Opinion: “Be Frugal” isn’t a government intervention…

The President and his team making a statement of sorts… when they are claiming that “Be Frugal” is a short-term intervention of the state. That is really foolishness and inaction at its best. This is putting all the weight on the citizen and the population itself. They just have to be careful with every single shilling and the state will in the short-term not give you anything or any sort of substantial relief. That’s really the point here…

The state that is filled with nepotism and cronyism. A state so filled with government entities and ministries, huge budgets and salaries. A state that is overspending over capacity on bloated government structures, districts, counties and cities, which are not even able to absorbed in the budgets. That sort of government is telling it’s citizens to be frugal.

The high ranking officials and ministers are complaining about old vehicles. They are getting the state to pay for newest models and custom made to VIP treatment. While citizens are told to be frugal. A State House and an Office of President who is eating large every day. A President with over 130 Presidential Advisors and a cabinet around 80. Not in putting the amount of MPs who are the on the state payroll. In combination with the RDCs and everyone else who is directly appointed in combination with the elected officials both in local government and state level. This whole government is made to be a cash-cow and that’s before civil servants are even paid. The bureaucrats, the teachers, nurses or anyone else holding offices in a government entity. They are part of the play, but the politicians and their appointments are the expensive ones.

That’s why the message in the rising inflation, rising prices on basic commodities and food. The government answer to that: “Be Frugal”. Seriously, that’s it? That’s all you can do? Save some money you either have or don’t have. Wash yourself with less soap, buy less bread and don’t even think using your car. Cars and vehicles are only for the VIPs and the ones who has salaries that actually counts. They have also budgeted pay for air-time and phone-bills, so they don’t have to worry about use of data. Heck, these folks don’t have to worry about Yaka or paying the electric bills either. It is just prefixed and they are well-off because of their office.

Be Frugal”.

That’s all you got? When people don’t have money or currency worth a damn? It is not like the people had much to begin with, but now even less. Their currency or money is less valued as the prices are going up. The salaries are stagnate and the expenses are just going up. You cannot stop the ordinary expenses, it costs to live and it’s like the President and government doesn’t understand that.

The message is just insulting. This is the Cassava Republic and the Republic that is mirrored in the image of the President. It is what his created and his minions are proud of his messaging. However, it is flawed and it isn’t helping. It isn’t even helping himself, as his sitting on the pedestal watching down on people. The poverty is real, even if the President and his kind is “living” in a middle-income country. Peace.

Opinion: 4 MPs issues a Motion to praise the SONA 2022 to get some recognition…

When it comes to the recent high commodity prices, caused, initially, by the re-launch of the world economy after the two years of lockdown and, additionally, by the war in Ukraine, our decision, after careful analysis, is to avoid the traps of tax cuts and subsidies” – President Yoweri Tibuhurwa Kaguta Museveni (07.06.2022).

It is really a spectacle when 4 Members of Parliament uses time and energy to make a motion to praise the President for a speech he held on the 7th June 2022. The 4 MPs saw it fit and usage of their valuable time to speak of the glory of His Excellency. They are having a ceremonial act and showering the old man with the hat with positive vibes.

These MPs are:

Mover: Hon. Emely Kugonza, MP Buyanja East County

Seconder:

Hon. Michael Bukenya Iga, MP Bukuya County

Hon. Sarah Kayaga Netalisire, Namisindwa DWR

Hon. Okot Boniface Henry, MP Youth Representative Northern

It is really amazing that Kugonza MP, Bukenya Iga MP, Kayaga Netalisire MP and Okot MP who are all in on it. These 4 MPs have used their time in office to file a motion of praise and appreciation of the State of the Nation Address of 2022. That’s what they are using their time on.

This is clearly done so the President and the State House notice their existence. They wants to score-some brownie-points and get goodwill from the old man. The MPs wants to shed a positive light and show loyalty. They are using their time to give credit to inaction and lack of concern to the rising prices, the inflation and the lack of government help in the middle of crisis. That’s what the MPs are doing and it should be called out.

Going solar:

Once the solar powered irrigation pumps are on the market, the Government will buy them for some of the co-operatives or farming villages, where one pump can be shared by a number of small farmers” (Museveni, 07.06.2022).

The MPs wants to envision the empty pledges which is so common placed in any speech from the President. The MPs must look forward to get “solar powered irrigation pumps” because I think that’s a mirage. The President promise a huge leap when he in the last period or last term was proud of bottle-Irrigation as a way of solving irrigation cheaply. This is just following the pledges of the President during the lockdowns, which was Village-TVs and Village Radios… that no one ever saw. Therefore, people should expect the same of the “solar powered irrigation pumps” as with other pledges, which shows this will never happen under his reign. It is to costly, a big burden and it will not be sustainable…

They are directly acknowledging a speech with this sentiment:

Another danger to our rapid social-economic transformation is the corruption of political actors and Public servants who do not only steal government money, thereby denying the population the services that money would have provided, but they also parasite on our business people. Business people and investors, do not feel beholden to these parasites. Expose both their requests for bribes and their schemes for frustrating those that do not pay bribes. Action will be taken for the benefit of the business atmosphere in the country” (Museveni, 07.06.2022).

It is really vivid when someone calls people insects and parasites. This is a posture and tough talk, as his government is known for being corrupt and accepting graft. The same government that promoted and was proud of the “Presidential Handshake”. That way civil servants got kickbacks for photo-copying papers in a court trial winning the state money. The same President and Government calls the corrupt parasites. This doesn’t add up and still the MPs wants to sing psalms in the Plenary Sessions for greatness of the State of Nation Address of 2022. That sounds stupid, right?

So, I don’t get what the MPs are seeing in this speech. Unless, they are only doing this to give empty sloganeering and show their loyalty to him. That’s the true legacy of doing this sort of motion. Just to signal the State House and the Office of the Presidency. We can just expect a small acknowledgment from His Excellency.

The 4 MPs really wasting their time doing this. Instead of looking into the fallacy of the speech. They uses it to be in the good graces. The MPs are not using their time or their wisdom to actually make a difference. They are just there to bow down to the master and hopefully get a moment to kiss the ring. Peace.

The Rise of the Cassava Republic: Low-Income turned into Middle-Income out-of-nowhere..

Remember, the locusts, the rising waters of the Lakes, the floating islands, the landslides, the terrorist bombs, the covid-19 and now the rising commodity prices artificially caused by the Ukrainian war. In spite of all these, the Ugandan economy, by the budget time in the next few days, will be standing at US$ 45.7billion by the exchange rate method and at USD 131.6 billion by the method. This means that the GDP per capita is now $1046. You remember, the entrance points for the lower middle-income status, is USD 1036. We have now passed that figure. Congratulations. However, to be declared a middle-income country, you need to sustain this for two to three consecutive years. I am confident, we shall over perform, in achieving that” (Museveni, 07.06.2022).

The President yesterday surely said a lot of things yesterday. I thought this one would be one of the myths and legends of old. That no one would take seriously… because the delusion is real. The powers of the State House and all of his Presidential Advisors should have told him “no”. Even the son who prefers to party and throw birthday parties should have advised him to say otherwise. Because, this is useless…

Museveni isn’t close to Middle-Income Country. Not by stretch, a mile or such. That’s because of the financial policies, the lack of financial integration and all the other means of which is a proper open economy. Alas, if it had been open and tradable, he wouldn’t have his hand in every cookie-jar. That’s why his butt-hurt that his coffee deal with Vinci is under fire. Because, no one see it as a viable enterprise or idea to begin with.

We know in a nation of hand-to-mouth, in a nation of gig-economy and 1 out of 5 is living in direct poverty. It’s hard to believe that nation is a middle-income. Heck, there isn’t even a growing middle-class either. If it had been a growing middle-class, there would be more stores and other sorts of outlets for people to buy luxurious goods. However, there hasn’t been a growth of that either.

The growing inflations, the deficit financing and the running debts of nation is proving otherwise. The state isn’t growing with domestic financing, but the budgets are bloated and covered by expensive loans. Which the next generation or the next President has to clear. Since, Museveni is possible dead when the maturity of these loans has hit peak. There is already trillions of shillings going out of the economy just to finance old loans, as the state is hiking up new one. That’s all to keep the upkeep of a huge entourage and cronies surrounding the President. With a mushroomed cabinet and gerrymandering of epic proportions, that is all costing and the amount 555 MPs says it all. They are all paid and has perks. So, the state is coving these expenses without adding any new revenue or such.

That’s why hearing a man like this saying… they have hit Middle-Income is nonsense. It is pure A QUALIFIED BS. It is utterly ridiculous. It would be funny, if it was a punchline or a joke, but he said this and meant it. Like it was fact. When the World Bank state the nation as a “Low-Income” and the budgets, the domestic revenue and everything else proves it. Maybe the lack of Governor of Bank of Uganda is haunting him. Since, he can now make things up on the spot and make it legit. There will be no push-back from the professionals… We know the MoFPED doesn’t read the papers or look over the numbers before voting on the supplementary budgets. So, the Minister of Finance is far from professional. His just eating and hoping his Permanent Secretary can save his behind.

Well… this is garbage. This is trash. We hope for betterment, but under the self-styled President for Life. I wouldn’t count on it. I would only count on cassava. Peace.

A brief look into Mzee’s State of the Nation Address of 2022…

When you have speaking as much as President Yoweri Tibuhurwa Kaguta Museveni… there is little wiggle-room or ability to “invent the wheel”. He has said most things and is repeating himself. He is trying to forge narratives and sound epic. I will not look into smaller details, but just outright straight nonsense, which is plenty of. A man who has over 130 Presidential Advisors should have the corrections and the staff to secure the facts. Nevertheless, there is “only one man with a vision” and his always “correct”.

The “correct is a running feature in his speech too. About the “Correct Ideology”, “Correct Pan-Africanist Ideology”, “Correct NRM Policy”, “Correct Strategy” and “Correct Ways” which is just typical of Museveni. Where his always correct and cannot be wrong. He has all the remedies, but ironically never really fixed things or been able to elevate the Republic since 1986.

Here is quotes and breaking down each piece by piece:

Some myopic people, thought that this was sandy ground where the NRM had constructed the house of Uganda. However, the onslaughts to which Uganda has been subjected in the last 2 or 3 years, have proven that the Uganda house the NRM has constructed in the last 60 years, including the preparatory years before 1986, has been built on hard ground, indeed” (Museveni, 07.06.2022).

It is really magical how Museveni rewrites history. The NRM wasn’t established in 1962, which is 60 years from today. The NRA was born out of rebellion in 1980. The Uganda Patriotic Movement (UPM) was born earlier than that and the failure of a campaign in the election. Was a reason for the rebellion and creation of the mentioned NRA. The earliest known body, which people know of and part of was Front for National Salvation (FRONASA). Which dates back to 1971. Therefore, that is far from the vision of NRM back in the day. That’s why I have trouble to see how NRM worked for a better Uganda in 1962 or the 1960s. That’s rewriting history, which should be rebuked.

The NRM was entity, which came into light in 1980 as a rebellious outfit and resulting the prolonged bush-war that lasted to 1986. So, saying that the NRM has constructed a house on a hard ground is foolish. That is a delusion and not legit. That is making historical facts, which cannot be proven and is only a political fiction of the President.

Moreover, the wise man’s house is currently full of surpluses, without too much use of irrigation or the use of fertilizers. In the coming financial years, we are going to intensify the modest efforts we have already started on, in connection with irrigation. With irrigation, we have worked with the private sector to produce solar-powered water pumps that the rich farmers can buy and engage in mini-irrigation, farm by farm. Once the solar powered irrigation pumps are on the market, the Government will buy them for some of the co-operatives or farming villages, where one pump can be shared by a number of small farmers” (Museveni, 07.06.2022).

This here will never happen… remember the Village TVs and the other pledges during the two-year lockdowns? Well, non of that has happened. Neither has plenty of the other pledges either. It took decades to ensure local councillors could get bikes or even able to give away garden-hoes to the villages. Therefore, when these things has been impossible and taking decades. This will happen the earliest 2030 or 2040. Museveni will not have the funds, the ability or the manpower to make it happen. That’s why he has praised water-bottle irrigation and other means to develop the agricultural sector. I have a hard time believing that this will happen. It needs a miracle or a generous donor who can foot the bill. Because, the NRM will never do this. Nedda ssevo.

When I met Madame Pinetti, she had no idea about coffee. I, however, could see that she had a wide network of contacts. I asked her to look into coffee. After sometime, she came back with a positive report that it was doable. Therefore, those attacking that project, are supporters of okukenenula, (ekyejwiiso) of Africa – perpetual bleeding. If they were not, they would have responded to our call of 1986 and after, to come forward and add value to coffee and seek government assistance. Instead of attacking the saviour (oyo anataasa), if you are genuine, join the liberation effort. It is criminal for anybody to continue arguing for the continued export of raw-materials in Africa when there is 90% more value in that product that you are giving to outsiders” (Museveni, 07.06.2022).

The President thinks his smarter than anyone. Is his the owner of Hawk Limited or what? Why does he cares so much about the company and the coffee processing in the Republic? It makes sense that his invested and is the shadow owner of the company. When he cares so much about it. Because, the deals written between the state and the UVCC is creating a monopoly and taking over the trading of coffee beans. That’s why people wants to block it. The company has no knowledge or any sort of experience in the business either. While others are already working and processing coffee beans. Therefore, the deal in question is made with wrong intentions and illegal too.

It is striking that his so angry and bad tempered like someone stole a candy from a kid. As an old man he should understand this deal or agreements isn’t righteous. That is if he cares about the industry. Instead he thinks he can trick the public and the farmers. However, people can google and thinks leaks. So, the truths are coming out. The Vinci Coffee deal is a disaster… and Museveni should reconsider, but trust me. His greedy, so his trying to soften the blow and ensure he gets the best deal for himself. Which is what an ageing “revolutionary” does…

Another danger to our rapid social-economic transformation is the corruption of political actors and Public servants who do not only steal government money, thereby denying the population the services that money would have provided, but they also parasite on our business people. Business people and investors, do not feel beholden to these parasites. Expose both their requests for bribes and their schemes for frustrating those that do not pay bribes. Action will be taken for the benefit of the business atmosphere in the country” (Museveni, 07.06.2022).

This here is the most bogus statement within the National Address… this year and that says a lot. We know that Gilbert Bukenya has no issues, Amama Mbabazi, Jim Muhwezi, Hentry Tumukunde and the list goes on. Corruption and greed is a vital part of the commercialization of politics under Museveni. The kickbacks, envelopes and misuse of power is well known. The President himself vouched for a “Presidential Handshake” not too long ago. So, the President is really caring about this. His earning on corruption himself and his directives is promoting companies that his either getting greased or profiting from. If not, why is Dott Services is so well-known…

Therefore, let all the NRM MPs and other positive elements, rally around the patriotic programme of the NRM that has transformed Uganda from the failed state of 1986, with the economy expanding in size 30 times plus in 30 years, in spite of the endless betrayals by certain elements. Those who cause frictions among the NRM fraternity, should be carefully examined. Why can’t you discuss any matter in non -antagonistic ways. Antagonistic ways only work for the enemy” (Museveni, 07.06.2022).

Here the President is speaking about possible “NRM Rebels” which is the most endearing thing that is… because a rebel himself isn’t accepting any rebels. That is the truth about the President and his close associates. They are just supposed to listen and give way. The NRM MPs are just there to sign off and do what the President says. That’s what is “patriotic” and the “correct NRM way” just so you know. That’s why he says this and speaks like this. It is a betrayal to stand-up or even question the “high above”. The ones who don’t know that after all these years have clearly not listened. That is obvious by now. If you dares to challenge or go against him from within… than you are an enemy. Therefore, know what you do and never ever consider that.

This was my takes from the National Address of 2022. Peace.

The Rise of the Cassava Republic: The MPs will eat, but not help the general public…

The speaker Among and the members of the parliamentary commission reportedly resolved a salary hike by at least 30% effective the coming financial year of 2022-23. Among argues that the inflation levels are affecting the performance of the lawmakers” (Emmanuel Busingye – ‘Mixed reactions over Among proposal to hike MPs salary’ 02.06.2022, Ekyooto.co.uk).

What is really striking is that the Members of Parliament has issued a possible pay-rise of a total of 193 billion shillings shared among the 555 MPs. If those billions of shillings are shared equally between the MPs than each of them would get an additional 347 million shillings each. That is happening while the rising inflation and commodity prices are hard for people to handle.

The public are not getting any direct incentive or help with the basic commodity prices. The President has told people to eat cassava and live within their means. While the MPs are collecting more money and they have already huge wages. The MPs has free vehicles, salaries, paid per plenary session and whatnot. Therefore, they have already more than plenty and not lacking in anything.

While others has to contemplate to buy soaps, cooking oil or petrol. There are so many other things that is hit by inflation and rising prices, which affects the households. The livelihoods and salaries of the ordinary worker isn’t being stipulated. Neither is the state doing anything in concern to targeted taxes, levies or ensuring the population can afford it.

So, now that this is happening, the lawmakers and the ones who can help the population with it’s needs. Are more concerned about their added expenses, but they already earn millions of shillings and live large on the public expenditure. The public are not even getting cents on a dollar or any sort of push in the hardships they are facing.

The President told people to eat cassava and skip bread. That just shows what sort of mechanism and lack of concern that is on the top. The elite and the MPs are not feeling it or are unbothered. They don’t care if they are vouching for money and topping off more expenditure. The State House has already additional supplementary funds and now the same is scheduled for the MPs. They are all living outside their means and has vast pockets filled by the state coffers.

The public is really being played around with and only of value in a election. The rest of the time the state doesn’t pay them no mind. If civil servants or people paid by state coffers like health care workers strikes… the MPs and Ministers speaks of mass-firing and axe their jobs. That’s because the workers cannot even pay electrics or the pay to get to work with their salaries. While the same folks in chambers of power has no scruples giving millions of shilling in addition to their bountiful payments, which they will have for years. Therefore, the double standard and hypocrisy is out in the open.

The MPs are worried about the rising prices and lack of value for money. While the Ministries and MPs are not covering the health care workers, teachers or local government civil servants. No, they have to make it on the own. These have to live on measly salaries and hope to get by. Meanwhile convoys of big-men and MPs are driving in SUVs through town. They are acting as big-shots and of vast importance, but they are not doing anything substantial. Because, if they did anything that did matter. They would look after the poor, the starving and the ones who cannot afford a bar of soap. However, they are disinterested in doing that and would only give away a bar of soap if there is a by-election or something.

So, the MPs doesn’t care and clearly Besigye’s “Wake-Up Call” is needed. Because, the gentlemen and ladies of the Parliament won’t bat an eyelid. They don’t care and neither does the State House. That is the revolution that Museveni brought, which was “our time to eat”. Peace.

The Rise of the Cassava Republic: A look into President Museveni’s “National Address “On the State of the Economy”

To use frugally these imported items (kukekereza, kwereembareemba) or kubyesonyiwa (get alternatives)” – President Yoweri Kaguta Museveni (22.05.2022).

Cassava. Cassava. Cassava. Well, here we are and things are not changing. The Head of State came with his history lecture, but he says he fixed everything since 1986, but the problems are always returning. Things are never stable enough or ability to permanently find solutions. That’s why even the “revolutionary” man and His Excellency is living large. The same does all his cronies and it’s really unique that a man who has all the wealth and all the power. To say to the citizens to not by imported items and switch to cassava.

Just read these lines in 2022:

The struggle between the two lines, therefore, was as follows: the revolutionary side (our side) pointed out that what was primary was to avoid death (massive death – ekyorezo), all other problems notwithstanding. The reactionary line was to emphasize the loss of jobs, loss of businesses, loss of school time, pregnancies of young girls, etc. Our line was that ebizibu (problems) are not equal (comparable) to death (okufa). Death is irreversible, while problems are reversible at the appropriate time. “Ekitatta Muhima, tekimumalako ente”, we say in Luganda (if a Muhima does not die, even if he loses cows, he will, in time, recover them)” (Museveni, 22.05.2022).

He is speaking well of the lockdowns and the stopping of society as he did for months during the global pandemic of late. Where the state had no emergency or contingency plans to help their citizens. There was a lack of support and the price of survival must have been really hard on the citizens living hand-to-mouth. As there is only one elite who could work from home. The day-traders and the ones living of their hands couldn’t do that directly. That was why so many was hurting.

Now, he speaks of the revolutionary line, as the NRM is far from that now. They have become the elites and the bourgeois who is eating of the plights of the rest. The President will not say that, but his staleworths, associates and all in collective is living large while the rest is struggling. That’s why his speaking like this. Because, it is so easy on the throne and when you especially doesn’t come with solutions, but let the people fix it for themselves. That’s the “revolution” his bringing… and he is clearly not on point with the needs of the people anymore. As their plights and the trouble to afford basic commodities isn’t going away and he choses to nothing about it. Since it is only a problem, but he don’t won’t to solve it. As it is not about survival…

He continues:

Again, here, we confront the struggle between the two lines: the revolutionary, patriotic line of the truth and seriousness on the one hand and the reactionary line of populism, cheap popularity and lack of realism of: prices-control by Government, subsidies, tax cuts on the other hand. Although this is not as serious as covid-19, the choices here, are also with serious implications. It is a choice between okubandama (collapse) of the economy on the one hand or survival (kwetaasa, kuhonoka). The real medicine for high prices and shortages, is increased production. Produce more, if you can” (Museveni, 22.05.2022).

It is really clear that his trying a balancing act, but it’s far from revolutionary at this point. It is being relaxed about the trouble and issues of the people. Instead of supporting and finding means to an end for the mwannachi. He prefers to look silently by and hoping the resilience of the people will linger on. Neither is his fearing uprisings or major demonstrations. Because, the “bread and circus” is working. Secondly, there is enough to keep people content with bare minimum. While the people should afford a bar of soap or cooking oil. The loaf of bread is just a proof that the society is weakening and the middle-class is dying too. There is only the rich who is connected to the government and their inner-circles. The businesses are thriving because of connections and suction from associates of the state. The rest has to fight and struggle.

He speaks of producing more, but who is buying and how are you selling that? When people cannot afford things to begin with. That will only benefit the traders who are exporting and not the people who cannot earn enough to pay the increased prices. Especially, when the state isn’t planning to help to regulate or subsidies imports of certain products. Neither, can certain products be produced at a massive scale for a reasonable price over night either. So, the President here is really naive or if not. Ignorant on the facts and what this really do. Its more Cassave and less wheat all over again…

In conclusion, I repeat that the only, really, serious dangers to our future are: reliance on only rain-fed agriculture; damage to our environment; and a nuclear-war among the mistake-makers” (Museveni, 22.05.2022).

Well… there you have it. This is the vital parts of the speech, because the rest was more history lessons and not relevant for today. That’s why I have only these paragraphs. He just shows what his asking for the public. You have to figure it out and if not use less soap. If not someone has to start production in Namanve or Luzira for that matter.

Museveni promised a “Steady Progress” and “Securing Your Future” but in this speech. He never really meant these things. Because, he is leaving people to fight for themselves. Since he has no incentive or reasons to do things. That’s for a simple reason. He don’t fear retribution or a revolution against him. As the President for 36 years… he hopes he has dozed people off so much. That they will never care to turn against him in the streets, avenues or in the villages. Even if they can’t afford basic commodities. Peace.

South Africa: National Treasury’s Response to the Economy entering Recession (06.06.2017)

Bank of Uganda’s Monetary Policy Statement for October 2015 (20.10.2015)

BOU MPS OCT P1BOU MPS OCT P2

Press Release: Africa Faces the Challenge of Sustaining Growth amid Weak Global Conditions (05.10.2015)

SAP WB

WASHINGTON, October 5, 2015— Sub-Saharan Africa countries are continuing to grow, albeit at a slower pace, due to a more challenging economic environment. Growth will slow in 2015 to 3.7 percent from 4.6 percent in 2014, reaching the lowest growth rate since 2009, according to new World Bank projections.

These latest figures are outlined in the World Bank’s new Africa’s Pulse, the twice-yearly analysis of economic trends and the latest data on the continent. The 2015 forecast remains below the robust 6.5 percent growth in GDP which the region sustained in 2003-2008, and drags below the 4.5 percent growth following the global financial crisis in 2009-2014. Overall, growth in the region is projected to pick up to 4.4 percent in 2016, and further strengthen to 4.8 percent in 2017.

Sharp drops in the price of oil and other commodities have brought on the recent weakness in growth. Other external factors such as China’s economic slowdown and tightening global financial conditions weigh on Africa’s economic performance, according to Africa’s Pulse. Compounding these factors, bottlenecks in supplying electricity in many African countries hampered economic growth in 2015.

“The end of the commodity super-cycle poses an opportunity for African countries to reinvigorate their reform efforts and thereby transform their economies and diversify sources of growth. Implementing the right policies to boost agricultural productivity, and reduce electricity costs while expanding access, will improve competitiveness and support the growth of light manufacturing,” says Makhtar Diop, World Bank Vice President for Africa.

According to Africa’s Pulse, several countries are continuing to post robust growth. Cote d’Ivoire, Ethiopia, Mozambique, Rwanda and Tanzania are expected to sustain growth at around 7 percent or more per year in 2015-17, spurred by investments in energy and transport, consumer spending and investment in the natural resources sector.

Gains in Poverty Reduction

Africa’s Pulse found that progress in reducing income poverty in Sub-Saharan Africa has been occurring faster than previously thought. According to World Bank estimates poverty in Africa declined from 56 percent in 1990 to 43 percent in 2012. At the same time, Africa’s population saw progress in all dimensions of well-being, particularly in health (maternal mortality, under-5 mortality) and primary school enrollment, where the gender gap shrank.

Yet African countries continue to face a stubbornly high birth rate, which has limited the impact of the past two decades of sustained economic growth on reducing the overall number of poor. Countries still lag behind those in other regions in making progress on the Millennium Development Goals (MDG). For example, Africa will not meet the MDG of halving the share of population living in poverty between 1990 and 2015.

Weaker Commodity Prices

Sub-Saharan Africa’s rich natural resources have made it a net exporter of fuel, minerals and metals, and agricultural commodities. These commodities account for nearly three-fourths of the region’s goods exports. Robust supplies and lower global demand have accounted for the decline of commodity prices across the board. For instance, the drop in the prices of natural gas, iron ore, and coffee exceeded 25 percent since June 2014, according to the report.

Africa’s Pulse notes that overall decline in growth in the region is nuanced and the factors hampering growth vary among countries. In the region’s commodity exporters—especially oil-producers such as Angola, Republic of Congo, Equatorial Guinea, and Nigeria, as well as producers of minerals and metals such as Botswana and Mauritania, the drop in prices is negatively affecting growth. In Ghana, South Africa, and Zambia, domestic factors such as electricity supply constraints are further stemming growth. In Burundi and South Sudan threats from political instability and social tensions are taking an economic and social toll.

Fiscal deficits across the region are now larger than they were at the onset of the global financial crisis, the report finds. Rising wage bills and lower revenues, especially among oil-producers, led to a widening of fiscal deficits. In some countries, the deficit was driven by large infrastructure expenditures. Reflecting the widening fiscal deficits in the region, government debt continued to rise in many countries. While debt-to-GDP ratios appear to be manageable in most countries, a few countries are seeing a worrisome jump in this ratio.

The dramatic, ongoing drop in commodity prices has put pressure on rising fiscal deficits, adding to the challenge in countries with depleted policy buffers,” says Punam Chuhan-Pole, Acting Chief Economist, World Bank Africa and the report’s author. “To withstand new shocks, governments in the region should improve the efficiency of public expenditures, such as prioritizing key investments, and strengthen tax administration to create fiscal space in their budgets.”

Moving Forward

Growth in Sub-Saharan Africa will be repeatedly tested as new shocks occur in the global economic environment, underscoring the need for Governments to embark on structural reforms to alleviate domestic impediments to growth, the report notes. Investments in new energy capacity, attention to drought and its effects on hydropower, reform of state-owned distribution companies, and renewed focus on encouraging private investment will help build resiliency in the power sector. Governments can boost revenues through taxes and improved tax compliance. Complementing these efforts, governments can improve the efficiency of public expenditures to create fiscal space in their budget.

%d bloggers like this: