Analysis
Impossible to attain middle income status in 4 years, say experts
Dr. Wilberforce Kisamba Mugerwa chairman National Planning Authority
Government officials, economists spar over President Museveni’s target of having every Ugandan earn Ushs3.5m annually.
The National Planning Authority has lent cautious support to President Yoweri Museveni’s goal of moving the country into middle-income status category in four years time.
While launching the drive to sensitize the general public as well as government agencies on what is needed to achieve the President’s dream, the top leadership of NPA outlined a number of pre-conditions for the country to cross the line from a region of poverty to a region of relative comfort and certainty.
The NPA leadership led by its chairman Dr. Wilberforce Kisamba Mugerwa addressed a news conference this week in which they said that the middle-income status is achievable but faces numerous challenges such as poor implementation of government plans, high population growth rates, and corruption.
Answering the question as to whether the middle-income status is achievable? NPA answered in the affirmative but with several caveats.
“This is achievable, provided that the NDPII [National Development Plan II] is implemented to the dot,” the NPA said. But the NPA’s insistence on implementing its plan comes days after its Executive Director Dr. Joseph Muvawala denounced government agencies and ministries of not aligning their activities along the NPA.
While presenting a paper on Uganda’s 2017/18 budget a few days ago, Dr. Muvawala said that some ministries had veered off the NDP path by as much as 60%.
Economic experts have however dismissed the goal as a sheer dream that cannot be attained because of realities of prevailing challenges such as high population growth rates, low agricultural productivity, low levels of foreign investment.
According to the NPA, ordinary Ugandans will have to raise their income up to Ushs3.5m annually from the current average of Ushs2.3m.
“This means that all Ugandans including children who are not working on average should each be earning at least USD1,033 and Ushs290,000 monthly,”
In perhaps a significant departure from the usual mantra of using averages by some government officials during speeches in which they praise Uganda’s economic progress, the NPA has insisted that growth should leave no one behind.
“This move to the middle-income status must be anchored on the concept of sustainable development which means all inclusive growth that leaves no one behind,”
“The implication of achieving this inclusive middle income would require each household to earn a total annual income proportionate to its size.”
NPA has also cautioned against Uganda’s high population growth rates, which they say imposes high levels of dependency.
“The number of children and dependants one looks after erodes one’s incomes. So the dependency ratio may only be reduced through producing children for whom one is prepared to effectively look after.”
Ramathan Ggoobi, an economist lecturer at Makerere University Business School says Uganda cannot achieve middle income status in four years as set out by President Museveni because Uganda’s population growth rates cannot be reversed suddenly but also that Uganda’s economy cannot grow fast enough.
“Actually our population is growing faster at 3% per annum compared to per capita income growth which is about 1%. This means that the target is beyond reality,”
Ggoobi’s view is supported by comments that were made by the Executive Director of the Uganda Bureau of Statistics (UBOS) Dr. Ben Paul Mungyereza who said that Uganda’s population is growing an increasing rate – meaning that reversing the trend is almost close to impossible.
Dr. Fred Muhumuza, an economics lecturer at Makerere University also argues that it is almost impossible to attain middle income because the economy is facing serious constraints that make it unable to expand.
But Muhumuza adds a new dimension to the middle income debate by arguing that it is an escapist goal by President Museveni since it emphasizes averages or quantity as opposed to quality of lives of Ugandans.
For additional analyses on this subject, read the following articles
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