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.