Middle Income1

Some have been welcoming the new decade, forgetting that in counting we start at one. Please relax, 2020 is the last year of the decade. You may have to wait for 362 more days (it’s a leap year) before we have a new decade. Nevertheless, according to our planning gurus, it was supposed to be the year we achieved middle income status. For the uninitiated, that means that our income per capita would have shot up from the current USD 620 per person (2010) to between USD 1006 (Shs 3.7 million) and USD 3955 (Shs 14.8 million). This is defined as being a lower-middle-income economy.

Unfortunately, as we cross into 2020, our income per capita stands at about USD 710 per person. Two possible reasons for this. One is the high population growth rate. Think of it as a kind ‘popflation’. There are just too many of us chasing a slowly increasing pot of resources. The number chasing the pot increases faster than the resources in the pot increase. Two is failure to industrialize. We are still where we were 60 years ago. Mostly exporting commodities without adding value. The Swiss and Germans make more money from our coffee than us. In turn they give us ‘aid’. There may be other reasons but that is a story for another day.

This week’s column is about looking ahead and assessing what may or may not happen in the aforesaid 362 days.  Here are three predictions of what may occupy our minds and efforts.

First is climate change. If you did experience the Indian Ocean Dipole phenomena we just went through between November and December, then you know that we are going to have a very unpredictable weather pattern in the next year. That probably means famine. If we don’t prepare for the worst, then we could see some of our most disadvantaged folks dying from lack of water and food. The machinery of the state turns slowly. For a while we have been talking about irrigation fed agriculture and luckily some efforts are being put in place. We had better move faster on this front.

Second up is that 2021 is election year so the rate of politicking is going to be ramped up in 2020. Critical resources that should be invested in the posterity of our nation are going to be ‘converted’ to electioneering. That means a difficult two years for the economy if history is anything to go by. Our exalted ‘investors’ will temporary buckle down and suddenly realize the urge to go for a holiday. We natives shall insult and shoot each other for the things I find it difficult to explain. Watch the exchange rate, interest rates and inflation. It may get bloody, both literally and figuratively. The honchos at the Treasury and the Central Bank have their work cut out.

At a personal level, I have begun to think that ‘democracy’ is not an effective governance system for resource challenged societies. Should we be sacrificing so much of our meager resources on an election whose outcome we know? You cannot claim to distribute an animal you did not hunt, we already know. So why the charade?

It is certain the UK will out of Europe. Unfortunately, that may also spell doom for London as the financial centre of the world. As day follows night, big business will migrate to Europe and the Middle East. This is a cautionary tale for our own East African Community which will also continue to struggle in its integration drive. Ignore the form and see the substance for what it is. Some neighbours are not on the best of terms and non-tariff barriers continue to impact integration. Watch what happens with LAPSSET and the Central Corridor. Those two projects will have a profound effect on the future of Union. Whatever happens, make the best of it and have a great year!

Samuel Sejjaaka is Country Team Leader at MAT ABACUS Business School. Twitter @samuelsejjaaka