Opiyo Oloya
16 September 2008
column
Kampala — If it walks like a duck and quacks like a duck, it is probably a duck. That is the only way to look at the current Temangalo land deal scandal involving the people's money at the Uganda's National Social Security Funds (NSSF).
Not all the story of the NSSF's controversial purchase of 400 acres of land from security minister Amama Mbabazi and business partner Amos Nzeyi, for a cool sh11b has been told. All we know is that the full board of directors of NSSF got wind of the sale in January 2008 when Managing Director, David Jamwa, revealed that NSSF was planning to acquire two pieces of land in Temangalo and Gayaza.
We know that at sh24m per acre, this was one of the most expensive land transactions in Uganda involving working people's money. We also know that three independent appraisers put the average value of the land in question at sh16.2m per acre, fully 33 percent less than what was paid by NSSF.
Since the land scandal broke, Ugandans are divided with some arguing that Mbabazi was merely a savvy seller who got a great deal for his property. Others have weighed in, arguing that the whole thing reeks of insider trading. I am firmly in the latter's camp, and not because of personal animus toward Mbabazi, but because of the principle of the thing itself.
Foremost, the seller of the land is a high-ranking government official who should or ought to have known that the sale of the said land was way above the going rate.
It is not that the buyer, namely, the directors at NSSF are so stupid as to buy the land without looking at comparative going rate of land in that particular neighbourhood. No, that is not it. It is that the Minister of Security Amama Mbabazi is part of the government and as such, leaving his salesman credential aside, ought not to have entered into the deal in the first place because of his high-ranking position. The sale violated the first basic principle of fair play similar to that which demands that bosses act prudently when dealing with employees, doctors with patients, teachers with children. Namely, those elevated over other people by virtue of office and power should not take advantage of the situation.
Now, many will argue that Mbabazi has no direct authority over NSSF and, in the case in question, was simply an outsider who saw opportunity to make a little money on the side, and did.
The problem with that argument ignores the tremendous advantage that Mbabazi and, for that matter, any high-ranking government official would have had in selling anything including land to NSSF. In this case, Mbabazi was not an unknown quantity, say a Mr. Kato from Masaka or a Mama Juma from Arua who was selling his or her land to a public institution.
He is a high ranking government official and by virtue of that position alone wielded considerable degree of influence on how the negotiation was going to go. He got the exorbitant amount of people's money not because he had land to sell but because he is who he is, period! Secondly, the impropriety of the land deal is not that the law was broken-that will be determined by Parliament and the courts-but that someone of Mbabazi's stature, with considerable inside information, got a sweetheart deal from a public institution that is supposed to take care of workers' money.
The test for this insider trading is simply this-was it generally public knowledge that NSSF was looking for land to buy or was it known only to the few well-connected? The answer to that question is obvious. Thirdly, while Mbabazi may not have broken any law in the book, he cannot simply shrug away the issue by suggesting that people are out to get him. That is not the issue here.
The issue is that workers are out several billion shillings in a questionable land deal involving a high ranking minister serving within the government charged with safeguarding the interests of the little people. It is called conflict-of-interest. Let me put it ano!ther way. If the Disney Corporation had scouted out Temangalo for a possible Disney Africa theme park, and had chosen to pay sh50m per acre for the lot, I would be the first to congratulate Mbabazi for scoring a beautiful deal with one of the world's richest corporations.
Disney raked in 35 billion dollars last year and can afford to throw money around if it chooses. And even though some might argue that such a deal is possible only because Mbabazi is a high-ranking government official, I would say, "So what?" However, when it comes to NSSF money, the issue changes because the directors of the institution while not directly under Minister Mbabazi's ministry, were in a vulnerable place given that a powerful minister was tendering his land for sale at an exorbitant price well above the going market rate.
The managers presumably could say, "No thanks, we will look elsewhere", but that is too simplistic in a system where influence peddling goes a long way.
Even though there is no suggestion that NSSF directors were pressured into the deal, Mbabazi ought to have known or should have known that his position in government placed NSSF directors in a difficult place, that of having to choose between their loyalty to managing the people's funds and personal connection to the minister.
We now know that their personal relations with the minister won the day, and the workers lost a bundle. Here is my simple advice to Mr. Mbabazi-return the money. The best option is to return the entire money to the NSSF, apologise to the people of Uganda and move on with your life. It is the only honourable thing to do.
In the meantime, all of the NSSF directors who okayed the deal must stand down while the investigation is ongoing. How can anyone seriously believe that after making such a colossal mistake, the funds managers will not go on to make another major mistake?
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