Bbumba calls for less red tape

Jan 21, 2010

FINANCE minister Syda Bbumba wants less bureaucracy in compliance with commercial regulations to ease doing business and eliminate corruption.

By Sylvia Juuko

FINANCE minister Syda Bbumba wants less bureaucracy in compliance with commercial regulations to ease doing business and eliminate corruption.

“Excessive government regulation of business activities can lead to a decrease in formal entry, an increase in informality, corruption in the public sector, lower investment and innovation and reduced income and employment growth,” she said.

Bbumba was speaking on the sidelines of a two-day regional meeting for regulatory reformers in East Africa held at the Kampala Serena Hotel, on Wednesday.

“When you want to fight corruption, one of the starting points is effective regulation and transparency of processes,” she said.

“To expedite investment, the business community wants speedy processes while some are tempted to oil the system because of the delays,” she added

The minister expressed concern over the delay of the commercial bills that are currently before Parliament, at the committee stage.

“We have a number of commercial bills that include counterfeit bill, competition, and copyright bills. I hope they can be expedited so that they are enacted into law before the next budget.”

Bbumba said the global economic downturn highlights the need to reform laws to attract capital that was increasingly drying up.

“The financial crisis has re-enforced the urgency of reform needed to make countries stay more competitive in the global economy that is characterised by scarce mobile capital.”

According to the minister over-regulation and the creation of many centres of authority enhances corruption and affects productivity of firms.

She called for the easing of administrative burden of firms by reducing fees or simplifying the steps to comply with the Government regulations, saying this was the key to improvement in investment climate.

Bbumba, citing a donor funded pilot project on the implementation of regulatory best practices in towns like Entebbe municipal council, said the implementation made the town one of the best performing local council in the country.

“Results from the pilot shows that time to get a license was reduced by 90% while the compliance cost to firms was reduced by 75%. Voluntary compliance increased to 47%, leading to 40% increase in revenues,” the minister said.

Kundavi Kadiresan, World Bank’s country manager, said at the meeting that Uganda was rated as a good performer in Africa, by a global trade logistics report, due to it’s efforts to improve efficiency in the movement of goods at the border.

She however noted that more work needs to be done on the ease of doing business in the country.

“The lessons on how regulatory reforms can be done by other good performers will help us create synergies in the East African trading block,” she said.

The meeting, organised by the World Bank, brought together key government officials and reformers from Burkina Faso, Burundi, Kenya, Mauritius, Rwanda, Tanzania, and Zambia.

They discussed business environment reforms implemented over the last year and shared lessons learned.

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