KENYA’S CAUTIONARY TALE FOR UGANDA

My driver Stephen reflected the attitude of many Kenyans to the current rise in the cost of living in our eastern neighbour. He thought it had long gotten out of hand and could cause instability in the region’s biggest economy.

"In 2023 since the ascendance to the top job by President William Ruto, Kenyans have seen their cost of living soaring with the removal of fuel subsidies, increases in consumption taxes and fall of the Kenyan shilling to historical lows....

The Kenya shilling crossed the sh150 mark against the US dollar in October and peaked at kShs156 before Christmas.

But these are just the symptoms of even more fundamental weakness in the economy.

For example, that the export receipts were down in the 12 months up to October despite the shilling depreciating 19 percent during the period. A weaker shilling should see higher export earnings in Kenya shillings even if they just exported the same amount of goods as a comparable period in the past. The fact that export earnings suggests that the economies productivity is also falling.

It could not have come at a worse time. Next year the $2b Eurobond principle comes due at the end of June and they need all the hard currency they can lay their hands on.

So, it makes sense that the government is scrambling every which way it can to raise these funds, including overtures to the International Monetary Fund (IMF) to ease the pain.

The weakening shilling of course not helping matters as the shillings weakening added Ksh810b (sh19trillion) in interest payments in the year to October according to the Central Bank of Kenya (CBK).

How did they come to this? An ambitious infrastructure expansion first during the Mwai Kibaki presidency, which paved way for a questionable expansion drive during the time of Uhuru Kenyatta era, mostly funded by debt, is coming back to bite.

There are questions whether the $2b Eurobond, contracted in 2014, was actually used for its intended purpose, with reports that the proceeds found their way into private pockets.

Few can argue with paying for infrastructure development with debt. Infrastructure should ease doing business in an economy, leading to more taxes making it affordable to pay off the debt. But if the infrastructure developed does not come with an attendant increase in economic activity, then trouble begins.

The ambitious Standard Gauge Railway (SGR) which cost $3.6b and whose loan grace period expired in 2021 is putting great strain on the Kenya treasury, especially since revenues from the SGR operations have not yet caught up with costs.

Industry watchers have said the only way the project can have a chance of viability is if it is linked to Kampala and its rich hinterland. That has not happened as the project is in limbo, having stopped in Naivasha.

There are other things that are conspiring to stress the Kenyan economy – corruption being at the top, and now the bitter pill of economic restructuring has become inevitable.

"We were there in the 1980s and 1990s when revenues were anemic and loans were falling due left right and center. Increased taxes and liberalization of the economy helped us pull out, but the pain still traumatizes a generation....

We hear similar noises in Kenya from what was here then, with the arm chair commentators complaining that the economic moves the government is taking – raising taxes and restructuring the economy, were a sell out to the west.

The net sum of this contrary view, is that the Kenya government should continue with business as usual and somehow things will sort themselves out.

This kicking the tin down the road prescription was tried by the Uhuru government and means the pain of restructuring will be that more painful.

Kenya unlike us in the 1990s have a robust commercial sector and even if there are reports of massive capital flight, one should expect they will come through eventually. The key is the government, does it have the cojones to do what is needed to do or will it only tweak around the edges and hope for the best?

Do the necessary maybe politically expensive, but if they get down to it now maybe by the time of the next election in 2028, the economic pressures will have eased with the greater efficiencies created and the William Ruto adminstration may very well have been forgiven by then.

The current Uganda government cash squeeze, a result of a growing debt servicing bill – it jumped 50 percent to $722m in 2022 from $480m in 2021 and growing, is cause for concern. Thankfully our revenues continue to grow as do our export receipts. The hope is these will continue to grow despite the strain on the private sector, which government owes sh8trillion and shows little willingness to settle – in this budget sh200b was provided towards retiring this debt, but maybe a case of us burying our heads in the sand.

With our politics in transition, it is unlikely that the government can take the hard decisions, like it did in the 1990s to get the economy back on track. The trick is to not to dig ourselves into that hole or take the initiative in cutting down the cost of our public administration before someone comes along and forces us to do it.

Happy New Year!

 

MONEY THOUGHT FOR 2024

No better time than the end of the year to assess your money situation. If you are ambitious your money situation is not satisfying at all.

Myron Golden, one of those money motivational speakers, said something in the last few days that struck a code.

“If you desire to fix your money problem, don’t try to fix the money problem, fix your money mindset …. Or your money problems will never go away,” he said.

Do you want to know if you have a money problem?

Add up all the income you made in the year and then determine the value of all the assets you own, things like cash, shares, bonds, businesses, real estate please don’t include your car, cloths and phones.

If you are in a good place your assets should be equal to or more than your age multiplied by your annual income, all divided by ten.  So, if your annual income is sh10m and you are 30 years old you should have at least sh30m in assets. If you have more than your number you are doing well, if not you need to pause and think about your life.

The formula was proposed by Thomas Stanley author of “The Millionaire next door”. It is based on a US reality so may not be directly applicable to us, but it is a good place to start.

There are more brutal formulas, like the income from your assets, passive income, should be equal to or more than your annual expenses to be able to begin to rest on your laurels.

So, if you are doing badly by the above formulae Myron Golden says the money is not the problem but your mindset.

For many of us when thinking about getting money we are like, just show me what to do and I get the money. We will be shocked to learn that it does not work like that.

To explain. There are two ways of spending money. Only two. Either you eat it or you invest it...

If you look at your finances, the balance of these spending decisions would tell an on looker immediately whether you have money problems or not.

So, if I said I will give you a sh100,000 right now, what would be your first thought on how to spend it?  For most of us we will think of food, cloths, drinks or some transient experience. There is a small minority – less than two percent of most populations, who would think first of how to invest the money.

The word invest needs to be demystified. For many of us, we equate investors with those men who are always waiting outside State House looking to get incentives and tax holidays to put up multi-million-dollar operations.

So, when asked how would we spend sh100,000, we think it is too little to invest.

This is the direct opposite of my friend Jack, when money crosses his path his first thought is how to deploy it. However, small little it is. As a result, after more than a decade of this discipline, he has built himself an asset base that is more than a billion shillings and which pays him about sh500,000 daily or sh180m a year or sh15m a month and he is not yet 50 years old yet.

Ok so he might have come upon a windfall in the last year or so, but because of his mindset, which is now wired away from eating his money, he invested it rather than blew it on fast food, fast cars, even faster women and high living.

"Mindset is key. Thoughts lead to actions, actions lead to behaviour, behaviour leads to character and character leads to destiny. But it starts with a thought.

Kampala businessman Sudhir Ruparelia in answering the Financial Times, way back in the 1990s, how he became wealthy replied, “It is an old Indian trick, earn ten shillings, eat one shilling reinvest nine shillings. Repeat until rich.”

Our knee jerk reaction is to rubbish such stories. Us we know the man has done some funny things along the way and that is why he is rich.

That may very well be, but for us it absolves us of the responsibility to try and get rich, we are convinced the rich are crooks and since we are bible slapping, church going Chiristians, we have left the wealth building for the crooks. Don’t get me going why it is convenient for some people that the gullible flock persist in this fallacy.

Crooks will be separated from the rest with the passing of time, don’t worry about that. The point is when money cross our paths the truly wealthy look at it differently from the rest of us mere mortals and that makes the difference in our fortunes or lack of thereof.

And the opportunities are all around us.

Last week investment bankers Crested Capital held a “2023 Market Round up” webinar to see what our capital markets have been doing throughout the year.

While the overall performance of our Uganda Securities Exchange (USE) was dismal, it is down 26 percent this year, the devil is in the detail.

If in January you had bought Stanbic bank shares, at the time going for sh21 each, you would make sh11.50 a share by year end. The share closed last week at sh32.50. But in addition to that Stanbic paid sh6 in dividends per share during the year.

If you had bought 1,000 shares of Stanbic at the beginning of the year for sh21,000, your interest in the bank world now be up to sh32,500. In addition, you would have earned an additional sh6,000.

You just have to extrapolate the figures to see that if you had bought 10,000 or 100,000 or a million shares you would have bagged sh60,000 or sh600,000 or sh6m respectively in dividends alone.

Looking at your annual income surely you could have committed a few shillings to buy the Stanbic share and make some money, during the year. What stopped you from doing that? Ignorance could be an allowable defence, but I am willing to bet you ate the money.

 

THE CURIOUS CASE OF GREENLAND BANK, LUGOGO AND FAKE ARTIST IMPRESSIONS

It will be 25 years next year on 1^st April since Greenland Bank was shut down.

The news announced in the last few weeks of Turkish contractor Suuma taking over Lugogo sports complex to redevelop it, more like underdevelop it, brought back memories of Greenland Bank.

Greenland Bank opened its doors for business in 1990. By 1994  they had a swanky new headquarters building on Kampala road, opposite the central bank.

But its biggest contribution to the industry was its abandoning of the strict banking hours other high street banks kept.

In those days banks would open for business at 9 am and were done by 2 pm. And did not open on weekends. There were no ATMs so if you had not got your money by Friday lunch time, you were in for a long weekend.

Greenland bank not only remained open until 7 pm, it also opened on weekends. And they did not have the onerous opening and minimum account balances that other banks demanded.

"It did a better job of being the people’s bank than the government owned Uganda Commercial Bank (UCB) or its cousin The Cooperative Bank....

The quicker adoption of computers must have helped. It helped too, that one of the main promoters of the bank was former Bank of Uganda governor Dr Suleiman Kigundu.

During much of the 1990s UCB was being readied for privatisation, and had suffered several failed attempts, among other things, government’s insistence that whoever was to take UCB off its hands should commit to maintaining the full branch network, which by that had been scaled back to 85 from a historic high of just under 200 branches.

International banks including South African bank Nedbank expressed interest.

Eventually little known Westmont Bank from Malaysia, stepped up, agreed to all government conditions, took control of the bank but suddenly struggled to raise the money.

It was then revealed that Greenland Bank had tried to buy UCB through the back door, the central bank took control of UCB, soon after sold it to Standard Bank of South Africa and it then became Stanbic Bank.

Meanwhile, Greenland’s over ambitious expansion regionally,  into hotels and grain trading soon caught up with it. Its bad loan portfolio ballooned putting depositor’s money at risk and the Bank of Uganda moved in to shut it down.

Greenland Bank’s promoters have always complained that their shut down was politically motivated and that they were still a viable bank by the time of shut down.

In 2019 parliament instituted a probe into the closure of several banks between 1993 and 2016, among which was Greenland Bank.

They say if the rat lives long enough it may eat the skin of the cat.

During their testimony before the Committee on Statutory Authorities & State Enterprises (CASASE) the former Greenland Bank directors listed as one of their assets the Westmont Land (Bhd) Asia of Malaysia.

And suddenly, at least for me, it all begun to come together. Greenland bank had created a front company in Malaysia to come and bid for UCB. When the fraud was unearthed, not least of all because Greenland bank was infiltrated, than the Government pulled the rag from under Greenland bank’s feet....

In hindsight Greenland’s problems must have been a result of trying to chew more than they could swallow, causing a liquidity crunch and leading to it falling foul of banking regulations. Never mind too, that they committed the ultimate folly of banking, committing short term liabilities – people’s deposits, to invest in long term projects --- real estate development.

Because of the underhand method that had been used to control UCB, Greenland could therefore not openly get back what it had poured into UCB bank and that was that.  Not to mention they never got around to raising the balance of the price they had pledged to pay for the bank.

So when Lugogo sports complex was handed over to the a foreign contractor to develop, I couldn’t help remembering the UCB saga.

According to artistic images supposedly issued by the new developers, the cricket oval and the tennis courts are not part of the development plan. Instead of these, there will be a huge indoor arena and a small hotel .

"More recently the Naguru Estate was taken over by some Irish-led developers, OpecPrime properties, whose artistic impression of a satellite city on the site has remained a pipe dream...

Meanwhile hundreds of residents were evicted and promised they would have first call on the residences that would emerge from the plan. They are still waiting, if they are alive. The land is now overgrown and some local people have been stealthily apportioning themselves plots from it.

I am hanging on to the copy of the Lugogo complex’s artist impression to compare it with the final product.

 

KENYA PRIVATISATION, BETTER LATE THAN NEVER

Last week Kenya’s President William Ruto announced his government would be privatising 35 state owned companies.

To that end, a new law  been enacted that brings into force an agency to carry out the exercise without bureaucratic interference.

The naysayers of course are up in arms, seeing this as an International Monetary Fund (IMF) plot to take Kenyan assets on the cheap.

Even if that is true no one is asking how Kenya came into a situation that the IMF would dictate to it.

"The IMF is like the lender of last resort. When no one else will touch you with  a 100-foot poll the IMF is the one you go to. But they are not a charitable organisation, their money has a cost.

Normally others will not lend to you, because the probability is high you will not be able to repay them.

So the IMF may insist on more efficiency in the economy and the easiest thing is to flog all the deadweight companies that are sucking more out of the government than they are paying back in taxes and dividends.

Greater efficiency in the economy will make the IMF redundant, as the country will be able to go to the open market to borrow funds.

Privatisation can take many forms, selling the company as a going concern or liquidating it all together – selling the assets and paying off the liabilities.

In the last incidence the company maybe beyond salvage – up to its eyeballs in debt, in need of major recapitalisation and in a dying industry, in which case it may not make business sense to try and keep it going.

But if the company is to be sold as a going concern one can expect that the labour force will be cut (tribalism and nepotism are never an efficient recruiting mechanism), minimum efficiencies achieved, while replacing obsolete machinery before they may think about beefing up staff numbers again.

The Uganda experience shows that the labour force eventually surpasses the original numbers before privatisation. The only thing is that it is not all those who are retrenched that regain their old jobs.

"The main aim is not to raise money but to create greater efficiency in the economy...

Kenya has a fairly robust stock exchange on which some of these companies can be offloaded – if they have sound management and strong balance sheets, but chances are they will be sold to investors directly.

The critics will say that since many of these companies will be snapped up by foreign investors it amounts to colonialism via the back door.

It would be ideal that local businessmen buy the companies. But often what happens is that it is cronies of the political elite who “buy” these companies, who often can not raise capital to revamp them and end up selling them anyway, to foreign investors at multiples of the price they bought it at.

The ordinary citizen  is often conned into thinking it is better to sell to our own, not knowing they are facilitating crony capitalism with they being the eventual loser. They lose because efficiencies are not created that would see a wide supply of goods or services.

Kenyan indigenous capital would have a better chance of participating in the up coming privatisation, because not only are they wealthier but also because they know how to mobilise resources in groups. They have longer experience in SACCOS and investment groups than we do or did in the 1990s, when our privatisation process was taking off.

In the final analysis the man on the street wants better goods and services at a fair price, they really don’t care who owns the company.

In theb 1990s Russia, still hung up on their socialist dogma, privatised many of their companies by giving shares to the workers. The workers ended yup selling their shares to a few connected Russians who are today’s oligarchs, fabulously wealthy people (all men) and the workers’ plight is worse off than it was under communism, especially since expected efficiencies did not turn up in the economy. And also because they took the money from these companies to buy assets abroad, like Chelsea FC.

But if ownership is such a big deal, the Kenya government should make listing on the Nairobi Stock Exchange (NSE) within a certain time frame as a condition of sale. No gentleman’s agreement as happened here, with the eventual owners not acting as gentlemen eventually.

"The powerful interest groups in Kenya that have resisted the privatisation of companies have finally run out of runway. These companies should have been privatised 20 years or so ago. But the economic realities have dictated that  they have to go now.

Dictated because the short term suffering from privatisation can be politically costly. Ruto did not come to this decision with out the economic reality staring in the face. He needs to offload as much excess baggage on the national purse strings, if he is to have ha lf a chance of getting the Kenya economy back on track.

Again we bring such hard decisions on ourselves. If these companies were well run and making contributions to the treasury the case for their sale would be hard to sustain.

But no, people are not asking the major question, who put us in this position?

 

THE IMPORTANCE OF THE VISION THING

During the recent “Uganda Entrepreneurship Congress 2023” at Makerere University in an interaction with the students the question came up, “How do we ensure the durability of our businesses?”

The statistics have been parroted over and over again, that 90 percent of businesses do not get to their fifth birthdays. I suggested to the students that this is not as bad as it sounds, because the business people who run those failed businesses, did not lie down and die, but went out and started new businesses. And the lessons of their failure helped make their next business better, hopefully.

But yes the question, “How do we prevent from failure?” Business lady Sharon Tumusime, co-founder of carpentry shop Palit, advised first off the that budding business people should not fear failure because failure is part of success.

Easier said than done and I could have sworn I saw a few kids rolling their eyes. You cannot blame them. In school we are taught the lesson and then we seat for the exam, in the business world, you seat for the exam first and then you learn the lesson. A mental adjustment is important, for all of us who want to go into business.

“Rich Dad, Poor Dad’ author Robert Kiyosaki advises that you need to fail faster, so you can learn quicker. That failure will happen is a given.

In my mind I was thinking that one way to ensure these failures are not final is to cover your downside, factor in the risks. I learnt this the hard way in my forex trading days. However sure the trading set up is it minimized your losses by determining before hand how much you are willing to lose if the “sure deal” did not go as planned.

In the real world of business this may take the form of starting small. We now enjoy the hospitality of Café Javas multiple restaurants, but who remembers that it started out as a small, cramped operation on Bombo Road in 2005? That was probably the business owner testing his concept, checking whether it works or not and once he was convinced, he rolled out seven other outlets and four others in Nairobi.

Also you can minimize the cost of failure by spreading the risk, bringing in partners to shoulder the burden. That is the basis of the limited liability company. No matter how sure the deal is, it can fail and to prevent it from wiping you out entirely, making it difficult for you to heroically pick yourself up, dust yourself up and start all over again, spread the risk so if it fails you only hurt a little.

"We, who went to school, have the mistaken idea that money will solve all problems. So when we get a windfall and go into business big are wiped out and start complaining about the economy...

Though over the years reporting business and dabbling in this or that, I have become convinced that the founder’s vision is a critical ingredient to whether a business succeeds or not over the long haul. I saw a few more eyerolls in the room when I suggested this.

It is part of the human condition that we think you just tell us what to do, we do it and voila! Success will follow. I think it also comes from our classroom upbringing.

We don’t pay attention to the intangibles. To our detriment. Because before anything happens there is first a thought. If you want to make a chair, build a house or plant a tree, first a thought.

While its romantic to go out and start your business, a pause to think about your vision for whatever it is you want to build may make the difference between collapsing after year one or enduring for years.

The trick with the Vision is to own it. You should be able to see it with your mind’s eye and feel the emotion that will come with achieving it. This last part emotionalizing it, is important because it will provide the grit needed to hang in there through the debilitating lows and temporary highs that come with doing business....

Just as important is that with a vision you will be forced to be strategic, where strategy is the series of actions you will need to take to achieve the vision.

Many of us are not strategic, we are hardworkers, ready to roll up our sleeves, jump in and start making money. Inevitably when we are hit, we crumble like a pack of cards because our actions are not driven by a vision and guided by strategy.

"Strategy is important more for what it prevents you from doing than what it dictates you do...

Many years ago, when we founded the New Vision Staff SACCO, we closed the first year with sh33m in the bank. we were jumping around with glee, success had come quickly. The question then became how to utilize the surplus and also sorts of ideas saw the light of day – car washes, tent and chair hire.

But our vision was to be a financial institution that creates financial freedom for our members. Rather than divert from this and go into all sorts of general trade, we stayed true to the Vision and invested the money in treasury bills and bonds. The net effect of this was that 16 years later at the height of the Covid pandemic in 2020, we closed the year with sh900m in the bank. That figure would have never happened had we run around like headless chicken, spreading our energies all over the place.

Things like having a vision and mission statement that drive strategy sounds like text book stuff, “too much English” but when you appreciate that whatever is manifested in physical form is only as good as where it came from the intangibles, you will not be quick to dismiss the Vision thing.

And finally, your business or even you, as a human being can only grow as big as your vision. Small vision small company. Big vision, big company. There are no miracles.

In the 1980s Bill Gates dreamt of putting a PC on every table and became the richest man in the world in pursuit of this vision. But someone had a bigger dream, to put a computer in every hand and today Apple is a bigger company than Gates’ Microsoft.

 

IN BUSINESS DON’T LOOK FOR A CUSTOMER …

Last week during the “Uganda Entrepreneurship congress 2023” at Makerere University business coach Robert Semkula counselled the young, eager students that when they go into business, “Don’t look for a customer look for a friend”.

That was interesting because we all know nothing happens until you sell, sell to a customer.

It was a clever way of saying you need to focus on building relationships with your customers, because again we all know if they like you, you are half way to selling.

We have argued severally in this column that businessmen before they claim the economy is doing badly, should first do an audit of their customer care processes...

As customers we are tired of the bored sales executive whose body language suggests she would rather be elsewhere than be selling to you or the gum chewing, rolling of the eyes, front desk officer who would rather you did not come in their door or the technician who returns your TV or car in such a state that you will be calling him no sooner has he turned the corner.

Our businessmen, we call them that because they are selling something but, in all honesty, have as much luck at success as the sighting of nsenene this season; our businessmen, seem intent on chasing us away from their shops so they can watch Tiktok.

So, imagine if we have some sort of universal epiphany – as I did listening to Semakula, that why when the customer walks in our door, don’t we try to make him our friend by looking beyond the current sale to building a long term relationship? After all the business theorists tell us it is cheaper to sell more to an existing customer than cultivate a new one.

We may suffer a culture shock, but what would this brave new world look like?

It would be that when my car breaks down and I call the mechanic to come check it out, he would be focused on getting to me or one of his people, identifying the problem and taking it off my hands. Once that happens he would give me regular updates – in writing, on what was needed and the progress on the job. To stretch the fantasy, they may have even have loaned me a car to use as they work. The beauty of the loaned car is that they would have skin in the game, they would not forget to work on my car and at the bare minimum would look to get the job done quickly so they can get their car back – before I damage it.

This could work for appliances out of order, the plumbing that needs repairing (in this case they would stay onsite until it was fixed) or even a bad hair job.

Our businessmen see this tender loving care as an added expense they can not afford or worse, that it would be keeping them from serving other customers. But if you think about it, I will remember the service especially if it is replicated routinely and would not hesitate to recommend him to my friends and family. They say people never forget how you made them feel...

As it is now many times we are scared to recommend our handymen because we know their ways of not quite finishing the job and overcharging for it (if you don’t finish the job, whatever you charge will be overcharging). It maybe the difference between when we are asked who is our mechanic, our response not being a sigh and waive of the hand but an eager sharing of his contact over WhatsApp.

Unfortunately, there are enough of us who are bad mannered and ingrates, dissuading our businessmen from being nice and hence the vicious cycle and hence the complaints about the economy being bad.

Talking about a bad economy, it amazes me every day to realise how many people are doing well are quiet about it. The noisy ones are the complainers, while the guys getting paid everyday are seated quietly in the corner smiling inwardly to themselves.

How would you serve your friend if they came to your shop, may be the way to start thinking to reengineer your business.

I remember many years ago when I was looking for a size 14 dress on Johnstone Street. The shop I went into only had size 12. I made as if to leave the shop and go to the next shop, but the shop attendant beat me to the door, urged me to take a seat he would bring the same dress. After a few minutes, which seemed like forever – we didn’t have smart phones, he came back with not one but two dresses a size 14 and a size 16, just in case.

I was getting ready to fork out a little bit more for his effort but he insisted the price was as quoted before. He became my go to guy for clothing and referred him far and wide.

Now his more tech savvy son is the one I meet, since I no longer can be bothered to go to town anymore. They now have several “shop windows” online and the son and his friends seemingly drop whatever they are doing to deliver.

And whenever I ask how business is going the son is quick with a thumbs up, “Mzuri.” Surprise! Surprise!

 

 

LETTING AGOA SLIP OUT OF OUR HANDS

Liechtenstein is a small country in the middle of Europe. It covers an area of 160 square km or smaller than the size of greater Kampala; has population of about 40,000 a tenth of Kampala’s population.

Nothing to write home about, that is until you discover it has the highest per capita GDP in the world of $180,000 by some accounts. The World Bank places it behind only Monaco at $234,317.

For the purposes of this article, we will use Liechtenstein. The net sum of the Liechtenstein economy is to service the bigger EU $17trillion market. They are a tax haven, offering low tax rates for individuals and companies and are a tourism destination. Their central location means people can live in Liechtenstein and commute to work all over the EU. Or better still register their companies in Liechtenstein and operate all over the EU.

The moral issues of providing tax haven services aside, Liechtenstein’s people would not be as affluent as they were if they were situated where the Central African Republic (CAR) is.

The point is you need to attach yourself to big markets like Liechtenstein or Mexico or Hong Kong if you want progress.

A few weeks ago the US announced it was suspending Uganda from the Africa Growth Opportunities Act (AGOA), which allowed free access of our goods to the largest economy in the world duty free. They said they were kicking us out along with Central Africa republic, Gabon and Niger over human rights issues. In our case the passing of the Anti-Homosexuality bill earlier in the year.

The irony of it is that the law was passed through a democratic process, which they are always encouraging us to do, and therefore by their action they want us to subvert the will of the people.

We are damned if we do, and we are damned if we don’t.

The bigger story though is that while we do not neighbour the US, this access to the biggest economy in the world, has been open to us since 2000 and in that time period we have grossed exports of about $200m or about $9m, with the biggest export receipts coming in last year.

Kenya on the other hand grew exports under AGOA to $525m in 2020 from $29m in 2001. If they suspended Kenya there would be a greater impact on their economy than us.

"The bigger story is then is how we failed to take advantage of this giant market when we could and probably explains why we struggle to take advantage of other markets in the region and beyond...

A friend of mine thought he could supply coffee to South Africa. When he got in touch with a major supermarket chain after looking over his business, they offered him space on the shelves of the 14 stores in Cape Town. They wanted him to supply 45 tons of his coffee every two weeks, but in addition have 45 tons constantly on hand in their stores, to maintain continuity of supply.

The logistical and financial demands were such that he had to go tail between legs back to them and give up the offer. To just meet those basic requirements would require he scale up his operations at least fourfold, something he did not have the capacity to do on his own. You can argue that with a bit more sophistication he would have got partners to come in with him on the deal and who knows.

To exploit AGOA we needed to do much more than we saw happening around us. But maybe we are not to blame for criminally squandering the AGOA opportunity when we had it?

Let us not deceive ourselves that we will develop, that is manage a reasonable standard of living for all Ugandans on our own steam. We will have to trade. The formula has worked for the east Asians, Europeans and even the US, so who are we to think we can be any different.

Our technocrats and politicians need to be burning the midnight oil, plotting and scheming on how to break into rich markets. We have to look up and down the value chain to see how we can produce multiples of whatever we are producing now; investments in research will be critical, how we can improve our communications and transport infrastructure –the development of rail and water transport must be treated with greater urgency and all the supporting services in trade negotiations, finance, marketing we will need.

We have worked very hard to get our East African Community up and running. There is still a lot to do, but it can give us a taste of the work we have to do.

The Kenyans, Tanzanians and Rwandans refusing us to prosper by putting non-tariff barriers in our way is standard for any markets and require a certain kind of skill in government we seem to be missing.

So beyond just producing stuff we need to be able to process, distribute, grow and protect those markets...

If we can only take a break from trying to steal public resources we might be able to get this done.