The top challenges U.S. companies experience in Uganda are:
- High Levels of Corruption: Transparency International’s (TI) 2022 Corruption Perceptions Index ranked Uganda 142 out of 180 countries, improving two places from the previous year. Land-related fraud and corruption are common especially as complex land laws lead to frequent land disputes. Foreign ownership of land is restricted lease-hold titles.
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, with only 19% of the population using grid electricity according to UBOS.
- Lack of Specialized Skills: The UNDP’s 2022 Human Development Index ranked Uganda 166 out of 191 countries and is classified as a low human development country. Although Uganda’s adult literacy rate is 79%, the primary school dropout rate is 53%, and only 5% of Ugandans enroll in tertiary education. Per the International Labor Organization (ILO) in 2019, 73% of Ugandan workers lacked the level of education required for available jobs, even though at least 80,000 Ugandans graduate annually. According to the UBOS in surveys, employers commented that university graduates lack basic technical, managerial, and communications skills.
- Legal and regulatory environment: Some businesses struggle with legal compliance due to overlaps in terms of licenses, levies, fees, and permits at national and local government levels; duplication of information obligations required for license applications; lack of coordination between government agencies and insufficient ICT solutions to integrate and streamline administrative processes; and the general lack of information about licensing requirements and procedures.
- Political Uncertainty: Increasing political repression undermine a stable and investor-friendly environment. President Museveni was declared the winner in the widely criticized January 2021 general elections that was marked by pre-election violence and started a five-year term in May 2021 after 35 years in power. The elections included a five-day complete internet shutdown and a four-week block on social media platforms - and as of October 2023 Facebook remains blocked in Uganda.
- Human Rights Concerns: Democratic backsliding including restrictions on freedom of expression and assembly and the newly enacted Anti-Homosexuality Act (AHA) also impedes a stable and investor-friendly environment. The AHA poses reputational risks to U.S. businesses in Uganda, which would be required to implement policies that may discriminate against persons based on their sexual orientation or gender identification.