Monday, August 29, 2016

TAX ALL LAND TO PREVENT ENCROACHERS

This week top clergymen form the Church of Uganda were nearly lynched by an irate mob while on a tour of land the church owns that has been allegedly encroached by hundreds of residents.

Soon after the harrowing incident, the church announced plans to lease out their land about 80 square kilometers dotted all over the country as way to prevent encroachment.

If ever there was a sign that things were getting out of hand it had to be this one. That residents can attack men of the cloth, pelt them with stones and threaten to send them to a fiery death, what more can be said?

"We take land for granted in Uganda because there is actually too much of it lying around. Believe it or not there is no land pressure in Uganda. Apart from the aforementioned unutilised land evidence can also be seen in how we build – mostly bungalows and how there is always idle land for encroachers to settle on....

It is a moot point but how a people handle land will determine their level of development. Because land is where all wealth is derived from. More directly it is where we grow our food, where we build our homes. Indirectly assets like shares are derived from companies, which seat on land to operate.

To the extent that your land property rights are not well defined is the extent to which you can or cannot extract value from the land.

Think of a person occupying land without a title. He will not build a permanent abode on it knowing that the rightful owner can come a long anytime and repossess. He will not cause developments like roads, water and power networks because his ownership is unsure. That means the value of the land is not rising, in fact it is depreciating since the illegal tenants are an encumbrance on the land.

In the event that the illegal tenant is foolhardy enough to invest heavily on the land, attempts to dispossess him will inevitably turn bloody as he has no recourse to the law to defend his “right” to the land.

We have somehow been blundering around with our unclear land situation for a while, but day by day issues are coming to a head as land pressures mount.

"The move by the Church of Uganda to lease out their land is confirmation of what I have always argued. That to put our land to productive use the landowners need to be compelled to do so. Church of Uganda has been compelled by the threat of encroachers to release the land to more productive entities, but I argue all land should be taxed – farm, residential, commercial and industrial...

As it is now landowners are content to live their land unproductive, even in the city center, as they raise funds to develop it. In the process denying people work and the society the benefit of the products or services that would be generated if the land was activated.

Tax all land so that the owners will scratch their heads to be more productive and pay off the tax or failing to do so lease the land to more productive agents – as the Church of Uganda is doing now.

Uganda is a big coffee and tea growing nation because the colonialists compelled the farmer, using the poll and hut taxes, to grow coffee. Our forefathers did not grow coffee out of some great consensual vision but by compulsion.

"But to tax the land we need to invest in identifying and registering all the land in the country. And we need to brace ourselves for the fight from landowners, whose honeymoon will come to a crashing end and those people – read squatters, who are benefitting from the current ambiguous state of affairs...

But the tax will benefit everyone concerned.


The land owner will make more income whether he puts it to use or leases it out. Tenant will have more secure tenure. The government will see an immediate spike in revenue collections. And the economy as a whole will benefit from greater productivity.

Tuesday, August 23, 2016

FREE PUBLIC INTERNET IS LONG OVER DUE

It seems like another lifetime ago.

In my initial days as a Reuters correspondent I had to file stories to our Nairobi office via fax machine (who remembers what that is?) On week days I would do this from the general post office, but on the weekend a company, Starcom, had bureaus in town from which I could send my stories.

So I would either type out the story or write it long hand, go to one or the other to fax my story. And when I was done I would wait by a phone there for a call in which Nairobi would confirm receipt of the story. The confirmation notification was not often enough. And if service was not good that day I would literally read the story down the line.

By the time I left Reuters seven years later I had a lap top and a modem, which I could jack into a telephone port and send stories down the line. Our phones were still the 2G variety so there was no internet. I might have texted a story to Nairobi during my time. This was before the dongle era – which has come and gone.

But even with the limited capability my productivity, judging by story output, was several fold higher than my early days. Other factors like experience played into this but the improvements in technology were key.

So last week when the government announced that there will soon be free public internet in Kampala, initially confined to certain hotspots but, which it can be expected with time will be rolled out to the whole city, I could immediately appreciate the benefits that will come with it for the general population. The free service will be from 6 pm to 6 am.

"A person, people or country is as rich as how accessible information is to the people. A qualification would then be that wealth comes to the extent that this information is put to use....

Put even more simply you are richer or poorer than the next person by virtue of what you know or don’t know.

Given the odds that only a small percentage of the population will utilise this information effectively, society should be better off having vast amounts of information available, so the small percentage can lift themselves up and hopefully carry everyone else along.

The World Economic Forum estimates that a 10 percent increase in broadband penetration leads to a 1.4 percent increase in GDP and that a doubling of mobile data can lead to 0.5 percent increase in per capita GDP. They say most of this comes from e-commerce and online advertising, it also comes from the savings that come with not making unnecessary movement or fewer phone calls or more efficient decision making.

It is preaching to the converted to enumerate the benefits that have come with greater connectivity, but we need to do much much more.

In western economies data bases are integrated so all my records – birth dates, parentage, career path etc are linked, this alone does away with a lot of bureaucratic red tape needed to open a bank account or travel or even shop.

With improvements in communications technologies payments too have been made much faster and credit more accessible.

"In his seminal book the “Origins of Wealth “, author Eric Beinhocker  deconstructed the concept of the wealth, going back to first principles before revealing that the source of all wealth is knowledge. The people who are more efficient in generating, storing, transmitting and analysing knowledge will be the wealthiest....

That is why to try and catch up to the west’s level of development is a pipe dream without tackling the basis of that wealth – communication systems, be they the traditional road, rail and air to the more current ICT networks.

While we are moving, there is evidence there is a narrowing of the digital divide in terms of devices used between the developed and underdeveloped world, the divide is widening, since the west is not standing still in not only consuming more bandwith but in finding ever newer applications for the information while we are behind the curve on the uptake of the latest technologies.

It is good though that government is beginning to put ICT nearer the front of its thinking on where this country is going and what will be the key drivers. Although I remember a presentation b y a UNDP consultant around the beginning of this century which identified ICT development as one of seven competitive advantages this country can develop. But then again government works in mysterious ways.

"An embracing of ICT can bring quantum leaps in efficiency and productivity in every avenue of life you apply it to. Given the need for urgency in raising the productivity of the economy, it is a moot point that ICT issues need to be taken more seriously than we have been doing so far....


Personally I would rather have government subsidise the private sector to perform the service, just so we benefit from private sector efficiency, but the government initiative is a good start and may very well open the door for private players to take it over and run with it.