Saturday, July 4, 2009

FDI flows into Uganda drop 5.5 pct in 08/09

By Jack Kimball - KAMPALA (Reuters) - Foreign direct investment into Uganda fell by 5.5 percent to $735.4 million in 2008/09 due to reduced flows from the east Africa nation's traditional investors, the Uganda Investment Authority (UIA) said on Friday.

Uganda's growth has averaged more than 7 percent in the last five years. The finance ministry expects growth to slow to 6 percent in 2009/10 as fallout from the world-wide economic slump hits inflows and hurts outflows.

"In 2007/08 actual FDI was $778.4 million and in 2008/09 ... $735.4 million," said Maggie Kigozi, head of the UIA. "We can blame it on the financial crisis."

Uganda drew less investment from Britain, the United States and European countries, she said. The data, Kigozi said, was from the central bank and the statistics bureau.

The third biggest economy in east Africa's five-nation economic bloc after Kenya and Tanzania, Uganda's main sectors include coffee, services, other commodities and tourism.

FDI inflows nearly doubled from 2005 to 2006, and have averaged around $700 million annually since, according to government data.

The government estimates that some $500 million had been sunk into the burgeoning oil and gas sector by the end of last year.

The semi-autonomous body also said in a statement that planned investment in 2008/09 for 334 projects licensed hit $2.1 billion. Construction and transport and communication contributed more than 20 percent each to planned investment.