Every June, the Government of Uganda communicates country priorities for the next financial year both in terms of strategy and funding. These are delivered in the president’s State of Nation Address and the Budget Speech. Through this road map, the country looks to build on the gains from the previous years, bridge short falls as well as address emerging challenges in the economy. These priorities should therefore be in alignment with global commitments as well as national strategies notably the Sustainable Development Goals (SDGs), the Vision 2040 and the National Development Plan.
Uganda’s current National Development Plan (NDP II) identifies infrastructure and human capital development as fundamental for the realization of its objectives which is reflected in this year’s budget theme “strengthening the Uganda’s competitiveness for sustainable wealth creation, employment and inclusive growth. To the contrary the State of Nation’s address 2016 focused on economic infrastructure (energy, transport and commercialization), especially by highlighting the need for more investment in energy, fertilizer, oil and minerals. Similarly the Budget speech reported commensurate allocations to transport and energy. The key component on how the country will generate the required skills and competencies to exploit the potential of the identified priority sectors was not amplified.
Infrastructural development is indeed fundamental. From a development view point, the necessity for affordable and reliable energy as cornerstone for industrialization cannot be questioned. Increased use of energy supports value addition which is critical for the reduction of post-harvest losses, job creation and improving livelihoods. At country level, adding value to Ugandan commodities also translates into increased competitiveness, and therefore better prices for Ugandan products. Investment in economic infrastructure potentially repositions the country to benefit better from its current agricultural comparative advantage in the region.
At regional level, Uganda’s focus on infrastructural development is in tandem with the country’s regional partners in the East African Community (EAC), which are have all prioritized infrastructural development to boost their competitiveness as well as regional trade. Improving transport systems eases connectivity and facilitates movement of goods and services to markets within the region and even beyond.
All these good intentions notwithstanding, we argue that Uganda needs to be mindful of the essentials of development. Economic growth alone does not comprehensively address development. Following Amartya Sen, economic growth is just one aspect in the entire process of economic development. Sen contends that if a country wants to improve the life expectancy, health, literacy or education of its people, interventions should be directly through the sector rather than through income. Uganda could therefore effectively expand capabilities of its people- particularly children by addressing social wellbeing through relevant sectors in order to transform the country from a peasant to a modern and prosperous country as anticipated in Vision 2040. By financing in human capital development, Uganda directly invests in children who will effectively contribute and sustain economic transformation.
Learning in one of the PEAS schools in Uganda
Unfortunately, Uganda still lags behind in terms of human development and welfare. Although some gains were made, according to the Millennium Development Goals (MDG) 2015 report, Uganda missed critical targets like halving proportion of the hungry, reducing child mortality, halting spread of HIV and reducing maternal mortality. Even with introduction of the Universal Primary Education (UPE), many children are still unable to complete a full course of primary schooling. The low primary school completion rates and even lower primary to secondary school transition rates make it quite evident that Uganda lacks the skills to adequately benefit from targeted investments.
Trends have shown that implementation of development initiatives in Uganda is carried out void of local content due to limited skills among Ugandans. The budget speech further highlights that Uganda’s construction industry is largely dominated by foreign owned companies, which is attributed to a weak domestic construction industry. However, apart from proposal to work with the private sector, government has made no mention let alone provided of a budget line to strategically build capacity of citizens to provide labour in the face of growth in the industrial and construction sector. In spite of the recent MoU with South Korea to build local capacity in construction projects contracted to South Korea, one could reason that this role is being relegated to the private sector.
With regard to the education sector, the current country strategy and funding for education is insufficient to deliver quality learning outcomes for children. For instance, capitation grant (unit cost per child) in UPE schools currently at about 10,000 per child is inadequate to cater for educational necessities and cripples the ability to improve quality of education. Worse still pupil teacher ratio and pupil classroom ratio is also unfavorable for learning.
In terms of health, as widely acknowledged that health is wealth, promoting health supports human resource development to contribute towards economic transformation. Expansion of the current health facility outreach in terms of construction of additional equipped health units and specialized health centres makes a significant contribution towards increasing access. However, comprehensive health care involves confronting the trio components of healthcare: diagnosis, treatment and prevention. For preventable diseases, the burden on diagnosis and treatment is contingent upon the adequacy of preventive measures. Adequate funding to prevention could therefore reduce expenditure on drugs, personnel and reduce productive capacity lost during periods of illnesses. On several occasions breakdown of equipment in the limited specialized health care units have been reported, the most recent being the cancer institute; indicating failing health care systems. The health sector has also been left to the mercy of donors with the government financing only about 50% of annual health budget.
On a positive note, Uganda has made significant gains in increasing access to safe water and the target to increase coverage from the 71% reported in the 2014 census report to 79% and 100% in rural and urban areas is in the right direction towards reducing incidences of water borne diseases. To support efficient utilization of safe water, investment in creating awareness to change behavior among the population is required.
Conclusively, Uganda’s ability to strike the critical balance between financing to economic infrastructure and aspects like health, education and nutrition which directly affect the skills and quality of Uganda’s population is paramount. If this is not considered, the burdens of disease and skill gaps will escalate. Importation of expert labor will also not only continue to frustrate efforts to reduce outflow of revenue but will undermine development efforts. Investment in Human capital development therefore remains requisite if transformation to a middle income status is to be achieved and sustained. The Ugandan government should therefore review investment in human capital development as a driver for operationalization of service and industry sectors.