A Strong Public-Private Sector Bond Fuels Economic Growth

by Business Times
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By Ian Rumanyika

The relationship between the private sector and public sector is a non-negotiable connection that ties policies, fosters innovation, and drives economic prosperity. According to the World Bank, countries with strong public-private partnerships tend to have higher rates of economic growth and innovation.

Public-private partnerships (PPPs), if implemented well, can help overcome inadequate infrastructure that constrains economic growth, particularly in developing countries. Poor infrastructure is often a reflection of constraints that governments face, for example, lack of public funds, poor planning, or weak analysis underpinning project preparation. PPPs can help overcome these constraints by mobilizing private sector finance and helping improve project preparation, execution, and management.[i]

Such relationships are crucial as they create a collaborative environment where businesses can thrive, innovate, and contribute significantly to the national economy – equally seen in the creation of effective regulations and transparent policymaking.

Recently, Uganda Baati CEO George Arodi led a team to pay a courtesy visit to the Deputy Speaker of Parliament, Rt. Hon. Thomas Tayebwa. During the meeting, the delegates discussed milestones along the company’s 60-year journey, and policy formulations in the steel sector. This engagement underscores the necessity for businesses to nurture relationships with parliament for sustainable growth.

Hon. Amos Kankunda, the Chairman for the Committee on Finance, Planning and Economic Development was present for this meeting. His committee gives crucial oversight on the country’s financial governance and economic planning. It’s charged with the review and analysis of budget proposals as well as examining national economic policies and development plans – particulars of interest to any respected private sector player.

The use of PPPs has increased in the last two decades. PPPs are now used in more than 134 developing countries, contributing about 15–20 percent of total infrastructure investment. During FY 07–11, investments in PPPs accounted for $79 billion annually and are now also being applied outside the traditional infrastructure sectors, including in the health and education sector.

In parallel with this development, the World Bank Group has expanded its support to PPPs through a wide range of instruments and services. During the last 10 years, Bank Group support to PPPs has increased about threefold. Lending, investments, and guarantees have risen both in absolute terms and in relative terms, from $0.9 billion to $2.9 billion and from 4 percent in 2002 to 7 percent in 2012.[ii]

Engaging with the public sector allows businesses to advocate for legislation that fosters a conducive environment for industry growth and investment. For instance, such engagements can lead to policies that reduce regulatory burdens, making it easier for businesses to operate and expand.

Collaboration between the private sector and the public sector is essential for developing regulations that are fair, effective, and supportive of business growth while addressing societal needs. By participating in legislative processes, businesses can ensure that regulations are not only practical but also promote competitiveness and drive sustainable development. This results in a balanced regulatory environment that protects consumers without stifling business innovation.

Favorable policies enable businesses to invest in new technologies and expand their workforce, thereby contributing to the national economy. Engaging with the public sector thereby ensures that the policies are developed transparently and are accountable to the needs of society and the economy. This fosters trust and credibility, which are crucial for a stable business environment. Transparent policymaking processes aid in the fight against corruption and ensure that all stakeholders’ interests are considered, enhancing the business climate.

By working with public sector, businesses can address social and environmental challenges, promoting sustainable practices and contributing to societal well-being. This partnership can lead to impactful initiatives such as environmental regulations that ensure businesses operate sustainably, benefiting both the business and the community at large.

As Uganda Baati celebrates its 60-year anniversary, it stands as a beacon of successful collaboration between the private sector and government. Since its inception in 1964, the company’s commitment to superior quality and its recent engagement with the public sector is a testament to the importance of nurturing a relationship with government institutions for long-term success.

Continued linkage between the private sector and public sector holds immense potential for driving growth, innovation, and sustainable development. By fostering these relationships, businesses and policymakers can unlock new opportunities for economic prosperity and societal advancement, paving the way for a prosperous and sustainable future for all stakeholders involved.

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