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 firstname.lastname@example.org.Read More
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.
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 More
Whether you read this article in the beginning of the year or later in 2010 a great question to ask yourself is “What are my financial goals this year”?
There are so many products and strategies out there from annuities and life insurance to mutual funds and fee based planning. One could argue that one investment option is better than the next one but any solid financial advisor will quickly tell you that it depends on the situation. We are coached by our compliance departments to learn about our clients’ risk tolerance and time horizon before making investment advice. However, one of the main reasons I win clients is because of my ability to help my clients indentify and set their financial goals. This is based on the responses I get from my clients who interviewed other advisors before they chose to do business with me.
Stephen Covey says in The Seven Habits of Highly Effective People to “Begin with the end in mind”. I use this strategy in my financial planning practice. Together with my client, we drill down to paint the picture of how they want their retirement to look. Once they begin to feel excited about some of the things they will enjoy during retirement they can prepare to stay disciplined along the way. When you walk past the refrigerator on your way out the door to work and see those pictures of what your retirement future holds it is easier to work harder with greater hope and conviction that you will succeed.
I love working with clients who have a passion for where they are headed. People with a dream and a goal are easier to advise and respond with more enthusiasm to appointments and phone calls.
I encourage you to sit and think about what kind of retirement you want. Talk to your spouse and set realistic goals. Goals should be out of reach but not out of sight. Don’t be afraid to stretch yourself. We tell our kids that they can have and be anything they want in life. In most cases, this is still true of each of us as adults.Read More