When Idi Amin Tried to Fix Uganda's Economy by Printing More Money

“You are stupid. If we have no money, the solution is very simple: you should print more money.”

Idi Amin (1923-2003) was one of the most ruthless and oppressive dictators of the 20th Century.

Many will remember Amin from the 2006 movie The Last King of Scotland, a historical drama that netted Forest Whitaker an Academy Award for Best Actor for his depiction of the Ugandan president.

While Western media often mocked Amin, who ruled Uganda from 1971 to 1979, as a self-aggrandizing buffoon, they tended to overlook the atrocities he inflicted on his people. He murdered an estimated 300,000 Ugandans, many of them in brutal fashion. One such victim is believed to be Amin’s fourth wife, Kay, whose body was found decapitated and dismembered in a car trunk in 1974, shortly after the couple divorced.

While historians and journalists have tended to focus on Amin’s dismal record on human rights, his economic policies are atrocities in their own right and also deserve attention.

A Brief History of Uganda

Uganda, a landlocked country in the eastern part of Central Africa, received its independence from the United Kingdom on Oct. 9, 1962 (though Queen Elizabeth remained the official head of state). The nation’s earliest years were turbulent.

Uganda was ruled by Dr. Apollo Milton Obote—first as prime minister and then as president—until January 1971, when an upstart general who had served in the British Colonial Army, Idi Amin Dada Oumee, seized control and set himself up as a dictator. (The coup was launched before Amin, a lavish spender, could be arrested for misappropriation of army funds.)

Among Amin’s first moves as dictator was to complete the nationalization of businesses that had begun under his predecessor Obote, who had announced an order allowing the state to assume a 60 percent stake in the nation's top industries and banks. Obote’s announcement, The New York Times reported at the time, had resulted in a surge of capital flight and “brought new investment to a virtual stand still.” But instead of reversing the order, Amin cemented and expanded it, announcing he was taking a 49 percent stake in 11 additional companies.

Amin was just getting started, however. The following year he issued an order expelling some 50,000 Indians with British passports from the country, which had a devastating economic impact on the country.

“‘These Ugandan "Asians’ were entrepreneurial, talented and hard-working people, skilled in business, and they formed the backbone of the economy,” Madsen Pirie, President of the UK’s Adam Smith Institute, wrote in an article on Amin’s expulsion order. “However, Idi Amin favoured people from his own ethnic background, and arbitrarily expelled them anyway, giving their property and businesses to his cronies, who promptly ran them into the ground through incompetence and mismanagement.”

Even as he was nationalizing private industry and expelling Ugandan Asians, Amin was busy rapidly expanding the country’s public sector.

The Ugandan economy was soon in shambles. Amin’s financial advisors were naturally frightened to share this news with Amin, but in his book Talk of the Devil: Encounters With Seven Dictators, journalist Riccardo Orizio says one finance minister did just that, informing Amin “the government coffers were empty.”

The response from Amin is telling.

“Why [do] you ministers always come nagging to President Amin?” he said. “You are stupid. If we have no money, the solution is very simple: you should print more money.”

Printing money was not an actual solution, of course, and the finance minister knew it. That’s why he fled to London instead of doing what Amin asked.

The Last King of Scotland no doubt found some other minister to print currency for him. Or perhaps not. Either way, by the time Amin was deposed, the real value of wages had collapsed by 90 percent in Uganda.

The Ugandan Lesson: Appetite and Star

It’s easy to laugh at Amin for thinking that printing more money would actually solve any of Uganda’s underlying economic problems. But Amin probably wasn’t interested in solving Uganda’s problems. Printing money was a way to solve his problems.

A casual reading of Amin’s life makes it clear he was primarily interested in his own appetite and star. Printing currency allowed him to feed his lavish lifestyle and temporarily solve certain political problems.

Years later, when he was in exile in Saudi Arabia, supported by the petrodollars of fellow tyrant Muammar Gaddafi, Amin was interviewed in his Jeddah flat by Orizio.

The journalist was probing for answers into the psyche of the “African Caligula,” but all Amin wanted to talk about was food—locals spoke of his love for “roast goat with cassava and millet”—and his huge new TV and all its channels: BBC. Libyan TV. Saudi TV.

“He reels them off as if they were verses from the Koran,” Orizio wrote.

Money for Nothin’

While Amin’s economic solution—print more money!—might look ridiculous to many of us, it’s worth noting that since March alone the Federal Reserve has increased Treasury securities by nearly $2 trillion. What this means is that, like during World War II, the federal government is sustaining vast amounts of spending by borrowing money from its own central bank.

Indeed, the federal debt now exceeds the nation’s GDP, and it happened about 20 years earlier than economists predicted just six years ago.

Ominously, we seem to be taking the wrong lessons from this. An emerging economic school of thought, Modern Monetary Theory, suggests that a wish list of government programs can be financed simply by creating more money. This is why, even as the federal debt careens toward $27 trillion, we see politicians proposing $46 trillion in new spending in the coming decade.

Life would be grand if printing money could actually solve our economic problems, but it doesn’t work that way. Money is simply a medium of exchange that makes it easier to trade; it has no real value in itself and is subject to the laws of supply and demand like anything else.

Increasing the supply of money devalues each dollar, a phenomenon most Americans witnessed in 2020 if they visited a grocery store. In the span of just a few months, between March and June, meat prices jumped by 20 percent, data from the US Bureau of Labor Statistics show. Prices for essentials like poultry and eggs also increased substantially.

Throughout history—from Ancient Rome to Weimar Germany and beyond—governments have found it convenient to use the printing press to purchase commodities, fund programs, and fight wars they can’t actually afford.

The most recent prominent example is Venezuela, who in 2019 saw its inflation rate hit 10 million percent. Socialist President Nicolas Maduro came to power in 2013, shortly before the worldwide plunge in the price of oil, a commodity Venezuela relied upon heavily to fund the state programs enacted by Maduro’s predecessor, Hugo Chavez.

Lacking the funds to finance these programs, early in his presidency Maduro began to print money, which simply diluted the value of Venezuela’s currency, the bolivar.

As a result, prices soared. By 2018, a two-pound bag of carrots was going for 3 million bolivars (46 cents). A roll of toilet paper: 2.6 million bolivars (40 cents). A five-pound chicken: 14.6 million bolivars. This economic phenomenon is called hyperinflation.

Pumping out new money also blows up economic bubbles that inevitably (and painfully) pop.

It’s easy to mock politicians like Amin and Maduro who saw printing money as a viable solution to their floundering economies.

But before doing so, Americans should take a careful look at some of the spending and monetary trends in their own economy. If they don’t, they may one day find themselves in familiar straits.