By Constantine Okwi, Former Kibale County Member of Parliament Aspirant in Pallisa District.
Most fond greetings Your Excellency the president of the republic of Uganda.
Your age and experience bounding, i would like to commend you for the gallantry that you claim in the sphere of total liberation and development of Uganda and Africa at large.
You have been tenaciously promoting the initiative of emyooga, to the extent that you recently retorted; “The Emyooga is a very good idea. It will work. If anybody makes mistakes, they will be punished. I have asked the minister of finance to increase funding to include the Emyooga’s that were left out, brick-laying groups and other groups,” and you noted that the fund is akin to a village commercial bank.
Allow me to politely say that it has already failed; thus
a) UCB and Cooperative banks had a strong village presence and propped by government. However, because government depends on the citizens by way of taxation, it is hardly a successful lender. The citizens always have a sense of entitlement and are tempted to hold that their money has just returned to them. Besides, government recovery machinery is weak since there is usually no collateral that the borrowers commit such that the enforcers can liquidate it to recover the unpaid loans. The evil of ;this is public money” makes it difficult to successfully recover it. I shall not dwell on the ineptness and venality of our officers in charge. By the way, the only feasible action is arrest and imprisonment, but if you arrest and imprison tax payers or family heads, you shall only create more misery. Subsequently, the money shall have to be written off as a bad debt, like i believe it happened with YLP, you know, these boys and girls are now living peacefully, no more need to run to the bushes, for there is no follow-up. I see this village bank also falling without meaningful impact like UCB and Cooperative Bank.
b) More political than economic. Your excellency, if anyone is deceiving you that the people interpret emyooga as an economic tool, than a political one, that person is an enemy of Uganda. The terrible coincidence is that the idea hit the headlines at the time we were in an electoral cycle mood. Now that you were victorious, the voters are waiting for the reward, like they did with YLP after 2016 elections. Consequently, the composition of groups and individuals benefitting are those that may not have the knack, training or experience necessary for profiting from borrowed money such that it can be paid. Consider the anomaly that these people are borrowing to hoodwink authorities that they are saving. after receiving their x3 from emyooga, they return a portion, X1, to the first lender, they thus begin with less than sufficient to generate capacity to pay the emyooga fund. Simple economics casts this as a recipe for financial disaster, thus Emyooga shall fail.
c) Bad time to expect anyone to pay back your money. Your excellency, the COVID19 pandemic has hit hard on the economy and without access to markets, even if emyooga led to increased production, the market is constrained and thus this output shall not be liquidated. unless you accept payment in kind, i don’t see you getting cash from the citizens. Let me share a case of a second hand cloth trader in Katakwi who traverses daily open markets to sell his merchandise, with closed open markets, this man has no market and can’t sell. he shall therefore not be able to replenish the fund.
d) What would have worked?, Your excellency, if you found a way of bringing down rates at which commercial banks lend to the market, and concentrated on giving the people knowledge and skills of wealth creation, you know, it is the ideas first, then the money, not the money first, then the ideas, the banks would lend to the right people, that shall be able to run their enterprises well, get wealthy and employ others. this way, you are sure of success.
I promise to continue with more facts and some economic principles if you so desire.
These are views of a young man, may be 1/4 of your age, so if they find them ridiculous, just lough and ignore them, if i grow up and learn better, i shall also just laugh at this stupidity.
Thank you your excellency With Love
For God and My Country.