E-services key to Uganda's development

Job-creating e-services such as call centers have been identified as ingredients in Uganda's next stage of development if the country is to attain its desired growth targets.

There is a need for a new focus on e-services alongside infrastructure, agriculture and regional markets, said Paul Collier, a professor of economics and the director of the Centre for the Study of African Economies at Oxford University.

Presenting a paper on Africa's growth experience during the launch of Uganda's Country Economic Memorandum (CEM) in Kampala recently, Collier recognized the country's vibrant communications sector and the high number of young people with university degrees who cannot find work.

It is this untapped resource that an e-services industry can take advantage of, but that can only happen if the available communications infrastructure is boosted by the availability of broadband Internet at cheap rates, Collier said.

That availability will come by the end of next year, when at least three undersea fiber-optic cables land at the East African coast.

To lay the groundwork for the types of e-services that Collier spoke of, the Uganda Ministry of ICT is developing a broadband infrastructure to handle the country's bandwidth requirements. The Uganda Broadband Infrastructure Strategy Team has been tasked with developing a well researched and informed position on the options for enabling Uganda to access international broadband infrastructure networks at the earliest opportunity.

In addition, governments in the region are at various stages of implementing national data transmission backbones. Uganda has already completed phase one of the implementation, which has linked a major section of the economic and administrative hub of the country.

Like other countries in this region, however, Uganda faces high costs for Internet bandwidth, as it is only available via satellite.

Titled "Moving Beyond Recovery: Investment and Behavior Change for Growth," the CEM takes stock of Uganda's past growth, examines the key binding constraints to further growth, and analyzes alternative growth paths and investment financing. The review explains that sound economic policies have underpinned Uganda's impressive economic growth since the early 1990s.

In the 1990s, Uganda's economy grew at an average of about 6.9 percent per annum, which was close to growth rates experienced in the East Asian and Pacific regions. During this same period, Uganda's per capita income growth was recorded at an average of about 3.2 percent and was ranked 15th among 152 countries.

More recently, while the economy faced major shocks -- including a terms of trade deterioration of over 40 percent, a biting energy crisis and a prolonged drought -- growth over six years up to 2005 to 2006 remained robust at an average of 5.5 percent.

The CEM concludes, however, that Uganda's high population growth rate of 3.3 percent per annum cannot sustain high per capita income growth rates. And, with Uganda's workforce set to double in the coming 15 years, the major challenge facing policy makers will be to facilitate job-creating private investments beyond agriculture.