2 July 2011

Uganda: Agriculture is the Way Out for Country


EVERY country adopts a development model that its leadership thinks will lead it to prosperity. Makerere University economist Prof. Augustine Nuwagaba thinks Uganda should focus on large-scale commercial agriculture. Moses Mulondo talked to him.

You recently said the 2011/2012 budget was misguided because the Government attempted to please everybody. Can you elaborate.

It was a balanced budget. It could be interpreted as a populist budget. The Government attempted to have an intervention in every sector. You have to focus effort by doing strategic flag-shipping of the economy which means you focus efforts by allocating more resources to selected key sectors. In the case of Uganda, agriculture, energy and education should be our major focus. Instead of trying to do everything, it is better to focus on one sector and raise funds to cater for other sectors later. There is no country that can do everything.

Do you have an example of a country that has implemented that kind of strategy successfully?

The best example of this philosophy is Mauritius who focus their national budget on only one sector and they give it over 70% every five years and they have done this since 1995 and through that process Mauritius has greatly developed. This African country now has one of the fastest growing economies in the world with a human development index of 0.87% almost the same as that of Denmark. Uganda's human development index is still as low as 0.5%. What Mauritius has done differently is flagshipping where for so long they have been concentrating their national budget on one sector at a time.

Do you think the Uganda government has also been in the recent years trying to implement that strategy since it has been concentrating resources on infrastructure, energy and education?

Well, they have tried to do so. But there has been a problem of absorption because for many years the Government has tried that the implementation has become a problem. You remember the over sh600b which the Ministry of Works failed to utilise. That means beside appropriate budget allocation, we need budget absorption and value for money. The Government tried to focus on infrastructure but we have a problem of absorption and value for money.

With just 7% of arable land, China is able to feed 22% of the world population. Don't you think with over 43% of East Africa being arable land, Uganda can become a world food basket and become very rich?

That can only happen if three things are done. The first is agricultural financing that can lead to large-scale production. Most of the agriculture in Uganda takes place on small-scale (subsistence). This cannot even be enough for household needs. There is need to streamline the land market to provide ample land for large-scale production. We should allocate our resources bearing in mind that our competitiveness as a nation in the international market is in agriculture.

China's development was tailored to their culture, history and socio-economic reality. Is that kind of approach applicable to Uganda?

Development is a cultural issue tailored to what you are. Even on an individual level, development is initiated from within. That is why I recommended the need for us to use agriculture as our development model. Africa should not depend on foreign aid but depend on money generated by herself.

What do you mean by that?

I mean our development should be driven by funds generated internally from our economic activities. There is no way aid money can develop a country.

As an economist, what do you think is the best development model Uganda should adopt?

It is by focusing our resources and efforts on the agriculture sector. There is no way Uganda can take off without focusing on agriculture. It is where we can have an edge in the international market. It is the sector where our comparative advantage is. It is a sector which supports over 80% of Ugandans. It is the sector which brings in the highest foreign exchange into our economy.

How can that strategy be implemented?

Sixty-eight per cent of Uganda's agriculture is still at the subsistence level. In the process of flagshipping the agriculture sector, we should move away from subsistence agriculture to commercial agriculture. We should move away from rudimentary methods like use of hoes to mechanised agriculture where we use tractors.

It should be commercialisation of agriculture, mechanised agriculture, agro-processing and value addition. And as we go commercial agriculture, we shall go agro-based industries all over the country and this will lead to backward and forward linkages (benefiting both urban and rural dwellers by way of job creation) and everybody will benefit.

Once the Government does that, it will have empowered every Ugandan to be rich and its prosperity for all programme will have meaning in the ears of Ugandans. The day Uganda adopts that strategy of flagshipping the agriculture sector, every Uganda household will be in position to contribute effectively to the economy.

What other sectors do you think Uganda should give more priority so as boost our economy?

We also have competitiveness in tourism because Uganda has got a lot of tourism potential but most of it is not exploited. The problem is lack of an international marketing infrastructure. Kenya has outdone us in that area. Another area is energy due to the many water bodies we have.

If all the forms of energy we have are exploited, we can export energy to other countries and get a lot foreign exchange from it. The oil resource will also greatly boost Uganda's economy if it is effectively utilised. The education sector is another area where Uganda has an edge over other countries in the East and Central African region.

As an economist and researcher, have you established why the productivity of Uganda's workers is one of the lowest in the world to the extent that the productivity of one Kenyan is equivalent to that of six Uganda workers?

There are two basic reasons for that. Have you also bothered to find out why one Kenyan lecturer earns a salary of six Ugandan lecturers? Because a Kenyan lecturer earns six times more than a Uganda lecturer, he is motivated to be more devoted to his job.

Uganda's major problem is, therefore, the lack of an incentive structure. The rewards for Uganda workers are very low compared to those of their counterparts in many other countries. The other problem is attitude to work. The attitude of Ugandan workers leaves a lot to be desired because even many of th relatively well paid ones are not devoted to their work. Work ethics are so poor in Uganda.

What's the cause?

It has to do with our upbringing. Our society has not made us to be that. That is why Kenyans are now managing our hotels. Ugandans will not be able to compete effectively in the East African market because employers the world over look for productivity in workers.

Last year, while presenting a paper on poverty eradication at the Buganda conference, you said the reason the central government has failed to eradicate poverty is because it operates a consumption-driven other than a production-driven budget. Can you elaborate this?

Actually it is not only the national budget. The entire orientation of our culture is that we are a consumerism society. Look at our people who afford to get some money. They think in terms of buying posh cars and building very expensive houses. That cannot be the way to go. That kind of culture does not develop an economy.

Can you imagine people even get loans from banks to make weddings instead of getting loans for business? In Netherlands, the Prime Minister, rides a bicycle to work. In China and India rich people use bicycles to get around. That cannot happen here. That is why India and China now attract more Africans to go there and study business.

What should we do?

It high time we learnt from their saving culture. Their people are saving and investment-minded. An average Chinese saves 43% of his earnings and this is precisely why the global economic crisis never affected China. Many world countries have their savings in negatives.

In Singapore, one of the Asian tigers that have achieved exceptional economic growth, everybody was taught to make sure that they transform Singapore from a third to a first-world country and they did very well. China also did the same. China was able to reduce poverty from 44% in the 1990s to the current 4%.

What does it to undertake such measures?

You must radicalise governance to make people nationally conscious and ensure value for money. When we visited China, I asked their cabinet ministers the magic behind their sporadic economic growth and they told us that they got angry and ambitiously announced to undertake radical measures to eradicate poverty.

How I wish our new cabinet that has just been sworn in could purpose to undertake radical measures to eradicate poverty from Ugandans. It hurts me to keep offering these ideas to other countries and they implement them yet my motherland is not.

In Malaysia and Singapore where progress in poverty eradication has been realised, corruption is a highly risky venture. In Singapore for instance, corruption was made a capital offence and this even compels culprits to commit suicide before they are subjected to any punishment.

There is a good example of a housing minister in Singapore who committed suicide after he was implicated in corruption. In South Korea, corruption was reduced using the firing squad. That is the standard which transformed these countries.

How can your recent research proposal of the need for a paradigm shift revamp Uganda's economy?

From the research I have done I have discovered there is an urgent need for a radical shift in our education from the current theoretical formal training to human capital development education.

Currently, what we have is simply schooling. We should change from schooling to skills development and capacity building education which in the end will make our graduates more creative, innovative, practical, and job creators.

This can be done in two ways. The first one is by building a positive attitude towards work. There has to be a system promoting application of intellectual abilities and skills into job creation. The other way is through adopting the correct curriculum.

How unique is that curriculum?

It is a dual national qualification framework where there is integration of the informal/vocational practical training comprising mechanic, metal fabrication, carpentry, etc together with the formal training. The curriculum integrates the two so that every graduate regardless of what course he will have done, he will have a practical skill which can help him create his own job.

The countries leading in this kind of curriculum are China and Tanzania. I have already developed this kind of curriculum and very soon I am taking it to Gambia for implementation. For me, I am already making my money from all these ideas but what hurts me is that my own country has not adoped them. China started that in 1990. In China, people who excel in the informal sector, metal fabrication for instance, are awarded titles like that of professor even if they didn't get much formal education.

What should Uganda do to get the best deal in the East African Common Market?

By positioning itself in the common market and by ensuring that it has the highest contribution of goods, services, and capital. We should strive to have the best quality in all those areas.

But our industrial sector is in its infancy; far below that of Kenya. How can our industrial production outcompete that of Kenya?

Kenya has a symmetrical (industrial) economy which is far better than the economies of other member states. If you have only one symmetrical economy in an economic integration, it is very unlikely that such integration can last.

The European Union is succeeding because each country has something to offer in the market which is not the case with the East African Community. Actually, Idi Amin was right to pull Uganda out of the East African Community because Kenya was taking over 60% of the opportunities resulting from the integration.

Are saying Uganda should again move out of the East African Community?

No. I suggest that we address the current problems which are what led to the collapse of the first East African Community. As a country, we should position ourselves in agriculture, energy, education so that we can have goods and services to sell the common market.

You were the consultant in the recent formulation of a Commonwealth Heads of Government (CHOGM) research paper titled "Transforming Commonwealth countries to achieve political economic and human development". What were the key recommendations in that research?

The key recommendation was that the transformation of the poor Commonwealth countries, Uganda inclusive, should be focused on massive investment in human capital/population as the greatest asset these countries have. The other finding is the need for transformative leadership at all levels.

How do you define that transformative leadership which your research recommended?

This is the kind of leadership which focuses at re-orientation of people's attitudes and building a producer good (skill) within these persons so that we benefit from our demographic bonus where Ugandan, for example, is rendered productive in contributing to the total production volume of the country, thereby positioning everyone to contribute to the country's economic development.

What were your findings in the research you conducted on the trends of urban poverty in Uganda?

By the way, I did my doctorate on this very subject. That research established that, contrary to what most people think, there is increasing urban poverty.

What is the cause of that?

It is due to two major factors. One is the haphazard rural-urban migration where people move to towns looking for means of survival other than moving to town to contribute to urban development.

In Europe people moved to towns to work in factories that had been constructed. Urbanisation in Europe was driven by industrialisation.

In Uganda, since there are no factories in which to work, those migrating have resorted to settling in slums where the cost of living can enable them survive. The second factor is Uganda's problem of poor urban planning. Due to insufficient funds and corruption, urban authorities have failed to plan for the migrating people to towns. The two have resulted in the urbanisation of poverty.

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