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Archive for the tag “MoFPED”

Deficit Financing: The art of fresh loans for the FY2019/20!

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).

Just as it is soon a new Financial Year and also another budget. This time its for the FY 2019/20, the last one before campaigning. Therefore, the added strain on the economy will come, as the state funds are used for campaigns for the ruling regime. This is a steady act of the National Resistance Movement (NRM) and President Yoweri Kaguta Museveni. We can expect more of it. That is the reason why the lack of fiscal responsibility is evident. As the state is within a year going from spending 32 trillion shilling into 40 trillion shillings. This without substantial rate or even more revenue to cover the added expenses. That means the state is more addicted to loans and grants.

Surely, the people should be aware, as the state has already gotten more loans and has to pay more in interests than before. With the new infrastructure loans and other development projects will hit the costs in future budgets. Even with Petro-Dollar, the state still has a lot of old debt to get revenue to cover. Especially, in the short-term window, as the grace periods of old loans will hit the budgets too. It seems like the state is only considering the debt-rate, but not the actual cost of the loans in itself.

That is why I will take one quote from the IMF, before showing what reports there was from Parliament, As they have voted for a new budget, which has escalating spending further without the revenue. That should be a worry. Take a look!

IMF May 2019:

Rising debt puts more strain on the budget as more resources need to be allocated for interest payments. One shilling paid for debt service is one shilling less going to a school or a health clinic. The current ratio of interest payments to revenue is comparable to what countries with high risk or in debt distress typically face” (IMF – ‘Uganda’s Economic Outlook in Six Charts’ 09.05.2019).

Rising debt:

The Committee noted that , the total public debt stock increased by 12.5 percent to USD 11.52 billion as at end December 2018 from USD 10.24 billion as at end December, 2Ol7 out of which domestic and external debt accounted for 33.5 percent (USD 3.86 billion) and 66.5 percent (USD 7.66 billion) respectively. The external debt stock increased by USD 0.78 billion to USD 7.66 billion by end December 2018 from USD 6.88 billion at end December 2017. The increase was mainly from China (25 percent) and World Bank (40 percent)” (REPORT OF THE BUDGET COMMITTEE ON THE ANNUAL BUDGET ESTIMATES FOR FY 2O19/20, P: 7, 2019).

Minority report on growing debt:

Worrying to note is the fact that huge portion of the budget resource is to be financed through borrowing. Out of the projected by domestic revenue of UGX 20.59 trillion (51%) while the budget of UGX 40.48 trillion, 9.44 trillion (48%) will be sourced from both domestic or external borrowing” (…) “It should be noted with concern that projected are almost debt expenditures in FY2019/20 equal to tax revenue (URA tax collection) of UGX 20.59 trillion” (A MINORITY REPORT ON ANNUAL BUDGET ESTIMATES TY 2019/20, P: 4-5, 2019).

It should be worrying how easily this budget was passed. How between last FY 2018/19 to FY 2019/20 the state could add 8 trillion shillings on the budgets. This without counting or even having the added revenue needed. This meaning the state has a giant deficit, which is about half of the budget. Where they have to get funding from outside sources, either by loans or grants. Lots will be loaned for and has to be paid for later with interests.

Certainly, this is a way of ensuring that for every shilling paid in loans, the state could have delivered state services to the public. That is even something the IMF was pointing out. This should be a worry for Ugandans, as the state is misusing the funds, loaning and borrowing on their future, without certainty of being able to repay these loans. That is what is shocking as the oil revenue has been postponed again and the lack of progression on the matter. This means the state is not hitting its targets, while taking up more loans on future revenue. Anyone should be worried about this, because who knows tomorrow and what if the economy totally tanks before the industry takes off. They are clearly living large on Deficits Financing and hoping the golden goose soon lays eggs. Since, they are continuing to fund their operations and the state with loans.

Than, the oil will be sold wholesale, as the state cannot manage to gain revenue and has to trade off everything. The risks it is taking is reckless. The spending is bonkers. That the state is initially a year before an Election Year is creating this huge deficit. Isn’t a sign of strength, but of weakness. As well, as having a blind faith, hoping for a narrow escape in the realm of Deficit financing. Peace.

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Uganda National Oil Company: Press Release (14.05.2019)

Uganda National Oil Company (UNOC): Dr. Josephine Wapakabulo resignation letter as Chief Executive Officer (13.05.2019)

Uganda: Anti-Corruption Unit – Request for Your Intervention in the Delayed Confirmation of Officers in Acting Capacity and Irregular Recruitment of Inspectorate Officers into the Inspectorate of Government (20.03.2019)

Report to the Media on Status of the Revival of Uganda Airlines (10.04.2019)

Uganda National Airlines: Let’s Get It Started!

“Everybody (yeah), everybody (yeah), just get into it (yeah), get stupid (come on)

Get it started, (come on) get it started (yeah), get it started”The Black Eyed Peas, ‘Let’s Get It Started’ 2003

Well, this week has been revealing in concerning the supposed newly minted airlines in Uganda. Where the state incorporated Uganda National Airlines Limited in January 2018. However, the supposed registration and certification happen this week. The documentation now shows, that the Ministers are owners of the Airline and it’s registered on the 26th March 2019 and certified on the 27th March 2019.

Alas, the state has already spent close to $30m USD on it, as they have procured several of planes for the operations and the first are supposed to arrive on the 31st March 2019. Therefore, the whole ownership and usage of state funds comes into question. As the Report to Parliament confessed that the state and the two ministries only owned 2 shares out of 2 million, until yesterday, when suddenly the Ministers of Works and Transport and Ministry of Finance, Economic Planning and Development suddenly had 1 million shares each, a 50 50 split.

This all seems suspicious and within reason. Because, it has been done in wrong order and ensured to not follow procedures or anything of that fashion. As the State for the second time are infringed to deliver new funds to State Owned Enterprise, even as the ghosts of owners and registration suddenly appears. You can wonder, if they would have done this, if it didn’t get public scrutiny. Because, the scribbling document of ownership only appeared, when the Observer and other media houses questioned it.

This shows that there was something lurking and weird about it all. Where the insiders and the ones operating it, maybe, had shell-companies and significant portfolios, where they could earn the profits of this state owned enterprise. That would not be shocking, even if all the investments, all the funding and procurement have happen directly from the Ministries and with the blessings from above high.

With all of this in the open. It seriously question the operation, the ownership and who really controls the company as whole, because its hard to believe the two ministries does it. As it was incorporated in January 2018, but was registered shareholders yesterday, a year and two months after. Which is suspicious at best, if not revealing of how the state operates in this matters.

We can play along and act a fool, but that doesn’t change the remaining questions, the lack of trust and also the lack of protocol. As the state have toyed around spent fortunes on establishing, procuring and investing in the company, while it has been a ghost and non existing entity, which could be someone’s secret bank-account.

Certainly, this is not over and will leave a giant paper-trail that somehow will be resolved in the State House and by whoever the benefactor whose project this is. Because, that is the rule of the day and how these things are under this Presidency. It is common knowledge, but never really said or revealed, unless, family members of the President owns it or runs it. Peace.

URSB: Uganda National Airlines Company Ltd Certified today (27.03.2019)

A fresh report states the sketchy things about the ownership of the Uganda National Airlines Company Limited!

Hold fast to dreams,

For if dreams die

Life is a broken-winged bird,

That cannot fly.”Langston Hughes

Today, there was tabled a report on the 26th March 2019, reported titled: “Report on the Budget Committee on the Supplementary Expenditure 2 for FY 2018/19” especially the vote – “Vote 016 MOWT – USHS 280.046 For Financing Costs of Uganda National Airline”. In this report there are vital information coming up. That I will address, but also show, as it proves how the state plans to invest the taxpayers money on the airline, but also what sort of finance it has already.

The government clearly have already invested money into it, but doesn’t have ownership in it. That is what the report says. It shows intent of investing more in it, but not actual ownership of it. However, not claiming it, which is weird, but that is what they do. They are buying planes for it and investing in it, but not owning it. That is what they are initially saying. This is really rare and weird.

Here is the quotes from the report that matters in my sense:

The Government of Uganda has injected approximately 29.9 USD million into this company but has only 2 shares allocated to it”

Ministry of Works and Transport has requested for on additional Ushs 280,046,77 6,933 to cater for investment costs of the Uganda National Airline”

The Ministry of Finance, Planning ond Economic Development indicated that it was to use proceeds from MTN licence amounting to USD 60 million (approximately UGX 222 billion) to portly finance Uganda National Airlines”

The shore capital of Uganda National Airlines Company Limited is 200 million divided into 2 million shores of UGX 100. Of the 2 million shares only 2 shares worth UGX 200 to Minister of Works and Transport as well as Ministry of Finance, Planning and Economic Development. This makes both ministries to be minority shareholders holding only 0.0001% of the shores. At the moment the owners of the 99.97 shares are unknown. The owners will only be determined when the Directors decide to allocate the shares. It was asserted that the minority shares will be floated to the public. However contention arose as to whether the minority shareholders can float what they do not own. lt was however asserted that this move was undertaken to limit the liability of government. Hence a concern pertaining intension of government to establish o company that it already roles 10 be huge liability from the onset”

As you see, the $30m been invested in the Airline already. The Government and Ministry of Works and Transport, that they need more funds. Also, telling their lack of the shares in the company, while also planning to use licencing funds from MTN to cover the spending on the Company. Which later, in the Report states they will not, but I added to prove how the state spend the revenue it is getting.

The Uganda National Airlines is clearly not well-managed or well prepared, as it is a pile of expenditure, but not allocated what it needed. Since, the state is in need of more after spending millions already. As the first planes are coming in the coming week. Therefore, the National Resistance Movement and the ones behind it is clearly playing games.

They are spending public funds on a possible Uganda National Airline Company Limited, when they arrive. Since the report turned public the GCIC have claimed this in response to the report delivered. Which clearly shows the significant stature of the ownership in question.

They are claiming this:

CLARIFICATION: There has been misleading information regarding shareholding of Uganda Airlines Company LTD. The company was incorporated on 30th Jan, 2018. The company has 2 million shares. Minister for Works was allotted 1 million shares & Minister for Finance, 1 million shares. 3/3: In July, 2018, the management of the company allotted the entire shares of the company as follows:

1. Minister of Works & Transport (represented by Hon. Monica Azuba Ntenge)- 1 million shares.

2. Minister of Finance (represented by Hon. Matia Kasaija) – 1 million shares” (GCIC, 27.03.2019).

This is countering the facts in the report, that even before the ink is dry. Before the time and test of the knowledge given by the Ministry and the Government itself. So why does the GCIC have other indications and facts, than the report. You can wonder who gave them and where it is from? Why wasn’t this given as facts to Parliament and signed of by the Members of Parliament then?

Well, this will be played out in real-time. This is not a fan-fiction, West-Wing drama, no this is real live events of the operations and investing in the resurfaced Airline Company. This shouldn’t be that tricky or played out like this, but it is because the state and the ones involved in it. Because, there must be some loose ends, which is not yet caught. It will eventually. Peace.

MTN Uganda Not Subjected to an ISO Raid on Friday 15 February 2019 (16.0.2019)

MTN Uganda Scandal: Why are all of these people deported?

There are speculations going on there as the biggest Telecom Company MTN Uganda Limited have been under fire since the midst of January 2019. This has been shown over the recent month, as the leadership and executives have been deported. By my count since mid of January, there been four people.

The three firsts was addressed like this by MTN Group:

MTN Uganda has not been officially notified of the grounds for these arrests and deportations and is trying to establish the precise reasons for the deportations. We are understandably concerned about these developments and the wellbeing of all our employees. MTN Uganda is fully committed to respecting and operating within the laws of the country. Notes to the editor: On Saturday, 19 January 2019, the MTN Uganda Chief Marketing Officer, Olivier Prentout, was arrested by police at Entebbe airport upon arrival from a business trip abroad. On the morning of Monday 21 January 2019, the MTN Uganda Head of Sales and Distribution, Annie Bilenge Tabura, was arrested by unidentified security personnel upon arrival at the MTN headquarter offices, in Kololo, Kampala. Subsequently, both Mr Prentout and Mrs Bilenge have been deported from Uganda to their home countries, France and Rwanda respectively. On the 22 January 2019, Elza Muzzolini, Head of Mobile Financial Services was also deported from Uganda. – Issued by MTN Group Regulatory and Corporate Affairs” (MTN Group, 23.01.2019).

Therefore, three people has already been deported, this being Prentout, Tabura and Muzzolini. They have all been banished from the Republic. Today, it has escalated again, as CEO Wim Vanhelleputte, whose also has been interrogated and been questioned by ISO/CMI during January 2019. Was today on the 14th February 2019 deported to Belgium by the authorities.

Clearly, the state is retaliating, as they are fearing for their safety and the data shedding the company is doing. As there been speculation that the company has had disgruntled staff leaking intelligence to Rwandan Intelligence Service. This has been reported by various of online news-outlets. Therefore, some thinks it is connected to this, that the President and the regime is afraid of this. That is why these people are all deported from the Republic.

It is clear, that there something going on behind the scenes. As the Security Organizations summons, interrogate and deport MTN executives from the Republic. This is happening, as the state are trying to silence the MTN or stop leaked intelligence to Rwanda. We don’t know if that is true or what. But what we do now, is that the Ugandan government and authorities are acting swiftly and retaliates against the high-ranking officials within the Telecom. Peace.

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