Posts tagged as: investment

South Africa:Minister Mildred Oliphant Urges Construction Companies to Comply With Labour Laws

press release

Labour Minister Mildred Oliphant used her visit to the Royal Bafokeng Housing project to urge construction companies to abide by all labour laws or risk stern action from the Department.

She was speaking on Thursday following her visit to witness the R2.2 billion Unemployment Insurance Fund (UIF) Investment project by the Public Investment Corporation (PIC).

The project resulted in the construction of 400 units on prime land in Rustenburg. She said she was extremely concerned by reports that some companies were flouting construction regulations.

“If construction companies do not comply we will have no choice but to issue prohibition notices to stop them from continuing with their work. We will not compromise workers’ safety and lives, ” she said.

The Minister said she is awaiting a full report about the state of the compliance with all labour laws by construction companies operating in the project.

The Minister was accompanied by her deputy, Inkosi Phathekile Holomisa, members of PIC, the UIF board, officials from the Department, National Union of Mineworkers (NUM), as well as Royal Bafokeng Housing Project Management.

She said she was happy with the partnership that has resulted in workers’ dignity being restored through the housing project.

Issued by: Department of Labour

South Africa

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Nigeria:Our Commitment to Affordable Renewable Energy Unshaking – Fashola

By Abah Adah

Abuja — The Hon. Minister of Power, Works and Housing, Babatunde Fashola, has reiterated the federal government’s commitment to pursuing renewable and low carbon energy at low cost to a logical conclusion in the near future.

Fashola reaffirmed this yesterday in his keynote address presented at the energy focused “Africa Today Summit” held in Abuja with the topic: “The Outlook for Nigeria – Energy options in a Low-cost and Low Carbon World: Which Way Nigeria and Africa.”

According to the Minister, the commitment stands firm on the tripod of necessity, contract, and policy.

“Let me be clear and unequivocal by saying upfront that our commitment as a Nation and Government to pursue renewable and low carbon energy at low cost is clear, firm and unshaking. But this is not all. It is a commitment driven by necessity, contract and policy,” the Minister said.

Explaining the concept of necessity, Fashola said as a nation whose energy source has been 85% gas fired and 15% hydro, Nigeria has always experienced shortage when there is any issue upstream of the oil and gas industry, thus necessitating the need to diversify the energy source as evident in the energy mix programme of the federal government.

“This made us very vulnerable as a nation whenever there was a gas shortage or failure for any reason including wilful damage to Gas pipelines and assets.

“This much was evident in 2016 when we had no less than 20 attacks on our Gas pipelines.

“Our response of course has been to diversify our energy sources and optimize other assets for power production by producing an Energy Mix that targets a 30% component of renewable energy out of the Gross energy we produce by 2030.

“We have also matched our intent with actions such as signing 14 solar Power Purchase Agreement (PPAs) with 14 Developers with the potential to deliver over 1,000 MW of solar power, the Minister said.

On the contract, Fashola noted that Nigeria is one of the early signatories to the Paris Climate Change Agreement, which signatories were committed to low carbon energy sources as a contribution to helping the global community protect our climate.

He equally noted that the commitment is driven by policy embedded in the Economic Recovery and Growth Plan (ERGP), where one of the 5 pillars is Energy sufficiency in power and petroleum products.

The Minister said that even as attention is on growing the grid, off-grid power is also being encouraged.

“While we have expanded the National Grid capacity for on- grid power from 5,000 MW in 2015 to 6,900 MW in September 2017, we are mindful that quick access to power will be easier to achieve by off-grid connections.

“Therefore, through the Nigerian Electricity Regulatory Commission (NERC) we have issued mini grid Regulations to guide registration and licencing for small consumers and off-grid developers seeking to produce up to 100 kilowatts and over 100 kilowatts and up to 1 megawatts respectively,” he said.

According to him, the national policy for pioneer status has been revised by the Ministry of Industry Trade and Investment and approved by the Federal Executive Council to include solar panels, solar Home Systems, light emitting diodes, batteries other components that support solar systems which can be manufactured in Nigeria.

Ruling Party’s Chombo Meets Ugandan Team

By Innocent Ruwende

Zanu-PF secretary for Administration Dr Ignatius Chombo and other senior party officials yesterday met a visiting delegation of Ugandan political parties, which is in Zimbabwe for inter-party exchanges. The delegation, which comprises Ugandan political parties represented in the Inter-Party Organisation for Dialogue led by the chairperson and National Resistance Movement deputy secretary-general Richard Todwong, will meet all the country’s major political parties.

Dr Chombo briefed the delegation on Zimbabwe’s journey since Independence. He underscored the need for political parties to dialogue in order to prevent tension. “Regarding engagements as political parties, we work well on national issues in Parliament and we are acceptable to dialogue with opposition political parties in forums such as this programme initiated by the Zimbabwe Institute,” he said.

“ZANU- PF interacts with the parties in both our Lower and Upper Houses in Parliament. The three parties collaborated closely in crafting the current national Constitution and continue to do so currently with programmes initiated by the Zimbabwe Electoral Commission as the country goes towards national elections in 2018.” Dr Chombo said local inter-party interactions were informal and operate on the basis of consensus among the three parties. This, he said, was different from the Ugandan Inter Party Organisation, which is a formal and well-established forum for continuous inter-party dialogue.

“We therefore hope to learn from your delegation on how your political parties have managed to establish IPOD and how the forum is funded. For us, the high-level delegation meeting you today is testament to the priority we give to such inter-party exchanges,” he said. Among the high ranking officials who attended the meeting were Minister of State for Harare Provincial Affairs Miriam Chikukwa; Defence Minister Dr Sydney Sekeramayi; Macro-Economic Planning and Investment Promotion Minister Cde Simbarashe Mumbengegwi, and central committee member and former Cabinet minister Mr Munyaradzi Paul Mangwana.

Mr Todwong said his delegation, which comprised of the major political parties in Uganda, was in Zimbabwe learn and compare notes with the country’s political parties. We have learned a lot. We have shared a lot and we visited many party offices. We are grateful for the hosts for the frank and open discussions we have had with the leadership of Zimbabwe and more so the leadership of ZANU-PF and all other political parties that hosted us,” he said.

“We were talking about encouraging party’s to dialogue with one another because we all aspire to lead the people. We all aspire to sell our programmes and our manifesto’s to the people during campaigns.”


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Mozambique:PM Hopes for "historic Levels" of Cashew Production

Maputo — Mozambican Prime Minister Carlos Agostinho do Rosario declared on Friday that the country will soon be able to harvest 200,000 tonnes of cashew nuts a year, thanks to the level of investment under way in this sector.

Speaking in Meconta district, in the northern province of Nampula, Rosario noted that this would be a “historic level” of cashew production. 200,000 tonnes or more was reached in the colonial period, but not since Mozambican independence in 1975.

Currently Mozambique is producing around 137,000 tonnes of cashew nuts a year. Nampula provides 44 per cent of this total – 60,000 tonnes.

Rosario was speaking to reporters in a field for the intensive production of cashew trees at Nassaruma, as part of the working visit to Nampula that he began on Thursday.

“We are here in a project to promote cashew which is now a reality”, he said. “The productivity of the cashew trees is increasing and our plans are, in the near future, to reach the historic level of 200,000 tonnes of nuts a year”.

The cashew nursery at Nassaruma belongs to the government’s Cashew Promotion Institute (INCAJU). Its key focus is the production of cashew seedlings, and in the 2016/17 campaign it has produced 799,000 grafted seedlings.

Also on Friday, Rosario visited the South African owned company Alfa-Agricultura, which has a land title to exploit 1,080 hectares, 500 of which are now in use. With investment of 8.6 million US dollars, the company is growing cashew trees, fruit trees and vegetables. The company intends to set up a cashew processing plant, and received encouragement from the Prime Minister.

Summarising his visit to Nampula, Rosario told reporters that the main purpose was to attend the Fourth National Religious Conference in Nampula City. “This was an event at which many religious bodies were present, and they converged on the need to cherish peace because without peace there is no development”.

“We also visited economic undertakings, and we were enthused by the commitment of the private sector and of peasant farmers who are responding positively to the presidential initiative on food production”, he declared.


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Zimbabwe:Govt Endorses U.S.$25 Million Mortgages

By Enacy Mapakame

The National Social Security Authority (NSSA) has underwritten $25 million mortgages through its banking unit, the National Building Society (NBS). NSSA regional contributions, collections and compliance manager Agnes Chikwavaire told a bankers conference in Nyanga recently that apart from the various projects the authority has funded so far, there were many other projects in the pipeline targeting low to medium income earners.

“There are many housing projects in the pipeline. We expect to bring at least 1 000 new houses on the market by December 2017,” said Mrs Chikwavaire.

As part of their contribution to the budding small to medium enterprises, Mrs Chikwavaire said the authority was also considering developing an SME park for small businesses to market their products and services. Apart from financial constraints, one of the major challenges affecting the SME sector is infrastructure deficiencies and NSSA’s intentions are to bridge the gap.

This also comes as property firms have of late bemoaned high voids in commercial properties especially in the central business district as established companies downsize operations, close or relocate to cheaper alternatives. As a result, some property firms have resorted to remodelling their businesses to cater for the SME sector.

“Plans for an SME park are being considered,” said Mrs Chikwavaire adding this would also help attract SMEs to operate within the formal confines of business. Investing in assets that resonate with the needs of informal sector workers can be used as one way to attract the informal sector and contribute to the general development of Zimbabwe. Infrastructure development has become part of the investment strategies of institutional investors across the globe and has yielded considerable profits.”

NSSA has done several property development projects among them the Glaudina housing project in Harare, Rusike in Marondera, Gimboki in Mutare, Runyararo West in Masvingo and Lower Rangemore in Bulawayo. This is in addition to office parks in Harare and shopping malls in Chipinge, Bindura, Mutare and Gwanda.


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Angola:Under-Fed People Reduced By Half

Luanda — Angola has managed to reduce by over a half the number of people under-fed, thus meeting the first goal of the Millennium Development Goals (MDGs).

The information was released Monday in Luanda by the national director for Food Security, Ermelinda Caliengue.

The official who was speaking to Angop on the occasion of the World Food Day, 16 October, added that the current situation in the country in terms of food security is satisfactory, given the increase in quality of domestic production of cereals, tubers and meet.

In Angola, the main event marking the date is taking place under the motto “Changing the future of migration. Investing in food security and rural development”, in the municipality of Lovua, northeastern Lunda Norte province.

Ermelinda Caliengue, said that after reaching the MDG target, the Government is working towards achieving sustainable development, by setting concrete goals for the eradication of hunger, malnutrition and poverty in the country.

The World Food Day is celebrated annually on October 16. The date was chosen to recall the creation of the United Nations Food and Agriculture Organisation (FAO) in 1945.


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RSE Eyes New Products As It Grapples With Attracting SMEs to the Market

interviewBy Stephen Nuwagira

The Rwanda Stock Exchange recently formed a partnership with National Institute of Statistics of Rwanda, where the statistics body will be releasing market information periodically.

Business Times’ Stephen Nuwagira caught up with RSE chief executive Pierre-Célestin Rwabukumba to discuss this initiative and other stock market issues. Rwabukumba explains why it is taking long for SMEs and local governments to come to the market to raise development funds, as well as the long-awaited automation of the local bourse.

Tell us more about the collaboration between RSE and the statistics body. How will it benefit you, investors and the general public?

We produce these statistics and market data every day, which data vendors and the general public pick all the time.

The new initiative of linking to the statistics body seeks to enhance and centralise the release of RSE information. That way, investors, researchers or other people, who may need it, access it in a central place. This move will also make the market more visible.

What other initiatives are in the pipeline to ease access to local capital market information and deepen understanding of the market operations and opportunities it offers?

We are doing just general awareness campaigns countrywide as well as in print, broadcast and social and other media platforms to disseminate market information. We’re in the process of introducing more products such as Exchange Traded Funds (ETFs), municipal bonds and Real Estate Investment Trusts (REITs).

All these are good products that are aligned with the country’s development goals. Remember, there are these platforms or opportunities in place, but it is always upon the issuers to seize and exploit them maximally; we cannot force them.

There were efforts to attract SME players to the alternative market segment. What happened to those efforts? Is there any SME preparing to list on alternative market in the near future?

That push is still there, the rules of the game are there, and the players are doing what they are supposed to do, but the SMEs are yet to list. Though there are a few in the pipeline, but we can’t disclose them now.

This particular section takes more time because, remember at the end of the day, even if we approach them, discuss and they listened and start their processes, we must follow all the rules and procedures. No shortcuts because this is public money. So we have to make sure the investing public is fully-protected.

The programme to sensitise local governments about municipal bonds, and help them come to the market to raise development finance has been going on for over two years now. Why has it not yielded any fruits so far?

Well, when you plant a seed you don’t except the crop to be ripe immediately; a lot has to go in before you can harvest. This process involves a lot of different players not just the local government entities and ourselves. Certain prerequisites must be in place for this to kick-off but a lot of work has been done and it is progressing slowly, but with sure steps. The fruits shall be seen in due course. What are the inherent challenges keeping away local governments from the market?

Like I mentioned above, it is an entire process to use these markets. You have certain education that has been going on; and rating that must be done before they can access public markets (in that light). Also, financial management, revenue streams and other structural issues must be all aligned. It is a new concept which must be done properly with no mistakes. Otherwise, you can’t just have products for the sake of it.

There has been planned listing of some big and SME firms since 2015. Why did they shy away?

I don’t like the word ‘shying away’. They are not necessarily shying away. Some of them are afraid of opening up to other people, others are simply not capital market investment-ready but are maybe good for other types of funding and others have other alternatives.

For instance, we have approached some SMEs and started work with them. Then along the way you find that there are several issues that make them not ready for the market, meaning you go back to square one: Handholding because you don’t want to expose the general public to unnecessary risks.

Though it has taken long, we can’t give up because there are some good prospects which are progressing well.

What happened to the planned automation of the local bourse?

The plan is still on and also involves neighbouring countries as the infrastructure will link to the regional exchanges. But you must note that the most important and difficult part of the market is automation of the clearing and settlement process. The rest will have to link this settlement to the trading platform which we have, at least, already tested. The EAC capital markets integration project will enable us to tap into a wider investor pool and wider range of products the region has to offer, as well as help improve our efficiencies.

Central bank figures show that the bond market is outperforming the equity market whose performance in the first half of the year was only supported by sale of government stake in I&M Bank. What is your take on this?

I am not sure which results or measuring instruments you are using but all I know is that yes, the bond market has improved and people are now starting to come on board in better numbers for that market section. However, the equities market section is by far the most used by the general public. When you have more products coming in, such as IPOs, you get more or fresh investors entering the market. Going back to your question: Yes the bonds market has gotten more traction this year in terms of volumes, but also the equities market has recovered in the volumes transacted compared to the same period last year.

What is this year’s performance outlook for RSE, and regional markets?

I see RSE stabilising at the current levels or slightly edging up in indices but activities will be more less higher than last year as we close the year.

Regionally, I think a lot will depend on how the situation evolves in Kenya and the rest of the world events could play some role looking ahead. Remember, we do not live or work in isolation.

Follow @NuwagiraStephen

Turnout Excites Dar Tourism Expo Organizers

Photo: Daily News

Tourists at the Serengeti National Park (file photo)

By Citizen Reporter

Dar es Salaam — The turn-out of exhibitors and tourist agents has thrilled the Tanzania Tourist Board — organisers of the just-ended Swahili International Tourism Expo (SITE 2017) —- energising the board into planning another expo next year.

The Chairman of the TTB Board of Directors, retired Judge Thomas Mihayo, told journalists in Dar es Salaam that the turnout, views of exhibitors and agents who attended the exhibition that ended on Sunday has given TTB the desire of planning another exhibition.

“I am satisfied with the heightened level of this year’s exhibition. Things worked the way we planned. Our many exhibitors presentedwonderful tourist products; some actually sold products while others offered services right here. We wind up this exhibition while simultaneously planning the one to be held next year,” he said.

Some 200 tourist agents met established and new tourist companiesduring the exhibition, brightening Tanzania’s future tourism prospects. The United Nations Conference on Trade and Development (UNCTAND) and the World Bank say “the value of revenues derived from tourism has also increased (over the years).”

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Mr Mihayo said a review meeting will recommend how to address identified weakness before the next expo is held. “We are human organisers. Our new challenges are those things that weren’t perfect.They will be addressed before the next show because we do not want a repeat of black spots.”TTB Managing Director, Ms Devota Mdachi, described the show as having come of age because, she said, many traditional cultural products were on show and that the world must have appreciated that “we are becoming seasoned organisers of this kind of events. Remember we have had three expos since 2014and this one attracted some 200 tourist agents from the world over.”Further, she said, varied tourist entrepreneurs took advantage of the expo to expose their products to the world.The Arusha Urban MP, Mr Godbless Lema, said Tanzania will make greater strides in promoting tourism by reviewing taxes and levies paid by tourists. “We can reduce these taxes and levies paid by tourists and get their money through the food they buy, hotels and tour safaris.”The show drew participants from Nigeria, Morocco, Kenya, Uganda, Rwanda, Mauritius, South Africa, Malawi, Ethiopia, Namibia, Zimbabwe and India and drew tourist agents from India, United Kingdom Ethiopia, Germany, Morocco and United States.More on ThisCall for Govt to Invest More in Promoting Tourism

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NSE Facing Tough Times in Final Quarter of the Year

By James Anyanzwa

Kenya’s stock market faces tough times as the year comes to an end despite putting up a bullish performance over the nine months to September 30.

Analysts told The EastAfrican that share prices of most companies are likely to fall further because of the current political uncertainty, which has seen foreign investors exit the market.

Kenya’s equity market is more than 50 per cent controlled by foreigners, although daily prices are largely determined by local speculators who buy and sell shares for quick returns.

“The outlook is very gloomy, at least for quarter four (October-December). Turnover for instance declined significantly in the early days of this quarter mainly because of the politics. As long as the political environment is uncertain, we don’t see activity improving. Foreigners are expected to continue exiting, prices may decline further. On aggregate, foreigners have been net sellers this year,” said Dominic Ruriga, a research analyst at AIB Capital Ltd.

Nathan Mundara, a research analyst at Kingdom Securities Ltd, said that company earnings are declining while foreign investors have suspended their investment plans in the market.

‘wait and see’ approach

“The extended political uncertainty in the country has seen foreign investors cut trade in their ‘wait and see’ approach at the exchange. We are optimistic that the market will return to normalcy once a lasting solution to the present political stand-off is found,” said Mr Mundara.

“Company earnings have been declining and future revenues will likely be impacted negatively leading to a reduction in dividends to investors,” he added.

In the week ending October 4, the Nairobi Securities Exchange reported declines across all its market indicators.

The value of the shareholders wealth, measured by market capitalisation, was down 1.48 per cent, with equity turnover shedding 10.11 per cent on account of a 27.24 per cent decline in total shares traded.

According to chief executive of Uganda’s Crested Capital Robert Baldwin, the trend at the NSE appears to be a “flight to quality”, where investors sell investments they perceive to be high risk in favour of low-risk investments such as Treasury bills and bonds.

Interest rate caps

Kenya’s equity market started the year on a low note mainly due to low earning expectations and lack of clarity on the impact of the interest rate caps.

According to analysts at Standard Investment Bank, the bourse started recovering during the second quarter (April to June) due to the generous dividend payouts by most companies for the financial year 2016.

The payouts caused the NSE All Share Index to go up 24 per cent, to 162.21 in Quarter Three (July to September), from 130.5 in Quarter 1 (January to March).

The NSE 20-share Index increased 20 per cent to 3,751.4 from 3,112.5 in the same period.

Foreign inflows during the first quarter were $16.67 million with outflows of $96 million; in the third quarter inflows were $3.29 million and outflows were $108.18 million.

Companies that posted an increase in share price during Quarter Three included Safaricom, Kenolkobil, Equity Bank, KCB, Co-operative Bank, Britam and Kengen.

“Quarter Two (April to June) saw earnings releases coming in in a mixed way. The banks reported better than expected performance, but the same cannot be said about the other segments. Dividend announcements were also better than expected. This triggered a rally in the market,” said Mr Ruriga.

Local institutional investors started coming back to the market in Quarter Three (July to September), attracted by the low share prices and new regulations that insurance companies needed exposure in stocks and bonds.

The risk-based model regulations require insurers to underwrite their business based on their core capital.

This is determined by looking at the nature of assets they hold, such that liquid assets such as stocks and bonds are given more weight than properties in determining the amount of business each insurer can underwrite.

Has Museveni Become Uganda’s Problem?

analysisBy Haggai Matsiko

Kampala — Once celebrated at home and abroad as one of a new breed of African leaders, President Yoweri Museveni now finds himself the subject of intense criticism.

Observers say he faces challenges created by lack of new ideas to revive a stunted economy that might prove fatal to his political survival and that his lack of a plan to smoothly step aside when the time comes jeopardises everyone’s future.

A major boost to the economy is expected from an injection of about US$ 10 billion by international oil investors into the development phase of the oil industry. But recent political tensions have led to fears that the expected Final Investment Decision (FID), which is supposed to signal the release of these funds, could be delayed further.

Amidst all this, many observers say the political repression and the push back against opposition that Museveni is adapting are threatening the national security and economic transformation that has been his badge.

Without a clear ideology and transformative agenda, critics say, it is only his strong personality that is holding the ruling NRM party and the state machinery together.

“But he may not be president in 10-15 years,” says one Museveni critic, “If he is, he will be a lame duck with no successor and no transformation to sell.

“That makes Uganda’s future very uncertain and a risky investment,” the official added.

As this criticism mounts, Museveni; a favourite of many who has successfully held on power for over 32 years now amidst stiff opposition, is tightening the grip even more.

He has been accused of political repression in the past, but the scale and extent appears deeper and broader this time.

For some Ugandans, the events of Sept.27 – when Museveni unleashed security operatives to eject opposition legislators from parliament that had been attempting to block the ruling party from amending the constitution to scrap the age-limit are harbingers of tough political and economic times ahead.

On that day, many were disturbed that Speaker Rebecca Kadaga allowed the Special Forces, an arm of the Ugandan military that guards the president and was until recently commanded by his son Maj. Gen. Muhoozi Kainerugaba, to kick the opposition out of parliament.

The raid is seen as specifically too bad for Museveni as it is being likened to the 1966 crisis when then-Prime Minister Milton Obote deployed security forces around parliament and MPs passed the “Pigeon-Hole Constitution”.

That day’s events and the other tensions surrounding the plans to purge the constitution of the age limit also forced security to deploy heavily in the capital Kampala, raid non-governmental organisations, arrest scores of opposition politicians all the while attracting criticism from development partners and bad press locally and internationally.

When the MPs were either kicked out or abandoned parliament in protest recently, many of them announced various forms of protest including the so-called ‘Red Ribbon’ and a new wave of Walk-to-Work protests.

“People are not happy with the current state of affairs,” says Leader of Opposition Winnie Kizza. She says the NRM, removed the behind brakes when they removed term limits and now want to remove the front brakes by scrapping the age-limit.

“We are headed for disaster,” she says.

The government has responded with more clamped downs that Museveni is vowing to intensify.

At the recent celebrations to mark 55 years of Independent held at Bushenyi Municipal Grounds in Bushenyi district on Oct.09, Museveni warned that intolerance would be resisted in the strongest terms possible and that nobody would be allowed to undermine the security and democracy, which was bought with blood of patriots.

Security forces have since Sept. 30 besieged the home of the defacto leader of the opposition; Kizza Besigye after he urged Ugandans to join him in countrywide mass protests to show solidarity with those opposed to the lifting of the presidential age limit. The homes of opposition key figures are also routinely cordoned off and the politicians are either kept under virtual house arrest or picked up and detained when they venture out.

Depending on which side one is on in the growing gap between pro and anti-Museveni camps, these moves are seen as either a clampdown or the government’s bid to return sanity.

The push to scrap the age limit from the constitution and allow Museveni to stay in power has sparked debate and animosity.

Up to 75 percent of Ugandans are opposed to the lifting of the age limit according to a survey by Afrobarometer, a respected pollster.

President Yoweri Museveni has not pronounced himself on the bill. But his handlers at State House initiated the campaign, State House is funding it, cabinet sanctioned it and the ruling party has been at the centre of pushing it.

Its timing also appears to expose the motive behind the bill. Now 31 years in power, President Museveni, 73, will be 77 at the next polls. Given that Article 102 (b) which is targeted for scrapping caps the upper age limit for a presidential candidate at 75 and bars him from contesting, Museveni appears to be the intended beneficiary, critics say.

Meanwhile, political violence has risen from the level of threats to action. At least four MPs opposed to lifting the age-limit have had grenades exploding in the compounds of their homes around the same time in what appear to be acts of intimidation.

But politicians supporting the Bill are almost equally threatened with some being attacked by angry mobs at public gatherings.

Effect on economy

Unfortunately, Museveni’s decisions and the opposition’s calls for nationwide civil disobedience appear to be hurting him and his fundamental change legacy even more. He has apparently transformed himself into “the biggest threat to Uganda’s development prospects”.

Critics say Museveni’s quest to stay in power and the chaos it is attracting, are having a chilling effect on, among others, investor confidence, critical for Uganda’s struggling economy.

On the fiscal side, Museveni has been attempting to revive that economy through increased and better managed public investment. Bank of Uganda has also attempted to strengthen the sluggish economic growth momentum reported in the third and fourth quarters of FY2016/17.

Some of the interventions appear to be working. In Q1 of FY2017/18, for example, economic growth rose to 1.8% from 1.1% in the previous quarter.

Unfortunately, as Bank of Uganda Governor Tumusiime Mutebile noted in an Oct.03 monetary policy statement, most of this growth appears to be driven by public sector activity because private sector credit growth remains sluggish. This prompted the Central Bank to cautiously ease the monthly indicative lending rate, the central bank rate (CBR) from 10% to 9.5%. The economy is still being projected to grow at an annual rate of 5.0 to 5.5 percent in FY2017/18, which is a bit lower than the projected medium term GDP growth of 6 and 6.5%.

“No serious investor can bring here their money under these circumstances,” says economist Fred Muhumuza, who previously advised the country’s Finance Minister, “that is why FDI (Foreign Direct Investment) has continued to fall.”

Muhumuza is dismissive of the huge investment in physical infrastructure and says poor policies, implementation and supervision largely explain Uganda’s current economic situation.

“Development is cosmetic,” he said, “power lines and roads are extended where they cannot be used. The timing and management of development projects is all political and there is no supervision.”

All this is worsened by the fact that institutions are not functional. “Infrastructure is not the most important factor to investors,” he said, “Serious investors will look at the institutions like courts and ask; if I get a legal complication, how fast will it be resolved?”

World Bank figures indicate that FDI fell from US$ 1.2 billion in 2012 to US$. 1.0 billion. By June 2016, it had hit $ 870 million, a seven year low. Insiders say 2017 could be worse.

As Muhammad Sempijja, the former Country Manager at Enerst & Young explained, the response of investors is like the normal response of human beings.

“Investors like stability, security and certainty,” Sempijja explained, “if anything affects any of these variables, investors are going to be concerned.”

He said that unfortunately, sentiments emerge quickly but tend to linger.

“When there is a sense of uncertainty,” he said, “investors are going to take a wait and see approach. And the longer the uncertainty takes, the bigger the impact. Because there are usually options, others can take their money elsewhere.”

Sempijja noted that the capital flight from Uganda is not as great as it should possibly be because neighbouring economies, such as Kenya, that Uganda tends to compete with for investors are not doing any better. Added to that is the general gloomy global investment environment which has led the IMF to predict that global output is to remain unchanged at 3.6% in 2017 from 3.5% in 2016.

As Museveni grows older investor confidence is diming because, a Kampala-based political risk analyst told The Independent on conditions of anonymity, even investors who have always seen his government as one that faces risk of turmoil every five years are not sure how long he will retain the muscle to cling on despite his 31-year stable and resilient grip.

“There is no doubt the current situation is a blow to Uganda’s profile as an investment destination,” the risk analyst noted, “Investors are looking on with worry and concern.”

He added that the biggest concern is that by the end of this term, President Museveni will have been 35 years in power, has no successor and no visible succession plan.

“That creates a situation of uncertainty that is discouraging to long term investors,” the analyst noted.

Other experts also note that no country can transform on the basis of FDI alone and that local investors and manufacturers must be the drivers of the transformation with FDI playing a complementary role.

But, critics point out for instance, that poverty levels have recently increased from 20 per cent in 2013-14 to 27 per cent in 2016-17, according to the latest report by Uganda Bureau of Statistics. And the increasing poverty is fuelling frustration against Museveni.

Failure by government to pay arrears after the 2016 elections has also been raised as another issue, which has led to the collapse of several businesses. This means fewer jobs.

Political paralysis

Dramatic developments in the local economy, such as the troubles and eventual collapse of Crane Bank, which was Uganda’s fourth largest bank before the central bank closed it, add to the dark financial mood. And, according to some critics, it is sometimes driven by Museveni’s politics of survival.

In the Crane Bank case, for example, the critics says although it had many problems internally, Museveni could still have stepped in to save such a huge venture but opted out because of his survival politics. Museveni, some say, was aware that many Ugandans erroneously believed that Sudhir was a mere front for the First Family’s alleged ownership of Crane Bank and he did not want to appear to confirm a falsehood and risk political capital. Others say, the demise of Crane Bank also meant clipping the growing wings of Sudhir Ruparelia who owing to his wealth–was the richest man in Uganda–was seen as a political threat. Opposition leaders, including Kizza Besigye frequented the bank in the 2016 election period and tabloids carried unverified stories of Sudhir funding their campaign.

If, as another critic who commented on conditions of anonymity noted, that Museveni’s government appears paralysed by machinations of survival politics, the Crane Bank saga is a perfect example.

Museveni has a firm grip on power but is managerially incapable of using that power to improve the economy and lift Uganda’s vast pospulation out of poverty, he added.

In the past, the official added, there has been substantial economic growth of over 5 percent but this has been wiped out by a high population growth rate. As a result, there has not been transformation, that is, industrialisation, or a well-trained workforce, jobs, and agriculture commercialisation. Instead, the education, health, and other social services are very poor.

“You have no genuine transformation agenda or meaningful democratisation,” the critic noted, “The peace and stability you talk about is irrelevant to the youth who never saw war. What they see is a failed manager of the economy who relies on police repression and commercial use of politics to stay in power.”

However, amidst of all this, Museveni’s handlers say he must stay on because he is a uniting factor and the only sure bet for Uganda’s development ambitions.


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