Uganda’s Political Economy

First seminar on Radio Uganda Boston

This is Eric Kashambuzi in New York, United States of America.

Fellow Ugandans at home and abroad, friends and well-wishers welcome to this first seminar on Uganda’s political economy. The seminars will be apolitical.

We thank Radio Uganda Boston for launching this new program of seminars on the interaction between political decisions and economic change and vice versa.

This political economy 101 is primarily designed for the general public. However, professionals are welcome to participate and enrich the debates. During the seminars to be conducted once a month initially we shall show how political decisions affect economic change and vice versa.

I will lead the seminars which are intended to be interactive and in response to popular demand.

We therefore encourage all of you to participate and make your voices heard as we seek a new political economy model suitable for Uganda in the next 50 years and beyond.

The governance formula including merits and demerits of military and civilian governments suitable for Uganda will be part of this discussion. Military regimes or regimes led by military leaders have so far proved unsuitable.

Discussions are already underway regarding the merits and demerits of federalist and unitarist system of government.

So far the contentious unitary system of government based on a hierarchy or a tier arrangement of decentralization of powers while retaining control at the national level exercised by the central ministry of local government has not served Uganda well.

A federal system in which the national government shares power with local governments (states, provinces, regions or districts) and local government powers and authority to make final decisions over areas in their jurisdiction are protected by the constitution appears to offer a better alternative to Uganda in the decades ahead.

We shall also discuss the impact of political economy in neighboring countries on Uganda.

There has been a tendency to treat politics and economics separately which is not correct because the two subjects affect each other and together affect other areas of human endeavor.

For instance it is known that countries that experience absolute poverty, food shortages and unemployment are politically unstable and occasionally engage in civil wars.

Unemployment, inflation, energy and food shortages contributed to the revolutions in France in 1789, in Russia in 1917 and in Ethiopia in 1974 that overturned political systems there.

In Uganda we are witnessing how economic hard times dominated by high and rising youth unemployment, over 50 percent absolute poverty and hunger have generated demonstrations and strikes with political ramifications. And to maintain political stability NRM is spending more money on security than on development.

An assessment of Uganda since colonial times has indicated quite clearly how political decisions under colonial rule and since independence have affected economic and social progress and economic structure that existed in pre-colonial times and how economic difficulties have triggered political tremors that for instance forced Amin to chase away the Asian community and invade a neighboring country.

In this first seminar, we shall summarize how political and economic decisions have turned a once prosperous and promising country into a third world and retrogressing state that can’t feed, clothe, shelter, prevent or cure disease, employ and educate her people adequately. Uganda images in the news speak volumes about how failed political decisions have undermined economic and social progress and environmental management.

The Uganda that Winston Churchill and other European visitors visited and reported upon with admiration no longer exists.

Churchill wrote, inter alia, “I have seen in Uganda a country which from end to end is a garden – inexhaustible, irrepressible and exuberant fertility upon every side. … The scenery is different, the climate is different and most of all, the people are different from anything elsewhere to be seen in the whole range of Africa”.

Other visitors described Ugandans as the Chinese or Japanese of Africa because of their enterprising and achievement spirit.

Instead of becoming an enterprising and progressive nation, Uganda has sunk into an agrarian culture using primitive tools and obsolete methods and human insecurity characterized by lack of freedom from want, freedom from fear and freedom to live in dignity.

Uganda has become a country to run away from rather than towards as the brain drain of the most highly educated and vastly experienced Ugandans demonstrates.

The situation in pre-colonial times was different and promising in many ways. Communities that were later compressed into Uganda engaged in a wide range of economic activities according to their resource endowments or comparative advantage.

A wide range of iron, salt, cloth, clay, fiber and wooden manufactured goods were produced and exchanged for foodstuffs including fish and livestock products in local and regional markets in the Great Lakes region.

Apart from periodic famines caused by natural factors such as drought or pests like locusts and/or man-made such as wars, Ugandans ate adequate and balanced diets and developed immunity against a wide range of diseases.

The comparative advantage served Uganda well. The absence of external trade meant that what was produced was consumed in the Great Lakes region. The economic structure balanced manufacturing and agricultural enterprises.

The presence of iron tools such as axes, machetes, spears and hand hoes enabled clearance of vegetation and cultivation of a wide range of crops and hunting wild game that diversified the protein content of diets. The production of surplus food facilitated specialization into non-agricultural activities and traded with food surplus producers.

The colonial administration came to Uganda with a different political economy agenda that changed Uganda’s economic and demographic dynamics.

It created a different type of comparative advantage that required Uganda to specialize in agricultural produce of cotton, coffee, tea and tobacco it never grew before.

The colonial administration wanted raw materials to feed her expanding industries and markets for her surplus manufactured products and foodstuffs for its expanding population.

Uganda was thus turned into a producer of cotton, coffee, tea and tobacco and exporter of these commodities in raw form. Britain enjoyed a comparative advantage in manufacturing Uganda’s raw materials into finished products some of them exported back to Uganda at very high prices because of value added resulting from various stages of processing.

This new comparative advantage was accompanied by major changes in Uganda including in land tenure and use and a new class of landlords. Below are some of the changes.

First, some parts of Uganda starting with Buganda were turned into producers of export commodities such as cotton and coffee that replaced the production of food crops.

Second, Buganda alone could not supply the labor required to produce food and export crops. To generate adequate labor parts of Uganda particularly in the north and west were designated labor reserve from where to hire cheap labor.

Third, to get a constant supply of labor, the colonial administration imposed a tax paid only in cash. To push men out of their homes and pull them into export growing zones wages were set low in labor reserve areas and high in export crop growing areas.

Fourth, the pre-colonial division of labor between men and women was undermined with serious repercussions in food production and other activities where culture was rigid as shown below.

Under the pre-colonial division of labor, men were responsible for clearing vegetation and women for planting, weeding and harvesting crops. In the absence of men clearing bush was not done forcing women to grow food on the same plot season after season thereby reducing food productivity and total production, hence food shortages. Hunting carried out by men that provided meat also suffered and the consumption of protein was undermined.

Cassava, a poor crop in many nutrients that grows well in poorer soils and drier areas replaced nutritious foodstuffs like millet and sorghum. Bananas which also lack many nutrients but demand less labor replaced nutritious beans, millet and sorghum.

Thus consumption of non-nutritious foodstuffs increased and gave birth to malnutrition which became so serious that the colonial administration feared national insecurity with some political consequences. It developed fisheries for the sole purpose of providing an affordable source of protein.

Nutrition centers were also established including Mwanamugimu at Mulago Hospital to treat under-nutrition cases especially children and women. The latter were trained in the preparation of nutritious meals together with safe drinking water and general hygiene. Mothers’ Unions served as an integral part of this program that kept mortality low.

Fifth, the demand for labor exceeded what Uganda could supply, requiring importation of men workers mostly from Rwanda and Burundi on a temporary basis beginning in the 1920s. Many of them stayed permanently.

At one time Buganda the main export crop growing region attracted most migrant workers affecting the sex ratio with men exceeding women. Under normal circumstances women exceed men. At one time some 40 percent of Buganda population was made up of Banyarwanda.

When UPC government repatriated Kenya workers to create jobs for unemployed Uganda workers, this economic decision turned into a political tool that Amin used as one of the 18 reasons for overthrowing Obote I government. It was reasoned that by expelling Kenyan workers, Obote had damaged neighborly relations with a member of the East African community.

Sixth, in many cultures roofing of houses is the sole responsibility of men and it is taboo for a woman to take on that role. During long absence of men from home working for tax money, many houses could not be thatched and leaked when it rained with all health hazards. Here is a good example of how an economic decision can affect areas besides politics.

Seventh, the opening up of Uganda to cheaper manufactured products disadvantaged domestically manufactured ones. For example, metal source pans, plates and spoons replaced clay ports, dishes and wooden spoons. Calabashes were replaced by metal mugs, wooden combs by plastic ones and cow ghee by cooking oil. Cotton fabric replaced quality bark cloth.

In the end Uganda’s diversified and dynamic manufacturing enterprises withered away together with human skills that had been developed. Uganda was reduced to an agrarian society despite efforts made since the 1950s to revive the industrial sector. Neo-liberal economics enhanced under the NRM government have speeded up Uganda’s de-industrialization process.

It is important to underscore that no country has developed without a manufacturing base that creates jobs, adds value and promotes backward and forward linkages. The service sector that NRM has championed tends to be labor-saving with few job opportunities.

Export of cheap raw materials in exchange for expensive manufactured products has created an endemic unfavorable terms of trade for Uganda making it impossible to meet import demands of consumer and producer goods.

Pre-colonial commercial networks in the Great Lakes region were severely curtailed as trade was directed to the outside world. The current attempt to establish East African economic integration is recognition of this shortcoming.

Increased and diversification of agricultural commodities has had serious ecological consequences as large swathes of land have been cleared of vegetation. Deforestation and overfishing have also increased.

Clearance of vegetation to grow export crops has led to soil erosion by strong winds and heavy tropical rainfall thereby reducing productivity in the absence of fertilizer application. Thermal and hydrological regimes changed. The introduction of contour terracing helped in some steep slopes like in Kabale district.

Political pressure for economic and social development after World War II forced Britain to undertake measures that promoted economic growth, improved nutrition and hygiene as well as supply of vaccination and antibiotics that reduced death rates while birth rates remained high resulting in rapid population growth and labor force that the agricultural sector could not adequately accommodate.

This political pressure to develop colonies and improve standard of living there resulted in Britain’s launching of an industrialization program and protection of infant industries against unfair competition by erecting high tariff walls.

Prospects for finding jobs and other amenities in the industrial and urban sectors began the process of rural-urban migration that has increased since independence.

While peasants produced export crops colonial economic policies excluded them from marketing and processing activities which were reserved for Asian and European communities. Ugandans resented this discrimination, opening the door for protest that generated into formation of political organizations and parties and demand for independence. Some of the leaders of these organizations were detained in Uganda prisons and the most difficult sent into exile.

These examples have demonstrated how political decisions translated into economic policies transformed Uganda’s economic structures, societies and ecological conditions. On the other hand demand for fair play in commercial and industrial activities triggered political forces that contributed to the end of colonialism.

To sum up, Uganda was divided into areas of production and labor reserves. Economic activities, social services, infrastructure and institutions were concentrated in the Jinja-Kampala-Entebbe-Masaka corridor.

Ugandans and outsiders flocked to this corridor in search of jobs and many of them stayed permanently affecting the demographic dynamics particularly in Buganda, a situation that has been magnified by refugees mostly from Rwanda since 1959 social revolution there.

Independent Uganda inherited a distorted economic and social structure that favored the central and to a certain extent eastern regions. This can be seen in education and employment figures for 1960 and 1967 respectively.

In 1960 while Buganda had 16.3 percent of the total population, it had 29.0 percent of her children in secondary schools and 46 percent of students at Makerere College. In 1967, private sector employed 75,000 Baganda and public sector 34, 800; Eastern region had 34,000 in private industry and 24, 700 in public service; Western had 31,800 in the private industry and 21,600 in public service while Northern had a mere 9,300 in private industries and 10,700 in public services (V. A. Olorunsola 1972).

UPC and Obote I tried to lay a level playing field for equal opportunity by investing more in areas that were lagging behind especially in education and health infrastructure. Some Ugandans especially in the central region interpreted this move as discrimination and a deliberate political calculation to reduce their political and economic voice. Their resistance contributed to the constitutional and political crisis of 1966/67.

Convinced that the political battle had been won, Obote launched an economic “Move to the Left” in an attempt to reform Uganda’s economy by launching a mixed economy model whereby the private and public sectors would share the economic platform according to their comparative advantages.

Some Ugandans and those involved in Cold War politics saw it differently as an attempt to introduce socialism or even communism and would not allow it in Uganda. What followed was a military coup of 1971 that brought Amin to the presidency for which he didn’t have what it takes, but some Ugandans and his western backers were happy. They put the “Gentle Giant” where they needed him the most in the presidential seat to protect their economic interests.

However, it didn’t take long to realize that they had made a wrong choice. With the honey moon over in a few months, the political temperature rose as the economy deteriorated. Amin found an economic scapegoat in the Asian community to solve his political problem. He accused Asians of milking cows they didn’t feed and gave them a deadline of 90 days to leave Uganda. Amin needed their property to distribute to his supports and buy popularity. He hoped that in the meantime God would visit him again in a dream and advise him how to accelerate economic growth and save his regime and his own skin as he did in 1971.

But God didn’t come again and the economy got out of control. Amin took a politically inspired decision and ordered that any piece of unutilized land should be brought under cultivation regardless of owner to boost economic growth and provide the needed jobs, goods and services in order to stabilize the political situation.

But the environmental price was high. Fragile ecosystems and wetlands were invaded and vegetation cleared en masse for crop cultivation or ranches, initiating a process of de-vegetation unseen in Uganda history.

Notwithstanding, the economic situation didn’t improve to the satisfaction of the people.

Having run out of domestic options Amin threatened to invade Kenya and reclaim Uganda land but eventually settled on Tanzania hoping to rally Ugandans behind him and survive a little longer. He underestimated the resilience of Tanzania and especially the determination of Nyerere who responded with full force and chased Amin out of the presidency and Uganda into exile in Saudi Arabia via Libya.

This is a good case of an attempt to divert economic problems that turned into an ugly political outcome.

The 1980 elections were rejected by the losers who waged a destructive guerrilla war in the Luwero Triangle that destroyed not only human lives, but economic and social infrastructure that after 26 years of the end of the war restoration isn’t complete.

NRM has used economic means including refusal to create an enabling environment to find jobs for unemployed youth but also by neglecting agriculture where the majority of Ugandans earn their livelihood with a view to weakening them politically so they don’t replace NRM with an opposition party. Building a strong security apparatus is designed to keep Ugandans powerless and voiceless through violation of human rights and fundamental freedoms.

But Museveni who claims to be a student of history doesn’t appear to have absorbed the lessons namely that military hardware and soldiers didn’t save the Bourbon and Romanov dynasties and the Ethiopian imperial regime that were better supplied with guns and soldiers.

When poverty, unemployment and general mood of dissatisfaction is order of the day guns and soldiers don’t work. We have recently witnessed the same in the Arab Spring revolutions.

Continuing to purchase arms for political gains instead of investing in development putting the people at the center is a recipe for disaster in Uganda. NRM credibility at home and abroad is eroding very fast, made worse by images of suffering coming out of Uganda that has become very corrupt and sectarian with over-concentration of economic power in a few households.

The political and economic forces are on a collision course and Ugandans have become enlightened and will continue to ask questions until they get satisfactory answers.

Museveni hasn’t succeeded in using his knowledge of political economy to balance the demands for political stability and economic growth with equity. The post-NRM regime should aim at striking a balance between the demands for politics and economics to guarantee stable and sustained political economy.

Leaders should be chosen on the basis of the extent to which they understand the economic and political forces within and without Uganda.

The next seminar will examine the impact of political economy of neighboring countries on Uganda. The date will be announced in due course.