BOKO HARAM SYMPTOM OF A LARGER PROBLEM

With the abduction of 200 school girls last month and the threats by the group's leader that it will sell them into slavery or marry them off, Nigerian rebel group Boko Haram have become he new poster boys of world terrorism.

The group which is actually called "the Congregation of the People of Tradition for Proselytism and Jihad"  was formed in 2002 and operates in the north eastern parts of Nigeria. Boko Haram is a Hausa nickname that loosely means that they reject western education.

The group while claiming it wants to bring under Sharia law the region it operates in, has not been averse to bombing mosques and killing civilians indiscriminately.

This group is a painful throw back to our own Lord's Resistance Army (LRA) who initially claimed they wanted to overthrow the government and rule Uganda by the ten commandments. The kidnap last month of the girls was not unlike the 1996 abduction of 139 girls from St Mary's College - Aboke by the LRA. A hundred of the girls were released after deputy headmistress Sister Rachel chased the retreating rebels into the bush and negotiated for their return.

Clearly not only did the abducted Nigerian girls not have a sister Rachel but Lagos, probably out of embarrassment, remained silent about the abduction with president Goodwill Johnson coming out after two weeks to speak publicly on the matter.

But there are also reports that the when intelligence was received that the group was turning towards militarism to further its goals the security forces either turned a blind eye or dragged their feet in acting on the information, that by the time the group went fully violent in 2009 Lagos was caught flat footed.

Our own experience with anti insurgency operations is that they quickly get messy as local populations get caught in the crossfire and their allegiances are tested by both sides, but rapid response times are critical against highly mobile rebel movements -- Boko Haram whiz around on motorbikes.

But drilling deeper these kind of insurgencies happen or are sustained in communities where poverty is predominant.

Last month after rebasing its statistics Nigeria announced that it was now Africa's largest economy with a GDP of $510b. But the continent's most populous nation, which derives nine in ten dollars of export income from oil and has been bedeviled by bad government since independence, has huge wealth disparities among its people with eye popping opulence on one side of the pendulum and sub human poverty among almost half it's population on the other hand.

Economic growth makes good headlines for politicians but the equitable distribution of this wealth among its people is the more telling statistic in terms of national stability. In fact great wealth disparities in a country are an indictment on the government of the day. Wide income inequalities suggest governments are unable to not only distribute the economy's growing wealth by providing social services and physical infrastructure and in so doing creating an environment for more people to climb up the social ladder

To the extent that the people see no hope for advancement is the extent to which they will clutch at straws, even insurgency, to provide for their families.

An insurgency can not be sustained without people. Boko Haram has grown into enough of a force that large parts of northern Nigeria are under emergency law because of their activities.

Recent military adventures against the Boko Haram have not endeared the continent's largest army to the citizens of north eastern Nigeria.

The politicians have no choice now but to show they are doing something, but in the long term Nigeria as do other African countries, need to seat back and take a long hard look at the wealth inequalities in their respective nations, not least of all as these may serve as the tinder of revolt that will sweep them out of power.

RVR AND THE FUTURE OF THIS REGION

Turning around the fortunes of the Kenya-Uganda railway is not unlike changing a huge ship's course – progress is slow, often imperceptible but once the course is set hard to reverse.

The analogy by Ugandan businessman Charles Mbire was an apt one.

Last week RVR held its first (?) share holder and stakeholder meeting since the Kenyan investment firm Transcentury’s 34 percent investment was bought by the concession’s anchor investor Citadel Capital, an investment company out of Egypt.

Citadel Capital now control 85 percent of the company through Africa Railways. The remaining 15 percent is held by Ugandan firm BOMI holdings that is wholly owned by Mbire.

"For all intents and purposes RVR came out of that board room skirmish unscathed if not more energised following a willingness by its institutional partners to provide the finance to pay off Transcentury...

Transcentury exited the consortium claiming that the investment did not live up to their expectations and that they had bigger fish to fry.

However RVR’s stakeholders in Nairobi last week affirmed the viability of the project and in many instances would have been forgiven for drooling into their soup at the potential of the concession if executed properly.

Decades of neglect mean that road transport has supplanted rail as the preferred means to and from Mombasa.

At the height of its powers in 1970 the railway was handling four million tons of cargo annually a figure that is yet to be attained under the new management, though they project that they will shift five million tons of cargo by the end of 2015. The port of Mombasa handles 20 million tons of cargo annually, suggesting that even if they attain their short term target they will still be a lot of room for expansion.

In the US rail accounts for 43 percent of all intercity volume.

This is key for Uganda and its hinterland because three in every four tons ferried are destined for Ugandan and beyond, clearly we will be among the main beneficiaries of an efficient RVR.

As landlocked country we should jump at any initiative that will help lower our transport costs and the development of the railway is one.

Currently the average transport costs to ferry a ton per kilometer in Kenya and Uganda is US15 cents which is three times as high as the African average.

The size of the rail network --- 1,300km from Mombasa to Nairobi and the dilapidated state in which the new concessionaires found the network and rolling stock will make one of the biggest investment in the region. Already a fully financed $287m turn around program is in progress that started in 2010.

When the British conceptualised the Uganda railway their initial thinking was that it would help in protecting the source of the Nile from its enemies. Uganda was the missing link in their strategy to control the Nile seeing as Egypt and Sudan were already colonies.

Subsequently the railway led to the speedy occupation of Kenya – more specifically the rift valley by white settlers and also made Uganda a viable economy through the export of cotton and coffee.

Citadel Capital have a long term vision to make it the beginning of an intercontinental railway network.

"The strategic importance of this railway has only been squandered by our post-colonial governments.It is a unique investment – an inter-country, Public Private Partnership, Foreign Direct Investment (FDI),an intricate  endeavour which for the time being seems to have the right partners...

As for competition from the widely hyped standard gauge railway? 

"By the time the standard gauge railway is commissioned our business will be mature enough to compete favorably," Citadel Capital's managing director Karim Sadek said.

UMEME EXIT A LESSON

This week the controlling shareholder of power distributor UMEME announced it would be disposing of a significant portion of their interest in the company to pursue another venture in Cameroon.

British private equity firm, Actis Capital owns 60 percent of UMEME having sold 40 percent to the public in 2012.

Earlier this year parliament voted to cancel the UMEME concession citing irregularities in the way the concession was procured. Thankfully the resolution was not binding on government or UMEME.

"With news that Actis Capital was divesting itself of a major portion of its holdings understandably led to speculation that the parliamentary action prompted the move. Umeme denies this but it is not inconceivable that the political risk that came with the resolution played a part...

It takes time to organize such a sale and the parliamentary debate that resulted in the recent resolution started three years ago, must have been factored in.

Since UMEME took over the concession their customer base has doubled to 574,000, with the amount of power going the same way doubling to 2118 gwh in addition the company was collecting all the revenues due to it, including from government. Last year revenues came in at nearly a trillion shillings.

These improvements have come at a cost with the concessionaire investing more $150m (sh390b). This number is interesting on two fronts. One, its a reflection of how derelict the network they inherited was and secondly, this is money would have been ploughed into the system by government were it the owner, money badly needed for infrastructure and social services but also knowing how government works would not have produced the efficiency improvements UMEME has shown during the same period but would have instead enriched a few individuals.

Whereas Actis says it is shifting its attention to bigger projects in Cameroon, its hard to see how an investment in a more stable market can beat the growth potential of the Uganda market where the supply constraints are being sorted out and there is only one person in every ten Ugandans with access to power.

"The truth is that while Actis has done well for themselves--not as well as they would have hoped had they seen out the full concession, Uganda was becoming a hazardous place to do business. Not only were they battling the small power thieves, well connected people, companies and government departments were in on the action too. As if that was not enough they had a government driven by political rather than economic considerations, that was often reluctant to back their business plan...

In addition they suffered rear guard action from regulators and parliamentarians who hung them out to dry or were hell bent on the throwing them out, regardless of the cost to the economy in lost momentum or compensation.

It is difficult to have sympathy for Actis. Capital is a coward and this is what they do. They provide capital, bring together the management expertise and develop projects with a clearly defined exit number in mind.

Two lessons emerge from this experience. 

"One, in the absence of local comparable investors we need to be more supportive of investors like Actis. Secondly, that we need to have a more strategic vision of how we mobilize our own resources to be more meaningful players in our own investments. To illustrate of the ten largest shareholders in the UMEME share sale two years ago only NSSF and maybe the employees and directors and shareholders of UMEME represented Ugandans. Who is to blame when, the juiciest of our investments are snapped up by others?

UGANDA IN THE PRESS FOR THE RIGHT REASONS ...SORT OF

Last week Sister Rosemary Nyirumbe was named  on the TIME 100 list, an annual list of the most influential people as determined by a panel brought together by the magazine.

Nyirumbe was named for her work with women and girls affected by violence. She has set up a home in Gulu to aid in this effort.

She is in illustrious company. Among those named are the usual suspects Barack Obama, Pope Francis, Angela Merkel and Xi Jiping ... The list is about influence and not popularity so Abu Dua (a terrorist with a $10m prize on his head) and Kim Jung Un -- not your regular dinner guests, found their names on the list.

The nominees are drawn up by alumni of the decade long list, TIME magazine's editors and international writers. It comes as no surprise that the award is heavy with US nominees or people who champion causes that the US public can relate to.

"The Lord's Resistance Army (LRA), who have carried out a 20 year insurgency in northern Uganda, were forced into the US public's conscience when the video Kony2012 went viral. Up to that point despite killing hundreds, abducting thousands of children for use as soldiers and sex slaves and bringing the region's economy to its knees, Kony and his band of killers got only passing mention in Washington's corridors of power...

Last week a few LRA rebels snuck back into Uganda and surrendered in West Nile. That there is a chance the LRA will make a return is enough to make stomachs turn and hairs stand on end in northern Uganda.

I am sure Sister Nyirumbe did not lobby for this accolade, but the unintended consequence of it, is that the LRA-story is kept current, not far from the surface ensuring pressure is maintained on the remnants of the deadly group.

International opinion is fickle, driven by a media forever seduced by the latest spectacle and less by altruism. The truth be told, Kony and the LRA is not the story, and not just because he is committing atrocities far from the camera lenses. The real story is the societal disruption and economic devastation, the after effects of his murderous campaigns.

Hopefully, but it is unlikely, recognition for people like sister Rosemary will swing the LRA story towards how to manage the aftermath.

"On the other hand it might be a good thing that the mass media has moved on to the next story. Nothing makes for good news like bad news. Media attention takes on a life of its own, often focusing on the symptoms rather than the causes, the immediate rather than long term effects of events. They play a useful role in raising awareness however caricatured...

But also with the media away, more credible help can come through rather than the self serving kind that often shows up in the heat of the moment looking for photo opportunities.

The bottom line though, as has been shown many times is that the final responsibility for remedying the ills of society lies with us. External assistance is often transient and easily withdrawn from the recipient for reasons other than his need.

It is a moot point that there is great need for psychosocial help in northern Uganda. Just as important is the need for economic empowerment that would make the population -- most of whom were displaced from their homes for nearly 20 years return to being productive. They do not need charity but a chance to reactivate their lost skills or learn new ones, greater access to markets and temporary help to get them on their feet.

It does not help that aid to the north is being stolen hand over fist, but this aid is at best temporary and will not guarantee a permanent solution to the north.

It helps little too that the region's political representatives have come to Kampala and been sucked into the smash-and-grab antics of their contemporaries and have "forgotten" their people.

"What the north -- just like the rest of the country, needs is leadership. But there is a particularly dire need in the north because of how the society's structures have been degraded. They need people to lay down a vision, to provide example and to mentor the youth the majority of whom have never known better than terror, deprivation and disruption...

If for nothing else Sister Rosemary is being recognized for the leadership she is providing to that community, a fact that cannot be denigrated by a media house which had long forgotten the northern conflict.

GOVERNMENT SHOULD STAY COURSE ON PUBLIC SERVICE PAYROLL REFORMS

Last year the finance ministry instituted a series of changes in its payment systems aimed at plugging the holes that were causing major leakages of public funds.

Among the changes instituted were the consolidation of accounts and devolution of the payroll to the districts.

The measures are still being test run and teething problems are being worked out.

Previously a ministries, government departments and agencies (MDA) would open numerous accounts for payment to the payroll, suppliers of goods and services. Because these numerous accounts were difficult to track they were employed for siphoning money out of the ministry. The ultimate plan is to have one central account for all government transactions which will make it easy for the finance ministry monitor transactions in real time. In addition no expense can now be authorised without a previously approved work planned.

In an extension of this push for more transparency in government accounts the finance ministry now pays salaries direct to the accounting officers of districts according to a verified payroll by the Chief Administrative Officers (CAO) and his respective headmasters for instance. This way the cut out the public service and education ministries through which payments would be made, effectively reducing the surface area for theft.

A by-product of these changes is that some civil servants have gone without salary since the beginning of the year.

Last month Finance ministry permanent secretary and secretary to the Treasury Keith Muhakanizi placed an advert twice in the papers reminding 37 districts that had not handed in the verified payrolls of their teaching staff by the 15^th and again by the 23^rd April. It’s as if suddenly after all these years the respective accounting officers don’t know how to draw up a payroll!

The reason is not very hard to fathom. In many cases officials have padded the payrolls with ghost teachers, to now submit a much lower payroll numbers would raise eyebrows and even lead to prosecution.

Hence the reluctance in many cases to submit a cleaned up payroll. Or this maybe an attempt to create pressure on the politicians so they may direct a reversion to business-as-usual.

In one central Uganda district the payroll has now shrunk from 2,900 teachers to 900.

A cursory look over the budget performance for the last three quarters display a dramatic drop in the capacity of government to absorb the money when it is available. At the same time last year all ministries but one, had absorbed most of the money released to them, fast forward to today and these same ministries are struggling to utilise half the money  released to them.

If you are wondering how come there is no money floating around like it used to be, these initiatives maybe at the heart of the matter.

This raises some interesting issues not only about government operations but on the general economy. It is evident that billions – no hundreds of billions of shillings have been lost to government finding their way into the pockets of greedy officials. So failure of government delivery was not for lack of government funds but because of people working from the instance to subvert programs by stealing money. But maybe that is putting too high a premium on their motives, the simple truth seems to be that these people stole money for their own aggrandisement but not out of any allegiance to a higher power.

It also explains the real estate boom in Kampala in recent years. On a wider plane official figures show that the main drivers of growth have been construction and services.

One can expect that the beneficiaries of this scam are not going to take this lying down but will fight tooth and nail to maintain the status quo, we can only hope the finance ministry can stay the course regardless of the short term pain we are feeling now.