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MTWA strives to make Uganda among the top three MICE destinations in Africa

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MTWA strives to make Uganda among the top three MICE destinations in Africa

MTWA strives to make Uganda among the top three MICE destinations in Africa

World Business Journal talks to Hon. Martin Mugarra Bahinduka, Minister of State for Tourism, Wildlife, and Antiquities, about infrastructure investments made in the tourism sector, the impact of the “Explore Uganda’ campaign on tourism promotion, and the importance of MICE events in enhancing the country’s profile in global tourism.

What progress has been made under the Tourism Development Programme?

Notable projects include new road developments and the expansion of Uganda Airlines’ routes to international destinations, including India, China, and the UK. Upgrades at Entebbe Airport are ongoing, with Kabalega International Airport nearing completion. In 2024, the government embarked on the development of Kidepo Airport, and the procurement of the contractor is in the final stages. These developments are improving access to destinations and fostering economic growth in the tourism sector.

Key tourist attractions are being developed, including the Source of the Nile, which will feature a modern pier for 19 boats, a restaurant, a glass bridge, and a viewing deck. At the Rwenzori Mountains, we have constructed and handed over the newly built Elena Camp, located 4,500 meters above sea level, designed to enhance both comfort and safety for mountaineers. The camp has a bed capacity of 34 for tourists and 36 for support staff, ensuring ample space for large trekking groups.

Source of Nile Redevelopment Project

The Uganda Hotel and Tourism Training Institute (UHTTI) has been upgraded with expanded training infrastructure and facilities. With over $12M in funding from the World Bank, a three-star training hotel with 80 rooms has been constructed, along with classrooms, labs, and an administration block. This intervention aims to cultivate skilled personnel for the hospitality industry.

In Kasese, the Uganda Wildlife Research and Training Institute (UWRTI) has received $4.5M from the Competitiveness and Enterprise Development Project (CEDP) to upgrade the infrastructure and develop advanced laboratories for anatomy, biology, and parasitology.

What impact has the “Explore Uganda” campaign had since its launch last year?

Since its launch, the “Explore Uganda” campaign has significantly boosted tourism, increasing the average tourist stay from 7 to 8 days and raising per-visitor spending to $1,550. We anticipate international arrivals will exceed 1.5M in 2025.

Unified marketing efforts, including support from our embassies, have strengthened the campaign’s impact, streamlined promotional activities, and secured additional resources for future improvements.

How are international MICE events enhancing Uganda’s profile in global tourism?

19th NAM Heads of State and Government Summit

Despite limited leisure time, nearly 50% of conference attendees return at least once, demonstrating strong visitor retention. The ongoing improvement of conference infrastructure has significantly bolstered this sector, with discussions currently underway regarding the development of a new venue in Entebbe. Under our National MICE Strategy 2025/30, we aim to attract $250M to the economy. Uganda currently ranks seventh among MICE destinations in Africa, and we aspire to elevate this ranking to the top three within the next two years.

What is the growth outlook for domestic tourism?

Domestic tourism is on the rise, with nearly 1.3M Ugandans expected to travel in 2025, approaching the number of foreign visitors, which is around 1.36M. To further boost domestic tourism, entry fees for Ugandans are set at approximately $6.80 for national parks and $81 for gorilla trekking, compared to $40 and $800 for foreign visitors.

Bank of Baroda Boosts Funding for Critical Industries

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Bank of Baroda Boosts Funding for Critical Industries

Bank of Baroda Boosts Funding for Critical Industries

World Business Journal talks to Shashi Dhar, Managing Director of Bank of Baroda, about the bank’s loan book composition and strategic priorities, recent amendments to the Financial Institutions Act, and the critical need to balance regulatory compliance with sustainable economic growth.

How has the loan portfolio of the Bank of Baroda evolved, and which sectors have seen increased funding?

Our loan book has shown substantial expansion, increasing from UGX 1,111.89B in December 2022 to UGX 1,258B by December 2023, and further to UGX 1,370B by September 2024. Currently, our portfolio stands at UGX 1,450B.

We strategically allocate more than 20% of our loans to the agriculture and manufacturing sectors, recognising their vital role in Uganda’s economic landscape. Notably, we played a pivotal role by financing 25% of the $123M acquisition of Hima Cement in Uganda by the East African Sarrai Group. This acquisition, previously owned by Cementia Holding AG Zurich and Bamburi Cement Plc, ensures that profits remain within Uganda, thereby contributing to the nation’s development.

What is your view on the new requirements outlined in the amendments to the Financial Institutions Act?

In response to amendments to the Financial Institutions Act effective May 9, 2024, key changes require all board committees’ recommendations to receive full board approval, enhancing oversight but extending approval times. Credit approvals, in particular, have extended from 15-20 days to approximately 6 weeks, impacting project timelines.

As a bank committed to efficiency, we have expressed these concerns to the Uganda Bankers Association and the Bank of Uganda. High-level discussions are underway to streamline the approval process to balance regulatory demands with economic progress, ensuring that projects are not hindered by procedural delays.

What solutions can improve SMEs’ access to low-interest loans and affordable financing?

High interest rates are primarily driven by the government’s borrowing costs. To reduce these rates, the government must seek alternative funding sources and trim unnecessary expenditures. In Uganda, the anticipated oil production by 2025 could save $300-400M on petroleum expenses, thereby decreasing borrowing needs and potentially lowering interest rates.

The ongoing Rationalisation of Government Agencies and Public Expenditure (RAPEX) is another positive initiative aimed at cutting costs and reducing borrowing over time. While these effects may take time to materialise, such measures point toward a gradual decrease in expenditures and, consequently, lower interest rates.

Housing Finance Bank: Bridging the Gap Between Affordability and Sustainability

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Housing Finance Bank: Bridging the Gap Between Affordability and Sustainability

Housing Finance Bank: Bridging the Gap Between Affordability and Sustainability

World Business Journal talks to Michael K. Mugabi, Managing Director of Housing Finance Bank, about the impact of incremental housing loans on underserved communities, the objective of aligning with global accountability standards through the SSCI certification, and the focus on digital transformation through a new strategy and Core Banking System.

What recent progress has been made in achieving the objectives of the Sustainability Standards & Certification Initiative (SSCI)?

The SSCI journey consists of 8 modules leading to certification, and we have reached level 3, aiming to complete the certification by Q4 2025.

In our strategic reassessment, we have set 3 core objectives: to enhance financial inclusion, to support entrepreneurs with sustainable business initiatives, and to innovate in housing through eco-friendly materials, renewable energy, and improved water access.

We have secured €50M in funding, which includes €25M from the European Investment Bank and an equal amount from us. This investment is dedicated to empowering women and supporting SMEs in advancing sustainable enterprise.

What impact has the Incremental Housing Loan had since its launch in 2022, and how many beneficiaries have accessed it?

The Incremental Housing Loan has provided tangible benefits to nearly 6,000 customers, particularly those in lower-income segments, including boda-boda riders.

To date, this initiative has facilitated housing loans amounting to nearly UGX 40B, enabling beneficiaries to purchase homes or expand existing structures—all without the need for traditional collateralized lending.

One of the key enablers of this success has been alternative borrowing mechanisms. While only 20% of Uganda’s landowners possess formal land titles, community organizations and associations have played a pivotal role in securing access to financing.

Beyond individual homeownership, this initiative has stimulated the housing construction ecosystem—driving demand for construction materials, strengthening local supply chains, and supporting skilled labor markets.

To scale the impact further, we are expanding our reach through strategic partnerships and the establishment of a dedicated microfinance department, ensuring that affordable housing remains within reach for all Ugandans, regardless of income level.

What digital strategy initiatives do you have in place?

We are focusing on digital transformation in the housing sector, using a new digital strategy and Core Banking System to enhance partnerships with FinTech’s and support balance sheet growth. Our aim is to improve customer experience and satisfaction by ensuring a seamless, convenient experience at every touchpoint.

We are developing an omni-channel platform for seamless transactions and connectivity, which is vital for fostering partnerships and inclusion. This approach, driven by technology, informs our strategy to expand outreach efficiently and cost-effectively. We have also strengthened our monitoring systems to address rising fraud concerns to safeguard customer deposits.

Thailand Plans New Tax Strategies for Plug-In Hybrids

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Thailand Plans New Tax Strategies for Plug-In Hybrids

Thailand Plans New Tax Strategies for Plug-In Hybrids

Following a significant drop in production and sales in the automotive industry, Thailand has been looking for solutions. In 2024, there has been a 10% drop in production compared to the previous year and a 26% decrease in domestic sales.

The country is now shifting its strategies and implementing new tax policies that focus on plug-in hybrids. This decision comes as policymakers want to boost consumer confidence and investment.

The new tax incentives will be effective in 2026.

Tax Structure that Rewards Electric Driving

The new tax policy focuses on the PHEV’s electric-only driving collection. There will be a 5% tax rate for cars that have an 80-kilometre battery range. Meanwhile, those that fall under this range will have a 10% rate.

This will be a replacement for earlier tax incentive strategies where the eligibility criteria were inconsistent, such as the 45-litre fuel tank limit. While the old schemes implemented a lot of restraints, the new incentives offer improved usability and more flexible car design, especially in regions with infrastructure limits.

Another aspect that has been revised is the tier-based system. This way, vehicles that have bigger batteries and higher energy density will enjoy smaller tax rates. This would help Thailand reach its electrification goal as part of the “30@30” strategy – by 2030, 30% of the Thai cars should be electric.

The country also wants to commit to domestic production, seeking to give fiscal support to local manufacturers. Thailand wants to become a PHEV and EV center.

By 2026, Thailand aims to produce at least 100,000 PHEVs or EVs. This puts some pressure on local companies to align their operations and supply chains with the country’s industrial policy goals.

Incentives for Battery Capacity

Higher-performing batteries can secure lower tax rates, which can encourage actual electrification. Moreover, the new incentives that focus on battery capacity have the goal of boosting investment in the advanced battery supply chains within the country.

For instance, automakers that produce PHEVs that have a 100-kilometre electric range, as well as high-density batteries locally, might see their excise tax lowered by half. They would also enjoy local content-based production measures.

The Future of Thailand’s Planned Tax Incentives for Plug-In Hybrids

The new tax strategies are trying to find a balance between industrial revitalisation and the country’s climate policy.

While there were many challenges with BEV-specific programs due to slow infrastructure rollouts and higher costs, PHEVs are considered a more practical change. Not only do they accommodate current consumer behaviour, but they also include the existing distribution network of fuel while offering lower emissions.

The new tax plans have been approved by the cabinet. Now, whether the implementation will be successful depends on the communication with investors and automakers, as well as appropriate regulatory follow-through. Another big aspect is consumer acceptance.

Moving forward, continuous infrastructure investment and public education will be necessary to secure the adoption of the new incentives, promoting the country’s production of PHEVs and EVs.

Salaam Bank Uganda Marks Its First Year with Solid Performance

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Salaam Bank Uganda Marks Its First Year with Solid Performance

Salaam Bank Uganda Marks Its First Year with Solid Performance

World Business Journal talks to Michael Mande, CEO of Salaam Bank, about the bank’s journey since it started operations a year ago, the regulatory environment and initiatives aimed at promoting financial inclusion within the Muslim population and beyond.

How did Salaam Bank navigate its first year?

We successfully integrated Islamic banking principles with the Ugandan market by offering Sharia-compliant products. Key offerings include Mudarabah profit-sharing models and Murabaha for asset financing, allowing customers fixed repayment terms with potential early repayment discounts. The Ijara leasing model lets customers lease assets with the choice to own or return them later, akin to conventional leasing. Plans are underway to introduce Musharakah (Partnership Financing) and Istisna as we expand capacity.

Our customer base has exceeded 4,000, with plans to grow further in 2025 by opening 4 new Business Centres in Makindye, Nansana, Kawempe, and Kisenyi, pending Bank of Uganda approval in 2025. We already have over 12 permanent staff members in training and about 20 contract agents ready to support. These centres will focus on promoting our Deposit, Investment and Financing products and Islamic banking education, registering customers on our tech platforms, and providing training & support and issuing Visa cards (Debit and Prepaid), with cash transactions managed by agents at the Centres.

How has the regulatory environment in Uganda adapted to support the development and integration of Sharia-compliant financing?

The Bank of Uganda has played a key role in diversifying the country’s funding sources, addressing the need for Sharia-compliant financing from the East in addition to conventional Western sources. This has led to an improved regulatory landscape that supports foreign direct investment (FDI) and large infrastructure projects. With a significant Muslim population, there is notable economic potential in this shift. Previously, Muslims used limited-capacity SACCOs for business support. Now, financial institutions can provide greater support to SMEs, boosting job creation and economic growth.

What initiatives is the bank undertaking to promote financial inclusion?

Uganda has numerous SACCOs with a greater reach than formal institutions. These are groups of like-minded individuals engaged in economic activities, familiar with each other, living in the same communities, and having a leadership structure to manage their needs. For example, if they produce commodities with 10M shillings, we might help them scale up to 50M shillings, enabling them to generate more income and benefit the entire supply chain. In areas where our presence is limited, we collaborate with these groups. The engagement with them has been positive, prompting us to soon introduce a centralised identity platform that will be accessible to all customers in those communities. This platform will allow each customer to independently track their performance and will be organised by regions, with each region managing the different districts within it.

Lastly, having acknowledged regions sensitive to their beliefs, we discussed Sharia-compliant PDM with the government. These regions prefer such solutions over conventional methods, prompting our engagement with government officials, including the head of state and Muslim leaders, to devise suitable strategies, for which we are currently awaiting their feedback.

Taiwan Steps Up Economy-Boosting Efforts: Cabinet Approves Incentives to Bring New Investors

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Taiwan Steps Up Economy-Boosting Efforts: Cabinet Approves Incentives to Bring New Investors

Taiwan Steps Up Economy-Boosting Efforts: Cabinet Approves Incentives to Bring New Investors

Deputy Economics Minister of Taiwan, Cynthia Kiang, announced the approval of the Invest Taiwan 2.0 initiative. The announcement was followed by a press conference on Thursday, where details were publicized in regard to the decision of the cabinet.

This project aims to draw overseas Taiwanese individuals, along with foreign investors and entrepreneurs, to invest in Taiwan. The project is expected to improve the economy of the country and help it recover from its previous economic challenges. Investors will receive support from the Government of Taiwan in the form of loans and subsidies.

A Response to Pressure

The Ministry of Economic Affairs (MOEA) stated that these newly approved measures are part of a long-standing project called “Invest Taiwan.” The project was originally launched in 2017 as a response to the US-China trade. The first project aimed to encourage companies from Taiwan to relocate their China operations and move them to Taiwan.

The new initiative is an expansion of the old initiative. Invest Taiwan 2.0 is a response to the new reciprocal tariffs imposed by the United States, which made trading more difficult. By attracting both Taiwanese and international investors with the right incentives, it is expected that the economy will further improve in the next few decades.

Kiang mentioned that the government will support various industries during this initiative. Areas such as cybersecurity, artificial intelligence, and military technology are a given, but the government plans to expand its reach further. As such, it will also welcome investors from the service and health sectors.

Goals and Methods

The cabinet’s approval of the Invest Taiwan 2.0 initiative included a slate with numerous business loan and subsidy opportunities. The government plans to attract NT$1.2 trillion worth of corporate investments, which is the equivalent of US$41.62 billion. Given the rapid transformation of global industry, it is expected that the government will offer support to small and medium-sized businesses.

The new plan should launch somewhere in the second half of 2025 and create 80,000 more job opportunities over the following three years. This will solidify Taiwan’s position within the supply chain.

The measures to attract investors include loans up to NT$720 over the next three years. It also involves loan service fee subsidies that range from 0.3% to 1%. This is an improvement from the previous subsidies, which went between 0.1% to 0.7%.

These fees would be reimbursed by the National Development Fund, along with the Small and Medium Enterprise Development Fund, according to the Department of Investment Promotion Director-General Emile Chan. The investments are expected from more than 1,600 companies, which would upgrade the nation’s “five trusted industries.”

As of last month, a total of 335 applications for the original program have already been approved after being reviewed. This filled out a workforce gap of almost 5,000 local workers, while bringing in 5,7 million migrant workers. This allowed the Ministry to keep assisting local and foreign businesses where labor was previously a problem.

PACEID Breaking Down Trade Barriers to Accelerate Exports

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PACEID Breaking Down Trade Barriers to Accelerate Exports

PACEID Breaking Down Trade Barriers to Accelerate Exports

World Business Journal talks to Odrek Rwabwogo, Chairperson of the Presidential Advisory Committee on Exports and Industrial Development (PACEID), about the mission to expand trade partnerships and exports for 13 key products, ultimately aiming to generate one million jobs in the sector and solidify Uganda’s position as a reliable global exporter.

What impact has PACEID had on Uganda’s export growth and trade partnerships?

In 2022, we embarked on our mission with a clear objective: How can we create a million jobs? Achieving this would allow us to absorb two to three years’ worth of graduates across the country. A million jobs in manufacturing and services necessitate an increase in exports, leveraging Uganda’s strengths.

By concentrating on 13 Agri-value products and minerals, we have strengthened the country’s export potential and highlighted what stands in the way of growth, along with providing solutions to exporting firms.

We have addressed infrastructure and funding gaps, enhanced standards, and lowered transaction costs to boost the competitiveness of our exports. Our collaboration with export firms—now totalling over 62 in our database—has resulted in $460 million in export growth orders since 2023.

We’ve also fortified international trade partnerships with trade representatives now active in 6 of the 10 countries we initially targeted. These include the USA, UK, Nigeria, DRC, South Africa and China. This expanded presence enhances market access and positions Uganda as a strategic sourcing hub.

Our goal is to establish 25 international trade hubs by 2035, solidifying our position as a reliable global exporter. We will replicate this internally for our people to consume what they produce.

How are Ugandan products perceived internationally, and what strategies are being implemented to ensure they meet global quality standards?

Our products, especially fruits and vegetables, are appreciated for their unique taste by those familiar with them. However, there is a lack of awareness and outdated perceptions globally, exacerbated by inconsistent supply due to production and transport challenges.

To improve visibility and perception, the Uganda Connect Hub in Serbia was established, leveraging Serbia’s strategic location and cultural ties with the Balkans region. This initiative, drawing on historic agreements since September 1963, focuses on products like fish, cassava and coffee. In July, we opened our third trade location in Jajecar, Serbia, and reviewed the agreement signed in June 2024.

We will construct industrial and aggregation hubs aimed at standardising processing to ensure export reliability. Initiatives like the Uganda TradeXchange platform connect buyers and sellers while integrating regulatory export documents, improving supply chain reliability, transaction tracking, and data-driven decision-making.

The formation of a unified Food and Agricultural Regulatory Authority (FARA) is in progress, aiming to consolidate food safety efforts, standardise procedures, and ensure compliance with international standards. The draft law establishing this authority is pending Cabinet and Parliament review, which is crucial for enhancing global competitiveness.

How is Uganda leveraging the African Continental Free Trade Area (AfCFTA)?

We are collaborating with the Ministry of Trade, Industry, and Cooperatives to establish a national AfCFTA committee this year. A trade representative is assessing market opportunities in Nigeria, the DRC, and Morocco, with plans for a guided trade initiative in Nigeria that could expand to other African markets.

Over the past 3 years, we have worked towards Uganda’s accession to the Afrexim Bank’s Fund for Exports Development in Africa (FEDA). This was successfully signed in March 2025, and we are now operating under protocols to raise more funding and secure export financing.

To streamline payments, Uganda plans to adopt the Pan-African Payment and Settlement System (PAPSS). The National Standing Committee will spearhead these initiatives.

Currently, over 45% of the country’s value-added exports go to Africa, highlighting the critical role of AFCFTA in our trade strategy.

Interest in Golden Visa Programs Increases for Greece, New Zealand, and Portugal

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Interest in Golden Visa Programs Increases for Greece, New Zealand, and Portugal

Interest in Golden Visa Programs Increases for Greece, New Zealand, and Portugal

The Golden Visa program, which was introduced by several countries in the last two decades, has attracted a lot of attention in the last few years. The Golden Visa represents a long-term residency document that has the goal of attracting wealthy expats to invest.

With the world dealing with a wide range of political and economic uncertainties, more countries are trying to attract high-net-worth individuals. Therefore, they are changing their Golden Visa programs to accommodate people who are looking for a better place that offers them new opportunities.

Three of the countries that have a significant amount of interest in this scheme are New Zealand, Portugal, and Greece. But why are we seeing this sudden rise in popularity for Golden Visas?

What Does the Golden Visa Program Involve?

Golden Visas are long-term residency documents that give foreign expats a residence permit or citizenship so they can start investing huge sums of money in a country’s economy. This could come in different forms, such as donations, job creation, business development, or real estate investment.

By investing significant amounts of money, investors receive residency or even citizenship.

The reason why so many wealthy individuals seize this opportunity is simple: obtaining residency in one of these countries will bring tax benefits, better education, superior healthcare, and other advantages. The offer is especially convenient for people who come from countries that deal with political instability or economic uncertainties.

Now that the world is dealing with such instability, Golden Visas are getting more and more attention. Portugal, Greece, and New Zealand are only some of the countries that are working on improving their Golden Visa programs to better suit those interested.

Recent Golden Visa Developments

In many countries, the Golden Visa program has ended. For instance, Malta’s Golden Visa program was criticized by the EU recently after it was discovered to be selling citizenship instead of offering residency. Following this issue, Malta had to reconsider its scheme.

However, other countries still have excellent Golden Visa programs, and some even adjusted theirs recently.

For example, Greece requires a €250,000 real estate investment for the Golden Visa benefits. Recently, the government has increased the necessary investment in some locations, though.

Portugal remains one of the top destinations for Golden Visa applicants. Some time ago, the country made some adjustments regarding property investment restrictions in certain areas to prevent housing price inflation.

New Zealand has also revised its Golden Visa program, which is known as the “Active Investor Plus Visa”. The country added two categories, respectively, Growth and Balanced. For the Growth category, investors must spend $3 million, and the total residency requirement has been reduced to 21 days. Also, applicants no longer need to have English language proficiency.

Hope and Skepticism

It seems that developments are being made all across the world when it comes to Golden Visas. Still, while New Zealand offers more benefits to attract more wealthy individuals, Australia is one of the countries that maintain some scepticism.

Others, like Malta, had to revise their programs recently. It’s very likely to see some more changes in how countries attract global wealth in the next few years.

A Record High for Foreign Investments in Africa Was Reached in 2024

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A Record High for Foreign Investments in Africa Was Reached in 2024

A Record High for Foreign Investments in Africa Was Reached in 2024

In 2024, foreign direct investment in Africa grew significantly, reaching a record $97 billion. Compared to the previous year, this is an increase of 75%.

According to the United Nations Trade and Development (UNCTAD) World Investment Report 2025, North Africa is at the forefront of this foreign investment rise. This represents 6% of the global FDI, which is an increase of 2% from the year before.

Which Countries Led the Increase?

The confidence in North African markets enjoyed a substantial increase, even in the face of economic uncertainty. The countries that led this regional growth are Tunisia, Morocco, and Egypt. The former drew $936 million, which was a 21% increase from 2023. Morocco managed to draw as much as $1.6 billion in FDI in 2024. This represents a 55% increase from 2023.

However, Egypt did even better than its fellow countries. An international project finance deal for the country’s urban development pushed this record even higher.

But even before the deal, the African continent experienced a 12% annual growth. This is a sign that the investors’ interest is growing.

Foreign Investment in Africa and Rising Sectors

In various African subregions, foreign investment saw a massive boost in 2024. However, North Africa was in the lead.

International project finance deals saw a value increase of 15%. This was driven by big transport and energy infrastructure projects. IPF commitments increased by more than twice the size.

Meanwhile, project numbers decreased by 3%. The only area that showed significant growth was the renewable energy field. It landed seven big deals with a value of about $17 billion. This also included Egyptian projects for wind and solar plants, as well as power cables.

Tunisia, Namibia, and Morocco also had several renewable energy projects.

Cross-border mergers and acquisitions turned negative. Previously, they made up for around 15% of Africa’s FDI.

Greenfield investments also experienced a decline in Africa. Compared to $178 billion in 2023, the value went down by 37%, sitting at $113 billion. The announcements also decreased by 5%.

Except for North Africa, where greenfield investments grew by 12% and reached $76 billion, most countries had fewer greenfield initiatives. The largest increases in this sector were in the metal products and construction areas. On the other hand, gas and electricity supply projects decreased in value by $51 billion.

Biggest Investors in Africa

When it comes to foreign investors, China is still a big economic force in Africa. It has $42 billion in investment stock. Furthermore, it decided to expand into non-traditional fields, such as food processing and pharmaceuticals. However, in terms of the overall share of FDI, European investors are in the lead.

Moving forward, North Africa, with Morocco at the forefront, wants to play a bigger part in defining the sustainable investment future of the continent. That will be interesting to see, considering how significant its contributions were in the expansion of the renewable and digital sectors lately. If things keep improving, the African continent is looking at a bright future.

Donald Trump Approves the $14.9 Billion Purchase of U.S. Steel by Nippon Steel

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Donald Trump Approves the $14.9 Billion Purchase of U.S. Steel by Nippon Steel

Donald Trump Approves the $14.9 Billion Purchase of U.S. Steel by Nippon Steel

After U.S. Steel and Nippon Steel signed a national security agreement with the U.S. Government, President Donald Trump issued an executive order approving the merger of the two companies. According to them, this agreement will give the U.S. Government a “golden share”, but we don’t know how much of it will be under its control.

This historic partnership comes with a commitment to invest $11 billion by 2028. The approval comes after months of obstacles.

The Agreement

On June 13, President Donald Trump issued an executive order. It approved the merger of U.S. Steel with Japan’s Nippon Steel. The deal was finally approved after 17 months of twists and after Joe Biden previously blocked this initiative. Now, Trump has agreed to let the largest steelmaker in Japan buy its U.S. rival.

According to the national security agreement, Nippon Steel must make $11 billion worth of investments by 2028. This also includes initial spending on a greenfield project that must be done later.

“All necessary regulatory approvals for the partnership have now been received, and the partnership is expected to be finalized promptly,” said U.S. Steel and Nippon Steel in a statement.

Although the president did not offer details about the control he has under the golden share, Pennsylvania Sen. Dave McCormick mentioned that this share will let the U.S. Government control several board seats.

Donald Trump Changed His Mind

The new deal might’ve come as a surprise to some people as Donald Trump was not a fan of the sale of U.S. Steel to Nippon during the 2024 election. Both Republicans and Democrats were trying to protect U.S. firms from foreign competitors.

After assuming office, the president ordered a new review of the deal. Previously, Joe Biden had blocked the sale in his last days in office. His reasons included security concerns.

When President Donald Trump approved the deal, he didn’t call it a merger or acquisition, but rather a “partnership”. Despite Nippon Steel buying U.S. Steel, Trump said that the United States will still control U.S. Steel when he delivered a speech to the workers of one of the company’s plants.

According to U.S. Steel, it would only become a “wholly owned subsidiary” of Nippon North America. However, investors were very confused when Trump used the word “partnership” to refer to the deal.

Trade Talks with Japan

The Trump administration is doing trade talks with Japan. In the meantime, investors are waiting for signs that the U.S. will start deals with many partners to avoid massive tariffs, which have been a concern for many. Donald Trump announced that tariffs on steel imports would double to 50% when he was talking to the U.S. steelworkers. The tariffs were applied starting on June 4.

Donald Trump mentioned that the new deal will not lead to layoffs or outsourcing. Instead, workers will get a bonus of $5,000. He also agreed to keep the blast furnaces of U.S. Steel working at full capacity for a 10-year minimum period.

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