Last week I spent a day at the inaugural Nordic East Africa Summit, the plan is this will be a forum for businessmen from the region and the Nordic countries to link up, understand each other and hopefully cut deals.
As proceedings at the Nordic Business Association’s organised event went along It was interesting to notice how many times these cross cultural interactions have people talking at almost cross purposes. It is not difficult to see how that may be.
For one the Nordic countries – Denmark, Finland, Norway and Sweden are a $1.1 trillion economy with a combined population of about 30 million people. There are more than 50 companies from the Nordic countries on the Fortune 500 list – the definitive list of the world’s largest companies.
Our lesser developed business class does not match up, which has real implications beyond the wealth disparities, issues of business practice, of general appreciation of business people and systematic and strategic government support for the private sector.
"In addition to the passage of time you have to wonder how 26 million people, a quarter of the population of the East African Community (EAC) can generate the kind of demand that will build 50 multi-billion dollar companies...
Which brings me squarely to what I want to hear my candidates on the campaign trail talking about.
Increased growth of the business community is the silver bullet to sort out all our problems – political, economic and social and I am sorry I am not hearing enough about what our candidates will do for business.
We should not let our cold war hangups get in the way of economic logic.
The private sector – oftentimes despite the official barriers thrown in its face, is what creates jobs, pays for our general security, infrastructure and social services. To the extent that the country has a viable business community is the extent to which the people will enjoy a good standard of living.
For starters I want to hear our campaigners talking about how they are going to improve the ease and cost of doing business in Uganda. In the most recent Doing Business survey Uganda was ranked 122 out of 189 countries. While this was an improvement from last year’s 135 ranking, being in the bottom half of the index is nothing to write home about.
Measured against a broad measures of indicators relating to licensing and regulations government would do well to focus more on ease of pay taxes, registering property, trading across borders and protecting minority interests in businesses are the measures against we not only fell back but rank poorly.
Interestingly against the measure of getting credit Uganda improved by 86 positions, while we still have high lending rates the introduction of competition in the sector must account for this improvement.
The pricing of credit like any other good or service is subject to supply and demand. It would therefore follow that our lending rates are high due to a shortage of lendable funds. One way to increase lendable funds would be for government to amend how much of workers’ salaries goes towards social security. Currently workers are supposed to save five percent of their income adding just one percentage point would mean a few more hundreds of millions a month going into the banks.
A figure that will grow as more and more employers sign up.
"That aside government can invest in and encourage business advisory services for businessmen, especially small businessmen. The knee jerk reaction when businessmen are asked what there biggest challenge is to complain of access to finance and the cost of finance. But given how the majority of our businesses do not last past their first birthday however well capitalised they are, suggests a more fundamental inadequacy...
At the Nordic East Africa summit it came through too that finding business partners with a culture – adequate book keeping, strategic processes and operational systems foreign partners could decipher or fit in with, was one of the major deterrents of linking up with local partners.
One participant lamented that because many local businesses are diversified it is difficult to get a true picture of their books, often times an investor buys into a company only to find some hidden liabilities included in the companies valuation they were unaware of.
Sometimes we are just our own worst enemies and we don’t know better than to behave like this.
So yes I want to hear our candidates being more specific on how they will help lift our businesses to higher heights, avert a quick death or getting started on a solid foundation.