The principle of negotiation is that a bad deal is always
better than no deal at all. Debating every investment deal to its grave is not
a formula for success.
The battle over National Social Security Fund (NSSF)
purchase of land belonging to security minister, Amama Mbabazi is a classic
example of the vicissitudes of public procurement in Uganda. Given the stakes
and the players, this scandal may claim the political life of Mbabazi and the
minister of finance, Ezra Suruma. Yet in seeking to hang the suspected
culprits, we should not throw the baby with the bathwater.
The funds last three managers (Abel Katembwe, Yoram Barongo
and Leonard Mpuma) were all fired, some prosecuted and their boards were
dissolved.
This should have set a precedent against disrespect of the
tendering and contracting rules. Everyone knows the evil that gets visited on
those who violate them. It has not. Why? Anyone even with little knowledge of
the configuration of power in Uganda will tell you that NSSF cannot make a big
investment decision and it goes right. Why?
let us assume a decision involving millions of dollars was
structured through a purely technical process. The powerful in this town will
not allow it to proceed - unless they get a cut. They will successfully fight
it to the ground. It is almost impossible to avoid some oversight, negligence,
incompetence and/or impropriety in such a deal. The excluded will find the
loopholes to leverage and therefore successfully torpedo the deal. Lacking in
political backing, the deal will be dead on arrival, as happened to Nsimbe.
Therefore, the only way to carry out an NSSF deal
successfully is to leverage it politically. Here, you get someone closely
connected to state house to support the project. You also claim that it is part
of the president’s grand vision to develop the country. But there are no good
Samaritans at State House. The powerful will only support the deal if there is
a cut for them. Secure that the mighty and powerful are on board, those
involved on NSSFs side have a high incentive to cut corners. This could explain
the current saga; NSSF managers may have ignored the rules because they thought
that with Mbabazi on board, they would get away with it.
However, Uganda has greatly changed over the years. Our
country enjoys a rare paradox. On one hand, President Yoweri Museveni seems to
have centralized and personalized power at State House. Nothing of significance
happens in this country without the president’s personal involvement. Yet on
the other hand, power is also distributed among diffuse fragments of our
political structure: the media, parliament, Inspectorate of Government, PPDA
and intelligence services. Anyone of these power centers can kick off dust and
drive a deal to its grave.
Thus, even when you leverage a powerful power broker closely
connected to the president, you cannot be sure that the deal will succeed. Any
of the other power centers above can successfully contest their exclusion as
parliament and other anti Mbabazi forces are demonstrating. It is impossible to
bring all these groups into agreement. The financial and transaction costs of
such an undertaking would overwhelm even the most liquid investor.
More than the corruption of the actors, it is this set of
affairs that has created investment gridlock in our country. Over the last ten
years US$ 2.7 billion worth of investment has been blocked as a result of
debate over disrespect of the rules in tendering. I know that many Ugandans are
driven by moral outrage to oppose such investments when revelations of gross
irregularities in the tendering and or contracting come to light. But I also
know that many oppose out of ignorance, others are angry that they did not get
a cut on the deal, some will be settling political scores, while a number
(especially parliament) join the fray not so much to hold the culprits to
account but to leverage their power and extort money from the investigation.
This is what makes our democracy at once vibrant and
damaging. It is great to have all these institutions of accountability to check
our rulers. Yet sometimes, when we throw key investment decisions into the
public gallery, the decision making process degenerates into partisan gridlock.
This reminds me of Athenian democracy during the time of Pericles in 400 BC.
Socrates, so openly despised their pretentions, scorned their ignorance and
rebuked their fickleness that when they finally had their day to pronounce a
sentence on him during his trial, they voted overwhelming for his death.
In his
final triumph over the mob, the old sage welcomed his death with unmistakable
calmness!
As a journalist, I used to be among the coalition of those who
worked hard to block projects whose tendering had question marks. I was naive
then, thinking that we were cleaning up the system. Ten years later and many
investment projects dead, we are still riddled with irregularities in
tendering.
This has taught me that these democratic debates don’t lead to
solutions. Instead, they paralyze decision making. The principle of negotiation
is that a bad deal is always better than no deal at all. Debating every
investment deal to its grave is not a formula for success.
Moving forward, we need a coalition of people who are not
merely seeking to score political points or be seen as powerful. These people,
while acknowledging the irregularities in the purchase, would recognize the
importance of getting NSSF’s vision of large-scale organized housing
development back on track. The economic and political impact of this vision is
too strong to ignore and it too valuable to kill through political
buccaneering. The middleclass in Uganda should stand behind this vision.
Second, the ministry of finance should move very fast to
liberalize social security which is a stated policy of government. Here,
private equity firms and mutual funds would be licensed to provide the services
NSSF monopolizes today. Every Ugandan would choose where to take their savings
based on where they predict a good return. Privatized and liberalized social
security especially in a dysfunctional political structure like ours will
quicken investment decision-making and furnish firms with agility to adapt to
market dynamics.
amwenda@independent.co.ug
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