They say we tend to overestimate what we can achieve in a year and underestimate what we can achieve in ten years.
We are into the new decade and a cursory glance to where we were ten years ago makes for interesting reading.
In the last ten years the size of the economy has doubled. According to official statistics the size of the economy, as measured by Gross Domestic Product (GDP) rose to sh20.6 trillion from as of 2009/10 from sh10.5 trillion in 2000/01.
The naysayers will have their doubts about these figures and in a way their sceptism will be warranted, because the same figures show that our individual share of this economy only grew by less than 50% during the same period. This variance can be accounted for by the fact that over the last 10 years our population has grown. Assuming a 3.1 percent annual growth over the year Uganda’s population would be up more than a third today from a decade ago.
But also during the period the structure of the economy continued to change. The agricultural sector share of the economy plummeted to less than a 15 percent compared to just over 40 percent in 1999/00. The share of services and industry grew to fill the hole.
This should come as no surprise as our agricultural sector continues to remain largely subsistent and even where, there are attempts at commercialization very little value is added beyond the basic post harvest processing.
First of all given the economic history of the world it’s a natural progression for economies to shift away from agriculture to industry and eventually to services, so a transformation of the economy is under way.
For instance there were 30 million farmers in the US after the Second World War a figure that has fallen to under a million currently, as people have concentrated in the urban areas – where they are more productive and agriculture has become more large scale and mechanized.
The worry in our situation of course, is that the bulk of our people live in the rural areas and as the statistics suggest, are not benefiting as much from the economic growth gains of the last ten years.
It is no surprise that services have risen to pole position in our economy. In the last ten years there has an explosion of in the telecommunications and financial industries.
In the last ten years we have seen teledensity – the number of people with access to telephone services as percentage of the population, jumping to the current 30 percent from under ten percent at the beginning of the last decade.
The importance to communication can not be underestimated in driving economic growth. Businessmen have now cut out the cost of unnecessary trips, have been able to respond quicker to market demands and now with the introduction of money transfer services have cut down the cost and risk of transferring money.
The increase in bank branches to 381 currently from 167 in 2001 is the most manifest sign of the increase in financial services over the last ten years. But the real telling statistics is the increase in deposits and credit to the private sector that has ensued.
Deposits are up to sh5.2 trillion in December from sh697.1b in January 2000, lending has followed a similar trend jumping nine-fold to sh5.1trilling from sh567b during the same period.
The numbers for in manufacturing, construction, the hospitality business, electricity and water supply will show an almost similar growth pattern.
In my mind two things are clear. One, that tremendous growth – while tempered by our population growth, has happened in the last ten years.
Also interesting to me is that we have achieved this growth despite our low indicators in road and rail coverage, availability of power, under developed financial and commodity markets and other deficiencies.
Looking forward to the coming decade we are going to have to sustain this growth curve while also improving the distribution of these benefits around the population.
For starters the infrastructure deficits need to be narrowed and the fight against corruption needs to be intensified – because the leakages in public finance is slowing the distribution of economic gains, concentrating them in the hands of a handful of well positioned and connected individuals.
In addition we need to not only nurture new entrepreneurs but push our existing crop to a higher level through education and support, for you can have all the roads and markets in the world at your feet but with out these individuals the benefits will never be enjoyed.
There is a lot that we can criticize in this country – not least of all that the growth of the last decade is being enjoyed disproportionately by an urban elite, but the general trajectory seems in the right direction all we need do is maximize the benefits to the wider population.