China-Uganda relationship benefits the Chinese, BoU Paper states!

This should not surprise you, that the Chinese government and their subsidiary businesses are making sure they are gets the best deal with the Ugandan counterparts. The Bank of Uganda policy paper are spelling out the advantages for the Chinese in the bilateral and the state-to-state offerings given to the Ugandans. They are clearly getting infrastructure loans and plyaing minor rolse in GVCs, therefore, the Ugandans are people loaning for infrastructure and then repaying, while the Chinese contractors and Chinese labor are working on the indebted projects. Just take a look, it is not a positive read!

“It should be emphasised, however, that for Uganda to leverage the shifting growth dynamics in China (such as a shrinking labour force, rising wages and an appreciated Renminbi), it must create a conducive investment climate. Low wages and a competitive exchange rate alone will not make much difference without reliable power and transport links, or in the face of suffocating bureaucracy and corruption” (Bank of Uganda, P: 6, 2017).

“With the migration of labour-intensive manufacturing shifting from China and an improvement in investment climate, Uganda also stands to expand its involvement in global trade, including Global Value Chains (GVCs). Historically, countries like Uganda have played a relatively minor role in GVCs. Figure 5 below, which illustrates a useful measure of Uganda’s integration in GVCs, relative to other sub-Saharan countries, indicates that Uganda is below the average value-chain position for developing countries” (Bank of Uganda, P: 6, 2017).

“It must be pointed out that while China has emerged as a significant financer of infrastructure projects in Africa, it still lags behind both private investment and the more traditional sources of funding. Recent research actually reveals that, over the past few years, China has contributed about only one-sixth of the US$30 billion Africa receives annually as external finance for infrastructure” (…) “Moreover, most of this financing to the transport and energy sector takes the form of state-to-state, non-concessional deals and comes from the Export-Import Bank of China (China Exim Bank). Examples of the major state-to-state deals signed with China Exim Bank in Uganda include: US$1.4 billion and US$483 million for Karuma and Isimba hydropower dams as well as US$350 million for the construction of the Kampala-Entebbe express highway” (Bank of Uganda, P: 7-8, 2017).

“For Uganda, which has so far committed up to US$ 2.3 billion in contracts with China Exim bank and is soon to take on more debt for projects like the Standard Gauge Railway, debt sustainability is a growing issue of concern; underscored by the fact that the country faces a low tax-to-GDP ratio relative to its regional peers and significant public investment challenges. Uganda’s debt as a percentage of revenues has risen by 54% since 2012 and is expected to exceed 250% by 2018, raising calls for caution and improved public investment management from various policy circles including the IMF, World Bank and Moody’s, which downgraded Uganda’s long-term bond rating in 2016 citing deteriorating debt affordability” (Bank of Uganda, P: 10, 2017).

This here report shows both the possible troubles with the debt, that already are problem with current budget, but will become bigger. Secondly, that the relationship and bilateral business agreements with China, will only benefit China and not Uganda. As they might get the infrastructure projects, but they have to repay the debt and also use funds on labor from the Chinese contractors and businesses. They are not hiring and educating locals to work these sorts, because Chinese are getting their own hired.

This here is not bringing positive results, but instead are being a nice debt collector for China and will be indebted to them. While the Ugandans gets scarps from the Chinese, as the infrastructure projects like the Dam they have bought on debt, has been said is “shoddy” work. That proves the Chinese gets easy money, get expat workers and later returns on every single Yen. Peace.

Reference:

Dollar, David; Mugyenyi, Akura & Ntungire, Nicole – ‘How can Uganda benefit from China’s economic rise?’ (August 2017) – International Growth Centre Uganda & Bank of Uganda

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Kenya: Monetary Policy Committee Meeting (29.05.2017)

Kenya: Monetary Policy Committee Meeting (27.03.2017)

Kenya: CBK claims the Business Daily has a reckless headline concerning their Chairman Njoroge salary (09.12.2016)

Here is the documentation that the Business Daily took their information from:

Was it reckless writing about this? Need more than statement for this activity, CBK!

 

Uganda: MP Ruhunda – Name the Powerful Officials implicated in Snatching Compensations Money (Audio)

Kenya: First Community Bank – “Business Re-Alignment” (04.11.2016)

Ugandan finances are struggling and the evidence of the recent acts are showing it…

“We are struggling, the situation is not as easy, but we are not desperate and the situation is under control. For us [government] we are ready to listen and to learn” (…) “The economy is not receding, the disposable income for drinking may not be there but we are not in recession” (…) “To avoid having arrears, we have to budget appropriately and the money budgeted for has to be absorbed” said Finance Minister Matia Kasajja earlier today (Oketch, 2016).

Nakumatt Holdings is apparently struggling as evident today of their Corporate Statement, that they have to even state it to the Nation, even after the takeover of Shoprite Supermarket Limited; they are still not financial stable. This news is coming days after the Crane Bank got into Administration by the Bank of Uganda (BoU). That after the bank tried to subdue the public together with the BoU in September, telling that the Bank we’re not looking for new owners. This is happening while the troubling times for Cairo International Bank and United Bank of Africa (UBA) Uganda… this is known as the Prof. Emmanuel Tumusiime-Mutebile of BoU said they we’re under notice.

Just as this is known in March 2016 the Exim Bank Uganda, that is a subsidiary of the Exim Bank of Tanzania. That bank took over Imperial Bank of Uganda and also Imperial Bank of Kenya. This is banks licenced by the BoU.  So there have already been issues for the banks in Uganda, just more silent movement as the Investors of Exim Bank wanted it to die down.

Cancelled funding from Exim Bank:     

“The major funder of Karuma and Isimba dams has withheld money for the country’s two biggest hydro-power projects until the legal disputes in Ugandan courts about the two ventures are resolved. The Export-Import Bank of China has written to Uganda’s Ministry of Finance, asking the Secretary to the Treasury, Mr Keith Muhakanizi, to explain why the ministry submitted to them documents of due diligence on the two dams and confirming the tendering process had been properly concluded yet the power projects are now a subject of litigation in court” (…) “Mr Muhakanizi was in State House yesterday for a meeting with President Museveni, but after consulting him, Ministry of finance spokesperson Jim Mugunga said: “It is true that the Export Import Bank of China like any other responsible party, expressed concern about the court case by a concerned Ugandan citizen which listed the bank among defendants. The Government of Uganda, through the Attorney General, secured a court order dismissing the case against the Exim Bank. The bank, therefore, is no longer party to the suit and the PSST Mr Keith Muhakanizi this week communicated the same to the bank.” (…) “Mr YuMeng expressed concerns that the outcome of the case in question would affect the commercial contracts related to Karuma Hydropower Dam and Associated Transmission Lines Works and Sub Stations Project, the 183MW Isimba Hydropower Project and the Isimba-Bujagali Interconnection project under Preferential Buyer Credit facility” (Mugerwa, 2016).

This is new that the Exim Bank is answering with postponing the building of the dam. Something that is the Markie and big Infrastructure projects that the Movement needs to shine a light into the dim situation of the Government. Certainly this answer from them could not be anticipated by President Museveni and his friend in the State House.

This is not the first blow this year as Uganda National Roads Authority (UNRA) has been under fire all year ever since first response from World Bank on the 8^th January 2016:

“Following the cancellation on December 21, 2015 of the World Bank-supported Uganda Transport Sector Development Project, overseen by the Uganda National Roads Authority (UNRA), the World Bank has suspended the disbursement of funds for civil works in two other projects in Uganda. Those projects, overseen by the UNRA, are the North Eastern Road-Corridor Asset Management Project and the Albertine Region Sustainable Development Project which are suspended pending a review and strengthening of the capacity of UNRA to adhere to the required  environmental and social standards” (World Bank, 08.01.2016).

If you though it wasn’t demeaning enough the World Bank continued later in the year with this statement: “UGANDA, September 13, 2016 –The World Bank Group took a decision to withhold new lending to Uganda effective August 22, 2016 while reviewing the country’s portfolio in consultation with the Government of Uganda.  We continue to actively work with the Ugandan authorities to address the outstanding performance issues in the portfolio, including delays in project effectiveness, weaknesses in safeguards monitoring and enforcement, and low disbursement” (World Bank, 13.09.2016).

This is now evident that they used all the months from December 2015 to September 2016, that means the suspended funds for the projects been delayed for 10 months already, which is a close to year. Certainly that must hurt the UNRA and Government of Uganda really, really hard. The World Bank has because of this made the UNRA change how their work, as the Director and staff has sacked at a point. Now in October the agreement made between UNRA on behalf of GoU has been looked over and seen that some has been fraudulent and not made with due-diligence.

And your know there is issues in the finance market when even the states own National Social Security Fund (NSSF) have to explain where they invests their funds after social media spreads rumours of buying a mall in Nigeria and borrowing heavy funds from the Banking Sector of Uganda. This is happening as there 3 banks under fire and struggling already and if you forgotten they are Crane, Cairo International and United Bank of Africa. So the citizens and costumers of Uganda are already worried, they have been there before with the Greenland Bank and other who has lost confidence and gotten into receivership.

Yesterday even the IMF has answered the financial issues of the republic under the Movement:

“The mission notes the difficult environment for fiscal policy in FY15/16. While revenue collection increased as a share of GDP, it fell short of program expectations, reflecting lower than projected nominal GDP growth. At the same time, current spending was higher than anticipated. Taken together, the overall deficit target was missed by 0.4 percent of GDP, and the government partly relied on BoU advances for its financing needs. The execution of externally financed projects lagged behind target” (…) “the financial sector remains well capitalized, though non-performing loans have edged up. This has prompted a tightening of lending standards and a slowdown in credit to the private sector. The third largest domestic bank had become undercapitalized, and the BoU appropriately took over its management to protect deposits and safeguard financial sector stability. As a next step, the financial position of the bank needs to be established, and BoU will look for a strategic investor” (IMF, 2016).

If you see all of this and wonder how can this be, that one government has all of this just months after a General Election, than you know something isn’t as it supposed to be. The Government of Uganda are not running a steady ship when a bank is trailing, 3^rd biggest commercial in the nation by 19^th October into Administration, Cairo and UBA under the watch-list of the BoU; World Bank suspending loans for the Infrastructure Projects that is needed. While the BoU are fixing some financial stability it is not helped by the giving ways of the President Museveni and his dropping funds like a Walking ATM.

“Prof Joe Oloka Onyango said every crisis in this country is being solved by way of brown envelopes, a scenario he described as being sad and far below the rule of law in the country” (…) “In early 1980s, when this country was under the leadership of Godfrey Binaisa Lukongwa, State House was like a market place. Today, State House has been converted into an ATM,” he said amid cheers” (Wesaka & Adengo, 2016).

So for the once that do forget, the ATM Museveni is the cause of the issues that are now; this is his fiscal responsibility and Monetary Policies that made this happen. This is the reactions to the overdue and overspending of the Presidential Campaigns. These reactions should also lead to higher Inflations that it has done before after the elections. Therefore the Finance Minister Kasajja and Executive director Tumusiime-Mutebile have made some progress from previous elections in the Republic. Though the aftermath is now vivid for the citizens who are costumers at Cairo, UBA and Crane… there visible proof and the evidence are in the reaction of the Campaigning as the fraudulent and maladministration of the Banking Sector. This comes into mind as the State House had this message after February:

“As parliament’s budget committee tussled with an avalanche of supplementary budget requests late last week, which totalled Shs 1.04 trillion, some officials confessed that they emptied their initial budget allocations in order to sustain President Museveni’s campaign expenditure. State House comptroller, Lucy Nakyobe, whose office tabled a supplementary budget request of Shs 49.7 billion, told the parliamentary budget committee on April 1 that her coffers were depleted by the so many inland travels of President Museveni, who addressed four campaign rallies daily on average for the campaign period” (Namuloki & Oluka, 2016).

So the debt has to repay and taken from somewhere as the Central-Government, Banks and Multi-National Organizations are stepping off from the Ugandan Government, the Movement are running in circles taking care of their own while the citizens is now trailing and falling off. That is why businesses are giving in.

Just as people might have forgotten the paying of businesses connected to the family and General Salim Selah: “Prominent businesses in the country might soon run out of business if a decision that could see the use of Shs1.3 trillion taxpayers’ money to bailout companies in distress is not taken in their favour” (…) “Talking to Daily Monitor on condition of anonymity, a source privy to the talks revealed that “there is concern that bailing out companies without correcting the economic situation in the country will not resolve the problem.” (…) “The economy is not growing fast enough to generate activity for these companies to perform at full capacity. A bailout will not deal with the core problem. That is the argument being fronted by several government technocrats against the bailout,” the source said” (Muhumuza & Adengo, 2016).

So with this in mind, there are some sound imbalance about the bailouts months before one of the great banks put into Administration, NSSF has to answer for Social Media outbursts, two more Banks on a stroll, State House being broke months ago, UNRA projects suspended by the World Bank, IMF are seeing that infrastructure projects are lagging behind, Exim Bank suspended pay to the two dam projects and the strange bailout. There are too many evidence of lacking financial sound practises…  Even Nakumatt the Supermarket are having troubles. There just more pawns on the set ready to move, but how they fall only the kings knows; because the Kings stay King. Peace.

Reference:

IMF Communication Department – ‘IMF Staff Concludes Review Mission to Uganda’ (26.10.2016) link: http://www.imf.org/en/News/Articles/2016/10/26/PR16462-Uganda-IMF-Staff-Completes-Review-Mission

Mugerwa, Yasiin – ‘Chinese bank holds back Karuma funds’ (27.10.2016) link: http://www.monitor.co.ug/News/National/Chinese-bank-holds-back-Karuma-funds/688334-3431376-qxr194/index.html

Muhumuza, Keith & Adengo, Jonathan – ‘FULL LIST: 65 loan-stressed firms line up for Shs1 trillion taxpayer bailout’ (22.07.2016) link: http://www.monitor.co.ug/Business/65-loan-stressed-firms-line-up-for-Shs1-trillion-tax/688322-3305166-d6h193/index.html

Namuloki, Josephine & Oluka, Benon Herbert – ‘State House broke after spending on Museveni campaign’ (09.04.2016) link: http://www.observer.ug/news-headlines/43556-state-house-broke-after-spending-on-museveni-campaign

Oketch, Martin Luther – ‘Economy is struggling – Minister Kasaija’ (27.10.2016) link: http://www.monitor.co.ug/News/National/Economy-is-struggling—Minister-Kasaija/688334-3432534-t8dv3c/index.html

Wesaka, Anthony & Adengo, Jonathan – ‘State House turning into ATM, says Mak don’ (11.10.2016) Link: http://www.monitor.co.ug/News/National/State-House—ATM–Mak-don-/688334-3411968-1155d8t/index.html

Opinion: Who is really the “Empty Suit”? Who might it be the Empty Suit in the Ministry of Health Care or KCCA? As the recent unfolded operations of maladministration in the public view… henceforth somebody who is just nodding to the Executive for the brown envelope.

McNULTY: “West Baltimore is dying and you empty suits are running around to pin some politician’s pelt to the wall. Thought you was real police, brother” (The Wire Season 2, Episode 13).

There is in this day and age lots of appointed government officials, they work supposed to be diligent and with honour of the codes of their work, not work directly for the ones that appointed them. That cannot always be easy as the station and the position would not been opened or given to the person if the appointee didn’t give that extended hand or blessing for the job. When you have that situation you need a strong state and strict regulatory regime that counter the possible backhand and kickbacks to the ones that appointed them.

Why do I discuss this at this point? Because it is a vital part of our government regimes and is a question that can be asked in nearly all parts of the globe. As all jobs in the branches of government does not automatically goes to the most educated, relied on or the one person who has the most integrity in the position. Instead the man or woman who gets appointed is an “empty suit”.

What some of them might do?

“What typically saves the empty suit is the tenuous relation between what he or she does and any actual business results. This may be a function of the job he’s in: a staff post, with lots of power to nix others’ initiatives but no responsibility to make or sell anything. Or a pocket of avoirdupois in a still-too-fat corporate bureaucracy, the kind of position that causes underlings to scratch their heads and wonder, ”Gee, do we really need all these vice presidents?” Or the empty suit may have come up through a system that rotates fast- trackers through a new job every 18 months, even though the effects of his tenure don’t become evident for two to three years. He hardly had time to get any grounding in the work his people do, and he may have royally screwed up the few decisions he was compelled to make, but when the chickens come home to roost, he has flown. If somebody has the bad taste to try to assign responsibility, the suit can easily fuzz the matter over by suggesting that the blame rests with his successor or former subordinates” (Kiechel, 1989).

There certainly similar like the ones described in our time in every department, every corporation and every single institution we know of. This might be the Electoral Commission of Uganda and the Independent Electoral and Boundaries Commission of Kenya. As much as the regulatory chairs of the banking industry of Kenya must feel like empty suits these days as the confidence at that is low-key as well. The Chase Bank, The Imperial Bank and National Bank of Kenya have fallen from grace. The most likely selling of the Barclays Bank African Group might also make the fragile banking sector into more disarray as the leading regulators seems like the extra board-members instead of people who uses their position and chair with care and uses the mandate to make a difference and even square.

The situations are different when the appointed is not hired for their knowledge of their field, but the loyalty of the regime or government that is running in the country. The likes of Ministry of Health in Uganda for the moment where the hospitals are creaking and the machines are criss-crossing between life and death. Electricity and other cases of depleted. As the missing extra blood for surgery, the copy-medication and the loss of necessary equipment; that shows the lack of management and reasons for empty suits. The highest empty suit for the moment must be State Minister for Health Hon. Dr. Chris Baryomunsi who seems to be more concern with catching checks then doing his job at this point. This point comes with the correlation of Minster of Health Hon. Elioda Tumwesige and the State Minister for Primary Health Hon. Sarah Opendi Ochieng. One of the three must generate a valued pay-check and makes sure that the NMS delivers the Global Funded projects and the other government funded health care, but either Chris, Elioda or Sarah, one of them or more must be a hired “empty suit” as the three of them are put into ministerial position working for initially the same thing.

It is just like the same mess with the KCCA where you have KCCA Executive Director of Jennifer Musisi. You have Frank Tumbewaze who is both Minister of the Presidency and Kampala Affairs. Then you have the third person who got a mandate the Presidential Advisor for Kampala affairs Mr. Singh Katongole what he does is surely only him and the Executive of Uganda who knows, since his appointment in December 2015 his silence must mean a envelope and letting Hon. Tumbewaze and Hon. Musisi does what they like. To make it more hectic you have the actual people’s elected through the ballot who supposed to run the Kampala Capital City Lord Mayor Erias Lukwago. So you have hon. Musisi, Hon. Tumbewazi, Hon. Katongole and Lord Mayor Lukwago. All of them are supposed to central people in the running of administration and regulate the divisions of Kampala politically and create policies that builds and secure the functions of KCCA. That must be hectic one of these men and woman must be a empty suit. Unless Hon. Katongole who I haven’t heard a word from since appointment is an ear-to-the ground and talking or addressing letters directly to the Executive or Head of State as his role has still not been served. As the accountability of the NRM-Regime is not strong they prefer keeping people in the dark.  Hon. Tumbewaze seems more to be the ones who was appointed to turn opposition Lord Mayor on his knees and therefore also gotten a permanent Executive Director in Musisi to shut down the elected person. But the end-game is that one of them must be an “Empty Suit” as the basic needs cannot be that big, and one of them is catching the brown envelopes without doing anything.

There are certainly more empty suits in the system as I started with the appointed men who is not educated for the position, but are there for the loyalty not because of the office is needed or there for a general purpose. That is the same as extra board-members in a corporation who is hired to vote for the general consensus in the board, but not to generate profits in some sense. They are there because the Corporation and LLC need useful idiots to be paid to follow the remarks of the stakeholders and shareholders, not the common-sense of their position.

We can all question the value of these leaders and honourable men-or-woman in a representative or appointed position by the President for instance. The level of credible men and woman and the need for expertise in the government organisations, into the department and the civic care from the road-development to the health care facilities need men and woman who knows the trade. As long the men does what is needed for the President or for the Stakeholders. The ones that lose are the ordinary person, employee or civil servants as they will either work under them or have to pay them tax-money to keep them. As they have to be paid an envelope to be the empty-dress. The person who is an empty dress doesn’t become that for free. Somebody has to be charge to keep him there. Most likely it is me or you. We can just ask ourselves. Who of the appointed leaders in government is an empty suit? Who in the corporate world are the extras?

Lastly, why does the Minister Without Portfolio. Hon. Abraham Byandala gets away and is not questioned by the opposition or anybody else. Why is this man the free-man the invisible creature in the parliament that does not have scruples? This since this position is the epitome of a Empty Suit. He is a MINISTER, but does not have an OFFICE, Department or a MINISTRY to run. Hon. Byandala can do as he pleases and still get paid. You cannot check his ministry or running government portfolio as it is non-existence from the get-go. The Government Official without any oversight and anything to initial control or say in other words the official Minister of Nothing (MoN). Hon. Byandala is running the Ministry of Nothing. The Minister of Hot-Air and the checking the chapattis’ in parliament is fresh enough for Hon. Oulanyah’s taste.

Well, what do you think? Are the somebody you feels are an Empty suit? Somebody you question or wonder if really have anything more than pay-check from the Tax-Payers money, but does not use it’s office or even delivers anything. Then that person might be an empty suit who just nods the head to the Executive and the general leadership without exercising power or determine the future of the government institution, department or ministry. Even if the person is really doing anything in the boardroom or a needed voter for the stakeholders; if it is only the needed majority to follow procedure then the scheme need a check or reform.

There will certainly be more stories and the existence of similar men and woman who can be described as “Empty Suits” and be stooges needed by any administration and corporations as they viciously need structure to control the citizens and the policies without questions from the inner-circle. Even if that means not procurement of needed medicines, fuel, transformers or building bridges to easier access the missing Okor Bridge in Kumi District: “This project was intended to connect Nyero and Mukongoro sub-counties in Kumi district” (MoFED, March 2015). A bridge that does not exist or is built by now so the sub-counties is not yet connect because of the altered situation and have to run long roads around the area than crossing straight over the river. So a project like this says there some empty suits as in 2009 as company was hired to build the river, by December 2012 the works by the river had stopped. Even if the departments to UNRA gave reports of progress of the project was last monitored in 2014 and by 2016 there not been done more to build the bridge since the monopoly of the Chinese Contractor have stifled the progression and in the end wasted government funds into a building a bridge who does not exist. Just like the Ministry of Nothing Hon. Byandala.

Think that is enough for today! Peace.

Reference:

Kiechel, Walter – ‘HOW TO SPOT AN EMPTY SUIT This breed of modern manager looks good and gets along splendidly with the brass. But is he contributing anything?’ (20.11.1989) link: http://archive.fortune.com/magazines/fortune/fortune_archive/1989/11/20/72761/index.htm

Ministry of Finance, Planning and Economic Development – ‘NATIONAL BUDGET FRAMEWORK PAPER FY 2015/16’ (March 2015).

Bank collapses to trigger mergers in the industry in Kenya (Youtube-Clip)

“Stakeholders in Kenya’s banking industry say the sector may see a wave of mergers and acquisitions soon, after the liquidation of 1 bank, and the entry into receivership of 2 others, Chase Bank and Imperial Bank. For months now, some local depositors have been seeking safety in bigger institutions. The Central Bank Governor, Patrick Njoroge told journalists on Friday morning that the sector is now entering a new era, where governance and transparency will get a lot more attention. He also said the regulator will establish an unlimited liquidity facility to support distressed local banks, as Uche Okoronkwo, now reports” (CCTV Africa, 2016).

Press Release: Imperial Bank Limited (In Receivership) Kenya (31.03.2016)