mulwana demonstrates that the ugandan private sector can succeed, provided that it follows his example of applying modern commercial principles to the management of business. the public sector must also play its part in reforming the business environment in uganda, so that it becomes more attractive to private investment. james mulwana was an inspiration to ugandans. may his soul rest in eternal peace. bis central bankers ’ speeches

it stood at 4. 9 percent of gdp. the formal manufacturing sector ’ s failure to generate much faster growth over the last decade is a major cause for concern, because in developing economies this sector plays a crucial role in driving productivity growth and the structural transformation of the economy. average real growth of formal sector manufacturing over the last 13 years was a respectable 6. 9 percent, but that is still far lower than the growth rates of the sector which are needed to propel structural transformation. the failure of the manufacturing sector to become the engine of growth of our economy can be attributed, i believe, to both weaknesses which are internal to many businesses in uganda and to constraints in the business environment. i will briefly elaborate on these problems. bis central bankers ’ speeches let me start with the way in which businesses are managed, because it is in this area that we can learn so much from the career of james mulwana. his businesses were successful over the long term because he understood and put into practice the fundamental principles of managing a successful commercial business in a competitive market economy. a successful business must first and foremost, have sustainable profitability as its priority objective. it must also re - invest the bulk of its profits in improving efficiency ; if it does not it will lose out to more efficient competitors. no business will remain viable if profits are instead taken out to fund the conspicuous consumption of its owners. most businesses need to borrow money from banks or other lenders, but borrowing should be prudent and should only be used to fund expenditures which benefit the business and can be repaid from the cash flow of the business without disrupting its operations. no business will be successful in a competitive market unless it employs modern professional management, with the requisite qualifications and experience. a business which is used to provide employment for the relatives of the owners will lack the necessary expertise to survive. finally, the sustainable success of a business requires building a reputation among its customers for high quality and reliable products. these principles are important for businesses in all sectors of the economy, but they are particularly important for those in the manufacturing sector. this is because manufacturing products are tradeable across borders, so markets for these products are very competitive. in competitive markets, firms cannot afford to stand still. to thrive they must continuously improve their efficiency which is only possible if they generate profits and then re - invest these profits in the business. unfortunately these principles of modern business management are not universally applied in the private sector in uganda, which is