Tag Archives: President Museveni

Uganda – President Museveni and the politics of quick-fix taxation

At the end of May, Uganda’s Parliament passed the equivalent of a political bombshell. The Excise Duty Amendment Act (2018), to which the President quickly assented, introduced a range of new tax measures, including a one percent duty on mobile money transactions and a daily Ush200 ($0.05) “Over the Top” tax on the use of social media. The popular reaction to these new measures was swift. It started with an explosion of online criticism—on Uganda’s vibrant social media, no less—before taking physical form in the streets.

The vehemence of this response, and the government’s subsequent scramble to “clarify” its position, begs the question, why did President Museveni back such a predictably controversial tax reform? And how do we account for the influence—as well as the apparent limitations—of the subsequent pushback?

The political benefits of balancing the books… by taxing the poor

Uganda has an urgent need to generate more revenue. It lags its East African neighbours, collecting taxes equivalent to only 14 of GDP relative to Kenya’s 18 percent and Rwanda’s 16. At the same time, expenditure continues to outstrip revenue generation, driving the government to borrow more. Although sustainable for now, Uganda’s debts are rapidly accumulating while its interest rate payments to local and external creditors are expected to exceed 12 percent of the total budget this financial year.

The social media and mobile money taxes have the advantage of being relatively easy to administer, and government initially estimated that they would generate revenue worth Ush284bn ($75.9m) and Us115bn ($30.7m) respectively over the coming year, contributing to a budget pegged at Shs32.7tr ($8.7bn). President Museveni has also repeatedly derided social media, declaring that the new taxes could help reduce “gossip”.

Yet aside these benefits, real or imagined, the two new taxes come with clear downsides. First, government critics stress that these taxes are sharply regressive, hitting the poor hardest. The tax on social media use specifically has the further potential to limit access to information. Meanwhile, the tax on mobile money will likely reduce financial inclusion. It is recorded that 23.6m Ugandans use mobile money services—sending and receiving money via their phones—and that 61 percent of these transactions are below Ush45,000 ($12). There is also the very real risk that the mobile money tax will prove self-defeating, reducing the volume of transactions and harming growth—not to mention exacerbating existing inequalities.

There are notable alternatives to the two controversial taxes, which the Ugandan Government could consider. For instance, in its most recent “Uganda Economic Update”, the World Bank details a range of options for raising domestic revenues, recommending in particular a reduction in tax exemptions, estimated to equal between 4.5 and 5 percent of GDP in 2016/17. These exemptions are generally awarded to larger businesses and foreign investors, further accentuating the overall regressive nature of Uganda’s tax regime.

Another related concern is the nature of government expenditure. Excessive spending—notably on Defence, the Office of the President and other non-developmental areas—adds to the overall strain on the budget, and thus to the need for additional revenue. It has not helped that the controversy over the new tax measures coincided with Museveni’s promise that individual MPs will be guarded by military snipers and provided with escort cars to ensure their security. If implemented, this plan would quickly cancel out any contribution the social media and mobile money taxes could make towards balancing the budget.

So why is it that the government insists on widely unpopular, regressive taxes instead of ensuring a more efficient and equitable tax regime? The official justification for exemptions—one that until recently the IFIs themselves endorsed—is that they encourage investment, which then bolsters growth. But analysts of Uganda’s political economy have long stressed the additional, political imperative prompting Museveni’s government to adopt a more discretionary tax policy. Indeed, exemptions are a form of political favour granted to leading economic actors, who then reciprocate through their political loyalty and financial backing of the regime. Similarly, excessive spending on certain, seemingly non-priority sectors is another way for President Museveni to distribute patronage, including to ensure the support of ruling party MPs.

Even with these seemingly skewed political incentives, though, Museveni does have to worry about the broader legitimacy of his government. And following the widespread condemnation of the recent tax reforms, the President blinked. His response suggests the potential influence—but also the limitations—of popular pressure on government decision-making.

The popular backlash, and its significance

Opposition to the social media and mobile money taxes has united a broad coalition, if one most visible around Kampala. Activists, journalists, politicians, comedians, musicians and other social media users took to Twitter with a variety of hastags: #ThisTaxMustGo, #Mobilemoneytax, #SocialMediaTax. This helped kindle the debate surrounding the new measures, which played out across Uganda’s print and broadcast media. It also helped mobilise support for a march through Kampala, called by the fast-rising musician-turned-opposition leader, Bobi Wine. But while a widely known broadcast journalist linked arms with Bobi Wine to protest, the demonstration also drew in large crowds of market vendors and motorcycle taxi drivers, who faced off against armed riot police.

Following the protest, and with a court case pending and an online petition quickly gaining signatures, Museveni changed his tune. Seemingly making up policy on the hoof, he claimed that the one percent tax rate on mobile money “came up by mistake” and that he “signed the law with the error because we could not delay the other measures.” While Museveni refused to change the social media tax nor to scrap the tax on mobile money, he did indicate that the latter would be reduced from one to 0.5 percent.

The government went on to table an amended Excise Duty Bill on 19 July, less than two months after the first was enacted. Activists have vowed to push for further concessions as the legislation moves through parliament. Meanwhile, the Leader of the Opposition, Winnie Kiiza, called for more popular protest against the disputed taxes, noting that without this outside pressure the parliamentary opposition alone was helpless.

Popular protest is not the only factor underlying the government’s partial climb-down. It appears the Cabinet was divided about the mobile money tax rate to begin with, and that government initially underestimated the revenue they could generate through the tax. Yet it is striking that Museveni only mentioned the 0.5 percent rate after the Kampala protests, and with the prospect of further protests looming. This timing, when considered alongside the government’s contradictory and rapidly evolving official position, leaves little doubt that popular protest has prompted the concessions to date, whatever the government may claim to the contrary.

It remains to be seen, though, whether activists can successfully pressure parliament to further amend the new Excise Duty Bill. For that, they will have to win over a large portion of ruling party MPs of whom only a handful have come out openly against the controversial taxes. That said, MPs have also been loath to voice their support for the measures, preferring instead quietly to vote in favour or else de facto to abstain through their absence from the House. Speaker Kadaga, meanwhile, entrusted her Deputy to oversee the vote when the Excise Duty Bill was first passed in May. She tends to delegate in this way when there is controversial and generally unsavoury business to handle.

Although the NRM parliamentary caucus continues to back the President, it may still be possible for popular pressure to open up divisions within the ruling party and, by leveraging those divisions, to win further concessions through parliament. This has happened in the past, notably regarding controversies over health and education spending as well as previous unpopular tax proposals. Such a positive outcome may seem unlikely in this instance, but the previous successes—however partial—show that there is still space to push for more progressive outcomes, even in the context of Museveni’s increasingly authoritarian regime.

Uganda – On Presidents, policing and power

On 4 March, Uganda’s President Museveni made the surprise announcement that he was firing both his Inspector General Police (IGP), Gen. Kale Kayihura, and his Security Minister, Lt Gen. Henry Tumukunde. This came after months of infighting between the two men and their respective agencies, the Uganda Police Force (UPF) and the Internal Security Organization (ISO).

Despite initially dominating headlines, the two-man feud is not the sole reason—or perhaps even a particularly significant reason—for the shake-up. Other factors include the police’s increasing involvement with criminal organisations, public frustration with police incompetence, and perhaps most significant, Museveni’s apparent misgivings about Kayihura’s loyalty.

None of these concerns, even the last, can be remedied through a simple reshuffle. They thus invite further reflection, particularly regarding President Museveni’s past management of security in Uganda, the growing partisanship and impunity of the police force, and what new security strategy Museveni may now adopt.

The rise and decline of the Uganda’s police  

Professionalism in the Ugandan police declined as it became more of a partisan fighting force, a transformation that former IGP Kayihura largely oversaw.

Veteran journalist Charles Onyango-Obbo gives a particularly trenchant analysis of this process, although other observers also offer useful summaries.

In brief, the Ugandan Police Force first underwent a process of professionalization through the 1990s and into the early 2000s. The two IGPs during this period were both career police officers and succeeded in turning the Force from “a mess” into a “boring place”, run in as “technocratic” a manner as it has ever been.

Some analysts contest this reading, noting that the Force, even in the 1990s, was not without controversy. But this initial period of institutional consolidation and professionalization certainly contrasts with what followed.

The first key change came in 2001 with the transition to IGP Wamala who, rather than a professional police officer, was a military man. But it was Kayihura’s accession to the IGP position in 2005 that marked the real watershed. Under his leadership, the Force became increasingly politicized internally and more overtly partisan in its actual policing.

The reasons for the change were multiple. They included Museveni’s frustration with a police force know for voting “badly”.

But the change in policing came alongside a more fundamental shift in the NRM’s overall security strategy.

As Onyango-Obbo argues, by the early 2000s, Museveni was increasingly keen to distance the military from overt partisan activities, easing its metamorphosis into a seemingly more professional force worthy of taking a lead in regional peace-keeping efforts.

This withdrawal of the military left the police to handle partisan issues at home, and this even as the political threat posed by the opposition grew.

This threat, along with Museveni’s personal trust in Kayihura, helps explain why the annual budget for the police exploded under his watch, going from Shs58b (£11.2m) to Shs600b (£115.5m).

Flush with cash, the Police spent some of it on new equipment, thus becoming increasingly militarised. This trend only grew more pronounced following the unprecedented 2011 “walk to work” protests, which Kayihura was instrumental in suppressing.

Ahead of the 2016 elections, Kayihura invested in a new initiative, the build-up of the so-called “crime preventers”, a community policing force that supposedly numbers 12m (but undoubtedly far less). Made up of young, largely untrained recruits, the “crime preventers” have been used in partisan policing efforts, often more as a threat.

Where to from here?

With the transfer to a new IGP, Okola Ochola, some observers are hoping for reform in the police.

Ochola is the first career policeman to serve as IGP since 2001, and his early actions do appear aimed at restoring a degree of professionalism.

Only a few weeks in the job and Ochola has already redeployed seven officers, most of whom were previously deployed to the IGP’s office “as a punishment” due to Kayihura’s distrust of them.

He has also indicated his distaste for the “crime preventers” and declared that he will weed out police officers deemed unfit. These will presumably include many of the younger recruits Kayihura brought in to serve as his loyal base whilst undercutting older, more experienced officers.

Much more needs to be done, of course, to bring about a change in the Police. Some also doubt that this change is likely to occur.

They point, in particular, to Ochola’s new deputy, Brigadier Sabiiti Muzeyi, who they suggest could scupper reform efforts. Muzeyi previously commanded the Military Police and his rapid rise within the UPDF was aided by Museveni’s son, Gen. Muhoozi.

But even if Ochola were to professionalise the police, this would raise fresh questions. Would a more professional force retreat from partisan policing? If it did, who would take over the partisan dirty work?

While it is far too early to say, a more professional police under Ochola could make for a more overtly partisan military, reversing earlier efforts to limit the UPDF’s domestic political interventions.

Only this week, Museveni declared that the crime preventers will now serve under the military and that the new crime preventers team should meet the Chief of Defence Forces, Gen. Muhoozi.

Museveni went further, insisting that crime preventers was nothing new and had been part of the National Resistance Army going back to the 1980s.

Even as we contemplate the possibility of another shift in Museveni’s security strategy, one thing about which we can be sure is that security forces will continue to be used for partisan ends. The only change may be which kind of officer—military or police—holds the gun.

Uganda – President Museveni and the NRM slated to win in the coming elections, but at what cost?

Campaigns ahead of Uganda’s February 2016 general elections are heating up. The presidential race kicked off last month. President Yoweri Museveni of the ruling National Resistance Movement (NRM) is running against his long-time opponent, Kizza Besigye of the Forum for Democratic Change (FDC), as well as  his erstwhile close political ally and former Prime Minister, Amama Mbabazi, who is standing as an independent.  Nominations for parliamentary candidates closed yesterday with an expected 10,000 aspirants for just over 400 elected positions, or roughly 25 contenders for every seat.

With this array of candidates, the coming elections look to be the most heavily contested—and costly—ever witnessed under President Museveni’s 30-year-old regime. Bookmakers have Museveni and the NRM down to win by a large margin. But even with a sound victory over the opposition, the expense of handling intra-party factionalism may make it a pyrrhic one. With Mbabazi’s decision to vie for the presidency, the amount of money needed to keep the NRM house in order has risen sharply. This elite rivalry has made an already existing situation much worse, and all but guarantees more financial and political trouble after the elections are done.

The ‘commercialization’ of politics in Uganda

Museveni’s and the NRM’s long stay in power has come with an ever bigger price tag. Elite cohesion at the highest levels has been purchased by allowing Uganda’s ‘aristocracy’ to take advantage of government positions to amass personal wealth. The regime has meanwhile maintained local support through a combination of patronage, public services and coercion. The creation of new districts, each with its promise of lucrative jobs and more sate resources, has proved a particularly expedient but expensive method of bolstering the NRM’s popularity.

Pressure to extend more patronage to local areas has steadily risen throughout Museveni’s rule. This is a result of competition between the NRM and the opposition parties but also of growing competition within the NRM itself. Around elections, this pressure reaches a fever pitch. After losing ground to Besigye in the 2006 polls, Museveni started touring the country a full two years before the 2011 election, distributing money and issuing presidential pledges along the way.

Pressure on MPs is also high. Ugandan legislators report spending more on routine constituency visits than their counterparts in 15 other African country surveyed, bar Nigeria.[1] This spending rises precipitously during election campaigns. For MPs from the ruling party—who make up over 70 percent of legislators in the current parliament—the hardest test is often not the general elections but the NRM party primaries. In 2010, the first time all NRM party members had the right to participate, the primaries were marred by allegations of extensive vote rigging, bribery and fraud. The party emerged bruised. Many NRM-leaning legislators entered parliament as independents after losing in the primaries while NRM MPs openly wondered what their party had done for them. The losers, either in the primaries or the general election, were left to stew, with many calling on Museveni for compensation.

Frustration with the 2011 elections and how they were handled by the party contributed to later divisions within the NRM parliamentary caucus. Faced with an unusually rebellious legislature, Museveni had to make an effort to subdue MPs, something he achieved notably through offering them bribes for votes or support to help them manage their debts.

Beyond the political challenge, the economic consequences of the 2011 elections were unprecedented in Uganda. Since the 1990s, the government has built up a reputation for its prudent macroeconomic management, reflected in overall low inflation levels. Yet after the 2011 polls inflation rates soared, fueled to a large extent by excess election spending. The Governor of the Bank of Uganda later admitted that he had been called on to essentially print money.

Mbabazi’s bid – more factionalism, more money

Amama Mbabazi, now Museveni’s presidential rival, is very much a member of the NRM political aristocracy. He previously served Museveni as Attorney General, Defense Minister and finally Prime Minister starting in 2011. He was also elected NRM Secretary General in 2009. Over the course of his stay in government, he built up a personal fortune. He was repeatedly listed in high profile corruption scandals, but always benefited from political cover. For a long time, many saw Mbabazi as Museveni’s heir apparent with the possibility of a succession in 2016.

But shortly after 2011, it became clear Museveni was still planning to run again. Moreover, he appeared to be positioning his son, wife or son-in-law to take over after him. This seeming desire to keep the presidency as a family business has stoked tensions among the NRM’s top elite. This frustration is particularly noticeable among certain long-serving members of the party’s Central Executive Committee (CEC). Observers have argued that corruption levels in Uganda are reaching unprecedented levels in part as a result of the growing challenge of keeping the NRM top brass in the Museveni camp.

And even so, that challenge has clearly not been met. Rumors that Mbabazi—tired of waiting—was planning to challenge Museveni spread around the end of 2013. Museveni dropped him as Prime Minister in September 2014 and shortly thereafter orchestrated an extraordinary NRM delegates’ conference to change the NRM constitution and effectively strip Mbabazi of his role as party Secretary General.

Both Museveni and Mbabazi spent lavishly in efforts to build their support throughout this period, and have continued to do so since, targeting various groups—and notably youth—with patronage. As the elections season got under way, the pressure on Museveni to buy off politicians willing to auction their support to the highest bidder has also grown. In May, for instance, a group of NRM parliamentary flagbearers who lost in the 2011 elections approached Museveni asking for help with their debts. Any candidate who loses a parliamentary election on the NRM ticket automatically becomes the party chairperson in their area, thereby potentially retaining considerable power to mobilize voters for or against a presidential candidate of their choosing.

Mbabazi has repeatedly offered financial support to both opposition and NRM MPs. The prospect of Mbabazi bankrolling their campaigns was among the primary reasons why opposition parties, briefly united as The Democratic Alliance (TDA), considered adopting him as their joint presidential candidates. Opposition MPs were reportedly particularly drawn by the prospect of his support. After the TDA dissolved and Mbabazi went on to stand as an independent, certain opposition parties including the DP stuck by him, again partially for financial reasons.

The NRM party primaries have offered a new set of opportunities for Mbabazi both to campaign and decampaign certain candidates. As was the case in 2010, this year’s primaries, completed last month, were heavily contested and fraught with allegations of foul play. At one stage, two top-ranking NRM leaders, both of whom had a long-standing personal antagonism with Mbabazi, accused him of fronting rival candidates in their constituencies. One then went on to lose the primary election in a major upset.

Throughout the primary process, the newly appointed NRM Secretary General claimed the party would not tolerate failed NRM aspirants running as independents. This threat quickly proved hollow, though. Shortly before the official nominations were due, over 60 incumbent MPs who lost their NRM primaries met with Mbabazi’s sister-in-law and were offered financial backing in exchange for supporting Mbabazi. Museveni then invited the 60 MPs to a separate meeting at State House, at which he declared the NRM would not decampaign them should they run as independents.

As was the case in 2011, this tolerance of independents is resented by official NRM flagbearers. It keeps the elections tight in many areas where it would otherwise be easy, and forces candidates to keep spending after already going through costly primaries. This outcome ultimately undermines the NRM’s ability to consolidate as a political party capable of encouraging cohesion or imposing discipline among its members; rather, the current set-up is more akin to a kind of ‘no-party’ system beset by costly intra-elite rivalry.

What happens next in an aging regime?

Mbabazi’s presidential bid is, to some extent, highly predictable.  Subduing elite political ambitions through patronage and a high tolerance for corruption—the Museveni strategy—has its limits. Similarly, in a ruling coalition already fraught with internal divisions, albeit lower down the hierarchy, it is not surprising that the top level jockeying between Museveni and Mbabazi is fuelling more demands for pay-outs from below. Yet as patronage spending soars, the dangers of further economic instability looms large. One only has to think back to 2011, and then multiply. Museveni may also face additional trouble from his parliamentary caucus, which at the very least, may find ways to extract more costly patronage in exchange for support.

Finally, increased violence is another clear possibility for when patronage becomes unsustainable, or no longer works. Museveni has been most careful to consolidate his support within the military and police force, and has also overseen the formation of new militias ahead of the election. Mbabazi and Besigye have repeatedly clashed with security trying to prevent them from traveling or holding rallies. The militias pose a different, in some ways more ominous threat. In past elections, especially 2001 and 2006, they were used to intimidate the opposition—as well as NRM members who’d fallen from grace.

While Museveni is still far and away the most likely winner of the coming elections that does not mean that Mbabazi’s challenge is insubstantial or that Museveni’s regime is strong; rather, as intra-party contestation intensifies, his ability to exert control comes at an ever higher price.

[1] These results are form a survey of 16 countries conducted by the African Legislatures Project.

President Museveni of Uganda moves to quell ruling party dissent

President Museveni’s refusal to stand down after almost thirty years in power has exacerbated tensions within the ruling National Resistance Movement (NRM). Aspiring political leaders are frustrated that their own ambitions are being blocked by Museveni’s determination to stand again in 2016. Having removed term-limits in 2005, the president has already gone on to serve ten more years that the previous constitution allowed. Now, President Museveni has moved to reconcile with some of the leaders that he previously alienated in a bid to maintain the unity of the NRM.

One of the more prominent leaders to let his disappointment be known in recent years is Amama Mbabazi, a long-serving NRM minister and the president’s former confidant. Despite appointing Mbabazi as his Prime Minister in 2011, Musveni became increasingly fearful that his former ally planned to challenge him for the presidency. In response, sacked Mbabazi in September 2014, denying him a public profile and access to state funds.

Recently, however, it has been reported that President Museveni has become increasingly worried that if Mbabazi decides to contest the election outside of the NRM it could split the ruling party, leaving Museveni more vulnerable to defeat. In early May, the president thus initiated a fresh dialogue designed to persuade the former prime minister to abandon his presidential ambitions. According to The Observer [Kampala] newspaper, Museveni has proposed a power-sharing model in which Mbabazi would be guaranteed the vice presidency and “a shot at the presidency in 2021, the year in which President Museveni has promised to retire.”

The proposals included a promise to change article 108 of the constitution to upgrade the position of vice president to that of deputy president, with expanded executive powers, along the lines of the Kenyan model. However, Mbabazi is understandably wary of accepting such a deal, because he has no way of ensuring that the president will keep his word – and Museveni has broken similar deals in the past. According to local reports, Mbabazi informed the president that “The deal would be okay but you’ll still retain the powers to sack” – meaning that even if Museveni kept his word and made him a deputy president, he would still serve at the presidents pleasure.

It is not yet clear whether a second proposal, which would see Mbabazi rejoin the NRM in return for being allowed to contest primary elections for the right to be the party’s candidate in the 2016 contest, will be more successful. It is thought that this option is more appealing to the former prime minister, but that he remains concerned that the primaries would be rigged in favour of the incumbent. There is also the small matter of the fact that the NRM has already officially endorsed Museveni’s candidacy, and previously resolved that the president should be relieved of the need to contest party primaries.

Despite the ongoing uncertainty, the government is already in campaign mode, and the Ugandan media has been ordered to increase its coverage of the president. In a thinly-veiled attempt at intimidation, the Uganda Communications Commission, a state-controlled regulator, informed domestic broadcasters that they are subject to “licensing conditions issued by the commission, whereby all broadcast stations are expected to provide live coverage of major national events and addresses [by the president]”. According to the Commission, such coverage will be closely monitored, and “non-compliant stations will be penalised”.

However, such stories have not always played to Museveni’s advantage. In June 2014, NTV Uganda, a television station owned by the Nation Media Group, was shut down after it showed footage of the president sleeping during a session of parliament. According to NRM spokespersons, the president was meditating and not sleeping and so the coverage was misleading. As a result, they temporarily suspended NTV’s coverage of the president, accusing the broadcaster of a “lack of professionalism and biased coverage”.

More confrontations between the government, the media, and the opposition, are likely as the polls near.