Explainer; The Land Probe Committee

For months, a probe committee into land issues in Uganda has been meeting several people as it seeks to find a solution to the land-related challenges in the country. Constituted in September 2016 by President Yoweri Museveni, after several notable incidences of land wrangles in the country and delays in the land acquisition for government projects, the committee is expected to table a comprehensive report that provides a solution


Why was the probe committee instituted? 

Land issues have not entirely been new to Uganda. There have been several land wrangles written by the media dating from as far back as writing the 1995 Uganda Constitution.  The 1995 Constitution (Article 237) brought about four land tenure systems in Uganda. The three are; Freehold (holding of registered land in perpetuity), Mailo (a tenure predominantly in Buganda premised on the 1900 Buganda Agreement), Customary (most of Uganda’s land is owned through communal means) and Leasehold (a tenure system where the landlord agrees to lease land for a given period).

To operationalize The Constitution, the government passed the Land Act in 1998 (amended in 2007) but as time progressed, gaps continued to be found.

These gaps are visible in the 2013 Uganda National Land Policy where it recommends several amendments to the Land Act. The policy attempts to address the issues Uganda facing with land; ranging from historical injustices, a multiplicity of land tenure systems, multiple rights and overlapping interests, a heritage of evictions and arbitrary disposition, disputes beyond boundaries (tribal and ethnic too) and the rights of vulnerable people. Both the National Land Policy and Land Act address issues in different modes. The issues being: tenure security, land administration, management and enforcement in the protection and conservation of the environment and natural resources in Uganda.

The probe committee appears to be addressing issues already taken care of in the Land Policy of 2013. In fact, the Land Policy traces the history of Uganda’s land problems to the colonial era that ushered in the 1900 Buganda Agreement and Idi Amin’s 1975 Land Decree where the government nationalized land ownership.

However, what the committee is likely to address are the wrangles that arose from the discovery of oil the Bunyoro region.

What are the terms of the probe committee?

The President initiated the probe committee in order to find out the following;

  1. Investigate and inquire into the law, process, and procedure by which land is administered and registered in Uganda

  2. Inquire into the role of the Uganda Land Commission in the management and administration of public land.

  3. Review the effectiveness of the relevant bodies in the preservation of wetlands, forests and game reserves.

  4. Inquire and solicit views on the role of traditional cultural and religious institutions who own large tracts of land

  5. To assess the legal and policy framework on government land acquisition

  6. To identify, investigate and inquire into the effectiveness of the dispute resolution mechanism available to persons involved in land disputes

  7. To inquire into any other matter connected with or incidental to the matters aforesaid.

It should be noted that the 2013 Land Policy does indeed comprehensively address most of the Terms of Reference provided to the committee. The drafting of the land policy took in excess of 3 years with consultations made to the same stakeholders expected at the probe committee.

What is the government aiming at achieving? 

According to Land Minister, Ms. Betty Amongi, on top of proposing reforms, the committee shall issue “administrative and criminal sanctions against persons found culpable of wrongdoing in all the process.”

This is important in addressing some of the injustices faced by Ugandans especially land evictions. This is what is new about the probe.

One of the more pronounced ambitions of the government is to make changes to the compulsory acquisition of land. The government has been complaining about several projects being delayed by a hectic land acquisition process. The government wants the right to use the land for a project as disputes are being handled in order to avoid project delays. In a statement issued in August 2016, Betty Amongi mentions that “There are scenarios where 90% of a community who want services have accepted the value government is paying, then 10% rejects it and the project is compromised or abandoned and monies returned or not utilized.” This she says informs the proposed changes to the law.

Article 237 of The Constitution states that;

“Land in Uganda belongs to the citizens of Uganda and shall vest in them in accordance with the land tenure systems provided for in this Constitution.”

In article 26 (b), it reads “the compulsory taking of possession or acquisition of property is made under a law which makes provision for— (i) prompt payment of fair and adequate compensation, prior to the taking of possession or acquisition of the property;

And (ii) a right of access to a court of law by any person who has an interest or right over the property.”

For the government to get its mandate to change the constitution, the commission of inquiry should be able to make that recommendation. What the probe committee will find out are incidences of absentee landlords, underhand methods by government entities to underpay, the absence of land titles and for customary land, certificates of ownership may be missing. These contribute to the delays in implementation of projects. The blame can’t be squarely blamed on the land

The other recommendation could be to completely overhaul the Land Acquisitions Act. It is a 1965 law and for some, it is considered outdated. Then again, one of the objectives of the National Land Policy is to ensure harmonization of all land related laws to in order to “strengthen institutional capacity” of government and cultural institutions.

Issues the committee could explore further

On 29th March 2017, the 2017 Case Backlog report was released and it indicated that the land case backlog constituted 25% of the entire “delayed justice.” One of the reasons given for the case backlog in was that “Land matters often require locus, yet the mediators lack funding to travel to the villages to meet with the communities.” The probe committee could perhaps explore whether alternative dispute resolution is feasible. The Land Act provided for land tribunals at district and sub-county level whose role was to determine land related disputes. They were operationalized in 2001 but by 2004 they had been phased out due to inadequate funding. The committee could further find-out whether DLB’s could resolve some of the issues that have created the case backlog. Also in part help the government resolve disputes with landlords on compensation rates when carrying out compulsory land acquisition. Interestingly the National Land Policy also provides for the reinstatement of Land Tribunals.

Land administration in Uganda is still considered to be one of the causes of the land rights insecurity in Uganda. If the probe committee can recommend solutions to the fraud, forgeries, and inaccuracies in the land registry, then it will improve land administration. It could also bring those involved in illegalities around land to book so that they can be prosecuted.

Findings of the probe

Often, when such reports are concluded, they are handed over to the President. It is in most cases up to to him to adopt the recommendations of the report. The hope is that if the findings of the probe committee recommend some changes – within the public interest -, then they should be implemented.

However, the recommendations might be implemented on the practicality instead of moral or theoretical considerations.


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Conversations on flight 337

It is 2:40am on Sunday. We are taxing. As they refer to it in the aviation sector. It is flight 337 on Ethiopian Airlines from Entebbe International Airport to Addis Ababa. A late night flight is often coupled with coldness. Within minutes, we are airborne. The view from the window is beautiful. That is because Kampala and Entebbe are lit up. It can be viewed as a success of the electrification program of the government. Kudos. It is also beautiful because, during the day, planners would puke at the level disorganization. Soon, we are at cruise level. It is time to listen to some music and read a book. On this 2 hour flight, the only in-flight entertainment is music. My Samsung earphones come in handy.


What are those earphones for? She asks. I want to listen to some music. I answer. She smiles. Do they work in the airline music system? She responds. Yes. I answer. Did you get them from the airline people? She asks again. No. They are mine. I respond. When I make money, I will get myself good earphones too. She says. I am curious. So I ask. Where are you going? Silence. To Oman, she says. I am going to work in Oman. I got a good job there.

Three hours before the flight, I had her seen at the immigration desk. The immigration officer had refused to place an exit stamp in her passport. An airport official was pleading with the officer. I overheard a conversation. The immigration officer didn’t want her to leave the country. They are under pressure to limit the movement of girls from Uganda to the Middle East. There have been incidences of human rights abuses against Ugandan girls working as maids. The immigration officer couldn’t prove that would happen to the young lady aged about 25.

An hour to the flight, the officer had placed the exit stamp in the passport.


She is wearing a black weave, which she holds back using a black hairband laced with green, blue and yellow beads. Her earrings are pink and shiny. I could tell that her lipstick and makeup had faded. Perhaps from the long negotiations with the immigration officer. She was still smiling. Her smile was farfetched though as the late night flight effects started to kick in. She is in seat number 23B.

I got a job in Oman. She explains. I am going to make money for two years. I will be able to buy a new phone and new earphones. Just like yours. She narrates. I smile. Oh! Really? From Oman? I ask. Yes. Finding a good job in this country is hard. She says.

In seat 23A, another girl. Her friend. I had seen her earlier shooting a video of herself on the flight. She had made several phone calls. We are leaving. She tells the other person on the phone. The plane is about to take-off. She continues to talk. She is happy too. She has long braided hair, held together in an upward position. She has no make-up. She is dark skinned. Her friend is light-skinned. Her earrings have two white pearls. She has an extra piercing on the upper side of her ears. There, she has a ring link earring. She is also going to Oman.

There’s three of us on this flight. She says.

I have never been to Oman. I have heard stories. I keep it to myself. Not for long.

We have heard the stories too. Those things are minor incidences. Some people are just unlucky. They explain. Oman was the only opportunity.

Where are you going? She asks. To Ghana. I respond. Do you work there? No, I do not. I am going there for training. Eh mama. She says. I am sleepy. They are sleepy. Our conversations fade as the eyes fail to hold. She leans against the yellow seat 22b in front of her.


We disembark.

Good luck. I say.

They had a six-hour layover at Addis Ababa International Airport. Mine was just three hours. It is cold. My journey is part of a quest to get more knowledge on how I can report the extractives sector better. Hold the government accountable on oil revenues when they come. It is a discussion about the future of this country. The future that includes better jobs for Ugandans.

I hope their future holds in Oman.


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What Free Market. You shutdown mobile money – just like that.

“But as the sun sets on the first decade of the 21st century, that story has already become ancient history. The power of the state is back,” Ian Bremmer, The End of the Free Market.


On Election Day, frequent users of mobile money woke to a shut-down of the service. Without notification, users were unable to transfer money. The telecoms were silent. The customer care lines were buzzing. There was a scripted answer. “There is temporary interference in the service…”

Somewhere, The Uganda Communications Commission (UCC) boss, Eng. Godfrey Mutabazi talked tough. Tough that it would seem he had a gun to his head. Mutabazi did not exactly state why mobile money had been shut-down. In a blanket statement, “national security” was picked as the reason for the shutdown. The regulator only issued a statement on 19th February 2016 – 24 hours into the shutdown.

The telecoms were loudly silent and it took them six hours to tell their customers the truth. In a manifestation of arrogance at one of the radio talk shows, (Capital FM), Ofwono Opondo, who speaks for the state and the ruling party, stated that no-one had died as a result of mobile money being off. He misses the point.

The shutdown exposed Uganda’s masquerading free-market economy. In other words, someone can wake up one day and with a touch of button turn-off mobile money used by over 10 million people. Shutdown a system which has Shs24trillion worth of transactions annually. The free market was now “safely” in the hands of the state. At least 60,000 agents were out of business for the 3 days.

The senior members of the NRM knew about the shutdown. They too kept quiet. The state had played the “National Security” card. When the spy agencies tell you it is a matter of national security, apparently you can’t ask questions. However, since this was unprecedented and considering the sheer size of mobile money, the UCC ought to have provided explanations. Interestingly, UCC is good at issuing threats. For instance, UCC in 2015 fined MTN Uganda Shs5b for failing to adopt short code harmonization. MTN never paid the fine. Customers have complained about unsolicited messages. UCC issued directives. Unsolicited SMS still exist. On this directive to shut down mobile money, they did not hesitate.

This rushed decision explains another problem for the telecoms. They were threatened. The telecoms obliged. Often they have been let-off by the authorities. Also, 3 days of losses can be recovered. The companies make billions off mobile money. It is cash-trove. That same money that was held on people’s accounts will be eventually moved and the telecoms will earn their commissions on each transaction.

However, the discussion here is not about the losses telecoms may incur. It is rather the reputation of the pseudo free-market system Uganda is operating. It is the fact that the state can interrupt perhaps one of the most important payment systems in the country. In parading national security, – during one of the most important elections – without a single challenge from at least two corporations, the conclusion is that the state is in control. Question is, in whose favor? On that same day, the opposition party, FDC says it had, at least, Shs100m on various mobile money accounts, ready to distribute to agents. These are agents who were supposed to be on the lookout for any irregularities.  They did not.

If a system that transacts nearly Shs80b a day and it is remotely shutdown, without any challenge, then it is safe to say, the financial system can be compromised for political purposes. It is like shutting down the banking system, just like that. The shutdown alone raises Uganda’s investment risk profile but also reduces the reputation of a system that has fostered financial inclusion.


 “No, because all governments use the tools provided by state capitalism to accomplish political goals, not serve the public welfare. This system allows them to minimize political risks they face by maximizing their controls over activities that generate substantive amounts of wealth.” Ian Bremmer, The End of The Free Market


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Uganda is not performing exceptionally well. It is doing just okay.

“Once you accept that profit and greed as practised on a mass scale create the greatest possible benefits for any society, pretty much any act of personal enrichment can be justified as a contribution to the great creative cauldron of capitalism, generating wealth and spurring economic growth – even if it’s only for yourself and your colleagues,” Naomi Klein, The Shock Doctrine

Andrew Mwenda took out a full page in the New Vision to write a piece on Uganda’s growth. The title “How Uganda has been performing exceptionally well” is an indicator of how the piece aims to heap praise on the current government whereas playing down the opposition demand for change. It would be intellectually dishonest not to admit that Uganda is in a better place than it was in 1986. But then it would be intellectually dishonest to claim that Uganda’s has been exceptional. Mwenda’s narrative ponders on the economic growth indicators that point Uganda to be the 11th fastest growing economy in the world – according to the IMF. The problem with this analogy is that growth banter often used at an international conference, IMF books, and World Bank board rooms. In our daily reporting as journalists, we also quote economic growth as an indicator of the improved – or not – status of a country.

Growth is an indicator of progress, but it is quantitive and tends to ignore the quality of life factors. Mwenda’s argument borders on the theories of free markets that often reap apart quality of life for some. The World Bank has stopped at just saying “Economic Growth.” It now uses a phrase; “Inclusive growth.”

In April 2012, the World Bank wrote;

“Uganda remains one of the fastest growing economies in Africa, leading to a considerable reduction in poverty and a good quality of life for some. However, as one travels across the country, it becomes evident that the growth of the economy is not necessarily translated into equitable living standards.”

One indicator of growth as Mwenda highlights should be the value of exports.

In his piece, Mwenda notes that he wrote to the IMF for statistics on our exports. Well, he has a figure of exports growing from $200m in 1991 to $5.4b in 2015. This he sums up as our exports growing 21 times. Available statistics indicate that at the time of economic reforms in 1990, Uganda exported goods and services $311m. As of 2013, this figure was $4.9b. This is a 1475% rise. More than half of these exports $2.8b (2013) were goods. Impressive. Right? Not quite. Considering our addiction to imports, the benefits of exports have been offset by the cost of importing.

Over the same period, Uganda was importing goods and services worth $833.7m in 1991. By the end of 2013, imports were $7.5b. That is a rise of about 800 percent. The gap between imports and exports is now $2.6b. In 22 years, the net gain of exporting has been about 12.6 percent. That means each year, exports improved by 0.5%. That is not remarkable enough to make it exceptional. It is okay.

“The external current account deficit widened in FY2014/15 and is expected to expand further as a result of high infrastructure-related imports, stagnant exports, and weak tourism receipts stemming from the difficulties in neighboring countries,” The IMF noted in a November 2015 PSI review of Uganda.

The recent depreciation of Uganda Shilling has brought the conversation of boosting exports to the public domain. This can be done by value addition. For now, we keep talking.

On Coffee, he points out that in 1990 Uganda was 94 percent dependent on coffee exports. I do not have the 1990 statistics, however in 1994, coffee represented 64% of total exports. Mwenda says as of 2015, that percentage is 7.4%. Indeed, Uganda had escaped its exposure to fluctuations in the world  market prices of a single commodity. Then again, tell me a coffee brand from Uganda that is competing on the global market? Better still, why don’t we have the likes of Nestle or Nescafe setting up shop here? Andrew Rugasira in his 2013 book, “A Good African Story” describes how adding value to Uganda’s coffee and exporting it has been troublesome. The improved coffee exports have not trickled down to the farmer as well as they should.

“Coffee farmers in Africa are not just poor because the world commodity prices have been low, but fundamentally because these farmers operate at the bottom of the value chain, have little crop diversification and limited access to farm inputs and other appropriate technologies,” Rugasira writes.

Mwenda points to a report done by the Standard Bank Group – I would think this what he suggests and not Stanbic Bank Group -, which I have not seen or read. The report according to Mwenda, “…aimed to provide a picture of the most reformed and best-managed economies where investors can put their money and expect the best rate of risk-adjusted return. It identified six countries – Uganda, Rwanda, Tanzania, Burkina Faso, Ethiopia, and Mozambique.” The justification for bringing this into his piece is to indicate that some do not have term limits, some are ruled by military leaders and that none has ever seen an opposition party defeat a ruling party in an election. I am not sure where this ties in with Uganda’s impressive performance rather than justify the long stay in power. This is not denying the amount Foreign Direct Investment Uganda has received over the years.

On poverty reduction, he notes that poverty level dropped from 56% in 1992 to 19% in 2010, according to the Uganda Demographic and Household Survey for 2012. If we use the more recent statistics, Uganda Poverty Status Report 2014, poverty levels in the country were 19.7% in 2012/13 from 24.5% in 2009/2010.  This shows an improving trend but that is not the whole story.

“However, even with the significant reduction in poverty over the last 20 years, the majority of the population remains vulnerable. In 2012/13 more than half of the nonpoor population was classified as insecure, living below twice the poverty line. The large number employed in the agricultural sector are vulnerable to climatic shocks pests, plant and animal diseases and price fluctuations; and those working in the informal sector usually receive low and irregular income. We will not be able to sustain the progress made unless the underlying structural causes of economic vulnerability are addressed, particularly in light of growing demographic pressures,” Reads the 2014 Poverty Status Report.

Mwenda ignores something important; inequality.  Using the World Bank, which Mwenda widely quotes, society is becoming unequal. In 2013, Moustapha Ndiaye, World Bank’s Country Manager for Uganda then noted that whilst Uganda made gains in economic growth and poverty reduction, “…some groups are at risk of being excluded from Uganda’s gains.  Income inequality is on the rise, showing that something has to be done differently.”

When Besigye moves around the country, is his aim showing you the good things that government has done? The opposition is expected to be critical of the government and challenge it where it is not doing right. If a hospital is in a terrible state who will highlight it? Why would one expect the opposition to praise government if services have been delivered – isn’t that their job anyway? When Besigye says defiance, here is my understanding;

“Not only do market forces threaten to colonize society, the state too threatens to devour society.  Free markets are not a solution for poverty; they are one cause of modern poverty.  State sovereignty is not a guarantor of freedom; it threatens to undermine social freedom.  The challenge is not how the state can regulate the market, but how society can regulate both the state and the market,” Prof. Mahmood Mamdani (July 16th 2012 at the 20th Joseph Mubiru memorial lecture).

Mwenda argues that Uganda has limited resources to deliver quality services to the people. In fact, he compares Uganda’s low budget allocation per person compared to Kenya. This is no justification for some of the quality of healthcare and education we have in the country. Even with the “limited resources” money is lost to inflated costs, corruption in contracting and buying cars for government officials – during the campaign season. It should be noted that Mwenda has argued before that there is no scientific evidence to prove that corruption affects economic development. He believes corruption is just a moral argument.

However, if money meant to build a school or a hospital is diverted into individual pockets, do Ugandans benefit? That money, since it is stolen will go to the unregulated real estate sector. It will be used to purchase land. A mall and rentals will be constructed. The landowner will benefit. The civil servant will be a mall owner. The landowner will have some extra cash to set-up a business. A poor person in Abim will not afford healthcare. A teacher will keep teaching under the mango tree. The quality of education also keeps falling.

Look how easy it is for those in positions of power increase their salaries. When teachers ask, “we can’t afford it.” Look at the state of the Public Service Pension Scheme. Ugandans work for the government. When they retire, the process of getting paid is tedious. Some die of stress-related illnesses. Others give up. When their money gets stolen by corrupt officials, we’ll argue “there is no scientific evidence to prove the negative effects.”

Of course, the argument will be that jobs will be created with the corrupt money. But who benefits the most? The Ugandan? The private sector is also guilty. But hey, it is a private sector-led economy.

It is capitalism. Stupid!

If Uganda had been exceptional, why do we still have foreign banks dominating? Where is that Multinational from Uganda dominating East Africa? Where is our textile sector? What is the cost of corruption? Where are the jobs? What were the benefits of privatization? Are Ugandan’s so bad at management? It is important to ask presidential candidates all the tough questions because they’re our servants. In as much as Uganda has had good growth, increased FDI, and poverty reduction, it doesn’t take away the fact that we could have been a better country – 30 years later. The question is, how we leap from being okay to exceptional?




Categories: bank of Uganda, uganda

The art of “fear-mongering”

The only thing we have to fear is fear itself. Franklin D. Roosevelt

Isingiro. A district lacking a proper water supply system. It has a new tarmacked road. Constructed by the Chinese. A population engaged in agriculture. A population that is poor. High voltage electricity lines crisscross their land. They have limited access to electricity. It is a hot day. There is an endless supply of drinking water. 2000 people have converged at the Beteinensha’s in Isingiro to celebrate a life. Before the road was tarmacked, there was an old army tank near their home. It was a reminder of a time when death ripped through their family.

It was January 2016. There she lay. Calm. Quiet. She couldn’t talk back. She was in pain for months. The pain had gone. There was a relief. At 95, she had lived the life. Her husband had lived the life too. For him, that life was ended 41 years ago. He was killed during the Idi Amin regime. The so-called reign of terror in Uganda. He was no soldier. He didn’t die on the frontline. He owned no gun. He was picked up by unknown people. Killed. Dumped in a forest. Many others were killed. For the 41 years she lived without him, she didn’t know why he had been killed. Her children didn’t know too. His death changed their lives. The girls dropped out of school. Got married. The boys struggled as they made it through school.

“All we want to know is why they killed our father,” they asked. Their mother asked the same question. This time, her eyes were closed. She was inside a box. There was sadness. There was a celebration of life. There were murmurs. Murmurs as the children continued to ask. “Why was our father targeted? Killed?” Their mother had now died. She would have loved to hear an answer to that question.  They eulogized her as a great mother. A mother who had raised ten children. She now had grandchildren. The grandchildren too asked the same question. “Why and who killed our grandfather.” They got no answer.

A minister of defense. Their in-law. She had put on a yellow dress. She eulogized her. Then she seemed to have an answer to the question. A writer she was once. She is still one, apparently. She writes columns lately. Not books. She blamed the reign of terror at the time of his death. She didn’t have a specific answer. She had what appeared to be a solution. For 30 years, people were not disappearing. There was peace. No more reign of terror. That was no solution. She was emphasizing a point. “You have had peace for years, why would you want to change this?” she told them. Murmurs. No cheers. It was no campaign rally. It was a burial.

The people of Isingiro needed no reminder of what happened in Amin’s regime. They were being told, “Change the status-quo at your own risk.” Vote yellow. Vote peace. Vote a son who betrayed his father. Things could be different. Vote the man who waves two fingers in the air. That peace could come to an end. In the peoples eyes, fear was visible. The fear of the unknown.

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[Guest Blog] Crystal Telecom Rwanda IPO: Why investors could cry

By Andrew Muhimbise

Rwanda is a small mountainous country in the middle of Africa, it has had a stellar Public Relations performance ever since the Rwanda Patriotic Front (RPF) took power and control of this small Nation,

I mention RPF because this ruling party owns the selling shareholders: Crystal Ventures which is offering 100% of their Special Purpose Vehicle Crystal telecom owning 20% in MTN Rwanda.

Am to use an approximate exchange rate of 1 Rwanda Franc for 4 Uganda Shillings


IPO Details:

Opening Date: 21st May 2015

Company: Crystal Telecom

Selling Shareholder: Crystal Ventures

Business: 20% owner in MTN Rwanda, a Telecommunications company

Shares on Offer: 270,177,320

Percentage of Offer: 100% (equivalent to 20% of MTN Rwanda)

Offer price per share: 105 RwF (UgX 416)

Minimum application: 1,000 shares (UgX 416,000/=)

Offer Proceeds: 28,368,618,699 RwF (UgX 113 billion)

Allocation: 75% ($30m) Institutional Investors and 25% ($10m) Retail Investors

Closing Date: 5th June 2015

Listing Date: 17th July 2015


I have read through their prospectus which reiterates the Rwandan PR machine savvy (a very good skill by the way) and below, after a deeper look into this Telecom CRYSTAL BALL, is why I think investors in this IPO are bound to cry, later rather than sooner:


  1. IPO price Valuation- 105 RwF

The real financials of this IPO lay somewhere else that is MTN Rwanda, and a glance at their 2014 books points to a 6 billion Rwanda Franc (24 billion Uganda Shillings) profit, therefore for the Crystal Telecom 20% we are talking of 2014 4.8 billion Uganda shillings in profit with an asking price of 113 billion Uganda shillings for that 20%; ordinarily companies are valued at X10 their earnings, meaning they give the investor at least 10 years to recover their money, this would come to maximum 48 billion UgX- paying 105 RwF where one could pay 45 RwF is something to cry about especially knowing that each share worth 105 RwF earned 4.5 RwF as at end of 2014 but wait what about the equity statement


  1. The Equity Statement- depleting retained earnings

MTN Rwanda had a profit of UgX 24 billion and paid a record dividend for 2014 of UgX 42 billion, there are no prizes for guessing why Crystal Ventures the selling shareholder was paid around UgX 6 billion in dividends just before they exit the shareholding; of course the 18 billion balance came from retained earnings.

This is clearing out before, it’s a like a house seller digging up and going off with the tile works and other house finishes, you would definitely cry if such a house is sold to you, Statement of Equity is where business owners wealth is built over time- remember the basic accounts: Assets = Capital/Equity + Liabilities, with this in mind your pointing to Liabilities filling the gap. Of course all this was achieved with the 11th May 2015 Shareholders agreement, typical white caller heist on a ‘to be sold company’ asking for $41m after all those payouts, the shareholder agreement between Crystal Ventures nd MTN Group gives a hint.


  1. The Shareholders’ Agreement preparing for EXIT

Crystal Ventures and MTN put pen to paper on a shareholders agreement, in their Crystal Ventures management fees it was     earning  annually alongside MTN group going forward is terminated, you wonder     why not pass it on to the next ‘holders’ whose sole business will anyway remain holding and managing the 20% stake in MTN Rwanda; this is a lost income on   incoming holders as in the corporate world management fees are dividends which attract minimal taxes, we are talking about    UgX 1.5 billion in management fees paid to Crystal Ventures in 2014 alone   which is 25% of their earning per share- it’s no more anymore all goes to MTN Rwanda.

There is even no dividend policy agreed other than the obvious that dividends will be paid out of profits, don’t forget dividend from MTN Rwanda is the sole source of income for Crystal Telecom

This exit reason for crying is the loss of corporate power and clout of Crystal Telecom going forward, without the backup of the ruling party’s   business entity who will reign in MTN group in how it manages MTN  Rwanda- No one, the agreement tells of behind the scenes negotiations sacrificing management fees income for depletion of retained earnings-  welcome to the world of corporate power dealing; why then not list MTN Rwanda directly


  1. Why not LIST MTN Rwanda instead! ‘The Double Tax trap’

This IPO arrangement will ensure shareholders are unnecessarily double        taxed why else do you have the concept of group companies!!!, first at MTN (corporation tax and withholding tax on dividends) then     once again at Crystal Telecom; my gut tells me MTN Group did not accept this- to be listed directly so they have more leeway to freely do stuff like      management fees, therefore this is like a flying kiss- the other person intends it (ownership in MTN) but it’s never felt, like a simple corporate action of converting debt into equity could wipe out the distant         shareholders who by now will be scattered and have no clout whatsoever, Crystal Telecom will be a helpless orphan of a formerly   powerful and rich parents- I would cry in that situation.


  1. Growth prospects and comparisons

MTN Rwanda has 3.9 million subscribers and made 24 billion UgX, compare this to MTN Uganda with 10 million subscribers which made 220 billion; this points to an efficiency gap or sheer lack of depth in the Rwandan market; these 3.9 m are with 10 m subscriber market- for me its seems MTN Rwandan is a mature company whose growth will not be spectacular at least from the figures point of view as per net profit per subscriber plus also there will be a lack of deliberate clout that has over the years been provided by Crystal Ventures the ruling party, RPF’s, business arm- the only clear thin advantage is delinking RPF holding in MTN Rwanda to the Public


Muhimbise’s last Word

The above 5 points would make me cry, so no flying kiss from me but I like and appreciate the spirit in which Crystal Ventures cedes its MTN Rwanda holding to the public, it would nice along the way for MTN to do a share swap to allow real direct ownership,

The $41m to Crystal Ventures will allow it to deploy capital elsewhere as it says plus add depth to the nascent Kigali based Stock market.


Retail Investor based in Uganda, Rwanda’s friendly neighbor


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For Kyayonka, look beyond the minuscule time at NSSF

It’s a four. No, it is a six. Wait, they call them boundaries. Wicket. This one comes after some fine bowling. A mistake by the batsman. Then there is a duck. Not one in water. One in cricket where you don’t get to pick a single run. Then there is Yorker. An over. A century. A one day international. And many more. Uganda is a cricket playing nation. We are not the best. Ivan Kyayonka was once a cricketer. I never got to watch him play or even read about his style. In a south western village in Nyarushanje sub-county, Rukungiri district, I hardly knew a single Ugandan cricketer. The newspaper sports pages rarely gave cricket that much mileage. I never got to watch Kyayonka play either. He moved from a player and by 2006, he was in the board room at the Uganda Cricket Association. In his time as chairman UCA, cricket development in secondary schools was its best. The ICC (International Cricket Council) recognized Uganda’s schools development program.

That was Kyayonka the cricketer.

He, however, made his mark at Shell Uganda – now Vivo Energy. For 31 years, he worked at one single company. I repeat. One single company. Some of us, in the last five years, have switched jobs looking for stability and career growth. For 31 years, he grew through the ranks at Shell and kept it a dominant force in Uganda’s retail fuel market. Stability is what we look for in a workplace. Growth both in terms of ranking and pay are other factors. At Shell, Kyayonka got all that. Uganda’s fuel retail business had companies like Agip, Gapco, Esso, Caltex, Total and Shell. By the end of 2014, the industry has changed. Shell retail stations continue to exist but under the management of Vivo Energy – a Joint Venture consisting of Shell, Vitol and Helios Investment Partners. Shell also acquired the assets of Agip in the 2000’s. There were other acquisitions at other retailers too. Total acquired Caltex and Gapco acquired Esso.

The retail industry has also changed. Shell and Total remain the most dominant fuel stations, but the competition has also increased with smaller retailers taking a chunk of the market.

Kyayonka was special. He became the pseudo representative for the fuel industry in Uganda. On any day, he was available for a comment on anything about fuel imports, prices and taxes. He had information on his fingertips. As a journalist, this helps. There was no need to send an email to the PR person. Send a text or even send through reminders in order to get a response. Kyayonka was always available. This worked in Shell’s favor. The brand was always well represented in the newspapers, radio and television. To-date, as other elusive industry players hide behind the curtain, Vivo Energy as a company is always available for a comment. That was a foundation laid by Kyayonka.

Fuel prices would drop. His efficiency had nothing to do with pricing. As a manager, his responsibility was to make a considerable return to shareholders. If the regulators are not doing their job, can you blame the businessmen for making a profit? It wouldn’t be capitalism. Would it?

In 2013, he retired after completing the transition from Shell to Vivo Energy. His retirement makes him one of the top savers in NSSF. As an astute manager with clear understanding of how to deal with larger than life characters, he joined the NSSF board. He was the board chairman for less than three years. His mistake? Buying Umeme shares. That is what people. A decision he never regretted. A decision that many tend to judge him. He was a board chairman who clearly defended his managers and was a good ally to Richard Byarugaba, the current NSSF MD. He also always defended Ms. Geraldine Ssali, who was acting MD for a year till October 2014.

In the board room, he was also fearless. He understood the investment dynamics and the politics around NSSF. At one press briefing, Kyayonka did not hesitate to indicate how some of the board members didn’t understand a thing about investments.

His time at NSSF was the shortest. The decision to approve the buying of Umeme shares was significant. Notably, savers want higher interest each year. They want NSSF to invest. His decision was to invest in an electricity distributor that is a near monopoly. A company that makes a 20% return on investment according to the concession agreement signed with the government.

For anyone to discuss Kyayonka in the context of his three years at NSSF, it would all be unfair. Look at those 31 years of growing a business that is as volatile as the currency markets.

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