By Nuzulack Dausen

Musoma — Along the shores of Lake Victoria, a young man, Mr Mwita Venance, is lying under a tree at Matvilla Beach after spending hours in the water fishing.

His colleague, Mtatiro Marwa, is busy preparing fish for a quick meal. The Nile perch he is cooking is about 20 centimetres long, and is one of the three fish they caught in the lake after a five-hour expedition.

“The situation is getting worse here,” Venance says. “In the past, it wouldn’t have taken so long to catch just three fish as there were so many in the lake. The illegal fishing is causing the scarcity.”

Venance says three years ago he used to haul between 200 and 300kg of fish each day. Nowadays, the most he catches is just 30kg. Ten times lower than what it used to be in the past.

Lake Victoria, Africa’s largest inland water body, is being over fished largely attributed to the illegal use of restricted nets, dynamite and poison used for catching fish.

Getting mature fish whether Nile perch or tilapia is proving to be more difficult as each day passes by. “We have to paddle at least 50 kms from the shore to deep waters to fish. Yet one returns with a miserable catch. If this situation continues I have no idea know how I will make ends meet,” he lamented.

Illegal fishing has adversely affected the whole supply chain. It is now difficult to get a kilo of fish in Musoma markets below Sh9,000, equivalent to what consumers pay for fish from the lake in Dar es Salaam.

Fish processing industries whether large or small are struggling to cope and a few have closed down in a bid to cut losses.

Prime Catch Exporters Ltd, once the largest fish processing factory in Mara Region halted operations two months ago due to the acute scarcity of fish.

“There was no point in continuing to run below capacity,” Irfan Jessa, Prime Catch Manager told The Citizen. The factory used to employ over 650 people.

According to Lake Victoria Fishing Organisation (LVFO), the regional body for managing fisheries on the lake, the Nile perch stock is declining faster than the other species.

LVFO data shows that between 1999 and 2001 the mean stock of Nile perch was 1.29 million tonnes annually but five years later it was down to 0.82 million tonnes.

While Prime Catch has closed down its main competitor in the region, Musoma Fish Processors Limited (MuFPL) is operating at half capacity.

A senior accountant with the MuFPL, Mr Willbald James, says the daily production capacity is 25 tonnes but due to the scarcity they are currently process only 10 tonnes. “There are times we have to wait for up to three days to get a sufficient supply for production,” he said.

According to a report from the Tanzania Fisheries Research Institute in Mwanza, the export of Nile perch started in May 1991 by Mwanza-based companies.

Principal buyers were Kenyan importers, whose equipment – such as insulated collection trucks, ice, weighing scales and selectors at landing beaches – all came from Kenya.

At this stage, at least ten small companies were involved, all of which exported whole Nile perch to Kenya for further processing and onward export to external markets, primarily Israel.

It was from these early Kenyan buyers and collectors that pioneer Tanzanian buyers learned the trade, and from whom they adopted the techniques used.

These involved the setting up informal credit schemes and incentive systems established with prominent fishers permanently resident on supply beaches.

Buyers would make regular visits to potential fishing spots where they identified fishermen with whom to establish supply arrangements. Beaches such as Mwaloni Kirumba, Kayenze, Igombe and Nyashimo became reliable Nile perch supply points.

It was through this system that dependency relationships were forged between fishers and buyers. Under these arrangements, slight delays by collection trucks represented large losses to fishers.

Since competition was, at this point, very limited, buyers were able to offer extremely low prices.

These early purchasing companies represent the fore-runners of the Nile perch filleting industry in Tanzania. Low levels of expertise and poor knowledge about the international market for fish were some of the factors, which were responsible for the slow development of the sector at that time.

Nevertheless, the establishment of factories occurred and by 1992, there were five filleting factories in Tanzania several of which had been established with Kenyan capital raised by sister companies located north of the border.

Managers within the industry at this time came from a wide diversity of occupations and backgrounds, including cargo and transportation, hotel and manufacturing, marine fish business, a journalist, a publisher, a large bakery, a poultry farmer and a shop owner. Additional expertise was obtained from Kenyan sister factories.

The early nineties, therefore, represented a transition period for the nascent Tanzanian factories during which they consolidated, trained and established their presence on the local Nile perch markets.

Difficulties were also, at this time, being encountered by the institution in charge of regulating this process, the Tanzania Fisheries Department.

Most of the problems that they encountered concerned the failure, by the processing factories, to declare correctly the value of fish exports (under-declaration of exports), failure to pay royalties and the unauthorised export of tilapia. The relations between the Fisheries Department and the fish processing factories were, in the early 1990s, relatively poor.

These difficulties were compounded by the Fisheries Department’s limited knowledge of the growing Nile perch business and the profit maximisation motives driving industrial owners resulting in the neglect of the required procedure and formalities.

Since the early 1990s the fish stock dynamics within Lake Victoria and the ecological changes that have taken place have not been well documented.

With the fish being snatched up faster than it can reproduce, the average length of caught fish tends to decrease, because fewer of them are able to survive into maturity. An audit carried out found that between 2008 and 2010, the number of fish meeting the minimum size criteria at major processing facilities around the lake dropped by more than half.

The main problem, according to the audit, is over fishing and fisheries agencies in the region have been blamed for failing to set and enforce quotas.

The Nile Perch that has dominated the lake for half a century, The predatory Nile perch was introduced into Lake Victoria by British colonial officers to restock the lake in the 1950s.

It’s driven many of the indigenous fish to extinction, earning it a reputation as an ecological disaster. For fishermen, though, it had become a cornerstone of the economy.

The current scarcity is not only affecting large industries but the small players as well. A businessman, Mr Fredrick Mtenga is seriously considering quitting the fish business as supplies have dwindled to 20 kgs per day against 500 kgs he used to sell a few years back.

“Even for the 20 kgs of fish I have to travel to Shirati about 100 kms from here,” says Mr Mtenga who has started a poultry farm in Morogoro.

Mara Regional Administrative Secretary (RAS) Adoh Mapunda says authorities have carried out patrols on the lake in collaboration with fisheries departments.

“District officials around the lake have seized and destroyed more than 3,000 restricted nets,” he said.

Despite the government’s efforts to curb illegal fishing, the alleged criminals are well-coordinated. While the authorities patrol during the day rogue fishermen operate at night. It is widely believed among residents that some security and government officials leak information to the offenders.

A former fisherman, Mr Mujungu Magesa, resident of Baruti in Musoma Municipality said, “There are informers who notify fishermen of impeding raids,”

It is at the end the supply chain of illegal fish, the government has decided to change tactics.

Musoma Municipal DirectorFidelica Myovela says they are discouraging consumers from buying fish less than 50 cm long. “We are currently carrying out patrols at markets to ensure fishmongers are not selling immature fish. We are also arresting buyers,” she says.

Some fishmongers have resorted to selling fish from their homes. To confirm this, the author of this article hired a cab at around 10 pm on November 25 and asked the taxi driver to take him to a place where he could buy fresh fish.

He was driven to four different locations where fishmongers were selling small fish under the fear of being caught.

On arrival he was advised to enquire for a “mzigo” loosely translated to English, a parcel.

To get the right type of mzigo one had to speak the local dialect, preferably Kikurya. The word sang stood for sangara for Nile perch) and sat for sato for tilapia.

The fishmonger would then signal a buyer follow in his or her house and that was how the author got his fish.

Most of the Nile perch he bought about 30 pieces, ranged between 10 to 15 cm, four times smaller than recommended size of 50 cm.

According to the United Nations’ Food and Agriculture Organisation (FAO), Nile perch (Lates niloticus) can be big as the size of a man at 200 cm and weigh 200 kgs.

As a result of the diminishing stock in the lake fish processors have joined hands with the government in discouraging fishermen from supplying immature fish.

Mr James of MuFPL says all fish processors have agreed not to buy fish below 50 cm.

“Authorities should continue monitoring illegal fishing so as to ensure fish processing industries survive because once we close the government will lose more revenues and many more will be jobless,” he said.

“Everyone should find a way of curbing illegal fishing,” Dr Mathias Igulu, a fisheries expert from an international conservation NGO, World Wide Fund for Nature (WWF) said.

“Wananchi should continue rejecting immature fish plus fish they suspect caught by using poisons or dynamite,” he stressed.

The minister of Agriculture, Livestock and Fisheries, Dr Charles Tizeba, says the government understands that most fish industries are feeling the pinch.

He says his ministry has discussed with investors on how to improve the situation. “There are public officials who are colluding with fishermen using illegal means to fish but their days are numbered. We have sacked many workers been found guilty of facilitating illegal fishing,” he said without specifying the number.

He said the government is going to amend the Fisheries Act of 2013 by adding penalties to some offences and categorise other offences as economic sabotage, which attracts tougher penalties. “We have lost a number of cases where people have used dynamite to fish because the present law doesn’t clearly define explosives. We can’t continue this way,” he said.

By Louis Kolumbia

Dar es Salaam — Rights activists yesterday said they would challenge in the Court of Appeal a High Court ruling on the petition that sought to declare the Cybercrimes Act unconstitutional.

In December last year, the High Court overturned only Section 50 of the law as requested by the petitioner, Mr Jebra Kambole, who represented the Tanzania Human Rights Defenders Coalition (THRDC), Legal and Human Rights Center (LHRC) and other groups while declaring the other 19 of the 20 sections of the law constitutional.

Section 50 of the Act, which was enacted by Parliament in 2015, gives the Director of Public Prosecution (DPP) powers to punish a suspect who has voluntarily confessed even before the start of court procedures with subsection 2 saying the DPP’s decision would be final.

The ruling agreed with the petitioner that Section 50 of the law contravened Article 13 of the country’s Constitution, therefore ordering the Attorney General (AG) to amend the section within twelve months.

Yesterday, THRDC coordinator Onesmo Olengurumwa told The Citizen that rights groups were not satisfied with the decision and that they had resolved to appeal anytime this month. He said they would take the matter before the African Court of Human and People’s Rights (ACHPR) in case justice wouldn’t be realised in the Court of Appeal.

“Experience shows that cases involving government interests are being politicised by judicial systems in the country that is why we are preparing to take the matter to the regional and international courts,” he told The Citizen in a telephone interview, referring to the case on independent candidate among those he claimed to have been politicised.

He said, stakeholders had consulted on decision to appeal the High Court decision, saying that will mark the beginning of a long journey in search for justice domestically and internationally.

Mr Kambole said in spite of being unsatisfied with the ruling they considered themselves as winners.

“It’s because we have managed to show the law is unconstitutional in one part, though other demands have been overturned. Under normal circumstances, it takes years to do what we have done to a law assented just a year back,” he said in a telephone interview.

“We are waiting for a ruling on another case on Section 16 of the same law which has been used to try a number of people since its enactment,” he added.

By Athuman Mtulya

Dar es Salaam — Commentators have criticised the government’s response to the now-revoked electricity tariff increase, saying it does nothing to address the dire situation Tanzania Electric Supply Company (Tanesco) is in.

On Friday, the Energy and Water Utilities Regulatory Authority (Ewura) approved an 8.5 per cent increase in electricity charges after rejecting Tanesco’s initial request for an 18.19 per cent rise.

However, the Minister of Energy and Minerals, Prof Sospeter Muhongo, revoked the adjustment on Saturday, saying the ministry was not consulted.

On Sunday, President John Magufuli sacked Tanesco Managing Director Felchesmi Mramba. State House announced the decision in statement, but did not say why Mr Mramba was removed.

However, earlier in the day, Dr Magufuli told a congregation during New Year’s mass in Bukoba that his government had resolved to build an industrial economy and take electricity to villages, adding that “unilaterally” raising power tariffs was unacceptable.

Prof Honest Ngowi of Mzumbe University told The Citizen yesterday that developments of the last three days raised more questions than answers. He said adjustment of power tariffs was nothing new and had been overseen by Ewura since its establishment, adding that the authority was supposed to be an independent entity.

“I believe the same process and procedure was followed this time as well. Tanesco submitted its proposals, public hearings and consultations were conducted, and finally Ewura passed its verdict,” he said, adding, “But then we see the government reacting as if this whole issue was shrouded in secrecy. The question here is, where was the minister all along? Why didn’t the government stop the process at the outset and propose an the alternative to a tariff increase?”

Prof Ngowi said the decision could instil fear in regulators and State-owned firms.

“This has set a bad precedent and regulators might be apprehensive about executing their mandates. This is despite the fact that these authorities are supposed operate independently without political interference.”

Prof Haji Semboja of the University of Dar es Salaam said he fully supported President Magufuli’s goal of providing Tanzanians with affordable electricity, but voiced his concern about what he described as communication shortcomings within the government.

“Adjusting electricity charges is not a process that takes just one day. I believe the Tanesco board approved the matter before it was forwarded to Ewura, and government officials must have been aware of the development. This is why it is shocking to hear the minister say that he wasn’t consulted.”

Prof Semboja added that it was wrong to crucify one person for what essentially was a systemic problem.

“I don’t believe that only one person was involved from the beginning of the process to the very end. The entire system should have communicated and interpreted the President’s vision from the word go…it was a collective failure.”

Prof Ngowi, on the other hand, said reasons that prompted Tanesco to ask for a tariff increase should be addressed.

The two main reasons are increasing operational costs and the need to raise funds for infrastructure investment to attain the government’s goal of providing at least 75 per cent of the population with electricity by 2025.

“The government is supposed to spend heavily on infrastructure projects, but again citizens would feel the pinch because it is thorough taxes that the government gets money,” Prof Ngowi said.

“If you talk to industrialists and businesspeople they will tell you that it is better to pay higher tariffs and have reliable power than be charged less for power that is unreliable.”

He said the Union and Zanzibar governments should pay the Sh125 billion they owe Tanesco in outstanding bills. While the Union government has yet to pay Sh40 billion, Zanzibar owes Tanesco Sh85 billion.

“Can Tanesco by itself recover this colossal sum? How? Does it have the independence that could enable it to do so? Things have to change,” Prof Ngowi added.

Tanesco is also being crippled by the $16.76 million (Sh36.6 billion) monthly bill it pays a handful of independent power producers in capacity charges.

Also under scrutiny was whether the Energy and Minerals minister has powers to overturn decisions made by Ewura.

Prof Muhongo said in his letter to Ewura on Saturday that his actions were in line with the Electricity Act, 2008.

However, Kigoma Urban MP Zitto Kabwe said on social media yesterday that the minister should quote a specific clause giving him such powers.

Both the Electricity Act and Ewura Act give the regulator powers over all issues concerning tariffs, while the minister is essentially an overseer of policy.

However, Section 4 (2) of the Electricity Act bestows powers on the minister to coordinate emergency responses in close coordination with Ewura and Tanesco without being specific as to what constitutes an emergency.

A fierce stampede for fish has ensued among Zimbabweans and Zambians in Lake Kariba, raising the spectre of a diplomatic storm between the two neighbours.

Water and Climate Minister Oppah Muchinguri-Kashiri revealed recently that Zambia had deployed nearly a thousand fishing boats which were encroaching into Zimbabwean territory in violation of the protocol regulating the use of the Kariba Dam by the neighbouring countries

The lake lies between the two former British colonies although Zimbabwe is entitled to a bigger share of the aquatic resource. Kariba is a source of a variety of nutritious fish species with fishing there being employing thousands.

“According to Article 6 of the protocol, fishing effort (number of boats fishing) is to be shared according to the area of the lake which each state holds,” Muchinguri-Kashiri told parliament recently.

“Zimbabwe, which holds 55% of the lake, is entitled to 55% of the total fishing effort (particularly of the kapenta fishery which is a shared stock).

“Currently, Zimbabwe has 460 kapenta fishing boats on the lake and Zambia has 962 boats officially declared. This means the current ratio is 32:68 in Zambia’s favour which is against the protocol agreement.”

Despite the apparent greed by the Zambians, it has emerged, however, that the two countries were, in fact, both violating the protocol on the number of fishing boats plying the dam waters.

According to Muchinguri-Kashiri, a total of 500 boats are required on the lake to have a sustainable fishery.

“With the agreed ration,” she said, “Zimbabwe is to have 275 rigs and Zambia should have 225. The current total is pegged at 1422, meaning there is overcapacity on the lake.”

She added: “… Both countries are supposed to ensure that fishing effort is regulated and pegged at a sustainable level by committing to and abiding by the dictates of the protocol to ensure that the fishery recovers and maximum returns are realised.

“This will result in improved food security status of both nations, particularly for Zimbabwe which gets 90% of its fish protein from Lake Kariba, over 50% of this being from Kapenta fishing.”

Kapeta fish, popularly known as Matemba, are a delicacy in Zimbabwe and keep many families going during hard times.

The agreement regulating the use of the resource is named the Protocol on Economic and Technical Corporation between the Government of the Republic of Zambia and the Government of the Republic of Zimbabwe concerning management and development of fisheries on Lake Kariba and the Trans-boundary Waters of the Zambezi River.

This protocol was jointly established by the governments of the two countries in 1999 setting the agenda for what each country does in the management of fisheries within its jurisdiction.

The management objective of the protocol is to ensure that the yield from its fisheries is ecologically sustainable and economically viable within an equitable framework.

Parliament has approved a half a billion dollar loan for infrastructure construction.

The loans are for five construction projects The financing is coming from foreign sources. The projects mostly focus on upgrading electricity and transportation facilities in the Amhara Regional State and Addis Abeba.

The five projects include: the Addis Abeba High Voltage Network Rehabilitation and Upgrading Project, the Qality to Tulu Dimto and Qality to Qilinto road project, the Hamusit Este road project, the National Load Dispatch Centre construction project, the Addis Abeba Bus Rapid Transit Project and the road project that extends from the Pushkin ring road to Gotera Masalecha.

The first two projects will be funded by loans from the Chinese Export-Import Bank, while the funding for the Hamusite Este Road Project will be provided by the Arab Bank and the OPEC Fund.

The remaining two projects are funded by the French Development Agency. The payment for the loans will each have an average 1.5pc interest rate by each year, and will be paid back within 10 to 20 years. Ethiopia’s external debt grew at an average annual rate of 20.8pc during the first edition of Growth and Transformation Plan. In March 2016, the country’s public debt as a percentage of GDP stood at 55pc.

OPINIONBy Henry D. Egessa

The media has been awash with several reports about the 51.4 kilometer Kampala-Entebbe Expressway being the most expensive road in the world. The reports have been informed by findings of the Committee of Statutory Authorities and State Enterprises (COSASE) which is chaired by Abdu Katuntu, the Member of Parliament for Bugweri County, Iganga District.

I have followed the discussion and investigations on the cost of Kampala-Expressway, with keen interest because I have a stake in the road as a Ugandan and responsible taxpayer. Like all Ugandans, I look out for value in whatever project the government undertakes.

First, it’s important for all of us to accept that the expressway is no ordinary road by not only Ugandan but African standards.

The total cost of the road is a whopping $476million – that’s a huge sum of money. No single road infrastructure in Uganda has cost that amount of money. According to the findings of COSASE, the road is costing Uganda $9.2 million per kilometer over and above the average $2 million per kilometer road.

Going by the media reports quoting COSASE, the road is costing Ugandans more than four times what it should cost. But what the reports are not telling us is what the cost of the lane per kilometer is and this is where the devil lies.

Kampala-Entebbe Expressway is a four lane road while most Ugandan roads are only two lanes. The cost of each Kampala-Entebbe Expressway lane per kilometer is $2.3 million. This means that the four lanes will be $2.3 million multiplied by four hence the $9.2 million per kilometer of the expressway.

It’s worth noting that the Kampala-Entebbe Expressway has 19 fly-overs and bridges with a total length of 2,770 metres. It also hosts Nambigirwa Bridge, the longest four-lane bridge in Uganda and East Africa with over 1,400 metres.

Now, let’s compare the cost of the on-going 15 kilometre Kampala Northern Bypass extension with that of the Kampala-Entebbe Expressway. The total cost of the two-lane road is $87 million (approximately Shs309 billion) -obviously a fraction of the Expressway. However, the cost per kilometer of this road is a whopping $5.8 million! This means that each lane is being constructed at $2.9 million. This road is funded by the European Union through the European Investment Bank while the Expressway is funded by the government of Uganda and China Exim Bank.

From the above analysis, one can easily tell which of the two roads is more expensive to Uganda and perhaps the most expensive in the world.

Another project cost I would like to draw fellow Ugandans to, is the cost of the New Nile Bridge Project. The bridge is slightly over half a kilometer (525 meters) long and it is going to cost the Ugandan tax payer $125 million (approximately Shs444 billion!) My simple maths tells me that if this is a 4-lane bridge, half a kilometer is costing us $59.5 million (Shs211 billion)! While it’s billed to have attractive features that beautify Jinja town, for its length, I believe it’s the most expensive infrastructure project in Uganda.

It can be argued that mixing oranges and mangoes is not appropriate. So the cost of the Jinja Nile Bride shouldn’t be compared to that of the Expressway or Northern Bypass.

So, let’s also look at the planned Kampala Southern Bypass.

How much will it cost Ugandans per kilometer to construct this road? The estimated total cost is $250 million while the cost per lane, per kilometer is about $4 million per lane, per kilometer! This is almost double the cost of the Kampala-Entebbe Expressway. But no one is raising an eyebrow.

Going back to the COSASE report and its recommendations to revisit the cost of the Kampala-Entebbe Expressway, I would say, the committee started its investigations without sufficient information or clear picture about the cost of the road projects Uganda is undertaking. If there’s a project that needs urgent attention before a contract is awarded or work is started, it’s that of the Kampala Southern Bypass. COSASE should launch investigations into this project so that Ugandans don’t end up paying an arm and leg for a road they can get at half the price.

We have been made to believe that the Kampala-Entebbe Expressway is very costly without being given proper explanations. As citizens of this country, we deserve to be told the truth especially by our parliamentarians.

Going by my analysis, I believe the Kampala-Entebbe Expressway is a value for money project and its should be expedited and concluded to avoid the usual Ugandan syndrome of losing millions of dollars through white elephants and endless investigations. On the other hand, COSASE should conduct comprehensive investigations into other key road projects of national interest.

By Mark Keith Muhumuza

Kampala — The interconnectedness of the Uganda Securities Exchange (USE) to the Nairobi Securities Exchange (NSE) has a lot to do with the dismal market performance in 2016.

The market had started the year with a capitalisation of Shs24.5 trillion but by Wednesday December 28, with only two days left to trading, it had fallen to Shs20.3 trillion.

The USE has eight cross-listed firms from the NSE, especially on account of commercial banks in Kenya losing value in their shareholding. Kenya Airways, Jubilee Holdings, Centum Investments, KCB Group, Equity Group, UCHUMI, Nation Media Group and East African Breweries are the eight cross-listed companies.

Cross-listing refers to where company shares are floated on a different stock exchange – in this case, a foreign country – after being listed on the primary stock exchange.

In this case, the eight Kenyan companies are listed on the primary market (NSE) but cross-listed on the secondary market (USE).

These companies do have subsidiaries that do business in Uganda.

Capping interest rates

On August 24, 2016 president Uhuru Kenyatta signed into law a law that allows Kenya to cap interest rates.

The following day, listed Kenyan banks saw the value of their shares tumbled sending the stock markets in Kenya and Uganda down into negative territory.

The cross-listed banks from the NSE, KCB and Equity Bank, saw the value of the shares drop by 20 per cent in just two days.

Because of the market movements on the two counters, the market capitalisation of the USE dropped from Shs22.5 trillion on August 23 and to Shs19.9 trillion by end of September 2. That is about Shs2.6 trillion wiped off in a space of two weeks.

Those banking stocks had not recovered since December 28. Year-on-Year, the Financial Times market data for listed stock indicates that KCB is down 28 per cent whereas Equity Group is down 27 per cent.

That means shareholders have seen the value of the shares they hold in the two companies drop significantly.

When a share price drops, it also impacts the All Share Index (ALSI), which shows the changing average value of the share prices of all companies on a stock exchange, and which is used as a measure of how well a market is performing. The USE’s ALSI was about 1,987 points at the start of 2016 but in the last month, it was an average of 1,486 points. That is a drop of almost 15 per cent. That means that overall; the value of the stock exchange was down 15 per cent in 2016.

Trend from 2015

However, the movements of Equity and KCB can only explain about Shs3 trillion wiped off the USE, leaving the other Shs1.4 trillion to other changes in the market but mostly still on the cross-listed firms. All the eight cross-listed firms have shed their share prices since 2015 and this trend continued into 2016.

According to Business Daily, the bear market trend on the NSE has been due to a combination of several factors.

“Besides the regular boom and bust cycles, the NSE’s bear run has been escalated by recent corporate scandals and the capping of interest rates that erased tens of billions of shillings from banking stocks since August alone,” Business Daily reported on December 16. It notes that at least four Kenyan billionaires had been wiped off billionaire list because of the declining performance of the NSE.

For Uganda, NSSF members are expected to feel the full impact of these movements when the half year report for 2016/17 is released. NSSF has investments in Equity and KCB where the value of shares dropped significantly.

It should be noted that cross-listed stocks hardly traded during the year but their impact was fully felt.

Quiet domestic scene

The USE is finally fully automated but that only helps avoid seeing the rather gloomy faces of traders in their red jackets. The automation means traders do not have to be at USE daily to have their trades written down on a white board. This ended in September 2015 when the market abandoned the white boards and open outcry by licensed brokers.

However, last year has been rather uninspiring for the locally listed Vision Group, Uganda Clays, Stanbic Bank, dfcu, Bank of Baroda Uganda, Umeme, NIC Holdings and British American Tobacco Uganda.

According to Mr Paul Bwiso, the CEO of the USE, the performance of the market is related to what was happening in the rest of the economy. “Investors are always looking out for where to make better returns. The emerging markets and the frontier markets like Uganda have seen investors retreat back to the United States after the Fed decision to raise interest rates in 2015,” he explained when the Umeme trading suspension was lifted in November 2016.

By Issa Yussuf

Zanzibar — With increasing production of vegetables and fruits here, some farmers argue that it is high time to restrict importation of such goods from outside the Islands.

“We ask the government to restrict importation of products like vegetables and fruits because we now produce enough in Zanzibar for sale,” Chairperson of Tunamuomba Mungu Cooperative Society in North Unguja Region, Ms Mwanaumar Dadi Akida, said.

She said that they wanted a sure market and therefore, saw no need to import products such as tomatoes, onions and watermelons because production in the islands now surpassed demand.

Some farmers have in several occasions complained about lack of market, blaming massive imports of vegetables and fruits from South Africa and Tanzania Mainland, used mainly in tourist hotels.

The authorities here, including the Minister for Agriculture, Natural Resources, Livestock and Fisheries, Mr Hamad Rashid Mohamed, have been reluctant to restrict importation of farm products, arguing that the locally-produced ones were still insufficient and of low quality, asking farmers in the islands to ensure better crops.

OPINIONBy Prof George W. Kanyeihamba

Under normal circumstances where the economy is doing well, entrepreneurs and industrialists usually keep quiet, shun publicity and quietly enjoy the fruits of their labour.

Therefore, the constant alarms, public utterances and anxieties which have appeared in the media from time to time constitute bad omens for the whole country.

First, there was the heart rendering cry by a onetime claimed richest man in East Africa, Sudhir Ruparelia, when his financial empire and Crane Bank were reported to be in trouble. When the bank’s management was subsequently taken over by the Bank of Uganda, the bottom fell out of that bank.

I had interests in the survival of Crane Bank because as a co-founder and a shareholder of Kigezi Bank of Commerce, I and 320 other shareholders of the latter bank went to court and are still challenging the manner and style in which it was closed and eventually taken over by the owners of Crane Bank.

Secondly, Crane Bank remains one of my personal banks in which I have accounts.

Shortly after the bad news that Crane Bank had become insolvent, the media reported again that the government had extended a contribution to the bank of Shs200 billion.

Many readers thought that the bank’s problems would end with that contribution.

Unfortunately, the media started publishing stories that all was not well between the bank’s owners and the government.

This was followed by the announcement from Bank of Uganda that they were taking over the management of Crane Bank and its branches.

At this juncture, some customers and investors of Crane Bank were advised to withdraw their money from it presumably because it was in danger of disappearing under new management.

I am one of those customers who believed in the proficiency and credible abilities of Crane Bank’s owners and managers and I was advised by close friends in the bank that my money was safe there and I should not heed the alarming advice.

I was also assured by the announcements from the Central Bank that investments in Crane Bank were secure and we should not panic.

Up to now, I have not closed my accounts in that bank, notwithstanding dire warnings and friendly advice that I am mistaken and soon or later will regret the decision to continue trusting the owners and managers of the bank.

The latest media report that the Bank of Uganda is looking for buyers of the bank is not good news for us.

As between President Museveni and the owners of the bank, the President appears to fault the latter. On the other hand, Mr Sudhir places the blame squarely on what he calls President Museveni’s people.

In fact, one of his alleged statements in the media was framed as follows: “Museveni’s mafia have stolen my bank”.

In the High Court, a trial judge who gave the final judgment in the case of Kigezi Bank of Commerce opined that the plaintiffs did not prove that they had lost anything. When Crane Bank was taken over, the respondents in that case which is now in the Court of Appeal were reported to have said they want to stop government from taking over and managing Crane Bank because Kigezi Bank of Commerce, which they call National Bank of Commerce, lost a lot of assets and money when it was handed over to Crane Bank and that they wish to protect those investments and shares.

Without prejudice, this would seem to clearly contradict the judge’s findings, especially when his lordship ignored the earlier ruling of his colleague and its terms and conditions the earlier judge had set that the defendants appear before him and explain their decisions and actions relating to the manner they mismanaged the bank. They failed to obey that order.

Talking to owners and managers of other small banks, especially Ugandan founded and managed, businessmen blaming the government for the misfortunes of the Ugandan economy appear amply justified.

Prof Kanyeihamba is a retired Supreme Court judge. 

ANALYSISBy Bitange Ndemo

My proposal last week to brand Kenyan athletics yielded many responses. Before proceeding to make another proposal for this week, I want to share just two of the comments elicited by last week’s column.

The first one is from Gerald Lwande. Writing from Eldoret, he had this to say:

“Good afternoon Prof. Ndemo. I am impressed with your article on today’s (26th Dec, 2016) with emphasis on the concept of an Athletics Hall of fame in Eldoret. I would like to bring to your attention Precise Genomics R&D Laboratories that has partnered with Strathmore University and University of Brighton – UK to set up a centre of excellence in Sports Medicine and Research in Eldoret town (Nandi road opposite Nandi close). The facility currently hosts high [calibre] endurance (Marathon) athletes such as Wilson Kipsang and Geoffrey Kamworor for training and rehabilitation. As a facility, we had not considered setting up a hall of fame, but – why not? Next time you visit Eldoret, please pay us a courtesy call and we could partner with one of your venture capitalists friends to set up this new idea of a hall of fame.”

I must confess that I did not know that a facility like this one exists in Kenya, but it strengthens my position that we don’t always have to look to government to start projects. There is a major role for the private sTwitter: @bantigitoector and research institutions to take the leadership through collaborations in exploiting opportunities that exist in the country. If we fail, someone else will take care and leave us complaining.

My colleague at the University of Nairobi and fellow columnist Dr X.N. Iraki posed these questions: “Could we possibly open our eyes in the coming year to deal with our own poor judgement, greed and self-centeredness, which have impoverished the people of Africa? Are Africans poorer in judgement, greedier, more self-[centred] than other races?”

POVERTY OF DECISION-MAKING

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I don’t know the answers to these questions but in many forums people have asked similar questions. And as always we fear dealing with such questions, often choosing to move with the crowd even as we witness the suffering of people due to poor judgement by our leaders in virtually every sphere.

However, let us not just blame politicians. For example, our universities, public and private, are failing across the country, yet they are managed by the best brains the country can offer. A recent report by the Commission for University Education (CUE) revealed glaring maladministration at several institutions but the matter was politicised and tribalism unleashed to protect the status quo.

We need much more than rhetoric to deal with the rampant poverty of decision-making.

Let me reveal this week’s proposition. It is an idea I came across while visiting Cape Town with some friends.

Although I am a teetotaller, I escorted my friends to a wine-tasting outing at one of the many Cape Town vineyards. Later we moved on to a nearby a brandy-tasking estate.

I took lots of notes. I began to reflect on why in Kenya we don’t do the same with tea farms in Limuru or Kericho; coffee farms in Kiambu or Nyeri; and even sugarcane in Awendo or Mumias.

THE SAME OLD WAY

More than 50 years since independence, we have not challenged or disrupted any processing and distribution mechanisms that were left behind by the colonists.

Over time, returns from virtually all cash crops in the country have fallen, leaving the farmers poor and frustrated. Too many agencies were created in the middle, further squeezing the farmers into poverty. The Coffee Board, the Tea Board, the Cotton Lint and Marketing Board as well as the Sugar Board failed in their mandate to brand and market the Kenyan produce.

Some of these boards were infiltrated by cartels that virtually killed the industries. We also sacrificed these agencies on the altar of ethnic balancing. As a result, they are all in a mess.

Take the coffee industry, for example. Recent media reports revealed how a whole sector was brought to its knees by price-fixing cartels. The tea industry is no better; it is beginning to falter and incomes are declining.

The sugar industry was politically introduced by Kanu in Nyanza and western Kenya to give farmers some form of cash crop like those in tea and coffee-growing areas. It didn’t matter that feasibility studies showed that it was not feasible in the absence of large plantations. Even a casual observer will tell anyone that Kenya will never be competitive in sugar for as long as it is dependent on small-scale farmers.

Yet Kisii County, with no sugar plantations, is in the process of building a new sugar factory even with the fact that several factories have collapsed in the recent past. Just a few more cases where we have made or are making poor judgements.

BLOCKCHAIN TECHNOLOGY

Although many coffee farms have gone to real estate, new technologies can help us revive them, rejuvenate tea farming and make sugar farming worthwhile. The emergent Blockchain technology is enabling decentralised production while taking advantage of centralised or crowdsourced development.

This new concept is known as distributed production or manufacturing and leverages local manufacturing in a decentralised format by enterprises, creating geographically dispersed manufacturing entities brought together by information and communication technologies. It mimics the cottage industrial model but the product remains uniquely the same.

For example, a new, unique blend of tea can be developed through crowdsourcing. This product can be produced in several geographically disbursed locations but giving basically the same taste.

Some coffee blends are only manufactured elsewhere from the raw material that we export. We then import the finished product. In distributed production, the product will be produced locally using the same formulation used elsewhere. The cost will be minimised while consumption will be enhanced, thus benefiting the farmer.

While this modern method of production may be acceptable in the tea sector, it will be very difficult to disrupt the existing order in coffee and sugar. Ethiopia, however, fought the big boys to gain global recognition and benefits to her coffee. Kenya has yet to understand the global cartels that control the commodity.

ENTREPRENEURIAL OPPORTUNITIES

It is the more reason we need to disrupt the existing order, cut the many middlemen and let the farmer benefit. There is a need for policy change to protect whatever is remaining of coffee.

The endangered Kiambu farms should be turned into tourist locations for coffee tasting just like wine tasting in Cape Town.

The thousands of people who turn up each day to taste wine end up buying and promoting the brand locally and internationally as well as creating employment at every stage.

The sugar sector will be more controversial since it will seek to destabilise local multinationals. It is my contention that sugar production in Kenya would in the long run impoverish the farmers.

What needs to be done is to focus more on manufacturing brandy just like the South Africans do with vineyards. Some of the best brandies exported from South Africa are from wineries.

The more I listened to the descriptions of the brandy, the more entrepreneurial opportunities I saw for young Kenyans. At some point they said the brandy had a woody smell and that made it special.

This indeed reminded me of the clay pots that used to store water, and its beautiful earthy taste. They are likely to produce some unique earthy brandy. This will revive the art of pot making in Kenya with a powerful purpose.

It is time we dealt with the propaganda by multinational companies that local production of liquor is illicit. What is lacking is regulation of liquor production. Americans dealt with bootlegging through production regulation.

LIMITS OF CRIMINALISING LIQUOR

We must face the reality that no amount of criminalising local liquor production will stop its production. The sooner we perfected production, or leveraged Blockchain technology to produce globally acceptable quality liquor, the better.

This brave decision will create multiple jobs as well as improve the safety of liquor in the country. It does not need a genius to build a distillery knowing that the concept has been the same.

I write this knowing that there are moral consequences to such propositions. Yet again it is the act of facing reality that breeds prudent decision-making. We can reasonably talk about responsible drinking. It is utterly irresponsible and poor judgement to think that drinking can be stopped by destroying drinking dens or manufacturing facilities.

John Quincy Adams, an American statesman who served as the sixth president of the United States from 1825 to 1829, said, “If your actions inspire others to dream more, learn more, do more and become more, you are a leader.”

There is much to learn from other successful economies and we can emulate them to jumpstart our development.

South Africa offers us the opportunity to increase demand for our coffee, tea and sugar. It also offers us ideas for spurring local production as a strategy for creating more employment and sustainable development.

The writer is an associate professor at University of Nairobi’s Business School.