18 December 2018

Uganda: Corruption Corrupts, Leads to Despondency

opinion

I believe one of the biggest crimes one can ever commit on this planet is taking away what doesn't belong to them and subjugating the poor into despondency.

In reading about recent allegations of corruption scandals in Bank of Uganda (BoU), it painfully hurts to see how ordinary people continue to suffer despite their sacrifice, hard work and hope. Who should a poor person turn to when they hear allegations of corruption in their own government and their leaders aren't truthful about anything? Corruption has penetrated the most important government institutions in Uganda, including now our central bank, key government ministries and others. Imagine hearing that your central bank is corrupt, you may as well not believe in the money that the authority prints and authorises as legal tender.

The investigation into allegations of corruption at the central bank has tremendously exposed the weaknesses in our institutions of government. A central bank is a key institution of government that has to have the highest level of integrity and zero tolerance for corruption. Financial markets and intermediaries, business investments (both local and foreign direct investments), the consumption sector and the aggregate economy, develop confidence and trust in the economy based on a sound monetary system. Disturbances and corruption scandals that threaten the ability of a monetary authority from conducting sound monetary policy have far greater negative impacts on the stability of the economy.

The clean-up of the mess at BoU must be taken seriously if the goal is to restore public trust and confidence in this critical institution. Two things have to happen.

First, it is about time that the old-fashion monetary policy-makers at the top, who have created this mess, are removed and replaced with dynamic and highly skilled technical experts who have the knowledge and the ability to bring meaningful reforms and to steer monetary policy to a different direction.

Second, government needs to quickly form a technical, serious and incorruptible team of experts who should revise the rules and regulations regarding bank supervision that meet international standards such as those advocated for by the Bank of International Settlements-Basel Committee on Bank Supervision. We cannot continue to use the same rules and regulations for bank supervision that were written in the 1900s and somehow pretend that they will work in the 21st Century dynamic global economic environment.

The problem rocking BoU is not only corruption but a general lack of sound leadership at the top. The inconsistencies in the statements made by the top managers of BoU during parliamentary inquiries not only prove their incompetence at the job but lack of coordination between different departments within the institution.

We will soon hear our leaders blaming external forces for our own mess. It is true that developed countries and international organisations that give foreign aid to corrupt African governments and do not partner with them to put in place transparent mechanisms for implementation of projects are either knowingly enabling corruption or do believe in encouraging dependency of citizens of poor countries. In my opinion, they are equally culpable for the corruption mess and the general lack of transparency on the African continent.

However, the truth is that the current problem in Uganda is not about external forces inserting their influence, but a war that has been waged on Ugandans by untruthful, corrupt, incompetent and unbenevolent leaders at the helm of key institutions of government.

Recently, I wrote an article that ran in the Observer newspaper, where I indicated that nobody argues that exploitation and plunder of African natural resources during periods of colonialism and economic imperialism were good ideas. Today's African leaders seem to make this argument more frequently to excuse themselves from their missteps.

The question is, why do the same African leaders continue to partner with contemporary Chinese imperialists, who have no interest in African development but exploitation and plunder of its key natural resources? The stupidest partnerships are those in which African governments award project contracts to Chinese corporations and simultaneously beg for financing from China. That will come back home to roost someday.

To make matters worse, in many African countries, the legislature has superficial information regarding deals their governments make with foreign governments and companies. As I have always argued, there is no distinction between corrupt leaders at the helm of key government institutions, who steal from our own country and stash funds in foreign bank accounts and economic imperialists who left some 60 years ago.

Ojede is a professor of economics at Texas State University.

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