Without proper policy coordination, current government actions only make the State a predatory agent in the economy – acting like a virus eating its host says Fred Muhumuza as he predicts Uganda’s economy in 2015.

Kampala. Trust me the economy this year will be playing us games, not as an intelligent opponent, because it is not, but still able to inflict pain on many people as it delivers joy to a few.

While we shall all face some of the economy’s weapons such as prices of common goods and services on their way up, not all of us will be aware of the underlying causes like the financing of government debt and trends in the dollar. Individual political inclination notwithstanding, the manoeuvers by politicians will impact the economy around us not least by diverting attention of the bureaucracy from economic management to political survival and longevity.

The inability to predict both the political and geographical weather makes it a daunting task to attempt even the wildest of gausses on economic trends for 2015. However, because certain things are bound to happen or, should I say not to happen, one is able to sketch an outline of the economy in terms of growth, price stability, jobs creation, trade and competitiveness, and welfare improvement.

Economic growth

Growth will remain subdued as it has been for the last five years mainly on account of constrained effective demand, delays in major government projects, and poor service delivery that affects general economic activity.

According to the revised national account figures, final consumption expenditure declined to 1.6 per cent in 2013/14 up from 12.1 per cent in 2010/11. By implication, inventories, which include goods produced but not sold, increased from minus 1.8 per cent (shortage of production) to 17.8 per cent (excessive production) over the same period.

Similarly, general government consumption declined from 45.8 per cent to 13.9 per cent in the past three years. These trends are bound to persist as government borrowing from the domestic market (call it private sector) continues to crowd out real private sector activity (both consumption and investment). This is not to forget that 63 per cent of Ugandans live on less than two dollars a day. Increased government borrowing, largely on account of anticipated expenditure on elections, subdued tax revenues, and debt service above 10 per cent of the budget, will define fiscal policy contribution to service delivery and growth.

The limited focus on improving the quality of public institutions for greater effectiveness and corruption will continue to limit the anticipated benefits from public sector projects. 

It is important to note that most public infrastructure investments provide one-off growth impacts by way of positive changes in stock of infrastructure, which does not re-occur in the subsequent years. Accordingly, sustainable growth can only come from increased private sector activity, which in Uganda is being constrained by limited demand and high business costs.

Price stability

The common price stability index discussed in development policy discourse is the consumer price or inflation. This is largely because of high prioritisation by monetary policy practitioners arising from adverse potential political and socio-economic impacts in case of high inflation. Otherwise price policies should also focus on exchange and interest rates which affect external and domestic competitiveness of the private sector.

Uganda primarily uses interest rates as a means to an end of inflation control rather than a stimulus of private investment. This policy stance is not expected to change in 2015, when interest rates are likely to remain high on account of the need to remove politically motivated monetary injections as well as issue more fiscal bonds to finance the government deficit.

In view of increased liquidity injections by the public sector and high interest rates, both private consumption and investment will remain subdued. This will contribute towards low inflation and also moderate exchange rate movements.

The demand for foreign exchange will be moderated by reduced pressure to import, resulting in adequate reserves despite slow growth in exports related to low growth in global markets. Government efforts notwithstanding, price stability will still be heavily affected by food prices and related weather patterns.

Jobs creation

It is a pity that Uganda, like many of its peers in the low-income country category, never tracks jobs and related unemployment in a consistent and realistic manner. Wild, and possibly weird samples that are far in-between, are often used and quite often on the basis of bad definitions. I, therefore, find it difficult to comment on expected trends in job creation using official unemployment figures. However, on the basis of the basic economic principle that labor is demanded for purposes of meeting current and expected future demand for goods and services, it is probable to conclude that few jobs will be created in 2015.

External trade

Imports will continue to exceed exports due to failure to resolve key domestic supply constraints leading to loss of Uganda’s competitiveness in regional and global markets. A notable setback has been the civil strife in South Sudan (20 per cent), which had developed as Uganda’s leading export destination country followed by Kenya (11 per cent), DRC (5 per cent) and Rwanda. Going forward Uganda needs to diversify her exports within the region and beyond – a feat that will not happen in 2015.

Thus, international trade, which is one of the recommended drivers of growth and jobs through exports will continue to elude Uganda in 2015. Similarly, Uganda will hardly sell anything to its leading sources of imports like India, China and Japan.

By Eddie Ssejjoba

Sports betting and gambling are fast becoming a serious challenge to youth employment in Kampala City since majority of losers in betting resort to crime including robbing and hitting people with iron bars.

A scheme funded by the United States embassy in Kampala aimed at empowering youth to find practical employment found out that most youth in Bwaise, a city slum with some of the poorest jobless youth had resorted to betting and gambling, which in the long run has led to increased crime in the area.

Majority of the youth and others engaged in disguised employment are said to be involved in robbing and hitting people with iron bars at night after losing the little cash in betting and gambling.

Action For Fundamental Change and Development (AFFCAD), a community-based organization set up by four youth in Bwaise to create jobs for their peers said for the last nine months they had mobilized 620 youth including idlers, jobless, gamblers, chapatti makers, prostitutes and school dropouts and trained them in both soft and hard practical skills jobs.

The founders who were also jobless include Jaffar Nyombi, Meddie Kisirisa, Richard Kafuuma and Brian Mugagga set up a training center called Bwaise Youth Employment Center with an aim of ‘engaging youth in Kampala’s poorest areas.

 Nyombi said it was a hard task to persuade their peers to abandon betting and the sex workers to come out in the open to get free training at the center.

He said they recruited 238 between the ages of 16 and 25 who got trained in art and local crafts, tailoring and fashion design, hair dressing and cosmetology, graphic design, photography and video editing and electrical and electronic repair.

“Some would lose interest in learning and drop out while others would steal items from the center and from peers. Facilitators also found it hard to convince them that they would find jobs soon after their course,” Kafuuma said.

The youth founders thanked the US embassy for helping their peers and appealed to government to start funding the center with the aim of reducing crime and unemployment.

Nyombi said they needed to help graduates who could not find immediate employment with startup capital so that they can form small groups and start operating from their homes.

The US embassy has also sensitized the youth in the fight against HIV/Aids.

The youth also support about 200 orphans and needy children to get primary education in Bwaise and 50 students get secondary education.

24-year old Sulaiman Hashim a former brick maker in Bwaise said after the four-month training at the center, he got a job with the Uganda Telecom and was later appointed as a team leader.

“I encourage my fellow youth to utilize this chance to get free training because I had lost hope but I’m now a big person where I work,” he said.

25-year old Rashid Muhammad from Kyebando said he was vending belts but joined the center and trained in graphic design and was getting fortune from designing and making posters, business cards and certificates, among other things.

“I can no longer vend belts because I earn far better than before because of my skills,” he said.  

By Paul Kiwuuwa

THE Speaker of Parliament, Rebecca Kadaga, has complained that the public does not get access to the laws passed by Parliament.

“It is absurd, if the public does not get the laws passed by Parliament, to whom do we pass the laws and why?” Kadaga asked.

“Parliament has passed many Bills into laws but I wonder why the public does not have access to them and neither can they interpret the laws,” added Kadaga.

“The solution is we recommend that the Ministry of Justice and Constitutional Affairs creates public libraries or depository places countrywide, to enable the public access copies of the passed laws within the regional centers country wide.”Kadaga said.

Kadaga said this while receiving a petition from the coalition of Civil Society Organization (CSO) at Parliament.

The petitioners said  since the ‘Domestic Violence Act 2010’ was enacted in 2010, it has never been  functional. 

Led by, Executive Director, Center for Domestic Violence Prevention, Tina Musuya, the petition said, “Through the Parliament Speaker, CSO wants a commitment from the finance ministry to issue a certificate of financial implications enabling the law of Domestic Violence functional. We want the ministry of internal affairs to train the Police to take charge of the law, so that the offenders of the domestic Violence laws are   reprimanded.”

The petition adds, “the Domestic Violence law exists , but it calls for the commitments of   the ministries of Justice and Constitutional Affairs, the Gender, Labour and Social Development and  the Judicially to take charge of the Domestic violence laws.”

Musuya cited the Uganda Demographic and Health Survey, 2011 saying “59% of women and 16 % of pregnant women experience domestic violence, while 28% of pregnant women experience sexual violence.”

Kadaga promised to forward their request to the House Committee on gender.

“Since the gender committee is considering several petitions, from the public, I am sure they will include the non-functioning of the Domestic Violence law in Uganda, “said Kadaga.

SUNDAY, 17 AUGUST 2014

                    Mr M Katunzi

Uganda’s Constitution bestows incurable optimism and mockery in equal measure.

First, we are flattered by Article 1, which says that all power belongs to the people. And then, it says the people shall express their will and consent on who shall govern them and how we shall be governed.

Listening to Dr Mamphela Aletta Ramphele, the South African political activist, during the 22nd Joseph Mubiru Memorial Lecture organised by Bank of Uganda, I wondered why Ugandans had been lulled back to sleep, at the moment when they were empowered to give or deny power to their governors.

Dr Ramphele had an answer to this dilemma. She was discussing the topic: Creating a vibrant and fair society: transparency and accountability.  In reference to her country, Dr Ramphele said that the brutal and racist past left a significant majority of them (the black people) with an inferiority complex. This undermined their capacity to demand better accountability from the public servants and political leaders.

It is even worse that the majority of those in leadership are the black people who were once oppressed and critical of the unfair apartheid regime.

“Many are of the view that such criticism would reflect badly on the black people. This is a sad reflection on us; it is as if black people are defined by their incompetence, corrupt and unaccountable amongst public servants in our society. Why should we be willing to lower our expectations of public servants because they are black? Have we bought into the lie that they are not capable of higher standards of performance?” Ramphele asked rhetorically.

“We tend to be oversensitive to criticism of non-transparent and unaccountable governance in our countries at international fora, even where the facts speak for themselves. We defend the indefensible in our midst in the name of African solidarity. But is this solidarity to the benefit of the majority of citizens? Or is solidarity amongst African leaders a protective shield behind which they hide their poor performance to the detriment of ordinary citizens of their countries?”

Dr Ramphele’s observations and rhetorical questions resonate aptly in Uganda. Many Ugandans, especially those whose age is sun-setting, have had a chequered life.

In the early post-colonial days, they experienced a bit of freedom, reasonable household incomes and better services from the government. But this was disrupted by the political turmoil that erupted from the jostling for political power. President Idi Amin’s reign left many scars of violence and brutality. The guerilla campaigns, one led by President Museveni and the armed rebellion in northern Uganda, left many people traumatised.

The liberation movements that eventually captured state power rallied on the point of returning political pluralism and tolerance, peace and freedom of speech and a better life from the previous regimes. Naturally, one would have thought that the bar should be set higher for the successor governments. Not all has gone well. In some cases, we have had a replica of the ghastliness of the past.

Public service is haunted by scandals and no one seems to take responsibility. The inertia for accountability is partly explained by the inferiority complex and our blind worship of rulers. The leaders have often reminded the citizens that they have had a lot of peace in that whenever they belch, they belch peace. President Museveni usually reminds the opposition that if the country was still governed by Amin, they would never stage any political rallies where they insult him.

Isn’t it laughable to use Amin as the benchmark of reference of worthier leaders? The past dictates how we treat our power to make the governors accountable.  The governed, who are supposed to behave like shareholders in the company, surrendered their power of the vote as tool of control to the very people who are supposed to account to them.

“Citizens in most countries are treated as voting fodder for those in power to retain their positions, regardless of their performance in government,” Ramphele said. 

“Even the vote is reduced to a tradable good rather than a tool for citizens to use to hold those in power accountable by rewarding and punishing governments on the basis of their performance in promoting prosperity for all.”

Oftentimes, Ugandans have justified the low standards of government performance and delivery of services with the apparent sleep dividend that they lacked in the past. “Kasita twebaka ku tulo”, - at least we have some sleep. Whenever general elections are held, voters exchange their votes for pieces of soap and sugar. And often, the justification has been, “If I don’t get it, someone else will take it.”

In essence, Dr Ramphele says that in order to have a vibrant and fair society, we need to adopt the model of servant leadership, where leaders in public service are agents of citizens, servants of the people. And this model, according to her, is not novel to Africa. For there are some Africans saying that the king is only a king with the consent of the nation. And this thinking is well articulated in our Constitution.

We are a continent that articulates most elegantly the concept of Ubuntu – our belief in the notion of a common humanity as an essential pillar of being human. Ubuntu captures the essential truth that “our humanity is affirmed by our connectedness to one another.”

“This philosophical approach confronts us with the existential reality that ‘we are human because others are.’ Yet we are a continent that has struggled to date to create vibrant fair societies,” she explained.

However, the Ubuntu has been eroded by a new virus called Affluenza. According to Ramphele, Affluenza tempts the leaders to “place a high value on acquiring money and possession, looking good in the eyes of others and wanting to be famous”.

pmkatunzi@observer.ug 

The author is the finance director of The Observer Media Limited.