Friday December 15 2017

‘Mediocrity will not launch us into middle income status’

A road under construction. It is believed that

A road under construction. It is believed that a number of Ugandan companies have the capacity to work on such infrastructure projects and as such, should be given priority before foreign firms. FILE PHOTO 

By Edward Kafufu Baliddawa

As I sat and keenly listened to the discussion of the panelists and later the contributions from those who attended the recently held PwC – NTV Economic Summit on NTV, I kept on wondering if we, as a country walk the talk or we simply put up these engagements simply for the show.
The reason I am saying this is that, most of the issues that were discussed in this year’s summit are the same issues that were raised in the 2016 summit.
But what came out largely in this year’s discourse is lamentation to which we in Uganda are surely becoming grandmasters.
But there is one young lady from PwC who in my view posed a critical question to minister of Finance Matia Kasaija.
The lady wondered if and given the current statistics available on our economy, Uganda can honestly achieve the much touted “middle Income” status by 2020, which is only two years away!
The minister’s response was “yes, Uganda attaining the middle income status by 2020 is unstoppable and we are going to achieve it.” Of course this is very re-assuring especially coming from the minister of Finance. However, the reality on ground is far from that.
What should be bothering the strategists, policy makers and economists is why, after 30 years, real economic progress has continued to elude us!

There is an excuse that we as a country went through many tumultuous years.
But there are many countries which went through worse turbulences than Uganda, but within few years of resolve and focus, they are now progressing well. Take for example Vietnam, Cambodia and Laos; countries that were literally erased down to the ground as a result of the wars in Asia.
However, once peace was restored, the leadership of these otherwise beaten-up countries embarked on development of their country and the economy.
In two decades, the transformation that has taken place in Vietnam, Cambodia and Laos is so rapid and phenomenal that soon, we shall be talking about them in the same breath as Hong Kong, Singapore, South Korea, Taiwan and Thailand.
Currently, these countries have become major attractions of substantial Foreign Direct Investment and the lives of their citizens immensely transformed.
But we do not need to go out of Africa to get similar inspiring examples. The current economic progress in Ethiopia and Rwanda must be instructional to us. No one can underestimate or downplay the magnitude of tragedies and challenges both these countries have faced.
Ethiopia witnessed possibly the worst famine and starvation for more than three decades, while Rwanda just recently underwent the worst catastrophe of genocide that saw more than 800,000 lives perish in less than a month.
Although, admittedly there are still famine challenges that Ethiopia still faces, the country has made amazing economic progress that must put leaders in Uganda to shame.
This is where the discussion about re-igniting Uganda’s economic growth should begin. I was intrigued when I heard Mr Kasaija at the summit assert that there are no Ugandan construction companies to be given contracts to do the roads in Uganda. The minister revealed that he had earmarked Shs7 trillion for constructing 42 new tarmac roads for this current F/Y. However, he doesn’t have any Ugandan company partaking of that allocation. The implication of this is that all these contracts are going to go to the Chinese firms and of course the money will end up in China.
I disagree with the minister of Finance and those in UNRA who say Uganda has no competent road engineers or road construction companies, a reason why most road contracts are being given to foreign companies mostly Chinese.
Ugandans should remember the late Eng James Zikusooka who was the first engineer in Uganda who built roads in UK, Bahamas and Nigeria. Eng Zikusooka helped another Ugandan, the late Mulyagonja to set up a road construction company called Kiira Construction Company. This company did most of the roads in Uganda in the 1980s. We have also had another renowned company called ETATS of Mr Balyejjusa of Jinja. This company is still around although struggling to keep afloat. One cannot forget the one of the late Andrew Kasagga called Zzimwe Construction Company and Global Consortium Limited of Eng James Zikusooka.
Although each of these companies could have had their own challenges, the common thread that runs through all of them is that they were let down by UNRA who either never gave them jobs or was simply adamant and not wanting to settle their bills in time not until forced by court litigations.
Uganda does not lack qualified and competent road construction companies. I am sure the ministry of Works and Transport and UNRA must have heard of Mugoya Construction & Engineering Company. This is a company owned by a Ugandan Mugoya Isabirye but based in Nairobi. Everyone knows that Mugoya Construction Company has done most roads and high rise buildings in Kenya.
It has the expertise and the financial muscle to undertake any kind of construction project.
As we discuss the solutions to the current economic conundrum, we must look for those solutions from within ourselves. The Chinese and Singaporeans didn’t get their solutions from New York, Paris or London.
Ethiopia’s economic model should give us a lot to learn from. Currently, Ethiopia is ranked as the most growing economy in Africa. Ethiopia is achieving this growth as a result of deliberately and painstaking resolve as a country. For example, although, the project being undertaken by an Italian consortium (Salini – Impregilo), it is reported that the power turbines to be used in the dam will be built locally in and by the Ethiopians. On the other hand, the Chinese are building the Addis Ababa – Djibouti railway, but a lot of capacity building is strictly for the local Ethiopians.

Mineral resources
As a country, we are endowed with varying resources that if adequately exploited would make this country a source of envy to many. Take for example, the Iron ore in Muko which has been talked about for more than two decades now. How come that the major infrastructure projects (Karuma, Isimba, Nyagak dams, Standard Gauge Railway, Entebbe Airport extension, Kampala-Entebbe Expressway, Kampala-Jinja Expressway, oil refinery construction, oil pipeline construction and power transmission lines construction) all require iron and steel, but we continue to procrastinate about the activation of exploitation of that iron ore that is available in abundance.
As a country, we should be interested to know why up to now we have failed to exploit wolfram, phosphates in Tororo, copper in Kasese, marbles in Karamoja, gold in Mubende, Busia and Mityana, tin, aluminum, and the like. Can it be that we are still looking for foreign investors from China for these resources to be able to benefit Ugandans? This is where we seem to have got it all wrong. Leaving the precarious fate of our country and our citizens to the whims of foreigners is not prudent at all.

This is an opinion by Edward Kafufu Baliddawa, former MP for Kigulu North (BA in Economics Foreign Trade and MBA).