Legislators rule that arcade owners should be paid in Ugandan shillings

Ugandan tenants will no longer be mandated to pay rent in US Dollars following a new law passed by parliament.  The income tax amendment bill 2017 provides that all rental agreements must be executed in Ugandan currency.

The move comes in relief of tenants in many shopping malls who were forced by their landlords, to pay rent in US dollars despite earning in Uganda Shillings. This implied that their rent bills increased whenever there was appreciation of the Dollar.

Parliament unanimously resolved that all rental agreements must be executed in Ugandan Shillings in order to protect and eliminate exploitation of Ugandan traders whose profits are pegged on fluctuations on the money market.

Members argued that the new provision will boost the Uganda Shilling which is continuously depreciating against major foreign currencies and ease the cost of doing business in the country, especially since rental fees form a major challenge to business.

Finance Committee Chairman Henry Musasizi stated the move is good for the development of the economy.

Similarly Budadiri West MP Nathan Nandala Mafabi says Ugandan traders need to be protected.

The changes came as parliament amended the income tax act to provide for the exemption from payment of income tax for a number of companies and to empower the minister to issue estimates of rent for the purposes of assessing rental tax among others.



Traders protest against Chinese who are doing petty businesses

By Robert Segawa
Business has come to a standstill as Traders operating in arcades around  Nakasero market closed their shops expressing dissatisfaction over the Chinese traders who came as  investors but now doing petty  businesses which Ugandans can take care of.
The angry traders  operating on Seroma arcade, Nalule Arcade, MM arcade among others deal  mainly in hardware materials  and   accuse Chinese investors for engaging in retail businesses and selling at low cost hence pushing them out of business.
Ugandan traders closed their shops in a peaceful demonstration with placards asking Chinese investors to go back to their country.
Police from Central Police Station has been heavily deployed around the place to prevent violence and   the DPC CPS,  Joseph Bakaleke asked traders to be calm and warned them to desist from forcing those with open shops to close

Owino market leaders call on vendors to get back to work,DFCU not taking their land

By Zirimala Daudi
St Balikuddembe Market Leadership has called upon vendors who had left their stalls to return to owino market and start working after clearing allegations that the DFCU bank was selling the land on which the market sits after SSLOA defaulted on their loan.
Speaking to our reporter the chairperson of the market Joseph Lwanga assured vendors that the DFCU is auctioning land found in kisenyi which was bought to resettle vendors during the redevelopment of the market but not the land where the market sits.
He says that opportunists were using this chance to convince vendors leave the market with an intention of grabbing their stalls where they are operating from.

New Mobile company launches in Uganda

By Patricia Osman
Fero mobiles a new mobile phone brand has entered the Ugandan market launching 2 high technology phones the IRIS and Royale A1.
Vickam Giopla business head east Africa says the phones are designed specifically for the UAE market and Africa at large and are user friendly.
The most outstanding feature on the Fero Iris is unique security feature which allows the user to unlock their phone with their eyes.
It allows fast internet speeds with an 8MP camera at the back and 2MP at the front among others, it goes for 420,000 shillings.
The Royale A1 phone which goes for 370 thousand shilling on the local market has your voice as its command.
Users will be able to unlock their phones with their voice, It also comes with a 5000mAh battery a 5MP camera in front and 8MP back camera and the internal storage capacity of 8GB among other features.
Giopla says they already in business in Kenya,
Fero phones already has its footprint in Kenya, Tanzania, Rwanda, Senegal, Ivory Coast,Ghana,Togo,Nigeria and now in Uganda.

NSSF recovers 1.8Bn shillings through online whistle blowers page

By Wasswa Deo

The ongoing whistle-blower campaign by the National Social Security Fund (NSSF) has recovered over Shs1.8 billion .

Last month, the NSSF unveiled a new web-based whistle-blower platform for aggrieved employees to report employers who fail to remit their contributions to the Fund, as required by the law.

The Head Marketing and Communications, Barbra Teddy Arimi, says, up to 90% of the cases received were through the NSSF Whistle-blower platform, hence it is one of the Fund’s most effective tools to increase compliance levels and recover billions of employees’ contributions meant for their retirement.

According to her, more than 25,000 employers are meant to pay NSSF contributions. However, 12,000 of these are not complying and of the 13,000 who are complying, only 8,900 are consistently remitting NSSF contributions for their employees.

A total of 149 cases received over the last 4 months, January recorded the most cases at 55, followed by October (27).

She added that this is a continuous campaign, urging employees to continue being vigilant and speak out to ensure that their employers remit their savings to the Fund.

Tullow oil registers losses for three years in a row

Tullow Oil, the largest investor in Uganda’s Oil sector posted a post-tax loss of USD 597 million (2.2 trillion Shillings) last year, after writing off exploration costs and booking impairments.

This is the third consecutive year that the exploration company has reported a loss. According to its results for the year ended 31 December 2016, the company recorded a full-year operating loss of USD 755 million (2.7 trillion Shillings) for 2016.

This was down from a loss of USD 1.09 million (3.8 billion Shillings) posted in 2015.

The results indicate that the company had written off USD 723 million (2.5 trillion Shillings) of exploration expenses and ended the year with a net debt of USD 4.8 billion (16.9 trillion Shillings). The company’s revenue dropped by 21 percent in 2016 to USD 1.2 billion (4.3 trillion Shillings).

Aidan Heavey, the Group’s Chief Executive in a statement said the group has made excellent progress with its East African developments and are building a high quality exploration portfolio to grow the business.

He said the major highlight in 2016 was delivering Ghana’s second major oil and gas development, the TEN fields, on time and on budget.

Heavey who is soon handing over the position of Chief executive said production from TEN, alongside other West African oil production, has provided Tullow with free cash flow and enabled it  to begin the important process of deleveraging our balance sheet.

Early in January this year Tullow announced that it was to farm down part of its stake to Total at USD 900 million (3.3 trillion Shillings) and downgraded its production outlook for 2017.  Upon completion, the farm-down will leave Tullow with an 11.76 percent interest in the upstream and pipeline projects.

This is expected to reduce to a 10 percent interest in the upstream project when the Government of Uganda formally exercises its right to back-in.

Completion of the transaction is subject to certain conditions, including the approval of the Government of Uganda, after which Tullow will cease to be an operator in Uganda. The disposal is expected to complete in 2017.

There is speculation that Tullow may divest more of its projects in Kenya so as to cover about USD 5 billion (18 trillion Shillings) debt.

Tullow Oil announced a new oil discovery in Kenya, with the Erut-1 well in onshore Block 13T finding oil at the northern limit of the South Lockichar basin. It said there was good progress on a standalone development in Kenya with an export pipeline to Lamu.

It said life-of-field development costs (comprising operating expenditure, capital expenditure and potential pipeline tariffs) are expected to be in the region of USD 25 (89,000 Shillings) to USD 30 (106,000 Shillings) per barrel.

Preparations for the upstream development Front End Engineering Design (FEED) are under way, with FEED expected to commence in the second half of 2017.





Glu district council goes ahead to implement the alcohol control ordinance

Gulu District council has rejected the proposal from the Trade and Industry Ministry to stay the implementation of the Alcohol Control Ordinance until September.

Councillors voted unanimously to continue implementing the ordinance to protect the health of their electorate in an extra Ordinary council meeting attended by the Ministry officials on Monday.

The Gulu District Alcohol Control ordinance regulates the manufacture, distribution, sale and consumption of alcohol in Gulu district.  It also restricts time for opening of bars to between 5pm and 1 am. It also requires that the alcohol should be packaged in glass not less than 250 millilitres.

During the meeting, Richard Okot Okello, an Assistant Commissioner in the Trade and Industry told the council that the ordinance is subject to the World Trade Organisation regulations since it regulates packaging.

He told council that the ordinance creates technical barriers to trade with regional and international blocs including the East African Community (EAC), Common Market for East and Central Africa (COMESA) and the World Trade Organisation (WTO).

He argued that unless revoked, Uganda risk being sued by member countries at the dispute settlement system of the World Trade Organization for failing to notify members of the coming trade barrier.

“Article 2 and 3 of the World Trade Organization (WTO) treaty requires all member countries to notify other World Trade Organization Members in due time of any technical barrier to trade. Uganda has not done this in the course of enacting this ordinance”, Okello said.

Okello also argued that the ordinance could also lead to the withdrawal of trade concessions with Uganda, something he described as unhealthy for the country’s economy. He asked Gulu district to go slow on the implementation of the ordinance as Uganda develops a nationwide approach to the problem of alcoholism by September.

However, none of the councilors supported his proposal. Simon Peter Oola, the Gulu LC V Vice Chairperson, said it was wrong for the Ministry to attempt to stay the implementation of the ordinance since it only affects locally manufactured gins.

He says World Trade Organization member countries can continue to trade normally with Uganda as imported gins are not affected by the ordinance.  Martin Mapenduzi Ojara, the Gulu LC V chairperson, says the district complied with all procedures and consulted other stakeholders before enacting the ordinance.

He says staying the implementation of the alcohol ordinance will set a bad precedence. He also said it would be selective justice to stay the implementation of the ordinance after impounding 307 cartons of alcoholic gins from some traders.

The council meeting attracted several members of civil society organizations, religious and cultural leaders who contributed to the enactment of the ordinance. Members of the public in the gallery occasionally flashed placards with various messages including “Long Live Gulu Leaders”, “Health before Profit”, “Stop Sachets Now. No Delays”, “Leaders Keep Your Promise” and No Sachets Waragi amongst others.





Umeme customers will soon be able to borrow power units with the new yakako

Yakako is a singular verb meaning “You shine” in the local Luganda dialect. On the other side of the spectrum, it is a Ugandan bred service that will enable pre-paid Umeme Yaka users to be able to borrow more units to power their homes and businesses using mobile money.  Extension of the service to Post-Paid Umeme customers is in coming soon mode.

Future plans of extending the service to bank account holders are ongoing.The service will be used over mobile or across the web regardless of whatever phone one is holding. Smartphone users will be provided for with an app while feature phone users will opt for USSD codes.

For Yakako to extend the service to any prospective customer, they will assess one’s credit worth depending on the volume of transactions committed on one’s mobile money or bank account, akin to Mokash that employs a similar measure. This will determine how many units the prospective customer qualifies for. Customers then pay back the next time they top up their mobile money, bank accounts or when they use aggregators like Pay way, Ezee Money, New Pay among others to pay for Yaka.

Yakako is currently in  a prototype phase with measures to conduct pilot studies and with possibilities of extending it to other utility services like Water and probably PayTV or Internet services as is the case with payment aggregators.

Yakako wishes to partner with businesses both from the public and private sectors about extending this service to their respective employees, Mobile Network Operators in order to leverage their networks and large install base, Aggregators to leverage their POS terminals, and distribution centers and Banks to offer the service to their account holders.



DFCU wins 13 institutions, takes over Crane bank

DFCU Bank Limited has taken over Crane Bank, more than four months after the Central Bank took control of what used to be Uganda’s third largest banking institution.

Bank of Uganda Governor Emmanuel Mutebile told journalists in Kampala this morning that the central bank has transferred all Crane Bank’s assets and liabilities to DFCU group adding that all customers and depositors of Crane Bank shall now have their accounts operated by DFCU Bank Limited.

Mutebile said DFCU emerged winner out of 13 institutions that competed to take over of Crane Bank.  He added that the sale was in exercise of the Central Bank’s powers as a receiver, under Sec 95(1)(b) of the Financial Intelligence Act.

Ibrahim Kabanda, a Board Member of Bank of Uganda defended DFCU’s takeover of Crane Bank saying it is a very strong bank supported by big institutions in Europe citing the Commonwealth Development Corporation (CDC) and others.

DFCU runs 47 branches across the country, some of which now include former branches of Crane Bank. Prior to its closure, Crane Bank had 46 branches across the country and an asset base of 1.79 trillion Shillings.

The central bank took over Crane Bank in October, 2016 upon determination that it was significantly under-capitalized and posed systemic risks to the stability of the financial systems. Back then, Mutebile said that the continuation of Crane Bank activities in the current form was detrimental to the interests of its depositors.

Problems within Crane Bank were first detected at the end of September 2015 after regular examination indicated that there was significant under-capitalization of the bank.

This was also confirmed in the auditor’s report of 2015 indicating that the Bank reported a consolidated pre-tax loss of over 7 billion Shillings during the year as a result of an increase in expenses and losses on loans and advances. This was a contrast of its 57 billion Shillings profits recorded in 2014.

The central bank governor explains that the problem was partially caused by a number of bad and doubtful loans that could have undermined the performance of the bank. He however adds that the management of the Bank takes a share of the blame for the crisis.

Justine Bagyenda, the executive director for supervision explains that a bank is declared as significantly under-capitalized, when its level of capitalization is less than 50 percent of the statutory requirement of 25 billion Shillings.

It has since then been managed by a statutory manager.

About DFCU

DFCU Limited was started by the Commonwealth Development Corporation (CDC) of the United Kingdom and the Government of Uganda through the Uganda Development Corporation (UDC) under the name of Development Finance Company of Uganda Limited.

Later restructuring brought in DEG (of Germany) and International Finance Corporation (IFC) as equal partners with CDC and UDC, each having a 25 percent stake in the company. Its objective was to support long-term development projects whose financing needs and risk did not appeal to the then existing financial commercial lending institutions.

DFCU Limited was incorporated under the Laws of Uganda on the 14th of May 1964, as a Private Limited Liability Company. In 1999, DFCU acquired Uganda Leasing Company which became DFCU Leasing, to provide direct asset based finance.




Government launches 12M Euros fund to support agribusiness

By Alice Lubwama
Government has a launched 12 million euro approximately 46 billion private agro equity fund to boost investment in the agribusiness sector in the country.
The money from European Union and national security fund will  enable small and medium agri -business in Uganda access long term financing.
The minister of finance Matia Kasaija says that the intervention will strengthen the capacity of small and medium business involved in agribusiness managed by Pearl Capital partners an independent agricultural investment fund manager and the international fund for agricultural development.