People & Power

How Uganda’s wealth has changed hands since 1962

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A Peugeot in Kampala recently

A Peugeot in Kampala recently. Majority of the Magendo dealers, who left formal employment because their salary could no longer afford them a comfortable life, started dealing in scarce goods. This kind of class thrived mostly along the border points, with the eastern border points of Busia and Malaba being the most lucrative. Some of them were driving Peugeot cars as a sign of class. 

By Henry Lubega

Posted  Sunday, June 15  2014 at  01:00

In Summary

For the past 50 years, Uganda has had different classes of people gaining wealth. But why is this so and who have been the beneficiaries? Sunday Monitor’s Henry Lubega digs back into history to tell us more about this issue.

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Ever since Independence in 1962, Uganda’s economy and wealth has changed hands as many times as the country has changed regimes. The 10 different regimes the country has had have each come with its own source of wealth and class of wealthy people.

Different regimes have pursued different economic policies and these have favoured different groups of people. Under the first independence government (1962 to 1971), the civil servants were the wealthy class and this mainly benefited the Baganda.

By Independence, the Baganda dominated the civil service replacing the departing Europeans. Their dominance had to do with their being part of the biggest elite class of Ugandans. According to History professor Phares Mutibwa, “When the Baganda replaced the Whites, they were being paid the same salary scale as the Whites, making them very wealthy.”

The first regime’s economic policy was import substitution, which saw the setting up of different manufacturing industries. This was partly inherited from the colonial leaders and the first regime promoted it further leading to the growth of towns like Jinja as an industrial town.
This policy, however, mostly benefited the Asian business community who amassed a lot of wealth much of which was repatriated.

As a result of this amassed wealth in the hands of foreigners, some people within the ruling UPC party had formed an alliance with the Asians in 1968 which didn’t go down well with some party members, leading to the Move to the Left proclamation.
As the wealth class of the civil service was being created, those involved in agriculture were also making their own class.

From the late 1950s to the late 1960s, this class of people - though many of them were illiterate - controlled the coffee and cotton production line. Their characteristics included huge homesteads with big compounds. The top cream of this class drove Toyota Stout pick-up trucks, those next to them rode Motorcycles which were popularly known as Mwanyi Zabala.

The Amin era (1971-1979)

With the fall of the first Milton Obote regime, his successor Idi Amin came with the Economic War as one of his major economic policies. According to Prof Mutibwa’s forth coming book 100 Years of Uganda, the Economic War had a positive and negative side to it. The economy declined by 30 per cent by the time Amin was removed from government.

“Between 1972 and 1978, the actual price of coffee and cotton fell by 63 and 49 per cent respectively. On average, the proportion of export prices going to the farmers after government got its taxes declined by 83 per cent.”

However, during this period, Ugandans had their eyes opened to the business world. According to Prof Mutibwa, one of the advantages of Amin’s Economic War was the opening up of the business sector, which had been dominated by the Asians, to Ugandans. “Asian-owned businesses were handed to Ugandans, financial institutions like Uganda Development Bank and the Libya Arab Uganda Bank for Foreign Trade and Development, now Tropical Bank, was opened on November 20 1972.”

Transferring businesses from Asians to Ugandans created a new class of wealthy Ugandans known as the Mafuta Mingi (literally translated as “too much fat”). These are people who rose from rags to riches. They were mostly Muslims who had been recipients of departed Asians’ properties.
They lived within their acquired shops while some - as they made more money - had a chain of women in different homes. Besides a few Baganda, the majority were either Nubians or Kakwa’s.

Besides benefiting from free shops in 1973 in Amin’s bid to prove to the world that the Economic War was succeeding in Uganda, through the newly-opened Libya Arab Uganda Bank for Foreign Trade and Development, they received millions of shillings to import goods.

During the 1973-74 budget, Finance minister J. Geria said through the bank, the government had given out Shs27 million to boost the economy and half of it to fund the Mafuta Mingi operations.
One outstanding characteristic of the Mafuta Mingi’s was that almost all of them were Hajjis though some of them may not have gone to Mecca. By virtue of their wealth, they drove the best cars of the time like Peugeot 404 and 504; the cars of status.

Besides these business people was the elite class of the civil service, which had replaced the one Obote had created. The civil servants were identified by the cars they drove though these came in the evening hours of Amin’s regime. The Honda Civic and Honda Accord were cars for this class of people.

Magendo
The Mafuta Mingi’s were rivalled by those trading on the black market popularly known as Magendo. This class was created by the scarcity of day-to-day social requirements like sugar, salt, paraffin, soap and others. Majority of the Magendo dealers, according to Prof Mutibwa, were once civil servants who left formal employment because their salary could no longer afford them a comfortable life, hence they started dealing in scarce goods.

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