President
Museveni has been the biggest enthusiast for the development in the country and
in all his speeches and efforts is to see the country transform. Realizing that
the entrepreneurial class in Uganda was missing, he pushed for foreign investment
and his enthusiasm has brought all and sundry in the country. We have have
companies like BIDCO that have transformed Kalangala, the oil company that are
prospecting for oil in the Bunyoro region (I do not know why we have an English
name for this region which I now I can’t even remember and yet that is the
intention) and many other genuine companies that are doing business in Uganda.
On
the other hand, there are thousands of briefcase investors who are operating in
Kikuubo in Kampala and have gone to all small towns in Uganda to do what the
small vulnerable ordinary business man should be doing, petty trade. This process
of attracting investors has brought mixed results. Every action that the president
takes attracts criticism. This is normal, if you are not criticized, you never know
the basis of your decisions neither do you review or reflect what you have
done.
Business
is business. It is about giving shareholders value by giving them a good return
of investment. Any business that doesn’t do that is not worthy being called a
business. Therefore foreign investors in a country know what they want. They come
to make money in the best way possible and they must take their capital back
along with the profits that comes from that investment. For the country where
they are, they produce product or a service for the market or for the export. They
also create jobs and in some other cases, they even have a multiplier effect. This
is good for the country where the investment is made. It is even better if the
investment is expanded especially through generated profits. The smart
countries that attract these investments, watch these investments and learn
from them. They also try establishing competing businesses. The country as a result generates more jobs
and more wealth. However there are those who do not make any investments in the
country, they come to the country and trade. Trade gives very quick profits unlike
productive investments which take longer because of the gestation period.
Investors
who come to trade are not good for the country. The most undesirable investor
is one who asks for a guarantee. I remember years back, one of my first
exposures to business was some European “gentleman” who got a guarantee from Uganda
government when supplying tyres to one of the government companies. The gentleman
allegedly shipped the tyres which got lost in Mombasa. Why do I have to do
anything it government can pay me just like that. This is one of the biggest
problems with government loans and guarantees. Invariably, government pays for
nothing being done.
Below
is a case where the President donated land to a computer assembly plant that
was never built instead the fellows sold the land and made money and walked away.
What needs to be done is to foster entrepreneurship in Uganda. It is not a
simple thing to do that. While I hate government companies because I believe
government cannot do business. I note Europe is full of them. The control you
need in government companies is to ensure that there is accountability,
transparency in the management of these companies and the political will to
fire those who mess up with public funds. Uganda needs to re-evaluate its
position on public enterprises but only if and only if the country can develop
excellent management skills that is accountable and transparent and that there
is the political will to do what it takes to safeguard such public assets. No foreign
investor is going to do this for Uganda
Museveni duped into giving away 50 acres for ‘ghost’
computer factory
President Museveni got a raw deal
after giving free land to an investor to build a computer factory that never
was. Read More
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