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Foreign Direct Investment (FDI) by French companies in Uganda reached USD1.6 billion in 2023, representing more than 50% of Uganda’s FDI inflows, a study commissioned by the French Foreign Trade Advisors in Uganda (CCEF) and the Economic Department of the Embassy of France, has revealed.
This makes France, Uganda’s single biggest source of foreign investment in 2023.
The World Investment Report by the UN Trade and Development, unveiled on June 20, 2024, showed that Uganda in 2023 attracted a substantial USD2.886 billion.
Presenting the results of the economic impact study, Mr. Jean GAVALDA, the President of the French Foreign Trade Advisory (CCEF) committee in Uganda said that as of the end of 2023, there were 40 French companies directly established in Uganda, which is 4 times more than the 9 companies there were in 2010.
These companies operate in different sectors, including energy, infrastructure, logistics, transport, engineering, services and communication, agriculture and distribution. There are however another 15 companies active in Uganda without a direct presence on the ground.
In 2023, Gavalda said, these French companies generated sales of up to USD 875 million and paid USD 235 million in tax. The energy sector accounts for the largest portion of this investment and revenue.
French oil major, TotalEnergies is leading the process to Uganda’s oil production and has spent quite significantly following the announcement of the Final Investment Decision (FID) in Q1 2022. TotalEnergies alongside other French companies also invested in solar electricity production which accounts for 25% of all the solar power produced in Uganda.
“French companies play a crucial role in creating local jobs and building local capacity. They directly employ nearly 3,000 Ugandans (3 times more than in 2010), representing on average 95% of their workforce. They offered more than 46,000 hours of cumulative training to their employees in 2023,” Gavalda said.
“Reducing gender inequalities is at the heart of the extra-financial strategy of French companies. In 2023, French companies employed 974 women, or 33% of the workforce on average,” he said, adding: “French companies are major players in the transition to a low-carbon trajectory and the protection of natural resources in Uganda, by acting on a number of levers such as the development of renewable energies, circular economy initiatives and conservation of biodiversity. Currently, 65% of them use green energies in their production process and 53% use recycling equipment and the circular economy”.
The results of the French economic impact study were presented during a function to launch the French-Ugandan Chamber of Commerce (FCCU). The FCCU according to Thomas Pelletier, its first president, is dedicated to promoting economic relations between France and Uganda as well as paving the way for deeper and stronger bilateral economic relations. This will among other means be achieved through promoting partnerships between French and Ugandan companies.
“The main objective of FCCU is to do business together,” Mr. Pelletier said, adding: ” It is the right platform if you want to invest and prospect in Uganda but also for Ugandan businesses which want to prospect business with French companies. The chamber is the place to be”.
France is the first country in the European Union to set up a Chamber of Commerce in Uganda. This has been accelerated by a 3-fold increase in the number of French companies operating in Uganda in a space of 15 years. The FCCU is a successor to the French Business Club (Club d’Affaires de Kampala- CAK) that was created in 2017.
The Chamber presently has 63 members, half of whom are Ugandan companies.
To expand opportunities for its members, Pelletier said that the FCCU has already been admitted to CCI France International. Founded in 1907, CCI France International brings together and coordinates 118 French Chambers of Commerce and Industry for International Trade (CCI FI) in 93 countries. Its mission is to bring together, represent, coordinate and develop the network of French CCIs abroad.
Ms. Happiness Daher-Ebhohon, the FCCU General Manager said that following the launch, the FCCU would be running a series of business enhancing initiatives in Uganda and in France so as to create enhanced value for its members. been designated the General Manager.
Towards USD4 billion in FDI in 3 years
With the formation of the FCCU, Gavalda said, the Chamber would focus on driving the amount of FDI as well as business between Uganda and France, leveraging the French reputation for technology, high-quality goods, skilled human capital and commitment to sustainability while at the same time focusing on capacity through training and skills transfer for the Ugandan private sector.
“Over USD4 billion is to be invested by French companies in Uganda over the next 3 years,” he said.
“French companies deploy innovative technical solutions and are working to support the Ugandan economy’s move upmarket. Their impact is particularly noticeable when it comes to essential services for the population, such as access to modern energy with off-grid solutions, water and mobility. In the renewable solar energy sector, 3 companies own 25% of Uganda’s solar power capacity, providing green electricity to more than 120,000 homes,” Gavalda said.
He also spoke of the French companies’ commitment to invest in human capital and skilling their Ugandan staff.
In 2023, according to the report, offered more than 46,000 hours of training to their employees and financed study grants that enabled young Ugandans to complete their academic studies and enhance their skills.
“France is absolutely proud to be recognised as a major partner of the private sector in Uganda,” he said.
H.E Xavier Sticker, Ambassador of France to Uganda welcomed the launch of the Chamber and said it would create 2-way opportunities and prospects for Uganda and France “for the benefit of our two populations”.