Uganda Expects Foreign Investment to Increase 8.9% on Oil, Mining Spending

Foreign direct investment in Uganda, set to become an oil producer in 2011, may grow 8.9 percent this year amid increased investment in the country’s energy and mining industries, the Uganda Investment Authority said.

Planned investment may climb to $1 billion in the 12 months through December from $917.9 million in 2009, Maggie Kigozi, the executive director of the agency, said in an Aug. 20 interview from Kampala, the capital. The economic recovery following the global financial crisis may also spur investors to commit to projects in the East African nation, she said.

“I would expect us to hit $1 billion as far as FDI is concerned because a lot of companies are expressing interest in investment in the oil and mining sectors,” Kigozi said. “Last year, we were hurt by the global financial crisis, but the situation is now much better.”

Uganda will become Africa’s latest oil producer when Tullow Oil Plc begins production at the Kasamene field next year. The country has an estimated 2 billion barrels of oil, with 800 million barrels already discovered, according to Tullow.

Ugandan President Yoweri Museveni announced last year the country has deposits of uranium in an area of 52,900 square kilometers (22,780 square miles) in its central and western regions. IBI Corp., a Port Perry, Canada-based company, was licensed in 2007 to explore for the nuclear fuel.

Investment by both domestic and foreign investors may total $2.5 billion this year, from $1.6 billion last year, Kigozi said, without providing further details.

To contact the reporter on this story: Fred Ojambo in Kampala via Johannesburg at pmrichardson@bloomberg.net.

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