When President Yoweri Kaguta Museveni and his National Resistance Movement (NRM) took power in 1986, Uganda was a country crawling out of the wreckage of civil war, economic collapse and moral disintegration.
Inflation had spiraled above 200 per cent, GDP growth was negative, industries lay in ruins, and the very idea of the Ugandan state was teetering.
It is from these ashes that “Musevenomics” emerged, a blend of liberal orthodoxy, pragmatism and political centralism that sought to rebuild a shattered economy while retaining firm control over the state’s ideological and political levers. Museveni’s economic philosophy, as captured in his own works
What Is Africa’s Problem? and Sowing the Mustard Seed, anchored itself on two convictions: that political stability was a precondition for economic recovery, and that Africa’s tragedy lay in “unanalytical leadership” – leaders who, in his words, “did not understand the link between politics, economics and ideology.”
Musevenomics thus became more than a policy framework; it evolved into an economic creed shaped by history, power, and the president’s own intellectual militancy. The early years of Musevenomics (1986 – 1995) were defined by an unflinching alliance with the Bretton Woods institutions.
The International Monetary Fund (IMF) and the World Bank found in Museveni a disciplined reformer willing to implement structural adjustment programmes, liberalise trade, privatise state enterprises, and open Uganda’s economy to foreign capital.
Under the Economic Recovery Programme of 1987, inflation dropped from over 200 per cent to below 10 per cent within five years; GDP growth averaged 6.5 per cent, and Uganda was lauded by the IMF as the “model pupil of reform in sub-Saharan Africa.”
This was a remarkable turnaround in macroeconomic stability. Yet beneath the statistics lay contradictions that would haunt Uganda’s development path for decades. Structural adjustment, while stabilizing the macroeconomy, dismantled many of the state’s productive capacities.
The privatization of public enterprises often to politically-connected elites entrenched a form of crony capitalism masked as liberalization. Uganda’s domestic industry, which had been slowly recovering, was left vulnerable to foreign imports and speculative capital.
As David Sseppuuya notes in his book Africa’s Industrialisation and Prosperity, Uganda, like many African states, “failed to transform natural capital into productive capital,” exporting raw materials while importing finished goods, a cycle that perpetuated dependency rather than prosperity.
By the early 2000s, the second phase of Musevenomics emerged: the consolidation of neoliberal reform under a distinctly paternalistic state. Having won international acclaim as an economic reformer, Museveni began to fuse donor-driven market policies with populist rural programmes such as the Plan for Modernisation of Agriculture, the National Agricultural Advisory Services (NAADS), and later, Operation Wealth Creation.
The rhetoric was powerful: “Prosperity for All.” But the reality on the ground was uneven. NAADS, conceived to transfer technology and skills to farmers, became riddled with corruption, inefficiency and politicization.
Inputs were often distributed along partisan lines, while extension services remained underfunded. Opera- tion Wealth Creation, under military command, blurred the line between economic management and political patronage, prioritizing loyalty over performance.
Here, Musevenomics reveals its dual character: technocratic in theory, patri- monial in practice. The state remained a gatekeeper, deciding who accessed credit, land titles, or government contracts.
This model mirrored what the re-nowned political economist Peter Ekeh once described as the “two publics” in Africa, one civic, one primordial where public resources serve private and political ends.
Economic growth thus became entangled with the logic of political survival. Uganda’s GDP numbers continued to impress, but inequality widened, and poverty reduction slowed.
While the national poverty rate fell to 19.7 per cent in 2013 from 56 per cent in 1992, subsequent surveys showed a reversal, with rural poverty rising again to over 21 per cent by 2020.
Comparatively, countries like Singapore, which in 1965 had a GDP per capita similar to Uganda’s, were moving in an entirely different direction. Under Lee Kuan Yew’s visionary stewardship, Singapore invested massively in human capital, rule of law, and export-oriented industrialization.
By 1990, Singapore’s GDP per capita had exceeded $10,000, while Uganda’s remained below $300. The difference lay not in natural endowment Uganda had fertile soils, water, and mineral but in governance architecture.
Singapore built institutions insulated from political capture, while Uganda built institutions serving political consolidation. Singapore’s technocracy was merit-based; Uganda’s became clientelistic.
Adam Smith’s The Wealth of Nations reminds us that “the prosperity of a nation depends on the productivity of its people and the security of its property.” In Uganda, both have been compromised by corruption and weak rule of law.
The World Bank’s 2023 Governance Indicators ranked Uganda poorly on control of corruption and government effectiveness. Public sector inefficiency costs the economy billions annually.
Auditor General reports continue to reveal wastage and leakages that undermine development programmes. Despite ambitious slogans like “Vision 2040” and “Middle-Income Status,” Uganda’s per capita GDP in 2024 remained around $1,100, a far cry from the global median.
This is the first part of two series on President Yoweri Museveni’s economic policies on Uganda’s political trajectory.
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