Is Museveni's 2019 middle income agenda attainable? (Daily Monitor (Uganda))


” the historical league and party structures seconded me to pick nomination forms for NRM presidential flag bearer 2016, with the mission of leading Uganda to a middle income country (MIC) by 2019″ this is one message that has got Ugandans talking.

The massage, which Ugandans started receiving last week explains why President Museveni will be seeking another five-year term in office.

By the end of 2016, Museveni, whose key target is to deliver Uganda to a middle income country by 2019, would have ruled Uganda for 30 years

But beyond the message, which Ofwono Opondo, the NRM deputy spokesperson says came from party and Museveni sympathizers, one might need to examine whether the President’s dream is feasible or is another lace of politicking that has come to define much of Uganda’s history.

The World Bank defines countries with an average income of between $1,045 (Shs3.6m) and $4,125 (Shs14.4m) as “lower middle income”. Those between $4,125 (Shs14.4m) and $12,746 (Shs44.6m) are ranked as “upper middle income”, while those above$12,746 (Shs44.6m) are “high income”.

Ugandans, according to World Bank, on average earn $788 (Shs2.7m), which means that in the next five years President Museveni must add Shs900,000 on every person’s income to achieve the lowest class of middle income status (lower middle class) by 2019.

It has taken Uganda 53 years to achieve an average income of $788 (Shs2.7m) given that the country’s fortunes have been distorted by war, disease and corruption, among others.

In 2013, according to Ernst and Young, Uganda was among the top 10 recipients of foreign direct investment but growing investor apathy derived from political intolerance characterised by undemocratic undertones continue to be a threat to investor confidence.

But what experts say
According to Fred Muhumuza, the KPMG managing partner and former advisor in the ministry of Finance, such talk of Uganda achieving middle income status should be regarded as politics, given the current underlying fundamentals.

“It is a political statement,” Muhumuza says, highlighting that Museveni will have to drastically increase the country’s production capacity, make its labour force more productive and cut back on unemployment (estimated at more than 60 per cent) to have any meaningful impact.

Similarly, Makerere University Business School economics lecturer, Ramadhan Ggoobi believes government’s projection under the National Development Plan envisages a good future for Uganda but “is too ambitious and is detached from the current economic realities”.

“As we speak now, we can only attain 5 per cent growth yet for us to achieve the lower middle income status we need to grow at 7 per cent,” he says.

According to Ggoobi, government will in the next five years have to drastically grow exports from 6 to 19 per cent, reduce unemployment by more than 50 per cent as well as increasing electricity supply from the current 13.7 to more than 30 per cent if the agenda is to be achieved.

Government, Ggoobi says must also check population movements, which are competing with the country’s growth.
Uganda’s population grows by more than 3 per cent per annum but there are plans to reduce fertility rates from the current 6.2 to 4.5 to check population growth.

This, government plans to be achieved through among others increased primary and secondary school enrolment from 73 per cent to 80 per cent and net completion rate from 36 per cent to 50 per cent.

How Museveni plan to achieve middle class
According to Ofwono Opondo, Uganda is currently ‘pregnant’ with investment opportunities delivered as a result of over 25 years of peace across the country.

The peace, Opondo says has gone beyond lifting literacy and health levels, some of the hallmarks of growth, to creating an environment that has allowed government to put in place key infrastructure.

“10 years ago, who knew there would be a tarmacked Fort PortalBundibugyo road, Kabale-Kisoro?” Opondo asks, highlighting the President’s 25-year-agenda which has emphasised the need for connectivity to enhance development.
Other key areas that government is focusing on to drive Uganda to a middle income country are the need to industrialise as well as modernise agriculture.

A number of projects that seek to enhance long and short-term growth have been put in place, which shall be driven through the National Planning Authority, Uganda Development Corporation (UDC) and Uganda Development Bank.

While UDC, according to available information is charged with implementing government’s investments, a recapitalised UDB is expected to support small holder investments through provision of soft loans, with the aim of growing household incomes and investment expansion.

The above, in addition to a number of projects under the National Development Programme (NDP) 11, according to Finance minister Matia Kasaija, puts Uganda within reach of achieving a middle income status.

National Development Plan (II) outlines priority areas among them agriculture, tourism, minerals, human capital development, and infrastructure as key anchors for achieving growth.
The plan, for instance seeks to grow tourism receipts from 9 per cent to 15 per cent by 2020.

However, the source of more than Sh196.7 trillion ($62.4b), which government needs to implement the plan is yet to be known.

Good plans but…
But even then, according to Cissy Kagaba an anti-corruption activist, such plans as outlined, will be hard to achieve, given the gloss corruption in government.

“It is a fallacy. How can you achieve middle income status when you have not eradicated corruption and invested money in key sectors,” she says.

Much of the money generated locally and borrowed, according to Kagaba ends in people’s pockets, which education expert, Frederick Ssempala blames for the increased rate of school dropouts.

“There cannot be a middle income economy where majority of a country’s school age going children are dropouts.”
According to the 2014 United Nations Educational, Scientific and Cultural Organisation report, about 700,000 Ugandan children are out of school.

“Many countries have developed without minerals but because of investment in human resource. A doctor can make a mistake on one patient and the patient dies, a driver makes a mistake and the passengers die but a mistake done by a teacher destroys a generation,” says Ssempala.

Uganda, according to National Planning Authority has less than two million middle income earners. The number does not compare well with a population of about 34.9 million people.

world bank rankings
High middle income
Equatorial Guinea
Upper middle income
Angola,
Botswana
Algeria
Gabon
Libya
Mauritius
Namibia
Seychelles
Tunisia
South Africa
Lower middle income
Nigeria
Kenya
Ca’te d’Ivoire
Cameroon
DR Congo
Cape Verde
Djibouti
Egypt
Ghana
Lesotho
Morocco
Mauritania
Sudan
Senegal
South Sudan
SaPound o Tome and Principe, Swaziland
Zambia

ptajuba@ug.nationmedia.com