About me.

Andrew M. Mwenda is the founding Managing Editor of The Independent, Uganda’s premier current affairs newsmagazine. One of Foreign Policy magazine 's top 100 Global Thinkers, TED Speaker and Foreign aid Critic

Monday, November 30, 2015

Inside Besigye’s promises

Why the belief that his campaign promises are workable is an admission that Museveni presidency is a success
Dr. Kizza Besigye and his supporters say President Yoweri Museveni has destroyed Uganda. So their campaign is to save it. As part of this, Besigye is making campaign promises that will require trillions of shillings to fund.

Besigye claims he will fund all this with saving money from a “bloated” government payroll. I agree. Most of these can be cut and government would work better. But, as I will show, Besigye’s savings bonanza amounts to less than Shs160 billion – a drop in the ocean of Shs3.2 trillion he needs for only three of his promises. In reality, the only reason Besigye believes his promises are workable is because he can see that the economy can support them.

Museveni may have failed on many things but I reject any doomsday view of Uganda. Museveni’s presidency has been a success, especially on the economy.

As I wrote in October, over the last 25 years Uganda has had the 11th fastest growing economy in the world, performing better than the growth miracles of the 20th century – South Korea, Taiwan, Botswana, Singapore, Malaysia, Hong Kong, Mauritius, etc. 

If the government of Uganda is able to fund Besigye’s oversized promises, it is only because Museveni has grown the economy and state revenues. For example, in 1990 with 17.5 million people, total government revenue was Shs134 billion (Shs 954 billion in 2015 prices). That is $ 16.2 revenue per person. This financial year, government revenue is Shs11.3 trillion or $ 97 revenue per person – a 500% growth.

We can compare Museveni’s record against the USA when it was almost at the same revenue per person level as Uganda. The year is 1864. Its revenue per person was $117 (in 2015 dollars). In 1890 (26 years later), it had grown to $178 in 2015 dollars – a 52% growth. Hence revenue per person in Uganda over a similar period grew almost 10 times faster than in the USA. Even using the same period (1990 to 2015), U.S. revenue per person has grown by 30% from $7,200 (in 2015 dollars) to $10,400 in 2015 while Uganda has grown 500% from $16.2 to $97.

On public sector wages where Besigye is promising pay hikes, these declined (in real terms) from 1971 to 1987 but Museveni reversed this.

In 1990, the least paid civil servant earned Shs2,591 (Shs 18,446 in 2015 prices). The highest paid civil servant earned Shs 12,155 (Shs 86,537 in 2015 prices). Today, the wage of the least paid government employee has grown in real terms by 900% to Shs187,000 while that of the highest paid public service official (head of public service) by 5500% to Shs4.9 million.

Now Besigye wants to raise salaries for primary school teachers from Shs408,000 to Shs650,000; secondary school from 720,000 to Shs1 million; doctors from Shs1.2 million to Shs3.5 million, police officers from Shs350,000 to Shs650,000. Note that PriceWaterhouseCoopers studies on wages in Uganda show that outside of the top banks and telecom companies, public sector salaries are competitive with those offered by the private sector.

Besigye cannot increase wages for some public sector workers and ignore others. Therefore, his promises will increase the public sector wage bill by 40% from Shs3.0 trillion to Shs4.2 trillion. He has also promised to increase the budget for agriculture from 3% to 10% of the national budget. Next year’s budget will be Shs20 trillion. His agriculture will go from Shs480 billion to Shs2.0 trillion i.e. by 1.5 trillion. He has also promised to give a computer to each of the 1.5m students in secondary school. Assuming every laptop will be Shs1 million, the bill comes to Shs1.5 trillion. If amortised to three years, it is Shs500 billion per year.

These promises alone demand Shs 3.2 trillion. Besigye claims he will fund all this with saving money from a “bloated” government payroll: 80 ministers, 378 Members of Parliament, 100 presidential advisors, 112 RDCs and their 70 deputies.

But Ugandan ministers earn their salaries as MPs and there are only six who are not MPs. Therefore, even if Besigye cuts ministers by half, he will only save on the cost of minister’s motor vehicles, each costing Shs400 million. Amortised for five years, it come to Shs266 million per year for 40 ministers i.e. peanuts.

Total wages and benefits for MPs this financial year are Shs127 billion. Even if Besigye cut parliament by half he would only save Shs63 billion. The total annual cost of RDCs’ wages is Shs4.5 billion, presidential advisors/assistants is Shs7.2 billion. Plus their allowances, the figure comes to Shs15 billion. He can also cut presidential donations of Shs80 billion. Besigye’s total savings bonanza amounts to less than Shs160 billion – a drop in the ocean of Shs3.2 trillion on only three of his promises.

But is the public sector in Uganda really bloated? There is an objective way to test this i.e. by looking at the necessary level of government employees per 100 citizens in other countries.

The Sub Sahara Africa average is 1.9 public sector employees per 100 citizens, Latin America is 3.5, Middle East and North Africa is 4.0, and Asia Pacific is 2.4. Uganda is at 1.09.

Another away is to look at the ratio of wages to GDP.This should not exceed 7%. Ghana is 11.3%, Kenya 12.2% and Uganda is 3.86%.

Yet another way is to look at the ratio of total government wages to revenue. This should not exceed 30%. Uganda’s is 25.4%. In Ghana it is 41.2%, Kenya is 52% and Ivory Coast is 45.5%.

All these facts show that in spite of his oversized parliament, districts, advisors and assistants, Museveni is running a very prudent fiscal regime on public sector wages. His ratios meet the best practice globally. Indeed compared to Kenya, Museveni has ensured that his political hangers-on earn modestly. This is contrary to the assumptions of the Besigye group.  Indeed, this financial year, 33.5% of our nation’s total budget is devoted to roads and dams. Since 2006/07 when I worked with ACODE to campaign against the high cost of political patronage, government listened and acted.

Finally, if Besigye increases Uganda’s wage bill to Shs4.2 trillion that will make public sector wages 33% of next year’s projected revenue of Shs13 trillion – above the economically recommended ceiling of 30%. That is a slippery slope Kenya has fallen onto as 52% of their budget goes to pay public sector wages alone. In October, the Kenya government, with four times Uganda’s budget, failed to pay wages. Clearly what helps Besigye is the inability of Museveni’s team to respond to his empty rhetoric.

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