MinBane

Helt ute av sporet (Okumala ekigwo okulyaku kya okuziga)

Archive for the tag “LDC”

Opinion: President Museveni praises Equatorial Guinea for it’s rampant Oil-Corruption; wants to learn his tricks!

In these days the President Yoweri Kaguta Museveni of the Republic of Uganda are on a state visit in Malabo, visiting and learning tricks from the Equatorial Guinean President Teodoro Nguema Obiang, who has used the oil to enrich himself and his loyal subjects. Not build a welfare state, but make sure the family of Obiang get wealthy. Certainly, Uganda is preparing for their own oil production in the Lake Albertine basin, as the pipeline building from the production to the Port Tanga in Tanzania.

This is why President Museveni are visiting Equatorial Guinea to learn the tricks of the trade, as the state of Uganda are still in the dark of the oil-deals between the international companies and the state. We can wonder how the funds will be spoiled and how Museveni plans to use the oil funds for personal gains. If so, he wouldn’t praise President Obiang, who has his whole career to spend the oil profits from his republic. This is what Museveni wants to learn, since his career has been tricking out all sorts of play from Ugandan republic. The petroleum profits can be misspent and hidden just like in the republic of Obiang. Take a look!

President Museveni’s praise:

We are therefore in Equatorial Guinea for two things: looking at how to support prosperity of one another and how to push for our strategic security. I also congratulate Equatorial Guinea for using it’s oil and gas very well. When I was last here for the AU Summit, I noticed gaps between the airport and the city centre. Today, all these gaps were gone. In their place are new, well-planned buildings. And I see the city is refurbished. Some people say oil is a curse but in Equatorial Guinea it is a blessing” (Yoweri Kaguta Museveni, 26.08.2017)

Business in Equatorial Guinea:

Since the discovery of the offshore oil deposits, many investors have shown great interest in the country. Foreign direct investment inflows into the country had thus been consistently high for the past years. Nevertheless, in 2016 the FDI inflow amounted to USD 54 million, a sharp decrease from USD 233 million recorded the previous year (and the historical peak of USD 2.73 billion in 2010) . The total stock of FDI in the country is currently at USD 13.4 billion” (…) “Corruption in particular is problematic. In addition, the business climate of the country remains rather unfavourable for investment. Cumbersome procedures and high compliance costs slow licensing and make starting a business more difficult. Weak regulatory and judicial systems may discourage foreign investment as well, along with high credit costs and limited access to financing. The government controls long-term lending through the state-owned development bank. Equatorial Guinea ranked 178th out of 190 countries in the 2017 Doing Business report published by the World Bank, losing three spots compared to the previous year” (Santander Trade, 2017).

Son of the President on trial:

The corruption trial of Teodoro Nguema Obiang Mangue, the son of the president of Equatorial Guinea, ended in Paris on 6 July with the prosecution calling for a three-year jail term, a €30 million (US$34 million) fine and the confiscation of assets. The Tribunal will return a verdict on 27 October. The 48-year-old vice-president of Equatorial Guinea was not in court to hear the prosecution’s claim that he used money stolen from his country’s treasury and laundered through a shell company to fund a lavish lifestyle in France” (Transparency International, 2017).

This was what that is well-known of the Equatorial Guinea corruption and the son of President has also had challenging cases in the United States. Now the son is also having alleged fraud and criminal charges in France. Clearly, the Ugandan President has already known for corruption behavior. Therefore, even a state agency of PPDA has some words, that the government needs strict regulations before procurement and infrastructure development. This will be clearly important when it comes to petroleum industry. Take a look!

PPDA strict regulation on public procurement:

Public procurement is a key pillar of the public financial management system. The country’s budget and plans are translated into actual services to our people through the public procurement system. It is also the link between the public sector and the private sector as it is the medium through which the private sector does business with Government. Public procurement therefore involves large sums of money and as our budget grows with the priorities of Government remaining infrastructure development, the proportion of the budget earmarked for public procurement remains significant and therefore calls for strict regulation” (PPDA, 2017).

Audits and investigations by the Public Procurement and Disposal of Assets indicate that corruption in the procurement process manifests more in the evaluation of bids, reported to be at 58%. PPDA’s Manager Capacity Building Ronald Tumuhairwe says such corrupt practices lead to awarding of contracts to incompetent individuals hence shoddy works in several government projects” (…) “He adds that the second process where corruption manifests is awarding of contracts at 12.5%, followed by receipt and opening of bids, reviewing evaluation of bids, advertising and signing of contracts” (Sebunya, 2017).

President Museveni clearly has own agencies saying it is important with strict regulations on procurement and infrastructure developments like the ones needed for oil industry in the republic. The regulation of oil industry is lax, to make sure the state isn’t transparent with its profits and taxation of the industry. This is what Museveni wants, that the state and the public doesn’t know the contracts or the agreements between the parties involved. That is something President Obiang surely have the capacity to teach Museveni. And how to make sure his family is earning from the state resource, instead of the public and the state itself. Peace.

Reference:

Transparency International – ‘ON TRIAL FOR CORRUPTION: FRENCH PROSECUTORS DEMAND JAIL TERM AND €30 MILLION FINE FOR OBIANG’ (11.07.2017) link: https://www.transparency.org/news/feature/on_trial_for_corruption_french_prosecutors_demand_jail_term_and_30_million

Santander Trade – ‘EQUATORIAL GUINEA: FOREIGN INVESTMENT’ (August 2017) link: https://en.portal.santandertrade.com/establish-overseas/equatorial-guinea/investing-3

Sebunya, Wycliffe – ‘Corruption manifests most in the procurement process – IG’ (25.08.2017) link:http://radioonefm90.com/corruption-manifests-most-in-the-procurement-process-ig/

PPDA – ‘EVALUATING INNOVATIVE ANTI CORRUPTION POLICIES IN PUBLIC PROCUREMENT IN UGANDA’ (02.08.2017) link: https://www.ppda.go.ug/evaluating-innovative-anti-corruption-policies-in-public-procurement-in-uganda/

Advertisements

OAG Muwanga explains in two reports problems and errors within the Petroleum Industry!

The Auditor General has two reports on the Petroleum Industry and the issues of Petroleum Data and the Petroleum Fund. The errors of the state, the PAYE of the tax to URA. Proves that the monies earmarked for the Petroleum Fund, ends up in the Consolidation Fund. This is proof of the problematic use of the added taxes before the oil adventure really takes off and the drilling of the explored blocks in the Lake Albertine Basin. Where already different international companies have come to drill and the state is making a petroleum pipeline to Port Tanga in Tanzania. Therefore, these vast resources and possible taxes created by the industry and within the Republic. Still, the default problems that the Auditor General address can be fixed. It is just a matter of morals and actually following guidelines. Some are even set in the Public Finance and Management Act of 2015, so if for instance URA follows it, the problems of transactions into wrong fund can create payment arrears and also future problem of spending by the state. Since the misuse of funds and taxes can be allocated to other than what they was expected, as the Consolidation Fund has other uses than the Petroleum Fund. Just take a look!

Petroleum Fund:

For the six months ending December 31, 2016, the Fund received non tax revenue worth UGX 922,348,854 (USD270,900) as surface rental fees from Tullow Uganda Operations Pty and Total E & P Uganda” (OAG, P: 7, 2017).

It was however noted that monies collected by Uganda Revenue Authority (URA) under the income tax on income derived from petroleum operations such as PAYE, VAT and WHT is not being remitted to the Uganda Petroleum Fund. This contravenes the Public Finance and Management Act 2015” (…) “In their opinion PAYE is not tax charged on income derived from petroleum operations but paid by the employees and as such it had been excluded from the definitions of petroleum revenues. Arising out of the above it was established that UGX.l1,390,530,053 collected through the commercial banks and remitted to the consolidated fund should have instead been transferred to the Petroleum Fund. Management has promised to remit it to the Petroleum Fund before closure of the financial year 2016/17” (OAG, P: 10, 2017).

During the period under review, the fund received USD 270,900 (Two hundred seventy thousand, nine hundred dollars) in respect of surface area rentals consisting of USD 113,400 (One hundred thirteen thousand, four hundred dollars) paid by Total E& P Uganda for the development areas of Ngiri, Jobi-Rii and Gunya and USD 157,500 was paid by Tullow Uganda Operations Pty Ltd for development areas of soga, gege, Kasemene, Wahrindi, Nzizi-Mputa & Waraga, and Kigogole- Ngara Unrealised foreign exchange gains worth UGX 15,093,435,449 have been recognised in the Statement of Changes in Equity. These arose from translating the USD opening balances and revenue collected during the period into UGX at the closing rate for reporting purposes” (OAG, P: 14, 2017).

Petroleum Data:

The oil companies did not fully comply with submission of reports relating to their drilling, exploration activities and operations as required. Delays and non-submission of reports results in an incomplete database which may reduce the effective use of the database in petroleum resource management” (OAG, P: vi, 2016). “The shortcomings in the management of petroleum data by the Ministry of Energy and Mineral Development may affect the completeness of the data on the existing petroleum potential, extent of reserves, and amount recoverable thus reducing Uganda’s ability to maximally exploit and benefit from its oil and gas resource potential. A thorough understanding of the resource base and its geographical distribution informs key decisions on the rate of exploitation and potential future revenues” (OAG, P: viii, 2016).

This should all be worrying that the State and the Industry isn’t sufficiently ready for the activity, as the URA cannot even allocate funds correctly. This is even before the Petroleum Data is taken care of and made sure that the exploitation and drilling happens where the best well is within the block. Secondly, the real value of the reports and the licenses that the state would offer to the companies. That because the flow of data and the status of it wouldn’t be where it could be. This is losses created by maladministration and lacking will of institutionalize the knowledge. Instead, the Petroleum Industry is controlled and has just a few handshakes away from the State House. That is why the URA might have delivered the funds to the Consolidation Fund instead of the Petroleum Fund. All of the potential might be wasted in the lack of protocol and care of resources management that is needed in the Ministry of Energy and Mineral Development (MoEMD).

The recommendations and the looks into the issues should be taken serious by the Petroleum Industry and the MoEMD. So the state could both earn more on the industry and also create more positive growth through the provisions that is already made in Public Finance Management Act (PFMA) 2015. So time will tell if they will be more reckless, if they will listen to the OAG or if the Presidential Handshakes will steal it all for keeping the NRM cronyism at bay. Peace.

Reference:

Office of the Auditor General Uganda – ‘REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF THE PETROLEUM FUND FOR THE SIX MONTH PERIOD ENDED 31sT DECEMBER 2016’ (07.06.2017) – John F.S. Muwanga

Office of the Auditor General Uganda – ‘Management of Petroleum Data by the Ministry of Energy and Mineral Development’ (December 2016) – John F.S. Muwanga

Looking into the inflation of 1987 as the Sugar prices are rising in today’s Uganda!

We have had a wonderful collaboration with IMF since 1987. We have managed to control inflation. By controlling inflation, we have succeeded in preserving the people’s earnings” – Yoweri Kaguta Museveni (State House, 2017).

Well, there been many who has set similarities with the inflation and price shocks of the year 1987. The Republic of Uganda has been through their mess before. The government of Uganda and the National Resistance Movement/Army (NRM/A) had just taken power in 1986. This was a year after the coup d‘etat, which brought the NRA into power. President Yoweri Kaguta Museveni in collaboration with International Monetary Fund (IMF), which had agreements and Structural Adjustment Program (SAP), which promoted deregulation and less state control of the economy. This was also put forward to settle inflation and the deficit that the state had.

So, because some has put similarities between 1987 and 2017, as the prices has gone from about 3,000 Uganda Shillings (UGX) in 2016 and 7,000 Uganda Shillings (UGX) in 2017. There is clearly that there was problems in 1987, but whole another level. The Sugar Industry wasn’t established, the economy of Uganda needed export of coffee and this was the sole benefit of foreign currency into the economy.

Inflation in Uganda is running as high as 200 percent, and low prices to farmers serve as a disincentive to agricultural production in a country of rich soil and mild equatorial climate” (…) “At the center of the debate is the issue of devaluation. In its first year in office, the Government revalued the currency from 5,000 to 1,400 shillings to the dollar, saying that the move would make imports cheaper. But exports have become increasingly expensive. Devaluation Debated. Some hard-line nationalists in Government insist that the cost of devaluation would be devastating. The cost of such imports as sugar, cooking oil and soap would increase significantly, they say, making the average Ugandan even worse off than he is now” (Rule, 1987).

In 1987 the Uganda shilling was demonetizated during the currency reform and a currency conversion tax at a rate of 30% was imposed to further reduce excessive liquidity in the economy. There was an immediate drop in average inflation from 360.7% in May to about 200% cent in June. However, with the possible fears of complex and drastic currency reform, the premium shot up, representing essentially a portfolio shift to foreign currency, and possible capital flight, and suppressed inflation. The intended aim of the conversion tax, apart from reducing excessive liquidity, was to lend money raised through this tax to the government. This was to finance the budget deficit over a short period, rather than financing it through printing more money. Nonetheless, inflation shot up again within three months mainly due to renewed monetary financing of increased government expenditure, domestic credit expansion by commercial banks to meet coffee financing requirements and financing of the newly launched rural farmers scheme” (Barungi, P: 10-11, 1997)

Prices for sugar and vegetable oil (both imported goods) increased rapidly in the early part of the year, falling between May and August — replicating the pattern of the premium between the parallel and the official exchange rate. The subsequent fall in sugar prices and stability of cooking oil prices were due to greater official imports. Inflationary pressures on food prices have been aggravated by supply shortages on account of severe transportation problems” (World Bank; P: 36, 1988).

In October 1986, Mulema was replaced by Dr. Crispus Kiyonga, who has a medical background Kiyonga has a difficult task. The government’s finances are shaky at best. In an attempt to enable Ugandan citizens to purchase imported consumer goods, the government fixes their prices below world prices. This, of course, puts considerable pressure on the government’s finances: for example, in July 1986 the government imported $4.8 million worth of sugar to sell at subsidized prices” (Warnock & Conway, 1999).

Perspective from Kakensa: “Today sugar costs 7000/- per kilo. When Museveni came to power in 1986 each kilo was at 4/-(four shillings). Immediately he came to power he said Ugandan shilling had lost value, in 1987 all money was changed, not only changed but two zeros were cut off to give it value on addition to the 30% levied on each shilling. This means on every 100 shillings, you got 70cents. Those who had 100,000/- got 700/-” (Kakensa Media, 12.05.2017).

We can see there was certain aspects, but the sugar industry now is different. The Sugar factories are now real and the business are now in full affect. While, in 1987 the state needed coffee exports to get funding and foreign currency. The sugar was imported and was put on fixed prices. The inflation back then was because of the crashing economy after the bush-war and the effects of it. The Sugar prices now are rising for different reasons. These reasons are the yields of sugar-cane, the hoarding of sugar and the export of surplus sugar. Also, the production of ethanol and bio-fuel. That was not the situation and context in the past.

Still, history is repeating itself, since the NRM, let the prices run as crazy in the past. The price has gone up a 100% in a years time. Which, means the prices who doubled from 3000 to 7000 Uganda Shillings. This is not a stable and the ones who get hurt is the consumer and Ugandan citizens. Peace.

Reference:

Barungi, Barbara Mbire – ‘EXCHANGE RATE POLICY AND INFLATION: THE CASE OF UGANDA’ (March 1997).

Rule, Sheila – ‘UGANDA, AT PEACE, IS FACING ECONOMIC BATTLES’ (28.01.2017) link:http://www.nytimes.com/1987/01/28/world/uganda-at-peace-is-facing-economic-battles.html

State House Uganda – ‘President commends Uganda – IMF collaboration since 1987’ (27.01.2017) link: http://statehouse.go.ug/media/news/2017/01/27/president-commends-uganda-%E2%80%93-imf-collaboration-1987

Warnock, Frank & Conway, Patrick – ‘Post-Conflict Recovery in Uganda’ (1999)

World Bank – ‘Report No. 7439-UG: Uganda – Towards Stabilization and Economic Recovery’ (29.09.1988)

A look into the rising Sugar prices in Uganda!

I commissioned a state-of-the-art ethanol distillery at Kakira Sugar Factory in Jinja today (Museveni, 23rd January 2017)

There are various of reasons for the rising prices of Sugar and processed sugar in Uganda. This isn’t the first time or last cycle of inflation on the prices of this common commodity. Sugar is common in Uganda for concept of having in it in the chai or the milk tea. To sweeten the milk and the black tea the Ugandans drink. Therefore, the Ugandans are needing and using lots of it on daily basis. It isn’t a luxurious goods, but a daily usage, for ordinary use. It has become staple and is staple together with matooke, cassava, rice and maize flour. This is all seemed as basic for the Ugandan people. Sugar is something very important. Therefore, the rising prices says something is out balance.

The balance have now been lost a year after the election. The prices of goods and food was also rising in 2011, therefore, the Republic had the Walk 2 Work demonstrations. These was demonstrations against the rising food prices, which also meant the sugar at that time went up. The same is happening now. With also on alternative exception, that the producers are not only creating sugar for consumption anymore, but ethanol and bio-fuel. Therefore, the produce and profits are going to export bio-fuel and other products, instead of the sugar that the consumers in Uganda uses. This also is an explanation for the rising prices, as well the added exports to Kenya, where the producers gain more selling it there. Than in Uganda, take a look!

In April 2017 USMA commented:

Uganda Sugar Manufacturers Association (USMA) says the increase in sugar prices has been prompted by the increase in cost of production and the deprecating shillings against major currencies. The Association’s Chairperson, Jim Kabeho says sugar millers were forced to announce what he called a paltry 4 percent increase on each 50-kilogram bag on ex-factory price. The increase according to Kabeho saw a 50-kilogram bag of sugar trading at one hundred and eighty five thousand shillings up from one hundred and seventy thousand shillings” (…) “Meanwhile a source at the Ministry of Trade Industry and Cooperatives who asked for anonymity says the Ministry suspects that the big players like Kakira could have decided not sell its sugar to the market so as to increase production at the ethanol its ethanol plant. The sources says sugar mills with ethanol plants are finally making money on sugar through on co-generation of power, alcohol and ethanol” (URN, 2017).

In April in Masindi:

Masindi district leaders have risen up against the Masindi district Resident Commissioner, Godfrey Nyakahuma over stopping sugar cane buyers from buying cane from Masindi district. Last week, Nyakahuma launched an operation of impounding trucks of all sugar cane buyers who buy sugar cane from Kinyara sugar limited out growers and over five trucks loaded with cane were impounded by police” (…) “Byaruhanga added that that is a sign indicating that Kinyara sugar Factory has no capacity to crush the available sugar cane adding that since Uganda has a liberalized economy let everyone come and buy the abundant cane available instead of leaving the farmers suffer with the monopoly of Kinyara sugar factory. Amanyire Joshua the former mayor Masindi municipality said that if Kinyara is saying that sugar cane buyers are poachers, Kinyara sugar factory is a smuggler because it is also doing the same. Mary Mujumura the deputy speaker Masindi district blamed Byaruhanga Moses the presidential advisor on political affairs for failing to advise the president on political issues saying that he is not supposed to enter into business matters” (Gucwaki, 2017).

In May 2017:

From last year’s average of Shs 3,000 per kilo of sugar, the price shot to Shs 4,000 early this year and is now hovering over Shs 5,500. A kilo of Kinyara sugar is the cheapest at Shs 5000, while Kakira sugar is selling at 6,000 a kilo. On the shelves, Kakira sugar and Lugazi sugar are scarce compared to Kinyara sugar, which is in plenty. Many dealers have now started hoarding sugar in order to benefit from anticipated price hike in the short term” (URN, 2017).

In May 2017 – Stanbic Statement:

The only category to buck that trend was wholesale & retail, where staff costs rose and employment fell. Average purchasing costs also rose in April, reflecting increased prices for animal feed, food stuffs, raw materials and sugar. Higher cost burdens were passed on to clients, leading to a further increase in output charges” (Stanbic Bank, 2017).

President Museveni praises Kakira Millers:

I would like to thank the Madhvani Group, despite the disappointment by Idi Amin. The family pioneered the production of sugar in Uganda. By 1972 they were producing 70,000 tons but today they have almost tripled the production to 180,000 tons,” he said. The President was today commissioning a state of the art ethanol distillery at Kakira Sugar Limited in Jinja district. The US$36 million facility, which is the largest in the East African Region, will be producing 20 million litres of ethanol annually” (…) “President Museveni pledged to address the issues to regulate the sugar industry but urged the Madhvanis to partner with farmers with large chunks of land for production of sugar-cane, as the cane is not a high value crop. He said people with small land holdings should be left to do intensive farming like the growing of fruits that give high returns. Turning to the issue of prices payable to sugar-cane out-growers, President Museveni advised the buyers and out-growers to sit together and agree on the prices taking into consideration the market prices globally” (Uganda Media Centre, 2017).

Government statement on the 11th May:

Speaking to 256BN on condition of anonymity a government official monitoring the situation said the manufacturers have not increased the factory price, but he conceded that the situation is worrying. “At the factory prices are stable. Why is it that the prices at the retail gate are high. This means that there are some distributors who are using the hiding strategy in order to rob Ugandans. As Government we shall continue monitoring the situation until we come up with the solution” the official said. Affordability of sugar is considered a key barometer of an ordinary person’s well-being and its pricing can take on political dimensions when people cannot have sugar with their tea” (256BusinessNews, 2017).

Putting the price in pespective:

Kakensa Media reported this today: “Today sugar costs 7000/- per kilo. When Museveni came to power in 1986 each kilo was at 4/-(four shillings). Immediately he came to power he said Ugandan shilling had lost value, in 1987 all money was changed, not only changed but two zeros were cut off to give it value on addition to the 30% levied on each shilling. This means on every 100 shillings, you got 70cents. Those who had 100,000/- got 700/-” (Kakensa Media, 12.05.2017).

This is all proof of a systemic malpractice, where both export, together with lacking yields because of drought and also the production of ethanol and bio-fuel. All of this collected together are reasons for the rising prices of sugar. The sugar price goes up because the use of cane for other things than millers producers sugar for consumption, but for other export products. This is all making sure even as the Republic of Uganda has in the past produces to much, it now doesn’t. Since it elaborately uses the sugarcane for other products.

That has made the Madhvani Group rich and their exports of sugarcane products are clearly selling. Now even their basic milled sugar are sold more expensive on the Ugandan market. There are also proven problems by other millers, who either has to much cane like Kinyara Sugar Factor in Masindi. Which is ironical problem, as the Kakira and Lugazi sugar is empty on the shelves, while the sugarcane hoarding Kinyara are still in the shops. But Kakira which is produced by Madhvani Group, we can now understand, since they have bigger operation and is blessed by the President for their industrial production of ethanol and bio-fuel.

Therefore, the are more reasons than just shopkeepers not getting enough stocks. That the rising prices are not only that there is lacking production. It is the system of export and production. Where the cane isn’t only becoming milled sugar for consumption, but for all the expensive industrial exports like bio-fuel and ethanol. This is all good business, but also bad for consumers and citizens who are accustom with decent prices for their sugar. That is not the fact anymore, as the business and millers has found new profitable ways. So that the surplus sugarcane and also the other gains massive profits. This is all good business for the owners of the sugar-millers and sugar industry. The one who feels the pitch is the consumer and the citizens. Who see scarcity of sugar inside the shops and also the inflation of prices on the sugar. Peace.

Reference:

256BusinessNews – ‘Government to issue statement on sugar’ (11.05.2017) link:http://256businessnews.com/government-to-issue-statement-on-sugar/

Gucwaki, Yosam – ‘MASINDI RDC IN TROUBLE OVER STOPPING SUGAR CANE BUYERS’ (28.04.2017) link: http://mknewslink.com/2017/04/28/masindi-rdc-trouble-stopping-sugar-cane-buyers/

Stanbic Bank Uganda – ‘Ugandan economic growth continues at start of second quarter’ (04.05.2017) link: https://www.markiteconomics.com/Survey/PressRelease.mvc/143ca2b8e3d84c79b96aed4885b7337e

URN – ‘Sugar manufacturer’s association explains price hikes’ (14.04.2017) link: https://dispatch.ug/2017/04/14/sugar-manufacturers-association-explains-price-hikes/

URN – ‘Uganda: Sugar Crisis On for Another 2 Years – Manufacturers’ (09.05.2017) link: http://allafrica.com/stories/201705100129.html

Uganda Media Centre – ‘President Praises Madhvani Group’ (05.05.2017) link: https://mediacentre.go.ug/news/president-praises-madhvani-group

Ugandan economy could get Oil-Shocks due to external factors, recent BoU report claims!

Surprise, surprise the Bank of Uganda (BoU) has made a working paper on the possible consequences of the oil price, the oil exports and the oil imports on the Ugandan economy. This didn’t exceed my expectation of a report or paper, but said enough to clearly anticipate changes in the economy with the coming export. Even as the BoU called the domestic oil production in embryonic stages, which means the real impact will come when it is closer petroleum production the GDP and CPI feel more impact of the oil prices and the volumes exported from the Lake Albert Basin.

That the Ugandan State and the Republic of Uganda, should know that the fresh foreign exchange and currency into the economy, as the domestic parts of petroleum is not having big impact on the economy! Still, the export can change it as the oil prices and change the consumer price index for instance. Take a look!

One such shock that is a source of major concern and risks to monetary policy-making in Uganda is the oil shock. To our knowledge, the effects of oil shocks in Uganda, to date, have not yet been analyzed. The objective of this paper therefore, is to analyze the nature and importance of oil shocks to Uganda’s economy in a dynamic framework” (Nyanzi & Bwire, P: 4, 2017).

According to the Uganda’s Ministry of Energy and Mineral Development (2012), oil provides about 10 percent of Uganda’s energy requirements – the rest is sourced from the small and underdeveloped and unreliable electricity sub-sector and the cheap biomass energy. The oil sector was also deregulated in 1994, under the broad structural reforms implemented by the Government of Uganda, which effectively eliminated oil prices subsidies. Uganda is endowed with commercially-viable oil reserves, but domestic oil production is in embryonic stages. Consequently, all of the oil-energy needs of the country are satisfied by imports” (Nyanzi & Bwire, P: 8, 2017).

The results of the variance decomposition in regard to oil shock are not entirely unexpected, given the structure of Uganda’s economy. Oil and its products constitute 8 percent of total intermediate consumption and 10 percent of energy requirements. In addition, oil is crucial to electricity supply in Uganda because hydro-electricity is unreliable and insufficient. This implies little or no substitutability of oil with hydro-electric energy in production in case of adverse oil shock, which could justify the long-run 20 percent variance in output due to oil shocks. Regarding consumer prices, the small percentage of variance in consumer prices due to oil shocks is justified by the small weight of oil in the CPI basket. Oil constitutes about 1 percent in the 2009/10 rebased CPI basket, of which 0.8 percent is oil for personal transportation and 0.2 percent a source of liquefied energy at home. These numbers are not surprising given that over 75 percent of the population live in rural areas and depend mainly on wood and charcoal as a source of energy, and that rates of car ownership are generally low. Moreover, the main source of short-run volatility in the Uganda CPI is weather-related factors affecting food prices. This leaves the bulk of fluctuations in the core consumer prices (Comprising over 80 percent) explained by demand” (Nyanzi & Bwire, P: 18, 2017).

Oil shocks are transmitted through the supply channel, as a shock that increases the international price of oil leads to opposite movements in real output and consumer prices in Uganda” (Nyanzi & Bwire, P: 19, 2017).

It is hard to say how it could impact and how the petroleum production and exports will change the economy, how the prices and the inflation, as the measure of how much the price of the crude-oil will be at the given time. That the government has secret agreements with oil companies and also agreements with other to build the crude-oil pipeline that goes to Tanzania. Therefore, the reaction in the economy is not yet known, but with the background and knowledge of the how it is now. Most likely a real output and change in consumer prices in Uganda.

That will be an oil-shock no-one can be prepared for. Unless the Government and Parliament created legislation and policies who might soften the change of the economy. Therefore, with this in mind, the National Resistance Movement, the State House and the President Museveni have work to do. That is if they consider the implication the petroleum production and exports will have on inflation, currency value and consumer prices index as well. This report should open some eyes into it, but it should not be surprising. Peace.

Reference:

Nyanzi, Sulaiman & Bwire, Thomas – ‘Working Paper No. 04/2017 – The Macroeconomic responses to Petro Shocks for Uganda’ (May, 2017)

The NRM Regime have during the FY2015/2016 fallen behind on paying out UGX 2.7 trillion!

Today I am dropping numbers that are devastating, as the numbers of debt that the National Resistance Movement (NRM) isn’t paying, show’s sufficient motives for malpractice when it comes to budgeting and the structure of payments. There are certainly not enough transparency and clear audit of the state reserves, as the State is misusing seriously amount of funds. The NRM Regime and their President should be ashamed by their record.

Emmanuel Katongole is the Head Information Technology in the Ministry of Finance, Planning and Economic Development (MoFPED) in Uganda on the 12th April 2017, he dropped a document on their web-page that show’s the domestic arrears of the Republic of Uganda in the last Financial Year.

If you wonder what Domestic Arrears means: “The amount by which a government has fallen behind in its payment of interest and principal on debt to lenders within its own country” (Encyclo.co.uk). So Katongole will literately show how bad the National Resistance Movement is on paying their bills and expenditure. All the sums of this report is in Ugandan Shillings (UGX).

Like under the Office of the President and the Internal Security Organisation (ISO) who itself leaves arrears in the margin of 3.8bn shillings and 8bn shillings in other payable arrears. That one part of the budget and current audit of the Office of the President as the total of verified arrears at June 2016 was 37bn shillings alone. So the Office of the President owes a lot of funds that it hasn’t paid, not only for the ISO!

The State House by the verified arrears at June 2016 was 1bn shillings. What is more unsettling is that the Pensions and Gratitude for Veterans are the sum of 183bn shillings, Survivors 315bn shillings, EXGRATIA 10bn and UNLA 26bn shillings. The Ministry of Defense by June 2016 verified arrears was 718bn shillings! So the MoD are a lax payer of their expenses and expenditure.

Ministry of Justice and Constitutional Affairs owes verified arrears by June 2016 the amount of 684bn. Shillings Court Awards unpaid by the Ministry is 203bn shillings. The Electoral Commission has growing verified arrears by June 2016 because of Unsettled penal insterest for URA in the total sum of 3.2bn shillings. Uganda National Roads Authority (UNRA) has by June 2016 billed up verified arrears by 283bn shillings.

This is just some of the government that has not paid their dues and their expenses, their salaries or pensions, even their lacking covering of funds to pay debt, either internal or external. So the National Resistance Movement are clearly running an economy and fiscal policy that isn’t healthy for the republic.

Just to drop the total sum that the Government of Uganda has failed to pay or failed payments on their debt are by June 2016 the total of 2.7 Trillions of Uganda Shillings! Which is an insane number and amount of misspent monies by the state. The strategy by the Republic to fail so miserably cannot be sustainable, as the invoices and the target to pay their debt should be the most important. Still, the NRM doesn’t seem to think so. They are surely missing steps to having a sound economy when the verified arrears are hitting 2.7 trillions by June 2016. So the Financial Year of 2015/2016, the Ugandan government failed to serve out over 2 trillion of their needed expenses!

What is troubling that the year before, the total state had not paid on their debt and failing expenses in the Financial Year of 2014/2015 as by June 2015 we’re totally 1.389 or close to 1.4 Trillion shillings. So the miss-match between FY2014/2015 and FY 2015/2016 are 1.3 Trillion shillings. So the clear picture is that the Election Year for the NRM is very, very expensive.

Just think about that… eat the bill and pound on the amount of lost monies in the system. Peace.

 

CSBAG Statement: The Budget We Want 2017/18 (20.01.2017)

csbag-20-01-2017-p1csbag-20-01-2017-p2csbag-20-01-2017-p3csbag-20-01-2017-p4csbag-20-01-2017-p5csbag-20-01-2017-p6

Uganda’s Growth in the Era of Oil and Volatility (Youtube-Clip)

“Despite the slump in global oil prices, the start of commercial oil production in Uganda in 2018 offers long-term prospects to diversify the country’s economy and catapult it to upper middle income status in 30 years, according to the country’s new economic memorandum” (World Bank, 2016).

My honest letter to President Museveni – “It cannot be easy…” (06.05.2016)

museveni and his gun

Dear His Exellency President Yoweri Kaguta Museveni!

I know you are touchy now-a-days it can’t be that easy being you. You have your Army and Police Force enforced on the people you are supposed to represent. Mr. President you have hired French speaking soldiers to deploy safety before the swearing-in, while there is a court-order about suspending the planned Swearing-In. While the Forum for Democratic Change and other Opposition continues to hustle in your backyard. You can’t have that right, it is your playground.

What is worse is that the American and European Union is not kissing your hand and respecting you as they used too. They used to say you we’re the proud future of African Leaders, the fresh new blood. Back in the day in early 1990s the then American President Bill Clinton praised you as the “New Breed” of African Leadership. Since you we’re not the same as the lingering leaders like Mobutu Sese Seko of then Zaire (Now Democratic Republic of Congo).

issues clinton uganda

It can’t be easy to be you, you had the potential and the opportunity to leave a legacy of hope and democratic progress, even if you really we’re not really for it. Because you wanted to control the processes through the Resistance Councils instead of the now District and Local Government Councils around the Ugandan Country; and all of them are not directly loyal too you and the party line you have created in the National Resistance Movement.

And now after the hectic elections and the tides are turning. The old-friends from the West isn’t supporting your cause and your actions. That hurts you as you are the old-man with the hand and the only one with a Vision to Lead the Ugandan Republic. As you have taken it from the British Enclave into the Less-Developed Country (LDC) it is today.

Akena M7

Then all the international pundits that comments on the internal activities of your government, the way you want to control all parts of the political map as you have paid of Jimmy Akena and the Uganda People’s Congress (UPC) and disfranchised the Democratic Party. While not able to play the Forum for Democratic Change as they have been steadfast and countered your moves. They make your life so hectic and distress at every move, as they are supposed to respect you authority just as Hon. Akena do!

You’re supposed to be an honourable statesman by now. Instead you’re a Political Piranha for the international community who are tarnishing your name and rule. They are supposed to respect that you uses the army to intimidate the citizens, the citizens who are supposed to be sensitised under your understanding. As much they want to give you money to develop the Crude-Oil drilling and Pipeline to the Tanga Port in Tanzania. The International Community is supposed to salute you for the industrial feet of taking the dinosaur-remains or even fossil-fuel to drive the vehicles that our cars use.

The remains of Mobutu's Palce

The remains of Mobutu’s Palce

It can’t be easy for you, Mr. President your questioned and become tarnished by the international community; who back-in-the-day called you the future and the New Breed. Though the ones that praised are long gone or is busy trying to get their wife [Hillary Clinton] elected in the Democratic Party in United States.

It can’t be easy for you, Mr. President that they are slashing the limited monies for the peacekeeping operations in Somalia and Central African Republic while you send troops there and keeps Mogadishu and other parts C.A.R. under some kind of control. While the United States and the European Union, condemns your internal wrangles that is not territory or their jurisdiction.

Museveni 1986 Uganda

So you are hurt and feel the need to patch your hurt. Therefore as a tiny token from an adversary of you. It is time to see that you are not the new Breed as much as Butros Butros Gali of the United Nations does not have the same space for you as before. You we’re the beacon of hope, the man people looked up as they saw you as the man who beat dictatorship and created a new political landscape. What happen to you Mr. President?

It cannot be easy to see the devalued you have become, the easy way these foreign missions and elections observes says your rule it is not credible or genuine as you have dealt with school elections since your younger days at Ntare School. They don’t understand democracy as you do. These foreigners don’t understand how your handpicked men can represent the people’s will of Uganda, which is initially yours.

You have the audacity not only to house-arrest your opposition, but monitor and deny entrance to where they live. That means that your Police Force denies entry into where they live like today with Winnie Byanyima the wife Dr. Kizza Besigye was denied to go home. That is why it isn’t easy to be you.

M7 rescue

It isn’t easy to be you as your age is even under question by your own:

“In his affidavit, Bigirwa wrote: “That I verily believe that the respondent [Museveni] is 79 years old as he participated in the general elections of 1961 and he was a voter and staunch supporter of the late Benedicto Kiwanuka and the respondent [Museveni] was 23 years old.” (Kiyongo, 2016). This must be damning since if this is true you are older and actually felt the independence as a grown man, as with this you would be born in 1939. Because you’re saying you officially were born in 1944. That is five years difference and also show’s if it is true, then you breached the laws you created. The Constitution says the law for an elected President cannot be over 75 years old. If the word of Moses Birgirwa is true, as his affidavit says it is correct and that means that you Mr. President we’re born in 1939 instead of 1944. That is big thing for you and your reputation yet again.

Not that it’s your first or last lie in the public. They come and go as it is not easy to rule and be honest, transparent and also responsible at the same time. As you have proven to the public and to the people from time to time; like you had no idea what happen in Rwanda and if the Rwanda Patriotic Army had any involvement around 1993-1994. Your armies had nothing to do in the end of first and second war in Democratic Republic of Congo. Even if you with pride after is said about yourself to be a kingmaker! You Mr. President is the Kingmaker who have made way for Paul Kagame, Laurent Kabila, Joseph Kabila and sometimes take your giant wings to support Pierre Nkurunziza, the same you did for Salva Kiir Mayardit as well.

Obiang - M7

So it is not easy to you nowadays as the Opposition have the support of International Community as you have lingered in power and taken the Ugandan People for granted. They expected something else of you. As you have yourself learned the lessons of Frantz Fanon who told that a leader couldn’t control the population, but only have true support if they are behind them; you couldn’t force them to support a leader, that wouldn’t work. But you know this you wrote about this in a thesis at the University of Dar-es-Salaam in Tanzania.

I am sure Mr. President that you never thought the world would come so quickly to door-step, that the words of your mouth would go further than Lira and Nairobi when talking to the press in Kampala or Mbarara. Instead now with this Social Media that you dislike with a passion, because you can’t control what people say and do. Something you prefer as you want to control and lead people, not make people lead you. As you Mr. President are the man-with-the-vision, not the man who has to listen. That is why you talk wild about the media and was so attacking on the Daily Nation and the NTV Uganda.

Elephants Quote

So it can’t be easy to be you. The ground is burning. You are one out of two elephants that are stomping the ground. You and Dr. Kizza Besigye are fighting elephants while the grass is the people. It is not easy to see how the state you will leave behind as he fights you with peaceful means and demonstrations. You have now done the same as Mobutu, the same as the former leaders you claimed to liberate the Ugandan people from. You have become the Machiavellian leader who speaks one thing and attack on the other. You’re ruthless Mr. President and the cards you playing is now open. They are expected you cannot pay and exchange governmental positions with the FDC and the men who want accountability and a transparent government that actually cares about the Ugandan citizens. Because your actions looks like the man who turns to guns and armies instead of the democratic values you spoke in the 1980s and 1990s even if you never believed in them. I say that Mr. President because of the actions of recent years proves that the opening of Multi-Party system was just to silence the International Community and keep them pumping up your national budget and to fill your coffers. We know that now and therefore condemn you.

Mr. President not easy to pull out of Somalia and the Central African Republic as the funds and the loyalty showed have been given your government useful foreign exchange, even if the funds from European Union and United States government have dwindled time as the Kenyan also taken parts of action as well and after President Moi been out of office, the continued relationship between U.S. and them have become better. Something you now and it makes your mind boggle on the farm.

Kampala 12.02.2016 Police Army

So it can’t be easy to be Mr. President who has the world on your shoulder, everybody question all of your actions, while you embezzle state-funds, keeps oil-drilling license secret, other activity secret and at the same time have to use army and police to silence the people. Intimidate the people as they know and you know deep in your heart that you stole the 2016 election. Peace.

Best Regards

The Writer of Minbane

Reference:

Kyonga, Derick – ‘Court petitioned to stop Museveni swearing-in’ (06.05.2016) link: http://observer.ug/news-headlines/44079-court-petitioned-to-stop-museveni-swearing-in

Worrying signs of devalued ballot value in the American Democracy as their to many disfranchised voters, PACs holds on campaign funds and the Corporate Media hold on message sent to the Citizens.

American Primary

Just as the Primaries in the United States are winding down and getting closer to the Conventions of the Democratic Party and the Republic Party. The main candidates and Presidential Candidates have soon been selected and gotten picked through the mixed of ballots and the caucuses differing how the Primary Elections in the states was done.

I am not an American and can only see it as an outsider and with the view as an outsider has. To listen to the American TV reporters on FOX, MCNBC and NBC makes a European shake. The TYT is some positive, but still shows the fragmented media landscape that have been created in United States. As the grand corporate media is loyal to a certain party or a certain candidate; much like the state media houses are for their ruling parties in LDC. So the FOX channel follows and hates anything from the Democratic Party even if the person initially acts and votes similar to the Republic Party. That is the irony. The same with certain “liberal” media who follows the Democratic Party by any means and blackballs the Republican by any means.

donald-trump-make-america-great

As the Progressive and the liberal are supposed to be on the Democratic side, and the conservative side is on the Republic side. The Parties have big sides and the range of political spectrum could initial be based into four parties as the suction between all the areas and range should be concern as the Presidential candidate cannot be like a Tea-Party General and at the same time be affiliated with the establishment when it comes to certain policies. That means of actions from a Tea-Party member should be different then the Conservative party member!

Bernie BS Slogan

The Same is in the Democratic Party the establishment of the this party is more moderate and clear-faced close to the conservative establishment of the Republican. The Moderate in the party believes for instance in the sense like lax-taxation and the government institutions as small-corporate friendly environment for the 1 % instead of 99 %. While the Progressive are more on the line of Bernie Sanders and wants the taxation on the rich corporation and have labor right for the workers. So the Sanders line is far from the moderate part of his party. Still they both belong to the Democratic Party. That is what initially makes the American a rare venue of political discourse.

The Political discourse and the view on political aspects are in view concoction of corporate media, losing old papers who was the ones setting the agenda and is now not as big as before and the new media as TYT, Huffington Post and Buzzfeed changes how the political news get spread and questioned. As the radios and local broadcasters do not have the only venue and the corporate media is not the only place. Even live feeds on Youtube gives the voters more access to other sources then the ones supported by the giant multinationals who wants to decide and continue in the same level as of recent as it is profitable to keep it that way.

Ads PACs

The other thing that is special about the American Politics are the level of money that the candidates needs to raise, the amount of adverts in the media and how much they matter; that together with the presence how the Super-PACs matters in the campaigns for either senators, representatives and also Presidential Candidates. PAC stands for Public Action Committee (PAC) where they pool funds and collectively works to enhance a campaign for a certain candidate or political idea. They are not supposed to be directly connected with a Candidate up-for nomination or for a State Senator who needs ads and commercial space for their “Message”. The PAC can run to donors and financial beneficiaries that will give to the PAC as a calculation on how they can be “puppets” or necessary persons to get the legislation that the corporations who funds the PAC need. So the business has the opportunity to “own” candidates and nominations instead of the ones that are there in public confidence. That is something that make the American system lacking democratic values as the cash cows and the cash hungry campaigning endorse the idea of corporations funded candidates instead of the party funded and the people funded through this PACs. Therefore the American democracy is very corporate.

The American media that are connected to certain Political Parties and even endorse certain candidates are embedded with the ones that give highest ratings and can keep the legislation in positive favor of the stakeholders and owners of the corporate media. Not the ones that are there for the middle-America or the middle-class, working-class or any other class then the owners of the Multinational corporations or Wall-Marts of America instead citizens.

US Dollar Campaign

That is why I am little skeptical to the American Democracy. The value of the vote is less there as the system is built around the corporations and the money train. As of now it is. The ones with wealth, the ability to gain amounts of funds and collect delegates in the inner-party elections get to be the Presidential Candidate for their party. The Positive is the political range in the Democratic and Republican parties as the public can find their different candidate inside their parties.

So as an outsider I am worried and does not like with what I talked about when it comes to democratic values that the money fueled and cash registered American democracy is supposed to be the greatest and the one to aspire to. That in mind as the American Government condemns and explains their values whenever a foreign government holds an election and they are a “stakeholder” in it or support the government there.

bushgore Front Page

Certainly with the values of respecting the ballot and having systems that certainly transparent and securing the vote. As the American Government have had the hanging chad and the electronic malfunction of Florida that helped George W. Bush into power in 2000. That is not the only one issue coming with the ballots loss of value in recent times. Not the delegate system of primaries. I will speak about the election laws.

The Election laws are made to make it harder to register as voter, shorter time and if your felon or former-felon in certain states is impossible to become a voter again. We know that their groups of people who have become disfranchised by the directives and laws. Certainly this deficiency and also fear for ghost-voters make it harder to get voter-ID then getting license at the DMV in some states. If it is easier to get license to ride their Buick in Texas then getting to vote, then there something missing. Certainly something missing in the so-called democratic state in question; I just mentioned Texas the laws might be worse in Utah for all I know.

The main subject is the voters and the ballot should get respect. The Delegate in convention should follow the voters as much as the votes follow the registered ones in the tally; so the ones with the most votes in Indiana should become the Indiana Senator or Representative in Congress and Capitol Hill. That is the same if they are independent, Democratic or Republican.

But why does this matter, it is a principal. That in a democracy the votes should equally matter and the voice of the men and woman who are parts of the civic duty does it in good-faith of dropping their vote and delivering a just change or keeping status quo after their own fate in the government system and picking the right candidate to do so. If the candidate fails in their tenure or term, then the voter can through ballot pick somebody else and change guards of the democracy.

Corporation Election

The issues with election laws that disenfranchise people, when the corporations of the media spreads certain message and ideas swallows the minds and the grand idea of the free speech and level playing-field together with the monies used and needed to campaign. Gives the race and campaigning for the Presidency and the Senators’/Representatives addicted to the donors and funders of their campaigns instead of the confidence of their citizens.

And if that is the way and the corporate policy of the American Dream, if that is the vision that the forefathers of the American Democracy wanted for their American Centaury and the American ideals. That cannot be what the men and woman who fought against the British and wanted to be free nation for the settlers. As they wanted to be free to build their own nation in the vision of their citizens not in the vision of GM, Doritos, AIG, Warner Brothers, AT&T and American Express. I don’t believe that the American Government and the citizens who picks the ones that votes for the ones that represent them; that it was built for the corporate citizens for the corporations and to serve the Limited Liability Company (LLC). I thought the American Government and the ideals of their democratic values was built for the citizens and not to fit the corporate agenda and their needed heads-up to get their bills through congress either by lobby-money or PACs to secure the right Candidates in the Senate. Peace.

Post Navigation

%d bloggers like this: