US-CHINA TRADE WAR BAD FOR ALL, LESSONS TO LEARN FROM

On Monday this week the US triggered a 25 percent increase in tariffs on $200b worth of goods from China. In retaliation China has also said it will raise tariffs on $60b worth of US imports starting at the beginning of June.

The trade relations between the two largest economies have been contentious for years with both sides accusing each other of unfair trade practices.

There will be real costs to the US and Chinese economies – estimated in hundreds and billions of dollars, but also to other economies around the world.

By definition trade wars affect the flow of trade across borders and regions, this has the knock on effect of reducing incomes and therefore the living standards of people on either side of the trade war.

As a trade war bites jobs are lost as businesses are shut down and to add insult to injury, commodity prices go up pushing affected populations deeper in the hole.

"In addition to encouraging inefficiencies in the market, with higher prices businesses that were previously uncompetitive are revived or started to fill the gaps. That would not be a bad thing – as they may create new jobs, but as soon as they are up and running the businesses then join hands to maintain the status quo – the trade war, so that they can continue to thrive. The consumer who pays more for often lesser quality, is always the loser in the end....

To illustrate the point imagine that Kampala introduced a tariff for matooke coming from outside the city. The first thing that will happen is that matooke prices will jump. While for a while people will pay higher prices, they will with time more likely shift to other substitutes unaffected by the tariff.

The matooke plantations of central and western Uganda will be forced to lower the price of their price until it doesn’t make sense – when the sale price is lower than the cost of production and they will look for other markets or convert the plantations to grow maize or cassava.

This will have several repercussions for the matooke connoisseurs of Kampala, not least of which the price of matooke will increase even further as supply dwindles, but will also lead to many of the jobs in the industry being lost – from the loaders and off-loaders, the matooke peelers and cooks and even the livestock which will have developed a taste for the peels will have to be fed alternatives, lowering their production as they acclimatize to the new diet.

If the tariff is kept higher for longer some people will try and convert valuable real estate in Kampala into matooke plantations, since the higher prices of the food may make it a viable proposition to convert valuable real estate to growing matooke.

These investors who will be making a killing, will gang up and create a lobby group which will resist any attempts to lower or remove the tariffs on matooke, dooming the good citizens of Kampala to more expensive, poor quality matooke for the foreseeable future.

Is it conceivable that people of Kampala can ditch matooke altogether for posho or cassava or sweet potatoes? Stranger things have happened.

The truth is that trade wars affect the majority and benefit a small minority, who then fight to maintain or aggravate the trade war in total disregard to the plight of the everyday man.

Look around us, whenever a company or industry is supported against competition, which is what a trade war is about, it is generally inefficient – charges higher for lower quality goods and even the said benefits of jobs and supporting suppliers go to a small connected population.

"In US President Donald Trump’s fight to shore up industry in his country, the higher tariffs are being paid for by his own citizens. The retaliatory tariffs that China has lined up target his key political constituents, who will suffer a double whammy...

China has emerged as a leading economy because it has found a way to produce anything cheaper and in huge quantities, hence keeping costs down, the result being an improvement in living standards even in the US.

The world is changing. Lower value manufacturing industry’s have been moving east steadily, as more developed western economy go up the scale of value addition, into the knowledge industries. Trump is trying to subvert this trend because it seems easier than to invest in retooling the countries education system for the knowledge industries.

China too will suffer as the US is the biggest market in the world with not even Europe able to suck up the surplus that would come with such a war. One can expect jobs will be lost there as factories close or scale down production.

They say that an eye for an eye makes everyone blind.

WHO WANTS TO BE PRESIDENT OF UGANDA?

In the last week Presidential aspirant Robert Kyagulanyi has done the smart thing to get himself a spokesperson. In my mind this is a serious declaration of intent.

But in the last week too I have been working on a project that looks back to the eighties and how governments have been planning for the country. My conclusion is that no one can pay me enough to be the president of this country of ours.

"This country faces many challenges but top of the list has to be translating economic growth into improved livelihoods for all Ugandans...

Economic growth is a given in this country. The economy has been growing consistently since 1985 when there was last a contraction in the economy. In that year the economy contracted by 3.3 percent.

Most people think that in order to improve service delivery we need to contain corruption. Which makes sense. Corruption not only deprives people of proper services but has the dual effect of concentrating resources in fewer and fewer hands, aggravating the issue of the wealth and income inequalities.

The Auditor General recently reported that as much sh485b went unaccounted for – a euphemism for stolen, from the government coffers. If that money was used to lay roads, it would tarmac more than 100 kms of road at a million dollars or sh4b a kilometer. Opening up a road, leave alone tarmacking one, has huge economic ripple effects allowing access to markets for both producers and suppliers.

But looked at against the bigger picture of a sh32trillion budget, the Auditor General’s figure accounts for 1.5 percent of the budget. Seen in this light one wonders whether corruption is the real problem in service delivery. Of course it is possible the Auditor General did not capture the full extent of the “eating” in government, so let us double the figure, triple it even and you are not yet at five percent of the budget.

One can argue too that the amount that is eaten even if it’s not a major part of the budget maybe funds for key components of the budget without which everything grinds to a halt. That’s fair.

"Corruption – using a person’s position for private gain illegally, should not be condoned at all but given the figures, one begins to wonder...

But as earlier stated the national budget this year was sh32trillion or in simpler terms the government ear marked sh800,000 to spend on every Ugandan in this financial year. This was supposed to take care of everything – security, roads, power generation, education, health etc etc. of this amount half of it or sh400,000 went to servicing debt, so effectively the government planned to spend sh400,000 per Ugandan for the whole year.

If it hasn’t struck you yet, imagine living on sh400,000 a year or about a thousand shillings  or about $29 cents a day?

Finland spends the equivalent of sh40m per year on its citizens, Norway sh107m and even neighbours South Africa earmark sh77m per citizen annually.

Rational governments in this position can do one of two things. Either reduce on the people it is servicing – cut UPE, shut down free health care and rationalise police stations to serve the tax payers and ignore the rest; Or they can push for higher tax collections by charging higher taxes or roping in more people in the tax paying bracket.

That is why the question, Who wants to be the president of Uganda?

To be the president of Uganda you have to promise an improvement in living standards. Given the pitiful purse we now have that is not going to happen soon.

"In a democracy where you have to lean towards populism to win the vote, a campaign based on scaling back government programs will be a losing strategy, as will a campaign based on taxing more and more people – as it stands now only about two million of the 11 million workforce pay taxes on their incomes....

If I harbored presidential ambitions I would be agitating for government to widen the tax base, effectively put them under pressure to collect more taxes. I would achieve two things with this strategy, one, the government would become more unpopular – who wants to pay taxes and two, they would have done the heavy lifting for me, so that when I take over I can use the expanded treasury to improve service delivery.

QED!

LET US NOT LIE OURSELVES

Lately there has been a gathering momentum for government to restart state enterprises, everything from Uganda Airlines to the Uganda Commercial Bank and everything in between.

I have my own thoughts about the motives around this drive, but I will take its proponents’ reason at face value.

They argue, not necessarily in this order, that this is to curb the outflow of money from the economy, that the government needs to be more involved in directing the private sector, that it will create more jobs for Ugandans and markets for local suppliers among others. I am sure you will remind me if I have missed any.

"It is true of course that foreign investors repatriate their profits to their home bases every so often. First of all why should we be surprised or even offended by this? By definition the investors do not live in Uganda and need to have their returns sent to them where they are...

Secondly, how much they repatriate maybe over exaggerated.

Companies through the course of their business earn money, revenue, from which they meet their expenses – some foreign and hopefully a lot local, the net is profit. His profit in a competitive sector is about 20 percent of total revenues or less. This profit is taxed at a rate of 30 percent by the government. The rest of the money is the owners’ to do as he pleases, his payment for risking his capital. If they are interested in a sustainable business most of this money is ploughed right back into the local business and some of it is repatriated, about five percent or less of total revenues.

So you have to wonder about these massive outflows to themselves that people accuse foreign investors of.

Of course what is true is that there maybe huge payments to foreign suppliers, but that is a genuine cost of doing business. So for instance a bank may spend a lot of money on software or a telecommunications company on hardware or a manufacturer on machinery and chemicals.

The New Vision for instance last year out of revenues of Sh90b spent sh16.8b on raw materials – mostly imported paper, inks and other printing inputs. This is about a fifth of all its revenues. It paid taxes of sh1.8b and total dividend of sh1.9b or about two percent of total revenues. About half of this dividend payout went to the government as the majority shareholder.

And by the way according to the Auditor General’s report, of the twelve profitable state enterprises, only New Vision declared a dividend to its owner.

The point is that if these companies are repatriating funds, on closer scrutiny you may find most of those are costs of doing business than returns to its owners.

By logical extension if you set up local companies in the same industries in order to keep in business they will have to source a lot of their materials abroad until local alternatives are available. So they will send out just as much money as their “evil” foreign counterparts.

If you are in a competitive industry the local alternative to meets your requirements is always the best to ensure you compete favourably. A prudent businessmen would not source abroad what he can get locally.

"It was hilarious recently during an online discussion that someone suggested that the entrance of Uganda Airlines would lower the cost of travel as they will be charging in Uganda shillings. I argued that, that would not be good business sense if most of their inputs from ground fees to accreditation to international regulators to air space rights are charged in hard currency. I never heard back from him....

The argument that government should be more involved in the economy is beyond reproach.

However, they need not do that by going into business themselves. Governments set the environment for business through regulation, fiscal policy and enforcement.

In the case of Uganda Airlines it is probably cheaper for government to go to British Airways or Emirates or Brussels Airlines and negotiate a cheaper rate for people flying to Uganda (because we have it in our heads that people are not coming here because of expensive tickets!) than starting our own airline. It may take reducing taxes of them landing in Uganda, cheaper aviation fuel or giving them tax free status here, if we believe expensive fares are keeping tourists away.

And finally that state enterprises create jobs for locals. Sometimes I don’t know whether to cry or laugh. A cursory look around Uganda’s labour market shows that up to 90 percent or even more, of the workers around are Ugandans – even in the 100 percent foreign companies. So the issue of Ugandans not being employed in foreign companies does not stand up to scrutiny.

And secondly a company’s labour requirements are dictated by the market’s needs. If the market demands more of your product you hire more or if not you cut your labour force. Unless you are suggesting that government will employ or keep people on the payroll when they are doing nothing? 

Wouldn’t it be better if government just used tax payer’s money to pay unemployment benefits than distort markets and doom the economy to certain decline?

"Taking the proponents of this new “Move to the left” at their word, I suspect a lack of understanding of how business works and therefore how to improve the business environment....

The new boss of the Uganda Development Corporation (UIA) a former senior official at the National Planning Authority (NPA) Patrick Birungi was reported to have admitted recently that in the few days he has been at UDC he has learnt that it is much harder to do than plan.

Foreign investors are not angels. It may very well be some of them have devised dodges around our tax system. My feeling is that their greater premium on reputation is such that they are more likely than not to play by the rules than break them. A damaged reputation for them, more than for us, can cost them a lot of money.

And when they do break the rules, its often due to our negligence or in connivance with our own people. Let us fix those loopholes before we throw this baby out with the bath water.

WE ARE RICH, SPORTS PESA SUPPORTS THE CASE

As I agonized through the Manchester United -Everton match last weekend it struck me that the Everton shirt sponsor was sports betting house SportsPesa.

To distract myself from our dismal performance I looked up SportsPesa. The betting house is headquartered in Kenya with operations in Kenya, Tanzania, South Africa, the Isle of Man and the UK. Then I checked what they paid for the shirt sponsorship with Everton and it came down to £9.6m (sh46b).

As if that is not enough they have sponsorship deals with English premier league teams Arsenal, Hull City and Southampton, the Kenya national soccer team the Harambe stars, as well as league teams Gor Mahia and AFC Leopards and in Tanzania Simba and Young Africans.

In addition, they sponsor Kenya’s rugby sevens team, boxing, motorsport, athletics and golf. And they sponsor 100 grassroots teams around Nairobi for good measure.

I was amazed that a company with the bulk of its operations in Africa is able to splurge so much money, they must be pulling in big revenues.

There is a lot of controversy surrounding gambling and in our parts of the world, sports betting in particular. Beyond the moral questions, it is a drain on many youth’s earnings, the possibility of hitting the jackpot, sucking them in, addicting them in many instances and impoverishing them altogether.

Because the truth is in any betting game the odds are stacked in favour of the house. Punters may win once or twice but most of the time, the majority of the time, they will lose. And when you spread this among dozens, hundreds and even thousands of bettors it looks a sure deal for the betting houses that they will make money most times.

All that being said, what really got me thinking is that a company whose business is predominantly in Africa can throw off enough revenues to sponsor premier league teams.

That’s like saying your poor relative’s nephew offering to pay the fees of your urban schooling children until they are done with school. And even then I fear I understate the fact.

In my mind it throws out once and for all the notion that we are poor as a continent or its constituent countries, and firms up my belief that the problem is only that we have not aggregated our resources in meaningful sums to effect local change...

Think about it, the people in the betting houses, at least here in Uganda, are not predominantly your middle class or upper class people, but people who park their boda bodas outside the betting houses on match day or the night watchman coming to try out his luck or the street vendor who has made some money and hoping to multiply it before he goes home. Real bottom of the pyramid types.

The difference between SportsPesa and the rest of us is that they have a structure which can tap into these funds and funnel them into the business to the benefit of the shareholders and the token sponsorships and charities they support.

The betting houses here in Uganda are not too shabby either. In the recent economic slowdown sports betting remained a growth industry, giving many an exciting option to which they could divert their hard earned shillings.

SportsPesa was a startling example, but we see it over and over again. Most recently e-commerce firm Jumia sold shares on the New York Stock Exchange and raised about $200m in so doing. Most if not all their business is generated on the continent. Name any other multinational and it’s the same thing be they in beverages, telecommunications, finance or manufacturing.

They got organized to deliver a product or service and are laughing all the way to the bank.

True there are structural challenges, bureaucratic impediments and a deficient finance ecosystem but it is clear that our fate is not beyond salvage.

But first we have to get our mentality in order. Business success does not come by mistake, if it has, be sure it is not durable.

A few things to think about.

A business is successful because it delivers a good or service that is in demand in a cost effective way, that is that it sells its wares for more than the cost of producing and distributing them. Profit is a bye product of a job well done. So the focus should always be on delivering good products or service.

Secondly business owners need to decide early on in which category their business is in, defined by the founder’s mission. A business is started for four basic reasons – to sustain the lifestyle of the owners, to pass on to the next generation, to sell it to the market or to satisfy some overarching philosophy.

In the first two cases there is no incentive to grow beyond the needs of self and family, which puts a cap on the business growth potential. In the latter two cases the business owners have a huge incentive to organize, formalize their business not only so it can expand but so too, it can fetch a good price at the time of sale.

"The latter two are bigger missions which if the founders are bought into, means they will be able to weather the storms, overcome the speed bumps of setting up any enterprise. In the former two the staying power is not as great. Maybe explains why while Uganda is one of the most entrepreneurial countries in the world the attrition rate by the time of the first birthday for most businesses, is almost total...

On an individual and even national basis we need to understand and appreciate that there is a wealth of resources available here that we haven’t even begun to tap into, this is even before we start thinking of mining our natural endowments out of the ground.

So yes, if we are so keen on ensuring we get a better shake on the exploitation of our own resources rather than call for the throwing up of barriers against foreign agents we would be doing ourselves a world of good if we got organized first.

DOES IT MATTER THAT JUMIA IS AN AFRICAN COMPANY?

So last week e-commerce firm Jumia listed on the New York Stock Exchange. One of their biggest selling points is that they were an African company.

However, this kicked up a storm with some people pointing out that while the company’s business is all done in Africa they have French founders, they are domiciled in Germany and their technical support is located in Portugal or something like that.

My first thought was, they wouldn’t have used “African company" in their prospectus if it didn’t sell and given they do all their business in Africa why should we begrudge them claiming they are an African company?

Then I learnt that the funding ecosystem that is dominated by white males tend to take mental short cuts. That the danger of Jumia claiming to be African has set a dangerous standard for these financiers, who will look for companies run by white males in Africa to fund, ignoring in the large part, efforts by Africans trying to start and scale up their own companies.

Put that way I begun to see why we had our underwear in a twist but I also thought there were valuable lessons to take from the experience.

One, that there is a lot of money out there – more than we can conceive, desperately searching for a return. It was reported that up to this point Jumia had raised $800m from investors. That is about sh3trillion or more money than we spend on roads in Uganda.

But also that this money has a price. The founders of Jumia in getting this money had their interest in the company diluted to under 9.8 percent, I have seen some reports that between the two of them they owned two percent of the company at the time of listing. By the time of the Initial Public Offering (IPO) they clearly were not in control of “their” company.

At the time of the IPO South Africa’s MTN holding was the single largest investor in the company with 29.7 percent of the company the rest of the company was shared about 60 percent by investors from Germany, Belgium, France and Luxembourg and 9.8 percent was held by “others” which probably means some of the workers at the company.

"The founders could have refused to take in other investors and try and bootstrap the company from its own resources or rely on banks loans and the reality today would have been that Jumia would not have been as big as it is today or the company would be dead by now. It reached a valuation of $3b during its first days of trading on the NYSE....

So the question has to be for the African governments and businesses, how do we tap into these huge funds sloshing about to scale up our businesses?

African governments because companies create jobs, pay taxes and directly and indirectly enhance living standards of citizens; companies because growth is a survival strategy, if as a business you are not growing you are dying or will soon be killed by the competition.

I think first off governments need to create an environment in which local resources can be mobilized and aggregated into meaningful sums. Then they have to create an environment in which these funds can be deployed profitably, preferably a liberalized economy with the appropriate incentives for businesses to grow and thrive. And finally the government has to create the environment in which foreign funds can enter the country find bankable businesses and make an adequate return.

And somewhere in between we need to recognize that we cannot have our cake and eat it. That we cannot keep all the opportunities, even within our borders, to ourselves. That there will be people with more exposure or access to finance who come around, see the opportunity, that is passing us by or we are too lazy to do the work to actualize, take it up and run with it.

But we forget too that there those who visit see an opportunity and fail anyway. We fixate on the successes but for every Jumia there hundreds if not thousands of failures.

In addition, we need to formalize our businesses. Formalisation not only makes it easy to assess the business from afar but also represents a mitigation of the risk to the financier wanting to invest.

If we could do this one thing we would be shocked how much money is lying around, even here in our poverty stricken nation, that is just looking for a home.

Even if you are loss making just having clear records of the operations and basic systems in place are value in themselves. Jumia made losses the last two years but was still able to generate huge demand and raise $200m.

I think Jumia were within their rights to call themselves an African country and objections to that are largely moral. It would help if they were domiciled in Africa, employed African techies on the continent but thet they didn’t is probably a function of the gaps on the continent and were demanded by their financiers.

I am learning too that in the new world of the fourth industrial revolution the days of a company being situated in one country are dead and gone. It been happening for a while already but now with even a greater pace, companies have their operations spread across countries, even continents, and their financing and staffing requirements are just as diverse.

That’s the reality and as countries and businesses we ignore this to our own detriment.

UGANDA REGULATOR NEEDS LONG TERM VIEW OF THE ELECTRICITY SECTOR

The Electricity Regulatory Authority (ERA) recently set new targets for power distributor Umeme, which will have far reaching implications on the efficiency and viability of the sector as a whole.

ERA set as part of its targets the reduction of power losses from just under 14 percent currently to 11.47 percent over the next five years to 2023.

In addition, the regulator requires that Umeme collect 99.9 percent of energy billed from current levels of 99.62 percent.

This is as it should be. The reduction in power losses has been a constant struggle for Umeme. Power losses are divided between commercial and technical losses.

In the former instance this is from people who consume power and do not pay – less of a problem now because of pre-paid metering. The main culprits in this case are government institutions. 

Technical losses are a result of poor installations, substandard equipment and the natural losses that occur in moving electricity current from A to point B.

"Improved bill collection has been the biggest revelation of the Umeme concession. Under the old Uganda Electricity Board (UEB) barely half the money for power billed was collected. But it is still important to keep Umeme on its toes to collect all the billed energy, because if they don’t these losses show up as higher tariffs for the rest of the law abiding consumers.

However, while setting those targets ERA then proceeded to tie one hand behind Umeme’s back.

As part of its targets ERA restricted Umeme to Distribution Operation and Maintenance Costs (DOMC) of not more than $50m annually over the next six years up to 2025.

Is that reasonable? Maybe not when viewed against the $60m they spent last year and the $70m they intended to splurge on the network this year.

Because it costs money to keep losses down, including overhauling the network and ensure collections, which includes rolling out more prepaid meters.

This year with the almost 800MW coming on line with the commissioning of Isimba and Karuma dams one can expect Umeme will invest more in the network and with a bigger network we can expect higher DOMC.

But ERA argues that the distributor is asking for too much money, that a newer network which has built over the last 14 years should have lower costs. They say that Umeme has been allowed $41.8m this year let them utilize it and show it is inadequate.

Which would be a fair point if you were talking about stocking tomatoes at the market stall or offals at the butchery.

"In the last decade of so we have come to expect a certain level of service from Umeme. When the transformer in our neighbourhood blows up we are less willing to wait weeks for a replacement. We may give Umeme a day at most to cause the replacement. By cutting back on DOMC don’t be surprised if Umeme’s performance slips because it is struggling to keep up withal the demands...

But beyond our immediate discomfort this kind of attitude by ERA may mean that inadequate maintenance of the network will feed off itself until years from now the distributor may ask for $100m a year in DOMC, a situation that can be averted by adequately providing now.

ERA does this under some misguided attempt to keep tariffs low. A popular move but we all know that what is popular is not always right.

The problem with these artificial caps on goods and services is that a time comes when the pressure to lift the pressure to remove them finally is unbearable prices will not climb in a nice orderly fashion but jump causing more pain to consumers than if we had allowed them to rise steadily over time.

We saw it with their adamance not to allow UgandaElectricity Generation Company Ltd (UEGCL) to include depreciation, amortization and return on investment to the tariff they charge. This is in effect means that when we need to build new generation capacity we have to run to government because UEGCL is not financially sound enough to play a meaningful role in developing the country power generation capacity.

"I don’t know anyone who doesn’t want cheap power, but let us not keep it artificially low and jeopardize the long term viability of the sector....

ERA needs to take a long term view of the sector, build it towards self-sufficiency without compromising its attractiveness as an investment.

WE NEED TO STOP BEING CASUAL

Last week the kidnap of US tourist Kimberly Sue Endecott and her tour guide Jean Paul Mirenge came to a happy ending with their release from captivity, apparently unscathed.

For people in the industry it was a week of sheer terror. It was bad enough that the two were kidnapped but if in addition anything more untoward had happened to them, the industry was bound to suffer for a while to come.

We have been there before. In 1999 eight tourists and their guide were killed by suspected Interahamwe rebels in the Bwindi Impenetrable Forest National Park. Subsequently the park was shut down for four months. In that year tourist numbers to the park collapsed by almost half to 2,111 from about 3,500 in 1998.

It took another three years for numbers to recover to their pre-Bwindi murders.

One Jean Paul Bizimana was convicted in 2006 for the crime and sentenced to 15 years.

In 2001, 11 students of the Jimmy Sekasi Institute were killed during a tour of the Murchison Falls National Park by the Lord’s Resistance Army (LRA) rebels. Sekasi himself was also on the trip and was killed too. This event put paid to the Saraova group’s investment in Paraa Lodge and shut down the park for all practical purposes.

"Tourism is the country’s single largest foreign exchange earner and growing. In 2018 there were about 1.8 million visitors to Uganda brining in revenues of more than $1.5b....

Some determined if sporadic marketing, of the country has seen tourist numbers rise to current levels form 1.1 million a decade ago according to eth Uganda Bureau of Statistics (UBOS). Investment has followed suit with bed’s in the hotel industry up to 100,000 today.  

Ahead of the Commonwealth Head’s of Government Meeting (CHOGM) in 2007 we were scrambling to get 4,000 hotel beds of the quality befitting delegates of the event. Today a cursory count of the beds in the 3-to-5-s tar hotel range shows we have about doubled that figure since. And industry players will report there is still more room for quality hotels in the industry.

What we have invested so far and the industry’s long term potential demands that we treat the industry with a little more respect.

Reports following the recent kidnap suggest a casualness around our national parks that is not commensurate with the aforementioned facts.

For starters it was reported that at the time of her kidnap, as she went out for an evening tour of the Queen Elizabeth National, she went out without an armed guide. 

How does a tourist decide whether they will or will not go along with a guide? And we allow it? Was this done out of some sense of inferiority, pandering to a white tourist? Who knows better the lay of the land?

This casualness is even more disturbing when it turns out that kidnaps of locals in the area for ransom are a regular occurrence.

If we are this casual about this how much more have we missed around the security of these parks and sites?

Uganda is not situated in the ideal location. All around us we have neighbours whose security has broken down, do not wish us well or have their own internal contradictions spilling over into our space.

Unfortunately for us, our best attractions are located or straddle our borders with these same 

countries.

It doesn’t take a rocket scientist to work out that the odds are it’s only a matter of time before something bad happens there.

I am sure the minimum security presence or precautions we take have dissuaded criminals from trying anything or even prevented instances like the one that has h=just happened but as one security chief once said, with terrorism you just need to make one mistake and they succeed. The security in our national parks and tourist site should be treated with such vigilance.

There is a point to be made for non-intrusive security so that the tourists can enjoy their holiday – but non-intrusive does not mean absence.

Some investors may even be against new measures to beef up security around their operations, as they would take away from their bottom line, but the government which has a better view of the damage one freak occurrence can cost, must insist and if the operators think they can not comply they may be shown the door.

And these enhanced measures should not only be for foreign guests. In fact local tourists should be treated with sifter kid gloves.

"In this world of internet connectivity, a local visitor who gets into trouble can get the message out to the world just as fast as a foreign visitor. True the global news networks will not give it as much play, if any, unlike if it were a foreign tourist, but if you think about it Ugandans are often asked for recommendations of local sites by foreign visitors. A bad experience for one Ugandan may have just as debilitating an effect, as third party endorsements more than glitzy advertising are what people pay attention to...

The lesson of the recent kidnap is that given the tourism sector’s current and long term importance to the economy it cannot be business as usual.

The kind of numbers we are seeing coming to patronize our shores have been painstakingly built over decades but they can be decimated with one small misstep. Let us get serious.