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Uganda central bank cuts lending rate to 10 percent

Comments (0) Latest Updates from Reuters

KAMPALA (Reuters) – Uganda’s central bank lowered its key lending rate to 10.0 percent on Monday from 11.0 percent, saying a stable exchange rate for the shilling and subdued domestic demand had contributed to an easing of core inflationary pressures.

Bank of Uganda Governor Emmanuel Tumusiime-Mutebile told a news conference the economy expanded by 3.9 percent in 2016/17 (July-June), down from a growth rate of 4.7 percent in the previous year, due to drought and slow implementation of public investment projects.


(Reporting by Elias Biryabarema; Writing by George Obulutsa; Editing by Gareth Jones)

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Uganda’s Stanbic Bank H1 profit rises 57 pct on trading income

Comments (0) Africa, Business, Latest Updates from Reuters

KAMPALA (Reuters) – Stanbic Bank Uganda (SBU), the country’s largest bank by assets, said on Wednesday its operating profit surged 57 percent in the first half of 2016, helped by strong performance in its trading activities.

A unit of South Africa’s Standard Bank, SBU’s operating profit jumped to 144 billion shillings ($42.73 million) for the first six months of 2016, from 92 billion shillings in the same period last year.

“Strong profitability was driven by … deploying high yielding investment assets and generating strong trading revenues,” Sam Mwogeza, SBU’s Chief Financial Officer, said.

The results showed strong earnings from trading in the interbank money market, interest from Treasury bills and bonds, and foreign exchange trading.

During the period SBU helped with arranging a $114 million syndicated loan for telecoms firm MTN Uganda and an interest rate swap deal with the Ugandan government on funds borrowed from China to finance a power plant.

SBU said the two deals supported the strong performance.


($1 = 3,370 Ugandan shillings)


(Reporting by Elias Biryabarema; Editing by Edmund Blair and Alexandra Hudson)

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Beetles threaten Ugandan coffee crop

Comments (0) Africa, Business, Latest Updates from Reuters

KAMPALA (Reuters) – Shrinking forest cover and climate change threaten Uganda’s coffee industry by creating conditions for the destructive black twig borer beetle to spread into plantations, an official said on Wednesday.

Africa’s largest coffee exporter, Uganda mostly cultivates the robusta coffee bean variety. Shipments of the beans are a major source of foreign exchange.

Exports in the 2015/16 (Oct-Sept) crop were expected to reach 3.6 million 60-kg bags, modestly higher than the previous period’s 3.46 million bags, according to state regulator Uganda Coffee Development Authority (UCDA).

But David Muwonge, head of marketing at the National Union of Coffee Agribusiness and Farmer Enterprises (NUCAFE), said prospects were clouded by the twig borer beetle which was increasingly migrating to coffee farms as forest cover shrank.

He said some farmers had reported losing as much as 40 percent of their potential harvest as a result of the beetle, although he did not give a forecast for the overall impact.

“The biggest threat to coffee in Uganda is … the twig borer,” he said.

The beetle thrives in the drier conditions which have become more frequent in recent years and which have been partly linked to global changes in climate, Muwonge said.

First detected in Uganda in 1993, the twig borer makes tiny grooves on the twigs – the small branches that bear cherries – of coffee trees and lays eggs there. It then infects the twigs with a fungi which causes the leaves and twigs to wilt and die.

A 2013/14 survey by UCDA found that at least 40 percent of all trees in robusta growing areas had infected twigs.

Muwonge said the beetle mostly lived in dense forests where natural enemies controlled its population. But smaller forests and drier conditions meant “some of the (beetle’s) natural enemies have been eliminated” and it was migrating to farms.

He said pesticides had only a limited impact and many farmers could not afford the chemicals.

“It’s an existential threat to our coffee because we don’t have a cure as yet,” he said.

British charity Oxfam warned in 2008 that changing weather patterns in Uganda could leave much of country unsuitable for growing coffee within 30 years if temperatures rose 2 degrees or more.


(By Elias Biryabarema. Reporting by Elias Biryabarema; Editing by Edmund Blair and William Hardy)

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Uganda says to grant oil production licences to France’s Total

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KAMPALA (Reuters) – Uganda’s cabinet agreed on Wednesday to allow the energy ministry to grant three oil production licences to France’s Total, the presidency said.

Commercial crude reserves were discovered in the east African country a decade ago but production has been repeatedly delayed amid wrangling over taxation and field development strategy.

The absence of key infrastructure, such as a crude export pipeline, has also slowed progress to production.

According to a statement issued by the president’s office, the cabinet approved a request from the minister of energy to allow the issue of three petroleum production licences to Total E&P.

The licences cover the Ngiri, Jobi-Rii and Gunya fields in the Albertine rift basin, the area along the country’s border with the Democratic Republic of Congo.

The licenses will be valid for 25 years and can be renewed for an additional 5 years, the presidency said in the statement.

Total is the second oil firm to be offered a production license after one of its partners, China’s CNOOC.

Tullow Oil, which also co-owns fields with Total and CNOOC, has also applied for production licences and has been waiting for approval for years.

In April, Uganda agreed with Tanzania to jointly develop a pipeline to the Indian Ocean port of Tanga to help export Uganda’s crude reserves, which are estimated at 6.5 billion barrels.



(By Elias Biryabarema. Editing by Louise Heavens)

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Ugandan shilling steady as commercial banks’ panic buying slows

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KAMPALA (Reuters) – The Ugandan shilling was stable on Wednesday as a recent panic purchase of dollars by commercial banks subsided after a central bank intervention on the sell side earlier in the week and subdued demand among corporate clients.

At 1002 GMT commercial banks quoted the shilling at 3,400/3,410, little changed from Tuesday’s close of 3,405/3,415.



(Reporting by Elias Biryabarema; Editing by George Obulutsa)

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Solar power hits the road in Uganda

Comments (0) Africa, Business, Featured

Kayoola bus

A government-backed motor company introduces the continent’s first sun-powered bus.

With its abundant sunshine and growing need for efficient public transportation, Africa seems like a natural place for solar-powered vehicles. Now that idea will be tested with the introduction in Uganda of the continent’s first solar-powered bus.

The bus, called the Kayoola, is the brainchild of Paul Isaac Musasizi, chief executive officer of the government-owned Kiira Motors Corporation of Uganda.

Uganda has “non-stop sun,” Musasizi said. “No other countries manufacturing (solar) vehicles are on the equator like Uganda. We should celebrate that and make it a business.”

Powered by solar panels on the roof

He said the 35-seat bus could travel 50 miles. It is powered by two batteries. One battery is connected to solar panels on the roof; the other is charged electrically for longer trips and night journeys. It takes only one hour to charge each battery, according to Musasizi.

Kiira has produced a prototype of the Kayoola and ran a test drive in February in Kampala.

The prototype cost $140,000 to produce but the company said the price tag would be about a third of that amount – $45,000 – with mass manufacturing.

Ambitious solar vision

The bus is one part of Musasizi’s larger vision for a solar-powered automobile industry in Uganda, including service stations that have solar pumps to charge cars instead of selling them gasoline.

He wants Uganda to follow the lead of Morocco – which recently switched on the world’s largest solar power plant – in developing solar farms to power vehicles and other everyday devices.

He noted that efficient transportation is essential to the Ugandan economy.

“Without proper transportation, we cannot have a good economy.”

The Ugandan government funds Kiira through the Presidential Initiative on Science and Technology. The small company currently has 32 people on staff.

Company seeks investment to grow

Musasizi said he also hopes to attract private investors who are interested in green technology. He would like to grow the company to 200 employees in five years and produce 50 buses a year.

Uganda has been planning to develop an auto industry since 2007 after students and staff from Makerere University visited the Massachusetts Institute of Technology to study innovation.

Kiira plans to start manufacturing automobiles in 2018.

The auto industry is part of Vision 2040, a blueprint for Uganda’s economic development launched late last year by Prime Minister Ruhakana Rugunda. Rugunda said the government would support Kiira until the company is able to put vehicles on the market.

Kiira plans to produce sedans, pickups and crossovers, starting with production of 305 automobiles in 2018 and growing to 60,000 per year in 2039.

Nigeria also boosts auto production

Nigeria is also seeking to grow its auto manufacturing, primarily to replace imported cars with locally produced vehicles. Nigeria plans to assemble 500,000 autos annually for the next five years compared to production of 10,000 vehicles in 2014.

International automakers including Nissan, Ford and Honda, as well as local manufacturers are gearing up to increase production. The government has granted licenses to 36 manufacturers.

First solar bus operates in Australia

Meanwhile, solar vehicles remain a rarity globally; Australia, China, Austria and the United States have developed solar vehicles while India is working to launch solar-powered transport.

Australia began operating the world’s first solar-powered bus in 2007.

The Tindo as the bus is named after an indigenous word for sun, operates in Adelaide. It uses 100 percent solar power that it receives from a photovoltaic system at Adelaide’s central bus station rather than from solar panels on the bus. The bus can carry up to 40 people, including 25 seated.

While Uganda is not the first country to develop solar vehicles, Musasizi hopes the country will become a leader in the field.

“Our passion for automobiles will help us develop solar motor technology,” he adds. “I’m hoping we will become known as the innovation hub for solar transportation technology in the world.”

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Kenya and Uganda presidents to meet oil companies over crude pipeline

Comments (0) Africa, Business, Latest Updates from Reuters

NAIROBI (Reuters) – Kenya and Uganda’s presidents and oil company executives will meet on Monday to hold further discussions on a route for a pipeline to transport the two countries’ oil, the Kenyan president’s spokesman said on Sunday.

Resolving the pipeline route is crucial to helping oil companies involved in Uganda and Kenya to make final investment decisions on developing oil fields.

“President Uhuru Kenyatta will host Ugandan President Yoweri Museveni tomorrow … They will discuss the construction of the Uganda-Kenya oil pipeline, a key plank of the Northern Corridor Infrastructure Projects,” Manoah Esipisu said in a statement.

Last wee, Tanzania’s presidency said that Total, which has a stake in Uganda’s crude oil discoveries, had set aside $4 billion to build a pipeline from Ugandan fields to the Tanzanian coast and that Tanzania wants the three-year construction schedule shortened.

The comments raised the stakes in a competition to secure the pipeline with Kenya, which wants Ugandan oil to be exported across its territory and wants the pipeline to link up with Kenyan oil fields.

“Kenya favours the northern route through Lokichar, because as part of the Lamu Port, South Sudan, Ethiopia Transport (LAPSSET) project, it would transform infrastructure and the way of life of the people in the towns and counties across its path,” Esipisu said.

He added that officials from Tullow Oil, Total and China’s CNOOC had been invited to the meeting.

Total has previously raised security concerns about the Kenyan route. Sections of the Kenyan pipeline could run near Somalia, from where militants have launched attacks on Kenya.

But industry officials have also said that connecting Kenyan fields, which have estimated total recoverable reserves of 600 million barrels, with those in Uganda would make the pipeline project cheaper because costs would be shared.

Both Kenya and Uganda, which the government says has a total 6 billion barrels of crude, have yet to begin commercial production.

Tullow Oil and partner Africa Oil first struck oil in Lokichar in northwest Kenya in 2012.

Africa Oil and Tullow were 50-50 partners in blocks 10 BB and 13T, where the discoveries were made. Africa Oil has since sold a 25 percent stake in those blocks to A.P. Moller-Maersk.


(Reporting by George Obulutsa; Editing by David Goodman)

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Ugandan police arrest opposition leader Besigye, fire teargas

Comments (0) Africa, Latest Updates from Reuters, Politics

KAMPALA (Reuters) – Ugandan police on Monday arrested opposition leader Kizza Besigye and fired teargas to disperse hundreds of his supporters in capital Kampala, a witness said, in a move likely to stoke tensions ahead of Thursday’s presidential election.

Besigye was arrested after the police asked him and his supporters to use a different route during their march into central Kampala, according to a witness at the rally.

“They wanted him to use another road which was far away from where he wanted to go. Police then started firing teargas and arrested (Besigye) with two other opposition leaders,” said the witness.


(Writing by Drazen Jorgic; Editing by Toby Chopra)

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Ugandan inflation eases to 7.6% year-on-year in January

Comments (0) Africa, Business, Latest Updates from Reuters

KAMPALA (Reuters) – Uganda’s inflation eased to 7.6 percent year-on-year in January from a revised 8.4 percent a month earlier, helped by a slowdown in food inflation, the statistics office said on Monday.

The Uganda Bureau of Statistics (UBOS) said annual food inflation had slowed to 12.7 percent in January, from 13.8 percent in December.

Core inflation – which excludes food, fuel, electricity and metered water – decreased to 7.1 percent in January from 7.6 percent in December, UBOS said in a news conference.

On a monthly basis, headline prices rose 0.1 percent in January after rising 0.2 percent in December.

David Bagambe, a trader at Diamond Trust Bank, said that, despite the decrease in inflation, the central bank was unlikely to start easing its policy stance because it needed to maintain high yields on its debt instruments to manage liquidity.

“For now, the central bank is more concerned about the huge amount of liquidity in the system than the small changes in inflation,” he said.





(Reporting by Elias Biryabarema; Editing by Kevin Liffey)


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Ashish J. Thakkar, from refugee to millionaire

Comments (0) Africa, Featured, Leaders

Ashish Thakkar

Uganda’s Ashish J. Thakkar, 34, founder and executive chairman of the Mara Group parlays a small computer business into a multinational conglomerate.

His life story reads like a sweeping epic of tragedy, adventure and success.

He was born to parents expelled from their native Uganda by Idi Amin. He became a refugee from the genocide of Rwanda. He left school at age 15 to start a computer business. Nineteen years later, that tiny business has mushroomed into a conglomerate that employs 11,000 people in 25 countries.

Meet Ashish J. Thakkar, founder and executive chairman of the Mara Group. At only 34 years of age, Thakkar’s net worth is estimated at $260 million.

Real estate, shipping, manufacturing among holdings

Mara Group, now headquartered in Dubai, operates in telecommunications, manufacturing, real estate, shipping financial services, communications technology, renewable energy and manufacturing with revenues of $100 million.

His latest venture is agriculture, large-scale maize cultivation in Africa.

The secret to his success? “It’s difficult to identify one specific reason or catalyst, but above all other things, I believe a strong sense of perseverance, always thinking big and aiming high, and of course positivity, has allowed me to realize my vision,” he said.

“Always be down to earth and approachable,” he added. “The day your arrogance or ego kicks in, it’s all over. Always remember, no matter how big you become you will still always be a drop in the ocean in the grand scheme of things.”

Foundation supports entrepreneurship

He also founded the Mara Foundation, which mentors budding entrepreneurs.

In his book, “The Lion Awakes: Adventures in Africa’s Economic Miracle,” (Palgrave: August 2015), he chronicles the economic awakening of Africa that he has seen and benefitted from first-hand.

“The West is definitely investing more in Africa — or wanting to invest more in Africa — but they’re still investing a lot in Asia as well, specifically India and China. [The] nice thing is that India and China’s investing in Africa, so the ultimate destination is us,” he says. “People do want to come to Africa; people realize that we’re the next big thing — India and China have had their time, it’s now ours.”

He also wants to be the first East African in space through Virgin Galactic, the Richard Branson-backed space tourism project. “I’m taking quite a few of flags into space, as a way to kind of send a strong message that ‘look, we as Africa have the vision and the ability as well’,” he said.

Expelled from Uganda, fled Rwanda

His super star status belies difficult beginnings.

Thakkar’s family is of Indian descent but had lived in Uganda since the 1800s until 1972, when Idi Amin expelled Asians from the country. The family lived in England for more than a decade; Ashish Thakkar was born in Leicester. The family returned to Africa and lived in Rwanda until they were forced to flee the genocide and return to England in 1994.

“From being top entrepreneurs, my parents were reduced to waking up at the crack of dawn to sell women’s clothes and drive vans to markets all around England,” he said.

From England, the family moved to Burundi before returning to Uganda when he was 14.

Started computer business with a $5,000 loan

Thakkar dropped out of school at age 15 and borrowed $5,000 to start a small computer business, traveling to Dubai regularly to bring back equipment including keyboards and mice.

“Education is good. However, informal education is much more important and valuable in life than formal education. Mentorship and vocational skills training build up an individual,” Ashish said.

Growing the business

He said he focused on growing his business rather than on taking profit.

“I reinvested everything in my business. The only way you are going to grow is if you keep on planting.”(source)

He is sometimes referred to as Africa’s “youngest billionaire” because his estimated $260 million net worth translates into more than one billion South African rand. Thakkar resists that label.

“Money should never be a measurement for anything,” he said. “I like to see myself as an entrepreneur that’s being disruptive — I like to be the underdog in a lot of cases.”

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