UPDATE| Amos Nzeyi advances the arguments made by @KagutaMuseveni about in his speech on import substitution (one of the most important arguments in his address on #COVID19) by making some useful suggestions on indigenization of the Ugandan economy for its own resilience (thread)
If you can bear the word excess he suggest the following; first that government should settle its huge domestic debt owed to local companies and businesses so they can survive. This is a perennial problem for doing business with the state
In the past it has allowed the state to defer its obligations so that it can spend on critical sectors ( or misspend on others) but with #COVID19 those days are long gone. Second, he urges government to spend its budget as planned
Billions are nested in government coffers that every year goes unspent. Since externalities forced on the economy will cut off foreign income spending as planned is a stimulus; we agree
Thirdly, he says government must walk the talk on local content and spend on local companies. But Uganda, Build Uganda (BUBU) which Ndugu @RuhakanaR has been championing should allow local firms grow to fill the gap left by imported products
Junior Finance Minster @HonAniteEvelyn has been putting together a #COVID19 response for local industry to meet Uganda’s needs for face masks and sanitizer working with local manufacturers- that is an example of how BUBU can work
Nzeyi tackles creatively the problem of high interest rates suggesting that government should intervene via its own lending institutions such as Uganda Dev Bank and others to draw in the rest of the financial industry. We agree
State owner lenders and others are best placed to lower their rates per government policy. In the past myself and others simply urged prudent spending by the state which has failed miserably. This approach is worth trying
Nzeyi also goes after a policy that has succeeded in the past; investments in strategic local companies. That is the story of Mukwano Industries and others and has a mixed history of success. But now is a good time to make it work.
Finally he says @nssfug should skew their investment in favor of local companies. As I understand it the Funds spending is based on prudence. A policy of prioritizing local firms won’t fix their governance challenges.
On the last point I think a joint Private|Public #COVID19 committee should set standards for local companies to meet to get into a track for attracting @nssfug investment. The @stanbicug enterprise incubator model managed by my friend @Comrade_Otoa is one path
Here is Mr. Nzeyi’s full article published in @newvisionwire newvision.co.ug/new_vision/new…
