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8 bottlenecks to a sustainable economy

By Yoweri Kaguta Museveni

Lack of democracy and peace, corruption and weak states  interfere with the building of the economy

As far as Uganda is concerned, you cannot build a robust and sustainably developing economy if you do not deal with the following eight bottlenecks:

A human resource that is not developed through education and with improved health.  In many African countries, this is being addressed.  In Uganda, for instance, UPE (Universal Primary Education), USE (Universal Secondary Education) and broader higher education have expanded literacy to 70 per cent and above; and the skilling of the population is on the move.

Lack of respect for the Private Sector that had become characteristic of Africa in the 1960s and 1970s.  In Uganda, the attack on the private sector went to the extent of Idi Amin physically uprooting the Indian community that were a crucial element of our entrepreneurial class.

Inadequate development of the infrastructure, especially electricity, the railways, the roads, ICT and water works.  The useful measurement that illuminates this issue is kWh per capita.  The kWh per capita of the USA is 14,000.  Some of the African countries have as low as 12.

The problem of low electricity is on account of two reasons.  Reason number one is that many of the public servants and other actors seemed not to understand the importance of electricity in socio-economic transformation.

Where the actors have been aware, the problem has been on account of relying on external funding.  The external funders have been indifferent to the electricity needs of, certainly, Uganda.  At one time we were told that Uganda was in danger of having “too much” electricity by seeking to add a mere 700 MW to our very low levels of electricity output.

Without solving the issue of infrastructure, we continue with high production costs which undermine the profitability of private companies and, therefore, discourage investments into the continent.  All countries in Africa, except for South Africa and Libya, still have very low levels of electricity output.

This must change if we are to develop.  Certainly, in the case of Uganda, we shall never again listen to advice that doesn’t advocate for the fast development of the electricity sector in our country.

Small internal markets created by the balkanisation of colonisation.  This bottleneck is being addressed through market integration by the way of the regional blocs – EAC, COMESA, ECOWAS, ECCAS and SADEC.  We are also working for the Common Market of the whole of Africa.

In addition to this, we have also negotiated for quota-free, tariff-free access to external markets with the USA, EU, China, Japan, etc.  Those who offered these markets should operationalize the offer.

Exporting raw materials has also been another problem.  I am talking about lack of industrialisation and value addition.  By exporting unprocessed agricultural and mineral products (coffee, cotton, minerals, etc.), Africa has been a “donor” to the advanced economies, “donating” money and jobs to those economies.  Value addition and industrialisation are the answers.  We must produce finished products instead of continuing to export raw materials.

Where we succeed in this effort, the results are huge – more money and jobs.  The milk and tea sectors in Uganda are good examples.  They do not only satisfy the local market, but they also generate exports and jobs.

The Services Sector (tourism, professional services, insurance, etc.) is also not developed in many African countries.  The modest efforts we have undertaken in the Tourism sector are already rewarding us with US$ 820 million per annum from 1.5 million tourists.

This is just on account of the peace we have brought to our country and the reasonable hotel coverage that is today in place.  Promotion is still poor.  Yet reasonable earnings are beginning to flow in.  Given Uganda’s unequalled good climate, wild life (National Parks) as well as geographical features (high snow-capped mountains on the Equator, huge fresh water lakes, the Rive Nile, etc.), Uganda’s potential is huge but is yet unexploited.

Undeveloped agriculture is another bottleneck.  In many African countries, especially in the tropics, traditional agriculture is still being practiced.  Traditional agriculture was mainly for subsistence.  It was not designed for commercial purposes.

Commercial agriculture needs improved seeds, irrigation, improved breeding stock and improved agricultural practices and bio-technology.  With the value addition mentioned above and the use of fertilisers, production and earnings from agriculture will go up by huge margins.

To take one example, traditional agriculture in Uganda yields 5.3 tonnes of bananas per hectare per annum.  However, in the government banana farm at Nyaruzinga, where inputs and improved methods are being used, the yields have jumped to 53 tonnes per hectare per annum.

I am told that in Brazil, you can get up to 80 tonnes in the same acreage in a year.  Another problem for agriculture is the traditional ways of inheritance which lead to land fragmentation.  When the proprietor dies, traditionally the practice is that land is divided especially among the males.

This leads to smaller and smaller plots of land each successive generation.  This practice should stop and inheritance should be by shares rather than the physical division of land.

Lack of democracy, lack of peace, corruption and weak states also interfere with the building of the economy. Where these have been addressed, the economy will boom.

The above bottlenecks notwithstanding, while other parts of the World have been experiencing low rates of growth (the Euro Area 0.35%), Africa’s rate of growth has been 5.8%.   One third of all the economies in Africa have been growing at the rates of 6% and above.  Ethiopia has been growing at the rate of 8.5% per annum.

As we continue to resolve the bottlenecks mentioned above, Africa’s economy will roar at greater speed.  Is this surprising?  It should not be because the African population has been under-consuming for the last 500 years.

Now that they are getting out of that long darkness of slave trade, colonialism and neo-colonialism, the impact of the African populations on the World economy will be greatly felt.  This is good for Africa and for the rest of the World.

President Yoweri Museveni gave this speech on June 1 at the Tokyo International Conference on African Development (TICAD) in Yokohama, Japan.

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