Opinion: Rethinking Uganda’s Economic Growth Strategy – Beyond Agriculture as the Golden Bullet

In the discourse surrounding economic development, it is crucial to revisit the conventional belief that agriculture serves as the golden bullet propelling nations into maturity. Contrary to this notion, it appears that Uganda is treading a path opposite to the recommended stages of economic development, focusing more on agriculture than industrialization.

The stages of economic growth, proposed by economist Walt Rostow in 1960, outlined a progression from traditional society to the age of high mass consumption. However, there is no unanimous definition for the stages of economic development. Many development economists emphasize three crucial transitions: structural transformation, demographic transition, and urbanization.

Structural transformation, a fundamental aspect of economic development, entails a shift in the composition of GDP. Initial economic activities predominantly center around agriculture, but as a nation progresses, the share of agriculture in GDP should decrease. Instead, Uganda finds itself investing more in agriculture than industrialization, a deviation from the recommended trajectory.

The argument that industries require raw materials from agriculture holds merit, but it is essential to note that industrialized nations often import raw materials from societies similar to ours. The suggestion here is that Uganda could explore opportunities to import raw materials for its industries while simultaneously focusing on industrialization.

The author highlights a critical point – the economic inefficiency of investing trillions in programs like Operation Wealth Creation (OWC) and the Parish Development Model (PDM) without a significant shift in the economy. The question raised about growing and exporting raw coffee, only to import processed Nescafe at a higher price, underscores the need for a strategic reassessment.

Drawing comparisons with nations like China and the United States, which import most raw materials yet yield higher profits from their industries, emphasizes the need for a change in mindset. The notion that “Enkumbi telimba” (the hoe never gets old) may have been fitting in the 18th century but appears outdated in the 21st century.

The author, Lineaker Kigunddu, urges Uganda to break free from stone age ideologies, emphasizing that reliance on agriculture alone may condemn the nation to persistent poverty. The call to shift focus towards industrialization, leveraging raw material imports, reflects a call for a more dynamic and forward-thinking approach to economic development in Uganda.