Comparing Sustainable Development in East-Africa - how does Uganda perform?

Transcription

1 P a g e 1 Comparing Sustainable Development in East-Africa - how does Uganda perform? By Oliver Schmidt 2nd Oct. 2015

2 P a g e 2 Executive Summary This paper presents the country data of member-states of the East African Community (EAC), i. e. Burundi, Kenya, Rwanda, Tanzania and Uganda, of the Inclusive Growth and Development Report of the World Economic Forum (WEF). The WEF-report assembles data from over 140 indicators for 7 dimensions or pillars - education, employment, assets & entrepreneurship, financial intermediation, corruption/rents, basic services/ infrastructure, and fiscal transfers. Analysis of the EAC-data shows that Uganda compares weakly, next to Burundi but behind Tanzania. Kenya and Rwanda are the top-performers in several dimensions, not only in East-Africa but across the 18 low-income-countries in the report. The Author Oliver Schmidt (oliver.schmidt@mmu.ac.ug) is the Dean of the School of Business and Management Studies of (MMU). He holds a Ph.D in Administrative Sciences of the University of Speyer (Germany) and a Masters in Economics of the University of Muenster (Germany). Dr. Schmidt has published several papers about development economics. At MMU, he supervises bachelors' and masters' research and teaches economics and microfinance course units at under- and postgraduate level. The Series Occasional Papers of the School of Management Studies (SBMS) offers a platform to discuss current issues, developments and research in the fields of management and business, public administration and social or community development, applied economics in particular sector / market trends, and banking and microfinance. SBMS appreciates the department of banking and microfinance which initiated the occasional paper series under the title banking and microfinance markets and management SBMS welcomes papers on current and pertinent issues of thematic relevance, well argued and written in a practically oriented style that uses minimum technical apparatus. We appreciate reference to contemporary policy debate, technological developments and recent empirical material. Furthermore, we invite response notes arguments in support or challenge of issues brought in any of the occasional papers of pages lengths. The occasional papers and according response notes are published electronically through our websites. Occasional papers so far: No. 1 Schmidt O. (ed.): Proceedings of MMU s 1 st Microfinance Research Seminar, May 2012.

3 P a g e 3 No. 2: Cwinya-Ai, S.: Perspectives of Financial Institutions in East Africa, November No. 3: No. 4: No. 5: No. 6 Kanyunyuzi, M. / Schmidt, O. (eds.): Proceedings of MMU s 1 st Agric-Fin Seminar, November Niwaha, M. / Tumuramye, P.: Training small-scale entrepreneurs (SMEs) in Western Uganda - A qualitative reflection of training 300 SMEs in financial literacy and record keeping, 2nd ed., October Musinguzi, C.: Factors constraining the implementation of the Money-lender Act - Insights from a survey of public administrators and money lenders in Fort Portal, May Lutheran World Relief: Players and stakeholders in the cocoa value chain of Bundibugyo, October No. 7: Wilson, C.: Sector Skills Councils for Africa - a comparative overview, October 2015.

4 P a g e 4 Table of contents EXECUTIVE SUMMARY... 2 THE AUTHORS... 2 THE SERIES... 2 TABLE OF CONTENTS... 4 LIST OF ACRONYMS AND ABBREVIATION... 5 LIST OF BOXES INTRODUCTION THE RESEARCH PROJECT IMPLEMENTATION OF OBJECTIVE STUDY AREA IN A NUTSHELL OVERVIEW OF THE WORKING PAPER THE TRAINING TRAINING CONTENTS AND DELIVERY METHODS Initial treatment... Error! Bookmark not defined Partial training (1st follow-up survey)... Error! Bookmark not defined. 2.2 TRAINING LOGISTICS... ERROR! BOOKMARK NOT DEFINED. 3 OBSERVATIONS DURING THE TRAININGS... ERROR! BOOKMARK NOT DEFINED. 3.1 STRENGTHS... ERROR! BOOKMARK NOT DEFINED. 3.2 WEAKNESSES... ERROR! BOOKMARK NOT DEFINED. 4 CODING PROCESS OF BASELINE STUDY... ERROR! BOOKMARK NOT DEFINED. 5 CONCLUDING REMARKS REFERENCES ANNEXURE ANNEX 1 ANNEX 2 ANNEX 3 ANNEX 4 ANNEX 5 MAP SHOWING THE TWO COUNTIES IN KABAROLE DISTRICT... ERROR! BOOKMARK NOT DEFINED. TREATMENT AND CONTROL GROUPS... ERROR! BOOKMARK NOT DEFINED. CORE MESSAGES IN RUTORO CAN BE ACCESSED ON INTERNET UNDER THE LINK.... ERROR! BOOKMARK NOT DEFINED. ASSESSMENT (SUBJECTIVE) OF TRAINING PERFORMANCE, PER GROUP... ERROR! BOOKMARK NOT DEFINED. RESEARCH TEAM... ERROR! BOOKMARK NOT DEFINED.

5 P a g e 5 List of Acronyms and Abbreviation EAC GDP MMU OECD SBMS UNDP WEF East African Community Gross Domestic Product Organization of Economic Cooperation and Development United Nations Development Program World Economic Forum List of Boxes Figure 1 7 pillars of the Inclusive Growth and Development-Framework of WEF Table 1. Low-income-countries included in WEF (2015) Figure 2: EAC-member states ranking for pillar 'education' Figure 3: EAC-member states ranking for pillar 'employment' Figure 8: EAC-member states ranking for fiscal transfers Figure 9: 4 pillars (categories) of the Ibrahim-Index of African Governance

6 P a g e 6 1 Introduction 1.1 Inclusive Growth Economic development has often been equated with growth of national income, regularly measured as gross domestic product (GDP) per capita. Economic growth theory studies the factors that increase national income over time. The most important factors are entrepreneurship or innovation, and institutions that foster them. These are difficult to measure and to compare across countries (Helpman 2004). Hence, development agencies and policies often focus on a few variables that are thought to increase GDP-growth generally; for example low company taxes or reduction of custom tariffs. However, it is not always clear in which institutional context these contribute to GDP-growth (exemplarily UNDP 2003). Moreover, they may lead to growth of income of few, while the income of many stagnates or even contracts; i. e. increasing inequality. Reviewing IMF-research, Samans et al (2015:3) observe that '[t]he emerging consensus is that inequality leads both to lower and more fragile less sustainable growth.' The inclusive growth literature aims at identifying factors that lead to growth without widening inequality. It may be likened to the quest for sustainable development. Ultimately, it builds on the capability approach that was developed by Nobel laureate Amartya Sen and has been applied first by UNDP (Sen 1999). The World Economic Forum (WEF) with the construction of its framework to measure inclusive growth and development of 112 countries draws on and contributes to this literature. 1.2 The WEF-framework 'The OECD [...] starts from the premise that GDP per capita may not be sufficient to generate sustained improvements in societal welfare. Promoting across-the-board improvements in well-being calls for a broader conception of living standards than that contained in traditional measures. Beyond income and wealth, people s well-being is shaped by a range of non-income dimensions - such as their health, educational, and employment status - that are not adequately captured in a measure like GDP per capita. Likewise, well-being at the societal level cannot be gauged solely by looking at averages. Only by looking at the evolution of living standards for different segments of the population, such as the median or the poorest, can it be seen whether economic growth benefits all groups in society or just the lucky few (Samans et al 2015:5).' Based on this and other research (notably Worldbank 2008), Samans et al (2015) develop a framework of 7 dimensions or pillars; which are divided into 15 sub-pillars (figure 1). Each set of sub-pillars represents a comprehensive institutional context which will lead to inclusive conditions within its dimension, and thus this dimension will contribute not only to growth but to inclusive growth. In other

7 P a g e 7 words, inclusive growth and development are not causally linked in one direction, but are interrelated feedback loops. It is noteworthy that WEF does not collapse the scores of the 7 pillars into one index. This would have required weighting them against each other. Instead, WEF (2015) presents the 7 pillars alongside each other for 112 countries. Thus, the framework emphasises that each of the 7 pillars is relevant in its own right to achieve inclusive growth, and that they should not be pinned against each other but be watched holistically (Samans et al 2015:16). Figure 1: 7-pillars of the Inclusive Growth and Development-Framework of WEF Source: Samans et al (2015:8) 1.3 Overview of the working paper The rest of this paper organizes as follows: Section 2 gives a brief overview of the 'low-incomecountries'-group in the WEF (2015). Section 3 compares the performance of the member-states of the East African Union (EAC) along the 7 pillars of the WEF-framework. Section 4 explores the sub-pillars that drive performance differences between Uganda and the best performing EAC-countries Kenya and Rwanda. Section 5 concludes by comparing the lessons emerging from the WEF-framework with the Ibrahim-Index of African Governance which has been published for several years.

8 2 Inclusive Growth in low-income-countries P a g e 8 WEF (2015) includes 18 low-income-countries; apart of 4 Asian ones they are all from Sub-Sahara-Africa (table 1). These are countries with less than 1,320 current USD income per capita as calculated by the World Bank (Samans et al 2015:58/59). Table 1. Low-income-countries included in WEF (2015) Continent / Number of Countries Region Countries Asia (South and 4 Bangladesh, Cambodia, Central) Nepal, Tajikistan West-Africa 5 Burkina Faso, Chad, Guinea, Mali, Sierra Leone East-Africa 5 Burundi, Kenya, Rwanda, Tanzania, Uganda South Africa 4 Madagascar, Malawi, Mozambique, Zimbabwe Source: Authors presentation based on Samans et al (2015). 2.1 Change in GDP and competitiveness The most competitive countries in the group is Cambodia, followed by Bangladesh and Tajikistan. This is measured through ranking the countries for 3 indicators: The Global Competitiveness Index which is published annually by WEF, growth of labour productivity between 2003 and 2012, and growth of GDP per capita between 2005 and The most competitive African countries are Rwanda and Mozambique. Mozambique ranks among the top-20% for labour productivity growth; Rwanda among the top-20% for Global Competitiveness. Both rank among the top-40% for GDP per capita growth. For Rwanda, information on labour productivity is not available. Kenya also ranks among the top-20% for Global Competitiveness but is among the bottom-20% for labor-productivity growth and among the bottom-40% for GDP per capita growth. The latter reflects the public unrest 2007/2008, as well as the problems with terrorism since. Uganda ranks in a middle position across all 3 indicators. 2.2 Change in Equity Samans et al (2015) compare inequality as measured through Gini coefficient 1 before and after social transfers (e. g. government support for the elderly or sick) and the poverty rate. They also look at 1 The Gini coefficient is, next to the Theil index and the ratio of the top to bottom income-decile of a country, the most widely used measure of income inequality. The Gini coefficient (like the Theil index) equals 0 when income is

9 P a g e 9 median household income growth from 2001 to 2011, 2011-size of the middle class (defined by USD per day), natural capital in 2012, and government debt as % of GDP in The best performing country with all but 2 indicators in the top-20% is Nepal (the 2 other indicators are top-40%). The worst performing country is Madagascar with 4 indicators in the bottom-20% and 3 in the bottom-40%. Zimbabwe is almost equally bad with 2 of 3 available indicators in the bottom 20% and 40% (the other one in the middle quintile), with 4 indicators not being available. While the inequalityindicators are not available, Burundi performs poorly on all other indicators (3 times bottom 20%, 1 time bottom 40%) except government debt where it ranks among the top-40%. All African countries show extremely mixed performance. Uganda performs strongly (top.20%) for poverty-rate, median-household-income-growth and middle-class-size; but it performs poorly for natural capital (bottom 20%) and for inequality (bottom 40%). Rwanda performs strongly for natural capital (top 40%) and government debt (top 20%) but poorly for inequality (bottom 20%) and poverty (bottom 40%). Kenya performs worst in East Africa on government debt (bottom 20%) and equally poorly on median household income growth. On the other hand, it does well for middle-class size and poverty rate (top 20% and top 40% respectively). Only 3 low-income-countries substantially reduce income inequality through (government) social transfers: Nepal, Kenya and Zimbabwe. Madagascar and Tanzania even rank lower on inequality after social transfers compared to before; for all other countries in the group, social transfers do not impact inequality ranking. In East Africa, Tanzania performs best on past-transfer-inequality (to-20%), followed by Kenya (middle quintile), Uganda (bottom-40%) and Rwanda (bottom-20%). 3 Inclusive Growth and development in EAC-member-countries The ranking presented in this section is calculated as a percentage based on all countries of the lowincome-group that provided information for the pillar. Hence, the graphs show the difference between the EAC-member-countries and at the same time indicate how a country compares to the group of low-income-countries (e. g 100% means best of that group; 0% means worst of that group). totally equally distributed among people in a country, and 100% when income is totally unequally distributed, i. e. 1 person receives all income and all others receive nothing (Helpman 2004:88).

10 P a g e 10 School of Business and Management Studies 3.1 Education Uganda ranks third, after Kenya and Tanzania (figure 2). Figure 2: EAC-member states ranking for pillar 'education' Source: Authors presentation based on WEF (2015). 3.2 Employment Uganda ranks fourth, i. e. below the median score (figure 3). Rwanda ranks best in East Africa and competitive in the low-income-group. Figure 3: EAC-member states ranking for pillar 'employment' 100% 80% 60% 40% 20% 0% Uganda Kenya Tanzania Rwanda Burundi Source: Authors presentation based on WEF (2015). Homepage: ; and Tel (Administrative Assistant): Karugabadeo@gmail.com,

11 P a g e 11 School of Business and Management Studies 3.3 Asset-Building Uganda does particularly poorly on asset-building, not only last in East-Africa but also in the whole low- whole group, closely income-group (figure 4). By contrast, Tanzania leads both East-Africa and the followed by Rwanda. Figure 4: EAC-member states ranking for pillar 'asset-building' Source: Authors presentation based on WEF (2015). Homepage: ; and Tel (Administrative Assistant): Karugabadeo@gmail.com,

12 P a g e 12 School of Business and Management Studies 3.4 Financial Intermediation Uganda ranks highly, but (closely) behind Kenya, both are outranked by Rwandaa which leads the whole group (figure 5). Figure 5: EAC-member states ranking for pillar 'financial intermediation' Source: Authors presentation based on WEF (2015). 3.5 Corruption / Rents The entire region ranks relatively well compared to the low-income-group. Uganda ranks last in East Africa, though, closely behind Burundi (figure 6). Rwanda and Kenya lead. Figure 6: EAC-member states ranking for corruption / rents Source: Authors presentation based on WEF (2015). Homepage: ; and Tel (Administrative Assistant): Karugabadeo@gmail.com,

13 P a g e 13 School of Business and Management Studies 3.6 Basic Services Kenya and Rwanda perform well, the latter leading the whole group. Uganda ranks third in East Africa with only 47% (figure 7). Figure 7: EAC-member states ranking for basic services Source: Authors presentation based on WEF (2015). 3.7 Fiscal Transferss The pattern of basic services is repeated, but Kenya ranks closely to Rwanda, while Tanzania and Burundi rank very lowly. Ugandaa ranks third with 50% (figure 8). Figure 8: EAC-member states ranking for fiscal transfers Source: Authors presentation based on WEF (2015). Homepage: ; and Tel (Administrative Assistant): Karugabadeo@gmail.com,

14 P a g e 14 4 Why Uganda performs weaker than Kenya or Rwanda This chapter compares Uganda to the best-performing EAC-member in each pillar - i. e. Kenya or Rwanda, with the exception of asset building where Tanzania leads. The chapter discusses those indicators that drive the pillar-score. 4.1 Education Kenya scores highest in East Africa, Uganda scores much lower on access as well as quality of education. This is because Kenya performs better on gross secondary enrollment and has a much lower gender gap. Furthermore, Uganda scores low on net primary enrollment. In terms of quality, Kenya leads the whole low-income-group on most indicators. Uganda trails particularly on expenditure on education (as % of GDP) and on basic mathematical skills. Accordingly, the Economist (2015) observes that Ugandan pupils achieve better reading-skills after 4 years of schooling than the Sub-Sahara-Africa average. However, Kenyan pupils outperform Ugandan ones over the same period of schooling Moreover, Only 58% of Ugandan pupils at that age actually completed 4 years of schooling, whereas 77% of according Kenyan pupils did. 4.2 Employment Rwanda leads in East Africa because of strong employer-employee-coordination as well as a low gender gap in pay and a strong link between pay and productivity. Uganda, on the other hand, has the largest gender-gap in pay in the whole low-income group, as well as a weak link between pay and productivity. Its lowest ranking is on agricultural productivity; here the difference to Rwanda is not very large, though. While both rank relatively lowly on maternity leave, Uganda even outranks Rwanda here. 4.3 Asset Building Uganda ranks last of the whole low income group on both sub-pillars, ownership of small businesses and of homes/financial assets respectively. Ownership of small businesses Hence, it ranks mediocre or out-rightly poor on almost all indicators, with the exception of registration of new small businesses, where it is number one. But it takes on average 32 days to start a small business in Uganda, and it costs 76.7% of GNI per capita. Also, insolvency costs on average 30% of the business' real estate value.

15 P a g e 15 By contrast, in Rwanda it only takes on average 2 days to start a small business, and costs 4.3% of GNI per capita. Insolvency is even more costly than in Uganda, on average 50% of the business' real estate value. On the other hand, Rwanda leads with average time to enforce a contract of 230 days, compared to 490 days in Uganda and 515 days in Tanzania. However, Tanzania leads with costs of enforcing a contract (14.3% of debt value, compared to 44.9% for Uganda) as well as cost of an insolvency at 22% of business' real estate value. Ownership of housing and financial assets Uganda also ranks last on affordability of housing, and accordingly housing loan penetration is only 1.2% of the adult population. With private pension assets only 2.5% of GDP, Uganda also ranks last of the whole group of this indicator. Rwanda ranks number one of the whole group on protection of property rights (followed by Kenya [2], Tanzania [5] and Uganda [7]). Its housing loan penetration is more than double that of Uganda but with 2.5% of the adult population still low. In Tanzania it is 5.3%, and that is one of the reasons that it leads on asset building compared to all other EAC-members. 4.4 Financial Intermediation Uganda and Kenya follow Rwanda closely on almost all financial intermediation indicators. Uganda even has about 40% more ATMs than Rwanda (measured relative to adult population). However, Uganda performs poorly on affordability of bank accounts to businesses, where it ranks 10th while Rwanda ranks first of the whole group. Uganda (9th) ranks much lower than Rwanda (2nd), Kenya (3rd) and also Tanzania (5th) on availability to venture capital. However, domestic credit by private banks to the private sector stands at 16.07% of GDP in Uganda, whereas it is only 11% in Rwanda. Furthermore, Gross Fixed Capital Formation of the private sector is 22.41% in Uganda, but only 8.09% in Rwanda. 4.5 Corruption / Rents Rwanda leads the whole group on all indicators of business and political ethics. It also performs fairly well on most indicators of concentration of rents, except the wealth-gini coefficient. Here, it scores 72.2 (Worst = 100; Best = 0). However, Uganda does only marginally better with Uganda, by contrast, scores lowest of all EAC-members on diversion of public funds as well as irregular payments (i. e. bribes) in collection of taxes. Hence, public trust in politicians is the second lowest in East Africa (only Burundi scores weaker).

16 P a g e 16 Uganda leads in intensity of local competition, and has also one of the lowest levels of concentration of banking assets. However, it has at the same time a high level of market dominance which is substantially lower in Rwanda. 4.6 Basic services Domestic transport, electricity and digital networks Uganda, alongside Kenya and Rwanda, leads the group in terms of basic and digital infrastructure, according to the rating of respondents on a scale from 1 (extremely underdeveloped) to 7 (extensive and efficient). Uganda scores 3.51 on quality of overall infrastructure and 4.29 on quality of domestic transport network. However, only 14.6% of Uganda's population has access to electricity; compared to 19.2% of Kenyans. The strong ranking also reflects East Africa's lead in mobile phone and mobile financial services penetration (Schmidt/Rothe 2015). Hence, Kenya and Uganda are at the top of the whole group on households with access to internet (39.0 and 16.2% respectively). Uganda leads the entire group on affordability of fixed broadband and also ranks best among EAC-members for active mobile broadband subscriptions. However, Kenya and Tanzania offer more affordable mobile internet access. Health care Uganda performs poorly on quality of health care services and has a high prevalence of undernourishment. 30.1% of Ugandans are undernourished compared to 25.8% of Kenyans. Rwanda ranks best of the whole group for accessibility of health care services. Furthermore, the gender-gaps in access to health care (measured by comparing male and female life expectancy) is slightly larger than in Rwanda, Kenya and Tanzania. 4.7 Fiscal transfers Uganda scores averagely on tax code but poorly on social protection. On taxes, its weakness is that taxes on goods and services represent almost half of total tax collection (44.98%), compared to 29.95% of Rwanda. Uganda scores zero for adequacy of social transfers (which is measured by comparing before- and aftertransfer Gini coefficients). Kenya scores 8.01 which ranks it 3rd of the whole group and best EACmember-country.

17 P a g e 17 5 Inclusive growth and good governance 5.1 Overview Governance is broadly defined as a system of people and processes that keep an organization on track and through which it makes major decisions (Equity Investor s Forum). The same principles apply to a country, and are reflected in the 4 pillars with 14 sub-pillars of the Ibrahim-index of African Governance (figure 9). However they are called 'categories' and 'sub-categories' because different from the WEFframework, they are collapsed into one index-figure. The data underlying the sub-pillars of the Ibrahimindex are drawn from 93 indicators. The index has been compiled and published for 15 years now (Mo Ibrahim Foundation 2015). It is obvious that governance and inclusive growth are interrelated concepts. Both the Ibrahim-index and the WEF-framework consider education. Both consider accountability of public officials and measures to curb corruption. Where they overlap, they sometimes draw on the same data-sources. Figure 9: 4 pillars (categories) of the Ibrahim-Index of African Governance Source: Mo Ibrahim Foundation (2015:3). Hence, 3 of the Ibrahim-index-pillars - safety/ rule of law, sustainable economic opportunity, and human development - compare closely to the 7 pillars of the WEF-framework. In addition to the WEFframework, the Ibrahim-index covers 'participation and human rights'. Only for the sub-pillar 'gender' is

18 P a g e 18 captured in some of the WEF-indicators squatted across various pillars. The Ibrahim-idex records deterioration of all three sub-pillars of 'participation and human rights'. Hence, the difference between WEF-framework and Ibrahim-index is that the former focuses on socioeconomic aspects of a country; while the latter focuses on the political-administrative system. 5.2 Education, employment, basic services The Ibrahim-index-pillar of 'human development' compares closest to these three pillars of the WEFframework. The Ibrahim-index ranks Uganda closely to Kenya, behind Rwanda which is by far the best performing EAC-member-country. The Ibrahim-index relies more on quantitative (input) indicators of education than the WEF-framework which looks for quality indicators. As the WEF-framework 'flagged' undernourishment, the Ibrahim-index records increasing undernourishment of Ugandans between 2011 and Parallel, the Ibrahim-index shows that social exclusion has increased strongly in Uganda, offsetting improvements of social protection and equity of public resource use. Whereas the WEF-framework records health infrastructure as a weakness of Uganda, the Ibrahim-index shows a positive trend between 2011 and This is mainly driven by expansion of Anti-Retroviral Treatment (ART, against HIV/AIDS) and by nation-wide public health campaigns. 5.3 Asset building, Financial intermediation & fiscal transfers These three pillars of the WEF-framework related closely to the Ibrahim-index-pillar 'sustainable economic opportunity. Between 2011 and 2014, the Ibrahim-index indicators show that Uganda has let its terms of trade deteriorate (i. e. foreign debt as percentage of exports has increased), because government spending has been outrunning collection of taxes. Parallel, customs procedures have become more bureaucratic and hence costly to enterprises. The Ibrahim-index also observes that agricultural research and extension has massively deteriorated, yet the majority of Ugandans live off agriculture. Whereas the WEF-framework ranks Uganda favorably for financial intermediation, the Ibrahim-index records that the soundness of banks deteriorated between 2011 and Curiously, this indicator is drawn from the WEF itself. Altogether, the Ibrahim-index ranks Uganda's sustainable economic opportunities close to Tanzania, and far behind the first-placed Rwanda. Hence, Tanzania performs relatively stronger on the Ibrahim-index than in the WEF-framework, while Uganda performs weaker on the Ibrahim-index.

19 P a g e Corruption / Rents The Ibrahim-Index sheds further light on Uganda's poor performance in this area. Between 2011 and 2014, It records a deterioration of the indicators 'accountability, transparency and corruption in the public sector' and 'online (public) services'; although it improved its commitment to 'access to (public) information'. Hence, Uganda scores second-last last among the EAC-members on the Ibrahim-index-pillar 'safety and rule of law', while it scores last on the WEF-pillar 'corruption / rents. This might reflect the recent public upsets in Burundi, which occurred after the WEF-framework-data was collected. Concluding remarks The members of the East-African Community compare favorably to the wider East African region (in which the Ibrahim-index includes Comoros, Djibouti, Eritrea, Ethiopia, Seychelles, Somalia, Sudan and South Sudan) as well as to a group of African and Asian countries with comparable income. However, Uganda performs weaker than Kenya and Uganda in most dimensions, both in the perspective of inclusive growth and in the perspective of good governance. Uganda performs at a comparable level to Tanzania. Whereas the latter seems to be improving, Uganda seems to be stagnating. For example in the field of health, its strengths stem from innovative and decisive HIV/AIDS-policies that are rooted in the 1990s. On the other hand, the political-administrative systems seems to have run out of steam for reform and improvement. E. g. in the 1990s, Uganda was considered a model in promoting gender equality, but today it performs poorly on the same. Whereas this stagnating trend does only indirectly show up in the WEF-framework, the Ibrahim-index records it most markedly in its pillar 'participation and human rights'. Of course the WEF-framework has so far been compiled once only, hence 'trend' rather refers to the interaction between the different pillars than to changes over time. Uganda has quantitative strengths in education and both quantitative and qualitative strength in digital infrastructure as well as financial intermediation - though the Ibrahim-index observes reducing soundness of Ugandan banks which signals a risk. Uganda needs to focus on improving its public management, e. g. through - improving rule of law and hence reducing costs of enforcing contracts as well as of starting a business, - controlling abuse of public funds, among others through strengthening rural public service delivery including agricultural research and extension, - strengthening focus on national development priorities, such as rural development, quality for education, as well as reviving policy-drive for gender-equality.

20 P a g e 20 Both the WEF-framework and the Ibrahim-index are useful, comprehensive and impartial yardsticks for concrete policies in these areas. As the comparison with Kenya, Rwanda and Tanzania shows, such policies are viable and very possible in East Africa. 6 References Economist (2015): Learning Unleashed, in: The Economist, 1st August Equity Investors Forum (2005): The Practice of Corporate Governance in Shareholder Owned Microfinance Institutions, Consensus Statement of the Council of Microfinance Equity Funds, n. l. Helpman, E. (2004): The Mystery of Economic Growth, Cambridge (MA)/ London (UK). Mo Ibrahim Foundation (2015): 2015 Ibrahim Index of African Governance - Country Insights: Uganda, under: date accessed 10th Oct Samans, R. / Banke, J. / Corrigan, G. / Drzenie, M. (2015): The Inclusive Growth and Development Report 2015, World Economic Forum, Geneva. Sen, A. (1999): Development as Freedom, Oxford. World Bank (2008): The Growth Report: Strategies for Sustained Growth and Inclusive Development, Washington D. C. World Economic Forum (WEF) (2015): Inclusive Growth and Development Country Profiles, under: date accessed 16th Oct