PALISA, Uganda: As is the norm, Uganda joined the rest of the world to celebrate the workers’ day (May 1st). The function took place in eastern town of Palisa district. And as is usually the case, Ugandan president Yoweri Museveni graced the event as the chief guest where he made one of the most unfortunate speeches he has ever made this year.
If one was critical enough they could have noticed over seven falsehoods he made in Palisa. Below, I will labor to line them up:
False number one: Uganda’s ‘economy growing at 6%’
One of the most unfortunate falsehoods was for the Ugandan president to categorically state without shame that the Ugandan economy continued to grow by 6%! What a lie the President was made to tell! The economy has been doing so bad that over twenty investors have closed business in Uganda.
The truth is that over the last two years the Ugandan economy has been wobbling between a total recession and a depression. Some few years ago the president was livid with suggestions that he was running a super market economy. He was of the view that the country needed to run an industrial economy.
And it’s a fact that we have a consumerist economy where most citizens consume rather than engage in production. It must be noted that you can easily detect the performance of a consumerist economy by assessing the performance of supermarkets.
Look at the major supermarkets which have suffered due to the slowdown of the Ugandan economy and either closed some of their branches whereas others completely closed shop. They include Uchumi, Shoprite and Nakumat.
If the economy is doing well, it can easily be detected by the high level of consumption that takes place. That is why the supermarket becomes a very good yard stick for assessing the state of the economy because it’s the place where we spend money. Once the citizens don’t have disposable income to spend, the supermarkets will suffer the consequences and close business. At the moment there is no sign that the available supermarkets will survive the wrath of the rotting economy.
The Banking Sector:
You can also asses the health of the economy by looking at the stability of the banks which are the custodians of savings in the citizens. Over the last few years, over six banks have closed business in Uganda.
These include the recently closed crane bank –although one may argue that it was indiscipline of the proprietor that led to its demise, it had a lot to do with the poor state of the economy. Then you had national bank of commerce, Barclays bank, global trust bank and many others also closing shop in Uganda.
It’s highly unlikely that you could have such a big attrition rate of banks closing business in an economy that is growing at 6%, as openly stated by president Museveni.
The Telecom Sector
In the telecoms segment, you all know UTL collapsed a longtime ago but has been on ‘drip’. And even before its poor state became public, it was making loses, only that they were being absorbed by the Libyan late leader Col Muamar Gadhafi.
Then you had Warid also suffering setbacks which were offset by merging with airtel. MTN itself admitted recently that they were operating in loses. How does this happen in an economy growing at 6%? It clearly shows that the telecoms’ sector is living on very slippery ground because the economy is receding rather than growing as president Museveni is made to suggest.
Falsehood Two: Illegal Fishmonger Depleted Fish in Uganda
Another falsehood that the Ugandan president peddled was for him to say that criminal fishmongers were the ones to account for the plummeting fish in Ugandan lakes. The truth is that Uganda has lived with illegal fishmongers since emergence mankind. They have always poached young fish, but we have never suffered such a shortage of fish in this country.
So what happened to the fish? President Museveni went abroad and invited hundreds of investors to come to Ugandan with fish processing plants. What happened then was that the market demand exceeded the supply of fish. We had very many processing plants chasing very limited fish.
In the end over twelve fish processing plants had to close business in Uganda. And President Museveni reacted angrily by deploying the police and the army to crack down on the illegal fishing. Well, the illegal fishmongers have also played a part in depleting fish in Ugandan water bodies but the truth is that the fish was overfished by the many processing plants.
And that is the fact that the Ugandan president doesn’t want to admit. It’s something to do with low productivity for a very huge market that he creates. He needs to stop his indiscriminate invitation of investors to have a regulated exploitation of the fish.
Falsehood Three: Civil Servants Are Impeding Investors
There is another falsehood that president Museveni continues to hawk around that civil servants have impeded investors from investing in the country. The truth is that investors have been impeded by poor, unreasonable policies of the Ugandan government like high power tariff costs, unreasonable taxation regime, unstable political environment, poor infrastructure, high interest rate, corruption which are chasing away investors.
Although investors get tax holidays, they are then trapped with very high power tariffs and poor infrastructure and unpredictable political environment which make investments in the country very unfeasible.
Falsehood Four: NRM Will Institute the Minimum Wage
The Ugandan president also made another falsehood when he said that he was willing to institute the minimum wage after the recommendations of cabinet. The truth which the president has always failed to tell the country is that government cannot institute a minimum wage in an economy that is largely private sector led.
Once you adopted a private sector led economy, it meant that you had to let the market forces to regulate the way that private sector does business. It means that the government has no right to impose a given wage to be given by the employer to the workers.
If you institute a minimum wage, it will actually create unemployment because, it (that minimum wage) will certainly turnout to be very high for the employers. Because given the volatile nature of the Ugandan economy, you will have to compute the minimum wage by basing it on inflation and the cost of living which will obviously amount to be more than what the employers are willing to pay their workers.
In the end the employer will either be forced to cut down on the number of workers, or close business. Yet in a liberal environment, the worker can reach a consensus with the employer about what wages he wishes to be paid. Therefore instituting a minimum wage sounds politically correct the thing to do but it comes with a big practical baggage for both the employer and the employee.
Falsehood Five: Uganda Is a Very Rich Country
Another falsehood that the president told Ugandans was that Uganda is one of the richest countries in the world. What riches do you have in Uganda Mr. President? Be honest; Uganda is not rich at all.
In fact at the onset of independence, the Britons assessed Uganda and found that its wealth was hugely exaggerated. They had tried to plant coffee, cotton and exploit copper in Kilembe mines, – which explains why the Ugandan economy thrived on three Cs.
But after 70 years of ruling Uganda, the Britons had realized that they were making more losses than what they had anticipated. They, for instance, realized that they failed to recover the costs they invested in the Ugandan railway.
So they hastily decided not to colonize Uganda but to just have it as a protectorate. Even then the objective of having Uganda as part of its empire was to protect river Nile from a hostile country. And once that was assured, they decided to grant Uganda independence without a fight.
So when you say that Uganda is very rich, what do you mean? Let me tell you this; Uganda is largely agricultural, but it cannot feed itself but needs the world food program to rescue its citizens. What explains that fact that we currently have famine ravaging the country?
We joined the AGOA, an initiative that allowed us a tariff free access to the American markets, – but what happened? We failed to full fill our market quota because we couldn’t produce enough for the agreed market. Other than spewing falsehoods, the Ugandan president needs to get back to the drawing board.
The truth is that we need to work on our productivity before we even think of the East African Market-because we cannot fulfill it. Another truth is that Uganda is not necessarily rich but it has the potential to grow rich through hard work and proper policies. But the problem is that we luck a leadership that is honest enough to face the challenges faced by this country. I rest my case