Following the signing of the Final Investment Decision (FID) deal in Kampala with partners investing $10 billion, Uganda’s oil is finally prepared to come out of the ground.
The procurement of products and services may now begin. There has been a lot invested in this business over the past several years, and I hope that it fulfills its full potential and, unlike many Ugandan projects, gets completed on schedule.
There was also the little matter of Rwanda reopening its border with Uganda, which had been shut for at least three years. Many Ugandan enterprises do business with Rwanda, therefore the reopening of the border benefits both nations and the region. Although I am unsure of the true cause for the closure, it is excellent that individuals may now go from one way to another.
Africa has 1.4 billion people, the same as China, but there are several non-tariff obstacles that make conducting business difficult. A squabble between country leaders has ramifications for the whole area.
Visa and work permit requirements for African Union member nations make a mockery of the organization itself. Many Africans go to other countries outside of Africa where visas are not necessary or the procedure is less demanding than conducting business on the continent. A Ugandan will find it simpler to get a visa to Dubai or Turkey than to South Africa.
As a result of such limitations, Africans withdraw their money from the continent. Flying in Africa is one of the most costly in the world, with taxes accounting for the majority of the ticket price.
Why do African governments make flying from one region of the continent to another so difficult? Is it the belief that flying is just for the wealthy? I get that the amount of persons travelling is minimal, but isn’t it a financial issue? People will be able to travel and do business if we make flying more inexpensive.
Kenya and Uganda sometimes quarrel about whose commodities violate restrictions in another nation. Quality is often cited as a concern, but the debate always revolves about who benefits from these impediments.
There is usually debate about how some of these African nations are landlocked, and how this hampers their economic development. That should not be the situation in nations like Uganda. Mombasa is around 1,000 kilometers from the Ugandan border and approximately 1,400 kilometers from the Kenyan frontier.
That distance is insufficient to render a nation like Uganda landlocked. Investments in infrastructure and reductions in trade obstacles would leave nearly no African nation landlocked or without a market in the hinterland.
Just last month, border procedures at Malaba and Busia caused an unthinkable gasoline crisis in Uganda, which will have a long-term impact on the economy. Fuel costs remain high. The majority of tankers arriving in Uganda and the area fill the petroleum a few kilometers from the Ugandan border. Why should they have to go through border control when they arrive in Malaba?
Ugandan officials can guarantee that all the trucker need is completed at the moment of filling the gasoline, and trucks may then just scan or measure at the border and go. And this can be done automatically, so vehicles don’t have to stop until there’s a substantial cause for authorities to investigate.
Truckers hauling abnormal loads spend a few days at Malaba or Mutukula waiting for the permission of the Ministry of Transport before they reach Ugandan roadways. I think that the development of the oil pipeline and the central processing facilities would witness a lot of imports of equipment and components that carriers label abnormal loads and if they are all to be approved by a minister in Kampala, this will delay the oil projects.
The government has depended so heavily on oil that any delays would undermine the delivery of the project. We can eliminate the hurdles and make all nations in Africa trade with each other, access the sea and generate significant employment.
