In this article, Leonard Okello explores the political economy of Uganda since the pre-colonial era and how it has impacted on poverty alleviation.
He argues that in the pre-colonial era, land was communally owned and everyone worked together to produce a good harvest for the family and community; however, the colonial state, which was inherited at independence, was designed to serve the interest of its owners.
The establishment of British rule in Uganda came with a typical colonial economic exploitation strategy to make money for the British empire. It grabbed the best land without any consultation. Many young men ran away from forced labour in the north only to end up as forced labourers in plantations in central Uganda.
To reinforce the efficiency of an exploitative economic system, the colonial government imported Indian workers to build the Uganda Railway. With the railway done, these coolies, as they were known, took to farming, growing cotton, tea, coffee and sugar, supported by cheap labour from Rwanda, Burundi and northern and north western Uganda.
Progressively, some local people started becoming outgrowers and later formed the cooperative societies that became a formidable structure of Uganda’s anti-colonial movement. After independence came in 1962, the country went through a series of political upheavals that further diminished the possibility of meaningful poverty reduction.
The new government was led by young energetic, people, mainly from peasant farming backgrounds, believers in the Pan African dream and admirers of the Maoist and Socialist revolutions in China and Russia respectively.
In the first five-year development plan, the ruling party took a major decision that was to lay the foundation for fighting poverty in Uganda that included: building 22 rural hospitals to expand access to health services; expanding primary and secondary school education by taking over church-founded education institutions and abolishing admission based on religious affiliation, hence opening up chances to all students based on performance and instituting district higher education bursary schemes.
The cooperative unions became a very efficient and value-added means by which farmers got cheap inputs and competitive market prices for their crops. The first Obote government started the process of nationalization of mostly agro-based industries and strengthening government control of industry and labour.
After Idi Amin Dada assumed office, he appointed semi-illiterates from northwestern Uganda with very limited or no experience to manage public affairs. This situation destroyed the civil service that had been built in the first ten years of independence.
He also had “a vision from God” to liberate the Ugandan economy by expelling the non-citizen Asians from Uganda, giving them only 90 days and 90 kilogrammes of property to leave Uganda. Under the Obote II regime, Uganda, to some extent, temporarily stabilized as the government tried to reorganize the economy.
It adopted a new five-year Rehabilitation and Recovery programme, which aimed at controlling inflation and rehabilitating the production sector by resuscitating fledgling cooperative societies and unions, the agricultural sector and all other sectors. This stability, however, was short-lived with the Luwero triangle war disrupting production in the central region, which had been the economic engine of Uganda.
In 1986, Yoweri Museveni took over power with young, energetic, ambitious graduates, who had left college to join the guerillas and found themselves ministers only within five years. The new team, driven mainly by liberation war slogans and ideals, soon had to grapple with tough political and economic challenges, including a collapsed economy, empty shops, food shortages and silent industries following many years of conflict and the economic war of Idi Amin.
The new leaders attempted to introduce medieval-times trade regimes such as barter trade into a modern international trade arena largely controlled by institutions such as the World Bank and International Monetary Fund. But while this registered a few successes, such as importing government vehicles in exchange for coffee, it was simply too complicated a system in the context of contemporary international finance and trade regimes.
Within three years, the revolutionaries started waking up to the realities of global geopolitics and international trade and finance which had set up shop in Uganda with their true might. Trying to appease these forces would result in the return of confiscated property to the Asians who left in 1972; liberalization and privatization of government parastatals; a tight fiscal and monetary policy discipline and deregulation of investment processes to make them more attractive to foreign direct investments, amongst others.
The revolutionaries stooped to accept these rules of the game – urgently liberalising and privatising the Uganda economy. This policy was also exciting for the new team which also saw in privatization the opportunity to acquire personal wealth.
Among the results of the policy included major privatization of social services such as education, health and electricity supply, which simply increased their costs to unacceptable levels for the average citizen; liberalising the economy through the deregulation policy that made it easier for foreign direct investments to flow into Uganda with tax exemptions; closing the ministry of cooperatives, selling off all disposable property of the cooperative unions without consulting shareholders; adopting a new land policy that makes it very difficult for landlords to evict squatters, weakening their ability to create investments using their land, yet at the same time encouraging the commercialization of land ownership.
The beneficiaries of these policies remain small but very powerful groups – the politically connected elite. Unfortunately, they have not invested their wealth into serious economic development options such as industrialization (e.g. food processing); they are instead investing in small-sized hotels, targeting tourists, and in the service sector. The lack of investment in strategic industrialization and agriculture has meant that the average peasant famer does not have any serious and sure market in which to sell his produce.
These policies have also increased massive rural-urban migration, especially to the capital city. In the final analysis, the state must get back into regulating the economy in such a way that investments enable the poor and excluded people of this country to become more productive.
This means strategic investment in human capital and in strategic management of natural resources; investment in agricultural enterprises and agro-based industries; more investment in democratisation and accountable governance.
The author is executive director, International HIV Aids Alliance.