NATIONAL PLANNING AUTHORITY

UGANDA: COUNTRY PRODUCTIVITY SITUATIONAL ANALYSIS

July 2008

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TABLE OF CONTENTS

LIST OF ACRONYMS.............................................................................................................................V

FOREWORD.............................................................................................................................................V

EXECUTIVE SUMMARY................................................................................................................VII

- CHAPTER 1-..........................................................................................................................................1

INTRODUCTION....................................................................................................................................1

1.1 BACKGROUND..............................................................................................................................11.2. OBJECTIVES AND SCOPE OF THE STUDY.................................................................................11.3. TERMS OF REFERENCE (TOR) OF THE ASSIGNMENT..........................................................21.4 OVERVIEW OF UGANDA’S PRODUCTIVITY SITUATION...........................................................3

- CHAPTER 2 -.........................................................................................................................................8

THE THEORETICAL FRAMEWORK...........................................................................................8

2.1 UNDERSTANDING PRODUCTIVITY...............................................................................................82.2. PRODUCTIVITY AND COMPETITIVENESS..................................................................................92.3. MEASURING PRODUCTIVITY.....................................................................................................102.3.1. Partial Productivity Measurement..............................................................................102.3.2 Total Factor Productivity (TFP) measurement.......................................................112.4. PRODUCTIVITY AND ITS BEFITS TO SOCIETY.......................................................................112.5 PRODUCTIVITY MOVEMENT.......................................................................................................122.2 BENCHMARKING PRODUCTIVITY WITH OTHER COUNTRIES...............................................121. The Japan Productivity Centre for Socio-Economic Development........................132. The National Productivity Council of India (NPC).......................................................143. The Malaysia Productivity Corporation (MPC).............................................................154. Productivity South Africa.......................................................................................................18

2.3 LESSONS DRAWN FROM THE ABOVE EXPERIENCE..........................................19

-CHAPTER 3-.........................................................................................................................................21

METHODOLOGY..................................................................................................................................21

3.1. THE SURVEY PLAN....................................................................................................................213.2. THE SURVEY QUESTIONNAIRE................................................................................................223.3. PRE-TESTING THE QUESTIONNAIRE.......................................................................................223.4 DATA ANALYSIS..........................................................................................................................22

-CHAPTER 4...........................................................................................................................................23

DESK REVIEW OF THE PRODUCTIVITY SITUATION IN UGANDA......................23

4.1. INSTITUTIONAL ARRANGEMENT..............................................................................................234.2 STATUS OF PRODUCTIVITY IN DIFFERENT NATIONAL SECTORS.......................................244.2.1 Agriculture.............................................................................................................................244.2.2 Industrial Manufacturing................................................................................................264.2.3 Small and Medium Enterprises in Uganda..............................................................274.2.4 Services Sector in Uganda..............................................................................................28

4.2.4.1 Education...........................................................................................................294.2.4.2 Health Sector.....................................................................................................354.2.4.3 Infrastructure and Support Services..................................................................364.2.4.4 Communication Sub-sector................................................................................364.2.4.5 Roads..................................................................................................................374.2.4.6 Railways and Petroleum Pipeline.......................................................................394.2.4.7 Water Transport.................................................................................................394.2.4.8 Air Transport Sub-sector....................................................................................404.2.4.9 Energy Sector.....................................................................................................414.2.4.10 Science and Technology...................................................................................42

-CHAPTER 5-.........................................................................................................................................43

PRESENTATION AND ANALYSIS OF FINDINGS.............................................................43

5.1. GENERAL INFORMATION ABOUT THE RESPONDENTS........................................................435.2. ASSESSMENT OF THE CURRENT STATUS OF PRODUCTIVITY IN UGANDA.....................46

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5.2.1 Factors Characterising the Current Status of Productivity..............................465.2.2 Government Support for a Conducive Productivity Environment..................485.2.3 Factors Responsible for the Non-existence of an NPO in Uganda.................485.3 FACTORS ATTRIBUTED TO PERCEIVED CHANGES IN PRODUCTIVITY...............................485.4 Sectors Perceived to be most Productive in Uganda...............................................505.5. Critical Actions Necessary to Improve Productivity in Uganda.........................515.6. Level of Awareness and Commitment to productivity...........................................525.7 Level of expectations on the role and benefits of the proposed NPO...............56

5.7.1 Perceived Benefits.................................................................................................565.7.2 Envisaged Roles of the Proposed NPO..................................................................575.7.3 The Need for a Coordinating Institution...............................................................585.7.4 Prevailing Factors or Perceptions likely to Promote or Impede the Establishment of an NPO in Uganda......................................................................................................585.7.4 Potential Strategic Partners..................................................................................59

-CHAPTER 6-.........................................................................................................................................61

POLICY IMPLICATIONS AND RECOMMENDATIONS..................................................61

6.1 INSTITUTIONAL ARRANGEMENTS.............................................................................................616.1.1 Structure................................................................................................................................616.1.2 Mandate and Functions of the NPC............................................................................636.1.3 Funding Issues.....................................................................................................................646.2. CREATING AN ENABLING ENVIRONMENT FOR PRODUCTIVITY ENHANCEMENT..........656.3. PRIORITIZING SECTORS PERCEIVED TO BE MOST ACTIVE IN UGANDA..........................656.4 CRITICAL ACTIONS NECESSARY FOR IMPROVING PRODUCTIVITY IN UGANDA..............656.5 CONCLUDING REMARKS AND WAY FORWARD......................................................................666.5.1 Conclusions...........................................................................................................................666.5.2 Way Forward................................................................................................................................67

LIST OF REFERENCES....................................................................................................................68

ANNEXES.................................................................................................................................................69

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LIST OF TABLES

Table 1.1: Characteristic of Manufacturing Entrepreneurs ……………………………………………………………13

Table 1.2: Education and Experience of Manufacturing Entrepreneurs ……………..……………………….. 13

Table 1.3: Median Ratio of Capital to Labour in Manufacturing …………………………………………………… 14

Table 1.4: Median Annual Value Added per Worker in Manufacturing Firms …………………………………15

Table 1.5: Unit Labour Cost in Manufacturing …………………………………………………………………………….16

Table 2.1: Membership categories and the different fee structures ……………… ……………………………….27

Table 4.1: Comparison of Existing Yields …………………………………………………………………………………...33

Table 4.2: A Summary of the Number of SME Owners by Region and Gender………………………………..37Table 4.3: Access to Telecommunication Services in Uganda ……………………………………………………….46

Table 4.4: Uganda Internet Users ……………………………………………………………………………………………..46

Table 4.5: Uganda Share of Roads in Good/Fair conditions ………………………………………………………...46

Table 4.6: Share of Infrastructure Charges in Total Cost by Sector (2000/01) ……………………………….47

Table 5.1: Category of Respondent Organisations ………………………………………………………………………..53

Table 5.2: Activities Relating to Productivity Improvement ………………………………………………………….53

Table 5.3: Size of Establishment ………………………………………………………………………………………………..54

Table 5.4: Factors characterizing productivity …………………………………………………………………………….55

Table 5.4: Factors characterizing productivity …………………………………………………………………………….56

Table 5.5: Ranking of Factors for the Non-existence of an NPO in Uganda ……………………………………58

Table 5.6 Respondents’ Perception on how Different Factors Have Contributed to Changes in Productivity…………….. ………………………………………………………………………59Table: 5.7 Ranking of Sectors Based on Perception of Contribution to the Economy ……………………..60

Table 5.8 Ranking of Critical Actions Necessary to Improve Productivity in Uganda ……………………..61

Table 5.9 Interpretation of the Application of the Productivity Concept by the Respondents …………………………………………………………………………………………………………………63Table 5.10 Demonstration of Commitment to Productivity ………………………………………………………….64

Table 5.11: Comparison of Uganda’s Productivity Status with other Countries ……………………………...65

Table 5.13: Perceived Benefits of the Proposed NPO …………………………………………………………………66

Table 5.14: Envisaged Roles of the Proposed NPO ……………………………………………………………………..67

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Table 5.15 Selection of Priority Programmes for the Proposed NPO …………………………………………….68

Table 5.16: Factors Promoting or Impeding Establishment of an NPO …………………………………………69

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LIST OF ACRONYMS

AGOA Africa Growth and Opportunities ActAPO Asian Productivity OrganizationBNPC Botswana National Productivity CentreCICS Competitiveness and Investment Climate StrategyCOFTU Central Organization of Free Trade UnionsCOMESA Common Markets of East, Central and Southern AfricaComSec Commonwealth Secretariat - LondonEAC East African CommunityEPRC Economic Policy Research CentreFUE Federation of Uganda EmployersMAAIF Ministry of Agriculture Animal industry and FisheriesMGLSD Ministry of Gender Labour And Social developmentMoES Ministry of Education and SportsMPS Ministry of Public ServicesMTAC Management Training Advisory CentreMTCS Medium Term Competitiveness strategy MTTI- Ministry of Tourism, Trade and Industry NARO National Agricultural Research OrganizationNARS National Agricultural Research SystemsNCHE National Council of Higher EducationNEMA National Environment Management AuthorityNOTU National Organization of Trade UnionsNPA National Planning AuthorityNPC National Productivity CentreNPO National Productivity OrganisationPAPA Pan African Productivity AssociationPEAP Poverty Eradication Action planPFA Prosperity for AllPMA Plan for Moderation of Agriculture PSFU Private Sector Foundation of UgandaSSA Sub Sahara AfricaUBOS Uganda Bureau of StatisticsUCDA Uganda Coffee Development Authority UEPB Uganda Export Promotion BoardUIA Uganda Investment AuthorityUIRI Uganda Industrial Research InstituteUMA Uganda Manufacturers Association UMACIS Uganda Manufacturers Association Consultancy and

Information Services UMI Uganda Management InstituteUNBS Uganda National Bureau of StandardsUNCCI Uganda National Chamber Of Commerce and IndustryUNIDO United Nation Industrial development organizationUPE Universal Primary EducationURA Uganda Revenue AuthorityUSE Universal Secondary EducationUSSIA Uganda Small Scale Industries Association UTB Uganda Tourism BoardUWEAL Uganda Women Entrepreneurs Association LimitedWB World Bank

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FOREWORD

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Executive Summary

Introduction

The NPO Capacity Building Project follows a SADC/EAC regional seminar held in 2005 in Gabarone that culminated in a Charter of the Network of NPOs and countries intending to establish NPOs in the region.

The Uganda Country Productivity Situation Analysis Study is part of the NPO Capacity Building Project, a three year initiative facilitated by the Botswana National Productivity Centre (BNPC) and sponsored by the Commonwealth Secretariat. The National Planning Authority (NPA) is the focal point for this project in Uganda. The overall aim of this project is to establish and strengthen a sustainable NPO in Uganda through capacity building, knowledge transfer and information exchange.

Desk Review

The study carried out through a desk review process and a primary survey on key players in the productivity movement sought to achieve the following objectives:

Establish the current status of the productivity movement in Uganda

Establish the factors responsible for the current productivity levels in the country

Confirm the need for a national Productivity Organisation (NPO) and recommend the most feasible institutional framework for its establishment

Establish the key stakeholders for establishing and deepening the productivity movement in Uganda

The study has noted that among the three original East African Countries (Uganda, Kenya and Tanzania), Uganda lies behind the other two in terms of productivity. Uganda is a net importer of manufactured goods and has so far been unable to match the competition with the other leading exporters in Africa such as South Africa, Mauritius and Kenya. Because of the poor productivity situation, Uganda’s exports comprise of mainly primary products with inadequacies observed in terms of technology, skills and appropriate infrastructure. Agriculture, which is the largest employer, continues to exhibit major shortcomings and as a result, farmers’ yields continue to be far less than the yields obtained on research stations, rendering agriculture unprofitable to most farmers who are largely small holders.

The study identifies numerous challenges amongst the sectors considered to be critical for national productivity enhancement. The sectors examined include: Agriculture; Industry; SMEs; Education

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and Training; Health; Infrastructure and other support services. Among the highlights, the study notes the following issues:

a. Uganda’s firms utilise only 60% of their installed capacity largely on account of the inadequate infrastructural provision

b. That at about $1,500 of capital per worker in 2003, Uganda was reported to have had the lowest capital intensity compared to Kenya, Tanzania, China and India

c. In terms of productivity of capital, every dollar of capital in Uganda generates twice as much in value-added in a year’s time as a dollar of capital does in neighbouring countries.

d. Value added per worker in Uganda is 68 percent lower than that in India and 96 percent lower than that in China. Tanzania’s labour productivity is 28% higher than that of Uganda

e. Producers in Agriculture are mainly subsistence farmers facing a plethora of constraints, hence poor yields which are a 1/3 of the attainable potential. There is therefore ample room for improvement through yield (productivity) increases.

f. Despite the provision of free Primary, and to some extent Secondary education, there continues to be high levels of school drop-outs estimated at 78% by the end of 7 years of schooling.

g. The need for technical and vocational education is very critical in terms of raising the competitiveness index for any country. Unfortunately, most students in Uganda consider physical work as a punishment. Moreover, it is perceived both in government and the private sector as outdated as it does not correspond to the needs of the private sector.

h. Most of the physical/economic infrastructure is performing below optimum levels although the government has been very vigilant in strengthening these facilities. Whereas communication has continued to show steady progress, there are serious deficiencies in the rail and road transport sub sectors. These sectors must improve and become more competitive to offset the problem of Uganda being a land locked country.

The study draws lessons from the experiences of countries with NPOs, and critically examines South Africa, Japan, Malaysia and India as case studies. Among the key lessons learnt, the study notes the following:

a. That productivity is not a new concept. It has been around since the 1930s and has helped many countries that were in difficulty to emerge as the leading global economies today. Therefore, many countries have embraced the idea of establishing NPOs to spearhead the productivity initiative.

b. Productivity and competitiveness go hand in hand. Firms can increase productivity through research and development; providing new plant, equipment and machinery; Product simplification, improvement on existing methods and procedures; and increasing the effectiveness of employees.

c. For a country to develop a strong productivity culture there must be in place an effective campaign to sensitize people on the importance of productivity and its application.

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d. Governments have been largely responsible for the establishment of NPOs in most countries.

e. The tripartite arrangement of Government, organised labour, business enterprises and non governmental organisations is a prerequisite to the success of the productivity movement.

f. Major activities identified for most NPOs include; research and development, advocacy, knowledge generation and dissemination, nurturing innovative and creative culture, productive capacity building, enterprise productivity and competitiveness, management improvement, quality improvement, technology development, skills improvement and productivity awards.

Survey Findings

To understand the perception and opinions of the key stakeholders on productivity, a survey targeting fifty respondents was conducted. The survey focused on the four objectives of this study and arrived at the following findings: That the factors which mirror image the current productivity levels

in the country are still far from what is desirable to provide a meaningful challenge to other competing countries. These factors include; the quality of goods & services; the quality of human resources, education and training facilities, science and technology deepening, infrastructure, policies and regulations, public awareness, general factor productivity and many other related factors.

The following factors were identified as having been some of the major contributors to the undesirable productivity levels in the country: the education curriculum, nature of tertiary training/vocational training education, access to the sea ports, Industrial parks, Coordination and harmonization of development planning, quality of Air and rail transport, Research, innovation, and development and Public awareness.

The study has confirmed the need for a National Productivity Organisation (NPO) and recommends that in order to ignite the process; the most feasible institutional arrangement at the moment is to commission, as an interim arrangement, an existing government institution to be the apex body for coordinating the productivity movement in Uganda.

The study has identified key stakeholders for establishing and deepening the productivity movement in Uganda. These are profiled and presented in annex 3.

Way Forward1. The National Planning Authority in collaboration with the BNPC

and the ComSec should organize a high profile National Conference of key stakeholders to discuss the findings of the survey. The conference should achieve three major objectives: (i) Facilitate national dialogue on the underlying challenges and opportunities; (ii) Raise stakeholder awareness of the critical role of a National Productivity Organisation; and (iii) Consolidate

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national consensus and commitment on the need to establish an NPO.

2. Prepare and agree on a National Plan of Action (PoA) for launching and implementing a National productivity Movement in Uganda.

3. Establish networks with international productivity partner institutions to secure technical support, benchmarking and capacity building.

4. Secure Cabinet approval of the proposed arrangements for the Productivity movement in Uganda.

5. Identify sources of funding, and champions for the productivity movement.

6. Launch the National Productivity Council (NPC) comprising the membership identified in section 6.1.1 and set up the National Productivity Unit within the National Planning Authority. A network of collaborating institutions should be established to steer the process at different levels of national development. Detailed functions of the NPC/NPU are as identified in section 6.1.2.

7. Conduct preliminary awareness campaigns on productivity; targeting government, the private sector and civil society.

8. Integrate productivity as a crosscutting issue into the National Development Plan.

9. Formulate a government policy on productivity.10. In the process of implementing the productivity initiative,

address the following as the top priority areas:a. Addressing Agricultural Productivityb. Promoting principles of Total Quality Managementc. Energy and infrastructure developmentd. Addressing Industrial productivitye. Restructuring of the education and training systemf. Dealing with attitude changeg. Developing the necessary competences for productivity

managementh. Strengthening vocational trainingi. Strengthening entrepreneurship trainingj. Establishment of Standards and promoting the quality and

safety of all goods and services.k. Addressing productivity in the Public Servicel. Entrenching principles of good corporate governancem. Establishing a National Productivity Organisationn. Developing a government policy on productivity o. National awareness and advocacy campaignsp. Improving management competence, management systems,

HRD/HRM systems and practicesq. Security and good governancer. Promoting International Standard Classification for

enterprises (ISO)

Promoting national productivity is a huge but inevitable undertaking for the nation in general and NPA in particular. Strong partnerships and additional resources both in terms of manpower and finance will be required in order to effectively steer the process forward. The NPC and NPA should convene to map out a strategy for addressing this challenge.

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- Chapter 1-

Introduction1.1 Background

In 2005, a needs assessment exercise was conducted1 with a view to establishing the state of affairs and requirements of countries in the SADC-EAC region and the role of National Productivity Organisations (NPOs) as catalysts for sustainable economic development and competitiveness. The findings were deliberated upon in a regional Seminar held in November 2005 in Gabarone resulting in the signing of the Charter of the Network of National Productivity Organizations of the Southern African Development Community and East African Community. Uganda, represented at the seminar by the National Planning Authority and the Uganda Management Institute, is a founder member and was signatory to the Charter.

The NPO Capacity Building Project is a three-year initiative facilitated by the BNPC and sponsored by the Commonwealth Secretariat. It is intended to strengthen NPOs where they exist, establish new ones where they do not exist, enhance knowledge transfer and information exchange in countries within the SADC-EAC Region. The project puts emphasis on collaborative efforts to develop, share and transfer skills and competencies required to strengthen National Productivity Organizations in accordance with specific needs and circumstances of individual member countries.

As part of achieving the objectives of the Capacity Building Initiative; in March 2006, a rapid assessment exercise was conducted in five countries including Uganda. Namibia and Uganda were found to be in a better state of readiness and were therefore, selected to be assisted in setting up NPOs. It is against this background that a decision to carry out a more in-depth study on the state of productivity in Uganda was taken.

On April 10th 2008, Botswana National Productivity Center (BNPC) and Mr. Robert Kimera, the Consultant, signed a Contract for the later to conduct a National Situational Analysis on the Productivity Situation in Uganda.

The study is under the management of the BNPC assisted by the National Planning Authority (NPA). A National Reference Group was appointed comprising representatives from the National Planning Authority, Federation of Uganda employers, National Organisation of Trade Unions, Ministry of Gender, Labor and Social Development, Ministry of Trade, Tourism and Industry, Uganda Management Institute, Uganda Industrial Research Institute and Plan for Modernisation of Agriculture for ensuring the objectives and outputs of the study are met and accurately reflect the situation within the country.

1.2. Objectives and Scope of the StudyThe overall aim of the NPO Capacity Building Project is to establish and strengthen a sustainable NPO in Uganda through capacity 1 Undertaken by the Botswana National Productivity Center (BNPC)

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building, knowledge transfer and information exchange so that it can impact positively on the national economy. This situation analysis study however, comes under the purview of this overall aim to achieve the following specific objectives:

Establish the current status of the productivity movement in Uganda

Establish the factors responsible for the current productivity levels in the country

Confirm the need for a national Productivity Organisation (NPO) and recommend the most feasible institutional framework for its establishment

Establish the key stakeholders for establishing and deepening the productivity movement in Uganda

The study targeted responds in Kampala but who represent diverse interests throughout the country. The consultant was required to produce a detailed report addressing the terms of reference for presentation at the National Conference on Productivity to be held after the study. This report has been and is herewith presented in seven chapters as follows:

Chapter1: Presents the introduction

Chapter 2: Presents the theoretical framework largely confined on defining productivity and to bring the context of that definition to bear with the local situation

Chapter 3: Presents the methodology that has guided the process of conducting the study

Chapter 4: Benchmarking Productivity. The chapter focuses largely on the institutional arrangements, nature of activities performed, target groups and social-economic partners and other related issues

Chapter 5: Presents a Desk Review of the Productivity Situation in Uganda focusing on the institutional arrangement and the status of productivity in different National sectors.

Chapter 6: Presents the Presentation and analysis of Survey Findings

Chapter 7: Presents the policy implications /recommendations and way forward

1.3. Terms of Reference (ToR) of the Assignment

The consultant was required to fulfill the following Terms of Reference:

a) Identify factors and /or trends that characterize the current status of productivity in the country;

b) Identify factors attributed to perceived increase or decrease of productivity levels in the country;

c) Identify sectors that are perceived as most or least productive in the national economy;

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d) Elicit views of the leadership among social partners (business sector, labour movement, government, NGOs and academia) regarding critical actions necessary to improve productivity in the country;

e) Determine levels of productivity awareness and commitment to productivity improvement by leadership among social partners;

f) Determine level of expectations among the leadership of social partners regarding the role and benefits of the proposed NPO;

g) Examine major prevailing factors/perceptions that are likely to promote or impede the establishment of an effective and sustainable NPO in the country; and

h) Identify and assess organizations/institutions among social partners with most potential and interest to be key strategic partners to the Government in establishing the NPO.

1.4 Overview of Uganda’s Productivity Situation

1.4.1. Introduction

Prior to the current initiative coordinated by the National Planning Authority, there were several attempts to bring to the forefront issues to do with productivity in Uganda. This was through the collaboration of the Ministry of Gender, Labour and Social Development, the Federation of Uganda Employers, The National Organisation of Trade Unions, the Government of Norway, the East African Business Council and other partners. These efforts were however beset with several impediments and were not successful. The formation of the SADC/EAC productivity Network and the sharing of knowledge between the Botswana National Productivity Centre and Uganda (through the National Planning Authority) was therefore a welcome intervention that helped to revive the matter.

Uganda is a net importer of most manufactured goods and has so far been unable to match other leading exporters in Africa; such as South Africa, Mauritius and Kenya. Uganda’s exports comprise mainly primary products on account of inadequate capacity in form of technology, skills and appropriate infrastructure. Most economic activities are characterized by low level total factor productivity leading to the lack of competitiveness in the domestic, regional and international market situation.

Among the three East African countries, Uganda lies behind the rest in terms of productivity. Most of the products and services produced within Uganda are of relatively average quality. With the elimination or reduction of tariff and non-tariff barriers within the regional markets (EAC and COMESA), Uganda has to address the productivity question if it is to take advantage of the market opportunities offered by this economic integration.

Already some sectors, despite the large labour force Uganda has, prefer to employ foreign workers on account of low level labour productivity in Uganda. Value added per worker in Uganda is 68 percent lower than that in India and 96 percent lower than that in

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China. Even the gap between Uganda and its neighbors is fairly substantial. In Tanzanian firm labour productivity is 28 percent higher than in Ugandan firms, and in Kenyan firms it is just as high as in Indian firms2.

Agriculture accounts for about 77% of the total employment of Uganda’s population. However, its growth remains low relative to other sectors and its contribution to GDP is continuously declining. Problems of low agricultural productivity and land degradation appear to be getting worse. Farmers’ yields are typically less than one-third of the yields obtained on research stations, and yields of major crops including maize, matooke, beans, sorghum, millet, and coffee have declined since 1990. In some regions of Uganda, 60 to 90 percent of the total land is affected by soil erosion. Soil fertility depletion in Uganda is occurring at among the highest rates in Sub Sahara Africa, with an estimated average annual rate of total depletion of 70 kilograms of nitrogen, phosphorus, and potassium per hectare.

Though productivity improvement is key to Uganda’s economic development and competitiveness, very little research has been done in this area regarding Uganda’s status. The latest most comprehensive studies on Uganda were by the World Bank/UMACIS 2004 Investment Climate Survey and UNIDO 20053. This overview section therefore, draws heavily on the findings of these two studies.

1.4.2. Characteristics of Ugandan Enterprises and Entrepreneurs1.4.2.1 Ethnicity

Historically, the business sector in Uganda was dominated by people of Asian origin until 1972 when most of them were expelled from Uganda and their businesses handed over to indigenous Africans. However, in the early 1980s a number of Asians started returning to Uganda and some of them repossessed their businesses or started up new ones. Though currently indigenous Africans own 70% of the firms in Uganda, most large enterprises still remain in the hands of Asians. This situation has implications on the business practices, education levels, work ethics and productivity in the different firms. For example the Asian entrepreneurs are found to be better educated, have more business experience, and have exposure to international business environments due to having worked in enterprises abroad. Their ability to access large loans is high and therefore in a better position to increase productivity through technology acquisition and employment of well qualified staff. Table 1.1 compares education levels of African and Asian entrepreneurs in Uganda.

Table 1.1: Characteristic of Manufacturing Entrepreneurs Entrepreneurs by highest level of education achieved

African

(%)

Asian

(%)

2 Source: World Bank, Investment Climate surveys, Uganda, 2002/03, Kenya, 2003, Tanzania, 2003, Zambia, 2003, China 2000 and India 1999.

3 Productivity Performance in Developing Countries: Country Case Study- Uganda

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None 4.4 0.0

Primary 11.5 0.0

Secondary 62.4 33.3

University 21.6 66.7

Average years of experience 3.8 8.1

Source: World Bank, RPED investment climate survey, Uganda, 2002/03.

1.4.2.2 Education Levels of EntrepreneursThe WB studies also found that 90% of Uganda entrepreneurs have at least Secondary school education and 40% of these have a University degree. A comparison with other countries revealed that this figure was smaller than that of Kenya and Nigeria, but larger than that of Mozambique. In comparison, almost all entrepreneurs in China and India were found to be in possession of a University degree. Table 1.2 below gives comparative figures on the education and experience of entrepreneurs in different countries.

Table 1.2: Education and Experience of Manufacturing Entrepreneurs

Entrepreneurs by highest level of education

Uganda

(%)

Kenya

(%)

Mozambique

(%)

Nigeria

(%)

China

(%)

India

(%)

None 3.4 0.0 0.0 3.1 0.0 0.4

Primary 8.1 4.0 17.8 5.21 0.1 0.6

Secondary 19.8 23.2 44.1 10.8 15.2 9.8

Vocational 29.2 13.4 23.5 - - -

University 39.6 59.4 14.7 70.8 84.7 89.2

Average years of experience

5.0 yrs 5.4 yrs - - 10.4 yrs

9.95 yrs

Share of entrepreneurs with foreign experience

21.6 22.9 - - - -

Source: World Bank, RPED investment climate surveys, Nigeria, 2001, Mozambique, 2002, Uganda, 2002/03, Kenya, 2003; and Investment Climate Unit firm surveys, China 2000 and India 1999.

1.4.2.3 Characteristics and Productivity of Capitali. Age of Capital Stock

According to the World Bank Investment Climate Assessment report 2004, by the year 2003, more than 40 percent of Uganda’s manufacturing firms had capital stock averaging less than 5 years old, and another 35 percent had capital stock averaging 5–10 years old. This was an indicator that the country’s capital stock is relatively young as compared to other SSA countries. For example, in most SSA countries most of the capital is more than 20 years old with Kenya for example having capital stock averaging 11-20 years old. Some of the reasons for this situation in Uganda are the intensive investment campaign carried out by the Uganda Investment Authority since the 1990s and the large inflows of foreign exchange that led to capital accumulation in the postwar period. It has not been ascertained whether the technology imported is of the latest model or not but

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what is clear is that a number of industries are still operating below their optimal capacity.

ii. Capacity UtilizationThe World Bank/UMACIS study also found that in terms of capacity utilization, Ugandan firms utilize only 60% of their installed capacity, with large firms using a greater proportion of their capacity than smaller firms. The possible explanation for this is that large firms may be having better-quality capital equipment, larger market share, and better access to labour and other inputs. A general problem to the business sector relates to infrastructural provision i.e. the poor quality of roads, rail and electricity supply.

iii. Capital IntensityAt about $1,500 of capital per worker in 2003, Uganda was reported to have the lowest capital intensity amongst the countries sampled whose capital intensity was found to be several times as large. Large firms in Uganda have the most capital per worker, more than four times the median for the sample. Micro firms have only slightly more than half the median. Studies also found that exporters (firms exporting 10 percent or more of their annual sales) had substantially more capital per worker (a median of $3,277) than non exporters ($1,408), and foreign owned firms substantially more ($3,930) than domestically owned firms ($1,408). Table 1.3 has been extracted to demonstrate this.

Table 1.3: Median Ratio of Capital to Labour in Manufacturing

(U.S dollars per worker)

Firm Size Class (employee)

Tanzania Uganda Kenya India China

Micro (<10) 1,040 845 1,859

Small (10-49) 7,433 1,408 7,436 2,000 5,434

Medium-size (50-99) 7,493 2,453 16,816 2,962 6,070

Large (100+) 19,279 6,667 11,420 4,158 8,525

Al firm size class 7,757 1,464 11,496 2,380 7,654

Source: World Bank, RPED investment climate surveys, Uganda, 2002/03, Kenya, 2003, Tanzania, 2003, and Investment Climate Unit firm surveys, China 2000 and India 1999.

iv. Productivity of CapitalUganda was found to have a relatively higher capital productivity compared with that in other Sub-Sahara Africa countries. In Uganda, despite capacity utilization of only 60 percent, every dollar of capital generates twice as much in value added in a year’s time as a dollar of capital does in neighboring countries.

v. Labour ProductivityThe gap in labour productivity between Ugandan firms and firms in other countries is substantial. Value added per worker in Uganda is 68 percent lower than that in India and 96 percent lower than that in China. Tanzania’s labour productivity is 28% higher than that of Uganda.

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Variations in productivity of labour were also found between micro, small and large enterprises in Uganda. Micro enterprises were reported to be the least productive, with value added per worker at 50 percent that of the median for the sampled firms. Small firms were at 80 percent of the median. The productivity of labour in these two categories (micro and small) were found to be much lower than other SSA countries, a characteristic that could have been caused by the large disparities in education levels across firm size classes. Firms with 50 or more workers showed labour productivity above the median. In large firms labour productivity was three times the median for the sample—comparable to levels for large firms in other African countries and similar to those for medium-size firms in India.

Labour productivity in Uganda also varied between other groups of firms. Exporters had significantly higher value added per worker ($2,901) than non exporters ($1,117). And foreign firms produced much more per worker ($2,747) than domestic firms ($1,182). This situation is reflected in Table 1.4.

Table 1.4: Median Annual Value Added per Worker in Manufacturing Firms

(U.S dollars)

Firm Size Class (employee)

Tanzania Uganda Kenya India China

Micro (<10) 989 578 3,147 1,920

Small (10-49) 1,526 897 2,436 2,931 4,595

Medium-size (50-99) 3,288 1,379 4,127 3,228 4,797

Large (100+) 3,499 3,338 4,138 5,321 4,193

All firm size class 2,061 1,085 3,457 3,432 4,397

Source: World Bank, Investment Climate surveys, Uganda, 2002/03, Kenya, 2003, Tanzania, 2003, Zambia, 2003, China 2000 and India 1999.

vi. Unit Labour CostsThe wages paid to workers, and the output of these workers relative to their wages, are the two major indicators of unit labour cost of a country. In Uganda unskilled production workers in manufacturing were found to earn about US$57 a month on average—less than comparable workers in the Philippines, Kenya, Nigeria, and Thailand but more than in India, where unskilled workers earn about US$45 a month. Comparative figures for China showed that unskilled production workers earned about $85 a month on average. Considering these figures, unit labour cost is found to be higher in countries that have higher wages or lower labour productivity (or both). Countries in Sub-Sahara Africa, including Uganda, have higher unit labour costs today than East Asian economies had at roughly equivalent stages of development. Earnings in Africa today are about two-thirds higher than they were in East Asia in the 1960s and 1970s, while productivity in Africa is about one-fourth lower.

Table 1.5: Unit Labour Cost in Manufacturing (Median ratio wages to value added)

Firm Size Class (employee)

Tanzania Uganda Kenya India China

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Micro (<10) 0.45 0.33 0.29

Small (10-49) 0.56 0.41 0.38 0.30 0.38

Medium-size (50-99) 0.42 0.41 0.41 0.25 0.34

Large (100+) 0.25 0.35 0.34 0.24 0.29

Al firm size class 0.39 0.39 0.36 0.27 0.32

Source: World Bank, Investment Climate surveys, Uganda, 2002/03, Kenya, 2003, Tanzania, 2003, Zambia, 2003, China 2000 and India 1999.

Disaggregating the data for Uganda by firm size class shows that the unit labour cost is highest for small and medium-size firms, and lowest for micro and large firms. Large firms in Uganda have much higher unit labour costs than those in Tanzania, India, and China while lagging behind their counterparts in China than do medium size firms (in percentage terms). The unit labour cost also ranges widely across manufacturing sub sectors: it is lowest for the textile and garment industry, and highest for the wood and furniture sub sector. The unit labour cost for exporters (0.24) is less than half that for non exporters (0.55). Foreign firms have lower unit labour costs than domestic firms. And firms owned by non indigenous entrepreneurs have lower unit labour costs than those owned by indigenous entrepreneurs. Total Factor Productivity and Technical

vii. Illness and Workdays LostThe WB/UMACIS survey reported that about 24.7 percent of workers surveyed reported having been ill within the previous 30 days. This share ranged from 17.4 percent in construction to 21.2 percent in tourism, 23.2 percent in commercial agriculture, and 25.6 percent in manufacturing. Illness led to an average loss of 3.2 workdays over a 30-day period across all sectors. In manufacturing, where about a quarter of the workforce reported having been ill within the previous 30 days, illness led to an average loss of about 3.1 workdays over the 30-day period—or about 15 percent of available workdays. Under the assumption of a constant rate of illness over a year, that translated into 37.2 days of production lost per worker on average. Based on the total factor productivity estimation, a 15 percent loss of labour translates into a production loss of 11 percent. The share of workers who reported having been ill in the previous 30 days grew with the size of the firm.

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- Chapter 2 -

The Theoretical Framework

2.1 Understanding Productivity

Countries that have achieved high levels of development and prosperity very well know the important role productivity improvement has played in this process. In Canada, for example, the role of productivity is well attested to by Andrew Sharpe4 who said that: “Productivity is our economic destiny. At 1 per cent productivity growth, living standards double in 70 years. If we can raise productivity growth to 3 per cent, we can double living standards in 24 years. If we can attain 2 per cent productivity growth over the next 30 years, financial problems related to aging in terms of the cost of health care and pensions will largely evaporate. Thus if we do well in terms of our productivity, we will solve many potentially divisive societal problems”.Therefore, in order for Uganda to develop a culture of productivity improvement, the concept must be clear to all in terms of its definition, measurement and benefits to society.Productivity has come to mean different things to different people with each having their own interpretation. Its real meaning and interpretation is still not clearly understood. A large number of misleading concepts, fallacies and inadequacies exist in its perception, measurement and management and it is still therefore, a great challenge for countries to raise public awareness on the concept. Given the complexity of defining productivity, this study assumes the following definition.

Productivity is defined as the amount of output per unit input achieved by a firm, an industry or a country. It is the measure of how well resources are brought together in organizations and utilized for accomplishing a desired set of results or outcomes (P.G. Mankad, D.G. NPC India).

Productivity is an attitude of mind. It is a mentality of progress of the constant improvement of that which exists. It is the certainty of being able to do better today than yesterday and continuously. It is the continual effort to apply new techniques and methods. It is the faith in human progress. It is elimination of waste in all forms and stands for efficiency and improved quality in all activities.

Productivity is the value of output produced by a unit of labor or capital. A rising standard of living depends on the capacity of nation’s firms to achieve high levels of productivity and to increase productivity over time. A nation’s firms must relentlessly improve productivity in existing industries by raising product quality, improving product technology, or boosting production efficiency. A

4 Testimony by Andrew Sharpe , CSLS Executive Director given to the Senate Standing Committee on Banking, Trade and Commerce hearings on productivity, May 11, 2005, Ottawa, Ontario

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nation’s firms must also develop the capabilities required to compete in more and more sophisticated industry segments, where productivity is generally higher.

OutputProductivity = --------- Input

In a nutshell, productivity should be understood as doing things right at the least possible cost in the least possible time with the highest possible quality and to the maximum level of satisfaction of the customers and employees. Productivity means "producing better" and not necessarily "producing more". With high quality we will have fewer rejects, less rework, less wastage, lower cost and hence better sales and higher productivity. Productivity is therefore, the key word in raising competitiveness and consequently the prosperity of a nation. It is responsible for the continued growth of the key sectors of the economy (agriculture, manufacturing, services, mining and others).

2.2. Productivity and Competitiveness

Productivity and competitiveness are two important yet closely related phenomenons. Many scholars find it difficult to make a distinction between the two concepts. According to Micheal Porter, the only meaningful concept of competitiveness is productivity. Activities leading to productivity enhancement also impact positively on the level of competitiveness of the nation.

Porter mentions that the basic unit of understanding competition is the industry. An industry is a group of competitors producing products or services that compete directly with each other. Competitiveness of a country is based on the competitiveness of various industries and/or enterprises (Porter 1990, p. 33). Competitiveness of a country depends on the competitiveness of enterprises and their products (Peura 1979, p. 15).

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The diamond model of Michael Potter for the competitive advantage of Nations offers a model that can help to understand the comparative position of a nation in global competition. According to Porter, as a rule, competitive advantage of nations is the outcome of 4 interlinked advanced factors and activities in and between companies in these clusters. These can be influenced in a pro-active way by Government. Interlinked advanced factors for competitive advantage

a. The Strategy, Structure and Rivalry of Firms. The world is dominated by dynamic conditions. Direct competition compels firms to work for increases in productivity and innovation.

b. Demand Conditions. If the customers in an economy are very demanding, the pressure facing firms to constantly improve their competitiveness via innovative products through high quality, etc, will be greater.

c. Related Supporting Industries. Spatial proximity of upstream or downstream industries facilitates the exchange of information and promotes a continuous exchange of ideas and innovations.

d. Factor Conditions. Contrary to conventional wisdom, Porter argues that the "key" factors of production (or specialized factors) are created, not inherited. Specialized factors of production are skilled labor, capital and infrastructure. "Non-key" factors or general use factors, such as unskilled labor and raw materials, can be obtained by any company and, hence, do not generate sustained competitive advantage. However, specialized factors involve heavy, sustained investment. They are more difficult to duplicate. This creates a competitive advantage, because if other firms cannot easily duplicate these factors, they are valuable.

e. The role of government in Porter’s Diamond Model. The role of government in the Diamond Model is to act as a catalyst and challenger; it is to encourage - or even push - companies to raise their aspirations and move to higher levels of competitive performance. They must encourage companies to raise their performance, to stimulate early demand for advanced products, to focus on specialized factor creation and to stimulate local rivalry by limiting direct cooperation and un-competitiveness practices.

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No nation can be competitive in everything. A nation’s pool of human resources is necessarily limited. The ideal is that these resources should be deployed in the most productive uses possible i.e. by choosing those sectors where the nation will focus a significant amount of its resources to ensure productivity enhancement or the attainment of a competitive advantage over others. The export success of those industries with a competitive advantage will push up the cost of labor, inputs and capital in the nation and making other industries uncompetitive and offer an option for the Government to pull out.

OECD emphasizes the relation between exports and standard of living. Competitiveness is a country’s ability to produce goods and services, which meet the test of foreign competition while simultaneously maintaining and expanding the real income of its people (OECD 1992, p .237).

2.3. Measuring Productivitya) In the words of Peter Drucker: “Without productivity objectives, a business does not have direction. Without productivity measurement, a business does not have control.” Therefore, measurement of productivity enables individuals, organizations, and nations to establish where they are, to set goals as to where they want to be and to monitor progress towards those goals. The importance of measurement is best well demonstrated by the fact that one of the first and fundamental tasks of National Productivity Organizations (NPOs) is the establishment of national productivity benchmarks. There are two methods of measuring productivity that are most commonly used: Partial Productivity and Total Factor Productivity Measurement.

2.3.1. Partial Productivity Measurement

This is the most commonly used measure of productivity by most enterprises. It is where output is related to an individual category of inputs used in the production process. An example is customers served per employee per day, output per machine hour, or sales per square meter. Such measurements are simple and are most common where only one input is dominant in the production process or the resource mix tends to remain stable.

The resources available to all economic activity are broadly the same although they will be mixed together in completely different proportions. They are: Labour (people) Materials Energy Capital External Services

The ratio of output to each resource measures the productivity of that resource. Thus, labor productivity is the ratio of output to the labor

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input and capital productivity is the ratio of output to the capital input. Examples include:

Labor Productivity = orders processed in a ware house Number of Employees

Material Productivity = Number of plates sold in a restaurant Kilos of meat

Energy Productivity = Passenger miles in an airline Fuel used

Capital Productivity = Units sold in a supermarket Sq. meter floor space

2.3.2 Total Factor Productivity (TFP) measurement

In this measurement, all the factor inputs (labor, capital, materials, energy, others) are compared against the total value of output generated.TFP = Value of Output

Cost of( Labor + Capital + Materials + Others)

2.4. Productivity and its Befits to Society

There are some specific and direct benefits that accrue to society as a result of improving a country’s productivity levels. These include the following:

a) To Employers; productivity gains in the form of higher returns to capital can mean the improved capability to:

Expand capital formation resulting in more and better goods and services and more employment opportunities;

Upgrade technical capability, resulting in the improved quality of products; and improvement in the competitiveness position in the market place.

b) To Employees; increased productivity means: an increase in compensation in form of:

Increased wages/salaries to sustain their efforts; Better working environment and better emotional climate; Better sense of well-being - employees derive greater sense

of well-being when they see their efforts pay off; Job security - a firm attaining a high level of productivity is

more stable; Development of skills and other capabilities - a fair share of

the productivity generated is also deployed in employees' training and development to ensure their work satisfaction, personal career development and further productivity improvement.

d) For the consumer, productivity gains mean: Lower prices of goods and services. Productivity

improvement will decrease production cost per unit which will benefit the consumers in terms of lower prices and more goods and services at better quality

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As the level of productivity rises, outputs become more competitive, both in terms of quantity and quality. Thus, better quality goods and services are made available to the consumers.

d) To the broad public and communities; higher productivity means: Reducing the effects of inflation, A higher standard of living, Provision of more employment opportunities, Reducing social conflicts since more goods and services are

made available at affordable prices Better natural environment and community services.

e) To the government; improved productivity means: The capability to provide more and better social services;

and Being able to carry out development programmes more

effectively and efficiently.

2.5 Productivity MovementA Productivity Movement is a national initiative aimed at coordinating all efforts towards productivity improvement and competitiveness across all sectors of the national economy. This may include such efforts like; advocacy and awareness campaigns; institutional arrangements and networking; training; total quality management; improvement of the investment climate; regular seminars and workshops; productivity awards and other related efforts.

Key imperatives for a successful productivity movement include the support and active participation of businesses, employees, government, consumers, academia and the public in general.

The Productivity Movement is normally led by a National Productivity Organisation (NPO) which works closely with other partners such as Government, Employers’ Organisations, Trade Unions, NGOs, Academia and other social partners.

2.2 Benchmarking Productivity with other Countries

In the effort to promote the productivity movement in Uganda, it is important to study and understand how similar initiatives have been promoted in other countries. Four case studies drawn from four different countries have been examined particularly focusing on the institutional arrangements, nature of activities performed, target groups, social-economic partners in productivity and other related issues.

1. The Japan Productivity Centre for Socio-Economic Development

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The Japan Productivity Center for Socio-Economic Development (JPC-SED) is a non-governmental organization (NGO) established in 1955 to promote the Productivity Movement in Japan under its Three Guiding Principles Adopted at the First Productivity Liaison Conference in1955. The three guiding principles are: expansion of employment, cooperation between labor and management, and the fair distribution of the fruits of productivity. The JPC-SED, at the corporate level, actively works to implement the latest management system based on cooperation between labour and management, introduce effective management renovation, train human resources, and also present public policy proposals for socio-economic reform in Japan.

The JPC-SED was established to enhance the economic development of postwar Japan through the productivity movement. Since then, JPC continued to play a major role in promoting productivity in Japan’s industrial society and in improving the quality of people’s lives. The JPC-SED also actively supports industries and public sector organizations in such areas as management innovation, modernization of labor-management relations, and human resources development.

Organisation and Institutional Arrangements: The Japan Productivity Center for Socio-Economic Development (JPC-SED) is today comprised of approximately 350 personnel in 15 departments. The departments include: Surveys and Research, Management Development, Consultation, International Exchange and Technical Cooperation, Media and Publications, Information Technology, Social and Labor Affairs, Energy and the Environment, Quality Management, Japan Society for Human Resource Management, National Forum on Entrepreneurship & Venture Business, Mental Health and Member Services. Please see annex 1 for the JPC-SED organogram.

At present, there are nine standing committees and conferences addressing specific problems, and a number of ad hoc committees that examine contemporary issues as necessary. The committees have representation from labor, management, and experts in various sectors. They conduct surveys and studies, and publish the results in form of policy proposals.

Key stakeholders of JPC-SED represent people in all walks of life. They include corporate executives, labor union leaders, academic experts, and heads of consumer groups. Their vast expertise and knowledge are invaluable to the activities of JPC-SED’s various committees. JPC-SED’s productivity movement is supported by over 10,000 members, including corporations, labor unions, and various other organizations. Their support and its strong collaboration with seven regional productivity centers enable JPC-SED to form a powerful nationwide network for the productivity movement in Japan. The special Committees comprise the following:

1. Economy Vitalization Committee 2. Labor-Management Relations Committee

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3. Management Innovation Committee 4. Employment Policy Committee 5. Welfare Policy Committee 6. Shift of Capital from Tokyo Committee 7. Transportation Policy Committee 8. Energy and Environment Committee 9. Promoting Information Economy & Society Committee 10. 21st Century Health Committee 11. Social Policy Committee 12. Agricultural Policy Committee

Japan has seven regional Productivity Centers and two global liaison productivity offices, in USA and France. 2. The National Productivity Council of India (NPC)

The National Productivity Council of India (NPC) is a national level organization set up to promote a productivity culture in India. It was established as a registered society in 1958 by the Government of India as an autonomous, tri-partite, non-profit organization with a Governing Council which has equal representation   from the government, employers and workers’ organizations,   in addition to technical and   professional    institutions   and    other interest groups. Besides providing training, consultancy and   undertaking   research   in   the area of productivity, NPC also implements the productivity promotion plans and   programmes of the Tokyo based Asian Productivity Organization (APO), an inter-governmental body of which the Government of India is a founder member.

Mission & Objectives: Development, Dissemination and Application of knowledge and experience in productivity, for promoting consciousness and improvement in productivity, with the objective of strengthening the performance and competitiveness of the national economy as well as of improving the working conditions and quality of working life.

NPC is aiming to promote the cause of productivity in industry, agriculture, service, infrastructure and other sectors of the economy. It aims to help in achieving sustained all round development in India, leading to enhancement of quality of life of people in general. The concept of productivity as perceived by NPC encompasses not only a more efficient use of resources, but also of quality, environmental protection and integrated economic and social development. NPC aims at promoting these as a part of its objectives and activities.

NPC Vision:

NPC aims at combining its promotional mission with a totally professional approach to provide world class services needed by Indian industry to become internationally competitive in a global economy.

NPC Services: In executing its mandate, NPC provides the following major services to its customers:

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Consultancy Training : Dr. Ambedkar Institute of Productivity (AIP) is the long

term training wing of NPC- India. It was created with the primary purpose of preparing consultants in managerial and technical areas to cater to the needs of NPC. It also trains company-sponsored and self-sponsored participants into consultants. It also offers two-year post graduate programmes in a number of disciplines including: Industrial Engineering, Plant Engineering, Energy Management, Industrial Pollution - Prevention and Control, Human Resources Management, Productivity Research, Inter-firm Comparison, Total Quality Management, Total Productivity Management and Agricultural Productivity

Productivity Dissemination: NPC aims at propagating productivity as an evolving concept, which includes attention to special issues, and concerns relating to quality, environment, energy, integrated rural and community development, women workers etc. Productivity is viewed in this context and not in the conventional sense of mere production increases with constant resources. NPC is also a change agent, aiming to assist the Central and State governments, local bodies and other organisations in improving the quality and efficiency of public services.

National Cleaner Production Center: UNIDO/UNEP selected the National Productivity Council of India to locate the National Cleaner Production center (NCPC) in India. Demonstrate-cleaner production concept in Indian Industries Particularly Small Scale Industries. The objectives of the NCPC are: (i) to conduct Demonstration Projects, (ii) conduct training programmes/workshops (iii) disseminate information on cleaner production, and (iii) policy level intervention.

Productivity Awards: To encourage the units to perform efficiently with a healthy competitive spirit. The Government of India in collaboration with National Productivity Council has since 1982, instituted National Productivity Awards. The awards provide stimuli for quality and productivity improvement in Indian industries and agriculture. Presently a number of sub-sectors are considered for these awards.

3. The Malaysia Productivity Corporation (MPC)

The Malaysia Productivity Corporation (MPC), formally known as the National Productivity Corporation was established in 1962 as a joint project between the United Nations Special Fund and the Federal Government, with the International Labour Organisation acting as its executing agency. The MPC became an autonomous body through an Act of Parliament in 1966.

The Vision of the MPC is to be the leading organisation in productivity enhancement for global competitiveness and innovation. The Mission is to deliver high impact services towards achieving

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performance excellence through innovation for the betterment of life. The functions of the Corporation are as follows:

To lead in the promotion and dissemination of productivity related information and issues;

To establish an information and reference centre for productivity indices for the country and for management systems and case studies;

To generate local expertise in the field of productivity, quality, management and entrepreneurship;

To enhance the development of the human resource both at the supervisory and management levels in the country;

To advise on and coordinate the implementation of programmes and activities related to productivity and quality;

To assess and certify supervisory and management training programmes, entrepreneurship programmes and productivity and quality management programmes conducted by the private sector for the public;

To conduct training or other programmes relating to productivity, quality, management and entrepreneurship;

To provide consultancy services relating to productivity, quality, management and entrepreneurship;

To collect, produce and publish information on productivity, quality, management and entrepreneurship and other related matters;

To carry on business undertakings for the purpose of the discharge of its functions under this Act with the approval of the Minister;

To report annually to the Minister on the progress and problems of raising productivity in commerce and industry and to make recommendations on the manner in which such problems may be dealt with; and

To do such matters and things as may be incidental to or consequential upon the discharge of its functions under the Act.

Nurturing innovative and creative culture through P&Q promotion and partnership programmes.

Developing human capital and organizational excellence for building a knowledge-based society through training, systems development and best practices;

Providing value-added information on productivity, quality, competitiveness and best practices through research activities and databases

Main Activities Performed by MPC1. Training and Management Systems Development

Training is provided in the following areas: Leadership & Management Development Programme Quality Management System Programmes Process Improvement Innovative Programmes Training Management System Customer Excellence Programmes Strategic and Excellence Performance Programmes

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International Programmes Conventions, Seminars and Workshop Seminars, Workshops, Conventions and Conferences. Productivity & Quality Magazines, TQM Casebook and

Productivity Journal. Management of Quality Awards. Dissemination of P&Q research findings. Sharing benchmarking and best management practices. Networking with local and international organizations in the

area of P&Q.

2. Promotion Seminars, Workshops, Conventions and Conferences. Productivity & Quality Magazines, TQM Casebook and

Productivity Journal. Management of Quality Awards. Dissemination of Productivity &Quality research findings. Sharing benchmarking and best management practices.

3. Networking with local and international organizations in the area of Productivity &Quality

4. Tailor- Made TrainingMPC also provides tailor made training programmes to cater for specific needs and requirements. As a main driver in Productivity and Quality (P&Q) initiatives, MPC offers a comprehensive range of training programmes that enhance organizational excellence and human capital development. The training emphasizes collaboration, sharing of experiences and knowledge transfer with the aim of realizing employees’ potentials and competencies, necessary for modern day organizational efficiency and effectiveness. 5. Systems DevelopmentProvide effective and systematic approach for organizations to improve their internal efficiencies, operational effectiveness and foster on-time delivery. The key areas of focus include:

Quality Management

o Total Quality Management (TQM) o ISO 9001: 2000 o Innovative & Creative Circle (ICC) o Benchmarking

Productivity Management o Productivity Measurement and Analysis (COMPASS) o Productivity-Linked Wage System (PLWS) o Total Productivity Maintenance (TPM) o Productivity Improvement Project (PIP)

Human Resource Management o Training Needs Analysis (TNA) o Teambuilding For Productivity Improvement o Environment Management o 5S Practices

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o Green Productivity o Waste Reduction Management (WRM) 6. ResearchThe

Malaysia Productivity Corporation (MPC) provides value-added information on productivity, quality, competitiveness and best practices through research activities and databases. The research findings can serve as inputs for policy planning and formulation for higher productivity and competitiveness. Among the focus areas for research are:Productivity and Quality Management

Total Factor Productivity Determinants of Productivity Growth National and State Level Competitiveness International, National and Sectoral Productivity Performance Productivity Performance of Key Economic Sectors,

Manufacturing, Services, Agriculture, Construction Productivity of Small and Medium Industries Human Capital Management Performance Based Remuneration System Information and Communication Technology Benchmarking and Best Practices

MPC's research projects are lead by Consultative Panels which are headed by Captains of respective industries and representatives from Government, Academia and Industries. These Panels were established to advise the Malaysia Productivity Corporation on pertinent information and initiatives needed by industries to enhance productivity and competitiveness at the international, national and sectoral levels. They provide guidance in the development and implementation of research activities to meet the needs of industry and to provide input on productivity, quality and competitiveness. The eleven consultative panels are: Agriculture, Construction, Development Financial Institutions, Energy and Utility, Healthcare, Hospitality Industry, Human Resource, Information Technology, Logistics and Transport, Manufacturing, and Productivity Measurement.

4. Productivity South Africa

The challenge for South Africa is not only on establishing internationally accepted economic policy fundamentals at government level but also to raise the level of productive capacity of the private sector and inspire a culture of productivity mindset in the society. Productivity South Africa (SA) was set up to address productivity issues in the country.

Productivity SA is a Section 21 Company. It reports to the Minister of Labour and governed by a tripartite Advisory Council and Board drawn from government, organised labour and business. It has three offices; in Midrand, Durban and Cape Town. The mandate of Productivity SA is to promote and enhance productivity throughout the South African economy. Specifically, Productivity SA focuses on serving the interests of government, organised labour and business through the enhancement of productive capacity.

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Productivity SA is a tripartite organisation championing productivity improvement solutions and products in order to raise the level of productive capacity and competitiveness of South Africa as a nation. Productivity SA therefore acts as a catalyst between government, business and labour to integrate and disseminate the social and economic imperatives of productivity throughout the country, in the southern African region and the African continent.

Productivity SA meets its mandate by building capacity through sound project management skills, regarded as a core function of the organisation. Furthermore, Productivity SA has surpassed its mandate by recognising the need to focus on managing large projects, through pursuing partnerships with other suitable government agencies.

Categories of MembershipMembership of Productivity SA is by subscription, structured into two categories, which are based on the number of employees in the organisation. Listed below are the membership categories and the different fee structures.

Table 2.1: Membership categories and the different fee structures

 Category  No. of Personnel  Total Amount (incl. VAT)

 Corporate Membership  1 - 10

R 2700.00

 Individual Membership  1

R 370.00

Vision: To lead and inspire a productive and competitive South Africa

Mission: Productivity SA is a tripartite organisation dedicated to the development and enhancement of South Africa’s productivity by unleashing the spirit of continuous productivity improvement in all South Africans.

Focus Areas: Productivity SA has designed a number of productivity management tools to assist organisations to improve their productive capacity, quality of products or services as well as the competitive practices and culture of continuous improvement. The following are the focus areas:1.Enterprise Productivity & Competitiveness: Developing productive

and competitive enterprises, while promoting job retention, job creation and poverty alleviation

2. Knowledge Management & Research3. Productive Behaviour and Competencies Programme4. Productive Capacity Building

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5. Research & Advocacy6. Strategic Leadership on Productivity awareness programmes

Productivity- Based Business Solutions1. Manufacturing and Production: Green area programmes, How to

become a world-class manufacturer, Just in Time (JIT), demonstration game/Theory of constraints (TOC) principles, Just-in-time (JIT) product suite, Lean manufacturing, Material Requirements Planning & Manufacturing Resources Planning (MRP I & II) , Textile capacity model.

2. Marketing Management: Export marketing project, Marketing Management System, Sales Management System, Sales Productivity Audit

3. NPI Administrative Productivity4. Organizational Assessment5. Performance Recognition Productivity Awareness Productivity

Measurement6. Skills Development2.3 Lessons Drawn from the above

ExperienceFrom the analysis made on the NPOs in the four countries (India, Malaysia, Japan and South Africa), a number of lessons can be learnt and used in the process of establishing a productivity movement in Uganda.Productivity is not a new concept. It is a concept that has been around since the 1930s and has helped countries that were in difficulty to emerge as the leading global economies today.

a. Productivity is the value of output per unit input achieved by a firm, an industry or a country. It is the measure of how well resources are brought together in organizations and utilized for accomplishing a desired set of results or outcomes. Firms can increase productivity by improvements in research and development; providing new plant, equipment and machinery; Product simplification, improvement on existing methods and procedures; and increasing the effectiveness of employees.

b. Productivity improvement is the basic tool for enhancing competitiveness and unless Uganda embraces the productivity culture, Ugandan businesses and labour will continue to find it difficult to enter international markets.

c. For a country to develop a strong productivity culture there must be in place an effective campaign or movement to sensitize people on the importance of productivity and its application. There must be programmes that are focused on improving the knowledge, attitudes and skills of the workers to become more productive and competitive.

d. Most NPOs have had a humble beginning and overtime transformed into major organisations, becoming major players in the critical role of transforming their respective economies. The respective Governments have been largely responsible for the establishment of NPOs in most countries although some NPOs have continued to survive through member contributions and proceeds from services rendered to their members.

e. The tripartite arrangement of Government, organised labour, business enterprises and non governmental organisations is a prerequisite to the success of the productivity movement. The

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captains of industry play a big role in advising the NPO on the key priority needs of industry.

f. Productivity improvement is a broad undertaking for any nation. However, most NPOs opt to focus on particular areas considered to be of critical importance in the social and economic advancement of their countries. In all NPOs considered under this study, areas that have been found common include; research and development, advocacy, knowledge generation and dissemination, nurturing innovative and creative culture, productive capacity building, enterprise productivity and competitiveness, management improvement, quality improvement, technology development, skills improvement and productivity awards.

g. The NPOs are dynamic institutions that are able to sense strategic and contemporary issues in and outside the country through continuous research and devise measures for addressing them and remaining competitive.

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-Chapter 3-

Methodology

3.1. The Survey Plan

3.1.1. The Survey Sample

The population of interest for this study were the organisations (public, private and NGos) that have a role in promoting and supporting productivity improvement in the country. However, given that most organisations are in one way or the other represented in Kampala plus the limitations imposed by time, and other logistics, the study concentrated on organisations located in Kampala and Jinja and this constituted the sampling frame. The sampling frame thus included; Private Sector Organizations, NGOs, Employer Organizations, Labour Unions, and Academic Institutions. Generally, the sample frame was made up of the following categories:

Public Organisations (Government Ministries, Department and Agencies (MDAs)),

Academic Institutions Private Organisations/Enterprises NGOs

3.1.2. Criteria for selecting the Survey sample

Given that not all members in the sampling frame had a key role to play in productivity promotion and support, it follows that they all did not have an equal chance of being selected in the ultimate sample. The survey therefore, used the judgment or purposive non-random sampling technique to select a sample of 50 respondents who were interviewed in this survey. The criteria in selecting the respondents included the following:

(a)Participation in promotional and advocacy work for productivity (b)Role in creating an enabling environment for productivity

enhancement.(c) Being one of the leading enterprises in Uganda(d)Having the mandate for management training, entrepreneurship

training and other productivity related training programmes(e)Involvement in Research, Development, innovation and related

activities(f) Involvement in labour relations issues (labour unions, employers

organisations etc)(g)Academic research and publishing works on productivity

Using the above criteria, a list of 50 respondents was developed comprising 18 representatives from Government, 7 from academic institutions, 24 private Organisations and 1 member representing NGOs. Please see annex 4 for the respondents.

3.1.3. Data Collection

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The survey relied on two major data sources namely; secondary data from the literature review and primary data obtained through the survey.

3.1.3.1 Secondary Data Sources

The Consultant reviewed relevant literature that informed the analysis on the state of productivity in Uganda. Data sources included numerous documents as outlined in the list of references. Documentation on previous or existing efforts by different institutions on productivity was also reviewed. For benchmarking purposes, we reviewed literature regarding experiences of other countries that have already set up NPOs in order to draw lessons for Uganda. In addition, the work of international experts on productivity was taken into consideration.

3.1.3.2. Primary Data Sources

The consultant (assisted by 5 enumerators) administered a questionnaire among the respondents identified in section 3.1.1 and 3.1.2 above. The type of primary data collected was guided by the questionnaire in annex 7.

3.2. The Survey Questionnaire

A questionnaire responding to the issues in the Terms of Reference was developed. Productivity being a very wide subject, various question types were raised as follows:

3.2.1 Closed-ended Questions

Given the nature of the respondents, the questionnaire was dominated by closed-ended questions. The respondents were given a list of possible answers against each question and were required to pick the most appropriate option(s). However, at the end of the available options, the respondent was given the opportunity to provide any additional information. The closed-ended questions eased the process of automatic data processing and analysis.

3.2.2 Open-ended QuestionsOpen-ended questions were applied in situations where the likely responses were widely varied. The responses were grouped and coded to facilitate automatic data processing and analysis.

3.2.3 Intensity Questions

Some of the information required in this assignment called for respondents to indicate how strongly they felt about certain issues; the magnitude of how much they agreed/disagreed with an issue. Intensity questions were introduced in the questionnaire in order to assess the intensity of those feelings.

3.3. Pre-testing the Questionnaire

The survey questionnaire was pre-tested by administering it to 5 respondents from the sample frame identified above.

3.4 Data Analysis

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Primary data processing was facilitated by automatic data processing statistical software (SPSS). A Data Analyst was hired for this purpose. The results of the analysis were interpreted and synchronized with existing data in a bid to come up with logical conclusions and recommendations.

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-Chapter 4

Desk Review of the Productivity Situation in UgandaIntroduction

In this chapter, a review is made of the available literature in a bid to establish the current productivity situation in Uganda. The issues considered include the existing institutional arrangements for productivity and the state of productivity in some of the high priority national sectors in the country.

4.1. Institutional Arrangement

There are many institutions in Uganda that perform activities leading to increased output of goods and services without clear consciousness about the importance of productivity and competitiveness. It therefore does not come as a surprise that Uganda has not been able to utilize preferential opportunities offered under initiatives such as the regional markets (COMESA and EAC), AGOA of the United States offering non-reciprocal duty-free access of goods from Uganda and a few other countries and the Everything But Arms (EBAs) which has recently been replaced by Economic Partnership Agreements (EPAs). On the domestic scene, local enterprises have lost market share to more competitive foreign firms as a result of limited capacity to compete.

The point here is that Uganda does not have a shortage of institutions that would support the enhancement of productivity. The problem is that the issue of productivity has not been clearly appreciated and therefore integrated in most activities and interventions at all levels, be it government, business, academia, civil society and other related areas.

Some of the institutions that currently play a major role in productivity promotion and support, albeit unconsciously, include the following:

Ministry of Finance; Planning and Economic Development (the Competitiveness and Investment Climate Strategy - CICS); Ministry of Agriculture; Animal Industry and Fisheries (the Plan for Modernization of Agriculture-PMA; National Agricultural Research Organisation-NARO; National Agricultural Research System (NARS); Uganda Investment Authority (UIA); Enterprise Uganda; Private Sector Foundation of Uganda (PSFU); Management Training and Advisory Centre (MTAC); Uganda Management Institute (UMI); Uganda Industrial Research Institute (UIRI); National Organisation of Trade Unions (NOTU); Federation of Uganda Employers (FUE); Uganda National Bureau of Standards (UNBS); Uganda Bureau of Statistics (UBOS); National Council for Higher Education (NCHE); Prosperity for All (PFA); National Environment Management Agency (NEMA); Uganda Export Promotion Board (UEPB); Min of Works;

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Ministry of Education and Sports (the BTVET programme); Uganda Revenue Authority(URA); Economic Policy Research Centre (EPRC); Tourism Uganda; Uganda Management Institute (UMI), Uganda National Council for Science and Technology (UNCST); and National Planning Authority . A brief profile on these Institutions is contained in Annex 3.

It is therefore, apparent that though a number of efforts are in place, there is no intra-institutional coordination and strategy aimed at effective delivery of productivity related activities in a coherent and most productive manner. There is need to create an institutional arrangement coordinated at the apex level from within or outside the existing institutions to deliberately promote productivity improvement in a more comprehensive and cohesive manner.

4.2 Status of productivity in different National Sectors

4.2.1 AgricultureOver the past 25 years, the Ugandan Economy has changed significantly. Uganda has achieved an impressive GDP growth rate between 2000 and 2006, in 2007/2008 reporting an astronomical growth rate of 8.9% comparable to the fastest growing economies of China and Malaysia. However, the industrial and services sector base still being very low; at 32% contribution to GDP in 2006, agriculture continues to dominate the country’s national economy. Agriculture continues to employ about 77% of the labour force, accounts for 90% of the exports and provides a large proportion of raw materials for the industrial sector.

Producers in the sector are mainly subsistence farmers predominantly in the food crop sub-sector for own consumption. These producers face a number of productivity related constraints including poor husbandry practices and therefore, poor yields (see table 4.1), lack of hybrid seeds, inadequate mechanization/technology, lack of skills, poor post harvest handling techniques, shortage of storage facilities, crop finance, land fragmentation, loss of soil fertility, pests and diseases.

A move towards addressing the above constraints would enhance production capacity and productivity and will bring about the needed transformation in Agriculture.

Table 4.1: Comparison of Existing YieldsCrop Current Yields of

Farmers’ Fields (REPEAT Survey 2002/03) Kgs/ha

Experimentation Station Yields Kgs/ha

Maize 1609 5000-8000Beans 641 2000-4000Ground Nuts 1222 2700-3500Banana 1200 4500Coffee 1019 3500

Source: Adopted from WB Uganda Country Economic Memorandum 2007

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Available evidence from the above table suggests that average yields obtained by Ugandan farmers are well below their attainable potential. There is therefore, ample room for improvement through yield increases. There is potential to increase outputs by more than 100 percent if better productivity related measures are applied.

Uganda’s population is growing at an unprecedented rate of 3.2.percent, one of the fastest rates in the world. This continued high population growth will put immense pressure on land as more and more land fragmentation and soil depletion are experienced. This is simply counterproductive. Uganda has one of the lowest rates of fertilizer use in the world (less than 10 percent of the sub-Saharan average).

Figure 1

Agricultural Value Added per Worker

225275

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Uganda Tanzania Kenya Ethopia South Asia SS Lat.Am& Carib

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Growth rate

It is reported that the economic value attributed to the depletion of soil nutrients is estimated at US$625 million per annum. Recent estimates of natural resource degradation put the cost at 17 percent of GDP of which 11 percent is constituted by soil degradation (Moyin and Gil 2003). The level of poverty in the countryside is largely attributed to the slow down in agricultural productivity and more so loss of soil fertility.

Figure 2

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Ugandas' Land Productivity as Compared to other Countries

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Ag GDP/Worker

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Future growth, if the population is not checked, will have to rely on more intensive agriculture with higher levels of productivity as opposed to extensive agriculture. Growth in agriculture should also come from increased quality of factor inputs including improved productivity of existing crops or shifts to higher valued crops. Uganda needs to raise land and labour productivity. The two primary factors of production in Agriculture are land and labour. Agriculture in Uganda heavily relies on family labour. While it is necessary to raise land productivity because of the above glaring constraints, it is critically important that agricultural labour productivity is equally addressed. As seen above, land productivity is commonly measured as yields, or to be more specific in Uganda, cereal yields. Cereal yields in Uganda have been increasing over the previous years and aggregate yields compare well with the rest of Sub Saharan Africa (SSA). Uganda is endowed relatively with favourable climatic conditions and agro-ecological conditions (good soils). For this and many other reasons, Uganda is among the lowest users of fertilizer despite the soil degradation as discussed above. Crop yields are better than neighbouring countries and Sub Saharan Africa as a whole. However they remain low when compared with other countries that apply good husbandry practices.

4.2.2 Industrial Manufacturing

Uganda’s commodity exports are made up of over 95 percent primary agricultural commodities with almost no manufactured goods, save for cross boarder trade. The status quo is attributed to the lack of competitiveness within the manufacturing sector. Related productivity constraints to this problem include the following:

1. Production of poor quality products attributed to the high degree of protectionism in the domestic market and the limited pressure from local consumers for quality products. With more opening up through globolisation and regional integration, a considerable strengthening of firms is required in order to raise productivity to

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meet requirements in emerging and demanding markets ( for quality products), lest, firms in Uganda risk winding up due to competitive pressure from other producers in the region or elsewhere.

2. Technology is a key factor for competitiveness. However, Uganda is grossly deficient in technology and lacks indigenous capacity, particularly a sufficient pool of technical, technology and engineering manpower needed to create and adapt imported technology. Added to this, has been the burden of having to import engineering skills in some industries. The costs incurred on expatriate salaries, allowances and other charges such as repair and maintenance services could account for as much as 30-50 percent of imported inputs. The training system has been very slow in responding to this problem.

3. Lukewarm attention is given to research, development and innovation. The country cannot sustain a reasonable degree of competitiveness of its industries without strengthening the environment for research, development and innovation. This is an investment that involves both the public and the private sector. At the moment, there seems to be an apparent lack of awareness about research and development in most industrial firms.

4. Uganda lacks foundational engineering industries and foundries necessary for the manufacture of tools and spare parts for use in different industries. Many enterprises have to endure the delays and costs of procuring these items from abroad, a fact that renders them less competitive as compared to their counterparts in other competing countries.

5. Uganda is a land locked country, a situation that makes it less competitive in terms of transportation costs. The state of road and rail infrastructure within the East African Region has not been to the required standards to enable exporters in Uganda to compete effectively with their counterparts in other countries. The status quo has severely affected industries that have to import raw materials for use in processing export goods. In fact most business proposals have not been found viable due to the high incidence of transport costs to the sea ports. Again, because of the problem of being a land locked country, Uganda becomes less attractive for Foreign Direct Investment (FDI) especially export oriented FDI that would be critical for productivity enhancement in the country. However, a possible remedy to this problem is to ensure that transport costs and other utility costs are comparatively much lower than in countries with a sea frontier.

6. Most industries in Uganda lack the flexibility to adjust to changing consumer tastes and other requirements such as the non-tariff barriers. This flexibility is required for industries to be internationally competitive.

7. For any country to industrialize, there are certain basic foundational industries such as the building materials industries,

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and fabrication industries that a country must have. However, in Uganda the costs of building material such as cement, metal bars and roofing materials are so high, thus rendering the initial costs of setting up industrial infrastructure very high. The matter is complicated by the fact that access to industrial finance to meet these costs is still a big problem.

4.2.3 Small and Medium Enterprises in Uganda

Micro and Small Enterprises (SMEs) are the key source of jobs and breeding ground for business ideas. SMEs are spread countrywide and contribute significantly to poverty eradication and overall development. They tend to use low cost, labour intensive and provide opportunities for people lacking jobs and proper education, but who have in-born talents, self drive and the spirit of doing some business. SMEs are the way to move labour from agriculture to industry. Between 2000 and 2003, the population of households diversifying into activities outside agriculture to self-employment increased from 12 percent to 21 percent. Poverty is much lower among those in non-agricultural self-employment than those who depend on agriculture entirely, implying that the former is considered to be a major way out of poverty.

The global entrepreneur monitor ranked Uganda in 2003 as the most enterprising individuals in the whole world while in 2004, it was second to Peru. The private sector in Uganda is dominated by micro, small and informal business operators. It is estimated that there are about 1,069,848 SMEs employing approximately 2.2 million people. Of the SMEs in Uganda, about 60 percent are male owned as opposed to 40 percent owned by female entrepreneurs (see table 4.2). About 70 percent of SMEs started do not live to see their second anniversary nor transform to large scale firms. Exporters and other business indigenous players are falling out of business due to weak entrepreneurial skills and the poor business support environment. Most SMEs choose to locate in urban areas for availability of services such as utilities and market opportunities.

Table 4.2: A Summary of the Number of SME Owners by Region and Gender

Location No. of SMEs % Male Owners

% Female Owners

Ratio of Male to Female Owners

Central 377,397 60.2 39.8 1.5

Eastern 270,304 64.5 35.5 1.8

Northern 181,096 48.9 51.1 1.0

Western 241,051 61.7 38.3 1.632

Total 1,069,848 59.8 40.2 1.5

A number of challenges that affect productivity abound for SMEs operating in Uganda including the following:

1. The Educational profiles of SME entrepreneurs are not impressive, often with no vision and strategy for development. This makes them hardly creative and innovative, with poor managerial skills.

2. Lack of technical training and advice in small businesses. Only a few institutional and community based training facilities are available with present apprenticeship training largely limited to transfer of information, knowledge and civil skills which does not achieve the desired levels of productivity and capacity for employment creation and exploitation of natural resources. The majority remain one man or family businesses.

3. The policy, legal and regulatory framework for providing adequate financing instruments is week. There are hardly any medium and long-term financing instruments and intermediaries for investment finance making it difficult for SMEs to grow and thrive. Commercial Bank credit is extremely costly and most entrepreneurs do not have the requisite collateral to secure it.

4. Most of them do not maintain books of records creating problems for borrowing and other forms of support.

5. Limited access to information and business support services. Most entrepreneurs are not aware of the technologies and lack information on other options and when they do access the technologies, they find it difficult to adapt such technologies because of limited skills and resources to operate and maintain them. Uganda lacks such institutions that would force strategic alliances with such entrepreneurs to help them.

6. Inefficient physical infrastructure facilities including the challenge of poor roads, inefficient electricity power supply, lack of cold chains, inadequate water supply in some areas, poor rail infrastructure and absence of industrial parks or shades. These make start-up costs for most enterprises high and maintainance costs are somewhat exorbitant for most entrepreneurs.

7. Poor human resource management as most business entrepreneurs employ relatives or unqualified personnel in an attempt to cut costs. Employees lack job descriptions and do not have performance targets against which performance is measured. SMEs are faced with shortage of skilled labour for technology, quality products and standardization.

8. Lack of social security as SME workers have to cope with their social problems, medical care, injury, unemployment etc.

4.2.4 Services Sector in Uganda33

A number of issues relating to productivity abound in the services sector and Uganda is still far from what is desired to make these sectors competitive. However, it can be noted that there have been dramatic improvements that have made the services sector the largest contributor (at 43.3 % in 2004/05) to Uganda’s GDP since 2001/2002 overtaking agriculture. The major sub-sectors that constitute the services sector include: education, health, tourism, financial services, packaging and storage, infrastructure and support services, energy, science and technology, Information and communication.

4.2.4.1 Education

It is widely agreed that the most effective strategy for eliminating poverty and achieving sustainable development in the country is to expand educational access and improve education quality. This will involve maximising inputs in an effort to produce optimum services and improve the quality of education in all respects (content and process) to ensure reasonable learning outcomes at all educational levels, especially in literacy, numerics and in life skills. The challenges vary by different levels of education and training.

4.2.4.1 a) Primary Education

1. The government provides free primary education. However, in spite of this fact, there has been high levels of school dropouts, with a big number falling out before reaching primary seven. Estimates put the retention levels at only 22% by the end of the seven years of schooling. 2. Studies suggest that high pupil: teacher ratio is one of the main reasons for the poor quality and low level efficiency in primary education. In Uganda, the national pupil: teacher ratio in primary schools is about 56:1 (2003). Many policy-oriented interventions and research studies consider a 40:1 ratio reasonable.3. Assessment of pupils’ performances shows alarmingly low rates of mastery of literacy and numeracy skills. The National Assessment of Progress in Education (NAPE) in 2003 revealed that more than 40% of pupils tested were “inadequate” in their performance in English reading and writing and in numeracy tests.

The challenge for providing quality education at the primary level involves improvements in the preparation, motivation and deployment of teachers, the quality of textbooks and of infrastructural facilities. It also involves making education relevant to society’s needs and strengthening the management and institutional capacity of educational institutions especially at the local levels.

4.2.4.1 b) Secondary Education

Its has become evident that in order to maximise the achievements of offering free primary education, secondary education should be given the same attention since it prepares young persons for entry into higher education or vocational education. It is also a starting point for

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students to acquire competencies they need to join the workforce and contribute to the development of the country. However, key challenges still remain for secondary education in Uganda.

1. While there has been an increase in the number of secondary schools, the spread has been uneven; there are regional disparities and variations in the socio-economic status of various districts and the number of secondary schools is still far below the required number to accommodate primary leaving pupils. The population of children (the age for secondary level education) has been estimated at 4,054,970 million, by Education Management Information System (EMIS). However, enrolment figures show that only 842,683 children are attending secondary schools. Government announced free secondary education (USE) from the beginning of 2007 and it is anticipated that the transition rate from primary seven to senior one will increase from the current 45% to 80% by the year 2015.

2. While, in terms of absolute numbers, state financing of secondary education continued to grow but its still inadequate (16.7% of 2004/5 Education Ministry Budget).

3. At the post-primary level, only a minority of students are achieving what is expected; too many are leaving school without the knowledge and skills they need to participate as citizens and productive workers. A study conducted in 2002 by UNEB reveals low score in English and Maths. 40% were judged as failing maths and 25% failing English on the test given in the study.

4. The government introduced a science education policy which requires all secondary schools to teach science subjects. However most of the schools do not have sciences teachers, laboratories and other equipments to implement this policy.

In line with the above challenges, the way forward is to reconfigure post-primary education by revising the curriculum and to make more efficient use of resources so that students acquire the skills and knowledge they need for further education and to become competitive in the labour market. . In the new financial year, FY 2008/09, government has provided more funds to the sector to promote science, technical and vocational education and training with the aim of equipping the students with employable skills.

4.2.4.1 c) Higher Education

Higher education generates the societal wealth of knowledge and advanced capabilities, that forms the superior strata of human capital. In addition, it plays a prominent role in knowledge acquisition through Research and Development activities.

Uganda Universities and Other Tertiary Institutions Act (2001), defines Higher Education, or tertiary education, as “both public and private universities and other tertiary institutions providing post-

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secondary (post-A-level) education, offering courses of study leading to the award of certificates, diplomas and degrees, and conducting research and publishing.” The objectives of higher education are as follows:

To build the human resource through the mobilisation of human talent and potential. Through lifelong learning to contribute to the social, economic, cultural and intellectual life of a rapidly developing society.

To provide high-level skills training necessitating the development of professionals and knowledge workers with globally equivalent skills.

Tertiary institutions are grouped into universities, national teachers’ colleges, colleges of commerce and technology, and other tertiary institutions.

Current stock of tertiary education institutions in Uganda includes both private and public institutions whose total enrolment stands at about 86,000 students. The tertiary institutions include 16 licensed public and private universities, 10 national teachers’ colleges, 13 colleges of commerce, 7 technical colleges, 1 forestry college, 2 co- operative colleges, 3 hotel and tourism institutes, 12 management institutes, 10 health and medical schools, 3 agricultural and animal husbandry colleges, 1 fishery training institute, 1 meteorological school, and 4 theological colleges.

There are still a number of critical challenges which Uganda needs to overcome for a competitive and productive tertiary sector.

1. The provision of free tertiary education has been systematically diminishing. The effect of this is currently reflected in inadequate infrastructure in most Public Universities and Colleges, insufficient educational facilities, high student-lecturer ratios, inadequately trained academic and managerial staff, use of out modeled technology in teaching and learning, and the delivery of a generally low quality education in comparison to high-income countries. Educational facilities that were meant to serve a few hundred students are now used by thousands.

2. Following the liberalization of tertiary training, a number of new private providers have invested into higher education thus supplementing governments’ responsibility. The problem however is that the programmes offered by the higher education institutions are mainly supply driven with no systematic assessment of market requirements for skills. Without a labour information system, institutions and students have no signal on which skills are on demand by the employers. This has led to a confused state of mismatched skills, excesses in some and shortages in others. A key challenge therefore, is to transform the higher education system to meet pressing national needs and to respond to new opportunities brought about by globalistion and increased mobility of labour.

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3. Only 2.7 percent of Uganda’s youth between the ages of 19 and 25 are enrolled in higher education institutes, yet demand for higher education exceeds what is currently provided.

4. Access to tertiary education for women and other disadvantaged populations is still far from what is required. The Ministry of Education Management Information System (MIS) indicates that only 37 percent of tertiary enrolment is female. There is evidence that, in addition to general access disparities, females may have less access to the more competitive programs like medicine, agriculture, veterinary medicine, and the natural sciences courses.

5. Data from several sources confirm that Uganda’s tertiary education sector has a very weak science and technology component. Because of lack of engineers, technology is almost exclusively an import in Uganda and in most cases adaptation of new technology is a problem. Research and Development has consequently been avoided in most public and private enterprises for lack of competent personnel.

6. A study by Kasozi, 2002 found that, perhaps with the exception of universities, much of the curriculum in higher education is centrally determined, specialized, and often theoretical. Much of what is taught is an adaptation to the Uganda version of the Oxfridge/London syllabuses of the 1950s. Thus, developing university curricula that respond to the needs of Uganda and the region—and which is linked to the global economy— remains a serious challenge.

Given that 20 percent of Uganda’s population lies between the age of 15 and 24 years, the opportunity for Uganda to harness this resource for the general transformation of the country is quite enormous. Failure to harness this potential has serious ramifications of continuing poverty and over dependency on supplies of goods and services from other countries, hence increased unemployment and export of job opportunities to other countries through export of raw materials. There is need therefore, to place serious emphasis on competitive tertiary education to meet current and future requirements for the labour market.

4.2.4.1d) Business Technical Vocational Education and Training (BTVET)

Given the current era of globalization and integration of economies the major competitive factor, both domestically and internationally, is the workforce competence. The success of a country lies in its people as to bring intellectual and technical talent into the workplace. The world is shifting toward knowledge and skill-based economies and societies as a pre-requisite for strengthening competitiveness. Workers require increasingly higher levels of education coupled with certain abilities to help them adapt to a rapidly changing social and work environment. Competence means knowledge (at one level or another), and practical and social skills suitable to the employment. Competence builds on foundation skills that require regular updating and on specific skills acquired through training – on the job and off – throughout the workforce career.

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According to the Convention on Technical and Vocational Education, TVE refers to all forms and levels of the educational process involving, in addition to general knowledge, the study of technologies and related sciences and the acquisition of practical skills, know-how, attitudes and understanding.

The institutions that offer TVE training vary. A number of them exist both on the public and private (non-profit and profit-making) levels. Graduates are awarded technical certificates for those choosing the technical track, including the Uganda Junior Technical Certificate, which is taken at the end of three-year post-primary technical and farm programs, and the Uganda Advanced Technical Certificate, which is taken at the end of post-secondary technical programs.

BTVET institutions can be accessed after primary 7 or senior 4. Categories of post-primary institutions include: teachers’ training colleges, Technical institutes/schools, Commercial/business schools,      Nursing and midwifery institutions, Clinical officers’ institutions, Hotel management, catering, and tourism schools, Fisheries training institutes, Vocational training institutes, Survey training schools and Physical planning training institutes, National meteorological training institutes, Community Polytechnics.

By 2004 there were a total of 1,003 post-primary institutions in the whole country. Total enrolment was 29,338 with 69% male students. Teachers were 1,923 a small share of female teachers (16%). Pupil/Teacher Ratio stood at 15 and there were 570 Classrooms with Pupil/Classroom Ratio of 51. Out of these institutions Government or Government Aided stood at 103. Quite obviously, the enrollment level is still very low compared to the intake in the formal education sector.

In 1996 the President of Uganda presented the idea of creating Community Polytechnics. The idea is to establish one community polytechnic in every sub-county in the country. The motivation behind developing Community Polytechnics lies in the fact that:

Approximately 1.6 million pupils were to graduate from primary school in the year 2004 and considering a dropout rate of about 80% at this level, Community Polytechnics provide an alternative avenue for Uganda’s potential entrepreneurs and workers.

There was a need to integrate academic learning, skills training and productivity to solve unemployment as well as other economic and social problems.

The following are some of the major challenges facing the BTVET sector:

1. One of the largest bottlenecks of development of BTVET as a sub-sector in Uganda is the way the general public consider physical work; like agricultural work as a punishment. Though the 1992 White Paper proposes a basic and in depth vocationalisation of all education

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and training offers in order to change this basic attitudinal bottleneck this has not yet been achieved.

2. The draft “National Employment Policy” points out that Uganda has an extreme shortage of technical skills. Despite this, Uganda’s education system continues to supply labour that is mainly targeted for white collar jobs in the formal sector, and particularly in Government. Yet for firms to be competitive, they need to employ people with technical skills necessary for ensuring high quality products that can compete in the market”.

3. The present BTVET system in Uganda is perceived both in Government and in the private sector as outdated in the sense that it does not correspond to the needs of the private sector. There is general agreement that the new BTVET system should be demand-driven, as opposed to supply or policy-driven. The curriculum is further criticized for not reflecting the kind of trade or skill competence and know-how required in the labour market. This critique is also related to lack of training in work ethics and attitudes, hence the graduates are not prepared for the world of work.

4. The situation is aggravated by the fact that there is no reliable information relating to the skills and knowledge requirements by the labour market. The last comprehensive survey of the Manpower requirements in Uganda was carried out in 1989 and since then there has not been any exhaustive survey. Therefore, the TVET providers do not have information to guide them on the kind of skills that they should impart into their students.

5. The curricula for the provision of business, technical and vocational education and training are quite varied. However, the responsibility of providing curricula for the sector still lies with the National Curriculum Development Centre (NCDC). There are a number of private providers of training and skills development in BTVET. The MoES is not always sure as to what curriculum is being used by the different providers of BTVET, at different levels, especially by those who have not registered under MoES.

6. There is also a need to regularly provide funds for upgrading equipment, tools and machines in order to match requirements in the market place. One consequence is that these institutions have been forced to charge high fees if they have not been able to obtain funds from donors. With limited Governmental funds and high fees, many school leavers cannot afford long-lasting technical training. In addition, some vocational training institutions, keep tuition down but providing mainly theoretical training – instead of hands on practical training.

7. The administration of all Government’s BTVET institutions was transferred to MoES, which critics say was a bad decision considering that such institutions should have been better managed by the respective sector Ministries because of the focus, degree of

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specialization and other core competences and institutional memory available with them.

TVET provides the technical manpower needed in industries. It also prepares people with the potential for self employment. In short, it is the way to go to address the problem of the growing population, unemployment and poverty. On top of ensuring that the necessary institutions are established and/or fully equipped, the government needs to address the problem of the negative attitude towards TVE training. Ultimately, TVE training would help build a pool of human resources necessary for productivity improvement in the country.

4.2.4.1e) Sports and Physical Education

In Uganda sports and physical education are traditionally popular activities deeply entrenched in national cultures and schools as well as in most grassroots community dynamism. Institutionally, the main responsibility for the development of physical education and sports lies with the Ministry of Education and Sports (MOES) and this role is coordinated by the National Council of Sports (NCS); a Parastatal body created by an Act of parliament in 1964. The National council of sports works in partnership with sports Federations and other sports committees.

With specific reference to labour productivity, sports and physical education play a big role through keeping the employees physically fit and preventing possible occurrences of illnesses. Some institutions such as the police, prison, and army have traditional departments of sports within their own welfare and training setups. Also, some work places such as the sugar factories, breweries, manufacturing, and construction firms do support and provide sports to their workers.

The sector faces a number of critical challenges affecting productivity. These include the following:

1.There is a general lack of facilities at all levels in Uganda to promote sports activities. A large portion of the population has no access to facilities and equipment and where the facilities and equipment are available, such as in some institutions and clubs, they are in a very poor old state. In addition, there are no special facilities to promote sports activities for people with disabilities.

2.Similarly, Uganda lacks adequately skilled manpower to impart training in Sports and Games and there are no specialized sports academies.

3.Although the national educational system promotes sports and games in pre-primary, primary, secondary and tertiary educational institutions, this is not developed as a main curricula activity and hence receives less emphasis and funding as compared to other curriculum activities in the sector.

4.The MoES does not have any specific policy on promoting sports at the workplace and therefore employers are not obliged to

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support initiatives in this area. 5. Lack of visionary development planning for Physical Education

and Sports in the country.

4.2.4.2 Health SectorFor national development to become sustainable, health and economic growth must be mutually reinforcing. Health is an essential prerequisite as well as an outcome of sound development policies. Without good health, individuals, families, communities and nations cannot hope to achieve their social and economic goals. In addition to this, the productivity of a worker is very much lowered due to constant illness leading to absenteeism or reduced strength of the worker.

The National Health System comprises all the institutions, structures and actors whose actions have the primary purpose of achieving and sustaining good health. The Government because of its social responsibility to have a healthy population has put in place health centres level 1-4 to provide health services at Local Government levels 1 – 4. Above these levels, there are general hospitals at district level and regional and national referral hospitals. Village health teams have been introduced to work at the community level. The level of effectiveness in fulfilling the related functions varies widely, with many not in regular contact with the lower units and communities they are supposed to serve.

Uganda however, has a very high fertility rate of 6.9 children considered one of the highest in the world with the average for high income countries at 1.68 children per woman. The high fertility rate is perhaps one of the factors underlying the rapid population growth from 6.9 million people in 1959 to the current (2008) estimate of 29.6million people. With the prevailing trends, Uganda’s population could reach over 35 million people by 2015, imposing very high pressure on the economy, the environment and natural resources that would get extremely degraded in terms of productivity.

The health sector still faces a number of challenges which, if not well managed, will adversely continue to affect the population. Some of them include:

1. Development of health sector policies and programmes have not adequately responded to gender concerns, showing little appreciation of the way in which inequality impacts on health of the population. However, health problems related to gender-based violence and female genital mutilation are increasingly notable. Gender relations, sexuality and sexually related behaviour has not been fully put into consideration in policy, planning and service delivery for better health.

2. There is a continued weak management and support/supervision system, and insufficient collaboration between the public and private sectors, resulting in less health outcome than would be expected from available resources.

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3. Bringing priority disease programmes into line with primary care provision, deploying workers equitably for universal access to HIV/AIDS treatment, scaling up delegation to community workers, and creating public health strategies for disease prevention are still a big challenge to the health sector in Uganda.

4. Apart from the heavy burden of infectious disease, Uganda is still simultaneously experiencing a marked upsurge in the occurrence of non-communicable diseases such as hypertension, cancer, diabetes, mental illness and chronic heart disease. Uganda has already entered the early phase of the epidemiology transition. While infectious diseases must be given priority, selective attention has to be given to all the key determinants of health in Uganda, including unhealthy lifestyles and the rising toll of accidents.

5. The extent of access to and utilization of health care varies substantially between districts and different segments of society; this to a large extent is responsible for substantial differences between health indices of the population. There is a mismatch between construction of new facilities and the capacity to make these facilities functional in delivery of basic health services across districts. There is a critical shortage of doctors, nurses and other medical personnel especially in rural areas. The current doctor to population ratio was reported at less than 1 physician per 10,000 people, contrasting with 2 physicians per 10,000 people the African average. Switzerland has 40 physicians per 10000 people. The sector has constantly been hit by brain drain in search of greener pastures.

4.2.4.3 Infrastructure and Support Services

The key basic economic infrastructures which play supportive roles to the productive sectors of agriculture, manufacturing and services in Uganda include energy, water, transport and communication facilities. Like the basic factors of production, a well developed infrastructure sector plays a big role in facilitating economic growth and development in a country. Considering that Uganda is a landlocked country, these services must be delivered efficiently to offset the arising locational disadvantage.

Most of the physical economic infrastructure is performing below optimum levels although government has been very vigilant in strengthening these facilities. The best performance is with the water sector where access to water in rural areas has increased from about 20%in 1991 to 60% today, while in urban areas it is currently running at 65%. However there is still a big part of the population without access to safe drinking water and water for production is on the contrary running at less than 40% access levels.

Similarly the transport sector is running at a marginal incremental scale. Both national and local government roads have improved greatly between 1988 and 2003. The percentage of passable national roads has increased from 6% to 75% and district roads from 15% to

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67% during that period. 7% of national roads are paved (2200 km out of 35000km) and 10,000 km of road in the country have all weather surfaces. Railway transport has been less progressive. Out of the 1,240 km of meter gauge railroad only the Uganda- Kenya line is still operational though at very marginal levels. Yet as a landlocked country, rail transport offers the cheapest means of transport to the seaports and other destinations. Air transport on the other hand has experienced great increases in the level of both passenger and cargo traffic despite the collapse of the national airliner.

4.2.4.4 Communication Sub-sectorIn the modern world, ICT provides an enabling environment for sector level development as well as knowledge dissemination and transmission. Modern ICT infrastructure includes telecommunication, digital data communications, internet services, Radio and television as well as courier services.

Uganda is steadily moving into the ICT world with fast growing mobile telecommunication and internet infrastructure. The recent establishment of a Ministry responsible for ICT was a step in the right direction towards coordination and planning for the sector.

Following the liberalization, the communication sector has been the most dynamic infrastructure sector. The onset of the mobile telecommunication and internet services revolutionalized the sector. The number of Ugandans with access to communication services especially the mobile cellular phones and internet has been growing at a rocket speed as evidenced in the tables below:

Table 4.3: Access to Telecommunication Services in UgandaService provided

1996 1998 1999 2001 2002 2003 2004 2005

Fixed telephone lines

45,145

56,196

58,261

56,149 59,472 65,793

82,495 87,513

Mobile cellular subscribers

3,000 12,000

72,602

276,034

505,627

777,563

1,040,124

1,315,300

Source: Uganda Communications Commission Report

Table 4.4: Uganda Internet UsersYear No. of Users Growth rate %2000 40,000 02006 500,000 11502007 750,000 502008 2,000,000 167

Source: International Telecommunications Union

4.2.4.5 Roads The road transport sub-sector is another equally crucial service that holds the key to sustainable economic and social development in Uganda. The road network of Uganda is classified between National, District, Urban and Community Access Roads.

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There are a number of key challenges in the road sub-sector which are aggravated by the fact that the Uganda Transport system over-relies on the road infrastructure since railway and domestic air services are not functioning adequately. The challenges include the following:

1. A large proportion of the national road network is in a poor condition causing barriers to markets, higher transport costs and lower profitability of crops and products. Out of a total of 46,452 kilometres of community roads in the country, only 10% are in good motorable condition.

Table 4.5: Uganda Share of Roads in Good/Fair conditionsRoad Type 1998 2003

Good/Fair Good/FairNational Roads 6% 75%Urban Roads 5% 30%District Roads 15% 67%Community Access Roads 0% 10%

Source: PEAP 2004 - 2008

2. There is lack of updated data on road usage especially on community roads, a factor that makes planning for these facilities extremely difficult.

3. Non-motorised transport dominates road transport, a factor explained by the very high costs of road transportation and therefore, unaffordable for most Ugandans (WB- CEM 2007). Uganda’s motorisation rate of 9.3 vehicles per 1000 Ugandans; of which 3.4 are motorcycles is one of the lowest in the world. Korea’s motorisation is 293, that is, 30 times the level of Uganda. This poses a dilemma for productivity as to how significant improving local roads at great cost would help the poor in rural areas.

4. There is increased demand on road usage than other modes of

transport (rail transport considered largely mal-functional) but there has not been sufficient matching enlargement in the level of investment in the sub-sector to expand the road network to take care of increased demands. A good number of motor highways have been in a very bad state for a very long time thus contributing significantly to operational business costs in Uganda (see table 4.6 below). In general, 9.1% of total costs is incurred on transport alone in most businesses.

Table 4.6: Share of Infrastructure Charges in Total Cost by Sector (2000/01 List)

Electricity %

Water & Sewerage %

Transport %

Post and Telecoms %

Agriculture 0.2 0.9 10.3 0.1Fishing 0.0 0.0 4.3 0.1Mining and Quarrying

5.6 0.0 7.0 0.6

Manufacturing 7.4 0.5 9.7 1.9

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Utilities 6.6 0.5 14.5 1.9Construction 1.6 0.4 22.4 2.6Trade 2.6 0.3 6.2 12.3Hotels 2.8 6.3 12.8 2.3Transport 1.0 0.4 16.3 6.1Communications 0.7 0.1 11.6 7.4Financial& insurance

0.6 0.1 6.2 2.8

Business services 2.3 0.8 8.3 4.2Personal services 2.1 0.3 4.0 2.1Total 3.0 1.7 9.1 5.9

Source: Uganda Business Inquiry

5. Although public transport offers the most usable means of transport both in rural and urban areas, public transport in Uganda is disorganized and there is poor enforcement of regulations. As such Uganda has a very poor road safety record with almost 89% of road accidents fatal.

6. The pace of national road paving has not kept up with the traffic increase observed in recent years.

7. Use of road transport is complicated by the high cost of fuel. Uganda’s fuel prices are among the highest in the world partly due to high fuel tax (48% of pretax petrol prices in 2005) but also high dealer margins (26%). In 2004, Uganda’s petrol prices were about twice the levels in China, Laos and Thailand. These are some of the countries Ugandan exporters compete with on the international market.

8. Uganda's national transport system also suffers from very high levels of traffic congestion as a result of the increasing population, sporadic and haphazard design and development, poor maintenance, poor traffic management, and low levels of service.

Upgrading of Uganda’s road network is extremely critical for lowering costs and therefore raising productivity and economic growth. It would also help in minimizing delays in delivery processes such as transporting produce from rural areas. National roads are also strategic transport corridors connecting Uganda with her neighbours particularly, in areas of trade and commerce. It is also important to address the Kampala road traffic bottlenecks because this is the economic hub of Uganda and on the main east-west corridor. Kampala roads are for the most part narrow, of poor design standard and in poor condition. With a population of 1.4 million people, Kampala roads in their current form, pose a major threat to productivity in Uganda.

4.2.4.6 Railways and Petroleum PipelineUganda has a potential rail network of 1,241 km although currently just less than half of the network is operational mainly the export/import cargo routes from Mombasa. In 1992, the railway network was commercialised and this led to suspension of most domestic services on the Western, Northern, and Busoga lines routes, a factor that has caused severe vandalization of the ground infrastructure. Currently the railway sub-sector is operating under severe losses and there is little likelihood of achieving long term

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financial viability without sizeable capital injections and major restructuring of the institution. The joint concessioning of the Uganda and Kenyan moving stock to a private company (Rift Valley Railways) appears not to have done much in terms of effectiveness and efficiency of delivery of services. The absence of an efficient operational passenger and cargo rail transport network has imposed a heavy burden on the road infrastructure and with worsening fuel prices; users (passengers and businesses) have had to dig deep in their pockets in order to use this alternative means of transport.

The main challenges facing the railways sub-sector in Uganda include those relating to physical infrastructure as well as those relating to cross-border operations and competition with other regional networks. The most common challenges include the following:

1. Aging and under-powered locomotives that limit train lengths, notably on high ruling grades (2 percent) from Jinja to Kampala.

2. Shortage of cargo handling equipment in Uganda railways yards and in foreign controlled ports,

3. Inadequate track maintenance due to shortages of materials like sleepers and rail.

4. Slow delivery and Longer transit time relative to competing truck transportation.

5. Lengthy and cumbersome border procedures involving handover of physical cargo (instead of locomotives) to Kenya Railways (KR) at Malaba or Kisumu and the Tanzania Railway (TR) at Mwanza.

6. Lengthy customs clearance procedures and limited hours of border handling which is inconsistent with a 24 hour a day, 7 day a week railway service.

7. The fuel pipeline project connecting Kenya and Uganda (Kampala) has been on the drawing board for a long time. The process to establish a concession with the private sector (51%) has not yet yielded the required results. Moreover, pipeline transportation mode would save the Ugandan Government huge sums of money relating to regular construction and maintenance of roads. It is estimated that at least US$ 15 million would be saved annually, besides other savings such as time and road carnages.

4.2.4.7 Water Transport Waterborne transport has been considered to be amongst the most economic modes of transport for Uganda provided it is efficiently managed and made more reliable. This is because in addition to Lake Victoria which offers a regional water link, Uganda has an extensive inland water transport network based on her numerous rivers and lakes. Currently water transport is underexploited. Only the Uganda Railway Corporation (URC) operates three very old wagon ferries on Lake Victoria (the ferries were acquired in 1983-84), linking Port Bell to Kisumu (Kenya) and Mwanza (Tanzania).

Although the potential for a good and reliable water transport service exists, there are many organizational and operational deficiencies, including poor customs clearing and rail system bottlenecks, which need to be addressed in order to improve times and reliability and

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thus attract clients. Infrastructure, facilities and equipment, both land- and water-side, have been neglected and require substantial rehabilitation. The main challenges facing the sub sector include:

1. Inadequate government budgetary allocations to the water transport sub-sector although it is a crucial sub-sector in poverty eradication.

2. Poor and dilapidated state of existing water facilities especially the huge carriers like the ferries, engine boats and others.

3. Inadequate and ineffective water transport management Institutional layout and structures which can’t provide adequate response to the great challenges in the water transport sub-sector.

4. Poor and inadequate safety standards and a high proneness to environmental hazards are particularly threatening the performance of the sub-sector. Most marine operatives do not have the necessary awareness, technical means and resources to guarantee total health and safety measures and the sub-sector lacks modern navigational aids and radio communications facilities.

5. There is also lack of harmonized water transport legislation in the three East African community states.

4.2.4.8 Air Transport Sub-sectorAir transport plays a very important role in facilitating trade and investment as well as tourism and regional cooperation in Uganda in addition to supporting the country’s competitiveness in the region and beyond. Uganda's national air transport system consists of one international airport, Five upcountry airports and Eight airfields, all owned and operated by the Civil Aviation Authority of Uganda (CAA). In addition, there are six privately owned and operated airfields, situated mostly in the country's major national parks.

Main challenges facing the air transport sector in Uganda include the following: Poor returns due to low international and internal traffic flights.

Low traffic volume increases per unit average costs and reduces profitability in the industry.

Inadequate funding of the Civil Aviation Authority which limits its modernization and expansion programs from old to most modern technologies.

High cost of maintaining upcountry aerodromes such as increase in staff costs, construction costs of aerodromes, transport and communication costs.

Lack of a national carrier limits benefits in the sub-sector. Most of the foreign carriers operating routes to Uganda take up the biggest part of the profits because of their established large scale of operation. This has obviated the need and capacity to operate a national hub and spoke concept at Entebbe. Such a hub would significantly boost trade and tourism.

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4.2.4.9 Energy SectorThe country’s energy sector is still grossly under developed. This is clearly indicated by the limited levels of production and use of energy, a phenomenon that is characteristic of many developing countries. The level of use of modern forms of energy for production, and domestic and public utility is still insignificant, with demand acutely exceeding the current generation and supply.

Currently, the exploited sources of energy in the country include firewood, hydroelectricity, solar and thermal-electricity. The limited harnessing of hydro, thermal and solar power notwithstanding, the country is also endowed with the potential for production of power from, bio-gas, geo-thermal and wind. The country is also making big strides in the exploration of commercial levels of petroleum and uranium.

Hydro-power is the single most important source of electricity for industrial and commercial activities in the country. However, the generation and use of solar and thermal forms of energy is also gaining importance in the country due to the increased demand and drop in hydro power generation resulting from the recent fall in water levels of River Nile. Uganda’s two dams at Nalubaale and Kiira dams along River Nile have a combined capacity of 380MW but are currently producing a mere 120MW. The current demand is at a level of 350MW. In rural areas, only 3% of Ugandan households and 8% in urban areas have access to the hydroelectricity grid (UBOS Statistical Abstract, 2005). The country has a per capita electricity consumption of 62 KWH/year, which, for instance greatly contrasts with the 300KWH/Year of India and the 580KWH/Year of China.

In general, 95 per cent of Uganda relies on wood for domestic use and to a significant extent manufacturing and agro-processing (in sugar, tea and tobacco factories). The thermal power generation capacity is currently 50 MW (there are plans to increase it to 100 MW in the short-run), while the utilisation of solar energy is still limited to domestic use despite the large potential for industrial exploitation. On the other hand, the country’s annual petroleum imports are currently estimated at US $300 million, comprising petrol, diesel and kerosene products.

A number of challenges and significant bottlenecks have been identified as having a significant impact on the levels of productivity especially in the industrial sector which heavily relies on hydro power. These include:

1. Recent scientific observations have confirmed that the River Nile and Lakes Victoria and Kioga are registering consistent drops in water levels due to poor utilization of these water bodies, silting and deforestation. Current environmental degradation if not rapidly checked will therefore, lead to fast decline and eventual depletion of the country’s rivers and lakes which are also the sources of energy.

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2. The country’s financial resource base is too limited to easily support its energy plans. This, therefore, calls for external resource mobilization for core investment in the sector’s energy programs to back the local meager resources.

3. Inadequate public financing, low quality of electricity supply, very low electricity coverage through out the country, especially in rural areas have led to high tariffs charged on customers. This is because energy has high subsidy costs which can only be serviced in the long-term. Low investment in the upstream sub-sector oil companies, poor customer care and high technical and non-technical losses are rampant in public institutions.

4. Other sources of energy are not exploited like renewable energy, bio-gas, wind, mini and micro hydro. Only firewood is widely exploited, used in rural households and for charcoal in urban areas, resulting in adverse effects on the environment.

The quality of delivery of electricity has been an issue of major concern to investors and households. There is persistent load shedding, intermittent supply, and high tariffs. Annual power demand is increasing at a rate of 11.5% resulting in excess demand of 120 MW at peak. The shortage in power supply is attributed both to generation capacity and the quality of transmission and distribution. Transmission, distribution and commercial losses are in the order of 40 percent of net generation, comparatively high by any standard. The lack of adequate and reliable power and transport costs are often cited as the most severe constraints to investment in Uganda.

4.2.4.10 Science and Technology

Science, Technology, Research and Development are central to productivity enhancement, quality improvement, and overall social-economic transformation of society. Generation and diffusion of scientific knowledge offers a new impetus through which the economy realizes improvements in productivity. Productivity is very essential because it contributes significantly to economic well-being and quality of life of the people. Science and Technology (S&T) is a key component of government policy for regional integration, continental competitiveness, and recognition on a global scale. Government has a high agenda program to promote specific research activities including electronics, agriculture, HIV research and small-scale industry through the National Council for Science and Technology and the Presidential Science Excellence Award (PSA) which demonstrates how high-ranking the program is rated by government.

Science has been prioritized throughout the country’s educational system. Funding for students at the public universities is largely limited to S & T courses.

Development of S&T in Uganda is hampered by shortfalls in both the Education systems and the industrial sector. Low enrollment and the persistent poor performance in science subjects at all levels in the

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education system is one of the lead challenges facing Science, Research and Development in Uganda. This is mainly due to attitude problems, the inadequate supply of science teachers and instructional materials in schools as well as the high cost of acquiring these equipments by private education institutions. Currently only about 0.01% of the national annual budget is spent on R&D and this funding competes with other non-research activities. Dissemination of scientific research by universities is very weak.

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-Chapter 5-

Presentation and Analysis of Findings

As indicated in the methodology, the survey instrument was administered among 50 respondents of whom 35 had responded by the date of the deadline. The findings of this survey and corresponding analysis are presented in different headings including:

General Information about the Organisations Participating in the Survey,

Factors that characterise the current status of productivity in Uganda

Factors attributed to perceived increase or decrease in productivity

Sectors that are perceived to be most productive Critical actions necessary to improve productivity in Uganda Level of awareness and commitment to productivity Level of expectations on the role and benefits of the proposed

NPO Factors of perception likely to promote or impede the

establishment of an NPO in Uganda Potential Strategic Partners

5.1. General Information about the Respondents

5.1.1. Mandates

The study sought to establish and confirm the mandates of the respondents in order to determine the key areas of influence in establishing the national productivity movement. The survey established that 23 % of the respondents were in the field of lobbying and advocacy; 15% in research; 12% in economic management; 12% in the provision of technical guidance and coordination; and 12% in the area of training. In all, 27 different mandates were identified for all the 35 respondents. It can be generally stated that the mandates of the respondents are variously spread, reflecting the crosscutting nature of productivity. Lobbying and advocacy; research; economic management; provision of technical guidance and coordination; and training appear to distinguish themselves as some of the potential areas guiding the determination of strategic partners in establishing the NPO in Uganda.

5.1.2. Roles

In all, 64 different roles were identified among the 35 respondents. Given that mandates were widely spread, their corresponding roles have to be equally spread as well. However, a few areas depicted more responses than others. These include: training with 11% of the responses; research about issues affecting the business community at 11%; advocacy at 6.3%; promoting quality and competitiveness of

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locally manufactured products at 4.7%; lobbying at 4.7%. Other areas that had at least 3.1% responses include: ensuring fairness in trade; provision of mechanism and framework for admissions; organising meetings for members; contact points for government, NGOs & International bodies; providing tourism information; offering labour advisory services to members. A total of 24 different roles had only one response each.

5.1.3 Category of the Respondents

The category of the respondent organisations participating in the survey was assessed. The results were as indicated in table 5.1.

Table 5.1: Category of Respondent OrganisationsCategory No. of Organisations PercentGovernment Department / Agency/Project

10 29%

Private Sector 7 20%Employers’ Organisations 4 11%Civil Society Organisations 4 11%Government Ministry 4 11%Others 3 9%Labour Organisations 2 6%Missing 1 3%Total 35 100.00%

It is observed that the majority of respondents were government departments/agencies/projects while 20% were private organisations. However, a few of them were Government Ministries, Employers’ organisations and NGOs.

5.1.4 Activities Relating to Productivity Improvement

Respondents were asked to identify their organisations with the nature of activities relating to productivity improvement. The survey established the results depicted in table 5.2.

Table 5.2: Activities Relating to Productivity ImprovementActivities No. of

OrganisationsPercentage Responding

Productivity advocacy 21 61.8Research and development 25 73.5Management training 21 61.8Skills development 27 79.4Entrepreneurship training and development 15 44.1Quality improvement and assurance 20 58.8Capacity building for enterprises 17 50.0Others (specify) 6 17.6

The survey establishes that the commonest activity carried out by the respondent Organizations in relation to productivity is skills development (79% of the respondents), followed by research and development (74%). Other activities that received more than 50% respondents performing them include productivity advocacy, quality

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improvement and assurance, capacity building for enterprises and management training. The least common activity among respondents was entrepreneurship training and development where 44% of all respondents reported playing a role. Other activities reported were health and safety awareness.

5.1.5 Size of Establishment

The study sought to establish the level of employment of the respondents as a means of gauging the size of establishments participating in the survey. The findings are as indicated in table 5.3.

Table 5.3: Size of EstablishmentNumber of Employees No. of Establishments Percent1-10 6 18.2%11-30 9 27.3%31-100 5 15.1%101- 1000 8 24.2%1001+ 5 15.2%Total 33 100%

The findings suggest that at least 55% 0f the respondents had a total workforce of more than 31 employees. These are considered the medium to large category whose understanding of the concept of productivity was presumed to be very clear. Only 18% of the respondents had less than 10 employees.

5.1.6 Existence of a Quality Control Unit/Department

The existence of a quality control department/unit is a major indicator of the concern and commitment of an establishment to productivity issues. The quality of products and services contributes significantly to the ultimate value of the outputs of particular establishments. It is only monopolistic or heavily protected enterprises that can afford to ignore the essence of measuring and ensuring quality as a means of sustainability and maximizing profits.

The survey has established that of the 35 respondents, 59% had quality control departments/units, 22% had none while 19% indicated that this requirement was not applicable. The result is a good starting point for promoting productivity improvement in the country.

5.1.7 Existence of a Staff Performance and Appraisal System

To ensure that a greater level of labour productivity is maintained, it is important to periodically assess staff performance. The survey has established that 80% of the respondents had in place a staff performance and appraisal system in their establishments, while only 14% had none and 4% saying that this was not applicable to their situation. This is a good outcome although it remains to assess whether the system is used and how well it is applied in individual organisations.

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5.1.8 Existence of a Research and Development Unit

Research and Development (R&D) contributes significantly to innovation and product diversification. It is therefore, a very important factor in maintaining and enhancing productivity levels in an organisation. The survey found that 63% of the respondents had a research and development unit while 28% had none and 9% thought that this requirement was not applicable. The survey however, did not establish the functionality levels for the individual R&D units in these establishments. Future studies under the envisaged NPO should be able to undertake studies in this area.

5.2. Assessment of the Current Status of Productivity in Uganda

5.2.1 Factors Characterising the Current Status of Productivity

The magnitude or degree by which productivity manifests is characterized in a number of factors. Some of the factors can be qualitatively assessed and others quantitatively determined. The respondents were asked to assess the magnitude by which a select number of factors were characterising the current status of productivity in Uganda. Table 5.4 summarises the findings.

Table 5.4: Factors characterizing productivityPercentage of respondents Saying

Factors characterizing productivity Very Poor

Poor

Good

Very Good

Total

(a) Quality of goods and services 3% 39% 52% 6% 100%

(b) Quality of human resources (education system, work practices and ethics, management practices, training and retraining etc)

3% 36% 52% 9% 100%

(c) Standards, Certification, Calibration 3% 67% 24% 6% 100%

(d) Entrepreneurship training and culture 9% 39% 52% 0% 100%

(e) Government support and awareness of the leadership

16% 42% 35% 7% 100%

(f) Research , development , innovation, incubation

10% 53% 34% 3% 100%

(g) Access to investment and working capital 27% 43% 27% 3% 100%

(h) Factor productivity levels 7% 54% 39% 0% 100%

(i) Nature of employment (subsistence vs commercial)

17% 47% 33% 3% 100%

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(j) Business regulations 10% 33% 57% 0% 100%

(k) Conglomeration/clustering of industry 19% 65% 8% 8% 100%

(l) Energy and other utility availability and costs

48% 29% 23% 0% 100%

(m) Nature of export goods 10% 48% 36% 6% 100%

(n) Productivity promotion institutions 21% 52% 27% 0% 100%

(o) Role of government policy on productivity 22% 59% 19% 0% 100%

(p) Financial support to productivity 36% 50% 11% 3% 100%

(q) Ranking with other countries in the region and globally

32% 42% 26% 0% 100%

(r) Culture and traditions 20% 37% 43% 0% 100%

(s) unemployment and underemployment 36% 57% 4% 3% 100%

(t) Public awareness on productivity 33% 52% 12% 3% 100%

(v) Awards and rewards for productivity 31% 53% 13% 3% 100%

The following factors are picked from the above table where the majority of respondents returned a poor or a very poor assessment. The interpretation is that, there has got to be major productivity related improvements in these areas in order to raise the country’s level of competitiveness.

Standards, Certification, Calibration Government support and awareness of the leadership Research , development , innovation, incubation Access to investment and working capital Factor productivity levels Nature of employment (subsistence vs. commercial) Conglomeration/clustering of industry Energy and other utility availability and costs Nature of export goods Productivity promotion institutions Role of government policy on productivity Financial support to productivity Ranking with other countries in the region and globally Culture and traditions Unemployment and Underemployment Public awareness on productivity Awards and rewards for productivity

Out of the 21 factors assessed, respondents said that 17 factors were still performing poorly. 4 were reported to be good in their current state. However, in the field of productivity improvement and competitiveness, good still signifies that a lot is yet to be done. Therefore, as a country, the factors that characterise productivity as assessed above are still far from satisfactory in creating a conducive business support platform for competitiveness. It is pertinent to note from the table that on the question where the respondents were

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asked to assess the role of government policy on productivity, at least 81% reported poor. This means that the government is yet to do what it takes to create the necessary policy environment for greater productivity results.

The following are the factors where performance was reported by respondents as being good but not good enough for competitiveness:

Quality of goods and services Quality of human resources (education system, work practices

and ethics, management practices, training and retraining etc) Entrepreneurship training and culture Business regulations

In the effort to make Uganda competitive, the country should be working towards getting the majority of respondents giving a score of very good to all the 21 factors. That is when Uganda will be in position to mount a challenge to other competing countries in the international market place. This is what the envisaged NPO should be challenged to deliver.

The respondents provided the following additional factors characterising the current productivity situation in Uganda:

Poor pay Rampant corruption Misleading by the Media Inadequate Tax incentives Registration services under UIA Increased global fuel cost Lack of incentives Lack of technical and marketing skills Lack of government policies to enhance productivity Pessimist attitudes Inadequate encouragement of investors to Uganda Poor working conditions and denial of workers’ rights Lack of streamlined institutions Vulnerability to natural factors like climate Limited ability to undertake cost benefit analysis Resistance to change Regional instability

5.2.2 Government Support for a Conducive Productivity Environment

The productivity movement can only flourish where government provides a good supportive environment. In this regard, respondents were asked to give their opinion about whether government has provided a good supportive environment for the establishment of a productivity movement in Uganda. Of the 35 respondents, 48% said yes, 23% returned a no, 23% said that they did not know while 2 respondents chose not to answer.

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From these results, we can observe that the supportive environment provided by government was only tending to being good but has still not met the satisfaction of many respondents. There is need to still explore further the issue of what would constitute a very conducive government support environment. There is also need for greater awareness about what government has achieved in this area.

In a related question, respondents were asked to select from a given list, what they thought government had provided in support of a conducive environment for the productivity movement. There are three items that featured more prominently, namely;

- Existence of appropriate support policies- Existence of infrastructure for the productivity movement- Availability of a budget line to support productivity

5.2.3 Factors Responsible for the Non-existence of an NPO in Uganda

The table below summarises the response as to what constitutes the main factors responsible for the non-existence of an NPO in Uganda. The factors are ranked in the order of merit.

Table 5.5: Ranking of Factors for the Non-existence of an NPO in UgandaReason Percentage of

Respondents VotingRank

Lack of awareness 74% 1Lack of government policy 65% 2Lack of commitment 65% 3Lack of funding 56% 4Role of NPO being taken by other organisations

32% 5

Political situation 26% 6Lack of qualified people 9% 7Other 12% 8

Lack of awareness, absence of government policy, lack of commitment and lack of funding are cited as the most important factors responsible for the non-existence of an NPO in Uganda. It is interesting to note that lack of qualified personnel and the general political situation are not considered as major constraining factors. The lack of awareness could be looked at in the context of not appreciating how important emphasis on productivity would generate economic growth and improvements in the quality of life of the people.

5.3 Factors Attributed to Perceived Changes in Productivity

In the last 20 years, Uganda has undergone incredible transformation from a failed state to one of the world’s fastest growing economies (GDP growth 8.9% 2007/2008). Many features of a dynamic economy are visible in Uganda’s growth experience including the diversification of exports, technology component of imports and exports, human capital is improving from a very low base, however, the population is expanding very fast and income inequality

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worsening. Respondents were therefore, asked to give their perception about whether Uganda’s productivity level was increasing or decreasing and the factors behind that trend.

According to the survey, 55% of the respondents indicated that the productivity level was increasing, 30% said that it was decreasing, while 15% did not know. These results suggest that whereas the majority felt that the productivity level was increasing, the number that is saying that it is decreasing or that they did not know is still quite big. By implication, there is still room for productivity improvement and awareness in Uganda.

The table below summarises the perception of respondents about how numerous factors have contributed to the productivity levels in Uganda.

Table 5.6 Respondents’ Perception on how Different Factors Have Contributed to Changes in Productivity

Positive Negativea) Macro-economic environment 77% 23%b) The education curriculum 39% 61%c) Nature of tertiary training/vocational training

and education41% 59%

d) Public expenditure 13% 87%e) Coordination and harmonization of development

planning34% 66%

f) Level of salaries and wages 9% 91%g) Access to the sea ports 12% 88%h) Availability and quality of Air and rail transport 12% 88%i) Quality of road transport 19% 81%j) Agricultural advisory services 69% 31%k) Research, innovation, and development 36% 64%

l) Industrial clustering 25% 75%m) Industrial parks 32% 68%n) Quality of goods and Services 41% 59%o) Public awarenessp)

35% 65%q) Corruption 0% 100%Average 31% 69%

Apart from the macro-economic environment and Agricultural advisory services, respondents felt that the rest of the other factors were contributing negatively to productivity. It can be noted that the intensity of the perception of the respondents on the Negative Vote is very significant (average 69%). In other words, a lot has to be done in terms of the necessary improvements for greater efficiency especially in areas where service delivery is required.

Additional factors which respondents identified as responsible for changes in productivity levels include the following:

Lack of quality training Local leaders mislead people Rural-urban migration

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Power shortage Lack of institutions targeting such issues Culture-attitude of the people should change Expenditure indifference District administration Lack of a productivity centre Under utilization of productive factors Over exploitation of natural resources Negative attitudes towards work Marketing infrastructure High level of inflation

5.4 Sectors Perceived to be most Productive in Uganda

The performance of the sectors has major implications for the economic growth of the country. Sector contribution, by and large, is determined on the basis of how productive a particular sector is both in terms of outputs and efficiency which two are major variables in the measurement of productivity. The survey therefore, sought to establish how respondents perceived particular sectors, in their current form, were contributing to the performance of the national economy. They were required to indicate their score (from 1 to 10), on how productive major sectors were to the national economy. The results were varied and widely spread. However, the information in table 5.7 was extracted to facilitate the process of ranking the sectors based on the degree of how productive they were in the national economy. The outcome of the ranking is shown in table 5.7 where education, fish and tourism were perceived to be the most productive.

Table: 5.7 Ranking of Sectors Based on Perception of Contribution to the EconomySector Score

(1-10)Frequency Rank

Education 7 19% 1Fish 7 17% 1Tourism 7 16% 1Agro-Processing 6 23% 2Crops 5 23% 3Manufacturing 5 22% 3Construction 5 22% 3Health 5 22% 3ICT 5 16% 3Transport 5 16% 3Livestock 4 30% 4Engineering Services

4 23% 4

Forestry 4 14% 4Public Service 3 23% 5Infrastructure 1 22% 6

Forestry, Public Service and Infrastructure were perceived to be least productive. This score could have been on account of how poorly these three areas are currently performing.

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5.5. Critical Actions Necessary to Improve Productivity in Uganda

There are a number of critical actions required to improve productivity in Uganda. However, given the limited resources, a choice has to be made on the most critical issues to be addressed. Respondents were therefore, asked to indicate (on a scale of 1 to 5) what they considered to be the most critical actions for the rapid improvement of productivity in Uganda. Table 5.8 depicts the results of the ranking by the respondents.

Table 5.8 Ranking of Critical Actions Necessary to Improve Productivity in UgandaScores 1 -5

Rank

Action 1 2 3 4 5

Frequency of score %

a) Address Agricultural Productivity 6 0 6 6 82

1

b) Promoting principles of Total Quality Management

6 3 9 12 70

2

c) Energy and infrastructure development 3 6 3 21 67

3

d) Address Industrial productivity 6 0 9 18 67

4

e) Restructuring of the education and training system

3 6 12 12 67

5

f) Dealing with attitude change 6 3 12 15 64

6

g) Developing the necessary competences for productivity management

3 12

3 19 63

7

h) Strengthening vocational training 6 0 15 17 62

8

i) Strengthening entrepreneurship training 6 0 9 26 59

9

j) Establishment of Standards and promoting the quality and safety of all goods and services.

3 3 12 24 58

10

k) Address productivity in the Public Service 6 0 18 18 58

11

l) Entrenching principles of good corporate governance

3 6 21 12 58

12

m) Establishment of an NPO 9 6 16 12 56

13

n) Development of a government policy on productivity

6 3 16 19 55

14

o) National awareness and advocacy campaigns 6 6 12 21 53

15

p) Coordinating body for productivity activities 6 10

10 23 51

16

q) Improving management competence, management systems, HRD/HRM systems and practices

3 0 18 30 49

17

r) Security and good governance 3 3 15 30 49

18

s) Promoting International Standard Classification for enterprises (ISO)

9 6 9 28 47

19

t) Improving the regulatory environment 3 6 21 24 46

20

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u) Improved social protection 9 9 12 26 44

21

v) Training in corporate governance 6 6 23 23 42

22

w) Strengthening the tripartite arrangement of government, labour and the private sector

6 3 24 27 40

22

x) Clustering and conglomeration of industries 0 3 21 36 39

23

Respondents were further asked whether their individual institutional arrangement was addressing productivity issues adequately. 69% said Yes, while 31% said No. In other words, respondents largely felt that their internal institutional arrangements were quite sufficient in ensuring a smooth flow of their operations.

5.6. Level of Awareness and Commitment to productivity

In this section, the researcher was assessing the level of awareness and commitment of the respondents towards productivity. A number of questions were raised in this regard.

(i). As to whether the respondents were aware of any government led productivity initiative in the country, 70% returned a Yes vote while 30% said No.(ii). Respondents were then asked to indicate the government led productivity initiatives in the country that they were aware of. They indicated the following:

Result Oriented Management (ROM) Output Oriented Budgeting (OOB) UNIDO Productivity Centre GATSBY (MUK) Improvement in Fisheries Production Support to Federation of Uganda Employers (FUE) Prosperity for All (PFA) Universal Secondary Education (USE) Tax Holidays for New Investors A Productivity Bill being drafted Poverty Eradication Action Plan (PEAP) Uganda Investment Authority (UIA) National Agricultural Advisory Services (NAADS) Plan for Modernization of Agriculture (PMA) National Planning Authority (NPA) Northern Uganda Social Action Fund (NUSAF) Medium Term Competitiveness Strategy (MTCS) Competitiveness and Investment Climate Strategy (CICS) Uganda National Bureau of Standards (UNBS)

(iii). Regarding awareness about the existence of any private sector/NGO led productivity initiatives in the country, 57% said that

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they were aware, while 42% said they did not know. They mentioned the following examples:

Uganda Flower Exporters Association (UFEA) Support to Federation of Uganda Employers (FUE) UNIDO, Master Craftsman Programme at MTAC - skill upgrading Diagnostic Trade Integration Study (DTIS) Private Sector Foundation of Uganda (PSFU) programmes Agricultural Productivity Enhancement Programme (APEP)- by

USAID ACTION AID AFRICARE Quality Assurance Certificate Mechanism (QUAM)

It is observed that not so many examples were originating from the private sector. In fact, some examples cited are government led initiatives.

(iv). On the question of whether the respondents were satisfied with the level of coordination of productivity initiatives in the country, 48% said Not at all, 45% indicating average, while 3% were satisfied and 3% did not know. This implies that the country has to improve on the level of coordination of productivity initiatives in order to address the short comings.

(v) Regarding Government commitment towards productivity matters in the country, 56% of the Organizations have the view that somehow the government has demonstrated its commitment towards productivity matters in the country, as only 14% said that Government is fully committed and 21% saying not at all. There is therefore, need to do more in demonstrating Government commitment towards productivity.

(vi) Respondents were asked on whether the concept of productivity was known and cherished in their organisation. The response was that 65% indicated that the concept was Well known, 24% said Somehow and 12% said Not at all.

(vii) Respondents were further asked on how their organisations defined productivity. 67% defined productivity as output/unit cost, which was the correct answer. 18% said that productivity is the same as production, 9% indicating that it is output/labour, while 6% saying they did not know. There is need to ensure that the concept of productivity is understood by everybody especially in all key public and private institutions.

(viii) As to the question whether the respondents’ organisations deliberately measured productivity, 45% said Yes while 55% said No. Of those that said Yes, 75% indicated that they had a productivity measurement system while 25% did not have any.

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(ix) Regarding making employees aware of productivity as part of their organizational culture, 62% indicated Yes while 38% said No.

(x) On rewarding and promotion of employees, 78% said that they consider productivity as one of the factors for the decision and 21% said No. In the same way, 88% said that they consider quality as one of the factors for the decision to reward and promote employees.

(xi) Different people interpret the application of the concept of productivity differently. This question was intended to measure whether those differences were significant or not. Respondents were therefore, required to respond to certain statements and indicate whether they agreed or disagreed with them. The analysis of their responses is summarized in table 5.9.

Table 5.9 Interpretation of the Application of the Productivity Concept by the Respondents

Application

Agree Disagree

% %

a) Productivity is the same as production 3 97

b) Productivity applies to the blue collar workers only

6 94

c) Productivity improvement takes away jobs 12 88

d) Productivity improvement only benefits employers

3 97

e) Productivity improvement only just means working harder

3 97

f) Productivity improvement is all right for factory jobs but it does not work for white collar workers

0 100

g) Productivity improvement increases stress and reduces job satisfaction.

3 97

The variation in the interpretation of the application of the concept of productivity is not significant as evidenced by the result in Table 5.9. There is a common understanding and appreciation of the interpretation of the concept.

(xii) Regarding a question on the responsibility for improving productivity, 97% of the respondents said that productivity improvement is the responsibility of everybody including Government, management and the workers.

(xiii) On their organization’s commitment to productivity matters, respondents demonstrated this in several ways and the results are summarized in Table 5.10.

Table 5.10 Demonstration of Commitment to Productivity

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Respondents have shown a reasonable degree of commitment to productivity matters within their organisations, particularly in the areas of advocacy, capacity building, R&D, technology acquisition and quality management.

(xiv) The Poverty Eradication Action Plan (PEAP) identifies production and competitiveness as one of its pillars. Respondents were asked to identify activities done by their organisations in relation to this pillar. Of the 35 respondents, only 21 responded to this question and indicated the following activities:

Performance improvement training Mobilisation and training Employment creation in manufacturing and farming Improving quality management Advocacy for value addition in agro processing Advocacy for greater attention to be given to productive sectors

in the national budget etc. Provision of ideas, knowledge, skills development and quality

assurance Advocacy for value addition Risk management and mitigation for improving competitiveness Training programmes in Vocational and Technical Education Promote coffee production through nurseries and value addition

through joint ventures Providing policies, standards, regulations with regard to ICT as

tools enabling competitiveness and productivity Developing human resource Training of employees on productivity modules, skills

improvement and quality management systems (ISO) Entrepreneurial training and business development Quantity and quality Improvement Innovation and uncontested product solutions to be above

competitors Quality assurance, conformity assessment for compliance to

standards and measurement of accuracy (Metrology) Capacity building for SMEs R&D, Technology acquisition, capacity building

(xv) The Researcher wanted to know from the respondents how Uganda fairs in terms of productivity performance when compared

Activity Respondents Committed

(%)1 Advocacy programmes on

productivity56

2 Capacity Building 713 Research , Development and

Innovation50

4 Technology Acquisition 505 Quality management and

assurance65

6 None of the above 3

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with other countries. The responses were almost evenly spread as indicated in table 5.11.

Table 5.11: Comparison of Uganda’s Productivity Status with other Countries

Response Respondents (%)

Very Poor 12

Poor 36

Average 33

Good 18

The cumulative total of respondents that said poor and above is 48%. In a nutshell, in terms of productivity performance, Uganda’s relative positioning vis-avis other countries could be considered to be less than average.

(xvi) The study sought the opinion of the respondents over areas where Uganda had a competitive advantage or not over other countries. Table 5.12 depicts the opinions of the respondents.

Table 5.12 Respondents’ Assessment of Uganda’s Competitive Advantage

Respondents Saying

Area Assessed Uganda has a competitive advantage (%)

Uganda does not have a competitive advantage (%)

a) Quality of education and training 81 19

b) Geographical positioning 48 52

c) Economic development policies 64 36

d) International aid support 81 19

e) Political stability 77 23

f) Weather and climatic conditions 94 6

g) Gender and equal opportunities in employment

90 10

h) Research, innovation and development capacity

32 68

i) Corporate governance practices 15 85

j) Total factor productivity 17 83

k) Quality of labour 28 72

l) Organised and experienced labour movements

13 87

m) Development planning coordination 28 72

n) Quality of land and soils 93 7

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o) Organised and experienced employers’ organisations

43 57

It is observed that there are a number of areas where the respondents felt that Uganda has a competitive advantage. However, there are still a number of areas where they said that this competitive advantage does not exist. These areas include; Geographical positioning, Research, innovation and development capacity, Corporate governance practices, Total factor productivity, Quality of labour, Organised and experienced labour movements, Development planning coordination and Organised and experienced employers’ organisations.

5.7 Level of expectations on the role and benefits of the proposed NPO

5.7.1 Perceived Benefits

There are a number of possible benefits that would be generated from the establishment of an NPO. From a list of 12 potential benefits, respondents were asked to indicate their level of preference on each. The results are summarized in table 5.13. It should be noted, not all possible benefits could be included on the list.

Table 5.13: Perceived Benefits of the Proposed NPO

Assessed Benefits

Scores 1 - 51 2 3 4 5Frequency of Scores (%)

a) Improving quality of goods and services 10

3 6 25

56

b) Quality of export goods and services 9 3 9 16

63

c) Entrepreneurship skills 6 3 9 41

41

d) Research, innovation and development 3 3 10

26

58

e) Networking with other organisations 6 3 22

34

35

f) Just-in-time methods of production 13

6 22

12

47

g) Advice to government on policy issues 6 3 13

19

59

h) FDI and DDI attractiveness of the country 7 0 18

36

39

i) Technology transfer 6 3 23

26

42

j) Industrial clustering and conglomeration 9 3 25

28

35

k) Optimal use of production resources 13

0 9 22

56

l) Quality and quantity of the human resource 7 3 6 19

65

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An analysis of the above figures reveals that the level of preference was skewed in favour of the following benefits:

Quality and quantity of the human resource Quality of export goods and services Advice to government on policy issues Research, innovation and development Optimal use of production resources Improving quality of goods and services

5.7.2 Envisaged Roles of the Proposed NPO

(i) Ten roles for the proposed NPO were identified and respondents were asked whether they agreed or disagreed with them. The following were the results.

Table 5.14: Envisaged Roles of the Proposed NPO

Proposed Roles Agree

Disagree

(%) (%)

a) A promoter of productivity 100 0

b) A capability builder 80 20

c) A catalyst 93 7

d) A mobiliser 86 14

e) An information disseminator 100 0

f) A networker 90 10

g) An initiator 71 29

h) A pioneer 64 36

i) A policy Analyst 87 13

j) An advocate 83 16

The results indicate that the stakeholders generally agree with the proposed roles of the NPO. The results further indicate that the respondents were unanimous in that position.

(ii) As to the question whether the respondents were aware of any existing organisations that play roles similar to those of an NPO, only 54% said Yes and 46% said No. A list of organisations that they mentioned as playing a similar role include the following:

- Uganda National Bureau of Standards- Ministry of Gender Labour and Social Development- Enterprise Uganda- Uganda Manufacturers Association- Private Sector Foundation Uganda- National Planning Authority- Uganda National Bureau of Standards- Uganda Export Promotion Board- Federation of Uganda Employers- Uganda Investment Authority

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- Plan for Modernization of Agriculture- National Forestry Authority- National Agricultural Research Organisation- National Agricultural Advisory Services

(iii) The proposed NPO would have a number of competing priorities. Respondents were therefore asked to indicate in order of preference what they thought would be the most important priorities to start off with.

Table 5.15 Selection of Priority Programmes for the Proposed NPO

Programme

Scores 1-5

Rank

1 2 3 4 5Frequency of Scores (%)

a) Management training programmes and capacity building (benchmarking) study visits to advanced countries.

7 19 6 23 45 2

b) In-depth studies and research, information dissemination through technical publications, conferences, workshops

10

19 32 3 36 3

c) Consultancy services to industry 23

20 37 7 13 5

d) Public awareness campaigns and sensitization of leadership in government on productivity issues.

10

3 10 17 60 1

e) Productivity measurement techniques, tools and monitoring systems

13

7 20 30 30 4

The analysis reveals the following sequencing of priority programmes for the envisaged NPO.

1. Public awareness campaigns and sensitization of leadership in government on productivity issues

2. Management training programmes and capacity building (benchmarking) study visits to advanced countries.

3. In-depth studies and research, information dissemination through technical publications, conferences and workshops,

4. Productivity measurement techniques, tools and monitoring systems,

5. Consultancy services to industry

5.7.3 The Need for a Coordinating Institution

In the effort to launch a national productivity movement in Uganda, a decision has to be made between establishing an entirely new organisation or not. 64% of the respondents voted for a new organisation and 36% said No. Regarding a question as to whether the functions of an NPO can be performed through active coordination of the various existing organisations, 55% said Yes and

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45% said No. Other factors held constant, the preference of the respondents is to set up an entirely new organisation but the alternative option of assigning an existing body to coordinate has also not been ruled out.

5.7.4 Prevailing Factors or Perceptions likely to Promote or Impede the Establishment of an NPO in Uganda

In the process of establishing new organisations, proponents often encounter perceptions that may impede or promote the establishment of those organisations. The establishment of an NPO in Uganda cannot be an exception. Therefore, respondents were asked to identify from an existing list, major prevailing factors that are likely to promote or impede the establishment of an effective and sustainable NPO in Uganda. The results are analysed in table 5.16.

Table 5.16: Factors Promoting or Impeding Establishment of an NPO

Factors/Perceptions Frequency of Responses (%)

Promotes Impedes

Sociological Factors

Too many Government Organisations 6 94

Same Roles with Existing Organisations 14 86

Government does not have money 0 100

It is not a key priority 15 85

Lack of skills to start and run such an organisation

8 92

Technical factors

Availability of a government policy on productivity

87 13

Total Quality Management 84 16

Improvements in the regulatory environment

91 9

Government commitment to national awareness on production

94 6

An appropriate curriculum and training system

91 9

Existence of industrial parks and incubation centres

97 3

An effective and efficient public service 87 13

A strong tripartite arrangement (government, labour, private sector)

87 13

The sociological factors are largely feelings or issues of perception. The results indicate that existing perceptions could threaten the creation of an NPO. However, these problems could be overcome with increased awareness and lobbying of the people concerned.

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On the other hand the perceptions which respondents had about the technical factors were all positive and justify the need for the establishment of an NPO.

5.7.4 Potential Strategic Partners

Respondents were given a list of functions and were asked to identify those that their organisations would be willing to support or get involved in as part of the process to establish and promote the productivity movement in Uganda. The results are summarized in table 5.17.

Table 5.17: Selection of Functions by Stakeholders

Functions Respondents Choosing

(%)Public awareness campaigns and advocacy 58

Productivity capacity building 70Consultancy services 52Catalyst for productivity culture 52Information gathering, processing and dissemination 64Networking with local and international organisations on productivity

79

Attitude change 76Promotion of good corporate governance practices and skills

64

Policy development and analysis 61Research, innovation, development and incubation 67

Stakeholders/respondents demonstrated willingness to participate in all activities as were proposed to them. There appears to be no shortage of allies should the NPO establishment take effect. Annex 5 identifies the stakeholders with their corresponding choice of functions. Respondents were asked to indicate whether they were already involved in these activities. Only 23 out of 35 answered this question. Of those that answered, 91% indicated that they are already engaged in these activities.

The study sought to identify the kind of support and collaboration the respondents would need (from government, the general public, the private sector and other players) in order to successfully execute the above functions. Their proposed requirements are as outlined below.

Financial support Policy support Participation Productivity awareness in the media Creation of a favorable environment for Improvement of the infrastructure Fights against corruption

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Subsidize telecommunication rates Subsidize education sector Provision of regulatory framework Power for all special industries Trained skilled workforce Exchange of technical staff /information Stronger networking Awareness creation Involvement of key stakeholders Sensitizing the masses on how productivity can be improve Enforce quality reputation at Local Governments Improving public services delivery

Regarding financial support, 79% of these organisations indicated that they do not have any specific budget for these activities.

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-Chapter 6-

Policy Implications and Recommendations

Productivity is a key concept defining the competitiveness of any country, sector or individual enterprise. It is therefore, a very important component of the engine of economic growth. We have noted that a number of institutions have been involved in issues related to productivity albeit, unconsciously. However, given the importance of productivity, it is high time the country formulated a strategy for deepening this concept in all our endeavours.

There is evidence from many other countries that mainstreamed productivity from the word go of their transformation process. We have noted that countries like Japan launched their NPOs in the 1950s and have ripped numerous benefits from activities pursued by this organisation. There are many other testimonies from other countries such as Botswana, Cyprus, Singapore, India, South Africa, Mauritius, South Korea, Malaysia and USA.

The evidence of a positive contribution to GDP from exports and increased yields and improved quality of life lends further support to the case for emphasizing productivity. There is need to move productivity to the forefront of policy priorities by the government of Uganda. The study notes existing government efforts in this area demonstrated by a couple of initiatives such as the inclusion of competitiveness as a pillar in the PEAP, the Plan for Modernisation of Agriculture, Enterprise Uganda, the National Export Strategy and the Competitiveness and Investment Climate Strategy (CICS) and the establishment of the NPA. However, what has so far been done is simply a tip of the iceberg.

The study identifies a number of areas of concern. These areas range from economy wide physical constraints and bottlenecks to individual level production inefficiencies. Some of these constraints call for direct government policy intervention while others like firm level inefficiencies call for private intervention and yet others such as policy research, capacity building, quality improvement, call for a coordinated arrangement to bring about the necessary changes. The study has identified four main areas of policy attention. These areas are the following:

6.1 Institutional Arrangements

6.1.1 Structure

The study has noted the existence of a number of institutions each playing a role in productivity enhancement. However, the coordination mechanism of these institutions, the cohesion of their programmes and precision in focusing their efforts turn out to be the biggest shortcoming. Besides, there are a number of critical areas relating to productivity that these institutions do not actually cover. There is therefore, ardent need to create an apex body to coordinate

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the productivity movement in the country. The creation of an autonomous body is the desirable position as evidenced by the survey findings in chapter 5. However, in fast tracking the productivity initiative, there is need to think of alternative mechanisms. The consultant recommends the creation of a National Productivity Council (NPC) with a Secretariat and coordinating body housed in one of the existing government institutions (see box 1 on the proposed criteria for selecting the coordinating body). The study identifies the National Planning Authority as the ideal institution to constitute the coordinating body. The coordinating body will create a separate Unit within the existing structure to be exclusively in charge of productivity matters. The unit will be called the National Productivity Unit (NPU).

The NPC will be the governing council for all productivity initiatives in the country. The membership of the NPC shall comprise representation from social partner institutions namely; government, business, private sector, academia and NGOs. The ToR of the Council will be developed by the Council itself facilitated by the National Productivity Unit. The following is the proposed representation to the membership of the NPC.

1. Uganda Manufactures Association (1)2. NGOs (1) 3. National Planning Authority (1)4. Government (5) (represented by MFPED, MoES, MoGLSD,

MAAIF, MTTI)5. Small and Micro Enterprises (1)6. Universities and Colleges (2) 7. BTVET Institutions (1)8. Ministry of ICT (1)9. Uganda Management Institute (1)10. Uganda Bureau of Statistics (1)11. Ministry of Public Service (1)12. Uganda Small Scale Industries Association (1)13. Uganda Women Entrepreneurs Association (UWEAL) (1)14. Management Training and Advisory Centre (1)15. Foundation for Advancement of Small Enterprises and

Rural Technology (1)16. Uganda National Bureau of Standards (1)17. Enterprise Uganda (1)18. Competitiveness and Industrial Climate Strategy (1)19. Uganda Export Promotion Board (1)20. Services Sector (1)21. Agriculture (2)22. Uganda Industrial Research Institute (1)23. Enterprise Uganda (1)24. Federation of Uganda Employers (1)25. National Organisation of Trade Unions (1)26. Confederation of Free Trade Unions in Uganda (1).27. Uganda National Farmers Federation (1)

Box 1: Criteria for Selecting a National Coordinating Body for the Productivity Movement in Uganda

Development of the following criteria was informed by the experience drawn from other countries and the assessment of the local situation. The elements of this criteria include:

Legal Status. The body should be a government body with jurisdiction over different crosscutting issues that relate to productivity.

Its primary mandate and sector coverage should be in line with the proposed scope of concern of the productivity movement, with no sectoral barriers.

It should have a level of authority high enough to influence policies and programmes touching on varied sectors of the economy.

It should have sufficient influence to mobilise resources for the productivity movement and form networks with other NPOs.

It should have the credibility and confidence of key political players whose support is critical for the success of the productivity movement

Its should have a mandate to coordinate different stakeholders and

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The number of potential collaborators /strategic partners with government in promoting productivity is much larger than the membership proposed above. This means that there will be need for the NPC in general and NPU in particular to maintain regular liaison with all the key stakeholders in the execution of this responsibility. A full list of some of the Key Potential Strategic Partners is presented in Annex 3.

6.1.2 Mandate and Functions of the NPC

(a) MandateTo develop and coordinate nation-wide strategies and policies for productivity promotion; provide guidance and focus to stakeholders in the public sector, private sector and NGOs; and integrate productivity into the medium and long term economic and social development objectives of the country

(b) FunctionsThe functions of the National Coordinating Institution would include the following:

Preparing the necessary documentation and following through the process of establishing a National Productivity Organisation (NPO) in three years time.

Developing and coordinating nation-wide strategies and policies for productivity promotion

Integrating productivity into the medium and long term economic and social development objectives of the country

Initiating and maintaining mass promotional campaigns on productivity ideas, concepts, and culture aimed at workers, students in education and training institutions, the youth, public officers, etc. (through mass media, workshops, conferences, training programmes in schools and universities etc.).

Providing guidance and focus for the integration of productivity promotion in the different government ministries’ activities

Securing a conducive business environment for SMEs and entrepreneurship development, while looking after broader society interests and coordinating them with the interests of other stakeholders and social partners.

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Identifying and disseminating information on the most urgent and important country economic and social objectives in which productivity improvement can play a great role.

Engaging organs of Government, Parliament, social partners, NGOs and other stakeholders on productivity issues.

Providing constructive feedback to the Government and the business communities, workers’ organisations and other stakeholders on the country’s productivity status and the main productivity barriers to be dealt with at different economic levels.

Networking with existing major providers of training, consulting and other productivity services both in the private and public sectors

Representation at the regional/international events related to productivity organisations (APO, PAPA, EAC/SADC productivity network) and international events related to productivity promotion.

Work with relevant Agencies on facilitating improvement of the general business environment, labour legislation, and promote competitiveness and export orientation.

Analysing existing legislation and where necessary, propose changes in regulations (through relevant mechanisms) to eliminate or reduce productivity constraints in the macro-economic environment.

Create Specialised Sectoral Committees charged with various responsibilities regarding productivity enhancement in different sectors of the economy.

Given the above functions, the NPC will in summary be characterized with the following responsibilities:

Catalyzer and organizer of the productivity movement; A local productivity capacity builder; An integrator of national resources and expertise around

national objectives; Productivity services provider (training, consulting, enterprise

development); Productivity culture promoter; Informational clearing house in productivity areas; Networker;

It is important to emphasize that the NPC will not be working alone but rather through a well coordinated arrangement with its stakeholders who will be charged with the responsibility of implementing identified initiatives corresponding to their mandates.

The NPC/NPU arrangement is an interim measure leading to the establishment a fully fledged body called the National Productivity Organisation within three years.

6.1.3 Funding IssuesThere has been increasing public outcry about national public expenditure and this perception has tended to negate all efforts towards creating new public institutions, whatever the justification.

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However, Uganda has pursued a policy of liberalization and has opened its borders to global competition5. The need therefore, for integrating the productivity concept in all our endeavors is an inevitable undertaking dictated by circumstances. Everything possible should be done to embrace productivity as an issue of national concern and therefore avail necessary resources for launching and implementing the productivity movement in the country. The following are the potential sources of funding:

- Existing budget of the NPA/NPU. Additional allocation should be sought.

- Donor support- Support from the stakeholders- Rationalizing budgets of member institutions- Support from counterpart institutions from other countries and

regional groupings such as PAPA, APO, EAC/SADC productivity network

6.2. Creating an Enabling Environment for Productivity Enhancement

The survey identified a number of areas where Uganda’s performance is still rated to be undesirable in terms of attaining the necessary level of competitiveness. Key areas identified include:

Standards, Certification, Calibration; Government support and awareness of the leadership; Research, development, innovation, incubation; Access to investment and working capital; Factor productivity levels; Nature of employment(subsistence vs. commercial); Conglomeration/clustering of industry; availability and costs of energy and other utilities; Nature of export goods; Productivity promotion institutions; Role of government policy on productivity; Financial support to productivity; Ranking with other countries in the region and globally; Culture and traditions; unemployment and underemployment; Public awareness on productivity; Awards and rewards for productivity.

In order to effect necessary improvements in these areas, there is need to create a conducive environment for this to happen. The following measures are proposed:

1. Address the issue of limited awareness about productivity by launching a massive awareness and advocacy campaign throughout the country. This should be one of the top priority issues to be addressed by the NPU/NPC

2. Establish a government policy on productivity. This will help to provide direction on the key areas of concern. It will identify responsibility centres and milestones to be achieved.

5 Uganda is a member of the WTO76

3. Endorse the proposed interim arrangement for launching the productivity movement i.e. inaugurating the NPC and NPU institutional arrangement and corresponding activities.

4. Avail funding for coordinating the productivity initiative through sources as indicated in section 6.1.3.

5. Demonstrate increased government commitment by mainstreaming productivity in the country’s national development plans and budget.

6.3. Prioritizing Sectors Perceived to be most active in Uganda

Since the growth of the economy is largely dependent on how well national sectors are performing, it is important to identify the most productive sectors where the concept of productivity should be immediately applied. The Consultant’s choice of sectors does not differ from what the stakeholders have identified. The key sectors thus include the following: education; fish; tourism; agro-processing; crops; manufacturing; construction; health; ICT and infrastructure.

6.4 Critical Actions Necessary for Improving Productivity in Uganda In launching the productivity movement in the country, there are a number of critical areas which stakeholders feel must be addressed. These are identified in order of importance as follows:

1) Addressing Agricultural Productivity2) Promoting principles of Total Quality Management3) Energy and infrastructure development4) Addressing Industrial productivity5) Restructuring of the education and training system6) Dealing with attitude change7) Developing the necessary competences for productivity

management8) Strengthening vocational training9) Strengthening entrepreneurship training10) Establishment of Standards and promoting the quality

and safety of all goods and services.11) Addressing productivity in the Public Service12) Entrenching principles of good corporate governance13) Establishing a National Productivity Organisation14) Developing a government policy on productivity 15) National awareness and advocacy campaigns16) Improving management competence, management

systems, HRD/HRM systems and practices17) Security and good governance18) Promoting International Standard Classification for enterprises

(ISO)

6.5 Concluding Remarks and Way Forward

6.5.1 Conclusions

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The study has pointed to salient issues of productivity in Uganda and through the survey, arrived at the following conclusions for the way forward. The study has assessed the current productivity situation in

Uganda and noted that current productivity levels as manifested by a number of important factors are still far from what is desirable to provide a meaningful challenge to other competing countries. These factors include; the quality of goods & services; the quality of human resources, education and training facilities, policies and regulations, public awareness, factor productivity and many other related issues.

The study examined the factors responsible for the current productivity levels in the country and the perception of the stakeholders about the contribution of the factors identified as being very negative. Some of the factors identified include the education curriculum, nature of tertiary training/vocational training education, Access to the sea ports, Industrial parks, Coordination and harmonization of development planning, quality of Air and rail transport, Research, innovation, and development and Public awareness

The study has confirmed the need for a National Productivity Organisation (NPO) and recommends that in order to ignite the process; the most feasible institutional arrangement at the moment is to commission, as an interim measure, an existing government institution (NPA) to be the apex body for coordinating the productivity movement in Uganda. NPA should coordinate the activities of what would otherwise be an NPO for a period of three years, pending the creation of a fully fledged NPO. The National Planning Authority shall operate under the umbrella of a National Productivity Council as detailed in section 6.1 above. In addition, the study has identified key stakeholders for establishing and deepening the productivity movement in Uganda and these are presented in annex 3.

Finally, it is emphasized that the productivity movement can only be successful if all the major stakeholders play an active role and are always kept abreast of the activities of the movement.

6.5.2 Way Forward1. The National Planning Authority in collaboration with the BNPC

and the COMSEC should organise a high profile National Conference of key stakeholders to discuss the findings of the survey. The workshop should bring together stakeholders in government, business, labour, NGOs, academia and the development partners. The conference shall seek to achieve the following objectives:

2. Facilitate national dialogue on the challenges and opportunities for launching an effective and sustainable National Productivity Movement

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3. Raise stakeholder awareness of the critical role a National Productivity Organisation plays in achieving national strategic goals of development

4. Consolidate national consensus and commitment on the need to establish an NPO within the next three years and to have in place an interim institutional arrangement (see section--).

5. Prepare and agree on a National Plan of Action (PoA) for launching and implementing a National productivity Movement in Uganda.

6. Establish networks with international productivity partner institutions to secure technical support, benchmarking and capacity building.

7. Secure Cabinet approval of the proposed arrangements for the Productivity movement in Uganda.

8. Identify sources of funding, and champions for the productivity movement.

9. Launch the National Productivity Council and set up the National Productivity Unit within the National Planning Authority. A network of collaborating institutions shall be established to steer the process at different levels of national development.

10. Conduct preliminary awareness campaigns on productivity; targeting government, the private sector and civil society.

11. Integrate productivity as a crosscutting issue into the National Development Plan.

12. Formulate a government policy on productivity.

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List of References

1) Asian Productivity Organisation www.apo-tokyo.org2) Lugoloobi, Amos 2001, The Competitiveness of Indian

Businesses in Uganda 3) Mankad, P.G 1996, Definition and Meaning of Productivity; in

Proceedings of the 1996 Productivity Convention and Selected Papers

4) Ministry of Finance, Planning and Economic Development , Competitiveness and Investment Climate Strategy 2006-2010

5) Ministry of Tourism Trade and Industry, Uganda National Industrial Policy 2008

6) National Planning Authority 2007, Ten Year National Development Plan, Uganda (in draft)

7) National Productivity Council of India www.npcindia.org 8) National Productivity Institute -South Africa www.npi.co.za 9) Porter , Michael E. 1985, Competitive Advantage: Creating And

Sustaining Superior Performance 10) Productivity Performance In Developing Countries: Country

Case Kenya UNIDO 200511) Prokopenko, J; Arai, J; Tolentino, A 1999, Productivity

Promotion Organisations: Evolution and Experience.12) Uganda Bureau of Statistics 2005/6, Uganda National

Household Survey 13) Uganda Bureau of Statistics 2006, Uganda Demographic and

Health Survey. 14) UNDP, Human Development Report 2007/815) UNIDO 2005, Determinants Of Productivity: Cross-Country

Analysis And Country Case Studies16) UNIDO 2005, Productivity in Developing Countries. Trends

and Policies. 17) UNIDO 2005, Productivity Performance In Developing

Countries: Country Case Republic Of Korea 18) UNIDO 2005, Productivity Performance In Developing

Countries: Country Case South Africa 19) UNIDO 2005, Productivity Performance In Developing

Countries: Country Case Tanzania 20) UNIDO 2005, Productivity Performance In Developing

Countries: Country Case Uganda 21) UNIDO 2007, Productivity And Aggregate Growth: A Global

Picture 22) UNIDO2005, Productivity Performance In Developing

Countries: Country Case China 23) UNIDO2005, Productivity Performance In Development

Countries: Country Case India 24) World Bank & UMACIS 2004, Competing In the Global

Economy: An Investment Climate Assessment for Uganda. 25) Ministry of Gender, Labour and Social Development, Draft

National Employment Policy(Uganda)26) Ministry of Gender, Labour and Social Development, Uganda

Decent Work Country Programme 27) International Labour Organisation, 97th Session of the

International Labour Conference May-June 2008; Draft 80

Conclusions on Skills for Improved Productivity, Employment Growth and Development

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ANNEXES

28)

Mental Health Research Institute

Management Innovation Department

Employment system Research Centre

Academy of Management Development

Social& Labor Relations Department

The Secretariat of Japan Society for Human Resource Management

Japan Quality Award Promotion Department

Administration, Japan Quality Award Council

Management Consulting Department

Social & Information Systems Department

Foreign Affairs Department

International Relations Group

Technical Cooperation Group

Productivity Cruise Group

Promoting Information & Society Committee

Media & Publication Centre

Research & Development Department

Japan Research Centre for Technology and Innovation Management

Energy and Environment Department

The Information Centre for Energy & Environment Education

Energy communication Centre

Secretariat for Energy Forum

Political System Reforms Office

Administration Department

International Productivity Centre

President

Secretary General

Annex 1: Organizational Chart of Japan Productivity Centre for Social Economic Development

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Annex 2: NPC India- Organogram

14 Regional Offices

207 Full Time Professional Consultants

Group Heads & Directors

- Human Resource Management - Technology Management & Environment- Process Management- Information Technology,   Knowledge

Management,    Secretariat & Legal Services

- Energy Management- Employee Development, Agri-

Business   & International Services - (Support Services) & (Economic

Services)

Annex 3: Profile of Potential Strategic Partners

1. Government Ministries/Departments/Agencies (MDAs)

1.1. Ministry of Finance, Planning and Economic Development, Planning and Economic Development

The Ministry of Finance, Planning and Economic Development, Planning and Economic Development (MFPED) has a mission to formulate sound economic policies, maximise revenue mobilization, ensure efficient allocation and accountability for public resources so as to achieve the most rapid and sustainable economic growth and development. Its mandate is as follows:

- Formulate policies that enhance stability and accelerate economic growth and development

- Plan and design strategies for rapid economic growth and transformation

- Mobilize domestic and external resources - Ensure efficient allocation and utilisation of public funds - Monitor and account for the utilisation of public resources

1.2. National Planning AuthorityThe National Planning Authority (NPA) is a statutory institution created by an Act of Parliament with a mission to produce comprehensive and integrated plans for the country elaborated in terms of Perspective Vision, long term and medium term development plans. This is expected to be carried out through a participatory approach, with decision-making being shared by all stakeholders. The mandate for which NPA was created is to put in place, operationalise, oversee, manage, supervise, monitor, evaluate, and coordinate the national framework, systems and strategies for cost-effective and participatory national development planning in Uganda. In pursuance of this mandate, NPA is entrusted with the following functions and responsibilities:

- Monitor and evaluate the effectiveness and impact of development programmes and the performance of the economy of Uganda;

- Advise the President on policies and strategies for the development of Uganda;

- Support local capacity development for national planning and, in particular, provide support and guidance to the national and local bodies responsible for the decentralized planning process;

- Study and publish independent assessments of key economic and social policy issues and options so as to increase public understanding and participation in the economic and social policy debate;

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- Liaise with the private sector and civil society in the evaluation of Government performance, identifying and filling gaps in Government policies and programmes;

- Review high priority development issues and needs and make recommendations;

- Ensure that all national plans are gender and disability sensitive;

- Design and implement programmes to develop planning capacity in Local Governments.

- Study and analyze strategic economic and structural reform policies;

- Make proposals for innovative programmes and policies, taking into consideration the resource potential and comparative advantage of Uganda and its different districts, and the need for effective poverty eradication measures;

- Monitor the performance of the decentralized system of development planning and finance and propose such institutional innovations as may be required for its improved operations;

- Conduct in-depth evaluation of the impact and cost of selected development programmes; and

- Perform such other functions relating to development planning as the President may direct.

1.3. Ministry of Gender, Labour and Social Development

The mandate of the Ministry of Gender, Labour and Social Development (MGL&SD) is to empower communities to harness their potential through cultural growth, skills development and labour productivity for sustainable and gender-responsive development. The roles of the MGLSD include the following:

- To mobilize individuals and communities for poverty eradication;

- To advocate for rights and social protection of the vulnerable groups;

- To foster creation of safe and harmonious working environment for enhancement of productivity;

- To generate labour market information; - To improve service delivery through community mobilisation

and empowerment; - To provide relevant and timely information to guide planning

and policy development; - To support cultural and traditional institutions to fight poverty.

1.4. Ministry of Tourism, Trade and Industry The mandate of the Ministry of Tourism, Trade and Industry (MTTI) is to formulate and support strategies, plans and programs that promote and ensure expansion and diversification of tourism, trade, cooperatives, environmentally sustainable industrialization,

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appropriate technology, conservation and preservation of other tradable national products, to generate wealth for poverty eradication and benefit the country socially and economically.

The key functions of the Ministry are: - - To formulate and review, where necessary appropriate policies,

legislation, regulations and standards for sustainable development of tourism, trade, industrialization and technology, co-operative movement and other tradable national products for increased wealth and benefit to the country.

- To initiate, co-ordinate, support, oversee and where applicable, facilitate implementation of strategies and programmes aimed at enhancing the development and promotion of tourism, trade, the co-operatives, industry and technology, conservation and preservation of other tradable national products and ensure their maximum benefit to the country.

- To inspect, monitor and evaluate the progress, standards, state and efficiency of the various sectors, under its mandate for quality assurance, policy direction and guidance.

- To conduct studies and evaluate the impact of the Sectoral, fiscal and other policies on the advancement of the diversified sector and their effect on the poverty eradication program so as to advise authorities appropriately.

- To promote and co-ordinate research activities and initiatives of the sector with a view to ensure that results are utilised and are beneficial to the country and all stakeholders.

- To assess the need and where necessary, mobilise resources to support balanced industrial, co-operatives, tourism, and entrepreneurial development for eradication of poverty in the country.

- To collect, process, analyse, and disseminate national and international data/information on the sectors and (provide an input for) rational decision-making.

- To participate in negotiations and implementations of arrangements relating to international and national treaties of the diversified sector.

1.5. The Uganda Industrial Research Institute

The Uganda Industrial Research Institute (UIRI) is a parastatal institution established in 2004 under the auspices of the Ministry of Tourism Trade and Industry (MTTI). The objective was that of undertaking applied industrial research and developing and acquiring appropriate technology that will enhance adding value to local products so that they are processed for national, regional and International markets, in order to create a strong, effective and competitive sustainable industrial sector for the rapid industrialization of Uganda.

The specific Objectives include the following:

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- Reduce the failure rate of start-up enterprises - Develop profitable enterprises that can create higher incomes

to the entrepreneurs and the opportunities for offering employment

- Support government efforts in implementing strategies for poverty reduction

- Enhance collaboration between research institutions, academia, and private sector (SMEs)

- Assist the government in refining policies, particularly in relation to SME development

- Establish the requisite networks between enterprises and other supporting agencies Uganda

To achieve the above objectives, UIRI is involved in a number of programmes including the following:

- Financial management training - Incubation and Business Development: Business information - Incubation and Business Development: Incubation program for

non-resident clients (virtual incubation) - Incubation and Business Development: Incubation program for

resident clients - Incubation and Business Development: Training in business

management Information and Communication Technologies - Food processing (Meat technology, Dairy, Fruits & Vegetables

and Bakery) - Engineering - Ceramics - Research and Development

From its profile, it is clear that URI is mandated to carry out certain activities which directly and positively impact on productivity improvement in the industrial and other sectors. It carries out research and development in several sectors including agro-processing, ceramics, manufacturing and provision of incubation services. Ultimately these activities lead to improved quality of goods, effective business management skills, strengthened innovative skills and a general increase in productivity. Therefore in the productivity movement, UIRI would be a strategic partner given the skills already in existence within the organisation.

1.6 The National Agricultural Research Organisation

The National Agricultural Research Organisation (NARO) is the apex body for guidance and coordination of all agricultural research activities in the national agricultural research system in Uganda. NARO is a Public Institution established by an act of Parliament. It was established by government with a mission of generating, adopting and disseminating appropriate and demand-driven technologies, knowledge and information through an effective,

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efficient, sustainable, decentralized and well co-coordinated agricultural research system. The main goal is to enhance the contribution of agricultural research to sustainable agricultural productivity, economic growth, food security and poverty eradication through generation and dissemination of appropriate technologies, knowledge and information.

The National Agricultural Research Organisation comprises of a Council as its governing body, committees of the council as its specialized organs, a secretariat for its day-to-day operations, with fifteen (15) semi-autonomous public agricultural research institutes under policy guidance of the secretariat. The NARO secretariat headed by a Director General has the responsibility for the day-to-day operation of the organisation.

The functions of the National Agricultural Research Organisation are as follows:

- Provide strategic direction for publicly funded agricultural research in Uganda and act as a forum for agricultural researchers in Uganda;

- Coordinate and oversee, in collaboration with the Uganda National Council for Science and Technology and other lead agencies, the development, consolidation and implementation of agricultural research policy and national research strategies, plans and budgets relating to publicly funded agricultural research;

- Set national priorities and harmonize agricultural research activities of the national agricultural research system, constituent institutions and public agricultural research institutes, civil society organisation, private sectors and farmer organizations and promote delivery of quality and efficient agricultural research services;

- Advise and coordinate formulation of policy and legislative proposals, research standards, codes of ethics, conduct and practice; and guidelines for delivery of agricultural research services;

- Provide guidelines, guidance and ensure delivery of quality agricultural research by agricultural research service providers;

- In collaboration with other relevant agencies, provide policy guidance to local governments on matters relating to agricultural research;

- Carry out monitoring and evaluation of national agricultural research programmes, projects and activities to ensure adherence to the set work plans, standards and regulations;

- Mobilize funds for agricultural research and manage the agricultural research trust fund including raising funds for research of national strategic interest;

- Coordinate and promote cooperation and collaboration between Uganda and other countries, institutions, scientific or professional societies and other agricultural research service

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providers, with regard to agricultural research, development and technology transfer in the agricultural sector so as to optimally utilise agricultural resources and improve production capacity of such resources;

- Provide leadership and advocacy for the promotion, protection and development of agricultural research in Uganda;

- Make grants or provide funds to any institution or person for the advancement of agricultural research and development on both competitive and non-competitive basis; and

- Perform such other functions as are conferred on the organisation by this Act or any other law for the purpose of promoting agricultural research and development.

- Productivity improvement in the agricultural sector is a critical factor in Uganda’s efforts towards achieving economic prosperity for its people and raising the quality and competitiveness of Uganda’s agricultural exports. NARO therefore, has a high potential role to play in the productivity movement given that it already has responsibility for coordinating the activities of other agricultural research organisations (up to the local government level) and providing them with guidelines for their operations in addition to monitoring and evaluating their activities.

1.7 Plan for Modernization of Agriculture Secretariat

The Plan for Modernization of Agriculture (PMA) is a holistic, strategic framework for eradicating poverty through multi-sectional interventions enabling the people to improve their livelihoods in a sustainable manner. It is an outcome-focused set of principles upon which sectoral and inter-sectoral policies and investment plans can be developed at both the central and local Government levels. The PMA is part of the Government’s broader strategy of poverty eradication contained in the poverty Eradication Action Plan (PEAP).

The PMA is a poverty focused framework of principles whose main objectives are to:

- increase incomes and improve the quality of life of poor subsistence farmers through increased productivity and increased share of marketed production;

- improve household food security through the market rather than emphasizing self sufficiency;

- provide gainful employment through the secondary benefits of PMA implementation such as agro-processing factories and services;

- promote sustainable use and management of natural resources by developing a land use and management policy and promotion of environmentally friendly technologies.

The broad strategies for achieving the PMA objectives are:

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- Making poverty eradication the overriding objective of agricultural development;

- Deepening decentralization to lower levels of Local Governments for efficient service delivery;

- Removing direct involvement of government in commercial aspects of agriculture and promoting the role of the private sector;

- Supporting the dissemination and adoption of productive enhancing technologies.

- Guaranteeing food security through the market and improved incomes, thereby allowing households to specialize, rather than through household self sufficiency;

- Ensuring that all intervention programmes are gender focused and gender responsive;

- Promoting a two-way planning and budgeting process by empowering local governments and enabling them to influence public policy and allocate resources to alleviate location specific constraints in a non-sector manner;

- Ensuring coordination of the multi-sector interventions to remove any constraints to agricultural modernization.

The main target beneficiaries of the PMA interventions are the subsistence farmers who constitute the majority of the poor in rural areas. The productivity improvement movement requires the involvement of all Ugandans at all levels, including the small subsistence farmers who need technical advise to enable them graduate from small low yield agriculture to commercially viable practices. PMA’s strategic role therefore would be that of ensuring that the incomes of the poor are raised through productivity advocacy programmes which would lead to a better appreciation of the need for applying productivity improvement techniques amongst farmers at all levels.

1.8 The National Agricultural Advisory Services Secretariat

The National Agricultural Advisory Services (NAADS) is a 25-year Government program put in place to increase the efficiency and effectiveness of agricultural extension services. It is a semi-autonomous body formed under NAADS Act of June 2001 with a mandate to develop a demand driven, farmer-led agricultural service delivery system targeting the poor subsistence farmers, with emphasis on women, youth and people with disabilities. Its development goal is to enhance rural livelihoods by increasing agricultural productivity and profitability in a sustainable manner.

NAADS is one of the seven components under the Plan for Modernization of Agriculture (PMA), the planning framework of the government for the transformation of subsistence agriculture to market oriented for commercial production. The NAADS programme aims at redressing past shortcomings in the provision of agricultural

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extension services through far reaching reforms and innovative approaches in service delivery. NAADS overall supervision is vested in the Ministry of Agriculture Animal Industry and Fisheries (MAAIF). The programme was officially launched in March 2002.

The Strategic Objectives of the NAADS programme include the following:

- To promote market oriented/commercial farming (farming as a business)

- To empower subsistence farmers to access private extension services, technologies and market information

- To create options for financing and the delivery of appropriate advisory and technical services for different types of farmers

- To shift from public to private delivery of advisory services in the first five years of implementation

- To develop private sector capacity and professional capability to supply agricultural advisory services

- To stimulate private sector funding for agricultural advisory services

The principle beneficiaries of NAADS programme are the poor farmers and in particular women, youth and people with disabilities. NAADS is expected to generate several types of benefits accruing to the beneficiaries. These are:

- An Agricultural Advisory Service that is more efficient and popular than the previous one.

- An Agricultural Advisory Service that is more relevant and readily helping farmers to raise their incomes in a sustainable way through self-help.

- Growth in agricultural sector as productivity increases opportunities for employment in rural areas as private service

- Greater and more reliable food production - Greater ownership over local programme implementation for

greater economic growth in rural areas

The NAADS Programme is expected to deliver the following outputs: - More farmers, especially the poor and women farmers have

increased access to and using appropriate information, knowledge and technologies.

- The quality of advice provided by the service providers meets set national standards.

- The capacity of private sector service providers enhanced to meet farmers’ needs.

- Appropriate and sustainable farmer controlled institutions are in place and are getting advisory services.

1.9 The Economic Policy Research Centre

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The Economic Policy Research Centre (EPRC) was set up in 1993 by the Government of Uganda with funding from the African Capacity Building Foundation (ACBF) which has continued to support the Center up to now. EPRC is an autonomous non profit Organisation with a mission to contribute to sustainable growth and development of Uganda through the advancement of research-based knowledge and policy analysis. In pursuit of its mission the Centre undertakes applied economics research and operates programs for capacity development in policy analysis.

The Economic Policy Research Centre was set up with the following objectives:

- Conduct policy relevant high quality applied economics research and carry out rigorous policy analysis;

- Filter and produce research outputs in a user-friendly form for dissemination to a broad spectrum of stakeholders;

- Provide intellectual backstopping to other institutions that undertake economic policy analysis and policymaking;

- Provide a forum for policy information filtering, amplification and dissemination;(v) Enhance capacity for research and policy analysis through professional training and other development programs;

- Maintain an expanded national and international institutional linkages; and(vii) Ensure intellectual sustainability of core in-country capacity for economic policy research.

1.10 Management Training and Advisory Centre

The Management Training and Advisory Centre (MTAC) is a body corporate. It started initially as a joint project between the Government of Uganda and ILO/UNDP in 1965 and was later established by an Act of Parliament in 1969 under the Ministry responsible for Industry. MTAC offers various courses in management development and conducts management consultancy assignments. It has a mission to improve management performance of organisations and promote entrepreneurship for sustainable development.

MTAC was set up with the following objectives:

- To assist Government departments, public and private institutions with advisory and training services

- To assist industry and other economic sectors in introducing or improving management practices, techniques and methods, with a view to raising their productivity;

- To assist existing and new enterprises in studying designs of new products, models and devices;

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- To prepare citizens of Uganda for managerial, functional and supervisory posts in existing and new industries and business enterprises;

- To help citizens of Uganda to become entrepreneurs, by providing them with advisory services and instruction in modern management practices

- To organise and conduct training courses for various categories of clients;

- To aid the promotion of any citizen of Uganda in trade or business;

- To enter into agreement with any citizen of Uganda for the establishment, promotion or financing of any business or undertaking;

- To collect, collate and disseminate specific technical information regarding equipment, machinery, tools, methods, practices and techniques of interest to entrepreneurs;

- To found scholarships, make research grants or otherwise give financial or other assistance to citizens of Uganda engaged in study or research into any matter relating to productivity of industry;

- To hold classes, demonstrations, lectures or any other form of instructional or promotional activity and charge any fees for the same; To publish periodicals, booklets or any written material and distribute the same by sale or by loan, hire or otherwise with or without charge.

- Management Training & Development

1.11 Uganda Management Institute (UMI)

Uganda Management Institute (UMI) is the national centre for training, research and consultancy in the field of management and administration. It was established in 1968 as the Uganda Institute of Public Administration which was later renamed Uganda Management Institute when it was brought under the Universities and Other Tertiary Institutions Act 2001. The Institute is governed by a Council with a Chancellor as the titular head of the Institution. The Director General is the Chief Executive of the Institute, deputized by two Directors.

The mandate of UMI is to promote sustainable development through:- Imparting professional skills and knowledge. - Providing management training, consultancy and research

services. - Conducting examinations and granting certificates, diplomas,

degrees and other awards, and - Providing documentation and information services on

administrative, management, scientific and technical matters.

1.12 Uganda Export Promotion Board

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Uganda Export Promotion Board (UEPB) is a public trade promotion organization which operates under the Ministry of Tourism, Trade and Industry. It was established by an act of Parliamentary. UEB was set up with a mission of facilitating the development, diversification, promotion and co-ordination of all export related activities that lead to export growth on a sustainable basis. UEPB has a 12-member Board of Directors half of whom, including the Chairman, are from the private sector. The Secretariat of the Boar

UEPB has the following functions:- Policy Initiation and Advocacy- Market Research and Development- Trade Information Generation and Dissemination System- Export Skills Development- Trade Promotion Services

1.13 The Uganda National Council for Higher Education

The National Council for Higher Education (NCHE) was set up by the Government of Uganda to regulate higher education, and to guide the country in the establishment of institutions of higher learning as well as ensure that quality and relevant education is delivered. It is a statutory agency, a watchdog for quality and relevant higher education established under The Universities and Other Tertiary Institutions Act, 2001 to carry out the following:

- Regulate and guide the establishment and management of institutions of higher learning, and;

- Regulate the quality of higher education, equating of higher education qualifications and to advise government on higher education issues.

The Council has a mission to set standards and regulations to ensure that all public and private tertiary education institutions in Uganda will create, sustain and improve the relevance and quality of higher education for all qualified Ugandans and to meet the local, national and global higher education challenges of the twenty first century.

The functions of the NCHE are to advise the Minister of Education on higher education issues, to establish an accreditation system (and do the accrediting), to investigate higher education complaints, to evaluate national manpower requirements, to set national admission standards, to ensure that institutions of higher learning have adequate physical structures (and education facilities), to publish information on higher education, to determine equivalences of academic and professional awards and credits between institutions as well as tertiary education policy formation.

1.14 The Uganda National Council of Science and Technology

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The Uganda National Council of Science and Technology (UNCST) was established in 1990 by an Act of Parliament as a semi-autonomous government agency to advise, develop, and implement policies and strategies for integrating Science, Technology and Research development in Uganda. The activities of the UNCST fall under the jurisdiction of the Ministry of Finance, Planning and Economic Development.

The mandate of the UNCST is to develop and implement policies and strategies for integrating Science and Technology (S&T) into the national development policies; advise the Government on policy matters for promoting S&T; coordinating and guiding national research and development in Uganda. The mission for which the UNCST was established is to provide effective and innovative leadership in the development, promotion and application of science and technology and its integration in sustainable national development.

1.15 The Uganda National Bureau of Standards

The roles of the Uganda National Bureau of Standards (UNBS) include the following:

- Formulation and promotion of the use of standards; - Enforcing standards in protection of the public health and

safetyand the environment against dangerous, counterfeit and substandard products;

- Ensuring fairness in trade and precision in industry throughreliable measurement systems ;

- Strengthening Uganda’s economy by enhancing competitiveness of local industries and promotion of quality exports through standardization, quality assurance, testing and metrology.

In pursuit of its mandate, UNBS carries out the activities below:- Standards development; - Assisting industrialists/manufacturers and producers to improve

on the quality of their products and services; - Providing efficient information services on all matters related

to standards, quality assurance, metrology and testing ; - Market surveillance to rid the market of dangerous, counterfeit

and substandard products; - Verifying accuracy of weighing and measuring instruments used

by traders and consumers in commercial transactions and calibrating measuringand testing equipment used in industry;

- Carrying out shipment inspection and conformity assessment forexports, imports and tender supplies;

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- Assisting the private sector, procurement agents, governmentand the general public in conformity assessment of goods by testing , measuringand inspection against standards and or specifications;

- Carrying out factory inspection to evaluate conformance withstandards; and

- Liaison with national, regional and international standardization and related bodies.

The UNBS offers a number of services to its clients and they include the following:

- Standards Development- Product Testing- Product Certification- Quality Management Systems Certification- Import Inspection & Clearance Schemes- Fuel Inspection- Operation "Q"- Documentation and Information Services- Metrology- Annual International Standards Conference (AISC) 2008,

Training, Consultancy, and Research

1.16 Enterprise Uganda

Enterprise Uganda is an institution designed to support the government in realizing its objective of promoting the development of SMEs to become the main vehicle for expanding production, providing sustainable jobs and enhancing economic growth. It was established under a framework of the UNDP Enterprise Africa regional initiative. A consortium of local and international donors including UNDP Uganda, Enterprise Africa, UNCTAD, Norway, Sweden and the Government of Uganda is promoting it. Its concept is based on UNCTAD's Empretec Programme Model currently operating in 32 countries in Africa, Eastern Europe and Latin America. The Empretec model is designed as one-stop programme, which provides an integrated and comprehensive range of business support services for SMEs using a hands-on approach.

Enterprise Uganda is a one-stop enterprise development centre with a mission to develop a new generation of dynamic Ugandan entrepreneurs by actively providing support to small and medium scale enterprises (SMEs) to improve their productivity, growth and competitiveness. Enterprise Uganda aims at promoting private sector development and contributing indirectly to poverty reduction through the creation of new business ventures as well as building the competitiveness of existing Small enterprises (SMEs).

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In executing its mandate, Enterprise Uganda works in collaboration with the following partners:

- Business people (entrepreneurs) whose businesses are not  getting the desired business results because of internal challenges that they may not know how to handle them;

- Enterprises that have reached the stage of fast business expansion but are not able to cope with the challenges of growth;

- Enterprises that may have benefited from specific grants or credit facilities and are seeking assistance to make effective use of such facilities;

- Promoters of start-up enterprises  who have developed great bankable business proposals but are frustrated in getting them implemented; and

- Professionals  considering starting their own enterprises

Enterprise Uganda carries out the following specific activities:- Helping entrepreneurs to succeed in business through

creating an enabling environment for business creation, survival and growth (i.e. policy and regulatory issues, infrastructure, financial and business development services).

- Providing an integrated and comprehensive range of business development services (BDS) such as entrepreneurship training, business advisory and counseling service, information, business planning, marketing, technology, business linkages and other services to assist both start ups and existing businesses to resolve their problems and prepare plans for growth using a hands-on approach.

- Proved business mentoring and on-site business counseling to owners/managers of enterprises to assist them in identifying the root causes of the specific challenges that the business may be experiencing and offer informed advice to resolve identified challenges.

1.17 Ministry of Education and Sports

 The Ministry of Education and Sports has a Mission to provide for, support, guide, coordinate, regulate and promote quality education and sports to all persons in Uganda for national integration, individual and national development.

Its Strategic Objectives include the following:

1.      To ensure universal and equitable access to quality basic education for all children through: (i)           Early Childhood Care and Development for children up to 8 years. (ii)         Universal Primary Education for children from 6 years to 12 years 

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(iii)       Education for the disadvantaged groups from 6 years to 18 years 2.      To improve the Quality of Education in the following levels:- (i)           In Primary Education by ensuring pass rates in literacy and numeracy (at the appropriate class grade) levels through the National Assessment of Progress of Education (NAPE). (ii)         In Post-primary Education by ensuring achievements attainment targets and pass rates in English, Mathematics, Science and Information Technology. 3.         To ensure equal access by Gender, District and Special Needs at all levels of Education. 4.         To build capacity of districts by helping Education Managers acquire and improve on their knowledge, skills and attitudes to be able to plan, monitor, account and perform managerial functions.         

2.0 Private Sector Institutions

2.1 Uganda National Chamber of Commerce and Industry

The Uganda National Chamber of Commerce and Industry (UNCCI)has the following roles:

- Advocating for a favourable business environment for the members through effective representation of the business community on several Government committees where the views of the private sector need to be considered in the national planning process of the country.

- Protecting the businesses of members from exploitation and unfair business practices by upholding and implementing a code of Conduct and working closely with the Government agencies that set, monitor and enforce quality and standards compliance of the products that originate from within and outside the country

- Fostering unity, encouraging the business community to speak with one voice and promoting the welfare of members.

- Lobbying for favourable policies and initiatives, within and outside the country, that foster economic development and greater involvement of the private sector in national, regional and international affairs.

- Organising inward and outward exhibitions and trade missions that help to expose Uganda's products and export-led companies to the market requirements of foreign markets and further gauge the country's readiness to enter certain markets.

- Helping members and the business community to acquire relevant and up-to-date business information and business opportunities that boost and diversify their production capabilities. - Encouraging the establishment of training programmes and

courses in the fields of management, organisation, production, accounting and other skills in various sectors such as trade, tourism, agriculture, industry and services.

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- Arbitrating in the settlement of business disputes among its members arising out of business transactions carried out within and outside the country.

- Working very closely with other private sector organisations in the country and outside as a means of supporting private businesses to combat poverty and promote sustainable development.

2.2 Uganda National Farmers Federation

Uganda National Farmers Federation (UNFFE) is one of the largest farmer organisations in Uganda and was founded in 1992. UNFFE educates farmers, commissions research, mobilizes and organizes different farmer organizations with the sole aim of bringing Ugandan farmers together under one umbrella federation with a common cause.

(UNFFE) has the following objectives:- To lobby and advocate for farmer friendly agricultural policies - To unite farmers' organisations and agro-based

industries/service organisations under one umbrella organisation as a common front for the promotion, co-ordination and safeguarding of their activities and interests

- To improve farmers incomes and welfare through increasing the quality and quantity of there produce on a sustained basis

UNFFE has a Farmers Council consisting of the National Executive Committee (NEC) and the delegates from all member organisations (currently standing at 72 affiliated organisations).  It legislates the policy issues and it is the supreme decision-making body of the Federation. It elects the NEC after every four years. The National Executive Committee (NEC) is the supreme leadership organ elected from the Farmers’ Council and sub-committees and is formed to handle specific matters. 

2.3 The Uganda Manufactures Association

The Uganda Manufactures Association (UMA) was established in the 1960s, at a time when Uganda was having a young but robust industrial sector. However, the political social and economic turmoil of the 1970s interrupted the smooth growth of the Association. UMA, which was dormant throughout this period, was revived in April 1988. Today, the Association is one of the largest organizations representing the broad industrial and commercial sectors of Uganda’s economy and an important forum for the private sector in the country. UMA has a membership comprising of close to 750 small, medium and large enterprises drawn from both the private and public sector.

The objectives of UMA are as follows:

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- To promote, protect and coordinate the interests of industrialists in Uganda.

- To act as a watchdog and an effective mouth piece for it's members.

- To initiate discussions and exchange of information amongst members on industrial issues.

- To advise Government on key policies affecting industry.The major specific activities carried out by UMA include the

following:- Policy Advocacy- The Association's main role is to advocate for policy reforms and

change on behalf of members.. - Trade Fairs and Exhibitions- Training Programs- Internet Information Point & UMA Website- ISO Quality & Standards Scheme

2.4 Federation of Uganda Employers

The Federation of Uganda Employers (FUE) is a membership organisation made up of Ugandan entrepreneurs with a Secretariat and an Executive Director. The Secretariat is responsible for providing information and advice to its members, keep a tab on labour issues and amendments to legislations affecting employment, provide reports and facts and legal positions incase an industrial dispute arose, research on and analyse comparative terms and conditions of employment and to maintain networks of similar organisations elsewhere.

Through 42 years of dedicated services to member Organizations the following areas of management have emerged as FUE's areas of competence:

- Industrial Relations- Enterprise Performance- Human Resource Management- Networks

Consultancy Competence Training Areas- Consultancy Services

2.5 The Private Sector Foundation

The Private Sector Foundation (PSFU) was founded in 1995 to serve as Uganda’s apex body for the private sector with a mission of strengthening private sector capacity for effective policy advocacy and market competitiveness. It is made up of 105 business associations, corporate bodies and the major public sector agencies that support private sector growth. It serves as a focal point for

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private sector advocacy as well as capacity building and sustains a positive dialogue with Government on behalf of the private sector.

Right from its inception PSFU has been Government’s implementation partner for several projects and programmes aimed at strengthening the private sector as an engine of economic growth. Such programmes include; the implementation of the Business Uganda Development Scheme (BUDS), the BUDS-Energy for Rural Transformation (ERT) programme and advising government on positive policy reforms. PSFU also manages a $71 million World Bank funded project (the PSCP II) on behalf of government to support improvement of competitiveness within the Uganda private sector.

The PSFU is mandated to do the following:- Carry out policy research and advocacy on behalf of the

private sector- Provide a forum for the discussion of policy issues, and the

impact of those policies on the private sector in Uganda- Maintain a dialogue with Government on behalf of the

private sector- Undertake capacity building for the private sector through

training and the provision of business development services

In fulfilling its mandate, PSFU carries out the following activities:- Policy Advocacy - Trade Development - Projects Managed by PSFU- Private Sector Competitiveness Project (PSCPII)- Components of PSCP 11 - Business Uganda Development Scheme (BUDS)- Technology Acquisition Fund (TAF) for exporting firms- Better Business Behaviour Award Scheme (BBBA) to

encourage good business behaviour and financial management

- Business Plan Competition (BPC) for entrepreneurship and innovation Business Branding

- Business Uganda Development Scheme/Uganda Energy for Rural Transformation (BUDS/ERT)

2.6 The National Organisation of Trade Union (NOTU)

The National Organisation of Trade Union (NOTU) was established by Decree No. 29 of 1973 as the only Principal organisation of employees (workers) in Uganda to which all registered trade unions must affiliate. NOTU is the National Centre coordinating the Uganda labour movement and the activities of all registered trade unions affiliated to it.

The aims and objectives of NOTU include the following:

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- To promote and safeguard the interest of all registered trade unions affiliated to it and workers throughout Uganda.

- To assist such Unions to find practical solutions to problems in their organisation and administration.

- To settle disputes concerning representation and demarcation matters.

- To determine the jurisdiction boundaries of Unions in line with the established policies and practices.

- To encourage the development of strong, unified and viable Unions in Uganda and to discourage the development of rival unions.

- To give legal advice and legal assistance to its affiliates. Generally to promote the welfare of workers of Uganda.

- To promote social and economic benefits to its members.- To assist all its affiliates in establishing and maintaining

sound industrial relations. - To operate and promote, aid and encourage the

establishment of cooperatives and other economic institutions owned wholly or partly by workers, affiliated Unions or NOTU on their behalf.

- To assist and improve workers' knowledge and skills by organising courses and seminars, in collaboration with other interested bodies as shall be deemed necessary for the promotion of workers' interests.

- To secure adequate presentation on government and industrial bodies dealing with the labour legislation or any other matters affecting labour.

The functions of the National Organisation of Trade Unions include the following:

- To formulate policy relating to the proper management of trade Unions and the general welfare of employees.

- To coordinate and supervise the activities of trade unions in order to ensure that under takings entered into by individual unions or by NOTU on behalf of it's affiliated unions are duly honoured.

- To plan for and, in collaboration with other interested bodies or persons, administer worker's education programmes.

- To serve as link between the registered trade unions on the one hand, and government and other international organisations on the other, regarding all matters of mutual interest.

- To serve generally as consultant on all matters relating to trade unions affairs.

2.7 The National Ngo Forum

The Uganda National NGO Forum is an independent, collective voice for civil society. It was established in 1997 to bring together NGOs working in areas of Advocacy and Lobbying to effectively engage on

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public policies, so that they reflect the views and concerns of the poor. Headed by an Executive Director, the NGO Forum is a membership Organisation that includes Community-Based Citizens’ Organisations, District Forums, National, Regional and International NGOs, and Networks.

Objectives

The overall objective of the NGO Forum is: “To support Civil Society Organisations to contribute to the development and implementation of public policies and plans so that they progressively reflect the views and concerns of the poor, meet their needs and fulfill their human rights. It does this through advocacy, networking, partnership development and information exchange. The Specific objectives of the NGO Forum are:

To act as a Forum drawing together non-governmental organisations (NGOs) registered and operating in Uganda and other groups working in Uganda, to discuss and adopt common strategies and to act collectively on matters of mutual concern to member NGOs.

To maintain dialogue with the government and other national and international NGOs and bodies on behalf of all member NGOs operating in Uganda.

To undertake advocacy and lobbying of government and other bilateral and multilateral bodies on issues of common concern to member NGOs

To promote dialogue, networking, and information exchange among the member NGOs on matters of mutual concern to members

To establish and maintain a database of member NGOs in order to promote better information exchange among member NGOs and other interested parties

To establish and maintain links with umbrella NGOs, operating at national or at district level in Uganda and also with district NGO for a, in order to realise any of the objectives stated above

To lobby government for legal and/or policy reforms that are geared towards creating a better environment for NGOs to operate effectively and efficiently in Uganda.

To develop strategies for representation of NGOs on government bodies and bilateral and multilateral organisations to ensure full participation of member NGOs on issues of mutual concern to them.

To develop a National Plan of Action and programmes to carry out the objectives stated above, in accordance with this constitution.

To identify critical economic, social and other areas of concern to civil society organisations in Uganda and to undertake research with a view to identifying appropriate development approaches and strategies to address them.

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To undertake activities to build the capacity of National NGO Forum and of its members to enable them to effectively pursue the objectives of the National NGO Forum.

To undertake monitoring and evaluation of policies, programmes and practices of government, bilateral and multilateral bodies, other development partners, the private sector and civil society in Uganda, in order to assess their impact on the Forum’s target population.

To undertake nay other activities that are necessary for the effective realization of the vision, mission and objectives of the National NGO Forum stated above.

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Annex 4: LIST OF RESPONDENTS

1) Central Organization of Free Trade Unions2) City Cargo (U) Ltd3) Economic Policy Research Centre 4) Enterprise Uganda 5) Federation of Uganda Employers 6) Kyambogo University7) Makerere University8) Makerere University Business School9) Ministry of Education and Sports10) Ministry of Finance Planning and Economic Development11) Ministry Of Information And Communication Technology12) Ministry of Public Services13) Ministry of Tourism, Trade and Industry14) MTAC Management Training and Advisory Centre15) National Organization of Trade Unions16) NGO Forum17) Phenix Logistics (U) Ltd18) Plan for Modernization of Agriculture19) Roofings Ltd20) Sugar Corporation of Uganda Ltd21) Uganda Batteries Ltd22) Uganda Coffee Development Authority 23) Uganda Flowers Exporter Association 24) Uganda Insurers Association 25) Uganda Investment Authority 26) Uganda Management Institute 27) Uganda Manufacturers Association 28) Uganda National Bureau Of Standards29) Uganda National Chamber of Commerce and Industry30) Uganda National Farmers Federation 31) Uganda Small Scale Industries Association32) Uganda Tea Association 33) Uganda Telecomm Ltd34) Uganda Tourist Board35) UGMA Engineering Corporation

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LIST OF PEOPLE CONTACTED

SR. No.

Name Institution

Ms. Rose Nassanga NOTUDr. Williams Ddembe Makerere UniversityHon. Dr. Sam Lyomoki COFTUMr. Tom Buringuriza UIAMr. Tusiime S Kitabire City CargoMs. Ann Musoke Uganda Batteries Ms. Ann Begumisa MUBSMr. Vincent Kaija Uganda Insurers

AssociationMs. Irene Namuli Kyambogo UniversityMr. Stuart Mwesigwa Roofings LimitedMs. Rosemary Mugeni Ministry of EducationMr. Joshua Mutambi MTTIMr. John Paul Waigo Uganda Tourist BoardMs. Maureen Kasande Ministry of FinanceMr. Arinaitwe Rwakajara

UNFFE

Ms. Juliet Musoke UFEADr. Godfrey Bahigwa PMAMr. Rajaab Ssenkuba FUEMr. Muhamed Matovu UNCCIMr. Andrew Luzze UMAMr. Sudeep Mohanty SCOULDr. Jimmy Samanya Ministry of ICTDr. John Kiyaga Nsubuga

UMI

Mr. GW Sekitoleko Uganda Tea AssociationMr. I.G. Munabi Uganda Tea AssociationMr. J.S. Verma UGMA Engineering

Corporation Ms. Sara Kiyingi Kawesa

UTL

Mr. Charles Ocici Enterprise UgandaMr. Deus Mubangizi UNBSDr. Peter Ngategize CICSMr. Edward Mulumba MTACMr. James Kawooya USSIAMr. Peter Kaguliro Phenix LogisticsMr. J.J. Nanseera Ministry of Public ServiceDr. Charles Kwesiga UIRIMr. Samuel Ssenkungu

MTTI

Mr. Saul Kaye NPAMr. Amos Lugoloobi NPAMr. Francis Mazinga NPA

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Ms. Agnes Anakbongo NAADSMr. Warren Nyamugasira

NGO Forum

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Annex 5: Respondents by Choice of Functions to Collaborate with the NPC

Roofings LtdPublic awareness campaigns and advocacy Productivity capacity building Catalyst for productivity culture Information gathering, processing and disseminationNetworking with local and international organisations on productivity Attitude change Promotion of good corporate governance practices and skills

Ministry of Education and SportsProductivity capacity building Consultancy services Catalyst for productivity culture Information gathering, processing and disseminationAttitude change Promotion of good corporate governance practices and skills

Uganda Tourist BoardNetworking with local and international organisations on productivity Attitude change Promotion of good corporate governance practices and skills

Ministry of Finance Planning and Economic DevelopmentConsultancy services Information gathering, processing and disseminationNetworking with local and international organisations on productivity

Uganda National Farmers Federation Public awareness campaigns and advocacy Productivity capacity building Consultancy services Catalyst for productivity culture Information gathering, processing and disseminationNetworking with local and international organisations on productivity Attitude change

Uganda Flower Exporter Association Catalyst for productivity culture Information gathering, processing and disseminationNetworking with local and international organisations on productivity

Federation Of Uganda Employers Productivity capacity building Consultancy services Networking with local and international organizations on productivity Attitude change

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Promotion of good corporate governance practices and skills

Uganda National Chamber Of Commerce and IndustryPublic awareness campaigns and advocacy Consultancy services Catalyst for productivity culture Information gathering, processing and disseminationNetworking with local and international organisations on productivity Attitude change

Uganda Manufacturers Association Public awareness campaigns and advocacy Productivity capacity building Consultancy services Catalyst for productivity culture Information gathering, processing and disseminationNetworking with local and international organisations on productivity Attitude change Promotion of good corporate governance practices and skills

Sugar Corporation of Uganda LtdConsultancy services Attitude change

National Organization of Trade UnionsProductivity capacity building Information gathering, processing and disseminationNetworking with local and international organisations on productivity Attitude change Promotion of good corporate governance practices and skills

Makerere UniversityPublic awareness campaigns and advocacy Productivity capacity building Consultancy services Catalyst for productivity culture Information gathering, processing and disseminationNetworking with local and international organisations on productivity Attitude change Promotion of good corporate governance practices and skills

Central Organization of Free Trade UnionsPublic awareness campaigns and advocacy Productivity capacity building Catalyst for productivity culture Information gathering, processing and disseminationNetworking with local and international organisations on productivity Attitude change

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Promotion of good corporate governance practices and skills

Uganda Investment Authority Public awareness campaigns and advocacy Productivity capacity building Consultancy services Catalyst for productivity culture Information gathering, processing and disseminationNetworking with local and international organisations on productivity Attitude change Promotion of good corporate governance practices and skills

City Cargo (U) LtdPublic awareness campaigns and advocacy Productivity capacity building Consultancy services Catalyst for productivity culture Information gathering, processing and disseminationNetworking with local and international organisations on productivity Attitude change Promotion of good corporate governance practices and skills

Uganda Batteries LtdNetworking with local and international organisations on productivity Attitude change Promotion of good corporate governance practices and skills

Makerere University Business SchoolPublic awareness campaigns and advocacy Productivity capacity building Consultancy services Information gathering, processing and disseminationNetworking with local and international organisations on productivity Attitude change Promotion of good corporate governance practices and skills

Ministry Of Tourism, Trade and IndustryPublic awareness campaigns and advocacy Productivity capacity building Information gathering, processing and disseminationNetworking with local and international organisations on productivity Attitude change Promotion of good corporate governance practices and skills

Uganda Insurers Association Productivity capacity building Catalyst for productivity culture Information gathering, processing and disseminationNetworking with local and international organisations on productivity

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Promotion of good corporate governance practices and skills

Kyambogo UniversityProductivity capacity building Consultancy services Information gathering, processing and dissemination

Uganda Coffee Development Authority Public awareness campaigns and advocacy Productivity capacity building Networking with local and international organisations on productivity Attitude change

Ministry Of Information and Communication Technology Public awareness campaigns and advocacy Productivity capacity building Information gathering, processing and dissemination

Uganda Management Institute Productivity capacity building Consultancy services Attitude change Promotion of good corporate governance practices and skills

Uganda Tea Association Public awareness campaigns and advocacy Productivity capacity building Consultancy services Catalyst for productivity culture Information gathering, processing and disseminationNetworking with local and international organisations on productivity Attitude change Promotion of good corporate governance practices and skills

UGMA Engineering CorporationPublic awareness campaigns and advocacy Networking with local and international organisations on productivity Attitude change

Uganda Telecomms LtdNetworking with local and international organisations on productivity Promotion of good corporate governance practices and skills

Enterprise Uganda Productivity capacity building Consultancy services Catalyst for productivity culture Information gathering, processing and disseminationAttitude change

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Promotion of good corporate governance practices and skills

Uganda National Bureau of Standards

Public awareness campaigns and advocacy Productivity capacity building Consultancy services Information gathering, processing and disseminationNetworking with local and international organisations on productivity

Management Training and Advisory Centre (MTAC)

Public awareness campaigns and advocacy Productivity capacity building Consultancy services Networking with local and international organisations on productivity Attitude change

Uganda Small Scale Industries Association (USSIA)

Public awareness campaigns and advocacy Productivity capacity building Consultancy services Catalyst for productivity culture Information gathering, processing and disseminationNetworking with local and international organisations on productivity Attitude change Promotion of good corporate governance practices and skills

Phenix Logistics (U) Ltd

Public awareness campaigns and advocacy Productivity capacity building Consultancy services Catalyst for productivity culture Information gathering, processing and disseminationNetworking with local and international organisations on productivity Attitude change Promotion of good corporate governance practices and skills

Ministry Of Public Service

Public awareness campaigns and advocacy Productivity capacity building Catalyst for productivity culture Information gathering, processing and disseminationNetworking with local and international organisations on productivity Attitude change Promotion of good corporate governance practices and skills

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NGO ForumPublic awareness campaigns and advocacy Catalyst for productivity culture Information gathering, processing and disseminationNetworking with local and international organisations on productivity Attitude change Promotion of good corporate governance practices and skills

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Annex 6: List of National Productivity Organisations World Wide

1) Alabama Productivity Center (APC) - United States 2) All Russia Labour Protection and Productivity Center - Russian

Federation 3) American Productivity & Quality Center (APQC) -United States 4) Asian Productivity Organization (APO) -Japan 5) Barbados Institute of Management and Productivity (BIMAP) -

Barbados 6) Barbados National Productivity Council (BarNaPCo) -Barbados 7) Botswana National Productivity Centre (BNPC) -Botswana 8) Bulgarian Quality and Productivity Centre (BQPC) -Bulgaria 9) Center for Productivity and Competitiveness (CPC) -Moldova,

Republic 10) Centre for the Study of Living Standards -Canada 11) Centro de Calidad y Productividad -Mexico 12) China Productivity Center (CPC) -Taiwan, China 13) Cyprus Productivity Centre (CPC) -Cyprus 14) Delhi Productivity Council -India 15) Department of Productivity Development-Zambia 16) Directorate of Manpower Productivity Development -

Indonesia 17) Dr. Ambedkar Institute of Productivity - National

Productivity Council, Chennai -India 18) Ethiopian Management Institute-Ethiopia 19) European Association of National Productivity Centres

(EANPC) -Belgium 20) FIM Calidad Productividad Competitividad -Venezuela 21) Far Eastern Productivity Center -Russian Federation 22) Fondazione Giacomo Rumor, Centro Produttività Veneto -

Italy 23) Foundation Polish Productivity Centre -Poland 24) Fundacion Centro de Productividad Nacional (CEPRONA)

-Costa Rica 25) Greek Productivity Centre (ElKePa) -Greece 26) Hong Kong Productivity Council (HKPC) -Hong Kong,

China 27) Hungarian Productivity Center (HPC) -Hungary 28) International Green Productivity Association-Taiwan,

China 29) International Productivity Service (IPS)-United States 30) Irish Productivity Centre (IPC) -Ireland 31) Japan Productivity Center for Socio-Economic

Development (JPC-SED) -Japan 32) Korea Productivity Center (KPC) -Korea, Democratic

People's Republic 33) Management Development and Productivity Institute

(MDPI) -Ghana

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34) National Center for Productivity and Quality (CNPC) -Chile

35) National Iranian Productivity Organization (NIPO) -Iran, Islamic Republic

36) National Productivity Board -Barbados 37) National Productivity Centre -Nigeria 38) National Productivity Centre (MPM) -Turkey 39) National Productivity Corporation (NPC) -Malaysia 40) National Productivity Council-Tanzania, United Republic 41) National Productivity Council, Chandigarh -India 42) National Productivity Council, Hyderabad-India 43) National Productivity Council, Jaipur -India 44) National Productivity Council, New Delhi-India 45) National Productivity Institute (NPI), South Africa46) Pan-African Productivity Association (PAPA) - Africa47) National Productivity Organisation (NPO)-Bangladesh 48) National Productivity and Competitiveness Council

(NPCC)-Mauritius 49) National Productivity and Development Center (NPDC) -

Mongolia 50) National Productivity and Economic Development Centre

Ltd. (NPEDC)-Nepal 51) National Productivity Organization (NPO) -Pakistan52) National Wages and Productivity Commission -

Philippines 53) Productivity & Development Center/Development

Academy of the Philippines(PCD/DAP) -Philippines 54) Productivity Center NTNU/SINTEF -Norway 55) Productivity Centre -Ukraine 56) Productivity Centre of Kenya (PCK)-Kenya 57) Rationalisierungs-und Innovationszentrum der Deutschen

Wirtschaft e.V. (RKW) -Germany 58) Romanian Productivity and Quality Center (PQC) -

Romania 59) Seychelles Institute of Management -Seychelles 60) Slovak Productivity Center (SLCP) -Slovakia 61) Standards, Productivity and Innovation Board (SPRING)-

Singapore 62) Swedish Productivity Center (SPC) -Sweden 63) Thailand Productivity Institute (FTPI) -Thailand 64) The Brazilian Institute for Quality and Productivity in

Paraná (IBQP-PR) -Brazil 65) The Finnish Work Environment Fund -Finland 66) The Training and Productivity Authority of Fiji (TPAF)-Fiji 67) Vietnam Productivity Centre (VPC) -Viet Nam 68) World Academy of Productivity Science-United States69) Zimbabwe National Productivity Centre and Movement

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Annex 7: Questionnaire on the National Situational Analysis On Productivity In Uganda

SPONSORED BY THE COMMONWEALTH SECRETARIAT AND THE BOTSWANA NATIONAL PRODUCTIVITY CENTRE

Preamble The purpose of this survey is to assess the current situation regarding the productivity movement in Uganda; establish the factors that have led to the existing situation; confirm the need for the establishment of a National Productivity Organization (NPO); and identify those stakeholders key to the establishment and deepening of the productivity movement in the country. Your input will help us to determine the appropriateness of establishing an NPO and the necessary factors that will support its existence and sustainability. Your participation will also make you one of the champions in the revamping of the productivity movement in the country. Please take off some time to complete these questions the best you can.

Definition of productivity: In this study, the following definition of productivity shall be adopted:Productivity is defined as the amount of output per unit input achieved by a firm, an industry or a country. It is the measure of how well resources are brought together in organizations and utilized for accomplishing a desired set of results or outcomes (P.G. Mankad, Director General, NPC India). Productivity is an attitude of mind. It is a mentality of progress of the constant improvement of that which exists. It is the certainty of being able to do better today than yesterday and continuously. It is the continual effort to apply new techniques and methods. It is the faith in human progress. It is elimination of waste in all forms and stands for efficiency and improved quality in all activities.Productivity is therefore, the key word in raising competitiveness and consequently the prosperity of a nation. It is responsible for the continued growth of the sectors of the economy (agriculture, manufacturing, services, mining and others).

SECTION A: ABOUT THE RESPONDENT

1.0. Personal Information

(i) Name of Respondent………………………………………………………………….

(ii) Name of Organisation …………………………………………………………………

(iii) Position held in Organisation …………………………………………………………

(iv) Contact Details

a) Postal Address ……………………………………………………………..

b) Telephone: Office ………………………………… Mobile: ………………………..

c) Telefax: …………………………………… E-mail: …………………………….

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2.0. About the Organisation

2.1. Please briefly state the mandate of your organization (Add separate sheet if necessary).

………………………………………………………………………………………………………………………

………………………………………………………………………………………………………………………

………………………………………………………………………………………………………………………

………………………

2.2. Please briefly state the roles performed by your organization (Add separate sheet if necessary).

……………………………………………………………………………………………………………………………………

……………………………………………………………………………………………………………………………………

……………………………………………………………………………………………………………………………………

…………………………

2.3. How would you describe your organization? (tick as appropriate)

Government Ministry Government Department/Agency/Project Labour Organization

Employers’ Organization Private Sector Organization Non-Governmental/ Non Profit/CSO

Organization

Other (Specify)…………………………………………………

2.4. Does your organisation carry out any of the following activities in relation to productivity improvement?

(please tick box)

(a) Productivity Advocacy

(b) Research and Development

(c) Management Training

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(d) Skills Development

(e) Entrepreneurship training and development

(f) Quality improvement and assurance

(g) Capacity Building for enterprises

(h) Other Productivity related activity (specify) ………………………………………………………………………………………………………………………………….

2.5. What is the total workforce of your organisation? …………………Employees.

2.6. Does your organisation have a quality control unit/department? Yes No Not Applicable

2.7. Does your organisation have a staff performance and appraisal system? Yes No

2.8. Does your organisation have a Research and Development unit? Yes No N/A

SECTION B: FACTORS THAT CHARACTERISE THE CURRENT STATUS OF PRODUCTIVITY IN

UGANDA

3.0. Assess the magnitude by which the following factors characterize the current status of productivity in

Uganda. (tick as appropriate)

Factors characterizing productivity V.Poor Poor Good V.Good

(u) Quality of goods and services(v) Quality of human resources (education system, work

practices and ethics, management practices, training and retraining etc)

(w) Standards, Certification, Calibration

(x) Entrepreneurship training and culture

(y) Government support and awareness of the leadership

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(z) Research , development , innovation, incubation(aa) Access to investment and working capital(bb) Factor productivity levels(cc) Nature of employment (subsistence vs commercial)(dd) Business regulations

(ee) Conglomeration/clustering of industry

(ff) Energy and other utility availability and costs

(gg) Nature of export goods(hh) Productivity promotion institutions(ii) Role of government policy on productivity(jj) Financial support to productivity(kk) Ranking with other countries in the region and globally

(ll) Culture and traditions(mm) Unemployment and Underemployment

(nn) Public awareness on productivity(v) Awards and rewards for productivity

3.1. Please state any other factors and trends that characterize the current productivity situation in Uganda

……………………………………………………………………

…………………………………………………………………………………………

3.2. (i) Has the government provided a supportive environment for the establishment of a productivity movement

in Uganda? Yes No Don’t Know

(ii) If yes, select among the following what you think government has provided in support of a conducive

environment for the productivity movement (please tick):

Yes No

a) Appropriate supportive policies in place

b) Existence of infrastructure for the productivity movement

c) Conducting policy evaluation

d) Existence of a productivity monitoring system

e) Availability of a budget line to support productivity

f) Existence of a well co-ordinate institutional arrangement

g) Existence of a fund to support enterprises on productivity enhancement

h) Other (specify)

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4.0. Uganda is one of the countries in the East African and SADC region without a recognized National

Productivity Organisation/Centre (NPO/CPC). What would you consider to be the main factors that have

contributed to the non-existence of an NPO in the country? (Please tick as appropriate).

(a) Lack of awareness

(b) Lack of funding

(c) Lack of government policy

(d) Lack of qualified people

(e) Lack of Commitment

(f) Role of NPO being taken by other organizations.

(g) Political situation

(h) Other (specify) ………………………………..

SECTION C: FACTORS ATTRIBUTED TO PERCEIVED INCREAESE OR DECREASE IN

PRODUCTIVITY

5.0. (i) How would you describe Uganda’s state of productivity levels today? (please tick) Increasing Decreasing Don’t Know

(ii) Has the current state of the following factors contributed positively or negatively to the current productivity levels in Uganda?

Positive Negative

r) Macro-economic environment

s) The education curriculum

t) Nature of tertiary training/vocational training and education

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u) Public expenditure

v) Coordination and harmonization of development planning

w) Level of salaries and wages

x) Access to the sea ports

y) Availability and quality of Air and rail transport

z) Quality of road transport

aa) Agricultural advisory services

bb) Research, innovation, and development

cc) Industrial clustering

dd) Industrial parks

ee) Quality of goods and Services

ff) Public awareness

gg) Corruption

(iii) Are there any other factors that you may attribute to the increase or decrease in productivity levels in

Uganda? Please mention them. …………………………………...

………………………………………………………………………………………………

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SECTION D: SECTORS THAT ARE PERCEIVED TO BE THE MOST OR LEAST PRODUCTIVE IN

THE ECONOMY

6.0. Please score (from 1 to 10) the following sectors from what you perceive to be the most or least productive

in the national economy of Uganda.(1 least productive 10-most productive)

1. Agriculture

a) Livestock

b) Crops

c) Fisheries

d) Forestry

2. Industry

a) Manufacturingb) Agro-processing

3. Services

a) Construction

b) Infrastructure

c) Education

d) Health

e) ICT

f) Transport

g) Engineering

h) Public Service

i) Hospitality and Tourism

SECTION E: CRITICAL ACTIONS NECESSARY TO IMPROVE PRODUCTIVITY IN UGANDA

7.0. (i) On a scale of 1-5, which of the following actions would you consider as the most critical for the rapid

improvement of productivity in Uganda? (tick as appropriate: 1- least important, 5- most important)

Action 1 2 3 4 5

y) Establishment of an NPO

z) Developing the necessary competences for productivity

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managementaa) Entrenching principles of good corporate governancebb) Address Industrial productivitycc) Address Agricultural Productivitydd) Address productivity in the Public Serviceee) Promoting principles of Total Quality Managementff) Promoting International Standard Classification for

enterprises (ISO)gg) Coordinating body for productivity activitieshh) Development of a government policy on productivityii) Improving the regulatory environmentjj) National awareness and advocacy campaignskk) Restructuring of the education and training systemll) Training in corporate governancemm) Clustering and conglomeration of industriesnn) Dealing with attitude changeoo) Improving management competence, management

systems, HRD/HRD systems and practicespp) Strengthening the tripartite arrangement of government,

labour and the private sectorqq) Establishment of Standards and promoting the quality

and safety of all goods and services.rr) Energy and infrastructure developmentss) Improved social protectiontt) Security and good governanceuu) Strengthening vocational trainingvv) Strengthening entrepreneurship trainingww) Others (specify)……………

(ii). Does your organization’s Institutional arrangement address productivity issues

adequately? Yes No.

(iii) If Yes, in which way (s)? ……………………………………………………………..…………………………………………………………………………………………(iv) If not, are there significant gaps in your mandate and programmes leading to inadequate coverage of critical areas and programmes for productivity improvement? (please give details)......................................................................................................…………………………………………………………………………………………..

SECTION F: LEVEL OF AWARENESS AND COMMITMENT TO PRODUCTIVITY

8.0. (a) Is your organisation aware of any government led productivity initiatives in the country? Yes

No

(b) If yes, mention them……………………………………………………………………

………………………………………………………………………………………………

………………………………………………………………………………………………

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9.0. (a) Is your organisation aware of any private sector/NGO led productivity initiatives in the country? Yes

No

(b) If yes, mention them……………………………………………………………………

………………………………………………………………………………………………

10.0. Are you satisfied with the level of coordination of productivity initiatives in Uganda?

Not at all Average Satisfied Very Satisfied Don’t Know

11.0. Government has demonstrated its commitment towards productivity matters in the country. What is your

view?

Not at all Somehow Fully Committed Don’t Know

12.0. Is the concept of productivity known and cherished in your organisation?

Not at all Some how Well Known Don’t Know

13.0. How does your organisation define productivity?

Output (production) Output value/input cost Output/Labour

Don’t Know Other (specify) ……………………………………

14.0. Simply put, productivity is measured as the ratio of the value of output to the value of input.

a) Does your organisation deliberately measure productivity? Yes No

b) If yes, do you have a productivity measurement system? Yes No

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c) Please briefly describe………………………………………………….………………………………………………………………………………

……………………………………………………………………………….

…………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………

…………………………………………

15.0. Are the employees made aware of productivity as part of the organizational culture? Yes No

16.0. In your reward and promotion of employees, do you consider productivity as one of the factors for the

decision? Yes No

17.0. In your reward and promotion of employees, do you consider quality as one ofthe factors for the decision? Yes No

18.0. Please choose whether you agree or disagree with the following statements:

Agree Disagree

a) Productivity is the same as production

b) Productivity applies to the blue collar workers only

c) Productivity improvement takes away jobs

d) Productivity improvement only benefits employers

e) Productivity improvement only just means working harder

f) Productivity improvement is all right for factory jobs but it does not work for white collar workers

g) Productivity improvement increases stress and reduces job satisfaction.

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19.0. In your view, who is responsible for improving productivity? a) Government

b) Management

c) Workers

d) All the above

20.0. Your organisation has demonstrated its commitment to productivity matters by:

a) Advocacy programmes on productivity

b) Capacity Building

c) Research , Development and Innovation

d) Technology Acquisition

e) Quality management and assurance

f) None of the above

g) Others (specify) ……………………………………………………………………

21.0. The Poverty Eradication Action Plan (PEAP) identifies production and competitiveness as one of its

pillars. Identify activities that your organisation does in relation to this

pillar………………………………………………………………………...

………………………………………………………………………………………………

22.0. In your view, how does Uganda fair in terms of productivity performance with other countries?

Very Poor Poor Average Good Very Good Don’t Know

23.0. What in your opinion do you consider to be the competitive advantages that Uganda has over other

countries? (tick as appropriate)

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Area Yes No

p) Quality of education and training

q) Geographical positioning

r) Economic development policies

s) International aid support

t) Political stability

u) Weather and climatic conditions

v) Gender and equal opportunities in employment

w) Research, innovation and development capacity

x) Corporate governance practices

y) Total factor productivity

z) Quality of labour

aa) Organised and experienced labour movements

bb) Development planning coordination

cc) Institutions/organizations/projects/programmes with productivity related activities

dd) Quality of land and soils

ee) Organised and experienced employers’ organisations

ff) Other( specify)

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SECTION G: LEVEL OF EXPECTATIONS ON THE ROLE AND BENEFITS OF THE PROPOSED

NPO

o On a scale of 1-5, assess the benefits of establishing an NPO.

(1- least beneficial 5- Most beneficial)

ACTION 1 2 3 4 5m) Improving quality of goods and servicesn) Quality of export goods and serviceso) Entrepreneurship skillsp) Research, innovation and developmentq) Networking with other organisationsr) Just-in-time methods of productions) Advice to government on policy issuest) FDI and DDI attractiveness of the countryu) Technology transferv) Industrial clustering and conglomerationw) Optimal use of production resourcesx) Quality and quantity of the human resource

25.0. In my opinion, the following are the envisaged roles of the proposed National Productivity Organisation:

Proposed Roles Agree Disagree

k) A promoter of productivity

l) A capability builder

m) A catalyst

n) A mobiliser

o) An information disseminator

p) A networker

q) An initiator

r) A pioneer

s) A policy Analyst

t) An advocate

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u) Other …………

26.0. Are there any existing organizations that play roles similar to those of an NPO?

Yes No

If yes, please mention them. ……………………………………………………..……………………………………………………………………………………

27.0. As a newly established NPO, and given the competing priorities, which of the following programmes would be most critical to start off with? (rank in order of importance 1- least important 5- most important)

Programme 1 2 3 4 5f) Management training programmes and capacity building

(benchmarking) study visits to advanced countries.g) In-depth studies and research, information dissemination through

technical publications, conferences, workshops etc.h) Consultancy services to industryi) Public awareness campaigns and sensitization of leadership in

government on productivity issues.j) Productivity measurement techniques, tools and monitoring

systems

28.0. Is there a need for establishing an entirely new organization? Yes No

29.0. Can the functions of an NPO be performed through active coordination of the various existing organizations? Yes No

SECTION H: FACTORS OR PERCEPTIONS LIKELY TO PROMOTE OR IMPEDE THE ESTABLISHMENT OF AN NPO IN UGANDA

30.0. Indicate by ticking the relevant box, the major prevailing factors that are likely to promote or impede the establishment of an effective and sustainable NPO in Uganda.

Perception (Sociological factors) Promotes Impedes

a) Too many Government Organisations

b) Same roles with existing Organisations

c)Government does not have money

d)It is not a key priority

e)Lack of skills to start and run such an organisation

f)Other, specify …………………………………………………………

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Promotes Impedes

Technical factors

a) Availability of a government policy on productivity

b) Total Quality Management

c) Improvements in the regulatory environment

d) Government commitment to national awareness on production

e) An appropriate curriculum and training system

f) Existence of industrial parks and incubation centres

g) An effective and efficient public service

h) A strong tripartite arrangement (government, labour, private sector)

i) Other factors (specify) ……………………………………………………

…………………………………………………………………………………

SECTION I: POTENTIAL STRATEGIC PARTENERS

31.0. (i) Considering the productivity movement as a whole, which of the following functions would (you) your organisation be willing to support or get involved in and how? (please tick as appropriate)

a) Public awareness campaigns and advocacy

b) Productivity capacity building

c) Consultancy services

d) Catalyst for productivity culture

e) Information gathering, processing and dissemination

f) Networking with local and international organisations on productivity

g) Attitude change

h) Promotion of good corporate governance practices and skills

i) Policy development and analysis

j) Research, innovation, development and incubation

k) Other (specify)……………………………………………………………..

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(ii) Is your organisation already engaged in any of the activities in 31(i) above? Please elaborate.

(iii) What kind of support / collaboration would you need from government, the general public, private sector etc for the successful execution of the activities in 31(ii) above?

(iv) Does your organisation have any specific budget for these activities? (Please indicate amount if possible).

Name and Signature of Respondent ………………………………………..

Date………..…May 2008

Name and Signature of Researcher…………………………………. ……

Date: …………May 2008

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Reference Group Members

N

o

Name Title Institution

1 Mr. Amos Lugoloobi Chairman National Planning Authority

2 Mr. Kasozi

Mulindwa S

Member Uganda Management Institute

3 Mr. Joshua Mutambi Member Ministry of Tourism Trade and

Industry

4 Mr. Michael Matovu Member Federation of Uganda

Employers

5 Mr. Emmanuel

Baingana

Member National Organisation of

Trade Unions

6 Mr. Ojja Andira Member Ministry of Gender, Labour

and Social Development

7 Mr. Joseph

Rubarema

Member Uganda Industrial Research

Institute

8 Mr. Francis

Mazinga

Coordinat

or

National Planning Authority

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