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Archive for the tag “Rising Debt Levels”

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

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Uganda: Fresh report states that the debt-service has grown 129% within one financial year!

 

The Republic of Uganda’s economy is really reeling, it cannot be sustainable as the Government of Uganda is growing their debt like there is no tomorrow. While the fiscal growth is substantially lower than their rate of debt-service. As the growth of debt combined with lacking growth to substantiate the shortfall.

In addition, with the knowledge of added expenses, growing shortfall of funds in the upcoming Financial Year of 2019/20 and the election year of FY 2020/21. There will be more add-ons on the need for debt service, as the state already had loans outstanding, which the grace period ends and the debt-service begins on. Therefore, the amount of loans will transpire even more, than what is in this report. The endless cycle of debt and growth of it, is worrying, as well, as the state thinks that the magical wand of oil-money will clear this debt. Even as the first operational oil field and such has been postponed yet again.

Just look!

“The total Government of Uganda external debt service by end of FY 2017/18 amounted to US$275.75 million, which was an increment of l29% compared to US$120.62 million in FY 2016/17” (…) “Debt service of Uganda’s external debt is on the rise and outstripping growth of the country’s income, currently at 6%. This poses risks for future debt repayments, especially as the country continues to acquire external debt at less concessional terms, especially to finance the oil development programme” (P: 6-7, 2019)

“It follows that as interest rates increase, the debt service obligations of Government also increases. The rise in external debt interest costs attests to the fact the government is increasingly contracting non-concessional debt, which will increase the repayment burden” (P: 24, 2019)

“However, this may not be the most likely scenario, as most projects have been discounted and some excluded in the macroeconomic framework. With the development of the NDP III, additional project and other pipeline project related to the oil developments and other infrastructure, will increase the financing requirement of government in the medium term. The inclusion of the above projects will re-classify Uganda from low risk of debt distress to moderate risk of debt distress or high risk if the export shocks materialize. A downgrade would have significant implications for the program with the IMF, where Uganda’s credit risk rating will worsen; implying that accessibility of nonconcessional financing will be limited. This will limit credit to Uganda to only concessional and grants financing.” (P: 28, 2019)

You don’t need to smart about it, as the state has bigger budgets with higher shortfall in the economy, combined with debt service and higher interest payments on the growing amount of loans. You know sooner or later, the economy will tank, as the fiscal responsibility is taken for granted and that fresh funds are lacking, because these are taken out of the economy to finance the payments of the old debts. Instead of generating growth and actually naturally grow the economy, by spending and investing as a state. The money is taken away to service debt, instead of building the state. That is what they are doing and at a alarming rate. Peace.

Reference:

NEC1-19 – ‘REPORT OF THE COMMITTEE ON NATIONAL ECONOMY ON THE STATE OF INDEBTEDNESS, GRANTS AND GUARANTEES’ June 2019, Parliament of Uganda

Bank of Uganda: Monetary Policy Statement for April 2019 (01.04.2019)

Bank of Uganda: Monetary Policy Statement for February 2019 (07.02.2019)

Bank of Uganda: Monetary Policy Statement for August 2018 (13.08.2018)

#UGBudget18: Museveni – Was this a budget speech?

I don’t know where start or where to finish. As I am not a tool of propaganda and here to make the President look like super-star with a brilliant mind. Warning the media, banning Police Bond for Killers and all other spats of nonsense, which has nothing to do with the budget. It is just like he has defend himself. As President, he even attacked MPs and their attitude. They were ATMs to their voters, something he is and been called himself. He even recently tried to bribe his MP into position in Rukungiri. So that the President has short-term memory is evident.

You know he is in self-hostile territory, when one of the biggest donors and on of the biggest media owners Aga Khan gets a warning. Surely, the President cannot handle journalism and only care about praise. He cannot manage that people are looking into the growing debt. As this budget alone is 10 trillion back-pay of loans of the 32 trillions spent. While there is shortfall and growing deficit and the donor funds are still dwindling. Therefore, the need for loans to cover the shortfall is needed. So what the President is creating is a debt-trap. He can say he managed that since he used 27 guns, but different to blow former-leadership into oblivion and actually being able to repay your debt.

I am just awaiting the salute and the simple minded changes he is progressing into middle-income country, as the President is showing less intent of doing anything. He just talking about nothing and everything. Quoting the bible and acting holier than the pope, while warning everyone else. Not that it is securing anything. He will secure it all, as he is the man who has the answers. If this is getting boring, is that he has done this for 32 years and counting. And has not changed, other than his face and tenure of hair on his head.

It is like he doesn’t care and just say whatever that is on his mind. No one will fact-check or really check the relevance, because why mind. Its a deluded old man, who has been so long in power, that the ones going against are either in jail or possibly monitored by the sleeping police officers his been talking about. He is again blaming the mindset of Ugandans. Because there is never his fault. He has just been running the enclave and people gotten lazy, awaiting handouts. Not like he has delivered any of his pledges, built institutions or prosperous organizations for the citizens. That is just his lack of mindset and work ethic.

Therefore, there is no need to really dig deep into the speech. It is mere facade, a mere forged mirage of utter nonsense. A speech rampant of lies and warnings. If your a journalist or MP, you should feel offended. Because he expect to be praised, while your supposed to carry the nonsense from him.

The saddest part is that he takes no responsibility, that he has no accountability or no common sense. That this man just continuing to utter these words, like a word-salad of mockery of intelligence. While expecting that the spinning-machine of his party, his spokespersons and friendly media will make him look a giant. They will eat the crap out of it and make it look like gold, but its only fools gold. Not worth the bling its made off, better to buy a Rollex in Wandegeya, it will at least fill your tummy for a moment. Because the fools gold will be worthless and just ready for the bin.

President Museveni has no cards to play or nothing to say that changes the narrative. Only 1986ing the world and hoping he can get away with it. However, the debt trap should worry him. Nevertheless, it is the next generation that will pay-back it and he will be dead by then. Peace.

#SOTNU18: Importing too much and Exporting too little; What could be the reason?

“Yet, as our Baganda people say, “Omugo oguli ku murirano, tegugoba engo” ─ (the stick in your neighbour’s house cannot help you to fight off a leopard)” Yoweri Kaguta Museveni at the State of the Nation, 2018 (06.06.2018).

I have stopped after a years to look and breakdown the whole speech of President Yoweri Kaguta Museveni. Because no one should waste that amount of time, unless your Don Wanyama, Tamale Mirundi or Andrew Mwenda. The rest of the random average Joe’s just shouldn’t waste our time with that. After 32 years, what new thing can he re-up and said, what sort of pledge haven’t he pulled out off his ass. Everything has been said, its just rewind of the previous years. There might something amazing, but you should doubt it.

That is why I will focus the passages on the growth to become a Middle-Income Country:

I hear so many people talk about the attainment of the middle-income status by Uganda. The main problem here is, actually, the problem of Uganda importing too much and exporting little. The GDP per capita today is US$776. To become a middle income country, you need, at least, US$1,006 per capita. This money is calculated in Dollars. Too much importing and too little exporting undermines the progress to a middle-income status. Therefore, Ugandans, please, buy Ugandan; travel Ugandan; health-wise, be treated in Uganda. The government will facilitate its part as outlines in this speech. All I have said above is about the economy that is being developed to create wealth and jobs for the Ugandans as well as widening the tax base for the State of Uganda. At the same time, this bigger economy provides more goods and services for Uganda’s domestic consumption and for exports. Your NRM, always looking ahead, has already negotiated and arranged with our brother and sister Africans to ensure the market integration of Africa (EAC, COMESA, CFTA), so as to provide capacity for the absorption of the greater supply of goods and services produced by the Ugandans awakened to realize their potential as we also buy from our brothers and sisters in Africa, as we all take advantage of the huge collective market of Africa. Besides the huge continental market we are creating with our African brothers, the NRM always never missing in action when it comes to African issues, we have also negotiated for third party market access to the USA, EU, Chinese, Japanese and Indian markets, in varying degrees. Hence, ladies and gentlemen, the NRM has addressed or is addressing all the factors that are necessary to open the gates to the Ugandans engaged in wealth and jobs creation. Let everybody, then, play his or her own part” (Yoweri Museveni – State of the Nation, 2018, 06.06.3028).

The ironies are staggering as the economic policies, the industrial policies and agricultural outputs of the Republic is all in the hands of Museveni. If the NRM wanted to have trade surplus, they would have put in work and made sure the industries, the agricultural output and the end-product that they wanted to put into the world market. That is if the NRM had actually cared, because most policies seems to be short-term and for the short-con, not even the long-con. The projects and projections are for short term gains, not building things.

The specialized boards for the promotion of Ugandan produce and products has been lacking. Also maybe that they haven’t configured to the standards of the world-wide markets. That is why the coffee is sold as beans and not locally branded robusta. It is blended into random blends of foreign corporations instead of being locally grinded and packed ready for the big multi-national supermarket chains. Instead they are sold with least profits as the produce and not as the product. That is what is wrong with the ideas of Ugandan business. They have not thought of how to get value for the produce. This is all because the business is fixated on quick profits, but not going the extra mile.

That is because the NRM have no incentive to this or to try to do it. If they had incentive and any ideas of this. They would have figured it out and industrialized the agricultural output. Neither is put in the cash and the investment to build juice-factories as promised in Amuru, That has been promised for so long, as people are giving up in Katakwi District. This is the reality.

Therefore, listening to the President bitch about the lack of modernization and industrialization of the Republic. Is his fault, as he has put in the work and the ability to change the business models. That is because the way the state does with investors and designate cronyism. Where the businessmen have to political connected and make sure to grease the wheels to get it running.

It is a nice idea to get Ugandans to buy Ugandan products. But then you have to deliver good Ugandan products to fair price, also make sure it is competitive. There are lacking issues and basic need to make sure the possible produce could create added-value. Instead the quick profit and direct exports is the reason for lack of more currency. That would help the republic and make more money without to heavy investments, while using what they already produce plenty off.

While the state has to figure out if they want this, because this could help them to gain another monetary gain. But they doubt they will, because right now, it is the short-con and the quick-fix instead of actually building something for the future. Peace.

Opinion: NRM, It is hard to see Middle-Income Status coming quickly!

He explained that the NRM manifesto is anchored in Vision 2040 and the second National Development Plan. It commits to deliver Ugandans into middle income status and to ensure sustainable development” (Mubiru, 2018).

Well, it is that time of the year. To prove the National Resistance Movement (NRM), that their empty promises. Because when you collect the news together. It is easy to see how things doesn’t add up. If the NRM was on their way to sustainable development, like Prime Minister Ruhakana Rugunda talked about earlier last week. Then all of the news coming wouldn’t fit. The narrative cannot be growth and development, when all of these issues are happening at the same time. It doesn’t fit. The glove has to fit the hand. The three things that doesn’t add up is the missing funds for the Presidents own Village Poverty Program, relief food for Karamoja and also a missing sugar factory.

Village Poverty Program:

State House has said it needs at least Shs 5bn to roll out the model village poverty alleviation initiative by President Yoweri Museveni. In the request contained in the Ministry of Presidency’s policy statement and budget estimates for 2018/2019, State House said the existing Shs 1bn budget for the project is too little and therefore a 500 percent increase is vital. The current Shs 1bn has only managed to establish small scale commercial agricultural farms in 21 model villages. The country, according to Electoral Commission of 2016 data, has 59,700 villages” (Okello, 2018).

Donate relief food:

The government of China has donated food aid worth $5 million (about Shs 18bn) to the World Food Programme (WFP) to support a feeding programme for vulnerable groups threatened by malnutrition in the Karamoja sub-region. More than 2000,000 people mostly school going children, infants and mothers are threatened by malnutrition in Karamoja according to official figures” (Lyatuu, 2018).

No existent Sugar Factory:

It is five years, since Atiak Sugar Factory under Haryal investment Holdings Limited was rolled out in Amuru District, to commence sugar production, but has since stalled, leaving a number of sugar cane farmers stranded. “The people shifted from food crops with hope to earn from sugar cane. Out growers are now worried that the factory will not take off in time to fully untilise the 4,000 acres planted,” reads part of their petition. Kilak North MP, Anthonu Akol who read out the petition to the Speaker said that the farmers are stuck with no factory to sell their sugarcane and questioning why the minister of Finance, Matia Kasaija, sold to them hot air” (Kyeyune, 2018).

All of these issues shouldn’t be at this state, if the state was seriously developing and on the way to Middle-Income status. There are so many issues that is missing, not only the ghosts and the added debt ratio in the budgets. This is all minor measures in the bigger picture, but it proves the lack of governance and accountability, when the state can grab land in Amuru district, but never deliver the promised the factory. As this been going on for years.

That the middle income cannot be fulfilled when the village poverty is so prevalent, that the scale is not fitting the needs. You know that the state lacks resources and well-funded plans to even achieve this. The President should have made sure and ensured the progress and at the planning stages, it this is his program, to be sure about the right amount and needed facilitation to deliver to the needed villages. That is apparently a mixed bag wooh-ha and nonsense.

Last but not least, is the donating of food to Karamoja, which in it self a sign of lack of progress. When your not able to meet the needs of your population and have good enough agricultural policies and output to feed yourself and your own kind. You know that the Middle Income Status is far-fetched, when this is still an issue. You know there are miles afar from the promise land. That the NRM and the President is clearly not delivering. There is no excuse in the book, that can fix the grandest issues of not being able to feed all communities and districts of Uganda. You know they are far from Middle Income, when China has to donate food to you….

Enough of the nonsense. Peace.

Reference:

Kyeyune, Moses – ‘Acholi sugarcane growers seek Parliament help over stalled factory’ (16.05.2018) link: http://www.monitor.co.ug/News/National/Acholi-sugarcane-growers-seek-Parliament-help-stalled-factory/688334-4565238-ueostj/index.html

Lyatuu, Justus – ‘China donates relief food to Karamoja’ (19.05.2018) link: http://observer.ug/news/headlines/57707-china-donates-relief-food-to-karamoja.html

Mubiru, Apollo – ‘NRM Manifesto: The road to modernity’ (18.05.2018) link: https://www.newvision.co.ug/new_vision/news/1477948/road-modernity

Okello, Dickens H. – ‘Shs5Bn Needed for Museveni’s Village Poverty Alleviation Program’ (21.05.2018) link: http://chimpreports.com/shs5bn-needed-for-musevenis-village-poverty-alleviation-program/

Opinion: Every crony wants to eat; now the Ex-MPs wants a grander treasury chest!

The National Resistance Movement (NRM) is something special and unique, their supposed vital role in society and their added liberation struggle, should in consideration make sure the society was better off after their reign, not being a burden after the NRM MPs leave office. However, they are just figuring out new ways to eat. Now the fallen MPs, the ones who served and had a majestic pay in Parliament want a bigger slice of the cake. Because getting 30 million shillings in pensions isn’t enough for this big-shots. They need more, they we’re representatives and honourable, they cannot go back to ordinary life after that.

The reports that they are poor and unemployed, shouldn’t make Museveni give them favors, he already have over 163 Presidential Advisors, a Cabinet reaching over 60 ministers and the space inside the Parliament isn’t big enough for everyone staying there at a Plenary Session. Therefore, this is just another waste. This is just more greed, from the previous Members of Parliament, who most of them at one point gave more salary increases and perks for themselves. Every single parliament of late has done so. They are getting suits, they are getting cars, they can spend allocated funds on foreign trips, they are paid for if they need health care abroad. Nothing is untouchable for these fellow brothers and sisters.

Now they expect to get a 100 million shillings add-on from the President, in way of a Presidential Handshake, paying them off, as you may, because of their previous engagement. Not that the ones now are getting the same, they we’re getting extra funds for voting on the age-limit and giving Museveni life-presidency. These people most likely we’re part of abolishing the term-limits and go their kick-backs for that.

That is why NRM is so special. So unique, so vibrant and fresh, it is the testament of greed. They we’re while in office, eating millions upon millions and getting kick-backs for voting correctly on the right laws. If they had been smart, they would have put the extra in the bank and in funds. To secure wealth for the years to come, if they cannot go into the private sector or get other jobs in their own districts. However, they we’re busy eating like there is no tomorrow. In addition, even when they have a giant pension package compared to the fellow citizen, they expect to nearly triple it. From 30 million shillings to 100 million shillings. That is insulting, to everyone else in the Republic who goes from hand to mouth.

They we’re supposed to represent the district, the people, the citizens, but their actions, time and time again. Shows, that they we’re only there to represent themselves and their tummy. It is a sad affair. It shows the greed and the lack of understanding of their role in society. Their lack of acceptance of their part of the play, which they anticipate to eat even more of the state. That has already doled dozens of millions on them, when they were representing.

Now they are just citizens, they are not honourable anymore, I am sure that the President can appoint enough advisors to have about 200 of them within next year. To fill the quota of former MPs. However, what they guide him about, expect being another crony on his payroll. Who knows, maybe they can all become deputy and chairpersons under the RDCs. So they get something to “do”. But that is still just a waste of public resources, just like giving them triple salaries. They shown now that they are not there for the public, but was there their tummy!

National Remittance Movement, that is the real NRM. Transmit funds from state reserves to private accounts. Handshakes, bribes, graft or overzealous pricing on government services. All of come into play and these former Members of Parliament knows that perfectly well. Peace.

The Creations of districts: Shows growing expenditure, not only at Parliament, but also at local level!

Local governments are supposed to be financed with 30 per cent of the national budget but this has never been possible; sometimes it is as low as 15 per cent. This continues to stifle service delivery,” said Mr Cuthbert Felix Esoku, the Mbarara District chief administrative officer” (Mukombozi, Rajab – ‘Government lacks political will to improve district funding, say local leaders’ 09.11.2017, Daily Monitor).

Sometimes I wonder, if the government understand what it does, or if the sins of the 9th Parliament is hitting the 10th Parliament hard. Also, that the President is lax on caring, because he wants his cronies well off, just like former Prime Ministers and Vice-Presidents are getting 20 million Shillings Yearly as a Pensions, without the perks they are getting too. Therefore, the silence from them, as they are highly paid without doing anything for the NRM. Their ills and the growing Local Government is costing. Not only in Parliament, but in the districts itself. Today, the issues of Parliament is hurting, but none is addressing the local issues. Which is the reason for the lack of money and needed supplementary funds for the Members of Parliament (MP). Take a look!

Parliament is seeking Shs 3.3 billion for the emoluments of twelve more legislators starting July 1, 2018. According to the parliamentary service commission, the number of MPs will increase from 453 to 465 at the start of the of 2018/2019 financial year when new districts and municipalities come into effect” (URN – ‘ Parliament seeks Shs 3bn for 12 new legislators’ 22.04.2018, The Observer).

I am amazed about the amounts of districts and the rise of cost. This not only the share Members of Parliament, the lack of space for their seats and the possible rebuilding of the Chambers. Because the amounts of MPs wasn’t built for this amount of people at the same time. Therefore, the Parliament needs funds and budgets to fit. That says the foolishness of the new districts in that regard alone.

We know, by recent news that the state cannot afford to hire civil servants to Local Government that as is, and that is without the new enclaves or districts created by the state. That is not just the salary of the MPs whose recently elected, while the Electoral Commission are stretched in getting the by-elections and the MPs their seats. That is just beginning, as the growing debt and the interest are growing. While the Parliament is lacking space and the infrastructure and the local hires are not there.

That the state has under President Yoweri Kaguta Museveni gone from 33 districts in 1986 to about 136/7 after 1st July 2019. Which was ushered in July 2015, a year before the General Election 2016 and fitted the needs of the National Resistance Movement and keep up with pledges made by the President. So every single town is a District and none is inter-connected it seems. Every hill and top is Sub-County. Just the way NRM Regime like it.

In 2017, the Parliament gave a tender about 260 Billion Shillings to ROKO to build a 500 seat size of chambers there. So the payments and monies are there, when needed, as the state can configure and find money for this. But they are usually lacking funds for the civil servants and for the ones serving in public offices in low-level positions. Even not hiring the needed ones in the districts, schools and so on, as there are thousands of jobs that the Ministry of Public Service is not allowed to hire by direction of Keith Muhakanizi, the Secretary of Treasury said there was no funds for that.

But now, suddenly, just like there is funds to athletes, there are funds for new MPs. This is happening as the new possible Social Media tax and also the Tax on Mobile Money. So not like they don’t have projects to use it on. It is all of them districts that needs mansions for District Police Commanders and Residential District Commanders, who all need a palace to live in. Also the need for a local government building and facilities, they cannot run the district from a shack. If that means all citizens has to bleed, that is okay, they deserve this cronyism.

This is the pile of bills made by the amounts of districts, the running costs isn’t just the 3 billions supplementary for the MPs there, it is the new civil servants, buildings and develop these districts. Unless, they want to be ghosts on the paper like schools, teachers, students, refugees, roads and development projects in general.

So, if you don’t see the issues I see, then your either in on it or your just thinking. Its a lost cause, because the President is ushering it in and sanctioning it. This to feed off his cronies and making sure they get jobs locally. Instead of building good districts, he has just chopped them in two or made new ones. So the development and local changes can be made right before elections. That to secure his own candidates for the Parliament too. So for the President its a win-win.

Nevertheless, this has clearly stretched the budgets, the need for public officers and civil servants, as well as more appointed local leaderships. All of these needs salaries and pensions, which means the grows and becomes more expensive with the growth of expenses like these. This is happening at a rate and time, as the growing debt and interest rates are rising. Therefore, the negative affects of it all needs to be put in perspective. However, that is not interesting to the NRM as they cannot question their king, without insulting his intelligence or his will of staying there. That is shown too…

Well, this was a bleak and sad story, but needed this perspective, since the cost of 136/137 districts should be discussed, not only the cost of MPs and the cost of building a new chamber at the Parliament. Peace.

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