DON’T UNDERESTIMATE THE POWER OF SMALL BEGINNINGS

In the space of a decade the army’s savings and credit cooperative scheme, Wazalendo has amassed sh131b in assets making it the biggest SACCO in Uganda today.

Each of their members saves 7% of their salary, which might not seem much, but when seen against their 70,000-strong membership it adds up.

Assuming the current rate of growth Wazalendo’s asset base will about double dfcu’s current total assets within a decade.  It is an amazing feat for a financial institution that opened its doors to business barely 10 years ago.

Somebody once said that we overestimate what we can achieve in a year and underestimate what we can achieve in ten years. Because of the former we take too much risk and in the case of the latter we don’t get off our behinds to do anything at all.

"The Wazalendo SACCO experience is particularly instructional because we know an army man’s basic salary is not that much but through consistency and taking advantage of the power of compounding they now have a war chest, which would be the envy of any financial institution in Uganda...

Money is not the be all and end all but to have some is a good thing.

The challenge always is to aggregate it into meaningful sums so that you can get involved in bigger projects.

This is the first challenge but not the most serious. The next challenge is to deploy this money to grow on its own, this is the hardest part.

When there is a lot of money hanging around you immediately gain in confidence and imagine everything you touch turns to gold. New speculative projects are proposed. Controls are relaxed and monies start getting lost. It starts as a trickle before becoming a full blown deluge, if the holes are not plugged.

The temptation to break out into new areas, to take on additional risk can be overwhelming but most times it’s enough to maintain current momentum of doing more of what brought to you the current point of opulence.

Thankfully the management at Wazalendo is very clear that the money is for the benefit of the members and they will not be seduced into going into other businesses or buying real estate or speculating in the markets.

Barring any governance issues, years down the road Wazalendo will be a key financial institution in this country, the soldiers and the country at large will be better for it too.

Beyond that Wazalendo shows us what we are capable of and we do not even know the half of it. The lesson is even more poignant when you think that its savers are not top executives, with top pay checks. What more can we do as a country if we set our minds to finding the appropriate vehicles to mobilise not only our financial resources but our labour, our land, our harvests, our minds?

And we would not be reinventing the wheel. The capitalists while they turn up their noses at socialism and communism, which were attempts to aggregate the productive forces of the economy for the general good, the first private company emerged from a need to pool resources and divide the risk among like minded men....

The Vasco da Gama’s who sailed around the cape of good hope and Christopher Columbus who “discovered” America were bankrolled by wealth y patrons coming together to invest in a dangerous but lucrative venture if it was successful.

Somehow in Africa our collectivism has remained ta the level of the tribe partly, I believe because the challenges that face the pre-colonial African were such that they could be handled by a few hands.

Apart from Kingdoms like the Zulu in South Africa, the ancestors of the present day Shona in Zimbabwe or the Kingdoms of Bunyoro-Kitara and Buganda in this region, there seems to have been little attempt to aggregate and form more viable entities. There really was no compulsion – internal or external, to do so.

But we need not go far back into history to see what can be achieved by collective action by even the humblest in our midst.

Across the border in Rwanda in 1997 the army started their own SACCO, Zigama Credit & Savings Society. Zigama has grown so big that it is now a fully-fledged co-operatve bank with an asset base of about $143m by the end of 2012.

It services its 72,000 members – who now include members of the police and prisons services, through 16 branches around the country. Imagine its power in another ten, 20- or even 50-years?

STOP LAND FRAGMENTATION, BUT WHO WILL BELL THE CAT?

President Yoweri Museveni has been taking every opportunity he can to warn against the dangers of land fragmentation.

He counsels that instead of breaking up of land for inheritance purposes families should maintain the land as a whole and instead share out the produce of the land.

That is the logical thing to do. 

But we continue to parcel out our land, which means inheriting producers get smaller and smaller pieces which deny them the economies of scale that come with working larger lands, increases costs of maintenance and inevitably leads to poverty being passed down the generations.

"Inheritance is a way for males to perpetuate their legacy, that is why property was often passed down to male heirs, who in other societies will keep the patriarch’s name alive. That was a useful method for a pre-industrial time when wealth was created by manual labour....

Two things happened in Europe that changed this chauvinistic way of thinking.

The Catholic church allowed widows to inherit some of their dead husband’s lands, which became the source of a lot of the church’s wealth when these widows eventually passed on and bequeathed the property to the church. 

Secondly, in industrial and post-industrial societies, where education has proved a great leveller, where women can be just as productive in the workplace, as knowledge is more critical than muscle in productivity women had a hand in creating family wealth and therefore had a say how it would be distributed.

The first helped consolidate a lot of land under the church, which reverted to the state in many instances after the revolutions and the second, often meant land remained in one chunk as most people had moved to the cities, selling off the lands and sharing the proceeds.

Of course there were other movements like the landlords harrying the serfs off the land to make way for large scale production made viable by the new market in the cities and by increased mechanisation. 

Inheritance still continues in the west. And yes the male offspring still get the larger share. But the women do too. This shift did not come from wishful thinking but was forced on society by developments in the structure of the economy.

In Uganda of course we are still in the pre-industrial age, actually we have not even experienced an agrarian revolution. Part of the reason we have not seen an agrarian revolution, is because our land holding are not only small but we have a convoluted land tenure system that can be a nightmare to navigate.

So the urgency to keep our land in viable wholes is there. 

However since we are in democratic times we cannot forcefully push people off valuable land, replacing them with more productive agents. And because we have no industries to herd people into if we dispossess them the issue of what to do with these idle masses will pose a serious threat to national security and the powers that be.

But we cannot leave things as they are. That is, if we are serious about real progress into the future.

For starters government should repossess all the land in the country and issue leases. This will allow them final say about land use and probably reduce the compensation claims that stall major infrastructure projects. The leaseholders will always be entitled to fair compensation but they would not hold the country to ransom.

We don’t have to wait for this to happen. Government should tax all the land in the country -- commercial, residential and farm land. To begin with this will automatically swell the treasury and secondly those people holding land fallow or undeveloped will have to make the very real economic decision whether to hold on to the land and pay taxes out of their pockets, develop the land and it pays its own way or sell it to people more likely to put it to good use.

It’s a mathematical certainty that a lot of value will be unlocked from our land like this.

"People have argued that taxing agricultural land will kill agriculture. 

I hope it kills agriculture as we know it today where farms are eking out a living on small patches because they are not using advancing farming methods, do not apply fertiliser or organise themselves into meaningful entities like farmer associations or cooperatives which can hold their own in the open market....

Land reforms are always a political hot potato.

In Uganda most especially, where the votes are in the rural areas, but also because of the absentee landlords who are content to brag about their vast lands in bars but have no plan or are incapable of exploiting their birthright.

To suggest these changes would galvanise these fat cats and make it uncomfortable for a seating government. And then of course some of the government’s biggest champions are unfulfilled farmers themselves and cannot pass judgement on the forest.

The inevitable consequence of all this would be a massive exodus to the cities, a touchy issue politically.

So politicians are more likely to retain the status quo than rock the boat however progressive the ideas may be.

Throughout history land reform has not come from moral suasion, the question then is who will bell the cat?

ELEPHANTS’ PLIGHT IS OUR PROBLEM TOO

The continued poaching of elephants for their tusks is not a problem for the Uganda Wildlife Authority (UWA) alone as their welfare, improved or otherwise has real consequences for the rest of us and we should sit up and take notice.

Numbers of the African elephant have been in free fall despite a ban on all trade in ivory about 25 years ago. 

In the 1930s it was estimated that there were up to 10 million African elephants roaming the savannah of the continent. This figure has plummeted to less than a million since despite the conservationists’ best efforts.

Rising ivory prices are making the market in elephant tusks more and more lucrative, forcing the poaching networks to be more organized and sophisticated to beat the system.

Seven people are currently being held in Kampala for their role in a plot to steal 1,300 kg from the Uganda Wildlife Authority (UWA) stores.

On the black market a kilo of ivory goes for as much as $3,300 (sh9.5m). The illicit trade feeds Chinese demand for ivory figurines, jewelry and chopsticks.

This demand threatens to decimate our herds, which are down to about 500 in Murchison Falls national park, at one time had the highest concentration of elephants in Africa. Elephants also play a role in the opening up new water sources and opening new trails in the wilderness.

They estimate Kenya makes about $50m a year annually from tourists coming to see Elephants roam their great plains, we probably have just as impressive a herd that we can show off if we keep them out of harm’s way.

But beyond the millions of dollars we stand to lose if we cannot halt the slide in elephant populations, there are more pressing issues.

"It is bad enough that the land’s biggest animal’s numbers are plummeting and the environmental issues that may come with the extinction of this great beast, but of more immediate concern is the web of international networks that are driving demand and facilitating the supply of Elephant tusks...

Knowledgeable sources estimate that terrorist group Al Shabaab makes as much as $600,000 annually from poaching, monies that support their bloody agenda. The rebel Lord’s Resistance Army (LRA) have been poaching everything from elephants to Okapi to sustain themselves in the jungles of the Democratic Republic of Congo.

The only way such groups, outlawed internationally, can derive value from their poaching is by working with global organized crime networks. The worry is that these same networks are used to traffic other contraband and allowing them a foothold in one’s country will not only fuel crime generally but can threaten national stability.

Is it any wonder that Uganda is fast becoming a hub for the trade in drugs, human trafficking and smuggling?

Conservation efforts have had patchy results partly because of the huge feeding needs of these animals. An elephant can consume about 800kgs of vegetation and 190 liters of water daily.

Southern Africa has made a case for the unbanning of the trade in ivory. They argue that with their elephant management programs which have been quite successful in slowing the declining numbers they need to sell their tusks, with the proceeds going to sustain conservation efforts.

Given the shenanigans that have been going on in UWA it seems clear that they need to be better staffed to not only battle poaching but to secure the confiscated materials they have in their store.

Wildlife authorities may also want to have wildlife conservation inserted into the school curriculum to increase the appreciation for these animals – not only elephants, and how to live with them.

"In the medium to long term dwindling elephant numbers are an environmental issue in the short to long term it’s about letting criminal gangs come in and take over our country.... And that is not hyperbole.