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Uganda: Welcome Investors
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New Vision (Kampala)
EDITORIAL
17 July 2008
Posted to the web 18 July 2008
Kampala
THE Uganda Investment Authority has just reported that about 63,000 jobs will be created from the planned investments licensed this year. This is an improvement from the 54,000 jobs from the investments licensed last year.
UIA boss Dr Maggie Kigozi said the main areas of investment are energy, financial services, real estate, transport and accommodation. But she also pointed out that the main challenges to investors are insufficient energy, transport services and access to finance.
It is heartening that Uganda continues to attract investment both from abroad and from within - Ugandans were only second to the UK at $81m in terms of value of investment projects licensed. This suggests that we are doing something right.
However, these are planned investments. It would be interesting to know how many of these planned projects come to fruition. That being said, we need to focus more on the challenges facing investors. These are perennial problems - lack of power, poor infrastructure and expensive funds that make the cost of doing business prohibitive.
In a highly competitive world, high cost environments like Uganda are starved of manufacturing projects in favour of lower cost producing countries. This is not good as manufacturing is more labour intensive than the service industry.
Secondly, a combination of high costs and small markets makes us less attractive to credible investors, but leave us exposed to less credible investors with short term horizons and little incentive to transfer technology.
As we move into the second stage of our development, the first having been the rehabilitation of the economy, we need a radical change in the bureaucracy's way of interacting with business.
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Beyond an academic understanding of the importance of the private sector to the economy, Uganda's officialdom needs to first prioritise the removal of the deficiencies in our investment climate and bend over backwards to accommodate viable projects by credible investors.
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