FIGURE 13: MAJOR AFRICAN EXPORTERS OF HIDES AND SKINS AND LEATHER (HS 41) 23
FIGURE 15: LIVESTOCK NUMBERS IN THE REPUBLIC OF UGANDA (2014–2016) 24
FIGURE 16: UGANDAN VALUE CHAIN MAP 25
FIGURE 17: SUPPLYING MARKETS FOR LEATHER FOOTWEAR (HS 6403) IMPORTED BY THE REPUBLIC OF UGANDA 27
FIGURE 18: SUPPLYING MARKETS FOR LEATHER ARTICLES (HS 42) IMPORTED BY THE REPUBLIC OF UGANDA 28
FIGURE 19: TRIPARTITE FREE TRADE AREA MAP 31
FIGURE 20: UGANDAN MULTILATERAL TRADE AGREEMENTS 32
FIGURE 21: INVESTMENT REGISTRATION AND FACILITATION FLOWCHART 39
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Abbreviations & Acronyms
BUBU Buy Uganda Build Uganda
CIBO Compendium of Investment and
Business Opportunities
COMESA Common Market for Eastern
and Southern Africa
EAC East African Community
FDI Foreign direct investment
GDP Gross domestic product
H&S Hides and skins
LVCS Leather Value Chain Strategy
PAYE Pay-as-you-earn
UBOS Uganda Bureau of Statistics
UFZA Uganda Free Zones Authority
UIA Uganda Investment Authority
URA Ugandan Revenue Authority
URSB Uganda Registration Services Bureau
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GEOGRAPHICAL OVERVIEW
Known as the Pearl of Africa, the Republic of Uganda is located in the heart of East Africa. It is bordered by the Republic of South Sudan in the north, the Republic of Kenya in the east, the Democratic Republic of the Congo in the west, the United Republic of Tanzania in the south, and the Republic of Rwanda and the Republic of Burundi in the south-west. The Republic of Uganda’s position is advantageous to trade and investment due to its direct access to a regional market of 170 million potential customers (EAC Secretariat 2016 statistics).
The land-linked country has rich soils, favourable temperatures, plentiful rainfall and many lakes and rivers. The Republic of Uganda enjoys ample natural resources, with several organically grown crops and significant deposits of more than 50 types of minerals, as well as recently found oil. Its diverse landscape encompasses the snow-capped Rwenzori Mountains and immense Lake Victoria. The Republic of Uganda shares Lake Victoria with the Republic of Kenya and the United Republic of Tanzania and Lakes Albert and Edward with the Democratic Republic of the Congo (DRC). It comprises a territory of 241,550.7 km2, of which 41,027.4 km2 are open water and swamps while 200,523.2 km2 are land (71.2% of the territory consists of agricultural land and 14.5% of forests).
The temperatures vary greatly across the whole country (between 16°C and 31°C), depending on elevation and landscape.
Why Uganda?Key facts
Capital: Kampala
Area: 241 550.7 km2
Population: 37 673 800 (2017)
0–14 years: 46.7% (2017)
15–64 years: 50.8% (2017)
Active population: 19 103 900 (2017)
Population growth: 3.2% (2017)
Literacy rate: 72.2% (2014)
Youth literacy rate (15–24 years): 83.6% (2012)
Urban population: 16.8% (2017)
GDP (nominal): $25.89 billion (2017)
GDP growth: 3.96% (2017)
GDP per capita (nominal): $604.04 (2017)
FDI inflow: $541 million (2016)
Exports: $2 901 million (2017)
Imports: $5 595 million (2017)
Exchange rate (per USD): UGX 3 764 (25.10.2018)
Govt. expenditure: $4.86 billion (2016)
Govt. revenue: $3.7 billion (2016)
Foreign reserve: $3.034 billion (31 December 2016)
Inflation rate: 5.5% (2016)
Currency: Ugandan shilling (UGX)
Other major cities: Gulu, Lira, Jinja, Mbarara, Mbale
Language:English (official language), Luganda (major)
Religion:Christian 84.4%, Muslim 13.7%, other 1.6%, none 0.2% (2014 est.)
Sources: AfDB Statistical Yearbook, 2018; International Trade Centre, 2018; World Bank, 2018; CIA World Factbook, 2017.
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POLITICAL OVERVIEW
The Republic of Uganda is a presidential republic where the president is both head of state and of government. Executive power is exercised by the government. Legislative power is vested in both the government and the National Assembly. The system is based on a democratic parliamentary system with universal suffrage for all citizens over 18 years of age.
Within its boundaries, the Republic of Uganda has multiple ethnic groups with a wide range of political systems and cultures. This made the establishment of a functioning political community difficult after independence was achieved in 1962. However, the government (in power since 1986) has been credited with restoring stability and economic prosperity to the country.
The Republic of Uganda held both its latest presidential and parliamentary elections in February 2016, with the incumbent Yoweri Museveni winning his 5th elected term in office. Museveni‘s National Resistance Movement (NRM) party also retained its majority in Parliament. This is likely to ensure policy continuity and support the passage of investor-friendly regulations in the short-term.
In 2017, the Republic of Uganda had an estimated population of 37,673,800, which is one of the youngest and most rapidly growing populations in the world: 48% of Ugandans are younger than 14 years old and the fertility rate is among the world’s highest at 5.8 children per woman, which leads to a population growth of 3.2% per year. Youth literacy rate is comparatively high at 83.6% (estimate from 2012). Currently, the ever-growing and English-speaking labour force comprises 19.4 million people.
Large parts of the population are concentrated in central and southern Uganda, particularly around Lake Victoria and Lake Albert. The urban population is relatively small at 16.8%, as many Ugandans live in the countryside. The Republic of Uganda, with its strategic location, abundant English-speaking labour force, open markets and plentiful resources, offers investors numerous opportunities.
� Strategic location
� Peace and political stability
� Economic stability
� Consistent implementation of liberal policies
� Important growth in GDP performance
� Inflation stability
� Specific policies in place to improve macroeconomic performance and investment flow
� Investment incentives and guarantees
� Liberal foreign exchange regime
� Rapid growth in domestic lending
� Improvements in global competitiveness
� Transformation into a middle-income country
� Access to markets through membership of bilateral and multilateral trade agreements
� Competitive operations costs
� Vast availability of labour force
� Exceptionally rich array of natural resources and wildlife
� World-renowned tourist attractions
THE REPUBLIC OF UGANDA
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ECONOMIC AND FINANCIAL OVERVIEW
Since 1987, the Ugandan Government has been implementing reforms in an effort to achieve economic growth and development. The Republic of Uganda has been engaged in economic liberalization and privatization of public enterprises, recognizing that private sector participation is vital in the development process. These reforms were consolidated into a development framework called the Poverty Eradication Action Plan (PEAP).
In the late 1980s, the Republic of Uganda was one of the 1st Sub-Saharan African countries to get on board with liberalization and pro-market policies. As a result, real gross domestic product (GDP) growth was approximately 7% per year in the 1990s and 2000s. From 2006 onwards, GDP growth declined to an average of 5%. This decline was mainly driven by the Government of Uganda’s large investments in infrastructure.
In 2017, GDP growth was recorded at 3.96% (4% real GDP growth), falling from 9.3% in 2011. The slowdown in economic growth was attributed
to productivity losses in the agriculture sector (resulting from, among others, lack of market access, agricultural financing, weather vagaries and associated climatic changes) and the manufacturing sector (due to low market base, inadequate infrastructure, low human resource and low financial markets development, etc.). However, the real GDP growth is expected to average 6.3% in the medium term, supported by an increase in private investment, improvement in public investment management and efficient monetary policy. See Figure 1 for more details.
The Republic of Uganda continues to benefit from a monetary and fiscal policy stance concentrated on containing the pressures of inflation, while safeguarding exchange rate and debt stability, thereby offering an enabling macroeconomic environment for growth.
After reaching nearly 7% in the fiscal year 2015/16, the inflation rate decreased to 5.7% and 5.1%, for the headline inflation and the core inflation respectively, in the fiscal year 2016/17. In the medium-term, both variables are expected to stabilize at approximately 5%. See Figure 1.
Figure 1: Key macroeconomic assumptions
*Projected Source: Ugandan Ministry of Finance, Planning and Economic Development (MoFPED), December 2017.
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The country trade regime is liberalized, except for a few import-licensing controls based on environmental, health and security concerns. As a result of this liberal trade policy, the country’s total value of products exported increased sixfold
in the last 15 years to reach $2.9 billion in 2017 as captured in Figure 2. As of 2017, the main importers of Ugandan products were all from the Global South. See Figure 3 and Figure 4 for details.
Figure 2: Total value of products exported by the Republic of Uganda (2002–2017)
Figure 3: Main importers of Ugandan products in 2017
Source: Trade Map (ITC), 2018.
Source: Trade Map (ITC), 2018.
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Figure 4: Distribution of importing markets for Ugandan exports
Source: Trade Map (ITC), 2018.
The Republic of Uganda’s growing involvement in international trade is also reflected in its imports. The country’s total value of products imported has also
increased sixfold within the last 15 years. In 2017, overall Ugandan product imports amounted
to $5.59 billion (as seen in Figure 5). For its imports, the Republic of Uganda’s main
markets are also in the Global South. The two main supplying markets of Ugandan imports are the People’s Republic of China with imports worth $985 million and the Republic of India with $736 million, followed by the United Arab Emirates, the Republic of Kenya and Japan (see Figure 6 and Figure 7).
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Figure 5: Total value of products imported by the Republic of Uganda (2002–2017)
Figure 6: Main supplying markets for products imported by the Republic of Uganda in 2017
Source: Trade Map (ITC), 2018.
Source: Trade Map (ITC), 2018.
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The Republic of Uganda’s banking and financial sectors are growing in size and sophistication. In 2017, the country had a total of 25 commercial banks, ranging from national, intraregional and international banks, of which 84% were foreign-owned, and more than 300 non-bank financial institutions. The Bank of Uganda (BoU) is one of the most respected central banks in Sub-Saharan Africa, as it has been successful in its pursuit of open markets, a stable currency and a relatively low inflation rate. The sector is well capitalized, with all banks meeting the minimum requirements of $25 million. Domestic lending has been on an upward trend in the Republic of Uganda, contributing immensely to economic performance. An overview of the different interest rates for the period of 2012 to 2016 can be found in Table 1.
Figure 7: Distribution of supplying markets for products imported by the Republic of Uganda in 2017
Source: Trade Map (ITC), 2018.
Table 1: Annualized average interest rates, 2012–2016
2012 2013 2014 2015 2016
Rediscount rate 22.0 14.8 14.2 17.4 18.9
Bank rate to commercial banks
23.0 15.8 15.2 18.4 19.9
Central Bank Rate (CBR) 18.0 11.7 11.2 14.0 14.9
Treasury Bills (monthly average discount factor)
91 days 14.2 9.4 9.6 14.4 14.4
182 days 15.4 11.5 11.2 15.6 15.1
364 days 14.7 11.6 11.3 15.6 14.9
Commercial banks (weighted average)
a) Ugandan shillings
Deposit rates (WARD) 3.3 2.9 3.1 3.2 4.2
Demand deposits 1.5 1.7 1.8 1.5 2.0
Savings deposits 3.2 2.9 2.7 3.3 3.5
Time deposits (7–12 months)
16.8 12.1 10.8 12.8 13.2
Lending rates 26.2 23.2 21.6 22.6 23.9
b) Foreign currency
Deposit rates (WARD) 1.2 1.4 1.4 1.3 1.3
Demand deposits 1.0 1.0 1.0 1.0 1.0
Savings deposits 1.6 1.7 1.6 1.5 1.6
Time fixed deposits 4.2 4.7 4.0 4.0 3.9
Lending rates 9.5 9.8 9.5 9.2 9.6
Interbank rates
Overnight 15.6 7.7 8.8 11.5 11.7
7 days 19.1 11.5 11.1 15.1 15.4
Overall 16.7 8.7 9.2 12.4 12.4Source: Bank of Uganda, cited in Uganda Bureau of Statistics, 2017.
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Robust economic growth and an increasing youth population have catalysed foreign direct investment (FDI) inflow in the last few years and the Republic of Uganda is among the top 10 FDI recipients in Africa. Between 2012 and 2014, FDI inflow in the Republic of Uganda was consistently more than the $1 billion mark (mainly due to the newly confirmed vast mineral resources and commercial findings of oil) before dropping to approximately
$700 million in 2017 (see Figure 8). The Republic of Uganda, however, remains a major investment location within the East African countries, as seen in Figure 9. The main areas of foreign investment are in manufacturing, telecommunications, financial services and real estate, agriculture, forestry and fish. Other areas of significant investment were in power, oil, construction and mining.
Figure 8: FDI inflow, the Republic of Uganda (2002–2017)
Figure 9: Status of FDI inflows in the East African Community (EAC) (2018)
Source: World Bank, 2018.
Source: United Nations Conference on Trade and Development (UNCTAD), 2018.
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The leather industry value chain comprises four broad stages (see Figure 10). During the 1st stage, raw hides and skins (H&S) are obtained. In the 2nd stage, raw H&S are converted to semi-processed (pickled and tanned). The 3rd stage produces fully processed (finished) leather. In the 4th stage, leather products are manufactured, for example, footwear, garments, accessories such as watch straps, handbags and notepad covers, and automotive or furniture upholstery.
Leather is one of the most widely traded commodities in the world. The leather industry plays a major role in the global economy, with an estimated global trade value of approximately $100 billion per year, which is greater than the combined value chain of meat, sugar, coffee and tea. The leather industry has grown at a different pace in different parts of the world, depending on the general economic development of the country, geography and local government commitment.
Global and regional importance of leather
Figure 10: Leather value chain
Source: Author’s Illustration based on World Bank, Economic Transformations Group, 2015.
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Looking at Figure 11, it is clear that the African leather industry has a potential supply of hides and skins that can make a transformative contribution to the continent’s economic and industrial development. The quality of hides and skins is, however, the primary restriction on the development of the African leather supply chain as a whole. Lower quality arises from poor husbandry practices, improper processing or both. Diversity of origin, non-uniformity of preservation methods, different water quality and climatic conditions, unavailability of standard chemicals and lack of modern technology throughout the leather value chain are further constraints to the development of the leather industry in Africa. With the appropriate amount of investment and the right institutional environment, the African leather industry’s potential can be fully attained.
The production of hides and skins can be considered mainly a by-product of the meat industry. The 2nd and 3rd stages are the most capital intensive, while the 4th stage can be viewed as the most labour intensive. This differentiation has an impact on how related activities tend to spread globally. The spread in the availability of animals, capital, cheap labour and different rules and regulations leads to an overall trade picture. In general, developing countries benefit from cheap access to raw materials and lower labour cost, and are able to produce leather at lower cost than developed countries.
The leather industry is a key strategic sector for the socioeconomic and industrial development of many African countries. It has a rich and renewable natural resource base in Africa’s large population of cattle, sheep and goats, which accounts for nearly 20% of world share. The production of cattle hides, sheepskins and goatskins from African countries between 2003 and 2014 is presented in Figure 11. Overall, the figures reveal considerable production growth in tens of thousands of pieces of cattle hides, sheepskins and goatskins.
Figure 11: Production trend of hides and skins in Africa (2003–2014)
Source: Food and Agriculture Organization (FAO), 2018.
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1. Facilitate the production of quality value-added leather and leather products for local and export markets;
2. Facilitate resource mobilization and policy support for leather value chain growth;
3. Promote cleaner and environmentally sustainable production techniques and systems; and
4. Facilitate horizontal and vertical collaboration of chain players and other relevant stakeholders.
OVERVIEW
Approximately 21% and 11% of the African and the world livestock herd respectively comes from the Common Market for Eastern and Southern Africa (COMESA) region. Yet, the region contributes to less than 3% of the global production of leather and leather products. The estimated loss resulting from this situation is valued at $4.5 billion annually, since the region mostly exports hides and skins instead of finished leather products.
For the Republic of Uganda specifically, more than 40% of the H&S produced in the country was exported in raw form between 2008 and 2012 (during this period, the country produced on average 1.6 million hides and 4.7 million skins annually). The estimated loss in terms of forgone revenue (taxes, foreign currency earnings and jobs, etc.) and other indirect benefits resulting from the lack of value addition was estimated at $271.2 million per year as seen in Table 2.
Ugandan leather industry
Table 2: Estimated Annual Losses of Ugandan Leather Value Chain
Stage of processing
Potential earnings (USD)
Current earnings (USD)
Estimated loss (USD)
Value-added factor
Raw hides and skins
22 829 111 1
Wet blue 45 658 222 41 530 085 4 128 137 2 times
Crust 68 487 333 684 873 67 802 460 3 times
Finished leather
79 901 889 799 019 79 102 870 4 times
Finished product
273 949 332 2 739 493 271 209 839 12 times
Cumulative loss
271 209 839
Source: COMESA/Leather and Leather Products Institute (LLPI), 2015.
As seen in Table 2, the multiplier effect of processing H&S in the Republic of Uganda is three to four times more profitable and, in finished products, it is 12 times more profitable. In recognition of this potential, the Ugandan Government developed the Leather Value Chain Strategy (LVCS) with the following objectives:
The LVCS was then evaluated to identify areas of common interface with the national industrial and trade polices (export strategy). These policies are part of the Republic of Uganda’s development agenda, Vision 2040 (“A transformed Ugandan society from a peasant to a modern and prosperous country within 30 years”), to promote, among others, the livestock and livestock products sector. The results of this evaluation can be found in Table 3 and Table 4.
Furthermore, the Uganda National Leather and Leather Products Policy (NLLPP) of 2015 identified leather and leather products as having a big role to play in achieving the goals of job creation, income generation and alleviation of poverty set by Vision 2040.
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Table 3: Relationship between the Leather Value Chain Strategy and National Industrial Policy
LVCS objectives
1 2 3 4
Create a business-friendly environment for private sector-led industrialization in which industries will develop, improve productivity and the quality of products through, inter alia, creativity and innovation, and become more competitive in the global economy.
x x
Improve infrastructure development for effective and efficient industrialization programme.
Encourage and foster innovation, entrepreneurship, adjustment and adoption of best management practices in the quest for improved competitiveness.
x
Create a framework that supports joint participation of the public and private sectors in the development of scientific and technological competencies for the production of more and higher value-added goods and services for domestic consumption and export.
x
Facilitate improved supply chain efficiency, and market-responsive product and brand development. x
Encourage foreign direct investment in industry and industry related services. x
Promote environmentally sustainable industrial development to reinforce national goals of long-term growth and development.
x
Support the growth and development of a skilled and productive labour force and ensure that a body of experienced entrepreneurs and trained managers are particularly focused on industrial development.
x x
Promote safe workplace practices in all industry subsectors. x
Promote the participation of disadvantaged sections of society in industrial development activities. x
Create support systems for sustainable micro and small industries development. x
Source: COMESA/LLPI, 2015.
Table 4: Relationship between the Leather Value Chain Strategy and export strategy
Vision 2040 objectives
LVCS objectives
1 2 3 4
Development of domestic and international trade x
Creating opportunities for equal participation in trade through entrepreneurial development, giving priority to the socially and economically disadvantaged groups in society.
x
Provision of an enabling environment with a view to developing and nurturing a private sector that is capable of competing at global level.
x
Targeted government interventions in specific sectors, if and as deemed necessary. x x
Pursuit of bilateral, regional and multilateral trade initiatives. x
Mitigating any adverse effects of practices by the country’s trading partners by invoking and implementing trade defence measures as and when appropriate, considering multilateral disciplines in the area.
x
Efficiency, and prudent resource mobilization and usage. x
A coordinated approach to formulation and implementation of trade policy. x
Placing greater emphasis on policy coherence, synergies and complementarities. x
Nurturing and using a public-private partnership approach in the formulation, implementation and monitoring of the National Trade Policy.
x
Strengthen capacity to engage in and advocate for the Republic of Uganda’s interests in and during trade negotiations through improved organizational coordination and leadership, including at preparatory stage.
x
Be mindful of the negative social and economic effects that might come with trade growth, and ensure that mitigating measures and policies are put in place.
x
Supporting the country’s vision to industrialize by complementing the industrialization policy. x
Source: COMESA/LLPI, 2015.
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It is believed that the implementation of BUBU is crucial for the country to attain middle-income status. It will enhance local product competitiveness, boost the growth of micro, small and medium-sized enterprises (MSMEs), which form the biggest percentage of the private sector (90%), and consequently contribute enormously to the country’s employment.
Semi-processed leather is by far the most important leather product exported by the Republic of Uganda, comprising $53.12 million in 2017 (most of which was in the form of wet blue). The export of leather articles and leather footwear during the same year was comparatively small, at roughly $418,000 and $511,000 respectively, as seen in Figure 12.
Through the Ministry of Trade, Industry and Cooperatives, the Government of Uganda also formulated the Buy Uganda Build Uganda (BUBU) policy, which was approved by Cabinet in October 2014. The policy aims to promote the consumption of locally produced goods and services and increase the consumption of local products through public procurement and encouraging the private sector to consume locally originating products, thus increasing the participation of the locally established firms in domestic trade. The policy’s implementation strategy was finalized in June 2016 to chart a way to achieve the BUBU policy objectives. It spells out five broad strategic objectives, namely:
� To take stock of the local producers and improve their capacity to supply
� Enhance the quality and competitiveness of local products and services
� Increase efficiency and participation of local producers in public sector procurement
� Increase the visibility of local products in local outlets
� Increase awareness about the BUBU policy
Figure 12: Ugandan leather exports (2010–2017)
Source: Trade Map (ITC), 2018.
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Jointly, those product categories add up to 96% of all exports of Ugandan H&S, with the former making up 60% and the latter 36%. Leather articles exported by the Republic of Uganda belong to either one of two categories: 80% are trunks, suitcases and vanity cases, etc.; 20% are articles of apparel and clothing accessories of leather or composition leather. Footwear products exported by the country are sports footwear and footwear partially or fully made of leather.
As of 2017, the main importing markets for Ugandan raw hides and skins are, in order of importance, the Republic of Italy, the People’s Republic of China, the Swiss Confederation and the Republic of India, as seen in Figure 14.
The Republic of Uganda is one of the stronger exporters in Africa. In 2017, it ranked 4th for the export of H&S behind the Federal Democratic Republic of Ethiopia (3rd), the Arab Republic of Egypt (2nd) and the Republic of South Africa (1st) (see Figure 13). For the export of leather articles, the Republic of Uganda was in 13th place behind the Republic of Côte d’Ivoire (12th) and the Republic of Ghana (11th), while for footwear it ranked 11th in Africa.
The majority of the Republic of Uganda’s H&S exports are tanned or crust H&S of bovine or equine animals, followed by tanned or crust H&S of goats, pigs, reptiles and other animals.
Figure 13: Major African exporters of hides and skins and leather (HS 41)
Figure 14: Importing markets for Ugandan raw hides and skins (other than furskins) and leather (2002–2017)
Source: Trade Map (ITC), 2018.
Source: Trade Map (ITC), 2018.
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SLAUGHTER SLABS, SLAUGHTERHOUSES AND ABATTOIRS
Poor animal welfare is not just unethical, it is also bad for business – it leads to poor-quality leather, which leads to poor profit. The availability of modern and well-functioning slaughterhouses is one of the main determinants of the quality of leather goods. With its large livestock base and its growing meat production (from 175,049 MT in 2009 to 197,019 in 2013), the Republic of Uganda certainly has the potential to develop. In the Ugandan leather value chain, H&S become important at the point of slaughter (see Figure 16). They are usually sold to the owner of the slaughterhouse, who then sells it to a trader, or they are sold directly to H&S traders. Tanneries advance money to H&S traders as a mechanism of securing supplies in advance. This practice has amplified to the point that it has become a source of interest-free loan and has made H&S the most important source of liquidity, as they are bought before they are produced, unlike meat, which is only paid for when it is bought.
UGANDAN LEATHER VALUE CHAIN: OVERVIEW AND INVESTMENT OPPORTUNITIES
ANIMAL HUSBANDRY
The Ugandan leather value chain has a very good resource base. The most up-to-date data on the Republic of Uganda’s livestock population is from the 2017 Statistical Abstract of the Uganda Bureau of Statistics (UBOS), which found that the country has an estimated 14.37 million cattle, 15.73 million goats, 4.31 million sheep, 4.04 million pigs and 46.29 million poultry (see Figure 15). Compared to the figures estimated during the 2008 National Livestock Census by UBOS, the cattle, goat, sheep, pig and poultry population all increased by approximately 2.97%, 3.22%, 1.1%, 0.84% and 8.89% respectively. Considering off-take rates in the range of 12%–15% for cattle and 20%–30% for sheep and goats, the country has the potential to produce approximately 1.4 million cattle hides, 3.1 million goat hides and 0.68 million sheep skins per annum. The Ugandan leather industry also has some non-conventional leather sources such as fish, ostrich and crocodile meant for the high-end leather market.
Figure 15: Livestock numbers in the Republic of Uganda (2014–2016)
Source: Uganda Bureau of Statistics, 2017
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In addition to this, a joint report by COMESA and the Leather and Leather Products Institute (LLPI) identified flay cuts as another major source of slaughter defect. The same report estimated the gross losses incurred due to the prevalence of pre-, peri- and post-slaughter defects (see Table 5), also reflecting the potential earnings of having well-functioning slaughterhouses.
Table 5: Loss estimation of slaughter defects on H&S in the Republic of Uganda
Type of H&SPotential earnings, if H&S are 1st grade
Actual earnings Loss
Bovine 10 170 000 5 989 000 4 181 000
Goat and sheep
7 680 000 5 019 600 2 660 400
Total estimated loss
17 850 000 11 008 600 6 841 400
Source: COMESA/LLPI, 2015.
According to the Uganda Investment Authority (UIA), there are more than 40 slaughterhouses and abattoirs and 800 slaughter slabs countrywide. Some of these include: Uganda Meat Industries – Kampala; City Abattoir – Kampala; and Top Cuts and Kalerwe Abattoirs. Altogether, these abattoirs slaughter an estimated 700 cattle and 150 goats daily. Investment into modern, efficient slaughterhouses using proper equipment, deploying good practices at all slaughter stages (pre, peri and post) and a skilled workforce would bring considerable improvements to the quality of raw material for further processing and bring immense value addition throughout the chain, especially if the number of middlemen between slaughter stages and tanneries is reduced.
The Republic of Uganda’s production of H&S is dominated by scattered slaughters all over the country, ranging from household slaughters for festivities to commercial slaughters by individual butchers and, slaughterhouses and abattoirs. The collection rate for hides and skins is still low, since some hides and skins from some individual slaughters may be discarded due to pre-slaughter defect (M/s Management Innovations, 2015). Indeed, the country has a significant proportion of livestock reared in the pastoralist system. This contributes to a high incidence of pre-slaughter defects, which are associated with diseases (e.g. lumpy skin and poxes, etc.), tick bites, scratches and brand marks, among many others, as identified by the stakeholders who participated in the Strategy Formulation Consultation Workshop held on 10–11 April 2014 in Kampala, the Republic of Uganda.
Figure 16: Ugandan value chain map
Source: COMESA/LLPI, 2015.
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Table 6: Selected tannery capacities in 2018
Tannery Contact ProductionAnnual turnover (USD)/number of employees
Hoopoe Trading LtdTel:+256 772 362324 / +256 758 666695
2 000 hides and 10 000 skins per day
–
Jambo Tannery Uganda LtdTel: +256 701-402213 / +256 772-402213
E-mail: [email protected]– 2 million/28
Jinja Leather Tanneries LtdTel: +256 704-574364
E-mail: [email protected]– 13 322/7
Leather Industries of Uganda Ltd
Tel: +256 434 121461
E-mail: [email protected]
Website: www.leather.ug
– 6.2 million/110
LeatherlandTel: +256 757 766766
E-mail: [email protected]
9 million sq. ft. wet blue per year
3 million/120
Loyal Small Scale IndustriesTel: +256 772 567511 / +256 759 567511
E-mail: [email protected]
480 000 sq. ft. vegetable leather per year
720 000 sq. ft. finished leather per year
–/45
MSA Investor LtdTel: +256 704-539784
E-mail: [email protected] hides and 2 000
skins per day–/9
Novelty Tannery Investment LtdTel: +256 756 170000 / +256 781 471511
E-mail: [email protected]– –/70
SkyFat Tannery Co. Ltd
Tel: +256 772 502921
E-mail: [email protected]
E-mail: [email protected]
3 000 hides and 10 000 skins per day
–/150
SWT Tanners LtdTel: +256 414-222027 / +256 772-786716
2 000 hides and 10 000 skins per day
–/200
Source: Supporting Indian Trade and Investment for Africa, 2018.
TANNING
There are 10 operational tanneries in the Republic of Uganda, two of which process a small proportion of their hides and skins to finished leather (see Table 6). According to the Uganda Leather Value Chain Strategy (2015–2025) by COMESA, the country has an installed tanning capacity of 1.08 million hides and 2 million skins per year and it is estimated that tanneries are operating at 60%–70% capacity range. The main reasons for the low usage are financial constraints and machine breakdowns.
Approximately 95% of processed hides and skins are being exported as semi-processed leather (wet blue), whereas crust and finished leather production is marginal.
Investment into crust and finished leather units offers an attractive option for the growth of the country’s leather sector.
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LEATHER FOOTWEAR MANUFACTURING
According to the Uganda Leather and Allied Industries Association (ULAIA), there are six medium-sized footwear factories and more than 800 small-scale footwear entrepreneurs in the country.
Ugandan footwear demand is estimated at approximately 25 million pairs per year, whereas only about 1 million are produced in the country. The demand gap is filled with footwear imports from the People’s Republic of China, which increased its imports drastically in 2016. Indeed, until 2015, Chinese imports of leather footwear to the Republic of Uganda were five times as high as those from the 2nd largest importer, the Republic of India, and 12 times higher than the Republic of South Africa’s, the 3rd biggest importer. In 2016, the People’s Republic of China’s import of leather footwear to the Republic of Uganda rose drastically by 900% to $14 million and was almost 60 times as high as the Republic of India’s. The amount dropped to approximately 6 million in 2017, which is still well above the average import of the leather footwear of the past 10 years (before 2016, see Figure 17).
Figure 17: Supplying markets for leather footwear (HS 6403) imported by the Republic of Uganda
Source: Trade Map (ITC), 2018.
This market gap between demand and supply of an estimated 24 million pairs of footwear per year represents an attractive investment opportunity. Moreover, footwear from the Republic of Uganda can be exported at zero duty into the EAC market. EAC footwear imports were valued at $567 million in 2016. The country is also eligible for the United States of America’s African Growth and Opportunity Act (AGOA), which offers duty-free exports to the
United States from certain sectors, including leather. Furthermore, the European Union’s Everything But Arms initiative enables the Republic of Uganda to export some goods to the European Union (EU) tax-free. Investors who decide to invest in the production of footwear or leather goods in the Republic of Uganda will, therefore, gain an additional free market access encompassing more than 1.4 billion people.
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leather purses taken from CIBO, showing the scale of investment, production volumes and profit margins. Please refer to CIBO, Volume 2 for analysis of other leather goods mentioned above.
The growing demand for leather products in the Republic of Uganda is also seen in the rising import figures of leather articles. Since 2010, the total imports rose by approximately 163% and more than 400% since 2001, with the main supplying market being the People’s Republic of China, followed by the United Arab Emirates, the Republic of South Africa and the Republic of Kenya (in order of importance as of 2017; see Figure 18).
LEATHER GOODS MANUFACTURING
The Ugandan Government strongly encourages the production of leather goods, notably leather belts, leather purses and leather gloves. These three products were listed in the Compendium of Investment and Business Opportunities (CIBO), Volume 2, published by the Ugandan Investment Authority in collaboration with the Ugandan Ministry of Foreign Affairs and the United Nations Development Programme (UNDP). CIBO, Volume 2 presents business ideas with high growth potential in the Republic of Uganda, giving insight into the feasibility of their implementation. As an example, Box 1 presents the business idea of
Figure 18: Supplying markets for leather articles (HS 42) imported by the Republic of Uganda
Source: Trade Map, ITC, 2018. and Agriculture Organization (FAO), 2018.
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Estimated production capacity and annual revenue: Based on the economic, social and political environ-ment as well as the degree of raw material availability, a realistic assumption concerning the production capacity of leather purses in Uganda is estimated at 500 pieces per day. This corresponds to a potential annual production of 156,000 pieces of leather purses (based on an average of 26 working days per month) and a gross annual revenue of 546,000 (based on an estimated price of $3.5 per leather purse).
Capital investment requirements in USD
The following table gives a list of requirements (and their respective annual cost) needed for the production of leather purses in the Republic of Uganda, which involves activities like strap cutting, stitching and dying, as well as fasteners and punching zips.
Items Quantity Price/quantity Total cost per item
Sewing machine 2 520 1 040
Leather turning machine 1 880 880
Strap cutting 1 944 944
Punching zips 1 630 630
Other equipment / / 520
Land 2 5 000 10 000
TOTAL INVESTMENT 14 014
Source: CIBO, Volume 2.
Most of these items (machinery and equipment) are available on the local market, specifically in the industrial area of Kampala for different leather tanneries for the procurement of raw material and along Entebbe Road for the procurement of machinery. From experience, machinery for this particular product can also be imported, especially from the Republic of India or the People’s Republic of China.
Production/operating cost
The table below summarizes the cost involved in the production of leather purses. Calculations are based on averages estimated by the authors of CIBO.
Items Qty/day Price/qty Cost/month Total cost/year
Turned leather 100 12 31 200 374 400
Dye 30 3 2 340 28 080
Threads 120 0.8 2 496 29 952
Subtotal direct cost 36 036 432 432
Administration expenses 542 6 500
Labour 2 250 27 000
Utilities and rents 1 350 16 200
Selling and distribution 300 3 600
Miscellaneous (incl. depreciation) 292 2 500
Subtotal general cost 4 734 55 800
TOTAL COST 40 770 488 232
Profitability analysis
There is a market for leather purses both at a national and international level. The table below gives an overview of the estimated profitability, based on the above estimated figures.
Profitability item Amount/day Amount/month Amount/year
Revenue 1 750 45 500 546 000
Production and operating cost 1 568 40 770 489 236
Profit 182 4 730 56 765
Box 1: Leather purses business analysis in the Republic of Uganda (all amounts are in USD)
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� Everything But Arms (EBA): This is a European Union (EU) initiative under which all imports to the EU from the least developed countries (LDCs) are duty-free and quota-free, with the exception of armaments.
� African Continental Free Trade Area (AfCFTA): This refers to the free trade area agreement between 44 member states of the African Union signed during the 10th Ordinary Session of African Union Heads of State summit held in Kigali in March 2018. The AfCFTA is now the largest free trade area since the creation of the World Trade Organization (WTO). The aim of this agreement is to create a continental market for products and services (a market of approximately 1.2 billion people and cumulated GDP of approximately $3.4 trillion), with free movement of business partners and investment. This is expected to promote intra-African trade, to support the regional and continental integration of Africa, and to further develop the African economy’s manufacturing sector. The free trade area agreement will become operational after 22 countries have ratified it. In the meantime, it is still possible for countries that did not sign the agreement to do so before it comes into force.
Furthermore, the Republic of Uganda is also a member of the East African Community (EAC) and the Common Market for Eastern and Southern Africa (COMESA). For EAC imports, the duty rate is zero, whereas for COMESA imports, the duty rates are in the range of 0%–1%. The following COMESA countries have reduced Customs duty rates (0%) for eligible products in order to fully participate in the free trade area: the Republic of Burundi, the Union of the Comoros, the Republic of Djibouti, the Arab Republic of Egypt, the Republic of Kenya, Libya, the Republic of Madagascar, the Republic of Malawi, the Republic of Mauritius, the Republic of Rwanda, the Republic of the Sudan, the Republic of Zambia and the Republic of Zimbabwe. See Figure 19 for more understanding on the geographical distribution of countries within COMESA, EAC and Southern African Development Community (SADC) regional blocks.
TRADE
The Republic of Uganda’s strategic location, coupled with the stability the country has enjoyed over the past 31 years, makes it a gateway for regional trade and investments into East Africa. The Republic of Uganda is a member of several trade arrangements and a beneficiary to trade-enhancing schemes, including:
� World Trade Organization (WTO): Being a member of the WTO implies that Ugandan products have access to more than 90% of world markets at most favoured nation (MFN) treatment.
� African Growth and Opportunity Act (AGOA): This is a non-reciprocal trade preference agreement offering certain commodities from eligible Sub-Saharan African countries duty-free access to the United States of America’s market. AGOA has been renewed until September 2025.
� Trade and Investment Framework Agreement (TIFA): Signed between the United States of America and the East African Community (EAC) in 2008. This provides strategic frameworks and principles for dialogue on trade and investment issues between the United States of America and the other parties to the agreement.
� Economic partnership agreements (EPAs): These are agreements between the European Union and African, Caribbean and Pacific countries and regions (ACP) that aim to promote ACP–EU trade – and ultimately contribute, through trade and investment, to sustainable development and poverty reduction.
� Cotonou Partnership Agreement (CPA), also known as African Caribbean Pacific European Union (ACP-EU) Partnership Agreement: This agreement established the Generalized System of Preferences (GSP) – a non-reciprocal preferential treatment granted to developing countries.
Trade and investment climate
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Figure 19: Tripartite Free Trade Area map
Source: UNCTAD cited in World Economic Forum, 2016.
These multilateral trade agreements not only give the Republic of Uganda preferential access to a global market valued at approximately $36.9 trillion, but also to a network of more than 1.4 billion potential consumers. These figures are presented in detail in Figure 20. The recently signed African Continental Free Trade Area (AfCFTA) agreement adds to this already impressive statistic of the Republic of Uganda’s global market potential.
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TAXATION
The Ugandan Revenue Authority (URA) is the government body mandated to assess, collect tax revenue, administer and enforce laws on behalf of the Ministry of Finance, Planning and Economic Development. With the aim to facilitate the tax collection for both the government and taxpayers, the URA has introduced a new electronic tax system (eTAX) to ease registration of taxpayers, filing of returns, assessments and payment of taxes.
The Integrated Tax Administrative System provides 24/7 online services to the taxpayer and the online applications can be lodged from anywhere in the world as long as there is an internet connection. In case of approval, applicants receive a tax identification number (TIN) and a password, which they can use to log onto the web portal and create their own account for any further transactions; otherwise, a registration rejection note is issued via e-mail, with the reason(s) for rejection stated in the mail. As a result, the registration process is less cumbersome, more flexible (able to amend changes, if needed) and faster. The URA also provides e-filing (for tax return) and e-payment services for taxpayers, which further facilitates the whole taxation process.
In addition to this, the Republic of Uganda has concluded bilateral investment treaties (BITs) and bilateral taxation agreements (BTAs) with several countries:
� BITs – BLEU (Belgium-Luxembourg Economic Union), the People’s Republic of China, the Republic of Cuba, the Kingdom of Denmark, the Arab Republic of Egypt, the State of Eritrea, the French Republic, Germany, the Republic of Italy, the Kingdom of the Netherlands, the Federal Republic of Nigeria, the Republic of South Africa, the Swiss Confederation, the United Kingdom of Great Britain and Northern Ireland, and the Republic of Zimbabwe;
� BTAs – the Kingdom of Denmark, the Republic of India, the Republic of Italy, the Republic of Mauritius, the Kingdom of the Netherlands, the Kingdom of Norway, the Republic of South Africa, the Republic of Zambia, and the United Kingdom of Great Britain and Northern Ireland.
Figure 20: Ugandan multilateral trade agreements
Source: Author’s calculation based on World Bank figures (2015/2016).
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According to Article 152 (i) of the Uganda Constitution: “No tax shall be imposed except under the authority of an Act of Parliament.” Therefore, the Uganda Revenue Authority Act Cap 196 was put in place to provide the administrative framework in which taxes under various Acts are collected, among others, Customs Tariff Act. Cap 337, Excise Tariff Act Cap 338, Income Tax Cap 340, and Value Added Tax Act Cap 349.
The Ugandan tax system can be summarized within six main groups: individual and corporate income tax, value-added tax on goods and services, import and excise duties, stamp duties, pay-as-you-earn (PAYE) and rental tax. Table 7, Table 8 and Table 9 give an overview of the relevant tax rate for foreign investors, notably individual income tax and business tax.
Table 7: Individual income tax for residents (monthly PAYE tax rates)
Taxable income (in UGX)Approximate USD equivalent Tax rate
≥ 235 000 ≥ 61 0%
> 235 000 ≤ 335 000 > 61 ≤ 87 10% of the amount by which the taxable income exceeds UGX 235 000
> 335 000 ≤ 410 000 > 87 ≤ 107UGX 10 000 plus 20% of the amount by which the taxable income exceeds UGX 335 000
≥ 410 000 ≥ 107
(a) UGX 25 000 plus 30% of the amount by which taxable income exceeds UGX 410 000
(b) If taxable income of an individual exceeds UGX 10 000 000, an additional 10% is charged on the amount by which taxable income exceeds UGX 10 000 000
Source: URA, 2015, 2017.
Table 8: Individual income tax for non-residents (monthly PAYE tax rates)
Taxable income (in UGX)Approximate
USD equivalent Tax rate
≥ 335 000 ≥ 87 10%
> 335 000 ≤ 410 000 > 87 ≤ 10733 500 plus 20% of the amount by which the taxable income exceeds UGX 335 000
≥ 410 000 ≥ 107
(a) UGX 48 500 plus 30% of the amount by which taxable income exceeds UGX 410 000
(b) If taxable income of an individual exceeds UGX 10 000 000, an additional 10% is charged on the amount by which taxable income exceeds UGX 10 000 000
Source: URA, 2015, 2017.
Table 9: Business taxes
Category Resident Non-resident Exemptions
Corporate tax* 30% 30%
Income tax holiday granted to industrial park or free zone developer as follows:
– 10-year holiday if capital is $200 million or more
– 5-year holiday if capital is $30 million or, in the case of a Ugandan citizen investor, $10 million
Withholding tax on interest
15% 15%
Withholding tax on dividends**
15% 15%
Withholding tax on imported goods
6% 6%
VAT 18% 18%18% is the standard rate
Some types of supplies of goods and services are zero rated or exempt
* 25%–45% for mining companies** 10% if the payer is listed on the Ugandan Stock ExchangeSource: URA, 2015, 2017.
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INVESTMENT INCENTIVES
The Republic of Uganda has an investment incentive package that provides generous capital allowance for medium- and long-term investors in priority areas whose projects involve significant investment in plant and machinery and other costs. Among others, the Republic of Uganda offers generous provisions for VAT deferments, deductions, exemptions and capital depreciation allowances. This explains why investors pay no or minimal tax during the 1st five years of their investment. Table 10, Table 11, Table 12 and Table 13 give detailed information on the various investment incentives in the Republic of Uganda.
FISCAL AND FINANCIAL INCENTIVES
Table 10: Selected tax incentives and exemptions available to investors in the Republic of Uganda
Type of incentive or exemption Who qualifies
Description of benefits and conditions for granting deduction or exemption
Exemption of tax on international payments
A resident company paying debentures outside the Republic of Uganda
• Debentures issued by the company outside the Republic of Uganda for raising a loan outside the country
• Debentures were widely issued for the purpose of raising funds for use by the company in a business carried on in the Republic of Uganda
Tax deduction for employers of persons with disabilities
Private employers and companies that employ persons with disabilities
• 2% of income tax payable is allowed as a deduction for income tax purposes if 5% of the company’s employees on full-time basis are persons with disabilities
Training expenditureEmployers who train permanent residents employed
• 100% training expenditure on training or tertiary education allowed as a deduction for income tax purposes
Industrial building allowance
A person who has incurred capital expenditure on the construction of an industrial building and the building is used by the person in the production of income
• 5% of the cost of construction of the industrial building
Depreciation allowances (capital investment allowances)
A person who places depreciable assets (listed) in service
• 40% for computers and data-handling equipment• 35% for automobiles; buses and minibuses (<
30 passengers); goods vehicles (< 7 tons)• 30% for buses (> 30 passengers); goods vehicles (> 7 tons)• 20% for rail cars
Carry forward losses
An investor whose income is exceeded by the total amount of deductions allowed for any year of income
• The amount of excess ‘assessed loss’ is carried forward and allowed as a deduction in the following year of income
Source: URA, 2017.
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Table 11: Other tax incentives
Category Incentives
Capital allowances and expenses
• The incentives covered in this category are capital allowances and expenses, which are deductible once from the company’s income.
• 50% initial allowances on plant and machinery located in Kampala, Entebbe, Namanve, Jinja and Njeru
• 75% outside Kampala, Entebbe, Namanve, Jinja and Njeru• 25% p.a. start-up costs spread over the 1st four years• 100% scientific research expenditure• 100% training expenditure• 100% mineral exploration and exploitation expenditure• 20% initial allowance on new industrial buildings (including
tourism facilities like hotels and lodges)
Deductible annual allowances
• Depreciable assets specified in four classes under declining balance method:• Class 1: 40% on computers and data-handling equipment• Class 2: 35% on automobiles, construction and earth-moving equipment• Class 3: 30% on buses, goods vehicles, tractors, trailers, plant
and machinery for farming, manufacturing and mining• Class 4: 20% for railroad cars, locomotives, vessels, office furniture and fixtures, etc.
Other annual depreciation allowances
• 5% on industrial buildings, hotels and hospitals (using the straight-line method)• 5% new commercial buildings (constructed after 1 July 2000) (using the straight-line method)• 20%: Farming – general farm works declining balance depreciation• 20% for horticulture (horticultural plant and construction
of greenhouses) straight-line depreciation
Sources: International Trade Centre, 2018; Fortune of Africa 2013.
EXPORT INCENTIVES
Table 12: Export incentives
Type of incentive Description of benefits and conditions for granting deduction or exemption
Duty drawback
• Proof of export• Customs refunds all or part of any import duty paid on material inputs imported to produce for export
or used in a manner or for a purpose prescribed as a condition for granting duty drawback. Duty may be refunded on raw materials imported and used on the goods locally produced for export.
Manufacturing Under Bond
• Manufacturer must have licensed under Section 160 of the East African Community Customs Management Act (EACCM) by applying for a Customs licence to hold and use imported raw materials intended for manufacture for export in secured places without payment of taxes. It makes available working capital that would have been tied up through paying duties immediately after importation.
• The annual licence fee for a bonded factory is $1 500 per calendar year or on pro rata basis if issued within a calendar year.
Duty remission schemes
• 90% remission on sugar for industrial use imported by manufacturers.• 100% remission on:• Inputs for the manufacture of exercise books and other essential goods• Stranded wire used in manufacture of tyres• Treads for cold retreading used in the retreading of tyres• Packaging materials for use in the manufacture of goods for export• Raw materials for use in manufacture of aluminium cans for the dairy industry
Export processing in the free zone
• Uganda Free Zone Authority was set up for promoting exports in the free zone area (the Republic of Kenya, the Republic of Rwanda, the United Republic of Tanzania, the Republic of Burundi and the Republic of Uganda), with increasing commodity processing from trading raw materials to finished goods and exporting outside East Africa as their primary activity.
• Manufacturing is strictly for export purposes.
Source: URA, 2017.
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The free zones are administered by the Uganda Free Zones Authority (UFZA), an authority established by an Act of Parliament in April 2014. The UFZA issues three types of licences, namely the developer’s licence (for investors interested in infrastructure development), the operator’s licence (for business enterprises in the service or manufacturing sector) and the manager’s licence (for business enterprises willing to undertake the management of a free zone). The application fee for a developer’s licence and an operator’s licence is $250 each, and the annual licence payment is $5,000 and $1,000 for a developer’s licence and an operator’s licence respectively. The investment incentives for free zone investors are summarized in Table 13.
� Convention on the Recognition and Enforcement of Foreign Arbitral Award (CREFAA); and
� Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC).
In addition to this, there is a clear mechanism of dispute settlement involving businesses, the government and private investors. For disputes that cannot be solved through the national court, settlement via bilateral or multilateral agreements, or any other international machinery agreed upon by both parties is also possible.
Free zones
The free zones are a result of the Free Zone Act of 2014, which was set up with the aim of creating an enabling environment to enhance the development of export-oriented manufacturing in all sectors of the economy. The aim is to establish 10 free trade zones by 2020. This is expected to diversify the Republic of Uganda’s economic base, attract investment, generate employment, increase foreign exchange earnings, enhance technology transfer and create backward linkages.
SECURITY OF INVESTMENT
The Republic of Uganda is a signatory to and member of several international investment guarantees and agreements. Some of these include:
� Multilateral Investment Guarantee Agency (MIGA), which provides guarantee against non-commercial risks;
� International Centre for Settlement of Investment Disputes (ICSID), which is a channel for settling disputes between foreign investors and host governments;
Table 13: Selected incentives for free zone investors
Fiscal incentives Non-fiscal incentives
• Exemption from taxes and duties on all export processing zone imported inputs that are for exclusive use in the development and production output of the business enterprise (raw materials, machinery and spare parts)
• Unrestricted remittance of profit after tax• Tax holiday for 10 years on exportation of
finished consumer and capital goods• Exemption from tax on income from agroprocessing• Exemption from capital gains tax on plant and machinery used
in the free zones for five years and one day upon disposal• Exemption from all taxes, levies and rates
on exports from the free zones• Exemption on personal income of a person offering technical
assistance under a technical assistance agreement• VAT exemption on selected services and supplies• A deduction of 50% off the cost base of the property is
allowed on eligible property put into service for the 1st time outside a radius of 50 km from the boundaries of Kampala
• Well-planned zoning and clustering of the business activities in free zones, resulting in economies of scale
• Availability of warehouses• On-site Customs inspection of buildings, premises, vehicles,
vessels and aircrafts entering and leaving the free zone• Free land (based on availability) for development of free zones• Timely turnaround period in securing business registration• Enhanced technology uptake• Timely turnaround period for processing work permits for expatriates• Business facilitation and aftercare services in the
acquisition of secondary licences, permits and approvals from other government agencies
• Timely processing of secondary licences for applicants• Serviced physical infrastructure facilities and
buildings within the public free zones
Sources: UFZA, 2016; Tralac, 2016.
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VISAS AND WORK PERMITS
All foreign nationals intending to work in the Republic of Uganda must ensure that they have a relevant work permit. For all classes of work permit, the applicants should prepare a fill entry/work permit form, photocopies of passport and two passport-sized photos. The table below summarizes the other requirements for selected classes of work permits and their respective fees are presented in Table 14 and Table 15.
Table 14: Selected work permit classes and their respective requirements
Classes Requirements
Class B: Issued to prospective investors in agribusiness and animal husbandry
• Cover letter from company• Proof of landownership or land title• Uganda Investment Authority licence• Support letter from the Ministry of Agriculture• Recommendation from local councils and resident district commissioner’s office• Work plan or feasibility study of the project undertaken• Security bond and Interpol letter from home country
Class D: Issued to persons wishing to do business or trade in the Republic of Uganda
• Cover letter from company• Uganda Investment Authority licence (where applicable)• Articles and Memorandum of Association• Company’s bank statement, certificate of incorporation, income
tax clearance and trading licence, and security bonds• Bank of Uganda certificate of remittance of $100 000• Letter of good conduct from home country or Interpol in country of origin
Class E: Issued to persons intending to invest in the manufacturing sector in the Republic of Uganda
• Cover letter from company• Investment licence, trading licence and security bond• Articles, memorandum and certificate of incorporation• Bank statement and income tax clearance• Letter of good conduct from home country or Interpol in country of origin
Class G2: Issued to persons wishing to work for gain or not in the Republic of UgandaNB: Applicants under this category can only enter the Republic of Uganda after granting and payment of work permits
• Cover letter from employer or company• Appointment letter• Academic qualifications• Evidence that the organization failed to fill the vacancy from the local labour market• Articles, memorandum and certificate of incorporation• Bank statement and income tax clearance
Source: Directorate of Citizenship and Immigration, 2018.
Table 15: Visa and work permit fees
Item Fees
Visas
• Single entry visa – $50• Multiple entry visa:• 6–12 months – $100• 24 months – $150• 36 months – $200
Work permits for classes:B (agriculture)D (business)E (manufacturing)G (expatriate employment)
6-month work permit• $800 pre-payment for all classes without top-up fees• Exception:• Additional $450 top-up fees for Class D only (business)
12-month work permit • $1 500 pre-payment + $1 000 top-up fees for all classes
24-month work permit• $1 500 pre-payment + $2 500 top-up fees for all classes• Exception:• Class D (business) – $1 500 pre-payment + $3 500 top-up fees
36-month work permit• $1 500 pre-payment + $3 500 top-up fees for all classes• Exception:• Class D (business) – $1 500 pre-payment + $6 000 top-up fees
Source: Directorate of Citizenship and Immigration, 2018.
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REGISTRATION PROCEDURES FOR COMPANIES
Business registration in the Republic of Uganda is done by the Uganda Registration Services Bureau (URSB). The bureau is mandated by the URSB Act to carry out all registrations required under the relevant law. Before setting up a business in the Republic of Uganda, foreign investors must also obtain an investment licence from the Uganda Investment Authority (UIA). The licence is free of charge and foreign investors can benefit from the UIA assistance and established network of contacts. Furthermore, the
Table 16: Registering a new company in the Republic of Uganda
Steps (responsible institutions) Fees Requirements
Company name reservation (URSB)
UGX 22 000 bank charges inclusive Company name assessment forms
Membership subscription* (Ugandan National Chamber of Commerce and Industry)
Annual payment varies according to category of subscription:
• Silver – UGX 260 000• (approximately S$67)• Gold – UGX 510 000• (approximately $133)• Associate – UGX 1 100 000• (approximately $286)
• Certified name reservation form• Business case• Passport copy of one of the
company’s directors
Registration to obtain a Certificate of Incorporation (URSB)
Registration fee
• – UGX 20 000• Stamp duty• – 0.5% of the share capital• Stamp duty on Memorandum
and Articles of Association• – UGX 35 000• Filing fees for A2 forms• – UGX 25 000• Filing fees for A3, A9 and 7 forms• – UGX 20 000
• Company books• Memorandum of Agreement• Articles of Association• Declaration of companies using
forms A1, A2, A3, A9 and form 7• Company resolution
Registration for tax identification number TIN (URA)
• Free of charge• Application can be completed online
at https://www.ura.go.ug/• Personal inquiry form for each director
Registration for value-added tax, VAT (URA)
• Free of charge
• Necessary for companies with a threshold of more than UGX 50 000 000 (approximately $13 000)
• Statement of nominal capital form with information of share capital, number, class and value of shares
Registration for trading licence (municipal authority)
• No fixed fees. Amount charged depend on the nature of the business and grade. The assessment is done by the respective municipal authorities (e.g. Kampala Capital City Authority for Kampala)
• Memorandum of Association• Article of Association• Form 7• Certificate of Incorporation• Lease or tenancy agreement
Registration with the National Social Security Fund (NSSF)
Free of charge
* OptionalSources: URSB, 2018; Ayazika, 2017.
UIA assists foreign investors with obtaining industrial land and work permits for foreign staff. The principal steps from company registration to investment implementation are summarized in Figure 21.
There is no minimum capital requirement for the establishment of a company in the Republic of Uganda. Stamp duty of 0.5% is paid on the nominal value of the company’s share capital. The total cost for registering a company in the Republic of Uganda is approximately UGX 165,000, excluding stamp duty, and it takes four working days on average. Table 16 summarizes the steps to register a company in the Republic of Uganda.
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Table 17: Annual average weighted large industrial tariffs (UGX*/kWh), 2012–2015
Plant name 2012 2013 2014 2015
UMEME 312.8 312.8 308.5 336.5
WENRECO 420 426.8 467.7 526.9
FERDSULT 328.2 341.6 329.2 316.8
* $1 approximately corresponds to UGX 3 764 (25 October 2018)Source: Electricity Regulatory Authority cited in UBOS, 2017.
WATER
The National Water and Sewerage Corporation (NWSC) is the main water provider in the Republic of Uganda. It is a public utility company 100% owned by the Government of Uganda. NWSC’s tariff structure as of July 2018 can be seen in Table 18.
All the steps in Figure 21 can be done at the Uganda Investment Authority (UIA), which has been transformed into a one-stop centre (OSC) for investors.
INDUSTRIAL UTILITIES
ELECTRICITY
The Republic of Uganda’s national electricity utility company is known as UMEME. It is the largest energy distributor in the country, distributing 97% of all electricity used in the country. According to the report “Making Power Affordable for Africa and Viable for Utilities” compiled by the World Bank, the Republic of Uganda has the most efficient power utilities in Sub-Saharan Africa when it comes to operational and capital expenditures. There are two other energy distributors in the Republic of Uganda, WENRECO and FERDSULT. An overview of these companies’ tariffs for large industries is presented in Table 17.
Company registration
Local project site
Acquisition of investment licence
Implementation of investment
Aftercare services
Environment impact assessment
Acquisition of regulatory licences
Figure 21: Investment registration and facilitation flowchart
Source: Author’s illustration based on UIA, 2015.
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the 1995 Constitution, the 1998 Land Act, the 2010 Land Amendment Act and the 2013 Uganda National Land Policy. The legal framework recognizes customary, freehold, mailo and leasehold tenure, which differ in terms of rights over land use and ownership. More details are found in Table 19.
Table 19: Land tenure system in the Republic of Uganda
Land tenure system Description
Customary tenure
• This system provides for communal ownership and use of land.
• The majority of Ugandans hold land under this tenure form.
• Land ownership and use is regulated by local customs and tradition.
• There are, therefore, huge differences between the customary tenure system due to the diversity of ethnic groups, having their own customs and traditions.
• Customary tenure is considered to be inferior to other forms of registered property rights.
Freehold tenure
• It is regarded as the most favoured tenure type as reported by the national land policy.
• This system allows the owner to hold registered land in perpetuity or for a period of time.
• The holder is provided with full power of ownership of land.
Mailo tenure
• It combines customary and freehold tenure systems. It is a customary form of freehold tenure system.
• It is the holding of registered land in perpetuity and it makes a distinction between the ownership of the land and the right of use by a legally recognized occupant. So, any decision in regard to land management requires the approval of both the owner and the legally recognized occupant.
Leasehold tenure
• This form of tenure can be created by contract between a landowner and a tenant.
• Can be obtained from any tenure system whether customary, freehold or mailo.
Source: Vorlaufer et al., 2017.
Table 18: NWSC tariff structure
Customer category Tariff excl. VAT for 2018/2019 Price per 20 litre jerrycan
Public standpipe 1 060 25
Domestic 3 400 80
Institution or government 3 441 81
Commercial < 500 m3/month 4 220 99
Commercial < 500–1 500 m3/month
4 220 99
Commercial > 1 500 m3/month 3 373 79
Source: National Water and Sewerage Corporation (NWSC), 2018.
LABOUR AND WAGE RATES
The Employment Act of 2006 regulates the payment of wages to all classes of workers. The Act requires an employer to make timely payment of remuneration to employees, which varies depending on the type and duration of contract (AfricaPay, 2018).
According to the Employment Act of 2006, wages should be paid in legal tender to the worker at the workplace or with the prior written consent of the worker. The law does not usually permit in-kind payment of wages. The payment should be done by bank cheque, postal order, money order or direct payment to the worker’s bank account. However, the Ugandan Government may make regulations in this regard after consultation with the Labour Advisory Board.
The minimum wage of UGX 6,000 was last updated in 1984 and has not been revised thereafter. This was still part of the Minimum Wages Advisory Boards and Wages Councils Act of 1964. However, in the current Employment Act of 2006, there is no mention of a minimum wage rate. Indeed, the Republic of Uganda has no minimum wage. There has been attempt by parliament to pass a new minimum wage bill, but this has been unsuccessful to date. Remuneration is negotiated along the prevailing labour market rates for unskilled, semi-skilled, skilled and professional labour.
LAND AVAILABILITY
The Ugandan legal and institutional framework as well as geographical patterns of land ownership and tenure systems have been heavily influenced by the country’s history. Throughout the years, there were several laws and policies that affected land governance in the Republic of Uganda and the main ones affecting the contemporary land governance in the Republic of Uganda comprise
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LAND ACQUISITION BY FOREIGNERS
Non-citizens can acquire land only through the leasehold tenure system and this is for a period of up to 99 years (with an automatic renewable clause if agreed), as specified in Article 41 of the 1998 Land Act. With non-citizens, the 1998 Land Act refers to either a person not of Ugandan nationality or a corporate body in which the controlling interests lies with non-citizens.
An investor can acquire land from a private individual, on a willing buyer–willing seller arrangement. Another possibility will be to lease land held by a government agency legally empowered to hold land on behalf Ugandan citizens. An example of such a government agency is the Ugandan Investment Authority (UIA). With the aim to facilitate investor access to land, the 1991 Investment Code authorized the UIA to acquire and hold land property. Box 2 summarizes the steps to follow when buying land in the Republic of Uganda and Box 3 gives a general overview of land allocation guidelines as approved by the UIA board.
� Identify and decide on the piece of land to be purchased.
� Identify the owner or registered proprietor of the piece of land.
� Choose a local legal representative (lawyer), who will assist you throughout the whole procedure.
� With the help of the lawyer, search for the land title in the Land Registry Office in order to examine the authenticity of the property.
� Hire a professional surveyor to verify the land size. This can take from one to more than 10 days, depending on the size, vegetation cover, location and topography, etc.
� After agreeing on the terms of offer, both parties can draft the sale agreement. Make sure that all the clauses of the sales agreement and their implication are well understood by you and your lawyer.
� Submit the property transfer forms to the Land Registry Office for approval.
� Apply for the valuation of land using the valuation form. This form is issued by the land offices to fix the stamp duty payable.
� Pay the stamp duty, which is a tax levied on land transactions for registration and transfer purposes.
� In summary, the following documents need to be available in order to successfully register transfer of ownership: the original title deed, original stamp duty assessment forms and receipt, transfer documents (properly stamped), original paid-up land rents receipt and clearance certificate, stamp duty valuation report, original land rate clearance certificate, consent to transfer and application for registration.
� The buyer is advised to pay the total balance on the purchase price only after receiving the completed documents from the seller.
Box 2: Procedure for buying land in the Republic of Uganda
Sources: Ecoland Property Services Uganda, 2017; Okumu, 2016.
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Source: UIA, 2015.
1. APPLICATION
1(a) An application for investment land shall be on Form UIA 2, which must give:
1. A detailed project proposal showing the project business activity and the main products or services to be produced on the land applied for.
2. The proposed total amount of investment in US dollars.
3. Documented evidence of the Investor’s ability to raise funds to implement the project.
4. Expected project impact on the economy in terms of job creation, capital investment, and turnover and export revenue where applicable, as well as other benefits to the community.
5. The amount and nature of land (amount of acreage) that shall be required for the project, including the necessary infrastructure facilities.
6. Evidence of the investor’s track record in terms of experience in implementing similar or related investment projects in the past.
7. The anticipated implementation period for the project (with key monthly milestones or activities articulated).
8. The anticipated impact of the project on the environment and whether an environmental impact assessment shall be necessary.
1(b) The application for Investment land shall be accompanied by:
1. The Memorandum and Articles of Association of the investing company or entity.
2. A copy of the certificate of registration or certification of incorporation.
3. The company’s investment licence issued by UIA.
4. A business plan articulating in detail items in subsection 1(a) above.
5. Preliminary architectural layout of the proposed facilities (giving details of proposed land use).
6. For clarity, submission of documentary evidence of financial capacity to fully use the land shall be mandatory.
Box 3: Selected guidelines for allocation of investment land by Uganda Investment Authority
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Source: UIA, 2015.
2. LAND ALLOCATION PROCEDURE
1. Application on Form UIA 2 for land by an investor company submitted to UIA offices along with all required attachments as in 1(b) above.
2. Evaluation of the application by an evaluation committee comprising the executive director and at least three heads of divisions of UIA (a maximum of 10 working days).
3. Consideration of the application by the relevant subcommittee of the UIA board (a maximum of 3 months).
4. Consideration and final allocation of land by the UIA board (a maximum of 2 weeks).
5. Lease offers shall be valid for strictly 14 days, within which written acceptance of the offer must be given to UIA (effective a maximum of one week after board approval).
6. Submission of the draft lease agreement to the solicitor general for clearance.
7. Legal documentation (signing of lease agreement with UIA subject to approved terms and conditions and processing of leasehold certificate of title) (one month, including solicitor general approvals).
3. TERMS AND CONDITIONS OF LAND ALLOCATION
Land shall be allocated to investors on the following conditions:
1. Only entities recognized under the Companies Act of Uganda and qualifying government agencies for purposes of doing business or similar activities shall be eligible for UIA land allocation.
2. An initial lease offer of five years, within which the investor would have undertaken substantial development on the land. This term to be extended to a full term of 49 years (or as may be determined by the UIA board) upon satisfactory development of allocated land.
3. Those allocated investment land shall pay a premium and ground rent, as shall be determined by the UIA board (see notes in 5(a) below), unless the land is subsidized in line with the government policy on prioritized investment sectors.
4. (a) Investors are allocated fully subsidized land to provide a performance security in the form of a bank or insurance bond equivalent to 10% of the value of the leased land valid for 18 months, within which period the conditions in subsection (iv b) below should have been achieved.
4. (b) Within 18 months from the date of allocation, the investor should have started development of the land in terms of approved building plans, approved EIA and commenced physical construction. Failing this, the lease shall automatically lapse and land shall revert back to UIA and the performance bond will be cashed and the proceeds forfeited to the state.
Box 3
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5. The investor company allocated UIA investment land shall not change its shareholders for the 1st five years without the written approval of the authority.
6. Priority will be given to the priority sectors as guided by government’s priority listing of investments.
4. IMPORTANT NOTES
a) Payments for leased land
Payments for leased investment land shall be as follows or as amended by UIA board from time to time:
1. Ground rent to enable UIA to manage the land shall be $10 per acre per annum for Greater Kampala Area and $5 per acre per annum for other parks in the country.
2. The total payable lease premium as shall be indicated in the lease agreement shall be payable in the following installments:
� 1st installment of 10% of the total payable lease premium prior to signing of the lease agreement
� 2nd installment of 30% of the total payable lease premium within six months from the date of signing the lease agreement
� 3rd installment of 30% of the total payable lease premium within 18 months from the date of signing the lease agreement
� 4th and last installment of 30% of the total payable lease premium within 36 months from the date of signing the lease agreement
1. The payments in (i) and (ii) above shall be independent of obligations on UIA or the Government of Uganda, such as development of infrastructure, etc.
2. Failure to pay on time shall attract an interest equivalent to the Bank of Uganda interbank lending rate payable to UIA and shall render the lease agreement subject to revocation at the exclusive discretion of UIA board.
3. No payment to UIA in respect of the allocated or leased land shall be refundable under any circumstances.
b) Dispute resolution
All disputes arising from and related to allocation of investment land by UIA and interpretation and implementation of lease agreements shall be governed by the laws of the Republic of Uganda.
Box 3: Selected guidelines for allocation of investment land by Uganda Investment Authority
Source: UIA, 2015.
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Useful contacts
SELECTED SUPPORT AGENCIES
Institution Contact
Directorate of Citizenship and Immigration Control
Plot 75 Jinja Road
P.O. Box 7165/7191
Kampala, Uganda
Tel: + 256 414 595945
Fax: +256 414 348707
Kampala City Trader’s Association (KACITA)
Market Street, Royal Complex Building, 3rd Floor Nakasero, Opp. Platinum House, Kampala, Uganda
Tel: +256 313 200401/2200400
Ministry of Foreign Affairs
P.O. Box 7048, Kampala
2A/B Apollo Kaggwa Road
Tel: +256 414 345661, +256 414 257525
E-mail: [email protected]
Website: http://www.mofa.go.ug
National Environmental Management Authority
Plot 17/19/21 Jinja Road, NEMA House
P.O. Box 22255, Kampala
Tel: +256 414 251064
Fax: +256 414 257521
E-mail: [email protected]
Website: http://www.nema.go.ug/
Private Sector Foundation Uganda
Plot 43 Nakasero Road
P.O. Box 7683, Kampala, Uganda
Tel: +256 312 263850/261850
E-mail: [email protected] and [email protected]
Website: http://www.psfuganda.org
Uganda Cleaner Production Centre
Plot 42A Mukabya Road
P.O. Box 34644, Kampala, Uganda
Tel: +256 412 87938/87958
Fax: +256 412 87940/86767
E-mail: [email protected]
Website: http://www.ucpc.co.ug
Uganda Export Promotion Board
2nd Floor, UEDCL Tower
P.O. Box 5045, Kampala, Uganda
Tel: +256 414 230250/230233
Fax: +256 414 259779
E-mail: [email protected]
Website: http://www.ugandaexports.go.ug/en/
Uganda Free Zones Authority
6th Floor, Communications House
Plot 1 Colville Street
P.O. Box 37578, Kampala
Tel: +256 417 722600
E-mail: [email protected]
Website: http://freezones.go.ug/
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Institution Contact
Uganda Industrial Research Institute (UIRI)
Plot 424 Mukabya Road
P.O. Box 7086, Kampala
Nakawa Industrial Area
Tel: +256 414 286245
Fax: +256 414 286695
E-mail: [email protected]
Website: http://www.uiri.org
Ugandan Investment Authority
TWED Plaza, Plot 22B Lumumba Avenue
Tel: +256 414 301000
Website: http://www.ugandainvest.go.ug
Uganda Leather and Allied Industries Association (ULAIA)Mr. Ssekandi A. Hakim
Lugogo Show Ground
Tel: +256 414 222551/+256 702 583260
Fax: +256 414 222201
E-mail: [email protected]
Uganda Manufacturers Association
Tel: +256 414 221034/287615/2
E-mail: [email protected]
Website: http://www.uma.or.ug
Uganda National Bureau of Standards
Plot 2-12, Bypass Link, Industrial & Business Park, Kyaliwajala Road, Kampala
P.O. Box 6329, Kampala
Tel.: +256 414 505995, +256 414 222369
+256 800133133
Toll free +256 800133133
Fax: +256 414 286123
E-mail: [email protected]
Uganda National Chamber of Commerce and Industry
Plot 1A, Kiira Road. Mulago, Kampala, Uganda
Tel: +256 753 503035
Fax: +256 414 230310/312 266324
E-mail: [email protected]
Website: http://www.chamberuganda.com
Uganda Registration Services Bureau
Plot 5 George Street, Georgian House
P.O. Box 6848, Kampala, Uganda
Tel: +256 414 233219
Fax: +256 414 250712
E-mail: [email protected]
Uganda Revenue Authority
Plot M193/M194, Nakawa Industrial Area
P.O. Box 7279, Kampala, Uganda
Tel: +256 417 440000
E-mail: [email protected]
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SOME LEATHER GOODS (SHOES) MANUFACTURERS
Bata Shoe Co. of Uganda Ltd
94A 5th Street, Industrial Area, Kampala
P.O. Box 422, Kampala
Tel: +256 393 261342, +256 414 235440/414 233517
Fax: +256 414 341380
E-mail: [email protected]
Website: https://bata.co.ug/
Foot Protection Services (U) LtdMr. Nyeko George
Plot 1059 Kawesa Road, Kireka
P.O. Box 14659, Kampala
Tel: +256 77 672 357
Fax: +256 71 417 983
People’s Footwear and General Enterprises
Plot No. 6, Ripon Road
P.O. Box 487, Kampala
Tel: +256 434-120501
Training and Common Facility Centre, Uganda
6th Street Industrial Area
P.O. Box 1307, Kampala
Tel: +256 414 348476
Fax: +256 414 345598
E-mail: [email protected]
Uganda Shoe Co. Ltd
Plot 104-106 5th Street, Industrial Area
P.O. Box 3883, Kampala
Tel: +256 414 259192
Fax: +256 414 251880
FINANCIAL INSTITUTIONS
ABC Capital Bank Limited
Plot 4 Pilkington Rd, Colline House, Kampala
P.O. Box 21091, Kampala
Tel: +256 200 516600
Fax: +256 414 258310
E-mail: [email protected]
Website: www.abccapitalbank.co.ug
Bank of Africa – Uganda Limited
Plot 45, Jinja Road, Bank of Africa House
P.O. Box 2750, Kampala
Tel: +256 414 302001, +256 800 100140, +256 414 302111
E-mail: [email protected]
Website: https://boauganda.com/index.php
Bank of Baroda
Plot 18, Kampala Road
P.O. Box 7197, Kampala
Tel: +256 414 233680, +256 414 345196
Fax: +256 414 230781
E-mail: [email protected], [email protected]
Website: https://www.bankofbaroda.ug/
Bank of India
Plot 13, Picfare House
P.O. Box 7332, Kampala
Tel: +256 313 400437, +256 414 341880
E-mail: [email protected]
Website: http://www.boiuganda.co.ug/english/home_uga.aspx
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Barclays Bank of Uganda
Plot 2/4 Hannington Road, Kampala
P.O. Box 7101, Kampala
Tel: +256 312 218348, +256 800 222333
E-mail: [email protected]
Website: https://www.ug.barclaysafrica.com/personal/
Cairo International Bank
30 Kampala Road, Kampala
P.O. Box 7052, Kampala
Tel: +256 414 342776, +256 414 230137, +256 414 230141
E-mail: [email protected]
Website: http://cairointernationalbank.co.ug/
Centenary Bank
Mapeera House, Plot 44-46 Kampala Road and Plot 2 Burton Street
P.O. Box 1892, Kampala
Tel: +256 317 202315, +256 800 200555, +256 417 202002
E-mail: [email protected]
Website: http://www.centenarybank.co.ug/
Citibank Uganda
4 Ternan Avenue, Centre Court, Nakasero, Kampala
P.O. Box 7505, Kampala
Tel: +256 414 305500, +256 312 305500
Fax: +256 413 40624
Website: https://www.citigroup.com/citi/about/countries-and-jurisdictions/uganda.html
Commercial Bank of Africa
10 Kafu Road, Nakasero, Kampala
P.O. Box 74827, Kampala
Tel: +256 417 335700, +256 312 188400
E-mail: [email protected]
Website: http://cbagroup.com/uganda/
DFCU Bank
26 Kyadondo Road, Nakasero, Kampala
P.O. Box 70, Kampala
Tel: +256 312 300152, +256 312 300200, +256 414 351000
E-mail: [email protected]
Website: https://www.dfcugroup.com/
Diamond Trust Bank
DTB Centre Plot 17/19, Kampala
P.O. Box 7155, Kampala
Tel: +256 314 387387, +256 800 242242, +256 314 387000
E-mail: [email protected]
Website: https://dtbu.dtbafrica.com/
Ecobank Uganda
P.O. Box 7368, Kampala
Tel: +256 417 700231, +256 41 700232
Fax: +256 312 266079
E-mail: [email protected]
Website: https://www.ecobank.com/ug/personal-banking/countries
Equity Bank Uganda Limited
34 Kampala Road, Church House, Kampala
P.O. Box 10184, Kampala
Tel: +256 772 290000, +256 772 291000, +256 772 292000
E-mail: [email protected]
Website: https://ug.equitybankgroup.com
Exim Bank Uganda (Imperial Bank)
6 Hannington Road, Kampala
P.O. Box 36206, Kampala
Tel: +256 312 320400, +256 755 654654
E-mail: [email protected]
Website: https://www.eximbank-ug.com/
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Finance Trust Bank
Katwe Road, Kampala
P.O. Box 6972, Kampala
Tel: +256 414 341275, +256 751 932900, +256 776 932900
E-mail: [email protected]
Website: https://www.financetrust.co.ug
Guaranty Trust Bank
56 Kira Road, Kampala Central Region
P.O. Box 7323, Kampala
Tel: +256 200 710500, +256 703 718500
E-mail: [email protected]
Website: https://www.gtbank.co.ug/
Housing Finance Bank
Plot 2–4, Wampewo Avenue, Kampala
P.O. Box 1539, Kampala
Tel: +256 414 259651/2, +256 702 010905
Fax: +256 414 341429
E-mail: [email protected]
Website: https://www.housingfinance.co.ug
KCB Bank Uganda Limited
100 Kampala Road, Kampala
P.O. Box 7399, Kampala
Tel: +256 200 508220, +256 417 118200, +256 417 118280
E-mail: [email protected]
Website: https://ug.kcbgroup.com/
NC Bank Uganda Limited
P.O. Box 28707, Kampala
Tel: +256 312 388100, +256 312 388155
E-mail: [email protected]
Website: https://www.nc-bank.com/
Orient Bank
Plot 6/6A Kampala Road
P.O. Box 3072, Kampala
Tel: +256 417 719228, +256 701 144551, +256 800 144551
Fax: +256 414 348039
E-mail: [email protected]
Website: https://www.orient-bank.com/
Stanbic Bank Uganda Limited
17 Hannington Road, Creased Towers, Kampala
P.O. Box 7131, Kampala
Tel: +256 800 250250, +312 264494, +256 312 224600
E-mail: [email protected]
Website: www.stanbicbank.co.ug
Standard Chartered Bank Uganda
5 Speke Road, Kampala, Uganda
P.O. Box 7111, Kampala
Tel: +256 200 524100, +256 313 294100
E-mail: [email protected]
Website: https://www.sc.com/ug/
Tropical Bank Limited
Plot 27, Kampala Road, Kampala
P.O. Box 9485/7292, Kampala
Tel: +256 414 313100
Fax: +256 312 264494
E-mail: [email protected] and [email protected]
Website: https://www.trobank.com/
United Bank for Africa (Uganda) Limited
Plot 22 Jinja Road, Kampala
P.O. Box 7396, Kampala
Tel: +256 417 715100, +256 800 100030
E-mail: [email protected]
Website: https://www.ubagroup.com/countries/ug
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SELECTED LICENCES IN UGANDAN TRADE AND MANUFACTURING SECTOR
Issuing authority Licences
Industrial Licensing Board • Industrial licence
Ministry of Trade, Industry and Cooperatives
• External Trade Act Cap 88• Grant of exclusive licence• Hire purchase licence and off licence• Ship and train licence• Certificate of origin• Import and export licence• Approval of construction• Certificate of exemption• Certificate of registration of a workplace• Notification of use of mechanical power
Registrar of Cooperative Societies • Certificate of registration
Uganda Cooperative Alliance Ltd
• Investment of funds approval• Primary society registration• Probationary society registration• Registering amendment of by-laws• Registration of charges
Uganda Export Promotion Board• Levy on designated exports• Membership registration certificate• Preferential certificate of origin
Uganda Investment Authority
• Certificate of approval to externalize funds• Certificate of incentives• Investment licence• Registration of agreement for the transfer of
foreign technology or expertise• Entry permit
Uganda National Bureau of Standards
• Permit for distinctive mark to complying commodities• Quality mark• Standard mark certificate• Patent registration• Registration of a company incorporated outside the Republic of Uganda• Registration of a prospectus• Registration of charges• Registration of resolutions• Trademark registration• User licence• Utility certificate
Uganda Revenue Authority
• Authorization to export goods for outward processing• Boarding station permit• Bonded warehouse or manufacture under bond licence• Certificate of clearance• Customs agency Licence• Transit goods licence – licence for vehicles
conveying goods under Customs control• Warehouse licence
Source: CIBO, Volume 1.
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9. Food and Agricultural Organization of the United Nations (FAO) (2018). FAOSTAT. Available from http://www.fao.org/faostat/en/#home (last accessed 25 October 2018).
10. Fortune of Africa (2013). Investment Incentives in Uganda. Available from http://fortuneofafrica.com/ug/investment-climate-uganda/investment-incentives-uganda/ (last accessed 4 July 2018).
11. International Trade Centre (2018). Trade Map. Available from https://www.trademap.org/Index.aspx (last accessed 25 October 2018).
12. International Trade Centre (2018, i). Leatherline-portal, Uganda. Available from http://www.intracen.org/leatherline-portal/african-platform/uganda/ (last accessed 25 October 2018).
13. Supporting Indian Trade and Investment for Africa (SITA) (2018). Mid-term survey report.
14. M/s Management Innovations (2015). Report on Value Chain Analysis of Meat, Hides and Skins in Uganda. Available from http://www.works.go.ug/wp-content/uploads/2017/11/EI-JR17053-NECMP-DB-vol1-03.pdf (last accessed 22 September 2018).
15. Ministry of Finance, Planning and Economic Development (MoFPED) (2017). Ugandan Ministry of Finance, Planning and Economic Development Strategic Plan 2016–2021: A competitive Economy for National Development. Available from http://www.finance.go.ug/publication/ministry-finance-planning-and-economic-development-strategic-plan-2016-2021-competitive (last accessed 25 October 2018).
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17. Okumu, Martin (2016). Procedure for Buying Land in Uganda. Available from https://okumumartin.
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SITA project implemented by: SITA project funded by: