IMF Executive Board Completes the Seventh Review Under the Policy Support Instrument for Uganda (11.01.2017)

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Uganda’s economy has performed reasonably well in a complex environment.

WASHINGTON D.C., United States of America, January 11, 2017 – On January 5, the Executive Board of the International Monetary Fund (IMF) completed the seventh review of Uganda’s economic program under the Policy Support Instrument (PSI).1 The Board’s decision was taken on a lapse of time basis.2 In completing the review, the Board granted a waiver of the nonobservance of the end-June 2016 assessment criterion on the overall deficit of the central government.

The PSI for Uganda was approved by the Board on June 28, 2013 (see Press Release No. 13/78), and a one-year extension was approved on June 6, 2016 (see Press Release No. 16/263).

Uganda’s economy has performed reasonably well in a complex environment. Growth slowed marginally to 4.8 percent in FY15/16, reflecting muted sentiment in an election year and adverse global and regional developments. The current account deficit improved by 1 percentage point to 5.9 percent of GDP, and the Shilling has stabilized after a sharp depreciation in 2015. Growth is projected to nudge up to 5 percent in FY16/17.

Program performance under the PSI has been mixed. Tight monetary policy in 2015 has helped contain inflation in the target range, and the Bank of Uganda (BoU) has started an easing cycle in April 2016. Reserve cover remains adequate. Fiscal revenue and deficit targets were missed, reflecting lower-than-expected growth and election effects. Investment spending fell short, while current expenditure overshot. Structural reforms have progressed, albeit with some delays.

The banking sector remains overall well capitalized, despite elevated non-performing loans. The BoU appropriately took over an undercapitalized bank and is identifying a strategic investor.

Uganda remains at a low risk of debt distress. The scaling-up of infrastructure investment implies a temporary increase in debt, putting a premium on domestic revenue mobilization and ensuring that public investment yields the intended growth dividend.

Looking ahead, priorities include close cooperation with the Financial Action Task Force to ensure Uganda’s swift exit from its “gray” list; strengthening domestic arrears monitoring; and amending the Bank of Uganda Act to reinforce central bank independence.

1 The PSI is an instrument of the IMF designed for countries that do not need balance of payments financial support. The PSI helps countries design effective economic programs that, once approved by the IMF’s Executive Board, signal to donors, multilateral development banks, and markets the Fund’s endorsement of a member’s policies (see imf.org/external/np/exr/facts/psi.htm). Details on Uganda’s current PSI are available at imf.org/uganda.

2 The Executive Board takes decisions without a meeting when it is agreed by the Board that a proposal can be considered without convening formal discussions.

Swiss Oil Companies are mixing bad blended gasoline to gain fortunes on hazardous product on the environment and health!

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“African Quality” is the industry term for fuels that are destined for African markets. They are characterised primarily by their high sulphur content, though the term also refers to fuels with other low-quality aspects such as a high olefinic or aromatic content. In short, this definition of African Quality matches the type of fuels that we found at petrol stations owned by Swiss trading companies in Africa” (Public Eye, P: 100, 2016).

There are viciousness and malice attempts all over the globe, there warlords killing for selling luxurious minerals and keeping resources in their hands to sell to get ammunition. Then there are not as vicious as them, but still worth condoning; the ones that knows that they are selling an off-brand product that they are not allowed elsewhere, but selling “African Quality”, low-level gasoline with blended high toxic and filled with metals, with levels higher than sulphur, PAHs and other chemicals that can be dangerous at certain extent.

Switzerland are a prosperous and business companies that are profitable abroad, like the ones mentioned in the report of Public Eye, that shows to what extent they go to earn fortunes. As they uses both connections to various regimes; they are using connections in Netherlands to blend and mix diesel and gasoline to the African market. That would be fine if it wasn’t an inferior product, but we’re a product that could be following standards of the same quality sold in Denmark or United Kingdom, instead it filled dangerous toxins and metals that can make the air-quality lower and make the car quickly destroyed. These acts should not go unnoticed.

Mixing and making cheap Gasoline in Abidjan, Ivory Coast: 

“How was this waste produced? Every month for 16 months, between January 2006 and April 2007, Trafigura bought batches of coker naphtha created at a Mexican refinery, with the intention of turning them into blendstocks for gasoline. This coker naphtha is one of the lowest qualities of gasoline blendstocks and it is created during oil refining from the “bottom of the barrel”. It has two specificities: first, it contains very high levels of toxic substances, namely sulphur and mercaptan sulphur, and second, as a direct consequence, it is very cheap. In other words, it is an opportunity for (almost) any creative trader. “As cheap as anyone can imagine”. James McNicol, a trader from Trafigura, wrote in an email to his colleagues in December 2005, “[this] should make serious dollars”. Trafigura’s sole motivation for experimenting with the production process was profit. Company executives had estimated that buying and selling the coker naphtha would generate profit to the tune of US$7 million per cargo. But before “making serious dollars”, Trafigura had to convert the product into a suitable ingredient for African gasoline: it had to find a way to lower drastically the mercaptan sulphur content, otherwise its odour would be unbearably strong” (Public Eye, P: 17, 2016).

Abidjan – Minton Report on African Quality gasoline:

“Based on the Minton report and an internal Trafigura document we conclude that the total sulphur still in the washed naphtha was between 608 and 680 tons – equaling between 7,156 and 8,000 ppm. The Minton report noted that “the process had achieved a 47 percent reduction of the mercaptans [in the sense of transforming into other Sulphur components] and that some ended up in the aqueous waste phase and some in the oily product, but that the conversion rate was not known.“ An internal Trafigura memorandum dated 23rd September 2006 summarizes in paragraphs 1–3 how much coker naphtha was unloaded to the Probo Koala by three different vessels and the mercaptan Sulphur content of it before and after the washings: (1) 11 April 2006 M/T Seapurha: 28,829 mt, mercaptan sulphur level of 1,700 ppm and after washings 950 ppm. (2) 19 May 2006 M/T Moselle: 28,130 mt, mercaptan sulphur level of 2,014 ppm and after washings 950 ppm. (3) 18 June 2006 M/T Seavinha 28,284 mt, mercaptan sulphur level of 1,700 ppm and after washings 950 ppm. We can make an even more precise estimation: Based on Trafigura’s reply to the BBC that gives a summary of the composition of the waste as estimated by the claimants in a group litigation case – and based on analysis of the Netherlands Forensic Institute – the total sulphur content of the waste dumped in Abidjan was around 66 tons” (Public Eye, P: 149, 2016).

Trafigura business:

“In 2015, Trafigura had revenues of US$ 14.4 billion from Africa, making the continent its second largest market after Europe. Its competitor, Vitol, also operates widely on the continent. Thought to be the world’s largest commodity trader, Vitol might be expected to give some information about its activities if only in the public interest, but the company does not disclose its annual results. Many other Swiss companies also supply fuels to Africa” (Public Eye, P: 30, 2016).

Using Oil Deposits to blend into African Quality:

“Oil depots offer the opportunity to blend petroleum products according to the fuel quality required by the country (see chapters 9 and 10). With that respect, an advisor close to the BP-Puma transaction assumed Puma Energy was, among other reasons, buying petrol stations in order “to sell surplus of dirty products in Africa.” He was not the only one. A market analyst from Petroleum Intelligence Weekly also mentioned the “compromise” in fuel quality that could occur with the arrival of the traders.13 Weak regulation on fuel quality standards (particularly for sulphur) is a crucial factor in any analysis of the economic potential of petrol stations in Africa. As we show below, many high sulphur, low-quality intermediate products are available that can be blended into “African Quality” diesel and gasoline. Playing with qualities is a lucrative strategy and nothing else than a form of regulatory arbitrage” (Public Eye, P: 31, 2016).

Republic of Congo demand of Petroleum:

“Congo’s demand for petroleum products is satisfied by two sources. The first source is the state-owned refinery, Coraf, which is run by the President’s son Denis Christel Sassou Nguesso, nicknamed “Kiki”. This refinery gets its oil from the State and provides diesel and gasoline to the local market. Coraf’s dodgy deals with a Swiss front company, Philia, have been the subject of a previous report by Public Eye” (…) “Tacoma and its Congolese subsidiary X-Oil have both been paying “consulting fees” to an offshore shell company belonging to Denis Christel Sassou Nguesso, the Congolese President’s son and head of trading operations at SNPC, according to a 2006 Hong Kong court judgment.32 The shell company, Long Beach Limited (Anguilla), was part of a broader scheme set up by Denis Christel Sassou Nguesso to syphon off part of Congo’s oil wealth to private coffers, in collusion with Denis Gokana’s AOGC” (Public Eye, P: 43, 2016).

Difference between Europe and African levels of PAHs:

“So the actual gap between the African and European samples is even wider. Indeed, a study showed that the level of PAHs contained in diesel sold in Germany had an average of 2.73 percent of mass in 2013. So Vitol’s diesel, as sold in Senegal, has more than five times more PAHs than the diesel sold in Germany. Worldwide, the average of PAH in diesel is estimated to be 3.7 percent of mass, according to CONCAWE. This is certainly lower than what we found in Africa. Only two of our samples, found at Oryx in Zambia and Trafigura in Côte d’Ivoire, are lower than the global mean” (…) “The reason why African diesel fuels have high aromatic and polyaromatic content can easily be explained: almost no sub-Saharan African country regulates them. And so the trading companies who import these fuels are tempted to use cheaper, lower quality, high aromatic blendstocks for diesel in the African markets. This tactic might have commercial advantages, but for the people and for the environment where these fuels are sold, this “blend-dumping” is a very unhealthy practice” (Public Eye, P: 55, 2016).

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Difference between Europe and African levels of sulphur:

“But if we compare the average sulphur levels in European gasoline (7 ppm) with the highest sulphur sample of gasoline from a station in Ghana belonging to UBI, a subsidiary of Puma Energy, then that discrepancy increases to a factor of 103. More generally, we found the highest levels of sulphur in Ghana and Mali. In Ghana, we found between 275 and 718 ppm sulphur in the four gasoline samples. This is within the legal limit, but the limit itself is very high (1,000 ppm), one hundred times higher than the European legal limit. Many of our samples show much higher sulphur contents than what refineries in West Africa often produce. The Tema refinery in Ghana produces an average 127 ppm gasoline” (Public Eye, P: 56, 2016).

Swiss trading in Ghana:

“In 2014, 4 of the 8 deliveries from Swiss trading companies fluctuated between 2,800 ppm and 3,200 ppm, highlighting a possible strategy to stick as close as possible to the legal limit. That same year, both Vitol and Trafigura delivered diesel with sulphur content so high that the product could not be sold at the pump. The product would have been further blended in the depot to lower its sulphur level, unless it ended up being sold off-spec (i.e. illegally) to consumers. Asked to comment about those of their cargoes containing higher sulphur content than allowed at the pump, Trafigura declined to do so while Vitol specified that it “does not comment on specific cargoes as a matter of policy.” (Public Eye, P: 75, 2016). “While the subsidies drained the public treasury, the BDCs benefited from them systemically delivering lower quality products than planned (<1,000 ppm). Indeed, our findings revealed sulphur levels in diesel that were on average much higher than 1,000 ppm both at the moment of import and at the pump. The price calculated by the government to subsidise the importers therefore didn’t correspond with the quality of products imported. In a totally legal manner, as they were respecting Ghana’s national standards, the importers profited from a system to the detriment of the government (public finances) and the consumers, not to mention Ghanaian health” (Public Eye, P: 79, 2016).

Money before People:

“Simply put, Swiss commodity trading companies put profits before anything else, even before the health of the population, while claiming, as Vivo does for instance in Côte d’Ivoire, that “it uses all the means and tools necessary to ensure the latest international standards of quality […] so that Ivorian consumers benefit from what is best in terms of fuel when going to a Shell petrol stations”. Our findings contravene these glossy CSR-statements. In a corporate video, Trafigura says that “Across Africa and other developing regions, our supply of affordable high-quality fuel products empowers local businesses.” Vivo Energy is the same, saying that “Our commitment to achieving and maintaining the highest international Health, Safety, Security and the Environment (HSSE) standards is at the heart of our business and is a key differentiator (…) in Africa.” Not to repeat a similar promise made by Oryx Energies, that “Our commitment (…) for Africa means that we take every precaution to minimise the potential impact our products and services may have on the environment.” Commenting on Oryx’s development in Mali, the chairman of the group, Jean Claude Gandur said: “This enables us to supply high-quality fuels (…) to an increasing number of clients.” The reality is quite different. Just to take Mali as an example, Oryx’s diesel in the land-locked country was the worst we found among 25 samples collected in 8 countries, with 380 times more sulphur than allowed by the European limit” (Public Eye, P: 126 , 2016).

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We can easily see how the Swiss Corporations are earning fortunes on selling lower-quality petroleum to the African market as their loose regulation and easy market are acceptable for the degraded gasoline. This indicates how the European Corporation are doing what they can to earn monies on dangerous products that would not accept on their own shores. It’s disgraceful how these “African quality” gasoline and diesel are sold in different nations around on the African Continent.

It is not only bad for the cars and for the engines. It is harmful to the environment and the people who inhale the toxins and chemicals blends that come after the use of the gasoline. This pollution is man-made toxic blend that creates more harm than good. Still, it’s a legal product and allowed to sell without any questions. As the Governments are giving way to the Oil Companies and Holding Companies that are selling these there. This should not be acceptable.

Here is just one some samples of the bad business practices, there might be even more and worse than what the Public Eye found and what other companies do on the continent. To what extent they go to earn profits without consequences. This here proves the ability these companies have to be hazardous and be rough with nature and humanity while earning high profits on low-quality products. This should be sanctioned and stopped if it matter’s what people are inhaling and the damage it does to our bodies, secondly what these toxins do to our nature and surroundings as it might be in our food, waters and pollute our air. Certainly the initial findings prove the toxins and the ways of blending are reasons for itself to stop the manufacturing process of making it in general. Especially knowing how much better by just doing it proper and follow guidelines of European laws on gasoline and diesel would harm the environment less. The people should also not get polluted and get toxins because the corporations sell them a disgraceful product.

Last remark, when some of this by blending on ships or at facilities that produce already the European Standard gasoline or diesel, it is insulting that on the same refinery that they create worse product’s to sell leftovers to a continent; because they can and will to make as much profit as they can. This is our world and it’s not ideal, therefore we have to put a lid on it so it can change! Peace.

Reference:

Public Eye – ‘Dirty Diesel – How Swiss Traders Flood Africa with Toxic Fuels’ (September 2016, Ghana)

Uganda: Clarification on the URA Boss’ visit to Parliament (10.01.2017)

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US: Volkswagen AG published ad hoc announcement (10.01.2017)

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Opinion: Court Justice Kavuma is a lost soul, as he orders no investigation into the “Presidential Handshake” but Chris Obore says the Parliament motion will go on!

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On the 9th December Court Justice Stephen Kavuma Court Order with Constitutional Application number 07 in the Constitutional Court in Kampala today. What does this order say, that of such importance, this is from the man who during December 2016 was ordering for himself the ability to change his age, so he could work for four more years as Chief Justice. That is length he takes the law into his own and takes decisions.

But earlier in the year during 2016 the Chief Justice Kavuma wrote an Interim Order of 29th April 2016 where he banned the campaign of defiance. So that he is loyalist to the Movement and to the President is clear. There isn’t any indication that is stopping. Because of today the Chief Justice Kavuma ordered this:

“1. An interim order is hereby issued restraining Parliament, any person or authority from investigating, questioning and inquiring into the impugned bonus payments and or staying all proceedings of whatever nature, if any, which may be pending before any forum whatsoever arising from impugned payments, until the main application of No. 06 of 2017 has been determined” (Constitutional Court, 09.01.2017).

We are today seeing a special level of law and understanding of law as the Constitutional Court are banning and ordering the Attorney General John Muwanga who wanted to have an inquiry of the “Presidential Handshake”. The Presidential Handshake that are known in public because of the bonuses and kickbacks given to public servants and others loyal to the Movement. Parts of the ones who we’re parts of the Uganda Revenue Authority and others; which is the URA who won a case against the petroleum drilling companies Tullow Oil and Heritage who has licence to drill in the Lake Albert Basin. Certainly these billions of shillings are questionable as the Court Justice has to do this.

The Constitutional Court is then overriding the Attorney General and the Parliament, the Parliament that has Members of Parliament, who cannot and are not allowed to do their duty to make checks and balances of the use of public funds. This proves that the Government of Uganda doesn’t need accountability or transparency as even the investigations of the Presidential handshake is illegal. But if somebody wants more documents to be leaked; please to do so, we the people and voices for governance can undress these kingpins and the racket called the Movement regime.

The Presidential Handshake is a questionable act that is not following international standards as the URA proclaimed days after. But on the same day as the Court Justice wanted to silence the Republic and be loyal to Mzee, Chris Obore of the Parliament had this to say:

“The Speaker and the Prime Minister discussed parliament business. When the matter of the now controversial oil bonus payments christened “presidential handshake” came up, the Speaker said the motion prepared by some Members of Parliament would be tabled. She advised the Minister concerned to prepare to provide MPs with explanations” (Chris Obore – ‘Press Release” 09.01.2017).

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So Speaker Rebecca Kadaga and PM Ruhakana Rugunda will not listen to the courts, they will have the Parliamentary Session on the Motion filed, even as the Court Order has been set. The same acts happen on the same day and proves that there is different understand on the laws and orders. As when Chief Justice Kavuma we’re banning defiance the Interim Order we’re hold and kept. But now with the Presidential Handshake, the Parliament will defy this and resist the court order. This is proving the power of the courts and also the mismanagement of Uganda. When these cannot work together and honour each other it proves the obstacles of procedures and protocols.

This shows how the need for transparency and accountability in the republic when the Parliament are not following and secondly not in the loop of the courts. The Parliament is creating the laws and the Courts are supposed to use them to sanctions and regulate society. This proves how President Museveni and his regime has built a fragile and fragmented organizations that following his orders, therefore the Presidential Handshake is now not only a question of the ones who was pocketed and gotten ill-gains from the Uganda Revenue Authority, but now it is a legal question for the MPs even to have an inquiry on the matter.

This story is not over, it will continue to walk and soon run, when it is closed or when it is all unravelled. The Presidential Handshake is not over, we’re just waiting for Museveni to shake somebody else hands and give a few more heavy envelopes. Peace.

CFA Open letter: “Re: Investigation of OneWest Bank, FSB” (06.01.2017)

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Och-Ziff Company and subsidiaries implicated in bribing Guinean, Zimbabwean and Congolese Authorities to get favourable business operations in these nations, Raid January 2017 report claims!

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“The Home Secretary, Amber Rudd, at the FCA’s 2016 Financial Crime Conference, stated:15 ‘The UK is attractive to criminals and corrupt kleptocrats who steal billions from their own people, often some of the poorest people in the world.’ The Home Secretary concluded: ‘If…we develop world leading legislation to combat financial crime whilst continuing to develop the capabilities of our law enforcement agencies, then we will reduce the flow of dirty money into the City….’” (RAID, P: 14, 2017).

Well, this is not the first or the last time we will discuss mineral-resources and the extractions of these to gain quick profits, either in sophisticated ways of administrative affairs between the ones the licence the operations to the company, which usually is government officials who are pocketed by subsidiaries if multi-national corporations; this is happening in the Democratic Republic of Congo, Zimbabwe and Guinea. As showed in the RAID report of January 2017: “Bribery in its purest form”; that I will uncover certain parts of to show the apparent companies and holding-companies that are owning and operating in the these countries by bribing officials to export minerals. They get ownership of giant mines and resources from these nations as they are licenced after favourable transactions for the governments, as they are kept bribed to uphold production as well.

This happening in nations that are sanctioned and has sanctioned persons that should stop these transactions and licences of United Kingdom and United States corporations, even if they have shell-companies and official headquarters in Tax-Havens that proves the ability of extracting the massive fortunes in these minerals, without proper transparency in the nation they operate with their mining operation.

I think the report should speak for itself and should be publically known to show how they are able to take the monies, profit and also bribing the officials without any consequences, even when the nations of Zimbabwe and DRC had sanctions against it; still the His Majesty Treasury of United Kingdom didn’t stop the transactions and trade with them. This proves that the UK Government doesn’t care about their own sanctions and how their businesses are operating without judgement and fear of getting fined for breaking laws to get rights and takeover mining operations in other countries.

Take a look! 

The review of mining licences that the Congolese government embarked on in 2007, which was supposed to clear up the murky legacy of wartime contracts, provided Och-Ziff and its collaborators with a golden opportunity to snap up valuable assets at knock-down prices. Working with the Congolese political elite, this group were able to exploit the threat of expropriation or revocation of mining permits to their own advantage. By 2014, according to Forbes Magazine, President Joseph Kabila had amassed an estimated personal fortune of US$15 billion in just over 13 years of power.xxiv In 2015, The Sunday Times Rich List estimated Michael Cohen’s wealth to be £335 million (US$500 million). Forbes puts Daniel Och’s (the founder and CEO of Och-Ziff) net worth at US$2.5 billion and Dan Gertler’s wealth at $1.18 billion. The DRC is one of the poorest and least developed nations in the world, ranked 176 out of 188 countries.xxv Almost 87% of its 69 million people live on less than $1.25 a day. Put another way, that $1.25 each day equates to $450 per year, and with life expectancy of 58 years, Och’s personal fortune would last the lifetimes of more than 95,000 Congolese at today’s values” (Raid, P: 10, 2017).

Och-Ziff subsidiaries:

“Mvela Holdings is incorporated in South Africa.31 Mvela Holdings is described in the Och-Ziff release as ‘a private investment company founded in 1998 by Tokyo Sexwale, Mikki Xayiya and Mark Willcox. It is the controlling shareholder of JSE-listed Mvelaphanda Group Ltd and has a significant interest in JSE-listed Mvelaphanda Resources Ltd. It has other substantial privately held interests in the mining, energy, real estate and various other industrial sectors in South Africa and Africa.’ It appears that Mvela did not ultimately participate directly in AML” (…) “Palladino Holdings is described as a private investment vehicle, founded in 2003 by Walter Hennig holding ‘a variety of significant mining, energy and other assets in Africa.’32 A company under the name Palladino Holdings Limited is registered in the UK, and recorded as originating in the Turks & Caicos Islands.33 Other market notifications that refer to Palladino Holdings Limited as a shareholder give an address for Palladino in the Turks & Caicos Islands.34 Palladino Capital 2 Limited, a closely-related Palladino subsidiary behind a controversial loan to the Guinea government (see below), is registered in the British Virgin Islands” (…) “Other than Och-Ziff employees, directors of Africa Management (UK) Limited include or have included, Walter Hennig (Palladino), Andre Cilliers (Palladino) and its chief executive Mark Willcox (also Chief Executive Officer of Mvela Holdings)” (Raid, P: 17, 2017).

Guinea agreement:

“Och-Ziff Employee A and Och-Ziff Employee B, along with the CEO of AML and South African Business Partner, conceived of a related-party transaction that would accomplish these goals….According to the deal documents, South African Business Partner was to buy 31.5 million shares in the oil and gas company from the South African conglomerate for $77 million and then immediately resell 18.5 million of those shares to AGC II for $77 million.…” (…) “Contrary to the deal documents…Och-Ziff Employee A and Och-Ziff Employee B knew that South African Business Partner would not pay the full $77 million to the South African conglomerate. South African Business Partner bought 31.5 million shares…for only $25 million, and then immediately resold 18.5 million shares in that same company to AGC II for $77 million, providing South African Business Partner with $52 million and an additional 13 million shares in the company. With the $52 million, South African Business Partner then paid $2.1 million to Och-Ziff to satisfy an outstanding debt relating to AGC I (in which the Investor had no interest), $25 million to the government of Guinea to try to secure access to valuable mining investments there, $1 million to the agent affiliated with the a high level Guinean government official and his family, and the remainder to personally benefit himself and his business partners” (RAID, P: 19, 2017).

Guinea 2011:

“In or about March 2011, a company controlled by Coconspirator #1 [‘the beneficial owner of the Turks & Caicos Entity’ ] entered into an agreement with the Guinean government, which gave the company the option to buy into the SOMC [‘Guinean state-owned mining company’]. On or about April 29, 2011, an affiliate of the Turks & Caicos Entity loaned the government of Guinea $25 million as part of a deal to become a partner in the SOMC. Coconspirator #1 raised the $25 million through a related-party stock sale to the Joint Venture. MEBIAME signed the loan document on behalf of the affiliate of the Turks & Caicos Entity. According to MEBJAME, the partnership with the SOMC ultimately did not go forward due to negative press accounts, which indicated that the deal between the Guinean government and Coconspirator #1 was corrupt” (…) “He [Alpha Condé] said that he agreed. So we made the loan, we signed the loan to Soguipami…,and so I was authorised to sign and make the transfer.’ Another exhibit – a witness statement, from a UK High Court case, made by the chief executive of a company advising BSGR – states:67 ‘funds were transferred to Alpha Condé by way of a recorded loan of $25million and further unrecorded transfers believed to be “much much more”….Alpha Condé attempted to reward his backers. He entered into an agreement known as the Palladino Contract, pursuant to which the provider of the $25million loan would, on default of the loan, become entitled to a 30% share in a new Guinean national mining company established by Alpha Condé.’ Other exhibits in the ICSID case refer to Walter Hennig and AGC” (RAID, P: 20, 2017).

DRC laundering of mining exports:

“Gertler’s use of London markets to launder DRC assets began with another AIM-traded entity, Nikanor plc. Nikanor plc was described as ‘the holding company of a Group with copper and cobalt assets in the DRC’. The company was incorporated and headquartered in the Isle of Man.87 On 17 July 2007, Nikanor was admitted to AIM” (…) “In the Nikanor admission document, reference is made to allegations that Dan Gertler ‘acquired a temporary monopoly on sales of diamonds from the DRC as a result of improper dealings with the Government of the DRC’.88 The Nikanor admission document concludes that: ‘These allegations do not relate to the Company [Nikanor], the Group or any of their activities. They concern Mr Gertler in his capacity as a shareholder.’ Yet it is stated under ‘risk factors’ in the admission document: ‘…each of the Major Shareholders will be able to exercise significant influence over all matters requiring shareholder approval, including the election of Directors and significant corporate transactions.’ Moreover, there is also a reference to how the group of Nikanor companies with mining assets in the DRC and ‘some of the Major Shareholders’ have been ‘subject to criticism from a number of NGOs’ which included lack of transparency in the process by which the assets were awarded, the absence of public tendering and a joint venture agreement ‘unreasonably favourable to the Group and that as a result Gécamines [the DRC’s state-owned mining company] has not received proper consideration for valuable assets with a resulting detrimental effect on the economy of the DRC”(RAID, P: 22 ,2017).

Another DRC Agreement – Camrose transaction:

“The DOJ refers to ‘a $124 million convertible loan through a subsidiary company and AGC to Company B, a DRC Partner-controlled shell entity, funded in or about and between April and October 2008 (the “Convertible Loan Agreement”)’.121 Under the heading ‘C. Corrupt Takeover of DRC Mining Company’” (…) “the SEC Order states: Also in April 2008, Och-Ziff caused AGC I to enter into an approximately $124 million convertible loan with a holding company affiliated with DRC Partner. The stated uses of these funds were threefold: first, to provide DRC Partner with approximately $15 million to purchase a Congolese entity that had acquired the rights to a valuable mining asset in the DRC (the longstanding asset of a Canadian mining company) through an ex parte default judgment in the DRC that resulted in judicial misconduct proceedings; second, to provide DRC Partner with approximately $100 million to purchase a majority stake in that Canadian mining company in exchange for resolving its legal issues; and third, to advance an additional $9 million to be used for future mining operations in the DRC” (RAID, P: 26, 2017). “The transaction gave Och-Ziff control over what assets could be bought or sold by the entity, equity conversion rights into DRC Partner’s entity, a pledged interest in the shares of the Congolese entity, and a right to future deals with DRC Partner in the DRC. Moreover, the transaction gave DRC Partner complete discretion over how to use approximately $24 million of the funds provided by Och-Ziff. Further, Och-Ziff understood this transaction was part of a broader, ongoing partnership with DRC Partner. Finally, both Och-Ziff Employee A and Och-Ziff Employee B knew that DRC Partner was going to use a portion of the funds to pay bribes, and knew that the transaction was structured to accomplish that goal. This knowledge was not shared with others within Och-Ziff or with outside counsel” (RAID, P: 27, 2017).

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Camrose II:

“A 50% interest in Société Minière de Kabolela et Kipese Sprl (‘SMKK’) was acquired on 9 November 2009 as part of the CAMEC acquisition….In 2009 the Group acquired an option, for a cash consideration of US$25 million, to purchase the outstanding 50% of the issued share capital of SMKK by acquiring the entire issued share capital of Emerald Star Enterprises Limited (‘ESEL’), (an entity controlled by the Gertler family trust), the owner of the outstanding 50% of SMKK. The Group exercised this option and the acquisition of ESEL was effectively completed and control obtained by the Group in June 2010. The total cash consideration in respect of the outstanding SMKK shares, inclusive of the US$25 million option, amounted to US$75 million” (…) “Throughout the period of DRC Partner’s acquisition of Kolwezi Tailings and SMKK, DRC Partner continued to make corrupt payments to DRC Official 2. For example, on or about December 23, 2009, DRC Partner delivered $1 million to DRC Official 2; on or about January 5, 2010, DRC Partner delivered $2 million to DRC Official 2” (…) “On or about August 20, 2010, Mining Company 1 acquired 50.5 percent of Company B. Mining Company I agreed to pay up to $575 million over two years, including $50 million in cash. Och-Ziff Employee 3 and Och-Ziff Employee 5 were informed by a co-conspirator that the $50 million was for DRC Partner to “use on the ground” to corruptly acquire Kolwezi Tailings. As part of the deal, Mining Company 1 guaranteed repayment of the Convertible Loan Agreement through a novation of the loan” (RAID, P: 30-31, 2017).

Camrose Resources Limited, BVI company number: 1055983, incorporated in the British Virgin Islands on 9 October 2006. “ (…) ”124 According to the company website: ‘The Fleurette Group is comprised of various businesses organized under Fleurette Properties Ltd., a company established in 2006 for the benefit of the Gertler Family Trust.’ (<http://fleurettegroup.com/&gt;). A press release attributed to Fleurette Properties Limited states: ‘The Fleurette Group of Companies is a Dutch-resident group of companies whose primary activities are the investment in, exploration, exploitation and development of mining assets in Africa. The parent company of the group is called Fleurette Properties Limited, which is owned by Line Trust Corporation Limited strictly and solely on behalf of the Ashdale Settlement, a trust established in 2006 for the benefit of the family of Dan Gertler.’” (RAID, P: 58, 2017).

“Camrose is described as holding indirect interests in five copper and cobalt exploitation licences in DRC, including a 70% interest, via the Highwind Group, in Metalkol Sarl, which ENRC states as owning ‘the tailings exploitation licence covering the Kolwezi Tailings Site (otherwise known as the Kingamyambo Musonoi Tailings, or “KMT”) (PER 652)’. See ENRC plc, ‘Acquisition of 50.5% of the Shares of Camrose Resources Limited’, op. cit” (RAID, P: 59, 2017).

UK gives Concent to Camrose transaction:

“Consent for the Camrose transaction was therefore sought from the UK authorities, consent that was clearly forthcoming. ENRC sought to prevent publication of media reports relating to the SAR: 101Reporters has published not only the SAR, but also the letter it received from ENRC’s lawyers, which stated: ‘you will respect the public interest in maintaining the confidentiality in SARs and remove that aspect from your article.’” (RAID, P: 33, 2017). “There is a permissive pathway by which mines and minerals from zones of conflict and weak governance are transferred to companies trading on AIM who, in turn, through a process of acquisition, transfer these tainted assets to companies in the premium segment of the main market. This process can only be described as asset laundering. Certain of ENRC’s Congolese and Zimbabwean assets, at the heart of the SFO criminal investigation, were derived from the acquisition of AIM-traded Central African Mining and Exploration Company Limited (CAMEC), which was allowed to flourish unchecked on the junior market, despite a myriad of compliance issues that have never been addressed by AIM Regulation” (RAID, P: 34, 2017).

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Zimbabwe Platinum deal:

“On 11 April 2008, CAMEC announced the acquisition of an interest in platinum mining assets in Zimbabwe via its acquisition of 100% of Lefever Finance Ltd, registered in the British Virgin Islands.209 Lefever owned 60% of Todal Mining (Private) Limited, a Zimbabwean company, which held the rights to the Bougai and Kironde claims south west of the city of Gweru in Zimbabwe. 210 The remaining 40% of Todal was held by the Zimbabwe Mining Development Corporation (‘ZMDC’), wholly owned by the Government of Zimbabwe” (…) “…The consideration paid for Lefever was a cash payment of US$5 million and the issue of 215,000,000 new CAMEC ordinary shares. CAMEC’s announcement of the acquisition stated:211 ‘Furthermore, CAMEC has agreed to advance to Lefever an amount of US$100 million by way of loan to enable Lefever to comply with its contractual obligations to the Government of the Republic of Zimbabwe. Repayment to Lefever is to be made from the ZMDC’s share of dividends from Todal.’” (…) “According to the company’s own 11 April news release announcing the Zimbabwean platinum deal, CAMEC advanced the $100 million loan to Lefever to enable it ‘to comply with its contractual obligations to the Government of the Republic of Zimbabwe “ (PAID, P: 38, 2017).

“Och-Ziff had control over divesting from CAMEC after the platinum deal was announced (Mugabe and senior Zimbabwean government figures were already designated under US sanctions) or after the designation of both the Zimbabwe Mining Development Corporation (ZMDC – CAMEC’s state-controlled partner in the platinum venture) and Billy Rautenbach, later described by the US as a ‘Mugabe crony’. Och-Ziff, however, held onto its CAMEC shares into 2009, selling its remaining holding only when ENRC acquired CAMEC in November of that year” (RAID, P: 41, 2017).

Important Notes:

Africa Management is referred to in the Memorandum of Association of Camrose Resources: ‘…Africa Management Limited, a company incorporated in Guernsey with registered number 47651 and whose registered office is at Ogier House, St Julian’s Avenue, St. Peter Port.’ (See Memorandum and Articles of Association of Camrose Resources Limited, Incorporated 9 October 2006, Amendment registered in this 20th day of November 2008, Memorandum of Association, 10 Definitions and Interpretation, 10.1, “Africa Management Limited”)” (RAID, P: 55, 2017).

Mail&Guardian graphic about how Tokyo Sexwale investing in Gertler corporations.
Mail&Guardian graphic about how Tokyo Sexwale investing in Gertler corporations.

That this company Och-Ziff and their subsidiaries are handling their business in this way is not acceptable, the way they are catering to corrupt government officials and stifling the citizens of the nations they are earing fortunes. These corporate-stooges are writing-off dozens of nations desirable taxes and regulated levies on businesses. As they are bribing both high-level like Alphe Conde who accepts the deals in Guinea, as well as friends of Joseph Kabila in Democratic Republic of Congo, even getting Tokyo Sexwale the former minister of ANC in South Africa to be parts of their network. These levels of bribing and usage of political connection to get resources and takeover companies with ownership of licences of profitable mines, proves the graft and bribe that occurs to secure extravagant luxury for the government officials that are accepting these deals.

The Och-Ziff are using these subsidiaries and corporations to money laundering or tax-exempt them to gain more profits on the mining in the nations. Certainly done with the leadership knowledge and showed their employee tactics to bribe and secure the transactions and ownership of profitable mines. That is certainly the reason for these sophisticated business-models, that enrichen the corporate leadership and gives government officials giant envelopes to give away nations vital resources. These well-planned well-crafted companies that uses all kind of loopholes and ways to escape the punishment for their breaching of international and national law to salvage as much profit as possible.

The long-term effect is certainly that the Guinean, Congolese and Zimbabwean government get less tax on the dollar as the corporate leadership pays them directly a smaller fee, than actually paying the legitimate taxation for their operation and their owned businesses. These actions shouldn’t be in the wind, it should be in the public and be addressed, even send the corporate leadership and government officials should answer to the public thievery as the minerals are taken without proper legal rights because of the fraud, secondly the corporate and the government officials are implicated in the thievery and should be sanctioned by courts and under the rule of law. Third the corporations themselves should lose the licence and the mining operations as they got them without proper procedure and there is invalid. They should also be fined and get banned from working in this nations or the corporations with these corporate bosses that are acting for them to gain this default destructive profits. Peace.

Reference:

Rights and Accountability in Development (RAID) – ‘‘Bribery in its purest form’: Och-Ziff, asset laundering and the London connection’ January 2017

Temitope Olodo speaks on Ivory Coast’s military uprising (Youtube-Clip)

Opinion: Ugandan Government rising debt levels, brings fear of higher inflation, devalued currency and defaulting on the debt!

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Well, an election year and campaigning as a tyrant and dictator cost, the fortunes splashed on fellow peers and citizens to buy goodwill costs. The price usually happens after the splash funds on villages and on buses. The estimated exhaust of funds and State House can strain the economy. Therefore after elections in the past there been rising food-prices, more expensive oil and gas and other needed imported goods for the average citizen.

This is happening as the donor-community doesn’t have the same faith in the Movement or the President that been there since 1986. His longevity is now hurting him, as his tricks of trade isn’t building steady progress, instead he is using up every single allocation to make sure the loyal servants and movement peers are paid-in-full, even as his own party haven’t paid salaries for months. There are rumours of how the Special Force Command with Maj. Gen. Muhoozi Kainerugaba has gotten their salaries received as much there are questions of the government bailouts of the friends and business-mates of Gen. Salim Selah.

Still, the economic problems continue to arise, the ill-minded would say there hope of wealth, but the lack of transparency, misused funds as the Uganda Revenue Authority – Oil Money scheme and other’s prove there are lacking accountability for how the government funds are spent. This with the knowledge of the lacking salaries to teachers and even Local Government funds that are spent without concern of showing where it got spent; all these activities doesn’t give confidence and trust between the stakeholders and citizens.

With all of this in mind the revelation that the growing debt are now eating too much of government spending, as the arising splashing of funds to civil servants are happening; the reports from Bank of Uganda (BoU) isn’t a beautiful fairy-tale, instead it is doom.

“In its state-of-the-economy report for December 2016, BOU said: “There are also perceptions in the market that Uganda may not be able to service its rising debt levels.” (…) “The central bank said external debt has grown rapidly and, on a commitment basis, is now estimated at $10.7bn as at end of October 2016. BOU said: “A lump up [in] infrastructure investment has contributed to a rise in our debt portfolio in recent years.” (…) “Uganda’s public debt burden has risen by 12.7 per cent to 38.6 per cent of GDP in 2016/17 from 25.9 per cent of GDP in 2012/13. BOU says it is projected to continue rising towards 45 per cent of GDP by 2020” (Mwesigwa, 2017).

Highlights on the 2015/16 budget (New Vision Graphic)
Highlights on the 2015/16 budget (New Vision Graphic)

That the Movement and the NRM are not able to service their debt, is an indication and will also create a problem with the banks and multi-national financial institutions that has offered these loans to help the government with the day-to-day operations of a sufficient government, as well as offering loans to promising infrastructure projects. These all are now in danger of defaulting loans. These levels are estimated to become 45% of the income of the Republic, which is not the sign of riches; more of poverty and mismanagement. The Executive that has been leading the nations for the decades have seen the signs of the wall, but instead of telling the truth; he has promised industrial revolution and amazing progress that would be bigger than when the United Kingdom found out how to earn money on the Steam-Engine. The same kind of promises to become a middle income nation, when your debt burden is arising as rapidly as it is doing now.

This should be worrying as the Movement has revealed and gotten released plans for own total production and releasing own notes, that could also increase possibilities of devaluing the currency, this with growing debt can create a hyper-inflation that only his fellow comrade has been able to create in Zimbabwe. That is the worst case scenario if the bank-notes production gets out of bond to sort of make quick fortunes for the Movement.

The Movement has all their days used any kind of acts to get monies for themselves and hide it away, only when gotten public they needed to have inquiries and detain the ones that not kingpins, but the low-level employees that doesn’t hurt the leadership. Therefore the concern of not a fiscal well-thought monetary policy, as the Movement are more settled on building projects without having to have giant loans from Multi-National Monetary lenders like IMF; AfDB and others. These loans has to be paid back and also with interest. As the Government bonds has also lost their track compared to the need of sufficient funding. These institutional defaults and as well with the lack of clear conscience of the use of funds, shows the Movement has to step up their game if they don’t want their currency and their budget to lack funds for the coming budget year.

The growing loans will also stop the amount of absorbed funds in the republic goes down as the government has to use bigger parts of the resources on loans, as the extended collected funds from URA might have grown, but they are not collecting enough to keep up with the debt. If so they wouldn’t have defaulted and probably would have paid their interest and debt rate as promised when they we’re accepting taking on the debt.

Time for the Movement and their regime to charge, change patterns, their eating as much as they can, but they will leave the next one with a huge bill of no-confidence, while their short-term riches will be spoiled and devalued as the coming depressing economic stability will not give the market and the currency the needed trust as it should has a tool for exchange values between two parties. Peace.

Reference:

Mwesigwa, Alon – ‘CENTRAL BANK WARNS ABOUT RISING DEBT’ (06.01.2017) link: http://www.observer.ug/business/50631-central-bank-warns-about-rising-debt

Opinion: A “Presidential Handshake” from Mzee is apparently a thing!

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“When men are pure, laws are useless; when men are corrupt, laws are broken.”

Benjamin Disraeli

Well, President Museveni is like himself, always. He doesn’t stutter or change codes overnight; he just continues the steady progress towards abomination of civil society and state institution, which seem more like his goal than actually making procedures and clear ways of actions for his civil servants. Why do I make this statement?

Well, Uganda Revenue Authority won a Markie case against the Oil Drilling Company Tullow/Heritage Oil who has rights to drill oil from the Lake Albert Basins and therefore is sanctioned and has to pay tax on their services and salaries to the Republic of Uganda. Something that is straight forward, but isn’t since the licence agreements and the drilling operations are kept in the dark of the society and citizens, cannot double check the agreement between them or the Memorandum of Understanding to comprehend the details that their operations on Ugandan soil entails.

Still, the recent revelations of cash bonanza and personal relief from the Consolidation Fund of the URA staff and former government employees show to the extent a President offering a token of appreciation for their work on winning the case and getting taxes back to the Republic for the foreign drilling company operation. So on the 25th January 2015 the URA wrote specifically to the Office of the President discussing the possibility of a reward. By November 2015, there arrived a letter where their Parliament could Post-Audit the Budgets to add the UGX6bn from the Consolidation Fund, this was a letter received by the Auditor General John Muwanga by the 2nd November 2016. So that today after the released letter of the bonuses we’re released online during the last 48 hours or so. The URA had to explain the matter of confidence between the President Museveni and their civil servants.

The Presidential Handshake that is so powerful to pay former staff and former government employees, even close knitted URA staffers who worked on the case, even Allen Kagina of UNRA got a decent slash fund from the pay-outs.

Prof Joe Oloka Onyango said in October 2016 this about the State House:

“In early 1980s, when this country was under the leadership of Godfrey Binaisa Lukongwa, State House was like a market place. Today, State House has been converted into an ATM” (Wesaka & Adengo, 2016).

Certainly the knowledge of these arrangements from the Revenue Authority wasn’t known, but a broke State House after an elections, says it all; together with the acts like an open-air bazar where all RDC and DPC got new fresh cars. Together with chiefs and others got good gifts. These together with the NRM Village Programme where they poured out dozens of shillings to each district and village as the ballots we’re soon getting dropped. This behind the scenes acts of URA we’re unknown.

So a “Presidential Handshake” that shows how little value accountability and transparency as the taxes that are back-paid are given as rewards, not paying for fixing schools, paying salaries of teachers and lectures, are not used for tarmac or other public needs. The monies are used to buy loyalty and given to silence them from turning against the President.

These acts counter the progression and even fair use of public funds, it’s a theft, a heist of grand proportions, in a way where the liabilities and righteous earned tax-funds can end up in the close knitted elite and staffers of URA instead of being used for the development of the Republic. This is maladministration and mismanagement of the Consolidation Fund and of the earnings made on the payback of the Tax to the Republic.

Certainly a handshake is now enough to get kickbacks from the Mzee, he is certainly an ATM where the stocks of loyalty get rewards and paid. Doesn’t matter how and about accountability, because it is only the citizens who loose, not the President himself! Peace.

Reference:

Wesaka, Anthony & Adengo, Jonathan – ‘State House turning into ATM, says Mak don’ (11.10.2016) link: http://www.monitor.co.ug/News/National/State-House—ATM–Mak-don-/688334-3411968-1155d8t/index.html