Tag Archives: economy

Western economic and political models have failed in Uganda

The collapse and abandonment of structural adjustment in 2009 and the disastrous February 18, 2011 presidential and parliamentary elections have demonstrated beyond a shadow of doubt that the two western models have no place in Uganda’s political economy. How did it all begin?

In 1981 the revenue starved government of Obote was forced to sign a structural adjustment agreement with the IMF in order to open the door for other donors to enter and support Uganda’s development efforts. The agreement had stiff conditionality including a balanced budget and low inflation. A combination of drought and guerrilla war necessitated deficit financing slightly above the ceiling agreed with the IMF. The latter would not budge and withdrew support at such a critical moment. IMF action meant that the door was shut to other donors because agreement with IMF is a prerequisite for foreign aid. Therefore, other donors had to leave or reduce support to humanitarian activities. Under the pretext of excessive human rights violations, the World Bank pulled out as well.

Lack of resources to meet the needs of the public and armed forces and other aggravating factors led to a split in the armed forces and a discontented population. Consequently, Obote’s government was overthrown in July 1985 by a section of the national army.

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Political control by any means necessary has some problems

There are many reasons why people join politics. There are those who join for fame. There are those who join because they have nothing else to do. There are those who join to make money. There are those who join to bring certain issues to public attention. And there are those who join to solve problems.

I joined politics very early in life. I joined student politics at Butobere School because I wanted to bring all students together to celebrate independence as one united group, not supporters of DP or UPC. I became president of Rujumbura Students Association to bring harmony among sectarian groups. I involuntarily joined Rukungiri UPC politics of meat eaters and vegetarians because I wanted to defend a civil servant who had been unfairly treated by the vegetarian group. I became president of African Students Association at the University of California at Berkeley because I wanted African students to have a common position on the Vietnam War. I became chairman of UNDP staff association in Zambia because I wanted harmony between locally and internationally recruited staff. I co-founded Uganda Unity Group in Zambia to bring Ugandans together and end sectarian politics against the Amin regime and I joined Amicale at the United Nations in New York so that Africans have a common position on matters that affected their welfare.

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We are losing Uganda to the East African Community

Let me begin with three points of clarification. First, there are some people who are wondering how one person can write as prolifically as I am doing without assistance. I want to assure everyone that I have never received one dollar in assistance; I have never hired a consultant or even a secretary to type my manuscripts. I have done all the research, all the writing and all the typing by myself and paid all expenses from my own resources. I have not been influenced by anybody or any ideology but my own conscience. It is a commitment to my country that has driven me to do what you have read. If unsure you are free to investigate.

Second, I became an author and co-host of an English program on Radio Munansi for various reasons. One of them is that many decision makers in Uganda used to tell me and still do that more often than not they take decisions they would avoid if they had enough information. Some of them urged me to share my thoughts with a larger public. I focused on the Great Lakes region because it has had a far greater impact on Uganda than any other African region, and it could even have more in the days ahead. Notwithstanding human imperfections, I have tried to be as factual as possible, at times examining both sides of the issue before drawing conclusions and offering recommendations.

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My philosophy about Uganda

A lot has been written and said about me directly and indirectly. Given my frank involvement in Uganda’s political economy discourse, it would have been unusual for my views to remain unchallenged. I have already informed readers what triggered my interest in research and writing about Uganda in the context of the Great Lakes region. I began research in the early 1970s and my first book was published in 1997. In doing so I was guided by my faith to tell the truth and be on the side of voiceless, powerless and vulnerable people. In order to empower the voiceless, one has to understand why they are voiceless in the first place. That is why I spent many years doing research using primary and secondary sources. I obtained invaluable information through personal contacts, at times travelling by bus many times between Kampala and Rukungiri. I have done my research in a historical context, not from 1986 when NRM government came to power as some commentators have implied. I have given credit where it is due and criticized where it is the right thing to do. I have credited and criticized administrations in Uganda especially British, UPC and NRM. My belief is that to solve a problem you have got to get to the root cause and the agent that caused it otherwise you will treat symptoms and you will never get the work done satisfactorily. As a result of frank and manner of presentation of research findings some people have labeled me radical, assertive, sectarian and impatient. Let me explain what each one of these words mean from my perspective and why I feel the way I do.

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IMF representative speaks on Uganda economy and EA integration

While addressing NRM members of parliament at Kyankwanzi National Leadership Institute, Dr. Thomas Richardson, senior IMF representative to Uganda observed that Uganda has one of the fastest growing economies in the world. Uganda’s future economic growth was recently lowered to about 5 percent because of the difficulties being experienced in the country.

Five percent growth rate falls far short of the 8-9 percent growth rates required as minimum to meet Millennium Development Goals (MDGs) by 2015. Countries like South Korea that transformed their economies and graduated to developed country status grew at 9 percent for many decades. Dr. Richardson observed correctly that agriculture has played a small part in Uganda’s economic growth. Given that some 90 percent of Ugandans earn their livelihood in agriculture, the sector should receive top priority attention.

The government with external support has focused on services and industry which are located mostly in the Kampala area and are capital-intensive, creating virtually no jobs. It’s no wonder that some 70 percent of Uganda’s GDP is generated in the Kampala area.

When we talk about industry we need to specify whether we are talking about manufacturing industries or industries in general like tourism industry. Uganda needs manufacturing industries to contribute to structural transformation and transition to a middle income nation.

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Who is in charge of Uganda’s economy?

The struggle for decolonization focused on political independence, hoping that economic sovereignty would automatically follow. But it did not. Post-independence economic challenges were thus attributed to inherited colonial economic structures. African governments were forced to find a solution and attain economic independence. In 1979 African leaders adopted the Monrovia Declaration of Commitment on guidelines and measures for national and collective self-reliance. In 1980 African leaders once again adopted the Lagos Plan of Action to attain self-reliance with support of the international community. At the United Nations General Assembly Special Session on Africa in 1986, it was resolved that Africans have primary responsibility for the development of Africa. In theory, Africans became economically independent to determine the continent’s course of economic and social development.

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Uganda’s diverse society needs diverse leadership

When Ugandans meet formally or informally, the political economy, future and diversity of Uganda come up. What has been recognized is that Uganda’s diversity is an asset and a strength that should be utilized properly to bring about equitable distribution of the benefits of that diversity. Many times, as discussions progress, my mind races back to what Kaunda former president of Zambia said about diversity in his country. He observed on several occasions that although merit is important in appointments and promotions, he had to use it carefully to meet the needs of Zambia’s diverse population. He stressed that in trying to strike regional balance, he picked the best trained and experienced from each region so that he maintained professionalism and regional balance.

In Uganda the concept of merit has been applied differently under the NRM government since 1986 with unanticipated adverse outcomes. There are cases where merit considerations applied by the appointing authorities have resulted in top or strategic positions going to people from the same family, same ethnic group or same region. The western region is believed to have benefited more than any other in Uganda. However upon closer scrutiny you find that within the western region some families or ethnic groups have benefited more than others. Further analysis has demonstrated that merit was not even strictly applied causing discomfort in various quarters.

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Why has NRM rejected Keynesian economics when Uganda needs it badly?

What John Maynard Keynes wrote is that when a country is experiencing serious economic difficulties including unemployment the state should step in and increase spending to stimulate the economy, reduce unemployment which in turn create effective demand for goods and services and ultimately pull the economy out of the recession. Keynes advice was well received by politicians because it helped them deal with economic and social challenges that would have created political problems for them at the next elections. Governments have used Keynesian advice and it contributed significantly in tackling the economic depression of the 1930s and after WWII. Since the recession that began in 2007, governments around the world have intervened in national economies with stimulus packages.

In view of the deteriorating economic, social and ecological conditions in Uganda one would have expected the NRM government to fully embrace the Keynesian model and actively intervene in the economy especially as the country is preparing for multi-party elections early in 2011. As noted in a separate article the introduction of the five year development plan in April 2010 did not signal government determination to intervene in the economy. It appears this was a political game to hoodwink voters after which the plan will gather dust in the ministry of finance, planning and economic development.

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