By Safina Buhari

The president of the Federation of Agricultural Commodity Associations of Nigeria (FACAN), Dr. Victor Iyama, has attributed the continued decline in cocoa production in Nigeria to the long period it takes to mature as well as impatience among Nigerian youth, who are expected to embrace its production.

Iyama, who spoke in Abuja, yesterday, at the 2nd Daily Trust Agric Conference, said cocoa was a good crop to invest in but required a lot of patience from youth willing to go into its production.

“It’s not four to six months, it is up to five years minimum but the beauty is that it can last for 70 years,” he said.

Dr. Victor also stated that production of cocoa beans from harvest up to the time when it is properly fermented took between 27 and 30 days depending on the weather.

He said chocolate was the easiest cocoa product to make and it generates large sums of money from the cocoa industry.

“Out of the 120 billion USD cocoa economy, less than 15 billion USD goes to cocoa beans, cocoa cake and cocoa butter while the rest goes to chocolate,” he said.

Dr. Victor noted that cocoa was the second largest foreign exchange earner, next only to oil, adding that 29 states in the country can produce cocoa.

“There’s cocoa in Adamawa, Taraba, Niger, Kogi and so many states have joined, it is no longer a southern affair but a national affair,” Dr. Victor said.

By Dorothy Nakaweesi

Kampala — The private sector in East Africa has asked Tanzania to harmonise the preferential treatments it offers to transit goods as a way of encouraging use of the central corridor .

While Rwandan trucks transiting through the central corridor (Dar es Salaam Port) each pay $150 (Shs535,000); other East African member states such as Uganda are charged $500 (Shs1.7 million) per truck for goods in transit.

Mr Kassim Omar, the chairman Uganda Clearing Industry and Forwarding Association, who is also East Africa Business Council (EABC) vice chair for Uganda, said: “Indeed, the Dar es Salaam Port has improved. But they need to harmonise the transit fees to make doing business in the region less costly.”

Mr Omar, together with other EABC members, had paid a courtesy visit to ambassador John Kijazi, chief secretary, office of the president of Tanzania on Tuesday.

Value Added Tax

The EABC officials further urged the Tanzanian government to remove the recently introduced 18 per cent Value Added Tax (VAT) on ancillary services rendered to transit goods such securing, cargo inspection, preparation of customs documentation, container handling and storage of goods to be transported.

Mr Kassim said though the VAT is levied on companies based in Tanzania, the tax is finally transferred to owners of the transit goods who are later supposed to pay VAT in destination country on arrival.

Achievements

EABC chairman, Mr Audace Ndayizeye, commended president John Pombe Joseph Magufuli as chair of the EAC summit for the remarkable progress towards the realisation of the regional integration process.

Mr Ndayizeye noted landmarks such as reduction of road blocks along the central corridor, reduction of work permit fees and signing of the East African Community Elimination of Non-Tariff Barriers to Trade Bill (2015), among others.

The Tanzanian vice chair EABC, Mr Felix Mosha, emphasised that affordable movement within the region can enrich the EAC integration.

He stated: “There is need for common understanding on air transport in terms of how to liberalise air transport and domesticating the EAC airspace”, citing that regional air tickets cost are significantly higher than international ones.

Way forward

EABC delegates also brought to the attention of the chief secretary other issues which need to be worked on in order to improve doing business and advance the integration agenda such as the liberalisation of the service sector, harmonisastion of taxes and freer movement of workers.

In response, Mr Kijazi urged EABC to learn and share best practices from other regional economic communities so as to deepen EAC.

Dar Port

Area served. Dar es Salaam Port is the Tanzania principal port with a rated capacity of 4.1 million – down weight tonnage (dwt) dry cargo and 6.0 million – (dwt) bulk liquid cargo. The port serves the landlocked countries of Malawi, Zambia, DR Congo, Burundi, Rwanda and Uganda.

By Stephen Wandera

Kampala — Russia has set new terms for its involvement in building Uganda’s oil refinery, a project it abandoned in June 2016.

A Russian consortium, RT Global Resources, the best bidder for the financing and construction of the $4 billion oil refinery in Hoima in western Uganda, walked away from the deal after the Uganda government declined to guarantee their investment.

In an exclusive interview on Tuesday with Daily Monitor at a dinner he hosted at his residence in Kampala for Ugandans who graduated from Russia, new Russian envoy, Mr Alexander Dmitrievich Polyakov, justified Russia’s downsized business plan saying it is expensive to build a big refinery that requires high technology.

“There was failure in designing, building and operating new oil refinery in Uganda. But if there is failure, there is no one side to blame. I do not want to go into details but the situation is now different. We have Russian potential investors in Uganda’s oil refinery. What we are suggesting is not a huge refinery with a capacity of 60,000 barrels per day but more compact, ready, visible solution,” he said.

“Let us say one with a capacity of 7,000 to 8,000 barrels per day. This can be built in a short period of seven to eight months. It can first use imported crude oil as progress of production is enlarged,” Mr Polyakov added.

He questioned the timely extraction of crude oil by production licensed firms (Cnoc, Tullow and Total) and also the oil pipeline being constructed from Hima to the Indian Ocean coastline.

“There is a danger that the refinery (60,000 barrels per day) would be constructed by the year 2020, but due to unforeseen reasons, production of crude oil in Uganda may not reach the necessary levels for normal operation of refinery. The issue of oil pipeline (from Hoima to Indian Ocean coastline) is also still bad,” Mr Polyakov noted.

“However, it is not up to us, the Uganda government has to decide; we just advise. Nevertheless, we’re ready to propose a more productive solution to the oil refinery,” he added.

Efforts to have a comment from Ministry of Energy and Mineral Development were futile as senior managers were reportedly locked up in a meeting yesterday evening.

However, ministry spokesperson, Mr Ibrahim Kasita, requested for time to make consultations with relevant officials which was not available by press time.

Asked how much it would cost for construction of a medium refinery and how many Rassian firms had been lined up, Mr Polyakov declined to comment saying it would be giving away their bid offers to competitors.

The refinery had been expected to commence production of 30,000 barrels per day in 2018, rising to 60,000 but those plans will now have to be re-examined.

The earlier consortium was a surprising choice when the announcement was first made in February 2015. Led by Rostec, a Russian defence and technology corporation whose businesses include manufacturing weapons such as the AK-47 assault rifles, it also included Russian oil producer Tatneft and VTB Capital, the investment banking unit of Russia’s second-largest lender VTB. Other partners included GS and Telconet Capital Partnership from South Korea.

Negotiations

Negotiations between Uganda government technocrats and RT Global started in March last year. But sources privy to the deal say one year down the road, the negotiations dragged-on over haggling on several agreements namely; Project Framework Agreement, Shareholders’ Agreement, Implementation Agreement and the Escrow Agreement.

Oil refinery

Condition. Ambassador Polyakov said there are Russian potential investors in Uganda’s oil refinery. He suggested more compact, ready, visible solution as opposed to a huge refinery with a capacity of 60,000 barrels per day. He said, a refinery with capacity of between 7,000 and 8,000 barrels per day can be built in a short period of seven to eight months.

Productive solution. He said it is up to the Uganda government to decide adding ‘we are ready to propose a more productive solution to the oil refinery.’

Production. The refinery had been expected to commence production of 30,000 barrels per day in 2018, rising to 60,000 but those plans will now have to be re-examined.

Negotiations. Negotiations between Uganda government technocrats and RT Global started in March last year but dragged-on over haggling on several agreements.

By Malik Fahad Jjingo

Masaka — In a bid to protect environment Police and National Environmental Management Authority (Nema) officers have arrested at least 10 employees of Aqua World Uganda Ltd for degrading wetlands in Masaka District.

Aqua World Uganda Ltd is said to be owned by city pastor, Samuel Kakande of Synagogue Church of All Nations in Kampala.

The employees were picked from Kaziru landing site in Bukakkata Sub-county in Masaka District where they have been reclaiming swamps and cutting down trees to plant rice and mine sand.

The affected swamp and land stretches more than 12kilometres.

Last month, Police issued a directive stopping Aqua World Uganda Ltd, from operating at the landing site after violating operational license conditions that barred them from carrying out sand mining in the area.

Dr Jerome Ssebaduka, an official from Nema, said the operation was a follow up of the earlier directive, after getting information that Aqua World Uganda Ltd had defied the orders.

Mr Ssebaduka said the suspects were also using poisonous chemicals to spray the ground where they were preparing to plant rice on top of clearing neighbouring forests which he said is dangerous to the eco system of the area.

“Nema gave Aqua World Uganda a license permitting them to plant palm oil in the area but to our surprise, we received reports that they were instead planting rice and extracting sand yet this contravenes the license conditions which we cannot accept,” he added.

Southern Regional Police Commander, Maxwell Ogwal, said they had ordered Aqua World Uganda workers to stop working on the directives of the district environment department, but they didn’t take heed.

“Police could not just sit back and watch when swamps are being degraded yet the district had already advised them to stop until an impact assessment report on their new activities at the landing site is released,” he added.

However, Aqua World Uganda Ltd area Project Manager, Deo Kinobe Mukasa, dismissed the claims of using poisonous chemicals and depleting forests, describing them as baseless.

Recently, Parliament also halted similar activities by Aqua World (U) Ltd in Lwera in Kalungu District along Kampala -Masaka highway where different companies and individuals had dug deep trenches close to the highway.

By Diane Mushimiyimana

There is need for more value addition to locally-made products to attract citizenry consumers and appeal to the regional market, the Minister for Trade, Industry, and East African Community Affairs (MINEACOM), François Kanimba, has said.

Kanimba was, yesterday, briefing journalists at the Private Sector Federation about the second Made-in-Rwanda exhibition that opens today at Gikondo Expo Grounds in Kicukiro District.

The expo, organised by the Private Sector Federation in partnership with MINEACOM, gives an opportunity to Rwandan manufacturers to showcase what they can do and their production potential to satisfy local market as government seeks to increase exports and bridge the import gap.

Sectors that will showcase their products include ICT, agro-processing, manufacturing, textile, construction, furniture, service sector among others.

Kanimba said the exhibition offers an opportunity to assess the results of the Made-in-Rwanda sensitisation campaign that has been running for the past months.

This will inform authorities and partner entities where to put more efforts for a sustainable local industry.

“We are glad that since we started the Made-in-Rwanda drive, the number of manufacturers and exhibitors has been going up. The Government has come up with different initiatives to support it, such as removing taxes on raw materials for textile industry, VAT law was revised, among others, and soon electricity tariff will be reduced. We hope these will boost domestic consumption, export and reduce import bill,” Kanimba said.

During the exhibition, a survey will be conducted through questionnaires that will be handed out and filled by the exhibitors to inform future policy formulation. An open meeting on Made-in-Rwanda will also be held.

Stephen Ruzibiza, the chief executive of the Private Sector Federation, called on the public to attend the expo to witness the potential of local firms.

“Different quality products will be on display at affordable prices,” Ruzibiza said.

A successful Made-in-Rwanda drive could save the country up to 18 per cent of what it spends on imports, according to the ministry.

To identify priority sectors that can quickly contribute to domestic market recapturing, the ministry conducted a study on “Domestic Market Recapturing Strategy (DMRS)” that was validated in February last year.

The study indicated that the total foreign exchange savings induced by DMRS could reach almost $450 million per year.

The strategy indicated three key potential sectors to recapture the domestic market; construction materials, which account for $206 million; light manufacturing, which accounts for $124m; and agro-processing, which accounts for $112 million.

By Rodrigue Rwirahira

The Government has slashed unit prices for electricity and rural water supply by 50 and 30 per cent, respectively, a move officials say will help increase affordability, service efficiency and competitiveness, among others.

Effective January 1, 2017, electricity tariff for households that consume not more than 15 kilowatts per month, will be Rwf89, down from Rwf182, translating into a 51 per cent deduction from the standard cost.

On the other hand, people whose power consumption is between 15 kilowatts and 50 kilowatts per month, the price range has remained constant at Rwf182, while those with consumption beyond 50 kilowatts per month, the deduction will be from Rwf119 to Rwf112.

In the industry services, consumers with large industries will be paying Rwf83 per kilowatts, those with medium industries xRwf90 per kilowatts as the small industries will be paying a flat fee of Rwf126 per kilowatts.

According to Rwanda Utilities Regulatory Authority (RURA) , the changes in industry sector represent a decrease of 28 and 34 per cent depending on industry category.

“This will improve Rwanda’s competitiveness particularly for investors in the industrial sector. I would like to say that the new tariff structure include the demand charge, which incentivises industrial customers to operate during off-peak hours between 11pm and 8am,” Patrick Nyirishema, the director-general of RURA, told a news conference yesterday.

Water tariff

Similar decrease in prices will also apply to water supply system but in rural areas as the revised tariff for water consumption in urban areas will come into force mid-next year.

The new tariff for water will now range from Rwf10 to Rwf8 per one 20 litre jerrycan, for water systems using gravity, meaning water that is distributed without the need to pressure it with a pump.

There are at least 815 water systems in the country, of which, according to Nyirishema, the Water and Sanitation Corporation (WASAC) uses less than 10 systems.

The price of water pumped by electricity, for example, will effective next year be at Rwf20 per jerrycan having moved from Rwf30; while the price of water pumped through a more complex system (electricity, diesel and or Turbo) will be calculated at Rwf16 per jerrycan from the current Rwf20.

Nyirishema said the new tariffs for both electricity and rural water supply reflect the Government’s policy of making social services accessible and affordable to the population, including the low income groups.

“These new tariffs aim at attracting foreign and domestic investments and promoting industrial development within the country,” he said.

Local govts challenged on support

As the regulator plans to embark on an extensive awareness campaign on the new tariff structure, Nyirishema added that his office will rely more on the support of local governments, especially at the district level, where water management boards were set specifically to enforce the new strategies.

The move, according to officials, not only aligns with the country’s commitment to extend potable water to every citizen, but it is also part of the recently adopted policy on water and sanitation.

Last week, Cabinet approved the proposed policies and strategies governing the sectors of water supply and sanitation, six years after the policies were tabled before the parliament and considered.

State Minister for Transport Alexis Nzahabwanimana said review of the policies aimed to harmonise with the recent structures in the water and energy sector.

“The changes were subsequent to the split of former Energy and Water Sanitation Authority (EWSA) into Rwanda Energy Group (REG) and Water and Sanitation Corporation (WASAC) as government sought to revitalise sector, making it more efficient and profitable at the same time,” he said.

Minister Nzahabwanimana explained that changes in policy also seek to provide water to the citizenry at the rate of 100 per cent those in urban areas, while those in rural areas should be supplied at the rate of 80 per cent before year 2017.

Access to potable water for residents in rural areas should not be far from 200 metres from the current coverage area of 500 metres, Prime Minister Anastase Murekezi said while appearing before parliament early this year to present the status of the sector in the country.

By Dorothy Nakaweesi

Expensive and unreliable electricity, if not sorted, may hinder efforts to position Uganda as the regional’s beef exporting hub.

This concern was echoed by Mr Hisham Ghaffar, the marketing manager Egypt Uganda Food Security Co. Ltd (EUFS), a company recently established to boost Uganda’s beef exports.

Mr Ghaffar while sharing the challenges EUFS is facing while doing business in Uganda during the export week clinic at Lugogo UMA show last week, said: “Extremely high electricity tariffs, make it difficult to compete with the international market.”

He said to make matters worse, they experience repetitive power supply cut-offs which make doing business more expensive.

Electricity tariffs

According to Electricity Regulatory Authority, domestic consumers pay Shs623.6 per unit while commercial consumers pay Shs565.1 per unit. Medium industrial consumers pay Shs523 per unit while large industrial consumers pay Shs347.1 per unit.

EUFS is a slaughterhouse and meat processing factory in Bombo town that processes up to 1,000 heads of cattle daily. The facility produces and exports beef, goat, lamb, fresh and processed meat, hides and rendered products. The company employs up to 350 people.

Mr Ghaffar called on people who want to supply the company with animals to respect the quarantine.

“According to International, Uganda and FAO standards for slaughtering, each district in Uganda should set up quarantine for holding livestock for a period of 21 days prior to slaughtering, to guarantee disease-free animals and to be under ministry of Agriculture, Animal Industries and Fisheries supervision,” Mr Ghaffar.

Uganda Export Promotions Board senior marketing executive Brenda Opus urged exporters to know their contractual obligations to avoid being cheated.

COLUMNBy Nancy Lee

Monrovia — Five years ago, switching on the lights with electricity from the Mount Coffee Hydropower Plant was only a dream. But, after being heavily damaged during the civil war, the Government of Liberia, under President Sirleaf’s leadership, launched an ambitious plan to restore the facility. And now, with support from the U.S. Government and other international partners – including Germany’s KfW, the European Investment Bank, and the Government of Norway – Liberia is turning a dream into a reality.

On Thursday, December 15, the first turbine at Mount Coffee will begin producing 22 megawatts of electricity that will bring the people and businesses of Liberia more reliable access to power. And, by this time next year, Mount Coffee will be fully completed with four turbines providing a total of 88 MW of electricity – four times the power the utility currently provides.

Access to power can change lives and unlock opportunity. It means students and their parents can be connected to the world through the internet, it means hospitals can treat patients with better equipment, it means streetlights can make it safer for women and girls to go out at night, and it means businesses can thrive. In fact, a recent survey found that one in four businesses in low-income countries say that access to power is their top constraint.

That is why the U.S. Government through its Millennium Challenge Corporation (MCC) supports the goals of President Obama’s Power Africa effort to bring millions of people across Africa access to electricity. And that is why MCC’s investment in Liberia is the largest Power Africa investment in Liberia to date.

The Mount Coffee Hydropower Plant is yet another example of what the United States and Liberia can achieve together, and with our partners. As Deputy CEO of the U.S. Government’s Millennium Challenge Corporation, I am thrilled to be in Liberia with Assistant Secretary of State for African Affairs Linda Thomas-Greenfield to mark this important milestone. The United States is proud of its partnership with the people of Liberia – moving beyond our work together to fight Ebola to support the nation’s recovery through economic growth, job creation, and poverty reduction. As President Barack Obama said last year when he met with President Sirleaf, working in partnership with each other, “we want to accelerate as much as possible a return to Liberian growth and development.”

MCC is a unique U.S. agency committed to reducing poverty through economic growth, and our investment in Liberia aims to tackle the country’s greatest obstacles to widely shared growth:  reliable and affordable electricity. Currently, the cost of electricity in Liberia is among the highest in the world, and only 4 percent of the population has access to the electrical grid.

Connecting homes and businesses to affordable and reliable electricity is a priority for the Liberian Government, and it is one of the surest ways to drive sustained economic growth.

MCC is also making a concerted effort to make sure local communities benefit from the Mount Coffee Hydropower Plant. As part of its investment, MCC is providing support to those around the site and building or repairing infrastructure like bridges and roads that will maintain the close links among communities in dam-affected areas.

Together with the Government of Liberia and our international partners, our $147 million investment in the Mount Coffee Hydropower Plant as part of our $257 million compact sends a clear message that Liberia is open for business. The United States is proud to stand shoulder-to-shoulder with Liberia to support a growing and thriving economy that helps lift people out of poverty.

Nancy Lee is the Deputy Chief Executive Officer of the U.S. Government’s Millennium Challenge Corporation.

Maputo — Events over the past year have shaken Mozambique’s macro-economic stability and “the sharp deterioration in economic conditions is having a deep impact on Mozambican households, especially the poor”, warns the World Bank in its latest report on the country.

The report, entitled “Mozambique Economic Update: Facing hard choices”, remarks that “an ongoing downturn, brought about by low commodity prices, drought and conflict, was compounded by the fallout from the discovery of hidden debts in April 2016”.

“The revelation of 1.4 billion US dollars in previously undisclosed commercial loans dented confidence in the country and derailed its track record for high growth and economic stability”, the report says.

The harsh terms of these loans, the bulk of which were to the security-linked companies Proindicus and MAM (Mozambique Asset Management), plus the sharp depreciation of the Mozambican currency, the metical, “created severe liquidity constraints that are placing Mozambique’s capacity to meet debt service obligations in question”, the Bank says. “The outlook is uncertain, and rests on the outcome of Mozambique’s negotiations with commercial creditors, with complex discussions ahead in 2017”.

The hidden, government-guaranteed debt pushed the public debt up to 86 per cent of GDP by the end of 2015, and the World Bank expects the figure to reach 130 per cent of GDP by the end of this year.

GDP growth has stumbled, and the Bank believes it will be no more than 3.6 per cent this year (the government’s own forecast is 3.9 per cent). Foreign direct investments and exports are projected to fall by 17 and eight per cent respectively in 2016.

Nonetheless, the report is optimistic that the independent audit of Proindicus, MAM and EMATUM (Mozambique Tuna Company) “is a key step in rebuilding confidence and signifies the focus of the authorities in restoring relations with the International Monetary Fund (IMF) and other partners”.

The World Bank believes that Mozambique still has strong potential for growth thanks to the enormous discoveries of natural gas in the Rovuma Basin, off the coast of the northern province of Cabo Delgado. It expects growth to pick up to 5.2 per cent next year and 6.6 per cent in 2018.

But it warns that a great deal is riding on the independent audit, and on negotiations with creditors. In the somewhat longer term “the key items on the agenda include setting a medium term framework for restoring fiscal sustainability, anchored in a target for reducing debt and a credible fiscal adjustment programme”.

“Enhanced financial sector surveillance and the strengthening of crisis management instruments are also priorities, particularly if further monetary tightening is in the pipeline”, the report says. “Moreover the current economic circumstances highlight the need to manage fiscal risks and contingent liabilities better”.

The Bank believes that this points to the urgency of “reforms to develop effective oversight over state-owned enterprises and other public entities”.