Government borrows Shs27b to improve business environment

People line up at an office to be served. Uganda has been ranked among the countries with a poor environment of doing business. FILE PHOTO

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Ranking. Country is among countries with poor environment for doing business.

Kampala. The government will implement reforms that the private sector and international agencies such as the World Bank have identified as responsible for the country’s perpetual poor global ranking in doing business.
Over the last four years, several reforms and recommendations have been identified with uncoordinated licensing of businesses emerging among the main areas that merit immediate reforms.
For years, Uganda has been ranked among countries with poor environment for doing business on grounds that it takes months for an enterprise to get registered and start running.
The country was ranked at the 150th position out of 189 economies by the Doing Business Report, 2015 which was published in October, 2014.
Speaking in Kampala, State minister for Investment Gabriel Ajedra, said for the economy to operate efficiently, the business environment must be improved.
He said: “Reduction of regulatory and administrative burdens estimated at Shs725billion is critical in helping enterprises grow, create jobs and ultimately grow the economy’s GDP.”
He continued: “With the support of the World Bank Group and Trademark East Africa, the process so far has achieved cost savings of Shs188 billion amounting to 26 per cent of the total licensing burden.”
To implement the reforms and support the project, the government has borrowed $10million (about Shs27billion) from the WB, Ms Carol Ndaula, the WB Programme Manager, Uganda Investment Climate Programme, said in an interview yesterday.
And for the entire programme of making Uganda’s environment conducive for business, $100million (about Shs276billion) has been borrowed for that purpose.
“Therefore all sectors and other partners will be expected to contribute to the delivery and implementation of these prioritised areas. These priority areas will get the first call on additional national resources,” a statement by planning authority yesterday reads in part.

the business licensing reform process

The business licensing reform process has been ongoing since 2011 to reduce the unnecessary legal and administrative burdens that Small and Medium Enterprises (SMEs) face.
Several institutions have started online processes to improve efficiency; URA has online application and payment procedures, Kampala Capital City Authority is currently piloting its e-city payment system, an e-licensing portal housed at Uganda Registration Services Bureau and the Land information System is rolling out to more zonal offices.
The World Bank Group, through its Uganda Investment Climate Program, has supported the reform effort in Uganda.
The programmes, which closed in July, 2014, worked to help reduce the licensing compliance costs to private sector, to reform the SME Tax regime in order to reduce SME compliance costs and to rationalize the tax incentive regime in Uganda and harmonise it with the EAC policy.

Private sector’s take
According to the Private sector, despite several government interventions to create enabling environment for businesses to thrive, the cost of doing business in Uganda remains high, while legal and regulatory barriers continue to rank amongst the top five drivers of the high cost of doing business.
“We need more to be done. If the problem is the human resource behind the computer then we expect that to be addressed or else the competitiveness we are talking about will remain on paper,” said the excutive director Private Sector Foundation Uganda, Mr Gideon Badagawa.