THIS IS DEMOCRACY

During President Yoweri Museveni’s final campaign ahead of the February 18^th poll, while live on UrbanTV the host, after outlining a litany of wrongs that stood out during the last three months of campaigning asked me, “Is this democracy?”

“It is an evolving democracy,” was my reply.

The eager young host was obviously unimpressed by the response.

"Sometime into his first term President Barack Obama fighting to get support for healthcare legislation famously said “Democracy is a messy business,” and went on to paraphrase Winston Churchill, “It is the worst form of government except for all the other ones that have been tried.”...

And even then he was talking about the decision making process. The evolution of a democracy is even messier.

The challenge for many of our countries that aspire to higher forms of democracy, is that many of our elite watch tv, travel or even live in more developed democracies and are impatient for developments at home to keep up with what they see happening elsewhere.

This is a good thing and a bad thing.

To aspire to a higher state is essential, even critical for any form of development. However our impatience to improve quickly can make us miss some fundamental steps along the way. The problem with this is that you will inevitably have to retrace your steps to remedy the situation, often at great cost to society.

I remember when the 1995 constitution was promulgated, it was touted as one of the best constitutions in the world. It probably still ranks up there with the best but the same cannot be said of our democratic practice.

Democracy was not and cannot, be written into existence.

The American Declaration of Independence, which serves as the foundation on which the US Constitution was built, has the immortal declaration that “All men are created equal”.  But we know that that country’s black population never got to vote until 100 years after independence and segregation laws were still on the books well into the 20^th century.

The practice has had to catch up with the text and even now, there is still controversy whether “all men are created equal” given the political, social and economic struggles the African Americans and other minorities are engaged in daily to rise to their full potential.

As somebody said the other day, the constitution is a set of ideals to which we aspire, the question then becomes who is responsible for bringing these aspirations to fruition?

The knee jerk reaction is to point to the government, which is to put the responsibility where it should lie, but this would be to ignore the real nature of governments.

"To be in government is to wield power over society. Power by its nature is more likely to concentrate rather than diffuse power away from itself. To expect governments to open up democratic space for people out of the goodness of their hearts, is to misunderstand or ignore how power operates....

So then clearly democracy has to come from the actions of the potential beneficiaries who are the people.

The constitution says all power belongs to the people and we should take that on face value.

Getting out to vote, the ruling party caucusing to push laws or their views through parliament, political contestation along party lines and court challenges of the outcomes of the polls are helping moving our democratisation process forward.

As unbearable as it seems even the current standoff between the government and the opposition is part of the process. Of course its resolution can have disastrous consequences or not, but with the hindsight of history Ugandans (hopefully living in an even more democratic society) will be able to say all this was needed to happen for democracy to advance.

Evolution is messy business, advancing sometimes three steps forward and before taking two steps back, meandering off the true course before finding its way again and oftentimes at greater cost than was necessary.

For us who are in the thick of things, where we can’t tell the forest from the trees, we need to stay the course, even if through the fog of political bickering and manoeuvring we cannot see the next step on the ladder.

POST ELECTIONS, FOCUS ON JOB CREATION

As the dust from the just concluded polls settles it’s time to move on, use the lessons of the campaigns as a stepping stone to a better future for all Ugandans.

As far as I am concerned everything – political or social has its root in how the economy is faring, how it’s being run.

"Going by our per capita GDP of $800 we are a poor country, however that is to wildly discount the potential of our people and the bounty of our natural resources. We are poor because we have failed to mobilise ourselves to exploit these natural attributes for the benefit of our people...

Understandably we are only just emerging from the dark hole that was the 1970s and 1980s, when the productive sectors of our economy were gutted and we regressed into a subsistence economy. Since 1986 the economy has rebounded, posting prodigious growth figures year after year to the point that the economy has grown by a factor of seven since President Yoweri Museveni marched into Kampala at the head of the rebel National Resistance Army.

And there is the rub. Economic growth is critical for development – the upliftment of people’s wellbeing, but economic growth does not necessarily translate into development.

Currently we are seeing a widening in wealth inequalities as the rich get richer and the poor get poorer, a concentration of resources which manifests itself in angry urban youth and sub human rural poverty.

Economic growth for its sake is useless, economic growth has to be enjoyed by more and more people every year.

That is he challenge the new government has to face up to with increasing determination.

One way to do this to create an environment that encourages investment and therefore creates jobs.

Every first Friday of the month the US Bureau of Labour Statistics office puts out the Non-Farm Payroll (NFP) numbers. These represent the number of jobs created in the previous month excluding government and private household employees.

Over the last 12 months more than two million jobs have been created in the US. Job creation is important beyond having people gainfully employed and not engaging in running battles with the police, the more people employed means the more demand there is in the economy and the more attractive it is as an investment destination. And the more investment the more jobs that are created, a literal virtuous economic cycle.

Clearly we have done some good work on the macroeconomics front with our consistent growth figures, but clearly more work has to be done.

According to the latest World Bank’s Ease of Doing survey, Uganda jumped to 122 from 135, which is something although we were much nearer the bottom the 189 polled nations than the top.

To come up with the result the surveyors measured such things as how easy it is to set up a business, register property, pay taxes, enforcing contracts, access to credit, getting electricity, obtaining permits among other things.

Government can through a combination of sensitisation of its workers and adoption of new technologies go a long way to easing the regulatory processes around doing business in Uganda. For instance why should it take 10 procedures and one and a half months to register a property versus 5 procedures and less than a month in the more developed countries?

I find we are shooting to low when we compare ourselves with Sub-Saharan numbers as if we deserve a lower quality of life than human beings in the developed economies.

Like Rwanda did these regulatory stumbling blocks can be felled in a blink of an eye.

Understandably making these processes more cumbersome allows some public servants to take advantage of the situation, easing the going for those willing to part with a few thousands more.

Which brings me to the biggest factor behind concentrating wealth in a few hands to the detriment of the larger majority – corruption.

Undeniably corruption is making doing business in Uganda more and more difficult.

And we are not talking about the direct cost of bribing an official here and there but the indirect cost to businesses which manifests itself in a poorly educated workforce, high levels of absenteeism due to illness, pilferage that is hard to plug because law enforcement agencies are not performing and high transport costs because of the poor road network.

"Unfortunately some of these nefarious networks have ossified themselves into place over the last three decades. Uprooting them may be politically costly but ignoring them only means they spread their tentacles into every facet of society, making it harder and harder for economic actors to be productive and, not unlike running in molasses, the economy will eventually grind to a halt...

So going forward let us be lie the Americans let us track how many jobs the economy is creating every quarter to begin with. In trying to create jobs we will have to work backwards and remove the impediments to job creation.

They say when you focus on something it expands. Let us focus on creating jobs.

KEEP KCCA WORKING

In criminology there is something called the broken windows theory, which suggests that by controlling urban environment – through cleanliness, establishing order and fighting petty crime, it removes the environment for much more serious crimes.

That to wait until the big crimes begin to get hard on crime could be a case of shutting the door after the horse has bolted the barn.

In the last five years of the new KCCA this theory may have been confirmed at least by Mercer, the world’s largest human resource consulting firm.

In its annual Quality of living ranking released they put Kampala ahead of Nairobi, Dar es Salaam and Kigali when measured in terms of sense of personal safety, stability, crime and effectiveness of law enforcement. Of course the result was tempered by the fact that Kampala was ranked 169 out of the 230 cities that made up the survey.

These rankings are not only good for much needed back patting by KCCA but are also important because they informs investor perceptions. Investors – local and international, of course are the people who create jobs, the insufficiency of which is one of the biggest challenges for the city today.

Several observers have suggested that the President and the NRM’s dreary showing in the last election was due to attempts to bring order to Kampala which saw the vendors thrown off the street and the eviction of large populations to make way of the Naguru estate project.

Museveni won about 31 percent of the Kampala vote while opposition MPs swept all eight seats in the city.

"They say you cannot make an omelette without breaking eggs. We have lived in a state of anarchy in the capital for so long that interest groups have grown around maintaining that chaotic status quo. It was inevitable that there would be consequences...

It is a scandal that the beneficiaries of the old system were enough that they have inadvertently voted against the progressive changes happening in Kampala – it is inconceivable that somebody voted for dirty streets, port holed roads and unlit streets intentionally.

In fact what it reflects is that Kampala was masking a lot of disguised unemployment, people were getting by operating on the margins of society and when order was established they found themselves without a livelihood.

"To ally with this protest vote cannot be developmental. What is needed is real leadership by KCCA and the council, who while they can only promise that it will get worse before it gets better, have to stay the course knowing that in the medium to long term we the residents of Kampala and the nation as a whole will benefit from the qualitative improvements...

It is a thankless job, but that is what leadership is about, recognising that what is popular is not always right and what is right is not always popular.

There is still a lot to be done in Kampala including calling commercial building owners to order, collecting property rates and improving public transport all of which will have their political costs.

From a purely mathematical standpoint Kampala has always been hostile to the NRM – the last district leader being Christopher Iga, so there is little to no downside in continuing with planned projects.

It is imperative that the government does not waiver in its support for KCCA and its programs but KCCA needs to recognise too that it has to balance its technical role with cooperating with the political establishment.

KCCA is already involved in some income generating projects and job creation initiatives, in a bid to continue its good work KCCA may be well advised to scale these up to benefit more youth and unemployed citizens.

AFRICA'S PROGRESS CONTINUES

Paul Busharizi, interviewed Dr Ahmed Heikal, founder and chairman of Qalaa Holdings, the continent's biggest investment company, which runs RVR, about his thoughts on investing in Africa --- its challenges and prospects.

The theme of the conference continues with the narrative that Africa is on the rise. However, in recent years we have had multinationals express concern that the continent's rising is still many years down the road, what is your experience?

As far as Africa is concerned, you have demographics that are favourable.  You have resources that are available.  You have better governance: that is – by and large –taking hold, with more or less much better governance across the entire African continent. And, finally, you have a reverse brain drain.  You have a lot of people who are coming back from Europe into Africa.  Those four factors mean that Africa is going to continue to do well – although it will be challenged because of low commodity prices across the board, and a much reduced debt capacity of governments as a result of lower commodity prices, causing pressures on currencies throughout the continent.  Something that we’re already seeing starting from Nigeria, Angola, Kenya, Uganda, and across the board, you have pressure on currencies for commodity-producing countries across the continent.

My view is positive, on the short term you would be surprised, because whether it be the pressures in the Middle East or the pressures in Africa, this is a dynamic whereby the competitive landscape will be less competitive.  Meaning that people who are already established with businesses inside this part of the world will find themselves with relatively low competitive pressures, and businesses will be able to grow in the confines of their existing businesses.  I’m sure that is not positive in the long-term for the region as a whole, or for Africa as a whole.  But I think that there is a dynamic at this point in time whereby the existing businesses will be able to benefit and get larger within the confines of their existing investments. We have a region that is growing at very healthy levels. It is just that political risk is high thus affecting capital availability.

About $100b is required annually in new investment for the continent to bridge its infrastructure deficit soon. Some people argue that money can be raised on the continent, we have just not invested enough in resource mobilisation. What is your take on this and what would it take for us to raise this monies on the continent?

With the continent set to become home to the world’s largest working-age population at about same the time as China’s population begins to decline, there’s never been a better — or more important —  time to invest in infrastructure. You would almost-literally be buying in at the bottom of the market. The question is, how?” And the answer is to raise funding beyond the “usual” suspects. We are now witnessing the increased involvement of Development Finance Institutions (DFIs) in the region. Because there is very little growth globally, everybody wants to encourage growth, particularly in Africa so you will find a lot of the existing DFIs – I’m speaking here about the IFC, European Bank for Reconstruction and Development, FMO, China Exim, NEXI, JBIC, Korean Exim Bank, the US Exim Bank, etc. – all of whom want to get in on financing the region’s development are interested in financing the right opportunities in Africa. The prospects for the global economy are very low growth in the coming period. This is why we are seeing people go outside their normal geographies. As a result, financing will be available for Africa and the more stable parts of the Middle East.

In our experience however, attracting these types of investors is only possible when you de-risk the investment first and show your potential financial backers not just that you’re serious by committing from your own balance sheet, but that the project is one that could fly. You need to bring in the right expertise to run the project, abide by international environmental and sustainability standards, and make sure that the infrastructure project in question presents a win-win scenario that allows governments and regulators to back it from the word go. 

As a businessman from the continent what would you say is the biggest challenge doing business on the continent and how can this challenge be resolved?

Obviously there are enormous challenges that people need to be on the lookout for.  One is the direction of money in emerging markets in general.  Obviously with the expected rise in interest rates in the US, money flows out of emerging markets.  That cannot be good for emerging markets as a whole, or for our company specifically, that’s not something we like to see.  The demographics of the region are extremely worrying especially with high unemployment.  The social stability, the social fabric of society are going to be stretched thin. Unemployment is very high.  Income inequality is going to rise even further than it is right now. So I think there are certain dynamics that are cause for worry. So, the risks in this part of the world are definitely there, the key to success is to try to minimise and manage the associated risks.

VICTORY FOR MUSEVENI IN UGANDA POLLS BRINGS LEGACY INTO SHARP RELIEF

Uganda president Yoweri Museveni’s victory to rule for a fifth term left the capital, Kampala, an opposition stronghold, in stunned silence as dark clouds loomed over the east African nation’s political future.

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IT’S THE DAY AFTER AND … WHAT? NO CHAOS?

It’s a day after the elections.

If you are reading this paper then it is true Uganda has not imploded on itself like the prophet of doom’s apocalyptic script should have run. The elections went peacefully. There were some incidents here and there but no widespread breakdown in law and order.

I imagine the results are coming in fast and thick from every corner of the country and I imagine we are all holding our collective breaths especially early in the morning as it is not yet clear which side the pendulum will swing.

So yes, we may not be out of the woods yet.

But at what point would we be sure that the threat of chaos will go away?

If the naysayers were to be believed the police crime preventers were going to be scouring the country disrupting opposition campaigns.

If the naysayers were to be believed some candidates would be arrested and hampered from mobilising the people. Well on that count they were right. On the last day of the three month campaign perennial campaigner Kizza Besigye was detained and released without charge after a fracas at edge of the city center.

If the naysayers were to be believed by now the country would be enveloped in a cloud of terror we would be crawling around for fear of raising our heads and having it loped off by some crazed vigilante.

The only terror I felt was the fear of turning the corner and come face to face with the hordes of one opposition’s candidates supporters. I even had a mental checklist to do in that event – roll windows up, turn off ignition and hide key in under tongue!

"The problems of Uganda are real and any attempts to gloss over them should be treated with the contempt they deserve...

The issues of income and wealth inequality, poor service delivery and bureaucratic impediments to strategic thinking or execution of forward looking plans are holding back the country from rising to its full potential.

However it can be argued too that the leaps in progress registered in the 1990s maybe hard to come by now, as the base of which we are working is much larger.

In 1986 we had a GDP of $4b today the economy is about seven times larger. It is easier to get a 10 percent or $400m growth from $4b economy than it is to squeeze $2.8b improvement from today’s economy.

However in an ideal situation – world economy ticking along, commodity prices behaving themselves and an enabling government bureaucracy, compounding should have kicked in more strongly ensuring an exponential lift off at some point in the last decade or so.

The figures show of course that our economy’s progress over the last quarter century has outstripped many contemporaries on this continent or Asia, we have worked out what it takes to achieve economic growth.

The trick now is how do you spread that growth more equitably among the population?

Because the truth is while the economy has grown spectacularly since 1986 our population is not seating still having more than doubled from the 15.8 million it was 30 years ago.

"It can’t be emphasised enough that growth has to continue – in the 1990s the World Bank calculated that the economy needed to grow by at least seven percent to half our poverty figures, but more importantly that growth has to be seen by everybody in the way of improved services and an economy which allows for increased opportunities for advancement...

Instability and insecurity would only throw a spanner into those plans. 

But for now in the words immortalised by former Kenyan President Mwai Kibaki, “Kazi iendelee!” (Let work continue)

THE CASE FOR ILLICIT ENRICHMENT

This week the Inspectorate of Government (IGG) is pushing for former prime minister’s office principal accountant Geoffrey Kazinda to be charged with illicit enrichment.

Essentially they will be seeking to prove that Kazinda was living way beyond his means, way beyond the capacity of his known incomes could sustain.

In relation to this they will show that he possesses property valued at about sh3b and cars worth sh770m property he could not possibly afford on his sh2m a month official salary.

The IGG has rarely invoked this section of the Anti-corruption act in the past in trying to prosecute suspected thieves, partly due to the difficulty in proving it.

"To prove a person as illicitly enriched him or herself according to the Anti-Corruption act it has to be proved that he must control or possess property that it is doubtful they would have acquired with through their known income or endowments...

Suspects have come up with numerous dodges of how to shelter their ill-gotten wealth, registering it in relatives’ names or in corporate entities which would be difficult to trace back to themselves.

However if investigators went beyond possessions to audit the suspects’ lifestyles they may have better luck. And that seems to be what they are doing with Kazinda.

It seems a no brainer.

"If a man’s known income is one million shillings and he wines and dines at our finer hotels and when the spirit moves him he might hole up in their presidential suite for a week or two or three and when he is not using his designated vehicle he tools around Kampala in a Rolls Royce Phantom, you have to wonder...

It is a schizophrenic society we live in where we know, beyond intuition, that so and so is living well above his pay grade but we not only suspend disbelief but celebrate these types, giving them pride of place in our churches and wilfully put our children under their care.

Our public officials have got away with so much that they no longer feel the need to hide their illicit wealth living in a life of glitz and glamour the rest of us mere mortals are content to watch on TV, paying cash for their children to study abroad and changing their passports annually for lack of space in them for new visas.

In the US the integrity of the financial system is so critical to the smooth running of the country and the credibility of the dollar as a reserve currency, that you can get away with murder in the US but find it much harder to get away with financial impropriety. As one of our politicians found out the hard way at the end of the last century.

Tax evasion, currency counterfeiting, money laundering and general fraud are nipped in the bud not out of any moral superiority of the society but because they cannot allow the rot to entrench itself in the system to the point that it is a matter of national security.

In fact the secret service, which protects the US president and his deputy is also tasked with protecting the financial system of the US.

"You cannot overemphasise that corruption goes beyond depriving services to the public but is also a disincentive for hard and diligent work, distorts markets and readjusts society’s moral compass towards crime...

That the IGG is now looking to go the way of lifestyle audits is a welcome move, long overdue and could put a meaningful dent in the endemic that is concentrating public resources in a handful of individuals’ bank accounts.