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Report indicts BoU for illegal closure of banks

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By DICTA ASIIMWE
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Uganda’s Auditor-General John Muwanga has released a report detailing irregularities and illegalities allegedly committed by the central bank in the closure and sale of non-performing commercial banks.

Over the past 25 years, the Bank of Uganda has closed seven commercial banks, some of whose proprietors and shareholders have accused it of irregularities.

At a recent public hearing, former Co-operative Bank customers and shareholders asked Minister of Finance Matia Kasaija to pay back their equity and deposits, which they claimed the government “stole.” The National Bank of Commerce and Crane Bank owners have gone to court to recover their assets.

In his 80 page report, the Auditor-General says that given its conduct during the liquidation process, Uganda’s central bank lacks the discipline or willingness to perform basic business practices like keeping ledgers and records of their transactions during the liquidation of the closed commercial banks.

The only ledgers and records of the transactions that BoU could produce during the audit were those kept by institutions that the central bank would hired to handle the liquidation.

The report states that officials at BoU committed illegalities during liquidation of the banks. It adds that the most likely motivation was for their personal gain and not for the good of the financial sector.

BoU director of communications Charity Mugumya said, “The report was leaked before it was ready.” She added that they were discussing the report with the Auditor-General and would issue an official response after that process.

Mr Muwanga submitted the report to Speaker of parliament Rebecca Kadaga on August 17. It covers the process followed by BoU to liquidate the commercial banks, and details a trail of corruption allegations featuring officials unable to provide proof of the process they claimed to have followed.

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One such example, according the report, is that the central bank claimed to have sold Ush570.4 billion ($148.8 million) worth of Crane Bank’s bad loans to DFCU Bank.

The report says that BoU officials sold a good loan book worth Ush588.6 billion ($153.6 million) to DFCU Bank at a cost of Ush200 billion ($52.2 million).

The report further says that when BoU officials were asked about this anomaly they said that DFCU had been sold the bad loan book as well. The auditor general says that DFCU Bank decided what it wanted to pay for Crane Bank’s assets, and that is the amount that the central bank accepted.

“There is evidence of fraud and collusion by BoU officials, transaction advisors and buyer,” says the report.

DFCU Bank had earlier benefited from the sale of Global Trust Bank (GTB). The Auditor-General’s report shows that DFCU bought well secured loans belonging to GTB at a discount, which is illegal under the Financial Institutions Act.

The report also shows that BoU sold the assets of the National Bank of Commerce to Crane Bank at a discount.

Severino Twinobusingye, a lawyer for the proprietors of NBC, says the central bank ignored a court injunction blocking the sale, alleging that officials had vested interests.

International Credit Bank (ICB), Greenland Bank, Cooperative Bank, Global Trust Bank and National Bank of Commerce, with assets worth Ush164 billion ($42.8 million) were sold at a discount of 80 per cent, the report shows.

In the cases of ICB, Greenland and Co-operative Bank, whose assets were sold at a 93 per cent discount, the BoU rejected an offer of $10 million ($37.9 million) in May 2007, but accepted half that price seven months later. The central bank accepted 26 per cent of the value of loans that were well documented, with legal and equitable mortgages.

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Covid-19 deaths, hospitalizations soar among youth in Americas – KBC

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Hospitalizations and deaths of younger people are surging as the COVID-19 pandemic accelerates across Latin America and the Caribbean, Pan American Health Organization (PAHO) Director Carissa Etienne said on Wednesday.

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“Adults of all ages – including young people – are becoming seriously ill. Many of them are dying,” Etienne said at her daily press briefing as quoted in a PAHO release.

In Brazil, mortality rates doubled among those younger than 39, quadrupled among those in their 40s, and tripled for those in their 50s, between December 2020 and March 2021, she said.

“For much of the pandemic, our hospitals were filled with elderly COVID patients, many of whom had pre-existing conditions that made them more susceptible to severe disease,” Etienne said. “But look around intensive care units across our region today. You’ll see they’re filled not only with elderly patients, but also with younger people.”

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Etienne urged hospitals in the region to increase the size of intensive care units (ICU) in anticipation that the trend will continue, while warning that expansion of ICUs cannot continue indefinitely.

As a result, she urged nations to double down on prevention measures such as lockdowns and facemasks.

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Uhuru wa biashara, Suluhu ya vikwazo: How Kenya-Tanzania trade will be streamlined

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President Uhuru Kenyatta with his Tanzania counterpart Samia Suluhu, who is on a two-day state visit in Kenya.[PSCU]

President Uhuru Kenyatta says ministers from both Kenya and Tanzania should resolve all non-tariff barriers and other restrictions affecting the two countries within four months.
Uhuru, on Wednesday said going forward, there will be no business visa or work permits for Tanzanian wishing to do business in the country.
“You are free to come and trade here in Kenya, there will be no business visas or work permits as long as you abide by the laws of the land,” he said.
Uhuru was speaking during the Kenya-Tanzania Investment Forum at Serena hotel. The forum was in line with President Samia Suluhu’s two-day state visit.
Kenya has about 513 companies doing business in Tanzania compared to Tanzania’s 30 in Nairobi.
Uhuru said in the next two weeks, concerned ministers from both sides should clear all the traffic jams at the Taveta and Namanga border points.
Uhuru said they should pay a special focus to the issuance of Covid-19 certificates to ease the movement of  transit cargo.
“I direct that all the maize lying at the border be cleared in two weeks. We cannot subject businesses to more suffering,” Uhuru said.

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Uhuru urged the ministers to move swiftly and ensure the ease of doing business at the border pointswas decisively tackled.
“It is not about wearing suits and meeting over tea.Get to the ground and understand what is affecting those traders. Don’t just sit in those offices. If you need to consult, do it and get the work done,” he said.
Uhuru’s sentiments came shortly after the Kenya Business Community nsaid it was ready to trade with the Tanzanian business community.
Led by the Kenya National Chamber of Commerce (KNCC), the community proposed the formulation of a Joint Business Council that will support the two countries.
KNCC President Fred Ngatia said the council would play a key role in addressing issues that bedevil  Nairobi-Dar trade,
The community said there should be policy forums and investment-focused events that will target small-scale enterprises.
“We are going to focus more on economic projects by identifying favourable financing institutions that will help us settle some of the commercial disputes affecting our community,” Ngatia said.
He said this will be made possible through the Public-Private Partnerships offered by the government.
As a result, KNCC in partnership with the Tanzania Chamber of Commerce will host a trade and investment exhibition in Dar es Salaam this August aiming to help SMEs unlock their potential.
So far Trade and Agriculture ministers from the two sides have had a breakfast meeting and agreed to initiate bilateral discussion before the end of the month.
Trade CS Betty Maina said the discussions aim to iron out all issues that have been hampering trade between the two countries.
This includes issues surrounding maize import.
President Samia Suluhu said her government was ready to serve as a bridge to pave way for businesses between the two countries to thrive.
“It is not about competing and complicating things, but about developing business relationships to allow both parties to explore opportunities,” she said.
Suluhu said while Tanzania is rich with natural resources and tourist attractions, Kenya is thriving in the ICT world and thus the need for exchange of skills on research and development.
“Muna bahati sana maanake upande mmoja mnao Uhuru wa kufanya biashara na upande mwingine Suluhu la kuondoa vikwazo,” Suluhu said.

 
 
 
 
 
 

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Kenya and Tanzania agree to iron out trade barriers

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President Uhuru Kenyatta (PHOTO: PSCU)

NAIROBI, KENYA: A business forum held on Wednesday between Kenya and Tanzania agreed to iron out challenges constraining business between the neighbouring countries.
President Uhuru Kenyatta and Tanzania counterpart Samia Suluhu Hassan during the forum noted that trade opportunities between the two countries have not been fully exploited. Trade volume between the two countries was valued at Sh60.4 billion in 2012 and Sh47.5b, Sh45.6billion and Sh47.5 billion in 2016, 2017 and 2018 respectively.In 2020, President Uhuru Kenyatta noted that the volume was valued at Sh50 billion.
“Trade between the two countries has thrived over the past due to robust private sector, entrepreneurial citizen among other factors, however from the volumes we have not exploited the opportunities to full capacity,” he said.
“There is an urgent need for cooperation between the two countries to iron out issues hindering the growth of trade,” he added.
He noted that the economies need to drop unhealthy competition which he said work against investment in the two neighbouring countries.
The President also directed responsible government officials to meet within this week or the week after to iron out issues around the Covid-19 certificate. He also directed CS Agriculture and Livestock Peter Munya to allow maize to be cleared at the border.
Reading from the same script, his counterpart Suluhu Hassan noted that real development between the two countries can get better if they develop together.
“We need to work on a conducive environment by creating efficient courts, harmonize tax regimes, work on the investment climate and better legislation,” she said. She noted that Kenya can benefit from Tanzania’s rich mineral sector while Tanzania can borrow from Kenya’s thriving technology sector.

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The private sector represented by the East African Business Council noted the decline in intra EAC trade is due to several barriers to trade, investment and movement of persons. Intra-EAC trade currently stands at below 20 per cent vis a vis SADC at 48 per cent and European Union at 70 per cent.
“There’s a need to embrace digitalization particularly in moving goods and services across the EA region and harmonizing the tax regimes, we need to also strengthen the East African Secretariat,” said Nick Nesbit, Chairman of East African Business Council.
He also underscored the need to promote value addition in manufacturing and diversification of our products and the elimination of Non-Tariff Barriers, which will go a long way towards increasing intra-EAC trade from the current below 20 per cent.
Ministers from the two countries are expected to meet before the end of the month to iron out issues affecting trade between the two countries.

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