Learn about barriers to market entry and local requirements, i.e., things to be aware of when entering the market for this country.
The top five challenges U.S. companies experience in Uganda are:
- High Levels of Corruption: Transparency International’s (TI) 2020 Corruption Perceptions Index ranked Uganda 142 out of 180 countries, dropping 5 places from the previous year. Land-related fraud and corruption are common, especially as complex land laws restrict foreign ownership and lead to frequent land disputes.
- Limited Infrastructure, Including Connectivity, in Rural Areas: Although the government has been investing heavily in infrastructure, outside of the major towns, Uganda’s road and rail systems are in poor condition, and access to electricity is limited.
- Lack of Specialized Skills: The UNDP’s 2020 Human Development Index ranked Uganda 159 out of 189 countries. Although Uganda’s adult literacy rate was 76.5%, it had a 64.5% primary school dropout rate, and only 5% of Ugandans were enrolled in tertiary education. Per the International Labor Organization (ILO) in 2019, 73% of Ugandan workers lacked the level of education required for available jobs. Responding to a 2016 UBOS survey, employers commented that university graduates lack basic technical, managerial, and communications skills.
- Inefficient Government Services: The World Bank’s 2020 Doing Business Report ranked Uganda 116 out of 190 countries, eleven positions higher than the previous year. Uganda ranked below the average for sub-Saharan Africa in multiple evaluation categories, including: Starting a Business, Dealing with Construction Permits, and Trading Across Borders.
- Political Uncertainty: Uganda maintains a liberal trade and foreign exchange regime. Nonetheless, endemic corruption, financial mismanagement, a complex tax code with a large untaxed informal sector, and increasing political repression raise questions about the government’s commitment to fostering a stable and investor-friendly environment. Mid-to-long-term political uncertainty also increases risks to foreign businesses and investors. Seventy- -six-old incumbent President Yoweri Museveni has been in power since 1986, and the ruling party changed the constitution in 2017 to enable him to run for a sixth term in 2021, which he won. In May 2021, Museveni was inaugurated as president for another five-year term. The 2021 elections which the United States described as “fundamentally flawed,” featured protests and violence before, during, and after polling day, denial of timely accreditation to international and domestic observers, and a countrywide internet shutdown for 5 days surrounding the election followed by a four-week blockage of several popular social media platforms. While access to social media platforms was restored, as of July 2021, Facebook remains blocked.