ELIAS BIRYABAREMA
KAMPALA--Just about every body round here and across the globe agrees the escalating food prices are fomenting a new world pandemic, that will unsettle societies and spawn desperation and death.
As it appears, the logic is pretty simple: costly food will increasingly slip out of the reach of millions of poor folks already struggling to survive daily. Mass starvation will consume millions. And as the civil unrest erupting in several countries has demonstrated, the consequences of this spreading hunger can be far reaching.
Only one man is smiling through all this global food melancholy—President Yoweri Museveni.
Always a contrarian, his supposedly unfailing wisdom ahead of everybody’s, Mr Museveni was reported on NTV’s Tonight news programme recently claiming that far from being saddened, he was revelling in the runaway food prices. For once, he said, his peasants, long tormented by bottom earnings from their produce, were going to get rich.
Glibly, his political assistant, Mr Moses Byaruhanga chorused the same assertion. It is hard to understand why Mr Museveni should be making such an embarrassingly populist claim.
True, Uganda produces a number of foods—beef, rice, sugar, corn (maize) etc— whose world supplies are running critically low and it is easy to construct a simplistic argument that the rise in the prices of these foods is good for Uganda.
But that would be farcical.
Although accurate figures are hard to find, Uganda is believed to be a net food importer and any steep upswing in the cost of food will easily deteriorate our trade deficit, and potentially rattle the larger economy. Uganda’s agriculture is nearly all of it subsistence, and there’s little the country’s peasants—barely able to feed themselves even in the best of times, to say nothing of exporting—can benefit from the soaring world food prices.
Yes, a peasant here and there, with extended acreage under cultivation, will rake in a few extra shillings but that’s a blip compared to the deadly hunger that could grip urbanites and the mass starvation awaiting the millions in North and Eastern Uganda that rely on relief food daily if the rocketing prices are not curbed.
In fact, even if these prices go on to engender a crisis in Kampala and other urban centres, a large section of the peasant families, who daily scrimp by on remittances from their richer, urban-dwelling relatives, will get sucked up in the pandemic as those relatives spend all they earn on the costly food. A great deal of the food consumed across Uganda is imported: wheat, corn, rice, cooking oil etc. I can’t seem to see any obvious winners in this food price scourge—it’s all a lose-lose situation.
In fact, more than any other leader, President Museveni should worry: 1.6million of his citizens, trapped in displacement camps in North and North East Uganda, are fed by WFP, mostly on imported food—corn, cooking oil, wheat flour etc. As the prices rise, WFP’s budget will only be able to purchase lesser and lesser food and the rations are already being cut as the body’s donors are unwilling or slow in responding to appeals for more generosity. And even if WFP were purchasing the food from Uganda, the supply scarcities would still spark immense suffering despite a windfall for the middlemen and may be some peasants. Diluted by the price hikes, the WFP’s budget would only cover a fraction of its normal food purchase levels, meaning hunger in the bellies of millions in Uganda whose mouths it caters.
And that’s before we even start to think of the dreadful consequences of starvation in Kampala and other municipalities across the country. Already unable to cope with the ever increasing hordes of poor, sudden starvation would stir nothing short of upheaval, a crisis the NRM can hardly handle. Gloomily, too, the NRM, never a government to plan for contingencies, runs the nation without strategic food reserves and so all it takes is a mere slight jolt to a normal food flow to plunge Uganda into a full-blown catastrophe. The ballooning food supply crisis could offer that jolt.
If Mr Museveni were right and food prices were good for peasant nations, West African countries, which like us have plenty of them, would not be erupting. And yet governments there have had to mass police forces on the streets to quell hunger-stoked explosions of violence.
So how, then, minding all the foregoing could Museveni start celebrating the global food price surge?
It’s a noxious blend of populist politics, mendacity and plain incompetence that have come to define the NRM lately. His predictions of bonanzas for peasants, false and absurd as they are, are easily believed by the NRM’s core constituency—the naïve rural masses. And obviously unprepared to absorb the impact a food crisis, the populist declarations of the supposed bonanza helps Mr Museveni sooth a fretful and agitated populace.
Friday, April 25, 2008
Strange Encounter: Clean African City!
Kigali, April 13—few experiences are as refreshing as meeting a Sub-Saharan African city or town that comes close to typifying what a city should be.
Kigali is that.
From the grassy, beautifully manicured medians to the unfailing traffic lights, to the smooth road network to the absolute civil order across the city, Kigali brings profound warmth to the heart.
A tiny city of little commerce, a thin population and an unremarkable skyline, Kigali makes up for all that stunning lack of sophistication with its breathtaking neatness, civil discipline and administrative efficiency.
If to visit down-town Kampala is to be in hell and back, a visit to Kigali is a visit to Heaven.
The contrast is stark as that! That Rwanda, a tiny, extraordinarily poor nation that’s still eclipsed by its genocidal horrors, can marshal its minute efforts and construct an organised and sensible city and all Uganda’s NRM can do—with the vast resources at its disposal—is manage a garbage-strewn, flood-swathed Kampala is one of the most numbing paradoxes of our time.
Thursday, March 20, 2008
Bank of Uganda: Violated Under Museveni, Its Future is Troubling.
ELIAS BIRYABAREMA
Kampala--In November 2006, the FDC leader, Col. (rtd) Dr Kiiza Besigye made public stunning Bank of Uganda, BoU, confidential documents he had obtained exclusively; revealing for the first time, according to Besigye, President Yoweri Museveni directly violating laws that shield BoU from political influence.
The documents that involved several internal BoU and Finance ministry correspondences and a letter by Mr Museveni showed how he personally directed the BoU Governor, Mr Tumusiime Mutebile to use money meant for servicing a European Investment Bank, EIB, development loan to salvage a collapsing company belonging to a crony, Mr Hassan Basajja Balaba.
Basjja Balaba Hides and Skins, the company in question, was threatened with foreclosure by its creditor Standard Chartered Bank and the BoU, under Mr Museveni’s pressure, used money from the so called Apex Reflows Account which was part of the Consolidated Fund to pay the company’s Shs 20 billion loan.
This revelation was extraordinary in many ways but most importantly it offered the public a surprising window into the storied and befogged edifice that is BoU. At once it revealed a troubling vulnerability to politics that many people had never thought of, trusting as they did in the robust constitutional protection against executive interference in the Central Bank’s performance of its obligations.
That naivety might seem excusable. Exteriorly BoU has for long projected an image that innocently resembled what in fact the institution should be —a Central Bank acting independently to manage the country’s financial system and microeconomic stability. There was scarcely any hint the Bank had become deeply enmeshed in Mr Museveni’s far-reaching web of political patronage and Besigye’s astonishing disclosures led many to take in some heavy breath, unable to comprehend what they were reading.
And yet the Basajja scandal, even with its record-setting scale, seemed to be the tip of the iceberg—a fact that was underscored by FDC’s call for an inquiry into the (mis)management of the Consolidated Fund for the last ten years. And as if to affirm the urgency of FDC’s call, as the full length of the Basajja swindle was still unfolding, it was also coming to light that BoU had also lost over Shs 24 billion in politically-influenced loan guarantees to a bogus Sri Lankan textiles investor, Mr Velupillai Kananathan of Tri-Star Apparels.
While BoU is supposed to operate independently, behind-the-scenes president Museveni has pulled the levers, with its working bearing his imprint in ways far more extensive that most people realise or may ever believe. Getting his wishes implemented by BoU has been particularly easy, in a large part due to what you may call “friendly forces.”
It’s worth noting that the director of BoU’s Development Finance Department, which was administering the Apex Reflows money was Naomi Nasasira—wife of Eng. John Nasasira. Mr Nasasira is Mr Museveni’s Minister for Works and Transport and one of his fierce loyalists and longest-serving cabinet members.
And this hidden but strong relationship between the Central Bank and President Museveni, which is setting odious precedents, will deeply impact on this institution’s future functioning and partly determine how Mr Museveni’s successor government might relate to it.
Will BoU be able to recapture its diminished integrity in a post-Museveni Uganda? Can it regain its constitutional autonomy and execute its mandate free from the corrupting influence of the executive? If Uganda’s political actors and general population is disgusted with Mr Museveni and his thieving NRM regime and is looking forward to a hopeful post-Museveni Uganda: these will be some of the questions that will have to be pondered, particularly in the wider and vital debate of ideas on how to rejuvenate and clean up key state institutions.
BoU’s spending of the money that was subsequently lost to Basajja and Tri Star was as reckless as it was illegal. Parliament and the Auditor General, two authorities supposed to monitor and authorise all drawings on the Consolidated Fund never sanctioned it.
A researcher at Makerere University-based Economic Policy Research Centre, Mr Lawrence Bategeka reasoned that while Mr Museveni has not been exemplary in guarding BoU’s independence, neither has he sought to ride roughshod over it.
“I can’t see any single incident when Mr Museveni has flagrantly violated the independence of the Central Bank,” he said. Even when he has intervened, Mr Bategeka said, it has been largely to use it to influence the course of the nation’s economic policy when he thought it had derailed.
Central Banks for instance, according to Mr Bategeka, have long expanded their role from their traditional focus on the narrow aspects of financial regulation, interest rates and inflation to wider areas like spurring economic growth and development. That shift has meant that BoU’s can intervene actively to for instance stimulate the economy to create more jobs or buoy up distressed firms, something that may justify Mr Museveni’s influence of BoU and its spending of taxpayer money.
Such reasoning however would overlook troubling details. True, it might appear reasonable for Mr Museveni to use BoU to intervene in stabilising macroeconomic issues but not when he’s doing it illegally.
Secondly, even as it is being cast as benign, Mr Museveni’s breach of the independence of BoU might entice him (if it hasn’t already) into using the Central Bank to execute politically populist and imprudent economic programmes. Such a legacy might get entrenched by a future leader with disastrous consequences for the reputation of the Central Bank and the wider economy.
Deputy Secretary to Treasury, Mr Keith Muhakanizi argued in an interview that Mr Museveni actually is empowered by the constitution to act the way he did in the Basajja and Tri-Star disasters, describing his directives to BoU as “a policy matter.”
He, too, was cold to suggestions of Museveni’s interference with BoU, noting that if there had been any mismanagement of the Consolidated Fund, it was caused by bureaucrats acting on their own. “The problem is that when these people (public servants) fail or are caught in the wrong then they want to shift responsibility,” he said.
The letters from Mr Museveni to the Governor of BoU that Mr Besigye exposed though hardly corroborates Mr Muhakanizi’s assertions.
To be sure, Mr Museveni’s irregular dealings with the Central Bank have not been epidemic and they do not seem to be out of the bounds of aberrations that Ugandans have come to expect from the NRM administration. Nevertheless, if BoU doesn’t fight to retrieve its slipping independence, it could easily succumb to worse manipulation in a post-Museveni Uganda, foreshadowing disaster for the economy.
Kampala--In November 2006, the FDC leader, Col. (rtd) Dr Kiiza Besigye made public stunning Bank of Uganda, BoU, confidential documents he had obtained exclusively; revealing for the first time, according to Besigye, President Yoweri Museveni directly violating laws that shield BoU from political influence.
The documents that involved several internal BoU and Finance ministry correspondences and a letter by Mr Museveni showed how he personally directed the BoU Governor, Mr Tumusiime Mutebile to use money meant for servicing a European Investment Bank, EIB, development loan to salvage a collapsing company belonging to a crony, Mr Hassan Basajja Balaba.
Basjja Balaba Hides and Skins, the company in question, was threatened with foreclosure by its creditor Standard Chartered Bank and the BoU, under Mr Museveni’s pressure, used money from the so called Apex Reflows Account which was part of the Consolidated Fund to pay the company’s Shs 20 billion loan.
This revelation was extraordinary in many ways but most importantly it offered the public a surprising window into the storied and befogged edifice that is BoU. At once it revealed a troubling vulnerability to politics that many people had never thought of, trusting as they did in the robust constitutional protection against executive interference in the Central Bank’s performance of its obligations.
That naivety might seem excusable. Exteriorly BoU has for long projected an image that innocently resembled what in fact the institution should be —a Central Bank acting independently to manage the country’s financial system and microeconomic stability. There was scarcely any hint the Bank had become deeply enmeshed in Mr Museveni’s far-reaching web of political patronage and Besigye’s astonishing disclosures led many to take in some heavy breath, unable to comprehend what they were reading.
And yet the Basajja scandal, even with its record-setting scale, seemed to be the tip of the iceberg—a fact that was underscored by FDC’s call for an inquiry into the (mis)management of the Consolidated Fund for the last ten years. And as if to affirm the urgency of FDC’s call, as the full length of the Basajja swindle was still unfolding, it was also coming to light that BoU had also lost over Shs 24 billion in politically-influenced loan guarantees to a bogus Sri Lankan textiles investor, Mr Velupillai Kananathan of Tri-Star Apparels.
While BoU is supposed to operate independently, behind-the-scenes president Museveni has pulled the levers, with its working bearing his imprint in ways far more extensive that most people realise or may ever believe. Getting his wishes implemented by BoU has been particularly easy, in a large part due to what you may call “friendly forces.”
It’s worth noting that the director of BoU’s Development Finance Department, which was administering the Apex Reflows money was Naomi Nasasira—wife of Eng. John Nasasira. Mr Nasasira is Mr Museveni’s Minister for Works and Transport and one of his fierce loyalists and longest-serving cabinet members.
And this hidden but strong relationship between the Central Bank and President Museveni, which is setting odious precedents, will deeply impact on this institution’s future functioning and partly determine how Mr Museveni’s successor government might relate to it.
Will BoU be able to recapture its diminished integrity in a post-Museveni Uganda? Can it regain its constitutional autonomy and execute its mandate free from the corrupting influence of the executive? If Uganda’s political actors and general population is disgusted with Mr Museveni and his thieving NRM regime and is looking forward to a hopeful post-Museveni Uganda: these will be some of the questions that will have to be pondered, particularly in the wider and vital debate of ideas on how to rejuvenate and clean up key state institutions.
BoU’s spending of the money that was subsequently lost to Basajja and Tri Star was as reckless as it was illegal. Parliament and the Auditor General, two authorities supposed to monitor and authorise all drawings on the Consolidated Fund never sanctioned it.
A researcher at Makerere University-based Economic Policy Research Centre, Mr Lawrence Bategeka reasoned that while Mr Museveni has not been exemplary in guarding BoU’s independence, neither has he sought to ride roughshod over it.
“I can’t see any single incident when Mr Museveni has flagrantly violated the independence of the Central Bank,” he said. Even when he has intervened, Mr Bategeka said, it has been largely to use it to influence the course of the nation’s economic policy when he thought it had derailed.
Central Banks for instance, according to Mr Bategeka, have long expanded their role from their traditional focus on the narrow aspects of financial regulation, interest rates and inflation to wider areas like spurring economic growth and development. That shift has meant that BoU’s can intervene actively to for instance stimulate the economy to create more jobs or buoy up distressed firms, something that may justify Mr Museveni’s influence of BoU and its spending of taxpayer money.
Such reasoning however would overlook troubling details. True, it might appear reasonable for Mr Museveni to use BoU to intervene in stabilising macroeconomic issues but not when he’s doing it illegally.
Secondly, even as it is being cast as benign, Mr Museveni’s breach of the independence of BoU might entice him (if it hasn’t already) into using the Central Bank to execute politically populist and imprudent economic programmes. Such a legacy might get entrenched by a future leader with disastrous consequences for the reputation of the Central Bank and the wider economy.
Deputy Secretary to Treasury, Mr Keith Muhakanizi argued in an interview that Mr Museveni actually is empowered by the constitution to act the way he did in the Basajja and Tri-Star disasters, describing his directives to BoU as “a policy matter.”
He, too, was cold to suggestions of Museveni’s interference with BoU, noting that if there had been any mismanagement of the Consolidated Fund, it was caused by bureaucrats acting on their own. “The problem is that when these people (public servants) fail or are caught in the wrong then they want to shift responsibility,” he said.
The letters from Mr Museveni to the Governor of BoU that Mr Besigye exposed though hardly corroborates Mr Muhakanizi’s assertions.
To be sure, Mr Museveni’s irregular dealings with the Central Bank have not been epidemic and they do not seem to be out of the bounds of aberrations that Ugandans have come to expect from the NRM administration. Nevertheless, if BoU doesn’t fight to retrieve its slipping independence, it could easily succumb to worse manipulation in a post-Museveni Uganda, foreshadowing disaster for the economy.
Subscribe to:
Posts (Atom)