Information Paper On CICS(2011-2015)

INFORMATION PAPER ON  CICS (2011-2015) STRATEGY TO PERMENENT SECRETARIES FORUM.
    I.Introduction.

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

                                                                                                                                                                                                                                                                                                                       

 

Pillar

2011/12

2010/11

Change

1

Institutions

98

104

+6

2

Infrastructure

128

127

-1

3

Macroeconomic    Environment

127

114

-13

4

Health &    Primary Education

122

117

-5

5

Higher    Education & Training

125

127

+2

6

Goods Market    Efficiency

105

117

+12

7

Labour    Market Efficiency

26

27

+1

8

Financial    Market Development

66

72

+6

9

Technological    Readiness

111

112

+1

10

Market Size

89

92

+3

11

Business    Sophistication

115

120

+5

12

Innovation

90

104

+14

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.

                                                                                                                                                                                                                                                                   

        Country

2010/11

2011/12

Change

UGANDA

118

121

   -3

RWANDA

80

70

+10

KENYA

106

102

  +4

TANZANIA

113

120

   -7

BURUNDI

137

140

   -3

MAURITIUS

54

55

   -1

NIGERIA

127

127

    0

SOUTH AFRICA

54

50

  +4

BOTSWANA

76

80

   -4

EGYPT

81

94

 -13

ZIMBABWE

136

132

 +4

GHANA

114

114

    0

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:

     
  1. Mr Badagawa Gideon (Chairman)                     PSFU
  2.  
  3. Dr Bahiigwa  Godfrey                                     PMA
  4.  
  5. Mr Warwick Thompson                                   DANIDA
  6.  
  7. Ms Prud'homme Celine                                   EU
  8.  
  9. Dr Ssewanyana Sarah                                     EPRC
  10.  
  11. Mr Mutahunga Emmanuel                                MTTI
  12.  
  13. Ms Matovu Katiti Ovia                                     UFPEA
  14.  
  15. Ms Musoke Juliet                                            UFEA
  16.  
  17. Mr Kavuma John Bosco                                   NPA
  18.  
  19. Mr Mugerwa William                                       DANIDA
  20.  
  21. Dr Ngategize Peter                                        CICS
  22.  
  23. 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.
 
  Prioritized clusters
  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:

     
  1. Identify  Champions for clusters and private sector development
  2.  
  3. Launch  competitiveness mindset change campaign
  4.  
  5. Engage  the Press and Civil Society
  6.  
  7. Develop  Youth Focused Initiatives
  8.  
  9. Mainstream  competitiveness in public sector


  Increase Firm Level Competitiveness

     
  1. Increase  the provision of incubation services – in South Africa this is being offered  commercially by the private sector
  2.  
  3. Increase  the Supply of Quality BDS Services
  4.  
  5. Coordinate  BDS
  6.  
  7. Facilitate  Access to Capital (promote Investment Groups and Venture Capitalists).

Improve Uganda's Business Environment

     
  1. Address  Uganda's Cross Cutting constraints (the NDP Egg Analogy). 
  2.  
  3. Reduce  Hard Infrastructure Constraints
  4.  
  5. Minimize  soft gaps these include Commercial laws, institutional service delivery i.e  business and land registration,   commercial courts for business arbitration
  6.  
  7. Strengthen  PPP
  8.  
  9. 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.
  Conclusion.
  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.

 

Annual Forum

Speech by Rt. Hon. Prime Minister, Member of Parliament and Leader of Government Business at the 5th Forum National Competitiveness Forum, Sheraton Kampala Hotel, Thursday November 3rd 2011Read More »