Uganda Investment Authority (UIA) has said the cumulative number of the planned jobs in the last 3 quarters totals to 23,055 of which 7,716 are being created by Domestic Direct Investments and 15,339 are being created by Foreign Direct Investments.
However, according to UIA, the numbers are significantly below target considering the investment licensed last financial year planned to create about 60,000 jobs. This shows a shortfall of close to 40,000 new jobs that will not be realized this year.
Lawrence Byensi, the Acting UIA Executive Director, said in Kampala that they expect a slowdown in implementation considering a number of investment owners were caught up in their home countries.
He added that various company staff were also caught up away from their homes and work, interruptions in the transfer of investment funds and negotiations in some joint venture projects were interrupted.
“The slowdown effects can be mitigated in the short and long run by providing more support to the existing investments to facilitate expansions and diversifications, as well as enhancing domestic investment sector.
“UIA is undertaking a survey on the impact of the COVID-19 on investments in order to further inform Government policy interventions.
“The survey will end on 15th May 2020. Preliminary feedback from most entities indicates that it is too soon for them to establish the full impact since the country and its trading partners have been under lockdown,” said Byensi.
Byensi said that according to the investors, they will be able to know the impact after they have established how the policy interventions will facilitate businesses to get back on their feet.
“This refers to sectors that have been as hard hit as tourism, transport, Manufacturing and agro-processing,” said Byensi.
An analysis of the investment data indicates that the reduction in job creation will not only be occasioned by the reduced or slow implementation caused by the COVID-19 but the type of jobs and investment funds required.
Fifty-two (52%) per cent of the projects licensed are in manufacturing and light manufacturing, while only 4% are in the agriculture-related industry.
A number of manufacturing firms are beginning to employ automated machinery hence requiring less manpower.
Existing and especially, domestic investors are better placed to invest in the labour-intensive industry like the agriculture sector for export and import substitution.
It is therefore imperative that Domestic Direct Investment is enhanced through Development Funds as has already been proposed according to Byensi.
UIA has a duty to provide aftercare and facilitation services to existing companies. Over the last quarter, UIA provided aftercare services to over 170 companies.
Seventy-nine (79) projects were monitored during the quarter to determine the status and level of investment. Out of these 79 projects, sixty-two (62) projects are operational, while 17 projects closed and/or are nonoperational.
The 62 operational projects are worth US$ 285.341million and providing employment to 4,129 people.
There has been an improvement in registered companies and planned values of the licensed projects were 75 projects worth US$ 302.6 million, For the last three quarters, from 226 licensed projects worth US$ 751.3 million..,
The Construction / Real Estate, Accommodation / Tourism and other Services sectors continue to constitute a higher percentage of licensed projects than the agriculture-related industry during the last quarter.
During the last quarter, the licensed companies planned to create 7,551 jobs, of which 1,428 were by DDI and 6,123 were by FDI.
Due to the precautionary measures undertaken by Uganda and countries globally to curb the spread of the COVID-19 pandemic, there has been a slow down on the response to the investment promotion activities of the Authority, as well as on the implementation of the licensed investments.
UIA envisages a reduction in the creation of jobs if the interventions under discussion by Government are not implemented.