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Archive for the tag “Bank of Uganda”

The 10th Parliament today adds more debt to the state, near 2 trillion shillings more actually!

Today, the Ugandan Parliament has added more debt to the state since they cannot get grants or donors to fund their projects like in the past. National Resistance Movement (NRM) have the majority of the Parliament, therefore the adjustment and the possible questioning of the bills today. Would be squashed briefly, as the new amount of debt will arise and the state has to get more sufficient funds to repay the loans and the rising interests. That the three projects might bring profits in the future and could be seen as positive development, might be true, but it is a high risk. When the levels of debt already has grown as much as it is.

The first loan approved by the parliament was to borrow for the Lake Victoria Maritime Communication and Transport Project. That loan is up to $ 14,4 Million USD or 52,409 billion Uganda Shillings.

The second loan approved by the parliament was to borrow for the upgrade the road Kapchorwa-Suam-Kitale Road. These was two loans in one. Which is one $ 38,349,313.28 or 139,705 billion Uganda Shillings, this was borrowed from African Development Bank (ADB). The other was $ 56,129,597.12 or 204,437 billion Uganda Shillings from the African Development Fund (ADF).

The third loan was in Euros, first part from UK Export Finance (UKEF), which was EUROS 270,266,042.15, converted to US Dollars is $ 321,199,210.23 or in Uganda Shilling the total: 1,170,081,708,10 Uganda Shillings or in word One Trillion One Hundred Seventy billion Uganda Shilling. The second loan are in EUROS 37,110,585 from Standard Chartered Bank, converted to US Dollars is $ 44,112,060.75 or in Uganda Shillings 160,670,761,044.55 or in words One Hundred Sixty Billion, six hundred seventy million, seven hundred sixty-one thousand, forty-four and fifty-five hundredths Uganda Shillings.

So collectively today, the NRM has accepted loans which totals $ 474,190,180 US Dollars. In Uganda shilling it means 1,727,264,129,950.40 Uganda Shillings. In words it is one trillion, seven hundred twenty-seven billion, two hundred sixty-four million, one hundred twenty-nine thousand Uganda Shillings.

The budget of 2017-2018 was in total 29 Trillion Shillings. Therefore, they are now seeking to borrowing close to 2 Trillion Shillings, which is of last years budget close to 2,9 %. So the NRM MPs and State has had no trouble borrowing close to 3 percentage of previous budget on three infrastructure projects. It is evident and should be worrying with the knowledge that the state is already using 33 % of the budget to repay loans of old and their interests. No matter how positive these projects are and what they can accumulate in the future. Still, the basis of loaning this amounts while having growing debts already. Is really tasking future generations to pay for the loans of the previous ones.

So it seems like the NRM are planning to opening the gates and making sure the state owns more to even more banking and international money lenders. As if the petroleum dollars will safe the deficit in the future. As the interests and the downgrading of the state might appear. Unless, the state gets higher oil prices and some luck. Since, the NRM have really forked itself and hoping someone will bail it out. Peace.

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Opinion: Mzee don’t want to bother foreign investors with taxes, just give him a Presidential Handshakes!

Well, I am biased, as the President are visiting Dubai for 4th Global Business Forum on Africa on the 2nd November 2017. President Yoweri Kaguta Museveni is trying to cater to foreign investors. People who he usually cater to at the State House, so he can get favors and Presidential Handshakes. That is why he isn’t bothered with taxes, because the tax-holidays and possible offerings will be huge for the investors who comes in. That is what the National Resistance Movement (NRM) are doing, especially if it is for instance a nations offering the state loan, than the same state can come with state-companies to build infrastructure like Chinese companies coming in after offering loans to the same NRM government. Therefore, just look at what he was saying yesterday, which is weird, but fit a pattern.

Since you are business people, we must be talking about profits. When you talk of Uganda and Africa, you are talking about peace as an enabling environment; which we have. We have raw materials, and have a population of 40 million people that’s’ a market. And if we talk of integration we have a four tear market” (…) “In Africa, the demand is there and growing because we have been under-consuming while the rest of the world the demand is falling because they have been over consuming” (…) “There are plenty of raw materials, minerals, tourism and so on so when you invest there you have access to all these” (…) “I don’t have to bother investors with taxes, what I want is for them to invest, use our raw materials, create jobs, add value and promote exports” (State House Uganda, 2017).

Well, so the President trying to say to foreign investors, you don’t need to pay taxes for your output, just cater to me. The state you don’t have to bother about, just bother about catering to the State House and me. We will add value and promote exports, we will agreements and make sure you get the value on our resources and low-payed workers.

We know who is the biggest taxpayers in the republic, because of Uganda Revenue Authority own statement in the media on the 31st October 2017, which stated names like Mr. Alnasir Virani Gulam Hussein Habib, Dr. Sudhir Ruparelia, Mohammed Hussain, Nakayima Janat, Karia Minex, Karia Kunnal, Alykhan Hudani and Dayalijil Karan. Who are sounding like foreign investors and they are on the top 25 biggest taxpayers in Uganda. So the state has already connected families from abroad to invest there in various businesses. This shows there are already people who is not worried about taxes, but about the output of their companies.

Some of these investors has made big names, while others have worked more in silence. Still, this shows that the top earners even promoted by URA and Doris Akol. Proves how they are working, as there wasn’t that many own citizens on the list. That shows that the foreign investors must get a special advantage and special agreements at the state house for their dealings. Especially, considering how it has been done, just for tearing down markets in Kampala for own investors and financial agreements. This has been done and arranged from the State House without consultation with locals, neither KCCA or the renters of these markets. That is how the NRM and Museveni do deals in favor of him and if he get ill-gained funds, he will support the “development”. It is in similar fashion he exposes his intent in Dubai.

That the State doesn’t need taxes or need structures to facilitate for foreign investors, they just needs agreements with State House and then it is all fair-game. It is insane, but fits the Modus Operandi of the Musevenism and NRM regime. Give him a Presidential Handshake and you can operate as you want in the Republic. Peace.

Reference:

State House Uganda – ‘President Museveni woos Arab investors to Uganda “We have the raw materials, human resource and market”’ (02.11.2017) link: https://www.africa-newsroom.com/press/president-museveni-woos-arab-investors-to-uganda-we-have-the-raw-materials-human-resource-and-market?lang=en

Opinion: It’s ironic that President Museveni is talking about disciplining the government!

The three arms of government and their sub-branches must have discipline. For example I have been involved in disciplining the army. We should do the same for other sub-branches of government. If the Judiciary is also disciplined in fighting corruption, citizens will lead a good life. – Yoweri Kaguta Museveni on the 1st October 2017, State House Entebbe.

Its just one of these days that hearing the news and seeing the tweets of the President, makes me laugh and wonder if he listen to himself. He knows his system and has made his garden. The way the government steers and govern is because of his policies, his regulations and his support. It is not like there been other ruling for last 30 years in Uganda. The Republic has been under the control of Museveni and his National Resistance Movement (NRM).

The NRM has suffocated all other free-will and control. Therefore, Ministers, Members of Parliament and others seek guidance and funds directly at the State House in Entebbe. Even foreign investors meet there to make agreements. Everything is nearly sanctioned out there. The Discipline now is more on the narrow-minded government that is run from there. The institutions and the procedures are not so important. Since most things happening is with the words from “above”, meaning the President and his close advisers.

It is not rocket science to know where the benefactor or the reason for lacking structures. That is because government waits for their go sign by the State House, they are waiting for funding of the projects and institutions from the State House. The projects and the works of the State House and under the Prime Ministers Offices are the key organizations within this government. They might say all of the massive cabinet has part to play, but that is the facade.

Therefore, it is ironic for a man so controlling and so disorganized that it gives sometimes way to the unthinkable. Just like the Presidential Handshake, that was sanctioned by the State House, but taken form the wrong account. That was the problem for the President, not that the corrupt behavior was occurring on his watch. Its like he talks against himself. Because he has no problem speaking anti-corruption, but if corruption benefit his cronies – its fine and dandy!

I am not surprised by him at this point of time, its fit his narrative. He says what he expects and wants out of others, but the next day he finds a way to benefit or use the loyalty of his cronies. Not like he would have excepted the UCC not to listen and stop the suspended MPs to hit the airways and be broadcast on TV. He rather being himself on radio and in the spotlight, but will accept anyone else sharing the same space.

President Museveni is the proof of someone saying something noble, but doing opposite. He might say something insane, but act rational. Therefore, you never know where you have him. I will never believe him actually disciplining the government, if doing so. It means they are all blindfolded and following his guidelines. It does not mean building proper governance and protocol, neither is institutionalize the departments and ministries, it is all about his will and his stature.

When it comes to Museveni, discipline is about following him. Not building transparent and proper government institutions. Peace.

Bank of Uganda report spells out growing non-performing loans and possible default of 9 banks!

Bank of Uganda’s late Annual Supervision Report of 2016 is finally out. Instead of mid-year, it was released in September. It must be reasons for that, since this is in the year two banks lost their balance and one was traded to another. The Crane Bank sale-off and losses have started most people, as also the expensive pens of the Bank. Therefore, with the procurement of pens must be the reason why the months from July to September to see the Annual report. The 2016 spreadsheet isn’t a fun read, it is dire and says something about the financial institutions, as well as the economy in general.

This report are telling stories of bad performing loans and the quality of them. When looking into that, you know that this is banking practice that supposed to be profitable. To loan money away that people save in the bank and gain interests. So, when the numbers are this crunching. When the state of affairs are so dire. When Government Securities and shortfall is what they are. Then you know there are failing prospects. As this the year after campaigns and elections. It is usually painful after the heavy spending and brown envelopes to anyone who support Mzee. That is why the costs and the non-performing loans are growing. But where that money went, is only known by the elite and the NRM. Take a look!

Non-Performing Loans:

The analysis of default by the banks’ three largest borrowers and an increase in NPLs by 200 percent revealed large potential losses. It showed that if each bank’s three largest borrowers were to default, with a loan loss of 100 percent, 13 banks would become under-capitalised with an aggregate capital shortfall of USh.513.86 billion. If NPLs were to increase by 200 percent, assuming the increase is in the loss category which requires full provisioning, 9 banks would become under-capitalised with an aggregate capital shortfall of Ush.247.39 billion. A decrease in interest income from government securities would not require any additional capital from the banks” (BoU, P: 4-5, 2017).

Loan Quality:

The banking sector’s overall asset quality continued to decline in 2016. The ratio of non–performing loans to total gross loans increased from 5.3 percent in December 2015 to 10.5 percent in December 2016. The increase in the NPL ratio was mainly on account of bad loans which more than doubled from USh.573.4 billion in December 2015 to USh.1,203.2 billion in December 2016” (BoU, P: 15, 2017)

Earnings and Profitability:

There was a drop in profitability of the banking sector in 2016. Annual after tax profits reduced by 44.2 percent or USh.239.1 billion from Ush.541.2 billion in 2015 to USh.302.1 billion in 2016. Average return on total equity (ROE) dropped from 16.0 percent to 8.3 percent while return on assets (ROA) halved to 1.3 percent during that period. Total expenses grew by 9.3 percent, mostly in the form of interest expense on deposits. Increased provisioning for bad debts also reduced the banking sector’s earnings for the year under review. Provisions rose by more than 100 percent, by USh.419.4 billion to reach USh.637.2 billion in 2016” (BoU, P: 16, 2017).

So this growth isn’t making the economy more healthy. It is more bad loans and losses of profits. The bankers are not benefit ting and the costumers will pay for the shortfall in the long run. The assets and the basic needs will not be covered. The dangerous levels of NPL can even kill of more banks. As the reports not spelling out the names, but saying 9 banks could be under-capitalised, that means the government has to come in with security to put the bank on its feet or trade it off. Like it did with the Crane Bank recently.

Therefore, there are warning signs of continuing to borrow without security for repayment on the debt. That gives way for non-performing loans. This is the whole idea and reason for the problems the 9 banks have. As the costumers and corporations borrowing funds, without capacity to repay. That means the planned interest, the planned profits and repaid funds disappear. So, the more borrowed funds to try to catch the losses, is creating a evil spiral of losses. Instead of generating the profits and interests as anticipated.

Clearly, the banking sector needs a revamp and the system needs a push to make sure they are run smooth. As the consequence of continuing like nothing, is that further banks will default and costumers will lose savings and the state has to cough-up funds to save the scraps of a bank. Peace.

Reference:

Bank of Uganda – ‘ANNUAL SUPERVISION REPORT’ (December 2016) Volume 7 (06.09.2017)

Uganda Local Government Workers Union (ULGWU) letter to PM Dr. Ruhakana Rugunda – “Reminder: Remunerations Enhancement for Local Government Workers” (29.08.2017)

#BoUPens: BoU bought cheap Cross Ball-Pens for a fortune!

I hate to say it, but the magical pens from the Bank of Uganda (BoU) wasn’t a fairy-tale as expected. It was a cheap corporate pen, that was bought for astronomical sums. They are not so expensive after all. It is Cross Rolling Ball Pen Nor Onyx AT0155-1, the price of this not as high as the Bank paid for it. Unless, they wanted to pay of their importers major profits, however, the Bank must have connections with the traders who sold it to them. If not, why did they pay so much for Cross Ball Pen in the first place.

First, the social commentary from earlier this month:

Hey, Bank of Uganda, the glorious BoU, if you ever need any sort office equipment. I can sell it to you and at lesser cost. It will be fraction of the 357,000 Uganda Shillings per Pens or 125m shillings for 350 pens. At the dollar-rate, you paid $105 United States Dollar for each pen, they must be magnificent and the best pens ever made for the mankind” (Minbane – ‘ Opinion: Bank of Uganda must have bought magical pens!’ 16.08.2017 link: https://minbane.wordpress.com/2017/08/16/httpwp-mep1xtjg-5gh/ ).

Than, by the price of $105 USD for every single Cross Ball Pen, which was made in China. These Ball Pens are really overpriced. On the American Amazon.com price are $36.62. The Amazon product explanation: “Onyx black resin finish with polished chrome appointments – Click off cap accented by a wide chrome band and a sophisticated perforated clip design – Includes one black gel ink rollerball refill (#8523) in pen – Cross Rollerball pens can be converted into a ballpoint pen or creamy porous felt-tip pen by changing the refill to desired type of tip (Refills sold separately) – Presented in a gift box” (Amazon – ‘Cross Aventura Onyx Black Rollerball Pen (AT0155-1)’ link: https://www.amazon.com/Cross-Aventura-Black-Rollerball-AT0155-1/dp/B0017UGOZC).

So if the Bank of Uganda are importing the pens, than the price would go up. Both most like not cost more than maybe around $60 USD a pop. Clearly, the BoU are liking the idea of the overpaying the pen. The Bank might have bought it from places like Corporate Gifts Pens, there they would get discounted for amounts of pens they would by. That is like if they buy over 100 pens, around $24,79, so the price of pens would be cheaper. Even engraved pens cost added on that page $5 each, that means the price would be around $29,79.

Still, with that the price difference are $70-75, which has to paid extra to the providers or suppliers. The government and the Bank of Uganda must be really proud of who they bought it from. If not, the Chairman or the leadership of the BoU really know the family or written-off the profits to paid their mortgage.

This here was not about quality or unique pen. Just a very ordinary pen. Not even in the quality of the Parker Pens. The BoU has really scammed the people and the Bank doesn’t care about the misuse of state funds. Peace.

Opinion: President Museveni claims in a letter to the FM Kasaija – ‘that the government is “mushrooming”’, well, that is his own creation!

 

It is ironic and hard to take serious that President Yoweri Kaguta Museveni wrote a letter to the Finance Minister Matia Kasaija, Minister of Public Service Muruli Mukasa, Minister of the Presidency Esther Mbayo and Head of Public Service and Secretary to the Cabinet John Mitala. This letter was sent on the 17th July of 2017 and was titled: “Re: Mushrooming Agencies/Authorities”. It is ironic and weird, it is the irrational part of Musevenism. The ones that speaks against corruption, but give provisions for a “Presidential Handshake”. Therefore, this is in line of the others chronic problems, this is just one of them.

This here is in line of this, just like the President has problems to understand that the state will have higher costs with each added district and carving out every single county to have someone to be leaders as Residential District Commander and other local government. The same feeling I’m getting by this letter. Since it is his creation and his vision behind the new agencies and the bold hiring of cronies to any department in Uganda. That shouldn’t be shaved from history. He has had 30 decades, most of the Ministries and their agencies has come as answer to his reasoning and him sanctioning it.

Therefore this quote from the letter is obvious trying to put blame elsewhere:

The questions are: “Why have an Agency when you have a department of the government dealing with the same area of responsibility?” “Why have an Authority when you have a department of the government dealing with the same area of responsibility?” “Why have Boards for money consuming units rather than money generating units?” Boards came into existence when capitalism was growing. In the infancy of capitalism, the owner (the proprietor) would also be the manager because the operations were small. When capitalism grew, it was too much for the owner to manage. Ownership, therefore, got divorced from supervision (board work) and management (managerial work)” (Museveni, 17.07.2017).

I would say most of them are created for the same issue that the state are soon paying former ministers with remuneration to them, even when they are not in cabinet. The same procedure is with hiring cronies to the boards and agencies. Not all about need or necessary for the government or the ministries. How come there are City Hall of Kampala, Kampala Capital City Authority (KCCA) and the Ministry of Kampala. That is because the state needs to hire enough cronies to make sure they stay loyal, also the state needs more administrative organs to make sure they can find jobs for their loyalists. Not because Kampala needs all of these administrative bodies to function, it does not help that the state also have a Presidential Advisor for Kampala. All of this is proof of the mismanagement. This is only in Kampala and without taking a deep dig into the wards and under all the mayors of Kampala. Not what that is under Lord Mayor and KCCA Executive Director.

The letter continues:

Why, then, should you separate the policy role from the regulation role for the non-commercial bureaucratic portions of the government; Forests, National Parks, Roads, NAADs, etc? Their functions are just two: policy and regulation. There is no business involved. If the Ministries of Works and Finance want to form Road Construction companies that will compete for construction jobs, then it makes sense for those companies to have Boards and Management but not a Board for a unit whose only job is to award contracts using government money” (Museveni, 17.07.2017).

It is ironic again, because NAADs, SACCOs and other Youth Livelihood Programmes have all been created by Museveni and run by close associates, even Salim Selah in some instances. That the President suddenly have issues with this weird. Since on the Campaign Trials, it seems like it is remedy and the solutions to use these government programs, but now with growing debt, it is an issue? You need this money to build a petroleum pipeline and refinery? You can wonder, I wonder, if this is the reason! Since these sort of boards, sort of agencies has been put in place, by laws signed by Museveni and accepted by him. Many is part of legislation to secure each and several ones for pivotal parts of government. Others are just created to hire cronies! Therefore, weird that he want to sack cronies… but maybe it is within need?

I want efficient with no further delays. You have up to 20th December 2017, to propose a plan to Cabinet” (Museveni, 17.07.2017). It seems only to able to change this with bringing in new tools. President Museveni needs these boards for every produce and every parts of government. That is within himself, as the ideology has no value and also no vision. Other than keeping himself in power by any means. Therefore, the boards and agencies will not cease to exists, he needs to hire cronies and pay them by either a hook or a crook. If not he has to go forward or change his system. Maybe he shouldn’t create so many ministries, districts and sort of specialized organizations, but he cannot help himself. That is his MO, nothing else. This will not change! Peace.

The letter:

President Museveni letter to Hon. Muruli Mukasa, Minister of Public Service: “Re: Emolument on Personal to Holder Basis” (01.08.2017)

Opinion: President Museveni wants cronyism on steroids!

We know that the loyalty based between former Members of Parliament, former NRM historical’s is not based on merit or on ideology anymore. It is on the possible paycheck and envelopes given by the state and the favors it gets the President. Everything else is and should be seen as a lie. Therefore, when the Observer quotes a letter from 1st August 2017 sent to his loyal cronies, saying they have to make sure the other loyal cronies get more perks. It fits the paradigm of his growing entitlement and his regime. The President do know the only way of keeping them within reach and loyal to him, is to pay them. That is the only way he can sway them and make sure they got his back. This is the reason for the sudden; we need to give MP allowances and benefits to the ones ousted and who has left office in disgrace. They need a new form of payday, since I still need their loyalty. Just look!

“In an August 1 letter, President Museveni directs the minister of Public Service, Muruli Mukasa, to give the former ministers who were appointed ambassadors the same remuneration they used to get while they still served in cabinet. “As you are aware, I have appointed some former ministers as ambassadors. I, therefore, direct, if it is not against any law, their remuneration, personal to holder, like when they were ministers, minus of course elements like constituency allowance because they no longer have constituencies,” Museveni’s letter reads. The letter is copied to Vice President Edward Ssekandi, Prime Minister Ruhakana Rugunda, Foreign Affairs Minister Sam Kutesa, head of Public Service and secretary to cabinet John Mitala and the permanent secretary of the ministry of Foreign Affairs, Patrick Mugoya. Museveni’s letter suggests that the former ministers could alternatively be paid an equivalent of the monthly pay of Shs 15m for permanent secretaries, although this could come with additional benefits. “Sort it out in a rational manner on the basis of maintaining some of the benefits the individuals were getting previously minus the elements that are no longer applicable,” Museveni further wrote” (Kaaya, 2017).

It is amazing that former Cabinet Members will get perks when they have left office, that can only be keeps his cronies at bay. Not because it is benefits the state or is fiscal responsible. Since the Ministers and Members of Parliament get very high salaries and their reunification, that the ordinary worker in Kampala could “die” for.

Certainly, the President knows this and wants to make sure the former loyal cronies get their paycheck, which they will smile and grin. That they will continue to support him and speak well of him. If that weren’t the case, then this wouldn’t be necessary for him to propose. This isn’t for the love of the country and to take someone. These are the former well-paid politicians and loyalists, who are now sure they get another payday, without any work or office! It should be insulting, but is more of the same, seriously, since many former cabinet members becomes ambassadors, presidential advisors or any sort of title to pay for their loyalty. Not for their advice or political savviness. We all know better.

This certainly will bill up more funds and put more strains on the debt-ridden economy. But why doesn’t President Museveni, he will be dead when the interests and the debt has to be repaid to the creditors. Peace.

Reference:

Kaaya, Sadab Kitatta – ‘Museveni wants ex-ministers to draw cabinet-level pay as envoys’ (18.08.2017) link: http://observer.ug/news/headlines/54467-museveni-wants-ex-ministers-to-draw-cabinet-level-pay-as-envoys.html

Opinion: Bank of Uganda must have bought magical pens!

Hey, Bank of Uganda, the glorious BoU, if you ever need any sort office equipment. I can sell it to you and at lesser cost. It will be fraction of the 357,000 Uganda Shillings per Pens or 125m shillings for 350 pens. At the dollar-rate, you paid $105 United States Dollar for each pen, they must be magnificent and the best pens ever made for the mankind.

Bank of Uganda, I understand the scrutiny you are under and as people are mocking this transaction, how you suddenly needed these expensive pens. I am sure they write the perfect lines and makes the others look like broke-back understudies without proper ink. The pens you bought must be most genuine Parker Pens, which brings the words so flawlessly on paper. When these pens touch the paper, they make such romance, so the ink flowers the paper and even smells better.

I have a feeling that the providers of these pen engraved them too each of the employees, so they have unique pen with their initials or even their nicknames. Therefore, they are all feeling unique and look well after.

“According to BOU, #BOUPens were “Cross” branded and meant to be sold as was the case with commemorative coins and notes in previous years” (NTV Uganda, 15.08.2017). So they were special and unique, they were designed in a way to make them feel special. Still someone who procured them really made a decent profit of the trade. Since pens usually doesn’t cost that much, even when your initially making them special too.

I am sure they bring back the good old times, sprint the words of Milton Obote and Idi Amin, even bring back Yusuf Lule, if lucky the grandest project of the all, the marvelous escape of the NRA. Certainly, the pens of the BoU must possess some sort of special powers. Since, they cost so much. All the things the pens has of value, so they can be used as collateral and even be pawned like jewels. Since they have such value and estimated cost.

So please Bank of Uganda, I got pens that can write in thin-air, spill the ink on the paper and give you the smell of roses. They will cost half of what you used to buy the Cross Pens, and they will look amazing. They will bring joy and happiness, maybe even be more within reason of cost. Since all paperwork and paper-trial of your clients, will smell like a bed of roses? It must be a dream and a dream worth living for, that you want to achieve in your lifetime.

Certainly, Bank of Uganda should consider some reasonable pens for their enterprise, as a state institution, but they are the ones keeping the inflation and the monetary policies at bay. Therefore, they need to be rewarded, not all can get Presidential Handshakes. Some just have to get pens, which are more valued than other people’s rents. That is their dumb luck, not the cashier at BoU. Peace.

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