By Dr. Ian Clarke
One of Aesop’s Fables is a story about a man who owned a goose that laid golden eggs. Obviously, owning this goose made him rich, but as he became wealthy he also became greedy, and was frustrated that the goose could only lay one egg each day. He had made commitments that required increasing amounts of money and imagined that the goose must have a big lump of gold inside, so one day, in an attempt to get all the gold out of the goose, he killed it and opened it, but alas he found nothing. He then realized that he had killed the source of his wealth.
This story sounds far fetched, because no one would be so stupid and short sighted as to kill off a goose that laid golden eggs, but when one hears some real life stories, the conclusion is that human beings are short-sighted and greedy enough to do such things. We see such greediness in business and in politics, where people are not satisfied with what they have, and end up losing it all, in the pursuit of more.
It is widely acknowledged that African economies have so much potential, but in most cases this potential is far from being realized, so why should this be? To state the obvious, no economy can perform if it is first raped and pillaged by those in power, leaving it emaciated and weak. Some would say that this has happened in Uganda, when potentially profitable public entities such as Entebbe Handling Services were parceled out and sold off to insiders, or when a state enterprise such as Uganda Airlines was mismanaged and allowed to fail, or more recently, when Uganda Telecom Ltd was pilfered, leaving it with massive debt. These particular Ugandan geese were sold, strangled or starved to death, leaving no golden eggs for the public coffers.
In any nation, the golden goose is a healthy economy that lays the eggs that pay taxes, which then support the public sector to provide services for the public good, including health and education; therefore if the economy suffers we all suffer. Zimbabwe is an example where certain parts of the economy were first killed off for political interests and the rest collapsed. When President Mugabe first took power, he inherited an economy, which was laying golden eggs from the agricultural sector.
During his first years in office he left the minority white farmers alone, because they were generating wealth for the country. But there came a point when political interest and self-preservation took precedence over economic considerations, and he had to sacrifice this goose in order to sort out his war veterans’ issue. Subsequently the currency went into free-fall, with hyperinflation and the creation of economic conditions that made it difficult for businesses to function at all.
In Uganda, during Amin’s reign the same thing happened, because it was politically expedient for Amin to expel the Indians, (a popular move at the time). In the short term, ordinary Ugandans benefited, but they did not have the expertise to run the businesses so the economy collapsed.
While these are extreme examples of killing the economic goose, there are many smaller issues that make it difficult for the goose to lay eggs efficiently, – small things such as non tariff barriers, monopolies on transport, high cost of haulage from the coast, high clearance charges, high duties and taxes, inefficient bureaucracies and the ever present effect of politics. The economic goose is not killed off, but she is weakened by the burdens she carries.
A few weeks ago I was at a conference in Tanzania at which a young entrepreneur from West Africa remonstrated about the difficulty of getting packaging, which was obstructing the growth of her business. She had developed markets in the USA and instead of exporting the raw materials to the USA where they were finished and packaged, she decided to create employment back home by setting up a factory, but was frustrated by so many obstacles which were placed in her way.
‘Get out of my way and I will bring you business’ she told government officials. Despite the ‘one stop shop’ in Uganda, any new business will still need many gofers, lawyers, government contacts and a ‘local partner’ to guide it through the maize of doing business in Uganda.
This is why we have the ‘Ease of doing business’ index, rating countries on how easy it is to do business in each country, in which Uganda comes in at 115, Kenya at 92, Tanzania 132,Rwanda 56, and South Sudan186 (out of 190 countries rated).
The goose of the economy must be well looked after, if it is to continue to lay golden eggs. The reason why many African economies do not reach their potential is that they are still starved, strangled or killed for short-sighted selfish individual gain. So it seems we have not yet learned the lessons of this particular fable.