Opinion: It has now been 425 days without a Governor of the BoU…

“The appointment of the Governor is a prerogative of H.E the President subject to Article 161 of the Constitution of the Republic of Uganda, which states that; the governor, the deputy governor and all other members of the board shall be appointed by the President with the approval of Parliament. To that effect, if the Governor dies, resigns, or otherwise vacates office before the expiry of the term for which he or she was appointed, the President may appoint another person in his or her office, and the person so appointed shall hold office for the unexpired period of the term of office of the person in whose place he or she is appointed. In the absence of the Governor, the Deputy Governor will perform the duties of offices of the Governor and Deputy Governor until the new Governor is appointed. Indeed, The Bank is currently operating efficiently under the direction of the Deputy Governor. He is supported by a team of Executive Directors and technical officers. The appointing authority – H.E. will the right time and moment, appoint a Governor. So let us wait on him” (Bank of Uganda, 23.03.2023).

Since the 23rd of January 2022, the Bank of Uganda has been without a Governor. The Deputy Governor has run the Bank since then. It has been 425 days or 1 year and two months without an appointed governor. That is really telling and compelling that the President haven’t appointed anyone for so long.

The Bank of Uganda is clearly not a priority, because By-Elections and getting people elected to office is coming first. The appointments of Speakers and other high ranking official roles gets pushed instantly. However, the BoU can just live without a head and a master at the helm. The Deputy can steer the ship and without question too, apparently.

You know the mission of the BoU when it states this:

“The Bank of Uganda (BoU) is the Central Bank of the Republic of Uganda. It was opened on August 15, 1966. It is 100% owned by the Government of Uganda but it is not a government Department.  Bank of Uganda conducts all its activities in close association with the Ministry of Finance, Planning and Economic Development(MoFPED). Bank of Uganda is responsible for the formulation and implementation of monetary policy as well as regulating & supervising financial institutions” (BoU – ‘Overview – About BOU’).

It isn’t just a run-of-the-mill organization, but a vital one. It is the place for monetary policies and uphold the national currency. The BoU is by just these things an important piece of the puzzle in the Republic. That’s why its extra weird that it has been without a leader or a governor for over a year.

This shows that the President is just waiting and waiting. That the President isn’t mindful or caring about the concerns of the BoU. When he cannot find a suitable character or leader to become the next the Governor. We know he kept the previous Governor from 2001 until his death in 2022. So, he enjoyed the loyalty and the work of the predecessor. However, that shouldn’t stop His Excellency from appointing another one.

“The appointing authority – H.E. will the right time and moment, appoint a Governor. So let us wait on him” (Bank of Uganda, 23.03.2023).

It is just foolish that the institution and national bank is waiting this long for a new governor… seriously this is bonkers. 425 days and counting without a head or the appointed chief. This just shows that the President doesn’t think this is important or that serious. Peace.

Opinion: A growing banking crisis…

“Let us not bandy words. We have [created] a new kind of bank. It is called too big to fail. TBTF, and it is a wonderful bank” – Congressman Stewart McKinney (1984).

“2023: Banks failed because they were holding Treasuries and MBS

1965: Banks failed because they were holding Certificates of Deposit” (New Low Observer, 14.03.2023)

The downturn and the insolvency of Signature Bank, Silvergate Bank and Silicon Valley Bank is all significant. It has structural issues, as well as fiscal and possible ramifications far from the shores of the United States of America. These banks are connected in a huge and vast system where liquidity and risky business transactions are happening accordingly. This is all spreading the risks, the investments in government bonds and other financial instruments to possibly secure profit for the shareholders. However, these can default, get costly and lose value when the bonds rates are growing and your stuck with old interests’ rates on the set-bonds. That’s what is happening, and you are losing the trust between the banks and the national reserves selling government bonds.

These American banks was allowed a lot of freedoms and liberties with their holdings. In such a manner, that was opened up in the previous administration. The Dodd-Frank Act was gutted and given the banks less regulations over their business. Therefore, they could take huge risks without any strings or conditions, neither a clear oversight body from the Federal government. Which in the end cost it dearly. In the beginning after lobbying for it… it was profitable and good business. However, now we are seeing the costs of these operations and why the banks are out of business.

These three banks will not only hurt the ones who used these banks for payroll, accounts for their operations and whatnot. There are so many companies and tech-start-ups that will be hurt by the SVB alone. This will further cause harm to the digital space and their innovations, as this part of the economy has already been hit over the last few years. Where we are seeing major companies already sacking and ceasing certain parts of their operations to cut away additional expenses.

We can see the damage it does when Credit Suisse is being hit and lose confidence. It is just showing how the dominions are hit and is in play. Now the burden of the liquidity pools, the customers taking out their funds or moving them to securer accounts. If not they are trying to find other measures or safer bets in the markets. This is all showing the weakness and the lack of funds within the banking system, which isn’t tied up to long-term bonds or yields; that isn’t as viable or valuable as they were last year. It is all ending up to a costly enterprise and the taxpayers are the ones that could lose it all. Since, the banks could be bailed out, but the small earners and customers of the banks aren’t the ones who is getting their monies back. No, that will be for the big-men and the ones who has risked it all – gambled the money and been earning vast profits in the sunshine, but they cannot manage the rain.

The crisis in the banking industry isn’t not only based on the lack of trust or the risky investments with people’s savings. No, it is the lack of cash on hand plus the initial investments into long-term bonds or financial instruments to supposed secure a safe return on the already invested funds in a bank. When the people and businesses hear news of lacking funds and lack of liquidity. They all bomb-rush a bank to take-out or move their funds. Which makes the bank insolvent, when it cannot meet its obligations or pay-out other clients of the bank. That’s when they are forced to close and end their business. This is what is happening these days and it’s crushing it.

We should be worried because this is spiralling in the markets. More and more places are fragile. There is a lack of fiscal funds and of due diligence in the banking sector. They have been able to get away with taking huge risks, but not having back-up or additional funds to cover losses. That is in the end biting the hands that feeds it. Since, they are risking the savings and the funds of businesses using the banks. While not considering the implications of investing these funds. Losing its value and struggling to get rid of old bonds or other assets, which have been the case yet again.

There should be worries on the horizon. The loss of funds, the sudden insolvency and the urgent movement of capital from one bank to another. The risks of further contagions across the banking sector is there. Not only because of the devalue of old government bonds, but the lack of fiscal funds for all the deposits or funds, which the customer is supposed to be able to get. That’s why the banks are failing, and they are not strong or has enough cash-flow on hand. Which is in the end destroying them from within. Peace.

Cameroun: Ministere des Finances – Communique de Presse (09.03.2023)

South Africa: African National Congress (ANC) – ANC Urges Andre de Ruyter to lay Criminal Charges (26.02.2023)

Eritrea: The Proclamations versus the Shabait response doesn’t add up…

3. Payment of Rehabilitation Tax

With the exception of those who have limited income and are exempt from paying income tax, any individual with income, shall according to the articles specified in this proclamation, has the obligation to pay a rehabilitation tax that takes care of disabled freedom fighters, members of the family of disabled freedom fighters and the martyrs, and those members of the society who sustain injury due to natural catastrophes” (Proclamation 17, 10.12.1991).

I don’t know about you… but when you have old texts and proclamations, which is the legal texts for the theme in question. There should be no shadow of a doubt what is going on. No one should be shocked if the Eritrean government is willing to lie or deceive. That’s what they are known for doing and this regard… they are doing it again.

Yes, the Ministry of Information or Shabait is trying to dismiss stories written about the involuntarily imposed tax. A taxation of the diaspora and a measure, which states that Eritrean citizens in the diaspora have the obligation and shall pay the tax. That differs from the wordings in the article or statement posted yesterday. The Proclamations of 1991 and 1995 isn’t aligned with the wording of Shabait. That should be compelling and telling about how they want it all to look like. Instead of being sincere and honest about the tax. They are instead acting holier then thou, because they don’t think people have access to the documents, which are the basis for the tax in the first place.

As it continues in the 1995 proclamation…

1. Short title

This proclamation is called “Proclamation Number 67/1995, a Tax Payment Proclamation for Eritreans in Diaspora Who Have Income”.

2. Tax payment

Any Eritrean citizen who lives outside of Eritrea and earns an income from employment, rent from movable and non-movable property, from business, from professional, or from a service charge of any other work or activity must be a 2% (two percent) tax of the net income on a monthly or annual basis” (Tax Payment Proclamation for Eritreans in Diaspora Who Have Income, 10.02.1995).

Now that you have read this part, which are blatant and direct. Both Proclamations was made by the Eritrean government and not grassroot organizations. This was government program or policy, which are a way of raising domestic revenue from outside sources. That is very clear and the intent is there. The proclamations are direct about who has to pay and such. In the 1995 proclamation the Ministry of Foreign Affairs is responsible for collecting the tax payment and have to use the entities or offices associated with the Ministry in the diaspora to do so. The Ministry later is ordered to directly deposit the tax payments to the Ministry of Finance and Development’s treasury account in the Bank of Eritrea. Therefore, we can see the scheme and tax is implemented with a clear goal.

That’s why you have to read these small fragments of the Shabait response on the matter.

Shabait Response in 2023:

The overriding desire was to imbue some structure and uniformity to what was effectively a burgeoning spontaneous and voluntary grassroots movement. Subsequently with clear objective of funding countries’ social and development programs, in 1994, the Eritrean National Assembly enacted the Rehabilitation and Recovery Tax Proclamation (RRT). The RRT Proclamation specifically targets only Eritrean citizens in the Diaspora, not citizens of other countries of Eritrean descent. The rate was fixed at a low of 2% of net income; in a country where personal income tax is progressive and reaches 38%.” (…) “The legality of the RRT is unambiguous, and purposes laudable. It represents a symbolic burden shared by the Eritreans in Diaspora with the people inside the country. In this sense, its historical, moral, humanitarian and patriotic contents and values are more significant and profound than its material dividend. In fact, the funds collected annually are modest that should not be overstated when compared with the government budget and expenditure on basic social services” (Shabait – ‘Eritrea’s Response to the SEMG, 2014’ 23.02.2023).

I find it very interesting the way and the manner of which Shabait portrays this. It is compelling and really deep, in the sense of despair and need to address it. Yes, the international scrutiny of it can cause a stir. That is only sensible, as the way the Eritrean government has created a diaspora and later taxing them. This is people who has fled the regime and after that they got to pay them too. It isn’t a noble idea or cause, but just shows what the GoE is willing to do with their citizens. Even the citizens who fled into asylum and sought refuge far away from the rulers of Asmara.

Therefore, the premiss for the tax is false. This isn’t done voluntary by the citizens in the diaspora. Neither is the whole thing made out of patriotic values or sentiments. Yes, the proclamations can speak of the martyrs and the families who lost their lives in the war of Independence. However, the monies are directed to the Bank of Eritrea and Ministry of Finance and Development. No one knows what happens with these funds after they are deposited. Neither are the any due diligence or accountability on the matter. The President and his men can spend these funds recklessly. Possibly create new asylum seekers by funding labour camps or keeping soldiers conscripted for years. Therefore, the Shabait must think people are stupid or blind.

This tax is only benefiting the elite and the inner-circle. They are getting a push and revenue to continue to operate their government. That is the gist of things here. While this tax is also a reminder where your loyalty lay and where your home is. So, the Eritrean government got a hold on you… even if you tried to flee into exile.

Home still haunts you and they want 2% of your earnings. You shall pay the percentages and the Ministry of Foreign Affairs are directed to get you to pay them. Peace.

Opinion: The iron sheets are a part of a bigger problem…

“IGG Beti Kamya says she will go after the cartel of government officials who have been incriminated in the OPM Karamoja iron sheets scandal. According to Kamya, any govt official who absconds her summons will be prosecuted” (The Kampala Journal, 21.02.2023).

The plights of the people of the Karamoja sub-region are just the beginning. Just like the never-ending story of fighting corruption. There is plenty of government agencies and organizations, which are based around the idea of fighting it. However, they never cease to stop it or have the mandate to do anything about it. That’s because the high-ranking officials, ministers and close associates of the President is profiting of the mischief and the corrupt behaviour in general.

You know these things are out of order and part of a bigger problem. When several ministers and high-ranking officials can eat of the plate of the needy ones in Karamoja. These are:

“1. Moriku Kaducu

  1. Rebecca Kadaga
  2. Jacob Oboth Oboth
  3. Rukia Nakadaama
  4. Matia Kasaija
  5. Kitutu Mary Goretti
  6. Obua Dennis Hanson
  7. Lugoloobi Amos
  8. Bwino Kyakulaga” (New Vision).

This is not some random names, but people with interests and high offices. These people are connected and part of Government. They are not just random thieves in a den picking out their next victim. No, they are the ones in-charge and appointed to serve the state. However, they are instead self-serving and thieving from the ones in need.

It isn’t shocking, but apparent problem, which has been created over years. The illicit trades, tenders and usage of government funds are haunting it. The ghosts, the misappropriated and missing funds are now coming back to roost. The loss of domestic revenue, donor funds and ability to loan to cover the deficits are creating a sustainable environment either.

No one can be shocked those ministers and high-ranking officials in the National Resistance Movement is robbing, thieving and siphoning funds away from government entities, neither that they are absorbing or “losing” important money for others in need. That has been done for ages and is part of the imprint of this government. In some regards, you could say it is the blueprint created by the predecessors of this government. This being the Sam Kuteesa’s or Gilbert Bukenya’s of this world. The ones who used to be in-charge and stole vast funds in their hey-day. Now the newest leaders are doing the same…

This is the NRM-Way, the NRA-Way and whatever you call it. That’s why money are lost, projects are stalled and prices are through the roof for government development projects. The costs and the burden to make it happen is astronomical… and you need a spaceship to get from Gulu to Kampala. There is no boda-boda or special who will suffice. Especially, in concern to the ones in dire need or in distress. They are the ones that you can take from. These are the people that isn’t able to be vocal or speak out. The same people have enough issues just to survive. In the meanwhile, they are not only victims of circumstances, but also of the greed of the ones in power. Peace.

Ghana: Ministry of Finance – Participation in the Domestic Debt Exchange Programme (14.02.2023)

Nigeria: Nigeria Governors’ Forum – Communique (11.02.2023)

Zambia: Ministry of Finance & National Planning – We welcome the Correction by the Financial Times (13.02.2023)

Somalia: Ministry of Petroleum & Mineral Resources – Press Release (28.12.2022)