Uganda: Economy and Development Cooperation

Uganda has become a stabilising political force in East Africa in recent years. The country's economy is growing and is above the average for sub-Saharan Africa. With a GDP of over 40 billion US dollars, Uganda is considered a promising market in the region with a key strategic role. Uganda serves as a trade hub for South Sudan, Eastern Congo (DR Congo) and Rwanda. In the private sector, growth industries include agriculture (development of value chains), IT and telecommunications, infrastructure, energy and tourism.

A country with economic power

With about 41 million inhabitants, Uganda is a comparatively large domestic market in Africa, whose high population growth of about 1.3 million people per year ensures increasing demand for goods and services. From the capital Kampala, companies can also serve the eastern part of Congo (DR) as well as South Sudan. The government, re-elected in 2021, promises political stability until 2026.

There are business opportunities for companies from Europe in the following sectors:

  • Construction sector: Contracts in the context of infrastructure and house construction projects. Experts expect that the international donor community will increasingly tender for infrastructure projects for energy, water and transport.
  • Energy, water/wastewater: More government tenders, some private procurement. In Uganda, energy demand will increase significantly in the coming years, which will require power plant and grid expansion; alternative, renewable energy sources (wind, photovoltaic and geothermal energy) as well as facilities for energy conservation will play an important role. The water supply and sanitation sector also benefits from numerous donor-funded measures. One focus is the expansion of water supply in the megacity of Kampala.
  • Health: The Ugandan health sector is considered to be a high-potential growth market. This is mainly due to the rapidly growing middle class, which can afford more expensive medical treatments. The largest buyer in the medical sector is the state.
  • Agriculture and food industry: Money flows primarily into the processing of food such as milk or fruit juices, into chicken farms and into fish production at Lake Victoria. Coffee, tea, wood and the niche product chia seeds are grown for export.

German development cooperation with Uganda
Despite steady economic growth, the living conditions of large parts of the generally very young population have improved only slightly. Uganda is one of the cooperation countries of German Development Cooperation, with which Germany works closely on the basis of intergovernmental agreements. Germany is one of the most important donors to the East African country and thus also contributes to achieving the 17 Sustainable Development Goals (SDGs) of the United Nations. During government negotiations in November 2018, Uganda was newly pledged 79.5 million euros by the German government for development cooperation in 2018 and 2019. Added to this are funds from the BMZ special initiatives "One World without Hunger" (28 million euros) and "Fighting the Causes of Flight - Reintegrating Refugees" (30 million euros).

Cooperation focuses on the following priority areas:

  • Agriculture and rural development
  • Renewable energies and energy efficiency

In addition, Germany promotes and advises the Ugandan Government in the area of good governance (public finance reform, human rights, civil society, anti-corruption). Furthermore, the Federal Ministry for Economic Cooperation and Development (BMZ) supports programmes for refugees from South Sudan in northern Uganda.

Development cooperation with
The matchmaking platform is one of the many measures of German development cooperation. The focus of is on attracting businesses to participate in development cooperation projects, from which all partners benefit: the companies, by opening up new and lucrative markets for their products and services in Africa, South America or Asia, for example, and contributing to sustainable development, and the developing countries, which profit from the know-how and/or the investments.

Discover the profitable and at the same time sustainable business opportunities of German development cooperation in Uganda here.

Copyright: Keith Kasaija, Unsplash, 2022

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