Tuesday, December 7, 2010

We will stabilise markets and guide investment

The IPC's government's determination to arrest unemployment and offer Ugandans a better deal is captured in this convincing analysis by Margaret Wokuri which was published in Daily Monitor yesterday.

According to the 2005 Human Development report, Uganda ranks number 144 in the unemployment rate for youths aged between 15-24 years. The high level of unemployment in the country is as a result of a number of factors that the current government has failed to address.

Uganda’s National Household Survey 2002/2003 findings showed that 2 in every 3 persons were engaged in agriculture, yet the budgetary allocation for the agricultural sector has been dropping from the percentages of 5.7, 4.1 and 3.7 in 2005/2006, 2007/2008 and 2008/2009 budgets, respectively. The 2010/2011 budget stepped this up to about 6 per cent but this still is too low to make meaningful growth in the sector.

Things have been made worse by the massive theft of public funds in the country. The money-lending scheme (Entandikwa), created to stem unemployment, was killed by corrupt officials (mis)managing it. A similar tragedy befell the Shs3.3billion that then Micro Finance Minister Gen. Salim Saleh allotted to the Savings and Credit Cooperative Organisations (SACCO) in 2006.

Moreover, government has not guided investment in the country. Most investors that are given tax holidays end up as roadside retailers. Others that have been offered land have invested in hotels and non agricultural related industries. Other factors contributing to this plight are the high population growth rates and an education system not tailored to meet the needs of the market place.

A major policy change to be implemented by the Inter-Party Cooperation government is that of providing lunch to all pupils in primary and secondary schools in the country. This is how it boosts the economy: By feeding the 8.5 million children in Universal Primary Education schools on beans (rich protein) and a starch such as kawunga (maize bread), government will spend Shs1.224 trillion per year, 3.75% of GDP, assuming 180 school days. (One kilo of maize at Shs760 feeds 4 children. One kilo of beans at Shs2,000 per 8 pupils. One litre of milk at Shs1,500 per 4 pupils. Total cost per day Shs6.8 billion).

This is money that goes largely to farmers, but also benefits all persons employed in the chain of putting the food on the table – transport, milling and other food processing, warehousing, cooking. Farmers will have a guaranteed and stable market for their produce and they will provide a wide tax base. The pupils will perform better, remain healthier, and grow into a well nourished work force.

The IPC government will equally play an active role in directing strategic investment for development through accountable public-private partnerships, targeting specific sectors. We shall also alleviate unemployment by promoting more local investment in productive sectors like cottage, small and medium scale and agro-processing industries.

The government will provide tax incentives and low tariffs on imported goods for industrial production, as well as providing investment incentives in priority sectors that employ the Ugandan youth. We shall also establish a Youth Entrepreneurs Scheme to boost opportunities for young entrepreneurs and subsidise businesses, as well as revamp Uganda Development Bank to provide affordable medium and long-term credit to local businesses people, which will lead to job creation.

As soon as the IPC government is in power, primary school teachers and health worker’s pay will be increased. This will be part of the bigger picture of promoting economic empowerment and redirecting human resource in these desiring sectors.

Ms Margaret Wokuri, director for communication and publicity at the IPC campaign bureau wrote this article in consultation with her organisation’s leadership.


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