Uganda is a new entrant in the Ernst and Young top 10 Foreign Direct Investment (FDI) recipients in Africa in 2013, an indication of the country’s strong position in attracting investment. In 2013, both West and East Africa surpassed North Africa for the first time according to the report titled “EY’s attractiveness survey Africa 2014; Executing growth.” The report noted that Uganda has had solid economic growth and a rapidly expanding population as some of its appealing factors. According to the report top sources of foreign direct income into Uganda in 2013 were Kenya, the UK and India. “One multinational that has recently increased its presence in the country is SAB Miller, which opened its second brewery in Uganda in 2013. Oil fields and the agricultural sector in Uganda are also attracting significant investor attention,” the report notes. The report noted that in 2013, the number of new FDI projects in Africa declined for the second consecutive year, by 3.1% leading to lower job creation resulting from FDI projects largely due to political uncertainty in North Africa.
Despite the lower number of projects, the monetary value of capital investment into Africa grew by a healthy 12.9%, with a higher average project size of US$ 70.1m (sh175b) in 2013, from US$ 60.1m (sh150b) the year before. FDI projects into Kenya increased by more than 40%. In 2013, Kenya attracted the second-highest number of FDI projects, only second to South Africa. Increasingly, investors have been targeting Kenya as a springboard to growing East African consumer markets. Kenya’s economy benefitted from the recent discovery of oil, the country’s large, skilled and youthful population and the building of a US$ 14.5b (sh36 trillion) information technology hub, called Konza Technology City, outside Nairobi to target the growing number of software developers. Tanzania was tipped for recently discovering gas reserves which are propelling investor interest.