LET’S AGROPROCESS… EASIER SAID THAN DONE!

It should be straight forward. To increase rural incomes increase the productivity of their farms so they can build surpluses that can be sold to the market.

But the devil they say is in the detail. Increasing farm yields would have to involve improving farm practices – fertilizer use, irrigation and lower post-harvest losses and on am more macro level rejig land tenure systems, resuscitate cooperatives and avail financial products tailored to the sector.

OK so the farmer improves his yields. We know the market is there -- you will be shocked how much the residents of Kampala alone consume. Thankfully too Kampala’s consumers don’t have such high standards for what they consume.

So we have increased yields and there is a market the question is how do you connect one to the other.

It goes beyond just loading trucks at source and unloading them at the market. There are issues of post–harvest processing, storage, packaging, quality assurance and to name but a few.

So while we may lament our farmers’ poor productivity there are serious deficiencies in the value chain before we can even begin agro-manufacturing on a sustainable scale.

For the time being a lot of our manufacturers are doing these intermediate processes themselves, but is an inefficient way of doing things. Their speciality is not buying, transporters and storage. Unfortunately there are few companies that can intercede between the farmer and have the confidence of the manufacturers.

Enter Savannah Commodities. The company tucked away on an acre of land in industrial area does the bulking, processing and storage of coffee for export, but also does the same for maize, barley and sorghum more for use by local industry.

The decade-old company, the brainchild of Hannington Karuhanga, is now looking to triple its processing capacity with a new multi-million dollar facility they are developing in Mukono, where they shall shift all their grain processing leaving the coffee facility in industrial area.

“It is the only logical thing to do. We need to move up the value chain not only to capture more of the value for ourselves, but it’s the only way we will improve rural incomes in a sustainable manner,” Karuhanga said recently.

As it is now through processing his own coffee contracts and hiring his plant to others, the industrial area plant is the biggest single processor of coffee in this country.

His eleven years of experience in exporting coffee and now processing of grain for the local market give Karuhanga a real appreciation of what it will take to build up this part of the value chain.

“This is a real capital intensive business. We have painstakingly built up capacity on our plot here but we have gone as far as we can and need to move out and hence the Mukono development,” said Hannington, who cut his teeth in the coffee business with a local affiliate of Swiss coffee trading giant, Sucafina.

“In moving to the next level we cannot get away from it there is an urgent need for development financing in this market, for money that has longer tenure periods than the ones we have on the market,” he said.

Savannah was recently at the center of a financing snag at Uganda Development Bank (UDB). An $11m facility that was to be used to finance the Mukono expansion was halted erroneously in his view, but thankfully he was able to get alternative financing.

Barring any accidents, “The plant will be up and running in January,” he said.

The point is, he is quick to emphasise, that in order to transform the country we need to empower our local entreprenuers to build capacity to play at a higher level, otherwise he argues exploiting our agricultural potential will remain a pipe dream.

Savannah is one of our more developed proccessors, but there are numerous other agroprocessors struggling against incredible odds to survive.

Supporting this sector through improved transport and energy infrastructure and flexible financing would be just as strategic an intervention as any the government is currently pursuing.

MUST LEARN LESSONS FROM STEPHEN KIPROTICH

It is old news. Stephen Kiprotich last week won gold in the World Athletic Championships in Moscow. Like in London a year ago he took on the favourites – this time the Ethiopians, run them into the ground before strolling to a much deserved victory. 

For fear of stating the obvious Kiprotich is a national hero. But more importantly we can glean important lessons to apply to our daily lives.

So here goes my top four list of lessons to learn from the double gold medalist

#4. Aspire to substance over style

Life they say is a marathon not a sprint. You can’t blast out of the blocks and have nothing left over for the next 42 km.  You have to pace yourself. Though he comes from a humble background it means forgoing the home comforts of home with his family for weeks on end. It means logging hundreds of miles in the freezing cold of the Kenyan highland, running on nothing more than siturungi (black tea) and a half a loaf. It means battling through nagging injuries, flagging morale and frequent setbacks. It means pushing yourself beyond what you thought was humanly possible. To last the distance you have to have a higher goal than just attaining the simple luxuries of life, looking good around your friends or even winning gold. “I want to be a legend,” he told us before the London Olympics. One gold, or even two, do not a legend make.

#3. Ignore the illusion that you have arrived

If Kiprotich was a mere mortal like many of his Ugandan countrymen after bagging gold in London last year he would have hung his life size portrait on his seating room wall, put up his feet and begun to live “the” life. Thankfully he did not. He weathered the distractions of the post Olympics celebration to explore his potential further. Since the Olympics he has won a half marathon in Amsterdam, came in sixth in the London Marathon and now won the World Championships.

And if the young man is to be believed he is not done yet, “I know it’s not easy. But I want to become the first Ugandan to win these competitions twice,” he said referring to the Olympics and World Championships.

#2. No one is going to do the work for you

There is a lot of lack in Uganda. We lack good roads. We lack good leadership. We lack money. We lack shoes. The easy thing to do is blame our inadequacies on our lack and roll over and die. But Kiprotich has shown that lack is not an excuse. He had a dream and has gone about creating it. When his full story is eventually told -- the struggle, the despair, the pain, everything he has gone through the rest of us whiners, will shut up. US rapper 50 cent in reflecting on what Barak Obama has done for African Americans said, “Obama has taken away the excuses.”

#1 Repeat over and over again

There is method to his success and since he has done it himself and has shown he can reproduce the formula there is no reason we shouldn’t expect more of the same. That is how enduring success is created you search and search for a method that works for you, and when you do find it, you repeat it over and over again. But if we are always looking to short circuit the process, to find short cuts or are in pursuit of that “one” deal that will solve our lives problems for good, we will miss the benefit of the process and even if we enjoy some success when it fades away we will not know how to reproduce it.

In the 34 million Ugandans I am sure there are many more heros. Kiprotich is lucky – where luck is opportunity meeting preparation, to have his success celebrated by the whole world.

But yes, as a model of keeping nose to the grinding stone, ignoring friend, foe and even family’s initial skepticism about his dreams and remained steadfast in the wake of initial success, there are very few around we can show up to our children and say “Yes! Be like him. That is what a good man is made of.”

UGANDA SPEAKER’S SITUATION TRICKY AT BEST

This week speaker Rebecca Kadaga called on government to respect parliament following what she thought was criticism of her work by Prime Minister Amama Mbabazi.

She took exception to Mbabazi’s claims that opposition members were visiting her privately in her chambers and the suggestion that they maybe influencing her work.

Kadaga argued that she was a speaker of the house and not only of the NRM, in which she is a senior member and of which Mbabazi is the Secretary General and she is supposed to be neutral in her dealings and not lean towards her parent party positions.

This incident raises interesting questions about the separation of powers between parliament and the executive and revives the debate of whether the speaker of the house should belong to any party or even be a serving MP.

The UK, with the world’s oldest parliamentary system, has a speaker who is an elected MP and retains his seat in the constituency while severing all ties with his party.

The speakers position started as an agent of the King or crown but evolved over the last 500 years into the non-partisan position that it is today.

One of the key moments in this evolution was when King Charles I in 1642 stormed the house of commons with an armed force to arrest five MPs who he accused of treason. The speaker of the day refused to give them up arguing that he works at the behest of parliament and not the King.

In referring to best practice we largely cut-and-paste this formula into our constitution.

However the writing into law is one thing and the actual practice is another.

In the UK centuries of practice has created a tradition not all of which is written down but is understood and appreciated currently.

Our parliamentary procedure is less than 20 years old, too short at time to create enduring tradition.

The current situation therefore is a useful one. It may cause some discomfort on both sides but its resolution will only serve to improve our democratic practice.

The two options are to retain the status quo and muddle towards the ideal following many tests of speaker’s neutrality or write it into the law that the speaker once elected relinquishes elective office and any affiliations he or she may have to the mother party thus allowing him a semblance of independence.

The principle of separation of powers is an important pillar of any democracy and an ideal we should be actively working towards.

The current spurt between the speaker and the prime minister shows how difficult it is to maintain this separation’s integrity and we can expect that more friction will be witnessed in the future.

Of course opposition to a totally independent speaker would come not only from the party with the majority in the house but even from a seating speaker.

The majority party which invariably calls the shots as to who will be speaker want someone they can rally to their course whenever the need arises. That is understandable. But any speaker, a politician in their own right, may not relish the idea as this may distance them from the central government and throw a spanner in future ambition.

The UK has settled on an interesting middle ground that allows the speaker to eat his cake and keep it. 

The UK speaker remains an elected MP during the duration of their tenure in the chair. They however cut off all ties with their parent party. When they seek reelection in the next election the speaker does not run on any party ticket but is referred to as “The speaker seeking re-election” but in addition there is an unwritten rule that the speaker is not opposed by a candidate from a major party.

UDB: THROWING THE BABY OUT WITH THE BATHWATER?

A few weeks ago the IGG had senior officials of Uganda Development Bank (UDB) hauled before the courts, alleging that they had victimized a whistleblower.

The whistleblower earlier this year had reported to police that there was something irregular with a $11m loan being processed for Savannah Commodities Ltd. Savannah needed the money to increase their grain processing capacity. More on that later.

It always plays well before the gallery when the big fish are arrested and paraded before the public. The clamour for something to be done about corruption is palpable wherever you go.

The financial system is not immune to its share of shenanigans but the way you confront corruption in the financial system cannot be the same way you confront the village thief, still licking his fingers after disposing of the stolen chicken.

The financial system is based on confidence, you undermine that confidence and nothing will be worth anything. If you think about it the money we carry in our pockets is just a coloured representation of our confidence in the government and our financial system. A dent to that confidence leads to debasement of the currency – the reason governments come down hard on money counterfeiters.

A bank’s biggest asset is the confidence of its clients and business partners. That is how bank’s can collect deposits many times the size of their shareholders’ capital.

No economy can grow or sustain growth without a financial system which commands the confidence of the population. Ask the western economies. At the heart of the recent global financial crisis was a collapse in confidence in the financial system.

The law enforcement agencies should investigate all criminal allegations to their logical conclusion wherever it is suspected that they have been committed.

However one has got to wonder about the current case against UDB’s officials.

At the center of the case is the loan to Savannah Commodities. The whistleblower brought this to the police attention because it seemed to contravene banking laws. According to the law a bank cannot lend to one player more a certain percentage of its capital. The $11m being processed for Savannah well exceeded this limit.

What the whistleblower neglected to mention to the police is that the loan to Savannah was not from UDB. The multi-million dollar facility was to come from the Cairo based African Export Import Bank with UDB serving as its agent in Uganda. So UDB was not bursting its own limits in facilitating the loan.

Of course as a result of the brouhaha the loan has not been disbursed, which may be the lesser loss in this whole sordid affair.

As for victimizing the whistleblower the court proceedings will make for interesting reading too and may serve as a useful opportunity for the IGG to re-examine its procedures.

To sustain development of any economy development banks are a key piece of infrastructure. Development banks have access to long term funds which can be used to finance the big projects in infrastructure, manufacturing and real estate, which take a long time to show results and therefore cannot be helped by short term loans offered by commercial banks.

For the law enforcement agencies run rough shod over an institution like UDB on the strength or weakness of an allegation you wonder about uncoordinated troop movements in the government.

On one hand we are talking about attaining middle income status in the next decade or so and with the other hand we are ripping out the guts that will make that aspiration real.

Again the law enforcement agencies have every right to go after suspected errant officials, and given the current climate in the country they will have plenty of people cheering them on. But they must be sensitive to the reality that their actions have far reaching repercussions for the country.

Millions of dollars in much needed long term finance to this country have now been frozen or cancelled all together on the basis of a case that the courts I suspect will make short work of. And for what? So that some official can earn cheap marks?

In our exuberance to fight corruption we need to be careful that we do not throw out the baby with the bathwater.

GOD GIVES MEAT TO THE TOOTHLESS

Earlier this the year CNN Travel, a television magazine program watched by millions of travelers, voted Kidepo National Park the third best tourist destination in Africa.

While launching a new product last week, the Ik On Moru Engole nature walk Johnson Masereka’s the area conservation manager said, numbers to the park had spiked since the nomination.

The CNN Travel magazine described the park as “Uganda’s most beautiful, remote and least explored park …. Those who take the trouble to get here are rewarded with phenomenal wildlife sightings and a level of exclusivity that can rarely be had at any cost in neighbouring countries.”

Its main attractions they say are spectacular landscapes and great buffalo herds.

"The interesting thing about Kidepo is that its probably the least developed in terms of infrastructure. In fact visitors to the park report that it is a cause for more than worry when it rains in the area and churns the roads into a muddy morass, impassable by even the sturdiest offroad vehicles...

Kidepo is just one in numerous tourist attractions in this country, many of which we nationals take for granted and if  the inaccessible, park is being feted around the world one wonders what will happen when they see our other parks.

This kind of effortless endowment is at the heart of many of our problems. They say that God gives meat to those who don’t have teeth.

Country with not even a tenth of our natural beauty are drawing in millions of tourists who shell out billions of shillings a year.

In a recent survey of the most popular tourist destinations, 2013 by Business Insider magazine it had Bangkok at the top with almost 16 million tourists expected this year who will shell out more than $14b.

Not to downplay the country, but a religious attraction here and there and that exotic Asian appeal may account for its popularity among tourists. But how do you explain Riyadh, Saudi Arabia or Taipei, Taiwan or Shanghai, China or even Dubai? In terms of natural endowments all of these cities put together do not even come close to Uganda, yet all of them pull billions of dollars in revenues annually.

But we shouldn’t look too far for the answer.

Compared to these cities, Uganda is generally an inhospitable country for a tourist.

One thing that these countries have mastered is how to provide a likable experience for their guests. It goes beyond the toothy but sincere smiles we flash around as Ugandans.

Coming into Entebbe Airport after marveling at the approach over the shimmering lake, you are met by long lines at customs, a long wait at the conveyor belt before wading through unruly taxi drivers jostling for your attention.

"If you land at night you drive out on an unlit narrow highway, arriving in Kampala where the traffic laws as you know them count for nothing and there are no road signs to tell you where you are. If you are not a high flyer you want to live in a decent hotel, not the high end names, but there is no way of telling this unless you visit the hotels and test the taps and light switches for yourself. Then how do you get around this town? There is no bus service, no underground. And the taxis? You really don’t know whether you can trust them...

This before you try to get out to the parks and there are any number of tour guides and agencies operating out of hard to verify premises, it’s a miracle we haven’t had more tourist horror stories.

For us Ugandans we know how to maneuver through this mayhem, but for a visitor, on their first visit to Uganda it can be a testing experience.

A regular globe trotter would argue that this is not an unusual experience wherever they land, but the leading tourist destinations have institutionalized small things like updated city maps, road signs, information services, public transport to make these experiences as painless as possible.

How else do you explain that Singapore, a barren rock in the ocean, attracts 12 million people annually, about three times their population, who willingly divest themselves of $13.5b – or more than half Uganda’s GDP, while last year barely a million visited us?

It’s a scandal.

Word of mouth endorsement is more powerful than any million dollars spent on a dodgy tv ad campaign; if the tourists are happy here they will not only return but they will recommend it to their friends and relatives and they in turn will pass on the message.

"The billions we are planning to spend on an airline that will be dead on arrival, will be better spent improving the Entebbe airport experience, lighting our streets, improving the security, specifically in our towns and around the tourist attractions, generally working on making our visitors feel at home...

It is all very nice that Kidepo is top of the range but we need to move beyond just banking on our natural resources and invest to attract the tourists who are so attracted to our wonders --- but only from afar!

MAKERERE UNDIG YOUR HEAD FROM THE SAND

This week the university council closed Makerere University indefinitely. This was triggered by the lecturers’ demand for a doubling of their pay, a demand the university nor government, its main backer said was feasible.

This is yet another cross road in the history of the once hallowed institution.

It is possible that Makerere’s teaching staff are under paid. It is even possible that the government could cut other expenditures to meet lecturers’ demands many times over. And it is conceivable that the university can regain its former glory.

What is for sure is that the university is running out of goodwill and the unthinkable could happen to it if its leadership does not seat down, appreciate the challenges to its very existence and take the appropriate steps required to revitalize the once “Harvard of Africa”.

At one time Makerere was the go to university in the region. That changed with establishment of the Dar es Salaam and Nairobi Universities. In the recent past Makerere was the only university in the country. That changed with the liberalization of tertiary education.

Each of these and many other development in the education sector, including the  university’s fading glory means that its centrality to our education system is now in question at best, or a nostalgic myth at worst.

And if Makerere has not read the writing on the wall yet, let it know it’s not at the top of government’s funding priorities.

Of course the dons on the hill would vehemently disagree with this analysis and that would be unfortunate.

Appreciating these changed times would make them appreciate why the government seems reluctant to foot the bill for the elite institution and wake them up to the new, mostly painful changes, they will have to make to remain relevant.

Faced with less than finite resources, competing demands and a cold hard political calculation it is possible, even conceivable that Makerere can be left in limbo, privatized altogether or shut down and it’s valuable real estate apportioned to the usual suspects.

Makerere’s key problem is not a lack of cash but an inadequate management.

For an institution that is as asset rich in lands, intellectual property and good will, to even need to rely on government at all is a scandal that points to a management that cannot unlock the wealth on which it seats.

The best universities in the world get some money from their respective governments and student tuition,  but these are not the major sources of their income.

The UK universities from whom Makerere University derive its legacy, still rely on government sponsorship and student fees for the bulk of their funding. A model that is coming under strain as the UK government works to cut its contributions in the light of the recent global financial crisis.

Makerere should look to Harvard University, which has an endowment fund, the biggest source of operating income for the famous university monies. An endowment fund comprises of monies set aside for investment and the income used to run the university.

Tuition accounts for less than a fifth of the university’s income with about a half of its funding coming from research sponsors.

Obviously Harvard with its $50b endowment fund, the biggest of any university in the world,  has more muscle than our Makerere but the Harvard’s $2.4b operating budget similarly dwarfs Makerere’s $50m or so budget. 

They say the best time to invest is 20 years ago and the next best time to invest is today.

Makerere can start where it is, sweat its current assets, begin to build and endowment fund with a view to weaning itself off – or at least reduce its dependence on the central government, otherwise when the day of final reckoning finally comes it will throw up some very unpalatable alternatives.