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Macroeconomics Factors, Electricity Tariffs Top Business Constraints :: Uganda Radionetwork
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Macroeconomics Factors, Electricity Tariffs Top Business Constraints

According to the report, 17.3 percent of the business owners interviewed identified macroeconomics factors as the top business constraint followed by electricity with 15.2 percent.
electricity costs and stability among key business constraints in uganda according to a report

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Macroeconomics factors and electricity tariffs impeded the smooth running of businesses in Uganda between October and December last year, according to a business climate index released by Makerere's Economic Policy Research Centre (EPRC). 

 

According to the report, 17.3 percent of the business owners interviewed identified macroeconomics factors as the top business constraint followed by electricity with 15.2 percent.

 

 

Macroeconomics factors include bank interest rates and exchange rates. Other business constraints noted included insufficient demand, substandard products, competition, bribery, unfavorable weather and limited access to credit among others. 

 

 

"Like the last four quarters, macroeconomic environment and insufficient demand are among the key business challenges. Electricity has also emerged as a key problem this quarter. Nevertheless, competition from substandard products is less of a problem this quarter," the report reads. 

It further says; "The deteriorating macroeconomic environment affected the small and the medium firms most. Similarly, small and medium firms were relatively more affected by electricity constraints. Unlike the last quarter, insufficient demand became more of a problem this quarter and this could partially explain the less than potential perception."

Paul Lakuma, a researcher at Economic Policy Research Centre, says electricity hadn't been mentioned as a key business constraint in the last six quarters but it has now resurfaced.

 

 

//Cue in: "electricity has come…

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According to the report, business owners expect a slight deterioration in the overall business climate. The slowdown is expected to be driven by less robust performance of the service sector. 

"The less than favorable business expectations in the service sectors are anchored on anticipated decrease in turnover due to low activity, high labour cost and low capacity utilization," notes the report. 

However, the report says the agricultural sector is expected to improve significantly in the next quarter shored by an improved business climate coupled with the onset of the rainy season. 

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