[{"bbox": [97, 153, 1133, 207], "category": "Text", "text": "challenge. Low capacity of producers and exporters to comply with market entry & access requirements, and meet the year-around supply of quality products is another one."}, {"bbox": [97, 233, 702, 260], "category": "Section-header", "text": "## Poor links between trade, investment, and sector development"}, {"bbox": [97, 270, 1133, 508], "category": "Text", "text": "Slow economic growth and export diversification highlight the need for targeted measures linking trade, investment, and sector development. Export-wise, Uganda's participation in GVCs has mainly been limited to exports of agricultural products such as coffee, tea, cotton, cocoa and vanilla, and fish products. From investment perspective, FDI to Uganda decreased by 35% in 2021, compared to 2019, and rebounded to almost pre-pandemic levels in 2022, with historic concentration in extractives. In this context, the NDP III aims at increasing private productive investment that can be leveraged: as a tool to address persistent gaps in priority sector value chains, sector growth and diversification; as a driver to fast-track implementation of strategic trade reforms. However, rampant corruption, weak rule of law, and an increasingly aggressive tax collection regime create a challenging business environment."}, {"bbox": [97, 522, 1133, 682], "category": "Text", "text": "Without an investment promotion strategy, the Uganda Investment Authority (UIA) and the Government largely leave the quantity and quality of FDI inflows to chance. Without a strategy, investment promotion supports private investment reactively, irregularly and focuses too narrowly on activities, such as investment forums. When the Government adopts a sound strategy as its lodestar and holds staff accountable for achieving the strategy's impact targets, all day-to-day activities are geared toward the achievement of those impacts through greater effectiveness in the fierce global competition for FDI."}, {"bbox": [97, 694, 1133, 827], "category": "Text", "text": "Further, although Uganda has introduced a set of initiatives to promote investment for inclusive growth and employment (including the establishment of free zones), their effects are limited. There are long-standing persistent challenges that hinder investment inflows, including skills, poor economic management, infrastructure, political uncertainty. Further, the UIA has scarce resources to attract and facilitate foreign and domestic investment due to insufficient capacities, unclear sector value propositions, and an inconsistent investment framework."}, {"bbox": [97, 839, 1133, 999], "category": "Text", "text": "Recognizing the relevance of targeted investment, the DTIS recommends the design of specific upgrading roadmaps for new priority sectors. It is observed that targeted sectors receive more than twice as much FDI as non-targeted sectors in developing countries. Further, targeted sectors could see more than 50% percent increase in affiliate employment. The upgrading roadmaps will aim at identifying upstream and downstream sector challenges, develop an effective investment promotion and facilitation system, and stimulate sector integration into the regional and global value chains."}, {"bbox": [97, 1011, 1133, 1197], "category": "Text", "text": "Strategic sector development and investor targeting for new priority sectors are in line with the Government of Uganda's ambition to boost trade performance of emerging industries. With the strategic approach, the Government will indicate commitment and readiness to potential investors to improve the business environment in priority industries, to establish transparent and predictable regulatory frameworks, and provide necessary assistance throughout the investment cycle. Based on investment feasibility and desirability factors, the strategies will enable the country to exert influence over the type and quality of investment for priority sector development, including green investments."}, {"bbox": [97, 1209, 1133, 1289], "category": "Text", "text": "Along with identifying the strategic priority sectors, tools for investment promotion also needs to be sharpened. New communication tools such as interactive web applications and investment promotion materials could render a modernized approach to convey attractiveness and boost investor confidence in a more effective manner."}, {"bbox": [97, 1301, 1133, 1540], "category": "Text", "text": "Lack of transparency and complexity in investment procedures could potentially discourage investments. Beyond economic fundamentals such as market size and growth rate, difficulties related to transparency and predictability of the regulations, and complexity of investment procedures are also key impediments to sustainable FDI flows to developing and least developed countries. In this regard, the investment facilitation for development (IFD) negotiations, currently being conducted at the WTO (Uganda is a participating member) will develop disciplines and guidelines that help to improve transparency, streamline administrative procedures related to investment and enhance international cooperation. Support on implementing the IFD agreement will help to make investment procedures easier, faster, and safer, thus contributing to attract and retain higher-quality FDI flows for sustainable development."}, {"bbox": [97, 1552, 1133, 1606], "category": "Text", "text": "Last but not the least, overall improvements in investment climate should be a continuous effort. Although Uganda has introduced a number of initiatives to promote investment for inclusive growth and employment, including the"}, {"bbox": [1038, 1681, 1142, 1706], "category": "Page-footer", "text": "Page 7 of 31"}]