Stanbic Bank
Stanbic Bank
25.4 C
Kampala
Stanbic Bank
Stanbic Bank
Home Blog Page 1534

Gripping corruption in Uganda hampers U.S companies from investing in the economy- Amb. Malac

By
Geoffery Serugo
-

Kampala: U.S. Ambassador to Uganda Deborah Malac says gripping corruption in Uganda has become a major obstacle that is hampering U.S companies from investing in Ugandan economy.

Every year, Uganda loses billions of shillings to corrupt officials hence retarding the thriving of Ugandan economy. According to Corruption Perceptions Index of 2017, Uganda is ranked number 151 out of 180 in terms of Transparency, fighting the vicious vice and taking bribes.

The sum of money that is lost to corrupt official every day could be used for building schools, improving healthcare, roads and growing the economy.
Speaking at the 242nd US Independence Day celebrations Malac said, for Uganda to prosper, the first step to be taken is reducing corruption adding it has complicated the competition for investment dollars is in Uganda and Africa as continent.

“If the rules of the road are unclear or are ignored, or if decisions are delayed in the hopes of ‘facilitation’, legitimate, world-class companies will go elsewhere taking their job-creating opportunities with them,” she said at US embassy.

Malac said, U.S. companies expect a level playing field when it comes to business opportunities, “we hear too many stories of contracts being ignored and U.S. companies that are cheated,” added us ambassador.

“USA is committed to working in partnership with Ugandans to achieve the brighter future and that is what we all want to see for this country, we are here to support Ugandans and to help create opportunities so that all Ugandans can shape their future,”

In spite of the shooting cases of corruption, government is playing a critical role in curbing the vice. Currently there is an ongoing prosecution of former Principle Accountant in the Office of the Prime Minister Geoffrey Kazinda, The former Managing Director for National Social Security Fund (NSSF) David Chandi Jamwa, Former Minister of Works and Transport Engineer Abraham Byandala among other cases.

Stories Continues after ad

¬¬Ten key insider rules for every new venture founder

By
Guest Writer
-
Martin Zwilling

By Martin Zwilling

After many years as a mentor to aspiring entrepreneurs, and an occasional angel investor, I realized that new venture founders all seem to stumble on similar pitfalls, despite my best efforts to steer them to smoother routes. Of course, I would never say never, and passion does overcome many obstacles, but it still pays to learn from a few key lessons of others before you.

You may not be ready to absorb all one-hundred insider rules I found in a new book, Straight Talk For Startups, by Randy Komisar and Jantoon Reigersman, so I’m offering here a selection of my top ten from their list, adding my own insights. For the rest, these authors come with a wealth of startup and venture capital experience, with real-life examples to back up all their rules:

Starting a venture was never easier – succeeding never harder. In the early days (20 years ago), most new e-commerce businesses, for example, cost a million dollars to set up. Now the price is closer to $100 if you are willing to do the work yourself. But “easier” brings more new startups, with more competition determined to rise above the crowd.

Aim for an order-of-magnitude improvement. Make sure your idea has real customer value, a large opportunity, and a sustainable competitive advantage before you start. “Nice to have” or a ten percent cost advantage alone doesn’t make it these days. To get investor and customer attention, you need a tenfold improvement in cost or function.

Know your financials and interdependencies by heart. Most of the tech entrepreneurs I know pay minimal attention to the financials. They assume that “if we build it, they will come.” Early investors expect you to explain five year revenue projections, gross margins, and break-even. At rollout, you need to add cash flow and customer acquisition.
Net income is an opinion, but cash flow is fact. A large customer like Walmart will provide a large net income, but can easily kill you with cash required for inventory and receivables cycles. I recommend that every startup CEO sign every check personally, and be miserly in managing payables and expenses. Out of cash means out of business.

Don’t accept money from people you don’t know well. Many entrepreneurs argue that the color of the money is the same from all sources. They fail to realize that investors are like spouses, requiring chemistry and a complementary win-win relationship for long-term success. Take your time courting investors, and get views from peers and advisors.

Avoid professional investors unless you absolutely need them. If you don’t want a boss, don’t look for an investor, since they can be the toughest boss you ever had. Fund it yourself and grow organically to avoid the cost, pain, and time of finding angels or VCs, and keep control and equity for yourself. Over ninety percent of startups today are self-funded, or use only friends and family.

Don’t let a short-term fix become a permanent mistake. Crowdfunding, for example, may seem like a good fix for initial funding, but usually precludes professional investors later if needed to scale the business. The same is true if you accept unusual valuations or term sheet options to close a specific deal. Every investment has long-term implications.

More ventures fail from indigestion than starvation. Raising too much money can be a curse. Early ventures with too much cash lose focus and are reluctant to pivot. Founders should ask for funding in stages, as the venture builds momentum, decreases its risks, and increases valuation. Hungry entrepreneurs are always the most creative.

The founder should choose the best CEO available. Most often, new venture founders are the solution builder, visionary, and the first CEO. Yet many don’t have the interest or experience to scale the business. Don’t let your ego prevent you from stepping into a better fitting role as the business evolves. It’s more fun than failing or being pushed out.

Choose an exit strategy – don’t wait for it to find you. The best exit for most startups these days is to be acquired by a major player, rather than going public (IPO), or staying private too long. It’s best to start early in courting potential acquirers or investment bankers, rather than waiting for them to swoop in and knock you off your feet.

In addition to these rules, I also want to second the cardinal rule that every entrepreneur needs to be able to explain why the proposed new venture is important to them, to others, and worth all the blood, sweat, and tears that will likely be involved. Only then will I believe that you that you have the potential to beat the odds and change the world, and have some fun at the same time.

The Writer is a veteran startup mentor, executive, blogger, author, tech professional, and Angel investor. Published on Forbes, Entrepreneur, Inc.

Stories Continues after ad

DFCU’s board member resigns, letter confirms CDC wants to exit

By
George Mangula
-
dfcu bank

As key shareholders plan to exit DFCU Bank, other changes are also taking place. The latest is that one of an influential director on the bank’s board, Deepak Malik has resigned his position, further complicating matters.
Deepak Malik serves as the Chief Executive at Arise B.V. He also serves as the Head of Department – Financial Institutions and part of the management team at Norfund.

Arise B.V. first acquired a majority stake of over 50 percent in dfcu Limited, the holding company of dfcu Bank after lending US$50 million in February 2017. The money was to help DFCU Bank meet its short-term capitalisation needs after it controversially took over Crane Bank in January 2017.

Arise B.V. acquired the stake in DFCU Bank from two previous largest shareholders of DFCU Bank-Rabo Development B.V and Norfinance AS (Norfund) which had a 27.54 percent stake each to become the largest majority shareholder in DFCU Bank.

The South Africa-based company was to support DFCU Limited via long-term investment in the bank’s growth ambitions, especially to enable the bank to improve its market position and efficiencies especially after acquiring Crane Bank Limited in a deal many analysts believe had financial flaws.

Malik’s resignation as a non executive director means the DFCU board is now left with five other non-executive directors led by All Elly Karuhanga as Chairman. Others directors are; Albert Jonkergouw, Winifred Tarinyeba- Kiryabwire, Frederick Kironde Lule and Michael Alan Turner.

Analysts say the Malik’s decision to resign confirms reports that Arise B.V. intends to leave especially that Britain’s Commonwealth Development Corporation (CDC) Group intends to exit, following DFCU Bank’s controversial acquisition of Crane Bank Limited in January last year at only Shs200 billion yet Crane Bank had assets worth over Shs1 trillion.

Reports indicate that CDC is leaving for various reasons which include poor economy but some sources say CDC wants to dodge paying taxes on its dividends. Other sources intimated to Eagle Online that top executives at Arise B.V. decided to plan exiting DFCU Bank in fear that CDC was leaving them trouble, they being new and majority shareholders of DFCU Bank.

The contents in CDC’s exit letter
The letter confirming CDC’s plans to exit DFUC Bank reads in part: “After a period of over 50 years as a shareholder, it our aspiration to exit in a manner that causes minimum disruption to the business and ensures the orderly trading of DFCU’s shares. Further, CDC’s objective is to identify like-minded investors who could support DFCU in its new phase of growth. CDC is of the view that the bank will continue to succeed with the support of Arise B.V., its majority shareholder.” The letter addressed to Karuhanga on June 14, 2018.

CDC in a letter, says partly that it had previously discussed the sale of its shares with Karuhanga as DFCU chairman. The shares, according to the letter, may be sold in short and medium term.

“With the knowledge of the company and Arise B.V., we have held preliminary discussions with a small number of potential investors.

Two of those potential investors, Cranemere Africa Limited and responsibility Investments AG (the Strategic Investors), would like to be formally introduced to DFCU’s board and move into a due diligence phase. We therefore request that DFCU’s management support the due diligence process with the Strategic Investors.

Clearly all discussions and disclosures should be subject to confidentiality agreements between DFCU and Strategic Investors and should take place within the regulatory framework set by the Uganda Securities Exchange and the Capital Markets Authority,” the letter reads in part.

According to Irina Grigorenko-CDC’s investment director who wrote the letter, no transaction has yet been approved by its investment committee. Any decision by CDC to sell its shares in DFCU would be subject to the approval of the investment committee of the terms of the sale as well as the agreement of legal documentation.

Financial analysts say with the on-going investigation of the Bank of Uganda top executives over the sale of Crane Bank and others like the National Bank of Commerce, big shareholders of DFCU are spending sleepless nights. The situation is made worse as the case is also in court.

Back to Malik
Mr. Malik joined Norfund as an Investment Director in 2003 where his efforts were spent in promoting Norwegian investments in Southern Africa and the region.

He was previously the Regional Director of South Africa at Norfund. He has started his career at SIEMENS (India) in 1982, after which he opened a private consultancy in 1984, specialising in financial services. He was then appointed as audit manager for KPMG in 1988, following which he became Financial Director for ZAL HOLDINGS (Ltd) – a subsidiary of Zambia Consolidated Copper Mines Limited.

In 1993 he became the Financial Controller for Mulungushi Investments and in 1994 was appointed as the Manager Operations Accounting. In 1995 he was appointed General Manager for Group Procurement. Mr. Malik was responsible for the regional office for Africa. He served as an Acting Head of Department Financial institutions and SME at Norfund.

He also served as the Regional Representative at The Industrialization Fund for Developing Countries, of Denmark. Previously, Mr. Malik’s vast experience included his roles as a Managing Director and Chief Executive Officer at the Development Bank of Zambia, as a General Manager at Zambia Consolidated Copper Mines and as an Audit Manager at KPMG. He serves as the Chairman of AfriCap Microfinance Investment Company. He is on the Board of Directors of various companies, including financial institutions and private equity funds.

He is a Non-Executive Director of Real People (Pty) Ltd. since July 20, 2011. He serves as a Non-Executive Director at Equity Group Holdings Limited. He is a Non-Executive Director of Equity Group Holdings Limited since April 29, 2015. He had served as a Non-Executive Director of Real People Investment Holdings Limited since May 28, 2015. He served as a Board Member of Norwegian Microfinance Initiative.

He served as a Director of NMBZ Holdings Limited and NMB Bank Limited from January 31, 2014 to October 22, 2014. He is also the Head of Financial Institutions Department of Norfund, covering Africa, South Asia and Central America.

He is also part of the Executive Management team of Norfund. He has over 35 years’ experience and has a diverse experience in general management, development banking, banking, private equity, audit, microfinance, corporate and public finance, project financing, financial restructuring and privatization in emerging markets, mining, procurement and financial management.

His specialization is working with multilateral/bilateral financial institutions and he also has an extensive knowledge of developing countries. He is a qualified Chartered Accountant. He holds a Bachelor of Commerce (Honors) from the University of Delhi, India.

vity: 0 minutes ago
Details

Stories Continues after ad

Low quality healthcare is increasing burden of illness and health costs globally, says new report

By
George Mangula
-

Poor quality health services are holding back progress on improving health in countries at all income levels, according to a new joint report by the OECD, World Health Organization (WHO) and the World Bank.

Currently, the report says, inaccurate diagnosis, medication errors, inappropriate or unnecessary treatment, inadequate or unsafe clinical facilities or practices, or providers who lack adequate training and expertise prevail in all countries.

The report says the situation is worst in low and middle-income countries where 10 percent of hospitalized patients can expect to acquire an infection during their stay, as compared to seven percent in high income countries.

“This is despite hospital acquired infections being easily avoided through better hygiene, improved infection control practices and appropriate use of antimicrobials.. At the same time, one in ten patients is harmed during medical treatment in high income countries,” says the report.

These are just some of the highlights from Delivering Quality Health Services – a Global Imperative for Universal Health Coverage. The report also highlights that sickness associated with poor quality health care imposes additional expenditure on families and health systems.

There has been some progress in improving quality, for example in survival rates for cancer and cardiovascular disease. Even so, the broader economic and social costs of poor quality care, including long-term disability, impairment and lost productivity, are estimated to amount to trillions of dollars each year.

“At WHO we are committed to ensuring that people everywhere can obtain health services when and where they need them,” said WHO Director-General Dr Tedros Adhanom Ghebreyesus while giving his view on the situation. “We are equally committed to ensuring that those services are good quality. Quite honestly, there can be no universal health coverage without quality care,” he said.

“Without quality health services, universal health coverage will remain an empty promise,” said OECD Secretary-General Ángel Gurría. “The economic and social benefits are clear and we need to see a much stronger focus on investing in and improving quality to create trust in health services and give everyone access to high-quality, people-centred health services,” he said.

“Good health is the foundation of a country’s human capital, and no country can afford low-quality or unsafe healthcare,” World Bank Group President Jim Yong Kim said, adding that low-quality care disproportionately impacts the poor, which is not only morally reprehensible, it is economically unsustainable for families and entire countries.

Other key findings in the report paint a picture of quality issues in healthcare around the world:

Health care workers in seven low- and middle-income African countries were only able to make accurate diagnoses one third to three quarters of the time, and clinical guidelines for common conditions were followed less than 45 percent of the time on average.

Research in eight high-mortality countries in the Caribbean and Africa found that effective, quality maternal and child health services are far less prevalent than suggested by just looking at access to services. For example, just 28 percent of antenatal care, 26 percent of family planning services and 21 percent of sick-child care across these countries qualified as ‘effective.’

Around 15 percent of hospital expenditure in high-income countries is due to mistakes in care or patients being infected while in hospitals.

The three organisations outline the steps governments, health services and their workers, together with citizens and patients, urgently need to take to improve health care quality. They say governments should lead the way with strong national health care quality policies and strategies.

Health systems, they say, should focus on competent care and user experience to ensure confidence in the system. “Citizens should be empowered and informed to actively engage in health care decisions and in designing new models of care to meet the needs of their local communities,” they say.

The organisation argue that health care workers should see patients as partners and commit themselves to providing and using data to demonstrate the effectiveness and safety of health care.

Stories Continues after ad

CECAFA Kagame Cup: Vipers to face Gor Mahia in quarter-finals

By
Our Reporter
-

Vipers will face Kenyan giants Gor Mahia who finished top of Group B, in the quarter-finals of the 2018 CECAFA Kagame Cup on Sunday at the Benjamin Mkapa Stadium in Dar es Salaam.

Gor Mahia qualified as group leaders basing on the FIFA fair play rule after accumulating less yellow cards (4) compared to Rayon Sports who accumulated 5 bookings because both teams were tied on the same points.

The Uganda Premier League reigning champions qualified for the quarter-finals after defeating Sudanese side Kator FC 3-0 at the National stadium in Dar es Salaam.

After two consecutive 1-1 draws with JKU and Azam FC in the opening two games, Vipers needed a win to confirm their spot in last eight of the tournament.

Duncan Sseninde, Steven Mukwala and Yayo Lutimba scored for Vipers to make sure The Venoms finish second in group A. Azam FC topped the Group with seven points.

The winner between Gor Mahia and The Venoms will take on the victor between Azam and Rayon Sport in the first semi-final.

Daniel Sserunkuma will have a chance to play against his former side that he led to a league title in the 2014 season where he was the top scorer and became a fans’ favourite.

In the other quarter-final fixtures, Rayon Sport faces holders Azam FC of Tanzania, Simba (Tanzania) takes on AS Port of Djibouti and JKU (Zanzibar) plays Singida of Tanzania.

The quarterfinals will be played on Sunday and Monday while the semifinals on Wednesday. The final will be played on Friday, 13th July 2018.

The last time a Ugandan team won the championship was back in 2005, Police FC under Sam Timbe by defeating Moro United 2-1 in the final.
The CECAFA Club Cup is a football club tournament organised by CECAFA.

It has been known as the Kagame Interclub Cup since 2002, when Rwandan President Paul Kagame began sponsoring the competition.
Azam FC from Kenya are the defending champions after they defeated Gor Mahia 2-0 while Simba from Tanzania are the record holders of the competition winning it six times.

Stories Continues after ad

DFCU Bank in crisis as major investor Arise B.V. trails Britain’s CDC in exit plans

By
Our Reporter
-
TO REWWARD BEST INVESTMENT CLUB: The headquarters of dfcu Bank in Uganda

Arise B.V., an investment company based in Cape Town, also intends to quit DFCU Bank following reports that Britain’s Commonwealth Development Corporation Group (CDC) was secretly looking for a buyer of its 10 percent stake in the bank that controversially bought its rival Crane Bank in January last year.

Reports indicate that CDC is looking for another offshore company to buy its shares after reaping huge profits in the year 2017/18.
Arise B.V.acquired a majority stake in DFCU Limited, the holding company of DFCU Bank after lending US$50 million in February 2017 to the bank to help it meet short-term capitalisation needs after it controversially took over Crane Bank in January 2017.

Arise B.V acquired the stake in DFCU Bank from two previous largest shareholders of DFCU Bank-Rabo Development B.V and Norfinance AS (Norfund) which had a 27.54 percent stake each.

Arise B.V.was to support DFCU Limited via long-term investment in the bank’s growth ambitions, especially to enable the bank to improve its market position and efficiencies.

Arise B.V’s plans to quit DFCU has surprised many in the industry but the company has not given reasons that have forced it to take that option.

Insiders however say the company’s shareholders are not happy with the way in which DFCU’s local managers executed the Crane Bank deal that has become suspicious. DFCU Bank is said to have paid Shs200 billion for Crane Bank’s assets even as the Ugandan taxpayer had paid the similar amount to recapitalise Crane Bank before it was sold off by the Bank of Uganda.

Meanwhile, sources say CDC’s Investment Director Irina Grigorenko wrote a confidential letter to DFCU Bank Chairman, Elly Karuhanga announcing CDC’s desire to exit the now messy and turbulent Uganda banking economy which is faced with a low value shilling, increase on excise duty from 10 percent to 15 percent, 0.5 percent tax on mobile money transactions and poor savings culture.

Reports indicate that CDC wants to evade taxes on profits accrued as a shareholder in DFCU Bank and silently floating another foreign financial shareholder in CranemerebAfrica Limited and responsiAbility Investment AG to become the strategic investors to replace CDC and allow it to exit the market minus paying taxes to the Uganda Revenue Authority (URA).

CDC said in its letter to DFCU that with the knowledge of the company and Arise B.V., “we have held preliminary discussions with a small number of potential investors” which include Cranemere Africa Limited and responsAbility Investments AG.

Cranemere is a holding company for major businesses in the United States and Europe. Its shareholders are major families and institutions from the United States, Europe, the United Kingdom, Latin America, and the Middle East.

However Sources at URA say CDC has not written to them of its intention to sell off its shares to a third party 6 or expressed any obligations to pay the necessary taxes on dividends.

Financial analysts say this development will most likely affect DFCU’s core capital and it will further complicate DFCU’s legal status as the bank is still struggling with a buttress of court cases which arose out of out of Bank of Uganda’s decision to close several banks such as Crane Bank and National Bank of Commerce among others.
Grigorenko, said it was “undertaking a review of its investment in DFCU Limited which may lead to the disposal or some of some or all of its shares in DFCU over the short to medium term.”

DFCU is accused of conniving with some top Bank of Uganda executives to takeover Crane Bank at a throw away price and this has resulted into legal battles as CBL shareholders insist that the transaction wasn’t transparent.

DFCU’s total assets increased to a record Shs3 trillion, up from Shs1.7 trillion in 2016, like explained the boost in assets was a result of the acquisition of its rival Crane Bank. There is a pending case in court where former owners of Crane Bank are seeking recovery of assets, more so fixed assets.

The statement shows that DFCU’s core capital increased to Shs362 billion in 2017, up from Shs188 billion in 2016.

Records show that DFCU made an impressive Shs127.6 billion net profit in the year ended December 2017, up from Shs46.2 billion earned in 2016, which was an increase of 176.2 per cent.

The bank’s shareholders of CDC of Britain and others from Norway, Netherlands made abnormal profits when proposed dividends increased to Shs51 billion in 2017, up from Shs18.5 billion in 2016. It is suspected that CDC wants to pull out to avoid paying taxes or avoid losses in case Uganda’s economy continues to fail as the shillings weakens further against foreign currencies.

DFCU Shareholding percentages

Arise BV 58.71 per cent
CDC Group of the United Kingdom 9.97 per cent
National Social Security Fund (Uganda) 7.69 per cent
Kimberlite Frontier Africa Naster Fund 6.15 per cent
2 undisclosed Institutional Investors 3.22 per cent
SSB-Conrad N. Hilton Foundation 0.98 per cent
Vanderbilt University 0.87 per cent
Blakeney Management 0.63 per cent
Retail investors 11.19 per cent
BoU staff retirement benefit scheme is 0.59 per cent

Stories Continues after ad

Delegates support second phase of building regional border posts

By
George Mangula
-
Busia One Stop Border Post

Delegates at the 15th Meeting of the Sectoral Council on Transport, Communications and Meteorology (TCM) have agreed on the proposal to develop Phase II of the One Stop Border Posts (OSBPs) as well as the need to fast track the implementation of Vehicle Load Control and OSBPs Acts.

According to the latest press release, in an effort to further enhance the sub-sector in the region, the delegates sitting in Arusha, Tanzania recently also approved the EAC Railway Enhancement Study report and the EAC Postal Strategy.

In his remarks, Aggrey Bagiire, Uganda’s Minister of State for Works and Transport said there was need to make headway on air transport services liberalization and the EAC roaming framework.

the EAC Deputy Secretary General in charge of Planning and Infrastructure, Eng. Steven Mlote, said there were considerable developments that are being registered in the infrastructure subsector in the region including the fast pace in the development of multinational roads, the rapid expansion of airports and national airlines, the on-going development of the Standard Gauge Railway (SGR) on the Northern and Central corridors, the expansion of seaports, as well as the increase in mobile penetration and related mobile services.

“The EAC Heads of State, during the Joint EAC Heads of State Retreat on Infrastructure and Health Financing and Development held on 22nd February 2018, approved 286 projects including 17 flagship projects for championship at the Heads of State Level, whose total investment requirement amounts to US$ 79 billion,” Mlote said.

Eng. Mlote further emphasized that political support and leadership by the Ministers responsible for infrastructure sectors was a critical factor for successful implementation of the identified regional priority projects.

The meeting discussed various projects and programmes under the Infrastructure sub-sectors – roads, railway, civil aviation and airports, maritime transport, meteorology and communication.

The meeting was attended by ministers Permanent and Principal Secretaries and senior officials of the EAC Partner States responsible for infrastructure sectors, Civil Aviation Safety and Security Agency (CASSOA), the Lake Victoria Basin Commission (LVBC) and the EAC Secretariat. Also in attendance as observers were representatives from the East African Communications Organizations (EACO), Trademark East Africa (TMEA), Intergovernmental Authority on Development (IGAD), IGAD Climate Prediction and Application Centre (ICPAC), World Meteorological Organisation (WMO) and African Civil Aviation Commission (AFCAC).

Stories Continues after ad

Banks expect businesses to borrow more, default more on dollar loans-BOU

By
George Mangula
-
Standard Chartered Bank headquarters in Kampala

The latest Bank of Uganda (BOU) findings from the survey for the period April – June 2018, as well as expectations for July – September 2018, show that most banks anticipate an increase in the demand for credit, largely influenced by more business opportunities and expected investments in the oil and gas sector.

According to the Bank Lending Survey Report Fourth Quarter – FY 2017/18, the banks also expect the default rate on loans to businesses to increase mainly because of the likely impact of the depreciation of the Uganda shilling against the dollar, particularly from businesses that borrowed in foreign currency.

Following the reduction in Central Bank Rate for June 2018, the cost of funds to banks is expected to reduce, which will lead to reduction in pricing of loans, says BOU. The survey shows that a few banks expect their lending rates to decrease.

The survey shows that banks reported eased credit standards on net basis at 5.9 per cent in the quarter ended June 2018 compared to 17.2 per cent recorded in March 2018. The overall net easing was much lower compared to the net easing of 21.7 per cent that banks had anticipated in the previous survey.

Across firm size, credit standards were eased at a slower pace compared to the previous quarter for SMEs (from 35.5 per cent to 0.2 per cent) and tightened at a higher pace for large enterprises (from 10.6 per cent to 15.4 per cent).

In terms of loan duration, banks eased credit standards at a slower pace for short terms loans and increased tightening for long term loans in the quarter ended June 2018. Key reasons cited for the overall easing include: stable lending rates accompanied by stable prices in agricultural output, efforts to grow the loan
Credit Standards by Economic Sector.

In terms of credit standards to the different economic sectors; the report shows that manufacturing, agriculture, electricity and water, business services and trade registered a net easing while the rest of the sectors registered net tightening in the quarter ended June 2018.

Reasons given for net easing for manufacturing sector were increased demand for credit and continued reduction of Central bank rate. Other reasons cited were increased competition from other financial institutions and favorable weather conditions.

The building, mortgage, construction and real estate sector registered the highest net tightening (18.6 per cent) on account of low uptake in the sector arising from difficulties already being experienced in loan service in this sector. This was followed by personal and household (4.6 per cent) and Transport (1.2 per cent). Respondents indicated that the tightening was due to the high default rates observed in these sectors.

With regards to the observed decline in the central bank rate (CBR), banks were further requested to provide their opinions on the slow decline in the lending rates on new loans to borrowers. They said the major reason for the slow pace in reducing interest rates was the high cost of funds.

Bank of Uganda surveys 24 commercial banks and 9 non-bank institutions on a quarterly basis to better understand how they are lending and what the credit market in Uganda looks like.

Stories Continues after ad

Gov’t declares July 10 a public holiday for LC elections

By
Geoffery Serugo
-
Local Government Minister, Tom Butime.

Kampala: As part of the long term policy to ensure good governance, efficient and effective delivery of public services, government has declared July 10, a public holiday to enable citizens participate local council elections says the Minister of Local government Tom Butime.

LC I elections were last conducted in 2001 and have been in abeyance for three electoral cycles in 2006, 2011 and 2016, reportedly due to lack of funds.

However, as government laid grounds for LC elections last year, On 13 November, High Court Registrar Sarah Langa issued an interim order stopping the Electoral Commission from organizing local council elections following petition filed by a ‘concerned citizen’ James Tweheyo contending that holding of LC elections would disenfranchise O and A level students, who are currently sitting for their exams.

Speaking at media Centre, Mr. Butime said LC elections seek to provide leadership in all newly created administrative units in Uganda that became operational after 2001 minimize anxiety and avert any legal challenges that may arise out of the continued delay in conducting village and parish elections.

“Parish or Village Executive Committee shall oversee implementation of policies and decisions made by its council and shall assist in maintaining of law, order and security,” he said.

He said the system of local government shall be based on the district as a unit under which there shall be lower local government and administrative units to support self-help projects, recommend person in the area, monitor administration.

The queuing elections will be conducted t the cost of over Shs22.1 billion after government availed them additional funds of Shs6.2 billion on top of the Shs17 million.

Stories Continues after ad

BOU top officials reject to disclose critical details on sale of commercial banks

By
George Mangula
-
Dr. Louis Kasekende.

Reports coming in indicate that investigators from the Auditor General’s Office are finding it hard to access critical information as they investigate Bank of Uganda top officials who presided over the liquidation and sale of defunct banks.

The officers from the AG’s office are carrying out a forensic audit to establish how defunct banks like Crane Bank, Teefe Bank, Greenland Bank, International Credit Bank, National Bank of Commerce, Cooperative Bank and Global Trust Bank were liquidated and sold by BOU which has never produced any report relating to the transactions.

An insider among the investigators has intimated to Eagle Online that Dr. Louis Kasekende-BOU’s Deputy Governor and other senior directors are reluctant to provide the required critical details that the investigators are interested in so as to come up with a credible report that can be relied on when similar transactions happen in the future.

“We have made some breakthrough but top officials at BOU are not cooperating 100 per cent when it comes to issues of monetary transactions, assets of banks before closure and others. We are finding it hard to get critical information,” one of the investigators who preferred to remain anonymous for he is not allowed to speak to the press, said.

In mid-May this year, the Speaker of Parliament Rebecca Kadaga directed the AG to investigate BOU after reports emerged that the bank officials had earlier on refused to cooperate with the AG officials, claiming the case of the sale of Crane Bank was already in court and that it would breach the sub-judice rule. The Solicitor General had advised BOU top managers not to cooperate with the AG’s investigators.

The expanded audit into BoU was prompted by petitions from Crane Bank shareholders and central bank employees regarding Shs200 billion taxpayers’ money that was allegedly invested into the defunct commercial bank before it was liquidated in October 2016 and sold to DFCU Bank in January 2017.

The shareholders had earlier on petitioned Parliament’s Committee on Commissions Statutory Authorities and State Enterprises (Cosase) chaired by MP Abdul Katuntu and requested for an investigation into the sale of Crane Bank to DFCU Bank and the closure of other several banks in the past.
Quoting from the interim report submitted to Cosase on April 10, MP Katuntu disclosed that BoU officials had denied the AG access to any information regarding closure of Crane Bank and the National Bank of Commerce (NBC).

Yet two whistleblowers had also petitioned Parliament and the Inspector General of Government (IGG) on the same matter, calling for an independent audit into the sale agreement on Crane Bank between BoU and Dfcu bank.

The sale agreement was signed on January 25, 2017, between Mr Mutebile and Mr Juma Kisaame, the managing director of Dfcu Bank.
The audit, according to some of the AG’s investigators, srutinise the disputed agreement the BOU top managers signed with DFCU Bank in the sale of Crane Bank, and other issues of accountability, supervision, guidelines and policies.

The AG’s team is tasked to identify both the perpetrators in case of any fraud in the sale of the defunct banks.
It should be remembered that the AG John Muwanga, in fear that BoU staff might block his team on account of the sub-judice wrote to BOU Governor Emmanural Tumusiime-Mutebile on May 15, saying that Speaker Kadaga had cleared him to investigate BOU and therefore needed their cooperation. “I have received the clarification from the Speaker in a letter, ref AP116/161/01 dated May 10, 2018, and copied to you guiding me to proceed with the audit and submit the report to Parliament as required by law,” Muwanga’s letter read in part.

Despite the Speaker clearing the AG to go ahead with the investigations, it has now turned out that BOU directors still continue not to cooperate with us on certain critical issues they think if revealed will cost them their job and reputation, says another investigator.

Stories Continues after ad
1...1,5331,5341,535...2,409Page 1,534 of 2,409

© Eagle Online. All rights reserved.

About Us

Popular Category

Editor Picks