Money in politics

By Flavia Nassaka

From winning the election to keeping the seat; politicians have to dig deeper in their pockets. Everyone doesn’t like it and everyone is doing it.

Emmanuel Lumala Dombo knows how to win an election. He has done it four times in Bunyole East constituency in Butaleja district. But as the next election – early next year- approaches, the 52-year old says he is noticing a worrying trend; the influence of money on how elections are won – and lost.

Dombo, who has been in parliament for 18 years since 1996, says because money is now so central to winning, some of his colleagues are spending a fortune on keeping their seat.

Some, he says, started saving for the election almost three years ago. Dombo’s observation is supported by Alice Alaso, a vocal opposition MP from Serere County. She says the cost of competing for a parliamentary seat has increased almost ten times since 2001.

A new survey is now putting figures to the stories. Conducted between November and December and released on Jan. 27 by a coalition of 14 Civil Society Organizations (CSOs), the survey had more than 146 MPs participate and concludes that to win elections politicians, particularly MPs, will have to part with even more cash.

The study notes that 75% of the MPs agreed that to win an election one needs a lot of money and that the money required is ever increasing.

And the figures are staggering.

Ghosts of 2011 election

In the 2011 election, the ruling NRM party gave each of its candidates between Shs30 and 40 million as a campaign war chest.  That was hardly enough for most candidates who say they spent between Shs120 million in the poorest rural constituencies where voters are not so demanding to Shs500 million in highly competitive urban constituencies like Kampala.

Dombo recalls that election spending was at the heart of an explosion of inflation to the highs of 30% immediately after the 2011 polls. It is this inflation that inspired some of the fiercest riots in the so-called “walk-to-work” protests that claimed over 10 lives and injured hundreds.

Officially, Museveni’s NRM budgeted for Shs65 billion for parliamentary and local council elections in 2011. The FDC budgeted Shs23 billion for all elections (Presidential, parliament, and LC), DP hadShs9 billion, and the Uganda Federal Alliance Shs4 billion.

According to the polling agency, Afro barometer, some reports say NRM spent US$200 million (Aprox.Shs580 billion) during the campaigns. But, Afro barometer says, other estimates put the figure even higher.

Since the NRM has not submitted audited expenditures to the Electoral Commission as required by law, it is impossible to know exactly how much money it spends on elections.

But six weeks before the election the NRM-dominated Ugandan Parliament passed a supplementary budget of US$257 million barely 6 months after the original budget was posted and only 2 months after it was approved. Among the expenditure was a US$33.6 million allocation to State House.

Some of this, US$4.2 million was given to ‘facilitate jobless youth’. All MPs also shared US$8500.

Still, a few months after the supplementary budget was passed and a few days before the election, then-Finance Minister Syda Bbumba announced that the government had already spent its budget. The effect was catastrophic on the economy.

Such a rapid growth of money supply; from Shs8.4 trillion in June 2010 to Shs9.7 trillion by February 2011, without matched growth in production almost automatically led to an inflationary spiral.  That is what happened in 2011 as rapid expenditure on vote-buying consumables like sugar, salt, soap, fuel, soda and beer, and cash exploded aggregate demand.

Vote buying is an offence under the election law in Uganda and some election wins have been nullified over it. But the vice is widespread because the law does not require candidates to declare their campaign expenditure. That is a requirement for parties only. Even parties however, under the current law do not have a cap on how much they can spend.

Nobody wants a repeat of that. And yet, everybody appears to be working towards that.

Analysts say the vote buying bill this time is likely to be doubled. Candidates, according to a report in The Observer newspaper, are building campaign funds of up Shs800 million and even Shs1bn. Multiply that by the thousands of candidates that will be campaigning – with about 1000 chasing the 349 seats of directly elected and district woman MPs – the figures have everyone worried.

The fundamentals of the economy are stable but investors are jittery about it heating up. Already the cost of money is rising with inflation expected to follow according the Bank of Uganda (BoU) forecasts. By Jan.15 the yield on the central bank’s one year notes had risen to 14.6%, the highest since February 2013 and some analysts were predicting a rise to the 20s and 25% last seen in the late 2011 and early 2012. Even cash in circulation and ready to be spent, had swollen to an unprecedented Shs5 trillion. At the time of elections in 2011, it was Shs3 trillion.

To allay investor worries, BoU Governor Emmanuel Tumusiime  Mutebile in late 2014 pledged to fund anticipated fiscal expansion through issuing of government paper.

“I do not dispute that the fiscal stance will be more expansionary than it was in the last three fiscal years, but I do not believe that this will generate serious inflationary pressures”.

He explained that the election year 2015/16 budget will be bigger than the 2014/15 and is likely to impact on aggregate demand by only a relatively modest 1.6% of GDP. He said this magnitude alone is not likely to cause a significant rise in inflation.

“Of course, if government’s domestic borrowing requirement is too high, there may be adverse effects on the economy; for example, interest rates may be pushed up and the private sector crowded out of credit markets.”

Mutebile said he hopes the government will not have to increase its domestic borrowing requirement beyond the planned net issuance of Shs1.4 trillion of government securities in the primary auctions.

Mutebile harboured similar hopes before the 2011 elections. But two years after the elections, on November 12, 2014, he revealed that the government got money from the central bank to pay for its election win. That money was US$740 million (Approx.Shs2.1 trillion). Mutebile denied printing new money on orders of government but, he said, the money was passed on to government through treasury bills. He vowed it would not happen again.

“I was there as central bank governor. I didn’t participate whatsoever; but because there was some spending by government dependent on treasury bills which I was issuing, “I was financing government indirectly. But since we understood that, we have never done it again and I will not do it this time,” he said.

The Civil Society survey assumes, once again, Mutebile’s hopes will be dashed and money will flow. It shades light on the impact of such commercialisation of politics and its repercussions.

MPs spending on voters

It reveals that apart from spending on elections, MPs have to keep spending wads of cash in their constituencies.

On average, it notes, a legislator spends Shs 4.6m on a constituency visit, with over 85% of those sampled admitting being overwhelmed by requests for donations.

Paul Mwiru, the urban Jinja East constituency who says he is not one to spend lavishly, says as polls approach, most MPs are visiting their constituencies more than twice a month. This means more spending on school fees, burials, weddings, and communal services, he says.

The survey indicates that last year, MPs from western Uganda spent Shs6 million on average whenever they visit the constituency, whereas those from the east and central spend Shs4 million. Northern MPs who are the least spenders part with Shs2.5 million on average per visit.

To Mwiru, MPs from the west spend more partly because they have the money and represent relatively rich constituents whose expectations are way beyond fees, sugar, and salt.

“It’s understandable for MPs from the East to spend more. The region was abandoned by the government. The largest percentage of the people live in absolute poverty yet even the infrastructure is appalling,” he says.

But Cissy Kagaba, the Director of the Anti- Corruption Coalition, says some MPs fear going back to the electorate for consultations due to huge demands. She says this impedes service delivery.

The survey notes that in 2014 in Eastern Uganda where Dombo comes from, each MP spent an average of Shs60 million on communal responsibility goods that are the responsibility of the government.

Dombo is quite philosophical about this type of expenditure.

“MPs have no option but to do what the electorate demand of them because an MP is the only job that one gets with the help of the peasants (voters) and religious leaders,” he says, “This gives them (constituents) a legitimate right to partake of the MPs income.”

He adds: “They partake of it by expecting an MP to contribute in the repair of roads, bridges, to the fees of their stranded kids, medical expenses, fundraising for church or mosque construction, burials, weddings, football competitions, SACCOs”.

But at the heart of this expenditure is an even bigger problem that threatens Uganda’s fledgling democracy according to experts. In brief, in order to raise this cash, MPs end up abandoning their legislative work and concentrating on ways of raising this money.

In April 2014, MPs demanded a massive increase in their salary, a thing that left many wondering why MPs who earn about nine times more than an average well-paid worker could be asking for extra pay.

In the same year, some financially desperate MPs almost refinanced their debt with a Chinese money-lender. President Museveni, who deemed the refinancing plan to be a security threat, intervened with an equally controversial bailout plan which was code- named `Article 110’. Under this arrangement, it was alleged that both indebted and non-indebted MPs picked cash from the government chief whip’s office.

Vulnerable MPs

Onesmus Mugyenyi, Deputy Director Advocates Coalition for Development and Environment (ACODE), a public policy research think tank, says when MPs run around trying to find money, they become vulnerable to manipulation. Often, they turn to the President for bailouts.

“While they have to look for money, the president has a pool of money at his disposal in the name of the State House budget,” Mugyenyi says.

As a result, Mugyenyi says, the MPs become available to do Museveni’s bidding; including passing legislations that keep Museveni in power.

“Having been in power longer, money is the only weapon at Museveni’s disposal to win sympathy,” says Mugyenyi, “You’ve heard stories of the president carrying money in sacks. Good enough he has it and legislators don’t.”

Mwambutsya Ndebesa, a professor of political history at Makerere University says Museveni has used money as a trick to patronise almost everybody.

“When the president finances candidates, he is buying them to push his agenda on the floor of parliament,” says Mwambustya.

He adds: “For the politicians to allow one individual to control them speaks volumes of our current parliament and the one we are likely to have come 2016.

“There are members who have never attended committees not even participating in debate in the plenary. All they need is the money to buy voters when time comes,” he adds.

Museveni even brags about his spending power on the voters.

“I have the money you need for some of the social services but if you make a mistake and vote for the Opposition, you would be blocking the channel because they cannot approach me,” Museveni said while campaigning for the NRM candidate in the Busia district chairman by-election.

By his own admission, by March 2010, Museveni had fulfilled 166 pledges amounting to approximately US$1 million (about Shs3 billion) in the lead up to the 2011 elections.

Kagaba and others want an end to politics of vote buying. Kagaba wants a cap on the amount of money an individual should spend during an election.

“Otherwise in future it’s only the super-rich who will be able to compete in any electoral positions,” Kagaba told The Independent.

Alice Alaso agrees. And she adds another requirement that, she says, is the only thing that can make contesting in an election meaningful; transparency.

“Candidates should be required by law to publicly declare the source of their campaign donations,” she says. Whether that can happen or not could be decided by the toss of a coin. Heads it might not happen, tails it will definitely not happen.