There is a need for an honest recognition that Uganda’s overarching economic policy strategy is defective, thus a return to the drawing board. I will explain. But first, a caveat is in order.
I am not an economist! My reflections and impressions are shaped by my field of academic training and professional specialisation – the study of politics. Thus, I come at this from the lens of national economic strategy as a function of politics and power play.
It wasn’t very long that our 1986 rulers fully embraced the articles of faith of neoliberalism and what was then dubbed the ‘Washington Consensus’, an agenda propagated by Western financial institutions and buttressed especially by the treasury of the United States of America.
Despite a supposed leftist, Marxist ideological background that would mean a sceptical attitude towards faith in free markets, and even after for a while toying with alternatives to standard market practices, President Museveni and his NRM government dramatically imbibed the neoliberal agenda.
At its core, it was an unmodulated faith in the magic of the free market to deliver a poor country like Uganda to the promised land of material prosperity. Except that, not in 1986 and not in 2026, there is no compelling evidence that an economically poor, socially and technologically backward country anywhere in the world ever attained economic turnaround through the magic of the market.
No doubt, the market is a very powerful tool that drives economic activity and shapes individual or firm incentives, but on their own, markets, however free, have never transformed societies. There is something more, in fact, many ingredients, that go into a grand strategy of national economic transformation.
A great deal of the problem is to conflate markets with capitalism, and to assume that unfettered capitalist pursuit of profit under conditions of unregulated markets means there will be economic growth and prosperity for all. Not quite.
In the case of Uganda, as I argued last week, under the neoliberal regime of economics over the last three decades, we got some modest economic growth but not much to write home about in attaining a turnaround.
In the main, we are still stuck in the colonially created structure as a raw material exporting economy, and an importer of expensive finished goods we are unable to produce domestically precisely because we lack the skills and sophistication to do so.
There has been a smattering of industrial parks here and there, the production of tiles, textiles and marble in Kapeka and Karamoja, but not much significant progress in real industrialisation as to move the needle in expanding the overall size of our economy.
The policy choices taken in 1989/1990 have proved sticky and hard to reverse despite recent haphazard attempts at returning to the basics, including reviving the national airliner and recapitalising the national development bank.
The cavalier disposal of Uganda Commercial Bank was arguably the biggest blunder of all. It handed the nation’s countrywide retail and small business banking needs to foreign capitalist interests that are unlikely to have a long-term vested interest in Uganda’s national development ambitions.
There is big rhetorical talk of a $500b economy in, God knows, how long from now and the quest for integrating all Ugandans in the formal economy. But the rulers must make hard choices and bold decisions, the first of which is to divest from the purveyors of free market fundamentalism.
President Museveni has been on record conceding that the only thing he regrets was to have listened to external actors. Unless Uganda, and indeed all of Africa, reasserts policy sovereignty and pursues policies and programmes that reflect local thinking and appreciation of what we want as a people, big talk and lofty ideas will lead nowhere.
There are lessons from elsewhere to look to. For a while now, a popular phrase in development economics is the notion of ‘capitalism with Chinese characteristics’ to denote a distinct approach the Chinese took to their breathtaking march from a pitifully poor country only a few decades ago to a global economic and military superpower of our times.
Before China, the so-called Asian Tigers (Malaysia, Singapore, South Korea, and Taiwan) pulled off their own route to transformation from third- to first-world nations, doing so by not listening to some received wisdom from Western experts or the policy dictates of the World Bank and the International Monetary Fund. In fact, quite the contrary, they pulled off their economic ‘miracle’ by defying those Western financial bullies.
If Uganda under the NRM has the revolutionary credentials its supporters trumpet, undertaking an autonomous and homegrown economic strategy would be the definitive reflection. This hasn’t been. Thus, the ramblings by a one Ian Otega, suggesting the NRM and Museveni are comparable to China and Mao Zedong and that there is a Deng Xiaoping in the offing, are either crass intellectual dishonesty or blithely ignorance.