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Sudan economic woes, protests hurting Uganda exports

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By JULIUS BARIGABA
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The EastAfrican has learnt that the volumes of coffee exports from Uganda to Sudan have “dropped drastically” since June 2018.

Industry sources said that the figures worsened in November last year when Uganda exported only 700 bags of coffee to Khartoum, though in December this figure improved to 10,500 bags.

“Perhaps the figures will climb back this month, and they could double, but we cannot be sure,” said Laura Walusimbi, the spokesperson of Uganda Coffee Development Authority (UCDA).

The latest export figures are a far cry from the average of 66,600 bags exported to Sudan monthly in previous years, translating into 0.8 million bags annually, making Sudan the leading importer of Ugandan coffee on the continent.

“They are not buying from Uganda, primarily because of restrictions on finances,” said Suresh Iyer, the branch manager of Olam Uganda Ltd, one of the major coffee exporting companies.

“The government has put restrictions on how much forex goes out, so the importers are constrained on that side,” Mr Iyer said, adding that the local currency has also depreciated, exchanging at 47.5 Sudanese pounds to the dollar.

If economic woes and the growing social unrest persist, Sudan — which accounts for up to 17 percent of Uganda’s coffee exports annually — could well determine how the country’s leading commodity export fares this financial year.

“Sudan is a big market for us, so technically no exporter in Uganda can say they are unaffected by what is happening there, except small traders who go in and sell small volumes quickly. But for the biggest exporters with big volumes, this is a problem,” Mr Iyer explained.

Sudan consistently ranks second behind the European Union as Uganda’s big export markets for coffee.

Mr Iyer said the coffee export industry is counting on the regime in Khartoum to quickly resolve the situation to see that the country has sufficient stocks of coffee as the Islamic holy month of Ramadan approaches in three months’ time and later, Eid El Fitr celebrations mid this year.

Last December, mass protests against President Omar al-Bashir’s three-decade rule erupted in Khartoum over the country’s spiralling economic woes that have over the past year seen inflation rates spike to the third highest in the world.

Shortages of basic commodities such as bread — the most consumed food item — are reported to be critical, while petrol stations have also run out of fuel.

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Last month, Foreign Policy Magazine reported that in response to the growing crisis, the embattled al-Bashir regime responded by setting low upper limits on withdrawals from automated teller machines and bank accounts, which disrupted businesses and blocked workers from accessing their salaries and savings.

“There is an immediate demand for bread, gas, cash and medical treatment, but there is also an abstract need for reclamation of dignity and national pride from a government that has provided neither,” Foreign Policy Magazine reported.

Exporters from Uganda agree that with limits on how much money one can withdraw and even forex running out, “exports to Sudan face an uncertain future, unless the situation improves soon.”

The economic woes facing Sudan are a result of sanctions imposed on Khartoum by the United States in 1997, and only removed two years ago.

However, the regime managed to weather the sanctions largely because it had oil revenue.

But with South Sudan getting Independence in 2011, and taking with it over 80 percent of the oil fields, Khartoum was starved of revenue, while in recent years, its Gulf States allies have also not given al-Bashir enough money to maintain his grip on power.

Although Uganda has worked to build new export markets like China, Russia, Japan and North African countries in recent years, these have not grown to overtake Sudan as its biggest coffee market in Africa, industry sources reveal.

Exporters are now hoping that the European Union can take up more volumes, but are also looking to new markets like Morocco and Algeria.

If the new markets fail to take up large volumes in the near future, it could impact Uganda’s earnings from coffee exports.

A UCDA report for December 2018 shows that the country exported 4.17 million bags, fetching $436 million compared with 4.77 million bags in the previous year, which earned the country $555 million.

This represents a 12.58 per cent and 21.30 per cent reduction in both quantity and value of coffee exports respectively, a drop attributed to low global prices on account of higher crop yields in Brazil which affected export prices and high stocks at exporter and farm level, the report explains.

Besides Uganda, South Sudan’s fragile economy that is over 90 per cent dependent on oil, could also be hurt by the protests and economic woes in Khartoum are a concern, although for now they have not yet disrupted operations of the oil producing companies.

“No impact but we are monitoring closely,” says Rhadiff Talha, Strategic Communications Officer for Malaysian oil giant Petronas upstream activities in South Sudan.

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Sordid tale of the bank ‘that would bribe God’

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Bank of Credit and Commerce International. August 1991. [File, Standard]

“This bank would bribe God.” These words of a former employee of the disgraced Bank of Credit and Commerce International (BCCI) sum up one of the most rotten global financial institutions.
BCCI pitched itself as a top bank for the Third World, but its spectacular collapse would reveal a web of transnational corruption and a playground for dictators, drug lords and terrorists.
It was one of the largest banks cutting across 69 countries and its aftermath would cause despair to innocent depositors, including Kenyans.
BCCI, which had $20 billion (Sh2.1 trillion in today’s exchange rate) assets globally, was revealed to have lost more than its entire capital.
The bank was founded in 1972 by the crafty Pakistani banker Agha Hasan Abedi.
He was loved in his homeland for his charitable acts but would go on to break every rule known to God and man.
In 1991, the Bank of England (BoE) froze its assets, citing large-scale fraud running for several years. This would see the bank cease operations in multiple countries. The Luxembourg-based BCCI was 77 per cent owned by the Gulf Emirate of Abu Dhabi.  
BoE investigations had unearthed laundering of drugs money, terrorism financing and the bank boasted of having high-profile customers such as Panama’s former strongman Manual Noriega as customers.
The Standard, quoting “highly placed” sources reported that Abu Dhabi ruler Sheikh Zayed Sultan would act as guarantor to protect the savings of Kenyan depositors.
The bank had five branches countrywide and panic had gripped depositors on the state of their money.
Central Bank of Kenya (CBK) would then move to appoint a manager to oversee the operations of the BCCI operations in Kenya.
It sent statements assuring depositors that their money was safe.
The Standard reported that the Sheikh would be approaching the Kenyan and other regional subsidiaries of the bank to urge them to maintain operations and assure them of his personal support.
It was said that contact between CBK and Abu Dhabi was “likely.”
This came as the British Ambassador to the UAE Graham Burton implored the gulf state to help compensate Britons, and the Indian government also took similar steps.
The collapse of BCCI was, however, not expect to badly hit the Kenyan banking system. This was during the sleazy 1990s when Kenya’s banking system was badly tested. It was the era of high graft and “political banks,” where the institutions fraudulently lent to firms belonging or connected to politicians, who were sometimes also shareholders.
And even though the impact was expected to be minimal, it was projected that a significant number of depositors would transfer funds from Asian and Arab banks to other local institutions.
“Confidence in Arab banking has taken a serious knock,” the “highly placed” source told The Standard.
BCCI didn’t go down without a fight. It accused the British government of a conspiracy to bring down the Pakistani-run bank.  The Sheikh was said to be furious and would later engage in a protracted legal battle with the British.
“It looks to us like a Western plot to eliminate a successful Muslim-run Third World Bank. We know that it often acted unethically. But that is no excuse for putting it out of business, especially as the Sultan of Abu Dhabi had agreed to a restructuring plan,” said a spokesperson for British Asians.
A CBK statement signed by then-Deputy Governor Wanjohi Murithi said it was keenly monitoring affairs of the mother bank and would go to lengths to protect Kenyan depositors.
“In this respect, the CBK has sought and obtained the assurance of the branch’s management that the interests of depositors are not put at risk by the difficulties facing the parent company and that the bank will meet any withdrawal instructions by depositors in the normal course of business,” said Mr Murithi.
CBK added that it had maintained surveillance of the local branch and was satisfied with its solvency and liquidity.
This was meant to stop Kenyans from making panic withdrawals.
For instance, armed policemen would be deployed at the bank’s Nairobi branch on Koinange Street after the bank had announced it would shut its Kenyan operations.
In Britain, thousands of businesses owned by British Asians were on the verge of financial ruin following the closure of BCCI.
Their firms held almost half of the 120,000 bank accounts registered with BCCI in Britain. 
The African Development Bank was also not spared from this mess, with the bulk of its funds deposited and BCCI and stood to lose every coin.
Criminal culture
In Britain, local authorities from Scotland to the Channel Islands are said to have lost over £100 million (Sh15.2 billion in today’s exchange rate).
The biggest puzzle remained how BCCI was allowed by BoE and other monetary regulation authorities globally to reach such levels of fraudulence.
This was despite the bank being under tight watch owing to the conviction of some of its executives on narcotics laundering charges in the US.
Coast politician, the late Shariff Nassir, would claim that five primary schools in Mombasa lost nearly Sh1 million and appealed to then Education Minister George Saitoti to help recover the savings. Then BoE Governor Robin Leigh-Pemberton condemned it as so deeply immersed in fraud that rescue or recovery – at least in Britain – was out of the question.
“The culture of the bank is criminal,” he said. The bank was revealed to have targeted the Third World and had created several “institutional devices” to promote its operations in developing countries.
These included the Third World Foundation for Social and Economic Studies, a British-registered charity.
“It allowed it to cultivate high-level contacts among international statesmen,” reported The Observer, a British newspaper.
BCCI also arranged an annual Third World lecture and a Third World prize endowment fund of about $10 million (Sh1 billion in today’s exchange rate).
Winners of the annual prize had included Nelson Mandela (1985), sir Bob Geldof (1986) and Archbishop Desmond Tutu (1989).
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Monitor water pumps remotely via your phone

Tracking and monitoring motor vehicles is not new to Kenyans. Competition to install affordable tracking devices is fierce but essential for fleet managers who receive reports online and track vehicles from the comfort of their desk.

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Agricultural Development Corporation Chief Accountant Gerald Karuga on the Spot Over Fraud –

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Gerald Karuga, the acting chief accountant at the Agricultural Development Corporation (ADC), is on the spot over fraud in land dealings.

ADC was established in 1965 through an Act of Parliament Cap 346 to facilitate the land transfer programme from European settlers to locals after Kenya gained independence.

Karuga is under fire for allegedly aiding a former powerful permanent secretary in the KANU era Benjamin Kipkulei to deprive ADC beneficiaries of their land in Naivasha.

Kahawa Tungu understands that the aggrieved parties continue to protest the injustice and are now asking the Ethics and Anti-corruption Commission (EACC) and the Directorate of Criminal Investigations (DCI) to probe Karuga.

A source who spoke to Weekly Citizen publication revealed that Managing Director Mohammed Dulle is also involved in the mess at ADC.

Read: Ministry of Agriculture Apologizes After Sending Out Tweets Portraying the President in bad light

Dulle is accused of sidelining a section of staffers in the parastatal.

The sources at ADC intimated that Karuga has been placed strategically at ADC to safeguard interests of many people who acquired the corporations’ land as “donations” from former President Daniel Arap Moi.

Despite working at ADC for many years Karuga has never been transferred, a trend that has raised eyebrows.

“Karuga has worked here for more than 30 years and unlike other senior officers in other parastatals who are transferred after promotion or moved to different ministries, for him, he has stuck here for all these years and we highly suspect that he is aiding people who were dished out with big chunks of land belonging to the corporation in different parts of the country,” said the source.

In the case of Karuga safeguarding Kipkulei’s interests, workers at the parastatals and the victims who claim to have lost their land in Naivasha revealed that during the Moi regime some senior officials used dubious means to register people as beneficiaries of land without their knowledge and later on colluded with rogue land officials at the Ministry of Lands to acquire title deeds in their names instead of those of the benefactors.

Read Also: Galana Kulalu Irrigation Scheme To Undergo Viability Test Before Being Privatised

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“We have information that Karuga has benefitted much from Kipkulei through helping him and this can be proved by the fact that since the matter of the Naivasha land began, he has been seen changing and buying high-end vehicles that many people of his rank in government can’t afford to buy or maintain,” the source added.

“He is even building a big apartment for rent in Ruiru town.”

The wealthy officer is valued at over Sh1.5 billion in prime properties and real estate.

Last month, more than 100 squatters caused scenes in Naivasha after raiding a private firm owned by Kipkulei.

The squatters, who claimed to have lived on the land for more than 40 years, were protesting take over of the land by a private developer who had allegedly bought the land from the former PS.

They pulled down a three-kilometre fence that the private developed had erected.

The squatters claimed that the former PS had not informed them that he had sold the land and that the developer was spraying harmful chemicals on the grass affecting their livestock and homes built on a section of the land.

Read Also: DP Ruto Wants NCPB And Other Agricultural Bodies Merged For Efficiency

Naivasha Deputy County Commissioner Kisilu Mutua later issued a statement warning the squatters against encroaching on Kipkuleir’s land.

“They are illegally invading private land. We shall not allow the rule of the jungle to take root,” warned Mutua.

Meanwhile, a parliamentary committee recently demanded to know identities of 10 faceless people who grabbed 30,350 acres of land belonging to the parastatal, exposing the rot at the corporation.

ADC Chairman Nick Salat, who doubles up as the KANU party Secretary-General, denied knowledge of the individuals and has asked DCI to probe the matter.

Email your news TIPS to [email protected] or WhatsApp +254708677607. You can also find us on Telegram through www.t.me/kahawatungu

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William Ruto eyes Raila Odinga Nyanza backyard

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Deputy President William Ruto will next month take his ‘hustler nation’ campaigns to his main rival, ODM leader Raila Odinga’s Nyanza backyard, in an escalation of the 2022 General Election competition.

Acrimonious fall-out

Development agenda

Won’t bear fruit

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