The 5 in 5 series hits Uganda.
We interview Grace, a corporate and commercial transactional lawyer with a strong focus on delivering tailored, practical legal solutions to clients navigating complex business environments, based in Kampala.
Uganda’s economy expanded 4.6% in 2023, lower than the 6.3% registered in 2022. Despite strong performance in mining, construction, and hospitality, lower manufacturing output and contractions in food production and public administration led to the slowdown. Tight fiscal policy contributed to slower economic growth, despite large investments in oil and gas. Consumer demand and foreign investment remain robust.
Monetary policy has been tight, with the Bank of Uganda setting the policy rate at 10.25%. Inflation declined from 7.2% in 2022 to 5.5% in 2023. Net foreign assets declined during the second half of 2023, marginally depreciating the shilling–US dollar exchange rate by 1.8% in 2023.
In 2024, law firm Dentons reported, “Uganda’s legal and regulatory landscape is set for another eventful year in 2024. We are delighted to share with you our “2024 Outlook,” where leading lawyers at Dentons Uganda provide their take on key trends expected to define 2024 in Uganda. We cover developments in the areas of energy, environment, finance, employment, technology, and digital transformation. There are over 75 presidential and parliamentary elections being held around the world in 2024, including in the United States of America, the European Parliament, the United Kingdom, India, and several other strategically important countries.
The outcome of these elections will significantly influence the direction of travel for foreign investment, military intervention, and climate policy across the world, including in Uganda, as many countries prepare for the 2030 milestone under the United Nations “Agenda for Sustainable Development.” Uganda continues to respond robustly to the unpredictable political and economic tides arising from changes on the global stage, and remains attractive to investors from a wide range of sectors and markets.
In 2025, Uganda is set to become an oil producer and exporter for the first time. Most large economies are moving away from their heavy reliance on fossil fuels whereas Uganda is focusing on decreasing its reliance on biomass, which contributes to deforestation and adversely impacts local communities and biodiversity. Uganda could be seen as “swimming against the tide” as it prepares to launch the Tilenga, Kingfisher, Refinery and Crude Oil Pipeline projects. To understand Uganda’s ambitions for sustainable energy growth, market players should look to the recently published Energy Transition Plan (ETP) released by the Ministry of Energy and Mineral Development in December 2023 at the COP28 UN Climate Change Conference in Dubai, the United Arab Emirates. The ETP is a roadmap for the development and modernization of Uganda’s energy sector. Its objectives are: universal energy access by 2030; modernizing energy systems; improving energy security and affordability; mitigating greenhouse gas emissions; and positioning Uganda as a regional energy hub. Trends to Watch: Uganda in 2024 • 1 From a legal and regulatory standpoint, Government is developing an Integrated Energy Resource Master Plan to support the ETP which is expected to introduce mandatory minimum energy performance standards (MEPS) for buildings and appliances, requiring contractors and suppliers to quickly adapt to a new way of delivering projects. Government is also expected to revisit the Renewable Energy Policy 2007 to support a growing and more sophisticated renewable energy sector. The Energy Efficiency and Conservation Bill first drafted in 2014 may also be reviewed in 2024 to address energy efficiency standards, new energy codes and other requirements such as mandatory energy audits. The period covered by the Third National Development Plan (NDP III) is drawing to a close, so we expect to see renewed momentum during 2024 to drive the flagship projects forward to completion. Renewable energy projects and energy system improvements are likely to dominate, as well as road infrastructure and vehicle efficiency. Investors and stakeholders are preparing for a variety of infrastructure opportunities related to upgrading transmission and distribution grids infrastructure, battery storage and the manufacture of electric vehicles. Public-private partnerships, international climate finance for green projects and regional co-operation will play a significant role in Uganda’s ability to successfully deliver key projects during 2024. The ETP envisages US$325 billion of investment in Uganda’s energy sector over 30 years. Energy transition projects will bring new investors, contractors and diverse market demands, given the broad spectrum of expected opportunities in solar, hydroelectric and geothermal power, as well as in oil and gas and other mineral projects. Uganda stands at a critical juncture in its energy transition journey. By aligning investments with Uganda’s energy transition goals, investors can take advantage of a diverse energy economy and will find themselves at the forefront of universal energy access and economic growth for the region.”
For more information, contact Rob on rob@thegrmgroup.com
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