People & Power

Obote’s plan for workers that never was

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Milton Obote. File Photo 



Posted  Sunday, May 18   2014 at  01:00
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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.

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