At lunch recently, the CEO of a top Kenyan bank had some revealing insights. He began by sharing some interesting numbers about the potential of the East African region, which helped explain why there has been a scramble by Nairobi-based banks to open up shop in Kampala, Juba, Kigali, Bujumbura and even notoriously difficult Dar es Salaam.
Then he added two things that I already knew, but wanted to hear from someone smarter and better positioned. First, he argued that no country can develop by relying on foreign banks.
Secondly, and to buttress his earlier point, he said his biggest source of satisfaction, looking at the region, was not from how much money his bank makes from its subsidiaries, but how it is helping entrepreneurs, again mostly based in Nairobi, to expand their footprint across the region.
These two arguments are borne out by the evidence. Of the top 10 banks in Kenya, about seven are either locally owned banks, or locally listed banks in which ordinary Kenyans can buy a stake.
In addition, the East African Community has given enterprising Nairobi-based firms a much wider market, turning the likes of Nakumatt, Uchumi, for instance, into regional brands.
The EAC is perhaps the biggest economic opportunity of our lifetime but the most remarkable aspect of this otherwise happy story is that Ugandan firms are, with very few exceptions, participating, but not contesting this economic space.
The expansion of the financial markets has allowed for the emergence of regional capital in which, for instance, investors in Kampala can buy Kenya Airways stock while those in Nairobi can buy shares in Umeme.
This is a step forward but how can we ensure that this regional capital sits atop national capital and brands?
How do we ensure that Ugandans who can buy shares in Safaricom, the most profitable company in the region, can also buy shares in MTN, the most profitable company in the country?
What do we have to do to ensure that more and more Ugandan firms feature among the leading taxpayers, and that there are more indigenous banks playing at the top of the field?
If a British bank can open up branches in Uganda and make money, how do we get a Ugandan bank to open up branches in the UK and also profitably do business there?
If Barclays can open branches in Lugogo and Kyebando, how do we get my friend Andrew Rugasira’s Good African Coffee to open up coffee shops in Houslow and Croydon?
My suspicion is that we cannot simply let the markets decide. We must find incentives for regional and international brands to open themselves up to local content and ownership while also providing incentives and cheaper capital to deserving local entrepreneurs.
The deliberate and historical imbalances in the economy that Prof Mahmood Mamdani brilliantly documented in ‘Politics and Class Formation in Uganda’ have never been adequately resolved, and previous attempts to do so have tended to be arbitrary and dangerously high on xenophobia. There must surely be smarter ways!
Our Army currently maintains a semblance of order in South Sudan and Somalia but there are few Ugandan brands contesting in the economic space there, beyond petty traders. While the former is our largest export market, how do we grow from exporting pineapples to building roads and bridges there?
Most of our national conversations are about promoting narrow, partisan interests rather than lifting the boats of all Ugandans, especially those in business who create value and jobs.
Our meaningful influence and contestation in the region will come when we stop exporting violence and start invading them with Ugandan businessmen armed with spread sheets.