Uganda, May 8 -- I felt rather sorry watching President Museveni address city traders in an attempt to defuse a simmering dispute over tax. Most of what Mr Museveni said was factual and in line with correct policy.

His government scrapped regressive export taxes. A lot of production, for instance in agriculture, is not taxed. Imports of raw materials are tax-free. The tax on intermediate goods used in production is low, and so on. The underlying arguments were also cogent and in line with conventional wisdom. For instance, to encourage local production and import substitution, imported goods that can be made locally are taxed highly.

The traders were having none of it. Some of their leaders had already set a confrontational tone in thei...