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The East African : March 10th 2014
The EastAfrican BUSINESS MARCH 8-14,2014 NOT MEETING OBLIGATIONS EAC organs under stress as states delay remittances By Decembe≥ 2013, the five pa≥tne≥ states had ≥emitted $24 million of the $37.2 million expected f≥om them By CHRISTABEL LIGAMI Special Correspondent E ast African Community (EAC) organs and institutions are ex- periencing difficulties in funding their operations and paying debts due to delays in remittance of budgetary contributions by the partner states. A report by the Council of Min- isters released last Thursday indicates that as at December 2013, the five partner states had remitted a total of $24million while development partners had remitted only $23 million or 62 per cent of the entire budget. Of the $133 million approved budget for the year 2013/2014, partner states were expected to contribute $37.2 million ($7.6million each) while development partners would give $79.8 million. Burundi has so far made the least contribution of only 20 per cent while Kenya, Uganda and Rwanda have contributed at least 50 per cent to the budget, submitting 56 per cent, 53 per cent and 50 per cent respectively. Tanzania has submitted 48 per cent of its share. With only four months to the end of the financial year, the EAC secretariat, including East African Legislative Assembly, East African Court of Justice and Lake Victoria Basin Commission; Inter-univer- sity Council for East Africa and Lake Victoria Fisheries Organisation had received 73 per cent, 42 per cent and 32 per cent respectively of the contributions from the partner states for the financial year 2013/2014. During their 28th extraordinary meeting in Arusha on February 28, the ministers asked partner states to expedite remittances of the outstanding contributions for 2013/ 2014 and report progress in April. However, in the newly approved EAC budget for the Financial Year 2014/2015 amounting to $118 million allocated to the Organs and Institutions, partner states will be required to contribute 10 per cent more than in the previous budget. The partner states will therefore contribute a total of $46million with each contributing an equal share of $8.3 million to the total budget. Of the $46 million, a total of $42 million will be contributed equally from the each of the five partner states ministries responsible for EAC Affairs. Kenya, Uganda and Tanzania will be required to contribute an additional $1 million through the departments of fisheries to cater for the activities of LVFO. The overall budget has how- ever decreased by 11 per cent due to reclassification of the Lake Victoria Basin Commission’s budget in b≥ief Uganda sets deadline to harmonise EAC laws Uganda has set April as the target for the completion of an ongoing harmonisation of national laws within the East African Community Common Market Protocol. Speaking during the inauguration recently of a consultancy that will help align some 37 pieces of legislation Uganda’s minister for East African Affairs, Shem Bageine said 21 laws had already been revised. Under scrutiny will be laws establishing the functions of state agencies such as the tax and standards bodies whose unilateral actions have sometimes become the source of non-tariff barriers. Kenya’s yuMobile workers demand pay 45 Delegates at a Common Market Protocol meeting in Nairobi. Picture: File PRIORITY AREAS IN 2013/2014 BUDGET Implementation of the key areas of focus (Monetary Union and Common Market) in the budget will result into increased trade and economic prosperity in the region as a result of implementation of programmes and projects towards attainment of a single territory and elimination of Non-Tariff barriers. amounting to $15 million, which will be transferred by AfDB directly to the Lake Victoria Water Supply and Sanitation Project implementing agencies in the partner states. The theme of the Budget for the 2014/2015 financial year is “consoli- It will also increase access to the freedoms and rights enshrined in the EAC Common Market Protocol and enhance food security. In the 2014/2015 budget, development partners will contribute a total of $69million down by 22 per cent of the 2013/ 2014 budget. dating EAC Common Market and commencing the implementation of the Monetary Union Protocol”. Therefore the key areas of focus will be on the establishment of the EAC Monetary Union and the implementation of Common Market Protocol. East Af≥ica oil, gas me≥ge≥s to hit new high By KENNEDY SENELWA Special Correspondent TANZANIAN ROYALTY Exploration Corporation is seeking a joint venture with an investor from United Arab Emirates for the Buziba-Busolwa gold mine, the latest of deals expected in East Africa’s extractive sector this year. The Canadian owned company has signed a letter of intent to partner with Allied Gold Corp (AGC) of United Arab Emirates to develop the Buziba-Busolwa area in northern Tanzania upon conclusion of joint venture agreement. The venture will encompass Buziba site of Buckreef Gold Company Ltd (BGCL) that is 55 per cent owned by Tanzanian Royalty with State Mining Company of Tanzania holding a 45 per cent stake; and the adjoining Busolwa properties of ARL Gold Tanzania Ltd which belongs to AGC. Several other deals are said to be in the pipe- line involving large and mid sized firms. The ongoing or planned building of oil and gas production facilities with pipelines, storage and export terminals is said to be attracting more foreign companies to Kenya, Uganda, Tanzania and Rwanda, as well as Mozambique. “With budgets of $500 million per year for even independents and $5 billion for super majors, there seems to be no shortage of investment targeting new opportunities,” said Peter Parry, the vice president of Bain & Company, a London based consultancy. Evaluate’s East Africa Oil and Gas Outlook’s Global Export Hub by 2020 report makes the region a place to watch for the remainder of the decade and the firms involved have very interesting prospects in the immediate future. Compañía Española de Petróleos (CEPSA) of Spain and Milio International have formed partnership with firms already owning exploration area 11A in north western Kenya and acreage L6 along the coastline respectively. State owned CEPSA will acquire a 55 per “It has coped reasonably well with an uncertain economic environment for much of the year. ” Andy Brogan, EY oil and gas leader cent stake of area 11A from EHRC Energy Inc and Milio International Ltd 60 per cent of the onshore part of acreage L6 from FAR Ltd of Australia by funding future exploration work. Ernst & Young (EY) Global oil and gas trans- actions review of 2013 show mergers and acquisitions worldwide went down by 21 per cent in value to $337 billion and by 23 per cent in volume to just under 1400 deals. Andy Brogan, EY’s oil and gas leader said the oil and gas sector remains one of the most resilient sectors globally, with an average of four mergers and acquisitions deals per day. “It has coped reasonably well with an uncertain economic environment for much of the year but has also been impacted by industry specific supply side issues,” he said. Last year saw international oil companies came under pressure from their equity investors to deliver. National oil companies are key drivers for transaction activity due to their freer mandate to pursue acquisition strategies while shareholders have pressed publicly listed international oil companies for a more cautious approach. yuMobile agents at work. Workers reject transfer Pic: File Employees of Kenya’s mobile firm yuMobile have rejected a proposal by management for a transfer to either Safaricom or Airtel when an impending buyout deal is concluded and are instead seeking to be paid their terminal benefits first. At a press conference in Nairobi on Tuesday, the more than 200 employees said they were demanding Ksh1.2 billion ($14.1 million), which include severance pay and annual bonus. EA coffee farmers to gain as global prices rise Farmers’ incomes in the East African region are expected to rise as global coffee prices suddenly begin to rise. Records from the International Coffee Organisation show that the price of Composite is now 149.13 cents/lb, up from the 104 cents/lb it traded at the beginning of the year. The monthly average of the ICO composite indicator has risen by 25.7 per cent in February, its highest level in last five onths. The composite increased consistently over the course of the month. Kobil opens nine new stations in Bujumbura Kobil Burundi, the subsidiary of regional oil marketer KenolKobil has acquired nine new stations in Bujumbura. The acquisition brings the company’s service stations to 30 countrywide. The company said the discovery of mineral resources in the country is also expected to spur development of the energy sector. Kobil is riding on innovativeness and acquisitions to maintain a larger market. Recently, the company introduced K-Gas, its LPG brand and a voucher fuel management system.
March 3rd 2014
March 17th 2014