We will pay compensation from future profits: the nationalisation of foreign businesses in post-colonial Uganda

The 1970 nationalisation of foreign businesses in Uganda was arguably the first time that a country would announce to pay compensation for nationalised businesses from the future profits earned by such businesses. Using two interrelated models, namely the Obsolescing Bargaining Model and Political Bargaining Model, and materials from three UK archives and the World Bank Archives, this paper critiques the negotiations between the nationalised businesses and the Ugandan Government during the period. It explores the role of the British Government in the entire episode, including the covert negotiations with international agencies such as the World Bank in order to ensure that UK companies got the best possible settlement from the Ugandan authorities. The result of this study shows that Uganda’s nationalisation programme was indeed hastily formulated and implemented, which joined to weaken the government’s bargaining powers and rendered the major clause of ‘paying compensation from future profit’ more idealistic than practical.

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This article by Abel Ezeoha & Chibuike Uche appeared in Business History, Talyor & Francis Online, 2022. DOI: 10.1080/00076791.2022.2151585