Owachgiu Dennis

Most countries lag behind economically because they fail to exploit their competitive advantages. Massive Youth Unemployment in Uganda today correlates directly with the country’s inability to create opportunities in sectors where they have competitive advantages. In Uganda, agriculture is a key competitive advantage because of the large tracks of fertile arable land available countrywide. Uganda’s land can record high yield even without fertilizers.

Since it employs nearly 80% of the population, Agriculture is the sector that can be relied to ignited an increase in household incomes for the greatest number of people. Investment in Agriculture can positively impact on many sectors of the economy simultaneously. Great and mighty economic powers such as the United States of America owes their economic growth to Agriculture.

Farming in Uganda is still largely subsistence

Uganda certainly has numerous untapped opportunities. It is noteworthy that the handful of small holder coffee farmers in Uganda have already made Uganda Africa’s leading coffer exporter and brought in considerable income. Uganda’s production level and earning can still grow up significantly for coffee, just as for other agricultural products. Investments towards processing such products locally could further allow Uganda to export finished products rather than raw materials. Exporting finished products would earn even more money for the country and create many new jobs at the processing plants.

The growth of agro-processing industries to process agricultural products will itself create jobs for multitudes in other related industries. By-products in other manufacturing cycles are automatic raw materials for other products. Other business will emerge to handle Packaging, transporting finished goods etc. When the goods are exported the country will earn the much needed foreign exchange for the economy and improve the balance of payment position.

The fact that countries that are not as endowed as Uganda are doing well means the sky is the limit for Uganda. Arid Egypt grows and exports agricultural products all year round using water from rive Nile, and Uganda has the source of river Nile right here. Israel products several tones of fresh water fish in tanks, and Uganda has the largest fresh water body right here. Botswana exports more tones of beef products globally, yet Uganda has more cows than Botswana. Israel exports more Diary products yet Uganda has more dairy cows than Israel.

It’s time to take advantages of these competitive advantages to uplift the economy. With the bulk of our population being youthful, availability of labour force is in itself another competitive advantage at our disposal. The kind of agriculture that will create enormous opportunities will have to be commercialized intensive agriculture, not the traditional hand-to-mouth subsistence agriculture. This requires real investments and the national budget should reflect agriculture as a priority area.

The huge amounts of money the country can potentially earn from agriculture will automatically spur the growth of other sectors, notably the service sector. Uganda already has a vibrant service sector, but since most people – about 67% live on a 2$ a day- the service sector can’t continually grow in an economy where the majority have a low purchasing power. Agriculture is that one sector that can unlock the purchasing power of the largest portion of the population since it employs the majority. The increase in purchasing power would then increase revenues in the service sector.

Agriculture can thus accelerate economic growth, which will create several new opportunities for citizens.  Most prosperous people who will earn a decent income from agriculture will reinvest the money in other new ventures. It is these new ventures that will create more employments opportunities for our young people. It is on that premise that agriculture must be embraced and allocated up to 10% of the budget annually. As a productive sector, the more money invested in agriculture, the more money government will earn back in tax and non tax revenues. The increased revenues can then be allocated to other crucial budgetary sectors.

The next logical question is where do we get the extra money to invest in agriculture? In my opinion we have three clear feasible ways. One would be to temporarily cut down the state’s administrative costs and use the money to invest in agriculture. Office automation would cut down the required number of personnel, thus saving some money. Reducing on the number of political appointees, by trimming down some non-essential and redundant personnel such as the “senior advisors” who offer no advice at all.

Another strategy is by implementing agricultural and economic zoning in different regions. Zoning will encourage bulk production with the additional advantage of economies of scale. It becomes easy to attract foreign direct investments for agro-processing industries to areas with enough raw materials.

The third strategy would be to formation of individually owned agricultural cooperatives through which many smallholder farmers can pool money together to either carryout farming together or to process agricultural products. The government can set up a cooperative bank or a Bank that is agriculture-friendly to provide financing to the agricultural cooperatives. Alternatively, the government can channel cheaper credit in form of Agricultural loan facilities through existing networks of commercial banks.

          

owachgiu@gmail.com

 

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