When President Yoweri Museveni retained power one year ago, his hope was that he could use the money anticipated from oil resources to deliver a semblance of progress. Epajjar Ojulu reports from Kampala.
To placate a population that for three decades endured empty promises, President Museveni has always dangled the prospect of money. The “jam tomorrow” pledge has proven more successful than the gun, but for Uganda in 2017, Museveni will need to find new ways of maintaining power.
His opponents are already saying that democracy will not be served if parliament amends the constitution to remove the presidential term limits, enabling Museveni to stay in power after he turns 75 years in three years’ time.
Since his party, the National Resistance Movement (NRM) has an overwhelming majority in parliament, nothing will stop the change from sailing through, and the NRM party meeting at Kyankwanzi National Leadership Centre, has already agreed to table the constitutional amendment required.
Meanwhile, the president will continue his tactic of swaying the opposition, not least by offering cash and political jobs to its leaders. The Uganda Peoples’ Congress (UPC), one of the main opposition parties, has been shaken after Museveni struck an alliance with Jimmy Akena, the son of the late President Milton Obote, the party’s founding leader.
Akena is leading a breakaway faction of the party. His wife Betty Amongi was appointed a cabinet minister and Museveni has also appointed opposition Democratic Party senior officials to cabinet.
Museveni has purged his own party, the NRM, to ensure total compliance with his plans, appointing young people.
Yet the economy is in meltdown. The anticipated oil revenues are not likely to reach the treasury any time soon. Energy and Mineral Minister Irene Muloni says oil production will begin in 2020. But this is Muloni’s third attempt at a target date and could well suffer the same fate as her 2015 and 2017 forecasts.
The main problem is that the government has failed to attract funding for its proposed $6bn refinery, which petroleum experts say is not viable.
The major oil companies wanted construction of the refinery to be in the Kenyan port city of Mombasa to serve oil exports, but the government insists that the main market for the oil is the East Africa and Great Lakes regions, and so it is projected to be built in Kabaala in the west of the country.
A Russian and South Korean consortium, Global Resources, reneged on an earlier agreement signed in 2014 when it sought renegotiation of the deal in the wake of declining oil prices on world markets.
For the first time since 1986, the International Monetary Fund (IMF) and the World Bank have withdrawn support to Uganda, citing budgetary indiscipline, and diversion of budgeted funds.
European Union bilateral donors such as Denmark have also suspended funding. They cite, for example, the high expenditure on parliament that has expanded from 380 members to some 500. MPs earn five times more than university professors.
US president Donald Trump has made public his dislike for Museveni, and Washington’s support is unlikely in the coming years.
After paying lawyers $11m to argue Uganda’s case against Heritage Corporation in a dispute surrounding unpaid taxes (when Heritage Corporation sold its interests in Uganda), the government has handed Ush200m ($50,000) to each of a dozen officials it says worked hard to win the case in which a London court awarded Uganda $700m.
The Uganda shilling is experiencing its worst decline in 30 years, with its value dropping because of the dwindling donor support and exports. Bank of Uganda statistics show that by the end of last December its value had fallen by 6% in one year.
The country’s exports are also falling fast due to the war in South Sudan, the country’s number one importer of Uganda’s mainly agricultural products (and second only to Kenya in total exports).
South Sudan represents about 30% of exports according to Bank of Uganda deputy director of communication, Kizito Kiyingi. The conflict in that country has dealt a major blow to the economy.
The bubble of promises Museveni made during the last elections has already burst. Inflation is spiralling; unemployment is at its worst in the country’s history and the agriculture sector that has always delivered food without government support has been devastated by the current drought sweeping across eastern Africa.
The finance ministry has been ordered by President Museveni to halt road construction and use the money to import food.
Instead of supporting the agricultural sector, the backbone of the economy, the government is pouring funds into the military, State House, parliament and security agencies, seemingly to ensure that Museveni stays in power.
Agriculture has been allocated a mere 4% of the national budget, which along with the rural development funding is equivalent to 9.6% of the non-debt, non-discretionary budget.
The sector has survived on hand hoes and natural soil fertility but not benefitted from modern agricultural technology and fertilisers. It continues to depend on archaic methods of production relying on manual labour.