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Services Policy Review: Uganda (II)

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Services Policy Review: Uganda (II) UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT SERVICES POLICY REVIEW ,, UGANDA UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT SERVICES POLICY REVIEW New York and Geneva 2014 ii SERVICES POLICY REVIEW OF UGANDA (II) NOTE The symbols of United Nations documents are composed of capital letters combined with figures. Mention of such a symbol indicates a reference to a United Nations document. The designations employed and the presentation of the material do not imply the expression of any opinion on the part of the United Nations concerning the legal status of any country, territory, city or area, or of authorities or concerning the delimitation of its frontiers or boundaries. The views expressed in this volume are those of the authors and do not necessarily reflect the views of the United Nations Secretariat. The views expressed herein do not necessarily represent those of the Government of Uganda or those of UNCTAD. Material in this publication may be freely quoted or reprinted, but acknowledgement is requested, together with a copy of the publication containing the quotation or reprint to be sent to the UNCTAD secretariat: Palais des Nations, 1211 Geneva 10, Switzerland. For further information on the Trade Negotiations and Commercial Diplomacy Branch and its activities, please contact: Ms. Mina Mashayekhi Head Trade Negotiations and Commercial Diplomacy Branch Division of International Trade in Goods and Services, and Commodities Tel: +41 22 917 56 40 Fax: +41 22 917 00 44 Email: [email protected] www.unctad.org/tradenegotiations UNCTAD/DITC/TNCD/2013/12 Copyright © United Nations, 2014 All rights reserved. Printed in Switzerland. FOREWORD iii FOREWORD “The services economy is the new frontier for the expansion of trade, productivity and competitiveness, and for the provision of essential services and universal access.” These words from the 2008 Accra Accord adopted at UNCTAD XII highlight the increasingly important role services play, both directly as a source of income and employment and indirectly as productive inputs to other sectors. Indeed, the competitiveness of an economy today is directly related to the competitiveness of its services sector. At the same time, large portions of developing country populations do not enjoy adequate access to key services important for their health and welfare. This includes health, education, energy and transport. In the Doha Mandate adopted in 2012 at UNCTAD XIII, UNCTAD was called upon to continue this work on services. Over the years, UNCTAD has implemented a comprehensive work programme on services, trade and development with a view to assisting developing countries in developing their services sectors, increasing their participation in services trade and realizing development benefits. This work reflects extensive complementarity between the three pillars of UNCTAD operations. The Doha Mandate re-emphasized the importance of the development of, and access to, services, supported by adequate regulatory and institutional frameworks, which are important for sound socioeconomic development. It called upon UNCTAD to continue its work on services and assist developing countries and economies in transition in promoting the development of key services sectors and determine the right policy mix, including trade policy and strategic liberalization, which can lead to the improvement of domestic service provision and increased trade. UNCTAD is pursuing this objective through the three pillars of its work – intergovernmental consensus-building, research and policy analysis and technical cooperation. Services Policy Reviews are an important component of this work. A Services Policy Review examines economic, trade, policy aspects of selected services sectors identified by the Government and provides an evidence-based approach to policymaking on services by reviewing policy, regulatory and institutional issues and options with a view to assisting the beneficiary in developing a coherent and comprehensive strategic framework for services. In close partnership with the Government, research undertaken by UNCTAD and at the national level is integrated into the results of national stakeholder consultations to yield policy recommendations for action. The keen interest of Uganda has led to the completion of two Services Policy Reviews. The first Review, completed in 2008, focused on the insurance, legal, accounting and construction and engineering services sectors and regional integration. UNCTAD reviewed the implementation of the recommendations of the first Review. The implementation review report indicated a mixed implementation record. In the legal services sector, none of the four recommendations put forth in the Review were implemented. The review of the Advocates Act and the Uganda Law Society Act on which implementation of the recommendations was premised is ongoing. In the other three sectors, implementation was partial. Of the five recommendations relating to accounting services, three were fully implemented, while two were not implemented at all. The report however highlights noteworthy developments which are positively impacting the sector (e.g. incentives were created to promote compliance with the International Financial Reporting Standards). Of the 10 recommendations relating to insurance services, 4 were fully implemented and 3 were partially implemented, while another 3 were not implemented at all. The insurance industry has undergone extensive reforms since the completion of the first Services Policy Review which were consolidated by the Insurance Amendment Act, 2011. However, the report notes that the reform package can only be fully realized when regulations giving full effect of the Insurance Amendment Act, 2011 are enacted. Of the 11 recommendations made with respect to construction services, only 1 was fully implemented and 4 were partially implemented, while 6 had not been implemented at all. The report concludes that although a number of interesting developments have taken place in the construction and engineering sector since the completion of Review, the lack of a statutory authority (i.e. the Uganda Construction Industry Commission) is the key factor which has delayed the implementation of several recommendations. This second Services Policy Review examines distribution services, information and communications technology services, computer and related services and services auxiliary to all modes of transport. Both Services Policy Reviews yielded concrete recommendations to build supply capacities, strengthen policies and regulations and institutions and to improve public–private sector cooperation, including through the creation or strengthening of services associations and coalitions. iv SERVICES POLICY REVIEW OF UGANDA (II) Among the conclusions of the study, the following are lessons which may be applicable to several sectors of the Uganda services economy: i The need for coordination between various government entities in charge of a given sector and clear decisions on the line ministry responsible for policy oversight i The opportunities for the development of an enabling environment for market development and production though East African Community region-wide initiatives (e.g. the East African Community Treaty requirement for the development of indigenous entrepreneurs and initiatives linked to the trade facilitation across borders in the East African Community) i The need for Government to provide the necessary hard and soft infrastructure which supports all service providers (e.g. storage silos, modern market facilities, railway and water transport, transport infrastructure, and information and communications technologies) i The benefits of limiting overlapping mandates among industry actors i The importance of expediting the enactment of key legislative texts and amendments to address the existing gaps and inefficiencies i The need for regulation to include the provision of a safety net for vulnerable and disadvantaged players in order to achieve poverty reduction and, in specific cases, local content provision if feasible i In certain sectors, there is a case for the establishment of a dedicated statutory autonomous institution (e.g. proposal for a Uganda maritime logistics authority) i The need for regulators to ensure compliance with licensing requirements (and in particular universal access obligations). The second Services Policy Review was presented to national stakeholders for validation at a workshop held on 15 and 16 May 2013 in Entebbe, Uganda. It was also presented to a high-level international audience by Ms. Amelia Kyambadde, Ministry of Trade, Industry and Cooperatives of Uganda, during the Beijing edition of the Global Services Forum, held from 28 to 29 May 2013. My hope is that the analysis and recommendations of this report will make a constructive contribution to the development of Uganda’s services economy and trade. Mukhisa Kituyi Secretary-General of UNCTAD ACKNOWLEDGEMENTS v ACKNOWLEDGEMENTS This paper consists of phase II of a Services Policy Review undertaken by the Government of Uganda, Ministry of Trade, Industry and Cooperatives, in collaboration with UNCTAD. Part one was prepared by a team led by Mina Mashayekhi, Head, Trade Negotiations and Commercial Diplomacy Branch, of UNCTAD. Team members included David Bicchetti, Deepali Fernandes, Michiko Hayashi, Martine Julsaint Kidane and Mesut Saygili. Comments were provided by Luisa Rodriguez, Sophia Twarog and Liping Zhang of UNCTAD. Part two was prepared by a team
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