By Atwemereireho Alex (alexatweme@gmail.com)
Uganda is awash with money, yet starved of production. This is not a rhetorical flourish; it is a measurable, lived contradiction. Walk through Kampala, Hoima, Gulu, or Mbarara and one encounters expensive vehicles, gated mansions, luxury consumption, and cash-intensive politics. Yet beneath this visible affluence lies a disturbing economic truth: a significant proportion of those who command money particularly politicians and individuals connected to the state control no meaningful means of production. They own neither factories nor productive farms, neither industrial technology nor scalable enterprises. What they control instead is access: access to public office, state contracts, regulatory discretion, and politically mediated rents. This is the great illusion of Uganda’s political economy, wealth without production, power without creation.
Adam Smith, often misappropriated as an apostle of money worship, was unequivocal on this matter. In The Wealth of Nations (1776), Smith argued that the real wealth of a country lies not in gold or money, but in “the annual produce of the land and labour of the society.” Money, he warned, is merely a medium of exchange; it does not constitute wealth in itself. Uganda has inverted Smith’s logic. We have elevated money especially politically acquired money into a symbol of success while neglecting the productive foundations that give money meaning.
The data is unforgiving. Manufacturing contributes less than 10% of Uganda’s GDP and employs under 8% of the labour force, despite over 70% of Ugandans being of working age. Agriculture employs more than 60% of the population yet remains largely subsistence-based, with minimal mechanisation and value addition. Uganda exports raw coffee but imports instant coffee; exports unprocessed maize but imports animal feeds; exports crude agricultural potential but imports fertilisers, steel products, pharmaceuticals, and even basic industrial inputs. In 2023 alone, Uganda’s import bill exceeded USD 10 billion, much of it composed of goods that could, under a serious industrial policy, be produced domestically.
Against this backdrop, the political class stands exposed. Asset declarations routinely list billions in cash, land holdings acquired through speculation, and urban real estate that produces little beyond rent. Very few list factories, research-driven enterprises, agro-processing plants, or export-oriented industries. This is not incidental. It reflects a political economy where the state itself has become the primary means of accumulation.
Karl Marx diagnosed this pathology with chilling clarity. In Capital, Volume I (1867), Marx distinguished between money as capital (M–C–M′), where money is invested in production to generate surplus value, and money as mere circulation, which creates no new value. He warned that when accumulation is divorced from production, it becomes speculative, parasitic, and crisis-prone. Uganda’s elite accumulation fits Marx’s warning almost perfectly: wealth generated not through production, but through circulation within state-mediated networks contracts, commissions, land conversions, oil-related intermediations, and import monopolies.
Political economists such as Mushtaq Khan, in his seminal paper Rent-Seeking as Process (2000), explain that in many developing countries, elites accumulate wealth through “political rents” rather than productive efficiency. Uganda exemplifies this model. Public procurement worth trillions of shillings annually has become a parallel economy. Infrastructure contracts, defence procurement, energy projects, and consultancy deals recycle public money into private hands without building corresponding productive capacity. Once the contract ends, the wealth evaporates, leaving no factory, no technology transfer, no enduring employment.
Frantz Fanon foresaw this tragedy in The Wretched of the Earth (1961). He warned that postcolonial states risk producing a “national bourgeoisie” that is not entrepreneurial but intermediatory, living off commissions, state power, and foreign capital rather than building industries. Uganda’s politically connected elite fits Fanon’s description with uncanny precision: a class that consumes like a bourgeoisie but produces nothing like one.
Even Max Weber, no friend of Marxism, reinforces this critique. In The Protestant Ethic and the Spirit of Capitalism (1905), Weber argued that sustainable capitalism requires rational institutions, disciplined reinvestment, and ethical restraint. Uganda’s system rewards the opposite. The fastest returns are found not in production which is risky, energy-intensive, and infrastructure-dependent but in politics, where discretion replaces competition and influence replaces innovation. Money therefore behaves rationally within an irrational system: it avoids factories and runs toward power.
The consequences are structural and human. Youth unemployment remains stubbornly high not because young people are lazy or unskilled, but because an economy without production cannot absorb labour. Entrepreneurship is celebrated rhetorically while suffocated practically. Access to credit is tied to land, not ideas. Electricity costs remain among the highest in the region for industrial users. Policy inconsistency and regulatory unpredictability punish long-term investment. In such conditions, even well-intentioned capital avoids production.
To be clear, this is not a moral indictment of wealth or politics. It is an institutional critique. Uganda has created a system where political proximity is more profitable than productivity. As Douglass North argued in Institutions, Institutional Change and Economic Performance (1990), societies with extractive institutions may experience growth spurts, but they do not achieve development. Uganda’s growth figures, often celebrated, mask a hollow core: growth without transformation, money without machinery, elites without industry.
The way forward demands intellectual honesty and political courage. Uganda must deliberately realign incentives from rent-seeking to production. Industrial policy must cease to be ceremonial and become enforceable. Public procurement should be structured to build domestic productive capacity, not merely enrich intermediaries. Credit systems must reward manufacturing, agro-processing, and technology, not land speculation. Asset declarations by public officials should distinguish between consumptive wealth and productive ownership. Leadership must be measured not by lifestyle but by contribution to national productive capacity.
Above all, Uganda must rediscover a fundamental economic truth articulated by Adam Smith, sharpened by Marx, and confirmed by history: money is not wealth unless it produces; power is not development unless it builds. A political elite that controls money but not production controls neither the future nor the destiny of the nation.
Uganda stands at a decisive moment. The illusion of wealth is seductive, but it is unsustainable. Until production replaces access as the primary source of accumulation, the country will remain rich in cash, poor in substance, and powerful only within its own fragile bubble. This is not an attack. It is a reckoning, scholarly, factual, and unavoidable. The writer is a lawyer, a researcher and governance analyst. (For comments on this story, get back to us on 0705579994 [WhatsApp line], 0779411734 & 041 4674611 or email us at mulengeranews@gmail.com).
