Private Sector Seeks to Defy US, World Bank Trade Warnings

Kampala, Uganda | THE BLACK EXAMINER | The private sector in Uganda perceives Western sanctions as a challenge to be surmounted. These sanctions, prompted by concerns over human rights abuses and corruption, have been articulated by the US government through an advisory to American businesses operating in Uganda. The advisory warns of potential penalties for engaging with a country marred by such issues.

This development follows the World Bank’s decision to cease future loans to Uganda in response to the Anti-Homosexuality Act passed in the country. The US Departments of State, Labor, Health and Human Services, Commerce, and USAID jointly issued the advisory to alert US entities to the risks associated with conducting business in Uganda, including financial and reputational risks tied to corruption and violence against various groups.

The aim is to dissuade investors and individuals from dealings with Uganda, potentially stifling US investment flows. Uganda’s extractive industry, heavily reliant on foreign capital, is in need of substantial investments, especially during exploration and development phases.

Richard Kaijuka, Chairman of the Uganda Chamber of Mines and Petroleum, believes that most long-term investors are unlikely to be swayed by these statements, as investments typically outlast current political situations. However, he emphasizes the importance of Uganda’s human rights record for shaping the business and investment climate.

In 2022, Uganda’s goods exports to the US totaled $174 million, while US goods exports to Uganda were $167 million. This trade balance shifted from a deficit of $75 million in 2021 to a surplus of $7 million in 2022. US foreign direct investment in Uganda reached $104 million in 2022, reflecting a 13.0 percent increase from the previous year.

The 2023 Investment Climate Statement and the 2022 Country Report on Human Rights Practices in Uganda both caution investors about the risks associated with corruption and human rights concerns in the country. The advisory also highlights government restrictions on an independent legislature and the rule of law, particularly in the lead-up to the 2026 elections.

During the 4th National Youth Entrepreneurship Forum and Expo, President Yoweri Kaguta Museveni reiterated his opposition to foreign interference in Ugandan affairs. He asserted that the West should refrain from lecturing Uganda on human rights and related issues.

Following the World Bank’s announcement of suspending future loans to Uganda, Museveni expressed the country’s ability to thrive without aid. He suggested that many of the loans received were unnecessary and criticized foreign aid as potentially detrimental to social and economic progress in Uganda and across Africa.

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