Uganda’s rapid economic growth still falls short
Because of pressure from the donor community which did not believe in a mixed economy model with elements of socialism, the National Resistance Movement (NRM) government decided to pursue a neo-liberal economic growth model based on the Washington Consensus – also known as structural adjustment program (SAP). The decision was formalized in an agreement with the International Monetary Fund (IMF) in May 1987. It was consolidated at the seminar of parliamentarians and other stakeholders in December 1989 after a period of intense puasuasion.
Since then, the government has stressed economic growth, low inflation, balanced budgets, export diversification and privatization of public enterprises. In return, the government became the darling of the donor community, receiving generous donations in money and experts and debt relief. The export-oriented economy would be driven by the private sector and the market mechanism and the government would provide an enabling environment for that purpose. The program would focus on the productive sectors which excluded the social ones such as education, healthcare including water and sanitation, food and nutrition security, housing and employment. Those in government that opposed these arrangements or favored a gradual approach were sidelined. Senior staff changes and reorganization of key ministries were undertaken to signal a new dawn. The ministry of finance and central bank were empowered to run Uganda’s economy.