UHURU, ODINGA AND THE ELEPHANT IN THE ROOM

Kenya’s Supreme Court last week declared Uhuru Kenyatta the winner of the just concluded presidential elections.

Apart from some fracas in the parts of Kisumu, the heartland of the Luo tribe, the decision was accepted with welcome grace by the losers.

In a two horse race Kenyatta made it first past the post, scrapping through with about 8000 in addition to the 50%+1 vote required to avert a run off. Nearly-man Raila Odinga came in second.

"Odinga appealed the result but the Supreme Court was unanimous in its rejection of his plea and for all practical purposes, brought to a close a colourful political career...

It was hard to miss the historical symbolism of the election. Two scions of politically powerful families, contest for the highest office in the land like their fathers -- Jomo Kenyatta and Jaramogi Odinga , before them and the result is determined by Kikuyu-Luo tribal divide that their fathers nurtured and cemented decades ago.

Like everything about real life, the election was not an unqualified success and while Kenya, its neighbours and the world breathed a sigh of relief after its relatively peaceful completion, uncomfortable questions persist.

Tribalism, fifty years after independence continues to be the elephant in the room.

In the aftermath of the Rwanda genocide analysts argued that that kind of tribal bloodbath was unlikely in the ethnically diverse countries like Kenya.

The Kenyan post-election violence caused pause for thought however. The violence while short lived was intense and caught everyone flat footed. The tribal divisions don’t only flare up in the heat and excitement of elections but is evident in everyday life. But that these continue to persist in cosmopolitan Kenya and the region’s most active economy, has many scratching their heads for answers.

Or maybe not.

Kenya may end up being the region’s poster boy for those who say that tribes are perpetuated and sustained by politicians for their own selfish ends and that tribes, left on their own, do not play a major role other than serving as some identity for regulating marriage.

Even more interesting was the dark cloud that was the International Criminal Court (ICC) that was hanging over the whole process.

It has been suggested that the Kenyatta /Ruto camp turned the pending case against them on its head. They sold the indictments against them as foreign aggression and western capitals did not help matters by issuing veilded threats against backing Kenyatta & co. The Odinga camp’s unwillingness to try and seek some advantage in the situation left it easier for the perception of foreign intervention take hold.

But the  media too, ever conscious that one of their kind had also been indicted by the court, reined in their appetite for shoot-from-the-hip reporting  and incendiary commentary – they saved that for heckling foreign press who were gagging for chaos to erupt...

So where does this leave Kenya’s democracy.

The $140m-non-starter vote tallying system while an expensive embarrassment doesn’t bode ill for the country’s democratic process.

As one of my Kenyan friends bragged to me “We have now got over the novelty of changing presidents,” which is definitely a step in the right direction.

The other positive is that the result of the election was challenged in court, the court ruled the way it did and their verdict was accepted. The court case set an important precedent and provided important learning points which only serve to strengthen the process further.

You might have the most beautifully structured institutions but if they are not tested they are not worth the paper they are drawn up on. It’s these tested institutions that will defend the new lines drawn in the sand in the onward march of democracy.

"Democracy comes by evolution and not revolution. Progress is not a straight line profile. A test has been passed – not with flying colours, but the trajectory is still upward and the Kenya and the region can take comfort in that...

Tribalism will also be cause to have Kenyans’ looking nervously over their shoulders but one would like to think the ability for politicians to use it as a rallying point will wane as the country becomes more urbanized, intermarriages take place and the commercial interests supercede them.

Otherwise in the words of soon-to-be former Kenyan President Mwai Kibaki “Kazi iendelee”

SUBSIDIES NOT NECESSARILY THE ANSWER IN UGANDA’S PIONEER BUS SAGA

It’s been more than a month since the Pioneer Easy Bus Company was pulled off the streets. 

Interestingly, after only a year, their removal from the Kampala streets has caused a transport crisis. Investors in taxis probably sold out and left the business altogether and in the last year maybe no more new taxis joined the ranks, hence our current situation.

Pioneer found their fleet grounded by Uganda Revenue Authority (URA) due to an accumulated tax bill of sh8b.

This tax bill came about because Pioneer was allowed a twelve month holiday to pay the import duty on the buses. Maybe they thought URA would forget.

The case of the Pioneer Bus Company raises several issues about how business is done in this country.

No one will deny that Kampala is in dire need of an efficient public transport system, especially when this lack means that lawless taxis and irritating boda bodas rule our streets.

It does not take nano technology to work out that with an ever expanding day population and the sprawling growth of Kampala’s suburbs that our transportation needs are growing.

Up to this point we have been content to let public transport grow as it may and in the process we ended up getting held hostage by Uganda Taxi Owners and Drivers Association (UTODA).

So desperate were we to be rid of UTODA that Pioneer was like rain in the desert.

The business potential of running a transport service seems quite obvious. So calls for the Government to run the service are really unnecessary.

What the Government can do, however, is to open up the sector to businessmen in an orderly fashion, but not before carrying out a thorough study of environment, which study would serve as a basis for businessmen to make informed decisions of the viability of such an industry.

An open bidding process would be the logical progression that would attract time tested operators with the financial muscle to do the business. And, maybe, city authorities would give different routes to different service providers – as I know is the plan, instead of direct competition on the routes.

Government would have factored in the possibility of tax breaks and other concessions it would have made to the business operators to make the endeavor more commercially viable.

Government has its share of blame to carry but also the promoters of Pioneer have shown themselves to be clearly out of their depth on this deal.

It’s amazing how the populists who barely a year ago were criticising the Government for helping force UTODA off the streets are now the very same ones who are saying that Pioneer’s tax should be waived.

Government subsidies to private businessmen are always a sticky issue and are likely to cause more damage, which damage would be masked by the service provided however inefficiently, never mind that the distortion to the playing field may have discouraged more credible operators.

There has to be a coincidence of needs by the technocrats and businessmen.

The current mutual distrust between technocrats and businessmen has to be bridged.

Technocrats view businessmen as cunning and always angling for advantage at the expense of the public while businessmen see technocrats are bribe seeking good for nothing other than throwing up impediments to progress.

The preferred attitude would be for the public sector to see their role as enabling businessmen to thrive so they can pay more taxes, which taxes can be employed in improving the provision of public goods.

It is unlikely to happen soon.

In the Pioneer case such an attitude may have ensured that we have a better quality promoter of the project – never mind what country they are from, provided a transparent raft of incentives to ensure the business succeeds and cooperated with the businessmen to vault the inevitable challenges that come with doing business.

The solution to the Pioneer saga is not for government to take over the service, neither is to forgive the company the taxes that are rightfully due to the country, the solution will come with a sincere appreciation for a working service by the powers that be and a genuine search for the best possible provider available to get the job done.

IS UGANDA READY TO ALIGN WITH THE BRICS

Last week the organization of countries now known as the BRICS (Brazil Russia India China & South Africa) met in Durban.

The BRICS , a group of developing and newly industralised nations are looking to leverage their huge populations –almost half the world’s population at 3 billion, a combined GDP of $14 trillion – more than that of the US and combined foreign exchange reserves of a similar amount, to assume greater influence in world affairs.

South Africa joined the group in 2010, dwarfed in size by the other four. Her huge sub-Saharan hinterland is a mouth watering attraction, with its huge stockpiles of natural resources they need to power their industries and its nearly half a billion population that has been touted as the next frontier of economic boom.

The BRICS, with their plans to create a development bank to rival the World Bank, are not being shy in challenging the status quo.

A firm commitment on the creation of the development bank did not quite materialize but it was kept firmly at the top of the agenda.

Africa should take advantage of this opportunity with open hands if only because it will provide an alternative to the current situation but also because the BRIC countries are much nearer to us in our development trajectory they could provide useful lessons for our own ambitions.

But let us be under no illusion that the BRIC countries interest in Africa is out of any feeling of charity towards the continent, they need the continent’s resources for their industries and see our populations as potential markets, in that order.

The challenge for the continent is to use what we have learnt during our previous exploitation by foreigners to extract more value from the relationship.

Their larger economies mean that our relationship will always be tilted but one way to shift the advantage more towards ourselves is to strengthen our regional economic blocks.

This will not only prove more attractive to capital from their investors but will improve our bargaining power.

For instance we need to integrate the region’s infrastructure. For instance why is Uganda held hostage by Kenya because their route to the sea is the only one we use? Why have colonial disjointedness persisted so that for instance the communication between former Belgian colony DRC and Uganda formerly a British charge is nonexistent?

In fact one reason the continent is not well integrated between south and north is because of the poor infrastructure in our parts -- the middle part of the continent.

Easier said than done but the politicians of the continent need to look beyond their local interests and think continentally at best and regionally at worst.

This important because the critical cross border investments can only be effected with political backing.

Barring the ascendance to power of some crazed dictator, the region’s leaders are coming around – at least in mouthing it, to the importance of regional integration.

Sadly politicians are always behind the people’s ambitions. Thankfully the people know better than to wait for them to see the light. Africans are trading between borders despite the poor infrastructure and inter-govermental schizophrenia.

The BRICS present are good opportunity for the continent but it is largely up to us whether it is to our benefit or if history will repeat itself with the BRICS stripping us of our resources, shutting down our home grown industries and exploiting our markets.

UGANDA'S AGRICULTURE CHALLENGE

Uganda’s agriculture accounts for under 25% of the country’s economic output but at least two in three Ugandans rely on it for a livelihood.

You need to look no further to explain the poverty numbers of this country.

In simple terms for every ten shillings of output produced in Uganda three is shared by the majority or about 70% of the population. The remaining seven shillings are distributed among the remaining 30% of the population. A sure recipe for wealth and income inequalities.

At the bottom of the issue is that of low productivity of our farms, the equivalent output of an acre of land is relatively lower than other places in the world.

And the reasons our farmers are unproductive is because we have not graduated from rudimentary agricultural practices. Our agriculture is labour intensive, relies on rain, is carried out on increasingly smaller farm holdings using next to no fertilizer.

To redress this issue should be straight forward.

Improve agricultural practices, halt the fragmentation of land and preferably consolidate land holdings to create greater efficiencies by exploiting economies of scale.

For all our shouting for mechanization, using a tractor on less than an acre of land, which is about the size the majority of farmers eke a living from, is impractical and financially unviable.

President Yoweri Museveni’s announcement that the government is considering the scrapping of NAADS and the bolstering of cooperatives to aid the farmers, is borne of the frustration at the lack of improvements in the general welfare in rural Uganda.

With all fairness to NAADS it really wasn’t given a chance to do its thing, with the least of its worries in adequate financing.

We are hoping for a return to the co-operative model of yester year where not only did they provide a ready market for farmer harvests but also provided heavily discounted inputs and on credit.

But of greater importance is the resuscitation of the extension services function in the agriculture ministry. Capital is important for farmers but knowledge to improve their practices and constant mentoring would eventually lead to higher incomes anyway.

I am very skeptical of government programs, as a rule.

Governments care more about inputs – classrooms, health centers built because it looks good in manifestos and less about quantitative or qualitative outputs.

So if the intervention is going to be through privately owned and run cooperatives, that is a step in the right direction.

Government can help with training of officials and maybe providing auditing oversight, but to pour money into these structures would only guarantee their failure like many other well-meaning initiatives that have come before.

A politically expensive but critical initiative would be to tax all land, especially farm land. This will have the desired effect of getting people to work harder on the land, because defaulting could lead to confiscation and secondly, it would create a more vibrant land market, because those who can’t pay tax can sell it to people who will put more productive use to it.

For agriculture to become more productive there has to be more efficient land use. Agriculture that is more capital than labour intensive. With a population of 35 million we do not need 25 million farmers to feed us.

In the US at end of the Second World War there were 30 million farm jobs or 20% of the population were farmers,  now there are an estimated 1.3 million farm jobs for a population of 300 million Americans. The US is more than food sufficient.

Renew the cooperative movement to provide markets and tax the land to compel farmers to extract more and more value from their holdings and see productivity figures skyrocket.

Of course this is easier said than done but until we face up to the changes needed in rural Uganda our poverty figures will persist.