By Aggrey Nshekanabo
It has been a hectic 2 weeks and so have been missing on these pages. In the two weeks, a lot has happened and possibly may play catch up.
But, let us look back 11 years ago. At the advent of the Economic Downturn between 2007 and capping in 2009, as a business reporter then, I had the privilege of being at the opening of Bank of Baroda’s branch opening in Kawempe.
The Bank of Uganda Governor had the audacity to say that Uganda will not be affected by the meltdown since Uganda’s trade with the rest of the world was so insignificant. I knew from then on that this guy was a joker. I put it to him that actually, since Uganda produces nothing for itself other than merchandising, we will actually pay the ultimate price.
At a news conference at the media centre, the then member of Private Sector Foundation, Mr. Patrick Bitature echoed the same; that Uganda would not be affected by the global financial meltdown. I was at a loss and my trust in these guys went down. Why, because earlier on, our start up newspaper had folded. Uganda was importing newsprint and ink from South Africa.
The cost of paper increased by 30%, ink by close to 70%. Yet we couldn’t increase the cover price of 500/= to at least 700/=. At the time, online publishing was untenable; it was obscenely expensive and exclusive. The proliferation of smartphones was at base really.
And these money merchants were here telling the world, Uganda would not be affected.
I went my way and wrote my stories thst cast a doubt on their expertise and two years later, I was proven right.
The shilling lost value each passing day and I indicated that it will never go back to 3600/= against the dollar. Result, I won the Kikonyogo Capita Markets Award. Not that I was writing to win an award, it was because, I saw things from my personal experiences and social approach to markets.
Enter Corona virus. Just as the money market then which tumbled in the US first and spread across the globe, there has been a tilt to Asia and China in particular. That is how influential China is. Once it “sneezes, we all catch the cold” to paraphrase a historical assertion. After all, it is the second largest economy or rather super power after the US. But it also demonstrates how interconnected the world has become. But also, this virus is an equalizer. It has not been Africanised like Ebola, Marburg or HIV.
It has been noted that better sanitation is one sure way of managing and controlling its spread. Now we know that Europeans and Americans are not as clean as they have been flaunting. They have been favoured by the temperate climate now the viruses and bacterias have mutated and done a reversal. Coronavirus wants cold places and the tropics are safe for now. Summer season is not far. That is where hope lies.
See, who ever downplayed China’s world influence will be shocked to the marrow. China is the manufacturer of the world. Without China, every household will cry. Look at your household, 99% of the things you use are China-made. In the next two months, if this virus is not contained, the world will come on its knees!
In regard to my pet business, tourism, at Kyambura Safaris, we already have two cancellations. We had a group from the UK and a couple from the US. They have written to us indicating their travel is in the “non-essential” category. Now, the tourism chain has about 10 people in 10 sub sectors that directly benefit from just one tourist.
1. The taxman but morr directly the $50 paid for the tourist visa.
2. The transporter/driver.
3. The fuel merchant.
4. The food merchant.
5. The hotel.
6. The electricity agency
7. The water agency
8. The service teams
9. The Wildlife Agency
10. The banking merchants.
Now, a low range tourist spends at least 2000 and Uganda earns about $1.5M per annum from less than 400,000 real international tourists of which less than 90,000 end up in our 10 National Parks and 12 Game Reserves. We will definitely record a deficit of not less than 20% on the income targets by URA.
That is at macro level. How about at my and your level. There will be reduced shopping. Food prices will rise and all other essential commodities. If you have not stocked dry foods, this is the time. This is not the time to have a treat, it is a time of essentialism. This is the time for the city dwellers to go back to guerilla gardens otherwise known as the kitchen gardens.
These gardens saved Cuba when it was isolated by the US. Uganda is a net food importer. It means, we cannot grow enough food to feed our people and therefore, we have to import the food such as rice, all the macaroni, all the bakong flour and beacon or even baked beans etc. It is time to be inwardooking and invest strategically in actual food production. Otherwise, we will experience what is called imported inflation.
Finally, when all is done and a vaccine is found, 70% of the businesses, will have collapsed but also African states will have known the essence of developing their economies other than soothing external “investments” that are bent on capital repatriation.
For the tourism sector, it will be a time to sell our products to the local populace. There is no tourism sector world over that is sustained by foreigners. We need to brand our destinations for the local market for Sustainability. So long.
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