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Archive for the tag “Central Bank”

Bank of Uganda: Monetary Policy Statement for October 2019 (07.10.2019)

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Uganda: Fresh report states that the debt-service has grown 129% within one financial year!

 

The Republic of Uganda’s economy is really reeling, it cannot be sustainable as the Government of Uganda is growing their debt like there is no tomorrow. While the fiscal growth is substantially lower than their rate of debt-service. As the growth of debt combined with lacking growth to substantiate the shortfall.

In addition, with the knowledge of added expenses, growing shortfall of funds in the upcoming Financial Year of 2019/20 and the election year of FY 2020/21. There will be more add-ons on the need for debt service, as the state already had loans outstanding, which the grace period ends and the debt-service begins on. Therefore, the amount of loans will transpire even more, than what is in this report. The endless cycle of debt and growth of it, is worrying, as well, as the state thinks that the magical wand of oil-money will clear this debt. Even as the first operational oil field and such has been postponed yet again.

Just look!

“The total Government of Uganda external debt service by end of FY 2017/18 amounted to US$275.75 million, which was an increment of l29% compared to US$120.62 million in FY 2016/17” (…) “Debt service of Uganda’s external debt is on the rise and outstripping growth of the country’s income, currently at 6%. This poses risks for future debt repayments, especially as the country continues to acquire external debt at less concessional terms, especially to finance the oil development programme” (P: 6-7, 2019)

“It follows that as interest rates increase, the debt service obligations of Government also increases. The rise in external debt interest costs attests to the fact the government is increasingly contracting non-concessional debt, which will increase the repayment burden” (P: 24, 2019)

“However, this may not be the most likely scenario, as most projects have been discounted and some excluded in the macroeconomic framework. With the development of the NDP III, additional project and other pipeline project related to the oil developments and other infrastructure, will increase the financing requirement of government in the medium term. The inclusion of the above projects will re-classify Uganda from low risk of debt distress to moderate risk of debt distress or high risk if the export shocks materialize. A downgrade would have significant implications for the program with the IMF, where Uganda’s credit risk rating will worsen; implying that accessibility of nonconcessional financing will be limited. This will limit credit to Uganda to only concessional and grants financing.” (P: 28, 2019)

You don’t need to smart about it, as the state has bigger budgets with higher shortfall in the economy, combined with debt service and higher interest payments on the growing amount of loans. You know sooner or later, the economy will tank, as the fiscal responsibility is taken for granted and that fresh funds are lacking, because these are taken out of the economy to finance the payments of the old debts. Instead of generating growth and actually naturally grow the economy, by spending and investing as a state. The money is taken away to service debt, instead of building the state. That is what they are doing and at a alarming rate. Peace.

Reference:

NEC1-19 – ‘REPORT OF THE COMMITTEE ON NATIONAL ECONOMY ON THE STATE OF INDEBTEDNESS, GRANTS AND GUARANTEES’ June 2019, Parliament of Uganda

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

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)

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