One of President Yoweri Museveni’s pet subjects is that when he took over power, the Ugandan economy was on its knees, with inflation at a whopping 240 per cent and unemployment notching towards an obscene 60 per cent.Infrastructure, President Museveni is wont to tell his audience, was non-existent in vast parts of the country and completely run-down in most urban areas. Other statistics were equally disconcerting.
The government has taken important steps towards economic rehabilitation. The country’s infrastructure — notably its transportation and communications systems destroyed by war and neglect — is being rebuilt. Recognising the need for increased external support, Uganda negotiated a policy framework paper with the International Monetary Fund (IMF) and the World Bank in 1987. It subsequently began implementing economic policies designed to restore price stability and sustainable balance of payments; improve capacity utilisation; rehabilitate infrastructure; restore producer incentives through proper price policies; and improve resource mobilisation and allocation in the public sector.
Indeed, it is for Museveni’s steering Uganda out of the economic doldrums in the late 1980s and early 1990s that he was hailed across the globe as a visionary leader. The exceptional rebound of Uganda includes an economic growth rate of 6.3 per cent between 1990 and 2007 as poverty plummeted from 56 per cent in 1992 to 31 per cent in 2005. Due to stringent macroeconomic policies, inflation has tumbled from an all-time high of 240 per cent to about 5 per cent.
In part, Uganda’s comeback has been on the back of donor funding and, in some quarters, the country’s economy is referred to as donor-driven. However, Uganda is being weaned off donor alms as is evident in the sprouting of enterprises countrywide as well as from the discovery of minerals. Indeed, the recent discovery of large deposits of oil and other bio-carbonates has fired the economic potentialities.
In the East African region, Uganda is rivalled only by Rwanda as an investment destination. Significant increases in investment flows, both foreign and domestic, have been witnessed over the past decade. As a percentage of GDP, private investment has risen from 12.2 per cent in 2000/1 to 19.2 per cent in 2006/7. Public investment averaged 5.1 per cent over the same period.
In the past, the HIV-Aids scourge was a major strain on the economy before the government deployed strategies that brought the pandemic under control and won international admiration. However, with Aids, aid and instability under relative control, the population has ballooned, posing a new challenge.
For a country of its size, Uganda’s population of 30 million people is one of the densest in the world and the population growth rate of 3 per cent annually is one of the highest in the world.
It is in these statistics that the opposition presented a challenge for the incumbent about income inequalities and the gap between the rich and the poor, also one of the widest in the world. Museveni’s message of economic progress was countered and swallowed by the mantra — Where is the money, where are the jobs!
One region that lags behind economically is northern Uganda and this explains why Museveni had a big challenge selling his re-election campaign there. This region significantly attracted the candidature of former UN deputy secretary general and former foreign minister Olara Ottunu, an articulate politician, who tore through Museveni’s Northern Uganda Reconstruction Programme, Northern Uganda Social Action Fund (NUSAF) and the Peace and the Recovery Development Programme (PRDP). These quasi-Marshall Plan projects were initiated to specially address the challenges of development in the north.
Museveni clearly has his plate full as these and other issues demand his full attention.
By CHARO NGUMBAO
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