Let me begin with this statement to clear the air hopefully once and for all. The purpose of my many years of research and writing especially about Uganda is not to undermine NRM’s efforts – as some have suggested – but to draw lessons about what has gone right and wrong so that appropriate adjustments can be made. Before I started publishing I had communicated my concerns regularly since 1986 with senior government officials in the cabinet, public service and public sector. So they knew my thinking but chose to ignore it. I have focused on President Museveni – not as a person – but as a policy maker who has dominated and served as spokesperson on Uganda’s political economy affairs (I have also commented on statements by the First Lady – not as a person – but as a public official. Ugandans should understand that when you become a public servant, you should expect that what you say and write will be commented upon, hopefully constructively. So when you get comments that make you uncomfortable don’t complain or use surrogates to do it for you which they don’t even do well. When the heat becomes unbearable, the best thing to do is to step down).
Uganda’s political economy has been dominated by Museveni who has micro-managed the country. Consequently, there is no other Uganda official to comment about. Frankly, I don’t know what ministers do because they don’t say or publish much. Even the minister of finance who reads the budget speech in parliament every year represents the president. I always wonder when I hear Museveni blaming his ministers, senior staff and parliament for Uganda’s problems when he is the one person directing the country. He should accept responsibility for commissions and omissions. Besides Museveni statements, much of the information about Uganda comes from IMF and the World Bank. I have made comments on some statements by these two institutions and posted them at www.kashambuzi.com. Let us return to Museveni’s statement.
“In the beginning of 1998 a confident Museveni told journalists: ‘There isn’t anything we can’t solve. The big problems are behind us’”(Searching for Peace in Africa 1999). In a 1991 interview with Ad’Obe Obe, Museveni had confidently stated that “Uganda will be an industrial power in 15 years. I have no doubt about it. There’s no doubt because nothing can stop us”(Africa Forum Vol. 1. No. 2, 1991).
The period 1986 through 1989 was devoted to rehabilitation work and internal struggle between officials in the ministries of Planning and Economic Development, and the Ministry of Finance about the kind of economic model Uganda should adopt. Those who favored shock therapy triumphed over those who wanted gradual and sequenced version of structural adjustment to avoid too much suffering from implementation of austerity measures. The officials in the ministry of Planning and Economic Development won the contest and Museveni joined them. Institutional and personnel changes were made. The ministry of planning and economic development was swallowed by the ministry of finance and the staff of the ministry of planning took over the new ministry of finance, planning and economic development. This was done presumably to end squabbles. A new minister and a new governor of the central bank were appointed. In December 1989 a conference was held in Kampala for parliamentarians and other stakeholders to endorse the new development model which trounced the popular and balanced ten-point program that had put Ugandans at the center of economic growth and development. The new program would focus on economic growth, inflation control, balanced budget, staff retrenchment and subsidy elimination or drastic reduction, export diversification and opening Uganda markets to imports of goods and services. State intervention in the economy would be dramatically reduced. It was hoped that trickle down mechanism would equitably distribute economic growth benefits by class and region which sadly has not happened, leaving the level of absolute poverty unacceptably high.
On January 26, 1990 Museveni made a historic speech at the 4th anniversary of the NRM administration. He stated that the first phase of the revolution which focused on short–term rehabilitation programs had come to an end. The second phase would focus on long-term measures to restructure – repeat restructure – the economy in order to achieve “our fundamental objective of creating an integrated, self-sustaining, independent national economy in a secure economic environment” (Museveni 1990). Therefore NRM’s achievements since the 1990s should be measured against the extent to which Uganda’s economy has been restructured.
Until the beginning of the 1990s, the neo-colonial economic structure had reduced Uganda to a producer and exporter of raw materials in an ‘enclave’ economy. Under NRM, Uganda’s economy would be diversified, industrialized, interlinked and independent. The linkages among agriculture, manufacturing and technology would produce the engine to drive Uganda’s economic restructuring. That was Museveni’s simple and clear message to the nation and the world when he became president. He had earlier stated that his was a fundamental change that would metamorphose Uganda and its people.
It is true that when Museveni addressed journalists in 1998, Uganda’s economy was growing at a rate averaging seven percent having attained a growth rate of ten per cent in the mid-1990s. Museveni had been hailed as the architect of Uganda’s success story, making him the darling of the west. That may be why he confidently stated that “There isn’t anything we can’t solve”. He set out to solve the challenges of raw material exports, industrialization of Uganda, ending enclave economy, establishing interlinkages among sectors and creating an independent economy. At the time of his address to the journalists in 1998, none of these had been achieved. As someone observed, Museveni may have spoken too soon or he had other areas in mind. Let us see how much restructuring has been accomplished since he addressed journalists in 1998.
The colonial and post-independence economy before 1986 focused on areas that produced export commodities of cotton, coffee, tobacco and tea, virtually leaving the rest of the economy on its own. This was the enclave economy NRM inherited. Museveni wanted to change all that by commercializing the entire agricultural economy. However, in practice, Museveni has made Uganda a more ‘enclave’ economy than before. The corridor between Kampala and Entebbe has become the economic growth ‘enclave’, generating some 70 percent of Uganda’s Gross National Income (GNI) with a population of about 2 million out of the total population of 33 million.
Contrary to rhetoric, Uganda has remained basically an exporter of raw materials. NRM accepted Uganda to be categorized as a country with a comparative advantage in agriculture and exporter of raw materials. The NRM policy has been to increase production of traditional crops of cotton, coffee, tea and tobacco and to diversify into non-traditional exports of fish, beans and timber in raw or semi-processed form. Basically, Uganda’s economy has remained an exporter of raw materials with low unit value and foreign exchange earnings which fluctuate randomly depending on weather conditions and commodity prices on the world market.
Because Uganda’s comparative advantage is agriculture in a globalized economy of free trade, Uganda abandoned the emphasis on industrialization. It is exporting raw materials in exchange for manufactured imports. NRM adopted a policy of free trade and competition, resulting in Uganda products outcompeted by cheap (second hand items like clothing) or subsidized products. Some industries closed down, others relocated to other countries or are operating below installed capacity and many of them are just packaging imported parts into finished products. There is thus little value added and limited linkage with the rest of the economy and job creation capacity. It must be understood by present and future economic policy makers that no country has developed without a dynamic manufacturing sector and without protecting infant industries in the initial stages. Uganda therefore cannot hope to change the economic structure and end poverty without industrialization which adds value, stimulates the service sector and creates jobs.
Regarding technology, Museveni (1986) was emphatic about what he wanted. “In short we reject the notion that we should be dependent on others for all our technology. To do otherwise, is the best recipe for perpetual subservience”. I think it would be fair to say that technology development is an area where Uganda has done very little, if at all. Uganda is therefore still very much dependent on foreign technology. Ugandans who acquired technical skills and would have helped in this area were directed by Museveni to stay in the diaspora. It is therefore not surprising that very little has been accomplished in technological development.
It must also be understood that restructuring Uganda’s economy was meant to provide goods and services and jobs in abundance in order to eradicate poverty. In his writings and statements, Museveni rejected the notion of “poverty reduction”. NRM captured power through the barrel of the gun not to reduce but to eradicate poverty. However, according to the latest polling report, 82 percent of Ugandans are poorer. Thus, Museveni has not achieved any of the elements in his “Building an independent, integrated and self-sustaining economy”.
As an aside, according to highlights of his June 7, 2012 address to parliament on the State of the Nation, Museveni as always reported on the status of the economy which had been projected to grow at 6.6 percent in 2010/11 financial year but declined to 5.6 percent. The highlights of his speech I have received do not show figures on poverty, unemployment, nutrition, maternal mortality etc that would reveal the health of the economy. Demonstrations may have contributed to the decline in the rate of economic growth. That is why we encourage peaceful demonstrations to intensify and make Uganda ungovernable. NRM hands are tied. They can’t use force on peaceful demonstrators because the world and ICC are watching. Non-violent resistance is a good weapon Ugandans have to destabilize NRM regime. So use it wisely and strategically to achieve maximum results with minimum casualties. Museveni’s cabinet of sleepy ministers won’t be of much help. If ministers can sleep so comfortably when the president is addressing the nation and the world how much do they sleep in their offices. And when do they work, if they work at all. The whole world is watching pictures of sleeping top Uganda leaders. How can they expect their supporting staff to perform when they are sleeping? Or do they have time to supervise them? No wonder Uganda has slid to the bottom in East Africa. It is a big embarrassment to all Ugandans to be led by such a team. It is not surprising that Museveni attends to all problems because his ministers sleep all the time. But it is his fault because he appoints them. Last year was the same.
To conclude, Uganda’s economy has remained neo-colonial, governed by the invisible hand of the market forces and laissez faire policies and limited state intervention. Government assessment of Uganda’s performance has remained focused on economic growth and inflation control. Issues of economic restructuring, physical and institutional development, environmental sustainability, social systems and growth with equity were abandoned.
In preparing the National Recovery Plan (NRP), United Democratic Ugandans (UDU) assessed NRM’s economic achievements and failures. The Plan has been designed to combine public and private sectors in a mutually reinforcing and strategic manner to overcome the many shortcomings in the NRM programs. UDU is ready with a Plan and staff for a new dawn. The Plan is accessible at www.udugandans.org for easy reference.