By Vision Reporter
Deputy Central Bank governor Louis Kasekende has weighed in on the liberalisation debate, saying free markets are good, if governments are involved.
“Market failures exist, but the role of governments is critical as evidenced in the West,” he noted.
Appearing as a panelist at the launch of the African Development Bank (AfDB) 2014 African Economic Outlook, Kasekende warned of the possibility of another crisis and the need to rebuild the fiscal space as well as reduce the fiscal deficit.
The deputy speaker of Parliament, Jacob Oulanyah, kicked off the debate last week, saying the flurry of private foreign companies and banks seems not to be serving the country’s interests, especially with borrowing rates spiraling out of reach of the average Ugandan and the huge profit repatriation by foreign firms.
Commenting on the outlook, Kasekende noted that the continent is on a recovery trend having overcome the 2009/2010 financial slide.
“One clear message is that countries need peace and security. We must invest in peace,” he noted.
Dr. Kayizzi Mugerwa, the acting vice-president and chief economist at AfDB, while presenting the report said efforts must be made to boost and support value addition, especially for agriculture. He cited the discrepancy in trade relations between Africa, the West and East, where for instance cocoa beans exported to Japan attract no import levy, but when cocoa producing countries add value on the crop and attempt to export, they are slapped with a 20% import tariff in Japan.
“Why don’t you let them add a bit of value. If that happens, it would have an incredible impact on incomes,” he advised. He advised African states to form synergies where they can have items that are used across the continent such as matatus (commuter taxis).
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Govt role key in liberalised market, says Kasekende