MinBane

Helt ute av sporet (Okumala ekigwo okulyaku kya okuziga)

Archive for the tag “SGR”

Uganda: Civil Society Position on Tax Revenue Measures for FY 2017/18 (21.04.2017)

Report from the MoFPED shows the growing Ugandan debt by June 2016!

Again, the Ministry of Finance, Planning and Economic Development (MoFPED) dropped another report on the fiscal policies and the fiscal health of the economy in Uganda. The National Resistance Movement (NRM) have created this environment as the growing debt and growing interest payment comes with their planned debt rise. Still, the PriceWaterhouseCoopers spelled gloom earlier in the year, as this report was dropped on the MoFPED web page today. Even if the Report was spelled out in December 2016. It is if like the NRM didn’t want this to spelled out early. Since the numbers aren’t compelling of an arts piece, more issues… just take a look!

The stock of total public debt grew from US$ 7.2 billion at the end of June 2015 to US$ 8.4 billion in June 2016. This represents an increase from 30.6% of GDP to 33.8% over the two periods. The increase was largely on account of external debt, which grew from US$ 4.4 billion to US$ 5.2 billion over the period. Domestic debt increased from US$ 2.8 billion to US$ 3.2 billion” (MoFPED, P:V, 2016).

That the debt are growing quick, as the public debt grew with US$ 1.2 billion, that the percentage of GDP went up with 3,2%, the external debt rose with US$ 0.8 billion and the Domestic debt went up US$ 0.4 billion. All of these numbers show the amount of monies that the Government are adding on their debt, as the UNRA and the development projects are suspended by World Bank. So the Infrastructure development can be questioned as the growing debt, as the government must have other uses of the growing and scaled up debt. Since the transparency of the economy isn’t there and that the sanctioned bills comes from the State House. Just look at the growing interest rates as well.

Interest Payment as a percentage of GDP stood at 2.2% as at end June 2016, up from 1.9% as at June 2015. The increase is largely explained by interest payments on domestic debt, which grew from Shs 1,077 billion in FY2014/15 to 1,470 billion in FY2015/16. There was a significant increase in the weighted average interest rate of Government debt; from 5.9% to 6.5% in June 2015/16. This followed increases in the weighted interest rates for both domestic and external debt, from 13.6% to 15.3% for domestic debt and from 0.9% to 1.2% external debt. As interest rates increase, so do the debt service obligations of Government” (MoFPED, P: 4, 2016).

The difference between June 2015 and June 2016 the percentage has grown with 0.3%, the domestic interest rate grew with Shs. 0.393 billion. The Interest rate alone went up by percentage 0.6%, as the weighted interest rates went up 1.7%. The key sentence that the report wrote and I repeat: “As interest rates increase, so do the debt service obligations of Government”.

That idea isn’t only on the interest payment percentages are running higher, but as the debt goes up, the interests goes up. So the Debt Service Obligations are going up for the Government. This is a natural outcome, that the obligations for the state goes up with the amount of debt it rises. So the government can try to portray this is controlled, and to one extent it is under control. Still, the growth in this regard proves that the NRM regime are pilling up debt and increasing their debt, as well as interests. In the end this will make the state worse. Especially knowing that the energy dams have been built poorly and many of the expensive roads haven been fruitful. This is development that the growing debt is being used to…

So the NRM regime and the Ugandan government isn’t believable… the rise of debt and interests show’s the current state of affairs. Even if the percentage is after plan, the government still has to take charge and make sure they can pay back both the debt and interests. Peace.

Reference:

Ministry of Finance, Planning and Economic Development (MoFPED) – ‘DEBT SUSTAINABILITY

ANALYSIS REPORT 2015/16’

Uganda: CSBAG – “Reducing Wastage and Curbing Inefficiences to Finance our Priorities for the FY 2017/2018 (09.04.2017)

Uganda: UPC Calls for Economic Reforms (05.04.2017)

Opinion: Hon. Kyambadde revealed what was important at the State House!

“I resigned from State House Uganda, because there were so many powerful people and power centers, and for example the sons and sons-in-law of first family would bring in some foreign businessmen and despite being my duty to clear them, i could not say anything.”Amalie Kyambadde (On Face Off on NBS TV Uganda, 12.03.2017).

Hon. Kyambadde who is now her second term as Member of Parliament for Mawokota North County in Mpigi District after she left or resigned her position Private Presidential Secretary at the State House, she had the PPS position from 2001 to 2010. Therefore, you see that she went to be elected as MP, instead of working in the State House.

This is very interesting as she knows the perks and working ethics of State House, as she spent nearly a decade in the State House and worked closely with the President. So the knowledge of how it works, she knows perfectly well. As the speculated issues inside the State House came out to the public in 2015:

“The wars in State House, an insider told us, “were always there but they came out in the open when Amelia (Kyambadde, the Trade minister), left State House.” (…) “The source said Ms Kyambadde exerted considerable authority over the presidential palace, hardly allowing internal wrangles to burst open into the public domain” (Mukiibi Sserungjogi & Okuda, 2015).

So there have been revealed things before, but today what she said on NBS have been sort of common knowledge, as the pictures of Hamis Kiggundu, Ruparelia Sundir and others who certainly has conducted their business transactions from the State House with deals between them. The development and acceptance of big-business happens directly inside the state. As well as the decrees and licence to do business, so the words of Hon. Kyambadde extend this idea and verifies what has been commonly known, but not yet said by former internal workers at this capacity.

That she also shows the turn-over of family business inside the State House, their own ideas bringing their connections to the State House, shows the allegiance of state is within the family and not with the procedures of the state. That can be said by the negotiations that even happened a few years ago:

“Byabagambi, who attended the meeting at State House, as did officials from CHEC and the Ugandan attorney general, has accused the MPs of receiving bribes from CCECC to frustrate the project; two of the MPs held a press conference on Monday to deny the accusations and to accuse the government of overpaying CHEC” (Rogers, 2014). So the Chinese investors and entrepreneurs had direct meetings at the State House, so the Attorney General and the MP who oversaw the Standard Gauge Railway project at the time. So the ties all connect to the State House.

In 2011 the State House had made another deal as report back in 2013:

“The Auditor General’s report for the year ending June 2012 notes that there was unfair treatment of bidders ahead of the Presidential swearing in Ceremony in May 2011 where one bidder was dropped for no particular reason” (…) “This was despite the fact that other bidders such as Country Safaris were considered to have the same problem as Africa One Tours and Travel because they could not meet the specifications of the required manufacturers” (…) “In their response, State House officials stated that they had been given a short period within which to prepare for the swearing-in ceremony yet they did not have a set date and there was no money for the function” (Athumani, 2013). So back in 2011, it wasn’t the ministries task to hire and secure the cars for the President, but State House officials. This shows the controlling aspects of the State House, not only the business being decided inside the State House.

This is just some proof of some of the business activity that happens at the State House, surely more than meet the eye and that has been reported about. Certainly, the Museveni family and kin has done more business there than we can ever know. However, there will only be indications until more is revealed or if the leaks from the State House, as it haven’t been controlled as much as it was under Hon. Kyambadde. Peace.

Reference:

Rogers, David – ‘Ugandan president tells Chinese construction boss: ‘If you are not willing to co-operate, leave’ (15.10.2014) link: http://www.globalconstructionreview.com/news/ugandan-pre3side8nt-tel0ls-chine6se-constr5uct2ion/

Mukiibi Sserunjogi, Eriasa & Okuda, Ivan – ‘Making sense of the fight in State House’ (08.02.2015) link: http://www.monitor.co.ug/Magazines/PeoplePower/sense-Museveni-Mbabazi–State-House/689844-2615958-8eg2uaz/index.html

URN/ Halima Athumani – ‘State House Officials Quizzed Over Museveni Swearing-in Vehicles’ (27.09.2013) link: https://ugandaradionetwork.com/story/state-house-officials-quizzed-over-museveni-swearing-in-vehicles

PwC report spells gloom over rising debt in Uganda!

Ugandan shillings

A report released by PricewaterhouseCoopers limited has delivered this month is clearly seeing what others has seen with the economic situation and the use of funds by the National Resistance Movement (NRM) and their regime. This report by a company which is an international company who works with other businesses and civil society organizations who needs economic advice and advisory services for taxes and such; therefore the report from PwC on economic situation is telling. Their speciality on their outlook will be saying with auditors and financial analyst whose words means a lot. They are professional analysts in this field are writing and saying this on the economic climate. The Economic climate is worrying and that has been visible. The liability of the growing debt in the republic has been a hazard together with the lacking internal revenue for the state as well. Just take a look!

Sluggish economy with higher debt:

“This bulletin comes at a very crucial time for the Uganda economy when growth is slowing down, private sector credit is on a decline, consumer demand is low, implementation and execution of critical public infrastructure projects is very sluggish, and the public sector debt burden on the economy is at the highest it has ever been” (PwC, P: 3, 2017). “If the domestic revenues collections continue to underperform, the government will be forced to borrow more from the domestic market. The increase in government borrowing may result in a substantial increase in yields on government securities, which may result in an increase in borrowing rates, which may constrain the private sector credit growth even further” (PwC, P: 7, 2017).

Growing debt:

“The Uganda’s public debt burden has risen by 12.7% in the past four years from 25.9% of GDP in FY 2012/13, to 38.6% of GDP in FY 2016/17. The debt burden is projected to continue rising to 45% of GDP by 2020. Debt as a percentage of revenues has risen by 54% since 2012 and is expected to exceed 250% by 2018. The country’s ever increasing debt burden has resulted in a deterioration of the debt affordability situation” (PwC, P: 8, 2017). “Uganda’s capital expenditures are still too reliant on external finance. Currently debt servicing constitutes 11% of the total government expenditure, one of the highest debt burdens in sub-Saharan Africa. This is expected to increase to 16% of the total government expenditure by 2018. Uganda’s debt burden has risen faster than the government’s own resources, resulting in a debt-to-revenue ratio of 236%, one of the highest amongst B-rated countries. This has prompted Moody’s recent down grade of Uganda’s long-term bond rating by one notch to B2 from B1” (PwC, P: 8, 2017).

An Economy with challenges:

“2016 was an economically difficult year for Uganda. The economy faced numerous challenges due to the continued uncertainty surrounding the recovery in global economic growth, weak commodity prices and geopolitical events in our key trading partners. As a result, of these numerous challenges, our export earnings, FDI flows and remittances to Uganda all went down. These developments, together with a slowdown in the execution of public investment projects and weaker than expected private sector demand, had a major effect on the economy” (…) “Other internal risks include delays in the implementation of public infrastructure projects such as the Standard Gauge Railway (SGR) linking Uganda to its East African neighbours, and the key infrastructure projects critical for the commencement of oil production” (PwC, P: 4-5, 2017).

If you are worried by the Republic and their economy after this, than you haven’t followed the class since this signs have been there for while! The state of the economy is fragile and the debt rise should concern all the ones inside the Republic and also outside. However, this could change, but that has to be done by the government and steer in another direction as today. The greed and the common sense of developing the economy is forgotten, as they are fixated on infrastructure projects and oil developments, while borrowing to fill the losses of donor-aid and internal revenue. This could be done in many ways, but that would not be easy. Peace.

Reference:

PricewaterhouseCoopers Limited (PwC) – ‘Uganda Economic Outlook 2017’ (February 2017)

A look into the proposed International Contribution to the National Budget of Uganda for the Financial Year 2017/2018

Mengo Hospital needs funds

There are many budget posts in a National Budget, but as there are talk of lacking international support of the budget in the Republic of Uganda. The certainty is that even as the donors are fleeing the National Resistance Movement (NRM) and the President Museveni own way of saying he doesn’t need them. Still, I want to show the world collectively what the NRM government have donor sponsored projects through the National Budget, these are projects and development of infrastructure that the NRM needs to show something after over 30 years reign.

Like take Japan the donor funding to the Northern Uganda Farmer Livelihood Improvement Project in the next Financial Year gives to the project Ush. 31.33bn. also donate funds to is the Nakawa TVET Lead Project got Ush. 4.69bn. Japan also donates to Kampala Flyover Construction and Road Upgrading Project with Ush. 155.44bn.

World Bank itself is donating funds in different ways to two other projects, which is African Centeres of Excellence that got Ush. 13.36bn. and Albertine Region Sustainable Development got Ush. 9.35bn. On the other hand the Kingdom of Saudi Arabia donated to the Construction of 5 Regional Technical Institutes with funds of Ush. 6.98bn.

Belgium has also offered their donor funds into the Ugandan state through various projects, like the Program/Project Support to Improve the Quality of Teaching and Learning with Ush. 11.97bn. also the Rehabilitation of the National Teacher Training Centre Kaliro allocated Ush. 15.16bn, they also gave to Rehabilitation of the National Teacher Training Centre Muni funds of Ush. 15.16bn. another project that Belgium was behind is the Support to the Implementation of Skilling Uganda with Ush. 15.96bn.

The Democratic People’s Republic of China has donated to new development projects in Uganda, like they are donating to Industrial Substations Ush. 91.74bn. they also donated to Isimba Hydro Power Plant Ush. 407bn. and also  Karuma Hydro Power Plant where they have pledged Ush. 1,305.07bn. or Ush. 1.3 trillion to that alone! The Chinese is also involved in Entebbe Airport Rehabilitation where they have funded Ush. 148.13bn. the pledged funds for Standard Gauge Railway will first come next Financial Year 2018/2019 and not this financial year.

African Union (AU) funds to the UPDF Peace Keeping Mission in Somalia with total Ush. 256.66bn. United Kingdom pledged funds to the Road Infrastructure for Delivery of First Oil with Ush. 252.63bn.

The pledged funds for Kampala-Jinja Highway are first for FY 2018/2019, but no official donor or loaner of funds. Therefore the estimated funds come from thin air. What is also relevant is to see that the Funds from Austria and Denmark has been suspended for different development projects. Still, which I haven’t mentioned is the funds from African Development Bank, also GAVI and Global Funds still gives to health care development, even with the knowledge of the rampant corrupt behaviour in the Ministry of Health.

Therefore if the NRM are contemplating that they are themselves giving these sorts of projects to the people, I hope the donors are putting up boards or signs in the entrance or hallways, even start of the roads where it says what sort of amount of funds they spent on it. So that President Museveni or any other crony can take all the credit, because the credit and the footing the bill to somebody else! Peace.

PBO: Kenya is borrowing without all requisite policies in place (Youtube-Clip)

“The government is borrowing without proper revenue planning or policies that factor in revenue growth challenges. This, according to Parliament’s Budget Office, coupled with the growing need to finance projects, will see the level of Kenya’s debt increasing in the coming year, which is already a cause for concern for some” (Kenya NTV, 2016)

Opinion: Jubilee Government, are they fiscal responsible for their current running debt?

Kenyatta Ruto 09.08.2016

Today is a day where I have questions and they are big because when you crunch the numbers for the last three fiscal years and estimated debt ratio it’s start to be worrying. It isn’t a sweet and tender way of asking. I know, but the numbers and the citizens will have to repay the amounts of borrowed cash at one point. As the Japanese will not deliver second-hand vehicles to the hospitals forever like they did during either this or last week in Kenya; Kenyan Government shouldn’t base their budget on handouts, but on tax-monies. The budget now is worrying as the levels of budget that are borrowed as it is going directly to portfolios that are day-to-day business instead of giant infrastructure development.

Why do I say that? Because each year you can question the ratio between the debt and the development projects; like in 2013/2014 the debt we’re 330bn, but the development 224bn. That is a 100bn used on day-to-day instead of building roads to Ethiopia or planning the Standard Gauge Railway. Take look!

In the 2013/2014:

At the fiscal year ending the 25th July 2014 the budget debt we’re 330,440,692,719.35. That means there 330bn debt, which we’re 25.8% of the National Revenue. National Government budget spent on development we’re 224,355,607,699.00 or 224bn.

In the 2014/2015:

At the fiscal year ending 24th July of 2015 the budget debt we’re 400,249,353,175.10. That means there 400bn debt, which we’re 25.1% of the National Revenue. National Government spent on development we’re 270,320,838,230.00 or 270bn.

In the 2015/2016:

At the fiscal year ending the 22nd July of 2016 the budget debt we’re 683,479,898,203.50. That means there 683bn debt, which we’re 36.9% of the National Revenue. National Government spent on development we’re 333,170,357,469.90 or 333bn.

So as you see, the FY 2013/2014 isn’t the worst. FY 2014/2015 is the start of loose government spending. The Jubilee all of sudden borrow 400bn and spends 270bn. That is 130bn that is used on day-to-day business, with loaned fiscal funds instead of the ordinary tax-base that the government should be fixated on. So with the last year FY 2015/2016 the Jubilee went all out in the stratosphere and borrowed from any bank or institution possible; as the debt we’re 683bn and the development we’re 333bn. That is 350bn that are used to day-to-day business and not development. The question remain why the sudden giant loan ratio towards the last year before election and why the lack of projects to use the newly granted funds.

The fiscal responsibility seems weak and not there when a government can splash this kind of funds and use this amount of debt on day-to-day instead of big projects and infrastructure projects needed. I am sure DP William Ruto has more friends that can be sub-contractors for some Chinese infused borrowed road projects around Kisumu. But, the ability to sustainable development with the steady rise of debt is worrying. That the IMF and World Bank is saying the debt ratio is still feasible should be worrying. As the IMF and World Bank never had control of the worst years before the Greece defaulted and needed saving grace from the world around it. The worst comes to worst when the Kenyan Government starts to default and reach it’s limit they have to have a mercy on the Jubilee and the counterparts who are paying for loose fiscal behaviour. The worst comes to worst with the giant amount of added fiscal funds might give the economy a edged inflation and bank rates that weakens the Kenyan Shilling as the deficit between reality and what is really used.

You can wonder why the Jubilee wants to hedge up so much loans and government debt. When the FY 2013/2014 and FY 2014/2015 we’re the net domestic borrowing around 300bn, but by FY 2015/2016 it become 500bn. That is a jump of 200bn of Domestic Borrowing. That should also be questioned together with the ratio already in the budget. This doesn’t seem like a healthy fiscal policy. The public should question the use of the borrowed domestic and total ratio of debt. The governance levels and accountability of the funds should be asked from Opposition and also the Auditor General. The Inspectorate of Government the IGG or Ombudsman should hassle the hustling Jubilee who has gained these funds and been responsible for the allocated budget and inquired for the option for loans to development and day-to-day use.

What do you think? Peace.   

Kenyatta with a Statehouse Summit on Transport and infrastructure; not a good look for the Jubilee!

State House Summit 08082016

“I understand that everyone in the rural areas,the MPs, the MCAs,Governors and all aspirants are claiming responsibility for any upcoming infrastructural project.They are fighting about who lobbied for what and who talked with whoever and who met whoever……..it’s not a question of who lobbied for any development be it roads,electricity connection,building of schools and many more….it’s a question of giving service to the forty to forty two million Kenyans who pay taxes.Hii Maneno ingine yote haina maana” – Uhuru Kenyatta

President Kenyatta has today a State House summit on transport and infrastructure projects in Kenya under his leadership and the Jubilee Government. That has soon finished their first term in the presidency. They had pledges upon pledges when they went into government.

They wanted to build a giant and fantastic electric quick railway. The Standard Gauge Railway and also develop the Lamu Port through the LAPSSET project with fellow neighbors. The Pipeline of crude-oil from the Northern Kenya in Kerio Valley in the Lokichar Basin to the upgraded Lamu Port; where the Jubilee Government also wanted the Lake Albert crude oil from Uganda to go to. Something that fell through as the licensed companies in Uganda though it was too costly to build through Kenya compared to Tanzania. So the Kenyan Government has to do it on they’re own. As the LAPSSET it is waiting for private enterprise to engage and use their monies on the planned infrastructure.

KAA Changes

The other issues are stadiums not built in regions where it was promised the fields of glory never came. It was easy to promise the district towns a sports facility, but none of them came to fruition. The others developments we’re that from Kenya had 30 Air-strips before Jubilee and by now they have 50 of those. Still, the discussion on the failed development project and upgrade of Jomo Kenyatta International Airport (JKIA) have not been an issue as the embarrassing project it is for the ruling regime and their PR team.

“There is corruption at the port. Find out who among the people in this room are thieves” – Uhuru Kenyatta.

There are always some issues and even after years in power and set change with rule of law. The Jubilee government tends with the same fractured system, the corrupt Mombasa port where the monies that makes all import more expensive and still they haven’t instilled checks and balances to Ports and therefore the extra taxation of the imports happen on a daily basis. As the corrupt mind and bodies continues to thrive with the speaking up against it, but not dealing with it in Parliament or by sanctions of law.

The Jubilee government has dozens of plans and pledges, as much as they have foreign loans to build the projects from the World Bank, International Monetary Fund and the Chinese. The extent of debt collected by the recent new loans has come to 49% of GDP. In April 2016 the Jubilee Government had collected $1.35 billion in debt, while fixing a massive deficit in the Kenyan budget. Still, this is worrying as the debt and interest has to be repaid to the International lenders and development banks which the tab is taken from.

Kenyan President Uhuru Kenyatta (L ) and his Chinese counterpart Xi Jinping (R) stand together during a signing ceremony at the Great Hall of the People in Beijing, China 19 August 2013.

Kenyan President Uhuru Kenyatta (L ) and his Chinese counterpart Xi Jinping (R) stand together during a signing ceremony at the Great Hall of the People in Beijing, China 19 August 2013.

This was not discussed at the Summit and where is the money for the development projects coming from as they shouldn’t just surface out of thin air. Just like the roads and rails need wages, plans, dialogue and trade to get built. As the landowners need to be compensated together with the companies building the roads need paid for service rendered. Therefore the business of infrastructure is expensive as the giant projects cost a fortune because they are supposed to stay for long and be kept for decades on.

The same with all the roads not taken care of as the feeder roads of the Northern Kenya, which is left in mud and dust; the focus on three Nairobi by-passes to fix the congestion of the capital. Not thinking of other towns who could need extra bypasses like Eldoret or other where the Jubilee doesn’t deliver the needed infrastructure, except if it is fitting with the border-passes and agreement with nation on the other side who needs roads of exporting through Kenya there. Therefore the Summit is more a PR Show, than proving real progress as the corrupt, the debt and all the other problems are destroying the champion sound and roar from the Jubilee Government under President Kenyatta. Peace.

Post Navigation

%d bloggers like this: