Three years to middle income status: The missing Ingredients

By Richard Ssempala

Uganda aspires to reach lower middle income status by 2020. This will require strong commitment in terms of resources, especially considering the efforts needed to scale such a significant milestone. According to World Bank classifications, middle income countries have annual per capita incomes in the range $1,000 - $2,000. For Uganda, this implies that every Ugandan will be able to earn an equivalent of at least sh3.5m per year, equivalent to sh290,000 per month.

However, there seems to be a lot of mismatches in the Uganda's commitment towards this great dream. For instance agriculture continues to attract minimal allocations in the budget currently at sh828.5b, despite the fact that more than two thirds of Ugandans (80%) are employed in this particular sector. Other sectors, such as innovation and science, which would have large multiplier effects because of their likely impacts on entrepreneurship and business development, continue to attract limited funding too!

Moreover, there is still a lot of waste of Uganda's resources in form of increased administration costs, especially which have come with ever emerging new districts. While it is true that some people are already enjoying middle income status and others in the first class economy, majority of Ugandans are still below this status on average. Achieving middle income status for all Ugandans will require discipline in a number of areas, including in the politics, social and economic spheres. Particularly, the problem of wasteful expenditures must concern both the Government and the people and should be decisively dealt with.

There is greater need for well-co-ordinated and strategic partnership within the Government and private sector, for robust implementation of public investment management processes. Equally, there is need to explore more innovative and efficient approaches, especially using locally available resources to mentor enterprises and solving some of the most pressing needs of the poor.

In addition, the Government and other stakeholders need to help people select appropriate, manageable and sustainable enterprises according to their rural or urban settings, however small, where they can earn some sh150,000 monthly. Then, help introduce more than one income generating project that can bring in weekly or daily incomes. Third, also help the setting up income streams for medium and long term duration every four to six months and annually. These can all be done through mobilisation and creative application of resources within the communities, presently idle or put to wasteful expenditures.

Given that majority of  the population is in agriculture sector,  an effort to reform and restructure agricultural practices, especially sub-standard and unregulated inputs on the market including planting materials, fertilisers, and pesticides must be embraced.

Therefore, as we strive to reach lower middle income by 2020, there is a need for a well-co-ordinated strategic and policy interventions in key areas: like income growth acceleration (agriculture), technology and innovation and reduction in wasteful expenditures in disguise of creating new districts.

Writer is a research associate with the Uganda Debt Network.