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SWFF Annual Report

SWFF Annual Report

USAID and the Government of Sweden launched the Securing Water for Food (SWFF) grand challenge for development in September 2013 during the World Water Week in Stockholm. Within two years after the launch, the Kingdom of the Netherlands and the Republic of South Africa joined the party of Founding Partners. Through SWFF, the partners have worked to identify and accelerate science and technology innovations and market-driven approaches that improve water sustainability to boost food security and ultimately alleviate poverty.

SWFF aims to increase access to innovations that help farmers produce more food with less water, enhance water storage, and improve the use of saline water and soils to produce food. Water Governance Institute (WGI) responded to SWFF call for proposals in 2015 and was selected as a winner from among 408 applications, representing 67 countries.

Twelve winners of the award were selected from the applications. WGI's winning proposal was titled "Promoting Commercial Aquaponics Farming Among Smallholder Farmers/Households for Water Efficiency, Food Security and Livelihoods Improvement in Uganda". The project will initially be implemented in 4 districts of Uganda; namely Kampala, Kamuli, Hoima and Adjumani that were selected based on their high poverty indices.

Kampala was selected because it is the central administrative center of the country; has wide gap between the rich and poor; and suffers from escalation of population as a result of rural-to-urban migration which is challenging the adequate delivery of social goods and services

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Hoima — Residents of Kabaale Parish, Hoima District, where the government intends to set up an oil refinery have clashed with pastoralists who they accuse of grazing their animals in their gardens.

The pastoralists have been cited in Nyahaira, Kitegwa, Bukona and Kyapuloni villages in Buseruka Sub-county.

"The pastoralists have caused fear and discomfort in the community because they are grazing their animals in our gardens," said Mr Richard Orebi, the chairman of the Refinery Resettlement Committee.

The 76 families that have been awaiting government resettlement since 2012 claim the pastoralists are causing them food insecurity.

"They graze in our gardens and when we complain, they rush to police claiming that we have injured their animals. Several people have been arrested on tramped up charges," Mr Orebi said.

He said that the affected families have complained to police and to Buseruka Sub-county authorities as well as Hoima District local government and to the Ministry of Energy but they have not got any redress.

 According to Mr Innocent Tumwebaze, the chairman of the Oil Refinery Affected Residents Association (ORRA), pastoralists are acting with impunity and claim to have been cleared by government to graze in the area.

Government acquired the 29-square kilometer piece of land in Kabaale Parish where it intends to set up a green field refinery that has a capacity to produce 60,000 barrels of crude oil per day.

The chunk of fertile land will also host an airport and attendant oil industries and other required facilities.

During the implementation of the Refinery Resettlement Action Plan (RAP), the 7,118 people who were living on the land were asked by government whether they needed cash compensation or resettlement.

Those who asked for cash compensation were paid while those who opted to be resettled have been waiting to be resettled in Kyakabooga village in Buseruka Sub-county where government procured a 500-acre piece of land.

Mr Tumwebaze says he has witnessed several cases where people whose crops are destroyed by cows are instead arrested by police whenenever they complain.

 He said that Abudalah Kigozi, a resident of Nyakasene village and Emmanuel Kisa, a resident of Nyahaira village are on police bond after being charged with injuring animals.

"The police that have been deployed to guard us have instead turned against us. Police seems to be giving preferential protection to pastoralists who have invaded us," Mr Orebi said.

A pastoralist who declined to be identified or photographed claimed to have moved with his 300 heads of cattle from Kyankwanzi District in search of water and pasture during the dry spell.

"We are here temporarily. We are grazing in bushes. We cannot graze in gardens. That is a total lie," he said.

Mr Bashir Twesigye, the executive director Civil Response on Environment and Development (CRED), an advocacy NGO offering legal aid to communities affected by oil projects said government agencies charged with enforcing the law should not tolerate impunity and lawlessness.

"Government seems to have forgotten its obligations to protect the refinery project-affected persons. This underpins the importance of monitoring before, during and after displacement. This should create lessons for future displacements relating to the oil industry," Mr Twesigye.

 The lands officer in the Petroleum Directorate, Mr Francis Elungat, said the pastoralists are on the refinery land illegally and have not been authorised to be in the area by government.

"Any trespasser on that land including the pastoralists should be handled by police. We have alerted the police accordingly," Mr Elungat said.

The Albertine regional police spokesperson, Mr Julius Hakiza, said there are many people who have illegally settled on government land earmarked for a refinery.

"We have so far arrested 16 people, some are Rwandans and they are before Hoima Magistrates' Court. We have charged them with illegal entry into Uganda," he said.

He said it is unacceptable for pastoralists to illegally graze on government land and destroy crops of the families awaiting relocation.

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Rewriting the Book on Education Investment in Africa

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Rito Nakong of Rupa Sub County, Moroto District, Separating Gold from the sand Using Water without any protective gear

 

Every morning, 46-year old Rita Nakong of Rupa Sub-country, Moroto district treks the 1 mile journey to scavenge for traces of gold sand in gaping pits that dot the area. She ignores the risks of working without protective gear in these merciless, some 15-20 feet deep pits. She leaves at her mud and wattle house five children who risk starvation if she does not risk her own life. This is a pointer to how desperate local communities in Uganda’s mining regions are getting, risking their health and safety, as the artisanal and small scale mining activities go on unmonitored and unregulated in the country.

Moroto district is not alone, recent media reports indicate that the use of hazardous chemicals in artisanal gold mining activities in Mubende district has left local communities health at risk.

Water Governance institute has been collecting soil and water samples from gold mining and processing points in Moroto and Mubende districts that will be tested in the laboratory for presence of mercury, cyanide, arsenic, lead and aluminium  as indicators of pollution. Results derived from these tests shall be shared with the relevant authorities at local and central government levels, and used for evidence based advocacy activities such as sensitizing relevant stakeholders on the negative social and environmental impacts of mining on communities and ways in which such impacts can be mitigated.

The mining act 2003 is also generally lax on adherence to environmental and social principles in mining activities yet communities continue to bear the brunt of the negative effects. First of all, the act lacks a preliminary section outlining adherence to social and environmental principles. Also, Section 26 and 41 of the same act, in the application for an exploration license and mining lease information regarding plans to manage environmental impacts and restoration is not a compulsory requirement. An indicator that environmental and social impacts as well as planned mitigation and rehabilitation strategies are not taken as important criteria during the decision to allocate mining rights.

It is for this and many other reasons that government chose to revise this act and draft a new mineral policy to update the old one of 2001. This is aimed at improving regularisation of mining activities in the country for the sustainable exploration, development and production of the county’s vast mineral resources. This process is a historic decision that was long overdue.

However, Government seems to be moving slowly to put it in place this important law and policy amidst major developments in the sector such as the recent establishment of a gold refinery in Entebbe. Although the artisanal mining sector is generally portrayed as a traditional, unskilled, unchanging sector by government in reality it is a sector that is highly dynamic, responsive, and connected to the broader development nationally.

Note that, the December 2015 Auditor General's report on regulation, monitoring and promotion of the Mining sector indicates that artisanal and small scale mining operations produce over 90% of the national mineral output and employ about 200,000 Ugandans.

Therefore, government should expedite the new law and policy for stronger oversight over the sector .This will greatly contribute towards ensuring high standards of health and safety for the protection of the local host communities and the environment.


By Diana Taremwa , a programmes officer, Water Governance Institute

Read more:   New Vision

                     Daily monitor

Water Governance Institute Innovator Exhibition Stall at the Global Entrepreneurship Congress in Johannesburg, South Africa.

 

SWFF Program & Innovator News
March 27, 2017
Green Heat Uganda: Using Less Water to Create Cleaner, More Abundant Energy
For farmers in Uganda and other developing countries facing energy and waste-management issues, anaerobic digestion systems seem like a great solution. They help break down waste from plants and animals and create fuel. Waste and water go in; fertilizer and biogas come out. The problem is that every kilogram of waste needs to be mixed with a kilogram of water. Women and children in Uganda might gather upwards of 80 liters of water every day just for the digester. This burden leads to half of digesters being abandoned within a year.

Green Heat Uganda has worked to improve the standard digester, using gravity to recycle water within the system. It's a solution that requires farmers to put in less labor and fewer precious resources.
Read More
Innovator News
SWFF Updates
SWFF Featured at Special USAID Event on Water
 
A special event to release USAID's Safeguarding the World's Water report for FY 2015 in Washington, D.C., brought together USAID staff and a wide range water-sector stakeholders to reflect on accomplishments and lessons learned. SWFF Team Lead Ku McMahan spoke about the creation of SWFF, the program's approach and challenges, and the importance of experimentation for development.
 
Photos from the Global Entrepreneurship Congress
 

Thank you, Johannesburg and the 6,000+ delegates from over 165 countries, for making this an amazing Congress!
Opportunities
  • Cutting edge start-ups and research projects across ag-bio, renewable energy, sustainable materials, food production, animal health, and farming technologies are invited to apply to present their business/technology at the 2017 Ag Innovation Showcase in St. Louis, Missouri, September 11-13, 2017.
  • Are you working on a promising, innovative and scalable business in a bottom of the pyramid (BoP) market? The Inclusive Business Accelerator connects you to investors and business coaches. Register your profile!
  • The SOCAP Social Entrepreneur Scholarship Program is now accepting applicants to receive a scholarship to attend SOCAP17 in San Francisco, California-including accommodations, full conference pass, and dedicated mentorship from impact leaders, among other benefits. International applicants' deadline is June 1, 2017. For all other applicants, June 30, 2017.
  • The Government of Australia and other partners (including the World Bank) are launching the Water Data Challenge. This challenge seeks breakthroughs in enabling low-income farmers to access and make use of affordable, timely water data, resulting in better management of scarce water resources to support resilient, productive farms. Applications accepted on a rolling basis. Grants - $10,000. Winners announced July, 2017. First round winners eligible for early-stage awards up to US $250,000 and ready-to-scale awards up to US $1million.
  • Lessons from Successful Social Enterprises: Best Sales Practices for BoP Customers. Join the next USAID Live Discussion webinar on Thursday April 6th at 10AM EST to hear speakers share their lessons learned from developing sales strategies for bottom-of-the-pyramid (BoP) customers.
Resources
1001 Words
SWFF Innovator World Hope GRO Greenhouses field agents, Umar Manseray and Mohamed Jawara, with a vegetable seller purchasing lettuce nursed in a GRO greenhouse at the University of Makeni, Sierra Leone. She will take the lettuce to the market and sell it.
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Mining Izindaba - This Week in Africa Mining Investment News
     
Ghana Moves on Fronting,
SA Climate Change Ruling a First
  
Regulatory moves and infrastructure challenges feature prominently in this week's roundup of news from across the African continent. To prevent fronting, Ghana is expected to review laws governing local content participation in the mining sector and perhaps even consider punitive action to deter locals from ceding portions of the mining industry reserved for Ghanaians to foreigners. [GhanaNews] Also, Kenya's Parliament has ruled out giving a Chinese firm a contract to do digital mapping of its mineral resources, in favour of a local geologist and reinstated Sh2.7bn budget for the survey. [StandardMedia] On the infrastructure side, Zambia's electricity costs will be the 'defining issue' for the mining sector this year and beyond, according to Chamber of Mines President Nathan Chishimba, [EngineeringNews] whereas Tanzania opted to award a coal mining licence to the local unit of Nigeria's Dangote Cement, in an effort to lower its production costs and ease disruptions caused by energy shortages. [MiningWeekly] Meanwhile in South Africa two key regulatory decisions in the past week look set to change local mining dynamics. The most significant one by far has been the Pretoria High Court decision to recognise the significant effects climate change has on SA, by setting aside a government decision to authorise a new coal-fired station. [BD] Equally important is a proposed amendment to the Minerals & Petroleum Resources Development Act that small scale miners must be black-controlled in order to apply for a mining permit. [MiningMx]
  
LATAM
  
gears
MERGERS & ACQUISITIONS
Anglo Shakes Up Market, Again
  
On the M&A front, Trevali Mining expands its footprint into Africa with a US$400m acquisition of a portfolio of zinc assets from Glencore in Namibia and Burkina Faso [Reuters] and Vale looks set to pocket US$733m by month-end from the sale of its stake in Mozambique's Moatize coal project to Japan's Mitsui & Co. [MiningWeekly] By far the most interesting development this week, however, was Vedanta chairman Anil Agarwal's bid for a 12% stake in Anglo American. The planned US$2.4bn investment will make the Indian tycoon the second largest shareholder. [MiningMx] The news also pushed Anglo's share price up by some 10%. [CityAM] Exxaro Resources, meanwhile, is to ask Anglo American whether it can exchange its shares in Sishen Iron Ore Company (SIOC) for a stake in Kumba Iron Ore as part of its strategy to restructure its investment portfolio. [MiningMx] Still with Anglo, apparently the two leading bidders for Anglo American’s South African coal mines, Phembani Group and Masimong Minerals, are planning to list their companies if they are successful in buying the operations. [IOL]
  
Interview with Roger Murphy, CEO of Sula Iron & Gold, runner-up of the first annual Investment Battlefield Competition for junior miners. [VIDEO]
  
Investment
FUNDING NEWS
Mining Indaba Investment Battlefield Runner Up Sula Raises Cash for Gold Project
  
Several successful funding rounds took place this week. Sula Iron & Gold, runner-up in the Mining Indaba Investment Battlefield competition, has raised £0.5m to fund its exploration programme in Sierra Leone [MiningCapital] and Perseus Mining has secured US$40m in funds for development of its Sissingué gold project in Côte d’Ivoire. [MiningMx] Also, Resource Generation has obtained a further US$8.4m to fund the operations and development of the Boikarabelo mine, in the Waterberg coalfield [MiningReview] West Africa-focused Kodal Minerals, meanwhile, has entered into negotiations for a proposed offtake agreement and possible further investment in its Bougouni lithium project, in southern Mali, [MiningWeekly] and junior miner Nzuri Copper hopes to raise A$4.78m through a share placement for its Kalongwe copper project in the DRC. [MiningWeekly]
  
Resolute
  
Investment
REPORT BACK
2017 Mining Indaba Highlights
  
Tales from the Road: Themes from Mining Indaba, Cape Town - GEOVIA team
Revival of the Mining Industry
  
At the 2017 Mining Indaba, South Africa’s Minister for Mineral Resources, Mosebenzi Zwane, said he is optimistic about the future of mining in the country, with about R50 trillion worth of minerals still in the ground yet to be discovered. This sentiment was echoed by Zambian Minister Christopher Yaluma, who commented that 2017 is an encouraging year for mining stocks, buoyed by increased free cash flow, positive earnings momentum and the prospect of distributing excess capital to shareholders. And it’s not only mining stocks and commodities that are looking up – the African continent as a whole is looking more attractive for investors – largely due to an improvement in policy. [The GEOVIA Blog]
  
Sibanye
  
Africa Mining Vision Initiative Gains Traction
  

A policy dialogue at the 2017 Mining Indaba heard strong endorsements from public and private sector speakers for the Africa Mining Vision (AMV) Private Sector Compact. The aim of the AMV is to foster a transparent, equitable and optimal exploitation of mineral resources to underpin broad-based sustainable growth and socio-economic development in Africa. One year in, the AMV compact is gaining traction. For example, African countries like Equatorial Guinea, the fourth largest oil producer in Africa, sees potential in utilising the Africa Mining Vision (AMV) principles. [AllAfrica]

  
  MORE FROM MINING INDABA 2017...                 
New technology tipped to save 200,000 SA mining jobs by 2025 [MiningMx]
Mining for new ideas, opportunities and partnerships [Anglo]
Mining companies must embrace digital - Deloitte [Which-50]
Big data and data analytics to bring efficiency [MoneyWeb]
  
Mike Teke, President of the SA Chamber of Mines, shares his views on mining in Africa and the 2017 Mining Indaba. [VIDEO]
  

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MINING
INNOVATION
MiningWeekly talks to Industrial Development Corporation's Abel Malinga about a new platinum processing method that slashes electricity consumption.
NEW
HORIZONS
Circum Minerals secures a mining licence for its Danakil potash project in Ethiopia [MiningWeekly] and Black Mountain Resources reports a maiden inferred resource at its Namekara project, in Uganda [Mining Weekly]
Anglo
Anglo
MERGERS & ACQUISITIONS
Exxaro is unlikely to exercise pre-emptive rights in Richards Bay Coal Terminal [MiningMx] and Paladin Energy may sell stake in Langer Heinrich mine [MiningReview]
COMPANY
NEWS
African Rainbow Minerals increased headline earnings per share by 283% in the six months to December [CBNC] and cash-strapped Coal of Africa was able to cut its operating loss. [IOL]
IN THE
PIPELINE
South Africa-focused West Wits Mining selects a second surface project for development at its Soweto cluster gold project, in Gauteng [MiningWeekly]
PRODUCTION
UPDATES
Asanko Gold has upped its 2017 gold production guidance at the flagship Ghana mine [Mining Review], but Gold Fields expects a drop in its first quarter production [IOL]
Nordgold
Anglo
PROJECT
NEWS
Prospect Resources has unveiled a big jump in lithium resources for its Arcadia project in Zimbabwe [Mining news] and GoviEx has restarted drilling to target shallow near-surface uranium resources at Madaouela. [Mining Review]
BY THE NUMBERS
Diamond analyst Zimnisky foresees buoyant Q1 diamond demand [Mining Weekly] and, according to StatsSA, South African mining production was up year-on-year by 1.3% for January 2017. [Mining Weekly]

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In 2014, Uganda completed a $75 million national mineral survey funded by the World Bank that identified occurrences of a wide range of mineral resources such as gold, uranium, tin, coltan, nickel, copper and tungsten scattered in different parts of the country. The survey, intended to develop advanced geological data, divided Uganda into six blocks and found western Uganda, to be the most endowed

Although the mining sector in Uganda is mainly characterised by artisanal, small scale miners and is generally portrayed as a traditional, unskilled, unchanging sector by government and the media, in reality it is a sector that is highly dynamic, responsive, and connected to the broader development nationally. The December 2015 Auditor general's report on Regulation, Monitoring and promotion of the Mining sector noted that artisanal and small scale mining operations produce over 90% of the national mineral output and employ about 200,000 Ugandans.

 

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A bus terminal in Kampala. Poor infrastructure hinders growth, but Uganda risks not being able to service its debts. Photograph: Ronald Kabuubi/AP

 

The country has tied loans for infrastructure to future oil revenues, but experts fear that such borrowing could trigger a financial crisis

 In a hamlet, 7km south-west of Uganda’s capital Kampala, a group of cyclists rests under the shade of a flyover under construction. They watch as heavy-load vehicles full of building materials race past. “I can’t wait to ride on this road when it’s complete,” says one of the group.

The flyover forms part of the 51km Kampala-Entebbe espressway, linking the city and Entebbe international airport. It is costing $476m (£383m) and is due to be finished in 2018, one of the major infrastructure projects taking shape in east Africa’s third largest economy.

Another is the 600MW dam being built on the Nile in Karuma, 264km north of the capital, for an expected cost of up to $1.65bn (£1.33bn).

All these projects have one thing in common: they depend on borrowed money, mainly from China.

The infrastructure boom has increased Uganda’s exposure to debt and there are fears the country could be headed for a financial crisis.

Enock Nyorekwa, an infrastructure economist for the EU delegation in Kampala, says: “The [debt] risks have become more pronounced. The question remains whether [this kind of] debt is generating the growth or dividends.”

The country’s external debt has grown rapidly. It was estimated at $10.7bn at the end October, according to the Bank of Uganda.

Uganda’s public debt (pdf) burden has risen by 12.7% from 25.9% of GDP in 2012-13 to 38.6% in 2016-17. It is projected to rise to 45% by 2020.

 

While the International Monetary Fund (IMF) says Uganda remains at low risk of debt distress (pdf), it acknowledges the country is on a “grey” list of those likely to be overburdened by debt.

Kampala has pegged much of the borrowing for projects on the prospect of future oil revenues. The country has confirmed 6.5bn barrels of oil reserves with up to 1.7bn commercially viable. Production is expected by 2020 at the earliest. Yet a fall in the price of oil since 2014 raises uncertainty for prospecting states like Uganda.

The experience of Ghana, which discovered oil in 2007 and went on a spending spree, suggests the need for restraint. In 2015, Ghana agreed to a $1bn IMF bailout so it could service its debts.

“What I am afraid of is that public debt may crowd out service delivery. We may not be able to provide services [in] order to repay debt,” says Paul Lakuma, a research fellow with the Kampala-based Economic Policy Research Centre.

Only 20% of Uganda’s 36 million people have access to electricity, and basics such as access to clean water are a rarity, according to the 2014 national census. As many as 24 million Ugandans (68%) rely on subsistence farming.

At least 12% of Uganda’s budget in financial year 2017-18 will go to servicing debt. This is more than key sectors such as health, education and agriculture will receive.

Public debt fears are rippling across sub-Saharan Africa. Last year, the sovereign rating firm Fitch said government debt-to-GDP ratio for the region was rising to unprecedented levels.

The poor state of infrastructure in sub-Saharan Africa – electricity, water, roads and railway – cuts national economic growth by 2% to 3% every year, according to the World Bank. It reduces productivity and leaves millions of people poor.

Many countries are borrowing to solve these constraints. Between 2010 and 2016, at least a dozen sub-Saharan African countries, including Tanzania, Namibia, Rwanda, Kenya and Ethiopia, issued sovereign bonds to fund infrastructure.

Kenya’s public debt has reached at least 52.8% of GDP and there are warnings that it is getting out of hand.

Last year, the UN warned that high borrowing by African countries could trigger debt crises like those seen in the 1980s and 1990s

On her visit to Uganda in January, the IMF’s managing director, Christine Lagarde, said mobilising more domestic revenue was key to avoid falling into debt distress. “Relying on borrowing alone to finance infrastructure would be unworkable because debt would become too high. More revenue from taxes needs to be mobilised,” Lagarde said.

Uganda was a beneficiary of debt relief under the IMF and World Bank’s heavily indebted poor countries initiative in 2000.

As debt stock grows, revenues have not grown at the same pace to match public debt servicing obligations. In November, Moody’s downgradedUganda’s long-term bond rating and said debt as a percentage of revenues had risen by 54% since 2012 and is expected to exceed 250% by 2018.

“Debt affordability is also deteriorating, in part due to a shift in composition of the debt burden towards non-concessional borrowing,” Moody’s said. “Debt affordability has been a persistent vulnerability for Uganda, and the higher debt burden combined with the shift in financing sources will lead to further deterioration.”

Yet despite debt distress fears mounting, half of Uganda’s borrowed funds had not been disbursed by the end of October. This means the country continues to borrow money without proper plans of when and where to spend it.

In September, the World Bank suspended new lending to the country. It said: “Ugandan authorities [must] address the outstanding performance issues in the [debt] portfolio, including delays in project effectiveness, weaknesses in safeguards monitoring and enforcement, and low disbursement.”

In an earlier assessment of Uganda’s investment strategy, the Bank said the country had not been getting value for money on investments on most public projects over the past decade. It found Uganda’s projects were characterised by “endemic delays in implementation, cost overruns, and corruption means that sometimes projects come in at twice the original cost”.

The Bank added: “For every shilling invested in the development of Uganda’s infrastructure, less than a shilling (about 70%) of economic activity has been generated.”

The Kampala-Entebbe expressway may add glamour to the changing face of the capital, but the benefits may not outweigh the heavy costs.

 

SOURCE: the guardian

WGI and other international organisations issue a letter with specific voting recommendations to the EU parliament to vote in favor of the new beneficial ownership (BO) requirements on certain types of companies and trusts. The European Commission has introduced a number of changes to the Anti Money-Laundering Directive to enhance the transparency of the EU financial system by introducing new beneficial ownership (BO) requirements on certain types of companies and trusts. Members of the European Parliament ECON and LIBE committees will be voting on the amendments for the Directive .This is meant to increase transparency about who really owns companies like Shell and others, and trusts and put an end to the abusive practices by  these companies revealed in the Panama Papers.

READ THE DETAILED REPORTS

  1. USAID UGANDA PEA SUMMARY-Oil Development in Uganda
  2. voting_recommendations_letter_final

 

cyanide Impregnated Gold Mine Tailing in Mubende District

 

President Museveni has ordered the removal of royalties on gold in order to limit the amount of gold that is smuggled through Uganda unprocessed. He also said he wanted the tax lifted to encourage gold miners to take their gold the newly African Gold Refinery located in Entebbe. He said the tax was encouraging the smuggling of gold out of the country.

 "Therefore I am going to remove that royalty. The people of Mubende should bring our gold to the refinery. You were scared of the tax but now we have removed it. The royalty for those in transit has also been removed. There will be no excuse for anybody not to bring their gold to the refinery," President Museveni said at the launch of the African Gold Refinery on Monday in Entebbe.

President Museveni said that after several demands from industry players who want to see most gold refined and gold bars exported. Uganda at the end of the last financial year exported gold worth Shs700bn, the highest figure in over decade mostly because of the value addition made to the gold. It is now Uganda's second largest export after coffee.

 However, the auditor general queried why the government did not collect royalties worth Shs42bn from the gold that was exported out of the country. Any gold in transit is required to pay royalty fees of about 5 percent of the value. Also, the Uganda Revenue Authority (URA) is required to collect royalties from all gold mined in Uganda. That money is distributed to the local governments where the gold is mined.

President Museveni said that artisanal miners, like those in Mubende do not file any returns and would rather sell the gold on the black market than pay the royalty.

Mr. Alain Goetz, a Belgian national and CEO of the African Gold Refinery said the move would allow the firm to invest more in Uganda and reduce the smuggling that affects their business.

 "Those who smuggle jobs do not create jobs or even invest directly in this country like we have. Any incentive is an encouragement for them to move from the black market to the formal market," he said on the sidelines of the launch.

The plant has the capacity to refine up to 300kgs of Gold per week and one tone in a month. The $15m facility employs about 75 people and produces gold bars. Alain also requested the government for an income tax incentive. The refinery already benefits from other incentives.

"Because of the importance we are attaching to this facility, the government has provided for manufacturing under the bond facility, which will help the licensed traders and importers to supply gold to the refinery for refining and export free of taxes. This will facilitate the competitiveness of the refinery," he said.

Uganda is currently reviewing the mining policy and law to attract private investment and value addition. There are concerns around the refinery though especially the source of the gold. Of all gold refined in the last one year of operation, 90 per cent of it was not from Uganda yet import statistics don't show any gold entries.

 "Uganda's gold sector is shrouded in mystery - you have to ask who is really benefitting. The gold trade was worth 200 million dollars to the Ugandan economy last year but there are no official figures on where the gold came from or where it is going," said George Boden, Campaign Leader at Global Witness.

"This raises serious questions about whether gold that may have funded conflict and human rights abuses in Eastern DRC and South Sudan could be entering the international supply chain and whether the right taxes are being paid."

SOURCE: All Africa

Small scale gold mining in Karamoja. Such activities are supporting the growth of the mining industry.

 

Kampala. Gold in 2015/16 became Uganda’s second largest export product after coffee but the royalties paid to government don’t seem to reflect that growth. Uganda exported gold valued almost Shs700 billion or about 5,316kgs in 2015/16 according to statistics from Bank of Uganda (BoU).


However, in the Auditor General’s report for 2015/16, there was collection royalty, yet exports were much higher. In fact, the royalties collected were only Shs360m instead of Shs41.88 billion.
“Accordingly, government should have collected between Shs6.98b and Shs34.9b in royalties using the applicable rates of 1 per cent and 5 per cent for the imported or locally mined gold respectively,” the report reads, in part.
Uganda has never exported gold that is valued at that much and at the moment the capacity to produce such quantities is still considered limited. Uganda is supposed to be getting royalties from any gold that is imported and exported, according to Mining Act 2003. The concern raised by the auditor is because of the conflicting figures issued by the Ministry of Energy on one hand, and then Uganda Revenue Authority (URA) on the other.

“During the financial year 2015/16, I noted that the management assessed royalty and awarded export permits for only 93kgs of gold worth Shs11.8b. However, collaborative reports from the Customs and Excise Department of Uganda Revenue Authority indicated that 5,316 kgs of gold had been exported with a total value of Shs698b,” the report reads.
That means some gold was exported and royalties were never paid.
Accordingly, the Mining Act reveals that “Any person who exports any mineral from Uganda without complying with the requirements of subsection (1) of this section commits an offence and is liable, on conviction, to a fine of not less than two hundred and fifty currency points or to imprisonment for a term of not less than two years, or both.” There has been no action taken against anyone violating this, according to the Auditor General.

Baffling exports
Of particular concern is the source of the gold.
Gold quantities that are produced in Uganda are still unknown. Uganda’s gold production is mostly done by artisanal miners and small-scale miners. According to Dr Adam Mugume, the executive director research at BoU, says they also don’t have records of gold in such large quantities being imported into the country.
“All of a sudden we got God’s blessing and we started exporting gold. I acknowledge that actually, that is one of the main challenges that we have because we don’t see where the gold is coming from. Because we do not see it in imports but we are seeing it in exports,” he said during the Stanbic Uganda Economic Outlook Forum last Tuesday.
In 2016, Uganda’s exports grew by 1 per cent on account of the increase in gold exports.

Exporting trends
Gold exports per financial year (exchange rate $1 = Shs3,580)
2012/13. $4.4m (Shs17.6b)
2013/14. $0.25m (Shs895m)
2014/15. $0.23m (Shs823.4m)
2015/16. $203.4m (Shs731b)
Calendar year
2012. $7.82m (Shs28b)
2013. $3.25m (Shs11.7b)
2014. $0.24m (Shs859m)
2015. $35.7m (Shs130b)
2016. $339m (Shs1.2trillion).

SOURCE: Daily monitor

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