Responding to hard economic times

The price of petrol is closing in on Shs6,000 a litre. The steady march seems unstoppable. Prices of most consumer goods having been rising since late last year. The most pronounced price spike was that of soap.

Fresh-market goods have generally gone with the trend of fuel and supermarket prices. And this week, the shilling came up for some thorough beating not seen in years.

The last time we faced a severe economic situation, with rapid rise in fuel and food inflation, was more than 10 years ago, in 2011. This was on the heels of a general election in March that year. On the eve of the elections, we had an enormous injection of campaign cash into the economy and, consequently, the shilling was nearly brought to its knees.

We just came out of another general election in January last year in the middle of an unprecedented global pandemic. Why we needed holding such an election defies logic. Today, much talk about the economic situation tends to conveniently default to the Russia-Ukraine war, yet the latter came around only a few months ago when Uganda’s economic situation was already precarious.

Our economic woes have much to do with our internal economic mismanagement and political imprudence than external shocks. It is no mere coincidence that the economy get a hit shortly after a general election. The political class, especially the incumbent rulers, have no qualms throwing everything to the wind when it comes to maintaining a grip on power.

Economic crises have historically been the most important source of major political changes around the world. In Africa, in the early 1990s governments that came up against sustained economic instability and widespread hardships got swept away by mass uprisings and popular demands for change.

Most recently, economic strains in North America and the Middle East in late 2010 and early 2011 set off social and political movements, initially in the streets, that brought down long-surviving regimes.

In some countries, peaceful street protests quickly gave way to armed confrontations and ultimately civil wars that have ravaged countries like Libya, Syria and Yemen.

On our own turf, the 2011 economic crisis, especially the spike in gasoline prices fuelled a most unprecedented challenge to the political status quo and provided perhaps the biggest popular threat against President Museveni’s continued stay in power.

This is why the authorities in Kampala won’t risk having Dr Kizza Besigye address rallies and call on people to liberate themselves from the biting economic conditions. When he led Walk-to-Work protests in 2011, the police under Gen Kale Kayihura had its toughest job securing the government.

Uganda never recovered from the politics of protest and defiance that came in full force during Walk-to-Work. We have remained in the mode of contentious and confrontation politics, the ruler wary of being overrun through popular uprising and their challengers sticking to seeking to defeat the rulership through defiance and resistance, not formal political engagement.

As matters stand, it does not appear that the government has a sound and solid plan of responding to the runaway economic crisis. Matters are likely to get worse precisely because of the sheer arrogance of power that comes with a government of nearly four decades, but the long regime of rule also means running out of big ideas to tackle biting issues.

The current system of rule is in survival mode. It can tinker with a few policies here and there,  but the primary focus is on maintaining the prized seat in state house.

The bad news for the rulers is that this can’t go on forever. As the economic situation worsens and the average citizen can’t manage the most of needs, it becomes impossible to sustain the façade of a functioning government. Collapse becomes inevitable.

Museveni has for long been adept at shuffling the cards and recalibrating things, but this too has its limits. The times keep shifting, the social and demographic forces are mounting, the environmental and ecological dimensions get worse, and when the economy writ large gets stressed out and stretched to the limit, the political implications are difficult to negotiate.

Contrary to the received wisdom of Musevenomics that I wrote about last week, the government can actually take modest measures to arrest price. But this can only yield short-term results.

The long-term solution requires overhaul and radical reform that the current rulers are simply incapable of mustering or even contemplating. It would need abandoning the profligacy of state house and a bloated government, and redirecting resources in a frugal, systematic and deliberate manner that powers productivity and sound growth. Unfortunately, this won’t happen anytime soon.

[email protected]