That MP Abdu Katuntu gets to hold the Chair of the COSASE as the Speaker Rebecca Kadaga allows him to continue the Probe into Bank of Uganda (BoU) and the scandals it entails. This is like shady play, because if Katuntu are allowed to stay, what offers have they given to prolong his term as the chair of Committee in Parliament? Isn’t the legal protocol abiding for the lawmaker and MP?
Alas, that is just showing the mere disgraceful display of ignorance, the chronic cronyism and the patronage of the state. Even if Katuntu is waving the flag of an opposition party and being an MP for the Forum for Democratic Change (FDC). His acts of overstaying is the same of the ruling regime. He is just waiving differently in the elections, but when in power. The man has trouble emulating the ones he is supposed to oppose and defy.
That the Speaker Rebecca Kadaga allows the MP to be the Chair until the probe of the closure of banks done by BoU. Just shows the mere reflection of how the state doesn’t care about the laws or abiding to it. When it comes to their own. They trust Katuntu, that he will deliver the recommendations and the verdict that the state wants. If not, they wouldn’t have let him continue.
This even as the MPs are supposed to follow Rule 146, which sets an MP is only allowed to be 2,5 years at a Committee. That is clearly done, so they can ensure that they are getting more portfolio and not to connected in one field. As the connections and the cronies can team up, stop the back-log and also the lack of reports being discussed in the Plenary Session. Maybe, that is also why the Katuntu want to stay. As he has certain favours to uphold.
We can really question, as the final ending of the investigation of the BoU cannot be that important, unless the patronage around Kadaga and the President. Are planning to bury the report and make it as pointless, as certain other Parliament Reports, which are as stale as very old wall-paint after years of bad weather.
We can wonder why Kadaga fights over the rules made for the 10th Parliament, the rules made to ensure transparency and accountability of the Parliament. The 10th Parliament rules should be hold, especially by the Speaker. If the Speaker doesn’t care, should the chambers be invaded by strangers and also fake evidence for the Parliament, because if the terms doesn’t matter. Does anything else?
If the COSASE Committee terms becomes pointless, than what else is pointless dear Speaker? We can just wonder, why do the Parliament have protocol and guidelines anyway? If the Speaker doesn’t follow them or can change her mind?
That is how it looks like and how can we trust this probe, when the chair of the committee can just override the rules. Gets extended and violate the laws to finish a probe into dealings done by the BoU. We can really wonder if the report will be juicy or be watered down juice. Certainly, I cannot trust it now. Not that I ever did, but before, they at least acted like they cared about protocol. Now, it is just pointless exercise of power. Without any rules, as the Speaker can overrule everyone. As she wants. That is the memo, we have gotten this week. Peace.
The Bank of Uganda (BoU) have during the last two weeks shown it blatant side and also its frauds to the public. As the acquisitions of failing Banks hasn’t been done with procedures or protocols. They have not acted in good faith. They have acted ill-willed and certainly not considering that their actions would be looked into. As they was the buffer for the state and the Movement itself. While they could monitor and configure the acquisitions of these failing banks.
That the leadership of the BoU are a proof of the how the state are triggering themselves on the common market. It is a rodeo, it is the Wild West, where the biggest head are getting the stakes and hopefully nobody will look into the transactions. That was until the Parliament and the Parliament’s committee on commissions, statutory authorities and state enterprises (Cosase) started to question the acts of the Bank. The realities of how the BoU has acted.
They can not hide it under the rug. This all is happening because the BoU couldn’t explain the transactions and trade-off with the recent Crane Bank. That is why they are looking into Greenland Bank, International Credit Bank, Cooperative Bank, Global Trust Bank and Teefe Bank. The BoU even sold three banks to Ghost Companies not existing, that was based on Mauritius. Which, shows how the leadership have failed their role or if not laundering money for the high above.
As well, as the most striking feature, is not only loosing the documentations for the COASE Committee in the recent takeover. But the evident acts of not having the assets, the inventory or even following any procedures doing so. What is worse, the lack of oversight or even critical eyes by the Parliament or even the Ministry of Finance, Planning and Economic Development (MoFPED), as these should have seen it coming. They should wonder why securities, the statutes and the banks was sold without the procedures and needed clearances. This to secure the clients and also the assets of the banks.
It is like they have closed into thin-air, in major heists of the elites, where the BoU have used their tools of disposal, to clear the tenant’s and their liabilities without any scrutiny. Clearly that has been the message, as the Banks have been lost, but been transferred to new homes. These homes has gotten the fortunes or their assets without the BoU could tell what they pushed further. Even selling it to companies not existing.
That the BoU have problems are clear, but they are like the state in general. Who has Ghosts everywhere and creates them for a reason. To hustle and create ghosts to earn more on non-existing projects, this has been there as long as Museveni have been president. It is just a proof of illicit and the problems of society in general. BoU is just a mirror of the administration, of the government and the backwards ways to grabbing money, while the honest are thieved.
The BoU have all been wrong, done it horrific and massively underestimated their history, their practices and the realities, which they now suffer. Certainly for a reason. If the President wants to get rid of one of the leaders within the Bank. This is the sort of scandal that clears the house. But these transactions and these sort of activity will not go away. As the elites and the Presidency has accepted this for decades. This has been done since before the millennium.
Therefore, it will be more skeleton released and show more disgraceful acts from the BoU. They have done it, because the regime has earned on it. If not these practices would have been gone long time ago. Then the Special Force Command would have ambushed the Bank and barricaded it. Peace.
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!
“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).
“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.
Bank of Uganda – ‘ANNUAL SUPERVISION REPORT’ (December 2016) Volume 7 (06.09.2017)