Democracy is the road, not the car

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Climate of fear and other clichés

https://www.bloomberg.com/news/articles/2017-07-06/climate-of-fear-engulfs-rwanda-s-upcoming-election-amnesty-says

It is election season in Rwanda, cue the clichéd headlines, it’s almost like you can guess them before they even go to print. I got a contact from an old friend who is a journalist in UK, I didn’t want to bother, he had already written his story, but he just needed quotes and pictures. I called “Climate of fear” in our betting bracket last month, right on cue, Amnesty – Climate of fear, bing, we have a winner. Couldn’t they pick another word, apprehension – no, not scary enough, climate of fear is perfect. I would say Rwandans were apprehensive in the days leading up, waiting to see the candidate list, there was uncertainty for sure, but not fear. The Western Human Rights organizations paint themselves as honest brokers, but they have their interests as well, they find out facts and wait till they have the maximum impact. Like if a doctor knew you were sick but they waited till it would have the maximum impact, like your daughter’s wedding, and yell it out to shame you “You have hemorrhoids!”  Then others talked of Rwanda ominously being the future model for African nations, to ditch the pretense of democracy in exchange for clean streets. This is also a misnomer, Rwandans hate the concept of one size fits all, and it is blanket solutions, like structural adjustment, that caused the most damage. Again, there is a notion that Africa is homogenous and models are just replicated like in manufacturing. Every nation is unique, our history in Rwanda is tragically unique, a nation would have to go through similar tragedies to understand. When Emmanuel Macron said African problems are “Civilizational” I was incensed, but if you look at it another way, that our problems with the West are caused by a clash of civilizations. We have different mindsets.

 

The Hegelian Dialectic vs Ubuntu systems

https://books.google.rw/books?id=_AcYe44YCu4C&printsec=frontcover

In order to understand the Western way of thinking, one must understand the Hegelian Dialectic, it was the key to Western domination of the minds of others. It basically says this, there is no absolute truth, one proposes a thesis, it is countered by an antithesis, and the two merge in a Synthesis. It is how you get your university degree, it is how you reason in a Western framework. There always has to be counterview to your view, there are two sides to every story…. In reality, there are more than 2 sides, there are as many sides as people, but only 2 are chosen. When the West looks at Rwanda, they think there must be another side to the story, and this side should be given equal value in the conversation. This leads to everything being a clash of narratives. In Ubuntu, the Truth is not relative, the Truth is the Truth, and it is a fixed concept, not a fluid triangulation between positions. The basis of Ubuntu is “I am, because, you are” people define each other, rely on each other, compromise for each other. This is at odds with the individualism promoted by the West, of Identity politics and fragmenting society to its basic elements. The Democratic experiment is over, the idea of parachuting down democracy has been disproved. We have to redefine democracy in our own terms, to match our current social and economic development. We are told that democracy brings development, yet China has pulled more people than ever out of poverty. Democracy can hinder development if the society already corrupt, as in Kenya, where tribal Lords divide up the votes and spoils for themselves. I asked my African friends which was more important, Democracy or Development? Majority said development was more important, especially for the extremely poor.

parachute

Parachuting Democracy

https://www.washingtonpost.com/news/monkey-cage/wp/2017/07/05/__trashed-4/?utm_term=.19bef2e898c8

In this piece, here, I was astounded to see the last 28 years explained so perfectly. In the Post-Cold War hangover, around 1990, the west was drunk on democracy, it was democracy that defeated the Soviet menace. All over the world, governments were falling down, new democracies rising phoenix-like from the ashes of dictatorship. Africa remained the same, so the West decided to give us a push. Aid could be used to civilize us, to make us democratic. Aid was no longer connected to economic needs but democratic reform, debt relief was the other carrot. The stick was also the carrot, removing the carrot was the punishment. So Africans created a democratic charade, elites created parties, pretended to hate each other in public, all while carousing in private. The West saw a gap in civil society, and they filled this void with NGO’s. Now these NGO’s would be an arm of direct action by foreign governments into African politics. The results are obvious, and invariably the same. They fund a foreign NGO, pick a sexy cause, devise a program, draw up a budget and zoom. The fundamental error is not involving Africans; so they never truly understand the problem, you patronize the people you are meant to help, you are not accountable to them but your donors. They produce receipts, not results. Then when they talk about a given subject, they are seen as foreign, the government dismisses them as biased foreigners, they play the nationalist card and we support them. We need NGO’s that raise money locally, that are accountable to local people. For example, people identify problem, seek foreign donors, but never appraise if it was effective, especially when some use our poverty to get rich.

 

Democracy is not a car, the gave us shiny democratic models like they were cars. Do you want a Democratic or Federal system, this one has all the features, including 2-term limit to stop overdrive. Democracy is the road on which these vehicles drive, or our institution gets stuck in the bush

car

 

Democracy can only be built from the ground up, it can never be parachuted down, it can never be imposed on a nation by aid cuts or sanctions. True democracy has to start at neighbourhood level, and rise up, not top down as the West wants it. This exercise of democratization is over, even in the West, Democracy is under attack because the economic benefits are enjoyed by the few, and not the many. This concept of linking aid to democracy is detrimental. Why should a baby die from lack of immunization because a civil servant in the West decided their country wasn’t democratic enough? Democracy did not build the West, it came along later when people wanted a share of the gains and to secure their property rights. To feed the roots of democracy in Rwanda, we will have to democratize all levels, let Cell-Akagari, Sector-Murenge, District and Governors be elected directly. Open up the field for Independents to run, free of party affiliation, just as public service. Many who failed to get on the final ballot were better served running for MP, but that avenue is closed for Independents. The vote at the moment is whether to continue the status quo or not. In this regard, it is overwhelmingly tilted towards staying the course. It would be a leap into the dark to try another option, it is like losing a nice warm blanket that you are used to, some people tell you the blanket is evil, but it makes you warm inside. That is why the West fails, there are no intellectual arguments that can outweigh feelings. They think our nation must take a leap in the dark and they hope a safety net called democracy will save us.

 

Never change a winning team

http://www.kigalian.com/future/2017/07/sole-candidate-kagame/

A good friend of mine called Gilbert Rwabigwi wrote an excellent piece, it summed up all my hopes and fears for my nation. Hopes for continued progress and stability, and fears for the long-term continuity of government. What is the RPF doing to attract new blood? After the last election, in an explosion on hope, anything seemed possible and a smooth transition seemed viable. Then came the calls from the Party Establishment “Never change a winning team.” It was clear, the establishment was sticking together, even against the president. The status quo remained. This now meant that the next leader would have to be picked out of this uninspiring bunch, because any newcomers would not get time to learn on the job. None of the other leaders were as inspiring as Kagame, all had fatal flaws, so the writing was on the wall even back then. Watch out when you hear “never change a winning team” or if you do, for it is a sign of things to come. The RPF needs new blood, new ideas, new methodologies, or it risks becoming complacent like other once all-powerful parties. The greatest hero of our president is Julius Nyerere, a true statesman of Africa, he understood that the objective was not to rule till he died but to oversee subsequent leaders. He oversaw two successive presidencies before he died, he famously intervened to stop Jakaya Kikwete in 1995 “Kijana, kaa chini” sit down boy! If Nyerere ruled till he died then TZ would be like Zaire after Mobutu.

 

When losing is a mortal sin, you make cheating a sacrament

 

That is the problem of African democracy, it is a game of life and death, it can mean death to all who support you or life for your enemy. All my friends in the African Diaspora were sons of people who lost elections, they lost jobs, land, houses, citizenship, all via the ballot. In Rwanda, this game is even more deadly. The specter of tribal politics and mass-slaughter still haunts us, and Burundi serves as a lesson to us. The West convinced the previous government to hand over power to a tribal party that is now preparing to kill them. When you have France supporting genocidal rebel movements just over the border, you cannot foster democracy at home. It makes our democracy a Game of Death. So my favourite expression is the one above, when we make losing a mortal sin, when losing power means losing your life, cheating becomes necessary to save your life. So what the West complains about and calls cheating is actually seen as essential, the West is also cheating by supporting Genocidal politics, then calls foul when we bend the rules to us. The idea of holding development hostage to democracy is fatal, the main precursor to civil breakdown is always economic, the crashing of the Rwanda economy in 1990 was crucial in the horrific events that followed. So inducing economic crisis does not correlate with democracy, it just makes it worse. The EU will try to cut aid, but its influence is vastly reduced, Brexit, the Euro crisis, Trump’s indifference, the rise of China, have all reduced its role. It no longer has united voice, or maybe it has bigger problems.

long road

The long road

The mistakes the West made in trying to “Democratize” Africa were numerous. Firstly, thinking democracy can be universally defined with a template. Secondly, was the mistaken idea that this democracy template can be parachuted down without grassroots support of Africans. Thirdly, to link Aid to democracy, people in need are people in need, regardless of the errors of their government. Lastly, it failed to deal fully with the global economic system that keeps these countries poor and props up these dictatorships, armed groups, and tribal parties. For Africans, we believed that Democracy can solve all our problems without hard work. Democracy is the road, not the car, it is a hard trek. We need to democratize our parties, let our parties be Guardians of Democracy, we tried to democratize nations, but not the parties. Nyerere left a Democratic party in CCM, a rule of succession – a Christian mainlander, then a Muslim Coastal person. So if a president is one, then the VP is the other, the VP often gets picked for President after learning on the job. That might be the solution for Rwanda, of course we do not acknowledge tribes but it could resolve problems in the future. Knowing that someone is coming after you and can undo any negative legislation, you develop a long term consensus of mutual protection and not competition. This kind of handover requires a Nyerere to oversee at least 2 transitions. When Nyerere was dying in 1999, they asked him if he was worried about his country. He laughed “Not at all, it will continue on schedule, I set it for 100 years. When the time comes, they will know what to do.”

 

Go thee well Rwanda

 

Let’s start this process again

Democracy is the road and not the car. We were told these democratic vehicles or institutions would drive us to develop, but we find no road. We have to make the road ourselves, otherwise we just get stuck in the bush. It’s a long road ahead.

Rama Isibo

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Njaaanaury Blues and Freakonomics

 

I write this on the 74th day of January, the hunger is real, the thirst is real, just like this January drought hits us every time. One of my favourite books is called Freakonomics – it opened up a whole new world where economics became relevant again. Take a freak statistical anomaly, and try to explain why that phenomenon happens, it is often for psychological reasons. January is a month like any other, but it visits hardships upon people seemingly by surprise. What explains this phenomenon? There are a number of factors, many blame poor financial management by individuals, but even our central banks with the greatest economists have a crunch. In the UK I also saw this phenomenon, but there were credit cards to bridge the gap, in Africa it hits harder as there is no safety net of credit or Social Welfare to save you. This year has been hard by most accounts, even my friends in Kenya are suffering, and Kampala too, so it is regional. I feel there are a number of factors at play, some global, regional, national and personal factors banding together to form this perfect drought. I agree with the likes of Chris Kirubi that personal financial management in the Key to beating the January blues, but that alone does not explain the phenomenon and cannot protect you from global and regional events.

gen-trump

The Trump Effect is hitting Africa, the markets had not expected him to win, it was an earthquake on a global scale. The Dow Jones did rise, and is over 20,000 points, but this hides a wider problem, it is overpriced and top heavy. The new economic policy of “America First” has made investors pump money into American companies they think will do well under Trump. This policy is at odds with the Globalisation strategy of the last 20 years which saw massive investment in Emerging economies and powered our boom we called ‘Africa Rising.’ Now investors are caught in the headlights, this lag from November is only hitting us now. We have borrowed a lot of money, in Kenya, Rwanda, Uganda, TZ in the hope that growth will remain the same. The world is a very uncertain place, with elections due in Europe that could change the course of the global economy even more that it already has. All projections and forecasts have been scrapped as a new reality sets in.

 

Another more pernicious cause is the accounting systems of the West like IMF and WB, most government departments, agencies, parastatals, have to reconcile their books at the end of the year. Work stops for most of December as the annual review is processed, this means payments slow down, orders slow down, when government stops we all stop. In the days ending the year, people just go to work to show their faces at endless strategy meetings with no actual work is done. It takes the whole of January just to regain momentum, the economy closes down and takes a month the restart.

restart

restarting the economy

We often talk of being a 24-hr economy, that is fine, we can even be a 8-hr economy as long as we are open 365 days a year. Imagine losing a WHOLE month of GDP? Our GDP is really 11 months, we sacrifice one month to waste. A month is just a month, why must January be wasted, or be for playing catch-up, a year is a social construct, we decided it ends on 31st December and before it was another date  March 31st before 1st April. Treating December as just another work month would save us this. The private sector is similar, the end of year is just for winding down, no decisions are made, payments are delayed, you agree in principle to new contracts but nothing concrete. So the economy stops, but we are in the Christmas cheer and never notice and it is only in January that it hits us. By then we have spent the little money we had, we start the year in debt, and it takes till March to stabilize and we forget it ever happened.

morning-after

We can do a lot on a personal level to avoid Njanuary now that you know the causes, our spending over Christmas only exacerbates this. Firstly, be responsible, know your weaknesses and avoid them. The festive period is a time when we catch up with old friends and forget our normal spending habits. A bad financial decision is somewhat acceptable in December, but blowing $100 on a night is a bad decision in August as well as New Year’s Eve. Have separate bank accounts, one for living expenses and another for spending. Save up money to go partying knowing that your life standards will not be affected. Even better is to save money for January, enjoy yourself in January when everything is cheaper. The shops are clearing after their Xmas sales, even flights are 30% cheaper, everything is cheaper in January to encourage people to buy but we have no cash. You can also use Njanuary to your advantage, cut costs and see what you can do without and stick to it for the year.

 

Even with these measures you would still be affected by the world you live in, salaries are late, invoices are late in payment, cheques bounce, and you hear endless stories of why the payment is delayed. If the government is not paying on time then everything falls down, speeding up and making payments more efficient will help this. Also altering the way business entities are audited will stop the 11 month cycle both in the public and private sector, if it is changed to quarterly and not annually then the December rush doesn’t happen and we move to a 365 day economy. Banks should also extend overdrafts to help their clients get through the hardest month. We should also take personal financial responsibility in running our affairs, save more money to build a cushion, and cut out pointless expenditure. This might help you get through the harsh month of Njanuary, until we have to do it again next year.

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The Obama Legacy

The Obama Legacy

obama2

I will never forget the day Obama won, I stayed up all night at Carwash drinking soda and stressing alongside my Kenyan friends. It was the longest game I ever watched, some 12 hours the game played on and eventually the winner was declared. HOPE and CHANGE were the theme words, the world was at a precipice with the Global financial crisis looming. It was a chance to turn Left, the neoliberal project was not working, and capitalism had fulfilled its destiny of consuming itself to oblivion. If only people grasped the full extent of the second Depression, it is only that we ignored it that it never got worse, economic problems are only made worse more information not better. Obama saved the world and we will never know it, but how he saved it will have negative consequences for decades. 20m jobs lost, $8 trillion wiped off the property market, 25m lost their homes, $10 trillion wiped off the stock market. That is enough to sink a country, but we all looked away and said “Problem? What problem?” He saved the economy by saving the banks, not ordinary businesses. But who is invested in banks? People’s mortgages, car loans, savings, pensions, 401k’s, investments, the python was wrapped around the child and demanded it was fed lest it eat the child. Obama realized that the interests which secretly backed him were never going to allow his idealist vision to come to pass.

Who is Obama?

 

Obama is one of the biggest enigmas ever to hold the presidency, a truly private and secretive man, although he has charisma to speak in public, he prefers his privacy. This was his biggest failing in character, the inability to sit and negotiate even with fellow Democrats, to press the flesh and slap the backs. He preferred to talk privately with his advisors who were almost always unqualified. His entire foreign policy was dictated to him by a novelist barely in his 30’s, Ben Rhodes found himself with power beyond anything he could imagine, playing God with billions of lives. Valerie Jarrett was like his mother he went to seek consolation from, his gateway, she controlled who had access. He started with a bigger circle that got smaller with time, Rahm Emanuel, David Axelrod, Dave Plouffe, Jon Favreau, Scott Gibbs, all gradually left and Obama receded into his shell. His history as an outsider got him elected but hamstrung his presidency. Obama was an outsider in his own family, he looked different, even his grandparents who raised him had outdated illusions of race. He found himself in the political world, he could appeal to all, he could articulate the problems of voters. Obama is like Jefferson, a contradiction, a man better suited to private persuasion and secrecy. Jefferson was in love with a slave, she bore him four children and he loved her dearly, but he also wrote “all men are created equal” while his only children were slaves. So Jefferson, instead of realizing his ideological folly simply declared his children white. Obama came in promising no more wars, and yet he bombed more countries than any recent president, after winning the Nobel Peace Prize. Both men were constitutional professors and were able to justify and reconcile through legalese.

 

 

The Obama law

 

When we think of Obama and Africa, there is little impact to assess, his focus was mostly internal and when foreign policy arose it was mostly in the Middle-east. In this region it was the Obama Law, or Frank-Dodd act, or Wall Street Act that affected the ecoomy. One clause meant to resolve the issue of conflict minerals effectively criminalized all minerals from the region. That slowed down the mineral trade that drives the regional economy, and punished honest Rwandan miners while the black market continued unabated. His idealism on democracy was also to set him apart from Africans, he didn’t have the patience to understand that the road to democracy is long and hard. He lectured, and lectured ad lectured. What do you expect from a professor? He lectured starving people about the benefits of gay rights, the disconnect was clear, the Liberal Manhattan agenda can’t travel even 100 miles south of Washington to Virginia, let alone Africa.In the end, his benign neglect was better for Africa than negative interference. Obama got power too young, before he had any serious experience in life. A few books, a state senate seat, 2 years as a national senator and president by 47, he didn’t have the skills to bring his vision to fruition.

The future

 

Obama was a good manager, nothing more, he never held true power, he ceded that to the lobbyists in Washington. His power came from an awesome organization, his own machine called Obama for America, it had 2m volunteers ready to effect change. The Democratic party was the property of the Clinton’s and this saved him their incompetence, he relied on his own machine not the party. He disbanded this army of Progressives, that was the condition for Hillary’s support, plus the Secretary of State office so she could build her platform to run after he was done. The Clinton’s have to shoulder a lot of blame for shifting the party to the Right. Bill was beloved by Black people, they even called him the “first Black president” and loooooooved him. Bill Clinton passed many laws that hurt black people. NAFTA gutted what was left of industrial black towns, Crime Bill imprisoned 1 million black men in the 90’s, Welfare bill gutted welfare to the most vulnerable, all these are Republican policies. The Clinton model or the “third way” is to have right-wing economic policies and left-wing social policies, this was copied by Tony Blair in UK and many others in Europe. To allow the exploitation of the economy by the Rich, while being pro-gay marriage to show you have a human side. Ideology is always defined by economics not social stances, the voter always votes on bread and butter issues first.

 

Obama might be like John Quincy Adams, of whom they say “his presidency was a total failure but he is one of the greatest presidents ever.” Quincy Adams was frustrated by obstruction, he tried to abolish slavery 30 years too early but set a date for slavery to be abolished by 1860, this set the timebomb of the Civil War ticking. Adams left power to become a congressman, he achieved more from the Congress floor than he did in the Oval Office, then he became a Supreme Court justice and protected the laws he passed. Obama is still young, he has the gravitas now, he needs to save his party from Corporate donors and narrow-minded identity politics. To move towards collecting money from members again, Bernie Sanders collected $270m from small donations but Hillary had to give 20 speeches to Goldman-Sachs to earn $12m. The political model requires you take money from donors to buy expensive TV ads, but no one is watching TV, their ratings are down 90% on the decade. So Hillary gave $1.2bn to the TV companies in ads and lost to a clown with 20m twitter followers, the model is bust so it is wasting money on bought pundits, partisan hacks and fattening the pockets of the political class. The world has changed, the Republican president is calling for protectionism, higher government spending, some kind of healthcare for all. The Democrats are calling for more damaging free trade, more war, more corporate donor agenda, tougher prison sentences, so both parties have stolen each other’s clothes. Obama can lead the Democrats into this new century, most senior Democrats are 75+ most date back to the 60’s civil rights era that birthed this incarnation of the Party of Andrew Jackson. They need new ideas or they will die. Obama’s work is not yet done.

 

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Affordable housing is possible if you explore options

Getting on the housing ladder is easier than you think

2020

One of the biggest obstacles to middle-class growth is the high cost of getting a loan to buy a house. We expect to walk into a bank and sign our way into middle-class life, but when the reality hits it is much harsher, 22% per annum is a killer. Firstly we must disabuse ourselves of the notion that you can become middle-class overnight, it requires sacrifice of a minimum of ten years even if your parents are middle-class. There is no reward without sacrifice, that 50k a week you spend on going out weekly is more than enough to get you comfortably on the housing ladder. Firstly, start saving now, immediately, if you save $300 a month for 5 years, you will have $3,600 a year and $18,000 in 5 years. The dollar will have gone up 20% in that time with 4% inflation so equivalent of $21,000. The most important thing is you show the bank financial discipline, that cuts down the risk and the interest rate. Then build a basic house with that $21,000 then ask the bank for a loan to complete it. That weekly craze of going out and spending up to 400k a month going out is deadly, I easily spend that some months and so do my friends but we all complain about how hard the housing ladder is. Wealth is deferred spending, in order to be wealthy, someone had to sacrifice and not spend so the money could accrue. Stop spending now, sacrifice now because houses get more expensive by the minute.

safety

Protection first

Before we get more people on the housing ladder, we need to protect those already on the ladder. Mortgage insurance should be a legal requirement, to cover payers up to 6 months if they are hit by sudden illness or misfortune. We should charge a property tax on sales to protect homeowners, a 5% tax to the social security board. This would cover people who are unemployed for short periods and risk falling off the ladder. The government declares a moratorium on mortgage payments and pays the interest due, but the principle remains the same. This saves middle-class families from going bankrupt, it is not in the Govt interest for people they spent so much money educating to fall off the ladder. We need safety net provisions as many families fall through the cracks because of three bad months. Just getting RSSB to ask the banks to lay off repossessing their house would have saved them. The government has to use its influence against banks that sometimes make short term decisions with long term consequences. Government can order banks to hold off repossessing, pay interest and recoup it on taxes. Social security for the poor means monetary assistance, social security for the middle-class means protective legislation.

 

black-man-standing-thinking-21138883

Options galore

 

Money gives you options, the more money, the more options you have and you can start now. Think outside the box, stop trying to replicate the mistakes of others and do things the right way. Expand your timeframe to 10-20 years, break it up into sections, first save, then build a basic frame and then borrow to complete it. The market has high rates because of an inefficient system with a blanket rate, but you can get a lower rate if show you have financial discipline and a good record of money management. You develop a good relationship with your bank manager and they offer lower rates.

 

Shared ownership

sharedownership

As an individual you stand little chance, but as a collective you stand a better chance. One serious person is a risk, but four serious people reduces the risk significantly. If you have 5 friends you have known all your life, then get together, save together, design a project with 6 houses, owned jointly until the loan is paid. You can make savings by banding together, buy bigger quantities and save, save on transport, save on taxes, use the same crew, architect, engineer, and reduce costs by up to 30%. The most important thing is you keep a check on each other, when one of you goes out and blows 200k on a boozy night, the others quickly intervene. So it acts as a check of human behavior, the one thing a bank can’t control. Each is responsible for 16.6% of the loan but if one has a bad month, the others can chip in an extra 3.4% but not for long. Shared ownership builds stronger communities, friends can have the bonus of having their kids grow up together and have a safety net to back you up. After the loan is paid you can separate from the joint holding to single-ownership, or expand the estate and pay off the loans quicker.

 

Rent to own

renttoown

I pay around $400 rent, I have given my landlord some $30,000 in the 6 years I have lived here, I deserve a slap and a finger in the face to lecture me. You can agree with your landlord to rent to buy, if the house is 300k, pay 500k and own it in 10 years, the landlord builds a bigger house and leverages a 50m house into a 120m house. That way the property is properly cared for and payments are guaranteed, people have a sense of ownership and even add value. Put up an extension, install solar and biogas, make home improvements like adding tiles, landscaping, knowing after 10 years you own it. You can even sell it for 80m and play the property market. Most landlord use rents as income, that is the worst thing you can do, you should use rents to expand your property portfolio. After 10 years a landlord is exactly where she or he was before, if not worse because they cannot charge the higher rents of before. If you could agree a 10 year plan, they build another house, and you pay off that house of more value. The basic frame of even the most expensive houses is just a fraction of the cost, the finishing is the biggest cost but least value.

 

Collective bargain

credit

If you have worked at the same place for 5 or more years, and you have a long term contract, get together with other workers and ask for a mortgage. It works for the company because it helps retain staff but also works for the employee in helping them climb the ladder. Sometimes the company bears no cost, the bank comes in to manage. When you are seeking a job, don’t always look at the salary, look at benefits like mortgages and affordable loans to start a side business. If your company does not offer mortgages then get together with other long-term workers to advocate for a mortgage, or a company estate for cheaper rents. If you are self-employed, then band with other people in your predicament, form a savings union and get a larger amount to leverage cheaper prices.

 

Assuming a mortgage

debt

In Rwanda, some banks have a default rate of 11%, the bank loses, the home-owner loses the house but is still burdened with debt they can’t pay. The house is sold on auction for less than cost, there is another way – assume a mortgage. When you see a person about to default, ask them if you can assume their mortgage, you take over the debt and deed, the owner walks away debt-free. This requires having inside information but news like this is openly available in Rwanda, they even print the names on walls and newspapers. A White Knight rides in on a horse, offers to assume the debt and saves both sides a loss, this allows a negative outcome to be avoided, and allows others to climb the property ladder. You’d be amazed the deals you can get, what is beyond one person’s means can be easy for you. Some guys can’t pay 200k for their mortgage, I would gladly take it over for free rent

 

Housing Cooperative

coop

You are like a little ant to a bank, they are used to dealing with billion-dollar corporations, so you are very small by comparison. Form a Housing Cooperative, each of you has equal share, pay the same subscription fee and get the same dividend. If you save 15m, get together with 50 other people, and you have 750m and can buy a big piece of land somewhere. You can make your own neighborhood, go out of the way but start your own little town. With 750m you can buy trucks, excavators, bulldozers, equipment, a quarry, sand pits, you can buy cement at 30% less on discounted wholesale prices. If your cooperative is 100 people it becomes cheaper for members, 1,000 is cheaper still. Waiting for some bank to lend you money will take forever, the cooperative borrows, it is not your credit history on trial but the cooperatives’. This is perfect for people with bad credit records or little collateral, you get collective bargaining and multiply your resources and make savings on economies of scale and save 30%.

 

Credit union

 

A credit union is a member-owned financial cooperative, democratically controlled by its members, and operated for the purpose of promoting thrift, providing credit at competitive rates, and providing other financial services to its members

Simply, you must look at your assets collectively, a house is just one asset, you need fixed property, liquid capital, some in equity, bonds, and whatever can diversify your risk. Joining a Credit Union gives you credit at a lower rate, you get a share of any profits, you can invest in a diverse portfolio of projects without really losing out. If you rely on your company you can sink or swim, but if you are part of a portfolio of 100 companies in a credit union the risk is spread around. The credit union is a perfect meeting place for SME’s and savers who want to invest. A credit union has all the benefits of a bank but is more flexible and is run for its members who are also customers not shareholders. A successful Credit Union can pay off your loans with profits and never actually cost you anything.

 

Mutual fund

 

A mutual, mutual organization, or mutual society is an organization (which is often, but not always, a company or business) based on the principle of mutuality. Unlike a true cooperative, members usually do not contribute to the capital of the company by direct investment, but derive their right to profits and votes through their customer relationship. A mutual organization or society is often simply referred to as a mutual.

A mutual exists with the purpose of raising funds from its membership or customers (collectively called its members), which can then be used to provide common services to all members of the organization or society. A mutual is therefore owned by, and run for the benefit of, its members – it has no external shareholders to pay in the form of dividends, and as such does not usually seek to maximize and make large profits or capital gains. Mutuals exist for the members to benefit from the services they provide and often do not pay income tax.[1]

 

If you want to build on your own, there are also ways to achieve this, but you have to make some adjustments.

Revenue stream – you can get a revenue stream to build your house. Save up for a Coaster, or other Public Transport vehicle, they can earn 1.2m a month, 14.2m a year, can build a house in 3 years. A Fuso can cost 13m, and earn 1.2m a month as well, with transport 30% of the cost, it reduces the cost to almost zero and other customers subsidize it. Opening a little shop in the neighborhood like these “Amata meza, Fanta Bikonje, or Mama Fils” can bring in 30k a day. 1m a month, can build a house in 3 years selling blue band and bread, milk, soap, etc. A bar in a good spot can build you a house in Nyarutarama if you run it well and with purpose.

building-site-1

Go basic – the idea of walking into a Gaculiro house at 20% interest is madness, make a sacrifice, take the shame but secure your future. Your house will be basic, a building site for years, but it is yours. Just construct a foundation, it can cost 4m to put up, then one big room divided in 4, the rest of the foundation is a veranda. Just four walls, a roof, cement floor, and a secure door. A total cost of 10m but in a good area, then over the next 5 years you add slowly, get 30 bags and add another room, another, and another. It would be embarrassing when visitors come, but you are building while they rent. Be a real middle-class person, own your property, be proud of it and defend it with your life.

Save now

 

Next week deal with the second of the 4 M’s

MATERIALS

 

Rama Isibo

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Forcing Businesses out of homes is a non-starter in an election year

Build it wrong and they won’t come pt1

 

kigali

When we started our road to development, we just wanted progress, however small or fleeting. Every new building coming up in town was an object of pride to us. It is only now that we are asking if these buildings are appropriate for us. A naked man can grab a woman’s dress just to cover his nakedness, but after that he realizes that it is not appropriate. We are trying to fulfill an architectural plan with little regard for the occupiers, so they lie empty. The Govt and banks which lent out millions of dollars to people to build these empty shells now wants to force businesses into these empty buildings to pay off the loans. Firstly rents are RIDICULOUS sometimes $25 a square meter is the norm for renting an office in Kigali, only 5% of businesses can afford that. The builders made wild projections that customers would pay over the odds for space. In a residential house, a business can have up to 600 sqm for $300, with a garden, ample parking, security, and most important – a homely environment. I don’t think Govt can evict businesses from their spots forcefully in an ELECTION year without undue trouble. This is what you get when people with no political acumen run a city with no idea of the political implications of their actions.  Many people work from home, 90% of SME’s are based at Home, how will we stop a bicycle fundi from fixing bikes at home? The best they can do is raise property taxes for residential areas used as commercial property, this would mean any savings made will be lost.

 

White elephants

 

Rwanda is like the guy who buys clothes 4 sizes too big hoping to grow into them. It is good to anticipate demand but it is also dangerous, it might not work out the way you planned. Then millions of dollars in locked up in static capital, on top of that is the mountain of debt, the high costs of maintaining high-rise properties and lack of clients. The massive increase in office space has not brought down the price of an office, it has even increased under the debts it took to build them. Owners need to reduce prices to get higher occupancy, but that needs refinancing over a longer term. Then these buildings are dark and dingy, they have tiny rooms to maximize profits, the water is often intermittent, plumbing often fails, people just don’t want to climb up to the 6th floor to seek your services. Rwandans prefer to come to an office which is like a home, to be received in a home, and to discuss business while gently sipping tea on a sofa. A cold hard sterile office is bad for business, you never get the client to relax enough to do a deal, Rwandans do business on a personal level after a personal connection. There are so many who will lose their jobs if this move is implemented, home offices have maids, gardeners, security guards, cooks, cleaners, who maintain them. Home Offices make sense to NGO’s that want to maximize their impact by saving money which they use to help their target groups, plus they can house their interns and staff in the back rooms. Placing the burden of rents of $1,500 a month for an ill-suited office will affect NGO’s who help the most vulnerable in society, they should be exempt.

 

People-centered design

 

The Kigali Masterplan is a wonderful idea, but it has a fatal flaw – it doesn’t have room for organic growth, organic growth must only happen in places designated for it. This means the areas designated for commercial activity are too expensive for a small factory to start or even a random idea to flourish. We need growth in Rwanda, we should not restrict it because it is not exactly the way we planned it. The problem is a lack of people-centered design, the plan doesn’t understand basic human nature. You go and build malls in town to urbanise, malls are not for town, the whole point of a mall is to avoid going to town. The planners expected us to put on our Sunday best, get stuck in traffic, pay high parking fees to shop at Makuza. The Rwandan genius who doesn’t copy mistakes will win, the genius who builds a good mall in Kibagabaga, or Gahanga, Kisementi, or somewhere out of town will make millions. Malls are for suburbs, not for town, it is to avoid going to town and to get everything in one place. Another problem they never build a business ecosystem, a mall should have banks, supermarkets, clothes shops, shoe shops, jewelry, electronics, home care, basically everything in one place so you don’t walk around too much. Owners have failed to understand this, you have to build a portfolio of businesses that make it worth coming, not just rent to the highest bidder. You need human traffic, a person comes for a bank, passes by the supermarket, goes to the coffee shop and buys a pair of shoes.

bugolobib

Bugolobi Village mall, above

 

Next week I will talk about affordable housing and the factors affecting it

Money

Materials

Manpower

Mandatory regulations

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Who Killed the Christmas Spirit?

Who killed Christmas?

The air was sucked out of all of us this Christmas and new year as we heard of the tragic shooting by police, one was fatal, one a near miss. I can’t say we didn’t expect it, the Police were wound up so tight this holiday season, itchy triggers everywhere. In both cases the Police said they refused to stop or tried to assail them with their cars, but the people involved were both highly respected people. One was a well-respected lawyer and the other a respected exec, it was a glitch in the operating procedures of the police. I hope the police truly investigate their officers, the eye-witness testimony contradicts the official story. It is not a matter of assigning blame but making sure such tragedies never occur again. There is something at fault here, two shootings within hours of a new protocol being instated. One witness claimed there was a first round of 2 shots killing the driver, then 10 seconds later the rest of the police filled the car with bullets. Rwanda needs an Independent  Police Complaints Commission, they tried to make police more accountable by moving them to the Justice Ministry, but they still absolve themselves.

 

An Independent Police Complaints Commission would help make our police more responsive to our needs, the question we often ask is “Who do the Police serve?” If it is the people, they should be accountable to the people. The victims were first dismissed as drunk and aggressive towards the police, others dispute that, if the persons were not known and respected we would have believed the police blindly, but it is not in line with their characters. Police methods are under question, and yet they investigate themselves and absolve their officers, seeing protecting these officers as protecting all Police is wrong. Let us not assume guilt, but likewise, we cannot assume lack of culpability on behalf of the officers involved. Sweeping it under the carpet will just make it worse, the system failed, how can we fix it? We have seen many attempts at Police reforms, some have been successful, others not so much, but we must change the accountability structures. When the institution is seen as protecting individuals within their ranks, it breaks the trust of the people, policemen keep their jobs but the public loses confidence in them. Can we have an HONEST and THOROUGH  investigation into this? It could have been anyone, in Rwanda I have guns pointed at me all the time, to direct me at the stadium, to stop me at a red light. Any minute the guns could have gone off and killed me, the shooter will go home and sleep well. We need to reduce the number of guns we see daily, let them be there but out of sight.

 

Another hope I have for Rwanda this year is to see a Child Protection Service or Social Service in Rwanda, Police are dealing with social problems beyond their expertise and duties. Social problems need social solutions, police cannot deal with social breakdown and its consequences. Sending them to Iwawa is not the solution either, these are social problems, stemming from the parents. We should send negligent parents to jail, not their kids, we blame the victims because we are ill-equipped to deal with social problems. I spoke to a Mayibobo who had been locked up, his mother is a survivor, HIV+ and alcoholic, part-time hooker with an abusive pimp, so he avoids home. He wanders the streets, sneaks home for meals, begs for money, collects scrap for cash, mostly wires. He is always on the lookout for the police, fearing arrest, being sent to Iwawa, languishing in a cell only to be released. The police cell is much better than the home he comes from, so he does the cycle again. Police cannot solve this, teaching him carpentry can’t solve this, his mother and family situation is the problem, the dysfunctional environment kills any good you can try to do for him. We can’t leave it to NGO’s to tend for our problems, we all suffer the effects when this boy is a full time criminal. We need a social service like yesterday, link it to work and pensions, give incentives for fostering, pair the Mayibobo with a Mukekuru who has no children at home to care for. There is so much work to do because social ills spread the same way disease spreads and kills  the culture from within.

 

 

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Somewhere between Uganda and Rwanda is paradise on Earth.

An ever perfect union

trucks-border

If there was ever a perfect nation, it would be somewhere halfway between Uganda and Rwanda, with just enough rules but also, just enough crazy to make life fun. The ancient Greeks were torn between Athens and Sparta, both had virtues and setbacks. The Athenians had their democracy, free thinking, philosophy and hedonism – the pursuit of pleasure as a lifestyle. The Spartans were cold and militaristic, self-denying, arrogant and dismissive of weaker opponents, pleasure was seen as weakness, philosophy was seen as intellectual bullshit and lies, strength was in unity and sacrifice. You see this as you cross the border, two separate mindsets on display, austere hostility on one side and relaxed fun on the other. You have roasting chicken by the customs, Rolexes by the immigration, you can eat while they stamp your entry. Which system is best? Both have merits and setbacks, and even today in most modern countries, the democratic government is Athens and the military is Sparta. So it was with this Laconic tendency that I started to understand Rwanda and Uganda, a militaristic elite dominate the political scene. Athens is under control of a Spartan elite, they let Athens be Athens provided the Sophists and Oligarchs did not challenge Spartan power. Back in Laconia, the Spartans were able to keep a strict hold over society, to regulate in minute detail all the behavior and rituals of the Perioikoi, to make clean streets, to build huge public works, to strengthen the military and cement power.

 

“Corruption is good!!!” Said my taxi driver, climbing pavements without a fear in the world “at least the policeman gets to eat, and I don’t go to court.” I asked what if someone else knocked his child and was able to pay a bribe to escape, how would he feel? “Then it is a big problem. But I lived in Rwanda, you cannot make a living, too many laws and rules, here they leave you alone.” Growth is everywhere in Uganda, exploding off the pavements, pure unregulated growth, organic growth. In Rwanda we can only pray for that organic growth, it is mostly government spending driving growth, organic growth is stifled by regulations and interference. Uganda just needs order, some kind of control, and a brand-new concept they have barely heard of – consequences. You can kill a fellow drinker in a club and get away with it, you can commit murder and never be charged when there were 113 witnesses. All witnesses are dismissed as drunk, then you have several powerful people all wanting to protect you for money. Uganda is Jazz, they make it up as they go, Rwanda is a tightly-arranged symphony with every note in place. Ugandans say they can never be tamed, Rwandans are naturally slow and can be easily governed, unlike the Unruly Ugandan. In 94, Murder was acceptable, Rape was acceptable, it was total chaos but order emerged.

 

Rwanda is a reaction to Uganda, the RPF vowed never to make the mistakes of NRM, Kagame vowed to never make the mistakes of Museveni, but he made entirely different ones. Such is life, every decision will have its downside, every path its own obstacles. The Relaxed Approach of Museveni is now destabilizing the system and allowing Chaos in through the back door. The Iron Fist approach is also strangling Rwanda, killing our creativity, making a nation of mindless zombies who cannot think for themselves. Ugandans have industriousness, their dirty streets are a sign of clean money, even New York has litter everywhere, when Kigali truly has an economic boom we’ll have litter too. Even if Rwandans had the same industriousness of Ugandans, they are stopped by the overzealousness of local officials who use regulations to stop growth at grassroots. In Uganda people can start-up just like that, the inflation is high and money is worthless but everyone gets a piece of the pie. I wonder what happened to the idealism of Museveni? He let the political class plunder the state in return for staying in power. That is a warning to us in Rwanda, when the political class strikes a grand bargain to allow state capture in exchange for extending rule. I just wish there was a happy medium between the two, the freedom of UG and order of Rw, they say you cannot have both. I would pick order over free chaos, but it shouldn’t be a binary choice, development happens when economic freedom and personal freedoms are balanced. The price of Liberty is eternal vigilance, Uganda has to be more security conscious and fight corruption which is killing the nation. Rwanda has to stop choking itself to death with regulations, these regulations lead to corruption to avoid them. We should ask “Is it beneficial, does it harm (how can we limit harm) and allow it.” Moderation is the key, moderate laws, not too lax, not too extreme, somewhere between Uganda and Rwanda is paradise on Earth.

 

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