Economic performance under Obote governments

economic record under Obote one and two regimes has been controversial. There
are those who report a very poor performance and those who disagree. In this
article, we present the contrasting views leaving the readers to draw their own

George Kanyeihamba writes that “At independence, the Ugandan economy was in
excellent form. It was one of the strongest in black Africa.
Comparative world economic data of the period excluded Uganda from the
poorest countries of the world. By the time of the first Obote government came
to be overthrown by the army in 1971, the economy was not in good shape and bad
economic performance was one of the reasons given by the Uganda soldiers for
overthrowing the UPC government from power. By the time Obote violated the
Independence Constitution, declared himself President, dismantled the
traditional infrastructure, suppressed the electoral process and established an
authoritarian presidency, the Uganda economy was weaker still…

number of Western governments got committed to supporting the Obote II
government regardless of its bad record on the Humanitarian Rights situation.
The financial loans and gifts donated by these governments were supplemented,
sustained and spearheaded by the World Bank and the IMF. In a bid to win
international recognition and the badly needed foreign exchange, the Obote II
government accepted all the conditionalities imposed by the donor countries and
by the World Bank and the IMF. A study commissioned at the time in Sweden revealed that much of the money given to Uganda did not
benefit the common people…

scale of corruption in the country was such that many Ugandan leaders and
public officials siphoned off part of it for private personal use. On the other
hand, the abject poverty of the ordinary man and woman was unbearable…

for the country, much of these funds had either been wasted on the internal
wars and conflicts or diverted to personal use…

did not arouse the same international revulsion as Idi Amin because of a
mistaken belief in the international community that no one could do worse than
Amin. Obote was also shielded by diplomats and representatives of the countries
of the West and the World Bank and IMF who had invested heavily in the recovery
of Uganda from the ravages of Idi Amin…

World Bank and the IMF which had selected the Uganda of Obote to be assisted
and developed as a model country for the Third World, were embarrassed at an International
conference they had organized and financed in Copenhagen,
Denmark, to appraise the
work and progress made in Uganda.
The embarrassment came about when several Ugandans who had been invited to
attend were led by Dr. G. W. Kanyeihamba and Mr. Sempebwa…in turning the
meeting into a critique of the Obote regime…. The World Bank was represented at
that conference by Mrs. Katrine Saito. After listening to the address of
Kanyeihamba and of the other Ugandans who were critical, she was visibly shocked
to learn about the killings and other gross violations of human rights in Uganda by a
government supported as a model by the Bank. She spent the rest of the
conference interviewing Kanyeihamba, Sempebwa, and several other participants
who were critical of the Obote government and supportive of Museveni and the
NRM. On her return to Washington, Mrs. Saito was among the World
Bank officials who persuaded the Bank to abandon Obote in favor of Museveni and
the NRM. Following the successes of the NRM and its assumption of power, Mrs.
Saito was amongst the very first World civil servants to visit and work in the
Uganda of Museveni and the NRM” (Kanyeihamba. 2002).

contrast, the World Bank records that “Uganda had one of the most
promising economies in Sub-Saharan Africa at the beginning of the 1960s… GDP
growth was about 6 percent a year from 1963 to 1970, and relative price
stability was maintained. At independence in 1962 Uganda had one of the most vigorous
and promising economies in Sub-Saharan Africa, and the years following
independence amply demonstrated its economic potential. Uganda’s social indicators were comparable to,
if not better than, most countries in Africa.
The country’s health services had developed into one of Africa’s
best. Uganda pioneered many low-cost health and nutrition programs. There was a highly
organized network of vaccination centers and immunization programs reached 70
percent of the population. Although school enrollment was still low, Uganda’s
education system had developed a reputation for very high quality” (World Bank 1999).

Kashambuzi (2001) reports that, “In Uganda which attained independence in
October 1962, the government embarked on comprehensive medical programs,
including physical and human capacity building. From 1966 to 1970, 20 new rural
hospitals were constructed compared to a total of 26 hospitals during the
entire colonial period from 1900 to 1962 (F. Banugire, undated). Medical
doctors, nurses, midwives and others were trained in the country and abroad.
Water supply was provided by constructing wells and hand-pumped boreholes.
Water tanks were also provided to harvest and store rain water. Immunization
programs received high priority. By 1970, the country had achieved a 70 percent
child immunization rate, as well as a broad-based health-care network even in
the rural areas (FAO 1998). As Banugire
notes, implementation of the health program was among the greatest success
stories during the second plan period from 1966 to 1971 (Banugire. undated). Consequently,
between 1959 and 1969, infant mortality declined from 160 to 120 per 1000 live
births (Uganda Human Development Report. 1996)”

Kyemba (1977) reports that “There was a good foundation of forty-eight
government hospitals, one hundred and fifty health centers (small units with
about thirty beds each) and three hundred dispensaries. The government
hospitals were administered in British fashion. Treatment was free. … The
mission hospitals levied a small charge; the government defrayed the running
costs. At the time of the coup [1971], these institutions were staffed by
experienced teams of doctors, nurses and paramedical staff. Salaries were low
…by Western standards… But until 1971 – when Uganda first began to feel the
effects of galloping inflation – these salaries had been adequate enough”.

C. W. C. B. Kiyonga reports that “It is to be acknowledged, however, that the
neo-colonial economy of Uganda was doing well up to the early 1970s. The country had a diversified export base
and earned substantial foreign currency to meet its needs. The industrial
sector produced a wide range of consumer goods to satisfy local demands and a
little surplus was exported to the neighboring countries. The civil service
then was well formed and had the capability to implement programs. There was an
enterprising Asian and African Middle Class which ran the private sector
effectively. Indeed the economy was growing at a rate of 5 percent per annum.
The second point to register thus far is that the appendage economy was at one
time buoyant” (Papers presented at the Uganda Government Seminar on the Economy
Since 1986. June 1990).

Uganda Peoples Congress (UPC) reported in its 1980 Manifesto that “Uganda’s economic growth between 1965 [and] 1970
averaged 7.8 percent which was the highest in East Africa.
Our overall balance of trade position was also the highest in the region.
Agriculture was the main contributor to that growth and health balance of
trade” (UPC. 1980).

Ingham reports that “…the Sunday Times [of London] carried a report commending Obote’s
achievements on the economic front. For the first time in three turbulent years
following Idi Amin’s overthrow, it stated, Uganda looked like a country with a
chance to rise from the ruins. Obote, it said, had achieved a near-miracle of
stabilization. Consumer prices had fallen in the previous twelve months;
exports were rising, and government revenue was rising faster than its
spending. Already half the finance needed to launch 140 key projects aimed at
boosting agriculture and industry had been raised, and Obote had despatched a
team of senior people to London to try to encourage foreign investors to
provide the rest of the money by offering them a range of incentives such as
exemption from import duties and the freedom to repatriate profits….

spite of these successes, the political scene remained clouded by the
continuation of terrorism” (Kenneth Ingham. 1994).

Uganda ran into
problems with the IMF over the sharp rise in public spending and the
government’s worries over the plummeting exchange rate. It [government] was not
able to renegotiate a new facility [with the IMF] when the one of September
1984 expired with SDR [Special Drawing Rights] 30m [million] still undrawn.
Obote ruled out a further standby facility because he would have to comply with
unpopular economic measures in the run up to the impending elections” (New African
Yearbook, 1987-88).