THE COST OF SHUTTING DOWN THE INTERNET

My friend was hoping she had left the trials and tribulations of 2020 behind her and that 2021 would allow her business to get back on its feet again.

Last year Agnes was forced to shut down her downtown shop, where she dealt in shoes and clothes. The lockdown and the subsequent collapse in economic activity meant, she couldn’t keep with rent payments. She substituted a physical location for an online presence in August and by the end of the year her revenues were not quite up to where they were at the same time the previous year, but because of the saving on rent, she was not complaining.

New stock had just come in at the beginning of last week and she was taking orders when government shut down social media – she deals off facebook and instagram  and then the internet altogether. And to add salt to injury mobile money transfers too were suspended.

While the internet is back on and social media still – officially off, she believe she has lost momentum and could the government please restore normal service asap.

The government shut down the internet for fear of anticipated riots in the wake of the just concluded elections.

In a liberalised economy government has three main roles --  to maintain macroeconomic stability, regulate and direct markets through an overarching strategy for the economy.

"When the liberalised economy fails to deliver to the general population it is an indictment on the government of the day....

The market, while being the most effective creator of wealth we know, is the probably the worst distributor of that  same wealth. The market tends to give more to those who have and to those with little, even the little they have it takes away from them.

The distribution of wealth is therefore a government role. By providing services like security, health and education, governments ensure that a conducive environment for wealth creation is in place and that by improving the productivity of the people they can not only create more wealth, but also take advantage of the opportunities thrown up by the benign environment.

But more importantly through formulating strategy, which determines the national vision and therefore to which sectors resources will be directed, the government signals to the market what its priorities are. Regulation also ensures that among other things anti-competitive behaviour does not take root.

Some people with ulterior motives, other than making the economy more efficient in driving development, think that government should be in business to blunt the worst excesses of the market.

The problem and this shows up in inefficient state enterprises, which distort markets and drain the public coffers, is that government’s the world over key agenda is to stay in power. They do this through distributing patronage. Governments can not help themselves, faced with a choice between staying in power and profitable companies, they will choose the fòrmer over the latter...

That is how you find questionable investments – like the ice cooling plant on the shores of Lake Victoria not connected to the electricity grid or the banana project that has swallowed billions of shillings over the last decade and has not gone commercial or the fruit factory in eastern Uganda which is limping despite the vast bounty of fruit in the region …. And don’t get me started about Uganda Airlines.

To repeat myself, the main role of government is to create an enabling environment for business to thrive, without abrogating its responsibility to ensure that the economy works for its citizens not for a small urban elite or foreign interests.

Which brings us around to the closure of the internet last week. 

While we can not discount the threats to national security that government claimed, a national strategy would have helped the decision makers factor in the loss to the economy and judge the opportunity cost of taking one action or another. 

Other countries including the US have had elections in the last six months. They too had serious national security issues surrounding safeguarding their electoral processes. But because e-commerce is a multi-trillion business shutting down the internet was not an option. Instead the US has invested massive resources in online security as well as built collaborative  relationships with industry.

The US knows and appreciates that the internet is a major infrastructure, which while it does not own it, has found and continues to find ways to ensure it works for the American people and business.

It is not impossible. 

It is very possible that there are external threats to national security and they show themselves in one way or another everyday. But government has found a way to monitor and deter these – I hope, without shutting down our roads at every rumour or sign of danger.

A similar soft touch is required for 21st century technologies.

Thanks to the lock down last year the move towards e-commerce by our businesses has accelerated. That might have been the one silver lining that came out of the covid-19 pandemic.

"Just like our economy will be helped by better quality roads, railways and marine transport we need our internet to be fast, reliable and uninterrupted. Our competitiveness as a nation will rely on that more and more....

The Fourth Industrial Revolution (4IR) task force is completing its report, with a proposed strategy for the nation on how we can adopt and take advantage of the new technologies that are coming into common use. Maybe a clause about how to manage these around elections may be important.

AFTER THE ELECTIONS, WHAT?

Last week we went to the polls to vote in the much anticipated presidential and parliamentary elections.

President Yoweri Museveni won another term in office and his ruling National Resistance Movement (NRM) party maintained its dominance in parliament capturing about 62 percent of the seats in the house.

Neophytes the National Unity Platform (NUP) crashed the party to win the most seats of any opposition party, 61, with most of its victories at the expense of the Forum for Democratic Change (FDC) and Democratic Party (DP).

There are many lessons from the just concluded polls for both sides of the divide.

For the NRM the blood bath in Central region, with not a single minister from the region returning to the house, has to be a wake up call. While the NRM can shrug these losses off because of their dominance in parliament, the strategists at Kyadondo road must be wondering whether this can be replicated in other regions in the future or not.

"We have always known there is discontent with the NRM’s coming to four decade long stay in power – otherwise NRM would be showing 90 percent landslides, what is clear now is that the much touted demographic shift has happened...

Eighty percent of the population are below the age of 35, and therefore can not relate to the dark days of Uganda’s recent past. Whatever progress has been made is the baseline against which they measure progress, and for them progress is not happening fast enough.

To beat off (forgive the pun!) the opposition,  government has to keep the economy growing but more than that, they need to distribute this growth more equitably through continual improvement of the business environment, while improving education and health services, so that Ugandans can take advantage of the improved business environment.

The NRM has done it before – reinvent itself after every election, there is no reason to believe they can not any more, especially when many of its ministers, 25, were shown the door in the election.

"The overwhelming victory in central Uganda while not to be  snorted at, may very well be a poisoned chalice for NUP....

The barely six month party will now be held to a higher standard than before. The suggestion that they can be real challengers to the throne, mean the public will be looking beyond the romanticism of their red berets to expect much more deliberate and constructive opposition to government. Failure to do this may see them dismissed as a circus that the Economic Freedom Fighters (EFF) in South Africa now are.

Also the pressure on them is going to be whether they can build into a party with a more national character. As it is now they are susceptible to being portrayed and isolated as a parochial party.

And finally how NUP engages with other opposition parties in the house will be key to the above. NUP may decide to keep all the juicy positions in the committees and parliamentary commission for themselves, alienating the other parties, especially their older dogs who have become accustomed to being the chairs of the key committees in  the house.

To be magnanimous and spread out the goodies among the opposition is going to be a tall order. The NUP rank and file will argue they have suffered disproportionately to get to the house and deserve everything they can get their hands on.

"It will be interesting to see whether NUP leader Robert Kyagulanyi has the political sleight of hand to juggle these competing interests to not only bring the opposition together, at least in the house but more  importantly to sustain his party’s momentum for the next five years....

In coming years all eyes will be on NUP if only because of their novelty. But it will also be interesting to see how the old in the tooth NRM responds to this new dynamic.

An old Chinese saying springs to mind, “May you live in interesting times.”

LESSONS FROM 2020, A YEAR TO FORGET

Last year was supposed to be the year that everything fell in place and we would take off to greater heights.

It is the year, we found out about a place called Wuhan in China, we forwent shaking hands and hugging without being branded anti-social, sneezing was taboo and we almost went bat crazy being in isolation.

They say,

"If you want to make God laugh tell him your plans...

In the best tradition of turning lemons into lemonades, here are some lessons learnt from a year we would all love to forget.

1. You never know when the rainy day is coming

It is a fact of life that things will be going well until they don’t. And like a thief in the night the bad times never announce themselves. Who would have though that a flu-like disease would shut down the world – literally?

So if there is one thing that 2020 showed us is the importance of saving. We don’t save for lack of cash or lack of willingness but because we don’t know how to save. When we get our paycheck, we intention to save something after we have catered for all our expenses and inevitably we don’t save. The trick is when you get your paycheck save some predetermined amount first and spend what is left. 

This simple, but not easy, shift in perspective will make a world of difference in beefing up your savings, and therefore readying us for the inevitable rainy day.

2. Multiple streams of income became real

With paychecks being cut or lost altogether, the old say about keeping all eggs in one basket took on a new importance.

Beyond your major income do you have other income streams you can count on, on a regular basis? Are they diverse enough that if some dry up others will be there to take up the slack?

And how do you build up these income streams? You can earn income from your selling your expertise – consulting or from a hobby you pursue in your free time. The trick is to provide value and make known what you do – marketing. Once you build a reputation guard it with your life.

With your savings you can start investing to build these income streams. Do it like the banks, build your asset base from near cash assets –  savings and fixed deposits, to treasury bills and bonds to shares in companies and eventually to more fixed assets like real estate. 

"The mistake many of us make is to jump straight into fixed assets, which while a good store of value, return very little cash-on-cash and can often leave us asset rich and cash poor...

Systematically building this pile of cash generating assets, may make the difference between returning to your parents house at the next crisis or weathering the storm with a smile or at least a grin.

3. The personal brand takes work

In our office space, working in a functioning organisation, doing what we do best, can be deceptive. No one but your immediate colleagues and boss know or appreciate your value. That is all very well as long as you are in the job you are in. As soon as you lose that job you realise you are not so hot as you thought. Not that your expertise or experience disappears in a puff of smoke, but because not enough people in the wider world appreciate your value.

Just because you have all the letters of the alphabet after your name doesn’t mean you deliver value.

So personal branding became important in 2020. The market will pay you according to the perceived value you can deliver. The market can not divine your value. You need to communicate your value deliberately, systematically and consistently for it to be fully appreciated.

This takes work, work we should be doing every day and especially in the good times when hakuna matata.

4. Social capital was key

When things are going well – the money is flowing in, we are covering our bills, with some left over to have a good time we forget the value of social support systems. The people around us – at home, at the office, our alumni became useful in getting us through the darkest, loneliest periods. The extent to which they were useful depended on how we had watered these relationships in the good times.  

Ironically despite the world being more connected we are actually more detached from our social networks. 

We need to invest in these more ahead of the next crisis. In the words of Dale Carnegie, “be interested to be interesting”. Speak to our people, find out what makes them tick, be available, help when you can, accept help where you can (a friend in need is a friend indeed) and generally be more friendly, even if to two other people in your life.

5. Invest in your inner resources

But when all was said and done, regardless of if you had a village supporting you or you were alone, it was really up to you to struggle through the year.

There is a case for building your inner resources – mental and spiritual during the good times so that your inner peace is not easily disrupted when the hard times come along.

Mentally you need to keep learning and that means you have t o maintain an open mind that is easily teachable. Hanging on to fixed positions for security, means that when the upheavals come we will not have the  mental flexibility to adjust.

A continued quest of self discovery will eventually bring one to the universal truths that religions have tried to codify down the ages. Finding ones own truth – not the turnkey solutions parroted by charlatans, is a continous and arduous journey. The end benefit is that the journey grounds you, more than any religious dogma does and when the hard times come along you will have an anchor. 

Otherwise Happy New Year to you all and may 2021 be more easy on you – on us all,  than 2020.

WHO WILL VOTE FOR BOBI WINE?

With about two weeks to go we are fast approaching the business end of the 2021 presidential elections.

The recent poll commissioned by the New Vision to determine the way the presidential elctions will go, threw up no real surprises.

One, that President Yoweri Museveni is leading in the polls. This election is really his to lose. With the end-to-end network that the National Resistance Movement (NRM),  a reversal of their fortunes is improbable, if only because they have the biggest organisation.

Secondly, that Ugandans don’t want confusion and that this too – like the last five contests, is going to be a two horse race. That Robert Kyagulanyi aka Bobi Wine has taken over the dissenting vote from Kizza Besigye, has been clear for a while now, with all the usual suspects trailing miserably in his wake.

Will the balance change in coming weeks?  Will Museveni’s numbers slip below the crucial 50%+1 mark by mid-January?

Prophesising the winner of this election is out of the scope of this column, more interesting though is to divine how people will vote and which segments of the electorate will be the game changers, or not.

"Broadly there are two types of voters, those who will vote for Museveni and those who will not.

But if you drill down further, these are subdivided further into five groups....

The NRM voters are divided into three groups. 

The first group – The diehards, are those who will vote Museveni whatever the ills of his government and his own personal shortcomings. These are often people whose fortunes or very survival is directly tied to the continued stay in power of the NRM.

The second group – the pragmatists, is of those, who while they turn up their noses at the excess of the NRM, would vote for Museveni anyway. Their logic is a pragmatic one, they are in business or at the peak or approaching the peak of their careers, they don’t want anything or anyone to rock the boat. They calculate that a continuation of the Museveni administration, will not hurt them much but in fact lead to their continued prosperity. Also they don’t think the alternative candidate offer much promise for their prospects.

The third group of people  -- the apolitical, who will vote the NRM are those who will stay away all together from the process. Abstaining from voting is often times a vote for the incumbent. The fact that you don’t vote for the ruling party means you are against them, a vote which would do some good for the opposition. That is why it is always key for the opposition to turn out the vote, as Barrack Obama showed in 2008 and Joe Biden in 2020 in the US elections.

That leaves two groups who will vote for the opposition. 

The first group, I-would-vote-for-a-jerrycan-rather-than-Museveni, is convinced that the NRM is irredeemable and would vote for anyone who puts himself up for election against Museveni. The core of the group are people who have been shut out of power by the NRM’s continued existence and want them toppled by whatever means necessary. A fear of instability is a greater risk to take than the continuation of a Museveni administration.

The second group don’t think an NRM loss is a possibility, but want to, on one hand create a protest vote that will hopefully make NRM look up and take notice. Also within this group are those who want to create a momentum that will hopefully build up to the point that they can see the back of Museveni and his NRM in the near future.

Interestingly these could have easily fallen into the second group of NRM voters – the pragmatists, but they are more moralistic and can not countenance voting for the NRM, which they see as corrupt and worse, evil. They don’t believe that the end justifies the means. Grudgingly they will admit that the status quo is not bad for them.

While the opposition has hyped up the nearly five million new voters who have come onto the role – they have turned 18 since 2016, it would be wrong to think the youth vote is an omnibus one. While youth opinion is less coloured by a wish to maintain the status quo, because they have accumulated little property, for instance and, which as a result tends to shift them towards rebellion against their elders and the status quo, there still those who recognise that their parents’ fortunes could be undermined by change, that their career path is best served by the status quo or that they cant be bothered to vote anyway.

So the voters who will make a real change in this election are the NRM pragmatists and the apolitical/abstainers....

The pragmatists will have to be convinced by the opposition that their boat will not be rocked by a change of government.

The apolitical/abstainers’ disgust with the NRM will have to be raised sufficiently enough that they can be convinced to get out of bed and vote against the NRM. Or be convinced that an opposition win will threaten life as they know it, which they think can be better but they would rather settle for the current situation than chaos, that they turn up to vote for the NRM.

The recent polls cement the perspective that this is not a popularity contest. People’s decisions will be governed by self interest – “what can you do for me”, more than whether I like this candidate or the next. At the risk of sounding obvious the balance of self interest between the pro-NRM, anti-NRM and the abstainers, will determine who wins the next presidential election. It always does.