Is Uganda’s middle class real?

Tuesday March 24 2015

There is an assumption in Uganda that middle class citizens are those who drive flashy cars and shop in supermarkets.

There is an assumption in Uganda that middle class citizens are those who drive flashy cars and shop in supermarkets. Photo BY Stephen Wandera. 

By Ismail Musa Ladu

“….majority of us, no matter how little or how much we make, consider ourselves part of the middle class and this feeling is cheered on by government and its agents who quote figures that are neither realistic nor reflective of what goes on in society,” David Boyd, a US development economist wrote in a paper which was partly published by the Telegraph.

The above statement is the punch that might help us review Uganda’s assumed growing middle class amid stinging poverty for both the urban and rural poor.

According to the 2014 State of Uganda’s Poverty report authored by the Ministry of Finance, 37 per cent of Ugandans had by 2012 achieved the middle class status compared to 10.2 per cent in 1992. This, according the report, means 11.4 million Ugandans had by 2012 attained middle class status compared to 7.8 million registered in 2006.

But how true is the above?
Whereas it is difficult to review parametres that government uses to classify middle class citizens, expert analysis suggest the country’s middle class might be an imagination because it is not reflective of what is on ground.

Interviewed for this article, Patrick Birungi, the National Planning Authority (NPA) director for development planning said: “Statistics on the percentage of the middle class may not be readily available, but I believe it is below 10 per cent of the productive population.”
Birungi’s figure (10 per cent) that is if it can be used as a counter puts the middle class at only 3.45 million compared to 11.4 million quoted by government.

NPA, where Birungi is the director for development planning, is an autonomous government planning arm that is a key ingredient in the agenda to drive Uganda to the middle income country by 2030. The World Bank classifies Uganda as a low income country with much of the population earning less than Shs1m a month.

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Does Uganda have a middle class anyway?
According to webeconometrics, an online dictionary, the term middle class has had several, sometimes contradictory, meanings but with specific reference to people between the lower class and the upper class.
A 2014 report - Understanding Africa’s Middle Class defines the lower class as a section of the poor politely referred to as low income earners and the upper class as people on the top of the economic strata.

Lawrence Bategeka, a former senior research fellow at the Economic Policy Research Centre (EPRC), says Uganda’s middle class is a vague imagination considering that basic global economic fundamentals define middle class citizens as those involved in industries or value addition.

The middle class, Bategeka explains, must be able to accrue good wages not like ours here (Uganda) that are far below the basic recommended standards. “Our kind of middle class are those that shop in supermarkets. The middle class should be productive and must be able to create jobs. Ours is weak and non-progressive,” he says. According to Bategeka, the middle class, must be at the core of value addition and not like “here where those adding value are far below wage earners”.

Bategaka’s view is upheld by Joseph Mawejje, a research analyst at EPRC, who says it is difficult for Uganda to achieve the middle class dream amid wide spread poverty and heavy reliance on a consumptive economy.

“About 80 per cent of Ugandans derives their livelihood from rudimentary farming. Until we get a critical mass to spur the economy. It will be hard to achieve a meaningful middle class,” he adds.
In a recent article based on the Understanding Africa’s Middles Class report, Timothy Kalyegira, a journalists and a social critic wonders how Uganda plans to achieve a middles class status with a critical mass of the population living a “pretentious” lifestyle.

In his opinion published in Sunday Monitor recently Kalyegira argues the definition of the middle class should go beyond owning flashy cars, phones and furniture but be defined on acceptable global parametres. “…even if we are to go by our posturing, Uganda’s middle class is largely a consuming lot that is not involved in production as exhibited by countries in North America, Europe and East Asia,” he opines.
Uganda, according to the report - Understanding Africa’s Middles Class “has not had substantial changes in its income levels thus there cannot be that rapid growth as quoted by government”.

But how achievable is the middle class status?
Through NPA, government plans to drive Uganda to a middle income country by 2030 but how it plans to achieve this key ingredient of the development matrix is subject to debate.
Achieving a middle income status might be a benchmark upon which government can drive its dream of driving 50 per cent of Ugandans to the middle class by 2040.

Fred Muhumuza, a managing partner at KPMG and a former economic advisor to the Finance Ministry, says creating a middle class is not an event. “…there must be deliberate policies and incentives to propel an evolution...” he says.

“Many people who should be in the middle class are chocking on debts. You cannot sustain a middle class that is heavily indebted. That is what we partly see in our case. The middle class can only evolve through productive ventures that are less visible in Uganda,” he argues.

In its own estimates, government says it plans to lift people’s earnings through commercial agriculture to at least Shs20m per year and Shs15m for those in employment by 2040 in order to achieve a meaningful middle class citizenry.

However, data from the Ministry of Agriculture indicate that out of the more than 65 per cent of people in the agriculture sector, only 9.6 per cent are involved in commercial farming. This means majority of the 65 per cent are not earning from the sector.

Similarly, according to Ubos, more than 60 per cent of Ugandans are unemployed, meaning the few who are employed have a heavy reliance burden that keeps dragging them back to the fringes of the low income status (poor).

Achieving the middle class

Rethinking Uganda’s entire liberalisation policy is what Mawejje says can help the country realises a middle class citizenry. “It is not enough for government to facilitate business development should get involved and promote local products,” he says.

Perhaps, government is already getting involved after President Museveni directed a halt on privatisation as well as recruiting government functionaries such as the army to help in agriculture.
However, Birungi advises government to turn its labour force into a productive workforce through continuous skilling as well as investing in key economic sectors such as agriculture, education and health among others.

iladu@ug.nationmedia.com

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