Tom Herriman's Journal
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News and Views
If you like capitalism, you'll love Uganda...

2007-10-25 - If you like capitalism, you’ll love Uganda. Free enterprise seems almost to bubble up out of the ground here, as thousands of unemployed workers try to make a few shillings as peddlers of clothing, toys, all kinds of bric a brac. Some just spread a tarp by the roadside in unofficial market areas, and wait for people to come to them. The peddlers hope to build up enough stake to rent a tiny storefront and stock it with something… anything… sacks of rice and flour which are sold by the pound; nails and cement; copy and fax service. Here in Nansana, the typical business premises are about the size of a one car garage. The typical commercial vehicle is a delivery bicycle, motorbike or mini-van taxi.

Bicycles are the primary delivery vehicle for huge stalks of bananas, 100 bags of charcoal or flour or cement, lumber, Iron gates, whatever you can imagine. These are not the 21 speed, graphite bodied, double shocked, disc brake models we’re used to in the US. These are the mack trucks of bicycles. They have one speed, hand brakes and weigh about 70 pounds. The steel frames are strengthened with welded re-bar. When they are loaded, you can’t ride the bike, so you push it, carefully balancing loads that might stick out six feet on either side. So far I haven’t seen one fall over.

Another bustling business venture is education. There are thousands of private primary and secondary schools all over Kampala and its environs and I’m guessing everyplace else. I talked to one school owner sitting next to me in a taxi who said he started out with three students in one room in his house and now has 100 students and 10 teachers working for him. The school I work at is also a private school. (more about Kisa school later). But it’s basically a business venture mixed in with a strong sense of idealism. The owners, Jimmy and Irene devote their lives to the school, but haven’t yet been able to pay themselves a salary. Their living expenses are paid, and they might make a profit someday, if they can distinguish themselves from the competition which is growing every day.

People struggle mightily to start small businesses because unemployment is very high…over 80% one of the teachers told me. Thousands lost their jobs several years ago when the federal government shifted ideological gears and sold off several big state enterprises, and curtailed funding for public services. Uganda is famous, for example for free primary education. But because of serious under funding the public schools are widely thought to be inferior…fewer than half the students finish and go on to secondary school. That’s a big part of the reason for the growth of private schools. Private higher education is thriving too…with more than 2 dozen (expensive) private colleges and business schools in Kampala. The budget for the world-famous public Makerere University has been so eroded that faculty have not been paid, the on-campus internet service has been turned off, and the government recently ordered the University to borrow money to meet payrolls. Physical maintenance on campus seems to have been indefinitely postponed.

Free enterprise here is unbridled and unfettered, petted and fed, like a prize cow. In fact the government pours billions of shillings into subsidizing certain industries which it hopes will generate jobs and tax revenues. Two years ago the government loaned several billion shillings to an Indian textile industrialist to set up a plant to make clothing for the American market. But last week, they announced they wanted to write-of the loans, because the company wasn’t doing well and couldn’t pay back the money. Altogether the government wants to forgive several billion shillings in bad loans to private companies.