Tag Archives: sap

As preparations for 2011 elections enter the final phase, it is appropriate to examine NRM’s successes and shortcomings and make recommendations for the next government.

NRM government dropped the ten-point program in favor of stabilization and structural adjustment program (SAP) following an agreement with the IMF in 1987. Prior to the signing of the agreement, the government ran the economy without external support and faced tremendous problems including inflation which ran into triple digits. In this environment, the government had no bargaining power and swallowed all IMF and the World Bank conditionality including employing external staff and advisers to direct the design and monitor the implementation of SAP.

From the start it was known that the first three to five years of structural adjustment would be very costly in social terms as the government adjusted its resources to make savings and repay its debts which were the main objective of the program. The comforting rhetoric was that the costs would disappear and benefits of economic growth would trickle down equitably to all Ugandans. Meanwhile Ugandans were requested to tighten their belts even tighter having lost thirty percent of their savings through the conversion of the old into the new currency. It was also understood that the role of the state in the economy would be significantly reduced to permit unhindered operation of the private sector. Resource allocation would be determined by the invisible hand of the market forces. In short neo-laissez-faire would drive Uganda’s economy and distribute the benefits.