LUKWAGO’S ORDEAL AS ONE STEP FOR DEMOCRACY

At the beginning of last week, Erias Lukwago lost his seat as the Lord Mayor of Kampala following his impeachment by the city council.

This was the culmination of two and a half years of uneasy peace at city hall during which time Lukwago protested the ceremonial role allowed him according to a new law, which created the Kampala Capital City Authority (KCCA). Under the new law the everyday running of the city was turned over to the KCCA executive director. Jennifer Musisi is the KCCA boss.

The drama inside and outside the council hall will probably be the highlight of the day’s proceedings but what was lost on many people is that the institutions of democracy and governance – the courts, the police, the council, were once again tested. Whether they passed the test only time will tell, the benefits are that whatever happened, happened and will inform processes going into the future.

We may have wondered at minster of the presidency Frank Tumwebaze’s timing of the impeachment process. Our jaws hit the floor at the kamikaze jump of councillor Alan Sewanyana over his colleagues to get to the centre of the hall in the heat of proceedings. We were left aghast at how Lukwago’s lawyer Abdallah Kiwanuka was stripped to within an inch of his underwear and bundled unceremoniously onto a police pick up. We may have been silenced by the near unanimous decision to eject Lukwago 29-to3 with two abstentions and the question of the interim injunction by the high court stopping the impeachment vote lingers.

Lukwago has 21 days from Monday to appeal the decision in the high court.

The government’s critics lament the high handedness of its agents, the perceived sneakiness of the impeachment process and are quick to prophesy doom for this nation in the future as long as the NRM stays in power.

The Government’s supporters on the other hand may go around with smug smiles, engage in congratulatory back slapping and toast to the apparent vanquishing of one of the opposition’s leading lights. 

In the zero sum game that is politics, these reactions are unsurprising.

For the rest of us mere mortals it is within our rights to take one side or the other, however if we are to take a step back and look dispassionately at the events that led up to Monday’s circus, we may see a silver lining on this dark cloud.

Democracy cannot be written or copy-and-pasted or imposed on one people or another. The basic freedoms that form the principles of democracy may remain constant but the institutions that underpin the observance of these develop according to the context in which they are situated. So whereas the US and Canada, bordering states, are democracies they are not identical. Similarly France and Germany. Or Sweden and Denmark.

The differences come from their own unique evolutionary political paths, driven by the interaction between various political forces, at varying times and with varying ferocity.

Seen against this light, the events leading up to and surrounding Monday’s events are but a single step in the long march to democracy.

The process can be helped along by Lukwago and his team appealing the process and laying his fate at the feet of the high court and by the government participating in the process, allowing its actions to be examined.

Like it or not a process was set in motion at independence, the turbulent 70s and 80s while not the best of times, have served to colour our view of the democracy we want. So too do events unfolding before our eyes. 

Human nature is such that all progress only comes from resolution of disagreements or contradictions. Politicians who are in the business of acquiring power and holding on to it, never relinquish their advantage out of the goodness of their hearts but often through compulsion.

There will be more muscle flexing in future and that is as it should be. We may see movement towards or away from greater democracy but in the greater scheme of things, if it is any consolation to the battered bodies and bruised egos of the  contesting politicians, it’s all for the greater good.

LET US NOT BE CONFUSED ABOUT THE WAY FORWARD

The resuscitation of Uganda Airlines, the bailing out of this or the other businessman and the return of government into the business-owning fold are but a few symptoms of growing movement supposedly to address the issue of rising unemployment.

The proponents of this argument point to south-east Asia’s tigers and more recently across the border to Rwanda as an example of how state intervention works. 

The inefficiency of government owned companies across the board measured by profitability (or lack of thereof), their inability to innovate or even create jobs, is well documented.

This has a spill over into the economy’s ability to grow and up lift the welfare of its people. 

Government owned businesses are often favoured, squelching competition and the attendant benefits that come with a vibrant sector.

Thankfully in Uganda we have numerous examples of the companies, which were government parastatals, which have not only increased production, widened the variety of products, grown their workforces exponentially and pay us much more taxes than we were led to believe was possible previously.

One may argue that these companies many of which are foreign owned have some drawbacks when it comes to expatriation of profits and half-hearted long term investments, but that they were sold off due to our own weakness not because they were thriving businesses.

It is absolutely essential that we have a strong entrepreneurial class, if only because the investment decisions of local players can be more long term, take into consideration other issues that are not of a purely economic nature and also because the local investor is the best advert for Foreign Direct Investment (FDI).

Government has a role to play in building this indigenous business class but government re-entering the business fray is not the way to do it. 

Listening to our businessmen both local and foreign, their frustrations with government can be listed as, in no particular order; archaic, disjointed, disenabling policies and regulations, indifferent execution of these policies, a lack of long term strategy for the private sector and a lack of commitment to plugging in gaps that would improve the business environment. 

If these can be fixed the business community is convinced that such incidentals as access to affordable finance would be addressed as a matter of course.

The businessmen actually don’t want government back in business. 

Then who is screaming for government to jump back into the frying pan? It’s not the consumers – who have little faith in government’s ability to deliver service. It’s not the technocrats – who are struggling to meet ever expanding needs without adding a few other fiscal black holes.

So who is calling for government to be more involved in the private sector?

The people calling for government to jump back in are those who are failing to get employed in a competitive private sector, who need other criteria other than merit to get jobs. The people who are calling for government to jump back in are those businessmen who have failed to compete, mismanaged loans or just want free money. The people who are calling for government to jump back belong to the forgotten phenomenon of “air suppliers”, who again can’t supply to private companies but in government see a bottomless pit of free money.

Government does not need to be in business, but government has a responsibility to create an environment in which businesses can thrive.

Government’s role would be in charting out business enabling strategies and policies, providing public goods like security, infrastructure and basic social services, bankrolling research and development among others. 

The country will get a greater return on investment if government concentrated its billions on these areas rather than squandering it on say, trying to re-establish Uganda Airlines.

By the way the proponents of FUBA (Force Uganda Airlines Back Again) have never explained what benefits to the country a government owned airline will bring that is not already being provided by the 19 airlines that fly in and out of the country today.

UGANDANS ARE RICH BUT CASH POOR

The recently released Uganda National Household Survey 2012/2013 showed that Ugandans living in poverty has continued to fall but the income inequalities are rising.

The survey showed that proportion of people living in poverty, or on less than a dollar a day, had fallen to 22% from 24.5% in 2009/10. Nearly a decade ago the same measure stood at 31.1%.

However the income inequality as measured by the Gini coefficient rose to 0.43 in 2012/2013 compared to 0.426 in 2009/2010.

The devil is in the detail but these contrasting developments  on one hand are consistent with the continued growth of the economy but on the other hand point to a disproportionate benefit from this growth by certain segments of society over the others...

It is not difficult to see why this is so. 

According to official statistics our economic growth over the years has been driven mainly by telecommunications, finance and transport services and construction.

But the national survey reports that the proportion of the population engaged in these sectors is about 12%. The bulk of our workforce 73% are in agriculture, forestry and fishing. Even manufacturing, which is more labour intensive only accounts for 6% of the workforce.

Meanwhile the growth in the economic output in the agricultural sector has been consistently under five percent for the last decade or so.

It is true of course that growth in the services sector aids agriculture but clearly something else needs to be done to see the agricultural community benefit more from its sweat.

Clearly there is a question of productivity. A classic 80/20 situation with the majority of Ugandans generating much less than the other three tenths of the population. 

It is not for lack of land. It is not for lack of labour.  The answer maybe in a shortage of capital but more importantly entrepreneurship – the ability to take advantage of opportunities to generate profit.

The survey suggests as much.  

The household survey shows that the 78% of all houses in Uganda are owned by their occupants and this has been more or less consistent in past surveys.

So how does one explain that more than seven in every ten Ugandans own a house but a significant proportion of them are existing on less than a dollar a day and a quarter of the working population is not gainfully employed?

"In his book The Mystery of Capital, Peruvian Economist Hernando de Soto suggests that the reason that capitalism – the manipulation of land, labour and capital in the quest for profit,  does not work in the third world like it does in more developed economies, is because of the ambiguity of or inadequacy of land rights...

All wealth is derived from the land he argues, making it the underlying asset of all assets. So if there are any doubts about the credibility of land ownership you will be building your economy on a shaky basis at best or not have a functioning economy – in the text book sense, at worst.

With proper titling of the land and verifiable property rights land assumes a value recognised by businessmen and financial institutions allowing its value to be unlocked. So if a land owner can prove ownership he can sell his land for its market value or mortgage it to finance the development of his land or other income generating activities.

If we agree with De Soto this has to be at the heart of Uganda’s poverty equation. The National Household Survey reports there are seven million households or about six million households can lay claim to their homes and the land on which they seat.

But recently the land’s ministry said that about half a million land titles had been issued and this includes titles on which factories, office buildings and stadiums seat. It will not be a stretch of imagination to assume five million of these owners have questionable claims to their land and can therefore not unlock the full potential.

So it’s true not true that Ugandans are poor, in fact they are asset rich – going by their land holdings, but cash poor.

"This government has worked out how to generate growth -- the economy has grown higher than five percent in all but one of the last ten years, peaking at 11% in 2006, according to official numbers. What we seem to be struggling with is how to distribute this wealth more equitably...

The usual suspects, corruption, poor health and education services and lack of market access can be blamed for our poverty but this scandalous inability to unlock the full value of our land has to be major drawback.