Legislators in Zanzibar told to ensure Isles from Oil, gas wealth

Legislators have been urged to approve laws that ensure the expected ‘ Oil and Gas’ wealth benefits all citizens in the Islands of Zanzibar.

The legislators are attending orientation seminars which started after the launch of the 10th House of Representatives two weeks ago

Lecturer at the Diplomacy College, Dr Salim Hamad was one of the facilitators of the seminar for the law makers who cautioned that bad laws and in-equality in natural wealth, when it becomes a reality, always lead to conflicts in the society.

“You are the new law makers and are expected to approve laws and are expected to approve laws and policies regarding the use of natural resources, including the highly expected oil and gas. You have to be careful so that you do not the country into crisis because of the wealth, Dr Salim said.

Before leaving office, retired President Dr Ali Mohamed Shein said that exploration results indicate that Zanzibar areas may have oil and gas, and that verification of data has been going on well. Similar sentiments has been made by his successor, Dr Hussein Mwinyi.

The leader promised that once drilling starts in the near future, the wealth will benefit all the people in the islands.

And, one of the facilitators at the legislator’s seminar reminded them about risks of conflict over oil and gas if laws and policies are not well written.

“As the Oil and Gas programme continues, you should find areas that may lead to disputes and avoid them by having workable laws, regulations, and policies regarding drilling and distribution of the wealth . “the facilitator said.

Dr Juma Kanuwa – a lecturer also from the Diplomacy College made a presentation of “Economy and Oil and Gas”, putting emphasis on having better planning and good management/administration so that Zanzibar’s economy can grow smoothly.

Discussing the topic, several legislators commended the facilitator for a timely topic on oil and gas organized by the ‘Zanzibar Petroleum Regulatory Authority (ZPRA), saying “It is better to take precaution to avoid conflicts before drilling starts.”

Indian Ocean oil and gas: Africa’s next energy frontier

There have been substantial discoveries of oil and gas in East Africa and the Indian Ocean in the last decade, but the full potential of the region has yet to be realised.

When, in February, Somalia’s ambassador to Kenya found himself bundled aboard a direct flight to Mogadishu after hasty instruction from the Kenyan government, it was clear that the long-standing Indian Ocean border dispute between Kenyan and Somalia had reached a new low.

With both sides laying claim to a 100,000sq km triangle containing potential offshore oil and gas, the long-standing row – which was taken to the International Court of Justice (ICJ) in 2014 – was triggered once more after Kenya accused Somalia of auctioning off four contested blocks to bidders during a conference in London earlier this year. 

While the Mogadishu government strongly denies this claim, Kenya’s foreign affairs principal secretary, Macharia Kamau, hit back by saying:

“This unparalleled affront and illegal grab at the resources of Kenya will not go unanswered and is tantamount to an act of aggression against the people of Kenya and their resources.”

As diplomats and ministers continue to trade blows, accusing one another of undermining national sovereignty and threatening regional stability, the standoff reminds the region of its lucrative hydrocarbon reserves and the high stakes involved in their exploitation. 

Substantial discoveries made over the past decade have drawn the focus of large international oil companies (IOCs) – some of whom are beginning to produce at established sites along east Africa’s India Ocean seaboard – and have triggered the interest of a flurry of smaller exploration companies and eager parastatals looking to pioneer the next big find. 

Africa’s Indian Ocean sits directly opposite the energy-hungry Asian markets of India, Southeast Asia and China.

With liquefied gas able to ship directly from source to port across the ocean, the positioning acts as a huge draw for investors looking to minimise their transport overheads and reach their Asian customer base.

With industry experts believing the relatively unexplored region may hold significant oil and gas reserves, the lucrative sector could fast-track development if governments are able to capture, realise and democratise the profits.

Ed Hobey-Hamsher, senior Africa analyst at global risk consultancy Verisk Maplecroft, argues that oil and gas potential in the region is vast.

“I don’t think anyone wants to be left behind,” he says.

“It’s not an easy place to do business but that certainly doesn’t mean that IOCs can afford to overlook it.” 

Regional potential

Darren Woods, CEO of Texas-based ExxonMobil, the world’s largest publicly traded oil company, stunned industry observers last year when he announced plans to spend more than $200bn over the next seven years to increase his firm’s production of fossil fuels, along with investing in petrochemicals and refining. 

This announcement came against a backdrop of modest capital expenditure in oil and gas by industry majors since the price of crude tanked in 2014.

As oil prices tentatively rebound, with Bank of America Merrill Lynch’s energy outlook for 2019 expecting Brent crude to settle at around $70 – although the risk of price volatility is high in the context of global trade disruptions – many IOCs are looking to ramp up output and increase profits. 

ExxonMobil is banking on increased demand, despite global efforts to diversify the energy mix, and frontier markets like East Africa’s Indian Ocean will come to represent an ever-increasing share of industry portfolios, say analysts.  

Two substantial discoveries over the last decade – gas in northern Mozambique and oil in Uganda – have directed the industry spotlight towards the East African and Indian Ocean regions, with many believing these finds are just the tip of the iceberg.

Workers on a rig in Mozambique’s offshore Coral Field. The Coral natural gas field located in Area 4, offshore Mozambique, is being developed by Eni as the operator.

Italian oil major ENI along with US explorer Anadarko (which was acquired by Chevron in April for a total cost of $50bn) made a series of discoveries in Mozambique’s Rovuma Basin in 2010, in what was billed as the biggest natural gas find in recent decades.

With proven reserves of 100 trillion cubic feet (tcf), and resource estimates of 150 tcf, the Rovuma field holds enough gas to supply Germany, Britain, France and Italy for 15 years.

If these reserves are exploited effectively, experts predict that Mozambique could become the world’s third largest exporter of liquefied natural gas (LNG).

In 2006, Uganda discovered oil in the Albertine Rift Basin near its border with the Democratic Republic of Congo (DRC).

Reserves are estimated at 6bn barrels, with production expected to begin in 2022 and plateau at 230,000 barrels per day (bpd).

Although this pales in comparison with Nigeria’s capacity of 2.5m bpd, the ability of Uganda to kickstart production by partnering with large companies – in this case French major Total and China National Offshore Oil Corporation – is regarded as a prototype for the region. 

Matthew Richmond, owner of Dar es Salaam-founded Samaki Consultants, believes the success or otherwise of these two projects will ultimately determine the overarching appetite for investment in oil and gas throughout the region.

“All eyes are on how it will work out with Uganda exporting their crude and how it will work out with Mozambique exporting their liquefied natural gas,” he says.

“Those are the two benchmarks on what happens in eastern Africa.” 

After considerable industry to-ing and fro-ing following setbacks that include instability in the region and Mozambique’s hidden debt scandal, Maputo is awaiting final investment decisions (FIDs) from Anadarko and ExxonMobil – the two largest stakeholders in its gas fields – amounting to $20bn and $30bn respectively. 

ExxonMobil’s Darren Woods has stated that the firm’s decision will be made later this year, as the company evaluates bids submitted by groups competing to build a pair of mega-liquefaction trains to liquefy gas in Mozambique’s north-eastern Cabo Delgado region – home to the Ruvuma Basin. 

Anadarko’s decision may come earlier, with chairman Al Walker saying they are “very close” after having secured a sales and purchase agreement (SPA) with India’s Bharat Petroleum Corporation, which has undertaken to purchase 1m tonnes per annum (tpa) of LNG for 15 years.

This brings the total number of locked-in gas sales to 8.5m tpa out of a 12.88m tpa capacity – a level Anadarko has previously said would allow it to make the investment.

Anadarko, an LNG and Africa novice, was forced to secure export destinations before it was able to secure finance and ultimately commit to the project.

ExxonMobil, with its large balance sheet and global network of buyers, along with extensive experience on the continent, is able to commit with far fewer stipulations from its partners. 

While the FIDs signal the biggest steps yet towards unlocking Mozambique’s gas potential, Verisk Maplecroft’s Hobey-Hamsher emphasises that the two fields aren’t predicted to come online until 2024, meaning that stakeholders – particularly the Mozambican government – shouldn’t expect dividends anytime soon. 

“If you talk to the government, they are still talking about LNG coming online in 2022 and that’s just not feasible,” he comments.

“We expect the fields to come online in 2024 but in terms of the government revenues that will be 2027.” 

This, he argues, represents significant political risk for Mozambique as there are “massive discrepancies” between what the government is promising and what it will be able to deliver. 

Other hindrances that continue to blight the country’s investment climate include the discovery of $2bn worth of hidden public debt in 2016, which saw the IMF cut funding and confidence in Mozambique plummet. 

Al-Shabaab affiliated militants also continue to wreak havoc in Mozambique’s Cabo Delgado region, with an attack on Anadarko LNG infrastructure earlier this year resulting in the death of a company contractor.

Such political and security risks mirror issues in other resource-rich areas across the continent and are often the deciding factor in whether governments can capitalise on their natural wealth or not. 

Bad investment climate

The Rovuma field extends into Tanzania, but the latter country’s political climate is retarding investment and activity in a sector with an estimated 55 tcf of gas reserves. 

In many respects, Tanzania was first out of the blocks in terms of developing its gas fields, with the shallow offshore fields of Songo Songo and Mnazi Bay feeding gas into places including Dar es Salaam since the start of the millennium.

However, under the presidency of John Magufuli much of the foreign capital needed to continue developing resources has dried up.  

Verisk Maplecroft’s 2019 Resource Nationalism Index puts the country in the “extreme risk” category.

In its crackdown on the extractive industries the government has hiked taxes, changed contracts and demanded stronger local content requirements.

While Tanzania should be commended for aiming to get more back from its latent wealth, the erratic and unilateral manner in which it has pursued these goals has strained ties with the business community. 

In the energy sector, government talks with Norwegian firm Equinor have languished: the final investment decision on a $30bn onshore LNG export terminal still looks distant. 

Richmond explains that much of the delay has been caused by tough demands from the Tanzanian government.

“In the past, if there was an issue with a contract it was arbitrated in an international court,” he says.

“Now Tanzania has said it has to be done in the local court – how do you think that will work out?” 

While Mozambique, in contrast, has greater security and legacy issues, its government is more welcoming to foreign companies, which is reflected in the number of multinationals clamoring to do business there. 

An oil worker passes the waste gas venting pipes on the Casablanca oil platform, operated by Repsol SA, in the Mediterranean Sea off the coast of Tarragona, Spain, June 28, 2016.

Mozambican President Filipe Nyusi recently announced plans to establish a sovereign wealth fund to govern gas revenue and focus spending on infrastructure development, poverty reduction and economic diversification, as well as protecting capital from corruption.

This mirrors Norway’s $1 trillion sovereign wealth fund, the largest in the world thanks to years of oil revenue, and suggests that Mozambique is at least nominally working towards effectively managing its gas sector. 

Maputo is now set to launch its sixth licensing round in the second half of this year with Hobey-Hamsher predicting a full house.

“I expect all the major IOCs to be very interested in whatever acreage Mozambique makes available during that licensing round, should it go ahead,” he says. 

Disputes in Somalia

In contrast with Mozambique’s progress, the spat between Somalia and Kenya playing out further up the coast only adds to Somalia’s long-standing difficulties in developing its significant offshore potential.

According to seismic surveys conducted by Spectrum Geo and Soma Oil and Gas, Somalia could hold as much as 100bn barrels worth of offshore potential. 

Yet fortunes have gone from bad to worse as the government mismanages the sector and is repeatedly undermined by al-Shabaab attacks and the constant wrangling over authority with the autonomous regions of Puntland, Jubaland and Somaliland, the last of which has declared itself independent.

British company Soma Oil was one of the first energy explorers to enter Somalia in 2013, after nearly two decades of conflict.

The excitement abated after the company was accused of “appearing to fund systematic payoffs to senior ministerial officials” by a UN report and was investigated by the UK government’s Serious Fraud Office (SFO).

However, in 2016 the SFO concluded that there was “insufficient evidence to provide a realistic prospect of conviction”.

The conference in London earlier this year – which was organised by Spectrum Geo and the Somali government and led to Kenya’s allegations that Somalia was auctioning contested blocks  – looks to have reignited activity in the sector.

Somalia promoted 15 new offshore blocks, including the four contested ones, with the government saying it will accept bids for exploration licences in November.

Industry remains sceptical

Industry insiders, however, are sceptical that any of the major players will take up Mogadishu’s offer despite the attractive offering presented in the geological surveys. 

As President Mohamed Farmaajo’s government hurriedly works to push a new petroleum law through parliament and create a Somali Petroleum Agency from scratch, observers and opposition figures argue that Somalia does not have the institutional and regulatory capacity to handle large oil deals.

In this context, making a deal with the Somali government looks all too risky for many in the private sector. 

Hakim Abdi, postdoctoral researcher at Lund University, believes any contracts the government signs will be vulnerable to corruption.

“I am afraid that the government will siphon off the money and leave nothing for the development of the country and the enhancement of its citizens,” he says. 

Any funds accrued from oil development may also serve to further destabilise the already shaky relationships between Mogadishu and its regional detractors, he adds.

“There is already wrangling over authority, and who controls where; imagine what will happen if there is oil money involved,” he comments.  

The dispute with Kenya adds to fears that oil will threaten regional stability as the Horn witnesses the souring of a relationship which is key to keeping al-Shabaab at bay.

The withdrawal of the Kenyan Defence Forces from a military base in Somalia, although not directly linked to the oil discord, speaks of strained relations between Nairobi and Mogadishu that could do without the complications of resource tussling.

As it stands, Somalia is hoping that the ICJ will award it the blocks, whereas Kenya would prefer a bilateral settlement that would involve some form of compromise. 

Silas Olan’g, Africa co-director at the National Resource Governance Institute, an independent think tank, believes that if the court sides with Somalia, it may cause a domino effect to ripple down the Indian Ocean as other nations seek to redefine their maritime borders for strategic interest. 

Comoros promise

Most of the large oil and gas finds thus far have hugged east Africa’s coastline, meaning that maritime borders – extending 200 miles (321km) according to the United Nations Law of the Sea – are extremely important in ownership disputes. 

Outside this limit, the Indian Ocean gives way to a number of tiny African island nations that have been at the centre of much speculation and exploration since the gas bonanza in Mozambique. 

Sitting just 300km opposite Mozambique’s Cabo Delgado region and its lucrative gas fields, the Comoro Islands are perhaps the next in line for a major discovery.

According to initial data from London-based exploration firm Discover Exploration, the archipelago – with a population of just 850,000 – could be sitting on as much as 7bn barrels of oil and 1.1 tcf of associated gas. 

To put this into perspective, the US has 36.5bn barrels worth of oil according to 2017 data from the CIA World Factbook – only around five times more than the Comoros.

However, proven reserves and estimated resources are two very different things, meaning interest in three offshore blocks by Discover Exploration, which is leading the Comoros push, is a speculative undertaking. 

“It’s a very undeveloped part of the world despite the fact that it’s very close to big discoveries in Mozambique,” says COO Alexander Mollinger.

“It is very risky and we as the contractors take all the financial risk; but we see that there is huge potential.”

British firm Tullow Oil, with a relatively large footprint across Africa, has partnered with Discover Exploration to conduct a 3D seismic survey of the area in the third quarter of 2019, depending on government approval. 

The public sector, in fact, has been relatively quick to act, with Mollinger describing how the government managed to create a petroleum bill and push it through the Comoros assembly in just six months after Discover Exploration first made contact in 2012.

At the same time, political instability surrounding an election in which President Azali Assoumani controversially claimed over 60% of the vote – despite opposition claims of fraud and observer reports of irregularities – have threatened to spark unrest in the coming months. 

Analysis from the African Energy consultancy group states that while private sector interest from UAE, Chinese, French and Italian energy entities has spiked in the past few years “all bets are off should political instability descend into a full-blown crisis”.

Operating in a volatile environment, and with no guarantee of making a discovery, Mollinger explains how companies such as his account for risk by spreading it over a large portfolio of similar assets.

Discover Exploration, for instance, has similar projects in Gabon and New Zealand along with a low-return low-risk project in the North Sea.

If one asset strikes black gold, the operational costs of the rest are covered as production begins to generate income. 

The Comoro Islands and the surrounding region, however, are perhaps the most compelling area due to their strategic positioning in relation to neighbouring markets. 

“It’s a direct line to the energy-hungry Asian markets,” he says. “It’s literally a straight line and you don’t have to pass through major conflict areas which exist around the Suez Canal.” 

Prospects in Seychelles

Elsewhere in the Indian Ocean, the Seychelles is one of Africa’s most remote island nations – located around 1,800 km east of the Kenyan port of Mombasa.

Although the subject of less industry speculation, the tectonic history of the 115 islands making up the archipelago presents a strong case for the future of oil and gas finds, says Patrick Samson, exploration manager at national oil company Petro Seychelles. 

Currently the government has four wells and is still in the early phases after creating what Samson calls the most attractive “benchmark” petroleum legislation for the region in 2013. 

Sub-Sahara Resources, an Australian firm, has recently moved into the area and is looking to get lucky after the Japanese National Oil Company left last year. Indeed, Samson points out how the government is experiencing heightened interest and numerous survey requests since the Indian Ocean region has come into the fore.

Further south, the Seychelles government is partnering with Mauritius to explore areas located outside the maritime boundaries of both nations, with the dividends of any discovery to be shared equally among both parties. 

This partnership stands in direct contrast to the dispute between Kenya and Somalia, and the collaboration – through the combining of funds and the sharing of best practice in terms of governance and legislation – will help unlock any potential in the region. 

As Aly-Khan Satchu, CEO of Nairobi-based investment advisory firm Rich Management, says:

“The East African seaboard is the l ast great energy prize going.”

 Written by Tom Collins

Opportunities and Challenges in the Oil and Gas Sector, a glimpse from The Petroleum Authority of Uganda

The Petroleum Authority of Uganda (PAU) is one of the three institutions of government responsible for stewarding the oil and gas sector in the country. The other two institutions are: the Ministry of Energy and Mineral Development (MEMD) which is in charge of policy as well as licensing companies in the sector; and, the Uganda National Oil Company (UNOC) which takes care of the commercial interests of government in the oil and gas sector. Specifically, the PAU’s role is to ensure that the activities of the oil and gas sector in the country are undertaken as per Uganda’s laws and in line with international best-practice, to create lasting value for all Ugandans and position Uganda as a good investment destination. Taking this delicate and important role is Dr Jane Nambakire Mulemwa, the PAU’s maiden Board Chairperson. First appointed in October 2015, Dr Mulemwa’s mandate was on 15th May 2020, renewed for a second term. In this interview with CEO East Africa’s Muhereza Kyamutetera, she gives an account of the last 5 years of the Board and the journey ahead, as the country prepares 

Ms. Jane Nambakire Mulemwa, Ph.D, has been the PAU’s Board Chairperson, since October 2015. On 15th May 2020, her 4-year mandate was renewed by His Excellency Yoweri Kaguta Museveni.

Q & A Session

Congratulations upon being reappointed by His Excellency for a second term. From a Board perspective, how would you summarize the PAU’s journey in its first five years?  I must say that I am privileged to be reappointed for a second term, after chairing the founding Board of this Authority four years ago. I and my team have been privileged to have the opportunity to lead, what I can say, is Uganda’s very first petroleum regulatory agency.  As such, we are proud to be part of our country’s history and we do pledge to do everything within our ability to ensure this oil resource is a blessing to our motherland. The Petroleum Authority of Uganda is one of the three government institutions that were given the huge responsibility of managing the oil and gas resources in the country. As the Petroleum Authority of Uganda, we have the mandate to monitor and regulate all petroleum activities in the sector inclusive of the refinery, the transportation and storage of the oil and gas resources etc.  The PAU itself was born out of a recommendation of the National Oil and Gas Policy (NOGP) of 2008 that led to the creation of the Petroleum Exploration, Development and Production Act of 2013, which is our enabling legislation.  Actual operationalization of the Authority, however, didn’t kick off until October 2015 when His Excellency the President of the Republic of Uganda appointed the first and founding Board of the Authority, which makes PAU five years old this October.   Upon inauguration, we hit the ground running because, on top of setting up the institution we also had to carry out the Authority’s mandate since there were already existing players in the sector that needed to be regulated. So, for the first year, three members of the Board inclusive of myself worked almost on a full-time basis, contributing to the development of regulation as well as the implementation of the existing laws. We also worked on the recruitment of the staff of the Authority, starting with Mr Ernest Rubondo as the first Executive Director of the Authority, who started work on the first of September 2016- nearly a year after the Board was inaugurated. From then, we handed over to him to continue the recruitment of more staff, beginning with the top management as well as carry out other day-to-day functions.

The PAU Board shortly after inauguration by the Minister of Energy and Mineral Development Dr. Gorreti Kitutu at Amber House on 15th May 2020. COURTESY PHOTOWe then had to develop a brand identity for the Authority, then the vision, mission, core values and guiding principles, followed by the development of our first 3-year strategic plan. The first plan was three years and was largely focused around institutional development as we waited for full staffing of the Authority- most staff would join 2-3 years later.

Having developed the brand of the Authority and recruited the essential staff, we then focused on the development of regulations to activate the laws in the sector as well as developing our internal manuals to guide the work of the Authority, and ensure that we deliver our mandate effectively with proper guidelines.

Dr Jane Mulemwa walks out Eng. Irene Muloni the then Minister of Energy and Mineral Development at the 1st National Content Conference on 6th February 2019. COURTESY PHOTO

It has been challenging because we have been building the organization while at the same time, we are expected to execute our mandate fully.

You also realize that the Authority was set up at a time Uganda was in the middle of creating regulations to operationalize the Petroleum Exploration, Development and Production Act of 2013. So, you can imagine a kind of transition where both the regulatory framework and the institution to implement the framework are created at the same time! This was also the time, some of the licensed oil and gas companies applied for production licenses, which were eventually granted in 2016 when the PAU was just one year old!  Being a new kid on the block but regulating oil and gas veterans who have been in the business for 50-100 years, such as Tullow Oil, CNOOC and Total, has been remarkably interesting, exciting, and challenging five years.

I want to thank all our stakeholders- His Excellency the President, our mother Ministry and all other supporting government Ministries, Departments and Agencies, staff of the Authority, our licensed players as well as the civil society and the Ugandan public in general who have made these five years worthwhile.

You mention, setting up a solid foundation on which the Authority has run over the last 5 years. What are some of the principles that guide you as a Board in providing oversight to the PAU as a regulator of a multibillion-dollar industry to ensure you achieve excellence?

First and foremost, is having an independent and accountable governance structure, is a well-established principle of administration. We are an independent accounting body, with core values that govern the work of the Authority, and these include professionalism, responsibility to society, integrity, mutual trust, and respect and excellence in execution in whatever we do. Those guiding principles must be observed and we as a Board, therefore, must not only espouse them but also endeavor to practice them ourselves.

Dr. Jane Mulemwa -left with other board members during a field visit. COURTESY PHOTO

Lastly, we want to keep the public and all our stakeholders well informed about the role and responsibility of the PAU, so that they appreciate what we do. We have a balancing act to achieve– while we want to encourage and ensure lasting value to society by promoting the involvement of Ugandans, we at the same time, need to ensure that we create a positive environment, for the investors to also benefit from their investment. We, therefore, need to keep the entire public including the investors very well informed about our work, how we do it and what it is that we expect from everybody. Those are the key guiding principles.

Given all the groundwork that has been laid by yourselves and the other respective government and private sector stakeholders, the next 5 years are going to be full of activity. As the PAU Board, what will you be focusing on in the next 5 years as we enter the development phase? What do you see as the key tasks that the Authority must achieve in the next five years?

We are going to continue building on the work of the founding Board because we are yet to complete, for example, the institutional building. For instance, we are only at 57% of staffing levels, which means we need to recruit more staff to address some of the key areas that are becoming more and more important, in this development and production phase; so institutional building remains our focus.

A survey boat being used for picking lines on the waters. COURTESY PHOTO

We still must carry out our mandate to ensure that we encourage more exploration, to increase the resource base. We must now focus more on the timely development of the flagship Tilenga and Kingfisher Projects, as well as the Refinery and the East African Crude Oil Pipeline projects. These will need very close monitoring to ensure that they are implemented cost-effectively, so that we maximize the profits as a country. Therefore we need to recruit more staff to monitor all these projects more closely. We will for example need to set up more regional offices especially along the route of the pipeline, to bring us closer to the different projects that we monitor as well as set up the data Centre that I mentioned earlier.

What key message would you like to send to Ugandans who aspire to see the oil resources cause transformation to Uganda? 

That is a very important topic to discuss because, at the end of the day, oil and gas is a God-given resource that has the potential to turn around our social-economic welfare as a country. So, the first aspect that I want to emphasize to the public is that there are abundant opportunities for Ugandans and Ugandan companies and it is the mandate of the Authority to ensure that as many Ugandans as possible do participate, to create the lasting value that we are talking about. There is no way we are going to benefit unless we as Ugandans get actively involved in the provision of goods and services to this sector. 

H.E Dr. MWINYI PLEDGES TO EMPOWER ZPDC, ZPRA & INVESTORS

President Mwinyi gave the pledge in his speech to inaugurate the 10th meeting of the House of Representatives at Chukwani.

In regard to the Oil and Gas sector H.E Dr. Mwinyi said his government will empower, both financially and workforce the Zanzibar Petroleum Development Corporation (ZPDC) and Zanzibar Petroleum Regulatory Authority (ZPRA) to implement its duties effectively.

He also said his government will work together with all companies that show interest to invest in the sector.

He said his government has plans to build a big modern port at Mangapwani area that would consist of various sections for service delivery including servicing oil and gas tankers, dry dock for servicing ships and areas for storing containers

ANGOLA READY FOR JOINT RAILWAY PROJECT WITH TANZANIA, STATES ENVOY

The Government of Angola has said it is ready for engagement with Tanzania on planning and implementation of a railway project to link its port of Lobito to Dar es salaam so as to boost trade between the two countries and create jobs for their citizens.

Angola’s ambassador to Tanzania, Sandro De Oliviera, disclosed the plan at the occassion to mark the country’s 45th independence anniversary held in Dar es salaam.

He said currently, the largest part of goods transportation takes place by land, where certain patches are difficult for the users due to the bad roads, especially during the rainy season.

He said the referred railway corridor will connect the important ports of Lobito and Dar es salaam, allowing the transit of goods from and to the markets in America, Asia and Europe that utilise the Atlantic and Indian Oceans, respectively.

“Angola is ready to carry out at least two experimental trips, as soon as the logistical and institutional conditions are created, for which we count on Tanzania’s collaboration in these efforts, he said”

Olivieira hinted that Angolan economy has an enormous potential of underexplored natural resources in the sectors of Agriculture and Livestock, extractive and manufacturing industries, fishing, tourism, energy, water, transport, logistics, civil construction among others

“We want to count on the Tanzania experience and investment in aforementioned sectors which possess great feasibility and strong probabilities of profitable returns, thus supporting the creation of competitive domestic industries, ” he stated.

“We are working towards the creation of Tanzania-Angola business forum, whose first edition should take in Dar es salaam in May next year. It is a priority initiative for us because it will establish a platform for direct interaction of business people from both countries, ” he added.

According to him, the director for Africa at the Ministry of Foreign Affairs and East African Co-operation, Makamba Dahari said that Tanzania is ready to strengthen its diplomatic economy for the mutual benefit of the people in the two countries.

He said the increase of intra-Africa trade was the only viable way to achieve economic independence adding that will help to open more new employment opportunities whether direct or indirect from the investment.

“As embassy, our noble mission is to contribute to the ever-increasing betterment of relation between the two countries and to increment the extremely low levels of trade exchanges, giving way to a greater movement of people and goods among sectors that promote development for social wellbeing of our people, “he insisted

Earlier in his presentation, Nguza Mauricio, the Counselor-Business affairs in Angola said that there was a huge potential, social economic stability and political will. The counselor said there are specific investment opportunities like agriculture, vegetable production and fisheries. Others are textile, hospitality, basic sanitation collection, tourism, production and distribution of electricity, education and reforastation.

“We are looking for external expansion opportunities, new markets for the exports of goods and services. international partnerships and openings to finance profitable projects and or ventures”, he explained.

Factories Clarify Cement Price Increase in Tanzania, a threat to Construction project stakeholders?

Mtwara – DANGOTE Cement in Tanzania has apologized to the government for failure to communicate to the public on the temporary shutdown of their plant for the maintenance process causing countrywide price hikes.

Mtwara Regional Commissioner, Mr Gelesius Byakanwa ordered the management of the plant to immediately publish the actual prices of the cement to their customers to stop further inflation.

“You should publish the actual cement price to your customers to stop further inflation,” he said. He noted that maintenance should not be termed as an emergence case, instead the public must be informed on the matter to address shortage of supply in the market.

The RC made the statement when he paid a visit to Dangote Cement Plant in Mtwara following complaints from the public over lack of cement and price inflation in various areas.

The plant senior officer, Mr Glagu Shuma apologized to the government and the public at large for failure to communicate the situation for the past two weeks.

“I would like to apologize for not communicating the shutdown to the government and the public on time,” he said noting that the management of the plant has already made adequate arrangements to supply the cement to the general public including major contract customers.

“We have made arrangements to supply the cement to all customers and to the general public by Wednesday as the plant reopens for operations,” he said.

Commenting on the shutdown programme of the plant, Mr Shuma said that the maintenance of the plant was set to be conducted in April this year, but failed due to the outbreak of Covid-19.

A survey conducted by this reporter in Mtwara urban found out that a bag of cement was sold at between 18,000/- and 20,000/- in urban areas. The actual price of the cement per bag is 11,000/- according to traders in Mtwara.

Meanwhile, Yves Mataigne, Commercial Director of Twiga Cement Company, said that high demand for cement led traders to hike the commodity’s prices, reports Dativa Minja.

Mataigne said three weeks ago, they met and asked all their distributors not to raise cement prices as the factory has not made any price increment.

He said their production per month is 160,000 tonnes that however, is insufficient to meet the current demand in the construction industry.

Commenting, Nyati Cement’s Assistant Sales and Marketing Manager, Mr Michael Prosper, said they have not raised the price of cement, but quickly blamed the business community for unnecessarily raising the prices.

UNITED NATIONS CALL FOR BUSINESSES IN PROTECTING THE ENVIRONMENT

Businesses worldwide to align in protecting biodiversity 

Business Consultation on the UN CBD Post-2020 Global Biodiversity Framework. Business for Nature is a global coalition bringing together influential organizations and forward-thinking businesses. Together, we demonstrate business action and amplify a powerful business voice calling for governments to reverse nature loss. The coalition brings together over 50 partner organizations, including the World Economic Forum, World Business Council for Sustainable Development, the International Chamber of Commerce, WWF, IUCN, and many more international, national and sectoral organizations. We’re inviting businesses and organizations of all sizes, sectors, and geographies to share their views so that together we can ensure an ambitious Framework to reverse nature loss in this decade.

Taking action means doing something with meaningful benefits for the natural world. It’s the right thing to do and makes economic and financial sense. For example you could:

  • Reduce your company’s negative impact on nature;
  • Invest in protecting and restoring nature;
  • Innovate and scale up products and technologies with a lower impact
  • Businesses can take action through specific projects, across their company, through their supply chains or they can act collaboratively within their sector. They can tackle different drivers of nature loss, on land or at sea. Importantly, actions are happening right now.

Businesses need long-term certainty to invest in changing business models. Concrete evidence-based targets informed by science are needed to provide clear direction and ambition for business action to reverse nature loss by 2030. These targets should be relevant and translatable from the global to the local level.

Policy action is required to:

  • Publicly recognize the planetary emergency and commit to both reversing nature loss by 2030 and keeping global warming below 1.5 degree Celsius.
  • Adopt global targets and indicators informed by science to reverse the loss of nature and provide direction for business actions, including to a) significantly reduce production and consumption footprints; b) halt and reverse the loss of habitat and species and restore their resilience; c) conserve ecosystem services and; d) protect natural areas appropriately respecting the rights, practices and wishes of indigenous peoples and local communities.
  • Adopt strong implementation and ratchet mechanisms informed by science to increase action and ambition in the Post-2020 Global Biodiversity Framework of the Convention on Biological Diversity (CBD).

Climate change, nature loss and social inequality need to be solved together to achieve a just transition. Policy coherence and efficient implementation and enforcement at global, national and local levels is needed to create a level playing field that supports business action.

Policy action is required to: Bring the UN Framework Convention on Climate Change (UNFCCC), the Convention on Biological Diversity (CBD) and the UN Convention to Combat Desertification (UNCCD) into alignment ahead of Rio +30 in coherence with the Sustainable Development Goals (SDGs) and the 2030 Agenda for Sustainable Development.

Pursue an integrated approach to Nationally Determined Contributions (NDCs), National Biodiversity Strategies and Action Plans (NBSAPs) and National Action Programs (NAPs) to combat desertification that recognizes the synergies, co-benefits and trade-offs to enable a just transition.

Mainstream nature into all relevant policies, ministries and finance regulators’ mandates, addressing the major direct threats to nature identified by the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) (i.e. land/sea use change, direct exploitation of organisms, climate change, pollution, over-exploitation, invasive species, etc.), and stimulating investment and job creation.

Ensure the adoption and effective enforcement of environmental laws and standards, including by providing capacity building to countries worldwide

Climate change, nature loss and social inequality need to be solved together to achieve a just transition. Policy coherence and efficient implementation and enforcement at global, national and local levels is needed to create a level playing field that supports business action.

Policy action is required to:

  • Bring the UN Framework Convention on Climate Change (UNFCCC), the Convention on Biological Diversity (CBD) and the UN Convention to Combat Desertification (UNCCD) into alignment ahead of Rio +30 in coherence with the Sustainable Development Goals (SDGs) and the 2030 Agenda for Sustainable Development.
  • Pursue an integrated approach to Nationally Determined Contributions (NDCs), National Biodiversity Strategies and Action Plans (NBSAPs) and National Action Programs (NAPs) to combat desertification that recognizes the synergies, co-benefits and trade-offs to enable a just transition.
  • Mainstream nature into all relevant policies, ministries and finance regulators’ mandates, addressing the major direct threats to nature identified by the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) (i.e. land/sea use change, direct exploitation of organisms, climate change, pollution, over-exploitation, invasive species, etc.), and stimulating investment and job creation.
  • Ensure the adoption and effective enforcement of environmental laws and standards, including by providing capacity building to countries worldwide

EAST AFRICAN BUSINESS COUNCIL CALLS TO ALLOW FREE MOVEMENT OF PERSONS ALONG THE EAC BORDER POSTS.

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The East African Business Council (EABC) is calling upon East African Community Partner States to allow movement of persons across border posts, lifting the restrictions currently in place. A move set to boost trade-in services such as tourism and re-open closed cross-border markets.

Currently, some border posts such as the Taveta- Holili One Stop Border Post (OSBP) and the Isebania – Sirare border post (Kenya – Tanzania) are still not allowing movement of persons despite travelers having Covid-19 certificates. 

In a meeting with the Taveta-Holili Joint Border Management Committee (BMC), EABC CEO, Dr. Peter Mutuku Mathuki noted that only truck drivers and emergency cases for persons are allowed to proceed; encouraging illicit trade through porous borders. 

While visiting the Lunga Lunga- Horohoro border post, (Kenya-Tanzania) Dr Mathuki noted that movement of persons had declined sharply. As at December 2019, 27,960 persons were recorded to have used the border. By April 2020, the number of persons using the border dropped to 1,620 and in June 2020, the number dropped further to 919 persons. Pre-Covid-19, around 100-150 trucks were cleared through the same border post each day. The number has now dropped to an average of 3050 trucks per day. The Taveta- Holili One Stop Border Post (OSBP) cleared about 200 trucks per day pre-Covid, a number that has now dropped to around 40 trucks per day.

“There is urgent need for the re-opening of border posts which are currently not allowing movement of persons. This will also see resumption of the existing Ujirani Mwema markets situated in both Kenya and Tanzania and in turn reboot crossborder trade,” said Dr Mathuki.

Kenyan imports from Tanzania, (March 2019 to August 2019) stood at Ksh 16.35 Billion while in March 2020 to August 2020,it stood at Ksh 11.13 Billion, a decrease of Ksh 5.2 Billion. Kenyan exports to Tanzania (March 2019 to August 2019) totalled Ksh 16.49 Billion shillings while in March 2020 to August 2020, exports stood at Ksh 14.68 Billion, a decline of Ksh. 1.8 Billion.

According to EABC survey report ‘Impact of Covid- 19 on Business and Investments in the EAC and Proposed Recovery Measures for the EAC Economies,’ 56% of businesses have been affected by cross border restrictions since the pandemic hit the EAC bloc.

EABC noted that instances of relay truck driving caused by delays in getting Covid19 tests results, are increasing cost of doing business.

Dr Mathuki also urged Kenya and Tanzania to fast-track the operationalization of the One Stop Border Post at Lunga Lunga – Horohoro border. “The OSBP will expedite the turnaround time of clearance of cargo and persons,” Dr. Mathuki said.

Kenyan key imports from Tanzania using the borders include timber, cereals and edible vegetables while Tanzanian imports from Kenya include soap, machinery and mechanical appliances, iron and steel and pharmaceutical products.

EABC also reiterated its position on the need for EAC Partner States to put an end to testing of Covid-19 at border points, to avoid delays in truck & cargo clearance.