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Thousands of unsuspecting Ugandans are counting losses after losing huge sums of money to online fraudsters masquerading as international business agents trading under chargeanytime.net purportedly from Malaysia.

The victims of the dubious business were lured into investing various sums of money through the various mobile money platform with the virtual company promising earnings up to about 35 per cent in daily interest rates running for 60 days.   

The clients, who are mainly in urban centers across the country include; businessmen and women, security officers, teachers and mobile money agents among others who would invest between Shs 20,000 and Shs 20 million through mobile money platforms before customized accounts would be created for them.  

According to the victims, when the business had just started in March this year, the clients would withdraw at most 80 per cent of their accumulated proceeds and earn a commission when they attract more clients onto the platform.

Franklin Jjingo, who lost Shs 3 million to the scam says that they woke up on Monday this week when the financial withdraws had been suspended before the online platform was completely closed down on Wednesday.

“We could directly communicate with the company directors through WhatsApp and Telegram channels. These would assure us that their business was not similar to other scams we have had before. But apparently, none of these people is accessible through any channels,” he said.

Besides one of the foreign directors only identified as Bart, Ddumba explains that the company also had recruited local business coordinators who would lure and recruit clients to invest on the platform. 

“I also informed several colleagues about this business who also joined, after seeing me withdrawing the profits,” Jjingo adds.

Patrick Sseremba, another unsuspecting client, who operates an electronic shop in Masaka town, says that he invested Shs 5 million with promises that he would recoup the in the initial 10 days, and accordingly continue earning profits. He says, before the platform closed on Monday, he had only recovered Shs 640,000.

“The guidelines were that you withdraw once in a day, and money would directly come to our mobile money accounts,” he indicates.

Upon inquiring from the company's foreign director, Sseremba says that he was informed that the ministry of Finance had ordered the company to suspend withdrawals until it studies its operations. According to the message the company sent out to the victims, at least 10,000 Ugandans had registered on its platform since March 29th this year and over a billion shillings had been collected from people's financial recharges.    

“…starting the initiative, we had a mission of giving financial growth to several individuals through online investment. Our efforts will go down in history as successful as we had so far gone 50% of our goals of empowering our clients. Bur for now, we apologize for the surprise suspension of our services from the country. We were informed by the government and summoned by the ministry of Finance to appear forth on matters concerning our operations, our legal team is working hand in hand with the government of Uganda to resolve the matter,” reads part of the message sent out to the victims from an apparently blocked WhatsApp contact using a Malaysian phone code +60. 

Jim Mugunga, the senior public relations officer in the ministry of Finance, Planning and Economic Monitoring told URN on Thursday that he was ignorant about the company operations in Uganda and the alleged summons. 

“We do not have any engagements with those people at the ministry, and I can’t tell how they are operating because the company name is so novel to me,” he said. 

A police officer at Masaka central police station who preferred not to be named confessed that he also lost Shs 800,000 to that scam in anticipation that he would use it to raise school fees for his children. 

He said they are now hunting for Samir Ajiga, the local company coordinator in the area, who introduced them to the business. He has since switched off his phone lines and his whereabouts remain unknown.  

“Many people here had joined and they are now silently suffering not knowing what to do next, but when we get this man we shall task him to produce his bosses,” the officer noted.

Ugandans are not new to online scammers. The most recent happened in February this year when close to 15,000 in the greater northern region lost an estimated Shs 10 billion in dubious forex trade in three months. - URN/The Observer

 

When the alarm was raised more than three years ago in Kenya, the warning was dire.

The country’s auditor general, who inspects the financial books of state entities, said Kenya could be made to surrender control of its port in Mombasa if it defaulted on a US$3.6 billion loan from China used to build the Mombasa-Nairobi Standard Gauge Railway (SGR).

The warning came as speculation mounted that China had deliberately indebted Sri Lanka to seize its Hambantota port.

The Chinese and Kenyan governments both denied that Mombasa port was collateral for the loan but offered no explanation, leaving the exact terms of the contract shrouded in secrecy.

But a report released on Thursday by the China Africa Research Initiative (CARI) at the Johns Hopkins University School of Advanced International Studies said the auditor general was wrong to conclude that the port had been used as collateral for the railway loans.

The warning was based on a misunderstanding of the “waiver of sovereign immunity” clause, a term that can also be found in other infrastructure contracts on the continent, according to the report.

Kenya borrowed US$3.6 billion from the Export-Import Bank of China to build the railway from the coastal port city of Mombasa to the capital Nairobi. It then borrowed another US$1.5 billion from the same bank to extend the railway to Naivasha, a town in Central Rift Valley.

In a leaked letter in late 2018, the Kenyan auditor general said the Mombasa port was the Kenya Ports Authority’s most valuable asset and was at risk of being taken over by China Eximbank if Kenya defaulted on the SGR loans.

The auditor general said that if the rail’s freight operations failed to generate enough money to pay off the loans, the revenue from the port could be assigned to directly service Kenya’s debt owed to the bank. Further, the port authority was required to feed sufficient cargo into the rail to ensure its profitability and maintain minimum volumes required, the auditor general said.

However, the authors of a new report – “How Africa Borrows from China, and Why Mombasa Port is Not Collateral for Kenya’s Standard Gauge Railway” – said China Eximbank never sought to seize the port. 

“The port is not used as collateral for the loans. The Kenya Ports Authority was never a borrower, contrary to assertions by the auditor general,” said Deborah Brautigam, one of the lead authors of the paper.

Brautigam, a professor of international political ­economy at Johns Hopkins University, said the auditor general wrongly labelled the KPA, owner of the Mombasa port, as a “borrower” responsible for repaying the China Eximbank SGR loans.

The study said the port’s only role was to help the KPA to ensure that a set level of cargo would be transported between Mombasa and Nairobi. If cargo levels dropped below that level, the KPA agreed to draw on its own revenues to make up the difference. Repayment of the SGR loan would largely come from Kenya’s Railway Development Levy, a tax on all imports into the country.

“Instead of serving as collateral or security for the loans, the profitable Mombasa port was linked into the SGR project as its major customer.”

The auditor general had also raised concerns about the waiver of sovereign immunity clause in the loan contracts.

Brautigam said the auditor general misunderstood how a waiver of sovereign immunity, a standard feature of international commercial project finance, worked.

The auditor general had charged that Kenya’s government had “waived immunity” on the KPA’s assets and “expressly guaranteed” that they could be used to repay the Chinese loan, the CARI study said.

But the sovereign immunity waiver was a necessary dispute resolution feature of all international sovereign commercial lending, including sovereign bond contracts, allowing contract disputes to be resolved in an international venue, it said. It did not imply that a borrower had offered its territory, airport, or other assets as collateral, Brautigam said.

The authors said the much-cited Sri Lankan port case was, for example, far from being an asset seizure.

Hambantota port was built by China Harbour Engineering Company, through financing of US$307 million in the first phase of the project and another US$141 million both from the China Eximbank.

But in 2017, Sri Lanka fell behind in servicing its debts due to a financial crunch, forcing the South Asian country to privatise 70 per cent of the port to a Chinese company.

Sri Lanka leased the underperforming port to China Merchants Port Holdings. This made the Chinese company the majority shareholder in a 99-year lease that helped Colombo raise US$1.12 billion, which was used to strengthen the country’s foreign exchange reserves.

The report said Hambantota port had struggled under Sri Lankan management and was losing money, leasing the port to a foreign joint venture was in line with the original plans for the facility, plans devised by Canadian and Danish consulting firms.

“Yet the myth remains persistent. It forms the basis for concerns about Chinese intentions regarding ports and other strategic assets around the world,” the report said.

However, the researchers admitted that transparency was a significant failure in the Mombasa port case, with blame on both the Chinese lender and the Kenyan borrower side. The contracts have not been made public.

The Mombasa case is not isolated. From Nigeria to Zambia, and from Uganda to Sri Lanka, reports have in the recent past spread that governments had pledged strategic assets like land or ports in exchange for Chinese finance that can be “seized” on default.

CARI said these rumours continue to swirl around other large Belt and Road Initiative projects in Zambia (Kenneth Kaunda International Airport and Zambia National Broadcasting Corporation), Uganda (Entebbe International Airport), and Montenegro (Bar Boljare Highway).

In Uganda, a US$200 million loan contract between China Eximbank and the government of Uganda to upgrade and expand the Entebbe International Airport had become a source of international controversy, prompting speculation about whether China was engaging in “debt-trap diplomacy”.

A February study by AidData, a research lab at the College of William and Mary in Virginia, said in its analysis that the terms and conditions in the Uganda contract did not support the allegation that China engaged in predatory lending.

“The contract reveals that Entebbe airport itself – a physical, illiquid asset – is not a source of collateral that the lender can seize in the event of default. Instead, China Eximbank required its borrower, the government of Uganda, to provide a fully liquid source of collateral: a cash deposit in an escrow account that the lender can unilaterally seize in the event the borrower defaults on its repayment obligations,” AidData said.

The Chinese embassy in Uganda also rejected reports that Beijing could or would take over the airport in event of default. “Not a single project in Africa has ever been confiscated by China because of failing to pay Chinese loans.” - Jevans Nyabiage, South China Morning Post

 

In Burundi, coffee accounts for nearly 40% of export resources, and supports 8 million people. However, the sector has experienced a steady decline and is less and less attractive to Burundians be them novices or experienced coffee producers.

If Burundi cannot compete on the same level as big African coffee producers like Kenya or Ethiopia, the country still secured a place among the Top 40 coffee producing countries in the world.

After the failure of the liberalization of the sector, the government took the decision in 2020 to re-engage in this sector. However it is still struggling to get back on track given the results of the 2021-2022 campaign. Production figures remain low, dropping from 34,000 to 6,000 tonnes for the 2021-2022 growing season.

In the field, several orchards are abandoned to their fate and coffee farmers choose more profitable food crops. A move, Mélance Hakizimana, a coffee farmer himself understands: "There are too many commission agents in the coffee sector. We coffee farmers would like to be in direct contact with coffee buyers. I know that there are many buyers on standby. I am in associations that want the money to reach the coffee farmers."

Several factors would be at the origin of this decline in activity, according to economist Adelard Akintore: "Is it the pricing that no longer interests the farmer to such an extent that they decide not to dedicate more means and time to coffee? Is it the aging of coffee orchards? Because they are growing old indeed but if the farmer found more profitability in this sector, why wouldn't he be commit to reviving his plantations.

It was during the 1993 crisis that coffee production began to fall. Years later the production of green coffee barely reaches 10, 000 tons. - Francine Sinarinzi, Africanews

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