The 2009/10 budget in Uganda once again presents the puzzle
to many analysts of our nation. In spite of a world-wide recession (advanced
economies declined by 7.5% in the last quarter of 2008), Uganda’s economy grew
by 7%, an impressive performance by any standard. Indeed, growth in absolute
tax revenues was 17% above 2007/08 even though it will be about Shs 150 billion
below the projected amount.
There is widespread belief among Ugandans and foreigners
alike that our country is politically on the highway to Monrovia or Mogadishu.
Our government exhibits unparalleled levels of institutionalised incompetence
and corruption. So how do we explain this contradiction ‘ an impressively
growing economy in the hands of such a government?
Max Weber argued more than a century ago that the state’s
ability to promote capitalist development requires it developing some degree of
autonomy from the surrounding society. Yet this has been the biggest failure in
post independence states in Africa. Any observer of Uganda would easily see
that the institutional integrity of the state is significantly compromised.
Diffuse fragments of society ‘ ethnic, religious and political ‘ so easily
wrestle control of resources from their intended public purpose to private
pockets.
Over the last decade, the government has greatly improved
the allocation of money to different sectors. We shall call this ‘allocative
efficiency’. It has made infrastructure, health, education and energy major
priorities. From 2000/01 to 2008/09, the budget for roads has grown from under
Shs 314 billion to Shs 1.1 trillion; education from Shs 445 billion to Shs 980
billion and health from Shs 248 billion to Shs 700 billion.
However, institutions at the centre seem incapable of
exercising effective control over those in outlaying areas and districts. Thus,
they cannot ensure that budgets so allocated are spent on the intended purpose
so that Ugandans can get value for money. Consequently, performance in these
sectors has improved only marginally, has been stagnant in some cases or is
declining in others. We shall call this ‘technical inefficiency.’
For example, the Yoweri Museveni administration has invested
significant monies in the road sector. In 1886, Uganda had 2,000 kilometers of
tarmac of which only 10% was in good condition. Government has since
rehabilitated the old roads and built another 1500 kilometers of new tarmac.
Yet according to information from the Uganda National Roads Authority, out of
3500 kilometers of tarmac, only 1500 are in ‘good’ condition ‘ the same number
Uganda had in 1962 when we got independence.
In primary education, teachers are in class for only 18% of
the time; the dropout rate from this freely provided service is 78%. Secondly,
65% of the pupils in UPE schools up to Primary Five can neither read nor write.
Although there has been a dramatic increase in primary school enrollment, the
number of pupils registering for PLE has grown marginally. If you factor in
population growth, there has actually been a significant decline in those sitting
for PLE.
President Museveni claims that his government has
built 750 dispensaries over the last ten years. That is the easy part. The real
work is to build effective institutions to ensure that the dispensaries
actually deliver healthcare to the citizen. However, health worker
absenteeism is very high. Medicines are smuggled from public to private
pharmacies and clinics. There are few, if any, nurses, doctors, equipment and
drugs. Thus, maternal mortality has not improved in 20 years. So, 80,000 mothers
die in child birth every year, that is 800,000 mothers in ten years ‘ the same
number as those killed during the genocide in Rwanda.
Yet, we see technical efficiency in some areas. For example,
government has sustained a stable macroeconomic policy framework for two
decades. Usually, when confronted with elections, many governments print money
to finance popular programs leading to hyperinflation. The government of Uganda
has resisted this temptation even when President Yoweri Museveni’s political
life has been under serious electoral threat. He has intimidated, jailed,
bribed ‘ and on occasion even killed ‘ to win elections. But he has not printed
money to finance his political survival.
Museveni’s government has also ‘ with impressive commitment
‘ maintained a largely liberal economic environment. It is easy to set up a
business in Uganda. Local and foreign investors are investing. This has led to
an impressive growth in all sectors especially services ‘ telecommunications,
hotels, restaurants, media and banking. Of course many of the changes we see in
Uganda today are common across most of Africa since the 1990s. However, Uganda
pioneered them in Africa.
Again, Uganda’s commitment to this liberal policy framework
is a puzzle. A patronage-ridden regime like that of Museveni would prefer to
limit access to economic opportunities in order to create rents for its
cronies. Except for isolated incidents like dishing out prime public land,
money and state enterprises to some of its cronies, it has restrained itself
from an all-embracing policy of state control of the economy.
Museveni has presided over a fairly sound macroeconomic
policy framework with highly competent and autonomous political institutions to
undergird it ‘ Bank of Uganda (BOU) and Ministry of Finance (MOF). What makes
such a choice possible especially given overall public sector incompetence?
One could argue that Museveni has respected the existing
policy framework for fear that doing otherwise would force donors to cut off
foreign aid taps. But this argument is weak because whenever they had been
confronted with a choice between protecting their power and donor conditions,
Africa’s rulers have always chosen power.
The fundamental explanation for Museveni’s resistance to
temptations to alter existing macroeconomic policies must be his personal
conviction; they are good for the economy. But he also realises that they are
politically functional. By sustaining economic growth, these policies have
ensured ever growing domestic revenues and foreign aid inflows to finance his
politics.
Of course Uganda’s economic achievements have been possible
because the institutions managing our monetary policy (BOU under Emmanuel
Tumusiime Mutebile) and our fiscal policy (MOF under Chris Kasami, Keith
Muhakanizi etc) enjoy a high degree of institutional independence and
competence. But again, this has only been possible because Museveni respects
such independence and competence.
But why has Museveni built (or respected) competences in
only those areas of macroeconomic management but not in the realm of
goods-and-service delivery? It seems that at a broader level, Museveni’s
project of political consolidation is built on sustained economic growth and
its resultant revenues. Money is a vital political resource in building and
sustaining his political coalition. This is the part of Museveni’s rule that
reflects an enlightened president breaking away from Africa’s past of state
control of the economy that was strangling private economic initiatives.
Yet at a tactical level (how to manage different political
groups and interests) Museveni’s approach has followed the age-old African
syndrome of personalised patronage. To win over different ethnic, religious and
other political groups into his coalition, he personally gives privileged
access to state resources to persons of his choice. By giving state jobs and
contracts to powerful opinion, religious and traditional leaders from the
different social groups, Museveni has been able to integrate large sections of
the elite into power. In turn, the elites so privileged create a link between
him and their followers.
That is why the accent of any analysis of his rule needs to
focus more on how he has included rather than excluded people from power. The
creation of many semi autonomous government bodies, security organisations,
enlargement of cabinet, creation of numerous districts etc has given many
elites access to ‘eating’ as it were. Indeed, the creation of new districts has
ensured that even areas like the north that have little access to ‘eating’ at
the center can get some crumbs at the local level. Therefore, although new
districts may be fiscally expensive, they are politically integrative.
In his search for electoral success, Museveni confronts the
twin pressures of elite demands for patronage and popular desires for service
delivery. Of course the two pressures do not constitute a zero-sum game i.e.
the achievement of one does not necessarily mean the loss of the other. But
they do compete with one another. I think Museveni has given a disproportionate
attention to patronage because it is more cost effective.
Given Africa’s ethnic and religious polarisation, the
appointment of powerful individuals from a given community gives its members a
sense of belonging to the nation-state. Such a symbolic gesture often counts in
people’s hearts more than building a hospital, road or school. Take Bushenyi
for example: Appointing powerful individuals like Kahinda Otafiire, Prof.
Tarsis Kabwegyere and Ephraim Kamuntu to cabinet can create a sense among their
followers that Bairu are part of the power structure. The people of Bushenyi
will therefore vote for Museveni and NRM even when public service delivery is
poor.
Thus, in societies where emotive issues of identity carry
more political weight than functional issues like education and healthcare,
politicians will be more inclined to privilege patronage over service delivery.
In any case, it costs a lot of money to build a hospital, a school or a road
compared to appointing a few elites to cabinet. More still, it also takes a lot
of time to build public institutions capable of delivering such goods and
services. With elections every so often, politicians find patronage more
profitable.
This is not to say that a politician like Museveni will
focus entirely on giving patronage to the complete exclusion of a services
delivery agenda. Rather, he may treat it as secondary. Museveni has paid some
attention to service delivery. Universal primary and secondary education,
immunisation, roads etc, are good examples. But his focus on technical
efficiency to deliver these services has been cavalier. Why? Because service
delivery has lower political returns compared to patronage.
This suggests that all too often, Africa fails because of
lack of effective social organisation. Foreign aid makes a mockery of its
purpose because it is difficult to achieve set objectives without effective
social organisation. Free market policies have done a lot of good for Africa
because it is dangerous to have an activist government in weak, corrupt and
incompetent states; you would be putting hyenas in charge of the meat market.
Museveni is not an oddity but rather a representative of
Africa’s general norm. I find Rwanda’s President Paul Kagame an African
exception because from a purely rational point of view, he is very inefficient.
He invests huge amounts of time, money and effort on improving the capacity of
the state to deliver public goods and services. Yet he can retain power by
investing in patronage and repression. What drives him in such pursuits? He
must harbour an unusual ambition to serve his country.
The other leaders in Africa who are building effective state
capacity are Meles Zenawi of Ethiopia and Issayas Afeworki of Eritrea. I am
told by Timothy Kalyegira that the state in Eritrea is highly competent in
building roads, schools, hospitals and in providing fairly good education and
healthcare services. Yet although the Eritrean state enjoys relative insulation
from societal pressures, its pursuit of growth destroying policies will
undercut its developmental ambitions.
The state in Ethiopia, on the other hand, has developed high
capabilities in designing policies and programs and implementing them without
individuals and groups diverting it from its intended objective. Zenawi is
doing a great job in increasing hydro power generation (to 8,000 MW), high
quality roads etc.
What makes the building of effective state capacity possible
in Rwanda and Ethiopia but not in Uganda? Fighting strong and entrenched military
regimes required a high level of organisational efficiency to survive, leave
alone win the war. By his own admission, Museveni fought a largely incompetent
UNLA. Therefore he did not have to cultivate highly effective organisational
skills to win.
In sum, Uganda’s effectiveness in macroeconomic management
(allocative efficiency) has been possible because it is politically profitable.
However, the failures we see at the level of service delivery (technical
inefficiency) are a result of the specific nature of Uganda’s identity politics
‘ or at least of how Museveni has chosen to play it. Secondly, Museveni lacks
the core managerial competences to deliver such services. Thus, although the
budget is good, its benefits will most likely go unrealised.
amwenda@independent.co.ug
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