Baz Waiswa

Baz Waiswa

SMEs Have A Critical Role In Creating Jobs & Incomes - Miraj Barot

Small and Medium Enterprises (SMEs) in developing countries like Uganda are critical when pursuing sustainable growth because they create jobs, are innovative and pay taxes to government, Miraj Barot, the Managing Director of Tirupati Group Of Companies, told a high-level conference in Kampala.

“SMEs have played a more successful role in increasing employment and arranging incomes; they are drivers of sustainable economic growth. As they say, little drops of water make a mighty ocean; similarly, smallscale industries can combine and make a huge economy,” Miraj said.

He was speaking at the Religion & Enterprise Africa Summit 2022 event on Saturday at Sheraton Hotel in Kampala. The Summit was organized by Human Capital International Uganda under the theme ‘entrepreneurial transformation through faith-based innovation, investment, trade and technology.’

Miraj, who was discussing the topic ‘Advantages of Having SMEs in Developing Countries’, explained that SMEs have competitive structures and strategies and can easily adapt to changes. “During covid19, a tailor who was making clothes for people suddenly started making masks; SMEs are highly flexible,” he said.

He said that for success, SMEs need to be faithful to their religions inorder to be able to do good, be ethical and with high levels of integrity. "It is very important to have these values instilled in us in our youth so that they not only maintain social values of our families but also the entire country to prosper at large.

To Stop Or To Support Eacop

In recent times, most especially after the signing of the Final Investment Decision (FID) in February this year, government agencies and personalities intensified efforts to promote, protect and make a case for Uganda's premier oil and gas infrastructure project, the East African Crude Pipeline. 

A campaign codenamed Support EACOP was rolled out to counter Stop EACOP, a campaign which over the years has been traded by Civil Society Organizations (CSOs) that look at the $3.5bn Pipeline as a climate change facilitator by potentially emitting over 34 million tons of CO2 emissions every single year. 

According to revised plans, the Pipeline construction is scheduled to start in 2023 and be ready in 2025 when Uganda will realize First Oil.

The 1444km pipeline will carry crude oil from Hoima in western Uganda to the Tanzanian port of Tanga where it will be shipped to the international market. The EACOP project developers are TotalEnergies (62%), the Ugandan and Tanzanian governments (15% each) and China National Offshore Oil Corporation (8%). 

The pipeline, which will be the longest electrically-heated crude oil pipeline in the world, will transport 216,000 barrels of crude oil per day from the Tilenga and Kingfisher oil fields. Apart from carrying the Ugandan waxy black gold and the subsequent revenue, it will give Uganda, the Pipeline development will create hundreds of jobs and offer numerous business opportunities to Ugandans and Tanzanians. 

The snaking infrastructure, like the ongoing Support EACOP & Stop EACOP debate, has positive and negative sides. 

FIGHTING TO ‘STOP’ & ‘SUPPORT’ EACOP

The government and the International Oil Companies (IOCs) had for the long haul ignored the anti-fossil fuels campaigners to go on with the EACOP smear campaign until now. The environmentalists, local and international organizations and individuals called on the government to abandon the multibillion-dollar project. 

On seeing that the government was not yielding, they turned their focus on the potential financiers of the Pipeline like banks and insurance companies. And indeed they managed to get some American and European banks to back off and indicate that they cannot fund the project because of the risks it poses to the environment and its contribution to climate change. Financial institutions like JPMorgan Chase, Citigroup, Wells Fargo, Morgan Stanley, Deutsche Bank and others have ruled out any financing role. Insurance heavyweights Munich Re, Allianz, Axa and Beazley will not provide any cover. TotalEnergies has not come out to address this matter but their operations in Uganda have remained steady. 

In an interview with Daily Monitor, Mr. Peter Muliisa, the Uganda National Oil Company (UNOC) Chief Legal and Corporate Affairs Officer said they have 'entities from Europe, from Asia and all over the world willing to finance EACOP. He told the newspaper that they will be able to announce the chosen financiers in July. According to the Center for International Environment Law, Japanese Sumitomo Mitsui Banking Corporation (SMBC) is acting as financial advisor to TotalEnergies in a deal that will see a yet-to-be-named Japanese bank bankroll the transboundary project. TotalEnergies by proximity to CNOOC is also said to be considering going to China in search of a capable financier.

POPULAR GLOBAL ENERGY TRANSITION MOVEMENT 

The global conversation regarding the energy transition that will see the world move on from fossil fuels to clean energy put projects like the EACOP in a difficult position and developing countries like Uganda set to adversely be affected by this transition are putting up a fight. 

These poor countries want to extract oil and gas at any cost. And with the financial backing of international companies, as we are seeing in Uganda, the developing countries will proceed to harvest the hydrocarbons as they keenly observe the clean green energy game so that they don’t miss out on anything. 

In Uganda, there is the political will for the country to extract the hydrocarbons from the ground, refine them for the domestic market and export the rest to the international market which is the part where the EACOP comes in. 

But to achieve this, Uganda has to deal with local CSOs that have the backing and influence of their counterparts from the West. They want Uganda to abort its mission of extracting its oil and join the energy transition trend swaying into the renewable and green energy side.  

The anti-EACOP campaigners in Uganda led by Africa Institute for Energy Governance (AFIEGO), a CSO leading 13 others on his cause, argues that the EACOP project poses immense social, economic, environmental, and biodiversity and climate change risks. The CSOs alert that these risks are set to, directly and indirectly, affect forests, national parks, game reserves, lakes, rivers, wetlands and others in Uganda and Tanzania.

BIODIVERSITY RISKS RAISED

AFIEGO, quoting a 2017 World Wildlife Fund (WWF) report reveals that the EACOP will affect 2,000km of protected areas and will fragment habitats for elephants, chimpanzees and other endangered animals in protected areas like Bugoma, Wambabya and Taala forests in Uganda as well as Minziro Nature Forest Reserve and Burigi-Biharamulo Game Reserve in Tanzania.

It is also believed that the EACOP is set to affect wetlands belonging to Lake Victoria, Lake Tanganyika as well as the Wami/Ruvu and Pagani basins. Other wetland systems that are likely to be impacted include the Sango Bay-Musambwa Island, Nabajjuzi and Lake Nabugabo, Mabamba Bay, Lutembe bay and others.

The conservationists say that the pipeline poses a great risk to the rich biodiversity – the forests, game reserves, lakes, wetlands and other protected areas which are habitats for internationally-recognized endangered species. Bugoma forest in Uganda hosts over 600 chimpanzees or 12% of Uganda’s chimpanzee population; the wetland systems are important bird areas for both migratory and other bird species.

Some of the social impacts include the possibility of EACOP affecting a total of 13,000 households in Uganda and Tanzania. These households are losing land, houses, homes and a way of life. 

As they waited for compensation, the Project Affected Persons were stopped from using their land to grow perennial food and cash crops leading to food scarcity, reduced family incomes, psychosocial distress, school drop-outs, and abuse of their cultural rights and others. 

In the long-term, community and public expenditure on health, climate change crises and others could increase because of the EACOP. Air pollution, oil spills and others will worsen community health.

ALL IS WELL – GOVERNMENT, OIL COMPANIES SAY

Despite all these fears being raised by the CSOs, the EACOP project, like the other oil projects will go ahead as planned with the full blessings of the government including well-received approvals from the National Environment Management Authority which supervises and certifies all Environmental and Social Impact Assessment (ESIA) conducted before any project commences. The EACOP, after a rigorous ESIA exercise, was okayed by NEMA and will proceed. Internally, the IOCs, TotalEnergies and CNOOC Uganda, base their and international based. 

TotalEnergies recently launched the Tilenga Biodiversity Program, an initiative aimed at protecting and conserving biodiversity in and around the Tilenga project area. This gesture has been looked at as evidence and commitment from TotalEnergies indicating that prioritizing nature was top of the company’s agenda.

Mr. Philippe Groueix, the General Manager of TotalEnergies, said they are mindful of the sensitive context within which they are undertaking their activities. "We have thus committed to ensuring that we implement action plans designed to produce a net positive impact on biodiversity. The biodiversity program will ensure a sustainable approach in working with the community towards protecting and conserving the ecologically rich area.”

Speaking at the 3rd National Local Content Conference Ms. Pauline Macronald, the Environment & Biodiversity Manager at TotalEnergies said the company strives to manage the environmental effects of all its projects & operations according to the Mitigation Hierarchy principles of avoidance, minimization, restoration & offsetting. 

To enhance Biodiversity & Ecosystem Services, Ms. Macronald, revealed that TotalEnergies has partnered with NEMA, National Forestry Authority, Ministry of Water, ECOTRUST, Uganda Wildlife, Petroleum Authority and Wildlife Conservation Society to ensure a positive impact on wildlife & communities. 

Mr. John B. Habumugisha the Deputy Managing Director of EACOP Limited, a company that was formed to do business, discussing Environment and Social Governance elaborated that as a company, they continue to insist that anything they do around EACOP must be stringently compliant to the environmental and Social requirements. "In terms of the environment, we have avoided most of the sensitive areas & the design levels are stringent. Our system ensures that we don't have issues of spillage," said Mr. Habumugisha.

The Petroleum Authority of Uganda, the industry regulator, has fully backed the project saying that IOCs have done the necessary due diligence to ensure the safe production and transportation of oil through EACOP. Dr Joseph Kobusheshe the Director HSE at Petroleum Authority explained that Environment and Social Governance has become an important measure of sustainability.

THE WORLD, ESPECIALLY AFRICA, STILL NEEDS OIL & GAS  

The emergence of the pumped-up Support EACOP agenda knocking out Stop EACOP with verve reignited a public debate on what is the right thing to do. This debate also came at a time when the war in Eastern Europe between Ukraine and Russia was causing a scarcity of crude oil and sky-rocketing fuel prices globally. 

The war and the subsequent sanctions by the EU and partners on Russia created a scarcity of Natural Liquefied Gas. These scarcities and the outcry that resulted somehow underscored the fact that fossil fuels still drive the day-to-day lives of people across the world and that the world cannot afford to live without them. 

In a highly publicized article, President Yoweri Museveni May this year described efforts by developed countries to impose a moratorium on fossil fuel investment across the world as 'misguided'. President Museveni explained that due to the highly increasing population in Uganda, renewables cannot 'deliver the base load required to boost manufacturing or industrialize agriculture -- crucial for Africa in the wake of the pandemic.'

"In light of the Ukraine war, the West, too, would do well to consider a policy change -- and initiatives like the Lake Albert basin oil project may form part of the answer. By investing in oil and gas deposits in friendly nations such as Uganda, Europe could decrease its reliance on hostile nations." President Museveni penned. 

President Museveni's argument is shared by many industry players on the African continent. They argue that with Africa's socioeconomic development hinging on the exploitation of the continent's oil and gas resources, this ‘hypocrisy’ by already developed countries in the West could spell a travesty for Africa.

Mr. Leoncio Amada Nze, the president of the African Energy Chamber questions 'how is it that Africa must decarbonize while Europe continues to industrialize.' He says: “We deserve to develop our oil and gas to make energy poverty history. In 2022, Africa needs to ramp up its licensing rounds, drive exploration and position itself as the primary supplier for domestic and global markets." With over 600 million people without access to electricity, Africa cannot and should not leave its oil and gas resources in the ground, he adds. 

 

Regional Coalition Launched To Push Green Economy Agenda

The East African region is making a deliberate effort to transition the economies of Uganda, Rwanda, Kenya and Tanzania into the sphere of the green economy under the stewardship of Advocates Coalition for Development and Environment (ACODE), a Ugandan Think Tank.

In this region, ACODE has teamed up with the Institute of Policy Analysis and Research (IPAR) in Rwanda, Kenya Institute for Public Policy Research and Analysis (KIPPRA) and Research on Poverty Alleviation (REPOA) in Tanzania to launch the Green Economy Coalition – East Africa Hub (GEC-EA).

The GEC-EA, hosted by ACODE, is an extension of the globalized Green Economy Coalition (GEC), which has been formed to establish a sub-regional knowledge and action space that connects green economy and natural capital agendas across the three East African member countries.

The executive director of ACODE, Dr. Arthur Bainomugisha, in an interview with Earthfinds at the launch, explained that the Coalition is going to help countries put in place legal, policy and institutional frameworks that will help them transition to a green economy.

Economies That Value Nature

He explained that by green economy, they mean a fair, inclusive economy – one that caters for the future. “When we say green economy, we mean economies which understand that the planet has limits and can revolt because of climate change problems. And that revolt can manifest or is manifesting in a draught, bad rains (El Nino), shrinking rains and disappearing rivers like River Rwizi. In West Africa Lake Chad is disappearing” he said.

In the five years, GEC has been implemented in Uganda, Mr. Bainomugisha says there have been achievements recorded including the finance ministry greening the budget and practising natural capital accounting. Because of GEC efforts, parliament passed the climate change law among other regulatory regimes they are putting in place to facilitate the green economy transition. The government now has bought it, he said, revealing that now policymakers believe that climate change is real. Uganda cannot do it alone hence the necessity to bring on board the neighbours.

The Right Regulatory Frameworks Good

According to presentations made by representatives from Rwanda and Kenya, governments there are making progress – they have over the years put in place policies and frameworks that will make the transition to a green economy much easier.

Mr. Joseph Kagabo of IPAR says things like the banning of plastic carriers, planting of trees, the establishment of the green fund and greening of politics are good strides made by the Gen. Paul Kagame-led country which has in the recent years entertained great admiration for its economic successes.

In Kenya, Mr. Joshua Laichena from KIPPRA underscored the transitional progress being registered there considering that the country is 80% semi-arid and the nation’s Vision 2030 captures and is working on some of these areas of interest. We have good laws, what we need is to implement them, Mr. Laichena stated in a streamed presentation at the launch.

There Is Need For Targeted Reforms

Mr. Ronald Kaggwa who works with National Planning Authority in Uganda as Manager for Production, Trade & Tourism Planning noted that a macroeconomic way of doing things is fundamental if you are going to achieve the green economy goals. Also, Mr. Kaggwa notes that there should be reform to put in place healthy fiscal and monetary policies.

He adds that there should be deliberate intentions for both government and the private sector to invest in sectors like agriculture with high green growth.

The country programmes director, Green Economy Coalition, Mr. Stuart Worsley encouraged member organizations to engage each other, experiment and learn what works and what doesn’t work. “Get citizens to act; if citizens are with you, no one can stop you,” he said.

The Green Economy Coalition is the world’s largest movement committed to accelerating the global transition to green and fair economies. And with the launch of the GEC-EA, Local Green Enterprises (LGE) in the three East African member states join 53 other countries across the globe.

A Bit Of The Good, The Bad, Then The Ugly For Rare Earth Minerals In Busoga

The minister Ministry Of Energy and Mineral Development Hon. Ruth Nankabirwa early in June made a mad dash to Busoga sub region on the request of the Prime Minister (PM) Rt. Hon. Robinah Nabbanja.

The energy minister was directed by the PM in May to rush to the districts of Bugweri, Mayuge and Bugiri in Busoga where the country discovered Rare Earth Metals (REM) & Rare Earth Elements (REE) largely referred to as Rare Earths – minerals that are driving the global Fourth Industrial Revolution – to respond to unnerving queries being raised by residents.

Good & Rare Natural Wealth Potential

When government confirmed the existence of the Rare Earths, it went out looking for investors with the knowledge, skills, finances and capacity to extract these minerals. Rwenzori Rare Metals (RRM) Limited, whose majority shareholder is Ionic Rare Earths Limited, an Australian company, was given an exploration license in 2010. Rwenzori Rare Metals is owned by Ionic Rare Earths (51%), Rare Earth Elements Africa (42%) and unnamed Ugandan Partners (7%).

Through the Makuutu Rare Earths Project, a project covering about 37kms across the districts of Bugweri, Mayuge, Bugiri and Iganga, Rwenzori Rare Metals has been establishing a significant ion adsorption clay deposit that ranks among the largest ionic clay deposits outside China. Exploration results put Rwenzori Rare Metals' discovery at 532 million tonnes of ore containing rare earth elements. The company said a review has been conducted to establish further exploration potential in the next 12 months.

The chief executive officer of Rwenzori Rare Metals, Mr Warren Tregurtha, anticipates that commercial production will start in the first quarter of 2024. He said they are applying for a mining license and want land access to start.

The Need For Massive Land

The company has invested in excess of $10m and once commercial production starts; the project will have the potential to attract another investment portfolio of about $100m.The Makuutu Rare Earth Project is one of the few clay deposits that contain high concentrations of heavy and critical metals necessary for strong magnets and other modern technology.

But like all big money mining projects, they require land – and for the rare earth minerals in Busoga, the mining companies and government will not only require access to land from the community for exploration but also total take over for mining when the time come. For now, the company is planning and laying the ground for that. This means that people will lose land and get displaced from their ancestral homes. Basically, the social setting of people in the larger part of Busoga will be altered in a manner that is irreversible. 

Government Distant, Creating No Awareness

Some of the fears rising amongst the communities in the three districts were raised on the floor of parliament by Bugweri district Woman Member of Parliament (MP), Hon. Rachel Magoola. As a people's representative, Hon. Magoola alerted parliament that government was not visible in the communities to educate the residents about rare earth minerals and the presence of an alien company. The MP said there were also potential land conflicts brewing due to potential sale of land purported to host the rare minerals.

“The locals have been given a timeline of one month to sign MoUs of their land to an organization which they are worried about. My prayer is that the ministry comes out and introduces these people officially,” she told parliament in May this year. On the intensified community engagements by Rwenzori Rare Metals Limited, the MP said: “It is causing a lot of anxiety and families are fighting against each other over the idea that land is going to be sold for a lot of money. We need protection of the community from this company.”

Land Conflict Fears Raised 

Rwenzori Rare Metals recently intensified geological mapping activities something that created fear among communities. Landowners now fear that they are going to be evicted from their own land without being compensated. Speculators are brokering land sale deals in anticipation for higher returns from compensations.

Ms. Jane Nalongo, 30, a resident of Buwaaya Parish in Mayuge District told Uganda Radio Network (URN) that her siblings are being forcefully evicted by the Sub County chief backed by security operatives after their land was illegally surveyed.

The Local Council One chairperson of Makuutu village in Bugweri Sub County, Mr. Jamada Kasisa, says the brokers, mainly government officials, are on rampage forcing residents to sell off their land arguing that the government will take over their land without compensation.

The Makuutu Rare Earth Project community liaison officer, Mr. Sarah Ntono, recently told journalists in Bugiri that the company is engaging communities to create awareness and that people shouldn't worry. She also revealed that after positive exploration results being achieved in Bugweri, Bugiri and Mayuge, they are expanding to Iganga districts.

To suppress these fears, minister Nankabirwa reassured the Project Affected Persons that government is undertaking the due legal diligence that will be followed to ensure residents are compensated. She disclosed that her ministry is yet to engage government valuers to agree on the compensations.

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