Uganda Development Corporation (UDC) is an investment institution established as a wholly-owned government entity with the mandate to facilitate the industrial and economic development of Uganda through the establishment of a subsidiary and associated companies, public-private partnerships, research, financing, and management of entities that promote industrial development. It was established by the UDC Act of 2016.
Its mission is to make long-term investments in strategic sectors of the economy in order to stimulate industrial and economic development and private sector growth. This mission includes sometimes investing in strategic sectors of the economy that are not attractive to the private sector due to the required high initial investment costs, low returns on investment and long break-even periods.
The Corporation is governed by the Board in line with the UDC Act and management is headed by an Executive Director; with its investment program and operations guided by a strategic business plan.
UDC’s contribution to the economy
UDC has been instrumental to Uganda’s economy through nurturing the industrial sector; especially manufacturing. UDC has built capacity, created synergies in the sector, created jobs, implemented the import substitution strategy, and provided support services to manufacturers.
UDC has enabled individuals in industrial entities associated with it to obtain, improve, and retain the skills, knowledge, tools, equipment and other resources they need to do their jobs better. The capacity building is intended to ensure that manufacturing firms have well-trained staff, equipment, and other resources for the production of quality and competitive products for local and international markets. As part of capacity building, UDC also offers training in finance management, agronomy, value chains, cooperatives and more. Beneficiaries could include raw material suppliers and members of out-grower cooperatives.
Import substitution strategy
For many years, Uganda has been importing most of its locally consumed products. UDC aims to cause a reduction in the import of products and encourage production locally. This strategy is expected to promote domestic industries and promote economic development. UDC does this by promoting the local production of substitutes for the targeted imports. These are mainly foods and beverages, light manufactured goods, edible oils and fats, metals, furniture, construction materials, toiletries and more.
Uganda has a young population that offers an opportunity of benefiting from the `demographic dividend’ if the young people can become contributors to the economy and not dependents. UDC contributes to this by promoting the industrial sector; especially manufacturing which is known to create most jobs. Currently, investors in manufacturing enjoy high returns on investment partly because of the availability of a highly educated labour force and affordable minimum wage policy.
Synergy for industrialization
UDC has been identified by the National Development Plan (NDP II) as the vehicle through which key projects can be financed in line with the strategy of promoting and strengthening industrial development so as to increase the competitiveness of local industries. To achieve this, UDC has been instrumental in supporting micro, small, and medium enterprises through equity financing. This ensures that firms are able to expand and create more job opportunities and revenue.
UDC has been instrumental in the provision of services to support the manufacturing sector. This is through setting up of infrastructure facilities that the private sector is unwilling to provide yet are essential in the manufacturing industry. For instance, Kalangala Infrastructure Services on Bugala Island; in which UDC has a 45.7% shareholding, provides water and road transport between Bugala Island and the mainland. This eases transportation of people, ferrying of raw materials such as oil palm and fish to the processing firms. These services would not have been possible without UDC intervention that has also seen the local population benefit.