2. Facts about Uganda  Population 31.7 million  GDP $36.9 billion  9.5% growth  GDP per Capita $1,165

3. Business Freedom  The freedom to start, operate, and close a business is limited under Uganda’s regulatory environment.  Starting a business takes an average of 25 days  Obtaining a business license takes less than the world average of 18 procedures and 218 days

4. Trade Freedom  Uganda’s weighted average tariff rate was 8.9 percent in 2008.  The government has made progress in liberalizing the trade regime, but import and export restrictions, some high tariffs, import and export taxes and fees, inefficient and non-transparent regulation and customs, export-promotion programs, weak enforcement of intellectual property rights, and corruption add to the cost of trade.  Ten points were deducted from Uganda’s trade freedom score to account for non-tariff barriers.

5. Fiscal Freedom  Uganda has moderately high tax rates.  The top income and corporate tax rates are 30 percent.  Mining companies are subject to a special corporate tax rate of 45 percent.  Other taxes include a value-added tax (VAT) and a property tax.  Recently overall tax revenue as a percentage of GDP was 12.4 percent.  Some minor tax cuts were introduced in the 2007–2008 budget to bring Uganda in line with other members of the East African Community.

6. Government Spending  Total government expenditures, including consumption and transfer payments, are relatively low. In the most recent year, government spending equaled 22.0 percent of GDP.

7. Monetary Freedom  Inflation has been relatively high, averaging 7.1 percent between 2006 and 2008.  The government influences prices through state-owned utilities and enterprises.  Five points were deducted from Uganda’s monetary freedom score to account for policies that distort domestic prices.

8. Investment Freedom  Foreign investors do not receive equal treatment and may face a number of performance obligations as conditions for gaining business licenses.  Foreign investment is allowed in most sectors, and foreign investors may form 100 percent foreign-owned companies.  While some reforms have occurred and others are scheduled to revise and update the investment code, regulation and bureaucracy can be non-transparent, inconsistent, and subject to corruption.  Dispute resolution can be lengthy and politicized, and infrastructure inadequate.  Residents and non-residents may hold foreign exchange accounts. There are no restrictions or controls on payments, transactions, or transfers.  A slow registry, complex regulations, and restrictions make land acquisition difficult or impossible.

9. Financial Freedom  Uganda’s small financial system is dominated by banking, which is relatively open to competition and subject to minimal government influence.  Following the removal of the moratorium on new banks, there are now 22 banks and over 200 branches.  Most banks are foreign-owned, and four account for about three-quarters of total assets.  Bank lending to the private sector has grown by around 55 percent over the past two years.  Access to financial services has gradually expanded across the country.  The government has established a Microfinance Support Centre. The insurance sector is small, and the state-owned National Insurance Company is undergoing privatization.  Capital markets are relatively small and underdeveloped, though more private companies are being listed on the stock exchange.

10. Property Right  Uganda opened its first commercial court about seven years ago, but a shortage of judges and funding drives most commercial cases to outside arbitration or settlement.  The judiciary suffers from corruption.  Domestic private entities may own and dispose of property and other businesses.  Foreign private entities share these rights, but there are restrictions on land ownership.  Ugandan laws protect intellectual property in theory but rarely act as a deterrent to counterfeiters and pirates.

11. Freedom from Corruption  Corruption is perceived as widespread.  Uganda ranks 126th out of 179 countries in Transparency International’s Corruption Perceptions Index for 2008, a drop from 2007.  The will to combat corruption at the highest levels of government has been questioned  Bureaucratic apathy and ignorance of rules within public organizations contribute to perceptions of corruption.

12. Labor Freedom  Uganda’s labor regulations are flexible.  The non-salary cost of employing a worker is low, and dismissing an employee is not difficult.  Regulations on the number of work hours are relatively flexible.

13. Reference  www.hertiage.org