Drying up of kyeyo cash, donor money good news for Uganda

This follows a similar move by the major Western donor nations last year following the corruption scandal in the Office of the Prime Minister.

When school teachers asked for a pay increase a few months ago, the government said it did not have the money to raise teachers’ pay.

The Observer newspaper reported on Friday, November 22, that remittances by Ugandans living and working abroad had dropped from $225 million in 2011 to $187 million in 2012.

Last week, with its revenues drying up, the government held talks with the electricity distributor Umeme about the cut back in the subsidy it gives the power company.

Starting the week before, there was a noticeable increase in electricity load shedding in Kampala, usually with power going off at about 8am and returning just before 7pm.

The 20-year story of Western aid pouring into Uganda for everything from government budget support to all sorts of projects like “Rabbit Multiplication”, “Girl-Child Initiative”, “Seven Towns Water Project”, “Community Youth Initiative” and others that employed thousands of Ugandans, equipped the projects with fancy double-cabin pickups, funded redundant workshops and seminars, seems to be at an end.

It is this foreign aid that in part turned the white collar middle class into a mentally lazy, complacent and incompetent lot. It gave many Ugandans a false sense of economic growth and wellbeing.

It delayed by 20 years the groundswell of national indignation at the abnormal level of corruption in Uganda.

The best news of all is that these cuts in Western aid come at the same time the West is in a five-year period of a sharp economic slump, followed by stubbornly high unemployment, underemployment and the kind of decade-long stagnation or anemic growth that afflicted Japan from 1998 to the early part of 2013.

Because of this, Ugandans for whom life has become unmanageable and who decide to go to the West for “greener pastures” are finding the green pastures in the West not too different from the light green or brown pastures in Uganda.

If one did not go to America before 2007, right now there is not much to gain from heading there. As the sharply reduced amount of money Ugandans remit home shows, the economic opportunities in the West are no longer what they once were.

When business news reports mention “growth” these days in Britain, they are referring to 0.1 per cent or 0.8 per cent figures. Gone are the days under Margaret Thatcher and to a degree Tony Blair when Britain would record growth rates of 5 per cent or 6 per cent.

And even this 0.3 per cent or 0.5 per cent is mainly because of large investment banks and a handful of companies that are expanding production and finding new markets in the booming Chinese economy.

Economists are increasingly discussing the new reality of “jobless growth” or for the majority of the middle to lower working classes of Europe and America, whatever economic growth the official figures show, it just does not feel real to them, struggling as they are with personal debt, student university debt, low-paying jobs and wages.

For the majority, wages have either remained stagnant for five years now or, in some instances, are now even lower in real terms than what they were in 1992.
After the news broke in September 2008 of the collapse of the giant American investment bank Lehman Brothers, two weeks later I wrote in my then Saturday Monitor column that this was the beginning of a new era of worldwide economic struggle and eventually the West would be forced to cut back its aid to developing countries like Uganda

A few weeks ago, the Al-Jazeera TV news channel aired a documentary about the large numbers of Europeans from Portugal, Spain and Greece who are queuing up at the embassies of Angola, Mozambique and other African countries for visas in search of work in Africa.

Very few people alive today would have imagined a time coming when Europeans would find themselves so desperate because of their economic crisis that Africa, of all places, becomes their destination for Kyeyo. This has been a long time coming and long overdue.

What Uganda needs now is for that money remitted by Ugandans to drop even further from $187 million to about $87 million.

This will have the effect of keeping families back in Uganda alive with vital money for parents’ medicine, school fees and other essentials, but with a drop of $100 million, shall live us a more sober Uganda.

Wedding budgets will start being cut back, as will be the number of families owning second cars. Banks that misread the economic reality of Uganda and expanded into all corners of Kampala and most upcountry towns will close down some of their branches and ATM machines.

Whoever still thinks building hotels is a profitable business will soon learn the grim truth in the increasing number of empty rooms and banquet halls that used to be dominated by conferences and workshops where participants mainly talk about nothing.

Economy
This tightening of belts, reducing of budgets and cutting back on business overhead costs will leave the Ugandan economy in 2014 feeling like what it felt like in the period between 1979 and about 1983, the years of austerity and scarcity.

The 20 years between 1992 and 2012 we devoted to eating pork, watching European football and drinking ourselves silly on the back of free western aid inflows were the years we should have done serious thinking about our country’s future.
They allowed us to let the government off the hook about its misuse of our taxes and national resources.

To many in this complacent middle Uganda, the news media, some NGOs and civil society activists and the political opposition parties were either “disgruntled” or always looked at NRM Uganda in a negative light.

The lonely voices that warned that Uganda was seated on an economic and social volcano, ignored in the early 1990s (The Monitor, The Citizen newspaper, Michael Kaggwa of the DP Mobilisers’ group, the Uganda People’s Congress, The Shariat newsletter and a few others) now stand to be vindicated about what a Fools’ Paradise was created by the NRM government in this country.