chapter  5
Corruption in the Privatization Process
Pages 15

Uganda has enjoyed a reputation as one of Africa’s leading economic reformers. The IMF and the World Bank have held Uganda up as a paradigm of economic recovery on the continent and provided it with considerable financial support. Yet in the case of privatization – the transfer of assets in an enterprise from public to private ownership – not only did this prove the least successful component of Uganda’s economic reform programme, but it also sullied the public image of the Ugandan government as a result of revelations of corruption and cronyism in the divestiture process. It was largely the incumbent government that controlled Uganda’s privatization in the 1990s and early 2000s. International donors provided advice and funds but it was the government that managed the entire process. In an environment where a stock market was lacking and where few checks existed on government divestiture decisions, privatization proved a highly manipulative process. As the present chapter seeks to show, Uganda’s divestiture/privatization process was, indeed, marred by malpractice although it served the political and personal ends of the ruling elite. The first section of this chapter considers some of the main issues informing Uganda’s privatization during the 1990s. As in other African countries, these issues concerned the desirability of divestiture as well as matters relating to the pace of privatization and the prices and purchasers of state assets. Questions about the probity of privatization transactions were only occasionally raised. But as the second section shows, a series of scandals in the latter part of the decade tainted privatization with serious allegations of corruption. The third section considers why corrupt privatizations occurred in Uganda in the 1990s. As argued, this has been partly to benefit the well-connected few, but also to help the political leadership consolidate its political control. Also discussed is the limited role of international donors in controlling illegal behaviour on the part of state elites. A fourth section notes continuing corruption in privatization activities since 2000.