What are limitations to capital accumulation in your country?

Note:

• Capital accumulation refers to the process of increase in stock (quantity) of capital which enlarges the countries capacity to produce goods and services, leads to increase of machinery (which increase productivity of labour) and makes positive break the vicious circle of poverty.
• The level of capital accumulation in a country depends on savings, profit levels, labour productivity institutional framework and the number of entrepreneurs.
• Uganda is a low developed country, the limitations given below are those applicable  in LDCs

Limitations

• Low income: majority of people in Uganda have low levels of income which leads to low savings and low investments
• High population growth rate: Uganda has a very high population growth rate and the very many young dependents discourage saving and investment
• Political instability leads to high expenditure in security department leading to low capital accumulation
• Low level of education/ literacy: low levels of literacy leads to lower productivity and income and finally to low capital accumulation
• Poor infrastructure and financial institution. Poor infrastructure in form of roads and railway lines hinder movement of goods and services lowering productivity and capital accumulation
• Time preference: In Uganda majority of population prefer present consumption to future consumption and as such have low saving leading to low investments
• Demonstration effect in consumption: Uganda with better income have lavish expenditure of MDCs draining their savings
• Small size of the market discourages high productivity of goods and services
• Cultural factors hampers productivity by practices such free land acquisition and rejection of new methods of production
• Low level of entrepreneurship due to poor managerial skills and fear to start new enterprises
• The rate of capital inflow and outflow: Uganda has low capital inflows and high capital outflow due to importation
• Investment climate: the investment climate is low due high interest rate and unfavorable exchange rates these lead to low level of production and low levels of capital accumulation