How the debate on Lubowa hospital exposes the self-indulgence of Ugandan elites and their poverty of ideas
Two weeks ago Uganda government approved $380m (or Shs1.4 trillion) to build an “international specialised hospital” in Lubowa. On the face of it, this is a great idea. It is prestigious for a poor country like Uganda to own a state-of-the-art hospital that can handle highly complex medical problems. Besides, if our country is to attract high-end tourism, it needs such a highly specialised hospital so that rich tourists can visit our country confident that in case of a medical emergency they can be handled.
Yet I think the hospital at Lubowa has very little to do with high-end tourism. Rather it shows how political power in Uganda, most especially democratic power, is in the tight grip of a very small, parochial and self-indulgent elite – inside government, in the fickle opposition, and in the wider Ugandan chattering elite class! The Lubowa hospital is being built because Ugandan elites want such a government owned facility to save their lives. In their self-indulgence, they ignore where national health priorities should be.
The permanent secretary in the ministry of Finance who is also the secretary to the Treasury, Keith Muhakanizi, explained it well. He said 8,200 persons in Uganda applied for medical visas to India in 2016 of whom, 5,000 were sponsored by government of Uganda at a cost of $123m ($15,000 per person). In building the hospital, government is cutting down on this expense, which makes sense – until.
Muhakanizi also said the total cost of medical treatment abroad (government and privately sponsored persons) in 2014 was $186 million of which only $73 million went to medical treatment while $133 million went to transport and upkeep. It makes a lot of sense, therefore, that Uganda builds a hospital to handle highly complicated medical emergencies because it will reduce the foreign exchange cost by 71.5%.
Consistent with the self-indulgence of the Ugandan elites across the intellectual spectrum, their disagreement with the project is over its cost, not its actual purpose i.e. government to subsidise the medical bills of largely a few people with influence to get recommended by the medical board. Our elites want the state to build a highly specialised hospital where they can always go for expensive medical treatment at zero cost. Consequently, they have brought a lot of heat but shade very little light on the project.
For instance, the cost of $250m to construct this hospital – with its 264 beds, 82-room budget hotel, a 500 sitter conference facility, a health training school, housing for staff (85,000 square meters of built up area), the cost of equipping the hospital with some of the most advanced and high tech medical gadgets, beds etc., medicines for one year, training of Ugandan health professional staff etc. is reasonable. Ugandan elites do not want to look at the detailed bill of quantities and they go yapping around.
Secondly there is the cost of interest on the money borrowed to build this hospital at 6.5%, which I find reasonable as well. This is because it is hard to find a concessionary loan for building a highly specialised hospital. Besides, there has to be profit for the contractor and the promoter of this project. Finally there is always the cost of corruption: I do not think is it possible to give out such a lucrative contract in Uganda without wheeler-dealers getting a cut.
A note on this corruption: this is a great moral issue and on that I share everyone’s concerns and outrage. However, I learnt from Samuel Huntington, an American scholar that an intellectual must always separate their values/morals from their analysis – so that they can analyse clearly. While it is good for us to try to ensure that public projects reflect reasonable costs, it is often counterproductive to seek to delay/stop them unless and until you have the ideal price. It doesn’t exist.
Secondly, big infrastructure projects are inherently more political than technical. Without financial rewards to the wheeler-dealers in the system and their ability to create political slush funds for those in power, it would be difficult for any country to implement them. Often it is the corruption involved that makes such projects possible; and why public officials are likely to get incentivised to process them faster. Those who believe in the altruism of public officials should remember how communism failed.
Capitalism, which has created unprecedented prosperity, is based on the selfishness of man (individual greed). Its cardinal principle is that everyone should seek that which is to his/her best monetary advantage. Therefore, it is difficult to reconcile capitalism’s foundational creed with the ethics we demand from public officials. Public servants have power to allocate lucrative rights over scarce resources. It follows that they will always seek to bargain for a share of the rents they help to create. The magnitude of this share may vary from society to society and from one period to another.
Thus, the inflation in the costs of a dam or highway by anything between 10 to 30% may be the necessary price to get public officials incentivised to work hard and get such projects off the ground. Otherwise without a commission they may drag their feet forever. Delaying a project in a vain effort to stop alleged corruption is always more costly in direct financial costs and in opportunity cost than in letting officials take a commission of 10 to 20%. NSSF’s pension towers, which I will write about next time, proves this.
The real issue in the debate over Lubowa is that a government of a poor country like Uganda should not be sponsoring people, rich or poor, for expensive medical attention here or abroad. Our meagre public resources should be spent on trying to achieve the greatest good for the greatest number. This means emphasis on public health programs such as vector control, improved sanitation, immunisation and vaccination, clean water and public hygiene.
If government invests in clinical care, it should focus on those diseases that affect the largest number of the most vulnerable: malaria, cough and cold, urinary tract infections, intestinal worms, gastrointestinal disorders, acute diarrhea, etc. This means government invests more in health centres at community level – with better medical staff, equipment and medicines. This is not to say it should ignore treatment for complicated diseases. Rather, it can provide a long term loan at low cost to a private investor to develop such a facility and everyone who goes there – rich or poor – pays his/her bills.