Monday, June 13, 2011


The dust is beginning to settle on Maria Kiwanuka’s first budget speech.

I like the heavy emphasis on infrastructure funding – most of it dominated by sh800b plus to get the Karuma power dam under way and of course roads, there are also plans to get a Malaba to Kampala standard gauge railway line up and running and there was mention of earmarking money for water transport.

As a landlocked country communications – transport and telecommunications, are critical to our survival and eventual prosperity. The cheaper these are the better it is for our businesses and the population in general.

Our infrastructure is woeful and that is plain for anybody to see, but what is even more abysmal is the little issue of our labour productivity, the amount of goods and services a worker can produce in a given time.

You have heard it before, the Ugandan worker is the least productivity in the region, that is compared to their Kenyan and the Tanzanian counterparts.

According to figures released last year it would take one Kenyan to do the work of six Ugandans or a Tanzanian to do the work of four Ugandans. It gets worse when you compare our worker to a South African or a western European.

Statistics by the International Labour Organisation (ILO) indicate the value added per worker in Sub Saharan Africa is a twelfth of that by a worker in the industrialised world.

To begin with a lack of productivity does not necessarily point to laziness – though we all know about our deficient work ethic, productivity is a product of capital, labour and technology.

On these three parameters we have serious deficiencies.

We are failing abysmally to mobilize capital – we have a savings rate of less than 10% of GDP, our labour is largely manual and unskilled and our use of technology, be it in terms of improved management and operational methods or application of advanced equipment, is pitiful.

To illustrate, a subsistence farmer working his land using a hoe under the hot morning sun is less productive that the average formal worker, using computers or employed on an assembly line – in terms of value added or income earned. The difference between the two is the differing application of capital and technology to their labour.

Your cousin in the village may think you are a lazy bum because you do not break a sweat when you work in your air conditioned office, but he will be using the wrong measure, sweat in this case, to judge productivity.

He would be better served by adopting better agricultural practices and organizing with his farmers into bigger groups to take advantage of scale to improve his own productivity – even get someone else to do the grunt work for him and increase his own productivity.

The last I read the US has the most productivity workers, adding $63,000 of value per person in 2006 – it is not a coincidence that America leads the world in innovation in all areas of life. Innovation increases productivity.

So looking at the budget from this perspective there is an indication that the planners are thinking about productivity – they may not be able to communicate it, but I can discern the intention.

On the labour side money was provided for A-level universal education, vocational and entrepreneurial skills training, more money for drugs and the rehabilitation of Mulago hospital and for capital there was the start of a venture capital fund as well as more money for transport and irrigation infrastructure in terms of technology commercialisation of improved seeds and planting material could count for that. I abbreviate of course.

Maybe we could do more in retooling our education curriculum, lowering the cost of finance and aggressively promoting research and encouraging technology transfer. In short government can and must do better to focus on the issue of labour productivity. To dismiss Ugandans as lazy is to abrogate its responsibility.

Productivity is particularly important for Uganda because we have one of the fastest growing populations in the world and at the same time one of the youngest – meaning we have too many dependants or non-productive members of society.

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