THE OLYMPICS, THE 10,000-HOUR RULE & HIGH ENDEVOUR

They say if you want to be successful look at what the majority of people are doing and then do the opposite.

"In any field of endeavor a minority enjoy disproportionate benefits compared to their numbers because they are willing to do what the majority are unwilling to do, in terms of putting in the planning and effort to achieve their goals...

Every four years the Olympics rolls around and serves as useful demonstration of how effort and dedication can lead to feats of superhuman of achievements.

Last week two athletes stood out for me Chinese teenage swimmer Ye Shiwen and North Korean weight lifter Om Yun Chol.

Shiwen who in breaking the record and winning the gold medal in the 400 meters individual medley race, kicked up a storm with some accusing her of doping. Breaking the record was not the issue, it was that she improved her personal best time by seven seconds, and in addition swam a faster final lap than the male winner in the same event just hours before. And the kagirl is just 16.

Chol on the hand not only broke the record in the clean and jerk for his weight category but Chol who is 56kg, joined an exclusive club of weight lifters who had ever lifted three times their weight.

When we watch them perform and like me, have our jaws drop to the floor in awe we are seeing but a small part of the whole process of achievement.

"Time magazine had a 71 page special on the Olympics and in it they gave a sneak peek into the Chinese training system, which is becoming the gold standard of how podium performances can be engineered...

They of course have taken sports science to a whole new level but there is no getting away from the volume of work, done with hellacious intensity the top Chinese swimmers, divers, gymnasts and weightlifters endure to perform at the highest level.

In his book Outliers, Malcolm Gladwell reported on research which showed that the common denominator among world class performers was the amount of time they put into practicing their craft. The research showed that at least 10,000 hours have to be logged if one is to have a realistic chance of being world class in sports, music or any endevour of significance.

Ten thousand hours is the equivalent of practicing your craft systematically, three hours a day, fifty two weeks a year for ten years.

So for the 16 year old Shewin who started swimming at six, virtually all her swimming life has been dedicated to her current performance, no splashing around in the local pool on hot Saturday afternoons for her, but systematic, lung bursting, limb cramping laps day after day after day.

And those who cannot or will not or dare not log the mileage how do they account for the success of their rivals? Talent!

The beauty of that excuse is that it suggests an intangible, god given gift relieving one of the responsibility of failure to perform at the highest level.

Ok they may be some physical characteristics – Shewin was identified by her kindergarten teacher because of her large hands and feet, but there are hundreds of other girls with big feet and hands, many of whom have been performing at the London Olympics, but only one of them has come through with stunning results.

In watching the Olympians one has to keep in mind we are witnessing the finished product. To go out tomorrow or next week or next year or even in five year’s time and expect to do Shewin’s time at Speke Resort Munyonyo – the only Olympic size pool in Uganda, is an exercise in futility or worse.

Which is why Uganda’s society fixation on the overnight success cannot be discouraged enough. They say when you wake up to find your friend an overnight success be sure he has not been asleep.

Overnight success is good for the romantic novels but does not play well in real life. Our search for the one big deal has warped our sense of morality and destroyed our work ethic (we used to have one)....

That is why many of us, report to office or rather our jackets do, while we hustle for an extra buck on the side, return home at the end of the day to cook the books rather than advance our education and on weekend we dispossess rural folk of their land by force or trickery instead of saving up to buy our own.

As they say its only in the dictionary where success comes before work.

The challenge is of course that as a society we have too many of the wrong role models and that needs to be addressed.

For starters I would suggest you all watch the Olympics – any sport, and then google the effort the athletes put into their sport.

As for Ugandan athletes? I ask, show me your 10,000 hours!

UGANDA REINS IN INFLATION, BUT UNDERLYING PROBLEMS REMAIN

Last week the bureau of statistics announced that inflation had fallen to 14% the lowest it had been since April last year, declining inflation mainly due to falling food prices has been aided along by a tightening of money supply by the central bank over the last year.

 Inflation is too much money chasing too few goods, it therefore stands to reason to combat inflation  you can reduce the money in supply or increase production or a combination of both.

As the overseer of government’s monetary policy, the central bank put the brakes on growing money supply using a number of instruments at its disposal, one of which was the Central Bank Rate (CBR).

The CBR is a policy rate that indicates to the banks what the Bank of Uganda thinks about the level of inflation and serves as a benchmark against which they set their lending rates.

Since its inception in July last year the CBR rose to 21% from the initial 13% in reaction  to mounting inflation but has now fallen back to 17%. The lending rates followed suit, but have not been as fast coming down as when they were going up.

A lot of the increase in money supply came from a jump in bank lending in recent years. By following BOU’s lead and raising lending rates, credit application were halved between July last year and April this year before rising again in May according to the latest figures from BOU. Amounts lent did not mirror this plunge in approved applications but fell nevertheless to sh345b in April from sh460b in July 2011.

The way it looks inflation is on course to fall to single digits next year as the central bank had expected.

But dampening monetary expansion using monetary instruments as the BOU has so ably done for years is like treating malaria fever with panadol, the fever – the symptom, will subside but the malaria parasite – the cause, continues to ravage the body.

The main cause of inflation of the last year was our inability to boost production to meet a spike in regional food demand.

Planning for increased production is not a BOU function, that function lies with the ministry of finance and economic planning.

Our best bet for increasing the amount of goods that the too much money is chasing, is to  boost agriculture. The share of economic output for agriculture has fallen over the last two decades to about a fifth of total GDP. This is due to the explosion in services, construction and industry, which is not a bad thing and is actually a natural progression, but sadly it is also a function of how time has stood still in the agricultural sector.

As it is now Uganda’s major challenge is to shift a lot more land into commercial and away from subsistence production. To do this we have to regularize our land tenure system, enhance agricultural production processes, improve access to credit and invest more in agricultural research and development to attract investment into the sector.

Attracting meaningful investment into agriculture as it stands now is a hard sell.

We have to increase production to the point that industry can find it attractive to operate here, once industry sets up shop a market will be created and more farmers will jump into the fray. A virtuous cycle.

The land issue has to be sorted once and for all. Land has to be commoditised. As it is now the real value of our land is not valued because there really is no incentive to unlock it true potential. All land should be taxed for starters, this will compel our farmers to think more commercially forcing them to derive the maximum value from their land or sell it if they cannot. The political permutations surrounding this initiative would be have to be managed.

Currently loans to agriculture lag behind all other sectors including personal loans a situation that is an anomaly given that four in every five Ugandans derive a livelihood from the sector. The case for an agricultural bank with products tailored specifically to the sector, could not be stronger.

And last but not least a targeted education of our rural populations on how to unlock the value of the land they till. It sounds obvious but it is deceptively so and needs a tectonic mindshift to think commercially after generations of subsistence farming.

The state of the world is economy is such that we are going to have to look more to ourselves for a long time to come as the western donors scramble to salvage their own ravaged economies.

As day follows night expect more inflationary spikes in coming years if we continue to pussy foot around the issue of our inadequate food production.

HAS UGANDA'S OPPOSITION GOT THE NRM ON THE RUN

The recent string of by-election losses by the NRM while barely scratching the ruling party’s numerical strength in parliament, has given the opposition a sliver of hope for the future.

The loss by NRM flag bearer Alintuma Nsambu to DP secretary general Mathias Nsubuga in the hotly contested Bukoto South constituency a fortnight ago made it five out of six losses for the ruling party in the last year.

A record, which must count as the ruling party’s worst showing ever in by-elections since the return to multiparty politics in 2006.

Observers have put down the opposition’s runaway success to two factors.

The first is the general economic decline over the last 12 months, so the NRM losses count as a protest against the way the economy is being run.

Secondly and probably more importantly, is the way the opposition parties have been able to concentrate their forces in the contested constituencies, neutralizing the NRM’s presence. In general elections the opposition find themselves spread out to thin and unable to match the NRM’s nationwide presence.

In addition something has to be said for internal rivalries and wrangling within the NRM, with its succession undertones, which has made it near impossible to present a unified force to the electorate.

In the case of Bukoto South some NRM big wigs privately and in the open defied party instructions to throw their weight behind Nsambu. Some arguing that he was not a native son, an unknown quantity, while others citing his comments against Buganda kingdom that made him a hard sell in central Uganda constituency.

With Nsambu’s loss the ruling party ceded five of the 263 seats it came into the ninth parliament with, but this still leaves it eons ahead of its nearest rival the FDC which holds 43 seats.

But more importantly the NRM still has more than two thirds of the seats in the house. Despite the recent internal bickering and the discomfort of a few of its rank and file’s eargerness to tow lines independent of the party, the ruling party still has a comfortable majority that would allow it to have its way in parliament on any given day.

The losses are regrettable but unlikely to change the mathematical balance in the house.

But NRM planners will know more than anyone that, in politics when the facts come up against perception, perception wins all the time, and they will be forgiven for tearing out their hair and suffering sleepless nights in trying to work out how to stem the hemorrhage.

The recency factor – the tendency to give more prominence to recent events, is not helped by these events.

It doesn’t help too that with the presidential and  parliamentary elections out of the way last year, the NRM looked every day like a house divided against itself.

The opposition can smell blood, the question is do they have the organizational capacity to take advantage of the NRM at its moment of historical weakness?

A government in waiting’s best bet of increasing or maintaining visibility is through its member’s in house – debating eloquently against government positions, harassing the front bench and generally towing a populist line against the government’s pragmatic one.

This would improve their stock in the public eye, make them look like credible alternatives to the seating government.

For lack of numbers this is a difficult agenda to push in Uganda. In fact the ferocity of the NRM “rebels” in recent months is such that they look like the de facto opposition.

Your next option would be to take to the streets, tap into any discontent and magnify it. The walk-to-work protests last year were an attempt at this. But even with this strategy superior grassroot organization is required, you don’t just start a fire and expect the public to jump in and stoke it for you, no matter how much they sympathise with your cause.

Before the polls last year opposition candidates admitted privately that no opposition party had a nationwide network to match the NRM’s, and that whereas they made the necessary noises as a group it was really a case of everyone for themselves and God for us all. 

A mass uprising of the kind the opposition wished for, is predicated on a good organizational structure.  The images we saw on the TV of the Arab spring were the finished product backed up with solid organisational capability the like of which our opposition are yet to marshall.

This is not to say that the series of recent opposition victories should be overlooked, even landslides start with the movement of one pebble, but it means that the opposition has to a lot more work to loosen the NRM’s stranglehold on the country’s politics.

For the NRM it will serve as a wakeup call, a sign that it can no longer be business as usual.

THE OLYMPICS AND UGANDA’S ROADS

Last week it was reported that government is resorting to more creative funding methods to bridge our infrastructure gap.

According to the report in an attempt to have 44 priority roads, which will cost about sh10 trillion, done as soon as possible government has mooted the possibility that contractors will be able to source financing for the projects themselves.

Under the arrangement the contractor will cost the project source the lender who government will approve of and take over the debt.

"As it is now all funding comes from the consolidated fund and it would take forever to have these roads done if we continue to rely on this model of funding. As it is now the government’s total budget is about sh10 trillion a year of which roads accounts for about a tenth of that total.

The major challenge with this is that it will be mostly foreign contractors who will win these contracts given their contacts with banks with cheaper funds abroad. But also it should be a wakeup call for local contractors to build up their capacity to compete.

Resorting to the private sector for funding is a time tested formula, its only poor countries like ours that resort to concessionary lenders.

The private sector’s motives are more transparent – the profit motive, compared to donor agencies’ assistance, which often has political and ideological undertones attached to it.

It is true of course that if the Uganda government fails to develop the capacity to scrutinize these projects we could find ourselves up to our eyeballs in unwisely contracted debt for decades to come.

To avert a recession in their economies western governments have forced borrowing rates to all time lows and that cheap money would always be more attractive to borrowers, but there is no reason we shouldn’t be more determinedly mobilizing our own resources locally to at least contribute to financing our own roads.

The anecdotes are a dime a dozen about how city traders, untrusting of the banking system and the state choose to dig holes in their shop floors or install vaults in their bedroom to store their cash. Billlions and billions of shillings.

One bank manager in the 1990s in trying to pitch his bank services to one trader was shown in to a vault in the back room of the traders shop that had more money than he had in his branch’s vault. True story.

Mandatory savings with NSSF for employees – five percent of gross salary with a employers pitching in with twice that amount, has seen the fund grow into the largest financial institution in the country. It is the biggest single lender to government and business, through the billions they fix in banks which are then on lent to the private sector.

"Beyond this initiative at mandatory savings government has done very little over the years to compel us to save more of our own income. Some will argue in order to boost production we need people’s disposable income to remain unencumbered so as to boost demand. But that is short term thinking...

Mobilising more of our own resources will increase bank liquidity, force lending rates down, allowing for more credit to the productive sectors, which require more long term financing.

The cost of money may still not be lower than the near zero percent lending rates we are hearing about in the west currently but the spinoffs in developing a mechanism for local resource mobilization will be well worth the cost and hold us in good stead in the likely event of future aid cut offs from abroad.

It is an illusion perpetuated by others that we do not have enough resources locally to help ourselves more.

Relatedly and to get into the prevailing mood the London Olympics will cost an estimated ₤11b (sh42 trillion), of this sum the National Lottery will provide ₤2.18b, TV broadcast rights an additional ₤350m, company sponsorships another ₤700m with ticket sales racking in another ₤600m...

The organiser’s of this year’s Olympics – while a national event, were not averse to bringing in private sector sponsorship not only to ease the burden on the national coffers but to also enhance the Games experience.

It makes sense. A lot of the public funding was used in infrastructure development, which will have far reaching benefits to the London economy, outside of this the private sector has shouldered most of the costs.

We need to wean ourselves from the tradition of government as the main benefactor and government too should look to the private sector to finance its projects, with the long term benefit of triggering alternative fund raising mechanisms.

STIGLITZ, CLINTON AND APPROPRIATE DEVELOPMENT

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Africa is the contemporary economist’s delight.

Western observers are still studying their own societies to determine how development came about and why economies developed the way they did in one place and not in the other. Africa, much of which is still in the pre-agrarian revolution stage is therefore a useful place not only to experiment but also try out one model or the other of development.

Last week Nobel prize winning economist Joseph Stiglitz was in town to talk about market failures in respect of the current global financial crisis. We also had former US President Bill Clinton in town, on a trip which took him through South Africa and Rwanda.

In his talk Stiglitz warned against unregulated markets. Using events that led up to the global financial crisis, the professor said by making the mistake of allowing the financial markets to regulate themselves the balance between greed and social benefits was lost in favour of the former with society paying the price in lost jobs, watering away of social safety nets and general uncertainty.

Going also by the liberalization of financial markets in the developing world he said the left to their own devices banks would finance consumption and real estate speculation of more long term development projects, like agriculture, which create jobs and have wider reaching societal benefits.

On Thursday former Clinton was in Rwanda to launch the Mt Meru SOYCO – a partnership between Tanzanian based Mt Meru Millers, Rwanda and the Bill Clinton Foundation, a project that will produce and process up to 30,000 tons of seed oil for local consumption and export, provide ready market for 30,000 local farmers and provide employment to 1,400 on the nuclear farm and factory.

Mt Meru Millers already have operations in Lira where in the last four years they have helped increased soya bean production tenfold to 30,000 tons a year currently.

During a trip to Rwanda earlier this year i saw the initial stages of their poverty eradication plan in action. The plan involves helping small farmers pool their land and labour to produce large scale for the market. If executed to even just half of expectations could easily see Rwanda becoming the regional bread basket in under a decade.

The government’s role in the plan is to provide the strategic inputs like infrastructure and legal framework. In the case of Mt Meru’s project the government has provided 30,000 hectares, ferterliser, subsidized seeds, farmer training, roads and made electricity available to the project and the required fiscal incentives.

The initial government input may seem relatively large but viewed over years of the project’s life the benefits in terms of increased production and improvements in the welfare of the participating communities, more than pays for itself.

The reason Uganda and most of Africa is in the pre-agricultural revolution stage is because of its failure to bring improved farming methods enhanced by entrepreneurship to bear on the land. That is why despite more than 80% of the population in Uganda deriving a livelihood from agriculture it accounts for less than 40% of economic output and  the sector only manages single digit growth annually. And that is why the rural areas have not been the major beneficiary of the economic growth of the last two decades.

Given our deficiencies in technology and finance makes a good case for public-private partnerships. To ensure the widescale effort we need to transform rural production, government is the only credible partner large scale investors can partner with as Rwanda is demonstrating. Government can make land available, construct roads or other transport infrastructure to target areas and provide tax relief.

Government’s goal is a social one to improve the welfare of its citizens, business driven by the profit motive, the trick is to align these goals in order to ensure sustainability of such projects. Without regulation profit will supersede the social motive resulting in exploitation of labour, super profits and pollution. If the social motive on the other hand takes precedence  production will suffer and the enterprise will buried under the weight of its losses or government will spend  billions subsidizing it, which monies could have been used in providing social services or building roads.

Stiglitz and Clinton know a thing or two about creating economic growth. Stiglitz served on Clinton’s Council of Economic Advisors for four years from 1993 the last two of which he chaired the council.

The two would therefore take part of the credit for the economic boom in their country that started in the Clinton era before coming to shuddering halt four years ago with the beginning of the current global financial crisis.

Some would say they laid the seeds of the crisis too but that maybe a discussion for another day

BAD BLACK AND THE UGANDAN CONDITION

The Bad Black show was finally brought to a close with the conviction of Shanita Namuyimbwa on Wednesday for defrauding a company set up by her ex-boyfriend of several billion.

There were many things wrong with this case – How does a young woman with no certifiable skill (marketable skill is another thing), no prior experience as an investor and probably no bank account, extract sh11b from her lover?

What kind of money does David Greenhalgh make to dish out billions of shillings after a night of passion? Maybe he thought he was in Zimbabwe?

And what happened to the famed stinginess of the rich man?

And the question on many people’s lips, Couldn’t she have saved or invested some of those billions, instead of blowing it on fly by night friends, dodgy booze and an atrocious wardrobe? Don’t get us started about her beautician.

It says something about us that she lived the Ugandan dream: Hit the big “deal” (The Luganda corruption Dilu rolls off the tongue better), without much effort so people can call you “shrewd”, then go out and announce your “good fortune” with flashy cars  legendary night outs and above all let everybody know you have arrived by buying some media attention.

To be fair to ourselves this is not a uniquely Ugandan dream – the west’s voyeurism of the rich and famous is a variation of the same theme. Our history of instability, which necessitated a hand-to-mouth existence, is probably to blame for our short term attention span, glorification of crooks and fraudsters and the denigration of hard, diligent work.

In the short time that her star blazed bright Bad Black probably raised hope that overnight success as a model is viable – never mind what you have to sell to get it.

Maybe as Betrand Russell once said “The whole problem with the world is that fools and fanatics are always so certain of themselves and wiser people so full of doubts,” explains why we gravitate towards such show ponies like Bad Black.

Or maybe we are living such dreary lives with one in five Ugandans living in abject poverty, inflation last year hit nearly 20-year highs and like the Romans in coliseum at the end of their empire, we need more and more bizarre entertainment to distract us from pain of everyday living?

As they say the only place where success comes ahead of work is in the dictionary.

But there is hope for our beloved country.

Life is becoming more regularized so much so that phenomena like Bad Black are an anomaly, an aberration on our landscape. Believe it or not there was a time when there were Bad Blacks at every street corner, admittedly hustling for smaller change, but hustling all the same.

Increased availability of everything from paraffin to TVs to dollars means that margins are thinning, the black market has vanished and a regular income can be stretched to the end of the month – only just.

Bad Black has been trucked off to prison but when we fail to sleep at night and allow for some self-reflection, we should remember her as a symbol of our shallow excesses, do penance for our myopic ways, clammer after substance over style and pray that we earn success through thoughtful and consistent application.

Not to stamp on a lady when she is down but Bad Black won the lottery and like many big time winners before her, she was unprepared for her windfall, squandered it and any goodwill she may have had went with it. It may not be bad thing for her that she is going to have plenty of time to re-examine her life.

Hopefully now that she is under lock and key unlikely to dazzle us with her garish style and rural expression of urban excitement we can all get back to doing a honest day’s work.

BECAUSE EUROPE IS NOT UGANDA

In the 1980s Uganda like many African economies, was in big trouble.

Revenues were low, meaning the government could not provide much needed social services and other public goods. This had the effect of depressing private sector activity, killing any hope of tax collection. Meanwhile even the little revenue government was collecting wasvanishing into the black hole that was parastatal sector. The only thing that was thriving was the black market in hard currency as exports had slowed to a dribble.

To sort out the mess the government needed to raise production and then capture the taxes from this increased output. It was a simple formula but not easy to execute.

Government needed to jump start the private sector by first reining in inflation and rehabilitating the infrastructure. In addition government needed to stem the public sector hemorrhage by reforming and privatizing parastatals, as well as taking away their long held monopolies.

Twenty odd years later the private sector is more vibrant, revenues are up to the point that government is financing two thirds of the budget. However the benefits have not been enjoyed equitably across society, a situation which still needs to be redressed without jeopardising economic growth.

Understandably it was always going to be a politically expensive operation but there really was no plan B.

What is going on in Europe – more specifically Portugal, Italy, Greece, Spain mirrors our situation in the 1980s with the slight variation that their debt load has reached unsustainable levels – the last I saw Greece’s public debt was at 165% the size of the economy.

The proposed prescription to their predicament is much the same as the one we painfully swallowed.

The electorates of southern Europe, it seems are not willing to take the pain, protesting at every turn against the proposed austerity measures, pushing the Eurozone to the point of disintegration.

A case of the doctor not willing to take his own medicine?

The stakes are much higher of course – after all who cares if some poor African country falls off the face of the earth?

Europe will serve as a perfect test case for the saying what is popular is not always right and what is right is not always popular.

The old world has got itself into this situation through populism and to extricate themselves they are going to have to force through some hard reforms.

It’s no time to be smug. The Euro zone crisis is affecting us too, with lower demand for our exports, lower remittances from our relatives abroad and the less aid.

Which might not entirely be a bad thing.

Living off the fat of the west slowed any progress towards developing and mobilizing our own resources, cultivating internal and regional markets and nurturing meaningful continental alliances.

They say that when the tide falls you will know who was swimming naked. This crisis will show how far along our economy has grown by how it reacts to the crisis. But more importantly it will focus planners’ minds as they learn to live with lower handouts from the west.

And just as important, we are going to have to pay more attention to the markets around us to sustain us for the next several years. As it is now all our transport infrastructure is designed to extract from the hinterland and evacuate through the ports – a  colonial hangover. Now we will have to build roads which reflect the new appreciation of our own local and regional markets.

The long and short of it is this a crisis we should not let go unexploited.