MinBane

I write what I like.

Archive for the tag “Uganda National Oil Company”

EAC: Signing of the Inter-Governmental Agreement between the Republic of Uganda and the United Republic of Tanzania for the East African Crude Oil Pipeline (EACOP) Project (26.05.2017)

Advertisements

Ugandan economy could get Oil-Shocks due to external factors, recent BoU report claims!

Surprise, surprise the Bank of Uganda (BoU) has made a working paper on the possible consequences of the oil price, the oil exports and the oil imports on the Ugandan economy. This didn’t exceed my expectation of a report or paper, but said enough to clearly anticipate changes in the economy with the coming export. Even as the BoU called the domestic oil production in embryonic stages, which means the real impact will come when it is closer petroleum production the GDP and CPI feel more impact of the oil prices and the volumes exported from the Lake Albert Basin.

That the Ugandan State and the Republic of Uganda, should know that the fresh foreign exchange and currency into the economy, as the domestic parts of petroleum is not having big impact on the economy! Still, the export can change it as the oil prices and change the consumer price index for instance. Take a look!

One such shock that is a source of major concern and risks to monetary policy-making in Uganda is the oil shock. To our knowledge, the effects of oil shocks in Uganda, to date, have not yet been analyzed. The objective of this paper therefore, is to analyze the nature and importance of oil shocks to Uganda’s economy in a dynamic framework” (Nyanzi & Bwire, P: 4, 2017).

According to the Uganda’s Ministry of Energy and Mineral Development (2012), oil provides about 10 percent of Uganda’s energy requirements – the rest is sourced from the small and underdeveloped and unreliable electricity sub-sector and the cheap biomass energy. The oil sector was also deregulated in 1994, under the broad structural reforms implemented by the Government of Uganda, which effectively eliminated oil prices subsidies. Uganda is endowed with commercially-viable oil reserves, but domestic oil production is in embryonic stages. Consequently, all of the oil-energy needs of the country are satisfied by imports” (Nyanzi & Bwire, P: 8, 2017).

The results of the variance decomposition in regard to oil shock are not entirely unexpected, given the structure of Uganda’s economy. Oil and its products constitute 8 percent of total intermediate consumption and 10 percent of energy requirements. In addition, oil is crucial to electricity supply in Uganda because hydro-electricity is unreliable and insufficient. This implies little or no substitutability of oil with hydro-electric energy in production in case of adverse oil shock, which could justify the long-run 20 percent variance in output due to oil shocks. Regarding consumer prices, the small percentage of variance in consumer prices due to oil shocks is justified by the small weight of oil in the CPI basket. Oil constitutes about 1 percent in the 2009/10 rebased CPI basket, of which 0.8 percent is oil for personal transportation and 0.2 percent a source of liquefied energy at home. These numbers are not surprising given that over 75 percent of the population live in rural areas and depend mainly on wood and charcoal as a source of energy, and that rates of car ownership are generally low. Moreover, the main source of short-run volatility in the Uganda CPI is weather-related factors affecting food prices. This leaves the bulk of fluctuations in the core consumer prices (Comprising over 80 percent) explained by demand” (Nyanzi & Bwire, P: 18, 2017).

Oil shocks are transmitted through the supply channel, as a shock that increases the international price of oil leads to opposite movements in real output and consumer prices in Uganda” (Nyanzi & Bwire, P: 19, 2017).

It is hard to say how it could impact and how the petroleum production and exports will change the economy, how the prices and the inflation, as the measure of how much the price of the crude-oil will be at the given time. That the government has secret agreements with oil companies and also agreements with other to build the crude-oil pipeline that goes to Tanzania. Therefore, the reaction in the economy is not yet known, but with the background and knowledge of the how it is now. Most likely a real output and change in consumer prices in Uganda.

That will be an oil-shock no-one can be prepared for. Unless the Government and Parliament created legislation and policies who might soften the change of the economy. Therefore, with this in mind, the National Resistance Movement, the State House and the President Museveni have work to do. That is if they consider the implication the petroleum production and exports will have on inflation, currency value and consumer prices index as well. This report should open some eyes into it, but it should not be surprising. Peace.

Reference:

Nyanzi, Sulaiman & Bwire, Thomas – ‘Working Paper No. 04/2017 – The Macroeconomic responses to Petro Shocks for Uganda’ (May, 2017)

Presidential Handshake: It’s now revealed that the President is trying to pin someone to “fall on one’s sword”!

The continued exhausting of the Presidential handshake shows the true form of the bribe. Even as the President himself, tries to clean his hands and pin-point more people. He still did sanction it directly from the Uganda Revenue Authority and onto the vast civil servants and loyal cronies, as a bribe and brown envelope of joy. Even if the stories keep coming and more people being implicated, the reality is that this shows that the whole system is rotten.

The maladministration and clearly not caring about state reserves comes to the public court. The Public know knows that the President and his State House, are only trying to find a scapegoat and a perfect victim, to save face and look good, without taking down somebody who knows to much. They know that to many people has gotten ill-earned millions in envelopes because of this Presidential Handshake. That the probe would have questions to the President was most likely, and we could anticipate that someone else would fall on their sword. If they will do it voluntarily and might do it with force from the State House.

Oxford Dictionary states about “Fall on one’s sword”:

Assume responsibility or blame on behalf of other people, especially by resigning from a position.

he heroically fell on his sword, insisting that it was his decision’ (Oxford Dictionary).

So when you read part of the piece in the Daily Monitor today, you see how the President tries to wash his hands of sin and put blame on the Ministers and others. So he will talk to the culprit and make sure that he falls on his sword for him.

Museveni pinning people down for the handshake:

Bugweri County MP Abdu Katuntu,who is leading the inquiry by the Committee on Commissions, Statutory Authorities and State Enterprises(Cosase), confirmed at a press briefing on Friday that Mr Museveni wants the Committee to ensure that the missing money is accounted for. “The President said he was not aware [that Shs5b is unaccounted for] and he was happy that we were going to follow it up. He reiterated his commitment to accountability and he said any monies spent from the public coffer should be accounted for. He encouraged us to have this money accounted for by the Justice Ministry Accounting Officer [Solicitor General],”Mr Katuntu said. Mr Katuntu revealed that the Solicitor General will be cross-examined again over the whereabouts of the Shs5b before a report is compiled mapping out his fate. During the ingoing inquiry, Mr Atoke failed to give conclusive accountability for the money. During the course of the two meetings, Mr Museveni also singled out former Energy Minister Syda Bbumba for inserting a clause in the Production Sharing Agreement that allowed Tullow a $157m tax waiver for an out of court settlement involving Tullow. The signing of a PSA to exempt Tullow from $157m was done by Ms Bbumba without the knowledge of the President, Mr Katuntu confirmed. “The President said he was not aware of that exemption. The President agreed with us that the exemption was illegal because the then Minister did not have power to exempt payment of tax. We informed the President that we are following up this matter and we will have a conversation with Syda Bbumba,”Mr Katuntu said” (Arinaitwe, 2017).

Now that Honorable Syda Bbumba is the one to blame now, not the ones applying for it or the ones who gained the ill-willed state coffer monies. Not long ago, it was revealed to come from the wrong account, directly from URA and not State House. Now it is a Minister Bbumba who acted without consistent legal procedure, nor talked with the authorities before the money went on its merry. Certainly the other part of what happen this mid-week reveals certain aspects worth noting!

Asking for favors:

According to our sources, as soon as the president ended his testimony, some MPs took turns to speak privately with him. According to multiple sources familiar with the Entebbe meeting, Katuntu effectively contained the MPs during the committee’s official business session at State House but when that ended, MPs went on rampage. “After the meeting, the president invited us for a group photo and this is when the MPs started [whispering],” said an MP who attended the meeting. This MP singled out Beatrice Anywar (Kitgum Municipality), Hood Katuramu (PWDs Western) and Vincent Woboya (Budadiri East) as some of the MPs that approached Museveni with requests for favours. This was after they saw the committee vice chairperson Anita Among whisper to Museveni. Anywar reportedly invited the president to attend her thanksgiving next month in Kitgum. “She has not been attending the committee meetings. In fact, we didn’t go with her on [Wednesday]. I think her coming on the second day was purposely to see Museveni, not [to be part of] the probe,” one MP said” (Kaaya, 2017).

So the system is rigged and he isn’t only looking for someone to take the blame for the Presidential Handshake, he also sees who are loyal to him if they get favors. Similar to the Handshake. They wants and requests favors from the President, because he has done so in the past. And most likely do it again, that is the way he keeps the cronyism alive and the Movement booming. If he stops paying and delivering brown-envelopes to political affiliates he will lose his base and his MP’s. But because of this Presidential Handshake he has to play smart and look like he cares about fighting corruption, even though his State House is thriving on it.

That this would take such long time isn’t surprising as they are trying to find one who can take the blame, without to much cost and lose of face value to the hierarchy and the State House. Nevertheless, the bribe is still a bribe, even if they try to color it differently, there isn’t a gray-area to put it into. The reality is still the same. That certain elements now this week ask for favors from the President proves the handouts and the handshakes are a systemic and institutionalized affairs at the State House.

The issue with the Presidential Handshake is more of a gimmick as the state tries to find the one who will take the charge and eat, so that the President can say: “See there my Ugandan people, I work against corruption”. But the next day, another MP will pop by Entebbe or Nakasero and ask for favor, an envelope or even a handshake. So that they can be bought into submission, which is the given state and the system that President Museveni believes in. Peace.

Reference:

Arinaitwe, Solomon – ‘Museveni pins SG Atooke over oil cash’ (01.05.2017) link:http://www.monitor.co.ug/News/National/Museveni-pins-SG-Atooke-over-oil-cash/688334-3909560-g9wigk/index.html

Kaaya, Sadab Kitatta – ‘Oil cash probe MPs beg from Museveni’ (01.05.2017) link:http://observer.ug/news/headlines/52653-oil-cash-probe-mps-beg-from-museveni.html

Oxford Dictionary – ‘fall on one’s sword’ link:https://en.oxforddictionaries.com/definition/fall_on_one’s_sword

Trick or Treat: Presidential Handshake gone wrong!

Today, is a day that doesn’t stop to startle, the day doesn’t stop giving. The reports from the Republic are a bit to much. Still, the continued probe into the 6 billion Ugandan shillings has continued. I would never believe it would amount to anything. For the first time in a while, the President has said he did a mistake, but it wasn’t I did something wrong with the State Resources and the Taxes. No I took the money from the wrong account and then gave it away to the civil servants and movement cronies. Take a look!

Shs. 6 Billion was a mistake and the President want to give a refund!

President Yoweri Museveni has told the Members of Parliament investigating the Shs 6bn Presidential Handshake that he is ready to refund the money” (…) “The president was quoted as saying his original thinking was to “say thank you to our patriotic civil servants who against all odds managed to make us get what was due to us from the known international giants.” The president added that the flouting the rules by the government officials was not his making, although he agreed to take responsibility on their behalf and make sure the money is returned from where it was picked” (…) “It was unanimously agreed during the committee session at State House that picking the presidential handshake money from the Uganda Revenue Authority was a mistake. The money should have been sourced from State House budget that caters for all expenses of the President” (…) “We realized it was wrong for the presidential handshake (Shs 6bn) to come from URA instead of State House or President’s office,” another source who attended the session said” (NTV Newsnight, 26.04.2017).

The Movement and the government leader, the executive and the President are clearly trying to clean his hands. Since it was from the wrong accounts, that the Presidential Handshake was taken from the Uganda Revenue Authority, as they we’re the receiving end of the tax-case with the Heritage and Tullow Oil Corporation. These case and probe the republic have been through and through, even Andrew Mwenda defended the handshake.

What is sad and supposed to be the saving grace for the President, that if he gave the civil servants and the ones involved in it and getting compensated for their work. The handshake was by his purpose just a fair gift for the work. As the ones in URA working copying paper and picking up the phone in the office for the state. So even if they mask the audit of the budget as of where the money came from, the civil servants still get their monies.

If the money we’re directed from the State House or from URA, it is still from the State Coffers, the only difference is the ending numbers on the slips. That it really wasn’t his making, but we have seen the letter that was accepted and the citizens seen the acts. If not they have read the lines and comments of the Handshake.

Even if the President said this should have been expenses directly from him and not from the URA. It is still uncommon and not something that should occur. That the President blames his fellow co-workers and the institutions around him. Presidential Handshake no matter where it comes from is still an act of graft, a bribe or a misuse of government funds. The gift from the President is still brown-envelopes without proper procedure, not basic salaries or natural bonuses. If it was so, then there wouldn’t have been such a probe into the handshake.

An act of corruption if it comes on a unicorn from the State House or from the blessed souls of the Uganda Revenue Authority, doesn’t sanction the act differently. If the letterhead of the bribe to the civil servants for their work, doesn’t salvage the Presidential Handshake. It just shows the disregard President Museveni has. He thinks it would be different it was directly donated from him and if he signs of the same amount to URA from the State House. Surely, that amount must come from the budgeted “confidential” State House funds, as the knowledge of how it is use are only for the President to know.

I can reassure the world that a unicorn was not flying around the Okello House this night and will not happen tomorrow morning either, a bribe is still a bribe. You can try to change the fact, but the money was still transacted without the proper procedure and without the justification. Even if the President says so, it is still misuse of the state coffers and given taxpayers funds to cronies, nothing else! Peace.

Opinion: Forget the Presidential Handshake, the Oil Revenues not been remitted since 2010; so what value have the Norwegian Oil Development Programmes in this mess?

ntv-01-03-2017-oil

“Oil Cash Probe: About 2.4 trillion shillings of oil revenues received since 2010 has not been remitted to Bank of Uganda” (NTV Uganda, 01.03.2017).

President Yoweri Kaguta Museveni, the National Resistance Movement and all the other civil servants that has been working and living with the knowledge of the unaccounted funds. The 2.4 trillion shillings is above $ 663m dollars. That is massive amount funds that could be used to all sorts of government programs. However, there been programs to secure the revenue and the progress, which is done in collaboration with the Norwegian government. I address these programs and wonder if they only exist on papers to make the ugly truth look decent. Since, the revelation of the funds that gone missing without a trace.

This misdirection points to another explanation for the oil curse that is gaining favour: politics. Because oil money often flows directly from Big Oil to the Big Man, as Africa’s dictators are known, governments have little need to raise revenues through taxes. Arvind Subramanian of the IMF argues that such rulers have no incentive to develop non-oil sources of wealth, and the ruled (but untaxed) consequently have little incentive to hold their rulers accountable” (The Economist, 2005).

Norwegian Funding for transparent Oil development:

Cooperation between Uganda and Norway on capacity and institutional development has a long history through several successful Programmes. Norwegian assistance under Oil for Development in Uganda started in 2006 under the programme “Strengthening the State Administration of the Upstream Petroleum Sector in Uganda”. This programme ended in June 2009 after three and a half years of successful implementation. Total funding for this Programme was NOK 21,294,650” (…) “The Programme had three Pillars – Resource Management, Environment Management and Revenue Management Pillar, in addition to a Programme Management, and was allocated a total funding of 80,000,000 NOK for its five year duration (2009 to 2014). However, during the second and third Annual Meetings for the Programme that were held on 27th January 2011 and 31st January 2012 respectively, the need to expand several activities of the Programme and the addition of new ones due to the rapid growth of the oil and gas sector in the country, was presented and approved by the Embassy. Additional funding of 67,000,000 NOK was allocated during September 2013 and the addenda to the Programme Agreement and Institutional Corporation Contract were signed” (MoEMD, P: 7-8, 2015).

Oil Press Statement 01.03. P1Oil Press Statement 01.03. P2

Supposed Revenue Administration:

The Program supported the development of a system (the petroleum tax manual) which will be used to identify and harmonize activities in the petroleum sector for taxation purposes. This activity is in three (3) parts and has been supported by the Oil Taxation Office (OTO) in Norway. Consultative meetings were held and Part II of the manual was completed in April 2014. Parts I and III have been reviewed and will be completed in next phase of the program with support from OTO” (MoEMD, P: 16, 2015).

That means that the Ugandan Government gotten by the Norwegian Government the amount of 168,294,650 NOK, which if you convert it is the total 71,879,499,032.99 UGX or 71bn shillings. If you translate it into dollars it is above $18 million dollars. That is massive sum of donations for some common good. Therefore, it is insulting that the Oil Cash Probe is showing massive amount shillings are unattained or even can verify where the oil money is.

Therefore, that the Norwegian state continues to fund the Ugandan government with the new agreement of continued oil development on the 15th May 2015. That was in a signed agreement between Hon. Matia Kasaija of Minister of Finance, Planning and Economic Development (MoFPED) and the Norwegian ambassador Thorbjørn Gaustadsæther. This was an continued effort to as the agreement stated: “The Impact of this programme will thus contribute to achieving the goal of the Uganda National Oil and Gas Policy (2008): “To use the country’s oil resources to contribute to early achievement of poverty eradication and create lasting value to society”. “The Program that the states agreed upon for the years from 2015 was 19 million NOK, in 2016 was 18 million NOK and in 2017 supposed to be 16 million NOK. In total the Norwegian Support for these three years are 53 million NOK” (Agreement between the Norwegian Ministry of Foreign Affairs and the Government of the Republic of Uganda regarding development cooperation concerning “Strengthening the Management of the Oil and Gas Sector in Uganda – Phase II, 15th May 2015).

The Norwegian government have supported the Ugandan government over two periods with funds to secure the Oil Development for human resource, drilling technic and revenue stream. Therefore with the recent revelations shows that the works of the cooperation have been very fruitless or pointless; then even as the programs are in the works, you see the massive amount of petrodollars disappearing in thin-air. This is just to establish the amount of funds together before 2015 and after, that being the amounts of 221,294,650 NOK or 94,516,067,983.63 or 94bn Uganda Shillings. That is insulting lots of monies when the knowledge of missing 2 trillion shillings!

I start to wonder what they really did on this one and how they duped their European counterparts, as the results of the bidding is that funds dating back to 2010 is unaccounted for and not allocated in the funds their supposed to be at Bank of Uganda. This is a dozens loads of handshakes and giant robbery of the reserves.

presidential-handshake-2015

So now I am not so concerned with the “Presidential Handshake” worth 6bn shillings, which is bad enough that the NRM regime has been doling away to all civil servants and other loyal subjects after the “historic” tax settlement that we’re won in the courts. So 6 billion shillings turns into 2.4 trillion shillings, which is vast fortunes misspent by regime that clearly doesn’t care for accountability or transparency. The oil-deal between the government and the licenced in the Lake Albertine Basin!

Other than the little knowledge that was dropped in the 2014 report made by the NGO Global Witness that stated this: “Consequently it is not currently possible to track payments by international oil companies into government accounts with Tullow Oil being the only company voluntarily publishing disaggregated payments to the Ugandan Government. This creates the risk that any theoretical tax avoidance by companies or embezzlement by government officials may go unnoticed (Global Witness makes no claim of any such wrongdoing in relation to the contracts we have examined in this report). This will be increasingly important as oil production begins and more and bigger payments begin to flow into government accounts” (Global Witness, P: 35, 2014).

So this report alone states the fact that world and citizens of Uganda cannot know where the revenue ends. The state supposed petroleum revenue is not visible since 2010. The Ugandans people should be terrified and be mad of the obvious thieving. When the licenced public resources get squandered away and the black gold gets tricked away. So that President Museveni have within his powers and with his cronies made sure the fortunes made on licencing oil in the Lake Albertine basin goes to his or other associates accounts, instead of into government accounts in the Bank of Uganda.

2. Trillion shillings are not a chicken or a small fee easily to lose, it is not something that get earned over a hot minute. The citizens are kept in dark with the funds earned and taken away over years into secret accounts through sophisticated financial instruments. Certainly, Museveni and his bands of brothers who squeezed the government for decades and this is the final nail of salvaging any good reputation. The rep of the Museveni is already barely legal; still this here is just insane that the little 6 billion “handshake” to a bunch of civil servants and NRM elites revealed the madness.

So there was one guy in court who actually had the courage to reveal the greatest crime in decades. Even as the rigging of elections is thieving the country of their representation and of their true leaders, the government isn’t represented by legitimate people, but the ones there is now thieving the whole oil fund. This is not okay, this is thieving the future and the present development, as the Museveni regime and the NRM does not care about their citizens when so much revenue of the petroleum went missing. Peace.

Reference:

The Economist – ‘The curse of oil – The paradox of plenty’ (20.12.2005) link: http://www.economist.com/node/5323394

Global Witness: ‘A Good Deal Better? Uganda’s Secret Oil Contracts Explained’ (2014)

Republic of Uganda – Ministry of Energy and Mineral Development – ‘Strengthening the Management of the Oil and Gas Sector in Uganda –  Phase II – 2015-2018 –  A Development Programme in Co-operation with Norway’ (March 2015)

Press Statement: Appoinment of Executive Director for the PAU (18.08.2016)

UG Petroleum Authority 18.08.2016

Press Release: Appoinment of the Chief Executive Officer (CEO) of CNOC Ltd Uganda (01.06.2016)

CEO UNOC 01.06.2016

Letter – “Re: Recruitment Process of the CEO of the Uganda National Oil Company Limited” (20.04.2016)

Uganda Oil Company 25.04.2016

Post Navigation

%d bloggers like this: