PROF AUGUSTUS NUWAGABA: Musevenomics and its impact on Uganda’s growth

The performance of Uganda’s economy since 1986 is clearly elucidated in what we refer to as Musevenomics.

Why? This is because President Yoweri Museveni has been at the helm of these economic policies uninterrupted for the last 38 years. It has been clearly illustrated that the period 1971-1985 was characterized by civil strife, insecurity and “death” of institutional structures.

This led to collapse of the industrial sector and by the 1986, when the NRM came into power, the Ugandan economy was almost atrophied. Museveni undertook ten (10) specific policy measures aimed at not only revitalizing the economy, but to set a strong foundation for growth and transformation;

• Security of persons and property: President Museveni clearly understood the cruciality of peace and security, as a premier driver for investment and business enterprise development. As a result, the NRM government has heavily invested in a disciplined army- UPDF, which has excelled in creating sustained peace and security not only in Uganda but in the Great Lakes region and beyond. Peace and security have played a significant role in attracting FDI net inflows from 0% of GDP in 1986 to 6.5% of GDP in 2023 (BOU, 2023).
• Liberalization of the economy: This was done through Privatization of state- controlled enterprises and liberalization of markets. Prior to NRM government, farmers were denied direct markets. They would sell their products such as coffee through Coffee Marketing Board (CMB) run by government. Similarly, the economy was heavily constrained by controls which included foreign exchange restrictions.
• Diversification of Cash crops: The British colonial state had focused on production of cash crops namely cotton, coffee and tea. Copper was also introduced later. The main purpose was to “feed” the textile industry in Britain, as well as industries that had been established through the industrial revolution. President Museveni realized this contradiction and sought to diversify cash crop production. As a result, focus was put on maize, simsim, fish, flowers among others. Through this diversification, the country increased foreign exchange earnings from a paltry US$394M in 1986 to US$2.83Bn in 2023 (MoFPED, 2023).
• Expanded markets: The issue of a large market is a critical driver of production. No one will ever engage in production of goods that do not have market. President Museveni has sought to enhance markets, through spearheading regional blocks. These include EAC with a GDP of US$ 350Bn; COMESA (US$ 805Bn); AfCFTA with a combined GDP of US$ 3.4Tn. It is through a large market that more aggregate demand is created, which stimulates increased production and profitability of business enterprises creating more.

The writer is a researcher and consultant on economic transformation