Five banks fund Roofings’ new Namanve plant
Business
Written by Sulaiman Kakaire
Wednesday, 29 December 2010 18:47
Roofings Rolling Mills Ltd has secured a syndicated loan of $64m (about Shs 147.2bn) from five finance institutions led by Stanbic Bank, to expand its new steel rolling plant located in Kampala Industrial and Business Park, Namanve.

The other funders are the East African Development Bank, Ecobank, Bank of Africa and PTA Bank. The lead financier will loan Roofings Shs 112bn for setting up a galvanizing steel plant, hot rolling mill and cold rolling mill.

Speaking at the signing of the agreement at Sheraton Kampala Hotel recently, Sikander Lalani, the Chairman/Managing Director, Roofings said the company needed money to invest in a project that will stimulate development in the country.

“We take this opportunity to thank the banks for appreciating this developmental project that was once a dream for Roofings Rolling Mills Limited,” said Lalani.

According to the agreement, the loan is guaranteed by parent company, Roofings Group. Speaking on behalf of the lending institutions, Philip Odera, the Managing Director of Stanbic Bank Ltd, said the banks accepted to lend the money because they had confidence and trust in Roofings.

“The appetite comes from the confidence we had. So, if there is any investment opportunity presented to us, we come in to help as financial institutions so long as the borrower presents the proposal very well,” Odera said.

Dr Maggie Kigozi, the Executive Director of Uganda Investment Authority and Aston Kajara, the minister of State in charge of Investments attended the ceremony.

Kajara applauded the transaction. “The investment reflects the robustness of our investment sector, which will offer an opportunity for infrastructure development,” he said.

He said the project will manufacture some of the pipes to be used in the exploitation of oil in western Uganda.

Multi-million dollar projects to watch in 2011
Business
Written by Jeff Mbanga
Wednesday, 29 December 2010 18:51
Investors may adopt a wait-and-see approach when choosing to invest in Uganda during the first quarter of 2011 due to the unpredictable outcome of next year’s general elections.

But should business return to normal in the second half of the year, they will receive a large share of Foreign Direct Investments (FDI) expected to flow into East Africa.

The World Bank’s Multilateral Investment Guarantee Agency (MIGA) notes that foreign direct investment into emerging economies such as East Africa, is up 17% this year and is expected to add a further 20% next year, plus another 13% in 2012. Jeff Mbaga looks at the big projects that will make significant impact on the economy in 2011

Bujagali's 50MW

Uganda’s measly electricity generation of 300MW will get a boost when the initial 50MW from the Bujagali Hydropower Project comes on line later in 2011. The project, worth $860m, is expected to produce 250MW of power when it is finally completed in 2012.

By October 2010, almost 60% of the construction work had been completed. The engineering and procurement for the project was almost complete.

The project is being sponsored by Industrial Promotion Services (Kenya) Limited of the Aga Khan Group, and SG Bujagali Holdings Ltd, an affiliate of Sithe Global Power, LLC (USA). The Uganda government and a number of donors have already committed funds towards the project

Karuma power dam

The 600MW Karuma power project is expected to be the most expensive venture undertaken by government and private investors in 2011. Estimated to cost more than $1.3bn, the project, when complete, will be the biggest single provider of electricity on the Ugandan grid.

The project has faced a number of setbacks, the most significant being Norwegian investors pulling out of building the dam. However, government says the studies for the plant are near completion and the project has attracted high foreign interest.

Uganda will fall back to the energy fund as a source of cash for the project. With foreign investors searching for new investment options in Africa, the Karuma power dam should rank high on the list.

Oil production

Getting Uganda to produce its first barrel of oil and follow in the footsteps of Ghana will possibly be one of the highlights of 2011.

With the oil industry virtually at a standstill as Uganda fights to recover $404m in capital gains tax from Tullow Oil’s acquisition of Heritage Oil’s assets, letting this impasse stretch right into the second quarter of 2011 will have negative repercussions for all sides.

That’s why a resolution to this dispute, which has seen government reclaim the licence to the Kingfisher oil well, is something that all parties will work to achieve in the first quarter of 2011.

A breakthrough would pave the way for the entry of China’s CNOOC and Frances’s Total SA, both of which have already signed agreements with Tullow to each take up 33% of the exploration rights in the Lake Albert region.

Discussions on building a refinery, capable of refining at least 150,000 barrels of oil per day, are also to be finalized in 2011.

Police $500m houses

The Police force will get its first major facelift when government engages private investors to construct housing units at an estimated cost of $500m.

The country is yet to have a formal Public Private Partnership law in place but that has not stopped potential investors from bidding for the project. The transaction advisors and the legal team for the project have already been identified.

The Privatisation Unit, the government body spearheading this project, is yet to formally announce the investors that won the bid to manage the project. A bidding conference has already been held.
The units will house more than 7,000 police officers.

The investor will manage the project for 30 years before handing the project back to government. The project is expected to take off in the latter half of 2011.

Kilembe mines Ltd

Out of business for more than three decades, efforts to get Kilembe Mines Limited back in mining business are to be renewed in 2011. Transaction advisors have almost completed the paperwork on the viability of mining copper at Kilembe that investors will need to base their decisions to invest.

The Privatisation Unit, the body in charge of Kilembe Mines Limited’s divesture, says that more than 40 companies had expressed interest in the Kasese-based company.

The growing interest in the run-down facility is partly being driven by rising copper prices on the world market, analysts say. A ton of copper is expected to hit the $10,000 mark within the next two years. There are an estimated four million tons of copper ore in Kilembe.

Kenya -Uganda railway

For private equity firms, time is everything. That is why when Citadel Capital, one of the largest private equity firms in Africa, acquired a controlling stake in the Rift Valleys Railways consortium early this year, it was the strongest sign that serious work on the Kenya – Uganda railway line was set to start after more than four years of uncertainty.

Companies such as Citadel Capital work under tight deadlines simply because they usually use borrowed money to pull off projects. With the loans earning an interest on a daily basis, it is imperative that Citadel Capital gets the Kenya-Uganda railway line operational as soon as possible.

The company has been completing the paperwork needed to start work for much of 2010. It is expected that in 2011, the real work starts on the railway line.

Oil pipeline

For three years, Tamoil, the Libyan company that won the tender to build an oil pipeline from the western Kenya town of Eldoret to Kampala, has failed to kick off the project because the land on which the pipeline is to be built has not been secured.

Tamoil, which has a 75% stake in the project, has changed the original design of the project from a single carriage to a dual carriage. Both Uganda and Kenya have approved the change in design.

However, Uganda’s failure to compensate the land owners where the pipeline will pass has delayed the project. This delay has pushed up the overall project cost. The cost of the pipeline is now over $300 million, up from its initial price of $78 million, although the price increase also takes into account the change in the design to a dual carriage.

With Uganda’s oil industry expected to get a new direction in 2011, pressure will be on both Uganda and Kenya to sign whatever remaining paperwork is needed to launch the construction of the pipeline.

Shimoni investor

Uganda will certainly have new shopping malls coming up in 2011, but the construction of a multi-million complex by Kingdom Holdings Kampala on the land previously occupied by Shimoni demonstration school and teachers’ college will be eye catching.

Plans to construct a five-star hotel on this prime land sparked off public uproar after government hastily demolished the education institutions to allow construction to start in 2007. But the project hit a dead end after the investor; Prince Alwaleed Bin Talal’s investments were severely hit by the global financial crisis.

The project now has another investor, the Azure brothers. Currently, an underground parking space is being built, together with the business centre. Thereafter, a shopping mall and a hotel will be built to complete the project.

Shs 32bn beer plant

Nile Breweries is set to complete its new malt plant early next year, according to the company’s Corporate Affairs Director, Onapito Ekomoloit.

The project is currently in the advanced stages. The plant, worth about Shs 32bn, will widen the market for the 9,000 farmers who currently supply barley and sorghum to the company. The new plant is expected to lead to a slight increase in the number of people employed by the Njeru-based brewery.

USE to increase trading days next year
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By Walter Wafula (email the author)
Posted Friday, December 31 2010 at 00:00
Kampala

Starting January 2011, the Uganda Stock Exchange will open for business five days in a week, in line with other major regional markets Daily Monitor has learnt.

Currently the trading floor opens only on Monday, Tuesday and Thursday, between 10am and 12pm. This makes it impossible for investors to either buy or sell their shares on Wednesday and Friday.

Mr Joseph Kitamirike the chief executive officer, Uganda Securities Exchange said; “We are going to expand to five days and then to two sessions per day.”

Increased demand
He attributed the development to increased demand for shares at the exchange, regional integration and the desire to ease trading for investors. “It’s just to give an opportunity for people to trade. People sometimes make their decisions on Tuesday but they have to wait until Thursday to trade,” he told Daily Monitor in an interview on Wednesday.

The expansion in trading periods is also meant to upgrade the USE to the level of the Nairobi Stock Exchange and the Dar es Salaam Stock Exchange which has been busier compared to Uganda’s market. “We cannot keep our market closed on days when we can be trading across the border. If your market is closed and the others are open then investors who come through your market don’t have access to others,” he said.

Streamlining markets
The four stock markets including the Rwanda Over the Counter Trade are operating in the East African Community (EAC) Common Market and are set to have similar regulations and operational procedures as they integrate.

The Common Market came into effect on July 1, 2010, giving way for the free movement of capital, labour, goods and services.
Although this has largely remained a theory for most businesses, the USE and ROTC have witnessed cross listings of shares of companies like the Nation Media Group, and Kenya Commercial Bank which are listed on the NSE.

Through the collaboration and integration of the four markets, Mr Kitamirike said the USE is trying to enable local investors to trade across the border.

With time, the expansion of trading days and sessions is expected to result into higher trading volumes and turnover. “If investors like the market and have the securities, then the volumes will go up but right now we want to provide the opportunity.”

To further ease domestic and cross border trading of listed company shares, the USE will next year automate trading at the stock market. This will enable investors to place their orders at the exchange.

Government spending increases by Shs494 billion
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By Martin Luther Oketch (email the author)
Posted Friday, December 31 2010 at 00:00
Kampala

Government expenditure for the month of November went up by Shs494 billion suggesting that cost outlay for both development and recurrent budgets is on track.

Bank of Uganda said during the release of the November state of the economy report that government expenditure stood at Shs791 billion, which was significantly higher than Shs397 billion realised in October 2010.

The expenditure was also slightly higher than what was projected at the beginning of the month. Throughout this fiscal year, Uganda’s fiscal policy is expected to be expansionary, because of government’s decision to clear pension arrears of Shs112 billion and meeting all other expenditures which fall under the recurrent budget.

The central bank said November’s net fiscal injections by government operations amounted to Shs444 billion. Tax remittance on the other hand amounted to Shs347 billion, which was higher than the Shs332 billion realised in October 2010.

Past expenditures stood at Shs466 billion in November 2009 and Shs456 billion in September 2010.

China pledges more support for Uganda’s oil and infrastructure
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By Isaac Khisa & Agencies (email the author)
Posted Friday, December 31 2010 at 00:00
Kampala

China will continue to assist Uganda in the development of its infrastructure and oil industry, Mr Sun Heping, the Chinese ambassador to Uganda has said.
"The Chinese government has attached great importance to the development of infrastructure in Africa, Uganda in particular, and made it one of the key areas of cooperation in the framework of the China-Africa Cooperation Forum," Mr Sun told a Chinese news agency recently.

He said the cooperation has provided a platform for China and African countries to have dialogues and implement several projects covering infrastructure, education and health funded by grants and preferential loans.

In close touch
He said the Chinese and Ugandan governments have been in close touch on the proposed Kampala-Entebbe highway project, the first in the country, which is expected to cost about $350 million. "The project is currently in preparations stage and will get underway in 2011 if everything keeps at the current pace," he said.

The highway funded by preferential loan from China is to provide an alternative route linking the country's capital and its international airport at Entebbe, 40 kilometres south of Kampala.

China is also committed to working with Uganda in its nascent oil industry as China National Offshore Oil Corp (CNOOC) is seeking to partner with Total and Tullow to build an oil refinery in the western part of the country.

President Museveni, is known to be in favour of building the country's own oil industry with a complete chain of finished oil products. "China aims to assist Uganda build its own oil industry through participation in the production of oil products and assisting the country to attain its Millennium Development Goals before 2015 the Unites Nations’ target years,” said Mr Heping.

Uganda hit oil in the western part of the country in the Albertine Graben region in 2006. So far, Tullow, has discovered about one billion barrels of crude oil in the area. Tullow estimates that Uganda has a further potential of 2 billion barrels more in the Albertine basin which also borders the Democratic Republic of Congo.

Government gets sh375b for roads
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By Conan Businge
and Abou Kisige

THE Government has received a grant of 122m euros (about sh375b), from the European Union for the construction of the Mbarara-Katuna road. The road is part of the northern corridor project.

The agreement was signed by Uganda’s finance minister, Syda Bumba, and the European Union ambassador to Uganda, Vincent De Visscher.

Reynolds Construction Company, the firm which will handle the construction, also signed the contract yesterday.

The Mbarara-Katuna road is one of Uganda’s main routes. It is approximately 165km long, linking the central region to the south-west of the country.

Mbarara-Katuna is the south-western section of the northern corridor, which links the economies of East Africa and the Great Lakes region with the Indian Ocean.

The sh375b grant is close to half of what Uganda will need for the construction of over 10,000km of district roads beginning next year, at a cost of sh800b.

The construction of the 10,000km will take three years.

Dan Alinange, the public relations officer of Uganda National Roads Authority, said the work would involve rehabilitating and upgrading 60 other roads.

When asked about the r source of funding for the other roads apart from the European Union’s grant, Bumba said the Government would get enough money, especially when it partnered with the private sector. She thanked the European Union for the continued support to Uganda.

Overtime, the EU assistance to Uganda has continued to grow from 210m euros in 2001 to 450m euros for the 2008-2013 period.

Vincent De Visscher asked the Government to ensure that funds were well utilised and roads protected from damage after construction..

Alinange said the roads to be constructed included Mbarara-Kikagati (75km), Nyakahita-Ibanda-Kamwenge-Fortportal (208km), Gulu-Atiak-Bibia-Nimulle (104km), and Mpigi-Kabulasoke-Maddu-Sembabule (135km).

Others are Vurra-Arua-Koboko-Oraba (92km), Maraba/Busia-Bugiri (82km), Mbarara-Kabale-Katuna (154km), Mukono-Kayunga/Nkoloto-Njeru (94km), Jinja-Kamuli (69km), Mukono-Katosi/Kisoga-Nyenga (72km), Moroto-Nakapiripirit (90km), Ntungamo-Kakitumba/Mirama hills (37km) and Ishaka-Kagamba (72km).

Kapchorwa-Suam (77km), Rukungiri-Kihihi-Ishasha (104 km), Kaiso-Tonya-Hoima (85km) and Soroti-Mbale-Tororo (140km) will also benefit from the three-year Government and donor project.

Alinange said UNRA was in the process of assessing the impact on the property and compensation for the owners

1,500km of roads tarmacked in past five years
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The Kampala Northern By-Pass was one of the major projects
By Joel Ogwang

THE Government has tarmacked a total of 1,500km of roads across the country over the past five years, said Eng. John Nasasira, the works and transport minister.

They included the Kampala Northern By-Pass, Jinja-Bugiri and the Soroti-Dokolo roads.

A further 1,000km are currently under construction or rehabilitation, including the 42km Kampala-Gayaza-Zirobwe road, the Matugga-Semuto-Kapeeka, Kampala-Masaka-Mbarara, Kawempe-Kafu and the 57km Kampala-Mityana roads.

“The procurement process for most of the roads is in advanced stages, while some contracts have been awarded,” he said in a statement read by Eng. Peter Ssebanakitta, the roads agency boss, at the ground-breaking ceremony of the construction of a new River Kafu Bridge recently.

THE Uganda Census of Agriculture report, which has just been released shows that the production of most main food crops, with the exception of bananas and maize, is on the increase. The census further shows that the eastern region is leading in production of the main food crops - maize, rice, finger millet, cow peas, sweet potatoes and cassava.

In spite of the increased food production, the hoe remained the most used tool in agricultural production. Only 31.1% of the people interviewed reported using improved seeds and only 0.9% of farmers had access to irrigation services, according to the census.

Furthermore, an estimated two million households experience food shortage, particularly during the months of May, June and July.

The census raises serious issues that the country's policy makers and government leaders need to urgently address. It is obvious that the increase in food production is not necessarily due to agricultural modernisation. The fact that the hoe remains the most used tool in agricultural production implies that agricultural mechanisation is still a pipe dream.

Uganda has enormous potential in food production. But it must systematically work to modernise agriculture in order to cope with the rapid population growth and emerging regional markets. Agricultural modernisation is also necessary for environmental protection. Currently, it appears that increased food crop production has been achieved at a very high environmental cost. Forests and wetlands are being opened up as farm lands.

The marketing of agricultural produce also remains a big problem and disincentive to farmers. Often, farmers make huge losses whenever there is a bumper harvest, which discourages increased investment in agriculture. The Government is encouraging investment in agro-industries. However, the government may also have to consider reviving the produce marketing boards to streamline marketing of produce.

Uganda Business News: Uganda Market Vendors Association gets a new brand name

By Issa Asuman

The Uganda Market Vendors Association has today changed name to Uganda Market Union.
At the Annual General Meeting that was held in Kampala today the Association’s Chairman who is also the Presidential Advisor on markets Godfrey Kayongo was reinstated as the Chairman of the rebranded Association.

In his speech Kayongo thanked government for the construction of markets and handing them over to the traders who pay for market stalls in instalments.

Kayongo added that they have plans to have all markets in Uganda constructed to reasonable standards

Oil to create 120,000 jobs
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President Museveni
By Vision Reporter

PRESIDENT Yoweri Museveni has said 120,000 jobs will be created in the oil and gas industry as a result of the oil discovered in Western Uganda.

In his New Year message to the nation, Museveni said the oil and gas policy will be passed and capacity building programmes rolled out with a view of producing the required manpower for the sector.

The President said this would be achieved through the expansion of the Uganda Petroleum Institute at Kigumba to produce artisan and technical personnel for the industry.

Graduates in the petroleum sciences and relevant disciplines, he noted, wiould also be produced in courses which have begun at Makerere University and other private universities in the country.

“These trained Ugandans will take up the over 20,000 jobs directly generated by the oil industry, together with the additional 100,000 jobs generated as a result of the multiplier effect,” he disclosed.

The NRM Government, Museveni remarked, would ensure that benefits arising out of oil production benefit all stakeholders in the country.

Museveni said there was sustained high economic growth and transformation, with increasingly more jobs being created in the service and industry sectors.

The president observed that the sustained high growth of the economy had translated into the significant decline in poverty across the country.

Commenting on the on-going campaigns, Museveni asked the Electoral Commission to disqualify, candidates who tell lies while canvassing for votes.

He, however, noted that campaigns ahead of the general elections scheduled for February 18, are so far going on smoothly.

The presidential campaigns kicked off on November 1, while the parliamentary campaigns were flagged off on December 16.

“Campaigns have been smooth, the lies told by opposition candidates notwithstanding. These lies include claims that Museveni has sold Lake Kyoga to foreigners, wants to steal land from the Iteso, Langi, Acholi and has introduced a vaccine that deforms children,” Museveni said.

“I request the Police to be active in monitoring this criminality on the part of these political actors. It is illegal to tell lies in elections. It will lead to your disqualification and prosecution,” Museveni warned.

Museveni also commented on the Traditional Leaders’ Bill that is now before Parliament, saying many lies have been told about it.

“The criminal liars and opportunists say the Bill intends to dethrone some traditional leaders, to stop citizens from prostrating before kings. All these are false and criminal.”

The President said the Bill was intended to protect politics from opportunists who try to involve kings in political competition and arguments, to protect the kings from the dangers that would arise out of meddling in politics and provide benefits to traditional leaders.

Sh800b set aside for roads
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By C. Businge and A. Kisige

OVER 10,000 Kilometers of district roads are to be constructed this year, at a cost of sh800b, according to Uganda National Roads Authority (UNRA).

The construction scheduled to take three years, will have 60 roads rehabilitated and upgraded, according to UNRA’s publicist Dan Alinange.
The roads to be constructed according to Alinange include Mbarara-Kikagati (75km), Nyakahita-Ibanda-Kamwenge-Fortportal (208km), Gulu-Atiak-Bibia-Nimulle (104km), and Mpigi-Kabulasoke-Maddu-Sembabule (135km).
Others are Vurra-Arua-Koboko-Oraba (92km), Malaba-Busia-Bugiri (82km), Mbarara-Kabale-Katuna (154km), Mukono-Kayunga-Nkokonjeru (94km), and Jinja-Kamuli (69km).

Alinange who made the remarks during a recent upcountry national road tour said other roads to be constructed include Kisoga-Nyenga (72km), Moroto-Nakapiripirit (90km), Ntungamo-Kakitumba (37km), and Ishaka-Kagamba (72km).
Kapchorwa-Suam (77km), Rukungiri-Kihihi-Ishasha (104 km), Kaiso-Tonya-Hoima (85km) and Soroti-Mbale-Tororo (140km) will also benefit from the three year project.
The tour in various parts of the country revealed that construction had already started on some roads including Kampala-Masaka, Kawempe-Kafu-Soroti-Lira, Kabale-Kisoro, Kampala-Gayaza-Zirobwe, Matugga-Semuto-Kapeeka, Masaka-Mbarara, Kampala-Mityana, Fortportal-Bundibugyo and Kampala-Jinja.

The road construction project follows the Government’s take over of district roads in 2009. It handed them over to UNRA as part of the road sector reform. This followed a public outcry over the pathetic state of roads in the country.
Alinange said that Government was using funds from the European Union and national coffers to run the projects.
“Some of the roads will be widened. This will result into the displacement of thousands of people who live along them,” Alinange disclosed.
He said UNRA is in the process of demarcating property which will be destroyed and noted that the owners would be compensated before the property is handed over to the contractors.

Over the last three months UNRA has been preparing over 100 contracts for the roads construction.
So far contracts have been awarded to companies like Emtee constructors, BMK (U) Ltd, Prime contractors, Multiplex Ltd among others.

Entebbe: From political seat to high-class lakeside town
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This recreational garden in Entebbe stands in place of a former market. Below, one of the structures coming up in the town
BY TITUS KAKEMBO

Oral literature has it that, the place earned its name from the Luganda word “ntebe” (chair). This was where, during the pre-colonial times, the office (seat) of the chief in Buganda who adjudicated in legal matters of the inhabitants, was found.

Later on, Sir Gerald Portal, one of the earliest British colonial commissioners in Uganda, used the area to conduct administrative business. Entebbe was the hub of political and economic activity.

So many years later, the political activity has moved to Kampala, leaving Entebbe, a peninsula on Lake Victoria, calm and laid back.

Steven Erute, an insurer who has just relocated there, has only praises to sing of his new locale.

“There is something I find irresistible about Entebbe. We all know each other and converge at Four Turkeys, Cassava Republic the various beaches on weekends to socialise,” he says.

Robert Kiboli has different reasons for living in Entebbe. “The serenity here irresistible. I love Entebbe for the cool breeze, sunny days, the birds and fish, but most of all, it gives a child the right atmosphere to grow up in.”

Nkumba Business College was upgraded to a University so Jackson Oboth says living in Entebbe has given him a chance to work and study at the same time.

“It is a melting pot of cultures. We always have traditional wedding ceremonies of the Acholi, Bagishu, Japadhola and Batoro in the area,” says Phillip Corry who grew up there. “You can spot an Entebbe resident a mile away. They are often polite people and have strong religious ties. If one stays long enough in Entebbe, the locals get to know and recognise him/her as family.”

Some elegant colonial era Elizabethan Architecture that used to house colonial masters is still in place, with large compounds. Some structures have been mowed down and replaced with new structures but the tree lined avenues remain. Lately, the traditional profile of Entebbe residents is changing from strictly civil servants to include the private sector.

There are accountants, pilots, vet doctors, aviation engineers, lecturers and working holiday travellers.

As the town battles to reassert its supremacy, its strategic position connecting Uganda to the outside world, by air and marine, is attracting an exodus of property developers, residents and buyers.

“A plot of land measuring between 50mx100m here goes for sh15m,” says Glades Namuto, a new settler in Nakiwogo. “But land prices depend on one’s haggling skills.”

Downtown in Kitoro, a supermarket notice board announces a three square mile Busi Island at $2,800 per acre. A plush bungalow is tagged $2000.

Tirupati Property Developer has put up an estate in Nkumba, complete with a shopping center, entertainment facilities and playgrounds.

The lender friendly policies in banking institutions are enabling residents to secure loans and mortgages to either buy or develop their property.

Most of the places by the shores have been developed but some unscrupulous developers have descended upon church and Uganda Prisons land. Kitoro and Kiyarwanda slums ,which used to be filled with shanty homesteads accommodating casual labourers, have been replaced by big hotels, plush wall fenced residential houses and worship centres.

Things to do in Entebbe
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Entebbe is an ideal place to have nature walks, bird watching and water sporting expeditions. The town has a few curio shops for travelers to buy mementos.
It boasts of the Uganda Wildlife Education Center in addition and the National Botanical Gardens which date back to 1898.
Bird watchers frequent the gardens because they are a bird sanctuary.

Historical highlights . . .
Queen Elizabeth II departed Africa from Entebbe, to return to England in 1952 after learning of her father’s death.

In the 1970s, Entebbe International Airport hit headlines during Operation Thunderbolt. This is when 100 hostages were rescued from Entebbe on board an aeroplane highjacked by Palestinians. The scars left behind are still visible at the Old Airport

Airtel pledges affordable call rates
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By Ismail Musa Ladu (email the author)
Posted Monday, January 3 2011 at 00:00
Kampala

Bharti Airtel has signalled its intention to cut call rates further as it focuses at creating affordability to consumers. This means the price rivalry witnessed in Uganda’s telecommunications sector in the last quarter of 2010 could stretch into 2011.

In a press statement issued last week, Bharti Airtel – the world’s fifth largest telecom firm – has its sights set on not only improving the continent’s telecom infrastructure in the coming year but also ensure that customers, including those in rural Uganda, afford call rates.

Mr Manoj Kohli, the CEO (International) and Joint managing director, Bharti Airtel said in a statement: "We remain committed to offering affordable services, deepening our network coverage to include rural areas.”

The statement also adds that the selection of IBM, Tech Mahindra and Spanco as partners in the Business Processing Outsourcing sector will not only provide Airtel’s customers with world class support but will also utilise the new and existing services to create employment in countries that Airtel operates in within Africa.

Airlines scramble for East Africa market
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By Wangui Maina (email the author)
Posted Monday, January 3 2011 at 00:00
Daily Monitor Correspondent

Kampala

East Africa’s growing economies have led to increased activity in the aviation sector in the region with airlines positioning themselves to tap into the growth.

The regional market has been the preserve of a few airlines which have kept air fares high, but the scene has changed in the past five years giving travellers more options.

Rwandair, Fly 540, Air Uganda, Jetlink and Kenya Airways have boosted their presence in the region by moving to new routes. They aim to tap into the growing travel in the regional cities of Entebbe, Juba, Kigali, Mwanza, Zanzibar and Dar es Salaam setting the stage for a battle for control of the regional market that for a long time remained in the hands of Kenya Airways.

Air fares have remained static in most of the routes in the last two years but the increased activity looks set to lower prices as the rivals grow and defend their market shares. “East Africa has a major market for us,” said Nixon Ooko, the operations manager of Fly 540.

The coming into effect of the East African Common Market is a welcome development for airlines which saw it as an opportunity to tap into the free movement of people and goods in the region. Fly 540 has been one of the fastest growing airlines in the region, banking on its low fares.

The recent acquisition of East African Air Safari Express has given the low cost carrier the opportunity to increase its presence in the region by taking over the other airline’s slots as well as new routes to Juba and Hargesia in Somalia.

“We are looking to grow our business in East Africa in the coming year,” said Mr Ooko. Flights to Burundi and Southern Sudan are the most expensive in East Africa, ranging from $500 (KSh40,000) upwards. Increased competition on the Nairobi-Entebbe route has seen fares drop by about 10 per cent in the past two years to an average of $300 (Sh24,000).

Discovery of oil
The discovery of oil in Uganda is expected to increase demand for flights to the landlocked country, with airline’s anticipating increased cargo and passenger numbers, especially with the completion of an airstrip near Lake Albert.

“We project good growth in the future on the Ugandan route with equipment for the mines and business travellers being the main driver,” said Sanjeev Gadhia, managing director of Astral Aviation, a regional cargo airline.
Tanzania is seen as a major opportunity in the region mainly due to its size and mining activities.

Jetlink recently launched flights to Mwanza, a move that is expected to see the airline tap into the growing passenger numbers moving between gold mines in the town, the region and beyond.

For Astral Aviation Tanzania has been one of its better performing routes mainly driven by cargo to Zanzibar due to increased tourism activities as well as the demand for mining equipment and movement of mined material from Mwanza. However, the slow liberalisation of the regional airspace has seen some of the airlines’ expansion plans delayed. East Africa has an open skies agreement that is yet to come into force. The agreement will open up the regional airspace.

MARKET RESEARCH KNIGHT FRANK

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Rwenzori Towers – Completion date August 201

HIGHLIGHTS
• The National Development Plan of Uganda is placing great emphasis on infrastructural development
i.e roads, railway transport, water and energy to support and encourage investment in the various
economic sectors.
• New suburban retail centres are being developed in the suburbs of Ntinda, Naalya and Kabalagala to
tap into the market derived from the increasing number of middle income earners settling in these
areas.
• Demand within the office sector is dominated by users requiring new / good quality open plan space
with ample parking.
• The Kampala real estate market still remains a speculative one in terms of development in all sectors
of property. and most property investment / development is done on a purely speculative basis.

Market Update - Kampala

Upcoming Office
developments in Kampala -
2010
• Course View Towers
7,500m²
Twed Mansions
9,000m²
• Mandela Auto Spares
9,000m²
• Rwenzori Towers
11,000 m²
• Pension Towers
25,000 m²
Industrial Lettings
Demand for warehousing space has more less remained
constant and is expected to continue that trend for the last
quarter of the year partly because government through the (UIA)
Uganda Investment Authority has gazetted land in Namanve for
industrial use, and also because the supply of warehousing
space currently available on the market does not meet the
standards required by the modern user in terms of provision of
adequate loading ramps, ample parking and turning space and
manoeuvrability for delivery trucks, and forklifts. The newer
Industrial locations of Ntinda, Nakawa and Luzira are becoming
preferred locations because they offer the closest match to the
space requirements of potential tenants. Rentals in these areas
range between US$ 5 – 6.50 per Sq. M per month. Kyambogo
area on the other hand has experienced the lowest rentals
ranging between US$3 – US$ 5 per square metre per month.
Demand for warehousing space is mainly from wholesale
Traders within the East African Community who need storage
space for goods imported into Kampala for further distribution to
the Great Lakes region.
Once the rehabilitation of the railway network is completed,
proximity to railway sidings is going to be a determining factor for
warehousing demand.
Office Lettings
The office sector has seen relatively long void periods with high
rental levels, although market forces are causing a correction in
the rentals being achieved for the various grades of office space.
Rental levels vary from $16.50 net for Grade A office space to
$14.00 - $15.00 for Grade A/B and $10.00 - $13.00 for Grade B
office space. Demand and thus rental levels for office space in
Kampala is principally influenced by availability of ample parking
space for both tenants and visitors, ease of accessibility to the
property,, facilities on offer at the premises, and more importantly
lately,, security.
We are witnessing an increasing sophistication in tenant
requirements, which are no longer willing to pay high rentals for
sub-standard accommodation. Demand in the Grade A / AB
sector is presently dominated by blue chip corporate tenants with
a requirement for new, eco-friendly, good quality, functional and
“intelligent” office space. If this trend continues, we will see an
oversupply in older stock of office space within the CBD.

Market Update - Kampala
Bi Annual
Retail Construction – 2010
• Capital Shoppers Mall
12,000m2
• Naalya Shopping Mall
10,800m2
• Forest Mall – 25,000 m²
• Hotel Equatorial Mall -
15,000Mall,
• Kisementi – Mandela
• Kabalagala Mall –
10,000 – 15,000 sq.m
Retail
From the beginning of the year to date suburban retail projects
such as Capital Shoppers, Naalya Mall, Kabalagala, Forest Mall,
Page 3/5
Hotel Equatoria Shopping Arcade, and many others are either
reaching completion, or are still in the development pipeline. The
number of new retail centres being developed albeit
speculatively, are a manifestation of the perceived consumer
demand present within the residential suburbs of Kampala. As
the city expands rapidly, with a rapidly growing population, there
is no doubt suburban retail mall development will continue on an
upward trend. There is also increasing demand for smaller
convenience stores of between 1,000m
2
– 1,500m
2
within
Greater Kampala, again as a result of our expanding city.
Whilst pro rata shilling rentals per month remain highest in the
“shopping malls” “downtown”, void periods are close to
nonexistent given the footfall and pedestrian traffic feeding these
malls. Tenant turnover however, especially in buildings off prime
pitch or retail space off street level – is assessed as being
relatively high. The trend is that one retail unit of approximately
10sq.m’s is sub-leased to 5 tenants or “stalls”. This makes the
high rents quoted more affordable. We are of the opinion that
these high rents will not be sustainable in the longer term and
there will be a downward market adjustment as more modern
and functional malls are constructed in future, closer to the
consumers in the suburbs.

The prime retail malls within the CBD are achieving rentals of
between $25.00 - $30.00 per square metre per month inclusive of
service charge. Anchor tenants are usually able to negotiate
relatively lower rates, owing to the large space that they occupy
and their covenant strength.
Residential
Whilst there have been an increasing number of privately owned
residential schemes coming onto the market for rent in the past 2
- 3 years, there are also a number of bigger schemes (50 to 100
apartments) being developed to, target the top-end of the market
for sale. These include Springhill’s apartments in Lubowa, Royal
Palms in Butabika, Palm Villas, Castle apartments, Kensington in
kyanja,Top Villas, Chartsworth and the various NHCC estates to
name but a few.
The demand for “affordable” housing has continued to grow in
line with Uganda’s population growth rate of 3.5% p.a and the
banking institutions have contributed greatly to private home
ownership through mortgage financing., However, there is a
shortage of good quality expatriate rental accommodation mainly
as a result of the change of user in the once prime residential
suburbs of Nakasero, Kololo and Bugolobi from residential to
office use. Results from a recent survey carried out by Knight
Frank, indicates that demand for good quality housing between
US$ 2,500 – US$4,000 has out stripped supply.

NEMA starts operation on wetland encroachment
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Trucks loaded with soil impounded from the Ntinda-Kyambogo wetland
By Steven Candia
and Gerald Tenywa

OFFICIALS from the National Environment Management Authority (NEMA) and the Police yesterday arrested one person and impounded 13 trucks at the Ntinda-Kyambogo wetland.

Among the trucks impounded were a grader, which was being used to dump murram at the site during the night.

Three small vehicles were also impounded after their owners, on sensing danger, abandoned them and fled.

Lately, Uganda has faced rampant encroachment on its wetlands, prompting the Government to issue an ultimatum directing everyone with plots in wetlands to vacate or risk losing their land titles.

Addressing the media at the site yesterday, NEMA boss Dr. Aryamanya Mugisha said the truck drivers face arrest because under the law, anyone who participates in degrading a wetland is guilty of the offence.

“We will not release the trucks until their owners remove the murrum and restore this site to its original state,” he said.

Kusiima Naboth, the head of the environmental department in the Police, identified the suspect in custody as James Byamukama, a site supervisor.
The degraders, he said, have been colluding with truck drivers, to dump murrum in wetlands at night.

“They work so fast that by the time environment inspectors move around during daytime, they are done,” Mugisha said.

By the time New Vision reached the site at 8:00am, about seven trucks, loaded with murrum, were still parked on the main road near the UNEB printery, while several others were parked on the road leading to the site. One truck was parked at the site with a grader.

Mugisha said the investor, only identified as Ephraim, had built a 500-metre road connecting the main road to the site.

“I will get in touch with the city authorities and unmask him. It does not matter how big or small he is. No one is above the law,” Mugisha said.

However, some of the truck drivers bragged about their trade. “We are the ones who built Kampala. This is not the first site we are working on. Why are they arresting us now?” Frank Segawa, one of the drivers, asked.

He told the Police that they would be forced to release the impounded trucks when the real owners, who are politically connected, intervened.

Mugisha also vowed to take action against the degrader of a portion of the Kinawataka wetland at the Spear Motors road junction at Nakawa.

Kusima said the two investors would be charged with three offences under the National Environment Act.

USE leads Sub-Saharan Africa in All Shares Index 2010
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A trading day at the USE.

By Martin Luther Oketch (email the author)
Posted Tuesday, January 4 2011 at 00:00
After suffering from a drastic decline in market activities in 2009, the Uganda Securities Exchange bounced back on a strong note out performing all stock exchanges in Sub-Saharan Africa last year in terms of All Share Index.
The Chief Executive Officer of USE, Mr Joseph Kitamirike, told Business Power that Uganda’s All Share Index (ALSI) went up by 74 per cent between January and November 2010 compared to a similar period in 2009, which was below 50 per cent.

“Turnover is up 51.6 per cent to Shs27.6 billion from January to November 2010, compared to a similar period in 2009, when turnover stood at Shs18.2 billion. Daily average turnover is up 56.3 per cent from Shs132 million to Shs207 billion per day,” he said.

The pickup in USE’s performance is being supported by the recovery in the global financial system leading to investor confidence in the market locally and internationally.

The impressive performance of USE is also attributed to high economic growth and low inflation leading to high returns on investments and the introduction of electronic trading systems, Settlement and Clearing Depository (SCD), which USE launched in the first quarter of 2010.

SCD has made trading much easier and faster than the manual trading system, which was characterised by inefficiencies and high risk.

“The SCD system is linked with an e-mail notification system that alerts the investor when there is trading activity in the respective accounts,” he said.

“A total of 4,000 out of 35,000 accounts have been demobilised. 68 per cent of these are by East African investors; 22 per cent by local investors and 10 per cent by foreign investors. Since implementation of the SCD system, over 30 million shares have been cleared through the system.”
High economic growth and high returns on investments have proven to be the driving factors leading offshore investors in frontier markets like Uganda.

Uganda’s GDP growth for 2010 is estimated at 5.8 per cent while the GDP growth rate for 2011 is projected to be 6.4 per cent.

This positive market development acts as a centre of attraction for offshore investors as they try to reduce the risk associated with investing in markets where prices can fall or rise depending on the prevailing economic condition.

The USE is now 12 years old since its establishment in 1998, however, it still remains one of the smallest stock exchanges in Africa but quite vibrant in market activities and profitability.
This year, USE witnessed the listing of the National Insurance Corporation (NIC) and the cross listing of the Nation Media Group making the number of companies listed on USE 13 with six cross listed firms.

On the debt market (Fixed Income Securities Market), the central bank is actively issuing treasury bonds on behalf of the government. The number of government bonds now stands at 33 with different maturity ranging from two, three, five and 10 years. The number of government bonds has continued to outnumber that of corporate bonds which are just five.

During the second quarter of 2010 the turnover in government securities amounted to Shs468,675,000,000 up from a turnover of Shs353,63, 000,000 recorded in the previous quarter. Unlike the corporate this saw no active during the same period.

On the future prospects of USE, Mr Kitamirike says the USE is liaising with the Central Bank of Uganda to establish a link with the Real Time Gross Settlement (RTGS) system, reviewing their capital market legal regime with a view to developing simpler laws and coming up with a distinct piece of draft legislation.

The other new initiatives being undertaken by the USE Mr Kitamirike said are that USE is working on developing a local index to capture the trading activity of domestic companies.
Mr Kitamirike disclosed that new listings are expected between the end of quarter 4 of 2010 and end of 2011 and these includes Tullow Oil and Umeme. Centum, a company listed in Kenya, is expected to cross list in quarter 1 of 2011 and Standard Chartered Bank is also set to issue a another corporate bond.

As of way of comparison, the Nairobi Stock Exchange (NSE) comes second to Uganda Securities Exchange in terms of high index in Africa as of November. The NSE’s good performance is also attributed to remarkable recovery in the financial market besides other new initiatives that has been by the stock exchange management aimed trading more fixable.
Mr Peter Mwangi, Chief Executive of Nairobi Stock Exchange (NSE) said: “Market performance for the third quarter, both for the bonds and equity markets has picked up considerably. The NSE 20 Share Index is up 23 per cent year to date (November 2010). Market capitalization is up 18.7 per cent is currently at Kshs1,169 Billion ($ 14.3 Million),”

The good performance in NSE is also being supported by offshore investors to due to high economic growth, Mr Mwangi point out that the estimated GDP growth rate for the first half of 2010 is 5.2 per cent with a projected GDP growth rate of 6.2 per cent for 2010. The 91 and 182 treasury bill rates are also on a decline, standing at 2.3 per cent and 2.7 per cent respectively as of the end of November 2010.

Foreign investment in Kenya’s capital markets industry is also very active, Mr Mwangi said that foreign turnover year to date currently stands at KShs42 billion, representing an increase of 82 per cent over a similar period in 2009.

Mr Mwangi said in Kenya bond market turnover year to date is Kshs460 billion, representing an increase of 315 per cent over a similar period in 2009.

Available information indicates that the NSE has commenced a Prospective Issuers Forum, which aims to bring together in-depth knowledge and insight from some of the key advisers experienced in guiding companies to listings.

On the programmes that has been initiated by the management of the NSE to lay foundation base for smooth trading, Mr Mwangi spelt out that Nairobi Stock Exchange continues to make significant progress in the process of Demutualisation.

He said the NSE has formed a joint consultative committee with the Capital Markets Authority (CMA) to develop an SME market segment that will enable these enterprises to access capital that is necessary for them to grow their companies,” he said.

In the budget of 2010/11 Kenyan government said that government is going to amend The Finance Bill as a way of strengthening Kenya’s financial market. Mr Mwangi revealed that NSE is awaiting the enactment of The Finance Bill 2010/2011 and specific amendments to The Capital Markets Act. While the process of implementing a standardized Broker Back Office (BBO) system is ongoing.

“A service provider has been selected and the system is expected to be in place by the first quarter of 2011,”he said.
For the case of the Dar es Salaam Stock Exchange (DSE), Mr. Gabriel Kitua, Chief Executive Officer of the Dar es Salaam Stock Exchange (DSE) said the All Share Index (DSEI) recorded an increase of 0.29 per cent from 1,170.8 points at the end of quarter 2 to 1,174.18 points in quarter 3.

Mr Kitu explains that total market capitalization was TZS. 4,938 billion while equity market turnover was TZS. 7.39 million at the end of quarter 3 of 2010, adding that foreign investor participation continues to grow with 32 per cent of the total turnover at end of quarter 3.

“In the bond market, government bonds worth TZS. 60.26 billion were traded in quarter 3 of 2010. There is an indicative increased interest for long term investment instruments. During this same period, the government issued treasury bonds worth TZS. 240.57 billion with different maturity dates,” said Mr Kitu.
In East Africa there four stock markets with the Rwandan being the youngest of the four capital markets in EAC, Mr Celestin Rwabukumba, Operations Manager, the Capital Markets Advisory Council (CMAC) Rwanda said that the process of separation of the Regulatory and Stock Exchange arm of the Rwandan capital markets has significantly progressed.

“This separation will result in the formation of the regulator and the exchange. The board of the Rwandan Stock Exchange (RSE) has already been appointed and resolutions on the capital structure resolutions have been passed.

It is expected that the Rwandan Stock Exchange will be up and running by January 2011, in time to list the BRALIRWA IPO shares. The Capital Markets Authority Council (CMAC) is working with CDSC Kenya and the Central Bank of Rwanda to work on a settlement process,” he said.

Mr Rwabukumba, said the estimated GDP growth rate for 2010 is between 7 %- 10%.The annual headline inflation rate is currently at 3.7 per cent as of September 2010. The equity market in the period running from April 2010 to November 2010 has recorded a total turnover of RWF 12,699,060 from 73,000 KCB shares traded on the ROTC market 42 deals. NMG has traded 1,000 shares with a turnover of RWF 1,196,000,” he said.

Uganda projects increased passenger traffic in 2011
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Turkish Airlines is the latest entrant in Uganda’s airline space.

By Dorothy Nakaweesi & Agencies (email the author)
Posted Tuesday, January 4 2011 at 00:00
International Global passenger traffic is set to go up by 5.2 per cent year-on-years in 2011, according to the latest forecasts by the International Air Transport Association (IATA).

Previously, the organisation had forecast a 4.9 per cent rise in passenger demand.

Airlines are also expected to record profits across the industry of $9.1 billion in 2011, said IATA, though this is expected to be a decline on 2010.

IATA’s latest estimates for the full year in 2010 are for an industry net profit of $15.1 billion (up from the $8.9 billion forecast in September). Net margins remain weak at 2.7 per cent for 2010 and falling to 1.5 per cent in 2011.

“Our profit projections increased for both 2010 and 2011 based on an exceptionally strong third quarter performance,” said Mr Giovanni Bisignani, IATA’s director general and CEO.
“But despite higher profit projections, we still see the recovery pausing next year after a strong post-recession rebound. And the two-speed nature of the recovery is unchanged with European airlines continuing to under perform other regions.”
Mr Bisignani also characterised the improvements in terms of profit margins, which continue to disappoint.

“Margins remain pathetic. With a 2.7 per cent net margin in 2010 shrinking to 1.5 per cent in 2011, we are nowhere near covering our cost of capital. The industry is fragile and balancing on a knife edge. Any shock could stunt the recovery, as we are seeing with the results of new or increased taxation on airlines and travellers in Europe,” said Mr Bisignani.

He said the third quarter of 2010 was exceptionally positive in terms of passenger traffic volume.

“Airlines met increased demand by utilising their fleets more intensely. Fixed costs remained constant, passenger yields firmed and the increased revenues went almost directly to the bottom line,” he said.

According to IATA, Africa carriers will see 2010 profits of $100 million move to break-even in 2011.

As with other regions, a capacity expansion of +6.4 per cent in 2011 will outstrip demand growth of +5.5 per cent.

The region’s carriers continue to benefit from a commodity-led economic expansion that is fuelling growth in both regional and long-haul markets, noted IATA.

In Uganda, records from the Civil Aviation Authority (CAA) indicate that the country will have a share of Africa and the global prospects.

Mr Ignie Igundura, the public relations manager at CAA in an interview with Business Power said: “We project both passenger and cargo growth in 2011 especially now that the new operators have come on board and more have been licensed.”

CAA records indicate that Uganda will receive 1.07 million passengers a figure slightly higher than 2010’s 1 million and far better than the previous year (2009) nearly 930,000 international travellers.

Uganda’s cargo exports and imports projections for 2011 are set to increase to about 22,000 tonnes (exports) and about 36,000 (imports), according to CAA.

Mr Igundura says passenger and cargo traffic is still very low.
Mr Igundura, however, said things will get better this year as more operators come into the market.

The latest entrant is Turkish Airlines, which launched its operations in mid 2010.

Some of the new applicants for air service licences who presented and defended their applications at an Air Services Licensing Committee meeting on November 25, 2010 include: Tandrill (T) Ltd, Astral Aviation, Aberdair, Transafrik, Seven Four Eight Air Services, SANA Group (U) Ltd, Orient Lines Africa Ltd and King David Investments Ltd.

Those that applied for renewal of Air Service Licences include: DHL Aviation (Kenya) Ltd, Eagle Air, Mission Aviation Fellowship, Uganda Air Cargo and Aim Air.

CAA said after reviewing of the applications, they will communicate to the applicants on whether their applications are successful or not. The Air Service License is only granted after realisation that the applicant fulfils various technical requirements.

MPs pass sh600b additional budget
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By Mary Karugaba
and Catherine Bekunda

PARLIAMENT yesterday passed a supplementary budget of sh600b despite objection from opposition members.

Led by opposition leader Prof. Ogenga Latigo, the MPs demanded to know the emergencies that had come up in ministries within six months after the main budget had been passed and needed urgent funding.

They mainly objected to over sh79b requested for State House, which they suspected would be used to fund campaigns.

The claims were, however, denied by the NRM secretary, General Amama Mbabazi, saying the party had sufficient resources to fund its campaigns.

MPs Cecilia Ogwal, Francis Epetait, Peter Mutuluza, and Odonga Otto asked the finance minister, Fred Omach, to give details of the expenditures rather than generalising them.

The budget committee in their report to Parliament presented by MP Rose Okol had also raised concern over requests by State House for a supplementary budget and recommended that the finance ministry revises the issue.

“What disaster has befallen State House in such a short time that Parliament had to be called to approve the expenditure?” Epetait asked.
Six months ago, the Government approved a budget of sh8trillion yet it has spent sh8.6 trillion so far.
According to the law, the Government is allowed to seek approval of additional funds to cater for emergency expenditures that were not foreseen during the budgeting process.

The House, however, rejected a request for sh3b by the finance ministry to capitalise Phenix logistics and sh850m requested by the ministry to cater for general supplies and other items for Hoima Hospital.

The MPs said no money should be given to Phenix until the ministry accounts for the money it has advanced to the company so far.

They also demanded that a forensic audit be carried out to ascertain whether the money was being properly used.

According to the report, the defence ministry is requesting for the biggest share of sh89b. Of this, sh14b is to be used to wind up the UPDF war in Congo, sh9.8b is for preparation activities to beef up the Police during and after the general elections and sh50b is to match the “challenges ahead”.

The Electoral Commission received sh83b as additional funds to cater for new expenditures for the elections as a result of increased number of districts and candidates.

The Inspectorate of Government was given sh891m as additional funds to cater for investigations and prosecution of individuals involved in the misuse of CHOGM and NAADS funds.

The House also approved sh5b for the resettlement of 10,000 survivors of the Bududa landslide.

Britannia to create 10,0000 jobs
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By Patrick Jaramogi

AT least 10,000 jobs will be created when Britania Allied Industries builds a fruit-processing plant in Mukono, New Vision has learnt.

Hasmukh Dawda, the House of Dawda chairman, said the plant would cost $5m (over sh10b).

“If the Government, through the Uganda Investment Authority, gives us a 40-acre piece of land, the plant will be ready in eight months,” said Dawda.

Dawda said he had convinced the board to set up the plant in Uganda rather than Kenya because of the country’s vibrant market.

“Uganda has fertile and fresh land for growing fruits. We are targeting Mukono because it is strategically positioned; as we will be getting mangoes from the east and pineapples from Kayunga,” he said, adding that the plant would process mango and pineapple juice.

Dawda said the Britania plant in Ntinda was currently facing a shortage of pineapples, which has caused their price to rise.

“When we started the plant, we were buying pineapples at about sh500. Presently, we buy them at sh1,200 to sh1,800, but we are still facing supply problems.

“We want to solve this by engaging with the farmers directly,” he said.

According to K.R Sridharan, the company’s general manager of marketing, the new plant will have the capacity of producing a million litres of juice in an hour.

The firm, he added, was targeting the local and regional markets.

Britania are manufacturers of splash mango, pineapple, guava and hibiscus fruit drinks. They have been exporting to Rwanda, Kenya, Tanzania, Southern Sudan and Burundi with exports sales hitting over $40m (sh800m) in 2010 alone.

State House budget shoots to Shs160b
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CLASH OF INTERESTS: Minister Mbabazi and Mr Godi after yesterday’s heated debate in Parliament. PHOTO BY NELSON WESONGA

By Yasiin Mugerwa (email the author)
Posted Wednesday, January 5 2011 at 00:00
The ruling party yesterday used its numerical strength in Parliament to force through the approval of more than Shs600 billion in “emergency” spending even as the opposition accused President Museveni of using public funds for campaigns.

During a special sitting of Parliament to consider the supplementary budget request, lawmakers mainly from the opposition, accused President Museveni, the NRM presidential candidate, of plotting to funnel some of this money to finance his campaigns, a claim Security Minister Amama Mbabazi denied.

State House concerns
Of concern was the Shs18.6 billion needed to facilitate President Museveni’s donations under the State House budget of Shs95 billion in extra funding — a figure which is over and above the total State House original budget of Shs80.6 billion. “Ministry of Finance has to be honest to the taxpayers in this country, how can 130 per cent of the approved budget for State House be for emergency and unforeseen [expenditures]?” Dokolo Woman MP Cecilia Ogwal (Independent) asked.

Makindye West MP Hussein Kyanjo added: “It’s shameful that a whole Parliament can approve money for State House at this time when we are having an election. This is itself suspicious.”

As the opposition side pushed for the rejection of some items in the supplementary budget request, the majority of the NRM MPs who turned up in big numbers, only watched on the sidelines as though numbed by what they were being asked to do.

Silent House
Apart from a few members who contributed here and there, others kept silent until when the Speaker put the question for them to approve the money the opposition say a bulk of which is to facilitate President Museveni’s re-election campaign. The general elections are expected on February 18.

State Minister for Industry Gaggawala Wambuzi kept calling opposition MPs to order, compelling Ms Ogwal to move a motion that ended in futility. The motion sought to stop the minister from interfering with the proceedings.

Mr Gaggawala had earlier insisted that Shs3 billion be given to Phenix Logistics Uganda Ltd but without any success. The controversial parliamentary approval of the unprecedented State House’s supplementary budget brings the total spending needed to take care of the presidency this year to about Shs160 billion—tripling the budget for referral hospitals in the country.
“What disaster has befallen State House to demand for over 130 per cent of the total budget we approved recently?” Arua Municipality MP Akbar Godi would later ask reporters.

“This is too much and this expenditure cannot be for an emergency, unless there is something wrong. This is campaign money for Museveni. It’s disappointing that some of our colleagues have decided to approve this money because of the numbers.”

The MPs’ concerns came after it emerged last week that officials in the Ministry of Finance were also demanding for more than Shs10 billion to facilitate jobless youth, market vendors and rated small business operators— citing fresh directives from President Museveni.

Donor President
“President Museveni wants almost Shs19 billion for donations, yet we are not supposed to donate during campaigns—but the funny thing with our leaders, it’s as if laws don’t apply to them,” Mawokota North MP Peter Mutuluuza (NRM) said. “With such (financial) favours, how can Museveni compete with Dr Kizza Besigye who doesn’t have access to public funds?”

Using the numbers, NRM MPs also approved more than Shs37.7 billion in supplementary funding to Ministry of Justice without any documentation. After the Leader of Opposition, Prof. Ogenga Latigo, pushed the government on the matter, State Minister for Finance Fred Omach claimed that the money was to compensate DURA Cement Ltd.

Invocation
“This is criminal and religiously sinful,” Prof. Latigo said in exasperation, adding: “We cannot give one individual Shs37 billion in a blanket cheque situation. We are approving funds as if there are no procedures of spending public funds.”

Defending the NRM candidate on the alleged use of State resources for his campaigns, Mr Mbabazi said: “The NRM party has sufficient resources to conduct campaigns. We don’t intend to use public funds, we have enough.” He added: “The President remains a President until May 3 and a nation must run. Demanding for more money shouldn’t surprise anyone.”

Although the minister, who is also the ruling party’s secretary general, claims they have enough money, in the State House/Presidency supplementary budget request Shs20 billion is pegged for inland travel. This money could conceivably be spent on President Museveni’s campaign tours around the country.

Smuggled figures
There were also concerns of duplicity, where Dokolo MP Ogwal, among others, accused the Parliamentary Budget Committee Chairperson Rose Akol of helping Ministry of Finance to smuggle “cooked” figures of the supplementary without the knowledge of others members.

“The chairperson should be honest to this House; these figures were cooked by Ministry of Finance and brought to you, please don’t lie to this House,” Ms Ogwal said. “The figures in the supplementary never went through the due process and rules were never applied, some documents were smuggled.” Ms Akol denied any wrongdoing.

As the debate on the supplementary budget ensued, it also emerged that someone sneaked in a request of about Shs850 million for Hoima Hospital, which was not in the original document from the Ministry of Finance.

While Speaker Edward Ssekandi pushed for inclusion of the request on compassionate grounds, lawmakers led by Usuk MP Charles Oleny Ojok and Prof. Latigo insisted that approval be blocked after Ms Akol admitted that she found the document containing this irregular request under her office door.

On the Shs3 billion, the government wants for Phenix Logistics Uganda Ltd, a textile firm, Aruu MP Odonga Otto said: “Every time for elections approaches they ask for money for Phenix, they should give us a break. In my constituency patients sleep in a mortuary, hospitals are in bad shape yet State House is asking for Shs95 billion, this is unfair.”

He added: “Why should President Museveni get this money yet other candidates were given only Shs12 million for campaigns and some have even run out of fuel? Why can’t we be fair to other presidential candidates?” Describing State House as a guinea fowl, Otto said: “Much as we want to feed the guinea fowl let’s not forget the hen at home.”

Other MPs led by Ngora MP Dr Francis Epetait questioned Speaker Ssekandi for allowing the NRM MPs to have their way even after the opposition raised objections to the supplementary request.
But Mr Ssekandi said everything was captured in the adopted Budget Committee report.

Ignoring protests from MPs like Prof. Latigo that the committee report was shallow after it emerged that no serious analysis of the supplementary request was made, the NRM pushed through approval for a total Shs602.6 billion.

The supplementary Schedule 1 for the Financial Year 2010/11 amounting to Shs605.6 billion represents 7.6 per cent of the total approved budget. But citing pressure from the spending agencies, Parliament heard that Minister of Finance Syda Bbumba even before the approval of Parliament, had already controversially authorised the expenditure of Shs186.3 billion—constituting 2.338 per cent of the approved budget.

Ms Bbumba’s actions, along with the yesterday’ events, fly in the face of Section 12(1) of the Budget Act 2001 which allows Ministry of Finance to spend only 3 per cent of total as supplementary expenditure and seek retrospective authority.

Prof. Latigo would later accuse the government of abusing the Budget Act by its failure to table the details of the Shs186.3 billion which was spent before coming to Parliament for approval. Questioning the proposal to fund the supplementary budget through a draw down from Bank of Uganda accounting to Shs496.3 billion, the Budget Committee report notes that such a move would ultimately distort the country’s macro-economic stability and warned against cutting money from critical sectors.

“We don’t even know the details of what was spent, where will the country put us if we continue like this?” Prof Latigo said. “If you continue and approve this money, we are going to end up with another Chogm (scandal). How can we just approve a blanket thing without any details of the so-called emergences?”

]Kacita cautions traders on South Sudan’s referendum
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By Justus Lyatuu (email the author)
Posted Wednesday, January 5 2011 at 00:00
Kampala

Kampala City Traders Association has warned Ugandan traders to be cautious of South Sudan’s trading space as the country prepares for a landmark referendum on January 9.

Speaking to the Daily Monitor in an interview on yesterday, Mr Issa Sekitto, the Kacita spokesperson said traders should revise their trading in the coming days as they study the situation in the country.

The referendum is widely expected to give South Sudan autonomy from the north with which it has been in conflict over oil riches for about 25 years now. However analysts believe that the result of the referendum might spark off another war as tensions continue to rise between the two rivals.

Mr Sekitto said: “Many Ugandan traders have been killed and merchandise looted with much impunity, so it is important that they take note of the situation at hand.”

The January 9 referendum vote on self determination is critical to peace and stability not just for Sudan but also for the neigbouring countries including Uganda and Kenya

Uganda to opt for public private partnership refinery
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By Stephen Wandera & Agencies (email the author)
Posted Wednesday, January 5 2011 at 00:00
Kampala

Government is planning to develop an oil refinery on a public-private partnership basis when oil production commences, President Museveni has said.

The president said in his New Year message to the nation that the refinery would be developed in phases starting with an initial capacity of about 20,000 to 40,000 barrels a day in 2012 and eventually going up to at least 200,000 barrels by 2016.

"With the prospect of large oil revenues, Uganda will soon be free from external influence in the implementation of our investment programmes," he said. "Government has moved to improve the regulatory environment of the [oil and gas] sector to ensure that it achieves maximum benefit from these resources."

Oil exploration companies have discovered at least 800 million barrels of recoverable oil reserves in Uganda's Lake Albert rift valley basin.

President Museveni said the government will pass new legislation on access to oil and gas rights, regulating exploration and production, refining and gas processing and managing petroleum revenue.

At least 20,000 jobs are expected to be directly generated by the oil industry and another 100,000 jobs generated as a result of the multiplier effect, the president added.

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Uganda Government News: Kampala Roads Construction Starts

Kampala city will have a new look in the New Year as constructions on Nakivubo and Nabugabo roads start.
The City Council Engineer Steven Kinyera says that two roads will cost government and City Council 800 billion shillings.

Engineer Kinyera adds that the next roads to be rehabilitated are Kafumbe Mukasa and Ben Kiwanuka roads.

Kinyera says that government and Kampala City Council promise to rehabilitate at least a road in each Division of Kampala city in 100 days has started.

The construction of Nakivubo and Nabugabo roads is being done by Ziimwe Construction Company.

Construction work will only take three weeks according to the agreement between Ziimwe Construction Company and Kampala City Council.

Sudan peace spurs growth in Uganda
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A car drives past a building on the Gulu-Kampala Road. PHOTO BY HARRIET ANENA.

By Benon Herbert Oluka (email the author)
Posted Thursday, January 6 2011 at 00:00
In Part IV of our Road Trip to Juba series, which is part of our extended coverage of the Southern Sudan referendum due to take place on January 9, Benon Herbert Oluka makes a stopover in Gulu District. He reports that Gulu’s remarkable turn-around within five years since 2005, after years of being crippled by the Lord’s Resistance Army rebel war and Southern Sudan by its war with the Khartoum government, offers testimony of the economic benefits that Uganda can reap from its ties with a peaceful Southern Sudan – united with the north or otherwise: -

Awere Street is four other streets away from the main street of Gulu Town, the gateway to northern Uganda’s largest commercial urban centre. Five years ago, as the governments of Uganda and Sudan were struggling for peaceful resolutions to their respective wars that had lasted at least 20 years each, Awere Street hosted only Gulu market and was lined on the sides by buildings that had seen better days.

Today, Awere Street is bustling with more activity than before. Besides the market, Awere Street now hosts a branch of two leading banking institutions; Bank of Africa and Orient Bank. From some of the services that the banks offer, they are clearly not tapping into just the potential offered by locals in Gulu. Each of the banks maintains Automated Teller Machines (ATMs) that offer VISA card services.

Development
A considerable number of the structures that line either side of Awere Street have also grown higher, as the structures either undergo refurbishment or new ones replace those that were there before.

Such developments are not limited to Awere Street; they have swept through Gulu at a rather impressive speed. Over the last three years, seven commercial banks have opened branches in Gulu Town compared to only one bank less than four years ago.

And the developments are not just in the banking sector. The hospitality industry has grown in leaps and bounds, the number of buses plying the Kampala-Gulu-Juba route have gone up so much it is now one of the most competitive routes in the country. Toyota Uganda has opened a showroom in Gulu, and, in the agricultural sector that employs the majority of the people in northern Uganda, the prices of food crops have gone up several times.

According to Mr Willy Olango, the former Speaker of the Gulu District Council, the developments in the area are not just a result of the return to peace in the district since the LRA was thrown out of Ugandan territory. He says a large part of the success in Gulu’s economy is down to the opening of the trade route between northern Uganda and Southern Sudan since the signing of the Comprehensive Peace Agreement (CPA) between Sudan’s north and south, which ended a 21-year-old war.

Mr Olango said among the greatest dividends from peace across the border is easy transportation within northern Uganda. “That is the biggest achievement,” he said. “You can leave Kampala even at midnight using those buses going to Juba. People in Atiak can board buses going to Juba even at mid-night. Not like those days before the signing of the CPA, when it was really a challenge. You had to go to book a flight to Juba.”

To Mr Olango, the level of mobility of the people alone is a good measure of the economic progress that a society is making. He said: “An economy is improved when people move. You can assess the economic level of a particular region by the movement of the people because if you move, it means there is something driving you to move and that is one way of getting money.”

Gulu is, however, not enjoying the economic benefits of the peaceful situation in Southern Sudan all alone. In fact, the majority of the benefits have found their way to several places beyond northern Uganda because of the diversity of the people engaged in trade with Southern Sudan.

According to the latest available statistics from the Uganda Export Promotion Board, since the signing of the CPA, trade between Uganda and Southern Sudan has increased three-fold. Currently, Southern Sudan is the largest importer of Uganda products, with the latest statistics showing that the number of exports from Uganda to Sudan rose from $91.7 million in 2006 to $257.9 million in 2008.

Those figures exclude informal trade, according to the Uganda Bureau of Statistics (UBOS), which said in a June 2009 report that Uganda’s informal cross-border sales into Southern Sudan alone reached more than $900 million in 2008 – twice the 2007 figure.

In addition, according to a paper prepared by Dr Sallie Kayunga Simba of the Makerere University Department of Political Science and Public Administration, Ugandans are believed to be the largest group of foreign national living in Southern Sudan. “In case the people of Southern Sudan go for self-determination, Uganda has a lot to gain,” he said, while presenting his paper at a regional symposium on Sudan’s neighbours and South Sudan Referendum on Self-Determination on October 2-3, 2010, in Khartoum. The symposium was organised by the Peace Research Institute PRI-University of Khartoum and Society Study Centre.

Mr Olango agrees. He adds: the benefits that Uganda has reaped so far are just the tip of the iceberg because Southern Sudan does not yet have the capacity to cater for the majority of its basic needs. “We have a lot to gain, particularly in northern Uganda here,” he argued. “Right now, the majority of our schools are predominantly filled up by Sudanese. Now, so long as we have peace there, we are very sure the population will shoot up.”

Yet that is not even the biggest catch, according to Mr Olango. “I don’t think the government of Southern Sudan would prefer to have their oil go through Khartoum,” he said, quite emphatically. “If you have that pipeline passing through here to join up with ours, it means it will also help us create employment opportunities.”

If the activities undertaken by the government in the recent past are anything to go by, then it is clear that it has recognised the benefits that the country can reap from its economic relationship with Southern Sudan and is making all efforts to cash in.

The government has undertaken the construction of the 104-kilometre Gulu-Atiak-Bibia-Nimule road at a cost of $201 million, most of it financed by the United Stated Agency for International Development.

It has also signed several trade agreements with the Government of Southern Sudan, allocated $2 million for the construction of a market in Juba for Ugandans to sell their goods, and revived plans to revamp the defunct regional railway system and extend the railway from Gulu to Juba.

In addition, the Uganda Export Promotion Board organised a trade Expo in Juba on February 10-14, 2010, reportedly to showcase Uganda goods and to cultivate links between the business communities of the two countries.

Discussing the importance of tapping into the opportunities offered by Sudan at a briefing about the Expo earlier, the Minister of State for Trade, Eng. Nelson Gagawala Wambuzi, said: “That growing market cannot go untapped. Uganda helped in bringing back peace in South Sudan and we have to take advantage of it instead of seeing other countries dominating the virgin market.”

If Uganda has to exploit all the opportunities on offer, however, analysts believe the two countries will have to iron out some of the major challenges that continue to bedevil trade between them.

According to Mr Olango, the Uganda government will have to find different avenues to ensure that ordinary Ugandans benefit rather than leaving it as a reserve for the middle class business people.
“The production here is by these peasant farmers. All they know is that there is going to be voting but they don’t even understand what the referendum is all about and how they stand to gain from what could happen there. It is the elites who understand these things and they should go to sensitise the peasant farmers and mobilise the community to access these markets and benefit from them,” he said.

Mr Olango also believes that the government of Southern Sudan will have to ensure that it eliminates the petty insecurity that is relevant in Juba and other cities in Southern Sudan. “There is an element of lawlessness in Sudan where you find you are arrested and tortured at will and many Ugandans have lost money,” he said.

“There is also illegal killing of Ugandans. It looks as if when you are in Juba, you need to have a godfather from the rank of a Brigadier onwards so that you go around undisturbed, which I think is a weakness. But in a situation where the whole place is peaceful and you can move freely, then you can have direct access to the market. At the end of the day, it will help to boost production and also challenge people to add value. This will become a main basket for them.”

However, even as Uganda waits for the referendum to decide the fate of Southern Sudan, and for any reforms to improve the climate for doing business, Mr Olango says the benefits from a peaceful Southern Sudan – whether it is united with the north or not – will not only be of economic nature.

“At the end of the day,” he explained, “the peace alone will be enough for us because most of our problems in northern Uganda have started because of instability in Southern Sudan. But if Sudan is peaceful, there will be no hideout for any rebel group coming to terrorise the people in northern Uganda.”

McLeod Russel Says Ugandan Tea Unit to Boost Profit as India Output Falls
By Pradipta Mukherjee - Jan 6, 2011 11:54 AM GMT

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McLeod Russel India Ltd., the world’s biggest tea grower, expects profit to climb 13 percent this year as higher prices and rising sales from its Ugandan estates make up for a decline in Indian production.

Group net income may increase to 2.6 billion rupees ($57.3 million) in the year to March 31 from 2.3 billion rupees a year earlier, Managing Director Aditya Khaitan said in an interview. Sales may climb 18 percent to 13 billion rupees, he said.

A pest attack on plantations in north India, which accounts for 70 percent of total output, have boosted tea prices, helping McLeod and rivals offset a drop in sales volume. McLeod fetched an average 150 rupees a kilograms at auctions in the year from April 1, about 10 percent more from a year ago, Khaitan said.

“We have been compensated with a better price,” he said. The company’s output may be lower by 3.5 million to 4 million kilograms, while the northern region will likely lose about 25 million kilograms of production, Khaitan said in Kolkata.

Mcleod’s shares advanced as much as 3 percent to 223.50 rupees in Mumbai, the most since Dec. 21, and settled at 218 rupees. The stock has risen 26 percent in each of the past five years, faster than the 18 percent annual jump in the BSE 200 Index, according to data on the Bloomberg.

Domestic prices may gain 5 percent to 10 percent next year as Indian production has declined below 980 kilograms for the first time in five years, Kamal Baheti, McLeod’s chief financial officer, said in an interview.

The company’s domestic production may decline to 74 million kilograms this year from 77.5 million last year, and output at James Finlay Uganda Ltd., which McLeod acquired last year, may be 17 million kilograms, Khaitan said. Total production may reach 96 million kilograms, he said.

Production in Uganda, Africa’s third-largest producer, may reach 55 million kilograms this year from a provisional estimate of 53 million kilograms for 2010, according to the country’s Tea Association. The country ships most of its tea through weekly auctions at the port city of Mombasa in neighboring Kenya.

India names new envoy to Uganda

2011-01-06 18:50:00
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New Delhi, Jan 6 (IANS) Amid burgeoning economic cooperation between India and Uganda, East Africa's growing economy, the Indian government has appointed S.N. Ray as New Delhi's envoy in Kampala.

Ray, who is presently joint secretary in the external affairs ministry, will succeed Niraj Srivastava as the the next High Commissioner of India to Uganda.

He is expected to take up his assignment shortly, the external affairs ministry said here Thursday.

Sibabrata Tripathi, presently High Commissioner of India to Kenya, has been concurrently accredited as the next ambassador of India to Somalia with residence in Nairobi, the ministry announced.

The economic ties between India and Uganda, home to a large Indian diaspora, are getting stronger. Last year, Uganda offered India huge tracts of farmland on lease in a bid to expand agricultural cooperation.



Uganda Business News: More Ugandans Open Up Investment Projects

Ultimate Media

The Uganda investment Authority says more Ugandans are increasingly opening up more investment projects than foreigners.

The Uganda investment Authority report 2010, indicates that out of the 323 projects registered last year, 143 belong to Ugandans.

The State minister in charge planning, Prof. Ephraim Kamuntu says the local investment projects brought in a total of 1.1 billion shillings.

He says the investment projects contributed 1.7 billion US dollars in the economy, as compared to the 1.6 billion US dollars in the year 2009.

The major sectors attracting investment include agriculture, manufacturing and finance.

Kamuntu attributes the growth in investment to macro-economic stability.


Uganda Approved $1.7 Billion of Investments in 2010
January 06, 2011, 6:35 AM EST
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By Fred Ojambo
(Updates with comment from minister in second and third paragraphs.)

Jan. 6 (Bloomberg) -- The Uganda Investment Authority approved investment projects worth $1.7 billion last year, up from $1.6 billion the year before, said Ephraim Kamuntu, minister of state for finance.

Local companies accounted for $1.1 billion of the projects, while the rest came from abroad, principally India, the U.K., Netherlands, China and Kenya, the minister told reporters today in the capital, Kampala.

“The positive trend is a sign that investors, both local and foreign, have confidence in the fact that the Ugandan economy is stable,” said Kamuntu. Investment may increase further in 2011 because of “rising demand for investment in petroleum, mining and agricultural industries.”

Uganda discovered commercially viable oil deposits in 2006 and will become Africa’s latest crude producer when Tullow Oil Plc begins production at the Kasamene field this year. The country has an estimated 2.5 billion barrels of oil, with 1 billion barrels already discovered, according to Tullow.

The country may license $3 billion worth of projects this year, $1 billion of them from abroad, Maggie Kigozi, the UIA executive director, told reporters at the press conference. That compares with the forecast for foreign investment of $1.2 billion she gave on Dec. 29.

A total of 323 projects, capable of generating 149,659 jobs, were licensed last year, Kamuntu said.

Uganda sees 2011 non-oil FDI rising nearly 80 pct
Thu Jan 6, 2011 4:04pm GMT Print | Single Page [-] Text [+]
KAMPALA (Reuters) - Uganda expects a near 80 percent jump this year in foreign direct investment excluding the oil sector, fuelled by global economic recovery and a peaceful election at home, government officials said on Thursday.

Investor interest in the east African economy has been lifted by the discovery of commercial hydrocarbon deposits in its west. The government says oil will potentially propel annual GDP growth rates to double digits once production starts.

The executive director of the state-run Uganda Investment Authority (UIA), Maggie Kigozi, told a news conference it expects to attract non-oil FDI worth about $3 billion this year, up from $1.67 billion in 2010.

"We think the economic conditions in our traditional sources of foreign investment, mainly Europe, will improve significantly which is underpinning our confidence," she said.

"Most remarkable, however, is that we have new sources of investment like India, China and the Middle East and these are replacing Europe. So even if Europe remains sick, it won't affect us much."

UIA said it licensed 63 investments in the last quarter of 2010 worth $646 million, which was a 7 percent increase from the same period a year ago.

A total of 149,000 jobs were created in 2010 from the 323 projects licensed, with agriculture accounting for the largest portion of the planned investments followed by manufacturing and financial services.

"The election activity that is going on has been peaceful so far and we are glad this is reassuring investors and we are certain it will be calm to the end and this will deepen their confidence in our economy," said Ephraim Kamuntu, junior finance minister.

The east African nation will hold presidential and parliamentary elections on February 18 and the incumbent, President Yoweri Museveni, is facing a stiff challenge from Kizza Besigye, the candidate of a four-party opposition coalition.

Some 53 percent of all planned projects licensed in 2010 are owned by Ugandans while India emerged as the leading source of foreign investment, bringing in $173 million, followed by the United Kingdom, Netherlands, China and Kenya.

Kigozi said foreign direct investment in the country's budding oil sector had been excluded from 2010's investment statistics because promoting the non-oil sector was crucial to the economy.

Government to brand cattle as north gets Shs123b
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By Mercy Nalugo (email the author)
Posted Friday, January 7 2011 at 00:00
The government yesterday allotted Shs123 billion meant for the Peace, Recovery and Development Plan for Northern Uganda (PRDP).

Addressing journalists in Kampala yesterday, the Permanent Secretary in the Prime Minister’s Office, Mr Pius Bigirimaana, said Shs90 billion would be given to 40 districts in eastern and northern Uganda while Shs3.6b would benefit municipalities.

“Shs 6.2 billion will go to the Uganda Police Force, Shs1.3 bilion to the Uganda Prisons Services and Shs800m to the Amnesty Commission,” Mr Bigirimaana said.

He said Shs15 billion is meant for food production, ploughing, small dams’ construction and cattle branding while Shs2b is for the Karamoja development institutional support.

A total of Shs2.7 billion would be allocated to the northern Uganda monitoring and coordination programme while Shs1.6 billion will be used for purchasing ox-ploughs, oxen and heifers in the process of settling the people there.

The PRDP is funded by the donors and the government to help northern Uganda recover after two decades of war.

Karamoja gains
Mr Bigirimaana said the government would spend Shs2.6 billion on restocking Karamoja while 1.3 million cattle would be branded to guard against theft.

“Branding of the animals using bolus chips has commenced and so far over 4,000 cattle have been branded. Also 1,500 youth cadres have been recruited and trained to guard kraals, communities and urban centres.

“There is also increased police presence with 4,927 personnel and an additional 5,000 probation police constables and 500 cadets are currently undergoing training,” he said.

Investments to create 150,000 jobs
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By Barbara Among

A total of 149,659 jobs will be created from projects licenced by the Uganda Investment Authority last year.

A total of 323 projects were registered, with $1.7b injected. They are expected to create the huge number of jobs, according to the state minister for finance and planning, Ephraim Kamuntu.

Kamuntu was speaking at the launch of the Uganda investment report for 2010.

This implies that there was a 3% rise in planned investment and a 36% increment in planned jobs compared to 2009, where planned investment and employment were estimated at $1.6b and 70,289 respectively.

The minister attributed this to the efforts of the authority, which came into existence in 1991.

Manufacturing (119 projects) financial services (63 projects) and agriculture (50 project) took centre stage, accounting for 20%, 18% and 40% of the planned investments respectively.

For the fourth year running, Uganda tops the list of investors with 143 projects, with planned investments of $1.1b. This created 130,004 jobs.

Second to Uganda was India with 47 projects, worth $173m and China with 33 projects worth $65m.

The UK had 13 projects licenced last year worth $77m and created 970 jobs.

UIA executive director Maggie Kigozi said the authority awarded 650 companies concessions to explore in the different mining areas. Uganda has over 100 minerals, she said.
“Once these 650 companies are licensed and start operations, and given rising interest in the mining sector, the Government is projecting higher foreign direct investment in 2011,” said Kigozi.

Kigozi said planned investments for 2011 is $3b and foreign direct investments at $1b.

The authority hopes to meet the target by selling Uganda’s potential at several conferences.

Kigozi announced that Uganda would host the East African Petroleum Conference next month. This month, a delegation of authority officials is expected to travel to India for the Gujarat Summit to sell Uganda’s investment potentials.

In March, there will be a COMESA Investment Conference in Dubai and the authority is inviting the business community to participate.

Commenting on a recent a report by UNDP on productivity which portrayed Ugandans as less productive than Kenyans and Tanzanians, Kamuntu said that UIA, Bank of Uganda, and Uganda Bureau of Statistics revealed that 96.6% of the workers in 1,000 companies surveyed are Ugandans.

He said the survey found that although Uganda has the most educated people in the region, they lack the technical industrial experience.

Meanwhile, Kamuntu yesterday assured investors in the country that the February elections would not affect the economic and political stability in the country.

Karamoja cattle to be branded
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Cows drinking water from a newly-constructed trough in Nakapiripirit district
By Anne Mugisa

THE Government has started inserting electronic chips into Karamoja cattle to stem cattle rustling, the permanent secretary in the Prime Minister’s office, Pius Bigirimana, has said.

The cattle will be tracked down if they are stolen and anybody attempting to sell them will have to produce proof of ownership.

A total of 4,000 out of the estimated 1,200,000 head of cattle in Karamoja have been branded in the exercise that started recently, Bigirimana said.

He added that the programme, which was initially for 100 cattle, had expanded to 300 cattle being branded daily.

Bigirimana did not say how much the exercise would cost, but said it was funded by the Government.

“I cannot put a figure to it. It is an ongoing exercise. When we achieve our target, we will stop,” Bigirimana said.

He was addressing journalists at the Prime Minister’s office yesterday.

According to Bigirimana, the exercise is part of the Karamoja Livelihood Programme, which covers agricultural production, support for local governments and peace building in the region.

The programme covers the districts of Kaabong, Abim, Kotido, Moroto, Nakapiripirit, Amudat and Napak.

Bigirimana added that at least 1,500 youth had been trained to guard kraals, communities and urban centres.

He said 4,000 Police personnel had been deployed in the region and an additional 5,000 were being trained for deployment.

Bigirimana observed that agricultural production had increased. He said during the last financial year, through the tractor hire scheme, 2,312 acres of land were opened up to farming, while 6,000 acres had been tilled this year.

Bigirimana added that parish dams were being constructed in Moroto and Napak districts. The construction of low cost houses (modern manyatas) in Nakapiripirit and Napak had also begun.

Mining can end Karamoja woes
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By David Ssempijja

THE Government should improve the mining sector in Karamoja to accelerate the area’s development, civil society organisations have advised.

Isaac Kabongo, the executive director of the Ecological Christian Organisation, said the Karamoja region was endowed with high-value mineral deposits, but mining was done crudely, hence not benefitting the community economically.

“If we want to fast-track development in Karamoja, we need to support communities involved in artisanal and small-scale mining using crude and hazardous methods,” he said in an interview.

Kabongo said it was sad that Karamoja was among the most impoverished regions in Uganda, yet it has huge amounts of gold, gemstones, limestone and marble.

Foreign and local companies are prospecting for large mineral deposits throughout Karamoja.
Karamoja has a population of about 1.1 million people, with the majority of them involved in agro-pastoralism or purely pastoralism.

An estimated 40% of the Karimojong are engaged in rudimentary artisanal mining.

This calls for support to enanble them buy modern mining tools, protective gears as well as sensitising them about the best mining methods, which do not endager their lives.
Kabongo observed that the miners were susceptible to diseases because they mine with bare hands.

To maximise benefits from mining in the region, the Government should also facilitate investors to establish mineral processing plants to provide employment and market for the minerals.

However, as challenges continue to hit the Karamoja mining sector, the Karamoja Integrated Disarmament and Development Programme under the Prime Minister’s office, highlights mineral development among the key sectors of focus in the region’s five-year development plan effected last year.

Karamoja was not surveyed during the sh9.2b national airborne geophysical surveys done in 2008 by Fugro, a South African firm, with the firm citing insecurity.

The survey produced a mineral assessment map of the country, showing which areas were rich with what minerals and and their quantities.

The results are used by the Government to plan for the sector. However, the surveys covered 80% of the country, with the remaining 20% representing Karamoja.

Information on mineral in Karamoja is of the 1960s. It is only private firms that have bits of new data on mineral developments in the region, whose accuracy is doubtable.

cannot be ascertained,” according to the country advisor of the Green Support Fund, Charles Kabiswa.
In such a situation, there is a likelihood that private firms manipulate such data to their advantage.

cannot be ruled out, neither are local land holding communities or individuals immune from such manipulations to their disadvantage.

The non-state stakeholders in development therefore, envisage a strong need to address these inequalities in the current legal framework, making them more supportive, easier to access and beneficial for artisanal and small scale miners.


Sugar output up by 7,800 tonnes
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By Samuel Balagadde

SUGAR production by the three major firms has go up, according to the Uganda Sugarcane Technology Association.

Wilberforce Mubiru, a manager at the association, said 263,190 tonnes were recorded by November last year, up from 255,327 produced in the same period in 2009.
This was a 7,863 tonne rise in output.

For the first time in three years, the factory price of sugar remained at sh2,066 a kilo during the festive season.

Mubiru said sugar production meets the local demand, adding that the increment in retail prices was speculative as dealers always anticipate low output during festive periods.

“There was no reduction in sugar manufacturing because we wanted to satisfy our 98% market share,” he explained.

New technology to harvest Mukene unveiled
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Uganda gets very little mukene because of using poor tecnology
By John Kasozi

UGANDA fishermen will soon start harvesting offshore silverfish, commonly known as mukene, using a new technology (catamaran) to increase their catch.

Dr. John Balirwa, the director of the National Fisheries Resources Research Institute (NaFIRRI), said the fisheries department would introduce and train fishermen on how to use the technology to harvest offshore silverfish as part of the sector development.

“The trials of the technology are being conducted at Gerenge landing site near Entebbe. The success of these trials might transform silverfish harvesting,” he said.

The technology uses a lift net spread over a wide area, which is pulled by paired-boats (catamaran).

The project is funded by Food and Agriculture Organisation (FAO).

“Fishermen are using large out-board engines boats to go off-shore to catch mukene. Catamarans are recommended because they are more stable and have relatively higher catches than the other type of boats,” Balirwa added.

He added that Uganadan fishermen fish along Lake Victoria shores unline their Tanzanian counterparts, who fish offshore.

They need to adopt the technology,” he observed, adding that this threatens the sustainability of the industry.

Balirwa noted that the Uganda poultry industry was growing faster, leading to an increase in demand for mukene.

“Out of 100kg of poultry feeds, dry mukene constitutes 20kg, which is about 45kg when it is wet. For the poultry starter feeds, it is about 40kg of dry mukene.

He said the consumption of mukene was increasing because people have understood its nutritional value. Fish provides 50% of protein diet for the Ugandan population. Fish contains anti-cholesterol known to reduce heart diseases.

In St. Balikuddembe (Owino) Market one kilogramme of human and poultry mukene is at sh4,000 and sh2,400 respectively.

“Mukene is now exported to Malawi, Zambia and Zimbabwe.

“But the demand for it doesn’t correlate with the fishing techniques. So there is need to embrace the catamaran technology,” Balirwa advised.

However, an increase in fishing pressure, targeting mukene due to decline of Nile perch could have adverse effects on the stocks if not controlled.

There was a three-fold increase of silver fish bio-mass in Lake Victoria from 0.49 to 1.48 million metric tonnes bewteen August 2005 to February 2008, according to hydro-acoustic surveys.

The annual catch assessment survey estimates for mukene for 2008 indicate that Uganda caught 85,824 tonnes, Kenya 75,046 and Tanzania 252,483. Based on two surveys for February and December 2008, the total catch was 413, 353 tonnes. There was no catch assessment survey in 2009.

The annual estimates of 2010 mukene catch were; Kenya 51,000 tonnes, Tanzania 295,428 and Uganda 69, 756, totalling 416,172 tonnes. The hydro acoustic surveys were conducted in February-March and also in August-September for 2008, 2009 and in March for 2010.

The estimated mean bio-mass of mukene in Uganda waters in Lake Victoria in February 2008 was about 712,707 tonnes, but reduced to 313,677 in August.

February 2009 it was 456, 122 and August 506, 365 and March 2010 it was 411, 848 MT.

“The recommended harvesting time for silver fish is six to eight months, while tilapia is from 18 months to three years. For the Nile perch is five years. The Nile perch and Tilapia cannot live more than 12 and four years respectively,” said Balirwa.

Mukene stock although very productive and currently contributing over 60% of fish biomass in Lake Victoria, its fishery is very much affected by environmental conditions in the lake.

Increase in high algae productivity due to increase in nutrient loading have an advantage to Mukene as they are pelagic and feed lower in the food chain and thus not affected by low oxygen levels in the water and has a lot of food, the microscopic animals (zooplanktons) which feed direct on the algae (microscopic plants).

The other advantage which moderates the stock sizes from serious decline is the fishing method which cannot be operated during full moon and thus control the fishing days per month and limit the overall effort in a year.

Dr. Justus. Rutaisire, the head of aquaculture research at NaFIRRI noted that Uganda has not reached the level of farming Mukene. “There is a lot of it in the lake.”

According to Oliva Mkumbo NaFIRRI research scientist, Mukene are short lived fish, grow very fast but are also very delicate to handle. “Being pelagic and have schooling behavior, you require a large volume of water to be able to keep, breed and grow such fish.”

Its size and amount required to make a kilogramme, may not be that cost effective in fish farming in relation to your inputs and the cost of that fish per kg. Fish farming considers the robustness of a fish species, and its value in the market in relation to the cost of production.

The sustainability of any fishery calls for proper management of the resources. At present, the Mukene stocks seem to be healthy and the fishery capable of expansion into open waters but this should be monitored carefully because there are some areas of concern.

Mukene contributes almost 70% of the fish landed from Lake Victoria, but in terms of its value, it is less than 30% of the earnings from fishery. There is need to ensure proper handling, processing of the catch, packaging and value addition to make better use of that resource for poverty alleviation amongst fishing communities and increase the socio-economic benefits to the Lake Basin region.

Govt raises subsidies to power companies
Business
Written by Simon Musasizi
Wednesday, 05 January 2011 18:45
Government will, this year, almost double the amount of subsidies to the private power companies to deal with the growing demand for electricity.

Umeme Ltd, Uganda Electricity Transmission Company Ltd (UETCL) and Eskom (U) Ltd will receive Shs 488bn from government to maintain the current electricity tariffs. This is far above the Shs 280bn they received last year, the highest amount of subsidy to a single sector on record.

The increment follows an application from the companies to have their tariffs for 2011 reviewed citing high operation costs resulting from the depreciation of the shilling against the dollar amidst the increasing costs of diesel at the international market; it is projected to stay above $85 per barrel this year. Umeme recently failed to convince a public gathering to allow it hike its tariffs.

“Government has continued to inject a significant amount of subsidies in the electricity sector in order to keep the tariffs where they are now, a situation that is unsustainable for a much longer period,” Simon D’Ujanga, the state minister for Energy said.

“It is desirable that the sector becomes self financing with limited reliance on the national treasury.”
However, this cannot be achieved when the power companies still operate inefficiently with the cost of generation still high. Uganda has one of the most expensive fees on electricity in East Africa, a factor that makes it difficult to attract investors.

Domestic consumers pay Shs 385.60 per kilowatt per hour of electricity, while commercial consumers pay Shs 292.60 per unit and medium industrial consumers Shs 333.20 per unit. Large industrial consumers pay Shs 184.80 per unit.

Eskom (U) Ltd hopes to generate power at Shs 36,744 per megawatt per hour –with bulk supply tariff of Shs 330.61 per kilowatt hour, Shs 292.57 per kilowatt hour, and Shs 244.23 per kilowatt hour at peak, shoulder, and off-peak respectively.

“We appeal to all utilities to embark on measures that can improve their operating efficiency in order to achieve a financially sustainable sector in the long run,” D’Ujanga says.

Over the years, Uganda has suffered from power shortages exacerbated in recent times by significant reductions of water levels on Lake Victoria. The water release for 2011 is projected to remain at 800 cumecs, translating into average generation of 138.6MW from Owen Falls Dam.

The introduction of thermal plants eased the load shedding schedule, although prices remained high. The thermal plants include a 50MW project at Lugogo licensed in 2005, another 50MW at Mutundwe, and 50MW at Namanve and 18MW in Tororo.

Yet the demand for electricity continues to grow. According to Benon Mutambi, the acting CEO at the Electricity Regulatory Authority (ERA), demand growth for 2011 is projected at 2.5 percent quarter on quarter.

However, government is confident that with the completion of Bujagali power dam, the power demand will be addressed and the costs of subsidizing the sector will start going down.

According to D’Ujanga, the first 50MW of Bujagali hydropower dam is set to be opened late this year reducing current costs by almost one third.

At the same time, a number of independent power producers licensed by ERA are about to be commissioned. The 18MW Mpanga plant and the 6.5MW Ishasha plant are scheduled for commissioning early this year while the 9MW Buseruka plant will be commissioned mid this year.

Government has also widened its options beyond hydropower. With the Renewable Energy Policy formulated in 2007, D’Ujanga says, government has revised the feed-in tariffs to attract more renewable energy, especially from sugar companies.

“Learning from our experience of 2005, we no longer want to rely on only hydro generation. We are trying to put in place measures that will facilitate diversification of energy resources,” he notes.

D’Ujanga further reveals that government has also realised that the private sector cannot provide all the electricity needs for the country on its own. In this regard, government has reconsidered to partner with the private sector to develop some of the generation facilities that are purely public projects.

“We have now strengthened the Uganda Electricity Generation Company Ltd to assist government achieve this objective,” he says.

UEGCL is developing generation facilities such as Muzizi. Umeme has also increased its investment in the sector –with its capital investments expected to amount to $84,555 million in 2011 compared to $65,383 million in 2010.

This has seen its collection rates improve greatly to more than 96 percent –with a notable improvement in the distribution losses in 2010 reducing from an average of 35 percent in 2009 to an average of 30 percent in 2010.

With that, government has set the effective distribution loss factor target for Umeme at 27.2 percent while effective collection efficiency factor has been set at 95.6 percent for 2011.

The reconnection fee for domestic consumers has been raised from Shs 3,600 to Shs 11,800 while that of three-phase consumers has been raised from Shs 11,800 to Shs 25,200.

150,000 jobs created in 2010 - investment body
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Prof Kamuntu and Dr Kigozi, while releasing the 2010 report in Kampala yesterday. PHOTO BY YUSUF MUZIRANSA.

By Faridah Kulabako (email the author)
Posted Friday, January 7 2011 at 00:00
A few more Ugandans are expected to find jobs following a 36 per cent increase in projects licensed by the Uganda Investment Authority last year.

According to the annual investment report released yesterday, UIA licensed 323 projects between January and December, with a total planned investment of about $1.7 billion and 149,659 planned jobs.

In 2009, UIA licensed projects with planned investments estimated at $1.6 billion while employment was estimated at 70,289.

UIA also registered a 3 per cent increment in investments during the period. With over 400,000 graduates joining the labour market each year, only about 80,000 are absorbed in both government and the private sector.

Speaking at the release of the report, the minister in Charge of Planning Prof Ephraim Kamuntu attributed the growth in investments to the country’s good investment climate resulting from macro economic stability, economic growth and political stability.

He said investors should not worry about the election period as business will continue as usual even after the elections expected to be held on February 18.

Elections and investment
Investors usually hold back investments whenever there are presidential elections for fear of business disruptions especially in Africa where presidential elections have often turned out to be violent like the 2007 post election violence in Kenya, Zimbabwe and currently in Ivory Coast.

For the sixth time, Ugandans were the largest investors in 2010 with 143 projects estimated at $1.1 billion of planned investments.

India with 47 projects worth $173 million and China with 33 projects estimated at $65 million came second and third respectively in terms of projects licensed for new investment.

The United Kingdom investments were worth $76 million. The Netherlands, China and Kenya registered significant investments in the manufacturing, construction, transport and communications sectors.

Greater 2011 growth
Dr Maggie Kigozi, the UIA executive director; projects greater foreign investments of about $1 billion in Foreign Direct Investments and $3 billion in planned investments in 2011 given the trend the country is experiencing with the rising demand for investment in petroleum, mining and agricultural industries.

Western Uganda tourism boosted by Shs1b resort
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By Walter Wafula (email the author)
Posted Thursday, December 23 2010 at 00:00
Tourism in western Uganda is expected to receive a boost from the development of a new Island resort on Lake Bunyonyi in Kabale district.

Mr Jim Bitwire, a director of Bunyonyi Wildlife Island said up to Shs1 billion will be invested in Kyahugye Island Resort to further tourism activities in the region.

“We are looking at Lake Bunyonyi as the hub of tourism in this country. So, we are trying to create something unique for the region,” Mr Bitwire said in an interview with Daily Monitor.

Lake Bunyonyi, the second deepest lake in the world lies on a strategic location of the tourist circuit encompassing the mountain gorilla region of Uganda, and Rwanda.

The Lake is also famous for bird watching. So far, Shs600 million has been invested in the Island resort that is expected to generate hundreds of jobs and incomes for the local people and businesses in the western region.

The first phase of the project with up to 49 rooms, and cottages will be launched on December 26 while completion of the project is planned for mid next year.

To make the Island appealing to tourists, the company plans to translocate a number of animals from Lake Mburo National Park, Queen Elizabeth and Bwindi Impenetrable National Park.

The translocation of animals and birds from other national parks is also expected to help schools in Kabale cut back their tourism budgets to other areas as the resort positions its self as a wildlife research and education centre.

“The Island will provide a place where students and people can carry out research with ease,” Mr Bitwire said.

The investment comes at a time when Uganda’s tourism industry is registering improved growth in the range of 6-8 per cent per annum.

Tourists number increased by four times in the last ten years, from less than 200,000 in 1998 to 843,864 in 2008.

The numbers, however retreated to 817,000 last year due to the global recession that hit the airline and tourism industries. However, foreign exchange from tourism rose to $600, according to statistics compiled by the Uganda Tourism Board (UTB).

Work starts on 10,000km of roads
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Tarmarcking of some roads is already in progress
By Conan Businge and Abou Kisige

Mbarara-Kikagati (75km)
Nyakahita-Fortportal (208km)
Gulu-Nimule (104km)
Mpigi-Sembabule (135km)
Vurra-Oraba (92km)
Malaba-Bugiri (82km)
Mbarara-Katuna (154km)
Mukono-Kayunga (94km)
Jinja-Kamuli (69km)
Mukono-Katosi(72km)
Moroto-Nakapiripirit (90km)
Ntungamo-Kakitumba(37km)
Ishaka-Kagamba (72km)
Kapchorwa-Suam (77km)
Rukungiri-Ishasha (104 km)
Kaiso-Tonya-Hoima (85km)
Soroti-Mbale-Tororo (140km)

WAILS pierce a banana plantation as three coffins, two for adults and one for a child lie on mats, surrounded by hundreds of mourners. Minutes later, they are lowered into graves in Bungo village, Mpigi.

The three died in an accident alongside four other people, when their vehicle rammed into a train at a railway crossing on Tirinyi Road, between Iganga and Mbale.

The deceased are victims of a growing tragedy. According to Police records, 40,556 people have died in motor accidents from 2000 to 2009.

However, the deaths arising from accidents are expected to go down when the country’s road sector is revamped.

According to the Uganda National Roads Authority (UNRA), 10,000km of roads are to be constructed this year at a cost of sh800b.

The road construction project follows the Government’s take over of district roads in 2009. The roads were handed over to UNRA as part of the road sector reform.

The construction, scheduled to take three years, will have 60 roads rehabilitated and upgraded, according to UNRA’s publicist, Dan Alinange.

Construction has already started on some roads like Kampala-Masaka, Kawempe-Kafu-Soroti-Lira, Kabale-Kisoro, Kampala-Gayaza-Ziroobwe, Matugga-Semuto-Kapeeka, Masaka-Mbarara, Kampala-Mityana, Fort Portal-Bundibugyo and Kampala-Jinja.

The European Union ambassador, Vincent De Visscher, says when more roads are constructed, road carnage will reduce. The EU is financing close to half of the road construction costs.

But Alinange added: “Some of the roads will be widened which will result in the displacement of people and property.” He said UNRA would compensate the owners.

However, during a recent road tour, residents told Saturday Vision that although work on some roads was about to start, they had not yet been compensated. Residents in Mityana district, where UNRA has started working on the Kampala-Mityana (57km) road, had mixed reactions.

“We want the road, but we do not know how our property will be valued and how much we shall be paid,” Robert Mubiru.

Mohamed Kateregga of Bbosa village in Mpigi said all his land would be taken up by Mpigi-Sembabule road (135km). “I have lived here for more than 20 years. Much as we are going to be paid, I find it hard to believe that I will be kicked off my land. It means a fresh start at 55 years.”

Another resident, Charles Lwanga, in Nabwewenga village, on the Kampala-Mbarara highway, says much as the construction of 124km road initially affected their businesses, the new road has advantages. “As the road was being worked on, traders lost money because residents refused to buy dust-coated goods. But now, we can easily transport our merchandise.”

“This is a golden opportunity for us to have our road worked on. It used to be terrible, but it has greatly improved much as construction is still on going,” says Moses Mulindwa, a resident of Buloba on the Mityana-Mubende road.

Companies that have won the tenders to work on the roads include Emtee constructors, BMK (U) Ltd, Prime contractors and Multiplex.

Meanwhile, 35 new bridges will also be constructed, while 30 others will be rehabilitated. Detailed designs for the bridges were completed in November 2009 and civil works contracts were awarded in August 2010.

UNRA also says a new bridge will be built to replace the Nalubaale Bridge in Jinja. Another bridge will be constructed at Awoja and on other rivers in northern and north western Uganda.

Construction of the new bridge in Jinja is expected to commence in August at a cost of $100m (about sh200b), and will last four years. UNRA has secured all the land required to accommodate the bridge and feeder roads.

Meanwhile, a new bridge is already being constructed over River Aswa on the Gulu-Kitgum highway to replace the old one. Works on the bridge started last year in May and are expected to end by June this year.

Uganda has a total of 21,000km of national roads, 22,500km of district roads, 4,800km of urban roads and 35,000km of community access roads..

Transport minister calls for long-term railway master plan
BY IDDA MUSHI
8th January 2011
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Minister for Transport Omary Nundu
Minister for Transport Omary Nundu has directed railway experts in his ministry to collaborate with other institutions to prepare a Tanzania Railway Master Plan, insisting that its preparation must envisage long-term plans.
The directive was given by the minister when touring Morogoro region recently where he inspected the central railway line and observed the construction of river banks from Kilosa station in Morogoro to Gulwe station in Mpwapwa District, Dodoma Region.
The minister also visited a railway workshop in Morogoro and talked to railway staff here.
Nundu said a feasibility study for the Dar es Salaam-Isaka railway to Rwanda and Burundi has been completed.
“And because the preparation for the construction of the railway is going on the ministry will carry out a feasibility study to improve Isaka-Mwanza and Tabora-Kigoma railway and their branches,” said Nundu.
He said the study will consider all railway branches on the Tabora-Mpanda and Manyoni-Singida stretches because they are the most important in serving the people in the areas.
“This is an order and this must be done as soon as possible in the 2011/2012 financial year,” said Nundu.
He called on the experts to work collaboratively with other institutions to carry out a feasibility study for a railway project that starts from Tanga port at Mwambani to–Arusha-Musoma-Kampala up to South Sudan.
“It is important as we are now finalizing the construction of Mwambani port in Tanga,” he said.
On Mkondoa river floods which destroyed the central railway line stretch from Kilosa to Mpwapwa in December 2009, the minister said his ministry will work with other stakeholders to improve the railway infrastructure.
“We have observed the problem. We shall involve other stakeholders to rebuild eight dams around Mkondoa River in order to control the water current and later on we shall use the water for our national economic growth in areas of agriculture, livestock keeping and fishing,” said Nundu.

East Africa poised to tap a reborn south Sudan
January 7 2011

NAIROBI/KAMPALA, (Reuters) – East African nations could reap trade and investment opportunities worth billions of dollars to help develop south Sudan if it splits from the north, but they will have to compete with bigger rivals like China to do so.

Southerners are expected to vote overwhelmingly in favour of separation in a referendum next week, a vote that follows decades of civil war with the north and, the south says, economic and political marginalisation.

While companies in neighbouring Kenya and Uganda, from taxi firms to Kenya’s largest lender by assets, Kenya Commercial Bank (KCB), are already tapping the boundless opportunities in Juba, the south’s capital, others are primed to join in.

“We have an advantage but that does not mean we cannot be outcompeted,” said James Shikwati, executive director of the Inter Region Economic Network think-tank.

“Powers such as China, Japan, India are also ready. Whatever we manufacture, they can land here at almost zero cost.”

Kenya’s exports to south Sudan almost doubled between 2005 and 2009, rising to 12.8 billion shillings ($157.7 million) from 6.8 billion after south Sudan rebels signed a peace agreement with Khartoum’s administration that paved the way for Sunday’s vote.

South Sudan is neighbouring Uganda’s main export market, importing goods worth $184.6 million from east Africa’s second largest economy in 2009, according to the Uganda Exports Promotions Board.

“For the last couple of years south Sudan has been the largest driving force for our manufacturing sector because its demand for our products has been remarkable,” said Maggie Kigozi, executive director of the Uganda Investment Authority.

Uganda is establishing a 3.0 billion shillings ($1.29 million) industrial park in Gulu for manufacturers targetting the south Sudan market, she said. Once a marginalised town at the heart of northern Uganda’s own civil war, Gulu has boomed as a trading post linking Kampala and Juba.

Toyota Uganda plans an engineering and repair workshop in Gulu to tap the neighbouring market, where Toyota’s 4×4 Landcruiser rules the dirt tracks.

RISK OF RENEWED
CONFLICT
The risk for East African nations is what happens if the vote ignites a new conflict that might draw in regional economies, in which case neighbours could expect a sharp downturn in demand for their products as well as a torrent of refugees.

A return to war might cost neighbouring countries 34 percent of their total annual GDP over a 10-year period and set back Kenya and Ethiopia $1 billion annually, according to a report by Frontier Economics.

“If the referendum is conducted well and Khartoum receives the outcome peacefully and south Sudan is born as a new state, we’re almost certain our annual exports to this new country will double, our trade with south Sudan will grow tremendously,” said Florence Katta, head of the Uganda Exports Promotion Board.

“If the vote favours secession and Khartoum starts a war, our exports will plummet.”

Kenya’s KCB has plans to double its branches in South Sudan to 30 by 2015 and stands to lose its investment if war erupts.

“It’s virgin territory … It has got the potential to be the biggest economy in the region in the next 10-20 years,” KCB chief Martin Oduor-Otieno said in a Reuters interview.

“Everybody is holding their breath. The last thing anyone wants is another Somalia flaring in the region. If that happens it will be extremely difficult to stabilise the south,” said James Shikwati. “It’s about regional security and stability.”

LAMU CORRIDOR

Kenya is positioned to pitch itself as a logistics hub and transport conduit for an independent but landlocked south Sudan.

The region is rich in oil, the main bone of contention over the demarcation of borders, which it pipes north to Port Sudan.

Analysts believe the new state would seek to export its oil to the Indian Ocean coast via a yet-to-be-built corridor through Kenya to sidestep Khartoum.
Hungry for the south’s resources, countries such as China and Japan will happily finance such an alternative exit route, analysts say.

Kenya is seeking investors to fund its $22 billion share of a planned corridor connecting Ethiopia and Sudan to the Kenyan coast with railways, roads, telecommunications cables and a 1,400 km pipeline.

Toyota Tsusho, the investment wing of the carmaker, is one of the companies interested in the $1.5 billion pipeline, according to an International Crisis Group (ICG) report.

SOME RESENTMENT

There is some resentment towards Kenyan and Ugandan business players investing in south Sudan, however, with some southerners perceiving them as hawkish and exploitative. They say neighbouring countries benefitted from the aid funding that flowed through their economies when they sheltered refugees, and should leave the country to its owners.

2010 was the year of Internet revolution
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By Mustafa Ziraba (email the author)
Posted Sunday, January 9 2011 at 00:00
There was a time where you had to pay through the nose for Internet. First you paid UTL for the landline usage, then paid the Internet Service Provider (ISP) for the service. In 2010, Orange Uganda and MTN launched their 3G networks that made Internet blazing fast, a milestone many current users of Internet in this country might not appreciate. But for those folks who had double bills to UTL and the ISP, this whole Internet “revolution” is a godsend.

More and more people are using the Internet, from business to media downloads and social outlets such as Facebook and Twitter. Parallel to this Internet usage in Uganda is the sudden availability of USB Internet dongles. A dongle lets you take the Internet with you wherever you go. Simply plug it in any modern computer and you’re free to surf.

A dongle allows you to surf the net no matter where you are, as long as you’re within reach of a mobile signal, you’ll be able to get online. And Internet prices are getting cheaper all the time. You can now get online with a dongle for as little as Shs25,000 a month for 500MB of data. Unless you are a download buff or very media-centric, 500MB is quite sufficient.

However, you should make sure to check the coverage of your chosen Internet provider before signing up as dongle coverage can be patchy in some rural areas. This check is very important with providers such as Broadband who use a different technology, but with the telecoms, it is as relevant as you getting your mobile phone signal in the area of concern.

The rise of Internet usage in Uganda could virtually and wholly be attributed to the arrival of the Seacom cable. It started operations in July 2009, but the fruits were born in 2010; well, to the common man like you and I.

Previously, we were all relying entirely on expensive and slower satellite connections, which is why the speed jump is so significant. From a personal experience, it took me two to three hours to download my first MP3 song of about 2MB. This was in the mid 90s, where you had to pay for every minute you were connected, but now I could to the same in mere seconds and pay less than Shs50.

With use of their marketing machinery, Orange and MTN have managed to get Internet into the hands of people who didn’t even know they needed it. Nowadays, if you’re not on Facebook, you’re presumed dead by your peers, at least among teens and “tweens”. Many modern phones, which without an Internet connection are half the time irrelevant, are now very useful as you can easily connect to the Internet with them, read emails, do Facebook and Twitter updates, chat etc. The Seacom cable did reduce Internet costs up to 80 per cent.

It may take a while for the benefits to reach fellow comrades, particularly those who live in remote rural areas, but 2010 simply marked the beginning.

EU envoy hails govt on peace in northern Uganda
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By Francis Emorut

THE outgoing European Union (EU) Ambassador, Vincent De Visscher, has commended the Government for restoring peace to northern Uganda.

“We thank the Government for ensuring the return of peace in northern Uganda. Over 1,200 formerly displaced persons have returned home. We are happy about that achievement,” Visscher told guests, who included heads of diplomatic missions in Uganda.

He was speaking at his farewell party at Kampala Serena Hotel on Thursday.

For 20 years, the people in northern Uganda faced instability caused by the Lord’s Resistance Army rebels. Over 2,000 people were killed and 2,000 displaced.

De Visscher, who is also the head of the European Union delegation, hailed the Government for taking a leading role in regional integration.

The ambassador, who has been in the country for four years, has retired from diplomatic service.

The state minister for works, John Byabagambi, who represented the foreign affairs minister, Sam Kutesa, thanked the EU for supporting the Government in the road construction and water sectors.

He also commended De Visscher for risking his life to visit Karamoja during the disarmament exercise.

Byabagambi assured diplomats that the Government was committed to ensuring free and fair elections.

Presidential and parliamentary elections will be held on February 18. Eight candidates are contesting for the top job in the country.


We have come a long way
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Hilton Hotel still under construction in Nakasero. Such developments have been common in the last 10 years
By Paul Busharizi

THEY say we tend to overestimate what we can achieve in a year and underestimate what we can achieve in 10 years.We are into the new decade and a cursory glance to where we were 10 years ago makes for interesting reading.

In the last 10 years, the size of the economy has doubled.

According to official statistics, the size of the economy, as measured by the gross domestic product (GDP), rose to sh20.6 trillion in 2009/10 from sh10.5 trillion in 2000/01.

The naysayers will have their doubts about these figures and in a way, their scepticism will be warranted because the same figures show that our individual share of this economy only grew by less than 50% during the same period.

This variance can be accounted for by the fact that over the last 10 years, our population has grown. Assuming a 3.1% annual growth over the year, Uganda’s population would be up more than a third today from a decade ago.

But also during the period, the structure of the economy continued to change. The agricultural sector share of the economy plummeted to less than 15% compared to just over 40% in 1999/2000. The share of services and industry grew to fill the hole.

This should come as no surprise as our agricultural sector continues to remain largely subsistent, and even where there are attempts at commercialisation, very little value is added beyond the basic post harvest processing.

Given the economic history of the world, it is a natural progression for economies to shift away from agriculture to industry, and eventually to services. A transformation of the economy is under way.

For instance, there were 30 million farmers in the US after the Second World War, a figure that has fallen to under a million currently as people have concentrated in the urban areas, where they are more productive. Agriculture has become more large-scale and mechanised.

The worry in our situation is that the bulk of our people live in the rural areas, and as the statistics suggest, are not benefiting as much from the economic growth gains of the last 10 years.

It is no surprise that services have risen to pole position in our economy. There has been an explosion of services in the telecommunication and financial industries.

Over the last decade, we have seen teledensity – the number of people with access to telephone services as percentage of the population – jumping to 30% , up from under 10% at the beginning of the decade.

The importance of communication can not be underestimated in driving economic growth.

Businessmen have now cut out the cost of unnecessary trips, and have been able to respond quicker to market demands. With the introduction of money transfer services, they have also cut down the cost and risk of transferring money.

The increase in bank branches to 381 currently, from 167 in 2001 is the most manifest sign of the increase in financial services over the last 10 years. But the real telling statistic is the increase in deposits and credit to the private sector.

Deposits are up to sh5.2 trillion in December last year from sh697.1b in January 2000, Lending has followed a similar trend, jumping nine-fold to sh5.1 trilling, from sh567b during the same period.

The numbers manufacturing, construction, the hospitality business, electricity and water supply will show an almost similar growth pattern.

In my mind, two things are clear. One, that tremendous growth, while tempered by our population growth, has happened in the last 10 years.

Also interesting to me is that we have achieved this growth despite our low indicators in road and rail coverage, availability of power, under developed financial and commodity markets and other deficiencies.

Looking forward to the coming decade, we are going to have to sustain this growth curve, while also improving the distribution of these benefits around the population.

For starters, the infrastructure deficits need to be narrowed, and the fight against corruption to be intensified – because the leakages in public finance is slowing the distribution of economic gains, concentrating them in the hands of a handful of well positioned and connected individuals.

In addition, we need to, not only nurture new entrepreneurs, but push our existing crop to a higher level, through education and support. You can have all the roads and markets in the world at your feet, but without risk-takers, the benefits will never be enjoyed.

There is a lot that we can criticise in this country – not least of all that the growth of the last decade is being enjoyed disproportionately by an urban elite – but the general trajectory seems to be in the right direction.
All we need to do is to maximise the benefits to the wider population.


Private sector loan growth rises
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A Christex Garments Industry employee operating a stitch-printing machines.
By Ibrahim Kasita

THE private sector is the engine of economic growth, goes the saying. And indeed sustained economic growth reduces poverty though job creation and paying taxes for national progress.

That explains a continued trend of commercial banks extending loans to the private sector, a move that has spurred consumption and investments.

The total stock of the loans disbursed to the private sector crossed the sh5 trillion mark in October, up from sh4.8 trillion recorded in September 2010.

This, according to Bank of Uganda financial indicators, was more than the loans disbursed in November 2009, which stood at sh3.8 trillion.

“The annual and monthly growth rate continued to rise,” the monthly economic and financial indicators for the month of November stated.

“This is likely to auger well for economic activity in the near term, given that credit plays an important role in private consumption and investments.”

The biggest drivers of this growth in credit are trade, commerce, construction, manufacturing, transport, communication and agriculture.

This is reflected by a number of micro, small and medium enterprises, which account for 99% of private businesses.

Statistics also indicated that personal loans share of credit continued to fall due to “decreases in car loans and loans for non-durable consumer goods and services”. Personal loans declined by 2% in October, compared to a decline of 18.8% in September 2010.

“The number of applicants for credit and the value of applications also indicates a high growth rate for demand for credit,” the report observed.

The number of personal loan applicants in October last year increased to 22,154, with a value of sh1.3 trillion. This was more than the April applications, which stood at10,825 and were valued at sh578.18b.

Weak deposits
However, the shillings denominated savings deposits did not grow in October, while that of hard currency denominated savings deposits slightly declined to 2.3% from 2.4% in September.

The shillings time and saving deposit remained at sh2.8 trillion in October as it was in the previous month in 2010.

The stability in time and saving deposit could be mainly due to the low interest rates compared to average lending rates.

The weighted average lending rate, excluding personal loans, rose close to 20% in October, compared to shillings denominated savings deposit, which averaged at 1.5%.

Poor saving culture is bad because it reduces the return on money (no interest) however small the interest paid is.

Increased saving helps small businesses (SMEs) borrow to expand their operations, develop new products and employ more Ugandans.

Every $1 invested in an SME generates an additional $10 in the local community and $1 of SME finance creates three times more jobs.

Firm lines Shs11b for food processing plant
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By Stephen Wandera (email the author)
Posted Monday, January 10 2011 at 00:00
Britinia Allied Industries a consortium of food processing firms has lined up a Shs11 billion for the construction of a fruit juice processing plant in Namanve.

The project expected to create about 1,500 for Ugandans is in its advanced stages and it is expected to boost farmers’ incomes especially those involved in passion fruit, orange, mango and apple farming.

Mr Hasmukh Dawda, the chairman of House of Dawda the Britania industries parent company, told journalists last week that the plant would boost farmers’ production capacity, from which the firm will source its raw materials for juice production.

The plant with a capacity of 30 tonnes of pulp will produce mango, pineapple and passion juice.
Mr Dawda, said: "We have already trained farmers on how to grow quality fruits to keep production in line.

He disclosed that because the firm has experienced supply shortages for passion fruits, management took a decision to suspend the production of Splash passion juice.

Mr K. R Sridharan, the Britannia Allied Industries marketing manager said the firm is also keen on extending to DR Congo and South Sudan.

Cement price expected to drop with new plant
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President Museveni unveils the plaque at a function to commission the new cement plant in Kasese last week. PHOTO BY ISAAC KASAMANI.

By Ismail Musa Ladu (email the author)
Posted Monday, January 10 2011 at 00:00
Cement prices are expected to drop following the commissioning of a new plant by Hima Cement. The plant in Kasese District is expected to boost the construction industry with an expected drop in the price of cement as a result of increased production.

Cement, a major construction material has witnessed a volatile price trend forcing a retail price of 26,500 in the later part of December 2010.

Mr Hussein Mansi, the Larfage chairman, said the Shs280 billion plant will not only increase supply for the local and regional markets, but will also see prices become more competitive, especially if the government continues to lend support to local investors against an influx of cheap imports.

Mr David Njoroge, the general manager of Hima Cement, said with the plant already in operation, the impact of increased production from a previous capacity of 350,000 tonnes a year to 850,000 tonnes is already showing some benefits to Ugandans.

He said: “With a daily average of 500,000 bags, the price of cement has already dropped from a high of about Shs30,000 to about Shs26,000.”

“This is a good start, and as other factors that increase the cost of production get sorted, it will not be long before prices further drop.”

However, despite the increase of cement production, observers say prices must further drop in order to genuinely develop the construction.

Observers say current prices make it hard for a common man to build a house for himself. However, industry players maintain that this is a good start, which will see the cost of cement drop further as prices tagged on the cost of doing business improve.
While opening the plant, President Museveni promised to engage regional leaders on the Common External Tariff, after Mr Mansi cited it as a move that will increase regional competitiveness.

The President, who was upbeat about the number of jobs to be created also, said that by next year the cost of power will have drastically dropped, as the government commits to seeing Bujagali operational by 2012.

“Beginning next year, the cost of power will be more competitive matching that of Asia where it is cheaper.”
He also promised to fix roads and later embark on the railway construction, as he said industrialisation is the way to go.

The new automated plant, according to Hima Cement is environmentally friendly. It internally treats its emission, meaning that there will be no harmful discharge of dust to the environment.

The plant is expected to generate about Shs1 billion as the government revenue.

Karimojong urged to embrace development
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By Olandason Wanyama

RESIDENTS of Nadunget and Rupa sub-counties in Moroto have been asked to embrace investment so as to develop themselves and also leave behind something for the generations to come.

The resident district commissioner, Nahaman Ojwe, made the call in an outreach meeting on Friday at two separate venues.

He was sensitising communities on the implementation of the new National Agricultural Advisory services (NAADS) programme at respective sub-county headquarters.

“The Government has done a lot by building schools and health centres at different levels,” he said.

He added that peace had returned, thanks to the disarmament exercise and the recruitment of the youth into local defence units.

Ojwe explained that the roads had become safer because there were no more ambushes.

“Electricity has also been brought, meaning that industries must follow to solve the unemployment challenges,” he noted.

On poverty among the Karimojong, Ojwe said the Government had earmarked it as the area’s biggest problem.

“We have now brought NAADS for all households to benefit,” he said, amidst cheers.

Ojwe said the re-introduction of the project would help fight poverty.

President Yoweri Museveni last year was in the region to assess the performance of the prosperity-for-all projects.

He, however, was unhappy with the implementers of the project in Karamoja.

Ojwe assured the residents of plans to set up multi-million-shilling investments in Karamoja for community benefit.

He said the National Resistence Movement government would ensure job creation remains a priority on its agenda.

Ojwe appealed to the people to abandon alcoholism, saying that it had enslaved them economically.

He urged residents to work hard to eliminate poverty and improve their well being.

NARO Technology centre opened
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By Esther Mukyala

AN Agricultural technology demonstration centre worth $ 6m has been opened at the National Agricultural Research Organization in Kampala to research into quality fish production.

Speaking at the opening ceremony, fisheries state minister Fred Mukisa said Uganda was likely to experience a shortage of 600,000 tonnes in fish food by 2015.

Mukisa called for a change from subsistence aquaculture to a market and technology driven industry.

The Chinese ambassador to Uganda, Sun Heping, said China was committed to supporting Uganda’s efforts for sustainable development, especially in agriculture.

Since 2007, China has trained over 400 Ugandan agricultural experts.

The centre has over 90 fish ponds and a feedmill.

Kyenjojo farmers get boost
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Mwesige (left) showing guests the solar-dried pineapple chips at the launch
By Hope Mafaranga

FARMERS in Kyarusozi sub-county in Kyenjojo district will start earning more money from their produce after they got solar driers to add value to their products.

The farmers, under the Kyembogo Farmers Association (KYEFA), will start drying pineapples, vegetables and bananas to improve the crops’ market value and shelf life.

Matthias Mwesige, the KYEYA project manager, said farmers were engaged in pineapple, mango, maize, banana and vegetable farming.

“This is a great opportunity for us because we have been selling our pineapples between sh500 to sh1,000, but after drying them we will be earning sh5,000 from the local supermarkets and sh10,000 from the exports,” Mary Tinka, one of the pioneer farmers, said at the launch of the solar driers on Friday.

The driers were donated by World Education Bantwana Initiative, a non-governmental organisation operating in Kyenjojo.

Mwesige said the association and Bantwana had already secured market for the produce and plans were underway to start exporting dried pineapples and bananas.

He said the NGO had also supplied seeds and pineapple suckers to the farmers, adding that the farmers had also been trained in modern farming.

Mwesige said the development would help rural farmers attain socio-economic growth; improve their income and food security.

The group started with 30 members in 1998, but it has grown to 2,000 members.

Predictions for 2011 reflect a rosier and vibrant economy in most sectors
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The 250MW Bujagali Hydro Power project is scheduled to start generating 50MW of power in October promising cheaper and reliable power for Ugandans. File Photo

By Walter Wafula, Faridah Kulabako, Dorothy Nakaweesi, Ismail Musa Ladu and Martin Luther Oketch. (email the author)
Posted Tuesday, January 11 2011 at 00:00
The past few years have seen significant changes in the way companies do business. Challenges such as economic downturns, decreasing revenues, and regulatory uncertainty have sparked fear among many. Now that 2011 is here, Business Power brings you predictions on what the
New Year might have in stock for the business community.

Many company executives will agree that 2010 was a better year in business compared to the previous year due to a slight recovery in the world economy. They, therefore, expect to ride on the gains that were attained to record stronger sales and profits.

However, businesses and economies will continue to feel the pinch of the remains of the global recession that was largely seen off last year. For instance, the Uganda shilling weakened to the highest level against the dollar, the Euro and the British pound, due to challenges in the economic structure of Europe and the United States.

These challenges have affected the cost of doing business and consumption patterns to-date. Yet, the currency crisis is not about to ease to the 2008 levels (1$/Shs1,800) as Business Power reveals.

But the currency market is just one of the key aspects of the economy that will have a significant impact on business operations and consumption patterns by businesses and consumers in 2011.

This is an election year for both Uganda and her major export destination; South Sudan - which conducted its referendum elections on Sunday. Internally, the success or failure of many planned developments and occurrences will largely depend on the way Uganda will conduct and treat results from the upcoming presidential and parliamentary elections come February 18.
Exports in balance
Ms Florence Kata, the chief executive officer of the Uganda Exports Promotion Board (UEPB) told Business Power last week that the result of the South Sudan referendum elections has major implications for Uganda’s growing exports.

“If the referendum goes on well, trade will continue to flow normally but if turns out chaotic then it will throw a curse on our trade,” she said. South Sudan has been Uganda’s leading export market destination for the last two-years. In 2009, Uganda earned up to $184 million from exports to Sudan compared to $172 to Kenya. Uganda largely exports food stuff and merchandise to the Great Lakes region. A peaceful election is expected to result into increased exports following a bumper harvest by Uganda last year.
Infrastructure boom
The call for value addition could pass for a cliché in Uganda. For many businesses, that can only be successfully achieved with sufficient power and a good transport network to key markets like Sudan. This year, a total of 88 Mega Watts (MW) of power will be generated from various hydro power stations in 2011. The 250MW Bujagali Hydro Power project is scheduled to start generating 50MW of power in October this year. However, this will be preceded by the launch of smaller mini hydro power projects including; Mpanga Hydro Electricity Project (18MW) in Kamwenge District, Ishasha (6MW), Buseruka (9MW) and Nyagak (5MW). The power projects are expected to increase Uganda’s total installed electricity capacity from 595MW as of last year, to 875MW by 2012.
Mr Simon D’ujang, the state minister of energy, predicted that the launch of projects like Bujagli will bring down the cost of power by almost one third. A reduction would cut back the operational costs of many businesses and increase their profitability and investments.

Following persistent outcries by the business community about the high cost of transportation of goods, the government plans to upgrade from gravel to tarmac at least 309 kilometres of road and also complete the reconstruction of some 805 kilometres in the country.

Major works will include; the construction of the 4 lane Kampala-Entebbe Super Highway (53km) with a spur to Munyonyo, upgrading of the Kampala-Jinja highway, tarmacing of the Fort Portal – Bundibugyo – Lamia road (104), Tororo – Mbale – Soroti (152km), and the 128km Lira – Kamdini – Gulu road. The construction of major highways linking Uganda to Congo, South Sudan, and Kenya is expected to reduce the cost and time of doing business and boost regional trade.

Fuel costs head up
Uganda is a net importer of petroleum products and like last year, fuel prices are expected to rise based on the global price. A barrel of oil on the international market rose from $70 at the beginning of last year to about $94 by the end of last week.
Global financial services firm Morgan Stanley, expects the price of oil to rise to over $100 (Shs230, 000) per barrel in 2011.

An increase or reduction in the global price of oil normally has a medium term impact on fuel imports to Uganda in the same direction. A rise in the cost of oil per barrel will directly impact transportation costs and distort budgets. In Kampala, a litre of petrol is currently oscillating between Shs3,050 and 3,150 while diesel is between Shs2,400 and 2,550. These prices are seen edging higher due to the global trend. In Uganda, petrol prices could shoot up this week following a supply shortage.
Ugandans can only hope for better fuel prices when Tullow Oil kicks off the country’s commercial oil production next year.
The company is optimistic that the tax dispute between Heritage Oil and Gas, and the government will be resolved this year to enable it fast track its production activities off the Kasamene oil wells. Oil production is expected to translate into higher foreign exchange revenue for the country and reasonable fuel prices at the pump.

Oil and Gas industry development
The government will officially invite companies that have the capacity to fund and construct a $4.6 billion refinery in Uganda. The refinery will be developed on a public-private partnership basis in Hoima District starting in 2012. The government will pass a new legislation governing access to oil and gas rights, regulation of exploration and production, refining and gas processing, environmental management as well as the management of petroleum revenues.

To drive the oil and gas sector forward, the government is planning to set up the Petroleum Regulatory Authority to regulate the sector, as well as the National Oil and Gas Company to participate in the oil business.
National Budget on course
The development of these institutions like any other economic projects requires government finance. With about six months to the close of the financial year 2010/2011, there’s evidence that the government will meet its revenue collection targets for the first time in three years.

According to Uganda Revenue Authority’s latest collection performance reports, the tax body is already way above its target. This implies that the Shs5 trillion target is not beyond reach. The improved performance means that government could ably finance key infrastructure projects in the current and next financial years.

Telecom wars to persist on:
Tax revenue was one area that suffered from a reduction in telecommunication charges by mobile operators last year as millions of Ugandans benefited from price wars in the industry. MTN Uganda anticipates that price competition will persist in 2011 while other telecoms believe the key focus will be on improving the quality of services. MTN’s Chief Marketing Officer, Mr. Isaac Nsereko told Business Power that telecommunication prices will reduce further this year like it has happened in the last 12 years. Mr Edouard Blondeau, the Chief Officer Strategy at Orange Uganda said prices will only fall if inter-connection fees fall below the current Shs131.

Macroeconomic stability
A reduction in telecom prices would partly help the Bank of Uganda (BoU) to tame inflation as was the case in 2010. Last year, Uganda’s inflation dropped to less than 5 per cent from 12.5 per cent in 2009, due to increased domestic production coupled with prudent management of the economy. This year inflation is projected at 4.5 per cent by the International monetary Fund. But the weakening shilling and rising costs of fuel products are seen pushing the inflation level higher in the months ahead. This will adversely affect interest rates on loans, Treasury Bills and Bonds as the central bank moves to scale back the amount of money in circulation.

In 2011, forex dealers foresee the Uganda shilling weakening further against major global currencies. Dr. Adam Mugume, the director research at BOU expects the shilling to follow global trends and developments affecting major world currencies. As of last week, one dollar was worth Shs2, 315 almost in the same range as close of last year.

The above aspects will largely affect investment and developments by major players in the country and of course the final income of each Ugandan. With increased investment in key sectors like manufacturing and construction, the government expects the economy to grow at 6.4 per cent up from 5.9 per cent last year. In comparison, East Africa is seen growing at 5.4 per cent in 2011 with Tanzania at the forefront.
However, Uganda’s chances of attaining its economic growth targets are heavily reliant on its ability to conduct free and fair elections next month otherwise it could turn out to be a chaotic economy like Kenya was in 2008. Going by the Afrobarometer polls, President Museveni is expected to win the election that has attracted 8 contestants. As chief executive of the economy, his presidency is associated with relative stability and growth.

In 2011, shall we see the emergence of Islamic Banking?
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By Nathan Were (email the author)
Posted Tuesday, January 11 2011 at 00:00
Recent reports have indicated that the central bank will soon move to regulate an Islamic commercial bank. What exactly is involved in Islamic banking?

Globally, the assets of Islamic banks have been expanding at double-digit rates for a decade and Islamic banking is increasingly becoming a visible alternative to conventional banks in Islamic countries and countries with many muslims.
Islamic banks serve muslim customers, but are not religious institutions. They are profit-maximising intermediaries between savers and investors and offer custodial and other traditional banking services. The constraints they face are, however, different and are based on Shariah law. There are four main features that differentiate Islamic banking from the conventional banks.

Prohibition against interest (Riba) is the major difference between Islamic and traditional banking. Islam prohibits Riba on the grounds that interest is a form of exploitation and is inconsistent with the notion of fairness. This implies that fixing in advance a positive return on a loan as a reward for the use of one’s money is not allowed.

Prohibition against games of chance (Maysir) and chance (gharar): Islamic banking bars speculation - increasing wealth by chance rather than productive effort. Maysir refers to avoidable uncertainty; for example, gambling at a casino. An example of gharar is undertaking a business venture without sufficient information.

Prohibition against forbidden (Haram) activities: Islamic banks may finance only permissible (Halal) activities. Banks are not supposed to lend to companies or individuals involved in activities deemed to harm society (for example, gambling) or prohibited under Islamic law (for example, financing construction of a plant to make alcoholic beverages).

Payment of some of the bank’s profits to benefit society (Zakat): Muslims believe in justice and equality in opportunity (not outcome). One way they do this is to redistribute income to provide a minimum standard of living for the poor. Zakat is one of the five tenets of Islam. Where Zakat is not collected by the state; Islamic banks donate directly to Islamic religious institutions.

In countries with significant muslim communities like Uganda, many large segments of muslims do not have access to adequate banking services-often because devout muslims are unwilling to put their savings into a traditional financial system that runs counter to their religious principles. Islamic banks seek to provide financial services in a way that is compatible with Islamic teaching, and if Islamic banks can tap that potential clientele, that could hasten economic development in these countries.

There is evidence of close correlation between financial sector development and growth. Countries whose financial systems offer a variety of services tend to grow faster. Banks, whether Islamic or traditional, play a fundamental economic role as financial intermediaries and as facilitators of payments.
The rise of Islamic banking has contributed to economic development in two main ways. One key benefit is increased financial intermediation. In Islamic countries and regions, large segments of the population do not use banks. The Islamic world, as a whole, has a lower level of financial development than other regions—in part because conventional banks do not satisfy the needs of devout Muslims.

Moreover, because Islamic banking requires borrowers and lenders to share the risk of failure, it provides a shock-absorbing mechanism that is essential in developing economies. A mechanism that allows the sharing of business risk in return for a stake in the profits encourages investment in such an uncertain environment and satisfies Islam’s core tenet of social justice. If Islamic banking can emerge, Muslim businesses stand to benefit.

EAC lines $3.2m for infrastructure development
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By Justus Lyatuu (email the author)
Posted Wednesday, January 12 2011 at 00:00
Kampala

The East African Community has earmarked $3.2 million for the preparation of an EAC transport and facilitation strategy.

The programme funded by the East African Development Bank (EADB) aims to attain international standards for the EAC road infrastructure and ensure similarity of operational outputs, which would make them user friendly to stakeholders.

Speaking at a ministerial meeting in Kampala recently, Ms Hafsa Mossi, the chairperson of the EAC council of ministers said EADB agreed in 2007, to fund studies on the preparation of an EAC transport strategy and a regional road sector development programnme.

According to a press statement posted on the EAC Secretariat website Ms Mossi said the funds assigned for the execution of the programmes will involve all modes of transport including roads, railways, aviation, maritime, inland waterways and oil pipelines.

The two sets of strategies will also contain recommendations on the institutional and regulatory reforms needed for the project’s implementation.

Britania lines Shs11b for food processing plant
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By Stephen Wandera (email the author)
Posted Wednesday, January 12 2011 at 00:00
Kampala

Britinia Allied Industries a consortium of food processing firms has lined up a Shs11 billion for the construction of a food processing plant in Namanve.

The project expected to create about 1,500 for Ugandans is in its advanced stages and it is expected to boost farmers’ incomes especially those involved in passion fruit, pineapple, orange and apple farming.

Mr Hasmukh Dawda, the chairman of House of Dawda, Britania’s parent company, told journalists last week that the plant would boost farmers’ capacity, from which the firm seek to source its fruit juice raw materials.

The plant with a capacity of 30 tonnes of pulp will produce mango, pineapple and passion juice. Mr Dawda, said: "We have trained some farmers on how to grow high quality fruits so as to promote quality. He disclosed that because the firm has experienced supply shortages for passion fruits, the firm’s management recently decided to suspend the production of Splash passion juice.

Mr K. R Sridharan, the Britannia Allied Industries marketing manager said the firm is also keen on extending to DR Congo and South Sudan.

500,000 cars hit Ugandan roads in 20 years
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By Joel Ogwang

THE number of vehicles plying Ugandan roads has increased by over 500,000 (100%) in the last 20 years. According to the Uganda Revenue Authority (URA) estimates, there are 635,656 vehicles in Uganda today, an increase from 50,102 in 1991.

Light goods vehicles have increased by 5.7% in the last 10 years. Four-wheel drive cars went up by 7.4%, Omnibuses 12.6%, buses 5.4%, trucks 9.2% and motorcycles 15.8%.

Experts predict that this trend will continue owing to the unreliable public transport system, cheap car loans and the mushrooming depots dealing in new and used cars.

Sam Katumbwe, a transport expert in Kampala, however, said the increment in the number of cars did not necessarily mean Ugandans were growing richer.

“One person may own over 10 cars,” he said.

The Ministry of Works acting director of transport, Godfrey Wandera, said commercial passenger and goods transport by road is exclusively done by the private sector.

“Passenger transport is mainly dependent on the Omnibuses (Kamunyes) and taxi-motorcycles (boda bodas),” he said.

There are 112 registered car bonds, according to URA.

However, this year, the tax body shut registration of new car bonds.
“For now, we are not licensing any car bond because the ones available can satisfactorily meet the demand,” says Peter Kaujju, a media management officer at URA.

About 50% of vehicles in the country operate in the Kampala Metropolitan Area composed of Kampala city, Entebbe, Wakiso, Kira and Mukono town councils.

At 3.9%, the city’s current population growth rate is above the national 3.2% threshold, justifying the population’s rise from 400,000 in the 1950s to the estimated 2.5 million currently.

However, many city employees reside outside Kampala.

To exploit the fertile public transport industry, companies like Pioneer Easy Bus introduced 60-seater passenger buses, plying the Kampala-Entebbe, Kampala-Gayaza and Kampala-Mukono routes.

Road transport is the commonest and cheapest means of transport in Uganda.

Because of this, many roads have degenerated due to the pressure from the increased number of vehicles.

Works minister John Nasasira recently said: “Kampala roads are negating all the progress we, as a country, are making economically.”

The Government has tarmacked 1,000kms of roads in the last 20-years but this cannot match the over 100% increase in vehicle population.

The increase in the number of vehicles has caused traffic jams, which worsen during peak hours.

“Very soon, people walking on Kampala roads will be faster than cars,” says Eng. Francis Baziraake, the Uganda Road Fund (URF) board chairman.

Due to jams, Uganda loses about sh500m daily in burnt fuel, according to the state of environment report by NEMA, the national environment watchdog.

The situation is worsened by motorcycles, which many people resort to in an attempt to beat the jams.

“Motorbikes are hazardous and add to the traffic congestion, air pollution and disorganisation in urban centres,” the NEMA report said.

Cost of doing business will fall – Museveni
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Museveni (in hat) with other officials touring the new Hima Cement factory recently
By Vision Reporter

PRESIDENT Yoweri Museveni has assured manufacturers that the Government is striving to reduce the cost of doing business to enhance the country’s investor confidence.

He was optimistic that investors will enjoy less power costs with the completion of the 250-mega watt Bujagali power dam, which is one of the power projects underway countrywide.

Museveni was responding to pleas by Hima Cement chairman Hussein Mansi, who asked the Government to intervene and solve the problem of high energy tariffs.

This was during the commissioning of the firm’s $120m (sh280b) cement factory in Kasese district last week.

The new investment has increased the company’s production capacity to 850,000 tonnes, up from 350,000 tonnes.

Mansi was also concerned about the delay in improving the Kamwenge-Dura-Rwimi road, which he said was hampering the company’s operations.

He said the high energy and transportation costs make Uganda’s cement less competitive on the international market.

“It costs five times more to transport a tonne of cement in East Africa compared to China. Electricity in Uganda costs three times the cost in China,” he said.

Mansi said the unlevelled playing ground has compelled regional cement producers to request the East African Community to put a tariff of 35% or $50 per tonne on cement imports.

According to Mansi, the new cement factory, which started operations in July last year, created over 500 jobs for local residents.

“The factory employs over 600 permanent staff and has created more than 3,000 indirect jobs,” he said.

Standing on a 20-acre piece of land, the investment will fetch the country over $140 revenue annually.

Hima will also spend $1m every year in funding community development projects through the social responsibility programme.

The President said the revenue from Hima Cement alone was almost half of the total revenue from the entire coffee industry in the country.

Defense minister Dr. Crispus Kiyonga noted that Hima’s investment was a significant answer to the Government’s industrialisation call.

Kiyonga also commended the company for buying coffee husks from the local communities, which are used to burn the cement.

“We must encourage our people to grow more coffee to earn extra money from selling coffee husks to the factory,” Kiyonga advised.

Government offers Shs900b to change city transport network
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By John Njoroge (email the author)
Posted Wednesday, January 12 2011 at 00:00
Kampala

A flyover will be constructed to connect the Jinja Road junction to Entebbe Road over the Clock Tower as part of the government’s master plan to resolve Kampala’s troubling transport network system.

According to a new Shs900 billion transport master-plan, to be implemented by the Uganda National Roads Authority (UNRA), this project should be complete by 2023. According to the UNRA spokesperson, Mr Dan Alinange, the first phase of the project, designing the routes, is expected to begin in April and last a year.

This 20-kilometre phase, he said yesterday, will be named the Bus Rapid Transport system and will cost $100 million. The project is co-financed by the World Bank.

Other flyovers will be constructed connecting Jinja Road to Yusuf Lule Road, Yusuf Lule Road to Mukwano Road and Mukwano Road to Jinja Road. The designs for these flyovers have been completed and are awaiting financing.

The master plan involves total construction and rehabilitation of the transport network systems of Kampala city. The plan embraces both the road and railway network.

Future plan
“The Greater Kampala Master Plan is based on an evaluation of the desired future of Kampala City,” said Mr Alinange. “The plan is to reconstruct all Kampala roads by 2013. We are working with our partners to source for funding,” Mr Alinange told Daily Monitor.

Several other projects will be undertaken in the decade after 2013, including the road from Munyonyo to Entebbe—the Entebbe Expressway. The $300 million project is awaiting Cabinet and parliamentary approval. A loan agreement has been signed with the Chinese Government pending approval.

UNRA says if any buildings are affected in this phase, their owners will be compensated. Two other scenarios will be incorporated in the Kampala redesign.

Also expected is identification of convenient commercial and industrial locations to create out-of-town growth poles thereby reducing journey times to work and encouraging the development of circumferential roads. Also to be created is a metropolitan transport authority.

In a total area of 970 square kilometres, Kampala’s population is expected to reach 4.5 million by 2023. Notably, the main population growth of the city has been in the outer ring of Kampala District and in a belt along Jinja Road towards Mukono. According to 2008 calculations, the estimated number of minibuses operating in Kampala had reached about 8,000. These were supplemented by over 16,000 boda bodas.

Relics
An estimated 100 vehicles were using major Kampala roads every hour. According to officials, some of these roads were constructed in the late 1960s and were meant to last only 10 years.

WFP's grain purchases rise 30% in 2010
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KAMPALA, (Reuters) - The World Food Programme (WFP) said today its food purchases from Uganda rose 29.6 percent in 2010 from the previous year boosted by an increase in donations to the U.N. agency.

Uganda harvested a bumper maize crop during late 2009 and the first quarter of 2010, flooding markets and triggering a plunge in prices.

The body said it purchased an estimated 153,000 metric tonnes of food last year, mostly maize and beans, compared with 118,000 metric tonnes bought in 2009.

"Thanks to increased cash donations in recent years, WFP has become Uganda's largest buyer of quality grain for operations in the country as well as for operations elsewhere in Africa," the statement said.

WFP's country director, Stanlake Samkange, said Uganda was the organisation's biggest grain supplier in Africa, excluding South Africa.

The agency did not give the value of its purchases in 2010 but had forecast spending between $60-$70 million.

Over the last several years, WFP has been steadily boosting its local food purchases, a strategy it says has enabled it purchase larger volumes and feed more people from money saved on costs incurred in overseas food shipments.

Sourcing grain locally, the WFP says, also helps tap into the potential of local agriculture and boosts the economies in which the organization operates.

"Local purchasing under WFP's Purchase for Progress (P4P) initiative encourages smallholder farmer groups to widen their opportunities to access agricultural markets," the statement said.

When a rebrand becomes necessary
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Zain recently rebranded to Airtel. Though rebranding is costly, some times it is inevitable especially when it involves an acquisition or a takeover.

By Faridah Kulabako (email the author)
Posted Thursday, January 13 2011 at 00:00
“What’s in a name? That which we call a rose, by any other name would smell as sweet.” There goes Shakespeare’s phrase in Romeo and Juliet.
Shakespeare’s phrase may be true but how many consumers would take time to smell a flower or brand that has a repelling name?

Such a scenario is true for corporate branding and rebranding.

Several companies in Uganda have undergone rebranding efforts in recent years, varying from complete, top-to-bottom repositioning to more minor changes that nevertheless have far-reaching effects.

For instance, in December last year, PricewaterhosueCoopers changed its look to a simplified logo consisting of initials “PwC” whereas Zain Uganda underwent a complete face lift to Airtel in the same month.

Other companies that have been revamped in recent years include insurance service provider AIG which rebranded to Chartis, Stanbic Bank which ditched its tagline from “Inspired Motivated. Involved” to “Moving forward” while Standard Chartered Bank changed its slogan from “The right partner” to “Here for Good”.
National Housing and Construction Company limited (NH&CCL) rebranded to National Housing (NH), The Monitor changed to Daily Monitor while The New Vision redesigned and changed its name to New Vision to mention but a few.
Ms Agnes Kamya, a marketing and advertising manager at Revolution Ads and Design Limited told Smart Money recently that revamping a company brand may be necessary if there is change in management or when a brand has outgrown its identity.

“Brands may start small but after some time they grow and may require rebranding to match growth with the brand,” Ms Kamya says.

She further notes that firms may also consider a rebrand in a bid to ensure that companies and brands remain relevant to their target audience.

“When your target audience evolves and starts to sniff out competitors, it may be because they feel what was their first preference is no longer relevant.
A rebrand to give your company a new face in such a case is required,” she explains.

The decision to rebrand is, however, much more than just a change of logo and can necessitate making changes to the very heart of a company.
Mr Emmanuel Masaba, a branding expert told Smart Money recently that like any image overhaul, a rebrand can enable a company to update its message, signal a change in direction or appeal to new audiences.

Depending on a company strategy, he says, a rebrand can be a way of repositioning a brand in the market to appeal to a wider audience or to redefine a company for reasons such as bankruptcy.

Taking a brand to a new position, he adds, requires a company to think about the new audience they are hoping to acquire before implementing the new brand.

Rebranding also shows a company’s audience, both current and future, that it’s adaptive to change. This is true especially for companies whose brand is dependent upon technology.

Since a corporate identity is the most visible and outward sign of a company, changing or overhauling an identity says a lot about the company’s present and future direction.

Thus, a brand is not just a logo, advertising campaign or slogan. It is rather a product of the millions of experiences a company creates with employees, communities and customers and the emotional feeling these groups develop as a result of their experiences.

Mr Francis Kamulegeya, the country senior partner at PwC Uganda says the refreshed visual look aims to differentiate PwC and reinforce the firm’s efforts to deliver distinctive services through building relationships and creating value.
According to Stanbic Bank’s managing director Philip Odera, the bank’s rebranded slogan aimed at “making the right connections” inspired by the need to focus the mindset of the bank’s staff towards improving customer service and delivery.

Recently Mr Odera was quoted by the Daily Monitor, as saying: “Moving Forward is meant to reaffirm our commitment to deliver the best services to our customers.”

The rebranding of NH&CCL to NH came with an ambitious plan where the NH plans to build over 2,000 housing units by 2012.

Although rebranding gives companies new identities to expand their appeal in local, regional and international markets, Mr Masaba says casting off old brands also presents huge risks including losing some customers in the short run.
He notes that rebranding may also affect a firm’s financial goals whereby consumers may take long to familiarise themselves with the new brand and in the process the firm may lose revenue.

Although required sometimes, Ms Kamya, however, argues that rebranding is costly, may confuse consumers and that accepting the new brand, especially for people who are not well informed requires a lot of advertising and sensitisation.
However, companies should not rebrand for the sake of rebranding without any new innovation, attitude, behavior or product position as it might leave consumers with a flat experience.

Oil and development: The changing face of Hoima
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Construction of commercial buidings in the city centre is booming and people are settling in to benefit trom the oil
By Thomas Pere

A VACANT tract of land lies between the welcoming town council sign and the town centre.One can think Hoima town is still a distance away. The discovery of petroleum in the district, a few years ago, brought Hoima to fame.

The town is now a centre of diverse activities, such as construction, especially in residential areas. Newly painted buildings, unfinished roof tops and growing gardens are common.

“Unlike most towns and cities where the settlement pattern starts with low-class housing and transforms into suburbs, Hoima town is different,” Allan Mubiru, a visitor to the district says.

The town centre is dominant with non-storied commercial buildings, although some storied buildings have cropped up.

“These buildings are not more than five years old. They have replaced the houses that got burnt.,” William Isingoma, a resident says.

He adds that since the discovery of petroleum in the district, there is a change. The prices of land have shot up due to high demand. People have moved from all over the country and settled in the district in order to benefit from the from oil,” Isingoma says.

He says there are four main residential areas in Hoima which include Kijungu, Bwikia and Bujumbura, domainated by the middle class. Surprisingly, there are hardly any slums except Kiriatete village where many low-income dwellers reside, Isigoma says.

However, with the onset of the oil industry, it is feared large scale slums might rise.

At the periphery of the central business district, there are visible signs the town is expanding. The residential areas are still growing.Many of the structures are typical of the district standards. Few isolated residential properties can march the standards of Kampala.

Boneventure Kiiza, the acting municipal engineer of Hoima district, says getting a vacant plot in the town is difficult. Instead, it is plots with buildings in them that are available. However, vacant plots are still available in the residential areas, although expensive, costing over sh5m for a 50ft x 100ft plot and sh60m for a 60ftx100ft plot in the town centre, he says.

Since the town council which used to be 20-50sq kilometres became a municipality, its size has expanded. The population has risen from 36,000 to about 101,000. The road network also expanded from 114km to over 220 km, although many of the roads are in a pathetic condition.

The road to Kampala is the only tarmacked one, but also in a worrying state. Since the discovery of oil, many organisations have come up. They are doing consultancy on land and creating awareness.

The residents hope their land will appreciate and have started investing in it, Kizza says. Building materials like sand and bricks are available in haredware shops.

A three tonne truck of sand costs between sh70,000 and sh90,000 and that of aggregate between sh100,000 and sh120,000. A brick costs between sh80 and sh100.

The rates for commercial shops range between sh70,000 and sh150,000, depending on the location, while for lockups, the range is between sh70,000 and sh100,000 per month.

For residential property, the price for two roomed houses range between sh70, 000 and 150,000. Self-contained double rooms range between sh200,000 and sh250,000.

Among the residential areas, Kijungu is the most affluent. and was well planned roads networks.

Kiiza says the biggest challenge is unplanned development and poor infrastructure.
There is limited supply of electricity, but we hope there will be more power with the completion of Seruka dam, says Kiiza.

Ten years to come, there will be significant change in Hoima. This will start with the forthcoming urban infrastructure development project by the Government commencing in 2012.

China to construct $350m Entebbe Road
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Traffic jam on Entebbe Road
CHINA is set to start construction work on a $350 million toll road from Entebbe Airport to the capital Kampala in July in a bid to reduce congestion on the existing road, officials said today.

According to Daniel Alinange, the spokesman for the Uganda National Roads Authority, the government has already signed the $350 million loan with the Exim Bank of China for the financing of the project.

"Preparations are now in final stages and construction will start in July," he said, adding the Chinese will build and manage the toll road.

The existing 50-kilometer road connecting the Ugandan capital to Entebbe continues to be overwhelmed by increasing traffic and is regularly jammed.

According to the Uganda Investment Authority, China is now the country's main source of foreign direct investments and more Chinese companies are eying opportunities in the country's construction, agriculture, and oil and gas sectors.

China's state-owned CNOOC Ltd. has already agreed a joint venture with U.K.'s Tullow Oil PLC and France oil major Total SA to develop the country's downstream oil industry in at least three oil blocks in the Lake Albertine Rift basin.
The deal awaits government approval.

According to Brain Glover, the general manager of Tullow Uganda Ltd., the three companies will invest at least $10 billion in the project, making it East Africa's largest ever single project so far, involving the construction of a refinery and a 1,300 kilometer-long oil export pipeline to the East African coast.

Airtel promises new brand
Business
Written by Lydia Ainomugisha
Thursday, 13 January 2011 09:44
Telecom company Airtel has promised its customers a new brand to enjoy superior quality of service, reliability, innovation and affordability wherever they live, work or travel as well as investment in community development by supporting schools across Africa across the continent. Manoj Kohli, the CEO and joint managing director Bharti Airtel, which offers mobile voice and data services, fixed line and high speed broadband said the company, committed to offering affordable services, deepening network coverage to include the rural population and enhancing the digital experience through 3G across the continent, will offer a better brand experience for all their customers in Africa.
In a move that will accelerate the transformation of African mobile communications and positively impact the speed of economic development across the continent, Bharti Airtel Limited and IBM announced the selection of IBM to manage the computing technology and services that will enhance Bharti Airtel’s mobile network.
In addition, IBM plans to deploy a powerful content management system to offer rich media content such as music and video over mobile devices, while simultaneously facilitating the growth of the application developer community in Africa.
Strategic partnerships with Ericsson, Huawei and NSN to improve the quality of the network across the African landscape and expand the footprint of the 2G and 3G services has been completed.

The modernization and optimization of the networks will give airtel an opportunity to offer exciting services in 2011.
Kohli explained: “The partnerships take us one step closer to our vision of making telephony available and affordable for everyone across Africa, even in the remotest areas which are at present disconnected from the world.
“We are also laying the foundation for the introduction of 3G wireless broadband as access to content is the right of every African citizen. Many of our new customers will have an online experience for the first time in their lives.”


Team Institute of Business Management to graduate 300
Business
Written by John Musinguzi
Thursday, 13 January 2011 09:48
Team Institute of Business Management (TIBM) is to award certificates and diplomas to over 300 graduands on Friday January 14. The principal, A. J. Lutalo-Bbosa, said these are people that completed studies at the institute when it still ran under the name Team Business College. Team Business College started in 2000 and changed to new name and status in October 2010. It is the first graduation ceremony of the institution because it largely offered professional programmes like CIPS, CPAU, ACTU, ACCA, for which it is not the awarding authority.
“Through two years of negotiations and consultations with the National Council for Higher Education (NCHE), we were licensed as a private Other Degree Awarding institution. We are proud to be the first such private institution; as you know, Uganda Management Institute is an Other Degree Awarding institution but it is public,” said a beaming Lutalo-Bbosa.
He, however, said this is a challenge at the same time, being a pioneering experience.
He said the same day will witness ceremonies of launch of the institute and installation of the chancellor.
He assured that besides offering degree programmes, the institute will continue to offer certificate and diploma as well as vocational and professional programmes.


The institute is starting with two degree programmes: Bachelor of Business Administration (BBA) and Bachelor of Science in Accounting and Finance (BSAF). The Bachelor of Information Technology is in the pipeline.


Currently on recess, the institute’s new semester starts on February 14; as second semester for continuing courses and first semester for degree programmes.
The institute has one campus at Rubaga, Kampala. Its branches in Jinja and Mbale offer only vocational and professional programmes.
“This project, the institute, is a brainchild of three certified accountants; namely, David Tushabomwe, Joseph Balikuddembe and Sam Rugaba. Team Consultancy Services is its sister project,” he added

More investments for EA power projects
Business
Written by SAMUEL NABWIISO
Thursday, 13 January 2011 09:55
Countries under the Nile Equatorial and Great Lakes region need $267m to implement cross-border power interconnection, notes the publicist for Uganda Electricity Transmission company Limited (UETCL), Kenneth Otim. Otim said the costs of the power interconnection project will be met by all the countries involved, and when completed, the project will boost the region’s attractiveness to investors since low supply of electricity remains one of the biggest costs of doing business.
He noted that among the schemes that have been approved is the 249km interconnection line that will carry 320kv between Jinja in Uganda to Lessos in Kenya. The total cost for the project is estimated at $92m, of which Kenya will pay $50m, while Uganda will contribute $42m.
The second scheme is the 230kv line from Mbarara to Birembo in Rwanda. The line stretches 172km and will cost the two states $41m. Rwanda will pay $25m and Uganda will spend $16m.
There are similar power projects being discussed in Tanzania too. There are suggestions of a 260km power line between Nairobi and Arusha. The cost for this line will be $108m.
The last interconnection power project will run from Rwegura in Burundi and Kigoma in Rwanda, carrying power of 110kv over a distance of 103km. This will cost both nations $24m.

Government to finally offer land to Tamoil
Business
Written by Jeff Mbanga
Thursday, 13 January 2011 09:56
Government has promised for the oil pipeline from Eldoret in western Kenya to Kampala before the end of this month, moving closer to solving one of the most contentious issues that have blocked the start of the project since Tamoil won the bid four years ago. Tamoil, however, remains cautious on acquiring the land, according to our sources, after both the Uganda and Kenya governments broke similar promises in the past. “They say they will give us the land in January. So, we are waiting to see. Nothing much has happened over the last couple of months,” said engineer Ahmed El Gembri, the managing director of Tamoil, a Libyan company.
The land in question goes through six districts. Compensation of the people living around the area has been contentious as questions arise on the valuation figures. Reports indicate that the land is more than $15m, a figure that has tripped from $5.2m in 2006. Government has since shown reluctance to pay up.
The decision represents a reversal of government’s earlier position when it was made clear that Tamoil was free to build on the mapped land since a policy instrument that catered for the compulsory acquisition of land for the Kenya-Uganda oil pipeline had been issued as early as October 2009.
Some top government officials had, in fact, noted that Tamoil shouldn’t hide behind the land question to delay the construction. But Tamoil contested the position, pointing out that the policy instrument did not take into account those people who had developed the land after its issuance.
Should there be a resolution on the land, Tamoil and both governments will then move to two other issues: Uganda’s refinery plans and the cost of the pipeline. Kenya stands to lose a substantial amount of revenue – got through levying fees on Uganda-bound fuel trucks – when the oil pipeline is up and running.
The cost of the pipeline has shot up from $78m to about $303m since the design changed from the single carriage to a dual carriage. Tamoil officials warn that the delay translates into an increased cost of the project since the cost of construction equipment continues to go up. At one point, Tamoil noted that there would be 1% increase for every month that the project is held-up.
The design was changed to dual carriage in order to take care of Uganda’s interests when the time to export fuel commences. Kenya has already asked for an independent audit into the new cost of the pipeline. Kenya and Uganda have nevertheless given conditional approval to the change in the design of the pipeline.
The Kenyan government, according to our sources, also says the project can only be cost effective if Uganda can refine at least 100,000 barrels of oil per day. Kenya was, three weeks ago, expected to have received word on Uganda’s refinery plans.
Foster Wheeler, a consultancy firm in Australia, has already conducted research into Uganda’s oil refinery plans and has ruled that the country needs to build its refinery. The refinery, expected in five years at the very least, will start with about 20,000 barrels per day of oil before going up to 150,000 when production hits the peak.
Caught between the delay are the Jinja reservoir tanks, which form part of the pipeline project. As part of building the pipeline from Eldoret to Kampala, Tamoil was also offered the chance to refurbish the Jinja reservoir tanks, with a storage capacity of 30 million cubic metres.
But the process of refurbishing the tanks was slowed after government deviated from its position and declared that it was looking for a new investor to take over the Jinja tanks.
Tamoil and government had both disagreed on how to share the profit from the storage of fuel, among other things, something that appeared to force the ministry of Energy and Mineral Development to pull the plug on the deal. Tamoil was thrown into a spin.
It has taken some political lobbying for Tamoil, which says it has already invested $1m at the Jinja tanks, to recover the rights to the tanks. However, the delay in kicking off the construction could also hamper the refurbishment for the Jinja reserves. “We are supposed to get a tender for Jinja, but that has not happened,” said El Gembri.
Uganda remains heavily exposed to fuel shocks partly because the country lacks fuel reserves to meet any abrupt shortages.

Govt releases sh7.1b for the North
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By Pascal Kwesiga and Oliver Nakato

THE Government is to release sh7.1b to kick-start the second phase of the Northern Uganda Social Action Fund (NUSAF2) in two weeks, the NUSAF director has disclosed.

Dr. Robert Limlim has said NUSAF funds will be sent to districts and sub-counties after the completion of verification exercises in 30 districts.

He made the declaration yesterday at the Uganda Media Centre in Kampala.

The five-year project is financed by a $100m (about sh235b) specific investment loan and a grant of over sh79b from the UK’s Department for International Development.

The Government hopes that more than 10,000 projects will have been completed by 2014.

The multi-sectoral community-driven project is part of an ambitious peace recovery and development plan for districts affected by the LRA war.

“We have all the money and we are going to disburse it to those who are ready in two weeks. We urge those districts that have not yet submitted project proposals to do so,” he said.

Under the project, district and sub-county leaders are facilitated to engage people in identifying projects that can address their needs.

Limlim said the implementation of the projects would be monitored by community members through social accountability committees and the office of the IGG.

He said the office of the prime minister was waiting for the approved projects from the communities in Oyam, Apac, Kaberamaido, Koboko and Lira for funding.

NUSAF 2 was launched by President Yoweri Museveni in February last year after the successful completion of the NUSAF 1 project in northern Uganda.

EU funds sh325b Mbarara-Ntungamo road construction
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By Samuel Balagade

CONSTRUCTION of the 160km Mbarara-Ntungamo road, funded by the European Union (EU) at a cost of sh325b, is expected to start in March.

The Government is expected to spend sh10b on compensation of people to be affected by the project.

The works, which will done by RCC Limited, a Israel company, will involve expanding the road to a radius of 11 metres and realigning the bends.

The Uganda National Roads Authority (UNRA) has contracted COWI A/S to disburse compensation packages.

Dan Alinange, the roads authority spokesperson, said the compensation exercise started with the verification of beneficiaries.

He said the beneficiaries had to produce valid identification papers, passport photos, land titles, bank account details and letters of administration for estate.

Other roads to be upgraded this year include the 90km Moroto-Nakapiripiriti road, Kapchorwa-Suam, Hoima-Kaiso-Tonya, Mpigi-Kinoni, Kinini-Sembabule, Mukono-Kyetume-Katosi and Kisoga-Nyenga roads.

The Rukungiri-Kihihi-Ishaka, Ishaka-Kagamba and Ntungamo-Kakitumba roads will also be upgraded.

Alinange said several companies had been short listed for the projects, adding that works would start soon.

Uganda to join steel producing states
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Museveni being shown samples of iron ore to be used to produce steel at the plant in Jinja
By Frank Mugabi

THE Uganda Steel Rolling Mills has embarked on the construction of an iron ore smelting plant in Jinja district that will start production by the end of this year.

The development means that Uganda will join the league of steel producing nations in the World.

The plant will be the first of its kind in Uganda and the East and Central African region.

The foundation stone for the $13m plant was laid by President Yoweri Museveni during his recent campaign trail in the Busoga sub-region.

The managing director of the Alam Group of Companies, Abid Alam, said the factory will produce approximately 150 metric tonnes of sponge iron per day at the time of its commissioning in October.

Production is expected to double to 300 metric tonnes per day in the second phase of the project, he said.

He said 150 direct jobs will be created at the completion of the project, and many other indirect ones will be opened up in the metal fabrication.

According to Alam, the plant will initially use hematite iron ore abundantly available in the Kigezi region.

It will later use the magnetite type of iron ore, which is available in other parts of the country, Alam explained.

He said whereas the plant would initially use imported coal from South Africa to smelt the iron, this would be substituted at a later stage with natural gas locally available in Uganda.

This will reduce the production costs and reduce the cost of the finished product, Alam said.

Museveni commended the Alam Group for the innovation that will add value to the iron ore resource that had remained unexploited in Uganda.

Industrial analysts have predicted that the project will stimulate the economy.

“The abundant iron ore reserves assure Steel Rolling Mills of a constant availability of the raw material, which will enable the company increase its steel rolling capacity and guarantee the availability of steel products on the Ugandan market,” said Vincent Ojambo, the general secretary of the Uganda Mines, Metal and Allied Workers Union.

He noted that this would turn Uganda into a nucleus for the development of the steel industry in East and Central Africa.

“The East African region is planning a large number of projects such as railways, roads, ports and power generation. The demand for construction steel has generally gone up as the economies expand and public spending increases,” Ojambo said.

Meanwhile, Steel Rolling Mills is also in advanced stages of establishing a 20 megawatts power plant that will generate power from steam-driven turbines.

The steam will be generated using waste from the sugar plant to be built adjacent to the iron plant.

Six megawatts of power will be utilised in the sugar plant, whereas 13-14 megawatts will be used in the steel plant.

Bank of Uganda intervenes in exchange market
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By Martin Luther Oketch (email the author)
Posted Friday, January 14 2011 at 00:00
Kampala

Bank of Uganda has intervened with a $20 million boost in the foreign exchange market as it focuses on stabilising the increasingly volatile exchange regime.

The intervention comes on the back of the shilling declining massively against the green back, which saw the dollar selling at about Shs2,333 at the beginning of this week.

Apart from being Uganda’s official currency reserve, the US dollars take up 90 per cent of Uganda’s foreign exchange market as it is the currency of choice for most Ugandan traders followed by the Kenyan shilling and the Euros.

Dr Adam Mugume, the director of research at BoU told Daily Monitor on Tuesday in Kampala that the Central Bank had injected $60 million in November 2010, with an additional $20 million early in January 2011.

He said the bank also bought $ 61 million for the reserve build up.
Dr Mugume said the shilling has had a heavy depreciation since the beginning of the 2010/11 Fiscal Year, falling at the rate of 15.4 per cent in July and 21.5 in December 2010 against the dollar.

The depreciation pressures have been partly driven by global developments, which led to the appreciation of the dollar against major international currencies including the Euro and the pound.
However the global exchange regime is expected to stabilise in the course of the year.

Uganda to join steel producing states
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Museveni being shown samples of iron ore to be used to produce steel at the plant in Jinja
By Frank Mugabi

THE Uganda Steel Rolling Mills has embarked on the construction of an iron ore smelting plant in Jinja district that will start production by the end of this year.

The development means that Uganda will join the league of steel producing nations in the World.

The plant will be the first of its kind in Uganda and the East and Central African region.

The foundation stone for the $13m plant was laid by President Yoweri Museveni during his recent campaign trail in the Busoga sub-region.

The managing director of the Alam Group of Companies, Abid Alam, said the factory will produce approximately 150 metric tonnes of sponge iron per day at the time of its commissioning in October.

Production is expected to double to 300 metric tonnes per day in the second phase of the project, he said.

He said 150 direct jobs will be created at the completion of the project, and many other indirect ones will be opened up in the metal fabrication.

According to Alam, the plant will initially use hematite iron ore abundantly available in the Kigezi region.

It will later use the magnetite type of iron ore, which is available in other parts of the country, Alam explained.

He said whereas the plant would initially use imported coal from South Africa to smelt the iron, this would be substituted at a later stage with natural gas locally available in Uganda.

This will reduce the production costs and reduce the cost of the finished product, Alam said.

Museveni commended the Alam Group for the innovation that will add value to the iron ore resource that had remained unexploited in Uganda.

Industrial analysts have predicted that the project will stimulate the economy.

“The abundant iron ore reserves assure Steel Rolling Mills of a constant availability of the raw material, which will enable the company increase its steel rolling capacity and guarantee the availability of steel products on the Ugandan market,” said Vincent Ojambo, the general secretary of the Uganda Mines, Metal and Allied Workers Union.

He noted that this would turn Uganda into a nucleus for the development of the steel industry in East and Central Africa.

“The East African region is planning a large number of projects such as railways, roads, ports and power generation. The demand for construction steel has generally gone up as the economies expand and public spending increases,” Ojambo said.

Meanwhile, Steel Rolling Mills is also in advanced stages of establishing a 20 megawatts power plant that will generate power from steam-driven turbines.

The steam will be generated using waste from the sugar plant to be built adjacent to the iron plant.

Six megawatts of power will be utilised in the sugar plant, whereas 13-14 megawatts will be used in the steel plant.




Uganda's First Iron Ore Smelter To Start Commercial Production 2011

KAMPALA Uganda -(Dow Jones)- Alam Group of Companies is constructing an iron ore Smelter in Uganda's Jinja district which is expected to start production in October, company officials said Friday.

According to Abid Alam, the manufacturing, building and construction company's managing director, the company is developing the plant in a phased manner, investing an initial $13 million with the capacity to produce 150 metric tons of sponge iron per day, this will be doubled to 300 tons a day in the second phase.

"Initially, the plant will use materials from the Kigezi region in South Western Uganda," he said, adding the company is looking at tapping into the hematite iron ore which is readily available in the country.

Company officials said the entire project will be completed by the end of 2012.

According to Alam, the plant will initially be importing coal from South Africa to smelt the iron ores. However, the company plans to substitute the coal with natural gas, when Uganda starts oil and gas production in the next couple of years to ease production costs.

Uganda has confirmed huge iron ore reserves in its south western parts along the border with mineral-rich but lawless eastern Congo, according to the department of geological survey and mines.

Last year, the department completed a $44 million geophysical aerial survey across the country and has since gathered enough geological data which is being used to lure mine investors, according to government officials.
^^^^^^
Uganda is finally starting to use it natural resources like the oil and now steel . next the gold,diamonds etc in karamojong will be exploited.

Thats tiny but at least its a start.

Thats tiny but at least its a start.

i know but currently the amount of iron ore confirmed if huge this factory is just a start . the government will expand it later.

So many good news from Uganda. This is absolutely fantastic! :pepper:

i know but currently the amount of iron ore confirmed if huge this factory is just a start . the government will expand it later.

That's good, but it also depends on how much electricity you have.

Steel industry is a monster energy consuming industry. More to that, you need demand to produce more. So expansion comes with demand , especially the electricity you have available to feed the monster smelter.

New factory more than doubles Hima Cement’s production capacity

By Thomas Pere
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An aerial view of the new factory in the evening

As far as the production of cement in Uganda is concerned, it was a dream come true as Hima Cement Limited officially launched its ultra modern factory in Kasese last Friday. This marked the delivery of a long term promise by the Lafarge Group to change the industry when they made their entry into the Ugandan market in 1999.

Hima Cement is a subsidiary of Bamburi Cement of Kenya and a member of the Lafarge group of France. Lafarge is the leading manufacturer of building materials in the world, with top-ranking positions in all its businesses which include cement, aggregates and concrete as well as gypsum.

Uganda’s Investor of the Year Gold Award winning new plant in Kasese was officially opened by President Yoweri Museveni. The factory constructed at a cost of sh270b took two and a half years to complete.

The new factory which has increased the company’s production capacity from 350,000 tons to 850,000 tons, is the first step in driving the country to self-sufficiency in cement production.

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A section of the new Hima Cement factory in
Kasese whose construction cost $120m

This move will save the country over sh150b in foreign exchange as well as earn extra revenue from cement exports to emerging markets in the Great Lakes region.

“The new Hima Cement factory which started operations in July last year, created over 500 jobs for locals during construction and about 100 permanent jobs with its commissioning. This does not include additional indirect employment created,” Hussein Mansi, the chairman of Hima Cement Limited said during the opening.

He further explained: “The plant employs the latest technology that guarantees consistent product quality and prioritises safety for both plant and human capital. This technology will also ensure emissions are consistent with international standards and also boost our already existing programmes of environmental conservation and protection”.

He added that besides the technology, Hima Cement has planted over one million trees under its Greens Schools and Quarry Rehabilitation Programmes in Kasese, Kamwenge and other parts of the country. The company has also had community intervention programmes in health and sanitation, education and shelter which are all in line with their investment policy aimed at creating a sustainable co-existence with the community where they operate.

He further added that despite the investment, the industry still faced challenges mainly due to the high cost of production occasioned by high energy tariffs and expensive transportation. He decried the un-level playing ground occasioned by the lowering of the Common External Tariff (CET) from 40% to 25%, which the East African partner states effected in 2008 .

“The new Hima cement factory is an indication that local manufacturers are committed to increasing capacity to meet growing demand but we are faced with competition from imports from markets that are usually subsidised by their government in addition to lower production costs,” Mansi pointed out.

Mansi singled out the Middle East, China and most of Asia as being sources of cheap imports where production was generally subsidised.

“It costs US15 cents to transport a ton of cement per kilometer in East Africa compared to US3 cents in China and most of Asia. In addition the electricity in Uganda costs $90 per megawatt compared to $30 per megawatt in China,” noted Mansi.

“It is clear that if we have similar cost base, the local industry would compete effectively with imports but as it is, the playing ground favours imports. That is why we believe the CET of 35% or $50 which ever is higher, should be reinstated especially because the local manufacturers have invested in increased capacity” he said.

President Museveni while presiding over the function promised to engage other East African Presidents in implementing the common External Tariff of 35% or $50 per ton. He also said he would engage the Minister of Transport to have the Kamwenge-Dura-Rwimi Road completed within tow months because it is critical for the operations of Hima Cement and road safety.

Museveni said with the completion of the Bujagali Project in 2012, the power problem Hima Cement is facing would be no more.

For the six years up to 2010, Lafarge has been listed in the ‘Global 100 Most Sustainable Corporations in the World’. With the world’s leading building materials research facility, Lafarge places innovation at the heart of its priorities, working for sustainable construction and architectural creativity.

Presently it has 78,000 employees in 78 countries and posted sales of Euros 15.8 billion in 2009. With such track record, Lafarge definitely is a company anybody or business would like to deal or partner with.

New factory creates more jobs

By Thomas Pere

The high rate of unemployment in the country is not limited to university graduates but goes right down to the unskilled cadres on the labour market.

Statistics from the Labour Department show that 390,000 students who finish tertiary education each year have only 8,000 jobs to compete for. This means that for every job available there are about 50 people to fill it.

Statistics from the Uganda Investment Authority (UIA) and the Uganda Bureau of Statistics show that, of the more than 400,000 Ugandans who enter the labour market each year, only about 113,000 are absorbed in formal employment, leaving the rest to join the informal sector.

The unemployment rate stands at 3.5% and underemployment, which is mainly prevalent in rural areas, is at 17%.

Therefore, the launching of the Gold Award winning Hima Cement factory last Friday was timely. The plant which was commissioned last October has saved hundreds of graduates from the stress of street hoping.

http://www.enteruganda.com/brochures/images/Hima-6.jpg
Hima Cement workers at the quarry in Kasese during the
quarry rehabilitation programme

The $120m factory located in Kasese district in western Uganda has increased cement production in the country by an additional 500,000 tons.

David Njoroge the general manager of Hima Cement Limited says: “Before it was established, Hima Cement was directly employing over 500 Ugandans, and with the new plant, approximately 100 more jobs have been created for professional individuals. Besides about 3,000 are employed indirectly.”

While the existing plant has only been able to serve a percentage of the regional market, the new one has widened coverage to the entire East African region, where in the process new business opportunities for retailers, distributors and transporters have been created.

“To ensure proper standards, Hima has also invested in improved packaging of the product to ward offcounterfeit products. One of the biggest challenges in cement production has been packaging, an area that has been exploited by the counterfeit producers of the product,” says the general manager.

He says Hima intends to work closely with the standards body, as well as the locals to ensure that their product is protected from counterfeits. This will be through the use of a stronger and more unique packaging system.

In a speech read for him by Aston Kajara, the minister of finance incharge of Investments during the 2010 investor of year gala at Hotel Africana, President Museveni hailed the winners for aligning their work to the new National Development Plan.

“The goal of this plan is to ensure that, while the Ugandan economy grows significantly, it should do so in a way that creates adequate gainful jobs that are in tandem with the growing labour force, given that employment creation is equally critical for both wealth creation and poverty reduction,” the President said.

Gulu back on its feet
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One of the many buildings sprouting all over Gulu town.
By Titus Kakembo

SINCE the guns of war went silent, every Gulu visitor is shocked by the construction work, booming business and serene atmosphere in this northern town of Uganda.

Relocating back home may be the catch phrase there but entrepreneurs have pitched camp. It is a five-hour drive from the capital, Kampala. Alternatively you can catch a 45-minute flight from Entebbe.

Forget the dollar prices for rent in Kampala. Here you talk shillings and a bedsit will cost about sh180,000 while the two-roomed goes for about sh350,000. A bungalow is priced at between sh800,000 and sh2m. It all depends on location and your ability to haggle.

A 50x100m piece of land in the town centre is available at between sh25m and sh40m. Malls and high rise buildings are catching on in Gulu.

Ugandans in the Diaspora are building plush cottages and residential houses.

Just name it and it is here. Bank of Uganda, Crane Bank and Centenary Bank, Gulu University and there is the presidential aspirant and son of the soil, DP presidential candidate Norbert Mao, who is also the former LC5.

Being endowed with an airstrip, Gulu is an ideal home, especially as legendary Lacor Hospital and Layibi College are regaining their past glory.

According to John Okello, a commission agent: “Gulu University offers unexploited money generating opportunities with the craze for hostel space for students just like in Kampala.”

There are three commercial plots directly opposite Gulu University in a prime location in Laroo division of Gulu Municipality. Okello predicts that if Southern Sudan gets independence, there will be greater expectations in trade and education.

Culturally conservative, the Acholi culture remains visibly and audibly firm.

NGOs keep the streets busy with their motor vehicles destined for villages to boost farm production. Inspite of loss of property and life, Gulu is once again turning into a food basket for the rest of Uganda and neighbouring Southern Sudan.

Residents in the urban areas are renting gardens and cropping them with beans, lapena (green lentils), sim sim, sunflowers. Traders from Southern Sudan storm villages scouting for these gardens.

Just like any other town, shops are stocked with locally manufactured goods, imported clothes from China, foot wear and food. Areas that were no-go zones during the infamous LRA are selling.

Come dusk and you will not miss the pubs, a favourite destination for night life revellers.

Patrons flaunt “goodies” in hot pants, mini skirts and brief tops. The place fills with pretty girls sipping from their glasses, their male companions competitively guzzling beer from bottles as if it were going out of fashion. The crowds jig on the miniature dance floor.

Another popular destination is the Ethiopian Restaurant where adventurous diners enjoy coffee and Njera dishes.

Rugby and the Premier League are seldom talked about. Larakaraka (royal dance), a preserve for big events, is in stiff competition with the European “head-banging” dance style. Revellers move backwards and hit an imaginary item with their foreheads. It is a dance style reserved for music lovers. Like break dance, the more beer one swallows, the easier it becomes to adapt.

The highbrow diners and winners patronise Acholi Inn which is more serene with jazz music sizzling out of speakers as the moon peeps out of the grey sky.

Downtown Olya Road teams with a bevy of pubs patronised by sports lovers, scrabble fans, darts players and lonely hearts. Abola La’pok Restaurant is renowned for affordable accommodation, generous portions of pork roast and millet bread.

When are you paying Gulu a visit?

That's good, but it also depends on how much electricity you have.

Steel industry is a monster energy consuming industry. More to that, you need demand to produce more. So expansion comes with demand , especially the electricity you have available to feed the monster smelter.

True. And it doesnt generate that many jobs- which is what Africa needs. Look at Tunisia! I will be REALLY impressed when they start making things out of the steel- that generates more jobs and skills.

True. And it doesnt generate that many jobs- which is what Africa needs. Look at Tunisia! I will be REALLY impressed when they start making things out of the steel- that generates more jobs and skills.

tunisia is the smallest producer of still in the maghreb region, morocco is way ahead folowed by algeria.

but algeria have iron and a lot of natural resource thing that we don't have in morocco but still we produce more than algeria.

i think uganda can go faster than tunisia if they have the natural resource, since they are the first in the area, they will expend quiklly.

Uganda will expand due to damand from it giant neighbors. South Sudan is under going a reconstruction and hopefully more will follow, Oil industries in South Sudan and Uganda itself. East DRC is a big importer of steel . Rwanda is booming in it construction industry. Kenya and Tanzania are also there and growing fast.

So they are in a very strategic perfect geoposition. Right inthe middle of fast booming economies, raw economies.

Smart move i will have to say.

Uganda will expand due to damand from it giant neighbors. South Sudan is under going a reconstruction and hopefully more will follow, Oil industries in South Sudan and Uganda itself. East DRC is a big importer of steel . Rwanda is booming in it construction industry. Kenya and Tanzania are also there and growing fast.

So they are in a very strategic perfect geoposition. Right inthe middle of fast booming economies, raw economies.

Smart move i will have to say.

absolutely correct like the first gold refinery in the rejoin was opened in Uganda last year it bring in allot of money cos Uganda, Kenya, Tanzania and drc have gold reserves and a large market. now the steel will be much more productive and power wont be a problem as the national grid added 100 MW Egypt plan to build a 1700 mw dam,karuma will begin construction its MW and bujagali dam will be completed 250 MW.

absolutely correct like the first gold refinery in the rejoin was opened in Uganda last year it bring in allot of money cos Uganda, Kenya, Tanzania and drc have gold reserves and a large market. now the steel will be much more productive and power wont be a problem as the national grid added 100 MW Egypt plan to build a 1700 mw dam,karuma will begin construction its MW and bujagali dam will be completed 250 MW.
well as far as i know, i don't think the gold refinery in Uganda has a significant impact on Tanzania's gold industry since it is too small and can not compete with the multi-international facilities that exist in Tanzania!

well as far as i know, i don't think the gold refinery in Uganda has a significant impact on Tanzania's gold industry since it is too small and can not compete with the multi-international facilities that exist in Tanzania!

the gold refinery in Uganda is small but its has made the gold industry in Uganda allot stronger. well see i hope they expand .

the gold refinery in Uganda is small but its has made the gold industry in Uganda allot stronger. well see i hope they expand .

But for it to expand, means Uganda will need to produce more gold , the gold refinery was being used by DRC, but there is one U/C now, almost complete, there will also be another one built in north east part of the country near Ugandan border.

Anywho. The Steel and Iron Smelter will be profitable due to fast growing economies around Uganda. That was a smart move by the investor. He's opening it at the right moment.

NRM to boost business – Nsereko
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Kampala city mayoral candidate, Ssematimba (left), singer Jose Chameleone (centre) and Nsereko at a rally in Kisenyi
By Brian Mayanja

MUHAMMAD Nsereko, the NRM parliamentary candidate for Kampala central, has told market vendors in Kisenyi, a city suburb, that it has never been a Government policy to levy heavy taxes on small scale businesses.

He said there was no way the Government would boost Prosperity for All programme among the vendors when market dues were high.

“NRM is a pro-people party. That is why we have managed to govern this country well. Those trying to impose illegal taxes will face the law,” Nsereko said.

He also told the vendors to submit a list of all the problems they face in doing business, saying President Yoweri Museveni ordered the party flag-bearers to do it so that the Government could address them.

Nsereko made the remarks while responding to businessman Hassan Matovu’s comments that high taxes imposed on the vendors’ merchandise would force them out of business.
Eria Kigozi, another businessman, also complained of insecurity in the area, especially in the evening hours.

Nsereko, who is contesting with Muhammad Mayanja Kibiringe of the JEEMA party, Eddy Yawe of the Democratic Party and Kenneth Munaaba, an independent, promised to lobby for development in the area.

He urged voters to shun the opposition parties in next month’s polls, saying they had failed to develop the constituency.

“You have been voting for them for a long time but they have done nothing. This time around vote for the right people who will serve the community,” Nsereko said.

He said the constituency lagged behind because of intrigue in the city management and some leaders were opposing Government programmes.
Nsereko said he was ready to work with President Museveni to improve people’s welfare.

He pledged to start SACCOS in all the parishes to boost people’s ability to borrow and engage in trade.


Sironko gets sh150m water project
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By Paul Watala

THE Government of Japan on Thursday handed over a piped water project worth sh150m to the people of Nalusala sub-county in Sironko district.

The district engineer, Andrew Wasukira, said the project would improve water coverage in the area.
He said over 560 households, with a total population of 3,730 people, would benefit.

Wasukira said the 10-year project would serve Kidowa, Konge, Buwanyama, Nakadote, Bukimia, Bukirya, Buwozoki and Kiyanja villages.
The project he added would save women and children from walking long distances in search of water.

Wasukira said time saved as a result of reduced distance could be used on more productive ventures.

Keiichi Kato, the Japanese ambassador to Uganda, was represented by Eri Ogowa, the secretary at the economic cooperation section of the Japanese Embassy.

East African Community to meet over single currency establishment
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By Dorothy Nakaweesi (email the author)
Posted Monday, January 17 2011 at 00:00
Kampala

Experts from the East African Community will today convene in a four-day meeting in Arusha, Tanzania to negotiate the establishment of the region’s Monetary Union.

The high level task force (HLTF) to be launched by Amb Juma Mwapachu the EAC secretary general, is expected among others, to consider and adopt a methodology of work, review and refine the draft roadmap towards the EAMU.
It’s also expected that experts will agree on the calendar of activities for the negotiations process.

Amb Mwapachu said ahead of the meeting that by inaugurating the HLTF, the achievement of the third pillar of the EAC integration agenda is within reach and the EAC is ready to give full support and commitment to this process.

The primary rationale for a Monetary Union is to reduce the costs and risks of transacting business across the region. The EAC Monetary Union by granting the region a single currency would remove the costs of having to transact in different currencies and the risk of adverse exchange rate movements within the East African Community.

Outsourcing to create 100,000 jobs every year
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By Ismail Musa Ladu (email the author)
Posted Monday, January 17 2011 at 00:00
Kampala

At least 100,000 jobs in the ICT sector will be available for new graduates every year as the government moves to implement an ambitious outsourcing plan.
The announcement was made by Mr Aggrey Awori, the Minister of ICT, during the Third Business Outsourcing Process conference oganised by the Competitiveness and Investment Climate Strategy in Kampala last week.

The ambitious initiative-Business Process Outsourcing, according to Mr Awori, will see young graduates not only take charge of the front office outsourcing - which includes customer-related services such as contact centre services, but also do internal business functions such as human resource, research and accounting outsourcing. He said: “Beginning today we shall begin the process of training students in higher institutions of learning in BOP.”

“With this project, they will be able to earn at least $5 per day while doing the work at their convenience, including working at home,” he added.
BPO involves contracting operations and responsibilities of specific business functions (or processes) to a third-party service provider.

Worth noting is that the government will be encouraging its own agencies and institutions to outsource operations, as well as involve the private sector in the process of outsourcing. The project that targets to create about 100,000 jobs every year will be established upon putting up a call centre Makerere University.

Mr Peter Ngategize, the national coordinator of competitiveness and investment climate strategy, said for the initiative to take off as expected, local providers should train young graduates not only for the local market but also have focus on the global market.

Experts say the project, if well implemented will relax on the pressure of unemployment that is a major challenge to the Ugandan government. BPO is a fairly new global industry and one of the fastest growing sectors in terms of job creation.

Africa IT spending for 2011 to increase by 10 per cent
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By Isaac Khisa (email the author)
Posted Monday, January 17 2011 at 00:00
Kampala

Projections by global research firm, International Data Corporation (IDC) predicts that the IT market in Africa, the Middle East and Turkey will surpass $60 billion this year, up by 12.8 per cent from last year.

IDC says like last year, the growth would continue to be led by the recovery in IT hardware spending, which would grow 14.2 percent. It also predicts that spending on packaged software and IT services would gain momentum and grow 12 per cent and 9.2 per cent respectively.

IDC said IT spending in Africa will be increased by 10 per cent to $25 billion this year. It added that South Africa had recovered well with 8.7 per cent growth last year and an expected 7.5 per cent this year.

Growth in Egypt will continue to be rapid at more than 15 per cent while spending in the rest of Africa will grow 12 per cent to exceed $10 billion this year.

Jyoti Lalchandani, vice president and regional managing director for IDC in the Middle East and Africa, said: "This year IT markets in the Middle East, Turkey and Africa will continue to build on the post-downturn rebound in spending experienced in 2010. Investments to build IT infrastructure will gain further momentum in most countries, particularly in the public sector."
IDC also expects public sector IT spending in key countries in the Middle East and Africa will rise 14.3 percent this year to $2.6 billion.

According to the Organisation for Economic Co-operation and Development (OECD) report, which analyses the usage of ICT in European countries, the information technology industry grew by 3-4 per cent last year, having declined by 6 per cent in 2009. The growth, however, is expected to exceed 4 per cent in 2011 but a return to pre-crisis levels remains unlikely,

The OECD Information Technology Outlook 2010 says that spending by governments and business is set to remain weak in the months ahead in OECD countries, with new investment in hardware or software unlikely in the short-term.

Uganda to benefit from IBM, Airtel IT infrastructure deal
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By Othman Semakula & Justus Lyatuu (email the author)
Posted Monday, January 17 2011 at 00:00
Kampala

Uganda will be part of the 16 African countries to benefit from the IBM and Bharti Airtel partnership aimed at making mobile communications more affordable as the two firms announce the completion of the IT infrastructure agreement.

The negotiations, completed last week, are part of a 10-year agreement, mandating IBM to deploy and manage Airtel’s IT infrastructure, which will provide a platform for the firm’s objective of providing affordable and innovative mobile services throughout Africa.

In an interview with Daily Monitor over the weekend, Mr V.G Somasekhar, the Airtel Uganda managing director said the partnership further emphasises the telecom’s commitment to providing affordable services to its customers.”

Rural poor
He said: “Airtel will do whatever is possible including partnering with reputable firms in order to make mobile communication more affordable to the rural poor.”

Speaking on the partnership, Mr Manoj Kohli, the Airtel chief executive officer (International) said, the deployment of cutting edge technology will provide a positive multiplier effect to customers and business partners through applications that deliver enhanced services, data and processes in real time.” Mr Bruno Di Leo, the IBM general manager, said: "The agreement fortifies our business partnership and efforts in developing smarter telecommunications networks in remote areas of the world."

500m subscribers
Africa represents 10 per cent of the telecommunications global market, with more than half a billion mobile subscriptions and a significant potential for more growth. Mr Di Leo said the demand for new services - such as mobile internet access - spurs the need for a developed network of telecom connectivity.

The agreement will necessitate IBM to provide customer support applications that include customer relationship management, billing, and self-service that will empower customers and provide Airtel a policy approach through which it will deliver innovative and convenient 2G and 3G mobile services. The firm will also deploy a media management system to offer content such as music and video over mobile devices.

Buganda to open own bank
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By Robert Mwanje (email the author)
Posted Monday, January 17 2011 at 00:00
Mengo

Buganda will open a bank to take care of the kingdom’s banking interests, Katikkiro John Baptist Walisimbi has said. He said the bank will offer soft loans to the kingdom loyalists, who will use their land as security, instead of selling it to foreigners.

“We intend to use this bank to protect our land by lending money to whoever intends to sell his/ her land. We would have saved our land from changing ownership and on return of the advanced money, we will return the land and land title,” the premier said during the launch of the Luganda dictionary on Saturday.

Start up capital
Flanked by Kabaka Ronald Muwenda Mutebi, Eng. Walusimbi said the kingdom has already established avenues to get start-up capital for the project. “We have resolved to start this project as Buganda Investment Trust Fund. We shall start operating with funds from friends and sales collection from this dictionary,” he said, adding that several Baganda had lost chunks of valuable land in exchange for ‘meaningless’ money.

Kabaka Mutebi said the introduction of the Luganda dictionary will promote the language by simplifying pronunciation, writing, meaning and understanding of Luganda literature. “Luganda is a rich language, that’s why people should understand its proper use and draw others to learn it. The Luganda Association has done a commendable job to write this dictionary as it simplifies work for Luganda learners and teachers,” Kabaka said.

The Luganda Association chairman, Mr Bagunywa Nkalubo, said the committee has compiled the dictionary for over 30 years. The first Luganda - English learner dictionary was first released in 1972.

Promoting Luganda
Recent research reports show that Luganda is spoken by 85 per cent of Ugandans. “Luganda has got all that it deserves to be a national language. It is politics which is trying to fail local languages by promoting Swahili against native languages,” Mr Nkalubo said. The Baganda are the largest ethnic group in the country with eight million people.

Lango to produce sunflower seeds
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By Bill Oketch
EXPERTS from India will support farmers from Lango sub-region to start producing sunflower seeds locally, a sunflower breeder has said.

Dr. Y.G. Shadakshari of Banglaore University of Agricultural Sciences noted that there was low production of sunflower in Lango because farmers cannot afford imported seeds.

He said they would introduce new farming technologies to help farmers survive climate change.

Shadakshari was meeting farmer groups during a visit at Ngetta Farmer Field School in Lira recently.

The meeting was organised by East African Seed, an NGO, for farmers from Apac, Lira, Otuke and Kole districts.
Fred Doi, the manager of Ngetta Zonal Agricultural Research Institute, urged the farmers to engage in vegetable production, noting that vegetables are on high demand.

He said many farmers ignored sunflower growing because of low quality seeds, which do not germinate.
Doi said most factories in Lira used sunflower as a row material and urged farmers to grow it.

“A kilogram of sunflower here is at sh1200,” he said.

Banks resort to alliances to fund companies
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Mr Lalani Sikandar (L), the managing director of Roofings Uganda shakes hand with Stanbic Bank Managing Director, Mr Phillip Odera (R), after signing the syndicated loan agreement last month. Looking on is Mr Aston Kajara (C), the state minister for investment. PHOTO BY ISAAC KASAMANI.

By Walter Wafula (email the author)
Posted Tuesday, January 18 2011 at 00:00
IN SUMMARY

Uganda may not have a developed corporate debt market, but banks flush with cash are taking the syndicated loan route to fund large projects without hitting exposure limits just like in the stock market. Besides the gains to the customers, commercial banks make a killing from the deals as Walter Wafula writes.

Uganda’s financial markets are ripe. It’s now obvious that multinationals like MTN can now get multimillion dollar loans from commercial banks within the economy.

Ten years ago, a corporate boss of a foreign owned firm in Uganda would not waste time to ask his board of directors to raise up to Shs125 billion ($50 million) locally. It was virtually impossible to raise that kind of money from a single commercial bank in Uganda, just like it is today. This is because the financial laws restrict one bank from lending more than $15 million.

However, today, the same corporate boss can confidently tell his directors that he can raise over Shs230 billion ($100 million) from within Uganda. It’s still the same old developing economy serviced by ‘little’ boys in the global financing arena. But some of the boys have become wiser with time, as the market ages and hots up. In the last two years; 11 of them have been able to advance up to Shs415 billion ($182 million) in “syndicated loans” to only three clients. That is not pocket change in an economy that has less than 400 companies that are worth a billion shillings in assets.

A syndicated loan or combined loan in a layman’s language is an advance which is arranged and issued by more than one bank to a single client. Syndication means that the borrower will talk to five banks and tell them to pitch for the job based on the amount of money he or she is looking for, according to Mr Anthony Kituuka, the head of corporate banking at Kenya Commercial Bank Uganda.

Recent beneficiaries
To date, three companies including; MTN Uganda, Kinyara Sugar Works and Roofings Limited, have been able to raise syndicated loans from domestic commercial banks.

MTN and Kinyara started it all by securing $100 million and $18 million, respectively in 2009. MTN sought the money to expand and upgrade its network while sugar company Kinyara aimed at expanding its production capacity. In an interview, Mr Nigel Williams, the MTN Uganda chief finance officer, said the required capital was outside the reach of all banks in Uganda since the company wanted to escape the foreign currency exposure on US dollar denominated debt.

The two deals were at the end of last year followed by the Roofings Rolling Mills’ $64 million (Shs147 billion) syndicated loan. The money is meant for the expansion of the firm’s production capacity.

Roofings, which controls 60 per cent of the steel merchandise in Uganda, has ventured into galvanised products in an attempt to meet regional demand for galvanized products. Rolling Mills, a subsidiary of Roofings Limited in Lubowa, signed the loan deal with a group of 10 banks.

The lenders
The financiers of these multibillion shillings deals include; Barclays Bank, Standard Chartered Bank, Stanbic, KCB, Citibank, Bank of Africa, United Bank for Africa, East African Development Bank, International Finance Corporation (IFC) and the Eastern and Southern African Trade and Development Bank (PTA Bank), Ecobank, DFCU Bank and Housing Finance.

However, the Uganda syndicated loan league has largely been dominated by the big four; Standard Chartered, Barclays Bank, Stanbic Bank and KCB. This is because they have the backing of their parent companies. KCB might appear to be small because it’s relatively new but it showcased its financial competence by contributing $20 million (Shs 46 billion) in the MTN deal – the biggest amount contributed I must add.

In the past, syndicated loans have been offered by international banks with interests in development projects in Africa. For instance; the World Bank, German Development Bank, African Development Bank and IFC are financing the construction of the $800 million Bujagali Hydro Power Project in Jinja. Domestic banks and companies appear to have borrowed a leaf from their international peers to do bigger business in the economy and spread their risks.

Quality of recipients
Syndicated loans are usually sparked off by clients like MTN and Roofings who are in need of finance. Mr Kituuka told Business Power that to qualify for this kind of finance, a company must have an international reputation. The financing model suits multinational companies like; MTN, Shell, Total and extremely large local conglomerates like; Mukwano, BIDCO, Mehta and Madhvani Groups as well as companies investing in immense energy projects. “Even companies like Mukwano struggle a bit because they are not well known internationally,” he said. “You must be the biggest or the number one in the market. You must also be big regionally.”

Having an international name is relevant for a firm’s success because even the financing is usually approved at the international level. “These are approved by boards of directors in places like London.” But above all, the company must conform to international best practices in its business operations and accounting standards. This is simply because at the time of loan application, the auditors of a company’s books will scrutinise its financials according to global standards not domestic standards.

Why it pays
In return for the scrutiny, beneficiaries of these syndicated loans are charged interest rates on loans in the range of 4-5 per cent per annum compared to between 18-30 per cent on the regular loans. “The deals attract very fine pricing when it comes to interest rates,” Mr Kituuka said.

The loans are cheap because; international deals are based on the London Interbank Rate Offer Rate (LIBOR). The LIBOR is fixed on a daily basis by the British Bankers’ Association and is pegged on the rate at which the Bank of England lends to other banks. The rates are based on tenors between 3-12 months in a year. “The rates move everyday because big money keeps moving in and out of the economy,” he said.

This makes the interest rate flexible or floating as opposed to rates in Uganda which are usually fixed. At the time of our interview, the banker said MTN was paying an interest rate of about 4.4 per cent on the $100 million deal. But that’s not all. Such deals come with global recognition and earn the company respect from its peers. Mr Williams said MTN scooped the 2010 EuroMoney Africa Telecoms Deal of the Year Award because of its $100 million transaction.

The EuroMoney Deals of the Year are as seen as benchmarks and market shaping deals for today’s difficult environment. MTN raised the money internally at a time when the global financial crisis was bringing down international financial institutions on their knees. No global bank was ready to lend such amounts of money to a company in the developing world.

Besides the gains to the customers, commercial banks make a killing from the deals. Business Power learnt that the best negotiator in the deal picks up the best interest rate on their advance. However, banks with poor negotiation skills end up getting raw deals on their money.

For instance the banks that accepted to get paid back in Uganda shillings equivalent on the MTN deal, are feeling the pinch of their decisions. They are losing out on the huge appreciation of the dollar against the local currency while those that opted to get their payments in dollars are banking a lot more in interest. But it could be the reverse in another deal if the dollar depreciates rapidly. “It’s about business; it’s about smartness, understanding and negotiation skills,” Mr Kituuka said.

Heterogeneous conditions
The key challenge was the timing of going to the capital markets to secure the financing required. MTN managed to raise its loans because it could afford to hire a great team to convince many lenders that it’s a solid business. Another challenge, according to Mr Williams, is getting all the banks in the syndication to agree to common terms and conditions. Some will offer their money at higher interest rates while others might settle for less despite the fact that only one bank - the Mandated Lead Arranger and Global Co-coordinator, comes up with a common rate for the client.

The future with oil
Securing syndicated loans might not be everyone’s game but it is a trend that is set to rise even higher for companies that are ready to play in an oil and gas producing economy. This is because; more companies are going to be for multibillion shilling loans to service companies like Tullow Oil.

“When the oil comes out, the money needs are going to be so high that the banks in Uganda will not handle,” Mr Kituuka said. For instance there is one company that wants to buy about 300 trucks to provide logistics services to the oil companies. Each truck costs $100,000 meaning that the requirement is $30 million. Yet, the law requires that a bank lends at most $15 million. He said the only way around it for some clients will be syndicated loans.

Although the financing option is currently available to only large corporations, Small and Medium Enterprises that aspire to raise that kind of financing have been advised to start preparing now.

The expert said they should look at the best practices of the firms that have acquired syndicated loans. While they may not directly secure large loans from the top players, there are chances that they will get loans from smaller banks that want to service the next level of borrowers. But the local stock market is also open.

Gaining access to such loans will be a big boost to the economy in terms of job creation and economic development, going by the state minister for investment, Mr Aston Kajara’s comments on the MTN syndicated loan.

Uganda sees coffee prices supporting 2015 target
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KAMPALA - Uganda expects good coffee prices to support a government aim to boost output to a targeted 4.5 million 60-Kg bags of exported coffee annually by 2015, from a forecast 3.1 million bags in 2010/11, the regulator said.

Uganda is one of Africa's major exporters of coffee and earnings from the crop are a key source of foreign exchange inflows for east Africa's third-largest economy. Farmers in the country mostly cultivate the Robusta bean.
"The prevailing prices are supportive to the coffee production campaign, which envisages Uganda's exportable production hitting 270,000 tonnes (4.5 million bags) by the year 2015," the Uganda Coffee Development Authority (UCDA) said in a report seen by Reuters on Monday.
The government campaign targets helping farmers access cheap credit and agricultural inputs as well as funding research into high-yielding hybrid coffee plants.
Uganda's coffee output peaked in the late 1990s when the country exported an average of 4.2 million bags annually. However, disease ravaged subsequent crops, cutting output to a low of 2 million bags in the 2005/2006 (Oct-Sep) season.
UCDA forecasts Uganda will export 3.1 million bags in the 2010/2011 season from last year's 2.67 million bags.
Farm gate prices have risen to average 2000 shillings ($0.844) per kilogram of dry, unprocessed Robusta beans from 1700 shillings in October, the regulator said. It added Uganda's Robusta exports have been declining because of unfavourable weather conditions and outbreaks of pests.
Uganda earned $28.69 million from 237,747 bags exported in December, which was a 30.6 percent rise from earnings in the same month a year ago, UCDA said in the report.
In the first quarter of the 2010/2011 (Oct-Dec) coffee year, Uganda shipped 692,485 bags, down from 705,277 exported in the same quarter last season.

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Uganda's Three Biggest Sugar Producers Increased Output by 3.4% Last Year
By Fred Ojambo - Jan 17, 2011 2:20 PM GMT

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Sugar output at Uganda’s three biggest producers climbed 3.4 percent in 2010 after they expanded their operations, the Uganda Sugar Cane Technologists Association said.

Output increased to 292,052 metric tons in the 12 months through December, from 282,386 tons a year earlier, the association said today in an e-mail from the capital, Kampala. The three plants announced plans in 2008 to spend a combined $100 million expanding capacity and increasing power generation.

Production was 6.8 percent lower than an initial forecast of 313,240 tons, and 2.6 percent below a revised projection in November of 300,000 tons because of reduced cane supplies to two of the producers, according to the association.

Supplies to Kakira Sugar Works Ltd., the biggest producer, and Sugar Corp. of Uganda Ltd., the smallest of the three plants, were affected by a drought, it said.

Output by Kakira, owned by Madhvani Group, which says it is the biggest private investor in Ugandan industries, fell 4.3 percent to 151,110 tons. Kinyara Sugar Works Ltd., the second- largest, produced 90,512 tons, up 19 percent from a year earlier. Kinyara is 51 percent-owned by Rai Group, a Kenya and Mauritius-based agro-forest company.

Production at Sugar Corp., which is jointly owned by the Ugandan state and Mumbai-based Mehta Group, rose 4.3 percent to 50,430 tons.

The three plants account for about 98 percent of the East African country’s annual production, with two new plants accounting for the rest, according to the association.

Uganda’s government plans to sell its 49 percent stake in Kinyara in an initial public offering this year, the country’s Privatization Unit said in March.

New Vision website ranks 4th in Africa
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By Raymond Baguma
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THE New Vision newspaper website has been ranked fourth out of 50 top most popular newspaper websites in Africa by an Australia-based global ranking firm.

4 International Media & Newspapers is an international directory and search engine which focuses on worldwide newspapers with 7,000 newspapers ranked by web popularity in 200 countries.

In its latest rankings, New Vision is ranked fourth in Africa. In the first place is the Al-Ahram newspaper of Egypt, followed by The Times of South Africa, with Mail & Guardian Online in third place.

New Vision is 146th in the world rankngs. The New York Times is at number 1.

Within the East African region, New Vision is ranked ahead of Daily Monitor which is in 18th position. Kenya’s Daily Nation holds the 13th position.

Rwanda’s New Times newspaper is ranked 25th, while The East African is in 33rd position and The Arusha Times of Tanzania lies in 40th position.

On its website; www.4imn.com, 4 International says the aim of the ranking was to provide an approximate popularity ranking of worldwide newspapers based on the popularity of their websites.

“This helps international readers, media and public relations professionals understand how popular a specific newspaper is in a foreign country.

"We do not, by any means, rank newspapers by the quality of their journalistic effort or reputation,” the website says.

The ranking is also based on the most visited websites, according to the search engines of Google, Yahoo and Alexa. New Vision’s web address is at www.newvision.co.ug, is the flagship title of Vision Group media group.

Vision Group which published the New Vision is listed on the Uganda Stock Exchange and boasts of subsidiaries that include five radio stations, four magazine titles, two television stations and eight newspaper titles.

The Editor in Chief, Barbara Kaija, said: “It is a vote of confidence that online readers find value in New Vision. It also confirms that readers use New Vision for research, as our stories are professionally done.”

The Vision Group head of digital, Louis Jadwong, said: “It confirms that the content provided by New Vision on all platforms is strong. The ranking simply gives us more reason to raise the bar even higher especially online. We will do that this year.

Helping Hoima youth start business
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Rwabwogo speaks at a joint meeting of all Hoima Municipality Youth SACCOs
By Odrek Rwabwogo

UGANDA’S economy is not creating jobs fast enough to match the production of graduates by the many degree, diploma and certificate institutions that have sprung up in the last 20 years.

Many colleges and secondary schools have become universities and award diploma and degrees without adequate planning, resources and sometimes, even purpose.

What used to be single strand units in class has suddenly become degree courses that students are required to specialise in.

For example, Business Administration courses have been so split in universities that almost each unit that used to constitute a semester paper now is a degree course.

This has consequences. Students are graduating without broad knowledge and have limited appeal on the job market. They need a lot of re-training in order for them to make sense to businesses.

When this is combined with the wrong attitude that stresses passing exams and no practical experience or skill, it drives so many young people onto the streets who have no idea how to live. They end up angry, resentful and hopeless.

Victor Frankel in his book “The search for life’s meaning” says that unemployment can be equated to a concentration camp! An unemployed person wakes up to no plan or goal and the limitlessness of the time it will take to find a job, creates hopelessness deriving the person of any purpose for living.

In a way, our high rate of unemployment is a product of liberalisation of education. Ugandans needed freedom to go to school at whatever age and timing of their choice and the NRM government guaranteed this.

With over 500,000 graduates and certificate holders joining the job market annually, we need a new approach to job creation, one that takes the responsibility of creating jobs into the hands of the graduates themselves.

The strategy is to get young people return to their areas and become vanguards of change through starting their own businesses. Government can only create a supportive infrastructure but can not put a job into each person’s hands.

The Uganda Youth Convention (UYC), an umbrella body advocating for job creation for youth in Uganda, has been in Bunyoro for the last two weeks, sounding out local leaders and the youth of the region on a new approach to job creation.

The UYC wants to hold the first regional jobs convention in Hoima town, which will take in 100 youth from each of the districts in Bunyoro.

The convention will show young people how to spot opportunities around their home areas and start their own businesses.

Since Government has already committed resources for a venture capital Fund called the School Leavers Fund, everybody interested in the future of Uganda, should gently instruct the youth to train in business skills and do what they (youth) like than wait for politicians to find them work. A nation of entrepreneurs is a beacon of hope for Africa.

Leaving the responsibility of finding work for the youth in the hands of politicians is wrong. The majority of politicians are selfish and help where it only benefits their vote appeal.

The competing interests of a narrow middle class in Uganda cannot be accommodated through the political route.

In a society where the process of state formation was not fully consummated because of colonialism, people see their representation in government as tribe and clan and therefore ask government for jobs as such.

A strong entrepreneurial base started by young people will save Uganda’s next generation from trouble and create a Uganda and African wide positive feeling. That for us is true patriotism that doesn’t need so much teaching.

Even the pressure for creation of districts all over the country is partly founded on the need for jobs and tribal representation. For example, Bunyoro will have four new districts of Kakumiro and Kagadi (out of Kibaale), Kigorobya and Kikuube (out of Hoima) created next financial year, largely to respond to a need for more resources from the centre and for jobs for the local elite.

However the UYC, believes that the foundation of a democratic and free society is a strong economy which provides the engine for growth. A good economy which accommodates everybody’s interest is based on businesses allowing each one of us to do what we are passionate about than wait for a government job.

Most Ugandan parents tell their children to go to school and get a good job. They never tell them to go to school and start their own businesses.

This mentality is what UYC is attempting to change in Bunyoro. Although districts provide an opening for the youth, the opportunities are too limited compared to the number of graduates coming out of each region. Bunyoro alone graduates well over 2000 people annually.

No amount of districts created in Bunyoro can absorb this number. Only business can. Bunyoro is awash with opportunity and there is a feeling of optimism in the air.

There are tourists, long distance heavy truckers and mechanics, fishing companies, beef and diary products businessmen, grain dealers, oil and gas personnel flocking into the region in huge numbers. Many of the key areas now have power lines and new roads are being paved to facilitate this economic change.

The new roads in Bunyoro coming up now are Hoima-Kigorobya and Biiso- Buliisa. The Hoima-Buseruka-Kabale-Kaiso road is complete and due for tarmac while the Kigumba-Hoima-Kagadi- Kyenjojo is under compensation process for families affected. The Muhooro-Bwikara-Kyaterekera-Ndaiga road has been done.

This network of roads will completely transform Bunyoro into an economic bee hive. What is remaining now for the region is for the leaders to open the eyes of young people to shift their focus from searching for government jobs, to creating their own businesses and tap into this change.

The signs of this are becoming visible. For example, in Kiziranfumbi subcounty of the new district of Kikuube, there are four rice hullers because of the new power line. This has pushed the price of rice to sh1,200 per kilo making the farmers there some of the richest in the area.

This story is duplicated with maize farmers, whose price has gone up lately, from sh50 per kilo to about sh200.

In all the trading centers with power, there were many youth groups engaged in machine welding, refrigeration of food, telephone charging and sell of air time products that we met and helped set up some income generating SACCOs.

It will take continuous teaching by the local leadership to calm the temper of some of the Banyoro people about this positive influx. Bunyoro, from ages back, has been a net attractor of all talent since Kabalega days.

This new influx brings new opportunities and ideas for economic change that will lift the region out of poverty. But Bunyoro had a bad history of double colonialism engendered by the British occupation and some Mengo chiefs.

The people are so sensitive to any new arrival and express this through the politics of land. Land without production is however, unhelpful in fighting poverty.

One of the ways of ensuring a solid foundation for growth is the right of ownership and titling of land for the peasants. This will ensure that the children of the peasants can get access to cheap loans to transform their areas. For example the commercial Agriculture loan scheme with 10% interest, has not been fully utilised here because of lack of awareness and land ownership. This should be a key priority for the leadership not the wrangling for positions that is so scathing in many of the districts of Bunyoro.

The Uganda Youth Convention is advocating for a strong vocational school in Bunyoro that will teach artisanship, carpentry, nursing, tourism and hospitality, agriculture and equipment operators so that a majority of the youth do not need to leave the region in search for work.

They need to start their own businesses to support the growing economy of the area and supply the eastern DR Congo that requires goods and services from Uganda.

The closest effort to this is by Dr. Mwalimu Musheshe’s Uganda Rural Development Training in Kagadi.

Roofings commissions Shs23b production line
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By Stephen Wandera (email the author)
Posted Wednesday, January 19 2011 at 00:00
Kampala

Roofings, one of East Africa’s largest metal manufacturers has commissioned a new production line worth Shs23 billion. The new line will see Uganda save up to Shs250 billion annually spent on imports of steel plates and tubes.

Mr Sheikh Arif Rashid, the Roofings Limited technical director told journalists while commissioning the line in Kampala last week that the new tube mill will be used in fabrication of oil drillers, bridges, boats, ships, fuel tanks, electric transmission towers, truck bodies, and dams among others.

The new line has a capacity of 6,000 tonnes per day. Uganda imports about 8,000 tonnes of steel plates and tubes per month from Kenya and South Africa. Each tonne costs about $1,150 plus transport of about $103.

Mr Lalani Sikandar, the Roofings chairman said the investment is expected to create about 60 direct new jobs and a number of indirect ones for Ugandans.
He said the firm now has capacity to serve the Great Lakes Region. “For the first time we shall export galvanized wires to Kenya, with a booking of 600 tonnes every month up to march,” he added.

Disagreements could derail source of Nile investment
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Sustainable?: Some of the tourists taking pictures at the Source of the Nile craft shops just above the river
THE blocking of a multi-million dollar investment in a zoo at the world-famous Source of the Nile has generated a fresh debate over the development of Jinja as a tourism destination.

Politicians led by Jinja mayor Baswale Kezaala say the zoo will more than double the town’s annual earnings from the current sh40m to sh100m. But, some councillors are strongly opposed to the initiative. Gerald Tenywa recently interacted with the feuding parties

“To gain more from tourism, visitors should spend more time at the Source of the Nile. This means greater revenue for Jinja municipal council,” Baswale Kezaala, said at the end of last year.

Currently, tourists visiting the Source of the Nile bring in sh40m every year. This, according to Kezaala, could rise to sh100m annually with the proposed establishment of a zoo at the toursit site. However, the idea has been opposed by what Kezaala calls a clique of councillors influenced by political motives.

Councillors on the environment and public health committee rejected the proposal when it was brought before them recently.

Councillors speak out
Gladys Nakajuwa, a member of the committee, says their decision was not malicious or politically motivated as the mayor suggests. The zoo proposal was thrown out on technical grounds, she adds.

The committee, Nakajuwa says, could not approve the investment without viability studies.

“We should know who the investors are and how much they are going to invest,” says Nakajuwa. The mayor has to demonstrate how the zoo is going to generate cash and contribute to the sustainability of Jinja, she says.

There is fear of land grabbing by politicians.

“The investors should be open because we cannot approve a wildlife investment that is going to end up grabbing people’s land.”

She adds that they do not know how much land the investment would cover.

“We are talking about prime land. Why is the mayor rushing, and shunning critical questions? He should give us answers, instead of running around saying we are anti-development,” Nakahuwa says.

She says the Government is also working on a comprehensive tourism plan for the Source of the Nile and the entire course of the river from Jinja to Nimule.

“But when this ‘small’ developer came asking for land to set up a zoo with only five animals, including a camel, a donkey and a crocodile, some of us became suspicious.

“This investment is not one of the attractions we want in this town,” she argues.

Mayor reacts
The mayor, who is a DP member, insists that the committee, dominated by the ruling Movement party politicians, has occasionally frustrated his initiatives.

“My focus is to bring back Jinja’s lost glory. But, I can’t work with councillors who are working round the clock to frustrate such an investment. More revenue means better livelihoods,” he says.

Kezaala says he wants the Source of the Nile to get its deserved place. He had earlier embraced Malaysian investors, who were sent by the Government, but they were fake.

Fortunately, a local pastor came to his rescue with the idea of the zoo, which Kezaala pushed to higher authorities hoping that it would get cleared.

He also points out that Skelletea, a town in Sweden, which has a partnership with Jinja town, was willing to provide part of the investment needed to start the zoo.

“I do not understand why some councillors were elected as policy-makers, if they cannot steer such investments,” says Kezaala. “The zoo is not going to take away anything. It will instead add value to what we have,” he reasons.

He says, although the Government may have a programme for the tourist site, Uganda is a decentralised country. “If we follow the reasoning of the councillors, then decentralisation loses meaning,” says Kezaala. “We are the authorities that should take decisions?”

Technical committee
Simon Kaita, the tourism development officer for Jinja municipality, told Business Vision that the technical people do not have any problem with the proposed establishment of the zoo.

“I do not have anything against the project. The problem is with the politicians,” he says. He says the zoo would be in place by 2012.

But, he adds: “If there is no political will, serious tourism investments will not take off in this town.”

Councillor George Izale, a member of the environment and public health committee, says study tours to Mombasa, Dar-es-Salaam and the Wildlife Education Centre in Entebbe opened the door for development of a zoo at the Source of the Nile.

“We should add value to the Source of the Nile to raise more revenue. I belong to the ruling movement party, but I have put my political differences with the mayor aside to work for better services. We are serving the people not the mayor,” he says.

Second biggest revenue earner
Jinja Taxi Park is the top revenue-earner for the municipality followed by the Source of the Nile. But Kezaala contends that with the establishment of the zoo, the Source of the Nile will take the mantle as the top revenue-earner.

Sorry state
A visit to the Source of the Nile reveals some of the weaknesses of the municipal council when it comes to promotion of tourism.

There are no professional guiding services, creating room for part-time idlers to steal the show. As tourists take self-guided tours, they fall prey to the part-time ‘guides’. These ‘guides’ crudely answer the inquisitive visitors who want to know more about the history, politics, and the culture of the local people.

At the end of their ‘presentations’, they ask for money.

This, according to sources within the municipality, has been encouraged by politicians who protect the ‘guides’ because they are “our voters.”

As if replaying a scene where Jesus encountered traders selling their wares in a temple, noisy bars, handicrafts kiosks and passenger boats are making brisk business at the Source of the Nile without licences. Most of them run to politicians for protection when the municipal authorities attempt to tax them.

Some of the boats plying the spot where the river flows out of Lake Victoria operate without life jackets.

Information on the Source of the Nile and the activities tourists can enjoy is lacking. The only available information is on billboards advertising Bell beer.

The billboards were erected when the Source of the Nile was given a facelift ahead of the Commonwealth Heads of Government Summit in Kampala in 2007.

“The Source of the Nile is Jinja’s cash cow, but the council is not doing enough to improve on it,” says Paulo Babi, a municipal tax collector at the Source of the Nile.

“We have free-ranging monkeys that excite tourists, if more wildlife is introduced, more tourists are likely to come.”

Uganda eyes 4m bags of coffee
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UGANDA expects good coffee prices to support the Government’s aim of boosting output to a targeted 4.5 million 60-kg bags of exported coffee annually by 2015. This would be rise from a forecast 3.1 million bags in 2010/11, the regulator said.

Uganda is one of Africa’s major exporters of coffee. Earnings from the crop are a key source of foreign exchange inflows for east Africa’s third-largest economy. Ugandan farmers mostly cultivate the Robusta bean. “The prevailing prices favour the coffee production campaign, which envisages Uganda’s export production hitting 270,000 tonnes (4.5 million bags) by 2015,” the Uganda Coffee Development Authority (UCDA) said in a report.

The government campaign targets helping farmers access cheap credit and agricultural inputs as well as funding research into high-yielding hybrid coffee plants.

Uganda’s coffee output peaked in the late 1990s when the country exported an average of 4.2 million bags annually. However, disease ravaged subsequent crops, cutting output to a low of 2 million bags in the 2005/2006 (Oct-Sep) season.

UCDA forecasts Uganda will export 3.1 million bags in the 2010/2011 season from last year's 2.67 million bags.

Farm gate prices have risen to average sh2,000 ($0.844) per kilogram of dry, unprocessed Robusta beans from sh1,700 in October, the regulator said. It added Uganda’s Robusta exports have been declining because of unfavourable weather conditions and outbreaks of pests.

Uganda earned $28.69m from 237,747 bags exported in December, which was a 30.6 percent rise from earnings in the same month a year ago, UCDA said in the report.

In the first quarter of the 2010/2011 (Oct-Dec) coffee year, Uganda shipped 692,485 bags, down from 705,277 exported in the same quarter last season.

Uganda stock market bank shares in demand
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By Paul Busharizi

IN a trend that opened the year, bank counters continue to experience unmet demand, which has seen two counters hit 12-month highs this week.

On Tuesday, the 75,000 shares on offer were woefully overmatched by the 43 million shares demanded but the share price held steady at sh270. Last Tuesday, demand for Stanbic Bank shares stood at about 21 million shares.

The increased demand on other bank counters resulted in upward price movements on the Bank of Baroda and dfcu counters.

Baroda rose sh10 to close at sh545 from the same time last week, while dfcu gained sh18 to hit sh844, the highest it has been since April 2008.

Demand on each of the two counters stood at just over two million shares, with price movements occurring on relatively small volumes.

The other active counters on the USE this week were New Vision and Uganda Clays.

New Vision continued its downward spiral, ending Tuesday at sh527 compared to sh545 last Tuesday, while Uganda Clays held steady at sh50.

However, share on the cross listed counters experienced big jumps mainly on the back of the weakening Uganda shilling, which by Tuesday evening threatened to touch the sh2,400 mark against the dollar.

East African Breweries sh6,206, Equity Bank sh864, Jubilee Holding sh5,880 and KCB sh702 all recorded gains from last week, with the exception to the rule being Kenya Airways, which shed sh9 to close on Tuesday at sh1,359.

Buhweju farmers get sh20b tea factory, production to increase
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Officials tour the sh20b tea factory being constructed at Buhweju district recently
By Ronald Kalyango

FARMERS in the newly-created Buhweju district are set to benefit from a sh20b tea factory, which has been established in their area.

The Government contributed sh7.7b to the project, while the owners of the factory, Igara Growers Tea Factory, contributed the balance.

“We are thankful to President Yoweri Museveni for fulfilling his pledge. Farmers in Buhweju grow a lot of tea but have always lacked a factory,” said Naboth Mbagirenta, the chairman of the factory owners.

Mbagirenta made the remarks while guiding state minister for agriculture Aggrey Bagiire around the facility.

“The plan to establish a tea factory in Buhweju was first mooted in 1963, but it is the NRM government which has fulfilled the pledge,” said Mbagirenta.

He informed the minister that tea was the leading cash crop in Buhweju district, with about 700 square kilometres under cultivation.

Bagiire said the Government decided to contribute towards the establishment of the factory because tea was Uganda’s third foreign exchange earner after coffee and fish.

According to Bagiire, last financial year Uganda earned $83m in foreign exchange, and tea continues to be among the 10 priority enterprises to be supported in the agriculture sector development strategy and investment plan.

Bagiire noted that tea production would be expanded to old and new potential areas in a planned manner.

He, however, regretted that despite having more than 100,000 hectares of land suitable for tea production in Uganda, only 20% was under active production.

To overcome low production, he said, the agriculture ministry would increase the number of tea processing facilities for maximum exploitation to match the increasing demand.

“I am proud that Kabale and Kisoro districts are gradually taking on tea growing and will be the areas in need of processing facilities to expand the tea industry in a planned manner,” Bagiire said.

He also noted that the Government would soon allocate resources towards the rehabilitation of Rwebitaba Tea Factory in Hoima district.

Once rehabilitated, Ugandan scientists will be facilitated to develop better tea clones and stop depending on clones imported from Kericho, in Kenya, Bagiire said.

“We intend to provide more funding to tea research to enable development of high-yielding tea clones and other appropriate technologies to be disseminated to the farming communities,” he said.

Records from Igara Tea Growers’ Factory indicate that Buhweju farmers have been producing over 11 million kilogrammes of green leaf per annum.

It is this enormous production potential, coupled with excess green leaf supply to Igara factory that justified the need of a factory with two processing lines to be established in the district.

A steering committee of about 11 members has worked with Igara to ensure the smooth implementation of the project.

Once the factory is completed, it will open new opportunities for the farmers, Mbagirenta said.

“Tea production is bound to shoot up because farmers will not travel long distances to supply green leaf to the factory,” he noted.

Igara Grower’s Tea Factory has over 3,800 shareholders.

The national annual green leaf production increased from 4.4 million kilorammes in 1995 to over 26 million kilogrammes as of last year, 40% of which comes from Buhweju.

Over 12.6 million high-yielding clonal tea plantlets have been distributed to farmers in Bushenyi over the last eight years.

With contribution from Igara and tea farmers over the next three years, national production is expected to increase to over 35 million kilogrammes, with Buhweju providing about 13 million kilogrammes.

In a 13-page memorandum to President Yoweri Museveni, the managers of the factory want sh5.6b to establish more processing lines to match with the expected increase in tea production.

In three years, they expect annual tea production to increase to 35 million kilogrammes, which will require five lines of production.

They also want the Government to overhaul the road infrastructure in the district to ensure that machinery for the factory and tea leaves are easily transported.

The farmers also want the Government to provide revolving funds to enable farmers acquire inputs for their gardens.

“We have provided farmers with inputs to increase productivity and ensure sustainability but we need Government support for sustainability,” said John Mubangizi, the Igara chairman.

He said in 2010, Igara factory invested about sh2b to purchase fertilisers and weed killers, which they later distributed to farmers at low interest rates.

New Entebbe toll-road to smash cost record
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By Tabu Butagira (email the author)
Posted Thursday, January 20 2011 at 00:00
Kampala

The government plans to begin building a new 54-kilometre thoroughfare connecting Kampala and Entebbe in July but at almost $6 million per kilometre, it will come in as the most expensive road in Uganda -- and one of the most expensive in the world.

Mr Dan Alinange, the spokesman for Uganda National Roads Authority, says they estimate the four-lane highway, to be bankrolled using loan from Export/Import (EXIM) Bank of China, will cost some $300 million (Shs714 billion). The government, however, has opted to borrow up to $350 million (Shs833 billion) from the Chinese “just in case”, he said yesterday.

Chinese constructor
The road will be built by a Chinese firm which will not go through a bidding process because the government waives the requirement for international bidding while choosing contractors for projects solely funded by Beijing such as the ongoing installation at $127.9 million (Shs304 billion) National Data Transmission Backbone and E-Government Infrastructure (NBI/EGI) to bolster Internet connectivity here.

In yesterday’s interview, Mr Alinange said the planned “modern road” will run from Entebbe through Abayita Ababiri, Sisa (behind Akright housing estates) and Busega, enabling motorists to access the city using the Northern Bypass. A section of the proposed road, he said, will link from Ssisa to Kajjansi (on the existing highway) where a major fly-over inter-section will be configured to connect to Munyonyo through Lweza.

The approved blueprint shows that the stretch of the old 39-kilometre highway, which provides international gateway to Uganda, will be re-worked and expanded from Abayita Ababiri Trading Centre up to Entebbe International Airport.

With $350 million borrowed in the project’s name, it would mean a kilometre of the road roughly costs $6.5 million or Shs15.5 billion to build, more than triple the $2 million presently required to upgrade a kilometre of gravel road to four-lane bitumen standard.

The 54-kilometre road, which officials say will have six lanes in some areas, will eclipse the cost of the previously most expensive road, the 21-kilometre Northern Bypass, which cost Shs130 billion up from an earlier estimate of Shs87 billion.

Asked about the pricing anomalies, Mr Alinange said part of the cash will be used to buy land and compensate affected people for property that will be destroyed. “This is not going to be just a ‘normal’ road,” he said, “This is a road which is going to come with all sorts of amenities, lighting and beautification.”

Such official account shows it would cost twice as much ($4 million or Shs9.5 billion) to compensate claimants than build a kilometre of the new road as it emerged that individuals in the know are dashing to acquire property where the road is proposed to pass, so they can pocket hefty sums in compensation.

Toll-road
Prof. Jackson Mwakali, a civil engineer, whom Daily Monitor contacted to provide insight on the project, said he would need to evaluate all its related documents but “the economic costs/value and technical feasibility” matter most. “The feasibility study should show the project makes economic and technical sense,” he said.

Motorists aiming to avoid the characteristic traffic gridlock on the old stretch will have to pay each time they drive on the proposed road, which will be a toll road.

Ministry of Works technocrats say they plan to attach computer chips to every vehicle number plate so it automatically records each time a car comes in contact with the new road and the owners shall be billed every month.

Mr Alinange, responding to our question if billing of motorists would not amount to double taxation, said: “Whoever does not pay the toll, and I don’t think it will be double taxation, will have to use the old highway.”

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Uganda exports sh4b galvanised wires
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By David Mugabe

UGANDA has started exporting galvanised wires to Kenya, marking a turning point in the country’s industrial base despite prohibitive transport costs for the country’s exports.

Kenya has ordered 1,800 tonnes of galvanised wires worth sh4.7b for the next three months from Roofings, the leading steel-maker in Uganda, according to company executives.

Galvanised wires are used for making razor wires and wire nails. Sikander Lalani, the Roofings boss, said the steel sector had made significant progress with the opening up of a new plant at Namanve last year.

This, he said, would save the country over sh200b annually in import bill. Lalani was recently commissioning a new sh23b structural steel plates and tubes production line at Lubowa on Entebbe Road. Structural steel plates and tubes are used in building towers, oil refineries, storage houses, water tanks, bridges, oil tankers, lamp posts and power transmission lines.

These are timely products for the country’s emerging oil sector to cut on the import bill of these steel products, experts said. The galvanised wires are made at Roofings’ new plant at Namanve.

Industrialists say exporting to Kenya points to the opportunities that have opened with a strengthened East African Community. The same products are also a source of raw materials for the Roofing’s plant in Lubowa.

The country’s steel sector produces 1,000 tonnes of galvanized wires every month. Over 400 tonnes are consumed locally, while the rest is exported. There are still huge opportunities for increased production to satisfy the regional markets.

Kenya has been the sole distributor of these products to the eastern DR Congo, Rwanda, southern Sudan and northern Tanzania.

But Uganda will now chew into this market because of its strategic location and position in the Great Lakes region since consumers from these countries will find it cheaper to buy from Uganda.

The country has been importing structural steel plates and tubes from South Africa, Japan and Europe. Roofings will be producing 6,000 tonnes of steel plates and tubes per month.

Despite the progress made by the country’s manufacturing base, the sector is still heavily affected by the uncompetitive infrastructure that makes the products expensive.

It costs about $103 (about sh244,110) per tonne to transport the products from Mombasa to Uganda. This burden is later transferred onto consumers.

The industry was recently boosted by a $64m funding from six financial institutions that will propel the firm to become the largest steel plant in sub-Saharan Africa.

UNRA to use pavers in road construction
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Part of the road section at Kayanda trading centre where pavers were used
By Samuel Balagadde

THE Uganda National Roads Authority could soon start using concrete pavers to reduce the cost of road maintenance and repairs.

Dan Alinange, the spokesperson, said the technology was already being used in developed countries and was cost effective compared to tarmac.Alinange said they had constructed about one kilometre of a road using pavers in Kayanda, Makulubita sub-country in Luweero, where they tried out the technology for five months and found it effective.

“The concrete pavers are designed with specific materials to make them strong to last long and handle the weight of heavy trucks that use the main carriageways,” said Alinange

He said the roads agency would soon start using the technology on some road projects as the cost of maintaining or repairing pavers is minimal.

“It requires only replacing the damaged conrete pavers with the new ones.” The section with concrete pavers is part of the Matugga-Semuto-Kapeeka road the has been upgraded by UNRA.

Shs5b to boost cotton output
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By Isaac Khisa (email the author)
Posted Friday, January 21 2011 at 00:00
Kampala

Gulu Agricultural Development Company will receive Shs5.2 billion ($2.2 million) from the Acumen Fund and Root Capital this year, in order to improve organic cotton output.

The move targets to increase cotton output as well as helping war victims to maintain smallholder farming livelihoods. The funding comes at the time when prices of cotton have tremendously increased in the country due to increased demand on the world market, accompanied by a reduction in production by leading producers.

"We're looking to help farmers go beyond just selling cotton to providing them with a means of livelihood when it is not crop season, such as sesame production," Biju Mohandas, Acumen Fund's East Africa Manager said recently.
He said Acumen Fund will also provide management support to the company.

GADC was started by a South Africa entrepreneur Mr Bruce Robertson, who two years ago was requested by government to take over a cotton ginnery in order to kick-start a cotton-producing ecosystem.

Good soils
Mr Mohandas said northern Uganda has a good geography and soil which has facilitated the growing of cotton for several centuries. “Acumen Fund and Root Capital’s investments will help GADC buy cotton from local farmers, sell the lint to international buyers and provide access to larger markets," said Mr Robertson, who also doubles as the company’s Chief Executive Officer.

"All these components are key to achieving a seamless value chain, maximizing return to the farmers and leading Northern Uganda on its road to recovery."
Uganda’s cotton industry is stabilising, especially after the restoration of peace in northern Uganda, a traditional cotton growing region.

Mr Mohandas said Acumen Fund investment will help spur long-term growth in Uganda. The firm has already invested in Tanzania and Kenya and has plans to expand into West Africa soon. Acumen CEO, Jacqueline Novogratz said GADC has potential to revive Northern Uganda’s cotton industry and empower thousands of small holder farmers.

Uganda projects increased passenger traffic in 2011
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Turkish Airlines is the latest entrant in Uganda’s airline space.

By Dorothy Nakaweesi & Agencies (email the author)
Posted Tuesday, January 4 2011 at 00:00
International Global passenger traffic is set to go up by 5.2 per cent year-on-years in 2011, according to the latest forecasts by the International Air Transport Association (IATA).

Previously, the organisation had forecast a 4.9 per cent rise in passenger demand.

Airlines are also expected to record profits across the industry of $9.1 billion in 2011, said IATA, though this is expected to be a decline on 2010.

IATA’s latest estimates for the full year in 2010 are for an industry net profit of $15.1 billion (up from the $8.9 billion forecast in September). Net margins remain weak at 2.7 per cent for 2010 and falling to 1.5 per cent in 2011.

“Our profit projections increased for both 2010 and 2011 based on an exceptionally strong third quarter performance,” said Mr Giovanni Bisignani, IATA’s director general and CEO.
“But despite higher profit projections, we still see the recovery pausing next year after a strong post-recession rebound. And the two-speed nature of the recovery is unchanged with European airlines continuing to under perform other regions.”
Mr Bisignani also characterised the improvements in terms of profit margins, which continue to disappoint.

“Margins remain pathetic. With a 2.7 per cent net margin in 2010 shrinking to 1.5 per cent in 2011, we are nowhere near covering our cost of capital. The industry is fragile and balancing on a knife edge. Any shock could stunt the recovery, as we are seeing with the results of new or increased taxation on airlines and travellers in Europe,” said Mr Bisignani.

He said the third quarter of 2010 was exceptionally positive in terms of passenger traffic volume.

“Airlines met increased demand by utilising their fleets more intensely. Fixed costs remained constant, passenger yields firmed and the increased revenues went almost directly to the bottom line,” he said.

According to IATA, Africa carriers will see 2010 profits of $100 million move to break-even in 2011.

As with other regions, a capacity expansion of +6.4 per cent in 2011 will outstrip demand growth of +5.5 per cent.

The region’s carriers continue to benefit from a commodity-led economic expansion that is fuelling growth in both regional and long-haul markets, noted IATA.

In Uganda, records from the Civil Aviation Authority (CAA) indicate that the country will have a share of Africa and the global prospects.

Mr Ignie Igundura, the public relations manager at CAA in an interview with Business Power said: “We project both passenger and cargo growth in 2011 especially now that the new operators have come on board and more have been licensed.”

CAA records indicate that Uganda will receive 1.07 million passengers a figure slightly higher than 2010’s 1 million and far better than the previous year (2009) nearly 930,000 international travellers.

Uganda’s cargo exports and imports projections for 2011 are set to increase to about 22,000 tonnes (exports) and about 36,000 (imports), according to CAA.

Mr Igundura says passenger and cargo traffic is still very low.
Mr Igundura, however, said things will get better this year as more operators come into the market.

The latest entrant is Turkish Airlines, which launched its operations in mid 2010.

Some of the new applicants for air service licences who presented and defended their applications at an Air Services Licensing Committee meeting on November 25, 2010 include: Tandrill (T) Ltd, Astral Aviation, Aberdair, Transafrik, Seven Four Eight Air Services, SANA Group (U) Ltd, Orient Lines Africa Ltd and King David Investments Ltd.

Those that applied for renewal of Air Service Licences include: DHL Aviation (Kenya) Ltd, Eagle Air, Mission Aviation Fellowship, Uganda Air Cargo and Aim Air.

CAA said after reviewing of the applications, they will communicate to the applicants on whether their applications are successful or not. The Air Service License is only granted after realisation that the applicant fulfils various technical requirements.

Roofings of Uganda Plans to Build Plant in Rwanda, Times Says
By David Malingha Doya - Jan 21, 2011 6:26 AM GMT

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Roofings Ltd., a Ugandan steel- products manufacturer, plans to build a plant in neighboring Rwanda, the New Times reported, citing Managing Director Sikander Lalani.

Rwanda mainly relies on imports for its steel supplies, the Kigali-based newspaper said. Roofings exports about $52 million worth of products annually, it said

Kamya to upgrade Soroti Flying School
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By Solomon Alenyo

THE Uganda Federal Alliance presidential candidate, Beti Olive Namisango Kamya, has pledged to upgrade Soroti Flying School to a national airport and entrust its management with the locals, if elected into power.

Kamya said peasants pay a lot of taxes to the central government, but the transport network to help peasants get more money is still poor.

“We need to revive the flying school and let the people of Teso have the opportunity to manage it,” Kamya said.

She said it is a shame that the school has over 100 students, but only two are from Teso. Kamya was addressing rallies at Wera and Obalanga sub-counties in Amuria district on Tuesday. She said Soroti Flying School has all the requirements to be affiliated to Entebbe International Airport in order to uplift the transport network in the country.

Kamya said Teso has a poor transport network and as a result, resources in the region cannot be easily sold to the outside countries.

According to the minerals ministry and the Uganda National Bureau of Statistics, Teso has resources such as tin, clay, iron ore, limestone, diary products, silica and granite.

Kamya said her government will invest in infrastructural rehabilitation and development.

She also added that she will guarantee a minimum wage for workers and promote workers’ unions to champion the rights of workers. Kamya said her government will also establish a ministry concerned with job creation and entrepreneurship development.

She said the ministry will focus on helping young people to become innovative and job creators. “It is only until Ugandans wake up that they can realise that their country is heading for doom,” Kamya said.

Uganda opts for local content to avert oil curse
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Foreign petroleum drillers at the exploration area near Lake Albert. Local content aims at training Ugandans to take over such jobs in the oil industry
By Ibrahim Kasita
UGANDA wants a strong local content in the nascent oil and gas industry for its citizens to gain skilled manpower and a competitive supply edge. This is in an attempt to ensure revenues trickles down, averting the resource curse.

The resource curse - less economic growth and more impoverished local communities despite plenty of minerals and oil - has been part of mineral-rich African states despite influx of oil drillers and investments.

“We recognise and attach great value to local content. We seek to expand the economy through value-addition and job-creation,” Simon D’Ujanga, the energy state minister, said.

“We shall utilise international company experiences and learn from them, improving local industries and boost research and technology advancement.”

Local content – building a skillful labour force and development of a base for competitive supply – promotes citizens’ participation in the economy with a view of keeping wealth within.

This is accomplished through capacity building, creating small and medium enterprises (SMEs), as well as offering products and services domestically.

SMEs are the drivers of economic activity and development.

Local goods and services procurement is critical as it multiplies local economic progress through employment, skills, strengthening supplier and local enterprise development.

“It is important that the Government, operators and contractors work together to achieve a competent local supply base of human and material resources,” D’Ujanga emphasised.

The minister revealed that a study for the Ugandan local content development strategies for the oil and gas sector, which will promote indigenous private sector service provision and competitiveness has, been launched.

David Mooney, the Tullow Group supply chain manager, recently said a successful national content delivery requires all parties to become engaged and is about recognising and developing opportunities at all levels and areas.

“National content connects businesses and stakeholders, allowing a successful development,” he said.

The call for the national local content is enshrined in the national oil and gas policy put in place in February 2008.

The policy seeks to ensure optimum national participation in oil and gas activities, which will be achieved through state participation in production sharing agreements through the use of local materials, goods and services, public private partnerships, employment of Ugandans and transfer of skills and technology into the country.

The other objective of the policy is to support the development and maintenance of national skills and expertise.

In a broad sense, this will be achieved by equipping Ugandans with the skills required for the sector through formal and industrial training.

But a lack of skills training and infrastructure means Ugandans will struggle to provide the white-collar manpower or materials the sector needs.

“Many services are available but need to be further development and supported to meet the industry and expectations,” Mooney observed.

“There are opportunities to provide direct and in-direct jobs and services. Specialist services and capabilities will take time and investment to develop.”

Ernest Rubondo, the commissioner for the petroleum exploration and production development, urged local entrepreneurs to take advantage of the presence of international players.

“Ugandan entrepreneurs must step up to the challenge of establishing oil field service companies,” he said.

“A local content study is being undertaken to ensure optimum national participation in oil and gas activities,” he added.

Sugar Output by Uganda’s Biggest Producer May Climb 13% in 2011
January 24, 2011, 3:53 AM EST
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By Fred Ojambo
Jan. 24 (Bloomberg) -- Production by Kakira Sugar Works Ltd., Uganda’s largest producer of the sweetener, may rise as much as 13 percent this year because of improved cane supply and repairs at one of its mills, General Manager Richard Orr said.

Output in the 12 months through December may increase to between 160,000 metric tons and 170,000 tons, he said by phone today from Kakira, in eastern Uganda. The company produced about 151,110 tons last year.

“The factory is now working better” after Kakira solved a power problem at one of its two mills, he said. Production may then climb to 180,000 tons by the end of 2013 following the completion of a $100 million expansion program, Orr said.

The supply of cane from its own farmland is forecast to increase while independent producers are also expected to boost sales to Kakira, he said. “There will be no problem with cane supply, although the cost of transportation could be a problem for farmers.”

Kakira, owned by Madhvani Group, plans to invest another $100 million on electricity production and ethanol projects, Orr said. Under the plans, ethanol will be blended with gasoline and could reduce the cost of fuel imports by Uganda by as much as 10 percent a year, he said, without commenting further.

The company, which already generates 22 megawatts of electricity from bagasse, made from crushed cane stalks, plans to boost power output to 45 megawatts, it said in March. This would allow it to supply 30 megawatts to the national grid, it said at the time.

Kakira, together with Kinyara Sugar Works Ltd., the second- biggest producer, and Sugar Corp. of Uganda Ltd., the third, together account for 98 percent of national output, according to the Uganda Sugar Technologists Association. The three companies produced a combined 292,052 tons last year, it said on Jan. 17.

Uganda is sub-Saharan Africa’s fourth-biggest producer of the sweetener after Sudan, Malawi, and Tanzania.

Government takes over MV Kalangala
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MV Kalangala after docking at Nakiwogo from Mwanza
By Samuel Balagadde

THE transport ministry will temporarily manage and operate MV Kalangala until a new company is identified to take over its management.

The move follows the expiry of a three-year contract awarded to Mulowooza and Brothers Company’s to run the vessel.

The ship, which plies the Nakiwogo (Entebbe)-Kalangala route, was on Sunday returned from Mwanza, Tanzania, where it had been taken for routine inspection and repair.

It is expected to resume operations after the transport ministry chief mechanical engineer has ascertained its sea-worthiness, a source from the ministry said.

He also revealed that several companies, including Mulowooza and Brothers, have already submitted bids to operate and manage the vessel.

Slow growth for e-commerce as local internet use rises
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CONNECTED: Uganda’s narrowing digital divide is yet to yield substantial benefits in form of e-commerce. File Photo

By Eunice Rukundo (email the author)
Posted Tuesday, January 25 2011 at 00:00
A 2010 report on digital life trends among Ugandans indicated a tremendous growth in the use of the internet by Ugandans. The report, compiled by TNS Research International, placed 22 per cent Ugandans logged onto the internet at any given time in a day, and an overall 7.8 hours spent on the internet per week.

Indeed, Fred Otunnu, the manager communications and consumer affairs at Uganda Communications Commission agrees that internet use has on the whole grown tremendously over the last four years. “There has been a tremendous upward embrace of digital technology by Ugandans generally owing to an increase in service providers and landing various cables,” explains Mr Otunnu.

These new developments, Otunnu elaborates, have increased capacity to deliver faster cheaper internet while enabling the provision of different packages for commercial and domestic use like the modems of differing capacities.
Uganda is in fact currently rated 18th on the global list of highly engaged internet users with 44 percent engagement rate, according to the TNS report. This puts it second to Kenya in the East African region, which ranks seventh globally with 51 per cent engagement rate, and slightly higher than Tanzania that came 26th with the lowest engagement rate of 42 percent in the region.

Potential for business
Despite the impressive growth, however, the report warns that digital media still remains only an emerging media not yet ripe for e-commerce as Ugandans continue to elude e-shopping. Sam Zaramba, the sales manager for the e-paper at the Daily Monitor says: “The only Ugandan market for online products is that of Ugandans in the diaspora. Here at home, it is a struggle.”

Mr David Mwandha, who runs musicuganda.com which uploads and makes available local music and information about local artistes, their music and arts, agrees with MrZaramba. “Musicuganda.com has been a great success but the majority of its clienteles are Ugandans abroad whose only access to anything Ugandan is the internet,” he says.
TNS in its report reveals that only about six per cent of online Ugandans use the internet to research purchases, and even fewer actually purchase online. The internet can for now thus only best be used as a brand and advocacy building tool as opposed to a transactional platform, ensuring contact through social media is informative as well as inspirational looking to integrate video and applications into campaigns. 40 per cent of consumers that have made one or more brand friends online did so to get more information on that brand. Conversely only 17% have been influenced by promotions or special offers.

It is in the meantime wise to focus immediate investments in traditional media, which anyway still attracts far wider audiences than the internet. Compared to digital’s 22 percent audience at any given time on a given day, there’s 64 percent watching television, 61 listening to radio and 48 reading newspapers.

Inaccessibility versus payment limitations
The report sites continued relative inaccessibility to internet as the main reason for this limp in a trend whose significance has been embraced in the more developed countries. Even though there are more people accessing internet today than there were four years ago, only a small percentage of these can access it at their convenience, on their phones for instance, or in their homes like in the more developed countries like the United States where e-commerce booms. 77 percent of all Ugandans internet users access it from internet cafes, 25 at work, 22 at home and only eight on mobile devices.

“It is only logical therefore that most users would not waste the opportunity online purchasing items like groceries or cloths that they can buy at the cafes doorsteps,” agrees Mr Zaramba. Instead, 90 per cent of Ugandans spend their hard earned time on the internet socializing far and wide through social networks like emails and face book or the like.
Zaramba is also quick to note that there is the issue of the high levels of poverty versus the total cost of accessing the internet which includes things like electricity, computer devices and even the educations to use the internet. Yet those that have ventured into e-business have also noted even a greater hindrance that the report doesn’t point out; the limitation of online payment mode. Mr Mwandha explains that it takes special services like the provision of credit or debit card services that can enable online payment to permit e-commerce which most Ugandans here have no access to. “Which is another reason why the Ugandans abroad engage more in purchasing goods online; they have access to such services,” he argues adding, “Someone will therefore not waste their little money negotiating a deal on the internet when they will eventually have to meet up with the seller to pay up and seal the deal.” Mr Mwandha also notes the issue of trust where he says few Ugandans will leave the choice of their desired purchase to the seller entirely or contentedly base their purchase decisions only on the information given online.

Overcoming the challenge
Digital businesses are at the moment making the best of whatever services there are to enable e-commerce but most are targeting the Ugandans abroad. “We use mobile money for now but that’s for just a few Ugandans here who are interested in the e-paper,” says Mr Zaramba.

Mwandha concentrates on attracting as much activity to his website to lure advertisers whom he has decided to concentrate on for remuneration. “Otherwise uploading music or information on the site and accessing it is absolutely free,” he says.

Mr Innocent Wemesa, the manager proximity, remote banking & card centre at Standard Chartered Bank also says banks are recently providing such services as would enable e-commerce which more Ugandans are taking them up. “Standard Chartered Bank debit cards can for instance be used at Point Of Sale (POS), online and ATMs worldwide. We have also recently introduced a top class debit card in the market (VISA infinite) which also enables online services,” reveals Wemesa.

However Mr Zaramba says other than the little or no sensitisation to these services among the ordinary Ugandans, the majority may not even be able to afford them. “How many Ugandans can afford to have a debit card for instance?” he asks.

Mr Otunnu meanwhile reveals that government has set the grounds even leally to enable e-commerce and it won’t be long before it catches on. TNS in addition to recommending advocacy for the internet for now makes an exception of the automotive, home buying and financial services of the businesses that could thrive online even among Ugandans. Even these, notes the report, only because some limited research occurs, typically on search engines and price comparison sites rather than branded touchpoints.

While Mr Wemesa agrees that the online banking services, the most popular being the ATM service, are a tremendous success, Mr Mwandha who has tried his hand in online automobile business for the last two years reveals it’s been slow business. “Again the issue of payment, trust and maybe even delivering the hefty packages. Rather than import and sell like I used to do at first, I now only connect buyers with different sellers on my website and get my share after the transaction is done,” he says.

Yet all agree that rather than the end or a disappointing turn, now is only the beginning of e-commerce which in a few years will be a boom even among Ugandans. Mwandha is for instance convinced that with the birth of things like mobile money, it is a sign of more reliable services to come.

Uganda's digital migration policy ready
Tuesday, 25th January, 2011
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BY DAVID SSEMPIJJA

THE long awaited broadcasting digital migration policy will be out before the end of March, Aggrey Awori, the information and communication technology minister, has said.

This development presents a ray of hope as the country strives to meet the December 31, 2012, migration deadline set by the East African Community.

The global migration deadline set by the International Telecommunication Union is June 17 2015.

“We are sorry that the policy delayed, yet nothing could be effected without it. It is ready, but it will be out in March after the general elections” Awori told Business Vision during an interview last week.

The policy provides a framework under which migration will take place in Uganda. This ushers in a new era in the history of the global broadcasting industry.

The policy highlights the guidelines under which the Government and private free-to-air-and-pay television service providers will operate. It sets the soft and hardware standards to be followed.

What is digital migration?
Video broadcasting digital migration is the process of converting television broadcasting signals from analogue to digital technology.

The migration is made necessary by the developments in telecommunications technologies, which enables a more efficient use of radio and television frequency spectrum and well as better quality pictures and sound.

An example is the StarTimes’ digital broadcasting technology, which has been able to provide over 40 clear channels through only two frequencies. Those broadcasting through the analogue technology are limited to one channel.

Digital broadcasting enables the provision of services in a multiplicity of languages, thereby increasing access to information.

Awori said in order to receive the digital signal on analogue TV sets, households will need to buy set-top-boxes (decoder-like devices) that convert the analogue signal into digital. This technology will outgrow the usage of dishes.

According to the Uganda Communications Commission (UCC), there are 153 radio stations. Out of the 55 licensed television stations in the country, 35 were on air by December 2009.

Uganda has licensed pilot projects undertaken by Star DTV, Next Generation Broadcasting and MoTV, all supervised by UCC upon the advice of the established National Digital Terrestrial Migration Taskforce.

StarTimes chief of marketing Kevin Chen said the set-top boxes (STB) quality guidelines should be co-related with affordability.

“We ought to note that after the official switch-off from analogue, TV consumers without STBs will not access services,” he said.

To answer the affordability question, South Africa pledged to provide ownership support as an incentive of up to 70% to approximately five million of the poorest TV owning households. This support will be based on the anti-poverty strategy.

If a developed economy like South Africa is considering subsidising digital migration tools to the advantage of their nationals, a lot has to done elsewhere in Africa if more people are to benefit from the digital dividend.

South Africa’s policy
In South Africa, the digital migration policy came into force in August 2008. Giant pay television players like MultiChoice are carrying out migration trials in Africa’s largest economy.

Cabinet approved the manufacturing of set-top boxes in South Africa and the provision of the boxes as a tool for bridging the digital divide.

The policy stipulates that STBs must have a software solution, which enables TV viewers to review upcoming programmes using a remote control.

This enables planning on the part of viewers to view relevant programmes for their own convenience. For example, school children would be able to know when to view education programmes appropriate to their respective levels

To help boost the development of the local electronics manufacturing sector, STBs will be manufactured locally in high volumes.

The South African STB manufacturing sector has the potential to manufacture up to 5.6 million STBs per annum when running at full capacity.

EAC to review region’s transport approach
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TO BE REVIEWED: A section of the Uganda-Kenya railway.

By Dorothy Nakaweesi (email the author)
Posted Wednesday, January 26 2011 at 00:00
Experts, sector players and the private sector are today commencing talks on how to validate the draft final report of the East African Transport Strategy and Roads Development Programme in Kigali - Rwanda.

The EAC Transport Strategy is a 10-year programme that will identify short to medium term interventions required to develop transport infrastructure in the region and also support economic growth.

The strategy covers all the sub-sectors including: civil aviation - airports and facilities for regional and international scheduled connectivity and railways (existing and potential links as per EAC rail master plan).

Others include the ports and maritime, inland waterways (existing sea ports including Lamu and Mtwara), major lake ports on lakes Victoria, Tanganyika and Nyasa, plus River Kagera and all the major road corridors.

“A stand-alone roads development programme will form part of the strategy given the importance of this mode of transport in the haulage of the bigger share of import and export freight in the region,” Mr Richard Owora Othieno, the head of corporate communications at the EAC said. The three-day meeting is expected to attract over 70 delegates from the five-EAC partner states.

Mr Othieno said: “This is the final of a series of talks that have been held since the commencement of the study in June 2009.”

The participatory process has ensured that proper ownership of the document is obtained prior to its approval by the EAC policy organs.

It is expected that after the stakeholders have provided inputs into the report, the consultants - Africon from South Africa, will produce the final report which will be presented to EAC transport ministers for approval.

Thereafter, the report together with those from other sub-regional initiatives will be presented to a planned investors’ conference scheduled for September 2011 for funding considerations.

Kobil takes over Phoenix petrol stations
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SOLD OFF: A Phoenix fuelling station in Kibuli - a Kampala suburb.

By Dorothy Nakaweesi (email the author)
Posted Wednesday, January 26 2011 at 00:00
Following its expansion plans, KenolKobil Limited has acquired all assets of Phoenix Uganda Petroleum Limited.
The assets consist of a 1,800 m3 (1.8 million litres) fuel terminal, a modern three-storey office block and three service stations in Kampala.

In a communication to Daily Monitor, the company’s Chairman/Group Managing Director, Mr Jacob Segman, said: “We will keep expanding our business presence in Uganda and the East, Central and South African regions through acquisitions of similar high potential assets in both existing and new markets.”

“This move confirms KenolKobil’s position as one of the leading investors in the petroleum industry in East Africa.”

The three newly-acquired service stations, located in the heart of Kampala city, have a high potential for non-fuel business with the presence of supermarket and shop facilities.

The acquisition will also strengthen the ability of the industry to meet the growing demands for fuel.

Kobil last year commissioned a modern LPG storage and filling plant in Nalukolongo to enhance its storage capacity . The Phoenix depot situated in Jinja town, will provide additional storage to supplement Kobil Uganda’s existing storage.

Mr Segman said this depot will serve Jinja town, its hinterland and Eastern Uganda hopefully bringing to an end the costly and time-consuming “back-hauling” process of products from Kampala to these regions as it is the case today.

“We will use our new high volume depot in Jinja to provide services to other Marketers in the country as well as position it for black oils storage once the anticipated Eldoret-Jinja-Kampala pipeline is developed,” Mr Segman added.

He said they will alleviate the current problem of product stock-outs and strengthen Kobil Uganda’s business segments as well as supporting and complementing Kobil Tanzania operations.

Kobil Uganda, established in 1999, was KenolKobil’s first subsidiary outside of Kenya and has made substantial investments represented by it’s over 63 service stations.

“KenolKobil views the Ugandan petroleum product market as having immense potential for growth, especially after the discovery of oil deposits in the country,” Mr Segman said.

Investing in real estate
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Uganda has witnessed a boom in real estate.

By James Abola and Philip Karugaba (email the author)
Posted Thursday, January 27 2011 at 00:00
Real estate simply refers to land. In law, land includes any buildings on that land.

Since 2000, Uganda has witnessed a real estate boom. There has been an increase in the number of real estate agents and a transformation in the nature of their business.

The old National Housing and Construction Company (NHCC) de facto monopoly has long since been shattered with many private developers now putting up more housing units than NHCC has done recently.
There are also more banks offering loan products for the purchase of real estate, a business once done exclusively by Housing Finance Company of Uganda (Hfcu).


There are essential two sources of income from real estate, one is reaping capital gains from buying and selling land and the other is by developing the land and collecting rent from its use and occupation.
To demonstrate the capital gain on land, in 2002 an acre of land at Kiwatule was advertised for sale at Shs60,000,000. In 2009 the same acre sold for Shs400,000,000; if you could find it! The price increase represents capital gain.

Where to find property

Find a good broker, call them what you will, brokers (bulokas) or real estate agents. It is still an unregulated market and anybody can become an estate agent.

While some agents have wide market knowledge and can source you a property anywhere you please, many are localized in particular areas. You could scout your target neighbourhood and look out for the signs. Alternatively, you could browse the property pages in newspapers.

Another good source of property is court bailiffs, selling off property under orders of court or auctioneers selling off mortgaged property. If you have got the time or fuel or both, you can drive around and with a bit of luck find the kind of property you are looking for.

Due diligence
Several stories abound about real estate scams. You can avoid becoming part of this statistic by conducting due diligence. Once you have identified the plot you should do your homework on it.

Title search

Obtain a copy of the title deed and have a lawyer conduct a search on it at the land office and give you an opinion. The search helps to confirm the validity of the title, its proprietorship and whether it can be so sold.
It is very important that the land has a title and that the person you are dealing with is named as owner on the title, except for sales by banks or under court orders.

Boundary opening

It is also advisable to have a surveyor open the boundaries on the land and confirm to you in a written report. This will keep you out of boundary disputes with your neighbours. You will be amazed how angry your neighbour will be if you stray so much as a foot into his plot.

Location of the property

Location should be the first, second and last item on your due diligence checklist. The difference between an excellent property and a poor one is usually down to the location. Location is in turn determined by several factors, of which we shall discuss a few. What is in the neighbourhood of the property can improve or depress its location; a rubbish dump, sewage treatment plant and a chemical-intensive industry are neighbours that depress a location while a good school, a shopping mall, an upcoming residential estate are neighbours you would love to have. Availability of amenities such as power, water and a sewer line help to improve the location of a property. A good access road is another important locator; some people have acquired plots of land that have no access roads and have had to painstakingly negotiate with several neighbours to lease access roads to them. Another important locator is the view that the property commands; hilltop properties and lakefront properties tend to command good prices because of the view they offer.

Understanding land titles

A land title is the document that proves ownership of registered land. It may also be called the certificate of title, title deed or duplicate certificate of title (for technical reasons relating to the law of land registration).
Uganda recognizes different systems under which land can be held and this is called land tenure. Each system has its own peculiarities and these get reflected in the certificate of title.

While the different forms of land tenure have interesting history, we consider that beyond the scope of this book and focus on the particular distinctions between the different land tenure systems and how they are shown in the certificate of title.

Freehold land
This is land that can be held forever and ever (in perpetuity) with no conditions attached to it. It will be designated by references such as;

Freehold Register Volume 5 Block 6 Plot 6 Book Avenue; or FRV 5 Block 6 Plot 6 Book Avenue

Mailo Land

This land can also be held in perpetuity with no conditions. To distinguish this from freehold land, it has its roots in the different agreements between the colonial government and the traditional kingdoms of Buganda, Toro, Ankole and Bunyoro. It is designated as: Block 5 Plot 6 Land at Komamboga. This title deed for this land does not make references to a road.

Leasehold land

This is land held on lease from an owner and is subject to specified conditions such as a requirement to build within a number of years, the type of construction, the use to which the land can be put and a further obligation to make ground rent payments to the owner (lessor) of the land.

Non-Ugandans cannot own mailo or free-hold land and can only hold leases not more than 99 years. Any owner of freehold land and mailo land can lease out their land and create a separate leasehold title. On expiry of the leasehold term, it may be renewed on terms agreed with the lessor. The most common lessors are District Land Boards, Buganda Land Board (for land held by the Kingdom of Buganda), Uganda Land Commission (for land owned by Government).

A leasehold title will show the duration of the lease and the date it commenced. It is important to check that the lease has not expired as part of your due diligence process i.e that the number of years of the lease have not lapsed since the date it was granted.

This kind of land title may be designated as follows. Leasehold Register Volume 5 Folio 6 Plot 6 Book Avenue; or LRV 5 Folio 6 Plot 6 Block Avenue.

Customary land
This is land held under customary law. Generally, it does not have title in the same sense as the other forms of land tenure.

General characteristics of all land titles

Some characteristics are common to all land title deeds.

Entry of Ownership: There will be a page dedicated to showing the owner’s name. It will also show previous owners if any. Each entry of ownership will show a date that the entry was made, an instrument number (being the registration number assigned to the transfer form that transferred the land to that proprietor), the name and postal address of the proprietor and the signature of the Registrar who made the entry.

Encumbrance page: This page will show any mortgages or caveats registered on the land. A title is said to be clean if there are no encumbrances registered on it.

When carrying out your due diligence, you must ensure that the title is clean or that the encumbrance can easily be removed. For instance, when you buy property mortgaged to a Bank, the Bank’s encumbrance is easily removed upon payment to the bank.

Deed print: This is a small rectangular sheet of paper that shows the layout of the plot and neighbouring plots. The particular plot for the title is usually highlighted in red. The deed print will show the plot boundary.

Gayaza road works end in June 2011
Wednesday, 26th January, 2011
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Workers spreading aggregates along Gayaza road
By Samuel Balagadde

RECONSTRUCTUION and widening of the Kampala-Gayaza-Zirobwe road ends in June, Dan Alinange, the Uganda National Roads Authority spokesperson, has said.

The project, being undertaken by Energo Projekt, was expected to be ready by the end of December last year, but was extended to June this year.

Work started in 2008 and involves widening of the Mulago round-about-Kalerwe stretch and erecting road signs.

Alinange said the delay was caused by roadside business operators who had refused to vacate and some technical problems.

“We need support from local leaders and law enforcement agencies to evict those that are still vacate the road reserve to ease work for the contractor,” he said.

He added that the people that will be affected by the project were being compensated.

Construction started at Gayaza-Zirobwe in Wakiso district towards Kampala, through Kanyanya and Mpererwe trading centres.

The road will be widened by 11 metres, apart from the Mulago-Kalerwe section, which has been turned into a dual carriageway.

The project will also involve erecting road signs.

Awoja bridge repairs to cost sh7b
Wednesday, 26th January, 2011
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By Aidah Nanyonjo

SPECON has won the contract to construct Awoja bridge, the Uganda National Roads Authority has said. Awoja Bridge is located on River Awoja, 15km on the Soroti-Mbale road.

GAUFF will be the supervising consultant. The new bridge, to be financed by the European Union and the Government, will cost sh7.2b.

The scope of work involves construction of a new 7.5-metre carriageway bridge adjacent to the existing one, UNRA spokesperson, Dan Alinange said in a statement.

It will also involve construction of 600-metre approach embankments and provision of one-metre pedestrian walkways on either side of the bridge.
The project commenced on January 24 and will be completed in 12 months.

Meanwhile, Alinange has revealed that the contract for the reconstruction of the Jinja-Kamuli road has been awarded to Dott Services.

The contractor is mobilising, with a camp at Buwenge. The road will cost sh50b and will take two years to complete.

The Jinja-Kamuli road has not been repaired since 1989 and has numerous potholes and black spots that caused several accidents.

Mubeeya bridge in Buikwe to be repaired
Wednesday, 26th January, 2011
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relief: Mubeeya Bridge in Buikwe will be repaired under the Mukono-Kyetume–Katosi-Nyenga road construction project by the Uganda National Roads Authority. The bridge developed cracks sometime back. The bidding process for the project has already started, according to the roads authority

Uganda plots to reap from education export
Wednesday, 26th January, 2011
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By DAVID MUGABE

AS Uganda solidifies plans to become a regional education hub, the Uganda Exports Promotion Board (UEPB) has started discussions with 20 universities on how to package and market Uganda’s higher education for export.

Besides having the potential to become the region’s food basket (60% of East Africa’s arable land is in Uganda), the country has a niche in higher education in sub-Saharan Africa because of an edge in certain demographics.

According to the export promotions body, the talks with universities will see increased marketing of education in the next three years to actualise the country's potential.

A Commonwealth secretariat research paper: “Marketing Uganda’s Higher Education” says Uganda has the edge over her neighbours in the region because the cost of living and education is cheap.

Besides, Uganda is the only country in the region that accommodates special needs students.

“Uganda has a fairly strong education system, a diverse range of academic programmes and quality of graduates,” reads the research.

With this competitive edge and the recent influx of thousands of foreign students, especially from Kenya, it is thought that the country can earn a lot more if proper structures, systems, infrastructures, personnel and marketing systems are put in place.

But what is worrying is that foreign universities from UK, Malaysia and eastern European states have come and marketed their institutions here as local establishments look on. The country currently has 28 universities, 22 of which are privately-run.

There are currently 137,000 students in all the universities as a result of liberalisation of the sector several years ago.

The number of foreign students has risen from a few hundreds in the early 1990s to 6,000 by 2008.

Export of education yielded $32m in 2004/5 or about 25% of earnings from coffee.

“This, however, was not reflective of the earnings made from the multiplier effect of having foreign students who spend on tuition and living costs like food, leisure, personal effects and accommodation,” said Florence Kata, the UEPB executive director.

The case for promoting higher education in Uganda is even strengthened by the commencement of the East African common market which allows free movement of people and right to live anywhere across the region.

“Uganda must work towards a world-class product. What is not widely acknowledged is the growing role of education, which can earn substantial revenues for countries.

"The competition for talent is global,” said Estella Aryada from the Commonwealth Secretariat.
UEPB’s decision to involve heads of local institutes could ultimately realise additional 6,000 students or $60m in the next few years from higher education.

Comparatively, the UK earned £15.7b in 2007 from international students.

Kata recently spoke of the lack of a concerted effort at marketing and promoting this export as is done for other export sectors.

She said a two-phase approach is planned, beginning with the vision building session in which leadership of top universities from Mbarara University of Science and Technology, Makerere, Gulu and Uganda Christian universi¬ties convened.

The first phase questions where Uganda wants to take her education, basing this on the current situation and global trends in exporting university education.

The second and final phase will develop a strategic plan for promoting university education basing on the outcomes of the first phase.

The deputy director of the National Council for Higher Education Moses Golola, said many people in east and sub-Saharan Africa still consider higher education in Uganda prestigious.
Turning this into a lucrative money-making venture will involve improving and increasing visibility with good web presentations among others.

The other requirement needed is filling the missing gaps of skilled staff, infrastructure, proper packaging as well as continuous expo-sure to best world practices.

Elizabeth Gabona, an education ministry official, however, asked export agencies and university leaders to consider issues like space and quality control as they drive the case for bigger education exports.

Malawi: From food importer to exporter
Wednesday, 26th January, 2011
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With proper government support, farmers increase food production
By Joshua Kato

STEVEN Mwale can now eat as much sima as he wants. Sima is Malawi’s main food. It resembles Kenya`s ugali and Uganda`s posho, however, this one is a bit lighter and softer.

“A visit to Malawi will never be complete unless a person eats sima,” Mwale says. But there was not enough of it a few years ago.

Until recently, Malawi was a hunger and famine stricken country. “We never had enough to eat. We used to beg from donors for food,” says agriculture minister, Peter Mwanza.

Located in central region of Africa, Malawi has around 15 million people, 70% of whom depend on agriculture for survival. The average farmer in Malawi is not different from the average farmer in the rest of the region.

Farmers here own an average two acres for all their farming enterprises. They use the hand hoe as the main farm tool, a panga and a slasher are added ‘advantages.’

They do not practice regular irrigation on their shambas too, just like farmers in Uganda, Kenya and Tanzania.

Until round 2005, more than half of the maize eaten in Malawi was imported. In 2003/04, the total consumption of maize and wheat in Malawi was estimated at around 1.74 million tonnes. Of this, 500,000 tonnes were imported. The government realised that importing food all the time was not sustainable, they moved to stop it.

They devised several ways geared towards improving productivity. These included the Agricultural Development Programme, the Malawi Growth and Development Strategy and the Consumer Price Subsidy.

“We have come a long way,” says Mwanza. The move started by a strong government involvement.

“The president mobilised the population to start growing food,” Mwanza says. According to farmers interviewed, the mobilisation was like a popular religious crusade across the country led by President Bingu wa Mutharika.

“Our people are poor because they lack the inputs to use the soils better,” he said.

The government soon discovered that unless another level of intervention, especially capacity building was carried out, the dream of more food for Malawians would not be met.

This is when it started implementing the Input Subsidy Programme, which, as it turned out, was the winning factor of the strategy.

“We decided to subsidise the population by giving them good seeds and fertilisers,” Mwanza says.

This move was heavily criticised in many circles, however, the government stuck to its guns. Soon, some of these bodies that had initially looked skeptically at the programme came on board.

But the government reasoned that no farmer in Malawi could afford the commercial cost of fertilisers and other inputs. In some cases, a kilogramme of fertilisers cost over $1.

“There was skepticism from a broad spectrum of international bodies and countries about the subsidy programme,” Mwanza says. But the government ignored them.

“We started respecting agriculture as a business. We told the population that their land was their only redemption. In many countries however, agriculture is seen as a means of getting food to eat rather than one of generating wealth.

Fertilisers and seeds were given out to farmers in the villages in 2006 and 2007, resulting into the bumper harvest in 2007.

According to Mwanza, the inputs were given out through elaborately organised farmers groups in villages.

Subsequently, production rose from 1.2 million tonnes in 2005 to 2.7 million tonnes in 2006 to 3.4 in 2007. Hunger and famine were gone.

Mwanza says as a multiplier effect, even other aspects like weather and climatic changes, which affect the agriculture, were put into consideration.

“Proper weather forecasting is carried out and the information passed on to the farmers on time,” he says.

There is now more than enough sima in Malawi. The country has moved from a net importer of maize to one of the leading exporters of the grain in the region. Malawi has been selling maize to several countries, including Kenya, in the last few years.

The once poor peasants in rural areas are now earning from maize sales. In order to improve marketing, a Commodity Exchange Market was recently started in Lilongwe.

“Farmers from all over the country can put their product on this exchange from where it can easily be seen by buyers,” explains Ian Goggin at the exchange. And this eased marketing of the produce has attracted more farmers.

What other countries can learn from the Malawi experience Malawi is an example that when the government positively gets involved in some things, the results are good.

At the moment, many African countries are running to Malawi to learn about this story.

“Many countries, especially from West Africa, are sending their people to study our experience and success story,” Mwanza says.

According to Andrew Byamugisha, an official with the Ugandan agriculture ministry, who was in Malawi for the ACTESA/COMESA workshop, said there are lessons to learn from Malawi. He, however, explains that every country has got its own unique situation.

For example, he says, while Malawi and most South African countries have got only maize as their major crop, Uganda has got a variety of foods.

“We have bananas and cattle, we have maize, cassava, potatoes, wheat, beans, ground nuts,” he says.

“In Uganda, the problem may not be producing enough, but marketing what we have,” he adds.

Today, Uganda has got lots of maize, especially in the north, east and parts of the west. In many areas, prices of maize have dropped to as low as sh100 a kilogramme.

According to ACTESA executive director, Chris Muyinda, the major lesson to learn here was the involvement of the President.

“The President mobilised the population, which shows that the involvement of leaders in such projects brings better results,” he says.

He adds that what worked in Malawi can work elsewhere in the region.

“The mode of implementation may differ, but the goal remains the same,” he says.

Business opportunities in Mogadishu
Wednesday, 26th January, 2011
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Goods that have just been off-loaded from a ship
By JOSHUA KATO

A truck rumbles away from the side of the huge ship. It is laden with hundreds of macaroni, which is the major food for Somalis. As soon as it leaves, other trucks line up to be loaded by a huge yellow crane with inscriptions, KATO!

“On average, we have about three ships docking here every week,” says Maj. Katongole, who is in charge of an AMISOM unit that is keeping security at the port.

The ships are in addition to tens of smaller boats that come from around the region.

But until three years ago, the sea-port was desolate. This was before AMISON took over security.

Three huge ships from Greece, India and Latin America sit in the dock.

Each of the ships is unloaded for about a week.

Returning to their destinations, they take charcoal, fruits, goats and sheep.

“Before the war, we had a good source for goats and sheep,” says Omar Ousman, who owns a truck at the sea-port.

Somalis like eating goat and sheep meat. With Ugandan forces keeping security in the city, Ugandan farmers can start exporting these animals to the country.

“We also like eggs, rice and wheat,” Ousman says.

These are other ventures that can be pursued, he adds.
The ships bring in new and second-hand cars, fuel tanks, vehicle tyres, water tanks, cereals, clothes, timber, sugar and even shark meat, Ousman says.
“Things like mobile phones and electrical gadgets like TVs and radios are cheaper here than in any other city in the region. There is no tax policy,” he adds.
“However, many of these goods are fake and this is largely because we do not have a standards authority.”

Most of the goods that pass through Mogadishu Port end up five miles away at the famous Bakara market.

Bakara, which is located in well constructed storied buildings, is the centre of business in Mogadishu.

“All telecommunication companies in Mogadishu are based in Bakara,” explains AMISOM spokesman Maj. Bahoku Barigye.

One can also say that it is the largest centre of fake merchandise in the region, he adds.

“There is no standards authority to regulate the proliferation of fake products, specially electronics,” Ousman explains.

As a result, almost all electronic products that come in are fake, yet it is here that one of the most sophisticated telecommunication networks operate from. For example, Somalia has got some of the cheapest call rates in the region and the world.

“You can call for three months on just five dollars,” says an AMISOM soldier. The Internet link in Mogadishu is also one of the fastest in the world.

Outside Bakara, people carry out small businesses. There are several home-based bakeries and confectioneries. There is also a mineral water factory.

“All we need is to give hope to our people and things will be fine. We need to give them security for their businesses and homes,” says the new Somali prime minister, Mohamed Abdullahi Mohamed.

But irrespective of this booming business, the transitional federal government benefits very little in terms of revenue.

In Bakara, it is the rival al-Shabaab militants who collect fees from traders, sometimes at gunpoint.

10b Citrus fruit factory to open in Teso
Wednesday, 26th January, 2011
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Okello checks the harvested oranges in his garden with his wife and child
By Ronald Kalyango

AMID growing fears that a fruit factory in Teso sub-region will never be constructed, the Government is moving closer to fulfilling the pledge it made in 2008.

“We have completed many invisible tasks and I want to assure farmers in Teso that the fruit facility will be in place in 2011,” says Prof. Arsene Balihuta, the executive chairman of the Uganda Development Cooperative (UDC).

Speaking to New Vision recently, Balihuta said with the revival of UDC as a development arm of government in 2008, his first assignment was to work with a team of experts from other government agencies to establish the factory in the region.

The agencies included the National Agricultural Advisory Service, the Uganda Industrial Research Institute, the National Agricultural Research Organisation, Uganda Investments Authority and the finance ministry.
The heads of the agencies last year met in Soroti and deliberated on a number of issues, including drawing work plans, time frames and the distribution of roles.

They were also supposed to establish a company to own the facility and engage all stakeholders who had expressed interest in establishing the factory.

Today, Balihuta says great strides have been achieved by the taskforce.
“We have so far mobilised farmers into a coherent body,” he says.

After mobilisation, farmers selected seven members from every sub-county in the region, who later converged in Soroti and selected their representatives in the Teso Tropical Fruit Growers Cooperative Society.

The cooperative was then registered by the trade ministry and in May last year, UDC, together with farmers, agreed to own the factory.

“We have signed articles and memorandum of association to own the factory. UDC, on behalf of the Government, will own 80% shares, the farmers 20% and the percentage for the private sector, which will be procured through an international bidding process, will be discussed at a later stage,” he explained.

The proposed location for the factory is the Uganda Investment Authority’s industrial park in Arapai sub-county in Soroti district.

The plot, initially occupied by squatters, has so far been surveyed and waits to be serviced with water, electricity and other utilities.
Balihuta says are now in the process of procuring a consultant to conduct feasibility and environment impact assessment studies.

“The studies will guide us on the technology and the machinery, the required land and production capacity to sustain the factory,” says Balihuta.

“We shall then procure architectural drawings and then contact firms for provision of the machinery for the facilities,” he noted.

Balihuta says they plan to establish a fruit factory, cold chain for the fruits, houses for the staff and a laboratory on the premises.

“This is our plan but we haven’t yet identified a suitable private partner with expertise in fruit processing,” he says.

He said the private partner will be required to provide additional resources to complete the assignment.
The Government in 2009 set aside sh5b for the fruit factory, but the taskforce estimates that the entire process could cost about sh10b.

Balihuta says a private partner will be required to provide the additional resources.

He also noted that for sustainability of the fruit factory, another investor has to be sourced to help with irrigation to increase fruit production in Odina and Labori on the shores of Lake Kyoga.

The farm, according to Balihuta, has 900 hectares, and once developed, will act as a nucleus farm for the factory.

Balihuta disclosed that Koreans had expressed interest in constructing the factory and other assorted facilities.

Why a fruit factory in Teso sub-region?
A fruit factory in the region would be good news for the people of Teso, who grow plenty of mangoes, oranges and other tropical fruits but have no viable market for them.

During the mango season, much of the fruit rots in the gardens.

Those who take the fruits to the local markets are often paid very little money for them, which discourages the trade.

When President Yoweri Museveni toured Teso in 2008, he pledged that a fruit factory would be established in the region.

The President was optimistic that within two years, farmers’ lives would be changed for the better.

There are already about two million citrus trees in the region. It was estimated that by the end of 2011, the number would have risen to about five million trees.

Tito Okello, a prominent fruit grower in Soroti district, said: “I have over 500 trees. Every season, I earn about sh10m. If the factory is established, it will enhance our earning,” he says.

“Time will tell if the factory is an effort to alleviate poverty or merely a tool for political campaigning ahead of the general elections,” he adds.

Uganda, a growing ICT hub in Africa
Wednesday, 26th January, 2011
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Austin Okere
UGANDA has a fledging IT industry with top end training institutions churning thousands of graduates annually. Computer Warehouse Group, a Nigerian IT firm, officially opened its offices at the end of October. Paul Busharizi and David Mugabe interviewed the group’s chief executive officer, Austin Okere, about the business. Below are the excerpts.

QWhat is Computer Warehouse Group (CWG) and what is your business in Uganda?
CWG started in Nigeria as a hardware company in September 1992 and it has grown to become a communications and a software company. It has also become a pan-African company.

We have set up operations in Ghana, and Uganda is our second operation outside our home country. We have plans to be in 10 African countries by 2015.

What will you be doing in this market?
The name CWG was quite a pullback for us before it became a strong brand. The name is not synonymous with what we do. CWG is the biggest systems integration company in sub-Saharan Africa. In Nigeria, out of 24 banks, 11 are using our core banking applications, Out of the 24 banks, 20 of them ride on our communications networks.

We can bring the same value here. We provide managed services for Stanbic and StandardChartered banks. What we are doing is replicate what has worked and has taken businesses forward.

What is the size of CWG, turnover and all?
We are becoming a public company in 2011. We have done a private placement. We listed first on the Lagos Stock Exchange, but we have aspirations to list on the NASDAQ. We have about 550 employees, of which about 85% are certified engineers. Our turnover was $120m last year. The group is about 18 years old. We focus on communications, oil and gas and banking.

18 years ago, you started from scratch, what was the turning point?
I worked in an Indian-owned computer company in Nigeria, but setting up CWG was a shock. I took some money from five of my friends. The company where I worked before used to get 85% advanced payment, but for my new company, people said we needed to show some track records.

There were no opportunities for loans, entrepreneurship was not known, but we got one bank which gave me my first break.

My collateral was my video, and car, an old Peugeot 504. We started with $16,000, and the loan was $5,000. It was a difficult time with elections and riots, but it was also an opportunity because when the riots settled down, service providers were few. So those of us who weathered the storm got a lot of business.

What kept you alive during this tough time despite being a new company?
What kept us primarily was the grace of God and the discipline. We were our own bosses. We were very careful with the money, and conserved the little we had to pay salaries. I used my car to do deliveries. We were not about the image, but getting the job done.

Would you say African businessmen’s vision is too small and, therefore, we do not make large enough sacrifices?
As young African entrepreneurs, we are always in a hurry to say we have arrived. You have to see a need first and be burdened enough by the need to catch a vision and sell the vision to people who will follow you. Once you are burdened enough, that burden is not lifted till you fulfill the need.

You must have the character, competence and focus. We are easily defocused, you start as an IT firm then you hear oil and gas is making money and you go into that as well. The vision is more sustained if it is need-based because you do not let up. The money will take care of itself.

Did you have that mental shift of creating structures? How did you overcome the fear of having to be physically at the business?
If you don’t have structures, it is difficult to expand. In Africa, business works because the owner is seated there counting his money and the goods that are going out. When you treat people like owners, they start to play like you. You don’t have to micromanage people.

The Y2K was also a big break for us. People were running with purchase orders for people who were ready to take them. Infosys came into Nigeria and were looking for a partner and a lot of people were changing their banking software because of the Y2K bug.

We got three banks at the same time and this is when we started with the software company. We had eight offices in Nigeria. In 2002, we went and started CWG Ghana and it was very successful because of the same customers we were servicing in Nigeria.

We went into oil and gas in Ghana as well. These same skills we can bring to the Ugandan oil companies so they do not have to reinvent the wheel.

What was the thinking behind bringing in new partners in equity?
If you start an entrepreneur business, you are all powerful, you say move and it moves.

For you to make it into an institution, there has to be governing structures which you subject yourself to. You have to let your powers go as those of the institutions go.

As Africans, we find it difficult to let that power go and because of this, the organisation doesn’t become powerful. Having to make all the decisions will make you tired but not powerful. You also have to keep good books. If somebody wants to invest in you, how will they value you?

Wasn’t the fear that you are letting go of your authority real for you?
It is always a double-edged sword. The private equity firm says I am giving you $20m if you do this turnover. If you don’t meet your target, you can lose your company.

The first firm valued our company at $8m and they wanted to buy 25%. In 2005, the second group valued our company at $32m. In 2008, the third group bought 17% at $10m. When they come in, they also help you to prepare for the market. Today, each share is 7.8 units.

It shows that our firm was undervalued by the two previous groups. This is where we are losing. We need the structures and best practices because we lose out to Asians, the Middle East or South Africa because they are more prepared to use it.

How much of the company still belongs to you?
About 75% still belongs to the original company.

What are Uganda’s chances as an ICT hub?
I see a lot of potential. We had a choice of setting up CWG Kenya and we chose Uganda. You are on the threshold of being an oil producing country, have a young educated population, infrastructure, are well positioned on the lake and you are in a region which is now becoming an economic zone.

We must play a part in that process. IT is going towards utility. Uganda is the hub of future IT utility.


Chartis eyes oil, registers growth
Business
Written by Milly Kibombo
Wednesday, 26 January 2011 17:50
Global insurer Chartis intends to venture into Uganda’s newfound oil wealth as the company widens its footprint in the country.

Chartis Managing Director Alex Wanjohi said in a release that after a successful business growth recorded last year, Chartis has laid out adequate strategies to move into more complex businesses like oil mining.

Wanjohi noted that the company registered a 24% growth last year.

“This growth was quite significant on our side, and can be largely attributed to our partners,” he said.

The company also introduced new services such as kidnap and ransom insurance, disaster facility, mortgage and cash insurance as well as comprehensive banking services insurance.

Wanjohi announced that Chartis Uganda paid more than Shs12bn in insurance claims last year.

He, however, noted that Chartis had been faced with challenges of unpaid premium balances due to outdated credit provisions in local laws and uneven playing grounds.

Singapore business team meets govt over investment
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By Juatus Lyatuu (email the author)
Posted Thursday, January 27 2011 at 12:54
A delegation of Singapore business personalities with investment interests in Uganda is in the country for a three day official visit.

The visit will involve a feasibility study of Uganda’s investment climate with a view of promoting trade between the two countries.

Speaking in Kampala yesterday, Ms Christina Tan, the head of the delegation of Africa Business Group from Singapore said the trip was for study purposes.

“We are here to explore East Africa and Africa at large, we are looking at Africa as a serious business destination and we hope to engage in business in Uganda in the near future.”

The 10 man delegation has also visited Kenya, Rwanda and Nigeria.

The African Business Group was formed by the Singapore business agencies earlier this year with a mission to enhance knowledge and mutual understanding of business opportunities in Singapore and Sub Saharan Africa.

Eng Gagawala Wambuzi, the state minister for Trade said the government is ready and willing to partner with different foreign investors in any sector of the economy.

“We are looking at people to partner with, in building dams, the construction industry, and agriculture.

He said Uganda has an adequate labour force with an investment environment that is worth any one’s investment.

According to members of the group, the Singapore business community is interested in investing in textile processing, fashion and clothing, agro processing, agro chemicals manufacturing, security services, electrical manufacturing and renewable energy.

Mr Wambuzi said Uganda is a liberal democracy, and the Uganda Investment Authority will be in handy to support projects initiated by the group.

He said: “Feel free to interact with private sector agencies like Uganda Manufacturers Association, Private Sector Foundation Uganda, Kampala City Traders Association among others.”

Uganda’s cocoa output to rise 7%
Thursday, 27th January, 2011
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KAMPALA-Uganda expects its cocoa exports in the 2010/2011 (October-September) season to rise 6.6% compared with the last season, as newly-planted trees start producing beans, a senior government official has said.

Cocoa is one of Uganda’s major commodity exports and a significant source of foreign exchange, although it does not produce enough to relieve a rallying world market hit by disruption in top producer Ivory Coast.

Joseph Kimera, the head of the state-run Cocoa Development Project forecast Uganda would export about 16,000 tonnes this season from the previous season’s 15,000 tonnes.

Earnings from the crop last season were not immediately available, but the 2008/09 year brought in $35m from 15,000 tonnes.

“Higher production and exports is mainly a function of an increase in planted area and more people in Uganda have been planting cocoa trees. Most of them are reaching maturation, so we anticipate this to positively impact this season’s exports,” he said.

Last season’s exports fell short of its forecast of 18,000 tonnes due to irregular weather patterns that disrupted pod development and harvesting, Kimera said. “Rains didn’t come when they were expected and sunshine was so extreme in some areas at a time when rains were needed. This led to pods falling off trees, while others became small,” he said.

Cocoa production has fluctuated in Uganda since it was introduced nearly 100 years ago, but the Government has increased support for farmers through the supply of seedlings, and by training them to take care of their crops.

Output peaked in the 1960s, but a series of bottlenecks, like government neglect, lack of finance and price fluctuations, throttled the sector in the 1970s and 1980s to the point where the crop was virtually relegated to the economic periphery.

Kimera said exports this season were likely to be higher than 16,000 tonnes, but that they decided to be more cautious as a way of hedging against the adverse impact of the evolving instability in traditional weather patterns.

Uganda has an estimated 18,000 hectares of land under cocoa cultivation.

Uganda to host petroleum conference
Thursday, 27th January, 2011
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By Sylvia Nankya

PETROLEUM sector players from all over the world are due to converge in Kampala for the fifth East African Petroleum Conference and Exhibition 2011 (EAPCE’11).

President Yoweri Museveni is expected to preside over the opening of the conference.

The conference, organised by the East African community (EAC), is expected to attract more than 700 participants. It will run from February 2 to 4 at the Kampala Serena Hotel.

The EAC deputy secretary general in charge of production and social sector, Jean Claude Nsengiyumva, said the conference will promote the region’s petroleum potential and investment opportunities.

He said the industry experts will deliberate on recent developments, learn about new investment opportunities and share lessons on the petroleum sector.

Nsengiyumva said the last four conferences had proved to be useful forums for governments and industry players.

“The conferences have provided increasing awareness of the potential for petroleum development in the region and other important developments in the petroleum sector, including technological advancements in exploration, development and production,” Nsengiyumva said.

At the exhibition to be held on the sidelines of the conference, the EAC secretariat will educate the public on the recently launched EAC Common Market Protocols and other regional integration initiatives.

EAPCE’11 is taking place at a time when the EAC is transforming into a common market. This transformation is expected to provide great opportunities for business and investment in all sectors, as the single market provides for free movement of goods, capital and services within the region, Nsengiyumva said.

UNRA warns Kalerwe market traders
Thursday, 27th January, 2011
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A section of Karelwe road under construction just before the market
By Alfred Byenkya

THE Uganda National Roads Authority has threatened to fence off a section of the road near Kalerwe Market if the vendors do not stop encroaching on the road reserve.

According to Dan Alinange, the roads agency spokesperson, the vendors are working from the roadside despite the ongoing works.

“The contractor is finding it hard to work because of the vendors,” he said.

When New Vision visited the area, traders were offloading and selling goods from the road, disrupting the construction.

Elizabeth Namakula, a bread and milk vendor, said they were still working from the roadside because they have no where else to operate from.

“People are used to this place. Where will we get customers if the Government fences off the road? Besides, our goods are bought by passersby,” she explained.

Alinange said they want to build a four-lane road to reduce traffic jam near Kalerwe Market.

“If the vendors refuse to leave, the problem of traffic jam, especially during morning and evening hours, will not be solved,” he warned.

The Kampala-Gayaza-Zirobwe road project was commissioned by President Yoweri Museveni in November 2008.

The work is being undertaken by a Serbian firm, Energo Projekt, at about sh70b.

Alinange said the market vendors, working from road reserves and the poor drainage near Kalerwe and Mulago suburbs were the constructor’s main challenges.

“We have to make a good drainage system to ensure that water from Mulago to Kalerwe does not destroy the road,” Alinange explained.

Alinange says the road will be completed and will be commissioned by either the President or the minister of works and Transport in April 2011.

2nd UPDATE: Tullow "Approaching Finishing Line" On Uganda Dispute
LONDON (Dow Jones)--Tullow Oil PLC (TLW.LN) is "approaching the finishing line" in talks with the Ugandan government to resolve a tax dispute that has held up for months its plans to bring in new partners to develop oil discoveries there, the company's chief financial officer, Ian Springett, said Thursday.

Tullow expects to reach an agreement that will allow it to proceed with its plans to sell a share of its Uganda assets to Total SA (TOT) and China National Offshore Oil Company (CEO) no later than a few weeks after the Ugandan elections on Feb. 18, Springett said.

"We've nailed down all the main points," in a legally binding memorandum of understanding to resolve the dispute, said Tullow's Chief Executive Aidan Heavey.

That deal has been delayed because of a dispute between the Ugandan government and Tullow's former partner, Heritage Oil PLC (HOIL.LN), over capital gains tax. Some Ugandan officials have said Tullow should pay the $283 million in capital gains tax the government says Heritage owes in order to get the deal moving again.

However, Springett said Tullow "won't be paying Heritage's tax bill."

Simon D'Ujanga, Uganda's state minister for Energy and Minerals, told Dow Jones Newswires separately that the government wants Tullow to clarify some issues in its draft development plans for the oil fields in the Rift Valley before granting it a production license, which should pave the way for the approval of its planned joint venture with Total and CNOOC.

"We are still negotiating; a few things still need to be clarified," he said. The tax dispute also needs to be resolved before the deals can get government approval, he said.

Tullow is finalizing the engineering design of the Kaseme oil field development where it expects to produce first oil next year. The company has also submitted draft field development plans for the Mputa, Waraga and Nzizi fields, all located in block 2.

The government will have to first approve the development plans before issuing production license, D'Ujanga said.

The run up to the Ugandan election has played a big part in delaying resolution to the dispute, said Heavey. "During times of elections, things tend to slow down," he said. "A lot of people [from the government] were out electioneering."

Despite the five-month delay in the deal with Total and CNOOC, who are expected to pay Tullow in excess of $1 billion for a share in the Ugandan assets, Tullow has no funding problems, Springett said.

Tullow began production from oil discoveries offshore Ghana in December at a rate of 50,000 barrels a day, which will rise to 120,000 barrels a day later this year. Springett said Tullow will generate around $1 billion in cash flow from its Ghana fields this year.

Acumen now keen to expand into West African market

http://www.theeastafrican.co.ke/image/view/-/1098044/highRes/232821/-/maxw/600/-/1006g4o/-/farmerpix.jpg
Acumen has invested substantially in the agricultural sector. Photo/FILE

By Cosmus Butunyi (email the author)
Posted Monday, January 31 2011 at 21:17
With private equity investments scattered across three East African countries, Acumen Fund now has its sights trained on venturing into West Africa.
The decision to move westwards comes soon after the $10 million fund made its maiden investment in Uganda, jointly with Root Capital, a social investment fund that is pioneering finance for grassroots businesses in rural areas of developing countries.
The two funds recently invested $1.4 million in Gulu Agricultural Development Company (GADC), a cotton ginning firm in northern Uganda that is helping former victims of conflict spawned by the rebel Lord’s Resistance Army in the area to regain their livelihoods by rebuilding the cotton industry.
The joint investment will go towards purchase of conventional and organic seed cotton sourced from local smallholder farmers in the 2010/11 growing season.
“The investment by Acumen Fund and Root Capital’s investments will help GADC buy cotton from local farmers, sell the lint to international buyers and provide access to larger markets. All of these components are key to achieving a seamless value chain, maximising return to the farmers and leading northern Uganda on its road to recovery,” said Bruce Robertson, the chief executive officer of GADC.
With the deal in Uganda sealed, the fund is now in the process of finalising another one that will see it invest in the healthcare sector in Rwanda. This is one of the two investments that have been approved and are set to be made in the next few months; the other is in clean technology in Tanzania.
According to Biju Mohandas, the East Africa manager of Acumen Fund, this expansion of the fund’s investments beyond Tanzania and Kenya will not only allow the fund to contribute more towards growth in East Africa but also transform it into a truly regional fund.
“This whole region is growing dramatically. The nature of conversations is changing from that of a continent in shambles, and that requires aid, to a continent that is becoming the next big growth area in terms of economic interest,” Mr Mohandas said.
Acumen Fund, which considers the social impact of investments, alongside financial returns, has been investing in East Africa for a decade now, and even has a base in Nairobi, which was set up in 2007.
Over the years, it has made investments in the region in firms such as an anti-malaria drugs manufacturer, a chain of public toilets and producer of certified seeds for farmers.
Acumen Fund has enjoyed good fortune in the recent past, increasing its portfolio more than three times in the region over the past two years.

Multinational firms partner to improve ICT
Sunday, 30th January, 2011
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Mwai and Anil at the launch of the partnership at the Kabira Country Club in Kampala
By David Ssempijja
TECHNOLOGY firms, Computer Point and IBM, have signed an agreement aimed at improving Uganda’s information and communication technology (ICT) to transform the country’s business operations.

“This partnership is a positive step in closing the ICT gap, especially among businesses operating in the East African Community. The move will speed up economic development across the region through our enhanced services,” said Anil Kuruvilla, the Computer Point managing director.

He was addressing investors after announcing the partnership at Kabira Country Club in Kampala.

The partnership mandates Computer Point, an IT systems integrator, to offer IT solutions including infrastructure, application maintenance and development to willing financial institutions, the Government, telecoms and other corporate companies in Uganda on behalf of IBM.

Tony Mwai, the IBM country general manager for East Africa, said the alliance will leverage the firm’s IT expertise to support Ugandan businesses.

On September 2010, IBM and Bharti Airtel signed a 10 year contract, where IBM will consolidate and transform the 16 different IT environments across Airtel’s African operations into an integrated system.

Mwai says IBM’s cutting edge technology can unite business and IT, offering seamless access to IT services and resources, and cohesively integrating and managing the exploding volume of information.

“IBM’s goal is all about making businesses and IT environments ready to be part of a planet that is becoming smarter. It will do this by helping with unique technologies and services for virtualisation, energy efficiency, data management and business resiliency,” he added.


Uganda to host competitive forum
Sunday, 30th January, 2011
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By Vision Reporter
UGANDA will host the third annual global conference of the Pan African Competitiveness Forum, which focuses on helping firms develop through business cluster initiatives.

Business clustering is the grouping of firms doing similar businesses in a given geographic location. The initiative helps create a business critical mass, which increases productivity and competitiveness at national and global market fronts.

The conference will explore how to enhance the working relationship between business actors in innovations, academia and African governments’ business development agencies.

The conference will run from February 1 to 4 at the Imperial Resort Beach Entebbe. Over 400 participants are expected from across the world.

It is organised by Innovation Systems and Clusters Programme and the Private Sector Foundation Uganda with support from Makerere University, the Swedish International Development Agency and the Uganda National Chamber of Commerce and Industry.

“Uganda is privileged to host this global conference, we are optimistic that the issues to discuss will help our local businesses come together and pursue a common development goal for the good of the country’s investment strategy,” the ISCP/PACF Uganda chairman Dr. Yasin Ziraba told New Vision during an exclusive interview.

He said that ISCP/PACF Uganda chapter has been able to help in the formation of over 22 business cluster initiatives, a move that has created immense benefits through attracting financial products from banks as well as monetary and technical assistance from donor agencies.

“We have been able to establish linkages where human resource from the academia helps entrepreneurs in the informal sector to enhance their innovations through professional knowledge infusion process,” he said.

Local key note speakers at the conference include; Uganda Investment Authority executive director Prof. Maggie Kigozi, executive director Uganda Industrial Research Institute Prof. Charles Kwesiga among others.

Japanese firms, Roofings in equity deal
Sunday, 30th January, 2011
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By David Mugabe
ROOFINGS has signed an equity partnership with two Japanese steel companies in a deal that should push exports to $70m (about 156b), while bolstering the steel giants production quality and quantity.

The deal will see Yodogawa Steel Works and Fujiden International take a 10% equity stake in the third phase of Roofings’ cold rolling mills production line at Namanve.

In turn, the Japanese firm will provide technology and skills transfer, training and affordable and high quality steel products.

The $100m cold rolling mills phase is the largest segment of the three phase industry situated in the Namanve industrial park.

Upon completion, the output of the cold rolling mill plant will shoot to 120,000 tonnes. Half of this will be exported to Rwanda, southern Sudan, Burundi, northern Tanzania and Kenya.

“In value, it will increase our exports to $70m, bringing our total group exports to about $130m per annum,” said Lalani at the partnership unveiling at the finance ministry in Kampala.

At full production, it is estimated that the plant will create 2,000 jobs.
Galvanised wires, the first products from the Namanve plant opened in September last year, are currently providing raw materials for Roofings-Lubowa for making wire nails and razor wires.

This backward integration means Uganda does not have to continue importing these products, thus saving the country over sh100b in import bills.
Because of the progress of Roofings, Uganda has for the first time started exporting galvanised wires to Kenya.

Roofings first phase production line makes 1,000 tonnes of galvanised wires monthly. About 400 tonnes of these are consumed locally, while 600 are exported.

The agreement signing was witnessed by finance minister Syda Bumba, who commended Roofings for being one of the best investments in the country.

Bumba also hailed Uganda’s penetration of Kenya’s steel market. “We have been having unfair balance of trade with Kenya,” she said at the finance ministry on Thursday.

Yashida from Yodogawa said his company has 70 years experience and their investment is long term.
The manufacturing sector is making steady progress in the increasingly competitive East African region that now requires best industry practices for one to survive.

But challenges of poor infrastructure and insufficient energy supply still persist. Bumba, however, said the Government was doing all it can to ensure that roads, rail and power deficits are addressed.

The chairman of the Uganda Investment Authority, Patrick Bitature, said the investment environment is top class and there exists a healthy public-private partnership in Uganda. “I assure you that it is the right time to invest in this country,” Bitature said.

US to provide sh343b to improve maize, beans
Sunday, 30th January, 2011
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By David Mugabe
THE United States Agency for International Development (USAID) will in the next five years channel sh343b ($150m) and establish 10 warehouses across the country to improve the quality and quantity of maize, beans and coffee.

USAID mission director in Uganda David Eckerson said $30m was received in the 2010 fiscal year and USAID is “programming it right now for disbursement.”

“The current trend is that if you are a farmer and you want to dry your maize, you have to come to Kampala,” said Eckerson while addressing Ugandan journalists at the American embassy recently.

Maize and beans, are widely cultivated in Uganda and are an important source of economic livelihood and food for Ugandans.

But the producers are often left at the mercy of middlemen, unreliable weather, lack of markets and poor storage facilities.

There are parts of the country that still suffer from malnutrition despite the country’s good weather, he said.
“We are aligning our systems with the Government to improve the potential of coffee, beans and maize,” said Eckerson.

He said to encourage more cultivation and food security in the north, USAID helped negotiate leases to establish warehouses to store food, especially in Pader district, where land conflicts are common.

Investors urged to build hostels for students in Jinja
Sunday, 30th January, 2011
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By Charles Kakamwa
MANAGERS of educational institutions in Jinja municipality have requested investors to set up hostels in the town to accommodate the increasing number of students in institutions of higher learning.

David Mubiike, the proprietor of Bethel Training Institute, said whereas the number of tertiary institutions and universities has increased, students wishing to join them have been limited by lack of accommodation facilities.
“We have students from southern Sudan and Kenya, but they find problems getting accommodation.”

Mubiike made the remarks while releasing last year’s results to the students and parents of the institution.
Jinja has one university, Fairland, but several others have established branches and study centres in the town.

These include Makerere University, Makerere University Business School and Kampala University.

Nsaka Univeristy in Mafubira, on the outskirts of Jinja town, is still under construction, while the Islamic University in Uganda and Busoga University are in talks with the municipal leaders to have their branches opened in the town, according to the town mayor, Muhammed Kezaala.

There are about 10 tertiary institutions in Jinja, including YMCA, Jinja Vocational Institute and the Hotel and Tourism Training Institute.

Tororo Cement to double production
MONDAY, 31 JANUARY 2011 06:25 EMMANUEL ONYANGO

KAMPALA, UGANDA - Tororo Cement Industry, a local manufacturer of cement, lime, iron sheets and other materials will complete the expansion of its production facility worth Ushs100b ($50m) by June 2011.
According to the Chief Marketing Manager, Mr. Alok Kala, this may bring down the price of cement and other building materials hence boosting the construction industry as a result of increased production.
Cement, a major construction material witnessed volatile price trends forcing a retail price of 26,500 ($12) a bag towards the end of 2010.
Uganda Bureau of Statistics (UBOS) attributed the increase in prices to the importation of cement. Earlier last year, local cement manufactures were demanded a level playing field with imported cement from Asia and the Middle East where production is subsidized.
Currently, there's a significant drop in imports of cement which have been attributed to the increased local production and increased local competition.
Industry experts say the decline in prices is mainly due to increased local capacity as a result of increased investments that include the new Hima Cement factory in Kasese. The new plant has increased Hima's production capacity from 350,000 tonnes a year to 850,000 tonnes a year.
Kala said the expanded Tororo Cement plant will more than double the capacity of the factory from the current output of 1 million tonnes per annum to 2.2 million tonnes per annum.
In so doing, the factory is set to create more employment opportunities for the locals.
He also added that they plan to venture out into other markets like Tanzania in the near future so as to take advantage of the East African Common Market.
Manufactured goods from Uganda have found a large market, which now extends to the Central African Republic , which neighbors DR Congo.

Uganda says it will build pipeline carrying oil through Congo to Kenya's coast
By The Associated Press (CP) – 3 hours ago
KAMPALA, Uganda — A Ugandan minister says the East African nation plans to build an oil pipeline that will take the country's oil to the coast of Kenya.
Minister of State for Energy Simon D'ujang said Monday that Kenya and neighbouring Congo will help build the 750-mile (1,200-kilometre) pipeline from Uganda's Albertine oil field to the Kenyan port of Mombasa. He said the three countries will jointly own the pipeline which will have a capacity to deliver 100,000 barrels of refined oil per day.
D'ujang says construction will start as soon as feasibility studies are completed. He did not say how much the pipeline would cost.
Lake Albert, which borders both Congo and western Uganda, was found last year to have oil deposits.

Uganda Plans $2B Oil Refinery; Eyes Regional Markets -Government


KAMPALA, Uganda (Dow Jones)--Uganda is planning to build a $2 billion oil refinery to supply refined fuel products for local and regional markets, Uganda's permanent secretary at the ministry of energy and minerals development said Monday.

Fred Kalisa Kabagambe told reporters at a briefing in Kampala that the refinery would be developed in three phases under a public-private partnership arrangement. The first phase is expected to produce at least 20,000 barrels a day of refined fuel products such as diesel, gasoline and kerosene to supply the domestic market.

"The first phase of the refinery is planned for completion in two and a half years," he said.

Uganda has discovered at least a billion barrels of oil in its Lake Albertine rift basin.

In the second phase capacity will be upgraded to 60,000 barrels a day within five years, and later to 120,000-150,000 barrels a day, Kabagambe said, to supply the East Africa market, including Kenya, Tanzania, Rwanda and Burundi, as well as overseas markets.

"The government has already demarcated a 20-square-kilometer piece of land in Hoima district for the refinery project," he said.

The government is carrying out consultations on the size of its stake in the refinery, and East African member states have been invited to apply for minority stakes.

Private companies in the country, including U.K.-based Tullow Oil PLC (TLW.LN), France's Total SA (TOT) and China's CNOOC Ltd (CEO) are expected to hold the reminder of the stake in the refinery. Talks are underway over the financing and shareholding structures of the project, he said.

Tullow, Total and CNOOC have already signed a joint venture agreement for the development of oil assets in three exploration blocks, but are still awaiting government approval.

East Africa to build regional oil refinery
Monday, 31st January, 2011
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By Ibrahim Kasita

UGANDA has agreed to partner with the East Africa regional states and foreign investors to construct a $2b refinery. The move is aimed at processing petroleum products to meet the regional energy needs.

Fred Kabagambe, the energy ministry permanent secretary, said the refinery would process a wide range of products, including diesel, petrol, kerosene and aviation fuel.

“We shall start with the first phase of 20,000 barrels daily to meet local demands. We shall then upgrade the facility in the second phase to produce 60,000 barrels a day. Later, we shall have a bigger one processing more that 120,000 barrels a day,” he said.

Kabagambe explained that the refinery would be located in Kabale. The ministry was in the process of searching for a consultant to carry out studies for a pipeline that would transport petroleum products from the Lake Albert region, he added.

Kabagambe said the feasibility study on refining of crude oil had been undertaken, indicating “profitability and high returns on investment between 20 and 30%”.

The announcement comes after Uganda, Kenya and the Democratic Republic of Congo signed a memorandum of understanding aimed at co-ordinating oil exploration and development in the Lake Albert basin, located along the Uganda-Congo border.
Uganda and Kenya also talked about building the Kampala-Eldoret pipeline, which would continue to Kigali in Rwanda.

Claude Nsengiyumva, the East African Community (EAC) deputy secretary-general, said the decision to have the refinery built in Uganda was part of the region’s natural resource policy and objectives.

“This oil belongs to both Ugandans and the East African people. We want to share resources and be able to reach where they are located,” he said during a media briefing yesterday.

The brief was held to discuss the upcoming 5th East Africa Petroleum conference and Exhibition, which will held at Kampala Serena Hotel starting today and ending on Friday.

Uganda is hosting the conference for the second time. It is held every two years in the member states on a rotational basis.

The conference focuses on the potential and investment opportunities in the oil and gas sector in East Africa.

Over 800 participants, including government leaders from the EAC member states, international oil companies, together with researchers and investors are expected to attend.

Simon D’Ujanga, the energy state minister, said this year’s theme is “harnessing East Africa’s oil and gas potential and utilising the resources to create lasting values”.

“This is the time the EAC is moving towards creating a common market. This will promote full exploitation of the market and investment opportunities created by the community,” he said.

“Secondly, Uganda is moving towards commercial petroleum production. This, therefore, offers an opportunity for Uganda to show the world her progress in the oil and gas sector.”

Last year, the EAC launched its own common market, where free movement of goods, labour and capital within the region was endorsed.

The minister said the meeting would provide participants with an opportunity to assess their development in the petroleum sector and also explore varied attraction in the region.

India to build business institutes
Monday, 31st January, 2011
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By Vision Reporter

INDIA plans to set up international trade and investment institutes in selected African countries, including Uganda.

The institutes aim at equipping investors with business knowledge to help them understand cross-border trade, according to Niraj Srivastava, the Indian high commissioner to Uganda.

“The Kampala institute will be operational in three years. More institutes will be established in Tanzania, Burundi and Ethiopia. The Uganda college will initially serve all the East African Comminity countries,” he said.

The move also intends to consolidate India’s foreign investment footprint on the continent. India is helping Uganda develop its information communication technology sector through a partnership with Makerere University’s IT faculty


Vision Group gets sh2b profits
Monday, 31st January, 2011
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By David Mugabe

VISION Group registered a net profit of sh2.1b for the half year ending December 31, 2011, the company announced yesterday in a statement.

Total revenue shot to sh31b from sh25b in 2009, while gross profit was sh10b, also rising from sh8.2b in 2009.

The group registered a modest profit before tax of sh3.1b. “All revenue centres registered growth, with the biggest coming from radio and TV advertising,” read the half-year overview.

Indications are that the massive investments in the multimedia expansion are beginning to bear fruit, especially on the new footprints like TV and radio, the statement said.

Turnover rose to 22% from 15.6% in 2009, while profit before tax grew by 63%. The group said print advertising, commercial printing and circulation also registered growth compared to last year’s results.

But there was also a rise in administrative expenses occasioned by the additional support services to the new radio and TVs. Administrative costs rose to sh6.5b from sh5.3b

There was, however, a decline in total equity and liabilities from sh59.7b in 2009 to sh58.4b in 2010.

The company expects performance to remain fairly stable in the next half of the year.

New Vision is listed on the Uganda Securities Exchange.

Cipla’s Uganda Venture Plans to Invest $80 Million in Expansion
February 01, 2011, 4:52 AM EST

By Fred Ojambo
Feb. 1 (Bloomberg) -- Quality Chemicals Industries Ltd., a Ugandan pharmaceuticals manufacturer partly owned by India’s Cipla Ltd., said it plans to invest $80 million in two separate expansion programs over the next two years.

A $30 million project to expand capacity at Quality’s generic AIDS and malaria-drug plants in Kampala, the capital, will begin “soon,” Marketing Manager George Baguma said in a phone interview on Jan. 28. It will be followed by a $50 million investment in a new production line for pharmaceutical ingredients, he said. Baguma didn’t provide details on how much capacity would be expanded by.

Funding for the project will be raised from shareholders as well as through the sale of new stock, with plans to list on the domestic stock exchange at an unspecified future date, he said.

“We are just completing the design and soon plan to start on the second facility,” he said. “We have sold shares and even plan to sell more to raise more capital for bigger investments.”

The number of Ugandans infected with the HIV virus that causes AIDS has increased to 7.1 percent of the population from 6.1 percent five years ago, according to the Health Ministry. At least 300 people die in the country daily from malaria, according to Afro Alpine Pharma Ltd., a Ugandan pharmaceutical company.

The East African nation has about 442,000 people in need of generic AIDS drugs and only 218,900 have access to the treatment because of financial constraints, Uganda AIDSs Commission data shows. Quality Chemicals’ plant in Kampala has the capacity to produce 6 million malaria or generic AIDS tablets daily, with room for expansion, according to the company.

Shareholders

Ugandan shareholders and Cipla each own 41.8 percent of Quality Chemicals, while the remainder was sold last year to South Africa’s Capitalworks Investment Partners and U.K.-based private equity firm TLG Capital, Baguma said.

The expansion of the existing plant will target enhancing quality, quantity and competitiveness of the Quality Chemicals’ products, he said. The World Health Organization has cleared the plant to manufacture AIDS and anti-malarial generics, he said.

The company is completing registration of its products in neighboring Kenya, with plans to start exports in four months, Baguma said. Other regional countries as well as southern African countries are also being considered for exports, he said, without providing more details.

Uganda's proposed refinery to cost $2 bln: official


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By Elias Biryabarema

KAMPALA (Reuters) - A proposed refinery to process Uganda's newly found commercial petroleum deposits will cost $2 billion and will be developed in three phases, a senior government official said.

The east African country, which discovered hydrocarbon deposits in 2006 in the Albertine rift basin along the border with the Democratic Republic of Congo, said in late November it planned to build local refining capacity to avoid the pitfalls of other African crude producers.

It hoped a refinery would create employment, guarantee higher earnings from petroleum exports and help integrate the oil sector into the larger economy.

Fred Kabagambe Kaliisa, permanent secretary in the Ministry of Energy and Mineral Development, told reporters late on Monday the project would be a partnership between the government and the private sector.

"We need about $2 billion and it's going to be very profitable because, according to the calculations in the feasibility study, it will have an internal rate of return of between 20 to 30 percent," he said.

Construction of the refinery, which is to be based in Hoima district about 230 km (143 miles) west of the capital, is to begin in 2012.

Britain's Tullow Oil, the lead explorer in Uganda, said last month it expected to commence commercial petroleum production in 2012, and not in the last quarter of this year, its previous target.

"We have adopted the feasibility study's recommendation, and the refinery will produce the whole range of products from kerosene, petrol, diesel, jet fuel etc," Kaliisa said.

He said the first phase, whose construction is expected to take two years, will entail developing capacity of 20,000 barrels of refined products per day, enough to meet domestic demand.

"Then we'll increase that capacity to 60,000 barrels per day in the second phase, which will be sufficient for the domestic market and also meet part of the demand in the regional market."

In the third phase, refining capacity will be racheted up to between 150,000 and 200,000 barrels per day, much of which would be exported within the region.

Twenty square kilometres of land have already been mapped for the facility, he said, and the government is negotiating with local authorities and land owners for compensation under a what he described as a "willing buyer, willing seller" policy.

The issuance of new exploration licenses is likely to resume in 2012 after parliament passes an oil law to regulate the sector in the course of this year, he said.

Tullow Oil and other explorers estimate Uganda's reserves to be upwards of 2 billion barrels.

Electricity demand to triple by 2023
Tuesday, 1st February, 2011
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By Ibrahim Kasita

UGANDA'S electricity demand is expected to triple in the next decade assuming economic growth trends continue, paving way for increased investments in the sector.

“Based on the current economic growth (7%), domestic power demand will increase from 370MW to 1,130MW in 2023,” a new study has indicated.

“Power demand in neighbouring countries like Kenya will also rise which will result in an increase in demand of imports of electricity from neighbouring countries by transmission interconnections.”

The study – a draft Hydropower Master Plan – found out that water-generated electricity is one of the best options for Uganda. It identified seven potential hydropower sites.

But three prospective sites – Karuma, Isimba and Ayago –were selected for immediate development. The study was funded by the Japanese government through its development arm – Japan International Cooperation Agency. The energy ministry requested a thorough investigation and prioritisation of potential hydropower sites and preparation of the plan up to 2030 under its energy sector development strategy.

The revelation comes at time when the East African Community states –Uganda, Kenya, Tanzania, Rwanda and Burundi –are facing power shortages due to climatic change which affected hydrological conditions.

To meet the shortage gap, Uganda has deployed emergency thermal power supply since 2005, which necessitated high subsidies to mitigate high tariff.

“It is therefore crucial to develop the country’s hydropower resources to provide cheaper electricity,” Paul Mubiru, the director of energy, stated.

“This we can do with our Energy Fund, inviting independent power producers and or public-private partnership.”

He said the energy sector key priorities were increasing power generation capacity, building transmission lines, accelerating rural electrification, promoting energy efficiency and strengthening the policy, legal and institutional framework.

Others are promoting renewable energy, promoting peaceful applications of nuclear energy and building capacity in the energy sector.

“The development of the master plan on hydropower development is a step in the right direction towards achieving the objectives of the National Development Plan,” Mubiru said.

It means that a worker from either Kenya or Tanzania has a higher job output compared to their Ugandan counter.

MV Kalangala resumes operations
Tuesday, 1st February, 2011
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MV Kalangala on Friday resumed operation after undergoing five months of repairs. The operation of the vessel has also been taken over by the works ministry after the expiry of the three-year contract by Mulowooza & Brothers.

The bidding process for the new operator is also ongoing, top officials said. The fares for the vessel have also remained at sh14,000 for first class and sh10,000 for others

Telecom sector dictating inflation trends, says UBOS
Wednesday, 2nd February, 2011
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By John Odyek

THE pattern of consumption in Uganda is increasingly being dictated by mobile phone usage, shifting emphasis away from food. As a result, the consumer price index was restructured to accommodate communication as a separate basket.

A market basket is a collection of goods and services.

Communication was previously part of the transport and communication basket.

Food weighs 28% in the consumer price index. Communication, which hardly existed in the index a decade a go, weighs 6%.

Communication comprises mobile phone air time, fixed line telephones and Internet services. Other components of the consumer price index include housing, water and electricity, clothing and foot wear, recreation and culture. Others are restaurants and hotels, health, furnishing and household equipment, alcohol beverages, tobacco, education, narcotics and miscellaneous goods and services.

David Katende,who runs a small business in Kampala, says several years ago, he was not spending on airtime.

“Now I have two mobile phones. One for WARID and the other for MTN. I spend between sh5,000 to sh10,00 on airtime daily. However, I plan for all the money I use to buy airtime, but on a busy day when I have to make a lot of calls, I spend about sh25,000," he explains.

Katende says he ensures that all his phones have airtime in case of an emergency.

The reduction in mobile phone call charges last October caused a major fall in inflation rates. The effect of this reduction will keep inflation low for the whole of 2011 even if there are pressures pushing it up, the Uganda Bureau of Statistics (UBOS) officials have predicted. In October, there was a 46% reduction in call charges because of the stiff and growing competition among the telecom firms.

"During that month, we discovered that the consumer price index fell by 0.3% and, hence reducing the October inflation rate.

"This resulted in the annual inflation rate falling by 0.1%,” Ronald Ssombwe, a senior statistician UBOS told Business Vision.

In 2009, the annual average headline inflation rate stood at 13%, but fell to 4% in 2010. Ssombwe said mobile phone call charges contributed about nine percentage points to the reduction of the inflation rate between 2009 and 2010.

Twelve months ago, the industry average mobile call rate was sh11 per second, which fell to sh5 and then to sh3 per second. ORANGE, Airtel and WARID have promised to keep their rates at three shillings per second. WARID is offering sh1 per second from 6:00am to 6:00pm.

For the short message service (SMS), Airtel is offering unlimited short messages to its subscribers for sh200 per day and sh50 to other networks.

Ssombwe says the impact of the telecommunications sector can no longer be underrated in the consumer price index.

“There was excitement among various stakeholders, especially the customers, but airtime sellers were not happy with the result of the competition,” he explains.

He, however, revealed that last November inflation had started rising. “Although it went up, it was supressed by the fall in call charges,” Ssobwe says.

He adds that this effect would take a year to phase out, and that inflation was rising at a declining rate.

There will be a one-year effect on inflation because of this drop in call charges.

There have been questions whether the effect of the one-month drop of charges has had any effect on the economy.

“The new innovations in the telecom sector, like giving customers airtime on credit, may drive the call charges even lower.

“If we get more competitors in the sector, it will also drive the charges lower. It will have a direct impact in reducing the total inflation rate.”

In mid-1995, Celtel now Airtel had the monopoly of mobile phone business in Uganda when call prices and mobile phone handsets were expensive.

But the monopoly was changed into a duopoly with the entry of MTN in 1998. The duopoly led to a gradual decrease in prices. When uganda telecom (Mango) entered in 2001, an oligopolist market was created when the three big players still dominated the market and charged highly.

With the entry of WARID and Smile Telecom in 2008, and Orange in 2009, a perfect competitive market situation was created.

“When WARID came in, there was stiff competition. This led to present price war, which caused the 46% decline in call charges,” Ssombwe remarked.

Adam Mugume, the director for
research at the Bank of Uganda, acknowledges that the effect of reduction in call charges played a major role in reducing inflation.

“When inflation declined significantly in October, it was because of airtime. When you make a shift or a jump, you reduce inflation because the income that would have been spent on air time is saved.”

Central Bank injects sh1955b to stop shilling depreciation
Wednesday, 2nd February, 2011
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By Ibrahim Kasita

UGANDA has pumped $85m (about sh1955b) in the foreign exchange market to stop the local currency decline against the dollar and check imported inflation in the past six months, the Central Bank has disclosed.

“We are not trying to defend a certain exchange rate, but we want to ensure a smooth and orderly system,” Adam Mugume, the Bank of Uganda director for research, said, adding that intervention was between July to December, 2010.

“The current level (exchange rate) does not reflect the true economic fundaments. Our intervention is to ensure that the exchange rate depreciates evenly and smoothly.”

The shilling has been under sustained pressure since July last year due to soaring demand for the greenback and investor sentiments.

During the period, the Central Bank has intervened over five times to support the shilling.

Mugume believes that the low value of the shillings is driven by “the market psychology and perception of the traders and buyers.” Meaning that speculators are weakening the local currency.

“Offshore investors are tricky because they can speculate and decide to buy the dollars in this liberalised market. We have to be in the market to ensure that market psychology does not sway to direct trends in the foreign exchange market,” he explained.

“However, we don’t expect to reverse the policy (liberalisation), but we want to make sure depreciate or appreciate gradually not to destabilise the economy.”

A weaker shilling increases prices for imported goods, delays investments, which could result in lower economic growth.

To avert economic slow down, Bank of Uganda announced “a more aggressive” stance to support the exchange rate as well as target an inflation rate of 5%.

“Underlying price pressures arising from rising international food prices, the exchange rate depreciation, and poor weather expected in the coming months, suggests that (we) will tighten monetary policy to meet the inflation objectives,” Mugume said.

He said that the Central Bank will continue to provide sufficient liquidity to the financial systems to reduce strains in the money markets caused by delays in fiscal injections “but mindful of the fact that excess cash spills over in the foreign market.

Mugume allayed fears that the bank’s continuous intervention in the market could lead to the reduction of Uganda’s foreign exchange reserves standing at sh2.8b as of November, enough to sustain imports for over five month period.

“Building reserves is costly and earns zero interest,” he said “We build reserves not for admiring but to absorb external shocks. We need to stabilize the market.”

Reto work on trying to come up with a way to achieve what the president set out,” he said.

Recovery ends, the journey to modernisation starts

Uganda’s economy for the past 25 years can be divided into three phases; from economic decline to the path of recovery, ownership reforms and consolidation to a journey into industrialisation. Ibrahim Kasita recalls the Journey.

1986-91: From economic decline to recovery
NRM came to power in January 26, 1986 with a clearly stated commitment to the Ten-Point Programme premised on state-led economic development, elimination of corruption, decentralisation of power and democracy.

An in-depth economic study was conducted by experts who prescribed for the liberalisation and private sector led-economy. NRM political executives opposed the recommendations and stuck their guns on state interventions, retaining control over foreign exchange rates and controls over prices of essential imports like sugar. This did not work out well, as inflation skyrocketed to over 300% affecting economic indicators.

1987- Economic Recovery Programme
The crippled economy taught economic lessons to NRM administrators who reassessed their earlier position on state intervention and resumed dialogue with the International Monetary fund (IMF) and the Word Bank over financial support for an Economic Recovery Programme (ERP).

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Statistics House (foreground) and the Ministry of Foreign Affairs office
(right) are some of the new high rise buildings in Kampala

ERP was aimed at promoting economic stabilisaton and long-term growth by mobilising investments in physical assets and rehabilitation of infrastructure.There was sharp devaluation of the shilling by 66% and the two zeros were knocked off after the currency reforms.

A sense of economic reform ownership was instilled in the NRM political executives. This was stamped when the Presidential Economic Council was created and chaired by President Yoweri Museveni. It was a decision making body that fostered debate on policy options for structural adjustment reforms with assistance of independent experts, seminars and public discussion papers.

In December 1989, after a special government seminar for politicians, officials and the academia, arguments for economic liberalisation prevailed with legalisation of the foreign exchange market.

In 1990, foreign exchange system was liberalised with the introduction of forex bureaus to allocate non- coffee foreign exchange receipts.

Another turning point was in 1991 when the ministries of finance and planning were merged into the ministry of finance, planning and economic development. This was after failure to control public expenditure on account of the monetisation of the budget deficit.

However, this reform lowered the annual inflation rate from 190% to 28% by the end of 1991 and GDP grew from negative figures to an average of 6.3% per year over 1988-91.

In the same year, the Uganda Revenue Authority (URA) and Uganda investment Authority (UIA) were created. A debt strategy was formulated through rescheduling and debt forgiveness.

Government ownership and deepening reform, 1992-1998
The second phase of reform was characterised by deepening government ownership, reflected in the decision to embark on a series of ambitious and potentially contentious structural and institutional reforms from the early 1990s.

The NRM government reformed its monetary and financial policies by instituting a cash budget system to control public expenditure, ensuring real interest rates on government borrowing through Treasury bills, further liberalising foreign exchange allocation and exchange rates, and removing government controls over interest rates to improve access to credit
In 1992 Treasury bill issues was decentralised. In the same year, the Central Bank allowed commercial banks to set their own interest rates to create more competition.

1993: Privatisation of state enterprises starts while the Central Bank institutes inter-bank exchange market to replace the weekly forex auctions.
1996-Value Added Tax (VAT) introduced.

1997- Capital account and balance of payment opened up to increase private capital flows.

1997-Poverty Eradication Action Plan (PEAP), a national development framework and planning tool, launched.

April 1998-Uganda becomes the first country eligible for the Highly Indebted Poor Country’s Initiative (HIPC)

2006 to date
2006 marked the start of a journey to transform Uganda’s society from a peasant to a modern and prosperous economy within 30 years.

2006-Foreign debt slashed by multilateral creditors; the World Bank, IMF and the African Development Bank under the Multilateral Debt Relief Initiative (MDRI). This initiative reduced Uganda’s debt to $1.6b from $4.6b.

2007 –An energy fund to work as seed capital for electricity infrastructural projects was set up. It was used to kick-start the 250MW Bujagali hydropower project.

2008 –The Uganda National Road Fund was established to ensure financing of routine and periodic maintenance of public roads in the country; and assist the local governments in the exercise of their functions relevant to public roads under any enactment.

Also the Rural Financial Services was established and strengthened in an effort to avail the active poor funds to start-up their businesses and create jobs.

2009- The National Agricultural Advisory Services (NAADS) was revived and restructured to refocus on farmers needs.

To sum-up Uganda’s economic reforms, the NRM administration started with stabilisation and devaluation measures through the Economic Recovery Programme aimed at warding off the deepening economic crisis.

This was combined with investments in refurbishment of infrastructure. Price and structural reforms followed with legalisation of the parallel foreign exchange market and the abolition of the state monopoly in coffee marketing.

A series of key institutional reforms were subsequently introduced in the 1990s to improve the revenue collection and the efficiency of the civil service, and in the form of financial expenditure management to improve the efficiency of the budget process and predictability of expenditure commitments.

Northern Uganda on road to recovery

By Barbara Among

Northern Uganda, once dubbed by a UN official as the world’s worst forgotten humanitarian crisis, is steadily emerging from the country’s most brutal conflict.

Most internally displaced persons have returned home — thanks to improved security. Service delivery, previously provided by non-governmental organisations, has reverted back to the elected leaders.

Indeed, revival has gripped the region; many people walk leisurely up and down village paths. Maize plants are blossoming everywhere, almost unable to carry their heavy cobs. Fresh murram roads snake through the villages and shrieks of primary school children playing at school cut through the air.

As the sun goes to sleep, men cluster in dozens to sip kongo ting (a local brew) from clay pots. They chat away animatedly, in high pitched tones, and laugh with abandon. Just four years ago, this would have been impossible. Then people talked in hush tones — about the war. Now that dark subject hardly gets on the kabozi (conversation) agenda.

About 90% of the population has left the camps along with painful memories of untold suffering, and returned to their villages.

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Internally displaced people return home in 2006

The Government started a programme of voluntary resettlement about four years ago, after peace talks with LRA rebels collapsed. A major military offensive later drove the rebels into the jungles of eastern Congo and eventually into the Central African Republic (CAR), where they have been holed up since.

That opened the way for about 1.7 million people to rush back home and take to agriculture. That effort has paid off: The region is pouring simsim, millet, cassava, sweet potatoes, groundnuts, maize, citrus fruits, tobacco and cotton into the market.

Wholesale and retail trade is booming; well stocked shops with new products, mainly from China, stand out like decorations in town centres. New buildings sprout daily and the smell of mortar fills the air in the towns. Peace is back. The peace deal between Khartoum and Juba, signed in January of 2005, could not have come at a better time. As a result, trade between northern Uganda and Sudan, the DR Congo, Congo Brazzaville and the CAR is roaring.

Big names like the Mukwano and the Madhvani groups have invested in Lira and Oyam districts. Up to sh20b is up for grabs if the farmers double their production of sunflower, the key raw material for Mukwano’s multi-billion shilling cooking oil business.

The virgin soils of northern Uganda are also ideal for sugar cane, the bedrock for Madhvani’s sugar production.

Nile Breweries gets sorghum from the region for one of its brands; while British American Tobacco now also gets tobacco from the region.

Banks have also flooded the area for a piece of the cake. Besides Post Bank and Stanbic Bank, which have always been in the area, 10 new banks are trying to outdo each other.

Hotels are countless, complete with the Internet and pay TV. Hundreds of night clubs bubble with life, you might think you are in the capital, Kampala.

To prevent the LRA rebels from returning to the region, government continues to pursue them in the DR Congo and CAR. About 40,000 Ugandan soldiers are deployed in strategic locations to ensure security, while the Police have taken over law and order.

2011 appears to be the year of even greater reconstruction in the region. The war zone has transformed into a huge civilian-run reconstruction programme, with significant donor support. As the US ambassador to Uganda, Jerry Lanier, said, the region is suffering from too much outside interference.

However, the region, whose products need value addition to attract better revenue, is still suffering from little or no support from the Government. Power shortage and poor infrastructure are still major constraints to business in the region.

Most roads that connect towns and the region to its main trading partner, Southern Sudan, are impassable. Most welfare indices are poor in the north, largely because of the two-decade conflict and weak state institutions, according to recovery agency PRDP.

A 2009 Uganda Bureau of Statistics report confirmed the north-south divide, with average national poverty down to 31% while in northern Uganda it is nearly double, at over 60%.

The conflict has also had an enormous impact on the demographic and skills base of the region. A large percentage of the population is currently under 18, with limited or no education and skills. The number of children attending school is still low and the school drop-out rate stands at 71%, compared to a national average of 40%.

Traditional subsistence farming, the means of livelihood in the region, is unfamiliar to most 30-year-olds, who have grown up in the camps. Experts say the scenario could aggravate insecurity in the region as young people face difficulties securing an income and thus become an easy target for recruitment into banditry.

As a result of lack of education, the majority lack the skills to take up available jobs and many will not benefit from opportunities that have come with the economic recovery.

The land question
Among the biggest challenges in 2011 will be land disputes as IDPs return home. Because the land is customarily owned, decision-making processes are complex, further aggravating the matter.

Moreover, the rapidly growing population exerts even more pressure on the land resource.

For the better part of 2010, land acquisition for investment has been highly sensitive and runs the risk of quickly becoming politicised, as political leaders seek to articulate and protect the interests of their people, as well as their own.

In the last five years, debates on economic recovery of the north, including government proposals to industrialise the region, have caused some political ire as evidenced in the Madhvani case of 2006, and it is expected to rage on in 2011.

One such programme that has earned the Government rebuke from local leaders is the PRDP, a three-year joint venture between the Government and development partners.

The project, which is being implemented under the Prime Minister’s Office, seeks to lay a foundation for the recovery of 40 war-ravaged districts. It carries on from the five-year Northern Uganda Social Action Fund, which was funded to the tune of $100m (sh220b).

But for all the pomp that came with the $606m (sh1.3 trillion) projects, will PRDP open a new chapter in the lives of people in the war-ravaged north?

Uphill task
The north lacks social services and infrastructure like schools, health centres and roads which the PRDP is supposed to provide.

In a recent survey by the donors, most returnees said they were not aware of the programme which started in July 2007.

Another survey by the Law Refugee Project indicates that the local leaders do not understand the plan and there is confusion right from the office of the Prime Minister.

Norbert Mao, the Gulu LC5 chief, believes the money is too little to meet the need.

“The education sector alone needs $2b (sh4.4 trillion), so the $606m is an under-dose that may just kill the patient,” he says. He believes that total reconstruction of the north’s 40 districts requires $10b (sh2,200 trillion).

Richard Todwong, a presidential aide in charge of the north, says: “The north can’t be rebuilt in only three years and the $606m is too little compared to the needs and demands of the people.”

Challenges said to face the project are corruption, poor implementation strategy and lack of awareness about the programme. Other challenges stem from delays in release of donor funds as well as conflicts between district politicians and area MPs.

So far, the most visible achievement of the plan is the return of the population home and there is an evident favourable shift in public opinion of the Government.

Nonetheless, the Government could fail to capitalise on the goodwill if it does not deliver on development promises. But not all is lost. Donors are trying to resuscitate the business potential of northern Uganda and also help the community rebuild their lives.

For instance, DFID in August granted 13 million pounds to boost investment in the region. Jane Rintoul, the head of DFID in Uganda, expects 20,000 jobs to be created as a result.

However, over the years, a number of projects have come and wound up without much impact.

As 2011 kicks in, there is need to debate the appropriate path of social economic recovery in the region.

Sameer to double milk production

Written by Immaculate Wanyenze
Wednesday, 02 February 2011 19:11
Sameer Agriculture and Livestock Limited plans to double its milk production within five years, opening up fresh opportunities within the dairy industry and boosting its exports to neighbouring countries.

Management has revealed that milk production could reach 600,000 litres a day by 2015, the highest amount on record.

Sameer’s Vice Chairman, M.S Parikh, says the company has already invested $15 million in a milk drying plant to meet its target. He said more Ugandans stand to get employment opportunities with Sameer’s expansion drive.

“Given that the majority of Ugandans are engaged in agriculture, we strongly believed that if we made the right kind of infrastructure investments, built the right kind of milk collection networks, invested money in the right products, we would be able to create a wider market for Ugandan products which would ultimately give the farmer better revenues for their milk,” said Parikh.

Sameer has already opened opportunities to its agents. Under the scheme, a person gets a branded kiosk after depositing Shs 2m. The agent also receives a branded refrigerator.

The company thereafter delivers all its products like Fresh milk, UHT milk, butter, ghee, yoghurt and milk powder for sale.

Karamoja to get power

Written by Samuel Nabwiiso
Wednesday, 02 February 2011 19:15
Plans are underway to connect hydro electric power to Karamoja, a sub-region endowed with so much minerals but whose people continue to languish in poverty.

After connecting power to Karamoja, the sub-region is likely to attract investment.

Eng. Elias Kiyemba, the Chief Executive Officer at Uganda Electricity Transmission Company Limited (UETCL), said government will transmit the power from the Opuyo sub-station in Soroti to Moroto.

“We expect to transmit power of 132 KV through a private contractor but the line is to be supervised by UETCL and it will traverse the district of Soroti from the termination point at Opuyu substation through Amuria, Katakwi to Moroto, where a high voltage substation will be constructed,” he explained.

Karamoja represents a typical case of two extremes: abundant mineral wealth and severe poverty. The region is said to possess substantial deposits of gold although no official confirmation has been issued to the effect. The region also has Gum Arabic, a valuable tree used in rubber components.

But the region is also a perfect embodiment of poverty. Harsh times in the region have forced mothers and their children to Kampala to beg. Part of the reason for the poverty is the few investors willing to operate in the sub-region. The connection of power could, however, solve that.

Kiyemba pointed out the UETCL intends to engage firms to carry out an environmental and social impact assessment, plus a resettlement action plan for the project.

The cost of the project, expected to be largely funded by government, will be known after the environmental assessment and resettlement plan are completed, Kiyemba said.


Roofings partners Japanese firms
Business
Written by Sulaiman Kakaire
Wednesday, 02 February 2011 19:17
Roofings Rolling Mills Limited has partnered Japanese firms as it seeks to construct a plant at Namanve estimated at $100 million.

Roofings has brought in Yodogawa Steel Works and Fujiden International to pull off the project that is likely to change the landscape of business in steel in Uganda.

Sikander Lalani, chairman Roofings Group, revealed that the partnership will aid the firm in technical assistance from the Japanese firms. “This partnership will ensure technology transfer, technical assistance, and training and best quality controls for the Roofings plant,” he said.

At least half of the products to be produced at Namanve will be exported.

“This plant will have installed capacity of 120,000 metres and 50% of its products will be exported to Rwanda, Burundi, Southern Sudan, Tanzania and Kenya markets,” said Lalani. According to estimates by the Roofings Group, the company’s export earnings are expected to go up by $70 million this year.

Roofings has pledged high quality products to compete in the foreign markets after the company got assurances for the supply of quality raw material from Italy, Japan and India.

The company currently employs more than 1,200 people and expects the workforce to reach 2,000 soon.

CAA plans to overhaul inland aviation industry
Written by Simon Musasizi
Wednesday, 02 February 2011 19:23
Attempts are underway to reverse the bleak picture of Uganda’s inland civil aviation industry as more funds are channeled to revive the once thriving sector.

The plans come amidst a brighter outlook for the tourism, oil and mining sector, expected to raise inland flights.

“We are looking at the tourism and agricultural potential of this area; tracking fruits in their fresh state from Kasese to Entebbe,” says Ignie Igunduura, the Manager Public Affairs at the Civil Aviation Authority.

He adds: “We think that if the oil we discovered as a country begins to come out, we could see a significant change in the cost of fuel and increase activities.”

However, the road to recovery is long. Figures from the Civil Aviation Authority depict a worrying trend; passenger numbers have dropped from 43,766 passengers in 2003 to 21,868 in 2007.

Arua airfield, for example handled 29,783 passengers in 2003, but the figure dropped to 11,899 by 2007. There is a similar drop in Gulu, another top destination.

Igunduura attributes the trend to improvement in the road network and the return of peace in northern Uganda. “Arua and Gulu were booming destinations when there was still insecurity but it’s now very safe to drive; the road is very good,” he said.

Airfields managed by local governments remain dilapidated due to low revenues from inland aviation. For example, Adjumani airfield was declared a no-fly zone when a Uganda Wildlife Authority aircraft crashed at the airfield due to overgrown grass.

“Maintenance is very expensive for us because of the low traffic. Yet whether you have passengers or not, you must maintain the same safety standards,” Igunduura says.

According to Igunduura, CAA pays a monthly fee of Shs 4m for maintenance of Arua airfield, for example, which is about Shs 48m annually. Gulu gets about Shs 6.5m monthly while Kidepo gets Shs 3m monthly. This goes into maintaining the surface, shoulders and buildings.

CAA gets financial support from the national treasury towards maintenance of airfields, but this keeps fluctuating. The money had reduced from Shs 575m in 2002/2003 to Shs 3.3m in 2007/2008. In 2005, expenditure outstripped the money the CAA had in its coffers.

However, the money is set to increase this year, with CAA expected to be allocated Shs1.6bn. This money will boost CAA’s plans for the inland aviation industry.

There are a total of 45 airstrips countrywide, 13 of which are managed by CAA. These include Arua, Gulu, Kidepo, Kisoro, Masindi, Moroto, Mbarara, Kasese, Pakuba, Jinja, Lira, Soroti and Tororo.

The national airfield network is made up of three players; airfields managed by CAA, airfields managed by the private sector, and those managed by the local government. CAA is mandated to inspect and audit to ensure aviation safety and security is maintained at all the airfields.

Part of CAA’s plans includes building an aerodrome in Kampala, to be located either at Namanve or Lubiri. Airfields such as the one in Jinja, which had been neglected, have been refurbished.

“We have now put back the buildings, put back all the utility services and re-graveled the runway; Jinja is now open,” Igunduura says.

CAA has also funded the construction of new terminal buildings for Arua, Gulu and Kidepo airfields. There are plans to upgrade the Arua airfield from murram to tarmac to meet all weather conditions.

For Soroti, the second largest to Entebbe in terms of facilities to handle sophisticated operations, CAA plans to lengthen the runway from the current 1,860 metres to 2,500 metres, and have landing lights for 24-hour operations.

CAA has allocated Shs 40bn to lengthen the Kasese airfield runway from 1,750m to 2,500m. The airfield will have a new passenger terminal building, air navigation equipment (control tower) and landing lights.

The development of inland aviation is tied to initiatives by the East African Community. Each country was tasked to select three airfields to be developed by the East Africa Community. Uganda has selected Jinja, Kasese and Arua.

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Uganda’s Sugar Output By Biggest Suppliers May Rise 20% in 2011
February 04, 2011, 10:38 AM EST

By Fred Ojambo
Feb. 4 (Bloomberg) -- Sugar production at Uganda’s three biggest plants may rise 20 percent this year after expansions, the Uganda Sugar Cane Technologists Association said.

Output may climb to 350,000 metric tons from 292,052 tons last year, the association said in an e-mailed statement today. Production will be sufficient to meet domestic demand and provide a “significant” amount of exports, it said.

Supply at Kakira Sugar Works Ltd., the biggest producer and owned by Madhvani Group, will rise 9.2 percent to 165,000 tons, the agency said. Sugar Corp. of Uganda Ltd., the smallest, will produce 7.1 percent more at 54,000 tons and Kinyara Sugar Works Ltd. may produce 39 percent more at 126,000 tons. Kinyara is 51 percent-owned by Rai Group, a Kenyan and Mauritius-based agro- forest company.

Uganda imported 45,988 tons and exported 7,919 tons of sugar in 2009, according to the agency.

Museveni promises to widen Jinja highway
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By Al-mahdi Ssenkabirwa (email the author)
Posted Saturday, February 5 2011 at 00:00
President Museveni has promised that Kampala-Jinja highway will be turned into a four-lane dual carriage way to handle the growing traffic if re-elected in this month’s polls.

Mr Museveni said other roads such as the kono-Kyetume-Katosi-Kisoga-Nyenga have been surveyed and construction works will commence soon. The President, who is also the NRM presidential candidate, made the pledge on Thursday at a rally at Nakisunga Sub-county playground in Mukono South Constituency. He had previously held another rally at Majo Saza grounds on Buvuma Island.

The President warned the people to guard against opportunists who want to drag cultural leaders into politics, saying they are the real enemies of cultural institutions and only want to destroy them. “The NRM brought back cultural institutions, including the Kabakaship and it can’t be the one to destroy them. Guard against opportunists (Amalindirizi) like Nambooze (Betty),” he said. “I am the one who restored these cultural institutions but you have never heard me even once, using the name of the Kabaka to gain political support.”

Commenting about the Cultural Leaders Bill 2010 that has been passed into law, Mr Museveni explained that the Bill only seeks to bar traditional leaders from politics.

He said effective next financial year, the government would provide free education and technical skills to Senior five and six students. He said students, who excel but do not make it to university on government scholarship, would get student loans that they can pay back after getting jobs. He pledged governments’ commitment to build a district hospital for Mukono following the creation of Buikwe District under which Kawolo Hospital now lies.

On vanilla prices , he dispelled claims by the opposition that he brought down the prices of the cash crop, saying that the forces of demand and supply are controlled by the market itself and not by the government.
He urged the people to vote the ‘wise man with a hat’ and all NRM flag bearers, adding that the party has the capacity to handle all Uganda’s challenges.

Oil: When are the seeds of a curse sown?
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PROGRESSING: Oil exploration in the Albertine is expected to provide employment opportunities to many Ugandans. FILE PHOTO

(email the author)
Posted Sunday, February 6 2011 at 00:00
For close to five years now, Uganda’s oil industry has attracted heated debate, especially on the lack of transparency in the industry. In a two-part commentary, Isaac Imaka analyses Uganda’s young oil industry by tracing the discovery of the mineral, the major developments in the industry; its impact on the social, economic and political life of the country, and the lessons from different African oil-producing countries.

In the 1920s, Mr E.J Wayland, then a government geologist, made the first significant oil discovery in the Lake Albert region; a few years after setting up the first geological survey in East Africa. The oil issue would later be shelved for 64 years until 1984 when the first unit for the exploration of oil – under Mr Fred Kabagambe-Kaliisa, now the permanent secretary ministry of Energy and mineral development - and it’s this unit that worked on the first oil law and the agreement of cooperation with Congo to prevent any conflicts in case oil drilling was to start.

In 1985, Uganda had followed the path taken by many African oil producing countries of giving bids to big international oil companies – Shell, Exxon and Total - but this was blocked by President Museveni who - after less than two months in power - at a February 3, 1986 meeting, said the oil unit lacked capacity to trade in oil with the international oil companies.


The red flag helped the unit to formulate an oil exploration policy, gather information about the country’s oil, and also form the Petroleum Exploration and Production Department [PPD] in 1991 which entered into agreement with Petrofina, a Belgium-based company, to explore the entire Albertine Graben.

Eye-opener
The company later pulled out due to political constraints between Belgium and Congo but it had opened the route for other companies.
In 2003, Heritage Oil and Gas Company came in and drilled the first deep well [2km under].

From the time of discovery, public attention to oil was mild, only limited to the echelons of political power until early 2000 when President Museveni and NRM cadres started citing discovery as the end to the country’s miseries and its reliance on donor funds. But does exploration mean a done deal for Uganda’s economic status?

Countries like Equatorial Guinea have 10 times more oil than Uganda but they are not doing well because they lack the structure and mechanisms to manage the oil. Uganda’s oil debate has been shrouded in suspicion for what many say is lack of transparency and a regulatory framework. Two important Bills; the National Oil and Gas policy and the Revenue Management and the Resource Management are now before parliament. The laws might help bring transparency and swift management of the oil.

The continued secrecy and unwillingness by the government to publicise the Public Sharing Agreements even to MPs could imply that either Ugandans are being ripped off, that there is high level corruption or that the government is simply dragging its feet on such an important matter.
Norway, the world’s role model in oil management and one of the world’s largest oil exporters, has been able to turn oil from a curse to a blessing because of the amount of information it makes public about the strategy and investments.

Managers of the oil fund meet regularly with parliament and journalists to report performance and risk exposures. This level of transparency has made the investors and Norwegians to view the fund as a professional outfit motivated by the bottom line rather than politics and poses no threat of increased volatility and has caused tremendous development.

The Ugandan government needs a balanced mechanism of de-linking politics from mining capita and also, of linking mining capital with politics; something that calls for strong fiscal discipline and transparency. This requires the formation of strong and independent financial institutions, an independent revenue body, a corrupt free public sector, a national oil company formed by a statutory framework, an independent oil regulatory body, an independent oil ministry with an independent revenue fund which will keep oil money within.

Mr Kabagambe, a geologist with 35 years of experience in mineral exploration who has been at the heart of Uganda’s oil for over 20 years, is optimistic that Ugandans will not be ripped off by foreign companies because they [energy ministry] “are not spectators but are part of the industry.”

But Mr Dickens Kamugisha, the chief executive officer of African Institute for Energy Governance, insists that if oil is for Ugandans then they have “a right to know whatever is going on.” Although there is a provision for local content in the oil industry, Ugandan firms are yet to fully appreciate what role they can play. The lack of knowledge and capital is a major hindrance.

Manpower development
“This is not a peasantry economy where you have every Ugandan participating in growing beans and cotton,” Mr Kabagambe says. There is need to therefore develop local corporate capacity that will enable local firms take up the challenge. Uganda’s oil potential now stands at two billion barrels from just 45 per cent of the potential area. If Cabinet adopts the feasibility report by the ministry of Energy, which recommends the construction of a $2 billion worth oil refinery plant, Uganda will be producing 60,000 to 120,000 barrels per day.

A local oil refinery will help set what Dr Fredrick Kisekka Ntale, a research fellow at the Makerere University Institute of Social Research, calls “a precedent against the oil curse.” And Uganda would have put itself in another framework of emerging oil producers. A home refinery, will lead to development of oil supported infrastructure, industries and enterprises leading to the growth of a local economy and entrepreneurs.

However, the appropriation of oil rent, money from oil, whether from home grown industries or from direct sale of crude or processed oil politically affects the country especially when the political echelon resort to authoritarian rule, and/or clientilism-(buying off opponents). Or, turn the country into a welfare state, making life easy for people so that citizens think they are in a comfort zone-‘eating the fruits of oil’– and so, not question the state about oil proceeds.

Dr Kisekka argues that such a situation and the intention to enclave the oil producing areas as a no-go-point should not be an option for the government once oil money starts coming because they cause tension, suspicion and mistrust. If Uganda is to produce 120,000 barrels per day, and going by the current price per barrel (159 litters) of $90, (around Shs200,000) Uganda could get an annual $3b (over Shs6.8 trillion).

But will this money from the sale of the refined oil trickle down to the common man? Mr Kabagambe says, “yes”. “If you build better roads, better social services, and enough electricity and provide jobs then you will be giving value to the people and the economic empowerment will be achieved.”

But as the payments per barrel eventually start to trickle in, Ugandans will want to see a change in the standard of living. Most commentators believe the benefits from an oil flow would be effectively felt if the revenue is allowed to trickle to the last citizen of this country.

Fusion of sectors
This will be important as it creates a ripple effect in form of a stimulus which helps other sectors to fuse into the oil sector and help develop the economy without blocking free speech. Mr Pascal Odoch, a rural development specialist with 15 years of experience working with government and non-government organisations in drafting strategies for rural transformation, sees oil as a light at the end of a tunnel for the Ugandan poor and expects that it will help the country beat the premier Millennium Development Goal of reducing the poverty level to a single digit - if the proceeds are used for infrastructural development.

Oil would replace agriculture as the backbone of the economy, however, it would be suicidal to completely ignore investment in agriculture because of the gains from oil. As a 2007 UNDP country report – Rethinking Agriculture – points out; with oil money, there should be strengthening of the agricultural sector from peasantry and hand hoe farming to commercialised and modern agriculture.

Mr Odoch says if peasants want to join the oil sector, they should, instead of out rightly abandoning the hoe, lease out their land to commercialised farmers. “People should understand they cannot do everything at the same time,” he says. “You cannot get much from using rudimental tools in agriculture, people should go and offer causal labour and let value added farming take its course.” Uganda is lucky that there are many countries in Africa and the world to learn from on how to manage oil.

In the next and last part, the writer will look at how some African countries have managed their oil and the politics therein.

Ministers give away forest
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GIVEN AWAY: Structures have already been erected in the forest reserve. PHOTO BY YUSUF MUZIRANSA

By Chris Obore (email the author)
Posted Sunday, February 6 2011 at 00:00
Namanve Central Forest Reserve will be no more after two senior government ministers and the Uganda Land Commission authorised its clearance without following due process.

This means, according to experts, that the residents of areas surrounding the Namanve Industrial Park should ready themselves to suffer serious environmental hazards especially the pollution after the 3,250 hectare forest which would serve as an absorber of poisonous gases from factories, is destroyed.

According to documents Sunday Monitor has seen, the plan to give away the forest was the handiwork of Water and Environment Minister Maria Mutagamba and Housing State Minister Michael Werikhe.

Their scheme started in October last year when Mr Werikhe wrote to Ms Mutagamba asking for the forest land ostensibly “to relocate the slum dwellers from Kisenyi, Mulago, Katanga, Kivulu and other areas in Kampala.”

Genuine request?
“The Slum Dwellers International have always asked for land so as to initiate the low income housing project in Uganda to cover slum dwellers among others,” reads Mr Werikhe’s letter.

Ms Mutagamba wrote back: “In light of government need for land near the City for the above cause [resettling slum dwellers], I propose that the unutilised land in compartments...be set aside for this purpose and other developers that the Uganda Land Commission responsible for managing this land, may deem fit.”

The minister added that she was conceding to the give-away because a number of industries had been set up in the area. Ms Mutagamba also conceded because “… over time both the UIA [Uganda Investment Authority], Kira Town Council and other people have been encroaching on the area that had not been excise [cut out].”

Following Ms Mutagamba’s consent, the Uganda Land Commission sent in surveyors to demarcate the forest land into plots. However, National Forest Authority [NFA] officials are angry over the destruction of the forest reserve arguing that the forest was much needed in the area because of the Namanve Industrial Park which they say would pollute the surrounding environment.

And Ms Mutagamba is also aware of this likely situation as she conceded in her letter that: “Already there are reports of effluent discharge by the industries in the Industrial Park direct into Lake Victoria which will just compound the already sorry state of the Murchison Bay…” The NFA officials also argue that if the forest was to be destroyed, the law required that the government finds an alternative land where another forest can be nurtured and before the existing forest is cut down, Parliament must endorse.

The National Forestry and Tree Planting Act, 2003, instructs that “… amendment to an order declaring a central forest reserve shall be approved by Parliament, signified by its resolution.” The rationale of this instruction was that “the government or a local government shall hold in trust for the people and protect forest reserves for ecological, forestry and tourism purposes for the common good of the citizens of Uganda.”

But without due process, Uganda Land Commission has subdivided the land into plots against the objection from NFA. “I wish to add that any decision made should be in conformity with the forestry law whereby the de-gazzettement process should end with approval of parliament,” reads a letter by Prof. Mukadasi Buyinza, the NFA board chairman.

NFA security arrested officials from M/S Wemo Consultant Planners and Surveyors Ltd, for demarcating roads in the forest illegally but ULS Secretary, KSB Mubballa asked police to release them because he had authorised their activities in the forest. Although the forest was cut out for allegedly resettling slum dwellers, our investigation has discovered that the land was being parcelled out to senior government officials and their cronies.

ULS is already processing land tittles for several individuals who are not slum dwellers. When Sunday Monitor visited the area, several new construction sites were active in the forest reserve. Some of the trees being cut were for private tree farmers who had got licences from NFA. This new development could lead to litigation against NFA.

But ULS chairman Joash Mayanja Nkangi on Friday said he was ignorant about the land surveying. When showed letters originating from his office, Mr Nkangi said: “I don’t know anything about this. Ask Mubbala who wrote them.”

Mr Mubballa was not in his office when Sunday Monitor visited. He picked our calls but said he was driving; he never answered our calls again. By press time yesterday, his phone was switched off. Public land give-away has in the past 10 years become a hallmark of the government amid bitterness from the citizens.

But on March 15, 2007 while laying the foundation stone for the Royal Palms Estate project which was also controversially built on Butabika Hospital land, President Yoweri Museveni said: “I have heard some agents of backwardness saying we should not give away land to investors. But I have given you my word. You should not get worried about what such people are saying.”

“We have given you the land, ignore those who are talking, go ahead and build, nobody will bother you because we shall handle them.” When Sunday Monitor tried reaching out to Ms Mutagamba through the phone numbers provided on the parliamentary website, the mobile phone service providers alerted that the phone numbers do not exist.

Govt allocates sh377m to build Tororo roads
Sunday, 6th February, 2011
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By Vision Reporter

THE Government has allocated sh377m for the re-construction of 22.8km roads in Kwapa sub-county in Tororo district.

The district engineer, Robert Okello, explained that the regravelling of the impassable roads was funded under the Peace, Recovery and Development Programme (PRDP).

He said work will be completed by the end of March and appealed to the local communities to support the contractors to expeditiously handle the work.

Okello said this during the launch of the construction exercise at Kwapa sub-county headquarters on Friday.

He said Hands Uganda Limited will work on the 9.1-kilometer Tororo-Kwapa-SaloSalo road at a cost of sh186m and Fiona International will work on the 13.7-kilometer Asinge-Morukebu-Kalait road at sh189m.

The Tororo resident district commissioner Damulira Kyeyune, appealed to the communities to support the NRM government so as to bring development to their area.

Damulira said Kwapa has benefited a lot in terms of road s, education, health and rural electrification programme.

Kampala-Lira route to get more buses
Sunday, 6th February, 2011
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By Samuel Balagadde
THE Transport Licencing Board has urged bus operators on the Kampala-Lira route to welcome new operators and embrace healthy competition.

This was during a special meeting between the new applicants and the old operators at the former Public Works training centre in Kyambogo last week.
The new applicants include Gaaga and Dokoro Coaches.

Timothy Baguma, the Transport Licensing Board chairperson, said whoever meets the minimum requirements was free to apply for any route in the country.

He, however, added that the new applicants were obliged to notify the existing operators to avoid conflicts that may arise, especially with the time schedule.

Several bus companies, including Otada, White Coaches, Atinpacho, Achanadiru, Balcon, Danmaboro and Fleno Coaches ply the Lira-Kampala route.

James Nyakundi, the managing director of Gaaga Coaches, said there was a big gap for more buses on the route.
“The existing operators on the Lira route should accept competition and all its benefits,” he said.

Ronald Amanyire, an inspector of motor vehicles with the works ministry, said the new applicants must have their busses inspected to prove their road worthiness.

Lawrence Niwabiine, the Kampala Extra regional traffic Police commander, said wrangles between bus operators should stop to pave way for competition.

James Ochaya, a representative of bus operators on the board, said consulting existing bus operators on given routes before granting permission to fresh applicants was aimed to promoting fairness.

There are over 800 buses plying different routes in the country, according to the Transport Licencing Board.

Sh2b for infrastructure
Monday, 7th February, 2011
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By Daniel Edyegu

THE UPDF has set aside sh2b to repair social infrastructure and equip health units in appreciation of Teso’s resilience in the face of past rebellions, the chief of defense forces, Gen. Aronda Nyakairima, has revealed.

He said in the 1980’s local residents helped the army in ending the war against the Uganda People’s Army (UPA) rebellion and Joseph Kony’s Lords Resistance Army incursions in 2003.

“We have had problems in Teso. First, the Karimojong, then the UPA and Kony. For triumphing over Kony, we dedicate this achievement to the people of Teso,” Aronda said on Sunday during activities to mark the Tarehe Sita celebrations.

He handed over an assortment of medical supplies donated by the army to various health units in the region. Brig. Samuel Lwanga, the UPDF deputy chief of medical services, said the donation was meant to ease the shortage of medical supplies in the government health units.

Roofings gets $25m for Namanve
Tuesday, 8th February, 2011
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Lalani (left) and Prosper exchange documents as Bbumba looks on
By David Mugabe

THE International Finance Cooperation (IFC) has extended a $25m loan to Roofings Rolling Mills as the firm pushes to complete its three-phase project at the Namanve Industrial Park.

The loan is repayable in eight years at a much lower interest rate compared to the prevailing market rate, Sikander Lalani, the Roofings chief, said.

This is the second major funding extended to Roofings in less than two months.

In December, the steel giant signed a $64m syndicated loan with six financial institutions to finance its hot and cold rolling mill plant at the park.

Upon completion, the firm expects exports to rise to $70m, bringing the group’s total exports to $130m per annum.

IFC is the private sector lending arm of the World Bank.

It finances private sector investment, mobilises capital in the international financial markets, and provides advisory services to businesses and governments. Phillipe Prosper, the IFC director, refuted reports that for the private sector to access their funding, the Government should serve as a guarantee or provide recommendation.

“Being private sector, we do not work with the Government. We fund exclusively private sector,” said Prosper. He said for the private sector to access funding, the projects must be sustainable businesses and financially viable and should “not have any negative impact.”

The finance minister, Syda Bbumba, who witnessed the loan signing, asked IFC to look more to financing partnerships in agro-processing and infrastructure.

“I want to encourage the IFC to participate in more projects, especially where we have a niche (agro-processing). Our biggest problem is perishability,” said Bbumba.

Lalani said the IFC support is an important endorsement of “our future strategic development.”

While the Government has attempted to fix the brokendown infrastructure, the country is awaiting the passing of the public private partnership law that will support new investments in infrastructure.

Uganda’s raw sugar output increases
Tuesday, 8th February, 2011
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UGANDA'S 2011 raw sugar output is forecast to expand by 20%, lifted by a capacity upgrade at one of the major producers, as well as favourable weather, a senior industry official said on Tuesday.

Richard Orr, the chairman of Uganda Sugar Cane Technologists Association (USCTA), said east Africa’s third-largest economy is expected to produce 350,000 tonnes of raw sugar, up from 292,051 tonnes last year.

Last year’s output was 8.2% below the projected 318,000 tonnes, mainly undermined by technical glitches at Kakira Sugar Works, the country’s biggest producer.

The country consumed 325,000 tonnes of sugar in 2009 and USCTA says consumption could jump to 700,000 tonnes by 2030. Uganda imports refined sugar for industrial use but in small quantities. Uganda’s second-largest producer, Kinyara, which also expects to hold an initial public offer (IPO) this year, has expanded its capacity and expects output to rise to 126,000 tonnes from 90,000 tonnes last year, Orr said.

“Kinyara had a major overhaul of their plant late last year and they have significantly scaled up their processing capacity,” he said. Uganda’s government will be selling its 49% stake in Kinyara during the IPO.

Rai Group, an agribusiness company with operations in Kenya and Mauritius, is the company’s majority shareholder. Orr said forecast weather conditions would not harm sugar output this year.

“Sugar needs a delicate balance between rains and dry conditions, and while we might not get the best mix of both, we don’t foresee extremes that might immensely lower sugar content or cane supply,” he said.

Madhvani Group, which owns Kakira sugar factory -- the country’s biggest -- is planning to invest $100m in a second sugar production plant and cane estate in northern Uganda.


Dar port woos local importers
Tuesday, 8th February, 2011
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By Paul Busharizi in Dar es Salaam

UGANDA and Tanzania are in talks on a $2.7b joint investment to develop infrastructure on the Dar es Salaam port.

The Tanzanian transport minister, Omari Nundu, said the development would cover the Indian Ocean port of Tanga, building the Tanga-Arusha-Musoma railway, and the rehabilitation of the Musoma-Mwamba road.

Port Bell pier, a new Kampala port, and the rehabilitation of ferries, are part of the talks.

“It is our intention to dedicate the route to Uganda,” Nundu told a conference attended by Ugandan businessmen in the Tanzanian capital last week.

He said the move would push up Uganda’s use of Dar as an alternative to Mombasa.

Figures show that Dar es Salaam only accounts for 1% of all trade from Uganda, with 99% going through Mombasa.

Ugandan businessmen noted that Dar and Kampala would have to make some concessions to promote the route.

“For a start, you need to talk to Kampala not to charge tax freight when we use the Central Corridor. This will be a good incentive,” Busingye Rwabogo, the Mukwano Industries operations general manager, said.

He argued that the cost of the additional 600km on the route compared to the Mombasa would be difficult to transfer to the customer.

Other suggestions were for service points along the road, revamping of the railway line to Mwanza and improvement of security on the route.

During a separate tour of the port of Dar es Salaam, the businessmen were shown new investments and restructuring that has brought down cargo time at the port from 25 days to a 11 with efforts to half that time.

Mpanga project boosts electricity supply
Tuesday, 8th February, 2011
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By Vision Reporter

THE days of loadshedding are increasingly getting numbered, following the addition of 18MW to the national grid by Mpanga Hydropower Project.

The technical commissioning will be conducted on Thursday, while President Yoweri Museveni is expected to officially launch the project in March, top officials said.

The $26m project, whose construction started in 2008, is owned by Africa EMS Mpanga, a subsidiary of South Asia Energy Management Systems Inc based in California, the US.

“It will be some of the cheapest power available in Uganda’s national grid,’ Charles Mugisha, the project coordinator, said.

He pointed out that the project had the fastest completion time from licensing to commissioning.

“It is also the best cost ratio hydropower project in Uganda, but implemented in a most challenging terrain inside a deep gorge,” Mugisha said.

He was, however, upbeat that the project had exposed more than 200 youth, who participated in the construction works, to lots of technological transfer.

“I am happy to note that the technology transfer arising from this project will be very useful for future similar projects. And because of it, lots of areas have been opened up for rural electrification,” he added.

“The project will provide ample green energy adequate to power over 20,000 households in western Ugandan, in addition to providing lighting for hospitals, schools, churches and community centres,” Mugisha explained.

The construction was undertaken by VSHydro (Pvt) Ltd; a Sri Lankan-based hydropower construction company.

It harnesses the hydro potential of River Mpanga as it drops down over the Great Western Rift Valley onto Lake George in Fort Portal, western Uganda.

Mugisha said his company would set up similar projects in Kasese and Kapchorwa.

Institution set to teach Chinese
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By Stephen Otage & Melody Kukundakwe (email the author)
Posted Wednesday, February 9 2011 at 00:00
Kampala

The government of China has accepted to fund the construction of modern teaching facilities in Luyanzi College in Bweyogerere, a Kampala suburb in order to facilitate the teaching of Chinese. Formerly Progressive Senior Secondary School, one of the first and oldest private secondary schools in the country, now Luyanzi College, will be one of the first secondary school in the continent to teach Chinese language and its culture.

Business Centre
The school will house a Chinese information and cultural centre which will be open to the business community and public for information about one of the fastest growing economies in the world.

The annoucement was made by the Chairman Luyanzi Academic Foundation, also Chairman of the Uganda China friendship Association, Eng. Somma Ayub, during a feasibility tour by a delegation from the China Africa Project of Hope led by the Chinese ambassador to Uganda, Sun Heping, on Monday.

“We are going to be the first people to teach Chinese language and culture in a secondary school in Uganda and Africa. We have acquired 400 acres of land in Luyanzi hill in Lugazi where we are going to build a Chinese school of excellence beginning with a kindergarten, primary and secondary school, a training hospital and polytechnic,” he said.

Increase funds
Ambassador Sun also pledged support to the Ugandan government in promoting universal primary and secondary school education, adding that his government would sustain such initiatives through the Chinese international development NGOs which have up to $50 million for such projects. “The mission of this delegation is to meet the needs of the African countries. We are ready to support African education. But here, we are going to start with sponsoring a well equipped computer laboratory and library.”

According to Mr Ayub, China is currently the leading global business destination and the learning of its language and culture has become paramount. Chinese is the latest foreign language to be introduced in Ugandan school syllabi after those of the colonial masters.

18MW hydro power plant commissioned
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By Walter Wafula (email the author)
Posted Wednesday, February 9 2011 at 00:00
Kampala

Uganda’s electricity woos are set to ease with the commissioning of a new power plant in the western part of the country. Mr Cletus Sserwanga, the project coordinator, VS Hydro Limited, said construction of the Mpanga Hydro Project is complete and a technical commissioning ceremony will take place on February 10,2011.

President Museveni is expected to officially switch on the 18 Mega Watt (MW) mini hydroelectric power project located across River Mpanga in Kamwenge District in March. The plant will generate at least 20 per cent of the 88MW of power that Uganda will receive from independent power producers in 2011.

The project was developed by Africa Energy Management Systems costing it about Shs60 billion, according to Mr Sserwanga. “Without compromising quality and project specifications, the Mpanga project was constructed at the lowest cost ever per megawatt for a hydropower project in Uganda,” he said.

The 250MW Bujagali Hydro Power project is also scheduled to start generating 50MW of power in October. However, production will be preceded by the launch of other mini hydro power projects including; Ishasha (6MW), Buseruka (9MW) and Nyagak (5MW) in several parts of the country.

Impact on power cost
Mr Simon D’ujang, the state minister of energy, recently projected that the launch of projects like Bujagli will bring down the cost of power by almost one third. A reduction would cut back the operational costs of many businesses and increase their profitability and productivity on investments.

The power projects are expected to increase Uganda’s total installed electricity capacity from 595MW as of last year, to 875MW by 2012. In a related development, the Electricity Regulatory Authority which oversees activities in the power sector has come up with a consultative paper on electricity disputes resolution.

Skills development will boost competitiveness - envoy
Wednesday, 9th February, 2011
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By David Ssempijja

SKILLS development, especially among the small-and-medium enterprises, will deepen Uganda’s product market penetration, Anders Johnson, the Swedish ambassador to Uganda, has said.

This, he said, would give the country a competitive advantage in regional and global markets.

“We want to boost the country’s economic development by supporting business-related research because it is one of the key components in skills enhancement to make businesses competitive,” he said.

He was speaking at the third annual global conference of the Pan African Competitiveness Forum under the theme “Innovative cluster initiatives as tools for African development” at the Imperial Resort Beach Entebbe.

Johnson said the Swedish government offers between about SEK50m to Uganda annually, with at least 45% of the funds directed towards supporting the development of skills through scientific research in tertiary institutions.

In the last four years, for example, Makerere University received $26m financial support from the Swedish International Development Agency to help in research. The research findings were passed on to communities, hence the formation of business clusters.

These include Katwe metal fabrication, Lake Katwe salt, Kakira bio-fuels, Lira Bee Farmers, Jinja maize millers, fruit and vegetable processing in Luweero and Leather processing in Jinja.

Uganda positions itself to prevent oil curse
Wednesday, 9th February, 2011
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Workers undertake the first flaring test at the Waraga 1 oil well in Kaiso-Tonya in Hoima
By Ibrahim Kasita

UGANDA is designing robust ownership structures and people-led laws and institutions to manage the nascent petroleum industry before production starts, to avoid the so-called ‘oil curse.’

The resource curse, meaning less economic growth and more impoverished local communities despite plenty of minerals or oil, has characterised most mineral-rich African states despite the many oil drillers and investments in these countries.

This has left most African oil-producing countries in abject poverty, environmental degradation, insecurity and misery amidst plenty of petro-dollars.

But, in a move aimed at avoiding this scenario, Uganda is encouraging national participation to ensure transparency and accountability in accordance with the National Oil and Gas policy of 2008.

“We need to build human capacity and create institutions that can manage the resources right from the beginning,” President Yoweri Museveni said during the just-concluded East African Petroleum conference and exhibition in Kampala.

“We even had to suspend licensing of oil companies until core staff in petroleum geo-sciences was trained and the necessary institutions created.”

Reuben Kashambuzi, the former commissioner in the petroleum and exploration department, said the Government had invested and continues to invest in capacity building with support of development partners.

“We have the power to do it right. "We must make the right choices. We need to have the right polices and a good legal and regulatory framework,” he said in his new book, “A Matter of Faith: Uganda’s Oil Story.”

“We need to have strong institutions and fill them with qualified and committed people. We need to recruit strictly on merit.”

Kashambuzi, who is one of the first Ugandan scientists to train in petroleum science abroad, pointed out that poor revenue sharing and environment protection regimes have caused instabilities in very many mineral-rich nations.

“We need to ensure that any corrupt tendencies and anything that may impact negatively on the development and management of the oil industry in the country are nipped in the bud. Any errant officer must be punished severely,” he advised.

“I know it is not as easy as it sounds, but if this country has to manage its oil properly, it cannot afford to lower its guard. We must prepare early and avoid the crisis management approach. You do not manage this complex industry that way.”

Fred Kabagambe-Kaliisa said openness and access to information were fundamental rights in activities that may positively or negatively impact the oil sector.

“Openness and access to information are fundamental rights in activities that could impact on individuals, communities and states.

“It is important that information that will enable stakeholders to assess how their interests are being affected us disclosed,” he said.

Kaliisa explained that the National Oil and Gas policy supports disclosure of payments and revenues from oil and gas using easy-to-understand principles, in line with accepted national and international financial reporting standards.

“Our focus is to put in place strong laws and institutions to manage the oil resources and revenues,” Kaliisa said.

“We need to build a strong foundation for the industry, with good financial laws first, before thinking of the future benefits, which are obvious.”

The Petroleum Resources Management Bill, which is awaiting parliamentary approval, promotes local content, which is the development of local skills, technology transfer, use of local manpower and local products.

The Income Tax Act of 2010, which was passed last year, provides tough punitive actions if an oil operator fail to pay tax or presents false financial information to evade taxes on the income earned.

The laws are realigned with the production sharing agreements.

“My message is simple; faith, hope, hardwork, integrity and patriotism will deliver,” Kashambuzi said.

“I want Ugandans in future to look back and take pride in the fact that because of their determination, they are not among those who squandered the opportunity.”

Although Uganda confirmed oil and gas assets at almost the same time as Ghana, the two countries are taking different approaches to manage the resource. Ghana produced its first oil the end of last year, but without the necessary regulatory framework to guide the development of the sensitive sector.

There are no separate institutions regulating the sector as the Ghana National Petroleum Company (GNPC) acts as a National Oil Company (NOC) as well as the regulator.

There is even no clear mechanism of selling the crude. Experts privy to the deal say Ghana’s crude oil was priced at $69 per barrel, irrespective of the world crude price movement. The country’s oil is flowing amidst legal and transparent gaps.

How small firms can benefit from support organisations
Wednesday, 9th February, 2011
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Bananas being prepared for export: Business support organisations can help connect small and medium organisations to foreign markets
By Michael Kanaabi

UGANDA'S entrepreneurship sector is a tale of two worlds. It is among the most vibrant in the world, according to recent global entrepreneurship surveys, but faces a challenge of keeping businesses afloat.

Although the statistics on small businesses failing are appalling, with 90% of them not surviving to their fifth birthday, Uganda boasts of a number of business support organisations offering services intended to help small-and-medium firms grow and break even.

These organisations include those set up by private business operators and those that are affiliated to the Government.

Key among government agencies offering support services to small businesses are the Uganda Export Promotions Board and the Uganda Investment Authority.

However, the Uganda Investment Authority focuses more on large businesses and foreign investors.

The private organisations include Enterprise Uganda, the Uganda Manufacturers Association, The Uganda National Chamber of commerce and Industry and the Uganda Small Scale Industries Association.

What services do business support organisations offer?
Eriab Kiiza, a consultant with Enterprise Uganda, says they offer services to small and medium enterprises to ensure they operate more efficiently and grow consistently.

The services include entrepreneurship training programmes that range from marketing and selling strategies to financial and business management.

“We also facilitate and structure business linkages, especially linking small and medium enterprises to larger and older organisations that can guide them to do business better,” Kizza says.

He adds that the organisation helps firms install and implement quality control systems, which, with time, improve the products and services offered by the small firms.

The organisation also offers business start-up training to youth planning to set up business through its graduate entrepreneurship programme that is conducted every beginning of year.

The organisation also offers special training for women in business to empower them to run their businesses better.

Daniel Karibwigye, the director of trade promotion at the Uganda Export Promotions Board (UEPB), says they encourage market research, trade initiation and advocacy, and link small-and-medium enterprises to new markets.

“Through this initiative, we have linked a number of local SMEs to regional markets like the DR Congo, Rwanda and Burundi” Karibwigye says.

He adds that they also help SMES to participate in international trade fairs, where they market and create awareness for their products.

Karibwigye says UEPB also carries out training for women involved in small scale trading across border towns, empowering them to fully tap into the opportunities offered by the trade.

The Uganda Investment Authority has a comprehensive guide on the starting and operation of small and medium enterprises in Uganda.

The Small and Medium Enterprises (SME) Business Guide contains information about starting and running an SME in Uganda, ranging from the legal framework, arbitration in case of grievances, funding sources, incentives, relevant contacts and the regulatory frameworka.

The booklet can be obtained from the organisation’s offices or the Internet.

The Uganda Small Scale Industries Association brings together small-scale manufacturers, also known as cottage industries.

It carries out joint promotional activities and marketing initiatives for members’ products.

The organisation, which is affiliated to the Uganda Manufacturers Association, lobbies for member firms.

How can SMEs benefit from business support organisations?
“The first step every serious business owner should take is to join an association in their particular sector. This helps them improve their bargaining power,” says Joel Mutumba, a business consultant.

Mutumba adds that business owners should also take the initiative to find out where the offices of major business support organisations are to know the services they offer.

According to Kiiza, services, especially training, help businesses improve their performance as they streamline their operations to higher and acceptable standards, leading to sustained growth.

“SMEs, especially those already in the export sector and those planning to join, can benefit from these services by letting the business support organisations know what their challenges and interests are, so that tailor-made solutions can be found,” Karibwigye says.

Through the opportunities offered by the organisations, small-and-medium firms can tap into foreign markets.

How are these services being brought nearer to the SMEs?
Trainings is conducted in various districts across the country.

The Uganda Manufactures Association also holds regional trade shows to help market the goods and services produced across the country.

By educating women about the opportunities in cross border trade, UEPB’s Karibwigye believes they are extending their services nearer to small business owners.

What do business support organisations have for the future?
Karibwigye says the agency will continue to search for regional and global markets where local small-and-medium enterprises can sell their products and services.

Kiiza says Enterprise Uganda will continue to create solutions to emerging needs and challenges of small-and-medium businesses.

Kabale introduces greenhouse farming
Wednesday, 9th February, 2011
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A green house in Kabale where vegetables and herbs will be grown
By Ronald Kalyango

SMALLHOLDER farmers in Kabale will start producing vegetables throughout the year, following the introduction of green house farming in the district.

The technology, being promoted by a local company, the Nile Fresh Produce (NFP) in partnership with Israeli and South Korean firms, aims at promoting quality vegetable production for export.

“The Israelites are by far the leading producers of quality vegetables for the European market and the US. We want to bring their technology here,” said the NFP director of operations, Pius Kwesiga.

Kwesiga was addressing beneficiaries during the launch of the technology by the agriculture minister, Hope Mwesigye, last week.

He said the consortium plans to invest about 10 million euros to enable the district develop an agricultural infrastructure that will empower the local farmers.

The investment will also lead to the transfer of technology and skills for local farmers to become self-sustaining.

Kwesiga said the consortium was working closely with the agriculture ministry through National Agricultural Advisory Services (NAADS) programme to promote the technology.

Their plans includes putting up a sorting and grading facility, cold storage and a processing unit, which will handle 1,500 tonnes of vegetables and herbs annually.

The nucleus farm and factory will directly employ 600 people and 40,000 outgrowers will be targeted to supply the facility with vegetables and herbs.

Kwesiga says 90% of the vegetables consumed in Uganda are bought from Kenya.

“Ugandan farmers do not have the capacity to pick, clean and package vegetables in a manner to enable them access markets from hotels and supermarkets,” he says.

Addressing farmers, Mwesigye assured the investors that the Kabale district local government would allocate them 100 acres to set up the factory.

“I will ensure that the district council sits and deliberates on the matter of land allocation to the investors,” she said.

Mwesigye said if the project is successful in Kabale, it will be rolled out to Kanungu, Rukungiri and Kisoro districts.

Kwesiga noted that they had developed a five-year development plan, which aims at transforming subsistence vegetable farming into a commercial business in the country.

He said in Israel, farmers earn about 125,000 euros annually from vegetables, but added that 50% of the income is spent on labour costs.

Kwesiga, however, said in Uganda, labour is cheap and the soils are fertile.

“The partners in Israel are eager to come and work with us. Uganda has a good climate, which will allow vegetable production throughout the year,” he said.

Kwesiga said the district will focus on the production of egg plants, tomatoes, garlic, chives and mint.

“We shall also encourage farmers to engage in the cultivation of cabbages, carrots and cucumber for the local market,” he said.

Why greenhouse technology
Kwesiga said greenhouse gardening had become one of the fastest growing way of growing vegetables because of its ability to lengthen and extend the growing cycle of vegetables.

“When farmers own greenhouses, they will no longer be held hostage by the ongoing climatic changes. The seasons will no longer dictate when farmers will begin and end vegetable cultivation,” Kwesiga said.

He said AdaFresh, the Israel company that will work with Kabale, exports fresh agricultural produce from Israel, meeting the urgent need for a dynamic and mutually supportive link between quality Israeli growers and the continuously changing global markets.

“We have agreed to use their platform to export vegetables and herbs from Uganda to the already existing market,” Kwesiga said.

The company works with the finest growers, who uphold standards, and involves them in development decisions.

“As part of its commitment to developing agriculture and offering new produce to global markets, AdaFresh will work closely with Ugandan farmers in promoting quality vegetable cultivation,” Kwesiga says.

By supporting this vital aspect of agriculture, the company will assist farmers in reaching new markets for potential produce, while helping buyers obtain new varieties. AdaFresh considers this to be an important aspect of its activities, he said.

“This will ensure that there is value-addition to vegetables and herbs produced in Uganda and availability of the required vegetables,” he says.

Location of the factory.
Once the 100 acres of land have been identified, the consortium will start construction of the greenhouses within three months.

In the first 18 months, they will train 3,000 farmers, expose them to the technology, after which, they will give them seeds and fertilisers as a loan facility.

Investment authority turns to farmers
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By Faridah Kulabako (email the author)
Posted Wednesday, February 9 2011 at 00:00
Kampala

The Uganda Investment Authority is planning to invest in developing farmers’ entrepreneurship in order to boost agricultural productivity and to meet the growing demand for food and industrial raw materials.

Speaking during the release of the 2010 investment report in Kampala on Monday, Dr Maggie Kigozi said on Monday that demand for agricultural products as raw materials for industries and food for human consumption has exceeded supply due to low productivity, necessitating action.

UIA in collaboration with other organisations such as Private Sector Foundation Uganda and Enterprise Uganda will conduct entrepreneurial training programmes to equip farmers with information regarding access to finance, formulating business plans and proper book keeping to enhance productivity.

Global food prices have been rising lately due to increased industrial consumption, rapid population growth and changing weather patterns that have reduced agriculture productivity. Food shortages and rising food prices have generated unrest in countries like Tunisia and Algeria. Dr Kigozi said: “Our challenge is creating farmer entrepreneurs. Farmers also have to be trained like businessmen because farming is an important activity and a business.”

In January, the investment body licensed 29 projects in January with an estimated planned investment of $122 million and employment of about 2,590 jobs.

Foreign projects accounted for 72 per cent of the licensed projects, 21 per cent were local while 7 per cent were jointly owned. Out of the $122 million in licensed projects for the month, $57 million were in agriculture, $33 million in the financial sector while $17 million were in manufacturing. Dr Kigozi attributed the positive trend in manufacturing and agriculture to attractive regional markets of Southern Sudan, Kenya and Rwanda.

Dubai eyes opportunities in Uganda
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By Walter Wafula (email the author)
Posted Thursday, February 10 2011 at 00:00
Kampala

Uganda is one of the 19 countries that will benefit from an investment drive aimed at injecting foreign direct investment in the Eastern and Southern Africa region. The gains will be attained from 4th Common Market for Eastern and Southern Africa Investment Forum aimed at discussing new investment and business opportunities within the region.

Comesa is Africa’s largest economic block, with a population of over 430 million, and a combined Gross Domestic Product (GDP) of over $447 billion. The region’s income is about 28 times the size of Uganda’s annual revenue from goods and services sold.

The Investment Forum will be hosted between the March 23 and 24 this year in Dubai. “This two - day high-level forum aims to generate a large array of new business opportunities,” a statement from the organizers reads in part.

The conference is an initiative of the Comesa Regional Investment Agency in partnership with the Dubai Chamber of Commerce. Dubai, which is the centre of global business in the Middle East, is expected to host over 500 international companies and business representatives at the forum.

Dubai, recognizing the Common Market for Eastern and Southern Africa (Comesa) as a unique market, is paving the way to drive investment from all over the world to the region. Other Comesa member states include: Burundi, Comoros, D.R. Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Swaziland, Zambia and Zimbabwe. The lucrative business city is also positioning itself as a fundamental hub for trade into Uganda and the rest of Africa.

Centum trades shares at USE
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Mr Muguiyi (C), flanked by Mr Mworia (L) and Mr Kitamirike, rings the bell to signal the start of Centum’s trading at the USE in Kampala yesterday.

By Walter Wafula (email the author)
Posted Friday, February 11 2011 at 00:00
Centum, East Africa’s largest listed investment company, became the seventh firm to sell shares on the Uganda Securities Exchange yesterday.

The Kenya-based firm cross-listed 605 million shares on the domestic bourse from the Nairobi Stock Exchange, making it the 14th company to be traded at the exchange.

To promote frequent trading of its shares, Centum offered Ugandan investors four million for purchase at market prices. The offer marked a major shift in cross listings at the bourse.

They are usually marked by mere transfer of shares from Nairobi to Kampala with limited liquidity at their counters thereafter.

The company’s share price opened at Shs665 and oscillated to Shs670. But the price closed at Shs668 based on the weighted average calculated by the USE.
About 836,500 shares had been traded by close of the day’s trading session.
The cross-listing gives domestic investors a new option of investment lines in which they can either save or where they can earn money from.

Centum’s line of investments includes; private equity, listed private equity, real estate and infrastructure.

The company holds significant ownership in firms like; Mount Kenya and Nairobi Bottlers, UAP Holdings, General Motors East Africa, and Longhorn Publishers.
“By investing in one share of Centum, you don’t have to invest in many sectors because Centum invests in a diversified area of ventures,” said the firm’s chief executive, Mr James Mworia at a news conference in Kampala yesterday.
He added that the firm had already invested Shs35 billion in a real estate project in Uganda as part of its regional expansion drive.

The company’s portfolio is currently valued at over Shs322 billion and consists broadly of investments in private equity.

About 60 per cent of the company’s business is equity investments with notable investments in the financial and beverage sectors.

At the conference, Mr James Muguiyi, the chairman board of directors, Centum Investment, said the cross listing is meant to offer more investors across East Africa an opportunity to access a diversified portfolio of highly profitable investments.

The company plans to cross list its shares on the Rwanda and Dar es Salaam Stock Exchanges next year according to Mr Mworia.

Mr Joseph Kitamirike, the chief executive officer of the USE applauded Centum’s move to offer shares for trading in Uganda.

As a result he said: “We shall be proposing changes in the rules governing cross listing on the USE to provide incentives to those companies that choose to deliver shares here in Uganda shillings.”

“USE expects that these rules will be approved by June this year,” he added.

Brand-building driving competition in beer sector

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Ms Muyobo addresses journalists during the launch in Kampala yesterday.

By Faridah Kulabako (email the author)
Posted Friday, February 11 2011 at 00:00
The increasing competition for market share in the local brewing industry has forced players to repackage their brands in a bid to appeal to a wider market.
Uganda Breweries Limited, an affiliate of the East African Breweries yesterday launched a new look of its Bell Lager brand in a long neck bottle, a move it says reinforces the premium quality that the brand has been associated with.

Speaking to journalists, Ms Marion Adengo Muyobo, EABL head of marketing said UBL found it inevitable to refurbish the packaging to match the ever changing consumer preferences, lifestyles and trends.

Last year, EABL launched a similar long neck bottle for its Pilsner Lager brand.
Nile Breweries was the first brewer to repackage its brands in the long-neck bottle.
Nile Breweries, a subsidiary of South African Breweries (SABMiller) dragged UBL to court in 2009 for allegedly using the long neck bottle, which it claimed to have legally protected by registering it as its trade mark.

The Court issued a temporary injunction, restraining UBL from selling its products in the bottle on December 17.

However, when UBL on December 22, applied for the interim order to be set aside, the High Court lifted the injunction on December 22.

Nile Breweries (NBL), according to a survey by Kestrel Capital, a Kenyan investment bank which polled beer consumers in the East African region in May 2010, dominates the Ugandan market with a 55 per cent market share with UBL coming second.

EABL, however, is the market leader in Kenya with over 70 per cent market share.
EABL also acquired a 51 per cent stake in Tanzania’s largest brewing company - Serengeti Breweries in October last year at an approximated cost of $60.4 million, a move that is expected to boost its competitive edge in the East African region.

Uganda’s alcohol consumption per capita is 6 litres, meaning that the market has momentum for volume growth in beer.

Ms Mayobo, however, identified poor road infrastructure and higher operating costs due to rising fuel and raw material prices as challenges facing the industry.

Sh3b city cleaning drive launched
Thursday, 10th February, 2011
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Naluwayiro (2nd-left), Mugisa (2nd-right) and road workers sweeping a road in Kampala
By Herbert Ssempogo

A sh3.2b project has been launched by the works ministry to rid city roads of dust and mud.Mugisa Obyero, the ministry chief engineer, and David Naluwayiro, the town clerk, yesterday flagged off the 15-month exercise that officially begins today.

Nusonic Limited, Nippon Parts Limited and Level 5 Associates, which have already beautified several junctions in the city, will handle the work.

Level 5 Associates, which recently purchased a sh120m road-cleaning truck, will clean roads in Nakasero and the Industrial Area,

Nusonic will concentrate on the Central Business District (CBD), while Nippon Parts will be in charge of Kololo.

They will scoop mud, sweep, trim lawns, pick litter and plant grass in some areas, according to the guidelines by the works ministry.

They will harmonise their activities with other groups involved in cleaning and collecting garbage in Kampala.

In the CBD, roads and streets will be swept six times a week. Some will be washed, while roads in Nakasero, Industrial Area and Kololo will be cleaned thrice a week.

A consultant, who is yet to be appointed, will monitor the work, Obyero announced at the ministry boardroom in Kampala, adding that the ministry would supervise the activities.

In a meeting attended by representatives of the three companies, Naluwayiro advised that Kampala’s traffic flow should be studied and a workplan drafted accordingly.

“The roads should be cleaned at night. The teams assigned on each lot should pick litter throughout the day and the public should be sensitised about the advantages of a clean city,” he said.

According Naluwayiro, upgrading the 760km of murram roads in Kampala to tarmac would reduce dust and mud in the city.

Enforcement of laws against littering, he stressed, had been relaxed owing to the ongoing political campaigns, but he vowed to strictly enforce the regulations after the general elections.

Obyero also announced that three companies have been awarded contracts to patch potholes and repair walkways in Kampala.

Weed clearing project re-energises Mpigi fishing village
Thursday, 10th February, 2011
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Buvumbo residents clearing the water weed at the now active landing site
By Gladys Kalibbala

FOR years, fishermen at Buvumbo landing site in Mpigi district were engaged in petty businesses because the area lwas narrow and shallow.

Rajab Mukiibi, the landing sites LC1 chairman, said the area had only four canoes, while the landing site was about one metre wide.

“The shallow waters could not allow engine boats to dock, and only a few businessmen dared to set up shops here,” Mukiibi explained.

Not any more.

Mukiibi said the situation has changed with the intervention of Uganda/Egypt Aquatic Weed Control project in June last year.

This has increased the number of boats at the landing site, including engine-powered ones, to over 20, up from four.

The area also boasts of about 300 fishermen.

The landing site was cleared by the weed project to 20 metres wide, while the lake depth was enhanced by making it accessible to the engine boats. The water weed is being cleared at Buvumbo and Buyiga landing sites.

During the inspection of the work recently, Wilson Waiswa, a commissioner in the fisheries ministry, explained that the objective of the project was to promote the fishing industry.

The $37,000 (about sh86m) project, is expected to be completed in April.

Fred Mukisa, the fisheries minister, asked the project co-ordinators to promote fish farming among residents to improve the fishing industry.

Kafumbe Mukasa Road repairs start
Thursday, 10th February, 2011
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By Samuel Balagadde

RECONSTRUCTION of Kafumbe Mukasa and Kisenyi I roads, in the city centre, has started.The sh6.4b project, which was commissioned on Wednesday by the city engineer, Stephen Kinyera, is expected to take three months to complete.

Kinyera said 90% of the city roads were in a sorry state, but the City Hall had no money.

He said KCC needed about sh1 trillion to reconstruct and upgrade the city road network of 1,100km to tarmac.

However, Eng. Mugisha Obyero, the acting chief engineer at the works ministry, said all city roads were taken over by the central government as the city authority had failed to manage them.

While touring the area last year, the President was shocked at the sorry state of the road, and ordered the works ministry to reconstruct it, saying it was hurting small-and-medium businesses.

Stirling will reconstruct the road at sh5b, while Dotts will work on the sewer line in the area at sh1.4b.

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Supermarket Fever Hits Peak

BY Edrinnah Ddumba and Moses Ssemakula
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• As foreign Superstores scramble for market in Uganda, competition soars
In Uganda, the wars for market share have taken mainstream supermarkets to another level as foreign ones scramble for survival for the fittest.
With Kenya being the most affluent market in East Africa, its retail sector is more developed, but nearly hitting the slow lane hence the big players are looking beyond borders exporting their wars to neighbouring countries.
Already operating in Rwanda and Uganda, Nakumatt Holdings has been on an East Africa expansion plan to open three branches in Uganda, two in Rwanda and four in Tanzania.

Uchumi Stores

Uchumi Supermarkets has operated in Kampala since 2002 at the Garden City mall popular with residents of the metropolis. The retail chain's CEO, Jonathan Ciano, says Uchumi Uganda, which operates independently, plans to open another branch in Munyonyo on Ggaba Road area on the outskirts of the city, a more affluent neighbourhood, hoping to tap the country's emerging middle-class population with wealthy wallets.
The recent entry of another Kenya retail chain, Tuskys, in Uganda has intensified the war in that market, which until recently had resigned itself to a calm play between the usual suspects.
Tuskys, which has 23 branches in Kenya, has acquired two supermarkets in Uganda - Half Price and Good Price - giving it four branches from the onset. This easily makes it the biggest Kenyan supermarket in Uganda in terms of branches (not market share). It has remained mum on their investment figures.
In Uganda, Kenyan retailers are seeking to get a share of a market controlled by foreign supermarkets like Game and Shoprite, located in main shopping malls, and small but nimble home-grown outfits like Capital Shoppers, Standard, Quality, Ken Joy.
The location determines the kind of customers a supermarket, or any business for that matter, attracts. Uchumi, Nakumatt, Shoprite, and Game stores are in malls, while the rest are housed in high-traffic buildings with limited parking spaces and not-so-assured security. This attracts the massive lot of bargain-hunters, but turns off the corporate class who prefer foreign stores because of ample parking, security and, for good measure, ambiance.

Nakumatt Holdings
In November 2010, Nakumatt expanded into Kampala by acquiring Payless Supermarket, a Ugandan supermarket chain with three stores in the Kampala suburbs of Bugolobi, Bukoto and Kabalagala, bringing the total number of stores in Uganda to four. The initial investment in the main Nakumatt store was approximately USD3m. The three Payless Supermarket stores cost an estimated USD650,000.
According to Bernard Mutua, Nakumatt country manager Uganda, there is a fast growing market in Uganda that needs goods and services that can progress this growth. He reveals that Nakumatt had to cross boarder to Uganda to also have such benefits of a fast growing economy.
“We appreciate that more than ever, business has become a 24 hour operation, which everyone has to adhere to. This is why we introduced the 24 hour shopping experience in Uganda, because we realised that it had worked very well in Kenya. In so doing, our focus was to demystify the new shopping culture, so that the market can appreciate the concept of 24 hour business because the economy has become so active that business requires more hours of work to be kept at bay,” says Mutua.
Nakumatt has retained more than 80 former payless employees and they are doing infrastructural improvements to bring the premises up to Nakumatt standards.
“Besides the pilot investment at the Oasis mall, we have invested another Shs2.7bn this year alone, and we still plan to invest more in this market after looking at the upcoming structures, in the next 1-2 years. Our target is to set up four or more sizeable outlets within this market so that everyone can get to share in this experience.”

Tuskys
Currently, Tuskys, which has 23 branches in Kenya, has acquired two supermarkets in Uganda Half Price and Good Price giving it four branches from the onset. This indicates that the growing supermarkets in the different locations in Uganda may be bought off to have a matching number.
However, Hassan Abdi Ali the country manager Tuskys Uganda asserts that their main aim in Uganda is to expose the small to medium size entrepreneurs, so that they get an opportunity to compete regionally through exporting local products into the Kenyan market; which is currently considered the largest in the East African region.
“We have operated in this market for the last 30 years, and we understand the challenges faced by the local SME sector, especially the bureaucracy of licensing and duty. Our plan is to ease this process for the Ugandan SMEs who have not had a chance to export some of their products to the Kenyan market by addressing the bureaucratic tendencies among other challenges, so that we encourage a competitive and growth driven sector,” explains Abdi.
“We are not a threat to the local market because we have a different approach, and different target groups. However, we try to position ourselves based on our brand history in every part where we operate so that the market appreciates our service,” adds Abdi.
Tuskys is the largest indigenously owned retail chain in East Africa. It does not sell alcohol and cigarettes, because of its pride in products that promote a healthy and sound mind of a consumer.

GAME Stores
South Africa's third largest distributor of consumer goods and the third largest in food, Massmart fulfilled its African strategy by opening a new USD7.5m Game Store in Kampala, Uganda, making it the ninth country in which it now operates. The opening of the Game Store extended and complemented their African growth strategy. Game's offering of a broad range of general merchandise at discounted prices is very well received in African markets that have traditionally been underserved.
The project has run very smoothly and the Kampala store is set to make history as the fastest developed outlet the 56-store Game chain has established since its inception 34 years ago.
"Considering that landlocked Uganda is further away from Game's head office and operational nerve centre in Durban than any of our other stores in Africa, our specialist store development team, supported by the brand new store team in Kampala, have done a brilliant job in the face of major logistical challenges," noted Lamberti the Game CEO.

Shoprite

The Group first entered Uganda in November 2000 when it opened Shoprite Clock Tower, in Kampala, and now celebrates a decade of successful trading in this country. In July 2004 Shoprite opened a second supermarket in Lugogo Mall. Both stores were officially opened by Whitey Basson, the company’s chief executive and Uganda’s President Yoweri Museveni.

The Group’s investment in technology and infrastructure is substantial with fully-fledged Ugandan supermarkets that are comparable in terms of equipment, layout and ambience to those in South Africa.

According to the general manager, Peet Coetzee, Shoprite Uganda buys 70% of its products directly from 139 local suppliers, which, he stresses, helps stimulate demand and helps develop the local market.

As the company constantly widens the gap between any competitors and the Group, and grows the value of its asset in Africa, the Group will continue to invest in countries to the north.

Conclusion
According to economists, most foreign firms that have operations in Uganda since the last 6-7 years are eagerly looking at the oil wells in Western Uganda on top of the fresh markets in Southern Sudan. They look at Uganda as a standing base for their operations in those mentioned areas as the yields in Southern and Western Uganda hit fever pitch. Business Sense therefore asserts that the reign of foreign supermarkets in Uganda is a warm up for the oil investments in the Albertine Garben.

Akright wins Housing Award
By Our Reporte

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MD Akright Projects

Akright project, the leading private real estate firm has won an award in recognition of its efforts to provide organized environment for houses in Uganda. Dubbed the "Home Grown Real Estate Family Business Evolution Award," it was handed over to the firm's managing director, Anatoli Kamugisha by Prof. Wasswa Balunywa of MUBS. The prize, which recognised firms and individuals who have made tremendous contribution towards providing Ugandans with adequate housing facilities, was handed over during the Family Business Dialogue Conference, at Hotel Africana in Kampala last Saturday.

Speaking during at the ceremony, Balunywa said that in face of high population density in Uganda, there is need for Government to promote development of satellite cities around the country. "If people are encouraged to live communally, the costs of bringing essential services such as water, electricity and roads, will come down. Private real estate developers will henceforth gain the ability to set up more housing estates with affordable housing units for Ugandans," he said. Anatoli Kamugisha, the Akright boss said that the award will in a way boost their determination to provide hundreds of housing units for Ugandans every year. "As we continue proposing living in an organised environment, and provision of affordable homes to Ugandans, Government should lend us a hand in bringing water, electricity and roads to our estates in order to bring down our costs," he said. Akright which was founded 11 years ago has so far developed 10 housing estates in and around Kampala.

Shall we survive the oil curse?

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(email the author)
Posted Sunday, February 13 2011 at 00:00
IN SUMMARY

In this second and final part on oil, Isaac Imaka examines how big world oil consumers and old oil producing neighbours start creating a courtship of convenience when small, poor African countries discover oil in large quantities:-

In 2002, during a meeting with African heads of state, US President George Bush tapped his pencil and looked bored as most of the African Presidents talked. But when Fradique de Menezes of the Democratic Republic of São Tomé and Príncipe spoke, President Bush perked up and the pencil tapping ceased.

President de Menezes had come from a small, poor cocoa producing West African Island country that had just discovered over four billion barrels of oil. Bush’s attention had been drawn to the country only significant to stamp collectors because, as President Menezes said in his speech, São Tomé “is strategically situated on the most important petroleum area in the world,” and had been quoted by Vice President Cheney’s National Policy Report as the fastest growing source of oil and gas for the American Market.

Weeks later, Jon Lee Anderson of The New Yorker wrote an article; OUR NEW BEST FRIEND; who needs Saudi Arabia when you’ve got São Tomé? ; Where he quoted a State Department official telling him that US does not need to rely on the Middle East for oil. That African oil is less sticky than the stuff you get in the Middle East, and much of it is in deep water far offshore, so the natives don’t notice it being taken, whereas in the Middle East it’s pumped out of the ground under the noses of Wahhabi fundamentalists.

This is an example of how big world oil consumers and old oil producing neighbours start creating a courtship of convenience when small, poor African countries discover oil in large quantities. Nicholas Shaxson says in Poisoned Wells: The Dirty Politics of Africa’s Oil that the fireworks over the oil bounty in São Tomé will start if Nigeria and the US cease meddling in the country’s affairs and when the country’s politicians agree on how to share the oil cash among themselves.

Although there has not been any direct, noticeable involvement by the United States and other super oil consumers in Uganda’s budding oil industry, South Africa’s President Jacob Zuma early last year visited with a contingent of businessmen to scout for investment opportunities in the country’s oil sector.

President Museveni is reported to have invited Iran investors to construct an oil refinery in western Uganda but when President Mahmoud Ahmadinejad made a surprise visit, Museveni said there was no oil deal struck. Such external influence, especially if out of excitement, as well as the insatiable thirst for petrodollars by the local wielders of power, has led to daunting ripple effects that have negatively affected the lives of the natives in many African countries especially in the West.

Petro dollars
When a country entirely depends on oil exports other than its citizen’s economic productivity, as many African oil producing countries have done, John Ghazvinian writes in Untapped, the scramble for Africa’s oil that it turns into an allocation state, a sort of sugar daddy country taken as source of free money rather than a publicly accountable body.
Government feels it has no moral authority to account to the people because it does not take their money in taxes like what happened in Equatorial Guinea, Nigeria and Gabon.

Politicians become Draculas, the gods of wrath on a blood (oil) sucking splurge drinking their countries dry. They no longer feel the need to tax their citizens to raise revenue and so become unresponsive to complaints about their performance.

As an upcoming oil producer, Uganda needs to avoid any temptations of becoming a rentier state-one that only depends on oil. Money from oil should be used to fuel the old money making sectors so as to get double barrelled development and avoid the oil curse.

Uganda needs an institutionalised and transparent oil industry because without it, politicians personalise the oil proceeds, bank billions in offshore banks and use the rest to live a lavish life. In Gabon President Omar Bongo, out of excitement, spent $800m of the oil money to build 52 posh houses and a fleet of Rolls-Royce limousines and armoured Cadillacs for Africa heads of state attending a summit and on several paper tiger projects.

In Equatorial Guinea, where a majority of the people still struggle to survive on $1 a day, President Teodero Nguema Obiang, a canny political survivalist, can afford to own a $2m mansion with 10 bathrooms in Potomac, a Washington suburb.

Obiang, who calls himself El Jefe- The boss-is said to have put all the country’s money on his personal account and to have stashed over $700m in offshore banks. Yet despite the country having the highest per capita income in Africa, the majority of the people are underfed, uneducated, and disease-ridden living squalid lives.

Most African leaders have clung to power, by harassing and buying off challengers, claiming to be the only visionary leaders who saved the countries’ economies even without oil, yet it is all about oil. When they feel insecure, they fill government with relatives like President Obiang who once appointed 21 close relatives to a cabinet of 50 ministers, his son taking the important Ministry of Forestry.

When oil was discovered in Nigeria in 1956, almost everyone in the country thought that a final change in life had come.
When oil money started trickling in, veteran Financial Times, and The Economist writer Nicholas Shaxson says in Poisoned Wells that the situation started going south with oil producing areas saying they should get the most populous regions, arguing that they should take precedence, while the poorest felt that they were the most deserving. Such belief made tribes/natives to clash with oil companies and government forces in many African countries demanding for equal opportunity and benefits like in Ogoni and Ijaw- places where oil is cursed- in Niger Delta.

No change in fortunes
Although oil drilling is done just a stone throw from the natives, they have remained poor, their livestock die of the spills from oil, the fish in River Ogoni just floats, dead from the oil spills; the trees, and the wildlife is withering. Not even the presence of Shell can be path to offering the Ijaw and Ogoni people jobs. Apart from smelling the spilled oil, looking at the huge oil pipeline passing in their courtyards and hearing the echoing sound of the oil rig, the Ogoni and Ijaw people have nothing to celebrate about oil, they curse the day it was discovered.

It is like the people of Kaiso Tonya continuing to leave in squalid mud and wattle grass thatched houses, unable to catch mukene (silver fish) and drinking contaminated water as Tullow Oil scoops millions of oil barrels from their backyard. While campaigning in western Uganda, the President told voters how the Constitution (Article 244) is clear on the sharing of the oil proceeds for everyone’s benefit. But similar arrangements did not stop the Nigerian southerners (Igbos) from launching a life taking 1967 Biafra war; a southerner’s quest for secession on the pretext that the north was benefiting more from oil, an indication that what matters is not having the laws on paper but observing them to the dot.

After the war, the stream of petrodollars became a river thanks to the OPEC oil embargo that quadrupled the price of oil from $3 to $12 and Nigeria’s annual export earnings from $1b to $26b with oil making 95 per cent of the country’s exports. But as the oil boom started, poverty levels upped from 35 per cent to 70 per cent despite the fact that Nigeria was earning more than $350b from oil.

When the oil revenues reduced, corrupt government officials kept borrowing money presenting oil as collateral, only to stash the borrowed money in foreign banks, leaving Nigeria with about $30b in foreign debts, impoverished but with a club of rich kleptomaniacs.

Museveni roots for industrialisation

Vision reporter

PRESIDENT Yoweri Museveni has urged the people of Kampala to support the Government‘s policy of promoting industrialisation to create jobs and tackle the unemployment challenge among the youth and urban dwellers.

The President said this while on his campaign trail in Kampala including a series of rallies at Pride Academy School in Kabalagala, Makindye East Constituency and at Gogonya playground, Nsambya in Makindye West in Kampala as part of his electioncampaign tour.

According to a Uganda Bureau of Statistics report, a combined 1.7 million Ugandans within the critical 14–64 age bracket are either unemployed or under-employed.

Although the labour market grew by some 1.1 million jobs from 2002/3 to 2005/6, openings did not expand by a commensurate rate, locking out thousands of qualified youth.
While civil service jobs increased by 6% in 2008 due to creation of new districts, these were still inadequate to absorb the 400,000 job-seekers, who graduate every year.

The President’s efforts to promote industrialisation, attract foreign investments and produce more electricity to run both the industrial and service sector, have sometimes suffered setbacks because of opposition politicians, who have sabotaged these efforts leading to delays.

Museveni, however, said the Bujagali power project was on course and would produce more electricity to cut the cost of doing business and spur industrial development.

Meanwhile, Museveni has appealed to Muslims to sort out the differences between the Kibuli faction and the Old Kampala faction immediately after the elections.

He was speaking at Nakivubo Blue Primary School, where the Kibuli faction organised a rally for him to hand over to them the disputed title to William Street Mosque.

Museveni intervened in the matter and decided to pay off Drake Lubega the money he had used to buy the land onwhich the mosque stands.

Are the proposed Makerere University colleges viable?
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The Faculty of Information and Communication will be known as the College of Computing and Informatic Sciences

LAST December Makerere University’s 22 faculties were merged into eight colleges, writes Francis Kagolo. However, this has triggered a debate within the institution with some accusing their colleagues of wanting to prolong their stay in office.

The suspension of Makerere University economics lecturer, Dr. Wasswa Matovu, allegedly over absenteeism and spreading false accusations against his colleagues came a few weeks after the don had challenged the formation of eight constituent colleges the University Council approved recently.

On December 21, 2010, Matovu petitioned the Inspectorate of Government (IGG) and the National Council for Higher Education (NCHE), asking them to halt the university’s college formation process, saying it was illegal and key stakeholders had not been consulted.

long overdue change
The idea of transforming the hitherto faculty-based university to the college model of governance had been in the offing but shelved for over 15 years due to the reluctance of some departments to merge with others. But on December 17, the council finally assented to the idea.

The process saw 22 faculties/institutes merged to form eight colleges. Debate has emerged about the colleges and their practicability. The issue raises questions about the viability of a university like Makerere, which is largely based on one campus, to be governed through constituent colleges.

According to the college formation concept paper the university submitted to the NCHE, the colleges will enjoy administrative, academic and financial semi-autonomous status. This means that issues like registering students and processing their exam results will be managed by the colleges.

There will also be a procurement committee at each college. The central administration will retain its supervisory role and policy formulation. The vice-chancellor, Prof. Venansius Baryamureeba, says this will make the system more efficient and also lessen on the time students, especially graduate students, take on a degree.

why the colleges?
Baryamureeba, in a statement, attributes the move to the phenomenal expansion in student numbers. The university has been growing over the years, both in student numbers, programmes, research and outreach. From a humble technical school with only 14 students in 1922, the university now struggles with a student population of over 40,000.

This growth, officials argue, necessitated a change in the system of administration, from faculties to semi-autonomous colleges.
“To administer 40,000 students in one office (that of the Academic Registrar) is not an easy task; it is bound to be affected by bureaucracy and inefficiency,” remarked Prof. Mwambutsya Ndebesa, a renowned history lecturer. Ndebesa says the work could only be simplified through decentralisation where by constituent colleges are allowed to handle students’ matters.

research-led institution
According to Baryamureeba, re-organising the existing faculties and institutes into larger colleges was also a strategic undertaking to improve their efficiency. He says this will enable the university become a research-led institution, which is one of its current major strategic goals. In terms of administration, Baryamureeba said decentralised powers will ease some bottlenecks in the functions of the university while budgeting, micro-procurement, auditing and financial reporting which have been tedious will become easier because cost centres have reduced from 21 academic units to only eight colleges.

Globally, alumni are a good source of funds for universities. Through the introduction of colleges, the university also hopes to improve its interface with, and responsiveness to the needs of its alumni and other stakeholders for better public image and fundraising in case the need for funds arises.

Prof. Ssenteza Kajubi, a former vice chancellor of Makerere and Nkumba universities, entirely agrees with this notion. He says that the alumni would prefer dealing with and donating directly to their colleges with which they have close attachment instead of the central university administration. According to Kajubi, this will help the university deal with its fiscal challenges in some way.

Equating the issue to federalism where different regions decide on the appropriate use of their resources, Kajubi says academic units (colleges) develop faster when they are semi-autonomous than under the central administration. “If the vice chancellor is a doctor or computer expert, he may not think well for other people, say those doing fine art. But under the college system, everyone is empowered to think for the development of their departments,” the veteran educationist observed.

Kajubi notes that the college system can spur research and effective teaching. Likewise, Dr. Josephine Nabukenya, the dean of the school of computing and informatics technology, hitherto a faculty, believes that the college system will transform Makerere into a more research-driven university than before.

However, according to sources, the formation of colleges apparently did not augur well with a cross-section of Makerere staff, mainly those holding administrative posts, since many had to surrender powers as a result of the mergings. Some ‘junior’ staff jumped their faculty deans to become college principals and deputy principals. For instance, Dr. John Ngubiri of the faculty of computing was appointed deputy principal of the college of computing and informatics sciences, yet his hitherto boss, Dr. Nabukenya, remained a faculty dean.


selfish interests
For his part, the embattled Matovu insists that the “hurried” transition to colleges was a result of selfish interests of a few deans who wanted to prolong their stay in office, rather than for the sake of improving academic standards.

“There are some faculty deans who have served over 20 years and had to retire this year. Such deans fronted the formation of colleges so that they become principals and cling to power,” he argues. He cited the former dean of the faculty of economics, now principal of the college of business and management sciences, Prof. Ddumba Ssentamu, whom he said had been at the helm of the faculty since it was a department in the early 1990s. “The colleges were formed to recycle staff who would be exiting. In the process, they are destroying academic quality. They are running a criminal enterprise,” said the suspended lecturer.

Apart from Matovu, a cross-section of lecturers Sunday Vision interviewed also expressed some pessimism. Prof. Jean Barya of the law faculty believes that the idea of semi-autonomous colleges is not a bad one, but insists that the kind of college system the university wants to set up lacks backing in the current law.

The Universities and Other Tertiary Institutions Act under section 41(e) empowers university councils to approve proposals for the creation of “constituent colleges”. But Barya insists that the colleges Makerere University Council approved are not constituent colleges.

law not yet in place
“These will be colleges under the university; the law which allows universities to do that is not yet in place. The Act as it is currently does not provide for that kind of framework,” Barya said in a telephone interview. He believes the Act ought to be amended to provide for the type of colleges Makerere wants.

He also points out the overarching issue of the possible failure of the university’s plan to run colleges in the long run, given the extra costs that may come with the college framework. “The idea of colleges is good as a long as the necessary financial resources, staff and infrastructure are in place. But the main challenge at the university now is that expenditure outstrips income,” said Barya.

“Personally I am not so much excited about these colleges because I think the framework to support them is not yet in place.”
Indeed, the university estimates an addition cost to the current budget wage bill of sh27m when colleges are implemented. This represents an increment of 0.02% of the total recurrent budget of the university.

way to go for makerere
However, the faults in the college formation process notwithstanding, the general belief seems to be that the college system is the only way to go if Makerere is to improve academic quality and service delivery. Barya himself admits that the current system of faculties is not good as it does not provide room for innovation and development.
Contrary to popular belief, with a less than 0.05% increment in the current expenditure levels, the University Council in a statement said the transition from the present structures to colleges is a financially neutral process.

Baryamureeba also clarified that the college system is less expensive since less staff will be needed and there is less duplication of academic programmes and staff. He also said that some staff who have been rendered redundant by the colleges could be retrenched if the university gets funds in the future.

Aside, Kajubi asserts that the benefits, which he says are largely qualitative, far outweigh the cost of re-orienting staff in their new roles.

Nabukenya disagrees with reports that some former deans of faculties are fighting the process. “It’s just that we surrendered administrative powers. As deans, we retained our academic powers.

The work has become light; this will improve the quality of teaching, assessment and management,” she explained. Experts in higher education assert that the college model of governing universities enhances decision making, and that the benefits of implementing college formation are greater than the cost of continuing operating under a highly constrained, centralised model.

Origin of the collegial model
The origins of the collegial model of governing universities can be traced back to the 12th and 13th centuries when the University of Paris was conceived to be constituted by the faculty of organised schools, offering professional training. In contrast over the same period, Italy’s Bologna University was organised differently — on the basis of small faculties.

The college model is also characteristic of old universities like Oxford and Cambridge in the UK and a few Scottish universities. For instance, Oxford University has 38 colleges, which are fully independent and self-governing.

Each college has its own governing body, comprising the Head of House and a number of Fellows, most of whom also hold top university posts.

The university admits that the collegiate system has been and still is at the heart of its success. Details on the Oxford website indicate that all colleges invest heavily in facilities for extensive library and IT provision, accommodation and welfare support, and sports and social events.

The relatively small number of students at each college allows for close and supportive personal attention to be given to the induction, academic development and welfare of individuals.

In the United States, older universities such as Harvard and Yale which were founded on the Ox-Bridge model in 1636 and 1701 respectively retained such a framework for many decades until a typical American-style of university management evolved.

The dominant American model is one in which the board of trustees, a self-perpetuating organisation, holds the ultimate power in universities and colleges, both public and private (Shattock, 2006).

Here in East Africa, the collegiate model of governing university has already picked up in neighbouring countries.

The University of Nairobi, Kenya’s leading public university, has various colleges at different campuses. The University of Dar-es-Salaam, Tanzania, also has semi-autonomous constituent colleges, both on and off the main campus. They include the college of engineering and technology and another college for education.

The other college of lands and architectural studies, developed into a fully fledged independent university in 2007.

However, some top African universities, including the University of Cape Town and the Witwatersrand University in South Africa are still governed through the faculty/schools model.

Proposed colleges
1. Natural Sciences
2. Business & Management Sciences
3. Computing & Informatic Sciences
4. Engineering, Design, Art & Technology.
5. Humanities and Social Sciences
6. Agricultural & Environmental Sciences
7. Education & External Studies
8. Health Sciences (opened in 2007)

President Museveni visits Vision Group
Sunday, 13th February, 2011
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Museveni waving to the New Vision paper workers in the factory yesterday
By Conan Businge

PRESIDENT Yoweri Museveni yesterday toured Vision Group’s new ultra-modern printing press during his visit to the company to address Ugandans on Bukedde TV.

Museveni, who is the flag-bearer of the National Resistance Movement in the presidential race, took time to inspect Vision Group’s printing press, before heading for the talk-show.

He was accompanied through the printing press by the Vision Group’s managing director, Robert Kabushenga, Editor-in-Chief Barbara Kaija, head of radio Bills Tibaingana and administrative manager Karen Bahizi.

Kabushenga explained to President Museveni the complete process a newspaper goes through before it is sent to the readers.

Cheers and thumbs-up signals from several workers welcomed the President as he was led through various units of the factory.

The $9m (sh18b) printing press is aimed at boosting efficiency and improving delivery times of the company’s products onto the market.

At optimum speed, the printing press has a capacity to print 40,000 copies per hour with 64 pages of full colour in one run.

Besides being the first of its kind in East Africa, the Vision Group printing press is the third new printing press ever imported into Uganda.

The printing press and TV studios, in which the President had a talk-show last night, were built with money raised from a rights issue.

Vision Group is listed on the Ugandan stock exchange with the public holding 47% of shares and the Government maintaining a 53% majority share.

The company boasts of media platforms that include the flagship New Vision newspaper, four regional newspapers, four magazines, as well as an online division.

In addition, the company has five regional radio stations and two television stations.

Govt secures sh170b for universities
Sunday, 13th February, 2011
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By Conan Businge

THE Government is to secure sh176b ($80m) from the African Development Bank for the development of public universities.

The funds, according to the education ministry’s Permanent Secretary, Francis-Xavier Lubanga, would be used to develop the universities; and work would start as soon as the funds were secured.

Lubanga made the revelation on Wednesday while meeting Makerere University Business School’s (MUBS) Council and management, during a tour of its sh10b library complex which is still under construction.

It is a six-storeyed complex, the only new block meant for study purposes, at the MUBS campus.

He was flanked by the school’s principal, Prof. Waswa Balunywa, and council boss Dr. Colin Ssentongo and other university officials.

The funds will be received under an additional funding from the African Development Fund. Lubanga, however, clarified that the funds would not necessarily be shared equally among the universities.

He added that funds from the fourth ADB; were received some time back and were used in the development of secondary schools and some institutions of higher learning.

Lubanga explained that some of the funds would be allocated to universities to specifically develop their infrastructures.

The business school’s estates manager, Julius Birungi, revealed that the library was being constructed using internally generated funds and support from the Government.

The lack of a library has been one of the School’s hindrances from getting a university status.

Lubanga, when asked for his official view about the school’s university status, said that, “it is no longer a question of whether, but that of time.”

“You (MUBS) have taken a firm step in the right direction by setting up a library, which was a critical requirement. We are going to start work which will deliver a university status to this business school. The law is clear on what we should do,” Lubanga added.

He asked MUBS to be patient until the new Parliament comes into force after the national elections; so that the issue can be tabled.

Makerere University has for close to a decade been embroiled in a row with Makerere University Business School over the latter’s quest for independence from Uganda’s the oldest university.



Mpanga hydro power plant commissioned
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By Joseph Mitti (email the author)
Posted Monday, February 14 2011 at 00:00
Over 20,000 households in the western part of Uganda will access electricity following the commissioning of Mpanga hydropower plant in Kamwenge District.

While commissioning the plant in Kabeeza Kamwenge District last week, the state minister for Energy Simon D’ujanga, said the generation plant, worth shs57billion will add 18MW to the national grid.

Reliable supply
He said: “The 18MW will be sold to the national grid and also distributed to local communities. This will contribute towards sufficient and reliable energy supply as we widen the rural electrification programme.”
He said the power will boost industrialization in the region which includes cement, tea, cobalt and agro-processing industries.

It will also light hospitals, schools and community centres among others.
The generation plant, which was developed by the South Asia Energy Management System, is another success story of the Public Private Partnership. In 2008, government partnered with African EMS Mpanga, a local company, to start off the project.

Generation evaluation
According to Mr Godfrey Turyahikayo, the Rural Electrification Agency (REA) executive director, government constructed the interconnection facility to evacuate the energy generated as other developers put up the plant.

“The government through REA constructed the power line and a substation that will evacuate the energy generated,” Mr Turyahikayo said.
He added that when such mini-hydro power plants are constructed, the agency moves towards achieving its 67 percent power coverage target.
He said it also supports the government’s strategy of increasing mini-hydro power generation to 150MW by 2015.

Mr Benon Mutambi, the acting Electricity Regulation Authority chief executive officer, said the investment will reduce levels of load shedding in the region.

New-found oil set to change Uganda's economy
By Ben Simon (AFP) – 8 hours ago
KAMPALA — Whoever wins this week's presidential election in Uganda will have to manage national reserves of 2.5 billion barrels of oil, a recent find that has transformed the country's financial outlook.
President Yoweri Museveni is expected to win re-election in Friday's poll but will face the toughest challenge yet to his 25-year rule from veteran opposition leader Kizza Besigye, according to analysts.
Rumours that the northwestern Lake Albert region sits above an oil field have been around for decades, but in late 2006, two foreign firms found the first reserves deemed commercially viable.
Earlier estimates had put total deposits at around 1.5 billion barrels, but Anglo-Irish Tullow Oil and Canada's Heritage Oil and Gas found accessible crude in more than 90 percent of wells drilled, one of the highest success rates in the world.
The wells are located in the Albertine basin, which lies in the upper-most part of the western arm of the Great Rift Valley.
Two other energy companies, Neptune Petroleum, the Ugandan subsidiary of London-based Towers Resources, and Bermuda-based Dominion have active exploration licenses but neither has found anything.
Although production plans have been set back by a series of public feuds between the government and the private firms, analysts see the outlook as rosy.
Just having the petroleum is enough for many investors...and has led to reasonably positive expectations about the future of the country," Lawrence Bategeka of Makerere University's Economic Policy Research Centre told AFP.
Currently more than 80 percent of Uganda's some 33 million people depend on agriculture for their livelihood. One third of the population lives on less than one dollar a day.
Uganda has said it wants to build its own refinery.
Tullow, which after buying out Heritage now controls all the reserves, voiced initial apprehension, suggesting a pipeline to the Kenyan coast might be more efficient.
But the two sides now appear on the same page regarding a 10 billion-dollar (7.3-billion-euro) production scheme to refine some 200,000 barrels per day, with Tullow bringing in France's Total and China's state-controlled major CNOOC as partners.
The breakdown of who owns what between the Ugandan government and Tullow has not been made public, but Kampala is thought to have negotiated a deal that gives it a clear majority of profits over the life of the contract.
Tullow says early production could begin in 2012, but the full operation will take at least three years to scale up.
Uganda's parliament has meanwhile pledged to pass a law governing the nascent industry, but has yet to do so, making progress towards production difficult.
"When these things take too long, for investors, it gets very frustrating," said Hakim Muwonge, petroleum analyst at Kampala think-tank Fanaka Kwa Wote.
On the regional trade front, Uganda has historically sold goods to south Sudan, but recent relative peace there has boosted trade and the independence of the territory scheduled for next July should enhance prospects further.
"It could formalize trade relations," Bategeka said, particular if the new nation joins the East Africa customs union, something Museveni has called for publicly.
Bategeka said south Sudanese will likely start generating more of their own products, but added: "I don't expect their dependence on Uganda to decrease significantly in the near future."
And analysts say Ugandan traders continued to take advantage of the persistent turmoil in the mineral-rich east of Democratic Republic of Congo, noting a rise in the sale of building materials to a region wracked by conflict for more than a decade.
Museveni's 25-year presidency has seen steady economic progress, with an average of five percent growth recorded in each of the past five years.
Poverty levels have also dropped, although the World Bank said this is partly due to the expulsion of Lord's Resistance Army rebels from northern Uganda.
Since 2006, this has allowed some 1.8 million people to leave protected camps and resume productive lives on their farms.
One potential hurdle to Uganda's economic growth, according to Bategeka, is that "everything here still revolves around the presidency" rather than around government institutions.
He argued it's not yet clear if Uganda's petroleum sector will be well managed, and concerns over transparency may be valid.
"I am cautiously optimistic," he said, and recalling a similar dynamic in Malaysia added: "they may not have been completely transparent in all areas, but that didn't stop them from using the resource wisely."

Kamwenge gets sh60b power project
Sunday, 13th February, 2011
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Mpanga official, Turyahikayo, Mutambi commission the dam
By Ronald Kalyango
THE 18-mega watt electricity generated by Mpanga HydroPower project in Kamwenge district has been commissioned. The $26m (about sh60b) power plant is owned by Africa EMS Mpanga, a subsidiary of South Asia Energy Management Systems Inc based in California, the US.

Speaking at the dam’s technical commissioning last week, energy state minister, Simon D’Ujanga, said the project was the least cost renewable energy plant by the private sector.
“This has set a benchmark for other renewable energy projects.

We hope other future projects will give comparative prices,” said D’Ujanga.
He said the generated power will be sold to the national grid. It will also be distributed to the local communities, contributing towards a wider rural electrification programme.

D’Ujanga said the Government’s strategy was to increase generation from mini-hydro power plants to 150MW by 2015. To achieve this, he said, the Government will soon commission the Ishasha (6.5MW) and Buseruka (9MW) mini-hydro projects in Kanungu and Hoima.

“There are also two mini-hydro projects totalling a capacity of 39MW in the pipeline,” he said. The Rural Electrification Agency chief, Godfrey Turyahikayo, said the Government via his agency was mandated to construct the interconnection facility to evacuate the generated energy.

This also includes the power line and a substation. Mpanga Hydropower dam is the second mini-hydro project to be commissioned after 13MW Bugoye plant in Kasese.

“This is a clear manifestation that the Government’s effort in renewable energy power generation through public private partnership is paying off,” said Turyahikayo.

The electricity regulatory authority’s acting boss, Benon Mutambi, said the 18MW will reduce Uganda’s current load-shedding which stands at 25MW.
“The dam will help overcome the severe load-shedding that the country experienced in 2005, 2006 and 2007,” he said.

The construction was undertaken by VSHydro (Pvt) Ltd; a Sri Lankan-based hydropower construction company.

Newly-listed Centum pledges to inject $20m in Uganda
Sunday, 13th February, 2011
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By Vision Reporter
NEWLY-LISTED Centum Investments will invest a total of $20m in Uganda in fresh capital in the next few years. James Mworia, the Centum chief executive officer, said the starting point besides offloading four million shares on the Uganda Securities Exchange, will be a high value real estate project on Entebbe Road at Garuga.

Centum is worth $140m and comprises 15 market leading companies in its portfolio from a diversity of sector such real estate, energy, infrastructure and beverages.

Centum listed on the Uganda Securities Exchange (USE) recently and immediately traded a total value of sh558m or 39% of the day’s volumes worth sh1.4b. 836,699 shares were sold out of the four million on offer.

Centum becomes the seventh cross-listed company at the USE.
Mworia explained that Centum’s entry to the Ugandan was a sign of confidence in the economy.

BOU predicts 7% growth rate
Sunday, 13th February, 2011
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Mutebile is upbeat that the fundamentals are still strong
By David Mugabe
CENTRAL Bank governor, Tumusiime Mutebile, is confident that the economy will grow at between 6 to 7% this financial year.

The consistent demand for credit at a 30% growth rate from April to September 2010 and related positive fundamentals are signs that the economy appears set on its upward trend, Mutebile noted.

“Real gross domestic product growth in 2010/2011 will be between 6% and 7% per annum, up from 5.2% in 2009/201.
“This is a remarkable rate of growth given the fact that most other countries in the world cannot achieve a half of this,” said Mutebile at the Centum cross-listing dinner at the Kampala Serena Hotel last week.

Statistics show that the private sector credit grew to 26% in July, compared to 25.1% in June 2010. This is attributed to the high level of investments and expenditure.

Mutebile said as the country continues to make stead progress in its economic reforms, investors will continue to come.
While credit grew, commercial lending rates remained prohibitive averaging between 19.6% and 20.1%.

in June for shilling denominated loans.
Most of the loans in the period were personal loans taking a chunk of 21.1% of all outstanding loans from between June and July.

Agriculture, the mainstay of the economy, still had the least loan uptake at 6.4% while building, commerce and trade took 19.9% and construction and real estate took 18%.

Mutebile hailed Centum for taking steps to invest in real estate in the country which is one way of contributing greatly to this sector of the economy.

The Uganda Securities Exchange chairman, Charles Mbire, said Centum was showing the spirit and result of working together.

He said the firm’s gesture and timing of entering the Ugandan market showed their long-term strategy in the market.
Mbire said collectiveness, transparency and succession planning were key ingredients for growth.

“One thing I want to assure you is that we will be transparent, leave by the rules and regulate to the dot,” said Mbire.
Kenyan businessman John Kirubi challenged Ugandan and Kenyan investors to look within the region and exploit its potential saying opportunities like those presented by Centum should not be left unexploited.

“Africa must work for Africa. Why must we wait for white people for heaven’s sake. This is our time,” said Kirubi.
Centum’s chief executive officer, James Mworia, reiterated that Africa remains an attractive investment destination.

“Lets join hands in building extra ordinary African entrepreneurs that not only take a position in Africa but the rest of the world,” said Mworia.

Museveni promises to help dairy farmers
Sunday, 13th February, 2011
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Museveni wants high value
By David Ssempijja
PRESIDENT Yoweri Museveni wants more regional investors to exploit the rich dairy sector in Uganda. Touring the Shumuk Group milk plant in western Uganda, the President pledged to support the farmers as they fall under the backbone of the economy.

He urged the farmers to stay committed to their trade and strive to add-value to their milk to benefit from the strategic investors.

Shumuk is also set to launch its powder milk section, Shukla Mukesh, the group chief executive, disclosed. He noted that the $3m planned investment would cover the group’s second phase of expansion.

“We recently launched our production process with mainly fresh milk, yoghurt, ghee and UHT milk in the first phase.
“We now plan to embark on our second phase, which will cover the powder milk section,” Mukesh said.

“We have also managed to double our output from the previous 50,000 litres per shift to about 150,000 litres.
“This has given us the competitive advantage to engage in the very unique powder milk process,” he said.

Mukesh pointed out that their “Go Fresh” brand had already become a house-hold name. He said the powder milk would have a maximum shelf life of at least six months.

Neptune to boost West Nile oil exploration
Sunday, 13th February, 2011
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By Frank Mugabi
NEPTUNE Petroleum Uganda, the company exploring oil and gas in the West Nile, has raised $6.8m to accelerate its work.

The money was raised through its London-based parent firm, Tower Resources Plc. The funds that are proceeds from the placing of 90 million new shares on the London bourse will be used to increase the company’s working capital and fund the impending seismic operations in West Nile.

Tower’s chief executive officer, Peter Kingston, said a seismic programme of 150-200kms would commence in April.
The arrangements come on the heels of a new study, which kept alive prospects of finding oil in the region.

Two wells were drilled, one in 2009 and another last year, but both did not encounter any commercially viable oil reserves.

However, a fresh survey was done and confirmed the probable existence of oil in the region.

NWSC customers to pay bills using mobile money

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Mr Themba Khumalo (L), the MTN Uganda CEO and Dr Muhairwe exchange documents after signing the partnership in Kampala last week. COURTSEY PHOTO.

By Ismail Musa Ladu (email the author)
Posted Monday, February 14 2011 at 00:00
National Water and Sewerage Corporation has entered a partnership that will see the latter’s customers pay water bills using MTN’s mobile money services.

In a press statement last week, NWSC said the payment of water bills in future will not be by cash at its offices but through communication gadgets such as cell phones and other ICT modules.

“The convenience of MTN Mobile money to our customers is what we as a customer centred organisation look for because it is a real time solution and will eliminate delays in updating customer accounts as well as the need to physically move to pay bills or check account details.

Dr William Muhairwe, the NWSC managing director said last week while launching the water utility payments service in Kampala
The new service will see about 1.5 million customers pay bills using MTN Mobile Money.


NWSC launches alternative payment of water bills
Sunday, 13th February, 2011
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Khumalo demostrates how the mobile money water payment system works
By Prossy Nandudu
NATIONAL Water and Sewerage Corporation (NWSC) customers can now pay bills through MTN’s Mobile money.

The move is aimed at making it easy for the customers to keep their accounts up to date. Speaking during the signing of the deal at the Kampala Serena Hotel, the head of NWSC, Dr. William Muhairwe, said the system would replace payment to cash offices.

He, however, added that the corporation would not lay off staff, adding that cashiers would be retrained and absorbed into administration.
The innovation will enable customers receive reminders of their water bills on phone, Muhairwe said.

“Customers have been receiving water bills at awkward hours. But now, they will receive them on the phone,” he said.
Muhairwe said the cooperation was working with MTN on another payment system, where customers would be able to instruct their bankers using mobile phones to pay water bills.

Themba Khumalo of MTN said the telecom company was employing a simple technology to allow all its customers embrace the service. He said about 1.5 million Ugandans are subscribed to MTN.

“To use the service, you must be a registered member with MTN mobile money. The customer will require a reference number, which is also their account number,” Khumalo said.

The executive director of Bank of Uganda, Emmanuel Kalule, hailed NWSC for teaming up with the private sector to make services better.

Traders consider Dar Port access route
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Ship docked at the Dar es Salaam port ready for transit.

By Dennis Kawuma (email the author)
Posted Tuesday, February 15 2011 at 00:00
Landlocked…the sound of the word in business and economic circles is likely to invoke an ominous mood because of the related difficulties of accessing the sea for international trade.

In such a geographical state, Uganda has had to grapple with all the challenges that are associated with a single access route to the sea; the most severe being the 2007 post election violence in Kenya, which had a crippling effect on the country’s import and export trade.

Looking to find an alternative to the traditional Kampala-Mombasa route, a select group of the Ugandan business community recently took a road trip through the central corridor (Kampala-Mutukula-Dar es Salaam) to ascertain the commercial viability of ferrying their goods from the Dar es Salaam port to their various destinations in Uganda.

With an average transit time of four days, from Kampala to the Dar es Salaam port and vice versa, the group of 38 covered the 1800km journey in two and a half days. Save for a dusty and bumpy stretch of 153km, most of the road network is smooth and there are visible signs of construction in the untarmacked areas.
The 1200km distance from Kampala to the Mombasa port is shorter but this has not diminished Uganda’s need for an alternative sea outlet.

“Since the roads are being worked on. It is an alternative which we should explore,” said Nelson Tugume Owaarwe who was part of the Ugandan business community that made the trip.

Mr Tugume who serves as the chairman of the Uganda Motor Vehicle Importers and Dealers Association was quick to add that the viability of the route would be determined by the competitiveness in the quality of services and the magnitude of the costs.

Commenting on the state of the route, Tanzania Ports Authority, Director General, Mr Ephraim Mgawe said the improvement of the road link from Kampala is an opportunity that comes in handy to relieve the pressure on traders as the region’s railway challenges that are yet to be resolved.

“It is our duty as facilitators and providers of transport services to put in place the necessary infrastructure with a view of improving our competiveness and offering efficient services,” said Tanzania Transport minister, Omar Nundu in Dar es Salaam.

Speaking on behalf the Ugandan traders, Kampala City Traders Association spokesman, Issa Sekitto singled out the revival of the railway network as central to East Africa’s economic development. “The road is only a short term intervention,” he said.

The traders also raised concerns over the number of weighbridges on the route, which they said amount to Non Tariff Barriers. There are currently seven weighbridges on the central corridor route. However Tanzania Ports Authority officials said discussions to reduce the weighbridges to three are ongoing.

For the economy to realize the potential benefits of the route, the traders asked the Ugandan government to consider cost mitigating incentives or subsidies through, for instance, a reduction of taxes on fuel imports from Dar es Salaam in order to reduce freight costs.

Besides improving the road links, Mr Nundu told the Ugandan traders that the Tanzania government is determined to revamp the railway line so that it can serve its clients better.

The port of Mombasa is the largest in East Africa and it has for long been a vital gateway for imports to Uganda.

Currently, the Dar es Salaam port holds a dismal one per cent of the total market share of Uganda’s seaborne traffic. The rest is held by the Mombasa port.

In 2009, the Dar es Salaam port handled 23, 930 metric tons compared to the 3,980,394 metric tons that were shipped through the Port of Mombasa.

At both the Dar es Salaam and Mombasa ports, the terminal delivery circle (from invoicing to delivery) and the Dwell Time-the period containers stay at the terminal- is within the same range of 3 and 10 days.

Uganda’s annual seaborne traffic is estimated at 4 million tons and the figure is bound to increase as the economy expands.

Museveni May Extend 25-Year Rule in Uganda as Oil Boom Nears
February 14, 2011, 4:05 PM EST

By Sarah McGregor and Fred Ojambo
Feb. 15 (Bloomberg) -- Ugandan President Yoweri Museveni will probably win an election this week, extending his 25-year- rule in the East African nation on the cusp of an oil boom. He hasn’t explained how he plans to manage the bonanza.

London-based Tullow Oil Plc will start pumping oil and gas next year from the Lake Albert Basin, with volumes expected to reach 200,000 barrels a day by 2015. The country has an estimated 2.5 billion barrels of oil, with about 1 billion barrels already discovered, according to the company’s data.

Uganda’s economic growth averaged more than 8 percent for the seven fiscal years through June 30, 2008, the fastest in East Africa, according to the World Bank. That record is probably enough to ensure Museveni’s victory, even as concern mounts that a policy of keeping oil contracts secret means the economy may not benefit as much as it could.

“There is very little information on how those resources will be managed by the fiscal authorities or shared by the producers,” Yvette Babb, an analyst with Standard Bank, said by phone from Johannesburg on Jan. 20. “The risk of having a lack of transparency is that those funds might be used for unproductive reasons or fall into the wrong hands.”

Museveni, 66, is backed by 67 percent of voters ahead of the election on Feb. 18, according to a survey by the local unit of market research company Synovate. Kizza Besigye, 54, head of the Forum for Democratic Change party, scored 19 percent. The poll of 1,979 people between Dec. 3 and Dec. 14 had a margin of error of 2.2 percentage points.

Poor Track Record

Museveni and his National Resistance Army seized power in January 1986, after a five-year guerrilla war toppled the regime of Milton Obote and the short-lived military junta led by Tito Okello. He won consecutive victories in 1996, 2001 and 2006, even though the Supreme Court found irregularities in the last two elections challenged by Besigye.

Museveni ranks as one of Africa’s longest serving leaders along with Muammar al-Qaddafi of Libya, Zimbabwe’s Robert Mugabe and until last week, Egypt’s Hosni Mubarak.

Tension is rising ahead of the vote following warnings of terrorist attacks by Islamic groups in Somalia and allegations of violence against the opposition.

Opposition supporters have formed vigilante groups to defend themselves and to thwart voter fraud, Amnesty International said on Feb. 11.

Corruption

The top issue for voters remains corruption, the Synovate survey showed. Uganda is 127th out of 178 nations on the Berlin- based Transparency International’s corruption perceptions index.

Graft “is a concern for every new oil exporting country and it is particularly a concern in Uganda which has a track record of corruption and public misuse of funds,” Joseph Lake, an analyst at the Economist Intelligence Unit, said by e-mail on Feb. 9.

Tullow said last year that it plans to partner with China National Offshore Oil Corp. and Total SA once a tax dispute with the government is resolved. Uganda has five production-sharing contracts: one each with Dominion Petroleum Ltd. and Tower Resources Plc, and three with Tullow, Bill Page, a partner at Deloitte & Touche LLP’s Ugandan unit, said by e-mail on Feb. 11.

“It is in the nature of these arrangements both in Uganda and elsewhere that agreements remain confidential for commercial reasons,” George Cazenove, a spokesman for Tullow, said by phone from London on Feb. 11. “Nevertheless, we support any country’s transparency initiatives and would happily support the publication” of the accords.

Legislation

Proposed legislation governing the petroleum industry in East Africa’s third-largest economy, behind Kenya and Tanzania, is awaiting approval by lawmakers. Museveni promised in his campaign to create a Petroleum Fund to finance new roads, power generation and improve education.

“Poor transparency around licensing and revenue management remain major uncertainties for the oil sector, with plenty of outstanding questions swirling around the oil legislation likely to be signed into law within a few months,” Philippe de Pontet, Africa director for Eurasia Group, said in an e-mail on Feb. 10.

Museveni expects crude output to accelerate economic growth in Africa’s biggest grower of robusta coffee to 10 percent or more, boosting living standards for the one in three who live on $1.25 or less a day, according to the World Bank. The International Monetary Fund forecasts the economy will expand 6.1 percent in 2011, up from 5.8 percent in 2010.

Tension and Terrorism

Police have increased security measures following reports that “terrorists” are preparing to carry out attacks, Major General Kale Kayihura, the inspector general of police, said Feb. 5. Kampala was hit by twin bombings claimed by the Somali Islamic group al-Shabaab on July 11 that left 76 people dead and injured dozens.

Al-Shabaab vowed further attacks on Uganda and Burundi, which have contributed troops to the African Union peacekeeping force in the Horn of Africa nation.

About 14 million people are registered to vote, according to the website of the Electoral Commission of Uganda. Polling stations open at 7 a.m. local time and close at 5 p.m. Results will be announced within 48 hours after voting centers close.

“While it appears increasingly likely that Museveni will retain his political stranglehold, it is far less certain that the election will pass off peacefully,” Lake said. “The risk is that the opposition parties refuse to accept the results and resort to violence, perhaps encouraged by the recent uprisings in Tunisia and Egypt.”

Uganda firm to spend $160 mln on power plant
Mon Feb 14, 2011 5:07pm GMT Print | Single Page [-] Text [+]

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KAMPALA (Reuters) - Ugandan firm Taylor Biomass Energy Uganda (TBEU) plans to invest $160 million to build a power plant that will burn rubbish and generate 40 megawatts, the firm said on Monday.

It would be the first major renewable energy project in east Africa's third-largest economy which is plagued by frequent power outages due to supply constraints and a run-down transmission network.

Despite years of relative political stability and sustained economic growth, energy shortages have stunted the expansion of Uganda's manufacturing sector. Over the past five years, the government has been seeking investors to help fill the power deficit.

TBEU will implement the project in partnership with Taylor Biomass Energy LLC of the United States, the Ugandan firm's part owner.

"The companies will invest over $160 million to construct a plant that will recycle almost 1,030 tonnes daily of municipal solid waste from Kampala and the surrounding Wakiso district to generate renewable clean energy for over 35,000 homes," TBEU said in a statement.

TBEU said financial closure and construction would take two years and that when up and running the plant would employ about 400 workers.

"The project will.. save the environment about 3 million tons of greenhouse gaseous emissions annually. An additional 1,100 indirect jobs will also be created," the statement said.

Taylor Biomass Energy LLC, which will provide all technical back-up to the project, is constructing a similar plant in Montgomery, New York.

Uganda's largest hydropower plant, Bujagali hydropower dam, with a maximum generation capacity of 250 MW, is due to come online in phases starting later this year.

UK-based investment expert eyes growing middle-class
Monday, 14th February, 2011
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Adam Kawuzi
By Shamillah Kara

UGANDA'S consuming class is growing and so is the attention it is drawing.

The immensity of opportunities that come with the rise of the middle-income stratum and their growing disposable income is a magnet for people like Adam Kawuzi and his ilk.

Kawuzi, a UK-based investment expert, foresees the dire need for financial advisors as Uganda’s middle-class continues to grow and become more affluent.

“Individuals will start to look beyond their savings and fixed deposit accounts and will seek investments with higher returns and build more diversified portfolios,” he says.

The need for medium and long-term financial planning as opposed to hand-to-mouth existence creates a gap in the market for financial products and wealth management services, an expertise Kawuzi, who is based in Jersey in the Channel Islands, is keen on bringing back to Uganda.

He is the head of finance of MARS Capital Holdings, a wealth management firm that offers specialised wealth management solutions to high net worth individual investors.

Kawuzi’s career background
At his current job, Kawuzi manages and supervises the financial operations of all the entities in the company. This involves managing the statutory and regulatory reporting, management reporting, budgeting and financial planning, treasury management and strategic planning.

Before joining MARS Capital Holdings last month, he was working with the Standard Bank Offshore Group, which he joined in February 2008 as the manager of product accounting.

A year later, he was promoted to the head of reporting for the private clients segment across the Standard Bank Group.

In 2010, he was made the head of financial planning and strategy for the offshore group and private clients segment and simultaneously, the head of technical accounting for the offshore group.

Other firms Kawuzi has worked with include PricewaterhouseCoopers in Kampala, where he worked from 2002 to 2005 as an associate in the audit and assurance offering and later as a senior associate.

He also worked with Deloitte UK in Jersey from October 2005 to January 2007, starting as an assistant manager in audit and assurance.

Is this the peak?
“Definitely not, I believe there are still greater heights to scale and I trust in my ability to achieve these greater heights. To position myself for this, I will be attending the Institute of Directors next year.”

Greatly inspired by his mother, whom he says subscribes to the saying “iron sharpens iron”, and sent him to the best schools, Kawuzi believes he is where he aspired to be today.

“After dad passed away in 1993, my mother made great sacrifices to give us a decent life. Most importantly, she sent us to the best schools. Her belief in me and the hope she has for all her children drives me to be the best I can be,” he says.

Kawuzi is a product of King’s College Budo, where he served as the deputy head prefect, and of the Institute of Statistics and Applied Economics at Makerere University, where he graduated with a first-class bachelors of statistics degree in 2002.

He completed his professional examinations with the Association of Chartered Certified Accountants in 2004. In 2008 Kawuzi attended the Chartered Institute for Securities and Investments in the UK, where he graduated with a master’s degree in wealth management.

On what he is doing
“Right now, MARS Capital is going through restructuring and re-organisation. Being involved in this strategic project, which will determine the direction and shape of the firm, is very interesting and challenging at the same time,” he says.

His work ethos
Kawuzi’s work philosophy is centred on being diligent and dedicated at work, having a strong sense of duty and responsibility and respecting people, values he says were instilled in him at school.

How is working and living away from home?
Kawuzi says it is challenging and at the same time rewarding, adding that the experience is aggravated by culture shock.

Kawuzi, however, believes that living and working in a multinational and multi-cultural environment broadens and deepens his perspectives.


Quality Chemicals in US$80m expansion
WEDNESDAY, 16 FEBRUARY 2011 06:32 BY THE INDEPENDENT TEAM
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Ugandan pharmaceutical giant, Quality Chemicals Industries Ltd, intends to invest US$80 million in two separate expansion programs over the next two years.

The pharmaceutical’s marketing manager George Baguma says that US$30 million is to expand capacity of the generic AIDS and malaria-drug plants and US$50 million for the production line for pharmaceutical ingredients. Currently, the Kampala-based plant has the capacity to produce 6 million malaria and generic AIDS tablets daily, with room for expansion.

Data from the Uganda AIDS Commission indicates that about 442,000 Ugandans require generic AIDS drugs but only 218,900 have access.

QC plans to start exports in four months when it completes registration of its products in neighboring Kenya.

The company is looking at shareholders and the sale of new stock as sources of the funding with prospects of listing on the bourse at future time.



Sameer to double milk processing

Sameer Agriculture and Livestock Limited, the producers of Fresh Dairy brand of products, intend to double milk production within five years and boost their exports to regional markets. The company that currently handles about 550,000 litres of milk per day but with a demand of 600,000 litres recently announced a US$15 million (over 34.5 billion) investment in a milk drying plant. The plant will process 300,000 litres of milk daily. However, Managing Director Anoop Sharma, said that milk production in Uganda is low because there are a few commercial farmers. Uganda has about 2.5 million livestock farmers, 90% of whom are smallholders. The country produces 1.6 billion litres of milk annually, but of this, only 40% is processed, 45% is sold unprocessed and 15% is dumped. However, Sameer has initiated contract farming among cattle keepers to improve the situation. Under the incentive, member farmers are advanced money annually to buy farm inputs and, in return, the farmers sell their milk to the firm at pre-determined prices.



Tororo Cement to hit 2m tonnes
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Tororo Cement Industry is to complete its Shs 100 billion (US$50m) facility to expand its production by June. With the expansion, the factory’s capacity will jump from the current 1 million tonnes to 2.2 million per annum. The company’s Chief Marketing Manager, Alok Kala, says that this may bring down the price of cement.

Tororo Cement’s main competitor, Hima Cement, recently launched a new plant that increased capacity from 350,000 tonnes a year to 850,000 tonnes a year.



Japanese firms boost Roofings

Roofings exports are to jump to US$70 million (about Shs161billion) and the plant’s output to 120,000 tonnes following an equity partnership with two Japanese steel companies. The US$100 million cold rolling mills phase is the largest segment of the three phase industry situated in the Namanve Industrial Park.

According to the deal, Yodogawa Steel Works and Fujiden International provides technology and skills transfer, training and affordable and high quality steel products and in turn takes a 10 percent equity stake in the third phase of Roofings’ cold rolling mills production line. The increased capacity also comes with 2,000 new jobs.

Half of the increased capacity will be exported to Rwanda, southern Sudan, Burundi, northern Tanzania and Kenya.



Centum to cross-list on USE

Kenya’s equity firm, Centum is next month poised to cross-list on the Uganda Securities Exchange (USE) increasing to seven the number of companies at the local bourse and the Nairobi Stock Exchange. Other cross-listed companies include: Kenya Airways, East Africa Breweries Limited, KCB, Equity Bank, Jubilee Holdings Limited and NMG. Centum also brings to 14 the companies trading on the local bourse.

James Mworia, the Centum CEO says the firm’s focus in the local market will be on sectors driven by domestic demand such as insurance, education publishing, beverage and real estate.

Joseph Kitamirike, the USE CEO said that Centum is the only cross-listed firm that will come with shares for Ugandans to trade. On the day of cross-listing in Uganda, the shares will open at the last traded price in Nairobi and about 4 million shares worth about Shs3.37 billion (US$1.5 million) are expected to be float

civil aviation authority
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Water coverage up from 47% to 74%

By Stella Nassuna

Soon after being appointed the new chief executive officer of the National Water and Sewerage Corporation (NWSC) in 1995, Dr. William Muhairwe embarked on a programme to improve the organisation and offer better water and sewerage services.The programme kicked off on December 4, 1998, four months after NWSC was granted autonomy in accordance to the 1995, NWSC Statute.

In 1999, the first NWSC corporate plan (1997-2000) was introduced. This plan stressed the problems in five priority areas of the corporation; that is operational efficiency, financial sustainability, service coverage, internal reforms and restricting and external services).
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State minister for water Jennifer Namuyangu (right) during the commissioning of piped water in Iganga town in 2008
By the end of May, 1999 NWSC had started reaping from the programme. In Kampala, staff productivity went up to 37% from 26%, Non- revenue water (NRW) or water not billed reduced to 51% from 57%, the number of towns covered by the operational cost went up from just three to five from a total of 11 and maintenance service became more reliable.

A service that took over 48hours to fix reduced just to 36hrs by February, 1999.

By 2000, SEREP, the new initiative introduced to address the constrains, weaknesses and shortfalls of the 100 days programme saw almost in all areas that NWSC covered at the time, get their leakages and bursts fixed in just less than 24hrs from 48hrs in 1999. Customer base also increased by 13.5%.
NWSC expenses reduced from sh1.858b during the 100days to sh1.744b during theis initiative. This good performance took the corporation into signing a parastatal contract with the NRM government. The contract required them to meet specific targets within three years (2000-2003).

By 2003, overall the areas of coverage, the corporation managed to meet almost all the targets. Staff productivity went up to 11 staff per 1000 connections from 18, collection ratio shot to 95% from 89.3%, the number of towns covering operating costs, shot to 10 from seven in 2000.

The 2006 to 2009, corporate plan, saw the NSWC staff come down to seven staff per 1000 connections and customer services were improved through the use of toll free lines. Customer base increased from 152,138 connections in 2006 to 225,932 connections in 2009 and the sewer connection also increased to 16,195 from 13,853. The revenue collection increased from 90% to 98% due to the direct payment option present in 11 banks now, introduction of prepaid metres and introduction of instalment payments.

Water coverage increased from 15 towns to 17, the number of subscribers rose from 152,138 in 2005 to 225,932 in 2009 due to the completion of Gaba111, Mukono and Entebbe water projects.

The 2009-2012 corporate plan of NSWC also registered success. It saw the water production shoot to 70m cubic metres per annum in 2010 compared to the 44mcubic metres per annum in 1998. Dr. Muhairwe attributes the increase in production to the rehabilitation and expansion of other treatment plants in Kabala, Jinja, Entebbe, and Soroti.

By this period more people and industries were able to access clean potable and affordable water. This increased water sales to 22m cubic metres per annum in 1998 to 46.2m cubic metres in 2010.

Dr. Muhairwe says that 2009-2010 period saw water distribution reach almost all parts (districts) of Uganda. This was realised in a move to extend NWSC services closer to the people and the implementation of the objectives of the Poverty Eradication Action Plan and Millennium Development Goals.

NWSC intensified its water mains extensions in their various areas of operation. On average a a total of 150kms of mains are extended per annum. Projects such as Mukono-Seeta water supply and sanitation, reinforcement of mains in Kampala, extension of water to about 20 towns in and out of Kampala happened in 2010.

Service coverage over the years increased from 47% in 1998 to 74% in 2010. In addition to the 23 towns gazetted as NSWC service areas, it also serves three other town centres within the peripheries of corporate areas of operation.

Currently, the corporation serves about 2.5m people with water services across the country. NSWC has now expanded from just 7 towns (Kampala, Entebbe, Jinja, Tororo, Masaka, Mbarara and Mbale) in 1982 to 23 urban centres. The other 16 are Soroti, Hoima, Masindi, Fortportal, Kasese, Bushenyi, Kabale and Iganga. Others are Malaba, Mukono, Lugazi, Gulu, Arua, Lira, Kaberamaido and Mubende.

Dr Muhairwe says that this growth shows the corporations’ effort in trying to reach out to as many customers as possible. He also notes that the introduction of a simplified new connection policy in 2004 and reduction of the water connection charges in 2005 from sh120,000 to sh50,000 bolstered the growth of new connections. It increased the customer base from 50,826 to 246,259 in 2010.

NWSC services have over the years extended their services to the urban poor in a move to continually address their rising needs across all towns. Some of the activities undertaken include; intensification of the network, establishment of public standposts and installation of yard taps within these settlements.

By June, 2010 the total of the standposts had reached 6,349. About 427 prepaid metres were installed in Kampala parishes like Kishenyi I and II, Ndeeba, Kawempe, Mengo and Kagugube and the cost of a 20 litre jerrycan reduced to sh20 from sh100.

NWSC has been able to expand its sewerage services by an average of 260 sewer connections per annum. Dr Muhairwe notes that this has been a result of the implementation of the new sewerage connection policy that took effect on July 1, 2006.


Uganda now funding 80% of its national budget

The 2011 general elections will be held next Friday. All the opinion polls conducted indicate a landslide victory for the National Resistance Movement (NRM). Godwin Ayesiga interviewed Mrs Mary Karooro Okurut, the NRM spokesperson about the progress of the party on the political and economic fronts. Below are the excerpts.

The 2011 general elections will be held next Friday. All the opinion polls conducted indicate a landslide victory for the National Resistance Movement (NRM). Godwin Ayesiga interviewed Mrs Mary Karooro Okurut, the NRM spokesperson about the progress of the party on the political and economic fronts. Below are the excerpts.

Describe the NRM party and tell the readers how many members you have currently.
The National Resistance Movement is a mass party. Therefore it is difficult to ascertain the number of its members because it grows on a daily basis. We get new members who cross from other political parties everyday. But what we know NRM has over nine million members.

How would you summarise the 25 years of NRM in power?
Very successful. We have seen the country move from stagnation into a fast growing economy. Twenty five years ago, Uganda was collecting sh5b in tax revenue, now the collection is sh500b.

With the improved performance of the economy, Uganda is now funding more that 80% of the national budget. All these are testimony of economic recovery.

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President Museveni addressing NRM supporters at Kazo on
Monday during his campaigns in Kampala this week

From a failed and pariah state before 1986, Uganda is now ranked among democracies where elections are held periodically, rule of law reigns and human rights are observed.

What key achievements has the NRM gained in the last five years?
Many. In the last five years we have discovered oil, a vital resource that will take the economy to another level. During the period we have attracted several investors whose investments have not only created jobs but also contributed to improved tax revenue.

The economy has performed well too due to laws in place and tighter controls that insulated Uganda from the global credit crunch. Inflation has been under tight control. Since 2005 we have successfully implemented Universal Secondary Education and increased the enrollment in secondary schools.

In terms of percentage, what fraction of the 2006 manifesto was implemented in the last five years?
Over 85% and the rest are ongoing.There have been media reports that NRM’s popularity has been diminishing since 1996.

By what margin will the party win the presidential race?
President Yoweri Museveni will win the race with over 70%. Forget your imagined diminishing popularity, you will be proved wrong because that was in the past. The reason for the declining percentages in the last two election were mainly as result of the Kony (rebel) conflict in the north and north east, and the lies that were told by the Forum for Democratic Change (FDC) that Museveni was going to grab people’s land.

The Kony conflict is over, people are no longer in camps and five years down the road FDC lies that Museveni was going to grab land have been proved untrue. Museveni popularity is a result of his and NRM’s track record.

What proportion of parliamentary seats is the party targeting to win?
The NRM as a strong party will win over 75% parliamentary seats.

What are some of the indicators of NRM’s victory in the next general elections?
The massive support. Have you attended any of President Museveni’s rallies? Haven’t you seen the mammoth crowds? We have a record that is attracting support. NRM is not like any other political groups that have nothing to show for to win over support.

All the programmes that we have been implementing like UPE, USE and liberalisation win people to our side. And also the prevailing security and stability; rule of law and observance of human rights earn us support.

Lastly the opinion polls have consistently indicated we are winning. The latest released by the Afrobarometer on Tuesday put Museveni at 65%. But of course he will garner more than that.

Briefly explain some of the key issues the NRM intends to address in the next five years?
We shall continue with all our programmes but the key thing will be improving service delivery. So expect better services and better delivery. For instance to improve education and health services we shall attend to teachers’ and health workers’ welfare as a means of improving quality.

In the power sector we shall complete the Bujagali power project which will significantly contribute towards meeting the country’s power needs. After that we shall embark on the more projects including Karuma which is already underway. NAADS is going to be moved to the village level to serve the people better.

Why did you choose the above issues?
These are issues that affect the people. People want efficient service delivery. And education, health and, agriculture and power directly affect them.

What does the NRM intend to do about its relationship with Mengo?
First of all, let me state this that relations between NRM and Buganda are good. It is only a few people in Mengo that are trying to drag the kingdom into partisan politics contrary to the Constitution. But I must add that it is in the interest of the NRM to have good relations with all sections of Uganda, Mengo inclusive.

There is a popular saying that “two heads are better that one”.

Isn’t the Inter-Party Co-operation (IPC) a threat to the NRM in the next general elections?
A threat? Not at all. IPC is facing a crisis of identity, it is a weak brand that wants to appear as coalition of all opposition parties but at the same times it postures as Forum for Democratic Change. So what is it? You can’t say such a brand can be a threat to a strong solid NRM brand. There is no threat at all.

In case the party lost the presidential race, would it concede defeat?
In the unlikely event that we lost we shall concede. But certainly we are winning with over 70%

There are some NRM members who are contesting as independents after being defeated in the party’s primaries. Isn’t this weakening the party’s support come the elections?
These are only a few members, and, as you know these issues are before court. But also the party has an internal mechanism for reconciliation.

Which assurance do you give to Ugandans that the upcoming general elections will not be marred by challenges the ruling party faced in the hotly contested primaries?
I can assure you there will be no violence. The security forces have worked out plans to avert any violence.

Given that the NRM primaries were characterised by infighting. How is the party intending to keep its members under a single umbrella?
NRM is a democratic organisation. As said above there is a reconciliation committee in place chaired the vice chairman of the party, Alhajji Moses Kigongo.

What is your final message to Ugandans?
On February 18 Ugandans should wake up early and go and vote. Not only vote but also vote wisely. This means vote President Yoweri Kaguta Museveni and NRM parliamentary contenders.


Tourism earned $600m last year

By Godwin Ayesiga

The tourism industry is one of the fastest growing sectors in the country. Some of the institutions through which the tourism sector is thriving include the Uganda Tourism Board, Wildlife Authority (UWA), a statutory body established by the Uganda Wildlife Act 2000 and the Uganda Wildlife Education Centre (UWEC) popularly known as "Entebbe Zoo".

Edwin Muzahura, the Uganda Tourism Board marketing manager says by 1986 most of the infrastructure of the tourism industry had crumbled and there were no tourists coming into the country.

With the abundant peace and security ushered in by the National Resistance Movement (NRM) government, the number of tourists.has increased.

According to media reports, in 2008, tourism earned $590m with 84,300 visitors. The report furthers says that today’s tourism sector employs 70,000 people directly while 300,000 people are employed indirectly in activities like handcraft.

According to the Uganda Tourism Board (UTB), there were 842, 000 arrivals in 2009, rising to over 900, 000 in 2010 which increased forex earnings from $165.3m in 2001 to over $600m.

The year 2007 gave extra mileage to the growth of the industry.CHOGM provided a unique opportunity to the country to market its potential to the rest of the world.

Consequently, the growth of the tourism sector could have been propelled by the improvement in the road infrastructure, renovation and construction of hotels that meet international standards, quality assurance and capacity building.

Following the NRM’s 2006 manifesto, the Government rebuilt the international airport at Entebbe and also contracted Italian and European companies to rehabilitate and build new tourist hotels in national parks.

Also put in place by the NRM Government is the Uganda Tourism Act 2008. This Act provides for the development of guidelines and regulations for the tourism sector.

Currently, Uganda has 10 national parks and 10 wildlife reserves, as well as a number of sanctuaries, each inhabited with a variety of wildlife that will provide the visitor a memorable experience.

Also in November 2007, the NRM government transferred the hotel and tourism Training institute from the ministry of education and sports to that of tourism, trade and industry.
Currently, the department of tourism in partnership with National Curriculum Development Centre and other relevant stakeholders are developing the hotel and tourism curriculum.
The NRM government has continued to develop and review plans, policies, laws and regulations for enabling the conservation of Uganda’s wildlife resource.

Some of the key steps taken towards conservation of the wildlife include rationalisation of the boundaries of wildlife protected areas, undertaking of wildlife conservation education in the northern and western parts of the country.

According to the status of implementation of the 2006 NRM manifesto released in September last year, the wildlife trade contributes about $3million per year to the national revenue.

The report further says that several resource extraction agreements have been signed around wildlife protected areas which has enabled communities to extract wildlife resources worth over sh10billion per year.

Baguma Cuthbert Balinda, the Uganda Tourism Board executive director says that tourism is today not only a key cornerstone of our economy contributing more than 12% to our Gross Domestic Product but goes a long way to foster unity and peaceful co-existence with nature.

Currently, tourism is Uganda’s second foreign exchange earner after the Ugandan labour force abroad. Even amidst financial meltdown in the US and European countries, Uganda’s tourism industry maintained its annual gross growth of 15%, emerging the fastest growing industry and contributing 24% of the total foreign exchange earnings.


Micro finance institutions help alleviate poverty

By Oyet Okwera

The banking sector has greatly contributed to Uganda’s financial coffers. Statistics available with Bank of Uganda (BOU)as per last year show that the country has now a total of 22 commercial banks.

Bank of Uganda (BOU) says the banking sector now dominates the financial sector as it facilitates the payment system and increased monetisation of the economy.

According to BOU’s communications department, banks and other financial institutions especially micro finance institutions have extended loans for trade and commerce.

Statistics indicate that financial guarantee by these financial institutions have contributed to development and GDP growth by over 6% in the past several years.

Elliot Mwebya, director, communications at BOU says non-banking financial institutions have greatly contributed to personal development of entrepreneurs in the country. The institutions through encouraging accessibility to loans have ensured that farmers especially prosper, as the country is still dependent on agriculture.
According to Mwebya, there are three credit institutions which are registered with BOU. These are Opportunity Uganda Limited, Merchantile Uganda Limited and Post Bank Uganda.

“BOU has also registered three Micro-Finance Deposit Taking Institutions; FINCA Uganda Limited, Pride Uganda Limited and Uganda Finance Trust,” he says.

Bank of Uganda has also ensured credibility of these financial institutions through off-site and on-site surveillance.
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BOU governor Tumusiime Mutebile cuts a tape to open a new branch of the Uganda Finance Trust in Katwa
According to a report, BOU supervisors are supposed to get written returns from the financial institutions on daily, weekly and monthly basis and study them to ascertain conformity.

According to Deo Kateizi, head of corporate affairs, micro-finance, the financial institutions have benefited Ugandans in a number of ways. He says emancipation of the economically active poor Ugandans through guaranteeing loans to clients without formal security has improved business.

“For example, we have extended access to financial services to over 230,000 formally ‘unbanked’ clients through our 29 net worked branches,” he states.

He says micro-finance institutions have imparted a culture of saving to clients through attractive savings products that have very attractive interest rates.

Kateizi says micro-finance clients are also benefiting from Small and Medium Enterprises (SMEs) through loan products targeting client education programmes. He says some of the loans available with micro-finance institutions include; group loans, salary loans, mortgage loans.

Irene Mwoyogwona, head of finance, Pride Microfinance adds: “The reason we at Pride Micro-Finance are involved in this sector is because we want to help people to overcome poverty.”

She says statistics available indicate that a fairly large proportion of Ugandans still live on less than $2 a day. This means that there is need for the country to embrace micro-finance institutions in order to help the economically active poor, she points out.

Work on Gulu-Juba road begins
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By John Njoroge (email the author)
Posted Wednesday, February 16 2011 at 00:00
Tarmacking of the 192km road from Gulu to Juba through Nimule has commenced. The project is funded by the United States Agency for International Development (Usaid) and the Southern Sudan government.

The Louis Berger Group Inc, through its three sub-contractors, Eyat Roads and Bridges, Gulsan Insaat and ANT Insaat, under the Sudan Infrastructure Services Project (SISP), are implementing the project on behalf of the South Sudan’s ministry of transport and roads.
Inaugurated on Friday, last week by the Southern Sudan President, Salva Kiir, and US Consul General to Juba, Ambassador R. Barrie Walkley, the road will be a vital link between Uganda and Juba.

“The Juba-Nimule road is Southern Sudan’s highest priority road. It links Juba with Uganda, and is the most efficient route to the Port of Mombasa in Kenya,” Ambassador Walkley said on Friday.

The construction will be conducted in two phases, with the initial phase beginning with the construction of seven bridges at multiple locations on the route. On completion, the Juba-Nimule road will be the first such facility to be constructed in southern Sudan since the signing of the Comprehensive Peace Agreement in 2005.

Businesses between Southern Sudan and neighbouring countries are also likely to spring up.
An estimated travel time between Juba and Nimule will be reduced from eight hours to about two hours.

More than 20 buses use this road every day between Kampala and Juba.
Uganda National Roads Authority (UNRA) Executive Director, Eng. Peter Ssebanakitta, said the construction of the Gulu-Atiak-Nimule section in Uganda was on schedule to commence in August 2011.

Shs70b mosquito net plant to start production in July
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Mr Sha shows President Museveni the plan of the industry. Photo by Yusuf Muziransa.

By Ephraim Kasozi (email the author)
Posted Wednesday, February 16 2011 at 00:00
A mosquito net producing plant has been commissioned in Uganda to reduce the country’s expenditure on importing nets to fight malaria.

The $30 million (about Shs70 billion) is one of the maiden industries to be constructed in Namanve Industrial Park. It is set to produce 2.4 million bed nets starting July this year.

“Production will increase to 4.2 million nets in five years. We are targeting to employ about 1,000 people and by 2015, over 5,000 jobs will be available for Ugandans,” said Mr Anuj Sha, the chief executive officer of the Tanzania-based company Plasnet Limited.

Mr Sha said the company would also venture into textile manufacturing, which would add value to Ugandan grown cotton under a 70,000 square meter built up space.

While launching the plant last week, President Yoweri Museveni assured Plasnet Industries of ready market for mosquito nets in Uganda.

Lake Kyoga gets sh6b ferry
Tuesday, 15th February, 2011
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By Samuel Balagadde

THE Uganda National Roads Authority (UNRA) has bought a sh6.5b ferry to ease transport and accessibility of districts around Lake Kyoga.

The 120-tonne vessel, which can accommodate 70 passengers and 12 cars, was supplied by Danish firm Johs Gram Hassen, Dan Alinange, the roads agency spokesperson, said.

Alinange revealed that the Government was buying more ferries as one of the interventions aimed at easing water transport.

The vessel will be stationed at Zengebe Landing Site in Nakasongola and will ply the Nakasongola-Namasale route.

It will serve Dokolo, Amolatar, Nakasongola, Lira and Soroti districts.

Alinange said the agency would buy more to promote water transport and development by improving accessibility of the islands in the country’s lakes.

During his visit to Kalangala last week, President Yoweri Museveni assured the residents that the Government would provide free ferry transport services. He, however, said they would have to pay to using MV Kalangala.

Bujagali first 50MW ready in Oct
Tuesday, 15th February, 2011
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Groth shows the German delegation part of the heavy equipment for the powerhouse
By Frank Mugabi

THE River Nile will for the second time in three years undergo a landmark diversion as construction of the 250MW Bujagali Hydropower project gets into its final stage.

Top Bujagali Energy officials, the major sponsors of the multi-billion project, said the diversion that begun yesterday would involve the blocking of the east waterway of the river to allow works commence on the right and final embankment.

“The west channel, which has been closed to river flow for the past three years to permit the construction of key structures, will be opened, while the east channel will be blocked upstream and downstream,” Bill Groth, the construction manager, said.

He noted that the water deflection activities that will take place for several weeks will eventually divert the entire river waters through the newly-constructed concrete spillway.

Once the river is diverted, the final phase of the construction will be achieved.

The river was first diverted in September 2007 to create a dry channel where the powerhouse would be erected.

About 90% of the structural concrete on the powerhouse has been completed, while almost all the required electrical mechanical equipment (98%) for it have been delivered on site, Groth said.

He described this as a “milestone” in the construction of the hydroelectric power project which is expected to double the generation capacity and reduce dependency on the costly thermal generation.

“This is an important phase because the powerhouse where the turbines are being installed is also approaching completion.

“We expect the first unit generation of 50MW around October, which again is a milestone in this project,” Groth disclosed.

He added that after the first unit goes online, the remaining four units of 50 MW each will be commissioned consecutively after thorough tests.

The project is expected to be fully commissioned by April 2012.

Groth revealed that 75% of the total project is complete with 95% of the switchyard civil works done and 75% of the electromechanical works accomplished.

Groth urged rafters, kayakers, boaters, swimmers, fishermen and tour operators using the Upper Nile River to avoid the diversion area as the river flow will be highly turbulent and unpredictable during the water diversion.

“After February 15, it will not be possible to travel down the river past the project site.

“For safety reasons, we advise all users to exit the river well upstream of the diversion area,” he said.

The deputy construction manager, Kenneth Kaheru, allayed fears that rafting, which is popular with tourists, would come to a complete end with the river diversion.

He said the rafting activities would move to downstream at the Kalagala offset which is being developed as a recreation and tourist attraction.

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Salva Kiir flags Gulu-Juba road works
Wednesday, 16th February, 2011
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Southern Sudan president Salva Kiir with PPDA boss, Peter Ssebanakitta and the Uganda Road Fund’s Eng. Michael Odongo at the launch
By Vision Reporter

CONSTRUCTION work on the Gulu–Nimule-Juba road has started.

“When completed, the road will boost business in the region. It will also reduce travel time between Juba and Nimule from eight hours to about 2½ hours,” Salva Kiir Mayardit, the president of Southern Sudan, said while launching the project at Aswa Bridge last week.

Kiir added that it would be the first main tarmack road to be constructed in the south since the signing of the Comprehensive Peace Agreement in 2005.

The Nimule-Juba section of the road will be funded by the United States Agency for International Development and the government of Southern Sudan, while the World Bank and JICA will fund the Uganda section.

Eng. Peter Ssebanakitta, the executive director of Uganda National Roads Authority, said the 104km section, from Gulu through Atiak to Nimule, would commence in August.

Tens of commercial vehicles, especially buses and heavy trucks, travel between Kampala and Juba daily.

The Louis Berger Group, through its three sub-contractors Eyat Roads and Bridges, Gulsan Insaat and ANT Insaat, will implement the works under the Sudan Infrastructure Services Project.

The first phase of the project involved a feasibility study, engineering studies, repairing of the existing bridges and de-mining the Nimule-Juba section.

The second phase will be upgrading the road to tarmack.


Time to invest in schools
Wednesday, 16th February, 2011
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By Conan Businge

WITH thousands of teachers to be recruited and promoted, free A’ level education starting, an increase in university sponsorship by Government, and hundreds of schools set for upgrading; it might be the best year in a decade.

It is a year of massive investment. Teachers have about sh1b to share on their salary rise after promotions, sh85b will go to the planned free A’ level education, and sh330b for upgrading of 217 schools in the country.

Like the previous years, Government will spend about sh530b on free primary education, and about sh110b on free secondary education.

In addition to about 4,000 students who get university sponsorship annually, more 2,000 will in August this year; bring the number to 6,000 students. Individuals and companies in the publishing, laboratory stores and construction industry have a great year to embrace. This does not negate teachers, lecturers and private investors in education institutions.

The 217 schools to be upgraded are among the 1,400 secondary schools in semi-urban and rural areas in Uganda which will benefit from the World Bank project in years to come; all aimed at promoting secondary education in the country.

The funds will be used to
construct; 4,297 new classrooms, 41 administrative blocks, 144 libraries, 405 science rooms, 71 teachers’ houses, and 2,296 five-stance latrines. An additional 1,864 classrooms which were already under construction will also be completed.

All the schools under the project will also receive science kits and chemical reagents, and 1.7 million textbooks for the seven core subjects will be procured. Government also plans to construct a seed school in every sub-county.

Apart from free primary and secondary education; business, technical and vocational Education shall also be free. That means the future of most of the 350,000 Senior Four candidates this year; the first products of the Universal Secondary Education (USE) programme, is secure.

Twenty one technical institutes will also be built in this year. They will be in Amuria, Hoima, Kamuli, Masaka, Ntungamo and Mukono, Kitagwenda, Nakaseke, Kyeizoba, Bumbeire and Kyabugimbi. The other areas include Nakasongola, Namutumba, Pader, Yumbe, Kiboga, Bukedea, Kyenjojo, Lyantonde and Adjumani. Lt. Col Nasur Amin Memorial Institute will be one of the new institutes.

Two more institutes will be constructed in 2012/2013, and thereafter, one new institute will be constructed annually. Government also plans to increase funding at the higher levels of education; public universities will be expanded.

There are about 233,431 teachers in the country. Of these, there are about 152,682 teachers on the Government payroll in primary and secondary schools.

The rest work in Government secondary schools. Of these, 4,000 Grade III primary teachers and 1,000 Grade V teachers on the Government payroll are in line to be promoted.
Meanwhile, Uganda is also increasingly becoming a hub of investment in private schools. With the recently released O’ level examinations, it is clear that private schools are now favourably competing with the traditional schools for the country’s top slots in performance. With the Government liberalising the education sector, investing in education is a real big deal now.
Private schools like Turkish Light Academy, St. Mary’s Kitende, Seeta High School, London College of St. Lawrence, SOS Hermann Gmeiner SS and Merryland High School, and Entebbe are some of the best private schools in the country.
They were among the top 40 schools on the percentage of the candidates who attained first grades in last year’s ordinary level examinations. But these are just a few of the thousands of private schools in the country who are reaping big in increased enrolments due to their good performance in national examinations. There are already about 700 private schools promoting the USE programme, with assistance from Government; giving them an opportunity to develop faster.
Education is one of Government’s key sectors and has continued to receive priority in resource allocation. The education sector has recorded tremendous successes in a number of areas in the past years, due to the continued government support.
The country is witnessing a progress of reforms in the sector with free education outshining all the rest. All the reforms seem to be set on a river-course which has ‘rapids and falls’ ready to tilt the boat.
A number of things are deemed to change this year. Government is endeavouring to make sure teachers and pupils stay in class as timetabled and that more students access free education.
The new plans create a massive and likeable picture for the education sector next year. We have got to brace them, but also remember that they are very costly ventures.
More so, a new curriculum for primary six has to begin this year. This is a step further from the thematic, and middle primary, and secondary schools’ curriculums which were revised of recent. The implementation and concretising of these curriculums in the country’s education sector is meant to significantly rebuild a new breed of skilled and enterprising graduates.
In Uganda, the potential of primary education, as an engine of economic and social development was recognised right from independence in 1962.


Will URA hit sh5 trillion target?
Wednesday, 16th February, 2011
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Allen Kagina
By David Mugabe

UGANDA Revenue Authority (URA) is confident that it will meet the sh5.03 trillion tax target set by government at the beginning of the 2010/2011 financial year despite collections falling below target in the first six months.

A thorough combing of Kampala roads to identify and collect rental tax, continuous emphasis on e-tax application especially on non-tax revenue departments like the passport office, court bail and stamp duty are some of the key sources and strategies the tax authority intends to use to hit this target.

The other measure will be publishing tax defaulters.

Although collections from the first six months did not hit the half way value of over sh2.5 trillion, the tax collector is buoyed by the January surplus performance that has wiped out the entire six months deficit recorded from July to December. The January performance was above target by sh47.32b while half year deficits were sh29.8b. This means in the first seven months, the tax authority has a surplus of sh17b.

URA commissioner general, Allen Kagina, is optimistic that with more focus on ensuring compliance, the target will be met.

“Yes certainly as at end of January we collected a cumulative surplus of sh17b, we are still on course,” she said.

URA collected sh2.46 trillion in the first half of 2010/2011 against set targets of sh2.49 trillion, which was a deficit of sh29.8b.

With government pushing to reduce reliance on budget donor financing from 32% in 2009/2010 to 25% in 2010/2011, URA has had to bear the burden of pulling in more revenue.

Government tasked URA to collect sh5.03 trillion up from sh4.3trillion in 2009/2010 during the reading of the budget.

Much of the efforts aimed at achieving this target have largely been through improving tax administration and especially through tax payer education to ensure deeper penetration of the e-tax system.

Kagina also disclosed that URA is slowly developing the capacity to monitor tax compliance within the telecom sector especially with support from Kenya. Telecoms are the biggest tax payers in the country but there have been concerns that some players may have been under-paying taxes, a problem compounded by URA’s weak capacity to monitor this sector.


Standards body lacks technology to test petroleum products
Wednesday, 16th February, 2011
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Tukwasibwe and Mariera at the opening of the station recently
By David Ssempijja

THE Uganda National Bureau of Standards (UNBS) wants the Government to establish a modern laboratory that can build the body’s capacity to test the quality of petroleum products.

UNBS executive director Dr. Terry Kahuma said the body’s current role in the petroleum industry is to oversee quantities of petrol sold at stations, adding that their testing equipment is below the required standards.

“We have no technology to enforce quality standards of petroleum products, yet the industry is growing at a fast rate. This calls for Government’s immediate response in providing facilities suitable for an oil rich nation like Uganda,” he said.

Kahuma was addressing journalists during the opening of Petro Uganda’s Kitante service station on Yusuf Lule Road in Kampala last week.

“We are aware that the market is flooded with substandard petroleum products like petrol mixed with water and recycled lubricants. Diesel is sometimes mixed with paraffin, but we cannot hold the culprits accountable because UNBS cannot subject these products to chemical tests,” he said.

Kahuma expressed dissatisfaction with the judicial system, which he said had failed to institute punitive and deterrent fines against those who put counterfeit petroleum products on the market.

“Its demoralising that we apprehend offenders with fake products worth hundreds of millions of shillings but courts fine them not more than sh40,000,” he said.

State minister for energy Simon D’Ujanga said the Government would get rid of all illegal operators and ensure that players observe the provisions of the 2003 Petroleum Act.

The Act seeks to ensure a streamlined petroleum licencing programme.

“Only licenced operators will remain in the sector for better service delivery,” he said in a speech read by the commissioner for petroleum, Rev. Frank Tukwasibwe.

Isaac Mariera, the Petro Uganda country manager, commended the Government for ensuring security of business, which he said was a key requirement for investments to prosper.

Uganda to export banana products
Wednesday, 16th February, 2011
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By Richard Olwenyi

BANANA farmers have been licenced to process and sell banana products worldwide.

The Uganda National Bureau of Standards (UNBS) quality assurance manager, Gyaviira Musoke, urged farmers to maintain high standard of quality that can compete favourably in the international market.

He was presenting the UNBS quality mark to the farmers at the Presidential Initiative on Banana Industrial Development in Kampala

The licenced farmers included Kibinge Farmers’ Association from Mbarara, and other associations from matooke producing districts such as Masaka and Bushenyi.

“We have the best matooke in the world. Let us process it well and take advantage of the virgin market,” Musoke said.

He said the certification allowed banana farmers to process banana flour for direct export, provided it is within the valid standards set by the bureau.

Musoke added that UNBS regional offices had been tasked to monitor the processing of the banana products.


Dollar, weather determine power supply
Wednesday, 16th February, 2011
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By Ibrahim Kasita

SMALL and medium businesses that cannot afford to install stand-by generators have expressed concern over the unexpected power cuts.

Even the large businesses that can afford alternative power supply have complained about the high cost of fuel used to run generators.

The past few years have been difficult for electricity consumers in Uganda. The long drought of 2004/2007 meant that 60% of electricity supply depended on diesel generators.

A litre of diesel has gone up to sh2,700, up from sh2,500 in the past three months.

This is considered in the computation of the power price.

The continued weakening of the shilling against major foreign currencies, especially the dollar and the euro has had a huge impact on the diesel-generated electricity.

This year alone, the shilling depreciated against the dollar to an average of sh2,310 from the budgetary rate of sh1,874.

This has forced the Central Bank to inject more dollars in the market.

Domestic electricity consumers pay sh385 per unit, while tariffs for street lighting are sh364 per unit.

Commercial users, including business premises, pay sh358 per unit, while medium industrial consumers pay sh333 for every unit used. Large industries pay sh187 per unit.

The electricity regulatory authority boss, Benon Mutambi, explained that the overall objective is to ensure that tariffs are competitive.

Godfrey Ssali, a small businessman in Kampala, said he pays a lot of money for little electricity.

“You cannot expect me to fight poverty yet my business is suffocated,” Ssali said.

“Electricity has raised the cost of doing business,” he added.

Analysts say Uganda’s power crisis erodes about 1.5% gross domestic products – goods and services produced in a specified year - in lost business opportunities, and weakens competitiveness in attracting fresh investments.

Thermal power production accounts for close to 200MW. Aggreko in Jinja produces 50MW, Mutundwe, 50MW, Namanve, 50MW, Electromaxx, 20MW and Albatros will soon start producing 10MW in Arua.

This means that diesel-powered thermal generators contribute to over 60% of Uganda’s power, a situation that has contributed to high power prices, escalating the high costs of doing business.

“The challenge is the rapid changes in fuel market prices,” said Hajj Elias Kiyemba, the Uganda Electricity Transmission Company (UETCL) managing director.

“This is because 73% to 83% of the purchase costs are attributable to thermal supply costs, which are also denominated in foreign currencies.”

“Continued delay in commissioning of cheaper alternative generation plants to substitute the expensive thermal diesel plants has remained a big challenge,” Kiyemba explained.

Uganda electricity tariffs are determined by inflation, foreign exchange, system losses, fuel prices and weather.

Hydropower production from the Jinja complex of Nalubaale and Kiira power stations has continued to an average of 200MW, depending on the rains.

When there are good rains, more power is generated.

The two power stations, with an installation capacity of 380MW, have been operating at less than full capacity for about six years. This has been due to the usual fall in water levels on Africa’s largest fresh water body.

“We understand consumer frustration. That is why we are inviting them to comment on the proposed tariff review submitted by the power utility companies,” Mutambi said.

“Companies should not make super profits and leave consumers suffering. The overall objective is to ensure that tariffs are competitive.”

However, Uganda is set to tackle the crippling electricity supply shortage.

The improvement of systems losses to 30% from 38% five years ago has slightly improved the quality of services and ensured that power tariffs remain stable.

Down the river from Nalubaale and Kiira, the Bujagali power dam should generate its first 50MW in November.

There will also be other small hydropower stations that will provide more than 50MW.

These include Bugoye, which is expected to generate 8.3MW, Hydromax Buseruka, 9MW, Ishasha Ecopower, 6.5MW and Mpanga, 18MW.

Construction of the 700MW Karuma hydropower project is expected to start early next year. The dam is considered to be one of the high priority projects in the five-year national development plan.

Water-based power projects will provide more reliable supplies and friendlier bills for consumers, as comparative analysis indicates that hydropower is three times cheaper than thermal power in the long run.

Uganda also hopes to increase power generation from renewable sources.

Sugar companies, Kakira and Kinyara, are producing electricity from cane waste.

There has also been an increased search for alternative sources of energy, including the utilisation of mini-hydro stations, generation of power from garbage and solar-thermal projects. Many of the reforms have yielded positive results.

The rise in power supply means that local industries and small and medium enterprises will be competitive in the East African Community common market.

But as more hydropower comes on board, Government subsidy on the power sector will be reduced and directed at getting more hydropower projects going for the long term sustainability of electricity supply.

Sorting out the country’s power problems is vital as the economy struggles to compete with Kenya and Tanzania for a sizeable share in the regional common market.

The biggest indirect cost to firms operating in Uganda is disruptions in power supply.

Attracting foreign investors will be hard since electricity prices are still high compared to the neighbouring economies.

Namulonge introduces high yielding, quick maturing crops

By John Kasozi and Juliet Waiswa

By the 1980s, little research was being car*ried out in the country despite the existence of research centres like the Na*tional Crops Resources Research Institute (NaCRRI). There were no new innovations on crops and animal husbandry. Today, the trend has changed.

NaCRRI, formerly Namulonge Agricultural and Animal Produc*tion Research Institute (NAAPRI) was established in 1949, but today it serves as the research centre for almost all crops grown in Africa.

Uganda was chosen as the regional centre because it was centrally placed and with the ex*ception of India, Uganda was the largest producer of cotton among the Commonwealth countries.

The institute continued as a cotton research station until the 1980’s when research on other commodity crops and animal production was introduced. Research started being done on maize, cassava, sweet potato, rice, soybean, sunflower, ground*nuts, simsim.

Dr. Godfrey Asea, the assist*ant executive director and also a plant breeder/team leader of the cereal research programme says, there has been a lot of research work done at NaCRRI.

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A farmer in his garden at Mubuku Irrigation Scheme, in Kasese. Varieties of high yielding maize have been introduced

On maize research in particular, three drought-tolerant varieties, Longe 9H, Longe 10H and Longe 11H have been introduced. The three Longe varieties mature in 120 days, give high yields and are pest resistant. They are ideal for mid-latitude and thrives under under drought conditions.

“Last year, we released MM3, the extra early maturing maize variety that gets ready in 90 days. We hope this will address the short rains experienced in Karamoja of less than 1,000mm of rainfall per annum,” says Asea.

Namulonge is also developing high quality protein maize (Longe 5-Nalongo and Ssalongo Hybrid), which have higher levels of es*sential amino acids and tasty flour. Asea says these will be on the market next year. Currently, on the market is Longe 5H.

Asea explains that the maize seeds are multiplied by seed companies.

“The farmers will be able to buy Longe 9H from FICA, Longe 10H from NASECO and Longe 11H from CAII found in Iganga in eastern Uganda.

“We have also new upland rice varieties that are drought resistant. These are Suparica 1 “white”, NERICA 4 “Gold” and NERICA 10. These mature between three to four months,” he says.

Suparica 1 has long aromatic grain, excellent milling ability and performs on poor soils yield*ing about two to three tonnes per acre. NERICA 4 has bold aromatic grain and has excellent milling ability while NERICA 10 spikes mature early and cannot be bird damaged by birds.

Asea reveals that research activities in the institute are carried out under commodity programmes and units. Currently there are seven programmes. These are cassava, coffee, oil palm, cocoa, tea and coffee; beans; banana; cereals that include maize and rice and hor*ticulture which include fruit trees and foliage.

The institute has also intro*duced agroforestry research. In addition, Namulonge supervises the collection of weather data as well as processing and transmis*sion of the information to the Department of Meteorology and Agriculture.

Under the present mandate af*ter re-organisation of agricultural research and the creation of the National Agricultural Research Organisation (NARO), Namulonge will become one of its research institutes.

The National Agricultural and Animal Research Institute (NAARI) has now a national mandate to generate and dis*seminate improved technologies of crops which include beans, cassava, cereals (maize and rice), sweet potato and animal production. The institute carries out research in biological control of crop pests and weeds and on agro-meteorology.

Asea, however, reveals that there is limited research on soybean. The institute runs an outreach programme managed by the RELO (Research Extension Liaison Office) which co-ordi*nates research activities between the scientists and the farmers, non-government organisations and other clients.

Asea adds that the purpose of Namulonge is to increase productivity of crop and livestock production. Specific objectives are genetic improvement, pest and disease control, the man*agement of mandate crops and feeding resource development and management for livestock.

The mandate crops of Namu*longe are among the most im*portant commodities in Uganda

Research on coffee and tree crops is undertaken in Kituza Re*search Centre in Mukono district. The institute emphasises partici*patory research which involves farmers (and other clients) at all levels of technology generation and development.

Asea reveals that since NARO started the institute, it has had several achievements. The most significant achievement of this institute has been the control of the cassava mosaic disease (CMD) and restoration of cas*sava production in the country.

Today in some parts of eastern Uganda there is an over produc*tion of cassava which has been a result of the control of the disease and a release of high yielding mosaic resistant varieties by this institute.

To date the cassava programme has released nine varieties (NASE 1-4) which are widely adopted in the country. The re*sistant varieties were accompa*nied by packages on agronomic practices, disease and insect pest control.

On the improvement of rice, disease resistant varieties of Abilony, UK 2, NP 2, and NP 3 have been developed. Re*cently, the agriculture minister, Hope Mwesigye reaffirmed that Uganda would surpass 400,000 metric tonnes of rice by 2015 and by 2018, the production would have tripled.

Mwesigye said plans are un*derway to construct seven rice irrigation schemes to increase production.

“The government considers it as a priority crop to alleviate poverty. That is why we have now put in place the Uganda National Rice Development Strategy,” she said.

“Rice is an important cash and food crop for food security and income creation. It has been earmarked among other crops to earn sh20m per annum for each homestead,” Mwesigye pointed out.

Namulonge is expected to de*velop the capacity of the rice in*dustry and contribute to NERICA rice improvement in Uganda and boost the income of eastern and southern African farmers.



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Uganda shelves pipeline plan

By Esther Nakkazi (email the author)
Posted Friday, February 18 2011 at 00:00
Kampala

Uganda shelved indefinitely the option to transport its crude oil using a pipeline through either Kenya or Tanzania, now concentrating on a refinery. But there are schools of thought that argue that Uganda might rescind this decision because it will eventually suffer from ‘excess capacity’ of crude with a small local market for its products.

Uganda’s decision to take on a refinery bases on a cost analysis study that established that laying a 1,325-kilometre pipeline to transport the crude would be more costly, at $2 billion compared to $1.6 billion for building a phrased refinery.

The phased development of the refinery will start with a mini 20, 000 barrels per day refinery upgraded to 60,000 and finally 120,000 barrels per day. “I am against building a refinery that exceeds local demand. There should be a balance between local demand and production,” said Joel R. Couse, the vice president for market analysis, Total SA during the oil conference in Kampala. Couse argued that Uganda would suffer from excess capacity- an imbalance between crude and local demand at a time when the world refinery activity is stagnant since 2006. Refining the crude elsewhere would maximize profits.

Currently, Uganda’s demand is 11, 000 barrels per day (bbl/d) and only expected to reach up to 15,000 bbl/d in the next 5 years. The east African region demand is about 130,000 bbl/d against 120,000 bbl/d that will be produced when the refinery will be operating at full capacity. At this rate excess crude would be 10,000 bbl/d over demand in the region. And, that is with the assumption of no more fields discovered.

Already, Robert Kasande, the deputy commissioner in the petroleum and exploration department said appraisal is still going on and more fields with deposits will be found. This will leave Uganda with excess crude that cannot be refined thus ‘excess capacity.’ With this the only solution could be the pipeline so it is argued. “Pipelines are the most reliable. We must be competitive if we are to reap from the reserves we have,” said Selest Kilinda, the managing director Kenya Pipeline Company Limited (KPCL).

Mr. Kilinda encouraged Uganda to use the pipeline option to transport its crude to Mombasa saying KPLC is reliable, has a right of way in the region and it is one of the cheapest pipelines worldwide with a less than 5 percent tariff. In other wards ‘KPCL was the answer to value addition’ for Uganda’s crude oil. And to crown it all so investors do not run away from Uganda’s oil sector, Sir Richard Kaijuka, former minister of energy said Uganda should desist from touting only the refinery option, which, industry players may think is an end in itself yet ‘it was a modest approach and not holistic’.

Indeed, the refinery could be an end in itself for Uganda, which is determined not to ‘donate value’ as the President Yoweri Museveni keeps reiterating. Already Uganda has invited other East Africa Community countries to invest in the refinery. Besides it would fetch more revenue, $2.6 billion per year compared to $1.3 billion from the pipeline that also poses enormous challenges given the type of Uganda’s crude oil.

According to experts, Uganda has a ‘sweet crude’ with low sulphur under 0.5 percent per weight, quick and easy to refine and its gasoline and jet fuel products fetch a premium on the world market. Under the American Petroleum Institute (API) it would be benchmarked against the North Sea Brent API, which fetches $1 more than the OPEC basket. But it is also ‘waxy’ which would require a 14-inch pipeline to be transported and it would be heated up every 50 metres, incurring enormous friction losses and a heavy investment.

Banks intensify branch growth to raise customer base
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By Faridah Kulabako (email the author)
Posted Friday, February 18 2011 at 00:00
Kampala

The race to bring on board the unbanked population is gathering pace among commercial banks after realising that low income earners have potential to grow revenues and customer base.
Almost all the 23 banks in Uganda are investing heavily in expanding their branch networks to reach out to people especially those in rural areas who had previously been ignored, in a bid to bring the unbanked in those areas on board.

All these branch expansions, however, have mainly been on the mainland, leaving out the population living on Islands. However, in a bid to cater for the financial needs of the underserved people on Islands, Post Bank is in advanced stages of extending its services to Koome Island to enable fishermen from the surrounding communities to access financial services.

Almost 95 per cent of about 2,700 people living on Koome Island keep their money under mattresses since the nearest bank branch is in Entebbe, 21 kilometers away, making it inaccessible to many.

Mr Christopher Kigenyi, Post Bank executive director told Daily Monitor in an interview that competition in the corporate customer segment has forced banks to consider bringing on board small businesses to boost revenues. “It’s better to have many small businesses and get more revenue than getting corporates who tend to negotiate on price,” he said at Koome Island on Tuesday.

Majority unbanked
Out of a population of 32 million, only about three million Ugandans have bank accounts, meaning that banks have a huge potential to tap by innovating products that suit Uganda’s rural poor. Post bank has 31 branches across the country but Mr Kigenyi said that the bank’s strategy is to have a Post bank unit in all the 112 districts in Uganda.

Although mobile money has been widely adopted by most people even in the remote village on the mainland, people on this Island despite having mobile phones, have never used the mobile money platform to save, send or receive money. Mr Kigeny, however, said low banking levels due to financial illiteracy and high operational costs are still an obstacle to the industry.


Tourism thrives despite polls anxiety
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By Isaac Khisa (email the author)
Posted Friday, February 18 2011 at 00:00
Kampala

It is barely three months since Uganda experienced adverse effects of Europe’s snow-induced air traffic that snarled to spoil a key tourism season for East Africa, where hundreds of thousands traditionally flock for the festive season. But as the countrygoes to the polls in view of the previous tensions in Tunisia and Egypt that led to ousting of Zine el-Abidine Ben Ali and Hosni Mubarak respectively, the tourism sector is optimistic that it would return to its path.

Mr Cuthbert Baguma, the executive director Uganda Tourism Board, told Daily Monitor that the country is still experiencing an influx of tourists irrespective of elections because it has not been negatively depicted on the international media since the onset of campaigns. “Apparently everything is going on normally, we have not received cases of travel cancellation,” Mr Baguma said adding that the tourism sector is optimistic that a high number of tourists will be recorded after the ongoing general elections.

Civil Aviation Authority spokesperson, Mr Ignie Igunbuura said planes are entering and leaving the country normally. The Uganda’s tourism sector contributes 8 per cent of Uganda’s Gross Domestic Product and is seen as one of the sectors with the most promising growth prospects; and government has often kept it on the back burner in its budgeting processes.

Foreign exchange source
The earnings from Uganda’s sector has been increasing over the past years, from $165.3m in 2001 to over $600m by 2009, making the industry a robust source of foreign exchange, according to UTB statistics.

This follows the growth of visitors from 205,287 to 817,000 over the past 10 years. The board points to relative peace, aggressive marketing through promotions and trade fairs as the reasons for the increased visitations. At 51,812 visitors, the UK emerged the top Western country sending tourists to Uganda, followed by the US (42,418), while Sweden sent the least visitors (4,575).

India brought in (16,238), Canada (9,186), Germany (8, 083), Netherlands (7,136), China (6,088), Australia (5,342) and Italy (5,063). In Africa, Kenya’s 249,786 was the continent’s biggest number, followed by Rwanda (181,339) while Somalia’s 5,096 visitors was the least.

Others
Tanzania sent 45,278 visitors, Burundi (38,177), Democratic Republic of Congo (25,774), South Africa (18,275), Sudan (16,169), DR Congo (12,495) and Ethiopia (5,096). UTB says tourists usually enter the country to experience culture, visit national parks, and do all sorts of unique activities on offer.

Five large power projects kick off
Thursday, 17th February, 2011
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By MILTON OLUPOT

THE Government has commissioned five large grid extension projects under the rural electrification project in the last two years.

The projects are part of the hundreds of programmes implemented through Umeme and the Uganda Electricity Distribution Company Limited (UEDCL) at over sh200b.

According to the February report on the implementation of rural electrification projects, large grid extension projects worth sh9b were commissioned during the 2009/2010 financial year. These were all government-funded.

They include ensuring power supply to Oyam district headquarters and the surrounding areas; to Gulu youth centre; Kirewa and Aisha Girls High School in Gulu, Mbarara and Tororo districts.

Other areas to be connected to the grid are Kalangala town council, Ssese Beach Hotel and Mwena landing site in Kalangala district; Katine-Lwala line in Kaberamaido and Rugyeyo town council and Savana Hotel in Kanungu.

According to the report, 78 other small schemes worth billions of shillings implemented through Umeme and UEDCL were also commissioned in the last financial year.

Construction contracts for six fast-track projects were signed on August 6, 2010. The works started on August 13 and are expected to be commissioned in November.

Over sh100b has been re-allocated from the energy fund for the Sirono-Nakapiripirit-Amudat, Katakwi-Moroto, Lwala-Kaberamaido-Amolatar, and Lwala-Dokolo projects.

Cotton prices hit record high
Thursday, 17th February, 2011
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Men packing cotton at Nyakatonzi Cooperative Union in Kasese recently
By IBRAHIM KASITA
and CHRIS MUGASHA

COTTON prices have hit record highs again, raising prospects of better household income for farmers and improved export revenue this year. The prices jumped to sh2,500, up from sh1,600 a kilogramme.

Farmers say middlemen are willing to pay high prices because their aim is to get big volumes to sell to the international markets where “super profits” are made.

Joseph Muryagasu, a Kasese-based farmer, said they were getting better returns as a result of increase in prices. He said prices had been stagnant for almost 15 years.

“This will boost farmers morale to grow more cotton,” Jolly Sabune, the Cotton Development Organisation head, said in an interview recently.

She explained that the rise was due to increased worldwide demand, adding that there were shortages in other countries.

Recent climate change disasters have wrecked havoc in the leading cotton producing nations, the US, China and Pakistan.

India, the world’s second largest cotton growing nation, has stopped lint exports to stimulate local consumer demand and strengthen its textile industry.

The price increase has not been seen since the American Civil War (1861–1865), when shipment of the crop was stopped, according to experts.

“Despite out-of-season drought in the south-western region, we expect to produce 130,000 bells this year, up from 70,000 bells last year.
“This will translate to sh90.7b household income. Export revenue will amount to $73.4m (about sh171b),” Sabune said.

Uganda’s cotton industry is stabilising, especially after the restoration of peace in northern Uganda, a traditional cotton growing region.

The cotton regulatory body has intervened to support farmers by supplying high-quality seeds and pesticides at affordable prices.

But Sabune called for the development of a vibrant spinning and textile industry to absorb the raw cotton, arguing that value-addition would ensure better returns to farmers.


Ugandan oil region weary of future
Thursday, 17th February, 2011
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LAKE ALBERT

A track of seared orange leads through burnished yellow fields then gives way to a patchwork of brilliant green treetops and sugarcane farms, as the glistening blue water of Uganda’s Lake Albert appears.

But attention has focused on this remote part of the east African country because of efforts to extract something with a much darker hue than its multi-toned earth: oil.

With presidential and parliamentary elections today set to decide who will guide the country through its emergence as a Top 50 oil producer the stakes could not be higher in what has become a fierce and bitter tussle.

Posters of President Yoweri Museveni and his main rival Kizza Besigye plaster every available wall in the few small towns that sit on the Ugandan shore of the huge lake that is shared with DR Congo.

Locals say they do not know much about oil, they are not sure how it will benefit them, if at all, and that it is unlikely to influence their voting choices.

“The oil business is a pocket business for Museveni and his family,” says opposition candidate Bbiira Kiwanuka, touching on corruption, the biggest election issue and a constant worry for foreign oil firms investing in Uganda.
Other opposition candidates say that if the impending petrodollars do not filter down to the most desperately poor locals, they will despise the companies.

Bulisa, a shabby town in a mainly farming district, has not changed much since oil was discovered in the area five years ago, though the signage on one small building looks more polished than the rest: “Tullow Oil Uganda.”

British-based Tullow Oil is the lead explorer in Uganda and says despite a tax row with the Government it will start oil and gas production in 2012.

A dirt road leads about 6km (four miles) from the Tullow office to a giant drill, its dull thud sounding over the plains.

White oil workers decked out in high-tech gear file in for the night shift past a boy herding goats into a wattle and daub hut.

In Masindi, a nearby town housing both Besigye’s Inter-Party Cooperation (IPC) and ruling National Resistance Movement (NRM) offices, NRM candidate Ernest Kiize says the newly-discovered wealth will benefit everybody.

“Oil will be good for people,” he says at the local radio station he owns, surrounded by photos of a smiling Museveni.

“Corruption is there in Uganda, yes, but the Police and the Government are doing their jobs and fighting it.”
Five minutes across town, candidates and members of the four-party IPC coalition readily admit they are stronger in towns than the countryside, where about 80% of Uganda’s estimated 33 million people live.

They claim the NRM is using a massive election war chest to buy the votes of the rural poor sometimes with just a bag of sugar, a bar of soap or a T-shirt and to bribe opposition politicians into stepping aside or joining them.
Opposition activists also say rural people have been frightened by the Government.

As they speak, a fighter jet buzzes low over the town, the roar of its engines drawing people from the shade as it banks right and soars over a row of shops.

Opposition candidate Isaac Kanyaamu, eyes wide with rage, steps forward: “It started appearing two weeks ago,” he says.
“Officials are going door-to-door and saying, ‘Look at that jet up there.“If we lose the elections you will be bombed’.”

Though they say it is a close race, most analysts expect Museveni to win despite a fierce challenge from Besigye, who has lost to the President in two previous polls.

But Besigye has worried foreign investors and donors by pledging to release his own tally of the results and, if they do not match official figures, he promises his supporters will cause “chaos” in the country.
He insists he was cheated of victory before and says Supreme Court rulings were wrong and biased.

The Court admitted the 2001 and 2006 elections were marred by vote-rigging but said it was not sufficient to affect the overall results.

The fiery 54-year-old now often compares Uganda, where Museveni marked 25 years in power last month, to Egypt and Tunisia ahead of their uprisings that have rocked the Arab World since the start of the year.

Along the 300km route from capital Kampala to the oil-rich lake region, there is a clear divide between urban and rural voters.

People in towns say they are more likely to vote for the opposition, but the often very poor living in villages favour the ruling party.

Many cite stability as the reason they will chose Museveni.
After independence from Britain in 1962, Uganda entered a period of civil wars and rule by feared despots such as Idi Amin before Museveni seized power after a five-year guerrilla war.

“We can move freely,” a woman tending a rural banana stall says, as others chorus their approval. “Other leaders before, especially Idi, killed people.

“Museveni has not killed many. Why try a new president who might?”

Technology boosts bill payments
Sunday, 20th February, 2011
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A NWSC employee, Muhairwe and Elazzabi, the utl boss, show how to pay bills via M-Sente
By David Mugabe
THE use of technology in settling utility bills is taking root, saving consumers time and money.

The latest application is the partnership between utility operator, the National Water and Sewerage Corporation (NWSC) and uganda telecom in which consumers will directly pay for their bills using utl’s M-Sente mobile money platform or instruct their banks to remit money to the NWSC accounts.

The service also offered by MTN mobile money and Airtel’s cash is used for pay TV subscription and shopping in selected in retail stores.

National water chief, Dr. William Muhairwe, said the development will allow the utility firm to concentrate on its core role of providing water.

NWSC is phasing out cash offices, opting for mobile money, mobile banking and over the counter payments with partnering banks.

The strength of electronic payments using the mobile phone not only save time and money but it is also largely safe.

Over 170,000 utl customers are signed onto M-Sente with sh70m transferred monthly.

By the end of October 2010, MTN mobile money had moved over sh1 trillion (about $479m) from the over two million registered mobile money users on its network .

“This new water bill payment platform will allow our customers to pay their bills any time of the day, but also eliminates the risk of carrying lots of money in the pocket,” said Stanley Henning, the utl chief operations officer.

The significance of mobile commerce cuts across all spheres and activities of life, making it the single biggest revolution in the way financial transactions are conducted in the country, according to experts.

Analysts say the growth of MTN mobile money, M-Sente and Airtel cash has eaten into the market share of traditional money transfer services of Western Union and MoneyGram as well as banks.

Experts add that telecom operators must now diversify services by partnering with other merchants like hotels, airline and financial institutions to enhance service delivery.


Shell agrees to divest its African businesses
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A Boda boda cyclist rides into the Shell fuelling station. Royal Dutch the owners of Shell are set to divest its business in Africa. PHOTO BY NELSON WESONGA.

By Dennis Kawuma (email the author)
Posted Monday, February 21 2011 at 00:00
Shell last week (February 19) announced an agreement to divest majority of its shareholding in most of its downstream businesses in Africa for a total consideration of $1 billion.

Under the deal, Shell who run operations in 14 African countries-including Uganda, will retain equity in two new joint venture companies, which will assure continued availability of Shell fuels and lubricants under the Shell brand.

Speaking to Daily Monitor over the weekend, Shell Uganda country manager, Mr Ivan Kyayonka said he would determine the full impact of what the agreement means for Shell Uganda operations after getting the details about the structure of the agreement.

He however said much as the owners are going to change, the Shell brand, products and standards of operation would remain the same.

Shell Uganda is yet to resolve a case in which the High Court early last year halted its intended exit from Uganda and ordered the company to deposit not less than Shs35 billion ($17m) before the company can divest its operations in the country.

This followed an interim order that was issued by the Court after Mercator Enterprises Limited filed a case in 1993 in which it demanded the transfer from Shell of a commercial property in Kampala’s Central Business District, including the payment of accumulated rent and use of its property.

Mr Mark Williams, the Royal Dutch Shell’s downstream director, referred to the development as a good deal for customers as well as for Shell.

Downstream business in the oil industry refers to oil and gas operations after the production phase and through to the point of sale.

Mr Williams added: “We will significantly reduce our capital exposure in line with our strategy to concentrate our global downstream footprint, and continue to provide the high quality Shell products that our African customers have come to trust and rely on over many decades.”

Tullow rejects oil search deal with Chinese firm CNOOC
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(email the author)
Posted Monday, February 21 2011 at 00:00
UK oil giant Tullow Oil has refused to partner with a Chinese firm in the renewed search for oil in Kenya, further strengthening the hand of Western companies in the exploration business at the expense of Asian firms.

The London-listed oil firm reckons that it cannot accommodate China National Offshore Oil Corporation at the exploration stage and that it can consider a deal once it strikes oil, say senior officials at Energy Ministry.

The Chinese firm, which was the largest investor in the country’s exploration work three years ago before exiting Kenya, had applied for a 20 per cent stake in oil blocks awarded to Tullow in the high potential Lake Turkana region.

The rebuff is set to hurt the Chinese firm’s interest in the region as it had hoped to benefit from Tullow’s superior exploration skills.

“The requests for investment in new areas have been rejected and their bid to partner with Tullow did not go through,” said the senior official the Energy ministry who requested anonymity given the sensitivity of the matter.

The move is set to be a blow to the Chinese government, which has in the past six years increased investment in oil exploration work in Kenya and other African countries.

Centum joins Uganda’s stock market
Business
Written by Milly Kibombo
Sunday, 20 February 2011 18:38
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James Mworia

Kenya’s Centum Investment Company Limited has become the seventh company to cross-list on the Uganda Securities Exchange, the second time foreign companies have equaled local firms in the market’s 11-year history.

The listing adds more credibility to Centum as the company widens its footprint in Uganda, with an eye on the country’s real estate.

However, Centum’s listing is bound to raise pressure on the USE and Capital Markets Authority officials, the industry regulators, to get local firms to join the market. Attempts to get small and medium private firms to list on the market on softer terms is yet to yield to any listing.

Nevertheless, Joseph Kitamirike, the chief executive officer of the USE, points out that foreign firms bring more choice to clients.

Centum’s listing on the market got off to a good start by Uganda’s standards, with the counter trading over 800,000 shares in the Shs665 - Shs670 price range. The company’s share price, on the second day of trading, went up by 0.3% to Shs670, although many investors are holding back bids until the price drops to Shs 650.

The firm cross-listed 4 million shares, or 0.7% of the company’s total shares. The majority of the shares, 72%, are listed on the Nairobi Stock Exchange, while 27.2% are held in share certificates.

James Mworia, Centum’s CEO, says investing in their company means placing money in numerous ventures. “From a broader perceptive, we are widening the economy. Purchasing Centum shares means investing in many sectors. Centum invests in a diversified area of ventures,” he said.

Centum, an investment company that invests client’s money in profitable ventures, has investments in Cabacid Limited, an industrial gas company based in Kenya.

Centum bought into Cabacid after exiting from the Rift Valley Railways, a consortium that is rebuilding the Kenya Uganda railway line.

But it is in Uganda’s real estate sector that Centum intends to make a mark. The company has already acquired 300 acres of land in Entebbe, where it is expected to put up a housing project, according to a note from the brokerage firm, African Alliance.

The company has just set up a real estate segment within its business and its real estate and infrastructure portfolio ranges between 5%-15%. The company’s assets grew by 70% last year.

UBL unveils new look Bell bottle
MONDAY, 21 FEBRUARY 2011 06:07 ERIOSI NANTABA

KAMPALA, UGANDA - Uganda Breweries Limited (UBL), a subsidiary of East African Breweries Limited (EABL) unveiled a refreshed Bell Lager bottle at a ceremony in Kampala recently.
The 'Long neck' bottle style which seems to be the current norm, is part of the rebranding that the brewer has carried out on its trademark brand.
Currently Nile Special, Club beer and Pilsner all have the 'long neck' style packaging and now Bell lager has followed suit, abandoning the 'Euro bottle' style.
EABL Uganda Managing Director, Alasdair Musselwhite said the brewery found it inevitable to refurbish the packaging to match the customer preferences, lifestyles and trends.
Unveiling the new Bell lager look, UBL Marketing Director Marion Muyobo sadi, "Uganda's oldest brew has now reached a level where it needed to evolve, to match the ever changing tastes and preferences of its consumers".
She also added that doing business in the East African Common Market is exciting because the brewer has already got roots in the partner states having recently acquired Serengeti Breweries.
She further added that they have expanded into South Sudan, Rwanda and Burundi courtesy of East African Breweries International.
Muyobo also said that Uganda needs to improve on her infrastructural development so as to ease on the cost of doing business in the region.
She cited the railway network that has the potential to cut the cost of doing business in the region.

ATMs have come of age but...
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Mr Katamba (R) and the Board Director of Finance Trust Bank Lydia Ochieng Obbo cut a tape to officially launch the Trust cash ATM machine at their Jinja road branch recently. Photo by Ismail Kezaala

By Tabitha Wambui (email the author)
Posted Tuesday, February 22 2011 at 00:00
It has never been this convenient. No more queues, no more waiting half an hour to withdraw your money and no more rude tellers.

Today, you can withdraw money at any hour and from anywhere considering that your bank has an Automated Teller Machine (ATM) in that area.

And this is not restricted to just the savings account. Indeed, ATMs are nothing short of a revolution in banking.

The reasons for this revolution include: economic reforms in the banking sector, new players who have raised the competitive temperature considerably, infotech revolution, which has made it possible to provide ease and flexibility in operations to the benefit of the customer and people’s lifestyles, which have considerably changed in Uganda over time.

Standard Chartered Bank installed the first ATM in Uganda and it went operational in March 1997 at the Speke Road Branch.

“This is a major part of a revolution that has swept the banking industry over the last 15 years, transforming it from being very manual and slow to computerised and efficient. ATMs free up banking halls, leaving them ideally for transactions that may not be able to happen at the ATM. This took the market by storm,” says Mr Hebert Zake, the head of corporate affairs at Standard Chartered Bank.
Today the number of banks offering ATM services has continued tremendously changing people’s lifestyles.

At the present, one can make non-cash payments for some services using credit cards and Visa cards although the trend has not yet picked up in Uganda.

According to Finance Trust CEO, Mr Mathias Katamba, today ATMs have become a standard means of operation in the financial sector and have increased convenience in service delivery because a number of them are not located at bank premises. Some are located at shopping malls or petrol stations, hence bringing services nearer to customers.

“A customer doesn’t have to travel to the bank and queue for hours to be attended to by a teller for cash deposit, withdrawal or to check the balance on their accounts. They can access these services at any ATM belonging to their bank thus bringing more effectiveness,” he says.

The machines have also come along with convenience and safety. People no longer have to carry huge amounts of cash when travelling up-country as they will be able to access it from ATMs there.

“Some ATM cards have enhanced facilities like Visa, which enable one to access cash from ATMs even when they travel abroad, hence enhancing their own safety and the security of their money” Mr Zake says.

However, experts argue that easy access to cash has resulted into money mismanagement making financial management difficult to uphold in some individual cases since there are people who get addicted to cash withdrawals and this has affected the spirit of saving in our communities.

Some people make up-to three withdrawals in a day and with each withdrawal, the bank charges a certain amount of money which differs from bank-bank.

Standard Chartered Bank charges Shs800 per withdrawal, Stanbic Bank charges Shs750, Crane Bank charges Shs600 while Dfcu Bank charges Shs500 among others. Notwithstanding, account holders do not bear in mind the amount of cash they are losing at a single ATM transaction and this makes them lose out in the long run.

There is fraud and robbery in almost all sectors in life and ATMs are no different.
Ms Nuriat Kalema has been a victim. “I run a business in Kikuubo so I normally leave work late. That day, I deposited all the money during the day then started to stock take. At about 10p.m, I realised I didn’t have money for transport back home so I went to one of the ATMs in Kikuubo,” she narrates.

“As I neared the ATM, someone caught my hand. He told me not to shout or else he would shoot me. He said this while smiling. He pretended like I knew him just to confuse the two guards who were seated at the bank. I entered the ATM room and he told me to withdraw a million shillings and hand it over to him. I obliged and we walked out together.”

Ms Kalema’s case is one of the many ways through which people are robbed at ATM points although the vice is not so common in Uganda.

Banks are challenged by the high costs of maintaining ATM machine since they are operational 24/7, especially in these days when we have power outages.

“One drawback of ATMs is that they will dispense the denominations that were loaded in the machine. If you need smaller denominations or coins, you may not be able to get them. Nevertheless, ATMs have caused a revolution in Uganda with a win-win situation for customers and banks with the advantages outweighing the disadvantages,” says Mr Zake.


Retailers, farmers get row deal in influx of supermarkets
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DYING OUT: Small retail shops in Uganda are dying out as people currently prefer to shop from supermarkets. File Photo.

By Monitor Team (email the author)
Posted Tuesday, February 22 2011 at 00:00
IN SUMMARY

Small shops all over the country are currently struggling for survival in the face of the growing number of supermarkets. They might not be that big in some areas where they operate but they cause a significant effect on the retail shops as shoppers prefer the more organised setting of the supermarkets. Farmers and local traders have also been caught in the wave as the Business Power team reports.

Growing up, all shopping was done at small retail shops we popularly called ‘grocery’ and ‘duka’ in other communities.

Not until recently, these shops have been replaced by supermarkets rendering them credit outfits for the communities they are located in.

It is very common for the neighbourhoods to send their children to the shop next door with a list of merchandise promising to pay the bill at a later date. This cannot happen at the supermarkets as you order with cash.

“The world is changing and so are the people. Today you find that certain people want to be associated with a particular class and group for prestige purposes and in such a case they opt to buy their products from re-known malls yet the same item is available at a shop near their residential area,” Mr John Mugabe, a retail shop owner says.

Also, the trend of shopping in bulk is influencing Ugandans to opt for supermarket shopping as opposed to retail shops.

“I prefer shopping at a supermarket rather than in the Duka because I will be able to find all that I want under one roof rather than spending a lot of time moving from one shop to another,” Ms Hilda Musoke, a resident of Kitintale, said.

She adds that unlike the supermarkets, the chances of buying sub-standard goods are high in the Dukas. Also, the display of products in supermarkets has to a large extent caused impulsive shopping, something that is not true for the Dukas.

Imported goods

Ms Sophie Mutesi picks a tin of Lyon’s Maid ice cream manufactured in Kenya from one of the deep freezers in the newly opened Tuskys Supermarket in Ntinda.
I become curious about her choice of ice cream because I am used to brands like Fido Dido and Simka which are manufactured in Uganda.

“I like Kenyan-made ice cream. It tastes better,” she said, picking a third tin of Lyon’s maid.

But as she picks the tins, she is so cautious of the price so she keeps on checking on the price tag glued on the fridge door. Lyon’s Maid costs Shs800 while Simka and Fido Dido go for Shs500 for the smallest tin.

As more foreign supermarkets spring up in Uganda, locally manufactured goods are losing market may be because of quality standards as some experts allege.

The country is undergoing a wave that has seen goods from China, Dubai, Kenya and other countries flood the city malls at the expense of local products. It has almost become acceptable to buy foodstuffs, textiles and other jewellery or handicrafts made elsewhere yet they are also available locally.

A recent survey done in different foreign-owned supermarkets in Kampala indicated that imported commodities over-shadow Ugandan products on the shelves.

Fruits like oranges, tomatoes, apples, grapes and dates, some of which can be obtained from Uganda, are being imported from South Africa and Kenya while cooking oil, baking flour, maize flour, biscuits and bottled drinks like quenchers come from Kenya.

Wine and powdered milk are imported from, Kenya, Italy and the Netherlands while diapers and sanitary pads are mostly from Kenya and China.

Rice is imported from the Emirates and Pakistan notwithstanding that local manufacturers like Tilda are producing the same quality.

A source who preferred anonymity told Business Power that they import these products because Ugandan farmers and some manufacturers have failed to meet the set quality standards.

However, Mr John Ssempebwa, a trade consultant, recently said: “To have your product on the shelves, you will need to have it coded and that will take you not less than Shs1 million, an amount that many local SMEs in Uganda will prefer to inject into their businesses.”

He argued that the terms that the supermarkets present such as paying the producers or the traders a month after delivering the supply instead of cash is among the numerous challenges that hinder local suppliers from stocking the supermarkets with the local products.

“A farmer will find it easy to take his produce from the farm straight to the street where he will be paid cash than supply it on credit,” he added.

Mr Charles Kahuthu, the manager, Membership and Branch Development at Kenya National Chambers of Commerce said in a recent interview that Kenyans should not be blamed for taking over shelves but there experience should be emulated by Ugandans so that they can reclaim their market.

However, supermarket managers maintain that they are open for local products as long as they sort out the consistence issue.

Mr Peet Coetzee, the general manager at Shoprite Uganda, said Shoprite used to import up to 70 per cent of their commodities but that has dropped significantly because they want to empower the local SMEs.

“It is not true that we are importing more of foreign commodities, we used to import 70 per cent but now we only import 30 per cent. The biggest problem is that Ugandans do not have the capacity to produce enough locally and consistently,” he said.

The Country Manager Nakumatt Supermarket, Mr Bernard Mutua, could not exactly specify the percentage of local products in the supermarket shelves, saying that it is not easy to work it out because of the nature of suppliers.

“We have Kenyan products being distributed by the local suppliers so it makes it hard to distinguish between a foreign and a local supply,” Mr Mutua said on Saturday when Business Power contacted him.

He admitted that they do have a fair share of foreign goods but priority has always been to the local products.

Farmers losing out
But the farmers are also threatened as there produce rots away because local supermarkets largely depend on imported products.

Farmers say that the proprietors of the various supermarkets have established direct links with foreign farms where they directly get their supply from.

“It is disappointing to have similar produce sold at high prices in supermarkets because they are imported yet we have them on our local farms and they end up being sold in local fresh food markets at very poor prices,” says Mr Frank Mutesasira, a model farmer in Bugonzi, Masaka.

He argues that even though there are capacity issues, it can be worked out if farmers are given training that builds their capacity not only in modern methods of farming but marketing as well.

“We have the capacity to supply but they opt to import the produce from other countries in the guise that we cannot consistently maintain our orders,” Mr Aga Sekalala, the proprietor of Ugachick Poultry Breeders Ltd, said.

“This is unfair. I believe we can fill the shelves of our supermarkets with the local goods. ”

According to Mr Sekalala, there is need for both short and long term policies that should compel government to promote locally produced products.

Other local producers like Mr Julius Musimenta, the proprietor of Magheritta Millers, attribute the challenge to lack of focus towards promoting the local agro-processing industries. “To become competitive, we need a grace period for the loans that we acquire to be extended,” says Mr Musimenta, who is a producer of maize and sunflower products.

However, Mr Abdulkarim Farid, the proprietor of Sulma Foods Ltd, local producers are still disadvantaged because they entirely depend on nature for survival.

“Produce like Irish potatoes, sweet melons and apples are imported from countries like Kenya, South Africa and Rwanda because in Uganda we depend on nature to produce; so if the rains delay we shall not have these items and the supermarkets will be forced to get it elsewhere,” Mr Farid, who deals in vegetable produce said.

Private Sector Foundation boss, Mr Gideon Badagawa, said: “The problem has been our local capacity, we do not have the same capacity with say Kenya and south Africa and that explains why our shelves are stocked with goods that we can even produce.”

Reported by Ismail Musa Ladu, Ephraim Kasozi, Tabby Wambui, and Justus Lyatuu

Banks advised to embrace technology
Monday, 21st February, 2011
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Justine Bagyenda (left), the BOU executive director for supervision with Katamba at the opening of the institution’s Kitintale branch recently
By David Ssempijja

BANKS should integrate new technologies to reduce the high cost of doing business, experts have advised.

Mathias Katamba, the Finance Trust chief executive officer, said this was important, especially as banks strive to bring the unbanked population on board. Technologies common in the banking industry include automated teller machines (ATMs), biometrics-based systems, Internet banking and mobile telephone money transfer services.

The banker said integrating technology in banking makes it possible for machines to perform duties that would have been done by humans, thus saving time and money.

“Modern technology, for example, ATMs or networking bank branches, relieves the public of the burden of moving long distances with hard cash. This is risky, expensive and time consuming,” Katamba explained during the opening of the institution’s newly-introduced ATM service, TrustCash.

“Today marks a milestone in the growth of micro-finance in Uganda as we are the first home-grown micro-deposit taking institution to launch an ATM network,” he said.

Lydia Ocheng, the institution’s board member said that customers will conveniently transact deposits and withdrawals because the launched ATM service is already connected to the Bankom switch network, making it possible for Finance Trust customers to access services accross other banks’ ATMs.

Swiss firms take over Shell
Monday, 21st February, 2011
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By Ibrahim Kasita

SWISS joint-venture firms, the Vitol Group and Helios Investments, have taken over Royal Dutch Shell’s majority shareholding interest in sub-Saharan Africa, including Uganda.

The deal is worth $1b. Under, the agreement, Shell, the parent company of Shell Uganda, will retain equity in two new joint venture companies to ensure continued availability of its fuels and lubricants in 14 African countries under the Shell brand.

“This is a good deal for us and customers,” said Mark Williams, the Royal Dutch Shell downstream director.

“We will significantly reduce our expenditure, concentrate on our global downstream footprint and continue to provide the quality products that African customers have come to trust over many decades.”

Ian Taylor, the president of Vitol Group, said: “These two new ventures allow us to invest in Africa and its fast-growing economies and grow all the businesses under the umbrella of the Shell brand for the benefit of customers.”

Tope Lawani, the Helios Investment managing partner, said he was pleased with the “landmark” agreement.

“We believe that combining Vitol’s world-class supply expertise and Helios’ deep understanding of the African operating environment with Shell and a professional workforce will create significant growth opportunities for the business. We will ensure the continued supply of quality products and services for African consumers.”

One joint venture will own and operate Shell’s existing oil products, distribution and retailing businesses in 14 African countries, with the potential to add five more in future.

Vitol and Helios will hold 80% of the venture and Shell the remaining 20%.

A separate company, which will be 50% co-owned by Shell and 50% by Vitol and Helios, will operate Shell’s existing lubricants blending plants in seven countries. It will also manage macro-distributor relationships in these countries where the main venture operates.

The take-over by the Swiss firms ends the bidding rivalry among oil companies such as Oilibya, Morocco Oils, Tamoil and Engen Petroleum, which were contesting for the ownership of the lucrative oil business.

It also means that the Vitol Group and Helios will join Total as the other big global brand in the petroleum retail business.

Ivan Kyayonka, the Shell Uganda managing director, said the new change in shareholding would not affect it employees in the 14-countries. “Nothing is going to happen to our staff,” he said yesterday.

“The change is in the shareholding, profit and dividend distribution.”

Shell had positioned itself in the market Ugandan with earlier acquisitions of Agip and BP, but seems to be reeling from growing competition from local and Asian firms.

The sell of the African business comes barely seven month after Royal Dutch Shell sold similar operations in Greece at $300m.

The three firms will now concentrate on securing necessary regulatory approvals and integration planning, ahead of a phased completion of the proposed deal during 2011 and the first half of 2012.

China plots to deepen Africa ties
Tuesday, 22nd February, 2011
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By Ibrahim Kasita

CHINA has designed a new strategy where it will re-locate some of its small-and-medium industries to sub-Sahara African as a measure against rising labour cost.

The move will help create jobs and transfer of technology, experts say.

“Labour costs in China have been rising. This has increased the cost of manufacturing,” Zhou Xiaoming, the economic and commercial counsel at the Chinese embassy in Kampala, said.

“We plan to relocate small, light industries to undeveloped countries where the cost of labour is low. The economic environment here is also good and competitive, which will allow build business confidence.”

Xioaming explained that the “new” industries would create jobs for the local people and spur investments in Africa, creating a stable and sustainable economic growth.

“The move will foster human resource capacity building and transfer of skills through training, which is needed to develop Africa,” he said.

The low-cost factories are labour-intensive and cheap to run. They make goods like casual clothes, toys and simple electronics that do not need highly-educated workers.

This type of industries cannot be affected by unreliable power supply and the poor transportation systems common in many sub-Sahara countries, he said.

The strategy is designed to demonstrate that Sino-Africa economic and trade ties are a major component of mutual benefit and reciprocity.

China has already announced “special action” to crackdown counterfeiters and control export of sub-standard goods to Uganda and around Africa.

The measures will include restricting movements of persons involved in making fake products, prosecuting them and revoking their production licences if they can be traced back to China.

The Uganda private sector welcomed the strategy, calling it an “opportunity to study, learn and compete.”

“We are excited that China has accepted to re-locate their industries to Africa. This will help us build human capacity and skills required for business to grow and compete,” Gideon Badgawa, the Private Sector Foundation of Uganda chief, said.

“The private sector is engine to economic development, but they cannot create jobs without skills. China is a giant. We need the expertise and the know-how from them to grow.”

China, in its “Eight-Point Plan,” pledged to launch the Sino-Africa science and technology partnership plan, and carry out 100 joint research and demonstration projects.

Beijing also pledged to give zero-tariff treatment to 95% of exports from least developed countries in Africa that have diplomatic relations with China.


Nebbi gets a sh800m landing site
Tuesday, 22nd February, 2011
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Omach dancing with the residents of Dei during the function
By Ayiga Ondoga

THE Government is to construct a sh800m modern landing site at Dei in Nebbi district, on the Uganda-DR. Congo border, to boost commercial fishing in West Nile, the finance state minister, Fred Omach, has said.

He said the landing site would have clean water, electricity and refrigerators to keep the fish fresh for export.

Omach made the remarks in Panyimur sub-county while touring Boro, Ganda, Sigila and Acungu-rwoth parishes in Nebbi recently.

The minister appealed to the people to embrace government programmes like the Northern Uganda Social Action Fund and NAADS to boost their household income.

He emphasised the importance of not relying on the fish from lakes and rivers, but to start fish farming to supplement on the traditional method.

“We should not rely on the fish from Lake Albert only, but form groups to dig dams for fish farming to improve household income in the villages,” Omach advised.