Sejaaka explained that for every dollar Uganda invests, it only gets a return of 70%.
PIC: Dr Samuel Sejjaaka,the chairman of Uganda Development Bank Limited board during the breakfast meeting for the Energy sector at Hotel Africana, Kampala on January 18, 2018. (Mary Kansiime)
BUSINESS | PUBLIC INVESTMENT RETURNS
KAMPALA - The Uganda Development Bank (UDB) chairman Prof. Samuel Sejjaaka has said the Government is getting low returns from its public investments capital infrastructure and energy.
He explained that for every dollar Uganda invests, it only gets a return of 70%, hence the need for more efforts to ensure the country achieves more value of returns.
Sejjaka, who was speaking at quarterly breakfast meeting for energy sector stakeholders at Hotel Africana in Kampala, noted that the value of the returns Uganda gets is far less compared to other developing countries such as Rwanda and Ethiopia.
On the causes for low return values, he quoted World Bank data, citing different challenges faced by the Government in the public investments.
“…Issues of execution, planning, corruption and so forth, World Bank recommended the need to strengthen institutions, standardise processes and also improve the capacity for executing these projects so that we can get the appropriate returns like in other countries,” he stated.
According to World Bank’s 2016 data, Uganda’s public investments were falling short of generating desired economic return. The report, however, recommended that by improving public investment management, Uganda could increase her economic growth rate and social impact of her investment strategy.
Other experts at the meeting for instance, Eng Dr Frank Sebbowa, the former executive director Uganda Investment Authority explained that most of the public investments are undertaken by acquiring loans and this will in long run affect the citizens.
“Some of the loans are not well thought up, for instance, if the money from the International Monetary Fund (IMF) hits our accounts before our own counter funding is ready, the money from IMF will begin earning interests before we have a project running.
This eventually results in a backlog of this counterpart funding, my suggestion is that we should always do project appraisal when we are ready,” he stated, adding that loans should only be acquired if projects are ready to kick start.
Sebbowa, who is the proprietor of Frank Energy Consultants, a firm that offers advice on investments, said the Government should also tighten the belts so that distribution of public investments goes to productive users. He said if that one is done, people will use the incomes to improve their wellbeing.
Selestino Babungi, the Umeme managing director, expressed concern about the low power demand, saying people need to embrace usage of electricity in different activities. He said last year, the power demand stood at 4.4%, but this year, Umeme predicts 6% power demand.
In the same meeting, Frank Energy Consultants Limited also launched a magazine titled Energy Power Supply Insights (EPSI) which shares information and opportunities in energy production.
Vision Group’s Frank Kabushenga, who is on the magazine’s editorial board, explained that the information about the big picture of role of energy has been published in the magazine. He noted that there are many opportunities that are lying idle in the energy sector, which the population can benefit from but lack the information about them.