Museveni’s economic management

If Uganda has been the fourth best performing economy in Africa over the last 35 years, how come it has not yet entered the proverbial middle-income status like Tanzania?

Uganda began at a very low base like Tanzania but has had a very high population growth rate of up to 3.3%, the second highest in the world. With an average age of 15 years (compared to China’s 38.4 years) it means half our population don’t work i.e. are dependents. Rapid population growth cuts down per capita income growth to 2.7%. But having a young population also means most people have not lived long enough to work and accumulate savings in form of assets.

Uganda’s per capital income growth is impressive. For instance, the United States has the 8^th highest per capita income in the world. But this is because it sustained an annual average rate of per capita income growth of 1.5% over a period of 150 years from 1860 to 2010. This shows Uganda’s 2.7% over 35 years as impressive, which many of our elites ignore. In fact, in his great book, Capital in the 21^st Century, Thomas Piketty argues, based on the study of historic data, that “per capita income growth of 1% is extremely rapid, much more rapid than many people think.”

What has distorted people’s minds is the rapid growth of East Asian countries such as Singapore, South Korea, Taiwan and now China, the latter registering a staggering 10% annual average growth in per capita income over 40 years. For instance, per capita income growth for the whole world in the 100 years from 1913 to 2012 was 1.6%. Of this, Europe did 1.9%, America 1.5%, Africa 1.1% and Asia at 2%. That small difference in per capita income growth in Africa explains our poverty.

Yet there is an interesting take from these IMF numbers for Africa. They show that our economies have actually joined the global growth marathon. Of the ten fastest growing economies in the world over the last five years, Africa has five. These include Ethiopia (number two in the world, first in Africa with 7.37% growth), Guinea (number three in the world, two in Africa with 6.9%), Rwanda (number five in the world and three in Africa with 5.98%). Rwanda’s performance is also distorted by the 2017 election year when its growth fell from an average of 7.5% to 3.98%). Ivory coast is number seven in the world, four in Africa with 5.93% and John Magufuli’s Tanzania number eight in the world and five in Africa.

But looking at the long-term (taking the last 30 years – 1991 to 2020) SS Africa has four of the fastest growing economies in the world – Equatorial Guinea, Ethiopia, Mozambique and Angola. In the top twenty countries, Africa has seven countries. So the claim of Africa Rising has a lot of truths in it.

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