Investor confidence drops in Uganda: survey

The current energy crisis has conspired for the second time in a row to keep Uganda at the bottom of selected African countries in business leaders' confidence.

A Steadman Group research quoted by Daily Monitor on Wednesday has ranked Uganda at 44 percent, five points below its rank last year's.

The survey, conducted in five African countries, puts Tanzania on the lead with 62 percent, followed by Ghana 60 percent, Kenya 58 percent, Zambia 56 percent and Uganda 44 percent.

"Perceptions are often as important as purely objective measurements in determining investment decisions. The higher the confidence level, the higher the likelihood to commit resources," said Mwikali Maluki, country manager of the Steadman Group.

The Business Leaders Confidence Index (BLCI) measures what local business leaders in a variety of industries are anticipating about the economic conditions and trends that affect their business.

Compiled bi-annually from the results of the survey, the BLCI also sheds light on longer-term trends.

Maluki said that the BLCI Survey 2006 conducted between April and May 2006 shows that Uganda has dropped by 5 points, from 49 percent in 2005 to 44 percent this year.

She attributed the falling BLCI in Uganda to the current power crisis that has rocked the country's normal economic activities and the February 23 multiparty elections when investors were not sure of what would happen to the country's political atmosphere.

The decline in 2005 in BLCI was attributed to political turmoil the country was in following the arrest of opposition leader, Kizza Besigye at the time when the survey was going on ahead of the general elections.

During the five weeks of survey 90 chief executives in Uganda were interviewed on current economic conditions versus six months ago and economic expectations, six months ahead.

Despite the overall decline, the business leaders were optimistic that the economic conditions were better than they were six months ago and expected the trend to continue.

Source: Xinhua