Latest news with #MatiaKasaija
Zawya
27-06-2025
- Business
- Zawya
Uganda: The end of the runway? Kabalega airport fabled finish line
Uganda's Kabalega International Airport (KIA) has featured in several budget and State of the Nation addresses, but it has remained at 95 percent completion, and the government now says that the facility will begin operations within the next financial year. While presenting the budget for the 2025/26 financial year, Finance Minister Matia Kasaija reported that the 'operationalisation of Kabalega International Airport' is one of the 'priority interventions' but did not provide more details. Mr Kasaija echoed President Yoweri Museveni's statement during the State of the Nation Address on June 5 that the airport is near completion, as part of the requisite infrastructure that the Ugandan government has invested in to support commercial oil production. But the project has been stuck 'at 95 percent completion' for over two years, lacking an air traffic control tower and other infrastructure, partly due to modifications in the design for a mobile air traffic control tower, which was dropped midway. The switch to a fixed tower required a redesign of this aspect, which sent the project contractor back to the drawing board, causing delays, according to Amos Muriisa, the contractor's spokesperson. In the next financial year, the government has allocated Ush6.92 trillion ($1.91 billion) for integrated transport infrastructure, namely roads, bridges, railways, water transport, and air transport, to undertake interventions that include completion of the airport. Two years ago, the contractor, SBC Uganda Ltd, a joint venture of Israeli-British firms, Shikun and Binui International-SBI, and Colas Ltd, sought to avoid delays and proposed handing over the project to the government, with a plan for the airport's air traffic control to be handled by Entebbe International Airport. Construction of Uganda's second international airport began in April 2018 and was expected to be completed in 48 months as part of the support infrastructure for oil and gas in the Lake Albert region. Its completion was planned to coincide with the surge in oil and gas logistics, as oil companies were preparing to ship in heavy equipment ahead of launching field development works at the upstream oil and gas projects Tilenga and Kingfisher, as well as midstream operations of the East African Crude Oil Pipeline (Eacop). But, as the airport fell behind the timelines, the oil majors shipped all equipment, including four drilling rigs and pipes, by road from Mombasa to the drilling sites in the Albertine Graben. China National Offshore Oil Corporation launched well spudding at its Kingfisher oilfield on January 24, 2023, while TotalEnergies began drilling six months later at two of the three drilling sites of the Tilenga project. Funded to the tune of €264 million ($309 million) through loans from the UK Export Finance and Standard Chartered Bank, officials also blame the airport's slow progress on funding shortfalls, as the government delayed disbursing additional funds for the project. Mr Muriisa said that Covid-19 restrictions disrupted the pace of construction, as the contractor was compelled to halve the workforce, per Ministry of Health directives. The airport was intended to support Uganda's oil and gas upstream and midstream operations by facilitating the transportation of heavy equipment to the oil-rich Lake Albert region, but it is now far behind the oilfield developments it was expected to service. Industry executives argue that Kabalega remains a critical project for the sector. The airport has a 3.5km runway, 45-metre shoulders, a cargo terminal, and an apron that can hold four large Antonov-sized aircraft simultaneously, but the critical air traffic control tower remains the missing link. Other infrastructure to support commercial oil production includes 700 kilometres of tarmac roads that have been constructed in the Albertine region, and the export pipeline, currently at 58 percent. © Copyright 2022 Nation Media Group. All Rights Reserved. Provided by SyndiGate Media Inc. (
Zawya
23-06-2025
- Business
- Zawya
Uganda SGR plan on track as Kenya pursues China bond
The Ugandan government has earmarked Ush2.17 trillion ($560.2 million) in the next financial year for construction of the standard gauge railway, signalling that the long-awaited works on the Malaba-Kampala line are about to start. This financing comes from the Islamic Development Bank (IsDB), with the government providing Ush79.03 billion ($21.9 million). With a 19.4 percent the financing of the Malaba-Kampala stretch secured, construction is set to begin after a decade of waiting, on one of the Northern Corridor Integration Projects (NCIP), which aims to enhance regional trade and connectivity.'In November 2024, President Yoweri Museveni launched construction of the 272-kilometre standard gauge railway (SGR) from Malaba to Kampala. The SGR is a strategic investment for our country. It will cut cargo transport cost by half from the current 120 per tonne and reduce transit time from Mombasa to Kampala from seven days to one day, turning Uganda into a land-linked country as opposed to being landlocked,' said Finance minister Matia Kasaija in his budget speech on June 12. Uganda's SGR has faced delays largely due to funding headaches, after many potential financiers withdrew from bankrolling the project, until Kampala recently negotiated for $800 million in funding from the IsDB. The financing agreement was reached on May 20, 2025, during the IsDB's 50th Annual Meetings in Algiers, the three-year agreement forming part of Uganda's Country Engagement Framework (CEF) for 2025–2027. Construction players say an NTP is a formal authorisation issued by a project owner, giving a contractor the green light to begin work on a project. The NTP is a critical milestone, ensuring that all necessary contractual, financial, and regulatory requirements are in place before any site activities kick off. The NTP's current funding helps the start of civil works as the remaining parties seek to conclude the syndicated loan deal with multiple lenders, including UK Export Finance, Turkish Exim Bank, and China Exim Bank. The total land acquisition estimate from Malaba to Kampala currently stands at Ush620.87 billion ($172 million) covering about l35 kilometres out of the 232 kilometres mainline right of way, which is about 58 percent. Land compensation has been done from Malaba to Buikwe, and will be continued to Kampala depending on availability of funds. Meanwhile Kenya is looking to raise Ksh358 billion ($2.77 billion) from the Chinese money markets to put on track its standard gauge railway from Naivasha to Malaba as Uganda announced its readiness to start construction on the other side of the border towards the capital Kampala. Kenyan Treasury has been in China to fine-tune details on Nairobi's maiden Panda bond and government sources privy to the deal told The EastAfrican that issuance was being fast-tracked to float the bond in Shanghai before the end of this year. A Panda bond is a sovereign facility issued in the Chinese domestic market and denominated in Yuan Renminbi targeting Chinese investors and institutions.'The bond is Ksh358 billion ($2.77 billion) and there is a mission there in China which are working on the details of that Panda bond. There are currently two officers from the Treasury in China working on that bond,' the source said.'We are still coming up with structures around it (Panda bond) but we have agreed the project (SGR) is going to be funded by the Chinese. In principle, we have agreed but it is still at the conceptual level but I believe it is going to be done before the end of this year. Give it another two to three weeks then we will know how the funding will be done.'China was the key financier of the first two SGR phases—from Mombasa to Nairobi, and then from Nairobi to Naivasha dry port—through loans from the China Export-Import (Exim) Bank. Beijing, however, pulled out of the Malaba extension after Naivasha, citing concerns over its commercial viability and Kenya's rising debt, which raised the risk of loan default—including on Chinese credit. After years of seeking alternative financing, Kenya recently returned to Beijing for funding and last week Prime Cabinet Secretary and Foreign and Diaspora Affairs secretary Musalia Mudavadi said Nairobi was banking on Chinese support to ensure the Panda bond is floated at the start of the next fiscal year.'Panda bond discussions have started and Kenya looks forward to the support of China,' he said after meeting with Chinese counterpart Wang Yi in Changsha, the capital of Hunan province in Southern China. Mudavadi was in China to attend the Ministerial meeting of Coordinators on the Implementation Follow-up Actions of the Forum on China-Africa Cooperation. If successful Kenya would become the second African country, after Egypt, to access the Chinese capital markets through a Panda bond. Cairo raised $480 million via such an instrument in October 2023, which was priced at 3.5 percent for a three-year period. But Nairobi has since expressed difficulty in raising its share and requested additional Chinese support. During President William Ruto's state visit to Beijing in April, the two countries signed a deal to jointly finance the 475-kilometre rail from Naivasha to Malaba, where it is expected to link with Uganda's own SGR extending to Kampala. Lack of a rail link between Kenya and Uganda has meant that most cargo from the Mombasa port is transported by road to Uganda, Rwanda, Burundi, South Sudan and DRC. This overreliance on roads increases both time and cost. But financing constraints in both Kenya and Uganda have long delayed efforts to complete the Naivasha-Kampala railway connection, pushing both governments to court new financiers for their respective sections. With concessional funding drying up—following the expiry of an international programme in March—bonds issued in China, Japan, or the United Arab Emirates (UAE) appear more attractive, especially as Eurobond yields remain high. © Copyright 2022 Nation Media Group. All Rights Reserved. Provided by SyndiGate Media Inc. (
Zawya
17-06-2025
- Business
- Zawya
Uganda overhauls tax laws to finance $20bln budget
Uganda is betting on the overhauled tax laws to plug revenue leaks and boost domestic revenue collections, which have historically remained low. While reading Uganda's $20.1 billion budget for the financial year 2025/2026, Finance Minister Matia Kasaija announced high revenue targets for the tax body to finance 51.5 percent of the budget. Uganda Revenue Authority (URA) has been tasked to raise almost $9.5 billion (Ush34.051 trillion), which is 47 percent of the total budget requirements. From fees and local government collections, URA is expected to collect $903.1 million (Ush3.246 trillion), representing 4.4 per cent of the total requirement. To facilitate the taxman, MPs amended the Income Tax, VAT, Excise Duty, Tax Procedure Code, the Stamp Duty, and the External Trade Bills to facilitate the generation of an additional $675.8 million. Mr Kasaija also introduced a 'small fee of one percent of the customs value' on taxable items under the common external tariff. The measure seeks to align Uganda's tax policy with those of other East African Community partner states, where similar fees have been imposed. Currently, imported goods that attract no import duty are not subject to infrastructure levy, tax experts at PwC explained, meaning that the proposed amendment is likely to increase the cost of importation of certain goods, since it is based on the customs value of such goods and not on the applicable import duty rate per se. Uganda also has a $10 per tonne of wheat bran, cotton cake, and maize bran tax levy to discourage the export of the raw materials needed to sustain the livestock feed industry from competition. This levy will be payable by the consignor to the URA at the time when the wheat bran, cotton cake, or maize bran is consigned out of Uganda. Tax experts at PwC said Uganda has not been levying such an export tax and the proposed export levy is aimed at encouraging domestic production of animal feed and reducing foreign exchange expenditure on imported animal feed. Read: Uganda plans corporate bonds to raise new capital for State firmsUganda has introduced an anti-avoidance rule for VAT importers to rope in importers who have been avoiding shipping goods valued at Ush150 million ($41,661). According to tax experts, it was common for traders to import goods under separate consignments, which, if aggregated, would qualify the importer to be registered under the VAT Act.'These fragmented consignments are commonly referred to as groupage cargo or Less than Container Load. The amendment introduces an anti-fragmentation rule for VAT purposes that empowers the Commissioner of the URA to aggregate several consignments which, when combined, would have a turnover that triggers the VAT registration threshold of Ush150 million ($ 41,661),' said Juliet Najjinda, senior tax manager at PwC.'The proposed amendment will allow the commissioner to treat the fragmented consignments as a single transaction for purposes of assessing the VAT threshold.'The amendment is aimed at preventing tax evasion, enhancing VAT compliance, and promoting equity within the VAT tax administration regime. Taxpayers, especially groupage cargo importers, should review their consignments regularly to assess whether they meet the VAT registration threshold of Ush150 million,' the PwC official explained. The shadow finance minister, Ibrahim Ssemujju Nganda, has described the revenue collection targets set by the finance ministry for the taxman as unrealistic. In the budget report presented to Parliament last month, he stated that the URA had met its revenue collection targets from the 2020/21 financial year to the 2022/23 financial year. His colleague, Joel Ssenyonyi, the leader of the opposition in Parliament, named tax leakages as the major concern that the country must address.'This country faces challenges in raising local revenue due to a narrow tax base, weak enforcement, high informality, and low taxpayer compliance. The gold sector is an example where there is limited regulation and smuggling, resulting in little or no revenue from the most lucrative industries,' Mr Ssenyonyi said. For example, the Auditor General's report to Parliament in 2023/24 stated that Uganda lost $19 million in revenue through gold exports valued at $3.014 billion (approximately Ush11 trillion). These exports were made without the necessary permits from the Energy Minister. Tax measures for the 2025/26 fiscal year:Excise duty on cigarettes of Ush65,000 per 1,000 sticksImport declaration fee of one percent of the customs valueExport levy of $10 per metric ton of wheat bran, cotton cake and maize branImport duty on imported fabrics of $2 per kilogram or 35 percentFive percent export levy on hides and skinsGaming and Betting Centralised Payments Gateway systemUse of National Identification Number as a Tax Identification NumberWinnersThree-year income tax holiday for startup businesses established by Ugandans after July 1, 2025. One tax exemption for Bujagali hydropower up to 30th June 2026. Removal of excise duty rate of 30 percent or Ush950 per litre on beer manufactured from barley that is grown and malted in UgandaRemoval of stamp duty of 0.5 percent or Ush15,000 on mortgages and agreementsExemption from capital gains tax on transactionsZero tax rate on aircraft suppliesRemoval of Ush950 per litre on beer locally produced from barley in Uganda © Copyright 2022 Nation Media Group. All Rights Reserved. Provided by SyndiGate Media Inc. (
Fibre2Fashion
15-06-2025
- Business
- Fibre2Fashion
Uganda reduces import duty on fabrics, garments
Uganda recently announced major tax relief measures for start-up businesses along with reducing import duty on fabrics and garments. The announcements came in the budget presentation for fiscal 2025-26 by finance minister Matia Kasaija. Uganda recently announced major tax relief measures for start-up businesses along with reducing import duty on fabrics and garments. Starting July 1, the import duty on fabrics will drop to $2 per kg, or by 35 per cent, whichever is higher, down from the previous $3 per kg. In addition, the duty on imported garments will decrease to $2.5 per kg, or by 35 per cent, down from $3.5 per kg. Starting July 1, the import duty on fabrics will drop to $2 per kg, or by 35 per cent, whichever is higher, down from the previous $3 per kg. In addition, the duty on imported garments will decrease to $2.5 per kg, or by 35 per cent, down from $3.5 per kg. The measures are expected to help traders engaged in value addition and stimulate further growth in the textile sector, according to domestic media reports. The government said these tax cuts and incentives are part of a broader strategy to stimulate the economy, create jobs and enhance the country's position as an attractive destination for investment. These are aimed at fostering innovation, supporting local industries, and stimulating the country's economic growth. A three-year income tax holiday for businesses established by Ugandan citizens will be implemented from July 1. The initiative is designed to ease the burden of high initial investment costs that often hinder the growth of start-ups. This tax incentive, Kasaija said, will foster innovation, support the formalisation of small and medium enterprises, and improve business survival rates. Fibre2Fashion News Desk (DS)
Zawya
13-06-2025
- Business
- Zawya
Uganda: Museveni preaches benefits of East African Federation, criticises corrupt politicians
President Yoweri Museveni has emphasised the benefits of the East African Federation, saying that it will lead to economic prosperity and heightened security in the region. President Museveni, who was speaking after the budget presentation by the Minister of Finance, Matia Kasaija, held in Kololo on Thursday, 12 June 2025, rallied lawmakers to appreciate the importance of the federation. 'Economic and political integration are the correct answer to the question of economic prosperity and security,' said Museveni. Making reference to the history of the EAC started in 1967 and collapsed a decade later, Museveni said that the community was re-launched in 1999 in the spirit of patriotism and pan Africanism, following the realisation of the need for market for goods and services in the region. 'We are glad by 1980, African leaders had started seeing the importance of market integration as part of the Lagos plan of action,' he said. Tracing back to the history of other African countries and Uganda's experience after independence, Museveni said that it was discovered that the internal market for goods and services was not enough. 'As we speak today, Uganda has got surplus of milk, maize, bananas, cement, etc. Where do we sell all these,' he said, adding that East African and African countries are now buying some of the surpluses. 'Otherwise, these sectors of the economy would have collapsed by now. That is how the National Resistance Movement developed the second principle of Pan Africanism because we need it for our prosperity,' he said. The ready market for goods and services, according to Museveni leads to prosperity of African countries, thereby reducing dependence on foreign aid. 'The East African Community has now expanded to incorporate Rwanda, Burundi, South Sudan, DRC and Somalia. In addition, we have COMESA and the Continental Free Trade Area. We need to remove all the trade barriers and develop infrastructure to facilitate this trade,' Museveni added. He also spoke against trade imbalances, stressing the need to assist countries that are joining the federation. 'We do not want a common market where some countries benefit and others lose, no, it is very dangerous,' Museveni said. Museveni also spoke tough against politicians giving handouts to voters for political support, saying that such leaders are enabling corruption. 'Politics is about principles and policies. That is what you should be telling the public to choose from,' he said. He advised voters against electing leaders based on handouts, saying that they need leaders who will instead help in the fight against corruption. 'Do not accept petty money from politicians and throw away your power to elect politicians who will help to fight corruption,' said Museveni. Local Government District officers were not spared, and the President vowed to take action against those found culpable of mismanaging the Shs1.3 billion meant for road maintenance. He said that he discovered that some districts were instead using the funds to construct new roads. 'In the case of Bunyangabo district, they were mixing up issues. The Shs1.3 billion is for maintenance, not for constructing new roads. I will check and if I find out, there will be casualties among local government officials,' he said. Digital number plates targeting criminals President Museveni also dismissed claims that the new digital vehicle number plates are meant for collecting fines, but rather aimed at enhancing security, saying that they are traceable through the central command centre. 'Every vehicle must have a digital number plate. It is about security. Criminals are acting with impunity,' he said. Referring to the case in which a 45-year-old Godfrey Wanyengera, a resident of Mukono was killed in a road accident, Museveni said that such criminal activities can be countered with the digital number plates. Distributed by APO Group on behalf of Parliament of the Republic of Uganda.
