By Jonathan Adengo

Kampala — Uganda’s drive to industrialise must not be at the expense of the environment, a United Nations envoy has said.

The United Nations Development Programme (UNDP) Resident Representative, Ms Rosa Malango, who is also the United Nations Resident Coordinator, has said inclusive green growth is the pathway to sustainable development.

“Any investor who comes to Uganda should know where wetlands are and the laws that govern them,” Ms Malango, said.

The envoy said UNDP supported Uganda to publish a wetlands atlas, detailing location and status of all wetlands, with a version for schools so that their location and importance is learned in education institutions.

She said UNDP would also support the Presidential Initiative for Wetlands that will help to accelerate the delivery of a comprehensive response including relocation of people in wetlands and help them learn new skills and livelihoods.

“We have supported Uganda Mineral Resources Management Project; We want to ensure that oil exploration doesn’t undermine the environment,” Ms Malango said.

She said this while on a guided tour of the Kampala Industrial and Business Park in Namanve, last week.

Ms Rosa Malango, who was together with Dr Arkebe Oqubay, the minister and special advisor to the Prime Minister of Ethiopia at Namanve. Dr Arkebe, was in Uganda at the invitation of UNDP as a key note speaker at the High-Level Dialogue on the country’s economy.

On her part, the new Uganda Investment Authority (UIA) chief executive officer Ms Jolly Kaguhangire, said: “At full capacity, this industrial park will become the biggest industrial hub in Uganda will 296 industries, directly employing 200,000 Ugandans.”

“The industries in the park alone will be contributing over $540 million in taxes per annum at full capacity,” Ms Kaguhangire added in a report presented on her behalf by Mr Hamza Galiwango, the UIA director for land development division.

More funding

The UIA officials, however, asked government to inject $151 million (Shs500 billion) which will be utilised for infrastructure development and help the park operate optimally.

The money is needed to upgrade the industrial roads to bituminous standards, provide high voltage powerlines (132Kv) provide industrial water supply, install fibre optic for Internet, sewerage plant and waste management.

The 2200-acre industrial park is located partly in Wakiso and Mukono districts. According to Mr Galiwango all the land in the industrial park has been allocated to 296 prospective investors for development. Of these 21 industries are operational employing 11,000 Ugandans within the park while 70 companies are under construction and 150 are processing paper work, he explained.

Sharing some of the strategies Ethiopia has under taken to industrialise, Dr Arkebe asked UIA to prioritise the export industries and treat them differently. He also proposed that incentives differ sector by sector.

“Incentives are sweeteners but not a criterion. The best criterion is the cost of doing business; market access, infrastructure, government support and stability,” Dr Arkebe explained.

The Ethiopian minister noted that there should be established a one-stop-centre in the industrial park with all business-related offices and services like; logistics, banking, insurance, water supply, power connection and registration of businesses. In Ethiopia, he said, visas are issued within the industrial park.

“Time is critical. This place (Namanve) was designated as an industrial park in 1997. After 20 years, situations change and you lose opportunities,” Dr Akerbe said.

The minister asked UIA to plan for waste management. “Now that you are in a wetland, you might need to think about the impact in the long term. You will find it quite damaging. The option we have chosen (in Ethiopia) is to be strict; zero discharge technology.”

By Hazla Omar

Arusha — Arusha-based Ilboru High School’s Form Six student Gracious Ephraim has created a solar energy powered human Robot that can walk, turn its head, speak and perform a number of tasks.

Gracious who pursues Physics, Chemistry and Mathematics (PCM) combination said he started working on the prototype multitasking human robot about 12 months ago, using locally available materials as well as simple memory chips for the ‘brain’ The components include an entire Geometrical Set (aluminium box and contents), some wires, tin containers, wire pieces of metal and other materials, all valued at about 200,000/- , which he raised from his own pocket money.

The Robot can bend down to pick two packages and move with the load balanced onto its either arms for a while before laying them down neatly on the ground some distance away through remote programming. Teachers at the school said the student was the only person in the country to build a robot which makes various movements and actually works.

“I am trying to innovate things that can solve problems because for many years, science students in the country did not want to invent, they were all focusing on getting employed but being a scientist is all about devising and making new things.

Tanzania aims at industrialisation meaning that factories and other production lines must work 24 hours, but humans cannot work around the clock, so I envisage to have robots working at night and people during the day, this will also reduce the costs of paying workers overtime,” he pointed out.

The student added that, using robots is all about ensuring high level of effectiveness, revealing that his own maiden robot does things better than some people because when programmed to deposit an item at a particular place it does so with accuracy.

Gracious loves to watch movies like any boy next door, except that his flicks are those about robots, ‘Robocop,’ and ‘Transformers,’ from where he gets additional inspiration.

Regarding his own Robot’s capability to speak, Gracious said he had installed a memory card with recorded voice notes that can be remotely triggered to make the home-made machine reply to specific questions or even sing some songs.

The Head of Physics Department at Ilboru, Mr Pendaeli Daniel described Gracious as a standout student in the class.

“Always in time, and comes up with new things and ideas.We have written a special letter of introduction to enable him introduce his innovation to a number of factories and organisations, where he can learn more and find ways to innovate things to complement the robot operations,” said the teacher

ANALYSISBy Alisha Patel

Within hours of Gordhan’s removal, the controversial $70 billion deal was back on the table.

Widespread protests calling for the resignation of President Jacob Zuma continue apace in South Africa in the wake of last month’s removal of Finance Minister Pravin Gordhan. In a midnight reshuffle on 30 March – dubbed the “night of the long knives” – Zuma stealthily and controversially replaced Gordhan along with his deputy and seven other cabinet ministers.

Zuma’s purported justification for the reshuffle was to better pursue “radical economic transformation”, which he says he will be the focus for the rest of his term. For supporters, this means ending “white monopoly capital” and South Africa’s subservience to the whims of banks, international investors and rating agencies. For opponents, it is a smokescreen for undermining democratic institutions to enable “state capture” and personal enrichment for Zuma and his allies, including the powerful Gupta family.

In response to the reshuffle, two ratings agencies downgraded South Africa’s credit rating to junk status, while thousands have taken to the streets calling on Zuma to step down.

The effects of the controversial reshuffle will be wide-ranging and long-lasting, but one particular issue around which these struggles will converge in the coming months is a huge and contentious nuclear power deal.

This proposed scheme has generated much controversy over the past few years, but its progress was held up by Gordhan and others in government who opposed it. These critics have now been purged, however, and plans for the titanic deal have gathered fresh momentum.

Behind closed doors

According to the government, South Africa will have to turn to nuclear to generate an additional 9,600 megawatts of capacity and ease the country’s reliance on ageing coal-fired plants. The nuclear deal it has proposed to fill this gap is set to be the most expensive tender in South African history and will last for at least 60 years. Although credible government estimates have not yet been provided, it is suggested the project could cost 1 trillion rand (approximately $70 billion).

The government’s support for nuclear comes despite the findings of the Energy Department’s draft 2016 Integrated Resource Plan (IRP), which was itself criticised for lacking independence, transparency and adequate consultation. The report maintains that South Africa’s energy needs will not need to come from nuclear until at least 2037, ten years later the proposed timeframe. It instead encourages the use of clean and/or renewable sources that South Africa has a comparative advantage in, such as gas, solar and wind.

But these recommendations have not stopped Zuma from pursing a nuclear agreement, largely out of the reach of public scrutiny. According to inside sources, contracts have already been drawn up between South Africa and Russia, personally brokered by the president as early as 2012 during a visit to Moscow.

These alleged agreements, made behind closed doors, would reportedly allow for Russian involvement across the entire value-chain of the project. And Russia would apparently have limited accountability in the event of any serious incident. In response to these claims, the South African government has remained coy, referring to a “strategic partnership” between the two countries but offering few details.

Furthermore, in October 2016 Zuma announced that any nuclear deal would no longer be funded by the Department of Energy but by the already heavily-indebted state-owned power utility Eskom. This move was widely perceived to be a strategy to further circumvent parliamentary oversight, intensifying fears over the deal’s lack of transparency and raising suspicions that the programme would bring with it lucrative kickbacks.

Shuffling the pack

While he was at the helm of the treasury, Gordhan could effectively veto the nuclear proposal from progressing. But that all changed following the night of the long knives.

“This reshuffle seems to position pro-nuclear supporters in key decision-making positions within government and seems to lay a strong foundation which is aimed at pushing through nuclear, no matter the cost to the people,” says human and environmental rights activist Kumi Naidoo.

Indeed, in the reshuffle, Gordhan was replaced with the more compliant Malusi Gigaba, while Mmamoloko “Nkhensani” Kubayi, widely seen as a Zuma stooge, became the new Energy Minister.

At the same time, Matshela Koko, a nuclear energy proponent, is acting CEO of Eskom. And his pro-nuclear predecessor, Brian Molefe – who is alleged to have awarded the Gupta family lucrative coal contracts – is now an MP for the ruling African National Congress (ANC).

On taking up his new appointment as Finance Minister last month, it took Gigaba just a few hours to confirm that the multi-billion-dollar nuclear deal was on, saying: “It is not a figment of imagination… it was adopted by cabinet as a programme to implement as we diversify our energy mix and bring on board environment friendly energy generation.”

Confidential documents revealed by the press on 9 April reported that the formal tender process conducted by Eskom is to commence in June.

Is time running out?

Should the nuclear deal go ahead, it would not only be South Africa’s largest tender to date, but also possibly the largest exercise of state capture ever. Stopping the deal will provide a key test for South Africa’s democratic institutions and political culture.

Pressure could come from an increasingly divided ANC as well as a legal challenge against the bill, spearheaded by the NGOs Earthlife Africa and the Southern African Faith Communities’ Environment Institute (SAFCEI). Moreover, Eskom may struggle to raise finance for such a project, despite political will, having suffered another credit rating downgrade after the reshuffle. It now lies well into junk territory, four notches below investment-grade status.

Street protests against Zuma also continue, while he is set to face a no-confidence vote, though this has been delayed as the judiciary decides whether a secret ballot is necessary. Having survived seven votes of no confidence since coming to power, not to mention 783 charges of corruption, it would take significant defections within the ANC to oust the embattled president, who has to date lived up to his ‘Teflon’ nickname.

More important perhaps will be the leadership battle within the ruling ANC that will take shape at the party conference in December. This race is far from over at this point, but Nkosazana Dlamini-Zuma, the president’s ex-wife and favoured candidate, is looking like an increasingly likely successor. She is presumed to be willing to protect Zuma, which in turn will enable him to manage his succession and provide continuity.

Nevertheless, some observers suggest that Zuma and his allies are aware that their dominance over the direction of government may be in danger of coming to an end. It is this, they say, that has led them to accelerate their plans such as the nuclear deal.

According to a journalist who has investigated multiple reports of corruption within South African parastatals, Zuma loyalists are “increasingly determined to capture the state” but “time may be running out for the patronage faction within the ANC”. The journalist, who spoke on condition of anonymity, believes the group’s success in pushing the nuclear deal “will depend on whether they manage to capture the Treasury quickly enough, purging those officials and bureaucrats committed to Gordhan’s cause”. Taking control of state institutions in such a way would certainly not be unprecedented.

Whether those loyalists are successful on this front – and whether those who oppose the deal will be able to mobilise in opposition – will become apparent in the following weeks and months. One thing that has already become clear by recent events, however, is that even the boldest conspiracy theories in South Africa can be proven to be true, underscoring the degree to which the state has already been captured.

By Joseph Hanlon

Bank of Mozambique: Consumption & investment falling

Government statements on the $2 bn secret debt in a parliamentary debate last week on the 2015 state accounts have been interpreted in diametrically opposite ways. Some, including this writer and AIM, read the statements to mean that the government has, in effect, agreed that the debt guarantees are illegal and the debts themselves illegitimate, and has no intention of repaying at least part of the debt. Others, including opposition parties MDM and Renamo, plus respected journalist Aderito Caldeira in /@Verdade/, argue that by including the debt in the budget statement, the state has retrospectively accepted the guarantees and will pay.

At issue are three loans and two bond issues, totalling $2 bn, for three private companies owned by the state and controlled by the security services, SISE. The loans and bonds were agreed in secret in 2013-4 and include dubious government guarantees. Both the Tribunal Administrativo (TA, Auditor General) and a special parliamentary commission have found that the guarantees were granted without authorization of parliament, as required by the constitution, and thus are illegal and unconstitutional.

In the 2015 accounts submitted to parliament on Wednesday 12 April, the government says that the guarantees were issued and that they were “above the budget law”, which appears to be a government confirmation that the guarantees are illegal and unconstitutional. In a statement to parliament on Thursday, Prime Minister Carlos Agostinho do Rosario said “the government reaffirms its commitment to honour repayment of debt that has been proven to have been in the public interest”, adding that “we shall continue to observe a balance between the need to honour debt servicing and the imperative to continue financing priority action for economic and social development”. Arguing, in effect, that some of the debts are not proven to be “in the public interest” is to argue that they are “illegitimate” and the liability of the lending banks, VTB and Credit Suisse, because they made improper loans.

The position is confused because the two initial Eurobond issues, both for the Ematum tuna fishing company, became known in 2014 and were eventually replaced in 2016 by government bonds. In effect, government returned to parliament and retrospectively agreed to honour the guarantees and issue new bonds. The three syndicated loans to MAM and Proindicus remained secret until April 2016; the two companies have not been making repayments but the guarantees have not been called, so government has not been required to say if they will be honoured.

Opposition parties and /@Verdade/ argue that by taking the three loans into the 2015 budget statement, government is repeating what it did with the Ematum bonds, and retrospectively taking responsibility for the loans and the guarantees. Venâncio Mondlane, of the Mozambique Democratic Movement (MDM), described the debts as “illegal, illegitimate and immoral”, and claimed that, by mentioning them in the state accounts, the government “legitimates” the guarantees and “is sanctifying a satanic debt”, and “now we are all obliged to accept this debt”. Renamo MP Ivan Mazanga said “the government wants all Mozambicans to pay these debts”.

In his statement, de Rosario denied this, saying that including them in the budget statement was necessary “to guarantee control and monitoring of the guarantees by the Administrative Tribunal.”

*/Comment: /*Much hinges on the interpretation of debts being repaid if they are “proven to be in the public interest”. I interpret this to mean government will use the Kroll audit report to say that debts were not in the public interest, whereas MDM MP Venâncio Mondlane interprets it to mean the debts will eventually be defined as in the public interest and will be repaid.

De Rosario is probably being intentionally ambiguous. If the debt goes to court or arbitration, under the contracts this will be done in England. But a negotiation involving creditors, banks and Mozambique seems more likely, because their has been bad conduct on both sides which they will not want aired in public. For both domestic political reasons and prudent negotiating tactics, Mozambique may not want to go into those negotiations simply refusing to pay. But de Rosario’s statement seems at least intended to allow the reading that the government is publicly stating that the guarantees are illegal and unconstitutional, and that the loans themselves are “not in the public interest”.

What is ‘illegitimate debt?

The concept of “illegitimate debt”, sometimes also called “odious debt”, evolved in the period before the round of debt cancellations at the start of the millennium. The argument was that banks and other lenders have a fiduciary responsibility to borrowers not to make obviously unwise loans – if a gambler goes to a bank and says ‘I have lost all my money but I am sure I will win next time, lend me money’, then if the bank is foolish enough to lend, it is liable and not the gambler. In periods of surplus capital, such as the 1970s and now, banks pushed developing countries to take loans they did not need – known as “loan pushing”. If banks lend money to poor countries that is not in their interest, then the loan is “illegitimate” and it is the responsibility of the bank, not the poor country.

The argument is that the $2 bn secret loans were a form of “loan pushing”; furthermore the banks, Credit Suisse and VTB, which organised the loans and bonds, failed to carry out the due diligence which would have clearly shown the guarantees to be unconstitutional and illegal, and also failed to take into account Mozambique’s ability to repay. The loans are clearly not in the national interest and were given improperly, and are thus “illegitimate” and the liability of VTB and Credit Suisse, not Mozambique.

Civil society says creditors ‘irresponsible’, so don’t pay

There must be “cancellation or significant reduction in debt owed by the government as a result of the loans to Ematum, Proindicus and MAM. Loans from the IMF should not be used to repay the debts to irresponsible lenders, risking trapping Mozambique in a debt trap. Lenders need to share in the costs of adjustment brought about by their irresponsible actions and the changed economic circumstance of low commodity prices,” declared a large coalition of civil society organisations in a statement published in Savana.

The statement also calls for political leaders to be held accountable for their actions and for the Kroll audit report to be published. “Where the money has gone has to be publicly disclosed for the current crisis to be resolved and before more money can be lent to the Mozambique government. ” The statement was issued by the members of the Fórum de Monitoria do Orçamento (Budget Monitoring Forum), the Grupo Moçambicano da Dívida (Mozambique Debt Group), and the Coligação Transparência e Justiça Fiscal (Fiscal Justice and Transparency Network), as well as various international organizations.

The statement also calls on the government and IMF to agree to no increase in takes and no cuts to essential services that negatively impact low and middle income Mozambicans. It wants megaproject contracts renegotiated to increase the taxes paid and strengthened anti-corruption and public tendering systems. Finally the organisations say there should be “an analysis of the current situation of those in poverty and potential measures to protect those in or near poverty from negative impacts. All actions must be based on ensuring that poverty does not increase, and new actions must show a high potential for reducing poverty.”

Nyusi involved in setting up Proindicus

Leaked correspondence appears to show Filipe Nyusi was directly involved in setting up Proindicus in 2013 when he was defence minister, according to /Canal de Mocambique/ (12 Apr). Proindicus was the first of the three companies to be established, in January 2013, and received the first loan, in February 2013; Proindicus is the “mother company” of the whole project.

The three companies were set up to implement the Integrated Monitoring and Protection System (Sistema Integrado do Monitoria e Proteccao, SIMP) for coastal protection, only approved by the Council of Ministers in December 2013, nearly a year after the first loan was made. Not surprisingly, the letters also show the defence minister heavily involved in writing the SIMP. And in January 2014 Nyusi wrote personally to Finance Minister Manuel Chang to set up the financial structure of Proindicus. https://www.facebook.com/CanalMoz/posts/1336510046418089

Defence Minister Atanasio Salvador M’tumuke told the parliamentary commission that “the Ministry of Defence was not consulted” about the equipment to be purchased, and that what was ordered was inappropriate. But the ministry was clearly involved in the early planning and establishing the companies.

Other Economic News Consumption & investment falling; small interest rate cut

“Indicators of economic activity suggest a continuation of the weakening of economic activity, mitigated by the improvement in external demand,” the Bank of Mozambique said on 10 April. “The outlook continues to be negatively affected by weak domestic demand, sustained by lower consumption and investment, as well as by less favourable financing conditions for the economy.”

The Bank of Mozambique cut the base interest rate a small amount, from 23.25% to 22.75%. In the 10 April announcement, reserve requirements (15.5%) and the interest paid on those reserves (16.25%) were unchanged. The Bank also confirmed that from June it will use a different rate as a “monetary policy rate”. The current rate is the taxa de juro da Facilidade Permanente de Cedencia de Liquidez (FPC) which is the rate that banks pay to borrow from the central bank. The new rate which will be applied from June is an interbank interest rate, taxa do Mercado Monetario Interbancario de Mocambique (taxa MIMO), currently set at 21.75%.

The Bank of Mozambique continues to build up reserves, which exceeded $2 bn in the first week of April, equivalent to 5.3 months of imports (excluding mega-projects).

Mozambique’s currency has appreciated against the US dollar with the rate falling from MT 71 = $1 at the beginning of the year to MT 67 = $1 last week. But the exchange rate with the South African rand is most important because so many imports come from South Africa, and since the beginning of the year that has varied between MT 5.4 = R 1 and MT 4.9 = R 1. This, in turn is due to the volatility of the rand, which has ranged between 12.5 and 14 to the dollar since the beginning of the year, and collapsed recently due to political factors.

Annual inflation in March was 21.6%, but the Bank of Mozambique hopes it will fall to 12% by the end of the year. Domestic debt has risen dramatically with the Bank of Mozambique becoming a major borrower; domestic debt has risen from MT 50 bn at the beginning of the year to MT 88 bn last week.

Standard Bank issued a note on 12 April which predicted a stronger Metical and that by the end of the year the rate of exchange would be 50 Meticais to the dollar. It advised investors to buy local bonds and to sell futures contracts on Meticais because they are pegged at roughly the current rate of the Metical. Standard cut its annual inflation forecast from 12.2% to 10.4%.

*/Comment:/***It would be surprising and disappointing to see the Metical appreciate to Mt 50 = $1, because the current rate of exchange would allow local producers, particularly farmers, to compete more effectively with imports. For example, at the current exchange rate, it would be profitable for the first time to produce maize and rice locally. The biggest problem is the very high interest rates and credit squeeze, which makes it impossible for farmers to borrow money to buy fertilizer and other inputs.

End of small local banks

The minimum capital required for banks was been increased 25-fold, from MT 70 mn ($1 mn) to MT 1,700 mn ($25 mn). The Bank of Mozambique said banks would have three years to comply with the new rule. In addition, the solvency ratio (capital as a proportion of liabilities) is increased from 8% to 12%.

The follows the collapse of two small locally owned banks, Nosso Banco which has been closed, and Moza Banco which is being restructured. This will basically force the merger of small banks and mean that all Mozambican banks will need to be relatively large and foreign controlled.

There are currently 19 banks operating in Mozambique, but only five – Millennium Bim, BCI, Barclays Bank, Standard Bank and Banco Único – can meet the new requirements.

The whistle blowing policy of the Federal Government appears to be paying off as the Economic and Financial Crimes Commission on Wednesday announced that it uncovered foreign currencies and Naira notes to the tune of $43.4 million, £27,800 and N23.2 million at a four-bedroom apartment in Ikoyi, Lagos.

The total amount of money recovered at the current Central Bank exchange rate is over N13 billion.

The operation followed a confidential information received by the Commission’s Lagos office regarding some suspicious movement of bags in and out of a particular apartment in the building.

Another source who is conversant with the apartment indicated that a woman usually appeared on different occasions with ‘Ghana Must Go’ bags, the EFCC said.

“She comes looking haggard, with dirty clothes but her skin didn’t quite match her outward appearance, perhaps a disguise”, the source said. . On getting to the building, operatives who were armed with a search warrant, met the entrance door locked. The guards at the gate explained that nobody resides in the apartment, but some persons come in and out once in a while. The EFCC operatives used minimum force to enter the apartment, the statement said.

Monies were found in two of the four bedroom apartment. Further probe of the wardrobe by operatives in one of the rooms, yielded three fire proof cabinets hidden behind wooden panels of the wardrobe. Upon assessing the content of the cabinets, neatly arranged US Dollars, Pound Sterling and some Naira notes in sealed wrappers were found.

The funds are suspected to be proceeds of unlawful activity while investigations are ongoing‎, the EFCC said.

By Mohammed Shosanya

Lagos — The Bureau De Change Operators of Nigeria says Nigeria’s Naira will exchange below N403 to a dollar this week as the Central Bank of Nigeria continues to inject more forex into the market to mitigate the imbalance in the currency exchange.

The rates closed at N403/$ last week.

The President of the Bureau De Change Operators ,Alhaji Aminu Gwadabe, who expressed the optimism in Lagos yesterday, said the development was due to the review of volumes upward of the proceeds of International Money Transfer Services Operators (IMTSO)and removal of disparity in applicable exchange rates by the apex bank in the bureau de change subsector.

He said: “Following the beginning of the CBN’s injection of liquidity into the interbank market for banks the naira rebounds to an all low of N360/$ from N520/$. However, surprisingly the scenario couldnt last more than 2 weeks despite the continues injection of liquidity into the banking system as the rates began to summersault to a new high of N420/$.

By Njiraini Muchira

Uncertainty surrounding the future of the Kenya-Uganda Railway concession has claimed its first casualty, with a private equity firm pulling out of a deal to acquire the operator Rift Valley Railways from Qalaa Holdings of Egypt.

The decision by Emerging Capital Partners to disown talks that had been confirmed as ongoing by, among others, the Kenyan regulator of the line got a quick response from RVR, which said it would seek answers from its shareholders (Qalaa) on what was going on.

“ECP is not currently in discussions with Rift Valley Railways or its principal stakeholders about an investment in RVR,” said the firm in a statement.

The ECP statement came almost a fortnight after it was reported to have commissioned an audit firm to carry out due diligence on RVR’s financial position. It also came a week after it emerged that Kenya had terminated the RVR contract over non-payment of fees.

Due diligence, the perusing of books to confirm accuracy with third party records like asset registries and bank accounts, usually follows an agreement in principle of interest in acquiring a company. It is done on a strictly confidential basis.

When contacted by The East-African, RVR chief executive officer Isaiah Okoth said he was awaiting communication from Qalaa Holdings on the new developments.

“ECP has been negotiating with shareholders and I am waiting for official communication to know the status of the negotiations,” Mr Okoth said. Later, RVR issued a statement signed by Mr Okoth which just fell short of questioning ECP’s integrity.

“RVR has been in discussion with several potential investors, including ECP, through its shareholders. As far as RVR is concerned ECP has been involved in due diligence of RVR business,” reads the statement signed by Mr Okoth.

Barely a week after Kenya Railways Corporation terminated the Rift Valley Railway concession, ECP has walked out on plans to acquire the majority shareholding in RVR.

ECP, which had reached an agreement with Cairo-based Qalaa Holdings to acquire its 73.76 per cent stake in RVR, has opted out of the deal following the termination of the 25-year concession.

It added that it will continue to explore opportunities to invest capital to support the growth of East Africa’s infrastructure sector.

RVR also said it was pursuing other options in consultation with the Kenyan and Ugandan regulators “with a view to achieving the best possible outcome for all stakeholders in this regard.”

The decision by ECP to opt out of the deal at the eleventh hour makes RVR’s position even more problematic, considering it was mainly banking on the coming on board of the new investors not only to salvage the concession but also to inject capital into the business to ease its survival.

According to observers, ECP must have decided to opt out of the RVR acquisition after the company lost the main asset, which is the concession and which still had another 13 years before it expires.

“The concession agreement is the main asset for RVR. It is the main value for investors,” said Philip Muema, Nexus Business advisory managing partner.

Last week, KRC terminated the 25-year concession citing defaults on various parameters of the concession agreement by RVR.

RVR managed to get a 30-day temporary relief after the High Court put an injunction on the execution of the termination notice, which gave the company a 120-day window to salvage the concession.

In an earlier interview with The EastAfrican, Mr Okoth had exuded confidence that RVR would seal the deal with ECP within the timeframe.

But with ECP pulling the plug, RVR is technically on its deathbed unless Qalaa digs into its coffers to settle the company’s outstanding financial obligations.

In terminating the concession, KRC said that RVR has defaulted on three key terms of the concession agreement — namely standard of maintenance of conceded assets, freight volume targets and payment of concession fees.

Rehabilitate locomotivesOn assets, RVR has failed to maintain the track, resulting in speed restrictions on 187 km of the main line, which is 17.3 per cent of the line.

RVR has also failed to rehabilitate and maintain the locomotives, rolling stock, buildings and structures.

On freight volume, the company has failed to achieve targets as at the end of year nine, recording 1.1862 BNKM against a target of 2.1145.

On fees, RVR has failed to settle concession fees totalling $4.1million as of December 2016, rent amounting to $1.7 million and another $20 million and $10,720 for life expired assets and life expired wagons and assets destroyed in accidents respectively.

Since taking over the concession to operate the 1,300 km metre gauge railway from Mombasa to Kampala in 2006, RVR has remained in the red and has failed to improve railway transport with its annual cargo haulage stagnating at 5 per cent of the total cargo arriving at the port of Mombasa.

In a span of 12 years, RVR has changed hands four times.

The GE Reports Africa blog has launched a series known as “A Day in the Life Of” which profiles GE SSA’s unsung heroes, highlighting their contribution at GE.

Louis Ndesingo, currently a commercial proposal specialist at GE, based in Dar es Salam, was born in  the South-Western part of Tanzania with his family and later moved to the North-Eastern  part of the country to live in Arusha, where he completed his schooling.  Louis was the second of four children and he grew up with a great passion for computers that started from playing video games as a child. He was a big fan of video games and he hoped to one day end up in a profession that involved computers.

His parents had a very strong influence on his life, guiding him into the commercial field he currently works in today. Both Louis’ parents have business backgrounds and based on what the environmental landscape looked like at the time, Louis realised that the commercial space would be very fruitful as a career.

The two things Louis’ parents taught him about business is proper time management and the importance of hard work. These guiding principles encouraged Louis to follow in his parents’ footsteps and to study accounting and obtain a degree from Strathmore University in Nairobi, Kenya. Louis later completed a masters in finance and investment at Coventry University in the United Kingdom.

GE was Louis’ first job after he completed his Masters. He joined GE through a leadership programme, the Early Career Development programme (ECDP), a 12-month programme designed to give recent university/college  graduates challenging work assignments, training and development as well as exposure to leadership. Louis was exposed to a combination of hands-on tasks as well as formal classroom training that equipped him with the tools and knowledge to grow in GE. Upon completion of the programme, Louis graduated into his current role of commercial proposal specialist. It has now been two years since Louis joined GE and he has found the experience invaluable.

“GE helps to build you up as a personal brand and exposes individuals to a variety of opportunities that one needs to develop and grow in their career. These opportunities help build and prepare you for survival in different environments. What GE exposes us to is not something that a lot of people get the opportunity to be exposed to and to top it all, GE also has a lot of good leaders within the organisation who you can learn from so it is a great place to work and grow.”

With Tanzania being one of the emerging countries on the continent in the oil and gas sector, Louis’ primary role is to identify opportunities in the oil and gas industry, and  develop them through the different divisions within GE. His role is a major one because currently, the Tanzania region does not have specific people who look after specific areas within the oil and gas division. Louis’ role covers the entire supply chain of oil and gas, and he has learned that one of the best ways of getting the job done is through networking. He needs to continuously network with stakeholders from different industries because GE offers solutions to customers across many industries.

A typical day for Louis starts with a 30-minute workout followed by preparation for work. His day in the office typically starts at 8am and the activities he engages in range from customer visits to customer calls and following up on leads.

“The first impression counts with customers as this will help seal the deal. The impact of what you can do to improve their operations needs to come across strongly and we have to ensure that the right facts, and details are shared with customers for the solution we are hoping to provide. This can prove to be a challenge at times.”  GE often deals with international customers and this means that follow-ups can prove to be challenging but Louis always finds a way to get the job done.

GE’s East African region is currently in a growth phase and there are frameworks, legally and physically, that have not yet been established, and that makes the job more challenging. Having these frameworks in place would guide opportunities to flow smoothly in the supply chain from start to finish. To counter this  challenge, the GE commercial teams in this region participate in regular internal telephonic conferences that add an immense amount of value and Louis sees this as an opportunity to get ideas about the other prospects one can explore in the region.

Louis’ work day usually ends at 5pm and sometimes, at 8pm, depending on the tasks at hand. And afterwards, he attends school to complete a professional course in his speciality, accounting. Louis wants to become a certified public accountant.

So, what excites him about his job? The exposure to people in different industries, which means that he is always getting an opportunity to learn something new. Another thing that he loves is the prospect of being able to provide solutions and products for customers within GE that are tailored to their needs. The opportunities to expand and grow are endless, empowering one to eventually become an expert.

Louis recalls an experience that he had while attending a training course in the US last year that helped shape his thinking about himself and how he viewed his life. The  training was focused on business and was technical in nature, and he had not had technical training before. It was quite a challenge to understand the technical aspects, but he completed it successfully, overcoming the challenges he had. This is when he realised the importance of stepping out of one’s comfort zone.

“You will only realise your full potential when you are pushed out of your comfort zone and this is very important. We sometimes get too confined within our comfort zones and we do not realise our true potential. This is what I enjoyed about my hands-on experience at GE as it gives you the impactful picture of what you are doing.”

As a result, Louis has been guiding colleagues, sharing advice and imparting knowledge on how to pursue opportunities within oil and gas in their region.

“GE has good leaders that do not hesitate to advise or mentor. Challenge yourself and step out of your comfort zone. This is the beginning of realising your full potential.”

By Alon Mwesigwa

Business mogul Sudhir Ruparelia’s footprint within Uganda’s financial industry has been further cut short after the licenses to four of his forex bureaus expired at the end of last year and were not renewed.

It is not clear whether it was Ruparelia’s decision to relinquish the licenses voluntarily or Bank of Uganda’s decision not to renew them. However, a source within Bank of Uganda has told us that the central bank was suspicious of some laundered money being channeled through the forex bureaus, and was, therefore, reluctant to renew the licenses

In another instance, Ruparelia’s troubles mirror a wider problem that the businessman continues to face in what some sections of the public have defined as a witch-hunt. Ever since Crane bank, where he was the single biggest shareholder, was closed in October 2016, the clampdown on a number of his businesses has been intense, the latest being the forex bureaus.

The central bank announced on Wednesday that Crane Forex Bureau limited (Nile Avenue), Crane forex bureau (Kampala road) Limited, Karibu Forex Bureau Limited, and Redfox bureau limited would not have their licenses renewed.

Benedict Ssekabira, the director for commercial banking at Bank of Uganda, told reporters on Wednesday that they had closed them because owners and board of directors lacked “fitness and probity.”

Stanhope forex bureau, a subsidiary of the Ruparelia group, remains open, though. Ruparelia still manages Crane management services, his holding firm that runs his real estate empire.

“They are not the first ones to be closed and won’t be the last one,” Ssekabira said of the forex bureaus.

However, The Observer has been told that the issue of money laundering played a key role in the central bank’s focus on the forex bureaus.

“They [closed forex bureaus] are linked to money laundering,” the source said. “We are at a time when the world is looking at us… We’re involved in South Sudan, Somalia, refugees are flowing, and [we are close to] DRC. This raises the risks of laundering. Any links or suspicion will get you closed.”

Forex bureaus are expected to renew their licenses annually. BOU reviews their activities and if there are issues it is uncomfortable with, they are denied license.

We asked Sudhir Ruparelia to comment on this story but he declined to reply to out request. We also asked Rajiv Ruparelia, a key staff of the Ruparelia group, about the troubles in the group and he, too, declined to comment.

The closure of the forex bureaus comes three months after Crane bank was sold to Dfcu bank over failure to maintain the required minimum capital. It was later found that the bank had been engaged in prohibited insider lending and that it had conspired with auditors to paint a glowing picture of its performance.

Ruparelia’s troubles were also worsened by a forensic audit that found gross indiscipline in the way he managed his businesses in the financial sector, our source intimated. The forensic audit into Crane bank was completed and the report remains within Bank of Uganda.

“The USA is particularly watching us,” said the source. “They are very hard on anti-money laundering laws and anti-terrorism financing.”

The Uganda Anti-Money Laundering Act was first passed in 2013, following pressure from the Financial Action Task Force (FATF), a global movement fighting dirty money, and bodies such as the International Monetary Fund, World Bank, and the UN.

In that year, the US-based Global Financial Integrity (GFI), which works to expose illegal financial flows, reported that Uganda was the biggest recipient of illicit financial flows in East Africa, reaching $1.1bn in 2008.

In its annual supervision report last year, Bank of Uganda warned there was a high risk that commercial banks, forex bureaus and other money remitters in the country were not doing enough to scrutinize suspicious transactions, raising concerns that ‘dirty’ money could be entering the country.

The Eastern and Southern Anti-Money Laundering Group (ESAAMLG), an organisation composed of states in east and southern Africa, said in a report last year that financial institutions and designated non-financial businesses and professions in Uganda did not “adequately apply anti-money laundering and combating financial terrorism preventive measures commensurate with their risks.”

Last month, Uganda was forced to make amendments to its anti-money laundering laws, with the ESAAMLG report indicating that the supervisory regime in the country was not as strong as it should be.

Uganda is particularly seen as a fluid transit route for drug smugglers and wildlife poachers. Most of the times, these people seek to sanitize their cash through the available institutions, including banks and forex bureaus.

OPINIONBy José Graziano DA Silva

In the two decades before 2015, West Africa made notable strides in reducing hunger, reducing the number of hungry people by more than 60 per cent, well ahead of its Millennium Development Goal pledge.

Yet today in Nigeria–one of the region’s star performers in that period–we now see severe hunger increasingly quickly and widely in north-eastern regions where civil conflict is uprooting people and preventing farmers from growing crops.

There is a growing risk that the impressive gains made recently will be reversed. We cannot let so much effort turn out to have been in vain.

I am visiting the Lake Chad Basin at this particular moment to raise awareness of just how urgently we must strengthen our response to the challenges there. So far, the inadequate attention and inadequate responses have only made those challenges bigger.

The Lake Chad Basin crisis (encompassing parts of Nigeria, Cameroon, Chad and Niger) is currently one of the largest humanitarian crisis in the world, with 11 million people in need of assistance. Among them, 6.9 million people are severely food insecure, as well as 2.5 million displaced, which is second largest displacement crisis in the world.

It is important to keep in mind that this crisis, while catalysed by conflict, is multidimensional and encompasses the security, humanitarian, climate change and economic issues that local populations in the Sahel region have long been facing.

The first priority is to support the affected countries in consolidating peace processes and, at the same time, responding to the humanitarian emergency.

Damage to agriculture–ranging from farmers’ access to their fields to vital infrastructure such as irrigation schemes, storage facilities and extension services–has been extensive in the affected areas of Nigeria, northern Cameroon, southeastern Niger and western Chad. Many of these people have already sold their belongings, including seeds, tools and animals, to survive.

Immediate livelihood support can ensure that critical hunger needs are met in the short-term. But this is only the initial step to reverse the current trend toward the depletion of livelihoods and consequent human suffering in affected areas.

The vicious cycle of destitution must be broken, and to this end we must ensure vulnerable populations have an opportunity to reap a substantial harvest and replenish their food stocks this year. Failure to restore food production now will lead to the worsening of widespread and severe hunger, and prolonged dependency on external assistance further into the future.

The time to act is now. Farmers need seeds in addition to food. One month ago the humanitarian community met in Oslo [Norway] to pledge funds for the Lake Chad Basin. The planting season there starts in less than one month.

Agriculture cannot be an afterthought. More than 80 per cent of people rely on farming, fishing and herding for their livelihoods.

The impressive gains of the past were achieved thanks to years of step-by-step agricultural development initiatives. We must ensure these are not wiped out by the current crisis.

We need to protect the assets and livelihood systems of farmers and pastoralists not only for today, but for tomorrow and the years to come. And this calls for longer-term resilience building.

A holistic approach is needed to address both the current main drivers of hunger, which include limited food production, high food prices and displacements, as well as the structural causes of vulnerability in the area, including demographic growth and competition over scarce natural resources.

The lack of access to basic social services – health, water, education – and to social protection, will inevitably jeopardise the lives of millions in a region that is highly vulnerable to shocks. Climate change in particular poses a menacing risk to an area exposed to droughts and floods.

FAO is enacting a three-year response strategy (2017 – 2019) to mitigate the impact of the crisis and bolster the resilience and food security of Lake Chad Basin communities affected by conflict.

The resilience of rural livelihoods is key to making sustainable development a reality by ensuring that agriculture and food systems are productive and risk sensitive.

United Nations agencies are also joining efforts to maximise the impact of their interventions.

The crisis is complex, and so is the road to sustainable development. To effectively address economic, social and environmental impacts coherently, we must have a regional, integrated and comprehensive approach in which national actors are on the front line.

Dr Da Silva is director general, Food and Agriculture Organisation of the United Nations (FAO).