THE FATBOY SHOW : Unless you're a thief, no genuine business thrives in Uganda.

I will always cite this story, not because it is anything novel, but because it was published by a renowned magazine: On May 23, 2020, The Economist magazine published a story, with a closer focus on Uganda, concluding that "Africa's banks are the most profitable in the world while also being the least efficient."

I was first struck by the paradox of being the "most profitable" but "least efficient." How do they manage to reconcile that? But then, I gasped at the scale: the entire world! How the heck did banks in [allegedly poor] sub-Saharan Africa become the most profitable in the whole world? Yes, in the whole world.

The answer was in front of my eyes: interest rates. Not the economies in which these banks operate, neither the investments and businesses they are involved in. With interest rates ranging between 12 per cent and 30 per cent, these banks, The Economist noted, make over 17 per cent return on equity.

What this British magazine did not say was that these inefficient but very profitable banks were actually, in many ways, a bunch of thieves who have marshalled the legalese to steal the sweat, toil and resources of Ugandans.

By implication, The Economist magazine also meant to say, no business—started from scratch—thrives in Uganda. This environment is designed to crush native invention. Unless they are not paying taxes, bills such as electricity, rent and other running costs, no business thrives. Not even farming.

Maybe Middle Eastern slave networks. You cannot do business if the bank takes back 15 per cent of the premiums. That is more than the profit margin on any premiums.

It actually means the bank takes back all the profits and, at best, the businessperson can only keep appearances – and of course survive with a small balance but not enough to turn the business into a multi-million enterprise.

[In truth, many seemingly successful businesspersons in Kampala are only keeping appearances. But these folks are broke, with businesses on life support]. In Europe, the highest interest rate would be two per cent but mostly it is down to even 0.4 per cent.

yusufkajura@gmail.com

The author is a political theorist based at Makerere University.