Zero Tolerance to Efficiency

Slogans are interesting things. They are pretenders, claiming to be profound, when they are actually empty and lazy, hiding much more information than what they purport to be imparting. One of my favourites is ‘zero tolerance to corruption’. It is usually proclaimed by serious-looking officials, whose demeanour of sincerity would be hilarious were it not so pitiful. Proclamations that corruption will be wiped out of the department, or the ministry, or the company, or the entire country are regular and legion. These will then be followed by bouts of intense activity to prove seriousness and that ‘this time we’ll get it right’, only for the equilibrium of graft to re-assert itself after a few weeks or months.

I had thought through why this happens almost every single time, but never quite cracked it, until last week. It turns out that it is nothing to do with the genuineness of the intention, or the calibre of the official making the declaration. I was at the East African Business Summit last week in Kigali, and a statement by a member of one of the panels made me sit bolt upright and listen. Richard Kamajugo, the Commissioner of Customs at the Uganda Revenue Authority, finally solved the puzzle. What we need to think about, he said, was the ‘industry of inefficiency’. He said this in the context of operations at East Africa’s borders, but when you think about it, it helps to explain not just slow cargo movement and corruption, but also why the cashless system for matatus has failed to take off.

Let’s start with Mr. Kamajugo’s proximate example. His business is ensuring that cargo lorries traverse into and out of Uganda in the most efficient and speedy way possible. The faster these lorries move from the port, past the border posts and into the Ugandan economy and their end recipients, the cheaper it is for everyone involved (after all, time is money), and the better it is for the economy overall. For the lorry owner as well, speed is of the essence. This doesn’t mean breaking traffic rules, but the faster the lorry gets from Mombasa to Kampala and back, the more trips it can make, and the greater the business that can be conducted. This means that the lorry owner can pay off his financier quicker, and make greater profit to grow his business. For governments as well, the more cargo sloshes through the transport arteries of the region, the greater the volume of trade, and the better it is for everyone all round. So far, so simple, no?

Not so fast. There is a set of players in this happy dance who have not been accounted for. Think about it: when a lorry stops at Malaba, or Busia, or Isebania, there is a whole industry that develops around it. There are kiosks and boardings-and-lodgings. There are restaurants and moneychangers; prostitutes and trinket-sellers; washing-ladies and preachers, who all benefit from the fact that tens of thousands of truck drivers stop at the border posts every year. According to Mr. Kamajugo, the border posts sometimes resemble comfortable homes, what with all the washing that is hanging on lines between the lorries. The drivers do not have to worry about carrying a week’s worth of smelly laundry with them, because they have a ready army of inexpensive, eager ladies who wash do it for them. Thus, even as everyone from Presidents on down try and unclog the arteries of commerce in the region, these beneficiaries have a stake in gumming up the works.

Think about why the cashless fare system for matatus has failed to date. The technology is in place, all the declarations have been made, and glitzy launches held. Yet deadlines have come and gone, and people are still paying their fares with grubby, inefficient cash. The problem, as someone pointed out months ago, is that the planners forgot to include the drivers and conductors in the scheme. They benefit from a cash fare system – since they can make an extra shilling or two. Most matatus are run on a minimum daily revenue model – make a certain amount of money for the day, and whatever is extra can be shared between driver and conductor. Once you remove cash – anonymous and fungible as it is – from that equation, the whole model collapses. Thus, you have a shiny new system which no one is using.

Much the same applies to traffic management. Since there is so much inefficiency in the system – faulty lights, intolerable traffic jams, silly and barely-enforceable traffic laws – traffic policemen can make a pretty penny from road users who will almost inevitably break a law. Carol Musyoka related the rationality of bribery in these pages a couple of weeks ago, and the pain points of traffic management make it even more so. Thus, don’t hold your breath for traffic in Nairobi to ever get better. Not until the profits of inefficiency are removed from the entire system.

So sloganeers can shout themselves hoarse. But until they recognise the profits to be made from inefficiency, and cater for these, their lost voices will count for naught.

Also published in the Business Daily on 21 October 2014 at http://www.businessdailyafrica.com/Opinion-and-Analysis/When-slogans-hide-meaning-and-intention/-/539548/2493180/-/fi8vu5/-/index.html