The Independent Uganda: You get the Truth we Pay the Price
If Uganda has been the fourth best performing economy in Africa over the last 35 years, how come it has not yet entered the proverbial middle-income status like Tanzania?
Uganda began at a very low base like Tanzania but has had a very high population growth rate of up to 3.3%, the second highest in the world. With an average age of 15 years (compared to China’s 38.4 years) it means half our population don’t work i.e. are dependents. Rapid population growth cuts down per capita income growth to 2.7%. But having a young population also means most people have not lived long enough to work and accumulate savings in form of assets.
Uganda’s per capital income growth is impressive. For instance, the United States has the 8th highest per capita income in the world. But this is because it sustained an annual average rate of per capita income growth of 1.5% over a period of 150 years from 1860 to 2010. This shows Uganda’s 2.7% over 35 years as impressive, which many of our elites ignore. In fact, in his great book, Capital in the 21st Century, Thomas Piketty argues, based on the study of historic data, that “per capita income growth of 1% is extremely rapid, much more rapid than many people think.”
What has distorted people’s minds is the rapid growth of East Asian countries such as Singapore, South Korea, Taiwan and now China, the latter registering a staggering 10% annual average growth in per capita income over 40 years. For instance, per capita income growth for the whole world in the 100 years from 1913 to 2012 was 1.6%. Of this, Europe did 1.9%, America 1.5%, Africa 1.1% and Asia at 2%. That small difference in per capita income growth in Africa explains our poverty.
Yet there is an interesting take from these IMF numbers for Africa. They show that our economies have actually joined the global growth marathon. Of the ten fastest growing economies in the world over the last five years, Africa has five. These include Ethiopia (number two in the world, first in Africa with 7.37% growth), Guinea (number three in the world, two in Africa with 6.9%), Rwanda (number five in the world and three in Africa with 5.98%). Rwanda’s performance is also distorted by the 2017 election year when its growth fell from an average of 7.5% to 3.98%). Ivory coast is number seven in the world, four in Africa with 5.93% and John Magufuli’s Tanzania number eight in the world and five in Africa.
But looking at the long-term (taking the last 30 years – 1991 to 2020) SS Africa has four of the fastest growing economies in the world – Equatorial Guinea, Ethiopia, Mozambique and Angola. In the top twenty countries, Africa has seven countries. So the claim of Africa Rising has a lot of truths in it.
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Quick question, when you computed position and growth, did you factor in all other countries or did you hold them at their level?
Great point you raise, James. I should also add that by “removing the distortions of elections and COVID-19 ” Andrew introduces bias in the analysis. Nonetheless, what Amdrew should actually have concluded is that our economy is not resilient enoungh to withstand shocks such as COVID-19; even a mere presidential election sends our economy crashing at a great speed.
1.Museveni scores A when it comes to economic management of the Country. Just like Singapore;Uganda has a liberal economy, charges low taxes and the immigration policy is great .
2. Creation of cities will resolve the issue of rural-urban migration.
3.There is no turning back when it comes to development in Uganda;all investors are either into Mining ,Dairy or Agricultural production.
4.The CIA advised M7 not to think that the NUP issue was a far-fetched idea similar to the Arab spring; they told him that those children were not just playing while shaking his chair they would make him fall.
1). Andrew. Does the appearance of countries such as Rwanda, uganda, Siera Leone, Angola on a list of big performers mean anything peculiar to you? Can’t it make sense to you, even the blind, as mainly countries which had collapsed & any minimum recovery can post a big figure as growth? Just like some one being 120 out of 125 in class and improvement to 115 is looked at as better than some one who moves from position 4 to 2 in the same class? For example, uganda is one of the few counties on the globe that did well under SAP. The main reason was because it had nothing to loose. Whereas countries such as Zimbabwe, Kenya, Ivory Coast were losing hundreds of industries, uganda has nothing to lose and any small recovery because it had collapsed would be looked at as star performance.
2). What is the point of showing high figure when overburdened by the debts? Just like showing you have build 10 houses all on debt? Does that make you better than the one who has built 5 houses using his money? Do you even bother to see how overwhelmed our deficit budgets are compared to Kenya and Tanzania? Where does the money to fund the deficit come from?
3.What about the influence of former world bank president MacNamara who was so determined to do anything to make Uganda his legacy and a case study of a successful project after his failure? The Coffee boom in the 1990’s? Mineral resources discovery in the 2000’s? And of course Museveni’s consistent begging for grants and aid? I salute the Uganda’s private sector. They really work hard, only that they are frustrated by the bad taxation & government policies that don’t favour the locals at the expense of foreigners.
A good read but nonetheless a World Bank report. Sometime back around 2014 the East African newspaper reported that the models used in the economic reports a few preceding years were outdated and therefore gave wrong conclusions. Now think of the various researchers in this country and ask them what their views are on these issues. I may ask if our representative to the world bank has to be a party cadre. Then the governors in BOU mostly from EPRC.
Thank you
You can have 8 % growth for 199 years in Africa and the place will still be poor. Some very vital ingredient is missing and being overlooked in the persuit of growth numbers and btwThese growth numbers alone are useless.The rich countries record growth for years with an end result. At that developed stage growth numbers are useless. Europe has 0% growth because the roads and infrastructure are already in place. (If Sweden recorded 5% growth it would raise a lot of eyebrows) Africa has to have high growth numbers by default because the place is empty, poor. However The numbers must lead somewhere ,or it is a total waste. Africa is rising like …. for ever! Jesus took 3 days to rise
1.@ Black star;When you hear M7 compare the Economic growth of Uganda from 1986 to date its not for fun.Its a report card.
2.Statictics of Economic growth of any nation over the years are good practices that is embraced by all sober nations.
3.If a Nation has no record of economic growth how will its creditworthiness be established?
4.Do you know how good it feels when technocrats are making a PowerPoint presentation of Uganda’s Economic prospects?
5.If Jesus who had powers over all forces took 3 years to resurrect how long will a third World nation take to resurrect?
6.Do you want Uganda to be like big headed and isolated like North Korean,Cuba,Mexico and Venezula?
7. Before Real investors invest in a Nation; they first analyze at the spending capacity of the middle class.