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Muhakanizi: A leading light in Uganda’s economic recovery

Posted by Walter Gido on

Muhakanizi: A leading light in Uganda’s economic recovery

On the evening of Thursday, April 13, Keith Muhakanizi, the man who guided technical and policy development work in the preparation of three successive National Development Plans (NDPs), lost the fight against cancer.Before his death, the man who held the powerful position of Permanent Secretary and Secretary to the Treasury, between May 2013 and July 2021, had been on and off planes, and in and out of hospitals.That he was ailing was an open secret, but until about three months ago, he was reportedly being considered for governor of Bank of Uganda, a post which has been vacant since January 23, 2022 when Emmanuel Tumusiime-Mutebile passed on.That the appointing authority could still look beyond his failing health, considering him the right candidate for the job is perhaps the biggest indicator that he was widely recognised as a man with a big economic brain.

The country is struggling under the weight of high fuel and commodity prices which have left Ugandans in need of a messianic figure to lead them to an economic Canaan.It is not possible to talk about Uganda’s economic recovery and growth in the pre-Covid-19 era without talking about Muhakanizi and Mutebile. They formed an effective economic strike partnership.Joining FinanceMuhakanizi graduated from Makerere University with a Bachelor of Science (Economics) degree in 1982. He joined the Ministry of Finance as an economist in the Macro Economic Division, and was handed the responsibility of generating policy proposals to stimulate and drive private sector-led economic growth.But it was not until after the ruling National Resistance Movement (NRM) took power in 1986 that his thoughts and ideas really started coming to the fore.He cannot take all the credit for that though, because other like-minded people were pulling in the same direction.If what the Economic Policy Research Centre (EPRC) says in the paper, “EPRC’s assessment of Uganda’s economic progress, challenges and prospects since 1962” is anything to go by, it was, thanks to the World Bank and the International Monetary Fund (IMF), that his brilliance could shine through.

According to the EPRC’s paper, after the tumultuous years of the Obote II era when Uganda’s economy was bled by the armed rebellion government was fighting, things had to change.The new socialist-leaning NRM leadership, which had initially rooted for barter trade, made an about-turn. The mandarins at finance traded in their post-war backing for cashless economic transactions and state-led economic growth for the capitalist model which fed off private sector-led economic growth.At the time, a wave of liberalisation and privatisation was sweeping across the country. The government had been compelled to swallow the severe structural adjustment programmes ruthlessly promoted by the IMF and the World Bank as central drivers of the free-market-economy agenda.Muhakanizi’s elevation in December 1992 to the position of acting commissioner for Macro Economic Planning, therefore, coincided with a period of painful re-adjustment and the drive to economic recovery.“The policies Uganda implemented, especially from 1992, led to economic stability and significant achievements in growth and poverty reduction. Real GDP growth from 1992 to 2012 averaged about 7.5 percent per annum, and during that period, GDP quadrupled. The proportion of Ugandans living below the minimum income to meet the cost of basic needs that stood at 56 percent in 1992/1993 fell to 24.5 percent in 2009/2010,” the EPRCR says about the period.

Between 1993 and May 2013, Muhakanizi served as acting commissioner and advisor to the Minister of Finance; commissioner of Economic Development Policy and Research; director of Economic Affairs; acting deputy Secretary to the Treasury and later deputy Secretary to the Treasury under the late Chris Kasami. He was named Permanent Secretary and Secretary to the Treasury (PSST) in May 2013, a position he held until July 2021 when he was appointed Permanent Secretary in the Office of the Prime Minister.Fiscal disciplineThe blunt speaking Muhakanizi was never the type to hide his true feelings about the economy and the state of the Treasury that he was in charge of.“No money!” he would quip whenever accounting officers would make file requisitions for items that had never been budgeted for.As PSST, he emphasised fiscal discipline and never walked away from an opportunity to lecture the government about the need to cool their appetite for disruptive supplementary budgets. Supplementary budgets, he argued, were a manifestation of fiscal indiscipline.

“Cabinet should ensure we minimise supplementary expenditure, because (this practice) has a negative impact on the planning and budgeting process; cutting money from weaker sectors to facilitate supplementary (budget requests) as opposed to stronger sectors, causes problems, especially because (these proposals) to ‘touch’ stronger sectors can also bring ‘problems’” he said in July 2018, during a panel discussion at the Annual Bankers Conference.The ministry was at the time being asked to find money to buy armoured cars for MPs.Muhakanizi was not afraid to stand in support of an unpopular position when he believed it to be right.That became evident in September 2018. He was one of the few who insisted that the government retain the politically damaging one percent excise duty on receiving and sending mobile money.“The increase in taxes is working. We are absolutely okay with what we did,” Mr Muhakanizi told MPs on the Finance Committee of Parliament.ShortcomingsYet for all the brilliant and hard work, fiscal discipline and rigour, it is not possible that nothing could have gone wrong.

Yes, some things did go wrong.In April 2018, for example, he found himself on the wrong side of reason when he defended the planned irregular payment of Shs11 billion to businessman Hassan Basajjabalaba. The money was supposed to compensate for losses purportedly suffered by the businessman in his ultimately botched attempt to grab prime land belonging to Uganda Broadcasting Corporation.

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