Sylvia Juuko
11 November 2008
Kampala — PRESIDENT Yoweri Museveni has called for restructuring of the world economy following the global financial crisis that has hit America and Europe.
"There is no doubt that we must re-organise the world economy. This old, unfair division of labour is no longer acceptable. There should be a win-win situation," he said.
He said the cause of the crisis could be linked to the causes of the 1920s depression, which included disequillibrium between high production and restricted consumption.
"We have a population of seven billion people where the minority lives in opulence, while the majority are asleep and supplying raw materials. In the last 20 years, China and India have woken up, putting pressure on the price of raw materials. This is causing problems for economies of those used to easy life. Some of us had predicted that this world order was not sustainable," Museveni stressed.
The President was opening the 12th African Securities Exchange Association conference at the Serena International Conference Centre. The association is represented by 20 stock markets from 27 countries.
He noted that Uganda's capital markets could play a leading role in helping the Government raise funds to finance projects instead of borrowing from abroad.
Museveni pointed out that the discussion of African stock markets should be held in tandem with addressing the cost of doing business because investors buy shares in profitable companies.
"Few companies have been listed in Uganda. We have started the long journey of pooling savings from the wider society to bring up the capital base of Ugandan companies. But you cannot talk about the stock exchange separate from those factors that cause the cost of production to go up. We have to talk about infrastructure because it affects the health of companies that are trading on the stock exchange," he added.
The President reiterated the need to boost power supply and construct a reliable railway network to lower the cost of doing business in Africa.
He added that Uganda would finance construction of dams without external support.
Twaha Kaawaase, the chairman of the Capital Markets Authority, called on African capital market players to discuss an optimal regulatory approach that adequately protects investors and ensures confidence in the market.
This regulatory approach should also give participants enough freedom to innovate and build the market.
Kaawaase said an over- regulated market would not bring the economic transformation that Africa was seeking.
The optimal regulatory framework should also include continuous cooperation between the securities regulators and market practitioners to ensure that the regulations and market innovations build and do not destroy the markets.
He cited the need for integration of African stock markets as a means of addressing problems like low level of liquidity and under-development of market structures.
"If Africa is to tap into the economic and growth potential of the stock market, it needs to integrate. Africa should be seen as one market if it is to effectively compete with markets in Asia, Europe and America," Kaawaase concluded.
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Even if the global economy is re-structured Africa wont be at the table where and when it is being restructured. What Africa and Uganda needs to restructure - really get rid of - are the corrupt autocracies that are killing Africa figuratively and literary. It will still be the same players. Africa is still selling raw materials except the customers are now Asian - China and India (a democracy by the way). What difference does it make whether Africa still sells oil or copper to Asia or Europe ?