22/11/2020
The Road to Serfdom - By Andrew M. Mwenda
My friend Henry Mayanja left Uganda as a teenager and lived in the UK for 20 years. He worked for the UK government earning a salary there, thinking he had made it. When he visited Uganda in 2011, he found some ordinary guy he left in Hiima โ uneducated, riding a bicycle and selling milk โ a successful entrepreneur in Kampala with 24 lorries and investments in real estate. The guy explained to Henry that over those 20 years, he had grown from a bicycle to a boda boda, to a small pickup to where he was then.
Henry felt challenged and resolved to return to Uganda and enter business as well. He went back to UK, got a second job and was earning a total of ยฃ35,000 (Shs 170m) a year โ which to Ugandan ears sounds great. After two years, he had saved ยฃ15,000 (Shs 73m) and bought two lorry-heads and returned to Uganda in 2013. He partnered with a friend who provided him five trucks (pulled by lorries) and entered the logistics business. Today Henry has over 70 lorries with their trucks; his business is worth over $5m and is diversifying into real estate and mining. The money he makes today in Uganda is 20 times what he was earning in UK.
The lesson from Henryโs story is simple but fundamental: Ugandans do not need to run to Europe and North America to prosper. Our country has many opportunities, which anyone entrepreneurial can exploit and prosper better than anything the US and Europe can offer. Yet very many Ugandans, even the most educated and exposed, spend a lot of time complaining about how government has failed to create opportunities for them to prosper. This is the most dysfunctional mindset across our vast continent. Government cannot create opportunities for anyone. At best it can create an enabling environment for people to succeed.
For instance, we have an estimated 20,000 Indians (or South Asians generally) in Uganda i.e. 0.5% of the population. Then someone recently told me that Indians (or Indian owned businesses) pay 64% of our tax revenues. If this number is correct, then it reveals something fundamental about this country: the thinness of indigenous participation in the economy as productive agents โ exactly as colonialism designed. Meanwhile 70% of Ugandans are peasants living on agriculture, which contributes zero in taxes. They are poor largely because we do not have entrepreneurs to create businesses that can employ them.
For many Ugandans hearing the dominance of Indian capital in our economy, the first intuition is to look for a villain to blame. The best way to make such a villain recognizable is to give him/her a human face. So President Yoweri Museveni becomes the villain. Of course Museveni personally carries part of the blame for this. He has been a strong advocate of Foreign Direct Investment as a driver of economic growth. He is also fascinated by Indians and sees them as more entrepreneurial than indigenous Ugandans. He has thus been willing to use the state to support some of them.
Yet most Indian entrepreneurs have never received any direct state support but they are thriving. In any case, limited local ownership of the economy is a characteristic feature of most of the economies of Africa. In Tanzania, Kenya, Zambia, Malawi, Ivory Coast, Liberia, Sierra Leone etc., foreigners own most of the businesses. This demonstrates that many of the problems we attribute to individual leaders like Museveni are actually results of broader, historical, impersonal forces. Leaders like Museveni are consequences, not causes, of the neocolonial character of the state.
I have grown increasingly to believe that one of the main causes of our economic backwardness in Africa is our mindset. This is inculcated in us largely but not entirely through our education system and in public media. There is a suffocating belief that the state is the source of prosperity for individuals and groups. The maxim therefore is that individual and collective prosperity requires a competent and honest government โ whatever these two adjectives mean. This explains the over politicization of life in Africa โ everyone wants to be engaged in politics as the vehicle for improvement.
Yet there are many successful businesspersons, most especially from immigrant communities โ Ethiopians, Somalis, Eritreans, Indians, Chinese, etc. in Uganda. Most of them come to this country with nothing but their wits. They set up businesses and within a few years they have built thriving enterprises and are employing Ugandans. They succeed without seeking any reform of the state, in large part because their immigrant status denies them the luxury of thinking they need to change anything politically to succeed. (I have deliberately omitted South Sudanese because these come loaded with cash after looting their own state to invest here).
If state and its corruption and incompetence are the reasons many Ugandans are unable to begin businesses and prosper, how come immigrants do not find this an impediment? This convinces me that corruption (however morally repugnant it may be) and incompetence are excuses, not an explanation for the failure of many Ugandans to set up businesses that can grow and thrive. Some Ugandans think, and in a few specific cases correctly so, that success in business requires political connections. But the vast majority of successful immigrant businesspersons in Uganda lack even the most basic political connections to explain their success.
Most of our people, especially the educated, claim government has not โopened opportunitiesโ for them. But if the government has closed opportunities, how come immigrants are making a fortune? If we continue with the mindset of blaming government for individual failures, we shall continue to be servants/workers of immigrant groups in our country. Soon politicians seeking votes will whip up nationalistic sentiments against immigrants in order to rob them of their property. This will lead to an economic collapse as happened with Idi Aminโs economic war of 1972.
I meet many Ugandans who can hardly speak English (meaning they did not go far in school) who have made a fortune as traders, real estate investors, etc. Why are the most successful indigenous Ugandans in business equally the least educated? Because they have not been indoctrinated with the belief that their success depends on government; so they seek to rely on their wits too. Meanwhile the most educated Ugandans work in NGOs, embassies, government, multinational corporations, or as employees of businesses of immigrants. Why? Our education system teaches that success comes from the state instead of individual initiative.
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