Uganda's new-found oil reserves may account for as much as 4 percent of its economy annually in coming years if managed well, the International Monetary Fund's country chief says. IMF Mission Chief for Uganda Axel Schimmelpfennig writes in a blog post that the country also needs some strategic infrastructure investment and better debt management. Uganda's economy has taken a hit over the past decade -- particularly on a per capita basis -- but is recovering. According to IMF figures, growth was around 4.7 percent in 2016, currently above average for Africa. That was up from just 2.6 percent in 2011, but still well off its 10.4 percent high as the global financial crisis broke. The IMF projects gross domestic product will grow at 5.7 percent in 2018, but Schimmelpfennig sees greater growth beyond. "Drought in the Horn of Africa, regional conflict, and slow credit growth have contributed to (the decline), with per capita growth falling to half a percent from an average of 5 percent for the past 20 years," he said in his blog post. Per capita GDP -- a closer measure of ordinary Ugandan's conditions -- has plunged in the past few years along with weakness in key exports such as tea, coffee and some minerals. The shilling, Uganda's currency, has also weakened, in particular during the run up to the February 2016 presidential election. But with oil, all this could change. "In our estimates the revenues could range on an annual basis from about half a percent...

Uganda Revenue Authority (URA) missed its Shs13 trillion revenue target for the ended 2016/2017 financial year by Shs457.51 billion, Commissioner General Doris Akol revealed on Monday. The less-than-satisfactory collection was, however, Shs1 trillion higher that of the financial year before. Addressing URA’s first press conference this new financial year, Ms Akol attributed the revenue gap to a “sluggish economic performance”. The International Monetary Fund in May, cut back the country’s growth in the ended financial year from the projected 5 per cent to 3.5 per cent, citing, among other things, volatility of food prices due to prolonged drought. The commissioner general said limited credit to the private sector last financial year adversely affected manufacturing, whole sale and retail construction, diminishing domestic revenue generation from taxes. Constrained aggregate demand in the economy affected companies’ profitability and corporation tax returns in the 2016/17 FY, she said, adding that their counterparts in East Africa, except Burundi, too failed to meet revenue targets. In Uganda’s case, she said, traders decided to warehouse goods or re-export them to mainly Kenya and Rwanda, which further affected the customs revenue. Export goods Official records show that re-exported goods nearly tripled during the financial year that ended on June 30. Ms Akol outlined tackling fraud, enforcing compliance and improved human resource as priority areas to reduce revenue loss in the future. Source: Daily Monitor

Was the Africa Growth and Opportunity Act a poisoned chalice from the United States of America? It appeared so after the US allowed a petition that could see Tanzania, Uganda and Rwanda lose their unlimited opening to its market. This follows the US Trade Representative assenting last week to an appeal by Secondary Materials and Recycled Textiles Association, a used clothes lobby, for a review of the three countries’ duty-free, quota-free access to the country for their resolve to ban importation of used clothes. The US just happens to be the biggest source of used clothes sold in the world. Some of the clothes are recycled in countries like Canada and Thailand before being shipped to markets mostly in the developing world. In East Africa, up to $125 million is spent on used clothes annually, a fifth of them imported directly from the US and the bulk from trans-shippers including Canada, India, the UAE, Pakistan, Honduras and Mexico. The East Africa imports account for 22 per cent of used clothes sold in Africa. Suspending the three countries from the 2000 trade affirmation would leave them short of $230 million in foreign exchange that they earn from exports to the US. That would worsen the trade balance, which is already $80 million in favour of the US. In trade disputes, numbers do not tell the whole story. Agoa now appears to have been caught up in the nationalism sweeping across the developed world and Trumponomics. US lobbies have been pushing for tough...

Kenya has emerged as the continent’s trailblazer in championing women’s representation in top management of companies, despite failing to attain the constitutional one-third gender requirement. A report by the Kenya Institute of Management (KIM) and the Nairobi Securities Exchange (NSE) shows that listed multinationals fared better than indigenous firms in women representation on boards, at 27 per cent, against 20 per cent. The number of women in boards rose to 21 per cent this year, from 18 per cent in 2015 and 12 per cent five years ago. “The number of women heading boards remains low, with just five of the 52 (out of 62) listed companies that responded in the survey headed by a woman, similar to what it was five years ago. We also note that like in the boardroom, women representation in senior management was a quarter, meaning that there is one woman for every four men in the senior management teams,” said KIM chief executive Muriithi Ndegwa. In terms of the average representation on boards of women, Africa came fourth at 13 per cent behind Europe and Australia at 26 per cent and North America at 20 per cent. The ratio was however higher than South America at eight per cent and Asia at nine per cent. NSE chief executive officer Geoffrey Odundo said that the presence of a diverse and inclusive organisation is one of the greatest business catalysts that exist to broaden the talent pipeline, enhance brand and corporate reputation. “For diversity and inclusion...

President Yoweri Museveni has approved the borrowing of Ush10.3 trillion ($2.9 billion) for the construction of the standard gauge railway from the Malaba border with Kenya to Kampala in the clearest signal yet that the regional infrastructure project is back on track. Uncertainty had hit the project after Uganda said it was considering building a railway through Tanzania after failing to get assurances from Kenya that it would extend the Mombasa-Nairobi line to Malaba. Kenya has since committed that its line, whose first phase to Nairobi was competed in June, will be extended in phases to Naivasha, Kisumu and eventually Malaba. The approval for the borrowing comes amid indications that China had agreed to fund the line only if it was a joint project between governments including Rwanda, the last stop of the Northern Corridor under the East Africa Railway Masterplan. Another line in the Central Corridor from Dar es Salaam to Burundi and Rwanda would complete the circuit meant to boost trade in the region. In a letter to parliament last month, President Museveni said the loan, which is Ush2.1 trillion ($600 million) more than the $2.3 billion contained in the feasibility study, should be on condition that concerns over the technical specifications and project costs raised by the Parliamentary Committee on Infrastructure in February would be addressed. The Treasury said the money included the costs of arranging for the loan from China Exim Bank, such as insurance, even as State Minister for Planning David Bahati suggested the higher amount could be the result of a...

The recently appointed UK trade envoy to Uganda, Mr Lord Dolar Popat, has called on Ugandan businesses to partner with UK firms based in Uganda to strengthen trade relations between the two countries. Speaking at the British Business Group Trade Forum at the Kampala Serena Hotel on Thursday, Lord Popat, said their recent appointment by the British prime minister shows the substantial commercial and investment opportunities between UK and Africa and the key to its success is having stable and secure markets. “My appointment reflects the growing importance of the Ugandan market and I will aim to strengthen the bilateral trade relationship,” he said. He added that with the expanded range of products aimed at ensuring that UK companies remain competitive, countries such as Uganda stand to benefit from addressing their infrastructure needs from the UK export credit agency. This is because increase in Chinese investments in Africa, is a clear opportunity for UK businesses which are long time partners in the development of major infrastructure projects given their engineering and consultancy expertise. He said UK firms are at the forefront of vital sectors in Uganda. Government’s take Mr Sam Batala, the assistant commissioner external trade at the Ministry of Trade advised Ugandan businesses to partner with UK businesses in Uganda and work together to facilitate transfer of knowledge and skills to produce high quality goods that can enter the UK market. “Uganda is an agricultural country and we have competitive advantage because of fertile soil, good climate and improved...

Uganda has had one of the strongest economic performances in sub-Saharan Africa over the past two decades, growing at about 8 per cent; more than doubling per capita income; and cutting poverty in half. But in recent years, growth has slowed and is likely to have reached less than 4 per cent last year. A difficult regional environment — impacted by the South Sudan conflict — slow private sector credit growth, and a drought have contributed to the slowdown. But there are also more structural, deep-rooted factors at play. Productivity growth has fallen, education standards have not kept up with the needs of a modern economy, and inequality has increased. The challenge now is to return to high and inclusive growth. At the International Monetary Fund, we believe that with the right policies, this is possible. Pave way for oil Uganda is expanding its infrastructure network. Improvements in transport and electricity are expected to provide space for more vigorous private sector-led growth. Oil-related infrastructure investment — including a pipeline, a refinery, roads, and an airport — is leading the way. These investments will pave the way for oil to start flowing, providing a boost to growth and public revenues. The focus on infrastructure will support growth, but should be complemented with measures to improve public investment efficiency. Ongoing efforts to enhance project selection, implementation and execution are essential to ensuring that the projects yield the expected growth through improved quality and efficiency. The emphasis on infrastructure also needs to be...

Trade minister Amelia Kyambadde has said no payment will be made until traders who supplied goods and services to the government of South Sudan are verified. Ms Kyambadde said her ministry will write to the ministries of Finance and Foreign Affairs to avail a report of confirmed traders to be catered for. She added that they will also write to the Speaker of Parliament Rebecca Kadaga to halt the process regarding the matter. “We cannot run away from you traders when they have unfinished business. Ten years of suffering is too much for one’s business to be affected. We are going to do our part to ensure that all the processes are properly done,” the minister told a group of aggrieved traders who met her in Kampala recently. Ms Kyambadde’s remarks followed the traders’ outcry, led by Ms Joan Akello, in which they demanded for equity in the impending payment process. The traders told the minister that the ministry of Finance plans to first pay off only 10 companies out of the 32 which were verified, with a reported $41m (Shs150b) having been earmarked for the purpose. They alleged that the 10 companies lined up to be paid are owned by four persons who are colluding with officials at the ministry of Finance. In a March 22, 2016 letter, President Museveni directed the Finance minister to study how government could raise money to rescue the business persons who supplied goods to South Sudan. “…then, the government can continue with its...

The formal launch of the once touted the mega economic bloc for Africa, the Tripartite Free Trade Area (FTA), faces further delay because only one country has so far ratified its creation out of 19 member states. A minimum of 14 ratifications are required for the agreement to come into force, combining three regional economic communities, the East African Community (EAC), Southern Africa Development Community (Sadc) and Common Market for Eastern and Southern Africa (Comesa). This emerged last week when Madagascar, a Comesa member, appended its signature to the Tripartite Agreement before senior officials of the EAC, Sadc and Comesa. "Egypt is the only country to have ratified the Agreement. A total of 14 ratifications are needed for the agreement's entry into force," officials at the event in Antananarivo were told. Under the Agreement, the three economic blocs were to merge into a single free trade area, the largest in Africa, with a combined Gross Domestic Product (GDP) of $ 1.3 trillion, making it also one of the largest FTAs in the world. Although the signing of the Agreement by Madagascar, only a few days after South Africa did so, the EAC secretary general, Liberat Mfumukeko, the current chairperson of the Tripartite Task Force, admitted that negotiations were going at a snail's pace and that little has been achieved. "There had been limited progress in Phase Two negotiations and the agreement on the movement of business persons," he said in Kampala on July 7th, hardly a week before the Antananarivo...

Traders said Ugandan trucks are not allowed to load from Tanzania’s district of Gisenyi Minister of Trade Industry and Cooperatives, Amelia Kyambadde is to engage her counterpart in Tanzania to find solutions to ongoing standoff between Ugandan traders and officials from Tanzania. This stems from revelations from traders that they are often harassed and charged different fares and sometime their goods are confiscated even when they meet the requirements. They made the call to the minister who was recently touring the Mutukula border post. Through the Rakai district chairman, Benon Mugabi, traders said Ugandan trucks are not allowed to load from Tanzania’s district of Gisenyi. He added that when smugglers run to Tanzania, it still takes lengthy clearing procedures to get into Tanzania to pursue them. He was joined by the chairperson of cross border women traders, Jane Benuza who reported that they are forced to pay more than two clearing agents to get their goods on the Ugandan side even when they have a certificate of origin. "You have to pay a clearing agent in Kyaka before getting to the actual border of Tanzania and then later you pay the one considered as the final agent on the Tanzanian side, when you inquire they brand you a noisy person and even harass you more ,the next time you go trading," explained Benuza. Kyambadde who is the chairperson of the EAC council of ministers promised to follow up the matter through the council of ministers at this year’s EAC summit,...