Uganda needs a balance between infrastructure and social investment

September 8, 2016 in Business, Finance, Infrastructure, Investment, Policy by Editor

Kampala September 8 – Uganda should find the sweet spot between infrastructure and social investment if the transition to middle income status is to bring tangible benefits for citizens.

That was the massage from experts involved in compilation of the second Uganda Country Self-assessment Report under African Peer Review Mechanism, a voluntary instrument under the New Partnership for Africa’s development NEPAD, through which the African Union seeks to encourage member states conformity to a set of political, economic and corporate governance values, codes and standards.

Speaking to the media on the sidelines of a consultative workshop on the report yesterday, Drake Rukundo, the lead consultant for the report said whereas the draft noted tremendous progress in the areas of economic management, corporate governance, social economic development and democracy and political governance, there was a degree of discordance between resources devoted to investments in big ticket infrastructure projects and the social sector.

 “Over the years, the country has focused most of its resources on infrastructure development.  As a result transport is not as cumbersome, electricity has also been extended to more people which is a good economic indicator of economic growth but how has the ordinary person benefitted beyond this and what is the outlook on the social sector?,” Rukundo asked.

“We have the roads and we also need the electricity because the manufacturing sector has to be powered to run but have the issues affecting the common man been addressed? How are the social services like sanitation? Do people have clean water? What is the status of the schools? Do our hospitals have drugs? Can we balance these two, can we have good roads and access to social services at the same time,” Rukundo continues.

Rukundo argues that when government fails to find a balance between the two competing priorities, the result is manifested in sluggish growth because to finance some of these developments, the government competes with the private sector for the limited credit available in the financial system.

Uganda’s road sector spend $2.7bn in the six years between 2008 and 2014 but while questions remain about the value derived from this money, the health and education sectors suffer perennial underfunding and dismal service.

“The government needs to focus and make investments in other sectors as well because if small businesses cannot access funding to expand and also be able to afford social services, it kills the whole notion of development,” he says.

Robert Okello the Chairman of the Uganda National Governance Council of the African Peer Review Mechanism says the purpose of the consultative workshop was to capture any issues that may have been missed by the draft report and integrate them into the final report.