July 2020 – Prime Time Communications

News

#OutToLunch Time to turn our domestic waste into power plants

By Denis Jjuuko A few years ago, while on the Kampala Northern Bypass, a couple in their newly acquired 16-year old sedan stopped a few metres ahead of me. The driver, wearing a nice suit and looking every inch a corporate lawyer or investment banker jumped out of the car, opened the trunk and dumped a load of rubbish by the roadside. It was towards 7.00 am. He jumped into his car and drove I think to work with his lady doting on him. Kampala generates a lot of waste. We love eating fresh food which we peel generating a lot of waste. We also don’t preserve a lot of food. We tend to cook more than we can eat. This isn’t just a Kampala issue though as studies show that 40% of the food we cook is wasted. Before the COVID-19 lockdown, you only needed to attend an event and see how people load their plates with food at events. Most of this food is obviously not eaten. Waste from food eaten or not creates a nightmare for many households. The couple that dumped rubbish on the northern bypass isn’t isolated. If you walk in many of our suburbs you will see a lot of dumping or a signpost warning others of severe consequences if they dumped waste. Still, it is not uncommon to see people eating their sweet bananas or corn while dumping whatever they can’t eat through car windows. Even on Kampala Road! Some entrepreneurs have set up companies that charge a small fee to collect waste from offices and homes at least once a week. In Kampala, such entrepreneurs dump the waste at KCCA’s landfill in Kiteezi. For plastic waste, companies such as Coca Cola buy it by the kilogram to recycle for new plastic bottles. They like to call it the circular economy. However, the other waste that we create mainly around food is a nightmare to deal with yet it shouldn’t be. In many of Kampala’s ‘elite’ suburbs, investors are building housing estates to sell as condominium units. Others are buying large pieces of land and partitioning it into small pieces and selling them to those who dream of building their own houses. When people start building on these small pieces of land, each constructs a septic tank and some even complement it with pit latrine (I have never understood the purpose for pit latrines when one has a flushing toilet. We can turn them into energy hubs too). Housing estates building condos are building mega septic tanks. Schools and hotels are doing the same. A few months ago, there was even an uproar when a shopping mall in Entebbe was leased some of the land belonging to botanical gardens to expand its septic tank. Schools, hotels, malls always hire cesspool emptier trucks to deal with their human waste challenges. I am told they even pay National Water to have the waste dumped there. National Water then turns into manure and sells it to us. Although we have increased our electricity generation by building many power dams, its supply to the final consumer is still a challenge. We usually run to Twitter and Facebook to complain whenever it rains and electricity supply from the national grid gets interrupted. Yet we live with a source of untapped energy that can supplement what we can get from the national grid. We can turn our septic tanks into sources of biogas used for cooking and even lighting. Uneaten food and other such waste can easily be turned into energy. Imagine a housing estate with 50 units with each occupied by about five people, how much energy can it create from the waste people create every day? Each housing estate or household can be a power plant to supplement what is provided from the national grid. Most Ugandans use firewood to cook, creating energy from biogas would save our forests and protect our planet. The sludge from biogas plants can then be used as fertilizers. So the money we pay to dump our waste can instead be saved and we even earn from it. We just need to practice sorting waste and then invest in biogas technologies to turn our waste into energy and fertilizers. It is not just energy that our homes or offices can create. We can recycle wastewater and use it again in our homes for stuff such as gardening, washing cars and such other tasks. The writer is a communication and visibility consultant. djjuuko@gmail.com

July 28, 2020

News

#OutToLunch We can’t make face masks and then wear used underpants

By Denis Jjuuko A week ago, seven factories were opened in Namanve near Kampala. The president was there as ever to launch them. As ever, none of these factories which will make stuff such as tarpaulins and gumboots belonged to a Ugandan. It seems foreigners are seeing what we can’t see. What makes foreigners set up factories while we happily board the planes to go to China to import stuff the Chinese are happy to make here? There are many theories I hear one being that the government favours foreigners. I don’t want to agree. Foreigners come from a background where stuff are made and have understood that making things isn’t as difficult as many Ugandans think. The seven factories, according to The New Vision, were worth a mere US$12 million or approximately Shs44.4 billion. Each factory, therefore, cost just Shs6.4 billion. These seven factories will employ more than 2,000 people. This sadly reminded me of the debate some Ugandans love to make about manufacturing and assembling especially when it comes to vehicles. These Ugandans like to argue that you can’t manufacture cars in Uganda (yet 90% of buses on Ugandan roads are made in Kenya). That you can only assemble them and therefore that Uganda has not manufactured a car! Can anyone manufacture a car? An average car has more than 20,000 parts. Carmakers the world over source parts from the global automotive value chain. This value chain is comprised of hundreds of companies majority of which many of us have never heard of. I drive a small Japanese car. At the back of its key, there is a logo of the carmaker and something in small print that reads “Omron Corporation.” Omron Corporation made the key system as well as its automation system that detects many stuff including rain and whether I need a break from driving or not among others. Another company called Takata made its airbags. The music system is from Sony while the tyres are from Bridgestone. I can list many other parts but it will bore you. If you are keen about cars, you will also notice that some vehicles resemble each other even when they carry a different nameplate. Spear Motors sells Fiat Fullback Double Cabin pickups that look exactly like the Mitsubishi Sportero double cabs sold by Victoria Motors. The Tata lorries of the 1980s, if you are above 40 years old, that belonged to your school look exactly like the Mercedes Benz trucks of 40 years ago. South Korea’s Ssangyong Musso has a partnership with Mercedes Benz to use its technology same way Kiira Motors works with China electric car giant CHTC. There are many collaborations when it comes to the production of stuff. Buying parts or technology from the various suppliers is how stuff are made. If you are reading this on iPhone, know that Apple made no single part of what you are holding. Every part comes from somebody in the smartphone value chain. Let us bring this closer to home. Think of Kampala Serena, a 5-star hotel in Kampala. They prepare a buffet every day. The stuff they use to make that buffet comes from various suppliers from the food value chain. They don’t grow matooke or peanuts. They make no cooking oil. They don’t produce cooking gas either. Many suppliers bring the ingredients that Kampala Serena uses to make the buffet. Serena designs the menu and their chefs decide how it tastes and how it is presented to the customer. And ladies and gentlemen, cars are not made any different from the way Kampala Serena makes its food. The foreigners have understood that any product is made by many suppliers. That is how they come here and set up factories to make or assemble TV sets and fridges as we Ugandans fly to Dubai, of all places, to import finished products. We like to argue that something isn’t made in Uganda simply because many of its parts were sourced from suppliers from all over the world. The foreigners simply say this is Ugandan made, walk into Uganda Investment Authority and get tax incentives. In a few years, the foreigners who come here with little money are billionaires while we Ugandans are crying of slow business. We are happy to call them to employ our kids who we were paying Shs2m a term for 19 years. If you have been importing TV sets and fridges, I am sorry but Hisense is going to lead to the closure of your shop. If you used to import ceramic tiles, you know this so well. Ugandan entrepreneurs must think beyond importation, stop arguing that they can’t make anything and line themselves up to become suppliers of parts for the factories that are being launched every day or set up these same factories. Kiira Motors is building a factory in Jinja to make vehicles. Can’t a Ugandan set themselves up to provide nuts and bolts? What is so difficult in making brake pads for vehicles? Why do we still import car wipers and even headlight bulbs? How can we be so happy to replace parts in our cars with the junk that is sold in Kisekka Market? If we have managed to wear new face masks made by Ugandans, why do we still wear used underwear? The writer is a communication and visibility consultant. djjuuko@gmail.com

July 19, 2020

News

#OutToLunch Business bet: Grow food within 120km of Kampala

By Denis Jjuuko Last week we argued that most parts of greater Kampala will be urban in 30 years. Before that, Kampala’s population is estimated to grow to approximately 7.5 million people in the next 10 years according to the World Population Review. Urbanization means that they will be less land devoted to agriculture within Kampala’s 40km radius. Yet people still need food. Africa imports food worth approximately US$35 billion a year according to the African Development Bank and is estimated to grow to more than US$100 billion in the next 10 years. This is a result of “population growth, low and stagnating agricultural productivity, policy distortions, weak institutions and poor infrastructure,” says a report by the Food and Agriculture Organisation (FAO), a United Nations agency. Many of African dollar or even shilling billionaires are involved in food. In Uganda, we even import cabbages, onions and such other things! Yet our land is so fertile and the climate still favours agriculture. Uganda has a water body almost everywhere and even if you are to sink a borehole, the water isn’t that deep in most parts of the country. As Kampala expands and its population grows, there will be more demand for food than ever. The government is pushing industrialization as one of the ways to create the elusive jobs. With the internet and advancements in technology, many non-traditional jobs will be created leaving many youths working outside the agriculture sector. As Kampala expands, some people will become middle class. The middle class will demand more organic foods. They also don’t work in the gardens. Over the last few decades, many people have abandoned agriculture preferring to look for jobs in urban areas. The declaration that now some towns are cities will also lead to more people migrating to urban areas in search of jobs. At the end of the day, they will need food. There is a news video circulating online that the price of Matooke, the staple food in many parts of Uganda especially the populous central region has significantly gone down over the last few months. This has been largely attributed to the COVID-19 pandemic. However, the market and generally demand for food is enormous in central Uganda given the way Uganda’s economy is structured and the level of urbanization. One way farmers can cut costs and increase their incomes is by growing food that is needed in a particular market. If, for example, you grow a particular food crop where the market isn’t available it becomes expensive to transport it to the market. Let us take an example of Matooke. If you grow Matooke in western Uganda, the transport costs are enormous to bring it to Kampala where the market is. This means that the farmer will get less as the traders have to factor in the cost of transport. In the news video I referred to above, the farmers in Isingiro say the price of a bunch of Matooke is now between Shs500 and Shs3,000 instead of Shs15,000 on average they were being paid recently. In Kampala, a bunch of Matooke costs between Shs5,000 and Shs15,000 today from about Shs12,000 to Shs30,000 a few months ago. This means that most of the money the farmer could get is now taken by the transport man. With increments in taxes levied on fuel, the farmer will get much less. As you know, our value addition on Matooke is still in its infancy even though there is a factory that is being set up to make flour among other products. So the best bet for a farmer now to increase their profit is to grow food within a radius of about 120km from Kampala. This will cut down the cost of transport significantly and avoid price fluctuations that result in flooding the market. When a farmer is far away from the market, they may not be able to predict the market as they need much more time to bring the product to Kampala. A farmer within 120km of Kampala can easily monitor the market in Kampala and decide whether to bring the Matooke to the market or not since the delivery period is short. In two hours, a farmer can have his Matooke on the market if the plantation is within a radius of 120km. This calls for zoning the country so that farmers whose products are perishable like Matooke grow it near their biggest markets. Produce with a long shelf life can be grown anywhere even though the transport challenges would remain. So for those who are looking for post-COVID-19 business opportunities, growing food within a radius of 120km from Kampala is a smart bet. The writer is a communication and visibility consultant. djjuuko@gmail.com

July 9, 2020

News

#OutToLunch One of the idiot’s guides to retire with a million dollars

By Denis Jjuuko A few weeks ago, I read an article of how one can retire at the age of 65 with a million US Dollars if one saved and invested from the age of 25. That is 40 years of saving. The author argued that one needs to save about US$150 a month. I was intrigued. However, the article was meant for the American audience and therefore some of the stuff listed that one could do aren’t applicable here. I have been thinking about it for those few weeks and came up with a model that could work in Uganda. At today’s exchange rate, US$150 is about Shs560,000. I decided to round it off to Shs600,000 a month. This model is for those who are employed and therefore don’t have time to do business. I also moved the age from 25 to 30 for one to be able to start saving Shs600,000 a month or if they are a couple, Shs300,000 each. I know many people can’t save this much but many can do that. The age of retirement remained at 65 but my model is for only 30 years. If one saves Shs600,000 every month, it means that they will have Shs7.2m a year as savings. Many people reading this article can save this money if they wanted. I went back to 1990, which is 30 years ago and imagined the map of Kampala. How did Kampala look like 30 years ago? It was a nice town where most people lived in a radius of less than 10km from the main post office on Kampala Road. The rest of the suburbs where Kampala residents reside today were burial grounds. Uganda’s population was just 17 million people with Kampala accounting for approximately 755,000 people according to most statistics I could find online. Areas like Naalya were bushes. A friend says there were no major roads in Najjeera. Some of the current roads only existed as footpaths they used to take to raid jackfruit trees. Uganda’s population is expected to grow to 100 million people in 30 years. So if you are 30 today, you will be 60 years old in 2050. What kind of Kampala do we see in three decades? You can replace Kampala with any town or city where you live. Unless Uganda fights some wars and annexes some parts of its neighbours like Idi Amin unsuccessfully tried, the land size will remain the same. There is going to be unprecedented pressure on land with a growing population making the price of land skyrocket. Areas today that are devoid of urban dwellers will be urban and worth a lot of money in 30 years. So anybody or a couple that can save Shs7.2m a year for 30 years will be able to retire with a million dollars by just investing in land. What the couple needs to do is to ensure that they buy at least a plot of land worth Shs6 million a year. That would leave them with Shs1.2m to pay for the transfer of titles and even plant some trees on it (depending on the location). If a person or couple do this for 30 years, they will have 30 pieces of land in areas that are becoming urban. Areas like Matugga, parts of Mukono, Luweero or Mpigi where land is sold at such prices, will be very urban. Replace Matugga or Ziroobwe with any area where land is being sold at that rate. So in 2050, somebody who has been investing consistently will have an asset base that is worth a lot of money. Remember the plan is to retire at 65 with a million dollars. In 2055, at 65, one will start liquidating the first 20 properties bought. That means selling the pieces of land bought between 2020 and 2040. This means that you would have owned each of these 20 pieces of land for 15-35 years. Let us go back to Kampala of 1990. The growth of Kampala and other urban areas coupled with an explosion in population means that the same scenario will still exist in 30 years. So if you invest Shs7.2m in a property today, in 30 years, the investment will be worth about Shs200m in today’s money. This is based on the current rate of land. Just 15 years ago, a plot of land in some parts of Kampala was going for Shs3 million if bought from the real estate dealers. It was much less if you bought from the original family. Today, the same plot is approximately Shs100m. This means that a piece of land has been growing at Shs6.66 million per year. So 20 plots of land will be worth a minimum of about Shs4 billion in today’s money. To cater for taxes, commission, inflation and other stuff, you will need to sell another five properties bought between 2040 and 2045, which you would have kept for between 10-15 years. With a million dollars earning a net of about 6% per annum in financial markets, you will have US$5,000 per a month to ensure you don’t have to ever call your children for any money during retirement and create generational wealth for the grandkids. The writer is a communication and visibility consultant. djjuuko@gmail.com

July 9, 2020