PRESCRIPTIONS FOR UGANDA'S NEXT 38 YEARS

Last week we commemorated 38 years of the National Resistance Movement (NRM).

There is a lot to be proud of. No less a figure than Singaporean former leader Lee Kuan Yew speaking in 1998 did not give Uganda a chance in 100 years to get back up on its feet. At the time the NRM was two years in power having inherited a country that was barely functional and an economy that had regressed to pre-1970 levels...

To add salt to injury there were insurgencies in the north and east, which were taking priority of the meagre national resources.

The rebellion mostly in the north, which lasted into this century, served as a lodestone on economic progress, as almost one in five of the country’s population was not producing or consuming meaningfully.

The end of the war on Ugandan soil from around 2002, meant northern Uganda could reenter the productive economy and the results have been telling.

Uganda’s per capita GDP has jumped almost four-fold to $934 at the end of 2022 according to the World Bank, from $241 in 2002. Interestingly per capita GDP fell back to 2002 levels from $253 in 1986.

One can argue that by 2002 a growth momentum had set in, from earlier reforms that liberalized the economy, but it is hard to discount the effect of the reentry into the economy of northern Uganda and West Nile.

However, an argument can be made that we have underperformed given the human capital we have, the natural endowments and the peace the rest of the nation has enjoyed.

That being as it is I would like to look to the next 38 years to see how we accelerate the development trajectory.

1.       Root out corruption

The recent Auditor General’s report reports a continued trend towards more and more waste in government. Its not that our officials are clumsy and letting valuable shillings disappear into thin air, more that they are keeping more and more of our tax shillings for themselves. This is affecting service delivery, concentrating resources in a few connected people’s hands and even worse, distorting markets by overinflating asset prices and underpricing genuine businessmen. Not only is this trend grinding the economy to a halt but also poses a serious threat to national stability and security.

2.       Leaner government

Relatedly we need to cut back on the cost of public administration, especially because the bloated public sector has increased the surface area for corruption with little attendant improvement in production. Leaner government would allow government to focus on what its supposed to do which is facilitate the private sector to produce and equitably distribute the ensuing growth. Leaner government also means government not succumbing to the temptation to go back into business...

3.       Greater emphasis on human capacity development

A few years ago an argument was made in the The Economist magazine that given a choice between human capital and infrastructure development, the smart money is on improving the quality of the population. The argument was that once the people are better educated and healthy they will find a way around the infrastructure deficits. However, if the quality of the people is wanting all the infrastructure in the world will count for little as they will not be able to exploit it to improve their living standards. School enrollement has to continue to rise but more importantly we need to reduce the drop out rate, about 1.4 million a year the last number I saw. We must increase access to quality health services. We must increase opportunities by improving the business environment to absorb all these quality Ugandans entering the job market.

4.       Continued infrastructure development

While we have made significant strides in infrastructure development – except rail transport, we are far behind what our ambitions require in road, energy and social infrastructure. Using roads as an example we have about 16 km of paved road per square km, which is well below what an average middle income country which is around 80 km per sq km. We have all seen in our various suburbs how much new economic activity is generated when a tarmac road is laid. The same deficiencies are seen in everything from electricity generation and consumption, to health center and school facilities to housing. Infrastructure is what unlocks the latent economy.

Invest in agriculture extension 

A recent study showed that for sub-Saharna africa to make its biggest gains in agriculture investing in agricultural extension services and irrigation are your best bet. we have been seating on our laurels for too long, to thepoint that our agriculture is still using means of pre-agricultural revolution times. Extension workers who will improve the productivity of our small holder farmers is critical. It is a scandal that while agriculture provides the livelihood of seven in 10 Ugandans it acocunts for less than 30 percent of GDP and has not enjoyed double digit growth in any one year in the last 40 years, hence the prevalence of poverty in Uganda.

 

5.        Export led growth

And finally, we need to focus on producing for export rather than import substitution. As the Asian tigers showed focusing on export led growth improves the quality of products and creates more jobs. Import substitution benefits a few connected people, does not improve quality standards and generally lowers livings standards by condemning the population to endure substandard goods. The evidence is all around us the export targeted Lato has better quality products, in adequate quantities and changing the socio-economic status of farmers in Ntungamo than their local competitors who are content to serve the Ugandan market.

 

This is by no means a comprehensive nor original list, the challenge for the next 38 years is the execution of these ideas. Hopefully we will look back in 38 years and we would have far exceeded our expectations.

FOR GOD AND MY COUNTRY!