Tuesday, June 10, 2014


The aftermath of this year’s State of Nation Address has been characterized by mixed reactions and reviews across the political and social divide. Most of the reviews have been scathing and largely dismissive of the President’s speech as mere rhetoric that punctuated the annual political “ritual”. I think this State of the Nation Address was actually spot on, with fundamental issues and statistics brought to the fore by the President. The address was largely stimulating and insightful on the salient issues in our economy.
For starters, during last year’s address, President Museveni tackled the ten (10) bottlenecks to social transformation for example developing human development through education and health, developing infrastructure, developing the private sector, modernizing agriculture, regional integration etc. In this year’s address, he did a rejoinder to last year’s speech and comprehensively addressed the key sectors of the economy that are key to wealth and jobs creation i.e. agriculture, services, ICT, industry and manufacturing. The context given to the agricultural sector was spot on. The issues of markets, quality, value and returns on investment are integral to our agricultural sector and I think it was insightful to contextualize these issues in regard to both global demand and regional markets for our agricultural produce.
The total headcount/ employment numbers per sector i.e. 841,704 and 2,684,290 for the industrial and service sectors respectively was also an insightful nugget. Youth unemployment continues to be a big challenge in our economy! For long, we have been seeking the head count per sector and the number of jobs created per year. It will be interesting to see the growth in the head count in the next financial year since we now have some benchmark figures for comparative purposes. This is integral to designing the best policies and programs that support inclusive economic growth i.e. GDP growth that creates both jobs and wealth for the wider population.
The other key insight was the number of agricultural inputs e.g. seedlings distributed to households that are engaged in agriculture (68% of total households as per 2002 Census).  This is fundamental since many a household lack the basic agricultural inputs and start-up capital to engage in commercial farming. This thus calls for the need to re-organise NAADs so as to reinforce these efforts to drive both profitability and efficiency in the agricultural sector.
Perhaps the most insightful statistic from the address is the reduction in poverty from 24.5% in 2009/2010 to 19.7% in 2012/2013! For starters, the Ministry of Finance in the Poverty Status Report May 2012 defines poverty as a situation where one can’t afford to buy and consume food worth 3,000 calories per day based on the CPI food basket. That implies that for a household of five, the daily consumption would be 15,000 calories of food per day. But the same report indicates that a sizeable percentage of Ugandans who are not necessarily poor are vulnerable to falling back below the poverty line in case of unemployment, poor harvests, job loss, reduced incomes or challenging economic conditions. The economy has performed below expectation for the last 3 or so years. It would also be interesting to establish the correlation between the 5% average economic growth rate per annum for the last 5 years and the 5% fall in poverty levels of the 5 year period! It is apparent that the population growth seems to be eating into the GDP growth that would buttress poverty reduction and wealth creation. It is in this context that the President’s emphasis on building sustainable agricultural enterprises for both wealth and job creation is key for both the short and long term.
Agaba Rugaba
Civil Engineer and Socio-Economic Commentator
Twitter; @RugabaAgaba