East African Business Week (Kampala)
Emin Pasha
22 November 2008
opinion
Police lights flashing blue in front of our bus we pulled into the deserted hotel reception at 1:32AM, the only vehicles moving on Kampala's streets at that hour, our necks stiff and heads foggy with roadsleep.
It had been a whirlwind tour lasting 36 hours and nearly 1,400 kilometers via Jinja and Mbale, east of Kampala, then onward to one of Uganda's most undeveloped regions.
On the bus was a democrat, a republican, a civil servant or two, a parliamentarian, a governor of millions, and his deputy too. Capitalists, marxists, security officers and bankers.
Royalty, royalists, and revolutionaries, captains of industry, leaders of men, community elders, champions in self-defense and offense, a reverend, a wahabist, a jew, a lawyer, a journalist, and a farmer.
The unifying thread in our capacious, disparate group was a common interest in nothing less than changing the world as we know it.
A world where cattle raiders lay down their weapons and pastoralists work on farms. Where village girls go to school and even some wear shoes.
A place that was once arid and barren now green with regular rainfall. Weakened are the traditions that favor the strong and armed. Gone is the mindset that development means transferring wealth only to the wealthy.
"It's a very simple concept," the farmer explained. Sunlight captured by the leaves of these plants and their oilseeds can fuel a tractor, a lorry, or a passenger car."
"Are you telling us that we can turn these stems and seeds into diesel fuel today, without waiting millennia for the earth's pressure to collect, compost, and eventually liquefy their carbons into deposits of crude oil?" a casual scientist from the crowd inquired.
"We can do it today today today." The farmer replied.
Sounds extraordinary. Something out of science fiction, not from our world. And yet many of you have recently heard of this renewable fuel; the U.S. President-elect Barack Obama mentioned the word 5 or 6 times during his debates with Senator McCain.
It's called bio-diesel.
What most of you do not know is that Uganda is producing the stuff and in a very unlikely place.
Leading the bio-diesel revolution in this country is Karamoja, previously a punchline for economic development jokes and slights. Not any more.
African Power Initiative's (API) farm in Nakapiripit district of Karamoja employs 400 people, has 2000 acres of oilseed under cultivation, and is already harvesting.
Passing several bumpy and sleepless hours in the darkened bus on the return from Karamoja my mind revisited the day, what we had seen and heard from the lips and ululations of the workers and community who are the true heroes of API's farm.
Their success stems from the belief in the dignity of work, in self determination, in taking advantage of opportunities untried by others. A belief in something so audacious and outrageous that it might actually work.
Why is this bio-diesel revolution interesting to those of us who follow the East African stock markets?
First of all, the region's transportation and energy sectors rely heavily on expensive fossil fuels.
According to the East African Petroleum Institute, Kenya's petroleum sales for all forms of petroleum products including LPG, kerosene, diesel for power generation, industrial diesel, premium and regular gasoline, jet A-1 fuel, and lubricants totaled 3.8 Million metric tons in 2007.
These imports are growing at an average rate of 8% each year.
This is a staggering outflow of current and future wealth from our region.
A domestic bio-diesel industry will help East Africa conserve foreign exchange and as seen in Karamoja, creates jobs. API aims to gradually increase production to a point where it can export bio-diesel to the region, the Middle East, and beyond.
All of this is good news for capital markets. More people working means that savings and investment will increase.
And as my father likes to say, when water rises, all boats rise together.
Emin Pasha is a stock broker in East Africa
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