Investors should avoid NRM state patronage like plagues

Investors should avoid NRM state patronage like plagues

 

 

If I had Madhvani's money and wanted land elsewhere outside Busoga, the Ugandan president, Yoweri Museveni, is the last person I would want as a pitchman. Do not get me wrong; the dictator is still strong and not about to abdicate soon. Moreover, he still commands rapt attention from a retinue of patronised clients and hangers-on, who have instant access to the state, political power and resources. Therefore, an investor who wants shortcuts and decision by diktat, rather than through a market of free sellers and buyers;  paying fair market prices; would find statehouse powerbrokers, the president and kick-back dependent ministers, good contacts. However, a serious industrialist whose forefathers painstakingly built his inheritance and industrial portfolios through painstaking savings, strategic investments decision-making and shrewd avoidance of obvious market and political risks, would shun like a plague, any association of his businesses and acquisitions with Museveni or his political operatives.

 

First, corruption, bribe-taking, nepotism, cronyism and abuses of power and using  public offices to enrich oneself, relatives and associates at the expense of the public good,  is the norm rather than the exception among circles within Museveni's government. This problem is by no means isolated  or recent to global funds for Malaria, Tuberculosis and HIV / Aids that was parcelled out among a certain ethnic group like the bequeath of their tribal patriarch. The country has been through even more daring and open robberies before. Through the privatisation and divestiture of national assets schemes, the National Resistance Movement / Army (NRM / A) political, military and professional ethnic elite shared among and helped themselves to state owned industries and businesses; looted and bankrupted the Uganda Commercial Bank (UCB). Such booties included but not limited to state run ranching schemes, Uganda Hotels (UH), civil servants' pool houses, Coffee Marketing Board (CMB), Lint Marketing Board (LMB), Uganda Transport Corporation (UTC), Uganda Cooperatives Transport Union (UCTU), and the Cooperative Bank. Ledger entries in the Consolidated Funds for these and other divestments show zero.

 

While the scandals surrounding Caleb Akandenaho, aka Salim Saleh, the president's brother's dalliances with UCB and Apollo Hotel are well known epitomes of influence peddling and tribal connections, many allocations such as Printpak (U) Ltd, in Jinja, to people like Eriya Kategaya, are under reported. It is not for nothing that Museveni holds such sway on most of these who-is-who of the NRM/ A from Western Uganda. Their primordial ethnic bonds are reinforced by corruption and mutual oath of one-for-all and all-for-one allegiances. It is these inescapable webs of self-enforcing mutually destructive blackmail that rein in malfeasants like Kategaya, David Tinyefunza, Henry Tumukunde, Amanya Mushega, and Henry Kaijuka to mention but a few. These are people who have feebly tried to break free from Museveni's clutches. Unfortunately, they remain on a short leash; they can never pull far away from Museveni, who has tight hold of the cords he uses to yank them back to sit at his feet like little poodles. Whether it is Tinyefunza, Kategaya or Tumukunde, they know their master's voice and run back to him with tails wagging between their legs, when he shouts commands. Their need to cooperate is like their hands are jammed in the national cookie jar and none of them can pull out his hand without causing unbearable pain and discomfort to the others. In the end, they just manoeuvre to find their comfort zone, give up the yelping and let it be. Everyone wins.

 

Second, given such blatant abuses of power and unbridled self-aggrandisements, it is almost a foregone conclusion that a nationalist and popular government that comes to power after Museveni, must institute an independent inquiry on state corruption and put in place mechanisms for recovering ill-gotten wealth and illegally divested state properties and assets. Inevitably, irregularly acquired public assets, private citizens or communities unfairly dispossessed of their properties through unfair legislations or corruption of the courts by those connected to the state, will certainly receive special attention and expeditious statutory repeals and adjudications. Savvy investors who benefit from thorough risks assessments would avoid investments portfolios and businesses that fall into these categories. However, industrialists such as the Madhvanis, Aya Brothers, and Bassajjabalaba, for whom cultivating personal relationships with the state is a premium, do not pay for good risk analysts and do not benefit from sound professional advice. |Consequently, they are deaf and blind to impending long-term choppy weather conditions unfavourable to the mechanics of their business crafts.

 

Third and finally, Museveni's fate is tied up with NRM/A's future. Once Museveni exits the political scene, whether pushed by democratic forces, or when sceptre and crown inevitably tumble as death the leveller ascends the throne, the NRM as a political force and organisation will cease to exist. A wise entrepreneur would be wary of twinning the fate of his fortunes with that of a regime built around one mortal man. Although the Bahima dominated top and middle commands of the army will certainly try to assert itself to maintain rank and file cohesion and loyalty to a successor regime led by another western NRM politician or soldier, there is no one with half Museveni's forcefulness of character and iron will to command political loyalty or to brutally suppress dissent and have his way. It is more likely for things to tragically fall apart than to congeal and cohere around some Musevenesque man of destiny. Forcefulness of character will no longer be enough to cower people and build a nation on; because the same personal qualities that helped Museveni maintain an iron grip on power for the last 22 years; have correspondingly generated resentments, divisions and dissent that have increasingly eroded his political capital. Apart from his native Western Uganda, Museveni can no longer win a free and fair election in any other part of the country.  What passes for a legitimate government governing with the popular will, is an institutionalised personal rule that  heavily relies on the army, a militarised police, and parliamentary majority flooded with indirectly selected special interest groups beholden to Museveni and the NRM/A.  It is a government whose political legitimacy and right to govern is in great doubt; even less so, its authority to expropriate private and communal properties in the name of dubious national development and industrialisation schemes.

 

Were the Madhvanis and investors like them interested in long-term business presence in Uganda, Museveni and local NRM agents, particularly in Acholi, would be the last people they would want to preside over or witness even a legitimate business deal. However, if like all speculators who exploit chaos and uncertainties, the Madhvanis want to  make a quick buck and leave the natives to clean up whatever mess is left behind, they are well within their business instincts. Just in case they exclusively interact at statehouse and ministerial circles and have missed all the signs, they should know a Museveni investment bond or security bonds issued in the name of his regime, is not good beyond a year at a time. A maturity horizon longer than a year is not worth the paper it is printed on.

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No man is an iland, intire of it selfe;
every man is a peece of the continent,
a part of the maine;
if a clod bee washed away by the sea,
Europe is the lesse,
as well as if a promontorie were,
as well as if a mannor of thy friends
or of thine owne were;
any mans death diminishes me,
because I am involved in mankinde;
And therefore never send to know
for whom the bell tolls;
It tolls for thee.

John Donne
-----------------------------------------------------------http://folk.ntnu.no/makarov/temporary_url_20070929kldcg/internationale-instr-defence_ministry_nazarov_1977.mp3
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