The Parliamentary inquiry into the fitness of the SABC board to hold office will only resume its work on Friday.

It was expected to kick off on Tuesday, with former public broadcasters’ board chairpersons Ellen Tshabalala and Ben Ngubane testifying.

Inquiry chairperson Vincent Smith confirmed the three-day delay.

“It was postponed to Friday because former SABC board chairperson Ben Ngubane requested an extension to prepare adequately for the inquiry,” Smith told News 24 on Monday.

He confirmed that Tshabalala would also appear before the adhoc committee.

Qualification lie

The disgraced Tshabalala resigned in 2014 following a furore over her qualifications. A parliamentary inquiry found her guilty on two misconduct charges.

The charges related to allegations that she lied about her qualifications to Parliament and that she lied under oath when she said in an affidavit that her qualifications had been stolen during a burglary at her home.

However, Unisa revealed that she had registered for a BCom degree in 1998, and again in 1996, but had failed to obtain the qualification.

During the inquiry in 2016, Tshabalala was fingered for having a hand in the appointment of Hlaudi Motsoeneng as Chief Operating Officer, despite a Public Protector’s report which found that he had lied about his matric certificate, and that he should face a disciplinary inquiry.

Former acting chief executive Phil Molefe told the inquiry that Ngubane had ordered him to approve a R500 000 unlawful salary hike for Motsoeneng in 2011.

When Molefe refused to sign off on the increase, he testified under oath that Motsoeneng told Ngubane: “Chair, I told you that this is not our man, I am going to Pretoria tonight.”

The adhoc committee will be racing against time to submit a final report to Parliament by February 18.

Smith, however, remained confident that they would meet the deadline, despite the delay.

Source: News24

By Julius Businge

BoU cut its central bank rate from 13% in October to 12% in December to stimulate economic activities

As 2017 business starts commercial banks are optimistic that the sector will register a surge in profitability on the back of improving economy and a reduction in Non-Performing Loans.

Speaking to The Independent in exclusive interviews, top bank managers made it clear that this New Year will be generally better for business enabling banks to post better returns.

Patrick Mweheire, the chief executive officer at Stanbic Bank, Uganda’s largest bank, for instance, said the financial industry is now gearing up for a more robust phase of the economy. The economy is projected to record a 5% growth this financial year compared with 4.6% a year before, according to latest data from Bank of Uganda.

“With the election behind us and a looser monetary policy in place, we will see increased economic activity in 2017,” Mweheire said.

His comments came barely a fortnight when BoU announced a cut in the Central Bank Rate from 13% to 12% in December to lure banks to reduce interest rates to stimulate private sector borrowing and economic growth.

Samuel Odeke, the CEO at Commercial Bank of Africa said of prospects in 2017: “I am very optimistic that the banking industry will grow.”

Industry executives said they are encouraged by governments undertaking of several infrastructural projects arguing that the developments would in the medium to long term create multiplier effects that would help the other sectors of the economy to grow.

They cited the $20billion that will be invested in the country’s nascent oil and gas sector in the next three years saying the investments will have a much more trickle-down effect into the local corporate and small and medium enterprises and hence spurring economic activity.

Last year’s bank performance

Last year was generally a bad year for the banking industry as it chocked on bad loans leading to the reduction in profitability.

The worst scenario happened when one of the country’s leading banks, Crane Bank, was the worst hit hard; with its core capital wiped out by more than half, prompting BoU to take-over its management.

According to BoU, the NPLs to gross loans jumped from 3.8% in September 2015 to 8.3% in June 2016, but marginally declined to 7.7% in September 2016.

Bankers attributed the hike in NPLs to regional instability especially south Sudan and bad performance of speculative sectors like real estate – these failed businesses and borrowers [of these businesses] could not honor their loan obligations.

The average return on equity (ROE) and return on assets (ROA) declined from17% and 2.7% to 15% and 3% respectively.

However, as at the end of Sept. 2016, the total capital to risk weighted assets increased by 3 percentage points to 23% compared with 20% during the same period last year.

On a positive note, the BoU report described the sector as sound, citing favorable status of liquidity and capital buffers remaining well above the minimum requirement.

Latest data

Latest data from the BoU’s State of the Economy Report released last December indicates that over the last five years, Uganda’s economy has grown at an average of 4.5% compared with an average of about 7.5% between the years 2000 and 2011.

“The domestic economic growth outlook remains subdued, although the low point of the cycle appears to be behind us,” reads in part the BoU report.

It is this gloomy outlook and harsh economic environment that is currently making banks unsure of whom to extend credit especially on personal loans.

The BOU’s take-over of Crane Bank in October last year was reportedly attributed to few huge companies and powerful individuals who borrowed and failed to honor their loan obligations due to a bad economy.

It is on this basis that banks could still concentrate their bigger efforts towards lending to the government through treasury bills and bonds which are risk free at the expense of private sector borrowers.

But even in the TB segment, BoU reports indicates that yields on all categories of TBs were on a downward trend hence signaling limited profitability.

According to the report, the yields on the 91-day, 182-day and 364-day Treasury bills (T-bills) averaged 14, 15, and 16 % in the three months to November 2016, down from 20, 22 and 23%, respectively during the same period in 2015.

Also for T-bills, the yield on the benchmark 2-year Treasury bond (T-bond) also declined to 16% from 21% during the same period.

But business executives say the only way to avoid NPLs is for commercial banks to lower interest rates that will also translate into lower costs of doing business.

“There is nobody who gets a loan and fails to pay, whoever fails it means the terms and conditions are not favorable,” said Martin Okumu, the head of communications at the Uganda National Chamber of Commerce and Industry.

Okumu, like his friends at Kampala City Traders Association, Private Sector Foundation Uganda and Uganda Manufacturers Association, argues that higher interest rates lead to high costs of operations that eventually lead to high prices.

ANALYSISBy Lominda Afedraru

Though Hibiscus sabdariffa, also known as Roselle, grows in the wild, it is domesticated in some parts of Northern Uganda as a traditional vegetable. Many farmers are growing it on medium to large scale.

Besides being part of the diet, the plant has a number of medicinal properties and the products made from it have certain health benefits.

But a youth/women’s group in Arua District, Ayivu Women Poverty Alleviation Association, is making other products from Roselle such as wine.

Started in 2002, the association has 35 mainly female members. Many of them own other businesses such as saloons, poultry farms, retail shops but the wine and juice business is done jointly.

The proceeds are added up and shared at the end of the year.

In 2014, they joined an entrepreneurship initiative supported by International Labour Organisation (ILO) and European Union (EU) to train youth from various districts in business innovation.

After the training, they applied for a grant as a startup capital and were given Shs27m.

“When pitching our business idea, we focused on value addition on non-timber products and natural vegetative cover with medicinal and nutritional benefits,” explains Damaline Amaguru, the group’s coordinator.

“We majored in hibiscus which we collect from the wild and also buy from farmers growing hibiscus for consumption.”

Dried flowers are used in processing wine, juice and powder. The wine making activity started last year.

Fresh hibiscus is harvest, crushed and dried. Once dry, it is soaked in cold water overnight and sieved to get the liquid. Sugar, pineapple juice or grape juice is added for the right flavour.

The sugar is heated before it is added to the mixture and left to ferment for three months.

The group prefers to process a 40 litres of wine at a time, where mixing the ingredients can be apportioned easily.

Therefore, it will require 3kg of dried hibiscus and 10kg of sugar plus a litre of pineapple or grape juice.

It is made to ferment in 40-litre jerry can with an outlet for fresh air to enter.

The wine is packaged in 700ml bottles, which are sold at Shs20,000 each. However, the members buy it at Shs15,000.

The group has plans to package their wine in smaller quantities to suit various consumers such as smaller bottles which they can sell at Shs10,000.

“To process wine and juice, we bought a miller to crush the hibiscus, blender for the juice,” Amaguru points out.

EU head of cooperatives, Michelle Labeeu encouraged those, just like Ayivu Women Poverty Alleviation Association, who benefited from the three-year project, to continue with their innovations.

Citing the statistics, she noted that 40 per cent of the population comprises youth, between the age of 14 to 18. This means entrepreneurship innovations will help solve the challenge of youth unemployment.

By Kagondu Njagi

Weru, Kenya —Insects like termites can provide additional nutrition and income when extreme weather hits traditional harvests

The knee-high dome on Ikung’u Kathimbu’s farm in Weru village, eastern Kenya, shelters an unusual crop: a termite swarm.

Kathimbu walks around the structure covered with banana leaves, drumming on a tin-like vessel and stamping his feet on the ground.

“The noise is to make it sound like rainfall, so that the termites are tricked into coming out of the ground,” he told the Thomson Reuters Foundation.

Farmers’ traditional crops have suffered here in recent years due to long periods of drought. Some are taking up construction work to supplement their income, while others like Kathimbu are harvesting insects whenever the rainy season is delayed.

At this time of year, Kathimbu’s farm should be sprouting with a waist-high maize crop. But only wilting cassava stems populate the parched terrain.

“Five years ago I could store enough maize and beans in my granary to feed my family for seven months,” said the father of six. “But now all my grain is depleted three months after the harvest, and only cassava is left.”

Kathimbu and his family are not alone in grappling with this situation. Willy Bett, Kenya’s cabinet secretary for agriculture, livestock and fisheries, declared in November that the country was facing severe drought.

“The intensity of drought varies from one area to another,” he told a congress of the Seed Trade Association of Kenya. By his estimation, Kathimbu’s village lies in one of the most affected areas.

According to the Nairobi-based International Centre of Insect Physiology and Ecology (ICIPE), a growing number of farmers in eastern and western Kenya are now harvesting and eating insects like termites to cope with prolonged drought.

TASTE FOR TERMITES

Termites now supplement Kathimbu’s family’s meal of boiled cassava – as well as its income.

“When I have picked up enough termites, I take some to the nearby Kambandi open-air market and sell them to other families,” Kathimbu explained. A cup of insects fetches KES 10 (almost $0.10).

The most he has ever made in a day selling termites is KES 500 – which is “still far less than I used to make selling maize”, he said.

On good days, though, Kathimbu uses the extra money to buy maize flour to make ugali, a popular white bun-like dish and a treat for the family.

Another advantage of termites is that they are rich in protein, according to ICIPE scientist Komi K.M. Fiaboe.

ENVIRONMENTAL THREAT

But farmers like Kathimbu need to establish proper insect farms to prevent damage to other crops, said Fiaboe.

“While termites help decompose the soil, they can also attack crops when the soil lacks humidity and minerals,” he explained.

He suggested breeding insects that multiply quickly and can be harvested easily, like termites, crickets and grasshoppers, which do less damage to crops than some other species like locusts.

A recent study published by the African Journal of Food, Agriculture, Nutrition and Development found that people still see insects as ugly, smelly and poisonous creatures that cause allergic reactions.

“This is because people harvest wild insects and consume them raw, leading to negative effects on their health,” explained co-author Kennedy Pambo, a researcher at the Jomo Kenyatta University of Agriculture and Technology.

Cutting down trees and digging up the ground to make traps like Kathimbu’s termite mound also damages the environment, he said.

“This can be solved by rearing insects in a controlled manner, instead of harvesting them at random,” said Pambo.

“When harvested, they should be mixed with other foods like maize, and milled into flour. The resulting porridge is nutritious because it has high levels of starch and protein,” he added.

($1 = 103.6000 Kenyan shillings)

(Reporting by Kagondu Njagi; editing by Zoe Tabary and Megan Rowling. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women’s rights, trafficking, property rights and climate change. Visit http://news.trust.org)

By Thupeyo Muleya

A South African magistrate has thrown out a bid by 300 Zimbabwean farm workers who sought to recover R1,6 million from a Limpopo farmer who has been underpaying them for the last 10 years. Mr Van der Walt, the proprietor of Johannesburg Farm in Lephalale area, and nine other top managers had been dragged to court for assault and kidnapping of the Zimbabweans, but was freed after witnesses failed to show up several times at the courts.

Sources close to the case said 36 of the witnesses failed to attend the trial when that country’s Home Affairs Department deported them under the guise that they would be called when the trial resumes.

However, most of the witnesses were allegedly never called to testify against Mr Van Der Walt. Department of Labour spokesperson for Limpopo Province Miss Lerato Makomene confirmed the developments yesterday.

She said Mr Van der Walt had also been separately charged by the Department of Home Affairs for employing illegal immigrants.

“The Department of Labour had also filed another charge of labour exploitation, but our case is now weak since the court has thrown out the case. “Our hands are tied. There is nothing more we can do at law,” said Miss Makomene.

She said the farmer was accused of forcing the Zimbabweans to work from 6am to 11pm, and paying them R70 instead of the government-stipulated R103 for an eight hour-shift per day.

“We tried to bring him to the round table without success, and hence, we had to resort to legal action,” she said.

The expelled workers’ spokesperson, Mr Thembani Ndlovu, who is a former foreman at the farm, could not be reached for comment yesterday.

By James Ngunjiri

Nairobi is on the global watchlist of top five fast modernising cities that are attracting new global business on growing realisation that big companies cannot operate from one sub-Saharan location in South Africa.

The city is also taking off as a hub for global corporations looking to establish an office to cover the East African region, according to Global Cities – The 2016 Report by Knight Frank.

Big companies with global reach have come to the conclusion that they need to operate from multiple locations and Nairobi is a natural starting point in entering or expanding to new regions.

Nairobi has been termed as demonstrating Africa’s rapid modernisation and joins other cities like Dubai, United Arab Emirates capital, which is said to have pulled clear of past difficulties and is expanding as a hub for investment, tourism and transport.

Others are Kuala Lumpar in Malaysia, Bangkok in Thailand and Moscow, Russia.

The report indicates that around 1.8 million square feet of modern shopping mall space was opened in 2015 and the space forecast to increase.

“Given that the mall stock previously had totalled 980,000 square feet, this amounts to a revolution in the city’s retail experience, which matches the huge economic and demographic changes that have unfolded in Kenya,” said James Roberts, the chief economist at Knight Frank.

With the world’s cities predicted to add 380 million new citizens in the next five years, new mass transit systems, utilities and faster connections to markets will be needed.

The Lamu Port and Lamu-South Sudan-Ethiopia transport Corridor (Lapsset) has been termed as one of the global infrastructure projects that will be generating new business clusters and creating real estate opportunities.

The project consists of a new 30-berth port and oil refinery at Lamu, which will be connected to Nairobi and the borders of Ethiopia and South Sudan by rail, road and oil pipeline.

Other mega infrastructure projects include; China’s global railway links – China is using rail to speed up freight transport to Europe on a route running through Russia or via Iran and Turkey.

The Chinese are also constructing the Standard Gauge Railway (SGR) from the Port of Mombasa to Nairobi and these projects form part of China’s one belt, one road programme to enhance trade routes.

In Ethiopia, a new Chinese-funded railway line between Addis Ababa and the Red Sea port of Djibouti was expected to begin operations before end year.

In Nigeria, a Chinese firm won the $12 billion (Sh1.212 trillion) contract to build an 870 mile railway between Lagos in the West and Calabar in the East.

Other projects are; The Delhi – Mumbai Industrial Corridor – This is a development zone that will be targeted for investment to build up new industries to support India’s rapid urbanisation.

Expanding the Panama and Suez Canals is another mega project. Presently, ships queue to transit the Panama Canal whose original locks are restricted to ‘panamax’ ships that carry around 5,000 containers.

A new set of locks completes construction by end year that will offer passage to ‘post-panamax’ ships that can carry up to 13,000 containers.

A super airport – In Dubai, Al Maktoum International Airport which opened in 2010, is to be expanded from a current freight capacity of one million tonnes of cargo per annum to 16 million tonnes.

The report notes that Kenya is seeing a surge in electronic payments via mobile phone.

“The country is undoubtedly a developing world success story,” said Mr Roberts.

Kenya’s Economic Survey 2016 Outlook showed that last year mobile telephone subscriptions increased to 37.7 million, resulting to penetration rate of 85.4 per cent.

Swelling middle class

Internet subscriptions increased significantly from 16.4 million in 2014 to 23.9 million in 2015. The number of licensed Internet Service Providers (ISPs) increased from 177 to 221 over the same period.

The number of mobile money transfer service subscribers grew to 26.8 million last year, with total amount of money transacted through mobile platform expanded by 18.7 per cent to Sh2.816 trillion over the review period.

The global cities report said that while agriculture retains a large share of Gross Domestic Production (GDP), the country is developing a broad-based economy with rising services and production industries.

“The country is a fast growing centre for Information Technology (IT) and telecom industries in Africa, and output from Information and Communication industries has risen by 30 per cent between 2011 and 2014 in constant prices.

Finance and insurance output is up by 24 per cent over the same period,” the report showed.

For 2016, the International Monetary Fund (IMF) is forecasting Kenyan GDP to expand by nearly 7.2 per cent, compared to 2.1 per cent for South Africa and five per cent for Nigeria.

As a result of this economic transformation, Mr Roberts said the ranks of Kenya’s middle class are swelling thanks to so much growth in service industries.

“They are now living, working and shopping ever more in line with developed world expectation, as well as a modern retail experience and international brands, there is rising demand for food and leisure outlets, now that shopping is increasingly combined with socialising. This is why Nairobi needs more modern retail stock,” said Mr Roberts in the report.

United Nations (UN) is forecasting that by 2020, the country’s urban population will expand to 14.7 million people, an increase of nearly 2.8 million.

Knight Frank’s head of London Residential Research, Tom Bill said that for investors and landlords there are clear long-term rewards in the world of short-term rental accommodation.

“Cities that embrace the flexibility of models like serviced apartments will reap the economic rewards,” said Mr Bill.

The report said ensuring quality levels of short-term accommodation will be a challenge, particularly given that future economic growth will be dominated by emerging markets.

For the serviced apartment market, it underlines the growing importance of branding and the uniform quality of services and booking systems.

For example, the report said the quality of serviced apartments in Kenya matches that of a hotel, but it’s done relatively informally to date. “The next level will mean more professionalism and a branded type of offer,” it stated.

The country has also been identified as easy in doing business.

In the World Bank’s Doing Business Index for 2017, Kenya climbed 21 positions to rank 92nd out of 190 countries.

That included jumps of 34 positions for ‘Starting a Business’, 21 positions for ‘Getting Electricity’, 25 positions in ‘Protecting Minority Investors’, and 48 positions for ‘Resolving Insolvency’.

UN notes that there is going to be more demand for modern retail over the next five years, although the shopping development pipeline is ready to meet the challenge.

By next year, a further 1.3 million square feet of modern retail space will complete development in Nairobi, as the city is expanding from being the economic focus of East Africa into its biggest modern shopping destination.

By Frederic Musisi

Kampala — President Museveni and Cabinet sanctioned the Shs6b payout as “a reward” to officials in various ministries and agencies who handled the case between Uganda Revenue Authority (URA) and the UK-based oil company Heritage, according to both official and unofficial accounts.

The money was shared among 42 officials who were subdivided into three categories – core, noncore and support staff, people familiar with the matter said.

Following URA’s court win against both Heritage and the Anglo-Irish Tullow Oil Uganda Ltd, a subsidiary of Tullow Oil Plc, President Museveni in late 2015, hosted the government team that “put up a spirited fight” to recognise them for their efforts and it is here that the idea of the officials bagging “a honorarium” was mooted.

For the deal to materialise, sources added, the team had to appear organised and designated “a would-be accounting officer”, in this case the URA Commissioner General, M

President Museveni and Cabinet sanctioned the Shs6b payout as “a reward” to officials in various ministries and agencies who handled the case between Uganda Revenue Authority (URA) and the UK-based oil company Heritage, according to both official and unofficial accounts.

The money was shared among 42 officials who were subdivided into three categories – core, noncore and support staff, people familiar with the matter said.

Following URA’s court win against both Heritage and the Anglo-Irish Tullow Oil Uganda Ltd, a subsidiary of Tullow Oil Plc, President Museveni in late 2015, hosted the government team that “put up a spirited fight” to recognise them for their efforts and it is here that the idea of the officials bagging “a honorarium” was mooted.

For the deal to materialise, sources added, the team had to appear organised and designated “a would-be accounting officer”, in this case the URA Commissioner General, Ms Doris Akol, to lead the process with advice from the then Attorney General and approval from Cabinet.

“President Museveni accepted the proposal but on condition that all applicable taxes are deducted,” a source noted.

Ms Akol, who prior to becoming the URA commissioner-general, headed the body’s legal department that led the court battles against both Tullow and Heritage, was not readily available for comment on the matter as she did not pick or return our calls by press time.

However, Finance ministry spokesperson Jim Mugunga, besides clarifying that it was Shs6b and not Shs7b as the online news website ChimpReports that broke the story indicated, defended the payout as a recognition of the efforts of the officials involved.

“The honorarium is less than 1 per cent of the total money that the team was able to secure from the two cases,” Mr Mugunga argued. “And besides, all the money paid out was taxed.”

Asked why and who tasked URA to distribute the money, Mr Mugunga said the Treasury did so to ensure that all applicable taxes were collected.

After Heritage sold its 50 per cent interest in Uganda’s oil fields in August 2010 at $1.5 billion (Shs5 trillion) to Tullow, yielding the first biggest windfall of the country’s nascent petroleum sector at the time, URA slapped a $404 million (Shs1.4 trillion) capital gains tax on the transaction.

The tax dispute became a protracted legal battle and different courts, including a Ugandan Tax Appeals Tribunal and a commercial court in London, took four years to resolve the matter. A recent expose by the International Consortium of Investigative Journalists showed that Heritage knew about the imminent tax liability weeks before it was officially imposed and contracted tax accountants and lawyers to fight it off as unwarranted and illegal.

Heritage settled for two options: tackle the levy head-on and, on failing, move the business and assets to a tax haven with the professional help of lawyers and accountants. But because Tullow, as the buyer, had yet to pay Heritage, government threatened not to renew its exploration licences, which were due to expire, unless it deducted and remitted the equivalent capital gains tax.

After a hard bargain, in April 2011, Tullow capitulated and sent to government $121 million (Shs403b), an equivalent of a 30 per cent threshold down payment before filing of tax appeals under the country’s laws. The balance of $283 million (Shs943b) was deposited on an escrow account with Standard Chartered Bank in London, pending resolution of the tax dispute that ended in 2013.

Another $30 million (Shs100b) was separately assessed on a $100 million (Shs356.8b) that Heritage additionally paid Tullow Uganda Ltd as cash settlement arising from a breach of the companies’ Sharing and Production Agreement.

Heriatge later opposed these tax payments as “collusion” between Tullow and the Ugandan government, resulting in the London case that Justice Burton on June 14, 2013, decided in Tullow’s favour.

In another case, URA in June 2015 settled for $250m (Shs824b) from Tullow after three years of legal battles over Capital Gains Taxes when the latter sold 66.66 per cent of its stake to CNOOC and TOTAL for $2.9b, making it the largest transaction to date in Uganda’s history against the $142m that Tullow had been arguing was the right tax assessment.

Notable recipients

• Ms Akol received Shs242m
• Former AG Peter Nyombi Shs226m
• Shs393m wired to account of former Finance PS Chris Kassami, who passed on last year.
• Former deputy AG Fred Ruhindi got Shs93m
• KCCA executive director Jenifer Musisi, who previously served as head URA’s legal department, received Shs121m
• Lawrence Kiiza, a senior official in the ministry of Finance, got Shs102m
• Solicitor General Francis Atoke got Shs234m
• Director of Legal Affairs at the Solicitor General’s office, Mr Christopher Gashirabake, received Shs242m

s Doris Akol, to lead the process with advice from the then Attorney General and approval from Cabinet.

“President Museveni accepted the proposal but on condition that all applicable taxes are deducted,” a source noted.

Ms Akol, who prior to becoming the URA commissioner-general, headed the body’s legal department that led the court battles against both Tullow and Heritage, was not readily available for comment on the matter as she did not pick or return our calls by press time.

However, Finance ministry spokesperson Jim Mugunga, besides clarifying that it was Shs6b and not Shs7b as the online news website ChimpReports that broke the story indicated, defended the payout as a recognition of the efforts of the officials involved.

“The honorarium is less than 1 per cent of the total money that the team was able to secure from the two cases,” Mr Mugunga argued. “And besides, all the money paid out was taxed.”

Asked why and who tasked URA to distribute the money, Mr Mugunga said the Treasury did so to ensure that all applicable taxes were collected.

After Heritage sold its 50 per cent interest in Uganda’s oil fields in August 2010 at $1.5 billion (Shs5 trillion) to Tullow, yielding the first biggest windfall of the country’s nascent petroleum sector at the time, URA slapped a $404 million (Shs1.4 trillion) capital gains tax on the transaction.

The tax dispute became a protracted legal battle and different courts, including a Ugandan Tax Appeals Tribunal and a commercial court in London, took four years to resolve the matter. A recent expose by the International Consortium of Investigative Journalists showed that Heritage knew about the imminent tax liability weeks before it was officially imposed and contracted tax accountants and lawyers to fight it off as unwarranted and illegal.

Heritage settled for two options: tackle the levy head-on and, on failing, move the business and assets to a tax haven with the professional help of lawyers and accountants. But because Tullow, as the buyer, had yet to pay Heritage, government threatened not to renew its exploration licences, which were due to expire, unless it deducted and remitted the equivalent capital gains tax.

After a hard bargain, in April 2011, Tullow capitulated and sent to government $121 million (Shs403b), an equivalent of a 30 per cent threshold down payment before filing of tax appeals under the country’s laws. The balance of $283 million (Shs943b) was deposited on an escrow account with Standard Chartered Bank in London, pending resolution of the tax dispute that ended in 2013.

Another $30 million (Shs100b) was separately assessed on a $100 million (Shs356.8b) that Heritage additionally paid Tullow Uganda Ltd as cash settlement arising from a breach of the companies’ Sharing and Production Agreement.

Heriatge later opposed these tax payments as “collusion” between Tullow and the Ugandan government, resulting in the London case that Justice Burton on June 14, 2013, decided in Tullow’s favour.

In another case, URA in June 2015 settled for $250m (Shs824b) from Tullow after three years of legal battles over Capital Gains Taxes when the latter sold 66.66 per cent of its stake to CNOOC and TOTAL for $2.9b, making it the largest transaction to date in Uganda’s history against the $142m that Tullow had been arguing was the right tax assessment.

Notable recipients

• Ms Akol received Shs242m
• Former AG Peter Nyombi Shs226m
• Shs393m wired to account of former Finance PS Chris Kassami, who passed on last year.
• Former deputy AG Fred Ruhindi got Shs93m
• KCCA executive director Jenifer Musisi, who previously served as head URA’s legal department, received Shs121m
• Lawrence Kiiza, a senior official in the ministry of Finance, got Shs102m
• Solicitor General Francis Atoke got Shs234m
• Director of Legal Affairs at the Solicitor General’s office, Mr Christopher Gashirabake, received Shs242m

By Steven Zande

THE Zambians for Empowerment and Development (ZED) has praised the Government for cutting fuel prices because any reduction in petroleum pump prices has a direct positive impact on Zambians.

ZED president Fred Mutesa said the reduction was a commendable move which demonstrated the Government’s resolve to cushion Zambians against exorbitant fuel prices which would cause extreme suffering among the people.

“Any reduction in fuel prices, no matter how marginal, is a welcome development, which constitutes savings to consumers.

“This shows that President Edgar Lungu’s Government has been working tirelessly to see to it that Zambians enjoy favourable fuel prices,” Dr Mutesa said.

He said in an interview yesterday that this also indicated that going forward, the Government under the leadership of Mr Lungu had potential to deliver more economic benefits to Zambians.

“We should know that this was done after scientific computation and not to appease people, hence I don’t understand people who demean the reduction,” Dr Mutesa said.

However, the United Party for National Development (UPND) spokesperson Charles Kakoma in a separate interview said ERB should have reduced fuel prices earlier to cushion farmers who used fuel in their implements in the 2016/2017 farming season.

Mr Kakoma said farmers could have produced cheaper food, hence the reduction was insignificant and would not help cut production costs and public transport bus fares.

“ERB should have reduced fuel prices before the farming season so that farmers could produce cheaper food,” he said.

Forum for Democracy and Development (FDD) spokesperson Antonio Mwanza said the ERB should have reversed last year’s increment as the current move was insignificant and would not help bring down the cost of goods and services in the nation.

Mr Mwanza urged the ERB to consider reviewing the fuel supply chain to ensure that in future local fuel prices remained consistent with overall prices on the international market.

National Restoration Party (NAREP) general secretary Ezra Ngulube appealed to bus operators to consider reducing bus fares despite incurring additional costs like hiked insurance costs and road toll fees.

Khartoum — Sudan government on Wednesday vowed to provide the appropriate climate for the Chinese investments in Sudan in field of minerals together with the necessary protection for the Chinese miners.

“We promise to provide the appropriate climate for the Chinese investments in Sudan in the mining field together with the protection for the Chinese companies and miners working in Sudan,” said Ahmed Mohamed Sadiq Al-Karuri, Sudan’s Minerals Minister, when addressing the forum Wednesday.

“Sudan enjoys an attractive environment for investments, which attracted the investors. We have around 361 foreign companies operating in field of exploration of minerals, particularly gold,” he noted.

He went on saying that “we are looking forward to receive more Chinese investments in the mining field. The cooperation between the two countries has to be enhanced to achieve the aspired benefit. Sudan enjoys natural resources and huge wealth, while China maintains the necessary experience.”

Chinese Ambassador in Khartoum Li Lianhe said that “The Chinese side attaches a great concern to the cooperation with Sudan in the mining field. China has sent many experts in this field to Sudan to enhance the cooperation between the two sides.”

“We have about 20 Chinese companies operating in about 30 mining fields in Sudan. These companies have achieved profits of over 100 million U.S. dollars. We hope to enhance this partnership in a manner that suits the level of bilateral ties between the two countries,” he added.

Sudan-China Mining Communication Forum was held in Khartoum on Wednesday in presence of Sudan’s Minerals Minister, Chinese Ambassador to Sudan, Chairman of Chinese Miners Association in Sudan and representatives of the Chinese companies operating in field of mining in Sudan.

Sudan is seeking to increase its minerals production, namely gold, to compensate the loss of around 75 percent of its oil revenues following the separation of South Sudan in 2011.

The Sudanese government had previously anticipated the country’s gold production to reach 100 tons by end of 2016, positioning Sudan as the second gold producing country in Africa and the ninth worldwide.

There are over two million Sudanese employees in traditional mining, producing 80 percent of the country’s gold, while the Sudanese central bank purchases the gold from them across the country.

Xinhua

By Yohanes Jemaneh

The Ministry of Industry announced that the construction of four agro- industrial parks projects would be launched soon in Tigray, Amhara, Oromia and SNNP States.

Speaking at stakeholders’ consultative meeting on the implementation and resource mobilization for agro-industrial parks expansion project here Friday, Integrated Agro- Industrial Parks Project Marketing and Economic Analyst Moges Mesfin said the project is part of the national vision to become light manufacturing hub in Africa.

The agro-industrial parks would be feasible owing to the commitment of the government, financial institutions readiness and the country’s successive economic growth.

State Minister Dr. Mebrahtu Meles said the country is constructing industrial parks to promote investment and tap its economic potential.

The construction would be financed by the federal and state governments. Accordingly, the Development Bank of Ethiopia has allocated seven billion Birr, Bank Vice President Tadesse Hatiya told The Ethiopian Herald. “The bank would increase its budget allocation as the construction progresses.”

The country has set ambitious plan to build some 17 industrial parks in all states which would enable to add value to its agri-produce.