THE FDI PROCESS AND PROCEDURES AS COMPARED TO CDM IN UGANDA

THE FDI PROCESS AND PROCEDURES AS COMPARED TO CDM IN UGANDA PRESENTATION BY GODFREY SSEMAKULA INVESTMENT EXECUTIVE UGANDA INVESTMENT AUTHORITY

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

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

SOME UIA ACHIEVEMENTS

TEN MAJOR FDI COUNTRYSOURCES (1991-2002) United Kingdom Kenya 3. India 4. Canada United States of America Japan 7. South Africa 8 Norway 9 Egypt 10. Mauritius UIA ACHIEVEMENTS

FDI inflows to Uganda (1989 – 2002) Year FDI m$ 1989/94 (avg) 23 1995 121 1996 121 1997 1751998 2101999 222 2000 254 2001 229 2002 275 Source: WIR 2002, UNCTAD

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.

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

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

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

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

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

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.

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

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

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

SECTOR PERFORMANCE (1991- 2002)

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. • 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.

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

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 Activities: • Closure of facility – as last resort. • Prosecution • Serving an improvement notice • Demanded to under take an enforcement audit

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 • 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.

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.

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

THE FDI PROCESS AND PROCEDURES AS COMPARED TO CDM IN UGANDA