NICK KOTCH: TRIBUTE TO A GREAT MENTOR AND AN EVEN GREATER MAN

NICK KOTCH recruited signed off on my recruoitment into Reuters those many years ago. A young business journalist, he was asking to be an all round correspondent for Reurters in Uganda. 

I am embarassed to say I turned down an initail offer to join Reuters, because I could not be bothered writing about politics and society. Thank God he never gave up on me. I will be forever be grateful for the opportunity it gave me to broaden my perspectives and see the bigger picture.

I admired his commentary and try -- badly to emulate his thought process.

RIP  Nick Kotch

BODAS A TEST FOR MARKET ECONOMICS

Last week I had reason to drive down Bombo road, onto Kampala road before turning off onto Entebbe Road.

I cannot remember the last time I did this. I do not think I will be doing it ever again.

Driving on our capital main thoroughfare, is a nightmare of  hundreds (and I fear I understate this) of boda bodas criss crossing, weaving, ducking and generally causing hypertension on that dual lane carriageway.

Add to that the trucks loading or offloading this or that merchandise, taxis starting and stopping without warning, pedestrians jaywalking all over the place and you really have to wonder. The horror.

Those were my initial thoughts, but when I sat down and tried to make sense of it calmly, I could not help but marvel at how the market works.

First off the boda bodas are responding to a need, a need for transportation, in a city without mass transportation services. They are responding to a need for quick and inexpensive movement in a city clogged with cars...

The urgent need for their regulation is understandable, not least because they have become a power onto themselves, see Wandegeya and Jinja road intersections. But we have to be careful not to throw out the baby with the bathwater.

When I looked in my archives I found a pre-covid article about a Safe Boda end of year party. Hundreds of riders had congregated at Lugogo Cricket oval for day long reveling with family and friends. I remember being in awe at how the company had aggregated all these numbers under one roof – it was rumoured at the time there were about 10,000 SafeBoda Riders, and in doing so providing employment, safer transport and financial inclusion.

But only last week I read another article about Mogo, which has carved out a niche for itself in financing the purchase of motorbikes for boda riders. According to the story, in the last two years they have financed 30,000 bike purchases but since their inception towards the tail end of the Covid, they have helped finance the purchase of  half a million bikes around the country.

For those of us looking from the outside, this number seems like a stretch, but not so much so when you factor in the hundreds, maybe thousands of boda bodas Uganda police has impounded, with little effect on the overall industry.

I remember before Covid thinking, the boda boda industry was a bubble waiting to burst, going by the number of riders I saw not having a fare. I guestimated that at least a third of bodas had a rider only, no passenger. My thinking at the time was that the industry was gearing up for a major correction, as more and more people bought bodas but the market was getting saturated and would prove less viable for entrepreneurs.

I suspect it is not as lucrative as it may have been 20 years ago for the first movers. But like Malthus, the 18^th century economist who warned that the world was doomed as population grew to stretch known resources, I did not factor in innovation, ingenuity and sheer grit of the industry operators.

With Covid came the explosion of the delivery business, which bodas have cornered for themselves. Everyone has his go to boda guy. Especially women. You cannot be a woman worth the varnish on your nails, if you do not have at least have three bodas on speed dial.

One Sunday afternoon I was out to one of our leading restaurants and could not help but notice the number of boda guys waiting to take delivery of orders. On asking the duty manager how much of their business is in deliveries, without blinking an eye, he said 60 percent. And this, when seating space in his restaurant was already at a premium.

So I was wrong those many years ago, that the boda bubble was about to burst. Thankfully so.

That being said, government has to recognize that what was originally a stop gap measure, a plaster, for an inadequate transport system, is growing in to a monster that needs to be regulated.

These boda guys are not stupid. They are aware of the potential threats to their livelihoods that could come with a more organized system. They will organize, if they already haven’t done so and resist any attempts to regularize the system.

We should not forget how one UTODA used to run riot all over the city, their taxis a power to themselves and their business model not unlike a criminal organization.

As is usual, the market is often ahead of the regulators. And thank God for that. Government needs to recognize the importance of the bpda industry, but take a long term view about how to integrate mass transport, taxis and the bodas into a coherent transport industry. The industry or market can very well do this by themselves, but the problem with the market is that it tends to concentrate resources or power in a few hands, and leave the rest exploited and trampled upon.

UGANDA'S ECONOMIC FUTURE: BETWEEN HOPE AND THE GHOST OF AMIN

“We’ve been here before, haven’t we?”

Uganda’s economy is at an inflection point. Again. The familiar script is unfolding—high growth projections, glittering infrastructure projects, oil riches promised just over the horizon. But scratch beneath the glossy headlines, and the cracks are all too visible. Public debt is ballooning. Youth unemployment festers. And the political system remains firmly stuck in an old gear.

It’s an old Ugandan story, one that has played out in different shades since the British lowered their flag in 1962. But are we condemned to rerun history—or can we finally write a new chapter?

Flashback: Amin’s Economic Vandalism

Ask anyone old enough to remember, and they will tell you the 1970s were Uganda’s lost decade. When Idi Amin seized power in 1971, the economy nosedived with frightening speed. His decision in 1972 to expel Uganda’s Asian community—who dominated trade, industry, and finance—was economic suicide.

Overnight, factories stopped. Shops shuttered. Uganda’s once-vibrant industrial belt from Jinja to Mbale turned into a graveyard of rusting machinery. Inflation surged past 100%. Coffee smuggling to neighboring Kenya became more lucrative than legitimate export. Kampala became a ghost town by dusk.

Amin's economic vandalism left scars that have never quite healed. To this day, Uganda’s business class remains wary of state intervention. Cash is king, and the distrust of formal systems is woven into our economic culture.

The Museveni Years: Reform, Boom, and Complacency?

When the NRM marched into Kampala in 1986, they found a country in ruins. But to their credit, they rolled up their sleeves. The economy liberalized. The private sector was revived. Inflation was tamed. GDP growth ticked steadily upwards through the 1990s and early 2000s.

Those were heady days. Banks opened, supermarkets returned, mobile phones became commonplace. Uganda became the IMF’s poster child for post-conflict economic reform.

But as the years rolled on, the glow faded. Corruption scandals multiplied. Infrastructure projects became overpriced boondoggles. Domestic arrears—government bills unpaid to suppliers—ballooned, straining the private sector. By the late 2010s, the private sector was grumbling about the same things: late payments, tax harassment, and a government that had become a poor listener.

As Shillings & Cents has long argued, Uganda’s biggest challenge is no longer external shocks. It is our own fiscal indiscipline and complacency.

“Government arrears to suppliers are not just a cash flow problem—they are a symptom of a state losing control of its finances. Left unchecked, this will choke off the very private sector Museveni’s reforms nurtured.”

The Oil Dream: Promise or Peril?

Now enter oil. Uganda’s 6 billion barrels of oil have been called the ticket to middle-income status. And the numbers do look mouthwatering. The East African Crude Oil Pipeline (EACOP) is expected to drive GDP growth into double digits by 2025-2026.

But we’ve seen this movie before. Nigeria. Angola. Equatorial Guinea. Oil has often been more curse than cure.

Already the warning signs are there. Environmental protests are growing. Western financiers are pulling out. Questions about how revenues will be managed remain. And our governance systems—well, let’s just say they were not designed to handle billions of dollars sloshing around.

Uganda must confront this reality head-on. Oil revenues need to be invested in diversifying the economy, not in flashy projects or patronage politics. Otherwise, oil will leave us with little more than polluted wetlands and a shattered macroeconomy.

The People Question: A Young Nation on Edge

Uganda’s population is young. Very young. With a median age of just 16, our youth should be our biggest asset. But the hard truth is they are becoming our biggest challenge.

Every year, hundreds of thousands of graduates join a labor market that simply can’t absorb them. The boda-boda economy is now an employment strategy for graduates. This is unsustainable.

Without urgent reforms in education, skills training, and job creation, we risk creating a generation that feels cheated—and whose frustrations could spill over onto the streets.

Agriculture: Still Our Golden Goose?

Despite the oil hype, agriculture remains Uganda’s economic bedrock. Over 70% of Ugandans depend on it. Yet, productivity remains low, post-harvest losses are staggering, and value addition is minimal.

There are bright spots—like Bayaaya Specialty Coffee in Sironko, where women are driving high-quality exports to Europe. But such initiatives remain isolated islands of excellence.

Uganda must modernize its agriculture. That means investing in irrigation, storage, agro-processing, and market access. Without this, the sector will continue to underperform—and Uganda will remain stuck as a raw commodity exporter.

“Forget the oil for a moment. The fastest route to inclusive, job-creating growth is through agriculture. If we get that wrong, everything else is noise.”

Infrastructure: Debt and Glory?

Uganda’s skyline is changing. Expressways, dams, airports—they are all symbols of ambition. But they come at a steep price. Uganda’s debt has swelled to over $24 billion. Debt servicing now gobbles up over 40% of domestic revenues.

Infrastructure must make economic sense, not just political sense. Roads to nowhere and dams without industries to feed will haunt Uganda’s balance sheet for decades.

Regional Integration: Our Neighbors, Our Lifeline

Uganda’s economy does not exist in a vacuum. Our links to the East African Community (EAC) are critical. But tensions with Rwanda and Kenya over the years have shown how fragile these ties can be.

Uganda must play a smarter regional game—positioning itself as the logistics and services hub of the Great Lakes region. That requires diplomacy, trade facilitation, and resolving the perennial non-tariff barriers that stifle regional commerce.

Climate Change: The Storm We Are Ignoring

Uganda’s planners are obsessed with oil and infrastructure. But the biggest threat to the economy is quietly creeping through our fields and rivers—climate change.

Droughts are becoming more frequent. Floods are washing away crops and homes. Agriculture is under siege.

Uganda’s future will depend on how quickly we pivot to climate-smart agriculture, renewable energy, and water conservation. Ignoring this will be catastrophic.

The Governance Question: The Big Unknown

Finally, the elephant in the room—politics. Uganda’s economy, like its politics, is dominated by a single man who has been in power for nearly 40 years. Whether Uganda can transition peacefully into a post-Museveni era will be the ultimate test of its economic resilience.

Investors need predictability. Businesses need rule of law. Uganda’s prosperity hinges on building strong institutions, ensuring peaceful succession, and cleaning up governance.

 Will This Time Be Different?

Uganda stands on the brink. It has the resources, the people, and the geography to become an East African powerhouse. But the weight of history is heavy.

Will oil transform Uganda—or will it become our curse? Will the youthful population become an engine of innovation—or a force of unrest? Will we fix our fiscal house—or mortgage our future?

These are not academic questions. They will define whether Uganda’s next 20 years will be a golden age—or a tragic rerun of old mistakes.

History is not destiny. But only if we choose to learn from it.

OF CREDIT, COLLATERAL AND COURAGE: WHAT THE GROW LOAN IS TEACHING US

When the GROW Loan started rolling out its billions last year, I was sceptical. Not because the idea was bad—on paper, it sounded like the kind of thing development wonks dream up over coffee in climate-controlled boardrooms. But because I’ve seen this movie before: government-backed loan schemes that arrive with fanfare, fizzle quietly, and leave little more than PowerPoint decks and donor reports in their wake.

This one, it seems is different.

To be fair, the GROW Loan—part of the larger GROW Financing Facility (GFF)—isn’t just about chucking money at a problem and hoping it sticks. It’s about deliberately targeting women entrepreneurs, including refugee women and those in host districts, and giving them a financial ladder to climb out of informality and survival-mode hustling.

"By April this year, over UGX 50 billion had been disbursed through six commercial banks—Centenary, DFCU, Equity, PostBank, Finance Trust and Stanbic. There are three lending levels based on loan size (UGX 4m to UGX 200m), and performance grants to sweeten the deal—5% for women, 8% for refugees, and 10% if you tick both boxes.

The average loan for Level 1 (the smallest category)? Around UGX 10 million. That’s your classic salon, poultry project or boda spare parts shop. But here’s the kicker: 28% of borrowers had never touched formal credit before. That’s not just a number; it’s a quiet revolution in how women engage with money and formal finance.

And yet, not everyone is toasting champagne.

The demand is undeniable, with more women being turned away than qualify for the facility. The eligibility hurdles are real. Many women assumed “GROW” meant “free money” or “soft cash.” But when they turned up at bank counters, they were asked for cash flow statements, business records, and—brace yourself—collateral.

Even though PFIs accepted everything from land sale agreements to livestock and even Bibanja land, the reality is that many women—especially younger or unmarried ones—don’t own property or control assets in their names.

So what happened?

Well, the women who made it through the vetting process did something quietly transformative. They converted informal networks into formal credit behaviour. Some roped in their spouses as guarantors. Others leveraged group savings schemes to back their applications. And quite a few went back to the drawing board—pulling together the paperwork, the proof of business, the receipts.

This tells us something profound: women aren’t credit risks. They’re system survivors.

Still, if we zoom out, some uncomfortable patterns emerge. For one, Greater Kampala alone took 45% of the loans. Meanwhile, refugee-hosting districts got a measly 3%. That’s a far cry from the equity narrative being spun in the project’s mission statements.

Then there’s the age gap: just 4.2% of borrowers were under 30. It seems the banks still don’t trust our young women—or maybe they haven’t figured out how to speak their language yet. Because trust me, Uganda’s young women aren’t short of hustle. What they’re short of is formal documentation and someone willing to take a chance on them.

To be fair to the project managers, they’re not blind to these gaps. Plans are already underway to onboard SACCOs and MFIs—especially in underbanked areas—to push GROW Loans deeper into the grassroots. They’re also investing in post-loan business development support, so these women don’t just get a cheque and a prayer.

But what really gives me hope is this: they’re listening. Not just to disbursement figures but to borrower voices. Field visits, testimonial videos, even those brutally honest borrower engagement sessions—they all point to a project that understands that money alone doesn’t change lives. Trust does.

And that’s the real story here.

"The GROW Loan isn’t just about expanding access to credit. It’s about rewriting the terms on which women interact with Uganda’s financial system. It’s about seeing Bibanja land not as a bureaucratic headache but as real-world collateral. It’s about understanding that a boda-stage matron with no paperwork could still be running one of the most consistent cashflow businesses in her parish.

It’s about credit with empathy.

The next few months will tell us a lot. If the PFIs can crack inclusion in refugee districts, if SACCOs can step up, and if the system starts trusting youth a bit more, then GROW could end up being more than just another acronym in Uganda’s development alphabet soup.

It could become the blueprint for inclusive finance.

 

MOBILE MONEY FORCING A RETHINK IN THE FINANCIAL SECTOR

About a fortnight ago MTN mobile money and absa bank published their 2024 results, on the same day in the newspapers.

Absa formerly Barclays, has been in Uganda since before independence while MTN mobile money will make 15 years this year. But the banking services MoKash will make only nine years, later this year.

The interesting thing about the numbers is that MTN Momo, last year with after tax profits of sh250b was more profitable than absa – sh177b. A trend that we obviously missed, because in the previous year MTN Momo was already more profitable than absa with net profits of sh202b as compared to the bank’s sh146b...

Even more interesting is that MTN momo did this with a smaller asset base of sh1.6trillion versus sh5.4trillion for absa. While absa’s return for its share holders, about 21 percent beats that of the mobile money provider – 15 percent how long before even this number is flipped the other way?

When the history of Uganda is written this overhauling of the banking sector by fintech will be an interesting one to study.

But the effect is not only on the banks, the whole economy is being reconfigured around the relentless march of the fintechs, led MTN and Airtel’s mobile money platforms.

From 2005 to 2015, the telecom sector laid the groundwork for digital inclusion, predominantly through mobile voice services. But the real transformation began in the next decade, from 2015 to 2025, when mobile data and fintech services surged to the forefront, redefining Uganda’s digital landscape.

Between 2005 and 2015, Uganda’s telecom sector was at a turning point. The mobile phone revolution was in full swing, and mobile voice services were rapidly growing, with the subscriber base expanding from just a few hundred thousand to over 10 million by 2010.

This surge was driven by the affordability of handsets, falling tariffs, and increased competition between mobile operators.

By 2015, the number of mobile subscriptions had reached an estimated 17 million, a clear indicator that Uganda was becoming a mobile-first society.

But while voice services dominated the telecom scene in the first decade, mobile data and mobile money were still in their infancy. Data services were beginning to gain traction, thanks to the advent of 3G networks and the proliferation of affordable smartphones. By the end of 2015, mobile internet subscriptions were still relatively low compared to voice services. Only about 5 million Ugandans were using mobile internet, a far cry from the mobile voice subscriber base. The usage was mainly confined to the urban centers, with rural areas lagging behind in terms of internet penetration.

Mobile financial services, began to make their mark starting around 2010, with MTN Mobile Money and Airtel Money leading the charge. While still in the early stages, these services offered basic mobile money transfer capabilities, allowing users to send and receive money via their phones. By 2015, mobile money services had registered around 10 million users, signaling a growing appetite for financial inclusion among the unbanked. However, profitability from mobile money remained limited, with many telecom companies still focused on expanding their user bases and network coverage.

Fast forward to the period from 2015 to 2025, and telecom services in Uganda have gone through a seismic shift. While mobile voice services continued to grow, the pace slowed as the market became increasingly saturated. By 2020, Uganda’s mobile subscriber base had crossed the 23 million mark. But voice services are no longer the golden goose they once were. Instead, the real growth story is in mobile data and mobile money.

Mobile data, in particular, saw explosive growth with the introduction of 4G networks, allowing Ugandans to enjoy faster internet speeds and access data-driven services. This year mobile data subscriptions are expected to exceed 15 million, a huge leap from the 5 million recorded in 2015. With more Ugandans relying on mobile devices for everything from entertainment to education to work, data has become a critical enabler of economic activity.

Mobile money subscriptions are projected to exceed 20 million – MTN mobile money reported 13.8 million active users, outstripping traditional banking services by a significant margin.

The profitability of mobile money services has grown exponentially in lockstep with rising subscribers. Industry players expect that mobile money could account for up to 40% of revenue for major telecom operators in Uganda, a sharp increase from the minimal contributions seen in the earlier period.

The mobile money revolution has been such that, more than before 2015, telecom services have become central to Uganda’s economic engine. The sector has become a major driver of financial inclusion, spurring economic activity, enabling access to digital services, and providing new opportunities for business growth as handsets have gone from being luxury items to indispensable tools of everyday life.

In 2005–2015, mobile voice was the star, with data and mobile money services just beginning to take off. By 2015–2025, the narrative had shifted dramatically, with mobile data and mobile money leading the charge in terms of growth and profitability. MTN reported in 2022 that for the first time revenues from voice had fallen below 50 percent of total revenues.

The banks have not been left behind with all beefing up their online presence, but clearly the momentum from mobile money and the fintechs is irresistible and forcing a rethink in the financial sector.

 

THE BUJAGALI TAX WAIVER

 Almost a decade ago in 2016 President Yoweri Museveni made it known that he wanted the power tariff to be charged to big industrial concerns to be not more than US5cents.

At the time the biggest drivers of the tariff were Bujgali Uganda Ltd (BUL), distributor Umeme and South African firm Eskom, which had the concession to run the Kiira-Nalubale power complex.

Folding Kiira-Nalubale into the Uganda Electricity Generation Company Ltd (UEGCL) last year and the end of the Umeme Concession in March were in aid of Museveni’s wish.

In addition, government allowed a refinancing of BUL’s debt, extending the repayment period so the interest payments can be lower, with the savings reflected in the tariff.

But it was also established that because in the contract BUL was guaranteed a certain capacity charge, to lower what BUL charged,  government committed to giving Bujagali a tax waiver for the duration of the loan, whose tenure comes to an end in 2030.

"According to the Auditor General’s report, which parliament commissioned last year, with the tax relief BUL would charge UETCL 19.58 percent less for power generated. An Electricity Regulatory Authority (ERA) report pointed out that without the tax waiver end user tariff would increase by 4.7 percent...

Parliament’s Finance Committee while deliberating the Income Tax Bill 2025, however think that BUL should not have an extension of the waiver, which ends in June, arguing that BUL have been overcharging consumers since their 250 MW dam was commissioned in 2012, have redeemed much of their investment already and that previous tax waivers have not caused an appreciable reduction in the tariff.

This means that if government wanted to lower the tariff, it would cost BUL money and threaten the viability of the concession which runs out in 2042.

But first let us go back to the beginning of Bujagali and why it produces the priciest power in Uganda. At the end of the 1990s American firm AES Nile Power started the process of trying to develop the Bujagali dam. The country was in the throes of frequent loadshedding, as the Kiira-Nalubale power complex’s 380 MW was below peak demand.

The novelty of the investment in Uganda attracted political opposition and unfair sniping from the environmental lobby, delaying development and AES run out of time and surrendered the project.

A consortium fronted by the Aga Khan took over the project and the dam was commissioned in 2012 putting an end to the daily loadshedding we had become accustomed to.

A lot of the contracts in the power sector were negotiated at time of uncertainty. There were barely 500,000 customers when Bujagali came on line, the economy was still recovering from years of mismanagement and civil war and no one else wanted to commit the nearly $900m needed to develop Bujagali. The government did not have the money to do it and traditional lenders like the World Bank did not think Uganda needed an additional 250 MW...

During intense conversations to renegotiate the BUL concession a decade ago, when Museveni first started pushing for the US5cents tariff, several options were explored including buying out BUL totally, but this option would not have the desired effect of lowering the tariff, in fact quite the contrary. Hence the tax waiver.

The bottom line is that the tax waiver is still required to achieve our goal of cheaper power for Uganda. We forget the ripple effect affordable and available power has on the general economy, which it can be argued far outstrip the tax losses.

At the height of the loadshedding in the early 2000s it was estimated that businessmen were losing at least 30 days of production annually. This was an average, the reality was much worse and included the increased cost of running diesel generators to do business.

 

DOING BUSINESS IN UGANDA IS HAZARDOUS BUSINESS

The recent Umeme debacle has taken me back years, reminding me how difficult it is to do business in Uganda.

Umeme last week announced they would dispute the $118m (sh433b) government had paid them, arguing that they have got strong grounds for the full payment of what they claimed -- $234m. And an additional $9m for works in progress is also being negotiated.

Umeme’s 20 year power distribution concession came to a close at the end of March. Under the terms of the concession they were supposed to be paid any unrealized monies from the investments they made that had not been paid for through the tariff.

The Auditor General’s recommended figure was half what Umeme had claimed. The AG arrived at his figure because the regulators who were supposed to be overseeing the concession, claimed there are investments they did not sign off on and therefore Umeme was not due compensation for them. So maybe they should park them up and go with them?

Questions should  be asked of the regulators of how billion shilling outlays were made without their knowledge. It is not as if Umeme was smuggling in stock into the bar to sell as their own, without the owner knowing.

"Businessmen are not saints and hence the need for regulation. But I fear that while as a nation we claim that we are a private sector led economy, our government and specifically its bureaucrats, go out of their way to make it difficult to do business in this country...

Either there is a wholesale ignorance of how businesses operate, which would be a hard sell – this is not 1970s Uganda or that they are intentionally throwing up hurdles for business for ulterior motives. Your guess is as good as mine.

It reminds me of the privatization process and how we lost a lot of value and prize investors because our officials and politicians just did not get it. Or didn’t they?

The winner had to be the attempted sale of the Coffee Marketing Board (CMB). The sector had just been liberalized so CMB’s market share had plummeted to about 10 percent. Nevertheless the Privatization Unit (PU) were touting its near obsolete four million bag a year processing plant and the land on which the CMB sat in Bugolobi as the key assets.

"During the first round of bidding Swiss trading firm, Sucafina, bid $8m, the highest for the offered 49 percent of the company. MPs were jumping up and down calling Sucafina daylight robbers and other less charitable names from the communist lexicon. All because the net asset value of CMB being offered was an inflated $40m. The politicians ordered PU to cancel the bid and retender the offer. This time Sucafina was the only bidder and offered only $4m. The politicians huffed and puffed and, as if to cut off their nose to spite the face, they cancelled the whole sale of CMB.

Needless to say CMB collapsed with its processing capacity and the site is now being sub optimally used for other things. Maybe we would like to check whether it still belongs to the Government of Uganda.   

Who knows if Sucafina had taken over CMB, Uganda would have made bigger inroads into the global processed coffee market. Now we are busy fighting shadowy types who are trying to corner our coffee market.

The MPs publically failed to make the distinction between net asset value, the stated value of the company on the books, when you subtract liabilities from assets and what the market is willing to pay. The latter being a function of market share and how much remedial work they would have to do to get the company up to full speed among other things.

Of course, the cheaper the businessman can get it the better for him. But us on the other side of the table as the sellers, beyond the dollar amount, need to factor in the improvements in service, tax revenues and job creation that passing on these tainted assets to a more efficient producer would mean.

Providing the investors with the right environment can be wildly beneficial for the improved living standards of the citizen.

Another privatization that had politicians snorting and grunting was the sale of the Uganda Commercial Bank (UCB). The bank, which controlled about 80 percent of deposits was a load stone on the industry, its inefficiencies affecting the whole sector.

While it was profitable at the time of its sale this was only managed by some clever accounting. The government extracted sh100b in bad debt and filled  the hole with bonds, and to ensure it did not build up its stock of bad debt, a moratorium was placed on all lending. For income UCB was just buying double digit yielding government paper. Who would not be profitable under those circumstances?

The politicians at the time fought its sale, arguing that it was giving up too much of the economy to foreign interests. Well the alternative was to keep it and sink the banking industry permanently.

After a failed attempt to steal the bank by some local players, the central bank took it over and sold it to Stanbic.

In 2019, 

about 20 years after the bank was sold, Stanbic paid the treasury $22m in tax on profit, about the amount they bought the bank for in 2002, and every year since they have paid more than $20m in taxes. But that is the smaller benefit to the economy. By being more efficient than its predecessor they are lending to the private sector. Last year Stanbic’s loan book stood at sh4.2trillion or about $1.1b. The government’s budget in 2001/02 was about $1.3b.

Whether business is foreign or local, is not a concern of the man on the street, who benefits from improved services, jobs and the services that come with the increased taxes. But rather it is the interest of an elite, who want to usurp these assets for themselves and the rest be damned.