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Archive for the tag “Central Bank”

Bank of Uganda: Monetary Policy Statement for April 2019 (01.04.2019)

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Bank of Uganda: Monetary Policy Statement for February 2019 (07.02.2019)

Opinion: If Bosco and NRM have a problem with foreign interference, than stop taking their money!

Charity … is the opium of the privileged; from the good citizen who habitually drops ten kobo from his loose change and from a safe height above the bowl of the leper outside the supermarket; to the group of good citizens (like youselfs) who donate water so that some Lazarus in the slums can have a syringe boiled clean as a whistle for his jab and his sores dressed more hygienically than the rest of him; to the Band Aid stars that lit up so dramatically the dark Christmas skies of Ethiopia. While we do our good works let us not forget that the real solution lies in a world in which charity will have become unnecessary.”Chinua Achebe

At this days, the National Resistance Movement (NRM), the peddlers of information and defense of the ill-advised activities of the Ugandan Government are now attack the Foreign Donors for interfering in internal affairs in the Republic. However, what would President Yoweri Kaguta Museveni and the NRM do without the donor funds and direct government support?

As every time there is a launch of government programs and development projects, it is mostly based on foreign currency and funds, which secure the needed services of the government. That is why if a road is built, if a bridge is fixed or even possible investments into oil industry. It all defines by the need of foreign investment and donations. As without these, the government wouldn’t be able to carry it, as they are drowning in debt and lack of fiscal financial funds to actually do it. That is why either United States, European Union or China is behind the support of various development projects and direct government funds.

However, if the Republic has an issue with the criticism from the EU after the Arua By-Election. Then first do yourself a favor. Stop taking their money and their government support. As they are the ones pledging these funds and therefore, they are not wanting to help a government that hurts and kills own citizens to stay in power. That is why the EU is reacting to the open-bazaar torturing and oppressive behavior of the NRM regime. Bosco and his henchmen might be mad that this is leaking and that this hurting their pride. Nevertheless, if they have an issue with the EU, take it in the diplomatic channels and also address it as political operatives. Instead, they are attacking the EU. They should be lucky that the EU isn’t suspending their funds and stops direct support. Because we have seen what that did to Uganda, when the World Bank suspended funds to Uganda National Roads Authority and stopped building roads for a while.

Therefore, if the Ugandan Government don’t want to be transparent or questioned for their behaviors by donors or even foreign powers. Stop taking their money and use their funds for needed government services. Stop taking the donations and loans, the fiscal supply from abroad and forget that there is no free money. There will be strings with taking the money from either Multi-National Organizations, the Breton-Woods Organizations and the other Aid Agencies. All of them have a mission and policies to follow, just like the state. So if the state they operate in breaches this, they have the rights to voice it out. As this is their money and they are using them in Kampala, instead of Mogadishu or Kathmandu.

That is why the NRM and Bosco has to get real, they are not donor darlings anymore, because the reality of the acts of this government is shown to the world. Not because of Bobi Wine, but because of what the NRM does. Their acts are shown and repeated, beating civilians, not taking care of their ill bodies or even making sure their rights as citizens are respected. Especially if they question the President and his party. That is a no-go.

Therefore, the NRM and Bosco have to decide, do they want to only take loans without any interference from China or do they want funds with strings from EU/USA? Does the NRM and Bosco want to make sure that they can pay-back the loans and interests to the Chinese? As they are not as forgiving as the Western Powers, as they did write-off loans in 1980s and early 1990s to Uganda. That should be remembered, but Museveni have become forgetful, unless it fits his continued existence and rule.

That is why the defenders of the government and party, should ask themselves, if it is so critical and important to be independent and sovereign, why take foreigners money anyway? Can you not operate without it? Then you are totally free and they can shut-up, as they are not contributing anyways. They can just be naysayers from abroad and their input will not have any force behind them. However, now, the Ugandan government should ask themselves?

Can you stop the donations, the loans and funding from all the stakeholders and be truly sovereign?

If so, than the power of the donors will be depleted and their reach will be less. However, as long as they are letting donors be key part of government programs and development projects, they are obliged to listen and follow some of the strings attached. Peace.

Uganda: Cabinet Decisons taken during the Cabinet Meeting held on Monday 10th September, 2018 at State House, Entebbe (10.09.2018)

Has the Cabinet repealed the laws to able to merger the Authorities and Agencies? Didn’t think so!

Today, must been a day that President Yoweri Kaguta Museveni have suddenly awaited for since writing a letter dated on the 17th July 2017 titled: “Re: Mushrooming Agencies/Authorities” sent to Finance Minister Matia Kasija, to tell this:

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).

That is why the Press Conference done by Frank Tumwebaze today, was to tell what the giant Cabinet has decided to do on the 10th September 2018. Which is more than one later and also 9 months after the fixed deadline President Museveni gave to Cabinet. Seemingly that haven’t matter. What matters to me, is that they are closing Authorities and such, which is there by law. They are not repealed or gone, as the Cabinet of 80, should be able to figure that out, but certainly they are more preoccupied with doing measures that pleases the President.

I will looking into a few of the Agencies and Commissions that are now in the spotlight, as most of these are parts of laws and are in-forced. Meaning, this laws needs to be repealed or amend them. To take away the legality of having the set commissions and such. This is something the President and the Cabinet should already know, however, this is more a learning sessions of the ones that is mentioned for being reverted into the Ministries of the Republic.

With the likes of Uganda Retirement Benefits Regulatory Authority (URBRA), which was commencement on the 26th September 2011. Have the cabinet a plan to repeal the Uganda Retirement Benefits Regulatory Authority Act of 2011? Until then, they cannot discontinue this Authority, right?

The same can be said with Uganda Free Zone Authority (UFZA), which was established because of the Free Zone Act 0f 2014. The Uganda Investment Authority (UIA) was established by enactment of the Investment Code Act of 1991. The same can be said that Uganda Export Promotions Board Act of 1996 established the Uganda Export Promotions Board (UEPB). This is just three acts, which shows there was laws creating these ones, that being URBRA, UFZA, UIA and UEPB. This I did with very little or no research, all of these laws are still in-force, meaning that they have to repeal these to kill of these boards and authorities.

Who knows if it similar with the rest of the Authorities, but if I was working there, I would sue the government as the laws are allowing their existence and their mandate under a minsitry and lawful funds to operate. Therefore, there should be reactions to the Cabinet Resolutions.

At this point, if there is any rule of law and the laws have some value, than the government should work on repealing the Authorities laws and ensure there is no legal ground to keep them alive, if they are a waste of government resources. Until, then, the laws are giving them mandate and also a lawful existence, no matter what the Cabinet enacts or written resolutions. Peace.

Bank of Uganda: Monetary Policy Statement for August 2018 (13.08.2018)

Uganda Bankers’ Association: Position of Financial Institutions under the UBA Umbrella Notices Recieved from URA to Obtain Information of all Account Holders (08.04.2018)

Prof. Tumusiime-Mutebile: Bank of Uganda is Soundly Managed (05.04.2018)

Bank of Uganda’s Fresh report spells fear of the growing levels of debt!

This isn’t breaking news, this just facts at this point. The growth of debt is becoming a danger for the economy in Uganda. Because of the overspending and lack of donors to pledge for the needed government services, the bloated amounts of local government and the rampant cronyism. Is all combined making sure the extent of the economy gets hit, while the Uganda Revenue Authority, doesn’t have enough levies or enough taxes to gain enough for the shortfall of cash. The deficit is founded on loans, while the government are still paying interests and growing the debt ratio at a scale that is not healthy for the economy. Even if there is a future possible oil-revenue, it still has to become massive, to repay the debts of yesterday. When the amount of GDP goes to repaying and higher rates on the new loans. This is how to step-by-step killing the economy, by circling and re-issuing new debt, to pay off the old debt. Sooner or later, you need a scheme to fix it and start a Ponzi scheme to fix the economy. That is why there are ghost refugees and ghost projects to fix funding for the failing state.

Just take a look:

The provisional total public debt stock (at nominal value) as at end December 2017 stood at Shs. 37.9 trillion, representing an increase of 9.4 per cent relative to June 2017. This growth in the stock of public debt was mainly on account of a 12.2 per cent growth in public external debt (in Shillings terms), which continues to have the dominant share of 66.3 per cent of total public debt. In December 2017, external and domestic debt amounted to Shs. 25.1 trillion and Shs. 12.8 trillion, respectively, which is an increase of 12.2 per cent and 4.2 per cent, respectively, compared to June 2017.

The provisional stock of public external debt disbursed and outstanding stood at USD 6,902.7 million as at end December 2017, representing an increase of 10.8 per cent from June 2017 compared to an increase of 24.6 per cent in the corresponding period a year ago. The total external debt exposure (debt disbursed and outstanding and debt committed but undisbursed) amounted to USD 11,690.6 million as at end December 2017” (BoU, P: 16, 2018).

The present value of total public debt as a ratio of GDP stood at 28.1 per cent as at the end of December 2017, which is lower than the PDMF benchmark of 50 per cent. However, including committed but undisbursed loans, the ratio of total public debt to GDP is closer to the threshold. This poses a risk of higher exposure or failure to meet external debt obligations in case of exchange rate volatility and slow growth in exports. In addition, high debt may become a drag on economic growth by discouraging public investment due to the high debt service costs” (BoU, P: 17, 2018).

This sort of report should worry anyone who cares about the future, the growing debt is a bad sign. It is a sign that the National Resistance Movement and President Yoweri Kaguta Museveni, is putting the future at risk, because he wants to eat right now. Instead of balancing the budgets or trying to find ways to get fresh revenue for the shortfalls and deficits, instead he is borrowing for everything and with the lack of transparency, the funds are embezzled and gone in the wind. Therefore, the state can often borrow for something that only exists on paper. Which is even worse, because they are not delivering anything else than growing debt like it is a gifts. That they will not pay interests and pay it off sooner or later.

The amount of loans should worry, it really should. This sort of reports should shatter the Parliament, should reshape the government and should make the Finance Minister Matia Kasaija and Treasury Secretary Keith Muhakanizi, wish their were on a peaceful island drinking umbrella-drinks, while far away living on their pensions, and hope they are not getting a Q&A at the Plenary Session. Since this is damning and beginning of troubles ahead. Just not knowing how damaging it can be. Peace.

Reference:

Bank of Uganda (BoU) – State of Economy – March 2018

Minister Kasaija are borrowing more money, because of a shortfall he say!

Uganda is your country. When you’re writing a story, ask yourself if it is going to build or destroy Uganda. Is it going to bring peace or anarchy?” (…) “I’m advising my good friends of New Vision that for the good of your country, do not publish stories that are not true. My telephone number is known by everyone, call me. If I can’t respond then wait, because I’m also a busy man but I’ll respond. Let me repeat, for the good of your country, please don’t publish false stories” – Matia Kasaija, Minster of Finance.

I know, some people get touchy when stories comes out. Out of the woodworks suddenly the questions arise and people are thinking? Why? Why does the state borrow even more funds, is it needed even? How come the State, who is already borrowing heavy sums of money from all sort of bilateral, multi-national banking institutions suddenly need to borrow money from domestic sources. That question should be asked and need to questioned. Since the reality of the matter, isn’t what it is used to, since this government cannot even explain where the PTA Loans went. It is amazing how things are going, that the State can take up loans like this after already no accountability on the previous ones. The same minister is already questioned for the loans done with PTA loans, who knows what else that has gone missing, as the GAVI and CHOGM Funds of the past suddenly vanished into thin air, hard not imagine that this could happen again.

“Yesterday, Monday 19th February 2018 the New Vision Newspaper front page lead headline stated that Government is borrowing UShs. 700 Billion to pay salaries for public servants. I would like to inform the General Public that this story was an exaggeration of the proposed borrowing that I laid before Parliament. We borrow to a large extent to finance capital development and production. In my letter dated 9th February 2018; I submitted a proposal to Parliament seeking authority from the House, in accordance with the requirements of Article 159 of the Constitution of the Republic of Uganda, to borrow additional Ushs 736 Billion from the domestic financial market to finance the Budget for FY 2017/18” (Uganda Media Centre, 2018).

This money will go to “development and production”. We can wonder where that is, if it is the bills of Gen. Salim Selah hotels as the seedlings delivered by, Operation Wealth Creation (OWC) is lack-lustre at best. Who knows where all the pooled monies for NAADS are going, but clearly not all of it is not going to micro-economic benefits for the society.

Shortfall is clearly there and the weak economy, that has been juiced up and run like a drunk seaman. That is why as the last end of bottle of beer is there and the need to go down to the bar and buy more brew on credit. That is the ordeal of the day. It is not a narration by Morgan Freeman and a beautiful tale of forgiveness and hope. No, it is a tragic day of even more debt, this time internally and used by the state. Since they are embezzling and taking away funds from the public. This will create more pressure for liquidity in the banks who borrows to the state, as this is taking from their own reserves to bailout the state. Eventually, the state has to find other funds to pay back the banks.

It doesn’t take a wise to understand, that adding more debt, while growing debt and also paying interests is a vicious cycle. They are recycling loans and adding more interests and more debt to be repaid in due time. We can just pound on that and wonder why the state hasn’t made a budget that is within the reach of the economy, but the government isn’t like that. They are spending money like there are no tomorrow. Having one beer, another one and another one. Now it’s drunk and don’t want to lose the edge, the steam and the good feeling of tipsy. The state doesn’t want to get the hangover and deal with the cure. They just want to shug more bottles and hope no one notice. Peace.

Reference:

Uganda Media Centre – ‘Statement on the proposed government borrowing of UGX 700 billion #UGCabinetResolutions’ (20.02.2018) link: https://ugandamediacentreblog.wordpress.com/2018/02/20/statement-on-the-proposed-government-borrowing-of-ugx-700-billion-ugcabinetresolutions/

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