Uganda News

To attract real investments, focus on the purchasing power of the people rather than its size.

In a bid to entice international investment to Uganda, there has been a persistent claim that a large population will inevitably draw more foreign investment.

Comparison of the population, GDP, and income per capita of East African Community member states.

In a bid to entice international investment to Uganda, there has been a persistent claim that a large population will inevitably draw more foreign investment. As a result, possible foreign investors have been provided with population numbers for the six East African Community member nations as a single enormous potential market totaling 200 million people, which will be an ideal market for the investors’ commodities.

However, what appears to be conveniently overlooked in the preceding argument is the reality that when it comes to the people’s ability to consume, it is not the number of the population that matters. The level and capacity of consumption will be largely determined by the level and capacity of disposable income that the population possesses.

As shown in the two tables above, some countries have a large population but a low GDP per capita (disposal income), implying that their citizens do not have enough purchasing power to consume, whereas others, such as Mauritius, have a small population (1.2 million people) but a high GDP per capita (disposal income) ($20,539), implying that their citizens have more purchasing power and can consume more.

As a result, the focus of the argument should most likely shift away from big populations and toward strengthening the population’s purchasing power. This ability to purchase products and services is what will attract and persuade investors to invest in a specific economy. In actuality, simply waving data of vast populations with insufficient purchasing power could be deceiving.

 

It should be emphasized that, according to many studies, the population of most Least Developed Countries, including those in Africa, continues to grow each year in inverse proportion to their GDP per capita income. This is the underlying threat, and it must be handled as quickly as possible if these countries are to benefit from their ostensibly rising GDP, which is in reality being wiped away by population growth.

As a result, there is a need to begin gradually limiting the country’s current soaring population increase. There is a need to begin focusing on raising the population’s standard of living in a practical sense, and there is surely a need to focus actively on enhancing economic production.

As we’ve shown, even a relatively tiny population with considerable purchasing power may be an effective and appealing market for an investment.

ADVERTISMENT

Related Articles

Leave a Reply

Your email address will not be published.

Back to top button