Tuesday, January 5, 2016


Another year has come and gone – don’t they seem to be passing by faster and faster these days?

Looking over the 40-odd Shillings & Cents column that have gone out during the year I dug up a few thoughts that would serve us well in the New Year and well in to the future. Below I excerpt some of these columns and the thoughts that should serve us well in the New Year.

1.      On Wealth inequalities …
At the beginning of the year UK based NGO Oxfam led by Winnie Byanyima, put out a damning report showing how world income and wealth inequalities were growing to unsustainable levels. The report pointed out that in a few years’ time one percent of the world’s population will own more than the rest of us combined.
Oxfam suggested that we break up the powerful interest groups that maintain the status quo.
Our suggestion?
“At the end of the day, the wider the wealth disparities are in a county is how inefficient the government is in creating wealth, through the encouragement of business on the one hand and redistributing this wealth through the building of infrastructure and improvement of the quality of the human resource...

2.    On government interventions in the market ….

In January the Swiss central bank had to give up trying to hold the Franc to a certain level against the Euro. A combination of factors that included uncertainity in the Euro zone due to the real possibility of Greece exiting and events in Russia which saw inflows to buy the safe haven currency, meant the peg was impossible to sustain. The Swiss spent $200b defending it over three years once again showing the following of trying to bet against the market for anyone even the most solid economies.

We wrote,
The Swiss have suffered the very same fate they were trying to avoid. Their exports now will cost consumers up to 20% more than last week, which may not be good for sales. It’s never a good idea to bet against the market, even if you believe the market is wrong. As they say the market can remain irrational longer than you can remain liquid....

3.      On unlocking our wealth …
In April we marvelled at the progress Umeme had made in a decade.  The distribution wing of the former UEB was passed off to private investors and by one metric alone had more than doubles subscribers to the grid to 600,000 during the period, a feat which took the original owners more than 40 years.
What made the difference?,To get an optimal return or result one has to focus on three broad areas the quality of human resource, making operations increasingly efficient and having an effective strategic processes...

4.      On the rise of the Ugandan manager ….
Allen Kagina took over at the Uganda National Road Authority (UNRA) in May for which we said,
“But beyond her potential impact at UNRA and her wellworn record at URA, Kagina is a front runner in a new crop of parastatal manager that is debunking the notion that we lack effective managers among our number to run our most prized assets.”

And added,
“And finally Kagina’s recognition as a top manager but just importantly, as a woman manager, signals the acceptance of women as managers able of taking on the “tough” assignments society had decided belonged to men.”
Enough said.

5.      On fallen heroes ….
In May we lost Ivan Kyayonka long time boss at Shell and chairman of various boards. The loss of life is always tragic but Kyayonka’s loss will be particularly telling.
 "It is men like Kyayonka, sadly in short supply, who are badly needed to populate, our management suites, our public service and even lead our schools, so that we generate more of his kind to unlock the vast potential of our country. Because people are what make things happen and not the other way around...

6.      On how far we have come …
In June in a post-budget column, we reflected on how far we had comes as an economy. WE noted that in the 1986/87 budget government set out to spend $785m or about sh2.4 trillion at current prices which was a tenth of this year’s budget. We said the biggest contributor to this jump in revenues was the liberalisation of the economy and the privatisation of public companies.

However, we thought, “"But whereas we have done  a better than average job at rehabilitating our physical infrastructure, there is an urgent need now to get our soft infrastructure – laws and  institutions, to work for the benefit of the private individual and private sector.”

7.      On shopping malls …
Prompted by a typhoid outbreak in one of better known malls down town we wondered at the folly of the mushrooming new malls.
"It seems to be, that the sum total of our market research before we go into business, is to look around at what other people are doing and join the bandwagon,” going on to speculate that the money behind these malls maybe hot money looking for refuge. Only time will tell.

8.      On the legacy of the Idi Amin era ….
We were perturbed by attempts to revise history -- particularly of the eight years when Idi Amin held sway of our country, out of ignorance or out of a deep seated hatred for the current government.
“But the more you examine the period you realise that the breakdown in physical infrastructure was not the worst legacy of the era. The real tragedy was the break down in the spirit of a once proud people and the missed opportunities for development that cannot be recovered...
And we added,
"We celebrate the cronies of the state who businesses were dished to in 1971, but if you look for where they are now, you would be hard pressed to find a handful who parlayed those assets and the passing of the last 45 years into sizeable business with at least a national presence, live alone regional presence.”

9.      And finally we were at a loss to understand the justification for the white elephant that will envitably be the Kiira Motor Corporation,
"As a country we have neither the comparative advantage -- that we can make cars better than any other product, nor the competitive advantage -- that we can make cars better than other people, which is a red flag for the enterprise. Both conditions are not insurmountable but at great cost and without guarantee of success.”

There was more throughout the year but these were probably the choicest subjects.

Have a Happy New Year, people!

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