Campaigners have asked government to revisit the trade and investment agreements between Uganda and other countries which they say favor foreign investment at the expense of local businesses.
They are advocating for fast-tracking of the Investment Code to ensure that such agreements benefit Uganda as much as they do good to the other parties.
During a stakeholder meeting organized by Southern and Eastern African Trade, Information and Negotiations Institute (SEATINI Uganda) on Tuesday in Kampala, Prof. Mwambutsya Ndebesa said the current disadvantages of foreign direct investments in Uganda outweigh the benefits.
The most predominant of all he said is capital repatriation which is a creation of the move by government to liberalize the economy many years ago.
“While we encourage foreign investment, we don’t see technology transfer, research development; job creation and knowledge spill-over to the local Ugandans. Our trade deficit is very high and our saving rate to GDP stands at 10 percent to GDP,” Prof. Ndebesa said.
“If we don’t encourage savings and have indigenous businesses, we shall continue to have a hemorrhage of our resources to foreign countries.”
The SEATINI Uganda Executive Director, Ambassador Nathan Irumba also noted that majority of the foreign investors are evading taxes and laundering money through schemes due to poor regulation.
The State Minister of Finance for Planning Hon. David Bahati welcomed the views from the private sector saying they are critical in informing the legislation process.
Minister Bahati however argued that; “The advantages of foreign direct investments still overweighs its disadvantages and as government, we haven’t noticed any reason that compels us to de-liberalize our economy.”
He said the Investment Code is still before Cabinet but when it gets before the committee of Parliament, the public and other stakeholders will be allowed to contribute ideas.
President Museveni has several times commented on the monopoly of foreign products on the Ugandan market emphasizing the need for value addition and quality on the part of local businesses.
Private sector actors however say that limitations like high interest rates and access to land still frustrate Small and Medium size enterprises which constitute 90 percent of the private sector from thriving.