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Konrad Adenauer Stiftung Uganda and South Sudan held the private sector forum on 20thSeptember 2019 at Mestil hotel in Kampala. This forum was held in partnership with the Uganda Small Scale Industries Association, Federation of Uganda’s Employers and Centre for Development Initiatives under the theme: Unpacking the private sector’s contribution to inclusive development. The main objective of this forum was to provide a conducive setting to work on holistic policies for the private sector that address concerns and prepare strategies of the private sector with one ample voice. In attendance were representatives from the private sector, entrepreneurs, government MDAs and members of parliament.
In his opening remarks, KAS Uganda and South Sudan Country Director, Matthias Camp emphasized the private sector’s role in a developing economy, highlighting market forces and entrepreneurship as key drivers for economic growth. While the government’s role is to regulate the private sector and create a conducive environment, the private sector holds a major part in a thriving economy. He mentioned the three interconnected spheres of international engagement as private sector development, the role of innovation in solving Uganda’s crippling unemployment challenge and development cooperation with support moving from government projects to strengthening partnerships in the private sector.
The forum was joined by German Member of Parliament, honourable Andreas Lämmel, a member of the Christian Democratic Union and the deputy speaker of the parliamentary committee on economic affairs, chairing the working group on African affairs within the CDU party.
In his key note address, he highlighted the opportunities for business development in the East African Community, the economic challenges faced by the African continent and opportunities for business linkages between Africa and Europe. The EAC has a welcoming and conducive business environment attractive to investors which has boosted international investment in Uganda, Kenya and Tanzania. He noted, however, the challenges brought about by an unfavourable political environment, poor infrastructure and an increasing population without a corresponding increase in job creation. Despite agriculture being a source of hope for East Africa, its percentage contribution to GDP has dropped in the last years and the lack of manufacturing and processing factories has also created a labour vacuum in Uganda. He stressed German’s desire to support development efforts in Africa by promoting trade and investment and cited good governance, reduced corruption, efficient administration, accountability and dialogue as building blocks of development in Uganda.
A topical presentation on the National Perspectives on the Role of the Private Sector in Uganda was made by Mr. Ronald Kaggwa, Manager Production, Trade and Tourism Planning at the National Planning Authority. The National Development Plan emphasises a growing private sector as the engine for economic growth, and the private sector contributes 80% to Uganda’s GDP. Whereas small and medium enterprises dominate the private sector, they contribute only 2.5 million to jobs. The Ugandan private sector is crippled by low use of technology, use of counterfeit products, high costs of capital, energy, transportation and lack of basic infrastructure. Despite these challenges, the private sector is presented with multiple opportunities such as macroeconomic stability, informality - which if formalized can create value, partnerships with government and other companies, agriculture, free trade agreements which promote access to regional markets. The role of government is to improve the private sector, privatize investment, fight corruption and commercial justice, and enforce public standards and performance contracts. This should be done by strengthening the Uganda Development Bank, reviving and strengthening cooperatives networks, reducing domestic arrears and reducing the cost of business. He concluded his presentation by highlighting innovation, partnerships in the private sector and technological development as drivers for private sector development.
The panel discussion revisited the unemployment question through the private sector lens. On the panel were Veronica Namwanje from USSIA, Ronald Mukasa from Enterprise Uganda, Madina Guloba from Economic Policy Research Centre and Alex Ssemwanga from the Federation of Ugandan Employers.
The panel highlighted the indicators of development as inclusivity across all sectors of government, opportunity and access to capital. The unemployment question was discussed from two perspectives: lack of necessary employable skills and lack of jobs in the country. The challenges in the current model of skills training and the role of government in private sector development were explored. Whereas the general consensus was that the environment is generally unfavourable for entrepreneurship, there were some outliers who had built thriving businesses which provided an optimistic future for the private sector.
A vibrant discussion ensued from the participants who localised the discussion. The cross cutting issues facing the private sector were identified as high lending rates by commercial banks, natures of investment, informality of the private sector, failure to translate skills training to actual practical work and low implementation of government policies to promote a thriving economic scene.
The closing remarks were made by Raymond Agaba who represented the Minister of state for trade and delivered their speech. The speech highlighted the four challenges facing the private sector in Uganda; shortage of power, transport, capital and labour which when improved could realise a thriving private sector in Uganda. He reassured the forum that government is working to address these challengesin order to have a productive private sector with an objective to improve the livelihood of the private sector.
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