Opinion: Sankara’s warning on the odious debt lent to the continent… is relevant today

Sometimes we need an reminder, that some powers and some states doesn’t come with the best intentions or with a real helping hand. If it is the famous white elephants or the other giant aid initiatives that doesn’t amount to anything. However, what is now at stake is for instance a lot African states and their loans to China. The Chinese has collateral in either ports, state owned enterprises or ability to directly extract the needed resources the current state with huge loans has. This is their trap and Sankara warned about this, just like the French, British and Americans has done in the past too. Nothing new under the sun, just new methods to get ahead.

What I am quoting is a speech done to the OAU in 1987, just a few months before his assassination. Therefore, the words and warnings seems more important. As in our time, the leaders of today is recycling the ills of the past. They are doing it out of greed and in the end, the people and the citizens will suffer. Not the multi-national corporations, not the state itself, but the public whose disregarded and have to reinvent money.

The wise words of Sankara:

“We believe analysis of the debt should begin with its roots. The roots of the debt go back to the beginning of colonialism. Those who lent us the money were those who colonized us. They were the same people who ran our states and our economies. It was the colonizers who put Africa into debt to the financiers—their brothers and cousins. This debt has nothing to do with us. That’s why we cannot pay for it. The debt is another form of neocolonialism, one in which the colonialists have transformed themselves into technical assistants. Actually, it would be more accurate to say technical assassins. They’re the ones who advised us on sources of financing, on underwriters of loans. As if there were men whose loans are enough to create development in other people’s countries. These underwriters were recommended to us, suggested to us. They gave us enticing financial documents and presentations. We took on loans of fifty years, sixty years, and even longer. That is, we were led to commit our peoples for fifty years and more. The debt in its present form is a cleverly organized reconquest of Africa under which our growth and development are regulated by stages an norms totally alien to us. It is a reconquest that turns each of us into a financial slave—or just plain slave—of those who had the opportunity, the craftiness, the deceitfulness to invest funds in our countries that we are obliged to repay. Some tell us to pay the debt. This is not a moral question. Paying or not paying is not a question of so-called honor at all” (Thomas Sankara – Speech given at the African Unity Organisation Conference, Addis Ababa, July 29, 1987).

Let us not forgot the lessons of the past, as we in the present is continuing a cycle of recycling debt, growing debt and cycles of repayment schemes, which will only make the next generation suffer. If not, when the grace period hits and the state doesn’t have a big enough tax-base or revenue. It defaults and has to give away extraction licenses, state owned enterprises and other vital transport infrastructure like ports and airports. Because, that what is happening.

This is happening in our time. The world is looking, but nothing is getting done. Peace.

Opinion: Hope Kagame learns from Sri Lanka!

As conning as President Paul Kagame are, he will never outsmart the Chinese in their loans and agreements, especially when concerning their moneys and the planned extension of the Belt and Road Initiative (BRI). Before I show the naive relations that Kagame has with Xi Jinping on the visit. I will first show the statements made by Kagame as he is signing agreements and loans. Kagame is really risking natural resources and the infrastructure projects that the Chinese are supporting. If there is any default on loans or problematic to pay back. The Rwandan state will repay with the resources in the soil or within bound of the structures put in place. Therefore, Kagame shouldn’t think of himself as an equal with China, he should think of it as a borrower and find ways to secure repayments.

“I also want to say a few words from the heart. The growing relationship with China is based as much on mutual respect as on mutual interests. That is evident in your personal commitment to our continent, Mr. President” (…) “More generally, China relates to Africa as an equal. We see ourselves as a people on the road to prosperity. China’s actions demonstrate, that you see us in the same way. This is a revolutionary posture in world affairs, and it is more precious than money” Kagame stressed” (Abdur Rahman Alfa Shaban – ‘’China relates to Africa as an equal’ – Paul Kagame’ 23.07.2018 – Africa News).

When you see this, you wonder if the Rwandan President is naive or if he thinking that the Sri Lankan experiment of high loans and bad repayments cannot hit Kigali, like it hit Colombo. Not that I want this to happen to any state. I am as worried about this in Uganda and Kenya, as the loans to for instance Madaraka express, Karuma Hydroelectric Power project and Kampala-Entebbe Expressway. This has to be repaid to the Chinese at some point and with interest.

Kagame is foolish, if he thinks the Chinese will not expect a return on their investment, that is what they do.

Here what happen with the Chinese loans in Sri Lanka:

“Some Sri Lankan economists had privately told me in 2011 that their country will find it difficult to repay the massive loan of USD 8 billion at an interest rate of more than six per cent taken from China for modernising the Hambantota port and that it may ultimately have to convert these loans into equity. That warning came true on July 29, 2017 when Sri Lanka and China signed the Hambantota Port Concession Agreement. Soon after the Agreement was signed, China declared that the Hambantota port is a part of its Belt and Road Initiative (BRI). According to the agreement, China will pay USD 1.12 billion upfront in a debt-equity swap in the ratio of 70:30 approximately, with the China Merchant Port Holdings Company (CMPort) getting 69.55 per cent of the shares and the Sri Lanka Ports Authority (SLPA), a public sector organization, holding the remainder 30.45 per cent. After 10 years, SLPA can buy another 20 per cent of the shares, making the two companies equal partners” (…) “The conclusion of an agreement with China to manage the Hambantota port was seen as inevitable after the government buckled under Chinese pressure when the China Communication and Construction Co Ltd, which was building the port city, demanded USD 143 million as compensation for the stalling of the work. The Sri Lankan government was also compelled to renegotiate the Colombo Port city project last year, which had been suspended due to criticism about the Chinese ownership of 20 hectares of freehold land as well as controversy over the project’s possible negative environmental impact” (Smruti S. Pattanaik – ‘New Hambantota Port Deal: China Consolidates its Stakes in Sri Lanka’ 17.08.2017).

So if the Rwandan take the grants and loans for granted, they might be forced by the financial pressure from Beijing to give away either infrastructure or even make concession of some other vital resources. Because the Chinese expect some value for their money, they are not doing this for charity, but for development of themselves. Therefore, Kagame is not an equal and will not be an equal. I wish that was a serious thing, but the way the Chinese play these agreements. They are not playing around and doling out money for the hell of neither. Neither does anyone else, that is why usually with Western Aid the state expect bought from same source imports and also with strains of governance to get the funds. So, the Chinese does it their way. That is respected, however, the worry is what the aftermath is the for the ones that swallowed to much debt and cannot repay.

Will that happen to Rwanda?

Kagame shouldn’t see himself as an equal, but wonder how he does fit as a piece of the puzzle in the BRI project of the Chinese and how he can pay back with interests. Because that is the next step. The should also worry the neighbors who has borrowed heavily as well from the same They should all be careful and wonder what would happen. This is isn’t only for Kagame, but he was today speaking a bit to friendly to the Chinese.

As if he haven’t gotten the news of what happen in Sri Lanka and for everyone else, that should be warning. Peace.

HF Group Press Release Statement on article titled “Inside Kshs.4.3 billion HF Loans Scam” that appeared on Sunday Standard Newspaper (24.01.2017)

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

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

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

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

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

Cancelled funding from Exim Bank:     

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Reference:

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

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

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

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

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

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

World Bank Statement on Withholding New Lending to Uganda (13.09.2016)

 

UGANDA, September 13, 2016 –The World Bank Group took a decision to withhold new lending to Uganda effective August 22, 2016 while reviewing the country’s portfolio in consultation with the Government of Uganda.  We continue to actively work with the Ugandan authorities to address the outstanding performance issues in the portfolio, including delays in project effectiveness, weaknesses in safeguards monitoring and enforcement, and low disbursement.

We reiterate our commitment to doing everything possible to work closely with the Government of Uganda, as well as with other stakeholders, to support the country’s development and ensure that all World Bank-supported projects deliver tangible and long-lasting results to all Ugandans, especially the poor and vulnerable.

#Scambailouts; Moses Musinguzi Vs. Bailed Out Companies on Good Governance (29.07.2016)

Seemingly the Ugandan Government bailing-out corporations… or is it way of Mzee to give monies to his loyal cronies?

There are talks of bailing out businesses or corporations in Uganda, as the failing; it is not only the Republic of Uganda or the Government of Uganda is striking more and more debt to fulfil the budgets. As that happens, the businesses together with Ugandan Banks are sustaining investments and fiscal monetary situation for industries and businesses; something that is occurring with a steady pace.

The Steady Progress from the National Resistance Movement comes with a price of loyalty of the cronies and the elite; that happen to be fundraising for the NRM-O before the General Election of 2016 and building the famous “NRM-House”, for some strange reason never sees the light of day. Dwindling away in T-Shirt Money and other ways of funding the expensive campaign of ruling regime.

Here is some of the companies and some information on them. There are many more, but this shows certain levels of questions and also, the needed for funding should be gone, except if the owners have allegiance to the NRM-Regime. So it seems like the Executive wants them to have debt and all of a sudden he needs to save them.

Shumuk Aluminium who has failed on loans; these loans are Shs. 8.2bn to DFCU Bank, Shs. 6.6bn to Baroda Bank and Shs. 17bn to Crane Bank. The Shumuk Group have been an industrial manufacture that has made everything from steel to plastic bottles in Uganda since 1984. That is now troubled in debt, has also gotten donor-aid or grants through Danish Aid in 2008 on the level of USD 170.102 and in 2006 a total USD 167.940.; Still with time been able to get unsustainable, really?

Roofing Steel Mines have failed loans; Shs. 201bn to IFC and Shs. 8bn to Diamond Trust Bank. Company’s assets supposed to be Shs. 15bn. It’s a company that has existing since 1994. “Mr. Sikander Lalani, Roofings Group has recently completed its ambitious expansion plan by commissioning Roofings Rolling Mills (RRM) limited, a Ugx320 billion(US$127 million) mega project which is set to change the face of steel manufacturing in the East African Region. This state of the art complex is located in Kampala Industrial Business Park, Namanve” (Constructionreviewonline.com, 2013). In 2014: “Prime Minister Amama Mbabazi and his wife Jacqueline were the chief guests at the Serena event, hailing the Lalani family for creating jobs for Ugandans in their business empire and contributing to economic development of Uganda” (Scoop.co.ug, 24.01.2014). Apparently now the business of Lalani is creating a debt issue and not jobs.

BM Steel has debt of Shs. 66bn. President Museveni said this about the company in the 2015: “The recycled steel that is being produced by Casements, Roofings, Tembo Steel, BM Steel (Mwebesa), Modern Steel etc. cannot be used for very high-rise buildings, hydro-power dams etc. It does not have that strength” (Museveni, 29.04.2015). With this in mind the quality of the steel is low, but their debt is still raising, and the same apparently with Roofing as well, who has debt. Worrying sign?

Namunkekera Agro Processing Industries Ltd (NAPIL) has an outstanding debt of Shs. 4.8bn to the Uganda Development Bank. It was incorporated 25.06.2007. It is a business run by the family member of President Museveni, General Salim Selah. In 2015 Gen. Selah said this: “made these remarks as he toured 40 agriculture projects under the umbrella of Namunkekera Agro Processing Industries Limited (NAPIL) in Kapeeka” (NTV Uganda, 20.03.2015). So the Government will on this bail-out the family member for his miscalculation on the Agricultural investment.

Job Coffee got a debt of Shs. 21.3bn to Stanbic Bank. In the month of September 2014 number 7 exporters from Uganda, with 7,960 bags of coffee. Total market share of 2013/2014 we’re 1.97%. What has happen since is not easy to know, but what is certain is that they have accumulated debt.

Simba Group owned by Patrick Bitature has debts of Shs. 210bn. In 2012 Forbes wrote this about him: “Bitature is the founder and chairman of Simba Telecom, East Africa’s largest mobile phone retailer with over 100 modern retail outlets in Uganda, Tanzania and Kenya Telecom. The company is also the largest mobile phone airtime distributor in the region. Bitature owns Protea Hotels Kampala, a 5-star hotel located in the upmarket suburb of Kololo in Kampala. He is also chairs the Uganda Investment Authority and Umeme, an energy distribution firm which is gearing up for an IPO on the Uganda Stock Exchange” (Nsehe, 06.11.2012). In 2015 in the African Report said this: “When asked about his net worth, he says: “That I don’t talk about. I have shares in listed companies in London, Johannesburg and here. The share prices keep changing. All I know is that I have a portfolio of different companies.” He says Simba Group employs more than 1,700 people” (Mbanga, 19.06.2015). Certainly he should talk about his net-worth now as his being bailed-out in Uganda, maybe he should sell some of the companies in London and Johannesburg, if he is as rich as that or maybe it is just big-talk?

Grapes Construction has a debt of Shs. 100bn to Stanbic Bank. Who owns the Freedom City Mall in Kampala; The owner of Grapes Construction is subsidiary of Grapes Group who is owned by John Ssebalamu. In 2014 he had an issue with the Kenyan renter at the mall of the Company UCHUMI: “At the end of last year, it emerged that Ssebalamu the owner of Freedom City had sued UCHUMI for failure to pay him arrears amounting to over Shs340million” (Red Pepper, 2014). In 2015 he had monies to spend on the NRM: “John Ssebalamu shs100M”. This Shs. 100m was going to build the NRM House, so the coins given seems to give back profits. (Xclusive.co.ug, 28.06.2015).

Sojovalo Hotel has debt of Shs. 8.3bn to the Kenya Commercial Bank. The owner William George Kajoba also gave Shs 50M to the NRM House(Xclusive.co.ug, 28.06.2015). So with this new project from the government, the pledge in 2015 gave a hand back to the businessman and his Hotel close to the Kabaka in Kampala.

Krone Uganda Limited owes Shs. 2.5bn to the Tropical Bank; the business has 3.000 empolyees. Krone Uganda Ltd is the largest miner and exporter of wolfram (tungsten). In the Daily Monitor in 2015, this was written about the company: “the ministry refused to allow them export three containers – 20 metric tons of wolfram worth about Shs1.4 billion ($450,000) that is stuck in various warehouses. They are charged Shs640, 000 ($200) every day as “demurrage” (charges that the charterer pays to the ship-owner for its extra use of the vessel) since February” (Musisi, 18.07.2015). So the government own policy on mining and Value-Added Producing is the reason behind the debt growth of Krone Uganda Limited.

MS Frank Ssonko Ltd owes Shs3.5bn to the Crane Bank, but got assets worth Shs. 9.9bn. Another one is Ahmed Zziwa owes Shs. 10bn, but has assets worth Shs. 20bn. Ahmed Zziwa are the owner of Anglo Fabric (Bolton) limited who imports and sells soap in Uganda. Steven Mukasa owes Shs. 10bn. While having Shs. 40bn in assets. Even owning land on Makerere University, at the level of 8 Acres and even at one point was putting Prof. Baryamureba for stealing Shs. 140m of building material from him in 2010. So he must be NRM guy!

I hope this was enough for now. Not to talk about too much tax-money given away in the name of saving them, instead of making the rich even richer! Peace.

UNCTAD Warns on Debt, Says Africa Should Find New Ways to Finance Development

This year’s UNCTAD Economic Development in Africa Report 2016 finds that Africa’s external debt ratios appear manageable, but African governments must take action to prevent rapid debt growth from becoming a crisis, as experienced in the late 1980s and 1990s. 

NAIROBI, Kenya, July 21, 2016 – African governments should add new revenue sources to finance their development, such as remittances, public-private partnerships, and a clampdown on illicit financial flows, an UNCTAD report said on Thursday, warning that debt looks unsustainable in some countries.

This year’s UNCTAD Economic Development in Africa Report 2016 finds that Africa’s external debt ratios appear manageable, but African governments must take action to prevent rapid debt growth from becoming a crisis, as experienced in the late 1980s and 1990s.

“Borrowing can be an important part of improving the lives of African citizens,” UNCTAD Secretary-General Mukhisa Kituyi said. “But we must find a balance between the present and the future, because debt is dangerous when unsustainable.”

At least $600 billion will be needed each year to meet the Sustainable Development Goals in Africa, according to the report which is subtitled Debt Dynamics and Development Finance in Africa. This amount equates to roughly a third of countries’ gross national income. Official development aid and external debt are unlikely to cover these needs, the report finds.

A decade or so of strong growth has provided many countries with the opportunity to access international financial markets. Between 2006 and 2009, the average African country saw its external debt stock grow 7.8 percent per year, a figure that accelerates to 10 percent per year in the years 2011–2013 to reach $443 billion or 22 per cent of gross national income by 2013.

Several African countries have also borrowed heavily on domestic markets, the report finds. It provides specific examples and analyses of domestic debt in Ghana, Kenya, Nigeria, Tanzania, and Zambia. In some countries, domestic debt rose from an average 11 percent of GDP in 1995 to around 19 percent at the end of 2013, almost doubling in two decades.

“Many African countries have begun the move away from a dependence on official development aid, looking to achieve the Sustainable Development Goals with new and innovative sources of finance,” Dr. Kituyi said.

The report argues that African countries should look for complementary sources of revenue, including remittances, which have been growing rapidly, reaching $63.8 billion to Africa in 2014. The report discusses how remittances and diaspora savings can contribute to public and development finance.

Together with the global community, Africa must also tackle illicit financial flows; which can be as high as $50 billion per year. Between 1970 and 2008, Africa lost an estimated $854 billion in illicit financial flows, roughly equal to all official development assistance received by the continent in that time.

And while governments should be vigilant of the borrowing risks, public-private partnerships have also started to play a more prominent role in financing development. In Africa, public-private partnerships are being used especially to finance infrastructure. Of the 52 countries considered during the period 1990-2014, Nigeria tops the list with $37.9 billion of investment, followed by Morocco and South Africa.

Barclays Bank Uganda Limited’s Operations Not Affected By Impending Shareholding Decisions (01.03.2016)

There have been some local, regional, and international media reports regarding a decision by Barclays Bank Plc to reduce its shareholding in Barclays Africa Group Ltd which involves twelve (12) African countries including Uganda. Barclays Bank Uganda Ltd. has since held two press conferences to clarify the details of these new developments.

Further to the clarifications offered by Barclays Bank, I wish to reassure the Ugandan public that the Barclays Bank Plc announcement does not affect the operations of Barclays Bank Uganda in any way and there will be no interruption to the services Barclays Bank Uganda Ltd extends to its customers.

The regulatory framework in Uganda ensures that any transitions of this nature are orderly and do not affect the soundness and stability of the financial sector as well as provision of financial services to customers.

Please note the following salient points

1. Commercial Banks in Uganda are incorporated locally and function as independent subsidiaries and not as branches. As such, Barclays Bank Uganda Limited is an independent subsidiary of the Barclays Bank Africa Group (in which Barclays Bank Plc owns 62.3% ) and is fully incorporated and registered in Uganda. Being a subsidiary, Barclays Bank Uganda has its own capital base, Management and an autonomous Board of Directors. This insulates the subsidiary from issues affecting the parent entity.

2. The Financial Institutions Act 2004 as amended by the Financial Institutions Amendment Act 2015 and associated regulations provides for a clear procedure for the disposal of Bank of Uganda supervised financial institutions’ shares. If the shareholders of any bank choose to dispose off their shares, the Bank of Uganda will undertake the necessary process of vetting new shareholders to ensure they are fit and proper to run a financial institution in Uganda.

3. Barclays Bank Uganda Limited remains solvent and liquid. It is well capitalised with a capital adequacy ratio well above the statutory minimum of 8.0 percent. The banking sector in Uganda as a whole has a strong asset and capital base with a capital adequacy ratio of 18.8 percent, as well as a relatively low level of nonperforming loans of about 5.3 percent as at December 2015.

I therefore wish to assure the Ugandan public and customers of Barclays Bank Uganda Ltd. in particular that there is no cause for concern arising from the media announcements by Barclays Bank Plc. Customers should therefore continue with their normal banking transactions without any anxiety. The Bank of Uganda is committed to prudent supervision and regulation of financial institutions in order to ensure the stability and soundness of the financial sector, as well as the safety of customers’ deposits.

Please direct any further enquiries to the Director Communications on calupo@bou.or.ug
Justine Bagyenda
EXECUTIVE DIRECTOR SUPERVISION
BANK OF UGANDA

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