Sunday August 31 2014

A Ugandan middle class is nothing but a fallacy

By Timothy Kalyegira

Last weekend, Kenyan President Uhuru Kenyatta was in Kampala to give a pep talk to Ugandan and East African youth on career, employment prospects and the great opportunities that the East African Community could offer if all five countries worked together.
It was the usual false optimism about East Africa and Africa that some of us skeptics have got tired of hearing.

It has become an article of faith over the last 20 years (much more in the last 16) for the Western media, political and business leaders and African “elite” to herald the arrival of an African Renaissance.
Glowing growth figures are given, that few people ever have the time or expertise to question or verify.

Some of us who know Africa well know that it is not yet Uhuru (no pun intended). There is no African Renaissance and Africa is not an emerging market.

It is still the same old incompetent, slow-minded, barely productive Africa that we know.

On Monday, August 25, 2014, the EastAfrican newspaper (sister publication to the Daily Monitor and Sunday Monitor) published a story on a report about the actual strength of the East African middle class.

“What could further dampen global investor appetite for the previously thought to be fast growing middle class in the region is the fact that as many as nine in 10, or 126 million of the 140 million East Africans live below the poverty line,” reported the EastAfrican.

According to this report, a shocking 96 per cent of Ugandan households can be classified as “low income”, a polite word for poor, since according to the economic definition of class, a household that spends less than $5,000 (Shs12 million) a year in various services and purchases is a low income home.

All this has been obvious to most of us for many years. Several weeks ago, I wrote in this Sunday Monitor column about the mushrooming shopping malls in Kampala and if this might not be a mere bubble.
Many Opposition leaders and members of the civil society and the media have warned for years that this illusion of good times is just that.

In 1992, when there was much optimism in and out of Uganda about a Uganda that was emerging from the “dark days” of Idi Amin and Milton Obote, the Monitor, recently founded, wrote and reported frequently about the economic misery that hurried privatisation of the economy was inflicting on ordinary Ugandans.

The 2007-2008 post-election violence in Kenya showed the world the ugly reality behind the glittering high-rise buildings in Nairobi, the reality of a city with a slum called Kibera in which one million people live in squalor.

As Ugandan writers and columnists like Charles Onyango-Obbo and Andrew Mwenda went on and on about the supposed magic of Rwanda and a flourishing middle class in Kenya, many of us begged to differ.

In recent years, the Chinese news media has joined the hype about an emerging Africa. However, read carefully newspapers like the official China Daily Africa and you notice Chinese managers stationed in Africa consistently describe a continent of low income and low purchasing power.

Just visit any hotel, restaurant, shopping mall or supermarket in Kampala. Some of them, working on the assumptions of a large middle class, have expanded their branches all over Kampala and to a few upcountry towns.

The result is largely empty check-out tills. Commercial banks also opened up more branches in the country than the economy can support and now we see empty banking halls.

The telecoms companies also fell for this false picture of Africa and are having to spend all year round offering bonus airtime or other heavily discounted inducements to a customer base that’s just not growing profitably enough.

When the world financial crisis hit in late 2008, I waited for the 2009/2010 national budget reading. Sure enough came the news that the Ugandan economy had somehow grown robustly over the last year.
I asked in the pages of the Daily Monitor how this could be. What does Uganda produce and export?

If all the major and medium-size economies like the US, UK, South Africa, China, the Middle East, the European Union and others where Uganda’s exports of coffee, tea, flowers and fish end up were almost all in recession, how could Uganda then claim it had beaten this global recession and grown from strength to strength?

It is like saying everybody in Jinja or Entebbe was too broke this financial year to buy bread, but a major bakery in any of these towns declares record profits on sales in those markets. How does that happen? Of course it must be false and even doctored economic growth figures, something Uganda is capable of doing.

That’s why despite the rosy picture that successive Ugandan budgets and ruling NRM party and government leaders and officials paint about Uganda, the seemingly recession-proof economy, the Standard Bank report says “There has been little change in the composition of Uganda’s population in income terms in the past decade.”

This report by Standard Bank offers a much-needed reality check and a trimming of our egos to their rightful size. But it concentrates on the economic and purchasing power aspect of middle class.

Some like me since the mid 1990s became “social critics” by highlighting the inadequacy of our “middle class” at even the intellectual level. When one goes past the possession of flashy cars, phones and furniture as a measure of middle class and one goes into the mentality that is also a part of middle class, it is equally bleak.

We hardly author books, produce computer software or hardware. Everything we own practically is foreign conceived, designed, produced, marketed and distributed. Even if we are to go by our pretensions to being middle class, we are largely a consuming middle class, not a producing middle class such as what we see in North America, Europe and East Asia.

Time, then, to dispense with our false image of ourselves as a sophisticated society and get down to work, being truly creative and productive.