The 2010 UNDP’s Human Development report has recorded that between 2000 and 2008 51.5 percent of Ugandans lived below $1.25 a day with an index ranking of 143 out of 169. This high level of poverty and associated ills is unacceptable. So, what should be done to get Uganda out of this poverty trap?
First and foremost, Uganda leaders and senior civil servants must genuinely admit that the development model pursued in since 1987 did not work as expected for inter alia the following reasons.
1. The average economic growth rate did not reach 7 or 8 percent essential as minimum for achieving the Millennium Development Goals (MDGs) by 2015.
2. Excess capacity inherited in 1986 contributed more than economic reforms to economic growth and that that excess capacity is almost exhausted, calling for other sources of growth.
3. Trickle down mechanism failed to distribute the benefits of economic growth equitably resulting in skewed income distribution in favor of rich few families and spreading and deepening poverty.
4. Excessive obsession with macroeconomic stability especially inflation control to 5 percent and balanced budgets constrained investment and job growth because of very high interest rates and starved agriculture and social and infrastructural sectors of essential funding.
5. Export-oriented growth has created serious food security problems by diverting foodstuffs such as fish and beans traditionally produced for domestic use, reduced productivity and learning and exposed hungry people to various disease vectors.
6. Excess liberalization of the economy (laissez-faire) left many economic activities especially the manufacturing sector exposed to stiff competition and have had to close or drastically reduce investment and retrench workers to barely stay in business. Capital flight was facilitated resulting in little savings for domestic investment.
7. Virtual emphasis from subsistence agriculture straight to service sector with a concentration in the capital city has created bottlenecks. Industrialization is too important a phase to be skipped.
8. Failure to adjust stabilization and structural adjustment to local conditions and overreliance on foreign experts with insufficient knowledge of Uganda’s history, geography and culture resulted in theories being mechanically implemented.
9. Virtual absence of the state in the economy including in sectors that do not attract private sector investments.
10. Giving too much power to the ministry of finance and central bank left line ministries helpless with undermined morale and confidence.
While it is not suggested that the next government should do the exact opposite of what has been done so far, there is much room for change particularly in the following areas.
1. The overall responsibility for Uganda’s economy should be in the hands of Ugandans who are qualified and experienced in their fields of specialization. In time and space development comes principally from within countries. Loyalty or compensation for political losses should be avoided. External assistance should come in as appropriate on short-term basis.
2. The primacy of agriculture that caters for some 90 percent of Ugandans should be restored. Increased productivity should be encouraged thereby reducing extensive agriculture that has destroyed the environment by clearing large swathes of forest, grass and wetlands. Smart subsidies will be needed as well as land tenure systems that enhance the contribution of small-scale farmers who are productive, efficient, environmentally and socially –friendly when facilitated by the state.
3. Manufacturing should be encouraged initially with a focus on agro-processing that adds value, reduces losses and creates jobs. Appropriate legislation will be necessary to protect Uganda’s ‘infant’ industries against unfair competition.
4. State has responsibility to assist in creating jobs for the unemployed through public-funded programs such as constructing roads, clinics, schools, small-scale dams and reforestation. The lingering notion that the poor are lazy or stupid and should not be helped to find jobs are lame excuses that should be dropped.
5. Population dynamics should be an integral part of the overall development process in the short, medium and long-term. Given Uganda’s large youthful population base it will take a while to reduce overall population growth. However, decline in fertility can be enhanced by keeping children especially girls in schools beyond secondary level. It has been proven that school lunches improve girls’ attendance and performance and have been adopted by NEPAD. This would delay marriage and child bearing, empower women to manage their reproduction behavior and enhance contraception use and reduce child mortality. Family planning facilities need to be within short distances with well qualified and motivated staff that can prevent or address side effects. Government should avoid setting targets directly or indirectly on the number of children a couple should have. Access to family planning should be voluntary and demand driven.
6. While it is recognized “That government is best which governs least”, the strategic role of government should be enhanced. Countries that have developed had active state involvement in the economy and helped in getting market-based economies off the ground as exemplified by Japan. Uganda government should be active in long-term physical investment and human capital formation that are not attractive to private sector investors. Such areas include physical, institutional and social infrastructure. Road construction and maintenance, affordable energy supplies, education that provides skills, healthcare system that provides preventive and curative facilities in rural and urban areas and housing.
7. Balanced approach should be established between production for export and for domestic consumption. The harmful high levels of food and nutrition insecurity will need to be addressed to improve physical and mental development of children, productivity of adults and resistance to disease.
8. Negotiating capacity of Uganda delegations in private and public contracts needs to be enhanced.
9. Participation of all stakeholders in priority setting, program design, implementation, monitoring and evaluation is essential to avoid one-size-fits all solution among others. While decentralization provides a way forward, too much of it in terms of economically unviable districts is not recommended.
10. Chances of success in the above areas will depend fundamentally on political will to set right priorities and appoint right staff, ensure transparency and accountability.