Middle income dream unlikely by 2020 – UMA
President Museveni’s much-touted dream of a middle-income status Uganda by the end of this decade has come under fresh scrutiny.Industry leaders have said the middle-income goal is not achievable in the current environment. A forum of Uganda Manufacturers Association meeting recently pointed out that existing government policies do not support the economy’s key sectors, which should be at the forefront.While swearing in for his fifth elective term in May 2016, President Museveni promised to bring Ugandans into the middle-income economic bracket by 2020, branding his new term Kisanja Hakuna Mchezo (term of no games).But the manufacturers, during the 8th edition of the annual CEO forum, held on October 25 at the Kampala Serena hotel, said government’s reluctance to support the private sector and Uganda’s current education system compromise the attainment of the 2020 target.Ugandan manufacturers say government’s reluctance to support the private sector won’t make Uganda realise her middle income dream by 2020The forum, which brings together top company executives from around the country, was held under the theme,“Accelerating inclusive growth and Vision 2020.”According to Barbara Mulwana, Uganda Manufacturers Association chairperson, manufacturing contributes about 19 per cent of the country’s GDP, and 30 per cent of taxes yet it is operating at 52 % capacity due to lack of markets, inadequate skilled manpower and other export risks.“We need to strengthen the Buy Uganda Build Uganda policy. If the local content bill is passed, it will help us as manufacturers to tap into the Ugandan market. We also need an export insurance policy fully funded by government to help in volatile areas that we work in,” Mulwana said.The forum advised that government should set new policy guidelines for the middle-income drive. However, Dr Kisamba Mugerwa, the chairperson of the National Planning Authority, said existing policies are good, only that many government agencies have failed to implement them.This failure of implementation, Mugerwa agreed, makes the road to middle income seem narrow. Gideon Badagawa, the executive director of the Private Sector Foundation Uganda, said emphasis should be on building capacity.“We need to revise the targets. Are we sure we are getting into middle income by 2020? Are we going to change the targets or we are going to work magically and get there? We need to build capacity of our own enterprises to employ more people and to satisfy our market. It is the private sector that will get us into the middle-income status,” Badagawa.Bagadawa said given Uganda’s tax-to-GDP ratio that stands at 13 per cent, there is no chance the country whose target was a tax-to-GDP ratio of 15 per cent can get into middle income three years from now.After nearly a decade of robust economic growth until 2010, GDP growth in Uganda has been slowing down. In the financial year 2016/17, the growth that was projected to reach five per cent leveled out at 3.9 per cent.Government was also asked to ensure more investment in human capital, instead of the current prioritization of infrastructure. The industry chiefs said Uganda’s education system must be overhauled and turned into a more practical one.“Do people know what they must do when put in certain positions? Someone has to be deployable before being employable. These days, graduates look for jobs and yet employers are also looking for quality workers,” Bagadawa said.Farming, being the backbone of the county’s economy, is facing major setbacks in production mainly because of the effects of climate change and poor skills.The forum observed that agriculture has largely been left to the illiterate who have little or no knowledge of enhancing productivity and value addition.Victoria Ssekitoleko, the chairperson of Uganda Agribusiness Alliance, criticized the government for not making it easy for farmers to get crop finance.She cited the example of Uganda Development Bank, which deals more with businesses that borrow large amounts of money starting from Shs 30 million, and yet farmers rarely borrow such huge sums, thus leaving them out.“Uganda is an agricultural country but when you look at what our students are studying, how much agriculture education is there? It is only dropouts that join agriculture,” Ssekitoleko said.