News analysis Health Business

Africa’s ambitious Music lessons improve Uganda’s economy on lebrating

trade treaty academic performance slow recovery path Ce

Issue No. 514 March 30 - April 05 2018 Ushs 5,000,Kshs 200, RwF 1,500, SDP 8
Years

Mutebile Vs Kasekende
Details of Museveni meeting
Blow-by-blow account of
fight wrecking central Bank

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Independent Publications Limited, Plot 82/84, Kanjokya Street, P. O. Box 3304, Kampala, Uganda
Tel: +256-312-637-391/ 2/ 3/ 4 | Fax: +256-312-637-396 | E-mail: editorial@independent.co.ug,
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INBOX

Issue No. 514 March 30 - April 05 2018

Mutebile
Vs
Kasekende
Blow-by-blow account
of fight wrecking
central Bank

The Week The Last Word Analysis Business Arts &

Culture
4|Museveni On 14|Saving water 24|Uganda’s
speaks out on and environment: economy on a
Rwanda, Uganda
Museveni’s Directorate of slow recovery
35|Mugalu’s
romanticism on
tension reports Umeme Water Resources path:
canvas:
missive: hosts first Water But the public
Serenityscapes
and Environment debt has
4|50% of Ugandans Why the week increased by
as metaphor for
self-freedom
would spend more president is 9.4% to hit Shs
to pay teachers 37.9trillion
better, global survey
misinformed 16|Africa’s
about ambitious trade
treaty: 37|New
electricity Beyond the Volkswagen
4|New judges 25|How Standard
sworn in
distribution clapping and Chartered Bank
Touareg :
China chosen
market and ululation in has benefited EA as launch site of
4| Lawyers call tariffs Kigali, can the economies: Volkswagen’s
for closure of ACFTA be It has lent out new ‘premium’
Nalufenya implemented? US$3.4bn and flagship
employed 2500
permanent staff

STRATEGY & EDITORIAL DIRECTOR: Andrew M. Mwenda
MANAGING EDITOR: Joseph Were
INVESTIGATIONS EDITOR: Haggai Matsiko
BUSINESS EDITOR: Isaac Khisa
PHOTOGRAPHER: Jimmy Siya
WRITERS:Ronald Musoke, Flavia Nassaka, Ian Katusiime,
Agnes Nantaba, Agather Atuhaire, Julius Businge.
DESIGN/LAYOUT: Sarah Ngororano, Harriet Jamwa.

PUBLISHER: Independent Publications Limited, Plot 82/84, Kanjokya Street, P. O. Box 3304, Kampala, Uganda
Tel: +256-312-637-391/ 2/ 3/ 4 | Fax: +256-312-637-396 E-mail: editor@independent.co.ug | advertising@independent.co.ug
circulation@independent.co.ug | Website: www.independent.co.ug

2 March 30 - April 05 2018

 Offline

Rev. Fr. Simon

Peter Mpalanyi of
Bweyogere Catholic
Parish joins Catholics
of St. Yoana Maria
Muzeeyi Bukasa sub-
parish to celebrate
Palm Sunday on March
25.   INDEPENDENT/
JIMMY SIYA .
“You are deputy IGP. You do your work
as such. Work well with IGP Okoth
Ochola.”Maj Gen Peter Elwelu, UPDF
Commander of Land Forces

President Yoweri
Museveni, shakes
hands with Justice
Jane Francis Abodo
and her family after the
swearing-in ceremony
of the new judges of
the Court of Appeal at
State House Entebbe
on March 23. Ten “It is unfortunate for districts such as
other new judges were Rubirizi and Bushenyi to have cases of
sworn-in. stunted growth despite the fertile soils
which support food production.” Diana
Atwiine, Permanent Secretary, Minister of
Health

Julius Mukunda (L), the

National Coordinator of
CSBAG with Robert Ssekate,
the principal economist
at the Ministry of finance,
planning and economic
development launching
the CSO Annual Budget
Performance Monitoring
report for FY2016/17 at
Golf Course Hotel on March “It will be a loss working with them and
22.   INDEPENDENT/JIMMY SIYA at the end of the contract, there is no
skill gained.”Katumba Wamala, Minister of
State for Works urging Ugandan workers to
learn from Chinese

4 25 1000
People in Kaliro Unlicensed schools Individuals cleared by National Forestry
District who died of which were closed Authority to carry out activities in the
Hepatitis B last year in Soroti District government’s central forest reserves

March 30 - April 05 2018 3

week
Mbabazi appointed to the
Brazzaville Foundation
advisory board
Following years of
speculation about his
next destination, for-
mer Prime Minister
and 2016 Go Forward
Presidential candi-
date John Patrick
Amama Mbabazi has
Museveni speaks out on Rwanda, Uganda tension reports joined the advisory
board of the London
President Yoweri Museveni met his Kenya on issues related to Migingo Island, based peace and con- is former Nigerian
Rwandan counterpart Paul Kagame at with Rwanda there is nothing really.” servation organiza- President Olusegun
State House in Entebbe on the afternoon of Museveni spoke of the meeting being tion, The Brazzaville Obasanjo, Former
Mar.25 amidst reports of tension between about security and other development Foundation. Prime Minister of
the two countries. issues affecting the two countries. “The Brazzaville Guinea Kabine Kom-
Kagame together with his host Mr However although the two leaders Foundation is hon- ara, Former South
Museveni first held a closed-door meeting dismissed any problems between them, ored to welcome African President
with their delegations that included minis- suspicions were raised when Museveni last the Prime Minister Kgalema Motlanthe,
ters and senior security officials. week cancelled a trip to Kigali yet in Febru- (former) Amama Former First lady of
Kagame who was accompanied by his ary Kagame too didn’t show up in Kam- Mbabazi to its France Cécilia Attias
Foreign Affairs Minister Louise Muishi- pala for the East African Heads of State Advisory Board. We and former president
wabo and the head of Rwandan intelli- Summit on health and infrastructure devel- are delighted that of East Timor Dr. José
gence Maj Gen Nzabamwita held a closed opment. Apart from this, several reports Amama Mbabazi, Ramos-Horta among
door meeting with Museveni before both have showed that the tension between the the distinguished others. The Patron
addressed a press conference where they two could have caused the recent reshuffle Ugandan statesman, of the foundation is
rubbished the alleged controversy between in the police force as bigwigs were named has agreed to join the Prince Michael of
them. “There is no fundamental problem in for instance in a case involving kidnap of Foundation’s Advi- Kent, cousin to Queen
between Uganda and Rwanda. We don’t a Rwandan national. sory Board,” said Jean Elizabeth II of Eng-
even have a border problem like with – Yves Olivier, the land. The foundation
chairman of the foun- formed in the 1980s
Deputy IGP Sabiiti hands over to new Military Police boss dation in a statement.
Based on his knowl-
works to enhance
peace through estab-
The newly appointed Deputy Inspec- were recently able to defeat hooliganism edge and expertise lishing diplomatic
tor General of Police Brigadier Sabiiti in the city. after serving in sever- dialogue between
Muzeeyi on Mar.24 handed over to On his part, Brig. Sabiiti pledged to al senior positions in conflicting parties
Col. William Bainomugisha as the new work with utmost professionalism and Uganda including as and developing cross
military police Commander in a func- said that he has worked in many joint Minister of Defense, border economic
tion presided over by the commander operations with the police and he is sure Minister of Security and environmental
Land Forces Maj. Gen Peter Elwelu. In his that he will be able to execute his new task and Attorney Gen- projects in different
speech, Elwelu urged Muzeeyi to revive well since he will on some occasions seek eral, Mbabazi’s role is countries. Although
and cleanse the image of the police force the support of the military police. going to be guiding it’s a global entity, it
just as he organized the Military Police The function was ended by handing the foundation in its has special interest in
which he found in tatters and has now over instruments of power and reading of important activities. Africa issues.
organized it into one formation that they his exit report. Also on the board

*terms and conditions apply

4 March 30 - April 05 2018

 Week

Kadaga calls for reforms in Commonwealth association

Speaker Rebecca Kadaga has called for
urgent implementation of the proposed
reforms to the Commonwealth Parlia-
mentary Association (CPA), a constitu-
ent organization of the Commonwealth
if the status is to be changed and be
aligned to the interests of contributing
countries.
“At the moment, the Commonwealth
Parliamentary Association is a char-
ity of the United Kingdom and in case
of dissolution, the proceeds which are
contributed by member countries would
go to charities in the United Kingdom,”
Kadaga said at a meeting held in Mauri-
tius adding that representatives agreed
to present the position to their heads
of state to process decision making on
the matter during the Commonwealth
Heads of Government Meeting in April
2018.
Kadaga also added that the meeting
also resolved to extend internship oppor-
tunities at the prestigious CPA Secre-
tariat to reflect the diversity of all the five
regions represented in the Association.
“We discussed the need for inclusion
on the internship of CPA and we have
resolved that they should come from all
the five countries of the Commonwealth
because there is a tendency of having
them locally drawn from the United
Kingdom,” said Kadaga. The Speaker
assured the Commonwealth Parliamen-
tary Association of Uganda’s readiness
to host the youth forum in April.
The CPA is a constituent Organization
of the Commonwealth, bringing together
all Parliaments of 52 member countries.

Over 50% of Ugandans New judges sworn in

would spend more to
pay teachers better,
global survey
The Global Parents Survey 2018 released
last week shows that more than any other
country polled across the world, if there
were additional funds to spend on their
children, 56% of parents in Uganda would
like to see it spent on better pay for teach-
ers. The country with the second highest
demand for better pay for teachers was the
US (47%). By contrast, only 14% of Indone-
sian parents listed better pay for teachers
as among their top choices for allocating
hypothetical additional funds, the lowest of
any country surveyed.
Most comprehensive global study ever
of parents’ attitudes towards their chil-
dren’s education conducted across 29
countries by global education charity the
Varkey Foundation also shows that Ugan-
dan parents are the least concerned of any
country surveyed about their children’s
happiness at school with only 20% citing
this as among the three things that cause
them the most anxiety about their child at
school.
The parents surveyed also rated free to
attend schools under programmes – Uni-
versal Primary and Secondary Education
are very poor even though many noted
that cost is the most significant factor that
many of them consider while picking their
children’s schools.
However, 29% of the parents reported
they did not get their first choice of school
for their child, more than any other coun-
try surveyed apart from Singapore at 31%.
Other countries surveyed in the online
poll that involved 27,000 parents include
Argentina, Australia, Brazil, Canada, China,
Colombia, Estonia, Finland, France, Ger-
many, India, Italy, Japan, Kenya, Malaysia,
Mexico, Peru, Poland, Russia, Singapore,
South Africa, South Korea, Spain, Turkey,
Uganda, the UK, and Vietnam.
In a function offici- Sekaana, Joyce Kavuma,
ated by President Emmanuel Baguma and
Museveni at State Richard Wabwire were
House in Entebbe on
Mar.23, eleven newly
urged by the president
to uplift the image of the
appointed judges that judiciary that has recently
were recently vetted suffered increasing loss
by parliament were of public trust because
sworn in. of corruption tendencies
The judges – Rich- among some judicial
ard Buteera and Richard Buteera Conelia Sabiiti officials.
Paul Mugamba of The function recog-
the Supreme Court, and high court justices – nized sixteen judges all
Stephen Musota, Percy Paul Gadenya, Alex Mack- together whereby the five
Night Tuhaise, Ezekiel ay Ajiji, Conelia Kakooza were not new appointees
Muhanguzi who had Sabiiti, Tadeo Asiimwe, but were rather elevated
retired, Christopher Madra- Olive Kazaarwe Mukwaya, to the Supreme Court and
ma of the court of appeal Jane Francis Abodo, Musa court of appeal.
Lawyers call for closure of Nalufenya
for violating human rights.
“We expect the new leadership to
begin by closing the torture chambers
including Nalufenya. We shall engage
them to see this is done,” said Fran-
cis Gimara the Law Society President
promising that he will soon request for
an appointment with the new inspector
of Police Ochola Okoth and his deputy
Sabiiti Muzeeyi as their pleas with the
old leadership to close the facility fell on
a deaf ear.
A number of suspects have in past
come out in the public to accuse police
of torture while in detention at the facil-
ity with the most popular case that put
the police on the spot being the one of
Kamwenge Mayor Godfrey Byamukama
who was badly wounded while in cus-
Lawyers under their umbrella, Ugan- tody as police tried to extract informa-
da Law Society launched their quarterly tion from him as a suspect in the murder
report on the state of the rule of law in of Assistant IGP Andrew Felix Kaweesi.
the country on Mar.21 where they called After this became public, many suspects
on the new police leadership to close a came out to tell their ordeals of being
police dentention facility in Nalufenya detained at the facility.
in Jinja district for it has been a center

March 30 - April 05 2018 5

Week
IGG interrogates BOU’s Bagyenda over finances
Justine Bagyenda, the
former Executive Director
in charge of supervision
at Bank of Uganda came
on the spot recently when
bank statements showing
that she has more than
Shs15billion in various
banks leaked to the media.
Last week, she was sum-
Justine Bagyenda Irene Mulyagonja moned and interrogated
by the Inspector General of
Government Irene Muly-
agonja over the source of
funds and how she has
managed to accumulate
prime property in the city
in such a short time.
The Mar.20 meeting is
said to have been tense
as Bagyenda complained
of being unfairly treated
when she was tasked to
provide documentation
on how she acquired her
wealth. The IGG is given
powers under Section 30 of
the Leadership Code Act
to investigate and inter-
rogate a public servant
if he/she understates her
wealth or when suspi-
cions of graft arise.

Police officer
sues Kayihura
Former lah Kiwanuka,
Inspector Gen- Mungasa said
eral of Police he handed his
Kale Kayihura resignation let-
might soon ter to his then
have to file his supervisor
defence after a at Jinja Road
police officer Police Station
sued him on only for the
Mar.26. Nelson former IGP to
Mungasa cur- usurp powers
rently attached of the police
to Bugolobi council to indi-
police station vidually refuse
as the OC CID his applica-
petitioned the tion that even
high court petitioning
claiming that the Internal
Kayihura Affairs Min- Five charged in Finnish national murder
deprived him istry couldn't
a chance of help. Mun- Five people, including a senior intel- found a day after he was arrested by ISO
participating gasa wanted ligence officer with the Internal Security operatives over coming to the country using
in politics in to contest as Organization (ISO), Apollo Kyabagye, were a forged ISO letter.
2016 when Member of on Mar.24 arraigned before Buganda Road The group who are now remanded at
he denied Parliament for Chief Magistrate’s Court and charged with Luzira prison appeared before Chief Magis-
him leave. Tingeyi county the murder of Thomas Juha Petteri Teras- trate James Eremye Mawanda were charged
Through his in Kapchorwa vouri, a Finnish national who was in Febru- with manslaughter, trafficking in narcotic
lawyer Abdal- district. ary found dead in his hotel room at the Pearl drugs and psychotropic substances, forgery
Of Africa Hotel in Kampala. His body was and conspiracy to commit a felony.

6 March 30 - April 05 2018

Humour Did you know?
Great Pacific garbage
patch may be 16
times bigger

FDC President Patrick Amuriat has directed his predecessor

Mugisha Muntu to stop his consultative meetings. The world is going to need
a bigger trash can. A pooling
of plastic waste floating in the
ocean between California and
Hawaii contains at least 79,000
tons of material spread over
1.6 million square kilometers,
researchers report March 22
in `Scientific Reports’. That’s
the equivalent to the mass of
more than 6,500 school buses.
Known as the great Pacific gar-
bage patch, the hoard is four
to 16 times as heavy as past
estimates.
About 1.8 trillion plastic piec-
es make up the garbage patch,
the scientists estimate. Particles
smaller than half a centimeter,
Minister of health Sarah Opendi says government is losing Shs 600m annually because called microplastics, account
people do not wash their hands after visiting the toilet due to laziness and poor attitude. for 94 percent of the pieces, but
only 8 percent of the overall
mass. In contrast, large (5 to 50
centimeters) and extra-large
(bigger than 50 centimeters)
pieces made up 25 percent and
53 percent of the estimated
patch mass.
Much of the plastic in the
patch comes from humans’
ocean activities, such as fishing
and shipping, the researchers
found. Almost half of the total
mass, for example, is from
discarded fishing nets. A lot of
that litter contains especially
durable plastics, such as poly-
ethylene and polypropylene,
which are designed to survive
The new Inspector General of Police, Mr Martins Okoth-Ochola, has reversed changes in police
command and leadership which his predecessor, Gen Kale Kayihura, had made in his final days in office in marine environments.

March 30 - April 05 2018 7


Inbox
Letters are
welcome !
The Editor welcomes short and
concise letters from our esteemed
readers on topical issues. Please
send them to:
The Editor, The Independent
Publications Ltd,
P.O Box 3304,
Plot 82/84 Kanjokya St,
Kamwokya.
Kampala,Uganda.
Email: editor@independent.co.ug
We need water
harvesting lessons
Last year many districts
experienced a severe drought
that affected the lives of the
citizen, crops and livestock.
Districts like Nakasongola,
Karamoja and others had no
pastures and water for their ani-
mals resulting into their death.
Now that God is abundantly
giving us rain, farming is taking
place and we expect to have
food surplus. Animals and
crops are looking good because
of the water. Amidst this abun-
dance, a lot needs to be done to
prepare for the next drought.
This is the time the Ministry
of Agriculture, Fisheries and
Animal Husbandry has to
vigorously think about mea-
sures that will curb any water
agricultural crisis. The ministry
should work hand in hand with
our media houses to educate
and inform all our citizens
about how to harvest water in
this rainy season. We shouldn’t
leave this gift of water from
God to waste. Teach the public
on cheaper means of collecting
it because even when water
becomes excess in the soil, it
becomes useless.
David Serumaga,
serumagadavid916@gmail.com
President, Buganda Youth Wing
8 March 30 - April 05 2018
Follow us on Twitter @
http://twitter.com/#!/ugandatalks
Follow us on Facebook @
www.facebook.com/TheIndependentMagazineUganda
Reasons for voter apathy
The main reason for voter
apathy, one which accounts for
up to 75% of absentees, is cor-
ruption. Older people know
the good old days and see the
current decay while young
people have grown up with cor-
ruption increasing hourly, tax
money, grants, aid and debts
are not giving citizens benefits.
Schools, health clinics, roads,
electricity etc. are all bad.
Most candidates have lied
to the people severally and a
Museveni right on Umeme
There are reports that
President Yoweri Museveni has
ruled out renewal of Umeme’s
concession in 2025 on account
of high power distribution due
to inflated operational costs.
The President has reportedly
directed the Energy Ministry to
source for a cheaper alternative
distributer.
Umeme took over power
distribution from the Uganda
Electricity Distribution Compa-
ny Ltd (UEDCL) in a concession
Jinja election and Museveni’s fall
Refer to: “Lesson from Jinja
East by-election” (The Inde-
pendent March 23). Mwenda
is being tactful when he almost
says everything about the Jinja
by-election but the Bobi Wine
phenomenon. Mwenda will
endeavour to sell us his argu-
ment that the opposition is
weak because of organisational
gaps and that’s why it has failed
to grow its numbers. Mwenda
has chosen to cover up his
sullen mood by attacking the
“victorious” and not the “van-
quished.”
Bobi Wine aka Robert Kyan-
gulanyi could have been a fac-
tor in the Jinja opposition win.
mature person sees no reason to
walk 5 to 10kms to vote for lies
unless there is an instant profit.
Also, Kizza Besigye is not
as popular as he believes or
makes people believe. Veterans
may not turn up for Besigye or
his guys like Paul Mwiru; the
MP elect for Jinja East. There
are also voters who don’t care
which party or person wins.
Finally, FDC as a party can
never win presidential elections
because it cannot garner suf-
on 1st March 2005, for 20 years,
expiring in 2025. However,
since it took over, there have
been a lot of queries includ-
ing from Parliament and some
committees such as the Interim
Review of Electricity Tariffs
Committee of 2009, which was
chaired by Gen. Salim Saleh-all
condemning Umeme’s opera-
tion and had even, among oth-
ers, called for the re-nationalisa-
tion of UEDCL.
If the President’s directive
He has “resurrected” what has
been slowly dying with Dr.
Kiiza Besigye. Bobi Wine is
a youth. He is an entertainer.
Historically, the Movement
has been seen as a party of/
for the money and elderly.
By being an entertainer, Bobi
Wine eats into Museveni’s
support base of the women.
And by claiming to be a “ghet-
to kid”, he eats into the youth.
Mwenda could have consid-
ered such factors as “petty” but
Museveni’s fall could be at
Bobi Wine’s feet.
Rajab Kakyama
News analysis Health Business
How is Shs250bn Youth Anger over fake Local content laws good lebratin
Livelihood Fund doing? hepatitis B vaccine but could be disastrous Ce g
Issue No. 513 March 23 - 29 2018
Ushs 5,000,Kshs 200, RwF 1,500, SDP 8
Years
Exposed: Dirty
secrets of 200bn
Crane Bank sale
Documents leak
in Bagyenda,
Mutebile fight
www.independent.co.ug
ficient votes and cannot rig or
buy votes. Apathy is a terrible
thing. A time will come when
people will give up and Mwen-
da will still be telling people
that the economy is growing
by a steady 6% and the GDP is
increasing steadily. But Uganda
Revenue Authority will be the
first to know that things are not
as they were.
Rwasubutare
is true, then this is a welcome
move. For a long time, the pop-
ulation has been complaining
about exorbitant power tariff by
Umeme. Over the same period,
Museveni has been agitating for
affordable power tariffs for key
sectors such as manufacturing
and also for local consumption
by the wanaichi.
Bernard Odida, Concerned
Ugandan
oyodida911@gmail.com

On Museveni’s Umeme missive
By Andrew M. Mwenda
Why the president is misinformed about
electricity distribution market and tariffs
P
resident Yoweri Museveni’s letter
to the minister of Energy has pro-
vided considerable grist to the anti-
Umeme mill. There is no company
providing a public service in Uganda that
has been as successful in business and as
equally hated by many as Umeme. This is
because Umeme made a fundamental error:
it invested in business success but ignored
both customer relations and stakeholder
engagement.
Let us begin with Museveni’s allegations:
he claims the Umeme concession was
“messed” up and this explains why the
electricity tariff is high. That the Auditor
General had in 2005 estimated power losses
at 28% but this mysteriously was changed
to 38%. That today commercial losses are
1% and technical losses are 17.3%. He won-
ders why technical losses do not decline in
spite of Umeme investing over $500 million
in the network.
Museveni then condemns the provision
that guarantees Umeme a Return On Invest-
ment (ROI) of 20%, and even suggests that
he is surprised it is billed to the tariff. He
instructs the Umeme concession should not
be renewed. This is the most uninformed
letter by Museveni I have ever read. The
President even gives instructions against
renewing the Umeme concession before
listening to the investor.
I have never known Museveni to act on a
subject of this type (where economic facts
and figures as opposed to emotional feel-
ings of the masses on the streets guide his
decisions) with such vitriol. The president
was wrong on basic facts. Sector losses are
16.8%, of which commercial losses are 6.8%
not 1% and technical losses are 10% not
17%. Umeme cannot be a big contributor to
the tariff because they take 25% of total rev-
enue generated by the sector.
I have spent years defending Umeme and
typical of Ugandan discourse, many people
say the company pays me to do so. As I
await the first cheque to hit my account, I
feel the Museveni outrage (shared by many)
should be addressed. Umeme inherited
the distribution concession from Uganda
Electricity Distribution Company Limited
(UEDCL), then a limping organisation
without money to invest in the network. In
just 12 years, it has transformed electricity
distribution into a successful business, and
the numbers are staggering.
The Last Word
In 2005 when Umeme took over, there
were 290,000 electricity connections accu-
mulated over 50 years from 1954 when
Uganda began generating electricity. In
just 12 years they have increased it to 1.2m.
Revenue was Shs160 billion (Shs 320 bil-
lion in 2018 prices). Now it is Shs1.6 trillion.
Uganda’s generation capacity was 190MW,
now it is 880MW. There were only 5,000
transformers and now they are 13,000, not
to count those that have been replaced.
The losses were 38%, now they are 16.8%,
saving the country $70 million annually and
making Uganda the best performer in the
region.
Museveni writes: “The investor claims
to have invested $500m in the distribution
infrastructure. If they invested so much
money why do the technical losses not
decline?” But how could Umeme reach
five times more customers and distribute
five times more MWs of power without
investing in transformers, sub-stations,
poles and wires? Technical losses have
fallen from 20% to 10%. The cost of invest-
ment to reduce technical losses to below
5% would exceed any sought benefits and
increase the tariff unnecessarily.
Why are so many Ugandans angry with
Umeme? I suspect the company thought
that business success alone is enough to win
public trust. Museveni suffers this weak-
ness too, believing that economic growth
and investment figures can win public trust.
Listen to his State of the Nation speeches –
they are a litany of numbers. For Umeme, it
also failed to appreciate that success would
attract other interested companies to take
the concession from them. These could
be the ones who have formed behind-the-
scenes lobbyists against Umeme.
Uganda’s electricity distribution market
is a far cry from 2002 when government
advertised to privatise it, thanks to Umeme.
When government invited expressions of
interest, six international firms responded.
After doing due-diligence, all of them
refused to invest. Only the Commonwealth
Development Corporation, a British govern-
ment parastatal, had the courtesy to reply
government of Uganda, stating the reasons
why it was not worth anyone’s while to
take over the country’s distribution busi-
ness. Government invited them on bended
knee. Many of the provisions in the conces-
sion that some people find obnoxious were
March 30 - April 05 2018
Opinion
informed by our nation’s high-risk profile
at the time.
Having fed Uganda’s cow, and now it is
glittering before any investor, our country
has forgotten where Umeme dragged it
from. Ugandans now think UEDCL was
doing a great job. The past always looks
rosy as I meet many Ugandans online who
even argue that Idi Amin presided over
a golden period of Uganda’s economic
growth and Museveni is presiding over
economic retrogression. In many ways,
Museveni’s letter on Umeme is a triumph of
his opponent’s approach to public policy –
rely on emotions not facts.
Umeme should always remember that
they are a monopoly providing a service
critical to their customers. If I am angry
with Airtel, I can shift to Africell or MTN.
If DFCU Bank gives me a bad service, as
they are doing now, I shift to Stanbic and
Barclays.
Umeme has a guaranteed ROI of 20%.
This is both good and bad. It is good in the
sense that as long as they perform and meet
or exceed their targets in loss reduction and
operational costs, they earn the 20% or even
more. It is bad in that should they fail to
achieve the set target, their ROI would be
lower. This is a win-win deal for everyone –
consumers, taxpayers and government.
Finally, Museveni complains that it is
Umeme’s ROI that has led to a high tariff.
Previously he has said it is Bujagali. Yet
Umeme’s ROI has very little influence on
the tariff. Last year its total revenue was
Shs1.6 trillion of which Shs 1.2 trillion was
paid to Uganda Electricity Transmission
Company Limited. This means Umeme
contributes only 25% to the tariff. The
real cost is with the policy government of
Uganda has adopted on power.
Government can decide – like the one
in Ethiopia did – to treat electricity as a
public good for environmental or indus-
trial reasons or both and make it free
or heavily subsidise it. But this would
require it to abandon its other priorities
such as road building, free education/
health and increases in salaries of govern-
ment employees. However, this is a bigger
debate to exhaust here so we reserve it for
another day.
amwenda@independent.co.ug
9
cover story
Mutebile Vs Kasekende
Details of Museveni meeting
Blow-by-blow account of
fight wrecking central Bank
E
By Haggai Matsiko
mmanuel Tumusiime Mute-
bile, 69, the Governor and his
Deputy, Louis Kasekende, 59,
have until recently been seen as
major pillars of Bank of Uganda
(BoU).
One has been credited for building the
foundations upon which the other was sup-
posed to continue pushing sound policy for
the country’s economy. But the two are now
involved in a perilous fight that is wrecking
the institution with major implications for
the economy.
The fight has become so intense that
President Yoweri Museveni was on March
26 forced to call a meeting of the feuding
camps and crack the whip.
The Independent has learnt from sources
10 March 30 - April 05 2018
at parliament that the meeting, which
started at 3pm at State House Entebbe was
attended by Mutebile, Kasekende, for-
mer BoU Executive Director Supervision
Justine Bagyenda, the Inspector General
of Government (IGG), Irene Mulyagonja,
and a few members of the parliamentary
committee Committee on Commissions,
Statutory Authorities and State Enterprises
(COSASE).
“I hear Bagyenda does not want to go,”
Museveni reportedly said with his char-
acteristic laugh even before the meeting
started. That set the tone for the meeting.
Museveni then warned the officials that
he was tired of seeing BoU matters in the
press.
Until the meeting, it appeared that the
IGG might launch an investigation into BoU
with Kasekende as a key witness regarding
recent job reshuffles Mutebile made that
have shaken the bank at its core.
The reshuffle, which affected over 50 top
officials of the Bank, including nine execu-
tive directors, 13 directors and 24 assistant
directors, followed a host of internal scan-
dals at the bank.
The most controversial was the takeover
and sale of Crane Bank to DFCU Bank. But
there are bungled recruitments, collapse of
critical banking sector systems, suspicions
of officials colluding with private banks that
were allegedly costing the bank billions and
undermining its roles, bungled procure-
ments, corruption cases, and mismanage-
ment.
Now, however, the any IGG investigation
might either take a different course or not
 cover story
happen at all. IGG could not have picked a better fullback things once Mutebile was out.
Sources who attended the Museveni meet- in the fight against Mutebile. As deputy governor, Kasekende was
ing say he poured ice on it. At one point, he At the bank, two facts have been a public directly in charge of recruitment together
reportedly, turned to Mulyagonja and asked: secret; one that Kasekende had been recalled with the executive director administration.
“I thought transfers were internal matters of from a top job at the African Development As a result, the deputy governor had over
an institution, why are you interfering?” Bank (ADB) with a promise that he would the years recruited many top, mid-level,
Mulyagonja said she had received several succeed Mutebile, and two that in the transi- and even junior staff. Some of these are his
complaints including from “a senior credible tion planned by Kasekende, he would be the friends and a few with family ties to him. His
person” who she was willing to disclose only Governor and Bagyenda his deputy. last recruitment last year was intended to
privately to the President. Indeed, every time he travelled and he did fill positions in the departments of pensions,
People who attended the meeting travel often, he left Bagyenda as the acting internal audit, communication and agricul-
assumed Kasekende is the person Muly- DG. Between January 2016 and March 2017, ture credit schemes (ACS), among others. It
agonja spoke about. This is partly because, for instance, Kasekende travelled 23 times sparked major trouble and led to the current
The Independent has learnt from sources at on average for a week. Over the same time, saga.
the IGG's office that although Mutebile has Bagyenda travelled 19 times. But every time Amongst previous recruits, sources
indicated the IGG cannot interfere in BoU Kasekende was out of office, he left Bagy- who spoke to The Independent mentioned
affair due to constitutional protection of enda in acting DG position. names like Benedict Sekabila, Henry Tamale,
central bank independence, Mulyagonja on Bagyenda is said to have worked closely Stephen Sendikadiwa Mwebe, Muwanga
March 16 summoned top managers of the with Kasekende on one of the most contro- Lumala, and David Kalyango, who was
central bank; Louis Kasekende, Executive versial transactions BoU has ever undertak- controversially promoted to Executive Direc-
Director Administration Solomon Oketcho en; the take over and sale of Crane Bank. tor Finance. Others mentioned are Stephen
and the Bank Secretary, Susan Kanyemibwa Kasekende reportedly signed off the cen- Mulema, who was recruited from ADB
and some board members. It is not clear how tral bank’s capital injection into Crane Bank in 2012 as a consultant Financial Markets
they have responded to the summons. But before it was sold off. Department and despite being a consultant
it is the inclusion of Kasekende that raised But insiders say Bagyenda, who oversaw was offered terms for permanent staff. Oth-
major questions at the bank. ers include; Solomon
Until now Kasekende has Kavuma, a Deputy Direc-
remained largely silent as tor Financial Markets
Mutebile appeared to be deal- and Phillip Walulya, the
ing with intransigency from Executive Director Opera-
Bagyenda. However, insid- tions, among others. Many
ers now say Kasekende has of these were picked by
been at the centre of the fight, Kasekende and placed in
which has reduced the bank’s strategic positions.
topmost leadership into eating While those who Kasek-
each other like grasshoppers ende gave juicy positions
suffocating in a polythene bag. Justine Bagyenda were happy, others who
Sudhir Ruparelia Keith Muhakanizi
Kasekende, as a deputy lost jobs were unhappy.
governor, has been expected to They accused him of tribal-
stand with Mutebile, whose health has been the transaction, tightly guarded its secrets to ism and favouritism.
shaky for years. Now, however, as Mutebile an extent that her immediate team was kept Unfortunately, as happens in many
struggles to ward off the IGG, sources in the in the dark. appointments, some of Kasekende’s choices
bank claim he can no longer count on Kasek- Many at the bank say the recent leaking were not always the best, sources say.
ende. If Kasekende is seen to cooperate with of the sale agreement has shone light on the In one eye-opening case, Ellyn I. Gre-
the IGG, it will be a major sign. nature of the transaction, which has forced enwald, an advisor to BoU from the U.S.
But when Mutebile got a turn to speak, many at the bank to admit that even if Crane Department of the Treasury, indicated to
he said he initially responded to the IGG’s Bank had over years had issues, the way it Mutebile in a memo that two bank officials,
letter in the hope that she would at most was taken over and sold is “heavily suspi- one at the level of Director lacked “the
investigate issues surrounding the reshuffles. cious”. understanding and the ability to grasp basic
He said he was taken aback when the IGG, It now looks to have cost BoU about concepts”.
in later correspondences, appeared to have Shs500 billion, of which some Shs300 billion This is after several cases of botched up
already formed opinions. He said the IGG could be lost. It has also locked the central procurements and collapse of systems right
correspondence led him respond the way he bank up in costly litigation, and damaged its under their nose.
did - defiantly. reputation for monetary integrity. In another case, the bank governor sus-
One official says owing to the manner in pended a scheme led by Kasekende’s team,
Kasekende exposed? which the deal was handled, Bagyenda had which was aimed at showering up the
Throughout the meeting, Kasekende was months fallen out with some members of her bank’s foreign exchange reserves but which
dead quite, a source who attended said. team. But more than anything else, the deal had been undermined by officials who were
Another said he was ignored. led to a major fall-out between Bagyenda leaking information to international private
Shining the spotlight on Kasekende in and Mutebile. banks. The net effect was that the private
this saga is based on his known closeness to Indeed, while she was set to retire in June banks were making billions of shillings at
Bagyenda whose removal in the reshuffle led this year having spent 30 years at the bank; the expense of the taxpayer and the central
the IGG to intervene. all of them in supervision, Mutebile replaced bank was failing to control the depreciation
The IGG’s entry into the saga set her on a her in a controversial reshuffle. of the shilling. At the time, Stephen Mulema
collision path with Mutebile. The governor was the Director Financial Markets and a
has indicated that he will not cooperate with Mutebile scuttles Kasekende’s plan member of the Financial Markets subcom-
the IGG. Apart from Bagyenda, insiders say, Kas- mittee, which would sit every day from
And if Kasekende is confirmed to be at the ekende has over the years used his position 9:30-10:00 AM to make decisions about
centre of the revolt against Mutebile; then to build a team with which he would run how to intervene in the financial markets.

March 30 - April 05 2018 11

cover story
Other members included; Bagyenda, Adam
Mugume, the director research, Walulya, the
executive director operations, Sendikadiwa,
the director IT, Charles Owiny, the director
payments, technical staff, among others.
Kasekende would chair the meetings.
All these revelations are contained in
several memos, letters and reports that The
Independent has relied on for this investiga-
tion. Then mid-last year some unhappy staff
raised concerns about several Kasekende
appointments and petitioned Mutebile and
the board of directors. While the board,
which had participated in interviewing
these appointees, ignored the complaints,
Mutebile paid attention, ordered an inves-
tigation, and on the basis of its conclusions,
cancelled some appointments.
Mutebile appears to have scuttled plans
by transferring officials Kasekende had
placed in key positions.
Mutebile resisted
But unlike Kasekende who always
ensured he worked hand in glove with the
bank board to effect his changes, Mutebile
appears to prefer the lone ranger approach.
And it appears to be costing him.
The Independent has learnt that Mutebile
appears to have first faced resistance when
on July 28 last year, he wrote to the Execu-
tive Director Administration (EDA), Oke-
tcho, asking him to propose a rotation and
transfer schedule for all staff from the rank
of Assistant Director to Executive Directors
by August 4, 2017.
Pointedly Mutebile wrote: “Please note
that in future, the transfer and rotation of
staff in the category mentioned above shall
be approved by me.” He copied in Kasek-
ende.
Insiders say by this directive, the gover-
nor had cut off Kasekende who had been
overseeing the rotations while working with
the EDA.
However, by August 04 – the deadline
Mutebile had set - the EDA had not replied
or acted. He replied on September 06, 2017.
In his reply, Oketcho proposed rotation
and transfer of staff for Assistant Director
and Director only. He attached a list of only
22 staff. But even amongst these, Oketcho
proposed that many are not transferrable
because either they had been in the position
for “below five years” or there was “no one
to swap with”. He also noted the “on-going
Crane Bank issues” and “newly transferred”
officers.
On the top most rung - of executive
directors; the EDA wrote: “It is proposed
that the transfer of Executive Directors be
stayed because of the on-going Crane Bank
legal issues; transfers affecting this category
might be misinterpreted.”
In effect, insiders say, Oketcho proposed
no changes at all. Some insiders saw this
as a move intended to keep people in cer-
tain jobs. A similar incident happened in
November last year.
12 March 30 - April 05 2018
This time Mutebile declined to ratify
the appointment of assistant directors and
instead directed that the Internal Audit
investigate the entire process.
The Chief Internal Auditor, Deborah
Kabahweza; now Executive Director
Finance, concluded that the process had
issues and called for its termination.
But the EDA Oketcho insisted that Mute-
bile ignores Kabahweza’s recommendations
and approves the appointments. Mutebile
refused.
“We have to respect internal audit and
cancel,” Mutebile insisted.
When board members were engaged,
some suggested that since their term was
about to expire, the Kasekende appoint-
ments should be passed for now.
But Mutebile stuck to his guns.
“Yes, you are going,” the governor, who
chairs the board said, “there will be another
board after you.”
Secretary to the Treasury, Keith
Muhakanizi, is said to be the only board
member who agreed with Mutebile that if
there were issues with appointments, the
process needed to be investigated.
Shortly after this Mutebile’s health deteri-
orated and he travelled abroad on sick leave.
When he returned, he found a tonne of
complaints about several appointments. The
board had been petitioned but had ignored
the complaints. Mutebile was concerned
that he had not been consulted.
In the meantime, the bank was in a crisis,
it had suffered loss of confidence, Crane
Bank issues and had been facing serious
failures of systems.
Mutebile was itching to make changes,
save face, and redirect the bank.
It was not only him. The Independent has
learnt that in one of the board meetings, one
of the board members, lashed out at Kasek-
ende directly.
“Why are you protecting criminals?” the
board member asked.
But that would be his last board meeting.
He was dropped from the board. His crit-
ics said he was senile. Insiders said he was
eliminated for fighting the status quo. He is
the only board member who was not reap-
pointed.
Still, Mutebile went to work with a team
of allies at the bank. They put together a list
of transfers. The changes were kept a top-
most secret.
Many at the bank had not expected him
to return from sick leave abroad with the
energy he did mid-January. And on Feb.7,
he unleashed the memo with the proposed
transfers.
Tempers flared. Many were caught off
guard. For instance, Bagyenda had been on
leave when the changes were announced.
She confronted the Governor about why he
had fired her immediately she returned to
office.
Frustrated, she teamed up with other
affected officials and petitioned the IGG.
Board backs Kasekende
Kasekende reportedly saw the Mutebile
reshuffle as a slap in his face and elected to
fight back—albeit clandestinely. He started
with the board. Unlike Mutebile, Kasekende
is a great lobbyist—makes time to sell his
pitches to the board before hand by meeting
them individually before a meeting.
It was not surprising, therefore, that the
day the new board was meeting for the first
time in February, they once again did not
appear on the same side with Mutebile and
advised him to reconsider the transfers.
While there have been tensions between
Mutebile and Kasekende, the transfers were
the high watermark of the complete collapse
of their relationship. In the reshuffle, many
saw Mutebile attempting to take charge of
the bank again—taking it back from Kasek-
ende. For Kasekende, the reshuffle appeared
scuttling what had been built over the years,
insiders say.
Several officials at the bank intimated to
The Independent that from Mutebile’s per-
spective, the reshuffle was aimed at return-
ing sanity at the central bank after it became
clear that international advisors and the
public were losing confidence in the bank.
The two men had worked together fairly
well until 2015 when Mutebile’s contract
was renewed.
The renewal was a major blow to Kasek-
ende. At the time, Kasekende was almost
certain of being appointed and Mutebile
possibly did not like knowing that Kas-
ekende was waiting for his job. This had
strained the relationship of the two men.
Fortunately for Mutebile, politics came to his
rescue. With Amama Mbabazi contesting
against Museveni, President Museveni fig-
ured dropping Mutebile, who comes from
Kigezi region could cost him the Kigezi
vote. He consulted about whether he could
appoint him for only two years—until after
the election—but was told it had to be five
years. That is how Mutebile got a renewal
for another five years and Kasekende lost.
Insiders say since then, the bank has been
divided into two major camps—the Kasek-
ende camp looking to eject Mutebile and the
Mutebile camp looking to defend the gover-
nor at whatever cost.
The divisions mean that promotions are
sometimes based on loyalty and not com-
petence, and decision-making is impaired.
Mutebile sought to reverse this trend with
the latest reshuffles especially having seen
how the trend has reportedly cost the tax-
payer billions of shillings. The biggest dam-
age, however, might be that the fight is fur-
ther eroding investor and public confidence
in the bank and the economy as a whole.
At the March 26 meeting, Museveni
advised the BoU bosses to form a com-
mittee to resolve the issues. For some of
them, like Bagyenda, the meeting possibly
cemented their departure. But for others,
like Kasekende, it remains unclear how
the dice will fall.

President Museveni (C) and President Kagame during the meeting at State House, Entebbe.   PPU PHOTO
Kagame’s Kampala visit
Meeting raises hope for improved relations
between Kampala and Kigali
By Ronald Musoke
A
recent one-day state visit
by Rwandan President
Paul Kagame to Uganda
on March.25 has raised
hopes that relations between the two
countries might return to normalcy
again after several months of
heightened tensions.
Kagame, who was accompanied
by the Minister of Foreign Affairs,
Cooperation and East African
Community and other officials, met
President Yoweri Museveni at State
House, Entebbe.
The meeting has been seen as a
major diplomatic relief to the two
countries, which have the closest
historical ties in the region that make
them strategic security and trade
partners.
Rwanda is Uganda’s third largest
market in the region after Kenya
and DR Congo. In 2016, for instance,
Uganda exported goods worth $ 226m
to Rwanda and imported goods worth
$ 12m from Rwanda, according to the
Uganda Bureau of Statistics (UBOS).
Kenya, the biggest economy in the
region, exported goods worth $485m
to Uganda and imported $483m
from Uganda. Even though Uganda
made more money from Kenya than
Rwanda, Uganda has a better balance
of trade with Rwanda, which makes it
more strategic.
Indeed, more people cross from
Uganda to Rwanda and viceversa
than from any other country in the
region. Rwanda also brings the biggest
percentage of tourists into Uganda,
according to UBOS statistics.
Despite these ties, Kampala and
Kigali had for months been drifting
apart. On Dec.29, last year, the
Rwandan government, through
its foreign affairs ministry, wrote
a protest note to the Ugandan
government condemning what it
called ‘multiple unjustified arrests”
of its citizens in Uganda without
March 30 - April 05 2018
rwanda
informing its High Commission in
Kampala.
This followed the arrest and
deportation of five Rwandans living
in Uganda through Katuna border
post on Dec.28. No reason was given
for the deportation executed by the
Immigration Directorate.
When The Independent early this
year interviewed Maj. Gen. (Rtd)
Frank Mugambage, the Rwandan
High Commissioner to Uganda, he
said that over the years, Rwanda and
Uganda have developed mechanisms,
including a memorandum of
understanding and a Joint Permanent
Commission headed by the two states’
ministries of foreign affairs.
“These frameworks were put up
to solve challenges that often come
up between countries. But even with
these mechanisms, the Rwandan
government has been surprised by the
illegal and unjust arrests of Rwandans
in Uganda,” Mugambage told The
Independent.
13
rwanda
“We only discover that those
behind the arrests are agents of
the Ugandan state because we find
information from those arrested that
they have been held by institutions of
the Ugandan state—particularly the
Chieftaincy of Military Intelligence
(CMI).”
He said all the arrests were
happening outside the formal
arrangements that were put in place
to deal with issues like this. That is
why, he said, in our effort to build
relations, we demand explanations so
that these issues do not interfere with
the positive things that we are doing
together.
Uganda was accusing Rwandan
intelligence services of infiltrating
Uganda’s security services especially
the police and using them to kidnap
Rwandan refugees and forcefully
taking them back to Rwanda.
Rwanda, on the other hand, was
accusing Uganda of planning regime
change, a charge Kagame bluntly put
before Uganda’s minister of foreign
affairs, Sam Kutesa, when Museveni President Museveni consults with President Kagame during a press conference at State
sent him to Kigali as a special envoy at House, Entebbe.   PPU PHOTO
the beginning of this year.
Sources say that after Kutesa’s visit iron out a number of issues said to be (Cyril) Ramaphosa and action was
to Kigali, Uganda’s foreign minister affecting the two states. taken. People and countries involved
advised Museveni to meet Kagame The official statement from State in such matters, must work closely,”
in a neutral country. Museveni then House after the meeting said the he said.
called Kagame and arranged for a Rwandan leader was in Uganda to Museveni also said that it was
meeting in Addis Ababa. brief Museveni on the recent AU deal beneficial for Rwanda and Uganda to
Kagame and Museveni met in Addis in Kigali, a development, which paves cooperate in other areas like trade and
Ababa on Jan. 29 but sources close the way for the creation of one African infrastructural development as a way
to both presidents say the meeting market. of fostering Uganda-Rwanda relations.
between Museveni and Kagame in The statement said the two “Rwanda has gas; we have iron ore.
Addis Ababa did not achieve much. presidents also discussed other issues Why should we import steel from
Later, many speculated worsening including the railway line works, Singapore? The Ministry of Planning
tensions were the reason President electricity supply, airline operations should consider developing such a
Kagame did not attend the East and security between the two project with Rwanda,” he said.
African Heads of State Summit held in countries and the region. On allegations that Ugandans in
Kampala on Feb. 22 to raise funds for Hours later, the presidents Rwanda were losing job contracts,
health and infrastructure projects. But addressed a joint news conference. President Kagame said the concerned
insiders say President Kagame had President Museveni stressed the need institutions in both countries should
state guests at home. for close cooperation between the get to the bottom of the matter because
A month later, President Museveni two countries’ intelligence services some issues were reported out of
also called off his trip to Kigali, where “in order to get facts and secure the context.
he was scheduled to attend and sign region.” Both Kagame and Museveni also
the African Continental Free Trade Museveni told the media that he agreed that the Joint Permanent
Area treaty on March 21. Reports and Kagame had agreed to have Commission (JPC) between the
indicated that the cancellation was in Ugandan and Rwandan intelligence two countries provides a good
reaction to a disagreement between services forge a close cooperation. The mechanism for discussing matters of
Museveni’s advance protocol team cooperation, Museveni noted, should mutual interest and strengthening
with the security team in Kigali. not only be on security matters but cooperation. They therefore directed
Again, observers concluded that also development. their Ministers responsible for Foreign
the tensions were getting worse. Museveni said there was no Affairs to convene the next JPC within
Kagame’s visit on March 25, which fundamental conflict between Rwanda three months
came days after the Africa Summit in and Uganda adding that security Following the visit, President
Kigali, appears to have changed that agencies of the two countries must Kagame also extended an invitation to
impression. cooperate and make use of technology President Museveni to visit Rwanda at
Out of the media glare, on March.25 to solve security matters. a date to be communicated later. Many
at 11:30am, the two presidents “A girl was recently kidnapped and hope that these visits could mark a
immediately got busy as they held a killed and the suspect was in South return to normalcy in the bilateral
closed-door meeting at State House to Africa. I personally called President relations of the two countries.

14 March 30 - April 05 2018

 advertorial

NFC: boosting community

livelihood, environmental
conservation
Rwanda will celebrate world forestry day on 21st March at Rubavu district southern
province. The annual celebration seeks to deepen planting activities and raising awareness
among the communities in villages and young people around. The theme of the day is
dubbed “forestry and sustainable cities”. New Forests Company, CEO, Dube Simbarashe
explains more about the celebration of the day, role of the private investors in eradicating
environmental degradation and many more others in an interview with the Independent
Magazine Francis Byaruhanga. Below are excerpts

sible ministries and agencies like Ministry of
Lands and forestry, Rwanda environmental
management and many others to celebrate
the forestry day on 21st as we plant trees at
Rubavu where the event will take place and
raising awareness on benefits of forests in
the area.   scheme with almost 110 poles of electricity
 Today the New Forest Company is man-
aging an area of 10,046 hectares around
Nyungwe National Park with a planted
area of 8,215 hectares of which 65% is
pine, 15% eucalyptus and 20% other spic-
es. How are you exploiting this to make
sure that communities benefit from this?
The project did not impact the livelihoods
by providing employment opportunities
in the area only but as well as providing
7,000,000 tree seedlings that was distributed
to 35,000 out growers and hired a full time
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being provided in community neighboring
our timber processes factory in Nyamagabe
and Nyanza in Busasamana sector.
NFC has so far spent $450,000 on com-
munity projects; executed ten clean water
projects in communities around the forest;
built four classroom blocks; established 150
beehives in various cooperatives and sup-

N
What does NFC do?
ew Forests Company is a socially
responsible forestry and timber
Production Company intended
to exploit the opportunities of
forestry in Rwanda brought in the country
in 2011.   Nyamagabe,Rusizi,Nyamasheke. With the
What is your role as stakeholders on the
celebration of the forestry day?
We are scheduled to join with the respon-
 Job creation has been established and
skills development as well as poverty
alleviation among our neighbors as we
employ almost 350 people around the
Nyungwe Forest that straddles across three
districts sorrounding the area inclusive
doubling of production and value addition,
these numbers will definitely double, ben-
efiting communities living around the
forests.
ported third parties that grow seedlings for
the company.
NFC gives seedlings to farmers at no
cost to grow wood-lots, makes follow ups
to check on performance of the trees and
advice farmers when it’s time to thin &
prune.
NFC has, to date, distributed more than
350,000 seedlings for over 250 hectares to
private growers. 

Replanted eucalyptus in Nyungwe Buffer Zone

(Nyamagabe district) after harvesting

March 30 - April 05 2018 15

advertorial
In the past, treated poles were
imported as final product from
Uganda or shipped in from as
far as South Africa? What is the
situation now?
Today, 100% value addition
is done in Rwanda and on the
affordable prices where 1 electri-
cal pole is sold locally on 40,000
frw which could be bought on
60,000frw when it is exported.
What inspired you to extend
the rare business of ‘forestry’ in
Rwanda?
NFC started in 2004 in South
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and Rwanda signing a concession
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on the country mostly struck with
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ronmental degradation to solve
search issues.
The erosion and landslides
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inspired me to address those
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would reduce on the soil ero-
sion as a result the business was
extended to Rwanda.
NFC parent offices is based
in Johannesburg and currently
operating in the East African
countries of Uganda, Tanzania
and Rwanda and the company
spent considerable effort and
time building good working rela-
tionships with the governments
of these countries in order to
build a business that will endure
and meet East Africa’s economic
development goals.
According to the Rwanda state
of environment and outlook
report indicates that the country
loses 1.4 million tons of soil
annually causing a persistent
decline in the country’s capac-
ity to feed 40,000 citizens such
losses adversely affect both the
economy and the environment?
What are you doing to mitigate
the situation?
We are trying to plant many
trees for us to be able to reduce
soil erosion planting 2,800,000
cubic meters area which are more
genetically superior species. We
make sure that the biological
approaches such as planting
grass strips and hedgerows are
16 March 30 - April 05 2018
introduced as complementary
methods of reducing soil loss.
We are afforesting Rwanda
with the new planting activities
in districts of Nyamagabe and
Nyanza with the plans to take it
to the north parts where the soil
erosion is more rampant. We are
moved on tripartite principles of
people, planet and profits mean-
ing that you cannot be sustain-
able if you focus on the planet
and forget the people as well
profits that will move the project.
The company is also involving
Preparing a nursery bed for different types of trees
in an increasing non-agricultural
activities which has impact on the
communities as well as support-
ing local communities in building
schools, beekeeping projects,
among other communally owned
projects.
 What are you doing at the same
time to mitigate the climate
change as a result of the environ-
mental degradation?
One of the biggest impacts we
verified this year was an external
carbon audit that proved we have
removed more than 1.2 million
metric tons of carbon dioxide
from the atmosphere in the last Water fountains constructed in Gitwe and Kagarama cells last year
three years we have spent in
Rwanda, Tanzania and Uganda.
 One point two million tons of
C02 removal is no small feat. This
reduction is equal to the small
emissions of the 183,000 Europe-
ans or 249, 9000 vehicles on the
road. We are very proud of this
and excited to find ways financial
year 2018 of turning this success
into another revenue stream to
underpin our commercial model.
 What are the major challenges
in the afforestation projects?
The major challenges are the
errant markets where there is vul- Public water point constructed in Kabingo model villaje in Kagarama cell
nerable to the swings and upsets
of weak policy and regulatory
environments, infrastructural
targets, efficiency in executing the
strategic developments in rural
electrification and timber theft
since our companies are based in
rural areas.
What are the future plans?
In our programs we are look-
ing forward to see that continu-
ally there is an innovation on the
market pushing forward the
impact side of our business mak-
ing sure that measurements are
laid in maximizing the environ- Wooden Pole plant preparation site
ment and social impact.

Prime Minister Ruhakana Rugunda after commissioning the WRI in Entebbe on March 21.  Independent/ jimmy siya
Saving water and environment
Directorate of Water Resources hosts
first Water and Environment week
By Julius Businge
F
or one week in mid-March, the
grounds of the Directorate of
Water Resources Management in
Entebbe was a beehive of activity
as ordinary people mingled with water
professional and experts to mull over the
state of Uganda’s water.
It was the first ever `Uganda Water
and Environment Week’ designed to find
answers to one fundamental question:
How could Uganda best protect its water
and environment resources which are
dwindling?
Discussing water scarcity on the cool
shores of Lake Victoria; one of biggest
sources of fresh water in the world would
have been totally odd to most attendees of
the event.
Officials from the government, non-
governmental organisations, academia,
farmers, researchers, private sector and
more took part in the event where over
100 key sector institutions showcased their
work.
As they milled around the
exhibition stands set up by top water
and environment sector companies,
organisations, and agencies in a sea of
white tents on the directorate lawn on the
cool edge of Lake Victoria, not many of the
visitors might have imagined how urgent
the problem is.
Joseph Oriono Eyatu, an engineer who is
the commissioner for Rural Water Supply
and Sanitation in the Directorate is one
of the few professionals and experts who
understand the gravity of the issue. He
told The Independent that about 20 years
ago, Uganda got 63billion cubic litres of
renewable water – that is water injected
into its flowing rivers and underground
aquifers from rainfall. But because of
poor handling and use of water and the
March 30 - April 05 2018
news analysis
environment, Eyatu says such renewable
water has declined to around 43billion
cubic litres. That is a 30% loss of all water
in 20 years.
“Rapid population growth is putting
pressure on the resource,” he said, and
yet the government is making very little
investment in the sector.”
Eyatu explained that the sector needs
about Shs7 trillion annually to finance
its activities but out of the Shs 29 trillion
national budget for the 2017/18 financial
year, the sector was allocated only Shs713
billion. Incidentally, this is slightly higher
than the Shs632 billion allocated to it in
FY2016/2017.
“The money we get is not adequate,”
Eyatu said, ““Every year, we are adding
1300 water point sources but still we are
not able to match the demands of the
growing population.”
Eyatu explained that to compound the
problem, even the little money often arrive
17
news analysis
late. To him this shows that although water
and environment is an important sector
in Uganda as it powers people’s lives,
businesses, and the economy, it seems not
to be among the top government priorities.
Eyatu says this funding gap has left the
sector facing several challenges including
encroachment on protected water areas,
illegal destruction of forest cover, and
corruption. The sector also cannot come up
with innovations or hire adequate staff.
Eyatu said the Water and Environment
Week was the Ministry of Water and
Environment’s way of attempting to
deal with these challenges. The event
was intended to raise awareness on
Joseph Niwagaba, the commercial officer at NWSC- Entebbe branch demonstrates a simple
biogas system that would generate electricity.   Independent/Jimmy Siya.
the best practices in protecting water
and environment resources and expose
innovations.
Experts are worried that limited
financing of the sector might cause
Uganda not to meet the United Nation’s
Sustainable Development Goal Number
Six (SDG6) on sustainable management of
water resources and access to safe water
and sanitation. These are considered
essential for supporting existing
investments and unlocking economic
growth and productivity.
“There is nothing you can do that
affects growth without water,” Eyatu says.
He named urbanisation, industrialisation,
domestic water and sanitation, works
and transport, education, health, and
agriculture.
Water Institute launched
Prime Minister Ruhakana Rugunda who
addressed participants at the event said the
18 March 30 - April 05 2018
government’s National Development Plan
II prioritises investment in many sectors
that require good water and environment
practices to yield tangible results. He
named the National Irrigation Policy in
agriculture, and other investments in oil
and gas, and mineral exploitation.
Rugunda also launched the Water
Resources Institute (WRI) which was one
of the major highlights of the six- day
event.
The WRI is an addition to the sections of
the directorate. It is part of reforms aimed
at promoting research and innovation
to deal with negative repercussions
of pollution, climate variability, and
dwindling water supply. Rugunda
described the institute as an ‘important
milestone’ and pledged the government’s
support for it.
The long term plan is for WRI to derive
resources by offering consultancy services,
accessing long term public funds from
government, fees and levies and setting up
a research fund.
But Ministry of Water and Environment
officials said that in the short to medium
term, the WRI will be funded through
available resources under the ministry,
partnerships with academic institutions
and other relevant agencies, and support
from development partners.
The Institute’s current financial
requirements in the short term (2-3 years)
are Shs16.3 billion, for the medium term (4
-7 years), it will be Shs 18.4 billion while in
the long term (7-10 years) Shs26.2 billion
will be needed.
Edward Kirumira, the Principle of the
College of Humanities and Social Sciences
at Makerere University, who was the
keynote speaker at the event said water
and environment are critical enablers and
indeed drivers in the three key areas for
ensuring Uganda’s development targets;
namely demographic transition, income
growth acceleration, and exchange rate
movements.
He said the government and other sector
players need to think, work together,
and act on having high quality water and
safe environment to drive the country’s
expenditure patterns downwards.
His address was titled; Uganda’s move
to middle income status; potential role of
the Water Resources Institute which he
related to the theme of the event which
was “Water and Environment, a catalyst
for achieving middle income status 2020”.
He said, hopefully, achieving the middle
income status in Uganda would not come
about “because some few people have
been incredibly richer and not necessarily
because the majority of Ugandans are less
poor”.
Successful water week
The event was so successful that some
participants are already looking forward to
the next one in 2019.
“We are looking forward to taking part
in similar events in the future,” said Daniel
Ssemaganda, the Water, Sanitation, and
Hygiene (WASH) officer at Fields of Life, a
regional NGO involved in building water
infrastructure for vulnerable communities
in Uganda.
He said the event had linked them to
new partners and helped them share
success stories of their work to the general
population.
He said their goal is to show how they
support and complement government
work and share their future plans.
He described how over the years, they
have constructed 661 boreholes for 72
households serving mainly people in the
war-torn Northern Uganda region.
“The exhibition is so far so good, and
we are very delighted to be part of it,”
said Joseph Niwagaba, the Commercial
Officer at National Water and Sewerage
Corporation - Entebbe Branch.
He told The Independent that they
were taking part in the event to showcase
innovations they have, including making
biogas to generate electricity.
“We are impressed with the questions
people are asking us,” said Janet Akello
from the National Meteorological Training
School. They exhibited and shared
information on weather and climate
information and equipment – the kind of
things people hear about but never see
physically.
“We hope to be part of this event in the
future,” she said.

Freight trucks packed at Malaba Border Post await clearance to enter Uganda from Kenya. The ACFTA seeks
to abolish such tedious processes to ease trade across the continent.  INDEPENDENT/JIMMY SIYA
Africa’s ambitious trade treaty
Beyond the clapping and ululation in
Kigali, can the ACFTA be implemented?
By Ronald Musoke
A
fter close to 30 years of negotiations,
44 African states finally agreed to
establish a single market to ease
buying and selling of African-made
goods and services. That leaves out 11 coun-
tries; including the two biggest economies
– Nigeria and South Africa. But that has not
stopped the plaudits from flowing.
Michael Kottoh, the Chief Strategist at the
AfroChampions Initiative, a continental plat-
form whose membership comprises CEOs
of Africa’s leading corporations told the
Chinese broadcaster, CGTN, on March 21
that the fact that African countries have been
able to move ahead despite all the growing
protectionism and dissatisfaction around the
world is a big statement.
“Despite the pessimism around the world,
the signing ceremony is something to be
optimistic about,” he said.
He said in the next 180 days, his organiza-
tion will mobilize its members to make sure
that the private sector across the continent is
solidly behind the process.
“Civil society will also be brought on
board since the ACFTA is for average Afri-
cans,” he said.
Mention of the 180 days from the date of
signing the Kigali Agreement to its ratifica-
tion in July is critical as, observers say, this
is the time for the real work on the ACFTA
to start.
Over this period, Faki Mahammat, the
Chairperson of the African Union Commis-
sion, will cautiously wait to receive news
from Abuja and Pretoria to see if Nigeria and
South Africa get on board.
Excitement about the ACFTA has already
been dampened by the cautious approach
from Africa’s two biggest economies.
Nigerian president, Muhammadu Buhari,
skipped the Kigali event altogether while
South Africa’s new president, Cyril Rama-
phosa, attended but only signed the declara-
tion that spells out the establishment of the
ACFTA. Buhari said Nigeria needs more
time for consultations.
Richard Newfarmer, the International
Growth Centre’s (IGC) country director for
Uganda and Rwanda told The Independent
that the absence of Nigeria and South Africa
from the ACFTA could reduce its ultimate
potential, and undermine their case for lead-
ership in the hemisphere.
But Sam Ohuabunwa, the former presi-
dent of the Nigeria Economic Summit Group
told CGTN, on March 21, that following the
criticisms the Nigerian government got at
home following the signing of the World
Trade Organization (WTO) agreement,
Buhari did not want to repeat mistakes of his
predecessors.
Ohuabunwa said these agreements have
implications on the local economy and gov-
ernments that sign onto something they do
not understand will be criticized at home.
news analysis
But Dr. Francis Mangeni, the director of
Trade, Customs and Monetary Affairs at the
Common Market for Eastern and Southern
Africa (COMESA) told The Independent that
Nigeria and South Africa did not say they
would never sign the ACFTA Agreement.
“Once the private sector is properly edu-
cated about the safeguards and flexibilities in
the ACFTA Agreement, to ensure their sur-
vival, Nigeria is likely to come forward and
join,” he said, “South Africa is only waiting
for legal scrubbing of the Annexes on trade
in goods, which can be accomplished in a
week’s meeting.”
Mangeni called the signing of the ACFTA
a “big milestone for Africa.”
“It is equivalent to the formation of the
Organization of African Unity on 25 May
1963 which provided the institutional frame-
work for the decolonization struggle which
was finally accomplished in 1990 with the
independence of Namibia,” he told The Inde-
pendent in an email on March 25.
“It is also equivalent to the formation of
the African Union in 2000, which has since
seen a much stronger, united, organized,
articulate, forward-looking and activist
Africa on the international stage.”
“Travelling, trading and investing in Afri-
ca are a nightmare for Africans,” Mangeni
told The Independent.
Newfarmer also told The Independent
in an email that ACFTA marks an
important step in the continued progress
March 30 - April 05 2018 19
news analysis
of African integration.
“ACFTA is a stellar example of impetus
toward greater integration in the South at a
time of greater dis-integration in the north-
ern rich countries,” he told The Independent.
Potential versus reality
However, Newfarmer told The Independent
that the ACFTA might soon discover that
tariff and product specific rules of origin
negotiations can take a very long time, just
like they have done in the Tripartite Free
Trade Area (TFTA of COMESA, EAC and
SADC).
The African Continental Free Trade Area
(ACFTA) agreement intends to remove non-
tariff barriers and other technical barriers
to trade, minimize customs procedures and
establish a free-flowing structure on transit
of goods from Cairo in Egypt to Cape Town
and from Mombasa in Kenya to Dakar in
Senegal.
Speaking just minutes after the signing
ceremony in the afternoon of March 21,
President Paul Kagame who also took over
the chair of the African Union told the Afri-
can leaders gathered in Kigali that ACFTA
was going to help Africa “leverage its grow-
ing strength and unity to secure her rightful
interests on the global arena.”
The signing ceremony in Rwanda was
a culmination of 27 years of negotiations.
It was with the Abuja Treaty in 1991 that a
roadmap for a continental free trade area
was first mooted. It continued through
successive efforts in regional blocs such as
the EAC, COMESA, ECOWAS, and the
Central African and Monetary Community
(CEMAC).
At its full implementation by all African
states, trade experts say, the ACFTA could
double intra-Africa trade within eight years.
The African Development Bank says the
ACFTA will stimulate intra-African trade
by up to $35 billion per year, creating a 52%
increase in trade by 2022; and a vital $10 bil-
lion decrease in imports from outside Africa.
Under the ACFTA, market liberalisation
will progressively cover 100% over a five-
year period, but with 60 to 85% of the prod-
ucts immediately liberalized at the entry into
force of the Agreement.
But Professor Jim de Melo based at the
IGC estimates that because of exemptions
and faulty implementation, trade within
regional integration agreements on average
has reached only about 60% of its potential.
He says one of the reasons is that trade
costs; delays at the border and in ports,
cabotage and licensing policies; and formal
and informal stops have kept transport costs
higher than they need to be. Road and rail
infrastructure also require more investment.
The ACFTA addresses another reason for
low trade in the region: high tariff barriers.
Tariffs between regions are still high – much
higher in Africa than in fast growing East
Asia and other developing regions. Even
within regional agreements, too frequently
20 March 30 - April 05 2018
products are exempt from the import com-
petition of neighbours.
What is it in for Uganda?
President Museveni did not travel to Kiga-
li but Sam Kuteesa, the Minister of Foreign
Affairs did and he appended his signature
on behalf of Uganda. Frank Tumwebaze, the
Minister of ICT and National Guidance had
on March 20 told journalists that Uganda
would study the key provisions in the agree-
ment.
He said Cabinet would also constitute
a committee which would discuss how
to improve Uganda’s competitiveness in
the regional economic community and the
ACFTA following ratification. So how does
Uganda benefit from this new continental
arrangement?
Isaac Shinyekwa, a research fellow at
Makerere University’s Economic Policy
Research Centre (EPRC) told The Independent
on March 23 that Uganda should benefit
Amelia Kyambadde Gideon Badagawa
from the vast African market.
Gideon Badagawa, the executive director
of the Private Sector Foundation Uganda
also told The Independent on March 24 that
Ugandan manufacturers and producers now
have a market platform beyond the EAC and
COMESA.
Badagawa said the government now
needs to work with its counterparts to invest
in a Common Infrastructure Fund to facili-
tate the building of infrastructure that link
countries to enable private sector trade and
investment across borders.
“In East Africa where we have gone
through the common market and the cus-
toms union, it is still difficult to go to Kenya
or Tanzania to establish and do business,” he
said, “So to imagine that across Africa, you
will freely move to Libya or Ethiopia to take
advantage of the ACFTA will not happen
unless certain fundamentals are out of the
way.”
Badagawa said the private sector needs
harmonizing fiscal policy, infrastructure, and
standards.
Jane Nalunga, the country director for the
Southern and Eastern Trade Negotiations
Institute (SEATINI) told The Independent on
March 24 that the signing and eventual rati-
fication of the ACFTA means Uganda’s pri-
vate sector can now trade beyond the EAC,
COMESA and SADC.
But Ambassador Nathan Irumba, who is
the regional executive director of SEATINI
and spent close to 20 years in Geneva and
New York negotiating trade agreements
on behalf of Uganda, told The Independent
on March 24 that although ACFTA has the
potential to transform many African econo-
mies; its success will depend much on how
fast the governments put up suitable infra-
structure to connect these countries.
Irumba told The Independent that many
countries around Africa have infrastructure
which tends to run to the coast as laid out
by the colonialists - to take out Africa’s raw
materials to the European market.
He also said, in all FTAs around the world,
there are winners and losers. He said, as a
result, support for such an initiative may not
be strong among people who look at the free
trade area from a losing a position.
“How do countries which are mostly ben-
eficiaries from this help the weaker ones to
deal with future tension?”Irumba says.
Faki Mahammat, the Chairperson of the
African Union Commission, appears to
have anticipated Irumba’s concerns.
“In a process as complicated as this one,
compromise is a principle with which
everyone must be imbued beyond the
debates of which African countries might
gain or lose in the short term,” he said.
Dr. Enock Nyorekwa, an economist
told The Independent that although Uganda
imports billions of dollars worth of goods
from Asia and Europe, her major trading
partners remain her neighbours in the EAC
and COMESA blocs.
For instance in 2017, Uganda exported up
to $517m worth of goods to Kenya; DR Con-
go ($459m including about $190m through
informal trade) while South Sudan bought
about $317m worth of Ugandan goods. The
total Ugandan exports to the entire region
were worth about $1.353m according to the
Bank of Uganda statistics.
Dr. Fred Muhumuza, an economist, bases
on this to say that the Kigali Agreement
does not deal with a major stumbling block
to intra-African; the non-tariff barriers. He
says, for example, African countries produce
almost the same products so there is nothing
to trade with; except food.
He described the agreement “as an inten-
tion of what might be realized.”
“But it will require a lot of work,” he said
and added that “you don’t see that African
countries can actually implement this work
plan”. Muhumuza wants Uganda to con-
centrate on the regional COMESA market.
He told The Independent that close to 70%
of Uganda’s exports go to five countries;
Kenya, South Sudan, Rwanda, DR Congo
(mainly food), and the United Arab Emirates
(mainly gold).
“So why don’t we consolidate these mar-
kets considering that we are not even satisfy-
ing these countries’ needs,” he said.
Bujagali power dam.  Independent/Jimmy Siya.

Uganda’s economy on investment management, global economy

performance.
Mutebile however, said there are some

a slow recovery path

downside risks to the projected economic
growth numbers, one of which is crowding
out of private financing and investment by
the large government borrowing aggravat-
ed by the weak structural conditions – low
returns on public capital and poor execu-
But the public debt has increased tion of investments.

by 9.4% to hit Shs 37.9trillion Declining interest rates

Meanwhile, the other highlight in the
report was the movement of interest rates
By Isaac Khisa for government paper. The average yields
on the 91-day, 182-day and 364day Trea-
Uganda’s optimism in the first quarter of the Financial Year 2017/18 has sury bills (T-bills), for instance, declined to
been replaced with fear of a slow growing economy. 8.6, 8.6 and 9.1 per cent, respectively in the
The Central Bank’s latest quarterly report dubbed ‘State of the quarter ended January 2018, relative to 9.6,
Economy’ shows that Gross Domestic Product (GDP) was slower in the 9.7, and 10.3 per cent in the quarter to Octo-
first quarter compared with the last quarter of the last financial year. ber 2017 and 14.1, 14.9 and 15.4 per cent in
the quarter to January 2017.

C
iting the estimates of the
economic activities by the
Uganda Bureau of Statistics
(UBOS), Governor, Em-
manuel T. Mutebile, said the
economy grew by 1.3 per cent
in the first quarter of the FY 2017/18, which
though is lower than 2.5 per cent in the
fourth quarter of 2016/17.
“This is consistent with estimates of the
BOU’s early warning indicator - the com-
posite index of economic activity (CIEA),
which indicates a rebound of economic
activity, driven by strong growth in indus-
trial activity,” the report reads in part.
This comes at a time the government has
also increased on the rate of borrowing,
mostly from China, to fund infrastructure
projects including roads, power plants,
fibre cable networks and an airport expan-
sion.
According to the report, public debt
stood at Shs 37.9trillion as at the end of
December compared with Shs34.4trillion in
June 2017, representing a 9.4% growth. The
external and domestic debt amounted to
Shs 25.1 trillion and Shs 12.8 trillion respec-
tively, which is an increase of 12.2 per cent
and 4.2 per cent, respectively, during the
same period under review.
The Central Bank boss said economic
growth is projected in the range of 5 – 5.5
per cent in FY 2017/18, and is forecast to
average about 6.3 per cent in the medium
to long term, supported by accommodative
monetary policy, improvement in public
Similarly, yields on the longer term
bonds also declined, with the average
yields on the 2-year, 3-year and 5-year
Treasury bonds (T-bonds) declining to 10.9,
11.3 and 12.6 per cent, respectively in the
quarter ended January 2018, from 12.2, 12.7
and 13.6 per cent in the preceding quarter.
Average yields on the 10-year and 15-year
T-bonds also declined to 14.2 and 14.4 per
cent from 14.6 and 15.1 per cent, respec-
tively over the same period.
The reduction in yield across the matu-
rity spectrum signals a reduction in earn-
ings to prospective investors as monetary
policy eases.
On Feb. 13, BoU cut the Central Bank
Rate by 0.5 percentage points to 9% as a
measure for boosting private sector credit
(PSC) uptake and economic activities.
This was in response to a decline in head-

March 30 - April 05 2018 21

business
line inflation and core inflation from 3.3%
and 3% last December to 3% and 2.6% in
January 2018, respectively.
So far, the current CBR is the lowest since
2011 when Inflation Targeting Lite (ITL)
was introduced to tame inflation that had
jumped to 30%, the highest since 1993. The
highest point, the CBR has been was 23% at
the end of 2011.
The PSC, however, remains subdued
even as the average lending rate on shilling
denominated loans eased to 20.2 per cent,
from 21.4 per cent in the preceding quarter
and 22.9 per cent in the corresponding quar-
ter of the previous year.
The risk of Non-Performing Loans
(NPLs) to PSC growth slowly moderated
following the decline in the ratio of NPLs to
5.6 per cent in December 2017, from 7.2 per
cent in the preceding quarter ended Sep-
tember 2017.
Commenting on the new report, Rama-
than Ggoobi, a senior economics lecturer
at Makerere University Business School
(MUBS) told The Independent in an inter-
view that while the declining interest rate
is good for the growth of the private sector,
the government’s increased borrowing from
the public make the entire move counter-
productive.
“There is need for government and BoU
to coordinate such that when the interest
rates are lowered, the government does not
also go to borrow from the public to finance
its various activities,” he said.
Ggoobi, however, noted that the revenue
deficit is the major reason for government’s
increased borrowing from the public to
meet its current expenditure.
Available data indicates that for the first
six months of FY2017/18, the government
revenue (including grants) amounted to
Shs 7.35trillion, which was Shs. 1.14trillion
lower than the amount programed in the
approved budget.
But Martin Okumu, the executive direc-
tor of Sapentia Professional Consultants
and the immediate former director for com-
munication at Uganda National Chamber of
Commerce and Industry (UNCCI) said the
issue of interest rates is not the reason for
low PSC uptake.
“The biggest challenge is to get the loans,
produce and sell to who? People don’t have
money,” he said. “In any case, the interest
rates being charged are still very high by
any standards.”
He said the political conflicts in South
Sudan and the eastern Democratic Republic
of Congo has reduced on the cash flow into
the economy.
Beyond Uganda
Overall, according to the report, in the
Sub-Saharan Africa, growth is estimated to
have increased to 2.7 per cent in 2017, up
from 1.4 per cent in 2016 and is projected to
improve further to 3.3 per cent and 3.5 per
22 March 30 - April 05 2018
stronger commodity prices.
The relatively lower projected growth
rates for SSA, compared to their historical
levels, is attributed to structural and politi-
cal challenges in member economies, par-
ticularly South Africa where heightened
political uncertainty weighs on confidence
and investment.
While global economic activity is pro-
jected to strengthen in 2018 and 2019, risks
to the outlook are broadly balanced in the
near term, but skewed to the downside over
the medium term.
The risks stem mainly from more rapid
and sizeable tightening of the currently
easy global financial conditions, a shift to
inward-looking tariff and trade policies and
noneconomic factors such as terrorism, geo-
political tensions, domestic political discord
and extreme weather events.
Tumusiime Mutebile
Going forward
Mutebile says PSC is expected to
strengthen on the back of the expected
increase in credit supply as banks align their
pricing behaviour to the eased monetary
policy stance, which should lower the cost
of lending to enterprises and prime borrow-
ers.
He said the demand for credit is also like-
ly to be driven by stability of the exchange
rate and improvement in the macro-eco-
nomic conditions.
“On the other hand however, banks
expect to tighten non-price terms and
conditions including, the size of the loan,
collateral requirements and maturity of the
loan as they implement stricter provisioning
standards required under the International
Financial Reporting Standard 9 and guard
against inadequate security,” he said.
Ramathan Ggoobi
The new accounting standard which
came into effect in January this year,
requires banks and any other financial
institutions to make appropriate provisions
in anticipation of future potential losses,
rather than the former practice, Interna-
tional Accounting Standard 39 (IAS 39) of
providing provisions only when losses are
incurred.
On a sad note, in the short run, Mutebile
said the current account deficit is expected
to worsen on account of a higher private
sector import bill as firms resume normal
levels of production following the end of
the festive season.
Quick figures
 The economy grew by 1.3 per cent in Q1
of FY 2017/18, which is lower than 2.5
per cent in the fourth quarter of 2016/17
 Public debt increased from
Martin Okumu
Shs34.4trillion as of June to
Shs37.9trillion as at the end of Dec. 2017
cent in 2018 and 2019 respectively.  Economic growth is projected in the
The increase in outward growth is mainly range of 5 – 5.5 per cent in FY 2017/18,
on account of recovery in economies such as and is forecast to average about 6.3 per
Nigeria, supported by, among other factors, cent in the medium to long term
Executive Style
Islamic micro-finance
gains momentum
How has been the
uptake of Islamic Micro
Financing since the
T
launch in May last year?
he uptake has
been impressive.
We have already
disbursed 70
% of the allocated Shs
32bn fund to 54 projects
countrywide, some
with up to a tune of
Shs 2 billion. We hope
to disburse more of
the remaining funds to
various customers soon.
What are the key
drivers for the positive
response to this new
product?
As an institution,
we knew that many
customers didn’t
understand how Islamic
micro financing works.
We thus took time to
prepare our clients so
that they understand
how this financing
works. This made
them take it more
easily after realising
that it had favourable
terms compared to
conventional micro
financing that charges
interest. In Islamic micro
financing we do not charge
interest but share profits.
What are the requirements
for accessing this kind of
micro financing?
For an institution to
benefit from Islamic micro
financing, they must be
providing a service or
product that is not against
the Shariah law. They
should not be involved in
businesses such as piggery,
prostitution, gambling,
and alcohol among others.
The business should also
be legally registered with
the Islamic Development
Bank that provided the
funds for Islamic Micro
financing. The funds
were secured by the
Uganda government and
identified Micro Support
Centre as the best
institution to support
this financing model.
How is the future
outlook of Islamic micro
financing in Uganda?
Islamic Financing
is one of the fastest
growing industries
in the world having
survived the global
financial crisis. We hope
that in Uganda it will
grow and government
will start providing
direct support to the
John Peter Mujuni is the Executive institutions involved. We
have planted the seed
Director of Micro finance Support Centre, a as the first institution to
government institution charged with providing provide the service and
we intend to keep doing
affordable financing to SMEs. He spoke to this using the money
that we have given
Joseph Bahingwire about their new financial out and the profits our
services linked to Shariah law. clients will be getting.
With the high interest
rates charged by most
proper and audited books Cooperatives societies, commercial banks, we
of accounts, have clear producer and marketing hope Islamic financing
ownership and governance cooperative societies and is bound to liberate
structures and should other organised groups. businesses.
have been in existence for This is because multiplier
at least two years. Prior effect is higher in such What else would you
to giving out funds, the groups. We also fund Small like to tell the public
Micro Support Centre and Medium Enterprises about this new financial
sends a team to carry out a that are engaged in product?
feasibility study and look value addition as well as Islamic financing is all
at the cash flows of the those dealing in tourism about partnership. We
project to ensure that it services. The programme finance already existing
will make enough money has so far benefited over business especially in
to sustain the client and 10,585 people across the agriculture only need
also be able to pay back the country. a push to do more and
loan. share both profits and
Who are the partners in losses depending on the
Who are your target this programme? circumstances.
clients? We work with the
We give priority to government, the African
Savings and Credit Development Bank and
March 30 - April 05 2018 23
business
Kasekende launches the report in Kampala on March 21. Looking on are Stanchart’s top officials.
How Standard Chartered Bank
has benefited EA economies
It has lent out US$3.4bn and employed 2500 permanent staff
By Julius Businge
C
ommercial Banks all over the
world are portrayed as profit
oriented and only work with
customers they think have firm
foundations to meet credit obligations.
But the Standard Chartered Bank’s
recently released independent study
on the social and economic impact of
its operations in East Africa (Kenya,
Tanzania and Uganda) shows that there
is value added to these economies.
The study, which was conducted
by Steward Redqueen, a research
firm last year, shows that the Bank’s
outstanding loan portfolio in the three
countries represents nearly 10% of total
credit provided to the private sector by
commercial banks.
As a consequence, the bank supports
local employment, wages, profits,
and tax payments in many different
value chains. The Bank, for instance,
employs more than 2,500 permanent
staff in Kenya, Tanzania and Uganda,
and directly and indirectly, supports
suppliers in various economic sectors.
It had also provided financing to
24 March 30 - April 05 2018
businesses, consumers and government
agencies of $3.4 billion (UShs 12.4
trillion) across the three markets.
This is in addition to directly and
indirectly supporting $2.8 billion of
value-added impact, which is equivalent
to 2.1% of the region’s GDP.
In terms of taxes, the Bank supports
around $0.3 billion of tax payments to
the governments of Kenya, Tanzania, and
Uganda.
Apart from its employees, the bank
supports direct and indirect employment
to over one million people working as its
clients and the associated value chains
which is equivalent to almost 1.7% of the
region’s labour force.
In Kenya, for instance, which is the
region’s largest economy, the Bank
supports $1.5 billion in value-added
impact (1.9% of its GDP) and it supports
330,000 jobs (1.6% of the labour force).
In Tanzania, it supports $579 million
in value-added (1.1% of GDP) and it
supports 222,000 jobs (1% of the labour
force) while in Uganda, the Bank
supports $896 million in value-added
impact (accounting 3.5% of GDP) and
supports 491,000 jobs (3.5% of the labour
force).
The company’s business to East
Africa’s value-added impact in
particular, relates to the wholesale and
retail trade and manufacturing sectors.
Most employment impact is supported in
the region’s agriculture, manufacturing,
and wholesale and retail trade sectors.
The report says that in order to further
enhance sustainable development,
regional commerce should be increased,
the manufacturing sector expanded and
inclusive growth promoted.
What it finances
The Bank finances international
commerce and thus plays an important
role in connecting the region’s
commercial sector to the world. The Bank
also contributes to the growing regional
commerce using its size, expertise, and
presence to enhance the region’s growth.
The report says that if the Bank can
assist local companies generate higher
value-added impact and source more
from companies within the region, it can
contribute to economic growth, create
client benefits, and grow the value of its
client base.

This is through working with its broad
network of East African companies to
establish relations among these firms via
initiatives like ‘Banking the Ecosystem’.
Furthermore, expanding loans in
business banking (predominantly
small-and-medium sized enterprises)
and commercial banking (mainly local
corporates) could ensure that indigenous
companies have the financial means
to develop increasingly complex
capabilities, thereby adding to the
manufacturing sector’s competitiveness.
In order to compete, the report says,
manufacturing companies need access
to reliable sources of energy. Through its
financing of the utilities sector, the bank
supports power projects. As such, the
Bank’s emphasis on utilities indirectly
contributes to manufacturing.
Inclusive growth
According to the report, opportunities
to help raise the incomes of the region’s
poorest inhabitants are necessary to
generate inclusive growth. It adds that
although the Bank primarily focused
on the emerging affluent, it can expand
its Development Financial Institutions
and Business Banking portfolios to
reach parts of the population that it only
indirectly affects.
The report adds that since the Bank’s
indirect impacts touch upon labour
intensive and sometimes informal
sectors, it can work together with its
clients in these sectors to increase
the magnitude of these indirect
effects. Finally, its digital (including
mobile) banking products as well as
its community activities can further
contribute to this end. In turn, inclusive
growth could expand its future client
business
economy.
Quoting the report, Kasekende said
the value added and employment are not
only generated in the businesses which
directly borrow from banks, but also
by the businesses which supply goods
and services to the direct borrowers and
through the demand generated by the
spending of all those who receive wages
and salaries in the businesses which
benefit, directly or indirectly, from bank
lending.
“Nearly two thirds of the impact of
Stanchart operations on GDP takes the
form of salaries. In terms of supporting
employment, the Bank’s operations in
Uganda have their largest impact on the
agricultural sector, which accounts for
46 percent of all of the jobs supported,”
Kasekende said.
He added that one of the salient
implications of the report findings
for public policy is that “we must be
very careful to avoid implementing
any measures which might curtail the
volume of bank lending to the business
Robert Saltson community, as any reduction in lending
could have significant negative effects on
output and employment.”
“As at October 2016, Commenting on matters interest
rates charged to different segments of
Standard Chartered customers, Kasekende said, in general,
the medium and large scale; formal
Bank had provided sector enterprises have easy access to
financing to cheap bank credit because they have
established track records of profitability,
businesses, well managed and run according to strict
commercial principles, prepare detailed
consumers and financial accounts and can often provide
guarantees from affiliates abroad.
government “...hence credit risk is low and the
agencies of transactions cost incurred by the bank
per unit of loan value is also low,” he

$3.4 billion
base. said.
Albert Saltson,the Bank’s Chief He said the reverse is true for the
Executive Officer said the Bank will informal and small businesses, the
continue to seek ways to deepen its
relationships in East Africa and Uganda (UShs 12.4 reason interest rates partly remain high
in the market.

in particular – such as through its
banking ecosystem capabilities, banking
the buyers and suppliers of their
international corporate clients.
“This, together with the significant
financing we provide to small and
medium enterprises (SMEs) through
our Business Banking and Commercial
Banking segments, allows entrepreneurs
to flourish and supports economic
growth and job creation,” Saltson
said, adding,“Over and above job
creation, trade and economic growth,
we are proud of our contribution to the
core infrastructure development and
knowledge building in Uganda and
we are optimistic of our even greater
contribution in the future.”
In terms of social corporate
responsibility, Saltson said that they have
trillion)
across the three
EAC markets.”
drilled boreholes, planted trees, built
and equipped schools, restored sight of
people, promoted sports and more.
Speaking at the launch of the report
in Kampala on March 21, the Deputy
Governor of Bank of Uganda, Louis
Kasekende, said the results of the socio-
economic impact assessment add to the
knowledge of the economy and provide
important insights into the way in
which the banking industry affects the
“Banks in Uganda which have a large
retail clientele of small scale borrowers
incur much higher operating costs
and must, therefore, charge higher
lending rates than banks which focus
on a relatively small base of large and
medium scale corporate borrowers,”
Kasekende said.
Going forward, the report suggests
that the Bank should continue to invest
in the region by increasing regional
commerce so as to enhance the region’s
growth and further cement its own
position in these markets.
“The Bank can further improve
manufacturing since value-added
and employment impacts arise in the
manufacturing sector,” the report
reads in part.

March 30 - April 05 2018 25

business

Banks to embrace mediation

The initiative is to settle disputes cheaply, quickly and fairly
By Joseph Bahingwire

C
ourt cases in Uganda involving cli-
ents and commercial banks tend to
take many years to be resolved but
this will soon change as banks in
collaboration with the Uganda Law Society
and commercial courts take a bold move
to embrace alternative dispute resolution
(ADR).
ADR refers to processes and techniques
of solving disputes that fall outside of the
judicial process or formal litigation.
This development follows unveiling of
the Alternative Dispute Resolution Frame-
work for the Banking and Finance Sector on
March 23 in Kampala by the Bank of Ugan-
da Deputy Governor, Louis Kasekende.
The frame work sets stage for establish-
ment of an Arbitration Centre. The Centre
to be housed at the Uganda Law Society
will be administered by a Board of Trustees,
tasked with the responsibility to ensure its
sustainability.
The Centre will also have its own detailed
arbitration and mediation rules even as
it complements the BoU’s newly set up
Consumer Empowerment and Complains
Section.
Kasekende said the new initiative will
reduce the costs of resolving disputes
between clients and commercial banks,
resulting into the reduction in the costs of
borrowing.
“It is estimated that, on average, com-
mercial litigation requires a minimum of
four years to be completed.  Delays of this
magnitude are extremely costly for financial
institutions,” he said “…This in turn raises
the cost of credit or induces banks to curtail
the volume of their lending.”
The average lending rate on shilling
denominated loans has recently eased to
20.2 per cent in the first quarter of 2017/18,
from 21.4 per cent in the preceding quarter
and 22.9 per cent in the corresponding quar- Reconstruction Company (ARC), a private financial institutions in Nigeria, Namibia
ter of the previous year, according to the lat- sector led initiative that addresses some of and Mauritius on the African continent for
est data from BoU. the challenges facing the banking sector, not only domestic disputes but also those
This comes at the time commercial courts and stressed businesses as a result of Non- that are cross border, according to Bowman’s
are said to be overwhelmed by a backlog Performing Loans,” he said. law firm.
of cases involving commercial banks and “The second initiative for us is to support The US, UK, Italy, Germany and France
clients. the establishment of the alternative dispute have also well-established mediation and
Last year, the Case Backlog Reduction resolution frame work being championed by arbitration mechanisms because, for certain
Committee, chaired by Justice Richard the Uganda law society to address the issue types of transaction, its flexibility can be
Buteera, revealed that there were around of case back log, accumulated injunctions extremely advantageous.
3,000 back log of cases in the country’s com- and delays in formal justice system.” The ULS President, Francis Gimara, said he
mercial courts. Commercial banks established the ARC welcomes the new initiative saying it will
Fabian Kasi, the chairperson UBA and the last year to wipe NPLs off their books, which offer private mechanisms for resolving com-
Managing Director of Centenary Bank said had reached 10% of total industry loan book mercial disputes much faster.
case back log has had a significant impact on in the previous year, higher than 4% desired “… Fast and efficient resolution of dis-
the banking sector over the years leading to mark for the industry. putes will have on a banking and business
subdued profitability. Currently, ADR is used in business and sector in general is enormous,” he said.
“As a sector we established the Assets

26 March 30 - April 05 2018

 business
csr trade

Isimba contractor offers free medical service Uganda to resume

in the exercise which is part
of the company’s corporate
export of poultry
social responsibility that was products to Kenya
embedded in its contract with

the government of Uganda.
Yongtian added that the free
service was in the exchange
of the good cooperation that
the people of Kayunga have
demonstrated since the project
began.
The Public Relations Officer
for Isimba HPP, Jonan Kiiza,
Chinese doctors attending to patients at Katicom Hotel in Kayunga Town who spoke on behalf of the
U
ganda’s poultry
farmers will soon
resume selling their
products to the
neighbouring Kenya after
nearly a15-month ban.
The Kenyan government
on March 22 said it plans
to lift the ban soon, allow-

C
Council.   Independent/J.Businge
hina International
Water and Electrical
Corporation (CWE),
the contractor of the
183MW Isimba Hydro power
project, has concluded its
third and last free medical
activity ahead of the official
completion of the power
Investment
EA Investment Conference slated for next month
dam later this year. Held on
March 23 in Kayunga Town
Council, the free medical
camp saw 11 special doctors
of Chinese origin offer free
medical services to over 500
patients suffering from different
diseases. CWE’s Wang Yongtian
said they sunk in over Shs 30m
project overseer, the Uganda
Electricity Generation Compa-
ny Limited (UEGCL), said that
they would continue to offer
similar services to the people of
Kayunga even when the project
is completed and handed over
to them (UEGCL) to manage on
behalf of government
ing Uganda’s chicken and
egg products access itsKsh-
500milliom market.
Kenya banned the entry
of Uganda’s products many
months ago following the
outbreak of a viral disease.
Deputy Director of Vet-
erinary Services, Michael
Cheruiyot, says the move
follows talks with Uganda
and an assessment that
ascertained the neighbour-
ing country is now free of

T
he Chartered Financial
Analyst Society of East
Africa will hold their
second investment con-
ference at the Sarova Hotel in
Nairobi on April 05.
Alan Lwetabe, a CFA Member
and the assistant director, Invest-
ment Management Division at
the Bank of Uganda, .said the
event will gather leading region-
al and global researchers to
discuss macro-economic trends,
innovations affecting financial
services, and investment oppor-
tunities in the region.
“We shall be discussing the
issues of sovereign debt and
borrowing for infrastructure,
fintech and the impact of disrup-
tive technologies on the market,
Islamic Banking and the brand-
ing of financial services,” he told
the media on March 21.
This conference comes
at the time the East African
governments are rushing for
sovereign debts especially
from China to finance various
infrastructure projects ranging
from railway to airports to oil
and gas developments.
avian influenza disease.
Last year in August, the
Ministry of Agriculture
allowed three firms to export
their products to Kenya hav-
ing met the safety conditions
that would allow them to
sell their eggs and chicken
locally, locking out majority
of the traders in the cross-
border poultry business.

csr
Finance

Ligormac Advocates widens Airtel sponsors Karamoja girls

its legal services officials in Kampala on March 22.

U
The funds would benefit girls
ganda’s corporate products to offer customers from Moroto and Napak districts.
law firm, Ligor- all round financial services. Speaking at the handover ceremony,
mac Advocates, “Given the nature of our Airtel’s Managing Director, V.G
has widened its clientele, offering services Somasekhar said that when one
legal services with the in- that relate to finance, we transforms education, they trans-
clusion of tax related advi- decided to move away Officials display a Shs 11mn dummy form society. “When you educate a
sory services to customers. from a mere corporate law cheque for the campaign at Airtel girl child you have educated a fam-
This comes barely four firm to a financing firm… headquarters.   Independent/J.Businge ily,” he said, adding “Airtel Uganda

months since the firm
entered into a collaboration
with the US-based Ander-
sen Tax and the Andersen
Global that has nearly
2,500 professionals in 88
offices around the world.
The firm’s Managing
Partner, Kabiito Karamagi,
said the firm deliberately
decided to diversify its
we also decided to broaden
the area of our practice, and
tax is one of them,” he said .
This comes at the time
the Uganda Revenue
Authority (URA) has inten-
sified efforts to record
at least the 14% growth
in revenue to meet the
Shs15trillion target set this
financial year.
A
irtel Uganda has entered
into a partnership with the
International Institute of
Rural Reconstruction (IIRR)
to support the ongoing latter’s fund-
raising campaign dabbed ‘Goats for
girls’ which aims at keeping the Kar-
amoja girls in school. The telecom
company handed over a dummy
cheque of Shs 11m to the Institute’s
will continue to focus on education
and transforming rural communi-
ties.” The IIRR Country Director,
Pamela Nyamutoka said the money
would buy 100 goats which will be
distributed to girls in the region.
Nyamutoka said beneficiaries will
be required to surrender the first
two kids to another girl for the pro-
cess to continue and benefit other
girls in the region.

March 30 - April 05 2018 27

business

Vivo Energy unveils seven

new service stations
By Julius Businge Gilbert Assi told journalists

F
at Kyengera Service Station,
uel and other lubri- located along Kampala-
cants distributor, Vivo Masaka Highway on March
Energy Uganda Lim- 23, that the expansion aims
ited, has expanded its at extending their services
coverage by opening seven closer to customers.
new service stations. “We are not only widen-
The new service stations, ing our convenience retail
which started operations at offering but we also continue
the end of last year, includes;  to bring new innovations
Kakiri, Kira Town, Kyengera, across our product range,”
The Executive Vice president East and South Region for Vivo Energy Group Gulu Highway, Nebbi, Assi said.
David Mureithi, (M) and the Managing Director Vivo Energy Uganda Gilbert Namusera and Lyantonde.  He said the pump prices
Assi, (2L) cut a tape during the official opening of Shell fuel station Kyengera on This puts the number of would in future reduce in
March 23. Vivo has opened more seven stations.  INDEPENDENT/JIMMY SIYA service stations held by Vivo line with the country’s oil
Energy to 140 compared with production schedule, other
its closed rival Total that has factors constant.  Uganda
128 service stations. The firm hopes to start its oil produc-
sells its fuel products under tion by 2020.
the shell brand in Uganda David Mureithi, the execu-
and 15 other markets in Afri- tive Vice President for East
ca where it has operations. and South Region for Vivo
This development comes Energy Group, said Vivo
at a time fuel prices are Energy understands that
increasing due to increased customers not only look for
price of the commodity at the filling up their vehicles with
international market, with fuel but also looks for quality
petrol and diesel now trading service.
at Shs 4,000 and Shs 3,200, up “…to become Africa’s
from Sh3, 420 and Shs2,800 most respected energy busi-
per litre in January, respec- ness, it is important that we
tively. are accessible to every cus-
Vivo’s Managing Director, tomer,” Mureithi said.
Japanese Ambassador to Uganda HE Kazuaki Kameda (3rd L) and Chief
Guest Raymond Agaba commissioner for internal Trade (with dummy key)
joined by Toyota officials during the launch of the Hino truck 300 series.
This is the first time Toyota renowned for luxurious cars and double cabins
is venturing into trucks.  INDEPENDENT/JIMMY SIYA
Weekly share price movement (March .20)
Security March 20 March 12 Movement
BATU 30000 30000 00
BOBU 120 120 00
CENT 1,679 1,626 3.2
DFCU 711 710 00
EABL 9,099 8,639 5.3
EBL 1,841 1,726 6.7
JHL 19,138 18,544 3.2
KA 411 469 12.4
KCB 1,841 1,762 4.5
NIC 17 16 00
NMG 3,683 3,687 0.1
NVL 510 510 00
SBU 29 29 00
A guest looks at jewels displayed at UMA exhibition hall during the UCHM 95 95 00
Egypt- Asia International expo on March 26. This expo is held twice a
UCL 29 29 00
year in Uganda.   INDEPENDENT/JIMMY SIYA
UMEME 410 405 1.2
ALSI -- -- --

28 March 30 - April 05 2018


By Louis Kasekende
Socio-economic impact of banks
Why policy measures that curtail the volume of bank
lending to the business community must be avoided
I
would like to begin by explaining
why I think that a socio-economic
impact assessment is a very useful
initiative for the bank to have
taken.
Banks all around the world tend to
attract a lot of public criticism, and
banks in Africa are no exception. The
main complaints about banks in Africa
are usually two-fold. First, that they
charge very high interest rates on their
loans. Second, that they restrict their
lending to a relatively small segment
of the business community, excluding
most of the small and micro-
enterprises which comprise the bulk of
the economy and provide the majority
of employment.
While there is certainly some validity
in both these arguments – one cannot
dispute that lending rates are very
high in real terms, for example –
public debate on these issues often
betrays a poor understanding of the
underlying causes of these problems,
many of which lie outside the banking
industry itself. Furthermore, the
public perception of banks often
lacks a balanced appreciation of the
positive contributions which they
make to the economy. Unfortunately
public misconceptions of economic
issues can sometimes lead to poor
policies, an example of which is the
counterproductive ceiling on bank
lending rates in Kenya.
The independent socio-economic
impact assessment of Standard
Chartered Bank’s operations
in East Africa, prepared by the
consultancy firm Steward Redqueen,
addresses the second of these issues
- the contribution of the bank to the
economy and to social welfare, in a
rigorous and comprehensive manner
using an input-output methodology.
It sets out to quantify the contribution
which Standard Chartered Bank’s
operations, principally its lending
to the private sector, made to GDP
and employment in Kenya, Tanzania
and Uganda, in 2016. The impact
arises from both the direct support
which SCB’s lending provides to
its borrowers and the second round
effects on the borrowers’ suppliers
and other indirect effects. These
contributions to GDP and employment
are far from being negligible.
In Uganda, SCB extended domestic
credit to the private sector, through
both on-shore and offshore financing,
Is it possible for
bank lending
rates to be
lowered without
at the same
time reducing
the access to
credit of those
small scale
borrowers who
are the most
costly for banks
to serve?
March 30 - April 05 2018
COMMENT
of just over $900 million in 2016,
which amounts to about 3.6 percent
of GDP. The socio-economic impact
report estimates that SCB’s lending
supported value added of 3.5 percent
of GDP and almost half a million
jobs. Hence each Shilling of SCB’s
lending supported GDP of a similar
magnitude. This might not appear
very large until we recall that bank
finance generally provides a borrower
with funds to purchase both factor
inputs and material inputs, whereas
it is only the factor inputs which
comprise GDP.
Therefore, the fact that there is
an almost one for one relationship
between SCB’s finance and the
magnitude of GDP which it supports
is indicative of finance being a scarce
resource in Uganda and that marginal
returns to capital are high, at least for
the borrowers of SCB. High returns
to borrowing also suggest that funds
are being intermediated efficiently;
i.e. channeled to those borrowers
which are able to use funds most
productively.
The results of the socio-economic
impact assessment add to our
knowledge of the economy and
provide important insights into the
way in which the banking industry
affects the economy. For example, the
report shows that value added and
employment are not only generated
in the businesses which directly
borrow from banks, but also by the
businesses which supply goods and
services to the direct borrowers and
through the demand generated by
the spending of all those who receive
wages and salaries in the businesses
which benefit, directly or indirectly,
from bank lending. Nearly two thirds
of the impact of SCB’s operations on
GDP takes the form of salaries. In
terms of supporting employment,
SCB’s operations in Uganda have their
29
COMMENT
largest impact on the agricultural
sector, which accounts for 46 percent
of all of the jobs supported.
One of the salient implications of
these findings for public policy is
that we must be very careful to avoid
implementing any measures which
might curtail the volume of bank
lending to the business community, as
any reduction in lending could have
significant negative effects on output
and employment.
I would now like to address the
difficult issue of the cost of, and access
to, bank credit which, as I noted at
the start of this address, is one of the
main causes of public discontent with
commercial banks in Uganda and
elsewhere in Africa. The two problems
– high lending rates of interest and
limited access to credit – have a
common cause, which is the nature of
a large part of the productive base of
the economy.
Uganda has what is in effect a dual
economy which comprises, on one
side, a modern formal sector with a
relatively small number of medium
and large scale enterprises and on the
other side, a vast number of mostly
informal small and micro-enterprises.
In general, the medium and large
scale, formal sector enterprises have
access to bank credit and many of
them can borrow funds at interest
rates which are well below average for
all borrowers and in some cases even
below the posted prime lending rates
of banks. Many of these borrowers
can also access offshore finance.
The reasons why these borrowers
can access credit relatively cheaply
are straightforward to understand;
these enterprises have established
track records of profitability, are well
managed and run according to strict
commercial principles, they prepare
detailed financial accounts and they
can often provide guarantees from
affiliates abroad. Hence credit risk is
low and the transactions cost incurred
by the bank per unit of loan value is
also low.
In contrast, the informal small and
micro enterprises pose very different
challenges for the banks. Their
revenues are volatile and their long
term probability of survival is low.
Most do not keep proper financial
records. There is often no separation
of business expenses and the personal
expenses of the owner. Banks face
severe informational problems in
evaluating the creditworthiness of
these enterprises.
Furthermore, because loan sizes
are small, it is also very costly, per
unit of loan value, to evaluate their
30 March 30 - April 05 2018
Digitalisation
has already
brought about
dramatic
improvements
in access to
payments
services and a
reduction in the
costs incurred
by customers
in making
payments in
East Africa
loan applications and monitor their
borrowing. Consequently, because of
the high transaction costs and credit
risks involved, it is only commercially
viable for banks to serve this segment
of the credit market if they charge
high interest rates.
This is the principal reason why
average lending rates of interest are
high in Uganda. Banks in Uganda
which have a large retail clientele of
small scale borrowers incur much
higher operating costs and must,
therefore, charge higher lending rates
than banks which focus on a relatively
small base of large and medium scale
corporate borrowers.
Is it possible for bank lending rates
to be lowered without at the same
time reducing the access to credit of
those small scale borrowers who are
the most costly for banks to serve?
Certainly Yes; but this will only be
possible on a sustainable basis if the
costs of serving these borrowers can
be reduced.
The establishment of the Credit
Reference Bureau (CRB) is intended
to offer banks better access to reliable
information about the loan history
and thus the creditworthiness of
loan applicants and thereby reduce
informational costs, but these costs
are only a relatively small part of the
overall costs which banks incur in
lending to small scale borrowers, so
the CRB will not, on its own, bring
about a substantial reduction in the
cost of credit.
In the long run, reducing
intermediation costs will benefit from
government’s continuous efforts in
improving the business environment
such as investment in infrastructure
and efficacy of commercial justice
system. Most importantly for banks,
lowering costs will probably require
employing information technology to
replace traditional banking methods
of delivering loans and other financial
products and for assessing loan
applications.
As Mr. Lamin Manjang, the CEO
of SCB Kenya points out in the
foreword to the socio-economic impact
assessment report; SCB is investing
heavily across its banking group in
digital technology with the aim of
enabling 80 percent of its customers’
transactions to be conducted through
non branch channels. Recently, it was
also reported that Standard Chartered
Bank is launching its first digital only
retail bank in Cote d’Ivoire; this bank
will have no physical bank branches
and will be a testing ground for the
delivery of digital financial services.
This is clearly the direction in which
banking is moving worldwide.
Digitalisation has already brought
about dramatic improvements in
access to payments services and a
reduction in the costs incurred by
customers in making payments in East
Africa.
The challenge for banks is to realise
similar improvements and cost savings
in the delivery of loan products. This will
certainly be much more difficult, but if
banks can do this, lower lending rates
and an expansion of access to credit will
become a more realisable prospect.
Louis Kasekende (PhD) is the Deputy
Governor, Bank of Uganda. He made this
statement at the launch of the Standard
Chartered Bank Socio-Economic Impact
Report on March 21 in Kampala.

By George Soros
Social media threat to society
These companies influence how people think
and behave without them even being aware of it
T
he current moment in world
history is a painful one. Open
societies are in crisis, and
various forms of dictatorships
and mafia states, exemplified by
Vladimir Putin’s Russia, are on the
rise. In the United States, President
Donald Trump would like to establish
his own mafia-style state but cannot,
because the Constitution, other
institutions, and a vibrant civil society
won’t allow it.
Not only is the survival of open
society in question; the survival of
our entire civilisation is at stake. The
rise of leaders such as Kim Jong-un
in North Korea and Trump in the
U.S. have much to do with this. Both
seem willing to risk a nuclear war in
order to keep themselves in power.
But the root cause goes even deeper.
Mankind’s ability to harness the
forces of nature, both for constructive
and destructive purposes, continues
to grow, while our ability to govern
ourselves properly fluctuates, and is
now at a low ebb.
The rise and monopolistic behavior
of the giant American Internet
platform companies is contributing
mightily to the U.S. government’s
impotence. These companies have
often played an innovative and
liberating role. But as Facebook
and Google have grown ever more
powerful, they have become obstacles
to innovation, and have caused a
variety of problems of which we are
only now beginning to become aware.
Companies earn their profits by
exploiting their environment. Mining
and oil companies exploit the physical
environment; social media companies
exploit the social environment. This is
particularly nefarious, because these
companies influence how people think
and behave without them even being
aware of it. This interferes with the
functioning of democracy and the
integrity of elections.
Because Internet platform companies
are networks, they enjoy rising
marginal returns, which accounts
for their phenomenal growth. The
network effect is truly unprecedented
and transformative, but it is also
unsustainable. It took Facebook eight
and a half years to reach a billion
users, and half that time to reach the
second billion. At this rate, Facebook
will run out of people to convert in
less than three years.
Facebook and Google effectively
control over half of all digital
advertising revenue. To maintain their
dominance, they need to expand their
The EU
Commissioner
for Competition
Margrethe
Vestager is the
champion of
the European
approach. It took
the EU seven
years to build
a case against
Google
March 30 - April 05 2018
COMMENT
networks and increase their share of
users’ attention. Currently they do this
by providing users with a convenient
platform. The more time users spend
on the platform, the more valuable
they become to the companies.
Moreover, because content providers
cannot avoid using the platforms and
must accept whatever terms they are
offered, they, too, contribute to the
profits of social media companies.
Indeed, the exceptional profitability of
these companies is largely a function
of their avoiding responsibility – and
payment – for the content on their
platforms.
The companies claim that they are
merely distributing information. But
the fact that they are near-monopoly
distributors makes them public
utilities and should subject them to
more stringent regulation, aimed at
preserving competition, innovation,
and fair and open access.
Social media companies’ true
customers are their advertisers.
But a new business model is
gradually emerging, based not only
on advertising but also on selling
products and services directly to users.
They exploit the data they control,
bundle the services they offer, and use
discriminatory pricing to keep more of
the benefits that they would otherwise
have to share with consumers. This
enhances their profitability even
further, but the bundling of services
and discriminatory pricing undermine
the efficiency of the market economy.
Social media companies deceive their
users by manipulating their attention,
directing it toward their own
commercial purposes, and deliberately
engineering addiction to the services
they provide. This can be very
harmful, particularly for adolescents.
There is a similarity between Internet
platforms and gambling companies.
Casinos have developed techniques to
hook customers to the point that they
31
COMMENT
gamble away all of their money, even
money they don’t have.
Something similar – and potentially
irreversible – is happening to human
attention in our digital age. This is
not a matter of mere distraction or
addiction; social media companies
are actually inducing people to
surrender their autonomy. And this
power to shape people’s attention is
increasingly concentrated in the hands
of a few companies.
It takes significant effort to assert
and defend what John Stuart Mill
called the freedom of mind. Once lost,
those who grow up in the digital age
may have difficulty regaining it.
This would have far-reaching
political consequences. People without
the freedom of mind can be easily
manipulated. This danger does not
loom only in the future; it already
played an important role in the 2016
US presidential election.
There is an even more alarming
prospect on the horizon: an alliance
between authoritarian states and
large, data-rich IT monopolies,
bringing together nascent systems of
corporate surveillance with already-
developed systems of state-sponsored
surveillance. This may well result in a
web of totalitarian control the likes of
which not even George Orwell could
have imagined.
The countries in which such unholy
marriages are likely to occur first
are Russia and China. Chinese IT
companies in particular are fully equal
to the U.S. platforms. They also enjoy
the full support and protection of
President Xi Jinping’s regime. China’s
32 March 30 - April 05 2018
government is strong enough to
protect its national champions, at least
within its borders.
US-based IT monopolies are already
tempted to compromise themselves
in order to gain entrance to these
vast and fast-growing markets. These
countries’ dictatorial leaders may be
only too happy to collaborate with
them, in the interest of improving
their methods of control over their
own populations and expanding their
power and influence in the United
States and the rest of the world.
There is also a growing recognition
of a connection between the
dominance of the platform
monopolies and rising inequality. The
concentration of share ownership in
the hands of a few individuals plays
some role, but the peculiar position
occupied by the IT giants is even
more important. They have achieved
monopoly power while also competing
against one another. Only they are
big enough to swallow start-ups that
could develop into competitors, and
only they have the resources to invade
one another’s territory.
The owners of the platform giants
consider themselves the masters of
the universe. In fact, they are slaves
to preserving their dominant position.
They are engaged in an existential
struggle to dominate the new growth
areas that artificial intelligence is
opening up, like driverless cars.
The impact of such innovations
on unemployment depends on
government policies. The European
Union, and particularly the Nordic
countries, is much more farsighted
than the United States in their social
policies. They protect the workers,
not the jobs. They are willing to pay
for retraining or retiring displaced
workers. This gives workers in Nordic
countries a greater sense of security
and makes them more supportive
of technological innovations than
workers in the U.S.
The Internet monopolies have neither
the will nor the inclination to protect
society against the consequences of
their actions. That turns them into a
public menace, and it is the regulatory
authorities’ responsibility to protect
society against them. In the U.S,
regulators are not strong enough to
stand up to the monopolies’ political
influence. The EU is better positioned,
because it doesn’t have any platform
giants of its own.
The EU uses a different definition
of monopoly power from the U.S.
Whereas U.S law enforcement focuses
primarily on monopolies created by
acquisition, EU law prohibits the
abuse of monopoly power regardless
of how it is achieved. Europe has
much stronger privacy and data
protection laws than America.
Moreover, U.S law has adopted
a strange doctrine that measures
harm as an increase in the price paid
by customers for services received.
But that is almost impossible to
prove, given that most giant Internet
platforms provide a majority of
their services for free. Moreover, the
doctrine leaves out of consideration
the valuable data that platform
companies collect from their users.
The EU Commissioner for
Competition Margrethe Vestager is the
champion of the European approach.
It took the EU seven years to build a
case against Google. But, as a result of
its success, the process of instituting
adequate regulation has been greatly
accelerated. Moreover, thanks to
Vestager’s efforts, the European
approach has begun to affect attitudes
in the U.S.
It is only a matter of time before the
global dominance of the U.S Internet
companies is broken. Regulation and
taxation, spearheaded by Vestager,
will be their undoing.
George Soros, Chairman of Soros
Fund Management and of the Open
Society Foundations, is the author of
The Tragedy of the European Union:
Disintegration or Revival?
Copyright: Project Syndicate, 2018.
Music lessons improve
academic performance
Cognitive skills developed from music lessons appear to transfer
to unrelated subjects, leading to improved academic performance
T
By Agencies
he first large-scale, longitudinal
study adapted into the regular
school curriculum finds that
structured music lessons sig-
nificantly enhance children’s
cognitive abilities -- includ-
ing language-based reasoning, short-term
memory, planning and inhibition -- leading
to improved academic performance.
Published in Frontiers in Neuroscience, the
research is the first large-scale, longitudinal
study to be adapted into the regular school
curriculum. Visual arts lessons were also
found to significantly improve children’s
visual and spatial memory.
Music education has been decimated in
schools around the globe, due to competition
with academic subjects and an increasing
lack of funding. These days, the opportunity
to learn an instrument is seen as more of a
luxury than a necessary part of education.
“Despite indications that music has ben-
eficial effects on cognition, music is disap-
pearing from general education curricula,”
says Dr Artur Jaschke, from VU University
of Amsterdam, who led the study with Dr
Henkjan Honing and Dr Erik Scherder. “This
inspired us to initiate a long-term study on
the possible effects of music education on
cognitive skills that may underlie academic
achievement.” The researchers conducted
the study with 147 children across multiple
Dutch schools, using a structured musi-
cal method developed by the Ministry of
Research and Education in the Netherlands
together with an expert centre for arts educa-
tion. All schools followed the regular primary
school curriculum, with some providing
supplementary music or visual arts classes. In
these, the children were given both theoretical
and practical lessons. After 2.5 years, the chil-
dren’s academic performance was assessed,
as well as various cognitive skills including
planning, inhibition and memory skills.
The researchers found that children who
received music lessons had significant cogni-
tive improvements compared to all other
children in the study. Visual arts classes also
showed a benefit: children in these classes
had significantly improved visual and spatial
March 30 - April 05 2018
short-term memory compared to students
who had not received any supplementary
lessons.
“Children who received music lessons
showed improved language-based reasoning
and the ability to plan, organize and complete
tasks, as well as improved academic achieve-
ment,” says Dr Jaschke. “This suggests that
the cognitive skills developed during music
lessons can influence children’s cognitive
abilities in completely unrelated subjects,
leading to overall improved academic perfor-
mance.
The researchers hope their work will con-
tribute to highlighting the importance of the
music and arts in human culture and cogni-
tive development.
“Both music and arts classes are supposed
to be applied throughout all Dutch primary
schools by the year 2020,” says Dr Jaschke.
“But considering our results, we hope that
this study will support political develop-
ments to reintegrate music and arts education
into schools around the world.”
Source: Sciencedaily
33
health
Low resting heart rate is good
So how do you lower yours?
By Jennifer Huizen way to achieve a lasting lower heart rate
H
eart rate refers to the number of
heartbeats a person has per min-
ute. It is also commonly called
the pulse. Having a lower resting
heart rate is usually a sign of good health.
In this article we provide hints on how you
can lower and maintain a lower heart rate.
How to lower the heart rate
If the heart rate is suddenly spiking in
response to issues such as emotional stress
or environmental factors, addressing the
cause is the best way to reduce the heart
rate. Ways to reduce sudden changes in
heart rate include:
 Practicing deep or guided breathing
techniques, such as box breathing
 Relaxing and trying to remain calm
 Going for a walk, ideally away from an
urban environment
 Having a warm, relaxing bath or
shower
 Practice stretching and relaxation exer-
cises, such as yoga
Many lifestyle habits can contribute to
lower the resting heart rate in the long term.
They may also improve a person’s ability to
maintain a healthy heart rate during physi-
cal activity and stress. The following tips
may help to lower the heart rate in the long
term:
 Exercise: The easiest and most effective
34 March 30 - April 05 2018
is to do regular exercise. 
 Stay hydrated: When the body is dehy-
drated, the heart has to work harder to 
stabilize blood flow. Throughout the
day, drink plenty of sugar- and caffeine-
free beverages, such as water and herbal
tea.
 Limit intake of stimulants, such as caf- 
feine and nicotine: Stimulants can cause
dehydration, increasing the heart’s
workload. 
 Limit alcohol intake: Most forms of
alcohol dehydrate the body. Alcohol is
also a toxin, and the body must work
harder to process and remove it.
 Eat a healthy, balanced diet: Eating a
varied diet rich in fruits, vegetables, lean 
proteins, nuts, and legumes can help to
improve the health of the heart, as well
as overall health.
Foods and supplements rich in anti-
oxidants and healthy fats can lower blood
pressure and make it easier for the heart to 
pump. Heart-healthy nutrients include:
 Omega-3 fatty acids, found in fish, lean
meats, nuts, grains, and legumes
 Phenols and tannins, found in tea, cof-
fee, and red wine (in moderation) 
 Vitamin A, found in most leafy, green
vegetables
 Dietary fiber, found in whole grains,
nuts, legumes, and most fruits and veg-
etables
Vitamin C, found especially in citrus
fruits, leafy greens, and bean sprouts
Get enough sleep: A chronic lack of
sleep puts stress on the whole body,
including the heart. Most adults should
get between 7 and 9 hours of sleep a
night.
Maintain a healthy body weight: Extra
weight also puts stress on the body and
heart.
Reduce or resolve sources of substantial
long-term stress: Stress caused by work,
caring for a loved one, or financial bur-
dens all cause the heart and the rest of
the body to work harder, to maintain a
normal rhythm and flow.
Seek counseling or psychological ser-
vices: Traumatic experiences, grief, and
certain mental health conditions stress
the body and can impact brain chemis-
try, making it harder for people to cope
with everyday activities and stressors.
Get outdoors: Research shows that
people who spend more time in nature,
even by taking a short walk in the
woods or a park, tend to be happier and
less stressed than people who do not.
Practice relaxation techniques: Activities
that increase self-awareness and mind-
fulness, such as meditation and guided
visualization, can help to reduce stress
when practiced routinely.
 ART | BOOKS | SOCIETY | TRAVEL | CULTURE

W
By Dominic Muwanguzi

henever regular
art gallery goers
around Kampala are
confronted with a
striking painting of a
beautiful waterscape,
associations immediately connect it to
Edison Mugalu. This impressionist artist’s
name has become so synonymous with
the subject that many cannot imagine him
painting any other theme but waterscapes.
His style of painting the waters, with that
romantic flair and vibrancy, imbues his
paintings with an unusual serenity that
fascinates his audiences.
Mugalu’s flair, style, and emotions
are on show in a new exhibition titled
`Harmony in Lights’ at Umoja Art Gallery
in Kampala.
Mugalu loves to play with colour
Romanticism on
Mugalu’s canvas
effects on canvas. His canvases are often
dominated with bright hues of yellows,
blues, reds and oranges. He deploys them
wantonly, with a sense of freedom that
only self –taught artist appear to manage.
Mugalu’s images are almost a departure Serenityscapes as metaphor for self-freedom
to the arch-typical classroom picture
construction type. He employs the naïve light effect on canvas- generally influenced human characters in the painting appear
style of drawing to create evoke unique by his earlier work on waterscapes. in shadowy form probably because of the
visual appreciation for the audience. Often Additionally, the exhibit is a showcase of his thin light that penetrates the landscape
times, because of such technique, his images progression not necessarily in style but in they inhabit. Such composition stimulates
do not appear still, but are viewed as if subject matter. The artist paints dark streets nostalgic emotions to many a traveller who
floating or crawling with life. and veiled human figures much familiar has visited the coastal city or similar sites.
His earlier paintings, from the period of to the coastal townships of Zanzibar. Mugalu injects them with his own style
2003-2007 are evidence of this characteristic. The streets are made of small corridors of naivety-drawing, thereby giving them
Paintings of fishermen at the lake with that meander into stony settlements. The a completely different identity; unique
fishing canoes or a series on life at the from that depicted in travel magazines or
beach pictures demonstrated such artistic illustrations books.
freedom. The artist creates dreamy Mugalu’s romanticism on canvas is
effects in the paintings by emphasising evidence of an artist who has acquired
the extravagant use of bright hues. On masterly in what he’s doing. Such
the contrary, he generates a fusion of competence influences the market for
light and darkness on canvas to evoke his art. This is not only for reasons of
shadowy images of human figures his unique style, but for his consistence
or settlements disappearing into the in subject matter. More so, when you
painting. critically look at Mugalu’s waterscapes,
In recent times, he has maintained you’re quickly reminded of the artistic
the dreamy flair in his art. However, philosophy that is embedded in
some critics interpret it as a symbol of serenityscapes. They’re known for
complacence or no growth for the artist rekindling self-love and self-freedom.
who has spent the better part of his Mugalu’s waterscapes are evidently a
artistic career enjoying the label as one metaphor to such introspection.
of the most selling artist on the Ugandan
contemporary art scene. Edison Mugalu’s Harmony in `Lights exhibit’
Like is the norm in his paintings, his is showing at Umoja Art gallery located next to
most recent exhibit, `Harmony in Lights’, Prestige driving school, Kamwokya, Kampala
highlights the aspect of harmonising Images are courtesy of the artist.
colours to create a romantic feel on
canvas. He concentrates on the theme of

March 30 - April 05 2018 35

This company claims they can preserve your brain for future use. But first they have to kill you
A California-based company, Nectome, company co-founder Robert McIntyrehe while there is no proof that memories
claims it can perfectly preserve clients openly admits: “The service is 100 percent and other information in the brain
brains for use in the future when fatal for clients” - meaning that in order can be preserved this way, people are
technology will allow all the information to preserve the connectome, the client’s excited about the idea and are paying
stored in them to be transferred to a brain has to be pumped with a cocktail of US$10,000 (Approx. Shs37 million) to
computer. But the service offered by embalming chemicals while still fresh. It’s be put on a waiting list. The service
Nectome does come with a huge catch as essentially a form of assisted suicide. And isn’t yet available.

Would you visit this death-themed café?

President Trump’s
women
U.S. President Donald
Trump is facing embarrassing
new accusations of infidelity,
with a former Playboy model
providing details about their
alleged ten-month affair. Karen
McDougal described burst-
ing into tears after he offered
her money following their first
sexual encounter. She said she
had loved him and believed he
had loved her and might marry
her, even though he had at the
time only just had a son with
his third wife Melania. Trump
denies the alleged affair. A porn
star, Stormy Daniels, also claims
she was having an affair with
Trump during the same period.
The Kid-Mai Death Cafe
looks more like the scene
of a funeral than a place
you’d want to hang out
with your friends. Black
is the dominant color, but
that’s probably the least
morbid thing about this
establishment. Funeral
wreaths are used as floral
decorations, items on
the menu have names
like “ageing”, “painful”,
“illness”, and “death” and
are displayed as funeral
photos at the bar, and there’s
Victoria Beckham’s `poverty tourism’
For Nairobi teenager Emily
Juma, it was a dream come
true to meet her famous idol,
Victoria Beckham aka Posh
Spice though she was surprised
by how ‘simple’ Victoria’s outfit
looked. : Plain white T-shirt,
ripped jeans and wellies.
Compared with her usual high-
fashion looks, Victoria Beckham
was decidedly dressed down
during a recent visit to a slum
in Nairobi, Kenya. What Emily
did not know was that it would
cost a local worker like Emily’s
mother a year’s wages to pay
even a coffin that visitors can
lie down in to get a small
discount. But that’s not all.
Scattered through Kid-Mai
Death Cafe are a variety of
inspirational/morbid signs
like “Are you ready if tonight
you would just sleep and
never wake up again?” Why
go through the trouble of
opening a death-themed
cafe? Well, the people behind
Kid-Mai prefer the term
“death awareness cafe”.
Their main goal is to make
people accept their mortality
and inspire them to enjoy
every moment of their life,
because they never know
when it’s going to end.
for that ‘simple’ ensemble: total
cost £490, thanks to a £90 T-shirt
from her eponymous label, £280
jeans and wellies that cost £120
(Approx. UGShs2.5 million).
The former singer, travelled
to Nairobi, Kenya to help
support two charities; Sport
Relief and America’s version of
Red Nose Day. She stayed in a
£500-a-night suite at the Norfolk
Hotel in Nairobi. The reaction
on social media was excoriating,
with widespread accusations
that she was engaging in
‘poverty tourism’.

Get gold-plated 3D-printed model of your unborn child

Mothers who can’t wait to hold their babies
until they are actually born can now fulfill their
greatest dream with the help of 3D-printed, life-
size models of their unborn children based on
ultrasound imagery.
Embryo 3D is not the world’s first company to
offer parents 3D-printed plastic models of their
soon-to-be-born children, but it claims to offer
the highest degree of realism, not to mention
several choices of material, from basic plastic to
gold or silver-plated plaster. They apparently
use advanced ultrasound technology that offers
an incredibly detailed 3D image of the baby,
including face, hands, feet and umbilical cord.

36 March 30 - April 05 2018

New Volkswagen Touareg
China chosen as launch site of Volkswagen’s new ‘premium’ flagship
V
By Agencies
olkswagen has abandoned
the United States in favour of
China for the world debut of
its third-generation Touareg
- because that’s where the
money is.
And you will need plenty of money to
get into the all-new Touareg, because it’s
taken such a big step upmarket that it’s now
considered to be the flagship of the entire
Volkswagen range.
A pointer to a high-tech future with even
higher-tech interiors, the giant Touareg
adds a sweeping array of safety and driver
assistance systems to a chassis borrowed
almost completely from the new Porsche
Cayenne.
It has grown by 77mm overall in length
and it’s also 44mm wider, though the
weight has come down 120kg.
There’s nothing shy about its front-end,
with its vast grill of chromed horizontal
grids, and ripping off its camouflage vinyl
has revealed a shape with more inte-
grated curves and swoops than it initially
appeared.
The grille dominates its look, though,
and is an SUV version of the design that has
already been seen on the Arteon and the
smaller T-Roc, with its optional LED head-
lights seeming to start from its depths.
It’s a sportier, more organic-looking
machine than either of its predecessors,
taking the Volkswagen Group’s premium
MLB Evo architecture and delivering five
seats and a phenomenal 810 litres of lug-
gage capacity.
It’s the interior that will gain the most
traction, though, with its new, optional
Innovision multimedia screen. The radical
curved 15-inch touch-screen (bigger than an
iPad Pro) replaces traditional MMI screens
and joins the 8.0-inch digital instrument
cluster to create a 23-inch Innovision digital
shield.
The big screen arrives in the new SUV
largely thanks to an expensive interior
development program that would have
been shared with the now-cancelled Pha-
eton II limousine.
The first powertrains will be limited to
two variants of the 3.0-litre turbodiesel V6
and a mild-hybrid version of the turbo-fed
3.0-litre petrol V6.
All engines will use all-wheel drive and
an eight-speed automatic transmission, and
it all nestles inside an advanced chassis with
a five-link rear suspension and a four-link
front-end.
Higher-priced models will be available
with such tricks as electronically-driven
anti-roll bars, four-wheel steering and active
March 30 - April 05 2018
air suspension.
While the first-generation Touareg had a
low-range gearbox, it’s moved on since then
and instead relies on pre-mapped suspen-
sion, transmission, steering and skid-control
packages.
They range from push-button Snow to
Off-Road Auto, Sand and Gravel settings all
the way to Off-Road Expert. There’s also an
Off-Road Pack as an option.
The three-chamber active air suspension
also helps with the off-road work, dropping
50mm in ride height at highway speeds to
improve handling and lower fuel consump-
tion, then rising 70mm in the car’s off-road
mode. It also drops even further to help
people load the luggage area.
It runs a stunning array of safety systems,
including infra-red thermal-imagining cam-
eras to deliver night vision, radar and LiDar
to give it all the hardware it needs for Level
3 autonomy (though it’s restricted to active
cruise control for now).
There’s also autonomous emergency
braking 2.0, plus the LED matrix headlights
can flash at highlight pedestrians or animals
to warn the driver of their approach.
After its world debut at next month’s
Beijing motor show, the new Touareg goes
on sale globally later this year.
Soure: Internet
37
Profile

Bina Babie on not dating for four years

B
ina Babie real names Robina Mba- the path to a stable relationship. “With my own trials and tribulations
bazi Mulera is a radio presenter on She also started ‘Maama Wange’ health including my struggles to conceive, I decid-
Dembe FM. She has presented the camp that runs every month of May to ed to give back to expectant mothers,” said
mid-morning show, `Mubeezi’ for help expectant mothers seek antenatal ser- Bina Babie.
the last 16 years and she says looks forward vices from experts in one place. The idea is Before joining Dembe FM, she had
to continue doing it. She says it all about drawn from her own experience. worked with Uganda Broadcasting Corpo-
her attachment to her fans and listeners. In ration formerly UTV and Radio Uganda as
2016, she was awarded in the RTV a teens show presenter and excitedly recalls
awards as the ‘Face of Radio’. being trained trained and nurtured by
This is one of her most out- one of Uganda’s greatest presenters, Baale
standing achievements in Francis (RIP). After four years, she joined
her media journey. Dembe FM.
“I chose to do Interestingly, the popular radio presenter
things differently; for had wanted to become a medical doctor
instance to share in and was only failed by the fear of the sight
the trials and tribu- of dead bodies. She even joined medical
lations of my listen- school and kept in there for just a month
ers by counseling until she could not take it any longer.
them and offering She eventually dropped the pro-
solutions where I gramme and took on a course in
can,” she says. accounting at Nkumba Univer-
“That explains sity. She has never practiced.
why I want to Bina Babie is the first
be remembered born in a family of five
as a person who children. She went
invested her life in to Lugogo Nursery
being a voice for School, Kitante Primary
the voiceless”. School and Trinity Col-
She has fond lege Nabbingo. She
memories in her completed high school
journey. One that stands at St. Josephs Nag-
out is her encounter, three galama.
years back, with one of her
listeners - a former prostitute
who was depressed that nobody
loved her.
“I had actually given up on helping her
until she mentioned that if I don’t meet her,
she would commit suicide,” Bina Babie
says.
From her story Bina Babie got to know
that some women are prostitutes not
out of choice but due to pressure of
circumstances. She eventually quit
prostitution and Bina Babie and
her listeners raised money to
enable her study bakery
and cookery and start
a business. The other
touching story was
of a hermaphrodite
whom Bina Babie
and the listeners
raised money
for a surgery
that set him on

38 March 30 - April 05 2018


Bina Babie’s Liteside
Any three things we don’t
I
know about you?
am a very reserved person
and yet people think that
I am very outgoing. I only
do it for the job otherwise
if it wasn’t for it, my real
character boils down to being
reserved.
I don’t take alcoholic drinks
even when some people think
that I do. Others say that it’s a
character trait of most media
personalities.
I haven’t dated in four
years and its one of the
things people find it difficult
to believe but I chose that
path because of what I went
through trying to conceive.
Bina Babie is a God fearing
person.
What is your idea of perfect
happiness?
Putting a smile on
someone’s face because I
believe that I am blessed and
in a way, I do it to thank God.
Even when I have had a long
day, playing with kids just
brings about happiness.
What is your greatest fear?
The thought of trying to
conceive and fail again is my
greatest fear.
What is the trait you most
deplore in yourself?
When I started working on
radio, I became talkative - so
if go silent, others consider it
being arrogant.
What is the trait you most
deplore in others?
Being negative; there
are people who are always
negative and never see any
positivity in life.
Which living person do you
most admire?
My mother, Kate Mulera
Atenyi Baryahaba, is not only
the most beautiful woman
that I have ever seen but
also very hardworking and
inspirational.
What is your greatest
extravagance?
I love perfumes and
handbags. It’s crazy but I just
love smelling good.
What is your current state of
mind?
I am happy.
What do you consider the
most overrated virtue?
We have all focused on
investing in one part of the
chain in agriculture and
that is growing food. Most
people don’t think beyond
what will happen to other
sections of the chain like
marketing, value addition and
post-harvest handling yet we
need to balance if we are to
maximize the benefits.
What does being powerful
mean to you? It was also a happy moment
In Uganda, power comes
with wealth. However,
I would relate power to
knowledge and intelligence.
On what occasion do you lie?
I strive to stay away from
lies because I also like to deal
with honest people.
What do you most dislike
about your appearance?
Incidentally, when you
grow and happen to discover
things, you acknowledge that
we are all created in the image
of God.
Which living person do you
most despise?
My character doesn’t allow
me to despise people because
I believe that all human
beings are not righteous just
as we all have strengths and
weaknesses.
What is the quality you most
like in a woman?
Hardworking and caring.
What is the quality you most
like in a man?
God fearing, hardworking,
knowledgeable, intelligent,
understanding and an
adviser.
What or who is the greatest
love of your life?
I love my mother because
she is endowed with all the
character of a good woman.
When and where were you
happiest?
My happiest moments are
work related. When I was
appreciated and awarded as
the ‘face of radio’ in 2016 at
the RTV awards. I was also
happy after my first operation
for fibroids. I thought I would
not make it back but God
gave me another opportunity.
when we successfully
had an operation for one
of my listeners who is a
hermaphrodite.
Where would you most like
to live?
Uganda is where my
network lies and as long as
there is peace, I can negotiate
for the rest.
What is your most treasured
possession?
Radio is all about the voice
and it is the same thing that
qualified me as the face of
radio so I treasure my voice
for the sake of my career.
What do you regard as the
lowest depth of misery?
I have nursed and lost
about three close people and
eventually lost them to HIV/
March 30 - April 05 2018
Q&A
AIDS. It’s the very reason, I
keep telling people to test for
HIV however hard it may be.
What is your favorite
occupation?
At this age, the comfortable
job I would do is Public
Relations because therein lies
my strength.
What do you most value in
your friends?
Trust, hardworking and
being positive about life.
Who are your favourite
writers?
I am fascinated more by
inspirational writings for
instance ‘Beauty begins’ by
Chris Shook and Megan
Shook. The book is a reminder
that God can intervene at
any point and provide a way
forward.
Who is your hero of fiction?
I love to face the real world.
Which historical figure do
you most identify with?
Baale Francis had the
zeal for his job. He was so
passionate about his job to
the extent that he would edit
his stories even when there
were editors assigned to do
the job. He also worked so
selflessly aiming to succeed at
whatever he chose to do. He
was never self-centered like
many people.
How would you like to die?
I would prefer a painless
death; for instance in my sleep
with a smile.
What is your motto?
Just be grateful, do good,
serve others, think good
about others and you will
be blessed.
39
Global comment
By Biniam Bedasso
Africa’s fallen liberators
South Africa has safeguards against ruling party
decay, Ethiopia can’t be saved from its ruling party
T
he leaders of two key African coun-
tries resigned their posts within 24
hours of each other in mid-February.
South Africa’s Jacob Zuma finally
buckled under pressure from his own party
to resign the presidency. The following day,
Ethiopian Prime Minister Hailemariam De-
salegn announced his decision to step down
in the face of sustained mass protests and
political turmoil.
In both cases, two of the oldest lib-
eration parties in Africa, which have
remained in office since first coming
to power a quarter-century ago, were
forced by deep popular discontent to
push their leaders aside. The historical
trajectories of both parties are largely
similar. Nevertheless, the effects of their
leaders’ exit could not be more different.
Yes, both the African National Congress
(ANC) in South Africa and the Ethiopian
People’s Revolutionary Democratic Front
(EPRDF) grew complacent and corrupt,
and suffered political decay, over the
past quarter-century. But whereas South
Africa had put in place a robust set of
institutional safeguards in the wake of
its transition from apartheid, Ethiopia,
after the overthrow of Mengistu Haile
Mariam’s dictatorship, never managed to
build national institutions strong enough
to save the country from the ruling party.
Despite obvious differences in the
two countries’ histories and economic
conditions, the way their dominant par-
ties conduct business, and the economic
model they claim to have adopted, are
strikingly similar. Both the ANC and the
EPRDF espouse the Leninist principle
of democratic centralism, according to
which party members are expected to
abide by the policies established by the
central party leadership. Both parties
deploy cadres widely to ensure that the
civil service carries out political deci-
sions. More recently, party elites in both
countries have moved to embrace het-
erodox economic policies.
The ANC has been accused of losing
touch with its impoverished voters in
one of the most unequal countries on
earth. Making matters worse, the mas-
sacre in 2012 of 34 miners by police
in Marikana revived memories of the
apartheid regime’s contempt for blacks.
Regardless, the ANC, accustomed to
40 March 30 - April 05 2018
winning well above 65% of the vote
(mainly owing to its liberation creden-
tials), continued to back the embattled
Zuma, who faces accusations ranging
from bribery to rape. Governance dete-
riorated as the economy stagnated and
corruption and state capture proceeded
apace. The party of Nelson Mandela
risked succumbing to internal rot – and
taking the country down with it.
Meanwhile, in Ethiopia, the EPRDF
harangued the public about how it freed
the country decades ago from a brutal
military dictatorship, even as millions
of young people born and raised under
the party’s rule face crippling unemploy-
ment. The EPRDF continues to imply
that any failure by its leadership does
not undermine its right to govern the
country, while political challenges by
opposition groups are portrayed as trea-
sonous. Like the ANC, the longer the
EPRDF remained in power, the less it
could imagine Ethiopia without it at the
helm.
When Zuma announced his resigna-
tion, the South African Rand jumped
to a three-year high. But after Desalegn
announced his decision to step down,
Ethiopia’s dollar bond fell to a six-month
low. These indicators, however, are just
the start of the divergent implications
the two resignations have had for their
respective countries’ politics and eco-
nomics.
The ANC and EPRDF, like many of
Africa’s liberation movements in the
1960s, stopped responding to evolving
political and economic demands, while
predatory politicians and their cronies
hid behind the party’s banner. But while
Zuma’s successor, Cyril Ramaphosa,
promised a “new dawn” for South Africa
when he addressed Parliament within
days of Zuma’s resignation, Ethiopia
declared a state of emergency around
the same time, amid widespread concern
about whether the state would survive
the ethnically charged power struggle to
succeed Desalegn.
The crucial difference is that South
Africa had visionary leaders who were
aware of the danger that an out-of-touch
dominant party could pose. Mandela
reportedly urged newly enfranchised
black South Africans, “If the ANC does
to you what the apartheid government
did to you, then you must do to the ANC
what you did to the apartheid govern-
ment.” This sentiment was reflected
in the democratic checks and balances
enshrined by South Africa’s post-apart-
heid constitution.
Ethiopia, however, has not been so
fortunate, particularly because the cur-
rent regime spent its first decade in office
shoring up its precarious power base and
fighting a war with neighboring Eritrea.
But the EPRDF made matters worse by
undermining the constitution that it
helped promulgate, and appearing to
have no plan for nation building beyond
supposedly rectifying historical inequali-
ties between ethnic communities (though
it succeeded in stimulating faster eco-
nomic growth than the country had ever
recorded in modern times).
The most telling indicator of how dif-
ferently the two countries’ democratic
institutions responded to the perceived
decay of their dominant parties is the
recent election results. The ANC kept
losing electoral ground to rival parties
as its leadership failed to manage South
Africa’s multifaceted problems. It was
to stem further electoral losses that the
party decided to push Zuma aside.
The EPRDF, by contrast, turned Ethi-
opia into a de facto single-party state. The
country began its descent into political
turmoil a few months after the party
claimed to have won, together with its
allies, all parliamentary seats in the 2015
elections. In mid-February, South Afri-
ca’s democratic institutions appeared to
have saved the ANC from itself. Ethiopia
is unlikely to be so fortunate. Too few
institutional guardrails have survived
the neglect or active dismantling that the
EPRDF brought about.
Biniam Bedasso is a Global Leaders Fellow
at the Blavatnik School of Government,
University of Oxford.
Copyright: Project Syndicate, 2018.
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