UGANDA'S HARD RESET: THE POLITICS WE WANTED, BUT MAY NOT LIKE

Recent events in Uganda should give every Ugandan pause for thought.

Veteran opposition leader Dr. Kizza Besigye has now spent more than a year in custody on treason charges. The government has indefinitely suspended more than a dozen NGOs accused of pursuing a regime-change agenda. Senior politicians including Erias Lukwago, Muwanga Kivumbi and Miria Matembe have been arrested and later arraigned on charges ranging from computer misuse to misprision of treason. Meanwhile, opposition leader Robert Kyagulanyi, popularly known as Bobi Wine, remains in self-imposed exile.

Taken individually, each case has its own legal and political context. Taken together, however, they suggest Uganda is entering a different political era.

Many analysts see these developments as part of General Muhoozi Kainerugaba's efforts to consolidate authority ahead of an eventual succession from President Yoweri Museveni. Whether or not that proves correct, the direction of travel is becoming difficult to ignore. Uganda appears to be moving away from the relatively laissez-faire politics that has characterised much of the last three decades towards a far more disciplined—and less permissive—political order.

Museveni's Contradiction

Ironically, that shift may be the inevitable consequence of President Museveni's greatest political achievement.

For nearly four decades, Museveni has successfully managed a chaotic political elite. Rather than eliminate competing centres of power, he balanced them. Patronage, accommodation and political flexibility became instruments of survival.

It worked.

Uganda has enjoyed political continuity unmatched in its post-independence history. The economy has expanded several-fold. Exports have grown from less than US$1 billion in the mid-1990s to over US$13 billion today. Electricity generation, roads, telecommunications and financial inclusion have all improved dramatically.

But flexibility came at a cost.

A system held together by personalities rather than institutions inevitably breeds patronage. Patronage breeds impunity. Impunity breeds corruption.

Many of Uganda's frustrations—from delayed infrastructure and procurement scandals to ballooning domestic arrears—reflect a political order where maintaining coalitions often mattered more than enforcing discipline.

Museveni mastered managing disorder. His successor may conclude that governing Uganda now requires creating order.

The Political Elite's Biggest Mistake

It would be a mistake to see the current moment simply as an assault on the opposition.

The bigger story is that Uganda's entire political elite has reached the limits of its usefulness.

Across both government and opposition, politics has increasingly become personality-driven rather than programme-driven. Politicians have become experts at attracting headlines but remarkably poor at building durable institutions capable of mobilising citizens around coherent agendas.

The opposition, in particular, has fallen victim to a dangerous illusion.

It has mistaken popularity for power.

Large crowds, social media engagement and favourable public sentiment create the impression of overwhelming support. But political power is built much like wealth—it compounds slowly through years of disciplined investment.

Successful political movements recruit village by village. They organise polling agents. They raise money continuously. They train leaders, build local structures and remain active between elections. Above all, they require enormous sacrifice—of time, comfort, careers and resources.

Too much of Uganda's political class has assumed that public frustration would somehow translate into political change without making those long-term investments.

The consequence has been predictable.

Instead of building organisations capable of compelling government to respond to national priorities—or ultimately convincing it to step aside—they have relied on momentum, emotion and hope. Hope is not a political strategy any more than wishing is an investment strategy.

Meanwhile, those within the ruling establishment have devoted increasing energy to succession politics and patronage instead of confronting Uganda's structural challenges.

The conversation should be about improving schools, raising agricultural productivity, eliminating domestic arrears, industrialising exports and preparing Uganda for a post-oil economy. Instead, politics has become consumed by personalities, arrests and intrigue.

A fragmented political elite that cannot marshal disciplined constituencies around ideas is far easier to control than one rooted in strong institutions.

We Want Rwanda's Results Without Rwanda's Discipline

Ugandans frequently admire Rwanda's clean cities, efficient public institutions and ability to implement policy.

What we rarely acknowledge is that discipline did not emerge accidentally.

Whether one agrees with Rwanda's methods or not, its achievements rest upon an uncompromising insistence that rules matter.

Yet many Ugandans want the outcomes without paying the price.

We condemn corruption but resist enforcement. We demand efficient institutions while opposing tighter regulation. We admire Singapore and Rwanda but forget that order always requires discipline.

There are no free lunches in economics.

There are none in governance either.

The Foreign Guardrails Are Fading

There is another reason this moment feels different.

For years Uganda's political freedoms existed partly because foreign donors possessed considerable leverage. Aid dependence gave Western governments influence whenever governance concerns arose.

That leverage is weakening.

Domestic revenues have grown substantially. Oil revenues are approaching. Alternative geopolitical partners have reduced Kampala's dependence on traditional donors.

The uncomfortable truth is that some of the freedoms we assumed were permanently guaranteed rested less on strong domestic institutions than on external pressure. As those pressures diminish, governments inevitably become more willing to define political boundaries on their own terms.

The Hard Reset

Uganda is approaching a hard reset.

Many citizens have long demanded a more effective state—one that implements projects on time, punishes corruption and delivers better services. Achieving those goals will almost certainly require a more disciplined political system than the one Museveni spent four decades managing.

The risk is that discipline imposed from above can easily become coercion if it is not restrained by strong institutions and the rule of law.

The opportunity is that Uganda finally addresses the disorder that has allowed corruption, inefficiency and weak accountability to flourish.

Whether this transition ultimately strengthens or weakens the country will depend not simply on who holds power, but on whether order is used to build institutions instead of merely consolidating authority.

One thing, however, seems increasingly clear.

The Uganda of the next decade is unlikely to resemble the Uganda of the last four.

A hard reset is coming.

Many of us have spent years demanding a more disciplined state. We may soon discover that history has answered that demand.

The only question is whether we will like the answer.

 

UGANDANS ARE POOR BECAUSE THEIR LAND IS UNTITLED

Last month a report came out that Rwanda had reached the milestone of titling 12 million plots of land. This accounts for nearly all land in Rwanda.

The interesting subtext to this was that there are more women title owners than men, which will have far reaching ramifications for the distribution of wealth and the way the country will develop. This process of land regularization has been on for the last two decades.

In Uganda it is estimated that between 20 and 30 percent of land is titled.

This is very important for anybody interested in our country’s development.

All wealth is derived from land. Even the tech companies have to locate their administrations and servers in offices or residences or wherever. It therefore follows that to the extent that your land is formally recoginised is the extent of your wealth...

If we are to start from first principles, if our land is formally recognized, that is titled, a land market can be formed around it, unlocking its wealth either by outright sell, lease or mortgage.

So for example you want to invest a billion shillings in an enterprise and need land for the endeavour and there are two land owners, one with titled land and the other whose land is untitled, who would you deal with? The text book answer would be the titled land guy, because you know what you are getting and can establish some indicative price for it, which you will then register on your balance sheet.

Of course the street smart answer would be to deal with the untitled landowner, bargain him down to a meagre sum and organize the titling of the land. The point is that this land owner would not realise the market value of his asset and would be the poorer for it.

Extrapolating this example, the Ugandan land owner is more likely to be shortchanged than his Rwandan counterpart by investors, if the disparity in titled land is anything to go by. It is in the nation’s interest to have all its land titled as a means to fight poverty and also to ensure we get credible investors not fly by night cowboys.

Is it no wonder that whereas we pride ourselves with being an agricultural economy, poverty is most resident among our agricultural communities? Is it any wonder that the greater Kampala region which has the most titles in the country per capita accounts for more than 70 percent of GDP?

Taking the argument further, who are the major beneficiaries on the agriculture value chain? The farmer on his untitled land or the factory or ware house owner who has his enterprise on titled land? Which allows him to mortgage it for working capital or further development from credible financial institutions, while the farmer can only deal with money lenders or smaller institutions that cannot take him to the next level of development.

While it is true that there are also poor people who own titled land, they are poor probably for lack of financial literacy or are risk averse.

Economist Hernando De Soto in his seminal book the “The Mystery of capital” made this point and attempted to regularize land ownership for the poorest in his native Peru with some success. The interest groups that had galvanized around the informal land situation did not take too kindly to his meddling and hampered progress. Is that the case in Uganda?

That being as it may, if all Ugandan land was titled it could be taxed to raise more revenues to finance security, health, education and infrastructure development, improving the people’s capacity to lift themselves out of poverty, creating jobs and bettering access to market and the general  business environment in the process...

People argue that the poor in the rural areas cannot afford taxes, which is not true. There used to be graduated tax levied on all adults and people paid. And because they knew they had to they were more productive. Now our rural trading centers are good for producing ludo experts.

To pay their tax dues, people will either worker harder on their lands – stopping to work when the sun is high in the sky is so 20^th century; lease or sell the land to others who can make better use of it and pay the tax. It serves no one any good to have square miles of land to roam scrawny cows that are not good for milk or beef.

The news that finance ministry was threatening to halve parliament’s budget, while it will not happen, the savings from such an audacious move could be spent on titling all our land as a first step to lifting us into the 21^st century.

THE IDEA WAS GOOD BUT FOR THE EXECUTION

This week the government was finalising paying out the Covid-relief monies to the 500,000 eligible households.

First off this was a better intervention than the posho and beans that were dished out last year, which benefitted a few connected people more than the intended beneficiaries.

I was shocked to learn recently that

of the sh59b that was earmarked for the distribution of that posho and beans, easily half of it went into logistics...

On this front alone, that the sh53b will get to the intended beneficiaries, this has been a succcessful intervention. Going by this logic more people have benefitted frrom the sh100,000 than those that benefitted from last year’s food handout.

Of course there was also the argument that, what if I don’t need or want or like posho and beans? Your relief is more a poke in the eye than help to me. With money I can decide to buy charcoal instead or pay for medicine or send it to a more needy relative, that is more meaningful relief than the photo opportunity of distributing food.

But now that the intervention is coming to a close, it’s a good time to look back and assess whether it met its intended goals and how can we do it better in future.

First off notice that we are completing the process at the end of the 42-day lockdown. Talking about shutting the barn door after the horse has bolted. This is a major failure and that is where the assessment has to start. I would like to give the government the benefit of doubt, but previously we know that delays heighten crises, allow for ignoring established procedures leaving room for grubby fingered opfficials to make a killing.

We urgently need to invest in data gathering and management. A lot of time was spent trying to find out the intended beneficiary because we were using 20th century, manual processes like asking village chairmen who their vulnerable are. Also the delays came as result of verifying the intended beneficiaries, a discrepancy between their names, phone numbers and ID numbers  led to rejection. No suprises that the most discrepancies were in the Kampala area. This data should be at the end of a button click, gathered and updated in real time. It would have meant that by the end of the first week of the lockdown we would have sent the money.

Also with this we would have a real assessment of who the vulnerable are. While we were constrained by finances, the 500,000 families were not arrived at scientifically – be suspicious of round numbers when dealing with human situations. Also sh100,000 handout was not arrived at scientifically, it just sounds like a nice number to dish out, how do we know the real need was not sh78,000 or sh111,000 per family.

There have been suggestions that to speed it up even more a voucher system should have been employed. Under this scheme beneficiaries would have vouchers acceptable by everybody to buy what they want. But knowing our government’s reputation as a bad dedbtor, this would only stress local economies more. So forgoing speed for efficiency is a good idea. Also it means that even informal businesses, like your neighbourhood rolex seller will be a beneficiary.

In the long term with better data collection and management government can extend this to other relief interventions. In other places such interventions are targetted at single mothers or out of work people or invalids and are ongoing. The telephone system has shown to be a cost effective way of distributing this, we just need to smoothen the means of identifiying beneficiaries.

Related to that the importance of the ID has been shown. People were reluctant to get IDs for all sort of funny reasons, never mind the usual suspects who hold all government programs in suspicion. But even more mindboggling is the number of IDs,  thousands of them that lie unclaimed. Sometimes in this country you don’t know whether to cry or laugh.

We criticise government for poor service delivery but refuse to show up for even the poor services...

These shortcomings not withstanding government took the right route in dishing out cash, but there is a lot of room for improvement in getting out such relief in a timely and appropriate manner.

 

NRM CEMENTING THE WOMEN VOTE

By the time of writing this parliament was in its final day of approving President Yoweri Museveni’s 80- person cabinet.

This cabinet will prove a landmark in coming years especially because we have women filling in the positions of vice president and prime minster, Jessica Alupo and Robinah Nabbanja but also because women booked  four in ten of the ministerial positions, a first in Uganda’s history.

This is a high point in women’s politics, which while we had women ministers in previous governments, the flood gates of women ministers were flung open in the last 35 years.

The critics of the NRM would not like to hear that, and for good reason.

Historically, not only in Uganda, patrilineal society has shut women out of politics. That is why in the 21st century the US is celebrating their first female vice president.

The nature of the NRM’s bush war however made it impossible to ignore the women’s contribution and hence rig politics to ensure they got a place at the table.

When you are in guerilla struggle it is literally all hands on deck, every body counts, you do not have the luxury of recruiting only men in your ranks. Women finding themselves in the rebel ranks would have been dead weight weren’t they able to make themselves useful.

Secondly,

in order to swell its ranks when it came out of the bush, the NRM sought to incorporate groups previously marginalised...

In 1989 the NRM introduced the women’s female district representative position which added a 39 new seats to the National Resistance Council (NRC), the parliament of the time.

While some people criticised this as tokenism, the  women saw it as a foot in a door and have guarded it jealously ever since.

Other initiatives like the affirmative action for women joining university, has ensured that there is a continuous pipeline of women into politics.

As a result, a female politician does not draw double takes from a population who now see women as real contenders in politics.

And why the critics of the NRM do not like this, the ruling NRM has all the cards in its pocket. It can do some political grandstanding by appointing women to cabinet, has the most district women MPs and can appoint women to any number of high offices in government, the opposition does not have as much leeway. 

"The double benefit to the NRM too, is that most women appointed have performed well, even when more has been expected of them than their male colleagues... .

So its very easy for the NRM to portray itself as the champion of the women vote.

Against the background of the NRM’s dismal performance in the Buganda region in the last election, you can see how the importance of women constituency almost overnight.

The political calculation is that by elevating women to positions of authority, women around the country may see the NRM as the only party that can speak to their issues, if not fully but better than the others.

And its not that NRM has been a good benefactor, in private many women think they are just being used, but its that the ruling party has given them a real chance of effecting change. While the sexists may see it as window dressing, they underestimate the power of example and the possibilities opened up to the millions of young girls around the country in seeing women in power.

Beyond the opposition being unable to make such high profile appointments,

"this political sleight of hand speaks to two political acts we are holding our breaths for – the 2026 presidential elections and the Museveni succession issue....

For the second, the constitution is clear that in the event the president can not carry on, the vice president can takes his place. This may take added importance because no one thought Edward Sekandi had a chance of ascending to the helm of Ugandan politics. Whether Alupo has a chance or not, is less about her and more about the women’s lobby who would be easier to mobilise nationwide than any other constituency tribal or religious. The example of Tanzania’s female Samia Suluhuh Hassan is useful, but not as powerful as the thinking, now ingrained in Uganda that women can get the job done.

As for the 2026 presidential elections, what this cabinet list may very well show in coming years is that the NRM and Museveni in particular may have caught a second wind. 

Assuming the now powerful women execute their duties to the letter, not only will the NRM benefit from a job well done and hence ride on the success of these women but there will always be a feeling that the NRM will al ways do right by them.

Of course the NRM need be aware that when you give them an inch they will take a mile.

"The women of Uganda will not settle for a reversion to the old ways they will always expect to be represented meaningfully at the high table of this country’s politics, as is their right as the more populous of the genders...

Barring any disasters this cabinet may have sealed the 2026 presidential election.

TO BELIEVE OR NOT BELIEVE THE BUDGET

In last week’s budget we heard that the economy grew by 3.3 percent in this financial year compared to last year when the economy grew by 3.0 percent.

This is pitiful given that, prior to the covid-19 pandemic it was projected that this year the economy would grow by more than 6.0 percent.

During the Absa Bank Uganda post budget forum held on Friday it was interesting to hear various experts note that while the economy had been badly hit it was still showing growth, which has a lot to do with the way our economy is structured.

"It helps of course that we can feed ourselves as a nation. Despite the restrictions on movement and congregation the agriculture sector kept us afloat in this important aspect...

But beyond feeding us our farms also produce our biggest tradables among ourselves and in the region.

Commissioner General John Musinguzi who was a panelist at the Absa Bank forum, which was themed “Implications of the budget proposals on trade and manufacturing” said the two sectors accounted for just over half of the revenue collections.

While both sectors took a hit in the last year they still dominate the revenue collections, which suggests that it was wise for government not to restict the movement of cargo, never mind that truck drivers caused us a lot of grief in hte first pandemic wave.

While Absa mananging director Mumba Kalifungwa along with others were glad to hear governmnet maintained its commitment on the infrastructure development, Damalie Ssali, coutry director at Trademark East Africa however, pointed out that we also need to improve the roads within the country.

She reported that

Uganda loses $1.5m (Sh5.2b) daily from cars idling in Kampala traffic...

They are all connected – agriculture, higher trade volumes and manufacturing revenues and the traffic jams of Kampala.

The losses due to traffic are not just numbers, somebody has to pay for them. Beyond the increase in hypertension among drivers,  its the poorest who bear the burden of these losses in terms of poor service delivery. Because that is money that is disposable income that would have gone into buying goods and services, increasing demand for our products, keeping people in jobs or creating more altogether.

I suspect even the $1.5m daily loss is understated.

The finance ministry’s director of budget Ken Mugambe in speaking about the parish development model said at least sh5trillion has been earmarked for the programs, flowing down to the 10,000-plus parishes. While there are seven pillars of the model, government will focus on three – financial inclusion, beefing up the parish administration structures and data collection.

On one hand people see this as an attempt o byass the middlemen and get resources nearer the household, the critics however, point to the inadequate administration structures as the loophole, which will not only frustrate the program’s inception but also provide an avenue to enrich a few bureaucrats who take advantage of the confusion.

Other critics wonder whether the same work can not be executed through existing government structures and that the parish development model may be a duplication of functions.

"The intention is good, it may be failed by the implementation...

In the parish development model among other things they have provided for extension services, irrigation and bulking of products, which are useful if we are to bring agroindustrialisation into reality.

The truth is

while we can feed ourselves as a country, we do not produce enough surpluses to sustain a robust agro-industrial complex....

Production in the agricultural sector has to make quantum leaps before agorindustrialisation and its benefits of improved farmgate prices, higher export receipts and job creation can be a reality.

Increased agricultural production can increase jobs by more than the million jobs government looks to create by building industrial parks and free trade zones.

Increased production requires a market to absorb it. The East African Community now account for about a quarter of all our trade and the promise of the Africa Continental Free Trade Area look set to snap our increased production. But Uganda Manafacturer’s Association (UMA)  executive director Daniel Birungi, worried that if we do not have robust trade dispute resolution mechanisms as we have seen wth our dealings with Rwanda, where our common border has b een closed for two years, what hope is there for trading efficiently with countries far afield on the continent?

"So while we are feeling the pain of the covid pandemic in our pockets, continued macro economic stability, the improved business environment due to infrastructural improvements and the promise of increased agricultural productivity give us hope for the future....

Time will tell.

THE CASE FOR SOCIAL SECURITY IN UGANDA

Last week Scotland became the first country in the world to make sanitary products free, including sanitary pads and tampons,   which they said was to help eliminate period poverty.

They recognized that one in ten Scottish women struggle to afford sanitary products on a monthly basis and half of the girls surveyed missed school on account of the monthly event.

In Uganda school drop out among girls were higher than those among boys, lack of adequate facilities to deal with their periods being a major contributor.

This speaks to the larger issue of social protection. The recognition that while we should all receive according to our needs, some classes can not meet their basic requirements of life. This maybe due to their low incomes or disability.

In the same week our finance ministry reported that people living in absolute poverty in Uganda had increased to 28 percent during the COVID -19 lockdown compared to 16 percent prior.

"With the effects of the COVID-19 pandemic not expected to let up for at least another year, it is unlikely that most of those who have fallen into abject poverty will be able to dig themselves out in a year....

As it is now our social security safety nets are too thin and those who are covered are largely already in gainful employment.

Hence the case for cash grants to the most vulnerable members of our society.

A few weeks ago government put a halt to an NGO sponsored scheme to provide monthly cash grants to poor they had identified and who they could afford to support.

Government is within its rights to be wary of any foreign sponsorship of such schemes, as long as it is not in control of the process. But it then has the obligation to provide an alternative solution.

The world over there has been huge controversy about welfare payments, except in countries where they work, in Scandinavia  especially.

The critics argue that it only serves to increase government spending and increase dependency of the recipients. The supporters have shown through the data that actually the handouts are less likely than thought to create dependency, they in fact are used to uplift their living standards by paying for school and health fees and even acquiring assets. 

With the recent lockdown the case for social security became even more pertinent.

With companies working at less than full capacity for lack of demand, cash grants would help keep them in business. In fact it would be a better intervention for the economy than the posho and beans handed out to the most vulnerable, because with money in their hands they could decide what their most pressing needs were, not necessarily food.

Like during the global financial crisis of a decade ago, the debate was whether to bail out the big companies or step up relief to people who were hardest hit by the crisis. The US chose to bail out the big companies, while Europe, without letting its companies fold provided a robust social security response.

"While the US rebounded faster from the crisis at a macro level, Europe’s populations were cushioned for the worst of the crisis, thanks to existing social security mechanisms which were beefed up, with differing levels of success to aid its populations....

Bailouts by the big companies were used to help restructure them – often leading to job cuts, while in Europe the money in people’s hands helped their companies stay afloat and ensure that some dignity was saved for the everyday man.

Governments don’t like these discussions because, in an earlier age it was difficult to execute and would make them more accountable to more people beyond the tax payer.

If in Uganda’s case cash grants as i describe would mean another million people would be watching government, to who government doesn’t exist in a direct way. Missed payments or other inefficiencies would trigger protests they do not need. Not to mention they would have to commit for the long term because once you start it is unlikely you can stop the process without a lot of protest.

A lot of the cash grants in western economies begun after the second world war, when western Europe had to resuscitate the economy. It is all very nice building companies but if no one is buying  the companies’ shares are not worth the paper they are printed on.

Back to the lucky ladies of Scotland. With one stroke the governmmnet has given a boost to the industry around sanitary protection, while ensuring girls can do better at school and eventually become more productive members of society in the future. One outcome – the boost to industry, is more immediate but the second is more durable and pay uncountable dividends to the country generations into the future....

 President Yoweri Museveni has pledged to bail out companies stressed by the COVID-19 pandemic. This could turn into a gravy train for a few connected individuals and the outcome will be very questionable. But if we split the bail out between the companies and providing social security recovery can be more evenly spread and sustainable.

It is not only good economics but good politics as well.

IT STARTS WITH THE ECONOMY

Last week riots broke out in several towns around the country in reaction to the arrest of presidential candidate Robert Kyagulanyi aka Bobi Wine.

The security forces’ response was quick and decisive. At the time of writing this the death toll was placed at, at least 30 people. This action came up against a lot of criticism and hair pulling.

Why do the police use live ammunition against civilians? I have my thoughts on that but that is not the subject of today.

What interests me is, who are these people – almost always young and male, who are ready to risk life and limb against armed security agents?

In 2009, a decade ago, Wakiso district chairman Ian Kyeyune came against these same kind of people.

Disgruntled at the state of the Busabala road, by then a murram track that was responsible for the red hue of the houses, cars and clothes on the washing line in the area, they summoned the good man to come explain.

His smooth tongue counted for nothing, as an angry mob forced him to seat in the middle of the road and proceeded to cover him in murram from the same road.

I commented at the time that a revolution was afoot.

"Revolutions are not sparked by lack, but more by failed expectations.

People can remain in poverty for a long time as long as they see they have enough company in their misery. Things go south when people can’t work out why they are wallowing in poverty while others are wheezing around in fuel guzzlers, living five figure tabs at the bar (even if there is a curfew) and holidaying like Corona is a myth.

We are talking about income and wealth disparities.

The widening of these is what triggers the violence, wherever you look in the world.

"Economic disparities within a country are an indictment on the ruling class, especially in a situation where the economy is growing....

It means the politicians have failed to convert the growing economy into equitable distribution of the ensuing wealth that was created.

Distributing the growth is simple, but not easy. That is assuming you have mustered how to grow the economy, which our planners seem to be able to do even in their sleep, going by the record of the last three decades.

This is what we know about growing the economy. 

You shift production of goods and services into private hands. And work to create an enabling environment for businessmen to thrive – provide security, lower inflation, stabilise the currency and build infrastructure to facilitate business.

What we have struggled with, is  distributing this economic growth. As it is now it is concentrated among the urban elite, who went to school to a high level and have ingratiated themselves with the ruling class – directly or indirectly.

We have done it before. The ruling class climbed from rural poor backgrounds or are one generation removed from rural poverty.

They managed to ascend to their exalted positions by sticking it out, braving the ten kilometer-plus walk to school – unlike their contemporaries and not succumbing to debilitating disease – mostly by the grace of God. These two alone set them up to take advantage of post independence opportunities that their rural cousins couldn’t.

Understandably, the first post-independence government was dealing with much fewer people or educating fewer students – there were 300 students in A-level at independence.

"We have committed ourselves to mass education and health service provision. What that means is that our little resources are being spread very thin – doing a little of every thing and not much of anything....

In this context two things have to happen, simultaneously, we have to increase our revenues and plug the leaks – stop corruption.

In the last decade or so the government has gone on a massive infrastructure building spree and this is beginning to pay off. But given the existing infrastructural deficiencies it is too soon for government to rest on its laurels. In road construction, power infrastructure and rail transport, we have to invest at least twice as much as we have over the last three decades to stimulate private enterprise to a point where revenues to finance social services can begin to make sense.

There has to be a major commitnent to fight corruption. Not only by government – stop giving pride of place to thieves in church, at weddings and at your babies’ baptism.

Because with corruption continuing to run rampant the infrastructure projects wouldn’t be done, but more importantly in the context of recent events, will concentrate wealth in fewer hands to the detriment of the millions.

Which brings us back to our rioters. Assuming he has a subpar education and work hard as he might on odd jobs and hawking, is barely putting a shirt on his back or roofing, leave alone feeding himself and cannot see any hope at the end of the tunnel and yet he lives in the same town as the more affluent. It will not take long before he makes a connection, however tenuous, between his afflictions and the “unexplained” wealth of the middle class...

And so when some unrest – choreographed or otherwise, erupts it will find in our disaffected youth, a useful fuse for the time bomb.

When Lee Kuan Yew and his contemporaries took power in Singapore after independence, they made the analysis that ruling parties tend to lose in the capitals. For them to hang on to power they needed to deliver services effectively and efficiently as a way to ingratiate themselves with the population. And ensure their stay in power.

They embraced the private sector and used the taxes to improve security, infrastructure and social services.

"They also embarked on a plan to enable widespread home ownership.

One of the spinoffs of this latter initiative is that protests against the government became more benign...

You are not going to go around wrecking property when you know you have a house of your own.

REALISING UGANDA’S FOOD BASKET POTENTIAL

For the longest time possible we have heard how Uganda has the potential to the bee the region’s bread basket.

Our fertile soils – we have almost half of the region’s arable land, our abundance of water --- a fifth of the country is under water and our benign climate – three harvest in a year are within the realm of possibility make this no ideal boast.

A combination of rudimentary farming practices, poor marketing and bureaucratic inertia has meant that this has remained a pipe dream and embarrassingly too, has meant that some part of the country suffer perennial famine.

Enter Agilis Partners who in the space of under decade have become the largest grain producer a leading grain exporter to the region from Uganda.

It all started humbly with a wish to feed pigs.

In 2009 working as a volunteer at an orphanage outside Kampala,in the year before he went to college Benjamin Prinz, co-founder of Agilis Partners, wondered how the orphanage’s operations could become more sustainable.

“So we thought we would help them build a pig farm. Instead of giving them cash we wanted to give them a sustainable source of capital,” Prinz told the Business Vision.

They bought 150 pigs and quickly found out they consumed a lot of maize.

“We realized how challenging it was to get a stable price, good quality and consistent quantities of maize to feed the pigs,” he said.

Then came another discovery.

“In Uganda we found that the maize market is not a commodity market. By definition a commodity is a product that has a definable quality standard and can be liquidated quickly into cash,” Prinz said.

Three different suppliers of maize can have differing moisture content and qualities as to render them not the same product from a marketing perspective.

“So clearly the commodity markets were undeveloped and fragmented. But we also realized Uganda was feeding East Africa and the region was eating $3b worth of maize alone. The challenge that we were facing as a small business trying to feed our pigs was a big economic challenge for the region.”

The light bulb moment led to, in 2013, Benjamin, his brother Philip and Argentine Eduardo Brown starting Joseph Initiative, a business intended to better market the maize grain inside and outside Uganda. This eventually morphed into Agilis Partners, which is the holding company for Joseph Initiative and Asili Farms.

Agilis Partners head office is located about 200 kms north of Kampala on the Kampala-Gulu Highway. The spartan office block also serves as the head office of Asili Farms.

Asili Farms, comprises four farms in western Uganda on which maize, soya bean and sun flower are grown. On these farms about 13,500 acres are under cultivation.

“Last year our farms and outgrower farmers produced 25,000 metric tons of maize, soya bean and sunflower,” Finance manager Caroline Aoja told Business Vision in an interview conducted on a makeshift bench and table.

She said they supply the World Food Program in Uganda, export to Kenya and, until the border closure earlier this year, to Rwanda. From one of their two processing units in Kasese, the other is in Masindi, they export maize flour to Democratic Republic of Congo (DRC).

Owning farms was not part of the original plan. The initial intention was to be a grain marketing company, organizing grain in places of plenty and transferring it to places of scarcity.

“We had invested all this capital in storage and handling infrastructure, built a prominent market network and we find we weren’t able to get enough supply from the local farmers,” Prinz recalled.

So in 2014 they started a pilot scheme on 20 hectares of land, which failed spectacularly because the instructions for growing maize were useless.

“Our third partner helped us access know h ow from Argentina on how to grow maize on large scale. In our second season he looked at how we were trying to grow maize and said they were prehistoric but said, “Wow! There is great potential here,” he said.

Their agronomist Juan Acutain, is Argentine and has helped improve the farming practices on the farms.

But what Agilis is particularly proud about is how they have worked with local farmers to not only supply the Joseph Initiative but improve their won productivity and standard of living.

“We work with at least 15,000 farmers with and average acreage of one hectare each,” said Martin Jadribo, the company’s, small holder farmer mobiliser.

The farmers are categorized according to the acreage they are willing to commit, trained not only in agriculture, but financial literacy and benefit from seasonal demonstrations on the farms, where new methods or inputs are introduced to the farmers.

The benefits have been tangible.

“We have seen yields jumping from six to 18 100kg bags an acre with some of the farmers we started with. Not only because they have improved their farming practices but also because they know they have a ready market for their crop,” Jadribo said.

He said that previously there were at least a dozen middlemen – each taking a cut, between the producer and the end market but now through their 80 collection sectors – 30 in Mubende and 50 in the Masindi-Kiryandongo area, farmers are getting a bigger percentage of the market price.

But beyond that Agili farmers is working with the farmers to grow them into commercial farmers from what they were previously, subsistence farmers.

“In our interactions we get them to think about a growth plan – this year we producing so much we should produce more next year; a business plan – that does what we are doing make business sense and then an investment plan – so once we have made this surplus how do we invest it,” said Jadribo.

About 20 km down the Kigumba-Masindi road Agilis has one of its two processing centers. They have a storage capacity of 10,000 tons and during peak season process 250 tons a day.

“Currently the Asili farms provide 70 percent of our input, with agents and the farmers providing the remaining 30 percent. Ideally we would like a 50-50 share,” Paul Murungi, the processing facility’s operations manager told Business Vision.

Murungi explained that at the plant they receive, clean, dry, store and bag. Plans are to expand the processing capacity to a daily 500 metric tons, which will mean a rumping up of production by both the farms and farmers.

Which goes back to the original challenge for Prinz and his partners, how do we commoditise maize in Uganda?

“The way agriculture is practiced here it is a zero cash system. The small farmer uses seed from the last season, uses the labour of the family and they sell what they either eat all they harvest or eat some and sell some and they do this year after year even if it is not profitable. But they keeping doing it because they don’t have another source to liquidate or being paid for their labour,” Prinz explained.

“There is difference between making money an actually generating an economic return.”

So as a first step agriculture needs to become commercially viable for more people he explains, and for his farmers helping them improve their yields, the quality of their produce and providing a market for them.

That’s a start but because agriculture the world over is a capital intensive endeavour he said, we need more farms of between 150 to 200 acres, a process Joseph Initiative is helping its farmers with.

But obtaining financing for agriculture is notoriously difficult.

“I agree our financial institutions do not understand the risks of agriculture, partly because they are so many, “ he said. Price fluctuations, weather variations

Agilis Partners benefitted from locally sourced credit for their project from Agriculture Credit Fund, which while he was unwilling to divulge the extent of, was used to put up the Masindi processing facility, which could easily have cost a few hundreds of thousands of dollars.

“We were able to do this because remember, we started as a marketing company, the cash flows from which could justify the loan and we had market access.”

Prinz said integration – production to marketing was one way they were managing the risks associated with agriculture.

“We are not just a farming business, we are not just a trading business and we have a vision to invest in protein as well. Fully integrating the whole value chain starts to mitigate the risks and makes us a more bankable project.”

But he warns that equity is key in agriculture.

“The patient capital that comes with equity is key in agriculture …. We started by getting funds from friends first, our family are not well to do so that wasn’t an option,” he said.

The enormity of the challenge – feeding regional markets is not lost on him.

“Africa currently imports about $35b in food annually. That’s shipping jobs abroad. If nothing is done by 2025 we will be importing $115b we will have tripled our food importation bill....

So what would he like to see the government do to support this dream?

“The first thing I would like to see happening is an increased attention to food safety,” Prinz said, explaining that it is the biggest public health issue in sub-Saharan Africa particularly the presence of aflatoxins, a  fungus that has been shown to cause liver disease and even mental issues like autism in children. “The flour being produced in this county is poisonous because of it.”

He would also like to see the free flow of animals – chicken and others across borders.

“This is important so that our clients can expand their businesses to match the growing demand in Kenya and in the region.”

NSSF'S CHALLENGE IS THAT OF UGANDA

Uganda's National Social Security Fund (NSSF) reported a sh405b loss for the year that ended in June 2019 on the back of unrealised losses on their equity positions and foreign exchange losses.

Last year the Fund reported a sh240b surplus for the year which prompted them to pay out a record 15 percent interest on member savings. NSSF has said they will announce the new interest rate at the member meeting on 27th September but they have warned that, understandably, they will not match last year's rate.

Their accounts show they will be paying out sh978b in interest this year to their members down 11 percent from last year's sh1.1trillion.

They are confident that they will beat a promise they made to their members five years ago that they will pay out at least two percentage points overt he 10 year average inflationary rate. The average inflationary rate of the last ten years was 6.7 percent.

A cursory look over their accounts shows that entire loss was attributable to fair value losses on their investments of sh169b and currency losses of sh247b for a total loss of sh416b, variables not really under the management's control.

Interestingly their dividend income sh77b was up 45 percent from last year's sh53b. Interest income was up 19 percent with rental income slipping marginally to sh10.7b  from sh10.9b the previous year.

The telling detail is that only 6.82 percent of the dividend income comes from Uganda. This is interesting because whereas all the regional bourses in which NSSF has an interest in all suffered double digit losses during the period under consideration, the Uganda Securities Exchange (USE) was down the least. So if our equity holdings were biased towards the USE instead of Kenya there would be less of a loss.

And that is the challenge and one governments needs to stop sidestepping and address squarely. NSSF does not invest abroad leaving opportunities begging in its backyard, it invests abroad for lack of opportunities at home.

As has been mentioned earlier its portfolio is biased heavily towards government debt, in fact of all government's bond issues NSSF holds 40 percent and it is also the biggest holder of outstanding shares on the USE.

Government needs to actively encourage our biggest companies to list on the USE, which would, at the bare minimum, reduce NSSF's foreign exchange risk. Some estimates have it that the market capitalisation on the USE can more than double over the next five years if the government took a proactive stand on the issue.

The counter argument is that last year the fund made sh313b in currency gains. Ironically the losses came about because the Uganda shilling this year fared better not only against the US dollar, but also the Rwanda Franc, the Kenya and Tanzanian Shilling. An anomaly seen against its record over the last several years.

The benefits that would come with a more vibrant capital market, it can be argued too far outweigh the currency gains that would be made investing abroad. Those gains are not permanent as this last year has shown.

This being as it is, it still raises questions about NSSF's asset mix. As it stands now 79 percent is in fixed income, mostly government paper, 15 percent in equity and six percent in real estate.

It was not all doom and gloom for the Fund though. Total revenues were up 20 percent to sh1.25trillion from last year's sh1.04trillion. Its assets under management were up 13 percent to sh11.3trillion from sh9.9trillion. During the same period the economy grew by six percent. And the Fund was able to cut its expenses to assets to 1.28 percent from 1.31 percent the previous year.

Every so often the Fund's asset allocation throws up a surprise but on the whole NSSF is doing the best it can -- given the circumstances.

UGANDA SHOULD THINK THROUGH NATIONAL HEALTH INSURANCE SCHEME

It was announced this week that government had given the health ministry the green light to bring a national health insurance bill to parliament.

According to the proposed bill workers will have to fork out five percent of their income and their employers top that up with another five percent.

There was an immediate and loud reaction against the proposal by the workers.

Their protestation revolved around the cost of the new tax on their income. Some arguing and rightly so, that under their private health schemes they pay much less than the government is looking to extract from them...

The argument that as an insurance scheme, which will mobilise the largest pool of insurance funds in the country, the five percent monthly levy on their gross income was extortionist. Especially since they have little faith in the government’s ability to utilize these resources optimally. The government’s corrupt record not helping the cause.

In Kenya they have the National Health Insurance Fund (NHIF) which was started in 1966 as a department in the health ministry until 1998 when it was converted into a state corporation to provide affordable health care for Kenyan adults.

At the highest tier – Kenyans earning more than a monthly Ksh100,000 (sh4m), pay Kshs1,700 or 1.7% of their salary as premium to the fund.

Rwanda has a health insurance scheme where every adult is expected to contribute according to their means, with the highest contribution being about $8 monthly (sh30,000).

National Health Insurance is not a new phenomenon, its traced back to pre-World War I Germany, so one wonders why our planners are looking to gorge out our eyes with their proposals.

No one is against a national health insurance scheme as most formal employees are already beneficiaries of an existing scheme, it’s the rates that are clearly ridiculous and raising suspicions.

As suggested earlier if there are at least two million workers in the formal workers one should expect the premiums on the health insurance to fall drastically compared to what is being paid in the private sector.

One other concern was that given the poor state of government facilities formal workers would have to pay twice or now thrice – incomes are taxed for PAYE, taxed to support national health insurance and employers would still have to subscribe to private providers anyway.

But in countries where the national health insurance has worked membership to it entitles card holders to service in private facilities as well, so those concerns would be put to rest if our health ministry is planning the same.

"If done well this may even serve the purpose of widening the tax base, removing the burden on formally employed workers and even increase the economy’s productivity....

If every adult is supposed to pay at least sh100,000 let’s say, it will force some of those Ludo “champions” crowding trading center verandahs to become gainfully employed in order to pay their health insurance dues.

It would also be wise to take the fund out the health ministry to administered separately.  This may help allay the people’s fears that the funds will be managed by the health ministry. Of course we would expect that the new agency’s administrative costs don’t balloon out of reason. NSSF would be a good model to emulate.

This may also help improve standards in the health sector. A requirement maybe that to qualify for payouts from the fund health facilities need to meet certain basic criteria of infrastructure and staff.

A well run agency can actually be a game changer in improving health standards in this country.

On the other hand it might be the very thing that brings the health sector to its knees. The verification of claims and the pay out of those claims can be a huge source of corruption. They could on one hand connive with health operators to inflate costs and put huge pressures on the fund. On the other hand they may accumulate huge arrears to the sector and fail the health sector altogether. Operators in other industries from logistics to telecommunications to electricity have horror stories to tell about arrears they have had for years with government that go unpaid.

We keep our fingers crossed that it will be the former rather than the latter scenario that plays out.

MEDICS’ STRIKE; DAMNED IF YOU DO, DAMNED IF YOU DON’T

This week doctors went on strike for better pay and working conditions.

Unlike a strike of taxi drivers or shopkeepers or even cooks, the doctor’s strike has reverberated through the population, especially those who cannot afford private care.

And unlike other strikes the doctors can keep it up for longer than most, because while they will not be seen in demonstrations, they can sustain themselves by working in the private sector.

"A lot of industrial action has fallen short in this country because other strikers cannot support themselves outside their public sector jobs...

How did we get to this?

We have to go back to the 1970s and 1980s when, not only was no new infrastructure built in the sector but also the rate of graduation of medical professionals did not keep up with population growth.

According to the World Health Organisation (WHO) there were 11.7 doctors for every 100,000 doctors in 2010 compared to nine doctors for the same number of Ugandans in 1965 shortly after independence. Most of the gain in these numbers came in the since 2002 when the number was 4.7 physicians per 100,000.

Up to 2010 our population had grown more than four fold since independence.

Kenya in 2010 had  19.9 doctors per 100,000 people. But the real measure in the region is Mauritius which in 2010 boasted 107 doctors per 100,000.

To show the enormity of the task ahead, to equal  Mauritius 2010 numbers we would have to increase the number of doctors twenty fold from the about 2,000 doctors we had in 2010.

This deficit is also reflected in all other medical professionals and in the sector’s infrastructure.

"In trying to redress this imbalance in the last three decades we have tried to shore up health care by investing in health care centers, to decentralise the services, we have more than just Makerere graduating health professionals and more recently we have given our referral hospitals a complete overhaul.
But it seems as if the faster we run the further behind we fall....

This context is important because a country’s health sector is only as good as its public health services.

Everywhere in the world investors in the sector will just do just enough to be better than the public health system to be competitive.

If in the health system there are no doctors, drugs or beds then the private sector will just ensure it has a few more doctors, a slightly better stocked pharmacy and few more beds to make it worthwhile for the public to pay for the service.

It is no wonder in Uganda that we still travel abroad for treatment 50 years after independence. Our private health care is not that much better than the one you get from the crumbling health system.

The doctors are within their rights to sue for better pay. For the lifesaving work they do it’s hard to argue that they are paid adequately.

The government says a pay readjustment is coming shortly.

One can see government’s dilemma.

In pulling Uganda up by the bootstraps over the last three decades they have faced numerous sequential challenges. So what do you do first – security, the roads, schools, hospitals, power generation etc? And when you decide on the order to invest do your priorities remain static? But most importantly how much do you have to commit to any or all of these sectors?

It is not helped that there was a universal decline in all sectors in a situation of few or no resources. 

So one suspects the decision was often that because there was not enough to go around some sectors will suffer as we beef up the ones ahead in the queue of priorities. And even within the individual sectors there prioritisation challenges.

And despite all this is did not help that some agencies were created with salary structure way beyond public sector pay grades and continued unabated.

"One can sympathise with government’s numerous challenges, but not as much as with the doctor’s plight...

That being said it would be useful if the doctors found another way of engaging government other than depriving the greater public of their lifesaving services.

There must be a way for them to keep working as they negotiate with government for better, if for nothing else than that they are no ordinary workers. Which again strengthens the case for their improved pay.

GULU FIASCO, A PEEK INTO OUR COLLECTIVE LOT

Uganda has been hosting a regional secondary schools meet in Gulu for the last week.

It is safe to say that at the end of this event as a country we will not be covered in glory for the shambolic manner in which our officials have gone about the event.

At the beginning of the event key facilities for athletics, swimming and tennis had not been worked on.

Since the beginning of the week we have been served with a frame-by-frame show of development on the pool.

At the beginning of the week they were filling the pool by whatever means necessary – buckets, fire trucks, water bowsers and doing it delicately so us not to dislodge the tiles which had only just been laid.

Then they were tiling the skirting of the pool. And finally they were treating the algae-green water and officials were optimistic that the swimming competitions could kick off today (Friday). For lack of time they were going to modify the competition so as to be done by the scheduled end of the games, on Monday.

"How typical of Ugandan officialdom to leave for the very last minute such preparations for an event of such importance...

They have it down to a tee. Lobby for an international event. Win the right to host it with years to spare. Then forget about it. With months to go – in this case days to go, sound the alarm that we are not prepared and we risk a fiasco if issues are not addressed. When all seems lost and we are about to do the right thing – that is pull out of the commitment, we make a last gasp appeal to state house to rescue the situation.

Of course at this point no one is going to be going over the request with a fine comb. We cobble together a half decent event, the visitors leave and we go on with our lives, the hypertension-inducing crisis forgotten so totally as to make one wonder whether it was just a bad dream.

The formula deviates little from this basic plot.

We saw it with the Commonwealth Heads of Government Meeting (CHOGM) in 2007, we have seen it with Uganda Cranes at the Africa Cup of Nations earlier this year and with our hosting of the Africa Netball Championships a few months ago and a multitude of events in between.

For a person who has not been following the circus or unable to dot to the dots, one may write it off to the incompetence of the relevant officials. Or maybe put it down to another case of government refusing to leave up to its obligations.

But how can it be?

All the people who organise these events are intelligent, experienced officials whose competence it would be hard to fault. And the ease with each hundreds of millions are released for these events suggests that government isn’t short of money for these events.

So what is going on?

"Your guess is as good as mine. But it would not be a stretch of the imagination to believe that these delays are deliberate, designed to create public concern and panic. This would then justify an unquestioning opening of the money taps from the treasury...

It would be interesting to see a post event audit of some of these events who success was saved from the jaws of failure by a timely and over-enthusiastic cash infusion by government.

This perennial circus has a cost. It means other more crucial budget items are bumped off the agenda for one, incentivises wrong behaviour and need we say, puts money in the pockets of  a few at the expense of the majority.

Since they keep doing the same thing over and over again with no fear of being stopped in their tracks, this behaviour also points to impunity.

How else do you explain civil servants wearing Rolex watches whose minimum price is many times their monthly salary?

PROMOTE MORE SOLAR USE IN UGANDA

This week a 10 MW solar project, the largest in the region was launched in Soroti district.

The power from this $19m (Sh68b) project is enough to power 4,000 households or about five times the number of homes in Bugolobi flats.

Promoters of the Soroti  project estimate that if we were running generators to produce the same amount of power, we would need 15,000 liters of diesel daily.

They also report that to run a project of this type a key requirement is that there be between four to six hours of sunlight daily, Soroti gets about eight hours of sunlight daily making it one of the best solar resource areas in the country.

Rwanda recently commissioned a 8.5 MW solar project which is projected to power 15,000 households there.

But Morrocco, while not using photovoltaic technology like Uganda and Rwanda, earlier this year launched the first 160 MW of an eventual 510 MW solar farm, the largest in the world. The project which covers an area equivalent of 200 soccer pitches will eventually export power to Europe.

The issue of energy is critical to us. 

One because our power generation to our population is way below the average for the middle income country that we aspire to be.

According to the CIA Factbook next door neighbour Kenya was generating 189 kwh per capita of electricity in 2012 (the most recent year for which there were figures). Uganda in comparison was generating less than half that at 91 kwh per person that same year.

But even Kenya is a poor comparison. In the same year Egypt was generating 1,856 kwh per capita, Mauritius 2,182 and South Africa 4,896 kwh per capita.

These figures serve to show how far behind we are in our ambitions to make middle income status. Kenya already is so, at a bare minimum we need to double our generation capacity.

And secondly, to paraphrase the second law of thermodynamics, any country will regress into chaos unless energy – in this case electricity, is injected into the system.

"We don’t need theoretical physics to tell us that. A few years ago when we were not generating enough power to meet our needs, we suffered frequent loadshedding to the point that at one time a study showed that Ugandan manufacturers were losing at least 30 days per year in production as a result....

This would be disastrous because not only would our local businessmen be uncompetitive at home and abroad but one is unlikely to attract the kind of investment required to push the country to the next level of development.

They say we have at least 4,000 MW of hydropower generation capacity on the Nile, another 160 MW potentially from small hydro plants, geothermal capacity of 450 MW and another 800 MW from the use of peat from our numerous wetlands.

Given that our population continues to grow at about three percent annually, meaning it doubles ever 24 years, the urgency to unlock our power generation potential cannot be over exaggerated.

While we should be pushing for more and more generation we would not forget the other side of the story – directing even the little power we have towards productive sectors of the economy.

The campaign to get us to use the pricier energy saving bulbs has recorded a saving of about 30 MW according to the energy ministry.

In addition and related to the Soroti power plant we should find ways to move residential consumption to solar energy. A solar unit on every residential roof to power our bulbs and boil our water would probably save multiples of that saved by the new bulbs.

This is not as farfetched as it seems. The price of installing power has been falling precipitously over the last 40 years. The price per watt of solar power is now at around $57cents compared to $76 in 1977....

In preparation we should be looking at what policy changes need to be done to the current situation to kick start a move towards more residential use of solar power.

HOW WE SHOULD RUN UGANDA AIRLINES .... IF WE MUST

President Yoweri Museveni has made a revival of a national carrier a major target for his cabinet in the coming five years.
My opposition to this development is well documented.

Going by our history the proposed carrier will end up being a drain on our treasury, shifting valuable resources away from key services and infrastructure development for years into the future. I have argued that the project is unnecessary, asking what can a state owned carrier do for us that other airlines are not already doing for us?

If it is cheaper fares that we want it would be cheaper to give concessions to airlines flying into Uganda – lower fuel taxes, cheaper landing fees etc in exchange for lower fares than to try and set up our own airline.

The $300m we are supposed to have earmarked for the project is a drop in the ocean. Ask our neighbours whose airline’s losses are being carried by the state and which are in hundreds of millions of dollars over the lifespan of the carrier.

But since we are hell bent on going ahead with the project maybe we can still save the project, or at least give it a chance of success.

For starters I am not opposed to a national carrier but I am opposed to a state owned one. If we helped a private sector player set it up with minimum loss to ourselves I have no problem.

In line with that I propose a model for the new Uganda Airlines.
First of all let us recognise that starting up an airline is not like starting up a taxi company. We do not have the expertise and it would cost us hundreds of billions of shillings to bring our skills up to scratch.

Keeping that in mind it would be useful to partner with an established player, who brings the managerial competence and we provide the capital.

This would help smoothen the expected sharp learning curve and also help us feed into that airline’s existing network.

Of course our officials and representatives on the board have to be seasoned businessmen or managers who will ensure we don’t get the short end of the stick. With this model we will ensure our concerns are addressed within reason and our people and institutions will develop the capacity we need to run an airline.
In this way we share the risk with a partner who has a material interest in the airline’s success.

I shudder when I hear comments like, “Parastatals in emerging economies play a bigger, liberating role beyond balance sheet profitability” advanced by the proponents of setting up the state owned airline.

In not so few words such people are saying that the Ugandan tax payer should forgo better health and education services as a minority indulge their egos.

It also suggests that the laws of economics can be suspended because we are a developing nation.

Neither the economics nor the mathematics favour a state owned airline now.

People who have set up airlines – and we have a few in our midst, will tell you that  you would have to brace yourself for losses in the tens of millions of dollars for years before you can have a hope of turning a profit. Particularly with a none air faring population like our own. Of course the proponents argue that the reason we don’t fly more often to our villages is because of the high airfares. They are high for a reason, and a lot of it has to do with our regulatory, legal and tax regimes.

For one thing those with experience will tell you it takes a while before you get the confidence of the flying public. One way to get is to fly the plane as scheduled regardless of whether there are passengers or cargo or not. Veterans of Uganda Airlines, Alliance Air and Africa One will tell you horror stories about the crew flying virtually alone to London, Johannesburg and Nairobi and not for free, as the crew’s salaries, fuel, various fees and the aircraft’s wear and tear have to be catered for.

I would be the first one to be proud that we have a functional airline but not at the cost of more essential services, but if we must have it now let us be prudent about how we set up, if only to minimise the losses to us.

A better use of our hard earned money would be to beef up our aviation infrastructure and afford airlines better concessions to attract more traffic in and out of Uganda.

THE OIL PIPELINE:ITS ALL ABOUT THE OIL, OR IS IT?

Last week Uganda decided that the oil pipe line from the western oil fields will go south through Tanzania rather than through Kenya, as was earlier expected, a decision that served to open up old wounds and threatens to shift the region’s economic center of gravity.

The Kenyan route through Lokichar and onto Lamu, was discarded on account that it would be more costly to develop due to expensive land compensation claims, its passing through environmentally sensitive areas and the state of unpreparedness of the Lamu port, which was deemed too shallow and exposed to high tides, less than ideal conditions for oil tankers to operate in.

The route through Tanzania to Tanga port was shorter – though not by much 1500 km through Kenya as opposed to 1,410 km through Tanzania. This would be factor though as the waxy nature of Uganda’s oil which solidifies below 40 degrees centigrade necessitates heating plants every so many kilometres. In addition because all land belongs to the state in Tanzania compensation would be kept to a minimum and leases secured faster.

It also helps that Tanga port is already up and running unlike Lamu. This would mean Uganda’s first oil exports have a better chance of being realised before 2020 using the southern route.

"And it did not help that Kenya has not established commercial viability of their oil finds in the north...

This was important for both countries but more so for Uganda, because if Kenya didn’t have viable quantities to ship out Uganda would find itself carrying a disproportionate portion of the piping costs.

While Tanzania has no oil deposits of its own to share the pipeline there gas reserves are convenient as heating fuel for the length of the pipeline. In addition the development of infrastructure through southern Uganda as a plus given the unexploited iron ore deposits in the region.

Of course Kenyan officialdom and the business community were left unamused at the latest development. Some commentators went as far as to accuse Uganda of playing off its neighbours against each other, sticking it to Kenya over some unresolved and unclear past slights and threatening to jeopardise the joint multi-billion dollar Standard Gauge Railway(SGR) project.

The Mombasa to Nairobi leg of the SGR is already underway and will cost about $5b while the $8b has been earmarked for the Malaba-Kampala leg.

The economics of the project were lost in the hysterics.

It is understandable that Kenya Inc should be concerned.

"Fashioned as a colony the British never saw themselves ever leaving, like South Africa or Zimbabwe, the other territories around it were fashioned to feed into Kenya’s industries, leading to its regional economic dominance, a situation that persists to date...

However with Uganda’s economy finding its feet over the last three decades and Tanzania’s embarrassing wealth in natural resources – natural gas, gold and other minerals, means Kenya is increasingly having to see itself as first among equals rather than the 800 pound gorilla straddling the region.

Channelling Uganda’s oil, the fourth largest reserves in sub-Saharan Africa, through Tanzania threaten to redress historical regional economic imbalances. Uganda’s reserves are estimated at 6.5 billion barrels of which about 1.5 billion are recoverable.

It is not unreasonable to believe too that the accompanying improvements in infrastructure along the pipeline will make the much neglected Tanzanian route to the sea more attractive for Ugandan, Rwandan and Congolese commerce, a worrying situation for Kenyan transport interests.

And finally with tensions in South Sudan beginning to ease off -- rebel leader Riak Machar was sworn in as Salva Kiir’s  vice-president, the issue of an oil pipe line to the coast will be revived, only this time there will be an alternative through Tanzania to the Kenyan route.

"It is safe to say that when history is written the events around the evacuation of Ugandan oil to the sea will be seen as an inflection point in the region’s geopolitical alignment...

It is not only about the oil, but then again it is.

THE TOP 10 OF SHILLINGS & CENTS 2015

It has been another year in our journey through time.

During that time Shillings & Cents has taken more than a passing interest in events affecting us. Sometimes with cheeky irreverence, often with head shaking incredulity but always with well meaning sincerity this blog has attempted to uncover the meaning behind and implications that will follow everyday events, which will determine our futures and the very course of history, and even there, I fear I understate the reality.

Below is a ranking by hits per story of the most read articles off this blog in 2015, from the fate of floundering generals to the shamelessness of grubby fingered officials to the geopolitical storms brewing in all around us and further afield to the brainless upbringing of future generations.

The list is by no means comprehensive. Stories of noteworthy importance that did not make the list, but which also enjoyed great popularity include Uganda's tourism gets a short in the arm, How the rich save, The scandal of NSSF's billions and The scent of roses and wealth , all deserving of mention just that there were better entries, but let me not spoil it for you....


10. LESSONS FROM THE UGANDA-KENYA SUGAR BURST UP

Kenyan authorities have been restricting sugar imports from Uganda. They argue that our factories are not producing sugar surplus to our requirements therefore we must be importing sugar for onward sale in Kenya.

Read More 


9. OBAMA WALKS TIGHT ROPE IN AFRICA VISIT

US President Barack Obama’s landmark visit to Kenya had him sticking to the script -- extolling democracy, hinting on human right concerns but all the while being careful not to upset key regional allies in the fight against terror.

At a press conference in Nairobi he chastised Kenya for not respecting Lesbian, Gay, Bisexual and Transgender (LGBT) rights, a rejoinder by his counterpart Uhuru Kenyatta to the effect that it was a non-issue for him and his countrymen, put paid to that discussion.

Read more

T7. THE UNCOMFORTABLE TRUTH THE UGANDAN POLLS ARE THROWING UP

Over the last two weeks the New Vision has been running a poll that sampled people’s opinions on the Social, Political, Economic and Cultural issues in our society.

The poll, which randomly sampled more than 6,000 respondents from 43 districts around the country is bound to be a trigger for many other polls coming out in the lead up to the elections next year.

Read more

T7. UGANDA SUGAR STIRS UP KENYAN POLITICS

Perennial nearly-man of Kenyan politics, Raila Odinga is kicking up a storm in the sugar growing regions of western Kenya, mobilising the population to resist the importation of Ugandan sugar to bridge the shortage in the market.

Kenya’s sugar manufacturing industry, which is mostly controlled by the government has failed to keep up with the population’s demand for sugar. As a result their local industry only produces 500,000 tons of the 830,000 tons the region’s largest economy demands.

Read more

6. GENERAL SEJUSA’S TRAVAILS A STAGE IN UGANDA'S EVOLUTION

It started much earlier but let us use January 26^th 1986 as a reference point to chart events and place the events surrounding our most recent headline grabbers, Amama Mbabazi and General David Sejusa’s, in a bigger context.

When the rag-tag National Resistance Army overran Kampala, the city’s state of disrepair was emblematic of the general state of the nation. Electricity supply was intermittent or non-existent for most of the capital’s residents, roads were in such a sorry state as the normal traffic rules were suspended, bread, sugar, paraffin and even bar soap were a luxury.

Read more

5. THE UNWHOLESOME PRESSURE WE PUT ON OUR CHILDREN

Last week 23 year old Joan Abua, frustrated with her third O-levels failure, committed suicide by hanging herself from a tree behind the family home in Akongo village, Otuke district.

In letters she left behind for her family, she lamented, “This world is not easy, I tried my best in vain” and while thanking people for coming to her funeral, she promised to curse her relatives if the letters were not read out for the mourners.

Read more

4. SHILLING COLLAPSE IS OUR FAULT NOT THE DOLLAR’S

Last week the US dollar burst through historical highs against the shilling raising inflationary fears and more stress for local businessmen.

The dollar traded above sh3,000 on Tuesday and held there by the time of publication. This is the highest the dollar has been against the shilling.

Read more

3. UNRA’S FATE IS AN INDICTMENT ON OUR SOCIETY

This week the Uganda National Road Authority (UNRA) board took a chainsaw to its staff, sacking all of them to facilitate a complete overhaul of the organisation, which has become the poster boy for corruption and greed.

The almost 900 workers will be let go over the following weeks but have been given the option to reapply for their jobs when applications are called.

Read more

2. IS OUR SOCIETY IRREDEEMABLY CORRUPT?

This was yet another week in which corruption dominated our headlines.

Uganda National Road Authority (UNRA)’s Allen Kagina took a slasher to the organisation’s hierarchy, sacking some, encouraging others not to seek contract renewal and causing soul searching in the authority, which had become the byword for the worst excesses of corruption in this country’s history.

Read more


1. NOW WE ARE GOING INTO CAR MANUFACTURE?

Last week the Kiira Motors Company (KMC) unveiled their 25 year old business plan.

The company which started as some engineering undergraduates tinkering around resulted in the development of the Kiira EV prototype, a car that runs on electric power in 2011. According to the business the planned car assembly plant will employ up to 10,000 people, is projected to be profitable by 2023 and at full capacity in 2039 will be rolling out 60,000 units.

Read more