Government urged on competitiveness

The World Economic Forum 2012 Global Competitiveness report ranked Uganda 123rd out of 144 countries that were surveyed, having slipped two positions from the 121st position held last year.

The government has been asked to focus on solving the problems that affect businesses in the country rather than focusing on improving its indicators.
Speaking at the sixth National Competitiveness Forum in Kampala, Prof Ricardo Haussman, the director of the Center for International Development, said focusing on solving problems that are preventing business profitability and expansion of economic activity will indirectly improve Uganda’s indices without necessarily focusing on them.
“Improving in the global competitiveness index is no guarantee to improved economic growth. Countries that score better in the index might not do well in economic growth better. The competitiveness index is therefore not a good measure for growth,” Prof Haussman, said.
Competitiveness refers to the enabling environment that determines the level of productivity of a country which in turn determines the prosperity levels.
The World Economic Forum 2012 Global Competitiveness report ranked Uganda 123rd out of 144 countries that were surveyed, having slipped two positions from the 121st position held last year.

The World Bank on the other hand ranked it 120 out of 185 global economies surveyed in its Doing Business report.

Prof. Haussman was presenting a paper on ‘Accelerating Economic Transformation in Uganda.
This year’s forum organised by the Ministry of Finance through the Competitiveness and Investment Climate Strategy (CICS) Secretariat was held under the theme ‘Youth in Innovation and Entrepreneurship for Economic Transformation.

Prof Hausmann also said with the high population growth rate coupled with high levels of unemployment, Uganda needs to incentivise its citizens to move away from agriculture as a source of employment to sectors like services and tradables if it is to sustain the growth rates witnessed over the past decade.

At an estimated 3.5 per cent per annum, Uganda is said to have the second fastest population growth in the world with the number of unemployment hovering at 5.1 per cent.

“Non-agriculture employment will be critical going forward if Uganda is to maintain growth. Agriculture can be a source of growth, income or raw materials but it is not going to be a source of employment for the fastest growing labour force in the world because it can’t absorb it,” he said.
However, Mr Philip Odera, Stanbic Bank managing director said agriculture is a strong engine for Uganda’s economic growth as it’s where the country has its comparative advantage and that agricultural raw materials can be harnessed to support industrialisation.

“We only need to promote commercial agriculture, develop the value chains and put in place incubators to teach farmers modern farming techniques to boost their skills and expertise and make it easier for them to access funds from financial institutions,” he said.

The European Union Ambassador to Uganda Roberto Ridolfi urged government to invest oil money in infrastructure development to support private sector growth, before adding that the stock of infrastructure investment in Uganda has been too slow in the past.
fkulabako@ug.nationmedia.com