Connect with us

Politics

The Investors That Stole Our Future: Uganda’s Illusory Fiscal Policies

10 min read.

With Uganda’s history of poor public administration and disastrous debt management, corruption, and increasing civil unrest and repression, what was the basis of the IMF’s optimism? The organisation has a permanent office in the Ministry of Finance and its headquarters sends multiple missions every year to monitor economic progress. To solve Uganda’s perennial economic distress, citizens must first understand the IMF’s mission in Uganda.

Published

on

The Investors That Stole Our Future: Uganda’s Illusory Fiscal Policies
Download PDFPrint Article

There was a time when the root causes of Uganda’s economic failure were so mercurial that one could never quite locate them. The evidence sometimes suggested incompetence; other times corruption; often a combination of the two. Examining the fiscal policy at a granular level reveals the method in the madness: there is now incontrovertible proof that incompetence is an essential part of – and is often allowed to flourish in order to facilitate – grand corruption. We are not talking about small players operating out of cramped government offices but about the country’s top leadership and their foreign and domestic partners.

In an old story, President Mobutu Sese Seko is said to have approached donors for assistance with Zaïre’s out-of-control external debt. By that time, his history of raiding the treasury was widely known and the donors facetiously suggested he lend the government the money they needed out of his personal resources. He is said to have answered, “I can’t trust them to pay me back.” (This is only funny when it is not happening in your own country.)

Uganda is in a similar situation. Unsustainable debt is rising in direct proportion to the wealth of the top leaders. When payment of the over UGX 3 trillion balance on over 20 loans (Table 1 below) commences in 2020, the country’s debt-to-revenue ratio will jump from 44% to 65%. In 2015, when Uganda’s debt repayments stood at 38% of GDP, between 26% and 36% of the population was undernourished. Undernourishment has made steady progress, rising by 1% a year between 2006 and 2011 and accelerating to two percentage points plus every year from 2011 (World Bank). Nothing has happened since 2016 to ensure undernourishment does not increase; in fact, it rose from 39% in 2015 to 41% in 2016. In contrast, world undernourishment fell 14 percentage points over the same period and is on a downward trend except for a short rise in 2015-2016.

Despite trends in the increasingly unsustainable loan portfolio, on the one hand, and erratic public administration on the other, the IMF has assessed Uganda as a low risk for external debt distress. It says the risk was not increased by significant risks stemming from domestic public and/or private external debt.

As a justification for further borrowing, President Yoweri Museveni and Ministry of Finance officials claim that the debt-to -GDP ratio is within the historically safe limit of under 50%. The Auditor General has been of the contrary view, saying debt levels are “unfavourable when debt payment is compared to national revenue collected which is the highest in the region at 54%.”

That argument has been overtaken by events. Current International Monetary Fund (IMF) projections show that debt-to-GDP will hit 49.5% in 2021. Furthermore, it is guaranteed to deteriorate as the outstanding balances on the loans will increase as the shilling continues to slide against the dollar and as further non-concessional (high-interest) loans are taken in the domestic market, such as the $104 million to be spent on security cameras and loans for ad hoc investments like the revival of Uganda Airlines at $388 million.

Table 1: Uganda's Unsustainable Debt

Table 1: Uganda’s Unsustainable Debt

Despite trends in the increasingly unsustainable loan portfolio, on the one hand, and erratic public administration on the other, the IMF has assessed Uganda as a low risk for external debt distress. It says the risk was not increased by significant risks stemming from domestic public and/or private external debt. (Debt Sustainability Analysis).

They went on to claim, “Uganda’s economic performance remains strong, but has moderated in recent years.” Further, “Government finances remain on a sound footing…” The only suggestion in the Debt Sustainability Analysis (DSA) that all may not be well (inserted no doubt as a basis for claims to due diligence to be made after the economy crashes) was “… though expenditure composition can be of concern.” Expenditure composition includes items not part of the National Development Plan e.g. a national airline and a network of security cameras. In the same year, the Auditor General pointed out a serious barrier to attaining development targets: loans were performing poorly. He could not have been clearer when he warned that interest payments were becoming unsustainable (Auditor General 2016 p. 14).

“Several loans appeared to be performing poorly, with some nearing expiry; while others reached the closing date without fully disbursing. As at 30th June 2016, committed but un-disbursed debt stood at UGX 18.1 trillion [approximately US$5 billion]. Such low levels of performance undermine the attainment of planned development targets and render commitment charges of UGX20.9 billion (US$5.9 million) paid in respect of undisbursed funds nugatory [i.e. wasteful or of no value] (Auditor General 2016, p.72).” In other words, borrowed funds were not being put to use.

The problem has persisted in 2017 and 2018. This gives the lie to the IMF’s DSA 2016 finding that Uganda is scaling up infrastructure for future economic growth. The IMF admitted a risk to growth goals would be “failure to realize the envisaged growth dividend from the increased investment is a key risk”. What they did not mention was that the contingency had already materialised. A 2015 special audit of the Uganda Support to Municipal Structure Development (USMID) project (financed with a $150 million loan) showed under-utilisation of loan funds accompanied by incomplete projects requiring funds. The risk is that idle balances will eventually be diverted, as has happened in Hoima Municipal Council.

We are not far from a full admission that Uganda is in debt distress although there are still the persistent and irrelevant claims of on-target economic growth (of 6.3%). Irrelevant because it was during the past periods of alleged high economic growth that universal primary education was degraded to the point where the drop-out rate was 60%.

The current situation is that 95% of the UGX100 billion disbursed under USMID for municipal development and capacity building grants remains idle (Auditor General 2018, p. 5). Understaffing in specialised technical areas is one reason municipalities are unable to utilise infrastructural development loans. (Understaffing is a result of a cap on recruitment enforced by the IMF.) Yet for the past three years the Treasury has only been able to release UGX417 billion of the UGX800 billion required annually to maintain the feeder roads so crucial to farmers (Auditor General 2017, p. 33).

Uganda’s fiscal policy is ‘a moving target’

In 2019 the IMF is leaning towards the Auditor General’s point of view. They now say that rising interest payments reduce resources available for education and health (human development). Their latest assessment states, “The current ratio of interest payments to revenue is comparable to what countries with high risk or in debt distress typically face.”

We are not far from a full admission that Uganda is in debt distress although there are still the persistent and irrelevant claims of on-target economic growth (of 6.3%). Irrelevant because it was during the past periods of alleged high economic growth that universal primary education was degraded to the point where the drop-out rate was 60%. During high economic growth, inequality, and especially rural-urban equality, deepened. High economic growth preceded the current phase of social unrest. According to the IMF, “In each of the last three macroeconomic assessments of Uganda, the projected debt path was revised upwards. Having a clear direction for fiscal policy would help budget planning and execution.”

Nevertheless, the IMF continues to claim that the risk of debt distress remains low, provided domestic revenue can be mobilised. The set target under the National Development Plan II and medium-term Sustainable National Development Plan is to increase the tax-to-GDP ratio from 14% to 16% by 2019/20. If this cannot be achieved through job creation, it can only translate into more taxes and austerity measures.

The question arises: With Uganda’s history of poor public administration and disastrous debt management, corruption, and increasing civil unrest and repression, what was the basis of the IMF’s optimism? The organisation has a permanent office in the Ministry of Finance and its headquarters sends multiple missions every year to monitor economic progress. To solve Uganda’s perennial economic distress, citizens must first understand the IMF’s mission in Uganda.

In any event, the grace period on over 20 loans expires in 2020 and debt is now of concern. On top of expenditure on projects in the Public Investment Plan, there is significant expenditure arising from unplanned projects, such as the revival of Uganda Airlines, requiring $380 million. Lubowa International Hospital, initially planned as a public-private partnership with Finasi (a commodities trader) it eventually became a contract for Finasi to build and operate a hospital funded 100% by the Government of Uganda.

Incompetence in industrialisation and job creation

A recent round of commissioning of factories and other infrastructure has proven that infrastructural development is a chimera. The Isimba Dam launched in March may generate but does not transmit power. Together with Karuma, to be launched later in the year, it cannot do so without further expenditure of $3.5 billion to extend the grid. The Nile Bridge had to undergo major remedial work owing to poor construction only days after commissioning. The president’s electioneering took in at least one factory many years old and employing a miniscule number of Ugandans. Nile Agro Industries Ltd has been producing soap, wheat flour, cooking oil, bottled water, lint bales, and fortification and industrial plastics since 1999. Yet it was commissioned and “launched” on 7th May 2019.

The Soroti Fruit Factory was founded in 2014 and funded by the government and a grant of $7.4 million from Korea. Last year’s audit listed the factory as un-operational after accumulated public investment of UGX 13,353,129,943. The factory was commissioned by the President on 13th April 2019. It was reportedly closed on 10th May owing to a lack of operating capital for fruit from about 1,000 farmers and salaries for the 123 Ugandan employees. The government’s investment arm, Uganda Development Corporation, has been advised annually for at least three years by the Auditor General against making investments without feasibility studies but in Soroti it was the usual case of ignoring professional advice and pandering to the president’s whims.

“The corporation incurred expenditure amounting to Shs.9,000,026,869 during the year in undertaking industrial development investments in the areas of fruits in Luwero, Soroti and processing in Kabale and Kisoro. However, the Corporation did not undertake investment strategic studies assessment prior to undertaking investments for purposes of assessing the marketability and commercial viability of the final products processed from fruits like mangoes, oranges and tea plantations. The investment may not achieve anticipated results.” (my emphasis) (Auditor General 2016 p. 519)

Apart from Soroti Fruit Factory, other warnings have related to Kampala Industrial and Business Park, Namanve, where UGX 1,000,000,000 for a feasibility study was diverted. Over UGX 131 billion is outstanding on loans for four industrial parks, including Namanve. Although National Information Technology Authority-Uganda (NITA-U) carried out a feasibility study for Commercialisation of the National Data Transmission Backbone Infrastructure (NBI) and E-government Infrastructure (EGI), it did not factor in the costs of its maintenance. “As a result, it was difficult to assess the economic sense of the project as Management lacked sufficient benchmark to assess the bid proposals on contract aspects such as the cost of maintaining the NBI, revenue sharing ratios and price of internet services.” (Auditor General, 2017, p. 53)

It is indicative of the general problem pointed out by the Auditor General, who concluded that ignoring planning procedures is a major weakness within the Ministry of Finance “and presents a risk of funding projects which are not feasible and are not aligned to the National Development Plan (NDP).”

New projects are required to undergo four stages prior to being included in the Public Investment Plan (PIP) and commencement: (i) Prepare a project concept in line with NDP, (ii) Prepare a Project Profile demonstrating key results, (iii) Undertake a pre-feasibility study, and (iv) Conduct a feasibility study. But the auditor found that “some projects obtained project codes and admission into the PIP without proper project vetting as stated in without vetting them”.

It is indicative of the general problem pointed out by the Auditor General, who concluded that ignoring planning procedures is a major weakness within the Ministry of Finance “and presents a risk of funding projects which are not feasible and are not aligned to the National Development Plan (NDP).” (Auditor General, 2017, p. 15)

Foreign direct investment

To attract foreign direct investment (FDI), many countries around the world privatised their telecommunications sectors – some voluntarily and others, like Uganda, under an IMF structural adjustment programme. In the UK in the 1990s, public awareness-raising of the move involved repeated assurances that after unbundling postal and telecoms services, 51% of shares in British Telecom would be sold to the private sector but with the proviso that 34.3% would be sold to the general public. Furthermore, in the interests of promoting share ownership, the shares were priced at £130, a price considered below their value.

Kenya sold its telecoms sector, reserving 60% of the shares for the Kenyan state, of which 30% were later sold directly to the public. The new entity, Safaricom, went on to become the most profitable private company in the East African region.

Cross the border into Uganda where income from the lucrative telecoms sector is enjoyed only by a narrow oligarchy. Although the government was to retain 49% of the shares in Uganda Telecom, it currently holds only 31%. Much has been written about how MTN went from being the second national operator to a virtual monopoly and regulator of the sector.

MTN is the biggest player, with 54% of the telecoms market. Only 5% of MTN shares are Ugandan-owned, (the Ugandan being an individual with board membership in at least two privatised entities, including the defunct Rift Valley Railway.) It is only in the past few months that the president began to press MTN to make some of its shares available to the public.

Uganda Telecom, the entity that was supposed to retain residual rights in the sector, was only created after Celtel and MTN (the first and second national operators) had been running for a while. This has meant that MTN has the technology to permit or bar new indigenous competitors from the market, which reportedly it does. Indigenous Ugandan start-up Ezeemoney, a mobile money platform designed to allow banking over different platforms (i.e. between MTN, Africell and other service providers), was awarded over two billion shillings in a suit against MTN for refusing to provide them with access to the network.

Tax evasion and illicit transfers

Returning to the objectives of privatisation and incentivising foreign direct investment, greater efficiency and cash inflows may have been achieved but the benefits have been annihilated by illicit outflows mainly facilitated through tax evasion.

Another 13 foreign investors have been found to have used a lacuna in the law to avoid taxes for years, a fact the IMF was in a position to know. Thirteen of the investors owe UGX 353.5 billion. Some have been beneficiaries of FDI incentives, another has been operating in Uganda since 1969 (and therefore not in need of incentives). One is in possession of the infrastructure that is the privatised Nytil textile manufacturing plant (founded in 1954). A fourteenth is a joint venture once touted as the only manufacturer of ARVs in Africa. It was founded to supply ARVs for domestic consumption and export to Burundi, the DRC, Kenya, Rwanda, South Sudan, Tanzania, Cameroon, Comoros, Namibia and Zambia. The majority shareholding is foreign-owned; the three major Ugandan shareholders own less than 10% of the shares and 18% were sold on the stock exchange in 2018. It turns out that the company may really be in the business of acquiring government tenders for a parent company in India.

In response to the discovery that opportunities to increase the tax-to-GDP ratio are being systemically undermined by tax evasion by investors, the Ministry of Finance this month tabled a proposal in Parliament to give the offenders a waiver of taxes owed on the basis that it would be unwise to drive FDI away by collecting the arrears.

Returning to the Mobutu story, it is not just African despots who have sufficient illicit funds to make a significant dent in their countries’ public debt; the taxes owed by foreign investors could clear it. MTN’s tax arrears (of UGX 2.8 trillion as extrapolated from data recovered during litigation) could clear 73.6% of the current UGX 3.4 trillion outstanding balance on the loans which Uganda will begin to repay in 2020.

Support The Elephant.

The Elephant is helping to build a truly public platform, while producing consistent, quality investigations, opinions and analysis. The Elephant cannot survive and grow without your participation. Now, more than ever, it is vital for The Elephant to reach as many people as possible.

Your support helps protect The Elephant's independence and it means we can continue keeping the democratic space free, open and robust. Every contribution, however big or small, is so valuable for our collective future.

By

Mary Serumaga is a Ugandan essayist, graduated in Law from King's College, London, and attained an Msc in Intelligent Management Systems from the Southbank. Her work in civil service reform in East Africa lead to an interest in the nature of public service in Africa and the political influences under which it is delivered.

Politics

Who Won Kenya’s “Nominations”?

Being nominated rather than selected by party members may undermine grass-roots legitimacy but it is hard not to suspect that some of the losers in the nominations process might feel a little bit relieved at this out-turn.

Published

on

Who Won Kenya’s “Nominations”?
Download PDFPrint Article

Who won Kenya’s “nominations”, the tense and often unpredictable political process through which parties select which candidates they want to represent them in the general election scheduled for 9 August? That may sound like a silly question. Social media is full of photographs of smiling candidate clutching their certificates of nomination—surely we need to look no further for the winners?

But maybe we do. Beyond the individual candidates in the contests for nominations, there are other winners. One may be obvious: it seems the general feeling is that Deputy President William Ruto came out better from the nominations than did his principal rival in the presidential race, former opposition leader Raila Odinga—about which more below. However, for some, coming out on top in the nominations may prove a poisoned chalice. Where nominations are seen to have been illegitimate, candidates are likely to find that losing rivals who stand as independents may be locally popular and may gain sympathy votes, making it harder for party candidates to win the general election. This means that there are often some less obvious winners and losers.

One reason for this is that nominations shape how voters think about the parties and who they want to give their vote to, come the general election. Research that we conducted in 2017, including a nationally representative survey of public opinion on these issues, found that citizens who felt that their party’s nomination process had not been legitimate were less likely to say that they would vote in the general election. In other words, disputed and controversial nomination processes can encourage voters to stay away from the general election, making it harder for leaders to get their vote out. In 2017, this appeared to disadvantage Odinga and his Orange Democratic Movement (ODM), whose nomination process was generally seen to have been more problematic—although whether this is because they were, or rather because this is how they were depicted by the media, is hard to say.

In the context of a tight election in 2022, popular perceptions of how the nominations were managed may therefore be as significant for who “wins” and “loses” as the question of which individuals secured the party ticket.

Why do parties dread nominations?

The major parties dreaded the nominations process—dreaded it so much, in fact, that despite all their bold words early on about democracy and the popular choice (and despite investments in digital technology and polling staff), most of the parties tried pretty hard to avoid primary elections as a way of deciding on their candidates. In some cases that avoidance was complete: the Jubilee party gave direct nominations to all those who will stand in its name. Other parties held some primaries—Ruto’s United Democratic Alliance (UDA) seems to have managed most—but in many cases they turned to other methods.

That is because of a complicated thing about parties and elections in Kenya. It is widely assumed—and a recent opinion poll commissioned by South Consulting confirms this—that when it comes to 9 August most voters will decide how to cast their ballot on the basis of individual candidates and not which party they are standing for. Political parties in Kenya are often ephemeral, and people readily move from one to another. But that does not mean that political parties are irrelevant. They are symbolic markers with emotive associations – sometimes to particular ideas, sometimes to a particular regional base. ODM, for example, has been linked both with a commitment to constitutional reform and with the Luo community, most notably in Nyanza. So the local politician who wants to be a member of a county assembly will be relying mostly on their personal influence and popularity—but they know that if they get a nomination for a party which has that kind of emotive association, it will smoothen their path.

Disputed and controversial nomination processes can encourage voters to stay away from the general election, making it harder for leaders to get their vote out.

This means that multiple candidates vie for each possible nomination slot. In the past, that competition has always been expensive, as rival aspirants wooed voters with gifts. It occasionally turned violent, and often involved cheating. Primary elections in 2013 and 2017 were messy and chaotic, and were not certain to result in the selection of the candidate most likely to win the general election. From the point of view of the presidential candidates, there are real risks to the primary elections their parties or coalitions oversee: the reputational damage due to chaos and the awareness that local support might be lost if a disgruntled aspirant turns against the party.

This helps to explain why in 2022 many parties made use of direct nominations—variously dressed up as the operation of consensus or the result of mysterious “opinion polls” to identify the strongest candidate. What that really meant was an intensive process of promise-making and/or pressure to persuade some candidates to stand down. Where that did not work, and primaries still took place, the promise-making and bullying came afterwards—to stop disappointed aspirants from turning against the party and standing as independents. The consequence of all that top-down management was that the nominations saw much less open violence than in previous years.

So who won, and who lost, at the national level?

Despite all the back-room deal-making, top-down political management was not especially successful in soothing the feelings of those who did not come out holding certificates. That brings us to the big national winners and losers of the process. Odinga—and his ODM party—have come out rather bruised. They have been accused of nepotism, bribery and of ignoring local wishes. This is a particularly dangerous accusation for Odinga, as it plays into popular concerns that, following his “handshake” with President Kenyatta and his adoption as the candidate of the “establishment”, he is a “project” of wealthy and powerful individuals who wish to retain power through the backdoor after Kenyatta stands down having served two-terms in office. In the face of well-publicised claims that Odinga would be a “remote controlled president” doing the bidding of the Kenyatta family and their allies, the impression that the nominations were stage-managed from on high in an undemocratic process was the last thing Azimio needed.

Moreover, perhaps because Odinga seems to have been less active than his rival in personally intervening to mollify aggrieved local politicians, the ODM nominations process seems to have left more of a mess. That was compounded by complications in the Azimio la Umoja/One Kenya Alliance Coalition Party (we’ll call it Azimio from now on, for convenience). Where Azimio “zoned”—that is, agreed on a single candidate from all its constituent parties—disappointed aspirants complained. Where it did not zone, and agreed to let each party nominate its own candidate for governor, MP and so on, then smaller parties in the coalition complained that they would face unfair competition come the general election. That is why the leaders of some of these smaller groups such as Machakos Governor Alfred Mutua made dramatic (or theatrical, depending on your view) announcements of their decision to leave Azimio and support Ruto.

Despite all the back-room deal-making, top-down political management was not especially successful in soothing the feelings of those who did not come out holding certificates.

So Ruto looks like a nomination winner. But his success comes with a big price tag. His interventions to placate disgruntled aspirants involved more than soothing words. A new government will have lots of goodies to distribute to supporters—positions in the civil service and parastatals, diplomatic roles, not to mention business opportunities of many kinds. But the bag of goodies is not bottomless, and it seems likely that a lot of promises have been made. Ruto’s undoubted talents as an organizer and deal-maker have been useful to him through the nominations—but those deals may prove expensive for him, and for Kenya, if he wins the presidential poll.

Money, politics, and the cost of campaigns

Those who “won” by being directly nominated to their desired positions may also come to see this process as something of a double-edged sword. In the short term, many of them will have saved considerable money: depending on exactly when the deal was done, they will have been spared some days of campaign expenses—no need to fuel cars, buy airtime for bloggers, pay for t-shirts and posters, and hand out cash. But that will be a brief respite. The disappointed rivals who have gone independent will make the campaigns harder for them—and likely more expensive. The belief that they were favoured by the party machinery may mean that voter expectations are higher when it comes to handouts and donations on the campaign trail. And the fact they were nominated rather than selected by party members may undermine their grass-roots legitimacy.

Others may experience a similar delayed effect. Among the short-term losers of the nominations will have been some of the “goons” who have played a prominent physical role in previous nominations: their muscular services were largely not required (although there were exceptions). The printers of posters and t-shirts will similarly have seen a disappointing nominations period (although surely they will have received enough early orders to keep them happy, especially where uncertainty over the nomination was very prolonged). The providers of billboard advertising may have seen a little less demand than they had hoped for, although they too seem to have done quite well from selling space to aspirants who—willingly or not—did not make it to the primaries. But where the general election will be fiercely contested, entrepreneurs will likely make up any lost ground as the campaigns get going. In these cases, competition has been postponed, not avoided.

Those in less competitive wards, constituencies or counties—the kind in which one party tends to dominate in the general election—are unlikely to be able to make up for lost time. These “one-party” areas may be in shorter supply in 2022 than in the past, due to the way that the control of specific leaders and alliances over the country’s former provinces has fragmented, but there will still be some races in which it is obvious who will win, and so the campaigns will be less heated.

Those who “won” by being directly nominated to their desired positions may also come to see this process as something of a double-edged sword.

More definite losers are the parties themselves. In some ways, we could say they did well as institutions, because they were spared the embarrassment of violent primaries. But the settling of many nominations without primaries meant not collecting nomination fees from aspirants in some cases, and refunding them in others. That will have cost parties a chunk of money, which they won’t get back. That may not affect the campaigns much—the money for campaigns flows in opaque and complex ways that may not touch the parties themselves. But it will affect the finances of the parties as organizations, which are often more than a little fragile.

Are the losers actually the biggest winners?

Some losers, however, are really big winners. Think about those candidates who would not have won competitive primaries but were strong enough to be able to credibly complain that they had been hard done by due to the decision to select a rival in a direct process. In many cases, these individuals were able to extract considerable concessions in return for the promise not to contest as independents, and so disrupt their coalition’s best laid plans. This means that many of the losers—who may well have been defeated anyway—walked away with the promise of a post-election reward without the expense and bother of having to campaign up until the polls.

It is hard not to suspect that some of them might feel a little bit relieved at this out-turn. In fact, some of them may have been aiming at this all along. For those with limited resources and uncertain prospects at the ballot, the opportunity to stand down in favour of another candidate may have been pretty welcome. Instead of spending the next three months in an exhausting round of funerals, fund-raisers and rallies, constantly worrying about whether they have enough fifty (or larger) shilling notes to hand out and avoiding answering their phones, they can sit back and wait for their parastatal appointment, ambassadorship, or business opportunity.

For those with limited resources and uncertain prospects at the ballot, the opportunity to stand down in favour of another candidate may have been pretty welcome.

For these individuals, the biggest worry now is not their popularity or campaign, but simply the risk that their coalition might not win the presidential election, rendering the promises they have received worthless. Those whose wishes come true will be considerably more fortunate—and financially better off—than their colleagues who made it through the nominations but fall at the final hurdle of the general election.

Separating the winners of the nominations process from the losers may therefore be harder than it seems.

Continue Reading

Politics

Asylum Pact: Rwanda Must Do Some Political Housecleaning

Rwandans are welcoming, but the government’s priority must be to solve the internal political problems which produce refugees.

Published

on

Asylum Pact: Rwanda Must Do Some Political Housecleaning
Download PDFPrint Article

The governments of the United Kingdom and Rwanda have signed an agreement to move asylum seekers from the UK to Rwanda for processing. This partnership has been heavily criticized and has been referred to as unethical and inhumane. It has also been opposed by the United Nations Refugee Agency on the grounds that it is contrary to the spirit of the Refugee Convention.

Here in Rwanda, we heard the news of the partnership on the day it was signed. The subject has never been debated in the Rwandan parliament and neither had it been canvassed in the local media prior to the announcement.

According to the government’s official press release, the partnership reflects Rwanda’s commitment to protect vulnerable people around the world. It is argued that by relocating migrants to Rwanda, their dignity and rights will be respected and they will be provided with a range of opportunities, including for personal development and employment, in a country that has consistently been ranked among the safest in the world.

A considerable number of Rwandans have been refugees and therefore understand the struggle that comes with being an asylum seeker and what it means to receive help from host countries to rebuild lives. Therefore, most Rwandans are sensitive to the plight of those forced to leave their home countries and would be more than willing to make them feel welcome. However, the decision to relocate the migrants to Rwanda raises a number of questions.

The government argues that relocating migrants to Rwanda will address the inequalities in opportunity that push economic migrants to leave their homes. It is not clear how this will work considering that Rwanda is already the most unequal country in the East African region. And while it is indeed seen as among the safest countries in the world, it was however ranked among the bottom five globally in the recently released 2022 World Happiness Index. How would migrants, who may have suffered psychological trauma fare in such an environment, and in a country that is still rebuilding itself?

A considerable number of Rwandans have been refugees and therefore understand the struggle that comes with being an asylum seeker and what it means to receive help from host countries to rebuild lives.

What opportunities can Rwanda provide to the migrants? Between 2018—the year the index was first published—and 2020, Rwanda’s ranking on the Human Capital Index (HCI) has been consistently low. Published by the World Bank, HCI measures which countries are best at mobilising the economic and professional potential of their citizens. Rwanda’s score is lower than the average for sub-Saharan Africa and it is partly due to this that the government had found it difficult to attract private investment that would create significant levels of employment prior to the COVID-19 pandemic. Unemployment, particularly among the youth, has since worsened.

Despite the accolades Rwanda has received internationally for its development record, Rwanda’s economy has never been driven by a dynamic private or trade sector; it has been driven by aid. The country’s debt reached 73 per cent of GDP in 2021 while its economy has not developed the key areas needed to achieve and secure genuine social and economic transformation for its entire population. In addition to human capital development, these include social capital development, especially mutual trust among citizens considering the country’s unfortunate historical past, establishing good relations with neighbouring states, respect for human rights, and guaranteeing the accountability of public officials.

Rwanda aspires to become an upper middle-income country by 2035 and a high-income country by 2050. In 2000, the country launched a development plan that aimed to transform it into a middle-income country by 2020 on the back on a knowledge economy. That development plan, which has received financial support from various development partners including the UK which contributed over £1 billion, did not deliver the anticipated outcomes. Today the country remains stuck in the category of low-income states. Its structural constraints as a small land-locked country with few natural resources are often cited as an obstacle to development. However, this is exacerbated by current governance in Rwanda, which limits the political space, lacks separation of powers, impedes freedom of expression and represses government critics, making it even harder for Rwanda to reach the desired developmental goals.

Rwanda’s structural constraints as a small land-locked country with no natural resources are often viewed as an obstacle to achieving the anticipated development.

As a result of the foregoing, Rwanda has been producing its own share of refugees, who have sought political and economic asylum in other countries. The UK alone took in 250 Rwandese last year. There are others around the world, the majority of whom have found refuge in different countries in Africa, including countries neighbouring Rwanda. The presence of these refugees has been a source of tension in the region with Kigali accusing neighbouring states of supporting those who want to overthrow the government by force. Some Rwandans have indeed taken up armed struggle, a situation that, if not resolved, threatens long-term security in Rwanda and the Great Lakes region. In fact, the UK government’s advice on travel to Rwanda has consistently warned of the unstable security situation near the border with the Democratic Republic of Congo (DRC) and Burundi.

While Rwanda’s intention to help address the global imbalance of opportunity that fuels illegal immigration is laudable, I would recommend that charity start at home. As host of the 26th Commonwealth Heads of Government Meeting scheduled for June 2022, and Commonwealth Chair-in-Office for the next two years, the government should seize the opportunity to implement the core values and principles of the Commonwealth, particularly the promotion of democracy, the rule of law, freedom of expression, political and civil rights, and a vibrant civil society. This would enable Rwanda to address its internal social, economic and political challenges, creating a conducive environment for long-term economic development, and durable peace that will not only stop Rwanda from producing refugees but will also render the country ready and capable of economically and socially integrating refugees from less fortunate countries in the future.

Continue Reading

Politics

Beyond Borders: Why We Need a Truly Internationalist Climate Justice Movement

The elite’s ‘solution’ to the climate crisis is to turn the displaced into exploitable migrant labour. We need a truly internationalist alternative.

Published

on

Beyond Borders: Why We Need a Truly Internationalist Climate Justice Movement
Download PDFPrint Article

“We are not drowning, we are fighting” has become the rallying call for the Pacific Climate Warriors. From UN climate meetings to blockades of Australian coal ports, these young Indigenous defenders from twenty Pacific Island states are raising the alarm of global warming for low-lying atoll nations. Rejecting the narrative of victimisation – “you don’t need my pain or tears to know that we’re in a crisis,” as Samoan Brianna Fruean puts it – they are challenging the fossil fuel industry and colonial giants such as Australia, responsible for the world’s highest per-capita carbon emissions.

Around the world, climate disasters displace around 25.3 million people annually – one person every one to two seconds. In 2016, new displacements caused by climate disasters outnumbered new displacements as a result of persecution by a ratio of three to one. By 2050, an estimated 143 million people will be displaced in just three regions: Africa, South Asia, and Latin America. Some projections for global climate displacement are as high as one billion people.

Mapping who is most vulnerable to displacement reveals the fault lines between rich and poor, between the global North and South, and between whiteness and its Black, Indigenous and racialised others.

Globalised asymmetries of power create migration but constrict mobility. Displaced people – the least responsible for global warming – face militarised borders. While climate change is itself ignored by the political elite, climate migration is presented as a border security issue and the latest excuse for wealthy states to fortify their borders. In 2019, the Australian Defence Forces announced military patrols around Australia’s waters to intercept climate refugees.

The burgeoning terrain of “climate security” prioritises militarised borders, dovetailing perfectly into eco-apartheid. “Borders are the environment’s greatest ally; it is through them that we will save the planet,” declares the party of French far-Right politician Marine Le Pen. A US Pentagon-commissioned report on the security implications of climate change encapsulates the hostility to climate refugees: “Borders will be strengthened around the country to hold back unwanted starving immigrants from the Caribbean islands (an especially severe problem), Mexico, and South America.” The US has now launched Operation Vigilant Sentry off the Florida coast and created Homeland Security Task Force Southeast to enforce marine interdiction and deportation in the aftermath of disasters in the Caribbean.

Labour migration as climate mitigation

you broke the ocean in
half to be here.
only to meet nothing that wants you
– Nayyirah Waheed

Parallel to increasing border controls, temporary labour migration is increasingly touted as a climate adaptation strategy. As part of the ‘Nansen Initiative’, a multilateral, state-led project to address climate-induced displacement, the Australian government has put forward its temporary seasonal worker program as a key solution to building climate resilience in the Pacific region. The Australian statement to the Nansen Initiative Intergovernmental Global Consultation was, in fact, delivered not by the environment minister but by the Department of Immigration and Border Protection.

Beginning in April 2022, the new Pacific Australia Labour Mobility scheme will make it easier for Australian businesses to temporarily insource low-wage workers (what the scheme calls “low-skilled” and “unskilled” workers) from small Pacific island countries including Nauru, Papua New Guinea, Kiribati, Samoa, Tonga, and Tuvalu. Not coincidentally, many of these countries’ ecologies and economies have already been ravaged by Australian colonialism for over one hundred years.

It is not an anomaly that Australia is turning displaced climate refugees into a funnel of temporary labour migration. With growing ungovernable and irregular migration, including climate migration, temporary labour migration programs have become the worldwide template for “well-managed migration.” Elites present labour migration as a double win because high-income countries fill their labour shortage needs without providing job security or citizenship, while low-income countries alleviate structural impoverishment through migrants’ remittances.

Dangerous, low-wage jobs like farm, domestic, and service work that cannot be outsourced are now almost entirely insourced in this way. Insourcing and outsourcing represent two sides of the same neoliberal coin: deliberately deflated labour and political power. Not to be confused with free mobility, temporary labour migration represents an extreme neoliberal approach to the quartet of foreign, climate, immigration, and labour policy, all structured to expand networks of capital accumulation through the creation and disciplining of surplus populations.

The International Labour Organization recognises that temporary migrant workers face forced labour, low wages, poor working conditions, virtual absence of social protection, denial of freedom association and union rights, discrimination and xenophobia, as well as social exclusion. Under these state-sanctioned programs of indentureship, workers are legally tied to an employer and deportable. Temporary migrant workers are kept compliant through the threats of both termination and deportation, revealing the crucial connection between immigration status and precarious labour.

Through temporary labour migration programs, workers’ labour power is first captured by the border and this pliable labour is then exploited by the employer. Denying migrant workers permanent immigration status ensures a steady supply of cheapened labour. Borders are not intended to exclude all people, but to create conditions of ‘deportability’, which increases social and labour precarity. These workers are labelled as ‘foreign’ workers, furthering racist xenophobia against them, including by other workers. While migrant workers are temporary, temporary migration is becoming the permanent neoliberal, state-led model of migration.

Reparations include No Borders

“It’s immoral for the rich to talk about their future children and grandchildren when the children of the Global South are dying now.” – Asad Rehman

Discussions about building fairer and more sustainable political-economic systems have coalesced around a Green New Deal. Most public policy proposals for a Green New Deal in the US, Canada, UK and the EU articulate the need to simultaneously tackle economic inequality, social injustice, and the climate crisis by transforming our extractive and exploitative system towards a low-carbon, feminist, worker and community-controlled care-based society. While a Green New Deal necessarily understands the climate crisis and the crisis of capitalism as interconnected — and not a dichotomy of ‘the environment versus the economy’ — one of its main shortcomings is its bordered scope. As Harpreet Kaur Paul and Dalia Gebrial write: “the Green New Deal has largely been trapped in national imaginations.”

Any Green New Deal that is not internationalist runs the risk of perpetuating climate apartheid and imperialist domination in our warming world. Rich countries must redress the global and asymmetrical dimensions of climate debtunfair trade and financial agreements, military subjugation, vaccine apartheidlabour exploitation, and border securitisation.

It is impossible to think about borders outside the modern nation-state and its entanglements with empire, capitalism, race, caste, gender, sexuality, and ability. Borders are not even fixed lines demarcating territory. Bordering regimes are increasingly layered with drone surveillance, interception of migrant boats, and security controls far beyond states’ territorial limits. From Australia offshoring migrant detention around Oceania to Fortress Europe outsourcing surveillance and interdiction to the Sahel and Middle East, shifting cartographies demarcate our colonial present.

Perhaps most offensively, when colonial countries panic about ‘border crises’ they position themselves as victims. But the genocide, displacement, and movement of millions of people were unequally structured by colonialism for three centuries, with European settlers in the Americas and Oceania, the transatlantic slave trade from Africa, and imported indentured labourers from Asia. Empire, enslavement, and indentureship are the bedrock of global apartheid today, determining who can live where and under what conditions. Borders are structured to uphold this apartheid.

The freedom to stay and the freedom to move, which is to say no borders, is decolonial reparations and redistribution long due.

Continue Reading

Trending