On The NACOBA SACCO Masterclass
When we were growing up, we were told that if we save, we shall become rich. I remember as a child, I used to save my pocket money in my tin in the bedroom. Unlike most jazz on TikTok of people lending their mothers and them not paying back, my parents always paid back when they borrowed from my savings. I hadn’t been taught compound interest yet; otherwise, I would now be richer than Elon Musk and they’d be homeless. But it was just common wisdom that when one saved, one got rich.
In fact, the first person I heard on TV say that saving was for stupid people and clever people borrow was the former Kampala Mayor, Alhaj Nasser Ntege Ssebagala, Inna lillahi wa inna ilayhi raji'un. I remember it was a TV interview on NTV or WBS where the Mayor spoke so much broken English, I left the conversation even more sure that saving is for clever people and that it was Ssebagala that was stupid. I have since learnt that he was right. Ssebagala’s advantage in business was that he had survived indoctrination in school that taught us the kind of lazy and wrong advice about saving. The fact that he hadn’t gone to school—or if he had gone, he didn’t pay enough attention even to learn English—saved him from being poisoned with the false wisdom about saving.
But unfortunately, because Ssebagala never went to school, he also did not learn the required sophistication that one needed to thrive as a borrower. That is why he would later resort to politics as the last option to keep his businesses alive.
Below is a conversation about the Namilyango SACCO. It is quite an accomplishment. In the video, they talk about growing their members' investment from 4 million to more than 4 billion. While SACCO in full is Savings and Credit Cooperative Organization, savings is the keyword. This whole conversation, they are intentionally or maybe ignorantly using the word investment instead of saving. You see, they know that you, like me, might have eventually figured out that Ssebagala was right. Saving is bad for you. So they’ve cleverly decided to call their kibiina an investment group. The interest you receive on your savings is regulated by the same institution in charge of inflating your fiat money. So they can basically write a computer program that regulates inflation in the sense that your savings lose value over the 10 years you save them while the numbers in the bank increase. By this I mean that you can put 10 million in the kibiina yesterday when a liter of fuel costs 5k and get 20 million after 10 years when a liter of fuel costs 15k, and you will think you’ve made a profit off your money, but simple math shows that you would have lost about a third of your purchasing power (your 10 million bought 2,000 liters back then, while your 20 million buys only 1,333 liters today).
So that is why the SACCO claims to be an investment vehicle. They say that they will not keep your money in cash but will instead use it to buy land, government bonds, and other safe assets. But look at what actually happens: when a SACCO locks your money into a 10-year Treasury bond yielding 14%, Bank of Uganda and the commercial banks have already calibrated that yield to sit right around real inflation. You, the saver, take on all the illiquidity risk—your money is tied up for a decade while prices run away—while the state comfortably extracts the seigniorage. The problem is that if these so-called safe assets are not secret, and if the returns are predictable by any means, I assure you the person writing the computer program that adjusts inflation has included that information as a parameter within that program. Now I am not saying I know such a program exists, but it is so easy to create that it would instead be stupid for one to believe it doesn’t exist knowing how governments and central banks extract from the citizens. So any kind of safe asset should be considered a saving, and it will be considered by the central banks when adjusting interest rates for inflation.
So Alhaji Ssebagala would laugh at the idea of a SACCO. Obviously, being him, I am sure he would in fact start one and use it to run his businesses, if you know what I mean. As a Muganda, I don’t want to say bad things about the dead.
So the question is: What is an investment? My simple answer would be that you are making a bet off your knowledge today that only you have, no one else. It is a high-risk endeavor. If you know something about how the world works—say, you’re the one who has the Empewo of your family and the jajjas have told you that a drought is coming in 10 years—after the family meeting, sit the elders down and tell them what you dreamt. Then make a plan of how much money you’d need to import water pumps and pipes from China, and go borrow that money. Borrow as much of it as you can. Do not touch your own small cash when you can use other people's money to finance the vision; remember what Ssebagala said about who borrows and who saves. Then take your children out of university into a vocational school where they can learn how to do plumbing for irrigation, then start a hardware shop that sells plumbing equipment while you wait for your investment to ripen. Unless oli mufere, of course, and you don’t even have akawewo akalema.
The point being that if everyone is doing it, it is not an investment, it is a saving. And by design, you’re meant to lose money off your savings because the World Bank and other central banks have owners. How do you think their children will afford somersaulting cars? Who do you think is going to pay for all the children that have to be killed in Gaza? In order to consider something an investment, you have to take on some risk. And that risk is only informed risk if you’re basing it off rare or even secret knowledge.
If you only know what everyone else knows, get a job, enjoy your ka salary as much as you can. When a deal comes, steal, but remember to stay safe. If you’ve stolen enough, start a family, build an apartment block in Kyanja, and buy a second-hand Benz. Today, in fact, you should also consider buying yourself a second citizenship—I don’t know where, because it is hot everywhere. Listen to Kasuku and ensi jijeko amanyi, because your entire life is at the mercy of the powerful. And please, don't fall for those people who try to guilt-trip you into thinking you're financially irresponsible just because you haven't joined a SACCO. They said the exact same thing about saving back then, and when people realized it was a scam, they just changed their minds, rebranded it as an "investment," and carried on. Those SACCO things, they are just going to steal your money.
With all that said, if you have some unique insight about how the world works and you’re willing to bet long term on this knowledge, start recruiting your team. This is extremely hard because you have to figure out how to convince people that the Jajjas actually sit on your head. This Uganda is full of bafere, so you better know how to fake convincing miracles. Then live your life like you’re sure of the future you’re currently building. Start a business you’re willing to do forever. This is the only way you can become truly rich.