KARUMA DAM: LET'S MOVE ON

Last week Uganda finally signed a deal to start construction of the Karuma Dam with Chinese firm, Sinohydro Corporation.

Hopefully this is the tail end of a controversial tendering process where government officials have disregarded due process, ignored caution from the procurement agency, the courts of Uganda, the IGG, the cabinet and for good measure tried to rope in the President into their scheme to force through their favoured candidate in an unparalleled show of impunity.

In the process they delayed the 700 MW dam’s construction by more than a year, time Ugandans cannot afford to lose.

The process was so compromised that the cabinet was forced to cancel it on the advice of the IGG and not only did President Yoweri Museveni have to personally appeal to China to help build the dam but had to chair an evaluation committee which interviewed andvetted the short listed companies!

People familiar with the process, report that he was not particularly happy to be going into the kitchen himself to supervise the cooking.

In order to live up to its ambitions Uganda needs tons of more electric power.

According to the National Planning Authority(NPA), in 2009 the country’s per capita consumption of power is about 69.5 kWh way below the continent’s average of 578 kWh.

"What this means is that with our relatively low generation capacity we can’t sustain the industrial base needed to generate jobs as fast as we need them...

NPA estimates that to bridge the gap we will need to build up our generation capacity to over 3000 Mw from our current figure of under 500MW. But in order to secure a place firmly in the middle income countries of the world like Malaysia and South Korea who consume upwards of 4000 kWh we have to rump our generation capacity to above 40,000 MW.

Speed is of the essence especially since our population is set to double every two decades.

The same capacity shortfalls haunt every major sector of our economy – roads, railway, water transport and ICT among others.

Clearly our bureaucrats are not doing us any favours in the way they are conducting business and the sooner this is faced up to the better chance that our ambitions of economic transformation will be achieved in our life time.

How do senior officials with long histories in public service and politics throw all caution to the wind in trying to subvert, literally, a lifesaving project for millions of Ugandans now and well into the future?

The project – the dam and the hundreds of kilometers of transmission lines, will cost $1.65b. A ten percent commission to deliver the dam to one contractor or the other would amount to $165m or about sh429b!

The OPM and public service corruption scandals, which amounted to about sh200b pale in comparison to this racket.

"They say everyone has his price and sh429b looks like an irresistible figure that would guarantee that one would retire to a life of leisure and comfort. The millions of children one would doom to death or to a life of perpetual poverty probably did not occur to these officials or maybe a few million deaths is an incidental they can brush off as collateral damage?...

The IGG continues her investigation in to the shenanigans that have led to the stalling of this project.

In light of the billions of dollars in infrastructure deals we will be doing in coming years there must be a way to ensure they are handled efficiently and with no loss to the tax payer?

UGANDA'S STRANGE DEBATE ABOUT INFRASTRUCTURE DEVELOPMENT

In the ten years that Allen Kagina has been at the helm of the Uganda Revenue Authority (URA) collections have gone up fivefold.

In 2004/05 when she took control the revenue target was sh1.9 trillion, and in this financial year the authority's target is sh9.5 trillion or an annual compounded growth rate of 17 percent.

While acknowledging that a decade long restructuring of the URA contributed to this she says one cannot ignore the effect of the growth in the economy during the same period, which averaged about six percent annually.

"The major economic drivers during the period were the expansion of telecommunications coverage, the repair of many the country's major highways, the ramping up of power generation and distribution. While these will go on in coming years we can look forward to additional growth as the railway to the coast gains in efficiency and takes more and more cargo...

The economy is like the human body with the circulation system or infrastructure in the case of an economy, determining the overall health of the subject.

A key characteristic of a healthy economy is the ability to move goods and services around efficiently and inexpensively, just as the key to a healthy body is the ability of the circulatory system to get nutrients around the body or waste out, quickly.

The launch of the newest international development bank by Brazil, Russia, India and China (BRIC) gave The Economist magazine last week a chance to reexamine China's phenomenal rise In the last two decades,

They noted that between 1992 and 2011 China has been channelling on average 8.5 percent of GDP building roads roads, railways, ports and dams, the result has been a sevenfold growth in the economy during the same period.

While they said it was difficult to pin down direct effects on economic growth of specific projects the long term benefits in lowering business costs and increasing productivity are self evident.

Recently criticism has risen over the number of infrastructure projects government is undertaking simultaneously. 

That the costs of these projects, which are being met by taking out debt will weigh on governments capacity to finance other priority areas like health and education. And also that the debt ratios will make us fail the East African monetary union, which has specific debt to GDP criteria that member states must meet.

These criticisms have their merits. For example if through crooked procurements these projects are too expensive the high cost will negate the benefits.

But the flip side to the argument is that these infrastructure developments are always going to be costly, corruption not withstanding, but to mitigate against this the choice of investments will be telling.

So you will have a greater return on investment in building an expressway to Entebbe or a second bridge across the Nile than splurging the same money on the Hilton or on an extension of government offices.

The interesting thing that has been experienced by the extension of telecommunication and electricity in the last 15 years is the amount of suppressed demand -- need for a good or service that is only discovered when the good is available.

We might wonder about the rationale of this or the other infrastructure development but when it is laid out you will be shocked how people rush to lap it up.

Also the simultaneous projects are an indication of how far behind we have lagged in keeping up with infrastructure demands in the last 50 years. And we are not the only ones.

According to some figures the world needs to be spending about $4 trillion annually on infrastructure but is spending a trillion dollars less.

The critics also miss an important point. In measuring the debt to GDP ratios they are only seeing them in present terms, but with the explosion in economic activity that will come when the roads, railways and dams are fully functioning the ratios will be a lot more palatable.

"Returning to China, which is serving as a useful test case for economic theory, The Economist reported an improvement in GDP per capita by as much as a third for those who had a high speed railway pass through their villages compared to those whose villages never saw the railway...

Interestingly the train in question was not built for its perceived economic viability-- the area was the poorest in China, but for its technical feasibility.

Which somehow supports the old saying that if you build the best mousetrap, the world will beat a path to your doorstep.

MASTERCARD FOUNDATION INVOLVED IN $38M PLAN TO SUPPORT YOUNG AFRICAN LEADERS

WASHINGTON, D.C. – US President Barack Obama on Monday announced that the U.S will invest more than $38 million toward four regional Leadership Centers that will train thousands of Africa’s emerging leaders and foster connections, creativity, and collaboration in sectors critical to Africa’s growth and development.

The funds which will be channelled through US Agency for International Development (USAID) was more than matched by African and American companies and foundations, including a $10-million, five-year commitment by The MasterCard Foundation, a premier partner.

The President made the announcement during a town hall event for 500 Mandela Washington Fellows, a program for distinguished African youth that is part of the President’s Young African Leaders Initiative, or YALI.

The Centers will focus on engaging leaders between the ages of 18 and 35 from a variety of backgrounds and a diversity of experience and providing accessible leadership training, incubating organizations and entrepreneurship, and supporting professional connections among African leaders. 

Based in Ghana, Kenya, Senegal, and South Africa, each center will be run as a public-private partnership, capitalizing on the ingenuity and dynamism of the private sector and the programmatic and educational resources of USAID. Nine private sector partners and foundations are joining USAID in supporting the effort.

“The MasterCard Foundation is delighted to partner with USAID on the next stage of the Young African Leaders Initiative. YALI offers great promise for talented young men and women of Africa, and includes critical education, entrepreneurship and leadership development opportunities. We are proud to invest in this next generation of African leaders who are poised to drive change in their communities, countries and across the continent,” said Reeta Roy, President and CEO of The MasterCard Foundation.

Other contributers to the cause are,   

• The Dow Chemical Company, which will shell out $3 million toward training facilities and equipment at the centers and $1 million in in-kind resources to develop leadership training, sector expertise, and mentoring programs for the centers.

• Atlas Mara: $25 million in loans for young entrepreneurs, financial training, and leadership development.

• Microsoft: $12.5 million in propriety business software and hardware.

• Intel Corporation: $5 million toward training in entrepreneurship basics and technology trends, as well as volunteer support and coaching.

• McKinsey Corporation: $1.5 million in dedicated consultants to assist with program design, as well as management support and access to McKinsey's Africa Knowledge and Research center.

• IBM: $500,000 in committed staff time to serve as volunteers at the centers.

• General Electric: program design, training and mentoring.

• Procter &​ ​G​amble​: leadership training.

• The Mara Foundation: networking mentorship program.

THE GROWING TASTELESSNESS OF UGANDA'S GRIEVING PROCESS

Last week local artist Juliana Kanyomozi lost her son to complications arising from his long standing asthmatic condition. The outpouring of grief begun genuinely enough but soon took on a life of its own descending quickly into a tragicomedy before collapsing into a farce.

Everybody and every culture handles their grief differently.  At the end of the day grief is a personal and private affair for those closest to the deceased. A time for reflection on the life they lived and how they shared it with the ones they left behind. It is obviously a time for regret for things unsaid, activities undone and for the lost future with the person.

"Out of our own upbringing we invite people into our homes at these times when often times we just want to be left alone with our grief. The rest of us take this obligation to society as an invitation to intrude into the bereaved lives, displaying a disrespect for the dead they would not display for the living and generally being a nuisance...

And this is magnified many times over for celebrities, and more so in our increasingly connected world.

Let us list the common denominators in our various cultures grieving processes.

Somebody dies. We congregate at the home of the deceased or at some predetermined place where we generally pay our condolences are informed of arrangements and provide any assistance we are capable of. The burial is often accompanied with a church service or prayers. We may return to the home of the deceased to continue to commiserate with the bereaved and pledge help in coming days.

Of course that is a sanitised version of events.

As a backdrop to the main events there are often family disagreements to be smoothed over, protocol issues to be ironed out, egos to placated and, unknown to many but the closest relatives, these functions are often poised delicately on the brink of disaster.

So it does not help when strangers budge in on one’s grief, wailing more than the bereaved and generally overstepping their bounds.

One would excuse the odd mourner who, overcome by grief and generally acting out of place. But one cannot help but be disturbed by the growing tastelessness in behaviour surrounding funerals these days.

It starts with social media.

We will not begrudge people their “need” to profess their grief to the public but if one must, surely a line should suffice. Then of course there are always those happy to play the fly in the ointment, mouthing off about how the bereaved deserved what was coming to them, justifying their uncalled for observations with unproven allegations. But others still, in their mad rush to commiserate – or be seen to commiserate, totally lose the plot, “killing” some other innocent bystander in sending condolences to the wrong family.

It gets worse at the vigil when everybody insists on the seeing the body and these days even taking selfies alongside! At one vigil when what drinks the grieving family had were placed before one gentleman he complained that he does not take a certain brand of soda and could they run down to the shops to get him the one he wants!

At the funeral service all hell breaks loose. People jostle for the prime positions with the bereaved. They hold a running commentary of the event on twitter with the outside world. They walk in and out of church – presumably to receive calls.

By the time we get to the funeral we clearly are determined to hammer the final nail into the coffin – forgive the pun. The politicians jump in to speak to the people. People forgo the actual burial and set upon the food. It’s not unusual for drunken grave diggers to follow, or precede, the coffin into the grave. There always seems to be someone – unknown to the family, willing to put on a show of such inconsolable grief as to start tongues wagging about her association (wink! wink!) with the deceased.

What is going on?!

I am tempted to think, besides maybe, the growing poverty around us, which means we will get a meal any whichever way we can and to hell with etiquette, we have taken this tendency to see and be seen to absurd levels.

"More and more we are doing things for show and any occasion is fair game for our vainglorious prancing. It is as if we are fixated at the adolescent stage, wracked by insecurities, unknowingly putting our inadequacies on full display and worshiping at the altar of superficiality over substance...

Anybody with half a heart sympathises with Juliana and her family. But we demean ourselves and debase our genuine feelings in our misplaced attempt to be associated with the rich and famous.

If you have no genuine willingness to share in the grief of the deceased stay away. You will not be missed.

UGANDA PARLIAMENT SETS ITS PRYING EYE ON NSSF ... NEVER A GOOD IDEA

This week a five-member team of MPs was appointed to probe the alleged mismanagement of the National Social Security Fund (NSSF). You will be forgiven for rolling your eyes at this point.

In the terms of reference the committee will investigate the investment in power distributor UMEME’s IPO and allegations that recruitment into the Fund is unfair and wracked in nepotism.

"One cannot help but cringe whenever one hears parliament is setting up a probe on this issue or the other. They are often time consuming, show up the MPs ignorance of the most basic of concepts under scrutiny and are more about playing to the gallery than anything else. In short a scandalous waste of tax payers’ money....

There are about 500,000 workers who subscribe to the Fund or under two percent of the population of Uganda.  On the other hand we continue to pour hundreds of billions of shillings into education, health and any number of endeavours that affect all the 35 million Ugandans and you don’t see MPs falling over themselves to probe these sectors.

Meanwhile our MPs do not subscribe to NSSF, so is this a case of them wailing more than the bereaved?

Parliament can probe whatever they want and I am sure they are within their rights to do so, but when their probes aggravate inefficiencies instead of alleviating them, discourage initiative instead of encouraging it and at the end of the day produce unworkable solutions then we the tax payers and voters they represent have a right to ask whether they are working in our best interests at all.

More specifically to the NSSF probe. So they are going to probe whether they irregularly acquired UMEME shares.

Top management have in recent weeks explained the process by which the shares were acquired and provided the legal justification. The IGG has looked into the same deal and given it a clean bill of health.

"So the MPs none of whom has any experience in investment – your corner shop and the financial black hole that is your goat farm do not count, are going to find something amiss?

The NSSF management has also thrown in the fact that in the short period that they have held the UMEME shares they have enjoyed double digit returns that would have money managers around the world drooling onto their three piece suits. However even if the investment had not paid off by now – all investments don’t pay off this quickly, the Fund should be able to stand by the credibility of their investment process regardless.

Uganda is not a poor country, going by the ingenuity of its people and the untapped natural resources that lie under our feet. It is clearly not obvious to our MPs but they should be playing a role to create the environment for the exploitation of these endowments and not throwing road blocks at every turn for people attempting to do so.

Whenever it is convenient to us we lambast foreigners for coming to Uganda and “stealing” our things, meanwhile we go and hobble NSSF, the largest financial institution in this country, based on local savings and with a mandate to invest this monies on our behalf in our economy.

If MPs really wanted to be of use they should be investigating why NSSF is not fulfilling its full potential, which has got more to do with the legal framework it operates under more than anything else.

"I would love to be wrong but this is what is going to happen in coming weeks: The MPs will summon all and sundry to appear before them, fire questions rapidly and from every conceivable angle, threaten officials with arrest, make the headlines with some wild allegations, stretch out the tenure of the committee for as long as possible (per diems all around) and eventually release a report that will not reflect the time and resources expended on it....

As a worker who saves with NSSF, with the future hope of benefiting from a credible pension, it is in my best interest that NSSF not only survives but thrives. But I am sorry, I don’t think my MPs are helping serve this interest with this probe.