In Uganda, the problem is not government revenue. Since 1987, Uganda government has had adequate resources from various sources including donations, loans, remittances, debt relief, customs and tax revenue and sale of public enterprises. NRM government has received over $31 billion in donations alone. Uganda does not suffer a shortage of trained and experienced human power either. In fact Uganda has become an exporter of trained personnel. So what is the problem? The problem is President Museveni’s agenda contained in the 50 year Master Plan which is diametrically opposed to what we seek to do to achieve economic growth and development and improved the standard of living for all Ugandans – not to build schools, clinics and promote economic growth without equity. Museveni’s plan is to enrich and empower Bahororo people for control of Uganda in perpetuity. It is incredible but very true! This point must be repeated until it is understood very clearly by all Ugandans, friends and well wishers. Failure to understand this point will undermine all we are trying to do to make Uganda a better place for all citizens. It takes courage and risk to speak up like this but it has got to be done to save the “Pearl of Africa” from colonization – again. The two principle elements that underpin the Master Plan are the deliberate impoverishment of Ugandans by denying them quality education, employment and healthcare including nutrition and access to development resources such as land (without land, education and job you cannot consider yourself a full grown and respectable person) and credit as well as control of the instruments of repression, like the military. It is believed that impoverished, desperate and vulnerable people are easy to govern and they respect leaders without question. They have no knowledge of their rights and freedoms and cannot demand what they don’t know. That is why the middle class that has a questioning mind is declining through unemployment, retrenchment and brain drain. For easy reference, the Master Plan was posted on Ugandans at Heart Forum. Therefore it will not be summarized here. So the first step in solving Uganda’s political economy challenge is a recognition of the principle problem namely the implementation of the 50 year Master Plan led by President Museveni which has been facilitated by staff Museveni has hired and the neo-liberal model NRM adopted in 1987. Let us review the last two points.
Museveni has relied on people who are either loyal or have been placed in positions that make them unable to exercise their full expertise and experience and advise the president appropriately. If you have closely followed Museveni’s appointments in senior and strategic positions, you will realize that he has relied very heavily on medical doctors, lawyers mostly trained in Tanzania (where Museveni did his undergraduate studies) and political scientists. To the best of my knowledge, no economists have been appointed in the top level of government. Contrary to earlier information that Museveni had studied economics, evidence available to me indicate that he either studied political science (Back cover of Consolidating the Revolution by Yoweri K. Museveni 1990) or political economy (Africa Forum Vol. 1. No. 2. 1991).
Here are a few illustrations of key players in Museveni’s administration since 1986. The list is not exhaustive. Let us start with medical doctors. Kisekka (RIP) prime minister then vice president; Kazibwe vice president and minister for agriculture and Bukenya vice president. Kiyonga minister for health, finance and defense; Rugunda has served virtually everywhere including as minister of foreign affairs. At one time ministers of state for internal affairs and defense were medical doctors. Lawyers have included Wapakhabulo (RIP) Ssekandi and Kadaga as speaker of parliament; Ssekandi and Mbabazi as vice president and prime minister respectively. Kategaya and Mushega have served in key positions as first deputy prime minister and Secretary-General of the East African Community. Political Scientists: Nsibambi served as prime minister. Key experts and consultants in structural adjustment have been political scientists.
Although I favor a multi-sector approach to development to establish multi-sector forward and backward linkages, I believe that given that Uganda’s challenge is largely in the province of economics, economists as policy makers should have been closer to the president, cabinet and parliament. Museveni’s first minister of finance was a trained economist but he was dismissed before he had a chance to influence policy. He was replaced by a medical doctor. Subsequent economists who served as ministers of finance have also largely stayed for a short time to make an impact on policy formulation agenda.
In 1987 NRM adopted a development model that did not suit Uganda’s conditions. The model was kept intact until it was dropped in 2009. The model focused on inflation control, balanced budget, export orientation and diversification, economic liberalization, free trade and privatization of public enterprises regardless of the level of employment, constraint on investment (interest rates were very high and unaffordable) and nutrition security of Ugandans. The invisible hand of market forces and laissez faire capitalism were chosen as the engines that would drive Uganda’s economy unregulated, create jobs and distribute the benefits of economic growth to all classes and regions through a trickle down mechanism which did not work but favored those already rich instead. The government has played a minor role even in areas traditionally assigned to it such as infrastructure and institutions.
When NRM took over in 1986, Uganda was in a state of economic crisis. There was no foreign exchange and inflation and budget deficits were high. So it made sense to tighten the belt and clean up the house. But this was supposed to last three to five years at most. Institutional and personnel changes were made to accommodate the new development paradigm. The two ministries of finance, and planning and economic development were merged into one that became the ministry of finance, planning and economic development with the department of planning and economic development working under the shadow of the department of finance. The minister of finance and governor of the central bank were removed and replaced with those that had some idea or were willing to implement the shock-therapy or severe version of neo-liberal economics (also known as structural adjustment program or Washington Consensus). These changes made sense for the short term horizon. Removal of subsidies on agriculture, education and health etc and retrenchment of some civil servants was tolerated albeit very painful. Ugandans had been asked to tighten their belts if only for a short time as an investment so that the future would be much better for everyone. Food exports increased at the expense of domestic supplies to earn sufficient foreign exchange to be able to import what was needed for consumer and development purposes. Donor funds and remittances increased and improved foreign exchange reserves.
Then massive corruption crept in. Instead of government revenue going into development of infrastructure, education and healthcare that would contribute to poverty reduction and eventually eradication as the president was fond of stressing at international summits, it disappeared into private pockets. And because of this drain, there was not enough money to meet basic needs of the majority of Ugandans which fitted in very well with the 50 year Master Plan of keeping Ugandans impoverished and vulnerable. In 2009 structural adjustment program was abandoned having failed to deliver and was replaced by a five year development plan which has not seen light of day or not much because no programs had been presented by line ministries or no money was available (believed to have disappeared into NRM election campaigns) when programs were ready. So the plan was dead on arrival as I had predicted in my article in the Observer (Uganda). Ministries especially of finance and its central bank have continued to largely advocate inflation control, economic growth and unregulated functioning of market forces and laissez faire capitalism as though the Washington Consensus paradigm was still alive in Uganda. It was abandoned worldwide in 2009 and replaced by a neo-Keynesian model popularly known as public and private partnership. To resuscitate Uganda’s economy and put it on a high and sustained growth rate of at least 9 percent annually to meet the Millennium Development Goals (MDGs) and sustainable path, we recommend the following actions which should be implemented without delay.
First, the 50 year Master Plan must be dropped forthwith and monitored closely to ensure it does not reemerge in any disguise. Unless this first step is taken, Uganda will not develop and end poverty and its attendant ills no matter how much money is pumped into government coffers.
Second, a recovery plan needs to be developed based on what is on the ground to address real problems. It should be devoid of ideology. It must reflect reality. United Democratic Ugandans (UDU) has already prepared a well received National Recovery Plan (NRP) accessible at www.udugandans.org. The Plan was sent to the government through the ministry of foreign affairs and to development partners operating in Uganda including the World Bank and IMF. The government has not acknowledged receipt of the Plan. There is no need to reinvent the wheel.
The Plan differs fundamentally from what NRM has been implementing that has not worked. First, the Plan has restored the central role of agriculture and rural development in Uganda’s overall development unlike NRM that has focused on the development of Kampala and on services mostly foreign owned and capital intensive or hiring foreign workers. Second, the Plan has restored the important role of manufacturing industry starting with agro-processing. No country in the world has developed without a dynamic manufacturing sector (South Korea which moved quickly from one of the poorest to an advanced country status in a very short time focused on export of manufactured products. It also transformed agriculture and achieved universal literacy very early and a high proportion of students attended secondary schools). Developed countries that had de-industrialized their economies in pursuit of services as the engine of growth are re-industrializing having recognized the role of industries in employment and economic growth. Third, the Plan has given pride of place to social sectors of education, healthcare, food and nutrition security and housing. The Plan has also emphasized balancing rural and urban development to minimize problems at both ends (urban areas saddled with unemployed people in slums and rural areas deprived of economically active age groups), and sustainable development through better management of natural resources. Fourth, the Plan has designed East African economic integration to serve national needs first through appropriate infrastructure, institutions and joint programs (Lake Victoria development) and a foreign policy that will promote good neighborly relations and protect Uganda interests and sovereignty. Supranational institutions are de-emphasized in the Recovery Plan.
To implement these policy proposals, we recommend a transitional government that will accommodate all Ugandans many of whose views have been ignored because they are in the opposition camp. Opposition or ideologically different or not they are Ugandans and have a right to be listened to and heard. Thus far, ideas from those outside of government have been ignored, seen as efforts to sabotage the work of the government. Time has come when all Ugandans need to join hands in a common effort to save Uganda from falling down a steep cliff. Winner-take-all mentality needs to be buried and replaced by mutually acceptable arrangements or those kept out will find a way of getting in because that is how the laws of nature operate. The Middle East situation should serve as a wakeup call for those who still underestimate the potential of Ugandans to act decisively at an appropriate moment. Preparatory work is underway for those who care to listen and to hear the voice of the opposition. UDU is a move in that direction and we are active at various levels.
Finally, new institutional and personnel arrangements need to be introduces as was done at the start of structural adjustment in 1987. For a start, the ministry of finance and planning should be split so that the new ministry of planning and economic development has a full minister to take charge of planning, economic development while the ministry of finance mobilizes resources in line with the proposed development plan rather than set a ceiling for planning purposes. Economists need to be given visibility at the highest level of policy formulation and implementation. Uganda now needs economists versed in neo-Keynesian economics that combines private sector working closely with government in a mutually reinforcing manner. Changes will need to be taken at the ministry of finance and central bank just as it was appropriately done in 1987 following the introduction of structural adjustment program. The world has a neo-Keynesian development model (all you need to do to confirm this is to visit book stores to see Keynes books). Uganda will be the loser if it does not adopt the model and adapt it to conditions on the ground and revise it as appropriate. Hopefully, these policy proposals will receive government and development partners’ support.
ERIC KASHAMBUZI
Museveni has relied on people who are either loyal or have been placed in positions that make them unable to exercise their full expertise and experience and advise the president appropriately. If you have closely followed Museveni’s appointments in senior and strategic positions, you will realize that he has relied very heavily on medical doctors, lawyers mostly trained in Tanzania (where Museveni did his undergraduate studies) and political scientists. To the best of my knowledge, no economists have been appointed in the top level of government. Contrary to earlier information that Museveni had studied economics, evidence available to me indicate that he either studied political science (Back cover of Consolidating the Revolution by Yoweri K. Museveni 1990) or political economy (Africa Forum Vol. 1. No. 2. 1991).
Here are a few illustrations of key players in Museveni’s administration since 1986. The list is not exhaustive. Let us start with medical doctors. Kisekka (RIP) prime minister then vice president; Kazibwe vice president and minister for agriculture and Bukenya vice president. Kiyonga minister for health, finance and defense; Rugunda has served virtually everywhere including as minister of foreign affairs. At one time ministers of state for internal affairs and defense were medical doctors. Lawyers have included Wapakhabulo (RIP) Ssekandi and Kadaga as speaker of parliament; Ssekandi and Mbabazi as vice president and prime minister respectively. Kategaya and Mushega have served in key positions as first deputy prime minister and Secretary-General of the East African Community. Political Scientists: Nsibambi served as prime minister. Key experts and consultants in structural adjustment have been political scientists.
Although I favor a multi-sector approach to development to establish multi-sector forward and backward linkages, I believe that given that Uganda’s challenge is largely in the province of economics, economists as policy makers should have been closer to the president, cabinet and parliament. Museveni’s first minister of finance was a trained economist but he was dismissed before he had a chance to influence policy. He was replaced by a medical doctor. Subsequent economists who served as ministers of finance have also largely stayed for a short time to make an impact on policy formulation agenda.
In 1987 NRM adopted a development model that did not suit Uganda’s conditions. The model was kept intact until it was dropped in 2009. The model focused on inflation control, balanced budget, export orientation and diversification, economic liberalization, free trade and privatization of public enterprises regardless of the level of employment, constraint on investment (interest rates were very high and unaffordable) and nutrition security of Ugandans. The invisible hand of market forces and laissez faire capitalism were chosen as the engines that would drive Uganda’s economy unregulated, create jobs and distribute the benefits of economic growth to all classes and regions through a trickle down mechanism which did not work but favored those already rich instead. The government has played a minor role even in areas traditionally assigned to it such as infrastructure and institutions.
When NRM took over in 1986, Uganda was in a state of economic crisis. There was no foreign exchange and inflation and budget deficits were high. So it made sense to tighten the belt and clean up the house. But this was supposed to last three to five years at most. Institutional and personnel changes were made to accommodate the new development paradigm. The two ministries of finance, and planning and economic development were merged into one that became the ministry of finance, planning and economic development with the department of planning and economic development working under the shadow of the department of finance. The minister of finance and governor of the central bank were removed and replaced with those that had some idea or were willing to implement the shock-therapy or severe version of neo-liberal economics (also known as structural adjustment program or Washington Consensus). These changes made sense for the short term horizon. Removal of subsidies on agriculture, education and health etc and retrenchment of some civil servants was tolerated albeit very painful. Ugandans had been asked to tighten their belts if only for a short time as an investment so that the future would be much better for everyone. Food exports increased at the expense of domestic supplies to earn sufficient foreign exchange to be able to import what was needed for consumer and development purposes. Donor funds and remittances increased and improved foreign exchange reserves.
Then massive corruption crept in. Instead of government revenue going into development of infrastructure, education and healthcare that would contribute to poverty reduction and eventually eradication as the president was fond of stressing at international summits, it disappeared into private pockets. And because of this drain, there was not enough money to meet basic needs of the majority of Ugandans which fitted in very well with the 50 year Master Plan of keeping Ugandans impoverished and vulnerable. In 2009 structural adjustment program was abandoned having failed to deliver and was replaced by a five year development plan which has not seen light of day or not much because no programs had been presented by line ministries or no money was available (believed to have disappeared into NRM election campaigns) when programs were ready. So the plan was dead on arrival as I had predicted in my article in the Observer (Uganda). Ministries especially of finance and its central bank have continued to largely advocate inflation control, economic growth and unregulated functioning of market forces and laissez faire capitalism as though the Washington Consensus paradigm was still alive in Uganda. It was abandoned worldwide in 2009 and replaced by a neo-Keynesian model popularly known as public and private partnership. To resuscitate Uganda’s economy and put it on a high and sustained growth rate of at least 9 percent annually to meet the Millennium Development Goals (MDGs) and sustainable path, we recommend the following actions which should be implemented without delay.
First, the 50 year Master Plan must be dropped forthwith and monitored closely to ensure it does not reemerge in any disguise. Unless this first step is taken, Uganda will not develop and end poverty and its attendant ills no matter how much money is pumped into government coffers.
Second, a recovery plan needs to be developed based on what is on the ground to address real problems. It should be devoid of ideology. It must reflect reality. United Democratic Ugandans (UDU) has already prepared a well received National Recovery Plan (NRP) accessible at www.udugandans.org. The Plan was sent to the government through the ministry of foreign affairs and to development partners operating in Uganda including the World Bank and IMF. The government has not acknowledged receipt of the Plan. There is no need to reinvent the wheel.
The Plan differs fundamentally from what NRM has been implementing that has not worked. First, the Plan has restored the central role of agriculture and rural development in Uganda’s overall development unlike NRM that has focused on the development of Kampala and on services mostly foreign owned and capital intensive or hiring foreign workers. Second, the Plan has restored the important role of manufacturing industry starting with agro-processing. No country in the world has developed without a dynamic manufacturing sector (South Korea which moved quickly from one of the poorest to an advanced country status in a very short time focused on export of manufactured products. It also transformed agriculture and achieved universal literacy very early and a high proportion of students attended secondary schools). Developed countries that had de-industrialized their economies in pursuit of services as the engine of growth are re-industrializing having recognized the role of industries in employment and economic growth. Third, the Plan has given pride of place to social sectors of education, healthcare, food and nutrition security and housing. The Plan has also emphasized balancing rural and urban development to minimize problems at both ends (urban areas saddled with unemployed people in slums and rural areas deprived of economically active age groups), and sustainable development through better management of natural resources. Fourth, the Plan has designed East African economic integration to serve national needs first through appropriate infrastructure, institutions and joint programs (Lake Victoria development) and a foreign policy that will promote good neighborly relations and protect Uganda interests and sovereignty. Supranational institutions are de-emphasized in the Recovery Plan.
To implement these policy proposals, we recommend a transitional government that will accommodate all Ugandans many of whose views have been ignored because they are in the opposition camp. Opposition or ideologically different or not they are Ugandans and have a right to be listened to and heard. Thus far, ideas from those outside of government have been ignored, seen as efforts to sabotage the work of the government. Time has come when all Ugandans need to join hands in a common effort to save Uganda from falling down a steep cliff. Winner-take-all mentality needs to be buried and replaced by mutually acceptable arrangements or those kept out will find a way of getting in because that is how the laws of nature operate. The Middle East situation should serve as a wakeup call for those who still underestimate the potential of Ugandans to act decisively at an appropriate moment. Preparatory work is underway for those who care to listen and to hear the voice of the opposition. UDU is a move in that direction and we are active at various levels.
Finally, new institutional and personnel arrangements need to be introduces as was done at the start of structural adjustment in 1987. For a start, the ministry of finance and planning should be split so that the new ministry of planning and economic development has a full minister to take charge of planning, economic development while the ministry of finance mobilizes resources in line with the proposed development plan rather than set a ceiling for planning purposes. Economists need to be given visibility at the highest level of policy formulation and implementation. Uganda now needs economists versed in neo-Keynesian economics that combines private sector working closely with government in a mutually reinforcing manner. Changes will need to be taken at the ministry of finance and central bank just as it was appropriately done in 1987 following the introduction of structural adjustment program. The world has a neo-Keynesian development model (all you need to do to confirm this is to visit book stores to see Keynes books). Uganda will be the loser if it does not adopt the model and adapt it to conditions on the ground and revise it as appropriate. Hopefully, these policy proposals will receive government and development partners’ support.
ERIC KASHAMBUZI
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