Wednesday, April 16, 2014

OF SEAFOOD AND THE FALLACY OF POVERTY ALLEVIATION



My suspicion of seafood grows the further away from the ocean it is served to me. My suspicions were allayed a week ago when I was invited to lunch at the Sheraton’s new SevenSeas restaurant, I wasn’t dragged kicking and screaming into the meal but I was determined to play safe with my order.

I am glad to say that the Tuna main course was finger licking good but went down a bit too fast for my liking. At the risk of being seen as ill-mannered, I peeked at the bill and it set my host back sh65,000 for the meal.

I am sure there is great skill involved in catching tuna, a skill passed on down the generations and yet the fisherman gets a fraction of what Sheraton is bringing in, on serving a fraction of the same fish.

The difference between the two entities is the value addition involved.

Best case scenario the fishermen who caught my Tuna has some weather beaten dhow and some less-than-minimum wage assistants who help him pull in the nets. The owners of the Sheraton however have invested in building a brand, creating an ambiance at their restaurant, hiring a great tuna chef and all the other intangible things that enhance the experience of eating that piece of Tuna.

So what does the fisherman have to do to capture more of this value?

That is the million dollar question that will lead to raised incomes and lifting more people out of poverty.

The value chain is a real thing not some abstract concept economists trot out to impress us mere mortals. That is all very nice but there seems to be little talk about the producer – farmer, fisherman or whoever.

So we will pave his roads, improve his communications, keep inflation low and keep the shilling at reasonable rate that they can get good value for their labour, but this can be all done for the farmer and no increase in welfare is experienced.

There are a combination of factors including blood sucking middle men but at risk of blaming the victim when all is said and done it’s the producers’ mind that has to be worked on.

In addition many anti-poverty initiatives don’t seem to be clear about how improved in comes reduce poverty levels. Having a higher income does not mean you are less poor, a higher income may very well impoverish you further.

US celebrity couple Joe and Theresa Giudice, whose multi-million dollar lifestyle has been the subject of a reality show, it was found last week could only manage $7,500 towards clearing their $17m debt. They lived in a $1.7m home, drove the most expensive cars and holidayed in the Hamptons but it turned out to be all smoke and mirrors.

So even for our producers raising their incomes will not guarantee the escape the poverty trap, something the planners don’t seem to appreciate, they seem happy to help raise incomes and they think their job is done.

But without a doubt improve incomes are imperative in the fight against poverty, but improved incomes are not synonymous with poverty alleviation.

In recent weeks this newspaper’s Harvest Money section has been profiling the country’s most progressive farmers in a build up to the selection of Uganda’s best farmer. They have come in all shapes and sizes but the one denominator that seems to determine their claim to fame is the size of their enterprises.

Bigger size allows not only for higher income but for leveraging economies of scale.

My thinking is that to alleviate poverty our farmers need to start thinking big and this need not trigger a scramble for land. Farmers can form groups, which buy inputs wholesale, bulk their harvests to get better prices and use their power of their numbers to invest in farm machinery, storage facilities and hire expertise.

Making the leap out of poverty would involve for example thinking of these arrangements in a business manner, so that their farms be the gift that keeps giving.

A poor man is a person who cannot meet his own needs and is reliant on others for his upkeep. A financially independent person earns and income but for lack of savings and assets is often one pay check away from regressing into poverty. A financially secure person probably has in addition to his income, businesses or assets that have are throwing off income independently of his effort. And finally the rich man is he or she for whom the overwhelming majority of shillings he racks in are from these independent sources.

Our poverty alleviation programmes often stop at – if they get there at all, making our poor get to financial independence.

Tuesday, April 15, 2014

RWANDA IS A REMINDER FOR AFRICA



Last week was set aside to commemorate twenty years since the Rwanda genocide begun.
We all know the background. 

Ethnic tensions fuelled by the Belgian colonialists and carried on as means to retain power by post-colonial governments, flared for what was not the first time but hopefully the last, leaving about 800,000 Tutsi and moderate Hutu dead in a 100-day killing orgy. The trigger for the latest Rwanda of genocide was the death of then president Juvenal Habyarimana in a plane crash outside Kigali.

We heard personal testimonies of the terror, we celebrated unsung heroes and our breath was taken away – as it is every year, when we reminded of the sheer scale of the tragedy. And even after all this time we shake our heads in wonderment at what kind of hatred of one for another could have driven tens of thousands to turn on their friends and relatives with such bloody abandon.

The commemoration of the genocide should be a continental affair.

It should serve as a reminder to us that we play on a global field where decisions about our wellbeing can be made thousands of miles away, our lives can be signed off with the stroke of a pen and that we can be at the gates of hell and those with the means to pull us back can look away with pointed indifference.

“Who will guarantee the future of Africans?” President Yoweri Museveni once asked. Israel’s existence is guaranteed by the west, he said, who will guarantee ours.

The Rwanda genocide should be cause for soul searching in all the continent’s capitals.

Jared Diamond asked the question in his book “Guns, Germs & Steel”, why are some parts of the world developed and others (Africa) not?

His conclusion that for various reasons the west was able to produce a food surplus, allowing them to pay their thinkers and fund standing armies, which could then be used to project their will around the world for their benefit.

In trying to get to the bottom of the same issue Daron Acemoglu and James Robinson in “Why Nations Fail”, discounted this conclusion and suggested that what made the difference was whether the elite in these countries run them for their own personal benefit or for the benefit of the general population. The former nation of course being weaker than the latter and vulnerable to implosion or outside interference and manipulation.

At the heart of the problem is the continent’s leadership but more broadly the elite. Our inability to appreciate that no one will look out for our interests better than ourselves and that we can only do this to the extent that we are strong and organised into credible entities can guarantee our won existence.

Because yes, this is an existential question.

One view has it that the world cannot provide for all of us if we all consumed at the level of western economies, hence the push for family planning on the continent, essentially to slow the growth in our needs because the west is unwilling to moderate their consumerism. Population growth rates in the west are in decline Africa is the problem. The fewer of us around the better.

Guaranteeing our future does not mean stocking our arsenals for an old fashioned invasion of our coastlines, but means harnessing our vast human and natural resources for our own benefit.

We will do this by having far sighted, inclusive governments working towards erasing the artificial borders that are hampering free movement of goods, capital and people.

That we find it comfortable to remain in our individually unviable nations is no mistake. The diabolical genius of the colonial project was that even after we had got independence we committed to retaining these divisions that would ensure we would continue to remain vulnerable and malleable.
If you went to any border on the continent you would be hard pressed to trace its route as there are no painted lines on the ground, barbed wire fences or concrete walls to separate one country from another.

We have enforced the artificialness of these boundaries as the experience of Rwanda shows. 

Rwanda’s neighbours did not go to its aid when the going got tough even when the bodies floated down our rivers and the refugees streamed across the borders.

We have got into the habit of laughing out of the room anyone who examines the colonial context of our current predicament, Rwanda should remind us that we do this at our own peril.

Monday, April 14, 2014

KCCA SHUTTING THE BARN DOOR AFTER THE HORSE HAS BOLTED



We woke up on Thursday to the news that the Kampala Capital City Authority (KCCA) was gearing up to move on land lords who had defaulted on their ground rents and contravened their planning permissions.

Chief among the culprits according to KCCA were the proprietors of the Forest Mall in Lugogo who have been faulted on both counts. KCCA says they will be looking into other property owners.

Last year KCCA moved on some property owners in town on the same grounds.

The developments in the area – Forest Mall and Lugogo Mall have attracted their share of controversy, being as they were originally playing grounds and green areas.

On lookers were baffled when mall came up alongside the older Lugogo Mall and it is interesting to discover that the original permissions were for a hotel, which would have maybe made more sense than the acres of empty space in the half complete Forest Mall a few years after it was opened.

Blame it on the 1970s and 1980s, years of instability where self-preservation took precedence over all else and the law was an inconvenience you did not have to follow. The chaos and unplanned expansion of our city is the logical outcome.

So because maybe we do not know better, the authorities are not keen to enforce or we just choose to ignore the law anyway we litter our city, drive like we are in the taxi park and develop our properties with little regard to the law.

That people are planting billion dollar structures where. When and how they please with no fear of censure shows how wrong things have gone bad.

And it is not just the nouveau riche who have made their billions recently and itching to make a statement. One of the encumbrances on a major 14-floor structure in Kampala, recently valued at sh50b, is that it is built on a road reserve. It probably isn’t the only one.

So our businessmen are jeopardising billions of their supposedly hard earned cash on these building of questionable integrity? It just goes to show how much impunity has been built into the system.
No one will argue against KCCA throwing the book against these offenders but one wonders about this delayed reaction.

In the case of Forest Mall KCCA can be forgiven for not knowing what alternative uses the proprietors would put their “hotel” to, but the mall has been in operation for at least two years, so what has prompted action now? Same to all the other developers who have contravened their build permissions?

I will be the first one to cheer when KCCA is bring sanity to our little town but justice has not only to be done but to be seen to be done.

KCCA has built up a lot of good will by beautifying the city, keeping it clean and try its best to return a semblance of sanity to our lives but they run the danger of being seen to be selectively executing their work for whatever reason and jeopardising the goodwill they have built over time.

Our businessmen should not act as if their money is burning a hole in their pants, building wily nilly and making us wonder about the source of their funds. KCCA on the other hand has done well to shed its image as sluggish public agency but clearly there seems to be a lot more work to do in speeding up its processes. KCCA should be more vigilante in calling offenders to order sooner rather than later.