Why Ugandans are getting poorer?

New report explains it using 12 pillars

COVER STORY | RONALD MUSOKE | Overall, Ugandans are better off today than they were 10 years ago, according to a report published on Feb.28 by the Legatum Institute, a London-based think-tank. On specifics, however, many Ugandans are far worse off than they were back then.

According to the report, Ugandans have better living conditions, health, and education. On the economic front, they enjoy better infrastructure and access to markets and an improved investment environment. On the worse side, although they enjoy better safety and security, today Ugandans endure a poorer level of governance and reduced personal freedom and social capital.

Based on the report, these worse indicators are the reason Ugandans are poor. Based on the report, Ugandans are not as prosperous as they could be because the government has focused on improving the economy and social services while limiting personal freedom. The result has been bad governance.

Uganda, for example, is ranked among the most improved countries in health globally over the last 10 years. It has improved 11 positions on the ranking. The health measure assesses the extent to which people are healthy and have access to the necessary services to maintain good health.

It has also been ranked very highly on access to electricity with the report noting how it has tripled from 12% in 2010 to 42% in 2020. The report also notes that the country recently launched a last-mile connectivity project, aimed at increasing rural electricity access, which according to the government has increased it to 57%.

But Uganda has sank five positions down on the personal freedom ranking with freedom of assembly and association, speech and access to information, and equality before the law, all tumbling down.

It has also sunk four positions on the governance raking. Indicators that are going down include executive constraint, political accountability, rule of law, regulatory quality and institutional trust, and government integrity and effectiveness.

“Prosperity is more than mere economic growth,” the report authors say, “It also requires political and social development.”

They add: “Prosperity is built when leaders make choices to develop a society that works for everyone – a society that is inclusive and has a strong social contract that protects the fundamental liberties and security of each individual.”

“It is driven by an open economy that harnesses the ideas and talents of the people of a nation. This in turn builds an enabling environment for all to flourish by fulfilling their unique potential and playing their part in strengthening their families, communities, and nations.”

The crucial test

According to the Legatum Institute, a crucial test of the accountability of governments and integrity of leaders is whether power can be transferred peacefully. It is perhaps not surprising that sub-Saharan Africa has four of the longest serving presidents in the world with each leader having been in power for an average of 37 years.

Between them, Presidents Teodore Obiang Nguema of Equatorial Guinea, Paul Biya (Cameroon), Denis Sassou Nguessa (Congo-Brazzaville) and President Yoweri Museveni of Uganda have ruled for a total of about 150 years.

But Ugandans can be consoled by the fact that they are not in the worst place on the planet. Uganda is ranked far above many countries in Sub-Saharan Africa although the region is prospering at a slower pace than the rest of the world, according to the report.

Entitled the “Prosperity Index 2023”, the Legatum Institute report, just like World Bank, the Atlantic Council, and the Institute for Global Prosperity (IGP), routinely measure prosperity and release reports. Their definitions of prosperity vary based on who is measuring it, the type of measurement used, and what is being measured.

According to the Legatum Institute, “prosperity” is loosely interpreted as every person having the opportunity to thrive by fulfilling their unique potential and playing their part in strengthening their communities and nations.

For the past 16 years, the Legatum Institute has been analysing countries based on 12 pillars and 300 indicators to compile the index. The goal has been to answer two questions: How do countries become prosperous? And why are some of the least developed states like Uganda not catching up to the rest?

“Prosperity,” says the Legatum Institute, “is not just about what we have, but also who we become.”

It measures prosperity on 12 pillars: Safety and Security, Personal Freedom, Governance, Social Capital, Investment Environment, Enterprise Conditions, Infrastructure and Market Access and Economic Quality. Others are Living Conditions, Health, Education, and Natural Environment.

According to the Index which was first launched in 2007, the most prosperous countries in the world have high levels of personal freedom, safety and security as well as education and health.

Such countries also have healthy natural environments and conditions that promote economic prosperity through features such as protection of investments, favourable business regulations and a healthy market infrastructure. These elements represent some of the 12 indices that are analyzed and weighted.

Worst and best countries

The Legatum Prosperity Index is in its 16th year and measures what it defines as prosperity in 167 countries around the world representing close to 99% of the world’s population.

The latest edition ranks Denmark as the most prosperous country in the world. The Scandinavian nation is followed by its Nordic neighbours; Sweden, Norway and Finland while Switzerland, The Netherlands, Luxembourg, Iceland, Germany and New Zealand complete the top ten most prosperous countries in the world. At the bottom of the Index are; Sudan, Syria, Eritrea, the Democratic Republic of Congo, Chad, Somalia, Afghanistan, Central African Republic, Yemen and South Sudan. That means Africa and more specifically the sub-Saharan part of the continent is lagging. The sub-region remains the lowest-ranked region for prosperity, and is the worst-performing region in eight out of 12 pillars.

But the index shows there are highlights of progress in the sub-Saharan Africa region; especially in the areas of basic needs in health, education and living conditions. Of the 49 countries that comprise the sub-region, 39 saw prosperity grow during the survey period with basic needs in health, education and living conditions being met more than ever.

Still, there is lack of progress in core political and economic institutions; a situation that the report notes is holding back the region’s prosperity.

Overall, however, the region saw an improvement in its prosperity in the last decade. In particular, sub-Saharan Africa saw the greatest progress in infrastructure and market access with Guinea, Botswana and Gabon experiencing the largest improvements in the pillar in the region.

Among the notable improvements in Sub-Saharan Africa include a drop in the percentage of people living on less than US$1.90 a day from 47.2% to 36.4% while under-5 mortality has fallen from 98 deaths per 1,000 children to 70.6 deaths. Primary school completion rates have also risen from 56% to 65% over the same period.

But these are also the most promising trends across the globe. For example, the percentage of people living on less than US$5.50 a day has fallen globally from 57% to 47% globally and has halved in East Asia and the Pacific from 56% to 28%.

The percentage of children completing lower secondary school has risen from 74% to 80%. In Central and South Asia, it has risen from 68% to 79% while the mortality rate for children under five has fallen from 37 deaths to 26 deaths per 1,000 children. In Sub-Saharan Africa it has fallen from 98 deaths to 71 deaths per 1,000 children.

Sub-Saharan Africa also saw the greatest deterioration in safety and security out of all regions, with Mali, South Sudan and Cameroon deteriorating at the greatest rate. Particularly, it is the increase in terrorism and civil conflict that led the decline in the pillar.

For example; conflict deaths have risen three-fold to 24,000 while deaths from terrorism have risen from 800 to 9000. Of the 54 African countries, 36 saw a deterioration in freedom of assembly and association.

The region also remains weak economically. Annual GDP per capita growth has fallen from 3.1% to 0.3% and government debt is said to have risen from 32% to 62% of GDP on average. Meanwhile youth unemployment has risen from 12.1% to 15.4%.

Africa’s most prosperous countries

Mauritius (47th in the world) is the most prosperous African country followed in second place by Seychelles (51), South Africa (75), Cape Verde (80), Botswana (83), Sao Tome and Principe (87), Namibia (90), Ghana (98), Senegal (102) and Kenya completes the top-10 list on the continent.

Within the East African Community, Kenya remains the most prosperous country and it is followed by Rwanda (11th on the continent and 111th in the world), Tanzania (13th in Africa and 117th in the world) and Uganda (21 in Africa and 129th in the world). South Sudan (49 in sub-Saharan Africa and 167th in the world) is the least prosperous country in the world.

Meanwhile, Côte d’Ivoire (15th in sub-Saharan Africa and 120th in the world) has seen its prosperity improve more than any other nation in the past decade. The country’s governance improved at the highest rate globally in this period.

The West African country experienced a 47-rank improvement thanks to a policy of reconciliation maintained by the current administration following the armed conflict that raged on until 2011. This has seen government effectiveness rise 101 places from 165th to 64th in the world.

On the other hand, a decline in safety and security following political instability and a decade-long conflict saw prosperity in Mali (37th in sub-Saharan Africa and 151st in the world) deteriorate at the greatest rate in a decade. Mali’s ranking for safety and security fell 91 places to 158th, placing the country among the worst countries globally thanks to 326 terror-related injuries registered in 2020 compared to zero injuries in 2010.

Deteriorating civil liberties

Many countries, including several fragile democracies have deteriorating civil liberties. This is the most concerning trend according to the Index. It says executive constraints have deteriorated in every region, other than Western Europe, and the level to which executive powers are effectively limited by the judiciary and legislature has decreased.

According to the authors of the Index, recent economic shocks and attacks on political institutions around the world have curtailed the achievement in prosperity during the last decade. The impact of these upheavals on the least prosperous countries was only one of a number of challenges they faced.

“This led us to analyse the performance of the bottom 40 countries in 2023 and compared them with other countries over the last decade. We wanted to know if the development gap was widening or narrowing. So, we asked: Is prosperity in the world converging or diverging?”

“The good news is that basic needs are being met more than ever especially in health, education and living conditions are improving around the globe; most notably the bottom 40 in 2023 have since been catching up with the rest of the world,” the report reads in part.

“People around the globe are now better educated, better fed and protected against preventable diseases. In these areas of development, we are heading towards a converging world. But when we turn to other aspects of prosperity, the world’s least prosperous countries have been trailing further behind and not catching up overall.”

Of these bottom 40, twelve have experienced deteriorating prosperity. Safety and security have worsened for those countries of the bottom of the index with most of the two billion people affected by conflict residing in these countries. In the bottom 40 countries of the index, there are fewer people in the workforce than 10 years ago.

Personal freedoms have particularly deteriorated in as many as 108 countries with Hong Kong coming off worse. The semi-autonomous Chinese territory is said to have fallen from 47th position in the personal freedom ranking to 98th over the decade.

In the area of political diversity and media perspectives, India fell from 3rd to 89th in the last 10 years while eastern Europe registered the biggest improvement in the area of social capital (41% to 74%). However, the report noted that this particular element has also been rising around the world.

Overall, while the world’s least prosperous countries are improving, they are not catching up with the rest of the world. For example, notes the Index, in six out of 12 pillars of the Prosperity Index, the bottom 40 countries have deteriorated, while, on average, the rest of the world has improved.

While the bottom 40 group saw improvement in some areas, the progress was not fast enough to catch up to the rest of the world. While extensive trade deals allowed prosperous nations to gain access to almost half of the world’s markets, the bottom 40 countries have access to less than a third as much.

The report notes that the scope of the trade deals of the bottom 40 countries increased from 8% to only 12% of the global economy. In contrast, the top 40 countries have increased their trade deal access to foreign markets for goods from 31% of the global economy to 45%.

There are also long-term weaknesses in the global economy, including declining productivity and rising unemployment. For example, there has been a long-term slowdown in productivity around the world, and, apart from in Asia, the countries at the bottom of the Index have not caught up with the rest of the world in productivity.

While productivity in Asian countries continues to rise, it has flatlined in Africa and is deteriorating in Latin America and the Caribbean. In Sub-Saharan Africa today, the average worker produces goods and services worth $11,700 – just $600 more than 10 years ago. In Latin America and the Caribbean, the average worker produces less than they did 10 years ago.

Speaking during the launch of the Index in London, Kemi Badenoch, the British Secretary of State for Business and International Trade, discussed the importance of international trade, saying: “Free and fair trade is what global prosperity and security are based on. And it is not an empty platitude.”

“Trade means treating companies and countries equally and making sure that the rules are abided by. That is what’s going to work for the UK and for the rest of the world,” she said.

Meanwhile, the report notes that the most concerning global trend is the backsliding of democratic practices and the deterioration of civil liberties around the world; affecting all regions and countries throughout the index. For example, the level to which executive powers are effectively limited by the judiciary and legislature has decreased in every region other than Western Europe. The same is true of civil liberties.

Over the last decade, personal freedoms have deteriorated and as many as 108 countries with an increasing hostility towards freedom of assembly and association. Furthermore, freedom of speech is under threat, with censorship increasingly common around the world including in democratic countries.

“The decline in democratic institutions comes at a time when the liberal international order is facing a meaningful challenge for the first time since the Cold War by actors such as the Kremlin and Beijing,” the report notes.

“Today, we find a world that is converging in humanitarian progress but diverging in the strength of both its political institutions and the core economic structures that lay the ground for true prosperity.”

“It is the challenge of our lifetime to safeguard the principles of liberal democracy, including the rule of law, personal freedoms and the affirmation of human dignity that over generations have brought peace, stability and economic growth to billions of people. To achieve widespread prosperity, these principles must prevail.”