Making the most of investment in Uganda: The role of supplier development programmes

Policy brief 4 Aug 2020 Firms

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Growing investment in Uganda offers an opportunity for policymakers to boost local production through supplier development programmes.
This brief considers the potential benefits of such programmes in Uganda to both large firms and suppliers. It also considers best practice for implementation, drawing on evidence from such programmes in countries such as Mexico, Chile and Costa Rica.
Cross country experience highlights that government facilitation of linkages between large firms and domestic suppliers is likely to be more effective than enforcing regulations on local content.
In part, this facilitation involves ‘matchmaking’ efforts between large firms and suppliers. However, matchmaking will only be as successful as the quality of local supply. As such, concerted efforts to raise the quality and reliability of local supply is an essential aspect of supplier development programmes.
There are a number of ways in which this can be done, ranging from overall improvements to the investment climate to concerted programmes to subsidise training and development programmes between large firms and their suppliers. Analysis of existing administrative data can help to identify key industries for such programmes.