Two interesting developments have caught our eye here at the Uganda National Chamber of Commerce and Industry (UNCCI).
The first was the preliminary results of the population and housing census, which showed that the population had not grown as fast as initially expected and secondly that the rate of urbanisation was growing. The second was news that the Health ministry was powering on with plans to introduce a national health insurance scheme within the next two years.
Both news pieces have their pros and cons, which affect our members and of course the general economy. The Uganda Bureau of Statistics (Ubos) that oversaw the census exercise a few weeks ago announced that the population had grown by 10.7 million people since the last census in 2002 to 34.9 million.
This means that our population growth rate had fallen to 3.03 per cent from the previous 3.2 per cent. As businesspeople, this slowing down in population growth is a double-edged sword. On one hand, we are interested in growing numbers, which lead to an increase in market size. One does not have to be a rocket scientist to understand why this has a singular appeal for us businesspeople.
On the other hand, a deceleration in the growth in population may reduce the stress on national resources therefore, ensuring a better standard of living for the average citizen. This could also mean an improvement in the purchasing power of the average Ugandan, which will be good for the business community as well.
Related to this – improving the quality of our population – is the government’s commitment to universal quality health care for Ugandans. This, too, provides cause for ambivalence by our members. On the one hand, it could very well increase costs of doing business for us. The additional costs we would have to bear in statutory payments, in addition to taxes, NSSF and now health insurance dues, may very well make it difficult for us to compete.
On the other hand, if this new initiative will improve health care for our workers and hence reduce absences from work and therefore improve worker productivity, we will be the initiative’s biggest beneficiaries. Understandably, we have our reservations but we will save our considered opinion for when the details are released.
Something from the census that we took note of is the relatively low level of urbanisation in the country as a whole. This is problematic for us. Urbanisation concentrates people and gives us easier access to markets, lowering our operational cost.
While urbanisation has benefits for the quality of life of Ugandans, we need to do it in an organised way so that we don’t exchange rural poverty for urban squalor. Government needs to ensure physical and soft infrastructure is rolled out to match the pace of urbanisation, while providing incentives to the private sector to continue growing and creating jobs to employ this labour army that is knocking on the doors of our towns with increasing vehemence.
The census suggests that the trend in general improvement in Uganda continues unabated, despite the many challenges this country faces. We at UNCCI derive some solace from this show of resilience by the people of Uganda and the economy as a whole.
We at UNCCI are more than passive observers of these developments as they play an important part in the viability of our businesses and our ability to compete locally abroad. We hope that government can take maximum aantage of this new information – the census was two years behind schedule – to better plan for the citizens of this country and continue the upward trajectory that the economy has been experiencing over the last three decades.
The author is the president of the Uganda National Chamber of Commerce amp Industry.
Source : The Observer