BEST OF THE BEST FARMERS AND THE RIPPLE EFFECT ON UGANDA

A week or so the New Vision celebrated the best of the best farmers from 2014 to 2018 Best Farmer competitions.

 Since 2014 New Vision has been profiling farmers who qualify to compete to determine who is the best.  The winners in addition to getting help to improve their farms, are flown to the Netherlands to learn from farmers. Another major sponsor of the event is dfcu bank.

"A better country than the Netherlands to use as an example, it would be hard to find. The Netherlands is second only to the US in terms of agricultural exports, in 2019 recording

€94.5b (sh366trillion), it accounts for a third of world chill, lettuce and cucumber trade and a fifteenth of apple production. Uganda’s agricultural exports in 2021 came in at about $5b(sh18.3trillion).

They produce four million cows, 13 million pigs and 104 million chicken annually. And as if that is not enough they have 24,000 acres or an area half the size of Kampala, under greenhouses.

This made all the more amazing when you realise that the Netherlands occupies about 42,000 km², a sixth of the area of Uganda.

Interestingly they have managed this high agricultural productivity while reducing water usage by 90 percent and ferterliser use just as dramatically over the years.

Just by looking at the numbers one can tell that the Dutch farmer has attained a level of efficiency and productivity, we can only dream of in Uganda, with our better weather, more arable land and double annual seasons.

One local ranch owner with a herd in the hundreds and lands stretching over a few square miles, on return from Netherlands years ago, concluded that we were joking in Uganda. He was put to shame by a farmer he visited who with a fraction of his herd and situated on barely 10 acres of land was producing more milk than he, many times over, with only he and his son as the permanent workers on the farm.

So, one of the tests of the best of the best farmers is whether they had improved their farming practice after their return from the Netherlands.

All the best farmers have returned from the Netherlands with the expanded outlook, improved their farming methods and increased their productivity.

Since 2014 the Dutch embassy and KLM Royal Dutch Airlines have sponsored the travel of 58 farmers, a motley crew that represent every region of the country. The best farmers have not only improved their farms but have proved useful resource for their communities. Many of them set up training institutions to transmit their knowledge...

It is not a stretch of imagination to think that if each of the farmers influenced 100 other that is 5800 farmers and if each of these influenced another ten and then … you get the drift.

There is a difference between politicians urging us to turn to agriculture or extension workers directing us what to do, but when we see one of our own working under in our context working and succeeding it is a higher level of learning.

And if the New Vision can keep facilitating the travel of our best farmers to the Netherlands the rural landscape can very well be transformed in our lifetime.

"While industrialization is what we aspire to, most countries transformed by first ensuring that they produced food surpluses. This did two things it ensured food security, which meant they reduced on their use of vital foreign exchange to import food and secondly, the surpluses beyond exporting them formed the basis of their agro-industries.... 

One of the things they learnt in the Netherlands is how to add value to their products and many of the best farmers now have cottage industries, processing their produce for use in their communities. Will be surprised when these same farmers become the backbone of our future agro-industrial base?

But the highlight of the event for me is when I sat with Flora Kakande of Pumpkin King. Her company grows and process pumpkin into a variety of products, but in addition is working to help farmers grow pumpkin, including refugees in western Uganda. Everything of the pumpkin is usable and have huge health benefits.

After hearing their story I wondered aloud why people like them do not make noise about what they do as the idlers who make more noise in begging ‘Gavumenti Etuyambe”

“But we are working when do we find time to make noise,” was her quick rejoinder.

FACING THE CHALLENGE OF POVERTY ERADICATION: AN EU AND UGANDA STORY

What is poverty? What does it look like? What would it take to pull out of it, for the individual or eradicate it for whole communities?

At a very basic level the poor man cannot sustain himself. He cannot take care of the basics – food, shelter, clothing to a satisfactory degree. From a purely material standpoint the poor person has little or no income to speak of.

Going by that, getting an income has to be the first thing to look into.

A poor society is characterized by much the same, the only difference being it is scaled up to cover many individuals, many families, many communities. For communities you would still have to raise individual incomes but in addition ease access to market.

The 11th European Development Fund (EDF), which run from 2014 to 2021 sought to address this question among some selected communities around Uganda.  The €578m (sh2.2trillion) fund has bankrolled 120 projects and focused on transport, food security and agriculture.

While handouts can give the temporary and artificial effect of improved income, to increase income sustainably, one has to increase their value to the society. You do that by adding to your knowledge and experience. In the video above the turnaround in Laurence Kayeswa’s life from petty criminal to in-demand tailor is an apt illustration.

He learnt how to be a tailor, a skill clearly valued in and around he slums of Bwaise going by the success he has had in building a steady, reliable income, that he uses to support himself and family.

It may be of added advantage to teach him some business skills, that would help scale up his enterprise, serve more people and earn him more money. But for now, he is out of poverty and as a minimum target this was achieved.

The farmers of Mount Elgon Coffee and Honey Cooperative were an interesting example of how communities can be transformed. Already coffee farmers by the time an EU affiliated project the Market Access Upgrade Porgram (MARKUP), knocked on their door, its probable that they were only just making ends meet.

Under the program the coffee farmers were not only helped improve their farms, through improved coffee husbandry methods but were also encouraged to keep bees to improve their coffee farms and as anew revenue stream.

But beyond that, the project organized them into a cooperative that allows them to negotiate better terms from suppliers, bulk their produce and even add value. Value addition should mean the farmer would get a greater proportion of the shelf price for his crop.

User-owned cooperatives, if managed properly are an effective means of ensuring producers get a fair shake from the market. Many times our poverty is a function of our inability to aggregate our resources, be it land, labour or capital.

Similar benefits were seen among the cocoa farmers in Bundibugyo where MARKUP is present.

It is still early days to assess the long-term impact of these initiatives on their respective communities -- there are still thieves coming out of Bwaise and poverty continues to ravage the slopes of Mount Egon and Bundibugyo, but the basic principles are sound.

The EDF has done another important thing for these communities, creating examples from which the communities can learn. By designing the individuals and farmer organisations to stand alone, it is likely that the projects cannot only be self-sustaining but can be self-perpetuating in the surrounding societies.

It will be interesting to return to these individuals ten-, 20-years from now and see what has become of them. We may be pleasantly surprised.

EU ALLEVIATING POVERTY THROUGH SKILLING

Laurence Kayeswa has turned his life around from a common thief to a productive member of his society.

“When I used to grab people’s phones, I was always under tension. I was truly living by God’s grace,” Kayeswa, a resident of Bwaise, a Kampala suburb said recently. Income was unsteady, life was cheap -- it was not unusual for thieves to be killed by angry mobs for stealing less than a phone and understandably he had a phobia of the police.

“Because of my trade I could not face the police because you never knew whether they were coming for you or not.”

Thanks to an EU funded project run by Action for Fundamental Change and Development (AFFCAD) Kayeswa has been able to turn his life around. AFFCAD is a youth focused nonprofit organization seeking to transform the living conditions in Kampala’s poorest slum by empowering the youth and women using education, health and economic programs.

In search of a more sustainable livelihood Kayeswa enrolled with AFFCAD for a six-month course in tailoring. On completion he bought himself a sewing machine to which AFFCAD added another.

Kayeswa now runs a small team that sews everything from clothes to bags and his work has found a market.

“People are shocked that I can make these things and are eager to buy them. I now not only support myself and my family I now no longer get scared when I see a policeman coming down the road.”

AFFCAD has linked up with the government’s directorate of industrial training and these courses are now certified.

“As it is about 65 percent of graduates start small businesses and become more useful members of their societies,” said co-founder and social enterprise director Jaffar Tarzan Nyombi.

While charity is welcome in marginalized communities for it to have maximum impact it has to be targeted properly.

“Our experience is that it is essential to leverage private sector investment, in that way create more jobs and more growth,” said Caroline Adriaensen, head of the cooperation of Eu delegation in Uganda.

Such progams are part of the 11^th European Development Fund (EDF) to Uganda that run from 2014 to 2021. The fund which saw €578m (sh2.2trillion) disbursed during the period has supported 120 projects around Uganda in the areas of transport, governance, food security and agriculture.

Interventions like the above where people are taught how to fish rather than giving them the fish, have enduring transformations not only on the individuals but on whole communities.

Sometimes lifting people out of poverty is more an issue of showing them improved ways of doing what they already do than introducing them to a new income.

Through the Market Access Upgrade Program (MARKUP) EU support has been instrumental in helping small holder farmers around the country improve their production methods, access markets and improve their incomes in the process.

Julius Mkaboona inherited his cocoa farm from his father. The Bundibugyo area, bordering the Democratic Republic of Congo (DRC), has been known for producing cocoa but farmers stopped seeing the benefit of the crop leaving their fields to the elements or cutting down the trees altogether.

“But thanks to the training of MARKUP we have improved our production methods, our post-harvest handling, improving the quality of our produce and as a result get better prices for our produce,” said Mkaboona, standing in his lush green garden outside Bundibugyo town.

Across the country in eastern Uganda on the slopes of Mount Elgon MARKUP has helped farmers there increase production, improve the quality of their crop, do some value addition and brand their output.

‘We have moved from simply producing coffee to value addition and producing a high-quality coffee that some are shocked can come from Uganda,” said Noah Welihe, operation manager at Mt Elgon Coffee & Honey Cooperative.

The cooperative has a membership of 700 small holder farmers that not only produce the aromatic Arabica coffee but also honey for export.

These are but a few stories of the EU’s interventions around Uganda in helping families raise incomes and improve their livelihoods.

The formula of going to these communities and assessing what the best interventions are possible using the existing infrastructure is a winning one whose benefits are sustainable and replicable anywhere in the country.

 

 

OF ENTEBBE AIRPORT, THE EU AND CHINA

Last week two news events far apart but very related caught my eye.

At home, there was an uproar about reports that China had taken over Entebbe International Airport, because we had defaulted on loans to expand the facility.

The story, which went global faster than it takes to say Shokolobangoshe, was dismissed by government who argued that the grace period on the facility only comes due next year and so it was technically impossible to default on a loan you haven’t started paying for.

My attitude to the whole hoolahbalooh is we needed money to expand the airport, which we did not have, we went out begging to the usual suspects and they turned us away, China offered and set their terms, otherwise we would not have got the money. That being said we are obliged to repay the loan – if only because it is good manners, rather than resort to cosmetic nationalism to get out of our obligations. But that is just me...

Later in the week the European Union announced a €300b (sh1,242trillion) plan to invest up to 2027, in the development of infrastructure abroad. All the commentators said that this was in response to China’s Belt and Road Initiative (BRI), a plan of more than 13,000 infrastructure projects across 165 countries to connect china to the rest of the world.

China’s intent announced in 2013 was clear, to gain access to the natural resources it so badly needs to fuel its own growth, gain some international influence as well and improve our connectedness.

So the analysts saying the EU are playing catch up suggest EU is seeing its influence, drawn from the colonial times, is fading or being eaten away by China looking to bankroll infrastructure in Africa, Asia, Latin America and Eastern Europe.

It’s an interesting twist of fate.

When Europe was colonizing everything that moved in the last century, extracting the resources that now underwrite their wealth, China was in isolation, its stature as the leading global power that it enjoyed in the middle ages long forgotten.

Colonial Europe built a lot of infrastructure around Africa, we have them to thank for the Uganda railways for instance, which infrastructure run unashamedly from high resource centers to the coast and on to the factories of Europe or the plantations of the West Indies and the US....

When they were building this infrastructure there were no conditions of democracy or human rights to set this up, these colonies after all were appendages of their home countries and democracy and human rights were only for them at home. The same standard was not upheld for the inhabitants of the  colonies.

China has serious considerations at home. It needs to grow its economy to improve the living conditions of its billion-plus people, to put off till the future this urgent would have serious repercussions to national stability there.

The infrastructure they are helping lay down across the world is not free, and the western media have warned against recipient countries falling into debt traps and have gleefully highlighted instances where the China’s lenders have had to come in to exact their pound of flesh.

Hence the disproportionate play on the half story about Entebbe airport received around the world last week.

China are not doing what they are doing for charity but out of self-interest, which often dovetails with our own interests. The massive infrastructure outlays we require to lift our people out of poverty is only denied by people who may not want the best for us.

Development history shows you cannot develop without transport an energy infrastructure of course this has to be underpinned by an educated and healthy population.

Many years ago I will never forget, then finance minister Saida Bbumba running around to get commitments from regional leaders, that they would take any excess power that Uganda would fail to consume from the 250 MW Bujagali Dam. This was a condition for the funding required to build the dam.

At the time we were suffering day long loadshedding, the Nalubale dam was creaking under the weight of our growing demand and yet we were barely 200,000 clients or less than one in 20 homes connected to the grid.

Somehow they thought we did not need more power and the Bujagali dam would only be viable if Kenya, Tanzania and Rwanda would promise to take the excess power! You had to wonder why someone would think that Ugandans do not need power. That there was no effective demand. Umeme’s financials over the last 16 years would beg to differ.

"Concerns about the opacity of some the Chinese dealings cannot be dismissed and given our public officials corrupt tendencies, it is right to scrutinize all and every deal we get into with China. But we should be careful not to throw out the baby with the bathwater...

And before I forget China is going to spend at least four times or €1.2trillion in their own BRI up to 2027.

 

OF UGANDA BANK FEES AND EU RESOLUTIONS

Last week in leaked correspondence between the finance ministry and the central bank, the former proposed imposing a duty on cash withdrawals from banks.

The revelation triggered off a firestorm online from the chattering masses, who complained that this constituted double taxation of their incomes and threatened to empty their bank accounts in protest, talk about cutting off the nose to spite the face.

Relatedly, or maybe not, The European Union (EU) parliament passed some recommendations on Uganda in relation to the just concluded elections, the EU’s continued engagement with Uganda and human rights abuses.

Depending on who you are the EU’s recommendations were met with glee or outright disdain.

But back to the bank withdrawal fees.

In 2018 when the government announced the 0.5 percent levy on mobile money withdrawals there was a barely a squeak from the banking sector.

By that point the mobile money platforms had done in about eight years what the banks had failed to do in a hundred years, which was allow access to credit to the lowest of the low in society.

By the time the withdrawal tax was slapped on mobile money, 

mobile money accounts stood at about five million but have since jumped to about 30 million today...

The total number of bank accounts today is about four million.

On mobile money platforms the masses found a way to access financial services, even if in the beginning it was just to transfer money. Today people save, borrow, transact and insure themselves off their phones. And one can expect that the pervasiveness in the community will only increase.

Going by the success they have had with taxing mobile money withdrawals it was always a matter of time before they swung around to banks. 

Classic divide and rule tactics. Especially since with the introduction of the mobile money tax in 2018, while transactions have been growing annually, the average value of the transactions is decidedly lower than when the tax was introduced. Where did the high value transactions go? Maybe to the banks? 

The banking industry has complained that levying the tax would affect their business and lead to a fall in deposits.

Unfortunately the test case of  mobile money does not suggest this. The value of mobile money transactions has since grown to  sh80trillion last year --- twice the national budget  or 70 percent of GDP. As if that is not enough mobile money accounts have jumped to 30.5 million.

So what is good for the goose should be good for the gander.

That being said the banking industry has proposed in reaction a scraping of the tax on withdrawl amounts and instead maintaining the 15 percent excise duty on the transactions charges, on both bank and mobile money withdrawals. 

This is unlikely to raise as much revenue as government would have with the initial proposal in the near term. And it is hard to see how government would forgo the billions it has been racking in from mobile money.

It is only fair that whatever applies to banks should apply to mobile money transactions.

Some people would argue though that with mobile money’s penetration, providing access to financial services to a wider population, they should be given preferential treatment. That maybe a discussion for another day.

Back to the EU recommendations, they can seat in Brussels and send edicts to far off Africa, like Zeus hurling lightening bolts from atop Olympus because they donate and lend us a lot of money annually. And why not? They are within their rights to insist that governments that they help behave,  display acceptable behaviour – after all they have to sell and seek permission for these donations from their tax payers.

It therefore follows that

if we are tired of their lectures we should pull up our socks and pay more taxes...

It is common sense isn’t it? Unfortunately – for us, its easier to convince a European technocrat to release a few million Euros than it is to widen our own tax base!

NOW GIVE US MONEY NOT POSHO

In starts and fits, government has been distributing maize flour and beans to the vulnerable populations of Kampala and Wakiso.

The program that has been in motion since the beginning of April is still ongoing, despite earlier plans to complete in two weeks.

Apart from a few questions of quality, most recipients seem to have been grateful for the handout.

As the government slowly lifts the lock down, it will have to contend with the economic debris left behind.

The lock down, the restriction of movement and congregation, was intended to slow the rate of infection, which for all intents and purposes we have done very well.

At the time of writing this the number of recorded infections was shy of 300, about two months since we recorded our first case. Going by the rate of infection elsewhere we should have crossed the 1000-mark by now.

The lock down’s secondary reason was to allow government improve its capacity to test, track and treat eventual infections that will occur.

 " With the lifting of the lock down infections will rise and time will tell whether government was ready enough...

The lock down also brought economic activity to a near standstill, the net effect of this is that many businesses will shut down and jobs will be lost as we try to come to terms with the after effects of the lock down.

 

We are opening up to world where there is a lot of idle capacity but little demand to take this up.

So the New Vision for instance has seen its sales fall to below 20,000 copies a day, but the machinery and people to produce the paper are still largely in place.

Ideally what should happen is that as soon as people get back on the streets our sales jump back to pre-covid-19 levels immediately. That is unlikely to happen.

This scenario is being replicated across the economy, across all industries (except the telecommunications companies maybe).

During the global financial crisis that happened about a decade ago, western economies grappled with how to handle the situation.

The US sought to bail out its giant companies in industry and finance, the argument being they were too big to fail. That if they did fail, the ripple effect across the economy of lost productivity and job losses would be catastrophic.

Europe did a bit of that but emphasised more shoring up the social security net for its people.

The result,

while the US on paper came out of the slump faster, wealth inequalities widened and the most vulnerable people in that society were badly affected...

Europe was still in recovery mode by the time the Corona crisis came around, but recovery was more spread out among the population.

Given the experience of the western economies, it seems obvious that Uganda will have to thing deeper about social security if it is to come out of this crisis with some hope of future prosperity.

This week the US, through their USAID office here announced it will be handing out cash – sh92,000 a month for three months to a few thousand people around the country.

The money is supposed to help these vulnerable people get back on their feet during these hard times.

From a purely humanitarian standpoint it  is hard to argue against helping the least of our brothers.

However, plans to do this have come against two roadblocks. One, isn’t this a sure way to encourage dependency among our people. And secondly, how long can such programs be sustained.

Thankfully we need not go on guess work. The government has been running a pilot unconditional cash grant to the elderly, SAGE (Social Assistance Grants for Empowerment) for the last decade.

The government gave people over 65 were being given sh25,000 monthly in a program that expanded to 57 districts from less than 20.

A study done by UNICEF showed that these grants had had far reaching benefits not only to the recipients but their respective communities as well.

The benefits  included more employment, improved school enrollment and better feeding.

Its an expensive endevour to carry out all year around, that’s why government has raised the age requirement to 80 to spread the initiative across the country.

Beyond the feel good factor of helping the most vulnerable members of the society there is some hard economic sense for government to be making these handouts, especially now.   

"Most welfare programs in the western economies took off after the second world war. It was a way not only to aid the people but also to jump start industry, what is the point of manufacturing all those bicycles or shoes or plates if there is no one to buy them?....

So by helping the common man back on their feet they were creating a market for industry.  

The spillover into economic growth is quite obvious. There are studies which show such grants have a comparable return on investment as infrastructure.

Thankfully the tools to make direct payments have already been tested and explored under SAGE so delivery shouldn’t be a problem if we committed to the program tomorrow.

So instead of a handful of people benefitting from government relief aid more people will benefit.

You are giving me maize and beans,  thank you very much but I might need soap or charcoal or medicine more urgently now. If you give me money I will make those decisions for myself much more efficiently.

The question though, how is government going to afford it? Given the anaemic state of our coffers now there is no doubt that government would have to borrow to support such a program, but given that these monies will be used to support  local business it would have to be considered a good spending of tax payers money.

COVID19 IS GOING TO CHANGE EVERYTHING

When we come out the other side of the corona virus outbreak, as surely we will, it will have changed the way the global economy operates forever.

As a result of the corona pandemic 245,916 people have been infected, 88,465 have recovered and 10,048 have died.

The outbreak, which was first recorded in Wuhan in China has swept across the global, with Europe surpassing China in deaths due to the virus, last week.

Countries are taking increasingly harsher measure to check the virus in its tracks – restricting movement of people and goods, shutting down whole cities.  As result people are being encouraged to work from home, students too. Telecommunications and online service providers are experiencing an upsurge in the uptake of their services. This pandemic maybe the trigger to tip Africa into using less cash and electronic money, reconfiguring our economies for good.

"After the second world war with Europe burnt to the ground, the US assumed dominance of the world economy because their industrial capacity was largely untouched and only needed to be rejigged to producing for civilian use...

China last week announcing that they had not got no new infections in Wuhan, the early epicenter of the outbreak, suggests they may get back to work just as the western economies are shutting down their economies.

Already the factory of the world, we can expect China will scale up its capacity to produce to meet the world’s post Corona needs. Not China alone because South Korea, Taiwan and Japan are making significant progress in containing or rolling back the pandemic and they too will be ready to roll in a few.

The move towards the fourth industrial revolution in western economies will be sealed with this event. While the trend towards flexible hours was gathering momentum, it will be difficult to reverse the current practice especially as it is cost effective for both employers and employees.

This is interesting because it’s just like after the second world war, when people moved off the farm and into industry. As a result agriculture became mechanized, capital intensive and more productive. It needed to be, to feed the huge urban concentrations that emerged...

This time around as day time populations move away from the commercial business districts to the suburbs, one can expect a reconfiguring of commercial properties away from office to residential space.

Interestingly, Domino’s the giant pizza delivery chain the US is looking to hire an additional 10,000 delivery workers as people are going out less. Will we see in the future, staying in more as all goods and services can be delivered to hem – even interpersonal relationships?

Countries like Uganda, already struggling to get into the industrial revolution will buffeted massively by these new changes and may find themselves falling back rather than making progress in a post-corona world.

The reinstatement of borders is hampering trade, it is likely that the interest groups that will benefit from a return to economic nationalism will resist any attempts to throw borders open again. While this will benefit a powerful minority, while reversing the hopes of the majority of small economic actors for who the free trade across borders has thrown up numerous opportunities.

Keeping borders closed will also make industry nonviable, cementing a reliance on goods importation.

We will also be the poorer from the restrictions on labour movement. We get a lot of experts coming in from all over the world to fill gaps in our systems. Their inability to come here, because they can’t leave home or because we will impose restrictions on their entering the country, which is our right under the circumstances, means necessary technology transfers will not happen or at least not as smoothly as if they were here.

Relatedly the thousands we send out as immigrant workers will very well find nowhere to go. This will be a double loss because we will miss their remittances and they may very well become a nuisance here if they fail to find work.

One too can expect that development aid and foreign direct investment (FDI) flows will collapse in coming weeks, making it impossible for ongoing projects to continue.

This may be the silver lining that comes out of this whole crisis. That starved of foreign funds we are going to have to exercise our minds on how to mobilise local resources. While the economy is going to be depressed for a while and attempts to widen the tax base will not be met with open arms but clenched fists, the urgency of this will be more clear now.

"With enforced travel bans to our favourite foreign hospitals, the urgency of shifting resources into the health care system will become very evident now. The fat cats who fly out on tax payers’ money to have their niggling pains checked out will have to make do with our local health system....

We don’t know the half of what will happen to the economy after the dust settles on the corona virus pandemic. We can be sure things will not be the same again.