Sunday May 18 2014

Obote’s plan for workers that never was



Milton Obote. File Photo

Milton Obote. File Photo 

Common Man’s Charter. Uganda joined the rest of the world to mark the Labour Day on May 1. Sunday Monitor’s Henry Lubega looks back to 1970 when Uganda was supposed to take on a socialist economy when Milton Obote made the famous Nakivubo proclamation popularly known as the move to the left or also Common Man’s Charter

Forty-four years ago on May 1, 1970, as the rest of the world celebrated the international Labour Day, Ugandan workers gathered at Nakivubo War Memorial Stadium where then president Milton Obote made the famous Nakivubo proclamation popularly known as the move to the left.
In the announcement, the Uganda government acquired 60 per cent shares in 84 companies, manufacturing industries, financial and insurance institutions incorporated in Uganda.

The move to the left, which came to be known as the Common Man’s Charter, was presented as a Labour Day gift to Ugandan workers. Article 3 of the Charter stated: “We subscribe fully to Uganda always being a Republic and have adopted this Charter so that the implementation of this Strategy prevents effectively any one person or group of persons from being masters of all or a section of the people of Uganda, and ensure that all citizens of Uganda become truly masters of their own destiny.”

During the celebrations, the president said: “With immediate effect, the government is to take control of 60 per cent of more than [84] companies in Uganda; they would be run by state corporations, trade unions, municipal councils and cooperative unions. The list includes banks, insurance companies, manufacturing and mining industries, plantations, oil companies and transport undertakings in Uganda.”

The government committed to pay the affected companies within 15 years, the payment was to come from the future profits made by the companies. Under the new system, all forms of import export business were taken away from the private sector and placed under a newly-created government parastatal called Import-Export Corporation, headed by Jayat Madhvan.
While addressing the press, according to the Uganda Argus of June 2, 1970, the Export-Import corporation chairman Jayat Madhvan said: “Former importers and exporters are to be the agents of the corporation, and they will have to get authorisation from the corporation before they can transact any business.”
During his speech at Nakivubo, president Obote promised that he was going to meet the directors of the affected companies that very evening to sort out how the government’s take over was going to be effected.

Just three weeks later, he came through when the minister of Commerce and Industry William Kalema on May 27, 1970, announced the first appointment of heads of new board of directors for the five commercial banks that were affected.

Yoweri Kyesimira, an economist at Makerere University was sourced to head Barclays Bank, Sam Y. Mukasa, who was an administrative manager at Shell Uganda, was taken to Grindlays Bank, while Sam B. Rutega, an executive director at Uganda Development Corporation, was tasked to lead Standard Bank (now Standard Chartered Bank), Fabian Okware was brought from heading prisons to lead Bank of Baroda and M. Okai, the principal agricultural economist at the Ministry of Agriculture, was appointed to Bank of India.
For Oil companies like Shell and BP, the government appointed Robert Elangot as the chairman board of directors for the two companies, members on the board included A.M Odonga, G. Nkojo, P Zirimu as directors while Robert Broughton was retained as the managing director.

The Bill, which was presented and passed by the Parliament at the vote of 63-0 prevented the affected companies from: dismissing or disengaging staff, selling assets including stock and shares, declare dividends, take on new liabilities, issue new shares, change salaries or terms of employment of staff including terminal benefits, cancel or allow to lapse insurance policies, go into voluntary liquidation or otherwise stop business or appoint new directors or in any way vary the conditions and terms of service.

Any company contravening the provisions of the Bill could be fined up to Shs50,000. The directors of the company guilty of breaching the new rules were to be fined Shs50,000.

Revocation
However, eight months after the proclamation, Obote was overthrown, and the day it would have been marking its first anniversary, the new regime of Idi Amin had other ideas.

The January 1971 coup ended the hopes of Ugandan workers and the dream of Ugandans becoming a socialist state.
During the 1971 Labour Day celebrations in the western town of Kabale, Amin declared that pure socialism and capitalism were only for academic interests. To him, his aim was to choose elements of either pure socialism or capitalism which might be relevant to Ugandan needs.

Amin went ahead to announce that besides the four banks, four insurance companies, two locally owned sugar factories and the East Africa Steel Corporation in which the government had retained a 49 per cent shareholding, all other firms that had been affected by the move to the left were left completely in the hands of the private ownership. It was not his policy to make Uganda a socialist state.

Before Amin’s declaration, the Finance minister then had stated that the new regime would “break away from the trend towards absolute central control of the economy and adopt a more liberal economic policy”.
Today, Uganda follows an economic strategy of mixed economy which means allowing the majority of economic activities to be carried out by private entrepreneurs—small, medium and even high. The state, however, takes part in selected key sectors.

Obote’s 1970 may day speech (slightly edited)

Labour, which in daily life means toil and sweat, is what we celebrate today.
The working man or woman is the pride of Uganda... This year, I have certain announcements to make.

….Today, I make an announcement on the steps that must be taken in the promotion of our new political culture.
Article 38 of the Common Man’s Charter commands that the guiding economic principles must be that the means of production and distribution are in the hands of the people as a whole. The implementation of this command will rest more upon the shoulders of the working people of Uganda than on the Government…
To this effect, from today all import and export business will be transacted by Parastatal Bodies only.

The oil companies, however, will continue to import and distribute oil and other petroleum products. From today Government will acquire 60 per cent of the shares of every oil company operating in Uganda.

From today, Kampala City Council, together with the Trade Unions in Kampala, will acquire 60 per cent of the shares in the Kampala and District Bus Services. Since it is the Common Man who uses these transport facilities it is only fair that he should have an effective stake and active engagement in the ownership and operations of the transport companies.

For the rest of Buganda, eastern, northern and western regions, again from today, the District Administrations, the Urban Authorities, the Co-operative Unions and the Trade Unions, will acquire 60 per cent of the shares of the bus companies there.

The strength of the economy today has three important legs; the three “C’s”—coffee, cotton and copper. From today, the Uganda Development Corporation will increase its share-holding in Kilembe Mines to 60 per cent.
The workers and the Parastatal Bodies will from today acquire 60 per cent of the shares in every important manufacturing industry and plantation.
Lastly, I wish to announce that Government will acquire 60 per cent of the shares of every bank, credit institution and insurance company operating in Uganda.

The 60 per cent shares which have today been acquired by the people of Uganda in the various economic sectors I have announced will be paid for, over a period, from the profits made by the companies concerned.
…This active engagement of the Common Man, I fervently believe, has opened a new chapter of mutual co-operation and goodwill between the Common Man and private enterprise.

With the entry of the Common Man into the fields of ownership and management of the means of production and distribution, I declare to the organised workers, the Trade Unions, that the Trade Unions Act will be amended to abolish the archaic principle and practice of strikes.
Fellow citizens, I have decided upon the matters I have just told you. “For God and My Country”.

companies affected
1.Robbialca Paints (u) Ltd
2.Uganda Bata Shoe Co Ltd
3.Kilembe Mines Ltd
4.Lake Victoria Bottling co Ltd
5.Madhvan Sugar Works Ltd
6.Mukisa Biscuit Manufacturing Co Ltd
7.Mulco textile ltd
8.Nakasero Soap works Ltd
9.Nile Breweries Ltd
10.Pan Electric Ltd
11.Printpak U Ltd
12.Sikh Saw Mills ltd
13.Steel Corporation of East Africa Ltd
14.Tororo Oil and Soap Factory Ltd
15.Uganda Baati Ltd
16.Uganda Blanket Manufacturers Ltd
17.Uganda Bottlers Ltd
18.Uganda Breweries Ltd
19.Uganda Clays Ltd
20.Uganda Fishnet Manufacturers Ltd
21.Uganda Millers Ltd
22.Bank of Baroda (U) Ltd
23.Bank of India (U) Ltd
24.Barclays Bank of Uganda Ltd
25.Standard Charted Uganda Ltd
26.Grindlays Bank Uganda Ltd
27.Housing Finance Company of Ug Ltd
28.National Industrial Credit EA Ltd
29.Diamond Jubilee Investment Trust Ltd
30.Shell Uganda Ltd
31.Mobil Oil Uganda Ltd
32.Caltex Oil Uganda Ltd
33.Agip Uganda Ltd
34.Esso Standard Uganda Ltd
35.Total Uganda Ltd
36.BP Uganda Ltd
37.Uganda Transport Co Ltd
38.Kampala and District Bus services Ltd
39.Eastern Province Bus Co Ltd
40.Yusuf M Rahemtulla Ltd
41.Africa Ceramics
42.Domestic Appliances Ltd
43.East Africa Oil Industries Ltd
44.Fit-Rite Manufacturers Ltd
45.Uganda Oxygen Ltd
46.Uganda Motor Corporation
47.Credit Finance Corporation
48.Arua Bus syndicate
49.Northern Province Bus Co Ltd
50.PAPCO Industries Ltd
51.Uganda Feeds Ltd
52.Uganda Maize Industries
53.East African General Insurance CO LTD 54. Uganda Company Ltd
55.Africa Textile Mills Ltd
56.Alliance Oil Mills Ltd
57.Allied Food Products Ltd
58.Associated Match Co Ltd
59.Associated Paper Industries Ltd
60.Blue Baird Garments Ltd
61.British American Tobacco (U) Ltd
62.Brook Bond (U) Ltd
63.Budaka Ginners Ltd
64.Budaka Soap works Ltd
65.Budongo Saw Mills Ltd
66.Cabal Corporation of Uganda Ltd
67.Chillington ULtd
68.Combined paper bags Manufacturers ltd
69.Commerce and industries Ltd
70.Dunlop E.A Ltd
71.East Africa Aluminum Works Ltd
72.East Africa Oil Industries Ltd
73.East Africa Steel Products Ltd
74.Iganga Industries and produce Ltd
75.Jupiter Oil Industries Ltd
76.Uganda Rayon Textile manufacturers
77.Uganda Steel Ltd
78.Uganda Sugar Factory Ltd
79.UGMA Steel and Engineering Corporation Ltd
80.UMA Industries Ltd
81.Walkover Footware Ltd
82.Walpmur co (U) Ltd
83.Leyaland Paints (U) Ltd
84.Sadolin Paints (U) Ltd

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