31 December 2012

Uganda: Corruption Hurting Business

Photo: Kate Lucy/AllAfrica
Uganda ranked the biggest recipient of dirty money.


IT comes as no surprise to Ugandan businessmen that corruption exists, but like many other Ugandans even we are appalled at the extent of its magnitude.

The two cases that are being played out in the press - the corruption in the Office of the Prime Minister and the public service ministry, suggest that as much sh200b has gone missing.

This massive transfer of tax payers' money into the pockets of a few colluding officials is hard to justify when one considers how much such sums could do for the wider community in terms of providing health, education and other services.

As the business community, society may think we are far removed from the malaise but that is not true.

Hundreds of our members come in touch with this side of Ugandan officialdom, which extracts additional payment from honest businessmen for services already paid for by tax payers' money. This is an added cost to doing business that we hesitantly pass on to the consumer, knowing all too well it could affect demand for our goods and services.

Is it any wonder that unscrupulous businessmen have sprung up who source inferior goods, which they calculate they can still price competitively even after the bribes have been factored in, dooming the end consumer to a lower standard of living than he deserves.

On another level all this "free" money has been inflating property prices around town making doing business in Kampala more expensive than it should be.

So we have to pay more to buy land to situate our factories or real estate or to rent premises, these larger than normal costs are eating at our margins and often means the final consumer is paying more for his goods and services.

Essentially, there is no level playing field, the market is being distorted by this "free" money and causing unnecessary casualties to our membership.

These are, but a few ways corruption is making doing business in Uganda difficult and making it difficult to compete against foreign entrants into the market.

This is dangerous. Studies globally have shown that most of the new jobs created in an economy come from the SMEs, at the same time this group of business is particularly vulnerable to external shocks, unable to contend with, they normally go under taking the nobs they have created with them.

Clearly, something has got to give. It has been clear to the business community for quite some time that this economy will always struggle as long as corruption is not contained or eliminated altogether.

We acknowledge that these corruption scams were unearthed by the Government internal processes and we are grateful for this, but we urge the Government to stay the course, not to be side-tracked by parochial interests in chasing down the perpetrators of these grand thefts.

Out of conviction and necessity, we are strong believers in the Government's policies to ensure the private sector is the engine of economic growth and we are, therefore, against any policies or practices that do not promise to fulfill this goal.

We at the Uganda National Chamber of Commerce and Industry (UNCCI) know we can be many times more productive, if certain barriers are lowered or eradicated altogether.

Corruption is one such impediment.

We would be the last people to oppose wealth accumulation, but only if it is done openly and in manner that doesn't unfairly disadvantage others.

UNCCI is strongly behind the Government in its fight against corruption.

The writer is the president, Uganda National Chamber of Commerce and Industry. 

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