Of Traders strike and how President Museveni is grappling with Idi Amin’s sins
By Ben Ssebuguzi
President Yoweri Kaguta while meeting discontented traders at Kololo, had to bluntly speak facts to them that Uganda’s tax regime was deliberate and is intended to shape a new prosperous and sustainable country.
Our President was not speaking like a politician who is focusing on the next election, but he was speaking as a development consultant trying to make the country escape that vice of haemorrhage of trade deficit.
As Uganda kept changing regimes, different Presidents came with different economic policies. President Obote came with an import substitution policy from 1962-66 where many factories owned by Indians sprung up and Jinja became an industrial town.
However, Obote I’s policy was short-lived as President Idi Amin who succeeded him through a military coup came with an economic war of the expulsion of the entrepreneurial class which led to the collapse of many industries. This was the beginning of the haemorrhage which the NRM has been trying to address in a democratic manner.
President Amin’s major economic policy caused an economic decline of 30% because the people with technical know-how to produce goods and services were chased out. Worse still, the price of coffee and cotton also plummeted by 63 and 49 per cent respectively almost leading the economy to shut down since they were the main source of tax in the form of export tax.
Amin himself after chasing out the Asians who owned businesses, formed financial institutions like the Uganda Development Bank and Libyan Arab Uganda Bank for Foreign Trade and Development which was started on November 20 1972.
This saw the emergence of a click of a few beneficiaries called Mafuta Mingi class (a lot of oil) who acquired free shops and some started getting money from the Libyan Arab bank to start importing almost everything (kusaka). You can imagine how President Amin was too disoriented, instead of taking Ugandans abroad to equip them with industrial skills and thereafter give them capital, instead, he funded them to drain their economy through imports.
In the 1973 Amin government during the budget reading, Finance Minister J. Geria said that through the bank, the government had given out Shs 27 million to boost the economy and half of it was to fund Mafuta Mingi operations. In other words, the government started funding people to start importing almost everything a vice that has exacerbated causing our country to have a negative balance of trade.
The few opportunists who maximised Mafuta Mingi became a special wealth class and drove the best cars of that time like Peugeot 404 and 504 as a symbol of status not knowing that they were crippling their economy.
Suddenly the operation (Mafuta Mingi) was overtaken by those trading on the black market known as Magendo (smuggling), who started as a result of scarcity of day-to-day requirements like soap, salt and others.
Thank God that NRM government policies have enabled us to stop importing such items by putting in place a conducive investment climate that attracts investors which has led to the setting up of many factories.
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