Investment Opportunities in Uganda

Investment opportunities in Uganda

Uganda’s economy being still young provides much wider potential and the choice of investment opportunities for the prospective investor than that in the case of more developed economies.

Uganda's existing comparative advantage is heavily concentrated in agriculture, forestry and mineral resources and their primary processing.

The potential investment opportunities have been identified based on the availability of domestic natural resources, the existence of surplus domestic labour, the good market prospects, the "high value low transport costs" to export markets and the relative competitive advantage of Uganda w.r.t her main trading partners in the region.


The prominent opportunities available include the following:

Floriculture Industry :

Inspite of being a relatively new industry in Uganda dating back only to 1993, commercial floriculture has emerged as a major non-traditional agricultural export sector with the major exports being roses and chrysanthemum cuttings. The industry has contributed significantly to the national economy in terms of foreign exchange earnings, employment opportunities and rural development. The rise of the industry can prove to be instrumental in the economic recovery program by ensuring increased wealth to the masses, boosting the country’s export revenue base and creating a sustainable source of income for the people.

Competitive Advantage :

The country’s competitive advantage lies in its favourable climatic conditions, low production costs and a wide range of donor support. The main destinations of Ugandan flowers are the Netherlands, Germany, United Kingdom, France, Norway, and Sweden. Other possible markets that Uganda could favourably tap include Kenya, Rwanda, South Africa, the United Arab Emirates and Austria.

Investment Opportunities :

Investment opportunities exist in expansion of the rose industry and other floricultural plants, production of propagation material, establishment of soil analysis laboratory and services and manufacture of greenhouse plastics and associated packaging materials.

Forestry :

Owing to its household uses forestry is of high economic importance to Uganda. The energy sector is characterized by a heavy dependence on Bio-mass. There are 4.9 million hectares of natural forests and woodlands in Uganda, which cover 24% of the land area. The majority of this forest area (81%) is woodland, 19% is tropical high forest and less than 1% is forest plantations. Despite being very small (5% of Uganda's land area), it produces a handful of resources and is highly productive as it holds 35% of the country's total biomass resource

Competitive Advantage :

Uganda has the richest biodiversity among the East African countries and is regarded as one of the important centres of biodiversity. This is due to the overlapping between the dry East African savanna and those of West African rain forests. As a result a wide range of forest products can be developed at a lower cost and environmental risks.

Uganda is a well watered country richly endowed with renewable natural resources Water shortage is not a problem here. With a temperature range 15 -30°C, and a rainfall range of 750 - 2000 mm, Uganda is best suited for forest production in the East African region. There is abundance of skilled and unskilled labour.

Investment Opportunities :

Uganda is endowed with favourable climatic conditions for forests. Even though tree growing involves long-term investment, it promises high returns for those who ensure proper management structures and technical standards.

  • Planting of soft wood plantations for timber and poles

Production of round wood for timber from plantations has given an important alternative to indigenous timber in Uganda. There is also high  demand for electric and building poles.

  • Planting of soft wood plantation for pulp

Most of the paper products in Uganda are imported. With the healthy investment climate in Uganda and the potential to produce timber for pulp at lower costs, investing in paper industry is indeed an attractive investment.

  • Value added products from both hard and soft wood

Furniture: The demand for high quality furniture in Uganda is high.

Flooring and panelling: The construction industry in Uganda has expanded manifold over the years and the demand for good flooring is on a rise.

Veneer and plywood: Growing demand can be seen in Ply wood manufacture in Uganda.

Particle board mill from saw dust: The saw dust from most of the saw mills is  wasted and contributes to fires in forest reserves. A particle board mill will add much value to the saw dust.

Match factory: The timber not suitable for construction can be utilised through setting up match factories.

Pencil factory: A pencil factory is also another investment opportunity to trap the ever increasing demand from schools in line with the government policy on Universal Primary Education.

  • Tourism and recreation

Uganda's rain forests offer magnificent scenery and are hosts variety of   wildlife such as; mountain gorillas at Bwindi, forest birds, insects that give an ideal opportunity in eco-tourism. The Recreation Development Plan in the forest reserves by the Forestry Department offers opportunities for concessions.

  • Planting palm trees and processing of palm oil

Uganda has a potential for palm oil that can be tapped.

  • Planting for medicinal purposes. Medicinal plants such as the Neem tree have a very high potential in Uganda.

Investment Opportunities :

The fisheries sector presents opportunities for small and large investments. The following are some of the potential areas for investment in the Fisheries Sector:

  • Manufacture of Value Added Fish Products

The goal of improving the export value of the existing harvest can be accomplished by improving the net useable yield of the fish and increasing the value of the processed fish fillets. A re-processor friendly portion pack is the answer to obtain optimum freight and at the same time a higher value by preparing the traditional fillet into proportional convenient portions either in fresh or frozen form.

  • Local and Regional Cold Distribution Chain

Distribution of fish on the local and regional market to a large extent is done without refrigeration leading to post-harvest loss and deterioration. Premium markets such as hotels therefore often resort to purchasing directly from export processors. Since exporters lack retailing facilities, the buyers have to take responsibilities such as long time storage which could be avoided if a cold distribution chain existed. Entry into this sub-sector would require refrigerated trucks, cold rooms and a processing facility. Integrating a cold distribution chain with an existing chilling/freezing facility would reduce capital costs.

  • Dry/Smoked Fish

There is high demand for dry/smoked fish. Investment required to set up a drying facility low and with special spicing and cold smoking, premium price products can be produced guaranteeing high profits. The EU could be targeted as market for these products.

  • Production of Value Added By-products

There is potential for development and marketing of high value materials from fisheries by-products i.e. skins and carcass. The skins could be tanned and marketed as high value leather while both the skins and the carcass may be used as raw materials for gelatine and glue. There are also opportunities in fish oil and fishmeal production. In the European Union, fish oil prices have been rising sharply because of limited supply. There is therefore potential of exporting to these countries. Opportunities exist in the use of trimmings and neck meat for fish ball formulations for the Asian markets. Other value added products such as isinglass, pharmaceutical and other biochemical products can be manufactured from fisheries waste.

  • Fish Export Marketing :

There is great potential for investment in marketing of fish and fish products. The main task would be promotion, identifying buyers and negotiating favorable sales terms. Currently there is minimal promotion of fish and fish products from Uganda. Such promotion could significantly boost sales and guarantee profits for processors and the marketing firm.

  • Ornamental Fish :

The potential of marketing ornamental fish species is still to be realised. Fish especially of the Happochromis family have gained market in USA and the European Union as ornamental fish and potential for exploiting other families and markets is huge.

  • Aquaculture :

Aquaculture in Uganda is almost exclusively practiced at a subsistence scale. Lack of stocking material is a major setback. The species widely grown include mirror carp and various species of Tilapia. Fish diseases are not common and feed is available. There are opportunities for the culture of "Tillapine" species, the Nile perch, rainbow tout ornamental fish and catfishes. There are also opportunities for farming fish species like the Nile crocodile, the crayfish and bullfrogs and stockfish which have high export value. There is also potential for substantial investment for large-scale fish farming.