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Museveni’s anti-graft crusade

Why the president’s efforts against corruption may be politically appealing but are strategically of little value

THE LAST WORD | ANDREW M. MWENDA | Last week, President Yoweri Museveni launched an “anti-corruption unit” in his office. This is one in many efforts the president has tried and failed in the last 32 years. The NRM’s Ten Point Program had “fighting corruption” as its number two priority. Yet Museveni has presided over the worst levels of corruption in our post-independence history. For our “analysts” this is because Museveni is a dishonest man. Nonsense!

Corruption is not a problem of Uganda alone. Every leader in post-independence Africa has come to power promising to fight it. Nearly all of them have ruled and left power being accused by their opponents of perpetuating it. Corruption is structurally obdurate in post-independence Africa because it is the currency of managing power relations in poor agrarian societies. It acts as glue to hold together the often flabby and heterogeneous coalitions of our multi ethnic societies. Corruption also acts as a weapon for opponents to fight incumbents because it has been constructed as morally revolting and is always given as an explanation for (rather than a characteristic of) our poverty.

Thus leaders across Africa have been placed in the difficult position of having to rule by relying on corruption and then pretend to be fighting it. I do not know of any government in Africa today, with the sole exception of post genocide Rwanda, where corruption is not the main engine of governance. This is not a moral judgement on those governments and leaders that preside over high levels of it. Rather it underlines the fact that corruption and patronage are not just cost-efficient and cost-effective ways of building electoral and governing coalitions in poor agrarian societies, they are also the only affordable options.

Corruption as a moral problem would not have been as toxic as it is today if it was not given as the explanation for Africa’s poverty. Yet there is no evidence that the existence of corruption in a country automatically stifles development. Some of the most successful nations like the United States (19th century) South Korea (20th century) and China (21st century) have had extremely high levels of corruption during their intense period of transformation from backward, poor agrarian societies to modern affluent industrial nations. The lesson: corruption is a characteristic feature of poverty, not a cause of it.

I am not suggesting that high levels of corruption were responsible for America’s or South Korea’s or China’s high rates of growth, even though I cannot rule that one out. This historic evidence demonstrates that the existence of corruption even at the highest levels of state does not automatically stop a country from rapidly transforming from poverty to riches. This is because the effects of corruption on growth depend on the context.

For example, if someone stole money meant for a hospital in Kumi and bought a luxury house in Kololo from an industrialist; and the industrialist used that money to build a firm that grows into a Samsung or Apple, such corruption would have been more productive than the hospital. We need only one in every ten thefts (the success rate of venture capital) for such money to get into the right hands and transformation will follow. Successful firms like Google, Apple, Facebook and Microsoft relied on venture capital to start. Their founders did not investigate the original source of the funds because it was irrelevant. It is the innovation, not the source of money that was fundamental to their success.

Many public investments have symbolic humanitarian value but are economically inefficient and less productive compared to private investments. Therefore, the diversion of resources from the benefit of many to use by a few may, in certain circumstances, be economically productive. If public investments created more value than private investments, communism would have created more prosperity than capitalism. Capitalism is based on the ethic of private greed, not common welfare.

There is another example of context: if a country has an excessively regulated business environment but its bureaucracy is dishonest in enforcing rules, then a bribe to speed up business registration, issuing of an investment license etc. will act as the grease that turns the wheels of investment and growth. So having an honest government is not a magic bullet to economic success, however politically appealing that may be. Equally, having a corrupt government is not a sentence to economic stagnation, however morally repugnant such corruption may be.

The African elite are locked up in false assumptions about the factors perpetuating our poverty. They think it is due to absence of democracy and respect for human rights and prevalence of corruption. This is fashionable nonsense. There is one factor that underlies every country that has grown rich – it is its terms of trade (the relationship between the prices at which it sells her exports and the prices paid for its imports).

It does not matter whether the country in question is a democracy or a dictatorship, a monarchy or a republic, corrupt or honest, etc. as long it has favourable terms of trade over generations, its prosperity follows as night follows day.

Authoritarian Saudi Arabia which keeps its women in subjugation is many times richer than Africa’s leading democracies. Apartheid South Africa grew to become the most industrialised country in Africa while excluding 70% of its black population from all political and economic rights. Equatorial Guinea is the richest country in Africa in per capita income but has equally the most reprehensible government on our continent.

So if Africa devoted only 10% of the time, energy and money expended in pretentious fights against corruption to building national firms/brands that can export high value manufactured goods and increase national control over the commanding heights of her economies, our transformation would be possible. We are blind to our strategic needs (manufacturing and national ownership) and focused all our energies on inconsequential ones (democracy, corruption and human rights). These latter issues make good emotional appeal but contribute very little, if at all, to development.

Where should Africa look? America industrialised with Ford, General Electric and General Motors; German with Mercedes Benz, Audi and BMW; France with Citroen and Peugeot; Sweden with Volvo; Japan with Toyota, Honda and Nissan; South Korea with Samsung, Kia and Hyundai etc. China is building her own brands. Equally Africa’s prosperity will depend almost entirely on us putting the most efforts on building local firms/brands especially in manufacturing high value exports and constructing our infrastructure. The rest are diversionary quarrels and recriminations over irrelevant issues. Happy New Year.

amwenda@independent.co.ug

Stanbic Home Sweet Loans

14 comments

  1. I admire the way Mwenda displays scenario with candor and brutal frankness. “…..if someone stole money meant for a hospital in Kumi and bought a luxury house in Kololo………” sounds so innovative and sweet until it is substituted with………..”if someone created 1000 ghost soldiers and deployed them out of the way so their physical personality won’t be accounted for easily,then use the proceeds over time to build houses, buy land stock a ranch with livestock and …….. until Kony attacks with just 200 fighters from that same same area where the ‘ghost brigade” is deployed. Mwenda will tell us what becomes of the invested monies in such case. A government official steals money and banks it offshore or even in a neighbouring country so prying eyes won’t peep at his hiding place. As is wont to happen with neighbours, animosity develops over an issue like Migingo and the next thing you know, accounts of citizens of enemy country are instantly frozen by decree. How does that help the growth of the mother country of the thief? A supplier in cahoot with a well-placed fellow procures junk helicopters that are seen as new to the ordinary people. They are hired by UN and sent for a tour of duty so they earn hard currency. Their looks say they are good enough but inside they are rotten and the next thing you hear, the birds and their flyers are dead en route……how does that for cater for growth?
    If leaders are in power for the sake of lording it over their people, Mwenda’s argument is sound. If however they are there to serve the people , conserve the environment and protect the territorial integrity of the country, then the argument of capitalism serving private greed is shallow because the private accumulated property will need security……..which is always unavailable whenever abject poverty and destitution are widespread. Otherwise my dear Mwenda, I have never in my 60+ years seen camaraderie such as exist in a malwa club anywhere in a 5 star hotel gala, affluent society wedding or private exclusive high class club. What is growth if you homeless people all over the city streets, youth who are smoking bhang 24/7, semiliterates who are plotting kidnappings and kill the crean of society a la Susan Magara, corrupt judiciary which judges as per payment, police force which releases hardcore criminals to go murder a hard-working law abiding citizen a la Wilberforce Wamala. Corruption means rotten,decayed,smelly like the carcass of a dead dog by the roadside past which we hold our breath as we hurry beyond the reach of the stench. Next time you praise corruption Mwenda, give a measurable yardstick beyond which it should not go. Otherwise if it is left to run amok, it hurts the unintended. Wait till an employee steals from you and the next thing you know, his lawyer in cahoot with the judge produces a Butabika chit……we shall see you laugh with the back.

  2. 1.Why is Uganda still financially stable despite all the alleged corruption Scandals?
    2.How come the economy is still sound despite all the BOU circus.
    3.Is Corruption in Uganda over exaggerated?Does it exist for real or its an imagination by the poor.
    4.Bobi Wine ‘s shows are not fit for Ugandans. women are always raped during his shows thats why Government cancelled the show.Besides that Bobi Wine had just had his boring Kyeranga show 2 months ago so govt saw no need for him to have another one on boxing day?let him first utilize the money he received from the kyerenga show.
    5.We need to balance the shows between Bebe Cool and Wine.

    Happy New Year to all who missed me.

    • Hi, welcome back. what happened? Rumours did rounds for sometime but faded and finally disappeared that you were in Murchison bay mbu after fleecing a certain aged Canadian tourist of his valuables in one hotel in Entebbe. The amount they said is so substantial that no judge will jail you if you know how things work. kulikayo Winnie. I knew you wouldn’t be there for long. But one year leave is enough.

    • Dr. Eng. Kant Ateenyi

      Happy New year to you too sister.

  3. @ Rwasubutare:
    1.How is a junk helicopter supposed to trigger economic growth whether there is a war or not in a country?
    2. Who told you that those with ill gotten wealth lack security for their property?
    3.Are you aware that security takes one of the biggest share of the National Budget whether there is war or not?
    4. Dont you think the guys in Finance are to blame for budgeting for miscellaneous items like war equipment well knowing there is no war?
    5.Are you aware that some one can make clean money during M7’s regime and will still be branded corrupt?
    6.My only concern with the anti graft campaign M7 is mooting is how will they differentiate between those who have accumulated wealth as a result of loans and good business skills and those who are corrupt? For example if some earns salary of 5m she/he can apply for a loan of 100m
    7.How can a Briton defraud a Canadian?The so called slay queens who date old European men are having a time of their lives i know one who is dating an ex MI6 agent.The problem is that most Europeans prefer dating Acholi girls Which is not fair.
    8.I thought when Ugandans talk of Malawa they mean a Malware(Computer virus) but wapaai

  4. Nice to see the trio of old; my two brothers Rwasubutare and Dr Eng. Ateenyi and Madam(sic) Winnie.

    I have said most of what I have to say on corruption and it just baffles me the justifications M9 tries to come up with.

    I have almost come to the conclusion that he he is a very sick man who needs help or something very seriously not capable of an explanation, or it is me and many others who are sick. GOD help us all.

    Otherwise let me take the opportunity to wish you all a Happy and prosperous and peaceful 2019.

  5. Dr Eng Kant Ateenyi

    Thanks brother Ejakait.
    Indeed, we need all the luck on this corruption monster.
    Personally I have a rather science – oriented problem with our good old M9’s line: That in nature, if events and processes are left to proceed on their own, they do beget more chaos or disorder. (In Physics, we refer to this as 2nd law of Thermodynamics, otherwise nature’s known most powerful law – responsible for the expanding known universe).This corruption thing can only lead us to self destruct as a nation. And the longer we keep tolerating it, the more difficult it will be for any one else to tame it in future. I would have expected our good friend to argue that M7 waited too long to start the fight. I really do not know – for in my heart of hearts, I think M9 himself understands this pretty well.

    Have a 2019 much better than any of the years gone by.

    • To understand how dangerous and what corruption can do, imagine this scenario: In India, a convicted murderer on death row can stand for parliament and campaign, then win and get the judiciary to retry his case……and of course due to the inertia and pressure of his handlers, no judge will risk his life ( we all have one judges and their loved ones included) to oppose, dissent or reaffirm the (previous) sentence.I heard of this from none other than Mwenda himself.
      Much nearer home, I saw corruption first hand in 1978 in Kenya. An army Captain (Judy Angaine) who was also a daughter to a very powerful cabinet minister Jackson Angaine who was a live-in partner of one Major Kisila, was found dead in her bathtub. Paul Ngei ( a very very very powerful cabinet minister) was prime suspect but the powers-that-were, then as now, zeroed on a softer target major Kisila and roped him in. A white judge (Hancox) acquitted him because circumstantial evidence showed he couldn’t have been the strangler. To-date, the case is still open…… but when they failed to catch the real killer (who the ‘public court’ had condemned as the obvious) was untouchable, mischief-makers concluded that legally Captain Judy is not yet dead. I iluustrate this to show that corruption harms even the powerful and is enemy to all of us including the corrupt and its upholders no matter how highly placed. In this case impunity cause an irreversible to the seemingly ‘almighty’ who sadly could not avenge, let alone resurrect his beloved daughter who was murdered for no known motive other than vanity. Every right-thinking mortal must condemn it. Its consequences are not selective. Look at climate change caused by deforestation and other practices of giving free hand to ‘investors’ to play with wet-lands. It can wipe out livestock including those of the VVVVIP.

      • Dear sir
        I can assure you you won’t reason with the mwenda camp and convince them.
        Mr mwenda is stooping so low to use pseudo intellectualism to mask evil ideas.
        Mwenda likes to point out to his critics, i will also say he would be worse than Mr Museveni.
        Corruption is a cancer. The terms of trade he talks can indeed o ly be improved by a robust tax policy and economic planning which are almost, almost mutually exclusive with corruption

  6. Comrades your submissions are just re enforcing the fact that corruption is morally repugnant. The only downside is that you have missed out the point of venture capital. Mwenda correctly argues that like in venture capital, it will take one corrupt government official out of the ten, to efficiently deploy his loot .Its this effectively deployed dirty money that will spur economic growth.In the end the other nine corrupt officials might only benefit their immediate families. It’s the tenth corrupt guy who will have added value to the dirty money when it creates more wealth for thief and those people that will be employed in his firm. And incase the firm in question manages to export it’s products, then our B. O. P ‘s as a nation improve. Unfortunately most of these corrupt officials lack that business acumen. Therefore Uganda might not be lucky enough to get that tenth corrupt government official to effectively deploy his booty.
    Happy new year to you all.

    • Dr. Eng. Kant Ateenyi

      Great observation – comrade Chandia.

      Actually some of us did not miss that point you raise. I had restrained myself not to mention this – but your sharpness now forces me to give a slightly more intense critique on our friend’s submission. You simply have put it much more succinctly in your submission. I had wanted to argue that the problem with our brother/friend M9’s assertion is that he takes published statistical data and simply applies that to our situation. The 10% he quotes is simply an average from research in better to do societies and economies. Even there, you could be wide off the mark – and next to insane, if you said “let me start a business and expect that 10% of the chances are that I will succeed”.
      Our situation is totally different. The basics of entrepreneurship success, particularly in the kind of business our friend talks about are almost lacking (and I just presented some award – winning work on that, in Hong Kong recently: it is being published ‘open access’ by one of the Elsevier journals). That 10% of his could easily be anywhere between 0.5 and 1% for our situation! This is why you have Africa backward. Does this mean we do not have entrepreneurs? No – only small time ones in areas that cannot transform society the way M9 projects!
      Enjoy your new year brother – and thanks for that probe.

    • Look, sir the venture capital excuse is lame! We have all lived in this country and heard of the billions that have been swindled. We have not heard of a single industry or factory that has a raised out of the billions.
      Venrture capital is created not stolen. And we don’t have to let tolerate every bad thing because mwenda thinks some foreign peoples are doing it.
      We can forge out our own clean way like his pet could try, Rwanda!

      • ejakait engoraton

        APUULI , as you rightly say, and as I have said on occasions before, anything can be justified just as anything can be criticized and in either case you will have those who are in support and those who are against.

        More so where one has a vested interest. They will find all kinds of reasons to justify their argument, no matter how absurd. M9 has the added advantage of having a mouthpiece by way of his newspaper to spew all kinds of rubbish to justify his arguments.

        AS for the argument of venture capital , I find this repugnant. It is like saying that thank GOD that if it turns out ones birth was a result of a brutal rape and the child turns out to be a genius of sorts, let us say our own M 7 who has saved the nation from all kinds of ills, or our own M 9 who writes wonderful articles, then brutal rape is a justified act, and we should neglect all the other 99 cases and glorify this one case.

        I call this SELECTIVE STUPIDITY. M 9 and some of you do not realize that a coin does not have one side, in fact I am sure most of you do not even realize that it does not have only two sides, it actually has three sides.

        Take the case of the money stolen that was meant for the hospital in KUMI. Make this MBARARA, FORT PORTAL or any other place. Suppose the stealing of this money had led to loss of services leading to the death of a one M 7 while in child birth, or a one M9 as a result of malaria, or a one refugee by the names of PAUL KAGAME. Or of what value is the theft of a road sign that leads to the death of my dear friend Mr BAGUMA.

        This is the side that the likes of M9 do not want to look at, let alone imagine in what I call selective stupidity.

        What the likes of M 9 and others are saying is that it is OK to starve 9 children to death in order to save one if and on the off chance that this one child will become a phenomenal success.

        TO M9, it is ok for his sister to leave Fort Portal and comes to the slums of Kampala and sell her flesh as long as she sends the money back to look after her parents and other siblings.

        THE END JUSTIFIES THE MEANS.END OF…….

        • Revive cooperatives should be the way. And compel everyone who wants to work to be a member of a cooperative…..all government contracts to be given to cooperatives, tenders to cooperatives, chinese road or dam builder….pass through a local cooperative etc…….. In that way, even the unemployed will get crumbs and droppings

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