Making a Business Omelette; no bailouts 


Adam Smith, or one such fellow talked about the market mechanisms, the invisible hands that myopusly operate in market place. These invisible hands affect demand and hence supply of goods and services until a level is reached when there is equilibrium; a point where goods demanded and equal to the goods supplied.

To maintain their relevance in this market place industries strove towards efficiencies in order yo ensure that the prices they brought goods to the market were competitive. Inefficient produces who could not match the efficiencies demanded by the market were thrown out; they lacked the saying power and failed to survive.

This week has been awash with a trillion Uganda shillings bailout for several companies. The companies asks government to literally give them handouts otherwise they will close shop and ostensibly this will be a very terrible thing for the country. For my part the only money I would have wished government to give them, if any , was for padlocks to close their inefficient businesses that are not only a menace to them, but are now a menace to the tax payer.

We need to look at what circumstances occasioned the so called dire economic situations they claim to find themselves in. Additionally, why does the government think there is a percentage in salvaging these privateers? Are these the most critical sectors of the economy? Are they employing the greatest number of Ugandans? What is the opportunity costs if the one trillion? 

What guarantees are there that the bottlenecks that has occasioned the current undesirable position will not be replicated and we end up pushing money in a black hole.  Do you remember the rural farmer’s scheme? Since these chaps want public money let them bring their books for scrutiny and we have bit of assurance on the use and application of the funds.

Perhaps instead of propping inefficiencies we push the money in operation wealth creations. Employ economists and consultants to critically evaluate the options we have and make recommendations.

Maybe we need them to collapse and we know that efficiency is what we need in businesses. No free lunches. The precedent would be support for expansion and not to attempt to treat dysentry with piriton.

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