What should Uganda do from the perspective of infrastructural development and sustainability?
Uganda has recently embarked on the move to work on structural constraints that have kept its citizenry in abject poverty for years although several government initiatives have been adopted to counteract them. These have been in the form of various interventions in key sectors like energy, transport and communication, among others.
Key among these projects is the Shs 41.1 billion Nile cable-stayed bridge, the Karuma hydro-power plant, the Entebbe expressway, and the recently launched Kampala flyovers, to mention but a few.
In its national budget for the last three financial years, the government has placed emphasis on these sectors. In fact, the key development document, i.e. the Second National Development Plan (NDPII), clearly specifies that in the short and medium terms, these sectors are priorities for the country.
It should also be noted that the country aspires to reach middle-income status ‘next year’, i.e. in 2020. According to the World Bank, a middle-income country is that country with annual per capita income ranging between $1,025 and $12,615. However, Uganda’s per capita income still lies only at $604.04 as per the 2017 World Bank’s records.
Uganda’s target is, however, to attain lower middle-income status with an annual per capita income of $1,033, according to the NDPII. This means all Ugandans, including children, the elderly or any other non-working class citizen, on average should each be earning at least $1,033 (Shs 3.5 million) annually or $86 (Shs 290,000) monthly.
This broader aspiration requires a well-organised economy with almost all sectors massively working interdependently to leverage one another’s economic advantages through well-streamlined and planned linkages.
Given the fact that the majority of Ugandans engage in agriculture as the main economic activity, emphasis on transport infrastructure is key to connecting the farmers to viable markets as well as reducing the cost of transport to connect farm produce to markets.
Electricity or power supply, on the other hand, is key especially to transforming farm produce into valuable products that can command a significant market. In addition, its availability, especially at reduced costs, encourages the establishment of industries that can absorb the increasing number of unemployed and underemployed Ugandans.
Good infrastructure combined with a skilled workforce and an enabling business environment are the ingredients for Uganda to benefit from opportunities such as the East African integration and, ultimately, achieve high rates of growth since they facilitate efficient connectivity and ease the movement of goods.
Infrastructure enables trade, powers businesses, connects workers to their jobs, creates opportunities for struggling communities and protects the nation from the increasingly unpredictable natural environmental hazards. A healthy economy needs reliable infrastructure to strengthen supply chains and efficiently move goods and services not only domestically within Uganda, but also across borders.
Although infrastructure is key, caution needs to be taken regarding who finances it as well as the general cost implications for each form of infrastructure that needs to be established. Where loans/public debts are secured for these infrastructures, there is need to ensure that these investments yield significant returns in the form of higher growth so that the loans can service themselves.
The government should also improve on the manner in which it plans and executes its investment projects as this is paramount in determining the viability of these investments before funds are disbursed.
Emphasis should be put on increasing tax revenues by at least 0.5 per cent of GDP per year – and, of course, the government should ensure that citizens get value for their tax money.
Then over the medium term, higher growth, with increased tax collection and with the infrastructural programmes completed, this will make the overall fiscal deficit meet the government’s three per cent of GDP target to ensure that public debt declines again.
In addition, infrastructure development should not be to the detriment of social spending on health and education. Just like infrastructure, these sectors are needed to ensure that all Ugandans can seize the opportunities offered by improved infrastructure and regional integration in the form of East African Community or any other regional community to which Uganda subscribes.
The author works with the SPEED project at Makerere University’s School of Public Health.