Nowhere, either in
the National budget, or Vision 2040 or even NDP II is the average/median
Ugandan –the 14 –year –old girl. Rather, we see a bleak picture of a
technocrat/bureaucrat at the Ministry of Finance, Planning and Economic
Development (MoFPED)
From
the madness of more to wisdom of enough
About a year ago, I
was reading a report titled “Gender and
Social Inclusion: Uganda” by USAID when I came across a fascinating
highlight that has been boiling my brain for quite a while. Over the years, I
have realized that to graduate from the madness of more to the wisdom of
enough, one needs to read such reports and the likes. The highlight, in the
aforementioned report, typifies an average Ugandan and it reads, in part:
“The average Ugandan is a fourteen-year-old
girl. She is one of six children, living in a rural area; her family is poor
and it finds itself vulnerable to economic, political, and environmental
shocks. She has a one-in-four risk of becoming pregnant during adolescence, is
at high risk of being engaged in early marriage, and will likely drop out of
school before reaching secondary level. Her status is the result of a
combination of factors: poor nutrition, low performance in school, cultural
expectations related to early marriage and family size, and systems not
supporting her ambitions to thrive….”
In Uganda, the
period of March to May has traditionally been a time for assessing the
developments of the previous national budget, in order to anticipate what the
new one has in store. It is in the same period that a group of young well-meaning
economists at the Economic Hub Uganda (EHU) – a youth led think tank, where I
belong – has restlessly questioned Uganda’s budgeting process and broadly, the
relevance of her development agenda.
Driven by the above
mind boggling highlight, EHU has organized a number of conversations on
national budgets (FY 2017/2018 and FY 2018/2019), Vision 2040, and National
Developing Plan (NDP II) to interrogate the fate of a “14-year- old girl” in
Uganda’s development agenda. These conversations have given birth to a number
of questions that have got us wet under the collars. For example, is Uganda’s
national budget or broadly her development agenda oriented towards the needs of
a median or average Ugandan –the 14 –year –old girl?
After disturbing
our hair, in these conversations, we found the simplest answer to the above
disturbing question: the answer is “NO”. Nowhere, either in the National
budget, or Vision 2040 or even NDP II is the average Ugandan –the 14 –year –old
girl. Not even her parents who perhaps own separate kiosks of tomatoes on a
village street. Rather, we see a bleak picture of a technocrat/bureaucrat at
the Ministry of Finance, Planning and Economic Development (MoFPED) perhaps a
one Kenneth Mugambe –the Director of Budget, MoFPED envisaged in these
documents. We thus concluded that our dream of attaining a middle income status
by 2020, as highlighted by NDP II, is an improbable concoction –a fabricated story unlikely to happen.
Incrementalism: an old budgeting paradigm
Under the theme
“Budgeting for Economic Transformation and Social Inclusion”, EHU, in
collaboration with the MUBS Economic Forum (MEF) and Friedrich Ebert Stiftung
(FES) organized a public dialogue, on Tuesday, 30th April, 2019, at
Serena Hotel, to explore policy options to include the 14 –year –old girl in
Uganda’s development agenda, through budgeting.
Prof Ezra Suruma — Chancellor,
Makerere University attending the dialogue
The dialogue
started with a key presentation from Ramathan Ggoobi –a celebrated economist in
Uganda and coordinator of MEF. His presentation raised unpleasant facts about
Uganda’s rare economic transformation process. It revealed that Uganda’s budget
is not transformative and vocally raised recommendations to make the budget
transformative. He stressed that a budget is transformative when it invests in
sectors that encourage structural change towards higher productivity and jobs. Such
sectors as education, health and social protection that Uganda has literally
forgotten.
Interesting it was.
It is in the same dialogue that I nearly lost my voice, in contribution to the
plenary discussion, explaining that Uganda’s budgeting process is informed by
an old and perhaps a wrong paradigm of incrementalism. A paradigm is simply a
pattern of something or a model, just to escape an old criticism that
economists use a sophisticated grammar, just as lawyers. It is an old and wrong pattern to go to the
budgeting process with a predetermined position that the current budget figure
should exceed the previous figure. The budgeting environment needs to shift,
markedly, from this paradigm to one of constraints and cutback expenditure.
The
need to comprehensively review the National Budget
The beginning of
wisdom about Uganda’s national budget is that it is almost never actively
reviewed as a whole every year. Instead, it is based on last year’s budget with
special attention given to a narrow range of increases. We have an agency
–MoFPED that acts as advocate, protecting its budget base and requesting small
“incremental” increases from the previous year. Then, we have appropriations
subcommittees, in parliament and Local government that act as guardians to make
slight reductions in what the agency requests.
It is because of
that paradigm that Uganda’s budget figure is ever rising. The whole point was
that our national budget wouldn’t necessarily increase if it was
comprehensively reviewed every other year. That may be we would cutback
expenditure on public management. There is no serious economist in this country
that hasn’t questioned the logic of expanding the legislature and cabinet to
the sizes they have become
Academics
and practitioners: The big Divide
On the defensive,
Kenneth Mugambe –Director of Budget, MoFPED, as well as one of the panelists
for the dialogue dismissed my submission describing it very academic, just as
he had earlier dismissed Ggoobi’s presentation. He mistook the whole point and
rushed to conclude that I was proposing a zero-based model of budgeting.
His dismissal of my
submission, on the account of being too academic, got my two hands on the
cheeks wondering why the gap between academics and practitioners has
increasingly become a laden topic. Subsequently, I began to think that this gap
has largely outlived its usefulness, and that the recent arguments for and
against academic-practitioner collaboration are not to advance any
understanding yet.
And yet the two
contending areas are inextricably related: academics explains much of the practice
and equally practice explains much of academics. For example, academics was
used to explain some of the practices in the country and to, by and large, dismiss
the notion that Uganda is on the right development path as claimed by
government authorities at MoFPED and National Planning Authority (NPA). That
Uganda’s economy cannot structurally transform with increasing income
inequality. She cannot achieve a middle income status with the increasing
population growth rates. It is impossible when the average Ugandan is still
giving birth at the age of 14 and later becoming a grandmother at the age of
28.
For starters,
Uganda has the 9th highest population growth rate of 3.25% and the 5th
highest fertility rate of 6 kids per woman in the world. Producing kids has
thus become one the most booming sectors in the country, along with the “Jesus
sector”. And it appears as if producing more children is something legendary. Surprising
enough is that the population growth is slightly higher than growth in
Agriculture (at 2.9%) thus we are not producing enough food for the rising
population. In 1978, it was Reverand Thomas Robert Multhus who, in his classic
work “An Essay on the Principle of Population”, argued that when population
growth surpasses food growth, positive checks such as starvation, war, disease,
floods etc. would operate to return population to return population to a lower
and more sustainable level. We acknowledge that these checks are operating in
Uganda.
Rural,
informal, poor
Over the past two
decades, Uganda has endured a questionable slow economic recovery with an
average economic growth rate of 6%.
A group
of
researchers
at the Center for International Development at Harvard University (CID)
presented economic growth projections which revealed that Uganda has the
potential to be the second fastest growing economy (after India) over the
decade 2014–2024.
Well, this is the
Uganda that we saw in the ‘heavy’ documents i.e. Vision 2040, and NDP II.
However, Uganda’s growth profile also reveals unpleasant statistics. First; despite
the rosy growth statistics, Uganda has the largest number of rural population
in East Africa (82%), but with an agricultural sector that contributes the
lowest share of GDP. This implies low levels of farm productivity and high
poverty levels. My brain bells begin to ring again: will the country’s
obsession with infrastructure development improve farm productivity?
Second; rosy
economic growth statistics notwithstanding, Uganda’s urban informal sector
accounts for nearly half of GDP i.e. 42% or (1.2 million households) higher
than any other E. African country except Tanzania. Months ago, I nearly emptied
my pens pointing in these pages to decry government’s interventions in the
informal sector. Indeed, much of our growth has been happening in low
productivity sectors, mainly informal services sector with all its limitations
to create jobs and raise revenue
I also noted that
the sector’s challenge is not only to provide employment to the new entrants in
the labor force, but also to absorb millions who leave agriculture sector in
search of “non-farm” jobs. It is because of questioning such issues that I have
started losing my hair at arguably a younger age. Because of wrong
interventions, we now see young able- bodied men sell off their last piece of
land in search of a non-farm job such as boda-boda riding.
Majority of
Uganda’s workforce is also stuck in this unorganized sector, without any
written contract, social security benefit, and security of tenure. Basing on a
wealth of empirical research, I have tirelessly argued that most government
policies which attempt to “regulate” the informal sector to bring it into the
tax net, without adequate support, end up killing the sector that absorbs the
uneducated and unskilled. How do we then reduce the size of the informal sector
without killing the golden goose?
Third; Uganda
hasn’t completed the demographic transition. She has the 2nd lowest death rate
i.e. 12 per 1000 (after Kenya’s 10) but also has the highest birth rate (48 per
1000) i.e. a population growth rate of 3% per year. From the budget dialogue,
it appeared obvious that an active policy on population control is badly
needed. Granted, Uganda is one of the world’s youngest countries with about 77%
of its population below the age of 30 years and yet it presides over a high
youth unemployment rate.
Invest
in women education
Indeed
the phrase of “harnessing demographic dividend” has dominated much of the
public discussions recently. For Uganda to harness this dividend, the
population growth rate should be reduced and total employment increased.
How? By not only controlling population directly using population “control
measures” such as family planning measures but also investing in women
education and income generation. In the long run, this will increase incomes
and living standards and birth rates will decline.
Generation of
empirical research shows that if adults, particularly women, get involved in
economically productive ventures/jobs, population growth and poverty reduce.
This research should inform us to rethink of our policy interventions on
population control. It (research) calls for policies aimed at easing women’s
childcare responsibilities, improving access and use of farm labour, securing
equal access to and use of non-labour inputs, and supporting women’s education
and training.
Family planning
alone cannot control population control. Why? Behavioral economics predicts
that such interventions may increase population on the account of a ‘moral
hazard’. These measures act as incentive for people to get involved more in sex
knowing that it is protected. So, sex intercourse increases and birth rates ‘may’
increase given that the measures are not 100% protective.
Who are we
budgeting for?
Promises
kept, we need transformative budget for a better Uganda. A budget that is pro-poor
and oriented on the needs of the average Ugandan. A budget that is based on
livelihood transformation rather than expectations of economic growth. To have
such kind of a budget, we need to find answers to the following questions. Who decides
the budget in Uganda and what are his/her/their interests? Who are the players
in the budget process and what incentives are at each stage? How do we balance
the power between those who decide the budget and the average Ugandan vis-à-vis
their interests?
Darious
Mugabe is an Economist at Economic Hub Uganda and also lectures economics at
renowned Makerere University Business School (MUBS)
