HARNESSING THE POWER OF THE SACCOS

Recently I had the pleasure of attending a training workshop for savings & credit cooperatives conducted by the African Confederation of Co-Operative Savings & Credit Association (ACCOSCA). The training was aimed at renewing our appreciation for the cooperative’s philosophy.

An intense program that saw us seeing double after three days, served among other things, to renew my faith  in the power of collective action.

Among the SACCOS represented were the UPDF's Wazalendo and the police's Exodus SACCOS. Both easily the biggest SACCOS by membership and the former the largest SACCOS by any measure in Uganda and among the top 10 biggest on the continent.

Wazelendos cooperatives CEO, the unassuming Colonel Joseph Onata had my jaw on the floor when he casually mentioned they made a surplus of sh71b last year with assets approaching trillion shillings.

The numbers are impressive enough but for me the wonder is that this has been accumulated by among the least paid workers in Uganda. It is testament to the wisdom of starting where you are and the power of consistent action over time.

Beyond the numbers the SACCOS is serving as vehicle for improving member welfare through supporting individual development and eventually ensure members have something to start with when they leave the forces.

I never tire of saying that the reason why our continent is poor is our inability to aggregate our resources, be it land, capital or human resource. Needless to say it starts with the fragmentation of the continent into 50+ countries.

The concept of the cooperative does not cease to show the power of numbers and more importantly how much resources we have lying dormant around us.

In addition, this column has argued that our problem is not a lack of funding  but a lack of organisation – when we get organised the money comes, as if by magic.

I learnt that there are at least 30,000 SACCOS in Uganda, the majority formed opportunistically to take advantage of government largesse. I am willing to bet only a handful of these will be alive and thriving a decade from now, because money is not the problem but organisation.

While channeling money through SACCOS is not a bad idea, it’s the execution that dictate the suboptimal results that will arise.

The apex body of the SACCOS Uganda Cooperative Savings & Credit Union (UCSCU) is building a liquidity fund that is building capacity to operate as lenders last resort to the industry. The more efficient thing may have been to deposit the funds with UCSCU, encourage citizens to sign up with their nearest SACCOS to access these funds.

At least two outcomes would have been achieved with this approach, a strengthening of the sectors ability to self-regulate through UCSCU and strengthening of existing SACCOS. As it’s now the resources – a few billion shillings, have been scattered helter-skelter across the countryside defeating the intended purpose. Once the dust settles the cream will rise to the top as the poorly organised SACCOS collapse, and their members having appreciated the benefits of the SACCOS join the more credible SACCOS. A process which would have been shortened had we designed the program better.

Currently regulation is in limbo. Under the urgent law the largest SACCOS with savings of more than sh500m are supposed to be supervised by the Bank of Uganda, on the surface a good idea but deeper analysis a potentially disastrous move.

Given the growth of the sector the need to safe guard member savings at the bare minimum is a critical one. However, the central bank has neither the capacity nor the temperament to regulate SACCOS.

Currently there are at least a few dozen SACCOS that have savings of more than sh500m – and growing, this supervisory load will be added to the 20+ commercial banks Bank of Uganda already oversees. While it is correct the central bank should have more than a passing interest in the sector their direct supervision is not necessary nor desirable.

Across the border in Kenya, which has more developed SACCOS than we do, a separate regulator was created which has stabilised the sector and ensured its continued growth and development.

Central bank regulation as it is designed now serves to increase costs of compliance and shut out those who are already excluded from the financial system.

Seven years ago this column reported that Wazalendo had made a surplus of sh12b off assess of more than sh150b. Going by this number they have grown six fold in the interim. While they are not a proxy for the industry, they are an example of the possibilities the sector holds.

Planners and regulators need to take a long term view of the sector to not shackle them at the same time prevent the worst excesses that happen when mere mortals come into contact with sackfuls of money .

 

CLIMATE CHANGE; NO MORE FUN AND GAMES

I remember it like it was yesterday. This was 1983. At first the dry weather never bothered us. In fact we welcomed it. We wanted to play soccer and the rain was a hindrance to our childhood enjoyment and ambitions.

The year before the football World Cup had been held in Spain and our imagination was still fired up by man-of-the-tournament Paulo Rossi. We all wanted to play in the World Cup one day. Rain would only slow down our ambitions in that direction.

But soon playing soccer was nearly impossible as the school field was rendered unplayable by a network of cracks wider and deeper than  I had ever seen before or since. By the time the rains came, the field was a dust bowl with yellow and white patches, the only proof of grass.

"Across the border from us Ethiopia and Somalia were suffering the brunt of the drought. It was so bad it took an international response, triggered by the song “We are world" performed by the world’s leading artists of the time....

That same drought also brought with it the photograph seared in our collective memories of the vulture perched on a dried log, watching a badly emaciated  child,  who squatting on its haunches, had as if stopped to give up on life, its final breath seemed imminent. And the vulture knew it.

If ever there was a case for the cliche a picture is worth thousand words, that was it.

Forty years later the horn of Africa is faced by the worst drought since that drought of my  childhood, and  an ongoing “Safal Eye in the Wild Photography competition" sponsored by Uganda Baati is timely. The competition that was launched in July and ends 15^th September it is hoped in its small way, can help galvanise opinion in support of environmental conservation.

God forbid a similar award-winning photograph will present itself, but now more than ever world opinion needs to be mobilised to fight back the existential threat of climate change.

Already this year the hottest temperatures in recent  memory have been recorded . It has been so hot that forest fires have been raging in North America laying waste to half of Hawaii and much of western Canada. No lesser fires ave been reported in Spain, France and Romania this year.

On the flip side California is enjoying rain for the first time in five years but it has come with hellacious intensity resulting in flooding and massive displacement.

Nearer to home climate change has led to the aforementioned drought in the horn of Africa but also apocalyptic flooding in Malawi, Mozambique, Madagascar South Africa and Zimbabwe.

But the doubters remain, blinded to the looming threat by ignorance or worse, by self-interest.

"Climate change is being driven by growing consumerism which has led to wanton destruction of the environment, especially indiscriminate depletion of forest cover, which in the past helped to mitigate against climate change...

The trees absorbed the carbon emissions from the atmosphere, which are largely responsible for the rising temperatures and the changes in the climate that come with it.

In case you have not worked it out, for a country like Uganda which is largely agricultural there is no way we can  ignore the growing trend.

Climate change can very well affect our capacity to produce food. An issue of concern especially as our population continues to grow by leaps and bounds, putting added strain our natural resources. We have had the luxury of continuing with our inefficient farming methods because we have fertile soils and rains year around. Climate change means among other things, our soils are losing their vitality and our water sources are dwindling.

Uganda for example has seen its forest cover plummet to 9 percent in 2015 from 24 percent in 1990. Recovery to 12.5 percent has been reported but clearly the reforestation is just barely keeping up with the destruction.

But the real challenge of the battle to beat back climate change is that there has to be a global response. Environmental degradation or irresponsible carbon emissions in New Zealand or Alaska can affect Uganda’s climate in the middle of Africa.

We can plant all the trees we want, reduce our emissions through the use of clean energy and energy saving technologies, but this will count for nothing if western economies  continue with their unsustainable lifestyles.

"The case can be made that climate change is driving even the break out of civil unrest and war around the world and particularly in Africa, as governments fail to facilitate greater efficiencies in exploitation and distribution of existing resources.  Matters will not get any better with the environmental degradation and the ensuing climate change.

The need for a global response is a moot point and cannot be overemphasised. The use of visual images transcend language, culture or ideology as a means to drive the point home about the urgency of w collective call to action against climate change.