Wither Africa? Uganda & Nigeria’s economic choices

July 11, 2011


Below is a news report from the Uganda’s New Vision Online about a loan from you-know-where for “budget support” for Uganda. Of course, Uganda – no thanks to long-reigning despot, Museveni who was once the darling of the West – leads a country already in IMF territory. Long-term readers of my essays know these economic terminologies are beyond me but real or abracadabra funding that “follows the approval of Uganda’s Policy Support Instrument review by the IMF board on Thursday” or whatever that means signals to Ugandans to get ready for even harder times, the type I’m sure Nigeria’s Dr. Jonathan GENTLY but ominously hinted at a couple of weeks back. When you see those three alphabets, IMF, hunger, family dislocation, workers’ strikes, etcetera cannot be far away. (Tola Adenle)

THE World Bank on Thursday approved credit worth $50m (sh130b) to finance Uganda’s national budget
by Mary Karugaba and Chris Kiwawulo

Chris Kassami, the finance ministry’s permanent secretary and secretary to the treasury, said the fund would complement resources for the national budget for the fiscal year 2011/12. According to Kassami, the money will be used to finance infrastructure and other priorities of government, including deepening the financial sector.

“This credit will be disbursed into the consolidated fund and the Government will have flexibility to allocate it to finance its priority expenditures using our own country systems,” he said.

The Funding

“These developments are a clear manifestation of the positive economic outlook and credibility of the economic reform programme aimed at improving the investment climate and reducing the cost of doing business,” said Kassami.

He said the basic indicators that Uganda’s economy is healthy were having fiscal policies that are in line with macroeconomic policies and having budget priorities that are in line with growth and commitment to reduce inflation.

Uganda’s inflation, which hit a record 16% in May, had at the end of June slowed down to 15.8%, according to the Uganda Bureau of Statistics.

Kassami’s deputy, Keith Muhakanizi, said the economy of Uganda is still strong despite the past turbulence caused by the high food prices and the exchange rates.

“Despite high prices and exchange rate, the economy has continued to grow at 6%. The inflation rate is going down and I think we should take heart because the future looks bright,” he said.

He admits these issues are still a challenge, but is optimistic that the situation will calm down as donors release funds, which will have an effect on the exchange rate.

Kassami also said resources from the credit would boost our foreign reserves and assist in stabilising the exchange rate.

The shilling started depreciating swiftly nearly two weeks ago and hit a record high of sh2,725 against the dollar on Wednesday, before the Bank of Uganda intervened.

About $40m (sh99b) was sunk into the economy to save the depreciating shilling. At the end of the financial year last week, more dollars were sold to commercial banks to strengthen the shilling.

Kassami said the Government was optimistic that the World Bank would approve the 9th Poverty Reduction Support Credit worth $100m (about sh260b) in the first half of this financial year.

“This credit in the form of general budget support will be in recognition of Uganda’s continued efforts towards improving service delivery and poverty reduction,” he said.

The World Bank has provided about $6.5b (about sh17 trillion) in loans and grants to Uganda since 1963. It has also committed $1.2b (sh3 trillion) to finance various programmes and projects between 2009 and 2011.

The bank’s current portfolio in Uganda consists of 20 IDA-financed projects with a net commitment of about $1.5b (about sh4 trillion).

A source at the World Bank confirmed the approval, but declined to give details.

“Yes, the World Bank board has approved $50m as Uganda financial sector development policy credit. This will be budget support for the development of the pension sector,” the source said.

Public service has been struggling to raise money to offset the growing pension arrears, which are estimated at sh65b by the end of last month.

It is estimated that every month, the ministry gets 450 new pensioners, which means about 5,400 pensioners every year.

Pension is a payment made to a retired civil servant based on years of service and their salary scale.

New Vision Online, Sunday, 3rd July,

The sad saga tale of Dr. Ngozi Okonjo Iweala’s ministerial appointment
by Tola Adenle

The capricious grip of donors and their agent like the World Bank brings to fore the amazing sadness about stories that have been turning up in the news about “threats” to Iweala on her appointment as Nigeria’s new minister of finance.

While no one can question Iweala’s qualifications for the post in a country whose leadership at all levels are peopled by mostly unqualified individuals, I have been one of perhaps the most vociferous opponents of her re-appointment as Finance Minister. Other opponents that I I’ve read in news commentaries do not sound like proxies for “the old brigade of corrupt politicians and other vested interests” that are being bandied apparently to stifle comments on why the lady is NOT suitable to lead Nigeria’s recovery effort.

We all cheered Dr. Iweala when she led us out of debt bondage the last go-around but I have written in my rested NATION’s Sunday column – and here – long before the idea of a Minister who steered Nigeria out of debt-dom but started calling for more external loans not long after she left Nigeria as Minister and a second return.

Even as a lay person with no degrees in Economics or related field, it’s apparent to me that her employer, The World Bank, not surprisingly, wants the same thing for Nigeria. The Bank as an institution, respected and huge and etcetera, makes its money from commissions from loans it secures/guarantees for countries like Nigeria which gives its staff salaries and lifestyles long condemned by the USA, The Bank’s host.

Now, rather than Iweala raising all these melodramatic panic to London’s Financial Times – and the world – about “receiving threatening calls not to return to the new cabinet of President Goodluck Jonathan as minister of finance”, I think she should just take the appointment as she has and forget those of us noise-makers who must be quite substantial. After all, presidents, governors, local government chairmen … past and present, all employ this who-cares attitude and nothing happens.

Even the so-called “organised private sector” which first became known and infamous during “Dr.” Okereke’s reign when it raked in scads of money for retd. General Obasanjo’s ill-fated “Third Term” agenda, has reportedly thrown its weight behind Iweala’s appointment; “the Nigerian Economic Summit Group, the National Association of Chambers of Commerce, Industry, Mines and Agriculture as well as the National Association of Small Scale Industries” , including a not subtle warning by ‘NACCIMA President, Dr. Herbert Ajayi” that “those threatening the life of the former minister would not succeed because they did not want the country to move forward … nothing can happen to her. By the spirit of this country, we pray that nothing should touch her. Those people who want to do business as usual will want to stop her.”

Online news sites are a-fire with zillions of comments, many of which read as if mass produced, are raining curses and abuses on critics of Iweala or praising her as THE solution to Nigeria’s economic problems.

Nigeria’s recent status of being debt-free has been reversed and the country wants – not really NEEDS – to continue to take more so-called external loans, and The Bank and donor agencies are, of course, more than pleased to oblige. Can IMF loan be that far ahead?

This is worse than amazing; it’s a totally disgraceful melodrama.



Nigerian newspapers and online news sources
  • 234 Next News site
  • Bella Naija Magazine
  • Business Day Newspaper
  • Daily Champion Newspaper
  • Daily Independent Newspaper
  • Daily Trust Newspaper
  • Elendu Reports News site
  • Emotan Blog
  • Huhu online News site
  • jhova blog Blog
  • Leadership News site
  • Linda Ikeji Blog
  • National Daily Newspaper
  • Nigeria Plus News site
  • Nigeria Village Square News site
  • Nigerian Observer News site
  • Osun Defender News site
  • PM News Newspaper
  • Punch Newspaper
  • Sahara Reporters News site
  • Sun Newspaper
  • The Guardian Newspaper
  • This Day Newspaper
  • Tribune Newspaper
  • Vanguard Newspaper

    Emotan 77
    Former publisher of the women's bi-monthly, Emotan (1977-1984) and op-ed ... now publishes her writing here

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