On Tuesday May 12, 2021 Gen Yoweri Kaguta Museveni, will be sworn in to serve his sixth term of office, to make a record 40 years as President of Uganda.
Mr Museveni, 76, will take charge of a heavily indebted economy and a corrupt public service that has failed to provide gainful employment for the majority youth.
With American and European sanctions hanging around his neck not much is expected from Mr Museveni who has failed to accept internationally recognized democratic standards that has resulted into gross human rights abuses against his opponents and the media.
But there are two “personal” projects he wants to accomplish albeit numerous difficulties. Those projects are also his dreams.
One, Mr Museveni would want to leave office after uniting East Africa as one single state, which his mentor, Julius Kambarage Nyerere, Tanzania’s founding leader, failed to achieve.
Secondly, Mr Museveni wishes to retire a very happy man after getting Uganda’s oil out of the ground and pumping it to the international market.
Those two issues are giving Museveni sleepless nights. But he faces very turbulent days ahead to achieve his dreams.
Why? The Museveni regime is increasingly struggling to build legitimacy among the youth (75 percent of Uganda’s 45 million people are under the age of 30), who want decent public services and employment rather than distant stories about how the regime brought an end to war when it came to power in 1986.
Museveni is Africa’s third longest serving head of State and doyen of the continent’s rebel leaders, having seized power in January 1986 at the end of a 15-year campaign of insurgency, begun in 1971.
Museveni is not merely the most durable among his peers in Africa’s Great Lakes region, but has also established the most influential authoritarian model in the region, all the while portraying himself as an indispensable partner to the United Nations, United States and the European Union in stabilizing one of the most fragile parts of the world.
However, the former rebel leader starts his sixth term of office in a country so indebted to the international community that lenders have started running away.
He is also taking charge of a country full of hungry and angry youth desperately waiting for an opportune moment to pounce on him.
Unemployed youth are increasing. In 2019 unemployment rate was 1.84 percent, a 0.09% increase from 2018. And in 2020, the unemployment rate was at 1.92 percent. Every year about 400,000 young Ugandans come onto the job market to compete for approximately 52,000 available formal jobs each year. Today, with covid 19 ravaging every economy the situation is expected to worsen.
Instead Mr Museveni has responded to this catastrophe with mere handouts and a disorderly industrialization campaign. Between 2012 and 2017 the government invested over 265 billion shillings (about US$100 million) in 116,169 youth group projects under the “youth livelihood programme”. But only 1.3% of those granted loans have been able to pay them back in full.
During campaigns for the January 14 presidential elections, Museveni introduced the Emyooga programme, which is intended to encourage people to save and start their own income-generating activities.
The programme aims at transforming the 68% of Ugandans who are currently at subsistence level to commercial orientation through savings. So far it has been rolled out to more than 4.3 million Ugandans. But few understand nor appreciate the savings programme. The little money government has invested in the programme has already been stolen.
Now, Museveni says they are introducing another programme called the parish model, after he is sworn in. According to Ministry of Finance, 460 billion shillings has been allocated as a revolving fund under the programme.
Museveni has promised to create more jobs for youth by also investing more money in agro-processing with about 1.4 trillion shillings.
He plans to spend one trillion as a stimulus package through Uganda Development Bank to caution small and medium Enterprises in addition to 500 billion shillings through Uganda Development Corporation. But many SMEs say they have been denied the promised financial assistance.
All this further incites the restless young people instead of calming them down. And they are bound to continue threatening Museveni and his National Resistance Movement government.
As a quick way out, some youths have decided to leave the country to work as house maids and regular guards in the Middle East countries. But even there most have become slaves and others have returned home in coffins.
Museveni had hoped to contain the situation by rolling out oil production and reclaiming the East African market to provide more money-making opportunities.
But the silver lining in both areas is still grim.
Three months after the January 14 presidential polls President Museveni and his Tanzanian counterpart, Samia Suluhu Hassan, signed three key agreements to kick off the construction of the $3.55 billion 1,445 kilometer electrically heated East African Crude Oil Pipeline (EACOP) to run from the oil wells in Hoima, western Uganda to Tanzania’s Indian Ocean Port of Tanga.
The oil pipeline was supposed to cause excitement amongst Ugandans who were heavily polarized by the elections that left at least 60 dead as a result of riots on November 18 and 19 during campaigns and hundreds of opposition youths kidnapped, tortured, maimed and incarcerated in safe houses by security forces.
But three weeks after the signing ceremony, Total E&P, the majority shareholder of the oil pipeline, is failing to raise the required financing. The shareholders are Total (62 per cent), Uganda and Tanzania (15 per cent each, held through the countries’ oil companies) and China National Offshore Oil Corporation (eight percent).
According to French media three French banks – BNP Paribas, Société Générale and Crédit Agricole – which have previously bankrolled Total’s oil and gas projects – had opted not to provide financing for Eacop.
Milan-based UniCredit, one of the targeted lenders for pipeline, says its policies bar it from financing projects that pose environmental risks. Also Swiss lender Credit Suisse and UK’s Barclays Plc have deserted the project.
It is understood that some of the European, Asian and American banks that were initially lined up as potential financiers of the project are waiting for independent studies of the pipeline to make a decision.
It is understood that the pipeline traverses sensitive ecological areas, and because of this, activists term it an environmental risk that will produce 34.3 million tonnes of carbon dioxide emissions per year.
Standard Bank Group, the adviser to EACOP, says it will not compromise on the environmental, social and governance standards that the oil pipeline is expected to follow.
Further, Uganda National Oil Company and Tanzania Petroleum Development Corporation are yet to find $130 million to pay for their 15 percent each as equity in EACOP.
Museveni was in past also tossed up and down when he demanded that oil be refined internally before being exported. He was shunned by the prospective investors until he later compromised to having both the refinery and the pipeline.
But it appears the international community is now tactically and diplomatically isolating Mr Museveni, who has re-aligned his interests to China and Russia, by denying him financing for his oil dream.
Therefore how Uganda will secure her portion of financing is another ordeal considering that the country is heavily indebted to the international community.
Uganda’s total public debt amounted to $15.27 billion at the end of June 2020, up from $12.55 billion a year earlier. Debt continued to surge and by December 2020 it had shot to $18 billion, a 35% rise from a year earlier. In simple terms the country’s debt is slightly beyond 50% of GDP.
According to the Ministry of Finance budget details, Uganda’s debt will peak at 51.4% percent by end of June 2021.
Museveni has been borrowing heavily from China over the last decade to finance infrastructure projects and shore up political support.
Out of Uganda’s budget of 44.7 trillion shillings, government will be collecting 22 trillion shillings as revenue. But of the 22 trillion 15 trillion is for debt financing. And the remaining 7 trillion shillings will largely go to paying salaries and allowances.
This means Uganda will have to continue borrowing. But fears are that external financing will dwindle since Uganda will no longer be viable for concessional loans having passed the 50% mark.
Therefore, government has resorted to borrowing non-concessional loans internally through selling of government treasury bills and bonds, which is expected to drive interest rates on local money higher hence denying credit to local businesses. But even for domestic borrowing, government is delaying repayment.
And since government is not helping local businesses whether by waving some taxes or protecting them from loan shacks many have folded and continue to wind up. This distress is expected to backfire.
In addition, Uganda’s indebtedness is expected to worsen if the country fails to reclaim her traditional export markets.
Uganda’s export receipts from Rwanda have fallen to an all-time low, demonstrating the impact that the closure of the country’s border has had on trade between the two countries.
In the period between August 2019 and August 2020, cumulative export earnings from Rwanda, according to Bank of Uganda, fell to just $5.1m from $131.8m in the same period between August 2018 and August 2019.
Museveni is yet to embrace Kagame’s offer of an olive branch.
For more than three years now, Kenya has been rejecting Ugandan commodities on account of low quality standards and safety risks. The commodities include; poultry products, beef and beef products, sugar, fruit juices and pharmaceuticals.
In just a year, Uganda lost sh1.7trillion as a result of Kenya’s blockade on the former’s milk exports. Kenya had also banned maize from Uganda and Tanzania because of the cancer-causing aflatoxin on the maize. However, Museveni intervened and Kenya agreed to buy maize from Uganda on condition that it was properly handled and tested for aflatoxin. Kenya also allowed in Uganda’s sugar.
In South Sudan, unidentified gunmen continue to attack Uganda’s cargo trucks, which has created fear amongst Ugandan traders there. Many are likely to abandon the Sudanese market.
Not moving together
Museven is also having trouble convincing his other East African peers to begin moving together and speaking with one voice. His big boy syndrome that previously intimidated his peers has since been compromised.
For instance, Kenyatta has unilaterally signed trade agreements with the EU, UK and the United States, having abandon negotiations under the East African Community framework.
In addition, Kenyatta has been trotting all over East Africa negotiating bilateral trade deals with the DRC, Somalia, Ethiopia and Tanzania.
President Paul Kagame has also been independently mending relations with leaders of Burundi, DRC and Tanzania to open up business opportunities for his country.
This means that Museveni’s project of East African federation may diplomatically be ignored by other regional leaders that may not see sense in the urgency to form a political union.
What next for Museveni?
Museveni realizes that continued internal dissent that could evolve into a mass uprising triggered by unemployed youth and a possible external aggression may require fire power to protect himself.
This is why since 2015, Museveni has increased budget spending for defence and security. In the next financial year, Museveni plans to spend close to seven trillion shillings on defence.
In March 2020, the Ministry of Defence told Parliament that they intended to use up to 53 per cent of its budget on classified expenditure and then up to 1.55 trillion shillings on defence equipment.
Previously the military spent close to four trillion shillings on classified expenditure. Defence Minister Adolf Mwesige said they were to invest in “acquisition of military equipment and research and development.”
Media reports indicate that Museveni had procured 100 armored vehicles $110m. Turkish defense company Otokar said that it had signed a contract to supply 100 of its Arma 8×8 and Cobra II armored vehicle to an African country which it declined to name.
According to Stockholm International Peace Research Institute, in 2019 Uganda was expected to receive 45 South African-manufactured Mamba APCs for assembly at the Armoured Vehicle Manufacturing and Assembly Facility in Jinja.
In 2018, the UPDF received four 850 Military Patrol Boats from local firm Twiga Services and Logistics under a contract from Impala Services and Logistics, as it sought to modernize its marine patrol equipment. Uganda also ordered for one DA42 surveillance light aircraft.
Uganda is said to be the third largest purchaser of military equipment in Africa after Egypt and Algeria.
The big question is; will fire power shield Museveni’s government in the next five years?
