By Mutabazi Sam Stewart
On the eve of the New Year in 1991, President Yoweri Museveni addressed the nation on television and radio where he announced his government’s decision to fully liberalize the economy. The New Year 2002 therefore saw a complete shift from a market largely driven by the state to one that is controlled by private individuals and groups. The Structural Adjustment Policies (SAPs) were to follow later with a full backing of International Monitory Fund (IMF) and the World Bank. Privatization of all state enterprises was started in earnest and massive retrenchment was effected. As was expected, many people, especially those who were affected by job cuts reacted angrily to the decisions by government but those who were aware of globalization and its impact welcomed a liberal economy with open hands because they agued that development attained through state control and socialism was not sustainable in the long run.
Some of the people who were laid off during that period later went into private business and thrived while others, especially those who were used to the soft life provided by Civil Service found the new life hard to live. Some of these retreated to villages where they started a new life of subsistence agriculture while others continued to loiter around Kampala and accepted to live a not-so-dignified lifestyle contrary to one they had been accustomed to. In short, liberalization of the economy brought with it a mixture of fortunes for some people and challenges to others.
The first category of people who fully appreciate liberalization are those in government because it meant less work, less expenses and less commitment to improve the welfare of citizens as the case would be if they were still operating under a socialist or mixed economy. There is no doubt that the economy has grown considerably especially in terms of per capita consumption of goods and services. The other area where there has been marked improvement has been the housing and the automobiles sectors. The price of land within and around Kampala has jumped from an average of five million for an acre in 1992 to over 50 million shillings in 2007. The land in upcountry towns is steadily appreciating in value as well.
However in its quest to create a middle class of wealthy Ugandans, President Museveni’s government has left majority of people, mainly the peasants in extreme poverty. Universal Primary Education (UPE) which is the largest venture in terms of resources this government has undertaken since 1986 is not likely to bring in tangible results in the short run. Investment in physical social infrastructure such as roads, electricity and railways has not been given due attention. As such, the development by the private sector, especially in housing, has in an unprecedented manner, overtaken the social sector. For instance Kampala today boasts of some of the most beautiful houses comparable to those in developed countries, while the roads within the city are deplorable, to say the least.
Foreign Direct Investment (FDI) has been quite impressive, but without corresponding recruitment rates. Unemployment is threatening the well-being of the economy and the security of people especially educated. Many investments which are being licensed employ up to only 50 persons who are in most cases semi-illiterate too. Universities today bring on the job market up to 10,000 fresh graduates every year. Majority of these are unemployed for the first two to three years and those who can afford often go into private businesses. These businesses often do not survive beyond one year because of low capital invested, lack of managerial competence and unsustainability problems because the business is used as a source of income for the family even before it becomes profitable.
Privatization and liberalization are the best economic practices in the world today because they promote innovativeness, competition and offer better services and goods. But they are certainly not the best option for poor countries such as Uganda especially when they are not backed up by deliberate government support through strategic intervention mechanisms and systems.
Uganda’s entrepreneurial capacity is still lacking. And it will take a very long time to develop it up to required standards. If the current government sincerely believes in developing the country, it must spend its resources strategically in order to uplift the economy. Government being the largest spender must spend on priority areas which can act as a key starter. Bonabagagawale (wealth for all) programme is not likely to have a positive impact because; individuals will get to little money to start up businesses given the fact that the programme is going to be rolled out throughout the country at once.
Government must as a matter of urgency create a conducive national employment policy but at the same time massively invest in graduates who can potentially kick start the economy through meaningful entrepreneurial development and sustenance. Before this however, more resources must be committed to the development and maintenance of physical social infrastructure, namely roads, railways, water and electricity because these are the real driving force of the economy. The notion which has been over emphasized that people should be job creators and not job seekers doesn’t add up to much unless government does its role of helping them to create jobs.
The writer is a Human Rights Activist
Contact mutasamste@yahoo.com
Tel: 0772-882547
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