Afronomics: A viable solution to Uganda’s economic woes

What you need to know:

  • Therefore, these are the people that should be at the center of efforts to drive our economy forward. “Afronomists” are really who we need more as opposed to “Adam Smith economists” who are cut out for more organized and structured economies.

About a fortnight ago, I was engaged in a conversation with an Asian businessman. The topic of our discussion was on how to succeed in business in Uganda or even Africa. 

Like many other Asians who come to Uganda to do business, he noted that Uganda is a land of immense business opportunities. He very easily counted more than ten really successful Asian businessmen who had built multi million business empires from scratch. Sudhir Ruparelia is the one that is largely known, despite there being many others.

He was, however, quick to add that the dynamics of doing business here in Uganda are very different from doing business in the UK where he had spent a large part of his life or other parts of the developed world he had visited. He noted that despite the many business opportunities here in Uganda, one needs to apply different business strategies because the business ecosystem here is quite different from the business ecosystems in other parts of the world.

We concurred that our business ecosystem is characterized by; a not very honest workforce with businesses suffering a lot of pilferage, poor time management, a compromised judicial system, heavy taxes, uneven business playing field, etc. Our authorities are doing all they can but some of these vices or challenges are so deeply entrenched and it will take some time before they can be completely uprooted / addressed.  

He therefore advised that since some of these vices / challenges will not go away overnight, smart businessmen have to work round them.

He shared some of his strategies. According to my Asian friend, when he ran his multi-million vegetable export business, he always made a provision of 20 percent for pilferage. He decided that he was not going to go nuts trying to plug every “leaking hole.” He did try his best but he reasoned that to stay sane, he would be content with his earnings less by 20 percent. That way, everyone would be happy, those engaged in pilferage and himself.

On how he dealt with time keeping, he revealed that initially he would get agitated when people showed up late to appointments. But realizing he couldn’t change everyone, he learnt to always set up time for appointments an hour earlier than he intended it to be. That way everyone would be on time and he would avoid getting stressed.

He made a lot of sense. We then proceeded to discuss how some people succeeded in this complex business environment while others failed.

We noted that despite the huge rate of business failure, there are 30 percent who are able to beat the odds and not only ensure survival of their businesses but also grow them. Of this 30 percent, there is an even smaller group of people, probably less than 5 percent who have been able to grow their businesses from zero into multi-million investments. These businessmen own huge factories, real estate, media companies, transport companies, etc. They have been able to thrive and excel in our complex business eco-system.

It is at this point that we concurred, that these people who have succeeded in our complex business ecosystem have mastered the dynamics of our African (Ugandan) economy. I would like to rephrase and say these people have mastered “Afronomics” or the Economics of Africa.

They have learnt to work round the many obstacles of our complex business ecosystem. They have mastered how to cleverly manage their tax obligations and not sink under heavy taxes like many have, they have learnt how to avoid having their businesses close due to pilferage, they have learnt how to maximize sales and profits amidst, they have learnt how to keep a “gamba nogu” on speed dial for times of trouble, Etc. Their list of their strategies is long, most of which will never be taught in business school.

These are our little celebrated economic or business geniuses. They may not have attained PHD’s in Economics or Business but they are able to read situations, see and seize opportunity, navigate obstacles and make millions where even Professors of Economics or Business would struggle.

Therefore, these are the people that should be at the center of efforts to drive our economy forward. “Afronomists” are really who we need more as opposed to “Adam Smith economists” who are cut out for more organized and structured economies.

Edward Makobore, Economist and farmer