Wealth creation: How can the economy leap forward?
Children seated outside a hut in a seemingly poor homestead. Ugandans
have a higher propensity to spend than to save; something which usually
results from cultural practices that hold individuals so attached to one
another, especially in extended families.
In Summary
Although the Operation Wealth Creation programme was
created to support youth and women, many of them have not benefited
from it, leaving them poor. we explore why wealth creation should be a responsibility of all.
OWC, an economic intervention that President Yoweri Museveni launched in July 2013 to create a system that aims at raising household incomes for poverty eradication, runs under the National Agricultural Advisory Services (Naads) supervised by the UPDF.
The Naads programme started following an Act of
Parliament in 2001 to support a 25-year vision. The initial seven years
for the first phase covered FY2001/2002 to 2007/2008, estimated by Naads
to cost $108 million (Shs376.4 billion). There is little available
information on OWC funding but it is financed as part of the Agriculture
ministry budget.
When Naads was mismanaged, government posted
military coordinators to the programme areas to oversee OWC. Although
creating wealth has never been a mandate of the military, and therefore
no law to that effect, President Museveni decided to deploy the army to
coordinate Naads activities after accusing the officials of mismanaging
OWC.
Gen. (Rtd) Caleb Akandwanaho aka Salim Saleh, the OWC head, has always pledged to support youth and women under the programme. He applauds Ugandans for embracing OWC but advises: “You should be organised in groups to receive farm inputs and have mutual agreements on land to avoid jeopardising the programme.”
Gen. (Rtd) Caleb Akandwanaho aka Salim Saleh, the OWC head, has always pledged to support youth and women under the programme. He applauds Ugandans for embracing OWC but advises: “You should be organised in groups to receive farm inputs and have mutual agreements on land to avoid jeopardising the programme.”
However, the programme, which has been running for
the last 30 months now, has come under criticism for sidelining women,
youth and late supply of agricultural inputs to farmers.
At some point, the Kabale District chairman Patrick Besigye Keihwa was uncomfortable about the miserable quantities of farm inputs that were being distributed under OWC. Keihwa wondered how the whole district could create wealth from a paltry 11 tonnes of bean seeds.
At some point, the Kabale District chairman Patrick Besigye Keihwa was uncomfortable about the miserable quantities of farm inputs that were being distributed under OWC. Keihwa wondered how the whole district could create wealth from a paltry 11 tonnes of bean seeds.
In Kabarole District, the situation is not very
different. A widows’ association is grumbling over failure to acquire
agricultural inputs from OWC; while many other people think OWC is NRM’s
economic plan to keep the party’s political game up.
Wealth creation is a good thing. It should not be haphazard, but well-thought about and handled.
Creating wealth should be a virtuous cycle involving four key stages that include production, marketing, conservation and investment for continuous production with each of the stages having independent factors at play.
Wealth creation is a good thing. It should not be haphazard, but well-thought about and handled.
Creating wealth should be a virtuous cycle involving four key stages that include production, marketing, conservation and investment for continuous production with each of the stages having independent factors at play.
Factors of production are capital, labour,
entrepreneurship and land. To maximise production, for instance, one
must have these factors working at their optimum. The level of
development at each of these stages determines how much wealth can be
created by the individual, community or nation.
The problem with poor communities, Uganda inclusive, is that most of the factors highlighted above are marginal, some almost non-existent.
A country’s production level hinges on the aggregate part played by individuals in the economy. Therefore, wealth creation should be a collective effort of all persons in their country.
The problem with poor communities, Uganda inclusive, is that most of the factors highlighted above are marginal, some almost non-existent.
A country’s production level hinges on the aggregate part played by individuals in the economy. Therefore, wealth creation should be a collective effort of all persons in their country.
Although in state formation, just like in wealth
creation, an individual is the smallest entity but their contribution is
very important. The individuals form families, and later communities
that form the state/nation or call it an economy in fiscal terms. At
each of these levels, there is a certain amount of production that
totals to the Gross National Product that may be translated into
national wealth.
Creating wealth
Wealth creation begins with production of a product or service that is marketed to receive money. This money may be used to purchase other goods or services that one lacks, but needs. So, any individual, community or country that does not develop its capacity to produce, remains poor.
Wealth creation begins with production of a product or service that is marketed to receive money. This money may be used to purchase other goods or services that one lacks, but needs. So, any individual, community or country that does not develop its capacity to produce, remains poor.
What sustains poverty?
Poverty refers to lack of access to basic needs/services such as food, shelter, clothing, water, medical care and others. Such goods and services are ideally accessed with money, which is got through production and marketing. To produce and market, one needs skills. Without these skills, one is prone to poverty. Having money, but no skill can be very detrimental in one’s economic life. It hinders individuals and nations from saving, building capital and managing money for continued investments and subsequent production.
Poverty refers to lack of access to basic needs/services such as food, shelter, clothing, water, medical care and others. Such goods and services are ideally accessed with money, which is got through production and marketing. To produce and market, one needs skills. Without these skills, one is prone to poverty. Having money, but no skill can be very detrimental in one’s economic life. It hinders individuals and nations from saving, building capital and managing money for continued investments and subsequent production.
Social/cultural issues not only play a role in keeping people poor but also in creating wealth.
Ugandans have a higher propensity to spend than to save; something which usually results from cultural practices that hold individuals so attached to one another, especially in extended families. In such families, only a few of them are engaged in production and the rest are dependants. This has an impact on one’s values that influence the choices one makes, whether to spend or save and invest.
Ugandans have a higher propensity to spend than to save; something which usually results from cultural practices that hold individuals so attached to one another, especially in extended families. In such families, only a few of them are engaged in production and the rest are dependants. This has an impact on one’s values that influence the choices one makes, whether to spend or save and invest.
How can wealth creation be supported?
In the cycle of wealth creation, both the individual and the state have complimentary roles they play. Apart from the human resource of the nation, the state has the responsibility to ensure that the necessary infrastructure and services are in place to give a favourable environment for investment, production and marketing to take place.
In the cycle of wealth creation, both the individual and the state have complimentary roles they play. Apart from the human resource of the nation, the state has the responsibility to ensure that the necessary infrastructure and services are in place to give a favourable environment for investment, production and marketing to take place.
Wealth creation should be supported by availing
development capital rationally to local entrepreneurs, especially where
best practices for growth have been exhibited, but not by patronage.
Patronage, especially from political powers, which is common in Uganda,
undermines the development of free enterprise.
Progressive governments assist entrepreneurs and businesspeople to market national goods/services to the international market because, in most cases, individuals do not have the financial might to do so.
Progressive governments assist entrepreneurs and businesspeople to market national goods/services to the international market because, in most cases, individuals do not have the financial might to do so.
Also, the state should effectively play its
supportive role of putting in place a developed infrastructure such as
all-weather roads.
Kyaliwumba advises government to put deliberate effort in developing factors of production.
“Government must put in place easy access to affordable development capital; build a highly skilled labour force; equitably avail land for investment; support local enterprise, and limit repatriation of profits by foreign investors,” he stresses; before adding, “Government should also put in place an advanced marketing framework and dependable infrastructure, if we are to create wealth for all.”
Kyaliwumba advises government to put deliberate effort in developing factors of production.
“Government must put in place easy access to affordable development capital; build a highly skilled labour force; equitably avail land for investment; support local enterprise, and limit repatriation of profits by foreign investors,” he stresses; before adding, “Government should also put in place an advanced marketing framework and dependable infrastructure, if we are to create wealth for all.”
There should be concerted efforts in helping
investors in sectors such as tourism and minerals to get a better share
of the international market through prudently negotiated deals. Such
deals will not only bring in wealth into the country but will also go a
long way in creating jobs for many Ugandans.
Instead of President Museveni preaching the gospel of wealth for all, the state should zone production systems on the basis of regional comparative advantages, for instance, basing on nearness to raw materials, minerals, soils or favourable climate. These issues, and the engagement of communities in social/cultural transformation, are a matter of governance at the national level.
Instead of President Museveni preaching the gospel of wealth for all, the state should zone production systems on the basis of regional comparative advantages, for instance, basing on nearness to raw materials, minerals, soils or favourable climate. These issues, and the engagement of communities in social/cultural transformation, are a matter of governance at the national level.
0 comments:
Post a Comment