The investment climate in East Africa is under increasing scrutiny as concerns about governance and transparency in Uganda continue to grow.
Recent developments, including the illegal detention and arrest of Vasundhara Oswal an Indian-Swiss businesswoman and key investor in the region have highlighted the urgent need for stronger investor protections and regulatory oversight to ensure a stable business environment within the East African Community (EAC).
Uganda, a member of the EAC, has been recognized as an emerging investment destination. However, recent challenges emphasize the importance of legal safeguards and investor confidence, especially amid global criticism over human rights violations and concerns about a deteriorating legal system.
On October 1, 2024, Vasundhara Oswal was illegally detained and forcibly removed from her worksite without any warrants, under unclear circumstances. During her detention, she endured harsh conditions, including denial of food, water, medical care, and legal representation.
Despite a High Court-ordered release and Uganda’s constitutional mandate which makes it illegal to detain a person for more than 48 hours without charge she was held for an additional 72 hours. She was then presented before the Luwero Magistrate’s Court (located 65 km north of Kampala) and charged with capital offenses without a shred of evidence being presented against her.
She was accused of kidnapping and intent to commit murder.
Even after the allegedly missing person was found, the capital charges remained in place for an additional two weeks, during which she was held in a prison for convicted murderers under horrific conditions.
Eventually, on December 16, 2024, the Director of Public Prosecutions withdrew the charges and replaced them with a misdemeanor offense. This move was seen as a deliberate effort to allegedly extort money from her family, as evidenced by a video of the lead investigating officer, Mr. Baale Thomas, on the case.
Such incidents have sparked discussions about the urgent need for clearer regulatory frameworks and improved governance to support FDI in Uganda and the wider EAC region.
In recent months, Uganda has faced global criticism for its handling of political opposition, particularly the incarceration of opposition leader Kizza Besigye Kifeefe. Additionally, widespread condemnation has been directed at the country’s military head, Muhoozi Kainerugaba son of President Yoweri Museveni over his openly aggressive online threats toward other nations.
“Transparency and accountability are critical in maintaining the region’s attractiveness to global investors. Addressing governance challenges will not only improve investor confidence but also ensure continued economic growth across the EAC,” says a member of the Oswal family. They add, “The EAC has a role to play in fostering a stable and predictable investment environment. Strengthening governance and legal protections will reinforce the region’s economic credibility and support long-term growth.”
Some investors, including the Oswal family, have re-evaluated their commitments in Uganda, opting instead to relocate planned investments to Tanzania, which is seen as offering a more predictable business environment.
“This is not just about one investor’s experience; it is about creating a business environment that supports investment and economic development. A stable and transparent system benefits all stakeholders, fostering confidence in the region’s future. With FDI serving as a major contributor to economic expansion, EAC nations must work collectively to strengthen investment conditions. Addressing governance concerns will help sustain investor interest and regional growth, ensuring that East Africa remains a key destination for international business,” says Oswal.
Vasundhara Oswal, daughter of Indian-origin billionaire Pankaj Oswal.