November 7, 2024

Out to Lunch

#OutToLunch: Group savings could help young people become homeowners

By Denis Jjuuko For most people, owning a home is the ultimate dream. It is a key component of what constitutes the American dream. In many parts of Africa, a boy only becomes a man if they owned a house. At kwanjula (betrothment) events, you hear spokespersons of the groom to be bragging that the man who is intending to marry already owns a house, when they are mentioning his home address to which the congregation claps incessantly in wonder. It confirms, somewhat, the potential of the man to look after the bride. But like we heard recently as the country marked the World Habitat Day, housing in Uganda is increasingly becoming a pipe dream for the majority of Ugandans. Apparently, 76% of the population won’t be able to afford to build or own a decent home. That is such a huge number. The cost of land and building materials are way too out of reach for the majority of Ugandans. That shouldn’t be very nice for any government to hear. Home ownership is a cornerstone of stability. The biggest asset the majority of people will ever own is a home. And once they own a home, it means that they have a big stake in their country. They will do whatever it means to protect their biggest asset. So, they won’t be involved in burning down a street on which they own a home. There is a lot government can do to ensure that this happens. Ensuring people have sustainable jobs, affordable mortgage rates, social security linked to home ownership, tax deductions on building materials etc. However, sometimes, the government may not do all those things. They may leave individuals to do it on their own. So how can people, especially those that banks may not describe as “high net worth”, be able to afford a decent house? Home ownership in Uganda, at least for the majority, starts with the ability to own land. Land that is affordable is usually far from urban centres without any utilities such as water and electricity. For many young people, living in such an area can be scary so they end up postponing to buy land. By the time they have raised some money to buy land in a place that they consider livable, they are taken to the same place which was extremely rural a few years ago but it is now unaffordable to them. The places they can afford are again so rural. However, they now have school going children which means less money at their disposal. Before they know it, it is retirement time and no house. They now hope that their children would be able to look after them. The poverty cycle continues. How can young people afford to build and own homes affordably? At least those who earn a regular income? They will need to come together either as friends or relatives and save money together consistently for some time. They don’t have to be so many, a maximum of about eight people. When they are too many, so many interests will come up and they may lose focus. They can consistently save money for about 3 years. If each of them saves Shs50,000 per a month, it means that that they will have Shs4.8m by the end of the first year. If they invest this money in a unit trust at about 12% annually, they will have an extra Shs576,000 after one year of investing it. If they invest Shs400,000 every month after their initial investment of Shs4.8m, at the end of the 3-year saving cycle, they will have at least Shs16,197,120 according to an online compound interest calculator. That is why compound interest is sometimes called the 8th wonder of the world. With Shs16.1m, the group of eight can now look for an acre of land to buy at about 15m, which they can now divide among themselves. If eight of you decide to buy land in an area you consider rural, you won’t be scared of living there because you will have the security of your neighbours. Anyaway, each member should be able to get a 50x100ft plot in a well organised estate. With the Shs1.1m balance, they can now employ the services of an architect to design eight houses for them. The houses should look exactly the same and should be of the same size. They should not be fancy storied houses that are too expensive to build. Simple would do it. The dream is to own a home, not a Hollwood-esque home! In the design, there are things they can share, such as septic tanks and a perimeter wall but that can come in later. Now that they are good at saving and investing, they can double their monthly savings to Shs100,000. If they invest Shs9.6m and continue investing Shs800,000 per a month at 12% annually, they would have Shs32,394,240 by the end of 3 years. Depending on the design they choose and materials they use, they could now be able to build a house or two for every member every 3 years. In 12-24 years, each of those members will be able to own a decent mortgage free house. The writer is a communication and visibility consult. djjuuko@gmail.com

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Out to Lunch

#OutToLunch: Scarcity of adult diapers exposes the need for research before imposition of taxes

By Denis Jjuuko If you take care of an elderly person in Uganda today, there are many challenges that you face. You may have to quit your job to look after an elderly person and there is no pay for that or you may have to get the services of a live-in nurse. Both options are expensive and almost out of reach for the majority of people. So the elderly who usually don’t have sufficient sources of income live lives devoid of dignity, many sometimes scavenging for meals and other things that they need in their lives. The politicians who claim to represent the citizens are largely out of touch. The example of the diapers the elderly require to live decent lives is a case in point. Last year, Parliament approved taxes on diapers. The Members of Parliament voted with unprecedented euphoria with many arguing that they were doing so to stop homosexuals from using them. There was no data presented to prove that the majority of adult diapers were being used by homosexuals. But nothing unites politicians in Uganda than homosexuality! Anyone who argued otherwise was labelled a supporter of homosexuality or to having been paid by the “imperialists” in western capitals to corrupt the mind of Ugandans. If you are in care today of an elderly person today, you would have noticed that you are spending a lot of time moving from one shop in Kikuubo to another in search of adult diapers. With increment in taxes, the traders who were stocking them have moved on to more profitable products or closed their businesses all together. Those who bring them increased the costs to cater for the increased taxes but they are also bringing in smaller sizes and somewhat inferior qualities than before the taxes were slapped on them. Those who haven’t moved on, are doing what they are doing to keep their businesses open. Who would blame them? A diaper a size too small is not only uncomfortable, it is also said to lead to bed sores. If you have ever looked after a sick person, bed sores are some of the most painful and stubborn things to treat. Caregivers want to do anything in the world to avoid them but small size diapers the elderly are using today are going to creating a massive healthcare problem. And to make it worse, the traders aren’t bringing in enough quantities. Today, diapers for the elderly are for booking by paying in advance and you can’t be certain when they will bring them in. For some traders, they don’t even allow you to book a lot so that everyone gets some. Of course, the war in the Middle East may also be responsible for delayed shipping of containers but the major reasons Kikuubo traders attribute to the scarcity of adult diapers is the increment in taxes. Who ever knew that because of our lack of research before we increase taxes, the elderly who are lucky enough to afford pampers will have to use ones that are rationed? But that is where we are. Today, those who take care of the elderly are spending more money on shoes as they develop holes in the soles as they look for pampers instead of looking for money to buy them and pay for fees for medical consultancy and prescribed drugs. I think parliament has the power to correct the mistake they made when they argued that adult pampers were promoting homosexuality because some of them realized their mistakes. I remember seeing a clip where a Member of Parliament after failing to secure diapers for her mother admitted to having voted to pass the adult diaper law in error. Since to err is human, we shouldn’t blame the MPs when they admit their mistake and go ahead and correct them. Because that is the right thing to do. But also, such glaring mistakes are avoidable by parliament and all arms of government by being informed by data instead of emotions before making key decisions. It should not be so difficult for the research arm of parliament to find out who buys more adult diapers and for what purpose. The ministries of finance, gender, and health should have this information too. But the right thing to ensure the elderly live with dignity is to remove the increased taxes on diapers while also supporting local manufacturers to make them here. The writer is a communication and visibility consultant. djjuuko@gmail.com

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Out to Lunch

#OutToLunch: Resilient coffee farmers will make money regardless of UCDA fate

By Denis Jjuuko Whether on coffee tables, bar tables, parliamentary tables, or presidential tables, the talk has been about coffee following the contentious coffee bill that seeks to amend the National Coffee Act 2021. The main tenet in the bill is the proposed dissolution of the Uganda Coffee Development Authority (UCDA). Depending on who you listen to, UCDA is either angelic, demonic or a combination of both. Maybe the debate wouldn’t even have reached its current crescendo had the Speaker of Parliament not caught on a live mic urging her colleagues to do something about the Baganda. Whatever, she meant, the Baganda seemed to be the target. You see, 50% of the coffee grown in Uganda is from Buganda, a source of livelihoods for almost every household in the region. Many kids in Buganda go to school because of the incomes derived from coffee by their parents and guardians. Coffee and of recent, enjoys a demigod status among the people of Buganda. It hasn’t been like that though for the last few years. Many people in Buganda had given up on growing coffee until about 2016 when the kingdom started its famous Emmwanyi Terimba (coffee is profitable) campaign reminding people of the good old days of Mmwanyi Zabaala (another variant of coffee is profitable). Mmwanyi Zabaala was usually a reference to the powerful Bantam motorcycles that people in areas like Masaka massively bought as a result of profits from coffee especially in the 1960s, 1970s and 1980s. Farming is usually not for the fainthearted and prices can significantly fluctuate especially for a product that is largely exported. Prices are many times determined on global markets. Weather changes in Brazil, Colombia or Vietnam, for example, can have a significant impact on Uganda’s coffee. And domestic demands in those larger producer markets can also have impact. Speculators on the futures markets in the global financial capitals can also have an impact. But also, people can simply give up on something by losing hope. Leadership is usually required to restore hope, reminding people that those who “lose a loved one, don’t sleep by the graveside.” Once people are inspired to realize that not every light at the end of the tunnel is of an oncoming train, they could easily wake up and do something for themselves. That is what happened in Buganda circa 2016. With inspiration from the leadership in Buganda, people in the region started growing coffee again. Seeing the uptake in the crop, UCDA sought for a partnership to work together. The end result had been increased exports and increased incomes for the people in the region and indeed elsewhere. A coffee tree lasts about 45 years. So those who had abandoned their trees didn’t all have to plant new ones. Many just did stumping, allowing the coffee to sprout and flourish again. Others planted new ones. Within 2-4 years, they were making money again. I remember a trip to Bukomansimbi about four years ago where I met a man who had been a boda boda rider in Kampala and had decided to return to the village. He had revived his coffee garden and had managed to build himself a decent house and rentals somewhere in Kyengera, just outside Kampala. He regrated the years he had spent in Kampala riding a boda boda and before it, working as a taxi conductor. That was well before the average coffee prices of around Shs13,000 per a kilo of fair average quality. With the prices being offered today, there is real income in the pockets of ordinary Ugandans. And not just ordinary Ugandans, the country’s is benefiting as well as income from coffee exports are topping USD210m per a month. Regardless of what the government of Uganda does, coffee will remain a highly demanded crop across the world. The biggest consumers of coffee in the world don’t grow it and they are not about to give it up. They will continue to demand for it. The traders and the entire value chain is not about to give up coffee. Since the demand is assured, those who are growing coffee should not return to the previous years of feeling pity for themselves. They should instead increase the acreage those who can, look after their coffee trees well and do whatever is necessary to increase production of quality beans. Those that won’t give up, regardless of the prices or scrapping of UCDA would still be better than a farmer that don’t have anything to sell. The writer is a communication and visibility consultant. djjuuko@gmail.com

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