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Prof. Lin Tips Govt on Identifying Competitive Sectors for Industrialization

Expert on indistriaization Prof. Justin Lin (C) together with Prime Minister Ruhakana Rugunda (R) and UNDP Country Director for Uganda, Almaz Gebru (L) during the meeting on Monday

Prime Minister Ruhakana Rugunda has Monday morning met with Chinese industrialization expert, cheapest Prof. Justin Lin from Peking University an expert to discuss strategies that Uganda should undertake in order to create a favorable business environment as a driver of economic growth.

The meeting attended by the Minister of Finance David Bahati, this UNDP Country Director for Uganda, Almaz Gebru and representatives from the private sector highlighted among others,  the need for Uganda to develop export processing zones that will facilitate value addition of the country’s export products.

Government through the Office of the Prime Minister has been coordinating with United Nations Development Program (UNDP) to accelerate the industrialization program so as to create jobs and achieve lower middle income status.

Prof. Lin commended government for its political commitment towards industrialization which he said is the most important condition for any country seeking to industrialize.

He advised Uganda to on sectors where it possesses comparative advantage if it is to cut through the competitive market .

“For any country to be successful in its journey towards industrialization, it must be able to produce goods which are cost, quality competitive otherwise the market won’t accept them. In order to achieve this, you need to identify sectors in which you have competitive advantage,” Lin said.

He adeed; “However, in market competition, what matters isn’t only the cost of production but also total cost which includes transactional costs which are determined by infrastructure and how good the business environment is.”

Other than embark on an ambitious large scale infrastructure development which is costly, Prof. Lin says it is more effective for small economies to rather invest in sector specific infrastructure development and create incentives within economic special zones which attracts foreign direct investment.

Prime Minister Ruhakana Rugunda in commending Prof. Lin said that Uganda was ready to give him maximum cooperation in ensuring that results are realized.

Gideon Badagawa who heads the Private Sector Foundation Uganda (PSFU) stressed the need to build technological skills capacity in agriculture in order to better meet the standards required by external markets.

“If we are to talk about sectors that are going to trigger wealth creation, we can’t ignore agriculture. We need establish processing facilities within industrial parks and link them to famer cooperatives,” Badagawa noted.

Stakeholders in the agriculture sector have previously pointed out the need for government to revive the farmer cooperatives as a way to ease access to markets and credit. Individual farmers are frustrated by the high cost of credit.

On his part, Dr. Elly Twineyo Kamugisha noted that is important that export processing zones are protected from the bigger economy in addition to creating incentives for these zones.

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