Mr Daniel K. Kalinaki
Finance Minister Matia Kasaija will this afternoon deliver his tenth Budget Day speech, extending his record as the longest-serving holder of the job. It is also the 40th by the ruling NRM, a remarkable stretch. As Kasaija's speech and that of his boss will show, there's some good news.
The economy grew by 6.1 percent in the last financial year, up from 5.3 percent, powered by gold and coffee outflows as well as inflows into the oil and gas sector. Inflation remains low, in part due to low food prices, and a relatively stable Shilling. Things are projected to get better when the oil finally flows out of the ground.
Despite these rosy numbers, four out of every 10 Ugandans were still living on less than UShs8,000 per day less than five years ago. The median household monthly income in Kampala is less than a million shillings -- yet this is the highest in the country.
The tide is rising, but most people are treading water or clinging to the life rafts. There are many tweaks we can make, including progressive taxation to reduce inequality, but fundamentally we need to move faster and invest our energies and resources smarter. Six percent annual growth looks decent on paper, but it is from a low base and within touching distance of the population growth rate. To get off the treadmill and start putting some real distance between us and poverty, we must get to double-digit growth and sustain it for at least a decade.
To get there we must reform faster and more intelligently. For instance, while the share of agriculture in the economy has shrunk, the sector still employs two-thirds of the workforce.
This means that the overall productivity in the sector has either remained stagnant or has fallen as measured by output per unit of land or labour. Getting more people out of agriculture and into paid employment in services and manufacturing should be a national priority, as is putting the number and quality of jobs at the heart of the national conversation.
The government says jobs are at the top of the socio-economic agenda -- Hon Kasaija's speech last year made 15 references to jobs, up from four the year before -- but it should evolve to a monthly tracker for the number of jobs created, and perhaps quarterly changes in household income to focus hearts and minds.
To create more and better jobs, we must invest in Ugandan workers and Ugandan businesses. Our Human Capital Index, which measures the productivity of workers, shows that Ugandan workers perform at just 39 percent.
Poor health and education are mostly to blame; while Ugandans spend an average of 6.8 years in school, their learning is only worth about 4.3 years according to the World Bank. Increasing education and health outcomes must join the list of priorities with monthly or quarterly indicators.
The next step is to make life easier for Ugandan businesses. Although small businesses are job-creating dynamos, they are extremely hard to start and sustain in Uganda. The cost of compliance is too high, as is the cost of finance and utilities -- and all in a small economy with low disposable incomes.
Here are two wild card ideas for Hon Kasaija and his boss to consider. One, instead of a minister for National Guidance, let us appoint a minister for Small Businesses whose job is to collate all the barriers that they face and publicly chalk one or more off the list every month.
Second, appoint a minister for Local Business whose job is to identify and map existing businesses by sector and then develop a roadmap to support them to grow by at least 15 percent per year. This growth of (preferably but not exclusively) homegrown businesses will expand jobs, incomes and the fortunes of their related suppliers and clients.
As a local entrepreneur recently told me, “It is hard to get another Roofings to come and invest in the local steel in Uganda, but it is easier to get Roofings to expand, including into regional markets". It is a mind-bending thought.
For economics that works, you need an economy that works for Ugandans and Ugandan businesses. Then, friends, money will come.
