How Uganda can escape from least developed status

As Uganda transitions from structural adjustment (SAPs) to national planning development based on public-private partnership, a fresh non-ideological assessment of Uganda’s economy, society and ecology needs to be undertaken in a transparent and participatory manner. Ugandans of all backgrounds need to be fully engaged because they have a lot to offer. They need to be heard, not lectured to. Ugandans have a wealth of undocumented information and experience. They have witnessed many economic, social, cultural and ecological changes in their communities. For these reasons they have developed definitions which differ in some cases from the classic cases.

The definition of poverty, for example, goes beyond the classic income poverty. To the income and material poverty they have added absence of social support systems that represent a feeling of isolation and exclusion, helplessness, insecurity and deprivation of basic human rights together with a feeling of voicelessness to influence conditions around them. Therefore pro-poor policies, strategies and programs need to go beyond standard definition based on income alone.

Conversations with farmers on the challenges they face have emphasized drought and increasingly floods, food losses and low purchasing power. These concerns are confirmed in official reports.

The impact of drought on agricultural exports, food security and quality of life has appeared regularly in colonial and post-colonial reports. For example cash crop production declined from 20 percent in 1999 to (minus) – 2.8 percent in 2000 due largely to prolonged drought. At a meeting of NGOs held in New York in June 2010 in preparation for the September 2010 Summit on the MDGs, a participant from eastern Uganda explained graphically how drought has devastated agricultural production, contributed to hunger, low incomes and driven residents deeper into absolute poverty.

While access to adequate land, credit facilities, extension services and market information are important, water management stands out as the single most significant factor for urgent attention. In a country where agriculture is overwhelmingly small scale, irrigation facilities through small dams need to be provided and maintained properly paying special attention to silting problems. This job cannot be left to market forces and individual initiatives alone. A public-private approach is more appropriate with adequate funding, monitoring and evaluation for positive outcomes.

Farmers have also underscored food losses before and after harvest as a major constraint in their efforts to lift themselves out of the poverty trap. Food losses are particularly high for perishable commodities such as bananas, milk and horticultural produce including fruits and vegetables. Farmers have singled out provision of cold storage and agro-processing facilities as pre-requisites to ending losses. Besides, reducing food losses, agro-processing has a further advantage of adding value and increasing household incomes.

Although industrialization has been talked about since the end of the Second World War in 1945, very little has taken place. This is due to Uganda’s continued emphasis on a classical colonial economy founded on the export of agricultural commodities which received a boost under structural adjustment. The little manufacturing that has occurred has suffered extreme fluctuations from various causes. By way of illustration, according to the 2000 Development Cooperation report the manufacturing sector declined from 12.4 percent in 1998/99 to 1.2 percent in 1999/00. This deplorable performance was caused in large part by the worsening terms of trade which constrained the import of necessary inputs.

Without making a concerted effort and move away from static comparative advantage that has defined Uganda’s economic structure since colonial times to a manufacturing sector with emphasis initially on agro-processing, Uganda will likely remain least developed for a long time. No country in the world has attained the developed status without engaging in full-scale industrialization. Those industrialized countries which had shifted to services are reverting to manufacturing to address the challenges of the 21st century including unemployment, with state intervention as and when necessary.

The issue of purchasing power which farmers have complained of is related to the terms of trade. Uganda’s export prices fluctuate randomly while manufactured import prices are always rising thus causing adverse terms of trade. In 1998 and 1999 Uganda’s terms of trade fell by 30 percent. The price of imported oil rose by 81 percent but the prices to coffee farmers declined by more than 50 percent. Thus adverse terms of trade reduce household incomes, consumption and investment, economic growth and increase in poverty keeping Uganda a least developed country.

Societies that are trapped in poverty and hunger like Uganda’s have a propensity for high fertility and a low utilization of contraception. Therefore the development and implementation of pro-poor policies and programs combined with education of girl’ beyond primary level and empowering of women to control their reproduction will go a long way in promoting Uganda’s graduation from the least developed category. The next government should pledge to end Uganda’s least developed status within ten years. With sufficient political will it can be done.