Saturday, December 01, 2007

Prof Kiwanuka urges African govts to build private sector

Prof Kiwanuka urges African govts to build private sector
By Nomusa Michelo
Saturday December 01, 2007 [03:00]

UGANDAN minister of state for finance in charge of investments Professor Semakula Kiwanuka has called on African governments to build the private sector in order to foster development. In an interview, Professor Kiwanuka said African governments had a challenge to build the private sector.

“We speak of a private sector led economy, but the private sector is so weak. We have not built it. We must empower it. For our nationals to be able to build themselves, they must have long-term affordable credit which is not there at the moment,” he said.

“So we must change government policies to make long term affordable credit available either by putting up development banks and capitalise them adequately because if they are not adequately capitalised it means there isn’t enough money for people to borrow.”

And Professor Kiwanuka said there was urgent need to reduce the cost of doing business in Africa in order to attract investment.

“Investors they think the risk factors in Africa are very high. It is partly because they make a lot more money when the come here. When they trade in Africa, the returns are over 30 per cent, in the US its 15 per cent in Europe its 10 per cent but still they don’t come,” he said. “So what else must we do? We must first of all reduce the cost of doing business. The cost of doing business revolves around poor infrastructure or inadequate infrastructure, shortage of energy, electricity.”

He said there was need to invest more in infrastructure such as road railway and power generation to support economic growth.

Africa the reason why we can’t even trade is because there are no link roads. We cannot even trade with each other. How can you trade with Europe if you cannot even trade with your neighbour and the potential is great,” he said.

“We need to put necessity on developing infrastructure such as road and rail that will go a long way in reducing the cost of doing business and also promote integration. You cannot be integrated unless people can move between countries.”

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