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DRC: A Report published today says Getler’s Mineral Royalties daily is the double of Messi’s salary!

Again, the investor and mineral licensing powerhouse in the Democratic Republic Congo, Dan Gertler is even more under fire after the revelations of his illicit trade during the recent years. Now, the formula and the amount of cash he gets from the foreign mineral extraction companies are paying for their passage to him. This as the deals between Getler and Kinshasa authorities are left in the dark. Whatever deal they have, certainly Getler is earning fortunes without doing more, than being connected to the Joseph Kabila government.

This report shows important facts and also bring certainties of the assumed fortunes made by Gertler, even as he is sanctioned and his corporations. Clearly, the mineral extraction is profitable in the midst of insecurity and civilian despair in the republic. While the businesses and the affiliates are eating, the public are fleeing militias and the army itself. The state is not serving the public, but the companies and the persons who has secret deals with the government. It is vicious and the international community let them, even as it is sanctioned, the acts are still appearing and has the ability to earn on it.

Based on a number of assumptions, Resource Matters estimates the royalties to the Gertler-affiliated companies can be expected to amount to about $110 million for 2018 and nearly $100 million for 2019. This means that Gertler risks losing about $270,000 in revenue from Glencore’s operations per day. That is nearly twice as much as the world’s best paid soccer player, Lionel Messi, makes at Barcelona” (Resource Matters, P: 6, 2018).

Glencore therefore has to balance the risk of increased pressure in Congo versus the risk of ending up on the U.S. sanctions list. This means that the royalty payments constitute a significant risk, whether they stop or continue. Investors should be able to know how Glencore will deal with this going forward. U.K anti-corruption organization Global Witness has repeatedly lamented the opacity of Glencore’s royalty payments to Gertler’s companies and called for better disclosure” (Resource Matters, P: 8, 2018).

This conclusion was somewhat hasty. Gertler’s gold companies do not explicitly feature on the sanctions list, but that in itself does not matter. Under the U.S. Treasury’s so-called 50%-rule, any company owned at least 50% by a sanctioned entity is considered, per se, sanctioned because it is deemed to be “blocked property” of the sanctioned person. Both Moku Goldmines and Société Minière de Moku-Beverendi are at least 50% owned by Fleurette, a sanctioned entity, and should be considered sanctioned, too. In addition, the fact that no payments are made to Gertler does not shield Randgold from the risk of being sanctioned. The U.S. Treasury could qualify Randgold’s exploration activities at Moku-Beverendi as ‘material support’ to a sanctioned entity and impose sanctions on Randgold” (Resource Matters, P: 9, 2018).

Gertler might be in hot-water and the Kabila government might have decisions to make concerning their alliance. Still, the trades and contracts has been made, if the Kabila government suspend and revoke it, they might have to pay a settlement. While wait for a new company or middle-man to secure a grand deal for the licensing. We can question if the loyalty will be there, as long as the sanctions might hit the companies who works with Gertler. Because, they do not want to lose the profitable and secure delivery of the cobalt and other minerals in the Republic.

Surely, Getler don’t want to miss his winning ways and his double earnings of Messi. He want it and doesn’t care about how. Getler just continue to score and get contracts, which makes his giant fortune. It is by the blessing of his connections in Kinshasa. Peace.

Reference:

Resource Matters – ‘The Global Magnitsky – Effect How will U.S. sanctions against Israeli billionaire Dan Gertler affect the DR Congo’s extractive sector?” (February 2018).

Kenya: Statement by the National Treasury on the Issuance of the Eurobond (22.02.2018)

FIFA SG Samoura sends out early warning to the Football Associations on the bidding process for the 2026 World Cup!

FIFA under the new Secretary General Fatma Samoura are trying a new approach considering the start of the process, when getting the host nation for the FIFA Football World Cup 2026 after the biggest frauds and kickbacks of late concerning South Africa, Qatar and Russia. Now, the organization after the case against itself in United States and the fall of Sepp Blatter. Surely the new FIFA President Gianni Infantino wants a change too! They are trying to swiftly change the organization, that is why Samoura has sent a letter to all Member Associations, to follow the 5th Principal in the Bid Rules of Conduct. Where it says:

“(i) conducting their own activities in relation to the Bidding Procedure in accordance with basic ethical principles such as integrity, responsibility, trustworthiness and fairness; (ii) rejecting any attempt to be influenced in relation to their function and obligations in relation to the Bidding Procedure; (iii) rejecting any gifts offered by any Candidate Host Associations, any of their bid consultants and/or nominees, unless such gift: a) only has symbolic or trivial value; b) excludes any influence for the execution or omission of an act that is related to their official activities or falls within their discretion; c) is not contrary to their duties; d) does not create any undue pecuniary or other advantage; and e) does not create a conflict of interest;” (2026 FWC Bidding Regulation).

In the letter from the Secretary General Samoura, it states very clearly to all:

“Notwithstanding the clarifications below, in order to ensure a fair and transparent bidding process, all football officials shall always conduct all of their own activities in relation to the bidding process in accordance with basic ethical principles such as integrity, responsibility, trustworthiness and fairness. Therefore, irrespective of the clarifications below, it must be understood that the Ethics Committee, as an independent judicial body, may, on its own initiative and at its full and independent discretion, decide to investigate whether any activities in connection with the bidding process are of an unethical nature by, for instance, creating an undue influence on the bidding process in violation of the FIFA Code of Ethics and further specific rules contained in the Bid Rules of Conduct pursuant to article 5 of the Bidding Regulations” (Fatma Samoura – ‘Further guidance on the Bid Rules of Conduct for the process to select the host(s) of the 2026 FIFA World Cup™’ 19.02.2018).

The FIFA Secretariat and Central Governing body is sending out a warning as the process is starting. Since they don’t want to have knowledge of or knowingly have people acting in bad faith or trying to corrupt fellow members. Even if that is the history of FIFA and the leadership of Joao Havelange and Sepp Blatter. They have done it with fineness and used time to fix the associations in their way, so they could find ways of using sport to get wealthy. That is well-known. Surely, Samoura want to change that paradigm and therefore write this letter to secure the process.

And you know that FIFA is afraid of getting corruption scandals, when Samoura has to type this:

“Accordingly, if a confederation, a regional association, a grouping of member associations or any individual member association is approached by a bidder offering a presentation of its bid, it is in principle fine to accept such an offer as long as the principles of fairness and transparency are respected. Therefore, in such an event, please notify FIFA in writing about any such offer from a bidder, but please also accept the offer of a presentation by the competitive bidder, offering both bidders the same format and attendance” ((Fatma Samoura – ‘Further guidance on the Bid Rules of Conduct for the process to select the host(s) of the 2026 FIFA World Cup™’ 19.02.2018).

So now if let’s say the United Kingdom wants to have the bid in Europe and the want to present it to France and Germany, than they have to notify FIFA and also allow the same delegation to travel to another bidder. Not make it exclusive, to make sure the process isn’t paid off as in the past. This will make the bidding process more hectic, but hopefully more transparent. Since it has been filled with PR Stunts and sudden pay-offs in the past, but not shown in public what is happening behind the scenes.

We can hope that FIFA is trying to change and not using words flamboyantly, to trigger the press and associations, that the process will be transparent and fair. However, their history is known of paying of minor or poor organizations to get the needed votes, also to make sure the confederates of several regions are getting a slice. To make sure the bidding nation get the swinging votes. We have to see if this can be altered, if the corrupt machinery can be stopped. That would be interesting, even if you take the head, the body is still the same. We just have to wait and see, if some skeletons comes out of the closet or not. Peace.

Maldives: LAM raises concern over the effect on Tourism due to political issues (21.02.2018)

When did it become okay? That the Politicians of our time are richer than businessmen!

There is no art which one government sooner learns of another than that of draining money from the pockets of the people.” Adam Smith, The Wealth of Nations

Something is wrong in our day and age. When the Members of Parliament, the politicians and the appointed leadership are richer, than ever before. When the politicians and the ones representing us are richer than the ones building factories and owning businesses. That is just wrong, that is not right. It wasn’t supposed to be like this.

The Members of Parliament, the politicians, the councilors and the local government officials wasn’t supposed to be the kingpins and have the biggest mansions. They are supposed to represent us and make sure that society are working for all of us. Maybe with different ideology and party affiliation, but their existence and their livelihood depend on the idea, that they are representing us. The politicians are supposed to be there for us and be there as guards. And if we don’t like they way they are guarding our society, we change them with someone else in the next election. That is how it is supposed to be, right?

However, that is not the case in our day. To many places they are honorable, they are noble, they have more businesses than businessmen, they have more investment too. They are using their connections for government tenders and also trading with State Owned Enterprises (SOE). All of this so they can sponge off the state and secure even more profits on the dime of the citizens. Instead of delivering and representing, they are become traders of faith and billing society too.

That wasn’t the intention. It wasn’t supposed to be rigged elections and fixed results. That makes sense for the leadership not representing the people or delivering. Since they don’t have to, it is just a charade securing the leadership “legitimacy” with an election, but the people didn’t elect them. That was ghosts, bots and algorithms. They have no interests in caring or delivering. Neither has the ones who used a coup to gain power. They fought there for their own will, not depending on the goodwill and trust of the public.

There are so many leaders and MPs, so many parliamentarians who seems more preoccupied with their SUVs, Mansions, Salaries and expense accounts. That they are not considering the troubles of the working people, about the pensioners and the ones unemployed. They are just happy go lucky, that the fortune hit them. The poverty, the lacking services and the misuse of power doesn’t mind them. These people could make it on their own, that is why they are unfortunate. Not that it’s the MPs, the Presidents or the representatives who didn’t see who they represent.

When we forget that they are representing us, they are representing the ideas of our society and the will of change that is needed. There is always need for change and need for productivity. There is always need for service delivery and making sure the government are accountable. However, when the representative is more keen on their own pockets and getting connections to enrich themselves. Then they loose their meaning and their purpose. They are then marionettes for the elites and the corporations. The politicians becomes stooges and relics instead of the representing the people of their constituency.

This has to change, we have to change this, we cannot accept that the MPs, the politicians are taking us for granted and using us for their own gain. They are there to serve, unless they don’t change. We have to serve them, we have to demonstrate and boycott their well-wishers. We cannot just look at these leaders of ours and be happy with it.

If they wont represent us, then we have to get fresh blood. Get people who actually care and give a damn. Because the ones in our time are greedy, selfish loot of people, who needs to recognized and be dealt with, before we are dealt with and we will be left behind. Peace.

Minister Kasaija are borrowing more money, because of a shortfall he say!

Uganda is your country. When you’re writing a story, ask yourself if it is going to build or destroy Uganda. Is it going to bring peace or anarchy?” (…) “I’m advising my good friends of New Vision that for the good of your country, do not publish stories that are not true. My telephone number is known by everyone, call me. If I can’t respond then wait, because I’m also a busy man but I’ll respond. Let me repeat, for the good of your country, please don’t publish false stories” – Matia Kasaija, Minster of Finance.

I know, some people get touchy when stories comes out. Out of the woodworks suddenly the questions arise and people are thinking? Why? Why does the state borrow even more funds, is it needed even? How come the State, who is already borrowing heavy sums of money from all sort of bilateral, multi-national banking institutions suddenly need to borrow money from domestic sources. That question should be asked and need to questioned. Since the reality of the matter, isn’t what it is used to, since this government cannot even explain where the PTA Loans went. It is amazing how things are going, that the State can take up loans like this after already no accountability on the previous ones. The same minister is already questioned for the loans done with PTA loans, who knows what else that has gone missing, as the GAVI and CHOGM Funds of the past suddenly vanished into thin air, hard not imagine that this could happen again.

“Yesterday, Monday 19th February 2018 the New Vision Newspaper front page lead headline stated that Government is borrowing UShs. 700 Billion to pay salaries for public servants. I would like to inform the General Public that this story was an exaggeration of the proposed borrowing that I laid before Parliament. We borrow to a large extent to finance capital development and production. In my letter dated 9th February 2018; I submitted a proposal to Parliament seeking authority from the House, in accordance with the requirements of Article 159 of the Constitution of the Republic of Uganda, to borrow additional Ushs 736 Billion from the domestic financial market to finance the Budget for FY 2017/18” (Uganda Media Centre, 2018).

This money will go to “development and production”. We can wonder where that is, if it is the bills of Gen. Salim Selah hotels as the seedlings delivered by, Operation Wealth Creation (OWC) is lack-lustre at best. Who knows where all the pooled monies for NAADS are going, but clearly not all of it is not going to micro-economic benefits for the society.

Shortfall is clearly there and the weak economy, that has been juiced up and run like a drunk seaman. That is why as the last end of bottle of beer is there and the need to go down to the bar and buy more brew on credit. That is the ordeal of the day. It is not a narration by Morgan Freeman and a beautiful tale of forgiveness and hope. No, it is a tragic day of even more debt, this time internally and used by the state. Since they are embezzling and taking away funds from the public. This will create more pressure for liquidity in the banks who borrows to the state, as this is taking from their own reserves to bailout the state. Eventually, the state has to find other funds to pay back the banks.

It doesn’t take a wise to understand, that adding more debt, while growing debt and also paying interests is a vicious cycle. They are recycling loans and adding more interests and more debt to be repaid in due time. We can just pound on that and wonder why the state hasn’t made a budget that is within the reach of the economy, but the government isn’t like that. They are spending money like there are no tomorrow. Having one beer, another one and another one. Now it’s drunk and don’t want to lose the edge, the steam and the good feeling of tipsy. The state doesn’t want to get the hangover and deal with the cure. They just want to shug more bottles and hope no one notice. Peace.

Reference:

Uganda Media Centre – ‘Statement on the proposed government borrowing of UGX 700 billion #UGCabinetResolutions’ (20.02.2018) link: https://ugandamediacentreblog.wordpress.com/2018/02/20/statement-on-the-proposed-government-borrowing-of-ugx-700-billion-ugcabinetresolutions/

Stanbic Bank Uganda – Public Notice: “Corporate Re-Organization of Stanbic Bank Uganda Limited” (19.02.2018)

U.S. Treasury Report says expanding sanctions could hurt Russia: However Trump is afraid to ruffle their feathers!

Seemingly the United States Department of Treasury has worked on a report that explains the possible impact of the sanctions that the Congress would have put on the Russian Federation. Instead, this will not happen, because the President Donald J. Trump and Secretary of State Rex Tillerson. They are afraid of rocking the boat and actually do anything about it. Like they have traded their soul for loyalty to Kremlin, instead of working for the American government. It is seemingly so, since they have not been able to follow the Congress attitude and neither with the general opinion of the people of the United States. Who has loyalty to the republic and not the Russian Federation.

(U) The modifications to Directive 1 made on September 29, 2017 were required Ьу Section 223(Ь) of CAATSA, and as required Ьу that section, took effect on September 29, 2017, the authorized tenor for new debt issued on or after November 28, 2017 is 14 days or less. U.S. persons are therefore prohibited fоr dealing in new debt issued bу, on behalf of, or for the benefit of persons operating in Russia’s financial sector named under Directive 1, their property, or their interests in property if the debt’s maturity period exceeds 14 days. Other tenors apply to debt issued between July 16, 2014 and November 28, 2017. Directive 1 also includes а prohibition on dealing in new equity issued Ьу, on behalf of, or for the benefit of persons operating in Russia’s financial sector named under Directive 1, their property, or their interests in property. This report does not further address the equity prohibitions of Section 242 of CAATSA” (Department of the Treasury, 2018).

Expanding Directive 1 to include dealings in new Russian sovereign debt and the full range of related derivatives would likely raise borrowing costs for Russia; prompt Russian authorities to alter their fiscal and monetary strategies; put downward pressure on Russian economic growth; destabilize financial markets, including Russia’s repurchase market, which is critical for overnight bank funding; increase strain on Russia’s banking sector; and lead to Russian retaliation against U.S. interests” (Department of the Treasury, 2018).

Seemingly after this, the US Senate and House wanted the Russian Federation to feel more effect of the sanctions. The reasons for why you have sanctions in the first place, to hurt the ones sanctioned. If not the sanctions are not working and not stopping the sanctioned individual or company, even nations so they have to change behavior. However, at this stage the United States seems more on the defense. Than actually thinking of hurting the Federation who acted with swift activity in their election.

The United States should act and use tactics that hurt Russia. Especially, since they have used all sort of ploy to manipulate the electorate and elections towards a candidate of their choosing. If that isn’t interfering and insulting to the US. Then nothing is, the US should act upon it and use more sanctions to add more leverage. So that Russian Federation actually acts differently.

It is strange that the United States doesn’t want to use their tools and their tricks to hurt Russia. Especially after what they did in 2016 and what sort of knowledge they do have on the Russian interference. That was the reason why President Barrack Obama in the first place put new sanctions on Russia. Now, President Trump won’t do it and cannot stomach to pursuit the wishes of Congress and actually sanction Russia. That is weird, especially if United States wants leverage over Russian counterparts. That would seem natural. Especially if Trump is the deal-maker he talked about during campaigns, but not shown since.

However, it seems with day after day, that Russians has Trump cornered, since he will never blame or act upon Russia. He will attack anyone else, but not look into what the Russians did with elections. There is to many questions, but if the Americans had a possibility to make a difference and hurt Kremlin. The added sanctions would. Trump seems like indifference and its rare. Peace.

Reference:

Department of the Treasury – ‘(U//FOUO) U.S. Treasury Report on Economic Impact of Russian Sanctions)’ (2018)

Opinion: Jubilee plans to grow the debt even further with a new Eurobond!

The Jubilee and the Uhuru Kenyatta are already in a slippery slope politically and aggressively as a Dictator, who force himself on the public and uses the government institutions to himself. While promising empty promises with the 4 pillar agenda. That his government are planning to grow debt, you can wonder why, since the growing debt makes the state misuse the revenue, as already now the 20%. That is one fifth of the revenue going directly to pay debt. If that isn’t sounding worrying, then the state should find other ways to gain revenue and not take another Eurobond. Especially with the political climate and the Moody’s downgrade, who is a signal to the world that the premiums and points on the dollar will be worse.

However, Kenyatta isn’t pounding on the people. That is why the news of new Eurobond isn’t positive news for the Republic. Just read the report in Bloomberg, before collected information on the growing debt.

The ministry also chose Standard Chartered Bank Plc and Standard Bank Group’s Kenyan unit Stanbic Holdings to help with the sale, said the people, who asked not to be identified because the appointment hasn’t been made public yet. Treasury Secretary Henry Rotich didn’t answer two calls to his mobile Wednesday, while Treasury Director of Budget Geoffrey Mwau declined to comment when asked about planned sale on Tuesday. The Treasury will seek to raise $1.5 billion to $3 billion in bonds, with a tenor of up 15 years, according to two of the people. JPMorgan, Citigroup, Standard Chartered and Stanbic declined to comment” (Changole & Martin, 2018).

To take the numbers from Focus Economics who said the Public Debt of GDP in 2012 was 42%, the first year of Uhuru Kenyatta it become 44,5%. In 2014 it had been risen to 45,9% and after the first Eurobond, the rising debt in 2015 was 50,4% and in 2016 it became 53,5%. Therefore, the estimates of the new bonds will make it rise in 2018/19 until about 60%. This combined with the state will pay 20% interest of all revenue to the old debt in 2018. Those has also risen from 13,7% in 2012/13. That is why the state is paying more and more back to creditors in interest, than actually serving citizens with needed services.

The Eurobond scandal still looms over Jubilee’s government and remains an unresolved mystery in the Country’s treasury records. Corruption scandals also sift down to the County governments with many county governors performing badly in the last 5 years. Many of these leaders have also been accused of corruption and misappropriation of funds meant for development projects” (Konrad Adenauer Stifung, 2017).

You can wonder why the JP Morgan who was implicated in the first Eurobonds want to repeat a corrupt saga again and take responsibility for making the Jubilee able to eat directly from loans they have provided. So even as the elections of September 2017, the government still couldn’t verify the usage of the previous Eurobond. Therefore, the International Banks and Bilateral Monetary Organizations shouldn’t help this government, as they have triggered straight looting of the state. If it wasn’t so, then the state should have the invoices and proof of the used funds from the other loans. However, that is day dreaming and possibly dropped into the artificial dam around the home of Deputy President William Ruto.

For now, we can question the Kenyatta and the Jubilee government will to take up new loans. Because this will add debt, growing rates and because of the political climate, the cost of the loans and the interests rates. The presidency and the analysts at the Ministry of Finance should care and be worried, but I think they are eating of the plate too. So they don’t care about the next term or the future. Since they are making it worse for the coming generations to repay debts and they mature, and the state are losing points on the dollar. Because of the ruthless actions of the Jubilee against the opposition. That will also cost citizens, since they are now paying more for the second Eurobonds. Peace.

Reference:

Changole, Adelaide & Martin, Matthew – ‘Kenya to Pick Citi, JPMorgan to Advise on Eurobond Sale’ (07.02.2018) link: https://www.bloomberg.com/news/articles/2018-02-07/kenya-is-said-to-pick-citi-jpmorgan-to-advise-on-eurobond-sale

Konrad Adenauer Stiftung – ‘Reporting on Kenyan General Election 2017: A month to the polls’ (August, 2017)

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