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Tanzania, Uganda deepen economic ties with deal for supply of gas



Economic ties between Tanzania and Uganda appear headed for stronger terms as both countries finalize plans to pump natural gas to neighbouring Uganda, another step in the two countries’ bid to expand energy cooperation.

State-run Tanzania Petroleum Development Corporation (TPDC) said on Monday that the pipeline would start from its capital Dar es Salaam, then pass through Tanga port on the Indian Ocean and to Mwanza, a port on Lake Victoria before crossing the border to Uganda.

It said it was looking to hire a contractor to conduct a feasibility study to determine current and future natural gas demand “by identifying all potential customers”. It did not give an estimated volume.

The study would also establish the most economically viable route for the pipeline, it said.

Read Also: Village Enterprise raises $3.5m to invest into entrepreneurs in Kenya & Uganda

Tanzania boasts estimated recoverable natural gas reserves of over 57 trillion cubic feet (tcf), mostly in offshore fields in the south of the country.

In 2016 the two countries agreed to develop a crude oil export pipeline to help transport land-locked Uganda’s crude reserves from fields in the country’s west to offshore markets.


Highest in East Africa, Uganda’s trade surplus with Congo DR hits $53 million



According to the Ministry of Finance’s Performance of the Economy report, Uganda had the largest trade surplus with the Democratic Republic of the Congo (DRC) in January, totalling $53.07 million (Ush208.9 billion).

The report, which summarises the monthly performance of several economic sectors, found that the Democratic Republic of the Congo (DR Congo) was the recipient of more exports from Uganda than any other member state of the East Africa Community (EAC), followed by South Sudan ($41.68 million, or Sh164 billion), Rwanda ($23.1, or Sh90.9 billion), and Burundi ($5.25 million, or Sh20.6 billion).

Uganda did, however, report deficits of $88.41 million (Ush348 billion) with Tanzania and $12.39 million (Ush48.7 billion) with Kenya. Meanwhile, exports to its EAC partner states increased to $231.47 million during the performance period, while its imports remained at $209.17 million.

With 37.6% of the total market share, the EAC continued to be Uganda’s top export destination, followed by the EU and the Middle East. Uganda, however, trades at a $267.64 million deficit with Asia, $118.15 million with the rest of Africa, and $6.64 million with Europe.

According to the Ministry of Finance report, Uganda’s total export revenue in December was $616.36 million, up 0.2% from $615 million in November of the previous year. This increase was mostly attributable to higher export revenues from cotton, tobacco, and simsim.

A 6.7% decrease in coffee exports from $470.68 million was recorded as a result of heavy rains delaying harvests and drying out freshly harvested coffee.

Between November 2023 and December 2023, the value of imports fell by 3.1% to $886.24 million, mostly as a result of decreased imports from the private sector, which included, among other things, wood and wood products, electricity, petroleum products, and animals.

With China and India being the main contributors, accounting for 61.9% of the region’s imports, Asia continued to be Uganda’s largest source of imports, accounting for 41.2% of the country’s total imports.

Other noteworthy regions with respective shares of 23.6%, 15.1%, and 10.2% were the Middle East, the East African Community, and the rest of Africa.

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Nigeria’s Central Bank clears another $400 million FX backlog



The Central Bank of Nigeria (CNB) paid out an additional $400 million in legitimate foreign exchange backlog to individuals who were properly identified, according to CBN Governor Yemi Cardoso.

This was said by Cardoso at the communiqué’s presentation on Tuesday in Abuja during the Monetary Policy Committee meeting. In the meantime, the bank raised interest rates by 400 basis points, from 18.75% to 22.75%.

Cardoso states that the bank is dedicated to clearing the FX backlog for businesses that are owed money and will endeavour to regain the public’s trust.

Nigeria has matured foreign exchange forwards worth over $7 billion, which, despite the CBN’s assurances that the backlog will be cleared remains for worry for investors as the naira continues to decline owing to currency shortages. Approximately $2.5 billion of the backlog in sectors such as manufacturing, aviation, and petroleum has been fully paid.

He said, “In terms of the backlog, we are committed to clearing the backlog of identified and genuine requests that are pending.

“We are committed to doing that and I can tell you that just today, we paid out $0.4 billion to those that were identified, and we are committed to continuing doing so in one form or the other to those genuinely identified and proven cases.”

Under Cardoso’s direction, the CBN has implemented a number of measures meant to boost the bank’s reputation, stabilise the naira, and rein in inflation.

Among these measures are floating the naira, creating clear regulations for BDC, unifying the foreign exchange market, and ending intervention finance, which the governor claimed swallowed up about N10 trillion during the previous administration.

The goal of the CBN reforms was to settle the foreign exchange market, but since the start of 2024, there has been a great deal of volatility, with the naira at one point worth almost N1800 to the US dollar.

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