President Museveni Explains the dead Economy NRM Inherited
When Amin left in 1979, a leadership vacuum emerged which increased the level of insecurity, weakening all attempts at economic reform and reconstruction by the three governments that ruled Uganda between 1979 and 1980.
Obote reclaimed power in 1980 and attempted a recovery programme to raise GDP growth, reduce inflation and revive production. Using the dual foreign exchange rate system, he devalued the shilling and floated it, increased agricultural produce prices and attempted to reform the monetary and fiscal policy. However, the economic reforms introduced were as short-lived as his government.
After 1983, Obote abandoned the recovery programme and engaged in expansionist fiscal and monetary policies that led to resurgence of inflation and a drastic fall in GDP growth. He printed a lot of money to finance the budget deficits, leading to hyperinflation. For example, money supply increased by 127% in 1984, accelerating inflation by 140% between January 1984 and January 1985.
The Obote government also failed to keep within set expenditure limits. For example, in 1984 alone, there was a four-fold increase in public-sector wages, financed by domestic borrowing from banks and the central bank. Domestic borrowing increased by 70% in 1984.Foreign exchange controls were tightened in 1985, as arms purchases competed with consumer imports
By the time Obote was toppled by the military in July 1985, Ugandans were living agonizing lives. During the brief regime of Tito Okello Lutwa in 1985, the economy slipped out of control.Lutwa’s reign saw GDP fall by 5.5% (that is, instead of growing, Uganda’s GDP declined by 5.5%). The period beginning mid-1984 and January 1986 marked a steep deterioration in Uganda’s economic performance. The looting and general insecurity that accompanied the fall of Obote led to shortages of consumer goods and fuel. The rural economy was devastated and the whole economy went into a free fall.
Therefore, when NRM came to power in 1986, it inherited a country and an economy in ruins. The colonial (enclave) economy had been destroyed by Amin and Obote and completely finished off during the six months of Lutwa’s leadership.
Inflation had reached 240% by the time NRM took power in January 1986, while GDP growth had declined to 0.3%, itself being driven by the subsistence sector. 21 GDP per capita growth was negative. For example, in 1984 per capita income fell by -3.49% and the shrinking of incomes worsened to -6.47% in 1985. Life expectancy for Ugandans had reduced to 48 years. This is the reason Ugandans should always be very careful when scrutinizing the credentials of individuals popping up to lead our country.
Beginning in 1987, NRM instituted economic reforms to pull the country out of the economic pit that past leaders had dumped it in. It began by abolishing price controls and allowing prices to be determined by supply and demand in free markets. Liberal market policies increased competition, and better prices were paid to the farmers and other producers. This is the reason Ugandans went back to their gardens and farms to produce, while others built factories to supply most of the essential goods we easily access today.
NRM also restored the value of the shilling through currency reforms at the beginning of May 1987. It re-established fiscal and monetary discipline, which enabled Uganda to achieve and maintain macroeconomic stability.
NRM also embarked on private sector-led development by founding Uganda Investment Authority (UIA) in 1991, and privatized parastatals that were performing poorly to reduce the fiscal drain on the national treasury and promoted private businesses.
The string of initiatives was buttressed by the creation of the Uganda Revenue Authority (URA) in 1991 to improve revenue collection and administration. Taxes on exports were abolished, leading to a rapid increase in foreign exchange earnings. The foreign exchange market was liberalised to let the value of the shilling be determined largely by foreign currency inflows from exports, other sources and the demand for foreign currencies to buy imports. This eliminated the kibanda foreign exchange markets which were distorting foreign exchange market, making Ugandans unable to access foreign goods and industrial raw materials. The increased exports also greatly reduced shortages in foreign exchange.
By the late 1990s, the reforms had helped Uganda achieve minimum recovery. Soon, the economy moved from recovery to sustained growth. The GDP rapidly expanded from US$3.9 billion (Ush14.4 trillion today) in 1986 to US$34.7 billion (Ush128.5 trillion) in 2019. In other words, Uganda’s economy has expanded nine times since NRM took power in 1986. As a result, GDP per capita (in real terms) has increased from Ush919,100 or US$260 in 1986 to Ush3,150,000 (equivalent to US$891) in 2018/19.
CURRENT STATE OF THE ECONOMY
Uganda’s economy has never been larger, healthier, diverse and full of opportunities as it is today. Like human beings, an economy is born and it grows. At times it gets moody (contracts) or even sick (recession), but when it recovers, it can get happy (expansion) and at times excited (boom).
Historical facts reviewed indicate that when the Ugandan economy was born in the early 1900s, it became stunted and stayed as an enclave for a few Europeans and Asians surrounded by a sea of poor peasants. While in that state it was decimated by inept leaders.
NRM found Uganda’s economy in the ‘intensive care unit’ (ICU), having suffered ‘multiple organ failure’ due to severe violent abuse by past governments. It has since 1986 been resuscitated to full recovery. In the past 25 years, NRM has facilitated the economy to emerge as one of the fastest growing in the world.
Uganda’s GDP per capita growth between 1997 and 2010 was better than in any of the other sub-saharan African countries. A recent research named President Yoweri Museveni, among the top global leaders whose individual contribution has had a significant positive impact on their countries’ economic growth.
Between 1986 when NRM took power and 2014 (the period studied by the researchers), Uganda’s GDP grew at an annual average rate of 6.7%, while per capita income was at an annual average rate of 3.5%. The researchers ranked, President Museveni above celebrated world leaders such as Lee Kuan Yew of Singapore and Park Chung Hee of South Korea.
Before the coronavirus (COVID-19) pandemic hit Uganda in March 2020, the economy was on an impressive growth path. GDP growth was at 6.5% in FY2018/19, 0.3 percentage points higher than the growth registered in FY2017/18 (UBOS, July 2020).
Industry was the main driver of this growth, expanding at 10.8%, followed by agriculture (5%) and services (4.9%). In recent years, the following sectors have significantly impacted growth: manufacturing, private and public sector construction, agriculture, mainly food crop and livestock production; regional trade, tourism, ICT and financial services. Average commercial bank lending rate had reduced to 17.7%, while inflation was below the target rate of 5% since October 2017. Low food prices are mainly responsible for the low inflation, an indication of food sufficiency in the country.
Public Opinions Courses
PUBIC OPINIONS is a purely Field Based Organization working towards attainment of the United Nations Sustainable Development Goals (SDGs) through Public Awareness, Information Dissemination, Public Relations, Foreign Policy and Strategic Studies, International Exchange Programs, Strategic Networking, Corporate Branding, Issues Research as well as conducting correspondence Training and Mentorship Sessions in which every successful participant is accredited and honored with an International Certification and admitted into Public Opinions International Fellowship.
Public Opinions works closely with the Council for Sustainable Peace and Development which is managed by the Asia-Africa Development Council (ADCO) based in India with mandate to promote Sustainable Peace and Development in Asia and Africa. Our non-academic correspondence sessions are designed to benefit participants from around the world. All you need is an email address and a Whatsapp Number. You must write and submit an Accreditation Assessment Report to qualify for Accreditation in any of the field mentioned above.See below our correspondence courses.
Since 2009, Public Opinions has awarded and recognized over 500 Individuals, Companies and Organizations from around the world with Responsible Investment Mark of Excellence Award, Global Sustainable Development Award, Uganda Responsible Investment Award (URI Award), etc. Some of those recognized by Public Opinions are not limited to Bologna University in Italy the oldest continuing University in the world, H.E Yoweri Kaguta Museveni President of Uganda, Diamond Trust Bank, Electricity Regulatory Authority, Roko Contruction,Ministry of Health, National Drugs Authority (NDA),H.E William Ruto President of the Republic of Kenya,etc.
THE PACT:
Successful participants must sign the Public Opinions International Fellowship Pact which exists to promote and ensure discipline and compliance to International Best Practices and Standards as a Certified Public Opinions International Fellow. We will continue to support you by publishing and disseminating your profile/Resume/CV to companies, organizations, Government entities and key personalities from around the world. Our core ultimate goal is ensuring Social Economic Networking and Accessing Opportunities by our Fellows.
FEES STRUCTURE & PAYMENT MODE:
Ugandan 60usd
East African 100usd
International Participant: 120usd
Duration: 2 weeks
Study from your Home/Office any time.
MODE OF PAYMENT
- EFT
- Cheque
- Direct Deposit to our account
- Mobile Money
Payment to:
Account Name: Public Opinions
PROFILE/CV/RESUME
Please send your profile or curriculum vitae to us including date of birth, education background, employment records or experience,etc..Include your latest colored passport photos. Send to [email protected].
The document must be in word format.
Public Opinions International Fellowship
Topeka Avenue, Leavenworth
4301 SW 15th St,Topeka Kansas, 66604
United States of America (USA)
Tel: +1718-618-9814
Uganda Call/Whatsapp: +256701992426
Email: [email protected]
Web:www.publicopinions.net