The NRM lacks Fiscal Responsibility!

There been so many times the National Resistance Movement (NRM) apologists and defenders have claimed the opposition lacks Monetary Polices. However, contrary to public belief or perception it seems like the NRM is failing on this themselves. It is very simple reason for all of this.

The NRM and the Government of Uganda, which is the legal entity and de facto legitimate state at the moment. Have the power to borrow, loan and get funding for their operations. They can budget and make monetary policies. The government can make it possible to inject and add stimuli to the economy as a whole. That is what is happening all the time, but it is also very important. That if they fail to do it properly. It can have dire consequences.

One key aspect the NRM and its government have failed over time is to show fiscal responsibility or balance its budgets. The NRM regime have been borrowing and been deficit financing. They are in a cycle of loans financing old loans. They are adding debt burdens to build roads, pay salaries and do basics of the state. While nothing having funds to cover the shortfall and the interests. This is why fiscal responsibility is so important.

On EconomicsHelp.org it states that Fiscal responsibility is defined as this:

“Fiscal responsibility implies a government pursues the appropriate level of government spending and tax to:

– Maintain sustainable public finances.

– Ensure fiscal policy aids the optimal rate of economic growth.

– Maintain appropriate levels of public investment” (Tejvan Pettinger – ‘Definition of fiscal responsibility’ 13.10.2020).

It is very simple concept. To be fiscal responsible isn’t an revolutionary act. It is initially only spending the money you have and not spend other people’s money. Know what sort of revenue you do have and not expect a sudden miracle of funds appearing out of nowhere to cover a possible shortfall or lack of funds. This is how the NRM has practically operated.

They have needed loans for any sort of project. The NRM have tried to add their tax-base, but at the same time drained the economy. While spoiling itself and adding more and expenses. When they are not generating more natural income. The plus and minuses isn’t adding up. The state is also anticipating more loans, paying more interests and not paying civil servants.

Civil servants, the local government officials, the teachers, nurses and such needs their salaries to sustain a living. That salary pays the overhead, the food on the plate and other expenses. Some of this money will be returned back in taxes and VAT. Therefore, the state will return some of the funds.

This is why the state has really outplayed itself. When its living on borrowed money and donor grants. The state isn’t sufficiently run, when the funds dries up like this. When the state have to issue suspension of paying out salaries and expenses. Except for a handful of cronies, the army and law enforcement. That isn’t a sign of strength, but of weakness. This is basic governing.

The government who governs should be able to plan, secure and add enough revenue to able to pay salaries to its civil servants. If they are not paid? Why should they go to the office? They should be farming instead or work for a public company instead with their experience and skills. It is a waste to be a civil servant, if it doesn’t pays. The mortagage, the plate for supper and the UMEME doesn’t stop asking for money. The bills will continue to come. The landlord can knock on your door and give you an eviction notice.

That is why this is failing the basics. To not balance the budget and be fiscal responsible. It isn’t a magic masterpiece or an unbearable task. To explain what the NRM has done for years. Instead of spending within their means. They have instead been spending like an alcoholic, being buzzed drinking at the bar with no coins in your pocket, but hoping someone else is paying your tab. Peace.

Uganda: A halting economy ahead of the polls

The National Resistance Movement (NRM) and President Yoweri Kaguta Museveni, which is clearly struggling ahead of the polls in January 2021. The NRM cannot run away from the problems, as they have no overhead and isn’t fiscal responsible.

The NRM have already issued a budget of 39 trillion shillings for the Financial Year of 2020/21. They have also issued Supplementary Budgets, which has added more funds. Still, they have not covered the needed funds to expenditure. This is even as the NRM issued a Supplementary Budget three days ahead of this Budget Year and a First Supplementary Budget recently with big confidential expenditures. Therefore, the state has given itself funds and added expenditure apparently without having room to actually spend those. Because if it did.

This wouldn’t be the case:

“The crisis has been unleashed by the permanent secretary to the Ministry of Finance, Keith Muhakanizi who says where things are heading, government is likely to pay salaries of only civil servants in the State House, Electoral Commission, Public Service and the Ministry for Defense. The other departments will be ruled out as non essential and according to Muhakanizi, most of the servants will be laid off till government recovers from the economic pandemic” (Emmanuel Busingye – ‘Exclusive: Only UPDF, police to receive salary as bankruptcy looms, 12.11.2020, Ekyooto Uganda).

This is being fiscally irresponsible. That the Ministry of Finance has to cut of expenditures and spending on state employees in the middle of a pandemic and an election. No matter when really… it is just wrong. It shows that they are not balancing the budgets. They are not showing responsible action towards revenue versus expenses. The state and the NRM is spending money they don’t have and which is squandered. Because, if they we’re using funds properly and had some sense. They wouldn’t be in this in the first place.

The state would not bank on funds coming from a weakening tax-base, expecting donors to bail them out and in addition expect multi-national organizations (monetary organizations) to give grants or loans. This is what the state has expected, also thought and used wrong projections of revenue. That is why they are here. If they had planned within their means and spending within reason.

It wouldn’t be cracking like this. However, the state usually have cracks and is broke after elections. Not in the middle of it. As the state needs funds to campaign and pay off political affiliates. They will give away cars, t-shirts and other things to the general public. Also, ensuring pastors, chiefs and leaders across the Republic campaigns for the President. That all costs and usually makes the campaigns expensive and breaks the bank.

This is irresponsible behaviour of the state. They are misusing their powers and their mandate. As they are anticipating people to work, but for no salary. As the state is not paying it out on time. When people have bills and need their salaries to survive. It is a dire need and the cash grabs of the cronies is eating the funds, which is needed for public servants like teachers etc. These are the ones left behind.

The NRM cannot act like its “Securing Your Future” or delivering “Steady Progress” when it cannot even carry its own expenses at times like these. Peace.

A Trillion Shilling to cover three days [A Treasure Chest for 2021 Elections?]

A fiscal year in Uganda runs from 1^st July 2020 to the 30^th June. What is really rare is that the Parliament and the Government gave itself a Supplementary Budget on the 26^th June 2020 to cover arrears of supposed 1 trillion shillings. These funds are to paid out in the budget year and cover expenditure not hold. It is really sketchy do that so late in the budget year. As this is the end of the Fiscal Year of 2019/20 and days ahead of the 2020/21.

So in a budget of about 34 trillion shillings, the state needed another 1 trillion in the end. Meaning the budget wasn’t prepared correctly since they needed to amend it to this extend. To add yet another trillion shillings like it was nothing.

What is striking is how easy it is to adjust the cash balance, the fiscal year and the supplement budgets. These are easily voted through and the money doled on whatever. This time it wasn’t paying the water-bills of the State House. However, other random projects of the state. Which suddenly lacking funds. It just appearing right that and just right now. It was needed to be done now. In mind that it wouldn’t look to bad or be able to keep this accountable for later.

That you need a trillion shillings this late in the fiscal financial year is sketchy at best. Especially considering the implication of a new financial years just days ahead. These sort of arrears should be considered into the next financial year. If these numbers are real and have a basis. It could just be taken out of thin-air and cover whatever else the state needs ahead of campaigns and elections. These years are always more expensive and a trillion shillings for the campaigns wouldn’t be far fetched. To cover added expenses, cars for VIPs and such. Which comes with every single election.

The President, the Office of the President, State House and Office of the Prime Minister would suddenly eat more food and expand their organization. As it has to pay off cronies, new allies and ensure the electorate get a pinch of the future middle-income country. They get some soap, food and small tokens to carry them for the next four years. This is what they always do. Some even come with a few thousand or a thousand shillings as a part of the NRM Village Project Outreach, which it also does during elections.

None of the added expenses is cheap. It cost to be king. The king needs to give the public, food and circus. That is what he does and it continues the way it has always done.

The NRM, the President and the whole team passes this along. Knowing there will be no overlook or accountability over the sudden 1 trillion shilling added in the end of this fiscal year. Not like these billions here and there couldn’t end elsewhere. As long as they are voted for and can be used by the state to campaign.

The General Election is coming up and the incumbent needs a treasury chest. If there ever was one. The one trillion shillings would be helpful to run an campaign. I wouldn’t be shocked if it went missing and was used for campaigns. That would be just another day in the Republic. Peace.

A Second Supplementary Budget for 2019/20: Additional 462bn to classified expenditure

Keith Muhakanizi, the Permanent Secretary to the Treasury wrote a letter to the Parliament asking for a second supplementary budget for 2019/2020. This he did on the 28^th February 2020. This time, the Ministry of Finance, Planning and Economic Development (MoFPED) is asking for an additional Ushs 662.337 billion.

The President is getting Ushs. 35,218 billion for Classified Expenditure. Since, the paperwork says nothing about it. It is either for his security or to fill his pocket. Because, putting into a account like this, open up a bunch of can of worms. This could even be spending for preparations for the General Election of 2021. Paying the ghetto children or another Operation Wealth Creation (OWC) campaign. We don’t know, but can only speculate, as his not buying a new jet plane nor buying new cars to his close family.

The Uganda People’s Defence Force (UPDF) is getting Ushs. 400 billion for yet another classified expenditure. Who knows if this goes to Gen. Salim Selah or the Special Force Command. Even if this is going to war-games of Philemon Mateke. We got no idea, as it is just specified as classified. It could go into buying more ammunition, tear-gas or even anti-riot equipment ahead of the 2021 elections. We cannot know, since the state doesn’t specify.

Ahead of an election, as there are plenty of things happening. This is a clear message. Even as the next budget will be really constrained by it. The budget of 2020/21 will prove it. If you calculate, you see I only looked into one piece of the supplementary budget. However, it is huge hunk of it. The load of the budget goes there. Not elsewhere.

While for instance, the run-away maids in Abu Dhabi only get Ush. 300 million shillings in comparison. That shows the priorities for instance. I just took one random thing on the 4 page list made by MoFPED. It still show the priorities of the state. Peace.

Possible outcome of the revised Investment Code of 2017!

Yesterday at the Plenary in the Parliament, discussed the revised Investment code of 2017. Which in its self isn’t the most exiting thing. Nevertheless, the reality is that this is now in Parliament shows a push from the Members of Parliament and the Committee of Ministry of Finance, Planning and Economic Development (MoFPED). That they are up to something. They are trying to forge something ahead. However, as the President has claimed the bureaucrats for being lazy, this shows another attempt. However, if this parts of the laws are enacted. Will ensure that it takes longer and the quality of the Foreign Investor to hold onto the new demands of the state. This will also give more power to the Uganda Investment Authority (UIA).

As the September report on the bill states. They will register all investments and all incentives inventory, as off who is doing what and licensed to do. As the Foreign Investor has to comply too a more rigid laws to be able to in the first place now.

Because the change of laws is that an exports of a minimum of 70% of the production in the given incentive, hire at least up to 60% Ugandan citizens and accept to monitored by the authorities and the statutes within the law. This being the UIA, which has the oversight.

The Incentive before launching has to verified and certified by the UIA. The same authority that has oversight and register the incentives. The Foreign Investor has to notify the UIA if they are complying with their inventory to the UIA as per law.

As to make it more hectic for anyone to invest is not allowed to directly to be investing in farming, as production of agricultural output. They cannot do that, but they can be able and allowed to own factories and businesses that helps the farmers to get better crops or bigger livestock.

The law states further the priorities for a Foreign Investor, as per law: “1. agro processlng; 2. food processing; 3. medical appliances; 4. building materials; 5. light industry; 6. automobile manufacturing and assembly; 7. household appliances; 8. furniture; 9. logistics and ware-housing; 10. information technology; or ll. commercial farming”.

This really put the parameter for what they can and cannot do. They are specific as to who allows, what sort of investment, who certifies and who monitors. Therefore, a foreign investor, by law has to comply a lot more and has to have more paperwork to prove his business-plan, prove his investment, his hires and his initial plan for getting exports of the giving products. This will clearly hamper investments and create a longer time-table for them. As the Foreign Investor cannot focus on local market, but on international market, because that is how it is by law. In addition, when you invest in something, you don’t want to loose your certification or your rights to produce or export given products.

Also, the same investor needs to incorporate the business with the Registrar General, a certified of remittance by the Bank of Uganda, the second, the certified of remittance to lodge an application to the Department of Immigration and this department have to give the Foreign Investor a permit to do stay and do business in Uganda. Therefore, before engaging with the new criteria of the UIA and MoFPED, the investor has to get the BoU in check and get the Department of Immigration. If all of these factors doesn’t slow down a process, nothing does. This is clearly a way of securing jobs for bureaucrats and lesser the burden of the foreign exchange and remittance in general.

1. Get UIA Approval and Certification of Business
2. Get BoU Certification of Remittance
3. Get Department of Immigration – Permit and Application of Remittance
4. Getting monitored by the UIA to see you comply with the codes.

If that sounds like an easier way in, it doesn’t, more offices and paperwork, before even spending money. This code will clearly hamper more foreign investors from coming, unless they are giving Presidential Handshakes to the President. I am sure he then lets them in. Peace.

Bosco was warned in 2016 about printing own currency, but in 2018: Goes ahead with it anyway!

“The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists.” – Ernest Hemingway

There are someone who doesn’t listen to advise, even when it is well written and with shown data to President Yoweri Kaguta Museveni in October 2016, as there was reports and even made deals at the State House on the 7^th October 2016. As the meetings was already ensuring and securing the deals between the Government and the printing company Veridos GmBh. By that time the Veridos company had delivered their commitments to print currency in Uganda. Also a comprehensive business plan that envisioned the proposed joint venture between Veridos and the government.

Now it is the 10^th October 2018. Surely for many or plenty, this sort of an agreement is forgotten. Again, today at Entebbe State House, the deals was sealed.

As the Chimps Reports stated: “In the meeting that took place at State House Entebbe on Thursday afternoon, President Museveni noted that this new venture would save Uganda a lot of money that it has been spending on printing documents from abroad. “There was hemorrhage of resources that was unjustified. Money was going out to print currency notes for a long time. About US$25 million was spent each year to create Ugandan currency,” he said” (Kyatusiimire, 2018).

He is saying this without saying the cost of what sort of agreement the government has with company they are already using. As the lack of openness is shown from the state. That is why in 2016, the documents leaked and today, they just came on a government friendly web-paper.

To long:

“Interestingly, Mr Museveni, who thanked the German company for its joint cooperation, criticized government officials for “taking too long” to act on such “crucial matters that affect the country.” He added that licensing bodies must not “over price working licenses for investors because it cripples investment and discourages potential investors. “These things of taking two years to deliberate on such matters must stop. Why did you spend two years discussing something that was so obvious?” he wondered” (Kyatusiimire, 2018).

That wasn’t obvious to the Governor of Bank of Uganda Prof. Emmanuel Tumusiime-Mutebile or the Minister for the Ministry of Finance, Planning Economic Development Matia Kasaija, who both was skeptical, not only because isn’t a company who is known for producing currency, secondly the costs are likely to be more, than what they have today and last the possibility for more forgery. All of this data was scrapped, as Bosco had decided himself.

So for some weird reason, Bosco want to take a bad deal, which his experts has said is a bad deal. He complains that his experts has made it takes this, because they didn’t have faith in the project. All been done at the State House, as it was started in 2016 and rewinds again in 2018. What value has the Governor of the BoU and Finance Minister, when their words are meaningless towards Bosco?

Someone please tell me, because I got nothing. Peace.

Reference:

Sharon Kyatusiimire – ‘BREAKING: Uganda to Print its Own Money Locally’ 04.10.2018 link: https://chimpreports.com/breaking-uganda-to-print-its-own-money-locally/

Bosco warns bureaucrats of sacking: They are his scapegoats for the lack of foreign investors!

President Yoweri Kaguta Musveni does not miss a beat; he skips on every track and sings his tune. He is never to blame and his patronage or his growing bureaucracy to blame. No, it is the ones that is hired to do the work, not the legislation, he passes through the Parliament, or from the State House even; no, it is the bad-boys in the offices, which are enforcing them. The big problem are the ones following the guidelines and following the rules, which the President has put up over time. Clearly, Bosco have forgotten that memo or these laws for that matter. It is his own words, and actions that tends to end up in scriptures that people has to follow. Not like they are blindly swallowing air at the offices, they are following the protocols and the rules of the day. Which have been implemented over the 32 years the President has resided over the main post of the nation.

“President Museveni warned lazy and bribe-taking bureaucrats to resign or risk being sacked. “We still have these lazy armchair officers at the different offices who continue to disturb our people; the investors. I will chase all these saboteurs,” he said. Investors must be facilitated to bring in expert skills, Mr Museveni said, instead of being frustrated through increased work permit rates and other bureaucratic procedure” (Dan Wandera – ‘Chinese are doers not talkers, says Museveni’ 01.10.2018, link: http://mobile.monitor.co.ug/News/Chinese-Museveni-Tiles-Nakaseke-Kyambadde-bureaucrats/2466686-4785104-format-xhtml-y40t4fz/index.html).

Therefore, Mr. President. You should look into the rules, the regulations and the laws that you have enacted, as the bureaucrats are following them and abiding them. They are making it slow, because the process you have built for them. If it was slim and easy laws to process and security check the investors, then the bureaucrats would do that, however, the NRM and you Mr. President has made it this way. They are most likely also giving you a Presidential Handshake to able to spend fortunes in the nation too. You know this and the state organizations knows too.

Instead of sending warnings of firing and calling them saboteurs, maybe, you should look into the laws, the regulations and use your NRM Caucus to implement changes that opens the gates for investors and also financial transactions in the country, as rigid it is today. That is why people are tending not to remit or sending funds, as the expenses for doing so is bananas. That is why you should use your powers for something good and not just order the army to solve crisis. But before you do that, maybe, just maybe, look into the plenty of laws that is enacted and active. Which are hampering foreign investors. That is if, you really care.

At this moment, you are just using the patronage, the cronyism you have created as a scapegoat. Not to make the state better or the financial climate either. Peace.

Mzee was it Warfare or Budget, Mr. President?

President Museveni: “Yes, it is true I was a rebel, but sometimes rebellion fails. I was fighting a just war” (#UGBudget17 Speech, 08.06.2017).

Today was the day the Budget Speech from Minister of Finance, Planning and Economic Development (MoFPED) Matia Kasaija as the Parliament we’re delivered the total budget for the Financial Year of 2017/2018. This one has already been voted for and was a summery for the representatives in Parliament to know the values of their ministries and the projected use of the revenue of the state will have. Still, on this day, the President of 31 years, the rebel of 1980s decided to wear military fatigue and be wearing the gear as a General. He was not the executive in some sense, he was the military general. The gun-loving and militarized politician Museveni was allover today.

Therefore I have to take a piece of law, which could be used as the UPDF Act of 2005, where it states on 164: “Unauthorized sale or wearing of uniforms, etc.

(1) Any Person who, without authority –

(c) wears or uses any decoration supplied to or authorised for use by any member of the Defence Force or any decoration so nearly resembling that decoration as to be likely to deceive” (UPDF Act 2005).

So even if he is Commander-in-Chief and the Executive, he is still of contempt of the Parliament and their rules, when having to show-up in military fatigue or military uniform. As if he is storming to war and not trying to speak well of the budget framework and the voting for the post in the budget. This is clearly lacking the gravity of the acts of contempt. Wearing it in a sessions which is unauthorized or seem as wrong.

Therefore another part of the sub-section part (3): “Any person who by act, words, conduct or otherwise, falsely represents himself or herself to be a person who is or has been entitled to wear or use any uniform or decoration referred to in subsection (1) commits an offence and is, on convection, liable to imprisonment not exceeding three years” (UPDF Act 2005).

So when he as President is wearing the military fatigue or uniform in Parliament, I cannot take that man seriously for doing so. Even if he didn’t really violate the UPDF act, still his acts by words or even falsely representing himself, since he is not a full-time general, but a President of 30 years. His revolution or coup d’etat ended in 1986. A disco-tune that should have lost meaning two decades ago, but since he is still the President. That year is still magical like some of old Disney flicks.

Time to leave the Military Uniform Mr. President! Time to leave it behind and also be and act like a President. If he was in war or had to save Parliament from an angry powerful militia. Alas, it is not so! Time to relief the attire and be peaceful man, especially since he is supposed to help with the National Dialogue in South Sudan, but easier to sell arms than negotiate peace, right Mr. President?

So was it a sign of warfare from the President or his NRM Way to prove that the bullets gave him power to bless the budget? Peace.

Reference:

The Uganda People’s Defence Force Act 2005

#UGBudget17: Half borrowed and a third paid back in Interests!

Today the Ugandan government, the National Resistance Movement finally read the Shs. 29 Trillion budget for the 10^th Parliament. However, it is not necessary the size of funds and all, which is allocated, but the way it is funded. Like “Government hopes to raise sh14.6 trillion in revenues to fund the 2017/2018 budget” (Uganda Debt Network, 08.06.2017). Of the 29 Trillion, they expect to get close to half of that, but the monies has get from somewhere and also be of use. What is left are relieved like this: “The balance sh14.3 trillion (49.5%) of the National Budget will be raised through internal and external borrowing” (Uganda Debt Network, 08.06.2017). With this in mind, half of the budget is adding more debt. So if a nation already having lots of debt and debt repayment, it still adds another half budget. This is a bad cycle of events.

There lets us put things in perspective: “Our concern is sh9.9trillion, which is 35% of the total budget, will be spent on debt repayment” (…) “Amount of money spent on debt repayment has escalated in the recent past now at 9.9 trillion for fy2017/18” (Uganda Debt Network, 08.06.2017).

Therefore, the state and the NRM are clearly getting funds through loans to pay-off their interests. AS the 35% of spending is on interest in the coming fiscal year. This should worry, even if the corruption, misspending of obnoxious amount of funds through the paradise of Okello house. Still, that 1/3 of the coming budget is paid interest on old loans, which are been made by this government and by this President. What it show is the lack of concern of the future and how sound fiscal policies. At this state, the government of Uganda are clearly footing the bill. They are filling in the blanks for where they in the past had happy donors filling the envelopes.

The NRM and President Museveni is overspending and misusing state reserves, as the revenue and the state coffers do not sustain this massive overspending. Certainly, it is visible, also the worry of the running interest rates and growing debt as close to half of this year alone are by loans. Neither if it is local, by foreign or multi-national financial institution does save the fact, that the state has a problem.

That of the coming fiscal year, the state is borrowing half, and repaying that with 35% says a lot. IT says the fiscal policies needs change and it is dire. The state are clearly walking the wrong path. And remember this, there will be supplementary budgets during the fiscal year, that will expose the overuse of funds and needs for more loans. Therefore, they are surely going to exploit the faith in future, without having the funds for it today. Peace.

Uganda: Civil Society Position on Tax Revenue Measures for FY 2017/18 (21.04.2017)