I am not an economist. In fact earlier on, I had hoped to become a philosopher. Or a polemicist. It was reflected in the choice of subjects I made at high school. I had zero interest in economics. Too many graphs and pie charts.
I had failed mathematics. I expected to spend the rest of my time teaching at a university. But things turned out differently. So when I finished school, I went to town to look for a job. For the last 10 years I have been running
a commercial enterprise in one of the most cutthroat market segments in this country. In the process I have learnt a few lessons in economics. The most profound one for me is that any modern entity is only as good as its revenue generation.
It is the lifeblood. Without it, such an entity is unable to finance its existence. This is true of commercial enterprises. It certainly can be said of a country like Uganda. So to put this very simply, the current economic squeeze is because we are not earning our keep.
We are not producing anything of substance that earns us more money than we need to spend. We have for years depended on some meagre coffee exports, a few visitors and some international good Samaritans.
This is a broken model and it cannot feed us. We need a new approach and I have an idea I want to share. In the world market (which is where countries go to sell things out of which they earn a living) of commodities where we have a stall, the most valuable product on sale is oil.
Although we have some deposits of it in the Albert Graben, we are still a long way to commercialising it. In fact there are far too many variables with the oil that are controlled elsewhere. It will be a long wait before we can see the money.
In the meantime, we have to live. Which brings me to our next hope and that is coffee. It is the second most valuable commodity on the world market and growing. This is going to be the case for the foreseeable future. So I want to guess that it is the reason the Government has set an objective to produce and export 20 million bags of coffee in the next four years.
A lot of money is being invested. It is here that I want to suggest an option which I am convinced will most certainly bring us closer to this objective. Just so you get a sense, 20 million bags of coffee can bring in $7.2b.
Such inflows would change the economics of Uganda. How do we get there? In one of the unexpected turns of my career, two years ago, I took on farming with the hope of supplementing my income from work. Once I became aware of its full commercial potential, it has now become an obsession. One in which I have found myself.
But that is a story for another day. I want to suggest that 1,000 educated, gainfully employed (therefore no pressure to live off the farm) Ugandans with access to land be contracted by government to produce 200 tonnes of coffee per year as a side hustle (business).
It can be done on 32 acres of land and be ready for harvest in three years. This will result in three million bags of good grade coffee for export. This should earn Uganda $1.2b.
The other benefit is it will create 100,000 manual jobs for 120 days during each harvest season. Uganda has two coffee seasons. And that is just for the harvest.
I have not said anything about the labour needs of the Uganda’s coffee magic rest of the process. How would this be done? Ask interested Ugandans to apply to UCDA with proof of education, employment and land ownership.
Once the 1,000 have been identified, they should be contracted to work under the direct supervision of UCDA to make sure that they are applying the required agronomy practices that can guarantee a high yield. That harvest handling should adhere to market standards to ensure a good price.
These things require money. Most employed urban types that you need to do this fear to lose the little they have built up. So this is where government intervention comes in.
Set up some funds in Uganda Development Bank to underwrite costs of soil tests, fertilizer, irrigation, pest control and purchase of wet processing equipment. These are the costs that most farmers cut corners to avoid and yet they are crucial to yield and price.
Secure storage is another requirement. If we did this, we can attract some very fine minds into our productive activity.
These people would bring some other good practices like acquiring knowledge and keeping records, they are open to new ways of growing coffee, they understand standards, they can track the market, its requirements and understand positioning, they can negotiate on price and so on. Further down the road, you can be sure
they will try out value addition. Which means we do not have to run around the world looking for investors. We can slowly, with discipline and sacrifice build our own capital base through exports of this nature. If this is
being done by Ugandans, the money will surely come home. This will also help cushion against the erratic production process of smallholder peasants which is vulnerable to many variables like the vagaries of nature.
It will also provide consistency where fluctuations of tourism and unpredictability of foreign investment cannot be relied upon. These two are normally driven by economic mood swings, fickle whims and exaggerated fears that we have no control over.
There are those who argue that we do not have control over price of coffee either. I disagree. Our coffee price problem is self-inflicted by poor yields and low quality.
This is something that our production process can fix. Basically, my point is we need to fix our earnings. Right now our biggest expense is paying debt. In other words, the whole of Uganda is working for other people. We have picked up a huge bill on infrastructure expenditure that we must
pay for. This has been made worse by the fact that there is no local participation in these projects.
All the money has gone out. So that is one point. The other is that we have produced many children over the last 30 years. And still continue to do so. This can only be a good thing, if they have gainful employment and can be a market.
We must create the economic activity to provide for this. Farming in general and coffee in particular offers a powerful opportunity, if we get it right.
The writer is Vision Group MD/CEO