BOOK REVIEW: BEFORE WEALTH, FIRST A MINDSET CHANGE

Book Review: Rich Dad's Guide to Investing

Author:  Robert T. Kiyosaki

 

                                                

 

I have been a fan of Robert Kiyosaki and his “Rich Dad” series since I bought my first book  -- “Retire Rich, Retire Young”, 20-odd years ago.

Up to that point in my life (blame it on my Catholic upbringing) I believed that wealth accumulation was for a select few, which is true, but not for the reasons I thought. I thought some people were genetically predisposed to be rich, that wealth accumulation was based on the genetic lottery and not a learned behaviour.

I thank Kiyosaki for that shift in mindset.

Lately with time hanging loosely on my hands, I decided to go back “revise” Kiyosaki. To my mind “Rich Dad’s Guide to investing” is the one the series which speaks most to shifting mindset as a starting point to eventual wealth.

Kiyosaki begins with the foundation of financial success—education. He argues that most people are trapped in a cycle of earning and spending because they lack the knowledge needed to make money grow. Unlike traditional education, which often prioritizes job readiness, financial education teaches individuals how to manage, grow, and invest their earnings effectively.

He underscores the concept of assets versus liabilities, a cornerstone of his philosophy. Kiyosaki’s rich dad—the inspiration behind his financial lessons—taught him early on that financial literacy involves understanding the difference between what puts money into your pocket (assets) and what takes money out (liabilities). The book stresses that true investors focus on accumulating assets like real estate, stocks, and businesses, which generate ongoing income.

Kiyosaki’s emphasis on financial education isn’t limited to theoretical knowledge. He advises readers to actively seek opportunities to learn—whether through books, mentorship, or hands-on experience. Investing without understanding the market, he warns, is akin to gambling.

“The more you know, the less risk you take.”

This quote hit me the first time I read it, understanding it to mean that more knowledge is key to mitigating against risk.

 

The Power of Long-Term Thinking

 

Unlike many who are swayed by the lure of quick profits, Kiyosaki stresses the importance of building wealth over decades. He highlights that true investors aren’t focused on the next big stock tip or speculative trend but are instead committed to steady growth through well-chosen assets.

Kiyosaki’s perspective on patience is particularly relevant in today’s social media soaked reality, where the temptation to “Keep up with the Jones” is strondger than ever before.

This approach also involves resisting the temptation to sell assets prematurely for short-term gains. Kiyosaki emphasizes the importance of reinvesting returns to compound growth, a strategy that has been key to the success of wealthy individuals.

By prioritizing sustained growth over instant gratification, Kiyosaki offers readers a mindset shift that is crucial for successful investing.

 

The Role of Leverage in Building Wealth

 

Another crucial lesson in the book is the strategic use of leverage. Kiyosaki introduces leverage as a tool that amplifies financial outcomes by utilizing resources beyond one’s own. Expanding its meaning beyond borrowing capital, to leveraging expertise, or using other people’s time and skills to maximize returns.

While leverage has its risks, Kiyosaki argues that educated investors know how to manage these risks effectively. For instance, in real estate, he demonstrates how borrowing money to purchase property can yield substantial returns when managed wisely. Similarly, building a business involves leveraging the skills of a team to achieve results that would be impossible for an individual to accomplish alone.

Kiyosaki warns that without the requisite financial knowledge, over-leveraging can lead to disastrous consequences, such as unmanageable debt or poorly performing investments. He encourages readers to approach leverage with caution, ensuring they have a solid understanding of the associated risks and benefits.

But my key takeaway when I first read the book and again more recently, is that our expenses determine whether we will accumulate wealth or not. More than our income.

There are only two ways to spend your money either to invest it or eat it. If your expenses tend toward one side or the other will determine whether you have a chance of being rich or not. There is really no way around that.

So when we are struggling financially regardless of our income let us look to ow we spend.

As if I could forget "Rich Dad’s Guide to Investing" excels in its ability to simplify complex financial concepts without diluting their significance. The lessons on financial education, long-term thinking, and leverage are not only practical but also timeless, providing a strong foundation for anyone eager to embark on their investment journey.

“Rich Dad’s Guide to Investing” is an empowering guide for those who want to take control of their financial futures. By emphasizing the importance of financial education, the value of long-term thinking, and the strategic use of leverage,Kiyosaki provides readers with a roadmap to achieving financial independence.

I think this book is good reading for even financial experts who have forgotten or never knew, that before any action first the thought. The actions can only be as good as the mindset dictating those actions.

 

LOOKING TO A PRESIDENT YOWERI MUSEVENI SUCCESSION

The succession of President Yoweri Museveni, who has governed Uganda for nearly four decades, is one of the most significant political events looming on the horizon. Museveni’s tenure, marked by a blend of revolutionary zeal, economic pragmatism, and strategic regional diplomacy, has left an indelible mark on the country’s political, economic, and geopolitical landscape. As Uganda anticipates a future without its longtime leader, the questions surrounding his succession involve not only the mechanics of transition but also concerns about the stability, direction, and identity of the country going forward.

This essay explores the political, economic, and geopolitical concerns surrounding Museveni's succession, considering historical examples of African leadership transitions, as well as potential succession models for Uganda. It also highlights how Museveni's personal history and political journey complicate the process of his succession.

---

1. Political Concerns

A. Institutional Weakness and Political Polarization

Uganda’s political system, though formally structured by the 1995 Constitution, faces significant challenges when it comes to ensuring a smooth and peaceful succession. While the Constitution specifies that the Vice President should step into the president’s shoes temporarily before elections are held, the system has been weakened by years of political centralization under Museveni. The executive has often dominated Uganda’s political sphere, undermining the independence of institutions like the judiciary, Electoral Commission, and Parliament.

This centralization of power has made it difficult for democratic institutions to function independently and efficiently, raising concerns about their ability to fairly manage the succession process.

Furthermore, Uganda’s political landscape remains deeply polarized. The NRM, which has governed the country under Museveni’s leadership, faces substantial opposition from both within the party and from other political groups. Museveni has long been accused of suppressing opposition, restricting political freedoms, and controlling electoral processes to ensure his continued rule. This suppression of dissent has led to a lack of trust in the country’s democratic processes, creating an environment ripe for instability during a leadership transition. Opposition parties, such as the Forum for Democratic Change (FDC) and the Democratic Party (DP), have long been sidelined, and many of their members see Museveni’s departure as an opportunity to challenge the status quo. However, the lack of political plurality and the dominance of the NRM may mean that the transition is fraught with conflict.

The issue of internal party divisions within the NRM also complicates succession concerns. Speculation about Museveni’s son, Muhoozi Kainerugaba, as a potential successor has created tensions within the party. These tensions are fueled by rival factions and by the general fear that Museveni’s personal leadership style, which has consolidated power around him, may result in an overly personalized transition. The question of whether the NRM can unify behind a single successor is central to the stability of the transition. If the party fractures during this period, it could lead to a protracted power struggle, which would likely involve the military, as it has historically played a key role in Uganda’s politics.

B. The Role of the Military

The Ugandan military, particularly the Uganda People’s Defence Forces (UPDF), has played an instrumental role in Museveni’s rule. Museveni himself rose to power through a military rebellion, and since taking office, he has ensured that the military remains a central pillar of his regime. This strong military presence has helped maintain order and stability but also means that the military could play a central role in the succession process. The UPDF has been integrated into the political fabric of Uganda, with key military figures holding prominent government positions. While this has helped the NRM maintain power, it also raises concerns about the possibility of military involvement in the succession process, particularly if rival factions within the party or military feel excluded.

The military’s involvement could also exacerbate tensions within Uganda, as citizens and opposition groups may fear that the military might intervene to ensure the continuation of Museveni’s rule, even if the transition process is peaceful. The presence of Muhoozi Kainerugaba, Museveni’s son, within the military further complicates matters, as it raises the possibility that the military could push for his succession in the name of stability, regardless of broader democratic considerations.

---

2. Economic Concerns

A. Resilience of the Economy and Structural Challenges

Under Museveni’s leadership, Uganda has undergone significant economic transformation, particularly since the early 1990s, when the government embraced a free-market, liberalized economy. The economy has proven to be relatively resilient during times of crisis, and Uganda has experienced consistent growth despite political instability in the region. However, Museveni’s departure raises concerns about whether the next leadership will continue the economic reforms necessary to maintain stability and growth.

Uganda remains largely dependent on external sources of investment, with foreign direct investment (FDI) playing a pivotal role in financing development. Although Uganda has seen impressive growth rates, the economy continues to struggle with a narrow base of domestic capital. The development of a robust indigenous capital base has been hindered by factors such as inadequate access to financing, the small size of Uganda’s middle class, and the limited reach of domestic financial institutions. These limitations make Uganda vulnerable to external economic shocks, and any disruption in the political process could exacerbate this vulnerability.

A major challenge is the country’s relatively underdeveloped middle class. While the middle class has grown in recent years, it remains small and vulnerable. The size of the middle class in Uganda is insufficient to drive sustainable, long-term economic growth. Many Ugandans are still engaged in subsistence agriculture, and urbanization has not been accompanied by widespread industrialization. This leaves Uganda in a precarious position, especially given the country’s large, young population, which faces high levels of unemployment and underemployment. The lack of a significant middle class means that there is a limited consumer base to sustain economic growth during times of political transition.

However, there are emerging signs of progress in terms of local resource mobilization. The National Social Security Fund (NSSF) has become a key player in Uganda’s financial landscape, acting as an important vehicle for mobilizing domestic savings and investing in infrastructure projects. Furthermore, the rise of fintech platforms and unit trusts has increased financial inclusion, allowing ordinary Ugandans to participate in the financial system in ways that were previously not possible. These mechanisms could help reduce Uganda’s reliance on foreign capital, but their sustainability will depend on the political and economic stability that follows Museveni’s succession.

---

3. Geopolitical Concerns

A. Museveni’s Strategic Acumen

Museveni’s geopolitical influence has been an important aspect of his legacy. Since coming to power in 1986, he has skillfully navigated the complex regional and international landscape, balancing Uganda’s interests with those of its neighbors and key global powers. His diplomatic approach has helped elevate Uganda’s status in Africa, and his role in regional peacekeeping efforts, including the African Union Mission in Somalia (AMISOM) and peacekeeping in South Sudan, has positioned Uganda as a key player in East African security.

Museveni’s leadership has been marked by pragmatic diplomacy, especially in balancing Uganda’s relationship with Western powers, such as the United States and the European Union, while also courting emerging global players like China and Russia. His ability to extract aid and investment while maintaining Uganda’s sovereignty has been a hallmark of his foreign policy. This diplomatic acumen has helped Uganda maintain relative stability in a region that has seen frequent conflicts.

However, Museveni’s departure could create uncertainty in Uganda’s regional and international relationships. A less experienced successor may struggle to maintain these complex diplomatic and military alliances, especially if they lack Museveni’s political acumen or personal standing. The risk of Uganda’s diplomatic isolation is a significant concern, particularly in light of growing geopolitical tensions in East Africa. Neighboring countries like Rwanda and Kenya, as well as the broader East African Community (EAC), will closely monitor Uganda’s transition to ensure that their interests are not threatened.

---

4. Museveni's Personal Historical Context and Its Complications

Museveni's personal history is an essential lens through which to understand his complex leadership and its implications for succession. Born into a poor family among the nomadic Bahima people in southwestern Uganda, Museveni grew up in a rural setting with little in the way of material wealth. His formative years were deeply influenced by the political and social upheavals of colonial Uganda, which, coupled with his exposure to Marxist and anti-imperialist ideas during his youth, played a crucial role in shaping his political ideology. Museveni was swept up by the anti-colonial and anti-imperialist rhetoric of the independence movement, which left a lasting imprint on his worldview.

Museveni’s involvement in the anti-colonial struggle and his subsequent embrace of revolutionary, socialist ideals during the Cold War period played a significant role in his rise to power. Museveni’s early revolutionary activities culminated in the formation of the National Resistance Movement (NRM), which would eventually lead to his victory in 1986 after a five-year guerrilla war. His initial stance was one of ideological purity, rooted in the struggle against dictatorship and imperialism.

However, after the fall of the Berlin Wall and the collapse of the USSR, Museveni shifted towards a more pragmatic stance, embracing the free-market economic model promoted by the West. The collapse of the Soviet Union and the end of the Cold War forced Museveni to adapt to the new unipolar world order, where economic liberalization became a central tenet of governance. This pragmatism, while ensuring Uganda’s integration into the global economy, further complicated the succession debate. Museveni’s transition from revolutionary firebrand to economic pragmatist has shaped his leadership style, leading to a highly personalized regime where decisions often revolve around his own judgment rather than institutional consensus.

Museveni’s personal historical context, marked by his rise from poverty, anti-imperialist revolutionary zeal, and eventual embrace of economic liberalization, complicates the succession process. His personal journey has resulted in a leadership that blends ideological rigor with political flexibility, making it difficult for any potential successor to replicate his ability to navigate both Uganda’s internal political dynamics and its external relationships.

---

5. Possible Succession Models

Several African countries have experienced political transitions that provide valuable insights into potential succession models for Uganda. Examining these models, such as those in Tanzania, Kenya, and even a potential reversion to a parliamentary system, helps to frame the possible paths Uganda could take.

A. The Julius Nyerere Model (Tanzania)

Julius Nyerere, the first president of Tanzania, voluntarily stepped down in 1985, ensuring a peaceful transfer of power to his chosen successor, Ali Hassan Mwinyi. This model exemplifies a peaceful leadership transition where the outgoing leader facilitates the succession process. Nyerere’s transition was marked by his continued moral and advisory influence, but he largely refrained from interfering in the new government’s operations. Museveni could adopt a similar approach, supporting a successor and ensuring continuity while avoiding direct involvement in governance. However, Uganda lacks the same level of political maturity and institutional coherence seen in Tanzania, which could make such a transition difficult.

B. The Jomo Kenyatta and Daniel arap Moi Model (Kenya)

Kenya’s experience with succession has been mixed. Jomo Kenyatta’s death in 1978 saw his Vice President, Daniel arap Moi, assume power, albeit with some resistance from Kenyatta’s loyalists. Moi’s rule, though stable, marked a period of autocratic leadership. Museveni could follow a similar model, where a vice president or another figure within the NRM takes over, but this model carries the risk of power struggles and resistance from rival factions.

C. Parliamentary System Reversion

A reversion to a parliamentary system could provide a more democratic route to succession, reducing the concentration of power in a single individual. In this model, the Prime Minister would be chosen from Parliament, leading to a more collective form of governance. This would require significant constitutional reforms, and the challenge would lie in ensuring that the ruling party and other political factions cooperate to make such a system viable.

---

6. Conclusion

The succession of President Yoweri Museveni is fraught with political, economic, and geopolitical concerns. Museveni’s long rule has resulted in a highly personalized system of governance, weakening institutions and fostering political polarization. The question of who will succeed him and how the transition will occur looms large, as the NRM

faces internal divisions, and the role of the military remains uncertain. The resilience of Uganda’s economy, while an advantage, also depends on the continuity of policies that may be threatened by a change in leadership. Furthermore, Uganda’s foreign relations, particularly in East Africa, could be destabilized if the country’s diplomatic acumen is lost with Museveni’s departure.

Complicating these concerns is Museveni’s personal historical context. His journey from revolutionary leader to pragmatic economic manager has shaped his leadership style, making his succession more difficult to navigate. Whether Uganda can manage a peaceful transition will depend on whether political and institutional reforms can be implemented before Museveni’s departure, and whether his legacy will allow for a new chapter in Uganda’s history.

WATCH OUT FOR UETCL

Almost 40 years ago this country was in shambles. One did not know where to start to get it back on its feet. Insecurity was rife, inflation had run rampant and government did not have two coins to rub against themselves.

One of the major deficiencies was power availability. Owen Falls dam  -- now Nalubale dam,  was generating only 60 of its 150 MW capacity. Power was intermittent in the best of times but mostly not available altogether.

When we think of the power sector we think of generation and last mile distribution.

But in the last 20 months the transmission component, which gets power from the generators to the distributors – Umeme, in our case, is beginning to come alive, holds a lot of potential and a major piece of the puzzle of Uganda’s revival may finally be in place....

The most dramatic developments during this period was that West Nile is now on the national grid – for the first time since Independence and so is Kabale, which will be switched on before the year end.

But also as dramatic is the linking of Gulu to Agago, which will finally see power evacuated from Achwa power dam, where government has been paying $2.5m (sh9b) monthly for power that is not consumed.

There was also the long overdue connection of 600 MW Karuma dam to the grid which happened in the second half of this year.

All these and many more projects were stalled often due to bureaucratic red tape, that it took a new set of eyes in Joshua Karamagi, who became CEO in March last year, to unlock the backlog.

“This was a team effort but when you focus on delivering, this road blocks become mere distractions and it is easier to bring all the relevant people around the table to sign off and get the project going,” Karamagi said on the sidelines of an end of year media party last week.

While these are critical I am particularly excited at UETCL’s efforts to participate fully in the East Africa Power Pool (EAPP) with its plans to connect our grid to Tanzania through Mutukula, South Sudan via Nimule and the DRC via Arua.

This is particularly important in view of the surplus we now have, we now generate 2000 MW or about two and a half times our peak demand of 800 MW. Meanwhile our neighbours are all suffering deficits, except for Ethiopia.

This is ironic because 20 years ago when then energy minister Saida Bumba was trying to lock down financing for Bujagali dam, she was made to jump through hoops, flying around the region getting our neighbours to take our power if we failed to consume it. The funders of the dam were not convinced Uganda could consume Bujagali’s 250 MW and were skeptical that the region would either. In hindsight there are many ways to view this, none of which are charitable to our donor partners.

It has been estimated that we have the potential along the Nile to generate 4000 MW, UETCL’s efficient operations will be key to exploiting this potential.

 UETCL reported earlier this year that exports to Kenya had returned to pre-Covid levels of $44m (sh170b) last year and are set to exceed that this year. Already we are selling a million dollars’ worth of power to Rwanda monthly.

The potential to supply to power to eastern Congo and southern Sudan is a mouthwatering opportunity we may only just be beginning to set up for.

It is not inconceivable that in coming years that electricity will become a major export earner.

Locally too the ongoing plans for the electrification of Mbale, Kabale and Kapeeka industrial parks, second phase of a project to support industrial parks around the country, will have far reaching implications for job creation, exports and the general economy.

We have learnt through hard experience that availability of power is critical to economic growth and development. 

"The increase in generation capacity on one hand and the improved efficiencies that Umeme brought to the distribution sector, has played a major part in the unbroken string of economic growth even during Covid lockdown...

The power sector is currently on the brink of a major transition, with the exit of power distributor in March next year. With UETCL beginning to live up to its full potential may just help to smoothen the transition.

 

STANDARD CHARTERED, NSSF A SIGN OF THINGS TO COME

Recently National Social Security Fund (NSSF) unveiled its long awaited voluntary saving product, SmartLife. The product linked to their already existing app, will allow people to save voluntarily with the fund, earn compound interest and help plan for medium to long term goals.

Similar to the unit trust funds we have become accustomed to, except that your funds will be locked in for a predetermined duration as way to encourage long term savings. This product is in aid of the Fund meeting its target of covering 50 percent of the country’s working population by 2035 and may very well have far reaching consequences for savings rates in the country and eventually lending rates.

Following hot on the heels of this development, was the announcement last week that Standard Chartered Bank was winding down its retail banking and wealth management operations in Uganda, a process that will be finalised over two years.

It is hard to believe this was a spur of the moment decision, given how the bank has been aggressively reducing its branch network over the last five years, shifting most client interaction online.

It make sense, following behind Barclays Bank, which sold its continental operations to ABSA about three years ago. And in another industry, the sale of petroleum company Shell’s regional assets to Swiss trader Vivo energy about a decade ago.

The reality is that these multinationals, among other things, are finding their margins cut to the bone, as the cost of their high compliance standards, make it difficult to compete with the Johnny-come-latelys, who in many liberalized markets are willing to cut corners and undercut the big players.

This in addition to developments in technology mean, for instance in the case of banks, that branch networks, or even what constitutes a branch, are dated concepts. Carrying the overheads that come with these, while competing with more nimble, virtual competition does not make sense.

The big boys are shedding their bottom of the pyramid operations, to better serve their bigger clients, where the returns per transaction dwarf dealing with the unwashed masses.

These moves are not unique to Uganda or this region, but are part of larger movement that has been unfolding since the beginning of the century.

More than a decade ago NSSF set upon improving compliance among employers liable for NSSF. They did this by beefing up their manpower and opening new branches. But today with greater phone penetration and internet coverage, NSSF does not need as much manpower or a large footprint to do the same job.

When I left university my attempts at opening a Stanchart account fell flat. Because they required a sh300,000 opening balance and a commitment that my bank balance would not fall below sh100,000. My gross salary at the time sh600,000. Those days a bank account was a privilege and not a right.

Fast forward to the present and I can not only open a bank account off my phone or laptop, paying next to nothing, but also I need not open it with a bank. It is safe to say that currently and into the future, most people’s first “bank” account will be with their mobile phone company...

These are part of the accelerating global trend towards digitization, miniaturisation and dematerialization...

Right now all information has been digitized making it easier to transmit and process, quicker than any time before. Which explains why banks are now open 24/7 compared to the old days when they closed for business at 1 pm and did not open on the weekends.

Older people would remember a time when an IBM 256 (the 256 means it had a storage capacity of 256 MB) would cover the better part of a desk. My phone now has a storage capacity of 64 GB and fits easily in my shirt pocket. In effect, I have the storage capacity of 250 IBM 256s at my finger tips. I imagine Stanchart may not have had those many PCs in 1995.

And then, because of the previous two, a lot of what used to be is no longer.

Younger people may find this funny, but there was a time when a calculator, diary, clock, telephone, computer, camera, video  game console etc were all different things, taking up a lot of space. Demateriliastion.

Essentially the big multinationals’ competitive advantage that came with their access to global pools of capital, huge size and global reach are being whittled away thanks to technology. They are retreating to areas where their competence is best suited, the bigger deals where transactions are markedly fewer but the returns are much bigger per deal.

"While the economy may not be at its best right now, these multinationals have operated under worse economic circumstances here and made tons of money, thank you very much. So the state of the economy is not the major driver of these moves...

The pull outs are part of a wider rearrangement of the global economy driven by the aforementioned trends.

In the new world managers will not be able to get by on just size and momentum, but will have to sharpen their strategic focus and execute efficiently.

 Expect this to accelerate in coming years.

 

MONEY MIND GAMES

Book Review: The Psychology of Money by Morgan Housel

                                                                

Morgan Housel’s The Psychology ofMoney is not your typical personal finance book. It doesn’t dwell on spreadsheets, stock market strategies, or budget formulas. Instead, it offers a profound exploration of the human behaviour and psychological biases that underpin our financial decisions. The book’s core premise is that financial success is less about knowledge or intelligence and more about behavior.

A Fresh Perspective on Money

Housel’s work stands out in the crowded field of finance literature because it focuses on the why rather than the how of financial decision-making. He argues that traditional financial advice often overlooks the emotional and psychological aspects of money. This is particularly evident in his observation that people make financial decisions not based on facts or data but on their unique experiences, upbringing, and worldview.

One of the book's central ideas is the notion that "no one is crazy" when it comes to money. Housel asserts that everyone has a rational justification for their financial behaviour, even if those behaviours appear irrational to others.

The Interplay of Luck, Risk, and Perspective

Housel masterfully intertwines stories of real-life figures—Warren Buffett, Richard Feynman, and even Ronald Read, a janitor who amassed millions through patient investing—to illustrate the unpredictable interplay of luck and risk in financial outcomes.

"He challenges the popular tendency to attribute success solely to hard work, emphasizing that luck often plays a significant role in financial triumphs...

This perspective is both humbling and empowering; it reminds readers to approach financial success with gratitude and financial planning with humility.

In one of the most memorable chapters, Housel discusses the danger of misjudging risk. He uses historical examples to show how catastrophic financial decisions often stem from underestimating risks or assuming the past will repeat itself. This theme of uncertainty recurs throughout the book, encouraging readers to embrace a margin of safety in their financial plans.

The Power of Compounding and Patience

Another key takeaway from the book is the extraordinary power of compounding. While the concept is not new, Housel breathes life into it by presenting it as a behavioral phenomenon rather than a mathematical principle. He uses the example of my favourite American Buffett’s success not being rooted in extraordinary investment returns but in his extraordinary time horizon—investing consistently from a young age and allowing compounding to work its magic over decades.

Housel’s emphasis on patience is refreshing in an era dominated by instant gratification and short-term thinking. He explains that the ability to delay gratification and endure volatility is often what separates successful investors from the rest...

The Role of Money in Life

Housel also delves into the broader philosophical implications of money. He encourages readers to define their own financial goals, emphasizing that money should be a tool to support a meaningful life rather than an end in itself. His discussion on the concept of "enough" is particularly powerful. He warns against the dangers of greed and the endless pursuit of more, suggesting that knowing when to stop is an underrated skill in financial planning.

This perspective aligns with his recurring theme that wealth is not about flashy displays of success but about freedom and peace of mind. Housel defines wealth as "the ability to wake up every morning and say, 'I can do whatever I want today.'" This redefinition challenges societal norms and encourages readers to reconsider their own financial priorities.

Practical Takeaways

While The Psychology of Money is not a step-by-step guide, it offers plenty of practical advice. Housel advocates for simple but effective financial habits: living below your means, saving consistently, and avoiding unnecessary financial risks. His recommendation to "save like a pessimist and invest like an optimist" captures the balanced mindset he promotes throughout the book.

Housel also emphasizes the importance of avoiding the pitfalls of comparison. He argues that comparing your financial journey to others’ is not only futile but harmful, as everyone’s circumstances and goals are unique. This insight is particularly relevant in the age of social media, where curated displays of wealth can create unrealistic expectations.

Criticisms and Limitations

Despite its many strengths, the book is not without limitations. Some readers may find Housel’s reliance on anecdotes and stories insufficiently rigorous. While these narratives are engaging and relatable, they sometimes lack the depth or data to fully substantiate his claims.

Additionally, the book’s focus on psychological principles means it may not appeal to readers seeking detailed financial strategies or technical advice.

Whether you’re a seasoned investor, a young professional just starting out, or someone simply seeking a healthier mindset toward money, this book offers invaluable lessons. Housel’s central message is clear: financial success is not just about what you know—it’s about how you behave. And in a world where our behaviors often dictate our outcomes, that is advice worth taking to heart.

GOVT SHOULD APPLY BASIC ECONOMICS TO CAP LENDING RATES

Uganda’s money lenders are appealing to President Yoweri Museveni not to assent to a law that will have government control lending rates.

A few weeks ago parliament passed the Tier 4 Microfinance Institutions and Money lenders Bill, 2024, which among other things, will have the finance minister setting the limits of what money lenders can charge as interest on their loans.

Ever since biblical times the money lender has not been a popular figure. The sin of usury or charging interest for lending money was on the books in medieval times. The church thought all loans should be interest fee, they of course did not factor in the risk to the lender and his right to some compensation for making money available to those who don’t have it...

I suspect too, that the church was being populist, trying to shore up its political muscle at the same time frustrate this new class of capital owners, who were threatening the church’s  power as major landowners.

Interestingly this thinking is what led to the growth of the Jews as controllers of the global financial system.

The kings of Europe and the church, banned them from owning land as punishment for betraying Jesus Christ –antisemitism. The Jews, unshackled by laws against usury, went into finance and the rest, as they say, is history.

Fast forward to the 21^st century money lenders are still getting a bad rap. The arm chair economists complain that lending rates are high and have set aside a special place in hell for money lenders who are unashamed to lend at more than 120 percent a year.

"Government, having forgotten the lessons of the economic reforms of the last 40 years, is jumping behind efforts to arbitrarily cap lending rates. As night follows day, this will only create the very situation they are trying to control, which is high lending rates...

But first some background.

In the late 1980s some central planners in the new NRM government called on government to not only stop landlords from charging rent in dollars, but also put a cap on rent. Government refused at the time, arguing that the “high” rents were caused by a shortage of housing stock. The way to bridge the deficit was to make the sector attractive to investors and by the law of supply and demand, rents will become more affordable.

As a result of this correct application of high school economics, there has been an explosion in the housing sector, which has made not only rents more affordable and stopped most landlords from charging in dollars.

If government had listened to the central planners, the housing market would not have grown as fast as it has and it is not inconceivable that we would now be paying a million shillings for the privilege of living in someone’s garage.

If some landlords are still charging rent in dollars it is often because they borrowed money in dollars to build and are passing on the exchange risk to the tenants. They borrow in dollars because it is “cheaper”.

To lower lending rates government need only enable a greater supply of cash available for lending and voila, lending rates will come down.

Similarly, to lower money lender rates, government just has to look at the demand and supply equation, ask the question how can we increase the supply of credit so even money lending rates can fall?

We have seen this happen in our life time.

The story is told of these money lenders who used to offer credit to market vendors at 10 percent a day. The business model was such that they would lend the vendors money in the morning to buy produce and collect at the end of the day. It made sense for the vendors and for the money lenders.

The money lenders’ dreams of infinite wealth were dashed by the entrance of mobile money lending, which was offering the same money at around 10 percent a month.  Some people would complain that this is still too high, but it was a no brainer for the vendors who can now borrow at 120 percent a year compared to 3,650 percent.

"By legislating to cap lending rates, law abiding moneylenders will take their money elsewhere, lowering supply of credit, pushing the money lenders underground, where prices will be even more unrestrained and collection methods will be more brutal...

A neighbouring country, has seen a reemergence of a black market in forex, the kibanda market, a relic of the pre-liberalised economy days. Their attempts to control foreign exchange flows has created the very situation they were trying to prevent – a shortage of forex.

Increasing the supply of loanable money is what government needs to do. And not by going out and handing money out at street corners, but by creating an environment where capital can see it fit to invest in the sector.

Government might want to start by finding a way to lower its appetite for borrowing from the public.

 

 

UGANDA IS POOR BECAUSE WE ARE WASTEFUL

In September the finance ministry released the first “Report on externally funded projects”, commissioned by the not-so-new secretary to the treasury Ramathan Goobi, to, as the title suggests, assess how we use our loans and grants.

Goobi promises that the report will be released semi-annually and has warned that accounting officers will be liable for the delays to projects they oversee.

First off, one wonders why such a report has taken so long to generate. We have been the beneficiary of donor largesse for the last four decades and we are only getting around to doing this now?

Among other things, a major driver for this report, “There is a problem of poor implementation of the projects,” Goobi says in the Foreword to the report.

“The main concern is around the non-disbursing donor financed projects. The commitment fees are paid upfront yet borrowed funds remained undisbursed for years.”

If you think about it, this is a counterintuitive behaviour. You are a poor man, your friends offer some help in the way of food, but you don’t move to eat it despite the growling in your tummy, allowing it to rot as you watch.

The report, all 370 pages of it, is a litany of criminal project delays, caused by poor planning and avoidable circumstances. As a result the majority of projects – seven out of ten surveyed are behind schedule, leading to expenditure overruns of more than 1000 percent in some instances...

So not only are we not collecting on monies due to us, but when we get the money, we squander it in a way that is mind boggling, and could only be ignored in government where there is an inexhaustible pool of tax payers money to waste.

It is at times like this, in this country that you don’t know whether to laugh or cry.

To illustrate with a few choice projects.

The Karuma  Hydropower project run 60 months or five years behind schedule. The government overspent sh30b due to the delays, a highly understated number, because loan commitment fees and insurance fees were not quantified and when these are made good, should drive the project cost even higher than the planned $1.7b.

The Kampala-Jinja expressway, which was supposed to be a ten year project to begin in 2014 has not begun yet, never mind that a lot of the planned $1.4b project cost is already earmarked. The African Development Bank signed off on $230m loan in March 2021.

And then you have to cry when you learn that €15.6m (sh62b) loan to develop the beef industry has gone begging. The project is way behind schedule --- it was supposed to start in 2018 and end in 2022,  partly because of the lack of a feasibility study, which makes you think these guys must be magicians to get money without a feasibility study. You try it.

But in this project, like many others, delays meant a depreciation of the shilling led to a substantial loss – sh3b, which meant the project had to be adjusted with a reduction in planned targets.

There are numerous other tear jerkers, its 370 page report after all, which goes a long way to explain why we are now back in the high indebted poor countries fold and clearly with little value to show for the debt burden we are shouldering.

The survey only sampled 82 projects, but we all know they are probably hundreds of projects over the last 40 years. Imagine if they had all been brought in on time and on budget, where this country would be?

The haters of liberal economics want government to take back the commanding heights of the economy so that Ugandans can benefit more. It is hard to see how that can be, given the government’s record on projects now...

Are they labouring under the asinine impression that with access to more money we will do better?

It’s a rudimentary tenant of money management, that money does not make you a bad person, it just amplifies who you are.

I would hazard to say that if the liberalized economy is not spreading the benefits of its wealth creation around, we should look to government for answers not the private sector.

The private sector is doing what it is supposed to do which is create wealth,  the failing is on government’s side, because it is not doing what it is supposed to do, which is distribute the benefits of this wealth creation efficiently and effectively.

I also worry for Mr Goobi. This scandalous wastage has been going on for ages – I am not sure he was in school yet by the time it started, the interest groups that have coalesced around this waste – it is not happening by mistake, are powerful, determined and ruthless. They will not let their bread slip away without a fight.

But then I am sure he has learnt that by now.

THE USE CONTINUES TO BE UGANDA’S BEST KEPT SECRET

A report last week by brokerage firm, Crested Capital on the Uganda Securities Exchange (USE) showed 2024 is proving to be the exchange’s best year in almost a decade with index rising 33 percent, suggesting a recovery in the general economy from the covid pandemic and concerns about the war in Ukraine.

"Its best local movers since the beginning of the year, have registered total returns – dividends and price appreciation, of between 15 and 73 percent...

If you had bought a share of Quality Chemicals at the beginning of the year, January 2 at sh52.50 not only would you have earned 10.36 percent or sh5.7 but also seen the share price appreciate to sh55.

On the other side of the scale if you had bought Stanbic bank shares at the beginning of the year at sh32.03 you would have earned sh8.2 per share or about 25 percent and benefitted from a share rise to sh52 or a 62 percent increase in value by the end of October.

Of course some shares had a torrid time, with Uganda Clays which suffered a share price loss of 30 percent, being the worst performer.

The bad performers notwithstanding, investing on the USE is proving a lucrative opportunity for those involved.

This column has sung over the years, that that there are only two ways to spend your money, you either consume it or you invest it. Oftentimes people complain that they have too little money to invest, investing in their heads is about committing millions and even billions to an endeavour with the hope of future returns.

"The beauty of the USE is that with as little as sh10,000 you can buy shares and start your investing journey...

This is important because whether you invest or not, time passes and your financial health will suffer for not having invested when you could. They say the best time to invest is 20 years ago but the next best time is today.

What many of us don’t know or never learn, is that building wealth is about accumulation, it’s not how much you earn, but how much you keep of what you earn that makes you wealthy. Obvious to a few, but to the majority this simple fact totally passes over their heads.

The proof of this is that about 10 percent of the population own 76 percent of the wealth globally according to the World Economic Forum (WEF). This is not by mistake.

The wealthy have over time shifted their spending towards investment, away from consumption and that is why they own almost everything. The rest of us mere mortals are content to enjoy the adrenalin rush that comes with spending money, especially if people around us can see us doing it. And then to further salve our egos we convince ourselves that the wealthy are sad with all their money and will not even finish it anyway, by the time they die. This thinking, prevalent among the broke 90 percent, would be funny if it wasn’t sad.

We need to shift our mindset towards wealth creation and away from consumption. Because before anything happens, first a thought.

The difference between the wealthy and the rest of us, is down to a difference in the way they think about money. Of course it is nice to think they are lucky and you are not, but that is not it.

You don’t have to look very far to see this. If you were given sh100,000 now, out of the blue, what would be your first thought? For 90 percent of us, we would think about how we are going to buy food or new shoes or clothing, basically eat the money. For the remaining 10 percent they would be wondering how to deploy this money to give themselves the chance of returns sometime in the future.

The problem for most of us is that wealth creation is boring. You cannot show it off on Instagram or snapchat. The results – a better standard of living, is what is attractive, but it takes too long to show this off, so why not fake till we make it? The problem is, if you continue faking it, your chances of making it are minimized.

Since the beginning of the year the USE saw trading in shares of about sh61b or about sh1.5b a week. Bank of Uganda reported that in the 12 months to June this year, mobile money transactions of over sh200trillion were recorded on all platforms.

Using a rough comparison, essentially that the USE turnover was only 0.03 percent of all mobile money transactions. By extension this suggests that the beneficiaries of the USE current rally or wealth creation are less than three hundredths of a percent of the population.

If I did not know better even I would think the USE’s beneficiaries are lucky.

LESSONS FROM SHEILA GASHUMBA

Last week it was reported that Kampala socialite, Sheila Gashumba had thrown a private party to celebrate the acquisition of her Range Rover.

While the doyenne of Kampala’s socialites, Bad Black claimed the 2022 car cost sh700m, a cursory look over the internet suggests that sh300m is more a realistic figure.

As expected such ostentatious displays of wealth by someone so young – Sheila is not yet 30, had tongues wagging, with the haters leading the pack.

We shall take her father, Frank Gashumba’s word for it, the she has worked hard to buy herself such a car, but this column would like to glean a few lessons from this recent episode of “Our City, Kampala”.

First of all, you have to give it to her, that Sheila’s working endeavors pay her enough that she can buy such a car.

We would however caution other young girls against following in Sheila’s footsteps.

A wealthier man once said “Money is not for eating but for making more money”. In a roundabout way he was talking about opportunity cost. For every use of money, you have foregone another. There are only two ways to spend money, you either eat it or keep it.

If you eat it, there will be some transient pleasure that will soon be forgotten, but if you keep it, invest it, you can build wealth, where your money works for you and you will one day not need to work. This is important for Sheila whose chosen profession – Club Hostess, has a short lifespan.

Like a professional sports person, she has five to ten years to maximize her income, investing most of it for the long life ahead when she will no longer be the flavor of the month. Because as they say, the beautiful ones are not yet born.

Former undisputed boxing heavy weight champion, Mike Tyson once was paid $20m for a fight in the 1990s, but was recently tittering on the edge of bankruptcy. It’s not difficult to see why. During his career, while he made millions, he blew away millions in high living, as if his income would last into perpetuity.

Subsequent champions from Floyd Mayweather to Anthony Joshua, have learnt from his downfall, investing their monies in real estate and business, ensuring that they families may never need, for generations to come.

While it takes years of pain, blood and sweat to become a champion and earn those millions, it is even harder to keep them and grow them.

Just for illustration, Sheila’s Range Rover is depreciating by the day, losing value. Chances are she will have to sell it for less than she bought it. In addition she has added fuel and maintenance bills that will at best swallow more and more of her hard earned cash or force her to work harder to sustain the beast. While she is the toast of the town, she has actually dug a deeper hole for herself.

But imagine she had taken those hundreds of millions – let us work with sh300m and fixed it at her bank for say 10 percent a year, it would earn her sh30m annually or sh2.5m a month, which we dare say would cover her rent in a suitably upmarket apartment.

Or she could have gone and bought a treasury bond that would give her double digit interest of between 12 to 19 percent or sh36m to sh57m a year for up to 20 years to come.

Or if she had bought Stanbic shares at sh50 each before 21 October, she would now own six million shares in Uganda’s leading bank and on 22 November would receive about sh14m as her dividend from the bank – just in time for Christmas. And did we mention that Stanbic has got into the habit of paying dividends twice a year?

Or if she went out and bought a three bedroom apartment in any of our suburbs, she would have saved herself the hustle of dealing with landlords, owned a piece of fast appreciating property for as long as it served her purpose.

We can go on and on and on. The point is, that its not what we earn that makes us wealthy but how much we keep of what we earn.

Most normal working people’s earning power peaks in their 40s and 50s, for Gashumba that would be sooner and hence the need for her to be more aggressive in keeping more of what she earns than consuming it.  

But consumption is fun, it is good for the ego, so no wonder when we get money the first thing we think about is how to eat it.

But here is another fact, according to the World Economic Forum (WEF) 10 percent of the world’s population own 76 percent of the world’s wealth. I think in Uganda that figure maybe a bit more skewed, like 10 percent own 90 percent of the country’s wealth.

The genuinely wealth have become so by accumulation not by consumption.  

So the lesson from Gashumba really is, how not to spend your money, if you want to be financial free in your lifetime (of course when you are dead you are financially free).

She is still young and probably hitting her peak earning years in the next few years, she can still improve her financial position for the long term.

But I really would not count on it, if only because it is easier to eat your money now, than build assets that will guarantee you and children income well into the future.

 

BUILDING POSTBANK FROM THE GROUND UP

Numbers like hips, do not lie.

Post Bank, hived off from the Uganda Posts & Telecommunications Corporation (UPTC) has struggled to shake off its dusty, sleepy reputation.  But in the last five years, the company seems to have caught a second wind and if its CEO Julius Kakeeto has anything to do with it, will be challenging for industry leadership in a decade.

In the last five years that Kakeeto has been at the helm, the Bank has seen revenues nearly double to sh207.6b last year compared to sh110.6b in 2019; profits have outperformed this, more than trebling to sh27.5b from sh8.4b in the same period suggesting the achievement of greater efficiencies. The cost to income ration plummeting to 65 percent in 2023 from 85 percent five years ago. The industry average in 2023 was 73.5 percent last year.

Subsequently  the general health of the bank has dramatically improved with the asset base more than doubling to sh1.11trillion from sh490.6b in 2019.

So what accounts for this turn around, which is nothing to thumb our noses at. 

Clearly it was not a case of economic momentum because the stage was set for takeoff during the covid lockdown, a time of historical economic constriction...

A major cultural shift was required.

“When we started talking about performance, most of my colleagues were in shock. They were just not used to being held accountable, being held to deliver results,” said Kakeeto.

“I kept on reminding everyone here that, yes, we maybe government owned, but we are competing with private sector owned institutions. The entire industry is private sector led. So they are competitive. They are very aggressive. And for us, we cannot sit back and we think we shall survive operating in that kind of environment.”

 Kakeeto, who had previously worked with CitiBank, Equity bank and Orient Bank knew what he was talking about.

 A reorientation of the workforce’s mentality had to go hand in hand with other more tangible changes.

 “We had a lot of obsolete technology in the organization,” he remembered, shuddering at the memory.

 “We had long queues. People would line up on the street in many of our branches. … Your ATM card would take six months to receive, once you open an account. So you would have an account, but you could not even access your money. If you have a lunch hour from work to go to the bank, there is a long queue up to the streets, you couldn’t get your money in time. You have to go back. But then the other platforms were not working. You can't access it on the phone, you can't access it in the banking hall.”

 Their 20th century technology was further exposed during the Covid lockdown. Bank operations remained manual with no capacity for the staff to work online and their clients suffering consequently.

 Kakeeto’s career at PostBank was almost done before it begun, as the lock down happened five months into his tenure.

 

"They turned lemons into lemonade however, using the lock down to upgrade their systems with the results beginning to show in 2021 onwards. Currently 80 percent of their transactions are off their online platforms with over the counter transactions accounting for the rest. The clear opposite from five years ago...

 

Interestingly the huge investments in revamping their systems they were able to achieve under their own steam.

 The kneejerk reaction for many government companies is to look to government for funding.

 “We shifted the conversation to let's stabilize it. Let us make it perform. Let's reorganize, restructure it. Let's convince the regulator that we're in shape for a commercial banking license after that you can grow and scale . If more funds become available, well and good. They come as a bonus, but they should not be the primary driver of our journey. So yes, we've we've achieved that,” he said.

 The quiet of the Covid lockdown also allowed Kakeeto and his team to think harder about strategy and how they were going to win market share.

 “At the time our discussion was always around, how can we sustainably drive financial inclusion and not just look at opening branches. Opening branches is not a solution, because how many branches are you going to open? Opening a branch is very expensive.… that same investment can reach out to more people if you find a better solution,” he explained.

 “That's how we came up with the with the wallet, Wendi. And the whole idea was, with the wallet, you can bank everyone, not just your customers.”

 

"This along with other digital initiatives means they are firmly on the way to doubling their client numbers from 700,000 at the beginning of the Bank’s restructuring. It helps too that you can now open a post bank account in under ten minutes and have your ATM card, compared to waiting six months for your ATM card previously, for which Kakeeto is justifiably proud.

 

Their new strategic objective “Fostering Prosperity for Ugandans” is hinged on increasing financial inclusion on one hand and relatedly, supporting entrepreneurship and services.

 This has taken them into rethinking how they support rural Uganda, where they have learnt to support whole ecosystems rather than cherry picking the more lucrative parts of the agriculture value chain.

 “The moment you say, I'm going to foster prosperity, you cannot do it partially. I cannot for example, you process beans to sell to World Food Program (WFP). And I come and I tell you, I finance your contract for buying beans and processing them. And you have 100 workers. Your workers need salary loans. And I said, No, those ones I don’t want, I only want you. It doesn't work like that;” he explained.

 Driven by their new strategic imperative, Kakeeto is not ashamed to raise the bar of his ambition for the bank.

While aware that the dramatic success of the last years were coming off a relatively low base,  Kakeeto is confident for the future of the bank.

  “I remember at the beginning of my time I mentioned that we were going to become a tier one bank.  

We are now. I kept talking about, we want to become a top half bank, like top 12 and we are there. So I won't be shy to talk about being a top six bank in four years.” Kakeeto said.

 

WELL DONE ON KARUMA BUT …

Last month the 600 MW Karuma dam was commissioned by President Yoweri Museveni too much fanfare.

"The dam which increases the country’s installed capacity to about 2000MW, is a marvel of engineering design and should set us up as a major player in alleviating the power deficiencies in our part of the world...

But the story of the dam’s development should serve as a cautionary tale and also a lesson to prevent such disasters recurring in the future.

The dam whose construction begun in 2013 was supposed to be commissioned in 2018, so it is six years behind schedule. Such delays have real money consequences, for example, that we started repaying the loan before we had evacuated a single Megawatt, because its five year grace period had expired. The delays alone suggest that the dam’s promise of cheap power may actually be a mirage. Time will tell.

The delay had its origins in the energy ministry, which so botched up the contracting of the construction of the dam and that of Isimba, further upstream, that sympathies are in order for Uganda Electricity Generation Company Ltd (UEGCL) who have been charged with running the two installations.

Those in charge of contracting for the billion dollar project flouted procurement procedures, ignored judicial, parliamentary and cabinet oversight and it took the president to exercise some Solomonesque justice to award the contact for the building of Karuma to SinoHydro and that of Isimbe dam to CWE. If the ministry officials had had it their way the award would have gone the other way.

Out of that chaotic process have resulted in cost overruns, shoddy work and a multitude of issues that UEGCL will take years – hopefully not generations, to unfurl.

As a reminder, the people of Uganda are poor, but Uganda is not poor...

Beyond our benign climate, arable soils and bequtifuul scenary, about a decade ago an aerial survey of our mineral wealth showed that if we wer to fully exploit the minerals under our feet, we would have to move all Ugandans out of the country first. We are that rich.

The reason the people of Uganda however continue to wallow in poverty, is because of our inability to exploit this our natural endowment for our benefit.

The development of Karuma dam is a case in point.

The site’s potential of 600MW or more, has been seating there for eons unexploited. And when we decided to do something about it, public officials charged with overseeing these assets, in trust for all Ugandans, put their personal enrichment first and the people of Uganda be damned. In more serious countries these people would be strung from trees rather than awarded medals.

But the drama is not over yet.

Uganda’s peak time demand is about 800 MW, which means at the best of times 1200MW of capacity goes begging. Painfully we pay for that power whether we use it or not.

Even in Karuma and Isimbe, where we do not have onerous power purchase agreements, the creditors get paid whether you use the power or not.

"The challenge with the electricity sector, like other sectors in Uganda is that we all work in our individual silos, with no seeming regard to ecosystem around us...

One of the delays to the dam completion, apart from all the remedial work that had to be done because no sooner had the dam been built than huge fissures started showing up all over the dam, was that we had not completed the transmission lines to evacuate the power.

One would imagine that if we are to build a dam, we need to start planning simultaneously for how that power should be evacuated. One would imagine that Uganda Electricity Transmission Company Ltd (UETCL), whose job it is to evacuate the power, would be put on formal notice, with funding and timelines, beyond them reading about it in the press. It did not happen.

So UETCL only just finished the transmission lines last year, five years after the original date of commissioning of the dam.

We would be forgiven if the government was run by some bumbling fools from an earlier era. We would shake our heads, click our tongues and understand. But that is far from the truth.

In a country where less than half the households have access to the national grid, this kind of mismanagement is criminal. While it is difficult to see the cost to the people who have not had power in generations, we can see by the transformation in the lives of those who have access, to get a sense of what the rest are missing.

"The net effect is that Karuma like Kiira, is in danger of being a white elephant, too big to be swept under the carpet, but an example of how not to develop a project never the less...

The management at the energy ministry, UEGCL and UETCL are relatively new, as they all came in when the Karuma project had been set in motion, so they maybe exonerated from the mess. But as Ugandans we expect better from them and value for money for all these beautiful dams that do not generate power.

BIG COMPANIES, BE KINDER TO SMALL COMPANIES

My friend Jack is at his wits end for what to do for his business. While the rest of us entered the job market, Jack opted to go off on his own, starting a market research company at its core, he branched off into deliveries and event management. He has done everything in between.

He has made a better than average living for himself over the years.

But lately he is beginning to feel the walls closing in on him and long term survival seems to be fading away.

While URA the bane of every small businessman, have something to do with it, it’s more to do with the payment cycle of his big clients.

For many of his clients he does the work and then invoices for the job after it is done. The problem is that the big companies pay for work done up to 120 days after invoicing. So his life is an unenviable cycle of looking for financing to do the job, then chasing payments from the big companies (it is not paid automatically during the stipulated time) and then ducking and dodging from URA, money lenders and any number of debtors...

After all is said and done, and yes there is the company official who wants his cut to get the job and the one whose palm you have to grease to ensure payment, he barely breaks even.

For the amount of stress and worry he juggles it is a wonder he has not greyed yet.

Government’s cash squeeze is causing a general slowdown in economic activity especially in the retail sector.

Not only is government cutting back on spending they owe the private sector over sh4trillion shillings, with some suppliers going unpaid for up to three years...

Government being the biggest consumer of goods and services, when it sneezes we all catch cold.

 But my friend Jack argues that that should not affect him. Many of his clients already have the cash; the telcos have most of their services prepaid for. The breweries? Try getting beers on credit at the depo. The banks are not only seating on stacks of money deposited with them but charge fees to keep  that money, so cash is not their problem.

I suspected that these 45-day plus delays of payment are a throwback to a time when company accountants used to pore over oversized legers, reconciling accounts from far flung reaches of the company and therefore need time to reconcile and then pay suppliers. It seems to me then, that with improved technologies, where reconciliations are done in real time, these time savings should have done away with these long waiting times suppliers are suffering.

But industry players say that is not true. Companies are managing their own cash flows to the detriment of the small man selfishly, plain and simple. A company holding on to monies for even a day can see them earn a point or two by placing those monies in a bank or conversely would mean they do not have to draw down their overdraft with the bank and incur additional financial costs.

And URA? The law is that you should pay your VAT on any invoice issued by the middle of the next month. So small businessmen are having to dig into their pockets or worse, borrow money to meet their tax obligations, invariably looping them into a vicious cycle of debt and tax default leading to tax evasion.

It is true that all over the world it’s the small businessman who is the biggest employer. But you have to fear for the fate of the worker in the small business if the big businesses, not to mention government, is treating small businesses like unwanted orphans.

In corporate Uganda and the world over the buzzword is

ESG (environmental, social and governance). At its core is the realization by businesses that profit is not everything and that they have a wider responsibility beyond their shareholders, to ensure that more stakeholders benefit from their good fortune...

It common sense that of you are affluent in a see of poverty in the short term your progress will hit a ceiling and in the long term the  impoverished will eat you – literally and figuratively. So it make sense to ensure in your pursuit of profit everybody around you ´get a fair shake.

So, featured prominently in your glossy sustainability reports can you, big companies, spare space for the improved treatment of the small businessman, preferably ahead of the new boreholes you have installed in some obscure village or the new lick of paint at XYZ primary school. Thank you.