Poverty, poverty everywhere! The way out!

SIR— One big problem affecting this county is poverty. People are very poor, some extremely poor. Poverty is now an economic, social and even political problem. This is why perhaps next to AIDS, poverty has the highest number of NGOs.One misconception by NGOs, the Government and donors interested in the poverty problem is the false belief that lack of capital to start projects, expand businesses and create jobs is the biggest cause of poverty in Uganda. This is why the Entandikwa scheme was started alongside numerous micro-finance institutions. Years down the road, people are still poverty-stricken.Lack of capital is only part of the bigger problem. Its availability has not and may not, in the foreseeable future, solve the poverty crisis considering the dismally small amounts available to each individual or groups, let alone the high interest rates.Many individual and groups who receive these funds default on repayment and the would-be revolving fund collapses. One of the causes of the collapse of the businesses that are started or expanded by the Entandikwa funds is that they fail to survive the vagaries of the open market. Even foreign investors with billions in funds are so scared of the uncertainties of the market that they often receive incentives in form of tax holidays and other benefits to survive during their infancy. How then can an individual who receives less than one million Uganda shillings survive?The problem is compounded by the fact that the areas of possible investment with such meagre funds are so limited that almost invariably, they invest in the same projects like brick-making, zero-grazing, bee-keeping, poultry, piggery and retail shops. In the process they start competition amongst themselves and kill their own businesses.Just like the AGOA initiative which wants to help Africa through markets, the way to help Entandikwa recipients out of poverty is through a concerted government effort to help the small-scale producers access the internal markets for goods and services. The Government, through its departments, institutions and ministries, can help marginalised groups or even regions access internal markets.At present, only large-scale capitalists are facilitated to monopolise the internal and external markets, leaving nothing for the small, poverty-stricken peasants. Without accessing these markets, the Government will continue to lose the loaned money that ends up in stockpiles of unsold goods and undelivered services.Take an example. Kawempe Division, Kampala, recently received Entandikwa money which the recipients will most likely use in the few areas mentioned above. Within the same Kawempe, there is a government institution — Makerere University. Suppose Makerere University as a market was allocated to the recipients of Entandikwa in Kawempe, so that they can engage in poultry and supply eggs to Makerere. With such a “tender” available for, say two years, within this period, they would supply over 2.1 million eggs worth about sh194m out of which about sh28m would be their profit. They would repay the loan which would then revolve to another group, say in Nakawa.The current supplier would definitely complain but the benefits would have gone to more people than concentrating all that revenue in the hands of one investor who in most cases is so well funded that he uses more machines than human beings hence increasing the already bad unemployment. After all, these individuals are capable of venturing onto the “street” markets and sell through the supermarkets, private hotels, schools, etc. The farmer recipients of such money should be helped also into “contract production” and say village A grows food for school B. This can only be done if the approach changes from poverty eradication to wealth sharing. Herbert MutumbaKampalaends