Let us get this right. Political promises are not delivered by individuals but the economy. Politicians can only hope that manipulation of the economy will deliver their promises. However, in its current state, no amount of manipulation will make the Ugandan economy deliver the kind of promises being made. The economy requires serious attention rather than manipulation. Politicians should say what they will do for the economy and not what it will do for them.
The economy is very angry that it has often been misunderstood and taken for granted. We expected it to grow at 7 per cent, create jobs, increase exports, reduce poverty and become competitive. The evidence speaks to the contrary. While poverty (one dollar a day) has reduced to 19.7 per cent, poverty (two dollars a day) – call it vulnerability – remains at 63 per cent or 22 million people. Such a high level of vulnerability renders the economy vulnerable because it cannot create sufficient demand to drive the required investments and growth. At Shs7,000 per day, a person can hardly provide for daily food, transport, communication, as well as save for clothing, rent, medical, education, and personal investment for gainful integration in the economy.
Beyond the individual, private firms are heavily laden with costs of rent, high tariffs, corruption charges of all kinds and forms, as well as high interest rates. The strain on the private sector by way of limited demand and high cost of doing business translates into lack of expansion, no jobs and low tax payments that fall short of planned tax revenues. The low taxes transmit the bad economy disease from poor individuals and businesses to government that has to run a big budget deficit and expensive borrowing of nearly 23 per cent for just two years. This leads to general inability to implement policies and improve service delivery.
The inadequate public services undermine economic production as evidenced by rising prices of food, widening gap between exports and imports and the related depreciation, general inflationary pressures, low returns to investments – leading to a move towards economic recession. Food inflation alone has increased from 1.8 per cent in August to 20.2 per cent in October, and is likely to continue in light of the ongoing heavy El Nino rains.
In view of the above, I would rather politicians focus on what they plan to do to revive the basic fundamental structures of the economy so that it can automatically deliver their script readings. Otherwise, no one should promise any jobs, salary increases, laptops, tax reduction, affordable electricity, paved roads, higher incomes, etc., as there is no way the Ugandan economy, which is struggling to survive the global economic pressures, can be manipulated to deliver such promises. The gloomy global economy has even forced the mighty China to carry out internal reforms, including relaxing the one-child policy.
The catalog of required actions include policy, legal and institutional reforms, and reduction of government to increase its efficiency and effectiveness. Reforms must reverse government’s predatory behaviour of eating the very private sector, which is supposed to grow the economy. The sad part is that such reforms cannot be done without first reforming the unrealistic politics of the day (politicking), which is where we started! The other sad thing is that ‘comfortable’ poor people cannot change the politics so as to change their economy.
Dr Muhumuza is committed to improving the lives of the poor through gainful inclusion in financial markets. email@example.com