Monday, March 23, 2009

The war on.... something or other

Last week, there was a very interesting editorial in the Economist, providing a strong argument for the decriminalisation of drugs. It's not a difficult argument to make: first, it drew attention to the abject failure of the high cost "war on drugs"; second, it highlighted the likely health and fiscal benefits from a properly managed and regulated trade in drugs; and third, it made the point that the criminalisation of drugs drives the trade underground and leads to increased crime and violence around the world. Recent drug-related violence in Mexico is widely reported, but the drug trade is now well-established in West Africa and, increasingly, there are rumours that East Africa is becoming a transit zone for drug smuggling, with all the attendant social risks this brings.

By coincidence, I have just re-read Ben Elton's novel, High Society, which centres on a hitherto-little-known politician's ultimately unsuccessful campaign to decriminalise drugs, set against the backdrop of drug use and abuse across British society. It's a very good novel, blending satire, humour and typically savage social observation. Indeed, while no-one, least of all Ben Elton himself, I suspect, would say that he is a great writer, he is a wonderful commentator on many of the big issues of our time. In one memorable passage, the lead character, Peter Paget, compares the absurdity of the "war on drugs" to the USA's failure with alcohol prohibition. "That one insane experiment [prohibition] tells us everything we need to know about drug control. People didn't drink less, they just drank illegally. They paid no tax, some of them went blind from wood alcohol, and they financed the birth of organized crime that has plagued American society ever since."

Each publication made a compelling case for decriminalisation: taken together, the argument is overwhelming. The "war on drugs" cannot be won.

So why are most Governments around the world so wedded to the "war on drugs"? It's an interesting question, for which there seem to be two main possible answers. First, they know it, but consider the social consequences of decriminalisation to be worse than fighting the long, expensive and inevitable defeat. Second, and a more cynical explanation, waging "wars" is a convenient way by which Governments are able to subjugate and control the populace, both through the erosion of hard-won civil and individual liberties (as has been so clearly demonstrated in the "war on terror") and through the creation of an external bogeyman, whose wicked and malign intentions threaten the very fabric of our society, and who provides the justification for excessive regulation and intrusion into the way in which individuals choose to live their lives.

Recently, I read an extraordinary item on the news: namely, that the British Government was seeking to introduce a system that required anyone leaving the UK to disclose their travel plans in advance. This will, apparently, assist in the control over two bogeymen, terrorism and organised crime. It probably will, but what sort of society do we want to live in? Every new regulation is justifiable, taken in isolation, but they make each one of us just a little less free than before.

Tuesday, March 10, 2009

The Moringa Tree

I am not generally a fan of new crops. My experience is that they seldom live up to their advocates' claims, but I am prepared to make an exception for the Moringa tree. Widely planted throughout East Africa over the last 10 years, it was hailed as the "Miracle tree" and, while it hasn't quite lived up to expectations, it retains a great deal of potential.

Native to Asia, Moringa Oleifera has a huge variety of uses. Its nutritious leaves can be used either for human or animal consumption. I can attest from personal experience that its seed pods, whose long slender appearance has led to the tree being called the Drumstick Tree, taste delicious when immature. The tree is drought-resistant. It can be coppiced annually for firewood and to stimulate new growth. And its seeds produce a high value clear, odourless and stable oil now in demand in the cosmetics industry. Here's proof:

The Body Shop recently introduced a Moringa line of products, using Moringa oil supplied by one of AAC's investee businesses, Earthoil. Located in Athi River, close to Nairobi, Earthoil produces a range of seed oils for export. Its Moringa seed is sourced from growers in Western Uganda, and cold pressed for export. At last, therefore, planters of the "Miracle tree" are reaping some financial reward: I hope that Moringa's other manifold benefits will be realised in time.

In my opinion, it has a great deal more potential than that other so-called wonder crop, Jatropha curcas. Quite apart from anything else, at least it's not toxic.

Friday, March 6, 2009

Zain and the art of visual pollution

The Pearl of Africa is under attack. The land that is "Gifted by Nature" has now been afflicted by a truly hideous shade of pink, courtesy of the telecommunications giant, Zain. To borrow from its largest competitor's slogan, Zain pink is now "Everywhere you go" from Bugolobi market in Kampala (pictured above) to the smallest village in Northern Uganda. Zain's slogan is "A wonderful world". With that color?

The Zain group acquired the highly successful Celtel business in 2006. Hailed as Africa's largest ever private equity deal, Celtel had over its brief lifespan created a strong brand, despite an advertising campaign designed to upset a lover of the correct use of the English language. This campaign consisted of inane three word phrases and invariably included a full stop between the first and second words. For instance, Uganda residents were urged to "Make. New Friends." or "Change. Your World.". But I'd take the bad grammar over Zain Pink, any day.

In fairness, Zain is not the only painter of buildings in Uganda. Here's another example, from Namuwongo in Kampala:

MTN yellow is every bit as visible but, at least in my book, nothing like so offensive, and Warid red and Uganda Telecom blue are positively attractive.

Come back Celtel! All. Is Forgiven.

Monday, March 2, 2009

Cafe Latte in Kitale

Kitale is an attractive town, but at least until recently it has, with the exception of the well-appointed private members' Kitale Club, been sadly lacking in amenities. But no longer! Kitale now boasts a Coffee shop, offering Latte, Cappuccino, a cybercafe and an extensive lunch menu. See for more details.

Besides the Coffee Shop, I can also recommend the Karibuni Lodge as a place to stay. A wonderful breakfast, overlooking the cliffs and forests of the Cherangani Hills

Sunday, March 1, 2009

Pan Paper and the role of agribusiness in rural Africa

Over the past 10 days, I have made visits to two AAC seed company investees in Uganda and Kenya. NASECO (an acronym for the Nalweyo Seed Company) is located near Hoima in Western Uganda and Western Seed Company is in the Kenyan town of Kitale, close to Mt Elgon. Visiting investees is usually an enjoyable experience: the great privilege of my work is to meet and spend time with business owners and managers who are committed to building successful businesses. I was also very happy to have been able to drive to both destinations. Travel writer and novelist Paul Theroux considers driving the least enjoyable and interesting way to see a country, but to me it is infinitely preferable to the endless hanging-around of air travel.

On the way to Kitale, I passed through the small town of Webuye, home to a long established and large business called Pan African Paper Mills, usually abbreviated to Pan Paper. By coincidence, the next day an excellent article appeared in the Daily Nation by Jaindi Kisero, urging action to be taken to save Pan Paper from closure. It came as no surprise to me that Pan Paper is once again in a state of impending closure – it seems to have been struggling for most of the last 15 years. Its problems stem from many causes, the most serious of which is the lack of plantation timber in its immediate vicinity, but which also include high transaction costs, and little protection against paper imports.

Kisero’s argument was based on the critical importance that rural-based agribusiness plays in sustaining rural communities. “If you close down Pan Paper, you hurt the lives of hundreds of thousands”. And he’s right. The social impact of closure would be enormous. My appreciation of agribusiness’s developmental role dates from my experience as the Financial Controller of Tanganyika Wattle Company in the town of Njombe in Tanzania’s southern highlands. Tanwat, as the company was fondly known, had been in operation for almost 50 years. At that time, the business had more than 2,000 employees across its four divisions – the eponymous 10,000 hectare wattle estate and factory, the 600 hectare tea estate and factory, a sawmill, timber treatment plant and 5,000 hectare pine and eucalyptus plantation, and a 2.5 MW dendrothermal (wood-fired) power station. It was a fine example of an integrated rural agribusiness.

As an investment, it is fair to say, Tanwat had not been a great financial success for its shareholder. Though profitable, overall return on capital was low. However, it is no exaggeration to say that its social impact was huge. To put this in context, Njombe was little more than a village when the business was founded in the early 1950s. Since then, it has grown into a busy town with more than 60,000 inhabitants. Njombe’s growth was not entirely due to Tanwat, but the company’s impact – specifically, the $30-40 million in wages and salaries funneled into the local economy over the best part of 50 years; the substantial value of purchases of Tanzanian goods and services; the huge contribution in direct and indirect taxes paid; the delivery of electricity to Njombe and its environs; the foreign exchange earnings over decades of operation; health services delivered through Tanwat’s hospital; and, less quantifiable but no less significant, the transferable skills developed in the workforce – construction skills, engineering knowhow, motor mechanics, office administration, accountancy and, latterly, computer literacy – is undeniable.

So this is the dilemma facing the Government of Kenya. Keep Pan Paper open, subsidise it and allow it to continue to provide livelihoods and opportunities for the town of Webuye and its rural population, or accept market forces and let it go under, with a saving to the exchequer but a big social cost.

There is no easy answer.