@KakandeAlex There's a huge lobby against oil and gas projects in general and EACOP in particular. The lobby even got the EU Parliament to call for a suspension of the project to address "human rights and environmental issues".
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Simon Muliisa
732 posts
If EACOP was so commercially viable, why have we struggled to get its funding?
Simon Muliisa@SimonMuliisa
@NkugwaMukasa @KakandeAlex For instance, NSSF could look into investing in EACOP, seeing as it's a commercial project expected to make a profit. If it's commercially viable, the Fund may invest in your refinery (or Dangote's). The goal is to look for business opportunities that may have development angle.
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@NkugwaMukasa @KakandeAlex "then you open it up to non viable/political/non performing projects."
But my argument is that the Fund should only invest in *viable* commercial projects. Why are you bringing in non-viable projects as if anyone has argued for them?!
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@SimonMuliisa @KakandeAlex Your argument is whether NSSF can properly invest in viable projects(correct if am wrong). My argument is if you don't restrict(bonds, equity, real estate/housing) through the law, then you open it up to non viable/political/non performing projects.
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And it should continue lending in the current model. Let the Government take on the commercial risk of these projects.
Simon Muliisa@SimonMuliisa
@mwonga_patrick @KakandeAlex The busiest corridor we could toll (Kampala-Jinja) is not profitable. This is why KJE needed massive donor funds (over $400m in concessional loans and grants from AfDB, AFD and EU) and still this wasn't enough. NSSF should only come in for *commercially* viable projects.
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@NkugwaMukasa @KakandeAlex For instance, NSSF could look into investing in EACOP, seeing as it's a commercial project expected to make a profit. If it's commercially viable, the Fund may invest in your refinery (or Dangote's). The goal is to look for business opportunities that may have development angle.
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@NkugwaMukasa @KakandeAlex But NSSF has invested in things like UMEME, MTN, real estate, etc. All these are commercial ventures *of varying success* whose viability was estimated by the Fund's managers prior to deploying your savings. This is the same thinking to apply going forward.
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@LugedhaM @mwonga_patrick @KakandeAlex Not enough *effective* demand. Basically, there aren't enough motorists that can pay a sufficiently high toll to cover the CAPEX and OPEX of the KJE and leave the developer with a reasonable profit. This "viability gap" is what donors sought to cover, albeit unsuccessfully.
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@SimonMuliisa @mwonga_patrick @KakandeAlex Please elaborate.
What makes the KJE not profitable with the already existing volume of traffic?
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The Real Danger Behind Calls for NSSF to Fund Uganda's Infrastructure.
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@KakandeAlex Of course, no one wants NSSF to invest in the likes of Atiak Sugar. Look into Kenya's proposed National Infrastructure Fund for ideas on how we could rope the likes of NSSF into development projects, including the governance safeguards.
See here: youtube.com/live/eLx5S8v7B…
YouTube
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@KakandeAlex Commercial viability is, by definition, a vote of confidence in the profitability of the project. Pension funds world over invest in commercially viable projects that have steady streams of +ve cashflow, and utilities are the quintessential investment that meet this criterion.
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Commercial viability doesn't mean profitability.
NSSF is in business of protecting Saver's money but also grow it and give them a profit.
If a project will take 30+ years for it to be profitable, why would you want savers money in such a project?
Atiak Sugar projects
Simon Muliisa@SimonMuliisa
@KakandeAlex Government can structure development projects that have a commercial angle and NSSF can invest in these e.g. UMEME for power distribution. NSSF can even get into power generation with other Independent Power Producers (IPPs). The key criterion should be commercial viability.
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@mwonga_patrick @KakandeAlex The busiest corridor we could toll (Kampala-Jinja) is not profitable. This is why KJE needed massive donor funds (over $400m in concessional loans and grants from AfDB, AFD and EU) and still this wasn't enough.
NSSF should only come in for *commercially* viable projects.
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@KakandeAlex NSSF should only fund toll roads. Like Jinja - Kla. Not all infrastructure per se
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@joelanthony23 Third, there's very little investment in African mining projects because the countries are unstable, have high energy costs and underdeveloped transport infrastructure. In fact, most of the investment in Africa's mines is from China, not the West, so you have the wrong villain.
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@joelanthony23 Secondly, minerals are not wealth. The total value of the minerals in your phone is about $1 vs the phone's sale price at $1k. Real wealth is human capital, of which Africa has very, very little.
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The two are connected.
The Western world sits a top a system of value extraction we see as normal. It requires a conflict ridden, commodities focused part of the world that their corporations can take advantage of.
A functional African continent would bring them down to earth
Alan Kasujja@kasujja
Combined wealth is about 3.3T Africa’s GDP according to 2025 IMF numbers is 2.8T. Elon Musk alone, therefore, holds around 25% of the GDP of a continent of 54 countries and 1.4B people. Just some quick useless Sunday information.
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@AusbelMumbere I don't want my retirement savings going *directly* to rail projects! A project like SGR is not only economically unviable, but it is also (obviously) financially unviable. Let government borrow from NSSF in the usual way and put this money in rail... or in Pinetti's bi things.
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Christ, would have thought in something good like rail, forgetting that vultures would also wanna tap on that.
DBwambale@TheMutaD
Getting NSSF cash to invest in Atiak or DEI is diabolical
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How can a Gov't that can enforce a trade order policy across the country in a matter of weeks, fail to enforce proper physical, zoning and transportation planning even in it's own capital? Is the incompetence wilful? Is the failure the policy? Are the limitations intentional?
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@Samwyri Two things:
1. Bonds are lucrative.
2. If you want to make an enemy of a Ugandan, just lend them money.
Point 1 rakes in easy profits. Points 1 and 2 combine to explain the high interest rates.
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Uganda’s banking business model is usury. Can’t find a better description.
The Independent@UGIndependent
Housing Finance Bank’s net profit up 20% to Shs 85.4 billion independent.co.ug/housing-financ…
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@PathyKlinn @BOU_Official @mofpedU @CmaUganda For instance, NSSF could've had a stake in EACOP and/or the refinery, just like they did in UMEME.
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@PathyKlinn @BOU_Official @mofpedU @CmaUganda Infrastructure bonds are just like regular bonds, no value added.
We need to be more creative and appropriately structure development projects that have a commercial angle to allow pension funds and other private sector actors to jump in. Think SPVs, securitisation, etc.
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If we ever needed a cue for those Infrastructure Bond Regulations, this is the endorsement. @BOU_Official @mofpedU @CmaUganda
UBC UGANDA@ubctvuganda
Museveni: NSSF in Uganda has a lot of money, but they just invest in treasury bills, where the government borrows and eats the money.
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@PathyKlinn @joelanthony23 Indeed. The goal is to move people, not cars!
There are about 12 occupants for every 10 personal cars, driver included. The personal car, therefore, moves 76% empty. Planning your transport network around such an inefficient means of transport is utterly misguided.
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May we never invest this much in roads and interchanges at the expense of light rail and/or metro system.
DBwambale@TheMutaD
@PathyKlinn My favorite of theirs is the Poukase interchange in Accra.
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@PathyKlinn @mofpedU Even if we got expensive contractor-financed debt, it'd still be better because you'd have shovel to the ground as soon as the ink dries. Now, we're at least another 18 months away from concrete financing.
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@PathyKlinn @mofpedU Contractor financing isn't always expensive, especially if the contractor arranges for sovereign debt from an EXIM bank/treasury and not project debt (on the SPV) à la KJE. The debt organised by Xcalibur for the Karamoja Airborne Geophysical Mapping project is a good example.
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How many times are we appointing a Mandated Lead Arranger for this thing? @mofpedU
Reuters Africa@ReutersAfrica
Uganda said on Thursday it had appointed Citibank to mobilise financing needed to fund the country's planned 2.7 billion euro ($3.19 billion) Standard Gauge Railway (SGR) project. reuters.com/world/africa/u…
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