Nakivubo Pronouncement
Encyclopedia
The Nakivubo Pronouncement (or Pronouncements, often shortened to NP) was a commitment issued by Milton Obote
, of the ruling party of Uganda
, the Uganda Peoples Congress, in 1970. It outlined the increased nationalisation of major industries as part of the move towards socialism described by the Common Man's Charter
of 1969 (the "Move to the Left
"). It was ultimately a failure insofar as it did not achieve the socialist ideal it was supposed to portray.
In reality, little preparation had been carried out, nor thought given to the pronouncement's consequences; it seems that the President did not even give the Cabinet any prior warning of his decision. The criteria for nationalisation were not made clear and there was great uncertainty as to whether the nationalisation exercise was complete. It was not even clear whether the nationalisation was supposed to complement the Africanisation of Uganda commerce or to re-prioritise it. The "governmental machine was thrown into the kind of incoherent muddle which became increasingly characteristic of the regime's final phase." Nationalisation had been widely anticipated, and given the uncertainty, foreign investors had been pulling their money out of the country rapidly with disastrous consequences for the economy. Taking advantage of Obote's unwillingness to have the state directly run the affected companies, multinational
s, particularly Shell and BP
, used threats and brought concerted pressure to bear on the
government to reduce their stake and to compensate them "profits or no profits". The result was that nationalisation was never fully realised, and the government never took control of Uganda's major industries.
that:
Whilst the banks could use their political clout to achieve a better settlement, local Asian firms which had none of the same sort of leverage were left deeply unhappy, and many threatened to leave. They feared the move was part of a long transition to remove them from whole lines of business. In this way, the pronouncement contributed to Asian support of Obote's overthrow by Idi Amin
in 1971. It has also been suggested that the strong anti-foreign sentiments illustrated by the pronouncement helped motivate foreign support for Amin's coup; declassified papers seem to support this.
In any event, Amin disliked the socialist attitude demonstrated by his predecessor; the pronouncement was soon revoked and in some industries the government refrained even from controlling stakes, though Africanisation was completed with the expulsion of Asians and later British holdings.
Milton Obote
Apolo Milton Obote , Prime Minister of Uganda from 1962 to 1966 and President of Uganda from 1966 to 1971, then again from 1980 to 1985. He was a Ugandan political leader who led Uganda towards independence from the British colonial administration in 1962.He was overthrown by Idi Amin in 1971, but...
, of the ruling party of Uganda
Uganda
Uganda , officially the Republic of Uganda, is a landlocked country in East Africa. Uganda is also known as the "Pearl of Africa". It is bordered on the east by Kenya, on the north by South Sudan, on the west by the Democratic Republic of the Congo, on the southwest by Rwanda, and on the south by...
, the Uganda Peoples Congress, in 1970. It outlined the increased nationalisation of major industries as part of the move towards socialism described by the Common Man's Charter
Common Man's Charter
The Common Man's Charter was a document submitted to the Ugandan People's Congress by Ugandan President Milton Obote, forming a part of the country's so-called "Move to the Left". In it, he asserts several key principles of his vision for Uganda, including a commitment to democracy in the country...
of 1969 (the "Move to the Left
Move to the Left
The Move to the Left was a policy direction undertaken in the East African state of Uganda, most notably under President Milton Obote in the period 1968–1971...
"). It was ultimately a failure insofar as it did not achieve the socialist ideal it was supposed to portray.
Outline
On 1 May 1970, Obote issued the pronouncement, proclaiming that, with immediate effect, the government was to take control of 60% (up from at most 51%) of over 80 corporations in Uganda; they would now be run by state corporations, trade unions, municipal councils and cooperative unions. The list included all banks, insurance companies, manufacturing and mining industries, plantations, oil companies and transport undertakings in Uganda. The pronouncement added that a government monopoly would be enforced in Uganda's import-export markets with the exception of oil. Foreign investors were to be compensated out of the post-tax profits of the firms themselves over the next 15 years.In reality, little preparation had been carried out, nor thought given to the pronouncement's consequences; it seems that the President did not even give the Cabinet any prior warning of his decision. The criteria for nationalisation were not made clear and there was great uncertainty as to whether the nationalisation exercise was complete. It was not even clear whether the nationalisation was supposed to complement the Africanisation of Uganda commerce or to re-prioritise it. The "governmental machine was thrown into the kind of incoherent muddle which became increasingly characteristic of the regime's final phase." Nationalisation had been widely anticipated, and given the uncertainty, foreign investors had been pulling their money out of the country rapidly with disastrous consequences for the economy. Taking advantage of Obote's unwillingness to have the state directly run the affected companies, multinational
Multinational corporation
A multi national corporation or enterprise , is a corporation or an enterprise that manages production or delivers services in more than one country. It can also be referred to as an international corporation...
s, particularly Shell and BP
BP
BP p.l.c. is a global oil and gas company headquartered in London, United Kingdom. It is the third-largest energy company and fourth-largest company in the world measured by revenues and one of the six oil and gas "supermajors"...
, used threats and brought concerted pressure to bear on the
government to reduce their stake and to compensate them "profits or no profits". The result was that nationalisation was never fully realised, and the government never took control of Uganda's major industries.
World response
Even so, the move proved very unpopular on the world stage. Banks felt particularly aggrieved. They had been asked to reincorporate their Ugandan operations in Uganda; now the reasons for that became clear. The Chairman of Barclays Bank, Sir Frederick Seebohm, spoke for many affected companies when he remarkedthat:
Whilst the banks could use their political clout to achieve a better settlement, local Asian firms which had none of the same sort of leverage were left deeply unhappy, and many threatened to leave. They feared the move was part of a long transition to remove them from whole lines of business. In this way, the pronouncement contributed to Asian support of Obote's overthrow by Idi Amin
Idi Amin
Idi Amin Dada was a military leader and President of Uganda from 1971 to 1979. Amin joined the British colonial regiment, the King's African Rifles in 1946. Eventually he held the rank of Major General in the post-colonial Ugandan Army and became its Commander before seizing power in the military...
in 1971. It has also been suggested that the strong anti-foreign sentiments illustrated by the pronouncement helped motivate foreign support for Amin's coup; declassified papers seem to support this.
In any event, Amin disliked the socialist attitude demonstrated by his predecessor; the pronouncement was soon revoked and in some industries the government refrained even from controlling stakes, though Africanisation was completed with the expulsion of Asians and later British holdings.