Our past is another country

By Gamal Nkrumah

President Hosni Mubarak talks to Ugandan Foreign Minister Eriya Kategaya

"A decade ago inflation in Uganda was 240 per cent. Today, it stands at less than five per cent. That is no small achievement," Uganda's Foreign Minister Eriya Kategaya told Al-Ahram Weekly. Kategaya, who is on a week-long visit to Egypt, met with Egyptian business leaders as well as officials from various ministries. And while political matters were discussed, economic and trade issues topped the agenda.

British Prime Minister Sir Winston Churchill called Uganda the "Pearl of Africa". And a number of prominent Egyptian businessmen have invested heavily in Africa's "Pearl", constructing industrial parks and hydro-electric projects. They are also involved in massive property development projects in the capital Kampala. Egypt is not alone in seeing Uganda, with its radical economic liberalisation programme, as a key player in the Common Market of Eastern and Southern Africa (COMESA).

Uganda's strategic location at the heart of the Great Lakes region of Africa, its control of the sources of the River Nile, and its involvement in the civil wars of Sudan and Congo, two of Africa's largest and most politically unstable countries, lends a certain urgency to the Egyptian-Ugandan talks.

But Uganda, like many other countries in Africa, is still beset by a chronicle of both success and failure. The biggest failure has been the northern, less developed part of the country. Skirmishing between insurrectionist forces and the Ugandan government, including shoot-outs that now occur with terrifying regularity, have reduced economic activity to a trickle. The trouble is that the more successful the southern part of the country is in attracting foreign investors, the more likely insurrectionists in the north are to play the tribalist and regionalist cards. The rebels claim that Kampala is deliberately underdeveloping the north, condemning its inhabitants to eke out a miserable existence in an impoverished backwater which has been reduced to a reservoir of cheap labour for the more developed south.

Yet unhappily, the pattern would seem to be set. The south is the new Uganda, the north is the old, warn-torn Uganda of the past. A bitter colonial legacy is being ruthlessly entrenched. The warring trigger-happy despots of the past -- Idi Amin, Milton Obote and Tito Okello -- all came from the north. They turned Uganda into Pandemonium.

Uganda is one of five countries in the entire African continent that has absolutely no restrictions on capital account transactions. There are no barriers to 100 per cent foreign ownership of investments or to remittance of ownership. The Ugandan currency, the shilling, is fully convertible, and remittances from Ugandans working abroad has become a major source of revenue. Small wonder the country has become the darling of the international financial institutions.

Uganda was heavily dependent on agricultural exports in the past, with coffee the main foreign exchange earner. Today, while coffee still provides the lion's share of export revenues, the country is successfully diversifying into other cash crops such as tea, cocoa, cotton, tobacco and horticulture. While agriculture's contribution to the Ugandan economy fell from 56.1 per cent in 1986 to 44.7 per cent in 1996, the share of the trade and commerce sector has jumped from a mere 0.9 per cent a decade ago to 12.9 per cent today. Meanwhile, shares in the manufacturing and construction sectors have doubled. Infrastructural development is given top priority by the government, and all major and feeder roads, which were badly damaged during the civil war of the 1980s, have been rehabilitated. With less than 10 per cent of its mainstream capacity of 2,700 megawatts of power currently exploited, Uganda has the potential to be a major power supplier to the rest of Africa.

With a growth rate of 10 per cent, it is also the fastest growing economy south of the Sahara. Since 1991 over 1,000 foreign small- and medium-sized companies have chosen Uganda as the base for their operations in Africa.

Nevertheless, many problems persist. As in many developing countries, Uganda's banking system is overstreched in its lending operations, for credit facilities far outweighs the sector's capacity to mobilise savings. New investors are being encouraged to merge with existing establishments. Now, at last, foreigner investors are beginning to set up new financial institutions. Interest rates stand rather high at 20 per cent, but that figure compares favourably to the African average. The mineral sector remains largely undeveloped, and Uganda has considerable untapped mineral resources, including gold, oil, tin, cobalt and iron ore.

AIDS is the biggest single internal concern of the Ugandan government. Kategaya stressed that the epidemic hits hardest at the most productive section of the labour force -- young people in their 20s and 30s. Some estimates put the number of AIDS sufferers in Uganda as high as 1.2 million, and HIV-positive individuals are estimated to constitute around 30 per cent of the population in urban centres. The influx of refugees from surrounding countries has compounded the problem. "There are over 300,000 Sudanese refugees in Uganda," Kategaya said.

But Uganda's biggest headache is its strained relations with its two neighbours -- Sudan to the north, and Congo to the west. "The Sudanese government-armed Lord's Resistance Army [LRA] have bases inside Sudan's Equatoria region bordering Uganda. The LRA has committed gross atrocities, and civilian casualties in the northern Ugandan districts of Gulu, Arua and Kitagum have been high. Furthermore, development in the north has come to a standstill, and economic and social life is severely disrupted," Kategaya told the Weekly.

What about the Sudanese government's charge that Uganda is backing the Sudan People's Liberation Army (SPLA)? "Well, indirectly they are correct," admitted Kategaya. "We give moral support, and at times diplomatic support, to the SPLA. But Uganda is a poor country, and we do not have the resources to arm the SPLA or assist them financially. Sudanese government forces have bombed our territory and killed innocent civilians in the past. The southern Sudanese have been fighting successive Sudanese governments since the independence of Sudan in 1956. Only for a brief period immediately following the Addis Ababa agreement of 1972 did the war subside. That means there is a serious problem in Sudan. Uganda has no territorial designs on any of its neighbours," he added, "but the ill-effects of civil wars in neighbouring countries do spill over into Uganda."

"What is happening in Congo was inevitable. Kabila failed to accommodate other anti-Mobutu groups," he continued. "He antagonised various political forces. The war in Congo is not of Uganda and Rwanda's making. We in Uganda were victims of the late Zairean leader Mobutu Sese Seku's political intrigues. An armed opposition group, the Allied Democratic Forces (ADF), came from what was then Mobutu's Zaire and attacked villages in western Uganda. In the Cairo Declaration of 1964, the founding fathers of the Organisation of African Unity agreed that the colonially-defined borders of Africa be upheld. We respect the territorial integrity of our neighbours, we have no designs on their territories. We want stability in the Congo and in Sudan."