What you need to know:
- We need to find ways Ugandans can invest substantially in their economy.
President Museveni’s oft-repeated reference to foreign investors as “saviours” raises three quick questions. First, why should foreign investors hold the key to our economy? Second, for how long must we accept this reality? Third, how can we get out of this full dependency?
ALSO READ: Responding to hard economic times
I was thinking about these questions recently when I came across two very interesting statistics attributed to Uganda Bureau of Statistics (Ubos) and cited by a local paper. Ubos periodically conducts Uganda National Household surveys. The latest survey was done in 2019/2020.
The second statistic that struck me is that in 2019 the number of households operating a business was 31 percent, down from 38 percent in 2017. And the source of capital for 81 percent of those households was from their own savings. Only a miniscule 0.4 percent of the households got loans from banks!
This ridiculously tiny bank lending means that Ugandans barely participate in the development of their country. This is for the simple reason that they have little or no access to affordable investment credit. To have financial inclusion and public participation in the development process, citizens must have access to cheap credit.
Why then do we have all these banks, an overwhelming majority being foreign-owned? I think they do best to mobilise deposits, which they use for risk-free lending to the government. To borrow money domestically, the government issues Treasury Bills, with maturities of three or six months or one year. With a government perennially thirsty for debt – external and domestic – why would banks lend us money for operating businesses?
Already, the country has crossed or is set to cross the red line of borrowing more than 50 percent of gross domestic product (GDP).
The President often cites GDP to illustrate his point about foreign investors being our “saviours” because they produce a range of goods and services ostensibly to the benefit of the economy. But he should also be talking about what they really do with the surplus profits they make. Remember, the theory of firms states that firms exist and make decisions largely to maximise profits.
The President should also enrich his speeches by talking about new(ish) things like venture capital. This is money provided by investors to small businesses with perceived long-term growth potential. It is a very important source of funding for small and medium enterprises (SMEs) that do not have access to capital markets dominated by banks and other big financial institutions.
When I was a business reporter with New Vision, I had a chance to accompany a delegation of top government and business leaders to Canada in May 2000 to discuss economic cooperation at a series of conferences held in Calgary, Toronto and Montreal. High-level delegations from seven other African countries were also invited for the “Africa Direct Mission to Canada.”
Venture capital was one of the things the Canadians told us they had capacity to provide to the economies of these countries. What happened? Where is ours?
We need to find ways Ugandans can invest substantially in their economy. I have asked this question before in this paper and I want to ask again: If foreign-owned banks left Uganda in a hurry, what exactly would happen to the economy?
In these tough times, we are told to tighten our belts. We must do more. We must brace for tougher days. We must vigorously debate the Museveni succession. The issue we must tackle is: How will change, when it finally comes, affect an economy that President Museveni has straddled like a colossus?
Mr Akwap is an associate consultant at Uganda Management Institute. This email address is being protected from spambots. You need JavaScript enabled to view it. Daily Monitor
Ten years ago when Kibwezi West MP Patrick Musimba announced his bid as an Independent candidate, political analysts dismissed him as a non-starter.
Today, he is not only a front-runner in the Makueni governor race but is also giving Senator Mutula Kilonzo Junior, the Wiper gubernatorial candidate headache, having won the MP seat twice as an Independent candidate against many odds.
Musimba set the stage for a titanic battle with Wiper leader Kalonzo Musyoka when he launched his bid on Friday. The following day, Kilonzo Jnr took on Musimba, saying even if he does not capture the seat, it should not go to the MP, whom he portrayed as a fraudster.
“We cannot leave Makueni to fraudsters,” he said at a church event without elaborating.
The Independent Electoral and Boundaries Commission has also cleared real estate mogul David Masika (ODM), scholar Emmanuel Mutisya (United Democratic Alliance) and Anderson Mwanza (Independent) to run in the race.
Telling from the campaigns they have mounted, however, they are seen as underdogs compared to the two youthful lawmakers. Whereas Kilonzo Jnr banks on Kalonzo’s strong network in the county, Musimba is banking on the support of local allies of Azimio-One Kenya Coalition presidential candidate Raila Odinga and his Kenya Kwanza Alliance challenger William Ruto.
The highlight of the thanksgiving ceremony held at Makindu market was Musimba’s endorsement by Azimio and UDA candidates led by Makueni Deputy Governor Adelina Mwau, the UDA Woman Rep candidate. They said Musimba was the best candidate to succeed Governor Kivutha Kibwana.
The lawmaker, who enjoys a near-fanatical following in his constituency, has lined up a feeding programme targeting all local primary schools ahead of the August 9 election. He plans to address water shortage and food security if elected.
Buoyed by the endorsements, Musimba set himself on a collision path with Kalonzo, who has been rallying the region behind Kilonzo Jr. While campaigning for Raila in Makueni last week, the Wiper boss commended Kilonzo Jnr alongside Kitui Senator Enoch Wambua and Makueni MP Daniel Maanzo “for standing firm” when he blew hot and cold on joining Raila’s camp. People Daily
Authorities in South Sudan's Warrap State on Monday confirmed that 18 government soldiers and seven armed youth were killed in clashes between the two groups in Rualbet Payam of Tonj North County on Saturday.
According to Warrap state officials, the SSPDF soldiers deployed to recover stolen cattle clashed with youth from the Awan Parek clan in Rualbet Payam.
The youths had radied 125 cattle from the Konggor section in Aliek Payam.
Among those killed were the Military Chief of Intelligence Division 11, Lt. Col. Akec Ciman Paac, SSPDF Division 11 Military Chief for Operations Maj. Santino Kuot Kuotdit and the former Mayen Jur County Commissioner Kuol Agok.
"It was on Thursday last week that criminals from Rualbet and Akop payams ganged up and went to Aliek payam of Konggor community and raided over 100 cattle and divided among themselves. So the acting commissioner of Tonj North county ordered Major Gen. of Disarmament forces to recover cattle and when soldiers confiscated cattle and brought them to their base, they (SSPDF) were attacked and overrun," Warrap State Information minister Riing Deng Adiing.
He added, "18 both senior and junior officers were killed and some are missing and seven armed youth also confirmed dead. We don't know the number of those wounded, we have to confirm."
Meanwhile, Bak Ajuot, acting commissioner of Tonj North County confirmed the incident but said the casualty numbers are still unclear as soldiers were scattered in the bushes.
Ajuot said the clashes lasted for about six hours. He also pointed out that Rualdit Payam has no telephone network and they only get information from people travelling to and from the area. - Radio Tamazuj
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