Uganda’s competition for foreign capital is intensifying, but the United States says its investment proposition is built around more than the amount of money American companies bring into the country.
For US, the pitch increasingly rests on what happens after the capital arrives: local jobs, technology transfer, quality products, stronger supply chains and companies operating in a transparent business environment.
It is a proposition the US Embassy in Uganda is pushing as American policy shifts from a relationship traditionally associated with aid towards one increasingly focused on trade, business and investment.
US Chargé d’Affaires and Head of Mission in Uganda Mikael Cleverley says American investors see significant opportunities in Uganda, but transparency, integrity, respect for the rule of law and a level playing field remain important in attracting more US capital.
In this interview, Cleverley explains what US investors believe distinguishes American investment, the conditions investors look for, and how Uganda can position itself to attract more American capital.
He also discusses barriers facing Ugandan exporters, local value addition, technology transfer, governance, competition for foreign investment, and US travel advisories.
For American investors looking at Uganda and East Africa, what policies and business enablers is the US advocating?
It is no longer just aid; it is now trade, business, and investment. We are very engaged in the business world and deeply involved in Uganda across many different sectors.
We have an embassy full of highly motivated people working hard to advance our commercial diplomacy. As a country, we have policies designed to enable us to succeed in that commercial effort.
Ugandan businesses complain about tough market requirements, non-tariff barriers and changing trade policies when trying to enter US. How are you helping them navigate these hurdles?
As with trade between any two countries, there will be obstacles companies need to overcome. Ugandan exports to US increased by 50 percent last year. I think that is a good sign that whatever obstacles companies might perceive are surmountable.
When we talk about opportunities for doing business with US, we highlight what we call the ‘Three Cs’: capital, companies that operate with integrity, and commercial diplomacy.
We see great opportunities here. One example is vanilla, where US has supported development of the sector. At the beginning of our efforts, Uganda was the seventh-largest producer globally. Now it is number two.
That benefits the US through more affordable access to a diversified vanilla supply chain.
Ugandan vanilla farmers have also increased their yields from $300 per hectare to $900. These are the mutually beneficial commercial relationships we are trying to promote.
As US celebrates 250 years, how does its business model offer an advantage for Ugandans?
I think we both have complementary strengths. A US company may see opportunities to expand machinery sales here. From the Ugandan side, project managers need machinery that works, creating a mutually beneficial business opportunity.
Rather than buying equipment that needs replacement in five to seven years, they can invest in a Caterpillar that will still be running in 20 years and retain resale value.
They also get high-quality machinery that can accelerate project timelines. If they need after-sales support or a replacement part, they can get it the next day rather than waiting four to six months. What we hear from Ugandans is that this quality, after-sales support and partnership deliver mutually beneficial solutions.
Uganda strongly emphasises local value addition and processing. How do US mining and technology companies fit into that policy?
Our companies actively want to drive value addition here. When we look at value addition, we are not just looking at the product; we are looking at the people working on that product.
Take Mantrac, for example. There is only one expatriate among 70 employees. The rest are locally hired Ugandans who enter a structured system, receive excellent training, and enhance the quality of the local workforce. Look at companies such as Citibank; who is heading it? A Ugandan.
We are also deeply interested in technology transfer to strengthen the local market. For decades, we have invested not only in the workforce but also in institutions that support its health, backed by a $1.7b Memorandum of Understanding with the Ugandan government.
What conditions are important for attracting more US private capital into Uganda?
Our companies are well-governed entities that respect the rule of law. When you attract a US company, you attract a partner that contributes to a stronger economic environment, respects Uganda’s sovereignty, and promotes better overall business practices. We respect the sovereignty of any country to select its partners.
All we ask is that it be done in daylight, ensuring full transparency and a level playing field.
This is mutually beneficial because the best company with the best product can come forward, and the government can secure a partner that delivers projects on time.
Is there a relationship between democracy and a thriving business environment?
What drives the US economy forward is the democratisation of our business environment.
The government tries to create an enabling environment through laws and regulations that encourage entrepreneurship.
Companies can then tap into financial markets and different financial instruments, work with university systems and develop transformative technologies.
That is what I think of as democratisation of the economy: a human-centred economic growth model where individuals can succeed.
US travel advisory about Ebola remains in place. As head of the Embassy, what are your thoughts?
We have great minds in Washington evaluating the advisory constantly. They look at a variety of things.
We have full confidence in the Ugandan government and its response to Ebola. However, we have a situation in DRC where the problem is a rapidly growing Ebola outbreak in the region. As a government, we are analysing how to mitigate those risks.
We are constantly evaluating the situation, recognising that people need to travel to advance our business and commercial interests.
There are still things we can undertake through technology and virtual meetings. But the ideal is to have these restrictions lifted and return to normal.
Hopefully, that will happen soon.
China and Chinese companies are an increasingly important source of FDI in Uganda. Where does that leave the US?
The fact that so many countries are interested in doing business in Uganda speaks directly to the potential of this country. They recognise the economic opportunities, commercial potential, and people available to partner with. I view that as positive.
What I focus on is how we can be the best partner possible for Uganda.
One way is responding to President Museveni’s request that we pursue mutually beneficial economic opportunities, which include helping Uganda pursue its tenfold growth strategy, focusing on agro-industrialisation, tourism, mineral development, and science and technology.
We buy local content and hire locally. What sets us apart as US investors and as the US government is our interest in investing in Ugandans.
Take Asili Farms, one of the region’s largest grain producers for local consumption.
It works with 15,000 Ugandans who previously had much lower yields. Now they are benefiting, and there is more food security in the region. That is a model I think you simply cannot argue with.