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Archive for the tag “Debt Levels”

Bank of Uganda: Monetary Policy Statement for December 2019 (09.12.2019)

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

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

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

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

#UGBudget18: Museveni – Was this a budget speech?

I don’t know where start or where to finish. As I am not a tool of propaganda and here to make the President look like super-star with a brilliant mind. Warning the media, banning Police Bond for Killers and all other spats of nonsense, which has nothing to do with the budget. It is just like he has defend himself. As President, he even attacked MPs and their attitude. They were ATMs to their voters, something he is and been called himself. He even recently tried to bribe his MP into position in Rukungiri. So that the President has short-term memory is evident.

You know he is in self-hostile territory, when one of the biggest donors and on of the biggest media owners Aga Khan gets a warning. Surely, the President cannot handle journalism and only care about praise. He cannot manage that people are looking into the growing debt. As this budget alone is 10 trillion back-pay of loans of the 32 trillions spent. While there is shortfall and growing deficit and the donor funds are still dwindling. Therefore, the need for loans to cover the shortfall is needed. So what the President is creating is a debt-trap. He can say he managed that since he used 27 guns, but different to blow former-leadership into oblivion and actually being able to repay your debt.

I am just awaiting the salute and the simple minded changes he is progressing into middle-income country, as the President is showing less intent of doing anything. He just talking about nothing and everything. Quoting the bible and acting holier than the pope, while warning everyone else. Not that it is securing anything. He will secure it all, as he is the man who has the answers. If this is getting boring, is that he has done this for 32 years and counting. And has not changed, other than his face and tenure of hair on his head.

It is like he doesn’t care and just say whatever that is on his mind. No one will fact-check or really check the relevance, because why mind. Its a deluded old man, who has been so long in power, that the ones going against are either in jail or possibly monitored by the sleeping police officers his been talking about. He is again blaming the mindset of Ugandans. Because there is never his fault. He has just been running the enclave and people gotten lazy, awaiting handouts. Not like he has delivered any of his pledges, built institutions or prosperous organizations for the citizens. That is just his lack of mindset and work ethic.

Therefore, there is no need to really dig deep into the speech. It is mere facade, a mere forged mirage of utter nonsense. A speech rampant of lies and warnings. If your a journalist or MP, you should feel offended. Because he expect to be praised, while your supposed to carry the nonsense from him.

The saddest part is that he takes no responsibility, that he has no accountability or no common sense. That this man just continuing to utter these words, like a word-salad of mockery of intelligence. While expecting that the spinning-machine of his party, his spokespersons and friendly media will make him look a giant. They will eat the crap out of it and make it look like gold, but its only fools gold. Not worth the bling its made off, better to buy a Rollex in Wandegeya, it will at least fill your tummy for a moment. Because the fools gold will be worthless and just ready for the bin.

President Museveni has no cards to play or nothing to say that changes the narrative. Only 1986ing the world and hoping he can get away with it. However, the debt trap should worry him. Nevertheless, it is the next generation that will pay-back it and he will be dead by then. Peace.

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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