Private Sector Alone Can’t Drive Economic Growth – Prof. Nuwagaba

Government has been asked to invest more in supporting the private sector so as to facilitate equitable economic growth.

Prof. Augustus Nuwagaba a senior economic analyst and consultant on Thursday said that the transformation of any economy must be steered by the public sector with private players only as a supporting force.

Prof. Nuwagaba was delivering a key note address during the opening of the investment week  at Kampala Serena Hotel organized by Uganda Investment Authority.

Thursday’s conference was themed; “Enhancing the growth of SMEs through affordable alternative financing.”

“Government cannot run away from its role of facilitating investment because the private sector can only do the soft work. We are still doing very badly on the ease of doing business index. An investor cannot stand the bureaucracy of registering a business in Uganda when it’s much easier in Rwanda.”

He proposed reforms in the system of land acquisition and protection of business start-ups such as SMEs from external competition.

“We decided to liberalize our economy for potential investors to bring foreign exchange but this has brought shortcomings too. The local industries like steel are now facing serious problems from China. We need intensive discussion on how we can introduce protective economic policies”

He was critical of the fact that private equity growth has not reflected in agriculture as much as it has done in sectors such as telecom, this banking, buy more about energy, search manufacturing and construction.

“These sectors may generate high returns but they benefit only a small portion of the population,” Prof. Nuwagaba added


The event attracted Government technocrats, Small and Medium Enterprises (SMEs), local and foreign investors and financiers among others

Mike Kimuthia of Pearl Capital Partners told Chimpreports that majority of the SMEs in Uganda still lack the potential to attract investments. Over its 11 years span in Uganda, Pearl Capital Partners
only does a single private equity annual investments on average which is still low.

“Kenya is still the biggest market for private equity investments in the region followed by Uganda. Most of the SMEs that come to us are not ready for investment, many lack formal structures, book keeping among others,” he said.

Kimuthia says there’s need for business accelerators (investment hubs) that will be able to offer training to SMEs and prepare them for investment.

He also believes that government’s plan to recapitalize UDB (Uganda Development Bank) is critical and will bridge the existing gap in long term financing.


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