THE YOUTH LIVELIHOOD PROGRAM, AN INTERESTING CONCEPT

He was going to set me straight. Make me see the error of my ways. Pius Bigirmana, the permanent secrteray in the gender ministry.

The point of contention was an article I wrote last week which in his words, “mixed the sheep with the goats.”

The offending article was on report by Makerere University’s Economic Policy Research Centre (EPRC) on the Youth Venture Capital Fund (UVCF). The sum total of EPRC’s report was that UVCF had fallen short of expected outcomes of loan disbursals and job creation. I referred to the Youth Livelihood Programme (YLP) in passing but continued to write as if the ills that had befallen the UVCF were shared by the YLP.

My apology was brushed aside as Bigirimana set upon setting the record straight.

The UVCF is managed by the finance ministry while the YLP is managed by the gender ministry. And that is not the only difference. UVCF was supposed to lend money to young entrepreneurs through the commercial banks. Unfortunately, while not included in the original design, collateral requirements appeared and one year grace period disappeared. Invariably the majority of youth failed to qualify or cope.

"The YLP on the other hand offers interest free loans – at least for the first year, requires no collateral and is guaranteed by groups of the entrepreneurs....

It did not take me long to see the error of my ways.

But I was not going down quietly.

Isn’t this just another program that will go the way of other programs like the Entandikwa with money dispensed and little to nothing achieved, I asked.

“There is a difference,” he did not thunder. “There is conceptual clarity about the program and this shared by the implementers and the youth groups we are working with. Secondly there is inclusiveness and ownership. The youth are involved in the design, approval, implementation and monitoring of the projects.”

Besides he said, the project is demand driven. It provides financial support, skill development and is institutionally backed.

And finally Bigirimana said, there is passion. But surely you can design passion into a project. “No you cannot. But when you sentisize the people and they see the benefits, they defend it passionately.”

More than sh250b has been budgeted for the project over five years, sh54b has already been disbursed since January last year and an additional sh35b is planned for this year. Is this enough to reach all the country’s youth?

“We require substantially more resources. In Wakiso 400 groups applied but we had only enough resources for 120 groups and the pattern is replicated around the country.”

It’s too early in the project but how do you measure success at this point. “So far sh516m has been repaid out of the sh38b disbursed.”

I clearly looked unimpressed because he continued, “This loans are for three years and are interest free in the first year after that an interest payment of 5 percent is imposed. It’s a revolving fund so repayment is good so it can be ploughed back into the fund.”

Bigirimana thought defaults would be low because groups guarantee the loan and it’s in the interest of the whole group that they have a good credit rating.

"They also have surpassed their expectations in disbursement of funds. They initially planned to reach 50,000 beneficiaries by the end of June but are now servicing 71,866...

I pulled out my ace in the hole. So how do you respond to criticism that the beneficiaries are slanted towards one political side over another?

He did not miss a beat. “This program has no religion, no tribe, no political side because beneficiary selection is not based on this.” In fact he added, that if he as the accounting officer of the ministry heard of such shenanigans he would veto a decision to deny or approve an application.

He had to run – literally, they have “health run” on Friday evenings at the ministry and he is involved.

The program was officially launched in January 2014 has 5,507 beneficiary groups in all the 112 districts of Uganda. Just under half the sh38b disbursed has gone to agricultural projects, a quarter to trade and the rest distributed in service, vocational skills, ICT and agro-forestry among other projects.

Given the programs design it can go on into perpetuity.

"I am always suspicious of government interventions in the private sector. Governments by their nature are geared towards celebrating inputs but pay little attention to the out puts. The private sector thinks in diametrically opposite terms....

With YLP it’s hard to argue against the design of the project and the early successes. It is too soon to declare the YLP a roaring success but clearly progress has been made.

IS OUR SOCIETY IRREDEEMABLY CORRPT?

This was yet another week in which corruption dominated our headlines.

Uganda National Road Authority (UNRA)’s Allen Kagina took a slasher to the organisation’s hierarchy, sacking some, encouraging others not to seek contract renewal and causing soul searching in the authority, which had become the byword for the worst excesses of corruption in this country’s history.

UNRA’s woes came to a head last year, with the explosive revelations about the Mukono-Katosi road project, a plot gone wrong which nevertheless was crafted with such ingenuity, audacity and gluttony, it left the general public gasping for air.

So brilliant was the plan that getting to the bottom of the scam was not unlike chasing ghosts in panama hats and, while UNRA Officials may have been complicit, you get the feeling the real masterminds still walk among us....

Then there was the back-and-forth between Justice John Keitirima and Kampala lawyer Bob Kasango about the little matter of sh15.4b, that may or may not have been awarded irregularly or illegally, in a past court case and how the spoils of these monies should have been divvied up.

Apart from the details of this or that case the true cost of corruption is really not appreciated.

Governments which work in the service of their citizens work to generate economic activity, this activity is taxed and it’s with this money that government provides public goods – security and infrastructure and social services – education and health.

Ideally these government interventions are meant to create an enabling environment for more and more economic activity to be generated, but also to give a leg up to the least of our brothers so they can climb up the ladder of society to improve their general wellbeing.

However this neat progression can come unstuck if, the government of the day is woefully incompetent or is riddled with corruption.

It is obvious. Corruption concentrates resources in a few hands to the detriment of the majority.

The “gentleman” who helps himself to a few billions from the public coffers to buy his wife a four wheel drive vehicle, holiday in the Bahamas and live in the lap of luxury, denies thousands of patients lifesaving medicine, lowers farm gate prices as transporters traumatised by bad roads drive a hard bargain and means the quality of our basic education is compromised for lack of blackboards, benches or even a roof over the classroom.

"The outcome of this one gentleman’s avarice has a ripple effect through society and down history more than he could have appreciated when his grubby fingers signed off the money...

But beyond the physical consequences there is the moral degradation of the general society.

It shows itself first in the individuals who no longer even deny they have taken the money.

Their moral fibre is so tattered that we have heard them, in their defence argue, that there are bigger thieves and why are we going after them, that the money landed in the account by some divine providence or that they deserve it because of the sacrifice they have made to country.

And then their immediate families and society around them.

We celebrate when our relatives “eat big” -- appointed to a higher position. We gleefully jump into his brand new car, invite ourselves to his new mansion or are let out a large cheer in the bar when he covers our bills. Even if we have this niggling feeling in the back of our mind that the mathematics does not add up.

The long and short of it is that there is no social censure of corrupt behaviour in our country. Without social censure there really is no hope.

"Our feelings about corruption need to fall to the level of the disgust we feel when a 44 year old father defiles his five month daughter or the dismay we feel when a nine year old is crashed to death in boda boda accident or the shame we feel when grown women feel it necessary to strip in protest over the injustice that allows their land to be stolen from under their noses, that is when there will be hope...

A FEW BILLION TO SPARE? BUILD A MALL!

I try not to go into the Kampala business district. The traffic I can handle, it’s the lack of parking that is the bigger disincentive.

Last week I had to go into Kampala and realised how long ago I had been. Construction is going on at every turn with multi-storey buildings sprouting everywhere you look like weeds.

"The general feeling is that the economy is suffering despite what the official figures say – business is slow, shops are shutting down and property prices have gone in reverse...

It was surprising enough that construction goes on unabated in our city what was even more shocking is what these landlords are building. Malls!

That did not make sense to me. I know other better situated malls, with acres of parking space, larger shop floors and which have not lost their novelty with our fickle Ugandan shopping public, but where business is decidedly slower than a few years ago.

So what is it that these new mall owners know that more seasoned operators don’t?

I can hazard a guess or two.

One, these mall owners like many Ugandans before them are just playing copycat. Because someone else has built a mall and seems to have succeeded, they decided they will build their own too.

Not the best example of market research, but there.

Secondly, I am tempted to think there is a lot of hot money still sloshing around. How does one commit billons of shillings to an industry in decline, if he is really concerned about making a return? 

Ordinarily to build such malls would require millions of dollars in debt. What that means is that if you build your mall and the tenants are not forthcoming you will have to find a way to pay the bank or they take over your monstrosity.

"But on the other hand if you have all those billions in cash, you will have the luxury of waiting out an economic downturn as you have no external obligations. What kind of people have billions of shillings in cash in this economy? Cash, which they are willing to leave locked up in brick and mortar with little hope of adequate return...

The interesting thing with markets is that when there is an economic boom everyone looks like an astute businessman, but as US billionaire investor Warren Buffett says, “Only when the tide goes out do you notice who has been swimming naked”.

And when the economic downturn comes the cash returns to its rightful owners.

One can understand the attraction for storing away money in real estate. On the surface of it, it seems a no brainer. Get your money, put up a building, collect rent and watch the sun go down as you sip coyly on cocktails by the beach.

As many a landlord has found out, it does not quite work that way.

To begin with the returns on real estate are lower than those found in general trade. Secondly, it takes time and money to find the tenants and manage the building in such a way that one can extract maximum value.

The signs are all around. Our mall owners have converted basement parking into shops. They are cutting back on maintenance, leaving the washrooms dirty and stinky or shutting them down all together. Their tenants are leaving them in droves as they rush to reopen in the newest mall.

It was no surprise a few months ago that the epicentre of a typhoid outbreak was one of our malls.

But the mall fad is just part of a larger craze in the economy, which makes you shake your head while wondering “What were they thinking?”

"It seems to be, that the sum total of our market research before we go into business, is to look around at what other people are doing and join the bandwagon...

It could be the intuitive thing to do, but if one was to gather the statistics they may very well mirror the conventional wisdom that only five in a hundred businesses live to see their fifth birthday.

If you have hit a windfall and need to open a business yesterday, I suggest you park your money in a fixed deposit account. Deliver yourself from temptation. Seat down and try and plan how you intend to execute your business and find out whether there is a market for whatever you are bringing to the public.

And it need not be a colourful power point presentation with all the bells and whistles. The idea is that there are things that need to be clarified, that will determine whether your business will survive or not but also determine its long term viability.

"The story’s of entrepreneurs rushing headlong into a business on a hunch and a prayer are nice to listen to. However for every entrepreneur that goes headlong into the business, throwing caution to the wind and survive, there are easily a few hundred who have fallen by the wayside...

It may not sound sexy when you are telling it to your grandkids, but a bit of thought and preparation could go a long way in ensuring you go into the right business and that it survives long enough for you to brag about it to your grandchildren.

As for all those malls littering our streets? Let us talk about them in five year’s time.

OMAR AL BASHIR AND THE QUEST FOR JUSTICE

Last week Sudan President Omar Al-Bashir dodged a bullet.

While in South Africa for an AU summit last week, the high court there barred him from flying out until an application to force Pretoria to arrest him was heard.

This was all in aid of an arrest warrant for alleged crimes against humanity that was issued by the International Criminal Court in 2009.

South African authorities granted immunity to all delegates attending the summit, stalling human rights activists attempts to have him arrested, long enough for him to fly back home on Monday.

"For the rest of us who know how this continent works, we were taken aback that a court could deliver such a ruling, but were never in any doubt that South Africa would not hand Bashir over to the ICC.

It would just have been plain bad manners....

You invite a man into your house and then hand me over to his detractors? Never mind all the high sounding warnings about a drop in South Africa’s standing in the eyes of the international community (read western democracies), it just was never going to happen.

His escape from Pretoria may have been another thumbing of the nose at the ICC, but Bashir knows that he can’t sleep easy.

Earlier this year Kenyan President Uhuru Kenyatta had his case thrown out. Kenyatta and his deputy President William Ruto were charged with being accessories to the post-election violence in Kenya in 2007 where hundreds were killed and thousands displaced.

Which brings us back to the issue of the ICC’s relevance today.

The court’s record in mainly trying African suspects lends it to accusations of bias to the point of racism. Its critics argue that more heinous crimes against humanity have been committed in the Middle East, for instance, than any other house of horrors our blood thirstiest can conjure on the continent.

If that is true, ICC may find it difficult to pick the low hanging fruit on the African continent for a while. If it isn’t true, we can expect that the UN-backed ICC will cast its net further afield and maybe go after human rights abusers in Europe and North America for instance. Good luck!

Away from the geo politics, is the real suffering of people from the Kenyan rift valley to Dafur to  Congo that under the current context are unlikely to see justice for the wrong visited upon them.

It may be convenient to dismiss the ICC as a neo-colonial tool to bring Africa under the thumb of the western capitals, but there are many unresolved issues on this continent which if allowed to fester too long, may force some of our politicians to clamour for their day in court at the Hague, than be lynched locally.

Out political classes actually bring these “embarrassments” upon themselves.

"If we promoted strong judicial and law enforcement agencies no one would want to create extra-territorial institutions to run around policing the world.
But the truth is, the nature of power is that it concentrates rather than diffuses power away from itself. Faceless, impartial institutions are just not convenient...

For the time being it serves their urge to hang on to power to stifle institutional development but in the long run it is bound to boomerang on them, as those same institution, neutered and detoothed, will be impotent to serve them when they will have moved on into civilian life.

The world is changing. With information being transmitted quickly and widely, hanging on to power unjustifiably will become increasingly difficult. Hence the need for more robust institutions that will operate without fear and favour in the service of the country.

The question then has to be what coincidence of circumstances have to come together so that the political elite can see the value of these?

First off it will not happen out of the goodness of their hearts. Our political leaders have to be compelled to nurture these institutions be it at risk to their absolute power. This calls for leadership not only in government but in the opposition and civil society.

Secondly, enough indigenous capital has to be built up that is credible enough to hold our governments accountable. Multibillion dollar multinationals and their agents have little or no interest in rocking the boat if the status quo aids their business. Local businessmen with a long term stake in the economy beyond yearend bonuses are our best bet.

Of course both conditions among others, will take years, even generations to mature fully but without them it’s unlikely that our political leaders will survive the ignominy of being chased around the world because someone else thought they need to be brought to book for crimes they have committed against their own.

KEEPING OUR CHILDREN OUT OF THE TERRORISTS’ CLUTCHES

On Thursday the US officials arrested one Fareed Mumuni on suspicion that he was a terrorist. The 21 year old college student was linked to a plot to cause terror using pressure cooker bombs.

Mumuni, a US citizen, comes from Ghana and his sister is enlisted in the US Navy. Mumuni does not fit the stereo type of the angry black man, averse to authority and prowling his neighbourhood in gangs that prey on defenceless people.

Closer to home, this week the trial of 13 suspects all young men, for the 2010 bombings at Kyadondo Rugby Club and the Ethiopian Village Restaurant continued in the high court in Kampala.

The previous caricatures of terrorists as crazed, bearded men from disadvantaged families with no options in life is fast flying out the window.

In the western world stories are popping up all over the media of the most unlikely youth heading for the Middle East to join the ranks of the Islamic State of Iraq and Syria (ISIS), which is destabilising Syria and Iraq.

Improvements in communication mean recruiters are reaching potential initiates much further away from home.

Which has to be every parent’s nightmare. Your child may be an ordinary person in his everyday life but you have no clue what messages are getting through to him from all the media he is engaging with daily.

These groups recruit teenagers and young adults whose life philosophies are unformed making them gullible and malleable to any message.

"Beyond the promises of a life in paradise pampered by a dozen virgins they are forcefed on a cocktail of hate ideology whose logical conclusion is that it is ok to die for the cause...

When I was a kid our parents’ worst fear is that we would become thieves, in addition parents have these days worry about drugs, sexual deviance and now terrorism.

When I was a kid our parents warned us against talking to strangers, but the main fear was of strangers we came face-to-face with. Parents today continue to warn against talking to strangers but now strangers with perverse motives need not be in your physical presence.

And when I was a kid our parents were the main reference point of what constituted acceptable behaviour. But now parents have to worry about the effect of role models like Ben 10, The Amazing Spiderman, Kim Kardashian and even Jack Bauer as the standard of behaviour their children choose to adopt.

It is a brave new world.

"It doesn’t take much effort to conceive a kid but it takes a village to raise it. Unfortunately we have retreated behind high walls, into gated compounds and held hostage by smartphones.  We are no longer our brothers’ nor his, children’s keeper. But the children still have to grow up and they are doing it the best way the can with the available influences around them, not all wholesome and predictive of a bright future...

So these young men before the high court reflect a failure by our society.

A failure to spare time to impart values that would insulate them from crack pot philosophies. A failure in our exposing them to images that glorify, romanticise and sanitise violence. And failure in our refusal to recognise that the world is a different place from one we grew up in and that we need to be more involved in our children’s upbringing.

A parent’s work is never done.

WE HAVE COME A LONG WAY

This year’s budget speech was particularly hard to cover.

Under the recently passed Public Finance Management Act the budget should be passed by the end of May, that means since March the details have been thrashed out in public with all the details open to the public.

However this was a logical conclusion to a process that started a few years ago when documents like budget framework were released into the public months before the budget reading in June. The budget framework paper has the broad outline of how government intends to spend the money it has raised through taxes and borrowing.

With government no longer in control of general prices the only surprises used to be the new tax measures.

But this year all these had already been discussed so there really no surprises in Matia Kasaija’s budget.

Up to last year finance ministry officials held on to the budget speech up to the last moment like their lives depended on it (their livelihoods probably did).

So in trying to generate stories we had to go back into the past for comparison purposes. Sadly we have not been good at archiving our records digitally so it was a struggle but there still remain hard copies of the background to the budget of 1986.

"In 1986 it is clear that there was no money. The economy was in the toilet a combination of the Idi Amin legacy and an ongoing civil war that was bleeding the state dry...

In the 1986/87 budget total government expenditure was sh11b or about $785m at the prevailing official US dollar exchange rate of sh14. At current prices the budget would have been about sh2.4trillion or a tenth of our present day budget.

Probably less because the official dollar rate was not an accurate representation of the true picture. Unfortunately I could not find any figures of the unofficial (kibanda) market rate.

Interestingly in that budget donor support for the budget came in at a mere eight percent. This figure would jump to as high as 64 percent in 1991/92 before tapering off to the current 24 percent.

The story is not new. So to raise revenue the government had to kick start the private sector into action so they could collect more taxes but in the meantime they needed to cozy up to the donor community to finance the transition to a private sector led economy.

At the tail end of the cold war you could fall in with the IMF and World Bank, whose recommendation it was to liberalise markets, privatise state companies and work towards macroeconomic stability or pump more money into the public sector (which money?), maintain central control of the economy and hope for the best.

We toyed with the latter but quickly realised that our best bet was to unlock the energies of the private sector to ensure long term sustainable growth.

The costs of course came in the form of the restructuring, shut down or sell off of the old parastatals the pain being felt most by the retrenched workers and their families.

"At the time Nile Breweries was repossessed by the Madhvani family, beer trickled out of their Njeru plant at the rate of 2,000 crates a month. Now the brewery churns out about two million crates a month. It’s not the ideal example but illustrates the efficiencies that have been unleashed with private ownership...

With our efforts to unlock the economy came donor funding that jump started the reconstruction and rehabilitation of key infrastructure needed by businessmen.

What would have happened if we had chosen to thumb our noses at the western donors and pandered to the old communist east. For starters in three years we would have been well and truly up the river without a paddle, because in 1989 the Berlin wall came down symbolising the end of the communist world of the cold war era.

We would have to have found ourselves back into the liberal economies’ fold eventually. But we would have wasted valuable time.

"But whereas we have done  a better than average job at rehabilitating our physical infrastructure there is an urgent need now to get our soft infrastructure – laws and  institutions, to work for the benefit of the private individual and private sector...

This is necessary because the gains of the last 30 years have been concentrated among a small elite. 

An improved institutional framework will ensure the love is spread out more evenly through the reduction of corruption and greater efficiency in service delivery by our public servants.

We have come a long way but there is still a long way to go.

WE ARE POOR NOT FOR LACK OF MONEY

Social media has been awash with images of the house that Hamis Kiggundu has built on the shores of Lake Victoria.

It’s a huge, stately house with high ceilings, a sweeping staircase, chandeliers and complete with swimming pool and marina. Reports say the palatial mansion has 25 bed rooms, while experts estimate that with a living space of more than 1,000 square meters, the build must have cost at least $1m (sh3b).

Reactions have been mixed.

Some people envy the 31 year old owner’s good fortune at being able to build himself such a fantastic residence. Others wonder what the point is of such opulence, question the source of his funds while others are left gobsmacked, shaking their heads in befuddlement at the spectacle.

For those who dismiss it as conspicuous display of wealth, one cannot help but detect a certain amount of sour grapping. They probably have never been exposed to such luxury, they cannot conceive being enveloped by it, they probably break into a cold sweat at the thought of it.

For those who are enthralled by the marvel they probably wish it was they who owned it, lived in it and enjoyed it. They probably returned to their prayers, their intensity heightened by visions of the house that Ham built.

To each one his own.

"Not to begrudge the young man his money, but his home is symbolic of a lot that is wrong with this country...

As a country, and people, we are not poor for lack of resources but because we misallocate our vast resources.

We are continually seduced by short term gains over the long term sustainability. We are quick to copy others even if we do not understand the rationale of their actions. And we are always on the look out for the one big deal that will set us on easy street, application and diligent work are to be avoided at all costs.

There are only two ways of spending money one, by eating or consuming it or by investing it.

If expenditure is slanted towards the former rather than the latter, poverty is eventually guaranteed, regardless of how well one lives currently.

If on the other hand one invests, allocates money to activities with a good chance of receiving a return one can expect a life of ease over the long term as the investments begin to pay off and spawn other investments, which in turn throw off even more cash.

Why it is so difficult to invest rather than consume, is that investment requires faith, belief in a future benefit that is not guaranteed, while consuming now guarantees immediate gratification.

People who have built wealth sustainably over years, decades, even generations are men and women of great faith, never mind that they might not subscribe to your favourite pastor.

As human beings we are not designed to think long term. Our attention spans, unless trained otherwise, are unable to concentrate for long periods of time live alone project into the distant future.

The downside of this is that we tend to overestimate what can be achieved in one year and underestimate what can be achieved over ten years.

Whereas this a human condition and not unique to Ugandans, it is the attitude that glorifies those among us of questionable wealth over those who put in an honest day’s work at their jobs or businesses day in, day out over years.

It is this kind of thinking that makes us envy Kigundu, that he has made his money – never mind how, while he is young enough to “enjoy” it, by that we mean that he can now “eat” his money presumably finish it before he is dead.

Judging by his mansion Kigundu seems to have fallen for this way of thinking.

"It is not only that the mansion is too big for the needs of any one man, it is that all those billions of shillings have been tied down in concrete, steel and glass, monies which would have been released into the economy to generate more economic activity. As if that is not enough you have to take into account the millions that will be spent in upkeep and maintaining of the property annually....

But Kiggundu is probably better than the rest of us who have dotted the countryside with country homes that they barely spend a week in all year, but which cost millions to put up.

At least Kigundu will live in his castle by the lake.