Thursday March 27 2014

How will the President handle political orphans?

By Karoli Ssemogerere

The elections are almost two years away but the relentless campaigning has already relegated a number of institutions to a “lame-duck status”. Parliament is having trouble convening regularly for business.

Two weeks ago, the press began carrying a steady stream of reports of local government offices that were permanently shutting down for absence of business to transact. Politics and political ventures are known for their vast financial implications. Even the President for the first time seems worried or unsure how to meet the bulging demands for presidential largesse. And he has good reason to be worried; presidential pledges are now totaling over Shs120 billion today - up from Shs5 billion a few years ago.

They come a dime a dozen. Organised interests like teacher unions normally come off well. Teachers or their ‘leaders’ negotiated themselves out of a pay raise approved by Parliament in return for a Shs5 billion pledge to run their Sacco. Saccos are the everyday folks’ answer to high transaction costs associated with licensed financial institutions. No one regulates their interest; even where their effective interest rate collected in weekly and monthly remittances could easily be mind boggling. Saccos - at least the ones that have not been plundered - also thrive on the zero-default rate. If a member of the group defaults, the rest of the members pay up. So you can get a sense of where the President is heading with smart money.

Politicians tend to be greedy. They “mobilise” the population - itself a special skill. But more importantly, the government relies on them to reduce the pressure for better services. Government-leaning MPs are expected to participate in tenders, distribute public goods and represent the government at functions in their constituencies. Opposition MPs elevated to financial independence are also expected to play the role of alternative service provider (ambulances, hospitals and other expensive goods).

Banks do a good job of cannibalising MPs although it would be difficult for an MP-led Sacco to function with rates of default as high as those in the August House. So the politicians have also run to the President with a more sophisticated idea - asking the President to simply buy out their current loan portfolios at a discounted rate of Shs150 million for each “qualifying MP”.

Never interpret this to mean that this MP should necessarily be from NRM. At 258 MPs for the government side, this pay-out would total Shs38.7 billion or just more than seven times what the teachers negotiated for themselves. It would double the Shs20 billion negotiated in the current détente between Mengo and the government.

But there are some individuals who are too big to beg as part of a Sacco or kneel down in an MP-led Sacco for a presidential pledge. These are very big people. Perhaps they represent an entire district or region and generally, their financial needs cannot be swatted with a mere Shs150 million. These will play their cards close to their chest for a “presidential opportunity” to shake the big man’s hand and remind him on an important pressing issue. If you read newspapers, only 5 per cent of Ugandans do;

on a regular basis you could have caught the photo-op of Capt Mike Mukula in Kyankwanzi out of protocol positioned next to the government Chief Whip Justine Kasule Lumumba. Mr Mukula, out of jail and other things, has been pressing at the highest levels for our brothers - the South Sudanese - to make good on outstanding obligations. His claim, which by now should be advancing in the presidential motor pool sorting requests is for Shs12.5 billion. Hassan Basajjabalaba’s claims for compensation in 2001 and 2006 also fall in this category!

We will never know how big these pledges are growing until the final votes are cast and counted in 2016. Then Bank of Uganda Governor Tumusiime Mutebile and his team will have the unenviable task of mopping up excess liquidity. The worst will be the surge in demand for medical services by the growing numbers of political orphans who are falling by the way side by the new geography of the queue. If you are from Bushenyi; orphaned by the departure of several NRM heavy-weights from government, you are likely to be joined by orphans from nearby if the rumours are to come to pass.

A former Member of Parliament, David Wasswa Lule once in a rhetorical flourish, referred to “byoya bya nswa” to describe presidential pledges. Mr Lule was obviously politicking and living in another century. If you ask Mr Basajjabalaba and the rest of the folks now reading from his playbook, he will tell you there are real ants if you are in the right place at the right time for the right price.

Mr Ssemogerere is an Attorney-at-Law and an Advocate.