Since the sinking of the converted fishing boat, with the loss of scores of Ugandan lives in December, there have been many references to ‘balancing the boat’, as a metaphor for the way we do things in Uganda.
The obvious problem with balancing this particular boat was that it already had a big hole and was leaking, so no matter how much balancing was tried, the boat was destined to sink.
Some people feel that in our national policies we concentrate in ‘balancing’, while not dealing with underlying issues which will cause us to sink.
Having been Mayor of Makindye, which includes many slums, I am acutely aware of the number of unemployed and under-employed young people we have in Uganda.
The President is also very aware of this issue, especially since the Honorable Robert Kyalagani came on the scene, because these unemployed youth are his main constituency.
In answer to this problem the President has developed an initiative to distribute cash, in order that young people can set up small businesses.
The rationale is that Ugandan young people are very entrepreneurial and the only thing stopping them is the lack of capital.
During my term, KCCA had a similar initiative under the ‘Youth Livelihood Program’ and it must be said that the results were not encouraging, with few of the enterprises surviving.
The reasons for the failures included theft, lack of training, lack of preparation, laziness, and the belief that this was free money from the government.
However, it is also true that lack of capital is one factor in preventing small businesses getting off the ground.
Therefore it would follow that if lack of capital is a factor in preventing the development of small businesses, we should take any measure possible to ensure that capital is accumulated and not squandered, as is the case in the Indian community.
This is the rationale of savings and loans cooperatives, which the government actively supports.
So the development and support of SACCOs in these poor communities is positive, but what are the other factors preventing people from building up savings?
One only has to drive around Namuwongo or Kabalagala to witness the advent of the sports betting shops.
This phenomenon of sports betting has taken Uganda (and many parts of Africa) by storm.
It has changed the face of towns and trading centres where sports betting shops are now the most prominent businesses lining the streets.
Furthermore, if one studies their locations, one realizes that these betting shops are clustered around trading centres that serve the poor.
They are never located in upmarket shopping centres such as Acacia Mall, or middle class areas like Muyenga, but in places such as Kabalagala, which borders the Kikuba Mutwe slum.
They are also clustered around boda boda stages, because these are the men with a few shillings in their hand, (which they should be using to support their families).
This is the demography from which sports betting customers are drawn because the relatively affluent Ugandans who frequent the shopping centres rarely bet.
I passed through Kabalagala with some visitors and was pointing out the small shops and pubs, when one of the visitors asked if we had passed a garage selling motorcycles.
In fact, it was a sports betting shop, which had numerous boda bodas parked outside.
Therefore, as the government tries to develop ways of introducing capital into the poor community to generate employment, they should first plug the hole that is allowing money to leak out of that very community.
A large percentage of this money is not even staying in Uganda, because many of the sports betting companies are multinationals, which have taken advantage of the opportunity that sports betting offers in Africa.
I have met several expatriates recently who are working in sports betting organizations.
Rather than trying to balance this leaky boat we should first fix the leaks.
The government is currently taxing sports betting organizations, but this is also counterproductive, because that tax (and the profits of the betting companies) comes from the slum dwellers.
Personally, if I were the Minister of Finance, the first thing I would do would be to ban sports betting shops.
They have no economic upside, and only suck money from the poor. It does not make economic sense to pump more money into the very communities from which it is so obviously leaking. First plug the leak.
This article was initially published on Dr Ian Clarke‘s Facebook Page