Budget 2010: Uganda is on the way to self-sufficiency

Jun 14, 2010

ONE of the most critical highlights of Uganda’s national budget for the financial year 2010/2011 is that Uganda can now fund her expenditures to the tune of 75 percent – an all time high; and a fine recovery from the time when the donors funded almost 60 percent of our budget.

Karooro Okurut

ONE of the most critical highlights of Uganda’s national budget for the financial year 2010/2011 is that Uganda can now fund her expenditures to the tune of 75 percent – an all time high; and a fine recovery from the time when the donors funded almost 60 percent of our budget.

How have we reached here?
The long and short of it is that it is not by accident that all this is happening.

The first answer should lie in what Egyptian tycoon Mo Ibrahim famously said when asked what Africa’s problem actually is. He summed it up in just one word: leadership. That is like the inner lining of the neck tie; if it is wrong, no amount of ironing or straightening on the surface will right the tie. Sort out the inner lining and everything else will fall into place.

The next answer lies in what the leadership has done; the economic policy decisions they have taken to ensure that the economy is stable and growing.

Liberalising the economy was the first good decision; because that cut out undue governmental interference in the running of the economy, based on the universally accepted principle that Government is a poor business manager and should only supervise the economy. That is why we have so many people today in private employment.

One of the policy areas where we have got it right is what development economists call the primary growth sector – the sectors and sub-sectors that produce goods and services. These include agriculture, forestry, manufacturing, tourism, mining, oil and gas, ICT and housing development.

We have experienced a paradigm shift in the sense that agriculture, which took up a 51 percent share of GDP in 1988 now takes up 15.4 per cent, a sign that the economy has now diversified and other areas have grown significantly. What is left is to increase the productivity levels in the agricultural sector and modernise it.

In the complementary sector Uganda has performed well. This consists of the sectors and sub-sectors that provide institutional and infrastructural support to primary growth and other sectors. We are talking about transport, energy and water, land management and administration, trade development, physical and urban development, as well as science and technology.

Most of these sectors are still hard to reflect directly in GDP computations, but a keen look around tells you they are all performing better than before and they play a critical role in the generation of GDP and creation of employment.

The social sectors and the relevant sub-sectors that provide services required for maintaining a healthy and quality population like health, education and human resource development have been rising, as shown by increased school enrolment, higher life expectancy (now at 50, up from 46) and many more graduates churned out every year. A quality population makes any country an attractive investment destination and the increased levels of investment should come as no surprise.

Lastly, we should celebrate the enabling sectors like defence and security, justice, law and order, the legislature, environment management, public sector management, disaster management, accountability, statistics, East African Community integration and others.

These have provided a conducive environment and framework for efficient performance of all the sectors of the economy. Without them, the other key sectors cannot achieve anything much.

It could have been even better, had certain things not interrupted the growth. Corruption for one is still a big cancer that is eating us up. If our resource envelope for each financial year for the last two years running is seven- odd trillion per year, it is significant that corruption eats up more than one tenth of this. Fortunately, President Museveni has declared war on corruption, calling it the last frontier, the remaining war that must be won.

It is not a coincidence that the upsurge in self-sufficiency has coincided with the end of civil conflict in northern Uganda and of course western Uganda where the Lord’s Resistance Army and the Allied Democratic Front rebels had made life hell for our people. This meant a lot of money that should have been invested as development finance was instead diverted into quenching the rebels.

But equally important is the reality that where there is war there cannot be any development. This meant that the millions of people affected by the war were in essence locked out of the economy because they were unable to be productive.

Furthermore, although Uganda’s economic growth is indisputable, there is still some room for improvement in the wealth distribution.

Whereas it is true there is prosperity in Uganda – those living below the poverty line have decreased from almost 60 percent in 1986 to just under 30 percent now - it is not yet prosperity for all because the number living below the poverty line needs to be catered for and helped to climb out of those ranks.

Let’s wind up with a forecast: what does the future hold for Uganda in terms of economic development? One thing that is clear is the oil industry – which is picking up fast. It has been established that we have so far deposits of oil and gas to the tune of two billion barrels. This, if well handled as we expect it to be, should yield us high returns and improve our economic performance.

Secondly, the fight against corruption should also help us realise more value for money in form of increased opportunities, services and overall development opportunities.

With these tackled, our fight for economic emancipation will be won soon. With the oil coming up, and with our independence at 75 percent, it should not take us long to be 100 percent self-sufficient. Then we won’t have to dance to anybody’s tune.

marykarooro@parliament.go.ug

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