Uganda Business, Economy and Infrastructure News

[sseki2010]

Italian Company To Buy Ugandan Oil Fields



Heritage Oil Company Drilling ENI SpA of Italy is to acquire stakes in two Ugandan oil fields from U.K.-listed Heritage Oil PLC for $1.3 billion.

The deal, which could be announced today, underscores the intense interest the world's major oil companies are showing in Uganda, one of sub-Saharan Africa's most promising hydrocarbon provinces.

It would also cement ENI's position as one of the most active players in Africa. The Italian company already has interests in the Republic of Congo, Nigeria and Ghana.

Some 700 million barrels of oil have been discovered so far in Uganda's Lake Albert Rift Basin, and Tullow Oil PLC -- the U.K.-listed oil company that is Heritage's partner -- says it believes there are 1.5 billion barrels still to be discovered.

ENI will acquire the 50% working interest Heritage holds in two blocks in the Albert Basin, Blocks 1 and 3A, which it shares with Tullow. Under the deal, Heritage will pay a special dividend of between 90 pence and 100 pence per share to investors.

Tony Buckingham, the chief executive and founder of the company, who holds around 33% of Heritage's outstanding shares, described this as a windfall.

Tullow, which wholly owns and operates another block in the same area of Uganda, Block 2, is also seeking a partner for its Ugandan assets. The oil is in a remote area far from major markets and with little infrastructure.

An export pipeline will likely have to be built to link Lake Albert to the coast – a hugely expensive undertaking which Tullow will struggle to accomplish without the help of a larger investor.

ENI expressed an interest in buying into Tullow's Ugandan fields, but was deterred by the high price.


Heritage will use the proceeds from the ENI deal to develop its assets in the Kurdish region of Iraq. The company, which has a 75% stake in the Miran block in Kurdistan, could use the money to build a pipeline linking Miran to Iraq's main export pipeline, or to construct a refinery to process oil from the field, a person familiar with the matter said.


For the last several months, Heritage has been in talks to acquire Genel Energy International Ltd, a Turkish energy company and its partner in Miran.

http://www.redpepper.ug/page.php?aid=332&caid=30

[sseki2010]

Uganda's Crane Bank Wins 9th Bank Of Year Award

Uganda's Crane Bank once again has been awarded Bank of the Year 2009, Uganda.


For the sixth time in 7 years and 5 times in a row, and for the first time in its history it was awarded Best Bank in Uganda by Euro Money 2008 amongst other successes.

This is the eighth time Crane Bank has won an International award.


This prestigious award was presented to Mr. A.R Kalan Managing Director Crane Bank on a glittering ceremony at London on 3rd December 2009.

Crane Bank is perhaps the only local Ugandan bank that has won the Bank of Year Awards, An award by the financial times associated with UK Trade & Investment, six times in the last decade, the debut award having been won in 2003 and most recently 2009.

To this Mr. Kalan reiterates that “For a people’s bank, where good governance, sound strategy and a capable management is used to implement policies and procedures effectively, it is no wonder that share holders’ and customers’ alike are rewarded.”

The 2008 financial statements indicate a return on equity of 40.66% as compared to 39.15% in 2006.

Crane Bank continues to expand its geographical footprint across Uganda by establishing branches all over the country.

The Bank currently has 11 branches well spread all over Uganda and the total number of branches is set to reach 15 by the mid of 2010.

The Branch expansion initiatives yielded tremendous results in terms of market deepening and penetration.

The number of account holders at Crane Bank increased from 230,000 in 2007 to 800,000 currently.

http://www.redpepper.ug/page.php?aid=545

[u.g boy]

Originally Posted by [MAROC-1]

lol come on dont get offended... you see it does have hope but its sooooo far away....
The fact is this country has no positive positive near future no economic resources a very very low human development index, extreamly poor infestructure, social issues, H.I.V, High crime rate, More than 80% of the population is under the poverty line I could go on for more but I think you get the point. Its about money in this world, you ether have it or you dont, and in this case you clearly dont.. but hey dont give up every country went through this fase...

kk

[u.g boy]

Originally Posted by [MAROC-1]

LMAOOOO Plzzz, one sec while i catch my breath!!

First of all what strikes me is that you seam to be justyfing my claims.
Wether you have a low human development index or a very very low human development index is not the point, the point is, its bloody LOW!!
Secondly, NO i wasnt comparing you to Morocco, so dnt flatter urself.
Thirdly yes Uganda is growing, no doubt about it, Uganda is on the move..
the issue is, its moving at a snails pace and considering the Financial, economical, issues this poor country faces, it just not even close enough to even makeing a dent in the daily living conditions of its population.
Now touching on your claim that Uganda has "oil" I would like to inform you that if you had even a disent amount of it, we would not be having this conversation.
You also menchened that you have the following resources; cobalt-copper, gold,lead, lithium,tantalum,tin,titanium,tungsten. Find out these facts, How many people are employed in this industry, the pay wadge, the finacial implication of these resources on the country with refferance to its contribution towards G.D.P
Some facts:
Uganda population 32,369.558
Percentage of urbanization 13% of the total population (2008)
87% of the population live in rural areas. so how much of Uganda's population is actually being effected by this economic boom??

Life expectancy:
Male: 51.81 years (2009 est.)
Female: 53.81n years (2009 est.)

To be honest, I was shocked at this fact!

People living with HIV/AIDS
940,000 (2007 est.)

another constraint is that 80% of the work force is employed by the agricultural sector. which is typical of underdeveloped countries.

Im sorry, but this country is a failed state.

Despite The gains Uganda has made in recent years, unfortunatly the losses out weigh the gains by a huge margin by any standard.

firstly allow the harsh comments and rudeness were tring to start a fight secondly. uganda has the 6 th fastet growing economy in africa faster than moroco. civilsation cities ect exsisted in moroco for many uganda people only stated living in cities in the last 200 years same as sa(south africa) but the moved up faster. uganda has just discovered 5 billion barrels . they need time to develop the refineries.the reason ugandas other resourse dont excell the gdp all lot if they are exploited to the full extent they just harly used except copper.
the 13 percent urbanaztion is wrong that fact was from 1998 it has certainly chainged since then. that is an estimate made by the usa not even uganda itself. its now placed at 25 percent ill try to get the link. have you even seen the city that ugandans are building it has to cost money to build a new city doesn it . so this is proof. ofimpovement uganda hdi is higher dan nigeria

[sseki2010]

NWSC to Build Sh190 Billion Water Plant

Kampala — THE National Water and Sewerage Corporation (NWSC) is to construct a multi-billion water plant at Katosi in Mukono.

The 70m euros (sh190b) project will have a production capacity of between 150,000 to 200,000 cubic meters per day.

"When this project is done, water problems in greater Kampala will be history since we estimate the project to handle the water crisis for 20 to 30 years," William Muhairwe said at a meeting with the parliamentary committee on national economy last week.


He, however, said the corporation was owed sh31b, with the Government accounting for about 43%.

[sseki2010]

70,000 Jobs Created, Says Investments Body

Kampala — OVER 70,000 new jobs will be created from the projects registered by the Uganda Investment Authority last year.

A total of 354 projects in various sectors were registered with a planned investment of $1.6b (about sh3.04 trillion). This will result into 70,289 new jobs, investments minister Aston Kajara said yesterday.

A progress report on these investments will be computed by September, he said.


The expected number of jobs constitutes an increase of 20,000 more above the 4,9173 created in 2008.

The minsiter attributed this to the efforts of the authority which came into existence in 1991. In that year, for example, 427 jobs were created.

Kajara said for every job, about 12 others are created indirectly.

The minister was addressing a press conference on the status of investment in Uganda. He was accompanied by the head of the authority, Maggie Kigozi.

Kajara said the jobs created are in the sectors of manufacturing, real estate, finance, insurance and business services, transport, communications, agriculture, hunting, forestry and fisheries as well as mining, quarrying, electricity, gas and water.

Agriculture will provide the biggest number of jobs, he added.


The minister said the investments in 2009 surpassed those of the previous years. "This is the first time that the 70,000 planned jobs mark has been reached." He attributed the growth in investments to improved infrastructure including a liberalised telecommunications sector, rehabilitation of airports and airfields, more passenger and cargo routings, government intervention in the energy crisis and efforts at improving water and rail transport.

The minister also said Uganda's exports to the COMESA countries had increased, with Sudan accounting for 14.3% followed by Kenya, 9.5%, Rwanda, 7.9% and the DR Congo at 7.2%. The top 10 countries from where investors came, according to Kajara, are China, India, the United Arab Emirates, Kenya, Togo, Germany, Russia, Eritrea, Nigeria and Sudan.

He said Uganda will host the next East African investment conference in April at the Speke Resort Munyonyo. This, he said, is intended to spur investments in the region.

Kajara denied that the Government favours foreign investors whom it grants incentives such as VAT refund.

He said many Ugandans who qualify shy away from registering with the Uganda Investment Authority, fearing that the revenue authority would over-tax them.

He explained that investments of $50,000 qualify for VAT refund, but Ugandans do not apply for the exemption.

"You see big buildings coming up and many of them are owned by Ugandans," he said.

"They fear that the tax men will come after them.

[Kenguy]

Wow! Togo is among the top 10 investors. Maybe its because of Ecobank or is there another explanation?

[kulani]

Originally Posted by Kenguy

Wow! Togo is among the top 10 investors. Maybe its because of Ecobank or is there another explanation?

yeah, i was about to say the same thing. but perhaps other investors are springing up. who are the main shareholders of Ecobank by the way, does the Togo govt actually have a stake in this or its private Togolese investors?

[kulani]

Originally Posted by [MAROC-1]

LMAOOOO Plzzz, one sec while i catch my breath!!

Now touching on your claim that Uganda has "oil" I would like to inform you that if you had even a disent amount of it, we would not be having this conversation.

Im sorry, but this country is a failed state.

Despite The gains Uganda has made in recent years, unfortunatly the losses out weigh the gains by a huge margin by any standard.

i wanted to respond specifically to the 3 points you made above.

As far as i know, Uganda has recently discovered oil in significant commercial quantities and the govt stands to receive at least more than $2 billion annually (this is more than 60% of govt budget!!). This is significant in Africa and will help Uganda. Africa is not looking for SAUDI type quantities of oil reserves to develop. This has been in the public domain for sometime and no need to debate about the oil discoveries made by Tullow Oil and others in Uganda and Ghana.

I definitely would not regard Uganda as a failed state. i dont even think your government will agree with you let alone the many nations that Uganda enjoys diplomatic relations with. I speak as a South African and i know our country enjoy cordial diplomatic relations with the state of Uganda and several South African companies continue to make investments there.

Again on the last point, i think you are being ignorant here, Uganda has made steady gains in economic development and HDI indicators are certainly improving. HIV Aids has affected some indicators but Uganda has taken very bold steps in the fights against HIV/Aids. I do know that here in SA, with our own problems in HIV/Aids have looked up at the bold steps taken in Botswana and Uganda in the fight against this pandemic.

[Kenguy]

Originally Posted by kulani

yeah, i was about to say the same thing. but perhaps other investors are springing up. who are the main shareholders of Ecobank by the way, does the Togo govt actually have a stake in this or its private Togolese investors?

I always get the feeling its Nigerians. At least in E.Africa, its widely regarded as a Nigerian bank.

[sseki2010]

Uganda stock market gets more activity than any East And Central African Stock market

THERE was improved activity on the bourse on Tuesday with five counters trading, but with varying fortunes. Although more counters traded, volumes and total market value declined compared to the previous week.

Total turnover for the day was sh163m, while it was sh523m last week.

Dfcu maintained its share price of sh620, but traded reduced volumes of 20,000 shares, worth sh12.4m in turnover.

Last week, dfcu dominated the market with 96% of the total market volume (812,124 shares) traded.

At session 895, Bank of Baroda gained some ground with 147,047 shares traded as it approached its 1,000th trading session. It realised sh42m in turnover.

“The continued volatility on the counter may be attributed to the strong demand for liquidity by retail and institutional investors,” said a market report from African Alliance on the Baroda situation. Stanbic Bank was again dominant after Dfcu stole the show last week.

Stanbic Bank moved 568,010 shares, realising a turnover of sh93m. This was 77% of the total market turnover.

There was a bid of over 1 million Stanbic shares, falling from the 3 million of the previous week. Last week, Stanbic posted a low 53,261 shares in which it earned sh8.7m in turnover.

Uganda Clays maintained some liquidity with sh14m in turnover and 285,604 shares exchanging hands. The all share index rose to 776.03 from 750.36.

http://www.newvision.co.ug/D/9/32/707638

[cyberManHere]

Tanzania, Kenya, Zambia and Uganda are considering replicating ECX

modelafrol News, 19 March - Started as an experimental development project in 2008, the Ethiopian commodity exchange has been a great success in helping agricultural products reaching the market and safeguarding trade. Now, Tanzania, Kenya, Zambia and Uganda are considering replicating the model.

In April 2008, Ethiopia's first commodity exchange was established in a country where only a third of the agricultural produce reached the market. With national and foreign funds, the Ethiopia Commodity Exchange (ECX) was created to provide security and visibility for the country's commodity traders.

Jointly owned by its members and the Ethiopian government, ECX now provides a secure, low-cost platform for farmers to trade agricultural goods - such as coffee, sesame, haricot beans, maize - in an otherwise tradition-bound system suffering from unusually high transaction risks and costs.

"The exchange guarantees the integrity of the products traded, quickly and reliably disseminating market price movements to all traders," according to the UN's development agency UNDP, which concludes the ECX project has been a success.

In addition to creating a physical and electronic trading platform and market information system, ECX performs warehouse management and quality certification. It also guarantees payment against delivery, solving any commercial disputes through a fair and professional arbitration system.

The exchange has handled transactions worth US$ 240 million since December 2008, amounting to over 160,000 tons of coffee beans. An estimated 850,000 small-holding farmers - mostly producers of coffee, sesame and other cash crops - are now involved in the ECX system. This amounts to around 12 percent of the national total of farmers.

Having helped to develop a commodity exchange for Ethiopia, UNDP now reports it is looking into the possibility of replicating the experience in other African countries. "Among these, Tanzania, Kenya, Zambia and Uganda are considering replicating, customising and scaling up the ECX model," the UN agency reports.

The UNDP Administrator, Helen Clark, visiting the ECX last year, was thrilled by the model project. "There will be a lot of interest in other developing countries in this kind of exchange," Ms Clark said. "It gives a lot of transparency to the small farmer about what they are going to get. It also helps set standards for what they need to produce in order to command the best price," she added.

The Ethiopian model has already been presented to other African governments and the international donor community. Last month, the African Commodity Exchange Association, which is to foster the growth of commodity exchanges in the rest of the region, was established.

A Commodity Exchange Community of Practice is expected to be launched shortly, helping experts to share experiences on how to establish similar mechanisms in their own countries. Because the road to success of the ECX has been difficult.

In its first year, the Addis exchange faced a number of challenges, including fears that Ethiopia's world-class coffees would be lost, as high and low quality beans were mixed together on the trading floor.

The ECX overcame these challenges with the creation of a classification system that differentiates between different types of coffee beans. In response to local pressures, the exchange has started to market specialty coffee and has even expanded from covering spot transactions for immediate sale and delivery, to include trade in coffee futures.

[kihihi]

In Summary

* The $1.5m (£990,000) refinery is operated by the Russian-owned firm Victoria Gold Star and has the capacity to produce at least 10kg of gold a day.
* Refinery opened a year after Uganda discovered gold

The first gold refinery in Uganda has opened in the capital, Kampala.

The plant will refine gold from the Democratic Republic of Congo and other countries in the region, including Uganda which discovered gold last year.

The $1.5m (£990,000) refinery is operated by the Russian-owned firm Victoria Gold Star and has the capacity to produce at least 10kg of gold a day.

Legitimate gold

At the opening ceremony, the company's managing director said his aim was to create a legitimate trade in gold.

"We shall require import and export licence for the gold that we shall refine," Yuri Bogoroditskiy is quoted as saying by Uganda's state-run New Vision newspaper.

Correspondents says Uganda's link with gold has often been controversial as it long has been accused of benefiting from the mines in the war-torn east of DR Congo.

The Ugandan army denied allegations that it looted resources during its involvement in DR Congo's five-year war that ended in 2002.

Rebels based in DR Congo continue to be suspected of smuggling gold through Uganda and other neighbouring countries.

[MBA-Congo]

highly doubt it Ituri is about to become a state and already has large investment deal for mining and refining it's gold.

[MBA-Congo]

JOHANNESBURG (miningweekly.com) – Africa-focused gold-mining and exploration company Randgold Resources met with the Democratic of Congo (DRC) government on Tuesday to report on the latest steps taken towards the development of the Kibali gold project.

The DRC government has a 10% stake in the project, which is said to be the largest undeveloped gold deposit in Africa, through its parastatal Okimo.

The Kibali project is a joint venture between Randgold, AngloGold Ashanti and Okimo, with Randgold being the operator of the project.

Randgold CEO and Kibali chairperson Mark Bristow said that the company had taken "great strides" towards the development of the project during the past quarter, compiling a new geological model and optimising the existing feasibility study with a view to start production at the earliest opportunity.

"Operationally, we need to finalise the opencast and underground development and mining schedules and ensure that we build a mine that matches the world-class nature of the deposit and maximises the production rate in relation to the potential size of Kibali's reserves and resources."

Preconstruction work on the new road between Aru and Doko, which is central to the logistics of the project's development, had now started.

Further, the establishment of an adequate electrical power supply to the project had been advanced by completing the conceptual engineering studies on upgrading Okimo's existing facilities and securing a licence to generate hydropower from the Nzoro river.

However, Bristow noted that the company were conscious of the challenges still ahead.

"The relocation of people is probably the biggest of these, and we have to ensure that the resettlement programme and public participation process stay on track."

The company had now formulated a draft people-resettlement programme and initiated a public participation process.

"We also have to build a mutually beneficial working relationship with Okimo, whose active participation in this complicated and sensitive issue is critical," concluded Bristow.

Edited by: Creamer Media Reporter

[kihihi]

Originally Posted by MBA-Congo

highly doubt it Ituri is about to become a state and already has large investment deal for mining and refining it's gold.

The article u hav shown shows plans for mining of gold not value addition as u claim, tanzania is one of africa's largest exporters of gold but does not refine its gold.

But even if its true good for congo finally a break from only extractive industries, but the article i posted clearly stated that uganda has discovered gold of its own and therefore it could target that production.But that does not deny the fact that alot of congo gold is smuggled out thru uganda in its raw form this will create more revenue for gold miners even in congo.

[MBA-Congo]

What do you think the heads in Ituri putting there heads together for. In Katanga it was government policy to stop all exports of copper out of the province unless it was refined same will apply with Ituri. They have already got investors.

[BUTEMBO21]

Originally Posted by MBA-Congo

highly doubt it Ituri is about to become a state and already has large investment deal for mining and refining it's gold.

I Read the article on bbc. , its the Gold brought by militia rebels. not a legit business.

[MBA-Congo]

of course smuggling is there, but I highly doubt the elected head of Ituri after being under foriegn occupation and mass slaughter of their people are going to be using Uganda's refinery anytime soon. Ituri also has a secure environment in comparsion to Kivu and potentialy wealthier business heads around the gold town, this is one reason why they must go ahead with their new state status, Central government should let them go their way as a new state.

[kihihi]

A forthcoming book by a former Harvard researcher says Western interference with Africa’s most successful Aids prevention programme drove up HIV-infection rates and ended a dozen years of the largest decline in HiV prevalence ever seen.

In Aids and Ideology (an early draft of which has been seen exclusively by The East African), the American anthropologist Edward C. Green reveals just how American and European donors and policy-makers used Aids-ravaged Uganda of the 1980s and 90s as an ideological battleground.

This was in “a last ditch effort to keep Aids prevention efforts free of the conviction that the sexual behaviour of Ugandans needed to change”.On his first visit to Uganda in 1993, Green had noted that the country’s Aids prevention programme seemed different from all others he had seen.

Uganda’s “Zero Grazing” initiative, introduced in 1986, not long after Yoweri Museveni came to power, was largely an African designed model of Aids prevention. It was based on the promotion of monogamy, fidelity, faithfulness within polygamous marriages, abstinence (or delay of sexual debut) and reduction of multiple sex partners.

“There is anecdotal evidence that STD incidence has significantly decreased in Uganda in the past year or two,” he wrote in his consultant’s report to USAid.”

While this may reflect wishful or politically motivated thinking, it would be extremely significant if this were true.

If a high Aids-prevalence country like Uganda shows a significant decline in STDs in the absence of a male condom prevalence rate of over 5 per cent, it might suggest other types of behaviour change. “Premarital chastity, “zero grazing”, marital fidelity, abstinence, non-penetrative and other safer sexual practices, can significantly affect incidence if not HIV incidence.”

His suspicions were confirmed in 1998 when he made his third trip to Uganda, this time for the World Bank. What Green found was that Ugandans were having fewer sex partners and that teenagers were delaying their engagement in sexual activity.

Uganda’s HIV infection rate was slashed from an estimated 15 per cent to 5 per cent in the late 1980s to the mid-1990s, miraculous by any standards and the most significant decline anywhere, then or since.

And it wasn’t only in Uganda this was happening. At around the same time, the HiV infection rate in the neighbouring Kagera region of northern Tanzania was falling.

By 1996, the HIV infection rate in the capital, Bukoba, had dropped by half and by 2003 it was down 80 per cent from its peak 15 years earlier, according to one study.

The revelation that HIV-prevalence was declining at such an early stage of the epidemic in a poor, war-ravaged region receiving little foreign assistance, and that it was doing so primarily using behaviour change,was equivalent of the splitting of the atom.

It recognised human sexual behaviour change as the key to reducing HIV prevalence in sub-Saharan Africa.
But it also revealed that a unique pattern of long-term concurrent, multiple sexual partnerships existed in East and Southern Africa, which acted as a lethal “superhighway” in spreading the disease.

This strategy put Uganda firmly on the map as the most successful country in the world in the fight against Aids, though the country did also make significant improvements in the safety of its blood supplies and also promoted safer medical practices, such as using sterile injections.

Furthermore, zero grazing was cheap (Green estimates that it cost only 23 US cents per person per year to reduce HIV rates during the period 1986-91, when the most significant behaviour change occurred).And it was also culturally relevant and sustainable in the absence of mass foreign donor support. However, such behaviour change methods were and are still largely ignored or overlooked by the international Aids community.

Green’s work challenged a multibillion dollar industry based on medical technology — condoms, testing, and drugs — and largely ignoring sexual behaviour.

Green claims that no foreign expert he met in 1993 believed that STD rates, and consequently HIV-prevalence, were declining in Uganda due to behaviour change methods.

But several African and foreign Aids research pioneers such as Lord Robert May, Charlotte Watts, Maxine Ankrah, Martina Morris, and C.P. Hudson were beginning to suspect that primary behaviour change methods were the key to counter the culture of concurrent, multiple sexual partnerships.

In spite of its success, the zero grazing strategy was gradually phased out starting in the latter 1990s, largely because foreign donors, including USAid, Pepfar and the CDC, were convinced that fidelity and abstinence had little or no relevance.