tag:blogger.com,1999:blog-518956322285749292024-03-14T06:27:02.468+03:00ANAGRAM OF A GAZING EYEShredded Thoughts!!!!mumakeithhttp://www.blogger.com/profile/01830783058553136408noreply@blogger.comBlogger138125tag:blogger.com,1999:blog-51895632228574929.post-50635777754568649322015-01-07T11:30:00.000+03:002015-01-07T11:41:22.356+03:00Ayanda & Asio<span style="font-family: Verdana, sans-serif;">The wait. The anxiety. Dozens of steps had been made. The nurses, often, looked at me. Giggled. Then they were back to work. At 1130hours, the wait was over. Ayanda was here. The mother, Asio, was fine. Only she can explain the pain she had been through. </span><br>
<span style="font-family: Verdana, sans-serif;"><br></span>
<span style="font-family: Verdana, sans-serif;">"She looks like you," she said. "No she doesn't. She look like you," I say. "She looks like you," she said. "No she doesn't. She look like you," I say. [This debate is still ongoing. It will probably never end.] </span><br>
<span style="font-family: Verdana, sans-serif;"><br></span>
<span style="font-family: Verdana, sans-serif;">A few hours after Ayanda was born, I sneezed. Almost simultaneously, she sneezed too. There was a five seconds silence in the hospital room. Then laughter. Someone remarked: "You can't really deny you're her father." Then there were more giggles. </span><br>
<span style="font-family: Verdana, sans-serif;"><br></span>
<span style="font-family: Verdana, sans-serif;">That is what Ayanda has been for us in the last one year. She's grown. Called her mother "Auntie" and called her father, erm, no name yet. She smiles often. Then cries. Then pulls the table mats off the table. She will eat. Then she'll refuse. With her big eyes [this is a feature she picked from her mother] she gazes at the world.</span><br>
<span style="font-family: Verdana, sans-serif;"><br></span>
<span style="font-family: Verdana, sans-serif;">Asio is the heroine</span><span style="font-family: Verdana, sans-serif;">. I am just the writer. She endured nine months of an extra 3.3kgs. She went shopping for baby clothes. She was induced. She had to push. I was pacing in the corridors. Then there is breastfeeding. Then the lifestyle adjustment. The baby bump. It is called motherhood. In the last one year, I have learnt a lot from her [wait, she doesn't know]. </span><div>
<span style="font-family: Verdana, sans-serif;"><br></span>
<span style="font-family: Verdana, sans-serif;">The one year has been roller-coaster. </span><br>
<span style="font-family: Verdana, sans-serif;"><br></span>
<span style="font-family: Verdana, sans-serif;">Immunization. </span><br>
<span style="font-family: Verdana, sans-serif;"><br></span>
<span style="font-family: Verdana, sans-serif;">I have not missed a single day in the immunization room. These are moments we don't get back once missed. Watching that injection being sunk into her tender skin is painful. You'll feel sorry for her. Of course she will cry and the keeping her quiet is another challenge. Tears will roll down her cheek. </span><br>
<span style="font-family: Verdana, sans-serif;"><br></span>
<span style="font-family: Verdana, sans-serif;">Often, the breast does the trick. Not my breast. Asio's breast. </span><br>
<span style="font-family: Verdana, sans-serif;"><br></span>
<span style="font-family: Verdana, sans-serif;">She'll throw her head back and forth. That way, you can't ignore her. </span><br>
<span style="font-family: Verdana, sans-serif;"><br></span>
<span style="font-family: Verdana, sans-serif;">A few months ago, I walked into a baby shop, without Asio. I got strange stares. With the exception of the shop owner, I was the only male shopper. Clothes were bought. They were perfect fits. I chest thumped. I did it again more recently. And my-oh-my, I could do it again. </span><br>
<span style="font-family: Verdana, sans-serif;"><br></span>
<span style="font-family: Verdana, sans-serif;">Then there was that moment at the pharmacy when the pharmacist asked: </span><br>
<span style="font-family: Verdana, sans-serif;"><br></span>
<span style="font-family: Verdana, sans-serif;">"How many kilograms is your child?" </span><br>
<span style="font-family: Verdana, sans-serif;"><br></span>
<span style="font-family: Verdana, sans-serif;">I replied: "From the last visit to the Dr's about a week ago, she should be 10.5kg." </span><br>
<span style="font-family: Verdana, sans-serif;"><br></span>
<span style="font-family: Verdana, sans-serif;">She turned, looked at me and said: "Wow, you know your kids weight? That rarely happens with fathers who buy medicine from the shop." </span><br>
<span style="font-family: Verdana, sans-serif;"><br></span>
<span style="font-family: Verdana, sans-serif;">"It is normal to know a child's weight. A father just has to be interested," I replied. </span><br>
<span style="font-family: Verdana, sans-serif;"><br></span>
<span style="font-family: Verdana, sans-serif;">Parenting is not that easy. At least you do not need a text book to know that. All children a unique. The experiences are different. There is a lot of sacrifice. In fact, if we have not attended your party, wedding meeting, wedding, introduction and long-nights-out et al, we apologize. Sometimes, the little one needs out attention and we must adhere. She is our responsibility. </span><br>
<span style="font-family: Verdana, sans-serif;"><br></span>
<span style="font-family: Verdana, sans-serif;">That said, we appreciate the invites. </span><br>
<span style="font-family: Verdana, sans-serif;"><br></span>
<span style="font-family: Verdana, sans-serif;">Some have asked, what's her name: She is Natukunda Ayanda Aturo. Natukunda in my language - or well I don't have to tell you the language, do I? - means "He loves us." This is also my mothers name. Ayanda is a Zulu name [its meaning; "they augment." Usually given to first a born] This name was picked to celebrate the great African Girl - Our daughter. I do watch Isidingo [since 2001] and the first time I heard the name Ayanda, I liked it. I had to find out what it means. We want her to be great. </span><span style="font-family: Verdana, sans-serif;">Aturo means flower in Ateso. In celebration of multiculturalism, integration and intermarriages, a name from her mother had to come in handy. </span><br>
<span style="font-family: Verdana, sans-serif;"><br></span>
<span style="font-family: Verdana, sans-serif;">So, questions like, what is her christian name? should be answered by this explanation. </span><br>
<span style="font-family: Verdana, sans-serif;"><br></span>
<span style="font-family: Verdana, sans-serif;">Note, name picking is never that easy. I had a list of fifty. Asio had given me the responsibility of finding a name for our baby. In nine months, I was doing just that. I was pregnant with names. </span><br>
<span style="font-family: Verdana, sans-serif;"><br></span>
<span style="font-family: Verdana, sans-serif;">Today we celebrate her life. Today, Ayanda makes one more step into greatness. </span></div>mumakeithhttp://www.blogger.com/profile/01830783058553136408noreply@blogger.com5tag:blogger.com,1999:blog-51895632228574929.post-45344261229868762962014-10-17T13:25:00.002+03:002014-10-17T13:25:48.304+03:00Dear reader, I apologize <div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">The
newsroom is like a marketplace. We trade news. Some say we peddle rumors. We
are criticized more often than not. A reader opens the newspaper and from page
one, they shred whatever we are writing. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">The
majority – of Ugandans - do not have access to the newspapers. On radio
stations, time is dedicated for shows on political, health, education and
economic issues. The next day we move on to the next story. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">Dear reader,
the newsroom is shrinking. The journalist – sometimes - is the editor and
sub-editor. He has limited time to think. He has to feed you on the news - and
more news. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">The
journalist is a graduate in Mass Communication. He was taught how to write and
less on how to report a beat. He is “self teaching” on economics, finance,
history, taxation and business. He has to read tones of information in order to
report better. He is expected to produce a flawless article. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">The
journalist is told to be objective. Leave emotions at the door. To present the
facts – let the reader decide. A journalist is expected to have a high level of
integrity. I apologize where we have not been all the above mentioned. We are
human, after-all.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">A
journalist is told to dig deep into an issue. While he is digging. A fire. An
eviction. A press conference. A workshop. Mbabazi is sacked.
Death. The reader is waiting for the news. The digging is put on hold. Then it
resumes. A source lies to you. Another source lies to you. Another one tells
you the truth. Then another presents the facts. You’re then given the facts.
You write. Story is published. A source calls you. You misquoted him. Then you
move on to the next story. Years later, you are reporting the same issue. Nothing
has changed. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Candara, sans-serif;">Knowledge
is power. Yes, that is what you have been told. A journalist is expected to have the knowledge on a topic they write.
Uganda is facing rampant power cuts. Fact. Umeme is responsible. Fact. UETCL is
responsible. Fact. An old dam is responsible. Fact. NSSF bought shares in
Umeme. Fact. They sidestepped procurement procedures. Fact. [No they did not. Yes
they did. No they did not. Yes they did]. The Standard Gauge railway is good
for Uganda. Fact. We need it. Fact. On that single project, our debt will
increase by over 100 percent. Fact. Infrastructure is important if we are to
grow. Fact. It is perhaps the most expensive railway. Fact. Multinationals
avoid taxes. Fact. Liberalization is bad. Fact. It is good. Fact. Liberalization has opened up the banking sector. Fact. We are mortgaging our oil, even before a drop. Fact. See, I
am knowledgeable. Not quite. I know the facts; that’s it. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">A
journalist has no monopoly of knowledge. There are lawyers, accountants,
economists and bankers. Most are more educated than we are. We are expected to
expose what they are doing wrong – or even right. </span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">Still, the reader expects no
excuses. They expect a story that answers the how, when, what, who, where and
when. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">We rub
shoulders with influential people. They have an agenda. To be seen as doing
good. That doesn’t make us experts. It doesn't make us influential. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">The clock
is ticking. We ain’t growing any younger. We want to change the world. You
want to be influential. The world is not changing because us. The world says "you write well." That's it. An award here - or not. A grant there. A visa - denied. A scholarship - try again next year. We leave the newsroom. To pursue other dreams. </span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">Dear Reader, we can’t give you a good story all the
time. But we can give you well packaged facts, to keep you reading. We are flawed. We have sold our souls. Money is all around. Hovering above our heads. We've taken it. We've failed you. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">Dear
reader, I apologize. <o:p></o:p></span></div>
mumakeithhttp://www.blogger.com/profile/01830783058553136408noreply@blogger.com4tag:blogger.com,1999:blog-51895632228574929.post-74506842087075945352014-07-17T11:33:00.001+03:002014-07-17T11:58:05.244+03:00Is Uganda a liability for Tullow Oil? <div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">Neymar was
the poster boy for Brazil in the World Cup. He was all over billboards and
adverts during the World Cup. When he got injured, Brazil crumbled. They
conceded a record seven goals. Tullow similarly has been the poster company for
oil discoveries in Uganda. Tullow risked its dollars. The company, in a
statement says they have spent close to US$2.8bn in Uganda in the last 10years.</span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">Over the last one year, we cumulatively could be looking at confirmed unrecoverable
liabilities of US$182m. The ruling by the Tax Appeals Tribunal ideally would place the liabilities of the company at between US$450m and US$500m. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">Tullow
abandoned drilling for oil on Lake Albert – the Ngassa discoveries. This area
stretched almost close to the Democratic Republic of Congo on Lake Albert.
<a href="http://www.tullowoil.com/index.asp?pageid=137&category=&year=2009&month=&tags=&newsid=640" target="_blank">Flashback to 2009, Angus McCoss, the Exploration Director at Tullow said Ngassahad the “potential to be the largest in the basin.” He also described it as a “significant oilfield.”</a> </span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="http://4.bp.blogspot.com/-SLHRo49Z1mo/U8eGh-32liI/AAAAAAAABVU/jNDGw1R5ZHE/s1600/tullow-oil-logo-fireworks-advertising.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://4.bp.blogspot.com/-SLHRo49Z1mo/U8eGh-32liI/AAAAAAAABVU/jNDGw1R5ZHE/s1600/tullow-oil-logo-fireworks-advertising.jpg" height="200" width="198" /></a></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">Fast-forward to 2014, in February, Tullow told its investors that they
were a<a href="http://ugandaradionetwork.com/a/story.php?s=61122" target="_blank">bandoning the Ngassa discoveries.</a> Investors were told that “Ngassa has
been written off due to offshore appraisal and development being currently uneconomic.”
Abandoning this discovery area cost Tullow about US$67m. This means that all
the money Tullow spent on appraisal and exploration for these discoveries is a
loss. It is not recoverable if oil production starts. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">There was
more to come: More bad news for the Irish company. In the half year operational
update released in early July 2014, <a href="http://ugandaradionetwork.com/a/story.php?s=64998" target="_blank">Tullow admitted it was forgoing US$115m duefrom CNOOC and Total. </a>In 2012, Tullow sold 66.6% of its assets to the two
companies at US$2.9bn. About US$300m of this was placed in a reserve account
and would be paid to Tullow as soon as it had shown evidence of some promised "deliverables."<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">Tullow said
this $115m loss was due to delayed project approvals and failure to secure
license extensions. The delayed project approvals could not be revealed, as the
company tows the confidentiality line. From my understanding though, “delayed
project approvals” means the eight production licenses Tullow applied for as
far back as 2012. </span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">Tullow applied for Production Licenses for Mputa, Nzizi, Kigogole,
Nsoga, Ngara, Ngege, Kasamene and Wahrindi. A production license is like owning
land with its title. Before you secure that land title, you cannot construct on
the land or even use it as security for a bank loan. Similarly, a production
license is what companies use to secure financing for eventual commercial
production of oil. <a href="http://www.theceomagazine-ug.com/blog/2013/11/13/first-oil-production-license-opens-floodgates-for-investment-and-opportunities-2/" target="_blank">There is potential investment of about US$10bn to US$22bn ifproduction licenses are approved. </a>Now, the three companies are equal partners
in the licensed areas. Tullow was given the task to make some key deliverables,
but it hasn’t. It has paid the price.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="http://1.bp.blogspot.com/-i16FF6vbs8Q/U8eGrfTXUlI/AAAAAAAABVc/TvmLsoVFlPA/s1600/Tullow.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://1.bp.blogspot.com/-i16FF6vbs8Q/U8eGrfTXUlI/AAAAAAAABVc/TvmLsoVFlPA/s1600/Tullow.jpg" height="213" width="320" /></a></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">The final
nail in the coffin or the cherry on the cake, depending on how you view this,
was the <a href="http://www.weinformers.net/2014/07/16/ruling-of-capital-gains-tax-case-tullow-oil-against-uganda-revenue-authority-before-tax-appeals-tribunal/" target="_blank">ruling by the Tax Appeals Tribunal </a>that Tullow pays <a href="http://ugandaradionetwork.com/a/story.php?s=65394" target="_blank">US$407m to Uganda Revenue Authority (URA).</a> This is the income tax [Capital Gains Tax] accrued
from the 2012 sale of its assets to Total and CNOOC for US$2.9bn. Tullow
disputes this valuation, noting that it is entitled to an exemption as per the
highly guarded and confidential Production Sharing Agreements (PSAs) signed
with government. Tullow paid US$143m as income tax before it went to the Tax Appeals Tribunal. </span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"> It insists this is actual
tax to be incurred. The ruling and order by The Tribunal to pay the remaining
US$264m will not be reflected on their accounts because the company is not
going to pay that money.<a href="http://www.tullowoil.com/index.asp?pageid=137&newsid=905" target="_blank"> It will be challenging the ruling in both local and international courts. </a> This could drag on for years. </span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">Tullow with
all these "challenges" though, has made money. Tullow said it has spent
US$2.8bn in Uganda for the last 10years. But the company also sold a stake to
CNOOC and Total at US$2.9bn. This is even before the first drop of oil. However
such developments on delayed projects, tax obligations and write-offs bring
back the same old question, Is Tullow here to stay? The best answer is, “it
will be understandable if they exit.” <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">Tullow
officials have<a href="http://www.oilinuganda.org/features/companies/tullow-tight-lipped-on-sell-of-ugandan-assets.html" target="_blank"> sent mixed signals on their plans for Uganda.</a> In February, Paul
McDade the Chief Operating Officer Tullow, told <a href="http://online.wsj.com/article/BT-CO-20140212-707340.html#articleTabs_article" target="_blank">the Wall Street Journal </a>that
Kenya was “more supportive” and that first oil was more of “national priority.”
McDade’s comments were scathing. He
further said “Kenya will be easier to develop and the government is very
enthusiastic for us to get underway with that development and get first oil as
soon as possible.” </span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">These statements do contradict what David Onyango, the
deputy spokesperson of Tullow Uganda told <a href="http://www.monitor.co.ug/News/National/We-are-in-Uganda-to-stay---Tullow/-/688334/2063170/-/991k81/-/index.html" target="_blank">the Daily Monitor back</a> in November
2013. He said, “No consideration has been given to any scenario or option other
than a long term partnership with Uganda that delivers shared prosperity and
benefits for the country and the company.”<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="http://1.bp.blogspot.com/-V97ld6v18_o/U8eIkCuok_I/AAAAAAAABVo/hMPQWzf45zE/s1600/discoveries.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://1.bp.blogspot.com/-V97ld6v18_o/U8eIkCuok_I/AAAAAAAABVo/hMPQWzf45zE/s1600/discoveries.JPG" height="400" width="347" /></a></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
<br />
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">The Ugandan
government though remains unscathed. They have turned out to be tough
negotiators. At the back of their minds the belief is that with the current oil
finds, Tullow can leave and there will be other companies clamoring to
takeover. They also consider Tullow's mixed signals on an exit is <a href="http://deepearthint.com/index.php?Item=5037" target="_blank">playing politics</a> and trying to pile pressure on government to issue those licences. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">Interestingly, after the ruling by The Tribunal on taxation issues, Aiden Heavy the CEO Tullow Oil Plc hints at resolving this dispute by negotiating with government. </span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Candara, sans-serif;">"Tullow believes that the TAT has erred in law and Tullow will challenge the EA2 assessment through the Ugandan courts and international arbitration but hopes that further direct negotiation with the Government can resolve this matter." </span></div>
<div class="MsoNormal">
<br /></div>
mumakeithhttp://www.blogger.com/profile/01830783058553136408noreply@blogger.com0tag:blogger.com,1999:blog-51895632228574929.post-7506729911188225502014-05-08T01:19:00.001+03:002014-05-08T07:20:55.937+03:00What you - may - need to know. Q & A on Actis selling its stake in Umeme<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">So there
has been all this talk about “Umeme on sale,” if the Uganda’s leading newspaper
is anything to go by. The headlines then changed to “<a href="http://www.monitor.co.ug/News/National/20-firms-pick-interest-in-Umeme/-/688334/2305972/-/hqtv2j/-/index.html" target="_blank">20 firms interested in Umeme.</a><span id="goog_44194831"></span><span id="goog_44194832"></span><a href="https://www.blogger.com/"></a>” Kindly shrug that number. What matters is who eventually buys the shares in Umeme. So what’s the story? Here is my attempt to break down what this is all
about.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><b>Who is
selling what? </b><o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">Actis is
<a href="http://www.umeme.co.ug/index.php?page=Mjg0" target="_blank">the single largest shareholder</a> in Umeme Holdings – domiciled in Mauritius.
Umeme Holdings owns 60percent of Umeme Limited, which is Uganda’s largest power
distributor with about 500,000 customers. <a href="http://www.reuters.com/article/2012/11/12/umeme-ipo-idUSL5E8MCCU320121112" target="_blank">Actis until November 2013, owned100percent shares in Umeme Holdings. On November 30th 2013, about 38percentshares of Umeme were floated on the Uganda Securities Exchange.</a> Actis has now
made the <a href="http://ugandaradionetwork.com/a/story.php?s=63349" target="_blank">decision to sell part of the 60percent in Umeme to variousshareholders.</a> So yes, Umeme is on sale, but not all of it. Still it is a sale. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">Read: </span><span style="font-family: Candara, sans-serif;"><a href="http://mumakeith.blogspot.com/2013/09/how-actis-minted-billions-in-uganda.html" target="_blank">How Actis minted billions in Uganda, from just two companies</a></span></div>
<div class="MsoNormal">
<br></div>
<div class="MsoNormal">
<span style="font-family: Candara, sans-serif;"><b>Who is selling what to whom? </b></span></div>
<div class="MsoNormal">
<span style="font-family: Candara, sans-serif;"><br></span></div>
<div class="MsoNormal">
<span style="font-family: Candara, sans-serif;">My guess is as good as yours. I do not know. NSSF perhaps? IFC? Who could it be? Norfund. I do not know. There are quite a number of potential investors that can buy up the shares ranging from pension funds, investment banks, sovereign wealth funds and "others." </span></div>
<div class="MsoNormal">
<span style="font-family: Candara, sans-serif;"><br></span></div>
<blockquote class="tr_bq">
<span style="font-family: Candara, sans-serif;">"Due to corporate governance restrictions, Umeme cannot comment further until </span><span style="font-family: Candara, sans-serif;">the transaction has been completed," a statement from Umeme reads. </span></blockquote>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><b>Why is
Actis selling - part of - its shares in Umeme Holdings? </b><o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><a href="http://www.act.is/content/Home.aspx" target="_blank">Actis is aprivate equity firm</a>. It invests, grows the business and sales to the highest
bidder[s]. Then it will move on to the next country and do the same for any
other business. I<a href="http://www.prnewswire.com/news-releases/actis-exits-banque-commerciale-du-rwanda-162835616.html" target="_blank">n 2012, it divested its entire interest in Banque Commercialedu Rwanda</a>. In 2013, it also sold a 45.05percent stake in Dfcu Bank, <a href="http://mumakeith.blogspot.com/2014/05/when-top-six-banks-sneeze-entire.html" target="_blank">Uganda sixthlargest bank by assets.</a> It previously held a 60percent stake in the bank. On
this transaction, Actis sold the stake at 119billion Uganda Shillings to
NORFUND and Rabobank. There seems to be a similar arrangement with Umeme,
considering that Actis will still hold a minority stake in the company. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">It also
exited Xiabu Xiabu, a Chinese restaurant chain and XP Investimentos a brokerage
firm in Brazil. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">Actis has
been busy since it sold a stake in Umeme, Dfcu and BCR. It acquired Compuscan,”
the largest independent credit bureau in Africa.” Compuscan is headquartered in
South Africa and in Uganda; it provides the famous financial card required by
all commercial banks before you take-out. The takeover amount was not
disclosed.</span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">It also made a 36percent equity investment in the AutoXpress Group,
a tyre company in East Africa that distributes Pirelli and Dunlop brands among
others. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">In 2013 it
also invested perhaps the largest chunk of money in Cameroun. <a href="http://blogs.ft.com/beyond-brics/2013/11/07/actis-a-220mn-cameroonian-power-grab/" target="_blank">At $220m, it acquireda 56percent stake in Cameroun’s national grid company</a>, inclusive of two
independent power plants. It also went
into the pharmaceutical industry in India, when it bought a stake in Symbiotec
Pharmalab Limited (“Symbiotec”) at US$48m. It also spent US$95m on one of South </span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">Africa’s largest payments company, Paycorp. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">Other
acquisitions include Upstream, a mobile marketing and e-commerce Company and Jiashili
Food Group, a Chinese Biscuit manufacturer. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><b>Has the sale got
anything to do with parliament adopting the proposal to terminate the
concession? </b><o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">Tough
question, huh? Well it depends on how you look at it. The first divestment came
at a time the whole ad-hoc committee on the energy sector was debating the
contract of Umeme and Eskom. The second divestment comes at a time when
parliament has adopted the recommendation for the Umeme contract to be
terminated. A decision by cabinet has not been made, but considering the
submissions made by Irene Muloni, the energy minister at the time of the
debate, the concession is going nowhere. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">My
understanding is even if Actis partially exits, the concession that would be cancelled
is one made with Umeme Limited, so either way, government can still terminate - if it makes the decision.
Government would still compensate Umeme Limited investors for the termination of the
contract. Still a win for investors!! Whoever they will be!!<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><b>Does the
Actis exit have any implication on the share price? </b><o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">Well,
trading of Umeme shares has been suspended for now as the transaction is
concluded. The reason trading is suspended is one to avoid some “insiders” from
hiking or downgrading the price. [You need to read the book: <a href="http://www.nytimes.com/2007/05/27/books/review/Parker-t.html?pagewanted=all&_r=0" target="_blank">The Last Tycoons:The Secret History of Lazard Frères & Co.</a> It provides some good insight on
mergers and acquisitions of listed and non-listed companies.] If the price goes
up, then it works in favor of Actis and if it falls, whoever is buying gets a juicy
deal. This is not unprecedented. In 2013, <a href="http://www.independent.co.ug/news/news/7702-dfcu-suspends-trading-on-ugandan-stock-market" target="_blank">trading of Dfcu shares was suspended to allow the completion</a> of the Actis, Rabobank and NORFUND deal. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">The Dfcu
shares were trading at shs1,000 per share then. Currently they’re trading at
Shs1,215 per share, a Shs215 rise since mid-2013. Umeme’s share price is currently Shs360, up from Shs275 at the time it went public. One cannot predict the share
price of company, but what the USE has proven to us is that if the fundamentals
of a company are right, the price will rise or remain stable. If the
fundamentals are wrong, then investor confidence is dented, take for instance
what is happening with Uganda Clays and NIC [It is currently recovering,
although it is still trading below IPO price]. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">It should
be noted that institutional investors hold the largest chunk of shares of USE
listed companies. If they sneeze, the price could dip or rise. For now, the
political chatter on Umeme is not moving them just yet. <o:p></o:p></span><br>
<span style="font-family: "Candara","sans-serif";"><br></span>
<span style="font-family: "Candara","sans-serif";"><b>What is Umeme worth?</b></span><br>
<span style="font-family: "Candara","sans-serif";"><b><br></b></span>
<span style="font-family: Candara, sans-serif;">My conservative calculation of Umeme's value is Ugx584.5bn [No of Shares x Current share price]. The Actis ownership is 60 percent, which is about 975.6 million shares valued at Ugx351bn. If, Umeme were to remain with a minority shareholding, say 15.5 percent after selling 44.5 percent, it could make close to Ugx300bn tax-free money. [This is speculation. Just to point you to you the potential valuation of Umeme and the sale.]</span><br>
<span style="font-family: Candara, sans-serif;"><br></span>
<span style="font-family: Candara, sans-serif;">Remember, Actis lent Umeme about Ugx47.6bn between 2005 and 2007. By the time the loan repayment was complete in 2012, Actis had received an estimated Ugx92.7bn. This added to the dividend of Ugx14.2bn in 2013, then you can see why Umeme was a fine investment for Actis. </span><br>
<span style="font-family: Candara, sans-serif;"><br></span>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="http://4.bp.blogspot.com/-Ml7l2QASsmE/U2q7S3HP5MI/AAAAAAAABSI/_4eAbPr-1JA/s1600/private_equity.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" src="http://4.bp.blogspot.com/-Ml7l2QASsmE/U2q7S3HP5MI/AAAAAAAABSI/_4eAbPr-1JA/s1600/private_equity.jpg" height="193" width="400"></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;"><a class="irc_hl irc_hol" data-ved="0CAQQjB0" href="http://www.goldroof.net/" style="background-color: #222222; color: #7d7d7d; cursor: pointer; font-family: arial, sans-serif; line-height: 16px; text-align: start; text-decoration: none;" wrc_done="true"><span class="irc_ho" dir="ltr" style="margin-right: -2px; overflow: hidden; padding-right: 2px; text-overflow: ellipsis; unicode-bidi: -webkit-isolate;">www.goldroof.net</span></a></td></tr>
</tbody></table>
<span style="font-family: Candara, sans-serif;"><br></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><b>What does
this mean for the electricity user in the country? </b><o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><b><br></b></span></div>
<br>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">Well, hard
to say. That depends on the investors that are coming in and their vision for
the company. Power supply is still somewhat erratic and what Ugandans need to
know, is whether this will reduce. Will the tariff reduce? Does Umeme’s image
change? Well, no to all of these. First of all, the change in investors could
bring in some new faces on the Umeme board, which perhaps could change the
strategy of Umeme – or not. Power supply to improve will depend on whether
there is commitment to invest in improving infrastructure. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">Umeme
recently took-out a loan of US$195m from the IFC, Stanbic and Standard Chartered
for capital investment. It also requires close to $300m for investing in
rolling out pre-paid meters to the whole country. If you’re experiencing poor
power supply, it is likely that would remain the same. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><b>How does
Uganda benefit from this transaction? </b><o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">Wait,
before you say Capital Gains Tax will be paid. In 2011, there were amendments made
to the Income Tax Act. One of them was that any sale of assets in a Private Limited Liability Company, the company that has sold will be subject to a Capital Gains
Tax assessment by URA. This, if you remember is a subject of two major legal
battles between <a href="http://www.oilcouncil.com/expert_insight_articles/capital-gains-tax-new-resource-nationalism" target="_blank">URA and Heritage Oil over the sale of its assets to Tullow Oil.</a>
The other one is between <a href="http://www.theeastafrican.co.ke/news/landmark-Uganda-Zain-tax-row-case/-/2558/2219362/-/51rq1cz/-/index.html" target="_blank">URA and Zain, which arose out of Bharti Airtelacquiring Zain’s assets in 2010. </a><o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br></span></div>
<div class="MsoNormal">
<span style="font-family: Candara, sans-serif;">Umeme is a publicly traded company listed on the USE. The rules are different. Actis,
which will be selling is not subjected to Capital Gains Tax. CGT was not
applied when Actis sold Dfcu shares to Norfund and Rabobank. Government opting
not to impose such a tax share transfer of listed companies was mainly to
encourage the growth of the capital markets. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">Notably,
the benefit for Uganda is that it makes it a fertile ground for FDI. It is
rather comfortable for a company to know that it can come invest in Uganda and
then exit at will by selling to other investors. Some of our brokerage firms and <a href="http://www.theceomagazine-ug.com/blog/2013/12/10/top-law-firms-in-uganda-named/" target="_blank">law firms,</a> will also have a share of the pie when the bill their clients. <o:p></o:p></span></div>
<div class="MsoNormal">
<br></div>
<div class="MsoNormal">
<br></div>
<div class="MsoNormal">
<br></div>
<div class="MsoNormal">
</div>
<div class="MsoNormal">
<br></div>
mumakeithhttp://www.blogger.com/profile/01830783058553136408noreply@blogger.com9tag:blogger.com,1999:blog-51895632228574929.post-58371732725235763702014-05-06T13:26:00.000+03:002014-05-06T13:26:00.828+03:00When the top six banks sneeze, the entire banking sector catches the cold<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">None of the
top six banks posted losses. There was “just” a decline in profitability. They
still made money. Inside the boardrooms however it’s a whole different story.
The CEO’s have questions to answer. How to turn around a less than impressive
year? </span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">The top six banks are Stanbic, Standard Chartered, Crane Bank, Centenary,
Barclays and Dfcu Bank respectively. The top three saw their profits dip by
22.11%, 26% and 41% respectively to Ugx101.8bn, Ugx97.6bn and Ugx47.2. The
other three, recorded a rise in profits by 3%, 4% and 5% respectively to
Ugx58bn, Ugx39.8bn and Ugx34.8bn. The top six banks account for at least 82% of
the entire banking sector net profits.</span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="http://1.bp.blogspot.com/-M3oY-WMrslM/U2iyY8GfojI/AAAAAAAABRY/jdDnOXg8p9Y/s1600/Top+six+net+profit+loss.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://1.bp.blogspot.com/-M3oY-WMrslM/U2iyY8GfojI/AAAAAAAABRY/jdDnOXg8p9Y/s1600/Top+six+net+profit+loss.png" height="241" width="400" /></a></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"> In 2012 profitability of all commercial
banks was Ugx586.5bn. This dropped by 21% to Ugx462bn in 2013. The top six
banks account for Ugx379bn – 82% - of
the entire commercial bank profits. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">The trouble
for these banks was slowed operating income if compared to 2012. In 2012, the
top six’s’ income had grown above 15% however in 2013, none of the banks had
above 15% growth in income. In fact for Stanbic and Standard Chartered Bank,
income fell by more 12% and 14%. Overall the entire banking sector recorded a
19% decline in income to Ugx1.9trillion. It should be noted that the top six
contributed at least 81% of this income.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="http://3.bp.blogspot.com/-x-M8QguSkP0/U2i2-FssBGI/AAAAAAAABR0/dh9wdZKL3WY/s1600/Other+banks.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://3.bp.blogspot.com/-x-M8QguSkP0/U2i2-FssBGI/AAAAAAAABR0/dh9wdZKL3WY/s1600/Other+banks.png" height="400" width="390" /></a></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">The less than impressive income by banks was
mostly as a result slowed growth of money they make off lending. In 2012,
interest income was surging with only Dfcu posting a rise of less than 11%. The
rest were above 18%. Despite Stanbic Bank and Standard Chartered being
diversified, their non-interest income also did not grow as well as it usually
does. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">The banks
blame the economic environment as being unfavorable. Philip Odera, the CEO
Stanbic Bank says banks still had to deal with the effects of the 2011 rise in
interest rates, which led to an increase in loan defaults and provisions for
these bad debts. Even at Bank of Uganda they admit the less than impressive performance
of the sector was due cautious lending by banks and the poor performance of the
real estate sector. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="http://1.bp.blogspot.com/-s-R9XcNGRgo/U2iy8_wiQyI/AAAAAAAABRg/sJqK1jBqbQc/s1600/Loans+deposits.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://1.bp.blogspot.com/-s-R9XcNGRgo/U2iy8_wiQyI/AAAAAAAABRg/sJqK1jBqbQc/s1600/Loans+deposits.JPG" height="295" width="400" /></a></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">Expenses
also grew and more notably were expenses to cover-up for the bad debts that
were written off. The provisions grew by 34.8% in 2013 down from 157.4% in
2012. The top six banks accounted for 60percent of these provisions, with
Standard Chartered Bank, Stanbic Bank and Crane Bank accounting for Ugx46.6bn,
Ugx50bn and Ugx44bn respectively. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">In terms of
market share – calculated using deposits – the top six hold 63% in 2013. With
the exception of Centenary, Dfcu and Barclays, the rest of the top six lost a
market share. Stanbic’s share dropped by 3%, Standard Chartered also lost 1.2%
and Crane Bank also declined by 1.4%. The slip up by these banks means that
KCB, DTB, Ecobank, Imperial, Tropical, ABC, Housing Finance and Cairo
International Bank increased their market share by at least 0.5%. The top six
still control the largest chunk of banking assets, despite the 1% drop in their
market share to 64%. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="http://3.bp.blogspot.com/-FSK_D2xGXnY/U2izSodDd0I/AAAAAAAABRo/IPzA3gNmOGE/s1600/Banking+assets.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://3.bp.blogspot.com/-FSK_D2xGXnY/U2izSodDd0I/AAAAAAAABRo/IPzA3gNmOGE/s1600/Banking+assets.JPG" height="397" width="400" /></a></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
<br />
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";">The
implications of this less than impressive means that income tax contributions
from commercial banks also declined by more at least 13%. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Candara","sans-serif";"><br /></span></div>
mumakeithhttp://www.blogger.com/profile/01830783058553136408noreply@blogger.com1tag:blogger.com,1999:blog-51895632228574929.post-43996954598940978362014-04-01T07:58:00.000+03:002014-05-15T07:59:35.993+03:002013, best year ever for Uganda Securities Exchange, here is why<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">At the Uganda Securities Exchange (USE), it is business as
usual. After the first five minutes of trading, there is a long lag where
brokers read newspapers, discuss football, politics and once in a while a trade
will come. 2013 wasn’t any different. In terms of numbers it was. At the end of
2013, the stock market turnover was Ugx197.7bn a rise of more than 500percent
from Ugx30.5bn in 2012. A big leap indeed. 2013 was arguably, the record breaking
year for the USE. Trouble is, Joseph Kitamirke the CEO, who left mid-2013 has
not been replaced. Many have asked, what was different in 2013? </span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">Dfcu Group was the difference. The bank accounted for more
58percent [Ugx112.95bn] of the entire turnover at the stock exchange. If
compared to 2012, this counter only had Shs1bn in trading turnover. Umeme came
in second with turnover of Ugx44bn and Ugx30.7bn for Stanbic Bank in third. All
these were record breaking figures for these stocks. </span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">Dfcu is Uganda’s sixth largest bank in terms of assets –
Ushs981.1 and customer deposits – Ushs591bn. At the end of 2012, it was
Uganda’s 7<sup>th</sup> most profitable bank despite a 5.4percent fall in
profits to Ushs29.8bn offering dividends of Ushs37.1per share to shareholders.
In 2013, Rabobank from the Netherlands – bought a 27.54percent stake in Dfcu.
Also, NORFUND increased its stake in the Dfcu to 27.54percent in the bank after
buying an additional 17.54% in Dfcu. The transaction was valued at Ugx111.9bn,
accounting for 99percent of the entire turnover on the Dfcu counter. </span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">“The more we do this, the more ready we will be when other
transactions come on board,” then CEO, Joseph Kitamirike said. The USE has
never handled a transaction of this magnitude and for two brokerage firms,
African Alliance and CfC Stanbic Securities- now SBG Securties - , it was a handsome payday for them. Such
transactions are not common for listed equities in Uganda, so it is the number
one reason why the stock market performed “well” in 2013. </span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">Umeme also completed its first full year on the USE in
December 2013 and had a turnover of Ugx44bn, which is 39percent of the total
turnover of the USE. Umeme has been an active counter since the company listed
in November 2012. Institutional investors were particularly interested in this
counter, arguing that it had been largely undervalued at the time it listed.
Its shares were also available to trade for those willing to exit and enter. It
also recorded the highest price appreciation of about 35percent. </span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">Stanbic Bank turnover was also up by 137percent to Ugx30.7bn
in 2013. This leap was also due to increased activity on this counter. Stanbic
Bank is Uganda’s largest bank by assets, customer lending and deposits. Again, the demand on this counter was driven
by interest from pension and mutual funds that were reviewing their investment
strategy. This as the banking sector is expected to have recovered in 2013,
after the Non-Performing Loans (NPLs’] that dogged the sector. Analysts were
bullish then, with one of them telling this columnist in 2013 that “......we
expect better growth in the second half and in 2014 in terms of interest income
as credit growth improves and recoveries on non-performing loans while
noninterest revenue will grow as deposits continue to improve.”</span></div>
<br />
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">The USE was however dealt a significant blow when the CEO,
Joseph Kitamirike was not given a new offer by the governing council. The
performance was undoubtedly the best in the history of the exchange, but once
again two counters, Stanbic and Umeme present that organic growth. </span></div>
mumakeithhttp://www.blogger.com/profile/01830783058553136408noreply@blogger.com0tag:blogger.com,1999:blog-51895632228574929.post-63277873330794047062014-03-24T11:00:00.000+03:002014-03-25T11:01:15.402+03:00Press and Journalists Act "violates the freedoms of speech, expression, the press and other media" - Petition <div style="background-color: white; color: #666666; font-family: Georgia; font-size: 16px; line-height: 20px; margin: -8px 27px 5px 5px; padding-left: 10px;">
<em>... from <a href="http://www.acme-ug.org/index.php/petition-filed-challenge-constitutionality-ugandan-press-journalists-act/" target="_blank">The African Center for Media Excellence</a> </em></div>
<div style="background-color: white; color: #666666; font-family: Georgia; font-size: 16px; line-height: 20px; margin: -8px 27px 5px 5px; padding-left: 10px;">
<em><br /></em></div>
<div style="background-color: white; color: #666666; font-family: Georgia; font-size: 16px; line-height: 20px; margin: -8px 27px 5px 5px; padding-left: 10px;">
<em>PRESS RELEASE</em></div>
<div style="background-color: white; color: #666666; font-family: Georgia; font-size: 16px; line-height: 20px; margin: -8px 27px 5px 5px; padding-left: 10px;">
<br /></div>
<div style="background-color: white; color: #666666; font-family: Georgia; font-size: 16px; line-height: 20px; margin: -8px 27px 5px 5px; padding-left: 10px;">
<br /></div>
<div style="background-color: white; color: #666666; font-family: Georgia; font-size: 16px; line-height: 20px; margin: -8px 27px 5px 5px; padding-left: 10px;">
On Friday March 14, 2014, the Centre for Public Interest Law (CEPIL), in cooperation with the Human Rights Network for Journalists and the Eastern Africa Media Institute, a tripartite initiative known as the Partnership for a Free and Independent Media, filed a <a href="http://www.scribd.com/doc/213965629/Uganda-Press-and-Journalist-Act-constitutional-petition" style="color: #aa0000; font-family: Oswald, Arial, sans-serif; text-decoration: none;" target="_blank">constitutional petition</a> challenging major sections of the Ugandan Press and Journalists Act.</div>
<div style="background-color: white; color: #666666; font-family: Georgia; font-size: 16px; line-height: 20px; margin: -8px 27px 5px 5px; padding-left: 10px;">
<br /></div>
<div style="background-color: white; color: #666666; font-family: Georgia; font-size: 16px; line-height: 20px; margin: -8px 27px 5px 5px; padding-left: 10px;">
<br /></div>
<div style="background-color: white; color: #666666; font-family: Georgia; font-size: 16px; line-height: 20px; margin: -8px 27px 5px 5px; padding-left: 10px;">
This petition, recorded as<a href="http://www.scribd.com/doc/213965629/Uganda-Press-and-Journalist-Act-constitutional-petition" style="color: #aa0000; font-family: Oswald, Arial, sans-serif; text-decoration: none;" target="_blank"> Constitutional Petition number 9 of 2014</a>, challenges the Press and Journalists Act, Cap 105, on the grounds that the law violates the freedoms of speech, expression, the press and other media, as contained in Article 29 of the Constitution, as well as other key provisions that provide for protection of fundamental human rights. The Partnership believes that this law violates key principles of freedom of the press and other media, and restricts the Fourth Estate in Uganda in a way that is not justifiable in a free and democratic society.</div>
<div style="background-color: white; color: #666666; font-family: Georgia; font-size: 16px; line-height: 20px; margin: -8px 27px 5px 5px; padding-left: 10px;">
<br /></div>
<div style="background-color: white; color: #666666; font-family: Georgia; font-size: 16px; line-height: 20px; margin: -8px 27px 5px 5px; padding-left: 10px;">
<br /></div>
<div style="background-color: white; color: #666666; font-family: Georgia; font-size: 16px; line-height: 20px; margin: -8px 27px 5px 5px; padding-left: 10px;">
The petition identifies a number of areas where the Act is in contravention of the Constitution, including unduly restrictive licensing conditions for journalists; unclear, inconsistent and overly broad powers of the Minister and the Media Council to punish journalists; a code of ethics that holds journalists liable for disseminating “incorrect or untrue” news or allegations and requires them to disclose their sources if there is “an overriding consideration of public interest”.</div>
<div style="background-color: white; color: #666666; font-family: Georgia; font-size: 16px; line-height: 20px; margin: -8px 27px 5px 5px; padding-left: 10px;">
<br /></div>
<div style="background-color: white; color: #666666; font-family: Georgia; font-size: 16px; line-height: 20px; margin: -8px 27px 5px 5px; padding-left: 10px;">
<br /></div>
<div style="background-color: white; color: #666666; font-family: Georgia; font-size: 16px; line-height: 20px; margin: -8px 27px 5px 5px; padding-left: 10px;">
One area of particular concern is the licensing requirements for journalists. The petition states that, “section 26 [of the Act] is inconsistent with article 29(1) and 40(2)(a) of the Constitution in so far as it provides for application to the Council in order for a person to practice journalism.” The petition further goes on to say that “sections 28 and 29…restrict the right of a person to practice journalism unless the person has enrolled, acquired an accreditation card, and complied with all the terms the Council has set and has complied with all orders under the Act.” Such restrictions, taken together with other sections of the Act, unduly limit the ability of journalists to practice their craft and create the potential for political persecution of journalists who hold divergent views from those in the licensing authorities.</div>
<div style="background-color: white; color: #666666; font-family: Georgia; font-size: 16px; line-height: 20px; margin: -8px 27px 5px 5px; padding-left: 10px;">
<br /></div>
<div style="background-color: white; color: #666666; font-family: Georgia; font-size: 16px; line-height: 20px; margin: -8px 27px 5px 5px; padding-left: 10px;">
<br /></div>
<div style="background-color: white; color: #666666; font-family: Georgia; font-size: 16px; line-height: 20px; margin: -8px 27px 5px 5px; padding-left: 10px;">
The dangers of the licensing process are compounded by the procedures by which complaints can be instituted against journalists (sections 31 and 32), the procedures by which journalists can be suspended (sections 34 and 39), the way in which the Council implements its own orders made against a journalist (section 35), the ability of the Disciplinary Committee to institute proceedings of its own motion against journalists without adequate guidelines or controls (Section 40(2)), and a complaints procedure against journalists that fails to meet basic principles of natural justice (Sections 31, 32, 33). The overall impact of these sections of the law is to compromise severely the ability of journalists to practice their craft due to fear of persecution from the state.</div>
<div style="background-color: white; color: #666666; font-family: Georgia; font-size: 16px; line-height: 20px; margin: -8px 27px 5px 5px; padding-left: 10px;">
<br /></div>
<div style="background-color: white; color: #666666; font-family: Georgia; font-size: 16px; line-height: 20px; margin: -8px 27px 5px 5px; padding-left: 10px;">
<br /></div>
<div style="background-color: white; color: #666666; font-family: Georgia; font-size: 16px; line-height: 20px; margin: -8px 27px 5px 5px; padding-left: 10px;">
Other elements of the Act that violate the Constitution include its requirement that journalists join an association to practice journalism (sections 27(1) and 28), the requirement that journalists pay a fee to get or renew a license to practice journalism (sections 27(2), 16(1), 27(1), and 29(2)), and the requirement that what is published is not contrary to public morality (section 6(a)).</div>
<div style="background-color: white; color: #666666; font-family: Georgia; font-size: 16px; line-height: 20px; margin: -8px 27px 5px 5px; padding-left: 10px;">
<br /></div>
<div style="background-color: white; color: #666666; font-family: Georgia; font-size: 16px; line-height: 20px; margin: -8px 27px 5px 5px; padding-left: 10px;">
<br /></div>
<div style="background-color: white; color: #666666; font-family: Georgia; font-size: 16px; line-height: 20px; margin: -8px 27px 5px 5px; padding-left: 10px;">
Finally, the definition of practicing journalism (section 27(5)) is far too broad and does not even require a link with a mass media outlet. It would therefore subject most individuals working for civil society, all academics, and even students or employees of the telephone company who collected information for the purposes of compiling a telephone book, to the authority of the Minister and Media Council. Mass media and electronic media as defined in section 1 is overly broad, as the former not only includes electronic media but also posters and banners while the latter includes any communication to the public by any electronic apparatus, thus including every website, regardless of its content. All these would therefore be treated as persons practicing journalism and would be required to register and obtain licenses at the penalty of imprisonment on default.</div>
<div style="background-color: white; color: #666666; font-family: Georgia; font-size: 16px; line-height: 20px; margin: -8px 27px 5px 5px; padding-left: 10px;">
<br /></div>
<div style="background-color: white; color: #666666; font-family: Georgia; font-size: 16px; line-height: 20px; margin: -8px 27px 5px 5px; padding-left: 10px;">
<br /></div>
<div style="background-color: white; color: #666666; font-family: Georgia; font-size: 16px; line-height: 20px; margin: -8px 27px 5px 5px; padding-left: 10px;">
Overall, the Act violates the freedom of the press and other media, as guaranteed in the Constitution, and provides an extremely restrictive environment for journalists that will compromise their ability to carry out their duty in a professional way, free of fear from persecution by the state.</div>
<div style="background-color: white; color: #666666; font-family: Georgia; font-size: 16px; line-height: 20px; margin: -8px 27px 5px 5px; padding-left: 10px;">
<br /></div>
<div style="background-color: white; color: #666666; font-family: Georgia; font-size: 16px; line-height: 20px; margin: -8px 27px 5px 5px; padding-left: 10px;">
<br /></div>
<div style="background-color: white; color: #666666; font-family: Georgia; font-size: 16px; line-height: 20px; margin: -8px 27px 5px 5px; padding-left: 10px;">
About the petitioners:</div>
<div style="background-color: white; color: #666666; font-family: Georgia; font-size: 16px; line-height: 20px; margin: -8px 27px 5px 5px; padding-left: 10px;">
<br /></div>
<div style="background-color: white; color: #666666; font-family: Georgia; font-size: 16px; line-height: 20px; margin: -8px 27px 5px 5px; padding-left: 10px;">
<a href="http://cepiluganda.org/" style="color: #aa0000; font-family: Oswald, Arial, sans-serif; text-decoration: none;" target="_blank">The Centre For Public Interest Law</a> is a non-profit, non-religious and non-partisan organisation registered in September 2009, which aims to protect public interest in<br />Uganda using law as a tool.</div>
<div style="background-color: white; color: #666666; font-family: Georgia; font-size: 16px; line-height: 20px; margin: -8px 27px 5px 5px; padding-left: 10px;">
<br /></div>
<div style="background-color: white; color: #666666; font-family: Georgia; font-size: 16px; line-height: 20px; margin: -8px 27px 5px 5px; padding-left: 10px;">
The <a href="http://www.hrnjuganda.org/" style="color: #aa0000; font-family: Oswald, Arial, sans-serif; text-decoration: none;" target="_blank">Human Rights Network for Journalists—Uganda</a>, a nonprofit and non-partisan organisation founded in 2006 enhances the promotion, protection and respect of<br />human rights through defending and building capacities of journalists to effectively exercise their constitutional rights and fundamental freedoms for collective campaigning through the media.</div>
<div style="background-color: white; color: #666666; font-family: Georgia; font-size: 16px; line-height: 20px; margin: -8px 27px 5px 5px; padding-left: 10px;">
<br /></div>
<div style="background-color: white; color: #666666; font-family: Georgia; font-size: 16px; line-height: 20px; margin: -8px 27px 5px 5px; padding-left: 10px;">
The Eastern Africa Media Institute (EAMI), Uganda Chapter was founded in 1997 as an umbrella organization of 29 media associations and organizations spread all over the country. EAMI is a nongovernmental and non-profit organization committed to the values of a free and independent press, united, strong and vibrant media development in the country in order to attain a free, responsible media and a democratic society.</div>
<div style="background-color: white; color: #666666; font-family: Georgia; font-size: 16px; line-height: 20px; margin: -8px 27px 5px 5px; padding-left: 10px;">
<br /><em>For further information please contact Sheila Atim, Centre for Public Interest Law, at 0312-106022 or <a class="smarterwiki-linkify" href="mailto:sheila@mbgadvocates.com." style="color: #aa0000; font-family: Oswald, Arial, sans-serif; text-decoration: none;">sheila@mbgadvocates.com.</a></em></div>
mumakeithhttp://www.blogger.com/profile/01830783058553136408noreply@blogger.com2tag:blogger.com,1999:blog-51895632228574929.post-29891286346184919292014-03-21T12:15:00.000+03:002014-03-21T12:15:07.104+03:00Three years [almost] of inflationary targeting; what do we know so far?<blockquote class="tr_bq">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;"><a href="http://www.amazon.com/Lords-Finance-Bankers-Broke-World/dp/0143116800" target="_blank">“Central banks are mysterious institutions, the full details of their inner workings so arcane that very few outsiders, even economists, fully understand them” Liaquat Ahamed, in Lords of Finance.</a> [Currently reading]</span></blockquote>
<div class="MsoNormal">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Cambria, serif;">We swipe the access cards and
walk through the revolving door to the elevator. Then we make it to level 7. To
a heavily air conditioned boardroom. We sit. We wait for the governor to
deliver a statement on inflation projections and the benchmark lending rate for
the month. On the boardroom walls are framed pictures of previous bank
governors. It is not that lavish a boardroom, but as we wait, looking around is
perhaps the only option. The governor arrives. Face down. Walks in with a
swagger. Then he sits. An aura of silence ensues for about 15 seconds. Staring
at a piece of paper, he issues a monetary policy statement. The issuance of
this monthly statement started in July 2011. </span></div>
<div class="MsoNormal" style="text-align: center;">
<span style="font-family: Cambria, serif;">xxxxxxxx</span></div>
<div class="MsoNormal">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">The policy known as Inflationary Targeting started in July 2011, at the height of double digit inflation. The bank every month issues a statement on what they project
inflation to be in the next short and medium term. The governor, Prof. Emmanuel
Tumusiime-Mutebile, then also announces the Central Bank Rate (CBR) – a benchmark
lending rate. A signal to the market on the direction of interest rates. </span></div>
<div class="MsoNormal">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Cambria, serif;">At the time the monthly issuance came in, the bank wanted to stem
runaway inflation, so it increased the rate monthly, until November 2013, peak at 23percent. In
turn, commercial banks also sent their interest rates through the roof, and by
January 2012, the rates had gone up from an industry average of 21percent to
27.2percent. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">The monthly increase in CBR
slowed credit uptake by the private, which by then was growing at about
30percent year-on-year. The high interest rate environment slowed this growth.
Bank of Uganda was criticized for the policy. Some economists and
self-appointed-pseudo economists say the policy was hurting borrowers, slowing
economic growth and not curbing inflation at all. <a href="http://www.bbc.co.uk/news/world-africa-16508825" target="_blank">Traders went hay wire overthe rates, closing their shops in protest of banks increasing lending rates onexisting loans.</a> They even met the president – he met them, just that – but Prof.
Mutebile remained steadfast about the policy. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;"><br /></span></div>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="http://4.bp.blogspot.com/-BcviGOmkDt4/UywAqSmgbCI/AAAAAAAABLY/6Cjl4I_oh6E/s1600/traders+shut+shops.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" src="http://4.bp.blogspot.com/-BcviGOmkDt4/UywAqSmgbCI/AAAAAAAABLY/6Cjl4I_oh6E/s1600/traders+shut+shops.jpg" height="227" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Traders shut their shops in January 2012 protesting the high interest rates. Photo from The New Vision </td></tr>
</tbody></table>
<div class="MsoNormal">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">Dr Louis Kasekende, Deputy
Governor BoU, at a recent conference on Transitioning to Modern Monetary Policy told central bankers from the sub-saharan region that the aim of the
policy was to “influence bank deposit rates and wholesale bank funding rates,
which determine the marginal cost of funds for banks, and thereby bank lending
rates. These interest rates are clearly much more relevant for the saving and
borrowing decisions of private sector agents in the real sector of the economy,
and therefore for aggregate spending, which is what monetary policy ultimately
aims to influence.”<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">As a result of the high interest
rate environment, there was an increased number loan defaults, which increased
to 4.2 percent at the end of 2012 from about 2 percent in 2011. Already, the fourth quarter of 2013, they had gone up to 5.9 percent, the highest for any quarter since March 2004. Mortgage uptake
slowed and so did the agricultural sector lending. Economic growth in 2011/12 also
slowed to 3.2 percent, the lowest in over a decade. The government watched on,
helpless. Ugandans worked hard, businesses collapsed, others survived and
journalists wrote stories.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">By the end of 2012, BOU had eased
– or rather the template word, cautiously eased – the rate to 12 percent, lower
than the July 2011 rate. The bankers meanwhile were also partly reacting. Average lending rates declined to 24.77percent. Currently, the policy rate is at 11.5percent,
whereas bankers are lending at 22.14percent on average. Not good enough. Some
economists say. Even BoU officials.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">Dr Kasekende: “So far we have
been less successful in influencing bank lending rates, which have proved more
sticky [sic] than other interest rates.” <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">Adding, “Therefore, the acid test
of monetary policy implementation in an ITL (Inflationary Targeting Lite)
framework is the extent to which changes in the policy interest rate set by the
central bank are transmitted to other interest rates in the economy which in
turn affect private sector spending.”<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">Other governors in the room
seemed to agree, as they were facing similar challenges in their countries. Stanbic Bank, Uganda’s largest bank, at the beginning of the year announced
it was going to start setting interest rates based on CBR. An overriding factor why BoU is optimistic that this policy will be effective on commercial bank
interest rates.</span></div>
<div class="MsoNormal">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="http://2.bp.blogspot.com/-zqeqGq5kcbc/Uyv9KqzLymI/AAAAAAAABLM/ZfE3hSC0cv0/s1600/CBR+Inflation+et+al.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://2.bp.blogspot.com/-zqeqGq5kcbc/Uyv9KqzLymI/AAAAAAAABLM/ZfE3hSC0cv0/s1600/CBR+Inflation+et+al.png" height="338" width="640" /></a></div>
<div class="MsoNormal">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">Ms. Antoinette Sayeh, Director,
IMF African Department also says, “There is broad consensus that additional
research is needed to fully understand the transmission mechanism of monetary
policy in Sub-Saharan Africa, including on the sluggish response of lending
rates to the recent loosening of monetary policy.”<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">On inflation. According
to the UBoS, core inflation, which excludes food crops, energy, fuel and
utilities, contributes at least 80percent to the entire headline inflation. BoU
also targets core inflation because it considers it less volatile and when
Inflationary Targeting came in, core inflation was at 15.6percent. As core
inflation increased, so did headline inflation. Once it declined, then headline
inflation would follow suit. The BoU projection: Core inflation to be in the 5percent range for the next twelve months. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">“The reason why we target core
inflation is that we have potentially better control over core inflation than
headline inflation. The goods and services whose prices are excluded from core
inflation are generally more volatile and more subject to supply price shocks
than are other prices in the consumer basket. Because the prices of food crops
and fuel are mainly determined by developments on the supply side of the
market, such as the abundance of the harvest, they are largely outside of the
control of monetary policy,” Mutebile explained. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">When
BoU was implementing the ITL, it slowed borrowing and increased costs production.
Then, no jobs were being created and some companies were not growing.
Foreclosures also increased. Loan defaults were on the rise. Traders cried foul, all in vain. Customers started reading the terms and conditions of the loans clearly. Has inflationary targeting been a success? The bankers say "yes" whereas the citizens would want to disagree. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal" style="text-align: center;">
xxxxxxxx </div>
<div class="MsoNormal">
<br /></div>
<br />
<div class="MsoNormal">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">After reading his statement, not
so flawlessly, we ask questions. Bullishly he answers “I did not say that”, “it
is none of your business.” “Yes.” “I do not think so.” He then walks out
confidently, knowing that the market will react positively to the news. <o:p></o:p></span></div>
mumakeithhttp://www.blogger.com/profile/01830783058553136408noreply@blogger.com1tag:blogger.com,1999:blog-51895632228574929.post-48643043809412497122014-02-12T10:06:00.000+03:002014-02-12T10:41:13.390+03:00Government and Oil Companies signed an MOU, So what? <blockquote class="tr_bq">
<a href="http://divorcesupport.about.com/od/maritalproblems/a/What-Is-A-Prenuptial-Agreement.htm" target="_blank"><span style="font-family: Trebuchet MS, sans-serif;">“A prenuptial agreement is a legally bind contract created by two people before they marry. In the prenuptial agreement the couple addresses such issues as the property bought into the marriage by each person and what the property rights of each will be should they divorce.”</span></a></blockquote>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">Words. Sentences. Jargon. Phrases. Anecdotes. This is how we tell stories,
sometimes. So last week you may have encountered phrases like: “...roadmap for
the Commercialization of Petroleum Resources discovered in the country,” or “…framework
for achieving a harmonized commercialization plan for the development of the
discovered oil and gas resources in the country.” How did we get to all this
jargon? </span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">Well, the oil companies operating in Uganda – at the moment – that is:
Total, CNOOC and Tullow had been negotiating with government on how to develop
our oil. In other words the oil companies and government had to agree on how
much oil will be refined, where it will be refined, who will finance the
refinery & pipeline, and other infrastructure needs. It took over a year to
agree on this considering that the oil companies had been opposed to a refinery
in Uganda. So finally, they agreed and signed. But so what if they signed? Does
it mean oil will start flowing soon? Can companies begin production? Well, no. </span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">Here is what the MOU isn’t: The MOU doesn’t mean we know how
much fuel – once the refinery is complete - will cost. It also has nothing to
do with how much Uganda will earn in terms of oil revenues. It has nothing to
do with revenue management. Obviously, it will not determine the price of oil. </span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">It is only a roadmap. In other words, this just paves the way
for Uganda to continue the process towards finally being an oil producing
country. It is also an indicator that our oil is commercially viable right now. </span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">Remember the definition of a prenuptial agreement above? That is how I can
describe the MOU between government and the oil companies. </span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">Only one company – CNOOC – has been<a href="http://www.bloomberg.com/news/2013-09-25/cnooc-of-china-wins-uganda-s-first-oil-production-license.html" target="_blank"> issued a production license</a>. [Note that all the three oil companies are <a href="http://www.tullowoil.com/index.asp?pageid=137&newsid=737" target="_blank">equal partners in all the licensed areas in the albertine region</a>, but CNOOC is the main operator – the in-charge – of the
area where a production license was issued - Kingfisher]. So yes, an MOU was signed, but no
new production licenses were issued. Total and Tullow still have to wait. A
production license is like a go ahead for companies to finally start “bringing
oil out of the ground.” Notably, it takes about five years – in Uganda – from the
time you’re issued a production license to finally start commercial production.
</span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">Secondly, the MOU points out the role of government and that
of the oil companies. The government's priority right now is to find the
majority stake investor – 60% - in the oil refinery. It is currently compensating
people occupying the 29square kilometers of land in Kabale Parish, Buseruka
Sub-county, Hoima District where the refinery will be located.<a href="http://mumakeith.blogspot.com/2013/12/what-you-need-to-know-about-firms.html" target="_blank"> It has also shortlisted six consortia to submit their proposals for the development of the refinery.</a>The model and financing of the refinery will determine the cost and whether we’ll get more affordable fuel. One of the reasons government gives for its push for a refinery, is to the country of a petroleum import bill of US$1bn [2013]. </span><br />
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span>
<div class="separator" style="clear: both; text-align: center;">
<a href="http://4.bp.blogspot.com/-SUnWKc5ayZg/UvslhpQrRLI/AAAAAAAAA6A/q1_qY5vRTOY/s1600/Licensed+areas.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://4.bp.blogspot.com/-SUnWKc5ayZg/UvslhpQrRLI/AAAAAAAAA6A/q1_qY5vRTOY/s1600/Licensed+areas.JPG" height="320" width="301" /></a></div>
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">For the oil companies, their role is to make sure oil
produced goes the refinery first, before it makes to the export pipeline. The export
pipeline is their business, not ours. Not quite. It is our business
too but we have the option of having a stake or not in pipeline. In other-words,
we do not have to sink tax-payers money in the pipeline, unlike the refinery. </span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><a href="http://www.petroleum.go.ug/page.php?k=curnews&id=78" target="_blank">A statement</a> issued by government reads, </span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<blockquote class="tr_bq">
<span style="font-family: Trebuchet MS, sans-serif;">“The MOU requires
the oil companies to support Government in its efforts to develop the refinery
including public endorsement of the project. It also requires Government to
provide support to the oil companies in acquiring approvals for studies and
surveys for an export pipeline and to initiate discussions with neighbouring
countries in relation to cross border frameworks for the pipeline.” </span></blockquote>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">Tullow’s Jimmy Mugerwa issued this “public endorsement” in a
statement issued after the signing: </span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<blockquote class="tr_bq">
<span style="font-family: Trebuchet MS, sans-serif;">“The parallel framework of a crude export pipeline
and a right-sized refinery that has been agreed on in this MOU provides that
market certainty.” </span></blockquote>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">Note the wording >> “right-sized refinery.” The size of
the proposed refinery, 60,000 barrels per day. Expected completion year: 2018.</span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">The third point is that the MOU signing gives the oil
companies some sort of signal on whether to invest in this country or not.
Again, here is another quote from Mugerwa: “…conclusion of this MOU between us
and government is significant because the capital required to finance the
development of the upstream production facilities, the pipeline and the
refinery is in billions of dollars and the financial planning for the project
requires that there is a clear market destination for Uganda’s oil production
before a Final Investment Decision (FID) can be concluded.” </span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">So, Total Uganda, CNOOC Uganda and Tullow Uganda
subsidiaries can now confidently march to their parent companies and say, “hey,
we’ve made progress, can we get some more money to invest in this country?”
This also – silently – is some assurance to the oil companies that they will
perhaps get production license considering that they’ve already signed an MOU. More
investment in Uganda means, our local suppliers get to win [some] contracts. A
possibility of some jobs – I’ll refrain from a particular figure – and then
infrastructure development. </span></div>
<span style="line-height: 115%;"><span style="font-family: Trebuchet MS, sans-serif;"><br /></span></span>
<span style="line-height: 115%;"><span style="font-family: Trebuchet MS, sans-serif;">What I can say, the MOU was signed, and meaning
government and oil companies are reading from the same script. I can also say a
roadmap can take as long as possible. We still have several unanswered questions especially on project costs, whether we need both a refinery and pipeline? What have the oil companies exactly committed to? What we need to watch closely is the current Public Finance Management Bill in parliament that indicates how revenue from petroleum is going to managed. </span></span>mumakeithhttp://www.blogger.com/profile/01830783058553136408noreply@blogger.com2tag:blogger.com,1999:blog-51895632228574929.post-67655443416556438722014-02-06T08:00:00.000+03:002014-02-06T08:00:09.138+03:00Finance Trust Bank: Local bank but will it hack it as a commercial bank? <div class="MsoNormal">
26 – The number of licensed commercial banks in Uganda. Not
a terrible statistic considering that only one commercial has been closed down
in the last five years. The <a href="http://www.cbagroup.com/" target="_blank">Commercial Bank of Africa (CBA)</a> and
<a href="http://www.financetrust.co.ug/" target="_blank">Finance Trust Bank</a> are the latest entrants in Uganda’s commercial banking
scene. More recently, <a href="http://www.bloomberg.com/news/2014-02-04/nigeria-s-guaranty-trust-completes-purchase-of-kenya-s-fina-bank.html" target="_blank">Guaranty Trust Bank (GTBank) acquired a 70percent stake in Fina Bank</a>. (I’ll write about the prospects for GTBank in
Uganda next time) </div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Finance Trust Bank is not entirely new to Uganda’s banking
scene. Founded in 1984, Finance Trust Bank started as a microfinance
institution until December 2013. Its focus: providing affordable to mainly
women. It is, rather was, not a small microfinance. It boasts of 35 branches.
The transition into commercial banking means that Finance Trust Bank made the
baby steps just like Centenary Bank – Uganda’s 5<sup>th</sup> largest bank by
assets – did. </div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
FTB with its current figures of Ushs43bn in customer
deposits, Ushs58bn loan book and assets of Ushs91bn, will have its work cut out
in the commercial banking segment. In customer deposits, it comes at number 20.
On the size of the loan book it is ranked 18, just above United Bank of Africa
(UBA). With its assets of Shs91bn, we can ideally say, FTB is now Uganda’s 19<sup>th</sup>
largest bank out of 26. In 2012, the bank also recorded after tax profit of
Shs1.5bn, which would have placed it in 17<sup>th</sup> position. These numbers
considering that it already has 30 branches, means it has already spent on some start-up costs and will not have to go through the cycle again. </div>
<div class="MsoNormal">
<br /></div>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="http://3.bp.blogspot.com/-ZwxwBNUMs7A/UvKYfu1cB_I/AAAAAAAAA2g/Ktcfx7JTnVU/s1600/fin-trust-mid.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" src="http://3.bp.blogspot.com/-ZwxwBNUMs7A/UvKYfu1cB_I/AAAAAAAAA2g/Ktcfx7JTnVU/s1600/fin-trust-mid.jpg" height="209" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Prof Mutebile, BoU Governor & Irene Muloni (Chairperson FTB) Picture from<a href="http://www.newvision.co.ug/newvision_cms/newsimages/image/fin-trust-mid.jpg" target="_blank"> New Vision </a></td></tr>
</tbody></table>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The broader challenge however is managing to keep its
customers happy, with attractive interest rates especially for micro-lenders
who have grown with it over the years. Centenary Bank has managed to do this.
When Equity Bank of Kenya acquired Uganda Microfinance Limited in 2008, some
branches in rural areas were closed. They were not making money for the bank.
It was hemorrhaging money on administration costs. Moral of the story:
Commercial banking can be similar to microfinance but it is not the same thing. </div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Commercial banking comes with more demands, expectations and
survival. To begin with, FTB managers have to make sure the capital base of the
bank remains above Shs25bn – the regulatory requirement – and also “innovative”
[find ways of being more predatory] if they’re to sustainably grow. To shore up
its capital base, the bank apparently had to seek some international funders to
buy some stake in the bank, but to sustain this level of capital – or more –
the bank will have to make money. </div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
It is a whole new ball game for them. What advantage does
FTB have over other banks? Irene Muluni the Board Chairperson, FTB says, “Most
banks are in urban areas, which gives us the opportunity to go for rural women.”</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
FTB is a majority Ugandan owned bank. This we should be
proud of as “locally owned banks” have been in short supply. Ugandan
organizations – mostly women organizations – own 55.4percent of the bank. Only
Centenary Bank and Crane Bank have above this local ownership threshold.
Interestingly, Annet Nakawunde Mulindwa, the FTB CEO is only the second female
CEO of a commercial bank in Uganda. </div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
With all this bloom, will FTB making formal banking more
attractive. <a href="http://estanakkazi.blogspot.com/2013/12/economic-policy-research-centre-eprc.html" target="_blank">A 2013 Finiscope study on Financial Inclusion</a> [I have a hard copy of this report if you need it] indicates that between
2009 and 2013, the percentage of adult Ugandans with access to a formal bank
had declined by 1percent to 20percent. This, even after the increasing number
of commercial banks in the country. The same report indicates that the
percentage of Ugandans saving with a commercial bank had fallen to 19percent in
2013 from 21percent in 2009. Additionally, the number of Ugandans accessing
credit in a bank rose – marginally – from 5percent in 2009 to 6percent in 2013.
</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
FTB will however be boosted by the fact that 73percent of
borrowers – both formal and informal – take up small loans of Shs500,000 and
14percent taking up about Shs1,000,000. Since the FTB’s focus will be those
Ugandans in rural areas, then they could succeed. Considering its focus to
encouraging women entrepreneurship and financing, it could also help increase
the percentage of women with access to formal banking services. </div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
However, when FTB was a microfinance institution, it was
also in the formal banking category and the numbers as we’ve seen have been
stagnant. What will it do differently? We’ll wait and see. </div>
<br />
<div class="MsoNormal">
<br /></div>
mumakeithhttp://www.blogger.com/profile/01830783058553136408noreply@blogger.com3tag:blogger.com,1999:blog-51895632228574929.post-45095828819694872572014-01-20T09:46:00.000+03:002014-01-20T09:57:26.318+03:00We were not duped on Electricity Tariffs. We simply didn't tell the story. <blockquote class="tr_bq">
<span style="font-family: Trebuchet MS, sans-serif;">This new information environment in which we live, it’s so vastly different from what it was a few decades ago. It’s noisier; it’s more confusing; there are a lot of sources of information that are not trustworthy. Many talk shows and many blogs are in that category, just the sheer noise of all the media messages that are coming at us. I think what we need journalists to do is help us find some clarity amidst that noise and confusion, and not add to it. So I think there’s some real urgency around this particular issue in journalism. Thomas E Patterson. </span></blockquote>
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span>
<span style="font-family: Trebuchet MS, sans-serif;">Electricity tariffs have always been a touchy subject. Often, Umeme, the power distributor taking most of the heat. Sometimes, rightly so considering it is at the tail end of the electricity value chain and closer to the consumer. However, The regulator, Electricity Regulatory Authority (ERA), is one that sets the tariff. Mid this month, ERA made the announcement where the tariff was reduced - that is the phrase being used - by 0.8percent to Shs520.4. In their statement, however, there was also an increment for the first 15 units of electricity; from Shs100 to Shs150, an increment of 50percent. Yet again, ERA pointed out that the government would be spending Shs59.5bn on thermal plants - without specifically indicating where this money come from. </span><br />
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span>
<span style="font-family: Trebuchet MS, sans-serif;">So which story did we pick on? It was one where ERA apparently reduced the tariff by 0.8percent but then we sort of sidestepped the 50percent increment on the first 15 units. Yes, the reduction may have been historic but it was insignificant and the impact on the consumer is minimal. The consumer of electricity is one we write for and is one we have to be informing. Did we do a good job in letting them know whether they would be paying less? Perhaps not. Yes we had all these deadlines to beat and file stories for our newsrooms but this matter needed to have explored further to actually point out to the consumer that this reduction was - on paper - a reduction but in broader terms an increment or no change at all. </span><br />
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span>
<span style="font-family: Trebuchet MS, sans-serif;">I'd done my own calculation, but here is one done by a journalist on Facebook group wall:</span><br />
<br />
<blockquote class="tr_bq">
<span style="font-family: Trebuchet MS, sans-serif;">"Under the old tariffs, you were paying Shs 100 for the first 15.5 units (Shs 1,550) and 84.5 units X 524.5 = 44,320. Your total would be Shs 45,870. Under the new tariffs, you are going to pay Shs 150 for the first 15 units = 2,250, and Shs 520.6 X 85 units = Shs 46,501. Ideally, the total for the 85 units should have gone down by Shs 69 but because the cost of the first 15 units went up by a total of Shs 700, the total bill will go up by Shs 631"</span></blockquote>
<span style="font-family: Trebuchet MS, sans-serif;">The<a href="http://www.monitor.co.ug/News/National/ERA-reduces-power-tariffs/-/688334/2146332/-/10cwn7bz/-/index.html" target="_blank"> Daily Monitor covered this story</a>, but Nelson Wesonga did not write the story yet his insight on the sector - as always - I admire. Monitor did allow him to do some commentary right next to the story. </span><br />
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span>
<br />
<blockquote class="tr_bq">
<span style="font-family: Trebuchet MS, sans-serif;">Noteworthy, too, is that ERA has increased the charge for each of the first 15 units that one uses from Shs100 to Shs150! That means a poor man - and I believe there are “a few others” like me - who use averagely 20 units in a month, will save only Shs28 per month.</span> </blockquote>
<span style="font-family: Trebuchet MS, sans-serif;"><a href="http://www.hks.harvard.edu/about/faculty-staff-directory/thomas-patterson" target="_blank">Thomas Patterson</a>, author of a new book, <a href="http://www.amazon.com/Informing-News-Knowledge-Based-Journalism-Vintage/dp/0345806603" target="_blank">Informing the News - Need for Knowledge Based Journalism </a>in a <a href="http://www.niemanlab.org/2013/11/monday-qa-thomas-patterson-on-why-journalists-need-to-up-their-knowledge-game/" target="_blank">Nieman Labs interview</a> says: </span><br />
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span>
<br />
<blockquote class="tr_bq">
<span style="font-family: Trebuchet MS, sans-serif;">I think journalists need to have a better understanding of their audience. Traditionally, they’ve had a pretty good understanding of the news process and the gathering of news — the production of news and the dissemination of news — but not a real, deep understanding of their audience: how people learn, what it is about news stories that leave an impact, and what’s the cumulative effect of news coverage.</span></blockquote>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="http://1.bp.blogspot.com/-IQzMzJ_7nso/UtzIrFwL-BI/AAAAAAAAAyw/KXssmAgbRUM/s1600/Electricity+Uganda.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" src="http://1.bp.blogspot.com/-IQzMzJ_7nso/UtzIrFwL-BI/AAAAAAAAAyw/KXssmAgbRUM/s1600/Electricity+Uganda.jpg" height="213" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Pic from <a href="http://www.btcctb.org/en/casestudy/electricity-fight-poverty-rural-uganda">http://www.btcctb.org/en/casestudy/electricity-fight-poverty-rural-uganda</a></td></tr>
</tbody></table>
<br />
<br />
<span style="font-family: Trebuchet MS, sans-serif;">In the same interview, he adds: </span><br />
<blockquote class="tr_bq">
<span style="font-family: Trebuchet MS, sans-serif;">Another piece of it, of course, is numerical literacy. Many journalism programs don’t require their students to understand numbers, statistics, government reports, and the like. I find it hard to think how a reporter can operate in this increasingly complex, number-driven world without the ability, not to do the numbers or collect the data, but once looking at it to understand it and be able to interpret it in a way that enables the audience to see its significance. </span></blockquote>
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span>
<span style="font-family: Trebuchet MS, sans-serif;">The debate on the other hand has been to report the story because we finally have a reduction in Tariffs in over a decade. So what if it is the first reduction? Is the "small" consumer the only person who reads the news - if they do at all? How many units of electricity does a Ugandan household consume on average? Would this reduction have helped them? Did the industrial consumer get a much needed reduction so that costs of production can reduce? In other words, so what if they have "reduced" the tariff? Where is the money to pay the thermal plants going to come from, a subsidy or it is part of the tariff? Did Umeme get what it wanted? </span><br />
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span>
<span style="font-family: Trebuchet MS, sans-serif;">Take note that ERA said electricity losses had dropped from 23percent to 20percent at the end of 2012. What does this exactly mean? If the losses have reduced by this margin, why isn't it being reflected in the tariff? Are we perhaps too fixated on Umeme and not doing enough to put ERA to task? </span>mumakeithhttp://www.blogger.com/profile/01830783058553136408noreply@blogger.com3tag:blogger.com,1999:blog-51895632228574929.post-58604237317744112432013-12-17T21:38:00.002+03:002013-12-17T21:38:54.332+03:00What you need to know about the firms interested in constructing your oil refinery<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">Many have said Uganda has been too slow in propelling itself into oil production after discovering oil in 2006. Others - mainly oil
companies – have insisted <a href="http://www.bloomberg.com/news/2013-08-19/kenya-from-nowhere-plans-east-africa-s-first-oil-exports-energy.html" target="_blank">Kenya could </a>be the first oil producer in East Africa. Pressure
from the same oil companies –<a href="http://www.oilinuganda.org/features/companies/we-are-wasting-time-says-tullow-chief.html" target="_blank"> Elly Karuhanga, President Tullow Uganda </a>– has
been growing for government to issue production licenses. All that,
understandable as it may be, is seemingly not going to let the government barge
from it taking its time, including completing an oil refinery. Meanwhile, the
expectations from Ugandans continue to grow. With all this, the government
seeks to first get the refinery project off the ground. So as the compensation process
goes on in the 29 square kilometer piece of land for the refinery, in Kabale, Hoima District, the <a href="http://www.petroleum.go.ug/page.php?k=curnews&id=76" target="_blank">final six firms and consortia bidding to build the refinery have been released. </a>The diverse list is not dominated by Chinese companies as
earlier speculated. So what? You may ask. Well, these firms want to be part of
an infrastructure project, that if economical enough, could see a drop in fuel
prices and propel Uganda to be self-sufficient, partly tilting the Balance of Payments. According to Bank of Uganda statistics, the value of oil imports in 2012 increased to USD1bn from USD800m in 2011. </span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">The China Petroleum and Pipeline Bureau (CPP) consortium was
first on the list. Projections would indicate that this consortium at best, includes a host of Chinese companies involved in the petroleum production value
chain. CPP, is also a subsidiary of the Chinese National Petroleum Corporation
(CNPC) which is placing itself a global oil producer. CNPC has assets of over
USD480bn more than twenty times the size of Uganda’s GDP. Chinese companies
more often than not have the finances from their development banks to spend on
big infrastructure projects. Cheap financing is understandable because it doesn’t
weigh heavily on the refinery once completed. Notably however, refineries <a href="http://www.reuters.com/article/2012/01/24/chad-china-refinery-idUSL5E8CO3BR20120124" target="_blank">in Chad</a> and <a href="http://www.ventures-africa.com/2012/10/nigers-first-oil-refinery-cant-compete-with-regional-prices/" target="_blank">Niger</a>,
all with a 40percent stake from Chinese companies, in 2012 were operating below
capacity as government and the companies failed to agree on oil prices. </span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">From Japan – Ugandans drive lots of Toyota’s from the
country – is the <a href="http://www.marubeni.com/" target="_blank">Marubeni Corporation</a>,
which is the only firm listed on the six. In other-words, it is only the one
single company that did not submit a bid as part of a consortium. Internet
searches and the company website describe it as a major player in the
construction, exportation and marketing of oil and gas projects. It is a conglomerate that has major investments in Health, transportation, industrial
machinery, energy, mineral resources, ICT, Finance and Real Estate among
others. It is currently part of refinery projects in Kazakhstan, Qatar and
Kuwait. In 2012 however, the company was forced pay USD54m in fines after <a href="http://blogs.wsj.com/corruption-currents/2012/01/17/marubeni-corp-agrees-to-pay-54-6-million-to-settle-fcpa-probe/" target="_blank">violating U.S. Foreign Corrupt Practices Act (“FCPA”) in a Nigerian LNG Plant construction project.</a></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">Ever heard of Petrofac? Well, Petrofac apparently spent $1.5m
(£1m) on a private jet for the boss plus $189,000 on client entertainment
<a href="http://www.independent.co.uk/news/business/news/petrofac-spent-1m-on-bosss-private-jet-8651496.html" target="_blank">according to a story written by UK’s Independent</a>. That aside, Petrofac a UK company, registered in
Jersey, USA, also submitted a bid with a consortium. Petrofac is involved in
various infrastructure projects in the oil and gas sector in Algeria, Tunisia
and Malaysia. Its strength is in the petrochemicals segment, which is usually
an offshoot of refining. In September 2013, Petrofac led a consortium that won
a deal to construct a petrochemicals plant in Kazakhstan.</span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">Russia is a power
house in the oil and gas sector. Its companies, like Roseneft and Gazpromm have
proven to be major players in Europe. Well, it is rather not surprising that a
consortium led RT – General Resources has also expressed interest in the
Ugandan refinery. RT – General Resources is a subsidiary of the Russian state
corporation – Rostec. Rostec, is also known to be involved in the businesses of firearms, and in October 2013, signed a USD1bn arms deal <a href="http://rostec.ru/en/news/3266" target="_blank">with the Angolan Government.</a>
They also service and supply <a href="http://rostec.ru/en/news/2705" target="_blank">Russian made helicopters</a>. In
Natural resources, they’ve mining activities in Zimbabwe. Interestingly of all
the companies/consortia that placed bids for the refinery, RT – General Services
is the only one that issued a <a href="http://rt.com/business/russia-uganda-oil-refinery-291/" target="_blank">statement eventually picked up by the news wires</a>.
Their consortium includes VTB Capital, the lending arm of the VTB Group a
leading Russian financial services – including banking – provider. It is
60percent owned by the Russian Government. Tatneft, another Russian company, is involved in the entire value chain from exploration to marketing, is also part
of the consortium. A point to ponder on though is a statement in the Russian
media outlet RT, which reveals that Andrey Korobov, the General Director of RT
– Global Resources said “The consortium aims to recoup the money spent on the
project in a short time due to the high oil price.” </span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">As South Korea ponders on the next move to be made the young
North Korean leader, Kim Jong Un their companies have been making inroads in
Africa. Samsung has pitted itself against Japanese Companies like Panasonic,
Sony and Olympus on one hand and Apple on the other. This time, the
largest oil refiner in South Korea SK Energy – a subsidiary of the <a href="http://www.sk.com/About/affiliates" target="_blank">SK Group</a> - has also put in a bid with a consortium of companies for the Ugandan refinery.
Korean media has been reporting declining fortune at home explaining why it has
been looking for opportunities in <a href="http://blogs.wsj.com/moneybeat/2013/12/06/koreas-s-oil-sk-energy-bid-for-australias-united-petroleum/" target="_blank">countries like Australia</a>.
The SK Group has eight subsidiaries in just the petroleum value chain.</span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">Know a country called Iran? Of course you do. Well, this has
nothing to do with Nuclear Weapons but has everything to do with it. In September
2012, there was an EU embargo on Iranian oil imports; that limited any business
performed by international companies with ties in the EU. In that month, Vitol a
Swiss company, the largest and most aggressive energy and commodities trading
company, admitted – <a href="http://www.vitol.com/latest-news/192-vitol-statement-concerning-trade-in-iranian-crude-oil-and-oil-products" target="_blank">well kinda </a>– to have traded some <a href="http://www.ft.com/intl/cms/s/0/220e4f34-07ed-11e2-a2d8-00144feabdc0.html" target="_blank">Iranian oil</a>.
Okay, if that is complex, remember the famous Iraq <a href="http://www.un.org/depts/oip/background/" target="_blank">UN oil-for-food-program?</a> Vitol also in 2007 pleaded guilty to theft and paying kickbacks to Iraq under
this program. It agreed to pay a fine of USD17.3m. So why are we talking about
Vitol? It is also leading a consortium of companies that want to construct an
oil refinery. Vitol [<a href="http://www.vitol.com/">http://www.vitol.com/</a>] is also vertically integrated – involved in the entire oil value chain.</span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">As the Uganda government deals with compensation of Ugandans
occupying the proposed refinery land, it now also has to go through a process
of finding the best possible partners in the oil refinery. One of these
consortia named above will have a 60percent in the refinery of about
60,000barrels per day. In an article I wrote for The CEO Magazine – <a href="http://www.oilinuganda.org/news-links/acme-awards-oil-and-gas-reporters.html" target="_blank">Honorary mention in the 2012 ACME Oil and Gas reporting awards</a> – a Norwegian expert told me:</span></div>
<blockquote class="tr_bq">
<span style="font-family: Trebuchet MS, sans-serif;"> “Worldwide,
there are more than 600 refineries with different solutions for state involvement
based on history, economics and politics. Each situation must be evaluated on its own merits, and I am confident that
Uganda will find a solution which serves the country well,” - Sverre Brydøy a consultant
with IPAN [The International Petroleum Associates Norway (IPAN), a consulting
firm with expertise in exploitation of oil and gas including refinery models.] </span></blockquote>
<br />
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">In the same article, <a href="http://www.findingpetroleum.com/biography/Dr_Keith_Myers/7584f65e.aspx" target="_blank">Dr Keith Myers</a> [previously worked for
BP and rose to the level of Senior Commercial Advisor until 2000, when he quit. He now offers advisory
services through Richmond Energy Partners – which he founded – to investors and
oil and gas companies.] also noted; </span></div>
<blockquote class="tr_bq">
<span style="font-family: Trebuchet MS, sans-serif;">“I assume that the GOU will wish to have
its share of the capital costs paid by others. The providers of capital will
want a considerable degree of control over how the refinery operates until
their risk capital is repaid. The challenge comes in aligning purely
commercial objectives with a political agenda that may compromise profits from
the commercial partner's perspective. Refinery joint ventures between State Enterprises and commercial investors work best </span><span style="font-family: 'Trebuchet MS', sans-serif;">where objectives are aligned, but the relationships are never easy.”</span></blockquote>
mumakeithhttp://www.blogger.com/profile/01830783058553136408noreply@blogger.com1tag:blogger.com,1999:blog-51895632228574929.post-10963911568587624692013-12-06T00:20:00.000+03:002013-12-06T23:23:18.353+03:00On Umeme: let’s get back to the basics<div class="MsoNormal">
<span style="font-family: 'Trebuchet MS', sans-serif;">It is the last day of November – 30</span><sup style="font-family: 'Trebuchet MS', sans-serif;">th</sup><span style="font-family: 'Trebuchet MS', sans-serif;"> to be exact –
in 2012. The sun is finding its way through the clouds. We are at
the Sheraton Kampala Hotel. The same Hotel where <a href="http://www.nytimes.com/1981/04/20/world/a-stylish-hotel-lives-to-mirror-uganda-s-fate.html" target="_blank">everything was "Kwisha" in 1981</a>.
Fast forward to 2013, I once got served milk that had gone bad. I abandoned the cornflakes. Well, on this November day, Umeme had treated us to breakfast and a host of
speeches. It was on this day Umeme got listed on the Stock Exchange. And yes,
the trading floor was temporarily moved to the Sheraton. “They have been bought
off,” they said. “Why are they not telling us the issues? Umeme is cheating
us?” they added. Oh well, I wonder how breakfast could be a form of buying us
off? But the company got listed, the first since 2009. The price has since
appreciated by 36percent and now a share is worth Shs365. Good for the company
and good for the USE. Such days are rare for the USE. </span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal" style="text-align: center;">
<span style="font-family: Trebuchet MS, sans-serif;">xxxxxxxxxxxxxxxxx</span></div>
<div class="MsoNormal" style="text-align: center;">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">The generators blare on. Downtown Kampala, traders along
Nasser Road are listening to their Radios. Later in the evening they will
watch NTV and on Newsnight, Andrew Mwenda will be talking about “daft MPs”
trying to get the “Umeme contract cancelled.” We suffer from "lack of
intellectuals" to analyse issues, he will say. The Umeme concession is in its 8<sup>th</sup> year
– of 21years. When MPs made recommendations after an adhoc committee report on the electricity sector, one of them: terminate the Umeme contract as they claimed it was signed in
bad faith. We got a bad deal. Additionally, Umeme lied. In defense of
Umeme – and partly, I agree – Mwenda notes that Umeme has not breached any of
the concession terms and in fact continues to invest in Uganda, achieving the targets set for it. They recently
added a Shs485bn loan deal from IFC, Stanbic and Standard Chartered for further investment between 2015 and 2018. </span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">Yes the
concession agreement is complex. You'd have to breakdown the key issues, one by one, including taxation. So let’s deal with the
basics. Umeme is inefficient – sometimes. Bills are still estimated and the
generators are dominant. In Kampala, we lack a smart grid. Sometimes the
slightest of winds – even before the rains – we are plunged into darkness. They’re “trying to fix” the grid. It is not that easy –
they say. Western Uganda is now expected to experience more than four months of
load-shedding as the grid is upgraded. But what do we want? Electricity!
Efficient supply of electricity. Where did all this start? Uganda Electricity
Board (UEB) used to be the power distributor and generator. We had daytime and
nighttime load-shedding. It was inefficient. It had suffered from elite capture.
The same “elite” still running some of electricity bodies like UETCL, UEDCL and UEGCL – all replaced UEB. All these companies have a role to play in the energy sector. It is complex. UETCL undertakes most of the high level projects on behalf of government. If the transmission lines are inefficient, we have the right to blame them. </span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">We delayed power projects yet more people were added on the
grid. Bujagali delayed. We blamed butterfly activists and Ken Lukyamuzi. Then
desperately to keep our lights on, we brought in thermal generators – at a
premium. Government decided to subsidise the tariff. Bujagali “went live” in
2012. We had excess electricity, an "un-smart" grid and an ad-hoc committee
report. The company went public, the investor, <a href="http://mumakeith.blogspot.com/2013/09/how-actis-minted-billions-in-uganda.html" target="_blank">Actis got back about Shs92bn returns on loans for “upgrading” the systems since 2007. </a></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">With Bujagali and ESKOM – running Kira and Nalubaale – they
want a power distributor that can make collections for them to get paid. The
lending arm of the World Bank, IFC, and Germany’s KFW etc… are all investors in
Bujagali. IFC is also a lender to Umeme and holds a 3percent stake in the
company. IFC wants a return on the money invested in Umeme, they also want to
make money from Bujagali. One Bujagali official notes that they prefer Umeme as
a distributor, that way they get paid on-time to avoid creditors knocking on their
doors. The pressure is on Umeme and Ugandans. If we generate more power, where
does it go if we lose 24percent of it? Well, the tariff. We are going to have
another huge Dam, Karuma. The Chinese will build and finance most of it. If
you think the tariff will drop, well, unless UEB makes it back. To pay for all
this energy, the tariff is likely to edge higher. If we get more industries,
then, maybe then we won’t pay that much. So even with the tariff, Umeme has to
collect the money. They have improved that to 94percent -2012. Then comes in
bill estimation!! There is a planned roll-out of prepaid meters – already for
some people in Kampala these meters can be seen. They are mandatory, you either
get one or get abused by a sub-contractor. The roll-out for the whole country
is expected to cost USD300m. Who will pay for it? You. While we pay our bills,
some government agencies default. Remember what became of Uganda Airlines? The
government racked up a bill that they didn’t pay, sometimes. This cost the airline
and it is partly why it went under. </span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">Point here is, yes we need the FDI, but Umeme’s
is not doing charity work, neither for themselves nor for us. We have to keep
asking the questions, no matter how “stupid” they sound. If we stop asking,
then who will, yet we are the ones who pay the price. If the elite can’t
explain the basics, then who will? If they assume, “yeah, Ugandans suffer from
lack-of-intellectualism-so-let-us-ignore-them” then how do "they" expect the apathy to go
away? The more we discuss Umeme, the more open they become. A Ugandan SME needs efficient supply of electricity. </span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal" style="text-align: center;">
<span style="font-family: Trebuchet MS, sans-serif;">XXXXXXXXXXXXX</span></div>
<div class="MsoNormal">
<br /></div>
<br />
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">The first thing any business reporter who wants to write
about the stock market is told is: “buy shares.” That way you’ll understand how our small stock exchange works. So that way, you become an investor, sometimes, you forget you're a journalist. So yes, despite the "machinations" about Umeme, the demand for the shares of the company has been on a rise.The reason: Institutional investors. Institutional investors, mostly offshore [Mauritius] seem confident. Umeme Limited, Uganda, is 60percent owned by Umeme Holdings - managed and owned by Actis. For one,it has most sophisticated tax arrangements. The holding
company that owns Umeme is domiciled in Mauritius [tax haven]. <a href="http://www.pwyp.no/conference/speaker/guttorm-schjelderup" target="_blank">Prof. Guttorm Schjelderup</a> calls this [tax havens] a facilitator of “sophisticated tax planning.” It is a listed company. Disclosure is not problem. <a href="http://www.nytimes.com/2012/12/02/business/exposure-the-story-of-a-british-whistle-blower-in-japan.html?_r=0" target="_blank">Olympus is a listed company in Japan.</a> <a href="http://news.bbc.co.uk/2/hi/business/1780075.stm" target="_blank">Enron was</a> listed on the NYSE. <a href="http://www.bloomberg.com/news/2012-07-16/libor-flaws-allowed-banks-to-rig-rates-without-conspiracy.html" target="_blank">Listed banks have rigged Libor</a>, been fined and the world moved on. </span></div>
mumakeithhttp://www.blogger.com/profile/01830783058553136408noreply@blogger.com0tag:blogger.com,1999:blog-51895632228574929.post-25692150068975208562013-11-26T08:06:00.000+03:002013-11-26T11:58:25.320+03:00Dear Hon. Tumwebaze, thank you for showing us how "things" can be done<blockquote class="tr_bq">
<span style="font-family: Cambria, serif; line-height: 18px;">"It is a melancholy object to those who walk through this great town, or travel in the country, when they see the streets, the roads, and cabin-doors crowded with beggars of the female sex, followed by three, four, or six children, all in rags, ad importuning every passenger for an alms," Jonathan Swift, A Modest Proposal</span></blockquote>
<div class="MsoNormal">
<span style="font-family: Cambria, serif; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Cambria, serif; line-height: 115%;">Dear Hon. Frank Tumwebaze, </span></div>
<div class="MsoNormal">
<span style="font-family: Cambria, serif; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Cambria, serif; line-height: 115%;">I would first of all like to thank you for keeping time, at
least for once. Last month, we had to wait for an event to kick-off because the
minister had delayed by over an hour. He offered no apologies. Instead the
emcee would go on to say that they thank the minister for sparing sometime in
his busy schedule to come and grace the event. Guess what Hon Tumwebaze, we
also had a busy schedule but made it on time to the event. And that minister is not you, it someone else I do not want to mention. So now you understand why I
appreciate that you kept time. I just hope we keep up the spirit, maybe that
way, this country can move forward.</span></div>
<div class="MsoNormal">
<span style="font-family: Cambria, serif; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Cambria, serif; line-height: 115%;">There is this councillor who was bungled out of City Hall.
Did you see that? I mean, there are video clips of “Omussajja wa Bwino” being
lifted out of City Hall. Meanwhile while you were busy conducting your role as
minister, the police also treated a lawyer like a rag-tag, a nobody, a thug and
a goon. The video clips make for some absurd viewing from my point of view. Of
course as always, your defense on such matters is always rather interesting to
read. It is from this point that I request that since you rub shoulders with
the President, maybe we should treat people who steal public funds the same
way. Remember the billions that went missing from our coffers and donors
decided to pull the plugs? I wonder why we don’t adopt such an approach for
them. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: Cambria, serif; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Cambria, serif; line-height: 115%;">I understand that currently most of the culprits including
Mr Kazinda himself are “facing the full force of the law,” a phrase that you
really like to use most of the time. Our very own courts are doing their jobs,
despite the sluggish progress. These courts are constitutional, aren’t they? You know what though? the KCCA Act that you quote supersedes
the constitution. Not so? Please help me understand your emphasis on two-thirds
majority in the act yet we’ve a constitution? So I also think considering that
a small matter of a court order or even lack of presence of the defense team in
City Hall, the best way to deliver a sucker-punch to people in-the-wrong
should be so blanket. Let’s crucify them. Not so? </span></div>
<div class="MsoNormal">
<span style="font-family: Cambria, serif; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Cambria, serif; line-height: 115%;">I know you have a rather
assertive way of speaking and sometimes heckling tendencies [refer to The
Fourth Estate on NTV] and of course you can always plead plausible deniability; that you had no idea there was a court order. Indeed, how could you have known?
In fact I think whoever steals public resources should not be allowed a defense
at all. We should lock their lawyers out of the courtroom and use our starved
police officers to keep them out. I also want a ministry of rape and defilement
to be formed so we can have cases expedited since our courts are wasting their
time. Don’t you agree with that? <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: Cambria, serif; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Cambria, serif; line-height: 115%;">In 1701, Jonathan Swift in A Mediation Upon a Broomstick
wrote, <i>"But a broomstick, perhaps you will say, is an emblem of a tree
standing on its head; and pray what is man, but a topsy-turvy creature, his
animal faculties perpetually mounted on his rational, his head where his heels
should be, grovelling on the earth! and yet, with all his faults, he sets up to
be a universal reformer and corrector of abuses, a remover of grievances, rakes
into every slut's corner of nature, bringing hidden corruption to the light,
and raises a mighty dust where there was none before, sharing deeply all the
while in the very same pollutions he pretends to sweep away."</i><o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: Cambria, serif; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Cambria, serif; line-height: 115%;">Before you interrupt me on this point, please note that the
short story is a satirical piece, so in case you haven’t read it, please do
read between the lines. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: Cambria, serif; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Cambria, serif; line-height: 115%;">I hope you understand my point Hon. Minister. Meanwhile we
all understand Kampala can be a filthy city and well, Jenifer has done a fine
job. You know I'm business reporter, right? Even when a CEO is doing a fine
job, she/he is answerable to a board. That board must consist of non-executive
members to play that oversight role to keep the CEO in check. Oh, well, there
is parliament and councillors, they can always keep her in check. What is
interesting though, is the Lord Mayor and the Executive Director never appeared
to agree on anything but we still got things done. Didn’t we? Maybe, whoever we
disagree with in our places of work, we should push them out. Kick them out in
fact. Blackmail them into making a mistake, and then let them fall “into the
cups” – like we say. Do you know those
wonderful "middle sectors" we have on Jinja Road? We beautified them but now they
have partly been destroyed due to reconstruction of a <s>6lane road</s>. Was
this part of the broader plan for KCCA? I do not know. </span></div>
<div class="MsoNormal">
<span style="font-family: Cambria, serif; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Cambria, serif; font-size: small;"><span style="line-height: 115%;">You know Hon Minister,
when a company has built a good brand, is making money and shareholders are
happy, rarely does the head of the board chairman be offered for chopping. If he
is incompetent, then he’ll be kicked out. Like many of us will be if we </span></span><span style="font-family: Cambria, serif;"><span style="line-height: 18px;">under perform</span></span><span style="font-family: Cambria, serif; font-size: small;"><span style="line-height: 115%;"> at work. Well, Hon
Minister, KCCA is a better organization than ever and what I’ve been wondering
is that for all those </span><span style="line-height: 18px;">under performing</span><span style="line-height: 115%;"> ministries, why don’t have the PS’s moved
or sacked the same way. I mean why not? Did you read the latest Auditor
Generals report? Oh dear, oh dear, Statutory bodies are losing tax payers
money, but surprise, surprise, we still have the bosses seated at the top
comfortably. Why not adopt the same moves you used to remove these people? <o:p></o:p></span></span></div>
<div class="MsoNormal">
<span style="font-family: Cambria, serif; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Cambria, serif; line-height: 115%;">Let me conclude my letter by saying, I appreciate the work
you are doing; I mean who knew an elected leader would be impeached? Maybe it
is about time we also impeach under performing public officials. You have orchestrated
a political and legal masterstroke and now, Lukwago & co will spend hours,
days and months on a legal wild goose chase as you make amendments to the KCCA
Act. In the meantime, "they" could gain political capital and sympathy.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: Cambria, serif; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Cambria, serif; line-height: 115%;">Thank you for your time Hon. Minister. <o:p></o:p></span></div>
<br />
<div class="MsoNormal">
<span style="font-family: Cambria, serif; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Cambria, serif; line-height: 115%;">Yours Sincerely,</span><br />
<span style="font-family: Cambria, serif; line-height: 115%;"><br /></span>
<span style="font-family: Cambria, serif; line-height: 115%;"><br /></span>
<span style="font-family: Cambria, serif; line-height: 115%;"><br /></span>
<span style="font-family: Cambria, serif; line-height: 115%;">NB: Some say they are tired of sausages. I think they should be specific and tell us whether they don't like the Fresh Cut ones - because of the advert - or Sausage King. </span></div>
mumakeithhttp://www.blogger.com/profile/01830783058553136408noreply@blogger.com8tag:blogger.com,1999:blog-51895632228574929.post-22484961447123984812013-11-14T13:00:00.000+03:002013-11-14T14:43:20.426+03:00Forget the cross-listing pomp, it is but just that<div class="MsoNormal">
<span style="font-family: Cambria, serif; line-height: 115%;">Coffee!! At best, it is Nescafe, not Good African Coffee or
Star Café. A tale of Ugandan Hotels. A tale for another day.</span></div>
<div class="MsoNormal">
<span style="font-family: Cambria, serif; line-height: 115%;"><br /></span></div>
<div align="center" class="MsoNormal" style="text-align: center;">
<span style="font-family: "Cambria","serif"; line-height: 115%;">⊷⊷⊷⊷⊷⊷⊷⊷⊷⊷⊷<o:p></o:p></span></div>
<div align="center" class="MsoNormal" style="text-align: center;">
<span style="font-family: "Cambria","serif"; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Cambria","serif"; line-height: 115%;">Here is the context. The Uganda Securities Exchange is
vibrant, well, sometimes: Only on days when a company lists – locally – or
cross-lists. The pomp there after glides away with limited activity except for
companies like Umeme and Stanbic Bank. Uganda Clays used to be in that
category, but it’s been unimpressive over the years for the reasons that are
mostly copy and paste each year. Debt and low sales. This week, Uchumi one of
the largest Supermarket chains in East Africa was cross-listed on the USE after
the doing the same on Rwanda Securities Exchange (RSE). This is a "big company," currently valued at US$70m. For the USE – without a CEO & acting CEO – this
is much welcome boost, considering this will be one of its best performing year
if numbers are anything to go by. Its market capitalization – in simpler terms,
the value – will increase and the white boards will have one more ticker symbol:
UCHM. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Cambria","serif"; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Cambria","serif"; line-height: 115%;">A cross listed company is ideally having a company floated
on another stock market that is not its primary listing. The NSE – an exciting
market & largest in EA – is Uchumi’s primary listing, and now the USE –
located in an arcade along Kampala road – is its secondary listing. Ideally,
this listing is a good move. On the first day, 9,000 shares are traded creating
a turnover of Shs5.2m. If the momentum remained the same, then the USE would be an exciting place to hang-out. Well, this is not the case. Like they say
– I do not remember who came up with the phrase – “numbers don’t lie” but sometimes
can also be deceptive. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Cambria","serif"; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Cambria","serif"; line-height: 115%;">The USE has a total 8 cross-listed companies including
Kenya Airways, Jubilee Insurance, Centum Investments – I believe one of EA’s
best Investment companies -, EABL – I wonder why UBL, their subsidiary is not
listed locally -, Equity Bank, KCB and now Uchumi. In the history of the USE,
the highest or best trading year – 2010 - for cross-listed equities was when
shares worth Shs4.6bn were traded. This was for EABL. EABL has also recorded
the highest turnover of any cross-listed company. In 2011, Centum traded at
least Shs3.6bn worth of shares, but it was in that same year that it
cross-listed. Institutional investors gobbled up the shares. <o:p></o:p></span><br />
<span style="font-family: "Cambria","serif"; line-height: 115%;"><br /></span>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="http://3.bp.blogspot.com/-0W3DdBLt-Q4/UoS2842WnuI/AAAAAAAAAtk/6Qku8TmcHA0/s1600/UCHUMI.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" height="215" src="http://3.bp.blogspot.com/-0W3DdBLt-Q4/UoS2842WnuI/AAAAAAAAAtk/6Qku8TmcHA0/s320/UCHUMI.jpg" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture from <a href="http://www.monitor.co.ug/Business/Uchumi-to-cross-list-at-Uganda-bourse-this-year/-/688322/1971458/-/57qxgm/-/index.html" target="_blank">Daily Monitor </a></td></tr>
</tbody></table>
<span style="font-family: "Cambria","serif"; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Cambria","serif"; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Cambria, serif; font-size: small;"><span style="line-height: 115%;">UMEME is the only cross-listed company from Uganda on the NSE
and it has only traded once – only 1,000 shares back in September. It made
headlines, we were happy. I wrote</span></span><a href="http://www.theceomagazine-ug.com/news/what-umemes-first-nse-trade-in-8-months-means-for-the-market.html" style="font-family: Cambria, serif; line-height: 115%;" target="_blank"> this, “The </a><span style="font-family: Cambria, serif; font-size: small;"><span style="line-height: 115%;">challenge for Umeme now will be
having enough liquidity to satisfy the demand in Nairobi – if they do get
overwhelming demand.” These numbers are not the deceptive ones. Cross-listing
simply doesn’t make sense, at face value so they will say. Again they will add,
I am being too simplistic. "What does an </span></span><span style="font-family: Cambria, serif;"><span style="line-height: 18px;">award-less journalist know?"</span></span><span style="font-family: Cambria, serif; font-size: small;"><span style="line-height: 115%;"> First, in my simplicity, why would I buy shares for
a company listed in Kenya, yet I could just make a call to my Nairobi broker to
get me some shares? Of course considering that brokerage firms here in Uganda
are huffing and buffing, sometimes due to declining business. So just to
support my Ugandans in order for them to earn commission of trades, I’d buy the
shares. But “meh,” it is my money not theirs. </span></span></div>
<div class="MsoNormal">
<span style="font-family: Cambria, serif; font-size: small;"><span style="line-height: 115%;"><br /></span></span></div>
<div class="MsoNormal">
<span style="font-family: Cambria, serif; font-size: small;"><span style="line-height: 115%;">The second issue is that cross-listed
companies will come on day one and allocate shares to Ugandans. In fact Uchumi
has lined up at least 265.4million shares for the USE but will there be demand?
The boards will indicate blues and reds on the white board. I know, yes we
still use these. The blue marker is for
bids and offers, whereas the red is mainly to indicate a done deal. After this
“event” we’ll have some snacks, chat about the market and we’ll write all the
lovely stories. The </span></span><s style="font-family: Cambria, serif; line-height: 115%;">next few</s><span style="font-family: Cambria, serif; font-size: small;"><span style="line-height: 115%;"> days, the counter name will fade or gather
dust. Uchumi makes the claim that cross-listing will allow it raise money to
expand. I laugh. Ideally cross-listing helps raise money. Investopedia reads: “Some
of the advantages to cross-listing include having shares trade in multiple time
zones and in multiple currencies. This gives issuing companies more liquidity
and a greater ability to raise capital.” Our markets are not well developed. It
is not our fault. People don’t understand. <o:p></o:p></span></span></div>
<div class="MsoNormal">
<span style="font-family: Cambria, serif; font-size: small;"><span style="line-height: 115%;"><br /></span></span></div>
<div class="MsoNormal">
<span style="font-family: "Cambria","serif"; line-height: 115%;">Uchumi is planning a rights issue – shares given at a discount
price to share holders in order to raise money. Did they need to cross-list to
raise the money? Yes & No!!! Some Ugandan shareholders already owned part
of the company after they used the NSE. Only demand will tell. But history tells us, the shares might not be gobbled up. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Cambria","serif"; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Cambria, serif; font-size: small;"><span style="line-height: 115%;">Third is the small matter – read big matter – of transfer of
shares through an electronic system. It worked for UMEME, then the USE CEO
left, and now there’s information asymmetry. If the system worked, transfer of
shares would be rapid, but if it </span></span><span style="font-family: Cambria, serif;"><span style="line-height: 18px;">doesn't</span></span><span style="font-family: Cambria, serif; font-size: small;"><span style="line-height: 115%;"> then buying a cross-listed company
from this market would be “erm” a nonstarter - again. <o:p></o:p></span></span></div>
<div class="MsoNormal">
<span style="font-family: "Cambria","serif"; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Cambria","serif";"><span style="line-height: 115%;">But why do companies do it? Visibility is one. Uchumi,
already a known company is not only a supermarket chain but is now listed in
Kenya, Uganda and Rwanda. Investor confidence is up ahead of raising capital
for expansion. And yes we are East Africa, a Community. Who </span><span style="line-height: 18px;">wouldn't</span><span style="line-height: 115%;"> want to be
part of this? Since Uchumi is part of the USE, any developments make the
headlines. Investors are happy. Money will be raised. <o:p></o:p></span></span></div>
<div class="MsoNormal">
<span style="font-family: "Cambria","serif"; line-height: 115%;">They will say this is simplistic, but that it what it is.
I’m a journalist. I walk to the USE. The brokers will say, “owolugabo” has
come. Cross-listing is an event. It should be more than just that but that is
only if our markets become more integrated. Kenya, Rwanda and Uganda are not
Tanzania. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Cambria","serif"; line-height: 115%;"><br /></span></div>
<div align="center" class="MsoNormal" style="text-align: center;">
<span style="font-family: "Cambria","serif"; line-height: 115%;">⊷⊷⊷⊷⊷⊷⊷⊷⊷⊷⊷<o:p></o:p></span></div>
<div align="center" class="MsoNormal" style="text-align: center;">
<span style="font-family: "Cambria","serif"; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Cambria","serif"; line-height: 115%;">I like tea. Anytime is tea time. I sniff the leaves. The
plantations have some great aroma. Kericho Gold – Kenyan made tea – is what I
like. We have Ugandan tea. Its packaging is poor. It is ordinary. <o:p></o:p></span></div>
<br />mumakeithhttp://www.blogger.com/profile/01830783058553136408noreply@blogger.com4tag:blogger.com,1999:blog-51895632228574929.post-74849777486727057142013-10-24T14:04:00.000+03:002013-10-24T22:58:38.826+03:00On moving on & journalism <div class="MsoNormal">
<blockquote class="tr_bq">
“Ever since they left Thies, the women had not stopped singing. As soon as one group allowed the refrain to die, another picked it up, and new verses were born at the hazard of chance or inspiration, one word leading to another and each finding, in its turn, its rhythm and its place. No one was very sure any longer where the song began, or if it had an ending. It rolled out over its own length, like the movement of a serpent. It was as long as a life.” Sembene Ousmane [God's Bits of Wood]</blockquote>
<span style="font-family: "Cambria","serif";"><br /></span>
<span style="font-family: Trebuchet MS, sans-serif;">Journalism often
rewards those who are patient and excellent in their work. The rewards do not
necessarily have to be monetary – but can be. In most cases, we look to either
become journalism scholars or win an award[s] or even get a job with Reuters,
Bloomberg, FT & the Beeb among others. Like staring at a barrel or as if on gun point, the pressure in the newsroom is immense especially in a country
where we have a high turnover and limited retention. This month – mid this
month to be specific – I made the decision to leave T<a href="http://www.theceomagazine-ug.com/" target="_blank">he CEO Magazine</a> – a niche
business publication -, Uganda has a few of these. My time at the Magazine has been rewarding - career-wise - but also one that has exposed me to the good, bad
and ugly of journalism and all stakeholders involved. There was also the
pressure to jump ship and leave journalism altogether, but then like <a href="http://edition.cnn.com/2013/10/22/business/tech-ceo-eva-chen-dares-staff-to-fail/" target="_blank">Eva Chen</a> said “Don’t find a job, find your passion.” <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">Passion to write
about the corporate culture, companies and the economy: Passion to tell
stories. The need to scrutinize how companies operate or even how government
entities are run. The more we put out such stories, the more readers continue
to ask the questions, considering they are taxpayers, bank customers or even
consumers.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"> Some of these stories, no matter how good, are
not told. If they are, then there is always something missing. The CEO Magazine
offered me this opportunity, but it could only go so far. One of the challenges
in today’s newsrooms is how to keep the editorial independent of marketing and
advertising. This perhaps requires a whole different approach to the news –
especially if you have workers to pay. It also perhaps needs a new crop of
investors with the resources to at least run a newsroom without necessarily
looking at the profit in the medium term; Investors willing to plough back
profits into the publications. Ultimately, the investor needs to make a return
on investment but also publications need to be reputable, trusted and be
credible sources of information. Striking this balance is becoming ever more
complex – pressure on journalists is mounting even if we don’t want to admit
it. A lot has been said about the online, but the trouble is how to monetize online.
How do you invest in your newsroom? Simply going online can be suicidal, it
requires careful thought and research. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">The solutions to
some of these problems require some new approaches, which I have been studying
but can’t place my hand on one – not just yet. Governments maybe a threat – a
big one – to journalism but I believe advertising is becoming another big one
and the pressure on media owners is also relenting. I leave The CEO Magazine, a
better reporter – we all have our shortcoming. It hasn’t been easy though. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">One the more
disappointments in my time at The CEO Magazine was the UK Border Agency. In
March, the prestigious Reuters Institute offered me an opportunity to go for a
one week course on business and economic reporting in London. I spent about
Ushs370,000 on a Visa Application – this amount for a reporter is not easy to
churn out. The UK Border Agency denied me a Visa on the grounds that I did not
satisfy them enough on whether I’d return, even after Reuters had written a
letter indicating they would pay for my accommodation and meals. I have no land
titles, my bank account is well – I’d rather not say – considering a
journalist’s salary. It is such things that tend to be turn-offs but well we
persevere and move on. There are many other incidences – I will not talk about
them – but then why lament. Why not look to developing my career and maybe one
day the rewards will come. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">So many will
ask, where are you going? Well I’ll be joining the wonderful team at <a href="http://ugandaradionetwork.com/a/" target="_blank">UgandaRadio Network</a> – a news agency - for further professional development. </span><span style="font-family: Cambria, serif;"><o:p></o:p></span></div>
mumakeithhttp://www.blogger.com/profile/01830783058553136408noreply@blogger.com9tag:blogger.com,1999:blog-51895632228574929.post-10351617121932008642013-10-06T12:53:00.001+03:002013-10-07T14:44:48.554+03:00Ugandans; Why you should give a damn about the mining sector<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">Last week, Uganda hosted a
Mineral Wealth Conference, whose main focus was looking at how to invest in this
sector. Mining has over the years – since 2006 – been living in the shadows of
the oil sector – and rightly so. The mining sector is only 0.3percent of Uganda’s
GDP. In 2006 when the first major oil finds were made, the minerals sector was
struggling – at least less than 20 exploration licenses were issued then. By
end of 2010, a donor funded project led to an airborne survey of the whole
country to indicate the “mineral potential” of Uganda – with the exception of
Karamoja. As soon as the survey was completed, there was a “gold rush.” License
applications shot up from 70 to an incredible 625 by mid-2012. Additionally,
the tax revenues from this sector shot up from Ushs25.1bn in 2010/11 to
Ushs431bn in 2011/12, a rise of more than 1600%.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">Ushs431bn appears to be a large
sum of money, but it isn’t. Uganda has been exporting iron ore – at least
until a directive by President Museveni last year stopped this. The iron
exports, some receipted others not, have made their way to DRC and Kenya.
Interestingly though, more than 70percent of exploration licenses offered have
not submitted any returns/results – including some big companies like Steel
Rolling Mills. Steel Rolling Mills holds about 7 exploration licenses for iron
ore – can be used in making of steel – but it has not submitted returns to the
Department of Geological Survey and Mines, preferring to rely on scrap metal
and other imports. No value addition to minerals; guess who is losing out?
Uganda. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">The Department of Geological Survey
and Mines (DGSM) is understaffed, with at least only one person supervising
almost five districts. Supervision of activities on these mines has proven to
be difficult. The department admits this. In some instances, the department officials have been denied access to mines, for instance the Kasese Cobalt
Company Limited (KCCL) and some gold mines in Masindi - an Indian firm is said to have been mining Gold using an exploration license. Of course, there is the "invisible powerful hand" that usually pulls the strings. With this limited supervision of the sector, one can
only tell how much money Uganda is hemorrhaging from “illegal” mining activity.
With the Uganda government jubilant about funding 80percent of its
Ushs13trillion budget, this money is not enough to meet the financial needs of
this country. We could do with some extra cash. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">The limited attention the
department gets is telling as it receives limited funding, even the
commissioner admits it. All the money that the department receives goes to URA.
The department only gets allocations from the ministry of finance. The
officials from the department are also susceptible to bribery by mine owners,
simply because they don’t have “enough” money. At the end of the day, Uganda is
the one losing out the most. Some people acquire licenses just to “hawk” them
around, even when they have no record or experience of mining. In 2012, there
was the clear case of Hima Cement, with experience in limestone mining lost a
license to a little known EA Gold Sniffing. EA Gold Sniffing’s interest wasn’t
to explore for limestone, but rather to sale it to the highest bidder – Canada’s
Brandenburg Corp.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">Mining can also further deepen the cleavages that exist in a country. Communities maybe distorted by companies
coming to do some mining. Uganda mining potential is getting more hype, but
with civil society mostly concerned about the oil, mining communities are
fighting their own battles. In Tororo, residents of Sukulu are fighting for
their land as NILEFOS, a subsidiary of the Madvhani Group struggles to compensate
them. The mining act clearly states that to mine minerals underground, one must
acquire surface rights – from land owners. At the end of land valuation in
Sukulu, total compensation totaled to Ushs135bn with each household proposed to
get an average of Ushs53m. The amount was said to be high and the parties involved
don’t want to pay. This could morph into forced evictions if we are not careful. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">Additionally, mining distorts
communities and can easily take them away from agricultural activities, lead to child
labor and massive school drop-outs. Some of these are happening, but as long as
the country downplays them, the situation could get out of hand. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">Finally, you’ve probably heard
that Kilembe Mines were finally taken over by a consortium led by Tibet-Hima of
China. In October this year, the company started work on the mines in a Private
Public Partnership with government. The Uganda government in 1997/98 entered an
arrangement to own <a href="http://www.theceomagazine-ug.com/news/cobalt-mining-the-origin-of-kccl-blues-and-lessons-for-government.html" target="_blank">25percent stake in Kasese Cobalt Company Limited</a>. The
government, through Kilembe Mines secured an $8m loan from the European
Investment Bank to acquire this stake. To-date, the government has never received
dividend payment because profits have never been declared. Revenues are
depleted by shareholder loans – provided by the 75% shareholder - meaning
priority goes to paying this off. Currently, MFC Industrial owns 75% stake in
KCCL through complex offshore subsidiaries. In August 2013, the company
officially started restoring the land as “copper tailings” – where cobalt is
mined – run out. At the end of the whole period what Uganda has gained are just tax
revenues – even so, the company has evaded taxes before. Again, who is losing?
Uganda. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<span style="line-height: 115%;"><span style="font-family: Trebuchet MS, sans-serif;">We ought to wake up and
smell the coffee before it is too late. </span></span>mumakeithhttp://www.blogger.com/profile/01830783058553136408noreply@blogger.com3tag:blogger.com,1999:blog-51895632228574929.post-66258449574070136832013-09-05T13:57:00.001+03:002013-09-05T14:02:39.434+03:00Africa is rising. Ask the Investors!!! How Actis minted billions in Uganda, from just two companies Private equity exits in Uganda are rarely heard of, large ones at that. <a href="http://www.act.is/%E2%80%8E" target="_blank">Actis</a>, a British private equity firm, came to the forefront in Uganda in 2005 as it came in to manage a portfolio of assets run by the Commonwealth Development Corporation (CDC). In 2012, Actis begun a partial exit from Uganda – exit is not a word they like to use though – after <a href="http://www.theceomagazine-ug.com/news/umeme-shares-to-begin-trading-on-the-stock-market-november-30-2012.html" target="_blank">selling a 38 percent stake in Umeme</a> by taking the power distributor public. Later in 2013, May to be exact, they sold a <a href="http://www.theceomagazine-ug.com/news/with-new-shareholders-dfcu-looks-to-the-future-with-hope.html" target="_blank">45 percent stake in Dfcu Bank</a>, Uganda’s sixth largest bank. Actis in its partial exit from Ugandan companies’ has exhibited the country as fertile ground for investment returns. <br />
<br />
<b>The Umeme shareholder loan</b><br />
Umeme at the time of listing was valued at $178m, of which $66.73m or 38percent was sold to the public through an IPO in November 2012. The eventual listing, as Actis’ Tashi Lassalle notes was meant “to allow retail and the people of Uganda to invest.” She adds, “From our experience the ownership of a national utility company by domestic customers model works well...” On the other hand, however, Umeme had a debt burden, not that big though, but one where it was forking out interest payment of 12percent. Close to US$27m or Ushs66.9bn was the outstanding balance of this shareholder loan to Umeme Ltd, from Actis through a holding company called Umeme Holdings in Mauritius. The IPO was meant to raise money to pay-off the outstanding balance of this loan.<br />
<br />
Essentially the accounting geniuses at Actis insist they have not taken any dividends out of Umeme’s profits since 2005, at least until it went public and posted a profit at the end of 2012. Shareholders carefully structured a loan to Umeme, which they say had a high interest bearing. In fact, they concentrated on building a pool of retained earnings, now at Ushs141bn from a partly Ushs42bn in 2007.<br />
<br />
“...the Company has not paid dividends since its inception, although Umeme has paid an increasing level of shareholder loan interest for the past three years as a means of distributing cash to shareholders,” reads the Umeme IPO prospectus. At 12percent interest, Umeme shareholders, since 2009, got paid. Furthermore, interest on a loan has to be paid despite the performance of the company, in this case, the loan carefully hedged shareholders against non-payment just in-case the company makes losses. Luckily, the company has only posted a loss of Ushs2.8bn in 2010, since 2007.<br />
<br />
The shareholders loan, initiated in 2005, was to cater for capital investments in the utility company, a requirement for the concession. The Umeme IPO prospectus reads that the loan was “....to provide funding to Umeme related to the original target investment of US$65m..... The loan had a grace period of 4 years and repayment of the loan principal was expected to be in 7 equal annual installments effective 2009.” By end of 2011, Umeme was required to have paid back Ushs37.7bn of the loan, but it had only paid a total Ushs25.7bn since 2009. On this capital investment, they were guaranteed a handsome 20 percent return, annually.<br />
<br />
At the end of the day, after a shareholder loan injection of Ushs47.6bn in 2005 and 2007, Actis walked away with an estimated Ushs92.6bn – a few billions short of the retained earnings of 2011 - after interest and principle. After posting Ushs57.1bn net profit in 2012, the very first dividend payout totaled <a href="http://www.theceomagazine-ug.com/news/breaking-news/umeme-net-profit-up-shareholders-get-ushs24-4bn.html" target="_blank">Ushs24.3bn [Ushs15 per share].</a> Actis, through Umeme Holdings has over 975million shares [60.08%], translating into a total dividend payout out of Ushs14.6bn - before withholding tax of 15percent - , another handsome payday.<br />
<br />
Furthermore, Actis insists it has created investor value in <a href="http://www.theceomagazine-ug.com/news/is-success-of-umeme-ipo-a-victory-against-critics.html" target="_blank">Umeme as a business</a>. At a recent AGM, the Company Directors noted that they’ll keep continue “...generating sufficient profits to sustain and build the business while providing value to shareholders.” Currently, Umeme is trading at Ushs360 a 23.6percent rise from Ushs275, the IPO price. Value created; Perhaps.<br />
<br />
<b>The US$42m Dfcu stake sale</b><br />
Actis started managing the Commonwealth Development Corporation (CDC) 60.02percent shareholding in Dfcu Bank in 2004. In the same year, Dfcu went public with 30percent stake, as government and the World Banks’ IFC divested their interest in the bank, at Ushs230per share. On the day Dfcu was listed in 2004, the share price surged to Ushs305.<br />
<br />
Since then, Dfcu has grown and Actis, is quick to express the investor value created for the last 10years.<br />
“Today, DFCU is the 5th largest bank by assets, with an estimated asset base of US$387m (2012), representing approximately 7% of the total bank assets in Uganda. This represents 5x growth in the asset base – a 9 year CAGR of 18.5% (2003: US$84m to 2012: US$387m),” notes Actis’ Lassalle.<br />
<br />
Five months after selling a stake in Umeme, Actis sold a 45.05 percent stake in Dfcu – retaining 15percent – to Robabank (27.54 percent) and NORFUND (17.54 percent). The sell was the largest equity block trade facilitated by the Uganda Securities Exchange (USE) and Actis, sold at Ushs1030 per share, translating into a take home of Ushs111.9bn (US$42m).<br />
<br />
From a small time bank, to a big time bank whose asset base had been expanding, the partial exit a handsome return to Actis. Since 2004, Dfcu has posted net profits, the highest being Ushs31.5bn in 2011, and maintained a dividend of policy, on average, of 37percent of profit after tax. Actis, since 2004 has been earning a dividend from the 60.02percent (111,923,594 million shares) shareholding in Dfcu. For instance, between 2005 and 2012, Actis has earned over Ushs21.1bn in dividend payouts – excluding withholding tax. Furthermore, Actis was able to sidestep Capital Gains Tax obligations - on stake sale - to Uganda Revenue Authority, considering that as a listed company in Uganda, it doesn’t apply.<br />
<br />
No wonder Michael Turner, Director of East Africa, Actis Capital LLP, notes “this [transaction] was unique in the history of Uganda.” Actis, with two partial exits in Uganda, has shown that there’s a return on investment but only if you are as smart as they are.<br />
<div>
<br /></div>
mumakeithhttp://www.blogger.com/profile/01830783058553136408noreply@blogger.com4tag:blogger.com,1999:blog-51895632228574929.post-54910354006965702692013-08-16T16:47:00.000+03:002013-08-17T16:45:13.160+03:00Americanah: Forget the love story tag, this is an "intelligent book"Riveting. Subtle. Intelligent. Loaded. Blunt. <a href="http://www.amazon.com/Americanah-Chimamanda-Ngozi-Adichie/dp/0307271080" target="_blank">Americanah</a> is one such book. <a href="http://www.l3.ulg.ac.be/adichie/" target="_blank">Chimamanda Ngozi Adichie</a>, undoubtedly is a good story-teller. Her use of short sentences and a touch of poetry, makes it worthwhile to read Americanah. Americanah is no ordinary story, which is why I’d insist it is an intelligent book. The setting is in three continents; Europe, America and Africa. The protagonists: two love birds, Ifemelu and her childhood boyfriend Obinze. The story is a rather complex one, considering that race is widely covered in the book.<br />
<br />
The other issues, love perhaps, almost similar to any other love-story you can ever read. Ifemelu grew up in Nigeria and likes reading books. She is indifferent to her mother, who is religious – likes keeping up appearances in church. Adichie, intelligently, writes the story without losing track of the reader and avoids making it more of commentary or some sort of crusade. Ifemelu leaves Nigeria just like many others – due to instability – to get a "good" education in America, leaving behind her boyfriend, Obinze. Obinze and Ifemelu are cut from the same cloth. Incomplete without each other. In the modern day, they seem like snobs. But they ain’t.<br />
<br />
<blockquote class="tr_bq">
“Obinze laughed, vaguely bored, but happy that she was happy.” </blockquote>
<br />
In America, Ifemelu, is confused by the American society but she refuses to make it change her. She refuses to adopt some mannerisms and is not pretentious – unlike her Aunty Uju. Adiche, smoothly develops Ifemelu’s character and I could certainly feel that I knew her. She uses humor - lightly - to describe the simplest of things.<br />
<br />
<blockquote class="tr_bq">
“Ferdinand had a steely, amoral face; if one examined his hands, the blood of his enemies might be found crusted under his fingernails.”</blockquote>
<br />
She chips in with dialogue and then glides into the matter of race. Ifemelu is human. She gets depressed after failing to get a job so she can pay her tuition. She then “pleases a man” to get paid. She is disgusted. She is ashamed and cuts off all communication with Obinze.<br />
<br />
The riveting bit about Americanah, is how characters are developed - using some anecdotes. For instance, Ifemulu’s mother is a “church hopper” as she looks for the prosperity gospel – bringing out the religious theme of how Nigerian pastors like the prosperity theme.<br />
<br />
Obinze, while in the UK, before he is deported, is also developed as one who resents being pretentious, still likes reading and of course keeps thinking about Ifemelu. While in the UK he hustles, does a job using someone else's name and card. Working hard to raise money to pay-off some Angolans for a sham-wedding. It is in the description of Obinze's time in the UK that Adichie keeps the reader on tenterhooks, anticipating what will happen. He then turns up in Nigeria, becomes land-owner & joins the real-estate business. He however falls into the trap of a “marriage of convenience” - just like his other colleagues - to a flawless lady, Kosi.<br />
<br />
<blockquote class="tr_bq">
“Still, he had wanted her, chased her with lavish with single-mindedness. He had never seen a woman with such a perfect incline to her cheekbones that made her entire face seem so alive, so architectural, lifting when she smiled.” </blockquote>
<br />
Ifemelu is also now dating a flawless man, Blaine, who she admires because of his intelligence. All this while though, Obinze is on her mind.<br />
<br />
Adichie, tries as much as possible to make her two protagonists superior - above all. They are no saints but they've a conscience. Ifemelu goes on to start a blog about race and her encounters in United States. She earns from it. Her blog posts are included in the book – at some point I “almost got tired” of reading them. Ifemelu can also be rather annoying – that you could hate her – as spontaneously she decides to leave the US and go back Nigeria. She leaves Blaine.<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="http://2.bp.blogspot.com/-VGOZ2P4Xpgo/Ug4mgItZJZI/AAAAAAAAAp4/rk6w7pSpFcM/s1600/Chimamanda.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://2.bp.blogspot.com/-VGOZ2P4Xpgo/Ug4mgItZJZI/AAAAAAAAAp4/rk6w7pSpFcM/s320/Chimamanda.jpg" height="320" width="215" /></a></div>
<br />
<div class="separator" style="clear: both; text-align: center;">
</div>
<br />
<br />
[Two days before I bought this book, I had read this <a href="http://www.salon.com/2013/07/14/chimamanda_ngozi_adichie_race_doesnt_occur_to_me_partner/" target="_blank">interview </a> and I must admit - after reading both - it is almost like the book is an semi-autobiography.]<br />
<br />
Back in Nigeria, Ifemelu doesn't really hate it but after meeting some other returnees, she feels indifferent. Why? Because they want to eat in fancy looking places. She returned to feel at home not to get back to a life she left in the USA. She blogged about it, and her childhood friend Ranyinudo was not pleased. When she gets a job at a magazine, her dream is to turn it around with creative writing, but she is hit by the reality.<br />
In conversation with with her workmate Daisy, she doesn't mince her words.<br />
<br />
<blockquote class="tr_bq">
Ifemelu: “It makes no sense that Aunty Onenu likes to run three profiles of these boring women who have achieved nothing and have nothing to say. Or the younger women with zero talent who have decided they’re fashion designers.”</blockquote>
<blockquote class="tr_bq">
“You know they pay Aunty Onenu, right?” Doris asked. “They pay her?” Ifemelu stared. “No, I didn’t know. And you know I didn’t know.” </blockquote>
<blockquote class="tr_bq">
“Well, they do. Most of them. You have to realize a lot of things happen in this country like that?” </blockquote>
<blockquote class="tr_bq">
Ifemelu: “I never know where you stand or if you stand on anything at all”</blockquote>
<br />
She would later quit her job and started blogging again. The love story then makes a return in the final chapters of the book as her and Obinze meet again. The passion is rekindled for the two love birds. From this point, Adichie has already made her point. This is finely written but complex book, and Adichie does a good job to drive her point home – be yourself, stop pretending and please, don’t try to please everyone.<br />
<br />
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="http://1.bp.blogspot.com/-3GYlMAsoLRc/Ug4nPiLSXaI/AAAAAAAAAqI/I71nW431VmA/s1600/chimamanda-adichie.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" src="http://1.bp.blogspot.com/-3GYlMAsoLRc/Ug4nPiLSXaI/AAAAAAAAAqI/I71nW431VmA/s200/chimamanda-adichie.jpg" height="200" width="193" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Chimamanda Ngozi Adichie [Picture from<a href="http://farafinabooks.wordpress.com/" target="_blank"> Farafinabooks.wordpress.com</a>]</td></tr>
</tbody></table>
<br />
<div>
<br /></div>
mumakeithhttp://www.blogger.com/profile/01830783058553136408noreply@blogger.com5tag:blogger.com,1999:blog-51895632228574929.post-5858124395275961742013-08-10T12:15:00.000+03:002013-08-27T14:26:30.627+03:00Mining speculators "rear their ugly heads" Kenya recently cancelled mining licences due to irregularities in the awarding process. I wrote this piece in December 2012; however, it wasn't published. I've decided to share it.<br />
<br />
<br />
<span style="font-size: x-large;">Y</span>ou may have probably watched the Bank Of Uganda Governor Emmanuel Tumusiime-Mutebile in video clips saying “I have the capacity to burn their fingers.” He was referring to speculators who were betting on the Uganda Shilling making it volatile and making money out of it. However, speculation and currency trading cannot be separated, so maybe Mutebile’s words just remain threats. In yet another government department, The Department of Geological Survey and Mines (DGSM), there are indications they want to crack the whip on speculators holding exploration and mining licences, but doing no work.<br />
<br />
Uganda’s mineral sector is already experiencing letdowns even before it takes off significantly to the level of Tanzania – East Africa’s largest Gold Producer. Such is the case that in 2012, a little known company East Africa Gold Sniffing acquired a limestone exploration licence after the previous holder – Hima Cement a Subsidiary of the Lafarge group – did not apply to renew the licence in the provided time. Even if someone at Hima Cement was incompetent enough not to notice that the 21 year old license was expiring, analysts note that it could have at least lost out to a reputable and known limestone mining company. Hima Cement which says it contributes about Ushs45bn in revenues to the government instead lost the license to East Africa Gold Sniffing a company, with little – if not no experience in mining at all.<br />
<br />
East Africa Gold Sniffing is categorized as one such speculator that exploited the loopholes within the legal framework to acquire a license. To begin with, records from the DGSM (July 2012) indicate that there are 582 licence holders around the country, of those 5 are for Kilembe Mines, 4 to Hima Cement, 6 to Steel Rolling Mills and 6 to Tororo Cement. The rest, are held by individuals and various companies – both genuine and obscure. For instance, there a host of about seven companies, which in total hold about 26 licenses of which the contact person for all the companies is one Pravin Ghelani. The companies registered are registered as Fergie Minerals and Metals Mining Company, Esimo Industries Uganda Limited, Esta Industries, Nelvo International, Hard Rock Engineering and Doher Industries Limited. Notably though, none of these companies have filled returns for their mining activities.<br />
<br />
When Ghelani was contacted by The CEO Magazine, he declined to comment.<br />
<br />
There are other companies holding licenses, that have not submitted any returns. Notably, some of them are represented by one Law Firm which has a link to East Africa Gold Sniffing. Kusaasira Dennis is an oil, gas and minerals attorney with Kusaasira and Co. Advocates and Consultants – a law firm mainly handling oil, gas and mining ventures. His law firm represents five companies, of which there is one active one. The companies held a total of 61 licenses and by June 2012, none had submitted returns, an indication of speculative tendencies.<br />
<br />
According to Edwards Katto the assistant commissioner at DGSM, the country is losing out on much needed revenues because some license holders are holding back, “waiting for the highest bidder.” Uganda accrued fiscal revenues of $14.6m in 2011 from the mining sector. However Katto notes that the country could have earned more if other licence holders were in production. The bulk of the mining revenues come from Hima Cement, Tororo Cement, and Kasese Cobalt Company.<br />
<br />
Katto further notes that the speculators make Uganda’s mining sector expensive for investment. “If speculator holds a licence, they will lookout for the highest bidder to buy their stake,” he says. “The country here will lose out because either the big companies would rather wait for a new licencing regime, rather than acquire a speculative company at a higher price,” he adds.<br />
<br />
<b>Why speculate?</b><br />
The legal framework currently allows anyone who has the money to hold a license, which makes it easy for the speculators to pounce. According to DGSM, a one year prospective license costs about Ushs150,000, acquiring an exploration license will costs about Ushs650,000 with Ushs10,000 paid annually for the three years. A retention license for two year costs about Ushs450,000 and a mining lease – held for 15 years – will cost Ushs2million and annual fees per hectare of Ushs10,000. According Johnny Sassirwe the Chairperson of the National Artisanal and Small-Scale Miners Association, this allows Ugandans based in the mining communities to participate in mining activities and attract international investors.<br />
<br />
“There is an opportunity for local small-scale miners to benefit if the cost of acquiring a licence is low. This encourages local participation. Also, if a big mining company approaches us with a good offer, then we can easily sale,” Sasirwe points out.<br />
<br />
Furthermore, Kusaasira – of Kusaasira and Co. Advocates - uses the section thirty of the Mineral Act of 2003 to emphasize that they are working within the required legal framework.<br />
<br />
<blockquote class="tr_bq">
“ The Mining Act allows farm-downs or total transfer of interests or share in mineral rights, with the consent of the Commissioner, and consent only to be withheld only if the proposed transferee does not quality to acquire the mineral right in question,” Kusaasira adds.</blockquote>
<br />
The current licencing regime has been “first come, first served,” is easy to maneuver if you have prior information on the status of particular mining area. Once an individual has this information, they can apply for a licence and get it if they are first ones to do so. The Hima Cement and East Africa Gold Sniffing case is yet to be resolved as the latter has dragged the government to court for “suspending” the licence. The challenge is, the government may be required to compensate – heavily – if the licence is to be cancelled because the policy was clear, “first come, first served.” The Brandenburg Energy Group – a Canadian Mining Company – had written a Letter Of Intent (LOI) to East Africa Gold Sniffing to acquire 100% stake in the company. Brandenburg expressed interest after East Africa Gold Sniffing had just been given the limestone exploration licence.<br />
<br />
“EA Gold has appealed the decision of the Minister, and EA Gold has stated that it is confident that the Exploration License will revert to EA Gold; in which case, EA Gold will be in position to complete the transaction with Brandenburg,” reads a statement from the Brandenburg Group.<br />
<br />
Kusaasira does point out that the end result is for licence holder is to make money and that if prices of the minerals on the global market are too low, then “why produce?”<br />
For instance, Gulf Resources which holds the lucrative Vermiculite mining rights in Manafwa district had to suspend mining operations earlier this year becomes of declining global prices. Gulf Resources was producing about 22,000tonnes vermiculite per annum but was forced to scale back to 18,000tonns by Dupre Minerals Limited, a UK based company which was purchasing 100% of the produce. According to the company website, this was a result of the economic woes in Europe.<br />
<br />
<blockquote class="tr_bq">
“Gulf Industrials Limited (ASX: GLF) wishes to advise that on an interim basis it has stopped production at its Namekara Vermiculite Project in Uganda until stock levels are reduced to a manageable level. Dupré Minerals Limited (“Dupré”), a leading UK based vermiculite distributor and the exclusive distributor of the production at Namekara Vermiculite Project continues to purchase the company’s vermiculite at reduced levels until the vermiculite markets pick up,” reads a statement from Gulf Industrial Limited.</blockquote>
<br />
On the other hand, the mining act doesn’t make it clear when it comes to the offences and mentions that anyone who submits false returns will be fined one hundred and fifty currency points – Ushs3million (Each currency point is Ushs20,000). However, the law makes it clear that a location license can be revoked by the commissioner if “within a period of six months from the date the licence was granted or renewed no mining operations have commenced under the licence.”<br />
<br />
The location lease is one that is meant for small-scale miners who can spend a maximum of Ushs10m. The same licence differs from the mining licence in that it is meant for minerals that do not require specialized technology. Notably, the same revocation restrictions do not apply to the mining licence.<br />
On this point DGSMs’ Katto agrees that there is a loophole but is quick to say that they begun issuing notices to non-complaint, inactive mining companies with licences.<br />
<br />
“We are currently blacklisting these companies and serving them with a letter of notice.” However, there is a far greater challenge for DGSM – funding. “With limited funding,” Katto notes, “supervising and monitoring licence holders will remain a challenge.”<br />
<br />
<b>Licencing suspended</b><br />
The Uganda government in early November placed a moratorium on issuing new licences as reported in The East African newspaper. The moratorium is partly a move to deal with speculators as the department moves into competitive bidding for the mining licences – a move they say would attract genuine mining companies into the business.<br />
<br />
This however does not guarantee production also. For instance when Rio Tinto – a global mining and minerals company - held a mining licence for vermiculite in Manafwa between 2006 and 2009, but the only work documented was drilling of 64 wells for resource recognition, setting up of transportation infrastructure and market research. Sources within DGSM confirmed that no actual vermiculite was extracted for purposes of selling during the period Rio Tinto was holding the licence. This meant that the mining company held onto the licence until they sold their interests to Gulf Resources a subsidiary of Gulf Industrial – a listed company on the Australian Stock Exchange (ASX).<br />
<br />
<blockquote class="tr_bq">
“Competitive bidding alone is not the solution if speculators are to be reduced in number. Remember, you cannot have a market without speculators because some will still beat the system. Broader reforms like increasing the minimum investment amount and punishments for deliberate failure to carryout mining activities are needed,” says Martin Drito, an MP for Madi-Okollo in Arua. </blockquote>
He has wealth of experience in the minerals sector and an advisor to the president of Guinea on mineral policy between 1998 and 2004.<br />
<div>
<br /></div>
mumakeithhttp://www.blogger.com/profile/01830783058553136408noreply@blogger.com0tag:blogger.com,1999:blog-51895632228574929.post-58608235670140793242013-07-22T12:58:00.000+03:002013-07-22T12:58:58.502+03:00A tear shed for Uganda's business journalism <div class="MsoNormal">
<blockquote class="tr_bq">
<span style="font-family: Verdana, sans-serif; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">“Africans are one of the most resilient, innovative and creative business people in the world. To navigate poor and decaying road networks, maddeningly corrupt and inefficient bureaucrats, government regulations that frustrate and hinder business operations, a lack of reliable electricity or water, all demand ingenuity, agility and determination. I doubt western entrepreneurs operating in such an environment could last long.” Andrew Rugasira </span></blockquote>
<br />
<span style="font-family: Verdana, sans-serif; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">A few months back, <a href="http://www.acme-ug.org/news/item/431-africa%E2%80%99s-business-reporting-style" target="_blank">“the seer”penned a damning</a> indictment on the state of business journalism in Africa –
partly excluding South Africa. As a journalist, I responded to him on
twitter – 140 characters are not the best response to a 1000 word piece. I said
“maybe you are reading the wrong business publications.” In Uganda,
we have two business publications that have survived the "4 year litmus test". I have worked
for both: The East African Business Week [2009-2012] and The CEO Magazine [2011
– to-date]. In his writing, Kalyegira notes that:</span></div>
<blockquote class="tr_bq">
<span style="font-family: Verdana, sans-serif; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">“Nobody saw this coming. Our
amateurish business reporting means that the reading public can never get an
accurate picture of business conditions in Uganda. The Ugandan news media is
fragile for the most part. There are too many broadcast stations and print
publications chasing too few advertisers and so almost no media house dare
report the facts about Uganda’s corporations, lest they are denied adverts.”</span></blockquote>
<div class="MsoNormal">
<span style="font-family: Verdana, sans-serif;">This is a correct assessment of
the state of business journalism in Uganda, but it is only part of the problem.
It is not new for companies to shove press releases in the face of journalists,
and well, we just add a few sentences before handing it to our editors. Of
course for some of these companies, they want to get their “monies worth” by
being in the press since they are the advertisers. But, does this mean the
Ugandan business reporter can’t go beyond the mumble jumble in a press release?
Yes they can, but who will talk to them and give them the details? People talk
of government bureaucracy, but some these corporations are just as worse. Worse
still, for any inquiry, it takes a company so much more time to respond – if at
all – but takes a short time for them to give you press release [For immediate
release]. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: Verdana, sans-serif; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Verdana, sans-serif; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">Working for East African Business
Week and CEO Magazine, there is a trend I’ve noticed over the years. These two
are small publications are not considered that "important" compared to New Vision,
Observer, and The Daily Monitor. Being small – but dedicated to business
reporting – they are ignored by the corporate companies when it comes to
responding to queries by journalists. The top three get priority –
understandable – but yet a dedicated business publication gets treated as a
third class citizen. Interestingly, it is the smaller publications that get the
“vomit copy” of all sorts of press releases that MUST be published. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: Verdana, sans-serif; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Verdana, sans-serif;">These two so called small publications do take time to write business stories and go beyond product launches, however, they are very much limited on how far they can go. </span></div>
<div class="MsoNormal">
<span style="font-family: Verdana, sans-serif; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Verdana, sans-serif; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">Obviously, for the likes of New
Vision and Daily Monitor, the business reporters have much less flexibility on
what they can write. They are limited to two pages of business news and in most
cases the analysis bit is lacking. In fact Kalyegira writes; </span></div>
<blockquote class="tr_bq">
<span style="font-family: Verdana, sans-serif; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">“Most African
business reports focus on public relations: Launches of new brands, re-launches
of old brands and products, opening of complexes, showrooms, plants and
competitions and promotions.”</span></blockquote>
<div class="MsoNormal">
<span style="font-family: Verdana, sans-serif; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">These small publications need
money and in Uganda – it seems – any "perceived" negative reporting about a corporate
company, you are banished from their advertising list. Then what happens to the
reporters? Where does the money come from? To further compound the problems,
Ugandans would rather read online newspapers then buy a copy off the shelf,
even if they are to wait for a story to be uploaded at 5pm.</span><br />
<span style="font-family: Verdana, sans-serif; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;"><br /></span>
<span style="font-family: Verdana, sans-serif; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">I’ve been here, I’ve
seen what people buy, and it has nothing to do with business publications - save for a few. They
are simply not interested. At the CEO Magazine, we do business analysis and
business reporting, but people would rather buy gossip. At times I ask myself “do
people really read my stories?” At times when I get comment, I'm so delighted.
In one forum, a Ugandan commented that my writing was “fantastic fiction” that
was “clouded with financial jargon.” In as much as I disagreed – partly - with
his assessment of my writing, I felt proud because I was being noticed. But that's it!!! We toil for information. Data is hard to find. We are called all sorts of names. Told off by company executives and also denied access. <o:p></o:p></span><br />
<span style="font-family: Verdana, sans-serif; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;"><br /></span>
<span style="font-family: Verdana, sans-serif; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">It is also common for companies to have the theory "he knows nothing about us" or "he knows about what he is writing." In fact they'd rather organize a media briefing that has a high number of reporters, than one where they have a few quality business reporters.</span></div>
<div class="MsoNormal">
<span style="font-family: Verdana, sans-serif; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Verdana, sans-serif; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">There are also constant reminders
from media owners to reporters that they have to do more to attract
advertisers. Well, unless you are owned by a large media company, which can
afford to make a loss on one of its publications, then perhaps one has to
forget the "hard hitting work" that we parade as business reporters. Additionally,
business reporters in this country have lesser opportunities to go and learn
more on how to report better. People who report about Human Rights, Conflict,
Health and Education among others, can easily get the “value addition” through
fellowships and scholarships, whereas for the business reporter; you-are-on-your-own.
No one is willing to invest in you, but you must invest in yourself – by spending
the little you get to earn. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: Verdana, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;"><span style="font-family: Verdana, sans-serif;">Many will say; “you hobnob with
Uganda’s CEO’s. Why would it be hard for you to get opportunities?” Well, they
are simply not interested. If they are, they’d rather take a reporter for a
trip to their company, than improve the state of business journalism. Admittedly,
I must say, business journalism is as good as dead – locally – at least that’s my
impression and observation. It can only be revived by quality reporting, which
can only be done by being part of large media organization. It is also not
entirely surprising that one can easily jump ship, leave business journalism
and join the corporate world. The realities of reporting have changed, passion
is dying – slowly – and well, light at the end of the tunnel seems elusive – at
least locally.</span><o:p></o:p></span></div>
mumakeithhttp://www.blogger.com/profile/01830783058553136408noreply@blogger.com2tag:blogger.com,1999:blog-51895632228574929.post-54540917966341590922013-07-08T17:44:00.002+03:002013-07-09T08:04:38.191+03:00In the Press: Monitor, when a story deserves more than just a massage <blockquote class="tr_bq">
<div style="text-align: center;">
<span style="font-family: 'Trebuchet MS', sans-serif;">He has a right to criticize, who has a heart to help.</span></div>
<span style="font-family: Trebuchet MS, sans-serif;"></span><br />
<div style="text-align: center;">
<span style="font-family: Trebuchet MS, sans-serif;">Abraham Lincoln </span></div>
<span style="font-family: Trebuchet MS, sans-serif;">
</span></blockquote>
<span style="font-family: Trebuchet MS, sans-serif;"></span><br />
<div>
<br /></div>
<span style="font-family: 'Trebuchet MS', sans-serif;">The Auditor General’s report makes for good reading, as always considering it punches holes in government business.</span><br />
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span>
<span style="font-family: Trebuchet MS, sans-serif;">The story on Page 4 of today's Daily Monitor is damning on a company called Phenix Logistics, one of the exporters and producers of garments in Uganda – local content – of which the government owns 94 percent.</span><br />
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span>
<span style="font-family: Trebuchet MS, sans-serif;">The story, in the headline, reads <a href="http://www.monitor.co.ug/News/National/Money-spent-on-Phenix-a-waste-of-state-resources--AG-tells-govt/-/688334/1908180/-/1b2oeh/-/index.html" target="_blank">"Money spent on Phenix a waste of state resources, AG tells govt." </a><span id="goog_1660344677"></span><span id="goog_1660344678"></span><a href="https://www.blogger.com/"></a></span><br />
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span>
<span style="font-family: Trebuchet MS, sans-serif;">Quote from the AG’s report: “The government has continued to inject funds in a loss making company, with the latest being the guarantee of a loan from JBIC amounting to Shs4.2billion….” So does the AG here say the government is wasting money? The problem is that Phenix Logistics is loss making.</span><br />
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span>
<span style="font-family: Trebuchet MS, sans-serif;">The Daily Monitor goes on and reads “…which also wonders [The AG’s report wonders?] why govt keeps increasing its shareholding in the firm yet it has never received any dividend..” But it is already loss making. How do you receive a dividend if you’re loss making?</span><br />
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span>
<span style="font-family: Trebuchet MS, sans-serif;">“However, in the same year [2000], the firm borrowed Shs4.2billion from Uganda Development Bank, which it later failed to pay.” So Ugandans would want to know why Phenix Logistics borrowed this money. What was it for?</span><br />
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span>
<span style="font-family: Trebuchet MS, sans-serif;">Interestingly, the Monitor story further explains that each time Phenix failed to pay a debt, it was converted into equity – not exactly a bad thing though – from 0 to 49percent then to 79percent and more recently to 94percent.</span><br />
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span>
<span style="font-family: Trebuchet MS, sans-serif;">So what did all the money borrowed do? What is the production capacity? What are the challenges – if any – or inefficiencies going on at Phenix? How cheap are their products on the local market compared to the imported garments? How much has the plant benefited from AGOA? How many people does it employ? What is the export value of the products? Has it paid taxes? Is production subsidized? The private sector failed to make it profitable, the government is failing. </span><span style="font-family: 'Trebuchet MS', sans-serif;">What exactly is the problem at Phenix Logistics? We have several private sector businesses that are not yet profitable – Orange, Airtel, Warid, UTL – but still their owners keep pumping money into them, in order to prop up performance, and maybe they’ll be profitable – or not. Such is the nature of business.</span><br />
<div>
<br /></div>
mumakeithhttp://www.blogger.com/profile/01830783058553136408noreply@blogger.com0tag:blogger.com,1999:blog-51895632228574929.post-33004792072449974052013-06-30T11:52:00.001+03:002013-06-30T12:00:18.889+03:00Ugandan media serves Easter Eggs on Christmas<blockquote class="tr_bq">
<span style="font-family: Trebuchet MS, sans-serif;"><i>Just because your voice reaches halfway around the world doesn't mean you are wiser than when it reached only to the end of the bar. Edward R. Murrow</i></span></blockquote>
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span>
<span style="font-family: 'Trebuchet MS', sans-serif;">Charred bodies, some unidentifiable, of 29 people, including children - and still counting - made it to the cold room [mortuary] in Mulago. This, after a </span><a href="http://news.ugo.co.ug/2013/06/two-fuel-tankers-and-a-noah-burn-on-the-northern-pass-by/" style="font-family: 'Trebuchet MS', sans-serif;">horrific accident</a><span style="font-family: 'Trebuchet MS', sans-serif;"> last evening, at the Numungoona Roundabout, about 7kms from the Kampala City Center. At about 10pm [EAT] last evening, Ugandan television channels were playing music of all kinds, presenters were hosting some pseudo pretentious musicians and others; classic boxing. On social media, the National Broadcaster - UBC - was updating "tweeps" with what has happening in Namungoona, but when you flipped to the TV station, music, music and music. </span><br />
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span>
<span style="font-family: Trebuchet MS, sans-serif;">The TV stations were in oblivion and detached from one of their roles - to inform. The excuse, often, is that there are limited resources to cover such stories where they have to rush to the scene - even UBC will complain yet it is taxpayer funded. However, for a TV station not to even have a breaking news ticker, it is rather baffling since that doesn't require resources. Most of our media organisations - NTV, The Daily Monitor, Vision Group and WBS - have journalists who have highly placed sources in The Uganda Police, Uganda Red Cross, Hospitals and Government, so was it very hard for at least a call to be made to confirm the story and get a breaking news ticker rolling. Furthermore, for a journalist, ones job is to go after a story, not so? This was after-all a big story for the reporter and media house.</span><br />
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span>
<span style="font-family: Trebuchet MS, sans-serif;">There were some reporters -Uganda Radio Network, Simba, Akaboozi and CBS - on the scene, and also social media enthusiasts. Even so, a channel like NTV could have just made a call to have a reporter on air - from Uganda Radio Network - update the country on what was going on. We slept. I wept. </span><br />
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span>
<span style="font-family: Trebuchet MS, sans-serif;">Last month, a great, young and passionate journalist Michael Hastings died, in a perfect send off, his editor <a href="http://www.buzzfeed.com/bensmith/missing-michael-hastings?src=longreads">wrote</a>; </span><br />
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span>
<br />
<blockquote class="tr_bq">
<span style="font-family: Trebuchet MS, sans-serif;">"Great journalists take themselves and their work seriously because it is serious; they know the power they wield."</span></blockquote>
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span>
<span style="font-family: Trebuchet MS, sans-serif;">The big story here is the fuel tanker exploding and people dying - not common. But for the media, if you are not on-sight to take pictures of how the authorities have reacted - at that time - what story do you plan on telling? Only "she said, he said." Surely we can do better than this. As the media, we wield power. If the authorities know that the media is going to be breaking the news story as it happens, they'll probably be more competent in handling some of these accidents. This is because they know they are being watched by Ugandans. The police instead of issuing a presser 12 hours later, will perhaps be on-sight to update journalists regularly.</span><br />
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span>
<span style="font-family: Trebuchet MS, sans-serif;">Surely, why do we have to wait to put poll questions; "What do you think should be done to control accidents in Uganda." Journalism is about passion: You've got to love it. Before Hastings passed on, he'd offered <a href="http://www.motherjones.com/mojo/2013/06/rip-journalist-michael-hastings-heres-his-advice-young-journalists">advice</a> to journalists. </span><br />
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span>
<br />
<blockquote class="tr_bq">
<span style="font-family: Trebuchet MS, sans-serif;">"Mainly you really have to love writing and reporting. Like it's more important to you than anything else in your life--family, friends, social life, whatever." </span></blockquote>
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span>
<span style="font-family: Trebuchet MS, sans-serif;">Such a journalist, will give the media owner food for thought [Why don't we air this story? He is at the scene. It could be a scoop]. There's is no way we can keep demanding for media freedom, yet we've failed to utilize even the limited freedom we appear to have. When reporting from then scene, you get the feel the of story, access people's reactions and get your five senses tickled. There is no better way of story telling than vivid descriptions, you'll probably win an award as a result. This also involves the viewers actively, leading them ask the questions -if any - they'd want their government to answer. </span><br />
<br />
<span style="font-family: Trebuchet MS, sans-serif;">Some will say this is idealism of the highest order. How do I gain from all this? Why should I be up all night to cover such a story? Who cares? What about my sleep? Henrik Ibsen's 1882 play, An Enemy of the People, the protagonist, Dr Thomas Stockmann wants to do right and tell the truth, but everyone else around him thinks this is not a good idea. But he won't back-off, no matter what: </span><br />
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span>
<br />
<blockquote class="tr_bq">
<span style="font-family: Trebuchet MS, sans-serif;">"The strongest man in the world is he who stands most alone." </span></blockquote>
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span>
<span style="font-family: Trebuchet MS, sans-serif;">So as journalist, your obligation is to tell the truth or to state the facts and explore them in full but by not waiting for the storm to calm - after homes have been destroyed - and then you instead rush to ask what the government is doing to help. Sorry, you missed out on the big story: The people affected, what was the early warning system like, who died, what were they doing, how were the responses by the authorities...</span><br />
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span>
<br />
<blockquote class="tr_bq">
<span style="font-family: Trebuchet MS, sans-serif;">"...What am I trying to say? Saying that you will not do anything because you cannot solve everything is a lame and, frankly, very poor excuse. Do your part and then you will have the authority to ask of others what they are doing to make this country better," </span><span style="font-family: Trebuchet MS, sans-serif;">David FK Mpanga a lawyer and a regular Saturday Monitor Columnist who wrote in a piece once titled "<a href="http://www.monitor.co.ug/OpEd/Commentary/What-are-you-doing-to-make-Uganda-a-better-country-/-/689364/1890666/-/e14uwk/-/index.html">What are you doing to make a Uganda better country?" </a></span></blockquote>
<span style="font-family: Trebuchet MS, sans-serif;">For the media owners, perhaps having night duty reporters who can take on stories that happen effective 20:00 hours till 05:00 hours is a good idea? Who will tell the story of what is happening at the scene before we move on to "The police said the drivers were under the influence" and "What is with Ugandans and siphoning fuel?" </span><br />
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span>
<span style="font-family: Trebuchet MS, sans-serif;">In late May when anti-government protests started out in Turkey, the local media was criticized for having shows about penguins instead of what was going on in their backyard. The protesters got angry and torched some of the broadcast vans of the local stations because they felt they'd been ignored. For Ugandans, it may not get to this level, but surely one can understand if they throw the rotten Easter Eggs the media served them on Christmas Day. </span><br />
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span>
<span style="font-family: Trebuchet MS, sans-serif;">Note: We[media] feed Ugandans on so much junk, by they time we get to know it, they'll be obese - on emptiness. </span><br />
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span>
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span>
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span>mumakeithhttp://www.blogger.com/profile/01830783058553136408noreply@blogger.com2tag:blogger.com,1999:blog-51895632228574929.post-13310068635281652902013-06-26T10:31:00.000+03:002013-06-26T11:24:50.900+03:00Traders strike is not about PVoC<span style="font-family: Trebuchet MS, sans-serif;">It is only on a few occasions that business/economic stories make it to the front pages of Uganda's national newspapers, unless it is scandal, the budget, electricity tariffs, oil and a strike by traders, et al. It is exciting - for me - when I get to see the largely ignored business stories making it to the front pages. So this week Ugandan traders <a href="https://www.google.co.ug/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&ved=0CCcQFjAA&url=http%3A%2F%2Fwww.newvision.co.ug%2Fnews%2F644348-pvoc-to-be-implemented-minister-insists.html&ei=UJLKUYT-KM_2sgbZ6oCQAQ&usg=AFQjCNEvdBi3TBTaAO0O5sllnIA-5CSlNg&sig2=BucmGNKt984_sroar7nApg&bvm=bv.48340889,d.Yms">went on strike </a>- <a href="http://www.faces.co.ug/m/news_feed/view/9117471">not for the first time</a> - over the Pre-Export Verification Conformity to Standards Programme (PVoC). </span><br />
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span>
<span style="font-family: Trebuchet MS, sans-serif;">Amelia Kyambadde, Uganda's Trade Minister insists that " it [PVoC] would curb the entry of counterfeit, fake and substandard goods from entering the country." Uganda is no exception such goods making it past our secure but porous borders. Often, we've [journalists] written scathing headlines questioning what the Uganda National Bureau Of Standards (UNBS) is doing to deal with the influx. Well, the PVoC is part of the solution. Not so? </span><br />
<span style="font-family: 'Trebuchet MS', sans-serif;">Interestingly, the Kampala City Traders Association (KACITA) does agree, </span><br />
<span style="font-family: 'Trebuchet MS', sans-serif;"><br /></span>
<br />
<blockquote class="tr_bq">
<span style="font-family: 'Trebuchet MS', sans-serif;">"We are consumers too, stocking adulterated and substandard goods amounts to us losing market for our goods, so in principle we are concerned.." [Ephraim Kaddu, KACITA's Secretary General in Today's New Vision]. </span></blockquote>
<span style="font-family: 'Trebuchet MS', sans-serif;"><br /></span>
<span style="font-family: 'Trebuchet MS', sans-serif;">There is a but though, </span><br />
<span style="font-family: 'Trebuchet MS', sans-serif;"><br /></span>
<br />
<blockquote class="tr_bq">
<span style="font-family: 'Trebuchet MS', sans-serif;">"....However, the cost of PVoC very high and that affects the cost of doing business." </span></blockquote>
<span style="font-family: 'Trebuchet MS', sans-serif;"><br /></span>
<span style="font-family: 'Trebuchet MS', sans-serif;">Understandable, right? </span><br />
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span>
<span style="font-family: Trebuchet MS, sans-serif;">But before that, let me first complain about how Daily Monitor reported this story - sadly by quoting a police press statement that "drummed up support for PVoC." </span><span style="font-family: 'Trebuchet MS', sans-serif;"> </span><span style="font-family: 'Trebuchet MS', sans-serif;">Surely, why quote the police, yet their job is just keep law and order? How relevant are they in this story apart from sitting on the highly over-priced, run-down pick-up trucks, waiting for chaos erupt? Meanwhile, an anchor on NTV Uganda called it "PVoC tax," twice. </span><span style="font-family: Trebuchet MS, sans-serif;">C</span><span style="font-family: 'Trebuchet MS', sans-serif;">overage in the dailies was pretty much the usual "she said, he said" - not exactly a bad thing - but perhaps, consumers were the missing link in all the stories.</span><br />
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span>
<span style="font-family: Trebuchet MS, sans-serif;">Now, back to PVoC. The complaint by KACITA is about the charges - on inspection - that range from $235 to $2,375, fees they claim are too high and are advocating for flat rate. Explaining why - for the second day - their shops are under lock and key. The government is however not backing down, considering they've already procured services of three firms to carryout the inspection. </span><br />
<span style="font-family: 'Trebuchet MS', sans-serif;"><br /></span>
<br />
<blockquote class="tr_bq">
<span style="font-family: 'Trebuchet MS', sans-serif;">"We are saying, let the goods conform to national standards. If you buy products of higher quality you cannot pay the same inspection fees as for other products [guess he meant lower quality goods] so it is your choice..." Ben Manyindo the UNBS ED told the New Vision newspaper. [Wednesday, June 26th, 2013]. </span></blockquote>
<span style="font-family: 'Trebuchet MS', sans-serif;"><br /></span>
<span style="font-family: Trebuchet MS, sans-serif;">The traders, sometimes hold this country <strike>by its balls </strike>at ransom, even when it is rather obvious that they are protecting their own interests. Traders - importers - are responsible for a huge influx of low quality goods that flood - a phrase liked by us [Journalists] - this country. Of course sometimes UNBS sleeps on the job due to - apparently - manpower issues. It is consumers usually pay the price when purchasing these fake, counterfeit and substandard goods. Consumers are also paying the price for using these "dumped" goods. </span><br />
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span>
<span style="font-family: Trebuchet MS, sans-serif;">If KACITA claims that the cost is too high, then why not pass it on to the consumer who wants the quality product and is willing to pay for it? As explained, if the quality of a product is low, the higher the cost of inspection. So then why not import high quality goods that are up-to the UNBS standards? It is unusual that traders are fighting the implementation of PVoC, unless of course they have something to hide. So dear traders, you have never hesitated to increase prices for obscure reasons, now here is a genuine reason, PVoC charges. </span><br />
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span>
<span style="font-family: Trebuchet MS, sans-serif;">Well, if what they want is a meeting with the President, they'll probably get it but like the previous strike against high interest rates, it may yield no tangible result for them - apart from tea and biscuits at State House. However, I will also not be surprised if a political decision [BOLD] is taken to reverse the implementation of PVoC. </span><br />
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span>
<span style="font-family: Trebuchet MS, sans-serif;">Some Ugandan companies have missed out on being suppliers [local content] to oil companies - Total E&P, Tullow, CNOOC - because they do not conform to national standards in general and international standards in particular. So these traders should stop serving Ugandan's with hot air as they strike. </span><br />
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span>
<span style="font-family: Trebuchet MS, sans-serif;">Uganda needs to stop being a dumping ground, but, it comes at price - PVoC</span><br />
<br />
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span>
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span>
<span style="font-family: 'Trebuchet MS', sans-serif;"><br /></span>
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span>
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span>
mumakeithhttp://www.blogger.com/profile/01830783058553136408noreply@blogger.com1Kampala, Uganda0.3136111 32.5811111000000440.059557099999999974 32.258387600000042 0.56766509999999992 32.903834600000046tag:blogger.com,1999:blog-51895632228574929.post-68101989004494666542011-12-12T21:01:00.000+03:002011-12-12T21:02:46.056+03:00Make-over in the making<span class="Apple-style-span" style="font-family: Verdana, sans-serif;">Top notch CEO's and brand strategists sit in the boardrooms of their companies thinking of new products that will most likely or not at the creat a shift in the market. In similar but not the same move, THE ANAGRAM with its one man board has made a strategic decision to move to a new location. </span><br />
<span class="Apple-style-span" style="font-family: Verdana, sans-serif;"><br /></span><br />
<div class="separator" style="clear: both; text-align: center;">
<a href="http://1.bp.blogspot.com/-ReWEMtx2No0/TuZAsy7MuhI/AAAAAAAAAP8/um34ca-dHOM/s1600/mumakeith.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="192" src="http://1.bp.blogspot.com/-ReWEMtx2No0/TuZAsy7MuhI/AAAAAAAAAP8/um34ca-dHOM/s320/mumakeith.JPG" width="320" /></a></div>
<span class="Apple-style-span" style="font-family: Verdana, sans-serif;"><br /></span><br />
<span class="Apple-style-span" style="font-family: Verdana, sans-serif;"><br /></span><br />
<span class="Apple-style-span" style="font-family: Verdana, sans-serif;">The reason for this strategic move was probably highlighted in this <a href="http://mumakeith.blogspot.com/search?q=moving">post</a>. This will most likely be the last post with the next post at the new <a href="http://mumakeith.com/">home</a>. The board of The Anagram is grateful for all the support offered by readers and for all the comments. They are grateful to <a href="http://www.blogger.com/">Blogge</a>r for the service rendered over the years. </span><br />
<span class="Apple-style-span" style="font-family: Verdana, sans-serif;">Content on <a href="http://www.mumakeith.com%20/">www.mumakeith.com </a> will be uploaded in the next few days. </span><br />
<span class="Apple-style-span" style="font-family: Verdana, sans-serif;">>>>>>>>>>>>>>>>>>>>>>>></span><br />
<span class="Apple-style-span" style="font-family: Verdana, sans-serif;"><br /></span>mumakeithhttp://www.blogger.com/profile/01830783058553136408noreply@blogger.com0