PRLog (Press Release) – May 03, 2011 – Conflict as a result of Uganda's February 2011 elections and potential unrest, especially amid antigovernment protests in the Middle East and North Africa, have not shaken investors' resolve in recent months. Indeed, Museveni's resounding - albeit questionable - victory will keep him in power to 2016 and consequently boosted continuity and investor confidence in Uganda. The construction sector's growth trajectory is therefore likely to outpace growth in the wider economy at 11% to UGX5,483bn (US$2.5bn) in 2011.
Key developments in recent months include:
* Construction costs increased by 8% year-on-year (y-o-y) in December 2010, while increasing by 2% on the previous month. Construction prices for water projects specifically rose slightly by around 1.2% on the previous month. Construction costs, including building materials, equipment rates and wages, within the residential and non-residential construction sector increased by 1.9% y-o-y and 2.3% y-o-y respectively in 2010. * The opening months of 2011 saw a flurry of road project activity. Uganda is looking to build over 10,000km of roads from 2011 until 2014 at a cost of UGX800bn (US$330.75mn). Uganda secured a major US$350mn concessionary loan from China to develop the Kampala-Entebbe Airport toll road, which stretches about 54km, in mid-January 2011. Work on the much larger Gulu-Juba road began in mid-February 2011, creating a road link between northern Uganda and Southern Sudan's capital through the border town of Nimule. Several subcontractors have started tarmacing the 192km road on the South Sudan side, while construction on the Ugandan side is expected to begin in August 2011. * Promisingly, a spat over unpaid tax between Tullow, Heritage and the government appeared to edge closer to a fin garbage compactor review al resolution in early-2011. Tullow and the government had reached an agreement on the terms of a memorandum of understanding (MoU). However, neither Tullow nor the government have laid out a timeframe for signing the document, leaving the dispute and its detrimental impact on potential investment in the country's nascent oil sector to fester. Meanwhile, local firm Taylor Biomass Energy Uganda (TBEU) said in February 2011 that it is to develop a 40MW power plant by 2013, in what could be the country's first significant renewable energy project.
Corruption remains rife in Uganda and seems to permeate all levels of government and industry. Despite the lip service paid by Museveni to anti-corruption efforts upon his apparent re-election in February 2011, investors have little faith in a significant reduction in graft and major doubts persist on exactly where future oil revenue will land. Nonetheless, Uganda was bumped up seven places in the World Bank's 'ease of doing business' rankings to 122nd in March 2011.
The government is also planning to build up to five multipurpose dams in the north-eastern state of Karamoja. Development of the dams will be jointly funded by the Ugandan and Israeli governments.
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