Information Paper On CICS(2011-2015)
INFORMATION PAPER ON CICS (2011-2015) STRATEGY TO PERMENENT SECRETARIES FORUM.
Since 2000, Uganda's competitiveness and private sector development has been driven by five year strategies. In 2000 Cabinet approval the Medium Term Competitiveness Strategy for the private sector, 2000-2005.This was followed by the Competitiveness and Investment Climate Strategy (CICS), 2006-2010.
The Ministry of Finance, Planning and Economic Development, through the Competitiveness and Investment Climate Strategy (CICS) Steering Committee that is chaired by the Permanent Secretary/Secretary to the Treasury(PS/ST), has completed the design of the next five year competitiveness strategy. This strategy is due for launch on Thursday 20th October 2011 at Serena Hotel, Kampala.
Successful implementation of competitiveness strategies all over the World require leadership and ownership at the highest level of Government. It is in this light that the Ministry would like to have the Permanent Secretaries briefed on the design process and emerging strategy for 2011-2015.
II. Why Uganda needs to promote Competitiveness.
The vision of the National Development Plan (NDP) is; A transformed Ugandan Society from a peasant to a modern and prosperous country within 30 years. While the theme is; Growth, employment for socio economic transformation for prosperity.
However, a nation's prosperity depends on its competitiveness, based on the productivity with which it produces goods and services. This makes National Competitiveness an important element in achieving the NDP vision.
Competitiveness can be defined as:
"the set of institutions, policies, and factors that determine the level of productivity of a country"(GCR)
"the productivity with which a nation uses its human and natural resources (Michael Porter).
This means that macroeconomic competitiveness sets the potential for high productivity, but is not sufficient. Endowments (Resources) create a foundation for prosperity, but true prosperity is created by productivity in the use of endowments. Competitiveness is rooted in a nation's microeconomic fundamentals—the sophistication of company operations and strategies and the quality of the microeconomic business environment in which companies compete, hence the need for a strategy. The figure below illustrates this further:
What Determines National Competitiveness
In addition, other reasons for promoting national competitiveness are;
Regional integration presents a number of opportunities as it does challenges. To avoid being disadvantaged in this co-operation, Uganda needs to be more competitive.
In light of the recent national and global economic challenges, a national's growth and competitiveness are no longer optional. Building on other key national strategies, the CICS 2011-2015, articulates a plan that will ensure the growth of specific clusters, which will translate to jobs and increased exports receipts.
There is need to escaping what has been dubbed "The survival trap". Many developing countries like Uganda are trying to overcome a myriad of challenges. In this process they have got stuck in a survival trap. This is the tendency for individuals businesses, and nations to focus on short term crises at the expense of developing long term strategies for prosperity. Even when strategies are developed, this trap keeps them in a vicious cycle, of doing the same thing but only harder. For Uganda to gain greater levels of prosperity; it will need to break out of this trap. For this to happen there is need for a mindset change, one of the focuses of this strategy.
III.Uganda's Current Competitiveness Status
The table below shows a comparison of Uganda's performance in Global Competitiveness Index for 2011/12 and 2011/10. Uganda made improvement in 9 out of the 12 pillars, with the following pillars showing a decline; Infrastructure, Macroeconomic Environment, and Health & Primary Education.
Uganda's Competitiveness on the 12 Pillars 2011/12 and 2010/11
Health & Primary Education
Higher Education & Training
Goods Market Efficiency
Labour Market Efficiency
Financial Market Development
Source: Data extracted from Global Competitiveness Reports 2011/12 and 2010/11
Uganda's 2011/12 Performance on the GCI
Uganda overall performance on the GCI declined by 3 places in the 2011/12. This may be attributed to three factors:
1. Though Uganda improved in 9 of the 12 pillars measured by the GCI, other countries made greater improvements,
2. Uganda registered declines in 3 pillars as shown above,
3. The decline registered in the micro economic environment pillar was quite significant. In this pillar, Uganda slipped by a two digit figure (13 places)
Global Competitiveness Index 2011-2012: Performance of EAC Economies and Selected Countries.
Source: Data extracted from Global Competitiveness Reports 2011/12 available at http://gcr.weforum.org/gcr2011/
From the table above, in the EAC, Rwanda and Kenya registered positive results in overall rankings. Uganda,Tanzania and Burundi registered a decline.
IV.The New CICS Strategy 2011-2015
Toward the end of CICS 2006-2010 programme, there was need to develop a new strategy. Subsequently the matter was tabled to the CICS Steering Committee sitting on 20/12/2011.The Steering Committee set up a CICS Design Taskforce to drive the development of the new strategy. Members proposed to this committee were drawn from the private and public sectors and development partners. The full composition of the taskforce was as follows:
- Mr Badagawa Gideon (Chairman) PSFU
- Dr Bahiigwa Godfrey PMA
- Mr Warwick Thompson DANIDA
- Ms Prud'homme Celine EU
- Dr Ssewanyana Sarah EPRC
- Mr Mutahunga Emmanuel MTTI
- Ms Matovu Katiti Ovia UFPEA
- Ms Musoke Juliet UFEA
- Mr Kavuma John Bosco NPA
- Mr Mugerwa William DANIDA
- Dr Ngategize Peter CICS
- Mr Amumpaire Mark (Secretary) CICS
Task force went on to identify and appoint an International Consultant, Mr. Eric Kacou to drive the process. The process involved holding planning meetings, brain storming sessions, inviting keynote speakers to guide the Taskforce, and conducting regional workshops. In addition, a consultant was engaged to incorporate the EAC regional dimension in the strategy.
CICS Strategy Design Process
Task force appointed an International Consultant, Mr. Eric Kacou who has been facilitating the process. The process involved holding planning meetings, brain storming sessions, inviting keynote speakers to guide the Taskforce, and conducting regional workshops.In addition, a consultant was engaged to incorporate the EAC regional dimension in the strategy.
The prioritized clusters are: Coffee, Horticulture, Fisheries, Grain and Pulses, Edible oil, IT Services/BPO, and Tourism. In addition, the enabling cross cutting issues to be prioritized are: Construction and civil works, Finance,ICT, Education and training, and Energy.
Fostering a Competitive Mind Set
The Survival Trap
This is a tendency for individuals, businesses and nations to focus on short term crises at the expense of developing long term strategies for prosperity.
This vicious cycle keeps individuals poor, businesses struggling, and nations under developed.
To escaping this Trap, the strategy proposes the following measures:
- Identify Champions for clusters and private sector development
- Launch competitiveness mindset change campaign
- Engage the Press and Civil Society
- Develop Youth Focused Initiatives
- Mainstream competitiveness in public sector
Increase Firm Level Competitiveness
- Increase the provision of incubation services – in South Africa this is being offered commercially by the private sector
- Increase the Supply of Quality BDS Services
- Coordinate BDS
- Facilitate Access to Capital (promote Investment Groups and Venture Capitalists).
Improve Uganda's Business Environment
- Address Uganda's Cross Cutting constraints (the NDP Egg Analogy).
- Reduce Hard Infrastructure Constraints
- Minimize soft gaps these include Commercial laws, institutional service delivery i.e business and land registration, commercial courts for business arbitration
- Strengthen PPP
- Build Human Capacity and Expertise (training)
Driving focused execution.
The implementing sectors and agencies will allocate resources for implementing their respective priority activities identified in their sector annual budget proposals.
The Implementation of this strategy will need approximately 11 billion shillings per year for the next five years (see budget on next page).
However, it should be clarified that all these resource shall not be channeled to the CICS Secretariat. Some will be directly sent to the respective implementing agencies.
Budget for Implementation of CICS Strategy
Source: CICS Strategy 2011-2015
Institutional Arrangement and Launch of the Strategy.
The Secretariat shall continue operating under the Ministry of Finance Planning and Economic Development (MoFPED). However, given the scope of the CICS (2011-2015) Strategy, the Secretariat shall require support from government and development partners, for periodic technical assistance (TAs) to support implementation of specific targets earmarked in the strategy. The strategy is planned for be launched on Thursday 20th October 2011.
The Permanent Secretaries Forum is being asked to:
1. Note the background and process for the CICS 2011-2015 design
2. Note the broad priorities for 2011-2015, the selected priority clusters, the resource requirements (as indicated in the budget above) and institutional arrangements for implementation of the Strategy.
3. Note the proposed programme for the launch of the strategy.
4. Approve the CICS 2011-2015 priority areas, priority clusters, budget and institutional arrangement for implementation.
5. Provide any other guidance for successful completion, Launch and implementation of the CICS 2011-2015 Strategy.