SOUTH AFRICA’S XENOPHOBIA IS THE BILL FOR A BROKEN PROMISE

South Africa’s latest xenophobia—they call it Afrophobia now, flare-up appears, at first glance, to be about foreigners.

It is not.

Foreigners are simply the easiest target. They run the spaza shop. They sell on the pavement. They compete in the informal economy. They are visible in communities where unemployment, poverty and frustration have become daily realities.

But the anger is not really about them. It is about a promise made in 1994 that remains largely unfulfilled.

Political freedom arrived. Economic freedom did not.

"When apartheid ended, South Africa faced a historic challenge: how to dismantle centuries of economic exclusion that doomed the black majority to serfdom and give them a genuine chance at climbing the social ladder...

Apartheid had not only denied people the vote. It had denied them land, quality education, capital, networks, decent housing and the ability to accumulate wealth across generations.

The new democratic state therefore needed urgency.

It needed to build schools that worked and boost job creation by expanding infrastructure, support entrepreneurs and ensure that millions who had been deliberately excluded could participate meaningfully in the economy.

Because political freedom without economic progress was always going to create disappointment.

Black Economic Empowerment was part of that response. It was necessary. A country that had excluded black people from ownership and leadership could not simply pretend the past did not exist.

But BEE was never going to solve everything.

A few people entering boardrooms could not compensate for millions of children receiving poor education. A handful of black billionaires could not transform communities where unemployment remained high, electricity unreliable and small businesses struggled to survive.

The problem was not that some black South Africans became wealthy. Every functioning economy creates winners. The problem was that too many people saw no realistic path to becoming one of them.

That is where resentment grows. Inequality becomes dangerous when people believe the ladder has been removed...

And South Africa is not merely unequal. It is almost in a category of its own.

The World Bank has ranked it as the most unequal country in the world, while the World Inequality Database shows that the richest 10 percent take roughly two-thirds of national income, leaving the bottom half with only a tiny share. In Sweden, by contrast, the bottom half takes about a quarter of national income.

That comparison matters.

It shows that South Africa’s problem is not just poverty. It is the architecture of opportunity. In a more normal society, inequality can be softened by the belief that the system is open, schools work, capital is accessible and effort can still move a family from the bottom to the middle. In South Africa, too many people do not see that path.

The legacy of apartheid did not end with apartheid.

It compounded.

It compounded through land ownership. It compounded through education. It compounded through access to capital. It compounded through where people lived, which schools they attended, what networks they could enter and what assets their parents could pass on.

That is why South Africa’s Gini coefficient remains among the highest ever recorded for a major economy. This is not accidental inequality. It is inherited inequality, reinforced over time.

A poor person can accept that someone else has a bigger house or a better car if they believe their own child has a fair chance of achieving the same. But when opportunity appears reserved for those with political connections, wealth begins to look less like success and more like privilege.

This is the uncomfortable reality of post-apartheid South Africa.

The country moved from a system where race determined economic opportunity to one where political access often became a powerful advantage. The rise of a connected black elite was an important correction to apartheid exclusion, but it also created a new frustration among ordinary citizens who feel they were left behind....

Many fought for liberation together. Yet decades later, some live in first-world luxury while others continue to  grovel under sub-human conditions.

That gap is politically explosive.

The statistics explain the anger.

South Africa’s unemployment rate remains among the highest in the world, with young people carrying the heaviest burden. Millions of young South Africans have grown up after apartheid, hearing that freedom had arrived, only to discover that economic opportunity remains painfully limited.

They see politicians and businesspeople with access and influence moving ahead while they struggle to find work.

Then someone tells them the problem is the foreigner.

And the match is lit.

"This is why xenophobia keeps returning. It is not because migrants suddenly become the cause of South Africa’s problems. It is because they become a convenient explanation for problems that are much deeper...

The foreign shopkeeper becomes a symbol of economic frustration.

The reality is more complicated. Migrants are a small share of South Africa’s population, and there is little evidence that they are responsible for unemployment, crime or failing public services. Many migrants are simply doing what South Africa has struggled to encourage enough of its own citizens to do: start small businesses, take risks and compete in difficult conditions.

The tragedy is that their success often becomes a source of anger rather than a lesson.

A society with millions of unemployed young people cannot survive on blame. It needs opportunity.

When leaders fail to provide answers, scapegoats become attractive.

This is where politics enters.

The African National Congress (ANC), once the unquestioned symbol of liberation, has lost much of its dominance. Its loss of a parliamentary majority in the 2024 election reflected growing public frustration with unemployment, corruption and poor service delivery.

A weakened liberation movement faces a difficult temptation: to explain failure or to distract from it.

"foreigner becomes useful because he shifts attention away from the broken municipality, the failed school, the corrupt tender and the political insider who became wealthy without creating broad prosperity...

But South Africa cannot build a future by attacking people who are also trying to survive.

The real challenge remains the same one that existed in 1994: turning political freedom into economic mobility.

And like every unpaid bill, the longer it is ignored, the more painful the final payment becomes.

MTN’S SECOND BITE AT THE CHERRY

Last week telecom giant, MTN offered seven percent of its shares to the public. The shares on offer, were shares first offered to the public in December 2021, that were not taken up and which they are under regulatory obligation to sell by December.

"In the company’s much awaited Initial Public offer (IPO) in December 2021, MTN offered 20 percent of itself to the public but only 65 percent of the offer was snapped up. It came as a great shock, as lesser companies have been oversubscribed in previous offers...

Industry players today think a repeat is unlikely.

At the end of 2021 the global economy was only just finding its feet after the Covid-19 lockdown. In addition, in a bid to beat back inflation interest rates had risen in western economies and monies had fled our shores to go back home.

The selling of shares to the public by MTN was a condition of the renewal of the license, it is arguable that given a choice, given the economic situation of the time, even MTN may have wanted to hold off a little. They did not and the IPO fell short.

Since then though, trading in MTN shares have provided a boost to the Uganda Securities Exchange (USE) and even if the share trading at sh170 before suspension of activity on the bourse to allow this new offer, is lower than the effective IPO price of sh180 from two years ago, consistent dividend payments, thrice a year have more than made up for that slight dip in price fortunes.

This time around the sentiment in the economy is markedly improved and MTN CEO Sylvia Mulinge is confident that a repeat of the IPO debacle will not happen this time around.

“We have been transparent about our progression of growth since we listed and we are confident we will get some real engagement. The appetite is there,” she told a news conference last week.

The company has thrown in a sweetener, with every 140 shares bought, buyers will be entitled to an additional 30 shares. With the share selling at its market price of sh170, the effective price of the shares on offer is then sh140, an 18 percent discount.

"In theory if trading reopens at sh170 every shareholder will see an immediate sh30 a share gain...

As if that is not enough all shareholders will be eligible for the sh6.4 per share dividend that will be paid out on 25^th June.

As a short term play the benefits are obvious.

For the investors, who intend to hold the share for the long haul, they too will not be left out.

The company last year paid a total dividend of sh18 a share, a 13 percent return on their money, better than the average fixed deposit rates in this town and higher than the yield on the 364-day treasury bill, which at last week’s auction was 11.926 percent.   

The final dividend for 2023 is a 13 percent improvement from the previous year’s dividend of sh15.9 a share and expectations are that this trend will continue.

While the share price has barely moved over the last 12 months, growing three percent, investment experts are confident that this is a temporary situation.

"They base their thinking on – among other things, on the company’s continued growth in profitability, averaging about 16 percent over the last five years, a figure they say was affected by the Covid pandemic. Last year net profit grew 21 percent....

They expect this to continue with the increasing subscriptions to the network – in May the company logged its 20 millionth subscriber and recorded a growing up take of data services – subscriber numbers jumped 22 percent to 8.2 million.

While mobile money has been growing by leaps and bounds – subscribers were up 10 percent to 12.1 million in 2023 and transaction volume had jumped to sh133trillion from sh92.3trillion the previous year, in 2025 it is set to be spun off from the telecom.

“MTN Uganda intends that all existing shareholders will continue to benefit from the company’s financial technology and infrastructure businesses, whether in the form of listed or unlisted interests and irrespective of any potential restructuring that may be undertaken,” a company statement.

The growing importance of the mobile money arms of the telecos, splitting the entities was part of the renewal of the contract.

"MTN Mobile money had sh1.5trillion in deposits, which would have made it the eighth largest financial institution in Uganda by customer deposits.  Deposits grew 23 percent to sh1.5trilion from sh1.2trillion in 2022, assuming this rate of growth is maintained MTN’s mobile money army would have matched Stanbic bank’s current sh6.3trillion in deposits by 2030...

Whichever way the restructuring goes existing shareholders stand to gain.

With millions of Ugandans yet to acquire mobile phones or log onto the internet or access mobile money services, MTN with its lead in market share in all segments has to be given serious consideration by investors.

MTN AND THE SIGN OF THINGS TO COME

Last week MTN publically released its results for the first time in its 23-year history in Uganda.

This was necessary as they are now listed on the Uganda Securities Exchange (USE), for which it is mandatory to report publically on the company financials at least twice a year.

The Telecom company reported that revenues grew 9.4 percent to break through the sh2.04trillion mark, the only Ugandan company to do so.  The increased revenues were driven mostly by data sales and fintech (mobile money services), which jumped 22 percent and 10 percent respectively.

New shareholders will share among themselves sh105b in dividends for owning the share for the last 25 days of last year. The dividends per share will be sh4.7. The total dividend paid out sh15 per shares, sh11 in dividends was paid out before last year’s share offer.

That was all very nice but the results also pointed to the new trends cementing themselves and bound to affect the way we relate and do business into the future.

For starters, for the first time in MTN Uganda’s history revenue from voice calls -- sh1.01trillon fell below half of total revenues. While voice revenues grew 3.6 percent compared to the previous year, this was dwarfed by growth in data and mobile money services....

More than a decade ago when Bobby Collymore took over the reins at Kenya’s Safaricom, he said in his first interview that, in the future voice services will be an add on, given away for free by telecom companies that the action was going to be in data and mobile money services. I couldn’t relate at the time but we see it come to pass before our very eyes.

While the growth in data and fintech can be blamed on the Covid-19 restrictions of the last two years, industry players are confident that the use of both services instead of falling back to pre-covid levels will in grow faster into the future.

To that end MTN is making smartphones available more conveniently through hire purchase schemes. More than 100,000 phones were acquired these schemes and have accounted for some of the increased data usage. Almost a million new data subscribers and 1.5 million new fintech subscribers were signed onto the MTN network.

Assuming this growth continues we are heading very quickly towards a cashless society, bill payments grew 58 percent and merchant payments grew by 14 percent.

Even more startling for me was that mobile money deposits grew by sh300b to sh960b, a 46 percent growth which in itself account for the total deposits of some of our smaller banks. While MTN cannot finance its business using these deposits they still constitute a huge proportion of the monies we saved under our mattresses or in our socks or bras, being brought into the formal financial sector and therefore more useful to the general economy. Assuming the current rate of growth continues these deposits will double every two years, if you extrapolate this into the future, it boggles the mind how big these deposits will have grown to.

It is obvious that MTN and telecom companies in general, will be a great driver of financial inclusion, resource mobilization and even economic transformation...

It happening already in parts of the country where early adopters are saving on their phones or running their accounts in their SACCOs via their phones, borrowing and investing off their phones.

One of the biggest factors in income inequalities is a lack of information. Ground down to its most basic level, you are poorer than your rich neighbour because you do not know something he knows. And once you have the information can you act on it? Now with data services becoming more and more pervasive we can get the information and with fintech going the same way we can act on what we know, in real time.

It follows therefore that it is in the economy’s best interest that tools such as smart phones are held by more and more people. In South Africa eight in every ten people has a smart phone, business there moves at the speed of light.

It was reported recently that Sweden has the most internet startup per capita of every country in the world. Looking back to how this came about, it was traced back to a government policy in the early 1980s that sort to have a computer in every house. The children of that time, who were exposed early on to the computer, leveraged their familiarity they had developed playing Space Invaders into programming and eventually building tech companies.

While there is momentum in adopting these new technologies government can speed it up by revisiting its tax regime around the ICT sector as a means to increase especially smart phone penetration and data usage. We will not be reinventing the wheel, oy has been done before and with great success.

LISTEN TO PROPHETS OF DOOM ON UGANDA POWER SITUATION

Podcast here

In 1996 I  made my first trip to South Africa. We got there in the dead of the night, but you wouldn’t know it. The highway from the airport was so well lit you could drive without your headlamps on.

At the time Uganda was beginning major loadshedding. We would have power on in 12 hour alternating intervals – power would be on in the day today, off at night, tomorrow off in the day and on at night.

I asked our South African hosts whether they ever had loadshedding and they went, “What is that?”

Today they are the ones suffering massive power outages and we go crazy when it goes off for 30 minutes. They failed those years ago to plan for the growth of their economy and the subsequent jump in demand that would swallow their surplus supply.

As it is now we have a installed generation capacity of about 1,252 MW against a peak demand of 750 MW. This surplus will bumped up even further when Karuma’s 600 MW comes on line later this year.

"While we may be forgiven for taking a break from trying to build new power dams given the bloodiness of the fights that it took to build Isimba and Karuma dams, industry experts estimate that by 2027 if we don’t start building new power generation units now, we will be back to the loadshedding years of yesterday and who knows it may be South Africa’s time to ask again, “What is that?”...

Also given that on average it takes about seven years to commission a power project in this country, we are behind schedule to beat the 2027 deadline.

Government keeps moaning that it has got bad deals in the generation and distribution concessions it signed with private providers, but everybody who was around knows we were in a desperate situation at the time with little to no bargaining power. To do nothing now means in a few years we will be signing other “bad” deals because a crisis will be upon us.

For starters there has to be more integrated planning. The left hand needs to know what the right hand is doing. Recently it was reported that a 40MW hydro power dam at Achwa is ready for commissioning there are no transmission lines in place to evacuate the power. As a result government is paying a few billions a month to the owners for power we are not consuming because the promoters of project cannot be blamed for government inefficiencies.

It seems the logical thing to do, when you start building a dam you have to ensure there is demand down the line, that you have the distribution network to feed this demand and you have the infrastructure to get the power from the dam to the distributor. To that all the players up and down the line have to be in the know of what is happening. In Uganda clearly not.

It was the same complaint with Karuma where the dam construction was ahead of the process of getting transmission lines to them. Is it possible that the multi-year development of the billion dollar 600 MW Karuma dam was kept secret from Uganda Electricity Transmission Company Ltd (UETCL)?

It was heartening to see that Uganda Electricity Generation company Ltd (UEGCL) showed a healthy profit last year – all of sh92b. This has been helped by the takeover of Isimba dam which suggests we are developing in house capacity to develop our own power projects.

This is important, because in our desire to lower power costs for industrialists, who generates our power is a big determinant.

"A recent industry showed that while government power plants – Kiira and Nalubale produce about half the power we consume they account for less than 20 percent of the tariff that we pay. Common sense would dictate that government should be looking to shifting development of power plants more and more towards UEGCL as a way to shift the tariff further down...

Private investors should be encouraged but within a broader strategy of pushing tariffs down, that recognizes this fact.

It comes as surprise then that the other day Electricity Regulatory Authority (ERA) put out an announcement that China International Water & Electric Corp, the contractors of Isimba are undertaking a feasibility of building a 392MW dam at Oriang in northern Uganda.

To begin with there is too much conflict of interest in the proposed contractor carrying out a feasibility study on the dam they want to build. What if the site has a capacity of 700MW but the contractor can only finance a 392 MW dam, will he tell the truth and forgo the project? Highly unlikely.

At the bare minimum feasibility studies like these should be done by government before the put out bids for development of these projects.

This should be UEGCL’s work. UEGCL is not only to collect fees from independent producers, but eventually to develop projects just like KENGEN in Kenya does, all within an industry strategic plan.

The energy ministry as the overseer of the sector needs to pull up its socks. Just because we now have private players in the sector, does not mean the ministry should abrogate its responsibility as the overall planner of the sector.

 

MTN’S JOURNEY FROM START UP TO THE STOCK EXCHANGE

I remember it like it was yesterday. The first day that telecom company MTN opened for business. I stood in line to get my MTN number, one of hundreds with sh70,000 clenched firmly in one hand and phone in the other. The sim card cost sh30,000 the rest was loaded on the phone as airtime.

Up to that point the sole mobile phone provider Celtel, used to charge for airtime in US dollars and had a punitive service fee  – it cost $10, which lasted a weekend when time was up you could neither receive nor call out.

Their airtime too was very expensive because in November 1998 – my first full month on MTN, the accountants had to call me in because my MTN airtime claim had fallen to sh200,000 from $400 paid to Celtel the previous month, for the same volume of work. The dollar then was about sh1,300.

"But our joy of shedding off the shackles of Celtel were short lived as the MTN system soon, within the hour crashed under the weight of the new numbers. I later learnt that MTN had installed a 14,000-line switch at Mbuya, the planners thought that would be good for a few months were soon back to the drawing board...

I would have paid to be a fly on the wall at the swanky new Celtel headquarters, which they bragged had cost sh4b, when they saw their subscriber numbers fall off a cliff that day.

At the time Uganda was at the tail end of its privatization effort and was moving into the more intricate liberalization phase. I covered the search for a Second Network Operator (SNO) as a journalist and one of MTN’s target as the SNO was to sign up 89,000 new subscribers within five years.  That doesn’t seem like much today but at the time Uganda Posts & Telecommunications Corporation (UPTC) the state owned telecom company had 50,000 subscribers. It was later split in to, which was split into UTL, Posta and Postbank.

By the end of the next year MTN had surpassed its 89,000-line target and I heard there were mutterings in the corridors, that the condition was for copper lines – used by the old analogue phones and not mobile phone lines. Probably a shakedown operation.

MTN has never looked back and to see them in action now one would think they were the pioneers of mobile telephony in this country.

But it’s not only the telecom industry that was shook up.

A few years later MTN went to the banks to borrow the billions it needed to keep up with the huge suppressed demand. I don’t remember the details but the bond the issued for the money was supposed to last five years but after the second year they wanted to pay off the debt. One bank refused to take back their money. Their argument was that they had planned on those cashflows coming in over the next few years and to take the money back now would throw their budget off.

So today when MTN – this country’s only billion-dollar company, announces the details of their share offer, it will belie an adventure the South African company embarked on in 1998 that, along the way, has paid off handsomely for its investors, the economy and its users.

Because people forget that Uganda was MTN’s first market outside South Africa and the one, which pointed to the huge demand for the unique kind of service they could provide, having cut their teeth in the townships of South Africa.

"It’s the Ugandan experience, which emboldened them to go into Nigeria, which long overtook South Africa as its biggest market....

MTN plans to sell about one trillion shillings’ worth of shares over the next six weeks to the public. The price of a share will be announced today but following what is becoming our rule of thumb, one can expect it will be cheaper than a bottle of soda.

While the Umeme share offer of almost 10 years ago raised more than sh100b more than the Stanbic offer, the bank’s offer has been the most exciting to date, but MTN’s offer is set to move the excitement needle beyond red. Not only is it almost ten times bigger than the Umeme offer but MTN’s top of mind recognition among the public is universal and that will count for a lot.

Interestingly across the border the Safaricom initial Public Offer (IPO) in 2008 was also the most exciting share offer on the older Nairobi Stock Exchange (NSE) at the time. At the time Safaricom dominated the mobile phone market, accounting for almost four in every five subscribers and was just getting into data services and M-Pesa – their world renown mobile money service. They have maintained their dominance in the market, some would say have cemented it, and their share price has risen eightfold since the IPO.

MTN now is around where Safaricom was then.

 

 

 

 

 

BIG NEWS: MTN GOT THEIR LICENSE RENEWED BUT …

Last week it was announced that the government had finally renewed telecom company MTN’s operating license.

This comes after nearly two years of hard negotiation that included such tactics and brinkmanship as can only be found on the Hollywood screen.

MTN is to pay $100m (sh370b) for a 12 year term. MTN’s Second Network Operator (SNO) license  expired in November 2018.

The announcement last week not only brought to an end the protracted negotiation between Kampala and Johannesburg but also finally clarified on government’s position on telecom licensing going into the future.

The ICT minister Judith Nabakoba last month gazetted licensing requirements for operators in the industry. 

This is the tail end of the  process that led with the unveiling of the Broadband Policy in 2018.

The gazette promises to bring some order to an industry by formalising the licensing of infrastructure and service providers, greater clarity on bandwidth usage and the regulation of other accessory services.

Attracting more players up and down the value chain will be good for the customers as the competition will ensure not only choice but quality service at an affordable price.

But of course the highlight was the telecom licensing.

Under the new rules there are now provisions for nine categories of licenses that range from the National Telecom Operator (NTO) to the community operator license. Each has the fees and obligations of the operator outlined.

For the first time it clear that if you want to invest in the sector this is what it will cost to get a license and your obligations under the license.

So for instance if you apply for National Telecommunications Operator license the least you can pay for the license is $21.3m (about sh80b) that’s for a new entrant into the market. 

That would allow you to lay down your infrastructure and provide a full spectrum of services from voice to data around the country.

If you are an existing player and  want to renew your license you would pay 1.84% of the previous year’s revenues multiplied by ten, the first half of the 20 year license.

So under these circumstances Airtel, whose license comes up for renewal in July, given their annual revenues of about $380m last year, would pay about $70m.

However, and this probably explains the two year delay – from the passing of the broadband policy, in spelling these all out the minister curved out a special category for MTN.

In this the National Telecommunications Operator (special license category) MTN will pay $100m (no indication how this figured is arrived at) for a license that will run for 12 years.  

Immediately questions jump to mind. Why is MTN being treated differently, using subjective parameters that the public or other competitors are not privy to? Why will the NTO get 10 years, with an option to renew for another 10 years and MTN is not afforded that choice? And what will happen if another operator insist on getting their own terms like MTN? 

In a throw back to

"1998, MTN paid $6m for its 20 year Second Network Operator (SNO) license. One of the conditions of the license was that they were supposed to sign on 89,000 lines in five years. This looked an insurmountable  task given that Uganda Telecommunications Ltd (UTL) had only managed 50,000 subscribers since independence and Celtel had about 5,000 subscribers....

But when MTN signed on more than 100,000 subscribers in the first year the six million fee begun to look like a bargain.

Interestingly MTN won the license partly because they offered the highest price of any bidder at the time in an open and transparent process.

With that in mind it is not inconceivable that with the rapid developments in technology, that five or 10 years down the line the $100m license fee may very well be a bargain. And then other license operators may want to be in the special category, which for the moment is only for MTN.

In rule based environments these kind of disparities are a recipe for all sorts of misplaced perceptions and complaints.

And if you think about it the distinction was not necessary. The  ministry could have kept MTN in the NTO category and they can get renewal after 12 years.

Interestingly in both licenses the holders are expected to list on the Uganda Securities exchange (USE) within two years of signing on.

An investor looking to invest would not be looking at operators with the same license. On the one hand would be the “special” MTN for who it is not clear the license would be renewed after 12 years and the other operator who has the option to renew after ten years.

It is always difficult to price for these long term investments, see the brouhaha in the electricity sector in recent years. Keeping this in mind

the wise thing to do is to reduce discretion to the minimum to make the affected businesses viable, but also as a signal to intending investors that you, as a government know what you are doing.... 

 The devil they say is in the detail, let’s mark this anomaly for future reference.

 

THE YOUTH BULGE, A CHALLENGE WE CANNOT IGNORE

Outside Johannesburg in the town of Germiston is the Ekurheleni East College (EEC), a modest campus that serves as part of a pilot project to head off South Africa’s looming disaster.

The technical and vocational training institution is the beneficiary of an African Development Bank (AfDB) grant geared at better skilling its students – youth and SMEs for the workplace.

Students at the school learn vocational skills like a metalworking, electrical installation, plumbing and business studies.

"The need is urgent. South African officials estimate that at least six million people – or 30% of the working age population, are unemployed most of whom are youth...

The South African economy, growing at paltry two percent, can’t promise to create enough jobs for its jobless masses. It is hoped that if the pilot one of three, prove successful in getting their graduates employed or open up businesses, they can roll it out across the country and forestall what is widely seen as a ticking time bomb.

Apartheid biased development towards a white minority – South Africa has the widest wealth disparities on the continent, and as a result there are thousands of youth roaming around thinking that they are no better off 25 years after apartheid was dismantled. This frustration has shown itself in the country’s high crime rate and the attacks on foreign workers earlier this year.

A corruption which has almost ground the economy to a halt – they suffer up to 16-hour load shedding on some days, has not helped issues.

It’s the story of the continent – without the apartheid hangover, but in contexts that are no less daunting.

In Uganda more than 80% of the population is under the age of 35. According to 2016/17 Uganda Bureau of Statistics (UBOS), 13.3% of Ugandans between the age of 18 – 30 are unemployed. Other numbers have varied more wildly but don’t stand up to anecdotal evidence.

That being said the economy not creating enough jobs in the formal sector to absorb the thousands turning up in the job market every year. So like South Africa practical and entrepreneurial skills will have to be emphasized going forward.

"Conspiring against efforts to create jobs for all by the year 2040 or whatever the number is now, the increasing automation of processes across sectors. Every industry from manufacturing to banking to retail, even garages are looking to employ fewer and fewer people to gain efficiencies and cut costs....

While manufacturing jobs is what drove the industrial revolution in the 20^th century I am afraid it will not have as significant a role in the 20^th century.

New plant and machinery now need fewer workers to do more work. Unlike the workers of the industrial age these new workers need to be better educated than the automatons of the last century too.

That being said there will always be a need for a carpenter, mechanic, plumber especially as we become more urbanized. But even more importantly there is a need for good entrepreneurs who understand not only how to set up businesses but run them sustainably.

This last point is critical. An engineer who leaves university knows the subject inside out but is unable to start and run a firm, that can not only do construction but also employ more and more people and grow. Is it any wonder that after today we have no major indigenous contractors winning major jobs in this infrastructure development boom?

"The biggest companies were first small companies. And for every big company hundreds even thousands have fallen by the wayside. The ones that have survived the natural selection process have done so often because they have been deliberate and systematic in growing their capacity over time... 

In more advanced economies this has happened over generations, here in Uganda maybe over the last three decades, at least.

In addressing the youth unemployment challenge, government needs to recognize that throwing money at the challenge is at best a stop gap measure at worst will see our youth addicted to handouts. 

What government needs to do is improve the environment for doing business – we are 112 out of 189 in the Ease of Doing business rankings, commit more resources to providing vocational and entrepreneurial skills.

If done systematically then even the government handouts will be better utilized in serving the end of job creation.

At Ekurhuleni they don’t stop at graduating technicians, but work with industry – the surrounding industries actually nominate the students to the college, provide internship slots and often high them eventually.

Those who are not so lucky graduate with a toolkit to help them set themselves up in their own communities.

"South African trade ministry officials know it’s a race against time – at the college they are employing a semester system that allows them to train double the students given the facilities. When fully rolled out in a decade or so they intend to be annually passing out at least ten percent of the unemployed youth annually or 600,000 graduates....

We wish them luck. We will all need it.

SA XENOPHOBIC BACKLASH CAN HAPPEN ANYWHERE

It has been traumatic watching, even from afar, the latest flare up in xenophobic violence in South Africa this week.

In one video, a group of youth set upon a helpless lady, pummeling her with punches and kicks, buffeting her from side to side in a corridor of torture. The 25 second clip spared the end – they had already started stripping her of her clothing.

I couldn’t begin to watch the one of the young man set ablaze, staggering about in agony as people looked on in morbid fascination.

"The madness is a culmination of the apartheid policy, which dispossessed the local communities and actively worked to prevent them from rising above their imposed poverty and a corrupt African
National Congress (ANC) government, which has failed to deliver on promises to improve social services and infrastructure in black communities, the badly needed rungs needed for the majority to climb up the social ladder....

There really is no sugar coating apartheid, it was an evil, criminal system that not only materially deprived the majority but also traumatized several generations ingraining complexes that have found full expression in an irrational xenophobia.

Sadder even is that politicians in South Africa have rose to prominence on the back of, maybe not xenophobia, but a variation of the hate agenda, tapping into the anger of a younger generation.

It is a messy business. Resolving it will take much pain, selfless leadership and foresight.

But we should be careful not see it as something that is happening over there and not likely to happen here.

It has been suggested that ethnic tensions are unlikely to be as vicious in Uganda as in other places, the thinking being that there are too many tribes in Uganda and there is no duopoly as the one found in Rwanda or Burundi that could trigger widespread bloodletting. Thank God.

"In Uganda the combination of economic growth not equitably distributed and one of the most youthful populations in the world, means a flare up of social unrest along the lines of the haves and have nots is more likely...

Bad politics leads to bad economics. In countries where income and wealth disparities are widening, the main culprit is the government. It either means government has failed to stimulate economic growth or If they have, they have failed to spread the love around equitably so everyone has a better than good chance of climbing the social ladder.

In Uganda we know how to grow the economy. We can do it in our sleep. We have enjoyed the longest period of sustained economic growth in the history of this country over the last 33 years – the last time the economy contracted was in 1985. As a result the economy has grown more than six fold during the period while the population has tripled.

Of course it can be argued that we were coming from a very low base, so paving a few kilometers of road or adding 100MW power to the grid or adding $100m to our export receipts would show up as significant in growth figures, but then why then don’t smaller economies show the same sustained growth?

The challenge then is to ensure every Ugandan feels these quantitative improvements on a macro level in their own incomes and standard of living.

First off despite the progress made on the macro level we really are still far behind where we need to be. The government plans to spend sh40trillion this financial year or about a million shillings per Ugandan. On health government plans to spend sh65,000 per Ugandan for the whole year.

You don’t have to do any deep analysis to realise that there is a shortage of resources to begin with.

Government finds itself between a rock and hard place. Does it provide quality services to less of the population or do as it is trying to do now, provide less than adequate services to a larger population?

From a purely mathematical angle it would make sense to offer quality services to a few people in the population. These few will be more productive and increase the resources – through taxation, that government can spend on more and more people.

But politics dictates that you have a mass product no matter the quality of the service. In this scenario you have a near universal feeling that government services don’t work, defeating the political argument for mass service delivery.

Corruption affects service delivery through theft of resources, diversion of resources, absenteeism and any number of dodges that cause government service to fall short in the context of resource constraints.

"If service delivery is not adequate you have fewer people climbing out of poverty, increased disenchantment with the political elite, which may very well lead to easy mobilization of disgruntled groups against those seen to be benefitting from the status quo...

They say never underestimate the stupidity of the people in large numbers. The analysis doesn’t have to be true of who the beneficiaries of the system are, to rile the mobs and cause mayhem as South Africa is showing now.

South Africans are not stupid, they are lashing out at the unfairness of their lot, which has its origins in a historical injustice and perpetuated by a corrupt political elite today. But they don’t know it.

THE MOBILE PHONES UNDERSTATED ROLE IN ECONOMIC GROWTH

A friend recently did a trip up and down the country. Having done this several times before, he was shocked to discover, this time around, that he could not roll into a town unannounced, so to speak, book himself into a hotel for a night. Like in the good old days.

Being a celebrity counted for nothing. There was not a quality room– clean linen, working shower and solid door, to be had.

This did not happen only once but in several towns in the west, north and east of the country. And he couldn’t work out what was happening.

"In 1999 Uganda’s GDP growth jumped to 8.1% from 4.9% the previous year. There was no coffee boom or bumper harvest that year. In fact El Nino, the weather phenomenon characterized by flooding and prolonged rains had ravaged the crops up and down the country. In addition we were suffering a lot of bad press for our incursion into Congo and some donors had pulled the plug on their funds in a huff...

But in that year Uganda became the first country in sub-Saharan Africa where mobile phone coverage exceeded the number of land lines.

Up to this point Uganda had about 50,000 landlines on the Uganda Posts & Telecommunications Corporation (UPTC) network. In November 1998 South African company MTN –mobile telecommunications network then, entered the market and triggered the explosion in the uptake of mobile phones.

The correlation between the near doubling in GDP growth in 12 months and the widespread use of mobile phones is anecdotal at best, but may provide useful grist for a study.

Fast forward to today and the same parallels may be drawn to explain my friend’s travails on his travels.

But before we talk about mobile phone coverage there is the improvement in trunk roads around the country. In the last few years hundreds of kilometers of trunk roads have been worked on, creating a tarmac lattice around the country, making movement that much easier.

So it’s possible that the inns around the country are full, from travelers who can begin their trip later in the day and stopover in the major towns before a final push for home in the morning.

Add to that the phenomenon that now transport is available to any part of the country from Kampala any time of the day or night.

But I would like to think too that since now mobile communication has grown beyond voice calls as it was in 1999, to now include texting, social media and even mobile money, economy is beginning to reap the benefits of these improved communication means.

The last one is particularly interesting, it has become such a part of our lives that we take it for granted.

In 1998 if someone called you and said he was hard up for money, he was in Mbale say and you were in Kampala, how quickly could you get the money if you had it on you? You could go down to the bus park and find someone to deliver the money to so-and-so’s shop. People got a bit clever and to move money over such distances they would buy airtime, text the code and the recipient would find a way to flog the airtime for money where he was.

Hard to imagine if you were not there, when today the request can be honoured in under five minutes.

Given this scenario, is it no wonder that we now have a proliferation of bars springing up around every surburb and seemingly doing a rip roaring business day in, day out? There are even Sunday night theme nights these days!

"In the 2017/18 financial year sh73 trillion or more than twice that year’s sh30trillion national budget was transacted across all mobile money platforms. This figure was up 37% from the previous year’s sh53trillion. The figures are not out yet for the last financial year but assuming the same rate of growth, at least sh100trillion moved around all mobile money platforms in 2018/19....

If money can move around faster it stands to reason that there will be increased economic activity, the production, distribution and consumption of goods and services. And this is happening in a time when it is widely acknowledged that there is an economy-wide cash squeeze.

So the nephew on campus can now send a message to his favourite uncle Ben on a Friday night for beer money or you can order for and pay for a cab to pick up your better half and deposit him/her at your location without a word said or a physical exchange of cash or if you are an operator of a night spot you can advertise it online for the cost of only a few megabytes and or probably get a better response than before.

So it’s possible that my wandering friend has come up against the underrated power of the mobile phone, its growing uptake and use that make consumption easier and forced an uncomfortable night in the back seat.

THE GOOD, BAD & UGLY OF PRIVATISATION

My column last week “We were right to privatize UCB,” threw up a lot of comment. Some of it illuminating but a lot of it based on rumour, urban myth and downright ignorance.

When the government set out to privatize state enterprises in the 1990s as a way to unlock their assets and stimulate the economy, it came up against loud, even shrill opposition. I learnt last week that opposition is still alive and kicking – despite the evidence to the contrary.

The critics argued that the government was in effect selling the family silver – never mind all of them were hemorrhaging money that would be more profitably used funding health, education and infrastructure rehabilitation; that foreigners would take over the economy – never mind that the economy was in shambles and teetering on the brink of bankruptcy; and that it would lead to a lot of job losses and social upheaval – never mind that most workers in these companies were not even being paid a living wage and many did no work to speak of.

"The critics were right to be worried about job losses, but those same companies have employed multiples more people than the old shells ever employed; The critics were right that foreign capital would dominate the economic landscape, but we are much better for it with improved goods and services, jobs and ever increasing revenues; the critics were wrong to rail against selling of the badly tarnished family silver, which were a drain on the treasury and disincentive to competition...

The benefits of the privatization in resuscitating these companies quickly, unlocking the value of their assets and jumpstarting the economy are hard to argue against once the facts are in your possession.

As a young reporter I covered the privatization process and below are some of the good, bad and ugly of the process, which if events had gone another way it is most likely we would be talking a very different language today.

THE GOOD: TORORO CEMENT

Previously the Uganda Cement Industries (UCI) the company whose plant had long ground to a halt was privatized in 1995. The value, to the investors who changed its name to Tororo Cement Ltd, was the lime deposits that came with the factory. The factory’s equipment had not only broken down, but was obsolete and a complete overhaul of the factory was required.

"The case officer in charge of the deal later said that the factory was so bad that he was relieved to be handing over the keys with one hand and embarrassed to be asking for a check in the other. He said he felt like a con man, that Uganda should have been paying these investors to take the companies off their hands rather than the other way around...

He could not leave the premises fast enough after the transaction was done.

But today Tororo Cement is the leading manufacturer of the building material and have completed an expansion of their plant that allows them to produce three million tons of cement annually. It has been at the center of the real estate boom of the last few years and now exports to the region as well.

THE BAD: Coffee Marketting Board (CMB)

This was one of the most difficult attempts at privatization. Around 1997 government begun the process of the divesting 49 percent of CMB. The company which until a few years prior, had monopolized the marketing of Uganda’s coffee.

Its share of the bean’s export trade had collapsed to less than 10 percent at the time, but the people at the privatization unit were touting the four million bag a year coffee roasting plant as the key asset for investors to look at, as well the land on which it stood in Bugolobi.

After the first round of bids Swiss coffee trading firm Sucafina was the highest bidder of four, with an offer of $8m. Unfortunatley the company had assets then with a book value of about $40m. MPs at the time thought Sucafina were indulging in daylight robbery and ordered the PU to cancel the process and retender the sale.

"At the second round of asking there was only one bidder left, Sucafina and this time they offered $4m, effectively giving us the finger. Needless to say parliament threw this one out, the company was boarded up and that was that. We effectively cut off our nose to spite our face.

THE UGLY: UGANDA AIRLINES

By the time Uganda Airlines came up for sale it was sucking sh10b (about $5.5m at the time) a month out of the treasury, flew one Boeing 737 (not the max) on a solitary route, the Entebbe-Nairobi route and its only claim to fame was it would keep time.

South Africa Airways (SAA) was the leading bidder and their proposal was to turn Entebbe into a regional hub, with flights flying out across the continent and beyond. The process was a start-stop-start again affair over almost five years. Rumours of some powerful types subverting the deal to pave the way for their own airline were whispered. Objections to handing over the routes to SAA, with some muttering about racism under their breaths, seem to have scuttled the deal in the end.

"Eventually President Yoweri Museveni shut down the airline arguing he couldn’t keep shoveling sh10b a month down the Uganda Airlines black hole and that we would be just fine without a national airline. We would not die. That was in 2002...

There were many more eventful privatisations – successful and failed. In some instances they even against good economic sense palmed off some companies to Ugandans, I can't think of one that is productive. There were some companies for which the industry economics were so bad that they failed to rise again and folded anyway.

I shudder to think what would have happened if those companies stayed in government hands. How much good money would have gone chasing bad money down those black holes, all because we wanted to hang on to the family silver.

OF BLUE FLIES AND FOREIGN INVESTORS

1994, my worst Christmas ever. I remember it like it was yesterday.

I had stayed over at the university for the first term holidays.

When Christmas day came I had not factored in that the food vendors around campus would also want to go and be with their families.

At lunch time I wandered through Wandegeya, with my tummy sunken to my spine, in search of a meal but no one was open.

In the end we found some left overs – that’s what they seemed to me, at the market.

My enduring memory from the day was the blue fly. Have you ever noticed how flawless the blue is on those flies? I noticed that day. Given the source of its sustenance how could the blue be so perfect?.

Fast forward to today it’s unlikely that a liquid university student today would suffer the pangs of hunger that I did on that Sunday afternoon.

"In 1994 I couldn’t afford a bank account – they insisted on a sh100,000 minimum balance. Nor a mobile phone – and Ericsson 628 was going for at least a million shillings. Nor a taxi cab – the minimum fare was a few thousand shillings, maybe sh10,000 then....

Given a similar situation now my options would be much more open.

Not only are there many more food outlets, off my mobile phone I could tell where they are, get a ride there and once there even pay for the meal off my phone. Or order in and have them deliver to my room. Or better still call some long lost relative, determine their availability on the day and go and share their Christmas lunch for the cost of only the cab ride to and fro.

In the quarter of century since then, the explosion in investment has made such stories --- my Christmas saga, the stuff of campfire tales and made the standard of living so much better for many people.

In an ideal world every nation should have its own resources to develop itself in the way that it sees fit. But we don’t live in an ideal world, Uganda more so, given our history of civil unrest and economic collapse.

When the NRA came to power in 1986 the economy was on its knees and their political project was in danger of being dead on arrival.

An initial attempt to be independent led them to trying all sorts of remedies, including letting the money printing presses run free, before the reality sunk in: Uganda needed resources to resuscitate the economy, resources that were not available at home. Hence the look outward. The rest as they say is history.

They sold off the dieng state enterprises, broke up the failing produce marketing monopolies and opened the economy to investors from far and wide. The net effect of these policies was to make Uganda an attractive investment destination both for local and foreign businessmen.

The results are really there for all to see.

I remember speaking to an official of the privatisation unit in the 1990s and he revealed that when he had to handover the Tororo Cement factory to the buyers, he was so embarrassed, the factory was in a dilapidated state and its machinery obsolete.

“I felt like a con man. The truth is we should have been paying some of these investors to take these bad companies off our hands instead of them paying us to buy them,” he moaned.

Today after tens of millions of dollars in investment --- the latest expansion to increase production 70 percent to the current three million tons cost $25m, the same factory is the largest producer in the country. The company says on its website that it directly employs 900 people and 16,000 indirectly, a far cry from the mothballed factory of two decades ago.

"The foreign investor has become such part of the fabric of our society as to now become clichéd. We actually take them for granted...

The interesting thing would be to look back to my 1994 Christmas lunch and as to who was around at all at the time and try and remember what life was like without them.

As a group the South African firms would serve as a useful case study, as they only started to stretch out into the continent around the same time.

Last year the top 20 South African companies paid more than a trillion shillings in tax to the treasury.

A run down the list shows that only Barclays Bank, now owned by South Africa ABSA group, were around with only two branches in Uganda, one on Kampala road and another on Luwum street and Nile Breweries, then a Madvhani owned company were in business.

So think about it, we had no MTN mobile phones, we didn’t have a Stanbic bank, we had no digital satellite TV, no Game or Shoprite stores and ESKOM was not generating our power from Kiira and Nalubale dams. And by the way it is not as if these firms came in to replace or muscle out existing players, all the above services were not being rendered – oh! Except bad power distribution by the Uganda Electricity Board (UEB).

These South African companies as far as I could tell, have laid out at least seven trillion shillings in investment over the last seven years in capital expenditures, property and equipment and intangible assets.

"One can safely say investors from China, UK, India, Netherlands and even Kenya in investing their money here, have not only found it very lucrative but have served to improve our standard of living through the products and services they provide and their contributions to the national budget...

On the other hand if these investors were in town on that Christmas lunch so many years ago I may not have appreciated the perfection of the blue fly!

ICC NEVER REALLY HAD A CHANCE WITH AFRICA

South Africa has started the process of exiting the International Criminal Court (ICC). Its leaders argue that being part of the ICC compromises their role as a regional peace broker.

The Burundian parliament has voted to leave and Gambia became the latest country on the continent to declare its intent in the same direction. Gambia’s decision could prove an embarrassment to the ICC’s chief prosecutor Fatou Bensouda, a native of the small West African nation.

South Africa’s decision, which became official with their writing to the UN came as a surprise and the worry is that it may galvanise other African country’s to act out their own desires.

"One can say the momentum to leave the ICC on the continent begun with the refusal by the court to drop a case against Kenyan President Uhuru Kenyatta, for his alleged role in his country’s post-election violence a decade ago. The ICC’s adamant stance turned off previous supporters on the continent and has since been easily spun as a racist attempt to subjugate Africans...

This perception has not been allayed by the fact that nine out of the ten cases for crimes against humanity are against Africans. The appointment of Bensouda to replace the tenacious Moreno Ocampo has not helped matters much.

There is a lot wrong with Africa, not least of all how human and civil rights are trampled upon by the high and mighty without any fear of repercussions.

It helps that a better educated population, with a growing middle class is increasingly appreciating democracy or at least that people have certain rights and is forcing leaders around the continent to tamper their heavy handedness.

However the institutions that Africans would ideally turn to for justice are underfunded, understaffed and fit like a square peg in a round hole in a cultural context where the big man still reigns supreme.

The ICC’s case is not helped by the fact that it is essentially an institution, designed, funded and backed by the west, despite its veneer of international respectability. African leaders probably fell over themselves to sign onto the Rome Statute, which established the ICC, to keep in favour with a donor community that was tearing out its hair at the medieval bloodletting going on the continent while feeling powerless to stop it.

Not necessarily because they have any sympathy for us poor Africans, but more because insecurity was getting in the way of accessing valuable natural resources in the jungles of the Congo or the savannah of South Sudan or the river banks of Liberia.

"It is easy to make the case that foreign self-interest is pushing some of these otherwise noble initiatives, especially when the nine out of ten cases are African and while places like Iraq, Afghanistan and Libya lie in ruins with not a squeak out of the Hague...

Whether South Africa’s decision will trigger a mad rush for the exit by Africa, only time will tell but clearly its not difficult to mobilise against the court, as Kenya showed recently.

That being said we cannot sweep under the rag the wanton human rights abuses happening all around the continent.

The more sustainable solution is that our courts should be empowered to handle these cases themselves, a solution which would evoke sceptical tongue clicking around the continent.

Let it not be forgotten that we are not reinventing the wheel or that Africans have a particular penchant for brutality and savagery. European history is drenched in accounts of genocide and gratuitous violence that have only been tempered in recent years – at least in Europe,  by economic interconnectedness and military balance.

The good news is that Africa will get there one day, as our borders fall away and we begin to focus on mutual benefit as opposed to parochial interests. The bad news is that external interference may stall this natural progression.

Until that is sorted out the ICC may have to wait.

THE POWER SECTOR AS AN INDICATOR OF PROGRESS

In 1996 on my first trip to South Africa I couldn’t help but marvel at the constancy of their power supply.

Around that time power company Uganda Electricity Board (UEB) had started on their daily load shedding program, where on alternate days power was cut during the day and subsequent alternate days power was cut at night.

I asked our hosts whether they had load shedding in South Africa. They looked at me quizzically, they were not familiar with the term and what did I mean.

Almost two decades down the road the tables have been turned. South Africa thanks to state controlled power company, Eskom, is suffering the kind of loadshedding we bore in the 1990s.

It is particularly bad for South Africa because mining is a big part of their economy so the economy is feeling the pain more than we did.

Two events in recent times have also reminded me how far the power sector has come.

Last week National Social Security Fund (NSSF) received a sh4.5b cheque from power distributor Umeme. During the event NSSF boss Richard Byarugaba couldn’t hide his glee how good an investment Umeme had been for his members. Since the initial sale of shares in in 2013 a return of 83 percent in dividend payments and capital gains had been recorded, basically what this means that in a year or two, Umeme would have doubled the sh100b it had invested in the company.

"It is an amazing turn around for a company, Umeme, which barely a decade ago was being lampooned for a daily loadshedding problem that was more a problem of inadequate power generation...

The second event is the initiative to distribute 300,000 energy saving bulbs. The $1.4m (sh4.9b) project will see a million bulbs distributed countrywide.  The project is aiming for the rather ambitious goal of lowering power consumption by 85 percent.

But this is the second such program. A few years ago about 800,000 energy saving bulbs were distributed whose net effect was to cause a 30 megawatt power saving during peak hours.

So from anecdotal evidence the program works, but it also points to a philosophical shift to our power sector.

Now we are not only keen to generate more and more power, which is good offense, we are also pushing very hard to save power, which is good defence.

I have one other suggestion. Let us double power tarrifs to residential consumers or at least raise them significantly and the saved power passed on to industrialists.

Recent debates that the high cost of power was making our manufacturers uncompetitive are justified but the suggestion to force the generators to bring down their tariffs were not.

The raising of tariffs for residential consumers and shifting the savings to the manufacturers could help reduce their tarrif, making them more competitive

We have raised tariffs before. Before we broke up UEB into is component parts and liberalised the sector, tarrifs were a fraction of what they are now. Government had to raise tarrifs quite rapidly to a point where it would make sense to invest in the sector hence the increasing investment in the sector today.

An increase in tariffs would also lead to greater savings in power consumed as we become more conscientious in our power consuming habits.

A demand curve of our power consumption shows that we use power most early in the morning before we leave for work and late at night just before we go to sleep. When the manufacturers are on during the day is when we consume the least power.

"The consumption graph is a useful illustration about a lot of what is wrong with our economy – we consume more than we produce...

The progress in the power sector is yet more evidence of what happens when good sense triumphs over populist rhetoric. If some MPs like Ken Lukyamuzi had had their way would still be enjoying rock bottom tariffs on our one hour a day power supply.

MANDELA MUST HAVE SEEN THIS COMING

The latest episode of xenophobic attacks seems to be dying down in South Africa.

A few weeks ago some South Africans in protest over their having to forfeit economic opportunities to African immigrants, went on a bloody rampage that accounted for at least seven people and dozens of injuries.

Pictures and footage of the bloodied victims with deep gashes to all parts of their bodies or writhing in agony as flames consumed them or literally being stalked and stabbed to death by their persecutors, raised an international uproar.

Understandably the roots of this flare up are driven by the deep economic fissures in South African society, a legacy of almost half a century of apartheid policies, which denied Africans access to land, suppressed their wages to make mining and industry more  profitable and allowed them less than basic social services.

"The net effect of these policies continue to reverberate through society two decades after majority rule was adopted....

In negotiating this new dispensation, former President Nelson Mandela and the African National Congress (ANC) were well aware of the economic divide. A divide particularly galling for the black South Africans because it was a situation that did not come about by mistake but by design.

In fact the enormity of the task to even up society must have been at the back of Mandela’s mind when he said, “After climbing a great hill, one only finds that there are many more hills to climb.”

As it is after 20 years in power the ANC has barely dented the huge inequality they inherited from the white minority government.

According to Statistics South Africa, the unemployment rate stands at 24.3 percent with blacks bearing the brunt of these woeful statistics with nearly three in ten blacks between 15 and 64 years jobless.

In addition white capital controls 70 percent of all land in the country, a figure largely unchanged from 1994 when Pretoria embarked on a distribution policy that despite the great demand has stuttered badly missing all targets.

The idea to maintain the status quo after 1994 albeit with an official determination to redress the inequalities, was a good one but the execution has fallen way short of expectation.

The idea was, instead of dismantling the white grip on the economy, let the most developed private sector in Africa continue doing what it was doing – creating wealth, and through official and moral intervention begin a process of redistribution while not upsetting the apple cart will ensure the resources needed to finance education and other social services and develop infrastructure into the marginalised rural areas.

However the execution of this project run into two major shortfalls.

One, that the philosophy that grew this immense wealth did not go away with the ascendance to power of the ANC. Through a combination of inertia and deliberate subversion --- including co-opting a new politically connected black elite, the redistribution was slowed or even halted.

Secondly, the growing corruption among the black elite means that resources are once again being concentrated in a few hands rather than being spread out to the majority.

Education, health and infrastructure necessary to improve opportunities for the majority blacks are qualitatively poor even for newly developed projects as public officials have corrupted the procurement process and paid little heed to value for money.

The combination of a legacy of inequality, being perpetuated by an increasingly corrupt bureaucracy whose members are not averse to flouting their new found wealth around their poorer cousins was always going to be a recipe for disaster.

They say revolution or upheaval does not come from poor conditions but more from unmet expectations, the bloodletting --- while unjustifiable, is an expression of this disappointment and sense of betrayal.

"Stranger things have happened but South Africa going the way of Zimbabwe is, after the recent spate of bloodletting, not too farfetched a prospect....

The forceful redistribution of land was a last gasp effort by a growingly unpopular government to stave off the pressure of opposition. Cloaked as an economic solution by gutting Zimbabwe’s industrial class Robert Mugabe brought the economy to its knees, suffering the ignominy of abandoning the hyperinflated, local currency for the US dollar in effect surrendering his country’s monetary policy.

They say nationalism is the last resort of the scoundrel. It is not unthinkable that with its waning popularity and its back against the wall the ANC may resort to such underhand methods to hang on to power.

Now that would be one more thing for Mandela to turn over his grave about.

INDIA, SOUTH AFRICA A PEEK INTO OUR DEMOCRATIC PATH

In recent weeks India and South Africa have gone to the polls the outcomes similar in that they were widely expected but different in what they say about the progression of their democratic paths.

In South Africa the African National Congress (ANC), despite serious questions about their ability to create jobs, deliver services and endemic corruption won comfortably with more than 60% of the votes cast.

In India the Bharatiya Janata Party (BJP), won the elections locking in an absolute majority in parliament, done for the first time in 30 years by any party in India and relegating the dynastic Congress Party to a miserly 44 seats in the house.

The BJP, pummelled before the poling day as everything from dangerously nationalistic to a sectarian party, benefited from the record of its leader Narendra Modi, who as governor of the Gujarat state has the most enviable development record of all his peers. His record suggests that he can jumpstart the stuttering economy of the world’s largest democracy and raise the everyday man’s collective lot.

Modi beat to the post Rahul Ghandi, scion of a political dynasty that was at the heart of the con try’s independence struggle and given India three prime ministers.

"By relegating the Congress Party to a bit player in Indian politics – they lost 162 seats they previously held,  for the first time since independence in 1947, the BJP may have changed the complexion of the Indian politics for good...

.

So in India’s case it was the end of an era – the electorate feels less and less beholden to the Congress Party for its central role in the independence struggle, while in South Africa, the momentum from the anti-apartheid struggle that ended 20 years ago, remains strong. While they may have shed a percentage point or two observers believe it will be a while – a long while, before any other party will put up a credible challenge to the ANC’s stranglehold on the politics of Africa’s second largest economy.

The ejection of the Congress Party from the centre of politics in India provides useful pointers as to the eventual trajectory of politics in South Africa and by extension Uganda.

The Congress party’s stranglehold on the country’s politics – it has led the country for 49 of the 67 years of an independent India, has with time been eroded by the increasing dysfunctionality of its governments, which have become increasingly mired in bureaucratic red tape and corruption, powerless to effect any meaningful change for the majority of Indians who look across the border to China where Beijing is lifting tens of millions out of poverty every year.

"The inertia is an inevitable consequence of longevity. With every passing year ruling parties have to make unpalatable concessions and accommodate unsavory types, who bog down the system as they in turn, seek to guard their own interests to the detriment of the many....

While the ANC’s planners are in jubilant mode the Congress Party’s fate must weigh on their mind. Thousands of housing units have been built, school enrollments are up, the roll out of health facilities to the poor has been breath taking but the legacy of apartheid will not be wished away in a few years or even a generation.

It does not help that a black super-rich class, leveraging their connections in high places, has arisen to create their own unjustifiable wealth divide within the black community, that is making some question whether the struggle against apartheid was meant to replace one overlord class with another.

"It might take the ANC considerably less than 67 years to pay for their continued failure to meet post-apartheid expectations....

The emergence of the BJP as a counter force to the Congress party in 1980 may serve too as an indication of what kind of counter force ruling parties may encounter in later years.

A party that galvanises the disadvantaged, which counter to economic liberalism espouses some brand of socialism and which can appeal to majority groups who have grown disenchanted with the ruling elite is the probable  complexion of the party that will give the ANC planners sleepless nights.

In the BJP case they went a step further, taking control of regional governments, making them work and delivering tangible results for the everyday man.

"The BJP in its current form came into being 33 years after independence suggesting that the issues around which they have rallied had not matured yet or the leadership to consolidate these issues into a winning platform had not emerged....

The BJP’s success is raising interesting questions about geopolitical alignments internationally.  But for us, Indian politics and the developments in South Africa can provide useful lessons when overlaid on our own local politics.