October 2021 – Prime Time Communications

Out to Lunch

#OutToLunch: Make teaching sexy again

#OutToLunch: Make teaching sexy gain By Denis Jjuuko On a recent walk in the neighbourhood, my eyes locked with those of a hawker only that he looked very different from many of those I usually see. Medium built, walking with a little limp. His hair must have been darkened the previous day. He was wearing a long-sleeved cream shirt and a grey trouser that must have been part of a three-piece suit. His shirt was neatly tucked in. He must have been in his 50s. He looked like your former headmaster! In one hand, he was holding a handkerchief and the other a rack on which his merchandise were strewn. This perhaps explains his limping gait. The merchandise though – clothing pegs, under garments for ladies and such other things – must have been worth about Shs100,000. He calmly asked whether I could buy some pegs. Usually, Kampala’s hawkers are in their late teens or early 20s. He told me he used to a be a director of studies in some private school but due to the prolonged closure of schools due to the Covid-19 pandemic, he had fallen on hard times. When I got home, I cursed for not getting his contact and I haven’t seen him since. Anyway, last Tuesday was World Teachers Day. I thought of my own parents who are now retired teachers and whether they wouldn’t have been like this hawker had Covid-19 struck during their time. A teacher, slightly before my parents’ generation, was one of the most respected professions. Teachers of the day managed to live relatively well in decent housing and supported their large families. Although there are some teachers who are well off today, the majority simply eke a living and are one disaster away from hawking. BBG: The Supereffective Fitness Program You Need to Know buy turinabol Easy Chicken Pot Pie Soup – Anytime Fitness Recent efforts by government seem to be directed at only those who can teach sciences. I think salaries of teachers should be increased regardless of what they teach. When legendary entrepreneur Steve Jobs created Apple — the personal computer and smartphone behemoth, he credited its success to a calligraphy lesson he had accidently attended. Through that lesson, he was able to create a different product that was unique in design (and performance of course). So arts are as important as sciences. Teaching must be made sexy again so that it can attract young smart people. Payment is important. If the hawker I met in my neighbourhood succeeds in his new venture, he won’t return to the classroom. If any of his family members were thinking of becoming teachers, they won’t be able to do so. The image of their old man having worked for many years ending up hawking bras will be ingrained in their memory for ages. And the image won’t be rosy. Of course, you can argue that this man didn’t save enough or spent his money on stuff that were not important but we all know that teachers are some of the least paid people today. And apart from bars, no sector has been locked down for such a prolonged period like education. Many teachers who are now vendors of vegetables and used clothing will never teach again. A friend has indefinitely closed his primary school in Najjeera and sold off some of the buildings which are now being turned into condominium apartments for sale. Another who had started a nursery school has also closed it having made such huge losses. I don’t know about the enrolment of university students into education courses but I believe they aren’t very many. Yet, a report titled Secondary Education in Africa released by the Mastercard Foundation last August indicates that Sub Saharan Africa needs in excess of 10 million teachers (for secondary education alone) by 2030. At the rate teachers are joining other professions including hawking, the number is most likely to go up. At one stage, teachers were recording passengers for boda bodas for Covid-19 contact tracing. Imagine a boda man employing a teacher! If we don’t deliberately make teaching sexy again, young people won’t be enrolling for the profession in the numbers we need to make significant impact. For the majority of Africa’s young people, the easiest pathway to sustainable jobs is through education. We can talk about entrepreneurship but the people who have attained some level of education are more likely to create sustainable businesses than those who haven’t. If we don’t have enough highly trained and motivated teachers, young people will leave school without any skills that can help them sustain jobs or businesses. The World Teachers Day gives us time to rethink the teaching profession if we are to solve the challenges of this century. The writer is a communication and visibility consultant. djjuuko@gmail.com *This article was originally published on World Teachers Day 2021.

October 18, 2021

Out to Lunch

#OutToLunch How to avoid having money in dormant bank accounts

By Denis Jjuuko Almost a trillion shillings is lying idle in dormant bank accounts, the Bank of Uganda said at a presser recently. And if this money is not claimed in 10 years, it would be taken by the government. You can call it the Idle Money in Bank Accounts Tax. If they lend this money to themselves before they take it at just 10% per a year (net of taxes), they would have another trillion in 10 years. How do people get to have money in dormant bank accounts? Bank of Uganda and ministry of finance officials didn’t say. But maybe people die and the next of kin don’t how to process this money or some are too liquid that they leave money lying idle in dormant bank accounts for years. The problem though is that this money is bad for the economy. It makes government lazy, earning money they have not worked for, which means they may not care how it is spent. If you earn free money, you have a license to be wasteful. If a trillion shillings had been spent or invested, there would have been some improvements in the economy. A trillion shillings can create many small jobs and sustain many others. But how can we avoid a scenario where money remains idle in bank and now mobile money accounts to the extent that the government takes it away. One way is to ensure that at least your next of kin knows the banks and mobile money where you invest. If you die suddenly, they would at least claim it and use it. The other is to have a will where bank accounts are listed and money allocated to people who can utilize it upon your death. However, one way we can avoid having idle money is by investing it. Many studies tell us to save and it is important and may be that is one of the ways accounts become dormant. Money should be invested to make more money. I may be wrong but I believe that invested money doesn’t end up in dormant accounts. How can we invest money? Many times, we think that to invest you need a lot of money. It is sometimes small amounts that can lead to significant investments. Somebody I know wanted to buy land so she can join the real estate sector. She wanted at least an acre within 20km of the Kampala central business district. She didn’t have even a quarter of the value of what she wanted but she decided to go ahead and look for sellers that would accept her payment plan. After many months of searching, she found somebody who agreed to her payment plan. She made a deposit and started putting whatever little money she got into the mobile money account of the seller. Whenever the seller was hard up, he would call sometimes for as little as Shs100,000. If kids were going to school, the seller would call. If he lost somebody and wanted to go for burial, he would ask for money. She just kept a ledger of the transactions. Before not too long, she had paid off the guy and she received her land title. She got a surveyor to subdivide the land into eight plots, which she now sold off at a premium. Last I heard from her, she was now dealing in much bigger sizes. Accumulating capital is through investment and not necessarily through savings. And in a country where raising capital is a challenge due to the high cost of money, starting small is always the easiest way to do so. Finding somebody who can accept your payment terms for something so huge is one way to do it. Idle money if not left in dormant bank accounts, it could easily be spent on non-essentials. With an economy that contracted due to Covid-19, there are always more people asking for money than ever. People you hardly talk to will text you for money and if you have it, you may feel guilty for not helping them. If you have credit with your suppliers, you will think twice before helping every undeserving person who asks. The other key thing is not to be secretive about the projects that you are involved in with your family and close friends. A spouse won’t expect you to offer endless dinners in 5-star restaurants when they know that the guys setting up your factory are demanding payment for the steel beams and trusses they supplied last week. They will understand when you say you are broke. The writer is a communication and visibility consultant. djjuuko@gmail.com

October 11, 2021

Out to Lunch

#OutToLunch How to be the next BMK

By Denis Jjuuko On the Sunday, a few hours before Dr Hajj Bulaimu Muwanga Kibirige, popularly known as BMK after his eponymous group, was buried at the ‘public’ Muslim cemetery he created in Nkoowe near Wakiso town, I was at Hotel Africana in Kampala. Unlike many Ugandan businesses and even government offices where everything stops because the owner or even some public servant has died, you could hardly tell that it was the day of BMK’s burial. There was a somber mood alright but you could only tell if you knew what was going on. The rest of the business was operating normally. For somebody who simply booked a hotel room and didn’t know anything about the owner, it was business as usual. There are a lot of studies about Ugandan businesses not celebrating their 5th anniversaries, but perhaps not as much of what happens when the owners die. Many Ugandan businesses some even richer than BMK run their empires from their pockets. No proper systems for continuity. When the owner dies, the business dies too. It is too early to tell for the BMK Group but I bet it won’t collapse. Dr BMK was diagnosed with aggressive prostate cancer in 2015 and since then, he largely concentrated on fighting for his life, leaving his empire to siblings, spouses, offspring and managers to run. On Sunday, as he was being buried in Nkoowe, the hotel was functioning like nothing had happened. That is one of the key lessons for Ugandan entrepreneurs. The BMK Group never failed to meet its obligations because its founder was indisposed battling a terminal disease that eventually claimed his life a few weeks to his 68th birthday. Ugandan entrepreneurs must think beyond themselves by creating systems that can outlast them. There are many lessons for those who want to be the next BMKs. One of the key lessons that was the foundation of his success is a lesson he got from his late father, Hajj Ali Kibirige, in whose tutelage he learnt the ropes of business before he branched out on his own. Dr BMK’s father, a coffee trader and restaurateur in Masaka, repeatedly told him that although he owned the business, capital didn’t belong to him. It belonged to the business and, therefore, since capital didn’t belong to him, he should never touch it. He should instead devise ways of accumulating more of it. It is a lesson BMK never forgot. He was a generous man but you never found him throwing money around. “If you don’t respect money, it won’t respect you too,” he used to say. He also didn’t live luxuriously even though he could afford to live like a Saudi prince. The houses he lived in were nice but they were not mega mansions like some of those I see today built by people with an eighth of his wealth. He went where nobody ventured before. Started the motorcycle bodaboda industry that is employing millions of people today although we shouldn’t blame him for the lack of regulation that is crippling Kampala. He started gyms in Uganda and Tanzania, a business that is now in every little corner. He went to Karamoja to set up a hotel when other big entrepreneurs couldn’t think of it. As a trailblazer, he went into the packaging industry and even heavy lifting before anyone else in the country could. He always advised that people travel to learn what is going on in the world and meet potential suppliers. But he was also quick in making decisions. If he realized a business wouldn’t work, he quickly counted his losses and moved on. Unwilling to fight the anti Kaveera lobby, he decided to quit and concentrate on those that would enable him sleep at night. When he imported bodaboda from China branded BMK and he realized they were of poor quality, he decided to quit rather than soiling his name. He guarded the BMK brand jealously. But the biggest lesson — perhaps other than “not touching capital” is integrity. Dr BMK was honesty personified. He never refused to pay anyone. On his maiden trip to Japan to import vehicles in the 1980s, he lost USD50,000 to a thief while he was transiting through the airport in Hong Kong. Some of this money belonged to his business associates. He paid everyone back. His wealth is largely because he kept his word with his suppliers in Asia who always gave him goods and equipment worth millions of dollars on credit with good payment terms. Many of today’s entrepreneurs simply buy a new telephone line the moment they have received an advance deposit or relocate to another building when they have been given supplier’s credit. If you want to be the next BMK, you could grab a copy of his autobiography, My Story of Building a Fortune in Africa, or simply practice honest while working hard. Don’t “touch your capital” too. The writer is a communication and visibility consultant. djjuuko@gmail.com

October 1, 2021

Out to Lunch

#OutToLunch Embracing electric mobility will reduce the cost of doing business

By Denis Jjuuko Cars may have started as means of transporting people and goods from one place to another. That may still be the case today but how a car looks like and functions matter more than ever. In a world, where car models are released every so often, how they look also matters. A global automotive executive once told me that cars are fashion statements. Besides functionality, people buy cars for almost the same reasons they buy other stuff like clothing, shoes or which hangout to frequent. In Uganda and most of rapidly urbanizing Africa, there are other aspects to consider too. Besides the financing options, the cost of running a vehicle for a day in a clogged city with unbelievable traffic can be enormous. Many people drive with one eye on the fuel gauge and the other on the price boards at fuel stations. A small variation in price, sees motorists thinking of abandoning their trusted brands to stations whose name they can’t recall even after a few times of prompting. As the cost of buying cars and maintaining them skyrockets, the other alternatives like public transport in most of Africa remain challenging. Many young people end up working for transport and remaining with nothing thereby entrenching them into generational poverty. There is no continent that is as urbanizing as Africa today. If we don’t solve transport challenges, we will miss the opportunities that come with urbanization. One way of solving the challenge is by fast tracking processes that can increase electric mobility on the continent. The Uganda Revenue Authority licensing regime is still stuck in expensive internal combustion engine vehicles. There are no clear guidelines on how one can get a license for an electric vehicle. In 2021! There are some companies in Uganda that are trying to turn motorcycles into electric bodabodas, which enable the riders to earn a little bit more income while at the same time protecting the environment. Due to unclear guidelines and/or lack of incentives, they largely have to get the typical motorcycle, remove its engine and replace it with batteries. This makes the motorcycle expensive to acquire although it’s cheaper to operate and increases the rider’s daily incomes. I believe if there was a critical mass of electric bodabodas in the city, the transport rates would go down. Bodabodas aren’t only transporting people, they are playing a critical role in e-commerce. Almost all people doing online businesses in Kampala, somewhat depend on motorcycles to deliver goods and even services such as laboratory blood tests. Electric mobility would significantly reduce the cost of doing business, increase the profitability of these businesses and ensure that we reduce the common statistic of businesses not celebrating their fifth anniversary. Although the numbers are hard to come by, there is an increasing number of especially young people starting online businesses, selling all sorts of stuff. From passion fruits, clothing, and even offering services such as home education and they all largely depend on the bodabodas or motorcycles. Sometimes they don’t make sales though because of transport. To deliver 60 passion fruits worth Shs10,000 from Nateete to Najjeera costs almost the same cost of the passion fruits themselves. A customer who is willing to buy from a certain trader ends up failing to place an order just because the transport cost is too high. The trader’s business then fails to make a sale, which reduces its profitability, leading to eventual collapse. Bodabodas also employ a lot of people. As we talk of electric mobility and as the world abandons internal combustion engines, cars and even bodabodas will increasingly need electronic components such as advanced control units. These components will contribute as much as 50% to the price of the vehicle by 2030. Can the likes of Kiira Motors and all these electric bodaboda companies be buying these units from Uganda instead of importing them? Engineering students at Makerere and other universities can easily make these components. A car is perhaps the most complicated technically advanced consumer good ever made. It is a unit of approximately 30,000 parts. Once many of the components can be made by a country, then almost anything can be made. If one can make a vehicle’s control unit, they would be able to make MRI scans and such other devices. The automotive industry is a catalyst for sustainable manufacturing. And transport is a key business cost, which can be reduced by electrifying it. The writer is a communication and visibility consultant. djjuuko@gmail.com *Kiira Motors’ Kayoola EVS, a fully electric bus.

October 1, 2021

Out to Lunch

#OutToLunch What makes houses in Uganda so expensive

By Denis Jjuuko There was a recent debate on Twitter on the cost of houses in Kampala. The argument was that houses were cheaper in some parts of north America and western Europe than in dingy Kampala and Wakiso. A four bedroom flat in Mbuya goes for Shs650m or US$185,000. In some other places such as Munyonyo, Garuga, Muyenga or Butabika, similar apartments can cost as much as US$400,000. These are same rates or even more expensive than in Dubai. In Kololo, an empty acre of land goes for more than a million dollars. So, what makes the Ugandan property market so expensive? Most people say it is because of corruption of government officials in Uganda, South Sudan, and Eritrea. Although that could be true, I don’t think it is the only reason. In Uganda and indeed most of Africa, once a boy turned 18 years old, he was expected to leave the parents’ house and set himself up by building his own house. Although the age may have changed, a man isn’t expected to live in their parents’ house long after university. Also, most Ugandans consider a man successful after they have built or bought a house. A son in law who owns a house is talked about with glee. Unlike in the past, women are also expected to build or own houses as long as they work. This has created immense pressure for people to build or own properties. Also, many people aged above 35 saw how their parents suffered when they were retrenched and evicted from government properties. Besides, government largely doesn’t build houses for its civil servants anymore. Uganda’s housing deficit according to Habit for Humanity stands at 2.4 million units. And there are some 900,000 units that are substandard and need immediate upgrading. So, there is demand for houses at all levels both in urban and rural areas. Let us not forget that Uganda’s population is one of the fastest growing in the world and the rate of urbanization is increasing by the day. This has led to increased demand for housing. Yet the cost of inputs is so high. A 50kg bag of cement is nearly US$9 while a Y16 bar costs as much as US$22. Other inputs cost as much. Due to lack of sewage lines in most parts of Kampala, each house must have a septic tank and soak pit. That alone increases the cost of a house by approximately US$2,000. Most property developers in Uganda borrow money at interest rates of upwards of 20% annually. The cost of money in Europe and America is in most cases under single digits. Mortgages today are at 16% in Uganda. In Europe and America, many houses are built using certain wood types and such other prefabricated materials which reduce the cost of inputs including labour. The 2008 financial meltdown was because houses were available for anyone who wanted even when they couldn’t afford, which isn’t the case here. In the west, the housing market has matured and there is a price ceiling apart from mega mansions for millionaires and celebrities. Let me explain using Kololo as an example. An acre in Kololo has reached its price ceiling. There is a limit to how much you can sell a Kololo acre which isn’t the case in Gayaaza. I can buy an acre in Gayaaza today and double its price and still get a buyer. I can’t do that in Kololo because properties there have reached the price ceiling beyond which even those who have won a lottery wouldn’t buy. The developed world also has infrastructure that enables people to live almost wherever they want. Somebody in Europe or America or Japan can live 100km from their workplace. They wake up, jump on a train, bus or get onto a freeway and travel 100km every day. In Kampala, 100km is beyond Jinja or near Masaka town. Due to our infrastructure and lack of public transport, you can’t commute every day from that far to your workplace without suffering a nervous breakdown. Yet the cost of land just 50km from Kampala is so low that many people can afford it but they wouldn’t be able to live there and commute to Kampala every day. The cost of transport would be so high. The time spent to cover the distance everyday would be so much. It takes on average two hours every day for anybody who lives 15km from Kampala to get to work and another two to get back home. The writer is a communication and visibility consultant. djjuuko@gmail.com

October 1, 2021

Out to Lunch

#OutToLunch Why local supermarkets flourish while foreign ones fail

By Denis Jjuuko Retailers from both Kenya and South Africa once saw Uganda as the destination for their expansion drives. Setting up giant supermarkets that even went ahead to sell matooke, cabbages and other vegetables by the kilo! Sometime back somebody told me that if you are a young man starting out in life and your girlfriend prefers to buy vegetables from these supermarkets, you should take to the hills before you become extremely broke. The implication was that our market is different. Things that are freely available in farmers’ markets should be bought that way. Yet Uganda’s retail market is one of the most lucrative sectors. According to the Uganda Revenue Authority (URA) 2021 Revenue Performance Report, 71% of the revenue was generated from four sectors with wholesale and retail bringing in Shs5,783.69 billion or 29.43%. This even beat manufacturing which was 22.7% (Shs4,461.29 billion). The others were information and communication at 10.48% (Shs2,059.83 billion) and financial and insurance Services at a mere 8.39% (Shs1,643.54 billion). So why is it that a sector that is as lucrative as wholesale and retail is hard for companies with advanced technologies, business systems and structures and cheap capital? Shoprite, Nakumatt and Uchumi among others have found the Ugandan market tough to crack. Yet at the same time local retailers particularly Capital Shoppers and Quality Supermarkets have continued to thrive. A lot of the foreign retailers fail to understand the local market in which they operate. Off Prince Charles, a major road in Kololo, Uganda’s most expensive leafy suburb exists a kiosk where sometimes you will find somebody jumping off an expensive car to buy some items yet the fancy supermarkets are lined up less than a kilometer away in Lugogo. Small shops or Duukas dominate Uganda’s retail space in the neighborhoods where most Ugandans live and many such Duukas are growing. The foreign brands sometimes stock stuff that are largely geared to the upper class and the diplomatic market. Fancy dog food brands, car jumpers, toolboxes (Ugandans don’t DIY- Do It Yourself), brown bread, French wines and salami! That is why they sell vegetables by the kilo and fail to compete with Maama Junior less than a kilometer away at Nakawa market. The upper class, diplomats and expatriate market is very small. Local supermarkets understand their customers better. If they think sugar that is packed by the manufacturer is expensive, they pack it themselves to reduce the cost. They expand to locations where the majority of their clients live instead of concentrating in big malls in the cities. The success of any supermarket or retail outlet largely depends on the control of the stores. Did the supplier bring in what is written on the delivery note? Did the goods that leave the store end up on the shelves on the floor or it was diverted? There is a lot of pilferage in Uganda and once that isn’t controlled, then the supermarket can’t grow. If you regularly visit one of the foreign retail outlets in Kampala, you will realize that the floor staff are more interested in discounting the products for you so that they ask you to give them something on the side. This has been going on for a while and I believe it eats into the retailer’s profits. Many of the local retail giants are more or less family businesses. Family businesses in the sense that many of the staff in key decisions are either relatives or people who come from the same village. Some have been in these jobs for 20 years or more and the owners have established an incredible bond. Because they come from the same villages, the retail business owners play a philanthropic role whenever their staff have an issue. A huge contribution to one’s wedding and another when an employee loses a parent or a child or when they need a to clear some medical bills. That has created an unbreakable bond with some of the key workers. They look at the success of these supermarkets as their own. In foreign owned retail outlets, it is largely about work and any chance staff get (including the foreign ones who are brought here to manage) to steal, they take it. That is when they are closing, they have huge debts with suppliers who they haven’t been paying. They are here largely to work and will do anything to live beyond the retail business’s means driving fancy pickup trucks and living in leafy suburbs, dating Kampala’s most endowed belles. The writer is a communication and visibility consultant. djjuuko@gmail.com

October 1, 2021