A price to pay

This time last year I was on holiday in Southern Ontario, marvelling at the orderliness of large scale Canadian agriculture. This year, I was closer to my childhood home, deep in the Hampshire countryside. In his wonderful book, The Ages of Gaia, James Lovelock deplores the destruction of the English countryside - its meadows and hedgerows teeming with biodiversity - and its replacement with mechanised monoculture. And yet, while it may no longer be the thing of beauty celebrated in words by Housman and Hardy, in music by Vaughan Williams, and in painting by Constable, to my eyes at least, in the long, still, sunlit June evenings, it retains a tranquility and gentleness which is hard to find elsewhere.

In recent weeks, the international media has been reporting a new food emergency in the Horn of Africa, affecting Somalia, northern Kenya and south east Ethiopia. The rains have once again failed in this most marginal area for agriculture and many communities are at risk from the loss of meagre livelihoods, displacement and, possibly, famine. Coming at a time when regional food prices are already running at all-time highs, food aid is urgently required. Among other reasons, the media is once again trotting out comments from aid organisations attributing Africa's agricultural woes to, among other things, farming subsidies in the West. The hypothesis as generally expressed as follows: "agricultural subsidies are damaging to developing countries because they undermine the viability of local farmers". The argument follows that subsidies create over-production, over-production results in lower prices on the international market, and farmers in developing countries have no incentive to invest in agriculture because of the low price of competing imports.

But (with apologies to William Wordsworth), as I wandered lonely as a cloud that floats on high o'er vales and hills on the downs between Winchester and Petersfield, it was hard to escape the conclusion that the policy makers had probably got it about right. After all, farmers need to make a profit. Enough of a profit to encourage investment, but not so much of a profit that every tree is uprooted and every square inch of land ploughed up for agriculture. Indeed, farmers are also be rewarded for reforestation, for hedgerow conservation, and for the adoption of other environmentally friendly activities. If farming is unprofitable, what happens? Farmers no longer have any incentive to farm and the countryside - and the rural economy - suffers. There is risk to the wider economy: the risk of greater exposure to short term commodity price fluctuations; and the political risk (with unthinkable consequences) to any government of a failure in the food supply chain. Preservation of the countryside, too, is a public good

So my simplistic analysis suggests to me that African governments would do much better to erect and enforce import tariff barriers on food supplies, thereby creating an environment which encourages investment in agricultural productivity so that farmers can make profits and reduce their exposure to short term price fluctuations, rather than muttering about the injustice of agricultural subsidies elsewhere in the world. Tanzania does this with its rice industry, charging a 75% tariff on imported rice and it is no coincidence that investors are eying large scale rice production with considerable interest. The sugar industry in the region also has some protection from low cost imports. True, import barriers create opportunities for smuggling, tax evasion and corruption, but the risk of malfeasance should not drive sensible economic policy.

Budget Breakfast

East Africa is just coming to the end of its annual budget frenzy. A number of years ago, someone cooked up the idea that all member states of the East African Community should present their annual budgets on the same day. This year, of course, the stakes are high: East Africa as a whole has been experiencing rapid inflation (driven by price rises in basic needs - in particular food and energy prices), currency depreciation, and the resulting political instability elsewhere in North Africa and the Middle East.

According to the East African, the Finance Ministers didn't do a great job this year: I quote: "they sacrificed free market policies in the political horse-trading that has largely restored the numerous import exemption schemes blamed for slowing intra-regional trade.... [leading] to a slow return of entrenched nationalism that will slowly undermine the remaining stages of the region's integration process - the Monetary Union and Political Federation." A fairly disappointing analysis in the context of the real economic risks that present themselves.

Many moons ago, when I worked in Coopers & Lybrand Kenya's management consultancy practice, I co-ordinated the production of pre- and post-budget newspaper articles by partners and senior managers as part of Coopers' marketing programme in the region. Since then, the stakes have risen. The big 4 accounting firms and local accounting institutes splash out on budget breakfasts, lunches and cocktails - if you are able to get on two or three invitation lists, you can spend a full day criss-crossing the city in search of the next freebie in the opulence of Kampala's leading hotels.

The truth is that the budgets are usually a damp squib, full of self-congratulations and airy promises based on dubious assumptions and murky public sector accounts. Quite why public sector governance is so weak, when calls for ever-stronger private sector governance from public sector regilators continue to be so loud, seems strange. Quis custodiet ipsos custodes? Juvenal's 2,000 year-old question remains as relevant as ever.

Winterthorn

Every now and again, I find something really interesting in Business Daily. Yesterday's copy contained an article on the so-called Fertiliser tree, Faidherbia Albida, commonly known as Winterthorn in Southern Africa. Here's the link: http://www.businessdailyafrica.com/-/539444/1171952/-/122lfrcz/-/index.html

Among its many positive attributes, Winterthorn is leguminous. That is to say, it fixes nitrogen in the soil, and researchers have apparently found that the yields of maize and other staple crops improve when planted alongside mature trees. I have always found it difficult to get a straight answer on the real impact of nitrogen-fixing plants on the nitrogen content of soil, but given that Winterthorn needs fairly generous spacing, it seems safe to assume that only a small proportion of nitrogen consumed by the inter-crop will be put back by the tree.

However, there are numerous other benefits to Winterthorn. It forms a useful windbreak for maize and sorghum. It sheds its leaves in the rainy season, which means that high levels of sunlight reach inter-crops during their peak growing season after the rains have finished. By forming a mulch, its leaves reduce soil water transpiration. Unusually, it flowers at the end of the rainy season and therefore provides a valuable forage source for bees at a time of scarcity. Its seed pods are good fodder for cattle and goats, and its timber has a very high calorific content when used for charcoal or firewood.

Indeed, the only drawback to planting Winterthorn in suitable semi-arid eco-zones would appear to be that its leaves are particularly attractive to African elephants. And it goes without saying that elephants and farmers are not the best of friends!

Motokas, cows and wives

Having only recently finished Twelfth Night, I had promised myself that I would take a 12-month break from matters theatrical..... But, as the saying goes, the road to hell is paved with good intentions, and I find myself in another play starting next week at Uganda's National Theatre in Kampala. We will be doing four performances of the comedy The Cow Needs A Wife, written by Angie Emurwon and a prize winner in last year's BBC World Service African playwriting competition.

Without giving away too much of the story, the plot of this hilarious play revolves around the efforts of a poor young man (Mamboleo) to pay the bride price for his chosen woman, assisted by his over-bearing uncle (Motoka) and the cunning jack-of-all-trades (Kuyiya). I will be playing the role of Motoka, so named as the first owner of a motor car (motoka in Luganda) in his village.

The central themes of the play are bride price and fund-raising, both of which have considerable significance in Ugandan life. The logic of bride price is simple: it represents compensation paid to a family for the loss of a daughter. In an environment lacking an external welfare state, the extended family is the only approximation to a social safety net for the disadvantaged. But in recent years, some non-governmental organisations in Uganda have campaigned against bride price, on the grounds that it encourages society to regard women as chattels that can be bought and sold. It is hard to know to what extent this campaign has attracted popular support, either among women or men, in a society where the Kwanjula (betrothal ceremony) is deeply rooted in traditional culture. My own theory is that, as Uganda becomes wealthier and more urbanised, the Kwanjula - where the bride price is paid in the form of gifts of livestock and other commodities - will become increasingly celebratory and ceremonial, and that the transactional element will wither away.

One consequence of bride price is the need for would-be grooms to fund-raise among their families and friends in order to raise the necessary cash to meet the huge costs of betrothal and marriage. Next week, when we stage The Cow Needs A Wife, I know that in the tranquil lawns surrounding the theatre, there will be at least three or four tables each evening where meetings of wedding committees will be held, to organise functions and raise money to finance the event. Complicated budgets are drawn up and pledges from friends and family carefully recorded. Very few men in Uganda can afford to meet the costs from their own resources, especially in a country where extended families are large and where it is not unusual for weddings to have more than 500 guests.

And this is the cultural backdrop to this excellent comedy. If you are able to come and see it next week, don't miss it!

Nazareth

I went to Nazareth last week. Not the Nazareth in the Holy Land where Jesus served his apprenticeship as a carpenter, but the Nazareth that lies about 100 km south of Addis Ababa in the Oromia region of Ethiopia, its name a reminder of Christianity's long history in highland Ethiopia. (Or so I thought, until my host pointed out that the city's Oromo name is Adama, and that it had only been renamed by the last Emperor Haile Selassie some years ago.)

It was four years since I had last visited Addis. As with so many African cities, the pace of economic growth (at least if construction work is any sort of proxy) is rapid: yet the country remains in visible poverty. My journey took me south, to the Southern Nations and People's region. Shortly after the town of Butajira, we branched off the main road and continued along an excellent all-weather road en route to a farm in the Hlaba district. There were hardly any motorised vehicles on the way: most people travel on foot or, for a lucky few, on donkey carts. I saw very few shops on the way: the exchange of goods appeared to be reliant on weekly open-air markets in village centres. The rains had recently started and farmers were busy using ox-ploughs to prepare their fields for planting. In such a region, households are dependent on wood and farming waste for their energy source, yet there were almost no trees visible standing more than about head-high.

After reading Jared Diamond's book Collapse last year, this visit was a timely reminder to me of the vulnerability of rural communities like this to any adverse shock - for example, failure in rainfall. No rainfall, no crops. No crops, no food. No safety net, and no incentive to traders to transport food into the district, because there would be no money to pay for it. The same could be said of the long term impact of annual farming on soil fertility: diminishing farm yields feeding an ever-increasing population. It is a sobering thought.

On the way back into Addis, I saw a sign for Bobmarley Square (sic), a reminder of the strong connection between the Rastafarian movement and its spiritual home in Ethiopia. Tafari was, in fact, Emperor Haile Selassie's real name: according to Rastafarian beliefs, the embodiment of God on earth and the opponent of western Babylon. It is almost exactly 30 years to the day since Bob Marley's untimely death from cancer, and 36 years since Haile Selassie was executed by Mengistu's Derg, but the Rastafarian movement lives on.

Panacea

For all the hype that surrounds microfinance, one can be excused for believing that it will save the world. There is an initiative by the Ugandan government called "Bonna bagaggawale" which, loosely translated from Luganda means "Prosperity for all". Few appear to take it as a serious policy statement, but as a long term vision it is laudable. Bonna Bagaggawale could, however, be the manifesto for the microfinance movement, the latest cure-all in a long sequence for the world's woes.

I've recently finished reading the provocatively titled book "Why Microfinance doesn't work" by Milford Bateman, which should be compulsory, if uncomfortable, reading for microfinance believers everywhere. Bateman poses the question of why countries that have achieved microfinance saturation over the last decade (for example Peru, Bosnia and Cambodia) do not demonstrate obvious and substantive poverty reduction and "bottom-up" development gains. While the book deals less with African countries (where the microfinance movement is younger and, presumably, reliable statistics are harder to come by), Bateman supports his arguments with impressive statistics and qualititative observations. His conclusion is simple: that most independent evaluations are unable to show concrete evidence that microfinance has had a significant impact on poverty alleviation.

Indeed, Bateman goes further. He asserts that, contrary to the major premise of the microfinance movement: that it promotes poverty reduction by enabling the poor to borrow and invest in income-generating activities (and create a kind of virtuous spiral of wealth creation by micro-entrepreneurs), that in fact the vast majority of microfinance loans are taken out for short term expenses like school fees, health care, funeral expenses or other consumption requirements. So, far from creating wealth, microfinance adds a new item to many household monthly budgets: repayments to the microfinance institution (MFI).

No doubt microfinance supporters can (and will) produce powerful statistics of their own in support of the developmental thesis rubbished by Bateman. So far, at least in my experience, their rebuttals have been feeble. Recently, on quoting from Bateman's book, a MFI Chief Executive responded to me that "poor people also have a right to credit". Well, I can't remember seeing that particular right enshrined in the Universal Declaration of Human Rights.

A few years ago, at the onset of the credit crunch, my brother remarked to me, after having lived for a year or so in Nairobi, that while there wasn't a great deal of money around, at least personal indebtedness was very low. After the consequences of the sub-prime mortgage crisis, this seemed to him to be an entirely positive aspect of African economic life. What he didn't appreciate was the colossal demand for short term debt to meet essential consumption requirements. Now, better by far to have this demand met by properly regulated MFIs than by the Tallyman with extortionate interest rates and brutal enforcement methods (hence the classic movie poster above), but to represent this as poverty alleviation? To me, that's a bit like saying that credit cards and other unsecured lending are the solution to the world's economic problems. I don't think so.

The trouble with walking to work......

.....is, of course, that you have to walk home again.



Or at least, under normal circumstances, it is difficult to think of any other possible objection against this carbon-friendly and healthy alternative to Kampala morning traffic jams. But in Uganda, the "walk to work" campaign has taken on a whole new significance. Led by a loose alliance among the leaders of opposition parties, this apparently innocuous campaign, ostensibly against high food and fuel prices, has provoked a powerful, many say disproportionate, reaction by the Ugandan government. Here's a little piece of visual evidence from the Monitor newspaper. It's certainly a deterrent to leaving the car keys at home.

But leaving aside the muscular response, what's driving the underlying problem of increasing food prices? Global commodity prices, especially oil, are one factor. Increasing regional demand, in particular from South Sudan, is also cited. But the fundamental law of supply and demand is the real driver. Quite simply, there is a supply-side problem, fanned by the increasing demand of a growing population. There's not enough production and, in Uganda at least, there certainly isn't enough storage capacity. I've written before about the remarkable informality of Uganda's food distribution systems and the reliance on fresh products for food - and the lack of buffer stocks of maize and rice in particular - mean that there are no smoothing mechanisms in times of plenty or scarcity

And prices are rocketing upwards, across the board. Matooke, potatoes, maize and beans have all seen increases of between 20-40% in recent months. Not surprisingly, increases in staple foods are also driving up the cost of dairy products, poultry and pork. Fish prices have doubled in the last two years or so, as a result of the depletion resulting from over-fishing in Lake Victoria and Uganda's other major lakes. It's at the bottom of the pyramid, where food costs make up the major part of the household budget, where the impact of inflation is felt the most. When the Ugandan President said, a few weeks ago, that increasing food prices were good for the farmer, he was right, up to a point. Commercial farmers may well make some hay while the sun shines, but the truth is that most small-scale farmers are net consumers, not suppliers, of agricultural products.





"It's the economy, stupid" was Bill Clinton's slogan in his successful campaign against George Bush in the 1992 presidential elections. It's a phrase that could apply to a number of the popular uprisings that have sent shivers down the spines of many longtime autocratic leaders across Africa and the Middle East.

The best response for the nation to the "walk to work" campaign is investment in the agriculture sector. Big fists will only make things worse.