Skip to main content

OIL IS COMING BUT LET US NOT FORGET OUR GOLD


The country is operating on a time table that first oil will be seen in 2020.

There is a lot of frenetic activity around building supporting infrastructure, getting investment approvals, ensuring local participation and any number of other things to ensure readiness the moment the oil starts gushing down the pipeline to the coast.

And so we should.

I was intrigued the other day to read in the Kenyan press how Kisumu County, just across Lake Victoria from us, has set upon an ambitious project to ensure egg and poultry meat self-sufficiency for the county within the next few years.

Under the plan Kisumu County will train 100 farmers every month over the 12 month pilot period. The intended aim is to be able to satisfy the county’s demand for 25,000 broilers and 75,000 eggs daily.

Whereas I would prefer that this was private sector driven deal, I like this plan for a number of reasons not least of all that it shows leadership by the county and secondly, it relies on locally sourced materials and thirdly, that the production of such volumes can very well set up Kisumu, over time,  as a hub for all that is poultry.

And for Uganda an agricultural initiative like this would suit as to a tee, as we are ideally suited for agriculture with nearly half the region’s arable land here and a fifth of the land under a water, it does not take a rocket scientist to see our competitive advantage staring us in the eye.

We can borrow a leaf from them.

What if we trained 1,200 farmers for poultry in Busoga another 500 in Masaka for goats, 500 farmers for mangoes and oranges in eastern Uganda and any number of agricultural products from around the country.

Some attempts are underway in that direction, but we need to be a bit more systematic and include the private sector more fundamentally to ensure sustainability of the project.

I propose we rethink our current model and go beyond just supplying farmers with inputs to organising, educating and facilitating them to penetrate established and new markets.

I have no doubt that our farmers are not productive for lack of application or good lands but because they do not know what to do.

We are still using the hoe to till the land and even there according to agriculture ministry statistics we do not have enough hoes in the country.  Our farmer is seeing his sweat disappear in post-harvest losses, which can be as high as half the crop. And our farmers because of the measly amounts they produce have little to no bargaining power in the market, losing more value to middlemen and the general market.

It is no wonder they continue to wallow in poverty despite the general growth in the economy over the last few decades.

It is a linear logic: Our farmers need to produce more and lose less during postharvest as a way to enhance their bargaining power in the market.

And another important outcome of increasing our farmer productivity is that it will form a good foundation for a robust agroindustry.

A cursory search on the internet for a tomato paste making plant indicate that you can get one for between $10,000 (sh36m) and $600,000 (sh2.2b). Not out of this world numbers. The catch is the capacity. The smaller one can manage a load of a ton of tomatoes an hour!

I also discovered that in 2007 Uganda produced 14,000 tons of tomatoes, most of which went to our own kitchens. But let us assume we converted all our tomatoes into tomato paste, using 50 small plants (one for every two districts) we would go through Uganda’s annual crop in under two weeks.

To keep the plants working at at least 50 percent capacity all year around, we need to produce at least 12-times as much tomato as in 2007.

It is within the realm of possibility. We have the manpower. We have the land. We even have the capital.

And that is only for tomatos. The same principles can be applied to matoke, coffee, fruits, vegetables, goats.

There are issues of markets, as markets will not just lap up all you produce, but if we can begin to ramp up production we can address the other impediments as we go along.  That’s how you do business. I should know.

(FEBRUARY 2018)

Comments

Popular posts from this blog

GIVE OUR TRAFFIC POLICE A CHANCE

Last week during an investor interaction   Kampala Capital City Authority (KCCA) officials called on police to stop overriding traffic lights while directing traffic. KCCA argues that the traffic lights are large investment and it makes no sense for police to countermand them. In a classic case of “The importance of the river was not known till it dried up” on Friday the traffic police desisted from directing cars at the traffic lights leading to the worst traffic snarl-up in the city’s history. People were stuck in traffic jams around the city for hours and long into the night. Maybe it was the unhappy coincidence of the traditional Friday traffic and pre-Christmas excitement but without the traffic police directing traffic it was a mess. They made their point. It of course points to the bigger issue of a revamping of Kampala’s road network, which has remained   largely the same since independence but with an exponential increase in cars in the last three...

OIL: WE NEED TO GET OUR ACT TOGETHER… YESTERDAY

(Published February, 2017) We are on the cusp of an important period in the history of this country and whether we can derive maximum advantage from this will depend on our capacity to put aside petty rivalries and come together as the business community. Over the next three years at least $20b or almost the size of the entire economy will be spent in readying us for first oil. This money will be spent on building infrastructure in the oil bearing areas of western Uganda, on our side of the oil pipeline to the Tanzanian port of Tanga, on the oil refinery and any number of things that will be needed to support oil production. About $3b (sh11trillion) was spent during the exploration phase of which less than three in every ten shillings   or about sh3trillion went to local contractors and suppliers. But this happened over eight years. This despite our local disorganisation and ignorance of the industry and its dynamics. However we should not be content with t...

OUR WOMEN AMONG THE BEST ENTREPRENEURS BUT…

A study carried out in 57 countries around the world established that Ugandan women are among the most entrepreneurial in the world. The 2018 Mastercard Index of Women’s Entrepreneurship released last week showed that one in three businesses or 33.8 percent of businesses in this country belong to women. Our women were third behind their counterparts in Ghana, 44.4 percent and Russia, 34.6 percent. Survey after survey has shown that Uganda is one of the most entrepreneurial counties in the world, so it should come as little surprise that our women are among the most entrepreneurial in the world.  This does not in any way take away from their own initiative and resilience in surviving our competitive business environment. Our entrepreneurialism was forced upon us by the hard times we faced as a nation in the 1970s and 1980s, when few if any salaries could carry families through the month. For the majority of us who did not have the option of leaving the country...

LET THE UN BASE SAGA BE A LESSON TO US

I have watched with much interest as the issues of the UN base in Entebbe have played out in recent days. At the beginning of the month it was reported that the UN secretary general Antonio Guterres, had signed off on a new structure, The Global Services Delivery model, that it was suggested would see Uganda losing the Regional Service Center in Entebbe (RCSE) to Nairobi. Under the new model the UN would have three key centers in Hungary, Kenya and Mexico. In response to a letter by President Yoweri Museveni, Guterres assured him that the RCSE would remain in Entebbe. Though some functions will be relocated to Nairobi in the short term, in the middle to long term he sees the role of RCSE expanding and growing in importance. The new development takes effect from 1 st July this year. According to their website the RCSE serves more than 20,000 personnel on the continent, does administration and communications support for thousands more around the world and has an...

UMEME A RECOGNISED SUCCESS BUT …

  Recently the World Bank did a survey of the power utilities on the continent. Of the 39 utilities surveyed only two, in Uganda – Umeme and in Seychelles, were able to cover their operating costs and capital expenditures – maintenance and expansion of the grid. The report went on to point out that only 19 or about half of the surveyed utilities were able to meet their everyday costs like salaries. Essentially most of our power utilities on the continent are technically bankrupt. This has far reaching ramifications for the industry as a whole. When you, the client, pays your bill, Umeme then passes money up the line to pay the transmission and generation companies. If Umeme does not collect the revenues due to it or does not price the power at an appropriate rate, the pain will be felt up and down the sector. The transmission company would not be able to maintain and extend its network and the generation company would not be able to generate efficiently or build ...

SOROTI FRUIT FACTORY, A POTENTIAL GAME CHANGER FOR EASTERN UGANDA

On the weekend President Yoweri Museveni commissioned the Soroti Fruit Factory, which promises to change the fortunes of fruit farmers in the Teso region. "According to reports, the factory can process 129,000 tons of fruit annually or the equivalent of 3,225 trailer loads of fruit. There are 8.2 million fruit trees in the region, if each tree produces 80kg, the 656,000 tonnes resultant production will be more than sufficient to keep the factory running well into the future. Upgrades of the plant’s capacity is foreseeable very soon.... The factory’s products – packed juices, are to be sold locally and to the region. The Teso Tropical Fruit Farmers’ Co-operative has complained that they have been receiving sh200 a kg for their produce but have seen a doubling of the price to sh500 a kg by the factory. The cooperative is a 20 percent partner in the enterprise. Government through Uganda Development Corporation (UDC) owns the remainder. The factory is a $10.2mln...

HOW TO RECOGNISE A PONZI AND NOT FALL VICTIM

Another Ponzi scheme has come crashing down around the ears of hundreds of “investors”. Unsurprisingly. In its recent reincarnation poor Ugandans were lured into a scheme where they bought computer tablets. This entitled them to a monthly pay off, $100, and a Christmas bonus for their children. In this case the unsuspecting investors -cum -victims were being given a share certificate. Meaning you accept to take the part of the risk in this project. Which was inadvertently reducing their burden of risk and liability for the issuing company. I leave that area to smart lawyers to handle.   As is always the case with these things, it’s not quite clear where the pay-out will come from. A common characteristic of these schemes is that you might get initial payments before you starting missing a few and the stories begin. The promoters of these schemes or scams often use the money from the latest entrants to pay the older “investors” until one of two things happen. Either...