BEST OF THE BEST FARMERS AND THE RIPPLE EFFECT ON UGANDA

A week or so the New Vision celebrated the best of the best farmers from 2014 to 2018 Best Farmer competitions.

 Since 2014 New Vision has been profiling farmers who qualify to compete to determine who is the best.  The winners in addition to getting help to improve their farms, are flown to the Netherlands to learn from farmers. Another major sponsor of the event is dfcu bank.

"A better country than the Netherlands to use as an example, it would be hard to find. The Netherlands is second only to the US in terms of agricultural exports, in 2019 recording

€94.5b (sh366trillion), it accounts for a third of world chill, lettuce and cucumber trade and a fifteenth of apple production. Uganda’s agricultural exports in 2021 came in at about $5b(sh18.3trillion).

They produce four million cows, 13 million pigs and 104 million chicken annually. And as if that is not enough they have 24,000 acres or an area half the size of Kampala, under greenhouses.

This made all the more amazing when you realise that the Netherlands occupies about 42,000 km², a sixth of the area of Uganda.

Interestingly they have managed this high agricultural productivity while reducing water usage by 90 percent and ferterliser use just as dramatically over the years.

Just by looking at the numbers one can tell that the Dutch farmer has attained a level of efficiency and productivity, we can only dream of in Uganda, with our better weather, more arable land and double annual seasons.

One local ranch owner with a herd in the hundreds and lands stretching over a few square miles, on return from Netherlands years ago, concluded that we were joking in Uganda. He was put to shame by a farmer he visited who with a fraction of his herd and situated on barely 10 acres of land was producing more milk than he, many times over, with only he and his son as the permanent workers on the farm.

So, one of the tests of the best of the best farmers is whether they had improved their farming practice after their return from the Netherlands.

All the best farmers have returned from the Netherlands with the expanded outlook, improved their farming methods and increased their productivity.

Since 2014 the Dutch embassy and KLM Royal Dutch Airlines have sponsored the travel of 58 farmers, a motley crew that represent every region of the country. The best farmers have not only improved their farms but have proved useful resource for their communities. Many of them set up training institutions to transmit their knowledge...

It is not a stretch of imagination to think that if each of the farmers influenced 100 other that is 5800 farmers and if each of these influenced another ten and then … you get the drift.

There is a difference between politicians urging us to turn to agriculture or extension workers directing us what to do, but when we see one of our own working under in our context working and succeeding it is a higher level of learning.

And if the New Vision can keep facilitating the travel of our best farmers to the Netherlands the rural landscape can very well be transformed in our lifetime.

"While industrialization is what we aspire to, most countries transformed by first ensuring that they produced food surpluses. This did two things it ensured food security, which meant they reduced on their use of vital foreign exchange to import food and secondly, the surpluses beyond exporting them formed the basis of their agro-industries.... 

One of the things they learnt in the Netherlands is how to add value to their products and many of the best farmers now have cottage industries, processing their produce for use in their communities. Will be surprised when these same farmers become the backbone of our future agro-industrial base?

But the highlight of the event for me is when I sat with Flora Kakande of Pumpkin King. Her company grows and process pumpkin into a variety of products, but in addition is working to help farmers grow pumpkin, including refugees in western Uganda. Everything of the pumpkin is usable and have huge health benefits.

After hearing their story I wondered aloud why people like them do not make noise about what they do as the idlers who make more noise in begging ‘Gavumenti Etuyambe”

“But we are working when do we find time to make noise,” was her quick rejoinder.

MAKING SENSE OF THE BUSINESS OF SPORT

Last week former MP Odonga Otto lit up social media with claims that Uganda’s sports bodies, more specifically football governing body FUFA and the Uganda Olympic Committee (UOC) receive millions of dollars a year from the international parent bodies to support sport but that the sportsmen do not benefit.

The former MPs diatribe was prompted by the question “Why isn’t Uganda at the World Cup?”.

Interestingly movie streaming company, Netflix, released a docuseries “FIFA Uncovered” a damning expose of how football governing body is riddled with corruption.

All this was happening against the backdrop of one of the most exciting World Cup’s in recent memory.

I think the honorable Otto’s claims should be looked into, if only so our sportsmen can get the much-needed facilitation they sorely deserve. But that is a story for another day.

However, what piqued my interest this week was the release of Forbes annual list of highest paid sportspersons.

Its an exciting list, like all such lists go.

"At the top of the list was Argentine footballer, Lionel Messi who last year made $130m (sh480b) before tax on and off the pitch. Messi, 34, took a salary cut to join Paris St Germain from Barcelona but business partnerships with Adidas, Budweiser and PepsiCo more than made up for the shortfall and then some...

There were other household names in the world of sports on the list like basketball’s LeBron James ($121m), Stephen Curry($92.8m) and Kevin Durant($92.1m); Soccer’s Christian Ronaldo ($115m) and Neymar ($95m); now-retired Tennis player Roger Federer ($90.7m) and boxer Canelo Alvarez ($90m) among others.

Interestingly despite the recent global crisis, sportsmen’s earning have been seen a lot of inflation. A decade ago the highest paid athlete was boxer Floyd Mayweather who earned in ($85m) and Ronaldo was the only soccer player in the top ten.

A decade further back Tiger Woods was the top earning sportsman pulling in $69m that year. There was no soccer player in the top 10 that year. 

Clearly more and more money is being thrown at sport, are we seeing a corresponding jump locally?

Our sports associations are largely run by volunteer administrators, who while not getting a regular income (so we think), hang on to their positions like grim death. If you line them up they are not the most altruistic members of our society, so you have to wonder why they keep in office for so long. For the love of the game? Puleez!

That aside the explosion in incomes for athletes around the world is a reflection of the need for content to feed the media. Revenues from broadcast long outstripped matchday seat sales for premiership teams.

It makes sense, the more people watching a sport, the more people will pay to slap their logos on those athletes to gain top of mind awareness with the consuming public...

So that seems to be a logical place to start, how do we attract eyeballs to our sports? With internet and the falling price of data It is easier than ever before to do this.  A half decent smartphone positioned to film from a strategic place and live streaming on any number of social media would be a good start.

For people to consume your media product they need they need consistency and quality and then the numbers can be sold to corporate clients. Its not automatic that the numbers will flood to your uploads that is a function of awareness building and marketing.

The following that comes with that can then be leveraged for sponsorships. Increased revenues can then be used to beef up sportsmen welfare and improve existing infrastructure

I simplify of course but it is actually a linear logic.

The sports administrators will complain that this needs money anyway. True, but the administrators need to cross the table to the side of the corporate sponsors to see things from their perspective.

The man with the budget is looking to see how much bang he can get for his buck, the assurance that if he gives you money, he will be able to report more sales of his product or greater brand awareness. If you can show him that, it makes it that much easier to loosen the purse strings. Its sales 101, show me value and I show you the money...

The money man on the other side of the table want also to see organization, so that he is sure that at the minimum his money will be good use and better still there can be a long-term relationship built. So, our organisations need to get organized (ironic?) before they can get money. Is it in anyone’s interest to keep them disorganized?

By the time Ronaldo commands $55m in off field income, his agents can point to the more than 690 million social media followers around the world, as a guarantee of eyeballs on him. These are independently verifiable. And by the way Ronaldo has all these followers due somewhat to momentum – I am following Ronaldo because my friends are following him, but more because his followers came from a deliberate marketing effort. You try to get a thousand followers on social media and you will see how hard it is to raise numbers.

KAMPALA SHOULD LOOK BEYOND SOLAR LIGHTING

I am currently eyeballs deep into the book “Power Play” by Tim Higgins, a book about the building of electric car company, Tesla.

Tesla is the company responsible for vaulting South African-born Elon Musk to the top of the wealth rankings last year.

It is an amazing read for anyone interested in getting the unvarnished view about how to build anything – the discipline, the struggles and how often successful founders come to the edge of failure only to survive mostly on the strength of a lofty vision.

And it is also an interesting book about the issues surrounding the future of cars and their use as we know them.

One of the biggest challenges for rolling out the Tesla was that you needed charging points around the car routes, otherwise the market for the car will always be limited. It reminds me of a time when, if you wanted to make a journey say to Mbarara, you had to make sure you filled your tank at the start of the journey, because of lack of fuel stations along the way, which is not the case anymore.

A combination of private capital and government concessions have made it possible for Tesla to dot a lot of North America, Europe and urban China with their charging points.

Which brings me nicely to Kampala City.

Plans are afoot to install lighting on the streets of Kampala. This is long overdue given the hundreds of kilometers of paved roads that have been laid in the last decade or so.

The plan as I understand it, is that the lighting will be solar powered.

Before reading the Tesla book I might have been sold on the solar plan, but I have reason to rethink this given our current context and the future.

First off, we are going to have an embarrassing abundance of hydroelectric power within the next year with the long-awaited commissioning of the 600 MW Karuma dam. This is power will need consumers and street lighting will be a good place to start. We know of course that this will cost money to the City authorities but I am sure government would be amenable to some concessionary tariffs for streetlighting. Package it as a security issue and the argument will get a lot of traction.

But money will not be an issue if we repurposed these street lights to not only provide lighting. They can serve as the basic foundation for electric vehicle charging points, starting with electric motorcycles and eventually cars. These cannot be serviced by the solar panels that would be installed for lighting.

The beauty of it is that while solar power is green power, what better green power is there than hydroelectric power.

But looking into the more immediate future, plans are underway to introduce 5G and other communication technologies. 5G technologies will require small cells to be installed at regular intervals for the efficiency of the system to work and these will require power 24/7. It would make sense to design the new poles in such a way as to accommodate these new technologies, which the current solar lighting poles are not designed for. By using the streetlighting poles even services like location finding would be much better than they are today and make ecommerce all the more efficient.

"One of the challenges of Kampala is that we do not have common conduits for infrastructure. That is why every time one utility or another wants to lay their infrastructure they come and tear up our roads and compounds. This is expensive and inefficient.....

If KCCA thought beyond just streetlighting, they would help in alleviating this problem. The streetlighting grid can serve as a useful backbone on which all these other technologies can ride if it uses hydroelectric power and not the current limited solar powered solution.

In the world of finance there is also now a lot of green funding as the west tries to assuage its guilt for messing up the planet. So, funding this project if well packaged might be much less costly than anything else.

And the icing on the cake for KCCA, these applications – EV charging, 5G networks and whatever other uses are planned for the future, will be growing revenue streams for the city as we shift towards electric transport and use our phones more and more in our daily lives.

And for the citizens of Kampala reduced disturbances from workers tearing up our roads every other day to lay this or the other infrastructure.

 

THE BUSINESS OF THE WORLD CUP

It has been 40 years since I was introduced to the football World Cup. The World Cup in 1982, held in Spain, was won by Italy.

The tournament also introduced us to the Tango Espana, the official ball of that World Cup, and the last genuine leather ball to be used in the World Cup. That ball, a more stylish option to the old black and white ball, was a collector’s item in the playgrounds that I grew up on.

It was the year that Italian Paulo Rossi, previously suspended for match fixing, was top scorer and player of the tournament. He is one of only three players to ever have won all three – World Cup, Golden Boot and Golden Ball in a single tournament. He fired up our childhood imaginations, we all wanted to be Paulo Rossi.

This year’s World Cup did not seem to be accompanied with the funfair I was used to. Maybe because of my lowered expectations, I have been pleasantly surprised at how I have enjoyed the matches. It helps of course that the underdogs are upsetting the form book, as well.

But ahead of this edition of the World Cup, the story of how much Qatar had spent to host the event was big news.

"According to who you believe Qatar has spent about $300b (sh1,100trillion) over the last 12 years in preparation for the event. To put this in perspective Qatar has a GDP of $180b so they almost spent twice the size of their economy on this World Cup. Or to put it in better perspective over the last 12 years they have spent the equivalent of the GDP of Uganda every year to prepare!

And even more jaw dropping is that the Qataris expect the games to bring in $17b over the mouth long event, not even ten percent of the initial cost.

The figures are further mind boggling when you see that this World Cup is going to cost more than 15 times the $15b spent in the 2014 Brazilian edition, the next most expensive World Cup ever.

The Qataris are asking, who says we should recoup our investment at the World Cup?

The investments? They have built eight stadiums from scratch of which seven will be dismantled after the games; They built 108 hotels to house the estimated 1.3 million visitors they expect during the month-long event; They have doubled the capacity of their airport and built a whole new railway system under the desert.

Most immediately this huge government expenditure is driving Qatar’s economy, which has been growing steadily for the last decade and set to grow in double digits this year.

"But while the World Cup has triggered this massive outlay, it is only part of a larger plan to make Qatar a global transport hub. Of the reported $300b only $10 billion was spent on infrastructure specifically for the World Cup, which means developments will continue after the final whistle is blown.....

It makes sense. While the leaders of Qatar are not beholden to their people in the “western” democracy sense, they needed a big event like the World Cup to not only trigger the massive expenditures we have seen, but also announce to the rest of the world that they are open for business. Which better event to use than the World Cup?

Understandably, one of the major winners of this construction boom is the Qatari construction industry, which given the capacity they have built will be able to move more aggressively to take up contracts at home and abroad.

But given the growing momentum of the green energy movement, the oil sheikhs of the middle east have seen the writing on the wall and preparing to pivot away from reliance on oil revenues. Dubai was the early bird on this.

In the late 1970s and 1980s China went on a similar spending spree on infrastructure and human capacity development. At the time western economies were similarly unimpressed and wondered what they will use all that capacity for. China is still building but is also now the second largest economy in the world and may very well rise to the biggest economy within the decade.

"The narrative has been, up to this point that these big extravaganzas – including the Olympics, are just gravy trains for the ruling government and their cronies, that actually leave the tax payers picking up the tab with little benefit to themselves....

The Economist last week had an infographic that showed that apart from the World Cups in Mexico and Russia in 1986 and 2018 respectively, all other World Cups since 1966 have spent more than they earned during the event.

It may just be that after Qatar other governments may start scrambling to host future events, planning them to have longer term benefits to their respective economies way after the event.

Of course, planning is one thing and the reality is something else altogether. The Qataris have set their plan in motion we should return to this space in a decade or two to see whether it actually panned out. See you then.

IS UGANDA’S DEBT SITUATION A WORRY?

Uganda’s debt burden has grown dramatically over the last decade, during which we have recently crossed the psychological important 50 percent debt to GDP line.

Observers warn that we are moving into dangerous territory, fearing that more and more of our budget will go towards debt servicing and not towards improving education, health and other public goods necessary to drive development.

The critics are right and wrong.

I went back 25 years to a time when our debt burden had reached unsustainable levels, to the point where we were bunched into a new category, Heavily Indebted Poor Countries (HIPC) with 38 other countries.

In 1996 we had debt to GDP ratio of more than 50 percent with debt stock of $3.7b against a GDP of $6b in 1995/96 for every hundred shillings of revenue we were collecting sh21 went to debt servicing.

Fast forward to today and once again our debt to GDP ratio has touched the 50 percent mark and we are spending about sh30 of every sh100 collected to service our debt.

On a purely numbers level we are back to where we were in 1996 and if there were concerns then about the economy then we have a right to be concerned now as well.

From our personal experience the thing about debt is whether you can earn enough to cover your obligations and have something left over to live on. Maybe even more important is what you spend your debt on, on things that will earn you more money in the future – easing the pain of repayment or spending on things which will incur more costs and guarantee that your debt will chock you.

As for people so for countries.

So, while our debt levels have jumped to about $20b, a more than fivefold jump from 1996, GDP during the same period has jumped more than six-fold to $40b from $6b....

In theory it can be argued that we did a good job in employing the debt to generate more economic activity. How efficiently we did this, maybe a debate for another day.

The thing with debt is that when you contract it is always a race against time.

For instance, when you borrow money to stock your shop, you are hoping the sales you make from the new inventory will pay for the loan. However there maybe delays in getting the stock on the shelves or God forbid! Another lockdown and suddenly your well laid plans will count for nothing.

But whatever happens you will have bought stock, which it will be reasonable to think will be sold one day. You could do worse for yourself and buy yourself a car and instead of increasing your income will actually increase your expenses – fuel, service, parking stickers among others. So, in addition to paying off the loan you are bleeding money to run the car.

In respect of this, in 1996 Uganda Revenue Authority (URA) were collecting sh646b while this financial year they are aiming to collect sh22trillion a 34-fold rise in revenues.

Revenues come from taxing economic activity. Of course, it could very well be that URA is becoming more efficient in collecting revenues but the bigger reason is that economic activity has increased during the period.

How do you increase economic activity? You maintain peace and security; you build infrastructure and you improve the capacity of your human resource through education and improved health services.

Lower economic activity, a hangover from the Covid pandemic, is forcing government to cut back on spending causing a lot of pain up and down the economy. But expectations are that the economy will return to its pre-covid growth ways by 2024 and the worst of this episode will be behind us.

It goes without saying too, that the economy’s ability to pay off our foreign debt is much better. In 1996 we had exports of $715m. Exports are important because its where we get the dollars to service our debts. In that year our debt service bill was $132m or about 18 percent of our export receipts. Last year our debt service bill of $760m was covered eights by our exports of$6.34b.

However, government has to improve its efficiency in converting debt into economic enabling assets. Projects are taking twice as long, if not longer to take projects from conception to commissioning. The time wasted has cost implications and also mean delaying economic activity that will reduce were debt servicing woes....

That is why the fight against corruption should go beyond lip service. Corruption beyond concentrating wealth in a few people’s hands, diverts resources from service delivery, depriving the majority the opportunities to climb the economic ladder.

But while we are on the discussion about debt sustainability, according to Bank of Uganda figures, about 20 years ago in 2003 our debt to GDP ratio peaked at 71.5 percent, and we are still here.

 

FACING THE CHALLENGE OF POVERTY ERADICATION: AN EU AND UGANDA STORY

What is poverty? What does it look like? What would it take to pull out of it, for the individual or eradicate it for whole communities?

At a very basic level the poor man cannot sustain himself. He cannot take care of the basics – food, shelter, clothing to a satisfactory degree. From a purely material standpoint the poor person has little or no income to speak of.

Going by that, getting an income has to be the first thing to look into.

A poor society is characterized by much the same, the only difference being it is scaled up to cover many individuals, many families, many communities. For communities you would still have to raise individual incomes but in addition ease access to market.

The 11th European Development Fund (EDF), which run from 2014 to 2021 sought to address this question among some selected communities around Uganda.  The €578m (sh2.2trillion) fund has bankrolled 120 projects and focused on transport, food security and agriculture.

While handouts can give the temporary and artificial effect of improved income, to increase income sustainably, one has to increase their value to the society. You do that by adding to your knowledge and experience. In the video above the turnaround in Laurence Kayeswa’s life from petty criminal to in-demand tailor is an apt illustration.

He learnt how to be a tailor, a skill clearly valued in and around he slums of Bwaise going by the success he has had in building a steady, reliable income, that he uses to support himself and family.

It may be of added advantage to teach him some business skills, that would help scale up his enterprise, serve more people and earn him more money. But for now, he is out of poverty and as a minimum target this was achieved.

The farmers of Mount Elgon Coffee and Honey Cooperative were an interesting example of how communities can be transformed. Already coffee farmers by the time an EU affiliated project the Market Access Upgrade Porgram (MARKUP), knocked on their door, its probable that they were only just making ends meet.

Under the program the coffee farmers were not only helped improve their farms, through improved coffee husbandry methods but were also encouraged to keep bees to improve their coffee farms and as anew revenue stream.

But beyond that, the project organized them into a cooperative that allows them to negotiate better terms from suppliers, bulk their produce and even add value. Value addition should mean the farmer would get a greater proportion of the shelf price for his crop.

User-owned cooperatives, if managed properly are an effective means of ensuring producers get a fair shake from the market. Many times our poverty is a function of our inability to aggregate our resources, be it land, labour or capital.

Similar benefits were seen among the cocoa farmers in Bundibugyo where MARKUP is present.

It is still early days to assess the long-term impact of these initiatives on their respective communities -- there are still thieves coming out of Bwaise and poverty continues to ravage the slopes of Mount Egon and Bundibugyo, but the basic principles are sound.

The EDF has done another important thing for these communities, creating examples from which the communities can learn. By designing the individuals and farmer organisations to stand alone, it is likely that the projects cannot only be self-sustaining but can be self-perpetuating in the surrounding societies.

It will be interesting to return to these individuals ten-, 20-years from now and see what has become of them. We may be pleasantly surprised.

EU ALLEVIATING POVERTY THROUGH SKILLING

Laurence Kayeswa has turned his life around from a common thief to a productive member of his society.

“When I used to grab people’s phones, I was always under tension. I was truly living by God’s grace,” Kayeswa, a resident of Bwaise, a Kampala suburb said recently. Income was unsteady, life was cheap -- it was not unusual for thieves to be killed by angry mobs for stealing less than a phone and understandably he had a phobia of the police.

“Because of my trade I could not face the police because you never knew whether they were coming for you or not.”

Thanks to an EU funded project run by Action for Fundamental Change and Development (AFFCAD) Kayeswa has been able to turn his life around. AFFCAD is a youth focused nonprofit organization seeking to transform the living conditions in Kampala’s poorest slum by empowering the youth and women using education, health and economic programs.

In search of a more sustainable livelihood Kayeswa enrolled with AFFCAD for a six-month course in tailoring. On completion he bought himself a sewing machine to which AFFCAD added another.

Kayeswa now runs a small team that sews everything from clothes to bags and his work has found a market.

“People are shocked that I can make these things and are eager to buy them. I now not only support myself and my family I now no longer get scared when I see a policeman coming down the road.”

AFFCAD has linked up with the government’s directorate of industrial training and these courses are now certified.

“As it is about 65 percent of graduates start small businesses and become more useful members of their societies,” said co-founder and social enterprise director Jaffar Tarzan Nyombi.

While charity is welcome in marginalized communities for it to have maximum impact it has to be targeted properly.

“Our experience is that it is essential to leverage private sector investment, in that way create more jobs and more growth,” said Caroline Adriaensen, head of the cooperation of Eu delegation in Uganda.

Such progams are part of the 11^th European Development Fund (EDF) to Uganda that run from 2014 to 2021. The fund which saw €578m (sh2.2trillion) disbursed during the period has supported 120 projects around Uganda in the areas of transport, governance, food security and agriculture.

Interventions like the above where people are taught how to fish rather than giving them the fish, have enduring transformations not only on the individuals but on whole communities.

Sometimes lifting people out of poverty is more an issue of showing them improved ways of doing what they already do than introducing them to a new income.

Through the Market Access Upgrade Program (MARKUP) EU support has been instrumental in helping small holder farmers around the country improve their production methods, access markets and improve their incomes in the process.

Julius Mkaboona inherited his cocoa farm from his father. The Bundibugyo area, bordering the Democratic Republic of Congo (DRC), has been known for producing cocoa but farmers stopped seeing the benefit of the crop leaving their fields to the elements or cutting down the trees altogether.

“But thanks to the training of MARKUP we have improved our production methods, our post-harvest handling, improving the quality of our produce and as a result get better prices for our produce,” said Mkaboona, standing in his lush green garden outside Bundibugyo town.

Across the country in eastern Uganda on the slopes of Mount Elgon MARKUP has helped farmers there increase production, improve the quality of their crop, do some value addition and brand their output.

‘We have moved from simply producing coffee to value addition and producing a high-quality coffee that some are shocked can come from Uganda,” said Noah Welihe, operation manager at Mt Elgon Coffee & Honey Cooperative.

The cooperative has a membership of 700 small holder farmers that not only produce the aromatic Arabica coffee but also honey for export.

These are but a few stories of the EU’s interventions around Uganda in helping families raise incomes and improve their livelihoods.

The formula of going to these communities and assessing what the best interventions are possible using the existing infrastructure is a winning one whose benefits are sustainable and replicable anywhere in the country.