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
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
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 2005/06, 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 2010/11, 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 2015/16, 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 2015/16 Budget.
Watch when the next budget is read, that is where his campaign strategy
may be written.