‘We must seize the moment’

Uganda’s Finance Minister is prioritizing new jobs and sustainable economic growth for her country, region and continent. Hon. Maria Kiwanuka explains what needs to be done

A projected annual growth rate of 5.8%, a ranking in the top five African destination countries for infrastructure projects to February 2013 and in the top ten African countries for ease of doing business — just a few of the factors that explain Uganda’s progress in recent years.

While landlocked, this East African Country also enjoys abundant natural resources. For example, the leading independent oil company in Africa, Irish firm Tullow Oil, is currently in the process of commercializing the significant discoveries it has made in the North Western part of the country, with the first material oil production expected in 2016. Such developments have naturally been welcomed by the country’s Minister of Finance, Planning and Economic Development, Hon. Maria Kiwanuka, but she is also focused on other priorities.
“In Uganda, just like the rest of the world, it’s all about jobs, jobs and the creation of more jobs,” she says. “It is my belief that governments worldwide need to provide clear, pragmatic national employment strategies and institutional frameworks that support sustainable private sector-led growth as a key source of job creation. We need to make sure that, at the end of the day, we have more jobs at a higher level of productivity for more people across the whole of Uganda.”

With the private sector responsible for over 80% of the country’s economy, the Minister admits that much-needed jobs will be sourced there, rather than directly by policy-makers themselves. That said, she is also clear that governments have a key role in assisting this process. “Although so many young people joining the labor force annually, our governments, like others worldwide, are rationalizing their civil services and government workforces to give more space to the private sector,” she says. “So we have to help the private sector to pay the bills — we cannot pay the bills ourselves.”

This means that Uganda’s Government is focusing on the country’s competitive advantages, which the Minister says are strengths such as agricultural productivity because it is the net food exporter in the East Africa region. “And because of our geographical position, Uganda can act as a distribution hub for imports and exports to and from coastal cities of East Africa, to South Sudan and Eastern DRC,” she adds.“It is still cheaper to reach these countries through Uganda.”

Using these competitive advantages, she goes on to identify four areas where government can help. “First, infrastructure — where government can take on those bulky projects that the private sector cannot do because they are very expensive up front and the benefits are very diffused at the end,” she says. “Human resource development is the second area — to skill our people in the direction of new jobs. The third area is research and development in agriculture —things like seed certification —in order to help the private sector help itself. And, of course, the fourth area is maintaining macroeconomic stability — it’s the one area that people don’t miss until it’s gone.”

An ‘enabling environment’

Like many of her peers and colleagues at the MEFMI Forum, Hon. Kiwanuka places much emphasis on the need to create an enabling environment for business, and for Public Private Partnerships (PPPs) specifically. Asked why she does so, she cites the results of surveys of domestic and foreign investors by the International Finance Corporation. “This research identifies four recurring themes,” she explains. “These are a reliable power supply, as well as reliable all-weather roads to and from areas of production and areas of consumption. They also want piped water to their production facilities, and they want a skilled workforce. So that is what we are looking at.”

For Hon. Kiwanuka, the more government opens up planned investments to private sector participation, the more it strengthens job creation. In Uganda, such partnerships have been developed with the private sector in areas including energy, education, transport and tourism. However, most of these have taken the form of concessions in the development and management of existing government assets.

“In Uganda, our attitude to PPPs is that the economic benefits must outweighthe economic or financial costs,” she says. “As experiences have shown elsewhere, the success of PPPs depends on government agencies presenting projects that are a viable investment opportunity to the private sector. There are certainly some practical infrastructure improvements that governments need to put in place in order to attract investment capital. It is my belief that private sector participation becomes long-lasting if an enabling environment is conducive. The challenge for policy-makers is to create enabling environments in each of our countries.”

Over the horizon

When asked to set out her thoughts on the biggest challenges facing Africa in general and Uganda in particular, the Minister says that there is little time to waste. “Because of the global financial crisis, a number of aspects of our economies are negatively affected,” she admits. “However, we should see these not as problems but opportunities to re-arrange our attitudes to our economies. The biggest challenge is that we must seize the moment. Africa is still the resource-rich continent. We must make sure we can extract our resources in the most efficient manner, and make sure we use those resources to start to create sustainable development. Our minerals are finite. Although Uganda has discovered substantial oil reserves we’re never going to be Saudi Arabia or Venezuela. They are going to be finished. So what we must do is take the black gold below ground and make sure it translates into green gold, an agricultural revolution, above ground.”

But with good returns on investment still offered, strong natural resources and a fully liberalized economy, all of which give investors the best platform to make their businesses thrive, there is little doubt that Uganda is well placed to enjoy a prosperous future.