Cyclic poverty a developing world’s burden.

Diseases epidemics in Liberia, Congo, Uganda are common scenarios so are endless wars in Sudan, Angola, Somalia, Central African Republic and so on. We explore the issue of poverty in Africa, why is it such a huge burden, what is being done to redeem the situation and how did we get there in the first place.

You agree that traditional societies were not poor. We read of chiefs who had enough and used to send tribute to their comrades in other chiefdoms. At household level too, traditional households had enough to eat, and could go on with their business without much burden.

But that was before the introduction of the market economy.

Europeans came introduced a host of new products and services. Africans found them very useful but could only rely on the Europeans for their supply. It created an unfair relationship of dependency virtually in all aspects of life. From simple household items to guns, cloth and medical care products, we feel incomplete without these items.

This dependence was made worse by the fact that as the Africans were never empowered to learn the skills of producing these products, they only exploited the cheap slave labor and natural resources to even gain more advantage of access to factors of production.

In the post colonial times, many approaches have been used in different countries to try and address the problem. Many initiatives at both government and individual levels have been tried but with little success. People always find themselves in this dire state of poverty, a state when they lack the means to satisfy their basic needs. Several explanations for this situation have been put forward, and in most cases the most common argument has been low levels of productivity.

It all starts with how much products you can generate but this is also dependant on a number of issues especially in Africa where the both political and market landscape are unpredictably stable.

Scholars and economists sometimes peg this to low levels of entrepreneurship. This however, is contradicted by recent findings that ranked Uganda as one of the most enterprising country. In reality, when you take a look at the business formation in Uganda, it true you will see a restaurant here, a new bar there, a consultancy there, media house and of recent probably a Church all with a profit as a chase.

And all these in most cases will be private individual efforts. When you take a look in the same direction after a year though, over 50% of these new formed businesses will be long: “dead.” Not only will the business be no more but also it is more likely that their promoters will be paying debts, losing property to financial institutions or being driven back to even worse economic state than they were.

Of course one needs to examine the circumstances under which people do these entrepreneurial efforts, in most cases the people undertake them based on belief rather than facts, belief that it worked for a friend, that this is profitable without any systematic forecasts and research. Here in Uganda if there are companies that conduct comprehensive business research about their products, markets and returns then it is only the moderately large companies and the multi nationals, yet this kind of information is very critical for start up businesses.

Carrying the elephant’s weight

At government level, perhaps the biggest burden is on supportive infrastructure for business, in terms of access to vital information, condusive investment policies and incentives for local business. Uganda government through the years  has made interventions to help people come out of poverty, the Entandikwa scheme, PEAP, PMA , prosperity for all; to mention a few. Billions of shillings sunk into these programs but with little tangible progress. Of course a few have benefited from some of these schemes but overall their impact has been minimal. It is one thing to have a very good program on paper and provide resources for it, but it another to manage the program well, and it is basically the management bit of these programs that has made them perform decimally.  The challenge is that government does not finance itself. It is the tax payer that incurs the burden for any program government starts. When the officials steal the money or the programs fail drastically, the tax payer is said to carry the elephant’s weight. In Uganda, it appears that it is a norm. And that explains the perpetual poverty.

Yours truly had chance to review a paper of the Plan for Modernization of Agriculture early in 2001. The review and appreciation of the plan and its contents, surely this was one program that would have changed the economic situation of the people of Uganda, the linkages, the multi-sectoral approach to issues and the comprehensive nature of the interventions. But this didn’t seem to have created the required impact perhaps because there was no enough commitment to its delivery both in terms of resource allocation and management. In a country where over 70% of the population thrive on agriculture, it goes without saying that if you have to address the issue of poverty you must address the bottlenecks to agriculture as a sector and as an economic activity. This calls for consistent and deliberate comprehensive efforts to rejuvenate agricultural activities and support functions and supply chain. This includes investing in agricultural skills and knowledge to value addition on agricultural products, agricultural technologies and Agri-chemical research and products. To- date little effort has been put on these areas, for instance farmers bear the burden of fake farm chemicals, equipments and implements. There is no value addition on their produce and over 80% is consumed in their raw form, majority of which cannot be marketed since no mechanisms of effective preservation exists.

Why the biting poverty?

In economic sense, it is no doubt that development is triggered by among other things production. When people are able to produce in economic quantities and exchange on the market. The major constraints to production in most of Africa is the high cost of capital and lack of incentives and subsidies to local enterprises.

In Uganda for instance government relieved itself of her trading and commercial entities (parastatals), this in a way implies that there would have been a deliberate effort to help nurture the private business developments in terms of access to low cost sources of capital, protection from unnecessary competition for the infant industries and perhaps subsidies for the local producers. When government leave the market forces to determine the costs of essential goods and services, the communities suffer a great deal as the private companies will always look for a way of maximizing the profits.

Some argument have been centered on resource endowment by countries – that it is a result of few resources at our disposal. However, this does not hold in Uganda’s case, in the pearl of Africa we have it all when it comes to natural resources, good climate, minerals, good soils you name it. Countries like Congo and Angola are naturally over endowed with minerals and other natural resources but still struggle with poverty in their communities. It is clear from this example that it doesn’t matter how much resources you have but how well you use what you have to attain development.

Elsewhere, particularly in emerging South East Asian countries, subsidies and incentives to the people in productive businesses has been vital in triggering economic growth. In China, for a long time direct involvement in trade and business and offering subsidies  and incentive to her within and outside China have made the country to become ‘the workshop of the world’. Today cheap Chinese products have penetrated and threatening many industrialized nations.

It therefore a call for concerted efforts by all people, the government and other stakeholders to commit to economic development of the country evidenced not only in high growth rate figures but also at household level. Let’s put in place good policies, guide our people and empower them to produce, create opportunities for the products , this way we shall be able to get them out of poverty.

And stop being corrupt. How can you live well with a conscience that you did not play fair. That someone somewhere lost a life because the money meant to fix a public good, ended up in your private bank account.

March 20th, 2018 | by

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