"It's shameful that the UDF party wants to take us back to the dark days,"

Mr Gwanda Chakuamba (2003)

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Thursday, October 30, 2008

Uganda should emulate Malawi for faster economic growth

Mbatau Wa Ngai

is heartening to learn that Ugandan leaders joined their Kenyan,
Tanzanian and Swazi counterparts who have gone to Malawi over the past
three months to learn how the poor southern African country defied
donors three years ago and subsidised its farmers whose response was
the doubling of maize production in one year.

In retrospect, it seems incredible any half-competent economic
policy-maker could have a country as poor as Malawi not to give
subsidies to its farmers at a time when entire population was facing
mass starvation. But the donors, led by the World Bank and the
International Monetary Fund (IMF) did exactly that at a time when the
country needed to import 400,000 tonnes of maize.

Malawians’ plight was made worse by its having to import all its needs
through South African ports, railways and road networks which the
country shared with its other land-locked neighbors, Zambia and

Fortunately for Malawi, its President Mbingu wa Mutharika had worked
with the Washington-based Bretton Woods institutions – the World Bank
and the IMF—long enough to know their lack of understanding of African
problems although this did not stop them from writing prescriptions and
demanding that they be followed to the letter or else.

When Malawi refused to toe the then economic orthodoxy that the peasant
farmers be left at the mercy of free market forces, the donors walked
away. But three years later, after first dismissing incontrovertible
evidence that the subsidies had enabled farmers to increase their
production to 3.6 million tones, more than double the country’s
requirement of 1.6 million tonnes, the donors are going back to Malawi.

The lesson here for Uganda and other African countries that have
suffered unnecessarily because of heeding donors’ advice to free up the
markets and get out of business, is that they take a second look and
see what sectors of the economy would be better served by the state’s

Those countries that have not completed a wholesale sell-off of public
assets should also reflect on the  fact that the developed countries
that supported the free market doctrine most vocally are today
competing on who will buy a greater stake in their countries’ financial

In Uganda, the argument should not be on whether the government should
subsidise farmers or get involved in industry or any other business but
on how best it can do so to ensure that tax-payers get the best value
for their money. Perhaps, this soul searching could result in the
government kick-starting agro-business that would add value to local
agricultural produce before exporting them to the regional and global

This would be undoubtedly better than waiting for private investors
mainly from the industrialised countries many of whom seem more
interested in the incentives they get from government, such as free
land, than in setting up sustainable industries and businesses.  

The result is that some of these fly-by-night carpet-baggers sell off
the land as soon as they get their hands on the title deed. Other
brief-case investors are more interested in taking advantage of their
employees poverty by paying them slave-wages and forcing them to work
in appalling conditions.

Yes, the Malawi experience should lead to a re-think of every policy
that has been imposed from Washington and other industrialised world
capitals over the past four decades. After all, instead of these
policies making the majority of the population richer even in countries
like Kenya where there were no civil wars during the period they became
poorer and increased the gap between the rich minority and the poor

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