THE CHALLENGE OF BUDGETTING FOR A POOR UGANDA

Last week Spanish Prime minster Mariano Rajoy in a text to his finance minister urging him to hold out for a better deal in negotiations for a bailout of Spanish banks said. “We are the number four power in Europe. Spain is not Uganda.”

When the text was released the Uganda social media chattering classes went into overdrive, so much so that the furor became a story on the BBC.

Spain is a much richer country than Uganda based on per capita figures alone -- $31,000 for Spain and $1,250 for Uganda adjusted for living standards ion the respective nations. But their economy is in much sorrier state. Their economy is contracting, they are suffering the after effects of property bubble burst and their banks are hobbled with so much bad debt that their collapse could threaten the future of the Euro zone. The bailout of the banks could cost upwards of $100b according to conservative estimates.

Finance minister Maria Kiwanuka read her second budget on Thursday and it was very hard to see the glass as half full.

The economic growth halved to 3.2% from the previous year, revenue collections came in short of budget and more than 10 million people are living in abject poverty, more if you do away with the subhuman requirements – living on less than a dollar a day, abject poverty calculations entail.

"Our situation compared to Spain is not unlike the situation US billionaire Donald Trump found himself in the 1990s when pointing out that the beggar on the street was much better off than he was. Whereas the beggar had nothing to his name Trump was indebted to the tune of billions of dollars. The pan handler is probably still where he is while Trump is now stronger than ever....

Faced with the challenge of making investments that will spur more and more growth – good economics, and on the other hand dribbling in the hard decisions over time versus all at once – good politics, you had the sense Kiwanuka was struggling.

With our ratio of revenues to GDP largely unchanged for the last decade and donors tightening their purse strings while our expenditure demands continue to grow with a rising population, something has to give. And that most likely will be a tightening of our own belts in the short term or until investments like the power dams and roads push up productivity and hopefully improve our lives in the process.

Our needs are huge. In the budget the minister pushed up the works ministry’s budget up almost twice in order to steer more and more of the budget towards road construction and rehabilitation. We upped the education budget almost by a fifth. These two are key to future growth of nations.

Analysts who started watching China three decades ago reported that they were investing a lot on building ports, road, rail and other communication networks. They poured in prodigious amounts into their education systems especially science and technology. They have been doing this consistently for more than 30 years and are not letting up now as the second largest economy in the world. The challenge with infrastructure and more so health and education is that the returns on investment may take decades to show...

Political pressures often prevents countries from making the long term sustained investment required to attain take off.

The noises from government suggest the they are prepared to take the tough political decisions to lay the foundation for takeoff. We have done it before and we can do it again.

In the 1980s the Ugandan economy was a pale shadow of its current self: Revenues were anemic, the public sectors were hemorrhaging even the little we were collecting and in addition stifling the private sector through its monopoly corporations. In order to turn it around government privatized the companies liberalized the markets and focused on stabilising the economy. All politically unpopular decisions at the time, but we bit the bullet and as an economy we are better from the experience.

Back to the #SpainisnotUganda protest. Spain has the advantage of having access to the bigger markets of Europe and so access to credit, expertise and all it would take to turn it around are all within reach. But Spain is going to have to take many politically unpopular decisions, expect a series of fallen governments as they try to dig themselves out of their current economic woes.

As for Uganda expect more belt tightening in coming years as we try to make the long term choices needed to move us to the next level.

ONLY IN UGANDA: THE STRANGE CASE OF ALICE KABOYO

Last week former State House official Alice Kaboyo dodged a bullet.

Charged with abuse of office leading to the loss of up to sh1.6b GAVI funds along with former health ministers JimMuhwezi, Mike Mukula and Dr Alex Kamugisha, Kaboyo pleaded guilty and was let off with a slap on the wrist – a sh20m fine or a two year jail term if she failed to pay the fine.

As an individual she was charged with causing a sh250m loss, money that was meant for immunization programs in the health ministry.

The ruling was received with a worrying disinterest.

Was it that it has been a long time since the case kicked off that we have all forgotten what it was about (stealing life savings vaccines from the babies of Uganda)?

Was it that the conclusion of the case was a forgone conclusion, harking back to the crocodile and tilapia analogy of one retired judge?

Are we so desensitized to the shenanigans of our rich and powerful that we can shrug off such a case and go on with the tough job of getting along?

Maybe we empathise with the poor woman’s frustration with our a convoluted justice system and do not begrudge the good lady cutting a deal any which was she could to extricate herself from the process?

As easy to read as we seem as a people, the muted reaction following the conviction of Kaboyo on her own plea is hard to fathom.

"But maybe that is what makes the Ugandan or African for that matter so resilient. In the last few centuries of our existence we have been sold into slavery, gunned down, colonized, diseased and spat on by foreigner and non-foreigner alike and we are still here. In fact we are growing at such a fantastic pace that people other than ourselves are most concerned about it.  We are the original turners of the left cheek...

One would have to check but this must be landmark case in Uganda. By pleading guilty and paying her fine Ms Kaboyo is thumbing her nose at us, she is admitting to the crimes we the people of Uganda accuse her of and is asking us “What are you going to do about it?”

All other people who have been accused of corruption have protested their innocence relentlessly, played at remorse and if convicted have gone kicking and screaming to serve their time.

But the truth is Kaboyo is a bit player in a larger phenomenon.

A culture of impunity that courses right through the narrative of our everyday lives.

The President has always argued that our society is far away from true democracy because we don’t have very credible stratifications that cut across the largely artificial boundaries of tribe, religion and ethnicity around which we can organize to compete for political power.

It’s a hard argument to counter.

But I think we are now getting there. Not in the way that we may have intended but we are getting their anyway.

The divide between the have and the have-nots is sharpening. Where the haves are the educated, driving, chattering classes, who to the have-nots, live totally unattainable lifestyles that the have-nots are convinced can only be attained by corruption, theft and crude accumulation.

The have-nots of course, not advantaged by access to education and technical know-who eke out a living often working for us, jumping out of the way of our second hand cars and  having to display sickening obsequiousness to obtain our favour.

"You see, when the revolution comes, the distinction some of us make between pilfering government officials and the rest, will not exist for the wretched of the earth...

Which reminds me of the story of my friend who is as Ganda as they come. During the unrest a few years ago in Kampala this friend was hauled out of his car around Makerere and made to prove his identity. After passing all the tests, the angry youth remained unconvinced about the pedigree of my friend. You see my friend just happens to be dark as night, whose height and loud self-confidence may suggest he is a nilot.

In view of such a context when the brown stuff starts flying,the English speaking elite will close ranks against the rest, purely out of self-preservation, regardless of whether we are angels or demons. A totally unnecessary but inevitable situation the way things are going.

Is there any hope for us? Maybe, if the purveyors of such impunity can repent of their sins and turn away from their sins … but then again this is Uganda!