India-Uganda – Banking On Economic Opportunities [opinion]

The Republic of Uganda is emerging as one of the favorite investment hotspots in Africa.

In 2013, Uganda was reported as the leading recipient of Foreign Direct Investment (FDI) in the East African region. In sub-Saharan Africa, it ranked among the top 10 investment destinations. Interestingly, Uganda has witnessed the highest number of investment projects from India in 201314 as per the data released by Uganda Investment Authority (UIA).

India also emerged as Uganda’s leading trade partner in 2013, with the bilateral trade between the two countries crossing the $1bn mark. While both countries share certain similarities, India and Uganda have their own set of comparative aantages, which can turn out to be mutually beneficial.

Uganda is rich in natural resources including oil, gas and mineral deposits. The most recent is the discovery of oil in the Albertine basin. According to the ministry of Energy and Mineral Development, Uganda possesses approximately 3.5 billion barrels of oiland holds 350 billion cubic feet of gas in the Lake Albert region.

The ministry has also reported that the country is endowed with over 50 different types of minerals. Here lies the catch. Uganda and India can explore the possibility of partnering in the field of mineral exploration, mapping and testing services, with the background of growing a number of specialised research institutes and testing laboratories, run by India.

Research and development (RampD) forms the cornerstone of India’s improving productive capacities. RampD investments have been reported by India Brand Equity Foundation (IBEF) to have touched $42bn in 2013 – the eighth largest globally. At the same time, India’s engineering industry, which accounts for 63 per cent of the overall foreign collaborations, has bagged several overseas deals in exploration services, RampD and execution of energy projects.

Therefore, a bilateral engagement in this field will not only expand India’s outreach but will also enable Uganda to tap its underground wealth resources. Uganda’s favorable climatic conditions and fertile soils offer a conducive environment for natural vegetation and wildlife. However, low productivity in the agricultural sector were stated in Uganda’s National Budget Framework 201415 as one of the key challenges leading to food insecurity and malnutrition.

While on the trade front India has already implemented the Duty-Free Tariff Preferential Scheme (DFTPS) for least-developed countries, wherein Uganda is a major beneficiary, Uganda can invite India to chip in on its agro-processing and value addition. According to IBEF, at $30.5bn, the agricultural sector accounted for 6.8 per cent of India’s gross capital formation in 201213.

During the same period, the export share of ‘agricultural and processed food products’ was reported to have increased to 13.53 per cent from 10.5 per cent in 201011. More still, the gross domestic product (GDP) of both countries is largely driven by the services sector including tourism, information technology, infrastructure, construction, education, healthcare, and financial services.

Uganda and India may explore the possibility of mutually benefitting partnerships in such fields. Affordability, availability of specialised technology and accessibility describes the characteristics of India’s healthcare sector. The country’s pharma industry accounts for about 1.4 per cent of the global share in value terms and 10 per cent in volume.

India’s pharmaceutical exports stood at $14.84bn in the financial year 201314. No doubt, India’s exports to Uganda for retail medicines, medicaments and vaccines which account for the largest share of her export basket to Uganda have been increasing.

Similarly, in the field of information technology, India is considered a global leader in the delivery of IT and IT-Enabled Services (ITES) under the umbrella of its never-ending IT boom, which has left the world spellbound. When it comes to education and training, India possesses a world-class education infrastructure that runs renowned academic institutions. Rankings spell out the growing potential.

Seventeen Indian Institutes of Technology (IITs) are among the top 100 institutes in Quacquarelli Symonds (QS) Asia rankings 2014. Ten academic institutions of India have made a mark on the top 100 list of Times Higher Education – BRICS amp Emerging Economies Rankings 2014 – the world’s first global ranking of universities in BRICS and other emerging economies.

India continues to offer a lot of scholarship and training opportunities to Ugandan students and professionals in the fields of electronics, engineering, information technology, commerce, among others. For instance, under the ongoing African Scholarship Scheme, the Indian Council for Cultural Relations (ICCR) offers scholarships to 30 students from Uganda for pursuing college level and higher education in India.

The timing of such an engaged partnership can be no better – when Uganda’s national budget 201415 has just been announced and India has witnessed the formation of a new government after the 2014 national elections. In fact, Uganda has put its highest medium term expenditure allocations to energy and mineral development, education and health, among others. Therefore, it is an opportunity to invest and participate in each other’s development process.

The author works with the economic and commercial wing of the High Commission of India in Uganda (accredited to Rwanda and Burundi). These views are personal.

Source : The Observer

Leave a Reply

Releated

Uganda: Exports Rebound After Three Months of Decline

Export earnings have rebounded after three months of recording a decline. Earning, mainly from coffee, fish, flowers and cement, some of which had experienced some volatility, recovered during the period ended June to fetch Uganda growth of at least Shs172b. According to data from Bank of Uganda, Uganda exported goods worth $337m (Shs1.2 trillion) up […]

Uganda: MTN Borrowed Shs368.5b to Fund Licence Extension

Commercial banks in Uganda are expected to profit off the $100m syndicated loan advanced towards MTN Uganda to pay for its 12 year licence. In notes published along its financial results for the half year ended June, MTN revealed an increase in its net debt from Shs110b (R423m) in December 2019 to Shs367b (R1.6b) due […]