Mergers, acquisitions expected in banking sector, expert says

The insurance and banking sectors could witness mergers and acquisitions in the near future as companies are unable to make meaningful profit margins to ensure business sustainability, a market expert has warned. The Principal Makerere University Business School, Prof Waswa Balunywa, said Uganda’s economy is small and unable to profitably accommodate many players.

Mr Balunywa, who was speaking at the insurance industry’s chief executive officers meeting in Kampala yesterday, added that a few financially strong companies are likely to swallow up small ones through mergers and acquisitions so as to make meaningful profits which are now shared among many players.
“There will be about three big insurance companies and about six marginal insurance firms in future not because the rest have failed but because they are unable to compete in a highly competitive environment,” he said. Currently, there are 22 insurance firms, 26 insurance brokers and 17 loss assessors/adjusters.

It had been predicted that the revision of the insurance and banking industries’ minimum capital requirements would result into mergers and acquisitions.

However, with the exception of the National Bank of Commerce that was closed in September 2012, all Ugandan banks are said to have complied with the Shs25 billion minimum capital requirements, although it is said that most foreign banks have been depending on recapitalisation from their parent companies, even though some countries have banned capital outflow, a move that could force mergers and acquisitions.

The insurance industry also revised the minimum capital requirement for life insurers, non-life insurers and reinsurance firms was increased to Shs4 billion, Shs3 billion, Shs1 billion and Shs10 billion, respectively, and all players must comply by October this year.

The Insurance Regulatory Authority chief executive officer, Mr Ibrahim Kaddunabbi Lubega said about 50 per cent of insurance companies have complied.
Prof Balunywa urged regulatory authorities to relax on some rules and regulations so as not to stifle businesses.

“Although there is need for regulating the industry, laws should not suffocate businesses and restrict them from expanding. We need to be more pragmatic and put in place laws which businesses can comply with. We shouldn’t legislate against entrepreneurship,” he said.

Mr Kaddunabbi, however, said regulations are crucial especially in developing countries where most players don’t want to do what ought to be done if there are no laws in place to compel them to.

Adapted from Press

Benefits of Social Capital

By

Prof. Waswa Balunywa, PhD

Ms. Diana Ntamu Nandagire 

Ms. Shakilah Nagujja

What is Capital?

Capital is a common word which usually means finance. From the business perceptive, capital is the amount of money that a person has or requires to undertake a business activity. Capital takes various dimensions  or fora or simply money including fixed or working capital. Among the challenges organizations have, is the ability to raise capital at times to undertake a business, at times to expand the business and at times just to run current operations.

Sources of Capital

To be able to secure this money, there are two major sources and these are owner capital and borrowed capital. Owner capital is ordinarily the saving of an individual, money somebody has put aside over a period of time. To be able to save, one must earn. In developing countries where people do not have jobs and are generally poor savings are difficult to come by. Indeed one of the major problems of businesses worldwide is lack of capital. a person may have an idea but may not have the money to do it. It is also possible that you may raise capital from friends who may have their own savings. They may give it to you rather than lend you. If you cannot raise your own money, then you borrow. In the business language this is called debt. When you borrow, usually you have to pay money on the money you have borrowed. The challenge with borrowing is that it doesn’t matter whether you are making a profit or not, you have to pay interest to the person who has lent you the money. This of course can be a big challenge especially if you are not operating well or simply not making a profit. Many businesses fail because they are unable to service the loans they borrow from other people. And if one doesn’t have his own money, it means a person cannot undertake a business comfortably.

A Case Study of a Family Business

A research in family that has existed over generation in Iganga town revealed very interesting findings about developing a business without money. The founder of the business way back in the 1940s, became friends with Indians who had settled in Iganga town. Through this friendship, he was given goods to sell on credit. He did not have startup capital. In return, he also got a market among the Indian community to sell several goods.  He was able to accumulate resources without borrowing any money and without owner capital. He passed on the business to his son along with the contacts that he had. The son would also get goods on credit from the Indian community and when the Indian community left in 19o72, the business declined because the network of people who had money or who he was selling to had left. However this business emerged as one of the largest businesses in Iganga town and this individual helped his brothers develop businesses by extending credit to them. His brothers business were also among the most successful.

The 3^rd generation of the business owner, took over the business in the late 1970s and he too became a very successful business man, taking the family business to a higher level. It was because of this business success that the 3^rd generation owner became a  chairman of a Local Council (LC). As Chairman of the LC, he was able to use this position to secure more contacts and ultimately businesses, not only for himself but for his brothers. Being the Chairman of the Council gave the person access to other people which enabled them to have more contacts. A key factor in this family was honesty.

Networks and Social Capital

These contacts of people one knows constitute a network networks of people that develop when people relate have advantages and disadvantages that they create. When people relate to one another, they determine ways of relating. This is called social norm. This network is built on trust and respect among the different members. People are able to do things for others because they relate to them and because they trust them. Others are also able to do the same. This is social capital. Social capital is the benefit that arises as a result of interaction by people who trust one another and who have formed a basis of relating to one another. Social capital therefore is a resource that can be used to achieve benefits that otherwise an individual acting on his own may not be able to achieve. This resource is now used to explain various successful undertakings not only in organizations but among people. The fact that somebody gives you credit and you pay later means you do not need money which otherwise you would have required to buy that product and sell it. This lowers cost of product. The fact that a friend can refer you to a Bank manager or to a supplier who ordinarily you will not be able to access without difficulty is a benefit arising from the relationship among those people.

Benefits of Social Capital

Social capital therefore helps in reducing the cost of production, improving profitability, improving managerial performance and reducing costs that are normally found in the process of doing business. The fact people know one another and relate to one another creates advantages of supportive relationships, cooperation not only among individuals but organizations and indeed in nations. Social capital is a resource, actual potential that emerges from networks of people, even in networks of organizations and indeed networks of nations. It is anything that is based on trust and reciprocity and the social norms that people build among themselves overtime. Social capital is that capital that can give an individual or organization an advantage without involving costs that ordinarily an individual or an organization would want to undertake.

Types of Social Capital

Social capital takes two forms bonding and bridging capital. Bonding capital is that capital that emerges as a result of a relationship between individuals or even organizations. The fact that people relate and trust bonds them together. Bridging capital on the other hand is when social capital arises as a result of an individual linking to another individual who ordinarily they do not relate with. Introducing a person to a bank manager is a bridge. This bridge enables people to access resources from other who they do not ordinarily relate with.

Poverty Series

For a long time coffee was a leading export for Uganda and it gave livelihood to thousands of families. There are stories that coffee farmers in Masaka would sell coffee and buy new vehicles. Indeed Coffee was a source of income and livelihood for thousands of Ugandans. In the current effort to address poverty, coffee is one of the areas that one would look at to give farmers more income however this is not about to happen. In article in the East African Business Week of January 20-26, Samuel Nabwiso narrates the challenge Uganda’s coffee sub sector is going through. He says that revenue from Coffee has problems of quality. We no longer produce high quality coffee. The other is quantity. Indeed he cites the case of Vietnam which 10 years back did not produce as a much coffee as Uganda did. In fact reports are that coffee is a new product in Vietnam. However today Vietnam exports 10-12 million tonnes while Uganda exports 2.5 to 3 million tonnes.

The challenges coffee farmers of Uganda face is continuing to use low level technology in production and drying. This means that productivity of coffee production is low in Uganda. There are also other challenges with coffee. Most of the coffee in Uganda has been left in the bushes and indeed many people have got rid of coffee plantations because of the low value it has. Agricultural production is a key area in removing production in Uganda but we must increase productivity and the quantity. In one of my earlier postings, I said that German which does not produce coffee exports more coffee than Uganda and indeed more than many developing countries. This is a problem of international trade barriers. Unless African countries are enabled to trade fairly, we cannot increase the level of jobs in the country. Indeed the level of jobs created of people gainfully employed is low as long as we cannot export. A big challenge for people in the coffee sector.

Quality mars Uganda coffee

Drying coffee on the ground instead of raised beds is one of the reasons Ugandan coffee is losing value

KAMPALA, UGANDA - Land fragmentation and the failure by many coffee farmers to maintain high standards, has hampered development of Uganda’s coffee sub –sector to better levels of prosperity. 

Recently the African Coffee Academy (ACA) organized a Quality Management System/ Sanitary and Phytosanitary training workshop for coffee exporters, processors and farmers during which this viewpoint was put across.

Jimmy Okello, the ACA Quality Analysis officer said the acreage of land under coffee production in Uganda is declining due to land fragmentation caused by population pressure. 

“Uganda as country has the capacity to produce enough coffee like other African countries, but the challenge is that land fragmentation in all the coffee growing regions in the country. Coffee farmers should stop dividing their lands into small plots this will enable the country to progress in coffee production,” he said. 

The objective of the training was to create awareness about international Sanitary and PhytoSanitary requirements and implications on the local coffee value chain actors.  Basically these requirements have to do with maintaining strict levels of cleanliness in all areas of the industry.

Another objective for the workshop was to build capacity of middlemen, millers and exporters to give effective feedback to coffee farmers and suppliers on the issues of QMS and SPS. 

Making some comparisons, Okello said 10 years ago, Uganda was performing better than countries like Vietnam. But today Vietnam has left Uganda behind in terms of Robusta coffee exports. He also highlighted that farmland in Vietnam has not been affected by land fragmentation as the case in Uganda.

According to the sector report on coffee issued by the agriculture ministry, Uganda’s coffee latest annual exports range between 2.5mt to 3mt. Vietnam currently exports 10mt to12mt.

Okello said many farmers are still using traditional methods in harvesting and drying coffee cherries.  This compromises the agreed provisions of the international market and formalized by the World Trade Organization ( WTO) PhytoSanitary requirements.

Okello explained that noncompliance with the WTO requirements will result in loss of market because of public health considerations.

To ensure that  the whole world  does not consume  food which is risky to the live of the humans animal and the Environment , WTO member countries set up  Sanitary or Phytosanitary( SPS measures  which  all intending exporters of agricultural related products should meet  to ensure food safety worldwide but  despite the existence of such standards which regulates the trade of food related items many countries like Uganda  has been sported as one of the countries which is not implementing some of the measure  and this may affects its  ability to sale agricultural related products on the international market 

“The success of any country’ s international food trade is largely depend on its domestic food trade sanitary and phytosanitary standards and practice are of vital to any food trade SPS measure have become vital due to food trade globalization. Thus for Uganda s domestic and international food trade to be successful, her SPS practices have to be implemented  so as to produce quality and safe food to the market place,” he said. 

Presenting a paper on Coffee Quality Management System for coffee exporters in Uganda the Executive Director of the Coffee Academy Godfrey Batte  said coffee, like other food items, must be handled with quality and standards in mind  throughout the value chain.

 “On occasion, our coffee has been getting contaminated by hazards like biological,  physical ,chemicals and environmental , especially during storage transportation and even during handling our value chain players in the coffee sub- sector should take serious precautions when handling coffee as it is the only to maintain the quality standard of Uganda coffee,” he said. 

To limit those aspects that hurt the local coffee industry, Batte advised the sector players  to use the integrated pests management approach  and adopt proper drying methods like using raised beds. He said this will lower the chances of the country’s cash crop from getting contaminated and losing international market share.

Government cannot do business, not even poorly. (Number 4)

My view about public enterprises is that they are not good for business but I know and I have stated here that public enterprises have worked in Europe. Developing countries were forced to sell these public enterprises because they were a cost to the economy which is true. Under the current economic conditions, it would be difficult for public enterprises to succeed. I have this feeling that under good conditions especially with stewardship conditions  and less corruption, these enterprises may be the solution to some of Africa’s economic challenges. I found this article interesting.

Public enterprises: A second chance, maybe…

Public enterprises (PEs) are the embodiment of a nation’s collective aspirations. They were set up, with the noble idea of enabling relatively underdeveloped economies like ours to fast track development. We also believed that they helped us retain control of the ‘commanding heights’ of our economies. Public finance literature, which is

Western in orientation is replete with justifications of why societies (read governments) need to form PEs. These arguments are legion. These institutions enable governments to deliver socially desirable goods and services that the private sector is ill suited to provide. They also enable governments to influence and, therefore, drive economic activity in a desired direction. For example, governments can set up development banks, which provide low cost loans to investors over the long term. If these banks are significant actors in the economy, they can influence the price of money markedly. They can also be used to kick-start development on new frontiers where private capital is reticent. In the 1960s Uganda Hotels investments in various upcountry towns formed the nucleus around which towns developed. The hotels formed a bulwark for commerce by providing demand for employment, a meeting place in these rural areas and in a sense, a livable environment for newly arriving investors.

Waiting for Godot

Uganda’s reforms have had a significant positive impact and in many cases improved service delivery through the private sector. But for many, this trickle down process is akin to ‘waiting for Godot’. Many suffered the vagaries of structural adjustment as public sector jobs disappeared and the private sector did not take up the slack. The mixture of free-market rhetoric and government intervention has worked particularly badly for developing countries. We were told to stop intervening in agriculture, thereby exposing farmers to devastating competition from the United States and Europe. Our farmers might have been able to compete with American and European farmers, but they could not compete with US and European Union subsidies. Not surprisingly, investments in agriculture in developing countries faded, and a food gap widened in many countries with inclement weather patterns. Subsidized products under PL 480 ‘From the American People’ are a very stigmatizing reminder of failure to take care of our own!

Things seem to be changing though

According to American economic guru Joseph Stiglitz, the neo-liberalism, that grab-bag of ideas based on the fundamentalist notion that markets are self-correcting, allocate resources efficiently, and serve the public interest well seems to be on the wane. It was this market fundamentalism that underlay Thatcherism, Reaganomics, and the socalled “Washington Consensus” in favor of privatization, liberalization, and independent central banks focusing single-mindedly on inflation. For a quarter-century, there has been a contest among developing countries, and the losers are clear: countries that pursued neo-liberal policies not only lost the growth sweepstakes; when they did grow, the benefits accrued disproportionately to those at the top.

We now know that markets are not efficient and it is a fallacy to believe that they always lead to optimal resource allocation. The American housing crisis and its fall out is all too obvious as a bad experiment in liberalism. Left to their own devices, markets will allocate resources to the most profitable sectors of the economy, without necessarily optimizing the desired outcomes because the priorities of the private sector do not necessarily align with the short and long-term keyperformance indicators of a government or the economy. Thus, even as we liberalized, there was a greater need for regulation of the private sector to create a level playing field.

Private sector led is necessary but...

What we have since learnt is that private sector led growth is necessary but not sufficient for economic transformation in poor countries like Uganda. The private sector is still small and poorly resourced. Investors in the private sector are also profit driven rather than socially oriented. It is therefore difficult to use only tax incentives to divert investment away from Kampala, if that is where the largest market and skills are located.

In the past, through Uganda

Development Corporation (UDC), government set up several large-scale investments were geographically distributed and thus made an impact on different regional sub economies. Today these investments have been run down and it is not practical to expect the private sector to invest in remote areas purely for purposes of those areas regeneration. Thus the critical and strategic role of a more efficiently managed UDC remains relevant to our development agenda. Nucleus activities as a basis for regenerating upcountry towns are a must and this does not lie within the remit of private enterprises. Government must reenergize and efficiently manage its social investment programmes through vehicles like UDC, Uganda Development Bank Limited (UDBL) and other strategic vehicles. These strategic areas include energy, infrastructure and social services – health and education.

Subjecting such sectors to market forces without any form of regulation may result in failure to achieve government objectives such as balanced growth and wealth redistribution. It is true that many of the PEs that were eventually privatized were non performing. But most of the privatised PEs had been formed by nationalizing companies under the 1970 ‘Move to the Left’ and the 1972 ‘Economic War’ policies. Indeed, government had no business making soft drinks or tobacco! That however, does not negate the strategic importance of a public transport system, which cannot be commerciallydelivered by a private sector operator on its own. That is the legacy of UTODA’s mess in Kampala – failure to run a rationally managed transport system. Improving pay in the public service with specific emphasis on social services (education and health) and eliminating rent seeking behaviour that debilitates government programmes is a must. One of the problems created by a poor public sector pay is corruption. Powerful, but poorly incentivized public servants derail government programmes by: not attending to their mandate and key service delivery programmes, diverting resources meant for service delivery for their own use, forcing the intended beneficiaries to ultimately pay for services that have been already paid for through the consolidated fund and not regulating PEs under their docket effectively. Indeed the failure of PEs seems to have been a direct result of poor governance rather than the original flawed thinking that they did not work. In many instances, services have not been delivered because the public sector pay is not performance based and the intended beneficiaries lost the moral authority to challenge service delivery after abolition of local poll taxes. In addition, especially in the case of local government, the introduction of elective office has muddled the political and civic roles of public office. Efforts by local government leaders to deliver services are often denigrated by voters who threaten not to vote for serious leaders. In Lwengo district, the LC chairperson, one George Mutabaazi, was warned that he would lose votes in the next election for haranguing his constituents to build better houses. The general result of the mixed roles is that those charged with the responsibility of service delivery are constrained by the need to pander to populist and laissez faire attitudes. So maybe, as with changing times, PEs will have a second lease of life in some sectors. At least we now know what makes them work and what makes them fail. According to Stiglitz again, there is a mismatch between social and private returns. Unless they are closely aligned, the market system cannot work well. Neo-liberal market fundamentalism was always a political doctrine serving certain interests. It was never supported by economic theory. Nor, it should now be clear, is it supported by historical experience. Learning this lesson may be the silver lining in the dark cloud now hanging over the global economy.

From Media

Government Cannot Do Business Not Even Poorly. (Number 3)

The debate on whether can start or run business will never stop. Many European countries have successful government owned companies and yet countries like the United States do not have these types of companies. The decline of the United Kingdom in the 60s and 70s was attributed to the growing public sector. The revival of the UK was attributed to entrepreneurship introduced by Margaret Thatcher in the 80s. Many African countries followed this privatization effort which was dictated by the multi-lateral institutions especially the IMF and World Bank. Uganda was no exception. We reduced government ownership of doing business and to date there are hardly any productive enterprises in Uganda. However government has gone ahead to undertake a number of public sector initiatives. The record so far has not been very good.  This story that follows from the New Vision of June 2013 talks about a fish factory built in 2005 that was still unutilized. These are the famous white elephants, the projects that never take off.  The fish processing factory was built in Busia  on the lake Victoria shores to improve fish trade in the area. The factory has a processing factory with cold storage and 8 years later on the factory was not operating. The factory was intended to reduce environmental stress in the region and at the same time improve livelihoods on communities that depend on fish.

The story that follows below tells it all. There are two similar factories in Kalangala which are also idle. Indeed government cannot do business.

Busia’sSh3b Fish Factory Lifeless 

Lake Victoria is under threat mainly by human activities. In a campaign, Save Lake Victoria ending today, Vision Group platforms published investigative articles and programmes highlighting the irresponsible human activities threatening the world’s second largest fresh water lake. Today, we explore how the fish handling facility in Majanji on the shores of Lake Victoria in Busia district is lying idle.

It cost over sh3 billion. It was supposed to be a state-of the- art fish processing facility, complete with storage facilities. But it has only been host to snakes, bats and rats. The fish handling facility in Majanji on the shores of Lake Victoria in Busia district was completed in 2005 under the Lake Victoria Environmental Management Programme.

Lake Victoria Environmental Management Project was a trans-boundary programme designed to achieve and develop global environmental objectives, by improving collaborative management of trans-boundary natural resources of Lake Victoria Basin. It was also meant to reduce environmental stress in the targeted pollution hotspots and selected degraded sub-catchments.

This as a means of improving the livelihoods of communities who depend on the natural resources of the basin. The fish processing facility at Majanji was supposed to help local fishermen process and pack fish for both local and international markets.

The facility had running tap water, a cold room, storage and fish drying facility plus air-conditioned offices. But it was never to be. There was no fish in the lake. Today, the taps are dry. The tables in the offices are covered with bat droppings An extensive network of cobwebs decorates the white walls. The bushy compound is a safe home for reptiles and insects. “This factory is rotting because there is no fish left in the lake,’’ Hassan Omari, a 58-year-old former fishermen says.

He adds that in the 1980s, he used to get two tonnes of fish. “Today, things are bad. There is corruption and bribery and use of small nets,’’ Omari says. He narrates that they fished using 12 to 13 inch nets for Nile Perch as opposed to the small nets used today. Some fishermen use mosquito nets. According to Umari, the smallest Nile perch was 10 -15kg by then.

Today, factories take fish measuring a minimum of 20 inches and weighing 2kg and above. Even this size of fish is rare in Majanji. There are many small boats from Kenya in Majanji scavenging for young fish in the lake. Local fishermen say the Kenyans pay a weekly fee of sh100,000 to fisheries officials to be allowed to sweep the lake clean of young fish. Information from National Fisheries Resources Research Institute NaFFIRI show that the Nile perch has declined from an average of 1.2 m tonnes for the period 1999 - 2007, to about 0.8m today, while mukene has increased from about 0.4 million to 1 million tonnes over the same period.

The increase in the smaller fish species is attributed to the decrease in the Nile perch which preys on them. Nile perch is the top predator. Currently, mukene accounts for about 70% of Lake Victoria biomass. “Government should empower us fishermen to save the lake. Government officials are useless and too corrupt.’’ Omari adds. Jafari Bumali, another fisherman agrees. He says the Government is not serious.

“When I was young, the colonial masters used to quarantine some parts of the lake to allow fish to grow. You could earn a year in jail if caught fishing from a quarantined area of the lake,’’ Bumali explains. He adds that if the Government has failed to patrol the lake, it should at least ban the manufacture and importation of cheap illegal nets. Illegal nets are cheaper costing sh25,000 a piece compared to the recommended size which go for up to sh90,000.

“The Government should bring back Wembley operations on the lake. The officials of Wembley never took bribes. They would get your boats and nets and burn them,’’ recalls Abdu Kasim Byansi 37, a fisherman. Operation Wembley was formed in 2002 in response to organised crime that had brought the city of Kampala to its knees. A military general was put in charge of the Operation Wembley.

Operation Wembley would track down and destroy cells of terrorists and criminals and arrest them without offering a chance for trial in a criminal court. In contrast, this operation brought murders and organised crime in the capital to a halt. Then Wembley Operations spread to Lake Victoria to discourage bad fishing methods using the same tactics.

Byansi was a victim of Wembley. He used to engage in illegal fishing until Wembley officials burnt his nets and boat. “They were right to burn my boat, I thank them. I was wrong. Look at the fish factory, it is rotting. There is no fish. Yes. We want Wembley back.”

Why Government Cannot do Business

Last week, the Vice President His Excellency Edward Ssekandi launched the Uganda Aviation School that was established in 2011 by Captain Mike Mukula.  Having been in the aviation industry from a while as the Last Cahir of Uganda airlines, I had time to learn a bit more about aviation and its challenges with a special reference to Uganda. It is possible that I am still a member of the Interim Board of the Soroti flying school. I am saying it is possible because I am not sure whether the interim committee was resolved. Soroti Flying School was one of Uganda’ s iconic institutions originally East African Flying School until the collapse of the East African Community in 1977. Like many of the companies that were owned by the East African Community, the flying academy rotted due to lack of funding and numerous management challenges. Kenya took advantage of the collapse of the community to grow its own institutions and indeed having taken over the East African Airways which transformed into Kenya airways, Kenya took a leading a position in aviation in the region. Ethiopia was the other regional strong man in aviation.

Ethiopian airlines is today one of the largest airlines in Africa. It outcompetes Kenya on numerous factors. It is government owned. Ethiopian airlines is said to have been the only jewel during the socialist times of Mengistu when he reined in Ethiopia. Ethiopia has developed strong aviation institutions including a training school and capacity to repair its engines. The other regional player is South Africa. South African airways flys literally to every African capital. And South African influence comes with Shoprite, MTN, Woolworth and South African airways. Due to its financial muscle and large economy it has a relatively strong aviation in the industry. It is in these conditions that Uganda attempted to revive the academy.

The flying academy was one of the prides of the region but when the community broke down, the institution deteriorated primarily due to lack of investments in modern equipment and management challenges. I became a member of the interim board given my experience on Uganda airlines and my experience in the education sector. At that time, it was reported that the East African community had requested member countries then only Uganda, Kenya and Tanzania to select centres of excellence to be supported by the community. It is reported that Kenya fronted UTALI College, a leading catering college in the region. I do not remember what Tanzania fronted. But Uganda fronted the flying school. After spending some time to think through the future of academy, we designed a strategic plan and wanted to link the academy to the University. You realize that given the competition by the regional neighbors and the law aviation activities in Uganda, Uganda would not compete with Kenya, Ethiopia or South Africa. We therefore recommended expanding the programme menu of the academy to include non-technical training programmes.

However for the academy to continue to be relevant and pursue its original mission, in competition with regional institutions, we required an investment of USD 3 million. We put up this request to the Minister of Finance through the Minister of Works and Transport unfortunately the money never came. We required new training air crafts, new simulators and new engines. Without these, the academy in its original mission couldn’t fiction.

About 2 years back, I read in the papers that either a new plane or new engine had been bought but the management problem continued. Government cannot do business because here was a noble intention to revive aviation training based in Uganda but government failed that it couldn’t compete with the regional training institutions in Kenya, Ethiopia and South Africa. And even then, they failed to equip the academy and this meant that the country lost pout on having a facility in aviation training. Our idea during the planning was to add the soft courses and not compete head-on with the existing institutions in areas where they had competence but due to government reluctance maybe inability to fund the academy the country lost out. As captain Mukula entered the market, he is doing something we wanted to do 10 years back as a government institution. He is going for the soft courses and it is possible he will mint the money in those courses.

The Madhavani where I am privileged to be a member of the board have a facility to repair the engines. It seems the academy is dead for all intense and purposes but as a government unit, it will limp until a donor gives government a loan to run it. It will then run for a few years but it will definitely not make the money or deliver the service or make the money the regional institutions are making. Government should keep out of business because it cannot do it.

Seeds of Poverty as Disease attack Maize in Kween District.

Our misfortunes never end. There is every attempt to improve the welfare of people in the country and one of the key avenues of self-employment is agricultural production. Farmers because they do not add value, they never get the full benefit of what they produce. Recently, there was an article that said that German exported coffee in worthy billions of dollars yet it doesn’t produce coffee. For the third world countries that produce coffee, because they do not add value, they cannot earn as much as the Germans who export it. Maize production in Uganda is wide spread throughout the country both as a cash crop and a food crop. Most ordinary farmers produce for self-consumption and sell the excess. You can never be wealthy producing maize. Now a maize disease is ravaging through the country. Recently it was in one part of the country, now it is another. These are the seeds of poverty. As they say, from the frying pan, to the fire.