THE NEW VISION SACCOS CROSSES THE SH10B MARK, SO WHAT?

The New Vision SACCOS held its annual general meeting last Friday. The highlight for me was that it crossed the sh10b in assets mark last year 17 years after its inception.

I remember vividly seven years ago marveling at another SACCO who assets stood at sh9b then, while the New Vision SACCOS’ stood at just under sh4b.

The management reported that members had saved sh4.8b a far cry from the sh62.4m members had pain stakingly saved by the end of 2005, the SACCOS first year of operation. The sh118m dividend payout was almost twice the total savings in the first year. Profit was about a billion shillings.

This are small monies comparted to those the bigger SACCOS are reporting and hopefully will be laughable when comparing with how the SACCOS will have grown in ten years, but it would not have happened if a mechanism for members to pool their money in a convenient and safe way had not been started.

And that is the key. When people say we are not saving enough as a society its not for lack of money but for lack of convenient mechanism to do so...

Thankfully with the help of SACCOS like at New Vision – there are more than 2,000 SACCOS in Uganda today, the gap between our monies stocked away under our mattresses and the formal financial sector can be bridged.

Apart from banks not being close to the people, I was surprised to learn that some people don’t save in banks because they are intimidated by the large banking halls and busy workers. The launch of the agency banking a few years ago is helping in that direction as well.

The real game changer however is the rise of mobile money. Last month MTN reported that their mobile money deposits rose by sh300b to more than sh950b. This trend is nothing to be frowned upon.

It has be said that of all the money in circulation in Uganda only about 20 percent is in the formal financial sector the remainder – 80 percent is under our mattress, in our socks and bras. In more developed economies the revers is more true.

When money is in your pocket it is doing nothing for you or anybody else, but when your money is in the financial sector it maybe earning you interest as well as helping other people with need for money. They access your money by borrowing from the banks.

Essentially the money is working. We can say the less the money in circulation works, by being employed in the formal financial sector, the poorer a country is...

Our low saving rate is one of the reason the lending rates in our banks are high. Banks make money by lending to government, businesses and individuals. If we all got our little monies and headed for the nearest bank, banks would be forced to bring lending rates down, because holding money is a cost so they cannot allow to seat around. So the banks would have to bring their lending rates lower to send money out the door as fast as they can.

Believe it or not this is already happening.  There is a time when interest rates were as high as 50 percent and you could not borrow without collateral!

My experience with the SACCO has shown this to be true. While you have to pay interest on savers money, they cannot borrow all of the money that comes in. At one time it was discovered that only 40 percent of the members had loans with the SACCOS.

As a manager you have a choice you either lend more to your members, more likely by lowering lending rates or you ship the money out, investing in other things outside.

So SACCOS should be supported mainly through capacity building, to grow stronger in their capacity to mop our excess liquidity.

SACCOS do not need handouts from government. In fact this may be detrimental to their effective management. They can grow under their own steam if they are managed well.

Banks shouldn’t worry. They will cut back on their branches, leaving a few to service SACCOS and such like small institutions, while servicing corporate borrowers and the government.

"If I dare to dream, the equity of the New Vision SACCOS grew by 20 percent last year, that means it will double every four years. So 16 years down the road the net asset value of the SACCO will be sh92b!

AND THEN THERE WAS ONE

With the passing of the speaker Jacob Oulanyah earlier this week one cannot but help feeling that we are seeing the evening of an era.

For context one has to go back to the 1990 Makerere University guild presidential campaigns when Norbert Mao beat the young NRA officer Noble Mayombo in a hotly contested campaign, the likes of which have not been seen since.

The University, then with a student body of less than 10,000, was undergoing fundamental changes, chief of which was that government was in the process of phasing out “Boom” . These student allowances were a hangover from a time when the economy was in good shape and there were fewer students at Makerere.

"In better times all students used to get allowances for being on campus, but by 1990 this had been whittled down to getting reams of paper and textbooks, which often ended up in stationary shops of nearby Wandegeya. There was also a transport allowance, given to the students at the end of term to go to their home districts...

However, the NRM had inherited an economy on its knees and some of these “luxuries” they could no longer afford. Scrapping them was a way to lower public expenditure, a requirement to benefit from badly needed donor monies.

It was in this context that the 1990 guild presidential campaigns were staged. That Mayomdo, who by default was the establishment candidate, took the race to the wire was credit to him, as the mood on campus was for an anti-establishment figure who would fight for the students’ “rights”.

Oulanyah also contested that election but stepped down to back Mao, while his campaign manager Adolf Mwesigye (Now the clerk to parliament), backed Mayombo. Oulanyah then became the speaker of the guild.

A student of agricultural economics, his oratory and command of the proceedings made it difficult not to see a bright future for the man from Omoro.

The same could be said for his boss Mao and for Mayombo.

Oulanya returned to university to study law, while Mao and Mayombo went on to public service.

Mao’s attempt to represent Gulu Municipality in Constituent Assembly in 1994 was thwarted by DP heavyweight Andrew Adimola. He eventually came to parliament after another acrimonious campaign against Betty Bigombe, who previously come painfully close to a peace settlement with the LRA.

Mayombo rose to the office of the permanent secretary in the defence ministry. He made it to the constituent assembly as an army representative after which he became President Yoweri Museveni’s ADC and then director of military intelligence. Unfortunately, his promise was cut short when he died at 42 in 2007.

Oulanya was the late bloomer. After law school he opened his own law firm before making it to parliament as the MP for Omoro county in 2001 as a Uganda People’s Congress (UPC) cardholder. He did this despite supporting Aggrey Awori’s doomed presidential bid. At the time northern Uganda was an anti-NRM stronghold, the people there aggrieved by the long drawn out Lord’s Resistance Army (LRA) insurgency...

The return of multi-party elections in 2006 came with the emergence of the Forum for Democratic Change (FDC) led by Kizza Besigye . Oulanya lost his seat to FDC’s Simon Toolit, which must have caused him much soul searching because he flipped his allegiance to the ruling NRM and retook his seat in the 2011 polls, the first time the ruling party had made an impression in northern Uganda.

After Mayombo’s passing on, Mao had previously stepped down from parliament to become Gulu district chairman in 2006, eventually Democratic Party boss.  Oulanya became deputy speaker I n 2011 and achieved his long held dream to become speaker of parliament in 2021.

These three men were the leaders of their generation. All three were gifted speakers. All three had commanding presences. All three were ambitious men, some said too ambitious for their own good.

We are wiser in hindsight but it should have been obvious in 1990 that these three young men would play key roles in the future of Uganda.  One feels they would have fed off each other’s personal ambitions – knowingly or unknowingly, to lift themselves higher up the political ladder.

With the demise of two of the trio one has to think we have been deprived of an epic finale to their story.

 

CHELSEA AT THE CROSS ROADS

Chelsea FC used to flatter to deceive until Russian Oligarch Roman Abramovich came along in 2003.

Abramovich who took the London club off previous owner Ken Bates’ hands for an estimated £60m (sh300b) in 2003, was, and at the beginning of the month asking for at least £3b (sh15trillion). This represents a more than 20 percent annual capital gains return on his initial investment. Nothing to be snorted at especially in Europe.

"But don’t cry for Bates, he in fact got a better return on the £1 he paid for the team, when he took it over 1982...

Bates inherited a team that was deeply indebted, had a bad reputation for hooliganism and was floundering in the lower levels of the league.

The coincidence of sport and business is never boring.

Since he took over the club Abramovich has invested about £1.5b (sh7.5trillion), which probably explains why the club is still loss making, a lot of its revenues going to servicing Abramovich’s debt to the club.  Chelsea last year made a £153m loss off revenues of £435m.

You can rest assured that the cashflows the club was throwing off, made the Russian’s decision to sell the club a very reluctant one.

Abramovich has been singled out as a supporter of Russian President Vladmir Putin, has been blacklisted and his assets frozen in Europe and America. Punishment for Russia’s invasion of Ukraine.

Chelsea’s financial success under Abramovich is due to its newfound success on the field – 16 trophies in England and Europe over the last 19 years, making it next to Manchester United the most successful club in England during the period.

The interesting thing about sports franchises is that their biggest assets are the players not the physical infrastructure that the club may own.

In Chelsea’s case their squad is valued at a billion pounds compare to its stated worth of about £2.5b.

Chelsea last year earned under ten million pounds from ticket sales – because of Covid restrictions, but made £154m in commercial revenues, which often comes from the sale of shirt sales and other merchandise sales. Hobbled by a 40,000 seater stadium they would make more money on match days with a bigger stadium. Arsenal’s Emirates stadium makes more than a hundred million pounds annually from ticket sales.

"But even with Covid-19 they shrugged off the loss of match day income pulling £274m from their broadcast rights. It is no wonder they can afford to pay Romelu Lukaku £325,000 a week....

But you have to worry for the Chelsea, whose new owner may have been announced by the time you are reading this column.

No one –  unless the Saudi bid won the day, has the deep pockets of Abramovich, willing to splurge, without promise of a return for years.

Chances are to come up with three billion pound asking price, the new buyer will have to take on debt and will be under pressure to pay this off. What often happens in these cases is they will freeze the wage bill, try, sell of some players and other assets of the club to pay down a large part of the debt as quickly as possible. This could very well have affected the club’s performance on the pitch/.

Given the momentum Abramovich has created a few more years without a title but qualifying for champions’ league will not make the new owners sad. Look at Arsenal, still a very profitable company despite not having enjoyed the success they were used to previously. Or Manchester United for that matter.

From a purely business perspective a club does not have to be successful on the pitch to show a return, especially if it has a rich history behind it.

Of course you cannot stretch that point too far. The loyalty of the fans is enhanced by victory.  This loyalty provides huge brand equity the business owners can leverage to boost commercial revenues....

Interestingly for the last two decades or so, with ticket prices going through the roof – a ticket now can go far as much as £100 (sh500,000), Chelsea’s ticket buyers are not the lowlier in society. In fact, it was reported a few years ago that there is a lot of tourist traffic during match days in the English Premier League, so you are more likely to passions do not run as high in the stands as 30 years ago.

The physical infrastructure are not to be dismissed as well. When not being used on match days can be used to host events like concerts, conferences and exhibitions or as stated above be used as tourist attractions.

Given how investors from far and wide are falling over themselves to be in the bidding for Chelsea, you just know Abramovich is letting go of a good thing.

 

SOBER DISCUSSION NEEDED ON RISING PRICES

Commodity prices have been on the rise in recent weeks and as expected there is a lot of chatter about and who is to blame for the inflation.

Government is the usual punching bag. This week prime minister Robina Nabanjja made a statement in parliament outlining the causes of the new inflation, mostly that the inflation is imported with increases in global oil prices and the supply chains, which have not yet recovered fully from Covid-19 lockdown. The ongoing war in Ukraine is expected to worsen matters as those countries account for 30 percent of world traded grain and other manufacturing inputs.

As a result, she explained, that there is very little scope for government to positively affect prices.

In reaction opposition MPs suggested a suspension of digital tax stamps on manufactured products as a way to bring prices under control. They also proposed that government should stop marking fuel for internal consumption, the cost of which is transmitted to the end users. Government marks fuel to prevent dumping. Fuel which is in transit to other countries is cheaper, since some taxes are not imposed on it, and if sold on the local market would disrupt genuine suppliers.

Recent investigations by this paper have shown that the increases come first due to the sharp increases in fuel prices we kick off the year with. A liter of petrol cross the sh5,000 mark in January for the first time. This was due to a combination of global fuel prices jumping to 14 year highs and the blockage of fuel trucks at the Kenyan border earlier this year. The health ministry had insisted that truck drivers needed to undergo covid-19 tests before they came into the country, which sparked a strike that affected fuel supplies, which we have not entirely got over.

"The Uganda Bureau of Statistics (UBOS) reported that in February petrol and diesel prices jumped 34 percent and 25 percent respectively...

Fuel prices feed into everything so its no surprise that this is a factor.

In addition, there were suggestions that some businessmen have cornered the market for inputs in the manufacture of bar soap partially explaining the doubling of bar soap prices in some places.

All this indicate make it clear for anyone to see that the causes of our current jump commodity prices is really out of government’s hands and will not give itself to any short term remedies.

In fact things will become worse before they become better as Kenyan transporters are set to raise transport fees by five percent.

That being said it is clear that as long as road transport dominates our trade as a country we will always be at the mercy of the wild fluctuations in fuel prices.

If the MPs really wanted to be useful they should address this issue, especially progress on the railway and water transport across the Lake Victoria.

As it is now it costs almost twice as much --$5250, to move 30 tons by road than it does by rail --$2,800. But because it takes about two weeks by rail compared to under a week by road, it’s no wonder businessmen would rather use road. The discrepancy in times in transit has a lot to do with underinvestment on our railways.

"MPs, if they were farsighted, should be pushing for investment in the railways, revamping of existing management and smooth operations as a matter of urgency....

While it does not seem to be an issue this time like it was in 2011, another major driver of inflation is rampant spending by government. MPs should keep an eye on this as a matter of course.

Some of the proposals the MPs are suggesting may even force government into populist measures that lead to worse inflation.

In the mean time for the rest of us the solution to rising prices is obvious, we need to cut our coats to fit the cloth.

 

MTN AND THE SIGN OF THINGS TO COME

Last week MTN publically released its results for the first time in its 23-year history in Uganda.

This was necessary as they are now listed on the Uganda Securities Exchange (USE), for which it is mandatory to report publically on the company financials at least twice a year.

The Telecom company reported that revenues grew 9.4 percent to break through the sh2.04trillion mark, the only Ugandan company to do so.  The increased revenues were driven mostly by data sales and fintech (mobile money services), which jumped 22 percent and 10 percent respectively.

New shareholders will share among themselves sh105b in dividends for owning the share for the last 25 days of last year. The dividends per share will be sh4.7. The total dividend paid out sh15 per shares, sh11 in dividends was paid out before last year’s share offer.

That was all very nice but the results also pointed to the new trends cementing themselves and bound to affect the way we relate and do business into the future.

For starters, for the first time in MTN Uganda’s history revenue from voice calls -- sh1.01trillon fell below half of total revenues. While voice revenues grew 3.6 percent compared to the previous year, this was dwarfed by growth in data and mobile money services....

More than a decade ago when Bobby Collymore took over the reins at Kenya’s Safaricom, he said in his first interview that, in the future voice services will be an add on, given away for free by telecom companies that the action was going to be in data and mobile money services. I couldn’t relate at the time but we see it come to pass before our very eyes.

While the growth in data and fintech can be blamed on the Covid-19 restrictions of the last two years, industry players are confident that the use of both services instead of falling back to pre-covid levels will in grow faster into the future.

To that end MTN is making smartphones available more conveniently through hire purchase schemes. More than 100,000 phones were acquired these schemes and have accounted for some of the increased data usage. Almost a million new data subscribers and 1.5 million new fintech subscribers were signed onto the MTN network.

Assuming this growth continues we are heading very quickly towards a cashless society, bill payments grew 58 percent and merchant payments grew by 14 percent.

Even more startling for me was that mobile money deposits grew by sh300b to sh960b, a 46 percent growth which in itself account for the total deposits of some of our smaller banks. While MTN cannot finance its business using these deposits they still constitute a huge proportion of the monies we saved under our mattresses or in our socks or bras, being brought into the formal financial sector and therefore more useful to the general economy. Assuming the current rate of growth continues these deposits will double every two years, if you extrapolate this into the future, it boggles the mind how big these deposits will have grown to.

It is obvious that MTN and telecom companies in general, will be a great driver of financial inclusion, resource mobilization and even economic transformation...

It happening already in parts of the country where early adopters are saving on their phones or running their accounts in their SACCOs via their phones, borrowing and investing off their phones.

One of the biggest factors in income inequalities is a lack of information. Ground down to its most basic level, you are poorer than your rich neighbour because you do not know something he knows. And once you have the information can you act on it? Now with data services becoming more and more pervasive we can get the information and with fintech going the same way we can act on what we know, in real time.

It follows therefore that it is in the economy’s best interest that tools such as smart phones are held by more and more people. In South Africa eight in every ten people has a smart phone, business there moves at the speed of light.

It was reported recently that Sweden has the most internet startup per capita of every country in the world. Looking back to how this came about, it was traced back to a government policy in the early 1980s that sort to have a computer in every house. The children of that time, who were exposed early on to the computer, leveraged their familiarity they had developed playing Space Invaders into programming and eventually building tech companies.

While there is momentum in adopting these new technologies government can speed it up by revisiting its tax regime around the ICT sector as a means to increase especially smart phone penetration and data usage. We will not be reinventing the wheel, oy has been done before and with great success.

NSSF AT THE CROSS ROADS

On Monday National Social Security Fund (NSSF) started registering members eligible for the mid-term access to their savings.

The new product, which came out of the amendment of the NSSF Act allows members who are 45 and over and have been contributing to the fund for at least 10 years to withdraw up 20 percent of their savings.

The amendment was triggered by the financial stress many were suffering two years ago when the Covid-19 pandemic set in.

"The NSSF management were dragged kicking and screaming to this point, understandably so because one, this is not what social security is about, giving temporary relief to members and secondly, because it was going to throw the business projections off significantly for the foreseeable future...

In the first instance you can bet that most beneficiaries will blast their money away, which is their right, but which may cause more problems for them than they already have.

Previous statistics show that 80 percent of NSSF members who cash in after 55, have nothing to show for their windfall in two years. There is no reason to thinks this will be any different.

There just over 41,000 beneficiaries of the midterm access and the average payout will be just over sh19m. Some of the bigger beneficiaries maybe snickering at this but what it means is that most of the beneficiaries will receive relative small monies. According to NSSF 57 percent of beneficiaries will receive less than 10m.

I don’t believe there is money that is too little to make a change or vice versa that there is too much that cannot be finished. We have heard stories of drivers and office assistants who are wealthier than their better paid bosses, because unlike their bosses who wait for big money to invest the lower cadre take whatever they have and save or invest it.

So for many beneficiaries the best thing they can do for themselves is to leave their monies in NSSF where it has been attracting double digit returns for about 10 years now.

Related to that, the amendment of the NSSF act is a major inflection point in the Fund’s history.

"NSSF is going to pay out about sh1.6trillion this year – sh900b for the usual benefits and an additional sh700b for mid-term access, making this the first year they pay out more than they receive in contributions. The Fund projected that they would collect about sh1.5trillion this year...

In subsequent years they will be paying an estimated sh300b under mid-term access and normal service will be restored.

Having gotten used to double digit interest on our savings, we may forgive NSSF for not paying that out this year but we will not want to hear it in subsequent years, which means the Fund’s management will have to think long and hard how under current circumstances they can continue to give double digit yields. This is when they will really have to earn their keep.

That being said we have to give credit where it is due. When NSSF was set in place in 1985 who would have thought that it would be bigger than its older cousins in the region today. By “forcing” us to save NSSF has served as a huge stabilizer of the economy, as it is now it is the biggest holder of treasury bonds and bills, which are often used to keep inflation away.

And now with more than 5000 housing units coming into play in the next decade or so, NSSF is set to become the biggest real estate developer in the country, which will have a ripple effect in the labour and financial markets.

"As the Fund expands Uganda the search for investable projects will become a real challenge and probably usher in the next phase of NSSF’s history where it will be more directly involved in the economy beyond ensuring macroeconomic stability....

The temptation of course when you get a bit more money is to become more aggressive and forget the strategy that got you to your current position. This often ends in tears. But NSSF is fast approaching a time when Uganda is too small for it and will have to seriously consider how it goes into such things as private equity investing locally and stretch itself more and more into the bigger regional economies. It is inevitable. This year NSSF is collecting about sh100b a month in contributions.

While we are all focused on midterm access monies a more fundamental change to the Act is making it mandatory for all employers to save for their workers and the inclusion of a voluntary savings product.

According to NSSF this should bring an additional sh90b a year, which I think is low as the majority of our 20 million workforce still needs social security.

For now, the excitement around midterm access dominates our headlines, when the dust settles and history is written this will have been a major turning point for NSSF.

TO KNOW THE UNDERPRIVILEGED, WALK IN THEIR SHOES

Last week Bank of Uganda called commercial banks in for a workshop about Small Business Recovery Fund (SBRF) set up last year to help small businessmen get over the worst of the pandemic.

The way the initiative was designed was that the monies would be channeled through commercial banks with government matching shilling for shilling whatever the commercial banks lent out.

Government committed sh100b to the process and the commercial banks matched it for the grand total of sh200b. I remember thinking the Fund was not big enough when it was first announced, but was disabused of that notion last week, sort of.

During the workshop It was reported that of the sh200b on offer only sh690m had been disbursed since November. Another sh1.2b worth of loans was still being assessed.

The monies were targeted at small businesses that do not have more than sh100m annual turnover.

The banks reported that most businesses that applied for the funds were in the sh100m to sh500m turnover and automatically ineligible.

Also the bankers also pointed out that ordinarily businesses with such low turnover cannot qualify for sh100m unless they were being set up for default.

"The central bank, which also takes back in vetting applicants complained that often times the documentation – there is a 26 point checklist which includes board resolutions, audited financial statements and marriage certificates, were often incomplete disqualifying applicants....

I suspect this is another classic case of government projects, backed by good intentions but totally oblivious to the reality on the ground.

For instance what does a sh100m a year business look like?

The other day there was a news report, which made reference to a rolex maker whose operation makes up to 382 chapatis a day.  At a thousand shillings each, that is just under a hundred million a year in turnover, assuming he works five days a week and 52 weeks a year.

Such a guy has no board resolutions leave alone being incorporated, it would be a miracle if he had audited accounts and a marriage certificate may be a stretch.

What this points to is that commercial banks, as they are constituted in Uganda, may not be the vehicle through which to channel these funds.

Government may find that the current model will be suited for those small business above sh100m in annual turnover, while the smaller businesses can work through their SACCOs or Village Savings Associations.

These know how to assess their members risk and provide for it, maybe the central bank will have better luck vetting SACCOs and let them get on with lending the funds to their members. Even if they don’t get many SACCOs it wouldn’t be as bad a success rate as a loan a month that they are showing now.

We need too, to guard against throwing good money after bad.

I have always believed that the main challenge of our business community is inadequate business skills, to allow them not only to thrive in good times but survive through the bad times.

"ABSA bank, at the end of February graduated some 60 decision makers from 46 SMEs who had gone through a yearlong Business survival and continuity training, aimed at equipping them to make sound strategic decisions....

The training was triggered by the challenges businessmen; especially SMEs were struggling with over the last two years due to the Covid-19 pandemic. Participants from the construction, manufacturing, tourism and hospitality sectors.

Among the things they learnt was running business online, building financial management systems and business planning, modelling and management among other relevant subjects. The graduating firms after vetting will have a chance to receive grant financing from GIZ one of ABSA’s partners in delivering the training.

The rationale is sound, enable the potential recipients with business skills so that they can maximize the benefits from future funding.

“To move Uganda and Africa forward, we are going to need collaborative efforts across the board to bridge the skills gap that is holding our SME sector back,” Mumba Kalifungwa, Absa Bank Uganda’s Managing Director (extreme left) said at the event.

The best of intentions can be derailed by an inadequate understanding of the challenge. Planners in both public and private sector need to walk in the shoes of the intended beneficiaries to understand their needs and provide the relevant solutions.

The need to do the right thing has never been more urgent. The SME sector accounts for more than 80 percent of the jobs in the economy. However, some estimates suggest over four million of the 13 million employed in this sector have in the last two years a suffered a decline in their incomes or lost them altogether.

They say the road to hell is paved with good intentions, but that need not be.

IN THE RUSSIA-UKRAINE WAR COMMUNICATION IS EVERYTHING, NATURE ABHORS A VACUUM

podcast here

Leading up to the first gulf war when the US and its allies first attacked Iraq in 1990 the western media bent over backwards to show how deadly Saddam Hussein was and hence the justification for his removal.

They consistently touted Saddam’s battle hardened army – it had just been in an eight-year war of attrition with neighbour Iran and his 400,000-strong republican guard, which was disciplined, well trained and sophisticated.

On later thought we laugh that Saddam must have been reading the western press and wondering whether they were talking about him, because before we could reach for the popcorn General Norman Schwarzkopf’s troops had reached the gates of Baghdad and the war was effectively over.

Later reports were that the US and its allies in some places found soldiers armed with nothing but pitchforks.

"It took a second war, a decade later – with a new narrative about the fictitious weapons of mass destruction, to dislodge Saddam and send Iraq back to the dark ages....

As I see the noise around the current war in Ukraine, I cannot help going back to that first gulf war three decades ago.

With the benefit of experience, I now see that Saddam’s major failure was his inability to win the communications war. All the international media houses, including at that time, the fresh-out-of-the-box CNN were western controlled and dominated the narrative. In a time before the internet, their narrative of events is all we swallowed.

In communications training I always insist that when you are operating in a vacuum, that is little to nothing about your enterprise is being communicated, the vacuum will be filled and more often than not to your detriment. If you are a serious player, you have to ensure that vacuum does not exist, you have to populate it with your message, so when the fight comes you have a foot to stand on.

So Vladmir Putin, who the west have demonized –  I have heard him referred to as a thug in certain sections, is suffering Saddam’s problem. His story is being written for him and not by his friends.

The former KGB boss probably is not surprised by all this firestorm of negative press and has probably factored it into his calculations, despite what the western press says. But he might learn or already has that the “manufactured consent” that has been created by the western media means he will get little to no sympathy from everybody else leaving Russia open to all sorts of attacks and a very uncertain destiny.

He is at a disadvantage. The number of people who can speak Russian outside of Russia can be counted on one hand.

"Which in hindsight makes the colonial project a work of genius. Apart from extracting raw materials from the colonies at dirt cheap prices to fuel their industry, they ensured a critical mass of people spoke English. About one in five people on the planet now are English speakers and this number is growing as they teach English in schools today around the world as a matter of routine.

So when the western propaganda machine swings into action it has almost two billion malleable minds paying attention.

The old saying that sticks and stones may break my bones but words cannot is due for a readjustment.

Does the fact that Russia feels threatened by its enemies, the North Atlantic Treaty Organisation (NATO) pushing to set up camp at its border in Ukraine, count for nothing? That Russia sees itself being squeezed into nothingness, the end game in the cold war, with real consequences for that nation, does this count for nothing? Never mind that a unipolar world, never mind how benign the single power seems to be, will not be good for anyone.

Putin may as well be howling into the wind, we are not listening.

I never know whether to laugh or cry at how our companies and countries continue to treat the communications function as something to endure with gritted teeth rather than embrace as a key function in achieving their strategic objectives.

Many labour under the biblical saying “That we will be known by our good works”. In a world where information is moving faster and faster, that assumption is seemingly more and more dated, leaders and managers need to, no, must communicate.

The thing is, communication is not as sexy as big procurement deals or commissioning big plants or juicy promotions. Communication like everything in life works by compounding, small moves made frequently and consistently build up to improved perceptions and associations. The challenge of course is the better you communicate the less it seems important, but when the crisis comes you will have built enough momentum to ride it through...

Russia possibly has cutting edge military technologies and I believe they will make significant gains on the battlefield, but the war of perceptions has been lost and will very well determine whether they have a pyrrhic victory or not.

Which reminds me of the top NSSF official, who when the organization was getting bad press for the Nsimbe Estate scandal about 20 years ago, innocently said they felt no need to communicate all the good plans the Fund had because people would see for themselves. Needless to say he is no longer at NSSF and his good reputation did not survive the scandal.

 

CAN WE STAMP OUT CORRUPTION IN UGANDA?

podcast here

Last week the Inspector General of Government Betti Kamya reported that her office has started verifying the declarations of public officials.

Under the leadership code political leaders and senior public officials are supposed to declare their wealth every so often. The move is intended to serve as a deterrent to corruption.

However, her office also reported that thousands of political leaders and public officials have not declared the wealth in the stipulated time. Of the 25,000 political leaders 23,080 had not declared and of the 333,000 public officers only 182,187 had declared their wealth.

Such breaches can lead to interdiction of public officials, confiscation of ill-gotten wealth, payment of a fine and imprisonment depending on the crime.

So in an ideal world we should expect in coming weeks and months, mass interdictions of public officials, convictions, fines and jail term for thousands of officials who have thumbed their noses at the IGG...

The man on the street will not encourage you to hold your breath for this to happen. If it happened, it would be an earth shattering development. This is sad not least of all because the general public has little confidence in the government’s will to stamp out corruption.

But why is it so hard to rid ourselves of this scourge?

Isn’t it clear that corruption negatively affects service provision and therefore is politically expensive? Isn’t it clear that it serves to widen wealth inequalities in the society which threatens instability and chaos? Isn’t it clear that the stronger the corrupt become, will protect themselves against any move against them from wherever it comes endangering the very government that seems to be protecting them from prosecution?

The Auditor General in his report for the year ending 2021 pointed out that hundreds of government projects happen without a feasibility study done, which means they may not be successful in achieving their intended goals, may suffer duplication and worse, suffer conflict from other government projects.

They say when we fail to plan, we plan to fail. So it is safe to say most of these projects will flop, which is sad, even tragic, because of the 371 projects sampled 245 – worth sh645b had no feasibility study.

A few years ago the budget for treating 140,000 inpatients at Mulago hospital was set at sh22.5b. Assuming a third – about sh215b of those unplanned expenditures went to waste, that would be the cost of treating all Mulago’s inpatients for ten years. Or put another way because these monies have gone begging the quality of service at Mulago will, and does reflect that loss.

This is more important than it sounds. One of the main ways to get people out of poverty is to give them the means to earn more. Countries do this by educating their people – so they can earn more and keeping them healthy – so they can have fewer sick days, so to the extent you can offer quality education and health services, because some people are pocketing the money, means more people miss the bus out of poverty...

But assuming this sh215b was shared equally – is their honour among thieves? by 100 officials each taking home just over two billion shillings, so not only have a million Mulago patients suffered poor quality service the hundred officials can now be treated in private hospital here or abroad. The resources of a million have been appropriated by a 100 people. Meaning, as the poor people get poorer because the ladder to wealth has been kicked out from under their feet, the rich public officials get richer because they and their offspring get better services, that improve their productivity and ensure they will earn more. Scandalous!

Which brings me finally to the question of whether corruption can be stamped out. While it is true that if you called a meeting of the corrupt you would have an empty room, the corrupt have their networks which feed them and more importantly preserve them.

A man with an official salary of four million shillings but who earns up to 10 times that amount monthly in underhand deals, will fight viciously to protect his turf. His co-conspirators brought together by mutual benefit will do the same. The more they eat, the more extensive and entrenched the networks become until they assume a life of their own and are a power onto themselves.

We see it every day with the sense of entitlement and the impunity of certain sections of our society.

As they grow they will stop working for the government and the government will start working to sustain them, their friends and family.

And eventually, in the weird way that these things work, they will become a threat to the very state that feeds them. Because at some point someone is going to say enough is enough and these corrupt networks will do away with such “retrogressive” ideas...

No one can argue that we aren’t already far along that slippery slope. Whether we are beyond redemption will depend on who you talk to.

So, can we stamp out corruption from this country?