The Independent Uganda: You get the Truth we Pay the Price
Why steady economic growth may no longer save Uganda from stagnation
COMMENT | NNANDA KIZITO SSERUWAGI | I have spent some good time recently ruminating about what is likely to be the future of our small economies in the age of Artificial Intelligence (AI). I have also worried about how our place in the world is likely to shrink even further, given the expansive dominance likely to be the consequence of the AI-driven technological transformation that the world’s leading countries are likely to attain. AI is daunting, even to the Americas and Chinas of this world – the powerful nations at the helm of advancing the technology. Their citizens are worried about being rendered economically irrelevant by the possibilities promised and even already realised by this technology. It is only prudent that we in the Global South should be concerned too. Even more concerned.
Our concerns can be captured by reflecting on what the AI revolution actually means. I came of adolescence at a time when Bill Gates was famously the richest person in the world. His company, Microsoft, was successful for building useful software. A few years down the road, AI has brought such transformative power that software did not have. The AI agents that Anthropic, OpenAI, Google DeepMind, and xAI have scaled and delivered to everyone’s pocket are a compression of entire systems capable of outperforming cognitive labour at scale. A lot of the white-collar jobs involves writing, analysis, legal reasoning, coding, medical diagnosis, financial modelling, scientific research, etc. AI is having such a profound impact on these jobs. Every day that passes, it is becoming even more foolish to trust these tasks with a human. AI, even in its infancy now, is unimaginably more proficient, more competent, more skilled. You can only prefer a human doing such work the same way you might prefer riding a horse to work or reading under candlelight.
There was always a plan. Many of our countries are still implementing national development plans that think along the lines of that historical pathway to development whose strategy was manufacturing-led growth. The process was known to take a few steps. A country had to build industries, just like Uganda is currently investing in industrial parks across the country. The factories in these industries would then absorb surplus labour from agriculture. Then you had to invest in the export sector to put your goods and services on the international market, accumulate more capital, and gradually move up the value chain. That’s the general trajectory most advanced countries followed. If you read Uganda’s National Development Plan IV (NDP IV), our strategy to accelerate economic growth and achieve Vision 2040, we are following this similar trajectory.
It may not yet seem so apparent, but soon it will be obvious that the automation of labour brought by AI technologies will disrupt this proven development pathway. Africa still had the hope of attracting low-skill manufacturing by exploiting its comparatively low-cost of labour. AI is eroding this at the base, in the developed countries. China may have been the last country to harness this historical advantage. Unless it is doing so on humanitarian considerations, no corporation would need Uganda’s low-cost labour when it can more efficiently and quite cheaply use robots in Shenzhen.
A report published by the UNDP in 2025 warned of the risk of AI “sparking a new era of divergence as development gaps between countries widen”. AI could end the progress made in the past 50 years in closing the development gap. Already, there is a huge disparity in how AI is concentrated across the world. With only 17% of the global population, high-income countries are home to 87% of notable AI models, 86% of AI startups, and attract 91% of venture capital funding. Uganda, and all our low-income cousins hold less than 0.1% of global data center capacity. Put simply, we do not have what it takes to build the physical and intellectual infrastructure of the AI economy.
Whereas Uganda’s GDP growth is estimated to be at an annual average of 6.3%, and is projected to clock 10% per annum when oil revenues begin flowing, I think that we may realise economic growth internally but remain stagnant economically on the global scale. Currently, our GDP per capita is about $1,208. Most of our labour force, 72% of it, contributes just 25% of GDP through agriculture. That is the structural ratio that says everything problematic about our economy’s productivity. Whereas most Ugandans work, and work hard, they produce very little value output per worker.
But there are even more structural vulnerabilities at play. We do not have the digital infrastructure to participate in the AI economy. Whether it is access to reliable electricity, internet access… more than half of our population is simply off the digital grid. And I am not even writing a treatise of governance failures to blame government, but simply pointing out how worrisome our circumstances are. I have previously argued that even with its best performance, the government of Uganda is so structurally constrained that it cannot adequately fund basic public services like heath and education from its revenues. Even before corruption and wasteful expenditure, the money is simply not available. This is not an excuse for government accountability. And there are no buts. It is just the case that with such a limited fiscal space, our government is incapable of building world-class digital infrastructure or fund AI research.
So, given this dilemma, what is our likely fate? Whereas Uganda and similar economies may not decline further behind in absolute terms, they are likely to continue in their dependence on external technology systems, being as it is that they are at the lowest level of the AI value chain. We are likely going to remain users and raw materials for the AI industry, not participants in its economy. We are on the edge of becoming so irrelevant to the global economy that our relevance will be limited to being a small market for technology products and a destination for aid-funded digital projects. The loss of economic sovereignty likely to be wrought by AI dependency is likely to render us eternally stagnant in our participation in the global economy.
And it is not all doom. There are so many benefits we shall earn from the advancement of AI technologies. So many challenges specific to our context will likely be part of what AI addresses as it matures, but these achievements will not be as transformative as they would have been had we been at the frontier of building AI. Even when the World Economic Forum’s Future Jobs Report projects what 170 million new jobs will be created globally against 92 million jobs displaced over the next five years, these opportunities will less likely be in our geographical location.
The economic future of Uganda may not be worse than it is. We are likely to see continued growth but at the margins of the global economy. The projected 10% growth from oil dividends should not be over-marked with hope, since resource booms are more often wasted than invested wisely.
I think that Uganda will cut its edge in the world as a key humanitarian and geopolitical asset in Eastern Africa. The world will look to us to stabilise the region and fight pandemics. But as a meaningful player in the global knowledge economy? No.
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The writer is a Ugandan thinking about Uganda.
