What the governor’s statement tells us about what will happen in 2016
Bank of Uganda (BoU) Governor Emmanuel Tumusiime-Mutebile recently revealed that during the 2011 presidential elections, the government approached the Central Bank for large sums of cash to finance a supplementary budget. BoU obliged.
Mutebile said this money was “used for electioneering” and plunged “the economy into chaos.” He then promised that next time the government attempts to raid the Central Bank during election campaigns, he would not allow it.
Many people may denounce Mutebile for compromising the independence of the central bank and see his promise not to do this again as hot air.
But I see another problem that he does not have choice in the matter if he wishes to continue defending the independence of the Central Bank. Had he refused, his contract would not have been renewed. And the next person appointed may have been a worse alternative. Therefore, the best way to defend the institutional integrity of BOU in such a situation is to make the tactical compromise he made. It enables him to retain his job and ensure macro-economic stability.
The 2011 campaign was the first time President Yoweri Museveni was raiding the Treasury to finance his election campaign. It marked a fundamental shift in Museveni’s strategy of elections and economic management.
Since he accepted International Monetary Fund and World Bank economic orthodoxy on the necessity for macroeconomic stability through tight monetary policy, Museveni had been loyal to this position. Perhaps he recognised the necessity of economic stability to his political survival.
Instead, in previous presidential campaigns, he appeared willing to terrorise voters and even kill a few to win. By contrast, the 2011 election was the most peaceful. But why did Museveni in 2011 prefer bribery and its accompanying inflation over violence and intimidation which he had used before?
The answer could be that those tactics were backfiring. The arrest of his main challenger in 2006, Kizza Besigye, had galvanized a lot of enthusiasm for the opposition and led Museveni’s absolute vote to decline by one million. The opposition gained by the same margin.
Museveni may have concluded that bribery is a more effective and even more humane. If this was his conclusion, he must have seen raiding the treasury to buy voters as a tactical compromise to win a strategic objective. He would afford to cause short term inflation to win the presidency. But once he had his five year mandate renewed, he could restore macroeconomic stability as he has done. But 2011 also saw a major shift in how Museveni’s election campaign was financed. Previously, Museveni had funded his campaign from private contributions channeled through the National Resistance Movement (NRM). In 2011, the financing was done through state institutions and the campaign money was disguised as official state spending on public programs.
For example, every village was facilitated to form a committee called a Village Development Forum which was given Shs1 million apparently for food security. Every voting-age resident of the village was a member regardless of political affiliation. There were guidelines on how to spend this money including starting up projects to keep goats, pigs and chicken or grow cassava and beans. Officially, it was a loan but the voters knew better.
Then every LC1 chairman was given 100,000 as salary during the campaigns and every former soldier would get Shs 200,000.
There were many other ways through which public funds were used to enhance Museveni’s electoral fortunes.
When all these monies were released in the months of January and February 2011 in a financial carpet-bombing of the electorate, it aroused massive enthusiasm around Museveni’s candidature. Museveni won with a large margin because his supporters turned out in large numbers.
The shift of campaign money from the party to the state may have been because the president was not comfortable with so much money going through then-Secretary General (SG) of the NRM, Amama Mbabazi. Although Museveni had helped Mbabazi trounce former vice president Gilbert Bukenya and NRM historical Gen. Kahinda Otafiire in the battle for the NRM SG in September 2010, many insiders say he was surprised at the extent of Mbabazi’s popularity. It is possible that soon after the President became concerned that Mbabazi may grab the party from him and decided to transfer the campaign effort from the NRM to the state. But this shift could also have demonstrated Museveni’s desire to liberate himself (and through him, the state itself) from the power and influence of lobbyists and business interests. This is because in previous elections, these groups made large campaign contributions and emerged from the elections with a sense of entitlement. Many of these people would ask for free land and other state largesse as a reward for their financial contributions. Using the state as opposed to private contributors as the source of campaign money would therefore create a more autonomous presidency.
The use of money in 2011 had a devastating effect on the campaign effort of Museveni’s opponents, including his main challenger – Kizza Besigye. In 200506, his arrest and co-current trial in the high court and military court martial had given him publicity and sympathy, thus galvanizing his base.
Besigye had been able to tap into the president’s failures especially among the youth on issues of service delivery and rising cost of living. Besigye had gained support in urban and peri-urban areas where populations are nucleated, unemployment is high, levels of education are equally high, access to information better developed and where debate on politics is more pronounced. At the time, what Besigye lacked was something to drive the enthusiasm of his base.
However, in 201011, Museveni was civil and flash with cash. Many of Uganda’s youths are opportunistic. They accepted the bribes and turned out to vote. Potential voters for Besigye, meanwhile, stayed home. So voter turnout fell from 73 percent in 2006 to 58 percent in 2011.
Although money did not increase the number of Museveni’s supporters it energised them. So Museveni won by 68 percent. Besigye lost with 26 percent because his candidacy had little enthusiasm.
Going by this, come 201516, we are going to see the money flow. Mutebile may keep his promise but this will be because Museveni may not need to raid BoU again. He will put the money in the 201516 Budget. Watch when the next budget is read, that is where his campaign strategy may be written.
Source : The Independent