Last week Prime Minister Robinah Nabanjja announced that this time around the government was going to give cash hand outs to the most vulnerable, unlike the last lock down when the government dished out posho and beans.
This was a welcome announcement in light of how shoddily the food distribution happened last time, but also because it makes good economic and dare I say, political sense.
Social security payments really kicked off after the second world war in Europe. A lot of Europe’s industrial base was flattened and needed to be revived quickly to give those economies half a chance of getting back on their feet.
Aid from America under the Marshall plan worked, helping to restore Europe’s industrial base. England only recently paid it off in full. However, the mass market that was needed to sustain these industries was not there as most were out of work or barely getting back on their feet.
Government’s then decided to design social safety nets, which catered for among other things unemployment benefits.
"With money in their pockets people went out to buy products, allowing industry to expand and employ more people. Despite greater affluence the social security nets have stayed largely in place to ensure “no one is left behind”...
During the pandemic cash handouts were seen in the US and Europe too.
The same logic should apply to support the cash hand outs to the most vulnerable during this lock down in Uganda.
From the start one might be in need during the lockdown but it may not be for food. I might have access to my gardens or other sources of food and therefore my challenge is not feeding my family and I.
But also it has been shown that at the bottom of society’s pyramid, people are more likely to spend for consumption than to invest.
So the billions that would have been paid out to a handful of connected posho and beans hawkers, would better serve the economy if they were put in people’s hands. If a person got his sh25,000 handout he would run out to buy soap, charcoal, salt or even food from the nearby market, which money the shopkeeper will use to order more stock, pay his workers and utilities and on and on it would go. A real trickle down.
However, the big distributors who were paid last time were paid through the bank and probably kept their earning in the bank and since the banks were not lending that money got stuck there. Or even if they went out and made some purchases of a new car or a house or land, you can not compare the ripple effect to that of giving your tom, dick and harry hard cash.
In the former case a minute section of society benefits, while in the latter case you can have society wide benefits.
The prime minister also announced that they were contemplating paying the money by mobile money. Which came under a lot of criticism from the usual suspects.
"It is actually a very efficient, transparent and traceable way of not only determining vulnerability, but also getting the money to those in most need...
Of course not everybody has a mobile phone, but with this one method you will have got to a significant number of people, for a fraction of the cost of sending trucks laden with beans out into the country side. For the others the LC networks can be employed as have other networks like the Social Assistance Grants for Empowerments (SAGE), a government program for aid to the elderly.
Most of the critics shook their heads at the suggestion because they know what happens when government technocrats come into contact with funds meant for the poor, or any funds for that matter. And they will not be wrong. But better to have a system which has a better chance of making real change than one, which does not but the funds will still be stolen anyway.
But staying on the subject of social safety nets, the high cost of intensive care has come into sharp focus in recent weeks. People who have never been admitted to hospital for anything worse than childbirth, are in shock at the millions of shillings they are being forced to fork out to settle their bills. Worse still if the patient dies.
Government has focussed on providing basic health care – and not very well, and done little to nothing in the way of providing nationwide intensive care.
Government will protest that last part, but the proof is there for every body to see. There is no way the private hospitals would get away with the charges they have been asking, if government had enough capacity to counter these price gougers.
"It was all ok as long as the big shots in government could fly out at will and have their bills paid by the taxpayers – per diems and all, but now the chicken have come home to roost...
Hopefully now we will take a sharper look at our health system. It is not by accident that Cuba has a better health system than even the US, a decades long embargo of the small Caribbean island made it necessary.
As for those hospitals that have deliberately taken advantage of this crisis to fatten their margins unreasonably, the lightening that will strike you down is still doing press ups.
