Category Archives: Uganda

(Updated 10-12) Ugandan Parliament Votes to Suspend Oil Deals on Corruption Charges

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BBC News is reporting that the Ugandan parliament has asserted its independence by acting to freeze new oil agreements after bribery allegations are brought forward by an MP:

Uganda’s parliament has voted to suspend all new deals in the oil sector following claims that government ministers took multi-million dollar bribes.

MP Gerald Karuhanga said in parliament on Monday that UK-based Tullow Oil paid bribes to influence decisions.

Tullow said it rejected the “outrageous and wholly defamatory” allegations.

The vote is a big blow to President Yoweri Museveni, who has been in power since 1986, analysts say.

The BBC’s Joshua Mmali in the capital, Kampala, says it means the government will not be able to sign new oil deals until a petroleum law is enacted.

.  .  .  .

Update–from Wednesday’s Daily Monitor:

The British High Commission in Kampala yesterday said the country’s Metropolitan Police is at liberty to start investigations into allegations that Tullow, one of London’s 100 listed companies, paid bribes to senior Uganda government officials. “Bribery of foreign public officials is of course an offence under UK law, and it would therefore be for the British Police to decide whether to open an investigation into allegations made against a British company,” a spokesperson for the High Commission said in reply to our email enquiries.

UK’s 2010 Bribery Act imposes “strict liability” on UK corporations or business firms that fail to make “adequate processes” to prevent bribe payments. In yesterday’s statement, the High Commission said it was following the ongoing oil debate in Parliament “with interest”, but understand that “Tullow Oil totally rejects those allegations”.

The Company had by press time not replied to specific questions this newspaper raised based on allegations in Parliament that the firm between June 1 and July 16, 2010 paid out up to $100m (Shs280b) to “experts”, among them powerful ministers, for “professional services” from accounts with Bank of Valetta in Malta.

.  .  .  .

Related articles

East Africa ranks fourth of five regions in 2011 Mo Ibrahim Foundation Governance Rankings–Tanzania, Uganda and Kenya each move up from 2010

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2011 Governance Rankings for East Africa
Rank (of 53-followed by raw score)

4th Seychelles 73
13th Tanzania 58
20th Uganda 55
23rd Kenya 53
25th Rwanda 52
29th Djibouti 49
31st Comoros 47
34th Ethiopia 46
37th Burundi 45
47th Eritrea 35
48th Sudan 33
53rd Somalia 8

Here is a link to a summary brochure of the East Africa findings.

Here is my post from last year’s release.  Tanzania has moved up from 15 to 13, Uganda from 24 to 20 and Kenya from 27 to 23.

Museveni defends Gaddafi while inflation soars in Uganda

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Museveni reiterated his defense of Gaddafi this week in The Daily Monitor:

President Museveni has reiterated his criticism of the West and attacked Nato for disorganising a friend, whose 42-year rule faces a humbling end.

Speaking at the annual Muslims Iftar dinner at State House, Entebbe on Saturday, Mr Museveni addressed himself on two fundamental issues: The economic crisis at home and the battle for Libya. He accused the West of greed and defended Col. Gaddafi’s mistakes even though, he said, the Libyan leader attempted to go behind his back to hijack his chiefs in Kampala.

“Gaddafi had his own mistakes, he came here and organised my chiefs without telling me. We cancelled that meeting and I warned chiefs because it was wrong,” Mr Museveni said. “But Gaddafi built a mosque for us and as a leader, he had his mistakes, but those Europeans have more mistakes and problems. They think the rest of us are fools except themselves. When there are riots in Africa, they call them pro-democracy and in London, they call them, criminals.”

While inflation in Uganda has hit a 20-year high of 21.4%:

Ugandans will be bracing themselves for even harder times ahead as the continued depreciation of the local currency, rising prices for fuel, essential commodities and food combined to push inflation to a new 20-year high, further threatening the economy’s growth.The Consumer Price Index (CPI) released by the Uganda Bureau of Statistics yesterday indicates that inflation rose from a revised rate of 18.8 per cent in July to 21.4 per cent in August.

This represents a 2.6 percentage point rise, which, though lower than the 3.1 percentage point increase registered in July, still dragged the battered economy over another double digit threshold.

The Director for Macro-Economics Statistics at Ubos, Dr Chris Ndatira Mukiza, said food inflation, which rose to 42.9 per cent from 40.7 per cent, remains the main driver of inflation.

Back in May when Museveni was sworn in for another five year term after 25 years in power, Think Africa Press noted “For the first time in decades, inflation has hit the two digit mark to settle at 11%,” and asked “President Museveni:  Africa’s Marie Antoinette?“

One is reminded of Marie-Antoinette of France. Are these leaders in touch with reality? Do they understand the condition of ordinary people of Uganda? And how many Ugandans really depend on land, and how productive is that land? What percentage of farmers are producing for the market? Even for those who have access to land, can they get all that they need from that land? In any case, the root of this inflation can be traced to the colossal amount of money poured into the country during the recent election campaigns. And this was largely by President Museveni himself.

Gaddafi and Museveni

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Gaddafi and Museveni

Meanwhile, aside from the famine, business is moving . . .

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Upsidedown Freightcar

The latest on financing for the latest iteration of the Rift Valley Railroad, from “African Capital Markets News”:  a mix of public and well-connected private entities will have various debt and equity investments going forward:

The International Finance Corporation (www.ifc.org) and 6 leading international finance institutions provided $164 million in financing to Rift Valley Railways International (www.riftvalleyrailways.com) to rehabilitate the Kenya-Uganda railway today (2 August). The aim is to boost cross-border trade and investment in East Africa. Other key shareholders are Kenya’s TransCentury, which listed on the Nairobi Stock Exchange on 14 July, and Uganda’s Bomi Holdings Ltd, reportedly owned by Charles Mbire. The financing is part of a $287m capital expenditure programme to improve the operating company’s infrastructure and rolling stock.
Other institutions participating in the package include: African Development Bank ($40m), Germany’s KfW Bankengruppe ($32m), Dutch Development Bank FMO ($20m), Kenya’s Equity Bank ($20m), Cordiant’s Infrastructure Crisis Fund ($20m) and the Belgian Investment Company for Developing Countries ($10m). The balance of the funding for the $287 million capital expenditure programme is being contributed by shareholders and generated through operations.
IFC is the largest financier to Rift Valley Railways and provides a $32m loan, of which $10m is already disbursed, and an additional $10m in equity to be committed. RVRI is a portfolio company of Citadel Capital, an Egypt-based private equity firm with $8.7 billion in investments across 14 countries in Africa.

We can certainly hope that this combination of interests and expertise will get the job done this time.

Meanwhile, Time features a story on “The Repatriate Generation” about African business executives leaving the North to return to Africa:

Such bonanzas — opportunities in troubled places with huge needs — are increasingly being sought out by a fast-growing group: Africans who have returned home after years of living, working and studying in the West. Though still a small subculture, African executives who have abandoned high-flying careers on Wall Street, in the City of London and in other financial hubs are becoming a force across the continent, their impact far outstripping their numbers. By moving home, they and others are bucking the trend of generations of Africans who headed west in search of brighter prospects, better education and decent jobs — and stayed abroad for good. Millions of African families have been kept afloat for decades by remittances from relatives working abroad as everything from street cleaners to physicians. Now with economic prospects and, in some cases, political stability improving in Africa while both are declining in the West, some of those relatives have concluded they are better off back home. “There is a momentum among young, upwardly mobile people to come home,” says Rolake Akinola, a Nigerian business analyst with years of work experience in London. “We call ourselves the Repatriate Generation.”

Related articles

Working on(or over?) the Railroad–“What is emerging as one of Kenya’s most infamous privatisation scandals” and “the new scramble for Africa”

Today’s Corruption News–Education Funds, Rift Valley Railways, Maize and More

The latest on the Rift Valley Railways saga–how business is done in Kenya

Uganda’s Independent features CSIS report on risk of instability with NRM decline, Museveni succession

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“American Group Predicts Instability Over Succession”  Independent(Kampala) July 22:

Election year 2016 will be a turning point for Uganda, according to a report by the powerful American policy solutions provider, the Centre for Strategic and International Studies (CSIS).

As a sign of likely instability, the June 30 report notes that “the NRM is on a long-term trajectory of decline, and thus its survivability by the end of President Museveni’s current presidential term is certainly in doubt.”

Titled “Assessing risks to stability in Sub-Saharan Africa”, the report was commissioned by the Unites States of America’s military Africa Command, AFRICOM, which plans for America’s strategic security interests on the continent. The US government often uses the CSIS reports to project the future and strategise for change. The report is based on events that have toppled regimes that appeared to have a firm grip on power in Egypt, Tunisia, and led to a western-backed armed rebellion in Libya.

. . . .

The report is based on studies in 10 countries; Angola, Botswana, Ethiopia, Ghana, Kenya, Rwanda, Senegal, Sudan, and Uganda, that it describes as “undergoing the growing pains of democracy”.

It notes: “In Ethiopia, Uganda, Rwanda, Sudan, and Angola – democracy has little meaning beyond the ritualistic holding of elections in which political space is severely constrained and the winner is generally predetermined”.

Joel Barkan, a professor of political science at the University of Iowa and a specialist on politics and development policy in sub-Saharan Africa whose books about the politics of Sub-Saharan African countries are recommended readings in many universities, wrote the Uganda section of the report.

He notes that change is inevitable by all means either through anointment of a successor by Museveni himself or through the overthrow of Museveni or his chosen successor.

He says the style of Museveni’s governance has grave implications for the future stability of the country because it is highly personalised that the running of the country to a greater extent revolves around Museveni’s personal position.

At the centre of the report lies a big question on whether Museveni will run for a fifth elected term in 2016 at the age of 73 or who will be his successor if he decides to step down and how the succession will be managed not to create disputes both within the party and the country at large.

Although he seems to have an insatiable desire to remain in power, Barkan counsels, Museveni should be realistic enough to know he does not have much time left and the sooner he drafts his end game the better for him and his country.

The CSIS Africa Program homepage for the “Stress Testing African States” reports provides an overview and gateway to the details of the studies.

Another good new read:  “A Middle-Income Uganda:  Aiming for Mediocrity and Failing” at the LSE Africa blog.

Former U.S. Diplomat Calls for Military Action Against Sudan Over Abyei and South Kordofan

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The situation in Sudan seems to continue to worsen.  Aside from the tragic consequences in Sudan, another round of war there does not bode well for reform in Kenya and Uganda, especially in regard to the upcoming Kenyan election.

From the Sudan Tribune at allAfrica.com, “Former U.S. Envoy calls for Military Action Against Country”:

A former US envoy to Sudan has called for taking military action against the Khartoum government in order to prevent further escalation of violence in Abyei and South Kordofan regions.

The sense of relief that prevailed after the January referendum on South Sudan independence was conducted smoothly and in a largely peaceful environment has dissipated last month when north Sudan army seized control of the fertile, oil-producing region of Abyei, the ownership of which is also claimed by South Sudan whose vote for independence in the referendum will see it become the world’s newest nation on July 9.

Concurrently, violence erupted in the country’s north-south border state of South Kordofan after the northern army attempted to disarm local fighters aligned with South Sudan. Over 60,000 people have been displaced, according to UN figures, and hundreds have been killed, according to local NGOs as the northern army carried out aerial bombardment and heavy artillery in the area.

Roger Winter, the former U.S special envoy to Sudan, on Wednesday addressed a hearing of the House Foreign Affairs Subcommittee on Africa, Global Health and Human Rights, about the recent upsurge of violence in Abyei and South Kordofan.

Winter called for an immediate military action against Khartoum in order to strengthen South Sudan army and halt attacks on civilians.

“Take a military action against a Khartoum military target now,” Winter said, adding that the goal would be “to strengthen the SPLA in meaningful ways as a deterrent against Khartoum aggression, provocation and attacks against civilians”

Winter blamed the current situation on the approach adopted by the former US special envoy to Sudan Scott Gration, chiding his “seemingly intimate relationship” with the leadership of north Sudan’s ruling National Congress Party (NCP).

“Perhaps the eccentricities of General Gration’s approach to being Special Envoy for Sudan are related to the Administration’s commitment to ‘reach out’ to the Arab and Islamic world,” Winter said.

“His seemingly intimate relationship with the NCP leadership led to his many public references to that leadership as ‘my friends’,” he stressed.

Winter said that any commitments made by the Khartoum government are unreliable and that the government’s actions had led to the death of three million people. . . .

The full hearing line up from Thursday afternoon is here.

In “The Man for a New Sudan” in June 2008, the NY Times profiled Winter:

For the past quarter century — as head of a nongovernmental organization called the U.S. Committee for Refugees, as an official at the federal Agency for International Development and, most recently, as a special representative to the State Department for Sudan, a post created for him — Winter has fought in the back rooms of Washington and in the African bush to bring peace to Sudan. It’s not evenhandedness that makes him effective; it’s his total commitment to the people of south Sudan and a conviction, which has only grown with the years, that the government in Khartoum is, in essence, a brutal cabal. After two decades of fighting for their rights at negotiating tables, he has gained the southerners’ complete trust. “He’s simple and clear,” Edward Lino, the southern government’s chairman in Abyei, told me. “He doesn’t mince words. He’s a great man” who also “has great, great push.”

Update–Here is Rebecca Hamilton today in “Trouble in Khartoum” in Foreign Policy:

Northern Sudan will be a different country in geographic, ethnic, religious, political, cultural, and economic terms once the south separates. And the viability of the new northern nation is also in question, as is the survival of Sudan’s ruling National Congress Party.

“The NCP are being weakened day by day. They know they don’t have acceptance in the north,” says International Crisis Group analyst Fouad Hikmat.

Northern opposition parties blame NCP policies for the loss of the south, which is where most of Sudan’s oil lies. Moreover, well-connected Sudanese say there is dissatisfaction within the army, in addition to the armed insurgencies and political discontent in peripheral areas across northern Sudan.

Much of the current fighting may be strategic posturing as final deals are being hashed out over the division of wealth and territory between north and south in advance of July 9. But the ominous developments over the past three weeks are perhaps best understood as being driven by the NCP playing to its fiercely nationalistic domestic audience inside northern Sudan. . . .

Four out of the Five Members of the East African Community are among the 20 USAID “‘Feed the Future’ Focus Countries

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From a USAID press release, “USAID Administrator Rajiv Shah Announces 20 Feed the Future Initiative Focus Countries“:

In 2008, the Lancet identified just 36 countries that are home to 90 percent of all children whose growth was stunted for lack of adequate food. Based on this global burden of undernutrition and other criteria that examined the prevalence and dynamics of poverty, country commitment, and opportunities for agriculture-led growth, the 20 Feed the Future focus countries are: Ethiopia, Ghana, Kenya, Liberia, Mali, Malawi, Mozambique, Rwanda, Senegal, Tanzania, Uganda, and Zambia in Africa; Bangladesh, Cambodia, Nepal, Tajikistan in Asia; and Guatemala, Haiti, Honduras, and, Nicaragua in Latin America.

These countries experience chronic hunger and poverty in rural areas and are particularly vulnerable to food price shocks. At the same time, they demonstrate potential for rapid and sustainable agriculture-led growth, good governance, and opportunities for regional coordination through trade and other mechanisms. USAID will work with strategic partners Brazil, India, Nigeria, and South Africa to harness the power of regional coordination and influence in these focus countries.

Certainly it is encouraging that USAID finds Kenya, Uganda, Tanzania and Rwanda to present potential for rapid improvement–and perhaps the potential of the EAC itself is significant to this.   The listing is also a good reminder for Kenya that in spite of its significantly higher level of aggregate and per capita GDP, and overall growth, rural hunger remains all too common.  While this seems a constructive approach for USAID, I am skeptical that donors will  change the situation dramatically in Kenya until Kenya’s leaders share the priority to a greater extent than they have seemed to in recent years.

Another Ugandan Weapons Procurement Scandal?

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The East African reports:  “$740M fighter jets scam sneaks under the radar.”

In a deal reminiscent of previous purchases of military hardware in which the army bypassed civilian oversight, the Ministry of Defence and Bank of Uganda are in the news again following revelations that on the express instructions of President Yoweri Museveni, the ministry withdrew money from the central bank without due parliamentary approval, to buy six fighter jets and other military equipment from Russia worth $740 million.

It also emerged that this money is from the supplementary budget and that part of it — over $400 million — has already been spent. Hence government only wants parliament to rubberstamp the acquisition.

The deal marks a return to the late 1990s, when under the cover of classified expenditure, the country lost $6 million after shadowy middlemen sold the Uganda People’s Defence Forces attack helicopters that could not fly.

.  .  .  .

As usual, the president is once again on hand to let Defence off the hook.

On the night of March 24, Museveni met the National Resistance Movement parliamentary caucus at State House Entebbe and told the legislators to support the $740 million supplementary expenditure.

Although he did not mention the country the jets were bought from, the Daily Monitor reported last week that Russian defence websites claimed that Uganda and Algeria had gone shopping in the Russian capital.

It further revealed that the two countries paid a joint price of $1.2 billion for 22 jets — Uganda’s being only six.

Hence each of Uganda’s jets should have cost $54.5 million, translating into a total of $327 million.

.  .  .  .

The army also bought some 90 tanks from Bulgaria, only 10 of which proved operational.

The purchase earlier of another set of MiG jet fighters also followed a similar pattern: They arrived with one wing, had no spare parts nor bomb loading capacity.

Public policy analysts argue that these dubious procurements are not just bad luck hounding Uganda’s military.

Rather, they say, defence spending is the conduit through which public finances are channelled to fund politics.

 

In the meantime, the Kenya Broadcasting Corporation reports that the drought and increasing food prices leave 5 million people at risk of hunger in the greater Horn of Africa region:

The World Food Program – WFP Executive Director Josette Sheeran has expressed fears that drought coupled by rising food prices could drive some 5 million people into hunger in the Horn of Africa sub-region.

Sheeran said the number of hungry people in the Horn of Africa was growing and WFP aims to assist 5.2 million people as drought, rising food and fuel prices and conflict take their toll.

“More and more people need help in the Horn and we’re now on high alert over the impact of the March to May long rains. The drought began with the failure of the October to December short rains last year in eastern parts of the Horn of Africa, pushing an additional 1.4 million people into hunger,” said Sheeran.

The World Food Program is also warning that the number of people in need of assistance may increase if the current long rains – from March to May – are poor.

Sheeran who is in Nairobi on a fact finding mission noted that farmers in producing areas that have abundant supplies are selling their produce to WFP so that it can be used to help the poorest in drought-stricken areas.

In 2010 WFP bought food worth a total of US$139 million in Kenya, Uganda and Ethiopia.

Food prices have started rising in areas that relied on the failed short rains for food production, with increases for maize of 25 percent to 120 percent in some remote parts of the Horn.

Cereal prices in the region over the next six months are expected to increase by 40 to 50 percent.

Enough to drive one to drink . . . Museveni on Gaddafi (and Western company bribes to Gaddafi)

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The obvious question that comes to mind after reading Ugandan President Yoweri Museveni’s  “The Qaddafi I Know” at Foreign Policy is:  do politically-minded people go to bars?

The Middle Eastern radicals, quite different from the revolutionaries of black Africa, seem to say that any means is acceptable as long as you are fighting the enemy. That is why they hijack planes, use assassinations, plant bombs in bars, etc. Why bomb bars? People who go to bars are normally merry-makers, not politically minded people.

We were together with the Arabs in the anti-colonial struggle. The black African liberation movements, however, developed differently from the Arab ones. .  .  .  .

(you may remember that Gaddafi directed the bombing of a nightclub frequented by American servicemen in West Germany in 1986)

So is Museveni a radical?  If so, a radical for what?  For just a small sample of the rest of the sophistry:

I know Qaddafi has his system of elected committees that convene to form a National People’s Conference. Actually, Qaddafi thinks this is superior to our multi-party systems. Of course, I have never had time to study how truly competitive this system is. Anyway, even if it is competitive, there is now, apparently, a significant number of Libyans who think that there is a problem in their country’s governance. Since there has not been internationally observed elections in Libya, not even by the AU, we cannot know what is correct and what is false. Therefore, a dialogue is the correct way forward.

Museveni, of course, has allowed international observers to the elections that his government has conducted and is thus “too legit to quit” twenty-five years after taking power by force.  And since Libya is on the same continent as Uganda, Museveni is entitled to write in Foreign Policy and  have a large role is solving Libya’s problems without even claiming to know much about the details of the issues, all while stridently denouncing “foreign” meddling.  (And to take lots of American and other Western money to train and otherwise fund his military, and especially to “peacekeep” in Mogadishu–and to operate his government and otherwise meet some of the needs of his constituents while his government funds his re-election).

Pretty sobering to realize that Museveni is, in many ways, our bestest ally in the region .  .  .  .

And of course more information is coming out about Museveni’s mobilization of the Ugandan military in his election.  And now Human Rights Watch finds that a Ugandan “Rapid Response Unit” is using torture and extra-judicial killings.

And reporting by The New York Times discloses some of the massive shakedowns by Gaddafi of Western companies seeking to do business in Libya to fund his payment to the families of Lockerbie bombing victims.

The wealth that Colonel Qaddafi’s family and his government accumulated with the help of international corporations in the years since the lifting of economic sanctions by the West helped fortify his hold on his country. While the outcome of the military intervention under way by the United States and allied countries is uncertain, Colonel Qaddafi’s resources — including a stash of tens of billions of dollars in cash that American officials believe he is using to pay soldiers, mercenaries and supporters — may help him avert, or at least delay, his removal from power.

The government not only exploited corporations eager to do business, but willing governments as well. Libya’s banks apparently collected lucrative fees by helping Iran launder huge sums of money in recent years in violation of international sanctions on Tehran, according to another cable from Tripoli included in a batch of classified documents obtained by WikiLeaks. In 2009, the cable said, American diplomats warned Libyan officials that its dealings with Iran were jeopardizing Libya’s enhanced world standing for the sake of “potential short-term business gains.”