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.
