Thursday, May 10, 2012


Financial Independence for Uganda at 50 – Indigenous Banking.

I was fascinated by Joseph Lutwama’s article titled Harnessing People Power to develop Kampala which appeared in the Daily Monitor of 8th May 2012 in the Prosper Magazine. He brought to the fore an interesting concept of retail bonds to help finance big investments that will aggregately foster Uganda’s socio-economic transformation. Two particular facets of his argument stand out that I wish to allude to and build a case for indigenous economic development. One is the simple magic and power of numbers and secondly the notion that investors in Uganda are always thought to be foreign e.g. Americans, Britons and Chinese. Mr. Lutwama highlighted the plight of the traders in Kiseka market that need Ugx 800 billion to develop the market into a world class one but have only managed to raise ugx 75 billion, and thus are still Ugx 165 billion short of at least 30% of the total project cost. We have a lot of opportunities at our disposal that social policy can tap into, to build huge pools of savings to provide investment capital for both large scale projects and Small and Medium Enterprise initiatives.

Uganda has a Civil Service of over 320,000 people with an annual wage bill of Ugx 1.8 trillion. If all the civil service saved 10% of their monthly salary and put these savings in one pool, they would raise Ugx 180 billion in one year! Ugx 180 billion is all that our KACITA traders in Kiseka market need to top up on their Ugx 75 billion to kick start the project and secure long term financing from banks and investment firms. It is clear with minimal saving, civil servants can provide equity or credit to the traders project. Such an initiative would go a long way in creating social and economic linkages between different groups in the country thus fostering nationhood and patriotism too. Ugx 180 billion can be used to start a Civil Servants Bank. All they need is Ugx 25 billion as Bank of Uganda capital requirement and Ugx 55bn to open up bank branches and cover administration costs, and then they have a whole Ugx 100 billion to provide loans and credit to SMEs, traders and farmers. The recently released bank financial statements for 2011 indicated that total net profits earned by Stanbic Bank, DFCU bank and Barclays Bank summed up to slightly over Ugx 180 billion. It is clear financial services sector is lucrative and there is an increasing demand for credit to boost both production and consumerism. Why can’t ordinary Ugandans enjoy these profits and benefits too? One of the facets of the NRM ten point programme was to build a strong and self- sustaining economy. How are we building self-sustaining and independent economy when we are chronically dependent on foreign capital? We need to be cognizant of the fact that foreign capital is taxes and or savings form our foreign peers. Our leaders always find it appropriate to quote the China economic model and the Asian success story but don’t seem to translate this talk into pragmatic framework and social policy to finance investments, boost incomes, and create indigenous ownership of key economic sectors. Our regional partners Kenya have strong local banks that started out as micro-finance institutions e.g. Jamii Bora, K-Rep, Family Bank and Equity Bank. In 2008 Equity Bank bought Uganda Micro Finance Uganda LTD at $25.3 m (Ugx 64 billion), and has now extended to Rwanda and Sudan. If all the 320,000 civil servants had contributed just Ugx 200,000 each, they would have raised the Ugx 64 billion to buy Uganda Micro Finance LTD. With their monthly salaries, savings and deposits, they would be able to grow its cash assets and thus create a huge pool of savings to provide credit to SMEs and individuals.
The Ministry of Finance, Planning and Economic Development in their Annual Economic Performance Report 2010/2011 noted that the potential comparative advantage of cooperative microfinance institutions lies in their low-cost member-based management and governance, their not-for-profit social mission, their additional services apart from savings and loans, and their intermediary role in a local context. The report further notes that Ugandan SACCOs and Micro Finance institutions will have to make major strides in order to make this potential a reality and become sustainable financial institutions. As we celebrate 50 years of Independence, we need framework and policy to tap into the dividends of Uganda’s growing middle class and wage earners to create savings pools to finance investment and socio-economic projects.

Agaba Rugaba

Socio-Political Commentator.



By Joseph Tumwebaze

The constitution of Uganda states that ‘Every effort shall be made to integrate all the peoples of Uganda while at the same time recognising the existence of their ethnic, religious, ideological, political and cultural diversity’.

Chapter 21 (1) states that ‘All persons are equal before and under the law in all spheres of political, economic, social and cultural life and in every other respect and shall enjoy equal protection of the law’.

Chapter 29 (2) further states that ‘Without prejudice to clause (1) of this article, a person shall not be discriminated against on the ground of sex, race, colour, ethnic origin, tribe, birth, creed or religion, social or economic standing, political opinion or disability’ implying that under our constitution, the gay are part and parcel of our society and there is no reason as to why we should discriminate against them.

However, I would like to appreciate that there are two perspectives relevant in such a case; the legal perspective and the moral perspective. I have come to understand that currently, there is no clear law in Uganda that can be used in a litigation case against homosexuality specifically. So, I’ll base my argument, not on a legal perspective, but on a moral perspective. This perspective encompasses our conscience too.

Under this perspective, I will use the guidance of two books namely the Holy Qur’an and the Holy Bible. The Bible in Leviticus 18:22 says ‘’Do not lie with a man as one lies with a woman. That is detestable.’’ Romans 1:27 also says ‘’in the same way, men stopped having natural sex with women and began wanting each other all the time. Men did shameful things with other men, and in their bodies they received the punishment for those wrongs’’ I don’t think this can get any clearer than that! The Bible thus pronounces itself on homosexuality! As for the Holy Qur’an, I have not been able to avail myself a copy, but my Islamic friends could help me here and shed more light about this.

If there is anyone who can quote me a bible verse where homosexuality was practiced in any Bible scene, please let me know. Or if we were to consider our core African value; Does any of our African teachings encourage homosexuality? Did our fore fathers really carry it out? Where did it originate from? Has it been imported from out? Should it really be promoted or discouraged?

While having a conversation with one of the gay activists in Uganda, I asked him how he became gay and he told me that he was born that way and realized it during his Primary School level. I don’t concur with that because I believe feelings and emotions are determined by what we believe and no one is born with a specific attitude towards anything. The attitude anyone has about anything is due to the influence of the surroundings. This may include films, friends, family norms and many more. We only may be born with specific physical attributes that we may not be able to change (though recent technology has proved this otherwise)

Personally, I disagree with David Bahati’s bill because I think it is too harsh and it spells out punishments which I think are too excessive and need some revision. For example rather than a death sentence, I would rather a rehabilitation programme be put in place (i.e if homosexuality acts are finally declared illegal)

I don’t intend to violate anyone’s human rights but I think that however much homosexuality may be legal in some countries, is it morally right?

When someone argues that we should leave what happens in people’s bedrooms to those in that bedroom, does he realize that that is impossible because it will finally be translated onto the streets and even into schools (primary, secondary and even university) where young people may be swayed by immaterial objects and recruited into this vice. If I were to ask, how many of you would accept and encourage your 15 year old child if he/she told you he/she is gay?

More to that, let’s look at the sexual perspective of this; The Bible says sex is existent for pro-creation purposes and not re-creation purposes. Feel free to enlighten me if there is any pro-creation that takes place between homosexuals. The sex between gays even goes against all natural (and biological) laws.

My personal take on homosexuality is that till it is declared illegal by means of a legislation, no one should segregate against them. However, on a moral point of view, I totally discourage this vice and would appreciate it if a rehabilitation programme would be put in place to help the people engaged in it. Killing them (or giving them a life sentence) will not help them reform but will drive the rest of them into hiding thus won’t stop the vice at all. Encouraging them to come out, giving them a welcoming atmosphere and accepting them into the society as measures are being put in place to try to revert their sexualities would be much more welcome. In the fight against STD’s, monitoring their actions would help in curbing the spread of this disease.

@jobaze (on twitter)