BESIGYE EXIT POINTS TO POLITICAL SHIFT

Weekend reports that Kiiza Besigye is stepping down from the helm of FDC will predictably weaken the party in the short run as they adopt to changing political priorities.

Besigye, who in the last ten years has come through as the most credible challenger to President Yoweri Museveni, it was reported was taking the action to give his successor sufficient time to plant roots ahead of the 2016 elections.

However according to the FDC constitution the party’s leader need not be its flag bearer in a presidential election, so one cannot count out a fourth bid at the presidency for Besigye.

But the alternative, that the pugnacious doctor from Rukungiri has thrown in the towel and moved on, makes for more interesting speculation.

Speculation has already turned to who will replace Besigye as the de facto leader of the opposition. The usual suspects have already come up for mention; the genial Major General Mugisha Muntu, the reinvigorated Nandala Mafabi and even a few dark horses like the irrepressible Salamu Musumba have enjoyed a passing mention.

"The major pitfall for the opposition can be found in the constitution or more specifically in the way we carry out elections in this country...

Unlike in the UK but like in the US, our presidents are elected directly. In the UK the electorate votes for the party and its leader becomes prime minister. This system as has been shown in the US, means that the electorate is wont to vote for personalities over policy, and therefore likable, well known personalities are likely to be successful as opposed to technocratic, doers with wooden personalities.

This is an important distinction that should not be overlooked.

When asked at the end of her husband’s term in office why a woman has never been US president while UK has already had a female prime minster, Hillary Clinton said in the UK a woman can propel herself to the top of her party and during election time the party machinery will ensure she is elected while in the US presidential candidates – while helped by the party, find that they are running more on personal merit.

Over the last 25 years no one comes closer to near universal face recognition in this country than Museveni and that gives him a few yards over his challengers in any electoral campaign.

"So by bowing out, Besigye has with one hand given a chance for renewal while with the other taking away arguably, the only other politician with a national profile...

In the run up to the last election some members of his FDC party grumbled that Besigye was so seduced by the possibility of making it to state house as leader of a badly cobbled opposition alliance, he paid little heed to building his own party structures.

The dissenters argued even then, that a win was impossible because there was no impetus behind his race from the party, beyond the feel good anticipation of an opposition alliance. The rest as they say is history.

But there too lies another problem. In building parties around personalities, the party structures – if there are any, are subjugated to the leading personality of the day to the detriment of long term sustainability of the party.

As a result we can expect to see infighting in the FDC as the contenders jostle for power without credible party structures to moderate tempers and mediate between contending factions.

"The Honourable Ronald Reagan Okumu fired the first salvo, declaring shortly after the polls, that no “westerner” will succeed Besigye as the leader of the FDC. This ourtburst was triggered by the frustration felt by a fringe element in the FDC who felt that Besigye, a “westerner” was in the way of their plans of ethnicising the last campaigns, which they felt was their best hope of a smash-and-grab victory against Museveni...

One can expect ethnic undertones will continue to colour the debate in FDC for some time to come.

But that could be a mistake if the last election were anything to go by.

Observers were convinced ahead of the last election that with the northern war over for all practical purposes, the main issue will be Museveni’s record and more specifically his government’s perceived tolerance of corruption.

However the opposition were caught flatfooted when the Museveni team made the campaign about the future, read the youth and less about the past – textbook tactics for a running incumbent.

Besigye recognized this probably a bit too late, as evidenced by his championing of the walk-to-work demonstrations earlier this year.

Barring any accidents expect subsequent elections in this country to be about cross cutting issues, namely the economy and less and less about tribe or religion.

"So if Besigye’s exit sharpens ethnic lines within the party, expect that FDC and the leader who will emerge to be less of a threat to the NRM in 2016...

2011: THE PERFECT ECONOMIC STORM

According to the statistics the year started on a rather benign note.

Inflation in December last year was 3.1%, the more than doubling of the rate from November’s 1.4% could explained away easily as due to the festive season. Petrol was selling for less than sh3,000 a liter and unsecured lending rates were just about 20%. Foreign exchange reserves stood at 5.2 months of imports.

Fast forward to today. Inflation in November slipped to 29% from a record high 30.4% in the previous month. Petrol is on the verge of touching sh4000 a liter at the pump and lending rates are now up to more than 30%. Foreign reserves have plummeted to 3.7 months of imports in October. To put that in perspective we shed about $500m or sh1.5trillion in reserves between December and October this year.

The more reserves a country holds the better a government can cope by battling inflation and stabilizing prices and smoothing out currency fluctuations, both of which if left unchecked can sink economies.

We might have to go back ten years or more to find a time when our reserves were less than four months of the imported goods and services.

But for the man on the street he did not need official statistics to tell him something was badly wrong.

"When sugar became scarce for the first time in more than 20 years, alarm bells went off. Sugar scarcity is a throwback to a time an older generation would rather forget and an inconceivable occurrence for a younger generation. As a symbol of things gone bad, few things beat sugar shortages in this country...

It is safe to say that no one saw this coming, and for good reason.

A perfect storm is used to describe the coincidence of adverse events to make an already bad situation worse.

Regional drought and famine that stressed local food stocks, an election year, with its attendant fiscal loosening, a deepening Euro crisis, which caused a dollar appreciation, dampened demand in our traditional export markets, reduced foreign direct investment and remittances from Ugandans abroad, all conspired to create our perfect storm.

Uganda’s predominantly subsistence agriculture sector has failed to respond adequately to growing regional demand. This was made worse by failed harvests in the Kenyan rift valley due to drought in the early part of the year. This was important because not only did we start feeding western Kenya but food demand, which was previously covered by our eastern neighbor, from Southern Sudan shifted to Uganda.

When food prices, which constitute the biggest single component of how we calculate inflation, rise general prices follow suit.

According to official statistics the food price increases peaked in March before beginning to slide starting in May.

The presidential and parliamentary campaigns not only served to cause more money to come into circulation but also caused some uncertainty, which held back inflows as investors adopted a-wait-and-see attitude – a now traditional occurrence ahead of the last three elections.

Diminished hard currency inflows put the shilling under pressure forcing import costs higher, most especially for fuel. Fuel prices are an important component of all product prices on our shelves or services we consume.

In a related incident the Euro crisis seemed to come to a climax this year with real fears that the Eurozone was likely to break up and the short lived Euro currency in its final days.

The crisis which has its roots in the global financial crisis that kicked off in 2008 saw the weaker European states – Portugal, Ireland, Greece, Spain and more recently Italy straining the Eurozone’s resolve to remain afloat. Massive bailouts of Greece, Portugal and Italy have cause uncertainty which has served to further strengthen the dollar.

It has been reported that as a result of our remittances have never recovered to the pre-global financial crisis $1b as our relatives in the diaspora tighten their belts in anticipation of tougher times.

All this also fed into our power situation with government being forced to make the choice between the discomfort of loadshedding or paying out billions of shillings to subsidise the expensive thermal power generators. The lifesaving hydroelectric power expected from the Bujagali power dam missed deadline after deadline and is now expected to come on line by the end of April next year.

But finance officials believe we have got over the worst part and barring any other shocks inflation should return to single digits next year, while the exchange rates have already begun to slide following determined and consistent action from the central bank all year long.

As we wind up the year there is evidence that export earnings are picking up, with export figures for September up more than 50% from the same month last year.

"The main lesson from 2011 seems to be that we need to shore up out food production. The reality is that as the East African Community takes hold and the continued free moment of goods and services gets entrenched we will not be producing for our own consumption any more. This will require a reorientation of our farming methods and a determined push into agro-industry...

With the Eurozone crisis far from resolved, the ever unpredictable weather patterns it would be full hardy to make any predictions going into 2012.