How Corruption Became a Billion-dollar Industry

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BY GEOFFREY SERUGO

Corruption in Uganda, which manifests largely through bribes, nepotism, embezzlement and other illicit financial flows, has severely hindered the provision of public services and caused substantial financial losses.

According to the Inspectorate of Government, Uganda loses approximately Shs 10 trillion annually due to corruption-related activities.

This pervasive vice has eroded trust in the government, diminished infrastructure, caused delays in project implementation, discouraged investments, compromised social service delivery, and, in severe cases, resulted in loss of life.

The Corruption Perceptions Index (CPI) 2023 underscores the gravity of the situation, ranking Uganda 141st out of 180 countries, with a score of only 26. The CPI evaluates the perceived levels of public sector corruption globally, using a scale where zero indicates a highly corrupt state and 100 signifies a very clean one.

This poor ranking highlights the urgent need for robust anti-corruption measures to restore public trust and ensure effective governance. Corruption has been a persistent issue in Uganda since time immemorial. Before colonization, local chiefs who collaborated with British imperialists traded the nation’s future for inducements such as mirrors, clothes and land.

This betrayal led to the subjugation and exploitation of the Ugandan people. During colonization, the British implemented a divide-and-rule policy, rewarding individuals such as Semei Kakungulu for their roles in subjugating other regions of the country.

Similarly, collaborating kingdoms received rewards for their compliance. In his book, The Uganda Protectorate Vol. II, Harry Johnston, a special commissioner to Uganda, revealed that he promised 100 cows to Kitikkiro Apollo Kaggwa for signing the 1900 Uganda Agreement, which later led to Kaggwa’s resignation in 1926.

After Uganda gained independence in 1962, corruption persisted in various forms. The first prime minister was accused of nepotism, favouring people from Lango and Acholi. The nation also faced the gold scandals involving Brigadier General Pierino Okoya and former president Idi Amin. Tragically, Okoya and his wife were murdered in the 1970s, further illustrating the severe consequences of corruption in Uganda’s history.

Following the expulsion of Indians in 1972, Uganda saw a surge in smuggling due to the scarcity of goods. The smuggled items were sold at exorbitant prices. Throughout the 1980s, smuggling and tax evasion were rampant, but large-scale theft from the state was not yet prevalent.

Marlon Agaba, the executive director of the Anti-Corruption Coalition Uganda, explains that significant theft from the state began in the late 1980s and early 1990s when the National Resistance Movement (NRM) came to power.

“We had people coming from the bush awarding themselves houses in Kololo, taking over government firms, ranches, equipment, vehicles, and the exchange of currency that left many people impoverished—all that is considered corruption,” he noted.

Agaba attributes the current pervasive levels of corruption to this period, particularly between 1989 and 1994, coinciding with the implementation of the structural adjustment programme. Before this, the state provided most services, including education and employment.

The shift to a capitalistic system involved deregulation, reduced state services, and privatisation of public parastatals. As a result, many people lost their jobs and resorted to taking what they could in the face of impending uncertainty. They stole vehicles, money and other resources, leading to what Agaba describes as survival-based corruption.

This period marked the beginning of large-scale financial and property theft, laying the groundwork for the widespread corruption observed today. He noted that people had seen they could steal and remain in government, leading to significant corruption. This period saw scandals such as the junk helicopters and the nonexistent valley dams. The president’s failure to take these early instances of corruption seriously allowed the culture to develop unchecked.

PRIOR TO THE PRIVATISATION OF GOVERNMENT AGENCIES

“In the 2000s, corruption escalated to a multibillion scale. We saw scandals like CHOGM, GAVI, and the Global Fund. This was because the president failed to address the problem back in the 1980s. The root of this issue lies in state formation. Uganda’s creation was marred by corruption from the colonizers, the scarcity of the 1970s, and individuals from the bush who, coming from poor backgrounds, sought to take whatever they could. In Kololo, those state houses were taken by generals, who later formalized their ownership by buying them,” Agaba explained.

According to a former Katikkiro of Buganda, who preferred to remain anonymous, the country once had a well-organized transport system with streamlined routes and timetables spread across the nation.

“You could board state-owned buses from one stage to another without disruption; however, all that was phased out,” he noted.

The introduction of boda-bodas and taxis caused commotion in the city. The Observer learned that there used to be a highway code taught in primary schools, instructing learners on how to use roads. This code was abolished, but those who mastered it could drive in any country in the world.

“Prior to privatisation, Kampala was regarded as one of the fastest and best-organized cities in East and Central Africa; however, it has turned into an executive slum. Ugandans are building arcades all over; every part of the city is a residential area; people are building in swamps. The Kampala Capital City Authority (KCCA), the National Planning Authority (NPA), and the National Environment Management Authority (NEMA) are looking on as people fill swamps to raise their buildings,” he said.

He noted that Lubigi is a swamp; however, it has been encroached on and is now full of houses. Initially, it stretched from right behind Kira Road police station through the former National Unity Platform (NUP) headquarters in Kisota, but it has since been blocked by houses.

Swamp reclamation is linked to corruption tendencies, where government planners are bribed to allow the erection of buildings in drainage channels. These practices have resulted in flooding and heavy traffic jams in the city.

“Gone are the days when no one could build or raise a house without approval from district planning committees because they knew which structures or buildings were meant to be in any given area of the city. You wouldn’t see residential buildings in an industrial area,” he said.

DECENT STAFF HOUSING

A former civil servant, who preferred not to be named, said that National Housing was initially introduced to assess and build decent and affordable houses for Ugandans but has failed in its mission.

“Uganda is as good as a slum because state planners are sleeping on the job,” he remarked.

The Observer established that government institutions and agencies, such as the judiciary and Kampala Capital City Authority (KCCA), used to provide housing for their staff. The permanent secretary of any given ministry would know where to stay on the day of their appointment. However, these houses were privatized, and the sitting tenants were given priority to purchase them. Unfortunately, many could not afford the houses due to their salaries, and they were instead bought by technocrats within the government.

“The houses were sold off; however, the salaries of civil servants have not changed much. Given the commercialization of the education system and the introduction of Universal Primary Education (UPE), civil servants are struggling to meet the costs of decent housing, basic needs, and quality education for their children,” he asserted.

He further explained, “All commissioners, permanent secretaries, and top-notch public servants have their children attending prestigious schools like Gayaza High School, King’s College Budo, and others. Where do you expect them to get money from? You will find that they have to offer free medical and other services at a cost and swindle government money to fund their needs.”

Another government technocrat recalled a time when they attended the same schools as ministers’ children.

“We were all going to Shimon, Kololo SS, Buganda Road primary school, and Nakasero. We received quality education without discrimination. We used to get fare-free Uganda Transport Company (UTC) transport tickets for those of us who stayed in Kampala. You would board in the morning and evening, and learners from upcountry would pay only half of the transport fares.”

He mentioned that he lived with his brother at Bugolobi flats for a very long time, and after completing school, he was offered a job at Makerere University, where he was provided with housing as part of his employment benefits. He contrasted this with the current state of Uganda, noting, “Unlike other countries, which overtax their citizens, Uganda offers nothing. All free services, from education to health, come at a certain cost.”

THE BIGGEST CORRUPTION SCANDALS CHOGM 2007

In 2007, Uganda hosted the Commonwealth Heads of Government Meeting (CHOGM), the twentieth meeting of the heads of government of the Commonwealth of Nations, held between November 23 and November 25, 2007.

In 2011, several ministers, including former minister for Works and Transport John Byabagambi, John Nasasira, Mwesigwa Rukutana, Isaac Musumba, former vice president Gilbert Bukenya, and former prime minister Amama Mbabazi, were blamed for the CHOGM mishaps.

According to the Auditor General, although parliament allocated Shs 270 billion for the meeting, Shs 370 billion was spent, and the figures jumped to Shs 500 billion following the grilling of the implicated officials. The funds were spent on irregular repairs, the construction of roads, and the renovation of the airport.

Bukenya, the then chairman of the Cabinet Subcommittee on CHOGM, was accused of influence peddling in the procurement of cars worth Shs 19 billion. He was later acquitted.

GLOBAL FUND SCANDAL 2006

The Global Fund scandal in 2006 emerged as one of the most significant scams in Uganda. During investigations, it was revealed that $10 million was reportedly missing, although some sources claimed the figure was as high as $37 million. However, The Observer could not verify this higher amount.

The funds were intended for the procurement of malaria, HIV/Aids and tuberculosis drugs. At the center of the scandal were former minister of Health, now minister of Security, Jim Muhwezi, and former state ministers for Health, Mike Mukula and Alex Kamugisha. Several other individuals, including Fred Kavuma the former manager of Production at Uganda Television Teddy Cheeye of the President’s Office were also implicated.

The core of the scandal involved a project management unit through which funds were stolen from 400 nonexistent private organizations. This unit also offered inflated salaries to 15 professional and 20 support staff and undisclosed allowances.

TEMANGALO LAND SCANDAL

In 2008, reports surfaced that the National Social Security Fund (NSSF) paid former prime minister Amama Mbabazi and city businessman Amos Nzeyi Shs 11 billion for 414 acres of land in Temangalo. The price per acre was Shs 24 million. This deal reportedly caused significant losses for the fund, as the prices were much higher than the market value.

Parliament revealed that Mbabazi, leveraging his position as the security minister, influenced the fund to purchase the land.

BICYCLES FOR LC CHAIRMEN

In 2011, the ministry of Local Government contracted Amman Industrial Tool and Equipment Ltd., a local firm, to supply 70,000 bicycles for Local Council (LC) chairpersons. Despite the company being paid $1.7 million, not a single bicycle was delivered.

MICROFINANCE SUPPORT CENTRE SCANDAL 2011

In a span of just three months, Shs 60 billion went missing from the Microfinance Support Centre. The scandal led to the suspension of several high-profile figures, including former vice president Specioza Wandira Kazibwe, who was then the chairperson of the board of directors. Other suspended board members included Charles Ogol, MP Tim Lwanga, and Twino Musinguzi.

PENSION FUND HEIST

Between February and October 2012, at least Shs 169 billion intended to pay 1,018 former East African Community workers was stolen. The theft, facilitated through the Cairo International Bank, involved complicity from officials in the ministries of Public Service and Finance.

THE JUNK HELICOPTERS SCANDAL

In 1997, Uganda entered into a contract with Consolidated Sales Corporation (CSC) to supply four Mi-24 gunship helicopters, each costing $1.5 million. The company, registered in the British Virgin Islands, was represented by Ugandan businessman Emma Katto.

Upon inspection, two of the delivered helicopters were found to be worthless, with rusted pipes and worn-out tires. These helicopters, deemed junk, were grounded at Entebbe International Airport. Reports indicate that CSC offered Gen. Salim Saleh a commission of $800,000, resulting in an $8 million loss for the government.

KARAMOJA IRON SHEETS SCANDAL

In January 2023, Mary Goretti Kitutu, the former minister for Karamoja Affairs and Woman MP for Manafwa, directed the release of over 12,200 pre-painted iron sheets labelled “Office of the Prime Minister” to various ministers and legislators.

The list of beneficiaries includes high-profile figures such as Vice President Jessica Alupo, Speaker of Parliament Anita Among, Prime Minister Robinah Nabbanja, Minister for Lands Judith Nabakooba, and Minister for Ethics and Integrity Rose Lilly Akello.

Other recipients were State Minister for Primary Education Moriku Kaducu, former Speaker Rebecca Kadaga, State Minister for Defence Jacob Markson Oboth, Third Deputy Prime Minister Rukia Nakadama, Finance Minister Matia Kasaija, and several others including government Chief Whip Obua Denis Hanson, State Minister for Planning Amos Lugoloobi, and State Minister for Karamoja Agnes Nandutu.

In response to public outcry, Nabakooba, Nandutu, Kasaija, and Among returned their shares to the Office of the Prime Minister (OPM) stores in Namannve. Curiously, although each iron sheet was procured for Shs 71,000, ministers were permitted to pay Shs 68,000 as a replacement for the iron sheets they took.

Despite numerous beneficiaries, only Kitutu, her brother Michael Kitutu Naboya, Nandutu, and Lugoloobi have faced charges in court. Kitutu and her brother are facing six counts, including loss of public property, corruption, receiving stolen property, and conspiracy to defraud.

Nandutu has been charged with dealing with suspect property following the diversion of 2,000 iron sheets meant for the Karachunas. Lugoloobi is battling two charges of dealing with suspect property after reportedly using 700 pieces of pre-painted iron sheets to roof shelters for his animals.

SHS 1.7 BILLION ALLOCATION TO COMMISSIONERS OF PARLIAMENT

Leaked resolutions from a Parliamentary Commission meeting held in May 2022 revealed a controversial decision to award the former leader of the opposition, Mathias Mpuuga, a one-off service award of Shs 500 million. Additionally, Shs 400 million was allocated to each of the three commissioners from the NRM: Solomon Silwany, Prossy Akampurira and Esther Afoyochan.

This service award sparked criticism and led to the suspension of Mathias Mpuuga, vice president of the National Unity Platform (NUP) for Buganda, who was accused of participating in the meeting and approving the allocation of Shs 1.7 billion. Despite his suspension, Mpuuga maintains that the allocation was lawful and has stated that he will not leave the party.

Reports indicate that the commissioners also allocated themselves Shs 48 million in monthly allowances.

EFFORTS TO CURB CORRUPTION

In December 2018, President Yoweri Museveni established the State House Anti-Corruption Unit (SHACU) to investigate corruption-related offences within the central government, local governments, and the Private Sector. Since its inception, SHACU has conducted 500 operations, recovered Shs 55.4 billion, apprehended and charged 588 suspects, and secured 94 convictions.

In December 2021, President Museveni launched the Lifestyle Audit Campaign as an anti-corruption measure. However, the enforcement of the Lifestyle Audit has faced challenges due to the lack of a legal framework.

Museveni emphasized that the fight against corruption would be significantly easier if ordinary citizens and local leaders actively participated. He expressed disappointment that local leadership often either overlooks or participates in the theft of project funds meant for their communities.

Museveni also noted that, despite the rampant corruption, Uganda benefits somewhat as the stolen funds are often invested locally in ventures like five-star hotels. He warned that with the lifestyle audit, thieves might start transferring their ill-gotten wealth abroad, making it harder to track and recover, ultimately resulting in a greater loss for the country.

geofreyserugo1992@gmail.com

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