Economic Policy Research Centre (EPRC) in mid-August conducted dissemination workshops for Business Climate Index (BCI) in Masindi municipality for Western region and Nakasongola for Central Uganda region districts.

During the workshops in both regions, high electricity costs, poor road infrastructure hindering access to markets and multiple taxes by the revenue authority and local governments were widely cited as the key constraints to business growth and profitability for the period spanning mid-2018 to July 2019.

The workshops, which attracted participants form both the public and private sector, Uganda Revenue Authority and the Registration Services Bureau (URSB) were held at Kolping Hotel Masindi and Norena Hotel, Naksongola for western and central region respectively. The events are annually organized by EPRC to disseminate the findings of the climate assessment index, which is one of the flagship research products.

The participants identified opportunities for business investments and value addition for various commodities but blamed few policy challenges for hindering full realization of their business potential. Representatives from Uganda Revenue Authority (URA) and the Uganda Registration Services Bureau (URSB)

In Masindi for instance, the participants raised the unresolved issue of the controversial sugar zoning and irregular prices offered by the manufacturers to the out growers while being restricted from finding alternative buyers with fairer rates. While some traders called for a liberalized sugar industry, others thought it would be unfair to the respective factory owners who facilitate farmers with inputs like fertilizers and extension services. In the same vein and the factory owners advocated for protection against unabated sugar cane poaching in the sector.

A staff from the Kinyara Sugar factory defended the fluctuating prices given to the farmers attributing it to the poor market for the finished products adding that they were at the time stuck with 13,000 Metric Tons (MT) of Sugar due to low prices and closure of Rwanda border. He however assured the farmers of the plans to expand the milling capacity to crash 9000 M from the current 4000 MT to accommodate the increased cane production and resultant supply.

The business community complained that in spite of the increased power production through construction and launch of many hydro power stations, the power tariff rates had remained prohibitively high compared to other rates in the region, which raises the cost of business and lowers profitability. They challenged the power distribution authority to target more consumers to lessen the burden on the few are connected to the grid.

Responding to the presentations from EPRC research fellows Dr. Brian Serunjogi and Mr. Paul Corti Lakuma on the business environment assessment, participants lamented that traders were being unfairly assessed for multiple direct taxes by the authorities and indirect excise duties on mobile money and other consumable products in return for inadequate services like poor road infrastructure which affects marketing of their goods. A delegate from Rukungiri said the coffee processing plants were almost closing shop due to excessive taxes and high costs of production like labor and power.

The traders also decried lack of research and deployment of appropriate technologies to help farmers transform from subsistence to commercial production as well as mitigating the vagaries of weather such as unpredictable rains, which affect productivity. Also castigated was the unabated proliferation of sub standards goods on the market, low demand for locally produced goods and different prices for the same cash crops like coffee. The chairman Nakasongola District Retired Lt.Sam Kigula boasted of his area producing the best beef, milk and tilapia fish but fetching demotivating prices. 

The workshop participants recommended that the next assessment should find out the effect of informal trade going on between Uganda and Congo since the latter (DRC) is one of the leading importers of Masindi’s local products; security to be one of the indicators captured when computing the business climate index and the empowerment of the district commercial officers to intensify the business development extension services. Another business leader from Bunyoro called for the utilization of Kiryandongo Industrial park which is about 20 square kilometers but lying idle.

From Bundibugyo, farmers called for government prioritization of cocoa as a key commodity in the subsequent National Development Plan, Kanungu district traders decried fluctuating tea prices while participants from the cattle keeping areas reported prevalence of livestock diseases and fake acaricides on the market calling for stiffer regulation.

Agro-Industrialization

 On agriculture industrialization, Dr. Serunjogi who informed the audience that following the 2019/20 budget theme, agro industrialization has been greatly emphasized. He added that there is need to know how best to move from subsistence to sustainable agro-industries to create jobs that is, how to move from production for food to production for the market with value addition.

He pointed out that Uganda should prioritize agro-industrialization due to the quest for inclusive growth (promoting rural growth and closing income inequalities), ready market for raw materials and agro-industrial products, the forward and backward linkages and multiplier effects associated with agro-industries, and the need to upgrade the export value chains from low to high value agro-products

In their concluding remarks, the EPRC researchers observed that noted that businesses are becoming vulnerable due to environmental factors (drought and army worm invasion); political factors (Uganda-Rwanda border closure); macroeconomic factors, electricity costs and reduced demand for their goods and services. They added that the business environment is performing below potential due to the above factors. However, the business community was very optimistic on most of the indicators of the business environment.

The delegates in both workshops leant that the results of this survey are of great impact on the country as the Ministry of Finance, Planning and Economic Development, in Bank of Uganda Forecasts, International Monetary Fund Economic Outlook, and in local newspaper articles, use them in the National Budget Framework papers

Earlier, the EPRC programs manager Ms Elizabeth Birabwa Aliro explained that BCI is a study intended to capture what the business community perceives or sees as being a hindrance or an enabler to the different businesses that they engage in, thus their perceptions about the business environment. The researchers at EPRC came up with particular indicators, whose data is collected on a quarterly basis and analyzed or assessed, then a report is written to capture the different findings, which information is later disseminated in regional events.

The RDC for Masindi Mr. Godfrey Nyakahuma officially closed the Western region workshop held at Kolping Hotel while the District Internal Security Officer Nakasongola, Mr. Francis Tako, representing the RDC presided over the closure for the central region event at Norena Hotel.

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