IS BARACK OBAMA THE SAVIOUR OF THE WORLD

Obama on the telly,Obama in the papers, Obama on bumper stickers. Why, you wonder, has the world taken on to Obama to almost mystical, spiritual proportions? And its not in Africa alone. Although the Africans have clearly outdone themselves on this one. Sometimes you wonder, who is happier about Obama's poll victory- the Americans or the Kenyans for instance? Obamamania has been witnessed in Japan, europe and the middle east. A friend of mine thinks this cant-get-enough- of Obama thing is a commentry on our own state of affairs. That because we are so repulsed by our own politics especialy down here in Africa, we look to Obama as alternative political redemption. That if we loved our politics enough we wouldnt be too distracted by Barack Obama. That its the same reason the english premiership has a cult following in Africa. That we cant stand our own soccer clubs, match fixing and mal foot ball administration. The truth of course is that Obama is a very inspirational human interest story in its own right but does our craze for him say something about how we feel about things in our own countries? Is the world looking for a saviour out of all the hopelessness, the despair, the financial quagmire in which we are mirred?. Its food for thought.

IS THE GLOBAL FINANCIAL CRISIS OVER HYPED?

Clearly the world is in the midst of a serious financial crisis and my intention is not in anyway to belittle the seriousness of the situation. It does appear though that the response of the global markets and world governments has been an over- reaction. Almost all major world economies have announced rescue packages to banks and financial institutions to stabilize economies. The US$700 billion congress- approved package as well as the bail out of AIG in the US are all well known. Europe has also caught the cold with many countries announcing rescue schemes and guarenteeing bank depoisits. The dutch government has made a loan to ING bank.
One of the the inardvertent concequences of all this has been to trigger off panic in the financial world with many institutions wary of lending and a cut bank on investment financing. There has been a rush of panic all over the global financial system and even institutions that are not yet touched in a real way by the credit crunch are in an artificial crisis mode. The result is that fear is dictating business decision making and the credit crunch has been made out to be much larger than it really is. The western financial system, from which the rest of the world takes cue, is behaving as though we are in the worst case scenario already and have skipped the preliminary stages. Consumers are wary of spending and banks dont want to lend to businesses, further excerbating the crisis. Yes, there is a crisis but is our response measured? Are we building confidence in the global financial system?






















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UGANDA'S JAZZ SENSATION!

In mid August this year,I attended Isaiah Katumwa's Jazz perfomance at Kampala Serena Hotel. It was everything it was billed out to be. Isaiah Katumwa is a truly world-class act which is not what you can say for many Ugandan artists. I kept asking my date why he is not an international star already. Boy, he has sure got the goods. Absolutely professional. He put on a several -hours, non- stop show without any opening acts or interlude.He gets the biscuit for stamina alone.

The jazz he plays is a unique brand unlike much of what is on the market. Its John Coltrane meets Hugh Masekela with an infusion of Ugandan traditional ganda beats. It was a sumptous feast for the ears and even for the eyes. The brother knows a thing or two about grooving too!

Katumwa must have been abroad for most of his earlier career because he burst on the scene only about last year. At least I got to know about him last year at a local Kampala church where he was introduced and did a short gig. It was endearing from the start.

At the show, all his hits were perfomed and were started off with a brief intro. There was a clear crowd favourite. The crowd simply couldnt get enough of it.

The stage organization and multi media outlay was another plus. Most of the video aids were appropriate to the music played and they spiced it all up.

The supporting band deserves mention too. They were up to it and a handful have what it in them to break out on their own. But Isaiah Katumwa was the offering of the evening and he didnt dissapoint.
As advertized his is truly Jazz with an African accent!

HIGH INTEREST RATES HAVE PUT BRAKES ON UGANDA'S ECONOMY

Earlier this year a scheme was announced to enable public servants own lap top computers. Unless one paid cash upfront, the catch was a bank loan with a 20% interest rate. A quick calculation showed that payments one would make on the interest alone would be much
more than on the lap top itself!
Many Ugandans are choking under the weight of high loan interest rates and despite the pleas of Ugandan authorities, the banks have kept the interest rates up there. Little surprise then that virtually all banks in the country turned handsome profits last year on the back of a very lucrative lending regime.
The Bank of Uganda is reluctant to intervene more directly and lower rates and hopes licensing more banks will bring the rates down. Thanks to the earlier era of structural adjustment, money markets were liberalized in Uganda.
The truth of the matter is that on interest rates, Uganda is more catholic than the pope, because interest rates in the United States are set by the FED, and the interest rates in Japan, Australia United Kingdom are set by their central banks. Closer to home, the central banks in South Africa and Kenya set interest rates.
Interest rates are too critical to the economy to be left purely to market forces and not even the most capitalist economies practice what they preach. Interest rates determine almost everything else in the economy. High interest rates discourage consumer spending, they influence returns savers can make on their investments and therefore investment spending, the cost of mortgages for home owners, the outlook for jobs and perhaps more, critically inflation. Ultimately it is the Ugandan consumer who pays the price of high interest rates as these are passed on in form of the pricing of products consumed.
The bank interest rates in Uganda are within the range of 20-35% on average. In the microfinance industry, the rates are even scandalously much higher. Some charge between 12 % a month. There have even been adverts of those who charge interest rates per week!
A recent study showed that the majority of new small businesses in Uganda don’t make it beyond the first year mark. The cost of credit in Uganda is undoubtedly part of the story.

If the borrowing rates were much lower, the economy would get a big boost and economic growth rates would go up. When lending rates are down they encourage borrowing hence investment and in turn creation of jobs. When rates are high the price of goods and services becomes high and then you get into inflation. Now imagine a situation where these rates are significantly reduced and the impact they would have on commerce and economic growth.

Ugandan banks will argue that the price of money is high as well as operation costs and that lending in Africa carries much risk. The public will continue to view high interest rates as efforts by banks to maximize profits in an oligopolistic market.
In neighboring Kenya, parliament in 2000 passed a bill to regulate interest rates. Under the bill, commercial banks can not set their rates more than three per cent higher than the rate fixed by the central bank. Interest rates in Kenya hover between 12-16% while in Rwanda they are between 16% and 18%.
A limited intervention in setting interest rates by Bank of Uganda is advisable. Intervention in interest rates was credited, partly, for the rise of the economies of South East Asia. Joseph Stiglitz, ex- chief economist at the World Bank and a Nobel prize economist, favours this approach. Unless Interest rates in Uganda are reassessed, the brakes on the economy will remain in force.

CHINA'S EMERGENCE AS A DOMINANT ECONOMIC POWER IN AFRICA

First we were afraid of the wolf, then we wanted to dance with the wolf now we want to be the wolf’ a Chinese Central bank official used this analogy to describe China’s world trade rivalry with the United States.Ever since Chinese President Deng Xiaoping declared ‘to get rich is glorious’ and launched China into an era of industrialization and export-driven growth, China has never looked back. Chinese industrialization is unfolding at an unprecedented speed while driving an enormous demand for raw materials and new markets. China has been branded the ‘factory of the world’ for dominating global production of all goods imaginable from safety pins to domestic appliances. The most popular products on American and European supermarkets shelves now carry the ‘Made in China’ label, favored because of their cheaper prices owing, partly, to low labour costs in China.Pick up a souvenir from any western capital and chances are that beneath it will be the label ‘Made in China’. According to Thomas Friedman author of ‘The world is Flat ’ Wal-Mart , the world’s largest supermarket chain, in one year imported $18 billion worth of goods from its 5,000 Chinese suppliers. (Friedman doesn't do the math, but this would mean that of Wal-Mart's 6,000 suppliers, 80 percent are in one country -- China.)And it’s not only safety pins that should worry the west. China recently announced that it was going to begin production of commercial jets, long the domain of Boeing of the United States and Airbus of Europe. And it doesn’t stop there. Petro China is now the third largest company in the world having displaced General Motors of the United States. According to Newsweek, China now has three of the world’s biggest five companies by market capitalization. With US$ 1.2 trillion dollars market capitalization, Petro China is now the world’s most valuable company.The United States has for long battled China because of an unfavorable balance of trade position. China exports much more to the United States that the latter imports from the United States. The Chinese avalanche has not spared Africa as well. Its scramble and partition of Africa all over again, only this time, its China’s turn. It has been widely reported that China now lends three times more money to Africa than the World Bank.Take a moment and think about that. We are in the midst of a shift in balance of power in Africa with the Chinese coming in as the new kids on the block. Considering that the west has long dominated financial inflows into Africa as well the IMF/World Bank system and therefore called the shots in these parts, China’s new investments and lending to Africa give it unprecedented influence and clout on the continent. Indeed when the west wants a change in Sudan’s Darfur policy, it’s to Beijing they run. China is the leading export destination of Sudanese crude oil. Recently, a billion dollar infrastructure loan to Democratic Republic of Congo was announced by China which has a keen eye on Congo’s rich mineral wealth.For a country that has known conflict for most of its post- independence history, the prospect of finally having financing to build basic roads and railways is an offer Congo can’t refuse. The African Development Bank says African trade with China rose from 10 billion dollars in 2000 to over 40 billion dollars last year. Reuters estimates this figure to have leapt to US$ 55 billion this year.Already the banking sector has been hit with the news that China’s ICBC bank has bought a 20% stake in South Africa’s Standard Bank, the parent company of Stanbic Bank Uganda, and this was done with a record cash purchase of US$ 5.6 billion dollars, the single biggest foreign investment anywhere in Africa.There has been market speculation that China Mobile is set to make a bid for MTN, Africa’s largest phone operator with the share price increasing by 6% on the prospect. China Mobile recently bought an 89% stake in Pakistan operator, Pakistel.All this is going down well with African leaders. President Mogae of Botswana has already remarked publicly that the Chinese treat them as partners for a change compared to the Europeans who treat them as subjects.Locally, the lure for Chinese products has proved too strong to resist for Spear motors, the local Mercedes Benz franchise. Spear Motors now deals in new Chinese vehicles made by the Great Wall Motors of China at some of the cheapest prices available for brand new vehicles in Uganda.A Ugandan entrepreneur is doing brisk business exporting recycled mineral water bottle material to China at very lucrative rates. Consider that Uganda’s State House was built by a Chinese Contractor and that the biggest conference centre in Dar Es Salaam is to be built and funded by the Chinese.So, what does China’s new scramble for Africa portend for the continent?China doesn’t have the imperial ambitions that came with the earlier players in the scramble and partition of Africa.However, the fact remains that African nations are largely raw material exporters and markets for Chinese Industry and until that changes, true partnership would be anything but achieved.

OBAMA CAN WIN IN NOVEMBER

Barack Obama’s nomination as the Democratic Party’s nominee for United States President has been met with utter euphoria in Africa. His victory was greeted with street celebarations in neigboubring Kenya where his father originated. In Kampala, the day after it emeged that he had clinched the nomination, Obama was the talk of the town. I have even seen a handful of cars with Obama ’08 stickers on Kampala streets. Indeed it would seem that Obama carries not only America’s hopes but those of Africa as well.
His nomination has been historic being as it is that he is the first African American, ever, to clinch nomination of the Democratic Party. At the start of the primaries few would have given him more than a long shot at winning He was up against Hilary Clinton,a former first lady, New York Senator, husband to Bill Clinton. The duo are a dominant force within the democratic party .There political savy is legendary and has been dubbed the’Clinton machine’. Despite starting the race as an underdog in the polls, the American public gradually warmed up to his message of change. His win in the Iowa primary gave him the momentum and turned him into the front runner with a string of wins in more than eleven states.
Obama has had strong showing among college-educated Americans, the affluent and young people in addition to his appeal to indendents, those neither democrat nor republican. At the start of the primaries, African Americans were reluctant to embrace him given that he has no slave-roots and many questioned whether he was ‘black enough’. At the start, the African Americans stuck with Hilary Clinton who seemingly had a better shot at the white house. With a string of wins, the African Americans graduallly came on board and they are now a core constituecy of his and have backed him with 80-90% in recent poll results.
Winning the nomination is only the start. Obama takes on republican John McCain at a time when their prolonged democraticc primary with Hilary Clinton has left the Democratic Party divided. His candidature has shown gaps. Hilary continued in the race partly because she had more support among blue-collar workers, older Americans as well as strong hispanic support. Obama needs Hilary Clinton as a running mate to unify the party. There are of course questions about how well Hilary can play second best. Her defiant speech after Obama’s victory didnt help matters.
Obama needs to brace himself for the Republican party’s legendary attack machine. His background will be doubly scrutinized. Remember John Kerry and the Swift boat veterans?
The state of the USA economy favours him. There are high oil prices, the housing market is in a down turn and the economy is said to be in a recession. Obama needs to take advantage of this in his campaign.
John McCain has vowed to stay in Iraq for ‘a hundred more years’, a very unpopular stand and Obama needs to step up to the plate on Iraq which he did effectively in the primary.
Unlike other countries where the popular vote is the decider, in USA different states have different electoral weights. Obama has to win battleground states such as Florida and Ohio. Remember Al Gore who won the popular vote but lost Florida?
Obama’s nomination is testimony to how much progress USA has made on race relations since the Jim Crow years. The jury is still out on whether Americans can overlook the colour of Obama’s skin and consider him purely on the merit of his candidature.
For Africans, a propsective Obama presidency would not bring any signficant change in Africa’s fortunes. Unlike African presidents who wield enormous power and influence and can make things happen, In the USA, institutions are greater than individual presidents. Major decisions have to go through the legislature or both houses of congress.As Africans, Obama’s candidature has largely symbolic value, about the possibilities open to those with roots and heritage in Africa. Yes we can!

OBAMA WINS NOMINATION

Stayed up late last night on CNN waiting for returns from South Dakota and Montana, the supposed last states in the Dem primary.Even before these states' returns were in, it was reported that Obama was just a handful of delegates away from clinching the nomination and one by one they began going Obama's way. It was a truly historic moment. No African American had ever won nomination by the democrats or republicans so Obama was making history and we were in the moment- watching as history was being made. One by one the delegates pledged themselves to the Obama column and eventually Obama surpassed the minimum required delagates to emerge winner. And bang! history was done. Few would bet that Obama would win at the start of the Dem primaries. Its testimony to how much America has progressed on Race since the Jim Crow years. For Obama it was an awesome audacity of hope to believe that he could ever do it. Even the most optimistic people would never have given it to him. Indeed, yes we can!
Obama will need Hillary Clinton on the ticket. The primaries showed she has strong support among white blue collar workers and hispanic voters, which are not Obama's strong points. It would be a dream tiscket that would unite the dem party behind his candidature. There are of course questions about Hilary, how well can she play second?, and the role of Bill Clinton in such an arrangement. Her defiant speech after it emerged that Obama had emerged winner didnt help matters. Presidents always prefer vice presidents who are loyal. George W. Bush chose Cheney as running mate mainly because of this.
To attain victory in November Obama will need to win battle ground states such as Florida and Ohio. He has brought many new young voters on board who were initially indifferent to politics. He is also favoured among independents and should build on this to reach out to the more traditional demographics. He has shown this ability before. Initially African Americans were skeptical about his prospects and some even questioned if he was'black enough' but they have gradually embraced him with 80-90% percent in recent state polls. Obama needs to be aware of the Republican attack machine in the general election and should brace himself for dirt tricks and a dig -up on his background.Ask John Kerry, remember the Swift Boat Veterans?
In Novemeber we shall have an idea of how far America has progressed on race and whether Obama can be see purely for the 'content of his character' and what he has to offer America and not the colour of his skin.