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What we can learn from Nyerere

By Andrew M. Mwenda

In the 1999/2000 financial year, the total budget of the government of Uganda (tax revenues plus foreign aid) was Shs 1.9 trillion. The budget for 2009/10 financial year is Shs 7.6 trillion ‘ a 400% increase. In dollar terms (the exchange rate of the shilling to the dollar in 2000 was US$ 1 to Shs 1900), the budget has increased from US$ 1 billion to US$ 4 billion. Even accounting for inflation, this performance is quite impressive.

While donors contributed 52% of the budget in 1999/2000, this has now fallen to 30%. Tax revenues in 1999/2000 were Shs 900 billion. In 2009/10 they are Shs 4.5 trillion ‘ a 500% increase in a decade. Given macroeconomic stability (i.e. control of inflation), this could only have been possible due to sustained economic growth i.e. increasing wealth. And given the weaknesses in Uganda’s tax administration it is highly likely that our tax revenues understate the performance of our economy.

The evidence that Ugandans are getting better-off is overwhelming. Mobile phone usage has increased from under 100,000 subscribers in 1999 to over 7.2m today; revenues from mobile phone companies have grown from under Shs 10 billion to over Shs 1.3 trillion. Deposits in commercial banks have increased from Shs 1 trillion in 1999 to Shs 5.3 trillion in 2009; commercial bank branches from 118 to 349. Kampala’s traffic jams are evidence of increasing prosperity.

Even in the far reaches of rural Uganda, private schools and clinics are cropping up. Mobile phone companies are establishing a technical and commercial foot hold in every village. Micro credit institutions are everywhere giving out loans. Boda bodas are taking motorised transport to the remotest parts of Uganda. The growth of economic activity has overtaken the construction sector, itself a booming industry. For example, the shortage of office space in Kampala alone is over 360,000 square meters ‘ that is 25 Workers’ Houses. This is the reason residential houses and apartments in Nakasero, Kololo, Bugolobi etc have been turned into offices.

These developments present a paradox. They show Yoweri Museveni has been a very successful president in as far as economic progress is concerned. Yet increased state revenues have not led to a proportionate increase in the ability of government to deliver public goods and services. So public schools and hospitals are collapsing under the weight of disrepair and the accompanying public education and healthcare systems are in shambles. A similar tragedy has befallen public infrastructure ‘ roads are full of potholes, the national airlines, ferries and railways have all collapsed.

With the exception of the business community, there is widespread discontent among the elite in Uganda ‘ not just in the opposition but also inside the NRM and the cabinet ‘ against Museveni. People think he is mismanaging Uganda. Others think he is focused on amassing wealth for himself, family and cronies while ordinary people wallow in poverty. Even the stupidest of rumours; that Museveni and his clan owns Garden City Shopping Mall, Stanbic Bank, Crane Bank, Munyonyo, Imperial Group of Companies, Umeme, Kampala Hilton, etc are believed.

Museveni’s reputation contrasts sharply with that of Tanzania’s Julius Nyerere. Measured in terms of economic progress, Nyerere was a disastrous leader. His country’s economy declined throughout his entire presidency. Per capita GDP fell by 40 percent between independence in 1961 and when Nyerere resigned in 1985. In spite of billions of dollars in foreign aid, Tanzania’s roads, schools, hospitals, railways and harbours all decayed. Goods were scarce in shops. Yet in spite of this apparent mismanagement, many Tanzanians continue to hold Nyerere in great esteem.

How do with explain this variation? The temptation to attribute it entirely to the way Museveni governs Uganda is strong. Yet in the 1960s, Milton Obote presided over one of the best performing economies in Africa. And unlike the mismanagement of public institutions under Museveni, the Obote government build good quality schools, hospitals, roads and factories. It also provided one of the best public healthcare and education systems in the world. Yet Nyerere, who was failing in almost every big and small initiative he undertook, was still highly regarded in Uganda while Obote was widely vilified by Ugandans and foreigners.

This paradox has been produced by the specific way in which Uganda’s politics has evolved; it seems Museveni and Obote projected personal ambition instead of a national vision. Nyerere’s honesty, integrity and simplicity showed that he cared more about his country than his person. Yet while Museveni lives in a palace guarded by over 10,000 troops and rides in executive jets, Obote exhibited almost similar simplicity as Nyerere. He lived in his personal house in Kololo, showed incredible devotion in building national institutions and his government delivered sustained growth alongside high quality public goods and services.

The difference between the three leaders is rooted in how they organised and exercised political power. Obote and Museveni (the latter in worse degree) cultivated a political following around money; through the distribution of state patronage they have been able to secure political loyalty. Yet this has tended to promote opportunistic support ‘ for without political power, loyalty dissipates.

Nyerere cultivated a political following around ideology ‘ self reliance for economic progress. He articulated it well and got many Tanzanians to buy into it. He was able to make people believe that there was an ideal they can aspire to. Thus ujaama (which I think was one of the worst human disasters of the 1970s) rallied people around a common objective. When it failed miserably, Nyerere did not fail alone; the failure was collective and thus shared by many Tanzanians.

It was for this reason that the Tanzanian state endured sustained economic decline without political conflict. Today, Uganda is held together by a growing economy that ensures that key elites have access to money. Museveni’s fate would have been like that of Felix Houphouet Boigny, the founding president of Ivory Coast. Boigny built a good economy and a greedy nation. Ivorian society was held together by money and when that disappeared, the state and nation fell apart. Museveni’s Uganda would not avoid violent conflict if economic growth petered out. However, we may be saved from this prospect by the influx of oil revenues.

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