EVEN GOING THROUGH THE MOTIONS CEMENTS GOOD HABITS

Many years ago I learnt with some shock that prefects are subjected to an election in Ugandan schools. That students who presented themselves for various posts were vetted by the staff and the nominees would be put to the vote, including a week of campaigning around the school.

In Kenya then – I am not sure things have changed since, prefects were appointed by the staff. Prior to the announcement

the intending prefects would go around trying to ingratiate themselves with teachers with disgusting displays of obsequiousness that did not stop at carrying ladies hand bags, making unnecessary visits to offices and public shows of obedience that were nauseating to witness....

In theory the Ugandan prefects therefore had it at the back of their minds that they were to represent the interests of the students as well as the best interests of the institution. It took all their intelligence to walk the tight rope between the staff and student body’s demands.

In Kenya of course the prefects were often an extension of the school administration, a less intellectually taxing assignment.

A study to show the relative effectiveness of both systems in maintaining school discipline in the near term and in inculcating a democratic culture in the long term would make for interesting reading.

Which brings us to the by elections in Luwero this week.

By the time of reading this the results must be known and congratulations to whoever was first to the post.

The by election became necessary after the Woman MP Brenda Nabukenya lost a petition against her victory in 2011. In the last several weeks in what was largely a two horse race between DP’s Nabukenya and NRM’s flag bearer Rebecca Nalwanga the ruling party and opposition have thrown everything including the kitchen sink at each other.

(Editor's note, Brenda Nabukenya won the election)

The drama aside it is safe to say that we now expect to vote for our public officials every so often. We saw on TV footage of the election materials being ferried to polling stations and authorities only stopping short of biting their tongues in assuring the public that the process will proceed flawlessly.

One may thumb their nose at the whole process before, during and after the polls have opened but I think it is commendable that we find something amiss if there were no elections.

Elections are only one albeit an important pillar of any democratic process. As a society we need to mature to the point where we go beyond the motions but ensure the rules are followed, elected officials are held accountable and more importantly that people who choose different political affiliations are not ostracised, gagged or mistreated.

In going through the political processes we need to recognise that there will be a day after that we will have to return to our jobs, go to the market and attend church with members of the rival camps, that the elections are not the be-all and end-all of our lives.

We take it for granted but we have come quite some way from 40-, 20- even 10-years ago in appreciating the above facts.

"It is delusional to believe that just because we have a constitution that spells out how we should conduct ourselves that we will immediately sublimate from our previous base instincts to more civil behaviour. It is a work in progress....

What we need to focus on is staying the course, riding the setbacks and capitalising on the gains we have made.

Critics may say we are just going through the motions but that too can cement some good behaviour.

THERE IS A SUCKER BORN EVERY MINUTE

Last week the promoter of Telexfree, Uganda's latest Ponzi scheme, was arrested by police and charged with perpetuating fraud.

According to reports the scammers had roped in hundreds of gullible Ugandans, with one victim claiming he had staked $350,000 (sh910m) in the hope of making up to 20% a month on his money!

Assuming these returns were to materialize it means this hapless victim would have been doubling his money every four months. So if he loaded his account on January 1st by Christmas he would be looking at an account balance of $2.8m -- assuming no withdrawals.

Was this a fantastic deal or was this a fantastic deal? Murphy's law goes that, if something is too good to be true it is (too good to be true).

Also in the same week Professor Augustus Nuwagaba explained in this paper that among other things more people are not emerging from poverty for lack of financial literacy. Financial literacy allows one to not only keep the money they earn but also enables them to make that money work for them.

So if for instance one earns a million shillings a year and saves sh100,000 but can they grow that money by deploying it in profitable endeavors?

In order to get optimal returns for ones money one has to know what is an acceptable return in your context. In the more mature economies single digit returns are laudable, in Uganda by placing money in Treasury bills or bonds one can make up to 12% annually. That should serve as a useful indicator of what is possible or not.

Then one has to be familiar with how the company makes its money, the costs the company incurs, how it creates value and whether their business model is sustainable under competition.

For the life of me I couldn't work out how Telexfree was making money. The theory was that they would place a number of ads on a website and they would get paid. I guess the thinking was that they would be paid per click. But the clicks can't be constant every month so how could the promoters guarantee a constant return? And why would someone else need other people to do it for him and share the profit, why not hire a few dozen eager kids to do it instead and pocket more of the profit? one of the red flags of these scams Is there are often people willing to share in their good fortune out of the goodness of their hearts!

But on the other hand this kind of gullibility is not an inherent flaw in our psychs as Ugandans. It is part of the human condition that we will always be susceptible to making easy money,  partly because making genuine money takes time and discipline.

As human beings Our minds are wired to simplify the bigger picture. To find shortcuts to an intended objective. So we read that so-and-so makes a few millions from his real estate business and our conclusion is that he is lucky, that is easy money. We however are seeing the finished product. We don't explore the work that they put in, the frequent trips to the site, the sleepless nights spent wondering whether they would meet loan obligations and the months even years of forgoing good cloths, a new car or more trips abroad to build the business.

But more importantly we think making money is about what we do, but the best of them know its more about how they think more than what they do that makes he difference between being financially secure or blowing up their money.

So for example whereas us mere mortals place a high premium on cash, the genuine

rich man is keen to convert the money as it comes in into incoming generating assets. They are willing to forgo the fat bank account today for a stronger asset base that will keep throwing off cash well into the future. Making money work for them.

Not to kick a man while he is down, but our man -- its invariably men who are hit in these high risk high return scams, who put down nearly a billion shillings on Telexfree clearly does not have the mentality of a rich man, which begs the question, how did he make the money in the first place?

CRIMINALIZING HIV TRANSMISSION COUNTERPRODUCTIVE

The passing into Law last week of the HIV Prevention & Control Bill 2010 while trying to control the HIV pandemic may fuel instead of stall the spread of the virus.

The promoters of bill sought to create a legal framework for the prevention and control of HIV, disclosure of sero-status to reduce transmission, provision of testing and counseling services and prescribing penalties for intentional transmission of HIV.

On the surface of it the motives behind the bill are noble even laudable but we know that even the road to hell is paved with good intentions.

One sees this bill as knee jerk reaction to the recent increases in HIV prevalence after the country had for many years registered consistent success in slowing the rate of new infections.

Two of the most controversial clauses criminalize the transmission of HIV. Clause 39 seeks to penalize anyone who "attempts to transmit HIV" to another person to a fine or/and upto five years behind bars, while clause 41 goes after people who "willfully and intentionally transmit HIV" to a fine or/and imprisonment of up to 10 years.

The major danger with this is that it stigmatizes pele with the virus, a throw back to the early days of the pandemic when, driven by fear, societies were most likely to deny the existence of the challenge at best or ostracize victims entirely.

Uganda, hobbled by a lack of resources in the 1980s determined that the best thing was to be open about the problem even though it might have affected the economy in lost earnings from tourism for example. The net out come was that Uganda came to grips with the pandemic long before our more conservative neighbours allowing us to roll back its deadly advance.

Once resources were available widespread testing for HIV helped in helping people access treatment and alter their behavior.

In determining that a criminal act has been committed this new law presupposes that the one trying to infect knows their HIV-status or at least that the law will be more punitive if it can be proved that one knew they were carrying the virus and indulged in risky sexual behavior.

This might have the effect on discouraging people for going for testing in an effort to prevent from future liability under this law.

If this is the outcome it would be a significant step backward in the war against AIDS. It has been an uphill task to get people to voluntarily present themselves for testing the last thing we need is for that momentum to be slowed or reversed altogether.

One can understand the desire to criminalize transmission of the virus than say transmitting Other sexually transmitted infections or cholera or Ebola. In sub- Saharan Africa nine in ten infections are through sexual intercourse, it therefore threatens our need to procreate and also probably the only source of pleasure for the majority of people, dare I say.

But we know that not all people carrying the virus contracted it through immoral behavior and so deserve their fate, as the hypocritical moralists among us maintain. Some are children, victims of sexual violence or contracted it through blood transfusion. But closer to home, women who are largely not in control of their sexuality may fall victim to this because all pregnant women are tested for the virus and their significant others may accuse them of infecting them, as the technology to know who infected who has not been developed.

It does not help that HIV transmission has been criminalizes in the west so the opposition to these kind of laws sound like voices in the wilderness.

Advances in HIV research mean that infection is no longer a death sentence, with life expectancy of victims now up to as high as 75. But in order for those infected to be treated effectively they need to test as soon as possible. Stigmatizing them only makes this that more difficult.

Clearly fear is driving this kind of legislation. The only way to combat fear is through knowledge, as the successful campaign against the epidemic showed in the 1980s. This is not an abstract concept to us in Uganda we know this through hard experience. 

It sounds counter intuitive but knowledge rather than punitive measures are definitely where the continued gains against HIV will be made.

BOKO HARAM SYMPTOM OF A LARGER PROBLEM

With the abduction of 200 school girls last month and the threats by the group's leader that it will sell them into slavery or marry them off, Nigerian rebel group Boko Haram have become he new poster boys of world terrorism.

The group which is actually called "the Congregation of the People of Tradition for Proselytism and Jihad"  was formed in 2002 and operates in the north eastern parts of Nigeria. Boko Haram is a Hausa nickname that loosely means that they reject western education.

The group while claiming it wants to bring under Sharia law the region it operates in, has not been averse to bombing mosques and killing civilians indiscriminately.

This group is a painful throw back to our own Lord's Resistance Army (LRA) who initially claimed they wanted to overthrow the government and rule Uganda by the ten commandments. The kidnap last month of the girls was not unlike the 1996 abduction of 139 girls from St Mary's College - Aboke by the LRA. A hundred of the girls were released after deputy headmistress Sister Rachel chased the retreating rebels into the bush and negotiated for their return.

Clearly not only did the abducted Nigerian girls not have a sister Rachel but Lagos, probably out of embarrassment, remained silent about the abduction with president Goodwill Johnson coming out after two weeks to speak publicly on the matter.

But there are also reports that the when intelligence was received that the group was turning towards militarism to further its goals the security forces either turned a blind eye or dragged their feet in acting on the information, that by the time the group went fully violent in 2009 Lagos was caught flat footed.

Our own experience with anti insurgency operations is that they quickly get messy as local populations get caught in the crossfire and their allegiances are tested by both sides, but rapid response times are critical against highly mobile rebel movements -- Boko Haram whiz around on motorbikes.

But drilling deeper these kind of insurgencies happen or are sustained in communities where poverty is predominant.

Last month after rebasing its statistics Nigeria announced that it was now Africa's largest economy with a GDP of $510b. But the continent's most populous nation, which derives nine in ten dollars of export income from oil and has been bedeviled by bad government since independence, has huge wealth disparities among its people with eye popping opulence on one side of the pendulum and sub human poverty among almost half it's population on the other hand.

Economic growth makes good headlines for politicians but the equitable distribution of this wealth among its people is the more telling statistic in terms of national stability. In fact great wealth disparities in a country are an indictment on the government of the day. Wide income inequalities suggest governments are unable to not only distribute the economy's growing wealth by providing social services and physical infrastructure and in so doing creating an environment for more people to climb up the social ladder

To the extent that the people see no hope for advancement is the extent to which they will clutch at straws, even insurgency, to provide for their families.

An insurgency can not be sustained without people. Boko Haram has grown into enough of a force that large parts of northern Nigeria are under emergency law because of their activities.

Recent military adventures against the Boko Haram have not endeared the continent's largest army to the citizens of north eastern Nigeria.

The politicians have no choice now but to show they are doing something, but in the long term Nigeria as do other African countries, need to seat back and take a long hard look at the wealth inequalities in their respective nations, not least of all as these may serve as the tinder of revolt that will sweep them out of power.

RVR AND THE FUTURE OF THIS REGION

Turning around the fortunes of the Kenya-Uganda railway is not unlike changing a huge ship's course – progress is slow, often imperceptible but once the course is set hard to reverse.

The analogy by Ugandan businessman Charles Mbire was an apt one.

Last week RVR held its first (?) share holder and stakeholder meeting since the Kenyan investment firm Transcentury’s 34 percent investment was bought by the concession’s anchor investor Citadel Capital, an investment company out of Egypt.

Citadel Capital now control 85 percent of the company through Africa Railways. The remaining 15 percent is held by Ugandan firm BOMI holdings that is wholly owned by Mbire.

"For all intents and purposes RVR came out of that board room skirmish unscathed if not more energised following a willingness by its institutional partners to provide the finance to pay off Transcentury...

Transcentury exited the consortium claiming that the investment did not live up to their expectations and that they had bigger fish to fry.

However RVR’s stakeholders in Nairobi last week affirmed the viability of the project and in many instances would have been forgiven for drooling into their soup at the potential of the concession if executed properly.

Decades of neglect mean that road transport has supplanted rail as the preferred means to and from Mombasa.

At the height of its powers in 1970 the railway was handling four million tons of cargo annually a figure that is yet to be attained under the new management, though they project that they will shift five million tons of cargo by the end of 2015. The port of Mombasa handles 20 million tons of cargo annually, suggesting that even if they attain their short term target they will still be a lot of room for expansion.

In the US rail accounts for 43 percent of all intercity volume.

This is key for Uganda and its hinterland because three in every four tons ferried are destined for Ugandan and beyond, clearly we will be among the main beneficiaries of an efficient RVR.

As landlocked country we should jump at any initiative that will help lower our transport costs and the development of the railway is one.

Currently the average transport costs to ferry a ton per kilometer in Kenya and Uganda is US15 cents which is three times as high as the African average.

The size of the rail network --- 1,300km from Mombasa to Nairobi and the dilapidated state in which the new concessionaires found the network and rolling stock will make one of the biggest investment in the region. Already a fully financed $287m turn around program is in progress that started in 2010.

When the British conceptualised the Uganda railway their initial thinking was that it would help in protecting the source of the Nile from its enemies. Uganda was the missing link in their strategy to control the Nile seeing as Egypt and Sudan were already colonies.

Subsequently the railway led to the speedy occupation of Kenya – more specifically the rift valley by white settlers and also made Uganda a viable economy through the export of cotton and coffee.

Citadel Capital have a long term vision to make it the beginning of an intercontinental railway network.

"The strategic importance of this railway has only been squandered by our post-colonial governments.It is a unique investment – an inter-country, Public Private Partnership, Foreign Direct Investment (FDI),an intricate  endeavour which for the time being seems to have the right partners...

As for competition from the widely hyped standard gauge railway? 

"By the time the standard gauge railway is commissioned our business will be mature enough to compete favorably," Citadel Capital's managing director Karim Sadek said.

UMEME EXIT A LESSON

This week the controlling shareholder of power distributor UMEME announced it would be disposing of a significant portion of their interest in the company to pursue another venture in Cameroon.

British private equity firm, Actis Capital owns 60 percent of UMEME having sold 40 percent to the public in 2012.

Earlier this year parliament voted to cancel the UMEME concession citing irregularities in the way the concession was procured. Thankfully the resolution was not binding on government or UMEME.

"With news that Actis Capital was divesting itself of a major portion of its holdings understandably led to speculation that the parliamentary action prompted the move. Umeme denies this but it is not inconceivable that the political risk that came with the resolution played a part...

It takes time to organize such a sale and the parliamentary debate that resulted in the recent resolution started three years ago, must have been factored in.

Since UMEME took over the concession their customer base has doubled to 574,000, with the amount of power going the same way doubling to 2118 gwh in addition the company was collecting all the revenues due to it, including from government. Last year revenues came in at nearly a trillion shillings.

These improvements have come at a cost with the concessionaire investing more $150m (sh390b). This number is interesting on two fronts. One, its a reflection of how derelict the network they inherited was and secondly, this is money would have been ploughed into the system by government were it the owner, money badly needed for infrastructure and social services but also knowing how government works would not have produced the efficiency improvements UMEME has shown during the same period but would have instead enriched a few individuals.

Whereas Actis says it is shifting its attention to bigger projects in Cameroon, its hard to see how an investment in a more stable market can beat the growth potential of the Uganda market where the supply constraints are being sorted out and there is only one person in every ten Ugandans with access to power.

"The truth is that while Actis has done well for themselves--not as well as they would have hoped had they seen out the full concession, Uganda was becoming a hazardous place to do business. Not only were they battling the small power thieves, well connected people, companies and government departments were in on the action too. As if that was not enough they had a government driven by political rather than economic considerations, that was often reluctant to back their business plan...

In addition they suffered rear guard action from regulators and parliamentarians who hung them out to dry or were hell bent on the throwing them out, regardless of the cost to the economy in lost momentum or compensation.

It is difficult to have sympathy for Actis. Capital is a coward and this is what they do. They provide capital, bring together the management expertise and develop projects with a clearly defined exit number in mind.

Two lessons emerge from this experience. 

"One, in the absence of local comparable investors we need to be more supportive of investors like Actis. Secondly, that we need to have a more strategic vision of how we mobilize our own resources to be more meaningful players in our own investments. To illustrate of the ten largest shareholders in the UMEME share sale two years ago only NSSF and maybe the employees and directors and shareholders of UMEME represented Ugandans. Who is to blame when, the juiciest of our investments are snapped up by others?

UGANDA IN THE PRESS FOR THE RIGHT REASONS ...SORT OF

Last week Sister Rosemary Nyirumbe was named  on the TIME 100 list, an annual list of the most influential people as determined by a panel brought together by the magazine.

Nyirumbe was named for her work with women and girls affected by violence. She has set up a home in Gulu to aid in this effort.

She is in illustrious company. Among those named are the usual suspects Barack Obama, Pope Francis, Angela Merkel and Xi Jiping ... The list is about influence and not popularity so Abu Dua (a terrorist with a $10m prize on his head) and Kim Jung Un -- not your regular dinner guests, found their names on the list.

The nominees are drawn up by alumni of the decade long list, TIME magazine's editors and international writers. It comes as no surprise that the award is heavy with US nominees or people who champion causes that the US public can relate to.

"The Lord's Resistance Army (LRA), who have carried out a 20 year insurgency in northern Uganda, were forced into the US public's conscience when the video Kony2012 went viral. Up to that point despite killing hundreds, abducting thousands of children for use as soldiers and sex slaves and bringing the region's economy to its knees, Kony and his band of killers got only passing mention in Washington's corridors of power...

Last week a few LRA rebels snuck back into Uganda and surrendered in West Nile. That there is a chance the LRA will make a return is enough to make stomachs turn and hairs stand on end in northern Uganda.

I am sure Sister Nyirumbe did not lobby for this accolade, but the unintended consequence of it, is that the LRA-story is kept current, not far from the surface ensuring pressure is maintained on the remnants of the deadly group.

International opinion is fickle, driven by a media forever seduced by the latest spectacle and less by altruism. The truth be told, Kony and the LRA is not the story, and not just because he is committing atrocities far from the camera lenses. The real story is the societal disruption and economic devastation, the after effects of his murderous campaigns.

Hopefully, but it is unlikely, recognition for people like sister Rosemary will swing the LRA story towards how to manage the aftermath.

"On the other hand it might be a good thing that the mass media has moved on to the next story. Nothing makes for good news like bad news. Media attention takes on a life of its own, often focusing on the symptoms rather than the causes, the immediate rather than long term effects of events. They play a useful role in raising awareness however caricatured...

But also with the media away, more credible help can come through rather than the self serving kind that often shows up in the heat of the moment looking for photo opportunities.

The bottom line though, as has been shown many times is that the final responsibility for remedying the ills of society lies with us. External assistance is often transient and easily withdrawn from the recipient for reasons other than his need.

It is a moot point that there is great need for psychosocial help in northern Uganda. Just as important is the need for economic empowerment that would make the population -- most of whom were displaced from their homes for nearly 20 years return to being productive. They do not need charity but a chance to reactivate their lost skills or learn new ones, greater access to markets and temporary help to get them on their feet.

It does not help that aid to the north is being stolen hand over fist, but this aid is at best temporary and will not guarantee a permanent solution to the north.

It helps little too that the region's political representatives have come to Kampala and been sucked into the smash-and-grab antics of their contemporaries and have "forgotten" their people.

"What the north -- just like the rest of the country, needs is leadership. But there is a particularly dire need in the north because of how the society's structures have been degraded. They need people to lay down a vision, to provide example and to mentor the youth the majority of whom have never known better than terror, deprivation and disruption...

If for nothing else Sister Rosemary is being recognized for the leadership she is providing to that community, a fact that cannot be denigrated by a media house which had long forgotten the northern conflict.