would that the new were better than the old…cue Mulago Hospital and nostalgia

scare-a-hero

IMG-7040.JPG Guess what place this is?

LAST weekend I found a way of combining roast meat, drinks and a discussion about plastic recycling with an interesting fellow called Frank Morris Matovu, at Zone 7’s Shisanyama (a whole other story of its own).

Frank is an architect, an artist, an avid reader, a curator and a collector of old books.

I first came across him when one Bernard Acema wrote a piece about Kampala that I published on my blog as ‘The Racism Behind Kampala’. Frank read the piece and uploaded more than ninety (90) pages of a 1955 book titled, ‘Town Planning In Uganda; A Brief Description Of The Efforts Made By Government To Control Development Of Urban Areas From 1915 to 1955‘, by Henry Kendall OBE, F.R.I.B.A., M.T.P.I, Director of Town Planning, Uganda.

Intrigued that he had possession of such a book, I tracked him down and he told…

View original post 718 more words

Advertisements

On the Question of Motive! UMEME Phobia

History is lined with examples of chaps who took a trophy or offerings without consideration of the motivations of the giver. The story is well illustrated in gift of the Trojan Horse, ostensibly as token for peace whereas encased in its innards were an infantry to destroy the Troy’s after they had made an impressive defense on their gated community; an impressive ten year siege.

The power company UMEME has been given a carte blanc to siphon as much currency as it can obtain during its concessionary period. Adam Smith warns, “Its not from the benevolence of the brewer, the baker, and the butcher that we owe our supper, but from their own regard to their own selfish interests.” If the interests of the three professionals were not served they would be disinclined to make the different products: beer, bread and beef that are necessary to and are incidental to the supper.

Power is an essential component of the growth of the country. Energy is a sin qua non for industries, financial sector, health sector, communications infrastructure virtually all the economy runs on some form of energy. Therefore it is imperative that this vital resource needs to be adequately monitored and controlled to ensure the much talked of steady progress. Any marginal increase in tariffs has a multiplier effect on the industries and consequently on the wanainchi.

In an unpublished altercation with a member of his government, the old fox was told, “Muzee you have your own interests, we also have our own interests, when these cannot and do not converge, we shall each go our own separate ways.” The relationship with the gang along the electric power axis in Uganda needs to be guided by the hunch back logic; “if you must sleep with a hunchback, use separate blankets!”

Intermittent supply are common tricks to depict constraints in supply and has oft been used as a justification for incremental power tariffs. At the beginning of each year there is, seemingly, a mandatory increment in tariffs and this in done by a helpful and enthusiastic cabal of cooperators of the three arms of Generation, Transmission and Distribution plus Electricity Regulatory Authority as a willing and able accomplice. The reasons advanced for increment are always the same: Investment costs, distribution costs, energy losses, collections and operations rates!

No one has told us the effect of the prepaid metres on the operations and collections costs! What is a fact is that collection costs are borne by the Ugandan consumer charged on his mobile money payments; which to add insult to injury will be subject to an additional 1% tax.  I think we are going to get into legal conundrum with all these duplicated charges intended to strangle an already desperate populace!

 

Changing Power Ug Style or The Trouble with Uganda

Since obtaining its independence from Britain in 1962, the country, Winston Churchill called the Pearl of  Africa, has struggled with the transition of power from one person to another. A critical analysis of the modus of change of power reveal creative power change mechanism, with such inventiveness that excite students of the creative arts.

The first method of transition was in a palace coup! Here the Prime Minister, Apollo Milton Obote, having fallen out with the King Muteesa abolished Kingdoms and monarchs, established the Republic as we know it today. He famously declared that no man should rule others in perpetuity through his ancestors!

When the guns on the palace sounded it would have been easy to forget the footage showing the same and key characters of the debacle at famous clubs in Kampala and horse races! The principal executor of this palace coup soon made news seeing as he is the subject to the next paragraph.

While the Republican President was attending a summit in power,  Idi Amin Dada staged a military coup! Famously he had eighteen good reasons for this bold act and overthrow of his former Commander In Chief, In any event he held on to power by employing a lot of his tribes men and ruthless action on any perceived threats on his power. A Judge was dragged from the sanctity of the temple of justice and was never seen again! An Arch Bishop met some bizarre fate. In 1975 Idi Amin became a Field Marshal; plus a host of other colorful titles.

Perhaps because of such a high rank it was necessary for the next change to be propelled by a foreign invading force. Tanzanians with a then fearsome artillery called “saba saba” (seven seven) were the next actors for regime change! It was a battle that saw help from as far a field as Libya engaged in protection of a regime. It was to no avail the change had to come! Yusuf Lule then head of Uganda National Liberation Front was made to sit as the president of Uganda.

The Yusuf Lule led government established a National Consultative Commission.  This was the body that on disagreement with Lule over who was more powerful quickly deposed him and replaced him with Godfrey Binaisa.

The Queens’s Counsel fired the Army Chief of Staff Brigadier Oyite Ojok and the Military Commission promptly removed him; I hope you are following. We have already demonstrated a creative mind beyond measure.

The trickery and shenanigans employed in a disputed election need a full article of its own! That said it was the necessary catalyst for the guerilla war that lasted all of 5 years. At the end of 5 years we experienced a military revolt! The military was split into two sides with the appointment of Smith Opon Acak as Chief of staff. The offended parties drove calmly from one part of the country and the government fell like a pack of cards!

The whole country split into fiefdoms and so many rebel groups, militias taking control of various territories! The bandits also were becoming more and more problematic; they took vast territories and were becoming bolder by the day! They, imaging the effrontery, established councils and committees at grass roots level.

Uganda became the first country in the world where guerilla’s successfully took over power. This was in 1986. This was supposed to herald the much spoken of fundamental change. “Ours is a fundamental change not a mere change of guards!” 32 Years down the road, enduring no change,  we live in hope to see what the future holds for us! Without doubt we shall be the object causing consternation to the idle and officious bystander.

 

 

 

Confess your bank Balances Now!

Desperate for an immediate rise in tax collections, the Uganda Revenue Authority ordered all commercial banks to release the details of their clients bank accounts to them. Bankers were immediately up in arms quoting some laws about the rights of their clients to confidentiality. The matter has now been taken to the Constitutional Court to address the merits and demerits of this mischief.

Aside from creating speculative gold hunts and red flagging suspicious balances. One is hard pressed to find the merits of the demands of Uganda Revenue Authority (URA) in demanding the said balances. It is not the mandate of  URA to look for dirty money; assuming the source of the money is illegal. The current tax regime does not tax gross sums of money  held by individuals or companies; for companies there are several allowable deductibles before the revenue authority can get its due.

The mischievous directive is going to create a number of busy bodies; lawyers will be very busy suing for the breach of confidentiality  and more lawyers will be required to defend the litany and avalanche of suits resulting from this breach of confidentiality, accountants and auditors will be very busy explaining, with pictures and illustrations by grapic artists how the money became to what it is, journalists will be gossiping about the various sums and the personages involved, Judges and magistrates and officers of the court will be swamped and will eventually choke the wheels of justice.

At the end of the whirl wind we shall be back to where we started. A dire need for more funds that is becoming harder and harder to obtain. The population will get fed up of the tax burden and the overt scrutiny of the regulatory authority and begin using pillow banks or better still off shore accounts.

The government ought to realize that expecting growth in tax collections with several companies facing economic ruin is like trying to milk a bull. This country needs a huge boost to implement some of the things H.E Yoweri Museveni spoke about in 1986 so as to broaden the tax base. If in 2018, you still import needles and pins, toothpick, garlic, cars, computers etc from China then how do you expect the tax base to grow?

If the majority of  commanding heights of the economy is in the hands of foreigners and they report losses, while repatriating large profits outside the country how do you expect the tax base to grow? In short the focus on what monies is in the accounts is holding the wrong end of the stick. A patient and calculated effort to stimulate investment is needed.  A local company even of it makes losses in the five formative years will still create employment and pay Pay as You Earn for its workers.

The shame of exporting unprocessed produce needs to be halted. We should learn from the example of German; how they earn more coffee than several producing countries. Value addition; another long forgotten, but most useful, activity!

“Why,” you may proclaim, “the suggestion you make are long term!” The ready and short term thinking is what got us in this mess in the first place. Let us strategize now before it degenerates even further.

 

The UMEME BARNABUS CONTINUATION; WHEN LIZARDS BEGET SNAKES

“From the crooked timber of humanity, nothing straight can ever be obtained!” Adam Smith.

Before it applied for bankruptcy, Enron, the American energy company, would claim revenues of up to 101 BN USD. It was at the time employing 20,000 employees. It was listed by Fortune Magazine as “America’s most innovative Company!” Its “creative” bookkeeping forced a rethink of the operations and reporting standards of Federal Companies and new legislation to ensure stricter regimes and compliance. The Congress enacted, an immediate reaction the Sarbanes Oxley Legislation. (SOX)

Part of the opportunity for the, bewildering, fictitious, and dubious accounting practices that Enron deployed was the use of special purpose vehicles to hide its liabilities. These off- balance sheet liabilities gave an impression of a larger income and less liabilities; consequently bloating the worth of the companies and misleading investors.

As mentioned in the earlier article, when Uganda Electricity Board faced challenges it was sold off hook, line and sinker to the South African Company Eskom. Eskom was formed in 1923 as the Electricity Supply  Commission. It is among the top ten electric power generation companies in the world and 9th in terms of sales. According to their website the company, is a expert in electricity generation management and anticipates the concession to grow in line with GOU target of 80% of Uganda’s population by the year 2040! How they suspect they will be in charge of this process is, as befuddling as the accounting practices that necessitated the SOX legislation.

Let us consider, albeit briefly, and in generic terms corruption. The Ernst and Young 2012 Global report on Fraud “South African and African Executives showed a greater propensity to use entertainment or personal gifts to win or retain business. The report further showed high indices of widespread corruption in rampant growth markets: Brazil 84%, Nigeria 72%, South Africa 64%. The importance of this is to first red flag that we are not dealing with angels and Saints. If further proof be needed, one is not lacking from the reports coming from down SA:

2017 Business Day: “Stunning reversals, a shocking confession, and elaborate justifications were among the responses from Eskom’s top three officials to questions on key controversies surrounding the company!” To the dimwitted  a reversal means to back peddle on a previous declaration; it means between the two statements one is a lie, a fib, deceit.

In another paper, “ESKOM CEO saga signaled a failure of accountability and corporate governance in the public sector!”Quite telling! It was further telling that only  a threat recalling debt, arm twisting, ESkom as it were did the company find it fit to fire its Chief Finance Officer Anoj Singh over dodgy activities.

The South African equivalent of Electricity Regulator Authority denied an application by Eskom to increase tariffs by 19% in 2018! The reasons for denying the increment are well documented:

Inefficiency, Inaccurate forecasting, and costs overrun at Eskom. It noted an over 6000 unneeded employees costing the company R3.8 Bn annually! (over 300Mn USD).

The example of America and how it mitigated and learned from the excesses of Enron is telling. We must also put in place mechanisms to deal with our not so saintly associates. After all, it is said when sleeping with a hunchback you use different blankets!

 

WhatsApp Tax and the Mirage of Paperless Banking

“The Pendulum of the mind swings between sense and nonsense, not between right and wrong.” Carl Jung

IMG_20170506_181854.jpgAt the bank today, one noticed a big sign post touting a concept of paperless banking.  At the corner of the banking hall sat a Canon Photocopier. It was a fairly busy photocopier as photocopiers go and every few minutes it would oblige a staff member with what it is photocopiers do. Just before me between the customer service client and this angelic customer, yours truly, was a huge paper tray; there was paper everywhere. These chaps were not even trying to be paperless. Needless to say, at the end of each transaction a printout is made.

In the same banking hall there are patient paper can; where we drop the useless sheets of paper; perhaps we are communicating the importance or relevance of these papers we are given. Too much wastage at a great costs to our trees. Perhaps clients should, and ought to be asked if they need the printouts or e-reciepts by SMS or email! We would save a few trees and time! In the meantime, since we expect our bankers to be honest and of impeachable integrity, above suspicion like Ceasor’s wife, they should put a clear and unequivocal announcement; “We are a less paper bank!” The issue is not only environmentally friendly but at the same twin economical.

And economy is what we are particularly interested in with regard to the soon to be infamous Whatsapp Tax. Adam Smith in his book, The Wealth of Nations, discusses the question of taxes. He identifies four canons or principles of a good tax: Equality, Certainty, Convenience and Economy.

Scholars have argued that the key purpose, raison d’etre, for taxes is to generate revenue; it is not for behavior change. And attempts to use it for behavior change is an abuse of the principles of taxation while simultaneously landing into the trap of double taxation. Ugandans are able to get onto social media platforms after paying applicable taxes on data charges. On these platform they have communicated with their peers across the global village spurring commerce, social engagements and research. While its also true that it may have been, and will continue being abused, this holds true for other inventions of man!

One is particularly irked that the considerations for whatsapp tax are being generated on a whim! There is no logical basis for this taxation and a desperate attempt to reap from where one has not sown! The tax will be counter productive and needless to say uneconomical to collect! How will it be easy to collect 100 UGX from whatsapp users, where will they be registered, what if I migrate my whatsapp and social media to my Rwandan or Kenyan Lines?

The logic of Alfredo Pareto in seeking tax from the vital few as opposed to the trivial majority comes to mind. Let logic be our guide in the formulation of national policy and when the opportunity come, we hope the little boy can tell the emperor he is naked even when the crafty tailors want to pour wool over his eyes.

 

Economics and George Orwell’s Animal Farm

I cannot countenance why my mind has been shifting to colonialism and ownership of the country. These topics do not elicit as much excitement as the mother of all bicycle kicks as superbly executed by Christiano Ronaldo in a recent match. The matter kept tagging at my hem; muck like the diseased woman who surreptitiously tagged on the Son of Man and he felt power moving from him. I think a catalyst to this matter was the UMEME creative numbers amidst increasing and soaring tariffs in, this, our banana republic.

Recalling the telling observation in George Orwell’s animal farm, an epoch is reached where the animals looked from pig to man and from man to pig and found an uncanny resemblance of the two. All the laws that held them together in the spirit of animal-ism had fallen and the handshake between the pigs and the man, who was an enemy of animal-ism, had grown tighter and tighter and was now even moving more towards an embrace.

In our political discussion group, patriotic discussion group, a distinction had been made on the ownership of the country and ownership of the resources of the country and ownership of the commanding heights of the country. The commanding heights of the country are those sectors that are so central to lubricate the economic propulsion, if you like development, of a country that by design it was necessary to be held by the people who have the best interests of the nation and nationals. Some of these sectors are: Energy,(in all its manifestations), Finance and banking, and Agriculture.

In Uganda today we have auctioned energy to the highest bidder, Finance and banking is left to whom it may concern and certainly not in the hands of persons who have the best interests of the nationals and Agriculture lies neglected; her lover has found a new and more engaging bride. This explains why despite it providing gainful employment to over 80% of the population and livelihood to over 92%. According to Uganda Bureau of Statistics agriculture contributed 23% to the national Gross Domestic Product.

This in spite of the low injections in the sector. A conscientious effort towards value addition and application of scientific methods to the commercial development of agriculture would save the nation looking for elusive funds through the “whatsapp” tax; but that is a subject for another debate.

A effective way to economically sabotage a nation is by profit repatriation. Huge chunks of funds generated, siphoned, from the populace is charted off to far away lands. We saw this during the brazen colonial days; we get a few mirrors and gold and precious metals were shipped off to the so called developed nations. This exploitation exists today and its being encouraged by our leaders either by omission or commission.

We must ask ourselves some critical questions by way of reflection: Why and how can Uganda Telecommunications be pushed to its financial knees?, Can’t we be more effective in managing the tariffs to better Uganda?, Should we not have more leverage on how business is conducted to minimize profit reparation?, and Lastly do we really own our country or we are in the proverbial Orwellian paradox; how can we take back our country?