NewsEast & Horn AfricaUganda: A vision with two tales


Posted on Tuesday, 09 October 2012 13:46

Uganda: A vision with two tales

Kampala, a modern city waiting for the economic boom to come/Photo©TREVOR SNAPPPlanners forecast that the next two decades will bring an economic revolution of sorts as revenue from resources reverberates through the country. However, the ruling party's grip on power, increasing inequality and the corrupt management of public resources threaten to derail such straight-line predictions.


Last year Uganda, which has consistently averaged between 5 and 7% growth over the past decade, slowed to only 4.5%. Beset by a spike in global oil prices that fuelled double-digit inflation, and hit by a long season of post-election street protests and a chronic energy shortage, the economy appeared to wander off the path prescribed by the Bretton Woods institutions.

Only now that it is tentatively recovering, with 2012-2013 growth forecasts returning to the usual range, did it seem fitting for the mandarins at the National Planning Authority to offer, on the eve of the country's golden jubilee independence celebrations, a new national economic blueprint.

The National Vision 2040, unveiled in early September, is an ambitious plan to transform Uganda's economy. Backed by the expectation of steady oil revenue and a revitalised agro-industrial sector leading to an average growth rate of 8.2%, Vision 2040 forecasts that per capita income will rise from $500 to $9,500, while the country will acquire middle-income status by 2017.

Outjumping the tigers

Like the outpouring of visions recently displayed by neighbouring planning ministries, Uganda's own blueprint sets out a rational and coherent plan. However, it seems to unravel under the pressure of expectation. "It's good to have aspirations, but the whole thing is unrealistic," says Philip Kasaija of Makerere University. "Even with the oil income, and even if that were managed very well, it is unlikely that we will see such a steep jump in incomes over 28 years. Not even the Asian Tigers, who we are trying to emulate, have experienced this."

The discovery of oil in the mid-2000s has sharply raised expectations of economic transformation, with potential revenue calculated at about $2bn per year. Production delays, a tax dispute and demands in parliament for a debate over revenue-sharing agreements have since dampened initial excitement.

The current debate around oil will perhaps have long-term repercussions. In May, an increasingly activist parliament led by speaker Rebecca Kadaga pushed the government to table a revised petroleum bill. The government has consistently prevented scrutiny on production-sharing agreements signed so far, so the publication of the draft bill is considered a major achievement.

However, in Bunyoro, where much of the oil sits, some have expressed reservations about the proposed law. "Things have not moved the way we want. The Banyoro feel we should be given a share as oil is one of the natural resources we enjoy here," says Henry Ford Mirima, spokesman for the Kingdom of Bunyoro. While Bunyoro is much less prominent today than its Buganda counterpart, any resulting push for federalism could radically transform how resources are shared in the future.

Federalist ideas have been historically fronted by the Baganda, resulting in the Kayunga riots in 2009 when the kabaka (king) was prevented from making a tour of a district in Buganda. Despite attempts by activists to push their case, the government has held firm because of how successfully it has sold a security agenda to Uganda's citizens.

This was one of the reasons President Yoweri Museveni was able to perform so well in northern Uganda in the 2011 elections. Until 2006, the notion that the ruling National Resistance Movement (NRM) had restored stability to Uganda was restricted to the south. A two-decade long war had taken a brutal toll. While Joseph Kony's Lord's Resistance Army rebels and abductees had prosecuted a reign of terror across much of northern Uganda, there still remain very uncomfortable questions about the activities of government forces in the north.

However, the Juba Peace Agreements between 2006 and 2008 largely restored peace in Acholiland. Now construction in Gulu, the north's biggest city, is booming as businessmen, non-governmental organisations and state institutions return. The town has since become a major transit point for Uganda-South Sudan trade.

As it awaits the coming resource boom, Uganda has hitched its wagon to this idea of regional integration. Between 2005 and 2010, as regional trade expanded from $2.2bn to $4.1bn, Uganda's share of total regional trade grew by 2% to 22%.

One of Uganda's perennial concerns has been dependence on Kenya's ports. Having suffered the effects of Kenyan political instability in 2007-2008, the government signed a $3bn infrastruc- ture deal with Tanzania in 2011.

Uganda has brokered peace in the region – pushing for South Sudan's right to self-determination, hosting the Burundian peace process and intervening militarily in Somalia – but now the tricky question has surfaced of 'cashing in on the regional peace dividend'. Movement diehards are loath to regard their pan-Africanist idealism in such crude terms. "We firmly believe in the capacity of the African people to solve their own problems," says Ruhakana Rugunda, Uganda's information minister. "Our priority is to consolidate the gains that have been made in this region over the past few years."

Uganda has performed below potential. There is a waste of resources, a lot of corruption. A great deal of money is spent on political games

Accusations of corruption have begun to impact the national economy. With the government under pressure in more recent times to keep spending down, the Bank of Uganda grappled with the exigencies of state patronage politics – notably during a hugely expensive election last year. As interest rates shot through the roof in 2011, the cost of living rose steeply, provoking public anger, sending protesters onto the streets and Kampala's economic planners back to the drawing board.

"The Ugandan economy has grown considerably under Museveni – there can be no doubt about that," says Fred Golooba-Mutebi, a political scientist and vocal government critic. A laissez-faire policy has helped the economy grow, he says. "But Uganda has performed below potential. There is a waste of resources, a lot of corruption. A great deal of money is spent on political games."

Looks can be deceptive

Uganda has all the appearances of a thorough-going democracy where all shades of opinion are noisily broadcast from scores of FM radio stations, in several newspapers and on the floor of parliament. Many of these achievements have been drowned out over the past decade or so, as Museveni and his supporters successfully pushed through a law that dismantled constitutionally mandated presidential term limits.

The executive is bloated and, with 78 members, Museveni's cabinet is reputed to be the third-largest in the world. In August 2011, the president appointed Milton Obote's former security minister, Chris Rwakasisi – a bitter opponent during the bush war who Museveni put in prison for 24 years – as security adviser. It was perhaps a powerful indication of the extent to which Museveni is prepared to accommodate old rivals for the sake of politics.

Over the next few years, it will be the related issues of succession politics and the coming resource boom that will dominate debate. As the original NRM members start searching for a succession regime that will protect their interests, the kinds of violent protests that have recently characterised the country's politics are likely to become more frequent.

"There is anxiety on the political front. How we manage the Museveni succession will be key. And please remember, we are a country that has never managed a peaceful transition," says Makerere University's Kasaija●

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