Monday, January 31, 2011


This week two leaders made speeches: US President Barack Obama’s State of the Union Address to congress and the world and hours later President Yoweri Museveni’s speech in Masaka at the 25th anniversary celebrations of the NRM’s ascendance to power.

In the spirit of the campaign season Museveni needed to put statistical evidence to the improvements the economy has witnessed during his tenure.

In the US Obama did more forward looking, rallying an American people, beaten down by a stuttering economy, urging a return to basics in order that America can rise and shine again, while reminding them that they should brace themselves for sacrifice before things get better.

Unsurprisingly the delivery was different, befitting the timing and the respective levels of development of the two countries, but both speeches had the economy – more specifically job creation, as their central themes.

Uganda is not perfect by any measure but I am amazed when I look back 10 - , 15- or 20-years to where we were as an economy compared to where we are now. The quadrupling of the size of the economy and corresponding growth in exports, tax revenues, investment since 1986 is not something to be snorted at.

Even more amazing to me is the vast potential going forward, we have achieved this with low road and rail coverage, inadequate power generation, expensive credit and endemic corruption. It boggles the mind to think if these things were put in place or righted what would happen over the next 25 years.

However with growth has come rising inequality, an inevitable byproduct of a free market economy. When economies are liberalized the best placed to take advantage of the new changes are the existing entrepreneurs, the educated and the politicians.

Government needs to commit more seriously to the narrowing of this gap by providing quality education and health services and other public goods that will give every Ugandan a better than fair chance to uplift their station in life.

“Whether it’s developed consciously or unconsciously, this change in perspective about the value of investment in education is the real take off point for developing societies,” Thomas Donlan wrote in the book “A World of Wealth: How Capitalism Turns Profit Into Progress”

Which bring me nicely t o Obama’s speech.

America has been losing jobs at a fast enough rate to lower cost producers – even before the financial crisis, that the “hollowing out of American industry” is not an abstract phenomenon anymore.

Obama’s suggestion to turning this trend a round? “We need to out-innovate, out-educate and out-build the rest of the world. We have to make America the best place in the world to do business. … That is how our people will prosper. That’s how we will win the future”

America is not going back to manufacturing but is looking forward to the information age to reboot its economy. Through innovation, education and improved infrastructure Obama is seeking to boost the productivity of the individual American.

Last year when the stats came out that the Ugandan worker is the least productive in the region, we took it as an affront to hardworking ways. We shouldn’t have.

The low productivity of the Ugandan worker is more a function of our undercapitalization than anything else.

Take for instance that while the industry and services sectors are well entrenched in the ICT age, agriculture has remained frozen in the pre-industrial age. Better technology means the office worker can produce more than the hoe-wielding farmer. It’s no surprise then that as a share off GDP agriculture has slipped back to under 20% from more than half in 1986.

So Obama’s message can be Uganda’s message for the next 25 years.

We need to commit more resources to education, shoring up the syllabus and standardizing our schools. Fund universal health care while leading the way in the medical research. Boost our research and development capacity into crop and animal husbandry, agro-processing, marketing and distribution.

If Obama and his countrymen are on the moon – literally and figuratively, we are still grounded solidly in the dust, which is a sad testament to 50 years of independence but looked another way, means our possibilities are literally limitless.

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