The story is told of the man who frustrated with eking a living on his farm, sold it and took off into the world to find his fortune.
After trying this and that with little success and his
finances dwindling to a drip, he decided to go back, with the hope that his own
may treat him better. When he got back he was shocked to find where his farm
once was a thriving diamond mining enterprise.
The moral of the story is that we often miss the opportunity
staring us in the face for speculative fortune further afield.
Last week the Private Sector Foundation of Uganda hosted a
dialogue on “The status of East Africa community process on investments and job
creation”
The event, co-sponsored by the Mastercard Foundation, came
with equal part jaw dropping surprise and headshaking despair.
"New entrant Democratic Republic of Congo (DRC) comes with a
bounty of gifts, which include the fact that a third of all the world’s copper
and cobalt reserves are underground there. We more or less knew that. But when
we heard that assuming Uganda exploits its oil optimally we could have an
economy by 2050 equal to the current size of the South African economy -- $500b,
you had to seat up and pay attention....
The reincarnated East African Community (EAC) has been in
existence for the last two decades, while the free movement of goods and
services came with the common market protocol in 2010. In this time we have
seen trade within the region grow to about 20 percent from a six percent at the
turn of the century.
As an example it is reported that at least 80 million youth
are unemployed in the region. Unemployed as used in this context means a person
who has done paid work in the last week. So the reality is definitely much
worse. The Economic Policy Research Center (EPRC) estimates we need to create
120 million jobs to plug the hole.
With a new regional population of about 300m and a combined
GDP of just under $300b and the freeing up of the movement of goods and people,
job creation should come easier to the region.
The free movement of goods and people will boost industry
and services with a corresponding increase in jobs.
However, we learnt that Non-tariff barriers are holding back
our full potential. While goods move around largely tax free in the region,
powerful interest groups have conspired with their respective states to throw
up other barriers to trade, to protect their own interests be they their own
inefficient industries or importation deals from outside the community.
So suddenly your maize or eggs don’t meet their health
standards, never mind the market for our eggs have been growing in the last few
years. Or your milk, it is suspected to cheap to be locally produced, you must
have sailed it in all the way from Australia and smuggled it in via the DRC or
how is it that now a truck can only make two round trips a month to the coast
now when in 1977 it could do two round trips in a week on roads that were in
worse shape than they are now.
It would be easy to dismiss these as teething pains of the
young community, but we need to nip them in the bud before they become
entrenched in our way of doing things.
Besides that, some people have made the argument that quality
of the population is lacking, be it in terms of purchasing power or capacity to
actualize our potential. But its probably a chicken and egg situation, do you
open up to trade and raise incomes and therefore the quality of your people or
do you wait to improve the people’s quality and then the trade and increased
economic activity follows? I think it is the former rather than the latter.
That being said the respective government really need to be
more proactive in improving the quality of the people by rejigging the
education system, improving health care and other services.
Making entrepreurship part of the curriculum on day one and
business support services to existing businesses, may make the difference
between Ugandans benefitting maximally from the new opportunities or we may be
in danger of providing only office messengers to the region.
On an intellectual level we know our acres of diamonds are
under our feet, but the will to do what is necessary to unearth those diamonds
seems is slow in materializing.
