Fight corruption, win investment � Chalker
By Baroness Lynda Chalker
Feb 27 - Mar 5, 2005
Baroness Lynda Chalker, the former UK overseas development minister and a long time friend of Uganda, delivered the third lecture in the Uganda Society-organised Leadership Lecture Series at Speke Resort Munyonyo on Wednesday night. She spoke on Uganda's Place in a Globalising World: The Role of Business. Below is a significantly edited version of the speech:-
I am delighted to be at "home again" in Uganda. As a businesswoman running a commercial consultancy [Africa Matters Limited], I care deeply about getting more investment into Africa.
GAVE ADVICE: Ms Chalker The world is changing, and changing fast. Competition is greater than ever before. Gone are the days of State direction. The days of the 'commanding heights of the economy' are over. The reason for these changes is that State economies do not produce sustainable growth.
Today it is recognised that it is the private sector, which is the engine of growth for Africa as well as for all our competitors all across the world.A thriving domestic private sector not only holds out the best hope for in-country investment. It is also the very best way to attract outside foreign investment and it is the ONLY long-term sustainable way to do so.
Attracting that foreign investment is becoming a fiercer and fiercer competitive battle. Even as FDI to developing countries rose in 2003, after three years of stagnation, our sub-Saharan African area did not benefit from this upturn. The majority of FDI for Africa has gone to oil & gas exploration and to the solid minerals sector. Slowly more is coming to manufacturing, and the Diaspora is re-investing in their own countries.
A key reason is that there are other countries in the developing world, including China, which are much better placed to take advantage of increased FDI available than those in Africa have been to date. Those countries make fewer demands on the investor and businessman and allow business to get on with their jobs with the minimum of necessary regulation.
Africa as a whole must recognise this fact. It will not reverse or go away. These facts cannot be sidestepped or put off. They have to be faced head on.
How Uganda fares
Uganda has many positives, which stand it in good stead. It is strategically positioned within economically important and resource rich east and central Africa, the improvement in macro-economic conditions is commendable, the economy is becoming increasingly monetised, and is gradually emphasising manufacturing and services including trade, tourism and transport. Also, Uganda has one of the best education systems in Africa.
Importantly, the current Ugandan labour force is plentiful, fairly well educated, English speaking and ready and willing to be trained.
But there is a lack of middle management capacity and technical skills, such as the need to improve skills in the Bureau of Standards. These problems are seen as barriers by investors. And can and must be tackled.
Overall, therefore, Uganda is well positioned to demonstrate how successful business can boost a country's position in the world.Role of business
Business can and must help government ensure that Uganda is a country in which it is attractive to invest and straightforward to make those investments. What does this mean?
First, investors look for a fairly standard series of norms when judging where to direct their investment. Uganda needs to ensure that the country at least meets and, where possible, exceeds these norms.
Can the private sector assist the public sector in this exercise? Yes, in many ways.The private sector has the managerial capabilities, and the processes and objectives-setting that is too often missing within the public sector, particularly the civil service. Therefore, a system of mentoring, personnel transfers, or partnerships to increase capacity between the private and public sectors could do much to inculcate these processes in the public sector and allow each to understand the motivations and challenges of the other.
I am particularly struck by the success in other African countries, where private sector directors have joined the government, that the results have been much more usually successful than not. Egypt is a real case in point.
International companies operating today in Uganda can also help in the process of raising and developing the private sector voice in the country.Success inside Uganda will be of little help to the country unless that success is communicated externally. International companies can also help, therefore, in the process of selling Uganda to the international community. But they have to be honest about the product that Uganda is seeking to sell abroad.
Business can also do much to encourage the emergence of sound regional groupings.
Actions such as these � a true partnership between business and Government � will do much to enable Uganda to develop, and to retain much needed human resource which otherwise might be tempted to seek its future elsewhere in the world.
Just as some 40% of Africa's financial wealth currently lies outside this continent, so many thousands of Africans are helping to run the infrastructure, health services, financial services and industries of countries other than their own. This brain drain must be slowed, halted and reversed � but it will not happen by Government edict, only by creating a business and growth environment, which is attractive to those currently in the Diaspora.
Transparency and accountability
No country in the world, and no business either, will have enduring business and growth results that enable the leadership to lift up the condition of the people unless there is unequivocal dedication to the fight against corruption.
The Convention on Business
Integrity launched by SAP in Nigeria is a beginning. In the CBi, businesses sign up to meeting a set of rules and then government departments agree only to source their supplies from those who are signed up to the CBi or their own published codes of business ethics.
Those seeking a home for investment in Africa and elsewhere will steadily only look to countries which are publicly and transparently committed to improving governance in both the private and public sectors.
The fight against corruption is often given verbal support. This means nothing unless the actions are taken openly and publicly. Uganda still has some considerable way to go, and it will be one of the first countries to act fully against corruption, and that go on doing so, that will win the greater investment that the countries so urgently need.
Looking ahead
The private sector in Uganda is still small and fragile. The majority of the more than 100,000 existing enterprises have been established in the last 10 years or so. Nevertheless, Uganda remains a testament to what can be achieved, given the right leadership and political will. Now, it is important to continue and enlarge that commitment on the part of government, the private sector and other institutions of civil society.
That way lies continued success for this country.
Thank you
� 2005 The Monitor Publications.
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