Experts advocate for legislation to limit profit repatriation.
The exit, according to Francis Muhiire, an economist at Makerere University Business School (MUBS), says a lot about the status of Uganda's economy and that lessons should be learned.
Experts have urged the government to pass legislation to limit multinational corporations’ profit repatriation. This comes after the retail store Shoprite announced its closure in Uganda after 21 years of existence.
According to some analysts, companies like Shoprite have no concrete heritage or investment to speak of.
The exit, according to Francis Muhiire, an economist at Makerere University Business School (MUBS), says a lot about the status of Uganda’s economy and that lessons should be learned.
According to Damalie Ssali, a business expert, multinationals’ business models typically exclude local supply chains, making them merely takers rather than investors in the economy.
While the government has constantly praised multinationals for providing much-needed jobs, analysts believe this is only half true when you consider the low pay offered to employees in comparison to the profits produced by the companies in local markets.
Muhiire urged the government to enact profit repatriation rules in order to reduce the amount of money that leaves the country, claiming that profit taxes is insufficient.
According to studies, international telecom corporations are the worst offenders when it comes to profit repatriation, with an estimated 3% of earnings produced between 2003 and 2009 being transferred out of Uganda.
