OPINION: This is how neo-colonialism impacts on Uganda’s banking sector
By Dr. Sam Mayanja
When colonial powers lost control over Africa, as a farewell gesture, they crafted new instruments to continue exercising influence over the newly independent States.
In Uganda, the struggle for independence was initially manifested through the grievances on land giveaway executed by the colonial powers with local collaborators under the 1900 Buganda Agreement.
These manifestations were through the creation of political parties including the Bataka Party in the 1920s followed by other political formations like Ignatius Musaazi’s Uganda Farmers Union, Bataka Bu of Semakula Mulumba, and others like the Uganda Drivers Association.
In 1949, these associations joined together and rioted demanding direct elections to the various positions in the Mengo Establishment which at the time was the face of colonial control over Uganda.
The rioters accordingly attacked the installations of Mengo Establishment including banning down Ssaza headquarters, the residence of Omuwanika. Other crowds gathered in the vicinity of Lubiri in preparation for the attack on that facility.
The colonial police teargased the crowds and generally used brutal force to quell the riots which were first spreading to other parties of the colony. Brutal force prevailed and the colonial power banned and outlawed all forms of local political and economic associations and imprisoned their leaders.
In 1952, banned organisations regrouped under Ignatius Musaazi’s Uganda National Congress (UNC) becoming the first National political party in the Country.
That party went through various changes spiriting into three groups namely; UNC’s Jolly Joe Kiwanuka wing, the UNC Milton Obote wing and the Uganda National Union wing under W.W.Rwetsiba.
The three sprinter groups eventually got together to form the Uganda People’s Congress (UPC) under Milton Obote, who on 9th October 1962 led Uganda’s first independence Government.
Unfortunately, leaders of the independent state of Uganda, like those of other newly independent African countries, assumed that seeking financial aid and support from their former colonial masters and international community was the solution to the economic growth of their new states.
These leaders were unaware of the hidden hand of neo-colonialism using their influence through these apparent financial support, to continue fundamentally impacting the decision making processes of the newly independent African countries and ensuring that the ne0-colonial integral interests remained protected.
The result has been for the economy’s of African States to be dominated by foreign-owned Banks which cannot offer any African solutions to the exiting challenges and economic development which can only be accessed through a Banking system.
We accordingly see a lending market in Africa, unfavorable for the citizens of African States, characterized as it is, with extremely high interest rates and limited access to friendly credit terms, with no real national control.
As former President of Ghana the late Kwame Nkrumah observed in his book “Neo-Colonialism the Last Stage of Imperialism”, the practice of neo-colonialism “means power without responsibility and for those who suffer from it, it means exploitation without redress”.
Therefore, neo-colonialism is more dangerous than colonialism because whereas colonialism required a physical occupation of the territory, in neo-colonialism, there is no physical presence in the neo-colonial state. It is invisible and secretive.
Neo-colonialism will not allow independent African States to form market blocks with banking and monetary systems which can compete globally.
This means that Africa will continue to be easy catch for neo-colonialism since the hidden hand of neo-colonialism continues to keep the continent into several small states which are unable to run their own affairs from a sound economic base and unable to compete globally.
The prices of the raw materials, as well as the finished goods of Africa are determined by the neo-colonial states.
The African economy is not complimentary as Africans produce what they do not consume, and consume what they do not produce.
This system was started during the colonial era. The export-import system itself is done through a banking system and shipping network controlled by the ne0-colonial powers.
The value of the currency of African countries being dependent on the export value of its raw materials is eternally lower compared to those of the former colonial powers.
It is constantly being devalued making it difficult for African countries to have the same purchasing power as the neo-colonial states. Yet African countries must borrow and pay back through the colonial currency with interests and penalties imposed by the international monetary systems domiciled and controlled by neo-colonialism.
The central banks which control the fiscal policies of African states supervise commercial banks on the basis of best monetary criteria-the criteria itself determined by the neo-colonial powers.
The sale of Uganda Commercial Bank was a neo-colonialist maneuver executed by the elite local Ugandan advisers which gave away a national asset to foreigners-a fact which increased foreign influence by international money market players.
It is obvious that those who came to be at the helm of African states at independence were not aware that independence without a framework of an African common market with a banking system able to compete globally, were clenching chains around their bosom, believing that they were embracing freedom.
Dr. Sam Mayanja
Minister of State for Lands
