Monday, December 12, 2016


It was reported this week that MPs had visited an abandoned ice plant in Buyende which had cost government sh2.4b and has not as much as produced an ice cube since it was “completed” in 2011.

The plan was that ice plant would benefit the fishermen of the nearby Bukungu landing site by providing ice to preserve their catch, which ice they wold have to buy – and still do now, from faraway Jinja or Kampala.

This single desolate building with an overgrown compound and now overran by vermin, encompasses all that is wrong with government projects.

"Government projects are mostly backed by good intentions but often the deliverable is not that it works for the benefit of the intended beneficiaries but that it is there. Governments tend to focus on inputs and little on outputs...

So you will here this or that official bragging about classrooms, health centers or even ice plants built rather than the out puts of the said projects, how many students graduated from the schools, patients were treated or how was the fisherman’s productivity improved respectively.

Politicians are not wired for long term thinking. They are always on the lookout for the quick fixes. 

And because they know public opinion is fickle they have worked out that better to have a pipeline of projects – even if they don’t work than have that one project that will transform lives over time.

That is why despite the best intentions and better than average brains government is a poor businessman --- around the world.

A businesses viability is determined by its profitability, which is basically that the output is greater than the input. Governments because they are plugged into an almost inexhaustible source funds are not fixated on the bottom line or even better the return on investment.

Essentially government – and not only in Uganda, is incompetent when it comes to business. And this is the charitable view.

The more cynical view is that since government is a vehicle for doling out patronage to its supporters – all over the world, there is a tacit agreement that these government projects are the reward for the loyalty of its supporters.

So if they steal a little here or there or even stall whole projects its ok as long as they remain onside.

"Governments cannot really help themselves. The NRM recognised this early and sold off all its parastatals or broke up government monopolies 20 years ago. As a result we have more efficient services in transport, telecommunications, power generation, hospitality business and in any number of businesses sectors that the government let go of...

I wish it could be different but it cannot.

That being said there are instances where government needs government can get involved in business. In projects for instance where the returns are not discernible immediately but which are critical to the economy and where the private sector wold have an interest if the risks were mitigated against.

Enter public private partnerships where government would partner with private players. The model though should be that government should exit the enterprise as soon as it is up and running, otherwise for the same reasons for it not going into business, it can collapse a perfectly viable industry.

One other reason for government to be in business is so that its officials can learn how business operate and disabuse themselves of the suspicions technocrats tend to harbour against businessmen.

This will be useful exposure that will allow them better understand what makes business tick and the need for incentives and concessions to make ensure success.

But otherwise clamouring for government to go into business is not unlike doing the same thing over and over again and hoping for a different outcome.

And just one last thing about that forlorn ice plant in Buyende. It did not work because it was not connected to the power grid!!!!!

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