To understand any place, you have to leave it. It’s only with a comparative perspective that you recognize the significance of things you take for granted on the one hand, or the things you lament daily on the other. That’s how I’ve felt, anyway, during this past year of working on my dissertation, based in Uganda and working briefly in Ghana, Nigeria, Kenya, Burkina Faso, and now, Malawi.
I flew into Kamuzu International Airport in Lilongwe yesterday afternoon. From Kampala it’s a short trip, feeling much like the journey from San Francisco to Chicago, and making intra-continental travel seem easier than it normally does.
There are no immigration forms to fill upon arrival in Lilongwe (at least the day I arrived), but they do check for your Yellow Fever card. How did Yellow Fever, a relatively uncommon disease, become the single most common (only?) vaccination required worldwide? I was thankful I had remembered my aptly colored yellow Yellow Fever card, but others who didn’t have one seemed to get through just fine. While the card is ostensibly a requirement in lots of countries, apart from Malawi I can only ever remember being checked in Nigeria.
At the immigration counter, I was not asked what I would be doing in Malawi, or how long I would be staying. There were no forms to fill out, no visa fees to pay. My fingers were scanned, photo taken, and off I went. I bought a SIM card at the airport, no registration required, and got cash from the ATM. The road from Kamuzu to Lilongwe was practically deserted; a few homes dotted the otherwise empty roadside. The road was smooth, the air hot, the ground dry. I wasn’t sure we had arrived in Lilongwe proper until I started to recognize the names of lodges I had seen in guidebooks. By contrast, coming from Entebbe you may think you’ve reached Kampala, only to find yourself snaking slowly through the city limits an hour later.
The quiet and winding streets of the Lilongwe, lined with trees, remind me of Kigali, as does the relative absence of people. While Kampala, Lagos, Nairobi, and Accra are churning, bustling, and often overwhelming, Lilongwe has a distinctly understated presence.
Uganda’s economy is nearly five times the size of Malawi, Kenya and Ghana about twice that of Uganda, and Nigeria far bigger than all four combined. The largest bill you can get in Malawi $2.50, Uganda, $20, Kenya $11, Nigeria $6, Ghana $23. As you can see, there is no relationship between bill and economy size (or GDP per capita, for that matter), which makes spending and taking out money much easier in Uganda and Ghana than in Malawi or Nigeria. In both Nigeria and Malawi (yes, with my limited experience of one day in the latter), ATMs appear to be frequently running out of money, and sometimes with very long queues. I’m no economist, but something about tiny bills seems very inefficient. Is there an upside? Any work on the politics of moneymaking, literally?
Finally, although I generally dislike the tradition (requirement?) of adorning the walls of every establishment with presidents’ photos, it is a welcome change to see — for once if not for long — a woman in the frame.
That’s all for today. More comparative musings soon.
Why solving inequality is a must for Africa’s development
In the morning young children brush their teeth outside makeshift houses as a snaking line of Range Rovers crawls by. In the afternoon, businessmen fill cafes while street vendors peddle their goods in a sea of commuters inching towards home. In the evening, toddlers sit transfixed by flat-screen TVs while their neighbors sit playing by candlelight. We are living in a world where shopping malls are popping up alongside young boys herding cattle – a clash of peoples occupying the same space but living lives that bear no resemblance to one another.
Rarely in history have such extremes coexisted. The yawning chasm between rich and poor is palpable but not physical – lives but not livelihoods overlap. In some ways, disparities in wealth are inevitable. Countries whose average annual income is in the hundreds of dollars but whose annual economic growth soars at rates of 5% and beyond are bound to experience uneven transitions to prosperity. Access to opportunities, education, even liquidity is not even or equitable. We can’t wish away these disparities, but sooner or later, we will have to address them.
This was also the message of a keynote address by John Githongo, Kenya’s famous whistleblower, at a conference on innovations in governance a month ago at Stanford. I had heard a lot about Mr. Githongo and read Michela Wrong’s popular book, It’s Our Turn to Eat, which documented his time fighting corruption in the administration of Kenyan President Mwai Kibaki. Nevertheless, I wasn’t sure what to expect from him. I had heard so few critical words about the man that I began to become suspicious – surely he could not be as saintly as depicted! Like all of us, Mr. Githongo surely has his flaws, but I have none to report. His speech was simply exceptional.
The message? Inequality is the primary development challenge of the next few decades – inequality of outcomes and opportunities, of expectations and aspirations. Inequality is not only morally repugnant but also easy to politicize, ethnicize, and militarize in Africa, he argued.
Herein lies the real threat to development — a new round of conflict and instability triggered by inequalities that are the product of the very economic transitions for which we strive.
Githongo likened our current state of affairs to a meeting of old and new technology. We have often been successful in getting right the hardware of the state – infrastructure, education, health – or at least making noticeable progress in these areas. However, the software, made up of political rights and freedoms, is outdated. Combining old software with new hardware is like buying a brand-new Dell laptop and loading it with Windows ’95 – it will have a blue-screen! And what follows is not pretty.
Where political opposition and mass protests have been successful at toppling regimes, there has frequently been a political hangover. After the euphoric triumph of the many over the few comes the realization that updating the software of political freedoms and institutions does not happen overnight. The end of dictatorship does not call for champagne. The inequalities that prompt regime collapse do not disappear with the despot.
The challenge of political instability provoked by inequality is particularly acute in urban areas. There are vast disparities between rural and urban populations, but it is the inequality within urban areas that seems to drive most conflict. Revolutions rarely begin in the countryside.
The hopefulness of the Arab Spring just one year ago has given way to the realization that we do not know how to cope with the mobilization of society based on inequalities, whether economic or political. Sitting governments often retaliate violently, exacerbating societal tensions that are already on the verge of a breaking point. Ordinary citizens do not know whether to join the masses in protest, run for their lives, or sit tight and wait for calm. The dominant actors on the world stage shout past each other, often rendering impotent international institutions like the United Nations.
The good news that in many places, the software is being updated, albeit in fits and starts. Coups and election violence notwithstanding, there have been gains in political freedoms across the continent. The development of the media, slow strengthening of parliaments, widespread acceptance of elections, and multitude of multiparty elections that have increasingly resulted in regime transitions are all evidence that political freedoms are far from stagnant.
Of course, just as with a computer, it is frustrating when the machinery of politics and society temporarily freezes or crashes. You lose your work, and you lose time. But if we are discouraged at the pace of progress, we have not only to look at ruling parties but also at the would-be political and social entrepreneurs who have not always put pressure on the powers that be or provided a viable political alternative. Inequality has allowed political opposition to mobilize the masses, but what comes next? Without organizational or institutional infrastructure, opposition parties and coalitions are unlikely to prove any better than the regimes they oppose.
Watching cities like Kigali or Kampala increase in size and wealth is inspiring, but the gap between the “haves” and “have nots” is also larger than ever before. Inequality will not vanish as countries grow, and may eventually impede or even threaten further progress. For this reason Githongo’s case is a strong one: inequality will be one of the greatest development challenges of this generation. I think we have the tools to avoid a meltdown. Everyone knows what Windows ’95 is a dinosaur. The question is, who is in charge of the update?
Why small increases in price can lead to a steep decline in demand for essential products
A piece of nylon netting is a useful thing. It can be cast as a fishing net, hung as a curtain, or draped over a seedbed as protective covering. Netting can make a stunningly white wedding dress, or even a make-shift chicken coop.
One can also sleep under it, of course, to keep mosquitos from biting at night. Though insecticide treated nets (ITNs) are routinely distributed in malaria endemic regions, often subsidized by major donors such as the Global Fund, many worry that such campaigns are frequently futile. Anecdotal evidence from the Kenyan shores of Lake Victoria to the alters of Ugandan churches suggest that these bednets are sometimes quite literally cast aside or otherwise misused.
While misuse is certainly problematic from the perspective of those funding mosquito net campaigns, it also raises a broader question, and one with serious implications for public policy in malaria prevention and beyond: Do people value and use things that are given to them for free?
There are two competing arguments used to answer this question. The first argument says that people value more that on which they spend their own money or resources. Furthermore, people will spend some money, when they can afford it, on those objects that they perceive to be useful. A second argument says that if an object is perceived to be useful or of value, people will use that object regardless of whether they purchased it or whether it was given to them for free. The ubiquity of incumbent presidents’ campaign t-shirts in both opposition and stronghold areas is supporting evidence for those in the latter camp.
The mosquito net-cum-wedding dress is a classic illustration of the dilemma of freebies. The protective power of mosquito nets against mosquito bites and thus, malaria, is rather less effective when the net becomes a nuptial adornment or is tossed into a river, much less left in its packaging and stashed in a corner. The creative use of nets is thus often the go-to anecdote for those in the first camp of the freebie question.
Anecdotal evidence, unfortunately, can only get us so far in adjudicating between these two perspectives. Fortunately, a number of development economists have been systematically evaluating the extent to which people use services or tools given to them for free and those provided at a cost. While there is still no definitive answer, and while context matters, much of the evidence seems to suggest that people use many free goods at high rates, and often will not purchase the same products when provided even at very low prices.
A group of researchers at the Abdul Latif Jameel Poverty Action Lab, based at the Massachusetts Institute for Technology (MIT), recently wrote a report summarizing ten studies examining the question of whether user fees and cost-sharing increase or decrease the use of health and education services and products. The majority of the studies were conducted in Kenya, although some were also conducted in Uganda, Zambia, and India. Their findings are striking, and the title of the report says it all: “The price is wrong.”
Time and again, small increases in price lead to a massive decline in demand for products including water disinfectant, deworming medicine, mosquito nets, and soap. For example, one study in Kenya found that while over 80% of people used a mosquito net if they received it for free in a prenatal clinic, only 20% would purchase the net for $.60 (approximately 50 Kenyan shillings or 360 Rwanda Francs). Similarly, another study in Kenya found that while nearly 60% of people used water disinfectant when it was given to them for free, less than 10% would use disinfectant if charged $.30 for the same product. This general pattern appears to repeat itself in different locations and with different products.
Two things are thus evident. First, people are often unwilling to purchase a number of goods and services that promote health and education even at highly subsidized rates. Second, people often use those same goods and services at high rates if they are provided for free. Clearly, receiving something for free does not preclude its use. If we think back to the wedding veil problem however, it is also clear that some products may not be used as prescribed, fee or no fee.
Why are people so sensitive to price when it comes to potentially life-saving goods and services? Individuals and families weigh the costs, monetary or otherwise, of procuring and using goods and services against the expected benefits from using those goods. Bednet wedding veils notwithstanding, in most cases it appears that families perceive some benefit from using goods like mosquito nets and soap, since rates of usage are quite high when the product is free. Some speculate that people may not physically have the cash on hand to buy even very inexpensive products, or that other inconveniences, such as the time it takes to procure a product, may affect their decision. But these are only partial explanations. It is also possible that people do not believe products will be as efficacious as researchers and policymakers think they will be in promoting their health.
Available evidence suggests that people who receive goods and services for free often do use them, although the extent to which they will use them and how they will use them is subject to some debate. Even if there are large benefits to providing free bednets, water disinfectant, soap and the like, products that often provide benefits that extend beyond the individual recipient, the question of sustainability comes to the fore. In the short term, the provision of free goods and services, particularly those that promote preventive health behaviors (like hand-washing) may have large and positive effects on the health of families and communities. But ultimately, we need to better understand why people are often so unwilling to spend even small amounts on products that have the potential to keep their families much healthier.
Accessing people’s thoughts and interests from Asia to Africa is just a click away
It used to be that education primarily took place in a classroom. These days, the chalk and blackboard are fading away and steadily being replaced, or at least complemented, by new technology. Even in some of the world’s hardest-to-reach places, cell towers and solar-charging stations are re-inventing the learning and communication experience. Alongside the traditional classroom teacher are laptops and cell phones, paving the way toward a whole new way of seeing the world.
A world of data is at your fingertips, quite literally. The advent of personal computers and increasing interest in making information open and accessible to all means that we now have the ability to answer many questions faster and more accurately than we ever thought possible. Information on everything from economic growth to weather patterns to flu outbreaks is just a Google search away. Data and data sources are not without their flaws, but we can often see broad patterns much more clearly across and within countries than we once could. The question is, how can we take advantage of new and ever increasing sources of information? Perhaps one of the most novel uses of data pieces together the wisdom of the crowd. In particular, Internet search terms are an amazing guide to all sorts of phenomena we care about, including public opinion on politics and policies, investment interests, and even trends in infectious disease.
What kind of information are people searching for? What are the questions to which they seek answers? One can of course look at broad trends in search engine search terms across countries, something similar to looking at words and topics that are “trending” on Twitter, but one can also look for more specific information. How many people in the U.S., Europe, or Asia look for information about Rwanda, for example? What kind of information do they look for? Google Insights for Search can help answer these kinds of questions, and reveal interests from potential investors, tourists, and others that can be useful to the local business community, government, civil society, and individuals.
If you look at the most frequent search terms related to “Rwanda” used by those living in the United States, France, or even China, you’ll find that most are related to the genocide or the movie, Hotel Rwanda. Within the U.S., searches for “Rwanda genocide” spike every April and May, although the spikes are becoming smaller over time. This is some indication that while the world still heavily associates Rwanda with genocide, this association is becoming weaker with time. Searches for “Rwanda safari” or “Rwanda gorillas” increased greatly in 2005 and 2007 respectively, and most of these searches came from individuals living in the United States or the UK.
Meanwhile, searches about Rwanda in the East African region show a very different pattern. The top three search terms about Rwanda from those living in Uganda and Kenya are all related to jobs, and primarily come from three cities, Kampala, Nairobi, and Mombasa. Meanwhile, searches from within Rwanda about Uganda focused on news outlets, such as the Daily Monitor, New Vision, and “news Uganda” more generally. The most common searches in Rwanda about Kenya include Kenya Airways, the Daily Nation, and Kenyan universities.
Understanding search trends can be useful for businesses and entrepreneurs, but they are also a cheap and easy way to do public opinion polling. In the U.S., search trends of the past couple of months have tended to mirror official polling trends for presidential candidates in the Republican party, for example. If you look over time, you can see the rollercoaster levels of support for candidates such as Rick Perry, Mitt Romney, Herman Cain, and Newt Gingrich. In the U.S., regular and nationally representative polls are conducted throughout the campaign period, but the more informal “search” polling can be very informative as well, and far less expensive.
One challenge for using this type of data in countries like Rwanda and Uganda is that relatively few people are online, although the number of internet users is growing by the day. In Rwanda, approximately 13 percent of people accessed the Internet in 2010, up from 7.7 percent in 2009, according to the International Telecommunication Union. More and more people are using their mobile phones, rather than computers, to access the Internet, which makes it easier to get online. Although there may not be enough people using Google to get a good measure of public opinion in Rwanda, this will very likely be possible in the not-too-distant future.
Already, one can observe trends in public interest in politicians among those living in capital cities. Searches for “Besigye”, Ugandan President Yoweri Museveni’s archrival, spiked within Kampala in November 2005, a few months prior to the heated 2006 presidential election, and spiked again to a lesser degree in February 2011, during the most recent election. It appears there was much more interest in Kizza Besigye leading up to the 2006 election (even with considerably fewer people online) than during the time leading up to the most recent elections, a trend which was reflected in Besigye’s support on election day as well. Online searches for Besigye spiked again in April, during the Walk-to-Work protests, but unfortunately for the repeat presidential candidate, by then the election had already passed. Despite the limited connectivity of the population living in Uganda, general election trends were evident in people’s online behavior.
Finally, search terms can be useful for tracking trends in infectious disease. When people fall sick, they often turn to the Internet for information about their symptoms or illness. Tracking search terms can thus identify and follow outbreaks of particular types of illnesses. Google Flu, for example, uses data on search terms to estimate trends in the spread of the flu virus. Again, their data is best for countries in which the majority of the population has access to the Internet, but as Internet connectivity increases in countries like Rwanda and Uganda, crowd-sourced data on infectious disease may help health officials identify and address outbreaks.
The wisdom of the crowd has for long eluded policymakers, investors, and even public health experts because it is costly to collect information from a large number of people, and people often have incentives to misrepresent their interests and beliefs. Using search trends, however, as one measure of people’s interests, opinions, and concerns, is one way to crowd-source information gathering in a relatively inexpensive and expedient manner.
As I finished reading Ted Kennedy‘s True Compass in the early hours of the morning, I also poured over the hundreds of tweets and articles about the passing of the Kenyan environmentalist and Nobel Peace Prize winner, Wangari Maathai. Both battled cancer, and both, through their life’s work and struggle, have provided inspiration to millions. As a new day, a new week, and a new quarter begins, I want to keep in mind some of the lessons, hopes, and challenges they have shared.
This is the greatest lesson a child can learn. It is the greatest lesson anyone can learn. It is the greatest lesson I have learned: if you persevere, stick with it, work at it, you have a real opportunity to achieve something. Sure, there will be storms along the way. And you might not reach your goal right away. But if you do your best and keep a true compass, you’ll get there.
The revolution I propose requires the development of policies that work for the benefit of all citizens rather than the advantage of a few. It necessitates standing up to international interests that seek access to the considerable natural resources with which Africa is blessed for less than their fair market value. It entails implementing decisions that encourage the dynamism and entrepreneurship of African peoples, protecting them from unfair competition, and nurturing economies that add value to the commodities that the rest of the world desires so much…Perhaps the most important quality that the African leadership needs to embrace, and which is desperately lacking across the continent, is a sense of service to their people.
The grand ceremony to usher in Kenya’s new constitution, the result of the August 4 referendum, is taking place at this very moment. Live text of the ceremony from the Daily Nation here. NTV Kenya and NTV Uganda are airing the footage live. In attendance are former president of Kenya Daniel arap Moi, former president of Ghana John Kufuor, former president of Nigeria Olesegun Obasanjo, former president of Tanzania Benjamin Mkapa, former Secretary General of the UN Kofi Annan, Sudanese president Omar al-Bashir (ICC warrant notwithstanding), president of the Comoros, Rwandan president Paul Kagame, Tanzanian president Jakaya Kikwete, Ugandan president Yoweri Museveni and others continue arriving…
Unsurprisingly, the ICC is less than thrilled about Bashir’s appearance in Nairobi, and Kenya’s subsequent failure to arrest him, as per their obligations as signatories of the Rome Statute. But really, what did they expect after the AU chairman’s condemnation of the arrest at the July Summit?
I’m off to Busia, Kenya, for the weekend to visit great friend who is working at IPA this summer. Updates to come! I’m hoping to get some insight into how the common market is working so far at that busy border post.
Below is the last column Dr. Tajudeen Abdul-Raheem wrote for the Daily Monitor, which he had written last week before a car accident took his life on May 25, 2009.
Govts discourage enterprise and penalise those fighting poverty
The irony of Africa being a very rich continent but Africans being some of the poorest peoples in the world is no longer lost to anyone. While we can argue about the historical, structural, attitudinal, personal and institutional causes of this state of affairs, the fact remains that majority of our peoples remain in need amidst plenty.
Decades of aid, humanitarian intervention, prayers, activism, development plans, action plans, government declarations and so many other initiatives have not produced fundamental change for the poorest and weakest sections of our societies. Yet Africans remain one of the most optimistic peoples, perpetually believing that tomorrow will be better. It is always a miracle how majority of the poor, whether in our urban slums or impoverished rural areas, survive.
Our cities’ overburdened road infrastructures have spurned entrepreneurship in the form of shops on roads and legs meandering between armies of pedestrians and impatient vehicle drivers frustrated at the gridlock traffic. Similarly informal settlements have developed, several times the size of our capital cities with little or no infrastructures. Some of them like Kibera Slum in Nairobi are even becoming ‘famous’ globally for poverty tourism. Unfortunately, it is not the impoverished peoples in these settlements who are even the beneficiaries of their own poverty.
The majority of Africans continue to survive not because of government but in spite of governments. They eke out a living to keep body and soul together, provide for their families, doing all kinds of dirty work with little pay or selling anything that is buyable; hawking all kinds of household wares, fruits, vegetables and myriad of consumer items.
The concept of informal settlements in Africa is not just about where people live but extends to informal markets in all kinds of goods and services.
As the son of a hardworking woman who was a ‘petty trader’, I confess to a bias in favour of these small entrepreneurs who do not depend on any connections with government officials, politicians and big business influence. You go to many neighbourhoods rich or poor and you will find these largely female entrepreneurs, selling food to those working on construction sites, cheap vegetables to other poor members of the society from their baskets, trays or single tables at the corners of roads and streets.
So living in Kenya, a settler, apartheid type state in all but name, I find myself in solidarity with ‘Mama Mboga’. These are women who sell vegetables from their trays, or traditional load carriers tied to their heads, carried on their backs.
From Mama Mboga selling daily perishable vegetables, the ambition is to own a kiosk where you can have storage for more goods , stock more, put a fridge and freezer that can preserve perishable items. When Mama Mboga becomes a kiosk owner, it is a personal triumph of hope over adversity- a long journey from grinding poverty to bearable survival and foundations for permanent exit from poverty. The bigger the kiosk and the better stocked it is, the further away the owner is from poverty. Government policy is threatening the survival of the Mama Mbogas across this continent. In the name of ridding cities of illegal constructions, returning to the original city plans and ‘beautifying’ our cities, city councils and central governments are creating more poverty. Of what use is a ‘beautiful city’ inhabited by people who have lost their livelihoods? Would they appreciate the beauty?
The Mama Mbogas are on the street and in kiosks because they cannot afford the malls and most of their clientele cannot afford the price in the malls.
Our elite are embarrassed by the mass poverty that surrounds us but they are unwilling to provide leadership and appropriate policies to take our peoples to prosperity. Instead they engage in avoidance and denial mechanisms to pretend to visitors that ‘everything is okay’.
That’s why they rid our capitals of beggars, hawkers, and other undesirables before any major ‘international’ conference, but out of sight is not out of mind for the Mama/Baba Mbogas in our midst. You can pull down their kiosks and destroy their tables but they will come back with new tables, under umbrellas and their clientele will know where to find them. By no means are there clients all wretched of the earth. I still call my favourite Mama Mboga, Mama Sarah, or her husband , Martin, to send me top up cards from wherever Nairobi City Council have forced them to.
I just finished (finally) reading Michela Wrong’s latest book, It’s Our Turn to Eat: The Story of a Kenyan Whistle Blower. I’m not going to review the book, per se, but I do recommend it to anyone interested in East African politics, corruption, foreign aid, diplomacy, etc. More than anything, it has made me think more deeply about this problem we have called corruption.
What has really been bothering me of late is that it seems for too many people, corruption isn’t a problem. Wrong quotes a journalist saying of Kenya, “Steal a mobile in this country and you get lynched, steal $100 million and you get to run as MP”. This is also true, to some degree, in Uganda. You can easily be killed for stealing a chicken, but steal from the Global Fund and…um…well, you can just sit tight in your Bugolobi or Kololo mansion. Yes, people talk — some of them, for a while…but ultimately the story dies and the big shots soldier on. The media picks up on the next big story, perhaps even a fire or collapsing building that is actually the consequence of corruption, and the previous story is forgotten. Corruption is like a mosquito buzzing around your bed at night — bothersome, but not annoying enough to make you get up and squash, so you roll over and keep sleeping. Which is too bad, since you may very well fall ill with malaria as a result of your inaction.
Ok, maybe that’s a lame analogy, but you get the point. If corruption is not seen as a “problem” to those it affects the most, how can we ever end it? Like malaria actually. Why do you think people have used mosquito nets as fishing nets and for bridal gowns instead of using them to prevent malaria? Clearly how one uses a mosquito net is a conscious choice, and people are responding to incentives in deciding how best to use a net (which they are sometimes given for free). Reducing the prevalence of malaria, like reducing corruption, will not happen by shoving solutions down people’s throats, and it may even make the problem worse (as Andrew Mwenda will argue has occurred with anti-corruption agencies in Uganda, such as the IGG). We need to start thinking differently about how corruption works and thrives in different environments. I do not think there is a one-size-fits-all solution.
I will conclude with one of my favorite bits from Wrong’s book, in the Epilogue, page 327:
One of the many lessons of John Githongo’s story is that the key to fighting graft in Africa does not lie in fresh legislation or new institutions. To use the seemingly counter-intuitive phrase of Danny Kaufmann, expert on sleaze: ‘You don’t fight corruption by fighting corruption.’ Most African states already have the gamut of tools required to do the job. A Prevention of Corruption Act has actually been on the Kenyan statute book since 1956. ‘You don’t need any more bodies, you don’t need any more laws, you just need good people and the will,’ says Hussein Were. In Kenya, as in many other countries, the KACC [Kenya Anti-Corruption Commission] is part of the grand corrupters’ game, providing them with another bureaucratic wall behind which to shield, another scapegoat to blame for lack of progress. Rather than dreaming up sexy-sounding short cuts, donors should be pouring their money into the boring old institutions African regimes have deliberately starved of cash over the years: the police force, judicial system and civil service.
See Wrong’s interview with Transparency International here.
As the saying goes, when Kenya sneezes, Uganda catches a cold. So what happens to Uganda when Kenya has a fever? That frightening scenario is now playing out before the eyes of Uganda’s business community. Mr Godfrey Hategyeka, Transport Manager for Katraco Uganda Ltd, was beeped by a mysterious number at 12:30pm on January 31. When he returned the call a stranger answered, a Kenyan who informed him that the Katraco drivers had abandoned three of their trucks in Kericho, just outside of Kisumu, and were running to safety. The trucks were bound for Nakuru to load petrol, but they never made it to their destination. A group of over 200 rioters used petrol bombs to burn the trucks, one of which had a Ugandan licence plate. Right before the trucks were burned, one of the rioters himself called Mr. Hategyeka from the driver’s phone. “Why would you want to burn the trucks?” Hategyeka asked the rioter. “We are aware Museveni supports Kibaki,” the rioter explained, “We have heard that he is sending in troops. For that matter we are going to burn…for us we have to burn the trucks.” Most insurance companies will not cover the losses of Katraco and dozens of other affected companies, since they categorize the damage as the result of war or civil disorder. Transport companies such as Katraco may not even be the hardest hit. Hategyeka estimated his losses to be USh 200-250 million per burnt truck, but Ugandan importers and exporters are facing even greater costs the lack of secure transportation has caused a backlog of containers at the Port of Mombasa. According to Mr Dennis Rukundo, the Operations Manager for a transport company based in Mombasa, traders are allowed 14 days to remove their goods from the port. On the fifteenth day they begin paying demurrage fees — $40 per day for a 20 foot container and $80 per day for a 40 foot container. Rukundo says the Kenyan government waived demurrage fees from December 25, 2007, to January 3, 2008, but if containers were not cleared by the 3rd, traders were required to pay the fee for the days included in the waiver and any additional days. Many traders were unable to remove their goods from the port in January due to the lack of safe transport. While Rukundo says the congestion at the port is improving, as of last week no Ugandan registered vehicles were moving on the road for fear of being attacked and burned. The shortage of transport has also increased the cost. Previously, traders paid $3000 per truck travelling from Mombasa to Kampala. They now pay $3900 per truck and Rukundo says the cost may rise even higher. In addition, some transporters are charging up to $480 per truck in extra surcharges to cover the risk of transport. But if traders think their costs are high now, wait until March comes. Rukundo says the Kenya Revenue Authority is increasing their port fees from $200 to $600 per truck. And that’s not all – traders will have to pay an application fee of $1000 and buy a bond of $3000 before they are even allowed to pay the $600 fee. These fees, however, only apply to trucks carrying transit cargo, not to local trucks, which means Ugandan traders are at a disadvantage. With Kenya’s future uncertain and with rising costs at the Port of Mombasa, will Ugandans take their business to the Port of Dar es Salaam? “We tried,” explained Ssekiito, Chairman of the Kampala City Traders Association (KACITA), “The minimum cost there per container was $4000. It was not practical.” The road from the Port of Dar es Salaam to Kampala is also much longer than from Kenya’s coast, nearly 2000km compared to about 1250km from Mombasa, and can be nearly impassable at times according to Hategyeka. As traders face high costs and risks, Ugandans will no doubt be feeling the pain in their pocketbooks, if they are lucky enough to find the goods they are looking for at all. “If you go to Nakasero market,” says Ssekiito, “you find that some of the stores are empty.” Grain, consumables, and construction materials are all harder to come by and increasing in price. Ssekiito cannot say whether the situation will get better before it gets worse. “All this will depend on the involved stakeholders, the involved politicians. If they are promising good news, the prices will automatically start coming down. Most of the problems we suffer are a result of perception…In a market structure where the forces of demand and supply are dictating the price it is hard for us to say whether they are coming down or up. It all depends on the perception.” In the meantime, traders like Hategyeka and others are growing impatient and seeking the assistance of the government of Uganda. Katraco has appealed to the Ministry of Foreign Affairs for assistance in retrieving its trucks. Yet as of last week, ministry official and Head of East African Affairs, Julius Kagamba, could not guarantee the safe retrieval of the trucks. Hategyeka and others feel the government should be taking more decisive steps to protect Ugandan businesses. As a landlocked country, Uganda is necessarily dependent on its neighbours for the import and export of goods. Unfortunately, the current crisis Ugandan businesses now face appears to be a case of placing too many eggs in one basket – the Northern Corridor. “For some time government has not minded about putting in place infrastructure for the Central Corridor,” says Ssekiito. “We even had a place provided for us at the Port of Dar es Salaam for Uganda particularly, but we didn’t use it because this [Northern Corridor] was shorter…We only forgot that you can’t take things for granted. You need to have options…Every avenue must be developed ahead of time such that we are prepared.” A large part of this abovementioned necessary infrastructure is the road network. According to the Road Agency Formation Unit (RAFU), there are a number of projects underway to widen and improve roads throughout Uganda. Unfortunately, current funding does not allow for roads to be widened to double carriage capacity. In addition, according to Dan Alinange of RAFU, there is no coordinating body orchestrating road construction across countries in the East African community. Kenya’s fever may have subsided in recent weeks, but Ugandan businesses will likely be in their sick beds for some time longer. Perhaps this should be a lesson in the value of preventative care. Immunization – that is, investing now in alternative routes and working together with the larger East African Community to improve infrastructure in the region — may prove far less costly than the inevitable treatment that will be required after the next outbreak of political upheaval.