INTERNATIONAL BUSINESS AND TRADE

FINAL OUTPUT

The Country of Uganda

Submitted to:

Sir Carlos Chiong

Submitted by:

Ducusin, Gwenivire

Eran, Hannabel E.

Nadera, Jaziell P.

Reyes, Arlen B.

Tuazon, Bianca Nicole C.

 I. Executive Summary

Uganda is located at East-Central Africa, west of Kenya, east of the Democratic

Republic of the Congo. It is slightly more than two times the size of Pennsylvania; slightly
smaller than Oregon. The climate there is tropical; generally rainy with two dry seasons
(December to February, June to August); semiarid in northeast. Uganda is a landlocked; fertile,
well-watered country with many lakes and rivers; Lake Victoria, the world's largest tropical
lake and the second largest fresh water lake, is shared among three countries: Kenya,
Tanzania, and Uganda. It is composed of estimate 47,729,952 people since 2023. According to
this population distribution map, the northeast of the country is the least populated; the
population density is relatively high when compared to other African countries. The majority
of the population is concentrated in the central and southern regions of the country,
particularly along the shores of Lake Victoria and Lake Albert.

There are around 65 different ethnic and tribal groups in the country. The Baganda
make up the largest such group, making about 16.5% of the total population. Many distinct
cuisines, including English, Arab, and Indian, have influenced Ugandan food. The Ugandan
diet includes a wide range of vegetables and tropical fruits including yams, cassava, bananas,
potatoes, etc. Common foods include fish, chicken, hog, goat, mutton, and beef. In the
country's distant, forested regions, bushmeat is eaten.

The kanzu, a robe in shades of white or cream, is the traditional attire for males in
Uganda. Ladies wear the gomesi, a dress with oversized, exaggerated shoulders and a sash
knotted around the waist, in eastern and central Uganda. Women in the northwest and west wear
the suuka. It is a long garment that is worn over the shoulders and waist. The Ugandan women
also dress in the busut, a floor-length garment.

Due to its ethnic variety, Uganda has a rich history of folk music and dance. The
country's musical landscape is dominated by the music of the Baganda people. The first type of
mainstream music is the Kadongo Kamu style, which developed from Ganda music.The first
popular music genre to originate in the nation is the Kadongo Kamu genre, which is derived from
Ganda music. The youth in metropolitan regions are big fans of western music genres including
rock and hip-
hop. The national sport of Uganda is soccer, or football. Around the country, it is played both
formally and professionally. Cricket is another well-liked game. Sports including basketball,
rugby, boxing, and athletics are also popular in Uganda.

The patriarchal aspect of traditional Ugandan society is evident. The standing of men is
typically higher than that of women. Women are underrepresented in other occupations despite
making up a sizeable portion of the agricultural workforce in rural areas. Men primarily hold the
upper positions in politics, administration, the civil service, etc. Both men and women are given
gender-based roles. Women are in charge of taking care of the children and home duties. In most
families, men hold the position of highest authority and have the last say in all decisions.

In Uganda, polygamous marriages are quite widespread. In compensation for the bride's
family giving up their daughter, men typically pay the bride price. The first wife frequently
maintains the position of highest power in polygamous families, second only to her husband.
Even though women are permitted to inherit property under codified modern law, customary law
typically reigns in most regions where women are frequently denied their inheritance rights. Due
to poor levels of family planning, most families have many kids. Uganda has a high infant
mortality rate. In Uganda, the rate of literacy is also low. Rural areas hardly ever have access to
high-quality education. Early school abandonment occurs as a result of kids helping out their
parents at work. While boys receive training from their fathers in numerous life and career skills,
girls tend to home duties and care for their younger siblings.

The market-based economy of Uganda is thriving, and it has one of the youngest and
fastest-growing populations in the world. Uganda is attracting more interest from foreign
investors thanks to its comparative advantages in agriculture and its projected recoverable oil
reserves of about 1.4 billion barrels, with first oil expected in 2025. Uganda is a low-income
country, mostly rural East African economy; COVID-19 has impacted economic progress and
poverty reduction in Uganda; falling oil prices have jeopardized earlier sector investments;
endemic corruption; abundant natural resources; strong female labor force participation but
overvalued.

II. Influence, Benefits, Advantages, And Disadvantages of Globalization to Uganda

 Uganda is primarily located in Central Africa wherein regions are divided into four
(northern, central, eastern, and western region) and subdivided into 111 districts. The national
language of Uganda is Swahili and English and the presence of pop and folk culture is greatly
acknowledged in their country. According to Uganda High Commission London, the United
Kingdom has invested in Uganda, and they are currently in the top 10 Uganda imports through
medicine, vehicles, electrical/electronic equipment, nuclear reactors etc. They receive benefits
from one another, Uganda gets the capital that they need while the United Kingdom benefits
from any economy that is performing successfully.

Globalization influenced Uganda to global brands like Microsoft, Toyota, Sony, Shell,
etc., which markets worldwide. In today’s generation, services and industry were the main
source of economic growth in Uganda especially in wholesale and retail trade, real estate and
education, and the industry revolving within the construction and manufacturing. The Russia
and Ukraine war may affect the inflation, but Uganda has increased the rate of economic
growth despite the price hike, because the growth has been benefited from increase in
investments from the oil sector and dividends from tourism and export diversification.

About two decades ago, Uganda has been experiencing challenges when it comes to
the rights of women in their country, especially in economic resources like health care, legal
protection, employment, housing, and schooling. African society has different beliefs in
marriage, men are the one who takes control over their relationship commonly with young
women in terms of physical and social aspect. According to UNAIDS (2013), there are 24.7
million people in Sub Saharan Africa who are living with HIV/AIDS because the access of
women to reproductive health services are limited due to gender inequality. This societal issue
about HIV denies women any support and cannot afford to go to clinics, especially those who
are poor. Currently, with the help of globalization, there is a significant reduction from 20% in
2002 to 2% in 2021 of mother-to-child transmission of HIV, through the support of CDC and
the U.S. President’s Emergency Plan for AIDS Relief (PEPFAR). According to Aceng (2021),
two decades ago, 30 out of 100 babies were born HIV positive, but today, only 3 out of 100
babies are positive of HIV.
 There is an issue in the global networks wherein worldwide networks of criminality
involve drugs, gun, and human trafficking, and the upsurge in terrorism. One of the challenges
that Uganda is facing is unemployment, due to dependence of people on technology, many
skilled workers were being taken for granted, and those highly educated people were leaving
the country to pursue better paying positions in more developed countries. This has been an
issue for many different countries, not just in Uganda. People were being affected by inflation,
either being unable to access food products or unable to afford the price increase. Uganda's
annual inflation eased for the fourth straight month to 9.2% in February 2023, down from
10.4% in the previous month.

III. Environmental Analysis

A. PESTLE ANALYSIS

POLITICAL
 Election characterized by irregularities and lack of transparency
 Government clampdowns on dissent and critical voices, as well as internet access and
media censorship
 Human Rights Watch World Report 2022 states the president used security forces to
"intimidate and suppress political opponents, critics, and human rights defenders."
 BTI Project 2022 Country Report notes the government has adopted measures to limit
freedom of expression and assembly, as well as restrict civil society organizations
 Government has failed to address issues of corruption, inequality, and poverty
 Restrictive laws such as the Public Order Management Act limit citizens' rights

High political stability provides a stable and friendly business environment with
predictable market growth trends. However, when there is political chaos, it deters the investors
and harms the stakeholders' trust in economic and consequent organizational performance.
Currently, Uganda The Constitution of Development. is present in different countries, each
having its own political tensions. Growing tensions and instabilities in the global political
environment can affect the Gold industry growth and limit the growth opportunities available
to Uganda The Constitution of Development.

Bureaucracy and corruption negatively influence the business environment. Operating

in countries with high corruption levels and weak law enforcement makes the business
environment increasingly unpredictable for Uganda The Constitution of Development. due to
jeopardized public trust on business organizations and overall political and economic structure.
The corruption can influence various business operations, ranging from licensing, contracting,
fraudulent deals to frequent lawsuits. Uganda The Constitution of Development. decides to
enter in markets with the corrupt economic, political system, it will threaten the organization's
sustainable development by destabilizing the society, harming the justice system and
endangering the rule of law.

ECONOMIC

 Uganda's economic outlook for 2022 is expected to be positive

 2021/2022 budget includes provisions for increased public investment

 World Bank has revised the forecast for Uganda's growth in 2021 to 3.2%

 Inflation expected to remain under control

 Current account balance is expected to remain in surplus, and foreign exchange

reserves expected to rise

 Government taking steps to improve infrastructure

  Challenges remain, such as diversifying the economy, reducing poverty and inequality,
tackling corruption, and managing the country's debt

The Uganda Economic Outlook has GDP growth accelerated to 7.5% year-on-year in the third
quarter of 2022, up from 6.5% in the preceding quarter, supported by a favorable base effect.
Fourth quarter data is fairly positive. Monthly economic growth was solid despite easing from
Q3, while the private-sector PMI averaged higher in Q4 than in Q3 and business sentiment
remained optimistic. The economy started 2023 on a strong footing, with the PMI rising to a
nine-month high in January. In other news, the budget framework for the fiscal year 2023–
2024 was announced in January. In line with the IMF’s Extended Credit Facility, the proposed
budget is set to narrow the fiscal deficit by increasing revenue and constraining expenditure,
which will cap domestic demand. Uganda inflation in January accelerated to 10.4%
(December: 10.2%). The increase was largely due to a base effect stemming from January
2022´s drop in transport fares. However, the Bank of Uganda (BoU) maintained the policy rate
at 10.00% at its 6 February meeting. Inflation will ease from current highs this year, but will
remain above the BoU’s 5.0% target.( According to the Focuseconomics,2023)

SOCIAL

 Uganda is rated as "Not Free" on the Freedom House Freedom in the World 2021
report, scoring 22 out of 100.

 Press is subject to censorship, and journalists are routinely harassed and intimidated.

 Freedom of assembly and association are restricted, and security forces often use
excessive force when dispersing peaceful protests.
  The rule of law is weak, and corruption is rampant.

 The judiciary is subject to political interference, and decisions are often based on
political considerations.

 2021 law grants the government extensive powers to regulate the internet.

 The economy is largely informal and heavily reliant on agriculture.

 Poverty and inequality are still high, unemployment is an issue, and the food crisis in
2021 affected 1.5 million people.

In the leadup to Uganda’s January 2021 elections, security forces beat and arrested
scores of opposition supporters and journalists, killed dozens, and disrupted opposition rallies.
Presidential candidates, Patrick Amuriat, of the Forum for Democratic Change and, Robert
Kyagulanyi of the National Unity Platform were among those arrested.

On January 8, police charged 49 National Unity Platform supporters with alleged

possession of ammunition belonging to the Ugandan army. On January 9, security officials
surrounded Kyagulanyi’s home and prevented people from entering or exiting for days,
including the United States Ambassador to Uganda, Natalie E. Brown. Media reported that
soldiers beat Francis Zaake, an opposition member of parliament, when he attempted to visit
Kyagulanyi. On January 18, security forces blocked access to Kyagulanyi’s party’s head office
in Kampala, allegedly to “counter any plans to violent demonstrations and mass riots.”

Two days before the January 14, 2021, elections, the Uganda Communications
Commission ordered internet service providers to block social media access. The next day, the
government shut down internet access across the country for five days. The authorities
restored partial access to social media websites, excluding Facebook, in February. During
election campaigns, the authorities restricted media coverage of opposition party candidates, in
some instances beating and shooting at journalists with rubber bullets.
 In February 2021, military police beat at least 10 journalists covering opposition
presidential candidate, Robert Kyagulanyi, as he delivered a petition to the United Nations
Office of the High Commissioner for Human Rights in Kampala over the abuses against his
supporters. The next day, the army announced that a military court had sentenced seven
members of the military police to two months detention in a military facility but provided no
details on its investigations or the military trial. (According to the Human right watch, 2023)

TECHNOLOGICAL

 Number of internet users have grown from 2.7 million in 2012 to 18.9 million in 2019
 Investment in fiber-optic networks increasing access to broadband services
 Public-Private Partnership digitizing government services and expanding access to
digital financial services
 Renewable energy sources such as solar power, hydropower, geothermal, and biomass
are being added
 Progress in digital infrastructure and renewable energy sources is expected to continue
in 2022, helping to spur economic growth and reduce poverty.

The rapid technological advancement and technological diffusion across the globe have
increased the importance of understanding technological factors during the strategic decision-
making process. A detailed analysis of the technological environment can help Uganda The
Constitution of Development. capture the technological trends to achieve certain business
advantages, such as- increasing profitability, boosting innovation process and enhancing the
operational efficiency. Following technological factors can influence the business performance
of Uganda the Constitution of Development.

The development of information and communication technologies has led towards the
adoption of innovative marketing techniques to enhance collaboration with customers. Use of
social media has become common in a modern business environment. Uganda The
Constitution
 of Development. can leverage the opportunities offered by social media marketing to improve
business performance. Technological trends can be used to start creative social media
campaigns for developing online brand communities.

LEGAL

 Six new bills passed by Parliament to increase transparency and effectiveness of the
financial system and strengthen anti-money laundering and countering the financing of
terrorism measures

 Money Laundering (Prevention) Act 2021, Counterterrorism and Anti-Money

Laundering Act 2021, Financial Reporting Regulations 2021, Financial Institutions Act
2021, Financial Investments and Securities Act 2021, and Financial Intelligence
Authority Act 2021

 Uganda Law Reform Commission is working to ensure the legal framework is up to

date and in line with international standards

 Expected improvement in the legal situation in Uganda for the following years

The Anti-Money Laundering (Amendment) Bill, 2022. To empower the Financial

Intelligence Authority (FIA) and other supervisory authorities to levy administrative penalties
for breach of the provisions of the Act and for related matters.

Uganda’s AML/CFT Mutual Evaluation Report (MER) was adopted in 2016. The
MER contains an assessment of Uganda’s AML/CFT legal and regulatory regime and
highlighted several matters that Uganda needs to address in its AML/CFT legal and regulatory
framework for Uganda to be considered compliant with the international standards on
anti-money
laundering, countering the financing of terrorism and countering the financing of proliferation
 of weapons of mass destruction (FATF Recommendations). ( The financial intelligence
authority of the republic of uganda,2023)

ENVIRONMENTAL

 72% of Ugandans report that their environment has become worse in the past five years

 Forests cover only 8.3% of the total land area in Uganda, far below the 10% target

 Deforestation is mainly caused by unsustainable timber harvesting, agricultural

expansion, and charcoal production

 32% of Uganda's population has access to improved drinking water sources

 Soil erosion is one of the main causes of land degradation in the country

 Air pollution levels in Uganda are twice the acceptable level

Ugandans rank deforestation as the most important environmental issue in their

community (cited by 48%), followed by trash and plastic disposal (22%). About one in 10 cite
pollution of water sources (11%) and human waste management (10%). Citizens’ prioritization
of deforestation and trash disposal as environmental problems varies widely across
demographic groups. Rural dwellers are far more likely than urban residents to cite
deforestation as most important (54% vs. 30%), while trash and plastic disposal is of greater
concern in the cities (36%) than in rural areas (16%) (Figure 4). Similarly, residents of
Kampala (69%) are more than twice as likely to prioritize trash and plastic disposal as their
counterparts in other regions (10%- 29%), while deforestation ranks low among their
environmental concerns (8%). On the other hand, deforestation is cited most often in the East
(65%) and North (55%), Uganda’s poorest regions. A possible connection between
deforestation and poverty is also supported by our
finding that concerns about deforestation increase with one’s experience of poverty, ranging
 from 40% among those with no lived poverty to 51% among those with high lived poverty. In
contrast, concerns about trash and plastic disposal decrease alongside economic status: The well-
off are more than twice as likely as the poorest to cite trash disposal as the top environmental
issue affecting them (33% vs. 15%). (According to Makanga Ronald Kakumba, 2022)

B. SWOT

STRENGTHS WEAKNESSES OPPORTUNITIES THREATS

• Abundant natural • Poor governance • Favorable • High levels of

resources and lack of investment climate unemployment
political
stability

• Favorable • Low levels of • Growing demand • Low levels of foreign

climate and soil literacy and for agricultural direct investment
conditions education products

• Strong and growing • High levels of • Growing domestic • Volatile commodity

economy poverty and food and regional demand prices
insecurity for power

• Developing • High level of • Growing demand

infrastructure corruption for minerals and  High cost of
other natural electricity
resources
 STRENGTHS WEAKNESSES OPPORTUNITIES THREATS

• Growing • Limited access • Growing demand • Poor access to finance

tourism to adequate for tourism
sector healthcare services

•Low cost of • Poor quality of • Potential for • Dependence on

production public services developing foreign aid
Information and
Communication
Technology

• Rich cultural • High levels of • Potential for • Dependence on external

heritage crime expanding financial markets
services

• Rich human • Weak • Large and growing • Political instability

capital capital youth population
markets

• Strategic • Dependence • Potentially large • Adverse weather

geographic location on foreign markets in the conditions
aid neighboring
countries

Strengths
 The extent of land affected by degradation in Uganda ranges from 20% in relatively flat
and vegetation-covered areas to 90% in the eastern and southwestern highlands. Land
degradation has adversely affected smallholder agro-ecosystems including direct damage and
loss of critical ecosystem services such as agricultural land/soil and biodiversity. This study
evaluated the extent of bare grounds in Nakasongola, one of the districts in the Cattle Corridor of
Uganda and the yield responses of maize (Zea mays) and common bean (Phaseolus vulgaris L.)
to different tillage methods in the district. Bare ground was determined by a supervised multi-
band satellite image classification using the Maximum Likelihood Classifier (MLC). Field trials
on maize and bean grain yield responses to tillage practices used a randomized complete block
design with three replications, evaluating conventional farmer practice (CFP); permanent
planting basins (PPB); and rip lines, with or without fertilizer in maize and bean rotations. Bare
ground coverage in the Nakasongola District was 187 km2 (11%) of the 1741 km2 of arable land
due to extreme cases of soil compaction.

Weaknesses
Corruption hinders economic, political, and social development, especially in less-
developed countries, and has a disproportionate impact on the poor and most vulnerable,
increasing costs and reducing access to services, including health, education, and justice.
Corruption worsens poverty and aggravates inequality as resources meant for the poor and the
underprivileged are diverted to line the pockets of the corrupt (Addah, Jaitner, Koroma, Miamen,
& Nombora, 2012). In his State of the Nation address in 2019, President Yoweri Museveni called
corruption “Public Enemy No. 1,” the remaining obstacle to Uganda’s development (State House
of Uganda, 2019; Daily Monitor, 2019a)

Opportunities
Tourism is one of the leading foreign exchange earners to Uganda’s economy and plays
an important role in the livelihood of many. Uganda is experiencing growth in tourism numbers
having registered a growth in excess of 1 million tourists in the last decade from 600,000 in 2008
to 1,700,000 in 2017. Of these 300,000 visited the National parks in 2017 showing the high
potential these areas have in attracting visitors. The increase in the visitor number to the parks is
attributed to highly diversified nature products of the national parks such as a wide range of
animal species, a variety of birds, natural forests and water tourism.

Threats
The high cost of electricity connections, since the removal of the free Connections Policy
in December 2020 which had been implemented for about two years and had achieved close to
the target of 300,000 new electricity connections per year, new electricity connection rates have
greatly reduced as domestic connection fees increased to over UGX 720,883 for single phase no-
pole service in addition to UGX 41,300 inspection fees. This is a hindrance to increased power
consumption as the electricity customer growth rate is low.

Economic crisis and shocks – community hit hard: the economic crisis especially because
of the COVID-19 pandemic has led to a reduction in investments where returns are uncertain and
long term. Furthermore, investments in R&D which would provide new knowledge and increase
productivity has been limited by these investments.

IV. International Trade Policies, Tax, And Tariff System

A. Uganda’s International Trade Policies

Uganda has a natural resource-rich, market-based economy and one of the world's
youngest and fastest-growing populations. Uganda is attracting an increasing number of foreign
investors due to its comparative advantages in agriculture and its estimated recoverable oil
reserves of over 1.4 billion barrels, with the first oil expected in 2025. After nearly two years of
partial and complete COVID-19 lockdowns, Uganda's economy fully reopened in January 2022.
The economy was severely impacted by the stringent restrictions, which included a curfew at 7
p.m. and the closure of public schools. Uganda's economy grew by 3.8% during the fiscal year
(FY) 2021 to 2022, which ran from July 1 to June 30. According to The Uganda Bureau of
Statistics (UBOS), Uganda's growth for the previous five years averaged 5.3% prior to the
pandemic. The slight financial recuperation from 3.5% in FY 2020 to 2021 was to some extent
because of the resuming of the economy yet in addition lower than the 4.3% prior anticipated.
According to UBOS, as of May 2022, headline inflation was 6.3% and food inflation was 13% as
a result of the rise in fuel and commodity prices and the depreciation of the Uganda Shilling
against the dollar. (International Trade Administration, 2022)

In FY 2021 to 2022, the industrial sector, which accounted for 26.8% of the economy,
was the primary driver of growth, with a total GDP of $45.7 billion (5.3%). Meanwhile, the
agriculture sector expanded by 4.3 percent, employing 68% of the workforce and accounting for
24.1% of GDP. The subsistence or smallholder production is the primary focus of the agriculture
industry. The World Bank estimates that approximately 16.9 million people, or 41.1% of
Uganda's population, live below the poverty line of $1.90 per day. In FY 2022/23, Uganda
intends to spend $12.8 billion, approximately 7.6% more than in FY 2021 to 2022. The Parish
Development Model (PDM), a flagship program for reducing poverty, and increased spending on
education account for the majority of the increase. In December 2021, Uganda's debt-to-GDP
ratio increased to 49.7% as the Ugandan government increasingly relied on domestic borrowing
and experienced lower tax collection than anticipated. The International Monetary Fund (IMF)
estimated in June 2022 that Uganda's debt to GDP would reach a peak of 53.2% in FY 2021 to
2022, exceeding the generally accepted risk threshold of 50% set by the Ugandan government.
(International Trade Administration, 2022)

B. Uganda’s Trade Barriers

Although bureaucratic inefficiencies, high transportation costs, corruption, and an

increase in counterfeit consumer goods drive up costs for foreign businesses, Uganda has few
formal trade barriers. The URA forces an ecological Expense on vehicles more established than
eight years, and, in 2018, the public authority sanctioned a restriction on bringing in vehicles
more seasoned than a long time from date of production. Beer, soda, batteries, cigarettes, and
import restrictions have been gradually lifted in Uganda in recent years. There is essentially a de
facto ban on the import of beef, chicken, and dairy products into Uganda due to the lengthy
paperwork and slow processing. Additionally, basic foodstuffs like flour, sugar, and food-grade
oils are subject to tariffs in Uganda. (International Trade Administration, 2022)
 C. Uganda’s Tax and Tariff System

Under the terms of the Protocol on the Establishment of the EACU, which became fully
operational in January 2010, Uganda, Kenya, Tanzania, Rwanda, and Burundi have adopted a
three-tiered duty structure for imports from outside the East Africa Customs Union (EACU).
Burundi is the only country in the group. Most finished goods are subject to a duty of 25%,
while intermediate goods are assessed a duty of 10%. Capital goods and raw materials, excluding
foodstuffs, may still be imported duty-free. Imported goods are subject to a 15% value added tax
(VAT) and a 15% withholding tax that cannot be refunded. All foreign goods and services are
effectively subject to a 33% tax when these taxes are taken together. A 1.5% infrastructure tax is
also levied on imports to help finance the development of railway infrastructure.

Chocolate, tomato sauce, mineral water, and processed meat, among other items that
Uganda currently imports from the United States, saw their import duties increased as a result of
the EAC agreement. Uganda is negotiating with Kenya and Tanzania to define "raw materials"
for certain manufactured goods that are crucial to Ugandan industries. The heads of state of the
EAC member countries agreed to establish a common market for Kenya, Tanzania, Uganda,
Rwanda, Burundi, and South Sudan when they signed the Common Market Protocol in
November 2009. The East African Monetary Union, which is expected to be fully operational by
2023, is supposed to set the stage for the Common Market, which is being implemented
gradually. Uganda is also a member of the Common Market for Eastern and Southern Africa
(COMESA), a free trade area with 19 countries that aims to lower import tariffs among its
members. (International Trade Administration, 2022)

V. Comparison to other countries

 Uganda and Ethiopia

These are the two countries in Africa with distinct economic and business policies. Here
are some similarities and differences in their economic international business activities and
policies:

Similarities
 Both countries are members of the African Union (AU), the United Nations
(UN), and the World Trade Organization (WTO).
 Both countries are among the fastest-growing economies in Africa, with a focus
on attracting foreign investment.
 Both countries have implemented policies to attract foreign direct investment
(FDI) by creating investment-friendly environments and providing incentives to
investors.
 Both countries have a large population and a young workforce, which can be an
advantage for economic growth and development.
 Both countries have a high potential for agriculture, which is a major sector in
their economies.

Differences
 Uganda has a more liberalized economy, with fewer restrictions on foreign
investment and a greater emphasis on private sector development. Ethiopia, on
the other hand, has a more state-led economy with state-owned enterprises in key
sectors such as telecoms, transport, and energy.

 Uganda has a higher ease of doing business ranking compared to Ethiopia, with a
ranking of 116 in 2021 compared to Ethiopia's ranking of 159.
 Uganda's main exports include coffee, tea, and fish, while Ethiopia's main
exports are agricultural products such as coffee, oilseeds, and flowers.
  Ethiopia has implemented an ambitious industrialization strategy, with a focus on
developing the manufacturing sector through export-oriented policies, while
Uganda has not placed as much emphasis on industrialization.
 Ethiopia has a unique calendar system, which differs from the Gregorian calendar
and may affect business operations and scheduling. Uganda uses the Gregorian
calendar.

In summary, both Uganda and Ethiopia are actively promoting foreign investment and
economic growth, but their approaches and policies differ in certain areas. Uganda has a more
liberalized economy and a higher ease of doing business ranking, while Ethiopia has an
ambitious industrialization strategy and a more state-led economy.

VI. Establishing a Business in Uganda

A. Ease of Doing Business in Uganda

According to the most recent annual World Bank ratings, Uganda's ease of doing
business ranks 116 out of 190 economies. Uganda moved up one place from 127 in 2018 to 116
in 2019. Others are enforcing contracts, transacting internationally, paying taxes, and resolving
insolvency. Employing workers is another area that is measured but not included in the rankings.
According to the World Bank's Doing Business Report 2020 study, developing nations are
catching up to developed nations in terms of how easy it is to conduct business. However, the
gap remains substantial.

B. Summarized Systems and Processes of Establishing a Business in Uganda

Running a business in Uganda is as easy and possible as it is hard. When you abide by
the legislation of registration laws from day one, it should be a smooth sail.

How to Register a Local Business/Company in Uganda

 1. Search for a business name from the URSB, and this may take up to 30 minutes to
receive a notification or confirmation.
2. Name reservation; take it for reservation after selecting your business name. This
process may take up to 1hour. Remember, name reservation takes only 30days to expire
or before starting the registration process.
3. Company registration; registration process requires you the following documents;
memorandum of understanding and article of association with board resolution signed on
by a lawyer, company forms (this one you can pick from URSB or download online), and
postal address. The cost for this depends on your company's share capital.
4. Certificate of incorporation; when you submit relevant documents, the process may
take up to 3-7days to pick up your certified copies and certificate of incorporation.
5. Obtain Tin; apply for tax invoice number from Uganda revenue authority; this can be
done online or by submitting your certified documents containing a third party to URA’s
offices.
6. Apply for a trading license from the local municipal authority; note that this one
expires on 31st December of every year.
7. Register with NSSF (National Social Security Funds). Here, you need to take employer
forms and employee forms for registration, and this may take up 1-7days and cost-free of
charge. Note that NSSF is for all companies registered as private or limited by share
capital.
8. Copies of original national identity cards, passport photos, and signatures for directors
and secretaries. Note; signatures that appear on registration documents should be similar
to those that appear on their national ids.
9. Email address and contacts for your company,
10. Get a company seal or stamp for your company from Posta Uganda.

How important is it to register your company under URSB?

● First, it helps to gain legal documents like a certificate of incorporation and postal
address that might help you obtain financial loans from any financial institution.
● URSB acts like an umbrella for your business name by acquiring a trademark logo/brand.
● Business formalization creates more employment opportunities through business
expansion.
 ● Obtains better marketing strategies and advertising opportunities for increased customers
through domestic and foreign markets.
● Boost your level of competitiveness in the regional market with your foreign competitors
in the same race.

C. Factors to Consider in Doing Business in Uganda

● High Levels of Corruption

Uganda fell two places from its previous position on the TI 2021 Corruption Perceptions
Index, which ranked 180 countries. Corruption and fraud involving land are common, especially
given how complicated land laws make it difficult for foreigners to own land and cause frequent
land disputes. Grand-scale theft of public funds, petty corruption involving public officials at all
levels of society, and widespread political patronage systems are all characteristics of Ugandan
corruption. Elite corruption in Uganda is carried out through a patronage system that has been
exacerbated by foreign aid. Corruption is used to gain support and loyalty in order to keep
officials in power, and public procurement is one of the more recent forms of corruption due to
the lack of transparency with government transactions. Aid has been providing the government
with a lot of resources, which contributes to the corrupt practices that are taking place in the
country. The most common way of giving gifts for something in return has forever been a
component in Ugandan custom. In the past, this was common and not considered to be illegal. It
is not possible to completely eradicate this practice of patronage from politics in Uganda
overnight.

● Lack of Specialized Skills

. Improving the quality of basic education is a necessary foundation for the acquisition of
new skills and, ultimately, productive employment. However, most of the Ugandan youth do not
complete their elementary education. Uganda has general enlistment in essential training yet one
of the least essential cycle endurance rates. This is connected to high rates of dropout,
particularly between grades 5 and 7, which have resulted in low rates of transition from primary
to secondary education overall. However, in order to truly effect lasting change, we need to make
significant investments in skill development. In Uganda, employers in both the formal and
informal sectors claim that productivity gains are constrained by a lack of managerial, social-
emotional, digital, and entrepreneurship skills as well as soft skills. Uganda was ranked 159 out
of 189 countries in the UNDP's 2020 Human Development Index. Even though the adult literacy
rate in Uganda is 76.5%, primary school dropout is 64.5%, and tertiary enrollment is only 5%.
Per the Worldwide Work Association (ILO) in 2019, 73% of Ugandan specialists missed the
mark on the degree of training expected for accessible positions. Furthermore, according to
UBOS, employers have stated in surveys that university graduates lack basic technical,
managerial, and communication skills.

● Political Uncertainty

The government's commitment to fostering a stable and investor-friendly environment is

questioned by rising political repression. Foreign investors and businesses face additional danger
as a result of an uncertain political environment over the medium to long term. After 36 years in
power, President Museveni began a five-year term in May 2021 after being declared the winner
of the widely criticized general elections that took place in January 2021. The races incorporated
a five-day complete web closure and a four-week block via virtual entertainment stages - and as
of July 2022, Facebook stays hindered in Uganda. Security services have continued to routinely
detain political dissidents since January 2021. In August 2021, the government suspended
several of Uganda's most prominent environmental and human rights non-governmental
organizations.

D. Pros and Cons of Establishing a Business in Uganda

PROS

● Growing Free Market Economy

 Uganda has averaged 4.7 percent GDP growth over the past five years, and projected to
average six percent growth over the next two years. Uganda boasts a market-based economy rich
in natural resources and one of the fastest growing and youngest populations in the world. With
comparative advantages in agriculture and estimated recoverable oil reserves of over 1.4 billion
barrels, with first oil expected in 2025, Uganda is seeing increasing interest among foreign
investors.

● Substantial and Rapidly Growing Consumer Market

Uganda’s population of 43 million people is growing at a rate of three percent per year,
with half of the population under the age of 15.

● Dynamic Agricultural Market

Uganda has abundant fertile land, favorable weather, and bimodal production throughout most of
the country.

● Emerging Oil Industry

Uganda has an estimated 1.4 billion barrels of recoverable oil, and the government
projects oil production will begin in approximately 2023. EAC Customs Union: Uganda’s
membership to the EAC Customs Union enables duty free exports to the 160 million-person
EAC market, as well as duty free exports of a wide range of goods to the United States via the
AGOA and the Generalized System of Preferences.

CONS

● Infrastructure

Uganda's framework, especially its frameworks of streets, rail, power and water is
somewhat poor. In any case, as of late the public authority has committed somewhat enormous
assets to their improvement in planning both for the East African Normal market and the creation
of oil.

● Cost of Energy

The issue of electricity prices and availability persists. Over eighty percent of the country
does not have electricity from the grid. New hydroelectric dams and power stations are being
built to take steps to reduce this.

● Affordable financing

Another obstacle to doing business is a lack of readily available financing. Most loans are
short-term and have interest rates between 15 and 24 percent. There is little liquidity available
for loans that are more than three years old, in addition to high interest rates.

● Counterfeits

Legitimate businesses face a significant obstacle in the form of the illegal sale of
counterfeit goods into Uganda. While counterfeits are becoming increasingly sophisticated,
public awareness is low. Furthermore, implementation specialists are unfit to battle this.

● Getting Paid – Terms of Payment

The market depends heavily on credit. In Uganda, payment arrangements can be made in
a variety of ways. 90 or 120 days are the most common payment cycles. For large pieces of
capital equipment, extended credit terms are frequently essential to a project's success. A
confirmed, irrevocable letter of credit drawn on a reputable bank is the best method of payment.
Be wary of fraudulent cheques if you pay with an order. Quote amounts in Uganda Shillings to
avoid potential losses brought on by fluctuations in the exchange rate. However, quotes for
foreign goods are also
provided in dollars. The Companies Act governs companies, which are registered as limited
liability companies in the same way as in 1 and 2 above.

● Getting Paid

Cash is typically used to pay for consumer goods by retailers in Uganda. However, the
most common method of payment for exporters of capital goods, machinery, and services is wire
transfer. Ugandans may attempt to pay by check, but the growing number of fraudulent checks
makes this a very risky option.

● The banking system

The financial framework has consistently improved and is steady and very much
promoted. The Bank of Uganda, 25 commercial banks, numerous micro-deposit institutions, and
development banks are all part of the system.

● Foreign exchange controls

There are no controls on foreign exchange that hinder legal trade.

● Project Financing

The International Monetary Fund (IMF), the World Bank, the African Development
Bank, and several European institutions are among the multilateral organizations in Uganda.
Bilateral donors and/or international organizations provide funding for major infrastructure,
health, education, and development projects.

VII. International Business Strategy & Structure of the Country

 To successfully extend their customer base and boost their profitability through
internationalization, businesses must invest the time and resources necessary to comprehend
global market prospects and select the most effective international business methods. A globally
standardized and instantly recognizable brand. With economies of scale, processes are made
more efficient and management is consolidated. Reduce expenses by centralizing and
streamlining activities. Little formal trade obstacles exist in Uganda; but, bureaucratic
inefficiency, high transport costs, corruption, and an influx of counterfeit consumer goods
increase expenses for foreign enterprises. A competent international business strategy can aid
Uganda in overcoming obstacles in its trade and could lead to a more developed economic
sector. In economic terms, there is greater interdependence among countries, which has in some
manner led to the interconnection of international markets, which promotes the openness of
global markets.

VIII. Conclusion and Recommendation

The researchers concluded that political will is necessary to build a strong foundation, to
execute solutions in accordance with transparency, competency, and accountability within
Uganda’s government. How a leader handles a country reflects the progress of the economy, and
how opportunities and threats are being recognized. Uganda must focus on improving their
weaknesses in terms of poor governance, poverty and low level of education, and weak capital
market because this will promote a better discussion in raising awareness about Uganda's current
situation in different aspects of globalization. Experiences from Uganda and other nations must
be shared at both the national and international level in order to create effective solutions. The
government must utilize the opportunities coming in their country like the growing demand of
their natural resources, agricultural products, and tourism services and use these strengths to
build a strong and growing economy. More awareness of globalization needs to be created in
Uganda, through formal and informal channels of communication and education. This will help
generate more debate, especially among stakeholders and at the grassroots level, and help define
Uganda’s place in a globalized world.

The researchers also recommend the following based on the gathered information:
1. Uganda must enhance its business competitiveness to make any mark economically.
Uganda could be much higher in growth rate if it empowers the private sector by creating
an environment where starting and doing business is easy, efficient and competitive.
2. Significant resources must be allocated to improving Uganda's human capital
through improved healthcare and higher-quality education.
3. It is important to embrace the chances presented by technology. There is a need to
adapt new technologies to close the knowledge gap in agricultural technology because
agriculture is essential for welfare, food security, employment, growth, and foreign
exchange profits.
4. Uganda's large resources of unskilled labor require more education and skill
development. This will lessen the effects of more rapid technology use.
5. Uganda must establish powerful organizations that can effectively represent its
citizens and can negotiate for chances brought up by globalization.
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