Investors in small and medium enterprises have called for the restructuring of the incentives regime to reduce ambiguities that seem to favour foreign investors, and therefore leading to unfair competition. These argue that the government’s failure to provide local investors with the same incentives is affecting the country’s development.
On Monday, the State Minister for Urban Development Isaac Musumba unveiled a plan to allocate 1 square mile of land to U.S. hip hop artiste Akon to construct a futuristic city dubbed the ‘Akon City’.
“We are giving him the land which will be made available to him and his team so he can harness resources and do investments that can attract investors,” Musumba said.
However, this has sparked off a debate among Ugandans on the feasibility of the futuristic city. Most importantly, the debate has also centred on the incentives given to foreign investors as compared to the locals.
Many Ugandans believe government cares more about foreign investors as John Walugembe the Executive Director Federation of Small and Medium enterprises notes.
“There is abroad opaque incentive framework that is unclear. That is where we need to structure. What we don’t want is to babysit foreign investors. What we want is a fair playing field between foreign investors and local investors.”
Morrison Rwakakamba a board member of the Uganda Investment Authority (UIA) however dispels this notion.
“It is not true, the investment code act of 2019 clearly lays out the incentives. My view is that it is not correct because our business is to attract, promote, facilitate and deliver aftercare incetives o both the local and foreign investors.”
If these incentives are available as stipulated in the investment Code Act 2019, why haven’t the local investors taken them to start big investment? John Walugembe says local investors don’t know the incentives that exist.
“They don’t even know that there are incentives within the law because many times you first pay and ask for a refund as you invest.”
Economic experts have expressed mixed reactions to the viability of investment in the Proposed Akon City citing the high cost of doing business that decapitates both local and foreign businesses. To them, it is not realistic.
