VenturesNow

Ugandan state oil company inks agreements with over 80 fuel marketers

Published

4 months ago

June 4, 2024

Uganda National Oil Company (Unoc) signed sales and purchase agreements (SPAs) with the largest fuel dealers in the market on Tuesday, as it continues to recover from the setbacks associated with the route in Kenya that threatened its monopoly on fuel supply. These agreements will permanently bind over 80 Ugandan oil marketers to the state-owned company.

This comes after the Ugandan, Kenyan, and Unoc governments recently signed a tripartite agreement at the State House in Nairobi. According to officials, the first products should be available next month.

The SPAs define the roles and obligations of each link in the supply chain and provide a formal agreement between Unoc, the supplier, and the oil marketing corporations (OMCs), the buyers of bulk petroleum products.

“The agreements with our clients, the OMCs have been completed and so what remains is delivering the vessel/products and the products hitting the fuel pumps,” said Peter Muliisa, Unoc’s Chief Legal Company Secretary.

“With the signing, everything is now set,” said Mr Muliisa. “What remains now is to bring in the first vessel to start delivering the fuel. We expect the first ship under Unoc will be here in July.”

At the Kampala Serena Hotel, five businesses, including Vivo Energy, Moil, Rock Global Oils, Petro City, and Nile Energy, signed agreements with Unoc. On Wednesday, additional businesses are anticipated to sign agreements, which will generate billions of dollars in revenue for the single supplier.

Proscovia Nabbanja, the chief executive officer of Unoc, and Mr. Muliisa signed on behalf of the business, while representatives of the OMCs signed on behalf of their individual enterprises.

In addition to being the only supplier, Unoc will play a significant role in the transportation of petroleum products into Uganda, running the oil barges and vessels that are anticipated to be added to the company’s inventory, a development that will cement its dominance in the sector.

According to Mr. Muliisa, Unoc will need a new vessel each month to transport enough gasoline to meet the market demand, which is now seven million liters per day, given the growth expectations of the downstream part of the business.

The market has been expanding at a rate of seven to nine per cent annually, but within the next five years, it is anticipated to reach a peak of nine to eleven percent. Out of the more than 100 OMCs in Uganda, Unoc has established agreements with at least 83 dealers, or large to medium operations. The smaller and micro dealers will still purchase goods from the industry’s titans.

VenturesNow

Zambia eyes recovery following worst drought

Published

10 hours ago

September 28, 2024

Ifeoluwa Dada

As it emerges from its worst drought in living memory, Zambia hopes to achieve a fast recovery in economic growth and a halving of its budget deficit in the following year, the country’s finance minister announced on Friday.

In contrast to a projected 2.3% growth in 2024, the copper producer aims for 6.6% growth in 2025, according to Finance Minister, Situmbeko Musokotwane, in a budget speech.

The El Nino-caused drought destroyed Southern Africa’s crops, resulting in food shortages and harming the region’s economic prospects this year.

Zambia’s finance minister said on Friday that the nation, which is coming out of the worst drought in living memory, intends to quickly recover economic growth and cut its budget deficit in half the next year.

Finance Minister Situmbeko Musokotwane stated in a budget address that the copper producer is targeting 6.6% growth in 2025 as opposed to a projected 2.3% increase in 2024.

A UNICEF study in March 2024 states that the majority of the country’s central and southern regions have been impacted by the dry spell since mid-January. These regions have gotten less rainfall than usual, which has resulted in the destruction of one million hectares of maize—nearly half of all the corn grown in the nation.

Since hydropower generates more than 80% of Zambia’s electricity, the analysis also predicted that the drought would cause a power shortage of 430 megawatts and have an impact on surface and groundwater levels. These projections would have serious ramifications for industries other than agriculture.

The minister further stated that following the conclusion of a Eurobond restructuring exercise, Zambia was still negotiating restructuring arrangements with certain commercial creditors.

He reported that the China Development Bank and the Industrial and Commercial Bank of China have just struck provisional restructuring agreements with Zambia.

It has been demonstrated that the agreements are in line with Zambia’s IMF program and the “Comparability of Treatment principle,” which aims to prevent the wealthier creditor nations that make up the Paris Club from making disproportionate concessions in comparison to other creditors.

The lengthy debt restructuring process in Zambia has hurt local financial markets and discouraged investment.

VenturesNow

Ghana central bank cuts key rate as inflation cools

Published

23 hours ago

September 27, 2024

Ifeoluwa Dada

The governor of Ghana’s central bank has stated that the country’s economy is still recovering strongly and that inflation is continuing to decline, causing the bank to drop its main interest rate by 200 basis points to 27%. This was the first rate cut since January.

At a press conference Friday, Bank of Ghana Governor Ernest Addison stated that economic indicators point to a proceeding disinflation, with price increases continuing to moderate in the direction of the year’s short-term range target of 13% to 17%.

“Such a strong signalling of the monetary policy rate by reducing it by 200 basis points tells you that the central bank is quite satisfied with the progress of recovery of this economy,” Addison said, adding that all indicators including growth, inflation and fiscal policy are improving.

According to Reuters polled economists in July, Ghana’s interest rate is predicted to drop by 200 basis points by year’s end.

“This easing of policy is understandable, given that the recent falls in inflation had caused real interest rates to rise, something that this cut will partially reverse,” said Leslie Dwinght-Mensah, economist and research fellow at Accra-based Institute for Fiscal Studies.

“The strong rate of economic activity, which official data recently revealed, also gave the central bank the comfort to take this step.”

Economists surveyed by Reuters in July expected that by year’s end, Ghana’s interest rate will have decreased by 200 basis points.

“The strong rate of economic activity, which official data recently revealed, also gave the central bank the comfort to take this step.”

Economists surveyed by Reuters in July expected that by year’s end, Ghana’s interest rate will have decreased by 200 basis points.

“The strong rate of economic activity, which official data recently revealed, also gave the central bank the comfort to take this step.”

Following the completion of preliminary debt restructuring negotiations with two bondholder groups, Ghana extended an invitation to holders of its approximately $13 billion worth of international bonds to exchange their holdings for new instruments.

Bondholders can accept the offer until September 30.