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UPDF 2 INFANTRY DIVISION

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The Future of Wealth Creation in Uganda

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The Future of Wealth Creation in Uganda

Last updated May 18, 2015

The future of wealth creation and national socio-economic transformation is bright. In February 2014, the Ministry of Local Government (MoLG) formulated a Local Economic Development (LED) Policy to guide local governments (LGs) to rethink their role in socio-economic transformation of the country.

The Vision of the LED Policy is to build “A vibrant and competitive private sector-led local economy for poverty reduction, wealth creation and prosperity” in Uganda.

The LED mission is, “To create a local governance mechanism which promotes a conducive economic and political environment for private sector investment, employment in local areas for improved household incomes and service delivery.”

Overall Goal of the LED policy is “A transformed local government system that facilitates effective business oriented locality development with a  focus  on  poverty  reduction  and sustainable  wealth  creation”.

Undoubtedly the LED is a well thought out policy. It shows that that there seems to be a rethinking of the development strategy at the Local Government level, focusing on household income. This is in line with the OWC vision and mission.

However, to make have the nexus between the Local Governments and the OWC work well, there is need to incorporate some of the following ideas:

  • It is important to realize that creating a conducive environment for attracting private investment is in itself not sufficient to guarantee and ensure sustainable wealth creation. There is need for Local Governments to identify possible investment areas and develop actionable/viable/bankable investment plans for each district or region.
  • There is need to zone investments based on comparative advantage to avoid unnecessary competition and duplication. This can be achieved by clearly identifying local priorities which should be catered for in the investment plans.
  • There is need to balance the investment in the different forms of capital—physical, human, financial, social, and political.
  • There is also need to ensure that there is some balance between current consumption decisions and saving for the future at household level. At government level, both central and local governments, there is need to balance spending between recurrent and development components.
  • There is also need to think about the distribution of the wealth between current and future generations.
  • There is need to avoid over politicisation and over democratisation of the development agenda.
  • Most importantly, there is need to maintain current peace and stability as a prerequisite for all the above. To achieve this, there is urgent need to recognize the new nexus between economics, governance and security.

The OWC is multi-sectoral in nature, meaning that it will be crosscutting traversing all sectors encompassing the economy, health, education, infrastructure, investment, industrialization, export (marketing), environmental preservation, rural electrification, research, mobilization, credit, saving and many more.

It is multi-dimensional and multipronged in its approach, in that its activities involves, but not limited to, monitoring, supervision, coordination, planning, implementation, support efforts, social work and community participation. On top of the agenda will be food security and wealth creation emphasizing pre and post-harvest handling of products, diversification, mechanization, value addition and systematic development of infrastructure.

The lines of operation are economic, social and political.

The lines of operation are economic, social and political.

  • Economic: This will involve interventions in provision improved planting and breeding materials, microfinance support services, investment, savings, cooperatives, product handling, mechanization, value addition, marketing and energy. It will also encourage systematic infrastructural development, diversification of production and  careful selection of enterprises.
  • Social: Focusing on low cost housing, provision of water, and construction of education and health facilities.
  • Political: Mobilization for production will involve political leaders at local and national level. Coordination, monitoring evaluation and supervision will require cooperation and support from political and administrative leaders at various stages and levels.

 

                                   Figure 3: Conceptual Framework for OWC

 


 

Conclusion

The OWC intervention was launched by H.E. the President to create a system that facilitates effective national socio-economic transformation with a focus on raising household incomes for poverty eradication and sustainable wealth creation. In its short period of existence, the Operation has helped create debate in the agricultural sector and the arguments are quite constructive and better results are expected. It has also challenged the various stakeholders in the agricultural sector to up their game. In the process, the Operation has connected the government to the people. However, a number of challenges need be addressed, key of which include the apparent lack of coordination by the mandated agencies and lack of a structured marketing system. The OWC is in its stabilization phase. Very soon we shall quit the current stance and concentrate on consolidation and build value chain infrastructure.