Proshare - Facebook Proshare - Twitter Proshare - Google+ Proshare - Linked In Proshare - RSS Feed

Uganda - Succession and Inequality Will Pose Risks To Stability

Proshare

Monday, August 28, 2017 1:05 PM / BMI

BMI View: The continuity of Museveni's presidency will pose the greatest risk to Uganda's stability in the medium term. Meanwhile, corruption, underemployment and unstable neighbouring countries may also impact social stability and potentially lead to unrest.

In the years ahead, the questions of presidential succession and economic inequality, will remain risks to Uganda's political environment. While President Yoweri Museveni and his National Resistance Movement (NRM) party, in government since 1986, have maintained stability over the last three decades, it is as yet unclear who will succeed him. The lack of a managed succession upon Museveni's eventual departure could lead to a destabilising power vacuum.

Meanwhile, the high levels of corruption and elevated unemployment in the country has also lead to widespread dissatisfaction with the government, potentially acting as another driver of instability, especially in periods of political change. This will only be exacerbated by the weak security situations in neighbouring countries such as South Sudan and the Democratic Republic of the Congo (DRC), which has lead to large refugee inflows and may risk the spread of conflict to areas within Uganda's borders.

In our Long Term Political Risk Index (LTPRI) Uganda scores 54.9 out of 100, slightly above the Sub-Saharan African average due to the stable political system and relatively effective policy enforcement. While the country scores highly in the 'scope of state' and 'policy continuity' sub-components of the index, with 75.0 and 70.0 out of 100 respectively, the overall figure is significantly weakened by the 'characteristics of polity' and 'characteristics of society' scores of 43.9 and 42.5 respectively.

This reflects that, although the NRM has provided strong and stable leadership, inequality and frequent instances of social unrest – particularly during times of political change – could lead to instability over the long term.


Challenges And Threats To Stability And Governance

Museveni's Succession: The question of who will eventually succeed Museveni is the most concerning with regard to Uganda's future political stability. At age 72, he is close to the presidential age limit, set at 75 years old in the constitution. This means that he will not be able to run again in the 2021 election unless the constitution is amended to allow for it.

His presidency has been the lynchpin of political stability in Uganda in the last three decades. The prospect of him leaving office without a succession plan would likely create a power vacuum resulting in instability or, at the very least, sharp policy shifts.

Corruption and Underemployment:
Corruption and a lack of sufficient employment prospects may lead to dissatisfaction with Museveni's regime. Uganda ranked 151st out of 176 countries in Transparency International's 2016 Corruption Perception Index due to concerns over the bribery of magistrates and the use of public funds to pay 'ghost workers' (non-existent employees fraudulently registered on the government payroll).

Furthermore, while hundreds of thousands of young Ugandans enter the workforce each year, there are few opportunities for stable employment in the country. Indeed, while we expect Uganda to benefit from relatively high real GDP growth, this will not necessarily ensure strong economic prospects for the population. Around 69.0% of employment is in subsistence agriculture and 87.2% of urban employment is informal in nature.

Furthermore, university graduates often accept jobs they are overqualified for. Dissatisfaction with the current state of affairs, particularly among the younger generation, may heighten tensions in periods of political instability such as elections. Indeed, Uganda saw widespread protests after the elections in 2016 and 2011 and these are likely to occur again in times of political change.

Conflict In Neighbouring Countries:
Instability in neighbouring South Sudan and DRC could impact Uganda due to the porous borders in the East African region. Ongoing ethnic conflicts have seen refugees and occasionally militants enter Uganda, which risks the spreading of conflicts to within Ugandan borders. Furthermore, refugee inflows have seen food supply in areas along the border become tight, which can contribute to inflation.

Moreover, we have seen a spillover from neighbouring countries, notably the DRC. For example, in February 2017, M23 rebels from the DRC crossed the border into Uganda and clashed with the army. Uganda has also sent troops to fight in conflicts in those neighbouring countries, which has weighed on the budget and continued defence campaigns could pose a potential risk to the fiscal outlook.


Scenarios for Political Change

Museveni Chooses A Successor (65%): Our core view is that a chosen successor will likely take Museveni's place before he leaves office. While there is not currently an individual with significant public exposure and experience to replace him, it is likely that someone will be groomed beforehand. Museveni's son, Muhoozi Kainerugba, was promoted to Major- General of the Ugandan army and hired as special advisor to the president in 2017, attracting significant media speculation that he may be groomed for the position.

There is potential that this power transition could occur between Museveni and his chosen successor in advance of the 2021 election. While a bill was introduced in the Ugandan parliament to amend the constitution, with the aim of removing the election age limit of 75, it was ultimately thrown out by Speaker of Parliament Rebecca Kadaga. If we do not see future amendments, this could be a signal that Museveni intends to step down and pick a successor for his party to run in 2021.

Successor Not Chosen (30%):
In an alternative scenario, there is a chance that Museveni may not appoint a successor in time to make a smooth transition out of office. This could occur either because Museveni dies unexpectedly in office or because he appoints a successor but that person does not have sufficient time to build his credibility before he is given the reins of leadership.

In this scenario, we see the risk of a power vacuum emerging. Public trust in the NRM would likely be eroded somewhat, given the resulting lack of a stable leader, likely paving the way for increasing social unrest in the form of protests and demonstrations. Furthermore, there would be a high likelihood of several factions within the NRM attempting to take hold of leadership, leading to significant party infighting and likely policy gridlock.

Opposition Party Wins 2021 Election (5%):
While highly unlikely, it is not outside the realm of possibility that the main opposition party, the Forum For Democratic Change (FDC), could win the presidency. FDC head Kizza Besigye has the most significant exposure to Ugandan politics out of all opposition figures, having run in the past four presidential elections and having won 35.6% of the presidential vote in 2016, compared to Museveni's 60.6%.

However, a parliamentary victory would be much more challenging to achieve, given that the party has only 36 of 426 seats compared to the NRM's 293 and due to the higher fragmentation within parliament (66 of total seats are taken by independent candidates).




Related News

1.      
Kenya - Ongoing Drought Will Result In Growth Slowdown In 2017
2.     
Tanzania - Development Expenditure To Widen After Downturn
3.     
Uganda - Shilling Set For Long-Term Depreciatory Trend
4.     
Sub Saharan Africa – Regional Favourites Facing Headwinds
5.     
Frontier Markets Growth Slowed in 2016 but Trade Now Picking Up
6.     
FSB Reports To G20 Leaders On Progress In Financial Regulatory Reforms
7.     
Pressure Builds on Eurozone Banks to Tackle High NPLs
8.    
Nigeria: Is The Recovery For Real? - LBS EBS – July 2017
9.     
Project Changes in Mozambique Prompt Construction Forecast Revision
10. 
Tentative Recovery in Zimbabwe Will Face Destabilizing Headwinds
11.  
Slow Growth in Egypt Until Structural Adjustment Bears Fruit
12. 
Egypt – Emergency Powers Will Help Push Through Reforms
13. 
Algeria – Slow Response to Structural Slowdown
14. 
Nigeria’s Borrowing Spree…Any Cause for Worry?
15.  
Economic Associates States Report - July 2017 Edition
16. 
Medium Term Growth Potential Still Below 2% in Advanced Economies

READ MORE:
Related News