BANK OF UGANDA HERALDS A GOLF BONANZA FOR CEOs

 

BANK OF UGANDA HERALDS A GOLF-BONANZA FOR FOREIGN BANK CEOs

‘This guy is taking us back to the golf golden era of foreign banks…’, reacted Mzee Mashurubu as we read the now circulating circular from Bank of Uganda regarding the minimum mandatory capitalisation of commercial banks, micro deposit-taking institutions and microfinance institutions. We could not immediately click what he meant by golden era of golf for foreign banks, thus he set to explain. From his explanation, what emerged is that in days gone-by, multinational banks were only limited to major towns with one branch,  some even operating from Kampala alone.  The bulk of their customer base was what they term corporate:  the few multinational companies in the country, UN agencies, international bodies, government ministries, departments and agencies, religious institutions and the few NGOs of the day. Add Treasury Bills and Bonds, and the CEO of a multinational bank could project his annual profitability to a high degree of confidence and precision,  at the start of the financial year. With such assured revenue streams, he could as well go playing golf, comfortably sure of a glowing annual statement, with the perks that accompany stellar  performance at the end of the year.

This was the era of the seller, so to speak. In-between and the advent of the digital era, it has been the era of the buyer: that extra customer opening an account being the golden performance metric. And the digital age sets in( consumption  tail-end, as we do in many other things). Even before Covinomics dictated the ‘new normal’, banks were already closing branches, down-sizing, thanks to the fintech factor. ‘Mobile money’ becomes the cash cow for the telcos, though legally incorporated and licenced for communication.  Legal and regulatory lacuna resolved through incorporating ‘mobile money’ companies by the telcos, under Bank of Uganda regulation. Maximum reach to the remotest unbanked village assured.  Thus, from the comfort of his palatial office on Hannington Rd, Speke Road, Crested Towers  and other high end districts of Kampala or even Barkley Avenue in London, a CEO will by a mere pressing on a katoochi by a potato farmer, capture that extra coin from Rwantaaho, the hard-to-reach village in a mountainous sub-county, of  a road-deprived  district.

And therein lies the golden golf era renaissance. Scenario emerging most indigenous MDIs, MFIs and lower club banks cannot meet the minimum capitalisation threshold. Snapped and merged( swallowed?) by the big boys. No physical branches.  We are all banked’ via the fintech companies, with  ‘platform operation’ ( this means what??)  partnerships with the banks.  Soon banking to the rural Ugandan becomes a ‘spiritual’ phenomenon: sending and receiving money through invisible networks.  With assured revenue streams and minimal overheads, the golden golf era is back.

As we try to figure sense out of this, Mzee Mashurubu asks us what sovereignty will Uganda talk of, with banking, finance, telecommunication, manufacturing, infrastructure construction, real estate, oil ( when pipeline and refinery come in 2025?), all in foreign private hands? The way out, he argues, is to have separate thresholds for foreign and indigenous financial institutions and ringfence the MDI, MFI segment for local players. And , …’let our planners and thinkers visit an indigenous bank in our neighbourhood…it plays in all segments of the economy through partnerships and cross-ownership of its business group ecosystem: international banking, standard commercial banking, MDIs, MFIs, fintech, investment finance and real estate. The most innovative bit was in merging MFIs in each regional into a pinnacle MDI, and the MDIs at national level into the commercial bank. Do Central Banks elsewhere do more than regulation?  

 

 

EMYOOGA CASH...MPs GETTING PENNY-WISE

 In a rare stroke of luck, our new MPs got an early low-hanging fruit onto which to exercise their ‘oversight role’ and prove  biting power to their ‘voters’ ( no longer citizens, but voters? Uhmmm !). This is their current rage against the misuse (proper use, says Mzee Mashurubu), of the Emyooga Funds. Emyooga scheme, both in its connotational misnomer and modus operandi, is performing as expected. Full stop. Period. Point (pwã).

And for our MPs to spend their first ‘100-days’ effort on this, is being pennywise…, or bringing it closer home, they are sinking their teeth onto  mukene while some monster is daily swallowing our Mpuuta. Mukene is Ugandan silverfish sardines, while empuuta is our invaluable Nile Perch, the aquatic living renewable gold we  donate daily to foreign interests( a full treatise on this  for another day).

Our dear honourables, here is what deserves your ‘100-days’ attention. For starters, Uganda urgently needs an anti-trust law, to stem monopolies and restrictive commercial practices. What anti-trust legislation does is this: it bars a manufacturer from selling their products directly to consumers. The implication here is that a company manufacturing safety matches  will have five regional  distributors, one in each commercial region of Uganda. Below them, the distributors will have wholesalers in each district under their business territory. And the wholesalers will sell to the  retailers in their territory, and the retailers will sell to users of safety matches.  This is how wealth is spread and shared. This is how jobs are created. This is how income is assured. This is how life is improved.  What pertains currently  in Uganda is a situation where manufacturers operate retail kiosks!

With the anti-trust law in place comes a competition agency, to regulate commercial practices, especially mergers and acquisitions which, unregulated grow into cartels. And since we are good at seeking conformity with established global practices, the establishment of a competition agency will be in line with the Comesa Competition Commission provisions, to which Uganda is a member and its current Board Chairman is Ugandan!

As you begin your calendar of ‘benchmarking’ trips ( one already ticked off, to Turkey!!)),  a visit closer home, to  Kenya  will boost your ‘100-days’ target achievement. Thanks to her anti-trust legislation  and its enforcement agency, the Competition Authority of Kenya, national wealth from the country’s manufacturing and commercial sectors is  distributed across the value chains via authorised distributors, wholesalers, retailers.  Thus, a multinational company  manufactures chocolates ( usually with local ownership percentage or franchise manufacturing), while indigenous Kenyan companies  are the authorised distributors, wholesalers, retailers.  A  related reinforcing  policy and practice worth benchmarking is the country’s human development programme, with a full authority in charge of this. NITA( National Industrial Training Authority) oversees the skilling of Kenyan employees in all sectors. It works thus: every employer, with 5 employees and above, makes a statutory obligatory payment into the national skilling fund, managed by NITA. NITA pre-qualifies training companies in the various domains. Companies hire the pre-qualified trainers for their staff and pass the invoice to NITA who pay the trainers. Each company thus ensures its staff are trained, since the funds are non-refundable and compulsory. The secret of Kenyans dominating management positions in the region lies therein. Multinationals preferring Kenya as their base into the region  lies therein.

To these two,  dear honourables, add the Counterfeits Bill, the banning of imported used underwear, used socks, used shavers, used toothbrushes, used face towels, used handkerchiefs, used floor moppers, pig offals…and Uganda will import labour into our import-substitution industries.

Is this difficult?

EAC INTEGRATION...NTB HAS NOT SHEPHERDED TODAY-I

 

One popular saying in the interlacustrine region of East Africa (also known as  the Great Lakes), goes thus in one of my Grandmas’ tongues:  ow’omutwe muhango, n’obu otariisize,  noyonesa, meaning once you are notoriously known for being careless with your flock, and it often destroys neighbours’ crops, even the day your flock is securely tethered at home, you are the automatic  culprit in a case of crops destroyed by an unknown  flock.

This nugget of wisdom can’t be more apt to our checkered EAC integration agenda than in the last three months as the body got a new leadership. First, it was the new Secretary General of the EAC, Dr Peter Mathuki from Kenya, who took the relay from Burundian economist Liberat Mfumukeko (we argue that this latter performed to stakeholder expectations). Dr Mathuki, who moved to the EAC Secretariat from the helm of the EABC (East African Business Council), had NTBs( non-tariff barriers) as his automatic culprit, in his very first reported words regarding his new office and its exigencies.  ‘It must be NTBs…this is obvious’, is the latest accusation we have from the new CEO at the East African Business Council, Rwandan economist, Mr John Bosco Kalisa. Yes, NTBs must be eliminated, was the news tagline featuring his maiden tour of manufacturing industries in Uganda.

Yet truth be told, the Culprit is elsewhere, though occasionally NTB lets his animals loose into neighbours’ crop fields. It is these real culprits that the new leadership and EAC Secretariat and EABC Secretariat need to smoke out and parade them to pay for their negligence, with appropriate compensation to the families whose crops have been devoured. The Real Culprits are legion but can be tamed once the gang leaders are netted. And both men have what it takes to refocus the direction of our integration if it is to live to our hopes, dreams and aspirations.

Real Culprit Number One is the delusional  ‘private-sector, citizen-led’ integration, which deviated from the strong pillars and anchors of the pioneer EAC: East African Airways, East African Ports and Harbours, East African Posts and Telecommunications, East African Common Services Organisation, East African Literature Bureau, East African Railways, East African Examinations Council, East African Currency Board,  and many more, all thriving on active, dirigiste  State involvement . The only survivors of this era are The East African Development Bank and the Inter-University Council of East Africa, both headquartered in Uganda. In conformity with the ‘new paradigm’, the developmental State of the old EAC was relegated, with government presence only replicated in the assembly, council of ministers and the Summit, where the Heads of State and Government meet as the final political organ.

 The result of this ‘citizen-led’ integration has been a plethora of ‘stakeholder’ organs and bodies in Arusha, with overlapping paper missions, visions, goals, objectives. The common binding thread(and perhaps prima faciae raison d’être) of all these organisations, is development partner financing. More on this culprit soon.

Luckily for us and the top honchos in Arusha, the culprit buster for this premier faux pas of EAC integration is there for takes it is called The Kampala Agreement.  This is one valuable inheritance from the Founding Fathers that we have chosen to ignore. It was signed in Mbale, Uganda in early 1970s, and its core tenet is planned, evenly distributed industrialisation across the EAC.   We start from here. And the rest will fall in line. Stay tuned.

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TILL EVERYBODY IS SAFE

 NOBODY IS SAFE…TILL EVERYBODY IS SAFE

( Matsiko Kahunga)

‘… we all now qualify for that infamous label, describing that fellow  who asked  to have his bed made ,  while the house was on fire…’ ,  Mzee Mashurubu admits, pensively looking at the picture of a long time comrade just snatched by this Runyaga, his new name for Covid 19. Runyaga refers to a ravager: cattle rustler, resource plunderer, man-killer…

Yes, we all  qualified.

We qualified when we ‘obeyed’ the constitution at cost  of human life.

We qualified when we pursued ‘democracy’ at the cost  of human life

We qualified when we pursued hedonism at the cost  of human life.

We qualified when we pursued mammon cost of human life.

We qualified when a policewoman’s salary forfeited went wayward

We qualified when a pupil’s  pan-cake forfeited, dropped to bottomless pit

We qualified. We qualify. We all are guilty.

We all are under peril. Nobody is safe…till everybody is safe.

Vaccines  elusive.…Oxygen cylinders  scarce.…

Vaccines  booked three years ahead by the mighty...

Hundred million doses, scores times above their needs

An insular  superpower   vaccinated more than the entire Africa

The Mighty Club  meets…

Allocates a few million doses to the wretched world...one entity

Promises of donations…Words of Commitments….

In the months to come…in the years ahead…in times indefinite

Global Pandemic…evolves to Wretched World Endemic

Selfish Beings, we call them…a verbal malevolence against Mbogo Buffalo.

*** ***

Yet, we all have the power  and obligation to save ourselves and our loved ones. Nobody else will. 

We cannot play Nyakazaana, nor remain Nantabuulilirwa much less Ndiwulira.

We resurrect the national anti-Covid war of March-May 2020

The second anti-corona war arms and ammunition stand thus:

• Government suspends the purchase of vehicles to MPs

• All MPs drop  70% of gross monthly earnings into the corona war chest for 6 months

• All Local Government leaders and legislators drop 40% of gross monthly earnings into corona chest for 6 months

• All corporates drop 40% of annual EBITDA( 2020 figures) into corona war chest

• All MDAs drop  70%  recurrent budgets into the corona war chest for 6 months

Energised thus as of March-May 2020,  

• a schoolgirl will forfeit her pan-cake and drop in a coin

• a cassva farmer will drop in a coin

• a milkman will drop in a coin 

• a teacher will drop in a coin

• a policeman will drop in a coin

• a church will collect and drop in a pence

• a kingdom will mobilise and drop in a brick

• a  Whatsapp group will drop in a coin

• EVERYBODY will drop in a widow’s offertory

The Power of Numbers

The Energy of National Pride

The Instinct of Self-Preservation

We retreat indoors, squat, listen to the moves of the enemy

Our commanders and planners( Taskforce of March -May 2020) take the lead

Survival rations distributed evenly  to the deserving

Relief Fund for businesses affected 

We shall triumph. Corona shall diminish

The time is now…not tomorrow

NOBODY IS SAFE…TILL EVERYBODY IS SAFE

UGANDA AIRLINES: HERE IS THE WINNING FORMULA

 

UGANDA AIRLINES: OUTSOURCED MANAGEMENT IS THE WINNING FORMULA.

‘A bitter-sweet experience…’, is how Mzee Mashurubu reacts to the current ‘storm’ brewing inside Uganda Airlines, our revived national carrier. In his analysis, the airline was revived at the right time and the wrong time at the same time! The right time because with Ugandan agriculture moving towards the commercial angle, albeit at a zigzag snail pace, no better a strategy than a national carrier for the export of our fresh produce to the global market. This in light of our neighbours, whose airlines were prioritising their home-grown exports in allocating cargo space and schedule, with Ugandan ones coming in as a by-the-way, at exorbitant rates. Actually, Ugandan export cargo was subsidising the export cargo of the neighbouring airlines: the discount offered to their home farmers would be recouped from the higher charges on Ugandan exports.  The wrong time: because our economy, with its high rate of formal unemployment, is besieged with cronyism and related vices when it comes to employment…more so in such ‘prestigious’ organisations as Uganda Airlines.

The winning formula, argues Mzee Mashurubu, is outsourcing the management of Uganda Airlines to a professional management team. Team and not company or consulting firm. Team of experts drawn from different countries (including Uganda: we still have the golden era parastatal leaders), hired as individuals but contracted severally, all recruited by an independent reputable corporate governance firm. Notable key positions is Team Leader, who plays Chief Executive Officer, Commercial Director, Technical Director, Director Finance and Director Human Resource. With no Board and reporting directly to the Minister of Works and Transport with a dotted line to the Head of State, the team will be above local political fray and influence, with a mandate to grow the airline to profitability  within five years. Drawing from the example of Kenya Airways, Mzee holds that the presence of KLM top management plus other directors recruited from outside the airline and the industry accounted for the turn-around of Kenya Airways from a limping parastatal to a respectable industry player. The problems that befell the airline after the initial team left, have been attributed to ‘external influence’ in the formation of the successor management that led to  the veering off, which is being rectified.

Cardinal among the key result areas of the expert team at Uganda Airlines  will be growing a profitable portfolio of cargo transport to regional and continental markets. Kinshasa in DR Congo only needs medium range cargo hauliers and Uganda will not even produce enough to meet the demand, particularly meat and dairy products. Equally lucrative is relief food and other materials transportation to refugee camps and settlements( having failed to stop the generating of refugees, at least let us pick spoils from the dark scar); and with East African airspace soon becoming domestic, another cash-cow is this budget airline of the Ryan Air class. Air travel regionally remains costly because the air ticket component that goes into ‘local’ charges is so high, since regional flights are still treated as international flights, not domestic. And to stem the financing challenges, besides statutory allocations, Mzee adds that tourist arrival fees at Entebbe International Airport should have 50% (25 US dollars) go directly into the Uganda Airlines operation overheads budget. With Covid easing and tourism picking, this will cushion the airline against financial shocks as it moves towards break-even and profitability. At the end of its term, the expert team will have groomed a domestic leadership and management corps, from CEO to janitor that will take The Flying Crane to even greater heights. 

 

 

 

UGANDA: FUNDAMENTAL REFORMS  ( 7 YEARS LATE):

IT BEGINS WITH THE LEADERSHIP MINDSET

(Matsiko Kahunga)

The English language has the uncanny reputation of being the biggest ‘thief’ among languages. It evolves and enriches itself by acquiring words from other languages. Every year, new borrowed words are incorporated into the latest edition of the English thesaurus. It therefore follows that a number of English words require one to trace their origin (etymology) in order to appreciate and grasp their meaning. And so, it is with this word so casually used without digging deeper into its intrinsic meaning. This word is reform. All current political and civil society talk is spiced with ‘reform’ this, ‘reform’ that, ‘reform’ here, ‘reform’ there…

But what exactly do we mean by reform? One language guru says that reform has its roots in the Greek work metanoiete:  made up of two words, meta (beyond), and nous (mind). Reform therefore in simple terms means going beyond the current mindset. Any meaningful reform must seek a new thinking, a new attitude, a new mentality, a new inside self…a new paradigm. Short of this, all efforts are only superficial, with no visible results and impact, as we have witnessed in Uganda over the last two decades. All attempts at reform have been on the form, but the substance has remained unchanged.

As 2016 attains climax in 2014, reform is the word in vogue, though it is taking two diametrically opposed directions, one side rooting for  electoral reforms, while another  talks of constitutional reforms, to postpone the 2016 elections to 2021.  Superficial in either case. Reform we do need, but it must be meaningful, transformative reform.  Our political leadership must do a genuine inner soul-searching; asking themselves the following questions inter alia;

·        What is my perception of this political office as President, Minister, MP, Councillor, Local Government Chairman, or Mayor?

·        Is this political office a business investment that I must spend hundreds of millions seeking election?

·        Is this office a position of entitlement that I must demand a free car, free iPad, free medicare, free everything?

·        Is this an office for service or lordship?

·        In this office, am I a shepherd or a hireling?

·        Does Uganda owe me a living or I owe her a duty and service?

These and similar questions will inform the type of reforms that Uganda needs, to restore hope to her citizens so that we have reason of being proudly Ugandan. Since I have not interviewed any political leader on the above questions, I will posit here my own understanding of political leadership, thus the type of ideal reforms to undertake.

 

A political leader at every level is a shepherd, who owes patriotic duty and obligation to his/her motherland and countrymen living, departed and unborn. In the current Ugandan context therefore, reforms informed by this leadership mindset must focus on the following key elements:

Constitutional and Administrative Reforms

·        President: we restore presidential term limits to two terms of four years each

·        Vice President : we abolish the office

·        Prime Minister:  shall be elected by parliament from among MPs as their primus/prima inter pares, ‘prefect’, first among equals.  

·        Cabinet: Once elected by parliament, the prime minister shall nominate and submit for nominal appointment to the president, a cabinet team from MPs. The prime minister and cabinet shall be answerable to parliament. An MP appointed minister shall leave parliament. Maximum of 16 ministers, supported by technocrats. No junior ministers.

·        Legislature: a bi-cameral parliament: 

a) National Assembly of 60 MPs representing 60 districts (rationalised from the current 112).

b) Senate of 10 governors heading the 10 Economic Growth Poles (cantons, provinces, poles, or whatever name adopted). These shall replace the current local governments, with each canton made up of the 6 new rationalised districts. 

c) Regional Assemblies: Each canton shall have 18 councillors, 3 from each of the 6 districts. No district councils. No sub-county councils.  Districts and sub-counties shall become production units under the EGPs. Planning is done at EGP level, with districts and sub-counties as levels of service delivery.  No more urban or rural local government classification. All urban centres get administered within the larger canton.

No more interest group representation in legislature at all levels.

 

Electoral Reforms

We already have a precedent in the 1989 NRC Statute, under which the then legislature was expanded. We retrieve that, and elect leaders thus in 2016:

·        Election remains universal adult suffrage but using the RC system: lining up to elect the President, MPs, Governors, and Councillors all on the same day. The candidates’ pictures pinned on large boards, for voters to line up, spaced 10 metres apart.

·        No permanent Electoral Commission: elections to be planned by the Directorate of Civil Governance in the Ministry of Justice and Constitutional Affairs, with voting supervised by the Chief Administrative Office and its subordinate offices. Voter counting shall be done by school prefects at each polling station.

We cannot afford the luxury of huge political wage bills and other expenditure, all in the name of pursuing strange abstracts of secrecy, enfranchisement, and related catch-words often advanced while promoting such expensive systems as the biometric voter register. It did not work miracles in Kenya. One year in office, the Jubilee government is grappling with meeting its campaign commitments. Salary cuts would not be necessary, had the leaders heeded the wisdom to use the natural biometric system: physical lining up to vote.  What is more biometric than the voter’s physical presence in flesh and blood confirmed or disputed by his/her neighbours?

We cannot squander billions (earned, begged, or otherwise) on elections, while poverty sinks its roots deeper and the national debt is already ensnaring three yet unborn generations.

 It is only through such ‘outlandish’ proposals as these, that reform will make sense. Strategic management calls it Business Unusual. This is what leadership is all about: transforming, not conforming.  Great leaders who have led their nations to prosperity have used this as their secret weapon to success.  Uganda is not short of great leaders.