Government Suspends Refinery Lead Investor

The government of Uganda has announced that it has suspended negotiations with Rostec Global Resources (RTGR) Consortium for the role of Lead Investor for the Uganda Refinery Project, Dr. F.A. Kabagambe-Kaliisa, Permanent Secretary Ministry of Energy and Mineral Development, said in a statement. 

The Government team had shortlisted two bidders namely RTGR which was ranked as number one and the Preferred Bidder and the other led by SK Engineering of South Korea ranked as second and Alternate Bidder. The Government of Uganda has been in negotiations with the RT-Global Resources Consortium for the last 14 months.

Final agreement was reached in principle in May this year. However, just prior to the expected signature date at the beginning of June 2016, the RT-Global Resources Consortium made additional demands from the Government, seeking to reopen and renegotiate issues that had already been agreed between the parties. Consequently Government was left with no choice but to halt negotiations and draw the bid bond.

Kabagambe said government is now proceeding to invite the Alternate Bidder - SK Engineering & Construction for negotiations.


Jumia Becomes One Stop Online Destination In Africa

Africa Internet Group last week took a bold step in deepening its business on the African continent by rebranding all their nine platforms to Jumia. The company said the change will connect its companies into Jumia’s ecosystem with a new vision, "Expand your horizons".

This means that all services will bear the name Jumia -- with a focus on their main activity: Jumia Market (kaymu) / Travel (jovago) / Food (hellofood) / Deals (vendito) / House (lamudi) / Jobs (everjobs) / Car (carmudi) / Services (AIGX).

Ron Kanawamara of Africa Internet Group said all services will be interconnected so that customers can easily browse from one Jumia service to another in one click. “We are taking the entire economy online, enabling small, medium and large African companies to find new customers and serve them in a new way,” Kanawamra said at a conference.

“Additionally, we will allow all our customers to navigate seamlessly across all our platforms with the same login credentials - so they don’t have to re-enter their information when navigating on a new platform,” Kanawamara added.

Kanawamara revealed that over 500,000 local companies are making business on Jumia every day and that more than 10,000 brands are building their awareness on Jumia, local logistics companies are delivering millions of packages every year thanks to Jumia.

After 4 years of successfully establishing and growing its online services as leaders in their markets, Africa Internet Group, now Jumia, has become the number one E-commerce platform in Africa.

“We founded our companies with a very strong belief: Internet can improve people’s lives in Africa. Uniting all services allows us to better help our customers fulfill their daily aspirations. This is all possible because people connect to our platform to access those services and products in an environment that we have designed for them, addressing their needs and expectations on quality, choice, price, trust and convenience.” said Sacha Poignonnec and Jeremy Hodara, founders and co-CEOs of Jumia.

People can now find on Jumia all their needs; branded products with Jumia : fashion and electronics with Jumia (prev. Jumia and Kaymu)], local sellers with Jumia Market (prev. Kaymu), hotel booking with Jumia Travel (Jovago), food delivery with Jumia Food (Hellofood), Jumia House (Lamudi), Jumia Jobs and (Everjobs) and lastly logistics services with Jumia Services (AIGX).

Furthermore, sellers will also benefit from this move, by getting access to more traffic and to a greater world of opportunities. Every day, Jumia helps and encourages restaurants, hotels, local sellers, brands, real estate agents, car dealers, large companies and logistic companies to become better, bigger in performance thus creating positive impact for Africa.

The founders reiterated that, “Operating under the same brand name reinforces the legitimacy of proposing other services to our customers and to our sellers. We want to have one strong brand that is trusted and loved by our customers across Africa”.

Jumia’s new vision, “Expand your horizons”, expresses the group’s ambition to transform people’s lives through internet, overcoming the ground market challenges of the continent and giving all Africans the opportunity to access high quality services and products everywhere.

MTN Announces 100% Data Bonus Promo

MTN Uganda has announced a new promotional offer dubbed “Juzza Internet”, under which all bundles loaded of 100MB or more will be automatically doubled. “Juzza Internet” has been introduced to reward customers for using MTN Internet bundles and make it easier and more affordable for them to enjoy the benefits of the internet, without worrying about high costs. 

“We recognize that the Internet is becoming more and more important for nearly everybody, and as such, it is our goal to enable as many new connections as possible. Juzza Internet is yet another step towards realizing this goal,” said Mapula Bodibe, MTN’s Chief Marketing Officer. 

“The need to have instant continued access to the internet has resulted in a higher demand from customers for data to be easily accessible at an affordable tariffs. The new Juzza Internet promotion offers customers great value and rewards them for their usage,” Mapula explained 

 “We know that our customers want value for money and we have thus introduced an offer that will enable our customers to enjoy a significant reduction in the costs of their Data, to satisfy their needs,” she further noted. 

According to the Chief Marketing Officer, Juzza Internet is one of the ways through which MTN is demonstrating its commitment to the delivery of a Bold, New Digital World by creating new opportunities for trial plus increased use and penetration of Internet services in Uganda. 

Supported by consistent investment in its network infrastructure, MTN currently boasts a countrywide 4G network that ensures customers enjoy a world-class Internet experience irrespective of their location within the country. 

“Our customers are looking for a differentiated user experience with affordable data products and services. We are continuously challenging ourselves to identify new ways through which we can enable our customers to do more in their lives through our telecommunication services, including MTN Internet bundles to access the Internet,” added Ms Bodibe. 

The Juzza Internet promotion will be valid for a period of 3 months, during which all Internet bundles of 100MB or more will be automatically doubled. 

Facts about the “Juzza Internet” promotion.

Customers who load bundles of 100MB or more will be automatically doubled with the equivalent value e.g. when a customer loads 1GB, they get a total of 2GB

  1. To enter the Juzza Internet promotion, the customer dials *150*3*1#
  2. Customers can continue loading bundles the normal way i.e. using their airtime and/or Mobile Money balances
  3. If a customer wants to opt out of the promotion, they dial *150*3*2#
  4. The promotion will run for a period of 3 months
  5. This offer is not valid for MTN Social and Tooti Bundles.
  6. And owing to a systems upgrade, MTN customers using MTN data services will now be enabled to do more with their data i.e. MTN data bundles can now be used for longer subject to expiry period.

Can Oil Diversify Uganda’s Economy?

Uganda is striving to achieve middle income status by 2040, and a lot of optimism and hope is riding on the 6.5 billion barrels of crude oil in the Lake Albert basin. Many natural resource countries, however, have not fared well, and are struggling with inflationary pressures that affect competiveness, unsustainable subsidies and tax incentives which bleed the budget and undermine local revenue mobilization. High levels of corruption fueled by rent seeking behavior is also a challenge. 
Moreover, the global oil market is infamously finicky and the ‘black gold’ does not always turn out to be such a glittering prospect. But, ample experience abounds, and Uganda can avoid the mistakes of others. Indeed, now is the time to ‘prepare for oil’ and put in place a set of policy actions and institutions to maximize benefits and mitigate risks.
The upward and downward swings of the global natural resource market have caught many oil producing countries flat-footed. Nigeria, which depends on oil for more than 70% of its public revenues, is currently in need of financial support. Ghana and Zambia are facing similar dilemma. Angola, which expanded its public investment program massively—almost six-fold—during the golden days of booming oil prices, is now grappling with the results of its ill-planned and managed public investment projects.

Under-execution of budgets and operational deficiencies have resulted in inefficiencies that are estimated at almost 5% of Angola’s annual gross domestic product (GDP). The ensuing deteriorating macroeconomic environment has created major economic distortions with strong negative impact on non-oil economic activities—the Dutch disease. Uganda should not head down the same slippery slope of the natural resource curse.
The experience of Botswana, Indonesia, Malaysia, and Mexico, on the contrary, show that exploitation of natural resources can provide a pathway to middle and high income status provided transparent accountability systems and a conducive environment for private sector development are put in place, and natural resource rents are invested to create other forms of capital. Another critical aspect is economic diversification. These countries have moved away from single resource dependence by diversifying their exports, and witnessed accelerated and sustained economic growth over time.
Economic diversification is already happening in Uganda, and the structure of the economy is gradually shifting from reliance on agriculture to manufacturing and services. The transformation of Uganda’s economy is also visible through an increased diversification of its trade base both in terms of geography—the number of Uganda’s trade partners has increased—and type of products—the country’s export basket now includes some 60 new products, e.g., cooking oils, processed fruits and vegetables, and fish. The gradual transformation in the output and export structures of Uganda, however, has not been accompanied by a similar shift in the employment structure—as the vast majority of jobs are still in the agriculture sector. 
In the latest World Bank Uganda Country Economic Memorandum, , we propose a strategy for how the country’s  oil could fuel economic diversification so that it  can harness the full potential of its oil and mineral resources to secure the long-term future of its people, sustainably.  Titled, Economic Diversification and Growth in the Era of Oil and Volatility,” the report sets out a strategy based on key building blocks articulated around enhanced transparency and environmental management, macroeconomic and fiscal prudence, and an improved investment climate for private sector.
Pursuing this strategy, could generate growth rates averaging nearly 10% for Uganda over the five years following the start of full commercialization of oil production, assuming that the oil price will recover in the medium term to its pre-crisis level of $90 per barrel.  This would be a doubling of the current estimated growth of 4.6% of 2015/16. Indeed, provided these assumptions hold, oil production could increase total government revenue from the current 13% of GDP to about 18% on average for more than 20 years.
Oil can help Uganda diversify by promoting the emergence of new industries, such as chemicals, fertilizers, cement; and by addressing key bottlenecks to sector growth in agriculture, manufacturing, mining and tourism through investing oil proceeds in infrastructure, better health care, as well as improving skills through quality education to develop the human capital. Moreover, the exploitation of oil can create synergies with local industries and services through purchases from and sales to other sectors—backward and forward linkages. Successful countries have harnessed those channels over time.
In a nutshell, how well Uganda ‘prepares for oil’ will determine how much the country will benefit from its oil. Uganda can buck the trend of some other countries affected by the resource curse by setting up the right institutions, improving the performance of existing institutions, and adopting and implementing the right set of policies. This is easier said than done, but it’s doable and absolutely essential to turn Uganda’s oil into a blessing rather than a curse for all its citizens.

This article was written by Christina Malmberg Calvo, World Bank Country Manager, Uganda

SOURCE: World Bank/World Bank Blogs

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