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UNTOLD STORY: How M7 Tasked Dr. Mbonye To Save Bank Of Uganda Governor Mutebile’s Life And Why He Advised Him Not To Fly Him To South Africa….

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President Yoweri Museveni on Tuesday evening talked to Doctor Ben Mbonye, the Director Nakasero hospital and his team of doctors who were attending to the unconscious Bank of Uganda (BOU) Governor Professor Emmanuel Mutebile and tasked him to do to save his life at all cost.

Credible sources at Nakasero hospital have told the Grapevine that the president phoned Mbonye to understand the health condition of the governor who has been hospitalized since Saturday when he was admitted in the hospital.

“No it’s not true the man is dead. The director has just briefed the president on his health condition. He is out of danger,” one of the doctors attending to Mutebile told this website.

The doctor added that Dr. Mbonye explained to the president that it will not be good to fly him to South Africa to meet his personal doctors as asked by Mutebile’s family members and friends because his condition is not fit for air travel.

There is also fear that Mutebile will not get good medical attention in South Africa given that most of the doctors in there are concentrating on the deadly coronavirus patients.

This website has exclusively established that president Museveni was worried when he saw a frail Mutebile recently at State house Entebbe where he attended a meeting in a wheelchair and couldn’t talk properly.

Multiple credible sources told this website that it’s the reason why the president rushed to appoint Dr. Michael Atingi-Ego as the deputy governor Bank of Uganda replacing Dr. Louis Kasekende whose contract expired early this year.

Sources further intimated to this website that the president realized that Mutebile’s deteriorating health condition was slowly stalling the operations of the central bank.

Our efforts to speak to Charity Mugumya the director Communications Bank of Uganda were futile.

However, Dr. Adam Mugume, the Executive Director Research, Bank of Uganda clarified that, “BoU Governor Prof. Mutebile took sick leave on Wednesday March 25, 2020. He is receiving treatment in a Ugandan medical facility and will resume duty as soon as he has recuperated. Strongly disregard the false and malicious stories of his passing.”

 

By Sengooba Alirabaki

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I Am Going To Bewitch Someone – New Vision’s Tegusulwa Warns Boss Kabushenga After Being Served With Forced Leave Letter…..

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Tegusulwa and Kabushenga (inset)

New Vision’s Chief Executive Officer (CEO) Robert Kabushenga is in fear for his dear life after being threatened with witchcraft for sending staff on forced leave for three months.

A credible source at Vision group has told the Grapevine that on Thursday afternoon, Tegusulwa, who anchors a motivation slot ‘Toli Mwavu Mutwe gwo gwe mwavu’ on Bukedde TV was among the staff who were served with letters sending them on forced leave by NV’s Human Resource Manager.

This did not augur well for Tegusulwa who first thought that it was a joke since he considers himself as one of the essential staff at vision group given his vast experience and dynamism.

With the forced leave letter in his hands, Tegusulwa, a law student at Kampala International University (KIU) did not believe what he was reading. He immediately stormed Kabushenga’s office for an explanation insisting that it was a mistake to serve him.

Kabushenga boldly informed him that it was not a mistake but the company had decided to send some of the staff home as they try to weather the COVID19 storm.

A sample of the letter given to some of the staff whose employment at NV was terminated

This website has been reliably informed that Tegusulwa pleaded with Kabushenga to change his mind because he has a lot of responsibilities like paying his tuition at KIU and taking care of his family but all these pleas fell on deaf ears. Kabushenga insisted that it was the company stand.

He further told Tegusulwa that it was not a personal decision and he should not take it personal on him or the Human Resource Manager to the extent of not greeting them when they meet.

When Tegusulwa left the CEOs office, he stormed Bukedde TV newsroom and threatened that, ‘I think I should now turn to witchcraft and bewitch this man’.

In the letter, Tegusulwa is going to be paid half of his salary which means he is going to be paid Shs.500, 000 for upkeep during the forced leave.

However, this website has learnt that some of the staff sent on forced leave like James Serunkuuma the Manager of Bukedde TV 2 had refused to vacate office but Kabushenga ordered security not to allow any of them to access their offices.

Efforts to speak to Tegusulwa were futile.

It should be remembered that two weeks back, Kabushenga issued a memo to all the New Vision staff that the company no longer has money to cater for all of them due to the economic crisis brought by COVID19 pandemic.

 

By Sengooba Alirabaki

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You Cannot Deny Savers Their Money, If You Cannot Help Them Now, Where Is The Better Life You Have Always Promised Them? – Former NSSF D/MD Writes To Finance Ministry, Blasts Her Former Boss…

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Ms. Geraldine Ssali and Mr. Byarugaba (inset)

Former National Social Securities Fund (NSSF) Deputy MD Geraldine Ssali Busuulwa has punched holes in a letter written by his former boss Richard Byarugaba on denying savers 20% of their money to help them through the Covid19 crisis.

In a letter to the Minister of Finance Planning and Economic Development, Geraldine asked Byarugaba that if NSSF cannot come in at such a time for its desperate members, when shall they step in to “ease the noose” around their necks? Where is the better life that members have always been promised when they need it?.

Below is her letter:

NSSF’S LETTER TO THE MINISTER OF FINANCE,PLANNING AND ECONOMIC DEVELOPMENT.

Good afternoon Sir. Yesterday you asked for my opinion on the letter NSSF wrote to the Minister with regards to the Covid-19 relief for its members: Paying of 20% of each member’s balance.

I’m not sure if the minister also asked Management to indulge in the Macro economic impact of this “transaction” but I think that would be MoFPED and Central Bank to competently handle Macroeconomic policy and give the final position. NSSF manage should concern themselves with their primary strand of responsibility- providing social security to it’s members.

There’s a school of thought on the theory of the half glass. Basically stating that the Optimistic mind (sighting opportunities and possibilities) sees the glass half full and the Pessimistic mind(seeing difficulties, impossibilities and challenges) will always see the same glass half empty! A quick scan of the document would suggest the Fund’s managers have decided to fall under the later, in order to discourage such a proposal from ever seeing the light of day. An optimistic Fund manager on the other hand would have used this opportunity to (“do what it says on the tin”) and entice/attract a bigger (including voluntary savers) membership to the Fund by demonstrating their relevance and usefulness to existing members at such a time when most governments are extending financial assistance to their vulnerable citizens in form of social welfare programs- I trust you have been following at International level so I shall not belabour ……….

Of course, the UGX 380 m that NSSF gave to the National Task Force efforts under the Prime Minister’s office was appreciated by the country at large but now it’s core members need NSSF support for some of their money to bail them out as they struggle to sustain their families and meet their day to day obligations.

The Fund management in citing dire negative economic consequences is stealthily and technically avoiding their natural responsibility – The purpose and cause on which NSSF was formed. Any systemic economic risk that was meant to happen due to the global pandemic, Covid-19, is happening right now and there’s nothing NSSF can do about it. This risk is already crystallising in the Ugandan market and every player in the market will feel its heat! So whatever must go wrong is going wrong as we speak. However, the non- systematic risk anticipated by the Fund managers prior to Covid- 19 can be hedged by simple instruments going forward. For example if the treasury desk officers finds that their asset interest rates are falling, they can acquire a liability whose interest rate will offset any loss on that asset. There are simple Zero cost financial instruments being offered by banks in our market like Stanbic, Stanchart, Equity and the like. I’m fully aware that the Fund has got a risk management framework, that takes into account scenarios and simulations like “a run on the Fund” and any competent crisis management plans would have been put in place to cater for such contingencies as standard procedure for any given financial or quasi financial institutions in this market.

So the net Cash of UGX 2.5 Trillion needed within the next one year (12 months) to fulfil this obligation, boils down to affordability, without any political innuendo or undertones.

Going by the content of the letter you shared and their last published Financial statements of Financial Y/E June 2018/19, my unbiased/unprejudiced thoughts are as follows:-

In order for NSSF to fulfil the liquidity needs of 20% of member balances alluded to, they would need to look at their liquidity position. First the UGX 125 Bn tacked away in reserves for a rainy day; it’s raining now! Secondly, the Current assets at about UGX 280 Bns are immediately available if they chose to operate an Accident and Emergency system – it attends to the most fatal not who came first or who is more important. Like a case by case basis. Secondly, those Government Securities held by the Government of Kenya that are over a UGX 1 Trillion! In a nutshell, this is Ugandan saver’s money being used to build Kenyan infrastructure, and this is okay! Thirdly, a phased liquidation of their treasury bills, bonds and Fixed deposits within the Ugandan market. This assured fixed income albeit with different maturity tenures falling under 3 – months, 6- months, 1- year, 5 years, 10- years, etc.They would have dive in and look at these assets concurrently with the monthly contributions they collect from members. These assets never have the same maturity times. This asset class accounts for over 70% of the whole investment portfolio of NSSF so a phased transaction can be used to cushion any negative effects anticipated on this asset class alone without needing to touch the real Estate and Equities classes. The payments required for the fulfilment of the contractual obligations under the real estate contracts ( which contracts normally span over 5-years plus, are already planned for and fall under business as usual. Management is not required to pay 100% of these obligations upfront in one year and each contract has pre-negotiated terms in case of delayed payments. Never mind that an average NSSF saver will not be able to afford those houses for example in Lubowa. You heard right, 75% of the Fund is owned by 100K members (who are 4% of members) who probably already own homes anyway. This lot may not even need their 20% at this time. The Fund collects UGX 100 bn cash from savers every month and only approximately 3% of this goes to paying monthly benefit claims to members. The rest of the cash can also be added on the 20% settlement.

There’s an artificially amplified impact on the Ugandan economy. Uganda’s GDP alone without crossing to the rest of East Africa is currently USD 27.46 Bn (UGX 92.7 Trn). The UGX 2.5Tr (20%) is a mere 3% of this but would still be spent and re-invested within the economy by its members without significant economic leakages. This is still a boost in the economy because more money in circulation to buy goods in the market. The impact of this pay out on exports as NSSF suggests is decimal because no one knows for sure how much of that money once paid, would be channeled towards exports, sufficient enough to cause an impairment on our Balance of Trade/Payments position as a country. Uganda’s economy is said to be growing at 6% p.a. Core inflation is currently running at 3.4 % and with all the projected doom as a result from Covid -19; is projected to stand at 4.6% in 2021! A difference of only 1.2%. Uganda has in addition along all the other EA countries got a lot of external budgetary support coming to a total of UGX 3.2 Trn. The total effect of all this should be enough to mitigate any shock in the market resulting from a cash outflow of UGX 2.5 Trn. It should be mentioned that most of this money is coming in as the much needed USD and EUROs forex. The spokes person for Bank of Uganda and MoFPED must throw more light on this aspect.

From a human perspective alone, when I weigh the cost of defaulting on a real estate project, the so called “damage” to the east African securities markets, the sell of securities at a discount against the UGX 2.5Tr ( 3% of GDP) and the Financial reporting implications alluded to by the Fund’s management AGAINST the need to bail out Fund members with a small amount of their own hard earned savings needed to survive, I feel the very purpose of the Fund’s existence has been obliterated the inept mindset of the Fund’s management that’s contingent on chance survival and smoke screens!

The citation of Jamwa’s case totally has no place in this debate. I’m not a lawyer but as you know, ignorance of the law has never been a defence. This precedent has been misinterpreted in this case and misapplied. Every situation is unique and carries unique merits, context and circumstances. If the Fund’s managers in this case chose to exit a financial position on any securities in the market prior to Maturity to acquire liquidity in order to save lives, the courts of law would apply the Spirit of the law and not literally or mischievously interpret the law to lock them up! A legal opinion can be officially sought by NSSF from the Attorney General’s office or even from their own external lawyers! You can further consult your legal associates on this.

The Legal aspects of concern to be revisited is the aspect of retaining reserves from the annual profits made. All remaining profits after costs are supposed to be distributed.The law only allows the Fund managers to remove their operating costs and distribute the rest to the members whose money was used to generate those profits. Any retention is illegal. Should a member exit the Fund leaving some of their earnings under reserves, they will not have benefited and that money will probably go to future members whose earnings were not used to generate those profits. One of these days a serious Member will file a law suit against the Fund only to expose the Fund to litigation waste of resources. They should also seek AG’s on this matter.

It’s my strong view that management at this stage must remind themselves the very justification of NSSF’s existence – to provide a social security safety net for its members whenever their social security is under threat, not single handedly trying to save the East African Economy as they would like us to believe (sec 2.2 of the letter). Besides, year on year, members are reminded how NSSF Uganda is the largest Fund in East Africa. This statement is always met with a Thunderous applause from its members and the public at large. But what does this exactly mean to a layman who has been contributing to NSSF for the last 20 years? NSSF has to walk the walk and talk the talk! This is the time for members to size up this “largest” Fund in EA.

And for the humour: My brother T. Mirundi would say; If a man keeps preaching and boasting about his size, test that size by first asking him to buy you a small Toyota Rav 4. If he switches off his phones and relocates to another village, just know he was a Fake-master (Mufere)

For simplicity’s sake, ILO and ISSA have put forward a range of standards and guidelines that are really a whole topic for another day, but simply put, for one to be socially secure is to have a roof over your head, have a daily meal, care for medical, have some gainful employment, and an income of sorts. For example members of NSSF in companies that are economically stressed have been laid off due to the prolonged effects of the Covid lockdown. If you step out for example and go to the sugar plantations across the country, people are counting on the arrival of Posho and beans from the National Task force. Other people have even lost their homes due to water bodies like Lake Victoria naturally claiming their homes and other property. Some members and their families not only starving but with rent and loan arrears and some have lost all their properties. Now if NSSF cannot come in at such a time for it’s desperate members, when shall they step in to “ease the noose” around their necks? Where is the better life that members have always been promised when they need it?

The Fund has sufficient headroom on profitability to play in the Fixed Income asset class without the need to call on the rest of its real estate and Equities portfolios. The Fund can afford this transaction especially if it’s staggered over time without causing any significant negative impact. The powers that be should find the political will to pull down this facade painted by NSSF management and pay the 20% especially to those members that need it. most first. A rejection of this proposal would be anything but economic!

 

GERALDINE SSALI

14/05/2020

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WHERE IS THE WORKERS’ MONEY? Stop Writing Misleading, Alarmist, Dishonest And Unprofessional Letters – Workers MP Calls NSSF Boss A Hitman Who Wants To Grab Savers Money….

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Dr. Sam Lyomoki and NSSF boss Richard Byarugaba (inset)

Workers Member of Parliament Dr. Sam Lyomoki has branded National Socials Security Fund (NSSF) boss as an economic hitman who wants to steal workers saving.

In a letter to the Minister of Finance, Planning and Economic Development dated 12th May, 2020, Dr. Lyomoki says that Brarugaba’s letter to the same ministry explaining why the fund cannot pay 20% to each saver to sail them through the tough Covid19 time was misleading, irregular, alarmist, dishonest and unprofessional.

Dr. Lyomoki rallied savers to follow this debate keenly and where necessary be ready to come to camp at Parliament and at the NSSF offices at Workers House should NSSF continue with their callous attempts to block or delay the process.

Below is his letter:

The right position on the proposed midterm access by NSSF savers

What does the proposal for midterm access entail?

  1. Fellow citizens in the next few days, and as guided by the Right Hon Speaker, Parliament has to pronounce itself on the question of allowing savers under NSSF a small part of their savings. We are not talking of these savers accessing government or someone else’s money but their own money earned in sweat and blood. We are not even talking of them accessing all but a very small portion of their money, actually as small as less than 20% of it. And again, we are not saying that everyone saving with NSSF shall automatically qualify for this money but those who wish to and who must be 45 years of age and above or have saved for at least for 10 years if they are not yet 45years of age.
  1. Our analysis shows that as of March 31, 2020, NSSF had a total member portfolio of 11.4trillion. There were about 150,000 members between 45 and 55 of age and holding approximately3.7 trillion shs, 20% of which amounts to 740 billion shs. Subjecting this to another condition “of at least 10 years of savings”, reduces the exposure to almost that number almost half, i.e. about 370billion shs. The Fund can carry out an actuarial study now and handle this. The Audit Report of December2019 showed that if the Fund was to pay out 20% of members of 45 years, it would spend 300bn, which is affordable as the Fund collects over 100bn a month.
  1. To avoid the Fund running out of money we have further proposed many other safeguards that include liquidity or availability of cash with the Fund and the technical veto by the management of the Fund in accordance to guidelines approved by the Board and the responsible government ministry.

Misleading, irregular and alarmist missive by NSSF MD

  1. The processing of an amendment to the law to make this possible started long before our current COVID19 challenge and our cry now is that this can no longer wait.
  2. However, there is now a misleading, irregular, alarmist, dishonest and unprofessional letter by the Managing Director of the NSSF Board, Richard Byarugaba, written to the Minister of Finance Planning and Economic Development, against the same. In this letter and in an obvious attempt to negatively bias decision, Mr. Byarugaba deliberately premises his analysis on a wrong assumption that our proposal for midterm access is for an unconditional 20% drawn down at a go on the about 13 Trillion portfolios of the Fund translating to about 2.6Trillion.
  3. Obviously, such a reckless irresponsible proposition would be untenable due to lack of liquidity and would also lead to serious ramifications both to the members and the financial systems as ably and correctly articulated in his analysis. However, that misleading approach is not what our midterm proposal seeks. Our midterm proposal has considered this especially the numbers regarding savers 45 years and above of who have saved for at least 10 years as already analysed. We note that Mr. Byarugaba’s analysis deliberately ignores this, and the previous discussions, concessions and proposed safeguards relating to the proposed midterm access. Mr. Byarugaba even couldn’t bother to consult the Board given that his controversial stance now appears to contradict the official position of the Board.
  1. NSSF is a social security institution and therefore her core mandate is social protection and so our argument for midterm access is scientific and in tandem with the ILO Social Security (Minimum Standards) Convention, 1952 (No. 102). The internationally agreed instrument, benchmark and minimum standard for the very basic social security principles, that establishes nine branches of social security to wit medical care; sickness benefit; unemployment benefit; old-age benefit; employment injury benefit; family benefit; maternity benefit; invalidity benefit; and survivors’ benefit.
  1. In our case as Uganda, under the current National Social Security Fund Act, 1985, we have only 5 levels of benefits (i.e. age, withdrawal, invalidity, emigration grant, survivors’) that translate to only 3 (i.e. age, invalidity and survivors’) under the ILO standard. The implication of this is that we are still to actualize the remaining 6 benefits i.e. medical care; sickness benefit; unemployment benefit; employment injury benefit; family benefit and maternity benefit.
  1. Consequently, our proposal for midterm access, and to allow the management and board of NSSF flexibility and liberty in introducing new lines of benefits, is to allow a window of opportunity within the scope of the ILO standard taking into consideration the liquidity of the Fund and prevailing national circumstances.

Anyone arguing that this shall erode the fund is either more concerned with servicing economic interests or isn’t well grounded in the core and purpose of the Fund.

Having a monument and a powerful NSSF with an ever-increasing financial muscle without this translating into the best social security of members is handing over a hitherto social security institute to economic hitmen.

 

Lies and myths by economic hitmen

  1. As we address the social security interests of workers we continue to encounter and deal with lies and myths peddled by economic hitmen whose major interest is to grab a chuck of the workers money.
  2. As of now we are still faced with another serious controversy and standoff that has led to the two Parliamentary committees handling this bill to be stuck with the report and so we can’t proceed to the 2nd and 3rd reading. The controversy arose from what the government had proposed to cure the ‘mischief” of the balance between the economic and social security interests.
  1. In the current NSSF Act, NSSF is supposed to be under the ministry responsible for social security. The function and mandate of social security is under ministry responsible for labour currently under the ministry of Gender, Labour and Social Development (MGL&SD). In 2003, H.E the President, in his wisdom, administratively transferred NSSF and placed it under the ministry responsible for Finance, Planning and Economic Development, given the volume of funds managed by the Fund.
  2. However, that transfer created a challenge. Whereas the ministry responsible for finance could handle the economic and investment imperatives of the Fund, that are actually secondary and consequential, that ministry has been incompetent in managing the social security aspects.
  3. The solution was to bring on board the ministry responsible for labour that houses social protection world over. There were 3 options to do this: i) Leave the Fund under finance but transfer the department of labour to finance so you create the ministry of state for labour under MoFPED. ii) Create a dual supervision where both ministries, finance (MoFPED) and labour (MGL&SD) work in a guided way; iii) Revert the Fund to the ministry of Gender, Labour and SocialDevelopment.
  4. I did write to H. E the president giving the 3 scenarios to resolve the challenge. However, H.E the President seems to have not taken my proposal and the situation persisted.
  5. However, in proposing the amendment, cabinet seems to have moved and proposed the 2ndscenario as analysed above. As workers we supported that position as that would resolve the challenge of balancing the economic and social protection interests just like it is worldwide.

Standoff at Parliament

  1. However, as Parliament was concluding the process in the Committee the economic interests lobbied their way and reached out to H.E President who wrote to Parliament guiding that the current situation should remain where the Fund is exclusively under ministry of Finance, Planning and Economic Development arguing that dual supervision would create confusion. We failed to see the confusion because the mandates of the two ministries were to be outlined by law and indeed this is not the first time or the only entity with such dual supervision.
  2. The approach of leaving NSSF exclusively under MoFPED is dangerous, against social security interests of workers and is being propagated by economic interests at the expense of workers. It is even unnecessary because we now have a supervisory entity, the Uganda Retirement Benefits Regulatory Authority (URBRA), and so the situation that pertained in the past leading to the transfer of the Fund doesn’t pertain now.
  1. As workers, economic interests have blocked us from having our arguments be understood by the President. Our view is that you can’t delink the ministry responsible for labour from social security. You can only bring in the ministry responsible for finance as a partner with that responsible for labour but not as the sole and main player. The economic interests seem to be misguiding the head of state to the chagrin of workers. However, we are doing our best and it is just a matter of time that the President shall know the truth and he shall be set free from the economic interests.

That’s where the battle line is between economic and social interests with the economic interests wanting to kill the child while the social protection interests seeking to save the child.

Our prayer, has always been that just as Solomon used wisdom to decipher the right mother from the fake one in the bible, God shall grant wisdom to our President to discern that workers and the ministry responsible for labour are the legitimate mothers of social protection.

A call for zeal and action by NSSF savers

Consequently, we alert the savers to follow this debate keenly and where necessary be ready to come and join us ( i.e. Members of Parliament for Workers, leaders of the National Organisation of Trade Unions (NOTU), Central Organisation of Free Trade Unions (COFTU) and all National Labour Unions, and Workers representatives to the NSSF Board) to camp at Parliament and at the NSSF offices at Workers House should these negative interests continue with their callous attempts to block or delay the process.

 

By Sandra Mukisa

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