Augustin Ruzindana
16 May 2008
opinion
Availability of good infrastructure- roads, power, water, housing, telephones- and stability, not tax incentives or free land, are the most crucial factors that attract investors.
Therefore, when you see a government with a monotonous song about a private sector-led economy and yet it neglects infrastructure, then you know it is just paying lip service to private sector-led development, particularly through direct foreign investment.
The road infrastructure in Uganda is so dilapidated that only a speculative investor can seriously think of investing in Uganda. The statistics of the Uganda Investment Authority are no guide since they only show licensed, not actual operational investment projects. The Chairperson of Ntungamo District Social Services and Works Committee aptly described the state of roads in Uganda when he reported to the District Council on April 30, that the Kahunga-Nyakyera- Rukoni (Ruhaama County), Katinda-Kigarama (Kajara County), Rubaare-Kyempene (Rushenyi County) roads "are almost impassable with deep potholes and gulleys."
Otherwise, how can you explain the fact that after the 22-year rule by one man, most of the household consumer goods are imported from Kenya and more recently South Africa? What happened to the import substitution and the self sustaining economy of the Ten Point Programme?
Matters will even be worse when the Customs Union becomes fully operational! There won't then be any reason for investment in Uganda when there is a more conducive environment in a neighbouring country with better infrastructure and less financial demands on businesses from the top echelon of government.
The high prices for food and other commodities, though global, have a unique Ugandan angle. The high prices for Matoke, meat, milk and other local foodstuff have neither been affected by the increase in demand in India and China, nor South Sudan and other countries in the region. It is mainly a problem of lack of adequate attention by government for quite a long time.
The proportion of the budget allocated to agriculture is miniscule. Thus in spite of good weather and good soils production of crops per acre is among the lowest in the world. There is no use of fertilizers and manure. Improved seeds are not available to the farmer. Extension services, despite the NAADS programme, are non-existent. Then there is the added problem of reduced production as a result of insecurity in the northern areas where millions of people were in IDP camps.
The farm gate prices have not increased appreciably as the President suggested in a recent speech. Matoke, beans, maize and milk prices paid to the farmer are still very low. Production near the consuming areas like Kampala is also very low, so transport costs contribute a disproportionate share of the final price to the urban consumer. Government's lack of interest in the plight of the ordinary person is another factor.
Elsewhere in the world governments are mounting various forms of interventions but the Uganda government insists it will not influence prices in any way.
All in all the high prices in Uganda are a result of government inaction, policies that have failed to work plus the debilitating effects of corruption, ineptitude and the inertia of a government that has overstayed its useful lifespan. All governments that overstay inevitably become corrupt and abuse people's rights.
The writer is former MP for Ruhaama County
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