Why Land Reform is Essential in Uganda.

Kintu Nyago, Uganda’s Deputy Permanent Representative to the UN Mission in New York recently wrote about the need to resolve the land Mailo crisis. This is one of the biggest transformation challenges that the country has and cannot easily be resolved because of the nature of the law, the vested interests and the inability of Kibanja holders to mobilize themselves. I recall an article by the Rt. Hon. Kintu Musoke, the former Prime Minister of Uganda in the weekly topic sometime in the late 1980s. The article was entitled “Akaliba akendo...” This is a kiganda proverb. He was describing the 1900 agreement signed between the British Government and the Kabaka of Buganda.

Looking back more than 100 years ago, what were the negotiating abilities of the Uganda government then. Today, the negotiation power of many African countries is very low. I know that even a country like Japan in 1986 at the New York Plaza was forced by the Americans to revalue its currency to enable Americans balance its trade deficit with japan.

The British government was in the formative stage in administering Uganda and found the administrative structures of Buganda and its clan system a very well organized and effective system. However, they introduced among other things the Mailo land system as part of reforming and modernizing Buganda. One square mile of land was given to chiefs to create a landed gentry in Buganda similar to that of Britain.  The land prior to allocation was owned by the clans (ebika) through a collective ownership system. This of course did not give title at that time to the owners and it would prove difficult to identify an owner since the land was owned collectively. The square mile gave rise to the word Mailo land as we know it today.  Mailo land is common only in Buganda with a few exceptions in other parts of the country. Since the land was owned by families and their clans. The British government introduced a system where the kibanja owners paid a token known as busulu which was land rent. It was not too much so it did not attract attention of those who were paying at that time, the system continues today. The law gave title and that is ownership of land to the person in which the land was established but effectively the land was occupied by the original and titled owner inform of a Kibanja.

100 years later on, the law recognizes the title owner and ignores the Kibanja holder.  In the urban and sub-urban areas, the title holders are rich influential people and can easily access court. The law gives them ownership hence the evictions of the bibanja owners who in actual facts are the original and historical owners of the land. Various laws have been put in place to try and empower the kibanja owner, for example Amin’s land decree 1975, and some other laws since then have tried to correct the problem. The recent land amendment also attempted to solve the problem and in recent times we have seen an effort by Hon. Nataba to resolve land conflicts. Unfortunately, this cannot be resolved through administrative measures. This is the point that Kintu Nyago discusses ably. There is need for a major land reform and this reform is not for the faint hearted. Fortunately the Mailo land is only a problem in Buganda. Elsewhere with communal land, the challenges are different.  For the non-Mailo land areas, there is need to sensitize people about the importance of having a formal legally recognizable title. If the people are sensitized about this, they can then give titles to owners of land. This has been attempted by Hon. Baguma Isoke in recent times. This was definitely a good move. Whether it was backed up by law, I do not know. How far it went, I do not know. The challenge with it though is that in densely populated areas like Busoga where small piece of land is owned by a father with 20 children, registration and subsequent division of such land will be a problem. Where the Mailo land exists, there are moral hazards. The original registered owner got a title by allocation and has indeed benefited from it especially in urban areas. But what do you do with the communal owners who were the actual owners of the land? The need to reform to the land system is even more urgent for three major reasons.

One is to give bibanja holders some legal rights to what is there and in the process enable people have collateral for bank purposes. This has a dark side though. Thousands of the unsuspecting land owners would definitely lose the land to the banks because I don’t find borrowing by many Ugandans viable. (That is another discussion)

Secondly, it would allow plantation agricultural production if well organized and lastly if properly thought out, the reforms would prevent loss of land by Ugandans to foreigners at giveaway prices. However it needs bold hard decisions to affect the reforms that will remove the current moral challenges to land ownership.

Uganda is not ready for a National Airline

In recent weeks, there have been press reports about the revival of the Uganda Airlines. I was the last chairman of Uganda airlines and I would not want to mince words about this and the revival of Uganda airlines is not something I would support now. There are reports that since the airline was closed, traffic has increased. Yes indeed traffic has increased but that does not favor a Uganda based airline yet. We are lucky, we have Air Uganda to look at. Air Uganda is funded by Aga Khan and is not short of money. Uganda is technically short of money and starting an airline is not something I would recommend for the Ugandan airline. There are four reasons why.

One, Uganda’s economy is still small, even in the region it does not have the capacity to hold an airline. You could argue that Rwanda a much smaller economy has an airline, yes it does but looking at its financial performance, I know it is struggling. If I am not mistaken, recently it was in the papers either seeking government support or having received government support. Airline business requires numbers and the volume at Entebbe is still so small and is not about to grow substantially unless oil comes. Just because of the size of the economy, we can’t run an airline. We do not have the numbers. Kenya and Tanzania have a bit of tourism which attracts visitors. Kenya has had the advantage of the economic stability which nobody in the region has had. While Tanzania has always been politically stable, experiments with socialism reduced its economic stability.  During the Idi Amin period, even the little industry that we had walked across the border. Kenya’s industrial base is the biggest in the region and with tourism, the economy can beef up the numbers of an airline.

This leads me to the second reason. This is historical. The East African airways which was jointly owned by Kenya, Tanzania and Uganda was one of Africa’s airline. This was closed in 1977 when Kenya got tired of Idi Amin and decided to break the community. At the time, Kenya took the decision to take all the planes and the routes. Idi Amin decided then to establish Uganda airlines. There was no way Uganda would compete with Kenya airways, they had the planes, the experience in management, there were more politically stable and Uganda had been isolated. The airline business has been designed like many other things to favor the developed countries and it definitely favors those who have an airline and those who are strong traders.  Countries have agreements with one another to allow their airlines to fly into their respective countries, so when Uganda signs an agreement with a country say Britain, it allows the specific British National airline to land in Uganda correspondingly Uganda is allowed to land a specific national airline to land in the U.K.  This is a cup of tea for the airlines in the developed countries. They have the planes, what do they do? They pass a law not allowing planes that make a lot of noise in their countries. Most third world countries have old planes that make a lot of noise. They pass a law that does not allow airlines that emit carbon dioxide. 3^rd world countries have these types of planes. They require you to have a visa three months before you travel and for the ordinary people, you have to show you have land, a family, a job and possibly children before you get a visa. If you are buying a ticket from the developed countries, you will find a cheap ticket, if you buy a ticket from the developing countries, the cost is always very high.  The big airlines worldwide negotiate contracts with oil companies, British airways for instance with over 350 planes on almost 300 destinations, 2000 flights a week, tankers fuel at 60cents per liter. This is based on their volume. Your Uganda airlines will tanker fuel at 1.5 dollars per litre. How can airline compete ins such circumstances? Unless if it going to Arua or Kasese. I recall that even when Uganda airlines was operating, because it had one plane, Kenya airways made sure Uganda airlines flew without passengers. They would schedule their flight 15mins before or after the Uganda airlines flight. Since Uganda airlines had one plane and at times it would delay, people preferred to fly Kenya airways.

Management is the third reason I would advise the revival of Uganda airlines. Today Uganda has no strong local bank and yet we have billionaires around. Unfortunately the local billionaires with exception of our leading Business men who have earned their fortune the hard way do not make this money through business. It is said that some politicians in the country are stinking rich but have never run a business. The point is there is no Uganda public enterprise that is not faced with management problems, real or imaginary. It seems all we do is waiting for these managers to make mistakes and push them down. Of course there are cases of mistakes or actual Impropriety, the history of Uganda’s public enterprise is that if you are one, you are waiting to be scandalized in one way or the other, it is not surprising that most of the multi-nationals have foreign CEOs. These companies do not yet have confidence in Ugandan managers. Of course they are also many areas where they have no skills, tourism, catering is staffed by Kenyans and Ethiopians. So who will manage this airline and may work so well but at the end of the day leave frustrated or be forced out. I pay tribute to those managers who manage Uganda’s enterprises successfully.

The last reason I would not recommend to the airline is the cost involved. There are various ways of funding an airline. If you have the money, you can purchase the equipment. Companies like emirates do this. If you do not have, you can lease a plane. There is an individual in Ireland who had over 400 planes but he did not have an airline, he would simply just lease them out. You need to by good equipment in sufficient numbers but like I said in the beginning, Uganda does not have that money technically and if you are poor the financiers will screw you. You see what money lenders do to people in the local market. If the numbers existed, you could lease planes but since the numbers do not exist, I would not recommend establishing an airline.

However, if we are smart enough, the cargo business is good business. Cargo planes do not have the fuss the passenger planes have. Dutch air was successful because it was primarily in cargo. That would be a good start for Uganda airlines. When the oil flows and the numbers can come in and we can fix our tourism and improve our labour productivity, have our managers gain international repetition, then we can go for the airline. But as of now, an airline in Uganda is a stillbirth.

DEALING WITH PEOPLE WHO HATE YOU OR INTENTIONALLY HURT YOU

Some months back, a friend of mine sought my advice about a colleague whom he felt hated him and he asked me how to deal with the situation which was on his hands. In my usual way, i put my thoughts down as they flowed. How that came o my mind, I don’t know but I wrote it. He appreciated my advice and guess what happened, recently, he sent them back to me! I was in some kind of similar situation. He asked me to ponder over my situation and see if my thoughtful advice then, worked for me in the circumstances i was in. I read through and i could not believe i had written this. 

  a)    Usually people who hate you do so because they envy you. Envy is a big challenge and can create positive or negative emotions. Those who get positive emotions use them to be like that person they envy. They excel and become better people. Those with negative emotions turn to hatred. They may hate you because you have excelled and they can't, because the public believes in you and not them, because you have something good that they can never get. It is interesting that even those who can be better than you in numerous aspects may turn to hatred.

  b)    hatred may arise from conditions where there is disagreement with somebody because this person has done something contrary to your expectation. Common things include breaking an agreement like failing to pay someone's money, failing to do something one agreed to do, a common one among men is taking somebody's girlfriend  or wife, stabbing somebody in the back, greed, weakness of heart, these are incidents which if one himself or herself has a weak heart will turn the issues into hatred.

  c)     It is true that not everybody will like you and for this reason. The Baganda have a saying “Ekumi telikywaawa omu.” In a group of ten people not all of them will dislike or hate you. (Very important lesson). Those who do not like you must find a justification even ordinarily it is not there. This justification may lead to hatred. 

  d)    There are many other situations, it may be siblings, workmates, interestingly even spouses can turn to this level’

How do you handle this? 

i)              The first and most important thing is to believe in God knowing that he knows it all, He is the protector and nothing will happen without his knowledge or sanction, knowing that he guides those whom He so wishes especially those that submit to His will. He is the final arbiter  he does not hate but created hatred for those with weak hearts especially those who cannot forgive. 

ii)            Keeping that in mind, in relationships with other people keeping yourself above pettiness and having a set of principles that govern your life is of utmost importance and a protection against hatred. 

iii)           The next thing is for you to have a free heart, to say to yourself that you will not intentionally do harm to other people, build it in yourself and pray to God that He gives it to you. 

iv)           Learning to forgive those that wrong you especially those that hate you and not having ill-feelings towards them. Of course the best is avoiding associating with them and praying about it to God.

v)             If you have to interact with them, having positive thoughts and talking about those things that link you together rather than puts you apart.

I must have sounded religious here. Those that have no belief in God have no sense of shame according to me and they are likely to perpetuate hatred.

To be continued....

MUBS hosts a Social Business Conference

MUBS hosted a Social Business Conference on July 11, 2013 funded by Africa Development Bank who has partnered with various institutions to popularize social enterprise in Africa. A German firm by Yunus Social Business is at the frontline of socializing social business. Social business is an emerging concept. It goes by various other names like social enterprise and is powered by social entrepreneurs. Business is the key driver of world events. Business results into economic activities that create employment and give incomes to people. Governments can only survive if there are businesses that give them taxes so the whole existence of government depends on  health businesses. Business has been motivated largely by profit. It is profit that leads to survival and growth of the business.  Business and government are therefore interdependent. Governments however have broader aims than business. Government is said to have the twin objectives of economic growth and social justice. Government ensures that an economy is productive and it is producing efficiently. It does this through providing infrastructure and providing a regulatory environment. Government also supports roads, schools, health sector as part of this effort. For the developed countries, they have found a model which enables growth in the economy that removed extreme poverty from their midst. In these countries, the unemployed and the poor get support from government in form of unemployment benefits. For the developing countries, this is not possible because business is not operating at a level where it is possible to provide employment to a large number of people and for government to collect taxes from which it can pay unemployment benefits. Many successful business men in the developed countries developed so much wealth that they did not know what to do with it, they started giving it away in form of philanthropy. This was doing good for society and solving some of society’s problems from the wealth that these individuals had accumulated. These individuals even organizations came in to help governments as a supplementary effort to create growth in these economies. There have been people and while they have acted commercially and aggressively, have turned their profits to support social aims. Rather than be philanthropists they have become social entrepreneurs. Individuals seeking to make a profit but not sing that profit for their own purpose. Social entrepreneurs may build social enterprises. These are organisations that operate in an entrepreneurial manner, innovation, efficiency, risk taking, aggressive competitiveness but the aim is to do good to society. Muhammed Yunus a Nobel peace prize winner founded the Grameen Bank in Bangladesh. Bangladesh is one of the poorest countries in the world and a muslim country. The predominant culture in Bangladesh relegates women to domestic chores they therefore did not have a presence in the business. They do not own property, do not have collateral among others. Muhammed Yunus introduced group lending and today the Grameen bank is one of the successful models of social enterprise. In Uganda, social enterprises have existed for a long time however it is not well documented.  In a research done by a student from the University of Edinburgh which MUBS supported, several enterprises were documented. We have also looked at activities of social entrepreneurs in the country. The concept of social business is catching on worldwide. It is some kind of a new thinking which needs to be studied and understood. In the Uganda context, the point is we want to change people’s lives, give them an income it is due to the inability of government to provide the enabling atmosphere, facilities and training, social enterprises have come to substitute this. At a conference we hosted, some of those people running social business gave their testimonies. To be able to run a social enterprise, you must be a good entrepreneur. Not whether you are willing to give up your profits for the benefits of others is a big question

Poverty and Jiggers

A group of youth has been involved in supporting people with jiggers in Iganga district and with a group of researchers. We have been out on two weekends and trying to understand the problem. Of course if you do not talk about it, the problem will only grow. Yes it is embarrassing that this problem prevails today in many parts of the rural Iganga district. I guess it is true for many other parts of the country, Jiggers is a major problem. We have been collecting funds to aid the victims if you want to call them that. However, simply treating them is not the solution. The problem is much wider. To establish what the problem is, we interviewed various people including the local leadership in these places, the victims themselves, the people in the villages and these came up as the causes of the problems.

1)      Poor hygiene. This includes cleanliness, people live in filthy conditions and kind of accept them, poor sanitation, about 40% have toilets, living with animals in the same house

2)      Attitudes. It was reported that many people didn’t care what happened to their lives, they were able to live with jiggers and not ashamed.

3)      Poverty. Poor people who didn’t even have money to buy a safety pin to remove a jigger. They cannot have cement floors in their houses, live with their animals in their houses, cannot afford to go to health facilities.

4)      Alcoholism. Most of the adults who have jiggers spend most of their time on alcohol. Interestingly it was said you do not need money to drink. You can get free alcohol from friends.

5)      Uncontrolled presence of pigs.

6)      Failure of leadership. Leaders do not do anything in terms of mobilizing and sensitizing people. However the leaders attribute this to lack of government support.

7)      Absence of health facilities. The health Centre on average is 8kms away and not easily accessible besides there are no doctors there.

8)      Lack of government support. Even the health workers say they are not facilitated.

We are continuing to look at the different dimension of this problem. Definitely attitude, poverty and lack of government support are key cases of the problems.  Unfortunately everybody expects government support and yet this is an issue that deals with an individual who is poorly motivated and government has given an enabling environment to able to work, earn an income and change their lives. This problem is not only with people with jiggers. It is a national problem, youth, veterans, and all vulnerable people expect government to give them handouts. What is surprising that even the rich business men expect government to give them subsidies. This is going to be a major problem solving the country’s economic problems. 

As we try to create jobs, the youth take to Gambling.

The Sunday vision of July 7, 2013 talked about how sports betting is crippling our youth. Sometime back, I posted an article on the same thing. One of the key challenges our nation has is creating employment for the youth. Over 70% of Uganda’s population is reported to be below 30 years old. This means that a very small part of the population possibly those between 31 and 65 are creating the wealth and the resources the nation is using. Of course when you look at it from the perspective of wealth, there is nothing to talk about. 30% of the population lives below the poverty line. 80% are in the rural areas. 90% do not have access to electricity. 95% of the employed are in the informal sector. All this spells poverty for the country. The only way to overcome this is through creating jobs. And not just jobs of boda boda cycling and peddling Chinese 3rd class low quality goods in the streets, it is not about car wash or selling vegetables, coca cola and water on the streets, the jobs we are talking about are high quality jobs that result into value addition. We are talking about jobs either in the manufacturing sector or in the IT sector. In comes gambling. It is an exciting thing to gamble but the law of gambling is that 93% lose and less than 5% win. It is addictive and leads to hysteria plus heart attacks. For some reason, government has licensed numerous businesses doing sports betting. It is becoming the second type of expenditure after airtime. Taxi drivers, boda boda drivers, students, hawkers wake up in the morning and take money to the betting houses. They place as little as 500shs. Of course majority of them lose the money. Once in a while, one hits a jack pot. We are not going to turn the world through gambling. The casinos in the up market places were not accessible to the poor people. Now the game has changed, as the bible prophecy tends to be more positive when it says ‘...everyone who has, more will be given,…” we rarely look at the negative which says “…but from the one who has not, even what he has will be taken away”. As we plan to improve the welfare of the youth in this country, there are certain things we would rather not do. I hope that taxes coming out of sorts betting are going out to creating job opportunities for the young people.

A setback for Uganda’s high quality jobs.

We have just concluded a conference on youth and those involved in research about unemployment and poverty are arguing that Uganda’s middle income status will come from value adding jobs rather than boda boda, chapatti making, taxi driving and sale of unprocessed agricultural produce.  The daily Monitor of June 21, 2013 reported that BAT was closing its factory in Uganda. When you look at this story in isolation, you may not know what the problem is. BAT has been scaling down its operations and transferring high quality jobs elsewhere as part of its global competitive strategy. It doesn’t make sense for them to process tobacco in Uganda. The unsaid reasons are Uganda is a high cost country, the cost of electricity, the cost of transport of course the cost of small things like a bottle of soda and any other locally produced product.  When compared to international markets, Uganda is very uncompetitive and to locate here, you must be attracted by either a tax incentive or the cost of importing what you produce being higher than what you produce. Uganda is very uncompetitive. Competitiveness is driven by productivity and productivity is determined by the ability to produce a product or service at a lowest cost possible. Today china is the lowest cost producer in the world for the manufactured products. China produces goods at an amazing low costs that is not easy to compete with. Japan was framed for importing iron and oil and producing low cost vehicles. This advantage has now gone to China. It is the world’s factory. China churns out different qualities of products for different markets. The lowest quality comes to poor countries like those in Africa. No wonder government is struggling with traders to see how best they can control the poor quality products that are coming in from China. Going back to competitiveness, one of the key determinants of competitiveness is labor and attitude of labor. Check out our attitude to work, we want big salaries, look for promotions in high places and yet nowhere to work. We are late for meetings, we are slow at doing things, we literally write ourselves out of the market through these lassiez faire attitudes which unfortunately make us lose out in international markets. The quality of our labor is another issue. It is not surprising that most international companies bring foreigners in key positions. In fact not only international companies but even local ones. They will bring in an expatriate to head various operations simply because Ugandans are not competitive.

For BAT, if they look back at the exchange rate, they see that Uganda has been slowly losing its competitiveness through the depreciation of the shilling. If BAT was importing goods to Uganda, they would hang in here because for what they would lose through exports they would gain through the import system but this has not been the case. Many local companies who have cat flower export businesses, sale abroad and use that money to bring in other goods and in that process make money. BAT did not have opportunity and therefore had one choice, to get out of Uganda, cut their costs before they completely burn their fingers. Their departure is a tragedy for Uganda. Uganda’s economic growth is going to come from improving productivity in agriculture, creating higher quality jobs through value addition in agriculture which will then spur production of manufactured products for an increasingly wealthy nation. BAT jobs have been such type of jobs, we should therefore cry as we see our middle income status go away from us. This is a setback because those are some of the few jobs that the country has relied on, what lessons do we pick from this? How do we increase our productivity, competitiveness? How do we return such jobs where we have had a competitive advantage to the country? My proposal is very controversial and next to impossible but there it is. I don’t believe in government owing and running businesses but Uganda produces tobacco, the factory producing tobacco can only be located in Uganda to retain the high value adding jobs. At this moment in time, the multinational company like BAT cannot have a factory in Uganda because in the BAT headquarters wherever it is located the decision to continue operation depends on the bottom line contribution by BAT Uganda to the BAT global operations. Our planners should get back to the drawing board.