East African Money

August 18th: Governments Wants to Change Income Tax Law.  Yes.

The Ugandan government hopes to toughen tax laws to get more revenue from oil production in 2011.

The government announced today that it hopes to introduce tougher laws on income tax to make sure that oil companies pay taxes on their revenue once production starts, as well as from the sale of stakes in Uganda’s oil blocks, according to reporting by Reuters.

Tullow Oil plans to begin commercial oil production in Uganda in the last quarter of next year, and hopes to produce 200,000 barrels of oil a day by 2015.  There are an estimated 2 billion barrels of oil in Uganda.

The government is still in a tax dispute with Canada’s Heritage Oil over payment of capital gains tax on the money it made by selling it assets in Uganda to British multinational Tullow Oil, though it conditionally approved the deal last month, according to reporting by Bloomberg.

Companies that fail to report income in time or file wrong information will face penalties as high as $500,000 USD according to the proposed changes.

Parliament’s finance committee is concerned that the new requirements will be demanding, and it might be more reasonable for companies to file annual financial reports, rather than quarterly.

Tullow Oil still plans to sell its shares in Uganda, through Uganda’s Capital Markets Authority, as well as in Ghana.  Tullow will partner with China National Offshore Oil Corp., Total SA, and the Ugandan government to develop Uganda’s oil industry.

August 15th: Ugandan Fashion.  Too lovely!

From Ugandan fashion designer Sylvia Owori's Prêt-A-Porter Collection.

Ugandans Abroad was into Daily Monitor reporter Edwin Nuwagaba’s story on the Ugandan fashion industry.  Some may know Uganda for her tea, coffee, and national parks, but we hope someday people will known Uganda for the ingenuity of her designers.  Nuwagaba spoke to Sylvia Owori, who confided that Ugandan fashion designers made initial mistakes by designing for a small elite class of consumers, rather than targeting the larger middle-class with their products.

Haute-Couture Collection at Cape Town.

The steep cost of raw materials and accessories also makes it hard to compete with cheap imported clothing.  Owori has 45 employees and owns African Woman magazine, which has given her a platform to promote her fashion designs further.  Owori, who started Uganda’s first modeling agency, was trained in London, but draws upon the Ugandan imagination for her sense of style.

Owori hopes to expand her business by focusing on the growing middle-class in Uganda, and aspires to own a store as large as the Nakumatt Shopping Centre in Kampala.

Latif Madoi Kasumba, Jemma Kisaale (Jemma Designs and Fashion School), and Dorothy Lubega are other big names on the fashion scene.  What Ugandan designers
do you like?

July 30th: The Biggest Regional Business Stories

Foreign aid from the U.K. to Uganda in 2008-2009. U.K. Department for International Development.

The U.K.’s Department for International Development announced on Thursday  an almost £17 million grant to create jobs and support enterprises in northern Uganda, hoping to create 10,000 jobs in the next four years.  The money will be used to give small grants to northern Ugandans, support local businesses, expand youth development centers, and help the region expand agriculture and trade.

In the next year, 4,000 northern Ugandans will receive vocational and life skills training.  The Ugandan government will use part of the grant to study the region and do a comprehensive economic recovery analysis of barriers harming the economy in northern Uganda, the Daily Monitor reported.

Between 2008 and 2009, Uganda received £71.1 million in foreign aid from the U.K.  The largest amount, 27 percent, went to improving governance in Uganda.

July 28th: The Biggest Regional Business Stories

Tullow CEO Aidan Heavey

Ugandan oil discovery: Despite an ongoing tax dispute with the Ugandan government, Tullow Oil formally acquired Heritage Oil’s two oil blocks in Western Uganda for $1.45 billion USD, the Daily Monitor reported.  Tullow hopes to produce 200,000 barrels of oil in Uganda daily, and is bringing in Chinese and French multinationals to construct a refinery.  Tullow will partner with CNOOC and Total to begin commercial oil production.

Tourism and terror: Despite the terrorist attacks on 7-11 in Uganda, local tourism associations say the country’s tourism sector has not been damaged.  Tour operators say that no bookings have been cancelled, and safaris will continue as planned.  None of the parks have closed.

Transcentury Joins RVR Board: Since Rift Valley Railway Investments struck a deal with the Citadel Group, an Egyptian private equity firm, an important Kenyan investment house has joined the railway’s board, the East African reported.  Transcentury Ltd.’s entrance to the board is believed to reflect the power of influential local shareholders, despite Citadel’s efforts to purchase the interests of minority shareholders.