Let me go back in time. The year was 1987 and we were having a currency reform. As a small spoke in the wheel, I was just excited to be there. Our area of operation was Eastern Uganda. For two weeks we traversed the areas of Mbale, Tororo, Busia and Majanji, making sure every mwaninchi was being properly served by the currency conversion centres.
It was indeed surprising to see so much money coming out of nowhere and suddenly getting back into the system. Not only was it a currency reform, but it also afforded us a census of how much money was actually in circulation. Not only did we exchange your money and erase two zeroes off the new currency, we also imposed a tax levy of 30%. That would have been a difficult sale but the euphoria and support for the new dispensation was overwhelming. Everybody believed that this time things were going to work. For Shs. 60 you could get yourself US $ 1! I swear I am not lying. We liberalized the exchange rate and money was flowing. You could bring into the country and take as much as you wished.
Yes we were back in business and the economy boomed. On average it grew (recovered is a better word) at rates in excess of 9 – 12% in the first five years of the currency reforms. There were some losers, but mostly we were all winners. We had a revolutionary President who knew Africa’s problems. We had ministers who travelled in Nissan Laurels and we had political cadres who wore gumboots.
And so we arrive in 2017. Thirty years is a long time but the time seems to have zipped by. I too honestly don’t know where the years went. What I do know is that life has been generally kind. We had kids and they grew up and went their ways. We went back to school and read some more. We built houses and lived in them peacefully most of the time (though this was not true for many people some of the time). Definitely the government did get somethings right.
But some things have a way of slipping under the radar. As we lived and enjoyed the peace ushered in by the government, the shilling lost alot of its shine. Today you need about Shs. 3,600 to get hold of US $ 1! Again I swear I am not lying. The revolutionaries who knew everything became ordinary people. They discarded the gumboots and Nissan Laurels for ‘mpekonis’. Corruption stealthily crept upon us and the economy eventually nosedived. As these things were happening, the world was also changing.
Notably there was 9/11 and other terrorist incidents. There were the economic meltdowns and other anti free trade movements. Anti terrorism and money laundering legislation all over the world meant that our Big Men could no longer send abroad what they had converted to be kept in Swiss Banks. Or the Swiss learnt how to be ashamed as well.
What I do know is that with the current legal and economic atmosphere and the downturn, money became that much ‘scarcer’. Or maybe those who have plenty but are averse to the use of banks have built bunkers (no pun intended) to keep their money. So how can we get the money back into the economy and stop this ‘esente zibuze’ song?
A prominent artist who doesn’t want to be named told me how it can be done. We could have another currency reform and force the guys with the loot in their houses to turn in the money. If they cannot explain how they got it, we would impose a sin tax of 30%. That way we could fund the 2017/18 budget and maybe jumpstart the economy. As always, the devil is in the detail!
Samuel Sejjaaka is Country Team Leader at Abacus Business School. @samuelsejjaaka