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News analysis Health Business

Ebola Zaire tests Acholi culture How you will benefit from
Uganda’s response to fight HIV the 2019/2020 budget

Issue No. 577 June. 21 - 27 2019 Ushs 5,000,Kshs 200, RwF 1,500, SDP 8

BoU multi-billion
currency saga
What went wrong?

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June. 21 - 27 2019 1
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Issue No. 577 June. 21 - 27 2019

News analysis Business Health Arts Motoring

Cover story
BoU multi-billion currency saga
What went wrong?

5 The Week
30 Comments
WFP sued over Karamoja
contaminated food Counterfeits a threat to
industrialisation: The court
battle between two local
9 The Last Word
battery manufacturers has
Uganda’s trending fashion: brought the issue to the fore
How popular sentiments have
undermined our journalism and
32 Health
blinded our intellectuals from reality
Acholi culture to
14 Analysis fight HIV: Ancient
fireside gatherings
Kampala city’s deadly floods: could tackle stigma
Why experts now want KCCA

35 Arts & Culture


27 Business
Daring the art market:
How you will benefit from the Ugandan goes for solo
2019/2020 budget: It is pro-growth, show in Nairobi
pro-poor; what is important is pushing
for its effective implementation

STRATEGY & EDITORIAL DIRECTOR: Andrew M. Mwenda WRITERS:Ronald Musoke, Flavia Nassaka, Ian Katusiime,
MANAGING EDITOR: Joseph Were Patricia Akankwatsa, Julius Businge.
INVESTIGATIONS EDITOR: Haggai Matsiko DESIGN/LAYOUT: Sarah Ngororano
BUSINESS EDITOR: Isaac Khisa CARTOONIST: Harriet Jamwa

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2 June. 21 - 27 2019
inbox

“We will have to verify those police


arrears before releasing any money.
Take it from me, I am going to hire an
international firm like I have done for
others to verify those police arrears.”Keith
Muhakanizi, Secretary to the Treasury on
Shs163 billion police arrears

Members of Parliament dance after the budget reading.   INDEPENDENT/ALFRED OCHWO

Rebecca Kadaga,
Speaker of Parliament,
signs a poster to mark
the launch of the ‘Girls
Get Equal’ campaign “I want the entire nation to observe a no
by Plan International handshaking/body contact phase until we
at Hotel Africana in
Kampala with a goal are Ebola free. I also want to appeal to you
of advancing gender all to always wash your hands with soap,
equality for girls jik and water.”Minister of Health, Jane Ruth
globally.   INDEPENDENT/
ALFRED OCHWO Aceng, on the Ebola outbreak

Members of the Uganda


Tour Operators Association
joined other Ugandans
to protest the proposed
giveaway of Murchison
Falls for hydropower dam
construction.  INDEPENDENT/ “Is it reasonable for tradition to force
ALFRED OCHWO Mulwana or Nsibambi who had built all his
wealth with hard work to bequeath it to a
lousy nephew?”President Museveni backing
the late former PM Apolo Nsibambi on naming
his daughter as heir

Money Ugandan traders have Money government The volume


Shs180bn lost since Rwanda closed its
border with Uganda
600bn will inject in FY
2019/2020
$740m of Uganda-
Russia trade

June. 21 - 27 2019 3
week

Uganda Cranes in high gear for AFCON ‘19 WFP sued over Karamoja
contaminated food
In March, supplies of contaminated food
in the districts Napak and and Amudat left
296 people sick and four dead and now
an anti-counterfeit body has dragged the
government and World Food Programme
(WFP) to court. The Anti-Corruption
Network (ACN) wants court to declare
that the supply of contaminated food
by to the people of Karamoja violated
international standards. It is alleged
that the victims suffered mental illness,
vomiting, headache, high fever and
abdominal pains in communities resulting
from consuming the super cereal corn
After a 1-0 win over group with hosts Egypt but tournament. “Our chances soya blend supplied to Karamoja Sub-
highly rated Ivory Coast, will play their first group in advancing will be tough region by WFP. In the case filed before
Uganda Cranes enter the game against DRC on June because of the similar level the Kampala High Court, ACN says this
AFCON 2019 tournament 22. Zimbabwe is the fourth of the teams in our group. It was caused by the negligence of WFP. “A
in high gear hoping to put member of Group A. This is will be a difficult match-up declaration that the failure by the health
up a better performance the second straight Nations facing the Pharaohs on their minister and government to cause the
from their 2017 campaign. Cup final that Uganda has home turf amid their pas- reprimand, sanction or prosecution of
Striker Farouk Miya scored been placed in the same sionate fans,” Cranes Coach the first respondent (WFP), its agents or
the goal in a morale-boost- group as Mohamed Salah’s Sebastien Desabre said after servants for the acts and omissions is an
ing win against the West Egypt. The hosts have won it the draw was made in April. act of connivance against the public which
African giants in a friendly a record seven times. Group The month-long tournament is illegal, irrational and procedurally
match played in Abu Dhabi. A has been billed as one of has six groups and 24 teams irregular,” the petition reads in part.
Uganda are in the same the toughest groups in the in total.

Muhakanizi gets three Uganda rejects new Kenyan currency notes


more years at MOF Kenyans were excited are advised to subject
after their Central Bank all flows from and into
President Yoweri retired. He was issued a new series of Kenya to enhanced due
Museveni renewed Kassami’s deputy. banknotes effective May 31 diligence. Please be
the contract of Keith Patrick Ocailap, the but Uganda and Tanzania advised that changing
Muhakanizi, a long deputy Permanent halted the conversion of the Kenyan currency from
serving staff at the Secretary, also got Kenyan Shillings as a mea- old to new banknotes
Ministry of Finance another three year sure to stop possible money can only be done in
for another three contract. Muhakan- laundering with the new Kenya.”  This suspen-
years as the Per- izi has been an series of notes. In a state- accept Kenya Shillings at its sion could see the value of
manent Secretary. integral member of ment Bank of Uganda (BoU) counters with immediate East Africa’s strongest cur-
Muhakanizi joined Museveni’s team on said it had been informed effect,” BOU, the statement rency eroded since people
the ministry as a handling the econ- by the Central Bank of Ken- added, “CBK has also sus- won’t accept to change it. It
young economist omy over the years ya (CBK) that they have, pended currency conversion is not unusual for countries
in 1982 under the but he has also been 2019, with a view to combat and repatriation of Kenya to recall old notes to combat
second Obote gov- involved in contro- illicit flows and counterfeits currency.” BOU added that financial fraud.
ernment and rose versies regarding into Kenya. “BoU will not going forward, “[people]
through the ranks to government spend-
his current position ing and alleged
in 2013 when Chris
Kassami (deceased)
corruption. With his
signature stammer, EU releases Shs10bn to fight Ebola
Muhakanizi an intel-
ligent economist, The European Union (EU) has released to a press statement. Christos Stylianides,
has been the face of an additional €2.5 million (about Shs10.5 the Commissioner for Humanitarian Aid
the NRM govern- billion) for strengthening rapid detection and Crisis Management and EU Ebola
ment’s economic and reaction to Ebola cases in Uganda. With coordinator, said the main task at hand is
management and the country on high alert, the funding comes not only to help the DRC but also assist
performance par- on top of the €17 million (about Shs71.8 neighbouring countries like Uganda. The
ticularly regarding billion) in EU funding for Ebola response funding is helping with surveillance, work
infrastructure invest- since 2018 in DR Congo and prevention with local communities, and boosting local
ment and petroleum and preparedness actions in Uganda, South capacities for these countries to take timely
exploration. Sudan, Rwanda and Burundi, according and effective action.

4 June. 21 - 27 2019
week

More grief in Rwenzururu after Queen mother is buried


to be buried in Kasese when
they have ancestral land in
Bundibugyo. Kibanzanga
commended President
Museveni for being a friend
to their mother, adding that
the royal family has benefit-
ted from that relationship.
Rwenzururu Queen Mother
DRC applies to join EAC Christine Biira Mukirani
died at 85 after her health
As a mark of re-shaping the Democratic deteriorated. Mumbere is
Republic of Congo (DRC) under his reign, Christopher Kibanzanga weeps at the funeral of his mother facing charges of terrorism,
President Felix Tshisekedi (Pictured) has murder and other capital
written to his Rwandan counterpart Paul As if the wounds of wish of burying his mother offences and was given
Kagame, who is the current chairman of the the 2016 attack on the in Kasese, the seat of the tough conditions to travel
East African Community (EAC), seeking to Rwenzururu palace in kingdom was not granted. for the burial of his mother.
join the six member bloc. “This request fol- Kasese are not still fresh, Christopher Kibanzanga, the In the fourteen days end-
lows the ever-increasing trade between the there was more grief in the State Minister for Agricul- ing June 29 during which
economic players of the Democratic Repub- kingdom when the Queen ture, and a younger brother his bail conditions were
lic of the Congo and those of the states of the mother of King Charles to Mumbere ordered the relaxed, Mumbere is not
Community,” he wrote on June 8. The vast Wesley Mumbere, was bur- burial to take place in Bun- permitted to engage in
natural resource-rich central African coun- ied in Bundibugyo, where dibugyo pitting him against any activities, meetings or
try is seeking to join the EAC after various the family reportedly has some royals. Kibanzanga consultations that are not
behind-the-scenes rapprochements. If DRC ancestral land. Mumbere told mourners that it was related to the burial.
joins, it will be a part of a rapidly growing snubbed the burial after his not proper for their mother
bloc consisting of Kenya, Tanzania, Uganda,
Rwanda, Burundi and South Sudan. Tsh-
isekedi wrote of his desire to join the Com- Bobi Wine promoter arrested, whereabouts unknown
munity of regional leaders “so that we can
work together for the development of our Andy John Mukasa Limited, is the official
respective countries and stabilise this part alias Bajjo, an events events organiser for
of Africa.” Tshisekedi has had an eventful promoter who works Bobi Wine. Police
first 100 days where he has already visited closely with Kyad- Spokesman, Fred
Rwanda, Kenya, Uganda and has also just dondo East Member Enanga said that Spe-
concluded a two day state visit to Tanzania. of Parliament, Robert cial Forces Brigade
DRC has been a nation racked by war and Kyagulanyi aka Bobi (SFC) officers arrested
instability since its independence and its Wine was arrested by Mukasa after he post-
rich mineral deposits have mainly fuelled Presidential Protection ed a video on social
the conflicts. The eastern part of the country Guards (PPG) and his media that they have a
has borne the brunt of militia groups and is whereabouts remain plan to oust President
still reeling from an Ebola outbreak that has unknown. He was Museveni from power
claimed an estimated 1,400 lives. President reportedly dumped at Special Investigations before 2021. Wine is the leader of People
Tshisekedi however has taken on his new Division (SID) headquarters on charges of Power, a surging political movement that
job with a quiet optimism dealing with each incitement to violence. Mukasa, the propri- has galvanized the youth against the thirty
challenge one step at a time. etor of Bajjo Events and Marketing Agency year rule of Museveni.

AfricellUG @AfricellUG

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June. 21 - 27 2019 5
week

NGOs feel donor Iran to breach 2015 nuclear deal


squeeze after
corruption claims
NGOs in Uganda are
reeling from the cutback
of funding from The
Democratic Governance
Facility (DGF), the
largest pool of donor
funding in Uganda.
DGF terminated funding
to four NGOs after a
forensic audit unearthed
corruption- a silent vice
in the sector. Sources
say some of the NGOs
have now shelved
projects which were
set to run for months
thanks to the drawback.
Daily Monitor reported
that unsupported
expenditure, outright
theft, improper
procurements and using
the same documents
to account to different
donors, were some
of the issues raised.
“Unfortunately, the
conclusions of the Iran has announced regime. The Atomic have previously said
forensic confirmed it will breach the limit Energy Organisation they will have no choice
incidences of fraudulent on its stockpile of of Iran said it had but to reimpose their
practices, governance enriched uranium on quadrupled production own sanctions, which
issues, and forgery June 27 in a move that of the material, which were lifted in return for
of accountability,” will test the Donald is used to make reactor limits on the Iranian
Swedish Ambassador Trump administration. fuel and potentially nuclear programme. The
Per Lindgarde said The limits were set in a nuclear weapons. Iranian announcement comes at
in a media statement. framework that was set officials however said a time of high tension in
Concerns of financial under a 2015 nuclear deal there was “still time” for the Middle East, with the
impropriety have always with world powers. The European countries to act US accusing Iran of being
dogged the NGO/ civil Trump administration by protecting Iran from behind suspected attacks
society sector and the had for long said the reinstated US sanctions. that left two oil tankers
government has always nuclear deal was a bad one U.K, France and Germany ablaze in the Gulf of
criticised NGOs for their which would only serve have warned Iran not to Oman. Iran has denied any
lack of transparency and to embolden the Iranian violate the deal. They involvement .
accountability.

6 June. 21 - 27 2019
Did you know?
A woman Why monkeys can’t
poses for a
picture with respond to music
a caterpillar-
tracked
Bentley
Continental
GT, which was
modified by
Russian car
engineering
enthusiasts,
during a
demonstration
in St.
Petersburg,
Russia.

If your loved one’s crooning is


music to your ears, the reason appears
to rest with part of brain that is super-
sensitive to pitch. That’s the finding of
a new study offering a fresh look into
what makes us human.
For the research, which aimed to
understand the role of music in health,
researchers compared how human
brains and monkey brains respond
to speech and music. Key finding:
People have a far keener sensitivity to
pitch than our evolutionary cousins,
macaque monkeys.
In the study, researchers played a
series of harmonic sounds, or tones, to
healthy volunteers and monkeys, and
used imaging to see how their brains
responded. They also monitored
brain activity in response to toneless
sounds.
Though the brains of monkeys
and humans had similar hot spots in
response to high frequency sounds, a
Brazil’s Marta, left, celebrates with teammates after scoring the opening goal during the Women’s World brain area called the auditory cortex
Cup Group C soccer match between Australia and Brazil at Stade de la Mosson in Montpellier, France. was far more sensitive to tones among
the humans.
“This finding suggests that speech
and music may have fundamentally
changed the way our brain processes
pitch,” said lead author Bevil Conway,
of the U.S. National Institutes of
Health. “It may also help explain why
it has been so hard for scientists to
train monkeys to perform auditory
tasks that humans find relatively
effortless.”
Conway said the results suggest
that over time the ability to speak
and craft music may have somehow
fundamentally altered the way the
human brain interprets pitch.
In contrast, the macaque’s
experience of the visual world is
probably similar to humans’, Conway
added.
Toronto Raptors forward Kawhi Leonard (2) and Toronto Raptors center Serge Ibaka (9) celebrate with the The findings appear in the June 10
Larry O’Brien Trophy after the Golden State Warriors in game six of the 2019 NBA Finals at Oracle Arena, issue of Nature
Oakland, California, June 13, 2019.

June. 21 - 27 2019
News analysis Health Business
Oil money: big Is chicken healthier Inside URA’s proposed
decisions needed than beef? customs taxes

Issue No. 576 June. 14 - 20 2019


Ushs 5,000,Kshs 200, RwF 1,500, SDP 8

Inbox
Follow us on Twitter @ Museveni
http://twitter.com/#!/ugandatalks locks out oil
investors
It’s Total disaster
Follow us on Facebook @
www.facebook.com/TheIndependentMagazineUganda
www.independent.co.ug

Letters are
welcome ! No bullying on oil
The Editor welcomes short and Refer to: “Museveni locks out oil investors” (The independent June
concise letters from our esteemed 14). His Excellence President Yoweri Museveni is right. Let’s make
readers on topical issues. Please the right decision for the future. I like our man. No bullying, full stop.
send them to:
The Editor, The Independent
Publications Ltd, Wilson Komakech
P.O Box 3304,
Plot 82/84 Kanjokya St,
Kamwokya.
Win-win deal needed on oil
Kampala,Uganda.
Refer to: “Museveni locks out oil inves- see up to the end point, it’s not clear how
tors” (The independent June 14). We need to deal with taxes on such a big deal. If this
Email: editor@independent.co.ug
to get going. In any negotiation, you can’t is not reviewed seriously with a business
have it all. Lose some win some and create mind, nothing will be unlocked.
the win-win situation. There is a bigger gain
Details needed in when oil production activity starts. The issue
stems around taxes and I am disturbed to
Allan

BoU cargo saga


Refer to: “Detailed account in the BOU Mzungu savior killing babies in Mayuge?
currency saga” (The Independent Online
June 15). The company responsible for Refer to: “Is mzungu have been dying since 2012. there is no way people can
airlifting currency must be brought to inves- savior killing babies in Why are parents coming out lose 100 children since 2012
tigation for carrying extra cargo well aware Mayuge? Renee Bach is now? Why would parents and not report it to police
that it is against signed agreement and secu- not a nurse or doctor; over take their children to a death until now. Why didn’t The
rity organs at Entebbe airport who claims 100 babies she treated have camp after many alleged Independent carry out an
unnoticed/unawareness disappearance of died” (The Independent stories of children dying at investigation and dig up to
the cargo after clearance. I think it’s early to Feb.27). This is a tragic sto- the hands of the white lady? the root of the problem and
draw conclusions over this. Most important ry. If at all these stories are Whoever reported this story produce concrete evidence
is, we need to protect and have confidence in true, the leaders in those are on behalf of The Indepen- instead of reporting these
our currency. a mockery leadership. Why dent is an amateur journalist stupid and uninformed
didn’t they follow and inves- who deserves to go back to stories?
Anania la’propeta tigate the death of all those the drawing and learn how
children? There are gaps to do good reporting. This Godfrey Jeje, Portland,OR
in the story though. Babies story is so much half baked,

Thanks BoU
Governor Mutebile Mayuge Mzungu URA should handle
well intentioned BoU currency saga
Refer to: “Detailed account in the BOU
currency saga” (The Independent Online Refer to: “Is mzungu savior killing babies
June 15). Whereas majority of Ugandans in Mayuge? Renee Bach is not a nurse or Refer to: “Detailed account in the BOU
work hard to earn a few thousands for sur- doctor; over 100 babies she treated have currency saga” (The Independent Online
vival, some few unscrupulous Ugandans died” (The Independent Feb.27). The White June 15). To me, I think Bank of Uganda
are printing money for their own! This is not Lady should not be tried by social media. (BoU) should let the public know that the
She surely went with good intentions,
only worrying but also mindboggling, per- currency which was brought is the right
and was swamped by the overwhelming
plexing and intolerable. The culprits should quantity it had ordered to be printed. Then
problems she encountered. There are hor-
be tried in courts of law. I commend Bank the issue of the extra cargo can now be han-
rific stories of desperation and hunger and
of Uganda Governor, Emmanuel Mutebile dled by the Uganda Revenue Authority and
exploitation by external agencies coming out
for saving Uganda from money laundering. also the police should make an inquiry to
of Africa. So this woman should be given
Older people are better in some of these sen- a fair trial before her accusers. Jamaicans how those extra cargos were loaded; mean-
sitive areas. would say” good mi do, tenki mi get!” ing, the company that airlifted the currency
must be aware.
Paul Kilimi Wanda Jean Williams Smith
Olemo tonny

8 June. 21 - 27 2019
The Last Word opinion

Uganda’s trending fashion


By Andrew M. Mwenda
How popular sentiments have undermined our
journalism and blinded our intellectuals from reality

I
t has become increasingly trendy and rate of 16%, claiming an increasing share confrontations. Media and civil society work
fashionable within certain sections of of GDP i.e. rising from 2.9% of GDP in with government to achieve shared goals.
social media in Uganda to denounce the 1997/98 budget to 3.6% of GDP in the Let us now look at the facts of the 2019/20
President Yoweri Museveni. It does 2001/02 budget. Budget, which is Shs32 trillion: the largest
not matter what arguments one makes Kasami argued that if the cost of public portion of it goes to the ministry of works to
or evidence they adduce to back up their administration had grown in tandem with do roads i.e. Shs6.4 trillion (20%), followed
case or the values they stand for. It is just the growth in population, the country by Defense at Shs3.6 trillion, Education
cool to accuse Museveni of looting and would have saved over Shs80 billion for Shs3.2 trillion, Energy Shs2.9 trillion, etc.
destroying Uganda. Many Ugandan other sectors that were critical. He argued Public Administration has fallen from being
journalists, intellectuals and pundits seeking that the reasons for the ballooning cost of number two largest budget item in 2002/03
popular validation of their ideas, afraid to be Public Administration was the growth of to number 12 at Shs908 billion (2.9% of the
“misunderstood”, desperate for approval, or semi autonomous government agencies, budget) in 2019/20. Even if we add Public
plainly emotional and ignorant, pander to missions abroad and the cost of “the political Sector Management, it comes to Shs1.5
popular sentiments in complete disregard of system” i.e. patronage. Here he mentioned trillion (4.5% of the budget and 10th largest
the facts. 62 ministers, 35 presidential advisors, 56 budgetary item).
For instance, Godbar Tumushabe recently RDCs, 56 districts, 305 MPs and the growing Even in the face of these facts, Godbar
sent me a clip of my 2007 TED talk decrying size of the EC. was not willing to change his mind. He
the rising cost of Public Administration on Godbar and I launched an advocacy said nothing has changed. The size of
the budget. He asked what had happened program at ACODE where we campaigned presidential advisors has remained the same
to me now that I no longer denounce against this development. We raised money or increased, which may be true. He argued
Museveni’s excessive expenditure on from the Netherlands government and in that all government has done is separate
political patronage. I replied telling 2006 and 2007 held a series of high profile Public Sector Management from Public
him that nothing had happened to me; seminars. I presented papers on how, since Administration. He did not even care to
something fundamental had happened to 2002, things had gone from bad to worse. I look at the facts i.e. that even when the two
the budget (or Museveni): the cost of Public demonstrated that there had been negligible sectors are combined the improvement is
Administration on the budget had been investment in roads and electricity, sectors big. I must add that not everything under
shrinking in relative terms even though it that are fundamental to future growth Public Sector Management was part of
had grown in absolute terms. I added that prospects. I even presented tables comparing Public Administration.
Godbar and me should share part of the Uganda’s spending on energy and transport I find it difficult to refuse to change my
praise for this change in our nation’s budget infrastructure with other Sub Sahara African mind in the face of new developments
because we played a part. countries – and we were below average. or new facts. I find it dishonest to keep
On May 22, 2002, then Permanent Public officials; especially from the harping on a problem that has been solved.
Secretary to the Ministry of Finance, also Ministry of Finance, and donors attended. Museveni may not have reduced the number
Secretary to the Treasury, Chris Kasami, In the 2008/09 FY government made a of his advisors, districts or size of his cabinet.
gave a profound talk at a public expenditure U-turn and created the Energy and Road These have increased. However, they are
workshop in Kampala. He argued that Funds, and poured money into them. It increasingly taking a much smaller share
there was need for “stronger control over also established UNRA to lead the road of our budget. On the contrary, over the
the expenditures of Public Administration.” construction program. In the first year, the last decade, government has become more
Public administration at the time included Ministry of Works was unable to absorb the developmental, pouring ever increasing
State House, Office of the Prime Minister, money because they did not even have road resources into long term investments like
Ministry of Foreign Affairs, Public Service, designs. However, we at ACODE had scored roads, dams, electricity transmission lines,
Uganda Revenue Authority, Parliament, big: we contributed to the transformation of water systems, etc.
Electoral Commission, and the Ministry of the budget from political patronage to long- Museveni critics have been raising a
Finance. term investments in Transport and Energy. complaint that he has taken too many loans
Kasami made two critical points: first It is possible government (and Museveni) at the cost of increasing debt, which will be
that the budget for Public Administration were already on this path. But there is no borne by our grand children. This argument
had grown too rapidly. Second that the denying that my work with Godbar and is misinformed because it would make
sector had consistently failed to fit within ACODE generally played a vital role in sense only if the loans were taken to finance
its budget, thereby claiming a large share this process and we should be proud of it. today’s consumption. However, almost all
of supplementary budget approvals, which So I replied raising these developments to the loans Uganda has taken lately have gone
negatively affected budget releases of other Godbar, arguing that criticising Museveni into long-term investments to benefit our
sectors. He said that Public Administration is not a fashion for me. The president and grandchildren.
was “currently the second largest sector in government changed to our side and we
the government budget, taking 20% of the should applaud them for it. Changing amwenda@independent.co.ug
total government spending. He revealed that government behavior and policies does not
it had been growing at an annual average always (although sometimes it may) require

June. 21 - 27 2019 9
COVER STORY

BoU multi-billion
currency saga
What went wrong?

10 June. 21 - 27 2019
COVER STORY

T
By Haggai Matsiko on June 17 said that the Acting Director
Currency discovered the anomaly and there
his is a serious issue,” muttered were internal preliminary investigations
Bank of Uganda Governor before the BoU management asked Nakale-
Tumusiime Mutebile when he ma to come in. By now, a week had elapsed.
heard about at it. And stakes were high.
A plane chartered to trans- Could the five other boxes have con-
port new currency notes to tained extra cash? If they did, who had
Uganda from France had on April 27 landed ordered that cash and where was it? These
at Entebbe Airport with cargo not tallying were some the biggest questions.
with the expected central bank order. A memo seen by The Independent about
Mutebile was in a meeting in his office on the matter detailed what exactly BoU had
May 03 but details remain scanty as officials ordered for. The Independent has withheld
at BoU are tight-lipped given the sensitivity these details because it could not ascertain
of the matter. their veracity and also because of the sensi-
Mutebile immediately decided to act. tivity of the matter.
Sources say he called Edith Nakalema, the Tumusiime Mutebile A senior official at BoU, who only accept-
head of the State House Anti-Corruption ed to comment on conditions of anonymity
Unit (ACU). He wanted her team to inves- said from the preliminary findings of their
tigate the events of April 27. Mutebile fol- investigations, the issue boils down to
lowed up later with a letter on May 08. neglect of responsibility by the courier and
“The Governor wanted to be sure what BoU staff who failed to report the “anoma-
was contained in the other boxes was not ly” when they discovered it in France and
currency and the circumstances under later at Entebbe.
which it had ended up on a plane that was These were two separate teams—the one
chattered to carry only BoU cargo,” a source that went to France and the one that went
close to the investigations told The Indepen- to Entebbe. How could they both make the
dent. same mistake?
In turn, Nakalema informed President A desire to answer these questions seems
Yoweri Museveni who gave her a green to have resulted into the arrest of eight BoU
light to get to the bottom of the issue. “I officials from the central bank premises
don’t want to hear anything in the media,” on June.12, a day before the reading of the
President Museveni reportedly sternly national budget. Up until this time, both
added. BoU and the Nakalema team had managed
A lot was at stake as the saga involved to keep the investigation under wraps for a
President Museveni
Bank of Uganda, hundreds of billions of cool one and a half months.
shillings, and two of the world’s biggest Oberthur to print and deliver cash, BoU Away from the BoU team, the other
companies in the business of security and locked in the world’s best logistics com- question was; how could two international
currency printing, and logistics. pany—Kuehne+Nagel. Founded in 1890, companies stake their reputations over only
Because money wears out and the econo- Kuehne+Nagel has some 1,300 offices in over a few million dollars? Two figures have been
my grows, BoU regularly orders fresh bank 100 countries, with around 82,000 employ- reported in press reports as the likely extra
notes from its various suppliers. Some of ees, according to its website. cash that was printed—Shs90 billion ($24
these include; De La Rue, which is based in So, when Kuene + Nagel cargo plane land- million) and Shs200 billion ($54 million).
the United Kingdom; Giesecke & Devrient ed at Entebbe on April 27, many expected The contract BoU entered with Oberthur
based in Lipzig Germany; and Oberthur all to be well. It was supposed to be carrying demands that only the currency ordered by
Fudiciaire from France. The trio is amongst only exactly 20 pallets of freshly printed cash the central bank is carried on the chartered
the best in the small and highly sensitive from Oberthur Fudiciare. These contained plane.
industry of security and currency printing. the cash BoU had ordered and expected to The Independent wrote to both the media
Sometime last year, BoU requested be invoiced for. (Indeed, while dispelling teams of Kuehne+Nagel and the currency
Oberthur Fudiciare, which prints only two claims extra cash was delivered at Entebbe, printer Oberthur Fudiciare. “Why were
of Uganda’s bank notes, to print an undis- a BoU official said that the central bank there other items on the plane that transport-
closed amount of notes. As part of its long has been invoiced for exactly what they ed BoU cash?” The Independent asked.
running contract with BoU, Oberthur was to ordered). But by press time the both had not
deliver these at Entebbe on April 27. However, problems started emerging responded. The Independent could not
BoU had sent a team as normally happens when a BoU team led by a one Milton confirm reports that the courier had since
to witness the loading of this cash in France. Baruku, which came to the airport to receive apologised to BoU.
This team was comprised of the head of the cash, discovered that there were five Insiders say it is highly unlikely such
currency Mbale and the head of currency extra boxes also, which looked similar as companies can enter a deal with private
Kabale BoU branches. They arrived before the 20 they were supposed to receive. They individuals to print extra cash and put their
the cargo and both headed to their worksta- signed for only the 20 and said that is all contracts with the national authority and
tions. they expected. their reputation at stake.
Previously, The Independent understands But it appears once they returned to the A BoU official also told The Independent
that this team used to travel on the same central bank, no one mentioned a thing there is no way individuals at the bank can
plane as the cash. However, the central bank because it was not until May 03 that the Gov- carry out such a move and not be detected.
changed policy. The BoU staff that inspects ernor got to know. It would require coordination across several
the cash travels on passenger planes. The Mary Katarikawe, the Executive Director departments and would leave a paper trail.
cash travels on a cargo plane. Operations at BoU, while appearing on For BoU to order cash, the process starts
As part of its long running contract with Radio One’s prime talk show, Spectrum, with the Currency Department, which falls

June. 21 - 27 2019 11
COVER STORY

Edith Nakalema

under the Operations Function headed by viduals, companies and organisations, he mints because the business of printing mon-
the Executive Director Operations—now added, was cleared after paying taxes. ey is too complex and extremely sensitive
Mary Katarikawa. Apparently, the cargo belonged to over and expensive. It is only a handful of coun-
Such a requisition would have to be based 10 entities including organisations like the tries—China, U.S., India, France, UK, Can-
on proper documentation showing the United Nations, USAID, and individuals like ada, and a few others that print their own
currency that has expired and needs to be businessman Charles Mbire, the chairman cash and have companies that print cash for
replaced and the new currency required as a MTN Uganda, Omar Mandela, the propri- other countries.
result of the growth of the economy. etor of City Oil fuel stations and Café Javas. Until recently, the other evidence of risks
This requisition would then have to be Nakalema has said that the focus of the involved in relying on providers in other
approved by a committee whose members investigation is how this extra cargo ended countries to print cash was the Libya case
are at Executive Directors’ level at BoU. After up on a plane that was supposed to carry of 2011 when at the height of the fight to
all this, the paper work would then go to only BoU cargo. The Independent could not overthrow the late Col. Muammar Gaddafi,
the procurement department. This would verify reports that her unit had since contact- the UK government withheld about £929
handle the procurement process and order ed the courier Kuehne+Nagel to explain the million, £140m of which had been printed by
the cash. circumstances under which this happened. De La Rue, causing a banknote shortage in
Then the accounts department would Despite these clarifications, however, the the country.
come in to pay. And lastly, audit would also story appeared to take another twist with It is incidents like these that last year
come in. Several senior BoU officials would reports emerging that police had raided proponents of a deal in which government
have to be involved and this would leave a homes of officials at the centre of the con- wanted to partner with a German company,
trail of paper work. troversy as part of an investigation into the Veridos Identity Solutions Group, to print
“From the information we have and the alleged printing of unauthorised excess cur- currency in Uganda were citing. The deal’s
preliminary findings of the investigations no rency notes. backers included officials at the Finance
extra money was printed,” the official noted. By press time, official Government Ministry.
Two other institutions—Nakalema’s Unit Spokesperson, Ofwono Opondo had dis- However, Governor Mutebile opposed the
and Uganda Revenue Authority—at the missed the statements attributed to police as move citing concerns the company was not a
heart of the investigations have also noted “misleading”. “known banknote/currency printing compa-
that no extra cash was found in the extra five While currency dealings tend to be highly ny” and the likelihood of “lapses in security
boxes. secretive, Uganda is not the first African causing leakages of printing materials or
Dickson Kateshumbwa, the URA Acting country to get caught up in currency related counterfeits”, which would put the economy
Commissioner General, said in a statement controversies. at risk. Experts say he was right.
to journalists on Saturday June 15 that when Last year, reports emerged that newly And eventually, when the deal was inked,
a privately chartered plane arrived in April, printed notes worth over $ 100 dollars had the Investment minister Evelyn Anite, who
and as normal practice for sensitive cargo, disappeared after arriving at the Freeport of signed the MoU, clarified that money print-
customs facilitated clearance of the currency Monrovia in Liberia. ing, would not be part of the security print-
at the tarmac in presence of BOU officials, Reports indicated that the government ing deal.
aviation security, and other security agen- was trying to determine what happened This incident could, however, rearm those
cies. to containers of Liberian dollars that were in favour of printing currency locally. BoU
He explained that the consignment was brought into the Liberia between 2016 and now faces the biggest challenge to prove that
then loaded on BOU vehicles and taken to 2018 under the administration of Ellen John- its suppliers are reliable and their activities
Kampala with heavy security escort. The son Sirleaf. Many countries like Liberia and do not endanger the economy.
extra cargo, which belonged to other indi- Uganda, do not have their own currency

12 June. 21 - 27 2019
news analysis
By Eric Keels & Joshua Lambert

S
udanese security forces violently re-
moved a protest camp in the capital,
Khartoum, on June 3.
In addition to brutally beating
the pro-democracy protesters, government
troops also fired on the demonstrators. Ear-
ly numbers suggest that at least 61 people
died during the week, though that number
may grow in the coming days.
The deadly violence occurred after
months of citizen protests against the vio-
lent and repressive rule of the longtime
ruler of Sudan, President Omar al-Bashir.
Sudan’s military removed him from office
on April 11. Soon after the coup, talks began
about the transition of power to civilian
rule. There were high hopes among democ-
racy advocates that a new civilian govern-
ment would soon take control of the state.

Sudan to crack
As scholars of armed conflict, we believe
that such reforms are likely to be put on
hold following this episode of government
repression. The findings from our forthcom-

more on protesters
ing research on coups around the world sug-
gest that this state-sponsored brutality may
just be the start of a more deadly crackdown.

A brief history
Since coming to power through a military A government’s perception of these so the time since the last coup matters, too.
coup in 1989, al-Bashir ruled Sudan with an threats is intimately tied to their control of As the estimated risk of a military coup
iron fist. The government routinely engaged the capital city. When governments believe rises, our models show a significant increase
in widespread atrocities as a way to cripple that there is a risk that they may lose control in government-sponsored violence. This is
dissent. of the capital, we have found that govern- particularly true in parts of the country close
This violence was largely directed at the ment elites respond with the use of greater to the capital. When the risk of a coup is
disenfranchised southern and western por- targeted violence toward civilians. high, governments engage in more targeted
tions of the country, in Darfur and what is While coups themselves are rare events, killings of civilians in capital cities, as well as
now South Sudan. Political power is largely the threat of a coup, and leaders’ behavior to the surrounding district. Within the capital,
concentrated in the areas surrounding Khar- avoid it, are more common in fragile states. a 1% increase in coup risk results in 20 addi-
toum. After years of international economic Leaders who are concerned about being tional civilian deaths by government forces
sanctions in response to those human rights unseated may purge the capital of perceived a year.
abuses, in 2018 large groups of citizens dissidents as the possibility of a coup emerg- Additionally, nearly all civilian deaths
in Khartoum, as well as in municipalities es. This was the case in the 1960s and the within the capital take place in countries in
surrounding Khartoum, began to demon- early 1980s in Guatemala, as the Guatemalan the top 25% of coup risk.
strate and call for al-Bashir to step down government killed thousands of suspected
from power. Though the military initially dissidents when they believed the risk of What this means for Sudan
responded by violently suppressing the pro- a coup was greatest. Similarly, the Derg The risk of a coup within Sudan has
tests, the Sudanese Army finally acquiesced regime in Ethiopia killed over 10,000 people increased since al-Bashir’s forced exit from
to popular demands and arrested al-Bashir. in the late 1970s, when the government felt office, as compared to the days leading up to
This recent escalation of violence is not threatened by the growing terrorist cam- his ouster.
the first instance of indiscriminate violence paign inside Addis Ababa. This is largely because past coups increase
by the new military junta in Sudan. On May the risk of future coups, a fact that is not lost
15, soon after the April coup, military forces The risk of a coup on the perpetrators of coups d’état.
opened fire on protesters in Khartoum. With data from the Uppsala Conflict Data Less than two months since the removal of
Sudanese Americans rally outside the Program, we can identify where govern- al-Bashir, pro-democracy advocates within
White House in Washington, Saturday, June ments around the world have used force Sudan have called on the new regime to
8, 2019, in solidarity with pro-democracy against civilians and also where rebel activi- hand over power to a civilian government.
protests in Sudan. AP Photo/Andrew Harnik ty took place between 1989 and 2018. Negotiations on a possible transitional
We also used machine learning methods, power-sharing government have ended
Perceived threats including those employed by CoupCast, with no agreement, and demonstrators have
Our research suggests that there may be the premier scientific model for forecasting increased their demands for the government
greater violence against Sudanese civilians coups. With this, we could predict the risk of to hand over power.
in the coming weeks. We study when and a coup occurring, relative to other countries. Our models suggest that, as the perceived
where governments respond to threats Scholars have found that the risk of coups internal threat grows within Sudan, protest-
through the use of state-sponsored violence is tied to major shifts in economic and polit- ers – particularly those in the capital – are at
– specifically, killings by the government. ical stability. Weak civil society, unregulated risk of being brutally suppressed, with vio-
Potential threats to government control may political competition and economic down- lence only escalating.
be external, such as rebel attacks, or they turns all contribute to a rise in the potential The civilians killed on June 3 may just be
may be internal, such as military coups. risk of a coup. Coups often happen in bursts, the start of a more violent campaign.

June. 21 - 27 2019 13
NEWS ANALYSIS

Ebola Zaire tests


Uganda’s response
WHO warns big outbreaks becoming `new normal’
By Patricia Akankwatsa health deteriorated and the mother sought Museveni on june 18 at State House Entebbe.

O
medical care at Kagando Hospital. The child The President assured Dr. Adhanom
n June 9, a 5-year old boy travelled was vomiting blood, had bloody diarrhea, Museveni said that his government is deter-
from Democratic Republic of Con- muscle pain, headache, fatigue and abdom- mined to contain Ebola but the DRC must
go (DRC) with his mother after inal pain. also deal with the security situation in the
attending a burial of his grandfa- The clinicians immediately suspected Eastern part of that country.
ther who succumbed to Ebola; the deadly Ebola and transferred him to Bwera where “The issue of security is one of the con-
hemorrhagic fever. a sample was collected and shipped to tributing factors to the spread of the Ebola
The grandfather was a pastor who lived in Uganda Virus Research Institute (UVRI) for disease,” Museveni told his guest.
Mabalako Health Zone in Aloya Health Area testing. The boy was confirmed positive The WHO Director revealed that the
about 30 km from Beni in DRC. The mother for Ebola Zaire on the evening of June 11 and efficacy of the Ebola vaccine that was admin-
was of Congolese origin but married to a he died soon after. istered to the people that came in contact
Ugandan and residing in Kasese District in On June 12, his 50-year-old grandmother with Ebola victims, stands at 97.8% success
western Uganda. The Congolese mother had and three-year-old brother also tested posi- which, he said, is deemed as very good in
travelled back to DRC to nurse her father tive for Ebola Zaire. The grandmother suc- combating the threat.
who had contracted the Ebola virus. Beni cumbed to Ebola too. By the time we went to He commended Uganda for always being
and Kasese are about 20km apart. press, 27 people they came into contact with prepared to contain Ebola outbreak whenev-
The health authorities in Beni identified had been line listed for follow up. er it crosses from the DRC.
12 suspect cases from the same family and On June 14, WHO once again controver-
put them in isolation for monitoring. How- What is being done? sially refused to declare the outbreak which
ever, six of the 12 suspect cases escaped and The crossing of Ebola into Uganda has has killed more than 1400 people, a Public
crossed over to Uganda. raised a number of issues. Some experts say, Health Emergency of International Concern
Of the six who crossed to Uganda, four with the DRC border where the outbreak (PHEIC).
were children and two adults with 81 con- has been raging unabated for about a year, “It was the view of the committee that the
tacts in Kasindi and 40 contacts in Mutwan- it was just a matter of time before cases outbreak is a health emergency in the Dem-
ga, areas bordering Uganda in the DRC. One popped up in Uganda. But others say it ocratic Republic of Congo and the region,
of the people who crossed over was the wife should never have happened. On the inter- but it does not meet all (the PHEIC) criteria,”
of the deceased pastor, grandmother to the national scene, there is raging debate about Preben Aavitsland, acting chair of an expert
5-year old boy. the World Health Organisation (WHO) committee convened by WHO, said at a
The child and his family entered the coun- response to the Ebola outbreak in DRC. press conference in Geneva, Switzerland.
try through the market at Mpondwe bypass- The WHO Director General, Dr. Tedros The committee had met for the third time
ing the official border post. Adhanom, visited Uganda to assess the Ebo- after news emerged that Ebola had spread to
But by the next day, June 10, the boy’s la situation and met with President Yoweri Uganda and killed two people. Many infec-

14 June. 21 - 27 2019
NEWS ANALYSIS
tious disease experts and public officials had the repatriation of the five Ebola patients, Ebola free. I also want to appeal to you all
expected, and called for, WHO to declare a including the mother of the deceased 5 to always wash your hands with soap or jik
PHEIC when Ebola broke out of the DRC year old, his two brothers, father and their and water”, said Aceng.
as that would focus global attention and domestic worker. These were successfully Tariq Riebl, the Emergency Response
resources on the crisis. repatriated on June 13. Director of the International Rescue Com-
But who argues that declaring a PHEIC Uganda health minister says that these mittee in the DRC says although the Ebola
could be interpreted as the outbreak being a were repatriated in order for them to access outbreak in the DRC was not declared an
global emergency, which could be counter- medicines for therapeutic treatment which international emergency, the spread of Ebola
productive. “As we have seen with previous are available in the DRC as well receive fam- to Uganda is a clear signal that the interna-
Public Health Emergencies of International ily support. tional community must reset and redouble
Concern, we risk seeing restrictions on travel Uganda’s reaction is informed by the its efforts to work with the Congolese people
and trade, we risk seeing airlines stopping many times the Ebola virus and other and stop the spread of the disease here in the
their flights to the area and we also risk bor- deadly hemorrhagic fevers have struck the DRC.
der closures,” Aavitsland said. country. Outbreaks in 2000, 2012 and 2017 “While Uganda is well prepared to handle
He said all that could hamper public have prompted the health ministry to build this outbreak in the country, as long as the
health efforts in the country which he admit- capacity. disease continues to spread in the DRC, we
ted needs help. At the end of May, the government of will continue to see cases cross international
Uganda has been praised for successfully Uganda and other key stakeholders invested borders and into neighboring countries”.
keeping Ebola at bay until now. According over US$18 million in Ebola virus prepared- Tackling the Ebola outbreak in DRC has
to the BBC, the WHO is warning that the ness and readiness at an Accountability been complicated by conflict in the region -
world is entering “a new phase” where big Forum. between January and May there were more
outbreaks of deadly diseases like Ebola are a The government of Ireland through the than 40 attacks on health facilities. Another
“new normal.” Irish embassy also contributed US$1million problem is distrust of healthcare workers
Dr Michael Ryan, the executive director of towards the preparedness for Ebola. with about a third of deaths being in the
the WHO’s health emergencies programme, “As an embassy that has spent 25 years community. It means people are not seeking
told the BBC that the world is “seeing a very in Uganda, we wanted to provide logistical treatment and risk spreading the disease to
worrying convergence of risks” that are support and strengthen health and make neighbours and relatives.
increasing the dangers of diseases including sure the medicines are made available to
Ebola, cholera and yellow fever. each and every individual. That is why we About Ebola
He said climate change, emerging diseas- stepped in”, said Aine Doody the head of Ebola virus was first discovered in 1976
es, exploitation of the rainforest, large and cooperation at the embassy of Ireland. near the Ebola River in what is now the
highly mobile populations, weak govern- In a precautionary move, the health Democratic Republic of Congo. Since then,
ments and conflict were making outbreaks ministry has vaccinated some 4,700 health the virus has been infecting people from
more likely to occur and more likely to swell workers in more than 150 facilities with an time to time, leading to outbreaks in several
in size once they did. experimental drug designed to protect them African countries. Scientists do not know
The Ebola outbreak in the DRC is the sec- against the virus, which spreads through where Ebola virus comes from.
ond biggest ever in the world after outbreak contact with bodily fluids of those infected, However, based on the nature of sim-
in West Africa that hit six countries infected causing hemorrhagic fever with severe vom- ilar viruses, they believe the virus is ani-
28,616 people and killed 11,310. iting, diarrhea and bleeding. mal-borne, with bats being the most likely
Dr Ryan said as of June 07, the WHO The vaccine is experimental but is estimat- source. The bats carrying the virus can trans-
was tracking 160 disease events around the ed to be 97.5% effective and, according to mit it to other animals, like apes, monkeys,
world and nine were grade three emergen- the WHO, may protect a person for up to 12 duikers and humans.
cies; the WHO’s highest emergency level. months. Ebola virus spreads to people through
“I don’t think we’ve ever had a situation The WHO has offered 30 motorcycles and direct contact with bodily fluids of a person
where we’re responding to so many emer- two multipurpose vehicles to help in surveil- who is sick with or has died from it. This can
gencies at one time. This is a new normal, I lance. The Ministry of health is ensuring that occur when a person touches the infected
don’t expect the frequency of these events to non-gazetted places at borders do thorough body fluids (or objects that are contaminated
reduce.” screening. with them), and the virus gets in through
Many hope the case of the DRC family “We have received 400 doses from the broken skin or mucus membranes in the
was caught quickly enough to avoid farther Democratic Republic of Congo (DRC) and eyes, nose, or mouth. The virus can also
spread. over 4000 doses from WHO which are going spread to people through direct contact with
Uganda’s Minister of Health, Ruth Aceng, to be used in the ring vaccination of contacts the blood, body fluids and tissues of infected
says Uganda’s response team has been in and heath workers who were at the frontline fruit bats or primates. People can get the
preparation for the last 10 months and is unvaccinated,” Aceng said. virus through sexual contact as well.
now in the response phase. Ebola survivors may experience diffi-
“The Health Ministry is ready to curb the Rates of infection cult side effects after their recovery, such
virus,” she says. According to the Ministry of Health, there as tiredness, muscle aches, eye and vision
On June 12, the Ministry of Health, WHO, were three suspected cases of Ebola and over problems and stomach pain. Survivors may
Center for Disease Control (CDC), the Resi- 78 contacts. Of the suspected cases, two test- also experience stigma as they re-enter their
dent District Commissioner (RDC) - Kasese ed negative and only one is infected. communities.
and the Ministry of Health, DRC led by However, the ministry warns that the sit- The signs and symptoms include; fever,
Gaston Tshapenda held a joint meeting to uation in DRC is scary and Uganda is still at severe headache, muscle pain,weakness,
discuss the issue. a high risk of contracting the virus. It is esti- fatigue, diarrhea, vomiting, abdominal
They resolved that all the unofficial points mated that there are over 2000 Ebola cases (stomach) pain and unexplained hemor-
of entry would be manned on both Ugan- and over 1000 deaths of Ebola in the DRC. rhage(bleeding or bruising).
dan and DRC sides and information on any “Each and every person should be alert. I
unusual event shared immediately. want the entire nation to observe a no hand-
At the same meeting, DRC proposed shaking/body contact phase until we are

June. 21 - 27 2019 15
NEWS ANALYSIS

Whenever it rains in Kampala city, chaos ensues.   INDEPENDENT/ALFRED OCHWO

Kampala city’s deadly floods


Why experts now want KCCA to cope with, not fight rain

By Ronald Musoke become rivers. Unlucky victims caught in its lake which contributes a lot of the rainfall

F
way become another statistic of flood deaths. the city receives throughout the year. It is
or hundreds of thousands of This year, the floods have been a city of wetlands; Lufuka, Kansanga, and
Kampala residents, the onset of particularly devastating. On May 26 eight Nakivubo wetlands in its southeasterly
the rain season these days means people were killed in a storm. Property division of Makindye. Mayanja, Lubigi,
suffering, losing property and even valued in billions was destroyed. Nabisasiro, Nasere in Kawempe division,
lives and this year’s rainy season has not In one photograph which went viral on and Nakalere, Nalubaga, Walufumbe and
been any different. social media, a chicken farmer tried to save Kinawataka in Nakawa Division. These are
There is always apprehension and fear hundreds of his chickens by climbing on the the main ones. But almost every part of the
when dark rain clouds twirl above the city rooftop of his house with them. The farmer city has its own wet pan where storm water
and its suburbs. Commotion ensues as later identified as Richard Kanyike, 63, a gathers to wreak havoc.
matatu taxis and bodaboda cyclists and resident of Lufuka zone in Bunamwaya This year, so far, it is the Kikajjo, Lubowa
pedestrians hurry past known flood spots. said he lost over 300 chickens to the floods. and Lufuka areas that have been hardest hit.
Many without better alternatives jostle He described how the water, which kept They are in the Kyetinda flood area; a basin
for shelter to escape the looming downpour. swelling until it rose to the window level of estimated to be about 1.4 square kilometres
Raindrops quickly turn into tropical showers his chicken house, overwhelmed him. between Lufuka and Kansanga wetlands.
within minutes and transform into a full- Kampala sits on the northern shores of Without floods, these would be prime real
blown rainstorm triggering floods. Roads Lake Victoria, the world’s largest tropical estate as it is between the Kampala-Entebbe

16 June. 21 - 27 2019
NEWS ANALYSIS
month of May, the rains do not differ water harvesting, creating “rain gardens,”
in significance when compared to past green parks and open gardens, detention
seasons. ponds, retention basins and associated
“What we have noticed is the intensity,” wetlands.
Mujuni told The Independent. “A lot of rain In some of KCCA’s planned drainage
falling these days occurs in a shorter period projects, the Lubigi Channel which stretches
of time.” a distance of about 3km from Bwaise to
He said the limited drainage channels fail Hoima Road will be expanded again in some
to cope with the run-off which is too much sections to about 40 metres while in other
in a short period. sections it will be as wide as 100 metres.
Mujuni told The Independent that it is in The Lubigi Channel is one of Kampala
the second Dekad—period of 10 days— city’s major channels that evacuate storm
(May 10-20) that Kampala received the most water out of the city when it rains. It forms
rain. It rained on eight out of the ten days. an arc around the city, starting around
On May 11, Kampala recorded 37.5mm Kisaasi in the north of the city and then
of rainfall. The following day, May 12, the stretches westwards passing Bwaise and
weather experts recorded 22.8mm, on May Kawaala, then turns southwards through
13, they recorded a trace (drizzle); on May Busega.
14, they recorded 18.8mm, while over the The channel has feeder arms that stretch
next five days, UNMA recorded 2.5mm, along the Kampala–Mityana Road towards
2.8mm, 3.5mm, 21.3mm and 7.8mm, Buloba, along Kampala–Masaka Road
respectively. towards Kyengera, along Kampala-Hoima
Mujuni says rains become hazardous Road towards Nansana and along the
when an area registers above 50mm. So Mengo-Sentema stretch.
what has been happening in Kampala KCCA officials say the new drainage
where the weather experts have been master plan intends to integrate the natural
registering rains of below 40mm? environment and infrastructure into a
Mujuni says rains measuring 37.5mm cohesive city-wide strategy for drainage
would not normally cause havoc, especially development that minimizes the impact
if the rain is spread over a long period— say of flooding. But some experts argue that
over 24-hours. But, if the same rains fall KCCA’s planned intervention will once
for just one hour, these could create havoc again prove inadequate.
because of intensity. Bashir Twesigye, the executive director
On the deadly May 26, the day the floods of Civic Response on Environment and
caused havoc, the meteorology department Development (CRED), a Kampala-based
registered just 2mm of rainfall over non-profit told The Independent that the
Kampala. But the previous day, more rain biggest challenge in Kampala is human
(19.1mm) had fallen over the city, and the encroachment on environmental resources
day before that, another 8.2mm of rainfall like swamps that needs to be fixed.
had been registered. So the rains which fell Other experts also say Kampala’s
highway and the Lake Victoria hind end on May 26 soaked the ground until it could persistent floods are a result of inadequate
zone of top beaches and hotels; including the take no more. sensitization of the public, unplanned
Munyonyo Commonwealth Resort. Collins Oloya, the commissioner for settlements and poor enforcement
But the plight of residents is now a result wetlands management in the Ministry of mechanisms and the mindset of the
of a mix of the same things that make other Water and Environment says the floods residents who continue to arbitrarily litter
areas flood prone. Stated plainly, nobody ravaging Kampala are as a result of the garbage.
should be living in these areas because they continuous disregard of the environmental Dr. Godfrey Mwesige, a lecturer in the
lie directly in the path of storm waters from laws. Department of Construction Economics
higher lying areas of Makindye, Nsambya, Oloya told The Independent that the people and Management at Makerere University’s
Buziga, and more. who planned Kampala originally built it College of Engineering, Design, Art and
In the past, the storm water could flow on seven hills because they appreciated the Technology told The Independent on June
smoothly into Lake Victoria through the function of the wetlands but these have been 14 in an email that Kampala’s drainage
Munyonyo wetlands. Today, as the city completely destroyed. channels do not only carry storm water but
population has swollen to over 1.8 million, “Now KCCA needs a lot of money to also silt and garbage which constantly blocks
construction pressure has blocked most of control floods—a function which was being the channels.
the natural water drainage routes and no done by wetlands at a much low cost.” He said there has been severe
drainage channels have been constructed to encroachment, reducing the effective
replace them. The result is that even the least Big budget needed primary channel widths to accommodate
amount of rain now causes floods. On April 4, KCCA’s top executives storm water discharges after a sustained
Godfrey Mujuni, the manager Data Centre presented a budget of US$208 million storm. These constrictions act like mini
at the Uganda National Meteorological (over Shs700 billion) to implement a 2017 dams, creating the observed floods on
Authority told The Independent on June 13 drainage master plan that intends to fix 10 the upstream because storm water is not
that most of the rain the city receives is flood-prone areas in Kampala including; being discharged at the same rate it is being
moderate when compared to other flood- Lubigi, Nakivubo, Kinawataka, Kansanga, generated.
prone cities around the world. It should not Nalukolongo, Ggaba, Walufumbe, and Mwesige told The Independent that in
be causing deadly floods. Mayanja. order to solve this problem, there is need for
Mujuni said, for example, although KCCA’s drainage master plan seeks to Government intervention to relocate persons
Kampala received a lot of rain over the control storm water by encouraging rain along the primary channels and swamps.

June. 21 - 27 2019 17
news analysis
Jude Tadeieus Kyobe, a roads engineer Policies would make Kampala a Great 21st respond reactively to floods, and have relied
at the Uganda National Roads Authority Century City?” hosted by Bank of Uganda on purely structural solutions to increase
(UNRA) told The Independent on June 14 and KCCA, Collier said development of flood protection such as constructing higher
that when UNRA was planning to construct the city should be undertaken largely by the dikes and larger drainage systems but they
the Kampala Northern Bypass road which private sector. have found that it is not possible to provide
touches the Lubigi wetland, the authority Kiggundu also told The Independent that absolute protection to city dwellers through
did a comprehensive drainage study of the KCCA needs to start thinking about city structural mitigation measures.
entire catchment. residents, especially property owners, Instead, a new model has evolved
The study found that drainage problems shouldering some of Kampala’s funding known as “flood resilience,” which aims
along the Northern Bypass were caused by burden. at improving the way cities and its citizens
two major issues and both were man-made; “Having property in a livable cope with flooding; rather than fighting
unplanned and uncontrolled construction neighbourhood means the owners’ property floods. Hammond gives the example of the
within the waterway and dumping garbage gaining value,” he said. flood-prone Spanish city of Barcelona which
within the drainage channels causing has embedded the principle of robustness in
blockage. its urban drainage system.
Kyobe says the Lubigi channel is heavily “It has installed underground storage
clogged from Hoima road downstream of tanks with gates which can be controlled
the channel. This means the storm water in real-time,” he said, “Rainfall forecasting
from the elevated areas of Makerere, systems are also being improved so that
Nakulabye, Nalukolongo, Kigaga -Rubaga, emergency services and citizens have the
and even Kyebando, Kawaala is constrained information they need to prepare and
and forced to flow backwards into the respond.”
upstream zones where it comes from. This is Such planning is in line with what
what causes floods. Amanda Ngabirano, a lecturer of urban
The UNRA study, Kyobe says and regional planning in the Department
recommended numerous interventions to of Architecture and Physical Planning at
tackle the drainage problem along the road Makerere University, wants. She told The
corridor. Among the interventions was Independent on June 06 that “floods are about
the construction of high capacity drainage water management and water management
structures as well as replacing existing ones is about planning.”
with larger ones. “If we don’t plan, we plan to fail. We have
“The constructed structures include Andrew Kitaka, KCCA ED failed with water and flooding in Kampala,”
several box culverts at Sentema North, Ngabirano told The Independent.
Namungoona round about, Kalerwe and “We must invest in a comprehensive
Kyebando.” But this is not enough, Kyobe master plan for the city, prioritize its
adds. UNRA intends to engage a contractor implementation, and get rid of some
to continuously desilt and rid the channel structural developments in some
of garbage; especially following heavy environmentally sensitive areas.”
downpours. “Even if our population still requires
Dr. Amin Tamale Kiggundu of the sensitization and attitude change, it is
Department of Architecture and Physical the public sector expected to initiate such
Planning at Makerere University agrees programmes, which should run over a
that Kampala city needs to invest in long period of time,” Ngabirano told The
infrastructure to manage Kampala’s Independent.
floods. The design and construction and She says Kampala’s floods are not all
interconnectivity of drains need to be about drainage channels, but a complete city
improved to avoid clogging and blockage. set-up and land use pattern, based on a plan.
However, Kiggundu also quickly notes Mujuni agrees. He says Kampala too
that the city authority’s failure to decisively needs to change the way it does its things.
deal with floods is due to the fact that it Beti Kamya, Minister for Kampala “We need to strengthen the enforcement
lacks enough resources. He is advocating mechanism to protect the remaining
new sourcing models to overcome the cash Cities and floods wetlands besides improving the tree cover
squeeze. Kampala is not the only city grappling around Kampala.”
“There is a lot of dependence on the with flooding. Abnormal rainfall in 2017 Mujuni added: “It is high time Kampala
central government and donors and this is caused unusual floods in Mumbai, Dhaka, did an upgrade of its only weather station at
not sustainable,” Kiggundu says. and Kathmandu in South Asia killing at least Makerere University.”
He told The Independent that Kampala 1,200 people. Planners in these and many He says Kampala’s economic importance
probably needs to consider public- other cities are trying to respond on how to needs special attention and the government
private partnerships to solve some of its cope. could help by investing in a better weather
infrastructure challenges and insists KCCA In a 2014 paper titled, “Making Cities station network for the city.
needs to learn from other cities that tend to more resilient to flooding,” Michael “Each of Kampala’s five divisions needs
flood. Hammond, a research fellow at the to have a modern weather station so that the
The new financing models Kiggundu is University of Exeter’s Centre for Water meteorologists can understand the rainfall
pushing for are similar to global expert Prof. Systems noted that flooding in urban areas is patterns of each of these divisions,” Mujuni
Paul Collier, the director of the International a partially pressing problem in cities because said, “You find that sometimes what
Growth Centre recommended to KCCA in they are highly concentrated centres of happens in Kawempe may not necessarily
2016. human and economic activity. happen in Rubaga or Nakawa.”
While giving a lecture titled, “What Hammond said cities have tended to

18 June. 21 - 27 2019
news analysis

Andrew Mwenda in March stands in front of buildings of Japan’s oldest surviving private company, Kongo Gumi Co. Ltd in
Osaka, which since 578 AD has done carpentry for the imperial palace, Shinto shrines and Buddhist temples.

The rise of Japan


What made this country transform rapidly from a backward
agrarian society into a modern industrial power
By Andrew M. Mwenda China is doing today. neurial, technical and managerial) of its

H
For many analysts, the reasons for Japan’s people backed by high levels of institutional
ow did Japan, a poor and econom- rapid ascent are located in the culture of its capacity, openness to new ideas, trust and
ically “backward” country rapidly people – their shared norms, values, habits solidarity within the community and obedi-
transform into a modern industry and mentalities. Cultural theorists, therefore, ence to superiors.
power a few years after its initial point to the tendency among Japanese to We should note, however, that by the
contact with the West? I promised to address be obedient to authority, loyal to superiors, time of her exposure to the Western world,
this question last week. Japan opened up punctuality, dedication to assigned tasks, Japan was a much more sophisticated soci-
to the outside world in 1868 during what and speed of execution of duties etc., factors ety compared, for example, to our societies
is called the Meiji Restoration. By 1895, i.e. that ensure high productivity of labour. It is in pre-colonial Africa. Take the example of
within 25 years, it had become one of the difficult to know what is cause and what is the most modern of Western social “inven-
leading global powers alongside Russia, effect: are Japanese developed because they tions”, the company. Japan had the idea
France, UK, Austria, Prussia and USA. In act quickly and efficiently to tasks or do they of a private company 1,300 years ago. The
1905, it crushed the Russian navy in a deci- act quickly and effectively to tasks because oldest surviving Japanese private company
sive battle, becoming the first non-European they are developed? I will return to this sub- is Kongo Gumi. It was founded in 578 AD
country ever to defeat a major European ject later in this article with some evidence. (after Christ) or CE (Common Era). It used to
power. I suspect that countries develop largely do carpentry for the imperial palace, Shinto
Japan’s rapid ascent on the ladder of based on their initial factor endowments. shrines and Buddhist temples. I visited this
global powers is even the more intriguing For many early economists, these factor company in Tokyo in March and it is still in
because it’s neighbors like China and Korea, endowments meant natural resources. This business to this day.
upon their initial contact with the West, did seems to be the major explanation for the For centuries there had been business
not react as quickly and decisively in acquir- high levels of income attained by countries conglomerates in Japan. A 2010 study by
ing Western technology and in rapidly trans- in the Arabian Gulf such as Saudi Arabia, Koreans said there are 5,500 companies
forming their institutions to cope with this Qatar, and the United Arab Emirates. How- in the world today, which have been in
external threat. Instead Japan was later to ever, Japan has little or no natural resources. business for more than 300 years. Of these
colonise both. Of course Korea (its southern Its most important asset has been its human about 3,000 are found in Japan. Therefore
part) was later to rapidly transform just as capital: the skills (administrative, entrepre- the foundations of capitalism were already

June. 21 - 27 2019 19
news analysis

EXHIBITS OF
EARLY JAPANESE
TECHONOLOGICAL
INVENTION
1. Hour glass clock
2. Tea serving Robot
3. Microwave
4. Television
5. Mainframe Computer

20 June. 21 - 27 2019
news analysis
in existence in Japan long before it’s opening Seeing the threat of external invasion and for the present.”
up to trade with the West. This is an import- conquest, the Tokagawa family realised they Beatrice Webb, a leader of British Fabian
ant early endowment Japanese society had could not handle this foreign intrusion and socialism, after her tour of Japan in 1911-12
long before interaction with the West. West- its possible implications. It, therefore, trans- described the Japanese as having “objection-
ern capitalism brought continuous technical ferred power back to the royal family. The able notions of leisure” and that “there is
innovation and modern management to emperor decided to open Japan to trade with evidently no desire to teach people to think.”
Japan. It found a fertile ground because the the West. The emperor did not have absolute She described Koreans as “12 millions of
most important conditions for capitalist power but acted as the British monarch and dirty, degraded, sullen, lazy and religionless
development were already in existence.   even worked with other samurai families to savages who slouch around in dirty white
Take the example of Toshiba, one of the govern.  garments of the most inept kind…”
companies I visited while in Japan. It was The Japan that opened up to the West for Yet these stereotypes, Ha tells us, were
formed in 1875, exactly seven years after the trade was not only advanced in technology, not only about other peoples. Europeans
Meiji Restoration, when the Tokagawa fam- it had a highly literate population. This was traveling through Prussia used to describe
ily handed power back to the emperor and largely because education is a highly valued Germans in the same way. Mary Shelley, a
Japan opened itself to trade with the West. thing in Japan. Even under the Tokagawa Briton, said of the Germans that they were
Toshiba did collaboration work with Thom- Japan was a highly literate society, indeed never in hurry. A French manufacturer who
as Edison in the lighting bulb business, then more literate than western countries even hired Germans complained that they work
worked on telegraph machines, washing for its women. This made modernization “as and when they wish.” John Russell, a
machines, telephones, refrigerators, televi- easier! In those old days, Japanese used to British travel writer of the 1820s said the
sions, cookers, etc. It is the oldest electronic study writing and calculation. There was the Germans were “easily contented people…
appliances company in Japan.  equivalent of university education!  endowed with neither great acuteness of
At the Toshiba museum, I was shown Secondly under the shogunate, many perception nor quickness of feeling.” He felt
the first Japanese attempts at a robot more samurai (soldiers) had grown businesses they were not open to new ideas. Now look
than 200 years ago. It is a teacup-carrying over very many years! There had been, in at the Germans today.
doll. This was later to inform the technol- some way, the development of capitalism. If one has read the writings of Timothy
ogy for clocks. The clock at the Toshiba Its major (but not only) weakness was lim- Kalyegira about Africans today, he would be
museum was made in 1851. It can work for ited access to western technology and mar- struck by how much this Ugandan journalist
about one year after they have rewound its kets. Japan also had a centralised bureaucra- has borrowed from 19th Century European
springs. Tanaka, one of the founders of what cy based on meritocratic recruitment long stereotypes of other societies. The point is
later became Toshiba, used to invent things before western influence or before the West that cultural explanations can be misleading
when he was a kid, like mechanical doors. itself adopted it. The system was open to predictors of a nation’s future trajectory. A
Japan made her first electric lamp in 1878 everyone as it allowed anyone to climb the lot of the observations of laziness as opposed
by Ichusuke Fujioka. Then in 1884 he visited social ladder regardless of background. Any to hard work are mere references to charac-
the USA and met Thomas Edison and learnt kid regarded talented and was ambitious teristics of a backward society rather than
how to make modern light bulbs. In 1890 he could progress to the top.  causes of that backwardness. As societies
designed Japan’s first electric elevator.  This brings me back to cultural theories of move from agriculture to industry, a sense
Upon its opening up, Japan paid western development. For many cultural theorists, of time begins to be cultivated in a people’s
countries for teachers to teach its people Japanese culture with its penchant for punc- social consciousness. Punctuality is, there-
western technology. In 1890 the Japanese tuality, hard work, speed, honesty, trust and fore, a consequence not a cause of develop-
built their first train by themselves. How- diligence is the main explanation behind ment – and the lack of it an impediment to
ever most of the parts were imported: the its rapid development. Yet one wonders development.
locomotive was from England, the wagons whether things like hard work and punctu- One important thing is that Japan did not
from the USA. But the company that built ality (which increase labour productivity) have any religious fundamentalism. During
it was Japanese, the very process Ugandans are causes or consequences of development. the Tokagawa period Christianity had been
who despise Kiira car now denounce and To understand the weakness in these cul- banned! There was Buddhism but Japanese
despise. It seems, therefore, that there was tural explanations, we need to look at the Buddhism is very secular. So Japan was a
diffusion of technology in Japanese society; impressions Europeans travelers had of the secular society. But does this explain her
its interaction with the West only sharpened Japanese. rapid adoption of Western technology? Max
it. In his book, Bad Samaritans, Ha-Joon Weber had argued that the protestant ethic
However, all these developments took Chung, a South Korean economist at Cam- was responsible for the raise of capitalism.
place within a specific political context. bridge, has a host of stories to tell about this. However, when the catholic nations of Por-
Before the Meiji Restoration in 1868, Japan In 1905, an Australian management consul- tugal, Spain and Italy rapidly industrialised,
had had nearly 300 years of peace and stabil- tant who had been invited by the Japanese this argument lost a lot of its shine.
ity. During this period (1606 to 1868) under government told its bureaucrats: to see your Cultural theorists have argued that
the leadership of the Tokagawa family, men at work made me feel that you are a Korean and Chinese culture was built on
Japan was integrated into one nation by cre- very satisfied easy-going race who reckon Confucian fundamentalism, which said
ating one central authority under the lead- time is no object.” Sidney Gulick was an making profit is a bad thing! Japan did not
ership of the Shogun (military ruler). Under American missionary who lived in Japan for have this anti-money making belief. If you
this shogunate, the emperor reigned but did 25 years from 1888 to 1913. He spoke fluent made money it was good and fun! However,
not rule; he lived in the imperial capital of Japanese, even teaching in Japanese univer- Christianity also used to teach that making
Kyoto (east city) while the Tokagawa shifted sities. money for its own sake is a sin of avarice
the administrative capital to Tokyo (west In his 1903 book, The Evolution of the and lending money on interest was a sin
city). I suspect having a unified national cul- Japanese, Gulick said that many Japanese called usury. As time has shown, neither
ture is an important asset in development. “give an impression of being lazy and are these Christian teachings, nor the Confucian
Then the USA navy under commodore utterly indifferent to the passage of time”. fundamentalist teachings in Korea and
Mathew Perry came to Japan and forced Interestingly, he also found them “emotion- China have stopped the development of
them to open up. There were also the Brit- al, possessing lightness of heart and freedom capitalism in these countries.
ish and the French seeking to enter Japan. from all anxiety for the future – living chiefly

June. 21 - 27 2019 21
How you will benefit from
the 2019/2020 budget
It is pro-growth, pro-poor; what is important
is pushing for its effective implementation

O
By Julius Businge preneurship Programme has been allocated Farmers around Soroti will benefit from
Shs130billion and Shs32 billion respectively. the additional Shs10billion allocated to the
n June 13, Minister for Financial sector reforms including agency Soroti Fruit Factory as working capital to
Finance, Planning and banking, bancassurance, Islamic banking, purchase required raw materials.
Economic Development, and enhanced access to Credit Reference For investors, Kasaija announced a reduc-
Matia Kasaija, delivered the Bureau services, will reduce operational tion in the minimum investment threshold
Shs40trillion National Bud- costs of commercial banks. that allows developers of free zones and
get for the Financial Year There are also opportunities related to industrial parks to be eligible for tax incen-
2019/2020 under the theme “Industrializa- supply of inputs to the new 87 factories that tive from $100million to $50million.
tion for job creation and shared prosperity.” are under construction and the 120 that are He announced plans to reduce the mini-
The new Financial Year, take effect on July at pre-investment stage. mum investment threshold that allows oper-
01, and The Independent has picked oppor- The government is also committed to ators within industrial parks to be eligible
tunities that the new budget presents to its developing several industrial parks by pro- for tax incentives to $10million for foreigners
citizens in various sectors. viding basic infrastructure including roads, and $1million for local investors.
electricity, water and information technology To further support this sector, Kasaija said
Access to credit and communications infrastructure. the provision of Shs428billion next financial
Financial experts have always argued that Fourteen other Free Zones to promote year for electrification of industrial parks
access to affordable finance is an important exports have also been licensed in Arua, Jin- (Shs.147billion), the development of support-
catalyst for the growth of viable private sec- ja; Kalungu, Mpigi, Mukono, Wakiso, Toro- ive export infrastructure in export processing
tor enterprises and job creation. ro, Kampala, and Buikwe. zones and industrial parks (Shs103 Billion)
Now, borrowers will have a chance to and science technology and innovation
access Shs103.5bn that the government has Speeding up industrialisation (Shs178 billion).
allocated to Uganda Development Bank. In Kasaija said in the budget speech that
addition, to support private companies raise the government is fast-tracking feasibility Agriculture sector
equity capital, the Capital Markets Authority studies, including engineering designs, for The new budget is targeting increased
will establish a center to facilitate access to all the proposed industrial parks, developing output of food in addition to creating more
long term domestic and foreign capital on service industrial parks and workspaces, opportunities. Kasaija said construction
the stock exchange. reforming technical and vocational edu- of the major irrigation schemes have pro-
Kasaija said the government is also pro- cation and training to provide the skills gressed and are at different stages of com-
viding an additional Shs40 billion to the required in the job market. pletion- Doho II in Butaleja (48.6%); Mubuku
Microfinance Support Centre for lending to In addition, establishing the industrial II in Kasese (22.5%); Wadelai in Nebbi Dis-
small businesses at affordable interest rates, skills production center at Kampala Indus- trict (18.2%); Torchi in Oyam District (57%);
not exceeding 12% per annum. trial Area (Namanve) to provide skills Ngenge in Kween District (54.1%) and
To the youth and women entrepreneurs, development, innovation and knowledge Rwengaaju in Kabarole district (50%).
the government hopes to continue imple- transfer critical for researchers, industrialists, The government will further support
menting special programmes to enhance innovators and youth in particular will be commercialisation of agriculture through
their access to credit. The Skills Programme prioritised. The center will also address tech- provision of storage facilities and linking
for Youth and the Uganda Women’s Entre- nology gaps while boosting value addition. farmers to agro-processing facilities to sup-

22 June. 21 - 27 2019
business
port agro-industrialisation. Revenue projections
Post-harvest facilities will be built in Graphical presentation Shs40.4trillion Resource
Bunyangabu, Kibuku, Kumi, Kyenjojo,
of most important
envelope
Ntoroko and Nakaseke districts. Delivery
of quality inputs and services including
seed and planting materials, mechanisation,
issues in the budget Shs20.4trillion Domestic revenue projections

Shs18.8trillion
fertilizer, agricultural credit and extension Tax revenues
services are being targeted.
Shs.1.5trillion Non-Tax revenues
Tourism opportunities Sector allocations
The government plans to do aggressive
marketing of Uganda’s tourism in key mar-
kets like South Asia and Europe. It will also
do tourist product development related to
religious, historical, cultural, natural heritage
and agro-tourism institutions. Shs1tn Shs193.7bn Shs6.4tn Shs3tn Shs146.2bn Shs3.4 tn Shs2.6tn Shs1.1 tn
Government will also reduce the min- Agriculture Tourism Works and Energy ICT Education Health Water
imum investment thresholds that allow Transport
investors in hotels and tourist operators to be Analysts eye on improving budget performance
eligible for tax incentives from $15million to
$10million. Effective Avoid Motivate
Deal implementation excessive public
Fight with low and proper or servants
Transport infrastructure corruption absorption monitoring of unplanned through salary
Kasaija said in the New Year, the target for of funds projects expenditure enhancements
completion of paved roads is 6,000 km. He
said rural roads connectivity and low-cost Avoid Transparency Cash
Pay government Procurement
sealing of district roads will be prioritised. politicisation in suppliers management
Road maintenance and rehabilitation of dis- controls
of the budget implementation and treasury
trict, urban and community access roads and single account
national roads will be undertaken.
The rehabilitation of the national airport, Timely
Proper debt Control and Build Audit
the meter gauge railway in the short-term
monitoring of disbursement budget
and the revamping of water transport facil- management of funds to capacity for
revenues URA implementation
ities will be prioritised. The construction of spending
the Kabaale International Airport in Hoima- entities
District, and the operationalisation of the
Uganda National Airline, and the acquisition complete and the Nakivubo stadium is also reinforce other tax reforms like digital
of two more Bombardier regional aircrafts undergoing reconstruction. tax stamps. He added that income derived
have been prioritised. from leasing or letting facilities in industrial
In order to enhance access to tourism sites, Minerals sector parks has been exempted from income tax
an additional Shs57.8billion has been provid- This is another opportunity that the new for 10 years from the date of commencement
ed to UNRA to embark on the South-West- budget intends to provide. Kasaija said of construction.
tourism circuit. In addition, support will be the government will conduct the airborne Withholding tax on long term bonds has
provided for rehabilitation of aerodromes to geophysical survey of Karamoja region. It been reduced from 20% to 10% to encourage
facilitate domestic flights. will also work on the divestiture of Kilembe investment in long term government secu-
Mines on a fast-track basis with an empha- rities but at the same time reduce financing
Energy infrastructure sis on prospective investors with capacity costs to government.
To further support economic activities, to carry out further exploration, following The stamp duty act was amended to
the government plans to have more pow- repossession by government from the pre- provide for a uniform stamp duty payable
er production. The lined up projects are; vious investor. It also plans to fast track the on bank guarantees, insurance performance
Ayago(840MW), the Oriang (392MW), the exploration of the 18 priority mineral target bonds, indemnity bonds and similar debt
Kiba (330MW) and the Uhuru (600MW) areas for rare earth, and metallic minerals to instruments in order to reduce the cost of
hydropower projects will be developed in a level of certified mineral resource as well debt financing and ease tax compliance and
the medium to long term inpartnership with as carryout a review of the licensing rules administration.
the private sector. and regulations to eliminate speculative and There is also going to be VAT exemption
non-performing licenses. on agro-processing, rice mills and agricultur-
ICTs and sports Oil and gas development is also on top of al sprayers. In order to promote investment
The government plans to extend the the government’s agenda. and industrialisation, import tariffs on prod-
National Backbone Infrastructure for ICT to Implementing all these initiatives, Kasaija ucts which are locally manufactured have
cover all districts. This plan will reduce inter- says the government hopes to create a solid been increased.
net costs through the implementation of the base for the economy while creating jobs. The government also plans to purchase
new national broadband policy. The policy and deploy scanners at major ports of entry
will compel telecommunication companies Matters tax into Uganda to facilitate faster clearance of
to provide services to people countrywide. The minister reported that excise duty act goods and curb mis-declaration.
This will enhance improved service delivery was amended to provide for registration of Going forward, critics, however, say
both in Government and the private sector. manufacturers, importers and providers of Uganda’s budget has over the years
In sports, the construction of the national excisable goods and services. appeared to be very good on paper but its
high altitude centre in Kapchorwa is 68% Going into the New Year, he said, this will implementation is the problem.

June. 21 - 27 2019 23
business

Migrant remittances
1.4bn which was almost the same amount as
that from the tourism sector.
In fact, the World Bank and Bank of
Uganda reports say Ugandan citizens in

to hit US$550bn
the diaspora have been sending home over
a billion dollars over the last three years.
In 2017, Ugandans in the diaspora sent
home US $1.4 billion though that figure
fell slightly to US$ 1.312 billion in the
subsequent year.
Catherine Wines, the co-founder of
WorldRemit, a London-based digital money
transfer told The Observer on the sidelines
of a financial inclusion summit in Kampala
last year that their platform had registered
immense growth in money transfer to
Uganda, recording a 150% growth in the
last three years.
“Remittances have supported families for
their basic needs like food, rent, school fees
and hospital bills but, what we are seeing
is that for extended families or people
who have been away for longer, they help
families set up small businesses,” said
Wines.
In November, last year, WorldRemit
Over 200 million migrant workers around the world send home billions of dollars every year. registered 1.5 million transactions sent to
Uganda since it launched its service in 2012.
By Ronald Musoke their own sustainable development goals by The company’s rapid growth in Uganda has

M
2030, said Houngbo. been driven by transfers to mobile money
oney sent home by migrant In 2016, the United Nations designated accounts which have grown by over 150% in
workers from abroad across the June 16 as the “International Day of the last two years.
globe is projected to record a Family Remittances,” to raise awareness World Remit’s mobile-to-mobile model
4% growth this year, hitting the on the transformative impact that migrant supports Uganda’s efforts, to promote
US$550bn mark compared with US$529bn remittances have across the Sustainable financial inclusion as 90% of the recipients
recorded in 2018, according to the latest Development Goals—particularly poverty in rural areas receive their transfers directly
statistics from the International Fund for reduction and access to basic services at the onto their phones.
Agricultural Development (IFAD). household level. But linking the cash flows with financial
Remittances take many forms but are This amount of cash which also surpasses services and, in the process, bringing
usually associated with working migrants foreign direct investment, Houngbo said, millions of people into the financial sector,
that send regular amounts to support their was an impressive figure given that it is just remains a challenge for many governments.
families and communities back home. 15% of the total migrant workers’ earnings— For the UN’s 2030 remittance targets to
One in every nine people around the the rest remains in the host countries’ happen, Marina Manke, the head of the UN
world is directly supported by remittances, economies. International Organization for Migration’s
according to IFAD, the UN agency that Experts say if current trends continue, labour mobility and human development
invests in rural people, empowers them it is projected that US $8.5 trillion will division, said there is continued need for
to reduce poverty, increases food security, be transferred to families in developing cost reduction, increased transparency
nutrition and strengthens resilience. countries over the 15-year life of the UN’s and ensuring that migrants’ equal access
Speaking in Rome on June 14 ahead of 2030 Agenda for Sustainable Development. to financial education and empowerment
celebrations to mark the International Day By then, it is estimated that over US $2 including those offered by digitalization and
of Family Remittances on June 16, Gilbert trillion (on average 25% of remittances other new forms of finance.
Houngbo, the President of IFAD said received) will have been saved or invested. Paul Winters, IFAD’s Associate
money sent home by the world’s 200 million The advantage of these payments is that Vice-President told a forum at the UN
migrant workers is now three times more they usually flow directly into the hands headquarters in New York on June 16 that
than that received in official development of households, which increases household providing better access to remittances and
assistance. income and reduces the likelihood of better use to families through rural financial
“Behind the numbers are the individual households falling into poverty. institutions has had a positive impact in
remittances of US$200 or US$300 that This monetary support has positive effects rural areas by bringing many unbanked
migrants send home regularly so that their on both education and health outcomes and recipients into the formal financial sector.
800 million family members can meet it has been shown to support human capital “Thanks to this inclusive effect, families
immediate needs and build a better future development particularly in children. can now collaterize remittances and access
back home,” he said. Many governments including Uganda financial products, such as savings, credit,
With half of all flows going to rural areas now recognise the crucial contribution of and insurance,” he added, “In fact, it is fair
in developing countries, governments, migrant workers. It is among the top five to say that, in poor rural areas, remittances
regulators and the private sector have an recipient African countries of money from can help to make migration a choice rather
important role to play in leveraging the people living abroad. An April 2018 World than a necessity for so many young people
effects of these flows and, in so doing, Bank report on migration and remittances and for future generations.”
helping nearly one billion people to reach noted that the country received up to US$

24 June. 21 - 27 2019
business

Money Talk symposium


NSSF, experts tell members to save
beyond the 5% they remit monthly
By Julius Businge expensive commercial bank loans in future. were interviewed, 53% of them were found

D
Participants that The Independent spoke to unable to sustain their saving for a year
o you spend less and invest more said they learnt a lot though were not told upon receipt.
of your income a head of your on how to deal with the many competing In addition, 98% of the respondents had
retirement? Will you have enough priorities. no cash left as at the end of first year and that
monetary resources upon retire- “I have learned a lot about saving. What most of the retirees were investing either in
ment? Will there be any impact upon taking they did not tell us is how to deal with the real estate or improving their homes.
your retirement benefits? many responsibilities that take most of the Michael Mugabi, the managing director of
These questions are among the highlights money we earn monthly,” said a one Geof- the Housing Finance Bank said it is now pos-
of the recent NSSF Money Talk symposium frey. sible for prospective home owners to own
that was held at the Kampala Serena Hotel “But what I can say is that, the speakers homes through mortgages, with a Shs1mil-
on June 10. were good on telling us the value of sav- lion monthly repayment period.
The NSSF Managing Director, Richard ing and if I get the opportunity I will save He said 61% of the working class people
Byarugaba, told an estimated 900 mem- more.” live in rented houses and that 90% of house-
bers that “It has become increasingly clear, “I have listened about the value of saving holds live in a rented apartment for up to
demonstrated by research, that for NSSF and realised that I am not doing enough. I three years and then shift yet the amount
members to sustainably benefit from their will do more with my 95% earning that does of rent they meet monthly can enable them
savings, they must plan and seek expert not go to NSSF,” another participant identi- own houses through mortgages.
advice to avoid loss of their life savings fied as Olivier, said. Aeko Ongodia, the founder and chief
because of poor decision-making.” Byarugaba said that on average the Fund executive officer at Xeno Technologies, an
He said it is on this basis that the pension pays out Shs15million to each member at investment advisory firm, said NSSF mem-
fund has introduced a comprehensive finan- retirement – a figure he said is small – and bers need to seek expert advice prior to
cial literacy program – the first ever annual calls for more saving beyond the mandatory making investments in areas of real estate,
investment and wealth management sympo- NSSF percentage. government treasury bills and bonds, in
sium – that will be used as an avenue to urge He added that on average each member equities and or companies listed on the stock
members to save more, wisely. of the Fund holds Shs50million on their exchange to avoid making losses and living
“It is important to consume less and invest account which he said is small for one to a miserable life after retirement.
the balance,” Byarugaba said. “Don’t consult make meaningful investment after retiring. As at June 10, Byarugaba said, the Fund
your family members or relatives; consult has Shs11.4trillion as asset base with a total
investment experts.” Fund’s latest survey of two million customers. However, only
The symposium aimed at encouraging the The symposium comes a few months 800,000 members are active.
members to save beyond the 5% that NSSF after the Fund carried out a survey which
takes from them every month so as to avoid showed that out of the 402 respondents that

June. 21 - 27 2019 25
business

Hospitality infrastructure: Pearl of Africa Hotel


Pearl of Africa Hotel ,one of the businesses owned by Aya Investment Ltd.   COURTESY PHOTO.

Rethinking tax incentives INFRASTRUCTURE DEVELOPMENT 2017 9

Researches, experts say there is limited


evidence to show these offers attract investors
By Patricia Akankwatsa This is enough money to run the This is based on peace and security

T
ministries of water and environment, of persons and their property, good
ax incentives are part of tourism and ICT that have been governance and commitment to
Uganda government’s top allocated a combined budget of Shs fight corruption and respect for the
priorities for attracting foreign about Shs1.46trillion for the new rule of law, skills and infrastructure
investors and new businesses. financial year. development,” he said.
From prospective investments in Now, trade experts suggest that the “It is after these have been fixed that
agribusiness to hospitality, and from government should find new ways of we then talk about tax holidays, tax
steel to textile industries, tax incentives attracting investors rather than rely relief,” he adds.
have remained the big thing in an on tax incentives to attract investors Nicholas Musoke, the supervisor in
attempt to grow the industrial sector. arguing that there is limited evidence Charge of Research and Policy Analysis
But business and tax experts say that shows linkage between the two at the Uganda Revenue Authority
tax incentives make the government variables – tax incentives and new says some of the exemptions have
lose huge revenues that would have investments. indeed been counterproductive to the
otherwise been collected and used in Gideon Badagawa, the executive taxman’s goals.
improving business environment. director at the Private Sector He, however, said some of the
Though accurate data is difficult to Foundation of Uganda told The investors have taken the advantage of
find, a recent study by the Southern Independent in an interview that tax tax exemptions to avoid paying taxes.
and Eastern Africa Trade Information incentives are least on the priorities for “Tax exemptions would not
and Negotiations Institute (SEATINI) attracting investments. be harmful only that some of the
shows that Uganda lost Shs1.4trillion “The major investment attraction is provisions are abused. Investors
in tax incentives in the year 2017/2018. image and reputation of the country. take advantage of loopholes in the

26 June. 21 - 27 2019
business
exemptions and sometimes we lose a realities of each jurisdiction, its in speculative investors who come for
lot of revenue more so when it comes comparative trading advantages and short term gains.
to income tax exemptions,” he said. its immediate and medium-term “The market should be the biggest
Musoke says the many tax sustainable development priorities. attraction for investors. Even when
exemptions have eroded the base Similarly, a research conducted by people look for raw materials and
for URA to collect taxes, limiting its the World Bank Group’s Investment cheap infrastructure, they still have the
potential to raise tax to Gross Domestic Climate Advisory Services in 2010 market (both local and foreign) as the
Product ratio from the current around shows that tax exemptions do not key driver,” he says.
14.7% against a five year target of 18%. attract investments in countries with He said other investment attractions
This comes as the Finance Minister, weak investment climate, inaccurate include available skilled labour and
Matia Kasaija, announced a reduction macro-economic data, lack of skilled research as well as political stability
in the minimum investment threshold labour and bureaucratic red tape for and governance.
that allows developers of free zones
and industrial parks to be eligible Successful countries
for tax incentive from $100million to However, Perera said countries
$50million. such as Canada, Ireland, Mauritius,
Kasaija, who was reading the budget South Korea, Malaysia and Singapore
at the Kampala Serena Hotel on demonstrate that investment
June.13, also announced a reduction incentives can support sustainable
in the minimum investment threshold growth.
that allows operators within industrial “These countries have stable
parks to be eligible for tax incentives political climates and well-developed
to $10million for foreigners and governance and institutional
$1million for local investors. capacity,” he said adding, “This may
This reduction in the investment have allowed them to invest in the
threshold comes amidst an increase in continued upgrading of their Foreign
URA’s tax collection from Shs16trillion Direct Investment credentials.”
in the Financial Year 2018/19 to Shs Fred Muhumuza Gideon Badagawa Going forward, Perera said in the
18trillion in the Financial Year 2019/20. event that the government awards
But supporters of the tax incentives generous tax incentives to attract
including Moses Kaggwa, the Director
of Economic Affairs at the Ministry
Some beneficiaries investors, reforms should be designed
as partial tax holidays for a short
of Finance, Planning and Economic of tax incentives period of time and that they should be
Development says the government performance-based on selected sectors
cannot do away with tax exemptions. and anchor projects.
He says the initiatives are aimed at
attracting investments in the country to
Bidco Oil Refineries Ltd “Some governments also prefer to
target performance based incentives for
accelerate economic growth. capital investments,” she said.
“Many European member states
Incentives vs investment Aya Investments Ltd offered tax credits for capital
Oshani Perera, a researcher at the investment in renewable energy
Canadian-based International Institute projects, and on financial products
for Sustainable Development said Steel and Tube Industries engineered to deliver capital for the
in her study dubbed ‘Rethinking upgrading of student housing and
Investment Incentives’ that whereas retirement homes.”
countries offered tax incentives to She also recommend uniform low
attract investors in the 1960s and Cipla Quality Chemicals tax rate for both domestic and foreign
1970s, with the hope that the resulting investors to enhance levelled playing
losses would be balanced by positive field or eliminate the use of tax
externalities that investors would bring Power Projects incentives altogether.
including jobs, up-skilling, business Similarly, ActionAid executives
linkages, this initiative did not always says governments should eliminate
play out as expected.
“While many economies experienced Kingdom Kampala tax incentives inform of tax holidays,
tax incentives in free trade zones, and
brief Foreign Direct Investment booms, stability agreements (those between
policy-makers realised that fiscal investors and governments that freeze
incentives did little to embed investors tax terms for a period of time).
in the domestic economy and even starting a business. The executives says that in the event
less to convince them to re-invest if The World Bank Group found that of extending a tax incentive, then, it
the wider macro-economic offering lowering the effective tax rate from should be on the basis of a cost-benefit
remained weak,” she said. 40% to 20% raised Foreign Direct analysis, including an assessment
“Many fiscal incentives were offered Investments by 1% of Gross Domestic of the impact on poor people and
in Foreign Direct Investment sectors Product for countries ranked in the vulnerable groups.
where the investment would very bottom of its investment climate report. “The analysis must be made
likely have been made without them.” Fred Muhumuza, an economic subject to public debate, scrutiny
She said the challenge is not to analyst and lecturer at Makerere and parliamentary oversight,” the
design incentives as blunt instruments, University says tax incentives in a executives said.
but to match them with the economic country like Uganda can only bring

June. 21 - 27 2019 27
business
BANKING ENTREPRENEURSHIP

Equity unveils Shs1bn Supreme banking facility Orient Bank partners

O with MUBS
n June 13, Equity said this offering is part of
Bank opened its their business model and

O
second supreme aims to facilitate private
rient Bank has part-
banking branch sector activity that is linked
nered with Makerere
at Bugoloobi – which is to job creation and social
University Business
believed to have cost about transformation. Among the
School, Uganda’s old-
Shs1bn, officials told The features of Supreme bank-
est business education center, to
Independent. Officials said ing are the state of the art
train and facilitate over 30 small
the branch targets clients lounges, dedicated relation-
scale business owners through
that want to be attended to ship managers, boardroom
the Orient Business Academy to
exclusively without going for customers to hold meet-
grow their businesses to the next
through the hustle of lin- ings, teleconferencing and
level. Speaking at the launch of
ing up. Samuel Kirubi, the Equity bank client, Maria Kiwanuka sharing video conferencing facilities
the academy in its third year of
bank’s managing director her banking experience during the launch. and free wireless internet.
running at MUBS, the Bank’s
Managing Director, Julius
Kakeeto, urged all small scale
ICT business owners to take part in
finance literacy programmes to
UNCDF, Sweden sign $15million deal equip themselves with the rel-

S
evant skills to enable them sur-
candinavian nation, – development analyst, vive in the country’s competitive
Sweden has extended economic growth and business environment and also
$15million (Approx. empowerment at the position themselves for growth.
Shs56bn) funding to Embassy of Sweden, said at The Orient Business Academy
the United Nations Capital the signing event at Protea will run on an intensive 10
Development Fund to go about Hotel in Kampala on June weeks training programme
its business in Uganda. The 17, that the programme that climaxes into a graduation
funding, running for the next aims to develop an ceremony at which five top per-
five years, will facilitate UNCDF inclusive digital economy formers will be awarded with up
to implement its new strategy of in Uganda. It will empower to Shs20 million to finance their
“Leaving no one behind in the smallholder farmers, agri- businesses. The MUBS Principal,
digital era” under the “Connect” The Amb. of Sweden to Uganda, Per businesses and refugees Prof. Waswa Balunywa noted
Rural Uganda programme. Lingarde shaking hands with Judith Karl, to access and use digital that programmes such as the
Jenny Krisch, the first secretary the UNCDF Executive Secretary. services. Orient Business Academy hold
the key to eradicating unem-
ployment in the country

BANKING CSR

Afreximbank wins award Kansai Plascon donates to Sanyu Babies Home

T P
he African Export- aint maker
Import Bank Kansai
(Afreximbank) recently Plascon has
received an award donated the
for the African Bank of the first Shs16million
Year at the African Banker proceeds from
Awards 2019 ceremony held the anti-mosquito
on the sidelines of the Annual paint sales to Sanyu
Meetings of the African Babies Home, in
Development Bank. fulfillment of its
Amr Kamel, pledge to donate
Afreximbank’s Executive Shs1,000 from every
Vice President for Business liter of the Anti-
Development and Corporate Mosquito Paint
Banking received the award on sold to different
behalf of the Bank. causes. This follows Plascon’s Managing Director (L), Santosh Gumte on a tour of the home.
The award to Afreximbank the launch of the
was one of two big ones that Kansai Plascon where Plascon pledged to a cause close to their hearts
went to development finance Anti-Mosquito donate paint to various Non- and as such children are
institutions as Admassu Tadesse, Paint (AMP) which Government Organisations. our future. “We need to do
President of Trade Development kicked off with the Santosh Gumte, the Kansai everything that we can to
Bank, was also named African ‘Hold my Hand Plascon managing director ensure that they grow up in
Banker of the Year. to 5’ campaign said Sanyu Babies Home is safe communities.”

28 June. 21 - 27 2019
business

Huawei smartphone
sales decline 40%
By Ian Katusiime As a result, Google said

U
it would no longer allow
gandans could Huawei to use its Android
see less Huawei software for its phones.
phones on the The US says the Chinese
market as they get company - the world’s
caught up in a trade war largest maker of telecoms
between the U.S. and China. equipment and the second
Huawei smartphones are biggest smartphone maker
popular for their strong poses a security risk. This
cameras and long lasting is also due to Huawei’s rise
batteries. as a top manufacturer of
The Chinese smartphone 5G technology- the most
maker is currently reeling advanced cellular network.
from an onslaught by the The Huawei founder had
Shell station staff Madrine Mulindwa and Amos Sewakulya posing
for a picture with one of the winners of the happy hour activation U.S. as part of Donald previously downplayed the
at Shell Ntinda. Vivo Energy Uganda is running a campaign where Trump’s all-out trade war impact of the US restrictions
customers get 10% free fuel on purchases. on the world’s second on the Chinese firm.
largest economy. However, the actions
Huawei founder, by the US have prompted
Ren Zhengfei, has said tech companies around
international sales of the the world to retreat from
Huawei handsets have Huawei. US clampdown
sunk 40% in the past month on Huawei is part of a
since the backlash started. broader push-back against
Speaking at the firm’s the company, over worries
headquarters, Ren also said about using its products in
the company would slash 5G mobile networks.
production by $30bn. Several countries have
Last month, the US raised concerns that Huawei
put Huawei on a list of equipment could be used
companies that American by China for surveillance,
firms cannot trade with allegations the company has
unless they have a licence. vehemently denied.

Waiswa Balunywa (L), MUBS Principal with Julius Kakeeto (R) Orient
Bank MD at the launch of the third edition of the 3rd edition of the
10-week Orient Academy.

Weekly share price movement (June 10)


Security June 10 May 13 Movement
BATU 30,000 30000 00
BOBU 128 129 0.8
CENT 1,225 1,178 4.0
QCL 170 170 00
DFCU 670 700 4.2
EABL 7,593 7,944 4.4
EBL 1,474 1,553 5.0
JHL 14,666 15,229 3.6
KA 132 143 7.7
KCB 1,470 1,544 4.7
NIC 14 14 00
NMG 2,023 2,154 6.0
NVL 330 334 1.1
Ibrahim Kaddunabbi Lubega, the immediate past President of the African
Insurance Organisation hands over a prestigious insurance award in Africa SBU 29 30 3.3
‘Hall of Fame of African Insurance Organisation,’ to Hajjat Aphwa Ssebyala UCHM 18 12 50
during the 2019 AIO Gala Dinner held in Johannesburg South Africa UCL 15 16 6.25
on June.12. Ssebyala serve as the deputy Chairperson of the Insurance UMEME 300 300 00
Regulatory Authority of Uganda. ALSI -- -- --

June. 21 - 27 2019 29
F
By Bonnie Fournier

or 25 years, northern Uganda


was devastated by civil war.
During this time the area’s resi-
dents, many of whom belong to
the Acholi people, were forced
from their homes. They ended
up living in internally displaced camps,
relying on the World Food Programme and
battling a severe shortage of clean water.
Hunger, malnutrition and a lack of adequate

Acholi
sanitation facilities took a dreadful toll. tablishing their role. However, more work
Death rates rose significantly next to the needs to be done with older youth to create
national average rate. Survival was the only interest. Integrating the project into schools
priority. As such, many of the Acholi’s tradi- and using creative methods will make learn-

culture to
tional practices were eroded. ing more formalised, fun, and engaging for
One of these practices was the gathering youth.
around the wang-oo, a central, communal The idea is that this approach will be
fireplace where elements of the culture – grounded in local cultural knowledge.

fight HIV
stories, songs, riddles and parables – were Project activities include using visual art
told and passed on from one generation to (painting, sketching), dance, singing, and
another. theatre to change social and cultural norms,
The wang-oo usually happened in the and directly address various types of stigma.
evenings. It served as entertainment, moral Family, community members, and health
education and conflict resolution. It was
also a sort of informal school for the Acholi.
Ancient fireside care workers will be invited to weekly per-
formance events.
There, information on taboos, rituals and
expected behaviour was passed on. Elders
gatherings could These events, similar to the wang-oo, will
bring together diverse groups of people to
used the time to indirectly correct commu-
nity members’ misbehaviour’s by relating tackle stigma discuss HIV stigma and to participate in
re-creating new behaviours and attitudes
proverbs and folk tales. that demonstrate their moral teachings
Without a formal space to bind the com- health and prolonging life, stigma continues passed on by elders. The hope is that while
munity in the midst of serious social prob- to cripple individuals and communities. My not the wang-oo in its traditional form, a
lems in the camps, the status of elders was previous research, also conducted in Ugan- more modern form will emerge, making the
severely undermined and the continuity of da, has shown that adolescents with HIV traditional practice more appealing.
traditional values from one generation to the face discrimination and bullying in school
next ceased to exist. When people began to and in the broader community. This can lead Restoring cultural values
return to their communities a decade ago to social isolation, school drop-out, depres- The restoration of cultural practices and
during relative peace, many of the tradition- sion and suicide. values will need long term effort and mul-
al practices, such as the wang-oo, were not To address these issues, we are drawing tiple strategies happening at the same time
re-established. from the teachings that traditionally take for sustained change. One such strategy
Now, researchers, Acholi elders, and place around the wang-oo. These demon- happening in northern Uganda is a radio
teachers are working to together to revitalise strate empowering concepts related to self programme that airs every Saturday eve-
the wang-oo. Our plan is to bring the prac- and community, respect for self, peers and ning with local traditional stories, parables
tice into schools in a new way: by using it authority, and responsibility for caring for and riddles told by Elders. Individuals are
as a space where young people can discuss others. And it’s these concepts that will pro- encouraged to call into the show and guess
HIV and the stigma surrounding the condi- vide the inputs for our four-year research the moral teaching.
tion. project intervention to decrease HIV stigma There are other efforts underway to
Addressing HIV stigma through using among school children, teachers and the document traditional knowledge by video
the Acholi’s own local cultural system is an broader community. recording elders as a way to capture the oral
empowering process that will position the During my previous work in Uganda, history of the Acholi people.
role of the elders back into the community. living and working in the country for several Bringing people together through theatre,
It will also provide a valuable space for vul- years, I learned about the many traditional radio, or video in a similar way as the wang-
nerable young people to talk openly about practices that were helping to reintegrate oo has the potential to promote healing and
HIV and stigma and to learn folktales that children who had been abducted during the build resiliency in a society that has lost so
support respect and responsibility. quarter century of civil war back into their much. Addressing HIV stigma through local
communities. I wondered how other Acholi cultural knowledge will support families
Tackling stigma traditional practices could support children and communities to help children become
Adolescents in sub-Saharan Africa in addressing issues such as HIV stigma. healthy productive citizens.
account for 71% of new infections every Some members of our research team have
year. just returned from Uganda where we learnt Bonnie Fournier is Associate Professor,
While antiretroviral therapy is preserving that elders are very much interested in rees- Thompson Rivers University

30 June. 21 - 27 2019
health

400 current medical


practices not effective
Either they don’t work or do more harm than good
By Ana Sandoiu phy screening for breast cancer in women studies (92%) in high-income countries,

M
between 40 and 49 years old. This was ques- while 8% were performed in low- or mid-
edical reversal” is a term that de- tioned in 2009 and the U.S. Preventive Ser- dle-income countries; including China,
fines instances in which new and vices Task Force (USPSTF) advised against it. India, Malaysia, Ghana, Tanzania, and Ethi-
improved clinical trials show A study of 54,000 women who were offered opia. Most of the medical reversals occurred
that current medical practices mammograms starting at age 39 and 107,000 in the fields of cardiovascular disease (20%),
are ineffective or misguided. New research women who were not offered them showed public health and preventive medicine
reveals that there are currently almost 400 only a small decline in the breast cancer (12%), and critical care (11%).
medical reversals. death rate after 10 years. Specifically, the most common interven-
Medical reversals occur when new clinical Each of these examples represents a med- tions involved medications (33%), proce-
research shows that a certain medical prac- ical practice not surpassed by an alternative dures (20%), vitamins and supplements
tice does not, in fact, work or it does more (replaced) but instituted in error (reversed). (13%), devices (9%), and system interven-
harm than good. Now, a new meta-analysis of 3,000 studies tions (8%).
These new studies are superior to their identifies almost 400 cases of medical rever-
predecessors because of things like better sals. The review appears in the journal eLife. Main takeaways from the results
controls, better study design, or larger The study’s senior author, Dr. Vinay
sample size. There are many examples of Prasad, a hematologist-oncologist and asso-
reversal. ciate professor at the OHSU Knight Cancer
Medical reversals often concern med- Institute, comments on the findings.
ications but they can also affect surgical “There are a number of lessons that
procedures. we can take away from our set of results,
For instance, more than a decade ago, including the importance of conducting
researchers and healthcare professionals (randomised controlled trials) for both novel
realised that stenting procedures did not and established practices,” he says.
work for renal artery stenosis and that “Once an ineffective practice is estab-
routine stenting should not be used to treat lished, it may be difficult to convince prac-
stable coronary disease. titioners to abandon its use. By aiming to
In the late 20th century, sudden cardiac test novel treatments rigorously before they
death, particularly during the vulnerable become widespread, we can reduce the
period after myocardial infarction, was number of reversals in practice and prevent
deemed a “worldwide public health prob- Diana Herrera-Perez, a research assistant unnecessary harm to patients,” says Prasad.
lem” A type of heart rhythm, premature at the Knight Cancer Institute at Oregon He adds, “We hope our broad results may
ventricular contractions (PVCs), was thought Health & Science University (OHSU), in serve as a starting point for researchers, pol-
to contribute to such deaths. A new gener- Portland, is the lead author of the new anal- icymakers, and payers who wish to have a
ation of antiarrhythmic therapy was devel- ysis. list of practices that likely offer no net benefit
oped with the ability to suppress PVCs up to to use in future work.”
85 percent of the time. Cardiologists began Analysis finds 396 medical reversals Dr. Prasad cautions that the review has
using these medications in widespread Referring to well-known endeavors to some limitations, such as the small number
fashion. In the late 1980s, the Cardiac Anti- assess the validity of clinical practices, such of journals it includes and the limited exper-
arrhythmic Suppression Trial (CAST) was as the Cochrane reviews, Herrera-Perez says, tise of the reviewers.
conducted to assess the safety of what was “We wanted to build on these and other To overcome such limitations, co-lead
then commonplace. The trial showed that efforts to provide a larger and more compre- study author Alyson Haslam, Ph.D., who is
these drugs (encainide, flecainide, and later, hensive list for clinicians and researchers to also affiliated with the OHSU Knight Cancer
moricizine) caused more deaths. They were guide practice as they care for patients more Institute, calls for experts from various fields
stopped. In another case, vertebroplasty, the effectively and economically.” to critically assess the medical reversals iden-
injection of medical cement into fractured To do so, she and colleagues examined tified in the analysis.
bone, achieved widespread use without over 3,000 randomised controlled trials pub- She says, “Taken together, we hope
good evidence that it worked. In 2005, it lished in three prestigious medical journals our findings will help push medical
was performed more than 27,000 times in over the last 15 years: The Journal of the professionals to evaluate their own practices
the United States. Until a pair of articles American Medical Association (JAMA), The critically and demand high-quality research
published in the `New England Journal of Lancet, and The New England Journal of before adopting a new practice in (the)
Medicine’ in 2009 conclusively showed that Medicine (NEJM). future, especially for those that are more
the procedure was no better than placebo by The analysis discovered 396 medical expensive and/or aggressive than the current
analyzing the outcomes of patients. Verte- reversals: 154 of them in JAMA, 129 in standard of care.”
broplasty was a sham procedure. NEJM, and 113 in The Lancet.
Then there is the routine mammogra- Researchers carried out most of these Source: medical news today

June. 21 - 27 2019 31
comment
By Mukwanason A. Hyuha
Reply to Mwenda on Uganda’s debt
To suggest printing money or ceding national
assets to pay debt reflects utter economics myopia

I
n The Independent (April 26-May 02, 2019 Muhumuza, who holds a PhD Mwenda obviously needs re-reading my
edition), Andrew Mwenda purported (Economics) degree, as a third-rate article possibly for better results. If he had
to respond to my Saturday Monitor economist—as if Mwenda himself understood it, his rebuttal should have
(April 13, 2019) article on Uganda’s holds any or better qualifications in dwelt mainly on the above points. By the
debt sustainability. I have also read Derrick Economics. way, the two textbooks published in 2017
Wintergreen Kitto’s and Dr. Michael  This nth-rate (where he assumes n < are in the area of Monetary Economics
Mugabira’s reactions (The Independent, 3) economist’s failure to state what as I had specified, not “on the economics
May 10-16 edition) plus Twitter comments rate he considers to be the potential of debt” as Mwenda states. Anyway, I
by Moses Odokonyero, Acacia Bengo or optimum, in view of his dispute of believe the following discussion sheds
Ssembajjwe and others on Mwenda’s Muhumuza’s assertion. ample light on these issues
‘rebuttal’ of my article. Did Mwenda  Mwenda’s apparent lack of
understand my article? understanding of the difference Meaning of Debt Sustainability
In my article, I did not aim “to between “necessary” and “sufficient” Previously, I defined: D = total debt
demonstrate that Uganda’s debt is conditions—hence, his assertion without (borrowed funds), R = total interest
unsustainable” as Mwenda alleges. evidence that the debt/GDP ratio of payable on the debt, C = other resultant
Instead, the aim was to shed light on a 50% is a sufficient condition for debt charges (commitment fee, disbursement
number of issues surrounding the subject sustainability in Uganda and elsewhere. charges, bank charges, etc.), and I = total
of debt sustainability in Uganda, and,  Mwenda’s apparently incurable disease (net) income realised by investing the D
in so doing, to discuss the half-truths, of using half-truths, irrelevancies, . Now, let Y = national income, proxied by
myths, irrelevancies and digressions in digressions and superfluous political the gross domestic product (GDP), K = net
Mwenda’s article. undertones in his article—rumblings capital stock, and P = penalties imposed
Issues that had provoked me into that add no value to his discussion. because of failure to service or pay off the
writing the reaction to Mwenda’s article In view of the above, I am strongly debt. Then, note the following tautological
included the following: persuaded to believe that Mwenda is inequalities (where the signs ‘<, >, and
 The self-styled economist appeared not the economist he claims to be. If ≥’ mean ‘less than’, ‘greater than’, and
not to know the difference between a he is, then he is apparently an nth-rate ‘greater than or equal to’, respectively):
stock and a flow—a concept that even economist (where, n ≥ 6). Hence, using I<Y<K
‘A’ level and undergraduate students of Hon. Kahinda Otafiire’s expression, he D < Y < K; in fact, for Uganda, D is said
economics are made aware of. should “leave issues of the generals to the to be 41% of Y
 That, in discussing the relevant topic, it generals”. I < (D+R+C) or I ≥ (D+R+C), as stated in
was not necessary to compare Uganda’s my article
situation vis-à-vis debt sustainability (D+R+C) < Y < K and P ≥ 0
with other counties’ situations. (D+R+C+P) < Y < K
 That the “ability to repay a debt A country, Thus, in theory, a country cannot fail
and its servicing depend on how
the borrowed funds were used or pursuing prudent to settle its external debt obligations,
since if I < (D+R+C), the Y or the K can
invested”, not on whether the interest
rates on the borrowed funds are zero,
policies aimed at be used, given inequality (5) above. For
an individual, this means that he/she
highly concessionary, or commercial. macroeconomic can use either the income realised from
 Mwenda disputing Muhumuza’s
stability
investing the borrowed funds, or use
assertion that Uganda’s economy has other incomes to top up the I, or sell off
been growing below its potential,
without backing his dispute with and related some of his/her capital stock (chickens,
cattle, furniture, houses, land, etc.) to
evidence, or a discussion of issues
of the productivity, absorption,
development goals, settle the debt. For a country, this means
that if the I is insufficient, the Y and K
management and coordination of can actually default can be used. For example, in Uganda’s

on its domestic
borrowed funds, or a mention of the case, the country in practice can cede
leakages (e.g. corruption, capital flights ownership of the Entebbe Express Way
and unwarranted reverse flows, late
release of counterpart funds and donor
and/or foreign debt to the lender (China); which will manage
the fixed asset until all debt obligations
aid, etc.) that lead to suboptimal use of are settled. With respect to Chinese loans,
borrowed funds. this is not theoretical; it is currently
 The apparent reference to Dr. happening in Sri Lanka, Papua New

32 June. 21 - 27 2019
comment
Guinea, Maldives, Laos, etc. Note that I didn’t Intend to Demonstrate That  Discontent with the Museveni Regime: As
Chinese loans bear interest rates of 6% to Uganda’s Debt Is Unsustainable many readers know, I have published
10%, with a short maturity period of 5 to various works on, inter alia, education
10 years—compared to the IDA type of Mwenda correctly states that I did and economics issues in Uganda,
loans discussed in my article. “not bother to state the debt stock, its not because I am discontented with
Further, as Mwenda states, indeed, tax revenues …”. As noted earlier, my President Museveni but because I
the domestic debt can be paid off by objective was not “to demonstrate that believe in objective (scientific) analysis
resorting to money printing. The cost Uganda’s debt is unsustainable”. Being a and telling the truth. If President
here is inflation that will eventually well-trained, professional and practising Museveni or anybody else says
impact adversely on income distribution, statistician and econometrician, if that something that I believe is not right, I
the country’s foreign exchange rate, had been my aim, I would have used will say it is wrong, whether or not I
trade relationships, etc. Eventually, my proven expertise and experience to am (politically or otherwise) opposed
when inflationary expectations set in, present a superior analysis of issues than to the person who said it. At a 2011
the inflation may metamorphose into Mwenda does. Note that my first book KIU graduation ceremony, Hajji
hyperinflation, with complete loss of (Chapter 6) and second one (Chapters 2, Basajjabalaba made a correct statement
faith in the domestic currency, among 4 and 5) contain analyses of some of these that “Hyuha is a person who will say in
other things. This occurred in Germany issues. your face that you’re wrong when you
following the first imperialist war, and, are wrong”. Mwenda: that is me. In any
recently, in Zimbabwe. It should be noted case, is it President Museveni who stated
that the transformation of double-digit that the debt is sustainable?
inflation into hyperinflation is essentially
beyond a country’s control, given It should Most likely, Mwenda is very economical
with the truth. However, I also believe
expectations (see Chapter 6 of my first
textbook).
be that he uses arrogance and derogatory
statements against dissenters to his views,
Consequently, if the I is inadequate, worrisome employs superfluous political overtones,

to
external debt obligations can be settled by and tosses around unnecessary raw data,
resorting to Y or K; and the domestic debt rates and ratios, other statistics, etc. to
can be settled by switching on the money
printing press. Both of these are, however, everybody ward off or repel dissenters, and as a
cover-up for apparent deficiencies in his
extremely undesirable and imprudent.
So, to suggest any of these (as Mwenda
that 20% stock of knowledge.

does) is a great reflection of utter of URA’s Concluding Remarks


collections
economics myopia, policy imprudence In my article, I expressed my opinion
and utopianism as if one were not living that “Uganda definitely needs to worry a
on Mother Earth. If these were prudent,
viable options, most countries would be
in 2019/20 lot about her growing public debt”. This
was and is the considered view of the
using them to solve their debt problems. writer. It is the resultant, common sense
It is, therefore, foolhardy to suggest that evidence deduced from the analysis.
these are viable policy options. This is a hypothesis worth investigating
The debt is sustainable if servicing econometrically or using other data
or amortising it does not cause any analytical techniques.
significant discomfort, distress or sizeable Irrelevancies in Mwenda’s Latest Article Finally, it is gratifying to note that
upheaval—like ceding ownership of this hypothesis appears to tally with
one’s assets, selling off one’s capital stock, As expected, there are additional an IMF analysis (Press Release No.
igniting inflation, over-depleting one’s irrelevancies in this article, including: 19/148, May 7, 2019) that shows that
foreign exchange reserves, incurring  Length of my article: Does length matter? due to ever-rising borrowing for
new debts to pay off old debts, et What matters is the work’s contribution infrastructure, Uganda’s debt/GDP
cetera. Mwenda needs a lecture or two to knowledge plus the powers of ratio is to rise from 41% to 45.7%, 49.0%
to appreciate these common sense (not argumentation and analysis. and 50.7% in financial years 2018/19 to
theoretical) issues.  Theoretical abstractions about debt: As 2021/22, respectively, thereby gradually
Needless to state, Mwenda’s assertion pointed out by Kitto, Mugabira and increasing the risk of distress. Further,
that the ability “to service the debt others, I used common sense and simple it should be worrisome to everybody
depends on government revenue and on analyses to present my ideas; no theories that 20% of URA’s collections in 2019/20
the credit worthiness of a country – which on debt. Mwenda is maybe frightened will be consumed by just interest
allows it to borrow new loans to pay off by inequalities like I > (D+R+C), which payments—more than what is planned
old ones” leaves a lot to be desired. are common sense statements, not to be spent on health or education.
theories—and, hence, he thinks they are
Defaulting on Debt theories! Mukwanason A. Hyuha is a Professor of
It is, therefore, obvious that a country,  Copied notes … to show off: Does it matter Economics based at the Centre for Critical
pursuing prudent policies aimed at whether I used lecture notes? What Thinking and Alternative Analysis
macroeconomic stability and related matters is the correctness and relevance
development goals, can actually default of the narrative contents. Besides, I hyuhama@gmail.com
on its domestic and/or foreign debt. didn’t write the article so as to show off.
Resorting to money printing or use of Y Show off to who? Genuine economists
or K are, in practice, not available policy and other people should follow this
options since they are not only irrational simple analysis; and, indeed, I continue
but also imprudent, naive, myopic, and to receive positive feedback from various
utopian. people.

June. 21 - 27 2019 33
comment
By Peter Nyanzi
Counterfeit threat to industrialisation
The court battle between two local battery
manufacturers has brought the issue to the fore

I
f the ongoing court battle between with the vice. trademark infringement are looked at
two local battery manufacturers For example, the Trademarks Act as a threat to national development,
in Uganda over trademark largely makes such issues a civil international trade and public health.
infringement is anything to go by, matter, which is clearly a disadvantage Global coalitions such as the Anti-
then the issue of counterfeiting and as such cases are not only a big cost Counterfeit Agency (ACA) and Global
trademark infringement still poses a to the company but also take long to Anti-Counterfeiting Group (GACG)
serious challenge to Uganda’s private dispose of. have been formed to deal with the
sector. Just across the border in Kenya, they vice. Indeed, June 26th has been
Following a suit by Uganda Batteries have taken the bull of counterfeits by commemorated as the World Anti-
Ltd (UBL), the Commercial Division the horns. Counterfeiting Day since 1998.
of the High Court recently issued Ten years ago, Kenya passed the It is unfortunate that Uganda is not
a temporary injunction against a Anti-Counterfeit Act 2008 which picking interest in these efforts yet the
company based in eastern Uganda, created the Anti-Counterfeit Authority problem is very serious.
restraining it from manufacturing, as an autonomous State body to The production and sale of
distributing and selling batteries fight counterfeits and trademark counterfeits robs not just the genuine
marked ‘NBL.’ infringement. Its other important role manufacturers and the innocent
UBL successfully argued that the is educating the public and providing consumers but also threatens jobs and
impugned batteries had physical information on matters relating to revenue collection. Why should our
features that were identical to UBL’s counterfeits, fake and substandard excessively lenient legal framework
registered trademarks and were thus products. The Authority’s mandate continue to make the vice profitable at
causing confusion in the market. includes having Police powers to the expense of genuine manufacturers?
This conflict once again brings to the inspect, impound, arrest and prosecute Ironically, both the Government’s
fore an important issue that Ugandan offenders. Small, Micro and Medium
manufacturers and the public have In more developed countries such as Enterprises (MSME) Policy and the
been complaining about for decades the USA, trademark counterfeiting is National Strategy for Private Sector
– counterfeiting and infringement of a very serious criminal offence under Development do highlight the fact that
trademarks. Trademark Counterfeiting Act of competition from fake and counterfeit
Trademark protection is crucial 1984. Offenders face extremely tough products are key bottlenecks to private
to trade as it not only safeguards a penalties of up to $1 million (UGX3.7 sector development, industrialisation
manufacturer who has invested a billion), and/or imprisonment of up to and market efficiency in both local and
great deal of resources in producing a five years. regional markets.
quality product but also the consumers Globally, counterfeiting and Let us strengthen and consolidate
who face risks and loss associated with the Trademarks Act 2010 (Ministry of
hazardous and poor quality products. Justice and Constitutional Affairs) and
Private Sector players in Uganda have the UNBS Act (Ministry of Trade and
for a long time called for a stringent Competition Industry) by putting their mandate
law to fight the vice of counterfeiting
and trademark infringement as from under one Authority and giving that
body more powers.
the existing legal and institutional
frameworks are very weak.
fake and Furthermore, there’s need for
EAC Partner States to expedite the
A few years ago following pressure counterfeit harmonisation of their anti-counterfeit

products
from manufacturers, the Anti- legal regimes.
counterfeiting Goods Bill 2015 was
finally tabled in Parliament. The Bill
sought to criminalise counterfeiting are key The author is a journalist
petersnyz@gmail.com
and infringement on intellectual
property and trademarks. However
bottlenecks
early last year, the Government made a to private
dramatic U-turn and withdrew the Bill
saying it was not necessary. sector
Yet the UNBS Act and the Trademarks
Act 2010 have been criticised as weak,
development
too lenient and incapable of offering
deterrent punitive sanctions to deal

34 June. 21 - 27 2019
comment
By Roger E.A. Farmer
Paying for the welfare state
What if there was a way to raise the money to pay
for pensions and health care without extra taxes?

T
he current value of the U.S. gov- In my book `Prosperity for All’, I call this I would also propose that the UK Treasury
ernment’s unfunded pension and the absence of a prenatal contract. Suppose, start small – for example, by establishing a
Medicare liabilities is $46.7 trillion, counterfactually, that such contracts did Social Care Fund of £100 billion. Assuming
or roughly two and a half times U.S. exist. In this make-believe world, the unborn a 4% equity premium, investing this amount
GDP. Other estimates put that figure much would buy assets that pay off in bad states in shares would return £4 billion per year on
higher. In the United Kingdom, a similar of nature, and they would pay a premium average, or roughly what the UK currently
calculation by the Adam Smith Institute in good states. And perhaps surprisingly, raises in inheritance taxes each year. That’s
yields a £1.85 trillion ($2.34 trillion) “hidden the very existence of those trades would not peanuts, but nor is it enough to fill the
debt time bomb.” And the situation in Swit- eliminate market volatility in the first place. pension gap.
zerland, France, Belgium, Germany, Austria, In reality, however, asset markets are volatile Still, if a trial of that size were successful,
and Spain is little different. It seems that all because the unborn are not able to exploit the scheme could be ramped up. If the Trea-
advanced economies are facing public-fi- arbitrage opportunities. Those opportunities sury were to borrow £1 trillion, equivalent
nance trouble ahead. are reflected in the equity premium. to roughly 50% of UK GDP, and invest this
But, although future generations are not sum in index funds, the expected revenue
Or maybe not. yet around to trade in the asset markets, would be around £40 billion per year – not
What if there really is such a thing as national treasuries can trade on their behalf. far short of what the UK currently raises
a free lunch? What if there was a way to There is a massive free lunch staring us in through corporation tax. That is serious
raise the money to pay for social-welfare the face. You and I can’t exploit it, and nor money, and has a present value of £1 trillion
programs, such as pensions and health can Bill Gates or George Soros. Only the trea- if capitalised at 4%.
care, without imposing extra taxes? In fact, sury of a sovereign country is rich enough to What if the government lost its shirt?
there is: national treasuries should establish arbitrage away the equity premium, because Wouldn’t a market crash of 10% or 20% dev-
Social Care Funds that borrow money at low only it can trade on behalf of the unborn. astate UK public finances?
interest rates and invest the proceeds in the To see how it would work in practice, con- No. In most advanced economies, gov-
stock market. sider the UK. Its GDP is approximately £2 ernments take in the equivalent of at least
According to one study of a century’s trillion, and the value of all traded equities 40% of GDP in tax revenues. The net present
worth of data from 16 advanced economies, in the FTSE 100 index is roughly the same. value of that revenue, capitalised at 4%,
the return from investing in stocks was The UK Treasury would first need to decide is ten times GDP. Governments therefore
6.96% higher, on average, than the return on which assets it was willing to buy. I have have very deep pockets with which to move
government bonds. And there was remark- previously suggested that it should purchase markets if needed. Alternatively, a national
able consistency across countries. Denmark a broad value-weighted index fund con- treasury could choose to absorb its losses by
had the smallest equity premium, of 3.8%, sisting of every publicly traded share. The riding out a major recession. After all, mar-
while Japan’s was the largest at a whopping Treasury would then borrow money and kets cannot remain irrational for longer than
9.89%. invest in the index fund. the treasury of a large advanced economy
There is some evidence that the equity pre- can remain solvent.
mium has been a little lower in recent years, I am not a big fan of government inter-
so let’s conservatively assume that it will be vention in markets. Anyone who suggests
approximately 4% over the next 50 years. In most that there is a free lunch must first explain
This implies that governments will be able to
borrow from the public at a rate of 4% below advanced what governments can do that private
individuals cannot. The explanation, in
the level of stock-market returns. How can
that be, and why hasn’t some rich investor
economies, this case, is simple: governments can
make trades on behalf of the unborn that
arbitraged this equity premium away? governments leave all of us better off. Surely that’s a

take in the
Here, it helps to think of asset markets as better way for national treasuries to pay
existing to allow trades between different for social welfare than trying to squeeze
kinds of people, and specifically to allow the
young to save for their old age. Taking that equivalent of another £40 billion per year from an
already overtaxed population.
approach implies that market volatility has
nothing to do with economic fundamentals.
at least 40%
Rather, it reflects the animal spirits of inves- of GDP in tax Roger E.A. Farmer is Professor of Economics at
tors, who engage in orgies of buying and
selling stocks and shares, fuelled by self-ful- revenues the University of Warwick, Research Director
at the National Institute of Economic and Social
filling waves of optimism and pessimism. Research, and author of Prosperity for All: How
According to this view of markets, volatility to Prevent Financial Crises.
exists because almost all the people that you
and I will trade with in the financial markets Copyright: Project Syndicate, 2019.
are not yet born.

June. 21 - 27 2019 35
comment
By Olga Morawczynski and David Porteous
Africa’s gig opportunity
Why government policies should support and protect
the growing number of freelance or gig workers

T
he growth of digital platforms in workers. For example, drivers working to pensions, is made conditional on reg-
Africa could offer new opportunities for ride-hailing company Lyft in the istering their business and paying taxes,
to bridge the current gap between United States get a voucher giving them a they will have a powerful reason to for-
often-insecure informal work and discount when they visit a doctor, while malise their work.
formal employment. Portable benefits, TaskRabbit workers are provided with Digitisation could enable the formal
which move with a freelance worker from liability protection of up to $1 million. sector to offer a spectrum of benefits
gig to gig, could drive this transition. But these perks are still a far cry from the for workers and responsibilities for
There are already about 300 active dig- health-care and retirement benefits that employers. African labour-market regula-
ital platforms in Africa, employing close companies traditionally offer their full- tors and tax authorities can play a signifi-
to five million workers. They include time employees. cant role in recognising and incentivising
e-commerce company Jumia, which was A growing number of experts and pol- progress along this spectrum. This means
established in Nigeria and now operates icymakers are therefore looking at the taking stock of which benefits workers
in 14 countries on the continent. feasibility of portable benefits, which are value most, and then designing effective
The rise of such platforms has intensi- not tied to a particular job or company. policies that encourage digital platforms
fied the debate about the demise of the Employers would pay a certain per- to offer them. Moreover, such policies
traditional employment contract and centage toward universal benefits for all should ensure that benefits are portable
the persistence of widespread informal work that they commission, regardless and tied to the worker rather than the
employment in Africa. This shift increases of the nature of their contract with the platform, so that people can choose the
the risk of lower wages and lower-quality worker. For example, if an independent ones that suit them.
work. It also restricts workers’ access worker drives one hour for Uber, and Digital platforms should also consider
to critical benefits; including sick leave, walks a dog for another hour on Rover, how to include portable benefits in what
health insurance, workers’ compensation, each platform would contribute an equal they offer to potential employees, such
and employer-funded retirement savings amount toward his or her benefits. This as by setting aside a portion of their reve-
plans. would enable independent workers to nues to finance these perks. Such benefits
Although informal work sometimes accumulate and manage their benefits, could become an increasingly important
provides an adequate income, it often and eventually acquire a safety net like recruitment tool as platforms grow and
traps workers in a cycle of low produc- that of a full-time contracted employee. compete for labour. And unless digital
tivity and even poverty. In most parts With digital commerce estimated to firms take the lead on this issue, they face
of the world, government policies fail to benefit at least 80 million young Africans the risk that governments will force them
support and protect the growing number by 2030, opportunities for gig workers to adapt their business later on – which
of freelance or gig workers, forcing them will increase. And if access to a range of will likely be much harder.
to navigate a regulatory grey zone. valued benefits, from health insurance By introducing portable benefits for gig
Furthermore, informal employment workers, African governments and digital
deprives governments of substantial tax platforms can help to power the conti-
revenues. According to the International nent’s future growth. Otherwise, these
Labor Organisation, 85% of workers in
Africa are employed informally, and
African platforms will lose top talent, countries
will miss out on potential tax revenue,
therefore do not declare their income labour- and Africa will fail to reap the full bene-
or register their businesses. This loss of
potential revenue affects countries’ ability market fits of the digital revolution.

to invest in education, health, and basic


infrastructure, all of which are vital for
regulators Olga Morawczynski is Senior Program
boosting the productivity of the work- and tax Manager at the Mastercard Foundation.
force and sustaining broader economic David Porteous is Founder and Chair of the
growth. authorities consulting firm BFA and Co-founder and
Gig workers are increasingly putting
pressure on employers to rethink out- can play a Chair of the Digital Frontiers Institute.

dated models of compensation and bene-


fits. Uber, for example, has recently lost a
significant Copyright: Project Syndicate, 2019.
series of lawsuits in the United Kingdom role
instigated by drivers seeking access to
basic benefits like minimum wage and
holiday pay. In an effort to appease their
workers, platforms are experimenting
with additional incentives for contract

36 June. 21 - 27 2019
ART | BOOKS | SOCIETY | TRAVEL | CULTURE

Daring the art market


Ugandan goes for solo show in Nairobi

M
ark Kassi is a figurative ration to any creative person because of experience put my career on another level
artist working with their honest approach to everyday life and altogether because I got the exposure and
acrylics. His distinctive random activities. You will find that most recognition I had always desired.
segmented style on can- of what they do is influenced by sponta-
vas borrowed from the neity and I am eager to capture that in my Working as a full time artist in a country
appliqué technique syn- work. Technically, my work is a fusion of like Uganda with a relatively small econ-
onymous with textile design, has earned him my background as a graduate in textile omy, what are some of the challenges you
a name in the region. He sometimes uses an design and my passion in photography and encounter?
arbitrary palette that ends up into harmoni- painting. I combine these three elements to The challenges are quite many, but I can
ous displays and likes painting children and birth my own style “Kassism” that at least quickly point out that one of the biggest
their outdoor games. Dominic Muwanguzi can be traced back to me by everyone. My challenges for any artist in Uganda is the
caught up with him ahead of his upcoming palette; with dominant greens, yellows and public attaching monetary returns to the dis-
solo show in Nairobi. earthy browns; is evocative of my immediate cipline. To be considered a successful artist
environment which is bright and vibrant: you must be rich and this sometimes is not
How did you choose art above any other bustling with activity and freshness. None- the case for many successful artists. None-
normal profession? theless, I enjoy applying arbitrary colours on theless, there are many artists today who are
Art has always been my passion right my canvases as a symbol of disrupting the doing financially well something that has
from my secondary school days when we usual, but still emphasise harmony in my helped change people’s perception about art.
did not have an art teacher at school but I work. Another problem is the small economy that
made a personal effort to practice and excel impacts the purchasing power of art over the
in the discipline. When I joined Universi- What has been the major highlight of your basic necessities. Obviously, one has to first
ty, art financed my welfare on campus. I career so far? cater for other basic necessities of everyday
would produce and sell art to pay for my In 2013, I sold my whole (sole) show to life before they can think of buying art.
daily expenses and did not have to depend a person I never met. This was a Dutch
on hand outs from my parents. The early professional who had been following my How would you advise young artists who
satisfaction that I could earn from my art work for some time. This incident gave want to tap into the growing East African
gave me inspiration to practice as a full- time me huge inspiration and strengthened my art market?
artist. belief in my art career. I guess, every artist They need to grow their name locally first
feels the same way when they sell their then they can think of courting new markets.
How do you work in terms of technique work. Another highlight of my career is The truth of the matter is the market outside
and concept? when I exhibited with some of East Africa’s there is very challenging because the deal-
My concept is largely working with my great artists like Jak Katarikawe (RIP), Sane ers and buyers are looking for something
immediate environment where I take pic- Wade and Brush Wanyu at gallery Watatu in unique and really good. This is because it is a
tures with my camera of children engaging Nairobi. Sharing the same space with these well- exposed market.
in their outdoor games. I believe that the icons of modern and contemporary art in
subject of children provides endless inspi- the region was a lifetime experience. The Image courtesy of the artist

June. 21 - 27 2019 37
Traffic officer fines Female Driver for `excessive beauty on public roads’
A traffic officer in Uruguay alleged- public roads)”. To make his intentions land him in hot water, but after the ticket
ly stopped a female motorist and, obvious, the public servant also wrote “I was posted on social media and quickly
impressed by her physical looks, he pro- love you” in the ‘observations’ section of went viral; he is currently under investi-
ceeded to write her a ticket for “impru- the ticket. He was just trying to be cute gation for “using an official document for
dence while driving (excessive beauty on and never imagined that the stunt could unauthorised purposes”.

Man goes on Uber and Lyft drivers conned of $10,000 Scrap thieves steal
hunger strike to rail bridge in Russia
win back lover A criminal case has been
launched in Russia’s Arctic
Going on a hunger strike region of Murmansk after
doesn’t sound like the most suspected metal thieves
effective way to win back made off with a railway
lost love, but it worked in the bridge. Local prosecutors
case of one Indian man who say the unknown perpetra-
camped outside his ex-girl- tors removed a metal struc-
friend’s home and refused to ture 23m long and weighing
eat until she agreed to marry 56 tonnes from the bridge
him. Ananta Burman, a young - its main central span.
man from India’s West Bengal The bridge is not in use.
region had been in a stable rela- Residents first noticed the
tionship for eight years with disappearing bridge in May.
Lipika when she decided to The theft of metal objects by
marry another man. The young Three crafty thieves tricked own phones weren’t working, thieves interested in their
man decided to stage a hunger 33 Uber and Lyft drivers into police said. The thieves then scrap value has long been a
strike out the girl’s house while turning over their phones, accessed the drivers’ rideshare problem in Russia.
holding a handwritten banner allowing them to transfer more accounts and transferred funds
that read: “Give back my eight than $10,000 in all out of the to accounts they controlled. The
years”. Police were brought cabbies’ accounts. The three trio sometimes rode together
in but he refuse to leave or eat robbers between April 3 and and other times committed the
even when he became ill and June 3 conned 33 drivers in the crimes separately, according to
was rushed to hospital. The girl Bronx, Manhattan and Brooklyn cops. In several instances, the
eventually came around and into passing them their phones, robbers threatened to hurt the
Ananta and Lipika were mar- saying they needed to change drivers if they did not turn over
ried immediately. their destination but their their phones.

Company offers $1,000 to anyone to use a flip-phone Man steals chickens to buy
fuel for his posh BMW
It seems smartphones. a week. The lucky
like only To celebrate the winner will have A man from China’s Sichuan province
yester- 30th anniversary of to record how long has been arrested for allegedly stealing
day flip- the first ever flip- it takes them to do chickens and ducks from several villages
phones phone, an Internet simple tasks like in Linshui County in order to buy fuel
were the and phone service texting and send- for his “thirsty” BMW. The car costs
hottest hand- provider Frontier ing emails with $290,000 (Approx. Shs1 billion). Police
helds available, Communications the obsolete hand- says nobody expected the culprit to be
but nowadays in Utah, USA, held, how much one of the richest farmers in the area,
they are practically has announced it sleep they get, and a man who happens to live in a multi-
antiques and com- will pay someone whether their pro- story villa and drives a luxury BMW.
panies are making $1,000 to ditch their ductivity increases Apparently, after running into financial
news headlines modern smart- during the one- woes, he started stealing people’s
for paying people phone and switch week experiment. domestic birds, breeding them on his
to use them over to a flip-phone for farm, and selling them off for gas money.

38 June. 21 - 27 2019
World’s rarest
cars on show
By Agencies On the grounds of the Grand Hotel Villa the Coppa d’Oro Villa d’Este (Best of Show)

S
d’Este guests flocked to see the 1967 Lambo- award was won this year by an 1937 Alfa
et on the shores of Lake Como, Italy, rghini Marzal once driven around the 1967 Romeo 8C 2900B, owned by car collector
the Concorso d’Eleganza Villa d’Este Monaco Grand Prix circuit by Prince Rainier David Sydorick.
brings auto enthusiasts from around and Princess Grace Kelly. Not to mention Celebrating the Alfa Romeo marque,
the world to admire the 50 of the a 1955 Alfa Romeo 1900 Super Sprint La Mike Hanlon writes in New Atlas that
best cars built between the 1920s and 1980s. Fleche considered the “aristocrat” of Euro- Sydorick’s 1937 Alfa Romeo 8C 2900B
Tickets for the exclusive event cost $550 pean cars; a rare 1967 “Nocciola” (hazelnut) Touring Berlinetta “has achieved the
(Approx. Shs2 million) and attendees were version of the Ferrari 275 GTB/4; and the equivalent of a Tennis Grand Slam—the
treated to the rare sight of motoring “royal- infamous 1970 Ferrari 512 S Modulo created only difference is that the tennis feat has
ty,” including the $12.5 million (Approx. Shs by Paolo Martin. been achieved many times, and never
47 billion) Bugatti La Voiture Noire and the Describing itself as “the symphony of before has a car won so many globally
cult BMW Garmisch, which was built as an engines,” the Concorso d’Eleganza Villa prestigious concours events.”
exclusive homage to a lost BMW concept car d’Este event is now in its 90th year, and
from the 1970s. following last year’s win for Alfa-Romeo, Source: Online

June. 21 - 27 2019 39
global comment

By Guy Ryder and Richard Samans


Toward people-centered growth
It requires sustained, increased investment in people’s
capabilities, purchasing power, job opportunities

G
rowth is decelerating in Europe, growth and development model that may female voices and leadership, eliminating
the United States, China, Japan, be the best hope for sustaining the world violence and harassment at work, and
and other leading economies, as economy’s momentum as the two growth implementing pay transparency policies
the International Monetary Fund engines on which many countries have are also important in this regard.
and World Bank recently highlighted by re- relied for years or even decades – extraor- Third, countries should increase public
vising their global forecasts for this year sub- dinary macroeconomic stimulus and and private investment in labour-intensive
stantially downward. At the same time, po- export-led industrial production – con- economic sectors that generate wider ben-
litical and business leaders know they need tinue to lose steam. efits for society. These include sustainable
to do more to prepare workforces for the First, countries should increase public water, energy, digital, and transport infra-
labour market in an age of rising automa- and private investment in their citizens’ structure, care sectors, the rural economy,
tion, stagnant wages, and greater part-time, capabilities, which is the most important and education and training. The Business
temporary, and contingent employment. way they can durably lift their rate of and Sustainable Development Commission
These two challenges – reinvigorating productivity growth. Some governments has estimated that achieving the UN Sus-
economic growth and preparing people chronically underinvest in access to quality tainable Development Goals could generate
for the future of work – are linked, but education and skills development. But pol- $12 trillion of market opportunities in
not necessarily in the conventional icymakers everywhere need to do more as four areas alone – food and agriculture,
sense that macroeconomic stimulus or populations age and automation disrupts cities, energy and materials, and health
improved efficiency constitutes the best both manufacturing, on which developing and wellbeing – and create up to 380
way to create job opportunities and raise economies have traditionally relied to million jobs by 2030. Capitalising on
living standards. The experience of recent industrialise, and services, in which much these possibilities could help countries to
decades shows that growth alone is not advanced-economy employment is concen- compensate for the labour-displacing and
enough to reduce the increased inequality trated. The commission therefore called on potentially demand-suppressing effects of
and insecurity accompanying the trans- countries to build a universal framework automation and economic integration.
formation of work. Moreover, high debt to support lifelong learning – including These three steps constitute a strategy
levels and historically low interest rates stronger and better-financed labour- for all countries, regardless of their level
have left policymakers with fewer tradi- market training and adjustment policies, of economic development, to strengthen
tional tools to stimulate the economy in expanded public employment services, both social justice and economic growth –
the event of another recession. and a universal social-protection floor. and, by extension, public faith in political
In this new era, government and busi- Second, governments, together with institutions.
ness leaders need to view the relationship employers’ and workers’ organisations, In the heat of the financial crisis a
between growth and labour markets the should upgrade national rules and institu- decade ago, leaders of G20 countries
other way around. It is by upgrading tions relating to work. These influence the pledged to build a more balanced and
their social contracts and better equipping quantity and distribution of job opportuni- sustainable growth model that embodied
their citizens to navigate the world of ties and compensation, and thus the level of lessons from the economic imbalances
work that countries can most effectively purchasing power and aggregate demand and policy mistakes of the past. The
boost their economic growth and devel- within the economy. Specifically, the com- world has since made little progress
opment. mission called for a Universal Labour Guar- toward realising this goal. But the path
That is the conclusion recently reached by antee under which all workers, regardless it must take is clear: sustained, increased
an independent Global Commission on the of their contractual arrangement or employ- investment in people’s capabilities, pur-
Future of Work, organised by the Interna- ment status, would enjoy fundamental chasing power, and job opportunities.
tional Labour Organisation and co-chaired rights, an “adequate living wage” as
by South African President Cyril Rama- defined in the ILO’s founding constitu- Guy Ryder is Director-General of the
phosa and Swedish Prime Minister Stefan tion 100 years ago, maximum limits on International Labour Organization, which
Löfven. working hours, and health and safety organized the Global Commission on the
The commission recommended three protection at work. Future of Work. Richard Samans is Managing
practical steps – all of which involve Moreover, collective representation of Director for Policy and Institutional Impact
investing more in people – that coun- workers and employers through struc- at the World Economic Forum and a member
tries can take to improve social inclusion tured social dialogue should be ensured of the Global Commission on the Future of
and economic growth simultaneously. as a public good and actively promoted Work.
Investing more in people is not only by government policies. From parental
essential to strengthen countries’ social leave to public services, policies need Copyright: Project Syndicate, 2019.
contracts with citizens at a time of rapid to encourage the sharing of unpaid care
technological change. It can also form work in the home to support gender
the basis of a new, more human-centered equality in the workplace. Strengthening

40 June. 21 - 27 2019
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