May 2022 – Prime Time Communications

Out to Lunch

#OutToLunch High prices call for self imposed lockdowns

#OutToLunch High prices call for self imposed lockdowns By Denis Jjuuko The increasing of prices of commodities in Uganda seems to be going on unabated with no clear indication of when they will stabilize. Naturally prices are always quick to rise but take time to go down if they ever at all. Countries without reserves of any nature, many times simply watch as prices shoot through the roof. When oil prices were rising in the United States, the government decided to release a million barrels every day to ensure constant supplies and control prices that could have risen due to supply issues especially after Russia attacked Ukraine. The Uganda government could may be go back to distributing money or food to people who need it most if they can do it efficiently. However, in the meantime, it is may be appropriate for Ugandans to self impose lockdowns. Here are some ideas. Movement Transport is a key cost for business and individuals. Without an effective public transport system, taxis regardless of what their association leaders may have agreed with government can increase rates at any time just like they do when it rains in Kampala. For the “my cars”, fuel is expensive and some stations don’t even have. So controlling movement is one measure of reducing your costs. Only travel if you can’t avoid it. Self imposed movement restrictions is one sure way of reducing your costs. Virtual meetings/events During the lockdowns of the last two years, many office workers were working from home. Offices re-opened when the government eased restrictions. But for many workers, transport is a painful cost. As a business owner, you may have to impose restrictions for people coming to work from offices for certain roles which don’t require somebody’s presence in a physical office. Reductions in physical meetings and events is another way to save some money. Food We are in the middle (or supposed to be) of the rain season. So you can grow some vegatables in your compound if you have it to reduce food costs. Vegatables grow pretty fast and don’t need much effort. Growing it could also enable you make some “ka” money by selling to your neighbours. About 40% of the food cooked globally is never eaten. There is a lot of wastage in many homes as a good percentage of the food cooked is never eaten. You may have to impose some restrictions on the amount of food being cooked in your home. So that only the food that will be eaten is prepared instead of throwing it away. But also we don’t have to eat three meals a day. Two could be sufficient! Another way to cut costs. Social events Don’t plan for social events in this period such as birthdays unless if you have access to certain resources. If you are to fundraise for your wedding, many of your friends may not be able to contribute or will give very little. You can still do your event with a few people. You can still celebrate your birthday with only members of your household. Don’t race, plan your journey Cars even the most fuel efficient ones consume a lot if driven in a certain way. If you accelerate and brake suddenly, they will consume more fuel. If you drive very fast at high revs, the car will consume more fuel. It is important to plan your journey and avoid movement during heavy traffic hours. For those who have to be in office say at 8.00am, you may have to wake up earlier than usual and leave earlier or later. Employers can adjust reporting times for some staff to ensure they aren’t stuck in jam for hours. For example instead of opening at 8.00am, offices can open at 9.00am and close at 6.00pm instead of 5.00pm. Employees can also work in shifts that are purposely planned with traffic jam in mind to reduce on fuel costs. Hybrid /electric vehicles The government can get involved yet again in the transport sector by bringing in electric vehicles for public transport especially in greater Kampala afterall the ministry of energy now generates a lot of electricity. Already government owns Kiira Motors, so this shouldn’t be so difficult. Those planning to buy cars can opt for hybrid ones or even electric vehicles. The government simply needs to tax them in a certain way to encourage uptake especially for public transport in the major cities. The writer is a communication and visibility consultant. djjuuko@gmail.com

May 4, 2022

Out to Lunch

#OutToLunch Government can grow coffee and sell to Vinci

#OutToLunch Government can grow coffee and sell to Vinci By Denis Jjuuko In just 14 pages, A4 size, independent Uganda gave away perhaps the most generous concession ever on any agricultural product, taking back the country to the days of the Imperial British Company – a colonial enterprise that subjugated farmers and the entire population and left previously wealthy nations in abject poverty. The ministry of finance entered into an agreement with controversial businesswoman Enrica Pinetti — she, you guessed right, of Lubowa International Specialized Hospital to be the sole buyer and exporter of Uganda’s coffee. After collecting tons of money in promissory notes and other forms, Enrica is still struggling to build a plinth wall. The ministry of finance claimed, of all things, that “heavy rains” have delayed the project! The agreement as controversial as the so-called investor will see her company Uganda Vinci Coffee Company, a novice in the sector (and we heard registered on the same day the agreement was signed), given “priority of supply of coffee….before registering any contract or acknowledging any arrangement for the export of coffee beans (including screen 18 and above), so that the company will have ample supply of coffee to sustain its operations.” Vinci claims that it will build a 60,000-tonne capacity plant in Namanve starting with a paltry 27,000 tonnes but the agreement is silent on when Vinci will grow its capacity to the 60,000-tonne mark. I highly doubt that they will ever get anywhere close to the promised capacity and there is no clause in the agreement that penalizes them if they don’t. In the year ending October 2021, Uganda exported 6.55 million 60kg-bags translating into 393,000 tonnes. Vinci will only be able to process, if they ever build the plant, a paltry 6.8% for which they get a concession similar to those given to British companies during the colonial period. The rest of the coffee, Vinci will just export for the next 10 years without remitting any taxes and determining even the price of electricity they will consume. The other laughable clause in the agreement is that Vinci will employ a mere 246 workers who they will even disenfranchise by not contributing to NSSF for 10 years. A company employing just 246 workers should never be given control of a sector that employs perhaps a quarter of the country’s population. The ministry of finance claims that this is the best deal ever for Uganda and “nobody else asked.” I think nobody thought that anybody could sign such an agreement hence the lack of other players with better capacity than Vinci to ask. But Uganda, it seems is the epitome of “ask and you shall be given.” The controversy of such a deal is that Uganda doesn’t own any coffee. If it was oil or some other minerals that belong to the country, nobody would be complaining. As a smallholder coffee farmer, I pay for everything — seedlings, irrigation, fertilizers, transport, and wages without any support from government. Government should, therefore, not “undertake to take all reasonable measures to give priority of supply of coffee” to Vinci or anybody else as they don’t at the moment own any coffee. Coffee belongs to farmers and therefore government can’t decide who they sell it to. Let Vinci compete for my beans and I will decide whether I sell to them or the competitor next door. Traders should also decide whether to sell to buyers in Sudan, Germany, China, Italy or anywhere else and not be forced to sell to one company. It takes only 18 months for coffee to mature and become harvestable. I don’t know how long Vinci will take to build her factory but given her performance with the Lubowa hospital project, this will take years to be built if it will ever be built. As Vinci builds its factory, government can start planting coffee on its vast land (or even acquire more land) which they can then “undertake to take all reasonable measures to give priority of supply of coffee” to Vinci. I don’t think any coffee stakeholder or farmer will raise any finger when beans from the government’s farms are given to a single buyer. The writer is a communication and visibility consultant. djjuuko@gmail.com

May 4, 2022

Out to Lunch

#OutToLunch How far are we to achieving the social development goals?

#OutToLunch How far are we to achieving the social development goals? By Denis Jjuuko Health is one of the biggest elephants in any Ugandan room. If you fall seriously sick, in most cases, for those with the resources and connections, hospitals in foreign capitals seems to be the only glimmer of hope for survival. For most of us, it is certain death! Yet a day the former speaker of parliament was buried at his Omoro home, the world gathered to commemorate yet another World Health Day. Goal three of the Sustainable Development Goals (SDGs) is on good health and well being to ensure healthy lives and promote well-being for all at all ages. The SDG targets are part of Agenda 2030. Equitable access to health is one of the major drivers of equality. Eight years to the end of the SDGs, how far are we as a country? Can we meet the targets? Can we reduce the maternal mortality ratio to less than 70 per 100,000 live births by 2030? Can we end preventable deaths of newborns and children under 5 years of age by 2030?The first point of action should be for many young people delaying giving birth until when they are ready. There are many underage girls getting pregnant in their teens. Many, keen to hide the pregnancy end up in unsafe places carrying out unsafe abortions. Instead of parents and guardians teaching kids about their sexuality, we have resorted to prayer! Yet, one of the reasons Uganda managed to succeed to a certain extent about the spread of HIV/AIDS in the 1980s and 1990s is because parents had candid conversations with their children. Teens need to understand their body changes and the risks that associated with underage sexual intercourse. Can we achieve universal health coverage, including financial risk protection, access to quality essential health-care services and access to safe, effective, quality and affordable essential medicines and vaccines for all by 2030?The death of speaker Jacob Oulanyah and Bank of Uganda governor Prof Tumusiime Mutebile in foreign hospitals should make us think about our priorities. It is reported that Uganda spends approximately Shs400 billion every year treating its officials abroad. If we spent 75% of this money every year on building and equipping hospitals ordinary Ugandans can afford, maybe we would be closer to achieving the SDG 3 targets. If you visit a Ugandan hospital, each patient has at least one person looking after them as care takers and many others that cook food, bring in food supplies and such other things. One person falling sick means that a few other people won’t be working, dedicating their time to looking after the sick. How much does this cost the economy? But in absence of a national insurance scheme, most people have no options. Public hospitals and health facilities are few and underwhelmed with the sheer number of people who need their services. Many die while waiting for critical care. There are three major causes of maternal deaths: delays to seek medical services, delays during transportation and delays at hospital. Due to lack of insurance, many women delay to go to hospitals as they wait for money for transport and other necessities. Many times, money comes in too late. Health facilities are far from where people live making it expensive for people to visit these facilities. Many people keep pushing the time they will go to health facilities. As they delay, their health deteriorates and they die. The priests turn up and say it was “God’s plan. ”I recently visited Kawempe hospital, the national referral facility for pregnant women. In some wards, you had nowhere to pass with many people sleeping on the floor. About 70 women give birth at this hospital every single day. The day I was there, 18 women needed emergency surgeries. I saw a doctor who was too tired that had decided to take a nap on the floor before performing yet another caesarean surgery. Another time, some big man will die and the politicians will give colorful speeches, fight over the funeral budget, and drive their Landcruisers back to Kampala and do nothing yet again. When they are sick, they will cry to those with the envelope to be taken to India or Nairobi for treatment. The most cost-effective thing to do is not to fly those who are well connected abroad for treatment rather to build facilities right here at home. In fact, we would make money from the ever-expanding East African region — just like Nairobi. The writer is a communication and visibility consultant. djjuuko@gmail.com

May 4, 2022

Out to Lunch

#OutToLunch Entrepreneurs/self-employed people need to take leave too to revitalize their body and brain

#OutToLunch Entrepreneurs/self-employed people need to take leave too to revitalize their body and brain By Denis Jjuuko In formal organisations, employees take leave which is about one cumulative working month in a year. A working month is about 21 days. It helps them to reenergize themselves by having a break from the work routines. In many such organisations, employees don’t work on public holidays and even weekends for some. In some countries like Germany, I have read that laws even exist that allow workers to ignore emails that come in after working hours. That an employee won’t be panelized for not responding to work emails that come in late in the evening or too early in the morning. With the advent of smartphones where one literally moves with the office wherever they are, employees could spend most hours of the day working thereby not having enough time to spend with their families and/or relax. Relaxed employees work better than those who are on the verge of a breakdown due to tiredness. I am told of an organization in Kampala which has automated its office systems to go off at exactly 7.00pm. Workers are supposed to leave work at 5.00pm but they left some extra hours for people to finalize whatever they were doing. However, at 7.00pm, lights, air conditioning systems and computers shutdown so workers can go and be somewhere else. Although leave days are common in formalized organisations, it is not the case for many of Uganda’s entrepreneurs. Many consultants and researchers I know move around with their laptops logging in at every slight opportunity they have. They put in long hours at work and even longer ones at home in order to beat deadlines for either submitting proposals or preparing drafts for client approval. There are no public holidays or weekend offs. For those who run other type of businesses like shops, they open every single day and late in the night. If you go downtown in Kampala, you will find the ladies who run eating places are ready to serve Katogo for breakfast at 6.00am, wondering what time they had to wake up. They do this almost every single day and stay open to serve Kampala workers evening tea and porridge. Many times, there is no maternity leave for these people. Somebody gives birth today and in a few days, they are back at work with their babies! Should self-employed people in Uganda take leave like those in formal jobs? Absolutely. I know for most self-employed Ugandans how hard this can be. When they don’t open the shops, they don’t eat. They need to keep open to make the rent and pay all the bills. So they work every single day. But for many, the reason they work every day is due to lack of systems in place. Many entrepreneurs/self-employed people do every little thing themselves. They are the cashier, store keeper, accountant, procurement officer, director, every role you know in the business. It is one of the reasons that our businesses don’t survive the death of the founder. Nobody else knows anything about the business. This means that the entrepreneur/self-employed person can’t take a few days off without collapsing the business. Formalizing businesses means hiring more staff and even consultants or temporary workers to ease the workload of operating the business. In the short term it looks costly but in the long run, it enables an entrepreneur/self-employed person to focus on stuff they are good at and be able to take a break to revitalize their bodies. That way businesses grow. Entrepreneurs, like most people, are only good at a few things and that is where in many cases the focus should be. Every entrepreneur for example is not necessarily a good manager. So when an entrepreneur/self-employed person identifies what they are good at, they can concentrate on that and let other people focus on other aspects of the business. This can only work where it is intentional by the entrepreneur. Entrepreneurs don’t necessarily have to be the CEOs. So since Ugandans love starting businesses, thinking of processes that can enable one to concentrate on what they are good at is key but also enables one to take a few days off every once in a while, spend time with loved ones, or revitalize the body and the brain. The writer is a communication and visibility consultant. djjuuko@gmail.com

May 4, 2022

Out to Lunch

#OutToLunch Potential areas to invest during this period of inflation

#OutToLunch Potential areas to invest during this period of inflation By Denis Jjuuko Somebody whose 2022 resolution is to start constructing a house asked me last week whether she should commence or not. She already has a plot of land in greater Kampala. So far, she has saved about Shs40 million, she said, but the price of cement has increased by at least 14.2% over the last two or so months while some steel bars have gone up by as much as 26.2% for some brands. She wanted to know whether to hold on and build at another time — during a deflation period. The problem is that nobody can predict with certainty when prices will go back to normal. It may be next week or next year or it may never happen. In Uganda, prices rarely go down. So what does somebody who have cash on them do since the ministry of finance has said that it will “monitor the situation and respond whenever necessary”? The government says we shouldn’t panic as long as inflation is contained at 5% (currently, they say it is at 3.2%). Uncertainties, like for this lady, keep people on the edge wondering what they should do with their money. One of my aunts, a seasoned entrepreneur always tells me that “money today is better than money tomorrow” in reference to inflation. There are businesses and/or investments that withstand inflation and that is where we could be looking. If the lady who asked me keeps her Shs40m kitty in the bank waiting for the right time to start her construction project, the money will most likely lose value. So, what she could do with Shs40m today, may not be able to achieve it at this time next year (money today is better than money tomorrow).Here we look at businesses and/or investments that one could look at during this period of inflation. *Real estate* Real estate is one of the businesses that are known to withstand inflation globally because prices always match prevailing conditions. Rent income usually goes up during inflation but so are the values of properties. Because property values are usually rising to match inflation, if your plan was to invest in real estate, this is a good time. As prices of commodities and services go up, so will some people feel the pressure to sell some of their real estate holdings thereby making it a good time to buy. Also, I see many adverts in newspapers of bank foreclosures. But for this to work, you must be a long-term investor. *Commodities* As prices of commodities (sugar, soap, cooking oil, agricultural products etc.) go up, they provide a good investment opportunity given their ability to beat inflation. An investor can buy at high price and sell at a higher price factoring in inflation. However, this is a business for those who have appetite for high risk because they are the most volatile. Prices of commodities are the best indicators of inflation and therefore prices can crash as fast as they rose signaling an end to an inflation period. Invest with caution. *Technology* We are entering the fourth industry revolution (4IR) where technology is disrupting all sorts of industries. Of recent, there is a lot of interest in African tech startups by venture capitalists and this could be an area where to invest during inflation. Like we saw during the Covid-19 lockdowns, technology companies simply grew turning hitherto unknowns like Zoom into global behemoths. The world will continue to rely on technology for almost everything regardless of inflation. Long term investors could take a look at technology businesses. *Short term bonds* If you want to protect your money in the short term and you aren’t into other investments, you may go for bonds as long as they are yielding more than the inflation rate. The short-term ones are better because they give you an option to sit out and monitor the inflation as you make a decision on where to invest. This also protects your money from losing value as you plan where to invest during this period of inflation. But most importantly, if inflation escalates, you can get the money out unlike in long term bonds of for example 15 years and invest it elsewhere. *Gold* Uganda’s biggest foreign exchange earner is gold bringing in US$1.7 billion. Many countries hold gold reserves as a hedge against inflation. So since, it seems, there is a lot of gold in Uganda, this is a sector you could invest in. However, in Uganda, you are most likely going to find a conman dealing in gold than anything else. So be cautious on what gold you are buying to avoid buying fake stuff presented as a precious product. The writer is a communication and visibility consultant. djjuuko@gmail.com

May 4, 2022

Out to Lunch

#OutToLunch High soap prices call for a shift to oil palm growing

#OutToLunch High soap prices call for a shift to oil palm growing By Denis Jjuuko Scarcity is the mother of ingenuity; we have always been told. When things are scarce, human being quickly learn and adopt alternatives. For many Ugandans who grew up during the 1970s and 1980s, when household commodities were scarce, they learnt to improvise. Certain plants, I am told, were used to wash both the clothes and human body. Soap was one the household commodities that were extremely scarce. Kids in urban middleclass homes learnt what their village counterparts always experienced — tea without sugar or to sugarless tea taken with sweet potatoes and/or sweet bananas. Over the last few days, you have probably seen social media posts of how expensive a “tree” (read bar) of soap is. At the turn of this year, a bar of soap was going for about Shs3500 for the well marketed brands and much less for ‘average’ brands. Today, the same “tree” of soap is threatening to reach the Shs10,000 mark. Unlike the 70s and 80s where goods were not on the market, today, if you have money, you will be able to get whatever number of “trees” of soap that you may need. To be fair, it is not only soap whose prices have gone up. A 50kg-bag of cement is now on average at Shs32,000 from about Shs28,000 in January this year. Steel bars, have gone up by about Shs10,000 for the 16-millimeter size for the new brands on the market. Established brands are now selling by more than Shs20,000 of the January 2022 prices. Of course, today I will not say anything about petrol and diesel to avoid boring you to death. But since the issue now at hand is soap, let me stick to that. The main ingredient for soap is crude palm oil which is largely imported from Malaysia and Indonesia, the world’s leading producers. Palm oil is extracted from oil palm fresh fruit bunches. Growing oil palm was only introduced to Malaysia and Indonesia by British colonialists otherwise it is an indigenous plant of Sub-Saharan Africa. Yet the continent is now almost a net importer of crude palm oil. It tells you how far we have come! Palm oil is the world’s most diverse agricultural product. It can be used to make soap, cosmetics and at the same time edibles like cooking oil. In Uganda, we first experimented growing oil palm in Ssese islands in the 1970s but commercial farming only started in mid-2000s. Figures from the National Oil Palm Project (NOPP) of the Ministry of Agriculture indicate that the country needs to grow at least 100,000 hectares to meet current national demand. In Kalangala, only 11,346 hectares have been planted and another 7,500 hectares are under cultivation or planned in Buvuma. Oil palms take four years to mature and last between 18-25 years after which they have to be cut and replanting starts again. Today, the price of crude palm oil has gone up because of many reasons. First, the invasion of Ukraine and Russia according to Reuters has halted the supply of sun oil, an alternative to palm oil. “Palm oil has become the costliest among the four major edible oils for the first time as buyers rush to secure replacements for sunflower oil shipments from the top exporting Black Sea region that were disrupted by Russia’s invasion of Ukraine,” the Reuters article reads. The article adds that “since ports in Ukraine will remain closed until the invasion ends, Asian and European refiners have raised palm oil purchases for near-month shipments to replace sun oil which has lifted palm oil to irrational price level.” Second, Malaysia has reacted by restricting crude palm oil exports to meet its own national demands first. Third, since last year, Uganda introduced a 10% tax on crude palm oil imports. These factors have increased the price of crude palm oil in Uganda. The beauty of this though is that farmers in Kalangala are laughing all the way to the bank. As you read this, a kilogram of oil palm fresh fruit bunches is going for Shs1,238 compared to last month’s Shs1,137. Since September 2019, prices of oil palm fresh fruit bunches have increased by 166 percent from Shs465.This is good for Ugandan farmers. In Kalangala, there are 2,063 smallholders who make about Shs6 billion collectively every month. An acre of oil palm gives the farmer at least a monthly income of Shs400,000 (oil palms are harvestable every 10 days). If the government is keen to empower farmers, oil palm growing is one of the solutions. Could the parish development model look at areas where farmers can grow this crop and empower them to do so? The writer is a communication and visibility consultant. djjuuko@gmail.com

May 4, 2022

Out to Lunch

#OutToLunch What other sectors can learn from fintech startups

#OutToLunch What other sectors can learn from fintech startups By Denis Jjuuko Ugandan and indeed African companies or startups as they are usually called especially in the fintech sector have been on a roll — raising money that wasn’t even previously seen in donor aid programmes. You have probably seen billboards all over Kampala and its suburbs of companies like Chipper Cash or taxis with rear windows branded Wave. Chipper Cash raised some US$250 million last year and Wave attracted US$200 million in September. Even those that were not necessarily fintech such as Safe Boda got US$50 million from Google (although they are pivoting towards fintech) and Rocket Health which made a lot of inroads during Covid-19 lockdowns by providing home-based and telemedicine solutions recently announced that they had received some US$5 million. There are many others such as Flutterwave, Zembo and Treepz that are getting investor’s money to expand. In 2020, African startups raised between US$1.3 billion and US$1.5 billion in venture capital. The number for 2021 is believed to be between US$4.5 billion and US$5 billion according to TechTrunch, a technology website that monitors funding in the tech sector. This kind of interest in African startups is raising young people’s appetite for innovation knowing that they don’t necessarily need to be based in Silcon Valley to attract funding. Of course, the definition of what is an African startup is still out there for debate as some of these businesses aren’t actually owned by Africans rather by people interested in doing business on the continent. Africa is home to some 1.4 billion people (same population as China) with a median age of 19. Companies like Liquid Technologies are rolling out the internet across the continent while Google and Facebook are working on undersea cables that will further enable more people to connect to the internet. However, when the time for reaping the profits comes, Africans may not be able to get much since most of this funding is coming from outside the continent. African investors including our beloved swindlers of public funds (since they have been urged to invest the loot at home) need to look at this sector as well. What is it that foreign venture capital firms are seeing on the continent that we aren’t seeing? I don’t think they are just investing for the sake of it. And it might be late by the time we wake up. Telecom companies providing mobile money services at extortionist rates will soon be looking over their shoulders. It is a matter of time before startups with millions of dollars in funding start eating into their profits but that is an article for another day. The interest in the tech sector especially fintech by these venture capital firms reminded me of somebody who had an initial meeting with some telecom company that wanted to bring mobile phones in East Africa but never thought it was an idea that would take the region by storm. He missed out on the opportunity of a lifetime. But also what can other entrepreneurs learn from the venture capital interest on the continent. I haven’t heard much interest in other sectors beyond fintech and technology generally. How do we attract funding in other sectors? Sectors such as food processing, manufacturing, logistics, and construction need this kind of funding the fintech sector is attracting. Unlike fintech, these sectors will employ much more people on the continent and attract other sectors. For example, where one creates a factory, the real estate sector develops so employees can get housing, supermarkets and even banks set up to serve these employees. Manufacturing by its nature creates a lot of direct and indirect jobs. There is need for African policy makers and entrepreneurs to understand what attracts large sums of money to the fintech startups and replicate it elsewhere. Africa today must be having the cheapest labour force anywhere in the world and many of these people are easily trainable for the repetitive jobs that manufacturing provides. If a manufacturing business in Uganda attracted US$250 million in funding, it would actually set up a large factory and employ hundreds of people with sustainable jobs. It’s effect on the economy would be huge. I remember a few years ago, one of the biggest manufacturing companies in Uganda wanted to expand and got a syndicated loan from a few banks in Uganda of just US$100 million, which they used to set up their plant. So imagine the scale a manufacturer would reach with US$250 million in a country like Uganda. It is time for sectors to learn from fintech and attract venture capital. The writer is a communication and visibility consultant. djjuuko@gmail.com.

May 4, 2022