Ugandan Shilling Hits Greatest Low in 18 Years
The shilling is the worst-performing currency against the dollar in the world so far this year, depreciating to 2,780 per dollar around 4 p.m. today. Oil importers and telecommunication companies have played a strong role in the demand for U.S. currency, Bloomberg reported.
The shilling is the weakest against the dollar that it has been since July 1993. The U.S. dollar has been strengthening significantly on the international markets as well, despite the S & P downgrade of the United States, due to international financial turmoil, particularly in the Eurozone.
In June, the shilling traded at sh2735/2750, but a Central Bank intervention strengthened it to sh2400, New Vision reported.
President Museveni spent one-third of the state budget—or 1.3 billion USD—in just the month of January 2011, shortly before the national elections. $720 million was also spent on buying six Russian fighter jets, the Council on Foreign Relations reported.
Ugandan opposition leaders vowed yesterday to begin protests over the rising cost of living, particularly fuel and food, AFP reported. Inflation last month reached 18.7 percent.
Kizza Besigye and other opposition politicians pledged to restart the walk-to-work protests at a candlelight vigil in Masaka for a toddler shot by a security officer in April. Besigye was recently cleared of all charges against him connected to the demonstrations early this year.
As opposition supporters went to lay a wreath at the home where the child was shot, the army and police fired teargas into the crowd. The Ugandan police spokeswoman Judith Nabakooba said any protest would be stopped for security reasons.
The Minister of Security, Wilson Muruli Mukasa, said that the opposition is using Twitter, Facebook, and Youtube as part of a “grand plan” to topple the government, BBC News reported. Social media was being used, he said, to “psychologically prepare the people, especially young people, for armed insurrection”.
The government has voiced concerns that Besigye will organise an Egypt-style uprising gain power through the streets after losing elections in February, according to BBC News.
Read MoreThe State of the Ugandan Shilling
New York (Ugandans Abroad) — Uganda has seen an unprecedented rise in protests triggered by the cost of living back home, and the dire condition of the shilling. Traders and others in the business community recently closed shop to protest the high fuel prices and a weak shilling, which yesterday was valued at sh2605 to one dollar, and has dropped as low as sh2700.
Despite recent Central Bank interventions, the shilling has been at some of its lowest levels against the dollar. There has been a 15.8 percent inflationary spike in Uganda, and regionally, Kenya has seen inflation at 14.5 percent. Tanzania is facing 10 percent inflation, while only Rwanda has kept inflation in single digits at 6 percent.
Regionally, consumers are hurting back home as their savings and salaries shrink in purchasing power. Bloomberg, a financial news agency, recently named the Ugandan shilling as one of the worst performing currencies in the world, as it has slid a sharp 12 percent since January.
The Kampala City Traders’ Association held a two-day strike and called on the government to fix the exchange rate at sh2000. The government said this would violate the country’s open market dynamics, and require the government to subsidize traders by about sh500 per dollar, still harming consumers.
Maria Kiwanuka, the minister of finance and economic development, told Parliament that there are only mid to long-term solutions to the structural imbalance. Much of this, she said, depends on the recovery of global export markets, as well as the rate of recovery by advanced economies to current financial crises.
Despite this, the Bank of Uganda launched a program called Inflation Targeting on July 5th, which will use a Central Bank Rate (CBR) or interest rate, to guide seven-day interbank interest rates. The rate will be set once a month and publicly announced to clearly announce the government’s stance on monetary policy during the month, according to Dr. Louis Kasekende, the deputy governor of Bank of Uganda.
The CBR will be set at a level which is consistent with moving core inflation towards the Bank of Uganda’s policy target of 5 percent over the medium term, down from its 17-year high of 16 percent in May. It is similar to the London Interbank Offered Rate(LIBOR), adopted in the mid 1980’s by the world banking system as a much needed benchmark for short term interbank loans, which are fixed every business day in the UK.
The CBR is seen as a welcome sign for an economy facing inflationary pressures, a volatile exchange rate, rising interest rates and increased friction between the private sector and the government.
Peter Muzoora is an accounting student at Baruch College and a contributing writer based in New York. He can be contacted at petermuzoora@gmail.com.
Read More
Where to Eat in Kampala
Many aspects of Kampala can be overwhelming to visitors, and the dining experience is no exception. With food from just about every continent around City Square alone, it can be hard to choose just one.
1000 Cups, located on Buganda Road, offers a quick and delicious caffeine boost of Uganda’s finest coffee. Ruarri Serpa.
All the options means that it’s easy to avoid the fall-back choices – American, Chinese, and Indian, and opt for more exotic tastes, like Greek, Turkish, Korean, or Cuban.
The prices vary as much as the styles – Antonio’s Grille, by City Square on Kampala Road, has quick meals for under USH6,000.
Upscale Fang Fang, however, will send you back to the ATM.
I arrived in Kampala with one clear goal that relieved me of all those choices – coffee. 1,000 Cups was
the place for my fix, and that gave me a place to sit and think (Plot 18, Buganda Road, if you’re in the
need).
Each visit is like a trip to America – switching between my iced mocha latte and the day’s New York Times, I noticed they were playing “ Born in the U.S.A.” over the radio.
My coffee cost USH5,000, so I chose to pass on the carrot and coconut cakes for USH3,000. Located a
little too close to the craft shops, 1,000 Cups might not be the best option for those who want to avoid
looking like a tourist, but it’s a quiet and relaxing place to work, nevertheless.
As dinnertime approached, I weighed my options. Joanna, a waitress at 1,000 Cups, recommended Chong Qing, in nearby Nakasero for dinner. “ The fish brings me there every time,” she said. “ I’m a rice and fish girl.”
You might enjoy eating pork sticks at Faze 2, an oasis of calm in bustling Kampala. Ruarri Serpa.
But if she’d been away from Uganda for months and was just returning, she would choose Faze 2 (10 Nakasero Road, Nakasero). Faze 2 captures the diverse food choices within Kampala, with a full menu of Western, Asian, and African entrees.
Plates at Faze 2 start at USH12,000, but I learned the hard way that drinks cost almost twice what they would at other places.
Beneath a canopy of trees, the largely outdoor restaurant was another quiet retreat from Kampala’s busy downtown. The dining area was less than half full by late evening, and it was mostly a local business
crowd.
I was surprised to see “ Roasted Pork Fridays” was in full swing, and two or three people could eat for USH30,000. “ The pork was good, but a little skinny,” said a man who had just finished a corporate
dinner there.
Despite how skimpy the pork sticks actually werea, it was a popular choice, especially for the mixed local/foreigner parties. Ugandan, American, and Chinese were all options on the menu, but
roasted pork won the night.
1000 Cups’ convenient location makes it an easy place to get work done. Ruarri Serpa.
The atmosphere was relaxing, but the prices of the drinks means I’d be quick to choose another bar if I was to stay and lounge. The service was quick and attentive, and I was on a boda-boda headed for the Taxi Park by sundown.
Attempting to navigate the evening Kampala traffic was a good reminder at how surprisingly easy my restaurant cruise had been – especially in a city with hundreds of choices.
Foris launches 4G internet platform
Foris telecom, a subsidiary of the Israel based Foris Group, has launched its 4G internet platform setting the stage for yet another round of competition wars.
In a press briefing in Kampala on Wednesday, Mr Moshe Mitz, the Foris telecom Uganda chief executive officer said: “We have identified price and slow internet speed as the biggest barriers for users in Uganda, therefore our launch is indeed timely.”
He said: “Our commitment is to offer value for money services to Ugandans, including the underserved.” The launch comes at a time when users themselves are still familiarising with the Third Generation (3G) internet platform launched recently by MTN and Orange telecom.
According to Mr Mitz, Foris telecom, a global wireless internet provider, offers quality and high speed internet at affordable prices. The introduction of the 4G wireless mobile WiMax broadband technology that will offer instant and high quality connectivity is the first of its kind in the local market.
Other platforms
Internet service providers in the country have been providing 2G, 3G and of recent 3G+ platforms. It is also the first internet service provider to offer pre-paid solutions in the market with scratch cards ranging from 1 upto 3 Giga Bytes.
The telecom operates under its Foris flagship brand. Mr Mitz said the solution will focus on meeting the needs of the underserved broadband market in Uganda, including residential areas and students. The packages cater for all market segments, including students and business.
Read MoreTurkish Airlines to Launch in June
Turkish Airlines, Europe’s fourth largest passenger carrier is expanding its global presence as it focuses on launching a new route to Entebbe next month.
The over 77-year old air transport carrier, will operate both passenger and cargo business from Entebbe to Istanbul, New York, Chicago and the rest of Europe.
In an interview with Daily Monitor, lsat week Mr Orhan Subay, the Uganda Turkish Airline director said the move aims to improve working relations between the two countries which will eventually spur business, education and cultural growth.
He said: “We are looking at a wider perspective where we shall both benefit. The Ugandan community will trade with Turkey because of quality products and the Turkish will tour Uganda’s beautiful sceneries and boost tourism.
The Airline will officially launch on the Uganda route in June at Entebbe international airport.
The route will fly the 8030s planes, which have a capacity of between 260 and 270 passengers and RCG cargo planes.
The launch of the Turkish airline Entebbe route will bring the number of Airlines in Uganda to over 15 including Air Uganda, British Airways, Brussels Airlines, Dairo Air Services, Eagle Air, Egypt Air, Emirates, Ethiopian Airlines, Fly 540, Kenya Airways, KLM Royal Dutch Airlines, Precision Air, Rwanda Air and South African Airways among others.
Mr Subay, however, said the low flight charges will give Turkish Airlines a competitive edge in the growing Uganda airline industry.
Launch charges that will run from June 14 to August 14, are about Shs0.55m for a return ticket from Entebbe to Istanbul inclusive of taxes and about Shs0.54m for a return ticket from Istanbul to Entebbe.