Once upon a Sunday this month in a fairly affluent neighborhood of a town called Entebbe (once known as Port Elizabeth) a family was settling down to the midday meal. In the kitchen a beef stew was being prepared. The lady of the house, her children and the maid were doing the sort of thing that people do on Sunday’s. On the telly was a South American “ Kinigeria” or telenova. These TV shows from the 80’s with tales of love, money and family intrigues are the balm of home life. I suspect without them and their African equivalent, the Nollywood voodoo types, homemakers and their helpers would find the daily grind of household chores very dull. This Sunday was no different.
Except now I have to say why this story got me and my friends laughing like hyenas ever since. The lady of the house is the sister to our buddy Mandela. This is a true story therefore. According to Mandela’s sister her maid went out to check on the “matooke” (boiled plantains that are traditionally served with beef stew) they were missing. The matooke was being cooked outside on a charcoal stove.
“ What do you mean the matooke is missing?” she asked?
The maid replied that the meal had disappeared. Someone had scaled the wall fence while the family was invested in the love triangle on TV and matooke-napped their lunch. They probably had wanted the beef stew which in my view had announced the family’s good fortune.
Uganda is in the midst of an economic crisis. Crime like we wrote here is price sensitive and by many accounts from friends including home invasions and car thefts, it is prevalent. The thief who ate lunch may have taken the matooke meal (it was just about done) to his family. If they did not have a sauce I wonder whether he would patrol another neighborhood with his nose to see if the score may land something. Perhaps fish? He is one of thousands feeling the pangs of hunger in the wake of rising food prices.
BOU’s magic
Meanwhile Adam Mugume (PhD) has offered an explanation to the mystery above. Mr. Mugume is the head of research at the Central Bank. It’s a 3 million shilling advertorial on page 24 of the New Vision, the publicly traded but government-controlled newspaper. While stating that “inflation had exerted significant pressure on household disposable incomes and discretion to spend (i.e. fathers have to steal other people’s lunches because they are broke)”, he says its not unusual nor do they last long. He also says Uganda sends the bulk of its food away to places like South Sudan. Banning their exports would “ do more harm than good”. There is a lot of bluster and probability in what Mugume argues is the effectiveness of the Central Bank’s actions on the economy. Am unconvinced of course that their efforts to deal with the problem (discouraging borrowing of credit and therefore expenditure, investment and growth) is smart thinking. It may be the only thinking granted. Mugume rubbishes other views, and says statistical data used by those who provide them are “stale” like leftover food (my emphasis). There are a couple of things missing from his analysis.
First it too is based on statistical extrapolations (did I say that?). Secondly BoU has not disclosed other problems in the economy like its much criticised currency reform. Two currencies are circulating con-currently and the volume of money is so high that I doubt very much efforts to use monetary policy will reign in inflation. BoU could withdraw one currency completely and this would be better than raising the CBR rate. As I said before one estimate of the excess liquidity due to this and allegedly counterfeit is 5-800 billion. There are theories or rumors about this and BoU has not offered any real explanations. More to be said about this later. The conclusion is that BoU is taking a gamble to see if it works so in the meantime watch your lunches.
