By Frederic Musisi & Mark Keith Muhumuza

Kampala — Uganda’s Finance minister Matia Kasaija and his Kenyan counterpart are yet to get confirmation of the specific dates for further negotiations and possible financial closure from China’s ministry of Commerce which supervises EXIM Bank, the prospective financier of the Standard Gauge Railway (SGR), Daily Monitor has learnt.

Technocrats from ministries of Finance and Works as well as the SGR project led by Mr Kasaija had been scheduled to travel earlier-on for the meeting on February 27 (yesterday), but the arrangement suffered setbacks. The Ugandan team was supposed to travel with the Kenyan delegation to Beijing, China.

Mr Kasaija, yesterday, said they will travel any time but confirmed that they are yet to get the requisite clearances.

“It is true we did not travel; first, because we have not yet got confirmation from China’s ministry of Commerce about the date of meetings, and secondly we are waiting for clearance from their ministry of Foreign Affairs which did not come through–because as you might know this is a government-to-government meeting.”

The meeting is expected to reach a final understanding regarding the financing of the multi-billion dollar railway from Nairobi to Malaba on the Kenya side, and Malaba to Kampala on the Uganda side. The stretch from Mombasa to Nairobi is complete and is expected to be commissioned this June.

If the discussions are fruitful, Uganda expects an advance of $2.8b (Shs8 trillion) or 85 per cent financing for construction of the Malaba-Kampala stretch (273km). Each kilometre will cost $8.4m (approximately Shs30b).

The plan is that after the Malaba-Kampala stretch (the eastern route), Uganda will embark on the western route from Kampala to Ntungamo near the border with Rwanda and then northern route from Tororo to Packwach near the South Sudan border. The entire SGR project in Uganda is expected to cost $12.8b (Shs46 trillion), making it the most expensive infrastructure project in Uganda’s history. On the Kenyan side, the line (120km) running from Nairobi to Naivasha is expected to cost$1.7b (Shs6 trillion), the line (266km) from Naivasha to Kisumu port cost $3.6b (Shs13t) while the 107km line connecting to Malaba will cost $1.7b (Shs6t).

Beijing, which has for months been very guarded on financing the railway from Nairobi to Kampala and has been shuttling back-and-forth with economic calculations, to eventually release the money boxed officials from Uganda and Kenya into a tight corner to agree, guarantee and ensure timely construction of the connecting routes for the railway to run seamlessly up to Kampala for it to make sense.

By Alon Mwesigwa

Tanzania has yet again refused to endorse a regional trade pact with the European Union, saying the deal stood in its way to industrialization.

This stand, however, threatens to split the bloc as Kenya and Rwanda that have already signed the deal see other partner states as reading from a different scrip. Last weekend, President Museveni met his counterpart John Pombe Magufuli where they talked about the possibility of ratifying the Economic Partnership Agreements (EPAs).

These are trade agreements that the European Union is negotiating with blocs in Africa, Caribbean, and Pacific (ACP) – majorly former colonies. Once signed, the EPAs would lead to up to 82 per cent opening of the East African markets to European goods tariff-free in a span of 25 years.

The EU argues this would be reciprocal as it would also take in EAC products tariff-free. The deal would also compel the partner states not to impose export taxes on key raw materials, a move seen by analysts as likely to stall the region’s quest to industrialize.

President Magufuli reportedly told Museveni that Tanzania will not sign until outstanding issues have been addressed. In statement on Sunday, Kampala said “the two leaders urged experts in their respective governments to continue studying the matter and advise the principals who are also consulting further”.

On February 2, Museveni met Magufuli in Addis Ababa at the AU summit where they agreed to meet later this month and chart the way forward. In Addis Ababa, Museveni said he was “more worried about the unity of East Africa”.

Burundi has not signed be- cause it is under EU sanctions. Even if they don’t sign, Uganda, Rwanda, Burundi, and Tanzania would still access European market under the Everything But Arms (EBA) arrangement because they are still classified as least developed countries. It is only Kenya which is non-least developed and could see high tariffs imposed on its goods if it didn’t endorse EPAs.

The EU is the biggest market for flowers from the region. Last November, the Tanzanian legislators unanimously agreed that their country must delay signing the deal as they study the full impact it could have on the country’s infant industries. The EAC and the EU finalised the EPA negotiations in October 2014, seven years after their start in 2007.

The agreement was expected to be signed in July 2016 on the sidelines of the fourteenth session of the United Nations Conference on Trade and Development (UNCTAD 14), but the signing was postponed after Tanzania expressed the need for more time to review the content of the EPA and evaluate its potential economic impacts.

Civil society and analysts have spoken widely against the EPAs, saying they were agreements between unequal parties where the EU was more primed to benefit.

BREXIT

In a statement last month, the Southern and Eastern Africa Trade Information and Negotiations Institute (SEATINI) said that on top of losing taxes through waivers on imports from Europe, there were more serious issues that EAC should consider before signing these deals.

“This liberalisation seems to be thttp://www.monitor.co.ug/aking a static approach to development which does not envisage Uganda and the East African region graduating to producing either industrial inputs or the capital goods,” SEATINI said.

Also, Britain’s exit from the EU should be of concern to the parties before they ratify the agreements. SEATINI said the EAC-EPA was concluded before Britain voted to get out of the European Union.

“The EAC should take into account the implications of the Brexit when considering whether to sign and ratify the EPAs given the fact that the UK accounted for 35.6 per cent of the EAC exports to the EU in 2015. Therefore, the Brexit reduces the value of EU’s market for the EAC,” the statement said.

All eyes are set on the April regional summit, where heads of state are expected to reach breakthrough on EPAs.

By Michael Eboh

Secretary-General of the Organisation of Petroleum Exporting Countries, OPEC, Mr. Mohammed Barkindo, yesterday, disclosed that the worst days for Nigeria due to the low price of crude oil were over.

He said Nigeria’s ability to weather the storms of the low price of crude oil was a miracle.

Speaking during a courtesy visit to the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, Barkindo said confidence was returning to the Nigerian petroleum industry, due largely to the major macro-economic decisions taken last year by OPEC and non-OPEC member countries.

He said: “We have gone through the worst energy cycle in recent memory. Some of us, who have been around for a quite a while, have witnessed all these five cycles and it is a consensus in terms of the gravity of these cycles, prices have crashed by over 80 per cent from the fall of 2014 to January 2016.

“How you survived as a government as an institution under this great industry remains a miracle. I have visited all other countries and I have seen how they are struggling.

“But you have weathered the storm. I think the worst is behind us, thanks to your (Nigeria’s) leadership in the run up to the historic agreement of last year, beginning with the Algiers Accord on September 20.”

Barkindo commended the giant strides the country has made within this troubling period in the global petroleum industry.

“I have been visiting many countries over this period, and I have seen firsthand how they have been struggling. However, here, I think probably we have not sold our achievements effectively, widely and efficiently,” he noted.

Commends FG’s JV cash call exit

He applauded the effort of the country in addressing the lingering issue of Joint Venture Cash Call, stating that over the years, previous administrations had battled to address the issues without success.

“Many of my colleagues that we served together would testify that government after government, we had battled with this issue continuously without solutions.

“But the day I got the information that you have been able to overcome this issue that has beleaguered this industry as well as government, I think you made my day and those of participants in the industry who know the battle of previous governments over the issue.

“The approach has been innovative, the solution is very practical. You are clearing an overhang of debt that is too high, yet maintaining the level of production and also focusing on an incremental growth that would continue to sustain not only the industry but also the domestic economy.”

Oil industry lost $1trn to low oil price

He lamented that due to the crash in the price of crude oil, Nigeria as well as other OPEC member countries have lost about $1 trillion since the crash, in terms of deferred projects and outright cancellations across the supply chain, upstream, midstream, downstream.

He said: “This is the greatest threat that is facing future supply –the security of supply. Our industry is capital intensive; we make consistent investments in order not only to maintain current production, but also to take care of reserves that would produce as well as secure security of future supply.”

Also speaking, Kachikwu commended Barkindo for the giant strides he had taken at OPEC since his assumption of office, stating that in the past, OPEC had lost its credibility, but Barkindo had helped restored it.