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Ugandans capital ownership still in control of Western colonialists

Dr Suruma

DR EZRA SURUMA: No Ugandan can open a bank now

COMMENT | Dr. Ezra Suruma | One of the most blatant aims of new colonialism (neocolonialism) is to ensure that Africans are denied access and control of capital. The evidence is overwhelming.

It started in 1987 when the World Bank financed consultants to do “diagnostic “ studies of locally owned banks: Bank of Uganda, Uganda Development Bank, Cooperative Bank and Uganda Commercial Bank. The findings were that all these banks were poorly managed, insolvent and candidates for restructuring, closure and privatization.

The financial sector reform that ensued is discussed in my book: Advancing the Ugandan Economy, published by the Brookings Institution in 2014.

Following the recommendations of the diagnostic studies a far reaching financial sector reform followed.

How new BOU law was written

The law governing the Bank of Uganda was scrapped. A new one was written. The main change was to make the Bank of Uganda independent of the Ministry of finance in particular and of government in general.

That is why BOU can close domestic banks as if they are private property without bothering what parliament or any other branch of government thinks. They have successfully ensured that foreign banks ( read colonial banks) dominance grows and indigenous banks are harassed and closed.

This is a critical hypothesis which all patriotic Ugandans can study and accumulate the evidence to show that neocolonialism in the financial sector has increased. Everything possible has been done to deny Ugandans access to the ownership and control of capital.

This in turn has ensured that foreign investment is favored over domestic investment. Without capital Ugandans are destined to be laborers. Those who are not laborers will be unemployed beggars however educated they maybe. The rest will emigrate to the Middle East to work as slaves.

A Ugandan needs 25 billion to start a commercial bank

Secondly, The law governing the supervision of banks was also rewritten in 2004 so as to strengthen the powers of BOU in their supervision, making it impossible for Ugandans to start a bank by increasing the capital needed beyond their means.

You need 25 billion to start a commercial bank! Even those who had started earlier were made to sell to foreigners as the minimum capital required kept rising.

For example, Kigezi Bank of Commerce which we had started to help in developing Kigezi area struggled to remain open when the minimum capital required was increased from 2 billion to 5 billion.

We were forced to look for new investors both domestic and foreign. The domestic investors brought in very little. We were lucky to get some Asians from Kenya who came in and now owned 76 percent of the bank. Later on when we tried to get those shares back we were dragged into the Temangalo saga which our enemies were using to stop us from regaining control of the bank.

In the end it was closed anyway because the neocolonial masters and their agents are determined to stop Ugandans from owning and controlling capital.

Similarly, Uganda Commercial Bank was privatized because the colonialists could not bear to see Ugandans controlling such a strong bank with nearly half of all bank deposits in Uganda. At first they gave the excuse that it was insolvent. I gave up my position as Deputy Governor and went to UCB and restructured it. It became profitable. I was triumphant and told the World Bank that the UCB was now profitable so there was no need to privatize it.

The World Bank delegation remarked casually, to me, that “now it will fetch a better price.” That is when I realized that “insolvency “ that is, lack of profitability, was just an excuse to take the bank from us.

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8 comments

  1. It is possible the death of indigenous banks in Uganda was actually welcomed and aided by the country’s leadership which is fearful of economically empowered Ugandans. Our leaders are agents of foreign imperialism. A government working for the betterment of life for its people would not have allowed the closure of indigenous banks with such amazing ease and speed.

    Nigeria has 27 banks and only 3 are foreign owned. The top ten banks are Nigerian owned and some have branches in other parts of the world including Uganda for example United Bank for Africa, Guaranty Trust Bank, Zenith Bank and Ecobank. Foreign banks cannot own more than 10% of local banks in Nigeria as per the central bank regulations.

    The top 10 banks which have a combined value of US$104 Billion in assets are: Polaris Bank, Fidelity Bank, Union Bank of Nigeria, Access Bank Nigeria PLC, United Bank for Africa (UBA), Zenith Bank Nigeria, Ecobank Nigeria, First Bank of Nigeria, Keystone Bank Limited and Guaranty Trust Bank.

  2. No time for lamenting. It’s time for action.
    The way forward;
    1. Further capitalization of UDB
    2. Capitalize Wazalendo and turn it into a bank
    3. Scale down on the number foreign advisors at BoU
    3. Rewrite our political economic model based on a national agenda and reskill our economists, lawyers, and journalists
    4.Etc, etc

    • Recapitalizing UDB will be throwing away good money as UDB suffers from biased lending to friends, relatives, politicians, nrm power brokers ,tenderprenuers etc.

      Instead government should put that money for recapitalizing UDB in Centenary bank – ( it’s Ugandan owned and has a pre-existing network of branches and banking agents and has experience of running the youth livehood funds whatever the challenges of youth livelihood funds)- and require that centenary lend those funds at less than 6% per annum + 4% management fees to sectors like construction, farming, etc that are 100% Ugandan owned business (the lending must exclude pseudo-Ugandans like those Asian migrants illegally holding Ugandan Nation IDs).

      Also Government of Uganda should lower the threshold to benefit from investment incentives for genuine Ugandan citizens(excluding the Asian migrants holding Ugandan national IDs) . The threshold for 10year tax holidays, tax free imports for equipment etc should be US $10,000 investment for genuine Ugandan citizens.

    • Indeed stop politisizing our economy

  3. Many of our economists, lawyers, journalists, political elites etc are mentally colonised. Govt should have a deliberate effort to emancipate its citizens ideologically.
    That is the only way we as Ugandans and Africans can liberate ourselves from foreign influence and from our colonised ourselves.

    The duty of engineers is to build our economy. We must task them to do that. There is no other way of looking at it.
    ENGINEERS MUST BUILD THE ECONOMY. PERIOD.

  4. Why always blame others for your shortcomings!
    The statement below shows that you can get what you want.
    “The President of Uganda resisted successfully pressure from the IMF to sell Uganda Development Bank.”
    I do not see a government like Rwanda giving excuses for failiure!

  5. But you can’t neglect the problems these local banks had, especially the political intervention and corruption. Just recently UDB accounts were qualified by the auditors.

    Seeing the rampant and shameless corruption in the current government and its parastatals, why should one think that is would have been different in UCB or others.

    The bar should be set high such that the local banks that get through are proud to have earned it, rather than set to low and the tax payer would subsidising the incompetencies. In 2008 we saw that even the best of FIs can fail with a week regulatory system, how about in Uganda.

    We have seen BOU crack hard on even foreign banks as well, requiring several to raise more capital and closing at least one.

    There is definitely a case to be made for increasing accessibility and affordability of credit to local businesses, but lowering bar for local banks or FIs isn’t the solution.

  6. The author forgot one thing-to NAME the FAMILY behind this takeover and they are the House of Rothschild, who are also the founders of ISRAEL, who have done this with every Western country,even and especially the Bank of England and the Federal Reserve in the U.S.

    “Know Thy ENEMY”

    Look to your Constitution and COMMON LAW for the SOLUTION, because your Constitution is BASED on COMMON LAW and what has been done to Uganda is Legal, by STATUTORY “law” but UNLAWFUL by Common Law

    I am not Ugandan although my son and wife are and I wish you the best in overthrowing the STRANGLEHOLD grip which the House of Rothschild has on you, because it also affects your Government, negatively.

    I’m Irish,by the way and I use a Pseudonym, for anonymity because I am very involved in Political Activism

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