US Advisory on Uganda Business Stirs Controversy in Kampala

us advisory on uganda business stirs controversy in kampala
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The US government issued an advisory regarding business operations in Uganda, raising concerns about potential financial and reputational risks associated with widespread corruption and human rights abuses.

A recent advisory from the United States government, cautioning American enterprises considering business operations in Uganda, has generated surprise and consternation in Kampala. The advisory, which was released to the media, raises concerns about possible “financial and reputational risks” faced by American businesses operating in Uganda, where corruption and human rights abuses are pervasive. Officials in Uganda have indicated that while they respect the right of the US government to provide advice to its citizens, they will respond appropriately once they gain a clearer understanding of the reasons behind the advisory.

Vincent Bagiire, the permanent secretary in Uganda’s Ministry of Foreign Affairs, stated that the government is in the process of seeking clarification from the United States regarding the advisory. He mentioned that advisories are typically unilateral and devoid of consultation but emphasized that Uganda maintains a cordial relationship with the US government, particularly in areas like counterterrorism.

The advisory presents a grim image of Uganda and raises concerns that this development could further complicate bilateral relations, already strained due to differences over Russia’s war in Ukraine, human rights issues, and the sensitive topic of homosexuality.

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The advisory warns American business people and companies considering investments in Uganda to be cautious, asserting that Uganda’s Judiciary and Parliament have been influenced by the ruling elite, human rights abuses are widespread, and corruption is rampant.

Uganda’s Inspectorate of Government strongly criticized this characterization. Beti Kamya, the Inspector General of Government, expressed her dissatisfaction, calling it “unfair and unfounded.” She pointed out that Uganda has implemented measures to combat corruption and create mechanisms for reporting and punishing corrupt acts.

The US Department of State statement highlighted potential financial and reputational risks associated with endemic corruption, as well as violence against various groups, including human rights activists, media members, health workers, minority groups, LGBTQI+ individuals, and political opponents. The advisory also mentioned Uganda’s Anti-Homosexuality Act (AHA) and its implications for human rights and freedom of expression.

Despite these concerns, Uganda’s leaders remain steadfast in their belief that the country is an attractive investment destination, citing high returns on investment and positive economic growth. They continue to engage with investors from around the world, emphasizing Uganda’s peaceful environment.

According to the Office of the United States Trade Representative, the US foreign direct investment in Uganda in 2022 was valued at $42 million. Additionally, the United States provides annual budget support of $1 billion for various socio-economic activities in Uganda.

The US State Department clarified that the advisory is solely for informational purposes and should not be interpreted as imposing requirements under US law. Businesses and individuals are encouraged to consider this information when evaluating potential associations with entities involved in human rights abuses.

Ellen Masi, the public affairs counsellor at the US Embassy in Kampala, emphasized the long-standing cooperation between the United States and Uganda and the importance of supporting human rights and democratic values.

The advisory also raised concerns about corruption in Uganda, noting that despite having anti-corruption laws and institutions, endemic corruption remains a serious issue. It pointed out that the government has failed to enforce domestic laws related to human and labor rights, consumer and environmental protection, and business impacts. Corruption in government procurement processes was highlighted as a major hurdle for foreign companies bidding on Ugandan government contracts.

On the issue of human rights, the advisory noted the ongoing boycott of plenary sittings by the Opposition in Parliament due to human rights violations. Efforts to obtain reactions from government officials were unsuccessful, but the Leader of the Opposition in Parliament, Mathias Mpuuga, emphasized the importance of responsible governance and protecting citizens’ investments abroad.

The advisory also detailed concerns about gross human rights abuses and interference in the Judiciary, influence on the courts to resolve political disputes, and co-opted security forces. It mentioned the potential negative impact of the Anti-Homosexuality Act on LGBTQI+ individuals and their access to education.

President Museveni, while addressing the issue of homosexuality in Uganda, reiterated his stance and criticized external interference in African countries’ internal affairs. He emphasized the need for countries to respect each other’s sovereignty and avoid imposing their values on others.

The Anti-Homosexuality Act, signed into law by President Museveni, has sparked international controversy and led to actions by Western countries, including the World Bank Group’s withholding of development assistance to Uganda and sanctions against Ugandan officials.

Several key players in the issue provided their perspectives. Vincent Bagiire sought an explanation from the US authorities, emphasizing the unilateral nature of advisories. Beti Kamya defended Uganda’s anti-corruption efforts and highlighted the need for the US government to recognize them. Morrison Rwakakamba highlighted Uganda’s attractive investment climate and strong returns on investment.

Ofwono Opondo expressed skepticism about the impact of the advisory on Uganda’s economy, given its expansion and investment from various countries. Ellen Masi emphasized that the advisory is for informational purposes and that businesses will make their own decisions based on this information.

Overall, the US advisory has stirred controversy in Uganda, highlighting concerns about corruption and human rights abuses, as well as the potential impact on the country’s business environment. Uganda’s government and leaders remain committed to attracting investment and maintaining their relationship with the United States.

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