Opinion: It has now been 425 days without a Governor of the BoU…

“The appointment of the Governor is a prerogative of H.E the President subject to Article 161 of the Constitution of the Republic of Uganda, which states that; the governor, the deputy governor and all other members of the board shall be appointed by the President with the approval of Parliament. To that effect, if the Governor dies, resigns, or otherwise vacates office before the expiry of the term for which he or she was appointed, the President may appoint another person in his or her office, and the person so appointed shall hold office for the unexpired period of the term of office of the person in whose place he or she is appointed. In the absence of the Governor, the Deputy Governor will perform the duties of offices of the Governor and Deputy Governor until the new Governor is appointed. Indeed, The Bank is currently operating efficiently under the direction of the Deputy Governor. He is supported by a team of Executive Directors and technical officers. The appointing authority – H.E. will the right time and moment, appoint a Governor. So let us wait on him” (Bank of Uganda, 23.03.2023).

Since the 23^{rd of} January 2022, the Bank of Uganda has been without a Governor. The Deputy Governor has run the Bank since then. It has been 425 days or 1 year and two months without an appointed governor. That is really telling and compelling that the President haven’t appointed anyone for so long.

The Bank of Uganda is clearly not a priority, because By-Elections and getting people elected to office is coming first. The appointments of Speakers and other high ranking official roles gets pushed instantly. However, the BoU can just live without a head and a master at the helm. The Deputy can steer the ship and without question too, apparently.

You know the mission of the BoU when it states this:

“The Bank of Uganda (BoU) is the Central Bank of the Republic of Uganda. It was opened on August 15, 1966. It is 100% owned by the Government of Uganda but it is not a government Department.  Bank of Uganda conducts all its activities in close association with the Ministry of Finance, Planning and Economic Development(MoFPED). Bank of Uganda is responsible for the formulation and implementation of monetary policy as well as regulating & supervising financial institutions” (BoU – ‘Overview – About BOU’).

It isn’t just a run-of-the-mill organization, but a vital one. It is the place for monetary policies and uphold the national currency. The BoU is by just these things an important piece of the puzzle in the Republic. That’s why its extra weird that it has been without a leader or a governor for over a year.

This shows that the President is just waiting and waiting. That the President isn’t mindful or caring about the concerns of the BoU. When he cannot find a suitable character or leader to become the next the Governor. We know he kept the previous Governor from 2001 until his death in 2022. So, he enjoyed the loyalty and the work of the predecessor. However, that shouldn’t stop His Excellency from appointing another one.

“The appointing authority – H.E. will the right time and moment, appoint a Governor. So let us wait on him” (Bank of Uganda, 23.03.2023).

It is just foolish that the institution and national bank is waiting this long for a new governor… seriously this is bonkers. 425 days and counting without a head or the appointed chief. This just shows that the President doesn’t think this is important or that serious. Peace.

Opinion: 2 Trillion shillings is suddenly needed to cover the deficit

A letter dated to the 7^th November 2022 by the Minister of Finance, Planning and Economic Development, Matia Kasaija was leaked titled “Request for Proposal to Finance the Government of Uganda Budget for the FY 2022/23”. In that letter, the Minister is specifying the needs to borrow €500 million euros. When you convert this to Ugandan Shillings it ends up being 1,957,704,000,000 or about UGX 2 Trillion Shillings. That’s a lot of money that the Government and the MoFPED needs to borrow.

This is the definition of deficit financing. The cycle of bad loans in combination of lacking domestic revenue. The only way to be able to cough up funds for the short-fall in the short-term is to add additional loans. So, the cycle continues, the state take one loan after another. Loans upon loans to cover for the old loans. While also borrowing more money to be able pay expenditure and government expenses.

That’s why the idea that the MoFPED is asking for this now isn’t surreal. It is the bleak reality and the misfortune of a bloated government. The government has to many entities, to many representatives and a local government structure, which is too expensive. Expensive in the sense, that the government cannot foot the bills and don’t have the revenue to carry the expenses. That is living lavish and someone else is picking up the tab.

We already know the state is running out of loss, when the budget was forecasted with a huge leap of faith that grants and such would cover about 40% of the budget. That is telling and it’s really showing the lack of it when the state this early in the Financial Year needs another 2 trillion shillings loans to cover it’s expenses.

The MoFPED wouldn’t call for this loan and at these levels… if they didn’t know there was a short-fall or a lack funds. There is deficit and that’s not shocking. It is just worrying that it’s happening at this extent and is so normalized. While we are seeing the 11^th Parliament is following where the 10^th Parliament left off. Accepting loans after loans on development projects and other additional expenses, which only creates a huger debt-burden down the road. These roads or infrastructure projects has to be covered and they are not money generating enterprises. Therefore, the cost of doing it will be ten-fold in the long run. Especially, when you don’t have money for the upkeep or the ones doing the day-to-day works on it.

That’s why you know the latest revelation of this loan is just concerning. It is not a winning bargain, but a proof of mismanaged and lacking progress. When the state cannot sustain itself or be able to get a tax-base to cover these expenses. That’s because the state is wasting funds on paying for old debts and interests, which are far over the grace-period. Peace.

Bank of Uganda (BoU): Government has not failed to pay Bank of Uganda (20.09.2022)

The Government own 11 trillion shillings to the Bank of Uganda [and out of that 3 trillion shillings in advances from the last financial year!]

The National Resistance Movement (NRM) are ruining the economy. They have a deficit financing that is revealing to deplete all funds and all sources of revenue. That’s why in the Leader of Opposition statement published on the 13^th September 2022. The Leader of Opposition Mathias Mpuuga MP in his statement is showing a staggering issue of fiscal nature.

The Government of Uganda (GoU) or the National Resistance Movement (NRM) are now owning 11 trillion shillings. Out of those 11 trillion shillings, there is 3,03 trillion shillings it got in outstanding advances in the Financial Year of 2021/2022. Because of this, the Government of Uganda lacks fiscal funds to repay their own National Bank, the Bank of Uganda. It has taken money from one post to cover other posts, in advance, but it has no plan of returning these advances.

The addition trouble with this is that the International Monetary Fund (IMF) has stopped releasing funds or loans to the Government of Uganda until these advances are paid. That is again hurting the funding of the Government and the operational funds of the state. Since the IMF will not cover the deficits or the lack of funds in the GoU. The GoU is running so low that it’s not able to repay their own advances, which it created from the BoU.

This just shows how dire things are… this is only talk of 3,03 trillion shillings. The GoU budgeted itself with a 25,78 trillion shillings in domestic revenue in the budget of FY 2022/23, but we can wonder if the GoU has any of funds to recover or to spend on the advances in question.

If you wonder what mismanagement and how destructive a debt-cycle is… it is becoming very eminent that the NRM and the GoU has stretched it out. They are not able to get or find sources for fresh funds. The state is not able to get enough domestic revenue to even cover the basics. That’s why they are even shortfall on 3 trillion shillings to the Bank of Uganda.

This should be depressing and be worrying, but it is just another day in the Republic. The Value of Money is gone. The money and funds are just missing. Loans for development projects, day-to-day activities are just gone in thin air and they have no plans to repay them. If the NRM and GoU does this to its own Bank. What is it doing to the Multi-National Banks and Monetary Instruments it loans from on the regular?

That should put shiver down your spine. This is a sign of a financial downturn, a sort of financial self-destruction and possibly re-structuring of old debt. Because, the state cannot even carry the advances it took out in FY 2021/22. Peace.

Opinion: Museveni prefers his own rules…

“The economy is growing. The other day, I had some arguments about whether we have gone to middle income or not. We reaffirm. I do not know where the World Bank is getting their data from” – President Yoweri Kaguta Museveni (14.07.2022).

The former donor darling of the West and the Self-Styled President for Life, Yoweri Tibuhurwa Kaguta Museveni has yet again signalled the World Bank. That comes after the bank dismisses the claims of have becoming a “Middle-Income Country”. The Government of Uganda and it’s agency cannot trick the World Bank and their standards. Museveni can hoodwink his supporters and his fellow associates. However, the World Bank… not so much.

President Museveni is the sort of man that makes his own rules along with where his walking. His not the sort of fella to follow it himself, but expect everyone around to comply. He can talk of ethics and moral rights, but breach them himself on a regular. Secondly, laws and rules are for others to follow. He himself, not so much.

That’s why when there is stipulations and mechanisms for giving the stature of Middle Income Country from the World Bank. The Government of Uganda, and it’s Ministries should work to achieve that. Not just throwing numbers at the wall and hoping it sticks. That’s how this looks like. His just using figures and imprinted numbers to look extravagant. When the President should know that his far from achieving it.

The Republic cannot build a road without a loan, donation or sort of scheme to ensure funding to make it happen. The aid agencies has to come and intervene on the basics of structures. The bloated government structure is eating of the funds, the massive parliament and it’s expenses in combination of the State House and the Office of the Presidency. Is all accounts, which is having huge expenses, but not generating any sort of generational wealth or influx of foreign exchange into the economy. However, that is just draining the state budgets together with the interests on old loans and the growing debt ratio of the state. So, with that in mind….

I don’t know where his figuring out at the year of 2022 that the Republic has become a Middle-Income Country. Because, there is no signs of it. Unless, he has a screw loose or just wants to prove that he achieved something. Even if he sleep-walked to the destination and was more pre-occupied with destroying his political enemies. If the state has used half of the energy and resources it uses on locking up, monitoring and detaining political opponents. Maybe, it would have a shot of a better economy, but it is instead building prisons and buying tear-gas.

That’s why Museveni just making up the rules as he walks along. He thinks that’s how the world works, because he has done that for over 3 decades now. As President he has gotten away with it too and with little to no consequence. However, in this regard.. don’t expect the World Bank to budge. Because, Museveni needs the World Bank more than the World Bank need him. His a debtor and a man who needs grants from the World Bank. It is not the World Bank that needs validation from Museveni.

This is why this enterprise is futile. He cannot bushwhack this one. He cannot trick it and make it work. The shilling is the shilling. The economy and the finances is as dire as the people say they are. The Deficit financing and the lack of domestic revenue is a proof of that. His made up numbers and schemes to get grandeur isn’t helping either.

Museveni, you can chill on your farm and look after livestock. The sort of game your playing is only making a fool of yourself. So, do you want another rap? Peace.

The Art of Deficit Financing: Budget 2022/23 and the worrying affects of the growing debt…

“The proposed budget for FY2O22/23 hos increased to UGX 47.25 trillion from the approved budget of UGX 44.77 trillion in FY2O21/22. ln the proposed budget, recurrent expenditures amount to UGX 33.54 trillion (71%) while development expenditures amount to UGX 13.70 trillion (129%). Worryingly, the projected revenue collections of UGX 25.54 trillion cannot fund the country’s entire recurrent expenditures” (Opposition Response to the Annual Budget Estimates for FY 2022/23, 03.05.2022).

When you read the first numbers on the Budget for the Financial Year of 2022/23 you see a problem that has been a long lingering issue. The National Resistance Movement (NRM) and Government of Uganda (GoU) has done this for several of years now. The state has banked on loans and grants to cover the deficits. While the state is budgeting with a deficit financing method, which is far from covering fiscal funds by the lack of domestic revenue. That’s why the rising debt and the cycle of recycling debt isn’t making things better.

Just read this paragraph here:

“It is critical to note that debt management costs hove risen from UGX 8.58 trillion in FY2017/18 and ore projected to be UGX 15.94 trillion in FY2022/23. This translates to on increment of 86%. The costs take first coll on the budget to cater for interest payments, commitment charges, debt management fees and amortisation. Therefore, from the onset 33% of the proposed budget will

not be available for service delivery. instead, it will be utilised for payment of partial debt commitments” (Opposition Response to the Annual Budget Estimates for FY 2022/23, 03.05.2022).

Just seeing this number, as you see the lack of domestic revenue to cover the budget of 47 trillion shillings, which is only at the level of 25 trillions. While the project debt management is put to about 16 trillions shillings. That means most of the domestic revenue would be used to pay old debt. Unless, the state plans to take out more loans and recycle debt to pay the old debt. That is just pushing the problem further down the line and get more interests as well. Therefore, the state finances isn’t tricky anymore, but a tragic phenomenon. These sorts of numbers are getting closer to default and a possible debt trap at one point. As the state needs more loans to cover current loans. That is not how to run a nation and neither how to run a fiscal responsible government.

The numbers becomes even more striking:
“The advance effect of this astronomical level of borrowing is felt through interest payments of over UGX 5.5 trillion in FY2O22/23 rising from UGX 2.4 trillion in FY2017/18. An increment of 130%. This is coupled by external debt repayments that ore projected at UGX 2.4 trillion in FY2022/23 rising from UGX 589 billion in FY2017/18. An increment of 307%. These toke first coll on the revenue collection and reduces funds available for service delivery” (Opposition Response to the Annual Budget Estimates for FY 2022/23, 03.05.2022).

We see the debt management and now we see the rising interest payments are also doing the same. The ones that has been crying wolf and worried for the rising debt portfolio is catching up with the government. The Ministry of Finance and Planning and Economic Development (MoFPED) has failed to comply with the mechanisms and the codes of Public Finance and Management Act. Clearly, the Government and the all the Ministries has to be following suit.

These sorts of numbers should strike fear of a debt default and a crashing economy. The art of deficit financing … is now becoming a growing issue. The state cannot hide from this and this should worry the citizens. As there is nothing given that the creditors will be merciful or give way. They might … be vengeful and take collateral over failure to repay the debt. Peace.

A very brief look into the recent appointments of Permanent Secretaries

Yesterday, President Yoweri Kaguta Museveni has had his little reshuffle of Permanent Secretaries to the Ministries and Offices of the State. There wasn’t much juice to see. It wasn’t like he offered yet another Forum for Democratic Change (FDC) leader or stalwart to a position. No, Museveni just did more of the same.

Plenty of the secretaries retained their roles and continues to be “permanent”. This being Lucky Nakoybe and Dr. Kenneth Omona who is kept in the same office. Someone who is lucky and in good favours of the state is Keith Muhakanizi who went from the Minister of Finance to the Office of the Prime Minister.

The appointment of Dr. Ramathan Ngobi, the aide of Salim Selah, the brother of the President has been appointed to be the Permanent Secretary of Ministry of Finance, Planning and Economic Development (MoFPED). A clear indication of how family affairs mattes and this is why Muhakanizi was moved to another office.

The one that sent a begging letter recently to the President after losing in the election and not being appointed to a Ministry. The forever in the public eye, Adolf Mwesige was appointed as a Permanent Secretary as a Clerk in Parliament. So, the President has him still in his good favours, as he knows he will be loyal for yet another appointment.

All of the President’s appointments are more of the same. These are just the few I see worth mentioning. Museveni is recycling most of the same people. Just a few new faces, but these are known for the general public.

The NRM doesn’t change and neither does the President. This is just more of the same. It is just some changing chairs, but not appointing more qualified or better equipped people. No, these are hired after loyalty and not after merit. That’s why these folks continues to get retained and work like they do. Peace.