OF SMALL, THE MOBILE PHONE AND THE ECONOMY

There was a celebration to be had. Everything – the cake, the drinks, the guestlist, were in place. The last call was to be to Small, a far from small lady, who operates out of Kumbuzi on Gayaza road, and delivers the most succulent roast goat, the one which easily falls easily of the bone and its juices so tasty that closing your eyes as you chew, is the natural reflex.

For the first time ever, Small could not be contacted. Her phone was off. Demand for her offerings are so high that a drive to Kumbuzi was imperative. She was there suffering a slow day because her phone was stolen only hours before.

After making the appropriate sounds an order was placed for her world beating goat ribs and some chicken. The bill? sh147,000. Sh147,000 money she would have missed on a slow Sunday.

But it also made me wonder how much money she makes when her systems, read her suppliers, grill and weather, are all on go.  But most especially her phone.

In 1999 Uganda’s GDP growth jumped to 8.1 percent from 4.9 percent the previous year.

There had been no coffee boom, the donors were a bit pissed with us for going back into the Democratic Republic of Congo (DRC) and had withheld aid, 1998 was the year of El Nino, the freak weather pattern which manifested as uncharacteristic heavy rains, so harvests were affected.

"But in the previous year South African telecom MTN entered the market and in 1999 we were the first country in Africa in which mobile phone connections exceeded land line connections. Which was not saying much, as at the time there were 50,000 land line connections ...

I like the to think MTN’s huge investment in trying to stretch their reach around the country, had some thing to do with it but more importantly it is the greater efficiencies to business that came with this new connectivity that made a major difference.

Small is anecdotal proof in the 21^st century how connectivity is helping business. In 1999 this must have been nothing short of revolutionary. Traders no longer needed to guess at the availability of supplies and prices; meetings could be called or cancelled with a phone call; you did not have to chained to your desk phone to stay in touch.

They may look like small things, but they add up when they were spread over 100,000 new phone users.

Of course, since that mobile phone has increased phone coverage is now national, about 70 percent of the population now have access, but in addition we are now also connected to the internet via our phones, and can now send, save and borrow money using our phones. Each additional capability is increasing business efficiency and opening up new business avenues.

"A few weeks ago I asked at one restaurant, part of our largest chain, how much of their business is done physically against their delivery service option. Off the top of his head the manager said 60 percent of their business is delivery. That was mind boggling because the popularity of this restaurant is such most time seating space is at a premium, which ever day you visit....

He went further to describe one time he was at Kigungu landing site in Entebbe, kilometers away from the nearest branch and was shocked to see their delivery bikes there, delivering nojitos.

The efficiency of the telecoms system cannot be overemphasized (thanks god the government company no longer enjoys a monopoly). It is so important that a breakdown can become a national issue.

I remember about a decade ago I was in Nairobi and telecom operator Safaricom’s mobile money service went down for a few hours, the uproar was such that the management of the company were called in by government to explain how this could happen.

Small’s experience last weekend reminded me how critical an efficient telecom service is to the continued growth of the economy. But also, as a tool for reducing the inequality of opportunities in the economy.

"Access to opportunity is a function of there being opportunities to begin with and good infrastructure for entrepreneurs to take advantage of those opportunities. In badly serviced economies it is an infinitely small percentage of the population who have access to opportunities. Good, efficient telecommunications can even paper over other infrastructural deficits, like bad roads.

In the twenty first century governments have to walk a tight rope between expanding access to mobile phones and throttling this with unnecessary taxes and arbitrary regulation.

As if the point needs overemphasising, one boda guy after his phone suffered the same fate as Small’s, got a new line, filled his tank and rode around to wall his clients informing them of his new number.