By Hakim Wampamba
Experts have called on government to enact laws to reduce on profit repatriation by multinationals. This follows the announcement of the exit of retail store Shoprite after 21 years of operation in Uganda.
Some experts said that firms like Shoprite have no legacy or tangible investment to talk about.
Francis Muhiire an economist at Makerere University Business School (MUBS) said the exit speaks quite a lot about the state of Uganda’s economy and lessons ought to be learnt
Damalie Ssali,a business expert said the business model of multinationals usually excludes local supply chains, a factor that makes them only takers, not investors, in the economy
While government has consistently lauded multinationals for creating the much needed jobs, experts say this is only half true when you compare the low pay given to workers in relation to the earnings made by the firms from the local markets.
Muhiire called upon government to enact laws on profit repatriation in order to reduce the amount of money that flows out of the economy as taxation of profits is insufficient.
According to reports, multinational telecom companies have been reported to be the biggest culprits when it comes to repatriation of profits shifting an estimated 3% of the profits made between 2003 and 2009 out of Uganda.