The African Group of Ambassadors to the United Nations met in Emergency Session on 12 January 2018 to Consider the Remarks made by the President of the United States (12.01.2018)

Opinion: President Museveni praises Equatorial Guinea for it’s rampant Oil-Corruption; wants to learn his tricks!

In these days the President Yoweri Kaguta Museveni of the Republic of Uganda are on a state visit in Malabo, visiting and learning tricks from the Equatorial Guinean President Teodoro Nguema Obiang, who has used the oil to enrich himself and his loyal subjects. Not build a welfare state, but make sure the family of Obiang get wealthy. Certainly, Uganda is preparing for their own oil production in the Lake Albertine basin, as the pipeline building from the production to the Port Tanga in Tanzania.

This is why President Museveni are visiting Equatorial Guinea to learn the tricks of the trade, as the state of Uganda are still in the dark of the oil-deals between the international companies and the state. We can wonder how the funds will be spoiled and how Museveni plans to use the oil funds for personal gains. If so, he wouldn’t praise President Obiang, who has his whole career to spend the oil profits from his republic. This is what Museveni wants to learn, since his career has been tricking out all sorts of play from Ugandan republic. The petroleum profits can be misspent and hidden just like in the republic of Obiang. Take a look!

President Museveni’s praise:

“We are therefore in Equatorial Guinea for two things: looking at how to support prosperity of one another and how to push for our strategic security. I also congratulate Equatorial Guinea for using it’s oil and gas very well. When I was last here for the AU Summit, I noticed gaps between the airport and the city centre. Today, all these gaps were gone. In their place are new, well-planned buildings. And I see the city is refurbished. Some people say oil is a curse but in Equatorial Guinea it is a blessing” (Yoweri Kaguta Museveni, 26.08.2017)

Business in Equatorial Guinea:

“Since the discovery of the offshore oil deposits, many investors have shown great interest in the country. Foreign direct investment inflows into the country had thus been consistently high for the past years. Nevertheless, in 2016 the FDI inflow amounted to USD 54 million, a sharp decrease from USD 233 million recorded the previous year (and the historical peak of USD 2.73 billion in 2010) . The total stock of FDI in the country is currently at USD 13.4 billion” (…) “Corruption in particular is problematic. In addition, the business climate of the country remains rather unfavourable for investment. Cumbersome procedures and high compliance costs slow licensing and make starting a business more difficult. Weak regulatory and judicial systems may discourage foreign investment as well, along with high credit costs and limited access to financing. The government controls long-term lending through the state-owned development bank. Equatorial Guinea ranked 178th out of 190 countries in the 2017 Doing Business report published by the World Bank, losing three spots compared to the previous year” (Santander Trade, 2017).

Son of the President on trial:

“The corruption trial of Teodoro Nguema Obiang Mangue, the son of the president of Equatorial Guinea, ended in Paris on 6 July with the prosecution calling for a three-year jail term, a €30 million (US$34 million) fine and the confiscation of assets. The Tribunal will return a verdict on 27 October. The 48-year-old vice-president of Equatorial Guinea was not in court to hear the prosecution’s claim that he used money stolen from his country’s treasury and laundered through a shell company to fund a lavish lifestyle in France” (Transparency International, 2017).

This was what that is well-known of the Equatorial Guinea corruption and the son of President has also had challenging cases in the United States. Now the son is also having alleged fraud and criminal charges in France. Clearly, the Ugandan President has already known for corruption behavior. Therefore, even a state agency of PPDA has some words, that the government needs strict regulations before procurement and infrastructure development. This will be clearly important when it comes to petroleum industry. Take a look!

PPDA strict regulation on public procurement:

“Public procurement is a key pillar of the public financial management system. The country’s budget and plans are translated into actual services to our people through the public procurement system. It is also the link between the public sector and the private sector as it is the medium through which the private sector does business with Government. Public procurement therefore involves large sums of money and as our budget grows with the priorities of Government remaining infrastructure development, the proportion of the budget earmarked for public procurement remains significant and therefore calls for strict regulation” (PPDA, 2017).

“Audits and investigations by the Public Procurement and Disposal of Assets indicate that corruption in the procurement process manifests more in the evaluation of bids, reported to be at 58%. PPDA’s Manager Capacity Building Ronald Tumuhairwe says such corrupt practices lead to awarding of contracts to incompetent individuals hence shoddy works in several government projects” (…) “He adds that the second process where corruption manifests is awarding of contracts at 12.5%, followed by receipt and opening of bids, reviewing evaluation of bids, advertising and signing of contracts” (Sebunya, 2017).

President Museveni clearly has own agencies saying it is important with strict regulations on procurement and infrastructure developments like the ones needed for oil industry in the republic. The regulation of oil industry is lax, to make sure the state isn’t transparent with its profits and taxation of the industry. This is what Museveni wants, that the state and the public doesn’t know the contracts or the agreements between the parties involved. That is something President Obiang surely have the capacity to teach Museveni. And how to make sure his family is earning from the state resource, instead of the public and the state itself. Peace.

Reference:

Transparency International – ‘ON TRIAL FOR CORRUPTION: FRENCH PROSECUTORS DEMAND JAIL TERM AND €30 MILLION FINE FOR OBIANG’ (11.07.2017) link: https://www.transparency.org/news/feature/on_trial_for_corruption_french_prosecutors_demand_jail_term_and_30_million

Santander Trade – ‘EQUATORIAL GUINEA: FOREIGN INVESTMENT’ (August 2017) link: https://en.portal.santandertrade.com/establish-overseas/equatorial-guinea/investing-3

Sebunya, Wycliffe – ‘Corruption manifests most in the procurement process – IG’ (25.08.2017) link:http://radioonefm90.com/corruption-manifests-most-in-the-procurement-process-ig/

PPDA – ‘EVALUATING INNOVATIVE ANTI CORRUPTION POLICIES IN PUBLIC PROCUREMENT IN UGANDA’ (02.08.2017) link: https://www.ppda.go.ug/evaluating-innovative-anti-corruption-policies-in-public-procurement-in-uganda/

Minister Of Foreign Affairs, Equatorial Guinea Declares Candidature For Chairperson Of African Union (Youtube-Clip)

“African Ambassadors to Nigeria have expressed solidarity to the unity of African Countries that will actualize the security, growth and prosperity of the continent. The Ambassadors stated this while playing host to the Minister Of Foreign Affairs, Equatorial Guinea, Agapito Mba Mokuy who also declared his candidature for the chairperson of the African Union ” (NTA News, 2016).

“Why Africa has old leaders and young people?” (BBC News – Youtube-Clip)

“Why Africa has old leaders and young people. The recent election victory of Uganda’s President Yoweri Museveni has once again raised questions about term limits and democracy in some African countries. However, the Ugandan leader, who is entering his fifth term in office, is not the only one. The issue of presidential terms has caused public protests in Burundi, Democratic Republic of Congo and in 2014 led to the ousting of Blaise Compaore, long-time leader of Burkina Faso. BBC Africa Business Report’s Matthew Davies looks at the contrast between Africa’s old leaders and its young population” (BBC News, 04.03.2016).

Press Release: Kenya must review Double Tax Agreement with Mauritius (02.11.2015)

(Nairobi, November 2, 2015) – Kenya is teetering on the brink of financial meltdown with the implosion of at least two private commercial banks in the last few months and signing of loophole-ridden double taxation agreements with tax havens Mauritius, United Arab Emirates and Qatar.

Tax havens are countries or states that position themselves as low tax jurisdictions allowing companies and rich individuals to hide their wealth without paying appropriate taxes where they actually make their profits or wealth. Tax Justice Network-Africa (TJN-A) in October 2014 sued the Government of Kenya (specifically the Cabinet Secretary to the Treasury, Kenya Revenue Authority and the Attorney-General) challenging the constitutionality of the Kenya/Mauritius Double Taxation Avoidance Agreement signed in Port Louis, Mauritius on May 11, 2012 and as contained in Legal Notice 59 published in the Kenya Gazette of May 23, 2014.

The Agreement significantly undermines Kenya’s ability to raise domestic revenue to underpin the country’s development by opening up loopholes for multinational companies operating in the country and super- rich individuals to shift profits abroad through Mauritius to avoid paying appropriate taxes. For example, provisions under Article 11 of the Agreement relating to interest limit Kenya’s withholding tax to 10 per cent whereas the Kenyan domestic rate currently stands at 15 per cent. This will significantly affect the tax base of the Kenya Revenue Authority (KRA). The Agreement also sharply contravenes Articles 10 and 201 of the Constitution and is inconsistent with the principles of good governance, sustainability and accountability. The Agreement is open to abuse and this could endanger the growth and development of Kenya.

Three main reliefs sought by TJN-A are: that the High Court declares the government’s failure or neglect to subject the Kenya-Mauritius Double Taxation Avoidance Agreement to ratification in line with the Treaty Making and Ratification Act 2012 as a contravention of Articles 10 (a), (c) and (d) and 201 of the Constitution of Kenya.

That the Court directs the Cabinet Secretary for Treasury to immediately withdraw Legal Notice 59 of 2014 and commence the process of ratification in conformity with the provisions of the Treaty Making and Ratification Act 2012.  And award cost of the petition with interest against the Government of Kenya. The case came up for mention at the Nairobi High Court today, November 2, 2015. The court will fix a date for hearing the case on November 9, 2015. Speaking at a press briefing earlier today, the Executive Director of TJN-A, Alvin Mosioma said “there is need for public participation in the process of ratification of double tax agreements…double tax agreements kill the competitive edge of local firms”. 2 Senator Hassan Omar of Mombasa County who also addressed the press said Kenya’s “Parliament needs to appreciate its responsibility in safeguarding the public’s interests,” adding that “the reason people steal is because there is complicity and people are aware of it”. Provisions under Article 12 of the Agreement which relates to royalties also restrict at- source withholding tax to half (10 per cent) of Kenya domestic rate of 20 per cent. This will significantly weaken Kenya’s ability to raise revenue to finance its development. Additionally provisions under Article 20 of the Agreement reserves all taxation of “other income” not dealt with in specific Articles to the residence state.

This effectively reduces withholding tax to zero per cent on services, management fees, insurance commissions among others, whereas Kenyan domestic withholding tax rate currently stands at 20 per cent. This is a major gap that will lead to massive revenue leakages. The Agreement is neither United Nations nor OECD compliant and it also fails to address the issue of disposal of shares in companies. The Agreement effectively reserves under Article 13.4 all taxation of capital gains from selling shares in companies to Mauritius where the effective Capital Gains Tax is zero per cent. Under the Agreement foreign investors in Kenya can acquire Kenyan companies through Mauritius holding companies and Kenya cannot tax any of the gains when they sell these businesses again. This is open to abuse. Similarly, domestic Kenyan investors can dodge Kenyan taxes by round-tripping their investments illicitly through Mauritian shell companies. Kenyan companies can also easily avoid Kenyan taxes in dividends paid to foreign investors through devices like share buy-backs therefore deny the government of development funds.

The provision is very similar to the Capital Gains Tax Article in the India-Mauritius treaty which has proved very controversial costing India an estimated US$600 million a year in revenues as a result of tax avoidance and illicit round-tripping by Indian business executives driving the Government of India to initiate steps to renegotiate its agreement with Mauritius. Under the definition of ‘bilateral treaty’ in Section 2 of the Treaty Making and Ratification Act an ‘agreement’ such as the one between Kenya and Mauritius and which is the subject matter of this legal case, is a treaty subject to the Act and therefore requires that the Cabinet Secretary to the Treasury in consultation with the Attorney General, submit to the Cabinet the treaty, together with a memorandum outlining, inter alia – 1. Policy and legislative considerations, 2. Financial implications 3. Implications on matters relating to counties, 4. The views of the public on the ratification of the treaty.

Mauritius presently has tax treaties with 13 African countries namely Botswana, Lesotho, Madagascar, Mozambique, Namibia, Rwanda, Senegal, Seychelles, Swaziland, South Africa, Tunisia, Uganda and Zimbabwe. Apart from Kenya, Mauritius also has signed Double Taxation Agreements with Congo, Zambia and Nigeria. Currently Mauritius is negotiating DTAs with Algeria, Burkina Faso, Egypt, Gabon, Ghana, Malawi and Tanzania. Unlike Mauritius’ DTA with Uganda and Nigeria, for example, which have specific provisions for withholding tax for management/technical services fees, Kenya failed to negotiate any such provisions. 

In a related development, the Government of Kenya has signed an equally harmful Double Tax Agreement with United Arab Emirates and Qatar – both of which are tax havens – in which Kenya further deems its right to tax as unnecessary in a bid to attract investment from these two countries. These agreements will deepen Kenya’s current cash crunch by allowing the further erosion of the country’s tax base. – END.

ABOUT TJN-A: Tax Justice Network-Africa (TJN-A) is a Pan-African initiative and a member of the Global Alliance for Tax Justice. It is a network of 29 members in 16 African countries. TJN-A collaborates closely with these member organisations in tax justice 3 advocacy at the national and regional levels. TJN-A seeks to promote socially just and progressive taxation systems in Africa, advocating for pro-poor tax policies and the strengthening of tax systems to promote domestic resource mobilisation. TJN-A aims to challenge harmful tax policies and practices that favour the wealthy and aggravate and perpetuate inequality. For further enquiries, please email Kwesi Obeng at kobeng@taxjusticeafrica.net (+254 726 804 400) and/or Michelle Mbuthia at mmbuthia@taxjusticeafrica.net (+254 724 994 796).

Statement By H.E. Yoweri Kaguta Museveni President of Uganda as the Co-Chair of the Summit for the Adoption of the Post-2015 Development Agenda at the U.N. (25.09.2015)

At UN Summit for the Adoption of the Post-2015 Development Agenda

New York 25 September, 2015

Your Excellencies Heads of State and Government,
Your Excellency Lars Løkke Rasmussen, Prime Minister of Denmark and co-chair of the Summit,
Mr. Secretary-General,
President of the General Assembly,
Honourable Ministers,
Distinguished participants,
Ladies and Gentlemen,

I am pleased to co-chair this important Summit as we gather as a community of nations to adopt a new development agenda that will guide our development efforts for the next 15 years.

This historic Summit is the culmination of months of tireless efforts and unprecedented commitment by Member States and stakeholders to formulate a universal, inclusive and transformative development agenda.

I would like to pay tribute to H.E. Sam Kutesa for his leadership and accomplishments as President of the 69th Session of the General Assembly and thank all of you for supporting Uganda in that responsibility.
I also congratulate and convey appreciation to the President of the 70th Session, H.E. Mogens Lykketoft and the Secretary-General, H.E. Ban Ki-moon for their leadership.
Today heralds the dawn of a new era in our collective efforts towards eradicating poverty, improving livelihoods of people everywhere, transforming economies and protecting our planet.

Together, we are sending a powerful message to people in every village, every city and every nation worldwide ─ that we are committed to taking bold steps to change their lives, for the better.

The 2030 Agenda for Sustainable Development, which we will adopt today, is ambitious in its scope and breadth. In the 17 Sustainable Development Goals (SDGs), the social, economic and environmental dimensions of sustainable development are addressed in an integrated way. The agenda also carries forward the unfinished business of the Millennium Development Goals (MDGs).

Over the last fifteen years, we have attained significant achievements through implementing the MDGs. Globally, more than one billion people have been lifted from extreme poverty and improvements have been made in access to education, health, water and sanitation, advancing gender equality and women’s empowerment.

In Uganda, we have been able to reduce the percentage of people living in extreme poverty from 56% in 2000 to 19% currently. We have also attained universal primary education, promoted gender equality and empowerment of women and continue to reduce child and maternal mortality. From our experience, it has been clear that to sustainably achieve the MDGs we must have socio-economic transformation.

It is, therefore, refreshing that in the successor framework, the SDGs, key drivers of economic growth, have been duly prioritized. These include infrastructure development especially energy, transport and ICT; industrialization and value-addition; human resource development; improving market access and greater participation of the private sector.

While the SDGs will be universally applicable, we also recognize national circumstances, different levels of development and the needs of countries in special situations, particularly the Least Developed Countries (LDCs), Landlocked Developing Countries (LLDCs), Small Island Developing States (SIDS) and African countries.

Taking urgent action to combat climate change and its severe impacts is also prioritised in the new agenda. We should redouble efforts towards reaching an ambitious legally-binding agreement on climate change in Paris in December that promotes the achievement of sustainable development, while protecting the planet.

The new agenda also rightly underscores the important linkages between development, peace and security and human rights. We have to intensify efforts to combat transnational crime, terrorism and the rise of radicalization and violent extremism around the world.

We should reject pseudo ─ ideologies that manipulate identity (by promoting sectarianism of religion and communities) and eclipse the legitimate interests of peoples through investment and trade. Where identity issues are legitimate, they should be expeditiously handled.

Excellencies,

We should all be proud of what has been accomplished so far as we usher in this new development agenda. However, the critical next step will be to ensure its successful implementation on the ground.

In this context, integrating the SDGs into our respective national and regional development plans, mobilizing adequate financial resources, technology development and transfer as well as capacity building will be critical.

We have to ensure full implementation of the comprehensive framework for financing sustainable development, which we adopted in the Addis Ababa Action Agenda to support achievement of the goals and targets of Agenda 2030.
One of the major challenges many developing countries continue to face is accessing affordable long-term financing for critical infrastructure projects.

In this regard, it will be vital to promptly establish and operationalize the proposed new forum to bridge the infrastructure gap and complement existing initiatives and multilateral mechanisms to facilitate access to long-term financing at concessional and affordable rates.

The efforts of developing countries to improve domestic resource mobilization, boost economic growth and address major challenges such as unemployment should be supported by development partners as well as international financial institutions and regional development banks. We also need to do more to promote Micro, Small and Medium Enterprises (MSMEs), support entrepreneurship especially for women and youth and enhance the contribution of the private sector and other stakeholders to sustainable development. Through prioritization, the Least Developed Countries (LDCs) themselves can also contribute to their own infrastructure development.

In order to build effective, inclusive and accountable institutions at all levels, we have to ensure that the voices of developing countries and regions are heard and that they are treated as equal partners in multilateral decision-making. At the international level, we need urgent reform of the United Nations ─ particularly the Security Council ─ and other multilateral institutions to reflect the current geo-political realities.

We need a renewed global partnership for development in which all the commitments made, including on Overseas Development Assistance (ODA), trade and investment are fulfilled.

While the Agenda represents the collective aspirations of all peoples, its success will hinge on its ability to reduce inequalities and improve the lives of the most vulnerable among us, including women, children, the elderly and persons with disabilities.

After months of intense negotiations and steadfast commitment, we have before us an Agenda that represents our best opportunity to transform our world.

We have heard the voices of people spanning the globe; from eager children asking for access to a quality education to young women seeking better maternal health; from rural villagers whose farmlands have been ravaged by droughts to the coastal fishermen on Small Island States who fear their entire existence will soon be swallowed up by rising sea levels.

We continue to witness the influx of refugees and migrants into Europe from Africa and the Middle East, which is partly caused by conflict and lack of economic opportunities.

These voices may speak many language and dialects, but in the end their message is the same ─ please help us to live happier, more prosperous lives, while also protecting the planet for our children and grandchildren.

After adoption of this Agenda, it is incumbent upon us all to take the development aspirations laid out in this document and turn them into reality on the ground; for our people, our communities and our nations. This agenda will create global prosperity different from the past arrangements of prosperity for some through parasitism and misery and under-development for others.

I thank you for your attention.

Press Release: World Population Projected to reach 9.7 billion by 2050 with most growth developing regions, especially Africa – Says UN (29.07.2015)