News analysis Health Business

Lubowa Hospital Drug-resistant TB: MTN Uganda revenue

controversy New study offers hope rises to Shs1.38trillion

Issue No. 565 March. 29 - April. 04 2019 Ushs 5,000,Kshs 200, RwF 1,500, SDP 8

Museveni doubles
military spending
Rwanda tension cited but why
does govt want Shs1.2 trillion?

www.independent.co.ug
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March. 29 - April. 04 2019
INBOX

Issue No. 565 March. 29 - April. 04 2019

News analysis Business Health Arts Motoring

Cover story
Museveni doubles military spending
Rwanda tension cited budget but why does govt want Shs1.2 trillion?

4 The Week
30 Comments
Mystery dogs Minister
Nantaba assassination attempt
A case for a bold economics: Will
economists prove more helpful
9 The Last Word today, when the challenges are as
pressing as the Great Depression?
Uganda’s strategic dilemma
Part3: Why Uganda’s economy is
dominated by multinational capital
32 Health
and what cannot be done about it
Drug-resistant TB:
14 Analysis A new study offers
new hope
Lubowa Hospital controversy: How bad
can investing is specialized hospital be?

35 Arts & Culture

27 Business
What is African art?: University don
MTN Uganda revenue rises confronts subject of African identity,
to Shs1.38trillion: Telecoms neo-colonialism and decolonisation
subscriber base reaches 11.3million

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

PUBLISHER: Independent Publications Limited, Plot 82/84, Kanjokya Street, P. O. Box 3304, Kampala, Uganda
Tel: +256-312-637-391/ 2/ 3/ 4 | Fax: +256-312-637-396 E-mail: editor@independent.co.ug | advertising@independent.co.ug
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2 March. 29 - April. 04 2019

 Offline

“People are now looking for meal cards in

form of an opportunity to be elected to
Parliament.”Norbert Mao, DP president on
those opposed to his 2021 presidential bid

Kenyan maths and

physics teacher
Peter Tabichi (C)
holding up the
Global Teacher
Prize (GTP) trophy
after winning “In the ongoing struggle for people of
the US$ 1 million
award during an Uganda to regain power and control
official ceremony of their country, I don’t have to be a
in Dubai attended
by the Dubai Crown presidential candidate, for it to be won.
Prince Hamdan However, I won’t leave the struggle till
bin Mohammed Al- it’s over or ‘I am over!” Dr Kizza Besigye
Maktoum (C-R).

President Yoweri
Museveni on March 22
held talks with the newly
elected Democratic
Republic Congo (DRC)
counterpart, Felix
Tshisekedi at State House,
Entebbe.

EU supporters, calling “We have constructed many roads and

on the government will continue to construct many more.
to give Britons a vote But now our emphasis is on electricity.
on the final Brexit
deal, participate in the
And very soon, every part of the country
‘People’s Vote’ march will have electricity.” President Yoweri
in central London, Museveni on commissioning Isimba dam
Britain March 23, 2019

Job opportunities Residents of Kween Projected annual

127 created in new
districts
500 district left homeless
after eviction
Shs150bn revenue from Isimba
hydropower dam

March. 29 - April. 04 2019 3

week

Students of Kololo S.S discussing career choices with Julian Namale Muweesi from the Institute of Certified Public Accountants
of Uganda (ICPA-U) at  the 11th National Council for Higher Education (NCHE) exhibition held in Kampala from March 21-23.

Mystery dogs Minister Nantaba assassination attempt Muntu’s new party

Minister of State for ICT
Aidah Nantaba survived an
assassination attempt not very
far away from Naggalama
Police station in Mukono dis-
trict on March 24. Nantaba, also
Kayunga Woman MP was driv-
ing along Kayunga-Mukono
road returning to Kampala
when two motorbike-riding
gunmen reportedly intercepted
her. However there have been
queries on the incident with
some observers questioning if
there was indeed an attempt
on her life. Police picked up a
Uganda developing plan for Universal Health Coverage- Minister
Ruth Jane Aceng, the minister
for health, revealed that Uganda
is in the process of developing
a comprehensive roadmap for
Universal Health Coverage
(UHC) over the long term.
Speaking at a stakeholder’s
dialogue organised by Novartis
at Sheraton Hotel, Aceng
in a speech read for her by
permanent secretary Diana
Atwiine, said the process is
led by the Department of
Planning at the ministry in close
collaboration with the National
Planning Authority and other
Ministries, Departments and
Agencies. The principles of
UHC in Uganda are driven by
the desire to achieve universal
access to health care for the
entire population by 2030.
Novartis held the conference
under the theme ‘Sustaining
the momentum towards UHC’
and the minister announced
a partnership between the
Ministry of Health, Uganda
Protestant Medical Bureau and
Novartis to build capacity and
train health care workers at the
national and community level
National ID, a driver’s license
from the scene of crime which
is a rare occurrence compared
to the usual hit and run shoot-
ings in the city and surrounding
areas. Reports say Nantaba on
realising unknown people trail-
ing her, drove to Naggalama
police station and it is more
unclear how police shot one of
the assailants. This would mean
that the men trailing the min-
ister followed her to the police
station and probably in a fire
exchange with police, one of the
gunmen was shot.
with the aim of bringing health
care closer to populations. The
partnership entails screening
programs, health promotion at
the family level, empowerment
of community health workers
and strengthening community
insurance programs, a key
success factor in healthcare
financing. Harald Nusser, Head
of Novartis Social Business
at Novartis called for more
collaboration especially in the
fight against No Communicable
Diseases (NCDs).
joins the fray
Alliance for National Trans-
formation (ANT), a new party
led by Maj Gen. Mugisha Muntu
will soon be launched and out-
line its agenda. ANT was cleared
by the Electoral Commission
after months of correspondence
with the electoral body. In a
statement, ANT convener Alice
Alaso, said the party will soon
communicate the date and
venue for the launch. Muntu
started with New Formation in
September after country wide
consultations in his old party
FDC. Muntu and Alaso, a former
secretary general at FDC, are
the two faces of the party and
observers wait to see the moves
they make as the 2021 campaign
takes shape. NRM endorsed
President Museveni as its sole
candidate for the elections and
new kid on the block Bobi Wine
is already in the 2021 race.

4 March. 29 - April. 04 2019


USAID awards grants to 25 solar firms
A total of 25 solar companies
and eight financial institutions
were the beneficiaries of
a USAID Power Africa
co-sponsored exhibition at the
Kampala Serena Hotel. Held
under the theme ‘Financing
EAC well represented at 2019 AFCON in Egypt
Tanzania joined three
other East African nations;
Kenya, Burundi and Uganda
after they beat the latter
3-0 in Dar-es-Salaam to
qualify for the Africa Cup
of Nations finals for the
first time since 1980. This
means an unprecedented
four nations from the East
African region will feature at
the Africa Cup of Nations to
be hosted in Egypt. The Taifa
Stars secured the victory
they needed to join already-
qualified Uganda from Group
L. Lesotho drew 0-0 in Cape
Verde to confirm Tanzania’s
qualification as runners-up
East Africa’s Power and Energy
Sector’ the event showcased
products like grain mills, boda
bodas, irrigation equipment and
lighting solutions.  Commercial
banks were present to offer
solutions including hire
to Uganda in the group. The
feat leaves Rwanda and South
Sudan as the odd members of
the EAC region. Tanzanians
Dial *133*2#
for more bundles
purchase options and solar
loans. Sheila Desai, the
USAID director for economic
growth office, said the event
demonstrated the innovation
USAID supports through
Power Africa, which furthers
their partnership in improving
access to electricity, and
ultimately helping to change
the socio-economic wellbeing
of communities around the
world. Four grants each worth
nearly $100,000 were awarded
to four Ugandan owned solar
firms to increase access to clean
off-grid energy in Bidi-Bidi,
Kiryandongo and Rwamwanja
refugee settlements. The firms
are; Solar Today, Power Trust,
Aga Great and Raising Gabdho
Foundation .
poured out in the pitch to
celebrate their country’s
return to Africa’s premier
football competition.
March. 29 - April. 04 2019
Week
Prayers for
Speaker Kadaga
Speaker of Parliament
Rebecca Kadaga is currently
admitted at Aga Khan Hospital
in Nairobi, Kenya where she is
being treated for fatigue-related
illness. Shortly after returning
from a trip to Morocco and the
U.S., Kadaga was taken ill at
Nakasero Hospital. Speculation
of Kadaga’s condition height-
ened when President Museveni
paid her a visit a day after she
was admitted. Kadaga’s press
secretary Sam Obbo said the
Speaker’s health condition is a
private matter which only close
family members are privy to.
Meanwhile prayers are being
organised for Kadaga who
is third in Uganda’s political
hierarchy. Rehema Watongola
Tiwuwe, the Kamuli Munici-
pality MP issued a statement
saying the Busoga Sub-region
was conducting prayers for the
Kamuli Woman MP. Kadaga is
the chairperson of Busoga Par-
liamentary group.
AfricellUG @AfricellUG
*terms and conditions apply |
Regulated by Uganda Communications Commission
5
Week
Trump claims victory
with Russia report
The long awaited report by US
Special Counsel Robert Mueller into
the investigation between the 2016
election campaign of Donald Trump
and Russia did not find ‘evidence
of collusion’. In a four page letter,
US Attorney General William
Barr wrote to the US Congress a
summary of the findings of the
report and stated whereas there
was no collusion, the report did also
not exonerate Trump, the 45th US
President. The Mueller investigation
has engulfed the Trump presidency
for two years and after its findings
indicated no collusion, Trump and
his allies seized the moment to
claim victory. Trump constantly
derided the investigation as a witch
hunt. For liberals and Democrats,
it was a crushing defeat which
many thought the outcome of the
investigation would be used to kick
start impeachment proceedings
against Trump who faces a
crowded field of Democrats in the
2020 election race.
6 March. 29 - April. 04 2019
Danish NGO boost 500 refugee households
Larsen, DanChurchAid
Country Director said
the project will benefit
over 500 households in
the pilot phase, creating
over 2150 jobs especially
for women and children
in refugee camps and
host communities in
northern Uganda.
“DanChurchAid received
a 5 year grant from the
Danish International
Development Agency
(Danida) for the Fresh
Fruit Nexus project which
Deputy Head of Mission at the Embassy of Denmark in Kampala, Henrik will support sustainable
Jespersen together with the LC V Arua District Chairman, Wadri Sam market development and
Nyakua and DanChurchAid Country Director at the event. entrepreneurship in and
around refugee camps
DanChurchAid for refugees and in Northern Uganda
(DCA), a Danish members in refugee host and other neighbouring
international NGO has communities by training regions as we progress.
set up a development and smallholder farmers to With this project, we
commercial project named grow certified organic aim to support over
“Fresh Fruit Nexus” fruit for export. Speaking 500 households in Arua
aimed at supporting the at the launch of the project and in effect create an
development of decent held at the Heritage Park employment chain of over
employment opportunities Hotel in Arua, Peter Bo 2150 people.”
Humour Did you know?
Time seems to speed as
you get older

The good news is that time doesn’t

speed up as you get older, but the bad
news is that you simply experience less of
Uganda Federal Alliance party is planning to kick out Beti Kamya, it as the processing power of your brain
its founding leader and former presidential candidate. decreases – at least, that’s according to
a new paper published in the journal
European Review.
The older we get, the more it feels
like the sands of time are falling at an
exponentially increasing rate, accelerating
us all towards entropy. An explanation
for this phenomenon has now been put
forward by study author Adrian Bejan
from Duke University, who says that
discrepancies between “clock time”
and “mind time” are responsible for the
apparent hastening of our lives.
In a statement, Bejan said that “the
human mind senses time changing when
the perceived images change.” In other
words, “the present is different from
the past because the mental viewing has
changed, not because somebody’s clock
rings.”
In his paper, he writes that “the rate
at which changes in mental images are
Democratic Party president Norbert Mao has declared hi interest o run for president in 2021. perceived decreases with age,” and that
because children are able to receive and
process more mental images per second
than adults are, their days feel like they are
packed with more time.
The human eye is constantly on the
move, and as soon as it has processed an
image it switches its focus to something
else. These rapid movements of the eye are
called saccades, and are separated by short
stationary periods called fixations, during
which the eye fixes its gaze on a particular
image.
Previous research has shown that the
eye of an average adult makes three to
five saccades per second, punctuated by
fixations of 200 to 300 milliseconds. Yet
fixation times are significantly shorter
for children, who are therefore able to
make more saccades and take in more
The NRM parliamentary caucus has supported lining up images per second.
a mode of election for internal elections and primaries.

March. 29 - April. 04 2019 7

 News analysis Health Business
'World must stand with High blood pressure; Kansai Plascon’s top
Uganda on refugees' is it always bad? management shake-up

Issue No. 564 March. 22 - 28 2019

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

The Museveni,
Kagame letters

Inbox
Details and implication on
Follow us on Twitter @ border tension

http://twitter.com/#!/ugandatalks

Follow us on Facebook @
www.facebook.com/TheIndependentMagazineUganda
www.independent.co.ug

Letters are
welcome !
The Editor welcomes short and
concise letters from our esteemed
readers on topical issues. Please
send them to:
Correction Rwanda, Uganda conflict
The Editor, The Independent
Publications Ltd, Our story; “Museveni, Kagame Refer to: “Museveni, Kagame exchanged
P.O Box 3304, exchanged letters” (The Independent letters” (The Independent March 22). Very
Plot 82/84 Kanjokya St, March 22) contained an error regarding the good article although a little leaning towards
Kamwokya. nationality of the EAC Secretary General Ugandan position, let’s hope both lead-
Kampala,Uganda.
Libérat Mfumukeko. As one of our readers, ers come to their senses and find common
Email: editor@independent.co.ug Rwasabutare, has pointed out Mfumukeko ground, if there was a conflict everyone
is Burundian. We regret the error. Editor. would lose .
Herve Davy
The big dilemma
that Uganda faces When Chinese use hoes, spades, brooms to make road
Refer to: “Uganda’s strategic dilemma” Refer to: “Uganda’s stra- Today, 33 years later, the a Chinese company with
(The Independent march 15). This is yet tegic dilemma” (The Inde- picture is not different. The hand held hoes, spades
another attempt at explaining a Ugandan pendent march 15). Good taxes on basic items like and brooms I admit a feat
problem in solely quasi-academic terms. creative article. The catch salt, water, and electricity of ingenuity. Yet another
While it may make interesting reading it is lies in the last paragraphs. all serve to sanitize the non- by SBI, with modern earth-
only a small part of the big dilemma that Actually the often repeated productive expenditure that moving equipment is get-
Uganda faces. Frankly speaking, there is phrase that by 1986 the characterise government ting remade. Who foots the
no qualitative or quantitative local content economy was on its knees spending and corruption bill? Ironically, journalists
to speak of regarding these major projects and the coffers empty is the icing on it all. As a would have had a field day
or contracts. Ugandans companies have no serves only one purpose; citizen I am happy to see poking fun at the hand held
financial capacity, no technical capacity, no to prepare the readers for functioning infrastructure. tools if the contractor was
skills, most Ugandans are outright thieves/
the subsequent misdeeds The new Kyenjojo -Fortpor- say Mukalazi Technical
con people, no work ethics. At the bigger lev-
of the stewards that took tal – Kasese highway has Works.
el the Ugandan government itself is a mirror
over the affairs of the state. sections that were done by Godfrey Kambere
image of its people and worse. It has know-
ingly and unknowingly pursued policies
that ignore or prevent the growth of viable
local capacity – deferred payments to local
companies(many die off from the fatigue
How multinational capital New mental
of waiting for years to be paid for goods dominates our economy healthcare
and services supplies to government), rent
seeking by government official on contracts
awarded to local contractors, cronyism in
Refer to: “Uganda’s strategic dilemma” (The
Independent march 15). I am employed in the
hospital welcome
awarding contracts in many cases to unquali- coffee industry and often times I hear President
fied contractors. Many Ugandans in the Yoweri Museveni speaking about processing Refer to: “Fixing
diaspora have tried to return to Uganda with our raw materials e.g. coffee. The dilemma Uganda’s mental health-
their acquired skills and technical capacity comes when our biggest consumers (Europeans) care” (The Independent
but are discouraged by unimaginable tax are more interested in raw beans than roasted or March 15). It’s an excit-
levels on equipment bought from their sav- processed ones and are ready to look elsewhere ing development. Metro
ings. Why tax wealth and equipment being to countries such as Brazil, Vietnam, Columbia, Health International
brought into the country even when Uganda Ethiopia, etc. which leaves us with no choice that is setting up the
has never invested even a cent on them? Rich but to sell our raw beans to make ends meet. In country’s first private
countries like America and those in Europe conclusion,I n support of the article, I largely mental hospital in Ttula-
are offering huge tax waivers so that their agree that multinational capital will continue to Kawempe in Kampala
nationals bring home all wealth and techni- dominate our economy; especially in fields that brings the sort of exper-
cal skills they may otherwise be holding in we don’t have monopoly over which largely tise we need today. It is
foreign lands. define our economy. long overdue.
Warren Mwesigwa
Sebina Simon Kigudde

8 March. 29 - April. 04 2019


Uganda’s strategic dilemma Part3
By Andrew M. Mwenda
Why Uganda’s economy is dominated by multinational
capital and what cannot be done about it
S
o we come to our third and last in-
stalment on how post-1986 Uganda
cultivated groups and interests
hostile to local firms. First to be dis-
credited were local banks, followed by lo-
cally owned construction firms. They were
accused of doing “shoddy work” at a high
price. New procurement laws requiring in-
ternational competitive bidding effectively
locked them out of key contracts.
The same fate befell local manufacturing
firms. The old arguments of infant industry
protection were labelled “corruption and
favouritism.” Museveni could be heard
saying it does not matter who produces
a product; what matters is its quality and
cost. But how could a young and small local
construction or manufacturing firm fairly
compete against big multinational firms?
Yet an indigenous/national/local/domestic
business class did grow during this period;
especially in trade and real estate. This was
not by design. Multinational capital, with
its footloose approach, is least interested in
real estate as it ties down working capital.
With trade and foreign exchange liberalisa-
tion, traders could fly to Dubai or China
and import goods at low prices. This under-
mined local manufacturing.
Capitalism is at its core an ideology of
greed: that everyone should go to the
market and pursue that which is to their
best monetary advantage. Hence as the ide-
ology of money and riches as the supreme
value took root, corruption became an
attractive and large economic sector. Mul-
tinational firms lack social ties with local
officials to negotiate bribes. So they began
hiring local intermediaries as the bridge.
There emerged a large class of what Marx-
ists call compradors but whom we call com-
mission agents – wheeler-dealers who make
money connecting foreign firms to local
politicians and bureaucrats.
Hence, the business groups that con-
solidated under this reform process i.e. the
traders and compradors were those that
have no interest in, and are hostile to local/
domestic/national/indigenous capital in
manufacturing and construction.
Traders make money by importing high
quality products at low prices for the
domestic market. So they are enemies of
national/local/domestic/indigenous manu-
facturing firms. Commission agents make
money by acting as agents of multinational
construction firms to local power-holders.
The Last Word
So they have a vested interest in continued
reliance on multinational construction
firms. These became the local business
magnets. They contribute to NRM’s elec-
toral campaigns and hence have the most
effective local voice in policy-making circles
– alongside donors.
The results are obvious today. Uganda
is investing large sums in energy and
transport infrastructure – railways, roads,
bridges, airports, dams, transmission and
distribution lines, water treatment plants
etc. However, there are hardly any local
firms winning tenders in these multi-billion
dollar contracts. Why? They were either
killed and/or stifled by reforms empha-
sising international competitive bidding
over local ownership. Today, local construc-
tion firms, if they exist at all, lack political
clout to influence public policy.
Local manufacturing firms are in the same
boat. They are finding it difficult to supply
Chinese firms that are winning these con-
tracts for the same reason. On the face of it,
locals look like they lack better quality steel
at competitive prices. The real reason, how-
ever, is they lack political clout to influence
public policy. So when Museveni complains
that Uganda is a supermarket for foreign
manufactures, he is unaware of how he
has spent 33 years promoting policies that
undermined local manufacturing.
This is not a moral judgement on the Pres-
ident. Rather it is to explain how the policies
of the last 33 years effectively weakened,
displaced and stifled the growth of local
manufacturing and construction firms. And
this did not happen to them just as busi-
nesses. Rather the biggest problem is that
they were killed as a political force within
the decision making structure. Instead the
reforms gave economic and, therefore, polit-
ical power to traders (importers) and com-
mission agents (the comprador capitalists).
But this ensemble of forces is beginning to
choke the country. For example, the failure
to grow manufacturing has made it diffi-
cult for Uganda to close her trade deficit in
absolute terms. While since 1991 Uganda’s
exports have grown faster (at an annual
average of 70%) than growth in her imports
(at an annual average of 31%), Uganda’s
trade deficit has reduced in relative terms
but grown in absolute terms. This is con-
trary to East Asian countries like Taiwan,
South Korea and now China whose growth
was characterised by huge trade surpluses.
March. 29 - April. 04 2019
Opinion
Consequently, the contradictions of
Uganda’s growth trajectory are becoming
increasingly manifest. For instance, as the
country invests tens of billions of dollars
in infrastructure, it is also losing a lot of
foreign exchange through paying interna-
tional contractors. At the beginning of every
year, the shilling comes close to collapse as
foreign firms repatriate profits. These con-
tradictions are forcing a discussion on local
content within policy-making circles. How-
ever, this is largely as an intellectual exer-
cise. Without a strong vested local interest
with a politically weighted voice backed
by the correct ideology in decision-making
circles, it is difficult to design and sustain
the right policy responses.
Textbook theories tell us little about Ugan-
da’s current situation. Rather, it is in under-
standing the specificity of Uganda’s reform
process and interplay between politics, insti-
tutions and the economic policy-making
that we can explain why our country is in
the situation it is in now.
The reconstruction process in post 1986
Uganda was driven by local and inter-
national interests with a very definite
ideological orientation. The policies they
pursued empowered (both economically
and politically) particular business groups
and individuals (traders and commission
agents). It also empowered civil servants,
civil society actors, journalists and aca-
demics with a particular ideological bias.
The process also weakened, displaced and/
or stifled particular groups and individuals;
most especially local manufacturing and
construction firms.
The resultant political settlement
imposes constraints on the ability of
Museveni or his successor to successfully
pursue a project promoting local content
policies. The dominant business and
political groups are hostile to local content
laws. Equally, the ideology of key players
in politics, the civil service, mass media,
academia and civil society is hostile.
No amount of altruism can change
this. Only a change in the dominant
ideology, accompanied by a change in
the social groups that dominate political
power and influence public policy can
bring about a real change in Uganda’s
economic direction.
amwenda@independent.co.ug
9
cover story

Museveni doubles
military spending
Rwanda tension cited but why
does govt want Shs1.2 trillion?

President Yoweri Museveni presides over the Special Forces Command

(SFC) combined arms exercise at Karama Armoured Warfare Training
School in Kabamba, Mubende district on July 23, 2017.

10 March. 29 - April. 04 2019


T
By Haggai Matsiko
he government intends to
push over US$320 million
(Approx.Shs1.2 trillion) worth
of supplementary budgets
through parliament in the next
two months, The Independent
can exclusively report. The money must
be passed urgently before the current
FY2018/19 closes in June.
Source familiar with the details of the
government move say the supplementary
budgets were expected as has become the
norm before an election year. However, the
size and components of the supplementary
budgets are raising eyebrows.
The anticipated $320 million is about
5% of the Shs32.7 trillion total resource
envelope for FY2018/19. It is bigger than
the budgets of most ministries.
Part of this money, The Independent
understands, is $100 million (Approx.
Shs370 billion) extra that President Yoweri
Museveni has directed the Finance
Ministry to allocate towards the defence
budget.
This means that instead of the usual
supplementary budgets that many see as
part of Museveni’s pre-election planning
which includes building a financial war
chest for the 2021 elections, the portion for
Defence could be part of preparations in
case of a war with Rwanda.
The directive to increase defence
spending followed two meetings this
month; one with security chiefs and
another with officials from the Finance
Ministry, The Independent understands.
Museveni first met the security chiefs
March. 29 - April. 04 2019
cover story
and discussed “tensions with Rwanda”,
said a source familiar with the details of
the meeting on conditions of anonymity
because of the sensitivity of the matter.
After this meeting, the source added,
Museveni then summoned officials from
the Finance Ministry who he directed to
make the allocations.
The $ 100 million is marked as classified
expenditure under the defence ministry,
insiders say.
Given that initially the allocation
towards defence was about Shs.2 trillion
(Approx. $600 million), the new allocation
brings to about Shs 2.6 trillion, the total
defence budget for the financial year
ending this June. That is a one percentage
point rise on Defence spending in the FY
2018/19.
Details indicate, however, the Defence is
likely to get significantly bigger allocation
in the next FY2019/20 budget that Finance
officials are putting together. The total
resource envelope for next financial year
was projected to be about Shs.35 trillion
(Approx.US$9.5billion).
In this budget, Defence spending was
set to drop to Shs.1.9 trillion according
to National Budget Framework Paper
(NBFP).
Now, The Independent understands,
the Finance Ministry will add another $270
million (Approx.1 trillion) to the defence
budget for 2019/2020 alone. This will bring
Uganda’s defence spending to close to $1
billion dollars again.
Uganda last spent $1 billion dollars on
defence in 2011. That year, Uganda even
surpassed regional giant Kenya’s defence
spending for the first time.
Of the US$ 1.02 billion, US$270 million
was spent on its usual defense budget
items (food, salaries etc) and US$ 750
million on acquisition of 6 Su-30MK
Russian jets.
The acquisition of the jets elevated
Uganda’s air force to one of the most
advanced combat aircraft squadrons in
East and Central Africa, the Stockholm
International Peace Research Institute
(Sipri), which tracks conflicts and military
spending globally, reported.
In its recent report, Trends in
international arms transfers, 2011, SIPRI
notes that the purchase of the fighter
jets and other arms increased Uganda’s
military expenditure by 300%, dwarfing
Africa’s 9% and the world’s 24%
expenditure on arms.
Given that this time the budget for the
financial year 2019/2020 has only increased
by Shs.2 trillion from the current financial
year, Defence, it appears will swallow half
of the national budget increment.
The Defence budget is skyrocketing at a
time when allocations to other sectors are
dipping.
For instance, the Health budget is
11
 cover story
President Museveni on March 15 passes out 6239 Local Defense Unit (LDU) trainees at Kaweweta Training School in Nakaseke District.
reducing from Shs2.3 trillion to Shs2.2
trillion and Education is equally facing a
cut from Shs2.7 trillion from shs2.6 trillion,
according to details in parliament’s Budget
Committee report on the NBFP.
It is also growing at a time debt is piling
and the taxman is facing tough times
meeting its revenue collection targets.
Uganda Revenue Authority (URA) has
registered over a Shs1 trillion revenue
shortfall and debt now stands at Shs41.3
trillion or 41.5% of national Gross Domestic
Product.
As a result, Treasury Operations, which
deals with domestic debt refinancing,
was allocated a total of Shs9.5 trillion. The
other lion’s share Shs5.3 trillion up from
Shs.4.7trillion went to the Works Ministry.
Rwanda tension
The doubling of the defence might not
come as a surprise; especially for those
following tensions between Uganda and
Rwanda closely.
Rwanda escalated tension in late
February when it introduced new stiff
guidelines at its border with Uganda
at Gatuna. Uganda’s Foreign Minister,
Sam Kutesa, explained that Rwanda has
imposed a trade embargo and ordered a raft
of high cost and non-tariff barriers.
The Rwanda move saw Kenyan President
Uhuru Kenyatta travel to both Kigali
and Kampala on March 11 to meet with
Museveni and Rwandan President Paul
Kagame as part of diplomatic efforts to calm
tensions.
Despite these efforts, however, Uganda
and Rwanda are said to have armies on
12 March. 29 - April. 04 2019
standby, and recruiting and training more.
Both Museveni and Kagame have recently
been seen spending time with their armies.
While addressing a National Leadership
Retreat (commonly known as Umwiherero)
at Gabiro in Kigali recently, President
Kagame said the tensions with Uganda
could mean reallocating more resources to
defence.
Insiders say Uganda is increasing
its defence spending in the face of the
likelihood of a war with Rwanda.
But Museveni has always wanted to be
seen as the military giant of the region. He
has wanted a strong well-equipped army
ever since his government formulated its
security policy in 2001.
Initially, Museveni needed to defeat
the Joseph Kony Lord’s Resistance Army
(LRA). Then he entered Somalia to fight
against the al Shabaab. But he has also
been in competition for regional military
superiority with; especially Kenya. But he
has feared being caught unprepared by
spill-over of war in South Sudan and Sudan,
and now Rwanda.
Part of the reason, some experts say, is
that President Museveni has been keen to
be seen as a major player in pacifying the
reason.
But the other is that he has been keen to
keep the UPDF in battle in order to keep
the soldiers busy while improving their
experience and resources. Between 2012
and 2013, Uganda reportedly ordered new
batches of weapons, including tanks and
ant-tank missiles.
As a result of Museveni’s efforts,
observers say, the UPDF has been chiseled
into a modern fighting machine with proper
systems. There have not been reports
of ghost soldiers on the payroll and in
recruitment, promotion, deployment, and
procurement are said to be professionally
handled.
Officers in specialised units such as
artillery, armored and air defense, have
undergone a lot of training locally and
abroad. The units have also been reinforced
with personnel and modern equipment.
Most of the training happens at the Senior
Staff and Command College at Kimaka in
Jinja. Previously training of officers was
slow because Uganda was sending one
or two officers a year to command and
staff colleges in Ghana, USA or UK. With
Kimaka, the country can output 40 officers a
year, sources say.
The UPDF leaders say increased
professionalism; including deploying right
officers in the right command positions, has
led to increased operational effectiveness.
The UPDF was able to break the back of
the Joseph Kony Lord’s Resistance Army
(LRA) rebellion in Northern Uganda, and
deploy peace-keeping and stabilization
forces in Somalia and South Sudan.
Also, as a result of these deployments,
Uganda’s military proved to be double-
blessing for Museveni; keeping Museveni as
a strategic ally of the U.S in the war against
terrorism and earning him dollars.
Under the United Nations and African
Union peacekeeping agreements, troop-
contributing countries are reimbursed if
they deploy with their own equipment,
both lethal and non-lethal under an
arrangement named reimbursement of

Contingent Own Equipment (COE).
At some point Uganda was being
reimbursed up to US $7million and the U.S.
has severally donated equipment to the
Ugandan military.
These handouts have in turn allowed
President Museveni to use some of the
money budgeted for the army to fund his
politics.
Election money
That is why even now, the rest of the
Shs1.5 trillion that will soon be passed by
parliament as supplementary budgets is
seen as money intended to fund NRM
campaigns.
It might appear early days to the 2021
elections, but preparations have already
kicked off. The NRM rolled out its electoral
road map and recently at the retreat of
its MPs at Kyankwazi selected President
Museveni as their flag bearer in the 2021
polls. Supplementary budgets have a major
concern, especially before elections. The
International Monetary Fund (IMF) had a
major fall-out with President Museveni over
supplementary budgets; especially the ones
requested towards elections.
But the supplementary budgets have
grown year on year. And if the past is
anything to go by, ahead of the 2021
elections, more supplementary budgets are
in the pipeline.
Year on year, President Museveni’s
government has been tabling more and
bigger supplementary budgets. They have
been increasing from 4% in 2008/2009 of
the national budget, to 7.2% in 2009/2010
and over 30% in 2010/11.
In 2015, Finance Minister, Matia
Kasaija requested for a Shs847 billion
supplementary budget of which, only
Shs11.9 billion was for development
expenditure and a whopping Shs728.1
billion for recurrent expenditure.
Critics said it was a slush fund for
Museveni’s 2016 bid.
One of Kasaija’s predecessors, Syda
Bbumba, delivered supplementary
budgets of close to a trillion shillings--with
the last round coming in December 2010
right in the middle of campaigns.
Bbumba first got parliament to approve
a supplementary of Shs600 billion then
another of Shs380 billion.
Around that time, President Museveni
had got Central Bank Governor
Tumusiime Mutebile to draw from the
reserves a staggering Shs1.7 trillion for
acquisition of six Russian-made jets and
their accompaniments.
It later emerged the six jets cost
Shs108billion each or Shs654 billion in
total and not the Shs1.7 trillion passed
by parliament. That left Shs1.1trillion
unexplained.
While some of these funds might have
been spent on the other weapons, as this
was classified expenditure, central bank
Governor Tumusiime Mutebile later
said this “not completely transparent”
expenditure might have found its way into
funding Museveni’s campaign.
Mutebile said they might be the reason
the economy was thrown into “total chaos
almost after the last elections”.
“I cannot determine how much of the
money that I have created ends up in
March. 29 - April. 04 2019
cover story
political electioneering. It happens,” he
said.
Basing on the trend of previous elections
spending and estimates by insiders, The
Independent estimated that the ruling
party spent over Shs350 billion in 2011.
That figured went up to over Shs500 billion
in 2016 and is set to increase further in
2021. The consequences are always dire
as such spending often diverts resources
from critical areas. Also, to fill the gap,
the central bank is always forced to sell
treasury bonds to the private sector,
sucking money from it and crippling
private investment.
After the 2011 elections, Uganda’s
inflation rate jumped to about 30%. And
after the 2016 elections, economic growth
fell to slightly over 3%.
Other factors, such as the civil war in
South Sudan, which cut off Ugandan
traders, might have contributed to the
poor economic performance but diversion
of resources was critical. For instance, the
government failed to pay some Shs400
billion owes to local entities. These in turn
failed to meet their loan obligations. Many
of them folded. A few left standing were
crippled.
It is because of such consequences that
experts say that while the government
is entitled to this arrangement,
supplementary budgets should, under
current regulations, not exceed 3% of the
entire national budget.
But with elections looming and a
threat of war with Rwanda, that is the
last caution President Museveni might
want to consider.
13
news analysis
President Museveni meeting with officials from Finasi.
Lubowa Hospital
controversy
How bad can investing in a specialised hospital be?
By Ian Katusiime
B
ring them in. Give them free
land. Offer them Tax exemptions.
Guarantee their financing. Don’t
bother them with minimum
wage. Then allow them to take their
profits back home.”
That is how one unhappy commentator
reacted on the decision by the Ugandan
government to guarantee a loan for the
construction of a specialised hospital
in Lubowa, Kampala by an investor – a
blanket term for any foreigner with a
commercial venture in Uganda.
Investors are usually feted by the
government and Parliament which
is mandated to vet such government
decisions, passed the deal recently, albeit
with heated debate from opponents.
The commentator said tongue-in-cheek
that Uganda should formalise a concept
14 March. 29 - April. 04 2019
dubbed No Risk Investor (NRI) – since the
government appears determined to cover
any risk an investor could face.
In this case, the anti-investor sentiments
appear to be because the investor is an
opaque Special Purpose Vehicle (SPV)
involving a known construction company;
Roko Construction Ltd and an unknown
firm called Finasi. The SPV is called
Finasi/Roko Construction Ltd and the
government has made little effort to lift
the veil on those behind the venture.
When the ground-breaking for the
hospital happened in June 2017, the
investor behind Finasi was identified as
a woman named Enrica Maria Aristidina
Pinetti. Since then, there has been a
frenzy, especially in the media to unveil
the woman who appears to be favoured
by President Yoweri Museveni.
In 2014, the same Enrica Pinetti excited
Museveni with a proposal to produce
instant coffee. She said she would set up
a company called Uganda Vinci Coffee
Company Limited in Namanve Industrial
Park in Kampala. It is not clear how far
this project went.
On the face of it, the Lubowa Hospital
transaction appears rather straight
forward. Finasi/ Roko Construction SPV
Ltd would design, construct, and equip
the International Specialised Hospital of
Uganda (ISHU) in Lubowa, Kampala.
In return the government of Uganda
undertakes; through promissory notes
or a written promise to pay up to $379.6
million to Finasi/ Roko Construction SPV
Ltd.
The assumption is that Finasi/ Roko
Construction SPV Ltd aims to raise money
for the venture using the government of
Uganda’s promissory notes as a guarantee
of payment. The hospital will be the
property of the Republic of Uganda. It

will contain 264 beds, doctors and nurses’
accommodation, a 9 MW powerhouse and
a National Ambulance Control Centre. It
will be located on 72000 square metres all
availed by the government.
However, the government is expected
to provide over $5-6million to Finasi each
year over the eight year period when
Finasi will be managing the hospital.
But the decision has stirred a lot of
controversy and Museveni had to write
to the Speaker of Parliament to ensure the
venture is passed.
Whereas President Museveni thanked
MPs for approving the loan guarantee
for the investor behind the hospital, some
observers think that the decision may
have far reaching financial implications
even long after the hospital is operational.
Deal shrouded in smoke
Julius Kapwepwe, the programmes
director of the Uganda Debt Network, an
organisation that advocates for prudent and
transparent resource utilisation, told The
Independent that he is worried about the lack
of transparency of the procurement and
financing of the project.
“The problem with this hospital is that it
is shrouded in smoke. We don’t seem to see
transparency,” he said. According to him
the actual figure of $379million has been
queried because it shifted from the initial
figure of $354 million.
But Syda Bumba, the chairperson of
the National Economy committee which
inquired and scrutinised the project and
eventually gave the promissory note a go
ahead, told The Independent that there was
no scam in Parliament’s resolution.
“That project was started in 2013. Even
the initial figure for the project going up is
justified due to the costs of financing.”
Bumba says there is controversy about
the promissory note arrangement because
many commentators are not familiar with
the type of transaction. Bbumba says
promissory notes are a standard mode of
payment in investment and have been used
before by previous governments in Uganda.
“This is an acceptable method to be paid
at an agreed time,” said.
Some critics have argued that the money
going to the new hospital could have
been better used elsewhere. And the list of
better options, according to critics, appears
endless. It includes going into enhancing
the salaries for nurses and doctors,
improving existing facilities such as district
hospitals and health centres, and ensuring
that government health facilities do not
suffer drug stock outs or instead get an
equipment upgrade.
Kapwepwe of UDN says the
government should be working on
improving Uganda’s existing facilities.
“Uganda has already moved towards
the improving of its referral systems.
African Development Bank loans have
been used to put up Kiruddu and
Kawempe hospitals so that the main
Mulago hospital can be used for the core
referrals of cancer and others can go to
the new Women’s Hospital and others,”
Kapwepwe said.
He adds that Uganda has already sent
out several medical doctors in several
places across the globe.
There is also a view that the government
should be focusing on injecting more
resources into the Mulago National
Referral Hospital; Uganda’s premier health
facility located in Kampala.
One of the
reasons the
government
cited for the
establishment of
an internationally
credited health
facility is
to counter
the growing
burden of Non
Communicable
Diseases (NCDs)
like cancer
The Uganda Medical Association
(UMA) says this would have been a better
approach. Mulago has been undergoing
some major infrastructure renovations,
equipment upgrades, and human resource
improvements. But the government has
been criticised for failing to release all the
money needed for Mulago’s renovation to
be completed. Some estimates indicate that
$379million, the cost for the construction
of the hospital is roughly half the annual
budget of the Ministry of Health.
The doctors’ umbrella body in
mid-March petitioned the Speaker of
Parliament and President of Uganda,
saying the lack of consultation of Ugandan
medical professionals on the project
undermines government’s stated Buy
March. 29 - April. 04 2019
news analysis
Uganda Build Uganda (BUBU) policy.
UMA urged government to prioritise
refurbishment of Mulago Hospital
Complex which has 900 beds and is likely
to afford more services to Ugandans than
the Lubowa Hospital. Mulago needs only
Shs24 billion to complete its renovation.
Hospital overpriced?
Dr Ekwaro Obuku, the president
of UMA, told The Independent that the
Lubowa Project is over-priced. He said, for
example, phase one of the Lubowa project
will take $379m for 264 beds, which is
$1.1m per bed.
“Such hospitals cost about $100,000 to
$300,000 per bed,” he said.
One of the reasons the government
cited for the establishment of an
internationally credited health facility
like the International Specialised Hospital
of Uganda is to counter the growing
burden of Non Communicable Diseases
(NCDs) like cancer and heart and kidney
complications among other things.
But Okwaro said more effective ways
of curbing the endemic problem of NCDs
involve primary prevention since NCDs
are diseases of lifestyle.
“Otherwise for the treatment of NCDs,
we need to strengthen the Regional
Referral Hospitals with doctors and
diagnostic equipment,” said Okwaro said.
He added that since treating NCDs are
costly, the government needs to quickly
institute innovative financing mechanisms,
key of which is a public health insurance
scheme.
He said the government should have
weighed the opportunity cost for investing
in Mulago, the Uganda Heart Institute and
Regional Referral hospitals.
But Lawrence Bategeka, an economist
and vice chairperson of the Parliamentary
Committee on National Economy says
boosting existing medical facilities is not
the same thing as building a specialised
hospital of the proposed Lubowa
standards.
“No matter how you improve your
hospitals, you may lack the capacity or
even the incentive to do the right thing.
Therefore, this hospital is the right thing
for us Ugandans,” Bategeka told The
Independent.
He says not many countries have such
facilities and, therefore, Ugandans should
look out for this opportunity.
“To the Ugandans who go to Kenya for
treatment, why do you think they don’t
go to Nairobi Hospital and go to Aga
Khan Hospital?” he said, “It is because
Aga Khan has that rating and Nairobi
does not.”
Bategeka chose to look at the medical
benefits accruing from the hospital once
it is completed and not bother so much
about the financial implications.
15
news analysis
Cyclone Idai: Mozambique’s
historic tropical storm
Hundreds killed and over 800
square miles covered in water
By Agencies
T
ropical Cyclone Idai struck the So-
fala ‘province of Mozambique in the
waning hours of March 14, causing
damage and flooding that could
make it one of the worst weather disasters
to ever hit the Southern Hemisphere.
Idai left Sofala with what resembled an
inland ocean stretching more than 30 miles
wide and potentially about 20 feet deep.
The tropical storm destroyed 90 percent
of Beira, a port city of more than a half-
million people. The confirmed death toll
as of March 21 was 557 in Mozambique
and neighboring Zimbabwe and Malawi,
but with thousands still missing or at risk
Mozambique’s president Filipe Nyusi said
the death toll could reach 1,000.
The Sofala province is historically prone
to flooding, and floods occur every two to
16 March. 29 - April. 04 2019
three years in Mozambique, according to
the Global Facility for Disaster Reduction
and Recovery. It also reports that Mozam-
bique ranks third among African countries
for exposure to weather-related hazards.
But the “inland oceans” created by Idai
surpass those created by any previous
storm. A total of 836 square miles were
covered in water as of March 20, according
to the United Nations Institute for Train-
ing And Research (UNITAR). If the entire
country of Bahrain were covered in water,
it would only be roughly a third the size of
the area flooded in Sofala.
Land and Environment Minister Celso
Correia said on March 24 that over 700 peo-
ple were across Mozambique, Zimbabwe
and Malawi; 417 of them in Mozambique.
The number of dead was expected to rise
as many people remained unaccounted for.
The officials will only be able to determine
the final casualty figure once the flood
waters have receded.
Meanwhile thousands remain trapped by
the floodwaters, and many of the Mozam-
bican government’s relief centres have only
just started receiving food supplies.
Some 1.7 million people are said to be
affected across southern Africa, with no
electricity or running water in areas where
homes have been swept away and roads
destroyed by the floods, according to the
BBC. The International Federation of Red
Cross and Red Crescent Societies (IFRC)
were warning of the risk of other outbreaks,
already noting an increase in malaria.
“We are living an unprecedented natural
disaster. A disaster that only matches major
disasters,” Correia said. “Unfortunately,
no-one in the region and in the world could
predict a disaster of this size.”
 news analysis

Timber company workers stand stranded on a

damaged road in Chimanimani, eastern Zimbabwe,
on March 18.

Stranded residents gather on the stands of

a stadium in a flooded area of Buzi, central
Mozambique, on March 20.

A man with an injured foot arrives at a temporary

medical treatment camp after he was rescued by the
Zimbabwean air force in Chimanimani on March 20.

People collect metal sheets from a damaged

supermarket to rebuild their destroyed homes
following devastation caused by the storm in Beira,
Mozambique, on March 21.

Trees damaged by the storm in Beira, Mozambique,

on March 20.

March. 29 - April. 04 2019 17

interview

I can’t believe Museveni and

Kagame want to destabilize
each other -- French envoy
Stephanie Rivoal, the outgoing French Ambassador
spoke to Ronald Musoke about her
highs and lows of her two-and-half year stay in Uganda.

Uganda was your very first post in to talk directly to Uganda’s women, the
your diplomatic career. How have youth, and everyone else. I am getting out of

I
you found your stay here? Uganda having learnt so much.
t is my belief that modern di-
plomacy touches three an- At the start of your diplomatic engage-
gles and, obviously, politics ment, you noted that you were particularly
is number one. A diplomat attracted to Uganda because of its geo-pol-
has to maintain bilateral rela- itics, business prospects and humanitar-
tions between his or her home ian challenges. Do you still maintain you
country and the country where made the right choice in coming here?
you are posted. It has been very I am 100 percent sure that I made the
interesting to get close to the people right choice because Uganda is one country
in positions of power in this country from where you can observe many activities
and to push through our messages. in the region thanks to its strategic location.
The second aspect is the relationship Since I have been here, so many things have
with the private sector; you want to get happened in the region; from Uganda’s
to know the business opportunities involvement in the peacemaking process
that are present in in South Sudan, the elections in Congo, the
Uganda and see relationship between Uganda and Rwanda
how French which of course is a big topic at the moment,
companies the Burundi situation that is linked with
can benefit. Rwanda to the relationship with Kenya
The third and Tanzania; especially when it comes to
aspect is the the business relations. In terms of business,
relationship Kenya is more mature and Tanzania offers a
with civil lot of opportunities but it is a bit bureaucrat-
society— ic and tough to work there while Uganda
where you has positioned itself as an outsider wanting
connect with to attract foreign investments. But for that to
the people di- happen Uganda needs to be more attractive
rectly without and we have had many discussions with
going through the authorities on how to realise that. On
authorities or the humanitarian front, Uganda remains
official bodies. the number one African country in terms of
Thanks to com- receiving refugees. The open door policy in
munication tools Uganda has been something instructive to
like; social media watch. In spite of some corruption issues,
networks, televi- we hope that this globally acclaimed policy
sion and radio, I can still continue.
endeavoured
Give us some highlights of your stay in
Uganda?
The increase in development projects and
the strengthening of the defence relation-
ship between the two governments were
very important but I think the Women for
Women Awards initiative we held in June,
2018, together with other female ambas-
sadors here is something I am particularly

18 March. 29 - April. 04 2019


proud of. I launched this initiative to put
women into the spotlight. I think, at the
beginning, the benefits are not obvious
because it is not a cheque but I believe
the ladies who received the awards in the
long run will change the place of women
in the private sector in Uganda thanks to
the network they have created. I am also
extremely proud of the Kampala Geopoli-
tics conference that we did last year. That
was some huge amount of work and to do
it within Makerere, a university which has
a reputation on the continent; to be able
to bring here researchers from France and
Germany and, of course, local thinkers
and researchers was great. The Kampala
Geopolitics conference was about freedom
of expression, debate and also positioning
African students mentally in a place where
they need to care and have an opinion on
everything in the world. I want the things
that I initiated here to have an impact when
Iam gone. It is not about me here; it is about
France in Uganda looking ahead.
How would you describe the current rela-
tions between France and Uganda?
When I first arrived here, I really had
no idea how good France’s relations with
Uganda were. I thought we were way
behind the UK or the U.S. but in fact, I
discovered that we already had a very
strong relationship with Uganda in terms of
development and military cooperation, the
collaboration with universities, and Alliance
Française. I would describe the relations as
excellent. But like I said at the beginning,
the relationship between two countries goes
beyond the relationship between the two
governments.
One of your key performance indicators
was to increase the presence of French
business in Uganda. How have you fared?
Out of ten, I would say I scored seven. I
did three presentations in France to French
businesses and for the first time ever, we
attracted many delegations here. MEDEF,
the largest syndicate of the private sector in
France came here for the first time in 2017.
Now we are waiting for concrete projects.
We have been very active to make sure
that the technology of Airbus is selected
for the new Uganda Airlines. Of course the
oil project is a big one; it was there before I
came but I believe it is taking too much time
because Ugandans are not benefitting from
this oil yet the needs are huge in terms of
education, health and jobs for the youth. We
have so many French companies waiting
to come here to support the project because
they are in the oil industry. Many are also
positioning themselves for infrastructure,
transport and energy. We already have
about 40 French companies here— from
the super large ones like Bolloré, Total, and
Lafarge, to mid-sized ones up to the small
ones.
Over the last two decades we have seen
the French Development Agency (AFD)
almost triple funding for development
projects in Uganda to about € 1bn. What
has made France sink so much in these
projects?
I was lucky when I got here to find a very
good AFD country representative in Virgin-
ie Leroy. She really focused on Uganda and
she managed to push for more and more
projects because they were well-structured
and were also answering Uganda’s devel-
opment needs. The quality of the relation-
ship she had with the Ministries of Finance,
Water and Environment, Energy and Trans-
port made it easier for her to present these
good projects to AFD. But also France’s
strategic focus has been shifting towards
eastern Africa.
Uganda has
to understand
that businesses
have options
elsewhere. It is a
competition and if
the environment is
unstable, uncertain
and unpredictable,
investors dislike
that
What have been some of the achievements
from the military collaboration between
France and Uganda in the fight against
terrorism in eastern Africa?
Well, I am very happy that there has not
been a terrorist attack in Uganda since 2010.
I think that is proof that our collaboration
between Uganda; us and many other part-
ners, is working. I believe the collaboration
against the Al Shabaab threat in Somalia has
been effective and I think it has been benefi-
cial for both countries.
What were some of your frustrations and
disappointments during your stay?
I am a bit concerned about the evolution
of the business terms here. I would have
wanted these terms to be friendlier to ben-
efit the Ugandan economy but it does not
seem to go in that direction. There is a lot of
uncertainty on project decisions, especially
the oil project. The business climate needs to
March. 29 - April. 04 2019
interview
be very much on the (government’s) agenda
so that foreign businesses can feel welcome
here. There is also an element of corruption
here. I think Uganda has to understand
that businesses have options elsewhere.
It is a competition and if the environment
is unstable, uncertain and unpredictable,
investors dislike that.
What’s your comment about the endless
diplomatic spurts between Uganda and
Rwanda and how do you suggest these
two neighbours resolve their disagree-
ments?
When you look at the feud that is going
on right now, we can only be sad because it
is having negative results for both countries.
There are lots of rumours at the moment
and it is very hard to get to know what is
true, but, I cannot believe fundamentally
that there could be a will to destabilize each
other because looking at what Presidents
Museveni and Kagame have said about
regional integration, it is in their interests to
resolve this. A French philosopher (Montes-
quieu) once said that when two countries
meet, they can either fight and they both
lose or they can trade together and they
both win. This is the situation here. We are
hoping the situation will not deteriorate
further.
What will you remember most about
Uganda?
The people are number one and then
the countryside— the wildlife and nature.
I am someone who wants to live my life to
the fullest and for that I need to have many
experiences; I need to go in many places
and meet many people as much as possible
so that when I die or when I look back in
my old years I can say, “Oh my God I have
done so much. I visited many places and I
got in contact with so many cultures and I
can die in peace.”
Where are you headed next?
I have been appointed General Secretary
of the France-Africa Summit which will take
place in Paris in June, next year.We shall
invite the 54 Heads of State of the entire
African continent.The theme is “Sustain-
able Cities” and it is very relevant. The cities
right now are much larger with a bunch of
issues—pollution, congestion, slums, elec-
tricity and jobs. I would like this summit not
to be about the Heads of State only because
they cannot do everything when it comes to
cities.The mayors are extremely important,
the ministries, the private sector and the
people or the citizens of the city as well. So
I will invite a wide range of people to come
to France to lay on the table their concerns
and solutions as citizens, politicians or the
private sector.
19
 advertorial



 









2 20
UMEME POWER: TransformingMarch.
Uganda29 - April. 04 2019

Umeme is a top
grade performer
T 80%
he Electricity Regulatory Authority
(ERA) was established by the 1999
Electricity Act to license and regulate
operations in the electricity sector.
Its mandate includes setting
operating standards and appropriate end user
advertorial
Tibalwa says Umeme has even surpassed
its targets on containing power losses.
Umeme found the losses at 35.2% and has
reduced them to 16.5% and is targeting
14.9% at the end of this year.
The only challenge the regulator still has
#




!










"


supervisor. OVERALL PERFORMANCE 


#




#




%



Also the reliability of supply is not yet
Tibalwa Waako is happy with Umeme’s work. at the level it should be and the regulator
She rates Umeme’s perfomance at 80% and encourages the entity to channel more
says that the power distributor has contributed #






"







 “Although they have improved the
For instance, she says, the entity has reliability and quality of supply,” she says,
increased the number of customers connected “They can make it even better. There is still
to the grid by more than 200% from 280,000 room for improvement.”
to 1.2 million. As of 2018, the growth rate in
Tibalwa also says Umeme should help
connections stood at 138%.
government in accelerating growth and
Indeed Umeme's 2017 annual report demand stimulation.
indicates that connections increased “Over all,” she says, “Umeme has done
monumentally to 8,431.
tremendously well and if I were to rate its
performance, I would give it 80%.”

17%
Drop in power
200% 138%
Increase in
losses from number of people Growth rate in
35.2% on the grid connections

March. 29 - April. 04 2019

UMEME 21
POWER: Transforming Uganda 3
MTN Uganda revenue
rises to Shs1.38trillion
Telecoms subscriber base reaches 11.3million
M
By Isaac Khisa
TN Uganda has record-
ed a 4.4% rise in revenue
to Shs1.38 trillion for the
year ending December
2018 owing to increase
in customer numbers,
data and fintech services.
The company’s financial statements
shows that its customer numbers rose from
10.7million in 2017 to 11.3million as data
and fintech services recorded a 23% and
10% increase in revenues respectively, dur-
ing the same period under review.
MTN currently holds a 54% market share
among the country’s eight telecom firms.
This comes at the time MTN is in negotia-
tion with the Ugandan government to have
its operating licence renewed. The licence
expired in October 2018.
It is currently operating on an interim
licence to allow for the conclusion of nego-
tiations around the terms for the licence
renewal and other issues surrounding
national security.
Since January, the government has
deported the firm’s top four expatriates –
Chief Executive Officer Wim Vanhelleputte
, a Belgian national, General Manager for
Mobile Finance Services Elsa Mussolini an
Italian, Chief Marketing Officer, Olivier
Prentout a French national, and the General
Manager, Sales and Distribution, Annie
Bilenge Tabura, a citizen of Rwanda – on
accusations of compromising national secu-
rity.
MTN Group performance
Meanwhile, MTN Group recorded an
increase in revenue from Shs34.35 trillion in
2017 to Shs 34.76trilllion in 2018 driven by
increase in customer base and data services.
Last year, MTN Group had 233 million sub-
scribers, up by 16million.
For that the company reported an 85%
surge in headline earnings per share, the
main profit measure in South Africa to
Shs871.
Nevertheless, the bottom line is still not at
22 March. 29 - April. 04 2019
Rob Shuter
even half the level MTN reported in 2015,
the year before it agreed to pay a Shs
6.25trillion (US $1.7 billion) fine in Nigeria
for missing a deadline to cut off unregis-
tered SIM card users.
The fine was a reduction from the initial
Shs 19.12 trillion (US$5.2 billion) after MTN
made concessions, including a promise to
list its Nigeria unit.
The flotation of MTN Nigeria, which
accounts for a third of MTN’s core profit,
is likely to take place by the end of June,
according to company executives.
The Nigerian unit has also been
embroiled in other rows with Nigerian
authorities.
For instance, in December last year, it
agreed to pay $53 million to resolve a dis-
pute with the Central Bank of Nigeria and is
involved in a court battle with the Nigerian
attorney general over $2 billion in back
taxes.
However, the firm’s net profit more than
doubled from 4,550 million rands to 9,
578million rands.
Rob Shuter, the MTN Group CEO said
the Group sees significant opportunity
to grow subscribers and voice revenue in
the near future as it also taps into the large
mobile data opportunity.
“We will also extend our BRIGHT strat-
egy to build MTN into a digital operator
with a major focus on the fintech, digital,
enterprise and wholesale business areas,”
he said.
MTN’s BRIGHT strategy that the com-
pany unveiled in 2017 comprises seven
pillars: Best customer experience; Returns
and efficiency focus; IGNITE commercial
performance; Growth through data and
digital; Hearts and minds; and Technology
excellence.
Firm to exit low growth markets
In a bid to change the company’s for-
tunes, MTN Group said it has embarked
on a Shs 3.68billion (US$1bn) divestment
program in the next three years, a move that
will reduce Africa’s largest telco and focus
on high growth markets.
The Group said it has drawn up a
turnaround plan that includes shedding
loss-making e-commerce assets and exiting
countries where MTN has no prospect of
reaching second position by market share.
On the other hand, it is also pushing the
company into mobile financial services,
music streaming and mobile gaming, bet-
ting on a burgeoning young tech-savvy
population to offset falling prices for basic
telecoms services.
MTN Group has agreed to sell its minor-
ity stake in Botswana’s Mascom for Shs
1.1trillion (US$300 million) subject to regu-
latory approvals. Last year, it sold MTN
Cyprus for Shs 1.1 trillion (260 million
Euros) to reduce holdco dollar debt. At the
same time, it also listed MTN Ghana on the
Ghana Stock Exchange after an Initial Public
Offering aimed at introducing a broad base
of Ghanaian investors.
MTN said its investments in tower com-
panies and e-commerce platforms such as
pan-African online retailer Jumia would be
sold over time as they were not long-term
strategic assets.

US$567million Isimba
dam switched on
Private sector players ask for cheap electricity to power industries
By Julius Businge
O
n March 21, President Yoweri
Museveni commissioned the
Isimba Hydropower Dam, adding
183MW to the national grid. But
the private sector, who consume most of the
electricity accounting for 20% of their pro-
duction costs, have reservations.
“…for private sector though access and
cost remain a challenge,” Gideon Bad-
agawa, the executive director at the Private
Sector Foundation Uganda told The Inde-
pendent by telephone.
He said the electricity costs will come
down if in addition to the refinancing of
Bujagali Hydropower Dam, the country
works to improve demand through attract-
ing most value adding investors especially
in the manufacturing sector.
He hopes the government will address
this soon. He said it is time for the Rural
Electrification Agency (REA) to up its game
under the ERT III project so that most of the
Ugandans can have access to electricity and
eventually drive the cost south.
Currently, Uganda’s electricity access
stands at about 20%, according to Uganda
Bureau of Statistics, leaving the rest of the
population relying on biomass and kero-
sene for lighting and cooking.
Badagawa, however, also said the private
sector needs to invest more in energy effi-
cient technologies to lower the electricity
costs. The private sector views appeared
to be directed towards the government
officials including President Museveni,
who in their remarks never spoke on how
the additional electricity will drive the cost
downwards. The additional electricity sup-
ply puts the country’s installed electricity
generation to about 1000MW amidst the
current demand of approximately 600MW.
A government official , who preferred
anonymity to speak freely, told The Inde-
pendent that the launch of Isimba dam will
not in the short term drive down the cost
of electricity currently averaging at around
8-9 US cents per kWh because government
buys expensive power from other genera-
tors way above 8 US cents per kWh.
However, the official said that with the
coming onboard of new power plants and
anticipated increase in demand especially
from commercial consumers will gradually
drive down the cost to the desirable figure
of 4-5US cents per kWh in the long term.
Eng. Harrison Mutikanga, the chief
Museveni (R) flanked by UEGCL officials at the official commissioning of Isimba power station on March 21.
executive officer of Uganda Electricity
Generation Company Limited (UEGCL),
the official overseer of the project, described
the commissioning of the dam as a ‘major
milestone’ that is in line with government’s
promise of generating 17, 000MW of elec-
tricity by 2028.
With the country’s average annual GDP
growth forecast to exceed 6% and electricity
demand growing at 9% per annum, Muti-
kanga said the inauguration of Isimba has
come at the right time to power and drive
the country’s industrialisation.
“The increased power generation capac-
ity enhances the country’s energy security
and reliability of supply that is a key driver
for Uganda’s social economic transforma-
tion,” he said.
Available data indicates that UEGCL
will sell electricity generated at Isimba to
Uganda Electricity Transmission Company
Limited at US$ Cents 4.16 per kWh. The
annual projected revenue from the plant is
over US$41.6million (approx.Shs150bn).
Mutikanga said that this revenue is ade-
quate to cover operation and maintenance
costs, depreciation, debt servicing, and a
reasonable return vital for financial sustain-
ability of UEGCL.
President Museveni, who did not speak
much about the dam, said the launch of
Isimba is a blessing to Uganda as it would
ensure there is more power to supply to
areas that are currently off the national grid.
He also said that the power station
would in many ways support key govern-
ment interventions in the areas of security,
education, infrastructure, health, informa-
tion and communication technology and
March. 29 - April. 04 2019
business
manufacturing.
He urged the people to start up ventures
that would use power from Isimba dam to
improve their wealth, create jobs and sup-
port social transformation.
Irene Muloni, the minister of energy and
mineral development said that the 4.16 US
cents cost of electricity from Isimba will
apply for the first 15 years of its operation,
but will further reduce to 1.1 US Cents for
the following 23 years – equivalent to the
cost of Nalubaale-Kiira dam.
About Isimba dam
The power station is located 4km
upstream of Isimba Falls on the River Nile,
Approx. 50KM downstream of the source
of the Nile.
The run-of-river plant station is about
21km from Kayunga town as the nearest
town and about 65km from Jinja town.
Construction of the dam started in 2013
with a commencement date of April 16,
2015 and project duration of 40 months.
It was constructed by China International
Water and Electric Corporation (CWE).
It experienced some delays because of
land compensation conflicts and procure-
ment related challenges.
The project was jointly financed by the
government of Uganda (15%) and the Exim
Bank of China (85%) that extended a soft
loan. It is the third largest hydropower
plant in the country, increasing power
generation from the current 984MW to 1,
167MW. The plant has increased elec-
tricity generation by 30%, generating an
average of 1.062bn kWh per year at a load
factor of 70%.
23
business
Inside Coca-Cola Beverage Africa manufacturing plant at Namanve. Museveni says manufacturing is one of the key sectors facilitating economic growth.
Museveni’s dream
on the economy
Expert views on how the economy
could be put on the right growth path
By Julius Businge
T
here is a general consensus that
Uganda’s economy has recently im-
proved and now is doing well.
This is coming from highly
respected institutions like the International
Monitory Fund, World Bank, Bank of Ugan-
da, the Ministry of Finance Planning and
Economic Development, Uganda Bureau of
Statistics and some people within academic
circles.
This reasoning is coming at a time the
economy is reported to have grown at 6.1%
in FY2017/18, up from around 5.6% a year
before – levels that were unheard of in the
past five financial years.
It is expected to further grow by 6.3% in
FY2018/2019 and 6.5-7% over the medium
term.
This growth, according to BoU data is
supported by accommodative financial
conditions, the multiplier effects of public
investments, higher foreign direct invest-
ment, increased agricultural production
supported by good weather and, increase
in consumption and investment as private
sector lending improves.
President Yoweri Museveni, who is at
the centre of this growth sounds impressed
about the performance but appears to now
focus on what would keep this momentum
going ahead.
“I am quite happy with the momentum,”
Museveni told the National Resistance
Movement Members of Parliament retreat-
24 March. 29 - April. 04 2019
ing in Kyankwanzi on March 15.
“The future of Uganda is bright in terms
of building an integrated economy,” he told
the MPs, “we need to conduct an audit and
see which sectors are integrated and inte-
grate those that are not.”
Museveni’s future definition of the econo-
my is now about strengthening the integra-
tion of key sectors of agriculture, industry,
services and information communication
technology.
He explained how this works. For
instance, he said that a sector like agri-
culture supplies raw materials to another
sector like industry or industry supplies
agriculture sector with machinery to ease
production.
Also, a sector like ICT would offer tech-
nology that eases production in manufac-
turing, agriculture or in other sectors and
the reverse is true. He also said that sectors
like education would produce skilled and
talented labour to support growth of key
sectors.
He said supporting these sectors is essen-
tial for creating more jobs and leading to
social and economic transformation. The
IMF argues that Uganda needs to create
600, 000 jobs per year to tackle the growing
unemployment problem.
Museveni said, to date, 4026 factories in
Uganda are employing 600, 000 people,
with ICT employing 2, 000 people and com-
mercial agriculture employing7.8 million
people.
He emphasized the need to support
youth and women to join the four sectors by
forming SACCOs so they are supported by
the government.
He said government would cut adminis-
trative expenditure to save money for youth
and women formations.
He said Uganda Development Bank will
be allocated more money to lend to play-
ers in the four sectors at affordable annual
interest rate not exceeding 12%.
“We want to have a more investor free
atmosphere,” he said, “with no corruption,
delays and confusion.”
He added that oil and gas sector will in
the coming years add to the growth of the
economy.
The good thing, he said, is that there is
a good economic, working environment
supported by good roads, electricity sup-
ply, peace and tightened security and an
improved ICT infrastructure.
Museveni’s new dream is workable
according to economic experts.
However, they are saying that tariff barri-
ers and economic disruptions like the recent
closure of the Uganda – Rwanda borders
– which is suffocating businesses and the
recent poor corporate governance exposed
at BoU by Parliament and other challenges
must stop.
Expert views
Musa Mayanja, an economist told The
Independent that the President’s dream is
fine.
He said that sectors are supposed to
work as a connected system, where say
agriculture can supply or receive from other
sectors; financial sector can offer credit to
agriculture sector as the latter borrows from
the former. He says this has been working
but ‘what is lacking is the magic bullet’for it
to boost production and productivity.
The magic bullet, he said, is about offer-
ing affordable credit, inputs, and training of
farmers on better farming practices, invest-
ing in water for production which would all
link to the economic growth agenda.
Mayanja said that if a sector like agri-

culture is well supported and more output is
produced, the country would have enough to
supply to industries for further processing. This
would create more opportunities for growth in
terms of jobs and exports to outside markets.
Commenting of economic disruptions like
the Uganda-Rwanda border standoff, he said
that these “are with us for some time and they
will affect us” in the short to medium term.
He said trade barriers leads to business fail-
ure where borrowers fail to pay loans, jobs are
lost, and farmers failing to pay suppliers, and
the local shilling depreciating against foreign
currencies.
As a solution, he says there are frameworks
in place that should guide authorities on how
to solve grievances at hand, on time so as not to
suffocate the economy.
Fortunately, Stanbic Bank’s East African
Regional Economist, Jibran Qureishi says that
amidst challenges, overall activity in the private
sector remains robust.
He says that improving domestic demand
has not been a coincidence considering that
the banking sector non-performing loans have
eased which has in turn boosted private sector
credit growth.
Enock Twinoburyo, a senior economist at the
Sustainable Development Goals Center for Afri-
ca based in Kigali, Rwanda said the Uganda
and Rwanda border impasse are far beyond the
trade balance or trade channel. He said there
are several other mechanisms to look at this
in which either the economy – trade, financial
flows in form of FDI and remittances – all of
which have implications for the financial sector.
He warns that a prolonged standoff could
shed off Uganda’s projected GDP growth in the
range of 1-2%.
Commenting on BoU’s scandal on sale of
commercial banks, Twinoburyo said that is a
minor issue that can easily be rectified for the
bank to operate normally.
However, he said, the central bank credibility
is neutral in the eyes of Ugandans and policy
makers. “What weakens its position is the lack
of sufficient capitalisation and negative income
statements which means the bank is not healthy
to manage its monetary policy effectively,” he
told The Independent. “That aside, the growth
outlook remains strong going by IMF’s recent
statement.”
According to the IMF statement released on
February 14, Uganda’s economic growth has
recovered, while progress on social indicators is
mixed and poverty reduction has stalled.
It says that fiscal and external vulnerabilities
have increased, reflecting scaled-up infra-
structure investment, but also weaknesses in
the budget process. To achieve more inclusive
growth, the Fund says that the trend towards
reduced budget allocations for social sectors
should be reversed.
It acknowledges that BoU’s monetary policy
has maintained low inflation (headline inflation
stood at 2.7% in January—core inflation was
3.4%) and can stay the course. It adds that core
inflation, the main target for BoU’s monetary
policy is projected to accelerate and converge
to the BoU’s target of 5% over the next 12 to 18
months, with a gradual shilling depreciation,
higher food prices, and demand pressure from
fiscal spending.
However, it raises concerns on the country’s
debt that is currently around 40% of GDP. To
counter further increases in projected debt and
provide a buffer against shocks, it suggests that
the authorities could set an operational debt
ceiling of 50% of GDP in nominal terms.
“This ceiling would then determine the
annual budget deficit and define a binding
expenditure,” it says, adding that this frame-
work could guide fiscal policy until oil produc-
tion starts at which time the authorities plan to
adopt a fiscal rule for managing oil revenues
and their inherent volatility.
Positive prospects ahead
Going forward, over the next five years,
growth could reach 7%, if infrastructure and
oil sector investments proceed as planned, and
private sector credit remains supportive.
It adds that key open issues in the nascent oil
sector have recently been resolved in principle.
It anticipates oil production to start in 2023.
It says that risks to the economy include fur-
ther delays in oil production, weak implemen-
tation of infrastructure projects, political ten-
sions, adverse weather conditions, health con-
cerns in the region, and global trade tensions.
March. 29 - April. 04 2019
business
Key facts, figures about the
economy
 Lending rates on shilling denom-
inated loans remained relatively
stable in Quarter to December
2018, averaging 20.3%, with the
weighted average lending rate
falling to 20.2% in Dec 2018 from
20.5% in Nov and 20.4% in Oct.
 The lending rates on forex loans
stood at an average of 8.2% in
Quarter to Dec 2018, with the
Weighted Average Lending Rate
of 7.8% in Dec’ 2018, 8% in Nov
and 8.7% in Oct.
 Average annual growth in PSC
in quarter to Dec. 2018 was
11.3% compared to 11.1% for the
Qaurter to Sept. 2018.
 Average annual credit growth to
different sectors averaged 9-10%
in the Quarter to Dec. 2018.
 The current account position
remains weak, with the cur-
rent account Deficit widening
from US$1,272million in 2017 to
US$2,465million in 2018 largely
driven by the trade deficit which
increased by 40% ($692million).
 Import bill grew by 17%
($881million) on account of a
$785million increase in private
sector imports for investment
(machinery and equipment,
gold, base metals,) reflecting a
pick-up in economic activity.
 Oil imports grew by $215million,
reflecting the increase in oil price
in calendar year 2018, and rela-
tive to FY17.
 The impact of the import growth
on the current account deficit
was partly moderated by a 5%
($188 million) increase in export
receipts; driven by increase in
gold exports which increased by
23.2% to $514.9 million. The net
exports of gold were estimated at
US$52.5million.
 Reserves stood at
US$3,414.5million (which is
equal to 4.3 months of import
cover) at end Dec-2018, up from
US$3,292.6million (4.3 months of
import cover) as at end Sep-2018.
 Current account deficit is project-
ed to widen by US$882Million
between Jan to June-2019,
building up to a deficit of
US$2.1billion at end-FY2018/19
 Year-on-year, the shilling
depreciated by 1.7% in Janu-
ary 2019 compared to 2.5% in
December 2018.
Source: Bank of Uganda MPR –
February 2019
25
business
Fight over proposed sugar bill
Big sugar producers insist government
must incorporate zoning clause
By Patricia Akankwatsa encourage big sugar producers to venture
T
he fight over the proposed Sugar
Bill 2016 seems to be far from over
as President Yoweri Museveni
promises to return it back to
Parliament barely four months since it
was passed in November last year.
Museveni, who was speaking during
the recently concluded National
Resistance Movement retreat at the
National Leadership Institute in
Kyankwanzi, is reported to have said he
will not sign the Sugar Bill in its current
state into law.
“The way you (Parliamentarians) are
behaving, you are antagonizing our
old sugar people and I don’t know the
relationship you have with small sugar
people. Some of you have got a suspicious
relationship with the small sugar people
and now you are sabotaging my plan,”
he said.
“Because now when I tell Madhivani he
says you are sabotaging me, I am about to
close. They aren’t lying (and) even if they
are lying; you need to know where your
interest lies.”
“Some of you leaders get mixed up like
the way you handled the sugar bill which
I am going to send back to you…The way
you passed the sugar bill, this industry
will collapse,” he added.
Museveni said he had plans to
26 March. 29 - April. 04 2019
into production of refined sugar to be
used in the manufacturing of medicines.
Though the manufacturers have
welcomed Museveni’s views, sugar
growers are opposed to the new decision.
“This is the best bill in the country
compared to other countries,” Michael
Mugabira, the coordinator for Uganda
Sugarcane Growers Association told The
Independent in an interview.
“It disputes monopoly of these big
manufacturers. If they are not ready for
competition, then let them drop out of the
business.”
Mugabira said he would like to see
President Museveni sign the Bill into law.
On the other hand, manufacturers,
want the Bill to be revised especially with
the issue of zoning so as to restore sanity
in the industry.
“MPs need to be aware of what has
transpired in neighboring countries
where zoning was halted, the sugar
industry collapsed,” Kenneth Barungi, the
spokesperson Kakira Sugar Limited said
in reference to the Kenya’s sugar industry
in which majority of the sugar factories
are struggling to remain afloat as a result
of cane poaching that has resulted to
under-capacity.
Barungi said some of the countries
in the region are now importing vast
quantities of sugar overseas and depleting
their foreign exchange reserves.
Earlier, the government had proposed
a radius of 25km between sugar mills and
out-growers in that area supplying cane
to only one mill.
However, the legislators scraped
off zoning of sugarcane growers by
sugarcane millers, giving cane growers
more power to sell their products
to any sugar mill. A proper pricing
methodology was also set to protect out-
growers. 
Parliament also voted to double the
number of out-growers on the Uganda
Sugar Board from two to four since they
are the majority in the sugar cane growing
industry.
The passing of the bill fueled fights
between the out-growers and the millers
as well as the giant sugar manufacturers
and new players in the industry. 
The big sugar companies argued that
they funded the out-growers in terms of
provision of raw materials and fertilizers
in anticipation of purchasing the cane
once it is mature.
But out-growers said the situation led
to domination of sugar territories by the
big companies, leaving small and new
companies struggling to get supply and
ultimately leading to cane poaching.
Dating back to the 1920s, Uganda’s
sugar industry currently boasts of more
than 13 sugar manufacturing firms dotted
across the country, making it one of the
most attractive investment destinations.
The sugar production has increased
from merely 240,000 tons in 2008 to
386,000 tons in 2017 amidst local demand
of approximately 350,000 tons.
 Executive Style
Xsabo Group pioneers
biodegradable sanitary pads
Briefly tell us about
the Fancy Pad proj-
ect. Why did you
decide to come up
T
with such a project?
he “Fancy
Pad” project is
an innovative
sustainable
Ugandan answer
to ensuring good
personal Menstrual
Hygiene Manage-
ment with continuous
availability of sani-
tary pads to all Ugan-
dan girls and women.
It is the product of
my workshops with
Bukoto Art Group at
which I taught the
artists in Kirimya
Village near Masaka
how to make paper
out of banana fibres,
papyrus and such
other fibres. I had met
the team for the first
time in June 2016 and bought
arts and crafts from them. I
returned to the Bukoto Art
Group on behalf of the Xsabo
Group in January 2017 which
had decided to provide fi-
nancial support to art groups,
youths and women in selected
areas. Soon I learnt that many
girls in Uganda miss school
during their menstrual period
due to the lack of sanitary
pads. I thought I could do
something about it. Alas! The
idea of self-made sanitary
pads out of local Ugandan
banana fibres, maize, papyrus
and other vegetable fibres was
born!
Why should one consider
buying your pads compared
with the manufactured pads?
The “Fancy Pad” is an
easy to make Do-it-Yourself
sustainable 100% biodegrad-
able sanitary pad from local
raw materials (banana fibres
and other Ugandan vegetable
fibres). Its production and dis-
posal therefore produce zero
waste. It is clean and hygienic
(one-time use). The “Fancy
Pads” are low cost as they are
cheaper than the commercial
pads in supermarkets.
In concrete terms, a set of
8 “Fancy Pads” would go for
Shs 2,000 compared to a set of
8 commercial sanitary pads
that currently cost at least Shs
4,000.
What is the performance of
the “Fancy Pad” on the Ugan-
dan market?
The “Fancy Pad” project is
still in the pilot phase. To-date,
over 1,000 samples have been
tested by girls and women of
all walks of life in Uganda,
Germany, USA and Croatia.
All these girls and women
are extremely happy with the
Fancy Pads and many say
they are much better than the
commercial sanitary pads they
have been buying up to now.
Franziska
Leischker is
the director
at Xsabo
Foundation
in Uganda.
She spoke
to Isaac
Khisa
about the
opportunities
of their new
product
dubbed
Fancy Pad.
What has the “Fancy pad”
impacted on the local com-
munity?
The immediate impact in the
communities is that our initia-
tive is now enabling many girls
in those areas to stop missing
school during their menstrual
period. What I have also been
noticing is that while the vast
majority are making the Fancy
Pads independently for them-
selves, many have opted to
make extra sanitary pads and
sell them to those who prefer
to buy rather than make them
themselves. It is very easy to
make the Fancy Pads in any
size.
What is your assessment of the
level of innovation in Uganda?
The people of Uganda are
very friendly, open-minded
and eager to learn. I see this
especially in the children and
the youths. The eagerness to
learn is one of the most impor-
tant prerequisites of innovation!
Therefore, with the right sup-
March. 29 - April. 04 2019
port, the future of this
country is really bright.
What is the future out-
look of this project and
the related products?
While noting that over
the past two decades,
Uganda has seen incred-
ible strides in primary
and secondary school
enrolment across the
country with a significant
increase in the enrolment
of girls, a policy recom-
mendation of the Gov-
ernment of Uganda enti-
tled National Menstrual
Hygiene Management
in Ugandan Primary
and Secondary Schools:
Gender, Health and
Development carried out
in 2017 documents that
the retention rate for boys
remains significantly
higher. The study states
unequivocally that one
of the primary determinants for
this observed gender difference
in school retention rates is poor
menstrual hygiene manage-
ment in schools. As you know,
in some areas up to 86% of girls
in Uganda miss school because
they cannot afford sanitary
pads and lag behind in class as
a result. The national average is
more than 40%.These girls skip
4 to 5 days of school for every
28-day cycle. It is, therefore,
very clear that the “Fancy Pads”
project is addressing a matter
of paramount importance for
current and future generations
of girls and women in Uganda.
That is why our implementa-
tion concept envisions roll-out
in various parts of Uganda with
women being given the skills
to make the self-made sanitary
pads and in turn equip other
women with the same skills
and same responsibility.
27
Business
PAINT CSR

Plascon to launch Airtel pays out Shs400m to winners

O
anti-mosquito paint n March 19, Airtel Uganda and health.
in Kenya, Tanzania officially ended its ‘Beera
Millionaire with Airtel Money’
The company’s Managing Director
V.G. Somasekhar said over Shs400

P
promotion. The company million was paid out to lucky customers,
aint Maker, Kansai Plascon, executives said the promotion that winners.
plans to unveil the anti- was launched in December 2018, has “I encourage all the winners to use
mosquito paint in Kenya and changed the lives of over 400 Ugandans this money to improve their lives
Tanzania subject to regulatory through employment opportunities and and create a positive impact in their
approvals. enabling them meet costs of education communities,” he said.
Kansai Plascon Uganda
Co-Managing Director, Chris Nugent,
said the company has submitted
application to the authorities in the two
countries to allow launch the product.
“Once these two countries approve
the product, then, we shall be ready to
launch our product there,” he said at
the company’s premises on March 19.
Plascon launched the anti-mosquito
paint in Kampala on Feb.05 preceding
Zambia. It is estimated one to two
million people die in Africa as a result
of malaria. Winners pose for a photo opportunity with V.G Somasekhar.

CSR CSR
dfcu Bank donated Shs 150 million towards Rotary Hospital Xsabo Group holds

D medical camp for

fcu Bank has con- health education. Maternal/Child Health,
tributed Shs150m to dfcu Bank’s CEO Mathias Environmental conservation,
the Rotary Club of
Kampala towards
Katamba said in much as dfcu
Bank strives to reach the high-
Community development,
Emergency intervention and
Gomba residents

the construction of the 170-
bed Mukono hospital project.
The hospital will also provide
training facilities for the Ugan-
da Christian University stu-
dents based in Mukono town
and any other institutions of
CSR
UBL sinks Shs360m in new campaign
est level of service delivery
to its customers, it is always
moved by compassion to
respond to interventions in the
communities it operates.
He said the Bank’s main
areas of concern include
Financial Literacy training.
Lwanga K. Stephen, Rotary
Club of Kampala president
2016/2017 commended dfcu
for its continued contribution
towards the Rotary Club ini-
tiatives.
X
sabo Group, the pro-
ducer of a 20MW solar
power in Kabulasoke in
partnership with the Of-
fice of the Vice President, held a
two-day Mobile Medical Camp
in Gomba District starting March
21 as part of its Corporate Social
Responsibility.
The medical camp aimed at
putting extra emphasis on the
treatment of malaria, diabetes,

U
ganda Breweries
Limited is running
a campaign dubbed
‘cool teens don’t
drink’ for the next two years
targeting 100, 000 youth with
messages discouraging the
underage from alcohol drink-
ing.
The campaign will be
implemented in partnership
with Topowa Youth Mentor-
ing Uganda, a youth empow-
erment and support center
organisation.
Speaking during the launch
of the campaign on March 19
Ocitti (L) hands over a dummy cheque
to Sulaiman Katongole of TYMU.
at the company’s headquar-
ters in Luzira, the UBL Man-
aging Director Mark Ocitti
said discouraging underage
from drinking alcohol would
put them at the centre of
Uganda’s economy as key
players in the long term.
He said the new campaign
is in response to the various
surveys including the recent-
ly concluded by Uganda
Youth Development Link
(UYDEL).
UYDEL study shows
among 1,134 individuals
that were selected in Kam-
pala’s slum areas, 46% aged
between 12 and 17 were alco-
hol consumers.
pressure, ulcers as well as provide
various health services including
family planning and health care,
HIV testing and counselling, eye
care and dental services among
others to the communities.
Xsabo Group CEO David Alo-
bo said their interest is to boost
the living standards of the com-
munities in which they operate.
“We are part of this community
and thus have a role to play to
improve their lives,” he said.
Xsabo Group is also the spon-
sor of various youth income gen-
erating activities, art groups and
the Annual Football Tournament
in greater Masaka District.

28 March. 29 - April. 04 2019

 Business

Solar online portal goes live

By Patricia Akankwatsa biomass and kerosene for

P
rospective solar
energy consumers
in Uganda will
now be in position
to access vital information
easily following the
launch of an online portal.
Joyce Nkuyahaga, the
Chief Executive Officer at
the Uganda Solar Energy
Association (USEA) said
the platform will serve
as a knowledge hub for
USEA’s members and
Orient Bank MD Julius Kakeeto hands over a dummy cheque to
other key stakeholders
the President of the Rotary Club of Muyenga Breeze- Rosette Arinaitwe 
interested in the solar
Baroraho recently. The donation is a contribution towards the Club’s annual
sector.
surgical camp to be held next month for children with brain and spinal
She said the platform
ailments at CURE hospital in Mbale.    COURTESY PHOTO.
will help the Association
to reach many industry
actors such as investors
and financiers as the
population embrace solar
energy.
This development
comes at the time
electricity access in
Uganda standards at
merely 20%, according
to Uganda Bureau of
Statistics.
This implies that
majority of the country’s
population still relies on
Tonny Ssimbwa, the managing director for Power Trust Uganda Limited,
a solar firm, receives a grant from Sheila Desai, the Director for USAID
Economic Growth Office. The grant would support the company to
extend solar power to a refugee settlement.
cooking and lighting.
Sheila Desai, Director
for Economic Growth,
USAID Uganda, said
access to cleaner and
productive energy is
critical for addressing
poverty and economic
development.
She said access to
clean energy to rural
community could enable
the east African nation
achieve Goal Seven
of the United Nations
Sustainable Development
Goals on access to energy
for all by 2030.
“Solar energy has the
potential to meet the
energy needs of Ugandans
including women and
girls especially those in
rural areas,” she said.
With solar energy,
communities can store
medicine in rural health
centers and can improve
the quality of education
children receive.
So far, more than
500,000 units of solar have
been sold in Uganda over
the past years.

Weekly share price movement (March. 05)

Security March 05 Feb.15 Movement
BATU 30,000 30000 00
BOBU 134 134 00
CENT 1,190 1,242 4.2
QCL 292 200 46
DFCU 670 690 00
EABL 7,181 8,154 11.9
EBL 1,515 1,568 3.3
JHL 15,585 16,090 3.1
KA 224 328 31.7
KCB 1,541 1,607 4.1
NIC 14 14 00
NMG 2,221 2,526 12.0
NVL 336 336 00
SBU 29 28 3.5
Uganda Solar Energy Association (USEA) CEO, Joyce Nkuyahaga giving UCHM 22 27 18.5
her remarks during the launch of an online solar energy platform at UCL 17 18 5.5
Kampala Serena Hotel on March 21.   COURTESY PHOTO.
UMEME 292 300 2.6
ALSI -- -- --

March. 29 - April. 04 2019 29

 Drug-
resistant
TB
A new study
offers new hope
T
By Andrew Nunn & I.D. Rusen
uberculosis (TB) is the leading
cause of death in the world
from a single infectious disease,
causing more deaths than HIV/
AIDS. In 2017, 10 million people
developed TB disease globally
and an estimated 1.6 million died.
One of the biggest blocks to beating the
epidemic is the growing resistance to drugs
that have previously cured TB.
The World Health Organisation (WHO)
has declared drug-resistant TB a global
health crisis. Worldwide in 2017, an esti-
mated 558,000 people developed TB that
was resistant to the most effective first-line
drug – rifampicin (RR-TB). Of these, 82%
had multidrug-resistant TB.
But treating drug-resistant TB is still
hopelessly inefficient. The 20-month to
24-month regimen used in many countries
to treat people is costly and has signifi-
cant side effects. In addition, the length of
the regimen makes it hard for patients to
adhere to, as well as for health systems to
sustain. Globally, the regimen has an aver-
age treatment success rate of little more
than 50% in real-world treatment settings,
although there is considerable variation
from country to country.
As a result researchers around the world
have been urgently exploring shorter, more
effective, and safer treatments for patients
who have drug-resistant TB.
One of these efforts has begun to bear
fruit. Results from Stage 1 of a clinical trial
have recently been published. The news is
encouraging. The trial provides evidence
that a shorter treatment regimen – of nine to
11 months – is as effective for the treatment
of multidrug-resistant TB as the longer,
20-month treatment recommended by the
WHO in 2011.
The STREAM trial presents robust evi-
30 March. 29 - April. 04 2019
dence for the effectiveness and safety of the
nine to 11-month regimen when compared
to the much longer 20-month regimen. The
results are as good and the fact that the
regimen is shorter should make it much
more acceptable to patients. It is also likely
to result in cost saving to both patients and
health services.
The trial
The STREAM trial (Standardised Treat-
ment Regimen of Anti-TB Drugs for
Patients with MDR-TB) is the world’s first
multi-country randomised phase III clinical
trial to test the efficacy, safety and economic
impact of shortened MDR-TB treatment
regimens. The randomised nature of the
trial means that patients were assigned to
the long or short regimen in such a way as
so as to avoid bias. Treatment allocation is
determined by chance not by the choice of
a physician. Phase III trials are designed to
assess the effectiveness and safety of a new
intervention in practice.
Stage 1 of the trial was designed to assess
whether a nine to 11-month treatment regi-
men that demonstrated promising cure
rates during a pilot programme in Bangla-
desh, is as effective as the longer regimen
when assessed in other settings under
rigorous control trial conditions. Seven sites
in Vietnam, Mongolia, South Africa, and
Ethiopia participated.
The results from Stage 1 show that the
shorter regimen is as good as the 20-month
regimen. Nearly 80% of patients in the trial
showed a favourable outcome after two and
a half years of follow-up from entry into
the trial. The percentage was 79.8% in the
20-month regimen. In the nine to 11-month
regimen the percentage was 78.8%.
Results in participants with HIV,
although not as good as in those who were
HIV-negative, were very similar in the short
and long regimen.
The findings on side-effects were also
interesting. There were very similar rates
of severe side-effects during treatment
and follow-up between the two regimens.
But there were differences in the types of
side-effects. The most common side-effects
were cardiac conduction disorders, which
increase the risk of serious and potentially
fatal arrhythmias, in the nine to 11-month
regimen. In the 20-month regimen the most
common side effects were metabolic disor-
ders, particularly hypokalemia.
A health economics data analysis is ongo-
ing and will assess potential cost savings to
patients and health systems when the nine
to 11-month regimen is compared to the
20-month regimen.
Conclusions
The final results from the trial are encour-
aging because they show that the nine to
11-month treatment regimen is comparable
in efficacy and safety to the 20-month regi-
men. This supports the use of a shorter regi-
men for patients with rifampicin-resistant
TB. The nine to 11-month regimen presents
substantial advantages. It reduces treatment
times, may improve patient retention under
programmatic conditions, and reduces the
number of pills patients have to take.
However, the required ECG monitoring
is an important consideration.
In its latest guidelines issued last year the
WHO again highlighted the need to con-
tinue to look for regimens that are not only
shorter, but are also less toxic for the patient.
The STREAM Stage 1 results suggest that
some progress is being made.
STREAM Stage 2 is currently evaluat-
ing an all-oral regimen that is potentially
as effective as and more tolerable than the
injectable-containing regimens currently
used some countries. This, too, would be
another major step forward in the battle
against MDR-TB.

Preventing tragic suicides
Depressed people use language
differently. Here’s how to spot it
By Mohammed Al-Mosaiwi
F
rom the way you move and sleep,
to how you interact with people
around you, depression changes
just about everything. It is even no-
ticeable in the way you speak and express
yourself in writing. Sometimes this “lan-
guage of depression” can have a powerful
effect on others. Just consider the impact of
the poetry and song lyrics of some artistes
who killed themselves after suffering from
depression.
Scientists have long tried to pin down
the exact relationship between depression
and language, and technology is helping us
get closer to a full picture. Our new study,
published in Clinical Psychological Science,
has now unveiled a class of words that can
help accurately predict whether someone is
suffering from depression.
Traditionally, linguistic analyses in this
field have been carried out by researchers
reading and taking notes. Nowadays, com-
puterised text analysis methods allow the
processing of extremely large data banks
in minutes. This can help spot linguistic
features which humans may miss, calculat-
ing the percentage prevalence of words and
classes of words, lexical diversity, average
sentence length, grammatical patterns and
many other metrics.
So far, personal essays and diary entries
by depressed people have been useful, as
has the work of well-known artistes who
killed themselves. For the spoken word,
snippets of natural language of people with
depression have also provided insight. Tak-
en together, the findings from such research
reveal clear and consistent differences in
language between those with and without
symptoms of depression.
Content
Language can be separated into two
components: content and style. The content
relates to what we express – that is, the
meaning or subject matter of statements. It
will surprise no one to learn that those with
symptoms of depression use an excessive
amount of words conveying negative emo-
tions, specifically negative adjectives and
adverbs – such as “lonely”, “sad” or “mis-
erable”.More interesting is the use of pro-
nouns. Those with symptoms of depression
use significantly more first person singular
pronouns – such as “me”, “myself” and “I”
– and significantly fewer second and third
person pronouns – such as “they”, “them”
or “she”. This pattern of pronoun use sug-
gests people with depression are more
focused on themselves, and less connected
with others. Researchers have reported that
pronouns are actually more reliable in iden-
tifying depression than negative emotion
words. We know that rumination (dwelling
on personal problems) and social isolation
are common features of depression. How-
ever, we don’t know whether these findings
reflect differences in attention or thinking
style. Does depression cause people to focus
on themselves, or do people who focus on
themselves get symptoms of depression?
Style
The style of language relates to how we
express ourselves, rather than the content
we express. Our lab recently conducted a
big data text analysis of 64 different online
mental health forums, examining over 6,400
members. “Absolutist words” – which con-
vey absolute magnitudes or probabilities,
such as “always”, “nothing” or “complete-
ly” – were found to be better markers for
mental health forums than either pronouns
or negative emotion words.
From the outset, we predicted that those
with depression will have a more black
and white view of the world, and that this
would manifest in their style of language.
Compared to 19 different control forums
(for example, Mumsnet and StudentRoom),
the prevalence of absolutist words is
approximately 50% greater in anxiety and
depression forums, and approximately 80%
greater for suicidal ideation forums.
March. 29 - April. 04 2019
health
Pronouns produced a similar distribu-
tional pattern as absolutist words across
the forums, but the effect was smaller. By
contrast, negative emotion words were
paradoxically less prevalent in suicidal ide-
ation forums than in anxiety and depression
forums. Our research also included recov-
ery forums, where members who feel they
have recovered from a depressive episode
write positive and encouraging posts about
their recovery. Here we found that negative
emotion words were used at comparable
levels to control forums, while positive emo-
tion words were elevated by approximately
70%. Nevertheless, the prevalence of abso-
lutist words remained significantly greater
than that of controls, but slightly lower than
in anxiety and depression forums.
Crucially, those who have previously
had depressive symptoms are more likely
to have them again. Therefore, their greater
tendency for absolutist thinking, even when
there are currently no symptoms of depres-
sion, is a sign that it may play a role in caus-
ing depressive episodes. The same effect is
seen in use of pronouns, but not for nega-
tive emotion words.
Practical implications
Understanding the language of depres-
sion can help us understand the way those
with symptoms of depression think, but it
also has practical implications. Research-
ers are combining automated text analysis
with machine learning (computers that
can learn from experience without being
programmed) to classify a variety of mental
health conditions from natural language
text samples such as blog posts.
Such classification is already outper-
forming that made by trained therapists.
Importantly, machine learning classification
will only improve as more data is provided
and more sophisticated algorithms are
developed. This goes beyond looking at the
broad patterns of absolutism, negativity
and pronouns already discussed. Work has
begun on using computers to accurately
identify increasingly specific subcategories
of mental health problems – such as per-
fectionism, self-esteem problems and social
anxiety.
That said, it is of course possible to use a
language associated with depression with-
out actually being depressed. Ultimately, it
is how you feel over time that determines
whether you are suffering. But as the World
Health Organisation estimates that more
than 300 million people worldwide are now
living with depression, an increase of more
than 18% since 2005, having more tools
available to spot the condition is certainly
important to improve health and prevent
tragic suicides.
31
comment
By Dani Rodrik
A case for a bold economics
Will economists prove more helpful today, when the
challenges are as pressing as the Great Depression?
A
t the end of 1933, John Maynard
Keynes sent a remarkable public
letter to U.S. President Franklin
Delano Roosevelt. FDR had taken
office earlier that year, in the midst of an
economic slump that had pushed a quarter
of the labour force into unemployment. He
had launched his ambitious New Deal poli-
cies, including public works programs, farm
subsidies, financial regulation, and labour
reforms. He had also taken the U.S. off the
gold standard to give domestic monetary
policy freer rein.
Keynes approved of the general direction
of these policies, but also had some sharp
criticism. He worried that FDR complicated
the economic recovery effort by broadening
his policy agenda unnecessarily. FDR
was doing too little to increase aggregate
demand and too much to change the rules
of the economy. Keynes took particular
aim at the National Industrial Recovery
Act, which, among other things, greatly
expanded labour rights and fostered inde-
pendent unions. He fretted that the NIRA
would sap business confidence and weigh
on the federal bureaucracy, without making
a direct contribution to recovery. He won-
dered whether some of the advice FDR was
getting “is not crack-brained and queer.”
Keynes did not think much of FDR’s eco-
nomics, but at least he was a sympathetic
critic. Because much of the New Deal ran
against the prevailing economic orthodoxy,
FDR’s policies had little support from
leading economists of the day. For example,
as Sebastián Edwards explains in his fasci-
nating recent book `American Default’, the
predominant view among economists was
that breaking the dollar’s link with gold
would create havoc and uncertainty. The
only bona fide economist in FDR’s “brain
trust” was Rexford Tugwell, a little-known
41-year old Columbia professor who did
not even teach graduate students.
Will economists prove more helpful today,
at a time when the challenges we face are
nearly as pressing as those during the Great
Depression? Unemployment may not be a
severe problem in most advanced countries
currently, but large segments of the labour
force seem cut off from economic progress.
Record levels of inequality and poor earn-
ings prospects for younger, less educated
workers are eroding the foundations of
32 March. 29 - April. 04 2019
liberal democracies. The rules that underpin
globalisation are badly in need of reform.
And climate change continues to pose an
existential threat.
These problems demand bold responses.
Yet, for the most part, mainstream econo-
mists seem preoccupied with marginal
fixes – a tax-code tweak here, a carbon tax
there, perhaps a sprinkling of wage subsi-
dies – that leave untouched the structures
of power underwriting the rules of the eco-
nomic game.
Economists can rise to the challenge by
adopting a broader vision. Last month, I
joined a group of prominent economists
to launch an initiative that we have called
“Economics for Inclusive Prosperity” (EfIP).
From labour markets and finance to innova-
tion policies and electoral rules, the goal is
to advance ambitious policy ideas that pay
much closer attention to inequality and
exclusion – and to the power imbalances
that produce them.
As Suresh Naidu, Gabriel Zucman, and I
explain in our “manifesto,” neither sound
economics nor convincing evidence sup-
port many of the dominant policy ideas of
the last few decades. What has come to be
called “neoliberalism” is in many ways a
derogation of mainstream economics. And
contemporary economic research, appro-
priately deployed, is in fact fully conducive
to new ideas for creating a fairer society.
Economics can be an ally of inclusive
prosperity. But it is up to us economists to
convince our audience of the merits of these
claims.
Our network is made up of academic
economists who believe new ideas can
be developed without abandoning scien-
tific rigour. The catchphrase of our day is
“evidence-based policy.” Accordingly, our
policy briefs are based on empirical anal-
ysis, using tools of mainstream economics.
But, for us, an “evidence-based” approach
is not one that reinforces a conservative
bias in favour of policies at the margins of
existing institutional arrangements; it is one
that encourages experimentation. After all,
how can we develop new evidence without
trying something new?
Markets rely on a wide range of institu-
tions to create, regulate, and stabilise them.
These institutions do not come with pre-
determined forms. Property and contracts
– the most elementary institutions required
to make markets work – are legal constructs
that can be designed in any number of
ways. As we grapple with new realities
created by technological innovation and
climate change, questions about the alloca-
tion of property rights among different
claimants become crucial. Economics does
not provide definite answers here, but it
supplies the tools needed to identify the
relevant tradeoffs.
A common theme running through our
initial set of policy proposals is the power
asymmetries that shape the functioning of
the contemporary global economy. Many
economists dismiss the role of such asym-
metries because there is little scope for
power under conditions of perfect competi-
tion and perfect information. But in the real
world that we examine, power asymmetries
abound.
Who has the upper hand in bargaining
for wages and employment benefits? Who
dominates markets and who must submit
to market forces? Who can move across
borders and who is stuck at home? Who can
evade taxation and who cannot? Who gets
to set the agenda of trade negotiations and
who is excluded? Who can vote and who is
effectively disenfranchised? We argue that
addressing such asymmetries makes sense
not only from a distributional standpoint,
but also for improving overall economic
performance. Economists have a powerful
theoretical apparatus that allows them to
think about such matters.
Although economists are well positioned
to develop institutional arrangements that
go beyond what already exists, their habit
of thinking at the margin and sticking close
to the evidence at hand encourages an aver-
sion to radical change. But, when presented
with new challenges, economists must envi-
sion new solutions. Imagination is crucial.
Not everything we try will succeed; but if
we do not rediscover the value of FDR’s
credo – “bold, persistent experimentation” –
we will certainly fail.
Dani Rodrik, Professor of International
Political Economy at Harvard University’s
John F. Kennedy School of Government, is
the author of Straight Talk on Trade: Ideas
for a Sane World Economy.
Copyright: Project Syndicate, 2019.

By Bhavtik Vallabhjee
Closing Africa’s energy gap
Developing economies across Africa are in a unique
position to invest in cleaner sources of power at a lower cost
A
frica is a continent blessed
with an abundance of natural
resources – water, wind,
thermal coal, natural gas, and
of course plenty of sunshine – but the
electrification rate across the continent
remains extremely poor.
Of the 1.2 billion people who live in
Africa, it’s estimated that more than
650 million have no access to energy,
relying instead on fossil fuels like
diesel for electricity generation and
harmful cooking fuels like wood,
charcoal, and kerosene.
This sets Africa back on meeting
energy access goals and diminishes
the continent’s economic growth by
two to four percent every year. We
have much to learn from developing
countries across Asia that are making
significant progress, with many on
track to reach universal energy access
by 2030.
India, with a 1.34 billion population,
will reach universal access by the early
2020s. We believe Africa presents a
compelling energy investment case
for our long-standing Indian trade
partners, for many reasons.
Developing economies across Africa
are in a unique position to leapfrog
more developed nations by investing
in cleaner, environmentally friendlier
sources of power at a lower cost - key
factors contributing to improved use
of renewable energy power across the
continent. Countries like Morocco,
Tanzania, Mozambique, Kenya,
Mauritius, South Africa, Uganda and
Ghana have taken initiatives in the
development of renewable and clean
energy projects, particularly solar and
gas to power.
With the current low cost of gas
compared to several years ago
(through the shale gas revolution
in the USA), gas power plants have
increasingly become more competitive
compared to clean coal technologies
and are an affordable solution.
Although renewable energy resources
hold great promise and can provide
There’ve
been massive
investments
in the field
of battery
storage
research and
development
by leading
global
companies
like Samsung,
Tesla, and
Total over the
past five years
energy while overcoming Africa’s
infrastructural challenges, this form of
energy would still need to be stored.
That is why lithium ion batteries could
be a game changer for Africa.
There’ve been massive investments
in the field of battery storage research
and development by leading global
companies like Samsung, Tesla, and
Total over the past five years. As the
costs of Li-Fe battery storage falls,
coupled with already low cost of solar
photovoltaic modules, the future of
the electricity market could be solar
photovoltaic plants.
South Africa alone holds almost
80% of the world’s known reserves of
manganese (producing 5.3 million MT
per annum) – an important component
March. 29 - April. 04 2019
comment
of the Li-Fe battery. A growing market
will justify the creation of a local
battery production plant, but serious
investment is first needed for a large-
scale facility.
Mozambique has the 9th largest gas
reserves in the world while Tanzania
shares the same gas-rich
Rovuma Basin. One of the region’s
largest project financing transactions
(Coral LNG) closed recently in
Mozambique with a deal value in
excess of USD30 billion, with two
more similar deals imminent.
Many other countries in Africa like
Nigeria, Ghana, Angola, and South
Sudan have impressive oil and gas
reserves. The spin-off effects from
this will be huge for local economies
with the possibilities of cracker plants,
fertiliser and petrochemical plants,
pipelines, gas-to-power plants, and
LNG export terminals posing sizeable
opportunities for Indian corporates.
The political and economic climate
across Africa has steadily improved
over the last two decades, and
despite the frustratingly long lead
times for infrastructure projects, on
a risk-return adjusted basis, Africa
boasts better returns than developed
markets. With the right investment in
the right infrastructure, and with the
right partners, Africa is well poised
for solid socio-economic growth and
sustainable development.
Bhavtik Vallabhjee, is the Head: Power,
Utilities and Infrastructure at Absa
Corporate and Investment Banking.
33
comment
By Alexandra Borchardt
Journalism’s risky tech attraction
Why news organization strategists must not allow
themselves to be swept up by every new tech trend
T
echnology was supposed to solve
some of the world’s biggest prob-
lems. Connect everyone to the
Internet, it was once assumed, and
democracy would follow. Collect enough
data, and all of our questions would be
answered. Put everything online, and algo-
rithms would do the rest. The world would
practically run itself.
Instead, we now know that digital tech-
nology can be used to undermine democ-
racy; that it raises more questions than it
answers; and that a world that runs itself
seems more like an Orwellian nightmare
scenario than a noble goal. But while tech-
nology isn’t the solution, it isn’t really the
problem either; our single-minded focus on
it is.
Consider the experience of the media
industry, where the digital revolution has
wreaked havoc on prevailing business
models over the last decade. Publishers
and editors responded by putting all their
faith in technology: tracking all manner of
metrics, embracing data journalism, hiring
video teams, and opening podcast studios.
More recently, media organisations have
shifted their attention toward artificial-
intelligence solutions that track audience
preferences, automatically produce desired
content and translations, alert journalists
to breaking news, and much more. In the
Reuters Institute for the Study of Journal-
ism’s latest annual report on media trends,
78% of respondents in a non-representative
survey of international media leaders said
that they planned to invest more in AI this
year.
But the final frontier in the quest to save
journalism, many believe, is the blockchain
– the distributed ledger technology that
underpins cryptocurrencies like Bitcoin.
That remains to be seen: the first attempt to
leverage the blockchain to free journalists
from ad-driven business models, by Civil
Media Company, had a bumpy start.
There is nothing wrong with using tech-
nology to solve problems, including those
created by technology, or to give a company
a competitive edge. That is what The Wash-
ington Post, for example, has been doing in
the six years since Amazon CEO Jeff Bezos
purchased it (at a time when it was hemor-
rhaging money and shedding jobs).
But not even the most advanced tech will
save the media industry, or anybody else,
if there is no regard for the people using
34 March. 29 - April. 04 2019
it. And that does not mean just audiences.
After years of chasing the latest tech trends,
the media industry is increasingly con-
fronting burnout among existing manage-
ment and staff, and a shrinking pool of new
talent.
According to the Reuters Institute report,
some 60% of media leaders are concerned
about burnout on their teams, and 75% now
worry about retaining and attracting staff.
Another report, Lucy Kueng’s Going Dig-
ital. A Roadmap for Organizational Trans-
formation, shows that middle managers, in
particular, have been exiting the industry.
This should not be surprising. Journalists
have always faced pressure in managing
the churn of time-sensitive, demanding, and
constantly changing news situations. But,
in the past, they could at least count on the
news organisations that employed them
to offer stability and consistency. Now,
they must also navigate relentless, tech-
driven organisational change – often poorly
explained and hastily introduced. The level
of uncertainty can drive away even the most
loyal staff.
To be sure, change is unavoidable; the
digital age demands constant adaptation.
But making needed adjustments without
destroying morale requires implementing
a people-oriented approach. This is not a
straightforward process. For tech solutions,
managers can attend shiny digital confer-
ences, take some sales team’s advice, sign a
contract, and dump the new tools on their
newsrooms. With people, they have to
listen carefully, acquire an in-depth under-
standing of the problem, and then devise
their own strategy.
A good place to start is leadership. In
any industry, the key responsibilities of an
organisation’s leaders include making their
employees feel secure and appreciated.
That means paying attention to employees’
needs and fostering an organisational
culture that provides them with a sense of
belonging and purpose.
A similar approach must be applied to
audiences. Not even the most accurate
metrics can provide the needed guidance,
if nobody understands what they actu-
ally mean, why they were chosen, or what
their psychological impact would be (on
audiences or staff). While data can deliver
useful insights about audience preferences,
listening to people can lead to very different
impressions and conclusions.
For example, the data might show that
more content means more page views; but
if audiences long for fewer distractions
and higher-quality reporting, flooding the
market with robot-produced content will
not satisfy them. Likewise, users might click
on a larger share of articles if algorithms are
used to personalise their experience; but if
users become bored by the same topics and
perspectives, personalisation will not help.
Tech-based solutions are a means, not an
end. That is why The New York Times, for
example, is leveraging its digital success
to invest more in journalism. Last year, the
company added 120 newsroom employees,
bringing the total number of journalists
there to an historic high of 1,600.
For organisations without the clout – and
digital revenue – of the Times, a people-
oriented approach may also be needed
to secure investment. With the limits of
the ad-driven business model becoming
increasingly apparent, many media leaders
– close to one-third, according to the Reuters
Institute survey – believe that in the future
foundations and non-profits will play a cen-
tral role in supporting the media.
But persuading foundations and phi-
lanthropists to open their hearts and wal-
lets will require human connection and
engagement, not algorithms or AI-enabled
software. Potential funders need to be con-
vinced that journalism is as noble a cause as,
say, cancer research.
Technology alone cannot encourage
democracy, help answer important ques-
tions, and facilitate effective leadership
by boosting accountability. But, to some
extent, high-quality, responsible jour-
nalism can. If it is to fulfill that purpose,
however, news organisations must not
allow themselves to be swept up by every
new tech trend. If they treat technology
as more than a tool for implementing
people-centered strategies, the people
they need – both staff and audiences –
will continue to vote with their feet.
Alexandra Borchardt is Director of Leadership
Programs at the Reuters Institute for the Study
of Journalism.
Copyright: Project Syndicate, 2019.
www.project-syndicate.org
 ART | BOOKS | SOCIETY | TRAVEL | CULTURE
What is African art?
University don confronts subject of African identity,
neo-colonialism and decolonisation
T
By Dominic Muwanguzi
he question
of African
identity in
art has been
very topi-
cal recently.
Africa does not produce
art and all the art created
by African artists - in the
Diaspora and on the con-
tinent - is inspired by the
West. Oh, really?
Dr. Kizito Maria
Kasule, a university
lecturer, does not think
so and emphatically
attempts to dismiss the
stereotypical claim in an
exhibition titled `Reflec-
tions’. His focus is to
demonstrate that Africa
has its own art and is as
creative and innovative as
other places.
He, for example, uses a painting of four
female figures posing in the nude titled
`Garden of Eden 2019’. It undoubtedly par-
odies Picasso’s famous painting `Les Des-
moiselles d’Avignon’ (The young Ladies of
Avignon). The irony here is that in painting
such `Les Desmoiselles d’Avignon’, Picasso
was inspired by African artistic practices
and symbols; including the African mask.
However, while Picasso’s art is continu-
ously taught to art students in the class of
Art history, the African masters that existed
at the time and inspired him are ignored.
The contradictory ideas around art teach-
ing; especially in these contemporary times,
bother Kizito. He is troubled by the continu-
ous praise of western art education and
negation of African indigenous art.
design at Nagenda Inter-
national Academy of Art
and Design.
His works are perfect
platforms to reflect on the
subject of African identity
in the midst of a huge
wave of neo-colonialism.
Art education, he says,
required urgent decolo-
nization of art training
in schools to encourage
learners embrace what is
indigenous before they
become part of a wider
global identity.
He believes this will
salvage Africa’s artistic
identity, notwithstanding
cultural conversation and
preservation that appear
to be his inspiration.
`Reflections’ is about
Kizito’s view of African
identity, his personal
In his work, the artist avoids the narra- experiences of it and what
tive of colonialism as a detractor to Africa’s he sees in his social surrounding.
success, but rather provides fertile grounds Where’s the African position in this and
for varied dialogue on what should be done what has he done about it? To answer the
by the continent to overcome western influ- question, the artist revisits topics of colonial-
ences in the social, political and economic ism, post colonialism and decolonisation
spheres. His technique of invoking African figuratively invoking what is indigenous
traditional artistic practices like sculptural in his paintings. The paintings on display
forms and gestural expressionism- strong invoke African geometrical patterns. The
use of the colour palette- immediately con- subjects in the paintings are voluminous to
jure up the argument that what we think symbolise views beauty and vitality of the
is western actually started here on the con- African body and the palette is earthly to
tinent. suggest the concept of the origin of man
“My African identity and being a post- on the black continent; more so nature’s
colonial era artist has been influenced by vibrancy.
my formal art education,” he says. Reflections exhibition is showing now
Kizito has been at the forefront of initiat- at Makerere Art Gallery located within
ing projects to decolonise art education in Margaret Trowel School of Industrial and
Uganda under Zurich’s Institute of Art and Fine Art campus
March. 29 - April. 04 2019 35
 Messi could be cloned, genetic scientist says
Genetic scientists believe they again. According Arcadi Navarro,
could clone Lionel Messi in the genetic specialist and Head of
future by using current scientific the European Genome-phenome
practices. Messi has spent his Archive, producing a double of
entire senior career at Barcelona Messi is a possibility. “It would be
to date, and has risen to global very similar in appearance to Mes-
stardom after bagging 591 goals si, it would look like his twin,”
in 674 appearances. But will the Navarro told journalists. “This
footballing world will ever see individual would have the same
another player of Messi’s quality potential as Messi, but genetics
Human zoo – football fans forced to watch match from metal cage
A football match between
two teams from Poland’s third
division received a lot of inter-
national attention recently, not
for the quality of the football
displayed by the players, but
for the shocking photos of a
group of around 100 support-
ers crammed in a large metal
cage that some media outlets
described as a human zoo. The
supporters of Hutnik Krakow
accompanied their team for
an away game against Spar-
takus Daleszyce, in the Polish
third football division, and
found themselves locked in a
Overweight policemen sent to Fat Camp
Police stations all around
Thailand are sending their
chubbiest officers to a weight-
loss camp as part of a nation-
wide program aptly called
“Belly Destruction”. It follows
success of a two-week pilot
Montenegro’s
tree of water
The small village of Dinoša,
in Montenegro, is home to an
old mulberry tree that turns
into a water fountain every
time it rains heavily. As we all
know, water doesn’t normally
gush out of living trees, so this
phenomenon begs a reasonable
explanation. It is that where the
tree grows has many under-
ground springs which flood
during heavy rainfalls, and the
tree has a hollow trunk. So add a
little pressure underground and
water gushes out of the tree.
36 March. 29 - April. 04 2019
is only one component. Others
are educational, environmental.
“Messi isn’t just Messi because of
his genetics, but because of every-
thing he has lived through, his
education, his time at La Masia,
the treatment he received.
“Genetics only gives us
potential, it’s up to us to complete
the job.”
large metal cage for the entire
90-minute game. According
to Polish rules, supporters of
the away team must be kept
separated from fans of the
program, At the Central Police
Training Center in the city of
Pak Chong, the fatties take
part in intense physical activity
designed to adjust the size of
their bellies. They also adopt a
healthy, protein-rich diet.
team hosting the game, but
Spartakus Daleszyce, is one of
several Polish teams that have
opted to keep away fans in
metal cages.
Makeup artist
transform herself into
whoever she wants
He Yuhong, a 27-year-old
beauty blogger from China,
has become an online sensation
thanks to her amazing ability to
transform herself into a doppel-
ganger of celebrities and iconic
characters, using makeup.
Yuhong, who posts photos
and videos of her work on vari-
ous social networks under the
pseudonym Yuyamika, shot
to fame last year, when she
used her makeup skills to turn
herself into a real-life version
of Leonardo Da Vinci’s Mona
Lisa. Since then, Yuhong has
been entertaining her growing
fan base by turning herself into
doppelgangers of celebrities like
Johnny Depp and Taylor Swift,
as well as Albert Einstein or the
Girl with a Pearl Earring.
How to calculate fuel
consumption the right way
By Agencies
O
ne of the most important aspects
of planning a trip into remote
locations is to calculate your ex-
pected fuel usage, your vehicle’s
range and how much extra fuel you’ll need
to carry. Here’s how…
Calculating a vehicle’s fuel consump-
tion is not difficult. Simply note down the
distance travelled since the last top-up and
then take a note of how much fuel it con-
sumed to travel that distance, then divide
the litres used by the kilometres travelled
and multiply by 100 to calculate consump-
tion in litres/100km.
For example, if your vehicle consumed
60-litres of fuel to cover 450km, divide 60 by
450 and then multiply by 100 and the result
is a rounded fuel consumption figure of
13.3L/100km.
Armed with a fuel consumption figure,
you’ll now be able to calculate the touring
range of your vehicle by dividing the vehi-
cle’s fuel tank capacity by the fuel consump-
tion and, again, multiplying by 100.
For example, if your vehicle has an
80-litre fuel tank and it uses 13.3L/100km (as
in the example above), divide 80 by 13.3 and
multiply by 100 and the result is a rounded
range of 601.5km. With the potential for
varying fuel consumption in normal on-
road driving conditions, you’ll want to sub-
tract about 50km from this result to come
up with a ‘safe’ touring range, which in this
case would therefore be 551.5km.
Once you know your vehicle’s touring
range, you’ll be able to plan your trip by
seeing if you can safely cover the distance
between available fuel stops along the
intended route, or whether you’ll need to
carry additional fuel.
What are some of the variables?
Ascertaining your vehicle’s true aver-
age fuel consumption is best done over a
period of time – the longer the better. This is
important as there are many factors that can
affect fuel consumption, including vehicle
condition, tyre pressures, load, driving style,
fitment of roof racks, and the terrain.
Mechanical factors that can affect fuel
consumption can be as simple as incorrectly
inflated tyres or a clogged air filter through
to something more complicated that might
require a mechanic’s attention, such as
blocked injectors or some other mechanical
March. 29 - April. 04 2019
fault.
Driving style can also impact fuel con-
sumption; if you accelerate and brake hard
you’ll use more fuel than if you try to main-
tain a relatively constant speed by looking
ahead, predicting traffic flow and slowing
gradually and accelerating smoothly as
required.
A heavily laden vehicle will require more
energy to accelerate than an unladen one
and will, therefore, use more fuel. And a
vehicle with bulky goods loaded high on
a roof rack will not be as aerodynamically
efficient.
The terrain you drive in will also have a
huge impact on fuel economy. Low-range
driving in soft sand will use a lot more
fuel than cruising down the highway at
100km/h.
Weather conditions can also have unex-
pected consequences when it comes to fuel
usage. On the road, driving into a headwind
can result in increased fuel consumption,
but on the flipside a tailwind can aid fuel
economy. For these reasons, you should
always carry more fuel than you’ll need – in
other words, build a safety margin onto
your calculations.
37
David Masanso of talking cartoons
`I don’t admire anyone because our journeys are different’
By Agnes E Nantaba was becoming a florist; taking on from his sity to pursue a degree in computer ani-

D
avid Masanso is an animator
who has mastered the art and
science of making computers and
cartoons work together. He runs
Crossroads Digital Multimedia, a local
animation production studio in Kampala,
Uganda.
Masanso rose to fame after this short ani-
mation film, ‘Imitate’ won an award at the
2009 edition of the Amakula Kampala Inter-
national Film Festival. It was also the first
Ugandan and African computer animated
film to screen at Swansea Metropolitan Uni-
versity in the UK, where Masanso attained
a degree in Computer Animation.
`Imitate’ is a four minute film based on
a story of a hawker of hats who takes a
nap under a mango tree after a long walk.
He places his merchandise close to him
and not long before, two monkeys steal
the hats leaving him with one on his head.
Upon waking up, he sees the monkeys
playing with the hats and in trying to get
his merchandise back; he tosses his hand to
the ground and sure enough the apes copy
him. And that is how he gets his merchan-
dise back.
Masanso has done several other short
animation films like Maiden of Ja-luo and
Mzee Ddiba. He is also the brain behind the
ICEA TV infomercial featuring the popular
Tommy Tombo and Know your world
animated TV series. Although anima-
tions seem a new and scarcely appreciated
phenomenon in Uganda and East Africa,
Masanso is still determined to make it work
in Uganda. He was the first black student
at the University of Swansea in the UK to
study computer animations.
“Most people were doing just graphics
designing and others feared that I couldn’t
make money from animations in the Afri-
can market,” says Masanso.
“I believe that the next big thing for Afri-
ca is animations because we have so many
stories to tell to the world and how we tell
them matters”.
In animation, the pictures are made to
appear as though they are moving images.
And Masanso goes an extra mile to give the
cartoons an African touch.
Masanso is well aware that for digital
multimedia to grow, there has to be a seri-
ous investment in skills, training as well
as exposure of Ugandans to the global
village.
His zeal to pursue a career in computer
animations dates as far as his early years in
secondary education. His initial career path
father. But they were cut short by the excite-
ment from talking cartoons after an uncle
brought a DVD player from the UK and
two toy stories.
Masanso says, “I was wooed by how car-
toons can talk as human beings”. He imme-
diately saw that incorporating an African
setting could actually work better.
Masanso’s parents were liberal and
allowed him to pursue his interest in car-
toons and animations at Amersham and
Welkom College in Buckinghamshire. He
says the initial stage was tough.
He says, “I was coming from a back-
ground where computers were scarcely
heard of”. His interest was reinforced by
visits to animation studios to have a feeling
of the reality. Two years later, he applied
to pursue a degree in computer anima-
tions but was instead given multimedia.
He pursued the degree in multimedia but
kept applying for his dream course. For two
times, he failed to secure a placement until
he thought of an alternative.
“I attached a letter of interest to my
application stressing my failed attempts
and continued pursuit of my dream”,
says Masanso.
“I also emphasized the fact that if
given the opportunity, I would return
to Africa and build the same industries as
those built by Disney in America”.
The university was impressed by
his desire to share animation skills
back home. He joined
Swansea
Univer-
mations. To sharpen his skillset, Masanso
worked in several animation studios for six
years before returning home.
“I returned to fulfil my dream of moving
Africa to the next level through anima-
tions,” he says. He started Crossroads
Digital Multimedia in 2012. But his break-
through was showcasing at the Amakula
Kampala International Film Festival.
Masanso is the first of the five children
of Daniel Luyinda Mukasa and Margret
Nakimuli (RIP). He went to Nkoyoyo
Boarding Primary school and Bombo SS
before joining Amersham and Welkom Col-
lege in Buckinghamshire.
He says developing animations in Ugan-
da has largely been individual effort in sell-
ing the idea and its opportunities.
“Government only came on board after
realising that I was winning international
awards,” says Masanso.
He says there are still
no polices to guide
work of animations
and animators are
rarely considered
for government con-
tracts. But Masanso
is happy that his ani-
mated cartoons made
the government to
realise that policies
are needed.

38 March. 29 - April. 04 2019

 Q&A

David Masanso’s Liteside

Any three things that because our journeys are Everyone needs to as part of life. It’s from
we don’t know about different. keep in their spaces such that we learn to do

I
you? and not to bring others better.
am a workaholic What is your greatest down.
person; I just want extravagance? What is your favourite
to work and achieve. Internet connection is What is the quality you occupation?
I want to wake up my life; it’s where I get most like in a man? I can’t imagine myself
one day knowing that inspiration to kick-start Keeping in his space. doing anything outside
I have a legacy in the my projects. animations.
animations industry in What or who is the
Africa. I don’t work for What is the greatest greatest love of your What do you most value
only money but pride thing you have ever life? in your friends?
in the opportunity to done? I love the people I Working together
train other people and Training young work with in creating to achieve our dreams
see them thrive. I love to people in animation; we animations. even when destination
see a positive change in are growing together and background may be
people’s lives guided by and the changing trends When and where were different.
my animations. in technology, content you happiest?
and the dynamics point 2003 when I received Who are your favorite
What is your idea of to animations as Africa’s the letter of acceptance writers?
perfect happiness? next big industry. for admission into Robin Sharma in his
Every time when we Swansea University book ‘Who will cry
work on a project as a What do you consider to pursue a degree in when you die’; I have
team and it turns out the most overrated computer animations. taken many lessons from
successful. Happiness is virtue? his book communicating
that inner joy achieved Success is overrated; Which talent would you about the realities of life.
from satisfaction and working towards most like to have?
success. achieving success is a I used to like riding Which historical figure
team effort but at the bicycles but the work do you most identify
What is your greatest end, few people are pressures can’t allow with?
fear? credited. There are that anymore. I would love to
My fear lies in what people who are equally identify with the many
I would do without the working hard but lack If you could change one unseen heroes who
creative industry. such inspiration in thing about yourself, work tooth and nail to
their areas. We should what would it be? change the world. Many
What is the trait thus have the stories of I am so much times, we focus on few
you most deplore in back benchers shared immersed in doing individuals yet their
yourself? to inspire more young animations but believe rise was a result of team
Sometimes I work so people. that there is a lot more work. Most stories about
hard without leaving than I can do. I haven’t such people are untold.
‘me time’. What does being only explored my other
powerful mean to you? strengths but would What is your greatest
What is the trait you The ability to love to. regret?
most deplore in others? overcome fear for the I wish my parents
We only need to unseen. Where would you most were still living to
appreciate others; like to live? witness me walk and
I don’t mind about What do you most Uganda is my home. live my dream of
traits in other people dislike about your positively changing
because we are human appearance? What is your most Africa through
beings and therefore Not any. treasured possession? animations. They
bound to change. We My career journey in believed in my dream.
are not programmed Which living person do animations.
like machines or other you most despise? How would you like to
artificial things to work I don’t despise anyone What do you regard die?
in a certain way. but hate those who fake as the lowest depth of It doesn’t matter.
life. misery?
Which living person do As long as one is a What is your motto?
you most admire? What is the quality you human being, expect Rise as a team or fall
I don’t admire anyone most like in a woman? low and high moments as individuals.

March. 29 - April. 04 2019 39

Global comment
By Angus Deaton
Wrongs of contemporary capitalism
It has become unfair, unpopular because, as median
incomes stagnate, more wealth goes to the rich
R
ather suddenly, capitalism is vis-
ibly sick. The virus of socialism
has reemerged and is infecting the
young once more. Wiser heads,
who respect capitalism’s past achievements,
want to save it, and have been proposing
diagnoses and remedies. But their proposals
sometimes overlap with those who would
tear the system down, making nonsense of
traditional left-right distinctions.
Fortunately, Raghuram G. Rajan, a former
governor of the Reserve Bank of India who
teaches at the University of Chicago Booth
School of Business, brings his unparalleled
knowledge and experience to bear on the
problem. In his new book, The Third Pillar:
How Markets and the State Leave Com-
munity Behind, he argues that the cancer
afflicting contemporary capitalism is the
failure neither of “Leviathan” (the state)
nor of “Behemoth” (the market), but of
community, which no longer serves as a
check against either monster. Rajan thus
prescribes an “inclusive localism” to rebuild
communities that can furnish people with
self-respect, status, and meaning.
Rajan’s book, like Oxford University
economist Paul Collier’s The Future of Capi-
talism, is part of a rapidly growing genre of
critiques by capitalism’s friends. Rajan is a
proponent of capitalism who has accepted
that it no longer works in the interest of
the social good, and must be brought back
under control.
The Third Pillar offers deep historical con-
text to explain the current moment, but it is
most successful when it retraces develop-
ments after World War II to explain why
everything started unraveling around 1970.
Until then, the world had been busy recov-
ering and rebuilding, and economic growth
had received an added boost from the
adoption of frontier technologies through
replacement investment.
But trend growth has decelerated since
1970, accounting for many of our current
difficulties. Through it all, governments
have had no idea how to address the slow-
down, other than to promise a restoration
of the lost postwar paradise. In most cases,
that has meant additional borrowing. And
in Europe, elites have pursued continental
unification with the great aim of stopping
recurrent episodes of carnage. Yet in their
rush to secure the obvious benefits of inte-
gration, they forgot to bring their citizens
along. They have since learned that after
hubris comes nemesis.
40 March. 29 - April. 04 2019
The success of social democracy in the
postwar era weakened the market’s power
to act as a moderating influence on the state.
According to Rajan, these weakened actors,
in both Europe and America, were in no
position to deal with the revolution in infor-
mation and communication technology
(ICT) that they were about to face, leaving
ordinary people to face the threats on their
own. Rather than helping their workers
manage the disruption, corporations made
it worse by using their employees’ vulner-
ability to enrich their shareholders and
managers.
And how they enriched themselves! With
median household incomes largely stagnant
and a growing share of wealth accruing
to the rich, capitalism became manifestly
unfair, losing its popular support. To
manage its opponents, Behemoth called on
Leviathan for protection, not understanding
that a right-wing populist Leviathan eats
Behemoth in the end.
Two points of Rajan’s story need to be
emphasised. First, declining growth is a
key, albeit low-frequency, cause of today’s
social and economic distress. Second, the
unfortunate consequences of the ICT revo-
lution are not inherent properties of techno-
logical change. Rather, as Rajan notes, they
reflect a “failure of the state and markets
to modulate markets.” Though Rajan does
not emphasise it, this second point gives us
cause for hope. It means that ICT need not
doom us to a jobless future; enlightened
policymaking still has a role to play.
Rajan’s account of corporate misbehavior
is very well told, and it is all the more effec-
tive coming from a professor at a prominent
business school. From the start, the near-
absolutist doctrine of shareholder primacy
has served to protect managers at the
expense of employees, and its malign effects
have been exacerbated by the practice of
paying managers in stock.
In The Future of Capitalism, Collier gives
a parallel account from Britain, telling the
story of the most admired British company
of his (and my) childhood, Imperial Chem-
ical Industries. Growing up, we all hoped
someday to work at ICI, whose mission was
“to be the finest chemical company in the
world.” But in the 1990s, ICI amended its
primary objective by embracing shareholder
value. And in Collier’s telling, that single
change destroyed the company.
What of community? The United States
once led the world in public education, pro-
viding local schools where children of all
talents and economic backgrounds learned
together. And when elementary education
became insufficient, communities started
providing access to secondary school for all.
Today, however, when a college degree is
a prerequisite for success, the more talented
kids pursue theirs far outside of the com-
munity, ultimately self-segregating in fast-
growing cities from which the less talented
are excluded by the high cost of living.
Ensconced in their glittering cloisters, those
who succeed form a meritocracy in which
their kids – and almost exclusively their
kids – do well.
Collier tells the same story for Britain,
where talent and the share of national
income have become increasingly concen-
trated in London, leaving gutted and angry
communities behind. Yet as Janan Ganesh
of the Financial Times points out, these
metropolitan elites now find themselves
“shackled to a corpse.”
For his part, Rajan sees the meritocracy
as a product of the ICT revolution. But I
suspect it is older than that. After all, the
British sociologist Michael Young published
his prescient dystopia, The Rise of the Meri-
tocracy, in 1958. Indeed, Collier and I are
among the first British meritocrats. And just
as Young predicted, our cohort broke the
system for subsequent generations, while
continuing to extol its virtues. In Scotland,
where I grew up, the local community
talent, the intellectuals, writers, historians,
and artists have all gone in search of wider
pastures, or simply given up competing
with mass-market superstars. We are the
poorer for it.
Like Rajan, I think that community is a
casualty of an elite minority’s capture of
both markets and the state. But unlike him,
I am skeptical that stronger local communi-
ties or a policy of localism (inclusive or not)
can cure what ails us. The genie of meritoc-
racy cannot be put back in the bottle.
Angus Deaton, the 2015 Nobel laureate in
economics, is Professor of Economics and
International Affairs Emeritus at Princeton
University’s Woodrow Wilson School of Public
and International Affairs. He is the author of
`The Great Escape: Health, Wealth, and the
Origins of Inequality’.
Copyright: Project Syndicate, 2019.
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