Fred Hoyt's Travels

May 17, 2018
As sometimes happens, our scheduled morning visit got canceled: the visit was to a coffee company, and since 72% of the employment (but 22% of the GDP comes from agriculture, and this what I thought would be our only agricultural visit, I was a little disappointed.

But, as I’ve said, you shouldn’t travel if you don’t have patience. And, since Patience is the name of our guide, we do have patience.

As well as a little free time. I’d wanted to go to the Uganda museum, partly because I’m a museum junkie. My record is 8 in one day, but before you say “wow,” I should, in honesty, note that that mark was set in Budapest, where the captions were in Magyar. There was no chance really of matching that here, but I did get to the museum.

I had a guide who explained most of the exhibits. At one extreme was a temporary exhibit about milk, jointly done between Switzerland and Uganda. I noted that living close to America’s dairy land, that exhibit was less interesting than many of the others.

The holdings were relatively sparse, I thought, but included some history of Uganda and the colonial divisions that traded German rights to Uganda for Heligoland (and a player to be named later?), and the subsequent border adjustments that created Uganda. These were done by the “colonial masters”, as the guide described them.

Perhaps most interesting to me were the artifacts from the Kabacka, the chief of the Burganda tribe, which was the most organized kingdom in what is now Uganda. There was a case with trappings of imperial splendor that were returned to Uganda from the British museum at independence. Another relic, the guide noted, was a copy of a sacred item that still rests in the British Museum. As is true of many areas (think the Elgin Marbles), after visiting a country, you have to go to the British Museum for the rest of the story. On the other hand, the tomb in town was vandalized and burned in 2010, and is currently (still) under restoration.

We’ve nonetheless had two wonderful days of activities: let me summarize some of what I’ve learned:

1) We had enough time to stop at a mall, and discovered where the middle (and upper) classes hang out. It could be in any town anywhere. There was a KFC, for example, and a major South African chain called Superrite, which claimed the lowest prices in Africa. Many of the coffee drinkers bought bags of Ugandan coffee, but they’re going home and don’t have to pack (like I do) for another leg of the journey. The most striking kiosk—one that screamed middle class (or better) was an opportunity to invest in Dubai, for $130,000. Divide by $750, the average national salary, to calculate how many years you would have to work to pay for it.

2) We went to a “cultural show” last night, that was without doubt the longest such event I’ve ever been to. It ranked right up there with Gotterdammerung, Wagner’s concluding saga in the Ring cycle. It started at 7 (we got there around 7:30), and was still going strong at 10:30. The dances were quite long, and the cast had incredible endurance. I saw some of the instruments I’d seen in the museum in use, as the format was to represent the 56 tribes (no wonder it went on for over 4 hours!). Good costuming and good choreography. See Mike Shealy’s facebook post if you want to sample it.

3) We had a visit to Stanbic Bank, Uganda’s largest. It’s originally a South African bank, and is headquartered in Johannesburg. The most interesting thing to me was that the largest shareholder is the Industrial and Commercial Bank of China (ICBC), which is a pattern we saw elsewhere. As he told us in the “War Room”—the sign over the conference room where we met—the Chinese come without conditions. Most of what he reported reinforced what we’d heard elsewhere: the demographics (a hope for the future of banking is a young population). Banks have 1.4 million customers, but there are 20 million cell phones in Uganda, which may explain the popularity of “mobile money”. He also stressed, for investors, the relative ease of doing business in Uganda, which has a Ministry of Investment. 100% foreign ownership is possible, and the shilling (this was a British colony, after all) is convertible into dollars.

4) We were able to put some of the pieces of the oil story together with a visit to Tullow Oil, the outcome of an Irishman’s dream with the help of a World Bank loan, becoming a niche player in African oil with a niche in exploration. The country was thought oil-poor until 2006 when Tullow discovered 1.7 billion barrels of commercially viable oil in the Lake Albert area. What followed was an interesting case study involving 3 companies, Tullow, Total (French), and CNOOC (Chinese), two governments (Uganda and Tanzania), social and environmental concerns (the oil is partly in Murchison Falls National Park), logistics (a 1450 km pipeline needs to be built to get the refined oil to a port; the pipeline needs to heat the oil to 50 celcius, and will be 6.5 feet underground); and financing $12-15 billion; financial risk (though Tullow has an 90% success rate in Uganda in finding oil, the industry average is 25%), It has the makings of a great movie; I volunteered to be Indiana Jones.

5) Three of our visits, as it turned out, dealt in one form or another with agriculture, a sector which employs 72% of the country, and contributes 22% to Gross Domestic Product. Couple that with 30-40% spoilage from harvest to market, and you have the makings of a real challenge.

a) One of our visits was to a US government project, USAID, which in cooperation with UKAID, helps fund an organization that works with farmers in the poorer sections of Uganda. The director talked with us about the kind of successes she and her staff of 55 have had with the 7 year budget of $35 million dollars, $7 million of which is spent to help fund local projects. Working with, and sometimes through, local officials, RTI was able to muster 6,000 farmers to get the local community officials to build a new market, for example.

b) The second of our visits regarding agriculture was to a woman who has earned a variety of awards as woman entrepreneur of the year (Commonwealth 2014 was one), head of a company well named as Delight with branded juices under the Cheers label. Her personality reflected both; her work represented a social consciousness that was refreshing. Her goal was to help women become farmers by teaching them how to farm, lending them money to do so, buying their crops—initially for a tasty mango juice, no additives, and buying their products. At one time, she moved her operations to South Sudan, which has become a failed state ala Venezuela (a woman was 9x more likely to die in childbirth than graduate high school); she lost a lot of money as a result, but obviously has brought cheers to women in northern Uganda.

c) We visited Jankava, the company whose dried jackfruit snack will be featured next month on our Pictured Rocks backpack. Meg, the VP of American chamber of Commerce, who was our host, told us how she wound up in Uganda; a chance meeting with the Buganda queen. A chance meeting with Mr. Jakana led to her working for the trained- at-Texas El Paso Ugandan, who paid for college working in food processing and had started a food processing plant in Kampala. The company has moved from processing and selling fruits to processing and selling dehydrated natural fruits and juices to processing organic dehydrated fruits. She buys from certified organic farmers and wholesales products to retailers and wholesalers elsewhere. Part of her financing came from USAID, and part from crowdfunding. For those who read Machines, Platforms and Crowds, that source of funds will come as no surprise. The Kenyan government helped purchase a packaging machine, and the new equipment will double the capacity of the plant.

Well, it’s getting late, and I need to pack for my trip tomorrow to Kenya. I expected to visit the grave of Lord Baden Powell, the founder of Scouting, when I’m there, and I’ll be prepared, as a good Scout should be. I purchased at the Uganda Museum a special black stone that is supposed to be an antidote to snakebite. I hope I don’t have to use it, but if I do….

May 15, 2018

We went back to school today—actually, to two kinds of educational institutions. For about three hours, we shared teaching ideas and research possibilities with faculty from the College of Business at Makere University, which the dean described as the “Harvard of Africa.”

The 96 year old school is the oldest in Uganda, and probably the largest. As we drove on our tour of the campus, I realized that big universities have colleges for subjects we barely acknowledge at schools of 1800, like Illinois Wesleyan. I liked the Human Rights and Peace Center, a logical outcome for a country that certainly needs both. There was also potential funding for a Center for Private Sector Excellence, which also sounded interesting. And, of course, the programs and degrees in fields such as agriculture, food, and public health.

The College of Business, itself, has 6000 students in degrees ranging from undergraduate degrees in Commerce (finance and accounting and banking) and Business though Ph.Ds. The intriguing degree to me was a Master’s in Public Infrastructure Management, that is a regional degree with Universities in Praetoria and Dakar and involve water, transportation, health, and engineering.

The ambitions of the college are to prioritize sustainable development through research in 1) ethics and corporate social responsibility for growth and poverty reduction; 2) public sector management and social service delivery, and their relevance to communities; and 3) productivity increases, especially in agriculture.

All business undergraduates take a two-week course in entrepreneurship—with teams of ten. The size of the group is commensurate with the number of faculty and the general size of their classes. Remember the claim that this is the “Harvard” of Africa? Classes are over 100; faculty teach around 35 contact hours per week, and are also expected to do research. However, of the 20 faculty, only 6 have Ph.Ds, mostly from UK universities. Oh, by the way, this “Harvard” has 140 computers for 6,000 graduates.

The other “Harvard” we visited was located on prison grounds, but offered a different kind of “education.” About a year ago, the President initiated a training institute for girls in unused buildings at the prison. Recognizing the need for bootstrap training, he offered space (the barracks of the Nkruhma and Nasser regiments are quartered on the grounds) and the funding for girls who were unemployed, or out of school, or… The program now has 4,089 women for 4-6 month programs that include shoemaking, tailoring, cooking, and weaving. Girls sign up on a first come first serve basis and when they are done, get a certificate and 1 million shillings (about a third of the average national income), and depending on the trade, an appropriate machine to startup. Classes were big; the cooking class had about ten at each station, making a pizza assembly line style; In the haircutting class, there were 4-10 at each station with a different girl getting her styling each day. The girls mostly live nearby and get meals and hope; as they come through the prison gates each day, they get a reminder, perhaps, of the “alternatives” were they not enrolled in the programs.
I was thinking about input and outcomes. Which option really is the “Harvard” of Africa?

 

May 14,2018

I’ll be leading almost 30 boys to Scout camp in mid-June, so what I’ve done the past two days might serve as good preparation.

For one thing, we ate common meals at the Lodge. Admittedly, there was no Paul Bunyan breakfast (thankfully!); instead, we had buffets that included a lot of Indian food. Part of the explanation for the Uganda Chapati and Dal and baked on the spot in a tandoor oven naan (!) is the Indian influence that started in the British period; even more helpful in understanding the fare is that the Lodge is owned by the richest Indian in Uganda. And, as we stop at historic Galena on our way home from camp, we stopped for lunch at a restaurant hotel built by the Kenya Uganda Railway and Harbours in 1923. That hotel had as guests Humphrey Bogart and Kathrine Hepburn during the filming of The African Queen.

Speaking of the African Queen, Sunday morning we continued our waterfront activities (we had a few hours downtime Saturday; I did laps in the pool. Several others discovered that being near the equator and in the sun can be a painful experience). While swimming in the Nile might have been attractive, one look at the 14 foot crocs lining the shore and remembering Captain Hook, and the herds of hippos, the animal that kills more Africans than any non-human animal, left me thinking I’ll do the mile swim at camp instead.

We went upriver on the African Queen (you knew at some point there was a reason to mention the movie; not THE African Queen, but An African Queen) to Murchison Falls (Headline: Murchison Falls but no one was hurt), the 200 or so foot high waterfall that gives the park its name. Docking near the falls, we hiked about 2 miles to the summit where we could overlook the falls, a powerful cascade that is one of many obstacles on the river’s journey to the delta around Alexandria. That was our hike for the day.

Returning to the Lodge, we had a speaker from the Uganda Wildlife Administration, who told us something about the history of conservation in Uganda, and the challenges he faces in running the area. Conservation/tourism is important to the economy (it’s the biggest business in the world); ¼ of the nation is in either national parks or reservations. Ironically, in the 1950s, Uganda’s parks had more visitors than any other park in Africa. The disastrous poaching civil wars, as I mentioned, killed people and animals. For example, the herd of 14000 elephants dwindled to 300; it’s now about 1400. One challenge to this park is that commercially viable oil deposits have been found under the park, and, like so many similar areas around the world, the extraction (if it happens) needs to be monitored carefully. He described meetings and agreements that were designed to extract but protect; one feature I remembered is that a pipeline connected to a refinery would have to be underground—those same elephants would crush it. He also discussed, and we ran across an armed patrol on one of our game drives. He said it’s become less of a problem because many countries have banned the importation of ivory.

On our way back to Kampala, we got another taste of the biodiversity of Murchison Falls National Park, and we continued to work on our Mammals, Nature and Environmental Science badges with a visit to a jungle for a chimpanzee trek. Donning rubber boots, we plunged into a dense jungle; the object—the sighting of our closest relatives. For about an hour, our guide took us through the brush looking for the chimps. I was afraid all we’d get for our troubles were pictures of knuckle prints on the ground (that’s how they travel). Suddenly I heard a racket that I thought was some inconsiderate student group—that’s what it sounded like. There was also a thump, like a chimpanzee thumping his chest. We headed toward where the guide thought they were moving, when, lo and behold, we spotted three or four. One ran across the floor of the jungle in front of us, and when I get the video, I’ll put it on Facebook, but spent the better part of the next two hours craning to get a glimpse of the mammals in the treetops. You could tell where they were from moving branches, falling leaves, and the sounds.

I saw a little one. You might say he was a chimp off the old block. Oh, you don’t have to. I did.

May 12, 2018
Being Nile High
As I warned, we are in de Nile, or rather in sight of de Nile, the Victoria Nile (one of the major branches) at Murchison Falls National Park, at 2400 square miles, the largest preserve in Uganda.
It wasn’t always so. Though it was originally set up in 1910, its checkered history included a staging ground as part of the civil wars (it’s close to the border with Congo), at which time many of the animals were slaughtered. The park has rebuilt populations, partly with imports from other countries, mostly Kenya, and culled a rampant and destructive elephant herd. Currently, it has large numbers of giraffes, elephants, monkeys (we have a resident baboon on the hotel grounds who scatters when he sees the maintenance people, but boldly steals from guests; she—it’s a whole baboon family including a really photogenic baby—pilfered a bagged lunch from a table and proceeded to rip it open and devour the food) and other members of what I call the vegetarians—lovers of the grassland and the trees that dot the open savannah. Perhaps the most pronounced feature of the savannah is the sense of space, the expanse stretching as far as the eye can see.

This morning was a “game drive,” starting at 6:15 and lasting until around 10 o’clock that had us over hill and dale, in Land Cruisers (we had to stay on the road) peering into the distance—or up close—for the kobs and Jackson’s hartebeests, water buffalos of various varieties, the elephants, hyenas, and jackals that make the park home. One group spotted a baby leopard, but as I said, we saw mostly the vegetarians, peacefully but warily coexisting. The evening was better since it was partly along the Nile, and the giraffes and elephants in particular came for a drink (the local beer is, naturally, Nile, and as someone quipped, “It’s Nile time.”) It was a little scary driving back in the dark over bumpy roads in an open Land Cruiser.

This was my eighth or so game drive, and as I remarked to Mike Shealy, the logistic director of the trip, it never gets old; more than that, it’s a real high (at least a Nile high?)—watching giraffes munching on leaves, then walking left right left (both right legs move then both left legs move), or watching the semi-predators, the hyenas and jackals, circle and await an opportunity to strike.

To get here (and stay in a lodge that gets high marks for “bush” architecture), it took us almost 8 hours to traverse the 150 miles. That’s as the crow flies, though, and we were driving. About an hour of that was getting out of the sprawling city of Kampala (though it did take us thorough the delightful embassy area), and part of it was waiting for the ferry to cross the Nile. The last 45 miles or so was on dirt roads, which verified what we’d been told in Kampala—Uganda has infrastructure problems, particularly in the North.

On the way, we drove through a lot of small towns; only 10% of the population lives in the Kampala Entebbe corridor. Interestingly enough, many of them had mosques or madrassas; one of the South Carolina faculty told me he was researching the increasing Arabic financing in Africa—Abu Dhabi airfare is under $300 from here.

Second, we saw agriculture that was mostly manual—I saw only two tractors, and one Cat grader—and no horses or cows, though our driver said that in the planting season, cows pull plows. The coops were mostly bananas, and, evoking nostalgia, corn.

Third, we stopped at a white rhinoceros sanctuary. The rhinos were exterminated from Uganda during the wars, No doubt poaching played a role; rhino horns are in great demand in Asia as an aphrodisiac. I’ve been told ground rhino horn costs three times as much as gold.
Rhinos fared better here because interested citizens formed an NGO to reestablish their presence. Around 2004, they got one from Kenya and one from the United States; their child, the first of what is now a “crash” (take a crash course and look it up in the dictionary) of 22, was named “Obama.” The goal is to have around 40 so they can release them to the parks.

During the civil war, both people and animals suffered; from what we have seen, both are recovering.

3-5-10
Announcing that business Uganda could be summed up in those three numbers, a member of the State Department spent about two hours with us at the formidable US embassy in Kampala.

The 3% referred to the population growth in Uganda. I said it’s about 40 million; that would make it 80 million in 24 years. Furthermore, it’s a young population; the median age is 15.7; only 2% of the population is 65 or over.

The 5% alluded to the urban growth. Though the country is still 80% involved in agriculture, urbanization is growing quickly. Take it from me, the sprawling distance from Entebbe, where the airport is located, to Kampala certainly indicates urbanization in this area; it’s almost solid construction. It took us about 1 1//2 hours from the airport, though the Chinese are building a highway that will cut it to half an hour.

The 10% was the number of new cars purchased each year, which is both a strength (an indicator that despite the average income of $700 a year, there is an emerging middle class) and a weakness (sketchy infrastructure and traffic jams). I was struck as we came in at night by the number of trucks alongside the highway, waiting to carry goods during the day.

He then dissected the economy’s opportunities and weaknesses.

On the plus side, he singled out a good climate, and fertile soil. This is an important agricultural area, and, in fact, the main export crop is coffee. 4.5 million bags were shipped last year, making Uganda the largest exporter of coffee in Africa; Ethiopia and Kenya grow more, but also drink more. The crop here is sold to Starbucks (arabica) and to the European Union (robusta). He emphasized, however, that coffee is also something of a minus. It’s shipped out as a commodity, without any value added (e.g., roasting?). I saw somewhere that the difference in cost between the raw beans and the roasted beans was over 50%. If you sell commodities, you’re at the mercy of lowest cost providers, and what money can be made, goes to the folks who add value.

Another agricultural product with potential is milk, but not as milk. Milk is cheap here (20 cents a liter), but turned into casein, it commands premium prices. Another way to add value.

The same scenario holds for oil. Ugandans recently discovered oil, and an American consortium recently landed a $3 billion contract to build a refinery. That’s the first refinery in the country (I believe), and another opportunity for value added activities, and a chance to earn more on the supply chain.

The other big opportunity is to participate more in the world’s biggest business—tourism.

He touched, too, on many of the same drawbacks we’d heard about earlier: infrastructure (or lack thereof); corruption (a relatively stable government, but an underpaid civil service). He said the goal of the US government is to insist on a level playing field, but some bids are rigged, and while there are laws and regulations, sometimes the laws are contradictory—allowing the official to make his choice of which one to follow—and sometimes ignored, for a price.

He, too, emphasized the need to be “on the ground” for a while to learn the rules of the game and how it’s played. He thought that was one difference between the Americans and Chinese. While the Chinese presence in Uganda is not as prominent as it is in Ethiopia (where there were 1 million Chinese reportedly when I was there two years ago), there are 15,000 working on infrastructure projects. The Chinese, he pointed out, come in prepared with the whole package, will have someone on site to make sure it happens, with financing, and as he noted with not a sign of irony, the Chinese are used to dealing with authoritarian governments.

American strengths were in “good will” established by previous presidents from Bush through Obama. There’s a Young African leaders program that sends 1000 Africans to the States for 6 weeks, spent mostly at universities that’s been a real positive; assistance in fighting AIDS and other health epidemics was also a plus. And the US government does assist businesses who want to come to Uganda, or do business with companies in Uganda.

In fact, we just had a reception hosted by the American Chamber of Commerce where the Ambassador spoke, just having returned from a trip to the States which included 20 coffee producers shepherded to a conference. She noted that only 3% of Ugandan coffee is exported to the United States.

Among the other members of the chamber, I chatted with the vice president, and a woman who came here (via Silicon Valley) to work in agriculture, at the time pioneering organically grown fruits and vegetables. She told me that over 40% of the crop rotted because it could not get to market. She’s developed a supply chain of farmers, working with a certifying organization, to buy and dehydrate the crops, which she sells to distributors in the United States. When asked about changes in five years, she gave me two: the exchange rate has gone up (her dollars buy more shillings), and the business has gotten more competitive. Not only has “organic” become more mainstream, but neighboring countries have developed processing and are able to buy here and process across the border. I talked her into some treats for the long ride to the source of the Nile tomorrow—and I’m eager to taste dried Jackfruit! Another tidbit—she said she was invited to come here by one of the queens (yes, the five kingdoms still live!)

I’m about to pack for our early departure, and I’ve realized the title is 3/5/10, and there’s some nice symmetry that today is 5/10. Heading to the area north of the Nile. Soon we’ll be in de Nile.

May 9, 2018
This was Lion country (but not today)
00 19 says my GPS, referring to Kampala, the capital of Uganda. It’s 7824 miles from home—or about 27 hours by plane (via Atlanta and Amsterdam), just north of the Equator.

Three street names near the hotel help me put the history of Uganda into perspective. The first is “Entebbe”, a word in the Luganda language that means “seal’, supposedly in reference to the court that for 500 years administered judgments on behalf of the well-organized Bugunda tribe. The centralized government created a strong state in what is now southern Uganda that the British used to rule, as the British were wont to do, indirectly. No such unity existed in the north and the northern and southern parts of the country still maintain differences, the south being better developed economically.

The second street is George VI, king of England, whose country claimed Uganda in the 19th century as part of the Congress of Berlin. Britain’s main area of interest was the Suez Canal (opened in 1869 accompanied by Verdi’s Aida). As 19th century explorers sought the source of the Nile (we’ll see it next week), the Germans got a treaty to parts of the area; Britain swapped Heligoland to the Germans for the Uganda Protectorate, a kind of federation of 56 tribes, 5 kingdoms under British “supervision”. Unlike most other British colonies, Africans could own land; like other British colonies, the British played one ethnic group against another. 40000 Indians arrived at the turn of the century to help build a railroad from land-locked Kampala to the coast. 2000 died from fever—and lion attacks (hence, the title today); the lions are gone, at least from this city of nearly 2 million people. So, mostly is the rail traffic. The station remains, serving mostly domestic traffic because the tracks were stolen for steel (steel was stolen?) and the gauge was non-standard. However, English is spoken widely (one legacy), and the currency is the shilling (another), plus there is a Parliament.

The third street is named for Nasser, the Egyptian ruler, who helped topple King Farouk and the British indirect rule in Egypt. That (and the success of the Chinese revolution and the spread of the Cold War around the world) helped convince African nationalists to push for independence. That happened here in October 1962, which ushered in a turbulence that has left its mark to this day.

For one thing, the British used mostly Northerners in the military; and if you’re old enough to remember Idi Amin, he was a northerner who “moved to the Left”, resulting in 300,000 dead (if you criticized, you were done); the enforced departure of all Asians, crippled the economy since Asians dominated businesses, paying up to 90% of the taxes.

Several civil wars later (today), Uganda has a population of 43 million, with an average formal income of around $700. Much of the income is “informal”, partly because of the difficulty of doing business here. We got to see the local market, a fascinating open air “Saturday market” type, with farmers bringing produce to the city—bananas, mangos, potatoes, garlic, and some not so Western additions: I liked the fried grasshoppers, as well as the usual pigs, cattle, etc. With so much of the economy informal, it’s not surprising that there were government sponsored posters “Thanks for paying your taxes so we could pay for schools, etc.

We had a few speakers from the American Chamber of Commerce talk about doing here business here, -one a Quad Cities UIowa grad, who has been here 5 years , and sounds like he runs about 10 businesses. He talked about the great opportunities for entrepreneurs, despite the fact that the corruption ranks 150 of 179 countries; the lack of infrastructure; the bureaucracy in starting and maintaining a business; and the fact that employees get paid by you while working to start and run their own businesses.

I think his point was that you need to be on the ground to understand how to do business in any country, especially here. “That’s just the way it is here,” he repeated several times.

More inspirational was a fund manager from Impact Africa, whose goal is to put money into organizations that result in economic, political, or social improvements. I took lots of notes on her presentation to share with my classes—IWU president Myers used to say, “Go forth and make good—and do good” and her talk insisted it was possible to do both—and make money. One of the faculty and I were discussing how mission statements have changed from “make money for shareholders” to “feed the world.”
I’m taking the notes to my stockbroker too. Both the lion and I will sleep tonight.