Tag Archives: Uganda

Rise of the peoples’ assembly

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

We the people…”; that is how most constitutions start. Of course, the politicians who tend to refer to those words the most are usually the ones who also hold them in contempt the most. It used to be the case that they could actually get away with the disgust they often have for the very people that voted them into office. Aloof and conveniently tone-deaf for most of their tenures initially, their amnesia is miraculously cured at the near-end of their typical four to five-year first term in office, when it dawns on them that should they not now grovel to the same people they cared little about hitherto, they may soon lose the office that has been the source of their ostentation. In other words, as much as they dislike the very people they are supposed to serve, they know they are ultimately vulnerable to their whim. Power truly belongs to the people. Shrewd politicians realise this very early on. And the successful ones are able to hold sway over the affairs of their fellow men and women for as long as the Heavens allow irrespective of whether they hold office or not because they stay close to the people and go with their ever-changing tide of opinion. Inevitably, they are populists. Politicians, even the supposedly altruistic ones, do not like to admit it. But ultimately, it is the desire to rule that really drives them. Power is the end, not the means.

All about power
A person has to have a certain level of hubris to think himself qualified to rule over a multitude. Some do not realise this until they lose an election. Otherwise what would motivate some men to seek political office repeatedly even as they lose with the same frequency. Take Kenyan opposition figure Raila Odinga, for instance, who has been aspiring to be president for almost all of his political life. He probably made his last futile attempt last year. Probably realising he no longer stands a chance, he now seeks to be president of a so-called “peoples’ assembly”. If what has happened since the idea was first mooted is anything to go by, it has not been as successful as he might have hoped. An earlier botched swearing-in as the “peoples’ president” is now supposed to happen anytime soon or never. Perhaps taking a cue from his older fellow opposition politician, longsuffering Ugandan presidential contender Kizza Besigye also called for the establishment of a peoples’ assembly in early January. What instigated his call was the recent enactment of a law that removed presidential age limits, enabling longtime president Yoweri Museveni to run for office again. In both cases, the opposition politician’s frustration made them resort to the people. Had they been more successful, it is hardly likely their reckoning would ever sway towards them. Their evolution lays bare what they wanted all along: power. They are not any different from their supposed antagonists in office. And were they to secure power themselves, they may behave similarly as the politicians they oust or worse.

Yours to wield
This new trend of African opposition politicians drifting towards alternative and mostly informal platforms to wield power after failing to secure it via state institutions is not entirely novel. They are simply latching on to something that already started without their urging. What is a peoples’ assembly? What is it supposed to achieve? Is there somewhere they are supposed to gather? Are they voted for? How long do the members serve in office? The peoples’ assembly is you and I. When Nigerians finally lost their patience with an effective but wayward police commando unit, they raised their voices. Were they heard? You bet they were. Nigerian authorities were finally forced to go after marauding Fulani herdsmen, long maiming and killing innocent farmers with impunity, after the people said enough! South Africans have been unrelenting in their insistence that the “capture” of their state by private persons – who have, in collusion with the very people they elected, been pilfering their commonwealth – must stop and the culprits punished. Did their voices matter? Yes. Now a judicial commission of inquiry is slated to get to the bottom of the matter. But for pressure by Ghanaians on their government during the infamous “dumsor” period of power load-shedding and cuts, they may have suffered a little while longer. Opposition politicians are clearly being opportunistic. A peoples’ assembly is not something you organise per se. It is leader-less. Put another way, all of its members are leaders. Before the advent of social media, people power manifested itself in African countries only on occasion. Now, it can be as immediate as the time it takes to type a hashtag. We all have the power to make a change.

Also published in my BusinessDay Nigeria newspaper column (Tuesdays). See link viz. http://www.businessdayonline.com/rise-peoples-assembly/

Bank of Uganda should seize the day

By Rafiq Raji, PhD

Recent political developments in Uganda are sobering, but not surprising. Yoweri Museveni, the Ugandan president, is pushing through parliament, legislation that would allow him stay in power another 5 years, and perhaps for life. He has already been in power for 31 years. There are indications some citizens may no longer be passive about such autocratic tendencies: contentions about the controversial law seeking to remove age limits on contestants for the presidency caused a brawl during at least two recent sittings of the Ugandan legislature. Security operatives, allegedly from President Museveni’s special forces, were immediately deployed to eject the erring lawmakers. Of course, a downside is that instead of the security agencies putting more time to closing the many unsolved murder cases in the country, they are busy going after perceived enemies of the president. Never mind the bizarre mandate they recently added to their primary remit: policing indecent dressing and pornography. There could not be greater evidence of misplaced priorities. More likely is it, though, that the authorities seek to distract the populace from more pressing problems. Be that as it may, there have been some positive happenings on the back of having a relatively secure political leadership.

Bright future
The authorities recently agreed terms with a consortium to build a much desired crude oil refinery; after a number of failed talks with previously interested investors. Their persistence has clearly paid off, though. Because not only have they agreed what seem like quite good terms, the investors are of great standing. The consortium, which includes American industrial giant, General Electric, would build and operate the country’s first refinery, hopefully processing a greater part of the country’s recoverable oil reserves of 1.4-1.7 billion barrels; a feat that has largely eluded other African oil producers. So even as Mr Museveni’s longrunning rule deserves much criticism, it is highly unlikely the refinery feat would have been achieved if his position were not so secure. A fragile political leadership could have easily succumbed to pressure from global industry giants who harped about the weak economic case of the project. Earlier botched negotiations were with Russia’s RT Global Resources (which then put the project at about US$2.5 billion) and a subsequent one with South Korea’s SK Engineering. It is not all done yet, though. A project framework agreement is yet to be signed, but is expected to be endorsed soon. Better still, this new agreement involves regional neighbours, Kenya and Tanzania, which have committed to 2.5 percent and 8 percent stakes respectively. Additionally, construction has started on the US$3.5 billion joint crude oil pipeline with Tanzania, expected to be completed by 2020, about the same time first oil is expected. An ambitious Uganda now envisages membership of the oil producing countries’ cartel, OPEC, then. If all goes according to plan, growth could be in the high single-digits in just half a decade from now, when as the International Monetary Fund (IMF) estimates, the crude oil economy could account for at least 4 percent of output; albeit it is not likely to match pre-global financial crisis growth of above 10 percent. Growth would likely still be decent in the short to medium term, though, about 5.7 percent in 2018, the IMF reckons, from an estimated 5 percent in 2017.

Last chance
I made a call to my clients for an additional interest rate cut by the central bank in August, after one by a 100 basis points to 10 percent in June. The Bank of Uganda (BoU) thought otherwise and kept its benchmark rate unchanged. I am reiterating my call for at least a 100 basis point rate cut to 9 percent. With inflation slowing, and likely to slow further, I think the monetary policy committee (MPC) has a chance to ease policy at its October meeting; lest it misses the chance to do so for the remainder of the year. At 5.3 percent, annual consumer inflation was largely unchanged in September; only a basis point higher than the earlier month’s headline of 5.2 percent. But this was still great progress from a year-to-date high of 7.3 percent in May. That said, prices accelerated quite significantly on a monthly basis in September, by 1 percent, after barely 0.2 percent in August. The increased price pressure is likely fleeting, though. Monthly core inflation last month was just 0.1 percent, from zero percent earlier; pushing annual core inflation by about the same pace to 4.2 percent from 4.1 percent in August, well within the authorities’ 5 percent target. My forecasts put annual consumer inflation at about 4 percent by year-end. The committee should seize the day.

Also published in my BusinessDay Nigeria column (Tuesdays). See link viz. http://www.businessdayonline.com/bank-uganda-seize-day/

On the Ugandan economy

By Rafiq Raji, PhD

Growth this year would not likely be as robust as earlier expected. This much has been acknowledged by the authorities. Finance minister Matia Kasaija announced in his recent budget speech for the 2017-18 fiscal year that growth would be about 3.9 percent for the 2017-18 fiscal year, 1.6 percentage points below the authorities’ 5.5 percent target. In the government’s defense, Mr Kasaija was quick to point out that at least the Ugandan economy was not in a recession. (Africa’s two largest economies, Nigeria and South Africa, are in one.) Even so, major sectors of the Ugandan economy slowed quite significantly over the past year. Agricultural output underwhelmed by almost half the preceding year’s rise. Industry, mining and construction were also laggards. There are a couple of reasons for this. For one, drought in the region has been weighing on agricultural production. Key export markets, whether in faraway Europe or its war-torn neighbour, South Sudan, have also been battling troubles of their own.

Price pressures call for easing pause
High interest rates have also been a factor, motivating the Bank of Uganda (BoU) to start easing monetary policy once the inflation outlook began to show improvements; most recently by 50 basis points to 11 percent. There is now a strong case for a pause though. Consumer inflation rose to 7.2 percent in May, from 6.8 percent the month before. More importantly, core inflation ticked higher than the BoU’s 5 percent target in the month at 5.1 percent from 4.9 percent previously; albeit it is not expected too far afield subsequently. Still, the headline figure may remain on an upward trend for a couple of months more.

Long wait for oil
Mr Kasaija’s budget was more aspirational than realistic in some aspects though. It is laudable that Ugandan hopes to be a middle-income country in the next three years. Considering the economy would need to have grown by more than half its expected 2017 size of US$26 billion over the period to 2020, this seems a little farfetched. Adding $17 billion over 3 years at an average annual nominal GDP growth rate of 22 percent would be, to say the least, a tall order. Ambition should always be lauded, however. If Uganda is able to quicken the pace of its oil and gas exploration, it could achieve this goal in the next 6-7 years, say. Unlike its bigger neighbour, Uganda has not been similarly aggressive in developing its oil and gas fields: Kenya hopes to export its first barrel of crude oil this year, five years after its discovery in 2012. If everything goes according to plan, Uganda’s could be by 2020: fourteen years after crude deposits were first discovered in 2006. In light of its developmentalist approach, however, it could take longer: Uganda wants to be able to cater for its domestic fuel needs from its oil. (Africa’s largest producer, Nigeria, exports its crude oil and imports refined petroleum products.) Mr Kasaija says the government is in the process of selecting a lead investor to build the refinery. Getting investors for the project has been difficult hitherto. There is greater focus now on the export pipeline. Thankfully, regional politics, which initially stalled its construction seem to be less of a concern now: In February 2016, Uganda changed its mind about piping its oil via Kenya and chose to go with Tanzania instead.

Old man talk
As if to refute arguments suggesting the security services were increasingly lax, especially in light of recent high profile murders, Uganda’s president, Yoweri Museveni, kicked off his recent 2017 state of the nation address (SONA) by first highlighting his government’s defeat of the Lord’s Resistance Army (LRA) and Allied Democratic Forces (ADF) rebel groups and cattle rustlers in the northeastern part of the country. President Museveni however failed to highlight some of the very deplorable excesses of the security forces: the army killed more than 100 people at a royal’s palace in November 2016, it is alleged. His main critic and leading opposition politician, Kizza Besigye, was quick to rebuke him on social media about this and other security failings. To be fair, Mr Museveni acknowledged the gaps in the security architecture that have allowed the criminals have their way. His excuse then? Funding. He wishes the government could put cameras in towns and highways for instance. But there is a competency problem as well. A greater factor is corruption, however, with the police repeatedly criticized by the public for being in cahoots with criminals. The old man says they have the capacity to ensure nobody disturbs the peace.

Also published in my BusinessDay Nigeria newspaper column (Tuesdays). See link viz. http://www.businessdayonline.com/on-the-ugandan-economy/