Employment levels declining despite increased investment
Posted Friday, August 8 2014 at 01:00
Boost in investment attributed to controlled inflation
Despite increased growth in actual investment experienced in the last quarter of the previous financial— 2013/14, there was decline in both employment levels and number of planned investments, Uganda Investment authority data has shown.
The 4th quarter also witnessed 38 percent decline in planned jobs, which translate to 8,650 jobs from 13,850 anticipated jobs in the 3rd quarter.
“During the quarter under review, actual investment grew by 8 percent translating to $46.8 million (about Shs117billion) compared to $43 million (about Shs108billion) recorded in the 3rd quarter,” Mr Frank Sebbowa, the Uganda Investment Authority (UIA) executive director, said in a midweek news conference in Kampala.
He continued: “The actual capital investments were driven by three sectors which together accounted for 44percent of the actual investment in the 4th quarter. “Finance, Insurance, Real estate and Business Services sector registered $17million (about Shs43 billion; Agriculture recorded $10 million (about Shs25 billion) while in the manufacturing sector $9.1 (Shs about 23 billion) million was invested in various industries.”
The last quarter of the previous financial year also experienced improvement in the investment conversion rate which grew from five percent in the third quarter to 15 per cent by end of the financial year 2013/2014.
“The positive performance resulted from continued improvement in the macroeconomic environment—controlled inflation and less volatile foreign exchange among other reasons,” Mr Sebbowa said.
He continued: “It should be noted that there was improvement in actual investment in spite of an 11 percent decline in the number of licensed projects from 127 projects licensed in the third quarter to 113 projects in the fourth quarter.
Similarly, planned investment reduced in the fourth quarter from approximately $1 billion (about Shs2.5 trillion to $310 million (about Shs775 billion in the third quarter, registering a 69 per cent decline.
According to UIA ,this can be explained by the value of investments licensed during the period.
Explaining the improved conversion rate compared to the other previous quarters, Mr Sebbowa said: “In addition to our marketing strategies, we have been more cautious or if you like selective in giving licenses. We only license those that we are really sure that they will invest.”