Tuesday, July 13, 2010


It is a week in which President Yoweri Museveni said the dance with the corrupt was over.

It was also the week in which sh900m got lost under a bed! The mind boggles. I exercised my mind with how I would invest the money – albeit that it was not mine, to show the highest return. I would be on the lookout for double digit annual returns. Real estate? Not likely. Shares? No guarantees. Private equity? Maybe but our entrepreneurs have their issues. Treasury bill and bonds? I saw the recently auctioned two-year bond offered 12.3 percent a year – I could thrive on sh110m a year.

But I want to talk about more grassroot issues.

While our politicians and urban elite dominate the headlines, the inexorable wheels of progress continue to roll regardless of their shenanigans.

WFP country manager Stanlake Samkange in an interview published this week projected that his organisation may be buying as much as $100 million worth of food from local farmers within five years. This will represent almost double what the UN agency bought locally last year.

Whereas the increased income to farmer and community is exciting the more durable benefit is that to achieve these numbers farmers are organizing themselves into larger groups to better benefit from cheaper inputs and increase their bargaining power. If WFP were to fold its tent and leave town the farmers will still be left with these valuable organizational skills and institutions.

And we are not reinventing the wheel. During the industrial revolution European artisans – cobblers, tailors and watchmakers, formed guilds or associations to take advantage of the ever increasing demand that came with increased employment. They were the forbearers of the largest companies in the world with billions of dollars in turnover.

On a recent interview on Vision Radio’s Talk of The Nation evening show, Private Sector Foundation’s Ruth Musoke was gashing about how farmers and small businessmen around the country of their own initiative, are forming associations to leverage economies of scale.

I have to admit I was a bit dubious about the PSF’s proposed Business Association & Community Development Awards 2009, which will recognise such groups. Totally out of touch with what is going on in our rural areas, my thinking was that there are not enough of them to have a credible competition.

Ms Musoke disabused me of my misconceptions regaling me with tales of hundreds of farmers, boda bodas, sand miners and any number of other workers or businessmen all over the country coming together.

As a nation we are poor because our people are poor, our people are poor because we are not aggregating our resources – our capital and skills, because we are still in love with playing around in our small little pond, with no larger ambitions.

Things are changing and huger entities are coming in, players so big even governments cannot hold them back from dominating our markets. And they will dominate our markets because the consumer only cares to get what he wants, when he wants it, at an affordable price and all the sloganeering in the world will not change that.

Also supplementary to all this I am encouraged by the work of the Uganda Commodities Exchange, which is going around facilitating market access for the farmer groups by pooling their produce.

By ensuring that the produce is of acceptable quality and stored in regulated warehouses USE is playing an important market making role that has not existed since the heyday of the cooperative societies. Understandably production is up and will continue to rise as long as these mechanisms remain intact.

It is not rocket science. And our people are not lazy. A little bit of leadership can go a long way and the proof is there for all to see.

The political environment plays a role in allowing these associations to flourish but the nature of the human spirit and evolution is that these self-help groups will emerge regardless.

I read about corruption, the insensitiveness of the public sector to business and the self aggrandizement of the political class and I often am tempted to throw my arms up in despair. But every so often stories filter through of individuals and communities coming together first to cater for their subsistence but then invariably growing into larger concerns that produce surpluses and enrich them and their communities.

There is hope for this country yet.

Published October 2009, New Vision

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