In the last two weeks we have witnessed the swearing in of President Yoweri Museveni and the 500-odd MPs of he 11th parliament.
We await the
announcement of the new cabinet with bated breath, not least of all the
business community.
The Uganda National
Chamber of Commerce & Industry (UNCCI) president Olive Kigongo and
businessman Patrick Bitature in these pages have called for a private sector
friendly house.
They appeal to the politicians because while the strength of any economy is dependent on the viability and vibrancy of the business community, the politicians are the ones who lay down the rules and ensure their enforcement, or not...
Enforcement of the law
is important because it provides a predictable environment in which investors –
local and foreign, can make educated
calculations on how to invest in the country. If there is uncertainity
investors – local and foreign, stay away or adopt a wait-and-see attitude and
don’t invest as much as they should. that’s common sense. Even if for love of
country I would not put all my eggs in this basket when I am not sure I can
keep my eggs leave alone produce more eggs.
Amidst all the
political high drama of the last few weeks, some news fell between the cracks.
At cigarette company
BAT’s annual General Meeting last week the country boss Kirunda Magola
complained that there is an increase of smuggled cigarettes in the country,
which are easily identifiable as they do not carry the statutory required
warnings on their packets.
This suggests that not
only are they not paying taxes and are allowed to sell in our shops despite
being obviously contraband, but they are also dampening BAT sales hence denying
us much needed revenue. It also means that we may be letting in substandard
products that we have no control over.
That is bad enough,
but it is also affecting our neighbours
because the country has become a conduit for this illicit trade, affecting
legitimate businessmen in the region.
And BAT are not the
only ones complaining of government’s inability to enforce its own laws.
A few years ago a
major fuel company pulled out of Uganda because, while they were enforcing all
the standards required by the law at their stations, at great cost to their
margins, other players were flaunting these with impunity, undercutting the
major players and in the process turning Kampala into a fireball waiting to
happen.
We are shooting ourselves
in the foot.
"Government officials can talk all they want how the country is a good investment destination with double digit returns on investment, widening market and liberal policies, but businessmen listen more to their fellow businessmen and know better than to swallow wholesale everything the government tells them....
Then net effect of
this is that legitimate businesses steer away and the more unscrupulous types
come calling.
They have their local
backers in high places who, for a few dollars more, ensure government looks the
other way, the genuine businessmen be damned.
In defending the
illicit trade they appeal to some false nationalism -- “Its our people eating
at least” but the road to hell is paved with good intentions.
What we are doing as a
country is nurturing organised crime and the networks that feed them. The
networks that are used to smuggle cigarettes or fuel or batteries are the same
networks that are used to smuggle guns, drugs, facilitate human trafficking, the
movement of terrorists and assassins.
"Very soon, if its not already happening, these organised gangs coopt government officials into their nefarious schemes and we could very soon become a gangster state....
It has happened
before.
In Montenegro, to go
around UN imposed sanctions on the former Yugoslavia in the 1990s they leased
their ports to cigarette smugglers. When things returned to normal the
cigarette smugglers – by this time they had branched out into prostitution and
gun running, did no t go away and the new government could not make them.
It got so bad that Italy at one time put out an arrest
warrant for former prime minister Milo Djukanovic for his or his government’s
alleged role in the cigarette smuggling business.
The last elections
showed that government needs to urgently create millions of jobs by the time
this political cycle ends, we can not do that by letting tax dodgers take root
in this country.
