LAND, THE NEW SWISS ACCOUNT
Another innovation by Uganda’s eternally resourceful elite.
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 $6million, 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.