Uganda: Deficit financing is creating an evil circle financially [72% of revenue spent on debt repayment!]

By implication, if sh15.7 trillion for debt service-related expenditures is subtracted from the sh21.9 trillion the Government will have generated in revenue collection, it means that 72% of the country’s revenue collection would be spent on debt repayment. The committee raised concern that the high rate at which government is borrowing is not commensurate with the low level of increasing government revenue collection and, therefore, violates the country’s charter of fiscal responsibility. The report indicates that as of June 2020, Uganda’s public debt had reached $15.27b, which is equivalent to sh56.9 trillion. Out of this sh38.9 trillion is external debt and sh17.9 trillion domestic debt” (Moses Mulondo – ‘Govt earmarks sh15.7 trillion for debt repayment ‘ 03.02.2021, New Vision)

The news on how the state got to repay old loans is coming out. As the Ministry of Finance, Planning and Economic Development (MoFPED) have put forward the budget for the Financial Year of 2021/22. This is initially telling stories on the revenue or tax base, which will be preoccupied or used for paying debt repayment.

Just to put things in perspective. This is the definition of ‘Deficit Financing’:

Deficit financing, however, may also result from government inefficiency, reflecting widespread tax evasion or wasteful spending rather than the operation of a planned countercyclical policy. Where capital markets are undeveloped, deficit financing may place the government in debt to foreign creditors. In addition, in many less-developed countries, budget surpluses may be desirable in themselves as a way of encouraging private saving” (Encyclopaedia Britannica – ‘Deficit financing’ (25.08.2015).

This here is telling the story, which the state media and others isn’t telling. Because, they are borrowing funds to cover up for the deficit. The deficit is created as a result of the rising cronyism and misuse of funds. These funds have to cover the bloated government and its staff. That is why deficit is created to fix the shortfall between the needed revenue and the expenditures of the state. They are using loans to cover and fix the lacking revenue of the state. If the state had enough funds through its tax-base, the state wouldn’t need these loans in the fist place.

However, the state have prolonged with this game over years. The state has used loans to cover its baseline and usage of funds. They have went out for foreign creditors to get enough funding. That shows that the state haven’t been fiscal responsible. They have misused the authority of the state and taken up loans, which now accumulate to over 70% of yearly revenue. While this is happening. The state and the Parliament is still issuing new loans and creating a bigger debt burden. That is what they are doing… and that cycle must stop.

Soon, all revenue will go directly to debt repayment. We know the state wants to have debt relief, but this is self-created by the regime, as they are borrowing for basic commodities and necessities. They are always loaning funds to build development projects and infrastructure, which will be costly. As funds are lost and misused in the building of these. That is why the price of road is so expensive and also projects in general. Therefore, the state is crewed over more than it can swallow.

That is why the state is deficit financing and its become a burden, which it cannot carry. The debt is not sustainable. When 72% revenue is spent on debt repayments. That shouldn’t be a thing, but that is fiscal policy of this regime and apologist cannot hide the fact. They have run down the state and taken up loans they cannot carry. Peace.

European Commission: Press Release – Relations with the UK: Commission proposes targeted contingency measures to prepare for possible “no-deal” scenario (10.12.2020)

Brexit: A place where nobody is winning

Holy mother of God what a mess it has been. Ever since the champagne at the beginning. The empty shallow promises and the ones sneering at the ones who dared to question the nay-sayers. Hell, there been some battles, some people resigning and three Prime Ministers. Also a whole dozens of changes to the cabinet from time to time.

Brexit, the gift that continues to give or the curse that continuing cursing. Well, this isn’t over yet. Even though it is close. No matter what happens. Everyone is losing. The United Kingdom has already lost leverage and lost markets. Companies have already fled, some on paper and others shifting production. While the same companies will re-sell their products on a later date in the United Kingdom.

The exporters and importers from the UK will have new hurdles, procedures and possible costs for every transaction and every product shipped. The UK will meet new requirements and be a “third country”. That will benefit a very chosen few, but the rest will get more expensive products. Also, extend the length and time at customs. The free-flow of goods and people will stop. Not be like its today. Therefore, the oven-baked deal isn’t that baked and ready for supper.

United Kingdom is not only hurting remainers, but Brexiteers alike. They are all hurt. These folks will struggle with the ideals of a United Ireland. Northern Ireland will be in a limbo. Gibraltar will get closer to Spain. Scotland want another referendum to be free from United Kingdom. So the Scots can rejoin EU. There is a whole bag of trouble.

Not to mention the Welsh industry and exports will be hit too. Not only hurt the financial sector in London. They have already felt the pain of funds, banks and others shifting to Dublin and elsewhere in the years after the referendum.

Therefore, the UK has lost before they even entered the finish-line. Auto-mobile industry with Honda and others have already cried out loud, but to no a-wail. The same has the steel industry with Tata in Wales. No, the HM Government is to proud to listen to the ones that actually employees people. Rather give a win to the radical right and the Brexiteers. Than actually help the ones who can feed you. The industrial juggernauts who has capacity and ability to read the room.

Boris Johnson rather risk it all for a cheap trick. A “No-Deal” will only sound smooth to a chosen few. To the ones who are staunch critics of Brussels. However, a no deal will hurt the bottom-line and make it a longer process for a Free-Trade Agreement with the EU. The biggest market of goods for the UK. This is why it’s foolish to risk it, but London clearly have more flex than brains of late. Just like Geordie Shore participants. A lot of tan, but not a lot wise-guys. Only the smug pricks whose arrogance cannot stomach an ordinary pay-check or live-hand-to-mouth.

This PM and Cabinet should live a few months on Benefit Street and seen the hardships for the ones falling behind and not participating in the growth for the elites. Then they might seen other policies and not just cutting back on the state. As they are preparing assaulting the state even more, by forcing a reckless falling out and not reaching a deal. Just to prove their balls to the public.

That is what the Tories are up too and in the mix of it. Just blame the EU and Brussels for making to hard of a bargain. That they couldn’t swallow it or feel they lost to much. Still, they are willing to loose even more. Just to suck it up for their pride as they are leaving the Union. Hoping the Union of UK isn’t being hit at the same time… well… it is … we just don’t know when that will start and the new fragmentation will go on.

Just like when you open one door into the unknown. You never know what is on the other side. It might be paradise or the living hell. It might be opportunities or challenges. Whatever the Brexit opened. It wasn’t better governance or betterment of the UK. No it was self-destruction mode. Piece by piece. Peace.

The NRM lacks Fiscal Responsibility!

There been so many times the National Resistance Movement (NRM) apologists and defenders have claimed the opposition lacks Monetary Polices. However, contrary to public belief or perception it seems like the NRM is failing on this themselves. It is very simple reason for all of this.

The NRM and the Government of Uganda, which is the legal entity and de facto legitimate state at the moment. Have the power to borrow, loan and get funding for their operations. They can budget and make monetary policies. The government can make it possible to inject and add stimuli to the economy as a whole. That is what is happening all the time, but it is also very important. That if they fail to do it properly. It can have dire consequences.

One key aspect the NRM and its government have failed over time is to show fiscal responsibility or balance its budgets. The NRM regime have been borrowing and been deficit financing. They are in a cycle of loans financing old loans. They are adding debt burdens to build roads, pay salaries and do basics of the state. While nothing having funds to cover the shortfall and the interests. This is why fiscal responsibility is so important.

On EconomicsHelp.org it states that Fiscal responsibility is defined as this:

Fiscal responsibility implies a government pursues the appropriate level of government spending and tax to:

– Maintain sustainable public finances.

– Ensure fiscal policy aids the optimal rate of economic growth.

– Maintain appropriate levels of public investment” (Tejvan Pettinger – ‘Definition of fiscal responsibility’ 13.10.2020).

It is very simple concept. To be fiscal responsible isn’t an revolutionary act. It is initially only spending the money you have and not spend other people’s money. Know what sort of revenue you do have and not expect a sudden miracle of funds appearing out of nowhere to cover a possible shortfall or lack of funds. This is how the NRM has practically operated.

They have needed loans for any sort of project. The NRM have tried to add their tax-base, but at the same time drained the economy. While spoiling itself and adding more and expenses. When they are not generating more natural income. The plus and minuses isn’t adding up. The state is also anticipating more loans, paying more interests and not paying civil servants.

Civil servants, the local government officials, the teachers, nurses and such needs their salaries to sustain a living. That salary pays the overhead, the food on the plate and other expenses. Some of this money will be returned back in taxes and VAT. Therefore, the state will return some of the funds.

This is why the state has really outplayed itself. When its living on borrowed money and donor grants. The state isn’t sufficiently run, when the funds dries up like this. When the state have to issue suspension of paying out salaries and expenses. Except for a handful of cronies, the army and law enforcement. That isn’t a sign of strength, but of weakness. This is basic governing.

The government who governs should be able to plan, secure and add enough revenue to able to pay salaries to its civil servants. If they are not paid? Why should they go to the office? They should be farming instead or work for a public company instead with their experience and skills. It is a waste to be a civil servant, if it doesn’t pays. The mortagage, the plate for supper and the UMEME doesn’t stop asking for money. The bills will continue to come. The landlord can knock on your door and give you an eviction notice.

That is why this is failing the basics. To not balance the budget and be fiscal responsible. It isn’t a magic masterpiece or an unbearable task. To explain what the NRM has done for years. Instead of spending within their means. They have instead been spending like an alcoholic, being buzzed drinking at the bar with no coins in your pocket, but hoping someone else is paying your tab. Peace.

Uganda: A halting economy ahead of the polls

The National Resistance Movement (NRM) and President Yoweri Kaguta Museveni, which is clearly struggling ahead of the polls in January 2021. The NRM cannot run away from the problems, as they have no overhead and isn’t fiscal responsible.

The NRM have already issued a budget of 39 trillion shillings for the Financial Year of 2020/21. They have also issued Supplementary Budgets, which has added more funds. Still, they have not covered the needed funds to expenditure. This is even as the NRM issued a Supplementary Budget three days ahead of this Budget Year and a First Supplementary Budget recently with big confidential expenditures. Therefore, the state has given itself funds and added expenditure apparently without having room to actually spend those. Because if it did.

This wouldn’t be the case:

The crisis has been unleashed by the permanent secretary to the Ministry of Finance, Keith Muhakanizi who says where things are heading, government is likely to pay salaries of only civil servants in the State House, Electoral Commission, Public Service and the Ministry for Defense. The other departments will be ruled out as non essential and according to Muhakanizi, most of the servants will be laid off till government recovers from the economic pandemic” (Emmanuel Busingye – ‘Exclusive: Only UPDF, police to receive salary as bankruptcy looms, 12.11.2020, Ekyooto Uganda).

This is being fiscally irresponsible. That the Ministry of Finance has to cut of expenditures and spending on state employees in the middle of a pandemic and an election. No matter when really… it is just wrong. It shows that they are not balancing the budgets. They are not showing responsible action towards revenue versus expenses. The state and the NRM is spending money they don’t have and which is squandered. Because, if they we’re using funds properly and had some sense. They wouldn’t be in this in the first place.

The state would not bank on funds coming from a weakening tax-base, expecting donors to bail them out and in addition expect multi-national organizations (monetary organizations) to give grants or loans. This is what the state has expected, also thought and used wrong projections of revenue. That is why they are here. If they had planned within their means and spending within reason.

It wouldn’t be cracking like this. However, the state usually have cracks and is broke after elections. Not in the middle of it. As the state needs funds to campaign and pay off political affiliates. They will give away cars, t-shirts and other things to the general public. Also, ensuring pastors, chiefs and leaders across the Republic campaigns for the President. That all costs and usually makes the campaigns expensive and breaks the bank.

This is irresponsible behaviour of the state. They are misusing their powers and their mandate. As they are anticipating people to work, but for no salary. As the state is not paying it out on time. When people have bills and need their salaries to survive. It is a dire need and the cash grabs of the cronies is eating the funds, which is needed for public servants like teachers etc. These are the ones left behind.

The NRM cannot act like its “Securing Your Future” or delivering “Steady Progress” when it cannot even carry its own expenses at times like these. Peace.

Opinion: The NRM expect partisan civil servants…

The National Resistance Movement ahead of the elections are saying to the civil servant, the ones working in local government and state organizations to support the government by default. Because, the officials of the NRM and the government are saying they are paying them. However, that is not true. They are not hired by the NRM, but by the Government of Uganda.

If Uganda is a democracy and there is free and fair elections. Than the state should be reflected all through the Public Civil Service. All walks of life should be there, both with faith and political association. Yes, there are laws that is barring the civil service from entering politics. As they are supposed to be non-partisan and work for the general public.

However, the statements made by Capt (Rtd) Tumusiime Bamuturaki, and the Resident District Commissioner (RDC), Lt. Col. James Mwesigye on Wednesday this week. Says a lot of their mismatched ideas of governing and governance. They are blending the ruling regime with who the government are.

The government and state shouldn’t be associated with one party. Even though it has been ruling it politically forever. Since, the civil servants should have the ability as any citizen to vote for whoever they feel and whatever they vouch for. They could vote for the opposition, though they are barred by law to be political active.

Still, the constitution allows them to vote in a free and fair election. The Constitution doesn’t state that they have to be loyal to the ruling regime. Because, the people is sovereign and they have the rights to associate themselves with any political party too. Therefore, the Public Service Code of Conduct article 50 is breaching with the ideals of the 1995 Constitution Article 29(e). However, is for some legal scholars to explain.

Still, any citizen should by default be allowed to associate with whoever they deem fit. If it is a clown, brothel owner, journalist, singer or farmer. Whoever they deem fit to lead and run the nation. They decide who they seem fit to do so. No matter what job they have or work it shouldn’t matter.

That shows how the intolerance of the NRM. That officials like Capt. Tumusiime and Lt. Col. Mwesigye is saying this. Not that it’s shocking. It is more of the same. However, it proves that the 1995 Constitution to them is only mere papers, but not law. Even if it one of their prides and joys. Which they don’t care to follow.

I’m sure these fellows couldn’t even find the article and explain themselves out of it. Nevertheless, they got to send warnings and intimidate civil servants. Who works for the state and isn’t something that is automatically for the NRM. The civil servant can decide on their own… they have a mind on their own and isn’t in debt to the NRM. These folks can decide and do what they feel.

The civil servants aren’t working for the NRM, but they are working for the state. That is a distinguishing difference, which the likes of Capt. Tumusiime and Lt. Col. Mwesigye isn’t able to see. Maybe their minds are jaded or the hunger for power doesn’t cease to boggle their train of thought.

However, these workers are free and can pick whoever they feel and rightfully so. If not, then they are slaving to master, instead of being human being with a free will. Which is something even the 1995 Constitution has given them. Peace.

Zimbabwe: Joint Petition to the President of the Republic of Zimbabwe, His Excellency, Cde Emmerson Dambudzo Mnangagwa (23.10.2020)

Kenya Medical Practitioners Pharamacists and Dentists’ Union: KMPDU Statement on Building Bridges Initiative Report (22.10.2020)

Opinion: Is Trump loosing all his leverage, if he doesn’t get a second term?

I know, the world is a crazy place in 2020. Where the soon up-coming elections is happening in November 2020. This is vital and important. Not only for the American public, but for the stakeholders of the Trump Organization and President Donald J. Trump.

The expose of the amounts of debt circulating in the Trump Organization is the overshadow of his campaign. Trump will have mature loans, which needs to be paid, because they are due on several of properties and other personal loans too. This is maybe why he has coined himself the King of Debt.

Not, only has he not to profitable business, estates and golf courses. However, the President has earned the most on licensing deals and not on real estate. That has been the reality of the business deals of late. This being both abroad and elsewhere. That the Trump Organization has earned millions of dollars on these transactions and deals.

The Trump Organization have had big payments from foreign dignitaries and companies happening because of the Presidents office. Since, he has the political office and has been the Head of State. This has made people live in his Hotel in Washington D.C. and used his other properties. Become tenants on his properties and possibly pay an overprice to be in the good graces.

This is a sort of sale of the White House and the Presidency. Because, the President and his business needs spenders to run. To be able to get through and have enough funds to operate.

It is bad enough that a supposed billionaire and a wealthy person on Manhattan, New York have paid nickel and dimes in taxes over the years. That he has possibly given one audit to the IRS and another to investors. This is to trick the numbers to ensure the best outcome at any given day. Instead of giving the real numbers and true value of the business at any given time.

If the loans and the debts are so bad as the media states. Then his “empire” and his businesses needs leverage to get through. He needs something to bargain the creditors and get other investors to bail him out. He cannot live on a prayer and hope his other family members hit a strike of gold. Since, they are leeching on to the business and continuing the enterprise. Just like he did. They are all moochers of this system and enlarging their names by being connected to it.

Therefore, the only way he can save this by date and by the maturity of the loans. To seal the debt and have a positive outcome. Is to actually get foreigners to bail him out and give them favourable policies. Trade foreign policies for deals, which enrich the President and saves his fledging company.

That makes sense and seems like a enterprise he would join. He will act like Republican and sing songs of “conservativism” or fake that. Just so he can trade policies for business deals. To save his own ass and by the skin of the teeth. That is his leverage. Because, his businesses and the ways operating needs this sort of play to get traction.

Since, the incumbent need the gravy train coming. Especially ahead of the mature loans, which is coming his way. If not he has restructure the loans and find ways to get liabilities moving. Even sell other estates to cover the payments needed.

Yes, this is bribing a public official and open bazaar corruption. However, that has been his game since he went into office. He has used the office to enrich himself and gain profits for his businesses.

Now that we know how dire things is… we can imagine that the old man doesn’t want to lose his leverage. The one bargain chip that makes sense and make dollars. Not that he can trade on his name or character after four years in office. Unless, he wants to sell merchandise to White Supremacist, Alt-Right, Qanon and the KKK. Peace.

The UTL Saga: The state salvages the debt to resurrect the Walking Dead

This Mango has gone through a lot. A former state company sold to Libyan investors and after the Libyan credit started to fail. The Ugandan Telecom Company (UTL) or Mango started to suffer too. The Telecom have been so hard hit that three years ago the state had to take it over.

There been so many twists and turns, where the company have been rumoured and speculations. Even the Minister and owners was speculated to moved to a shell company in Mauritius. Therefore, today’s sudden windfall and paying off debts. Is only bailing out a sinking ship and hoping it still doesn’t sink.

The UGX 45.6 Billions to the TDB (Eastern & Southern Trade & Development Bank). With this payment of this debt. The state is initially taking over UTL. This as they plans to make the UTL attractive to investors again. Mango haven’t been viable for years…

The Libyan Post ditched in March 2017 and since then it has struggled. The Libyans said the Government of Uganda needed to figure out a transformation plan for the UTL. It has clearly taken three years to figure this out. That nobody wanted to takeover the loans of a company, which haven’t invested in Telecommunications in years. Where the changes of mobile data, 3G and 4G networks for smartphones. The UTL haven’t had the funds or the ability to change with the times.

UTL is struggling because the state haven’t been able to save it before now. The regime needed over three years to figure this out. This with the steady leadership of Evelyn Anite, Frank Tumwebaze and Gen. Kahinda Otafiire interfering all at different times. While they have all done their part … it still took the Committee until now to secure payment for the debts. This should have been resolved earlier, if they intended to make it viable business.

In 2017, Anite even wanted all Ugandans for Patriotic reasons should have one UTL line. Maybe, she thinks everyone has a Airtel, MTN and could have UTL sim-cards in their phones. As the usual person should have at least double or dual sim-cards.

This all been a long lasting saga, which shouldn’t take this long. It is a fledging company. A former state corporation privatized and sold for scraps to Libya investors. Who earned on it in the good times, but ditched it when it got hot. Because, it been years since the UTL been viable and been a commodity.

This Mango is rotten. The Mango tree isn’t yielding any fruits anymore. This is a Walking Dead Enterprise. A Telecom who has no traction and is only throwing good money for bad investments. The money could have been burned in a street or thrown down a storm-drain, and it would still have more sense then investing it here.

UTL is being saved, but was it worth saving? Does it have any assets or financial liabilities worth mentioning? The competitors are miles ahead and the UTL needs huge investments to be in the same arena. Do they think another investor will spend money like a drunk uncle in a market, which is already filled with big companies. Who has small margins and higher taxes.

Therefore, the ones doing it … has to be regime “friendly” and willing to throw away good money for a bad investment. Peace.