July 16, 2024

Out to Lunch

#OutToLunch: Survival by borrowing entrenching household poverty

By Denis Jjuuko Somebody told me that to survive in Kampala, you need to learn a few tricks. One of them that caught my attention is on lending money to friends and relatives. Like almost everyone in Kampala, he receives several requests. A relative who needs to borrow to pay school fees, buy food for their family, pay rent, take a sick child or parent to hospital or enjoy a night out in the bars with the most dazzling lights. When he had just started working, he told me, he almost realized that he didn’t have any money left after he had met most of the borrowing requisitions sent his way. Years later, he came to realize that those who borrowed never paid back. In fact, some even returned to borrow more. He had to be ingenious if he was to survive in the city. He devised a method of only lending without expecting anything in return. So, if a friend, co-worker or relative called to borrow, he would only lend what would not affect him significantly. If somebody called to borrow say Shs200,000, he would offer to lend them Shs50,000. He never expected this money to be paid back. He never calls them to remind them of their obligations. If anyone paid back, he considered it a bonus. This method also worked as a deterrent. The majority of those who borrowed never came back to borrow again. Those who did, he would remind them that they hadn’t paid back what they had borrowed earlier. Many would pretend to be ashamed but at least he knew that person would never disturb him again. He says this model has worked for him and saved him the anguish of expecting money from people who had no intentions of paying back. I was reminded of this last week when a study funded by the central bank indicated that the majority of adult Ugandans or 17.2 million people out of 24.6 million survive by borrowing. The snippets from this study have made national headlines in some of the daily newspapers. For a country to have 70% of its adult population surviving on borrowing should be worrying. Uganda being such a young population, it means that most of these people are unemployed or earn so little to “afford life.” And when they retire or unable to work, they won’t have any pension to depend on. Many adult Ugandans who aren’t borrowing have become beggars. Parents begging their children. Couples begging their partners. Parents begging their sons and sometimes daughters in law. When we talk about borrowing, it gives a connotation that at one stage, money will be paid back by the borrower. Although it wasn’t clear in the report who lends these Ugandans money, many borrow from friends and relatives as the case of my friend. Money that is usually not paid back. To be honest, many of the borrowers have genuine problems largely based on our lack of good public schools and health facilities. Many are dehumanized to borrow and if they had a chance to find employment, they would diligently work. That is why Entebbe airport departure lounges are full of young people going abroad to seek employment. Had they been lazy as some people (especially politicians) allege, they wouldn’t be frequenting the Arabian deserts. Since the money borrowed is largely never paid back, the lender is denied an opportunity to invest it in worthwhile ventures which could provide a return on investment. That is why one of the reasons people end up without sustainable pension. They spend a lot of their resources while working to look after other adults, thereby playing the role of a government without the resources of a government. When time for retirement comes, they have nothing sustainable to rely on. The borrowing cycle continues for generations thereby entrenching household poverty. Some people call this “black tax” — money black people pay to sustain their extended family and a host of friends. It also fuels corruption. Few people are going to do the right thing when they have a sick mother at home and are struggling with hospital bills or when the children are home instead of school. Government needs to find a way for the majority of people to find sustainable jobs, provide at least affordable public health and education services so that they don’t depending on borrowing from people who also don’t have much. That would require the reduction on the largesse of government officials on stuff that provide no real value, provide incentives to local businesses to thrive instead of employing methods that lead to their closure while at the same time attracting the elusive foreign direct investment to spur economic growth. The writer is a communication and visibility consultant. djjuuko@gmail.com

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Out to Lunch

#OutToLunch: Why you may consider investing in Rotary

By Denis Jjuuko About 15 years or so ago, a friend asked me whether I could help them do some voluntary work. There was somebody visiting Uganda and there could use some of my skills. I was invited for a meeting over lunch at the Grand Imperial Hotel in Kampala. The meeting turned out to be a lecture of sorts where a speaker on a lectern makes a presentation followed by questions and answers from the plenary. A high table of sorts existed where somebody had a bell and wearing a chain pinned with golden miniature plaques. Many of the people at the lunch hour event wore suits and all the kind of clothing that is considered acceptable in corporate offices. I could recognize a few public faces — captains of their respective industries. As is usually the case, I had arrived before my scheduled time for the meeting. So, I was asked to sit in and listen. Somebody gave an update of the visit of the big man. People said it was a big moment for Uganda and they were to leave no stone unturned. My friend claimed that is why he needed me to volunteer my skills to make the visit a success. After an hour or so, the “lecture” ended and was officially closed by the man wearing a chain at the top of the table after going through some sort of rituals. I am not a big fan of formal events so I wasn’t very impressed with all the formalities. I think people were also wondering why I was there. I was one of the few people not in a pin-stripe suit or silk necktie with a Windsor knot. Anyway, after the formalities, we sat down by the poolside with my friend and few people who had been in the meeting and ordered for some lunch. I was to support the visit of the Rotary International President to Uganda. So, I had just attended a Rotary meeting (sometimes called a fellowship in Uganda). I had heard about Rotary before but I had never been this close. I had been told it is a club of extremely wealthy people who spend all their time spending money. I had wanted to join and see if a few doors could open but nobody maybe thought I was worthy. Also, I didn’t have money to spend. In 2011, a friend who I had told that I wanted to join Rotary informed me that a club was being set up in Naalya and since I lived in Najjeera, I should consider joining. He was joining too. He said it was easier to join a new club being formed than joining an established one like that I had interacted with at the Grand Imperial Hotel. I accepted his invitation and some ajoling and became a member. I found out you don’t have to be wealthy to become a member. But like many such organizations where membership is by invitation, sometimes Rotary is misunderstood and a few salacious tweets are usually posted by people who don’t care much to analyze society. Through Rotary, a membership organization of nearly 1.5 million people globally, professionals, business executives and students use their resources to change their societies or those in other parts of the world they will never even meet. They are almost single handedly responsible for the near eradication of polio; through immunization campaigns they carry out all over the world. Rotary focuses on a few areas such as maternal and child health, education and literacy, water and sanitation, peace and conflict prevention, and economic and community empowerment among others. In Uganda, Rotary is known in almost every community. If they are not building classrooms, sinking boreholes, refurbishing health facilities, planting trees, or immunizing kids, they are mobilizing resources to set up a cancer treatment center in Nsambya and a blood bank in Mengo. Rotarians like calling themselves people of action and any keen observer would see the good they do in the world. But they don’t just help others. Members become leaders which enables them to build and improve their leadership skills. Every week day in Uganda, many people meet through their clubs to listen to speakers others may have to pay for while establishing networks for life. Of course, sometimes they meet and celebrate like last week when a new district governor, Anne Nkutu, was installed. Katikkiro Charles Peter Mayiga was there to talk about keeping hope alive and how the Kingdom of Buganda and Rotary work together to make lives better. But even at celebrations, the business part of Rotary is always the big thing. And if you want to increase your networking opportunities while honing your leadership skills and at the same time helping others in our communities, you may consider an ‘investment’ in being a Rotary member. The writer is a communication and visibility consultant. djjuuko@gmail.com

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Out to Lunch

#OutToLunch: Home ownership one way to a country’s development

By Denis Jjuuko More than 20 years ago, a man set up an office at the current Serena Conference Centre. He seemed to have a huge advertising budget and didn’t spare a coin in pushing his product. Newspapers featured him. Radio presenters talked about him. I was in active journalism at the time and looked out for him. He gave me an appointment at 4.30am. Any chance to change to a favorable time fell on deaf ears. 4.30am, or nothing. I agonized. How would I make it from my home to his office in the middle of Kampala? I was about to accept but he wasn’t the Pope, US President or Osama bin Laden. Why would he only have time at 4.30am? The article I was to write was to enhance his profile for free. But I also thought he was pretentious, trying to prove to a journalist that he works so hard. I gave up on him. A few months later, his property brokering business started foundering. He never owned the properties he advertised. He was a broker. But he was smart enough to set up an office at a fancy location. Most of his colleagues operated on the streets of Luwum and William. Those who had found a fortune, their Toyota Mark IIs were their offices and impressing meant wearing sharp pointed fake-crocodile skin shoes. Since he was different, with an office, people trusted him and gave him their money. Some of the people who had told him they owned the land were fraudulent. The land either didn’t belong to them or the families were fight for every square foot of it. Since he was the one making the connection between the buyer and seller and sometimes received money from clients, whoever didn’t get their land came for him. He would end up on the beaches of Luzira. Having learnt from him, another broker went a step further and set up a dingy office in Old Kampala. Although it wasn’t glamorous, he had one unique aspect about him — he and his associates owned the land. He bought large swatches of land in areas like Kulambiro, Buwaate, Kira and divided them into 50×100 feet plots (approximately 11.5 decimals). Kampala was expanding at the time beyond its original seven hills. People who had seen their retrenched or retiring parents move from fancy homes in Kololo into poverty thought to act differently. They would build houses. The economy was growing, and a semblance of a middle class was emerging. There was a ready market of people streaming to his Old Kampala office to buy land. Unlike his Serena Conference Centre predecessor, land titles were easily availed to whoever purchased from him. He too advertised heavily, promising Ugandans to live in organised estates with access roads and all that. People saw an opportunity to live in a community that was not too much of a slum at an affordable rate. Before a place sold out, another new estate would be opened. Eventually, there was an estate on every major road to Kampala to cater for every purchaser’s interests. You know how Kampalans love living near highways that lead to their ancestral villages! To further impress, he put up a mega building in Old Kampala and expanded into a quarry business along Jinja Road. A building hardware shop was set up, if you bought a plot of land, he would give you a few bags of cement so you could start building your dream home! Anyway, that growth was funded by banks which meant they would hold on to the land titles. So, people who purchased land took away agreements instead of titles. Some of the land was far away from the city yet the majority of his clients were first home owners. The others were speculators involved in land banking. The estates were not selling out at the previous rates. People who needed their titles were not getting them. That led to people stopping buying from him. The original landlords were also in some cases not fully paid. Court appearances became his preoccupation. The other week, the banks won a case against him that declared him bankrupt. It was one of the saddest stories of Ugandan entrepreneurship. A self-made man who had made it to the top. Yet he is not the only Ugandan real estate entrepreneur to go under. One of the challenges of real estate in Uganda especially the one where the model is buying land and parceling it into small plots for selling is that most of these estates are deep in areas that lack access and basic services today. First home owners shun them yet they don’t have resources to buy in their preferred areas. Second home owners already have land in areas that these estates sold 10 or so years ago. Or they are looking for bigger land for their country homes. Other investment vehicles like treasury bonds and unit trusts are competing with land banking. Wrangles over land are common as family members of the original owner always come up with counter claims against each other. Squatters are everywhere and they are more protected than the owners in some cases. Police is not competent or facilitated to investigate these cases. Courts take forever to decide these cases. Yet home ownership is one way that countries develop. People who own homes won’t wake up to burn a city down. They work hard for its development because they have something to lose. If we need to develop this country, we must devise means that enable young people to easily own homes. The writer is a communication and visibility consultant. djjuuko@gmail.com

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