Corruption and cronyism in Uganda's privatization in the 1990s

Abstract

Uganda's privatization in the 1990s was marred by malpractices and manipulations involving regime politicians and well-connected individuals. This article is one of the first to document publicly an African case of privatization abuse. In particular, it documents a number of scandals that tainted privatization with serious accusations of corruption and cronyism. The article also examines aspects of corruption and governance in Uganda, arguing that the presence of a vigilant legislature and media willing to expose privatization abuse have led to a more honest divestiture process in the country, although various weaknesses as well as the failure of anti-corruption agencies to prosecute or punish leaders for their corrupt privatization behaviour has hardly undermined high-level corruption in public affairs. As in other African countries, and as considered briefly here, where few checks exist on government divestiture decisions, where political leaders seek to divest to favoured clients, and where the big offenders are unlikely to be punished for their illegal behaviour, then privatization activities will be susceptible to corrupt and cronyist practices. DURING THE 1990s, UGANDA ENJOYED a well-deserved reputation as one of Africa's leading economic reformers. The International Monetary Fund (IMF) and the World Bank held Uganda up as a paradigm of economic recovery on the continent and provided it with considerable financial support. Yet in the case of privatization, the transfer of assets in an enterprise from public to private ownership, not only did this prove to be the least successful component of Uganda's otherwise well-performing economic reform programme but it also sullied the public reputation of the Ugandan government, as a result of revelations of corruption and cronyism in the divestiture process. Privatization in Uganda in the 1990s was controlled largely by the incumbent government. International donors provided advice and funds but it was Roger Tangri is a Senior Lecturer in Public Policy and Administration at the Institute of Social Studies, The Hague, The Netherlands. Between 1994 and 1997, he taught at Makerere University, Kampala, Uganda. Andrew Mwenda is a senior reporter with The Monitor newspaper in Kampala. He has just completed an M.A. in Development Studies at the School of Oriental and African Studies, University of London. They wish to thank members of the Control, Conciliation and Conflict theme group at the Afrika-Studiecentrum at Leiden University, participants at the States and Societies seminar at the Institute of Social Studies, and also Nelson Kasfir of Dartmouth College for many helpful comments on an earlier draft of this article.