Untold story of high Commodity.

  • Updated by Faith Barbara Namagembe at 1049 EAT on Wednesday 8th June 2022.

Let me take the opportunity of Prof Samwiri Lwanga-Lunyiigo’s new book Uganda: An Indian Colony (1897-1972) to initiate a discussion on the current economic crisis, which on the face of it looks like the fuel and commodities problem.

In fact, it is deeper. I was glad that Lunyiigo, in his first three chapters discussed what economic independence looked like before colonialism and how we lost this independence. I will add a third section in this article to combine Lunyiigo with Prof Dani to suggest what should be done about the crisis as a matter of urgency.

How deep is the crisis? 

It is fair to suggest that the current international war in Ukraine, which has made fuel and grain scarce is a continuation of the 2007 global food crisis, and the 2008/9 global economic crisis that started as a ‘credit crunch’ in the USA financial sector, the very practice of making money wealth that is not backed by production, ended up affecting the real economy everywhere.

The Covid-19 crisis too is related to the failure of the economies to recover 12 years after the ‘credit crunch’. It is all historically connected to the falling (or even the absence of) profitability in the entire capitalist system.  

Speaking from the annual Davos meeting at the end of May 2022, Jose Vinals, the chairman of Standard Chartered bank, described the current crisis as a ‘perfect storm’ that has been accumulating and is composed of macro and micro problems with ‘critical issues…crises…[like] energy crisis, food crisis, the crisis in globalization with [increased] fragmentation in the order of trade [that is] undermining capital flows, and also some cracks in global governance.’ 

Speaking at the same meeting, US billionaire George Soros gives a grimmer warning that if the international war in Ukraine leads to a world war, it could spell the end of civilization (for a long time, Western civilization has been considered the civilization).

In my view, all this predicts the fast-approaching end of Western civilization that has for long been driven across the world through capitalism. We may experience similar crises in rapid succession in future but nothing can stop the final collapse, probably during our time. 

On the African continent, there have been calls for us to revisit our historical and cultural legacy as a way of surviving the series of crises that are still to come. There is no time anymore to sit and wait out a pandemic or a world war. We have to do something that restores relevance to our history and culture. This is where I think Lunyiigo’s book becomes relevant.

What was the economy like before we lost our independence? At the launch of his book, Lunyiigo opened his remarks with two facts.

First, he comes from Ssese Islands in Nalubaale (Lake Victoria) where pre-colonial Baganda tamed crocodiles for riding as water transport. Secondly, he talked about a Muzungu from a medical school in Edinburgh who witnessed a successful traditional cesarean section in pre-colonial Buganda. We already know a documented fact by a certain Dr. Robert William Felkin, an explorer and medical anthropologist, who witnessed the Banyoro doctors perform another successful cesarean section in 1878. 

Are these seemingly ‘primitive’ levels of economy and technology important? He calls upon us to confront what he calls ‘our terrible inferiority’.

Trade and industry

Trade and industry did not commence with the arrival of Arabs, Europeans, and Indians. These people disrupted Africa’s economies. Indeed, Nalubaale was a major thoroughfare featuring the enormous canoes of Baganda. Pakenham writing in The Scramble for Africa also mentions about 1,000 canoes belonging to Mutesa I’s navy.

By 1870s Mutesa I’s trade agents were moving ivory to Zanzibar and returning with guns and cloth to the palace. The Baganda chiefs are reported to have often engaged 600 porters in direct trade worth 45,000 Rupees or £3000 valued at that time with Zanzibar.

Bunyoro was the emporium,writes Lunyiigo. Its iron made excellent battle-grade and hunting spears bought in Buganda in exchange for fine bark cloth from the kingdom’s textile industries. Omukama Kabalega also hired Baganda gun-smiths to repair Abarusura’s guns.

Perhaps the two states were not such bad enemies as we were taught. Bunyoro again was the leader in working iron hoes, which were critical for agriculture in the region. The salt mines at Kibiro and Katwe flourished and Kabalega collected taxes at those sites. Bunyoro traded with Busoga and Teso exchanging hoes for grain and cattle respectively. 

Referencing Kamuhangire, Lunyiigo names various men who were known to have become wealthy exclusively from the long-distance salt trade between 1000 and 1900 in southwestern Uganda. Lunyiigo also mentions the Parombo, a multi-ethnic group of traders of Luo-, Lendu- and Bantu-speakers living in the town of Panymur to the northern shores of Rwitanzigye or Mwitanzigye (Lake Albert); they were purely dependent on trade.

The states of the time worked more with than against, each other. Towns as far and wide as Lubaga, Mparo, Panymur, Kibiro, Katwe, Karagwe, Ishaka, and Ibanda were networked through trade.

Lunyiigo cites authorities, which suggest that as long ago as one century before the European advent these states built a great network of long-distance trade in Eastern and Central Africa. There was thus an organic economic bond amongst what became Uganda, with linkages spilling over into present-day Sudan, Congo, Tanzania, Kenya, Rwanda, and Burundi.

The colonial turn

Hence the problem of Uganda is the institution of resource extraction, which was initially founded on British monopoly interests, superintended by the British state, and funded by British finance capital. On the ground, the British had Indians as their trusted looters of Uganda’s wealth who grew richer as the Africans were roundly impoverished.

The situation has never been reversed to this day. Except that the African agents in time joined the ranks of Indian looters. Below is an outline of the disruption to that independence.

Although he calls it ‘de-industrialization,’ Lunyiigo has attempted, in the early chapters, an elaboration on how the British destroyed native economies in this part of the empire. To begin with, Lunyiigo points out that in 1888 Emin Pasha, a British agent, burnt down 1,000 houses at the salt works of Kibiro in Bunyoro Kingdom and ran away with bundles of salt and other valuables.

Later, British forces occupied the strategic salt mines in 1894 as they fought Omukama Kabalega. After the war, the salt workers had to pay loyalty to the British when they returned. 

The long-distance trade to Zanzibar collapsed after the railway from Mombasa reached Kisumu and the steamer was put on Lake Victoria. Then Baganda traders, including the chiefs, were excluded. Kabaka Mwanga had particularly wanted to establish a sawmill to export timber but permission was denied.

Once, when the chiefs’ goods were stranded in Naivasha due to lack of money, they requested ‘Sir’ Apollo Kaggwa to borrow 7,740 Rupees from the government on their behalf. Col. Ternan who was in charge of Uganda claimed he could not be bothered with Apollo Kaggwa’s Biblical effusions. Period.

Semei Kakungulu, one of the Baganda fighters in the conquest of Bunyoro, wanted to use his reward of 1,000 Rupees for capturing Kabalega to trade and he joined fellow betrayer a one Andereya Lwandagga who also had,1000 Rupees but Ternan did not allow them.

Ham Mukasa, who also had his goods stranded in Naivasha, sent canoes from Busabala to Kisumu to pick up his goods but they never came! The economy was being re-created and the African chiefs meant nothing in that regard. 

A certain ‘Uganda Syndicate’ in Edinburgh was interested in Buganda’s bark cloth and it requested British representatives, Clement Hill and Sir Harry Johnstone if it could trade directly with the natives who had the expertise in producing the fiber. There was no response from both Hill and Johnstone.

Johnstone, or any other imperial agent, was not interested in setting up locally owned industries. Indians dominated all internal commerce; wholesale and retail. After the 1950s they entered manufacturing. Though slightly less than one percent of the population, Lunyiigo estimates, Indians controlled 75 percent of the economy between 1894 and 1962. This was the making of Uganda as a modern nation with weak native leadership and a large peasantry condemned to scratching the soil with little gain.

Regarding Indians, Lunyiigo notes, ‘the mighty Madhvani and Metha pioneers were teenagers who came to Uganda with only their clothes on their backs.’ In a short 15 to 20 years, they were economic giants by processing cotton and sugarcane grown with cheap Ugandan labor. ‘There is no magic to their prosperity,’ writes Lunyiigo. Before WWII, Indians owned 155 ginneries out of 194 and they were ginning 77 percent of cotton, which reached 90 percent after the war. 

It was clear, according to Lunyiigo, that Indians entered trade, manufacturing, and marketing at the expense of native enterprise, which was suppressed. Indians became rich by exploiting the labor and other resources they found here. They became a planters’ aristocracy whose sugar and tea were worked by the Africans. 

The natives were again put to work on their small shambas producing cotton and coffee for the Indians who collected virtually all the money in the processing and marketing of these commodities. All native merchants were reduced to ‘coffee and cotton producing minions.’ The chiefs were modernized, and only made useful, through religious education, and deprived of trade and industry.

Kabaka Mwanga’s request for a sawmill business was handed over to the Sikhs who went on to exploit what Lunyiigo calls ‘the very valuable tropical hardwoods in Uganda’s forests.’ The bark cloth industry was destroyed and so was the salt and iron which employed a lot of people. The gunsmith was put out of business and criminalized. 

The Indian dukawallah took over the salt trade which was now imported from a British monopoly in another British colony. Chillington Tool Company, a British monopoly, took over Bunyoro’s hoe without any great modification.

Lunyiigo gives the Guptas in South Africa as an example of Indian state capture in Africa. By bringing back Indians in the 1990s, Museveni restored their monopoly over local entrepreneurs. Today, a total of 33,000 Indians, out of 40 million Ugandans, control 62 percent of the economic output.

Sudhir Ruparelia, whom Ibrahim Nganda recently accused of looting Uganda’s wealth, is the epitome of this capture. The relationship between Museveni and Sudhir is that both are historically intimately associated with global finance as agents. That system is in deep crisis right now.

Strategy for crisis response

Lunyiigo’s description of ‘Trade Before the Indians’ portrays vibrant agricultural, mining, trading, and manufacturing economies that spanned the entire Great Lakes region. Native production and exchange strategies were based on his profound statement, ‘The states of the time worked more with than against, each other’[Emphasis is mine]. 

This harmony should be reproduced internally based on what Nabudere calls federated or confederated states of Uganda. This is instead of the regional tier or indeed the failed decentralization systems. 

In this context, I reiterate Nabudere’s urgent recommendations to address this and a series of more global crises to come.

First, is the need for food for the immediate survival of ordinary people under the current circumstances. A food policy should address the historical problem of creating persistent famine among food-producing communities. This happened through the imposition of extractive market relations that affected households negatively. As a matter of urgency, we need a home market to ensure food and other consumer products in the home and the country.

Second, a regional market (within the Great Lakes Region) that is composed of commodities that suit local tastes and can be traded immediately with neighboring countries. Only then can they think of global markets or what will be left of them. The regional market should ensure that we are responsible for our survival. This task has to be decentralized to regions rather than to an inaccessible global center.

Third, re-invigorate indigenous (native) food crops as well as medicinal plants. You cannot develop food security and health system based on foods of which you have no or little knowledge. With the global currency crisis, you will not have foreign currency to buy foreign food products in the short run. This means that farmers should quickly be encouraged to revive these crops, which were abandoned in preference for ‘marketable’ exotic crops. 

Fourth, encourage self-organized cooperative production among the farmers because land fragmentation will not sustain poor farmers. World Bank programs related to large-scale agriculture and urbanization plans that will push poor populations off the land should be halted and cooperative land holdings implemented urgently. Land use should respect the current context of climate change.

Fifth, a sound credit policy to enable farmers to borrow for their production and hence hasten the creation of a new currency and new credit systems locally. Already the informal sector depends on credit arrangements that enable small traders to lend to each other based on trust. We need to study the experience of Somaliland which has a very strong local currency that is not pegged to any global currency. 

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