Thursday, 27 January 2011

Uganda’s NSSF taps new equity managers


Posted on 15 September 2010
From Globalpensions.com: Uganda’s National Social Security Fund is signing on new asset managers to help it manage its equities portfolio. Board chairman Vincent Ssekkono said: “In order to get maximum value of its shares and participate more actively in other listed companies, the fund is in the final stages of contracting fund managers and brokers to handle its equities business.”
An asset allocation was not provided, but Ssekkono said the NSSF invests in equities, real estate and fixed 

Tulow Oil "approaching the finishing line"


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 ...

Wednesday, 26 January 2011

US considers selling arms to Uganda


US embassy cables: 

Thursday, 06 December 2007, 12:56
S E C R E T SECTION 01 OF 02 KAMPALA 001848 
SIPDIS 
SIPDIS 
STATE FOR PM/WRA - STEPHANIE PICO 
EO 12958 DECL: 06/18/17 
TAGS MARRMASSPARMPGOVPRELUG 
SUBJECT: UGANDA MAY BE OPEN TO MANPADS STRATEGY 
REF: STATE 156001
Classified By: PolOff Jarahn Hillsman for reasons 1.4 (b) and (d).
1. (S/NF) Summary: Post has considered reftel Horn of Africa MANPADS Acquisition Engagement and Plan of Action Strategy for Uganda. Mechanisms proposed to help the GOU address counter-proliferation and destruction are feasible and timely. Post is confident that the GOU would welcome greater USG involvement. We have also determined that a Yemen-like acquisition plan could support GOU efforts to control MANPADS proliferation, but do not believe it to be necessary at this point. There are no political impediments to immediate engagement with GOU officials on the proposed MANPADS strategy. A sucessful strategy would incorporate a larger weapons accountability and destruction program to enlist wider GOU support for MANPADS destruction. End Summary.
-----------------------------------------
GOU Shares Counter-Proliferation Concerns
-----------------------------------------
2. (S/NF) The GOU has demonstrated its willingness to work with the USG to combat terrorism and further East African security initiatives, particularly in the area of weapons proliferation. Military and civilian authorities, starting with the establishment of the National Focal Point on Small Arms and Light Weapons in 2001, have deepened collaboration to tighten arms control regulations and have actively sought international partners to advance objectives. We therefore believe that the GOU would be receptive to U.S. assistance in drafting export control legislation and determining priorities. Given that the majority of the MANPADS currently in Uganda were purchased by the government, U.S. intervention with the "supply country" might not be welcomed by the GOU. Such action would be considered by some as meddling in internal security matters.
--------------------------------------------- --------------
GOU Committed to SA/LW DESTRUCTION; Open to U.S. Engagement
--------------------------------------------- --------------
3. (S/NF) The GOU in 2007 worked with SaferAfrica, UNDP, the U.S., and other international partners to identify and destroy small arms and light weapons stockpiles, including MANPADS. Minister of Defense Crispus Kiyonga reaffirmed this commitment publicly, and expressed Uganda's desire to work with the U.S. and other international partners to meet the country's obligations under the UN Program of Action on Small Arms and Light Weapons, the Nairobi Protocol, and the National Action Plan on Small Arms and Light Weapons. We believe that the GOU would welcome greater U.S. engagement in the area of stockpile management and destruction. However, a more broadly focused assistance package that helps with overall weapons accountability and destruction would likely garner wider GOU support.
--------------------------
Yemen Acquisition Possible
--------------------------
4. (S/NF) A Yemen-like acquisition plan could be reached with the GOU. The primary Ugandan counterpart would be the Ugandan People's Defense Forces (UPDF). Currently, we do not believe there is black market activity to warrant such a program.
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Timing And GOU Partners
-----------------------
5. (S/NF) The GOU has demonstrated political will to tighten arms proliferation, combat global terrorism, and push forward on East Africa peace and security initiatives. This commitment suggests that Uganda would be open to immediate engagement.
6. (S/NF) The primary GOU interlocutors would likely be the following:
--Ministry of Defense;
--Uganda People's Defense Force (UPDF);
--National Focal Point on Small Arms and Light Weapons;
--Parliament's Committee on Military and Internal Affairs; and
KAMPALA 00001848 002 OF 002
--Ministry of Foreign Affairs.
--------------------------------------------- ----
Pitfalls OR Challenges to Strategy Implementation
--------------------------------------------- ----
7. (S/NF) The GOU's military sales relationship with North Korea might hinder engagement. For three years, the GOU has refused to allow us access to its classified budget, which could potentially include the sale of MANPADS by the GOU. CHRITTON

U.S. embassy warns of possible attacks in Uganda


Poltical Risk Increases 

American urged to stay away from large public gatherings, especially those with large numbers of westerners and no obvious security measures.


The U.S. embassy in Uganda is warning its citizens in the east
African nation that local terror groups are interested in attacking
 American interests.
clearpxl
The embassy is particularly concerned about the month of February
 because Uganda will be holding presidential elections at that time.
The embassy on Tuesday advised U.S. citizens to stay away from
 large public gatherings, especially those with large numbers of
westerners and no obvious security measures, reports stated.
The warning also urged Americans to always keep a charged
cell phone on hand and report any suspicious activities.
The U.S. embassy in Burundi issued a similar warning to
American nationals there.
Islamic militants fighting Somalia’s U.N.-sponsored interim
 government have threatened attacks on Uganda and Burundi,
which lend troops to an African Union peacekeeping mission
 in Somalia.

Kenol angles for Uganda oil with Phoenix buyout



A Kobil petrol station. Photo/FILE
A Kobil petrol station. Photo/FILE 
By VICTOR JUMA  (email the author)
Posted Wednesday, January 26 2011 at 00:00
Oil marketer KenolKobil is set to acquire a Ugandan oil dealer as it eyes that country’s oil find, which threatens to hurt Kenyan oil firms’ export earnings.
The firm has signed a deal to acquire Phoenix Uganda Petroleum Limited, a depot with a capacity for 1,800 cubic metres of fuel and three service stations, raising its total depots and service stations in the Ugandan market to two and 66 respectively.
Uganda will from next year start building an oil refinery to meet local demand and later scale up capacity for exports, a move that is set to cut off petroleum imports from Kenya, hurting oil marketers.
More than 700,000 tonnes of petroleum products — including liquefied petroleum gas —consumed in Uganda annually is supplied by Kenyan oil firms.
Kenol says the expanded footprint will put it in a position to make up for an expected reduction in the oil export business.
“The oil transit business from Kenya will be diminished and the extent of business loss will depend on the range of products Uganda will be refining,” said Patrick Kondo, the head of mergers and acquisitions at Kenol.
He said the company sees an opportunity in exporting finished oil products from Uganda to other regional markets, including Kenya that are expected to start importing oil products from Uganda that are set to be cheaper, saving on freight and insurance charges.
Uganda will refine 25,000 barrels per day (bpd) to meet its local consumption and later refine up to 200,000 bpd targeting the export markets of Kenya, Rwanda, Burundi and DRC, which are served from the Kenyan market.
Landlocked Uganda relies heavily on Kenya to import over 700,000 tonnes of refined oil products annually but its discovery of 2.5 billion barrels of crude oil deposits is set to change this.
Building of the refinery begins next year and it is expected that by 2016, Kenya’s export of refined oil products to Uganda will cease as the oil-rich country consumes its home-made products, hurting the fortunes of Kenyan oil marketers.
This has seen firms like Kenol scout for new opportunities as they seek to diversify away from the Kenyan market that rakes in most of their revenues.
Mr Konda said Kenol is looking at other acquisition opportunities in Uganda and Burundi.
The latest acquisition is the second for Kenol in the Ugandan market after the firm took over Galana Oil Uganda Limited in 2000.
Kenol sells liquefied petroleum gas (LPG), bitumen, petrol, and diesel in Uganda.
Aside from the expansion of its service station and depot network, Kenol is also planning to build a modern LPG filling plant that will have capacity to meet its needs and those of its rivals.

Investing in real estate in Uganda


Investing in real estate
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).
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So how does one gain by investing in real estate?
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.

Karuma hydropower project

THE cost of the proposed Karuma hydropower project has almost doubled due to escalating prices of raw materials and high interest charges. A new engineering study has put the total project cost at $2.2b, up from the previous $1.2b.
"The capital cost for the project will be disbursed during the project construction period and escalation of 5% per annum has been considered for working out the completed cost of the project," the study said.

it was conducted by Infratech Private of India.Paul Mubiru, the director of energy in the energy ministry, was disappointed by the news.
"We expected the project cost, including the construction of transmission lines, to be about $1.8b," he said in an interview.
The project, which is expected to start in May, will last five years. The first 100 megawatts are expected to be commissioned in January next year.

The project, which will be upgraded to 600MW from a 200MW capacity, will come as a relief, not only to Uganda, but also to the East African states facing an acute energy deficit.
Power demand in the region is increasing, pushing up the need for electricity exportation.Uganda intends to execute the project through a public-private partnership and has already invited interested international firms. The firms are being evaluated.

"About 70% of capital costs of the project are considered as debt," the study disclosed, adding that the debt will be payable in 15 years after 62 months of construction and six months of moratorium (pause).The project shall be financed at an interest rate of 10%. This means that the end-user tariff in the first year will be $10.21 cents per unit. However, the average tariff for a period of 40 years will be $8 per unit.
The current end-user tariff is about 25 US cents per unit for electricity from diesel-powered thermal generators.The Uganda Electricity Generation Company will be the Government nominee and licencee of the project.

Uganda has for the past 10 years experienced erratic power supply, coupled with high power rates, losses and low access, which has slowed the development.This is because the impressive economic growth registered in the 1990s was not matched by investments in the power sector as demand outstretched supply.
An updated hydro-power master plan has indicated that Uganda's electricity demand is expected to triple in the next 10 years, assuming the current economic growth trends continue. This will pave way for increased investments in the energy sector.
"Based on the current economic growth, which is at 7%, domestic power demand will increase from about 370 megawatts to 1,130 megawatts in 2023," the plan indicated.