The last four decades have been the longest streak of economic growth in the history of Uganda. And in the state of the nation address on Thursday President Yoweri Museveni reported that the poverty levels have continued to reduce and the wealth disparities in the economy continue to narrow.
Quoting the
most recent National Household Survey Report by Uganda bureau of statistics
(UBOS) Museveni said the national poverty line – people living on a dollar a day,
had fallen to 16 percent of the population from 20 percent four years ago.
He also
reported an improvement in the country’s gini coefficient, which measures the extent
of income inequality is down three percentage points to 38 percent from 41
percent in 2020.
The reduction in poverty levels and income inequality are important, because what else is economic growth for than an improvement in the overall welfare of the people, so improvements in this last measures are always welcome.
The Uganda
economy grows even in our sleep. The GDP is now at about $60b compared to $4b
at the beginning of the NRM adventure in 1986. According to the World Bank the
Uganda economy was just under $10b in 20 years ago in 2005 and about $32b a
decade ago.
A lot the
early economic growth until about 2000 came from reconstruction and
rehabilitation before we started adding new capacity.
By ensuring
security, adopting a market economy and investing heavily in infrastructure –
some estimates put this at, at least a billion dollars annually since 2012, the
government has unlocked private sector initiative, unleashed new production and
improved access to markets. This has made continued economic growth a
mathematical certainty.
The challenge
with the market is that it tends to concentrate wealth in a few hands, it is up
to government to redistribute this wealth through taxation and not by handouts,
to improve the capacity of more and more people to benefit from the
macroeconomic growth.
The story is
told of how former Tanzanian President Julius Nyerere was trying to convince his
Kenyan counterpart Jomo Kenyatta to adopt socialism to which Kenyatta replied, “So
you want to distribute poverty?”
It is not a
chicken and egg question. It is clear that to uplift the general lot of the
people the economy has to grow first.
That being said
its plain for all to see that government needs to do more. It finds itself in the unenviable position of the cook serving Oliver Twist, who wants more.
What is true however is that the trajectory is onward and upward, however much we who are living through it, may think progress is moving too slowly for our liking.
In his
speech Museveni outlined 10 things his government will continue to do to ensure
continued economic growth and more equitable distribution of these gains to
everybody.
At the top
of the list was ensuring continued peace and security, accelerating industrialization,
encouraging industrialization and increasing market access regionally and internationally.
He also
added skilling of youth, improved revenue collection, restructuring government
to rationalize spending and the continued drive to move the rural economy away
from subsistence to commercial production.
I was sad that fighting corruption came a lowly ninth and the repayment of domestic arrears was not touched on or at least was not deemed important enough to get specific mention.
While in a cynical
way, corruption has helped keep the urban elite onside politically over the 40 years,
it has slowed the improvement in the general wellbeing of the people by affecting
service delivery. Government projects are either slowly, badly or not executed, in the process lining the pockets of the connected and denying the everyday man
the chance to advance his lot.
Going by the
improvement in the poverty numbers, it is clear that we are all rising with the
tide of general economic growth, it is no time to seat on our laurels.
Two weeks ago I had chance to be in the Nakivubo area. Whereas the common narrative in bars and in our various meeting areas is that the economy is not doing well, I witnessed no sign of despondency and hopelessness. Downturn is a heaving mass of activity, which told me that while things are tough the general population can see light at the end of the tunnel, otherwise how do you explain that thriving activity, unprompted by whips and threats?
