Uganda: Will Indians’ economic success trigger a new racial explosion?

By Musinguzi Blanshe
Posted on Tuesday, 23 August 2022 13:09

Businessman of Asian origin serves a customer in his store in Kampala
Jay Shree (R), a businessman of Asian origin, serves a customer in his store in Kampala April 13, 2007. REUTERS/Euan Denholm (UGANDA)

This month marks 50 years since dictator Idi Amin expelled tens of thousands of Indians from the country, arguing that he was delivering the “fruits of independence” to native Africans.

President Yoweri Museveni reversed the order when he took power in 1986, criticising Amin’s decision and crediting Gujaratis for having played a lead role in Uganda’s economic development.

Thousands of South Asians have since returned, often finding business success that has benefited the country — while also fueling racial tensions and warnings of another explosion in waiting.

Railway labourers

The words Indian and Asian are used interchangeably in reference to natives of the Indian subcontinent brought to East Africa by the British colonial government. Some 32,000 labourers were brought to the continent under indentured labour contracts for construction of the Uganda railway starting in the 1890s.

Ugandan historian Samwiri Lunyiigo, author of the 2022 book Uganda: An Indian Colony 1897-1972, argues that following completion of the railway, the British gave Indians who settled in Uganda carte blanche to exploit natives through trade on behalf of the colonial government or their own behalf. That’s how they came to dominate Uganda’s economy, Lunyiigo argues.

Vali Jamal, who had to leave Uganda in 1972, is the author of the autobiographical study Uganda Asians. He has written that in 1972, South Asians were 1% of a population of 8 million, but garnered 50% of the country’s GDP.

That inequality in wealth prompted Amin to argue that Uganda would not be economically independent until South Asians were expelled. The decision was broadly popular among Ugandans, says Mahmood Mamdani, a scholar who was also forced to leave the country.

I realised that most Ugandans did not oppose the expulsion

Mamdani delivered a lecture on the subject at Makerere University on 19 August. He said based on his interactions with Ugandans after the expulsion, “almost all” responded that while “it was bad how Amin did it, nobody said the expulsion was bad. I realised that most Ugandans did not oppose the expulsion”.

Ironically, the expulsion was also popular among some Indians, Mamdani says. Many had felt trapped in Uganda, and the expulsion opened the gates of Britain for them: More than 27,000  refugees eventually emigrated to the UK.

When Mamdani went to London following the expulsion, he visited a friend’s flat. In the prayer room, a photograph of Idi Amin stuck out amid pictures of Hindu gods and goddesses.

“I said, what is this?” Mamdani said. My friend “turned to his mother, and the mother said to me: ‘Where would we be without him? He is the one who got us out of a terrible situation in Uganda. We have a future. He is like a god for us’.”

Back on top

South Asians began to be invited back to Uganda under Milton Obote, who became president a year after Amin’s overthrow in 1979. However, they only began returning in large numbers when Museveni rolled out a red carpet for them through all sorts of incentives.

Today, the richest 25 South Asians earn more than a third of the non-food GDP of Uganda, Vali Jamal wrote in 2020. They include:

  • Sudhir Ruparelia, whose net worth is close to $1bn. His investments include banking, insurance, real estate, the hotel industry and education. Uganda’s central bank closed Ruparelia’s Crane Bank in 2016, claiming it was undercapitalised;
  • The Madhvani Group of Companies, a century-old consortium owned by the Madhvani family, whose interests include agro-processing, sugar production, construction, insurance and the hotel industry. The group owns investments in Kenya, Uganda, Rwanda, South Sudan, Tanzania, the Middle East, India and North America; and
  • The Mukwano Group of companies, owned by the Amirali Karmali family. The Karmalis have stakes in manufacturing, real estate, banking, agriculture and the cargo industry.

Sylvia Tamale, who teaches law at Makerere University, argued during the 19 August lecture that corrupt agencies have contributed to Indians’ success through corruption and opaque dealings, to the detriment of Ugandans. She singled out the Departed Asians Custodian Board, a government agency set up to manage the properties of expelled Indians, along with the Uganda Investment Authority.

The custodian board has in recent years been accused of collusion for allegedly aiding expelled South Asians repossess properties for which the government had already compensated them. Tamale argues that the Museveni government’s special treatment of Indians shows the country has not learned from history.

Musveni’s National Resistance Movement (NRM) “did the same thing as the British: They privileged them [South Asians] at the expense of indigenous Ugandans”, Tamale says. “Such privilege is a major force of new racial tensions. Add to that, the lack of transparency and accountability of these two government agencies, and you have another explosion waiting to happen.”

Unresolved issues

Mamdani argues that the main feature that defines the South Asian question is that of citizenship. Thus, this should be the main focus of the discussion, before the issue of economic success.

For Museveni, Mamdani says, South Asians are investors, not citizens. With no political rights or obligations to the Uganda state, Mamdani says, Indians are permanent strangers.

“Asians, they are always on the run, never at peace,” he says. Meanwhile, in the imagination of many Ugandans, Mamdani says, Indians are just mercenaries.

Indians have, for years, agitated for recognition as a Ugandan tribe. Museveni has promised to grant their request. Once the question of who is a Ugandan and who is not is settled, Mamdani says Indian Ugandans “must get the same treatment as any other Ugandan businessmen, they cannot expect any privilege”.

It’s not that all the Indians are extremely rich… It’s that many of the extremely rich people are Indians.

However, Lunyiigo views the question of recognition as a tribe differently. He says it would be an endorsement of their exclusivity but also at the same time giving them space in Uganda’s constitution. Such recognition can’t go well with Ugandans who increasingly feel economic marginalisation.

“Now is the best time to be an Indian in Uganda,” he says in his new book. “Indians are doing much better than when they were expelled in 1972.”

Mamdani adds that citizenship is not just an Indian question, as many other minority groups in the country are also fighting for recognition.

However, unlike Indians, these other groups are often living in poverty. Wealth, Mamdani says, is not a race but a class question.

“It’s not that all the Indians are extremely rich,” he says. “It’s that many of the extremely rich people are Indians.”

Another question that still lingers in the minds of Ugandans is integration. Just weeks ago, the Uganda Parliamentary Forum on Indian Affairs asked the Indian community to allow Ugandan men to marry Indian women, as a way of deepening the relationship between the two groups.

Understand Africa's tomorrow... today

We believe that Africa is poorly represented, and badly under-estimated. Beyond the vast opportunity manifest in African markets, we highlight people who make a difference; leaders turning the tide, youth driving change, and an indefatigable business community. That is what we believe will change the continent, and that is what we report on. With hard-hitting investigations, innovative analysis and deep dives into countries and sectors, The Africa Report delivers the insight you need.

View subscription options