To ensure future growth, Uganda needs to encourage competition
Uganda will face political and economic uncertainty in 2015 as the country faces legislative and presidential elections in early 2016. This is well known and most businesses have factored it into their calculations. But as economic sentiment weakens, there is an urgent need for the government to step up policy implementation to boost confidence and ensure that gross domestic product growth does not slow too much. The most urgent task facing the country is accelerating infrastructure development. At a discussion with an economic expert, the economic challenges in politically sensitive times include the lack of infrastructure that is expected to bite into business confidence and raising costs. This is reducing the country’s competitiveness, especially in the manufacturing sector.
Some of the country’s most prominent business leaders and government ministers have sent out a clear message that Uganda cannot afford to be complacent in an uncertain global economic climate. Not taking the right action today will lead to slower growth moving forward. Implementation has been Uganda’s Achilles’ heel and unless this issue is resolved, the country will lag behind regional competitors like Tanzania and Kenya. It is clear the country cannot rely solely on commodity exports and consumer spending to generate growth. It needs to expand its industrial base and promote new sectors, especially in the information and technology space. Uganda needs to encourage greater innovation and invest in research and development if it is to rise up the economic value chain. The government needs to shift its focus to creating the right incentive framework that will encourage and allow businesses to grow and invest. Uganda needs to move from a licensing culture to a mindset where competition is encouraged.