The rich and mighty of Uganda have come up with an ingenious replacement
for the Swiss account. And so instead of bothering with nosy global
systems, they just put their money into square miles of land.
ILLUSTRATION | JOHN NYAGAH | NMG
If Kenya made mobile money a reality, Uganda has created the new Swiss account.
Previously,
rich people and dictators who accumulated huge fortunes that they did
not want tax authorities to know about salted them away in coded Swiss
accounts. If the dictator got killed in a coup, the Swiss bankers would
smile secretly inside the bank.
That, we are told, made
it possible for banks in such countries to lend at very low interest
rates and look very humane, since they had vast blood-stained deposits
for which no customer was claiming interest, or was in any hurry to
withdraw.
But now the famed Swiss secrecy has been
diluted. The growing transparency movement but even more urgently, the
global terrorism threat, have turned Swiss accounts into a target of
scrutiny. And then the anti-money laundering laws that virtually every
country must enact have also become a nuisance to the Swiss banker.
In
comes the Ugandan innovation. The rich and mighty of Uganda have come
up with an ingenious replacement for the Swiss account. They have
figured out that no Swiss account is better than the land that we walk
on. It is the best bank to hide your millions. And so instead of
bothering with nosy global systems, they just put their money into
square miles of land.
While some cynical people call it
land grabbing, it is not a cheap process by any means. It involves
identifying several square miles of land for which there has been no
title issued.
That means spending millions of
shillings on scouting. You then proceed to bribe a chain of officials,
from local chiefs and clan leaders to administrators and technocrats in
the lands offices. This runs into billions of shillings. Finally, you
get your clean title to three square miles of land after spending Ush1
billion, which is about $3million.
There is virtually
no way you would have moved three million dollars to Switzerland or any
other country without being noticed. That is why we have had officials
keeping half a million dollars under their bed for months, not knowing
how to move it. Sometimes the wife steals it and hubby has to find ways
of dealing with her without the relatives, friends and in-laws wondering
why she is being beaten to near death.
Anyway, after
you embody your three million dollars in three square miles of land, you
can take the title to the bank and borrow $6 million, because the land
itself is worth $10 million on the market. Then you refuse to pay the
bank, having converted the money into other assets. Then the bank sells
it at a huge loss and the person who buys it has to deal with the so
called squatters – the people who were born on it and whose ancestors
have lived on it for generations.
Then a crisis ensues
as the buyer tries to evict them. And maybe political intervention takes
place and the government offers to compensate the new buyer so that
hundreds of families are not evicted. The new buyer then joins the long
list of unpaid government creditors. And life goes on under the new
Swiss banking system of Uganda.
Those poor Mobutus and
Gaddafis of yesterday, they shouldn’t have taken their cash to
Switzerland when the Swiss banks were right under their feet – their
grandkids wouldn’t be cursing today.
Joachim Buwembo is a social and political commentator based in Kampala. E-mail: buwembo@gmail.com
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