UGANDA IS POOR BECAUSE WE ARE WASTEFUL

In September the finance ministry released the first “Report on externally funded projects”, commissioned by the not-so-new secretary to the treasury Ramathan Goobi, to, as the title suggests, assess how we use our loans and grants.

Goobi promises that the report will be released semi-annually and has warned that accounting officers will be liable for the delays to projects they oversee.

First off, one wonders why such a report has taken so long to generate. We have been the beneficiary of donor largesse for the last four decades and we are only getting around to doing this now?

Among other things, a major driver for this report, “There is a problem of poor implementation of the projects,” Goobi says in the Foreword to the report.

“The main concern is around the non-disbursing donor financed projects. The commitment fees are paid upfront yet borrowed funds remained undisbursed for years.”

If you think about it, this is a counterintuitive behaviour. You are a poor man, your friends offer some help in the way of food, but you don’t move to eat it despite the growling in your tummy, allowing it to rot as you watch.

The report, all 370 pages of it, is a litany of criminal project delays, caused by poor planning and avoidable circumstances. As a result the majority of projects – seven out of ten surveyed are behind schedule, leading to expenditure overruns of more than 1000 percent in some instances...

So not only are we not collecting on monies due to us, but when we get the money, we squander it in a way that is mind boggling, and could only be ignored in government where there is an inexhaustible pool of tax payers money to waste.

It is at times like this, in this country that you don’t know whether to laugh or cry.

To illustrate with a few choice projects.

The Karuma  Hydropower project run 60 months or five years behind schedule. The government overspent sh30b due to the delays, a highly understated number, because loan commitment fees and insurance fees were not quantified and when these are made good, should drive the project cost even higher than the planned $1.7b.

The Kampala-Jinja expressway, which was supposed to be a ten year project to begin in 2014 has not begun yet, never mind that a lot of the planned $1.4b project cost is already earmarked. The African Development Bank signed off on $230m loan in March 2021.

And then you have to cry when you learn that €15.6m (sh62b) loan to develop the beef industry has gone begging. The project is way behind schedule --- it was supposed to start in 2018 and end in 2022,  partly because of the lack of a feasibility study, which makes you think these guys must be magicians to get money without a feasibility study. You try it.

But in this project, like many others, delays meant a depreciation of the shilling led to a substantial loss – sh3b, which meant the project had to be adjusted with a reduction in planned targets.

There are numerous other tear jerkers, its 370 page report after all, which goes a long way to explain why we are now back in the high indebted poor countries fold and clearly with little value to show for the debt burden we are shouldering.

The survey only sampled 82 projects, but we all know they are probably hundreds of projects over the last 40 years. Imagine if they had all been brought in on time and on budget, where this country would be?

The haters of liberal economics want government to take back the commanding heights of the economy so that Ugandans can benefit more. It is hard to see how that can be, given the government’s record on projects now...

Are they labouring under the asinine impression that with access to more money we will do better?

It’s a rudimentary tenant of money management, that money does not make you a bad person, it just amplifies who you are.

I would hazard to say that if the liberalized economy is not spreading the benefits of its wealth creation around, we should look to government for answers not the private sector.

The private sector is doing what it is supposed to do which is create wealth,  the failing is on government’s side, because it is not doing what it is supposed to do, which is distribute the benefits of this wealth creation efficiently and effectively.

I also worry for Mr Goobi. This scandalous wastage has been going on for ages – I am not sure he was in school yet by the time it started, the interest groups that have coalesced around this waste – it is not happening by mistake, are powerful, determined and ruthless. They will not let their bread slip away without a fight.

But then I am sure he has learnt that by now.