Has Uganda's growth lead to economic and social development?

Economic development in Uganda

GDP growth: Uganda’s economy grew rapidly over the past 20 years, propelled by consistent policy reforms. Annual growth in real GDP averaged 7.4 percent over the 10 years ending in 2009/10. This generally high Growth Rate has not been enough to spearhead economic development as shown below;

Economic development of any country commonly measured by the Human development Index and the GDP per capita. Human Development Index is a comparative measure of life expectancy, literacy, education, and standards of living for countries worldwide. It is a standard means of measuring well-being, especially child welfare. It is used to distinguish whether the country is a developed, developing, or under-developed country, and also to measure the impact of economic policies on quality of life.

According to the Human development report 2010, Uganda ranks 143 out of the 169 countries assessed with a human development index of 0.422 which is low as compared to high Human development countries like Norway (0.938), Australia 0.937, and USA (0.902). Uganda’s life expectancy of about 54.1 years is still low as compared to Norway (81), Australia (82), and USA (79.6).

Poverty in Uganda has declined over 20 years, though inequality persists. The poverty head count fell from 56 percent in 1992/93 to 31 percent by 2005/06  and further to 24.5% in 2009/10(Uganda  National Household Survey 2009/10). The decline, especially between 2002/03 and 2005/06, came from better crop prices (particularly coffee), agricultural diversification, growth in non-wage, non-farm employment (primarily household enterprises), and the creation of new wage and salary jobs in urban areas, mainly Kampala. However, inequality persists among regions, between rural and urban areas, and within cities. The Gini coefficient of expenditure was 0.41 in 2005/6 and increased to 0.42 in 2009/10. War in the North until recently prevented it from developing with the rest of Uganda thus regional disparities. Households in poorer areas have fewer services and have worse health and education outcomes. Infant mortality in Kampala was 54/1000, but it is twice as high in the neighbouring districts of the central region and in the north. Student-teacher ratios and classroom sizes are much larger in poorer areas, especially in the north, resulting in lower primary completion rates and gender disparities

Population growth hampers Uganda’s economic progress. Uganda has the third highest fertility rate in the world, with 6.8 children per woman. The population has doubled since 1986. At the current growth rate of 3.4 percent, the population will grow from 32 million today to 68 million in 2035 and 100 million in 2050. Uganda’s dependency ratio of 1.12 is high, which decreases household ability to save and invest productively and puts pressure on public services.

Uganda’s progress toward the MDGs is fast in some areas (seethe notes I gave u on MDGs). Uganda

has registered strong progress and is likely to achieve MDG 1, poverty reduction and hunger eradication; MDG 2, universal primary education; and MDG 3, gender equality and empowerment of women. Poverty has fallen steadily since the late 1990s, and with the introduction of universal primary education, primary enrollment has increased to 92 percent, with near gender parity. Access to safe water in both rural and urban areas is on target; 65 percent of rural households and 71 percent of urban households have access, compared with MDG targets of 62 and 77 percent, respectively. Access to sanitation facilities is 68 percent, compared with the MDG target of 72 percent However Uganda will not reach some MDGs. Child and maternal mortality are still too high and unlikely to be met, with under five mortality of 137/1,000 and maternal mortality of 435 per 100,000 births. MDG 6, combating HIV/AIDS and malaria, and MDG 7, environmental sustainability, could still be met if given sufficient attention. The HIV/AIDS prevalence fell from 15 percent in 1990 to 6.2 percent in 2000, although it appears to be rising once more. Malaria continues to be a main cause of mortality In Uganda today.

Infrastructure investments have not matched growth in demand. The absence of adequate infrastructure – in particular in transport (90% of the transport network is by roads) and electricity – throughout urban and rural areas is the greatest obstacle to shared economic growth because it raises production costs. Improving transport connectivity between farmers and markets would induce a stronger supply response in agriculture and raise household incomes among the rural poor

Despite Uganda have made significant progress in reducing poverty, it is still a developing or poor country because its income levels are low GNP per capita of USD 501 compared to middle income bracket of USD 1000 to 11000 US. Uganda requires doubling its GDP per capita to get middle income status

.The main other impediments to tackle;

·         That Uganda growth is largely generated from the few urban centres largely Kampala.Regonal disparity remains a big challenge. This has an effect on business community, why would an investor go to work in district or region with limited government presence or intervention?

·         We need on both the private sector and public sector in delivery of services. The private sector premium or user costs are high and only serve to exploit the poor. The public sector as well has failed to deliver public services like infrastructural improvements in energy; railway which would reduce costs of transactions thus costs of products.

·         Political influence in the planning, and budget execution process. Often times u get presidential orders to create districts against what was set out in the National development plan to reduce administration costs

·         Corruption- we have both elements of corruption in Uganda, the political corruption along with administrative. The former being the dominant and this has lead to impunity mushroom in politicians heads. Largely the oversight bodies are not effective since it can be argued that they are not independent- another next 5 years of ineffectiveness- passing on bills in the only  target , one can commend parliament.

·         Poor public servants attitude- you want to moonlight and do you other things, public service is the place one would crave to be in. high absenteeism, high vacancy rates are observed year in year out. Why pay someone for being absent? If absent why not take action against these guys

·         Doing business is increasing becoming difficult given poor infrastructure and corruption among others that Uganda currently ranks 112^th out of the 183 economies measured by the Doing Business 2010 report on the overall ease of doing business.

·         Lack of skills and integrated systems for  the function of the agencies also affects productivity and efficiency

·         Population growth as explained above

The state in Africa has a crucial role to play in facing various current and emerging development challenges. Unfortunately as aforementioned our state is like a broken bridge. Driving on the road with a broken bridge means u cannot reach your destiny, thus even with increased inputs and budgets- we still have same development challenges. Thus we need to focus on patch up the bridge. It all is political and requires political answers and commitment. Malaysia’s successful economic transformation was achieved by deliberate state Intervention, based on a disciplined planning process (state).NB. Malaysia and Uganda had same GDP per capita in 19970s