TRUMP REVOLUTION THROWING UP UNCOMFORTABLE FACTS

Since the beginning of February the new US Department of Government Efficiency (DOGE) has cancelled more than a billion dollars in government contracts that were deemed unnecessary and therefore wasteful.

It would be interesting to see what these savings are channeled towards in coming days.

Trump, a member of the economic elite in America, which has argued for lowering taxes for businesses, has decided to answer critics of this initiative by showing that by cutting out the “waste” in government the country can very well afford the tax cuts he intends to ram through.

"The revelations from DOGE are that a lot of money was being funneled to programs with questionable benefits to the US people or the people they are intended for.

Hence the shutting down of USAID.

That being said, Trump’s actions are being driven by a right wing ideology that calls for leaner government and more benefits for businesses. The critics say, by business we are talking about the rich. It doesn’t help that Elon Musk, the world’s richest man now heads the DOGE.

The principle for pushing for government efficiency is hard to argue against. You may frown at the way it is being done, but one can argue that when you are going up against entrenched interests, the slowly-slowly approach may not work. Shock and awe may be the way, so as not to allow the said interest groups to regroup and retaliate.

This column has argued previously that wealth inequalities within populations are more a factor of government inefficiency than the failure of the market.

The market generates the wealth and governments, through taxing economic activity and the budget distributes this wealth. Not by handing out money at street corners, but by funding security, infrastructure, social services and public goods, which when taken advantage by the population will give more and more people a chance to benefit from the market.

The US, the world’s biggest economy has got there by leveraging the power of the private sector. However, the US has major wealth and income inequalities – many lesser developed countries have better stats, whose responsibility can be put squarely at the government’s feet.

What the DOGE is finding out bears this thesis out. Millions of dollars were being paid out for dubious projects inside and outside the country, while major initiatives in education, health and general infrastructure went begging.

In my ideal world, the government is in place to serve the people. It does this by primarily ensuring safety of life and property for everybody. This does not only mean having a functional security apparatus, but also ensures that the legal system works for everyone and corruption is eliminated.

In such an environment business can thrive, in the process creating jobs and paying taxes.

The taxes collected are then deployed to improve and expand public goods, which then allow more and more people the opportunity to benefit from economic growth.

So if your economy is growing but less and less people are not enjoying its benefits, look to government and not business...

To that extent DOGE is a long overdue initiative in the US. That would probably be the work of the Inspector General of Government (IGG) here in Uganda.

It is interesting that businessmen are pushing this agenda in the US. Because government inefficiencies have a way of affecting business and weighing it down.

In the real world things are not as cut and dried. The first thing that happens when people get into government is to ensure they stay there. In our part of the world this maybe by force of arms, but also by catering to your supporters.

That is where the trouble starts, because in pandering to these loyal constituencies, government efficiency is compromised.

That is why it is not wise for government, any government, to be in business. Because business sustainability, which comes with increasing profitability and growing market share, are secondary to the need of government to retain power...

So in a country like the US where all business is in private hands, the temptation to expand government to accommodate supporters, is the next logical thing. And as night follows day, results in growing inefficiency.

Trump and Musk seem to be flipping the script. Their actions suggest that government efficiency is more important than kowtowing to cronies. They are betting on improved services for the people being the incentive for the people to keep them in power. That they will not rely on cronies for that.

While the current push for government efficiency has affected us in faraway east Africa, it will be interesting to see how it plays out in coming months.

Will the bureaucrats mount a fight back or have they been scuttled and their threat dissipated.

Time will tell.

 

CHICKEN COMING HOME TO ROOST WITH USAID SUSPENSION

US President Donald Trump’s administration has thrown the aid industry into a panic with suspension a week ago of his country’s charity arm, USAID.

It has been reported since, that billions of dollars have been put on ice, thousands around the world will be out of a job and millions of beneficiaries are looking forward to a very uncertain future.

Created in 1961 by the John F. Kennedy administration, USAID has been involved in supporting, among other things global health, food security, democracy and governance initiatives.

The Trump administration accuse them of being fat and lazy and even worse, of being corrupt and money launderers. Allegations have been rehashed of how only a fraction of the aid actually reaches the intended beneficiaries, with the bulk of it going to administration, procurements and high living.

For these and many more accusations, the aid industry has come under heavy criticism for decades. These accusations are not new or unique to USAID.

The industry’s record has been spotty at best and dismal at worst.

"For instance since the 1960s Africa has been a recipient of more aid than the Marshall plan, that reconstructed war torn Europe after the second world war, but remains riven with poverty, disease and war...

Aid campaigners would blame that on poor governance on the continent. On the flip side others would argue that bad governance on the continent is a direct result of over reliance on aid. A situation that did not arise by mistake.

The history of development shows that countries advance by mobilizing their own resources – land, labour and capital, to improve the living standards of their people. This has forced governments to move from autocratic monarchies to more inclusive democracies, as the political elite had to negotiate with the people to pay taxes to finance development.

The monarchs of Europe thought they would have their cake and eat it, taxing their subjects to finance their lifestyle and questionable wars, without being accountable to the people. They did this for a time –for centuries, before the people rose up and said enough is enough. Many monarchs paid with their heads for resisting the new power sharing arrangements with their subjects.

The lesser developed countries of Africa were promised they could short circuit this development process by first colonizing us and then in post-colonial Africa, by providing us with aid.

In hindsight aid has not been about transforming society or development, but about influence peddling. Aid has been the carrot that kept us in line. And as long as we kept in line, it mattered little what our leaders did with the money, hence the eruption of corruption in post-independence Africa and the lack of economic transformation.

Aid has given African governments a free pass not to develop relationships with their people (democracy), by abrogating funding responsibility to the aid industry. That is why for instance we are tearing our hair out because USAID was a central player in the health industry and their departure is an existential threat for many.

It is easier to fly to Washington (per diems all around) and negotiate for more money than it is to negotiate with your population to pay more tax.

The truth is we have been lulled into a false sense of security with all this aid sloshing around.

Shortly after the NRM came to power there was a school feeding program instituted because, coming out of war, harvests were not the best. By 1990 it was determined we did not need that food aid any more. I remember the end to that food aid – mainly chicken curry and tinned fish, almost caused strikes because the school kids had developed a taste for the tinned food and could not imagine living without it.

Today its inconceivable Uganda would need food aid, but one can see how dependency could have been easily created.

The suspension and possible closure of USAID should be cause for soul searching.

"We need to ask ourselves how a foreign entity can be so central to the health of our people? An entity, which on the face of it, may have altruistic motives but is susceptible to the political vagaries of a country for who our welfare is not top of their agenda?

The record will show that aid is insidious in its creation of dependency. Because we have aid we cannot marshall home grown remedies to our lack of revenues to finance our development. Why think hard when someone is falling over themselves to throw money at you.

I am not hopeful, but this event should make us take a long overdue look at how we can mobilise our own resources and how we prioritise the expenditure of those resources.

But as I said I am not very hopeful, especially since USAID or a variation of it, will return within the year.

 

POWER ONLY RESPECTS POWER

 Recent events locally and internationally have cemented the fact that power only respects power and two, that those involved in the game of power are always on the look out to extend their own and minimise their opponent’s advantage.

Locally we saw the National Resistance Movement (NRM) first coopting Democratic Party (DP) president Norbert Mao (Its not clear whether the party is coming along) to its agenda and then pulling out all stops to win the Soroti East constituency.

Internationally, we saw Russia continuing its campaign in Ukraine despite the world’s criticism. For Russia the campaign in Ukraine is not another thing on the day’s to do list but a real existential threat, the loss of which will come with consequences to dire to bare.

And finally, US house speaker Nancy Pelosi made a symbolic visit to Taiwan despite loud protestations by Beijing. US official policy remains for a one-China policy. Pelosi’s visit was a case study in the separation of powers in practice I the US government.

"In all these cases it is clear power seeks to always concentrate more power to itself and loath to allow it dissipate away from itself....

When you are at the top of the hill you have a strategic advantage and most of your effort is expended in defending that position from challengers. This may entail fending off the challengers’ attacks head on or spread dissension in their ranks with the aim of blunting their resolve.

Its not time to seat on your laurels once you have attained power, something the NRM knows all too well.

On one television talk show an opposition member was whining about the NRM wanting to win everything even a “small” constituency like Soroti East. For the leader nothing is too small, as losing even once can be blown out of proportion by the opponents to give them impression that this is the beginning of the end. And in the game of power, perception trumps fact often enough.

Another thing is that power is amoral. The end justifies the means. You cannot appeal to its better nature or shame it into good behaviour. For those out of power, raising moral objections to the actions of power is a way to appeal to the court of public opinion and hope the public will be disgusted enough to do something. Hope though, is not a strategy....

As we have seen in Ukraine, Russia on one hand is fighting the Ukrainian forces but also working to demoralize the public through “accidental” bombings of malls, theaters and residential areas. It is also working to weaken the EU’s unity by denying the gas, critical for heating in the coming winter season. Western observers are crying themselves hoars about war crimes, but the Russians are continuing along their merry way.

The issue of war crimes is also a hazy one. When war is declared who are the enemy? The man in uniform seeking to end you, is clearly an enemy combatant but what about the civilians who cheer them on, offer them refuge and would not be averse to shooting you in the back in support of their own forces? The theory is clear but in the chaos of battle, clarity is a casualty.

In the last week, the US killed Al Qaeda strong man Ayman al-Zawahiri believed to be responsible for the September 11, 2001 bombing of the Twin Towers in New York and the earlier bombing of the Kenyan and Tanzanian embassies in 1998.

Using high precision missiles fired from a drone Al Zawahiri was killed as he stood on his verandah. There were reports that the missiles do not explode but rather use blades to kill only the target, minimizing collateral damage. However, footage released later showed the top floor of the building Al Zawahiri was believed to be in, was flattened. Its hard to believe any one in his vicinity survived. War crime or not? Who decides?

Power only understands power. If there is no equal and opposite reaction, power will have its way.

The US argues that while the official policy is to recognize one China with Taiwan they cannot interfere with the working of the legislature for which Pelosi is the speaker of Congress. China would have cognitive challenges understanding how all arms of government do not work in unison. The truth of course is that Taiwan continues to exist as an independent nation because the US has promised to defend their independence. Without that you can rest assured they would be back in the China fold quicker than you can say Chiang Kai-Shek.

"The point is power operates according to a different moral code than the wielders of power preach to us. Power has little use for the golden rule – treat your neighbour as yourself. It has its uses, in indoctrinating Sunday schoolers.

LESSONS FROM THE KENYA FUEL CRISIS

Kenya has been suffering a fuel crisis in recent days and Ugandan night dancers have been rubbing their palms in anticipation for when it will hit our shores.

They have been sorely disappointed.

The Kenyan fuel crisis is not one of low supplies but one created by a delay or refusal of Nairobi to pay an agreed upon subsidy to the fuel companies for supplies provided in the past.

The way it worked is that government in an attempt to cushion its citizens from fuel price increases, that have arisen from increased demand in recent months following the lifting of Covid-19 restrictions around the world and the Russia-Ukraine war, agreed with the fuel companies to cap pump prices at a certain level and pay the companies any extra costs they incur.

Last month global fuel prices hit a 14 year high at $139 a barrel.

Government fell back on payments to the fuel companies and they turned off the taps. Fuel prices had jumped to about sh6000 a liter of petrol from the capped value of sh3,500 a liter. The fuel companies claim government owes them about sh600b but the Kenya government says its about sh400b.

There were reports that the fuel companies were sending some of the excess fuel on to Uganda, where they get paid in full at the pump, hence no supply shortages on our side of the border.

Kenyans may get some relief soon as President Uhuru Kenyatta signed off a Kshs35b supplementary budget to continue the subsidy on fuel.

The problem with subsidies of this kind they are often driven by bad politics rather than good economics.

Kenya is in election season, with the elections coming up in August, the ruling party cannot afford to have people grumbling ahead of what is expected to be a tightly contested poll. So they bow to populism and ignore the economics.

There is an old saying that the market can remain irrational longer than you can remain liquid. So the Kenya government is hoping the price increases on the global market are not rational and will revert to previous levels. They think they have enough money to subsidise the pump price until this happens. I think they do not have the money and will be forced to remove the subsidy, after a few more fuel crisis in coming months.

The more cynical take is they will hang on to the subsidy at the cost of providing public goods and services and remove it once the election is done and dusted in August. If they are still in government they will grit their teeth and weather the protests but if they are out the new government can sweat with the mess they have created.

Subsidies, especially of consumption are never a good idea.

They keep the people happy for a while but the market will not be fooled for long.

As is already happening a parallel – black market, in fuel has emerged in Kenya and prices are almost double the targeted pump price. That’s an indicator of what will happen when the government gives up on the subsidy.

Across the border in Uganda where there is no subsidy the fuel prices have increased steadily allowing us to adjust our behavior, without suffering unnecessary shock. We have huffed and puffed about government’s insensitivity to our lives, that they should do something like the Kenyans are doing for their people, that was a few weeks ago.

Suddenly we are quiet as the Kenyans are lining up for hours to get fuel at their stations.

There was a funny story about boda bodas escorting a fuel truck. They thought the fuel tank was going to deliver fuel to a station, so they would be first in line.  To their shock even the fuel tank was looking for fuel.

What is popular is not always right and what is right is not always popular.

That being said the warranted subsidy government should be paying in Uganda is the cost of ensuring our fuel reserves are maintained and managed well in the event of fuel shortages -- hopefully not cause by bad economics, sometime in the future.

A few days ago US President Joe Biden announced the release of a million barrels a day for the next six months form the country’s strategic reserves to ease the pain of high prices there. It is expected the release will slow the rise in fuel prices – US daily demand stands at up to 20 million barrels.

The US oil reserves stand at just over 700 million barrels, which have been accumulated since the 1970s oil crisis.

I couldn’t determine the cost of storing them but assuming it was even $0.1 a barrel per day that would still come to about $25 billion a year that the tax payer has to foot, money that may be “better” spent on improving their health and education services.

Our consumption of about 20,000 barrels daily means our reserves would be much less, but we should have them. Like an insurance policy, they will be frowned upon in good times but will come in handy in tricky situations.

THE COST OF SHUTTING DOWN THE INTERNET

My friend was hoping she had left the trials and tribulations of 2020 behind her and that 2021 would allow her business to get back on its feet again.

Last year Agnes was forced to shut down her downtown shop, where she dealt in shoes and clothes. The lockdown and the subsequent collapse in economic activity meant, she couldn’t keep with rent payments. She substituted a physical location for an online presence in August and by the end of the year her revenues were not quite up to where they were at the same time the previous year, but because of the saving on rent, she was not complaining.

New stock had just come in at the beginning of last week and she was taking orders when government shut down social media – she deals off facebook and instagram  and then the internet altogether. And to add salt to injury mobile money transfers too were suspended.

While the internet is back on and social media still – officially off, she believe she has lost momentum and could the government please restore normal service asap.

The government shut down the internet for fear of anticipated riots in the wake of the just concluded elections.

In a liberalised economy government has three main roles --  to maintain macroeconomic stability, regulate and direct markets through an overarching strategy for the economy.

"When the liberalised economy fails to deliver to the general population it is an indictment on the government of the day....

The market, while being the most effective creator of wealth we know, is the probably the worst distributor of that  same wealth. The market tends to give more to those who have and to those with little, even the little they have it takes away from them.

The distribution of wealth is therefore a government role. By providing services like security, health and education, governments ensure that a conducive environment for wealth creation is in place and that by improving the productivity of the people they can not only create more wealth, but also take advantage of the opportunities thrown up by the benign environment.

But more importantly through formulating strategy, which determines the national vision and therefore to which sectors resources will be directed, the government signals to the market what its priorities are. Regulation also ensures that among other things anti-competitive behaviour does not take root.

Some people with ulterior motives, other than making the economy more efficient in driving development, think that government should be in business to blunt the worst excesses of the market.

The problem and this shows up in inefficient state enterprises, which distort markets and drain the public coffers, is that government’s the world over key agenda is to stay in power. They do this through distributing patronage. Governments can not help themselves, faced with a choice between staying in power and profitable companies, they will choose the fòrmer over the latter...

That is how you find questionable investments – like the ice cooling plant on the shores of Lake Victoria not connected to the electricity grid or the banana project that has swallowed billions of shillings over the last decade and has not gone commercial or the fruit factory in eastern Uganda which is limping despite the vast bounty of fruit in the region …. And don’t get me started about Uganda Airlines.

To repeat myself, the main role of government is to create an enabling environment for business to thrive, without abrogating its responsibility to ensure that the economy works for its citizens not for a small urban elite or foreign interests.

Which brings us around to the closure of the internet last week. 

While we can not discount the threats to national security that government claimed, a national strategy would have helped the decision makers factor in the loss to the economy and judge the opportunity cost of taking one action or another. 

Other countries including the US have had elections in the last six months. They too had serious national security issues surrounding safeguarding their electoral processes. But because e-commerce is a multi-trillion business shutting down the internet was not an option. Instead the US has invested massive resources in online security as well as built collaborative  relationships with industry.

The US knows and appreciates that the internet is a major infrastructure, which while it does not own it, has found and continues to find ways to ensure it works for the American people and business.

It is not impossible. 

It is very possible that there are external threats to national security and they show themselves in one way or another everyday. But government has found a way to monitor and deter these – I hope, without shutting down our roads at every rumour or sign of danger.

A similar soft touch is required for 21st century technologies.

Thanks to the lock down last year the move towards e-commerce by our businesses has accelerated. That might have been the one silver lining that came out of the covid-19 pandemic.

"Just like our economy will be helped by better quality roads, railways and marine transport we need our internet to be fast, reliable and uninterrupted. Our competitiveness as a nation will rely on that more and more....

The Fourth Industrial Revolution (4IR) task force is completing its report, with a proposed strategy for the nation on how we can adopt and take advantage of the new technologies that are coming into common use. Maybe a clause about how to manage these around elections may be important.

NOW GIVE US MONEY NOT POSHO

In starts and fits, government has been distributing maize flour and beans to the vulnerable populations of Kampala and Wakiso.

The program that has been in motion since the beginning of April is still ongoing, despite earlier plans to complete in two weeks.

Apart from a few questions of quality, most recipients seem to have been grateful for the handout.

As the government slowly lifts the lock down, it will have to contend with the economic debris left behind.

The lock down, the restriction of movement and congregation, was intended to slow the rate of infection, which for all intents and purposes we have done very well.

At the time of writing this the number of recorded infections was shy of 300, about two months since we recorded our first case. Going by the rate of infection elsewhere we should have crossed the 1000-mark by now.

The lock down’s secondary reason was to allow government improve its capacity to test, track and treat eventual infections that will occur.

 " With the lifting of the lock down infections will rise and time will tell whether government was ready enough...

The lock down also brought economic activity to a near standstill, the net effect of this is that many businesses will shut down and jobs will be lost as we try to come to terms with the after effects of the lock down.

 

We are opening up to world where there is a lot of idle capacity but little demand to take this up.

So the New Vision for instance has seen its sales fall to below 20,000 copies a day, but the machinery and people to produce the paper are still largely in place.

Ideally what should happen is that as soon as people get back on the streets our sales jump back to pre-covid-19 levels immediately. That is unlikely to happen.

This scenario is being replicated across the economy, across all industries (except the telecommunications companies maybe).

During the global financial crisis that happened about a decade ago, western economies grappled with how to handle the situation.

The US sought to bail out its giant companies in industry and finance, the argument being they were too big to fail. That if they did fail, the ripple effect across the economy of lost productivity and job losses would be catastrophic.

Europe did a bit of that but emphasised more shoring up the social security net for its people.

The result,

while the US on paper came out of the slump faster, wealth inequalities widened and the most vulnerable people in that society were badly affected...

Europe was still in recovery mode by the time the Corona crisis came around, but recovery was more spread out among the population.

Given the experience of the western economies, it seems obvious that Uganda will have to thing deeper about social security if it is to come out of this crisis with some hope of future prosperity.

This week the US, through their USAID office here announced it will be handing out cash – sh92,000 a month for three months to a few thousand people around the country.

The money is supposed to help these vulnerable people get back on their feet during these hard times.

From a purely humanitarian standpoint it  is hard to argue against helping the least of our brothers.

However, plans to do this have come against two roadblocks. One, isn’t this a sure way to encourage dependency among our people. And secondly, how long can such programs be sustained.

Thankfully we need not go on guess work. The government has been running a pilot unconditional cash grant to the elderly, SAGE (Social Assistance Grants for Empowerment) for the last decade.

The government gave people over 65 were being given sh25,000 monthly in a program that expanded to 57 districts from less than 20.

A study done by UNICEF showed that these grants had had far reaching benefits not only to the recipients but their respective communities as well.

The benefits  included more employment, improved school enrollment and better feeding.

Its an expensive endevour to carry out all year around, that’s why government has raised the age requirement to 80 to spread the initiative across the country.

Beyond the feel good factor of helping the most vulnerable members of the society there is some hard economic sense for government to be making these handouts, especially now.   

"Most welfare programs in the western economies took off after the second world war. It was a way not only to aid the people but also to jump start industry, what is the point of manufacturing all those bicycles or shoes or plates if there is no one to buy them?....

So by helping the common man back on their feet they were creating a market for industry.  

The spillover into economic growth is quite obvious. There are studies which show such grants have a comparable return on investment as infrastructure.

Thankfully the tools to make direct payments have already been tested and explored under SAGE so delivery shouldn’t be a problem if we committed to the program tomorrow.

So instead of a handful of people benefitting from government relief aid more people will benefit.

You are giving me maize and beans,  thank you very much but I might need soap or charcoal or medicine more urgently now. If you give me money I will make those decisions for myself much more efficiently.

The question though, how is government going to afford it? Given the anaemic state of our coffers now there is no doubt that government would have to borrow to support such a program, but given that these monies will be used to support  local business it would have to be considered a good spending of tax payers money.

CORONA WILL REVEAL THE NAKED LEADERS

Billionaire investor Warren Buffett says that, “You will know who was swimming naked when the tide goes out.”

Buffett is usually referring to companies, which look solid in good times and when a crisis hits they are exposed as shells, riven with debt, no reserves and bloated with unnecessary costs.

But at the heart of it is a caution to “leaders’ of any sort at every level.

"As long as there is no crisis you can look good, but when all hell breaks loose the boys will be seperated from the men....

The corona epidemic is helping to sieve the grain from the chaff.

At the time of writing this, the US was fast reaching the 200,000 corona infections and had crossed the 5,000 death mark.

The US shouldn’t have been here but for lack of leadership.

Initially US President Donald Trump dismissed the impeding crisis as fear mongering by his political rivals, then he announced that chloroquin, the anti-malarial drug,  would sort it out and just last week promised that the pandemic will be handled in time for Easter.

The only reason he, unlike UK Premier Boris Johnson doesn’t have the Covid-19, the disease caused by the corona virus,  is that he has a particular aversion to shaking hands.

All the while his political base and the myriads who like to stick their heads in the sand, took him at face value and continued with life as usual, including throwing coming out spring parties on crowded beaches, just as the full extent of the pandemic was hitting western Europe.
Now the US’ infection rate is rising as if on steroids.

The challenge with the Corona virus is that full blow symptoms show after two weeks but a victim can have been spreading the virus for at least a week.

So the numbers we are seeing today are a the result of the past sins.

But back to the issue of leadership.
The district chairman of Bunyangabo this week showed us what our typical understanding of power is.

"Power, the ability to influence people and events, is a useful ingredient of leadership. But its most manifest sign in Uganda is in the people who have power’s ability to break the rules, to be above the law...

Forget the mealy mouthed self-help gurus who counsel “servant leadership”, our leaders measure their place on the ladder by how much they can get away with.

This includes powerful people breaking their loved ones out of quarantine, ignoring isolation procedures and the winner – seating in a hall with hundred others as parliament did last week, to complain that the governmnet is not taking their safety very seriously!

The Bunyagabu chairman would very well have got away with his crime, were it  not that he was recorded on video slapping the Resident District Commissioner (RDC) who was trying to enforce a presidential directive.

By the way the RDCis the president’s direct representative in the district, so to slap the RDC means …?

Country’s around the world are having to respond to the  pandemic, their ability to do so depends on how they have managed their affairs, how leadership has been exercised.

Western Europe’s economies are committing billions of dollars to keep people in work, offer some relief to those who are out of work and the most vulnerable members of their society.

They can afford to do this because they have built up credible reserves, kept their debt levels under co ntrol and built local resource mobilisation mechanisms to finance their ambitions.

"For a poor country like Uganda hopefully this pandemic will finally drive home the wisdom of a more determined drive to build tax revenues and mobilise savings....

Believe it or not we are not the worst. Some of our neighbours apart from being poor are burdened with huge open market debt, that apart frrom the grandstanding they will be hard pressed to live up to the pledges to their people.

The danger with the corona pandemic is that its not clear when it will come under control. As long as there is a corner of the globe that still has infected people, we will always be in danger of a re-emergence.
A vaccine may provide hope but realistic estimates are that this will not happen before the middle of next year.

"Stories of reinfection in China offers no solace. It was hoped that once contracted the virus some immunity may built up against a re-occurence but that does not seem to be true...

What this means is that the leaders who fall short will continue to be exposed, because to battle the corona pandemic will require consistent, unflinching and resolute leadership not flashes of brilliant grandstanding.

COVID19 IS GOING TO CHANGE EVERYTHING

When we come out the other side of the corona virus outbreak, as surely we will, it will have changed the way the global economy operates forever.

As a result of the corona pandemic 245,916 people have been infected, 88,465 have recovered and 10,048 have died.

The outbreak, which was first recorded in Wuhan in China has swept across the global, with Europe surpassing China in deaths due to the virus, last week.

Countries are taking increasingly harsher measure to check the virus in its tracks – restricting movement of people and goods, shutting down whole cities.  As result people are being encouraged to work from home, students too. Telecommunications and online service providers are experiencing an upsurge in the uptake of their services. This pandemic maybe the trigger to tip Africa into using less cash and electronic money, reconfiguring our economies for good.

"After the second world war with Europe burnt to the ground, the US assumed dominance of the world economy because their industrial capacity was largely untouched and only needed to be rejigged to producing for civilian use...

China last week announcing that they had not got no new infections in Wuhan, the early epicenter of the outbreak, suggests they may get back to work just as the western economies are shutting down their economies.

Already the factory of the world, we can expect China will scale up its capacity to produce to meet the world’s post Corona needs. Not China alone because South Korea, Taiwan and Japan are making significant progress in containing or rolling back the pandemic and they too will be ready to roll in a few.

The move towards the fourth industrial revolution in western economies will be sealed with this event. While the trend towards flexible hours was gathering momentum, it will be difficult to reverse the current practice especially as it is cost effective for both employers and employees.

This is interesting because it’s just like after the second world war, when people moved off the farm and into industry. As a result agriculture became mechanized, capital intensive and more productive. It needed to be, to feed the huge urban concentrations that emerged...

This time around as day time populations move away from the commercial business districts to the suburbs, one can expect a reconfiguring of commercial properties away from office to residential space.

Interestingly, Domino’s the giant pizza delivery chain the US is looking to hire an additional 10,000 delivery workers as people are going out less. Will we see in the future, staying in more as all goods and services can be delivered to hem – even interpersonal relationships?

Countries like Uganda, already struggling to get into the industrial revolution will buffeted massively by these new changes and may find themselves falling back rather than making progress in a post-corona world.

The reinstatement of borders is hampering trade, it is likely that the interest groups that will benefit from a return to economic nationalism will resist any attempts to throw borders open again. While this will benefit a powerful minority, while reversing the hopes of the majority of small economic actors for who the free trade across borders has thrown up numerous opportunities.

Keeping borders closed will also make industry nonviable, cementing a reliance on goods importation.

We will also be the poorer from the restrictions on labour movement. We get a lot of experts coming in from all over the world to fill gaps in our systems. Their inability to come here, because they can’t leave home or because we will impose restrictions on their entering the country, which is our right under the circumstances, means necessary technology transfers will not happen or at least not as smoothly as if they were here.

Relatedly the thousands we send out as immigrant workers will very well find nowhere to go. This will be a double loss because we will miss their remittances and they may very well become a nuisance here if they fail to find work.

One too can expect that development aid and foreign direct investment (FDI) flows will collapse in coming weeks, making it impossible for ongoing projects to continue.

This may be the silver lining that comes out of this whole crisis. That starved of foreign funds we are going to have to exercise our minds on how to mobilise local resources. While the economy is going to be depressed for a while and attempts to widen the tax base will not be met with open arms but clenched fists, the urgency of this will be more clear now.

"With enforced travel bans to our favourite foreign hospitals, the urgency of shifting resources into the health care system will become very evident now. The fat cats who fly out on tax payers’ money to have their niggling pains checked out will have to make do with our local health system....

We don’t know the half of what will happen to the economy after the dust settles on the corona virus pandemic. We can be sure things will not be the same again.