Buying the vote

By Haggai Matsiko

Museveni, Mbabazi cash to shape 2016 election

The 2016 presidential election is 14 months away, but President Yoweri Museveni has, according to inside sources, already spent over Shs 50 billion to squash the ambitions of Amama Mbabazi, his would be challenger within the ruling NRM party. The Shs50 billion already spent is about 15% of the Shs350 billion that Museveni allegedly spent of his re-election campaign in the last election in 2011.

Meanwhile, although Mbabazi has remained silent about his plans, The Independent has learnt that Museveni’s intelligence operatives are concerned about the billions of shillings believed to be on his accounts in various local banks and what they could mean should he chose to contest in 2016.

Among events that led to the closure of the National Bank of Commerce owned by Mbabazi and business associate Amos Nzeyi, were claims that the former prime minister was assembling a financial war chest for his 2016 presidential bid. Since it is generally believed that Mbabazi is highly liquid in local and foreign currency, whether he does not run, it is probable that some of his money could bankroll an anti-Museveni candidate.

Based on that, pundits claim, “Money is likely to flow like never before in the 2016 elections”.

Elections money and financing became headline news recently when the Governor of the Central Bank revealed that he “regretted” financing President Museveni’s 2011 campaign, albeit indirectly.

While addressing the 10th annual meeting of the African Science Academies at the Lake Victoria Serena Hotel on Nov.11, Mutebile said the Central Bank would not repeat the mistakes of 2011.

“You might remember that the economy of this country was thrown into total chaos almost after the last elections allegedly because the central bank had printed a lot of money to finance the elections.

“I can assure you that the central bank did not directly print this money but where government expenditure is directed to areas that are not completely transparent, I cannot determine how much of the money that I have created ends up in political electioneering. It happens.

And I was there as Central Bank Governor, I did not participate whatsoever but because there was some spending of government dependent on treasury bills, which I was issuing, I was financing government indirectly. But since we understood that, we have never done again and I will not do it again.” Coming just a year ahead of 2016 elections, Mutebile’s remarks have become a talking point with many speculating that President Museveni is likely to spend more money during the upcoming polls.

Museveni’s billions

What some are calling “Museveni’s billions for votes” is a controversial subject.

Already, in his contest with Mbabazi, it emerged that mid this year, Museveni  sought to have MPs on his side when he put together about Shs 40 billion to enable MPs clear debts. This was after he learnt that Mbabazi, through a Chinese money-lender, was looking to take advantage of that situation. Soon after Museveni spent another Shs10 billion on the ruling party members traversing the country to market him as the “sole NRM candidate”.

And on Dec.15, the party is set to spend about Shs 5 billion to host its national conference, which too is meant to deal with Mbabazi.

Observers claim this spending binge is likely to continue into next year and 2016.

Joseph Bossa, the Vice President, Uganda People’s Congress (UPC), says that as he seeks another term that will see him cap over 30 years in power, President Museveni will be looking for an even bigger victory in percentages and will ensure he buys those votes with billions because that is what dictators do.

But most importantly, Bossa sees a golden opportunity in Mutebile’s latest remarks that he claims would put an end to all this. “We all know that President Museveni has been raiding the treasury to buy votes,” Bossa says, “What we didn’t know is how they do it. Now that governor is on the record, this is an opportunity for parliament to launch an inquiry and expose him.”

Wafula Oguttu, the Leader of Opposition in parliament, however, is not as excited about this.

“Yes, it is something we are concerned with,” Oguttu says, “but for now we (parliament) haven’t come up with a resolution on how to deal with it. But this is not new. Mutebile has been doing it since he was Secretary to the Treasury and he knows it.”

One time, Oguttu told The Independent, an official, who followed a bullion van from the Central Bank, told him (Oguttu) that it had ended up at State House.

“So, we have known this for a long time now but what can we do about it?” Oguttu asks rhetorically, “Museveni has no respect for this country, he treats the treasury as his personal bank, he simply doesn’t care.”

As you know, Oguttu added, Museveni has not only used the central bank to finance elections, he has on several occasions directed the governor to give money to his personal cronies like (City Businessman Hassan) Basajjabala and (former Tri-Star chief, Velupillai Kananathan).

The solution to all this is nothing else but removing President Museveni from power, at least according to Democratic Party (DP) President Norbert Mao.

“This is what we have been saying,” Mao says, “Museveni has been raiding the treasury to finance elections and for as long as he is in power, this is going to keep happening.”

While activists hope that if parliament mounted pressure on Museveni and Mutebile and attracted the support of donors too, a few things would change, Mao does not.

“Donors have a symbiotic relationship with Museveni,” Mao argues, “Ugandans must understand that it is only them who collectively can change this state of affairs.”

Mao acknowledges that while money plays a big role in elections, the electorates are getting wiser. Another politician boasted that while the President’s brother, Gen. Caleb Akandwanaho aka Salim Saleh camped in Luweero with bags of money during the last bi-election, it did not stop DP’s Brenda Nabukenya from thumping the NRM candidate, Rebecca Nalwanga, with a very fat margin.

Checking election spending is one of the reforms that opposition politicians have been pushing for ahead of the 2016 elections. And they seem to have a point. Since 1996, Museveni’s election spending has been bulging by billions.

Scholars like Dr. Julius Kizza, have for long castigated the current model of political finance – broadly defined as the collectivity of moneys, material inducements, and politicised goods (such as the gifts of ethnicized districts) .

In his paper titled ‘Money Matters: Financing Illiberal Democracy in Uganda”, Kizza says political finance “is the mega-explanation of Museveni’s victory and Besigye’s loss”.

“Elections in Uganda have become procedural rituals, not opportunities for establishing government by consent, thanks to the obscenely high financialisation of the elections,” he writes.

The Citizens’ Coalition for Electoral Democracy in Uganda (CCEDU), in its December 2013 working paper; `Towards Reforming Uganda’s Electoral Commission’ highlights critical areas and reform options. It says the need to manage the illicit use of money during campaigns is one of the reforms needed for Uganda to attain a democratic electoral system.

Although vote buying is proscribed by law, the Commonwealth Observer Group of the 2011 election, in their report, say “the use of money in elections has become a culture in Uganda and voters have become accustomed to receiving bribes for their votes.”

They add that “the 2011 elections were Uganda’s most expensive ever”.

In their 2012 book, `The Politics of Elite Corruption in Africa, Uganda in comparative African perspective’, the renowned Africanist political scientist, Prof. Roger Tangri and distinguished developmental economics journalist Andrew Mwenda, offer startling insights into Museveni’s campaign money and tactics.

Quoting NRM insiders, they estimate that at different times in elections, Museveni’s ruling party spent Shs13 billion in 1996, Shs30 billion in 2001, Shs50 billion in 2006 billion and Shs75 billion in 2011. This projection shows that Museveni’s expenditure on his re-election grows by an average of 60% above previous expenditure. That means that in 2016, Museveni is likely to spend Shs120 billion on his re-election. But Tangri and Mwenda’s figures, although academically arrived at, are clearly quite conservative. The Independent on the other hand put Museveni’s spending 2011 figure at Shs 350 billion. That means Museveni is likely to spend Shs560 billion.

Shifting tactics

While the 2011 spending was overwhelming enough—it got the economy almost collapsing as Mutebile admits, insiders suspect that 2016 is likely to be worse. For one, in 2011 Museveni’s biggest opponent was mainly the FDC’s Kizza Besigye, whose financial war chest he could easily outmatch but 2016 might be a bit more complex especially if intelligence reports are anything to go by. Roger Tangri and Andrew Mwenda note that Museveni has in the past attempted to finance his party through a number of ways.

The first attempt was through Danze, a company formed to make profits that would be used to finance party activities. When Danze failed—it made very little money—Museveni turned to party officials, who were awarded lucrative deals and expected to fund the party. It is under these circumstances that Foreign Affairs Minister, Sam Kutesa and the President’s brother Salim Saleh took over the Entebbe Handling Services Ltd (Enhas), which does all the ground handling at Entebbe Airport.

Away from local business people, the book shows how the President also relied on businessmen of Asian origin like Sudir Ruparelia of the Ruparelia group, Mukwano Group of Industries, Madhvani among others. In exchange for their support, these either got tax holidays or lucrative deals.

Museveni has also relied on contributions from foreign leaders like fallen Libyan leader, Muammar Gaddafi and largely on military corruption. The book shows that money meant for soldiers’ salaries, uniforms and equipment like jets often ended up financing Museveni’s elections.

The latest example of this corruption was the purchase of the SU-30 MK2 fighter jets. While the six jets cost Shs108 billion each or Shs 654 trillion in total, for their purchase, the President directed the Central Bank to release Shs1.7 trillion. This leaves a balance of 1.1trillion. While half of these funds might have been spent on the other weapons that were purchased together with the jets, a sizable portion of this “not completely transparent” expenditure, as Mutebile calls it, possibly found its way in the campaigns.

Apart from whatever was diverted from this pool to elections, President Museveni got parliament to pass a supplementary budget of Shs600 billion just six months to the polls. Insiders say this expenditure could have been fuelled partly because for two consecutive campaigns, in 2001 and 2006, Museveni ran out of money. This was partly because his officials misappropriated it. That is why in 2011, the President directly kept tabs on how the cash was being spent.

The other factor was that tired of demands for favours like land allocations, tax holidays, and other business advantages from the business community, which was funding him in the past, Museveni in 2011 chose to avoid them. This, The Independent reported, may explain why the President dug deep into the public till for his campaign cash.

The result was a 68 % victory. Although, this victory bungled up the economy, it is Mutebile who took the heat. Senior economists, including some at the World Bank and parliamentarians called for his resignation when he confessed before the Parliamentary Accounts Committee (PAC) that he had no record of the transaction in which he released Shs 1.7 trillion for the jets. Such uncautionary spending of public funds, Parliament and economists argued, was unprofessional, irresponsible, and criminal.

Mutebile, whom Sebastian Mallaby, in his 2004 book, The World’s Banker: A story of Failed States, Financial Crises, and the Wealth and Poverty of Nations, describes as “a hulking, hard-drinking hammer of a person, the chief architect of Uganda’s success story and the greatest contributor to Africa’s struggle against poverty in his generation,” found himself being described as a regime lackey.

For Museveni although the runaway inflation that hit the highs of 30 percent—as a result of Museveni’s billions for votes—led  a storm in form of the Walk-to-Work protests led by Besigye, Museveni’s security operatives crushed it in a matter of months. Mutebile, on the other hand, had to battle endlessly with the two-digit inflation.

Going by his statements, however, it seems he took in some hard lessons and while in 2011, he needed his contract to be renewed, 2016 is different, he will be looking to retire and many hope, in a respectable manner too.

But even if he was to stay on, he clearly knows that his job stops at providing money and not determining what that money is spent on. That job is Museveni’s. Unfortunately, President Museveni just can’t fight the urge to spend a few billions on elections as 2016 will most likely prove again.

2015 could be an even more eventful year for Governor Mutebile whose current contract expires just before the election, on Jan.1 2016. Will Mutebile, 65, want to retire honourably or comfortably? Already, he seems to have already embarked on this journey but a lot will depend how he manages the central bank’s role in elections money and financing.