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Archive for the tag “Matia Kasaija”

Deficit Financing: MoFPED propose to borrow 2 trillion shillings to cover the budget shortfall!

Deficit financing, however, may also result from government inefficiency, reflecting widespread tax evasion or wasteful spending rather than the operation of a planned countercyclical policy. Where capital markets are undeveloped, deficit financing may place the government in debt to foreign creditors. In addition, in many less-developed countries, budget surpluses may be desirable in themselves as a way of encouraging private saving” (Encyclopaedia Britannica – ‘Deficit financing’ (25.08.2015).

In the original budget for 2019/20, the estimated domestic revenue of the state was about Shs. 20 trillion shillings, while the rest would be covered by close to Shs 10 trillion shillings in this manner the budget would cover the 40 trillion shillings. Today in Parliament, the debt trap, which was forecasted by several of Civil Society Organizations and others was proven.

Not only with the recent stipulation of the first Supplementary Schedule to the Budget Year of 2019/20, but also the lack of domestic revenue. This again proves the trouble with generating even half of the budget. As the Parliament are this week, either accepting borrowing 2 trillions domestically to boost the lack of domestic revenue. That means the Uganda Revenue Authority (URA) and the state haven’t delivered on the promise. As the state was spending more and more, but not having the funds to do so.

Therefore, if the state does this. Than, Shs. 2 trillions are loaned to cover for the lack of delivery, the lack of preparations from the government and the added costs of the local government units created. The government knows this, but acts surprised that state have to invest in it. That’s why they have a supplementary budget for it and surely there will be more schedules before the end of the financial year.

Just look at this:

To address the projected revenue shortfall presented in paragraph 3 and the additional expenditure pressures presented under paragraph 9, Government requires a total amount of Euro 600 million equivalent to UGX 2,439 bn (Two Thousand Four hundred and Thirty-nine Billion) to finance part of the budget deficit” (Ministry of Finance, Planning and Economic Development (MoFPED) – ‘THE PROPOSAL TO BORROW UP TO EURO 300 MILLION (EURO THREE HUNDRED MILLION) FROM STANBIC BANK (U) LTD AND EURO 3OO MILLION (EURO THREE HUNDRED MILLION) FROM TRADE DEVELOPMENT BANK TO FINANCE THE BUDGET DEFICIT FOR FY 2019/20, December 2019).

Given the revenue performance in the first two quarters of the FY 2019/20, the projected revenue turnout for FY 2019/20 is Shs 181575.18 billion, against the target of Shs 20,448.73 billion. This

reflects a projected shortfall of Shs 1,873.55 billion” (MoFPED, 2019).

In line with the above Section of the PFMA 2015, Ushs 437.631 billion representing 1.08% of the Approved Budget for FY 2019/20 has been authorized by the Minister of Finance, Planning and Economic Development as Supplementary funding. The purpose of this letter therefore, is to submit Supplementary Schedule 1 FY 2019/20 for consideration by Parliament. Please make arrangements for the Minister of Finance, Planning and Economic Development to lay the schedule before Parliament” (Keith Muhakanizi – ‘SUPPLEMENTARY SCHEDULE 1 FY 20I9/20’, 21.09.2019).

Rt. Hon. Speaker, in line with Section 25 (1) of the Public Finance Management Act, 2015 (as amended), I authorized and have accordingly submitted to Parliament Supplementary Schedule 1 amounting to Ushs. 437.6 billion for this FY” (MoFPED, 2019).

In line with the above, the budget for FY 20Lgl20 is facing the following constraints:

– URA shortfall in revenue of Shs 1,873.55 billion;

– Additional expenditure pressures of Shs. L,432.2bn

– Non-receipt of World Bank budget support funds of Shs. 375 bn

and

– Non-receipt of capital gains tax of Shs. 225 billion (USD 60

million);

10. The total revenue resource shortfall in the FY 2019/20 therefore amounts to Shs. 2,473.55 billion” (MoFPED, 2019).

We know this is serious, when the budget of the FY 2019/20 was 40 trillion. When 2,4 trillion of these have to get borrowed domestically. Even if 437bn of these are supplementary budget and wasn’t in the original budget of the FY. Still, the 2 trillion are a big slice to borrow and gain more loans. This is a debt trap, trapped by even more trap. As the tax-base isn’t growing as forecasted or as possible. By this estimation of the original budget, the domestic borrowing in this financial year would go up from about shs. 10 trillion shillings to about shs. 12 trillion shillings.

Because, with to much taxation, the funds are taken out of the circulation and isn’t spread as much. Not having the ability to generate more earnings for the citizens. They cannot spend, because they are actually paying taxes. That’s why you need sustainable taxes, which makes sense.

That’s why these loans are coming, because the state defaults on taxes, lacks the tax-base and doesn’t have the opportunity to gain the needed revenue. This the reality of the state. They will ask for the loans and add more debt. However, the government will not take responsibility for the acts done. The state are deficit financing and not generating revenue. That is why they are loaning even more debt. At a rate, which should worry anyone following it. Peace.

Opinion: Parasites and lies, a walk against himself…

“I have never stolen anything from anybody. And I am also not a poor man”Yoweri Kaguta Museveni at the Walk Against Corruption on the 4th December 2019

Today, was the official walk against Corruption in Kampala, as the President, the Anti-Corruption Unit at the State House and all other governing parties involved muster up a decent crowd of paid participants, staff and whatnot, security guards and whoever they could find. To walk a distance in the midst of Kampala.

At one point, the guards and security told pieces of the march to slow down, because it couldn’t walk faster than the President. Even as he went to Kololo, he still went at a rate, that was to slow too many. This walk will not change anything. It is a PR Stunt, which will not gain anything fruitful. It is more public wastage in order of looking sincere, which it is not and will never, be.

“It is a moral problem because you make yourself a parasite. Corrupt people are parasites because they get wealth which they did not earn, because they think that God does not see the bad things they do. In the last 60 years, I have been watching and I have not seen these corrupt people being successful sustainably”Yoweri Kaguta Museveni at the Walk Against Corruption on the 4th December 2019

With this in mind, the President is truthfully telling the world that his rich. His vastly rich, Ritchie Rich, rich actually. However, the President doesn’t tell how he got there. It was not like he had wealth and assets going into the role of the Presidency. Not like he had estates, businesses and ranches going in. No, he was an impoverished former Minister, who had gotten grants by mercy of Nyerere and who was hired by Obote II. That is who he was until 1986. Therefore, his wealth has come with power and with incentives given to him over time, also boosting his accounts and also his cronies.

Secondly, if it is a moral problem, then its engraved into this administration. If corrupt people are insects and parasites, there is surely a lot of them in his cabinet, in his offices and around his closest associates. Himself is a parasite then. Because, he haven’t gained wealth on innovation, marketing or basic business models, but by being in-office and getting bargain by kickbacks and inside deals.

Last, but not last. We can say you Mr. President has been successful, gaining more and more power, more and more money and depleting the state, little by little. To a point, where nothing isn’t up for grabs, where secret deals inside the State House decides, if they are staying or going. The Presidential Handshakes and whatnot is the ones crediting to you. That is why walking today is obnoxious and outrageous. Only naïve and dumbfounded people believes this PR Stunt.

The man cannot fight himself. He will not tarnish his own creation and destroy what he keeps him there. Therefore, this is charade, packed as a rally and a march against something. But in the end, it will only further show the rot, the plight and the suffering the actions made by this cause. Peace.

Follow the Code: A secret walk against corruption

On 4th December, 2019, H.E the President of the Republic of Uganda will lead the walk code named Anti- corruption walk. The walk is aimed at intensifying the fight against corruption. The walk will start from Constitutional Square to Kololo and a number of people are expected to participate in this walk” (Uganda Police Force – ‘TRAFFIC MANAGEMENT PLAN FOR ANTI-CORRUPTION WALK ON 4/12/2019’ 03.12.2019).

Merriam Webster states that a code name means: “a designation having a coded and usually secret meaning” (“Code name.” The Merriam-Webster.com Dictionary, Merriam-Webster Inc., https://www.merriam-webster.com/dictionary/code%20name). With this in mind, I never believed that His Excellency or the President is serious about this.

This is the President whose have had issues with demonstrations, protests and rebellion. Therefore, his not the man whose walking against anything. He was a rebel at one point, but that was for his own cause. That is why his stayed in power since 1986 and never left.

With that in mind, the man whose known for having someone close to his office or cabinet connected in some corruption every single year. It is seemingly happening, there are like those proverbs in the papers saying: “Missing Funds”, “Unaccounted Donor Grants”, “Fake Corporations/Products”, “Ghost Employees” and so-on. Even knowledge of kickbacks, secret agreements between the President and Foreign Investors. That is just happens on the regular.

That’s why the President has created dozens of agencies supposed to have the ability to monitor the state organizations, businesses and tenders. This being the Inspector General of Government (IGG), Office of the Auditor General (OAG), Public Procurement and Disposal of Public Assets Authority(PPDA), Anti-Corruption Unit – State House or even the Financial Intelligence Agency (FIA). All of these are supposed to combat the ill called corruption. Still, these are not able to do so, neither are the Judiciary nor the Law Enforcement they are working in tandem with.

That is why the walk is even more ridiculous, as if it’s not the man whose the V.I.P or the Fountain of Honour, whose often involved or accepts the corruption. That being some road-scandal, illegal tender nor the Presidential Handshake. Neither some procurement for some government agency played around with to ensure someone got greased.

So, this walk against corruption. The man whose behind the grand-corruption and his party is usually connected directly in these operations. That is why tomorrows walk is walking against itself. This is like the man who makes everyone sick, suddenly will drop the cure. The man who drops bombs over a nation, suddenly calls and walks for peace. It doesn’t work. That isn’t real!

Unless, the old man with the hat starts to shadow boxing himself, knock himself out and suddenly understand that his the problem. Not that it will happen. This is a PR stunt and nothing else. The NRM MPs, the ones who wants to show loyalty will show up. But everyone knows the state who does this on the regular. Will not stop doing it. That is why Total had secret talks in the State House with the President just this week.

We cannot expect anyone than the small-fry gets charged and taken into custody. The ones who are the big-fish will not touched, unless they have fallen out with Jajja. Peace.

Opinion: RDCs getting cars isn’t governing, but a cheap trick!

The Minister for Presidency, Esther Mbayo has given out 65 cars to Resident District Commissioners (RDCs) from different regions to improve on service delivery. The RDCs who received the cars on Thursday constitute 50% of the total number of Resident District Commissioners currently deployed in the country” (Muhamad Matovu – ‘Minister Mbayo Gives 65 Cars To RDCs From Different Regions’ 22.11.2019).

There are 135 districts, which is operative in the Republic. This is November 2019. There will come more districts in 2020 and so-on. As the Republic is made into smaller and smaller units as political favours and for personal gains of the political elite. That is well-known, as well as a measure done to establish good grounds of new constituencies with no voting history ahead of any given election.

With this in mind, there is an up-coming election in 2021. It is not the first time the National Resistance Movement (NRM) run government have given cars to its officials. They are not only giving that to the MPs and the cabinet, but also anyone in association with the State House. Therefore, the State House and the Parliament should have a car-lot and a car-dealership, if they were supposed to run it smoothly and cheaper.

Because, back in 2015, the state bought 111 cars for District Chairpersons. Therefore, this sort of enterprise happens on near-regular basis. Just as the state bought cars for the CPC in Parliament in this calendar year. So, this is a business the state knows and deals with a lot.

The special thing about this, is that service deliver is important with a car. Not with a mandate or actual factual work that the RDCs do. The Residential District Commanders, the ones overseeing and oversight of the government works in the districts. This is 65 cars and in total, that is 50% of the appointed RDCs. This means there is 130 districts who has RDCs by what the Mbayo states. That means the state lacks funds, manpower and appointed leadership for 5 districts alone. Which is a rare move.

The President has the opportunity to give broader mandate, to give funds and opportunities to the RDCs to actually do more. But thinking a car would make a big difference is naive. As they have the same mandate, the same lacking structure and weak local government. Just today, the President and the state gives state officials cars, instead of building viable institutions.

The state is acting like a car dealership, not a governing institution nor following up on obligations in the districts. This is a cheap ploy for poor districts, for lacking funds and for not investing in all the created micro local-government units, which is now 135 districts and so-on. Where the RDCs and others has supervision and mandates to work. Therefore, there should be more than cars and more than a quick fix, which this is and nothing else.

To buy 65 cars will not fix the districts, it will only give for a short amount of time, mobility for some few persons in association with the RDCs. It doesn’t make the roads being built, schools being furnished nor town halls run properly. That is done over budgets, policies and actual governing being done.

To govern is an art and giving away cars isn’t building a nation, it is only cheap fix. You don’t give an alcoholic an beer, you take them to rehab and stops the availability to beer. Instead, here the state gives another beer and hope that it doesn’t catch on. Sooner or later, these cars will have a breakdown. As the cars are hit by driving miles upon miles every year.

Therefore, this isn’t it. Other than a rundown, over used idea, which isn’t scratching the surface. Peace.

Uganda Telecom Limited: President Museveni letter to Gen. Kahinda Otafiire – ‘Re: Administration of Uganda Telecom Limited’ (09.11.2019)

Bank of Uganda: Monetary Policy Statement for October 2019 (07.10.2019)

President Museveni letter to Hon. Monica Azuba Ntege – Ruling out external or internal borrowing for development infrastructure (18.09.2019)

Another look into the Oil-Road Cost: “Package 2” Hoima-Butiaba-Wanseko Road!

In the newest report of Oil Roads, which is expected to borrow funds for. The China Exim Bank is supposed to be provider of 85 % of the cost of the operation and building of the roads in these projects. I will only look into one of them, as I have previously looked at this significant one.

This is the Hoima-Butiaba-Wasenko Road. A project that was supposed to start in 2015 and was clocking in funds from the state budgets in 2017. Back in 2015, the road was estimated to cost $126m USD. Today, with the recent report, the same road is costing $179,538m USD. That is jump of nearly $50m in a five years time. In addition, of these bloated funds, 85 % of it will be loaned from China and the rest 15% covered by the Government of Uganda (GoU).

In 2017, this project was designated the China Communications Construction Company (CCCC), which signed a deal in January 2016. However, by the time of the report 2019, it is another Chinese Company who has the contract. This is Chongqing International Construction Corporation (CRC) Ltd. With the recent contract, the loans are clearly getting direct back to the Chinese, as their corporations are the ones with the contracts to build. A clever way of borrowing and then getting returns.

With this mind, we can see the changes, see over the years how the price has changed. If Members of Parliament was afraid of the price per kilometre in the past. They should be now. As the changes of price on the same project has changed significantly. There is no doubt, that the Chinese government are getting added loans on each of the packages in this deal. As this is just one of the roads in question.

This is 111km is now costing 659,921,964,460.17UGX in Ugandan terms or 659bn shillings and that equals to about 5,9bn shillings. Therefore, the prices has sky-rocketed and the price per kilometre is abnormal and extremely costly. The overpriced asphalt and the consultation is in absurd levels. The previosly estimated price for this road was about 444bn shillings. Therefore, we can see rising price between the years in both currencies. About 200bn shillings growth in 5 years. 

To many cooks and too few ingredients. They are boiling soup on nails on this one. Wonder how this will end. As I felt in 2017, that the pricing of this particular road was a bit too much, but now they have just escalated it.

We can wonder whose eating, but someone is. We just don’t know who, because there been designated funds to build this one in the past and it has still not commenced. Surely, this road will be built, but at what point. However, with the added loans, the pressure should be on. Also, to secure the oil so it makes financial sense too. That the added value is there. It got to be. Because this project is over the top. This is the real OTT service, paid for by the Chinese and the tab is all taken by the Ugandans. Peace.

Uganda: Press Statement on the Inaugral Public Private Partnerships Infrastructure Africa Event in Kampala, 16-18 September 2019 (13.09.2019)

Uganda Police Force: Police Investigates Minister’s Death Treats (26.08.2019)

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