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Archive for the tag “Rising Debt Levels”

#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.

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#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.

Uganda Bankers’ Association: Position of Financial Institutions under the UBA Umbrella Notices Recieved from URA to Obtain Information of all Account Holders (08.04.2018)

Prof. Tumusiime-Mutebile: Bank of Uganda is Soundly Managed (05.04.2018)

Bank of Uganda’s Fresh report spells fear of the growing levels of debt!

This isn’t breaking news, this just facts at this point. The growth of debt is becoming a danger for the economy in Uganda. Because of the overspending and lack of donors to pledge for the needed government services, the bloated amounts of local government and the rampant cronyism. Is all combined making sure the extent of the economy gets hit, while the Uganda Revenue Authority, doesn’t have enough levies or enough taxes to gain enough for the shortfall of cash. The deficit is founded on loans, while the government are still paying interests and growing the debt ratio at a scale that is not healthy for the economy. Even if there is a future possible oil-revenue, it still has to become massive, to repay the debts of yesterday. When the amount of GDP goes to repaying and higher rates on the new loans. This is how to step-by-step killing the economy, by circling and re-issuing new debt, to pay off the old debt. Sooner or later, you need a scheme to fix it and start a Ponzi scheme to fix the economy. That is why there are ghost refugees and ghost projects to fix funding for the failing state.

Just take a look:

The provisional total public debt stock (at nominal value) as at end December 2017 stood at Shs. 37.9 trillion, representing an increase of 9.4 per cent relative to June 2017. This growth in the stock of public debt was mainly on account of a 12.2 per cent growth in public external debt (in Shillings terms), which continues to have the dominant share of 66.3 per cent of total public debt. In December 2017, external and domestic debt amounted to Shs. 25.1 trillion and Shs. 12.8 trillion, respectively, which is an increase of 12.2 per cent and 4.2 per cent, respectively, compared to June 2017.

The provisional stock of public external debt disbursed and outstanding stood at USD 6,902.7 million as at end December 2017, representing an increase of 10.8 per cent from June 2017 compared to an increase of 24.6 per cent in the corresponding period a year ago. The total external debt exposure (debt disbursed and outstanding and debt committed but undisbursed) amounted to USD 11,690.6 million as at end December 2017” (BoU, P: 16, 2018).

The present value of total public debt as a ratio of GDP stood at 28.1 per cent as at the end of December 2017, which is lower than the PDMF benchmark of 50 per cent. However, including committed but undisbursed loans, the ratio of total public debt to GDP is closer to the threshold. This poses a risk of higher exposure or failure to meet external debt obligations in case of exchange rate volatility and slow growth in exports. In addition, high debt may become a drag on economic growth by discouraging public investment due to the high debt service costs” (BoU, P: 17, 2018).

This sort of report should worry anyone who cares about the future, the growing debt is a bad sign. It is a sign that the National Resistance Movement and President Yoweri Kaguta Museveni, is putting the future at risk, because he wants to eat right now. Instead of balancing the budgets or trying to find ways to get fresh revenue for the shortfalls and deficits, instead he is borrowing for everything and with the lack of transparency, the funds are embezzled and gone in the wind. Therefore, the state can often borrow for something that only exists on paper. Which is even worse, because they are not delivering anything else than growing debt like it is a gifts. That they will not pay interests and pay it off sooner or later.

The amount of loans should worry, it really should. This sort of reports should shatter the Parliament, should reshape the government and should make the Finance Minister Matia Kasaija and Treasury Secretary Keith Muhakanizi, wish their were on a peaceful island drinking umbrella-drinks, while far away living on their pensions, and hope they are not getting a Q&A at the Plenary Session. Since this is damning and beginning of troubles ahead. Just not knowing how damaging it can be. Peace.

Reference:

Bank of Uganda (BoU) – State of Economy – March 2018

Minister Kasaija are borrowing more money, because of a shortfall he say!

Uganda is your country. When you’re writing a story, ask yourself if it is going to build or destroy Uganda. Is it going to bring peace or anarchy?” (…) “I’m advising my good friends of New Vision that for the good of your country, do not publish stories that are not true. My telephone number is known by everyone, call me. If I can’t respond then wait, because I’m also a busy man but I’ll respond. Let me repeat, for the good of your country, please don’t publish false stories” – Matia Kasaija, Minster of Finance.

I know, some people get touchy when stories comes out. Out of the woodworks suddenly the questions arise and people are thinking? Why? Why does the state borrow even more funds, is it needed even? How come the State, who is already borrowing heavy sums of money from all sort of bilateral, multi-national banking institutions suddenly need to borrow money from domestic sources. That question should be asked and need to questioned. Since the reality of the matter, isn’t what it is used to, since this government cannot even explain where the PTA Loans went. It is amazing how things are going, that the State can take up loans like this after already no accountability on the previous ones. The same minister is already questioned for the loans done with PTA loans, who knows what else that has gone missing, as the GAVI and CHOGM Funds of the past suddenly vanished into thin air, hard not imagine that this could happen again.

“Yesterday, Monday 19th February 2018 the New Vision Newspaper front page lead headline stated that Government is borrowing UShs. 700 Billion to pay salaries for public servants. I would like to inform the General Public that this story was an exaggeration of the proposed borrowing that I laid before Parliament. We borrow to a large extent to finance capital development and production. In my letter dated 9th February 2018; I submitted a proposal to Parliament seeking authority from the House, in accordance with the requirements of Article 159 of the Constitution of the Republic of Uganda, to borrow additional Ushs 736 Billion from the domestic financial market to finance the Budget for FY 2017/18” (Uganda Media Centre, 2018).

This money will go to “development and production”. We can wonder where that is, if it is the bills of Gen. Salim Selah hotels as the seedlings delivered by, Operation Wealth Creation (OWC) is lack-lustre at best. Who knows where all the pooled monies for NAADS are going, but clearly not all of it is not going to micro-economic benefits for the society.

Shortfall is clearly there and the weak economy, that has been juiced up and run like a drunk seaman. That is why as the last end of bottle of beer is there and the need to go down to the bar and buy more brew on credit. That is the ordeal of the day. It is not a narration by Morgan Freeman and a beautiful tale of forgiveness and hope. No, it is a tragic day of even more debt, this time internally and used by the state. Since they are embezzling and taking away funds from the public. This will create more pressure for liquidity in the banks who borrows to the state, as this is taking from their own reserves to bailout the state. Eventually, the state has to find other funds to pay back the banks.

It doesn’t take a wise to understand, that adding more debt, while growing debt and also paying interests is a vicious cycle. They are recycling loans and adding more interests and more debt to be repaid in due time. We can just pound on that and wonder why the state hasn’t made a budget that is within the reach of the economy, but the government isn’t like that. They are spending money like there are no tomorrow. Having one beer, another one and another one. Now it’s drunk and don’t want to lose the edge, the steam and the good feeling of tipsy. The state doesn’t want to get the hangover and deal with the cure. They just want to shug more bottles and hope no one notice. Peace.

Reference:

Uganda Media Centre – ‘Statement on the proposed government borrowing of UGX 700 billion #UGCabinetResolutions’ (20.02.2018) link: https://ugandamediacentreblog.wordpress.com/2018/02/20/statement-on-the-proposed-government-borrowing-of-ugx-700-billion-ugcabinetresolutions/

PTA Bank Loan Scandal: US$200m gone missing, you don’t loose that amount money, you spend it!

The government has announced plans to borrow US$200m from the Eastern and Southern African Trade and Development Bank (known as the PTA Bank)” (…) “It will, however, do little to ease the near-term pressures. The weak currency is pushing up the cost of external debt (the new PTA Bank loan will add to the burden of US dollar-denominated debt), while high interest rates are driving up yields on domestic securities. The government originally budgeted USh172bn to service external debt in the current 2015/16 fiscal year and USh4.8trn for domestic debt, but the actual outlays will exceed this” (The Economist, 2015).

In today’s exchange rate the loaned planned would be 727,749,571,653.20 Uganda Shillings, or UGX 727bn. So that means that the Minister of Finance Matia Kasaija cannot find the documentation for a huge amount of money. This isn’t a lost pocket or recite, this is like loosing bank. However, we know the context, the loans that came from PTA came within months of the General Election and the Campaigns. Therefore, we can imagine where the money has gone. That is just speculation, but National Medical Stores (NMS) has given some signs, that the PTA Loans was not for them.

In June 2017, the Public Notice of NMS said this:

This funding facility was the PTA Bank loan, which was later approved by Parliament on 26th April 2016. The record on the Hansard clearly indicates ugx. 68billion required to avert an impending crisis at NMS as one of the primary reasons why the loan “should be urgently” approved. If NMS was therefore not meant to get the ugx. 68billion as additional funds, then the Ministry of Finance, Planning

and Economic Development misled Parliament” (…) “NMS provided the contracts by a letter

dated 13th September 2016, and waited for disbursement of the money from PTA Bank. However the said funds have to-date not been provided. This fact was brought to the Ministry of Health and the Permanent Secretary/ Secretary to the Treasury on 27th March 2017. It is important to note that the PTA Bank Loan, was approved by Parliament on the understanding that part of the Proceeds would go to NMS to cover the sh.68billion deficit” (…) “We wish to restate that if this money is not provided, over and above the Budget for FY 2017/18, all Health Centre IIs, IIIs and IVs, including those of UPDF, Uganda Police and Uganda Prisons, shall not receive Medicines in the FY 17/18 except ARVs, Vaccines, ACTs and TB medicines” (NMS, 2017).

Although documents indicate that PTA Bank released the loan basing on documents submitted by the agencies, it was never remitted to them accordance with the agreed terms of the funding. Last week while requesting for a supplementary budget for NMS, Finance State Minister David Bahati was put to task to explain why NMS lacks funds to procure medicines yet the funders released the money in November last year. MP Cecilia Ogwal (Dokolo) wondered why NMS was going through a financial crisis when Parliament approved a loan request of $200m. During the meeting yesterday, members put Bank of Uganda officials led by the Governor Tumusiime Mutebile to task to explain whether the loan was released from the funders to the respective recipients. Mutebile told the committee that between October20th 2016 and May 23, 2017; BOU received $97.9m from PTA bank and transferred all the money to the Ministry of Finance Consolidated Account as instructed by the Ministry of Finance. “How it was used, is the ministry of finance to explain,” he said” (Karugaba, 2017).

So just part of the loans that trusted to NMS never came and never was delivered. The amount of funds needed the crisis in the NMS was not given. Therefore, the lack of oversight of the funds and the loans was evident even last year. Still, PTA Loan of 2016 has not been honored. The BoU will explain what happen after the money was released. So, it means that the documentation of receiving it is there, but what happen after is now gone. The NMS are clear, the BoU, but not the Ministry of Finance, Planning and Economic Development (MoFPED).

Just to put the loan in more perspective, even the World Bank described there in January 2017:

Uncertainties related to both local and external events, including the freezing of new loans by the World Bank and the impact of the results of the Brexit referendum and the US presidential election being the most significant causes of this uncertainty. This is notwithstanding the fact that the Government has contracted balance of payments support credit from PTA Bank to provide the BoU with sufficient resources to prevent spikes in the foreign exchange market when the need arises” (World Bank, P: 11, 2017).

However something that is striking is the Letter of intent written by BoU Governor Tumusiime Mutebile and Minister of Finance, Planning and Economic Development Kasaija. Who both prepared a statement, to build trust in the economy and the loans made by the government.

Who wrote this this to IMF on 18th May 2016:

Government requested a line of credit of USD 200 million from the Eastern and Southern African Trade and Development Bank (PTA Bank). The three year revolving facility has terms that are deemed more beneficial than those prevailing in the domestic markets at the current juncture and near future, so we plan to use these resources in FY2016/17 and FY 2017/18 to finance our deficits. Therefore, these resources will replace existing, more costly domestic financing, rather than expanding the available envelope. We will not use the loan in FY2015/16” (Kasaija & Tumusiime Mutebile, P: 6-7, 2016).

While this story started after Public Accounts Committee in the Daily Monitor this:

Two of the most prominent Banyakigezi – Bank of Uganda Governor Tumusiime Mutebile, secretary to the Treasury Keith Muhakanizi and other top officials in the Finance hierarchy are set to answer questions over how Shs340 billion of Shs720b ($200m) loan meant for medicines and rural electrification was used. They are going to be quizzed by Parliament’s Public Accounts Committee (PAC) with the vice chairman Gerald Karuhanga saying that Muhakanizi, Mutebile, Auditor General John Muwanga and Mr. Lawrence Semakula, the acting Accountant General have been summoned to appear before MPs on Wednesdays to “explain the whereabouts of the money because no agency has received anything.” Mr. Muhakanizi called the probe ‘misdirected’ because ‘everything was done properly and I will prove that with documents.’ He said the money was pooled into the consolidated Fund and spent on approved expenditures” (Daily Monitor, 05.07.2017).

On the 13th June 2017, Treasury Secretary Keith Muhakanizi tried to explain where the money went:

As explained above, all the funds disbursed from the PTA Bank Loan have been fully accounted for. ii No funds has been lost as the Monitor Newspaper has alleged. iii I thank the PTA Bank for quickly providing the funds to the Uganda government when needed. iv It is, therefore, professionally unacceptable for Monitor Newspaper which has represented at the meeting of PAC in Parliament on Wednesday 7th June 2017, to have published an incorrect story in its editorial of 11th June 2017” (New Vision, 2017).

However, the story is not ended in last year. The PTA Loan continue to haunt the MoFPED and the BoU. They both have answers to give. Now a few months later. The answer from MoFPED are differently. Because the Treasury suddenly promised documents in June 2017. However, we are in February 2018 and still not there. Even his own defense that was a notice in the New Vision. Now a half year later, we see the same story and the same issue in the Parliament. That the same amount of monies are not accounted for. The same actors are trying to defend it. The whole affair smells not like Teen-Spirit, but more of State House affair. Since, they are trying to defend the misuse of funds and loans in the timeline of Campaigning. That is what it seems. Since suddenly during campaigns and such the needs for funds is there. Paying off political parties and loyal commissioners. There are so many things to buy and needs. So much material, buses, t-shirts and bribes. You have to print massive amounts of money. In a way where the State House also always needs bigger Supplementary Budgets after the General Election of 2016.

Here is the movement today:

Mr Kasaija yesterday failed to present a personal statement detailing what went wrong with the loan but maintained that no money was “stolen” as he fought to save his job.“I request that we should give an opportunity to a government authority to find out where this money went. But I want to give assurances to this House that no money was diverted or stolen,” Mr Kasaija said. With the loan approved only after the Finance ministry changed its labelling, Speaker Rebecca Kadaga last evening ruled that she will today make a decision regarding the fate of the report, with the duos fate set to be decided today. “I may not talk much but I had engagements with Ministry of Finance over that money. I had engagements to remind the ministry that that money was partially borrowed for NMS. I had meetings in my office over that money,” Ms Kadaga ruled. The loan put the Executive and Parliament at loggerheads with the Speaker at some point ordering the Rules Committee to investigate Mr Kasaija over contempt of Parliament as the fallout escalated” (Arinaitwe, 2018).

So still to this day there is no proof of where it went. Even if the trail leads to two familiar faces, the MoFPED Kasaija and Treasury Muhakanizi, who both trying to save faces. This all seems like misused funds from the Consolidated Funds for Campaigning. Since it was not used for the Rural Electrification Funds or the NMS. Who was both in dire needs, but not important enough. The NMS has lacked it anyways, and not gotten the needed medicine.

Therefore, the two financial heavy-weights has to either forge the paper-trial, since the NMS and the other agencies hasn’t received the funds. They have been spent elsewhere. Suddenly missing and that Muhakanizi uses so long time, that from June 2017 to February 2018 is unbelievable. If you use that long time proving parliament where the funds went. You know there are some shady misuse of it. It has gone to all sorts of activity, to tear-gas, paying police officers to keep Besigye under house arrest and whatnot. Because it didn’t go the place where the MoFPED and BoU promised.

This the GAVI Funds and CHOGM scandal all over again. This isn’t new, it is just PTA Bank loan gone missing. You miss a shilling, you miss a book or even some keys. But you do not loose this amount of money. They have gone to a growing patronage and securing the President’s Private Plane or something. Peace.

Reference:

Arinaitwe, Solomon – ‘MPs plot to censure Kasaija over Shs700b’ (07.02.2018) link: http://www.monitor.co.ug/News/National/MPs-plot-censure-Kasaija-over-Shs700b-/688334-4294524-r1k3ls/index.html

The Economist – Intelligence Unit – ‘ Loan secured from regional bank’ (11.12.2015) link: http://country.eiu.com/article.aspx?articleid=63762990&Country=Uganda&topic=Economy&subtopic=Forecast&subsubtopic=Fiscal+policy+outlook&u=1&pid=923837876&oid=923837876&uid=1

Karubaga, Mary – ‘Finance makes U-turn on sh150b NMS loan’ (08.07.2017) link: https://www.newvision.co.ug/new_vision/news/1455202/finance-makes-sh150b-nms-loan

Kasaija, Matia & Prof. Emmanuel Tumusiime Mutebile – ‘Uganda: Letter of Intent, Memorandum of Economic Financial Policies, and Technical Memorandum of Understanding’ (18.05.2016) link:

NMS – ‘CLARIFICATION ON FUNDS RELEASED TO NATIONAL MEDICAL STORES (NMS) FOR PROCUREMENT, STORAGE AND DISTRIBUTION OF ESSENTIAL MEDICINES AND HEALTH SUPPLIES (EMHS)’ (16.07.2017) link: https://www.nms.go.ug/jdownloads/Press/NMS%20Full%20pg%202017.pdf

New Vision – ‘Clarification on Allegations that US$200 million meant to procure medicines for health centres and implement Rural Electrification Projects Went Missing’ (17.07.2017) link: https://www.newvision.co.ug/digital_assets/fa485f48-5a96-4b7b-be1a-3969e7a45cc3/9-Min-of-finance.pdf

World Bank – ‘Uganda Economic Update 8th Edition, january 2017 – Step by step Let’s solve the finance puzzle to accelerate growth and shared prosperity’ (January 2017) link: http://documents.worldbank.org/curated/en/662191486394023103/pdf/112621-WP-P161699-PUBLIC-UEU-8TH-edition-final-for-web.pdf

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