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					THE FDI PROCESS AND PROCEDURES AS
   COMPARED TO CDM IN UGANDA




         PRESENTATION BY
        GODFREY SSEMAKULA
       INVESTMENT EXECUTIVE
        UGANDA INVESTMENT
            AUTHORITY


                              1
UGANDA INVESTMENT AUTHORITY


 The UIA was established by an Act of Parliament,
   the Investment Code, 1991, with the following
   main objectives: -
  To promote, facilitate and monitor investment
    in Uganda
   To provide advisory services to Government on
    policies which affect investment



                                                     2
      UIA’s Vision and Mission
   Vision
    “Make Uganda the leading Investment Destination”.
   Mission
    “Make a significant and measurable contribution to
    Uganda’s development process by promoting private
    Investment”.
   Expected Results
      Increased FDI
      Increased Tax Revenue
      Creation of more Jobs (Better Purchasing Power)
      New Technology
      Increased Exports & Import Substitution
      GDP Growth
                                                    3
     SOME UIA ACHIEVEMENTS
                   Cummulative Value of Planned and Actual Investment 1991-01

                6,000

                5,000
Value (M US$)




                4,000

                3,000                                                    Cum. Planned Investment
                                                                         Cum Actual Investment

                2,000

                1,000

                   0
                     91

                     92

                     93

                     94

                     95

                     96

                     97

                     98

                     99

                     00

                     01
                   19

                   19

                   19

                   19

                   19

                   19

                   19

                   19

                   19

                   20

                   20                     Year

                                                                                                   4
       SOME UIA ACHIEVEMENTS

                        Cummulative Planned and Actual Employment

               200000
               180000
               160000
               140000
No. Employed




               120000
                                                                                                     Cum Planned Employment
               100000
                                                                                                     Cum. Act ual Employment
                80000
                60000
                40000
                20000
                   0
                        1991
                               1992
                                      1993
                                             1994
                                                    1995
                                                           1996
                                                                  1997
                                                                         1998
                                                                                1999
                                                                                       2000
                                                                                              2001
                                                       Year

                                                                                                                               5
UIA ACHIEVEMENTS


                                                                 TEN MAJOR FDI COUNTRY
  OWNERSHIP OF PROJECTS LICENSED (1991-2002)                         SOURCES (1991-2002)

                                                               1.    United Kingdom
                                                               2.    Kenya
                                                               3.    India
     LOCAL                                                     4.    Canada
                           FOREIGN
      35%
                             41%               FOREIGN         5.    United States of America
                                               JOINT VENTURE
                                               LOCAL           6.    Japan
                                                               7.    South Africa
              JOINT                                            8     Norway
             VENTURE                                           9     Egypt
               24%                                             10.   Mauritius


                                                                                                6
FDI inflows to Uganda (1989 – 2002)


Year                  FDI m$   300
  1989/94 (avg)       23
                               250
  1995                121
  1996                121      200

  1997                175      150
  1998                210
  1999                222      100

 2000                 254       50
 2001                 229
                                 0
 2002                 275            FDI (m US$)

   Source: WIR 2002, UNCTAD
                                                   7
PROCEDURES FOR FDI
DOCUMENTS AVAILABLE FOR INVESTORS

•   Basic Country Data
•   Macro-economic data
•   Outline of Investment opportunities
•   Business Registration/Licences (Procedures)
•   Business Costs Guide
•   Tax Structure
•   Visa and Work Permit Requirements
•   Information for visitors
•   List of Service Providers e.g. Lawyers, Auditors,
    Accountants, etc.
                                                        8
 Documents that an Investor
 Submits:
• Filled UIA Application Form

• Certificate of Incorporation

• Articles and Memorandum of Association

• Business Plan

• Technical Drawings if any

• Feasibility Study if already done
                                           9
   Assistance Given to an
   Investor by UIA
• Securing secondary Clearances

• Recommend to Govt investor friendly Policies

• Provide information on investment matters in Uganda

• Securing Land and Work Permits

• Securing utilities e.g. telephone, water, electricity



                                                          10
   Evaluation of Investment
   Proposals
Issues Looked at from the Application Form:

• Name and Address of the proposed Enterprise
    - Its Legal Form
    - Its Bankers
    - Name, address, Nationality and shareholding
      of Directors.

• Nature and Location of the Proposed Business

• Proposed capital structure

• Proposed Employment                               11
   Issues Looked at from the Application
   Form Contd:


• Qualifications, experience, nationality of Mgt and Staff

• How Public Health and Environment will be protected
   - type of waste products to be generated
   - steps to capture, treat and dispose of waste products.

• Capacity of the project to contribute to:-
   - Generation of new earnings or Foreign Exchange
   - Utilisation of Raw materials, supplies and services
   - New technology or upgrading of indigenous
     technology
   - Socio-economic contribution
                                                           12
 Conditions on the Licence
Usually the licencing takes 2-5 days but these
conditions are put on the Licence:

• Maintain proper Financial records, returns, samples
  and data on the operations of the business.

• Permit UIA staff or agents access to the enterprise

• Take steps to ensure that there is no injury to the
  ecology or environment.

• Carry out an EIA before implementation
                                                    13
  Minimum Requirements:

 • US$ 100,000 for a Foreign Investor
 • US$ 50,000 for a Local Investor

Ensuring adherence to Contractual agreements:
• UIA or its Agents do regular monitoring
Handling of Disputes:
• Centre for Arbitration and Dispute Resolution
• Commercial Court
• Business Associations e.g. UMA, PSF, etc.
• Appointed Arbiter
Confidentiality of Investor Matters:
•Officers bound by the OATH of Secrecy they sign.
Legal Framework:
•The Investment Code 1991, which is an Act of
 Parliament handles all investment issues including
 FDI.
                                                      14
   FDI PROMOTIONAL TECHNIQUES
   Used:

Direct mail shots
Website
Existing investors
Foreign missions accredited to Uganda
Conference delegations
International consultants/Fairs/Exhibitions
Outward mission
Delegate programme
Friend of Uganda
Uganda Embassies abroad


                                               15
    SELECTED PRIORITY SECTORS


   Mining
   Services (Finance, Education and Medical)
   Tourism
   Packaging, Printing and Publishing
   Agriculture( Crops and Livestock)
   Information & Communication Technology
   Energy, Forestry, Textiles, Floriculture
   Pharmaceuticals                            16
       TARGET COUNTRIES

   South Africa      Denmark
   China             United Kingdom
   Egypt             North America
   Netherlands       Germany
   India             Sweden
   Malaysia
                      Mauritius
   France
                      Kenya
   Italy

                                        17
                                      SECTOR PERFORMANCE
                                          (1991- 2002)
                                                       AGRICULTURE, FORESTRY &
                                                       FISHING
                                                       CONSTRUCTION


                      2,000,000,000                    FINANCE SERVICES

                                                       MANUFACTURING
                      1,800,000,000
                                                       MINING & QUARRYING

                      1,600,000,000                    OTHER BUSINESS SERVICES

                                                       PROFESSIONAL SERVICES
                      1,400,000,000
PLANNED VALUE (US$)




                                                       REAL ESTATE
                      1,200,000,000
                                                       SOCIAL SERVICES

                      1,000,000,000                    TOURISM

                                                       TRADE
                       800,000,000
                                                       TRANSPORT, COMMUNICATION,

                       600,000,000                     AND STORAGE
                                                       WATER & ENERGY


                       400,000,000
                       200,000,000
                                -
                                            SECTORS
                                                                            18
   Projects to Undergo EIA
• General – dealing with character,scale and land-use
            change.

• Urban Development

• Transportation.

• Water-resource development – dams, rivers, and
                                 water resources.
• Aerial Spraying
• Mining – quarrying, open-cast extraction and
            exploration.
                                                    19
• Forestry related activities
   Projects to Undergo EIA
   Contd:
• Agriculture – large scale agriculture, use of new
        pesticides, introduction of new crops and animals
        use of fertilizers.
• Processing and manufacturing industries
• Electrical infrastructure – generation, transmission
• Hydrocarbon management
• Waste disposal- solid, sewage, hazardous and
                     atmospheric emissions
• Natural Conservation areas- creating and modifying
  protected areas.policies for managing forests, water
  catchments, ecosystems, exploiting natural flora and
  fauna, and introducing alien flora and fauna.
                                                      20
     EIA APPROVAL PROCEDURE:
Activity                               Duration (w/days)
                                            (upper limits)
Review of developer’s project brief:
(Initial Screening Process)                      21

Scoping process and preparation of T.O.R.        TBD*

Review of T.O.R.                                 21

Preparation of EIS                               TBD*

Circulation and Commernt on EIS                  21
Decision of the EIS                              21     21
Indicators used in approving projects:
• Nature of Project.
• Location
• Natural Resources t be affected
• Magnitude of impacts
• Waste production (if any)
• Relationship of the project and other future and
  related activities.

Monitoring Mitigative Actions:
• Self- monitoring by the developer.
• NEMA staff, Lead Agencies including Districts and Public

Penalties on failure to implement mitigation Activit
• Closure of facility – as last resort.
• Prosecution
• Serving an improvement notice
• Demanded to under take an enforcement audit   22
     Comparing FDI and CDM
• Just as is done in FDI, projects under CDM sectors
 (Energy, Forestry, Agriculture, Waste Magt, Transport)
 are promoted using the same techniques but
  emphasizing more on their importance- enabling
  emission reduction to facilitate curbing climate change.
• CDM is a Subset of FDI due to use of the same
  Promotional techniques
• CDM projects also need the approval of UIA
• CDM Projects also carry out EIA.
• CDM projects need secondary approvals e.g. from
  a DNA just like in any other FDI project which needs
  an approval from a line Lead Agency. – Currently
   Uganda does not have a DNA but has a focal point
                                                        23
   office-The Meteorology Dept.
Comparing FDI and CDM Contd:

• The Focal Point Office- Meteorology Dept. apart
from its staff draws Expertise from: Ministry of
Energy, Forestry Dept., NEMA


• UIA could be a member of the DNA once it is place
 to handle the promotion with experts drawn from the
 Meteorology Dept. to handle GHG aspect.




                                                    24
Strengthening smooth running and quick approvals
Of CDM Projects:

• Make the body that is responsible for FDI e.g. UIA
 be the secretariat of DNA so as to coordinate all
 issues concerning CDM.

Reason:
   - UIA has a good network with other bodies from which
     it can easily draw expertise to appraise a CDM project
     proposal with reduced bureaucracy more so if it had
     a hand in attracting this investment.


Confidentiality:
The confidentiality that applies to any FDI applies to
a CDM project since the officers handling are bound by
the OATH of Secrecy.                                   25
    T H A N K                 Y O U


    CONTACT INFORMATION
•   UGANDA INVESTMENT AUTHORITY,
•   The Investment Center
•   Plot 28 Kampala Road
•   P.O.Box 7418 Kampala

•   Tel: (256) 41 251562/5
•   Fax: (256) 41 342903
•   Email:        info@ugandainvest.com
•   Website:      www.ugandainvest.com



                                          26

				
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