Mindset of self-gain at expense of growth

By Dr Ian Clarke 

I met an investor from Ireland this week who is involved in a project to mine lithium and carry out processing. 

He has a directive from the President since it is now the policy not to export raw materials but to carry out value addition within Uganda itself. 

The investor has the backing of some serious financial institutions; has acquired the licences; carried out the initial surveys and is now at the stage of detailed geological analysis. 

He has already spent several million dollars, but if the project goes through, he will be spending hundreds of millions. I have noted over the years that if all the potential investment for Uganda were to materialise, Uganda would be a rich country. 

However, I have met many investors who have come with excellent proposals, but many of the projects come to nothing. 

The issues are unexplained delays and frustrations on how things happen here and the investor is not sure if this is due to corruption because some people want kickbacks, or it is just how the system works. 

I know of cases where foreign investors have spent hundreds of thousands of dollars only to walk away because of unexpected obstacles. Sometimes, there are price hikes in land when sellers realise a big project is involved or delays in legal agreements and licences. 

In such cases, there are often middlemen involved who claim they can unplug the blockages. I know investors who have spent a year and many thousands of dollars trying to develop a project for it all to come to nothing. 

Dr Ian Clarke 

The President is very pro-business, and there is often an open door at State House for those who come with a proposal for a big project. While Ugandans tend to think that such foreign investors are given the red carpet and local investors do not get such privileges, I do not believe this is the case. 

In fact, the best projects are often from local investors who already know Uganda. Local investors are unlikely to be taken advantage of by middlemen, and a local investor is in a better position to see things through, since he understands the business environment. 

This week, an agreement has finally been signed with a local investor — the Sarai Group — to develop the Kilembe copper mines, after a Chinese company had failed. 

The company in question already has a track record in Uganda, having invested in Nile Ply, Kinyara Sugar and Hima Cement. They are a Sikh family who have been established in Kenya and Uganda for decades. 

However, there are many projects which are a scam from the start. I met a South African businessman who thought he had just signed a contract to supply millions of hoes to the Government, but the story did not seem to add up in terms of normal government processes and procedures. 

I told him to be careful and he later contacted me to say it was a scam but he managed to get his money back.

Uganda is not only a destination for investment but also for aid projects which provide a significant number of jobs and the cutback from USAID will have knock-on effects in many such projects, making it imperative that all non-governmental organisations (NGO) projects are both accountable and efficient in their use of donor funds. 

However, it is not uncommon to find funds being wasted and scams propagated in the NGO world as well. 

I am involved in one charitable institution where some of the staff have become non-productive and complacent because they believe that the funds will always come. 

But the time for such complacency has ended and people should not think there is an endless gravy train. The same is true of the Parish Development Model where many people believe that, because it is from the Government, it is free money. 

One of the leaders of Operation Wealth Creation told me they had failed to take into account the mindset of Ugandans. 

The biggest problem with corruption is that it becomes a mindset and a cultural norm, so when people see money in any form, whether it is investment, aid money or government grants, they only see the opportunity for personal enrichment and are not really interested in how this money could develop the country. 

If everyone focused on doing what is good for the country, it would also be good for the individual, but we have a mindset of only looking for personal benefit. 

As a result, we lose investment, scams are rife and we squander money which could have developed us all.