Is NRM losing the war on (corporate) infant mortality rates?- Prosper Ahabwe

 

Is NRM losing the war on (corporate) infant mortality rates?

   by PROSPER AHABWE JULIAN. Published in the Observer Newspaper on October 2, 2024.

When the current regime came to power in 1986, one of the key challenges affecting the growth of Uganda was the high infant mortality rate.


 World Bank statistics estimate that the infant mortality rate at the time was at 115 per 1,000 births (11.5 per cent). At least the NRM government has presided over significant reductions in the infant mortality rates, thanks to the development partners and the ever-growing medical improvements that saw programs such as immunization.

As of 2022, the infant mortality rate had dropped to 30 deaths per 1,000 births (three per cent).

 Interestingly, the Infant Mortality Syndrome does not monopolise its operations among human beings and animals; businesses and companies have not been spared either. A significant percentage of companies after registration do not live to see another day of operations.

Some get registered but will never commence operations, while many do not reach their fifth birthday. Some companies take even seven years but still collapse before they can walk on their own. A key example is the fall of Africell in 2021. This is what I choose to term as the ‘Corporate Infant Mortality Syndrome’ (CIMS).

That some companies die at their stage of infancy when they are still crawling or even before that stage. A significant number of micro, small and medium sized enterprises (MSMEs) have become prey to this CIMS monster. Many factors have been pushed forward in apportioning the blame for this persistent disaster.

The causes are both micro (a result of the strategies employed by these companies) but largely a symptom of the macroeconomic environment in which the companies operate. Macroeconomic factors include; High interest rates on loans that make it impossible for companies to break through while keeping their loan obligations; the catch- on-site taxes levied on companies even before they can take off; the bureaucratic nature of Ugandan institutions which make it difficult to get all the required operational licences; and of course the lion king corruption in government institutions which are meant to facilitate business growth. These can, for the major part of it, be blamed on the 35+ year old government.

At a company level, the causes of CIMS arise out of the decisions taken by the management and these include; creating a product before thinking about the market; no value addition on the market; risking finance on external financing; premature diversification among other reasons.

CIMS arises from two main issues: Failure to take command of the market, and capital insufficiency. The latter is the elephant in the room because it makes operations difficult and makes market command a tug of war. The results are worse if the proprietor relies on borrowed capital.

I must state that it is generally not advisable to start a company in Uganda using borrowed capital, especially where the money is acquired at commercial interest rates.

Therefore, while we can praise the NRM government for defeating the infant mortality syndrome amongst humans, the government seems unprepared to fight the infant mortality syndrome amongst companies. However, this does not imply that the government has totally lost the war on CIMS because this can be reversed.

I must also appreciate the steps taken by the government institutions, however inadequate, to attend to this challenge. I believe there is more that can be done.

To address this Corporate Infant Mortality Syndrome, there is need to address the challenge of high interest rates; invest heavily in the financial markets; ensure that we have a strong diversified and affordable media to facilitate advertising; and strengthen institutions that facilitate quality assurance processes.

The forces of economic development in both the public and private sector should look to this matter. Until we significantly address the syndrome, Ugandans will still be defeated by the monsters of unemployment, budget deficits, and of course poor service delivery.

ahabwejprosper21@gmail.com

The writer is an economic and business analyst, and a lawyer at Nansubuga, Awelo & Company Advocates.

Comments

Post a Comment

Popular posts from this blog

WHY NATIONS FAIL; A REVIEW AND CONTEMPORARY INTERPRETATION FOCUSING ON UGANDA.- Prosper Ahabwe

Image
The Book: WHY NATIONS FAIL; THE ORIGINS OF POWER, PROSPERITY, AND POVERTY   by Acemoglu & Robinson  A REVIEW AND CONTEMPORARY INTERPRETATION IN UGANDA. By Prosper Ahabwe. Katanga Slum Area.                                                                       Overview of Kampala Capital City. . 1. A Brief Review of the Book In the book, Acemoglu and Robinson, discuss the Origins of Power, Prosperity, and Poverty. The book centers on the reason behind the successes and failures of nations in the Universe, paying a closer look at historical examples. The book pays close attention to the rise of European countries and the road to the Industrial Revolution, and why the Industrial revolution was delayed by the extractive and exclusive nature of their institutions. This was visibly seen in the failure...
Read more

Why Africa fails

At times I feel it absurd finding that Africans always wait for powers abroad to help them change their situation. It is high time we left that state and started thinking about our own participation in the change we desire. Mao Ze Dong had this to say “On whom should we rest the burden of our own transformation? It should rest on our own strength, and that means regeneration through one's own efforts. We are not alone; all the countries and people in the world opposed to imperialism are our friends. Nevertheless, we stress regeneration through our own efforts. Relying on the forces we ourselves organize, we can defeat all our social and economic life enemies.” I would like us Ugandans to borrow a leaf from this work of Mao. We keep on expecting foreign bodies, government and neighbors to help transform our situation. We ourselves can address the problems we face. Just focus  on the future you want, but also work in unison with other people is society for the common good. ...
Read more

THE BARBAROUS CYCLE OF POVERTY AND BACKWARDNESS AS DETERMINED BY EDUCATION.

Image
  THE BARBAROUS CYCLE OF  POVERTY AND  BACKWARDNESS AS DETERMINED BY EDUCATION Let the offspring of the peasantry be peasants till their 100th descendant. The general determinant of wealth in society is to the effect that those who attain a proper education are mostly the candidates for wealth creation and prosperity, while those who attain poor or no education are the greatest candidates for poverty, holding other factors constant . The Cycle of poverty in developing countries, and specifically in Uganda stands as; Owing to the fact that education is commercialized, the poor can not afford their children a decent education. Eventually, these children either do not go to school or go to very poor schools and most do not complete school as to acquire substantial skills. These illiterates and school dropouts later settle to a life of peasantry and in turn become poor parents, who produce poor children and educate them in poor schools, and then the cycle continues. On the ot...
Read more