Opinion: Honourable Minister, 10.6 Billion shillings isn’t wired by an error…

Finance Minister Matia Kasaijja has admitted to irregularly paying out 10.6 billion shillings through a supplementary budget to six people as compensation for land that was taken over by the central government. However, the Minister told Members of Parliament that the then Lands Minister who is now the Inspector General of Government Beti Kamya did not have the powers to initiate the supplementary budget on behalf of the Uganda Land Commission” (NTV Uganda, 31.05.2022).

Finance Minister Matia Kasaija has admitted that the UGX 10.5 billion that was released to compensate land claimants was done in error” (NBS Television, 31.05.2022).

This is how not to run a government and wasting public funds. The Ministry of Finance, Planning and Economic Development (MoFPED) are in-charge of the budgets and financing of the state. That’s why there should the grown-ups and technocrats who ensure the safety of every single transaction, also that the designation of votes on spending is correct and finally properly financed by domestic revenue. However, asking for that… is too much to ask.

This is not a direct error or a mistake, but a calculated risk to pay-off either someone or somebody. Because, nobody gets billions of shillings on their account by a mistake. Unless, the Minister and the MoFPED are so inept and so scrupulous that it has done this. Now his just claiming an error…

That is troublesome affair. Elsewhere, this would make an inquiry, committee report and the Minister would be suspended. Since he cannot function, act within protocols or the due diligence before processing the transactions in question. Because, there should be safety-nets, vouching for the payments or transactions before they are going out. So, that more than one person is checking if the accounts, the people receiving is correct and within the means of Ministry or Government institution in question. However, that is clearly too much to ask.

Minister Kasaija has failed in his duties, the same has the Permanent Secretaries and anyone allowing the transactions to go. The receivers are not at fault. That is the MoFPED and the ones who allowed it. There was people signing it up on it and allowing it. Therefore, the losses and the expenditure happened.

This is 10 billion shillings spent wrongly and dubious transactions, which should be a warning sign of how not to operate. However, this is just the ice-berg of what is happening. Since, if they can do this with 10 billion shillings and they are in-charge of trillions upon trillions of shillings. That’s why people should be worried what else is happening behind closed doors.

The Minister shouldn’t just call it an error, but it is a systemic default. It is a system and protocols which isn’t mattering at this point. If due diligence or procedures was followed. This shouldn’t have occurred in the first place. However, they didn’t care and could get away with it….

That’s why this is just a reflection of how the MoFPED and the NRM values money. There is no value of money, but only reckless spending without no thought about tomorrow. Peace.

Joint Communique on the Occassion of the State Visit to Uganda by Her Excellency Samia Suluhu Hassan, President of the United Republic of Tanzania, 10th – 11th May 2022 (10.05.2022)

The Art of Deficit Financing: Budget 2022/23 and the worrying affects of the growing debt…

The proposed budget for FY2O22/23 hos increased to UGX 47.25 trillion from the approved budget of UGX 44.77 trillion in FY2O21/22. ln the proposed budget, recurrent expenditures amount to UGX 33.54 trillion (71%) while development expenditures amount to UGX 13.70 trillion (129%). Worryingly, the projected revenue collections of UGX 25.54 trillion cannot fund the country’s entire recurrent expenditures” (Opposition Response to the Annual Budget Estimates for FY 2022/23, 03.05.2022).

When you read the first numbers on the Budget for the Financial Year of 2022/23 you see a problem that has been a long lingering issue. The National Resistance Movement (NRM) and Government of Uganda (GoU) has done this for several of years now. The state has banked on loans and grants to cover the deficits. While the state is budgeting with a deficit financing method, which is far from covering fiscal funds by the lack of domestic revenue. That’s why the rising debt and the cycle of recycling debt isn’t making things better.

Just read this paragraph here:

It is critical to note that debt management costs hove risen from UGX 8.58 trillion in FY2017/18 and ore projected to be UGX 15.94 trillion in FY2022/23. This translates to on increment of 86%. The costs take first coll on the budget to cater for interest payments, commitment charges, debt management fees and amortisation. Therefore, from the onset 33% of the proposed budget will

not be available for service delivery. instead, it will be utilised for payment of partial debt commitments” (Opposition Response to the Annual Budget Estimates for FY 2022/23, 03.05.2022).

Just seeing this number, as you see the lack of domestic revenue to cover the budget of 47 trillion shillings, which is only at the level of 25 trillions. While the project debt management is put to about 16 trillions shillings. That means most of the domestic revenue would be used to pay old debt. Unless, the state plans to take out more loans and recycle debt to pay the old debt. That is just pushing the problem further down the line and get more interests as well. Therefore, the state finances isn’t tricky anymore, but a tragic phenomenon. These sorts of numbers are getting closer to default and a possible debt trap at one point. As the state needs more loans to cover current loans. That is not how to run a nation and neither how to run a fiscal responsible government.

The numbers becomes even more striking:
“The advance effect of this astronomical level of borrowing is felt through interest payments of over UGX 5.5 trillion in FY2O22/23 rising from UGX 2.4 trillion in FY2017/18. An increment of 130%. This is coupled by external debt repayments that ore projected at UGX 2.4 trillion in FY2022/23 rising from UGX 589 billion in FY2017/18. An increment of 307%. These toke first coll on the revenue collection and reduces funds available for service delivery” (Opposition Response to the Annual Budget Estimates for FY 2022/23, 03.05.2022).

We see the debt management and now we see the rising interest payments are also doing the same. The ones that has been crying wolf and worried for the rising debt portfolio is catching up with the government. The Ministry of Finance and Planning and Economic Development (MoFPED) has failed to comply with the mechanisms and the codes of Public Finance and Management Act. Clearly, the Government and the all the Ministries has to be following suit.

These sorts of numbers should strike fear of a debt default and a crashing economy. The art of deficit financing … is now becoming a growing issue. The state cannot hide from this and this should worry the citizens. As there is nothing given that the creditors will be merciful or give way. They might … be vengeful and take collateral over failure to repay the debt. Peace.

Opinion: Museveni – “China might be a problem in the future” – it will be if you default on your debt

Africa has been having problems for the last 600 years due to the slave trade, colonialism, neocolonialism — and none of it was from China” (…) not seen any serious problem, because their approach is different” (…) “They do not impose their offers if you do not want them, so we have not seen a problem for now. Maybe a problem in the future, but not now” – President Yoweri Kaguta Museveni (Sinan Tavsan – ‘Uganda leader says China-style diplomacy ‘better than’ the West’s’ 17.03.2022, Asia Nikkei).

President Museveni had an exclusive interview with a journalist from Asia Nikkei and it was published today. These few quotes are from there and it is striking. The former donor darling of the West. The President who has pandered to the interests of the United States and their allies for ages. Who has eaten of the buffet of aid, grants and all sorts of prepositions, which has given him a larger than life persona.

That man is now blaming the West for if all. He is right in going after the colonial past of the West and the neocolonial structures, which are hampering development and continues the cycle of rich versus poor. This is justified, but he also shows a little nativity in concern to China.

It is just like he don’t think the monies, the funds and the China Exim Bank, which works like this:

The China Exim Bank is increasingly making use of a deal structure – known as the “Angola mode” or “resources for infrastructure” – whereby repayment of the loan for infrastructure development is made in terms of natural resources (for example, oil). While this approach is by no means novel or unique, and follows a long history of natural resource – based transactions in the oil industry – China has taken its implementation to a higher level. By providing preferred lines of credit to Chinese state-owned enterprises and foreign governments wishing to purchase Chinese made goods, the China Exim Bank supports the overseas expansion of Chinese firms in line with the country’s “Go Global” strategy, whose long-run goal is to increase the productivity and competitiveness of these enterprises vis-à-vis their global competitors. The arrangement is used for countries that cannot provide adequate financial guarantees to back their loan commitments and allows them to package natural resource exploitation and infrastructure development” (Institute of Developing Economies – Japan External Trade Organization (JETRO) – ‘China in Africa’ October 2009).

What Museveni is not saying is what the costs of the debt and the structure of the Chinese support to Uganda or anywhere else. It is like Museveni haven’t seen what has happened when Republics or Nations defaults or fail to pay on the debts. Since, the Chinese Banks or Funds are coming with strings, which isn’t always public. That’s why we have seen what has happened to Sri Lanka and Tonga, which both has to give up key infrastructure to be licensed. The same has been told to happen Zambia and there are already fear of what could happen to Entebbe International Airport.

President Museveni should consider all of this, as it is next generation that will cover the debt he has been accumulated during his reign. There will be more than the Toll Road on the Entebbe Express-way to secure revenue for the added debt. It is like Museveni isn’t concerned about this and the threshold for repayments are coming closer. Therefore, at one point or another… if there is lacking domestic revenue… the Chinese companies or China can cease or capture collateral.

So, Museveni is right… China could become a problem. Especially, for all the nations who has eaten loans for the infrastructure projects in the Belt Road Initiative (BRI), which will pass the grace period and the debt of these has to be repaid. It wasn’t free money to build roads, buildings or rail-roads. No, it was an investment, which the Chinese plans to get profits out of. They didn’t give away this money. The first loaned the money, got a Chinese developer and Chinese Engineering company to build it and now later the debtor has to repay it with interests.

That is the brutal truth… I am not saying the loans are a problem, but they could easily become it. Especially, if the debtor doesn’t pay on time or in a fashion, which the creditor accepts. If they defaults or fails to repay. This gives the creditor leverage and possible freedoms or liberties to ensure collateral. Therefore, it could easily become a huge problem…

Museveni should also study how this happened to others. As sooner or later, this could happen in Uganda or anywhere else in Africa. The Chinese is right in doing this. The debtors signed the agreements and the stipulations on the loans are giving it legal binding rights to get it repaid. That is why … they might not use colonial techniques to get resources, ownership or have influence. They just borrowed money and with that has the upper-hand of their poorer states. It is a wise move, because the Chinese knows greed is an easy way of corrupting minds and get them into the fold. The same ways happens here. They don’t come with guns or war, but they are financially binding, which can easily be triggered.

In this instance, Museveni is partly outsmarted. Both are getting their interests nurtured, but at one point he could easily get into real trouble. It would be a huge problem and the state has to find currency or liquidity to actually cough up funds to pay on old loans. This is on the horizon and evidently, people are speaking to soft-heartedly about it. Peace.

26 Years and Counting: Gen. David Sejusa still isn’t allowed retire from the army

This General has caused a lot stir over the years. He has clearly been a resound opposition during the years of 2013, as he revealed the “Project Muhoozi” and the plan of ushering the first son as the successor of the President. He went a year away in Exile and formed a political party Freedom and Unity Front (FUF), which he used as a vehicle in exile.

Gen. David Sejusa aka Tinyefuza aka Tinye have a huge standing in the Uganda People’s Defence Force (UPDF) as he served as army commander and also a member of High Command UPDF, the UPDF defense council and a member of parliament representing the Uganda People’s Defence Force.

Reported about his first retirement request:

On December 3, 1996, Sejusa who was then a presidential aisor on Defence and Internal Affairs, wrote to President Museveni as commander in chief, resigning from the UPDF. “With great difficulty, I have decided to resign as a member of the Uganda People’s Defence Forces…There are several reasons but most important among those is that I feel I am unjustly being harassed over my testimony before that Parliamentary Committee…To require me to appear before the High Command so that action is taken against me is rather too high handed,” Sejusa wrote” (The Observer – ‘Retirement – Will Sejusa Have His Way This Time?’ 03.01.2015).

Reported about his second retirement request:

Once again, it all depends on the wish of President Museveni as commander in chief. Dr Busingye Kabumba, a constitutional law lecturer at Makerere University, said in a Monday interview that legally speaking Sejusa can succeed in his quest to retire. “Gen Sejusa enjoys the right to retire or resign for as long as he follows the established procedure. But the grant of his wish is a matter that is dependent on the political reality of the time,” Kabumba said” (The Observer – ‘Retirement – Will Sejusa Have His Way This Time?’ 03.01.2015).

He has blocked his request again in 2022:

The judges explained that the approval of the application to resign can be withheld on reasonable grounds and that the effect of not communicating the approval or disapproval of the application meant that Gen Sejusa continued to be a serving army officer. “ln practical terms, he remained the serving officer of the UPDF after the statutory 90 days and this amounted in practicaI effect, for the intervening period before he receives his or her approval or refusal of the approval, a refusal.” The Court of Appeal consequently overturned the judgment by Justice Margaret Oumo Oguli that had indicated the Gen Sejusa had been retired from the army” (Kenneth Kazibwe – ‘Government wins case to have Gen Sejusa back in army’ 14.02.2022).

The NRA Commander and insider within the National Resistance Movement who fell out with the President. Is clearly not allowed or blocked from civilian life. As he has lost his privileges in Parliament and within the UPDF. However, his still a soldier in their eyes. While Gen. Sejusa haven’t been involved or worked within the national army for years.

We know the fallout was already in 2013 and that’s 9 years ago. The General is close to 10 years in defiance of the President. The President did promise his retirement in 2019 but the Courts have clearly not allowed it. Therefore, the General is still part of UPDF to this day.

Just imagine when the Party and the Government can do this to its own. A man who was a commander and a resolute soldier in their liberation war. When they can retaliate and act this way towards him. Yes, his been an insider and has vast knowledge of how the NRA, UPDF and NRM operated. As he was a trusted army commander and he did excel in his role. However, his still a person who has his rights and is justified to retire.

The reason for not doing is, as simple as if he speaks or utter words of defiance he can be challenged in Court Martial and be seen as treasonous. It would like his mutineer and going against the army, which he happens to represent. Even if he hasn’t been in command or held an office within it for years. That’s the only reason for this quagmire and lack of results.

It’s tragic, but it’s like the saying:

Keep your friends close and your enemies even closer”. That’s evident here and it’s all in the open for the whole word to digest. Peace.

Civil Society Coalition on Oil and Gas (CSCO) – Civil Society Statement on the Announcement of the Final Investment decision for Uganda’s Oil and Gas Sector (07.02.2022)

Opinion: The Budget for the FY 2022/23 lacks 2,6 Trillion shillings!

We know that the state during the recent years have been running on deficit financing. This means it takes up loans to pay up for new loans to pay recurring expenditures. The state follows up this negative spiral of lacking of funds to ask for more expenditure than it has funding for. This means, the state is fiscally indisciplined and misusing funds, as they have to later find sources of revenue or take up more loans to fulfil the voted expenditure it has.

That isn’t a sign of a growing economy, but a way to further more loans and add more debt, which has to be paid back with interests in the coming years. As the parts of the government budgets are becoming more expensive, as the state has to fulfil and repay on the debts it has already taken out over the years.

The Minority Report states this:
“The government contradicted itself when it indicated that there would be limited supplementary budgets in FY2022/23 but at the same time elaborately articulate unfunded priorities or additional expenditure needs of UGX 2.62 trillion. Unfortunately, the majority report is silent on this fiscal indiscipline. The indiscipline of supplementary budgets is bound to continue and government hos sent indications that a minimum of UGX 2.62 trillion will be sought in due course” (A MINORITY REPORT ON THE NATIONAL BUDGET FRAMEWORK PAPER FOR FY 2022/23 -2025/26, January 2022).

This here should create headlines, because this is planning to take out loans to cover the current debt, which this will be. Since the state needs borrow or take up loans to cover these expenses. This just show how reckless the state is carrying it’s budgets.

As it can create 2.6 trillion shillings without having any sort of funds or revenue to ensure it. Which means someone else has to foot the bills currently. A creditor will take the debt and make sure the state can pay for the expenses. However, the future citizens has to repay for this and that is fiscal indiscipline and deficit financing. As the deficit needs financing and the shortfall has to be covered, which tends to be covered by debt.

This is unserious of the government and a sign of worry. As they are doing this on the first budget for the financial year and we can know additional supplementary budgets will most likely become bigger than two trillion shillings. We should expect more and the shortfalls might become worse, as all revenue isn’t recovered or the estimated tax-base isn’t as huge as earlier estimates and therefore the state couldn’t perform or have fresh funds to pay for the reoccurring expenses. Peace.

His Excellency is advising his own advisors [and sadly this is not satire]

Earlier in the year of 2021 after the General Election I calculated that the President has about 130 Presidential Advisors. This means the National Resistance Movement Chairman and Commander-in-Chief Yoweri Tiburhwa Kaguta Museveni has close to 140 of them.

We know this office and position in government is to keep them on his payroll and be loyal to him. They are not there to enhance the government or policies in general. If that is said, it is a lie, because no Presidential Advisor have ever made a legislation or something to vote over at the Parliament. Unless, a Presidential Decree or Directive have been written by them and suddenly the President has signed off from.

President Yoweri Museveni last week lectured his advisors on their role in national development and transformation, tasking them to have patriotism for the country while executing their duties. The President was speaking during a workshop for his advisors at the National Leadership Institute (NALI) in Kyankwanzi” (Chrispus Mugisha – ‘President Museveni advises his advisors on the need for patriotism’ 20.12.2021, Nile Post).

We should be worry about the state and the State House when they are wasting government funds on this. Having lectures or a work-shop for his Presidential Advisors. They are just there to listen to him to become patriotic. Their patriotic spirit is to be loyal to be President.

That is the lesson here. They were gathered to listen and follow his guidance. That’s all there is to it and it’s tragic. Just imagine these are on his payroll … gets allowances and vehicles. The state are even covering offices, which they are renting to them. Therefore, it is just a bit too much…

We haven’t seen any sort of help with these Presidential Advisors. They are just cronies and a large part of patronage, which is helpful for the President. However, it is not helpful for the costs or the expenditure of the state. Therefore, this is just wastage to keep people in line and loyal to him.

Just think about it… these folks are not doing anything, but still on the State House payroll. They are not delivering anything and their duties is just to prop-up the Presidency. We have seen this all before and it’s not changing today.

The President cannot act like this any different. It just another day for the NRM and the President. His trying to make seem like it is a game-changer. When everyone knows the deal and why they are there. Peace.

Chinese Embassy in Uganda: Remarks by the Spokesperson of the Chinese Embassy in Uganda on Some Media Reports Alleging that “Uganda Surrenders Airport for China Cash” (28.11.2021)

Opinion: Financial distress and defaulting on loans causes the state to loose Entebbe International Airport

China is most likely to take over Uganda’s Entebbe International Airport for default on debt repayment. More of Uganda’s national assets are at stake of seizure because of the unrealistic and endless borrowing which has mountained public debt to UGX65 trillion” (Kingdom Media Uganda, 25.11.2021).

The Deficit Financing can only take you so far. The bloated and crony capitalism can only keep you going so far. There been years upon years with loans for all sort of development projects and infrastructure upgrades in general. The loans have gone to buildings, roads and the only international airport in the Republic.

The National Resistance Movement and President Yoweri Kaguta Museveni have over the years promised they have a threshold and control of the amount of debt. However, in 2021 after a downturn and lack of generating revenue. The state is defaulting on it’s loans. The state has taken out loans it cannot carry. Loans are not only the loan, but the services for it too. The loans are with interests and with additional fees, which was accepted on taking the loans. These loans are now maturing and the grace period of not paying interests etc.

The Ministry of Finance, Planning and Economic Development (MoFPED) have promised they can service it and has it under control. They have said it would be used properly and well-spent funds. Nevertheless, the loans are clearly piling up and the state doesn’t have the revenue to pay them. They have recycled to many bad-loans and now they comes to haunt the Republic.

The state is paying for ghosts, huge patronage and a local government structure that is dilapidated from the get-go. Since, the state has such excess of expenditure, but they have to keep that to breathe life into the regime. This is why the state has to spend and use funds like a drunk sailors in port. Just awaiting to be robbed by a bystander or waste a salary at a gentleman’s club. However, this is a serious government and not a drunk lonely man who has been at sea for months on end.

It is tragic, but there been warnings. The Sri Lankan debt to China and what happened there should have been a “red flag”. What happened in Zambia as well should be another story of which the Ugandan government should have reacted too. However, that is clearly asking to much, as kickbacks, graft and grand corruption is part of the diet at the Entebbe/Nakasero State House. They are just eating and doesn’t care about the ramifications of it. Since, the cattle in Rwakitura farm is better taken care off, than how the budgets are financed. This is the sad reality of the Republic in 2021.

The amount of loans and debt will cause more distress. Why? Well, there is no future or ability to clear the debt without any proper revenue. The state needs to find new measures to get fiscal responsible. However, the state cannot just tax things and start to tax people for their every transaction. Because, with doing that… they are taking away money, which will generate more revenue and even more possibility to create new businesses. Yes, the state gets more taxes, but they are also creating a wormhole where there is no option to generate any real income. Since, if you have any transactions, the percentages of money is siphoned by the state and instead of getting invested to make new markets.

Therefore, the state is forced to change the way it operates. However, by doing so… the NRM and Museveni will have to drop cronies. That is something it cannot afford, because they are to eat and not to make the Republic better. This state cannot sustain itself …. and it’s own fault that it defaults on loans. Nevertheless, the citizens and the taxpayers are the first to be hit by this. Not the ones who has issued or taken out the loans over the years. They are the ones that has to fix it or for generations pay the Chinese for ordinary services. Because, the current regime wants SUVs and envelopes to cover for funerals or pay for medical tourism. Peace.

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