Showing posts with label geo politics. Show all posts
Showing posts with label geo politics. Show all posts

Wednesday, May 27, 2026

THE GREAT REPOSITIONING: MUSEVENI TAKES BACK TOTAL CONTROL OF THE TRANSITION

The most interesting thing about President Yoweri Museveni’s latest cabinet reshuffle is not simply who was promoted or dropped, but what the changes reveal about the political moment Uganda has entered. These are not ordinary administrative adjustments. They increasingly look like positioning moves in a carefully managed transition process where the central question is no longer whether succession politics are underway, but how they are being choreographed — and who controls them.

One striking detail immediately stands out: 28 ministers did not return to cabinet. That is not cosmetic pruning. It is significant political surgery.

"The removal of such a large bloc of ministers signals a deliberate attempt to recentralise authority around Museveni himself after several years in which competing power centres had begun emerging within the ruling establishment. Most notably, the sidelining of Anita Among dramatically changes the internal balance of power.

For a while, Among had evolved from merely a parliamentary leader into a formidable political actor in her own right — building extensive patronage networks across MPs, cultivating financial leverage and increasingly appearing as an autonomous centre of political gravity. The recent corruption scandals surrounding Parliament, culminating in public outrage over elite excess, weakened that project considerably.

With Among politically wounded and many of her allies displaced, Museveni now appears firmly back in control of the transition process. The reshuffle feels partly like a reassertion of presidential authority over a ruling coalition that had started developing too many independent ambitions.

Why Alupo Suddenly Matters More

To understand the deeper logic of the reshuffle, one has to begin with an often-overlooked constitutional fact: under Uganda’s Constitution, the Vice President is the formal successor mechanism should the presidency unexpectedly fall vacant. That suddenly makes Vice President Jessica Alupo’s continued prominence politically interesting.

Alupo is not merely a civilian politician from Teso balancing regional arithmetic. She is also a retired Major in the UPDF and previously served in the Special Forces Command (SFC), the elite military unit over which Gen. Muhoozi Kainerugaba built his influence and from which much of Uganda’s contemporary military power structure has evolved. Muhoozi is now the Chief of Defence Forces (CDF), effectively sitting atop the country’s formal military hierarchy. 

In ordinary political times that detail might seem incidental. In transition politics it becomes enormously consequential.

It suggests that the formal constitutional succession line and the informal security architecture are increasingly being aligned rather than left to chance. In many African political systems, transitions become unstable when constitutional authority and security power centres diverge. Museveni appears determined to minimise that risk.

The Defence Ministry as Political Insurance

Kiryowa Kiwanuka’s move from Attorney General to Defence reinforces that interpretation.

Defence in Uganda is not merely a military docket. It is political insurance. Whoever controls the security architecture controls the pace and stability of any transition process. Kiryowa is not a bush-war historical figure or battlefield general. He is a corporate lawyer, politically disciplined and deeply embedded within the President’s inner trust networks.

Those trust networks themselves are revealing.

Kiryowa is law partner to Edwin Karugire, Museveni’s son-in-law, in one of Kampala’s influential legal practices. Their relationship stretches back decades. They were in the same class at King’s College Budo and later studied together at Makerere University’s law school — ties that speak to how Uganda’s ruling elite has long functioned through tightly knit educational, social and familial networks.

Kiryowa first came to national prominence as part of the legal team that defended Museveni’s contested 2001 electoral victory. In other words, his rise has long been intertwined with the regime’s political survival architecture itself. 

The Karugire connection goes even deeper historically. Edwin Karugire’s father, the late historian Prof. Samwiri Karugire, was one of western Uganda’s most influential intellectuals. Following his death, his children were in many ways absorbed into the extended Museveni family orbit. The relationship between the Karugires and the First Family is therefore not merely political. It is deeply personal, historical and generational.

Seen through that lens, Kiryowa’s appointment to Defence is less surprising. Museveni appears to be placing strategically sensitive institutions into the hands of people bound not simply by political loyalty, but by decades-long personal relationships forged through family, school, history and shared political battles.

That is classic transition-era behaviour.

Sam Mayanja and the Coming Legal Battles

Sam Mayanja’s appointment as Attorney General is equally revealing, though in a different way. Mayanja is intellectually combative, ideological and deeply invested in constitutional and historical debates. He is not a cautious technocrat. He is a political lawyer.

That may indicate government expects sharper legal and constitutional contests ahead — over elections, political settlements, land and perhaps even succession questions themselves.

Yet Mayanja’s temperament also introduces risk. Attorney General requires institutional restraint and legal steadiness. Mayanja thrives in ideological confrontation. In a politically sensitive period, that can either energise the regime intellectually or unnecessarily inflame tensions.

Ayebare, Kagame and the Rwanda Question

Adonia Ayebare’s appointment as Foreign Affairs minister may be the strongest technocratic choice in the reshuffle. Ayebare is internationally respected, diplomatically sophisticated and deeply networked within multilateral systems. 

Ayebare is also a former journalist, a background that gives him unusual communication instincts for diplomacy. He understands both narrative management and international perception — skills Uganda increasingly needs as succession politics intensify.

Equally important, Ayebare has historically maintained relatively good personal relations with Paul Kagame. That matters enormously given the simmering tensions between Kampala and Kigali over the last two decades.

Relations between the two countries effectively went to pieces in the Democratic Republic of Congo at the beginning of this century, where the former allies found themselves backing rival interests during the Congo wars. Although relations have improved recently, mistrust still lingers beneath the surface.

Ayebare’s appointment therefore appears designed not merely for global diplomacy, but also for regional stabilisation. He is likely to complement Muhoozi’s increasingly visible efforts to engineer détente with Kigali. Muhoozi himself has often projected unusually warm public messaging toward Rwanda and Kagame compared to the harder nationalist rhetoric that occasionally emerges elsewhere within Uganda’s establishment.

In that sense, Foreign Affairs may now become part of transition management too. Stable relations with Rwanda reduce one major external variable during a potentially delicate succession period.

Katumba’s Quietly Strategic Move

Then there is Gen. Katumba Wamala’s move from Works and Transport to Public Service. At first glance it looks like a demotion. Works is politically visible; Public Service is bureaucratic and low glamour.

But in transition periods, bureaucratic control becomes critical.

Public Service determines appointments, promotions and administrative discipline across the state. Katumba’s reputation as a calm, loyal stabiliser trusted across military and civilian divides may make him particularly useful in keeping the state machinery cohesive during an uncertain political period.

Museveni the Guerrilla Still Keeps Us Guessing

Still, one must be careful not to overstate the certainty of these interpretations.

Museveni is, at his core, a guerrilla strategist. One of the defining characteristics of guerrilla warfare is deception — keeping opponents guessing, masking intentions, creating multiple centres of gravity and never fully revealing one’s endgame. Throughout his political career Museveni has shown an extraordinary ability to play his cards close to his chest, often allowing observers to confidently misread his intentions.

That means all these interpretations may ultimately prove to be sophisticated misdirection. The apparent alignment of constitutional succession, security structures and trusted family networks may be deliberate signalling — or deliberate distraction.

Museveni has survived politically precisely because he rarely moves in straight lines.

Yet even with that caveat, the reshuffle unmistakably suggests a leader thinking carefully about continuity, stability and regime preservation in an uncertain future. Whether by design or instinct, he appears to have covered most of the critical bases if something untoward were to happen tomorrow.

The constitutional line is secure. The military hierarchy is tightly aligned. Trusted loyalists sit atop strategic ministries. International diplomacy is in experienced hands. Bureaucratic management is under dependable figures.

The Opening Moves of Uganda’s Next Era

The broader signal from the reshuffle is therefore that Uganda’s political system is quietly reorganising itself around a future beyond Museveni while publicly insisting that no transition conversation exists. That contradiction is becoming harder to conceal.

This cabinet increasingly resembles a structure designed less for routine governance and more for continuity management — aligning constitutional succession mechanisms, security structures, diplomatic messaging and elite trust networks into a coherent political insurance framework.

The irony, however, is that transition management itself can accelerate transition pressures. Once elites begin positioning for a post-Museveni order, politics subtly changes. Loyalties become conditional. Bureaucracies become cautious. Security calculations become layered. International actors begin hedging their bets.

That may explain why this reshuffle feels less like the beginning of a new government term and more like the opening moves of Uganda’s next political era.

Tuesday, January 6, 2026

VENEZUELA AFTER MADURO: WHEN EXTRACTION EMPTIES LEGITIMACY

The US' weekend arrest and extradition (Abduction?) of Venezuelan leader Nicolás Maduro landed  with the force of history breaking through the door. 

Legal outcomes will be contested, delayed, and politicised, but the symbolism is already set: a regime that ruled as an extraction cartel rather than a national steward has finally run out of road. For many Venezuelans, this moment is not about court filings; it is about a long-denied reckoning.

Venezuela did not unravel because of one doctrine or one foreign adversary. It collapsed because power mutated into entitlement. Oil rents stopped financing institutions and started feeding patronage, secrecy, and personal accumulation. The state ceased to arbitrate fairly and began to loot efficiently. Once that happened, trust evaporated, incentives died, and the social contract dissolved.

The testimonies pouring out of Venezuela—some gathered and archived on Shillings & Cents 

are not ideological pamphlets. They are grief accounts. Endless food lines. Businesses nationalised into extinction. Imports choked. Production shattered by price controls. Savings erased by inflation. Families fragmented by migration. This was not a slow decline but a violent one. A functioning, if imperfect, economy imploded with shocking speed once extraction became the organising principle of governance.

When ruling cliques turn countries into resource pits, sovereignty hollows out from within. Consent drains away. Power becomes brittle. And brittle power invites outside pressure. Venezuela’s exposure to what critics deride as an American “cowboy adventure” is not an accident of geography or conspiracy; it is a domestic product of years spent alienating the very population that grants legitimacy.

This is not a Venezuelan anomaly. In North Africa, similar dynamics played out. 

In Egypt, Hosni Mubarak learned that decades of patronage and security-state dominance could not survive the withdrawal of street consent. In the Maghreb, extraction politics and gerontocratic entitlement hollowed regimes until public patience snapped, an arc associated regionally with figures like Tunisia's Abdelaziz Bouteflika, whose fall underscored how quickly legitimacy can evaporate once rulers appear to exist only for themselves.

Libya's Muammar Gaddafi mistook oil rents and bravado for immunity. Mobutu Sese Seko ran a country like a personal vault. Robert Mugabe hollowed out production while elevating loyalty over competence. Each believed wealth, coercion, and rhetoric would outlast consent. Each was wrong. When extraction severs the bond between ruler and ruled, the end is rarely dignified.

Venezuela also punctures the romance of “alternative” patrons. China, Russia, and shadowy intermediaries did not rebuild; they extracted. Anti-Western language proved no substitute for maintenance, investment, and competence. Extraction without reinvestment is looting with better branding, and Venezuelans felt the outcome in empty shelves and darkened hospitals.

This brings us to the uncomfortable present. 

Any renewed involvement by the United States will not be a silver bullet. Washington’s record elsewhere gives no credible reason to expect tidy outcomes or benevolent miracles. Interventions carry costs, contradictions, and unintended consequences. Yet there is a deeper, sadder indictment here: when a local population would rather gamble on foreign intrusion than endure domestic rule, the failure lies squarely with the ruling elite. It is an extraordinary moral collapse when citizens welcome outside pressure because it feels like the least bad option left.

For people who have lived through institutional collapse, pragmatism displaces purity. If refineries are rebuilt, infrastructure repaired, imports reopened, and people allowed to work and earn with dignity, hope returns—not because the arrangement is perfect, but because something finally functions. Functionality, after years of trauma, is not a slogan; it is survival.

The lesson reverberates far beyond Caracas. States are not mines. Nations are not ATMs. When leaders gorge themselves at the trough of public resources, they alienate the people and hollow out sovereignty. And when the brown stuff hits the fan, no offshore billions, foreign friends, or security cordons can compensate for lost consent. Power without legitimacy holds—until it doesn’t.

Tuesday, July 1, 2025

BOOK REVIEW -- THE LEXUS &THE OLIVE TREE VS CHIP WAR





I recently read ChipWar by Chris Miller — a riveting account of how the semiconductor became the world’s most important technology and, by extension, the nerve centre of 21st-century geopolitics. As I turned the pages, I couldn’t help but contrast its thesis with that of Thomas Friedman’s The Lexus and the Olive Tree that I read about two decades ago.

Reading the two side by side, one gets a sense of how the world has changed — and hasn’t. Friedman was writing at a time when the buzzword was “globalisation,” and there was a kind of religious conviction that the market, the internet, and capital flows would knit the world into a single prosperous village. That vision now feels quaint, almost naïve. Miller’s narrative, meanwhile, is one of choke points, technological bottlenecks, and the fragility of interdependence.

The two are particularly interesting in understanding the happenings in the Middle East, I think.

Friedman’s “Lexus”, which name I recently learnt was an abbreviation for “luxury export to the US”,  was the symbol of progress: high-tech, efficient, and global. His “Olive Tree” was the reminder that identity, culture, and history still matter — and often collide with the Lexus in unpredictable ways. In Gaza, in southern Lebanon, in the Red Sea, we are witnessing just such a clash. The global supply chain hums along, until it hits a blockade — metaphorical or literal — thrown up by actors who feel excluded or endangered by the global system.

Friedman’s hope was that the gravitational pull of the global economy would discipline states and societies into predictable behaviour. You don’t throw rocks at the Lexus showroom if you’ve got one parked in your garage. But as the current crisis shows, not everyone got the Lexus, and the Olive Tree has deep roots. In fact, the more globalised the world has become, the more some have doubled down on identity, resistance, and sovereignty.

Where Friedman saw a flattening world, Chris Miller sees a world stratified by silicon — specifically, the chip. Chip War

argues that semiconductors are not just components of technology but weapons of statecraft, economic leverage, and military dominance. The entire global system runs on chips — from AI and cloud computing to missile guidance and cyber surveillance. And crucially,
no one country controls the whole supply chain.

The Middle East, too, is entangled in this chip narrative. Iran has been desperate to circumvent sanctions by building its own tech capacity. Israel’s dominance in drone technology, cyber tools, and precision warfare depends on cutting-edge chips. The Gulf states, meanwhile, are investing in AI and digital infrastructure as part of their post-oil futures. And yet, almost none of them can produce the chips they need. They are at the mercy of a fragile, globally dispersed supply chain — one increasingly weaponised by the likes of Washington and Beijing.

The chip is the new oil — but it’s even more volatile.

Take the Houthis in Yemen. A militia with rudimentary drones has managed to disrupt global shipping in the Red Sea, sending freight costs soaring and rerouting traffic around Africa. It’s a vivid example of what Miller and Friedman both recognised in different ways: globalisation has empowered non-state actors in unprecedented ways. The Houthis don’t need to hold a capital city to project power; they just need a drone, a grievance, and a global market to disrupt.

And the consequences aren’t confined to the region. A spike in insurance premiums in the Suez Canal or a supply delay for Taiwanese chips affects the global economy. The butterfly effect of a regional flare-up now has boardroom and battlefield consequences from Frankfurt to Free Town.

This fragility — what Miller calls “the bottleneck economy” is the reality we now inhabit. Whether it’s ASML’s lithography machines in the Netherlands, or Taiwan’s TSMC factories, or Israel’s tech corridors, the supply chain that undergirds the global economy is a high-wire act. And when tensions rise in the Middle East, the whole system wobbles.

What both The Lexus and the Olive Tree and Chip War remind us is that power is no longer just about tanks and territory. It’s about networks, chips, and narrative. And the Middle East, long seen through the prism of oil and ideology, is now a front in the battle for technological and supply chain supremacy.

But to me, perhaps the deepest insight comes from the contrast between the two books. Friedman saw a world where prosperity would temper politics. Miller shows us a world where technology is politics. And in the Middle East today, the Olive Tree hasn’t been uprooted — it has simply grown into the data centres, missile batteries, and AI command rooms of the region’s new power players.

The old conflict over identity, territory, and belief now plays out with silicon and software layered on top.

In the end, the question is not whether the Lexus can outrun the Olive Tree, or whether chips will replace bullets. It is whether we are ready to govern a world where both coexist in a deeply unstable equilibrium. A world where prosperity and progress are still possible — but only if we understand the new rules of power.

And those rules are being written — in code, in silicon, and increasingly, in the sands of the Middle East.

For a small, pre-industrial country like Uganda, the lessons from Chip War and The Lexus and the Olive Tree

are both sobering and instructive. In a world where technological supremacy defines geopolitical clout and where global supply chains are both opportunity and threat, Uganda must recognise that digital sovereignty and data infrastructure are the new frontiers of development and security. While we may not build chips, we must invest in local talent, protect digital infrastructure, and strategically align with global tech blocs.

In a world ruled by chips and chokepoints, staying non-aligned is not a strategy. It’s a vulnerability. Uganda must leapfrog wisely—choosing the right alliances, building digital capacity, and anchoring the Olive Tree in the soil of a fast-changing global order.

 

Monday, March 7, 2022

IN THE RUSSIA-UKRAINE WAR COMMUNICATION IS EVERYTHING, NATURE ABHORS A VACUUM

podcast here

Leading up to the first gulf war when the US and its allies first attacked Iraq in 1990 the western media bent over backwards to show how deadly Saddam Hussein was and hence the justification for his removal.

They consistently touted Saddam’s battle hardened army – it had just been in an eight-year war of attrition with neighbour Iran and his 400,000-strong republican guard, which was disciplined, well trained and sophisticated.

On later thought we laugh that Saddam must have been reading the western press and wondering whether they were talking about him, because before we could reach for the popcorn General Norman Schwarzkopf’s troops had reached the gates of Baghdad and the war was effectively over.

Later reports were that the US and its allies in some places found soldiers armed with nothing but pitchforks.

"It took a second war, a decade later – with a new narrative about the fictitious weapons of mass destruction, to dislodge Saddam and send Iraq back to the dark ages....

As I see the noise around the current war in Ukraine, I cannot help going back to that first gulf war three decades ago.

With the benefit of experience, I now see that Saddam’s major failure was his inability to win the communications war. All the international media houses, including at that time, the fresh-out-of-the-box CNN were western controlled and dominated the narrative. In a time before the internet, their narrative of events is all we swallowed.

In communications training I always insist that when you are operating in a vacuum, that is little to nothing about your enterprise is being communicated, the vacuum will be filled and more often than not to your detriment. If you are a serious player, you have to ensure that vacuum does not exist, you have to populate it with your message, so when the fight comes you have a foot to stand on.

So Vladmir Putin, who the west have demonized –  I have heard him referred to as a thug in certain sections, is suffering Saddam’s problem. His story is being written for him and not by his friends.

The former KGB boss probably is not surprised by all this firestorm of negative press and has probably factored it into his calculations, despite what the western press says. But he might learn or already has that the “manufactured consent” that has been created by the western media means he will get little to no sympathy from everybody else leaving Russia open to all sorts of attacks and a very uncertain destiny.

He is at a disadvantage. The number of people who can speak Russian outside of Russia can be counted on one hand.

"Which in hindsight makes the colonial project a work of genius. Apart from extracting raw materials from the colonies at dirt cheap prices to fuel their industry, they ensured a critical mass of people spoke English. About one in five people on the planet now are English speakers and this number is growing as they teach English in schools today around the world as a matter of routine.

So when the western propaganda machine swings into action it has almost two billion malleable minds paying attention.

The old saying that sticks and stones may break my bones but words cannot is due for a readjustment.

Does the fact that Russia feels threatened by its enemies, the North Atlantic Treaty Organisation (NATO) pushing to set up camp at its border in Ukraine, count for nothing? That Russia sees itself being squeezed into nothingness, the end game in the cold war, with real consequences for that nation, does this count for nothing? Never mind that a unipolar world, never mind how benign the single power seems to be, will not be good for anyone.

Putin may as well be howling into the wind, we are not listening.

I never know whether to laugh or cry at how our companies and countries continue to treat the communications function as something to endure with gritted teeth rather than embrace as a key function in achieving their strategic objectives.

Many labour under the biblical saying “That we will be known by our good works”. In a world where information is moving faster and faster, that assumption is seemingly more and more dated, leaders and managers need to, no, must communicate.

The thing is, communication is not as sexy as big procurement deals or commissioning big plants or juicy promotions. Communication like everything in life works by compounding, small moves made frequently and consistently build up to improved perceptions and associations. The challenge of course is the better you communicate the less it seems important, but when the crisis comes you will have built enough momentum to ride it through...

Russia possibly has cutting edge military technologies and I believe they will make significant gains on the battlefield, but the war of perceptions has been lost and will very well determine whether they have a pyrrhic victory or not.

Which reminds me of the top NSSF official, who when the organization was getting bad press for the Nsimbe Estate scandal about 20 years ago, innocently said they felt no need to communicate all the good plans the Fund had because people would see for themselves. Needless to say he is no longer at NSSF and his good reputation did not survive the scandal.

 


Monday, December 13, 2021

BOMBS ON ADF AND THE LARGER QUESTION OF REGIONAL INTEGRATION

Two weeks ago our own Uganda People’s Defence Forces (UPDF) attacked Allied Democratic Forces (ADF) bases in eastern Congo.

Reports had it that the artillery and airstrikes were concentrated on an area of about 150 square kilometers. The ADF cannot have enjoyed the experience and while news is scanty, given the area that was flattened fatalities must have run in dozens never mind casualties.

Unfortunately, the operation is open ended with no time frame set to pacify an area, mostly dense tropical forest, bigger than the whole of Uganda.

The repercussions on our budget will be negative but we have to trust that this is a sacrifice we have to make with the long term in mind.

"For starters the security threat that the ADF pose cannot be overemphasized, but even more important is the security threat of having huge lawless, ungovernable areas bordering us. If it is not the ADF it will be someone else who has evil intentions on us using the Congolese jungles as his launch pad...

It does not help that there are more than 1 hundred armed militia’s roaming the area praying on the population and one would imagine happy to sell their “expertise” to the highest bidder. The emergence of these militias is not all down to criminal intent. In an area where the state has been absent for coming to half a century people have to protect themselves and sometimes in so doing they may just decide to prey on weaker neighbours and soon there is a full scale arms race in the area. And what is to stop them one day cross our imaginary borders and attacking on Ugandans?

The sustainable thing to do is to bring the area under some kind of central control by force initially, which should have been the job of Kinshasa but more importantly by creating an environment in which economic activity can flourish.

Sustainable peace comes from interdependence. Trade is right up there as one of the best ways to create interdependence. When we have no mutual benefit to ourselves war and predation become a real possibility.

So the collaboration with the Kinshasa to improve the road network in eastern Congo is actually what we should be focused on. Any military victories will be temporary but making movement in the area easier is not only useful from a security perspective but will automatically encourage the movement of people, goods and services.

An interesting story from the Mobutu Ssese Seko era explains why DRC – larger than western Europe, has less tarmaced roads than Uganda. During a state visit to neighbouring Central African Republic, then president Jean Bedel Bokassa drove Mobutu through wide, tree lined streets to his palace. At some point Mobutu, who was supposed to be impressed by this show of development, couldn’t hold it any longer, “My friend these goods roads of yours are how you will be overthrown!” he said.

This egocentric thinking has doomed the DRC to confusion and poverty.

"As it is now DRC and mostly the eastern expanse is fast becoming Uganda’s largest trading partner accounting for up to $400 million in exports. We have seen in our own lifetimes how little tarmac can totally change the economy of neighbourhoods and regions....

The 200 km of paved road that we shall help build in the region are just a tip of what is necessary to unlock the vast potential of that region and may very well serve as a useful stimulus for our economy to rebound in coming years.

If in these times when roads are not usable year around we are doing almost half a billion dollars in trade it is conceivable that we can more than double that with the most basic of road infrastructure in place.

Improved economic activity in the area will make joining up in militias less attractive and once the communities have tasted peace and stability will be loath to support any militias.

"Of course for the DRC they have to step up. Uganda’s presence is at best temporary, we would rather have our sons and daughters back home than roaming the jungles of Congo with a target on their backs....

Which brings us to the wider question of regional integration. It starts with recognizing that our borders, really only lines on paper, do not insulate us from the poverty and underdevelopment on the other side. That shared prosperity of first border communities and then whole regions is how will keep our worst excesses from consuming us all.

If it takes a handful of disheveled types running around playing war, to quicken the cause for integration so be it.

 

 

Tuesday, September 14, 2021

AFGHANISTAN AND THE FOLLY OF FOREIGN INTERVENTIONS

It has been almost a month since the US government made good on their intention to cut their losses in Afghanistan and flee the central Asian hellhole.

It will be 20 years tomorrow since terrorists – Mostly from Saudi Arabia, flew into the Twin Towers in the New York and the Pentagon to trigger the “War on Terrorism”. At the time the Talban were in control of Afghanistan and suspected of aiding Osama Bin Laden, the mastermind of the 9/11 attacks.

US President George Bush wasted no time in not only setting the cross hairs on Kabul and cobbling together a coalition of nations to invade Afghanistan, topple the government there and bring Bin Laden to justice. At least that is what he told the world. A claim, which came under question when he decided to throw Saddam Hussein’s Iraq in the mix under the pretext that he had weapons of mass destruction.

Bush declared victory in Iraq but not Afghanistan, his successor Barack Obama got Bin Laden and it was left to Donald Trump to negotiate an exit plan and current president Joe Biden to execute that plan.

Thankfully the US has not tried to claim victory in Afghanistan. It would be a pyrrhic victory if they did – it cost 170,000 lives and $2trillion dollars. While the US has emerged smelling more of manure than roses, a few billionaires have built their fortunes upon the rabble of Afghanistan...

It was always going to be a clumsy close to this chapter of US history. This had been their longest war the US has fought , the duration meaning they had put down some semi-permanent roots that could not be uprooted at a moment’s notice. As a result, they have had to evacuate many of their collaborators and support them for the foreseeable future at great cost to the blissfully ignorant US taxpayer.

Whichever way you look at it, this a misadventure, like Vietnam, the US will be anxious to put behind them as soon as possible.

Analysts have in past weeks mulled over why the US had to beat a hasty and messy retreat from Afghanistan, even if it was to great embarrassment to themselves.

Some thought in the current depressed global economy it is an expense they can barely afford – they spent $300m daily to execute the war; some think that it was a distraction from trying to contain China, which over the last two decades has grown to be the second largest economy after the US and threatening to overtake it within the decade; the more charitable ones think the US has seen the error of its way and this signals an end to their meddling ways abroad.

That last one should be dismissed out of hand, if only because the US has the world’s largest military industrial complex that has to be kept sated – the US’ defence budget is larger than the combined budgets of the next 11 biggest defence spending countries.

I think the first reason that the war was too expensive, falls on its face in the light of the huge military industrial complex’s needs.

There will always be money for war especially if it supports local industry. Bullets don’t rot on the shelf, they need to be used to be replaced....

Which leaves us with the China question. Before our very eyes China has risen from the ashes of Mao Tse Tsung’s cultural revolution to challenge US in economic might and world influence. After the collapse of the USSR in the 1980s and 1990s the US became the unchallenged super power, running rough shod over everybody else with their liberal economy and multi-party democracy prescriptions for all the world’s ills.

Now China has inserted itself into the vacuum, which came as a surprise, not because the US never saw it coming than out of arrogance, the thought that the Chinese would never amount to much.

Bombing Afghanistan into the stone age, while a lucrative distraction had to be put on hold to contain China, which is flexing its muscles – literally and figuratively in everywhere from the South China Sea to Africa and Europe.

I tend to believe this last theory more. After the better part of a century playing big brother in the world, the US would not know how to or countenance playing second to a resurgent China.

So in coming years look out for more economic wars with China – Trump was just the beginning; proxy wars – the US does not go to war with a country it can’t win against and invariably a new world order – fundamentalist terrorism will fade into the background, with the US and China playing the elephants and the rest of us serving as the hapless grass.

Monday, February 22, 2021

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!



Thursday, December 10, 2020

IS IT TIME FOR UGANDA TO REMOVE THE KID GLOVES?


Last week the Uganda Manufacturers’ Association (UMA) complained that unfair trade practices by our East African Community (EAC) were proving detrimental to our local businesses and that government should muster a more robust response than it has currently managed.

According to UMA, Uganda which has served as a market for Kenyan industry for decades is finally coming into its own, seeking to not only manufacture things we previously imported but also to export the products of our factories.

However, they complain that while EAC common market guarantees the unfettered free movement of goods and services between member states our neighbours are not playing ball.

Kenya for instance continues to throw up non-tarif barriers – questioning the origins of our goods, they claim they are counterfeit, smuggled, there is institutionalized  harassment of Ugandan trade, road blocks and raids on Ugandan warehouses and issuance of quotas, all of which are against the spirit of the common market.

UMA complains too that frequent tariff tampering by Tanzania and the border closure by Rwanda has shrunk their share of regional trade.

"These are important complaints that need to be taken seriously in the context of our drive to transform the economy and eliminate poverty...

At the heart of the idea behind the common market was that it would boost our individual industries, create jobs and spur economic transformation. When some countries thin they would rather be protectionist rather than open the cause will be lost.

That being sad this kind of shenanigans are not unique to us. Building common markets is a labour of love that takes ages to create anywhere  in the world.

However, there is a genuine need to speed things along.

It seems Uganda is getting the short end of this stick. While diplomatic protests have been made to the offending parties they seem to ignore them.

President Yoweri Museveni, for who this has been his pet project for decades, should jump into the fray and try and get his counterparts to orgainise their technocrats and enforcers.

"And if we cannot rely on the goodness of the hearts of our neighbours, though not desirable, restricting their access to our markets must be considered until we get an amicable settlement


Monday, May 11, 2020

UGANDA DAIRY FARMERS CAUGHT IN KENYA, UGANDA CROSSFIRE

Since the end of last year dairy farmers in western Uganda have lost a major market of their produce as Kenyan authorities have locked out Ugandan milk.
The closure of the Pearl Dairy plant in Biharwe, along the Masaka-Mbarara road, in February has seen demand for milk collapse in Masindi in the west, Kabale in the south west and Isingiro in the south.

"In our area alone at least 1000 liters go to waste daily which has a downward effect on the pricec of milk in the Mbarara and Kiruhura areas, the price has fallen to sh200 from sh800 per liter last year," David Mwine the chairman of the Rukaka Savings & Credit Cooperative Society and a  dairy farmer in his own right.


"The whoe of this region is experiencing losses because farners can not meet their operational costs and are demoralised by the prices of milk. We dont have someone to buy the milk and we are giving it away free."

This is sad state of affairs for the region and the country.
Pearl Dairy's business model is to export up to 90 percent of its production, mostly to Kenya and sell the remainder locally. Its other markets are Rwanda, before the border closure a year ago and the Democratic Republic of Congo.

This has come about because in Uganda, due to lax regulation only about a quarter of all milk produced is processed. In Kenya not only is milk consumptrion more than triple that in Uganda -- 140 liters versus 40 liters per person annually, there is a higher demand for processed milk, more than two thirds of the market is processed milk.


Overt the last three years Pearl Dairy has made significant in roads into the Kenyan market and as of last year, accounted for about a quarter of the milk market in Kenya.

Trouble begun at the end of last year when Kenyan authorities impounded Pearl Dairy's milk claiming it was counterfeit and turned back several of their consignments.

The Uganda government complained to their Kenyan counterparts and a 19-person Kenya team visited the country to ascertain that Uganda producecs all it exports, but the impasse has not been broken.

Hence the Biharwe factory's closure in February.
The ripple effect in the communities that supply the Pearl Dairy has been devastating.

Over the last two years of Pearl Dairy's operaion in the area, through their own extension services, some farmers increase more their yields to 11 liters a day per cow frrom the previous five liters. All this through better managment of their existing herds.

"We have been able to learn best dairy practices. I used to be pastoral farmer, grazing my cows over large areas, i no longer do that and my farm is now a commercial enterprise, my income frrom milk has gone up a lot," Raymond Kaweesi, a pioneer beneficiary of this initiative said.

He has been able to share the learnings and many farmers in his area have seen their fortunes improve as a result.
Pearl Dairy extension services reach more than 600 farms.

"This ecosystem of farmers, traders and transporters built to support the 800,000 liter a day plant, is in danger of being broken up....


"Some farmers have already slaughtered their herds and sold them for beef. Imagine what it will take to get the back into production? Not only in terms of money but also lost trust," a regional leader wondered on condition of anonymity.

It is not clear what the  problem is in Kenya.
Reports last year were that dairy darmers in Kenya had seen their farm gate pricecs falling signficantly as a result of the aggressive Ugandan entrants.

Existing big interests in the Kenyan market then decided to use underhanded methods to frustrate Uganda processors. They are clearly very powerful interests as no official communication has been forthcoming about Uganda dairy exports.

This is a blatant breach of East Africa Community protocals that allow for the frfee movement of goods and services around the five countries, that Nairobi is unwilling or unable to enforce in the case of dairy exports.

The dairty of western Uganda find themselves caught in the middle crossfire that is none of their making, that threatens to derail Uganda's emergence of a continental dairy producing nation.

Exports from dairy products roped in $150m  in 2019, bettered only by gold and coffee in export receipts.

Monday, May 20, 2019

US-CHINA TRADE WAR BAD FOR ALL, LESSONS TO LEARN FROM


On Monday this week the US triggered a 25 percent increase in tariffs on $200b worth of goods from China. In retaliation China has also said it will raise tariffs on $60b worth of US imports starting at the beginning of June.

The trade relations between the two largest economies have been contentious for years with both sides accusing each other of unfair trade practices.

There will be real costs to the US and Chinese economies – estimated in hundreds and billions of dollars, but also to other economies around the world.

By definition trade wars affect the flow of trade across borders and regions, this has the knock on effect of reducing incomes and therefore the living standards of people on either side of the trade war.

As a trade war bites jobs are lost as businesses are shut down and to add insult to injury, commodity prices go up pushing affected populations deeper in the hole.

"In addition to encouraging inefficiencies in the market, with higher prices businesses that were previously uncompetitive are revived or started to fill the gaps. That would not be a bad thing – as they may create new jobs, but as soon as they are up and running the businesses then join hands to maintain the status quo – the trade war, so that they can continue to thrive. The consumer who pays more for often lesser quality, is always the loser in the end....

To illustrate the point imagine that Kampala introduced a tariff for matooke coming from outside the city. The first thing that will happen is that matooke prices will jump. While for a while people will pay higher prices, they will with time more likely shift to other substitutes unaffected by the tariff.

The matooke plantations of central and western Uganda will be forced to lower the price of their price until it doesn’t make sense – when the sale price is lower than the cost of production and they will look for other markets or convert the plantations to grow maize or cassava.

This will have several repercussions for the matooke connoisseurs of Kampala, not least of which the price of matooke will increase even further as supply dwindles, but will also lead to many of the jobs in the industry being lost – from the loaders and off-loaders, the matooke peelers and cooks and even the livestock which will have developed a taste for the peels will have to be fed alternatives, lowering their production as they acclimatize to the new diet.

If the tariff is kept higher for longer some people will try and convert valuable real estate in Kampala into matooke plantations, since the higher prices of the food may make it a viable proposition to convert valuable real estate to growing matooke.

These investors who will be making a killing, will gang up and create a lobby group which will resist any attempts to lower or remove the tariffs on matooke, dooming the good citizens of Kampala to more expensive, poor quality matooke for the foreseeable future.

Is it conceivable that people of Kampala can ditch matooke altogether for posho or cassava or sweet potatoes? Stranger things have happened.

The truth is that trade wars affect the majority and benefit a small minority, who then fight to maintain or aggravate the trade war in total disregard to the plight of the everyday man.

Look around us, whenever a company or industry is supported against competition, which is what a trade war is about, it is generally inefficient – charges higher for lower quality goods and even the said benefits of jobs and supporting suppliers go to a small connected population.

"In US President Donald Trump’s fight to shore up industry in his country, the higher tariffs are being paid for by his own citizens. The retaliatory tariffs that China has lined up target his key political constituents, who will suffer a double whammy...

China has emerged as a leading economy because it has found a way to produce anything cheaper and in huge quantities, hence keeping costs down, the result being an improvement in living standards even in the US.

The world is changing. Lower value manufacturing industry’s have been moving east steadily, as more developed western economy go up the scale of value addition, into the knowledge industries. Trump is trying to subvert this trend because it seems easier than to invest in retooling the countries education system for the knowledge industries.

China too will suffer as the US is the biggest market in the world with not even Europe able to suck up the surplus that would come with such a war. One can expect jobs will be lost there as factories close or scale down production.

They say that an eye for an eye makes everyone blind.

Monday, February 18, 2019

WE NEED, NO, MUST CHANGE THE RULES OF THE GAME


Last week tourism state minister Geoffrey Kiwanda kicked up a storm, while in trying to promote the Miss Curvy beauty pageant, put his foot in his mouth and then some, by saying the Ugandan woman’s fame curves  can become a tourist attraction.

The way women took offence to this reminded me of how many years ago the headmistress of Maryhill High School, Mbarara took issue with the government school truck.

Sr Felice could not imagine transporting her girls around in the truck, which had “Produce for export” emblazoned on its side. She promptly had it changed to “Support girls’ education”.

Earlier this week President Yoweri Museveni while speaking at the 32nd Summit of the heads of State at the AU called on his counterparts to generate a sense of urgency in pursuing a common market for Africa and an eventual political union.

He argued that it’s only by coming together economically and politically can we banish the stereotype of the continent as being bedevilled by hunger, disease and poverty and also prevent a repeat of the colonisation of Africa.

Two seemingly unrelated events but which highlight the major challenge of our continent.

"While some sections took offence at using our women as marketing tools and objectifying them, if you looked at it another way it’s a clever, if not original way, of shifting the measure of beauty...

Western media through its sheer dominance has created a standard of beauty characterised by tall, slim and light skinned women, which we have come to accept, even if only at a subconscious level.

It is this thinking that, I was reminded years ago, saw no Ugandan lady nominated to contest for the “Face of Africa” model search competition almost a decade ago, because our women were not tall enough and had too much around the waist and hips.

It is the kind of thinking that subconsciously has men hankering for lighter skinned partners, with straightened hair.

But as mentioned above, because of this standard of beauty, our women have next to no chance at foreign beauty pageants, which is why Quin Abanakyo’s run at the Miss World beauty pageant was such a surprise.

"When you get into a game in which you do not make the rules, chances are you will be competing at a disadvantage. You either muster the rules and hope you can excel despite your lack of input in their formulation; you can contravene the rules and guarantee that you will lose anyway or walk away and go and start your own game with your own rules...

The organisers of the Miss Curvy competition have in essence gone away and created their own game, where their contestants can compete from a position of strength rather than from other people’s measure of what constitutes beauty.

Whereas they may not, or never, get world wide acclaim, because they don’t fit in the “conventional” definition of beauty, you can rest assured they will do just fine controlling a niche that makes sense in our context.

The call for a unified Africa falls somewhere between learning to play by established rules and breaking the rules anyway, which is the only way one can hope to compete better in a game not of ones making.

The colonial era saw Africa split up by arbitrary boundaries based on a logic that was not our own. That is how you find our border communities everywhere on the continent just don’t take this political boundaries seriously.

"But the boundaries never the less have served to separate our populations, disaggregate our resources with the net effect being the basket case that the continent is today...

We have to contravene those rules on one hand, so that on the other hand we can compete more effectively in the global arena, where size is might.

Africa’s resources are so vast that it’s a scandal of prodigious proportions that we are the poorest continent on the planet.

By one example it is estimated that the mineral resources of the Democratic Republic of Congo have an estimated value of $12trillion. That’s just a number, but when you realise that this is the total economic output of the US, you have to wonder.

When you drill down to its essence, the reason this is so is because we are divided, playing by someone else’s rules, which invariably work in their favour not ours.

So yes taking a leaf from the Miss Curvy organisers, if we are to have half a chance of not only surviving, but thriving as a continent we need to take a hard look at the rules and tweak them, scuttle or ignore them altogether. The sooner the better.

Tuesday, August 21, 2018

AFRICA’S OPPOSITION WILL TAKE THE CLASS UNTIL THEY LEARN THE LESSON

This week Zimbabwe had its first election in more than 30 years that did not have Robert Mugabe on the ballot paper.

After a tense campaign for the presidency, 23 candidates but, which for all intents and purposes was between President Emmerson Mnangagwa and the Movement for Democratic Change (MDC) Nelson Chamisa, voting took place on Monday.

Mnangagawa was running as the candidate for a revitalised ZANU-PF, which he wrestled from Mugabe last year while Chamisa is the heir to Morgan Tshvangarai, who gave Mugabe his sternest test at the polls in the last election.

The first results in showed that ZANU-PF had won an unassailable majority in the house and despite Chamisa’s loud protestations, it’s hard to see how the presidential vote would go the other way. By the time this column went to press the winner of the presidential poll had not been declared.

It was déjà vu all over again.

"A youthful opposition goes up against an entrenched incumbency, plays up its chances of victory, the media always likes an upset and pumps up the narrative for all its worth, only for a “surprise” victory for the incumbent to happen...

We saw it with Mugabe. We saw it in Kenya. We saw it in Tanzania. We have seen it here in Uganda.

The advantage of incumbency cannot be overstated and more so when it is in the hands of weathered politicians like Mugabe or Kenyatta or the Chama Cha Mapinduzi (CCM) or even Yoweri Museveni.

They are adept at building nationwide support networks, that occupy ground and deliver when activated. It is useful that they have state resources at their beck and call, which means they can cover massive ground, especially long before the campaign season even opens.

This is important because our countries are largely rural, with dispersed settlements. Secondly, we are not all wired to radio and TV networks, which would make it a lot easier for opposition candidates to project themselves without physically visiting every nook and cranny of the country.

Uganda for instance is only 22 percent urbanised. While Kenya and Zimbabwe are more urbanised, they still have at least two thirds of their citizens in the rural areas.

So the opposition in all these countries have concentrated on urban voters, especially the capitals of these countries.

"These populations connected among themselves and with other international networks are then able to create an impression, disproportionate to their numbers, convincing themselves and international watchers that they have a good shot at the prize...

And when the results are announced they have set the ground for charges of an unfair elections, topping it up with the claim that the government stole the vote.

The script is largely the same, only varying in the detail.

Of course the governments in question are not made up of choir boys. It would be naïve to expect they would not take advantage of incumbency. But we have seen it before, when it is time for the old guard to exit the stage there is no amount of tampering or intimidation that will save them at the polls. Even on this continent.

"For fear of looking like blaming the victim, in all these cases it is clear that the opposition does not have a credible nationwide presence. In the period between elections there is little to no work being done to extend their influence, they are often content to heckle the government in the capital, trick them into some brutality which plays “well” on TV  and any other number of grandstanding antics.
In the short campaign period they make enough noise for those looking in from the outside to think they have a real chance at the chair. But alas....

There are no shortcuts. Work has to be done recruiting more grassroot support, nurturing and sustaining it in between elections, for real impact to be felt when the campaigns roll around. Will it be easy? Nothing worthwhile ever comes easy.


Until this happens I am afraid the opposition will continue to take the class until they learn this lesson.

Monday, July 16, 2018

A CESSATION OF HOSTILITIES CAN UNLOCK REGION’S POTENTIAL

Last week two major peace initiatives gained much needed traction after years of stalemate.

After a week of shuttle diplomacy the two rival parties in South Sudan put pen to paper in signing a new peace deal. The deal which  brings back President Salvar Kiir and his rival Riak Machar back in the same government has taken a lot of effort by the governments of Ethiopia, Kenya, Sudan and Uganda to broker.

Analysts wonder whether it addresses the fundamental issues of the continent’s newest country, primarily appeasing all the rival factions and laying the groundwork for institution building, but agree that it is better than nothing and as good a start as any.

"The agreement failed to beat a UN imposed deadline of June 30th for a stop to the fighting. The UN had warned that without a cessation of hostilities and a viable political agreement, targeted sanctions, including travel bans and a freezing of the assets of six individuals inside and outside the Juba administration, would be triggered...

Hot on the heels of that event Ethiopian Prime minister Abiy Ahmed made a historic trip to Eritrea to meet Isaias Afwerki. The two countries have been in a state of hostilities for close two decades following a war over disputed border areas in 1998. Eritrea once a province of Ethiopia seceded after a long civil war that led to the ouster of Haile Mengistu Mariam’s government.

Ethiopia currently in the grip of a currency squeeze, has in recent weeks moved to appease Egypt with whom they have disagreements about damming the White Nile.

Ethiopia has over the last decade been on an ambitious infrastructure building spree that has included increasing the stock of their road and rail networks, seeding industrial parks. At the center of it all is the tapping of their vast hydro-power generation capacity.

The Ethiopian Grand Renaissance dam alone will have a capacity to generate 6450 MW or more than seven times Uganda’s current capacity. The filling of the dam’s reservoirs is what Egypt is unhappy about.

When complete the dam will have a volume of 70 km3 with a surface area of 1,874 km2 or assuming a square, would have one side the length from Kampala to Entebbe. Egypt and Sudan fear that filling that reservoir could cause water shortages downstream and the resulting political fallout may be hard to contain.

Ethiopia which currently employs less than half it current generation capacity during peak hours needs market for its power and long standing feuds with its neighbours do not help. So whereas the antagonists in South Sudan may be content to continue in their state of underdevelopment it is in Ethiopia’s and the region’s interest that peace comes to South Sudan so the market there can be developed.

By the time fighting flared up at the end of 2013 South Sudan had become a $200m a year export market for everything from mineral water to eggs.

"The movement towards peace in the region is being driven by more than goodwill...

The huge infrastructure investments in the region can become redundant if the sweetener of growing neighbouring markets are not thrown in for potential investors in the region.

It would not be a stretch to assume that a combination of factors – political and economic, have made the region’s leaders wake up to the fact melding these markets together is the only way to attract more and more investment into the region.

The global financial crisis and the disengagement of the donors as they sorted their own woes back home may have been the latest, meant aid flows have not kept pace with the region’s populations’ growing needs.

Prior to that the end of the cold war, where billions of dollars were sloshing bout the world to by allegiance with little regard to economic feasibility, democracy or human rights records.

The rise of China has served as useful stop gap, as a financer of grand infrastructure projects that have often been breath-taking in their scope and ambition.

The regional economies have designed spare capacity into all the projects in anticipation of future growth. But for the growth to come the infrastructure has to be employed. A chicken and egg situation. This infrastructure is intended to unlock the great abundance of resources and people in the region.

A geosurvey of Uganda done a few years ago showed that were we to maximally exploit the riches under our feet we would have to first relocate all Ugandans.


When, and not if, peace comes to the region it will because of some hardnosed economic and geopolitical considerations and not out of the goodness of the hearts of the region’s leaders. The resolution on intractable conflicts in the region is just the beginning.

Monday, March 26, 2018

AFRICA’S FREE TRADE AREA SIGNALS INTENT, NOW FOR THE HEAVY LIFTING

On Thursday 44 African countries put pen to paper to create a continental free trade area aimed at increasing trade within the continent.

As it is now trade within the continent stands at about 13 percent of total exports. It means that our countries trade more with the Europe, Asia and the Americas than we trade with ourselves.

It is a ridiculous logic that is a throwback to the colonial era when we were meant to provide raw materials to and serve as token markets to western industry. In addition the political permutations of Western Europe in the first half of the last century explain why in Uganda’s case for instance, we trade more with and through Kenya than the Democratic Republic of Congo...

More trade within the region is important, even critical. Trade within Africa is the least of regional groups in the world and explains a lot why we keep lagging behind everyone else.

It has been estimated that intra-Africa share of trade will more than double in relation to exports to wider world within a decade if we can take maximum advantage of the free trade area.

In East Africa we have been first hand witnesses to such progress. Trade within the Community has jumped to $5.5b last year compared to $1.5b in 2005.

This has far reaching benefits.

"With a consolidated market the dream of industrialisation will grow new legs. For starters it will sharpen comparative advantages around the continent, if the best producers of bananas are in Uganda why should everyone else bother? They will be better served going to another industry safe in the knowledge their source of matooke is unimpeded.

It is not an alien concept. The best matooke comes from southern Uganda, but bananas can be grown anywhere in Uganda. Because of lack of barriers between regions in Uganda, other areas of Uganda need not grow matooke as they can buy it from southern Uganda, they then can concentrate on the things they can do best.

So imagine an Africa with no punitive borders and the efficiencies that can be promoted?

Trade encourages specialisation and therefore increased productivity. It can be particularly helpful towards rural transformation as regional value chains in agro-business are established connecting farmers, traders and processors across the continent.

Evidence of this has already come to light in our back yard.

Last week it was announced that Ugandan farmers were selling 6 million bags of maize to their eastern neighbours. Ugandan farmers can produce maize much cheaper that their Kenyan counterparts for comparable quantities and quality so they are likely to dominate the market in coming years. The Kenyan farmers may have to start planting other crops if they are to survive. But one can expect they will lobby their leaders to maintain the status quo, which will only benefit them and not their own consumers.

But the signing in Kigali while a good step is only a statement of intent, there is a lot of hard work ahead, a lot of it effecting mind change away from the protection of parochial interests by the continent’s leaders and interest groups.

This mind shift is critical if we are to muster the collective resolve to do what it takes to first bring the free trade area in to being and secondly to maximise its potential and benefits to African citizens.
For starters the continent needs about $100b a year over the medium term to bring its infrastructure up to speed. To make this possible there has to be a lot of cross border investments in road, rail and water transport infrastructure.

Work also has to be done to remove non-tariff barriers, to synchronise regulations and create unified standards across a host of goods and services.

In addition respective governments need to commit to trade facilitation by improving connectivity, eliminating red tape and accelerating turnaround times in all processes.

"And last but not least there will be an urgent need to beef our institutional capacities to not only collect revenues but also ensure these are distributed equitably among respective societies...

As is already happening in the EAC there will be some major winners – mainly countries with extensive manufacturing bases and losers who will suffer some fiscal losses and death of some industries.


The signing in Kigali was a great event but we should be slow to bring out the champagne too soon, but rather roll up our sleeves and gird our loins  for the work ahead.

Tuesday, February 27, 2018

THE ISSUES SURROUNDING TRYING TO BE A GOOD LEADER

In the last fortnight the issue of leadership has really come into the fore.

In South Africa Jacob Zuma stepped down from the presidency, more like he was forced out kicking and screaming by his erstwhile allies. During his term he has blighted the notion that an African leader handed an emerging economy to manage can shed his baser instincts and run a tight ship.

Closer to home, disturbing, but not surprising, noises have been raised about our handling of refugees. Only last year the world was in awe of us. How as a poor country we were managing to handle a historic influx of refugees, up to a million from South Sudan alone. It turns out of course that that number might have been grossly overstated for the purpose of skimming, more like shovelling, the excess funds to connected individuals in the Office of the Prime Minister (them again?) and related UN and donor agencies. An investigation is ongoing but everyone is seating tight.

In Ethiopia prime minster Hailemariam Desalegn resigned following a wave of mass protests around the capital Addis Ababa. It was a classic case of, if you give them an inch they will take a mile. 

Previously to the recent protests the Ethiopian government had released hundreds of political prisoners to ease mounting pressure. But as soon as they were released protests begun calling on Adis Ababa to release more. Desalegn, might have stuck his neck out, betting that by releasing some prisoners the tension would ease and when it didn’t, and in fact mounted, he jumped – or was he pushed out?

Leadership is not for the fainthearted. On one extreme side of the pendulum are the leaders – rare indeed, who with former US president Harry Truman profess that “The buck stops here” or on other side of the pendulum, the leaders who will take all the credit for all the good but no responsibility for any of the bad that happens in their time.

Whether one tends towards one side or the other is a function of their upbringing, mentoring and world view.

The moralists would like to believe it is a cut and dried subject. You are either one or the other, with no space for grey in between. But such people have often not had authority or leadership placed on their shoulders.

Imagine you become a leader. Say of Wakanda.

 Up to this point your credentials – academic, moral and reputation are beyond reproach.
The first thing you realise is that to get anything down you need power, the ability to influence people and events, without which you cannot bring your vision to life. But you also discover that you will not be allowed to go about your business unmolested. There are plans to unseat you no sooner have you assumed the throne, and not only from the official opposition. Even from within your own ranks. External agitators will not be left out too.

"Despite your best intentions in an effort to retain power, you may be forced to get dirty, doing or sanctioning actions you would never have dreamed of. And it is very possible that your desire to stay in charge even compromises your ability to achieve your program...

The longer you go down the murky road, the more you lose touch with reality, up to the point where like Zuma, you protest that you see no wrong you have done.

Meanwhile all of us standing on the sidelines wonder why you don’t resign and are shocked you show no remorse.

To avert the above scenario, what if you became a leader. But when faced with the above scenario, of needing to cling to power to manifest your vision, you instead choose to sell your vision far and wide, in the hope that a critical mass of your people will internalise it, so much so that, if the need arises you can step down, safe in the knowledge that your mission will be completed without you.

But as was pointed out to me, the same mechanism that propels one to leadership, the ego, would not allow such an act of selflessness. The ego demands that you take credit for your achievements, stepping down is not an achievement that seats well with the ego. So you soldier on convinced that you are doing good work and the moral questions are but a distraction. And at another extreme would argue that the end justifies the means.

Of course in our thought experiment above we assume that the leaders in question have goals beyond their own self-aggrandizement or enrichment.


"This in no way justifies why leaders, at every level of society,  behave the way they do, but is a partial explanation, a rough psychoanalysis of their motives, which may help in understanding and even dealing with them....

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