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Archive for the tag “Inflation”

My letter to President Duterte: Let us have a conversation!

Dear Honorable Sir, President Rodrigo Roa Duterte!

The reason why I write you, is because your misconception. Let me first allow you and say to you. Your allowed to say anything between the moon, the stars and the deepest sea-bed of the kingdom I reside in. President Duterte you can call Norway by all names of the book, say anything you want about or Prime Minister, about our traditions and even our strict-rules foreign workers to get visa. Please, talk about it. I have no trouble with it. It is a good thing to be questioned and get criticism from afar, from someone looking in and questioning our possible misgivings. We have loads of mistakes and things that is not working in Norway. Therefore, please address if you may, especially if you ever come to visit here, when you might resume the peace-talks with the red-army in Mindanao. Please, talk about our ways and politics. Feel free, Mr. President!

Now, that I have allowed you to do that, let me look into one of your statements, that Rappler has reported today!

DAVAO CITY, Philippines – Critics are welcome to say all they want about his governance, but President Rodrigo Duterte said they have to make sure they’re not foreigners in his country. “Every Filipino is entitled to criticize me as a matter of right. Okay sa akin ‘yan (That is fine with me), but certainly not a foreigner, however holy you are. I will not allow [you] to do it in my country,” Duterte said in his speech on Saturday, July 7, at the inauguration of Malayan Colleges Mindanao in Davao City. He added, “After all, we’re not supposed to do it in your country.“” (Basa, 2018)

I don’t why your so bitter, so sour, and don’t know if foreigners ever hurt your pride and your vision. I understand that your battling belittling aid and donor loans, that trigger the Republic and the ways it has maneuver to get the grants and donations, where your state would be monitored and muffled with to get donations from abroad. That I get and that is more damaging, than even development. Where the donations would belittle you and your administration. That I respect and understand. But this here, I don’t get.

Why can they not question the government and say something about it? Why can’t I? I know I am not a citizen of the wonderful island republic of the Philippines. However, if there are misgivings, an outsider might have the balls to say it, while the insider might be afraid to lose the job or even not get hired again. Have you considered that? Did that cross your mind?

If a Filipino might address you wrong or even cross you badly, you might re-appoint someone else or even revoke their licenses? What about that then? You don’t have the same power over the foreign nationals inside the Republic. That also comes with the power of the state and the diplomatic disputes it might create. You got criticism for the sudden detention of the Australian Nun. That was to be expected, no matter she has done or what she hasn’t done. If she has broken the codes of entry or broken codes of law. It would be fine, but if she just was a vocal human being, then it is wrong.

So as I stated, President Duterte. Please say all the wrongs about Europe or Norway, as much as you please. Please call it out and call us ice-cold Vikings, who isn’t treating Filipino foreign workers well. Say it and than the diplomat’s can address it. We can carry it, but we hope you could extend the hand. Let people like me address you and understand why I do it.

It is healthy to have a conversation, to have people who looks with another view and with another perspective, than the narrative and the possible outcome might be better. The different views and the enriched discussion might lead to something fruitful and also give it another direction. Instead of being ignorant.

So, Please Mr. President do it in my country, if your ever has the chance, because it is healthy. We need conversations and perspectives to broaden our insights to life.

Best Regard

Writer of Minbane

Reference:

Basa, Mick – ‘Duterte says he welcomes criticism, but not from foreigners in PH’ (07.07.2018) link: https://www.rappler.com/nation/206730-duterte-criticism-foreigners-philippines?utm_campaign=Echobox&utm_medium=Social&utm_source=Twitter#Echobox=1530968818

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Maybe Duterte should be more fixated on the economy, and not insult God!

President Rodrigo Duterte has been under fire lately for his statements on the bible and the way the world was created in the holy scripture. He has also kissed a married South Korean lady on stage, while being on state visit in South Korea. So, there is never a dull moment in the life of Duterte. However, before be goes into to deep into the ignorance of faith and lack of understanding of gender equality from the President. Both deserves scrutiny. From I know, both has been discussed and also tarnished Duterte in Rappler and everywhere else. All of that is deserved. He should show respect to the faith and its origin, as well as other shows respect each other faith. Secondly, you should never misuse power to gain sexual advances, that is just wrong and should be condemned.

However, this piece is not about that, this is about how the man who has insulted bible and the other gender recently. Should be more careful with his words. When your discussing the stupidity of the bible. Maybe, should be more careful with throwing that around. That being said, he cannot be as wise, when all the economic signs of late is dire. There is nothing in the recent days and the collected effort that lights hope for the economic situation. These are all reports, that shows the signs of weaken state and also, needs of a serious boost. If they are planning to revive the Peso and the economy in general.

Philippine Statistic Authority on the 7th June 2018 states that from last year, the wholesale price of the well-milled rice has gone up by 6,63 %, the same commodity in the retailers has also risen in price, that has gone up 5,58 %. This is huge amount of money, when it is concerning the staple food, that most eats to every meal, every single day. That means the people are paying more for the same.

Heydarian writes on foreign investments in the Philippines: “During the first half of 2017, there was a 90% year-on-year drop in new investment pledges from $1.45 billion to $141 million. During Duterte’s first year in office, South Korean investments plunged by 93%, while American investment dropped by 70%. Meanwhile, the ranking of the Philippines in the global corruption index hit a five-year low in 2017. During the first quarter of 2018, new investment pledges dropped by 38% on a year-on year basis, reaching the lowest level since 2010” (Richard Heydarian – ‘More Duterte fallout on the Philippine economy’ 21.06.2018 link: https://asia.nikkei.com/Opinion/More-Duterte-fallout-on-the-Philippine-economy)

Xinhua states: “MANILA, June 19 (Xinhua) — The Philippines is planning to issue about 1 billion U.S. dollars worth of Samurai bonds this year, the country’s finance department said in a statement released in Manila on Tuesday” (…) “”This year, we are also planning to issue around 1 billion U.S. dollars worth of Samurai bonds,” Dominguez told Japanese businessmen. Dominguez did not give other details of the planned yen-denominated bond float in his speech, but he has said earlier that the government will proceed with it by September or October this year” (Xinhua – ‘Philippines plans to issue 1-bln-USD Samurai bond’ 19.06.2018, link: http://www.xinhuanet.com/english/2018-06/19/c_137265039.htm).

Bilyonaryo states this: “The peso has lost a big chunk or P3.29 over the last six months to 53.28 to $1 last week from 49.99 as of end-2017 making it the weakest currency in the region. Since Duterte’s entry in Malacanang, the peso has dropped 14 percent from 46.86 to $1” (Bilyonaryo – ‘PH peso is Asia’s worst performing currency; even Duterte admits economy in the ‘doldrums’’ 24.06.2018, link: http://bilyonaryo.com.ph/2018/06/24/ph-peso-is-asias-worst-performing-currency-even-duterte-admits-economy-in-the-doldrums/

There is a worry when the prices of rices goes up that, together with a weakened peso. Both are proving that imports of rice will be more expensive, and not only hit the consumers who needs to pay more for the same commodity. Combined with the losing interest of foreign investments, that short-fall is planned to be undermined by government bonds, which is state created short-term debt to cover the deficit created by the lack of investments. All of this is short-term efforts to cover the stop of funds from abroad. Adding more bonds, will also mature more of the previous bonds and add the collected debt of the Republic. This is not sound economics, but more punching more holes in the bag and hoping the rice doesn’t go out to fast.

The ones losing the citizens of Philippines who will pay for the economic progress or lack of thereof, with a weak currency, higher prices on staple food and also more state debt. That is why I want a President who creates all of that, to respect God a little bit more. Because he cannot be so wise, if he is in-charge of the rising prices of rice, devaluing the currency and adding more government debt. While doing so, scaring away foreign investors and trying to take out more debt to cover the shortfall. That is the only thing it looks like. When the government plans to add the same amount as they are losing in investments. This is a way of getting fresh funds and foreign currency into the market, but not generating more revenue directly.

Time for Duterte to get his focus straight, as KPMG states: “For example, even if government expenditures are below program, they will still be at magnitudes well above those in the past. Foreign grants help, but the country does not depend on them to grow today and those that it lost could be replaced with aid from other countries like China and Japan who are willing to give and are already doing so. At worst, these risks, if they occur, could bring GDP growth down to a still lofty six percent or so average in this decade. In summary, the Philippines will remain among the region’s fastest growing economies even if many of these risks were to occur and is on track towards significantly reducing poverty and strengthening the domestic market over the medium-term. The present leadership has smartly placed the stewardship of the country’s economy at the hands of well intentioned and bright managers bent on pursuing rational policies and carrying on from past successes” (IT Report: Philippines – 2018 Investment Guide by KPMG in the Philippines, P: 15, 2018).

So all hope aren’t lost, but the Philippines and the President should be aware of the policies put forward. They are risking the future, today as they are moving forward. The decisions made are vital and crucial for how the prices, inflation, growth and if the currency even will be worth something abroad. Even if some numbers are going up, all of them aren’t and some are more worrying. As the prices on food and others are rising to. So the growth is eaten up before it is felt, while the state isn’t acting within reason.

So please Duterte, look into the measures and into the economic landscape. Let the people of faith be and respect woman. Please start to look at some of the parts thta are not working. Find out the reasons why the Peso is weak, the rice more expensive and the foreign investors are not arriving. Government Bonds isn’t the solution, that is short-term fix, but not a steady economic policy, which would bring stability to the currency, rising inflation and the prices in general. Therefore, the value of the growth is lost in the deep dark hole of inflation, added prices and weak currency. Peace.

#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 is still not ready for IMF’s PCI!

“The Policy Coordination Instrument (PCI) is a non-financing tool open to all members of the International Monetary Fund (IMF). It enables them to signal commitment to reforms and catalyze financing from other sources. The establishment of the PCI is part of the Fund’s broader effort to strengthen the global financial safety net—a network of insurance and loan instruments that countries can draw on if confronted with a crisis.” (International Monetary Funds – ‘IMF Policy Coordination Instrument (PCI) 26.07.2017).

This here is really spelling out the missing dots in the budget and monetary policy wise, as the IMF has concluded a visit, but told that certain aspects are missing. Even explaining that the Republic have to be careful about borrowing money. As the Republic tend to do these days for all sorts of projects and building infrastructure all around the country. However, the IMF isn’t praising Uganda, the IMF is telling what it needs, if they want to be part of the PCI. That is important, because being part of that, then the state will have systems and ways to gain outside sources of funding and also safety mechanisms in the needs of rainy days. Therefore, following this program would be healthy for the economy, but will the National Resistance Movement and President Museveni comply to this? Would they?

“The authorities have made progress in setting economic policy objectives for FY18/19 and the medium-term. Fiscal policy seeks to keep public debt at a sustainable level which requires raising tax collection and prioritizing spending needs, while protecting key infrastructure projects and social expenditures. Monetary policy targets core inflation of 5 percent. Bank of Uganda aims to maintain international reserves at 4 to 4½ months of imports. Structural reforms would focus on revenue mobilization, public financial and investment management, reducing domestic arrears, enhancing financial sector stability and development, and putting in place the remaining elements of the framework for managing future oil revenues. The mission reached agreement on many key elements of a possible 3-year program under the Policy Coordination Instrument, but further progress in some areas is still needed. Once the FY18/19 budget has been approved as agreed, the mission could resume discussions” (International Monetary Funds – ‘International Monetary Fund (IMF) Staff Concludes Visit to Uganda’ 31.05.2018).

It isn’t the first time the IMF and World Bank says there policies and monetary programs needs changes, needs to be amended and fixed, so it is safer. This is something that always comes back. The NRM are clearly not listening or interested in listening. They are pre-occupied with the handshakes of the State House and the insider trading that they like to do. Not have accountability and transparency, because then all the tools of the shed is in the open. President Museveni doesn’t want his ghosts, his fake projects and his forged paperwork to be in the open. That would hurt his pride and also humiliate him. That is the reality of it all.

Therefore, the state has a long walk ahead still, even with the new revenue sources, as they are not considering the implications yet on the public. Just more revenue for revenues sake, but not how hard the new taxes really will have. They will hurt the public and the poorest the most. Nevertheless, they are not a concern for the state; they are more bargain chips for needed donor funds anyway.

President Museveni will not be interested in opening the books and showing the reality. We know that, therefore the PCI will not introduced shortly, neither will the accountability or transparency change either. It is not in his interest to revolutionize that. Then he would humiliate himself, which he only does to Opposition leaders, not to himself. Peace.

Opinion: Every crony wants to eat; now the Ex-MPs wants a grander treasury chest!

The National Resistance Movement (NRM) is something special and unique, their supposed vital role in society and their added liberation struggle, should in consideration make sure the society was better off after their reign, not being a burden after the NRM MPs leave office. However, they are just figuring out new ways to eat. Now the fallen MPs, the ones who served and had a majestic pay in Parliament want a bigger slice of the cake. Because getting 30 million shillings in pensions isn’t enough for this big-shots. They need more, they we’re representatives and honourable, they cannot go back to ordinary life after that.

The reports that they are poor and unemployed, shouldn’t make Museveni give them favors, he already have over 163 Presidential Advisors, a Cabinet reaching over 60 ministers and the space inside the Parliament isn’t big enough for everyone staying there at a Plenary Session. Therefore, this is just another waste. This is just more greed, from the previous Members of Parliament, who most of them at one point gave more salary increases and perks for themselves. Every single parliament of late has done so. They are getting suits, they are getting cars, they can spend allocated funds on foreign trips, they are paid for if they need health care abroad. Nothing is untouchable for these fellow brothers and sisters.

Now they expect to get a 100 million shillings add-on from the President, in way of a Presidential Handshake, paying them off, as you may, because of their previous engagement. Not that the ones now are getting the same, they we’re getting extra funds for voting on the age-limit and giving Museveni life-presidency. These people most likely we’re part of abolishing the term-limits and go their kick-backs for that.

That is why NRM is so special. So unique, so vibrant and fresh, it is the testament of greed. They we’re while in office, eating millions upon millions and getting kick-backs for voting correctly on the right laws. If they had been smart, they would have put the extra in the bank and in funds. To secure wealth for the years to come, if they cannot go into the private sector or get other jobs in their own districts. However, they we’re busy eating like there is no tomorrow. In addition, even when they have a giant pension package compared to the fellow citizen, they expect to nearly triple it. From 30 million shillings to 100 million shillings. That is insulting, to everyone else in the Republic who goes from hand to mouth.

They we’re supposed to represent the district, the people, the citizens, but their actions, time and time again. Shows, that they we’re only there to represent themselves and their tummy. It is a sad affair. It shows the greed and the lack of understanding of their role in society. Their lack of acceptance of their part of the play, which they anticipate to eat even more of the state. That has already doled dozens of millions on them, when they were representing.

Now they are just citizens, they are not honourable anymore, I am sure that the President can appoint enough advisors to have about 200 of them within next year. To fill the quota of former MPs. However, what they guide him about, expect being another crony on his payroll. Who knows, maybe they can all become deputy and chairpersons under the RDCs. So they get something to “do”. But that is still just a waste of public resources, just like giving them triple salaries. They shown now that they are not there for the public, but was there their tummy!

National Remittance Movement, that is the real NRM. Transmit funds from state reserves to private accounts. Handshakes, bribes, graft or overzealous pricing on government services. All of come into play and these former Members of Parliament knows that perfectly well. 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/

PTA Bank Loan Scandal: US$200m gone missing, you don’t loose that amount money, you spend it!

The government has announced plans to borrow US$200m from the Eastern and Southern African Trade and Development Bank (known as the PTA Bank)” (…) “It will, however, do little to ease the near-term pressures. The weak currency is pushing up the cost of external debt (the new PTA Bank loan will add to the burden of US dollar-denominated debt), while high interest rates are driving up yields on domestic securities. The government originally budgeted USh172bn to service external debt in the current 2015/16 fiscal year and USh4.8trn for domestic debt, but the actual outlays will exceed this” (The Economist, 2015).

In today’s exchange rate the loaned planned would be 727,749,571,653.20 Uganda Shillings, or UGX 727bn. So that means that the Minister of Finance Matia Kasaija cannot find the documentation for a huge amount of money. This isn’t a lost pocket or recite, this is like loosing bank. However, we know the context, the loans that came from PTA came within months of the General Election and the Campaigns. Therefore, we can imagine where the money has gone. That is just speculation, but National Medical Stores (NMS) has given some signs, that the PTA Loans was not for them.

In June 2017, the Public Notice of NMS said this:

This funding facility was the PTA Bank loan, which was later approved by Parliament on 26th April 2016. The record on the Hansard clearly indicates ugx. 68billion required to avert an impending crisis at NMS as one of the primary reasons why the loan “should be urgently” approved. If NMS was therefore not meant to get the ugx. 68billion as additional funds, then the Ministry of Finance, Planning

and Economic Development misled Parliament” (…) “NMS provided the contracts by a letter

dated 13th September 2016, and waited for disbursement of the money from PTA Bank. However the said funds have to-date not been provided. This fact was brought to the Ministry of Health and the Permanent Secretary/ Secretary to the Treasury on 27th March 2017. It is important to note that the PTA Bank Loan, was approved by Parliament on the understanding that part of the Proceeds would go to NMS to cover the sh.68billion deficit” (…) “We wish to restate that if this money is not provided, over and above the Budget for FY 2017/18, all Health Centre IIs, IIIs and IVs, including those of UPDF, Uganda Police and Uganda Prisons, shall not receive Medicines in the FY 17/18 except ARVs, Vaccines, ACTs and TB medicines” (NMS, 2017).

Although documents indicate that PTA Bank released the loan basing on documents submitted by the agencies, it was never remitted to them accordance with the agreed terms of the funding. Last week while requesting for a supplementary budget for NMS, Finance State Minister David Bahati was put to task to explain why NMS lacks funds to procure medicines yet the funders released the money in November last year. MP Cecilia Ogwal (Dokolo) wondered why NMS was going through a financial crisis when Parliament approved a loan request of $200m. During the meeting yesterday, members put Bank of Uganda officials led by the Governor Tumusiime Mutebile to task to explain whether the loan was released from the funders to the respective recipients. Mutebile told the committee that between October20th 2016 and May 23, 2017; BOU received $97.9m from PTA bank and transferred all the money to the Ministry of Finance Consolidated Account as instructed by the Ministry of Finance. “How it was used, is the ministry of finance to explain,” he said” (Karugaba, 2017).

So just part of the loans that trusted to NMS never came and never was delivered. The amount of funds needed the crisis in the NMS was not given. Therefore, the lack of oversight of the funds and the loans was evident even last year. Still, PTA Loan of 2016 has not been honored. The BoU will explain what happen after the money was released. So, it means that the documentation of receiving it is there, but what happen after is now gone. The NMS are clear, the BoU, but not the Ministry of Finance, Planning and Economic Development (MoFPED).

Just to put the loan in more perspective, even the World Bank described there in January 2017:

Uncertainties related to both local and external events, including the freezing of new loans by the World Bank and the impact of the results of the Brexit referendum and the US presidential election being the most significant causes of this uncertainty. This is notwithstanding the fact that the Government has contracted balance of payments support credit from PTA Bank to provide the BoU with sufficient resources to prevent spikes in the foreign exchange market when the need arises” (World Bank, P: 11, 2017).

However something that is striking is the Letter of intent written by BoU Governor Tumusiime Mutebile and Minister of Finance, Planning and Economic Development Kasaija. Who both prepared a statement, to build trust in the economy and the loans made by the government.

Who wrote this this to IMF on 18th May 2016:

Government requested a line of credit of USD 200 million from the Eastern and Southern African Trade and Development Bank (PTA Bank). The three year revolving facility has terms that are deemed more beneficial than those prevailing in the domestic markets at the current juncture and near future, so we plan to use these resources in FY2016/17 and FY 2017/18 to finance our deficits. Therefore, these resources will replace existing, more costly domestic financing, rather than expanding the available envelope. We will not use the loan in FY2015/16” (Kasaija & Tumusiime Mutebile, P: 6-7, 2016).

While this story started after Public Accounts Committee in the Daily Monitor this:

Two of the most prominent Banyakigezi – Bank of Uganda Governor Tumusiime Mutebile, secretary to the Treasury Keith Muhakanizi and other top officials in the Finance hierarchy are set to answer questions over how Shs340 billion of Shs720b ($200m) loan meant for medicines and rural electrification was used. They are going to be quizzed by Parliament’s Public Accounts Committee (PAC) with the vice chairman Gerald Karuhanga saying that Muhakanizi, Mutebile, Auditor General John Muwanga and Mr. Lawrence Semakula, the acting Accountant General have been summoned to appear before MPs on Wednesdays to “explain the whereabouts of the money because no agency has received anything.” Mr. Muhakanizi called the probe ‘misdirected’ because ‘everything was done properly and I will prove that with documents.’ He said the money was pooled into the consolidated Fund and spent on approved expenditures” (Daily Monitor, 05.07.2017).

On the 13th June 2017, Treasury Secretary Keith Muhakanizi tried to explain where the money went:

As explained above, all the funds disbursed from the PTA Bank Loan have been fully accounted for. ii No funds has been lost as the Monitor Newspaper has alleged. iii I thank the PTA Bank for quickly providing the funds to the Uganda government when needed. iv It is, therefore, professionally unacceptable for Monitor Newspaper which has represented at the meeting of PAC in Parliament on Wednesday 7th June 2017, to have published an incorrect story in its editorial of 11th June 2017” (New Vision, 2017).

However, the story is not ended in last year. The PTA Loan continue to haunt the MoFPED and the BoU. They both have answers to give. Now a few months later. The answer from MoFPED are differently. Because the Treasury suddenly promised documents in June 2017. However, we are in February 2018 and still not there. Even his own defense that was a notice in the New Vision. Now a half year later, we see the same story and the same issue in the Parliament. That the same amount of monies are not accounted for. The same actors are trying to defend it. The whole affair smells not like Teen-Spirit, but more of State House affair. Since, they are trying to defend the misuse of funds and loans in the timeline of Campaigning. That is what it seems. Since suddenly during campaigns and such the needs for funds is there. Paying off political parties and loyal commissioners. There are so many things to buy and needs. So much material, buses, t-shirts and bribes. You have to print massive amounts of money. In a way where the State House also always needs bigger Supplementary Budgets after the General Election of 2016.

Here is the movement today:

Mr Kasaija yesterday failed to present a personal statement detailing what went wrong with the loan but maintained that no money was “stolen” as he fought to save his job.“I request that we should give an opportunity to a government authority to find out where this money went. But I want to give assurances to this House that no money was diverted or stolen,” Mr Kasaija said. With the loan approved only after the Finance ministry changed its labelling, Speaker Rebecca Kadaga last evening ruled that she will today make a decision regarding the fate of the report, with the duos fate set to be decided today. “I may not talk much but I had engagements with Ministry of Finance over that money. I had engagements to remind the ministry that that money was partially borrowed for NMS. I had meetings in my office over that money,” Ms Kadaga ruled. The loan put the Executive and Parliament at loggerheads with the Speaker at some point ordering the Rules Committee to investigate Mr Kasaija over contempt of Parliament as the fallout escalated” (Arinaitwe, 2018).

So still to this day there is no proof of where it went. Even if the trail leads to two familiar faces, the MoFPED Kasaija and Treasury Muhakanizi, who both trying to save faces. This all seems like misused funds from the Consolidated Funds for Campaigning. Since it was not used for the Rural Electrification Funds or the NMS. Who was both in dire needs, but not important enough. The NMS has lacked it anyways, and not gotten the needed medicine.

Therefore, the two financial heavy-weights has to either forge the paper-trial, since the NMS and the other agencies hasn’t received the funds. They have been spent elsewhere. Suddenly missing and that Muhakanizi uses so long time, that from June 2017 to February 2018 is unbelievable. If you use that long time proving parliament where the funds went. You know there are some shady misuse of it. It has gone to all sorts of activity, to tear-gas, paying police officers to keep Besigye under house arrest and whatnot. Because it didn’t go the place where the MoFPED and BoU promised.

This the GAVI Funds and CHOGM scandal all over again. This isn’t new, it is just PTA Bank loan gone missing. You miss a shilling, you miss a book or even some keys. But you do not loose this amount of money. They have gone to a growing patronage and securing the President’s Private Plane or something. Peace.

Reference:

Arinaitwe, Solomon – ‘MPs plot to censure Kasaija over Shs700b’ (07.02.2018) link: http://www.monitor.co.ug/News/National/MPs-plot-censure-Kasaija-over-Shs700b-/688334-4294524-r1k3ls/index.html

The Economist – Intelligence Unit – ‘ Loan secured from regional bank’ (11.12.2015) link: http://country.eiu.com/article.aspx?articleid=63762990&Country=Uganda&topic=Economy&subtopic=Forecast&subsubtopic=Fiscal+policy+outlook&u=1&pid=923837876&oid=923837876&uid=1

Karubaga, Mary – ‘Finance makes U-turn on sh150b NMS loan’ (08.07.2017) link: https://www.newvision.co.ug/new_vision/news/1455202/finance-makes-sh150b-nms-loan

Kasaija, Matia & Prof. Emmanuel Tumusiime Mutebile – ‘Uganda: Letter of Intent, Memorandum of Economic Financial Policies, and Technical Memorandum of Understanding’ (18.05.2016) link:

NMS – ‘CLARIFICATION ON FUNDS RELEASED TO NATIONAL MEDICAL STORES (NMS) FOR PROCUREMENT, STORAGE AND DISTRIBUTION OF ESSENTIAL MEDICINES AND HEALTH SUPPLIES (EMHS)’ (16.07.2017) link: https://www.nms.go.ug/jdownloads/Press/NMS%20Full%20pg%202017.pdf

New Vision – ‘Clarification on Allegations that US$200 million meant to procure medicines for health centres and implement Rural Electrification Projects Went Missing’ (17.07.2017) link: https://www.newvision.co.ug/digital_assets/fa485f48-5a96-4b7b-be1a-3969e7a45cc3/9-Min-of-finance.pdf

World Bank – ‘Uganda Economic Update 8th Edition, january 2017 – Step by step Let’s solve the finance puzzle to accelerate growth and shared prosperity’ (January 2017) link: http://documents.worldbank.org/curated/en/662191486394023103/pdf/112621-WP-P161699-PUBLIC-UEU-8TH-edition-final-for-web.pdf

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