AGGREGATING RESOURCES: THE CHALLENGE FOR AFRICA, UGANDA

On Wednesday Uganda Christian University launched a think tank, the African Policy Center, which will conduct research meant to inform public policy, biased towards a Christian world view.

Dr James Magara presented on the think tank’s role in the Africa of the 21^st century. The problems of Africa Magara said, come down to the fact that we have been doing a lot of doing, unaccompanied by much thinking.

Adopted from Second World War America, think tanks are often independent organisations which set themselves the task to research and disseminate knowledge often with the aim of influencing the powers of the day.

"This attempt speaks to the wider challenge of Africa and more specifically Uganda. We are poor, backward and even hopeless, because we have not aggregated our resources, be it our labour, our markets, our political activism, our finances or in this case our thinking...

We see it all around us.

Look at the classical factors of production.

Barley a quarter of all land in Uganda is titled. This is a disturbing statistic because without recognisable property rights for the majority of Ugandan households it is difficult to unlock the full value of the land we live on. One way to unlock this land is to aggregate these holdings into bigger holdings either through acquisition or cooperation. It is economies of scale such as these that see the US with only three million farmers, down from 30 million after the Second World War, can be the world’s largest exporter of food.

The labour movement is thin on the ground in Uganda. While serving as a useful counter to capital, labour movements have had the unintended consequence of leading to greater efficiencies in the work place through innovation and automation.

And finally capital. Our lending rates are too high, we have too little capital to finance our own projects and our financial markets are shallow, restricted to a handful of products, leaving out the majority of consumers, because we have not brought together our monies in meaningful ways. We save less than 15 percent of our GDP in the formal banking system, while the east Asian countries at least double that figure. Aggregating capital in this way not only makes it easily accessible and cheaper but attracts even greater pools as well.

In the more developed western economies they have taken this a step further, with the creation of capital markerts, which supply patient money to their businessmen. All the capital markets on the continent do not have market capitalisation – the value of all the shares listed on an exchange, equivalent to that of the Brussels Stock Exchange (about $3.7trillion).

But they have gone a step further, and despite some recent hiccups, have been pushing aggressively to consolidate their politics. See the United States and the European Union. This allows them to not only consolidate their markets but to project their unified will allowing them to have more influence on world affairs disproportionate to the populations of their countries.

The disaggregation of our resources is by design and by accident.

 "And why have we failed to aggregate our resources? A lack of leadership or more specifically a dearth of leadership, which sees uplifting the wellbeing of their respective people as their raison d’etre...

Since independence through design or accident of history, our leaders have not been the sharpest knives in the draw. As a result they have found little use for knowledge or gone out to promote research and its resulting knowledge used to inform decision making.

In fact they have been willing consumers of other people’s thinking, the Bretton Woods institutions or Brussles or even Moscow, knowledge we cannot have been generated for altruistic purposes least of all for our benefit.

The African Policy Center has a noble mission, it will run itno a lot of roadblocks –opposition from established players or inertia from the intended recepients stuck in their old ways. But no one imagines the road ahead will be smooth.