President Yoweri Museveni has encouraged European investors to increase investment in Uganda, citing Africa’s growing population and expanding market as major opportunities for businesses seeking to expand their operations.
Museveni said European investors were increasingly directing capital towards Uganda, particularly in hydropower and other infrastructure projects, following a meeting with European ambassadors and investors at State House Entebbe.
In a statement following the meeting, the President said Africa’s rapidly growing population presented significant opportunities for investors willing to establish businesses and expand production across the continent.
“I have always told our European friends that Africa is a huge market because of its rapidly growing population,” Museveni said, describing the continent’s demographic expansion as an opportunity that investors should take advantage of.
The meeting comes as Uganda seeks to attract foreign direct investment to support infrastructure development, expand industrial production and create employment opportunities.
Museveni also defended the government’s 10-year tax holiday for eligible manufacturers, saying the incentive was designed to encourage investors to establish businesses, increase production and create jobs.
He explained that the government expected to recover revenue indirectly through taxes on income and consumer spending as businesses expanded and more Ugandans secured employment.
According to the President, tax incentives should be viewed in the context of their potential to stimulate economic activity rather than solely through the immediate revenue government forgoes.
Under the arrangement he described, manufacturers receive a tax exemption for a specified period, allowing them to invest in production while contributing to wider economic activity.
Museveni’s remarks reflect his administration’s emphasis on industrialisation and private investment as drivers of economic growth.
Hydropower and infrastructure projects are particularly important to Uganda’s development ambitions because reliable electricity and improved transport networks can help businesses lower operating costs and increase output.
However, the long-term benefits of tax incentives depend on whether they generate sufficient investment, employment and additional economic activity to justify the revenue forgone.
The government’s challenge will be to ensure that foreign investment translates into sustainable jobs, stronger domestic production and increased public revenue while maintaining an attractive business environment.