Many times Ugandans have humbly asked government to remain frugal in public expenditure? The media and civil society have advised government against public wastage. While government has a spokesperson, the practice to communicate back to the public has been from the usual suspects albeit unconvincingly. My opinion today is premised on the cardinal principle that public accountability is an obligation of leadership and cannot be dismissed as mere irritation from oppositionists. I have watched His Excellence the President making passionate appeals to the International business community to come and invest in Uganda. The government has liberalized the economy spurring competition in particular sectors of the economy with the right national policy mix. The economic reforms have made basic goods available on the market and improved productivity. Peace has been ushered into most parts of the country except northern Uganda and Karamoja. In 22 years of his uninterrupted leadership the balance sheet certainly needs very serious scrutiny if were to move to another level.While the President seems to know what strategic actions to take in improving the economy, his body language is very confusing. 80% of Ugandans are rural based and engaged in agriculture. Coffee which has remained Uganda’s principle export earner at the rate of 21% certainly needs public intervention as a cash crop. And yes, almost a year ago the government signed an agreement with Indian TATA firm to establish an instant coffee plant worth $20m in Jinja. The Indian firm has so far been cautious for some reasons unknown to the public thus decelerating the creation of 150 direct jobs thus impeding the trickle down effect. Our good government has also recently crafted in the Libyans for another plant in Namanve with a capital investment estimated at $25m. Mt.Elgon Coffee also plans to build a coffee roasting plant in Tororo for export to its subsidiary in Denmark. The combined investment of these three projects, if they are established at all, is estimated to add value to 20% of our national coffee produce bringing in a total of $2bn a year into the national economy and create almost 1200 jobs for Ugandans. While these ventures are very juicy in economic terms, the implementation has serious political disincentives just like many others that have disappeared in thin air. It is hard to comprehend why government has not initiated these projects on its own based on their well researched and documented potential in revamping the coffee sector. The TATA project meant for Jinja, a year since the agreement was signed has not taken off yet. The Libyans may also take their time to implement the Namanve project or walk away just like Nile AES power did on Bujagali and other “too-good-to-be” true investors. Remember these kind of projects have the potential to unsettle established actors in the coffee supply chain who are making a kill in the global coffee market at the disadvantage of my grand mother deep in Luwero. The potential for established corporations such as Nescafe to sabotage private investors in such ventures is so high that government cannot ignore economic or industrial espionage in these projects. Uganda being an agro-based economy rightly needs to invest in agro-processing and this seems to be a well understood concept by the political establishment. The question is why rely on the good will of private investors despite the public resources that are squandered on toy-projects with no visible trickledown effect in the economy? 22 years is a long time for one to assume this government has a strong vision on strategic public intervention in the economy like many other smart governments are doing around the world. A private investor whether from India or Europe will do his research before putting his money into this economy. He will look at the taxation regime, the state of the existing public infrastructure that will support his business, cost of establishing business, cost of labor and the entire policy framework. It is a known fact, while the president is begging investors to come and invest in the economy, civil and public servants are engaged in massive abuse of public resources with impunity. The government structure is simply an enormous political octopus eating away all the economic benefits. While the president is begging investors to come and fix his economy, he is approving public expenditures that are indefensible and shocking even to his long-time supporters. The purchase of a brand new luxury Gulf Stream 5 presidential jet at a cost of $45m comes at a time when parliament has just bought 4-wheel drive cars for legislators 98% who have failed to account for the Constituency Development Fund. $45m for the jet alone would put up the two plants in Jinja and Namanve and bring in the net worth we are looking for from private investors. The government could eventually partially privatize these corporations to the private sector to bring the much needed technical managerial resource in such corporations. The president needs to run the country in a more corporate way. Wikipedia defines corporate governance as the set of processes, customs, policies, laws and institutions affecting the way a corporation is directed, administered or controlled. It also includes the relationships among the many stakeholders involved and the goals for which the corporation is governed. The principal stakeholders are the shareholders, management and the board of directors. Other stakeholders include employees, suppliers, customers, banks and other lenders, regulators, the environment and the community at large. Corporate governance tries to reduce or eliminate the principle-agent-problem. It is therefore not enough for the president to assume that over-loaded ($$$$) investors will just come here and dump money in the economy!!!!! As a corporate executive he will have to lead by example to build Uganda’s economic foundation for equitable development for the benefit of all stakeholders.
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