Skip to main content

A SHIFT AWAY FROM AGRICULTURE IS CRITICAL FOR UGANDA


Anyone who has half a stake in this country would be a keen observer of the economy and the direction it is taking.

In the last three decades the economy has shown strong growth, only slowing to overcome bad weather, a global financial crisis or unrest in the region.

Compared to when I started out in business, it has become a more liberal economy, with individual initiative being rewarded more and more. While the economy is still dominated by the informal sector, the formal sector is growing annually.

But the biggest shift in the economy has to be the reduction in agriculture’s share of the economy from more than 80 percent to about 25 percent today.

This has happened despite the leap in the production of everything from bananas to coffee or from milk to maize. What has happened is that more of the economy – though not nearly enough, has been taken up by industry, construction and services.

This is how it should be and in fact, more work is needed in shifting this balance even further away from agriculture.

We should do away with agriculture all together. No. In fact we need to produce more, but more efficiently.

At the end of the Second World War 30 million families relied on agriculture for a livelihood a number that has plummeted to about three million today. But the US is still the largest exporter of agricultural produce in the world. And yet agriculture only comprises one percent of that country’s GDP.

In fact agriculture can serve as the stepping stone as it has done everywhere else.

Countries which have industrialised have first taken care of agriculture and more specifically they have ensured food security. They have done this by improving the productivity of their farms through improved farming practices – the use fertiliser, irrigation and improved genetics.

The surpluses they have produced have been processed and stored for their own use or exported to other countries with deficits.

To improve efficiency these countries have mechanised their agriculture, which has meant less labour needed in the fields, which has led to consolidation of small holdings. The former farm hands migrated to the cities to man industry.

This is the development trajectory we must follow, in fact accelerate, if we are to see improved living standards for all Ugandans across the board in our life time.

Unfortunately we do not have the luxury of time. Sequencing is not an option. We are going to have to do many things at once.

A lot of work is being done on infrastructure development. Our transport, energy and ICT infrastructure are considerably far behind where they have to be to meet our development ambitions.

Good infrastructure is critical for ease of doing business in any economy. It means goods and services can get around quicker and people can be more productive.

In addition we need to work on our soft infrastructure, the laws and institutions that we operate under. We not only have to bring them up to date but we need to commit to executing them transparently and quickly.

In anticipation for the shift towards industry and services we need to reskill the labour force with more relevant skills than the rote learning they got in school a higher investment in skill training centers will be crucial.

Traditional economics emphasises the play of land, capital and labour as the factors of production to which can be added entrepreneurship, the ability to manipulate the above mentioned factors to deliver goods and services.

Entrepreneurship is a skill that can be taught and nurtured by mentoring. A critical skill for our economy.

Recently when renowned economist Professor Sir Paul Collier was in town at the invitation of the Bank of Uganda. He said one of the key things that would help transform this economy is the development of modern companies.

By modern companies I took him to mean, companies that are well set up, have strategic visions and 
have the potential to compete on the world stage.

My point is this, that while we need to shift more resources towards agriculture, it is advancements in the other productive sectors – industry and services, that will generate the jobs and raise incomes all around.

(JULY 2018)

Labels:

Comments

Post a Comment

Popular posts from this blog

OUR WOMEN AMONG THE BEST ENTREPRENEURS BUT…

A study carried out in 57 countries around the world established that Ugandan women are among the most entrepreneurial in the world. The 2018 Mastercard Index of Women’s Entrepreneurship released last week showed that one in three businesses or 33.8 percent of businesses in this country belong to women. Our women were third behind their counterparts in Ghana, 44.4 percent and Russia, 34.6 percent. Survey after survey has shown that Uganda is one of the most entrepreneurial counties in the world, so it should come as little surprise that our women are among the most entrepreneurial in the world.  This does not in any way take away from their own initiative and resilience in surviving our competitive business environment. Our entrepreneurialism was forced upon us by the hard times we faced as a nation in the 1970s and 1980s, when few if any salaries could carry families through the month. For the majority of us who did not have the option of leaving the country...
Post a Comment
Read more

LET US GIVE SMEs A CHANCE

Something is wrong when most of Ugandan business is shut out of the government procurement process. This is happening in Uganda today. Micro-, Small & Medium Enterprises (MSMEs) account for 90 percent of the private sector. These account for 65 percent of national output (GDP). On the other hand 75 percent of our now sh32trillion national budget is earmarked for public procurement but the MSMEs’ share of this action is only 15 percent. It does not take a rocket scientist to see that such numbers are behind the huge inequalities in our society and why the majority of us do not have hope of a better and brighter future. Thankfully this is not an insurmountable problem. If MSMEs had access to more opportunities accruing from the national budget the benefits to themselves and to the nation as a whole would be huge. These would include increased production which would lead to job creation, raise incomes at household levels, leading to reduced income ine...
Post a Comment
Read more

UMEME A RECOGNISED SUCCESS BUT …

  Recently the World Bank did a survey of the power utilities on the continent. Of the 39 utilities surveyed only two, in Uganda – Umeme and in Seychelles, were able to cover their operating costs and capital expenditures – maintenance and expansion of the grid. The report went on to point out that only 19 or about half of the surveyed utilities were able to meet their everyday costs like salaries. Essentially most of our power utilities on the continent are technically bankrupt. This has far reaching ramifications for the industry as a whole. When you, the client, pays your bill, Umeme then passes money up the line to pay the transmission and generation companies. If Umeme does not collect the revenues due to it or does not price the power at an appropriate rate, the pain will be felt up and down the sector. The transmission company would not be able to maintain and extend its network and the generation company would not be able to generate efficiently or build ...
Post a Comment
Read more

DEAL WITH PLASTICS BEFORE ITS TOO LATE

The first rainy season seems to have passed. Not too soon for some of us. It has become standard now that with the rains come the floods and with every season these become not only more and more daunting, but spread all over Kampala. While KCCA has done a lot of work in improving drainage, we are undoing the good work with our bad habits. Everyday we dispose of tons of plastic improperly, these find their way into the existing drainage systems of this city. These cause blockages, which we go about blissfully unaware of until the rainy season begins. The rainwater not only struggles to go past existing blockages but comes along with its own load of plastics to reinforce the existing blockage. The water, which should be finding its way to Lake Victoria, swells out of the drains and finds its way onto the road, into our offices and our homes. That’s the simplified version of events.  This is before we even start examining how we are building in the wetlands ...
Post a Comment
Read more

OUR HISTORICAL SITES SHOULD NOT GO UNATTENDED TO

Recently I was at Makerere University to attend a wedding ceremony. I hadn’t been on the university’s grounds in a while. I was shocked at how run down Mary Stuart and Lumumba Halls were. They are in need of serious work. These thoughts were reawakened with the recent launch of the coffee table book “Beyond the Reeds and Bricks” promoted by the tourism ministry, the cross cultural foundation of Uganda and the European Union Delegation. The book which is aimed at the protection of historical sites and buildings in Kampala, Entebbe and Jinja, is a moving collection of pictures of buildings and sites we know, but probably take for granted when we pass them as we go about our business. "Entebe za Mugula in Entebbe, Mackay’s Cave, the post office in Entebbe, the Stanbic Bank Branch in Jinja, Hamu Mukasa’s house in Mengo, the main building at Makerere , the Bahai Temple, Kibuli mosque and many other sites have pride of place among the 60 pictures in this book, which is ...
Post a Comment
Read more