The Uganda development target of increasing private sector investment and reducing mass poverty, which has recently been reaffirmed, contrasts sharply with experience on the ground, where investors are confronted with a combination of obstacles ranging from restrictive government regulation and lack of respect for property rights to corruption and poor macroeconomic environment.

Firm constraints:

Competition places pressure on firms to cut costs, yet many of the costs—such as those associated with corruption, bureaucracy, infrastructure deficiency, transport and telecommunications, utility tariffs, tax regime, interest rates, etc.—are not within the control of firms. This highly constrains business growth. Where taxes and bureaucracy are inhibitory to business survival, others try to cope by going under or paying bribes in order to avoid making full payment of tax and utility bills, or to avoid losing out on business opportunities due to excessive delays.

Study objective and data:

This study, conducted under the auspices of the Anti-Corruption Coalition Uganda, attempted to analyse the impact of corruption on private businesses using a number of case studies, drawing on a data set from 100 firms interviewed in September 2002—comprising manufacturers (textiles, and beverages/soft drinks); exporters (coffee traders and processors)… [text cuts off]