Uganda: Covid-19 Money and Gen. Museveni’s Mafia Economy

Gen. Museveni
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Uganda's top kleptocrat, Gen. Museveni. Photo: Facebook. 

[The View From Uganda]

There are buildings sprouting up all over Kampala, the real estate industry is booming for all to see. This, on surface, has turned the rent, mortgages and even home owning into a buyer’s market.  A good thing, if we ignore the devil in the details. 

This explosion in real estate business began two years, after the lockdown was announced.  At the time, dictator Gen. Yoweri Museveni asked Ugandans to join him in the fight against what was then called “the novel Coronavirus.” Ugandans and other domestic agencies donated generously as dozens of investors, private sector players, institutions and individuals rose to Gen. Museveni’s clarion call to contribute towards the fight against the coronavirus (Covid-19) pandemic.

The Government budget for the Covid-19 response was about $77.8 million, Gen. Museveni said. 

He was to raise this money and beyond as the wheels of his kleptocracy began to turn a handsome profit. Seventy-five investors—both domestic and foreign—other private sector players, institutions and individuals, donated vehicles, cash, personal protective equipment and food and non-food supplies. The Intergovernmental Authority on Development (IGAD), the regional body that includes several countries, including Uganda, donated $ 100,000 to Uganda to fight the spread of the novel coronavirus.  

Then, the big one: The World Bank approved a $300 million to support operations for Uganda to boost the junta’s capacity to prevent, detect and treat the coronavirus. 

All in all, over 4 trillion shillings, or $ 1.1 billion was used in Uganda’s response to the Covid-19 pandemic. 

Yet Ugandans are left asking where the money went. That’s when the real estate bubble started growing and growing. 

Then, this year, after the dust settled and the economy was reopened, the Ministry of Finance released a performance report on Uganda’s economy which indicated that the government collected less revenue than it projected. Since the current financial year started in July 2021, Uganda Revenue Authority (URA) has been every month failing to achieve the revenue collection target. 

For the last six months, a revenue collection shortfall of about sh 881 billion, or $ 251 million, has been registered. The government is getting poorer, yet Gen. Museveni and his cabal are getting richer. 

With all the construction going on in the context where Ugandans have no liquidity, as evidenced by many parents being unable to pay school fees when schools reopened last month, where is money coming from? Who has this money, if the government and the people do not have it? 

Here’s the answer: The Uganda Financial Intelligence Authority (FIA), which is a government agency established by parliament to monitor, investigate, and prevent money laundering in the country, has revealed that it is investigating 11,000 financial transactions in Uganda over illicit money transfers. These questionable transactions were made over the last two years and have a financial value of far over shs 1.5 trillion, or $ 426.5 million, Sydney Asubo, the executive director FIA said. “These are the funds that are the subject of interest from us,” Asubo said.

Money laundering is a principal financial function of any mafia; Uganda’s mafia, led by Gen. Museveni, is no exception. The system of washing money involves three steps: The first involves introducing cash into the financial system by some means ("placement"); the second involves carrying out complex financial transactions to camouflage the illegal source of the cash ("layering"); and finally, there is “integration”. 

The “dirty” money is now absorbed into the economy, for instance via real estate. 

It is clear that the Covid-19 relief money was “rinsed”.  Again, according to a recent Transparency International Report (2021), Uganda slipped three places to the 144th position in the Global Corruption Ranking. This dubious position is out of 180 ranked countries.

Much of the junta’s dirty money is laundered to prop Gen. Museveni up and keep his band of wolves fed, using widespread patronage. Raphael Magyezi, the Minister of Local Government, recently warned locals that governments are sinking in corruption at the districts.He said the corruption is centered on the power to recruit workers and oversee land management at district level. 

In Gen. Museveni’s top-down, bottom-up corruption model, Gen. Museveni steals any money the government gets using the Bank of Uganda as his personal piggy bank and URA as his financial conveyor belt. Then, to seal the mouths of poverty-stricken Ugandans with crumbs from his high table he fills district jobs with his cronies and then parcels out land management deals to those who genuflect before him. 

Those who refuse to bow, the majority that voted for everybody else but Gen. Museveni, are subjected to punitive taxes and abject poverty. 

We must always remember that Gen. Museveni has only managed to stay in power thanks to the medieval use of brute force and the primitive accumulation of wealth sustained by an elephantine patronage system. 

Columnist Matogo can be reached via [email protected]

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