For reasons I fail to fathom my mind has been carrying me back to 1986-87. In that era momentous events happened in the country and we were held spell dazzled by the flowery rhetoric of the former bandits and now new rulers of the republic of Uganda. The razzmatazz and conduct of their affairs could leave you in a mist of dust- things not only had to move they had to move fast. To keep us busy they gave us some Ten points which were to form the basis of our new relationship; to wit, “The Ten Point Programme”
The rhetoric, oh boy, oh boy! “This is not a mere change of guards; but a fundamental change!” We shall build an integrated, inter-related, self sustaining economy with forward and backward linkages – the agricultural sector feeding into the industrial sector with raw materials and the industrial sector feeding into the agricultural sector with implements and machinery.
Then they argued that the currency was weak and not conducive for trade and thus there was going to be a currency reform. Reform we assumed was a good thing since it would eliminate the bad manners the currency had been exhibiting. The Uganda Shilling trading to the Dollar at the time was 1 Dollar for 1400 UGX. We shall discuss this briefly later on.
The reformation of the currency came in the elimination of two zeros from the note and 30 shillings from every 100. So 1000 UGHS became 7 Shilling of the Museveni Dollar. This created a of sad men whose savings were wiped clean! To add salt to injury no such 30% reductions were effected on any loans or credits! The hope that such reformation would consequently lead to a better Uganda stayed the anger of many- peddlers of hope had a field day.
Today the Dollar is 2.5 times stronger against the Uganda Shilling than it was in 1986. Meaning that if ever there was need for reform this would have been the time. Unfortunately the trust and good will of 1986 does not exist; government is treated with mistrust and suspicion. The old English adage of, “once beaten twice shy” is in full effect.
The strong Dollar means our imports are very expensive and we as a citizenry have reduced purchasing power. It has also made our Cents extinct with benefit for a museum piece at my friend Sempebwa’s Ssemagulu museum. And it has an inflationary effect given that our petroleum imports are Dollar priced and have rip on effect across the various sectors of the economy.
Now in the above scenario what solutions exist or should we simply wring our hands in despair? The answer was given long ago by non other than President Museveni we need to spur production. If we spur production we will also be able to get Dollars through trade and increasing supply of Dollars with decreasing demands will see the Shilling strengthening. Let the people in charge do the modelling and projections; but yes it can be done.
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