Private Sector Experiences in Uganda

Herbert RwamibaziManaging Director AH Consulting Ltdwww.ahcul.com

14 November 2011Kigali, Rwanda

Nov. 2011 EAPPF

Presentation Areas1. Private Sector Objectives2. Successful Companies3. Levels of Competition4. Understanding the Private Sector5. Doing Business in EAC6. Conditions for Bidding7. Capacity Conditions Analysis8. Challenges9. Successful Strategies

Nov. 2011 EAPPF

1. Private Sector Objectives

To offer products and services that are

competitive [quality and pricewise] while providing

an adequate return on resources employed in

production of the goods and services

Nov. 2011 EAPPF

2. Successful Companies

• Win• Deliver results• Profitable• Sustainable businesses

Nov. 2011 EAPPF

3. Levels of Competition

• In-Country Competition • Regional Competition• Continental Competition • Global Competition

Nov. 2011 EAPPF

4. Understanding the Private Sector

Ineffective Effective

InefficientGoes out of

business very fast

Survives

Efficient Dies slowly Thrives

Effective

Efficient

Nov. 2011 EAPPF

5. EAC Doing Business Factors

UG KE TZ RW BDI0

20

40

60

80

100

120

140

160

121

102

120

70

140

118

106113

80

137

10898 100

133

GCI 2011-2012 (142) GCI 2010-2011 (139) GCI 2009-2010 (133)

Source: WEF Report 2011

Nov. 2011 EAPPF

Doing Business Factors - Uganda

Source: WEF Report 2011

Nov. 2011 EAPPF

Top 7 EAC Doing Business Factors

Access to Finance

Corruption

Tax Rates

Inadequate Infrastructure

Inflation

Inadequate Work Force

Government Bureaucracy

0.0 5.0 10.0 15.0 20.0 25.0 30.0

AVGBDITZRWKEUG

Nov. 2011 EAPPF

Top 7 Doing Business Factors-Averaged

Access

to Finance

Corruption

Tax Rates

Inadequate Infra

structu

re

Inflation

Inadequate Work

Force

Government B

ureaucracy

0.02.04.06.08.0

10.012.014.016.018.020.0

Nov. 2011 EAPPF

6. Conditions in Bidding

Favorable

•Fair participation•Timely information•Clear rules

Unfavorable

•Unfair participation•Lack of information•Varying rules

Nov. 2011 EAPPF

7. Capacity Conditions Matrix

Unfavorable Favorable

Low• Bidders not

interested • Bid at a high

price

• Bidders are interested •Missed value

High •Many bids•Missed value

• Good bids• Good value

Conditions

Capacity

Nov. 2011 EAPPF

8. Challenges for Private Sector• Intense competition from global

companies• Reliability of international

partners• Absence of preferential treatment• Supply side challenges – especially

finance• Difficulties in understanding plans• High transaction costs

Nov. 2011 EAPPF

Challenges for Private Sector – Cont’d• Delayed payments• Speed of decisions• Poor communication on

decisions• Challenges with bid securities• Building capacity without work• Poorly specified requirements• Poor contract management• Knowing how to lose

Nov. 2011 EAPPF

9. Success Strategies for Companies

• Defensive Strategies• Offensive Strategies

Nov. 2011 EAPPF

Defensive Strategies

• Raise structural barriers• Increase expected

retaliation• Lowering the

inducement for attack

‘Defensive strategies lower the probability of attack, divert attack to less threatening avenues or lessen the intensity of attacks’. Michael Porter, Competitive Advantage.

Nov. 2011 EAPPF

Offensive Strategies

• Innovations and reconfigurations

• Redefine the competitive scope

• Invest in acquiring a superior market position

‘The cardinal rule in offensive strategy is not to attack the leader with an imitative strategy regardless of resources’. Michael Porter, Competitive Advantage.

Nov. 2011 EAPPF

Other Strategies• Collaborations – J/V’s,

associations, sub-contracts• Competing in other markets• Increasing performance– Speed– Quality– Reliability– Dependability– Flexibility

• Competing on quality • Local preference???