The World Bank commends the rising taxes in Uganda!

Yep, the biggest bank and the Bretton Woods Organization called the World Bank has commended the works of President Yoweri Kaguta Museveni and his plans for added taxes. That comes from the similar institution like International Monetary Fund, that ordered Uganda to follow the Structural Adjustment Plan (SAP), therefore, the IMF that fixed more privatization without lacking investments. Are now okaying a higher rising taxes on the Republic’s citizens. This is done, while the economy is not strengthen, but with added external and internal loans. Therefore, the rise of GDP and use of loans, as well as repayments on those loans will sooner or later hurt the economy. Even with the rise of taxes. This will be start of vicious cycle where the state is issuing loans and taxes, while the revenue is used to repay loans, not development. It is basically. But before I go into the deep of the part of the troubling take from the World Bank. Let me just show you quickly the result of the SAP and their advice there.

“The studies also make it clear that for SAP-type policies to have a chance of success, certain preconditions are necessary. The public sector had certain social responsibilities that the current framework has pushed it out of but without “a proper handing over” to the private sector. The assumption and hope were that the market would fill the gap left by the retreating state. Clearly this has not happened. There is therefore need for Government either to retain certain key social sectors, or only hand them over to the private sector only when the latter is ready to effectively take them over. Clearly non-profit making aspects of social responsibility cannot and do not get taken over by the private sector. For poverty to be reduced there are certain social responsibilities or even whole sectors that can only effectively be handled by the public sector. Welfare systems and subsidies to farmers in the developed world attest to the need for the retention of these key areas by the public sector. Therefore a policy that proscribes such a hand-over must also ensure that it is done in a verifiable manner so that the private sector can be held to account. Civil society has in the past tried to fill the gap but this has been done in an ad hoc manner” (Kevin Akoyi Makokha – ‘STRUCTURAL ADJUSTMENT PARTICIPATORY REVIEW INITIATIVE (SAPRI) – UGANDA COUNTRY REPORT: A synthesis of the Four SAPRI Studies’ September 2001).

So, when the last system from the World Bank and IMF was introduced the system and the government wasn’t ready to privatize, however, that didn’t stop them or the government to do so. Especially since the funds and loans at the time came with the hitch of doing so. Therefore, the troubles with the privatization and the lacking oversight is also partly because of these programs subsidized by these organizations. That is why the World Bank and IMF should be more careful professing what sort of thing would be genuine and sincere, since they have messed up before. It isn’t only the State House who has messed up, he has gotten help and followed the procedures of these mechanisms. If not, he wouldn’t be able to eat such vast amounts of donor funding in the past. This is well-known, but the lack of oversight, is because of the will of wanting to have control and a say in everything. That is why the letter from the President to Minister of Finance, is the reason for the new levied taxes. So, if you wonder why I have distrust to the World Bank and IMF, it is because of their history and that the public is paying for it, because their impact on the governments for the reasons. That these states should be guinea-pigs for the economy belief of trickling down economics, even as the results has begged differ if it really drips back into the system again. Which it doesn’t because the ones that gets a lot want to keep it and get some more. No dole it out to anyone they can find.

Here is what the World Bank stated today: “In the special section of the Update, the report analyses how Uganda could raise more domestic revenues to support its development. Uganda’s tax system is one of the most modern in the region, but revenue collections, at 14 percent of GDP, are low, and way below its tax potential. Tax avoidance and evasion, partly resulting from generous tax exemptions to investors, weak tax administration, and a large informal sector (now at 80 percent), pose challenges to increasing revenues. Up to 5 percent of GDP is lost annually in tax leakages. Personal income tax contributes roughly 18 percent of GDP compared to up to 40 percent in developed countries. VAT collections amount to 4 percent of GDP, but would rise to 6 percent if there were no exemptions. The report suggests that Uganda could widen its tax base by tapping into areas that are outside the tax net; applying tax instruments correctly and fairly; improving efficiency, transparency and accountability in tax administration; and delivering better public services” (World Bank – ‘Improving Taxation to Finance Uganda’s Development’ 15.05.2018).

Therefore, the World Bank likes the idea of adding more tax on the Mobile Money transactions and the movement of digital cash, as well as on Airtime and other needed things. The ones that hasn’t a bank-account or the ability to fund or even try to get a loans from the banking system. Are okayed by the World Bank as possible targets for taxes. This isn’t transparent, but making it more expensive to be poor, as the rates to transmit and the use mobile money will come. The companies whose use this method will bill the users, they will not take the hit. The same with all the traders and the importers of all the other items that was on the lists of the newly taxed items.

I doubt these new taxes will do any good, it will just be more funds for the elites, the NRM and the President to eat. They are not delivering government services with the trillions of shillings they are using now. They are billing up to their asses and spending rampant, without having the revenue. That is why the rising debts are there. Instead of living frugal and thinking of the future, the NRM and President Museveni are eating like there is no tomorrow!

State House, the President and the Cabinet are eating heavy, they are not delivering, they have no plans to do so. If so, they give locally when needed, but the lack of transparency and accountability, is the reason for missing funds. Recently even the documents from the GAVI Funds was taken from the Ministry of Health. Therefore, a government who cannot be trusted with funds giving donations to help the sick, how can we believe the tax put on Mobile Money will go to roads or teachers?

I doubt that, I am not that naive, this NRM has proven for 32 years, that they are eating and not caring. The World Bank can commend and praise. While I condemn, until they prove that they money are delivered to the schools, that the teachers have their salaries and the civil servants are properly paid. Not just hiring some random Cubans to fix the issues for a short time. That is not how to build a national health care system. That is how to mock the ones you already have. Peace.

#UGBudget17: Half borrowed and a third paid back in Interests!

Today the Ugandan government, the National Resistance Movement finally read the Shs. 29 Trillion budget for the 10^th Parliament. However, it is not necessary the size of funds and all, which is allocated, but the way it is funded. Like “Government hopes to raise sh14.6 trillion in revenues to fund the 2017/2018 budget” (Uganda Debt Network, 08.06.2017). Of the 29 Trillion, they expect to get close to half of that, but the monies has get from somewhere and also be of use. What is left are relieved like this: “The balance sh14.3 trillion (49.5%) of the National Budget will be raised through internal and external borrowing” (Uganda Debt Network, 08.06.2017). With this in mind, half of the budget is adding more debt. So if a nation already having lots of debt and debt repayment, it still adds another half budget. This is a bad cycle of events.

There lets us put things in perspective: “Our concern is sh9.9trillion, which is 35% of the total budget, will be spent on debt repayment” (…) “Amount of money spent on debt repayment has escalated in the recent past now at 9.9 trillion for fy2017/18” (Uganda Debt Network, 08.06.2017).

Therefore, the state and the NRM are clearly getting funds through loans to pay-off their interests. AS the 35% of spending is on interest in the coming fiscal year. This should worry, even if the corruption, misspending of obnoxious amount of funds through the paradise of Okello house. Still, that 1/3 of the coming budget is paid interest on old loans, which are been made by this government and by this President. What it show is the lack of concern of the future and how sound fiscal policies. At this state, the government of Uganda are clearly footing the bill. They are filling in the blanks for where they in the past had happy donors filling the envelopes.

The NRM and President Museveni is overspending and misusing state reserves, as the revenue and the state coffers do not sustain this massive overspending. Certainly, it is visible, also the worry of the running interest rates and growing debt as close to half of this year alone are by loans. Neither if it is local, by foreign or multi-national financial institution does save the fact, that the state has a problem.

That of the coming fiscal year, the state is borrowing half, and repaying that with 35% says a lot. IT says the fiscal policies needs change and it is dire. The state are clearly walking the wrong path. And remember this, there will be supplementary budgets during the fiscal year, that will expose the overuse of funds and needs for more loans. Therefore, they are surely going to exploit the faith in future, without having the funds for it today. Peace.

Uganda: Civil Society Position on Tax Revenue Measures for FY 2017/18 (21.04.2017)

Uganda: CSBAG – “Reducing Wastage and Curbing Inefficiences to Finance our Priorities for the FY 2017/2018 (09.04.2017)

MFFPS press statement strongly condemns Imbonerakure militia’s “call for rape and impregnation” of women and girls in Burundi (08.04.2017)

Burundi: La Video de l’Horreur (05.04.2017)

Response:

Burundi: Degagement autour du site qui va arbiter le Palais Presidentiel a Gasenyi (14.03.2017)

Burundi: Portant Nomination du Porte-Parole et du Porte-Parole Adjoint du President de la Repulique (06.03.2017)

UNSC Report of February 2017 on the Burundi Crisis: Staggering human rights violations has unfolded since 2015!

The Burundian crisis as described by the United Nations and a report delivered to the United Security Council on the 23^rd February 2017. This is the most recent compiled report on the situation of safety, human rights and peaceful work in the East African republic. Where the President Pierre Nkurunziza, decided to run for a third term, even as the constitution after the Arusha Peace Agreement, was set to be possible to have two terms.

So we are in March 2017, as the crisis has been going on since 2015. The Burundian government have continued to assassinated, detained and intimidated their population, as much they have also created a political climate where the Nkurunziza regime is hostile to foreign interference, as well as the toil of the crisis, also creates a vacuum in economic and fiscal funds for the state.

All of this is reports made to the United Nations and found by the UN Human Rights Observation Group that been stationed in Bujumbura and had to request and notify the government of their arrival. The Government are keeping their hands more tight and controlling as they want to supervise even the experts from the UN. Therefore the report has been criticised by Burundian government as expected. Because who would like to have these sorts of allegations and reports about their government. When you put the Burundian government acts together you can see a systematic oppression of the citizens of the republic. That is not a look any government want to be put in the public space, but this sort of aggressive police state and use of political youth wing to oppress the people. Just take a look!

Political Crisis:

“Nearly two years have passed since the beginning of the political crisis in Burundi, which was sparked by the decision of the ruling party, Conseil national pour la défense de la démocratie — Forces pour la défense de la démocratie (CNDDFDD), to support President Pierre Nkurunziza ’s candidacy for a third term. Since then, the political impasse has only deepened. Political space has been narrowed further through repression. In lieu of meaningful dialogue, the exchange of political views, primarily in the form of accusations and counter -accusations, is taking place across social media and in public communiqués. I n a new development, President Nkurunziza suggested in a statement at the end of 2016 that he might seek a fourth term in office “if the Burundian people decide to change the Constitution according to their wishes” (UNSC, P: 1, 2017).

Violations of the State:

“While the Government insists that the situation in the country has normalized, political opposition and civil society leaders continue to appeal for urgent international action to avert the risk of further deterioration, widespread violence and mass atrocities. Despite a decline in overt violence and fewer incidences of armed confrontation, reports of human rights violations and abuses continue, including killings, enforced disappearances, gender -based violence, arbitrary arrests and detentions, torture and ill -treatment, along with the discovery of unidentified bodies. The allegations of more than 200 cases of enforce d disappearance since October 2016 are of particular concern. From April 2015 to 31 December 2016, OHCHR documented 593 violations of the right to life, and hundreds of people continue to be arrested every month” (…) “Many Burundians live in fear as a result of widespread repression and increasing intimidation by the Imbonerakure, the ruling party’s youth wing. There are also unconfirmed reports of attacks and human rights abuses committed against Government supporters and security forces” (UNSC, P: 2, 2017).

Establish a new Constitution in violation of the Arusha Peace Agreement:

“On 16 November 2016, the Council of Ministers approved the establishment of a constitutional review commission mandated to study amendments to the Constitution. The commission is reportedly tasked with analysing articles of the Constitution to be amended for Government consideration and, with the latter’s agreement, proposing an amended draft Constitution. It further stated that the Council’s decision had been informed by: (a) recommendations on constitutional amendments contained in reports of the National Independent Electoral Commission, the National Independent Human Rights Commission and CNDI; (b) the resolution adopted at the 11 October meeting of political parties and leaders; and (c) the need to harmonize certain articles with EAC law. Opposition political parties and civil society criticized the Council’s decision, warning that any deliberate violation of the Constitution and the Arusha Agreement would only worsen the current political crisis” (UNSC, P: 3, 2017).

Security Situation:

“The security situation remains fragile. While incidents of overt violence and clashes between armed groups and Government security and defence forces had ebbed for some time, daily allegations of arbitrary arrest, ill -treatment, torture and enforced disappearance, along with the discovery of bodies, continue to be reported” (…) “The Imbonerakure reportedly also routinely participate in joint operations with the police and intelligence services and are reported to have been implicated in numerous cases of arbitrary arres t and disappearance, ill-treatment, killings and some cases of sexual violence” (UNSC, P: 5, 2017).

Burundian and Rwandan Relations:

“Relations between Burundi and Rwanda remain tense. Throughout the reporting period, isolated border incidents, as well as trade and movement restrictions, were witnessed. On 29 July, the Council of Ministers decided to stop the export of all food products to neighbouring countries, repo rtedly in response to insufficient domestic production. On 23 August, the East African Legislative Assembly decided to investigate issues affecting trade and free movement of citizens between Burundi and Rwanda. Burundian security forces frequently arrested individuals travelling to and from Rwanda, as well as the United Republic of Tanzania” (UNSC, P: 6, 2017).

Political Rhetoric:

“Since the beginning of the crisis, political figures have used inflammatory and hate-filled language in speeches, on social media, in communiqués and in the press, calling on the population to “protect” the country against so-called traitors and plotters allegedly trying to destabilize Burundi. Rhetoric has included incitement to violence, as well as attacks on the opposition and against civil society, while neighbouring countries have been accused of involvement in attempted assassinations” (UNSC, P: 9, 2017).

Effects of the Crisis:

“There has been a four-fold increase in the number of people who are food insecure — from 730,000 to 3 million — owing to the rising prices of basic food items, the seasonal rain deficit during the 2016 agricultural season, chronic poverty and poor harvests. According to the World Health Organization, some 8.2 million Burundians (73 per cent of the total population) were affected by malaria in 2016; 3,826 died. The number of internally displaced persons is estimated at 170,000, while the number of spontaneous returnees identified so far in some targeted provinces is approximately 37,000. The monthly rate of arrival of refugees in Neighbouring countries from August to October 2016 doubled from previous months, and the increasing trend was confirmed in the first weeks of 2017. As of early February 2017, the number of Burundians who had fled the country since April 2015 stood at 387,000” (UNSC, P: 10, 2017).

Human Rights Observers:

“As of February 2017, only 45 African Union human rights observers, 32 of whom are funded through catalytic funding provided by the Peacebuilding Fund, have been deployed to Burundi. Twenty-three African Union military experts have been deployed; however, owing to a scheduled rotation, there were only 10 African Union military experts in the country at the time of reporting. Despite months of negotiations, the Government has yet to sign a memorandum of understanding guiding the African Union deployment in Burundi” (UNSC, P: 12, 2017). “The Office of the Special Adviser and OHCHR are not alone in experiencing Government restrictions. Some members of the United Nations country team have been affected by the Government’s decision to require 10 days’ notification ahead of any in-country travel. There have been delays in the processing of visas, and some local staff have faced intimidation, including instances of arbitrary arrest” (UNSC, P: 13, 2017).

If you read this you couldn’t be shocked as the reports of this actions has been in media, but when you collect them, you can see the evidence of the systematic oppression of the people. This is the reason for the refugees and the hard-hitting report that we’re delivered this February. People should know what is happening in Burundi and not let it pass-by all the other scandals and the atrocities happening in the world today. Peace.

Reference:

United Nations Security Council – ‘Report of the Secretary-General on Burundi’ (23.02.2017)

Burundi: “Menace des Subventions du Fond Mondial pour le Burundi suite au malaise au sein du Ministre de la Sarte Publique et de la Lutte contre le Sida” (08.02.2017)