CRISIS: Experts Solicit Solutions For Uganda’s ‘Hole In Bucket’ Economy

By PATRIK JARAMOGI

KAMPALA, Uganda [SHIFTMEDIA] We can no longer afford to live in denial as if it is business as usual when Uganda’s economy is bleeding.

Currently, the world in general and Uganda in particular, is lurching from crisis to crisis. The multiple crisis ranging health, economic and dire debt, coupled with increasing headline inflation reveals the systemic frailty of Uganda’s economy.

As Government grapples with addressing sky rocketing commodity prices, weaker economic growth, exchange rate depreciation amidst the increase high cost of living, SEATINI Uganda sought to solicit for solutions.

Dubbed: ‘Unlocking the potential of Uganda’s Economy: What should be done, Issues and recommendations on the way forward.”

The symposium sought to unpack a wide range of solutions in heated brainstorming session attended by academia, policy makers, members of Parliament, and the Civil Society.

Jane Nalunga the Executive Director South and Eastern Africa Trade Information and Negotiation Institute (SEATINI-Uganda) noted that the current economic meltdown has left millions of Uganda struggling.

“The current dire state of the economy is as a result of many factors including challenges such as COVID-19 impact, climate change crisis, debt crisis, as well as the Russia- Ukraine war,” said Nalunga.

She said all policies set in place by government must have the aspect of social justice in them. “Government came up with Parish Development Model (PDD), but some implementers assume its ‘per diem’ that is why the monies are being chewed even before it reaches the intended beneficiaries,” said Nalunga.

“We recognize that Government of Uganda has come up with various strategies to address the challenges at hand. However, we call for a deeper analysis of the underlying causes of the current state of the economy,”said Nalunga.

Prof. Mwambutysa Ndebesa, the Board Chairperson SEATINI noted that the people believing below the poverty line had increased from eight (8) million to 12.3 million as per the 2019/2020 Uganda National Household Surveys.

The Elephant in the room

Speaking tough, the Woman Member of Parliament for Packwach and the Vice Chairperson Parliamentary Committee on Finance Planning and Economic Development Hon Jane Avur Pacuto said the time is now to come clean and admit that the economy is tough.

“The economy is like the home, when you see times are you hard you tell your wife that times are hard, so she gets to know, and begins to adjust,” said Pacuto.

She noted that the bitter truth is that the economy is bleeding. “We can’t afford to sit and watch as if all is well, as government we need to come out and adjust so as to save the economy,” she said adding: “We must reduce on the expenditure. What if we cut on workshops and travels, so as to save? Something needs to be done and now.”

Pacuto described as misleading and confusing for on minister to come out and say things are fine and another to come out and say things are bad.

She noted that there is need for a consensus regarding addressing the dire economic crisis.

Africa Kiiza the SEATINI Uganda Senior Policy Advisor and PhD fellow at Hamburg University urged government to consider providing subsidies to especially farmers who are the backbone of the economy.

“Unless government provides subsidies, the economy will remain limping,” said Afrika. He said there is urgent need to have a deeper analysis of the underlying causes of the state of economy in order to come up with variable solutions.

He observed that Uganda’s place in the global economy, the country is trapped as a primary commodity exporter and an importer of finished products.

 

Prof. Lwanga Lunyiigo, wondered why for over 40 years that African countries have been stuck with the Washington Consensus based-economic policies nothing has been achieved.

The NRM Director for Information and Publicity Emmanuel Dombo reechoed the need for state and non-state actors to work together in addressing the challenges affecting Uganda ‘s Economy. He lashed out at the Members of Parliament for playing double standards instead of addressing economic issues affecting the people who elected them into office.

 What needs to be done?

The experts observed that much as government had put in place a series of mitigating measures to address the economic crisis, there still exists disjointed planning, policy incoherencies and actions.

Jane Nalunga noted that there is a discernable delink between the policies and programmes put in place and the challenges on ground. She observed that much as the Parish Development Model is designed to lift 17.5 million Ugandans in 3.5 million households out of poverty, the whole idea is poorly conceived.

What government needs to address is the limited budget outlay to the agricultural sector and industrialization

With the Uganda’s agriculture sector that is 90% rain fed, coupled with the less rains due to climate crisis, the allocation of UGX 1.449.8 Trillion to agriculture sector in the 2022/23 FY representing just 4.5% of the total budget cant help achieved the intended objectives

Program based Budgeting

The government has transitioned from out-put based budgeting to program-based budgeting, but despite this, the budget structures, planning and implementation are still sectoral, the experts recommend that a Parliamentary Committee on Agro industrialization be formed.

Low Utilization of Available Markets

There is need to address Uganda’s low share of exports in EAC, COMESA, SADCC, AGOA that has led to increased trade deficits

Untamed and Wasteful Expenditures

SEATINI Uganda Executive Director Jane Nalunga best described Uganda’s situation as that similar to the Harry Bellefonte ‘s song: “A Hole in The Bucket.” In this song, the leaking bucket is Uganda’s economy which is experiencing a lot of financial hemorrhage and yet little has been done to plug the leakages. Issues like huge administration burden, low absorption of funds, harmful tax incentives and exemptions, inadequate investment framework and enforcement, as well as limited role of the State in Development must be addressed.

Recommendations

• Government must address the incoherencies in planning and actions. PDM should be redesigned to address the challenges of production, productivity, value addition and available markets
• Government should increase budget to agriculture sector to at least 10% of Uganda’s national budget.
• There is need to strengthen the Ministry of Trade, Industry and Cooperatives (MTIC) to deliver on its mandate
• Government should develop one robust strategy for utilizing external markets
• Program based budgeting should be fulfilled
• Government should enforce existing policies to protect the environment.