How Nations Industrialize and Lessons for Uganda

Since the end of World War Two, Uganda governments including the
colonial administration vowed to industrialize the economy quickly in order to
create jobs for the increasing labor force and transform it from a peasant to a
modern and self-reliant one. The Jinja area in Eastern
was designated as the industrial hub or the Detroit of East

In the first five-year development plan
(1961-1966), the government stressed the expansion of agro-industrial products
and import substitution. In the Uganda Peoples Congress (UPC) Manifesto of
1980, the party promised to create stable and congenial conditions for the
vigorous growth of business and industry.

In its Ten-Point Program, the National
Resistance Movement [NRM] government pledged to establish import-substitution
industries to eliminate import bills especially in the consumer sub-sector
using local inputs as much as possible. The industrialization process would be
underpinned by research facilities to identify scientific techniques for
processing, preservation and packaging of industrial products. Foreign exchange
would be used to import technology to industrialize Uganda. The construction of basic
industries such as iron and steel, chemical or construction and engineering
would be undertaken, where feasible.

On July 8, 1996, the President addressed the
nation at the ceremonial opening of the 6th Parliament. He stressed that the first
two tasks would be the modernization of agriculture and industry. The President
was right to combine agriculture and industry because countries that
have industrialized began with agricultural revolutions. Britain is a
very good example.

Notwithstanding these pronouncements, the
record on the ground in agriculture and in manufacturing has been a
disappointment. Instead of industrialization, there are signs that Uganda may be
de-industrializing. So what should be done to industrialize Uganda?

Although there is no definite process that all
countries have to follow to industrialize, Phyllis Deane (1979) has recorded
some characteristics of general application which include widespread and
systematic application of modern science and empirical knowledge to the process
of production; the movement of labor from activities concerned with the
production of primary products to the production of manufactured goods and
provision of services as well as an intensive and extensive use of capital
resources as a substitute for and complement to human effort.

As noted above, it has been stressed that
without an agricultural revolution, industrial revolution would face serious
challenges. Jacques Gelinas (1998) has observed that profound changes such as
crop rotation, selection of seed and breeding stock, more advanced tools, new
crops; and the replacement of oxen with horses as sources of energy were
important in the early phase of the agricultural revolution. These innovations
spread throughout England at
the beginning of the eighteenth century and appeared in France fifty years later and in Japan around

Gelinas has added that modern industrialized
countries have all resorted to protectionism, first giving their agriculture
time to consolidate its gains and yield its financial, technological and social
benefits. They allowed significant foreign food imports only fifty years or
more after the start of industrialization. In England, the Corn Laws established
in 1660 to protect local agriculture were not repealed until 1846 under
pressure from industrialists who wanted markets for their surplus manufactured
products. Belgium began
importing food crops only around 1870, Germany around 1890 and Japan in 1925. This well-justified protectionism first allowed these countries to be
self-reliant, then to accumulate a financial surplus and technological
know-how, and finally to create solvent demand in a large part of the
population, namely the rural sector. More recently, when it initiated its Common
Agricultural Policy [CAP], post-war Europe gave air-tight protection to its internal market in order to reach food

There is also abundant evidence that all the
industrialized countries protected their ‘infant’ industries against competition,
even Britain,
the first European country to industrialize. Rajesh Chandra (1992) tells
us that “When Europe colonized what is today the Third
the bulk of these areas did not have sophisticated
manufacturing economies… However, there were countries that did have highly
sophisticated manufacturing economies. India is an excellent case in
point. Indian manufacturing was famous for its craftsmanship and its output
enjoyed an international reputation. … Britain destroyed this thriving and sophisticated manufacturing economy to induce India to import
manufactured goods from her… It is interesting that when Britain was
undergoing its industrial revolution it banned the import of Indian textiles,
arguing that British manufacturers could not compete with superior Indian
textiles and needed protection. However, when Britain was in a position to
mass-produce textiles, it flooded the Indian and other markets without any
regard to what would happen to indigenous manufacturers”. Andre Gunder Frank
(1979) added that it was precisely the development of industries in Britain that generated the underdevelopment and
de-industrialization of India.

He elaborated that the Asian cotton textiles
were prohibited from entering England in order to protect the woolen goods and the owners of the enclosed lands who
supplied the woolen raw materials. However, the growing influence of the new
industrialists who needed markets for their surplus manufactured products
forced the repeal of prohibitions against trade. The Corn Laws and the
Navigation Acts that had protected British infant enterprises were repealed.
“British industrialists had won the battle to institute free trade”. However,
the free trade which benefited British industrialists destroyed industries in
the colonies including those in Uganda.

On January 1, 1801 the Act of Union between Ireland and England came into operation assimilating the Irish economy into that of England. Free
trade between the two countries enabled England to use Ireland as a market for her surplus goods. What followed was the collapse of the Irish
industry which was accompanied by widespread unemployment (Cecil Woodham-Smith,

As noted above, before colonial rule, Africa already possessed basic manufacturing enterprises
and produced most of what the people required including a wide range of woven
and metal products such as knives, farm implements; leather goods; and complex
pottery. What Britain and
other colonizers needed in Africa were raw materials for their factories and
protected markets for their manufactured products (Rajesh Chandra, 19920).
Consequently, “Rulers discouraged processing and manufacturing, preferring
mining and single cash crops” (Sally Marks, 2002) and they are still doing so
under the guise of comparative advantage and globalization. As a result,
Africa, India, Ireland and
other colonized countries suffered massive if not total de-industrialization.

Contrary to popular belief that the British
economy was guided by Adam Smith’s doctrine of the invisible hand of the market,
the government of Britain was not passive at all. We are reminded by Phyllis Deane that the government
introduced enabling legislation. In other words, the doctrine of the invisible
hand to justify free trade and the philosophy of laissez-faire to have the operation of private
enterprises unrestricted did not happen in their pure form. Without government
intervention to remove obstacles through legislation for example on wages,
mobility and use of capital, industrialization would have run into some difficulties.
In short, “The fact was that as industrialization proceeded the state was
intervening more deeply and more effectively in the economy than it had ever
done before” (Phyllis Deane, 1979).

What was the role of population explosion, if
any, in the Industrial Revolution of Britain? John R. Barber (1993) wrote that
an industrial revolution requires a rapid supply of labor and a market for
manufactured products. And David Taylor (1988) added that what is abundantly
clear is that the rising British population was “accompanied by an increase in
industrial output, trade, greater social provision and a basic framework within
which people could live and work”. Thus, the agricultural revolution and the
population explosion enabled Britain “to rush into the industrial revolution ahead of all other nations” (John R.
Barber, 1993).

experience compels us to conclude that agricultural revolution, population
explosion, direct government intervention and protection of the infant
agricultural and industrial enterprises were essential and still are in the
process of the industrial revolution.

In Africa including in Uganda, the
reverse has been the case. Agriculture has not progressed beyond the hand hoe
and human energy; population growth which was an asset in Europe during the
industrial revolution is seen as a serious liability that should be controlled
at all costs; in Europe governments played crucial roles in the process of
economic development in general and in the facilitation and protection of
infant enterprises including in agriculture and manufacturing industries in
particular whereas in Africa, we are advised to roll back the role of the state
from economic activities and leave them to the invisible hand and laissez-faire capitalism, open our markets to
imports, diversify the export base with more primary commodities and privatize
the economy according
to the Washington Consensus. The comparative advantage practice since colonial
days which has confined Africa to the production of raw agricultural and mineral
resources in exchange for manufactured products has been complemented since the
1980s by the structural adjustment programs (Washington Consensus) resulting in
the de-industrialization of many African countries. According to Makonnen
Alemayehu (2000), in Africa “The rate of
growth in manufacturing value added dropped from more than 8 percent [of GDP]
in the 1960s to 5.56 percent in the 1970s to 0.25 percent in the 1980s”.

In these circumstances, we conclude that
African governments have no choice but to intervene strategically in the
economic development process, protect infant agricultural and industrial
enterprises from unfair competition and address demographic issues in a manner
that the continent does not suffer premature implosion, a shortage of labor and
undermine economic and industrial growth in the twenty-first century.

The abandonment of the Washington consensus gives African leaders
an opportunity to review what has been achieved, what remains to be done and
draw up a comprehensive and integrated road map on the way forward.