Economic nationalism and socialism in Uganda

Deals and Development

“…The government's change from capitalist to socialist ideology, as seen in three Marxian-oriented policy documents (The Move to the Left (Obote, 1969); The Common Man's Charter (Obote, 1970); and the Nakivubo Pronouncements of 1970), caused the second wave of capital flight from 1968 to 1970 (Hundle, 2013: 8). Because the criteria for nationalization were not made clear, there was great uncertainty as to whether the nationalization exercise was complete (with the eighty firms initially targeted), or whether more firms would subsequently be added to the list (Ryan, 1973). In 1970, Obote's last year in office, private capital outflow exceeded the inflow by a multiple of sixteen (Ryan, 1973).…”

“…Deals became disordered as investors lost confidence in constitutionalism and the rule of law. Indeed, 1967 witnessed the first episode of capital flight in Uganda's post-independence history (Ryan, 1973). Paradoxically, instead of looking critically at its own policies, the government blamed the business community for the capital flight, and low savings and investment rates (Leliveld, 2008).…”

“…Because the criteria for nationalization were not made clear, there was great uncertainty as to whether the nationalization exercise was complete (with the eighty firms initially targeted), or whether more firms would subsequently be added to the list (Ryan, 1973). In 1970, Obote's last year in office, private capital outflow exceeded the inflow by a multiple of sixteen (Ryan, 1973). Unsurprisingly, a 'mini-exodus' of Indians from Uganda was underway as early as 1969 (Hundle, 2013).…”

“…The business environment was further stifled in 1969, when, in a bid to accelerate African control of the economy, Obote decreed, without prior consultation, that the government was to take a 60 per cent stake in over eighty leading firms, including private banks (Ryan, 1973). The government's change from capitalist to socialist ideology, as seen in three Marxian-oriented policy documents (The Move to the Left (Obote, 1969); The Common Man's Charter (Obote, 1970); and the Nakivubo Pronouncements of 1970), caused the second wave of capital flight from 1968 to 1970 (Hundle, 2013: 8).…”

“…The only sectors with strong government control were mining (rentiers), and copper and cement production (Ryan, 1973). Between 1961-2 and 1966-7, the government's participation was limited to measures to promote domestic savings and private investment.…”