Kampala captains of industry show the way forward

Friday May 15 2020


A low-cost ventilator developed by Kiira Motors Corporation (KMC) and the School of Public Health at Makerere University. PHOTO | KMC 

By The EastAfrican

Uganda’s business leaders are regrouping during the Covid-19 crisis to claim a central role in shaping the country’s future. It is a skilful but daring grab at what has been and still is the preserve of politicians.

Traditionally political, social, cultural and even religious leaders wait for the president to show the way. Even opposition politicians rarely have an agenda beyond resisting the Executive’s moves. But this time when the coronavirus struck, an important group, the captains of business, differed.

The last time they had a united front was mid-90s when they staged a spirited resistance to introduction of Value Added Tax. The then-new and clumsy Uganda Revenue Authority had not managed to conduct effective sensitization.

Museveni skilfully managed a peaceful resolution and managed to keep the new tax regime. This time, the business leaders rose and falling just short of proclaiming a new economic order, spelt out how things should be done henceforth. And the state is nodding. Where did they get the boldness?

Two things have made this possible. First, the many business groupings and agencies that usually operate disjointedly, with minimal impact, recently united under the Private Sector Foundation of Uganda (PSFU). These groups range from the statutory agencies to angry activists like Kampala City Traders Association.

Sudden death


Secondly, with confidence, they now have a strong voice backed by numbers and unity, PSFU leveraged the knowledge–call it intelligence–that the innermost core of the state was worried about the country’s economic stability and ready to listen to serious partners.

PSFU’s thrust is to boost the country’s productive capacity by using the old independence era strategy of import substitution. They found willing ears as imports are hardly coming in under lockdown anyway. But even more scary, the first economic casualty of Covid-19 is tourism.

With an annual import bill of $7billion against foreign earnings of only $3billion, the sudden death of tourism that has been responsible for half of the inflows alongside remittances by our migrant workers could not be taken lightly.

The new economic warriors’ front, led by PSFU but having in their ranks fervent governmental supporters like Trade Minister Amelia Kyambadde, the National Information Technology Authority, professional bodies like the Uganda Broadcasters Association, financial sector players including South African banking giant Stanbic and academia started the week by pulling off a two-day e-conference on the post-Covid economy.

President Museveni addressed the conference, and did not differ from their proposals. He even sold his new distinction between the ‘real’ economy of agriculture and manufacturing and ‘leisure’ non-critical sectors like tourism.

One of the early outcomes of the emerging national economic consensus is the decision by the government to re-capitalise the (parastatal) Uganda Development Bank to provide loans minimal interest to locals investing in ‘value addition’ ventures (another Independence-era obsession undergoing revival).

Sterilisers, ventilators

The optimism of post-Covid economic boom is buoyed by the demonstrated capacity with local technology and enterprise already risen to the import substitution occasion at such at such short notice. Within a month of the Covid lockdown, several local chemical industries had started manufacturing quality sterilisers, earning teetotaller Museveni’s applause for finally finding “a useful application to alcohol”.

Even more impressive was the designing and testing of ventilators – the artificial “lungs’ that enable patients under intensive care to breathe.

The development found the entire country with only 50 million ventilators — one per million citizens. This would amount to nothing in case of a major outbreak with thousands of people requiring assisted breathing.

The adapted ventilator developed by Ugandan engineers and medics costs less than a tenth of the $25,000 world market price.

Bullish over the hitherto impressive medical performance that has seen almost 100 per cent recovery of all Covid-19 patients in the country and no deaths, PSFU chairman Dr Elly Karuhanga is pushing for making Uganda a top health destination.

This is a time when most people are expected to prioritise health expenditure. The economic nationalism during the conference reached fever pitch when national business education guru Prof Wasswa Balunywa proposed a post-Covid stimulus of putting free fuel in every boda boda’s tank for resuming work.

Great ideas and attractive proposals. But what happens if the Covid-19 threat ebbs and the sense of urgency dissipates? The president has been preaching the same gospel as PSFU for long, but not managing to pull his bureaucrats along.

Infused with the profit motive of Museveni’s energised allies—private sector operators—the momentum might remain high long enough for some of its gains to be irreversible.