Friday, October 31, 2008

In praise of Ugandan lunches

Every day, lunch is delivered to the AAC & Kilimo Trust offices. With minor variations, it is always the same: fish stew, matooke (pulped cooking bananas), rice and other carbohydrates, fresh vegetables, beans and either a beef of chicken stew, together with some fresh fruit to follow. It may not sound very exciting, but three factors make it the best regular lunch I have ever had:
1. Freshness: all the ingredients are completely fresh - and most grown without the use of many chemicals or fertilisers.
2. Matooke: a fantastic staple food, packed full of fibre, and incredibly good for digestion
3. Pearl Chilli and Garlic sauce: manufactured in Uganda by Reco Industries in Kasese and quite honestly the best bottled sauce anywhere on the planet.
Marvellous, low-cost, fresh and healthy - how food should be. My advice: eat Ugandan!

Thursday, October 30, 2008

Visiting Rwanda

Or, more accurately, Kigali for the Commonwealth Business Council Investment Forum for East Africa.

My first encounter with Rwanda was in 1994, when I was working for the International Red Cross Federation's regional delegation in Nairobi. As an accountant, my job for a short period was to deliver huge sums of cash to the relief effort in Goma and Bukavu, just across the Congo border. The weekly consignments averaged about $500,000 in cash - mixed denominations, 1999 series or later. By keeping the process low-profile, I managed to avoid becoming a target myself, but it was an uncomfortable, but very necessary task. At the time the banking system in Eastern Congo (Zaire) had broken down completely, so cash was the only means of financing the massive relief operation.

Since then, I have been back on a number of occasions, always with delight at the visible and tangible progress since the dark days of 1994. Most memorably, I made a trip in 2002 to Ruhengeri to visit mountain gorillas. I had tagged a day visit on the end of a business trip to Kigali and as a result was extremely badly equipped for the short hike up the mountain to the forest. It had rained the night before, as we left early in the morning, the valleys were cloud-filled but the hills clear. The image of the deep green "mille collines" floating in a sea of white clouds in the early morning sunlight is unforgettable, yet it pales by comparison with the sight of a family group of 15-20 mountain gorillas.

Kigali is clean, orderly and functional but, in comparison with the hustle and bustle of other East African commercial centres, strangely devoid of apparent colour and energy. There is a reserve and a sense of watchfulness which leaves the visitor with a sense of remoteness....

As for the conference, well, I was very interested in about 20% of the agenda. Protocols observed, there were some very interesting discussions on the future of agriculture and forestry in Africa (both of which are close to my heart) and, as is always the case, a good opportunity to meet a range of useful contacts. Sadly, the session on financial inclusion - the delivery of appropriate financial services to the unbanked majority - was disappointingly bland. The simple fact is that banks in East Africa are extremely profitable and simply do not need to invest in delivering banking services into rural areas. Furthermore, they are far too costly - tending, as everywhere else in the world - to grow fat on the huge and indefensible spreads between customer deposit interest rates and borrowing rates.... Am I alone in thinking that there is something fundamentally wrong when bankers are the highest paid segment of the workforce?

I hope I will be back in Rwanda soon. And I hope, next time, that I will be able to see something more than a hotel, a taxi, a conference centre and an airport. On the flight back this morning, I realised that I had in all honesty had no contact with Rwanda... again. East Africans, international delegates, foreign-owned and managed organisations, but nothing that brought me any closer to a relationship or an understanding of Rwanda. The remoteness remains.

Thursday, October 23, 2008

The mystery of the devaluing Shilling

People keep asking me the same question. What will the impact of global economic turmoil be on Africa? How is it going to affect our economies? The general consensus seems to be that short term risks revolve around (1) a possible contraction in remittances from the African diaspora (2) reduced demand for commodities and African exports - including tourism and (3) a possible reduction in aid flows due to changes in allocations of donor country budgets. This sounds sensible, but you would think that each of these risks would take some time to affect the actual supply and demand of foreign exchange in East Africa - that the impact would not be immediate.

So what's happened? Well, over the last two months or so, both the Kenyan and Ugandan Shillings have lost more than 20% of their value against the US Dollar - after both having had a long period of stability (indeed strengthening) aganist the Dollar. It's hard to believe that the Dollar supply side has contracted sufficiently rapidly in such a short period, so it must be demand-driven. Bu where's the demand coming from? I'd like to know.

The next question, of course, is about impact, winners and losers. Exporters are quietly celebrating. For a long period during which local inflation was causing wage pressure without the benefit of any depreciation in local currency, exporters of major commodities (tea, coffee, horticulture and other agricultural products) have been struggling. Suddenly, the twin effect of a depreciating currency and rising international commodity prices look set to provide a substantial windfall. Importers, on the other hand, will struggle to pass on increased costs to consumers - and this presents a serious risk, especially in relation to oil and oil derivative imports. Inflation will rise, which will raise the cost of debt (which had been coming down slowly, even if still high by international standards).

Let's hope the exporter windfall brings in enough forex flows to stabilise the currencies. If not, then there's a real risk of forex shortages causing further depreciation, stimulating inflation and causing real damage to the regional economy. Let's hope!

Monday, October 20, 2008

AAC enters the blogosphere

My name is Tom Adlam and I am lucky enough to be managing African Agricultural Capital: an Investment Fund for - as the name suggests - agriculture-related businesses in East Africa. My team and I are based in Kampala, Uganda, and you can find more information at

I want to use this blog to share personal experiences and information about business, working and living in East Africa with all of you out there who are interested. It is important for me, at this point, to stress that the views and opinions expressed in this blog are my own and in no way represent the views and opinions of African Agricultural Capital as an organisation. I will probably try to post a weekly update.

The inspiration for this blog comes from one of our investee companies, Sandstorm Africa (see whose CEO Mark Stephenson has recently started his own blog. It's a fascinating read which you can find at

And, at least for today, that's about it. More news to follow soon.