Everyone says they have no money, and the data now support the stories

Everyone you ask about life in Uganda these days seems to have their version of how bad things are. Sentiments about “things” range from hard to bad or, for those who are slightly better off, “there-there”.

Anecdotal evidence appears to support this mood. Over the past year or two, newspaper classified pages have been full of auctioneer notices advertising fire sales of distressed properties mortgaged to lenders. These used to be high-end commercial properties in prime locations or high-end chattels but it isn’t uncommon to find a bedsitter in Busega or an Ipsum in Ibanda under the hammer.

At the macro level, the sea appears relatively calm. Although still stubborn, inflation remains largely under control. The shilling has not suffered the beating that its cousins in the region have taken. There are no queues for fuel or other commodities. The lights are still on and the taps are not dry. Look closely, however, and you can see shark fins in the water.

Based on official figures, a report in this newspaper last week showed shrinkage in the number of large taxpayers across the board, save for the lowest category of small firms. It is not hard to see why. Many household firms like Shoprite, Nakumatt, Game have closed shop, either due to tax disputes or low business volumes. Others like BAT relocated the juicier bits of their manufacturing and processing and only retained near-virtual trading desks.

This can be deceptive, and the closing of one firm often paves the way for the entry of new market players but the pie does not appear to be growing. The great migration of small and medium-sized businesses out of the central business district, for instance, has left large swathes of commercial real estate downtown empty.

The shockingly bad state of many roads in the Greater Kampala area can conveniently be put down to politics and the need to punish opposition-voting areas but this does not tell the full story. Many government contractors have not been paid for years, forcing them to abandon their projects. Those with thin operating capital have gone under or been left with just their shirts.

UNRA, the flagship government body responsible for doing roads, has not fared any better. First, it was stripped of the work of preparing and awarding road procurement contracts, then starved of all but life-saving financing. A reward awaits for the first reader to send in a picture of a UNRA vehicle stuck in a potholed road, or one being pushed uphill after it has run out of fuel.

City traders are threatening to strike over what they see as intrusive practices by the revenue authority. In reality, many of them were only able to stay in business by fiddling the books. Faced with rising competition from Asian rivals with better supply chains and trade financing deals, expect to see less ebidta and more agita.

Part of what we are seeing is the lagging effect of two years lost to the pandemic. The promised economic surplus never came, and the savings in public consumptive expenditure were not invested in fixing the roads, developing public infrastructure, or reskilling. We wasted the crisis.
The pain would have manifested much earlier had it not been for the cruel decision to allow savers with the NSSF to prematurely access their money. This defused demands for a fiscal stimulus by nudging people to gnaw at their pensions.

Now that the money is spent and demands are growing the sense of frustration is rising again. In the most recent Afrobarometer survey of Uganda, in 2022, 52 percent of respondents said Uganda was headed in the wrong direction. Seven in 10 said they had experienced moderate or severe poverty in the year up to the time of the survey.

These deprivations will sooner or later metastasize into a malignant political problem. Six in 10 respondents told Afrobarometer that the government is doing a bad job of improving the living standards of the poor.
The data show the opportunity for urgent reforms and the dangers of inaction. Young Ugandans, the report notes, are better educated than their elders but also more likely to be unemployed. They are also less likely to engage in political processes. Give them jobs, better health, education and access to water and they are likely to mind their own business.

The problem is likely to emerge from within the middling middle class. Poor people who’ve never had don’t know what they are missing but the folks who have lost their houses, cars and businesses are less likely to forgive, or forget. Moi and the KANU system in Kenya were forced out by those who had been kicked off the ladder of opportunity, not those who had never climbed the first rung. Policy and succession planners in Uganda had better pay attention.
Mr Kalinaki is a journalist and  poor man’s freedom fighter. 
[email protected]; @Kalinaki