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Uganda Airlines to give local suppliers preference in $95 million procurement spend

Published

4 months ago

July 3, 2024

Uganda Airlines is looking into measures to help local suppliers get a larger share of the $95 million it wants to spend on procurement during the 2024–2025 fiscal year. The funds will be divided between works, services, and supplies.

By the end of 2024, the national carrier anticipates reaching the 700,000 passenger mark thanks to increases in capacity and frequency on important routes. At the airline’s inaugural supplier event this week in Kampala, where local suppliers were briefed on both current and upcoming prospects at the flag carrier, the numbers were revealed.

In the five years that the airline has been in business, local contracts have paid out Ush120 billion ($32.3 million), according to Chief Executive Officer Jenifer Bamuturaki. The database of local suppliers has expanded to 200. She also bemoaned, meanwhile, the difficulties the airline has had maintaining consistency and quality, which has frequently compelled it to import goods that might be made domestically.

According to Ms Bamuturaki, local suppliers must consider being globally competitive for their expansion to assist the carrier’s cargo operations and domestic export market.

The demand for onboard consumables is rising as the airline expands its network and the number of passengers rises, according to her, with 90% of them coming from local vendors.

Uganda Airlines anticipates reporting 480,000 passengers flown during fiscal year 2023–2024, based on preliminary figures. Nonetheless, it is anticipated that there would be roughly 700,000 passengers in 2024.

The network, which currently has 13 destinations, is growing due to up-gauging aircraft on regional routes, increasing frequency on important routes, and network development. The airline expanded its fleet in May by adding a leased A320 with 156 seats.

In addition to making space for additional frequencies, the aircraft has allowed the carrier to meet the increasing demand on routes like Nairobi, Kinshasa, and Johannesburg.

Nairobi, which is now served sixteen times a week, will expand to two flights a week starting in July. That is three flights each day, six days a week, excluding Saturday. There will be six instead of five days per week in Kinshasa, and four more days of double daily flights in Juba, for a total of nine flights per week.

After severing ties with Zanzibar, Dar es Salaam will now run five flights per week instead of just one. Kilimanjaro and Zanzibar will now be combined, with three weekly flights between the two locations.

“We remain committed to working with you to expand the range of products that you can supply on competitive terms. But we also want you to grow with us by transforming into globally competitive companies that can supply quality products not just Uganda Airlines but the global legacy airlines.”

“But you will need to concentrate effort on improving quality across packaging, consistency in taste and supply,” Ms Bamuturaki said.

She further stated that because its suppliers will help fill the cargo capacity, the company—which plans to start a specialized freighter service—sees their success as essential to its sustainable expansion.

She also directed them toward new growth opportunities, such as planting feedstock for energy firms as the first step in the sustainable aviation fuel value chain.

Related Topics:Featured Uganda Uganda Airlines

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Finance minister says reduced oil prices pressuring Angola

Published

1 hour ago

October 26, 2024

Ifeoluwa Dada

Angola’s finance minister has told journalists that falling oil prices put “lots of pressure” on the nation, predicting that prices would average between $70 and $72 per barrel in 2024 as opposed to $75.

In an interview conducted on the fringes of the IMF and World Bank annual meetings in Washington, Finance Minister Vera Daves de Sousa stated that the government of the continent’s second-largest crude oil exporter will likewise keep phasing down fuel subsidies.

“How many steps we didn’t decide yet, but our idea is to do it in steps,” she said, confirming that subsidies were amounting to around 4% of GDP this year.

At the start of this year, Angola departed from the Organisation of the Petroleum Exporting Countries.

On Friday, Brent crude futures rose 2.25% to $76.05 a barrel. Analysts have cautioned that next year’s high supply and weak demand will put pressure on oil prices.

According to Daves de Sousa, the administration will submit its budget to Parliament the following week, and during the next few days, the numbers regarding the amount of outside funding that will be required will be finalised.

Angola is considering internally whether to apply for a loan program from the International Monetary Fund, she said.

“We asked for a note with options of programs in case we request, and considering our current situation, what they understand as a good program for us,” she said.

According to her, the administration was also looking at other options, such as combining funds from domestic banks and capital markets with support from other multilateral sources like the World Bank and the African Development Bank.

Angola’s most recent IMF program, worth $3.7 billion, was approved in December 2018 after the country’s earnings were severely damaged by the collapse of global petroleum prices.

Angola’s finance minister has told journalists that falling oil prices puts “lots of pressure” on the nation, predicting that prices would average between $70 and $72 per barrel in 2024 as opposed to $75.

“How many steps we didn’t decide yet, but our idea is to do it in steps,” she said, confirming that subsidies were amounting to around 4% of GDP this year.

At the start of this year, Angola departed from the Organisation of the Petroleum Exporting Countries.

On Friday, Brent crude futures rose 2.25% to $76.05 a barrel. Analysts have cautioned that next year’s high supply and weak demand will put pressure on oil prices.

Angola is considering internally whether to apply for a loan program from the International Monetary Fund, she said.

“We asked for a note with options of programs in case we request, and considering our current situation, what they understand as a good program for us,” she said.

Angola’s most recent IMF program, worth $3.7 billion, was approved in December 2018 after the country’s earnings were severely damaged by the collapse of global petroleum prices.

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IMF recommends exporting African countries make crucial changes. Here’s why

Published

1 hour ago

October 26, 2024

Ifeoluwa Dada

Abebe Aemro Selassie, director of the International Monetary Fund (IMF) Africa, has stated that countries in Sub-Saharan Africa that rely on commodity exports must change their economies to address uneven regional economic growth.

According to the IMF’s most recent World Economic Outlook, which was released this week, the region is predicted to develop by 3.6% this year, which is unchanged from last year and lower than an April prediction of 3.8%. Commodity economies are likely to lag behind their more diverse rivals.

According to the IMF’s assessment, the growth of the commodity-intensive nations is around half that of the rest of the region, with oil exporters bearing the brunt of what it called “subdued and uneven” regional growth.

“South Sudan, Nigeria, Angola are all very much in that camp,” Abebe told Reuters.

The IMF’s regional economic outlook for Sub-Saharan Africa was released on Friday, and while diverse economies like Senegal and Tanzania are predicted to develop at a rate higher than the regional average, Nigeria would only grow at a rate of 2.9%.

“They have had very large macroeconomic imbalances, financing challenges which have held back growth,” Abebe said.

He claimed that because those issues had led to rising inflation and pressure on the expense of living, the Nigerian government needed to “squarely address” them.

The administration of President Bola Tinubu has started a number of measures that it claims are intended to boost economic expansion and draw in foreign investment. The IMF predicted that South Africa, whose growth has been hampered by debilitating power outages, would expand by 1.1% this year.

The IMF stated that armed conflicts are also impeding growth, pointing to the fact that South Sudan’s oil exports are impeded by fighting in neighbouring Sudan, where the crude export pipeline is located.

“They (oil exporters) need to find new sources of growth, get more private sector investment – so working on reforms that will facilitate that is important,” Abebe said.

According to the IMF research, Sub-Saharan Africa’s economic growth is anticipated to improve marginally to 4.2% in the upcoming year.

Although Sub-Saharan Africa accounted for almost half of the world’s 20 fastest-growing economies this year, the research issued a warning that greater growth rates were necessary to combat pervasive poverty and inequality.

According to the IMF, as nations grapple with high debt loads and high debt servicing costs, one of the primary barriers to higher growth is a lack of access to inexpensive financing.

The fresh money was expensive, even though some nations were able to sell bonds on global capital markets this year after a two-year break brought on by geopolitical shocks and high interest rates in developed nations like the US.

“The old development finance architecture is not delivering, and, if anything, kind of is in the process of disintegrating,” Abebe said, citing “very problematic levels” of official bilateral funding for poor countries.