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Thursday, 19 July 2012

Lessons to Learn from a tale of two African countries : Ghana took the less corrupt road to development un like Uganda


Lessons to Learn: Ghana took the less corrupt road to development

Unlike the Asian Tigers, Ghana is much more similar to Uganda, in terms of resources they have. Both were also low-income countries and have traditional kingdoms and yet, compared to Uganda, Ghana has made strides in its development and is now a lower middle income country.

Usually, it is with the likes of East and Southeast Asia that Uganda is told to look to as models of economic development.

But little mention is made of another African country – one that just like Uganda is blessed with fertile soils and reliable rainfall enough to support its crop production.

Just like Uganda, it is rich with mineral resources, boasting copper, iron ore, gold, diamonds, bauxite, manganese, wolfram, nickel or uranium.

And just like Uganda, it has recently discovered oil.

But Ghana is in another league. Earnings from minerals sector could cater for Uganda’s entire 2012/2013 Budget – according to its government, in 2011, Ghana earned USD$5 billion from the export of minerals alone.

As Uganda’s lawmakers have so far resisted opening their books on oil, Ghana (already in commercial production with its offshore rigs) has been lauded for its transparency and ease of doing business.

Experts say although by no means graft-free, Ghana’s economic development has made leaps and bounds over Uganda in large part, by taking the less corrupt path.

A tale of two economies
Through the late 1950s and early 1960s, both were low-income countries – with Ghana’s per capita income at $262 whereas Uganda’s was $119.45.

Between 1957 and 1962, both became independent and started off with a lot of promise. But now Uganda remains a low-income country (where the average annual income is $1,005 (Shs2.5 million) or less), while Ghana has propelled itself to become a lower-middle-income country (where the average incomes range from $1,005 to $3,975 (Shs9.9 million).

The World Bank estimates Uganda’s per capita income to be $490 (Shs1.2 million) while Ghana’s is $1,190 (Shs2.9 million) per year. Ghanaians have a better quality of life, and better life expectancies (60 years, compared to 54 years for Ugandans).

Due to improvements in health service delivery, infant mortality in Ghana is 51 per 1,000 live births whereas in Uganda it is 54 per 1,000.

The World Bank adds that Ghana’s economic growth rate in 2011 was 7.7 per cent whereas Uganda’s was 6.1 per cent.

A shared past
British colonial power moved in to rule the two countries in the 1880s.

Both Uganda and Ghana also have apolitical traditional kingdoms. They both underwent coup d’√©tats, once suspended their constitutions, banned political parties and had their economies stagnated as a result of those upheavals.

They also largely reversed the preceding regimes policies on, say, produce marketing boards, once devalued their currencies, were facing with ballooning public expenditure, and had to suffer low prices for their cash crops.

They also opened their economies to private capital, and therefore, to competition. Consequently their economies grew exponentially, averaging five per cent annually, a rate much higher than some of their neighbours.

The corruption index
But in Ghana those gains were much more fairly shared, while in Uganda, it has benefited but a few.

The 2011 Corruption Perceptions Index (CPI) by Transparency International (TI), a global anti-corruption civil society organisation listed Ghana at position 69 and Uganda at position 143 of the 182 countries that were sampled then.

That corruption has translated into poor service delivery. In Uganda, local governments have over the last three years been rated as the most corrupt by reports of the Inspectorate of Government (IGG’s office) which means their ability to provide services is compromised by the loss of funds that would have done the job.

Professor Augustus Nuwagaba, a social sciences professor at Makerere University who specialises in poverty issues, says Ghana has been more effective at two principal things: districts, and radios.

District creation in Uganda is typically seen as an extension of its patronage. Before last year’s elections, the number of districts was increased from 80 to the current 112.

Ghana has 170 districts, but surprisingly not many people are complaining that they are avenues of waste.
These have been used to rally local revenue and to boost economic development and, thus meeting the costs of administering them. Meanwhile, some of the new districts in Uganda do not even have enough resources for their schools and hospitals.

“Over the last 20 years, Ghana has created more districts to serve principally as service delivery points whereas in Uganda it has been for political reasons; to create jobs for some people,” says Prof. Nuwagaba.

The World Bank, however, says that there is growing disparity between the regions in Ghana, with much of the sustained progress so far attained being mainly in the southern part, where the capital city Accra is situated.

On productive air
Prof. Nuwagaba also says Ghana has used its many radio stations to rally Ghanaians to engage in economic activities such as which crops to plant for the market, how to improve productivity or which courses to pursue at university.

He adds that many Ghanaians who studied nursing are now practising in West Europe.

He says the stations are used to cultivate ethos of nationhood and a strong work ethic.

In Uganda however, radio stations are used mostly for entertainment, their station formats devoting more airtime to music than to the discussion of social development issues.

“We have used most of our radio stations for politicking,” says Prof Nuwagaba.

“We have not used them to tell Ugandans which crops to cultivate for the European and East African markets, or to tell university students which courses to study.”

Like Uganda, Ghana underwent violent change of governments after independence until the late 1970s. But once Ghana restored constitutionalism in 1992 and entrenched a two-term limit on its presidents, there was no turning back.

Uganda introduced the term limits in 1995, and expunged them when Museveni’s time in office was up a decade later. Dr Fredrick Kisekka-Ntale, a political analyst says, “Where the regime is wary of losing power because of its failure to deliver services, it will strive to deliver.”

“Once those seeking power believe they will not get it through the ballot box, they might seek it through other means, which could lead to political instability.”

Way forward
Prof. Nuwagaba says Ugandan authorities should also use the media, especially FM radio stations to encourage a positive work ethos among the people.

“What we need is all-inclusive development, where more people across the board have disposable incomes – instead of growth that benefits only a few people.”

Ghana’s political stability has attracted foreign direct investment ($2 billion to the mineral exploration and development sector alone in 2011) that Uganda is now striving for. Prof. Nuwagaba says Uganda needs to make the link between economic gains and corruption levels, and act on them. Ghana made corruption a high-risk venture by imposing tough penalties on the corrupt and Uganda needs to start doing the same.

“Uganda needs to enforce its anti-corruption laws, it should recover ill-gotten wealth those convicted of corruption to de-motivate other people from corruption,” he said.

Last month, Members of Parliament proposed the confiscation of the property of people convicted of corruption or abuse of office through The Anti-Corruption Amendment Bill, 2012.
The Bill also extends to beneficiaries of that wealth, if the ill-gotten wealth is passed on to someone else, it could also be confiscated.

According to 2005 World Bank estimates, Uganda loses about Shs500b to corruption annually.