Last week, one startling piece of international financial news was the performance of an electric vehicle (EV) start-up venture cobbled together by previously struggling Vietnamese VinFast whose initial shares were issued in New York.
That day one, the shares sold well above the initial offer price giving VinFast a market capitalisation of $85 billion, instantly overtaking any of three big three traditional automakers Ford, GM or Fiat Chrysler by a whopping $27 billion. The ‘small’ Vietnamese outfit now only sees Tesla as its worthy competitor in America.
Our main interest here is not cars, but the uncanny similarities between Vietnam and Uganda.
The two countries started their current economic journey at the same time in 1986 after lengthy wars.
Although Vietnam’s two-decade wars had ended in 1975, it took another 10 years for the militarily victorious socialists to reorganise and finally settle on a focused course for economic development.
Uganda ended its two decades of deadly civil strife in 1986, and it took the left-leaning new leaders only three years to firmly ditch socialist economic ideas and fully embrace the market driven model.
Uganda at 240,000 sq. kms is about three-quarters the size of Vietnam, at 48 million people has about half the population of the latter and both countries have a diverse people each of some 50 ethnic communities and original lingual variations. In 1985, they had about exactly the same per capita GDP of $235 though now Vietnam’s at nearly $4,000 is about four times Uganda’s.
In 1986, Vietnam prioritised modernisation of agriculture, made land reforms, leveraged its traditional knowledge of rice and started growing all varieties of rice wanted across the world at export quality.
Uganda too started modernising agriculture including its traditional forte, coffee, for which new varieties were created by Ugandan scientists.
Indeed, its National Agriculture Research Organisation (Naro) puts out new crop varieties and on a trip to the southern tip of Tanzania some years ago, I met proud farmers who were harvesting ten tonnes of a Uganda Naro-developed maize variety per hectare.
Agriculture is a smart starting point for such tropical economies because by raising farmers’ incomes however slightly, you increase disposable income for majority of the population thus creating demand for almost every industry. This is a tested approach; you can also ask the South Koreans if in doubt.
Three to four decades later, Vietnam’s manufacturing also has followed its agricultural power, and its main exports now are smartphones, computers, electronics, chemicals and wood products like paper! And oh, quality glass, for which distant twin Uganda also has an unexploited advantage of high-quality sands, among a similar array of minerals including the rare earth metals needed for clean energy.
By now, Ugandans have done enough ranting against the World Bank for halting its lending over the other matter of sexual orientations.
It is about time to look at alternative funding for development activities and the market can be a viable source, like VinFast, the little EV maker from distant twin Vietnam has found.
A company mobilising over $80 billion in one day is no simple matter. And Uganda already has companies that are into e-mobility, including one making electric motorbikes and another making electric buses that have been on the road for over three years, with a 100 percent safety record.
The Naro mentioned above, as someone pointed out recently, has developed such quality health and nutritional products that it is embarrassing how little they have been publicised and why they don’t enjoy any protection!
Some administrative action would make Naro-floated shares on the Kampala Securities Exchange perform better than the telecoms into which Ugandan share buyers pump billions. Naro is 100 percent state-owned.
Yes, there are alternatives to borrowing!
Joachim Buwembo is a Kampala-based journalist. E-mail:[email protected]
