And Museveni is standing up as the tinpot dictator that he has always been and whom the mzungu all so love to use and dump.

Me thinks,Kagame and Kikwete are also rising up to take up his position while kenya leaders continue their cliff top death dance.

Kweli asante ya Punda ni mateke,does Museveni know that the biggest source of FDI in UG is Kenya.

Rwandans are also currently benefitting from our FDI's.


I guess if you can't win with facts,you can always pen bile-laced,xenophobic rants to distract everyone.

@Kaigangio

Such a move cannot work unless you have a favourable balance of payments.

The effect to the Ugandans will be to pay more for imports like petroleum and fuel products,steel,plastics this will lead to inflation that will also increase the prices of locally manufactured goods.


I guess if you can't win with facts,you can always pen bile-laced,xenophobic rants to distract everyone.

@Kaigangio

Why would he want to do that?...

Also,it wouldn't work...

any devaluation of the UG currency arising from this crisis would be across the board i.e. against all other currencies...

In effect,regardless of the 'sources' m7 selects over Kenya,UG ends up paying more...

Further,he is unlikely to find a cheaper alternative for as a source than Kenya is (Mombasa is the nearest sea port for UG)...

You’re right about exporters gaining more but UG is a net importer just like Kenya is and will always be hurt by a weak currency..

@ mozenrat,

If i read correctly and i again i stand to be corrected,some of the basic pros and cons of devaluation are:

Pros

The locally manufactured goods and services become cheaper and more competitive to external (foreign) buyers. This has an effect of boosting the demand for domestic products in the international scene.
The increased level of exports should lead to an improvement in the current account deficit.
The increased exports and aggregate demand normally leads to higher rates of economic growth.

Cons:



Devaluation causes inflation because the importation of goods and services become more expensive. It also happens that the firms / exporters have less incentive to cut costs because they can rely on the devaluation to improve competitiveness.


It reduces the purchasing power of citizens abroad. For example it becomes more expensive for people to holiday or carry out business trips etc outside the country.


A large and rapid devaluation may scare off international investors. It makes investors less willing to hold government debt because it is effectively reducing the value of their holdings.


Consider Uganda's case on the above. Ugandas exports is mainly Agriculture based and some considerable tourism....and now oil is about to be exported. The way i see it it might be more advantageous for uganda for the weak currency



I believe M7s actions and the don't care attitude that he is potraying now clearly indicates that he could have done his homework well and probably has realised something that Nairobi should be well afraid of.....


NEVER TALK OF A RHINO IF THERE IS NO TREE NEAREBY - ZULU PROVERB

how much is uganda likely to make from oil,
if museveni uses petro dollars like saddam to create a large military force kenya should brace for more trouble
we should quickly sort our political mess and put this country on accerated economic growth to make sure we are always stronger then our nieghbours