Friday, May 26, 2017

VIDEO: #Uganda Finance minister finally concedes - the economic slowdown is real @StateHouseUg @DailyMonitor @URA_CG @KCCAED



The following analysis is bang on.  The only thing the gentleman left out was some harsh words for the Uganda government.  For example, the land is Agri-based.  The government land grabs and so many families now have no land to grow food.
The other really big one that no one is talking about is evicting vendors off streets, burning markets and demolishing markets to the point of taking away income earning opportunities from a minimum of 100,000 people.  Consequently, it should come as no surprise that people cannot pay rent, cannot pay school fees, no medicine, no medical services, transportation slowing, arcades / malls (those fancy cheer leaders of street vendors take away our business) have high occupancy rates and so do hotels.  Apparently no one realised that vendors and market dwellers provide business for others.  
You go right ahead and keep at it.  Then this KCCA which has always brutally arrested our people, destroyed their stalls and even shot our people dead (Agaba, #BabyRyan) has the audacity to raise taxes on 23 items apparently because revenue is tight.  WHO are your policy analysts and economic planners? Can you not see that what you take away from poor Ugandans to hoard for yourself means we shall not afford to buy from your businesses?  
Practically, the city of Kampala is being built and apparently "developed" on the blood and corpses of many. The dead shall haunt Kampala and keep doing it such that you flood, you get feaces into your water, you get cholera and typhoid until you realise that you caused much injustice and suffering to Ugandans.
URA  is in the habit of killing businesses which are anti - Museveni.  This is public knowledge. Not only does URA mis-use the taxes paid by suffering Ugandans but they are involved in all sorts of deals that make little sense. For example that silly oil handshake. What was even that?  You tax SME to the bone till they close shop.  You give tax breaks to tycoons.  OH..do you want me to remind you of the Tullow $157M tax waiver? Anyway, Tullow is gonna land in court in UK just like ENI and Shell in Italy for the injustices they caused in Nigeria.  Sure, Tullow is pulling out but these things last forever.  I believe the statute of limitation is 7 years and we can apply to go further behind.
Martha Leah Nangalama
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The Ministry of Finance after years of cheerleading on the economy, has finally admitted that the economy is reeling after years of a slowdown. Inflation is up in the double digits a change from the 5-6 per cent average from last year and 10-11 per cent in 2014-2015. The exchange rate is trading at the higher end of the band at Shs3,640-Shs3,670. Finance added by stating the obvious that economic growth will peak at 4 per cent in 2016-2017 off target a measly number given Uganda's nearly 3 per cent per annum population growth.
URA hit the final blow announcing it was still Shs200 billion off targeted collections. URA tax collections in the past decade have been padded by one-off revenue windfalls like the sale of crude oil the use of which proceeds have attracted controversy in the ongoing oil investigations in Parliament.
The inflationary pressures in the food sector are expected. A prolonged dry spell last year left many small holders without planting material. The drought hit livestock areas hard. It also turns out that the good politics of East Africa supplanted important policies on food security and mandatory storage of grains. Buying emergency food came with drastic cuts in government expenditure, yet government is the largest single consumer in the economy.
Maize, a common staple now, is nearly Shs3,000 and likely to rise as our neighbours Kenya face an even steeper grain deficit. The good politics of the community have seen traders running away from Ugandan store shelves where sugar is just Shs5,000 to Shs7,000 to Kenya where a kilogram fetches nearly Shs10,000. Struggling to close the gap in revenue collection, government has hit the money markets hard. Wise banks wary of risky lending prefer to make money off of government.
Government debt interest payments have spiked to nearly 40 per cent of the budget less than 10 years after winning debt relief in 2008. The total debt stock is alarming and has cast major government infrastructure initiatives like the SGR railway in negative light. At this point, it is difficult to say with certainty that the railway, pipeline and ongoing infrastructure developments can be implemented at the same time.
URA hit the final blow announcing it was still Shs200 billion off targeted collections. URA tax collections in the past decade have been padded by one-off revenue windfalls like the sale of crude oil the use of which proceeds have attracted controversy in the ongoing oil investigations in Parliament.
The inflationary pressures in the food sector are expected. A prolonged dry spell last year left many small holders without planting material. The drought hit livestock areas hard. It also turns out that the good politics of East Africa supplanted important policies on food security and mandatory storage of grains. Buying emergency food came with drastic cuts in government expenditure, yet government is the largest single consumer in the economy.
Maize, a common staple now, is nearly Shs3,000 and likely to rise as our neighbours Kenya face an even steeper grain deficit. The good politics of the community have seen traders running away from Ugandan store shelves where sugar is just Shs5,000 to Shs7,000 to Kenya where a kilogram fetches nearly Shs10,000. Struggling to close the gap in revenue collection, government has hit the money markets hard.
Wise banks wary of risky lending prefer to make money off of government. Government debt interest payments have spiked to nearly 40 per cent of the budget less than 10 years after winning debt relief in 2008. The total debt stock is alarming and has cast major government infrastructure initiatives like the SGR railway in negative light. At this point, it is difficult to say with certainty that the railway, pipeline and ongoing infrastructure developments can be implemented at the same time.
The resolution of Crane Bank at great cost to government through Bank of Uganda saved the banking sector from further haemorrhaging on bad debts; most big banks with the exception of Stanbic and Centenary banks, have seen profits plummet. Crane Bank affairs highlighted other structural problems in the economy. Just one out of the banks' top 50 managers was Ugandan.
This issue long swept under the floor under a permissive foreign directive investment regime is an issue in key economic sectors, including tourism, commercial agriculture and oil and gas. Uganda never publishes employment figures itself a shameful slap on BoU, the Uganda Bureau of Statistics and Labour ministry. So like the telecom networks who can't register and verify at the same, we really can't apply the right medicine to the right economic condition.
By Karoli Ssemogerere - Mr Ssemogerere is an Attorney-at-Law and an Advocate
DAILY MONITOR




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