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Archive for the tag “World Bank”

UNRA: Termination of the Contract for Civil Works for Upgrading of Musita Lumino/Busia – Majanji Road (104km) From Gravel to Paved (Bituminous) Standard (12.06.2017)

Mzee was it Warfare or Budget, Mr. President?

President Museveni: “Yes, it is true I was a rebel, but sometimes rebellion fails. I was fighting a just war” (#UGBudget17 Speech, 08.06.2017).

Today was the day the Budget Speech from Minister of Finance, Planning and Economic Development (MoFPED) Matia Kasaija as the Parliament we’re delivered the total budget for the Financial Year of 2017/2018. This one has already been voted for and was a summery for the representatives in Parliament to know the values of their ministries and the projected use of the revenue of the state will have. Still, on this day, the President of 31 years, the rebel of 1980s decided to wear military fatigue and be wearing the gear as a General. He was not the executive in some sense, he was the military general. The gun-loving and militarized politician Museveni was allover today.

Therefore I have to take a piece of law, which could be used as the UPDF Act of 2005, where it states on 164: “Unauthorized sale or wearing of uniforms, etc.

(1) Any Person who, without authority –

(c) wears or uses any decoration supplied to or authorised for use by any member of the Defence Force or any decoration so nearly resembling that decoration as to be likely to deceive” (UPDF Act 2005).

So even if he is Commander-in-Chief and the Executive, he is still of contempt of the Parliament and their rules, when having to show-up in military fatigue or military uniform. As if he is storming to war and not trying to speak well of the budget framework and the voting for the post in the budget. This is clearly lacking the gravity of the acts of contempt. Wearing it in a sessions which is unauthorized or seem as wrong.

Therefore another part of the sub-section part (3): “Any person who by act, words, conduct or otherwise, falsely represents himself or herself to be a person who is or has been entitled to wear or use any uniform or decoration referred to in subsection (1) commits an offence and is, on convection, liable to imprisonment not exceeding three years” (UPDF Act 2005).

So when he as President is wearing the military fatigue or uniform in Parliament, I cannot take that man seriously for doing so. Even if he didn’t really violate the UPDF act, still his acts by words or even falsely representing himself, since he is not a full-time general, but a President of 30 years. His revolution or coup d’etat ended in 1986. A disco-tune that should have lost meaning two decades ago, but since he is still the President. That year is still magical like some of old Disney flicks.

Time to leave the Military Uniform Mr. President! Time to leave it behind and also be and act like a President. If he was in war or had to save Parliament from an angry powerful militia. Alas, it is not so! Time to relief the attire and be peaceful man, especially since he is supposed to help with the National Dialogue in South Sudan, but easier to sell arms than negotiate peace, right Mr. President?

So was it a sign of warfare from the President or his NRM Way to prove that the bullets gave him power to bless the budget? Peace.

Reference:

The Uganda People’s Defence Force Act 2005

#UGBudget17: Half borrowed and a third paid back in Interests!

Today the Ugandan government, the National Resistance Movement finally read the Shs. 29 Trillion budget for the 10th Parliament. However, it is not necessary the size of funds and all, which is allocated, but the way it is funded. Like “Government hopes to raise sh14.6 trillion in revenues to fund the 2017/2018 budget” (Uganda Debt Network, 08.06.2017). Of the 29 Trillion, they expect to get close to half of that, but the monies has get from somewhere and also be of use. What is left are relieved like this: “The balance sh14.3 trillion (49.5%) of the National Budget will be raised through internal and external borrowing” (Uganda Debt Network, 08.06.2017). With this in mind, half of the budget is adding more debt. So if a nation already having lots of debt and debt repayment, it still adds another half budget. This is a bad cycle of events.

There lets us put things in perspective: “Our concern is sh9.9trillion, which is 35% of the total budget, will be spent on debt repayment” (…) “Amount of money spent on debt repayment has escalated in the recent past now at 9.9 trillion for fy2017/18” (Uganda Debt Network, 08.06.2017).

Therefore, the state and the NRM are clearly getting funds through loans to pay-off their interests. AS the 35% of spending is on interest in the coming fiscal year. This should worry, even if the corruption, misspending of obnoxious amount of funds through the paradise of Okello house. Still, that 1/3 of the coming budget is paid interest on old loans, which are been made by this government and by this President. What it show is the lack of concern of the future and how sound fiscal policies. At this state, the government of Uganda are clearly footing the bill. They are filling in the blanks for where they in the past had happy donors filling the envelopes.

The NRM and President Museveni is overspending and misusing state reserves, as the revenue and the state coffers do not sustain this massive overspending. Certainly, it is visible, also the worry of the running interest rates and growing debt as close to half of this year alone are by loans. Neither if it is local, by foreign or multi-national financial institution does save the fact, that the state has a problem.

That of the coming fiscal year, the state is borrowing half, and repaying that with 35% says a lot. IT says the fiscal policies needs change and it is dire. The state are clearly walking the wrong path. And remember this, there will be supplementary budgets during the fiscal year, that will expose the overuse of funds and needs for more loans. Therefore, they are surely going to exploit the faith in future, without having the funds for it today. Peace.

Kenya: Monetary Policy Committee Meeting (29.05.2017)

Only in the DRC: President Kabila are now twice Registered for a Non-Existent Election!

Well, in the Democratic Republic of Congo, the one who is on his unofficial third term President. He is running the country on a new cabinet, but not on a new mandate. As per today, the Constitution isn’t allowing him to re-run. He was temporary before his first term for a few years. He was running the Republic without elections between 2001 and 2006. Than he finally got elected in 2006 and than again in 2011. He was supposed to have ended his term in 2016, but that train has passed it due-date by a few months already.

President Kabila is already 160 days overtime, he is 5 months and 9 days. That is well over the supposed time. That is not counting the days he was in-charge without an official election between 2001-2006. So he has a history of running the 3rd Republic without any mandate. That is what he does today!

So the first he registered for an election without himself at the helm was back on the wonderful day of 6th May 2016. It is easy to forget that Kabila did that on a computer looking smart and ready. Vigilant like always, the vagabond ruling Kinshasa and the provinces as well. Today on the 28th May 2017. He was doing the same maneuver. Registering himself for an election. This time without CENI having set any dates, any regulations or credentials needed for candidates. Therefore this exercise was more PR than real. Surely paid lobbyist Bob Dole and others, who are working to better the image in the United States can smile. Since this act will make it more sincere that President Kabila wants to honor the promises of the CENCO agreement of 31st December 2016. So twice now, Kabila has registered himself to something he doesn’t plan to do. Because if he does, that means he loses and someone else will run it.

This is something Kabila knows and the world already knew. If the know the DRC and its situation this wouldn’t be surprising. At this point Kabila acts like he own the Republic and the Republic owes him a big deal. Therefore, he cannot leave and has no plans of exiting the throne that he inherited from his father. It seems like the time and present moment, that the instability and insecurity is also facilitated by the government. To create problems and make it worse. This to be able to postpone the elections and keep his ruling fist. It does seem plausible that by all means he wants to stay in power. Therefore, he has even been seen in the city of Lubumbashi with tanks in recent year, to prove to Moise Katumbi and his supporters. That this place is also ruled by Kabila.

I have no faith that Kabila will honor any agreement that doesn’t extend his rule. Not because he deserves to stay as the President. But because he has shown no signs of giving the mantle to anyone else or put some ready for succession. No-one has even been groomed, only people been doomed for wishing to become Presidential Aspirants, therefore they have ended in exile in Belgium. The nation that took DRC and built massive mansions on their looted fortunes. This is ironic, but the truth. Certainly, Kabila will not back-down and give-up quickly. He has no plan to give in. Peace.

Looking into the inflation of 1987 as the Sugar prices are rising in today’s Uganda!

We have had a wonderful collaboration with IMF since 1987. We have managed to control inflation. By controlling inflation, we have succeeded in preserving the people’s earnings” – Yoweri Kaguta Museveni (State House, 2017).

Well, there been many who has set similarities with the inflation and price shocks of the year 1987. The Republic of Uganda has been through their mess before. The government of Uganda and the National Resistance Movement/Army (NRM/A) had just taken power in 1986. This was a year after the coup d‘etat, which brought the NRA into power. President Yoweri Kaguta Museveni in collaboration with International Monetary Fund (IMF), which had agreements and Structural Adjustment Program (SAP), which promoted deregulation and less state control of the economy. This was also put forward to settle inflation and the deficit that the state had.

So, because some has put similarities between 1987 and 2017, as the prices has gone from about 3,000 Uganda Shillings (UGX) in 2016 and 7,000 Uganda Shillings (UGX) in 2017. There is clearly that there was problems in 1987, but whole another level. The Sugar Industry wasn’t established, the economy of Uganda needed export of coffee and this was the sole benefit of foreign currency into the economy.

Inflation in Uganda is running as high as 200 percent, and low prices to farmers serve as a disincentive to agricultural production in a country of rich soil and mild equatorial climate” (…) “At the center of the debate is the issue of devaluation. In its first year in office, the Government revalued the currency from 5,000 to 1,400 shillings to the dollar, saying that the move would make imports cheaper. But exports have become increasingly expensive. Devaluation Debated. Some hard-line nationalists in Government insist that the cost of devaluation would be devastating. The cost of such imports as sugar, cooking oil and soap would increase significantly, they say, making the average Ugandan even worse off than he is now” (Rule, 1987).

In 1987 the Uganda shilling was demonetizated during the currency reform and a currency conversion tax at a rate of 30% was imposed to further reduce excessive liquidity in the economy. There was an immediate drop in average inflation from 360.7% in May to about 200% cent in June. However, with the possible fears of complex and drastic currency reform, the premium shot up, representing essentially a portfolio shift to foreign currency, and possible capital flight, and suppressed inflation. The intended aim of the conversion tax, apart from reducing excessive liquidity, was to lend money raised through this tax to the government. This was to finance the budget deficit over a short period, rather than financing it through printing more money. Nonetheless, inflation shot up again within three months mainly due to renewed monetary financing of increased government expenditure, domestic credit expansion by commercial banks to meet coffee financing requirements and financing of the newly launched rural farmers scheme” (Barungi, P: 10-11, 1997)

Prices for sugar and vegetable oil (both imported goods) increased rapidly in the early part of the year, falling between May and August — replicating the pattern of the premium between the parallel and the official exchange rate. The subsequent fall in sugar prices and stability of cooking oil prices were due to greater official imports. Inflationary pressures on food prices have been aggravated by supply shortages on account of severe transportation problems” (World Bank; P: 36, 1988).

In October 1986, Mulema was replaced by Dr. Crispus Kiyonga, who has a medical background Kiyonga has a difficult task. The government’s finances are shaky at best. In an attempt to enable Ugandan citizens to purchase imported consumer goods, the government fixes their prices below world prices. This, of course, puts considerable pressure on the government’s finances: for example, in July 1986 the government imported $4.8 million worth of sugar to sell at subsidized prices” (Warnock & Conway, 1999).

Perspective from Kakensa: “Today sugar costs 7000/- per kilo. When Museveni came to power in 1986 each kilo was at 4/-(four shillings). Immediately he came to power he said Ugandan shilling had lost value, in 1987 all money was changed, not only changed but two zeros were cut off to give it value on addition to the 30% levied on each shilling. This means on every 100 shillings, you got 70cents. Those who had 100,000/- got 700/-” (Kakensa Media, 12.05.2017).

We can see there was certain aspects, but the sugar industry now is different. The Sugar factories are now real and the business are now in full affect. While, in 1987 the state needed coffee exports to get funding and foreign currency. The sugar was imported and was put on fixed prices. The inflation back then was because of the crashing economy after the bush-war and the effects of it. The Sugar prices now are rising for different reasons. These reasons are the yields of sugar-cane, the hoarding of sugar and the export of surplus sugar. Also, the production of ethanol and bio-fuel. That was not the situation and context in the past.

Still, history is repeating itself, since the NRM, let the prices run as crazy in the past. The price has gone up a 100% in a years time. Which, means the prices who doubled from 3000 to 7000 Uganda Shillings. This is not a stable and the ones who get hurt is the consumer and Ugandan citizens. Peace.

Reference:

Barungi, Barbara Mbire – ‘EXCHANGE RATE POLICY AND INFLATION: THE CASE OF UGANDA’ (March 1997).

Rule, Sheila – ‘UGANDA, AT PEACE, IS FACING ECONOMIC BATTLES’ (28.01.2017) link:http://www.nytimes.com/1987/01/28/world/uganda-at-peace-is-facing-economic-battles.html

State House Uganda – ‘President commends Uganda – IMF collaboration since 1987’ (27.01.2017) link: http://statehouse.go.ug/media/news/2017/01/27/president-commends-uganda-%E2%80%93-imf-collaboration-1987

Warnock, Frank & Conway, Patrick – ‘Post-Conflict Recovery in Uganda’ (1999)

World Bank – ‘Report No. 7439-UG: Uganda – Towards Stabilization and Economic Recovery’ (29.09.1988)

A look into the rising Sugar prices in Uganda!

I commissioned a state-of-the-art ethanol distillery at Kakira Sugar Factory in Jinja today (Museveni, 23rd January 2017)

There are various of reasons for the rising prices of Sugar and processed sugar in Uganda. This isn’t the first time or last cycle of inflation on the prices of this common commodity. Sugar is common in Uganda for concept of having in it in the chai or the milk tea. To sweeten the milk and the black tea the Ugandans drink. Therefore, the Ugandans are needing and using lots of it on daily basis. It isn’t a luxurious goods, but a daily usage, for ordinary use. It has become staple and is staple together with matooke, cassava, rice and maize flour. This is all seemed as basic for the Ugandan people. Sugar is something very important. Therefore, the rising prices says something is out balance.

The balance have now been lost a year after the election. The prices of goods and food was also rising in 2011, therefore, the Republic had the Walk 2 Work demonstrations. These was demonstrations against the rising food prices, which also meant the sugar at that time went up. The same is happening now. With also on alternative exception, that the producers are not only creating sugar for consumption anymore, but ethanol and bio-fuel. Therefore, the produce and profits are going to export bio-fuel and other products, instead of the sugar that the consumers in Uganda uses. This also is an explanation for the rising prices, as well the added exports to Kenya, where the producers gain more selling it there. Than in Uganda, take a look!

In April 2017 USMA commented:

Uganda Sugar Manufacturers Association (USMA) says the increase in sugar prices has been prompted by the increase in cost of production and the deprecating shillings against major currencies. The Association’s Chairperson, Jim Kabeho says sugar millers were forced to announce what he called a paltry 4 percent increase on each 50-kilogram bag on ex-factory price. The increase according to Kabeho saw a 50-kilogram bag of sugar trading at one hundred and eighty five thousand shillings up from one hundred and seventy thousand shillings” (…) “Meanwhile a source at the Ministry of Trade Industry and Cooperatives who asked for anonymity says the Ministry suspects that the big players like Kakira could have decided not sell its sugar to the market so as to increase production at the ethanol its ethanol plant. The sources says sugar mills with ethanol plants are finally making money on sugar through on co-generation of power, alcohol and ethanol” (URN, 2017).

In April in Masindi:

Masindi district leaders have risen up against the Masindi district Resident Commissioner, Godfrey Nyakahuma over stopping sugar cane buyers from buying cane from Masindi district. Last week, Nyakahuma launched an operation of impounding trucks of all sugar cane buyers who buy sugar cane from Kinyara sugar limited out growers and over five trucks loaded with cane were impounded by police” (…) “Byaruhanga added that that is a sign indicating that Kinyara sugar Factory has no capacity to crush the available sugar cane adding that since Uganda has a liberalized economy let everyone come and buy the abundant cane available instead of leaving the farmers suffer with the monopoly of Kinyara sugar factory. Amanyire Joshua the former mayor Masindi municipality said that if Kinyara is saying that sugar cane buyers are poachers, Kinyara sugar factory is a smuggler because it is also doing the same. Mary Mujumura the deputy speaker Masindi district blamed Byaruhanga Moses the presidential advisor on political affairs for failing to advise the president on political issues saying that he is not supposed to enter into business matters” (Gucwaki, 2017).

In May 2017:

From last year’s average of Shs 3,000 per kilo of sugar, the price shot to Shs 4,000 early this year and is now hovering over Shs 5,500. A kilo of Kinyara sugar is the cheapest at Shs 5000, while Kakira sugar is selling at 6,000 a kilo. On the shelves, Kakira sugar and Lugazi sugar are scarce compared to Kinyara sugar, which is in plenty. Many dealers have now started hoarding sugar in order to benefit from anticipated price hike in the short term” (URN, 2017).

In May 2017 – Stanbic Statement:

The only category to buck that trend was wholesale & retail, where staff costs rose and employment fell. Average purchasing costs also rose in April, reflecting increased prices for animal feed, food stuffs, raw materials and sugar. Higher cost burdens were passed on to clients, leading to a further increase in output charges” (Stanbic Bank, 2017).

President Museveni praises Kakira Millers:

I would like to thank the Madhvani Group, despite the disappointment by Idi Amin. The family pioneered the production of sugar in Uganda. By 1972 they were producing 70,000 tons but today they have almost tripled the production to 180,000 tons,” he said. The President was today commissioning a state of the art ethanol distillery at Kakira Sugar Limited in Jinja district. The US$36 million facility, which is the largest in the East African Region, will be producing 20 million litres of ethanol annually” (…) “President Museveni pledged to address the issues to regulate the sugar industry but urged the Madhvanis to partner with farmers with large chunks of land for production of sugar-cane, as the cane is not a high value crop. He said people with small land holdings should be left to do intensive farming like the growing of fruits that give high returns. Turning to the issue of prices payable to sugar-cane out-growers, President Museveni advised the buyers and out-growers to sit together and agree on the prices taking into consideration the market prices globally” (Uganda Media Centre, 2017).

Government statement on the 11th May:

Speaking to 256BN on condition of anonymity a government official monitoring the situation said the manufacturers have not increased the factory price, but he conceded that the situation is worrying. “At the factory prices are stable. Why is it that the prices at the retail gate are high. This means that there are some distributors who are using the hiding strategy in order to rob Ugandans. As Government we shall continue monitoring the situation until we come up with the solution” the official said. Affordability of sugar is considered a key barometer of an ordinary person’s well-being and its pricing can take on political dimensions when people cannot have sugar with their tea” (256BusinessNews, 2017).

Putting the price in pespective:

Kakensa Media reported this today: “Today sugar costs 7000/- per kilo. When Museveni came to power in 1986 each kilo was at 4/-(four shillings). Immediately he came to power he said Ugandan shilling had lost value, in 1987 all money was changed, not only changed but two zeros were cut off to give it value on addition to the 30% levied on each shilling. This means on every 100 shillings, you got 70cents. Those who had 100,000/- got 700/-” (Kakensa Media, 12.05.2017).

This is all proof of a systemic malpractice, where both export, together with lacking yields because of drought and also the production of ethanol and bio-fuel. All of this collected together are reasons for the rising prices of sugar. The sugar price goes up because the use of cane for other things than millers producers sugar for consumption, but for other export products. This is all making sure even as the Republic of Uganda has in the past produces to much, it now doesn’t. Since it elaborately uses the sugarcane for other products.

That has made the Madhvani Group rich and their exports of sugarcane products are clearly selling. Now even their basic milled sugar are sold more expensive on the Ugandan market. There are also proven problems by other millers, who either has to much cane like Kinyara Sugar Factor in Masindi. Which is ironical problem, as the Kakira and Lugazi sugar is empty on the shelves, while the sugarcane hoarding Kinyara are still in the shops. But Kakira which is produced by Madhvani Group, we can now understand, since they have bigger operation and is blessed by the President for their industrial production of ethanol and bio-fuel.

Therefore, the are more reasons than just shopkeepers not getting enough stocks. That the rising prices are not only that there is lacking production. It is the system of export and production. Where the cane isn’t only becoming milled sugar for consumption, but for all the expensive industrial exports like bio-fuel and ethanol. This is all good business, but also bad for consumers and citizens who are accustom with decent prices for their sugar. That is not the fact anymore, as the business and millers has found new profitable ways. So that the surplus sugarcane and also the other gains massive profits. This is all good business for the owners of the sugar-millers and sugar industry. The one who feels the pitch is the consumer and the citizens. Who see scarcity of sugar inside the shops and also the inflation of prices on the sugar. Peace.

Reference:

256BusinessNews – ‘Government to issue statement on sugar’ (11.05.2017) link:http://256businessnews.com/government-to-issue-statement-on-sugar/

Gucwaki, Yosam – ‘MASINDI RDC IN TROUBLE OVER STOPPING SUGAR CANE BUYERS’ (28.04.2017) link: http://mknewslink.com/2017/04/28/masindi-rdc-trouble-stopping-sugar-cane-buyers/

Stanbic Bank Uganda – ‘Ugandan economic growth continues at start of second quarter’ (04.05.2017) link: https://www.markiteconomics.com/Survey/PressRelease.mvc/143ca2b8e3d84c79b96aed4885b7337e

URN – ‘Sugar manufacturer’s association explains price hikes’ (14.04.2017) link: https://dispatch.ug/2017/04/14/sugar-manufacturers-association-explains-price-hikes/

URN – ‘Uganda: Sugar Crisis On for Another 2 Years – Manufacturers’ (09.05.2017) link: http://allafrica.com/stories/201705100129.html

Uganda Media Centre – ‘President Praises Madhvani Group’ (05.05.2017) link: https://mediacentre.go.ug/news/president-praises-madhvani-group

Opinion: President Kabila appoints new Cabinet, but he is 141 days on overtime! (Time to leave for Togo?)

On the 19th December 2016 the last term of President Joseph Kabila went out. The Democratic Republic of Congo we’re the opposition negotiation through Conférence Episcopale Nationale du Congo (CENCO) agreement on the 31st December 2016. Still, the President hasn’t left any sign of leaving. As the Army are fighting on different front, are trying to avoid more problems, but having civil war situation in Kasai-Oriental, where the province has rebels killing and the army doing the same.

There are not been any visible signs that he is stepping down or giving way. Neither any clear signs of up-coming elections. Like there are just figment of imagination that his term went out in December 19th 2016. That is 4 months and 20 days that he is on overtime, without any consideration of the violation of the Third Republic. The Democratic Republic of Congo deserves better and should have legitimate President. Also, if you count days he has already spent total 141 days, which he shouldn’t be the Commander-in-Chief and President.

Therefore, 141 days on overtime, the news that he has unleashed a new cabinet and new set of ministers. Proves the violation and the rights of the Republic is being misused and misguided. I don’t care to look into the men and woman appointed, because that isn’t fair to the citizens of the DRC. They deserve a legit President and a regime they have elected. Not someone using the army and the resources as their personal business.

Even if on this date that the President appointed 47 Ministers and 11 Vice-Ministers. They are surely all loyal to Kabila, as they doesn’t care about the constitution, nor the laws that the Third Republic are supposed to have.

The Constitution of 2005 says clearly:

Article 70: The President of the Republic is elected by direct universal suffrage for a term of five years which is renewable only once. At the end of his term, the President stays in office until the President-Elect effectively assumes his functions” (Democratic Republic of Congo – The Constitution of 2005).

So he has had two terms, plus the waiting term after the assassination of his father, who also was President. Therefore, because of that, he has already had three terms in that respect, but only elected in two. Now he is on his fourth without any consent or ballots. That because cannot be elected as long as the Constitution is written like this. The thing that he didn’t do, like many other totalitarian leaders, they change the laws to fit their paradigm and continues “legally”. He is functioning as President while waiting to President-Elect assumes his functions. But with no election and no plan of doing so, there is no evidence of him leaving.

That is even more evident as he changes and appoint a new Cabinet, with lots of ministers loyal to him. It is within the law that he appoint ministers. Still, it is 141 days since he had legitimate powers and was the President. Right now, he shouldn’t be preoccupied with who leads Communications or where Lambert Mende is working. President Kabila, should be come a civilian or join Yayah Jammeh in Equatorial Guinea, even go to Togo like Mobotu!

After a weekend of confusing reports on Mobutu’s whereabouts, CNN confirmed on Monday that he was in Togo, escaping there early Sunday just ahead of rebels advancing on his home in the northern Zairian village of Gbadolite” (…) “Mobutu — who fled Kinshasa on Friday, the day before rebels entered the capital in force — was resting in a residence belonging to his old friend, Togolese dictator Gnassingbe Eyadema, government officials in the West African nation said” (Arnett, 1997).

So if he would do the 3rd Republic a favor, he would leave the Presidency and leave the Nation. It doesn’t seem to be possible at this point. President Kabila has not conceded or tried to give way. Therefore, the trust of him leaving power, seems day-by-day unlikely. President Kabila shows that he uses his power and capacity, as the army are loyal to him. This proves that the elections seems far-fetched, since he has not showed anything feasible or even tried to even get tenders for ballots.

That President Kabila will say elections are expensive, the are to many rebellions, that the M23 are in the Kivu’s, that FDLR are doing their thing, that ADF-NALU still existing, that the Kamunia Nsapu and other groups killing in different provinces. This will all be used as tactics to postpone the elections and make sure there are no official date for elections, nor ordering ballots or securing funds for the Commission Electorale Nationale Indépendante (CENI). They will all be left behind, since there are no plans or wish of the President to get a successor. That means he will leave all his power behind!

This new government is just a disgrace… and not respecting the Constitution of the 3rd Republic. Neither, it is clear disrespect of the people and republic. President Kabila doesn’t own the nation and the public doesn’t owe him anything, they deserves some who legitimate rule them. Time for Kabila to follow the fleeing President and leave for Togo! Peace.

Reference:

Arnett, Peter – ‘Mobutu in Togo as Zaire rebels assume leadership’ (19.05.1997) link:http://edition.cnn.com/WORLD/9705/19/zaire/index.html?eref=sitesearch

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)

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

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