Opinion: Now that the World Bank has new priorities, they will most likely not loan to the pipelines in East Africa!

 

There is certain movements that will strike as more expensive for the East African Community (EAC). This being for the Government of Uganda (GoU) and the Government of Kenya (GoK), who has big plans of petroleum pipelines from their oil-fields and to the coast. That being from Turkana to Lamu Port. While the Ugandan oil goes from Hoima to Tanga Port in Tanzania. Both development and industrial projects will have issues with the funding. The World Bank has supported massive infrastructure projects in both countries.

Therefore, for the two counties big development and oil industry, this is giant set-back, since they have to find funding and loans for the pipelines on the open market. Even with higher interests and making the profits of it lesser, than it would have been with a World Bank loan. It would not hurt the pocket as much as it does on the open market. The banks wants more profits themselves and also make sure they are paid-in-full.

With all this in mind. There are speculations, but first. Parts of the self-answering service. Before we look at the reactions in Kenya and Uganda. All of are important, as the state is involved in the licensing and building the pipelines. They are directly into the development and procurement of the pipelines. That is why this is big blow for the administrations and their possible tax-profits on it.

Word Bank Q&A:

“Q. How is “upstream” oil and gas defined?

Upstream is an industry term that refers to exploration of oil and natural gas fields, as well as drilling and operating wells to produce oil and natural gas” (World Bank, 2017).

“Current projects in our portfolio would continue as planned. However, no new investments in upstream oil and gas would be undertaken after 2019, unless under exceptional circumstances as noted in the decision” (World Bank, 2017).

Kenya Pipeline:

“The announcement by the bank, which has significant interests in Kenya’s oil prospecting sector, does not bode well for the country’s anticipated entry into the club of oil producing nations beginning next year. Analysts said they do not expect an immediate reaction to the announcement even as they acknowledged that it takes the shine from oil in the long term” (…) “Locally, the World Bank is offering technical support to the Kenyan government, through the Kenya Petroleum Technical Assistance Project, to prime all stakeholders for commercial oil production and sale. The six-year programme is scheduled to run until February 2021 and involves the World Bank managing a Sh5.2 billion fund set up by investors from Germany, Norway and Britain. The World Bank’s private lending arm, International Finance Corporation, is however directly involved in Kenya’s oil fields, having a 6.83 per cent stake in Africa Oil, the Canadian exploration firm with interests in northern Kenya oil blocks” (Mutegi, 2017)

Uganda Pipeline:

“The pipeline, is expected to be completed by the year 2020, when the country is scheduled to start oil production. In fact, Uganda’s President, Yoweri Museveni and his Tanzanian counterpart recently commissioned the construction of the East African Crude Oil Pipeline. The two leaders laid mark stones for the crude oil pipeline in Mutukula, Kyotera district and Kabaale in Hoima district. Total E&P Uganda, a subsidiary of French oil giant, Total S.A, is spearheading the construction of the crude oil pipeline on behalf of the joint venture partners. Adewale Fayemi, the general manager, Total E&P Uganda says discussions are ongoing to discuss on the formalities of how the pipeline will be run. Already, an agreement has been reached that the East African Crude Oil Pipeline (EACOP) will be run and managed by a Special Purpose Vehicle (SPV) – private pipeline company. This means that a private company will be incorporated with joint venture partners – Tullow Uganda, Cnooc Uganda Ltd and Total E&P Uganda, and the governments of Uganda and Tanzania as shareholders in the company” (Ssekika, 2017)

Certainly, this will put a strain on the projects. They have to deliver another type of arrangement to make sure they get funding and have the funds to pay the added interests the banks wants. The added points on the dollar and the interest-rates will hit state-owned firms and the state itself. Since the pipelines most likely becomes more expensive and will be less profitable.

That the World Bank is pulling out of these projects is all within line of the Paris Accord, as they have professed is the reason. Still, this will make these projects more expensive and make sure they are earning less on it. Unless, the crude-oil prices are going up to a level that makes these investments even more profitable. That is only for time to tell. Since it is costly projects and also sophisticated to build. There is needed lots of expertise combined state planning to achieve the development plans.

This is just the beginning, but the pipelines and these investments are vital for both Kenya and Uganda. As the governments are already borrowing state funds on the possible earnings from the oil reserves in their basins. Therefore, they need to drill and need the petrodollar as quickly as possible. Peace.

Reference:

Mutegi, Mugambi – ‘World Bank dims Turkana oil hopes’ (14.12.2017) link: http://www.nation.co.ke/business/World-Bank-dims-Turkana-oil-hopes/996-4227848-u02v8n/index.html

Ssekika, Edward – ‘East African Crude Oil Pipeline: The Inside Story’ (11.12.2017) link: http://www.oilinuganda.org/features/economy/east-african-crude-oil-pipeline-the-inside-story-details-emerge-of-how-the-crude-oil-pipeline-will-be-financed-managed.html

World Bank – ‘Q&A: The World Bank Group and Upstream Oil and Gas’ (12.12.2017) link: http://www.worldbank.org/en/topic/climatechange/brief/qa-the-world-bank-group-and-upstream-oil-and-gas

The Auditor General Muwanga really told stories on mismanagement and maladministration of the NRM government (Quotes from the End of the Year AG Report 30th June 2015)

As of yesterday there we’re the reported 111 cars that vanished and weren’t procured by a Ministry in Uganda. Because of that I had to look more through the report of the Auditor General John Muwanga. There are many stories; some of the ones in this Report have already been discussed on my page.

There so many stories to pick, but here is some of my favourites that shows all from a goats, expressways to other where money have disappeared, over-compensated or not allocated needed funds for the planned procurement and projects that the Government we’re supposed to do. Take a look!

Indebted to International Organizations:

“I noted that a number of Government entities are indebted to International Organizations such as PTA Bank, ADB, EADB, WTO, UNIDO, COMESA and Shelter Afrique. A sample of five entities revealed indebtedness of UGX.77,724,089,603 and US$.4,968,950” (OAG, P: 36, 2015).

Overpay on construction of Kampala-Entebbe Expressway:

“An analysis was done and adjustments for the different features of the two expressways were made. It was observed that the unit cost for the Kampala-Entebbe expressway was US$ 2.315 million per lane kilometre while the similar expressway was US$ 1.204 million per lane kilometer” (OAG, P: 38, 2015).

NAO Project going nowhere:

“The protocol agreement between Government of Uganda (GoU) and Democratic People’s Republic of China (DPRC) was signed on the 27th June 2008. It involved establishment of a demonstration centre under the National Agricultural Organisation. However, it was observed that after hand-over of the site by Ministry of Agriculture, Animal Industry and Fisheries to the DPRC, there was no proper follow up by Government on the project as such it was difficult to establish whether the anticipated funding of RMB YUAN 50,000,000 equivalent to UGX.26 bn was received and how it was applied to the project” (OAG, P: 42, 2015).

NCIP disbursed funds:

“Government signed fourteen (14) protocols under the Northern Corridor Integration Projects where substantial amounts of funds have been invested and implementation is on-going. For example amounts totalling to UGX4.2bn was disbursed to fund the power interconnection and the Hoima-Lokichar-Lamu oil pipeline. However, the protocols do not provide for regional coordination and monitoring as well as the audit framework to provide an independent assurance on the utilization of joint funds. This renders it difficult to track the progress of the projects and follow up the accountability for the funds disbursed” (OAG, P: 43, 2015).

Advances Unaccounted for:

“Uganda National Roads Authority: 47,738,040,619 UGX” (…) “Ministry of Local Government:  3,827,011,454 UGX” (OAG, P:87, 2015).

Bidco has avoided VAT:

“It was noted that as of November, 2014, the outstanding VAT obligations for BIDCO stood at UGX.744,420,170, included in this figure was late payment interest charge of UGX.168,747,557. Accordingly, a sum of UGX.700,000,000 was paid to URA towards settlement of the tax arrears” (OAG, P: 93, 2015). “After the eleven (11) years, BIDCO would start paying VAT directly on its own and from the 12th year start refunding to Government the VAT plus 5% interest for the first eleven (11) years in (8) equal installments over a period of (8) years. This condition was subject to fulfillment of article 4(3) of the agreement which requires Government to have handed fully to BIDCO all the agreed 26,500 hectares of land” (OAG, P: 94, 2015).

ADB Susbscription:

“In August, 2010, the Governing Council of the African Development Bank (AfDB) under the sixth general capital increase of the bank allocated Uganda shares worth USD.19,759,798 payable over a 12 years period in annual instalments of USD.1,646,649. It was noted that the payment of Uganda’s 4th instalment of UDS.1,293,299 which became due on 16th March, 2015 had not been made. As a result, the callable shares related to the missed instalment had been suspended in line with the Board of Governors resolution on the sixth general capital increase of the bank meeting” (OAG, P:95, 2016).

Banana Project:

“The banana project owns land in Bushenyi together with other movable properties. However, it was noted that the land title is still in the names of the project without the legal mandate to continue owning this land of behalf on government unless the expired legal status is resolved following the legal opinion of the Attorney General to transfer the project under Agriculture sector” (…) “During the financial year 2014/2015, the PIBID project had a budget provision of UGX.9bn out of which only UGX.2.7bn was released as vote on account and as a result, activities worth UGX.6,682,145,000 were not under taken. The affected activities include: purchase and installation of machinery and equipment (UGX.2.5bn), Construction materials (UGX.1.457bn.), marketing of the tooke products (UGX.777,665,000) and procurement of transport equipment (UGX.780,000000)” (OAG, P: 102-103, 2015).

Delayed Construction of Katuna OSBP and swamp reclamation works:

“The construction of Katuna OSBP is undertaken at a contract sum of UGX.8,951,277,750 and Swamp reclamation for access road works estimated at UGX.12,000,000,000. The commencement date for the construction was 13th June 2014 and the estimated completion date was set for 13th June 2015. This was later revised to 30th December 2015. Inspection of construction works showed the following” (…) “The EU Confirmed funding on the 12th May 2014 and all the conditions set by World Bank were met including NEMA’s clearance that was received on the 30th April 2014. I noted that GOU was required to finance the building works for Katuna OSBP since IDA credit funding had been exhausted. The contract for construction of OSBP was finally awarded at a sum of UGX.8,951,277,750 on the 5th June 2014. The EU delayed to operationalize her support and the contractor could not commence on the major building works due to delayed reclamation of the wetland where the buildings were to be constructed” (…) “Management explained that heavy rains, poor terrain and lack of material sources in Katuna such as sand are the biggest challenges. The would be material sources such as hard core are not readily accessible due to the hilly terrain of the area and the contractor can only make a few trips only on a sunny day. For materials like sand, the source is Mbarara (about 150km) and the contractor can only make a few trips given that the road (Mbarara-Ntungamo and Kabale-Katuna) is under construction” (OAG, P: 137-139, 2015).

Uganda Police Force:

“A review of the statement of financial position revealed outstanding payables of UGX.16,454,307,782. Payables worth UGX.10,500,682,162 were incurred during the year which implies that management continued to incur arrears without establishing sufficient mechanisms to monitor and control them” (OAG, P: 183, 2015).

Ministry of Local Government:

“A review of the Ministry of Local Government’s expenditure revealed that the entity charged wrong expenditure codes to a tune of UGX.12,086,792,676. This constituted 40% of total actual expenditure for the Ministry of Local Government. Whereas the funds were spent on items for which they were not originally budgeted for, the accounts have been presented in a way that reflects that the amounts were spent on the earlier budgeted items” (OAG, 2015).

M/S Faw Limited:

“A local company was contracted by the Ministry to provide storage space for the various roads, sanitary and fire-fighting equipment procured under a Chinese loan in 2011/2012 financial year from their parent company. The providers were paid UGX.1,416,000,000 during the year 2014/15 for 20 months storage of the equipment delivered. A review of the procurement file revealed the following” (…) “It was noted that only the Contracts Committee decision on a submission (PP Form 209) approving the evaluation report and contract award at a monthly fee of UGX.70,800,000 were available on file. However, the Solicitor General’s approval and contract agreement were on the procurement file. No initiation of procurement, invitation of potential bidders, record of receipt of bidders, evaluation report and PDU submission of Evaluation Committee report to Contracts Committee were on file to support the award” (…) “A review of the availed documentation revealed that two conflicting pro-forma invoices were submitted by the firm with one quoting a monthly fee of US$.14,160 VAT inclusive for ten months, that is; from 1st June 2012 to 31st March 2013 totaling US$.141,600 and dated 17/5/2012 and another one dated 2/1/2012 quoting a monthly fee of UGX.70,800,000 VAT inclusive for twenty months without clarifying the particular months” (…) “The final batch which arrived in August 2013, was commissioned by the president in October 2013 and handed over to police on 19th December 2013 implying storage of at most five (5) months. This makes fourteen (14) total months of storage as opposed to the 20 months billed resulting into a loss of UGX.424,800,000” (OAG, P: 237-239).

Ministry of Defence:

“During the year the Ministry’s total expenditure on land acquired amounted to UGX.1,119,388,145. However, it was noted that the government policy of capitalising the acquired land from the financial year 2011/2012 did not give guidance on what to include as cost of land acquired. As such, this amount could not be verified due to lack of guidelines on treatment of land costs in the financial statements” (…) “It was observed that a sum of UGX.1,000,000,000 was paid to an individual as part payment on a claim of UGX.2,958,668,733 for the compensation of 683 cattle and 119 goats which were handed over to 4th Division for safe custody during the insurgency period in 1986” (…) “It was not possible to confirm whether this claim had not been paid before since it is now 28 years since the purported supply of the animals” (…) “It also appears that these animals were for various people but instead the compensation was made to one individual” (OAG, P: 285-288, 2015).

State House Entebbe – Okello House:

“State House has been occupying Okello House for many years with a tenancy agreement that expired in 2013. However, it was observed that State House has not renewed the tenancy agreement and no rent payments have been made to the landlord despite continued occupancy. At the close of the financial year, a sum of UGX.1.272,363,507 was outstanding in rental arrears” (…) “National Housing and Construction Corporation owns properties on Plot 1 Kyagwe Road–Nakasero which is currently occupied by State House. Documents indicate that National Housing has been demanding arrears of UGX.201,100,000 from State House. These arrears have not been reflected in the financial statements”  (OAG, P: 294-295, 2015).

If you don’t find this interesting that the Government of Uganda is misspending funds in this way and that this is just a figment of imagination as this is pieces of a giant report. The most interesting is that one man got the whole piece of the pie of what happen in 1986 and secondly that the State House doesn’t even have an agreement with the tenant who owns Okello House where the President has gallant dignitaries. That shows the state of affairs, brothers, time for a change and also better procedures and practices! Peace.

Reference:

OAG – ANNUAL REPORT OF THE AUDITOR GENERAL FOR THE YEAR ENDED 30TH JUNE 2015

We thought we seen the worst; but the here comes the 20 Point Programme from Mzee!

Sometimes I think President Museveni is a bit too smart for himself, that must be it, as he have since start of his reign added and amended more plans than useful laws. That is something the world should know by now. He entered his first term after rebellion with the 10-Point Program that was supposed to reinvent and remake the democratic, accountability and facilitate the development of Uganda. Something that has been stalled for wish to stay in power and also his own nepotism, corruption and cronyism in government and state functions in general; together with no-need to leave the militaristic maneuvers of government.

“The NRM under the leadership of President Y. K. Museveni came up with the ten point programe of action. In 1987, Basing on the ten point program, President Museveni launched a Minimum Economic Recovery Programme followed by a series of reforms aimed at restoring macro-economic stability to provide a favourable environment for economic growth and private sector development. The key reforms were, liberalization, privatization, currency reform, changes in tax and fiscal policy plus restraining expansion in government expenditure while maintaining focus on economic recovery and growth” (Uganda 25 Years of Nation Building and Progress, Jan 1986 – Jan 2011, Printed: May 2011).

That is why that when I read that President Museveni had the genius idea of a 20-Point Program, I was latterly laughing and crying in sadness of this so-called leader. Who supposed to lead and make change; after thirty years in power with a 81 Cabinet and created astonishing amounts of districts and sub-counties, that every town and nearly all villages have either one or two central LCV and other councilors to be bribed by the central-government. And in his genius attempt to spoilt the trade, he comes with another plan to cover over the atrocities and pledges that we’re recycled under campaigning in 2015 and 2016.

This comes from the leader who of late has already these wonderful plans to hold onto and supposed to finish in his lifetime, as he wants to promise the Ugandans the middle-Income position and also economic progress in the levels of South Korea and Singapore. Though, the corrupt and donor-friendly behavior is still necessary since the Petroleum money, is still not certain as it is still needed more development and investment before the profits from the black-oil drilled in the Lake Albert basin and Albertine region.

The first plan that was supposed to take over the failed 10-Point Program from the Economic and Development of the Republic, where the magical and all-covering; the Second plan the famous ‘Vision2040’, where all pieces of government and private sector we’re interconnected as the NRM-Regime had plans to reconfigure and also establish what they had did between 1986 and 2013. The plan that we’re released in 2013 said this: “a transformed Ugandan society from a peasant to a modern and prosperous country within 30 years”; I do not feel the need to say how much further they have come in the last three years.

Hon. Francis Mwijukye said: “Today I visited Karungu government secondary in Karungu subcounty- Buhweju district where I found students studying under very disturbing circumstances” (Mwijukye, 25.06.2016)

The third plan that comes to mind was the National Development Plan II (NDPII) who we’re drafted and surely released during the 2015, and we’re written March 3, 2015. This was a plan for the infrastructure projects and the defining projects that we’re interconnected with railroads and also the major road projects of the UNRA, which is certain a magnifying economic prospect as the investments in infrastructure as the unfolding economic problems, that recently was reported from UNRA. So the President has issues with this alone, before releasing the 20-Points Program of 2016.

So with the hearing of a new plan from the grand National Resistance Movement and the Presidency of 30 years, if he had finished or wished to finish the first plan, the 10-Point Program. But, that wouldn’t make the political battlefield and the regression of progress so obvious; if anybody believes he will ever finish a program or even sufficiently have due-diligence behind a new program, you should dream on or reconsider you thought pattern.

With the newly released 20-Program Plan of 2016, is a rehash of old-ideas into a new format with the mix of the Vision2040, 10-Point Program and the National Development Plan II. That is a combined of these visions, as the 10-Point program is totally out of whack, the 2040 is in the midst of it and been in the works for three years without any real progress on the matter. The NDPII is a framework for basic transport and infrastructure that are parts of all the three other plans. So, this is far from finish and with the UNRA troubles, the World Bank suspension and the others issues with financing the grand infrastructure projects of late, while the Standard Gauge Railway and the Northern Corridor Integration Projects (NCIP), which is a collective planning of infrastructure between the East African nations we’re it need cooperative effort from the countries.

So with all of this in mind, when reading the progressive, the revolutionary, the rebels new plan like the monstrosity levels of belief that he can sell yet another amazing plan to the public and donors. The reassessment the donors should do is that this in the mass of affairs and tricks the NRM-Regime have come with for three decades and was supposed to be new-found governance; instead it has been more of the same, just in another name, another package and another head-honcho who been able to smile with Bill Clinton, Gadaffi and all the dignitaries that wanted spend money on his government and newly created institutions under his leadership. This has all happen, while the Western countries have accepted the atrocities and brutality against civilians for the peace and assurance of progression of democratic values that over time have been proven as fool’s gold.

The reality of this new Plan is to repackage the same of promises and the so-called progression of the government institutions and the civil service delivery as hospitals, schools and roads. Through the neo-liberal structural adjustment plan that we’re accepted to get more World Bank loans in the 1980s, while now because of less donor-funding adding more loans into the bloated government budgets together with bigger government spending on growing parliament, growing districts and sub-counties, while the added expenditure on the projects as the rising prices on roads with little due-diligence, higher interests on the fallen loans and the expenses on military equipment. This all with the steady level of inflation and proved little will to change the service delivery from the NRM-Regime, as the international community have let most of it go without any impunity or real care.

As even the European Union proudly did this recently after the fraudulent election they discredit in their own report, still they we’re so giddy to do this:

“Goverment of Uganda to hold political dialogue with European Union as mandated in Art 8 of Cotonou Agreement” (Emma Were Tinka, 28.06.2016). So the true ethics of the European Union and democratic values can be traded of with a decent agreement and when the NRM-Regime can even be validated by EU, this talk and consider, even sign the agreement, but they might not implement it; as the due-diligence have never been a thing for Museveni, so after all this year? Why should it all of a sudden matter?

This new plan is another one of his schemes and plot to get donor-aid and get funding for his nepotism, his cars and airplanes as the direct budget and the over-priced infrastructure projects have silenced his critics as that have been used on tear-gas, Russian fighter-jets and other needed procurement, not on fixing schools and buying school-books for the students. That is no-need and not proved added value. This 20-Program plan is just non-sense and the ones that buys into it, are long lost causes like Ofwono Opondo and Andrew Mwenda. Peace.

13th Summit of the Northern Corridor Integration Projects – Joint Communique (23.04.2016)

The Battle for the Oil the Coast; Double pipelines seems to be the END-game: Kenyan on their own, while Uganda picks route through Tanzania!

There was not too far ago when the Government of Kenya was dreaming in their wild pipedream to advance their own ideas and manage to hook the Ugandan Government so they wouldn’t continue with the progressive agreement with Tanzanian counter-parts. In the end it seems like the waves are long gone. The wind from Lake Albert never seemed to turn.

We had to wait until 23^rd April 2016 to be reassured that the President Museveni and his NRM could not be persuaded to be a continued or locked into the LAPSSET:   Lamu Port Southern Sudan-Ethiopia Transport. So it would be from Hoima, Western Uganda into the Northern Kenya bypass into the prospected lines would go there both from Ethiopia and South Sudan down to the shores and bays of Lamu Port.

Instead Uganda have continued and promised to honour the 2015 Memorandum of Understanding with Tanzania the Uganda–Tanzania Crude Oil Pipeline (UTCOP); that goes from Hoima or Lake Albert through the Tanzanian nation down to the shores of the Tanga Port. This is also because of the agreements and assurance of both governments and also the new Oil-Drilling companies in Uganda like Total and ENI. They have also spoken their peace and does not feel safe as where the Pipeline goes through uncertain areas of Kenya.

So there will be two pipelines and in close reach and also with distinguished end-game; as the economic prospects are changed, the rates for oil-transport will be lost in the sight of Kenya. The Kenyan cannot now have future prospects of the oil-rates and jobs as a Pipeline gives. They will have cough-up the funding and most likely more borrowed money for the grand infrastructure.

The Ugandan will use funds and borrow monies to fund the pipeline-building and also give tax-payers and jobs in Tanzania. The rates by just transporting the oil from A-B will be a good tax-base for the Tanzanian Government. President Kenyatta hoped that his close relationship would help him and also with his Deputy Ruto also campaigning for Museveni to give something back. Seems like that didn’t help as the President Kikwete already have sweetened the tea and offered something that also helps to calm down the Oil-Drilling investors and their envelopes.

CS Keter of Kenya must be disappointed as his detained moment in Tanga Port came to nothing and the KDF forces inside Somalia are the reason for the fallout. Though I doubt that is the main reason. That is the diplomatic reason from the Ugandan Government. Ugandan Government and NRM-Regime is about money. They are all about the money, therefore the non-accountability and non-open tax-regime. The Ugandan Government would never say that is the main reason, but if Total, ENI and CNOOC words and tax-base is the current controlling the reasons for President Museveni. As he wants them on his side; so he can have secret deals with the Oil-Companies and keep the low-key taxes; not to talk about the un-disclosed agreements between them and the government of Uganda.

Therefore I am not surprised I think they only went into the talks in Kenya to please their neighbour and trading-partner as the relationship have soften over the last few months and the President of Kenya and President of Uganda have cherished more time together. As President Museveni have played the big-man and asked for suitors while waiting for the words from the Oil-Companies. The excuse of not taking Kenya is certainly been given by the Oil-Companies as the Ugandan President will only take the highest rates and the lowest fees for the construction. We can see that the borrowed monies that will be used should have low-charges and be clearly not too bad to GDP or the national inflation.

Still, the matters remain how the relationship really is between Uganda and Kenya. As they have fought over the little Migingo Island and chicken export fiasco. An the Recently also covered a squabble over Yellow Fever Notes to give to Border Patrols to be relieved and be allowed to Enter into Kenya from Uganda. So with the decision to abandon all hope for Kenya and totally give way to Tanzania; will be hurting the pride of the Harambee in the coming weeks. Especially since the Kenyan has tried to get the Ugandan’s to use their port instead. This backfired and didn’t work.

I hope that this doesn’t stop the other Northern Corridor Integration Projects (NCIP) as of the Standard Gauge Railway and others that can connect the nations and bring softer transport of people and goods between the East African nations. Certainly the matter is at hand and the justification would be “terrorism” as why the pipeline didn’t get extended. Though I believe it is much more to say “cash money” and in general the black gold revenues.

This here will certainly be uncovered over time and the real reason will show-up by the Al-Shabab is a deflection and we know the gig is up. Peace.

The Battle for the Ugandan oil to the Coast; As the Tanzanian and the Kenyan suitors try to bait Mzee

There is the time and day where the President Museveni walks into Tanzania speaks to the new President Magefuli and promise more money for sustainable pipeline through Tanzania down to the coast. Later in the month he travels to Nairobi and meet President Kenyatta, and promises to ship the oil in pipelines through Kenya down to the Coast.

As both Big-Men do their bidding and promises quality lines in safe pastures with clean operations and good relationship between the countries and their businesses. While Tanzania was first in this time around, the Kenyan counterparts would not be worse.

The Ugandan Government have gone back-and-fourth promised Kenyan government before and made plans fitting the Kenyan perspective, so early in March after the general Election, the President met with President Magufuli seemed to be a grand deal, as the Tanzanian said they could start with building as early as August 2016 if the Ugandan Gov. was ready for it.

Now today it seemed as the Ugandan government have gone away from the Tanzanian agreement from early in month. As the Bunyoro oil fields will build pipelines from there down to Kenyan coast. A gentleman’s agreement between Uhuru and Yoweri, as they have worked together during election time, with funds and that President Museveni wants to give something back and show loyalty to the Kenyan President.

Tanzania and Uganda had even signed a framework agreement for the crude pipeline on the 12^th of October in 2015. That seemed just to be a plan and not official document as the President of Uganda, seem now to be keen to repay his fellow mate in Kenya.

We never know is if this an reaction the EAC Inter-Burundian Dialogue of Peace between the Burundian stakeholders where President Museveni has lost his position as the opposition in Burundi claimed he was biased towards President Nkurunziza and wanted somebody else, as the African Union and EAC let former Tanzanian President Mpaka take the key role, as the mediation will be led by him, not the Ugandan President. That must sting a bit to man who wants to be the grand King of East Africa and overrule all estates and areas at all cost. That might be why they scrapped the agreement with Tanzania when it comes to the Pipeline.

This here will be proof of who wants to be the cadre for the monies that Ugandan President could bring and how far they will go to eat from his hands. As the President plays the field on both home-grounds and hope to gain the most for himself for as little as possible, while serving loyalty to the ones he picks. The partly agreement that was written during last quarter of 2015 seems too premature, as the joint statement today assume that the Kenyan government takes the last straw. Especially with the knowledge of the funding of President Museveni campaign parts of those funds to his war-chest came from the mountains of Kenya and not from Tanzania.

Because a man like President Museveni is more about his own will than the best for the oil or the best for the companies involved, because he want to be sure that the decision is benefitting him and his loyal cadres. Not anybody else, therefore he plays with Tanzanian and Kenyan officials until he gets the best deal for him, even if that strands the already made agreement with Tanzania, as the Kenyan suitors want to make sure that he gets the sugar and the tea he needs to sign a joint deal with them, even keep the Migingo island, as the money from pipeline can bring wealth and create jobs in Kenya, more than a few fishes and stones in the middle of lake. Peace.   

Joint Statement at End of Meeting between their Excellencies President Uhuru Kenyatta and President Yoweri Museveni (21.03.2016)

Interesting findings from the AG report on “Central Government and Statutory Corporations” – Part One!

Here I will Travers through the report of Auditor General of Uganda’s Annual Report for the year ended 30th June 2015. This is on: “CENTRAL GOVERNMENT AND STATUTORY CORPORATIONS”. I will take the quotes and stories that seem to show parts of how the Government of Uganda works and what the Auditor General have cared about addressing in this specific report. Take a look! This here is Part one!

What it contains:
“This is Volume two of my Annual Report to Parliament and it covers financial audits carried
out on Central Government Ministries, Departments, Agencies, Universities and Uganda
Missions abroad” (…)”Section 2 presents my findings and audit opinion on Government of Uganda Consolidated Financial Statements including major observations” (P: 25).

Nugatory expenditure:
“Government paid UGX.26.1bn during the period under review as delayed settlements of obligations arising from contracts for construction services, Court awards, and contributions to international organizations etc” (P: 34). Comment: The government has no issues wasting giant sums of settlements it seems, shouldn’t’ there be away to not use the money on these settlements?

Unsustainable pension liability:
“The Ministry of Public Service recorded an outstanding pension and gratuity liability of UGX.199,255,907,539 as at 30/6/2015 (up from UGX.108,681,159,047 as at 30/6/2014). It was noted that the gratuity and pension arrears continue to accumulate, a fact which the Accounting Officer has attributed to inadequate budgetary provisions over the years” (P: 35). Comment: There been press release from the Ministry of Finance, Planning and Economic Development during 2015 doesn’t seem like they want to fix it, instead blame the pensioners. Well, they have learned from their master right?

Understocking of the Government petroleum strategic reserves:
“In 2012, the Government of Uganda and a private petroleum company entered into a concessional agreement to refurbish, restock, maintain and manage the petroleum strategic reserve facility at Jinja. Despite the concession requiring the operator to ensure that 40% (12million litres) of the storage capacity of the products is available at all times, I noted during inspection in September 2015, there was only 274,000 litres of petrol and 331,000 litres of diesel in stock compared to the required stock levels of 20,000,000 and 10,000,000 litres respectively” (P: 38). Comment: Doesn’t seem like they follow the guidelines from 2012 and proves that the Governmental agencies doesn’t follow the plans they have or have the procurement to buy what their supposed to. This here is just barely enough considering the use of oil and diesel!

Construction of Kampala-Entebbe expressway:
“It was observed that the unit cost for the Kampala-Entebbe expressway was US$ 2.315 million per lane kilometre while the similar expressway was US$ 1.204 million per lane kilometer” (…)”This is less than half of the cost of Kampala-Entebbe Expressway which is US$.9.261 million per Km” (…)”However, a review of the services provided by the consultant’s revealed duplication of activities as the originally recruited private firm serves the same purpose as the international firm” (P: 38-39). Comment: This here has been discussed and been put out there, but still proves the misuse of funds, especially when one of the reasons is that you have two companies that have the same role on the site, instead of only one, and that adds the price per kilometer of roads.

Mismanagement of funds under the Ministry of Local Government (MoLG):
“the diverted funds revealed that UGX.3,827,011,454 remained unaccounted for and UGX.635,621,910 was questioned due to inappropriate accountabilities” (P: 39). Comment: Unaccountable use of funds is a beauty and proves that funds have been used without waivers or accounted for; where it has been used is something that we can ask, but they could by Kit-Kat bars in Masindi or extra bottle of cokes in Lira for all we know.

Fixed budget allocation for essential medicines and health supplies:
“The annual budget allocation of UGX.218bn for essential medicines and health supplies to all health facilities across the country has remained constant since 2011/2012 despite the remarkable increase in the number of patients” (P: 42). Comment: That the money are stagnate while the amount of patience goes up shows quickly; why the hospitals doesn’t have the necessary medicine? That is the simple reason why they don’t have enough.

Regional coordination and monitoring framework for Northern Corridor Integration
Projects:
“For example amounts totalling to UGX4.2bn was disbursed to fund the power interconnection and the Hoima-Lokichar-Lamu oil pipeline. However, the protocols do not provide for regional coordination and monitoring as well as the audit framework to provide an independent assurance on the utilization of joint funds” (P: 43). Comment: Money to a project that don’t have a framework for the regional coordination and can’t utilization of the funds, that means they are just sitting in the fund, without any use or monitoring it.

Compensations of Project Affected Persons (PAPS):
“Review of the compensations for the Project Affected Persons (PAPs) on the two projects of Mukono-Kyetume-Katosi road and LPC Busega revealed inconsistencies in the names of the PAPs appearing in the Chief Government Valuers report and those compensated” (…)”A sum of UGX.1.3 bn paid without resolving the inconsistencies was questionable” (P: 44-45). Comment: That already over-expensive road project that has gone over margin and had issues with the contractors of the road-building. So that the government haven’t compensated the once that lost land where the road where built. Therefore the project is even more expensive, since this will be add-ons to the ones that already registered and billed for.

Budget performance-Budget shortfall:
“21 entities budgeted to receive UGX. 2,272,017,747,273, out of which UGX. 1,481,698,945,173 was received translating into a 65% out-turn for the financial year. This left a funding gap of UGX. 790,318,802,100 (35%)” (P: 55). Comment: This here proves how the budget is underfunding and not procuring from the Ministry of Finance, Planning Economic Development (MoFPED) to deliver the cash in-due time to the projects and other state entities that supposed to get funding to do their work. The ministry with biggest shortfall was the Ministry of Energy and Mineral!

MoFPED – Payment of avoidable interest on VAT:
“It was noted that as of November, 2014, the outstanding VAT obligations for BIDCO stood at UGX.744,420,170, included in this figure was late payment interest charge of UGX.168,747,557. Accordingly, a sum of UGX.700,000,000 was paid to URA towards settlement of the tax arrears” (P: 93). Comment: Bidco got to pay less to cash to URA then expected in a settlement, instead of paying everything they needed as they hadn’t cleared in their VAT. So the government was not getting what they we’re entitled so the company of BIDCO got off cheap.

Payment of the fourth instalment under ADB Subscription:
“It was noted that the payment of Uganda’s 4th instalment of UDS.1,293,299 which became due on 16th March, 2015 had not been made. As a result, the callable shares related to the missed instalment had been suspended in line with the Board of Governors resolution on the sixth general capital increase of the bank meeting” (P: 95). Comment: This here proof that they don’t take the place in the Pan-African Bank institution, only take the loans from African Development Bank, but not taking charge in paying dues to it.

Presidential Initiative on Banana Industrial Development (PIBID):
“It was noted that the PIBID project has been operating without an approved strategic plan. The strategic plan is supposed to guide the budgeting process by creating integrated link with the annual work plans which feed into the budget to ensure effective service delivery and achievement of set project objectives” (…)”During the financial year 2014/2015, the PIBID project had a budget provision of UGX.9bn out of which only UGX.2.7bn was released as vote on account and as a result, activities worth UGX.6,682,145,000 were not under taken. (P: 100- 103). Comment: 6,3bn was not released so that is under the double, but not triple of the ones that has procured to the PIBID.

Department of Ethics and Integrity:
“Directorate’s approved structure/establishment indicated that whereas 60 posts were approved, only 46 had been filled by the year-end leaving 14 vacant” (…)”that withholding tax amounting to UGX.4,662,524 due to URA was not withheld from seven (7) service providers and as such, funds were not remitted. Failure to withhold tax exposes the entity to a risk of penalties and interest charges by URA which may lead to nugatory expenditure” (P: 111-113). Comments: This here proves the defaults on the hiring of people in the department and also mismanage off tax.

This here must been seen as interesting; the report is big, so there is more to come. This here will be series with many pieces as the actions of government is to interesting to NOT be put on blast. Peace.

Reference:
Office of the Auditor General – The Annual Report for the Year Ended 30th June 2015 – Central Government and Statutory Corporations 30th June 2015.

11th Northern Corridor Integration Projects Summit – Joint Communique (17.10.2015)

MoU between the Partner States of the Northern Corridor Intregation Projects (NCIP) – Rwanda, Uganda, Kenya and South Sudan – March 2015