Uganda: Strong ‘Unfettered’ Private Sector vs Weak Public Sector

By David Bikaako

I spent a week in Kagutaland (Uganda). Great experience and couldnt pass up the opportunity to do a bit of sightseeing and do a street-view weigh up of ‘NRM’s development.’

There is no doubt that there has been positive and huge change overall. My observation though was that a lot of what is going on is really private sector development. This, from the huge new commercial properties in Kampala, to the booming residential property market, the hundreds of new retail outlets, the new hotels/restaurants, the banking sector and loan sharks, the vibrant telecoms sector, petty traders and food vendors on the streets, private schools, health clinics, and of course, the ubiquitous boda-boda services. It is private sector all the way, and no doubt, impressive.

Kampala Suburbs

By comparison, the public/state sector is conspicuous by its absence. One does not get the sense that all the private sector growth and change is being driven or regulated by a fully functional public/state sector. There is not a sense that the state is acting effectively to support and nurture the booming private sector. Hence, there is a largely chaotic feel to all the change evident in Kampala and other towns.

It was fascinating to see the new huge multi-billion shilling buildings mushrooming in downtown Kampala but alongside these are shacks, slumy dwellings, old decrepit buildings, and of course poor access to them via Kampala’s dusty, narrow, potholed roads. Rubbish, of course, remains strewn everywhere and drainage poor. I am told Kampala City executive Director, Ms Jennifer Musisi, has done a good job cleaning up the city streets, but there is certainly a long, long way to go. Thanks to the weak state/poor urban planning, it is no wonder that issues like flooding remain a concern in the city.

Perhaps the greatest show in Kampala, and one that displays this booming or unfettered-private-sector vs weak-state-sector situation is played out on its roads. Thousands of boda bodas (taxi motor-bikes) ply every single route, battling for space with millions of private cars, taxis, and bustling human traffic. The narrow and potholed roads of course add to the mix, and ‘poor driving’ seems like an absolute must! Mayhem is how to describe it all. Yes, there is the odd policeman attempting to bring about some order to traffic flows, but even they realise that it is a pointless task.

Kampala taxis

For a country that has such a weak export base, surely, it cant be right that it wastes valuable foreign exchange on importing millions of secondhand cars, boda bodas, and of course, even more in fuel import bills to keep all those vehicles on the roads. A mass transport system – buses, mainly – is what Kampala needs. [I’ll say nothing about Kampala’s shops which are filled to capacity with cheap imported goods vis-a-vis the anaemic local manufacturing sector. That is a story for another day]

It is only a miracle that there are not more accidents and deaths on Kampala’s roads.

In a nutshell, there is almost a sense that government is happy to largely abdicate responsibility to the private sector. This, except for national defence/policing, taxation and the small, bureaucratic and largely inefficient public administration.

The private sector, on other hand, has chosen to march forward and is largely succeeding despite the state/government and not because of it.

Response by Philip Nsajja

Kulikayo muganda wange. I’m glad you got a chance to soak in some of the impressive and not-too-impressive goodies that Kagutaland has to offer, albeit under very difficult circumstances.

Only a hawk-eyed guy like you, with a knack for noticing the finest of details can be trusted to do this justice. This is a very fair and balanced assessment. If Kaguta and his cohorts continue to shamelessly take all the credit for this admittedly impressive private sector development, so be it. I guess there really isn’t anything that can be done about it. They will obviously argue that the strides that have been made are a result of the “peace” they ushered in a quarter-century ago that has enabled businesses to thrive.

Now how their abdication of responsibility for the things that government is supposed to do – like fixing roads and urban planning – can be reconciled with the unencumbered spirit of free enterprise, I honestly do not know. But if I have to venture an opinion, I think there is room for both. Just this morning as I was driving to work I listened to an interview by the President of the American Enterprise Institute – a conservative think tank – who was making the argument that whereas capitalism should have a moral credo and must be fair, government is a hindrance to free enterprise and should just budge out. I am obviously philosophically at odds with that point of view, but if you get a chance, listen to what he has to say.

http://www.npr.org/2012/05/22/153259424/road-to-freedom-moral-argument-for-free-enterprise?ft=1&f=1032&sc=17

The powers that be in Kampala are obviously not grappling with these deep philosophical and economic models; they just don’t give a damn. As long as they have powerful security forces protecting their grip on power, they wouldn’t care less about the daily inconveniences and indignities which the people who have made Kampala thrive have to endure daily. They are however quick to take credit for the “success”, and that’s a damn shame.