MinBane

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Archive for the category “Budget”

Opinion: The government have money [unless your not a priority]

Let me just say, that tonight, this evening I am tired of reading headlines from various of Republics and Countries where they state they don’t have funds for pledges nor supposed basics during this global pandemic. Yes an global pandemic of COVID-19 or the Coronavirus isn’t a planned affair, unless your a conspiracy theorist who makes up ghost stories out of thin air. The rest of us lives in reality and try to figure the best way out of this.

What is boring in these troubling times is when the state says they doesn’t funds for PPE, Masks, Medicine, Salaries for Front-Line workers and whatnot. It is just an endless stream of costs, payments, allocations and expenditure the state has to carry. The imports of sudden extra equipment, ventilators and such. By all means its an expensive enterprise to cover this and ensure enough of the basics. Still, if the people, the citizens and the well-being of them matters. Than this should be shielded first.

However a reason for the lack of funds is that the state hasn’t this as a priority. This isn’t their breadwinner, this isn’t their ballpark. No, this is a side-show, a show where donors, where foreign donations and other comes in to cover the basics and the needed cover. In sunny days this is usually enough, because the ones getting hurt isn’t an priority and the ones whose VIP gets treatment abroad anyway.

That is why the Health Care system isn’t fully functioning nor has the capacity it should have in consideration per capita. The lack of enough beds, ICUs and such are now a contrast to the amount people in the dominion. Therefore, the state has lost the battle, if it gets bad quickly. The state cannot assume they will get help from elsewhere. Since they are already hurting themselves and are damaged by the virus as well.

So in this regard, when the state is complaining and stating lack of funds for this now. Its all about priorities. These states usually has no issues getting loans, grants and donations to cover deficits. They have no issues getting loans and supplementary budgets to secure new revenue-streams in sunny days for infrastructure and development projects. However, securing the well-being of the citizens and their welfare. That is burden it cannot shelter. Not to the max, not to the appropriate levels. That is just to expensive. Unless, a drunk uncle, snappy-nephew or an in-law is kicking in some remitted funds to shelter its own family at family. That is how this goes.

The governments can run their coffers dry, they can create huge deficits in the times of needs. They can boost their stimulus and use the credit, the forecasted revenue and the sales of treasury bonds. All of that cover it in the future, as the government and state can in practicality never cease nor get bankrupt. That as a sovereign state and therefore, has more gains and possible future income to cover debt and deficits.

That is why in these times of need, the government can prove where their loyalty lies. Either its with their citizens or its with the corporate agenda. They can show that solving it and investing in the Health Care system matters.

We can see if it is a priority or just talk. We can see by the pounds sterling, the US dollars or whatever currency spent on it. That its a priority or not. If they priorities it, they are risking a bigger deficit for now. If not, they are shielding the hurt and hoping it just goes back to normal quick. Peace.

Opinion: Mzee wants it to BOP his way

You want another rap? Nah, didn’t think so. Even if President Museveni wants a BOP. Not a DaBaby track or anything. His just approved the US$500 million dollars to the Republic. This was reported earlier this month and he approved it on the 6th of May 2020, but stamped by the Ministry of Finance, Planning and Economic Development (MoFPED) on the 11th of May 2020.

What is unique here is that this loan is given on the idea of “Balance of Payments”. Economist would know that this to cover the deficit and the balance the budgets. This is to ensure the state has enough revenue to already cover the deficit it has. That is why grants and loans comes to ensure the levels of revenue covers the spending. This means that the state has spend a hundred dollars, but only had 50 dollars in liquidity. So, to ensure the accounts are balanced, the BOP comes in and fix the shortfall.

Museveni writes this in the letter:

The money that goes to the Bank of Uganda is for “balance of payments support”. “Balance of Payments supports” does not only mean helping the country to “import more” but must also mean helping the country to “import less” by manufacturing these products here. With this undertaking, I approve the loan” (Museveni, 06.05.2020).

Because what the support does in the instance of the hundred dollars budget with a shortfall of 50 dollars revenue. The BOP support is the missing 50 dollars and makes it zero. Meaning, the accounts and financial flows should turn into zero. That means with the budget with its expenditure and its revenue its should be a nil or zero sum game. Therefore, when the President claims this helps local industry and less imports. I don’t see it.

Especially, if this is a BOP. Because, a BOP is a fixated way of balancing the budgets, not secure more trade. Its to cover deficits between expenditure and revenue. This isn’t a magical sphere of happiness and joy. This is budgetary measure to cover the shortfalls and lack of domestic revenue. To cover expenses that appeared or was already budgeted. Therefore, the need of Balance of Payments from the IMF to cover those.

This can be seen as a Financial Inflow to cover the deficit.

Like this:

-100 dollars budget/Import

+50 dollars revenue/Export

+50 dollars Financial inflow (BOP Support)

= 0

That is why, when the man says like this. Its a game of balancing the budget. Not putting a wand on the thing and swiftly changing things. This is just a financial measure to cover a deficit. A short-term solution to a shortfall. That will not solve anything, but by time. Not cover debt, not create a market nor make a big difference. Its just covering expenditure. Nothing else.

The President can make it seem so, but that wouldn’t be a BOP. That would be another instrument and another measure. Where the funds was actually meant for investment. This is covering the basics.

Let me end with DaBaby: “I needed some shit with some bop in it (Let’s go)” (DaBaby – ‘BOP’ of KIRK, 2019). Peace.

Burundi: Olucome – Communique de Presse No. 11 – Sur le Budget General de l’Etat Exercice 2020-2021 (12.05.2020)

Zimbabwe: Details on the COVID-19 Economic Recovery and Stimulus Package (04.05.2020)

Send Ghana: Release of 2019 Open Budget Survey (OBS) Results (30.04.2020)

Opinion: Mzee needs about 3 trillions for secret projects [or a slush fund for his re-election]

In the next financial year it is voted in UGX 2.8 trillion shillings in the Financial Year of 2020/21. This is very special in consideration as the whole budget has grown to 45 trillion shillings. Also in regards to things and rising debts, the state will have to pay UGX 4 trillions in interests payments. That is close to 10 % and the Confidential Expenditure is close to 7,5%.

This is really special that the President needs this amount for confidential expenditure for the FY 2020/21. This is ahead of the General Election of 2021. There is already a supplementary budget for COVID-19 as well. Which is also adding more confidential expenditures too.

That is deliberate. The National Resistance Movement (NRM) and the President is acting with a clear message. They are doing it and we know it. Because, the state needs a lot of funds for the campaigns, for the tours, campaign material, paying ads in New Vision and paying off chiefs, RDCs and whatnots. That is why the President is begging for cars now. He needs them for campaign season, he always buy cars for Pastors, RDCs and other appointed officials to get their loyalty.

So, who knows what they will use Three Trillions Shillings for, but surely it will be for selfish and entitled reasons. NRM and the President will misuse these funds. Just like they are spiking up the budget again. New heights as of the budget is estimated in loans and grants. This means, the state is only able to get revenue for the other half. Meaning 22,5 trillions are gotten from elsewhere and will be more interests to pay later. This is special, as the state is getting debt relief from the IMF. Not like they playing into it. Loaning more, while the IMF is offering relief. Such a brilliant move!

While the state is doing that, they are adding more and more confidential expenditure. This is done in manner and fashion, where we know that it will got devious things. That is why they cannot state it. If it is weapons for proxy-wars. If it is for paying side-dishes, cronies and “foreign investors”. Because, there is a lot of things ahead. The President has a lot of people to pay. A lot of campaigning to do and spend like a drunk sailor in the coming months. Especially after the lockdowns.

The President will use the LDUs, UPDF and Police Force. There will be means and pain, interference and intimidation to ensure another term in office. Not like he can do it with gained popularity at this point. He cannot even get enough to feed the poor. He cannot even find ways to properly serve the public or contact trace within the COVID-19 pandemic.

That is why he needs classified expenditures in the ranking of 3 trillions in the up-coming financial year. Since, he needs secret trading, procurement and usage of funds. These things will not have ordinary due diligence or oversight. The President can use it like his Donations Programs. He can spend it without question and suddenly give a blown-up doll to his wife or something. We don’t know, but that is what he could do.

The NRM has surely ensured they have secured the State House, Office of the President and Office of Prime Minister funds as well. All of this usually spins a big web in the election time. So, expect it to be a supplementary budget for the State House in 2021. As the water-bill, lack of funds for salaries for a few Presidential Advisors and so on suddenly hits the fan. This is partly covered by the Confidential Expenditures. However, it can go anywhere. We just don’t where. It could go to ammunition, Armoured Personnel Vehicles and whatnot. That would be shocking, even if it get some additional tear-gas too.

However, don’t expect these three trillions to make the society better, the Republic to prosper. This is slush funds for the President and his cronies. This is securing their fate ahead of the election. Peace.

Uganda: Kasaija plans to borrow $190m extra to cover a budget shortfall within two years!

Someone please call 911, yeah yeah (pick up the phone yo)

Tell them I just got shot down, tell them I just got shot down

And it’s piercin’ through my soul (I’m losin blood yo)

Feel my body gettin’ cold, oh, so cold

Someone please call 911 (can you do that for me)” – Wyclef Jean ft Mary J. Blige – ‘911’ , April 2000

In an election year in the Republic, the economy usually runs loose. The State House lacks suddenly funds, the President needs more and so fourth. That is standard procedure. However, on the 19th March 2020 Matia Kasaija has now announced that the plans to borrow USD 190 million to cover a short-fall of funds, because of the COVID-19 or Coronavirus.

This is deemed fit because of the pandemic and the financial disruption it has. Not that the Republic is alone in this. Other big states and plenty in the Western hemisphere is putting up packages of economic stimulus to salvage the economy because of it. So, the sentiment is understandable. However, the Ugandan republic is already heavily indebted and every single development project of late is covered by debts and debt relief. Not like its sustainable to take up nearly USD 200 million to suddenly boost a dying economy.

Here’s the quotes:

The low activity in industry and services sectors will result into loss of jobs further leading to a decline in economic growth and an increase in the level of poverty. The number of people that could be pushed into poverty is estimated at approximately 780, 000” (STATEMENT ON THE ECONOMIC IMPACT OF COVID.19 ON UGANDA,, 19.03.2020).

To deal with the financing gap in the Government budgets for FY 2019/20 and FY 2020/21, my Ministry will seek for a budget support loan on concessional terms worth US$ 100 million for FY2019/20 and US$ 90 million for FY202021 from the World Bank” (STATEMENT ON THE ECONOMIC IMPACT OF COVID.19 ON UGANDA,, 19.03.2020).

It’s seems like they have the perfect cover for rising debt. They need to do something, because lots of industries are shut-down or silenced by the lack of tourism and foreign exchange. Also, the diaspora is hit and can therefore, not remit enough funds to boost the economy either.

The MoFPED really want to stain the economy more. To quote the IMF:

““Rising debt puts more strain on the budget as more resources need to be allocated for interest payments. One shilling paid for debt service is one shilling less going to a school or a health clinic. The current ratio of interest payments to revenue is comparable to what countries with high risk or in debt distress typically face” (IMF – ‘Uganda’s Economic Outlook in Six Charts’ 09.05.2019).

By borrowing close to USD 200 million is really pushing the envelope. As the interests needs to be served, the grace period might be short, as the state of finances across the board is souring. Therefore, the state will not get to favourable terms with this. The World Bank also has all other states begging for funds and possible grants to push the set-back of the pandemic. Not like Uganda is the only one crying out loud and applying for money.

This money will not be free money, but tainted money. This sort of funds is needed, because the state wasn’t planned nor had the capacity to have a rainy-day fund. The Petroleum Fund has already been raided and therefore, couldn’t come in handy now. This is the mismanagement, your already in a negative spiral with more and more loans. This is just adding two more and they are big. That will cost in the long run. It might salvage today and tomorrow. However, it will scar the next generation. Unless, someone is forgiving like these entities was in the early 1990s. Before the state again took up huge loans to cover deficits.

This is just the way it is now. Not a good look. Understandable in the growing crisis. However, that shouldn’t undercut the possible pain it will bring in the future. Save the day, but cause more harm tomorrow. Peace.

A Second Supplementary Budget for 2019/20: Additional 462bn to classified expenditure

Keith Muhakanizi, the Permanent Secretary to the Treasury wrote a letter to the Parliament asking for a second supplementary budget for 2019/2020. This he did on the 28th February 2020. This time, the Ministry of Finance, Planning and Economic Development (MoFPED) is asking for an additional Ushs 662.337 billion.

The President is getting Ushs. 35,218 billion for Classified Expenditure. Since, the paperwork says nothing about it. It is either for his security or to fill his pocket. Because, putting into a account like this, open up a bunch of can of worms. This could even be spending for preparations for the General Election of 2021. Paying the ghetto children or another Operation Wealth Creation (OWC) campaign. We don’t know, but can only speculate, as his not buying a new jet plane nor buying new cars to his close family.

The Uganda People’s Defence Force (UPDF) is getting Ushs. 400 billion for yet another classified expenditure. Who knows if this goes to Gen. Salim Selah or the Special Force Command. Even if this is going to war-games of Philemon Mateke. We got no idea, as it is just specified as classified. It could go into buying more ammunition, tear-gas or even anti-riot equipment ahead of the 2021 elections. We cannot know, since the state doesn’t specify.

Ahead of an election, as there are plenty of things happening. This is a clear message. Even as the next budget will be really constrained by it. The budget of 2020/21 will prove it. If you calculate, you see I only looked into one piece of the supplementary budget. However, it is huge hunk of it. The load of the budget goes there. Not elsewhere.

While for instance, the run-away maids in Abu Dhabi only get Ush. 300 million shillings in comparison. That shows the priorities for instance. I just took one random thing on the 4 page list made by MoFPED. It still show the priorities of the state. Peace.

Breaking down Okurut’s Ghetto gimmic

It is that season again, especially in concern that National Resistance Movement (NRM) is trying its best to fit a new demographic and look like its sincere with their policies towards them. That’s what they do, when a new front and a opposition is fielded. This time the NRM and President Yoweri Kaguta Museveni are working hard to be viable for the Ghetto.

The Minister in Charge of General Duties in the Office of the Prime Minister Mary Karooro Okurut have written the piece in New Vision Newspaper, which was published yesterday. Today, I am breaking down the vital parts of this. As I have done similar in the past.

On the Ten-Point Programme:

These are the very same issues that motivated NRM’s liberation struggle, and formed the original blue-print of its governance agenda once it emerged victorious in 1986. Indeed, the restoration of democracy to enable popular political participation, the building of an inclusive, integrated self-sustaining economy to enable equitable access to economic opportunities for all, and the fight against of all forms of corruption that eat away at the State’s ability to provide social services were all high-ranking action points on the NRM 10-point programme” (Mary Karooro Okurut, 2020).

The first breakdown can be read in my old piece from 2014:

https://minbane.wordpress.com/2014/12/05/dismantling-the-ten-point-program/

This one here describe the shortcomings of the NRM and their lacking results in concern of that. The sort of issues, the NRM will never tell. A year later I made a newer and a fresher edition.

This is the second breakdown of the Ten Point Programme:

https://minbane.wordpress.com/2015/11/02/dismantling-the-ten-point-program-2015-edition-uganda/

Here I could easily assess that the NRM only could after 29 years in power say they had achieved 2,5 points. Which is a disgraceful attempt of doing their flag-ship operation and their mission for governing.

Now, I will go off on two themes from the Minister and address them. First her statement in the piece, than some evidence and my little comment. After those, I will end with a short final thought. Just take a look.

Statement today on HIV/AIDS:

In terms of social outreach, the biggest beneficiaries of President Museveni’s bold awareness campaign against HIV/AIDs in the early 90s that won him international acclaim were the poor and uneducated, who were either ignorant about the causes of the disease or unable to afford the scarce and expensive treatment at the time” (Mary Karooro Okurut, 2020)

On HIV/AIDS:

The severity of HIV/AIDS was driven home to Museveni even before he came to power in 1986.50 Within months of taking power in Kampala, Museveni’s first Minister of Health, Dr. Ruhakana Rugunda, was sent to the World Health Assembly in Geneva where he announced the HIV epidemic facing the country.51 This was in marked contrast to the attitude of other African leaders when confronted with the first hard evidence that HIV/AIDS threatened an epidemic” (…) “The donor community clearly played a role in this process. UNICEF was present at the inauguration of the NCPA and, in January 1987, the World Health Organisation sent a mission to lay the groundwork for cooperation with the government. In February, an issue of the Health Information Quarterly was published documenting the severity of the epidemic, which was followed by the publication of articles in the international press. That month, a second WHO team arrived, including Robert Downing who had played a role in identifying the presence of HIV/AIDS in the country, which assisted in drawing up a five-year action plan, published on 2 April 1987. This formed the basis for a donor conference organised by the Ministry of Health and WHO in May 1987 and the launching of the first AIDS Control Programme in Africa, which was based within the Ministry of Health. Donors pledged $6.9 million to fund it through its first year, with $14 million for the following four year” (Dr. James Putzel – ‘‘HIV/AIDS and Governance in Uganda and Senegal’ May 2003).

Comment: The donors brought this, the donors paid for the HIV/AIDS. Yes, the state was positive to do it and tried to forge a plan. So, the NRM has done a lot here and the numbers are getting better. Both with the amount of people dying per year and the progress of more people getting the treatment they need. But that would not be possible if the donor community, Multi-National Aid Organizations and the UN stepped in to intervene. The NRM would never say that, they would take the whole credit. Just like the Minister is doing and that is insincere. Like the GoU footed the whole bill. PREFAR states this: “Uganda has almost met its HIV resource need for the current (2014/15) fiscal year, with an estimated resource gap of only US$10-12 million (not including household financing sources). Under both scenarios, where the value of estimated available resources is assumed as constant over the next five years, the financial gap grows steadily over that period. By FY 2019/20, the resource gap under the NSP scenario is US$346 million, or an additional 60 percent of total estimated available resources (Figure 7). For the same year, the resource gap for the 90-90-90 scenario is US$409 million. In other words, the total value of committed resources for FY 2014/15 will only meet 62 percent of the total resource need under the NSP scenario and 58 percent under the 90-90-90 scenario by FY 2019/20. Over five years, the total resource gap will amount to US$964 million under the NSP and US$1.09 billion under the 90-90-90 scenario“ (Koseki, S., T. Fagan, and V. Menon. 2015. Sustainable HIV Financing in Uganda. Washington, DC: Futures Group, Health Policy Project, P: 9). So, we can see the lack of funds needed to fund the works still are coming elsewhere from. The state still lack it, but the Minister wants to take the credit for that.

Today’s UPE statement:

So were the beneficiaries of Universal Primary Education. In spite of the challenges, the now more than two-decade policy has been able to grow literacy levels in the country, from about 57% in 1997 when it was introduced to now an impressive 76%, according to the Uganda Bureau of Statistics” (Mary Karooro Okurut, 2020).

On UPE:

In the Ministry of Education, early NRM it was 13,7%, while the rise in budget facilitation in 1998 it became 24,7%. By the time of 2017/18 it turned down to 11,37% and by 2018/19 it declined to 10,87%. While UBOS claimed this not so far ago: “However, the education facilities including classrooms, teachers’ houses and libraries have not matched the upsurge in the number of pupils. In 2004, provision of classroom space remained an enormous challenge. Table 2.2.2 shows that, only about half of the pupils had adequate sitting space” (UBOS, 2006).

Will not dig deep into this one. Even at one point during the last two years, the President said. If you wanted your kids to succeed with their education, send them to private school. Therefore, the state has given up this project. It is to costly and the state doesn’t want to invest in it. They tried to a point, but somewhere they didn’t want to foot the bill or continue to fund the expensive school programme for all citizens. She cherry picks the good numbers, but not showing the reality of what the state has done. It is like they are living on past glories. Because that makes the NRM look better today. Which it doesn’t, because it has given up on the UPE. At least not worked sincerely to deliver it.

Final thought:

Enough of this nonsense from the NRM. Therefore, do yourself a favour and aluta continua. Peace.

Reference:

Mary Karooro Okurut – ’The NRM is no stranger to the Ghetto’ 27.01.2020 link: https://www.newvision.co.ug/new_vision/news/1514072/nrm-stranger-ghetto

A snap-shot into the Budget Framework Paper for 2020/21

It is budget season, this is out-takes from the Budget Framework Paper for the Financial Year of 2020/21. The Financial Year, which the General Election will be held during the early start of 2021. Therefore, the budget will be hit by this.

The Budget is estimated to be a total of 39 trillion Uganda Shillings. External loans to cover the budget is projected to be about 7 trillion shillings.

While the debt repayment is growing too. That is why in this budget year, the estimated interests payment is 1.2 trillion shillings.

In special usage, the Office of the President plans to spend 101,9 billion shillings under Public Administration. We got to address the needed Shs. 1,8 billion spent on medals, so that the President will not be embarrassed.

While the State House has the expenditure of 407 billion. From that one, I have a few snap-shots of the expenditure. First, the Procurement and maintenance of transport and specialized equipment including the Presidential Jet and Helicopter at Shs. 31.172bn. Which was put under the vote of the Public Administration. Shs. 34 billions on the ageing fleet of Cars at the State House. Also, Shs. 10 billion to refurbish the State House.

The Office of the Prime Minister set to Shs. 498,531bn.

In election costs, the total budgeted expenditure. The election will cost 1 trillion, 800 billion in security and another 200 billion shillings on the Elections Road Map. The Electoral Commission is budgeted to spend about 318 billion shillings on the management of the elections.

What the NAADs plans to do:

– 130 tractors and matching implements

– 1,000,000 hand hoes

Let see if the NAADs will keep their old promise, which was a big deal before the previous election. Even if you cannot find a budget post where the hoes are fitted in. Surely, they are hidden somewhere, but not somewhere obvious to the naked eye.

These was the most fitting things I found so far. Surely, there are plenty more juicy things. There wasn’t any water bills or explaining to do. The Budget Framework Paper is very straight forward. However, usually something daft get passed through. We really will see more.

But these are few tit-bits of it all. Peace.

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