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MPs Task Government To Terminate Hared Petroleum Limited Contract For Failing To Manage Fuel Reserves

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Hared Petroleum fuel depot in Jinja

Members of Parliament (MPs) have tasked Government to terminate Hared Petroleum Limited contract for the management of fuel reserves. The MPs accuse the company of failing to manage the reserves as per the contract.

The details of Parliament’s recommendations are contained in the report by the Public Accounts Committee following audits conducted by the Auditor General for the FY2014/2015 Ministry of Energy and Minerals that was presented to Parliament by Angeline Osegge, the Committee Chairperson.

The PAC Chairperson said, “Hared Petroleum Limited contract should be terminated henceforth for failing to deliver as per the contract terms, government should repossess the management and operation of the facility.”

It should be recalled that in 2012, the Government and Hared Petroleum Limited entered into a concessional agreement to refurbish, restock maintain and manage the petroleum strategic reserve facility at Jinja.

According to the agreement, the operator was required to manage the facility for a period of 10 years, with Hared Petroleum committing to build the government reserves within 6 months from the signature date.

However, an investigation by the auditors exposed the loopholes within the contract, revealing that despite the Concession agreement requiring Hared Petroleum to ensure that 40% approximately (12 million litres) of the storage capacity of the products is available at all times as a strategic reserve which is released whenever there is a national petroleum supply shortfall, this isn’t the case.

In his report to Parliament, John Muwanga, noted that at the time of inspection in September 2O15, there was only 274,000 litres of petrol and 331,000 litres of diesel in stock, an indication that the tanks had never had the 40% strategic reserves at any one time.

“From the above analysis it is evident that stock build up is not being achieved and consequently the national petroleum reserves are not serving the purpose for which they were established,” the audit report read in part.

However, when the Energy Ministry was tasked to explain why the Contractor had never fulfilled this obligation, the officials argued that Hared Petroleum’s ability had been constrained by unforeseen increased level of investment in the refurbishment that doubled and the challenges associated with the supply route of Mombasa management is also pursuing the option of capitalising the strategic reserve.

Additionally, PAC also expressed concerns over the big disparity between the amount of petrol and diesel in stock saying that it is an indication that Hared Petroleum had failed to fulfill the contractual obligation.

 

By Stella Mugoya

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We Have Collected An Increase Of 13.6% In Taxes This Year Because Of Social Media And Mobile Money Tax – URA Boss Doris Akol

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URA boss Doris Akol

The Commissioner general of Uganda Revenue Authority (URA) Doris Akol has told the media today that the decision by government to levy mobile money and social media tax is slowly reaping benefits.

While addressing the media at the URA offices at Nakawa about the upcoming Tax Payers Appreciation week scheduled to take place from September 26th up to 28th at Kololo independent grounds, Akol said that social media and mobile money taxes have brought in an increase of 13.6% of taxes collected by URA this year compared to the previous years ever since the policy was implemented. Akol said that at first, many Ugandans who were not paying OTT when the tax had just been introduced are now paying.

Akol added that from the month of July, they have managed to collect 4.7 billion shillings from OTT alone and 22.3 billion shillings from mobile money tax making a total of 27 billion shillings which shows that Ugandans have realised the importance of paying taxes.

She noted that during the Tax Payers Appreciation week, they will acknowledge all the tax payers in the country as a way of thanking them for their compliance.

“I appreciate how Ugandans have been paying their taxes this year compared to the previous years, we have made an improvement as much as collections are concerned. The three days we are spending at Kololo will bring a big difference in the works done by the different ministries in the country and more than one hundred ministries will showcase,” Akol said.

However, Akol criticized the media for always focusing on the bad things that ministries do instead of telling Ugandans about the good things. She urged the media to also focus on the good things that the different ministries are doing.

Among the activities for this year’s tax payers appreciation week include: Country wide corporate social responsibility activity on 21st spear headed by NFA, free legal services, free financial and tax advisory services from URA, verification of land titles by Ministry of Lands, free heart check-up from Uganda Heart Institute, dental services, eye care services, free registration of SACCOs by ministry of trade, HIV testing and counselling among others.

 

By Mboowa Nathan and Remmy Atugonza

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Uganda Ranked 3rd Poorest Country In The World (Based On GDP)

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A report from focus-economics.com has ranked Uganda as the 3rd poorest country based on Gross Domestic Product (GDP) in the world.

GDP is one of the primary indicators of a country’s economic performance. It is calculated by either adding up the annual incomes of all working-age citizens or by totaling the value of all final goods and services produced in the country during the year. Per capita GDP is sometimes used as a standard of living indicator, with a higher per capita GDP equating to a higher standard of living.

“GDP per capita is often considered an indicator of the standard of living of a given country, as it reflects the average wealth of each person residing in a country. It is therefore the standard method used to compare how poor or wealthy countries are in relation to each other. With 2018 just under way, we decided to take a look at our forecasts for GDP per capita from 2018 to 2022 for the 127 countries we cover to get an idea of what countries are the poorest currently and which will be making a leap toward becoming wealthier in the coming years. The projections used in this study are Consensus Forecasts based on the individual forecasts of over 900 world renowned investment banks, economic think tanks and professional economic forecasting firms,” the website writes.

About Uganda, the report states, “Uganda finds itself in third place on the list with a 2018 projected GDP per capita of USD 738. Although this represents a large leap from the level of the first two on the list, Uganda is a bit of a strange case. Following the 1986 armed conflict, the ruling political party National Resistance Movement (NRM), enacted a series of structural reforms and investments that led to a period of significant economic growth and poverty reduction all the way up to 2010. In the last five years or so, economic growth has slowed and consequently so has the pace of poverty reduction. There are a variety of factors that have brought on the slowdown, however, it has been attributed mostly to adverse weather, private sector credit constraints, the poor execution of public sector projects and unrest in their neighbor South Sudan, which has flooded the country with refugees fleeing the country and subdued exports. According to the World Bank, if Foreign Direct Investment accelerates, the banking system stabilizes, and budgeted, capital spending is executed without delays, the economy may start to pick up once again, helping to reduce poverty.

Luckily for Uganda, it appears the FDI is indeed improving as it expanded by double digits in 2017, which bodes well for the economy and poverty reduction in the near future. The downside risk to the outlook is the weakness in the financial system, particularly the low level of credit in the private sector and the high cost of small loans. FocusEconomics panelists see growth of 5.4% in 2018 and 5.8% in 2019.” Below is the full list:

 

2018 Rank Country GDP per Cap 2018 (projected) GDP per Cap 2016 (Actual) 2016 Rank GDP per Cap 2022 (projected) 2022 Rank
1 DRC 468.2076 440.9842 2 631.9861 2
2 Mozambique 485.6679 383.1195 1 578.8407 1
3 Uganda 737.8687 694.2869 3 897.6487 3
4 Tajikistan 835.9737 806.0073 6 1085.773 4
5 Haiti 873.9934 705.3676 4 1153.522 5
6 Ethiopia 938.1304 883.8655 7 1253.024 6
7 Yemen 998.4961 761.088 5 1501.568 9
8 Uzbekistan 1025.504 2144.655 22 1646.637 10
9 Tanzania 1112.21 975.859 8 1362.394 7
10 Kyrgyzstan 1221.712 1080.689 9 1446.402 8
11 Myanmar 1432.801 1231.791 10 2134.979 15
12 Zambia 1461.506 1299.422 12 1665.591 11
13 Cambodia 1494.199 1268.826 11 1967.887 12
14 Pakistan 1609.103 1465.591 14 2004.865 13
15 Bangladesh 1618.685 1371.748 13 2374.252 18
16 CDI 1737.16 1517.963 15 2279.192 17
17 Kenya 1761.482 1557.898 17 2092.147 14
18 Ghana 1767.604 1539.536 16 2245.091 16
19 India 2174.133 1742.058 18 3087.243 21
20 Nigeria 2216.672 1975.526 20 2670.87 20
21 Nicaragua 2276.476 2151.236 23 2643.961 19
22 Egypt 2497.835 3689.49 34 3666.88 27
23 Vietnam 2566.532 2109.914 21 3412.303 23
24 Moldova 2616.058 1924.746 19 3511.613 24
25 Ukraine 2638.074 2169.044 24 3576.092 26
26 Laos 2689.059 2400.304 25 3535.01 25
27 Honduras 2834.203 2631.252 26 3157.905 22
28 Philippines 3164.74 2926.438 27 4378.544 31
29 Bolivia 3398.316 3113.914 29 4045.165 30
30 Morocco 3399.481 3011.579 28 3968.448 29
31 Tunisia 3552.575 3719.063 35 3864.81 28
32 Armenia 3941.751 3578.193 31 4908.447 35
33 Mongolia 3980.608 4075.311 41 5940.182 43
34 Algeria 4094.787 3903.194 38 4508.672 32
35 Indonesia 4109.704 3605.222 32 5439.364 39
36 Azerbaijan 4153.154 3507.727 30 5658.588 42
37 Georgia 4198.04 3946.083 39 5993.943 44
38 Sri Lanka 4282.559 3811.488 37 5544.294 40
39 Venezuela 4368.119 4778 48 4925.365 36
40 Iraq 4436.796 4547.616 46 5046.504 37
41 Kosovo 4495.335 3672.294 33 6024.757 45
42 El Salvador 4509.722 4226.656 44 5135.928 38
43 Paraguay 4516.276 3991.964 40 6169.961 46
44 Belize 4651.313 4630.585 47 4799.132 33
45 Guatemala 4703.326 4125.903 42 5548.938 41
46 Angola 4725.743 3721.601 36 4903.343 34
47 Albania 5192.632 4142.339 43 6824.766 50
48 Bosnia 5209.645 4517.359 45 6757.568 48
49 Jamaica 5374.142 4968.894 50 6209.366 47
50 Iran 5727.839 5231.508 52 7048.236 52
51 Jordan 5904.414 5541.111 55 6768.028 49
52 Belarus 5979.214 4914.952 49 7400.126 54
53 Macedonia 6112.687 5212.371 51 8016.382 56
54 Ecuador 6140.741 5966.118 57 6850.166 51
55 South Africa 6342.13 5335.191 53 7127.819 53
56 Colombia 6671.489 5800.91 56 7880.529 55
57 Serbia 6755.329 5446.652 54 9017.78 59
58 Thailand 6965.455 5969.76 58 8322.678 57
59 Peru 7049.746 6178.552 59 8361.598 58
60 Dominican Republic 7334.704 6766.407 60 9159.166 60
61 Turkmenistan 7456.266 6921.015 61 10311.37 62
62 Botswana 8512.711 7297.961 63 9574.504 61
63 Montenegro 8585.437 7022.697 62 10909.39 63
64 Bulgaria 9210.746 7507.744 64 12281.7 66
65 Kazakhstan 9374.124 7852.118 65 11848.74 65
66 Mexico 9706.379 8796.565 68 12668.89 67
67 China 9766.357 8103.066 66 13108.97 68
68 Brazil 10199.39 8720.176 67 11815.55 64
69 Turkey 10941.74 10805.09 73 14012.61 71
70 Costa Rica 10969.64 10666.89 72 13223.71 69
71 Malaysia 11093.39 9427.831 70 14580.94 72
72 Romania 11600.14 9510.628 71 16486.5 74
73 Russia 11664.74 8933.798 69 13570.09 70
74 Lebanon 12385.41 11292.64 74 15060.66 73
75 Croatia 14729.96 12230.22 75 18340.22 77
76 Argentina 14881.05 12507 77 17082.55 75
77 Hungary 15774.98 12822.99 78 20664.73 81
78 Panama 15793.39 14322.74 81 19630.67 79
79 Chile 15796.06 13585.68 79 19124.89 78
80 Poland 15953.16 12412.96 76 21438.44 82
81 Trinidad 16784.46 16091.78 84 20259.31 80
82 Oman 16848.18 16646.1 86 18020.52 76
83 Latvia 17590.22 14032.5 80 23129.31 83
84 Uruguay 18264.38 14942.53 83 23457.4 84
85 Lithuania 18955.37 14942.53 82 25487.88 87
86 Slovakia 19741.33 16549.46 85 25499.87 88
87 Greece 20600.22 17919.14 88 25042.87 86
88 Saudi Arabia 21814.52 20312.95 91 24865.64 85
89 Estonia 22408.15 17793.45 87 29662.79 91
90 Portugal 23472.93 19893.46 90 28456.84 89
91 Czech Republic 24150.93 18552.02 89 31987.27 94
92 Bahrain 25876.4 24305.31 95 29496.51 90
93 Taiwan 25950 22628.72 93 29862.84 92
94 Kuwait 26193.48 26231.85 97 30496.88 93
95 Slovenia 26332.4 21719.96 92 33070.55 96
96 Cyprus 27628.76 23702.83 94 33157.46 97
97 Brunei 27631.4 26958.03 99 32456.92 95
98 Puerto Rico 30785.55 30790.08 101 38609.33 99
99 Malta 31222.64 25368.66 96 39689.85 101
100 Spain 31684.34 26730.29 98 38722.39 100
101 Korea 32116.98 27534.89 100 38501.28 98
102 Italy 34964.68 30790.56 102 40963.66 103
103 UAE 35810.02 35378.11 103 40613.18 102
104 Japan 39326.88 39189.51 107 45250.71 104
105 New Zealand 42296.78 39075.31 106 47555.63 106
106 Israel 42605.59 37092.17 104 47541.27 105
107 United Kingdom 42712.54 40535.31 108 51243.24 107
108 France 43533.1 38236.2 105 51427.33 108
109 Hong Kong 47094.64 43544.18 112 55478.03 110
110 Canada 47584.47 42409.73 111 53768.91 109
111 Belgium 47980.08 41551.59 109 56380.1 111
112 Germany 49082.64 42270.89 110 59385.92 112
113 Finland 50559.41 43557.5 113 60133.76 113
114 Austria 52284.4 44907.32 114 62176.49 114
115 Netherlands 53339.85 45746.92 115 64251.35 115
116 Australia 57432.85 51899.34 117 66695.32 116
117 Singapore 58090.72 55163.19 119 67629.88 117
118 Sweden 58429.58 51480.74 116 73332.43 121
119 Qatar 59074.09 58211.29 121 72813.63 120
120 Denmark 60789.46 53907.48 118 71931.15 119
121 United States 62009.81 57607.78 120 70437.55 118
122 Ireland 77182.55 64907.43 123 93344.89 123
123 Iceland 77314.73 59523.81 122 95788.6 124
124 Norway 79214.45 70875.86 124 101150.4 125
125 Switzerland 82188.71 81245.83 125 90239.11 122
126 Luxembourg 117274.8 102230.9 126 136074.3 126

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Distributor Drags Nile Breweries To Court For Being Repressive And Terminating His Contract In Bad Faith In Favour Of Another Person

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Nile Breweries operations manager Thomas Kamphuis

A distributorship battle has developed among Nile Breweries distributors with the Company top bosses being accused of siding with recent entrants against their longstanding distributors.

This battle has already culminated into a court case after one of the most affected companies, Salvation Distributors Ltd whose contract dates as far back as 2002 sued Nile Breweries over the said mistreatment.

“Prior to receiving the said email, the Managing Director of the Plaintiff (Salvation Distributors) company was approached by two officials from the defendant (Nile Breweries) company who requested him to sell off his business and goodwill to another distributor M/S Keshwala Group of Companies. The plaintiff’s Managing Director out-rightly rejected their request clearly informing them that he had no intention of selling off his business,” reads in part the court documents

Salvation filed at the High Court Commercial Division showing how Nile Breweries crafted the plot to throw him out of business for another distributor Keshwala. Salvation had an agreement with Nile Breweries to be the sole distributor of its products in the areas of Kyengera to Kayabwe and Maddu in Mpigi district.

According to the various documents attachment to the case, Salvation’s profits have been high since 2002. Due to the huge profits, In 2017, Nile Breweries requested Salvation’s Managing Director Gregory Gidagui Mafabi to set up a state-of-the-art Warehouse at Kayabwe.

Gidagui invested Shs2.5bn in the construction of the warehouse and purchase of new trucks, he ensured that the “return to issue (RTI) of the empties” was above 97% by purchasing more than 4000 empty bottles.

Gidagui adds that he was also forced to dispose off a number of properties as well as obtain credit facilities from various banks to raise the necessary funds to comply with the defendant’s new terms and conditions.

“Further to the above investment, Salvation Distributors procured a Distribution Management System (DMS) hardware as directed by Nile Breweries at a cost of Shs11.4m,” he stated. Nile breweries insisted that for better distribution of their product, Salvation Distributors had to change to this system which they sold to Gidagui and promised him that they were going to train his employees on how to use it. Salvation Distributors alleges that they fulfilled all the conditions.

While launching its Shs2.5bn store in 2017, Nile Breweries operations manager Thomas Kamphuis was marveled at the great work and effort made by Gidagui. In a surprise turn of events, Gidagui waited for experts from Nile Breweries to train his staff on how to use the DMS to no avail and indeed, according to court documents, none of his staff has been trained to-date.

As he was still waiting on the experts to come and train his staff, Gidagui started receiving inadequate supplies of Nile Breweries products yet he had stepped up his capital. He wrote to them and Kamphuis promised to work on the issue. To his utter shock and surprise, Nile Breweries instead sent him a letter dated May 28, 2018 informing him that they had received communication from him stating that because of inadequate supplies, they had decided to terminate his contract with them and they had decided to find an alternative distributor for his area.

He wrote back on the same day informing them that he had not and has never developed any interest in terminating his distributorship contract with Nile Breweries. Nile Breweries new manager informed him that he was new on the job, he called for a meeting with Salvation Distributors on July 2, 2018 to discuss his issue. Surprisingly, while he was waiting to meet the Nile Breweries MD, he received a letter from the top management of the company asking him to sell his Goodwill to Keshala which he rejected.

“On July 2, 2018, when MD Gidagui arrived at Nile Breweries offices for the meeting, he was given a notice of termination of distributorship agreement. According to the said notice, the reason for the termination was his failure to use the Distributor Management System,” read in part the court documents. When Gidagui tried to appeal, he was told that the notice of termination was final. Through his lawyers of Muwema, Advocates and Solicitors, Gidagui says Nile Breweries did not act in good faith to have this dispute settled since they were partly to blame for failing to train his staff.

Muwema says that none of the other distributors were given the same conditions to fulfill as his client and worse of all, he is being punished for failing to surrender his business to someone else. Muwema says that none of the current distributors matches Gidagui’s record.

“At the trial, Salvation Distributors shall also aver and contend that the alleged failure to use the DMS is not a ground for termination of distribution agreements; consequently, Salvation seeks damages for breach of contract against the defendant (Nile Breweries). Salvation shall further aver and contend that Nile Breweries’ acts of issuing a notice of termination which was unfounded was high-handed, repressive and done in bad faith for which he seeks exemplary damages,” he states.

The High Court Commercial Division Registrar Festo Nsenga has already issued an Interim Order blocking Nile Breweries from completely terminating Salvation Distributors’ contract.  In his ruling delivered on Monday, Nsenga stated that this interim order should stay in place till September 25, 2018. “It is hereby ordered that: an interim order is hereby issued restraining the respondent (Nile Breweries), its agents and or servants from enforcing the Notice of Termination dated June 26, 2018 and July 16 threatening to terminate the Distributorship Agreement dated October 3, 2002 between the Applicant and the Respondent (Salvation Distributors), for marketing, selling and distributing of the respondent’s products in the areas of Kyengera, Kayabwe, Maddu and Mpigi District, pending the hearing of the main Application (HCM/640/2018) on September 25, 2018,” Nsenga ordered.

He adds that this order is subject to extension where necessary. The order was issued in the absence of lawyers or representatives from Nile Breweries despite having been served with this application and responding to it. Salvation distributors was fully represented by its lawyers Fred Muwema and Charles Nsubuga.

Our efforts to talk to Nile Breweries were futile as our calls went unanswered.

 

By Jamil Lutakome     

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