Finance

Finance (395)

Parliament Wants Deputy Governor Job Quickly Filled After Kasekende Departure

The minister of Finance Matia Kasaijja has been summoned to appear before Parliament Thursday next week to explain when they have not appointed a new deputy governor of Bank of Uganda.

The Speaker issued the directive on Thursday in response to a complaint raised by MP Michael Mawanda (Igara East) who said that work at the central bank has been paralysed since the office of the deputy governor has not been filled ever since Dr. Louis Kasekende left after the expiry of his contract.

“The office of Deputy Governor, Bank of Uganda has been quite vacant for quite some time and he is the vice chairperson of the board. This is a strategic institution and I fear we may face some challenges if a position isn’t filled in the shortest time. As you know, I have been processing a bill and I asked some information but nobody was committal to answer questions,” Mawanda told Parliament.

In response, Speaker of Parliament Rebeca Kadaga said, the Minister of Finance should come and brief Parliament on which the position will be filled.

“The Minister of Finance should come and update us about the deputy governor despite resolutions to separate the management board positions, they haven’t happened but they are still bound in the old law. The minister for finance should come back next week and brief the house.”

Former Bank of Uganda deputy governor Louis Kasekende contract expired recently and President Yoweri Museveni refused to renew his contract. Kasekende is one of the top former officials of Bank of Uganda who contributed to fraudulent sale of seven commercial banks.

World Bank Distances Itself From 'Racist' Director Kabagambe

The World Bank has spoken out on against a tweet from Anne Kabagambe, the executive director of the global bank for Africa Group, which some said had racist connotations directed at Ugandan businessman Sudhir Ruparelia.

In a tweet this week, Kabagambe, accused Sudhir of engineering the exit of former deputy governor of Bank of Uganda, Dr Louis Kasekende.

The tweet caused a storm because she referred to Sudhir as “That Indian,” which was deemed racist by a number of social media commentators. Kabagambe later claimed her twitter handle had been hacked. It has since been taken down.

Sudhir was born in Kasese, in the western part of the country before moving to Kampala. He is considered to be one of the wealthiest Ugandans.

In a statement issued by David Theis, the spokesperson for the president of the World, the bank distanced itself from the tweet, saying board members report to their central or finance ministries.

“Management does not have any purview over Executive Directors, as they are not staff,” Theis said.

Kabagambe, directly supervises works in constituency countries such as Botswana, Burundi, Eritrea, Eswatini, Ethiopia, The Gambia, Kenya, Lesotho, Liberia, Malawi, Mozambique, Namibia, Rwanda, Seychelles, Sierra Leone, Somalia, South Sudan, Sudan, Tanzania, Uganda, Zambia and Zimbabwe.

SOURCE: Nile Post

MPs Say Chronic BoU Recapitalization Distressing Economy

A section of MPs have protested what they call chronic capitalization of Bank of Uganda (BoU), arguing that the practice is greatly affecting funding in crucial sectors of the economy, Business Focus reports.

This is contained in the minority report on the 2020/2021 FY National Budget Framework Paper authored by Butambala County MP, Muwanga Kivumbi and Dokolo Woman MP, Cecilia Ogwal, who raised queries on the recapitalization of Bank of Uganda.

It should be noted that as of  2019/2020 FY, Government has recapitalized Bank of Uganda to the tune of Shs1.160.2Trn with Parliament having approved another proposal to recapitalize the Central Bank to a tune of Shs481.7bn in 2020/2021 FY, which has brought the total amount for the recapitalization of Bank of Uganda to Shs1.641Trn.

According to documents tabled before the Committee, in 2012/2013 Government injected Shs410.02bn, followed by Shs250bn in 2014/2015 and in 2015/2016, BoU received another capital injection of Shs200Bn.

In 2016/2017, the Central Bank was recapitalized with Shs100bn, while in 2019/2020, the Bank received a capital injection of Shs200bn.

The duo noted that Government is authorized under Section 14(4) of the Bank of Uganda Act (2000) and Section 36 of the Public Finance and Management Act 20l5 as amended to issue securities for the recapitalization of the Bank of Uganda where the capital of the Bank is impaired.

Bank of Uganda informed Parliament’s Budget Committee that as at June 2019, BoU capital was impaired to the tune of Shs681.7bn and that in October 2019, BoU was partly recapitalized with securities worth Shs200bn, leaving a deficit of Shs481.7bn which is required in FY2020/2021.

Although the majority of the Committee members agreed to recapitalize the Central Bank again, the opinion was protested by MPs Muwanga and Ogwal who argued in their report, “This chronic continuous recapitalization of the Bank of Uganda is denying valuable resources for critical government programmes like Health, Education, and Industrialization.”

The two made several recommendations including calling on the Central Bank to utilize savings on Government accounts, drawdown of the General Reserve Fund, deposit auctions and Repurchase agreements.

SOURCE: Business Focus

IMF Report Calls For Reforms At Bank Of Uganda

The International Monetary Fund has reportedly authored a report on the current situation at Bank of Uganda and called on the country’s leadership to carry on immediate reforms at the central bank, Eagle Online reports.

According to sources within BoU, the report further says none of the current top managers including former Deputy Governor, Louis Kasekende who is busy scheming on how to be brought back as governor should be considered for redeployment at BoU.

“It is true, there is a report and apart from a copy that was given to the president, the governor has a copy and yet to make it official at the board level. However, those close to the governor say it recommends for a complete overhaul of the current establishment including the governor himself”.

Parliament last year recommended that contracts of the governor Emmanuel Tumusiime Mutebile and his deputy, Dr Louis Kasekende should not be renewed following an investigation into the irregular sale of seven commercial banks by the Parliamentary Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) has recommended.

While Kasekende is no longer at the central bank following the expiry of his contract and refusal by President to reappoint him, Mutebile’s contract still has a year to go. It is not yet sure is President Museveni still wants him at the helm of Bank of Uganda.

dfcu Bank Thrown Out Of Sudhir's Meera Buildings

DFCU Bank has commenced vacating Meera Investment Limited properties that it has been illegally occupying ever since they bought Crane Bank Limited from Bank of Uganda in January of 2017.

The eviction comes after a court ruling last year that ordered DFCU Bank to vacate Meera Investment Limited properties.  

Following the court ruling, DFCU Bank on September 12, 2019, wrote a letter to Bank of Uganda explaining its decision to return 48 properties in January 2020.

And this Monday morning, tracks carrying DFCU bank belongings including chairs, teller tables among others were seen leaving Crane Chambers on Kampala Road.

Sources said that DFCU might in the meantime quit 20 of the 48 contested buildings.

The closure of these branches will lead to loss of jobs as staff members who have been working in these branches are expected to be laid off.

dfcu Bank controversially acquired Crane Bank Ltd in January 2017, after the Bank of Uganda put the former under statutory management and later closed, and sold it off.

As a result, the dfcu Bank has been caught up in the ensuing legal battle between the shareholders of Crane Bank Ltd led by city tycoon Sudhir Ruparelia and the central bank.

Bank Of Uganda Leads Pack Of Loss Making MDAs With Shs855bn 2019 Loss

The Bank of Uganda (BoU) made a loss of Shs855.58bn in 2019, up from Shs424.11bn profits recorded in 2018, the December 2019 Auditor General’s report has revealed.

The report whose authoring was overseen by Auditor General, John Muwanga highlighted that in comparison to the previous year, 13 enterprises posted improved (increased profits or reduced loss) performance, with Uganda Electricity Generation Company, Uganda Property Holding and Civil Aviation Authority registering over 300% percentage increase.

The report says that Uganda Development Corporation, Uganda Air Cargo Corporation and Bank of Uganda posted losses for the year from profit positions in the previous year with a reduction in performance of over 300%.

Uganda Development Corporation made losses of Shs17.57bn from the Shs383.8m profits the company made, while Kilembe Mines Limited extended its loss-making streak in 2019 with Shs2.32bn losses recorded from Shs1.62bn losses in 2018.

The other companies that recorded losses were Capital markets Authority Shs43.83m, although this was a reduction from Shs1.33bn the agency made in 2018.

The other loss-making company was NEC Tractor Project whose losses soared to Shs389.3m, up from Shs70.63m recorded in 2018.

SOURCE: Business Focus

World Bank’s Kabagambe Racist Sudhir Comment Causes Uproar

World Bank’s Executive Director for Africa Group Anne Kabagambe has been called out for racism over remarks she made on Twitter in relation to Bank of Uganda’s former Deputy Governor Louis Kasekende leaving office, Matooke Republic has reported.

Kasekende’s contract expired last week his efforts to lobby the appointing authority President Yoweri Museveni to renew his contract were unsuccessful. Kasekende fancied himself as the next Governor as current Governor Tumusiime Mutebile’s contract runs out in January next year but he was so near, yet so far as his contract wasn’t renewed.

Bank of Uganda confirmed Kasekende’s exit in a tweet where they shared a story of his farewell to staff. World Bank’s Kabagambe replied to the tweet with a racial statement. “The Indian Sudil (Sudhir Ruparelia) lobbied him out of office,” she tweeted.

Sudhir was quick to call out her poor conduct of using a racial card; “What a racist, yet working as a director at the World Bank… Birds of the same feather,” tycoon Sudhir Ruparelia replied.

“Why play a racial card @akabagambe? Is Dr @SudhirRupareli1 part of the appointing authority? I’m disspointed in you @akabagambe,” tweep Geoffrey Baluku replied.

SOURCE: Matooke Republic

Irregular Sale Of Crane Bank To DFCU Distracts CDC Shares’ Transfer To IFU

The ghosts of Crane Bank Limited continue to haunt DFCU Bank in a manner that destabilizes the smooth operations of the commercial bank.

In a hurried procedure, Bank of Uganda sold Crane Bank to DFCU Bank in 2017 in a manner many pundits, the Auditor General and Parliament said was flawed and full of irregularities.

And one of such irregularities has curtailed the transfer of shares owned Britain’s Commonwealth Development Corporation (CDC) Group, a shareholder in DFCU, to IFU- Denmark – the Danish Investment Fund for Developing Countries.

DFCU Bank December last year announced in what it called a cautionary announcement that CDC Group, a significant minority shareholder, was selling their 9.97 percent shares in DFCU to IFU of Denmark.

But now Eagle Online reports that in their attempt to do due diligence, IFU demanded  that DFCU bank avails minutes regarding the purchase of Crane Bank Limited on January 25, 2017 – this neither DFCU or Bank of Uganda had.

“The demand by the Danish Company to look at the minutes, according to sources, has forced DFCU management to look at the possibility of approaching parliament and see if they can delete one of the findings of parliament’s Committee on Commissions, State Authorities and State Enterprises (COSASE) that investigated BoU over the controversial sale of seven commercial banks between 1993 and October 20, 2016.

That finding is that BoU transferred CBL assets without any minutes written, something that COSASE found unusual in the transaction of such a magnitude.” Eagle Online said in the Friday news report.

During the probe of BoU, the then Executive Director of Supervision, Ms Justine Bagyenda confirmed to COSASE that the sale of CBL to Dfcu was done over telephone and that there was no any minutes written to effect the sale. The same was confirmed by MMKAS Advocates who were the transactional advisors acting on behalf of BoU.

During COSASE probe, Dfcu officials led by chairman board of directors Jimmy Mugerwa who appeared before COSASE as witnesses in the closure and purchase of Crane bank, made a defense presentation in regards to the terms of purchase of Crane bank agreement, however, the presentation was backed by fake documents which were neither dated nor signed by the bank authority. However, this prompted MPs of the committee to kick them out and allow them reorganize themselves.

DFCU Predicted Material Effect 

DFCU, who have for the past three years been struggling to retain customers, staff and investors, said in the cautionary notice that the departure of CDC Group is expected to cause a material effect in the day to day running of the bank.

“Dfcu limited…advises its shareholders and the general public that a significant minority shareholder has received and accepted an expression of interest for the purchase of its shareholding in the Company by another which, if successfully concluded, may have a material effect on the price of the Company's shares,” Dfcu said in the cautionary announcement.

It went to warn and advise shareholders and potential investors to exercise caution when dealing in the Company’s shares until a further announcement is made.

Snubbed By Museveni, Kasekende Pens Farewell Letter To BoU Colleagues

Dr. Louis Kasekende has thrown in the towel after losing hope of President Yoweri Museveni reappointing him as Deputy Governor Bank of Uganda. This comes after officially handing over office on Monday following the expiry of his contract.

In the letter, the outgoing deputy governor said he has made friends at the central bank for the three decades he has worked there and wished his colleagues success. Below is the letter reproduced. 

“It has been a great honour to serve in position of DG for the last 10 years. This is in addition to my first five-year term in the same position that stretched over the period 1999 to 2006.

 I express my profound gratitude to the appointing authority H.E President Museveni for according me the opportunity to serve the bank and to represent the country in various continental and international assignments.

 I also thank the various Ministers of Finance, Governor and the board of Directors of the bank for the support over the many years I have served the Bank.

 Last but not least I would like to thank all for the love and tremendous support during my employment with BoU.

 Excluding the years, I was at World Bank and AFDB, I have spent close to thirty years in total with BoU. Thus many of colleagues have become my friends.

 As I reflect upon my time at the bank. I am deeply grateful for all I have met. Serving our country is a worthwhile experience for all of us. We have jointly achieved a lot and we should be proud of the tremendous progress for our bank and our country.”

Renewable Energy Projects Get ADFD $105m Financing As Recommended By IRENA

Abu Dhabi Fund for Development (ADFD), the leading national entity for economic development aid, Sunday confirmed the allocation of approximately US$105 million for eight renewable energy projects under the seventh cycle of its partnership with the International Renewable Energy Agency (IRENA).

The IRENA/ADFD Project Facility announcement marks a record level of funding for any cycle since the Facility was launched and will provide funding for eight projects in Antigua and Barbuda, Burkina Faso, Chad, Cuba, the Maldives, Nepal, Saint Lucia, and Saint Vincent and the Grenadines. The announcement made during the 10th IRENA Assembly brings cumulative funding to date to US$350 million, in line with the commitment made by ADFD across seven funding cycles to IRENA recommended projects.

The Facility supports developing countries in securing low-cost capital for renewable energy projects to increase energy access, improve livelihoods and advance sustainable development on the ground.

Speaking on the occasion, His Excellency Mohammed Saif Al Suwaidi, Director General of ADFD, said: "In cooperation with IRENA, ADFD is proud to have supported the deployment of renewable energy solutions worldwide over several years. In its efforts to boost the implementation of the United Nations' Sustainable Development Goals (SDGs), specifically Goals 6,7,11, 12 and 13 – ADFD-funded projects over the seven cycles of the Facility have led to the widespread adoption of scalable, clean, and sustainable energy alternatives in 26 countries."

He added: "Today's announcement re-affirms the UAE's and ADFD's leading efforts to combat the effects of climate change by stimulating robust development across the global renewable energy sector. The Fund's commitment to this priority has enhanced long-term growth prospects and yielded socio-economic benefits for millions of lives in line with the national objectives of the beneficiary countries."

Francesco La Camera, Director-General of IRENA, said: "Overcoming investment needs for energy transformation infrastructure is one of the most notable barriers to the achievement of national goals. Therefore, the provision of capital to support the adoption of renewable energy is key to low-carbon sustainable economic development and plays a central role in bringing about positive social outcomes."

He added: "The record levels of funding announced in this cycle of the facility will not only support the eight chosen countries in their pursuit of energy and climate plans but will also further global ambitions to build a sustainable future. This facility is a true reflection of the transformational outcomes that organisations with shared goals can deliver when they come together, and provides a blueprint effective cooperation in the future."

In Antigua and Barbuda, an 8 MW hybrid power plant (solar and wind) will receive an ADFD investment of US$15 million. The project is expected to benefit 5,500 households and allows for large reductions in the import of fossil fuels.

In Burkina Faso, an ADFD loan of US$5.5 million will contribute to the construction of a 3 MW solar PV power plant in the country. The project is expected to extend electricity to approximately 40,000 people in rural areas.

In Chad, the ADFD loan of US$15 million will contribute to the construction of a six MW solar power plant. The project is expected to benefit more than 215,000 people in six cities.

In Cuba, a project will receive an ADFD loan of US$20 million to install 8.5 MW of solar PV capacity, supported with 2 MW of energy storage, in Isla de la Juventud. The project will benefit 32,300 people, aims to support the energy sector, decrease fossil fuel consumption, reduce the level of carbon emissions and secure energy consumption from renewable and sustainable sources.

In the Maldives, a waste-to-energy plant project in the city of Addu will receive an ADFD loan of US$14 million. The 1.5 MW renewable energy project will utilise waste in generating electricity and reduce dependence on imported fuel benefitting 35,000 people.

In Nepal, a project will receive an ADFD loan of US$10 million to support a total of 20 biogas digesters which will serve as demonstration units to 270 municipalities. The digesters will convert organic waste into useful energy and offset the use of fossil fuels by replacing it with renewable natural gas.

In Saint Lucia, the 10 MW Troumassee solar power station, battery storage and setting up solar energy systems in the country, will receive an ADFD loan of US$15 million. The venture will support the whole population, economic development, advance the implementation of Saint Lucia's national energy policy and reduce diesel fuel consumption.

In Saint Vincent and the Grenadines, an ADFD loan of US$10 million will support the installation of a 7 MW solar PV project and benefit 2,444 households. The renewable energy venture aims to reduce carbon emissions, fossil fuel consumption and operating costs.

Since the first cycle selection of projects in 2014, ADFD has successfully funded 32 renewable energy projects across the world, covering up to 50 per cent of the total project costs. They will bring 200 MW of renewable energy capacity online and empower over seven million people with access to electricity, significantly improving their livelihoods. Spanning Asia, Africa, Latin America and Small Island Developing States, the projects encompass a broad spectrum of renewable energy sources – wind, solar, hydro, geothermal and biomass – and technologies.

Since its inception in 1971, ADFD has financed hundreds of development projects in the renewable energy sector around the world worth US$1.187 billion (AED4.4 billion). Driving the objectives of the United Nations' SDGs, these projects have contributed to the production of more than 2,500 MW of renewable energy in 60 countries.

 

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