Economists have asked government to support local startup/young entrepreneurs saying it is important because entrepreneurs stimulate equitable redistribution of wealth and income.
Speaking in Kampala during the launch of the United Nations Conference on Trade and Development report on economic development in 2014 recently, the principal research fellow at Economic Policy Research Centre, Dr Ibrahim Kasirye, said while entrepreneurs promote capital formation by mobilising the idle savings and investment, Uganda still has very few entrepreneurs.
“Government needs to come in and support the young enterprises because new entrepreneurs need startup capital to grow,” he said.
Dr Kasirye said entrepreneurs provide an immediate large-scale solution to unemployment which is a chronic problem of developing or under developed nations.
In recent years, African governments have scaled up spending on infrastructure development, however, Dr Kasirye said spending on infrastructure by those governments is not yet significant to support the private sector to play active roles in the economy.
Senior economist at the World Bank country office, Ms Rachael Kaggawa Sebudde, said in Uganda over the last five years, public (government) investment has overtaken private investment.
“What can be done to get the private sector moving forward is what needs to be tackled,” she said adding that the financing part also remains a constraint to private sector in Uganda because the cost of finance is still high.
She added: “Uganda need to have strategic investment into strategic sectors and not just investing in firms.”
The report says that Africa has experienced relatively high growth during the past decades but nature and pattern of this growth has not resulted in more jobs and poverty reduction because consumption has been the dominant driver.