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Trucks transporting petroleum products to Uganda. A new law empowers Unoc to supply the Ugandan market, raising some queries.

All oil marketing firms will now be buying from the state supplier. They say they should have been given a chance to compete because Unoc effectively creates a monopoly.

With the passing of the Petroleum Supply (Amendment) Bill 2023 this week, Kampala inched closer to sealing the deal that gives a monopoly to the state-owned Uganda National Oil Company (Unoc) as the sole importer and supplier of fuel products into the country via a multimillion partnership with Swiss-based Dutch energy and commodity trading giant Vitol.

As the falling-out between Uganda and Kenya over the fuel supply deal unravels, uncertainty has gripped new investors in the industry as well as old players who fear that the new arrangement gives advantage to some oil marketing companies (OMCs) over others.

Among these is Mahathi Infra Uganda Ltd, a $270 million oil logistics investment and recent entrant in the industry, operating fuel storage facilities near Kampala. Its management is on knife-edge as directors wonder how, if at all, they fit in the new arrangement.

“It’s not yet very clear how we fit,” said Mike Mukula, chairman of Mahathi Infra.

The company also operates four barges on Lake Victoria, which move petroleum products from Kisumu Port to its reserves in Kawuku on the shores of Lake Victoria, 18km from Kampala.

“All oil marketing companies, including us, will now be buying from one supplier, Unoc. We should have been given a chance to compete [because] buying from one supplier is a shift and creates a monopoly. We would wish to sit down with Unoc on the logistics framework,” Mr Mukula told The EastAfrican.

Legislator Nathan Nandala Mafabi, who is also a businessman with a string of fuelling stations across the country, fears that the Vitol-Unoc partnership gives some players advantage over others, citing Vitol’s interest in of one of Uganda’s largest dealers Vivo Energy. 

“It would have been better if we gave Unoc money to trade directly. When we bring in Vitol, the shareholder of Vivo Energy that trades as Shell, I can tell you we might be helping them to make more money instead of benefiting Ugandans,” he told Parliament, as the Bill was passed.

Final pump price

While presenting the committee’s report that informed the vote on the Bill, Emmanuel Otaala, who chairs Parliament’s Committee on Natural Resources, said that Uganda imports 90 percent of its petroleum products through Kenya and 10 percent through Tanzania.

The system currently imposes three layers of middlemen from overseas refineries, where the fuel is sourced, to the Ugandan oil marketing companies, with each of the Kenyan middlemen infusing a profit margin that is ultimately fed into the final pump price.

A simple majority of the committee justified its support for the Bill, stating that Uganda’s inability to purchase oil directly from the refineries in the Gulf states – Aramco, Adnoc, and Enoc – leads to an extra mark-up on Uganda’s fuel from Kenyan companies and uncertainty in supply of petroleum products which comes down to high and unpredictable pump price.

Under the Vitol-Unoc arrangement, Vitol will finance the supply of the petroleum products up to delivery points in Kenya, on a non-immediate cash payment basis, to enable Ugandan monopoly pay after supplying the oil marketing companies in the country, the Committee’s report said.

But critics say that this deal comes with its own implications for the end-user. “Vitol will now source money all over the world to supply oil, but there will be interest, so the moment we approve this monopoly, fuel prices will be high,” Mr Nandala argued in Parliament.

There are also fears that the Vitol is another foreign-owned company coming to play at the top of a sector that has 170 OMCs, a majority of which are not owned by nationals – hence this deal further shrinks Ugandans’ market share and participation.

For instance, the top three OMCs in Uganda – TotalEnergies, Vivo Energy and Stabex International – are all foreign-owned, controlling 46 percent of the market share.

But also coming into scrutiny is Unoc’s reserves capacity, at 30 million litres; the company’s fuel storage facilities are located in Jinja, 80km from Kampala, but market analysis shows that the biggest volume of fuel imports into Uganda is consumed within a 65km radius from the capital city.

The EastAfrican has learnt that even before the law was passed, wheeler-dealers in Kampala were already circling in and scheming for logistics deals to deliver the fuel to the oil marketing companies, as it emerges that Unoc will pick private firms to transport fuel imports.

Kenyan middlemen

“We do not plan to get into transportation business at all,” says Peter Muliisa, chief legal and corporate affairs officer at Unoc. “That will remain with private sector and we will work with all transporters.”

“We are however looking at all transportation systems (road, rail and water) and engaging players in all. Our overarching objective is ensuring that Ugandans get fuel in the most efficient manner possible,” he added.

With both the Kenya and Tanzania routes to be used, this opens a window for Mahathi Infra, whose four ships carry 4.5 million litres each, making 10 movements in a month, delivering 180 million litres of fuel – or three-quarters of the fuel volume that Uganda consumes in a month.

Uganda President Yoweri Museveni championed his government’s protestations and the move to cut off Kenyan middlemen from the fuel supply deals, which elicited response from Nairobi, by going to court and also threatening to block Uganda-bound imports from Kenya Pipeline infrastructure.

Kenyan authorities also said that Unoc would be required to be locally registered in Kenya before it can operate in Mombasa and receive petroleum products from the refineries in the Gulf countries, for onward transportation into Uganda, and this left Tanzania as the option, despite fears over its infrastructure. 

But Unoc says this is not an issue anymore.

“Our plan is to use both with Kenyan route bringing in the bigger percentage. Access to Kenyan infrastructure isn’t an issue and we are perfectly finalising that process. Registering Unoc by continuation in Kenya isn’t a problem and we have already finished that part so we do not see any challenge,” explained Mr Muliisa.

He added that the Central Corridor route requirements are also being worked on and the company is in discussions with the government of Tanzania on how to optimise infrastructure there.

Legislator Dicksons Kateshumbwa, a former commissioner of customs at Uganda Revenue Authority, argues that Tanzania has made significant investment in expansion of Dar Port infrastructure, to facilitate regional trade.

Fuel demand

He also argues that for fuel imports to Uganda, Dar is not a sole option but a supplementary one, citing the distance from Dar es Salaam to Mutukula, which is about 1,500km, and the cost of transportation per cubic metre to Uganda being about $120-$130.

“There is no pipeline from Dar to Uganda for now, so transportation is by road and partly through the lake via Mwanza,” he said on X.

However, road transport has ruled the fuel transport business for Uganda-bound products for decades, and logistics experts say that 90-95 percent of trucks delivering cargo into Uganda are owned by foreigners who have powerful lobbies that keep them on top in the Northern Corridor and the interior.

With transporters scheming for contracts, it is not clear what Unoc’s preferred choice will be, but transport economists warn that in the absence of rail – currently due to renovations on the track – the choices are limited to road and water for delivery of fuel cargo.

Uganda needs between 210-225 trailers per day to feed its fuel demand adequately, but each litre of fuel carried by road comes with a cost of Ush161 (0.042 US cents) compared to Ush64 (0.016 US cents) on fuel delivered by water transport, economists say.

According to Mukula, one fuel Mahathi Infra barge carries the equivalent of what 170 fuel trucks deliver, and former URA customs boss Kateshumbwa agrees that lower transport costs would translate into cheaper fuel for motorists as pump prices are a function of product cost, transportation and taxes.

Mahathi went into operation in 2020, mainly picking up fuel imports from Kisumu supplied off the Kenya Open Tender System (OTS), but also operating 70 million litres capacity fuel reserves to serve product shortages in Uganda.

In ditching Kenya’s OTS and later G2G [government-to-government] oil purchase arrangement from the refineries, Uganda has taken a move that ends what the market players have called political and business cartels, although it now creates its own monopoly.

But this greatly impacts the operationalisation of Kisumu Port and oil jetty in Kenya will lose up to $100 million. By Julius Barigaba, The East African

A section of university students work on their projects during the inter-university Hackathon 2023 competition held at Jomo Kenyatta University of Agriculture and Technology. [Wilberforce Okwiri, Standard]

A team of five students from Machakos University has won the Hackathon 2023, a national competition that challenges students to create innovative solutions using cutting-edge technologies.

The winning team, Blind Eye, developed a mobile application that guides visually impaired people to walk around.

The app uses the camera to detect the surroundings and give voice instructions to the user, such as “turn right”, “stop”, or “avoid obstacle”. The app does not require an internet connection to function and aims to enhance the inclusivity and independence of the visually impaired. 

Anne Joy Njoroge, one of the members of Blind Eye, said the inspiration for the app came from observing challenges faced by those with vision challenges.

“We have seen their problems as they walk around. There is Machakos Institute for the Blind right next to our school, where we see blind people around,” she said. 

The Hackathon 2023, which began in 2019, brought together 14 universities from both private and public. The judges were impressed by the originality, scalability and social impact of the app. 

Prof Anthony Waititu, a statistics lecturer at Jomo Kenyatta University of Agriculture and Technology (JKUAT) and one of the judges, said that they were looking for 'ideas that can disrupt the way the world is learning'. He praised the students for their creativity and problem-solving abilities.

According to Kenya Airports Parking Services (KAPS) Chief Executive Officer Ngala Saronge the event was a success and a testament to the talent and innovation of Kenyan students. 

“With the initiative, we are able to bring all the students’ talents to the fore, making sure we are able to link universities to the industry. We are happy to see that innovation is coming directly from the students,” he said. By Wilberforce Okwiri, The Standard

 
Photograph: Tolga Akmen/EPA© Provided by The Guardian

Speaking soon after Wednesday’s supreme court judgment, one of the people seeking asylum who has been involved in the case against the government bravely spoke anonymously to the BBC. The man, in his 20s, who arrived in the UK 18 months ago from a war-ravaged country in the Middle East, said he felt “relieved” by the decision. “The situation has changed and I hope the next stage is going to be more positive, things are going to get better,” he said. 

This sense of relief is likely to have been undermined by the prime minister’s brazen response the same afternoon that the government will still push ahead with the plan to send asylum seekers to Rwanda by creating a new treaty. He will probably have been even more devastated by the immigration minister Robert Jenrick’s even more adamant words that it is “absolutely critical that flights go off to Rwanda in the spring”.

For those we work with at the Refugee Council who are in the asylum system, the main feelings are anxiety and fear. Since the Rwanda plan was announced by Boris Johnson back in April 2022, we have seen much distress and trauma caused to people who face being sent to the east African country to have their asylum claims processed.

Letters have been received, menacingly called notices of intent, warning people that they are being considered for forcible removal. A recent freedom of information request found that between January 2021 and March this year more than 24,000 people had received the letters.  

Every time a person receives one, it causes considerable stress. We are aware of some cases in which the impact on people’s mental health has been so acute that it has led to self-harm and suicide attempts. This is the harsh reality of the lived experience for men, women and children from countries such as Afghanistan, Iran and Eritrea – where oppressive regimes chase down their opponents – and from countries such as Sudan and Syria, where wars are playing out.

In the legal and political arguments over Rwanda, it is easy to forget that these are the people affected. They are the faces behind the statistics and the case files. They are our fellow human beings, who through no fault of their own have had to leave their homelands and give up their livelihoods. The chaos and uncertainty they have had to face since the government came up with its Rwanda scheme is now only going to deepen.

 

In conversations with Home Office officials, they quietly acknowledge that without the Rwanda deal the flagship Illegal Migration Act becomes a lame-duck piece of legislation. The act, in the words of the United Nations High Commissioner For Refugees, “extinguishes access to asylum in the UK”. Those who arrive irregularly will not be able to apply for asylum and face removal to a so-called safe third country. When the legislation was first published as a bill in March, the government assumed that Rwanda would be that safe third country. It didn’t expect the court of appeal and then the supreme court to conclude that the deal is unlawful because Rwanda is unsafe for people seeking asylum.

I understand there was shock among officials in the Home Office who had been tasked with implementing the act when the judgment came through. That’s because there is no plan B. Their objective now is simply to plough on and implement the Illegal Migration Act. It is unimaginable for it not to happen. 

The act will apply to anyone who has entered the country to apply for asylum since 20 July, when it received royal assent. Officials privately saytell us thatBased on the number of asylum applications so far this year, this could be as many as 30,000 people. All of their lives remain in limbo. And yet another backlog is created on top of the one the government is already trying to tackle, in its frantic efforts to get through more than 120,000 cases in the asylum system that have piled up owing to its gross mismanagement and an obsession with putting in place a hostile environment.

And it gets worse. Evidence is beginning to emerge from organisations across the country that support people who are seeking asylum showing that, as the political noise about flights to Rwanda ramps up, fear is driving people to disappear and go underground. We know from our experience that this is likely to lead to different forms of exploitation, trafficking and abuse. 

For a government and a prime minister who seem to have decided to stake their legacies on this Rwanda plan, this is simply collateral damage. All that matters is getting planes in the air, because in their minds that is the ultimate deterrent to desperate people who have to escape their own countries – the only way to “stop the boats”.

This is, of course, ill conceived. As the Oxford University Migration Observatory says: “There’s no single policy that can reduce Channel crossings on its own, and the Rwanda deal was no exception to this.”

But this isn’t just about what works or doesn’t work to stop the boats. It is about who we are as a country and who we want to be. It is about standing up for the right to asylum, giving people a fair hearing and treating them with the dignity and humanity they deserve.

Enver Solomon is chief executive of the Refugee Council. The Guardian

The UK’s highest court ruled against Rishi Sunak’s plans to deport all illegal migrants to Rwanda (Picture: EPA)© Provided by Metro

The prime minister turned ‘foul’ with Number 10 staff after the Supreme Court struck down the government’s Rwanda migration scheme, a source has revealed.

The UK’s highest court ruled against Rishi Sunak’s plans to deport all illegal migrants to Rwanda, saying it breached at least five UK laws and four international conventions. 

This led to Mr Sunak becoming ‘furious’, despite the news inflation had halved. ‘For 46 minutes, government good news led BBC News,’ one official told The Times.

‘Then the ruling came – joy turned to despair. Confusion and chaos reigned.

‘Number 10 were firing in loads of questions to the Home Office, asking random questions on figures such as arrests and deportations.

‘They were just trying to get through the day.’

But Mr Sunak announced the government will introduce emergency legislation to get flights to Rwanda off the ground.

In a press conference on Wednesday evening, he said this new legislation will enable parliament to ‘confirm’ that ‘Rwanda is safe’ and end a ‘merry-go-round’ of legal challenges.

He added the government is working on a new international treaty with Rwanda, which will ‘provide a guarantee in law that those who are relocated from the UK to Rwanda will be protected against removal from Rwanda and it will make clear that we will bring back anyone if ordered to do so by a court’. 

It followed Mr Sunak sacking Suella Braverman as home secretary and the subsequent cabinet reshuffle, which included the surprise appointment of David Cameron as foreign secretary.

New home secretary James Cleverly confirmed the government still plans to run deportation flights to Rwanda in the future, after the Supreme Court ruled they currently cannot go ahead.

The controversial scheme forms a cornerstone of Rishi Sunak’s flagship promise to ‘stop the boats’, with ministers arguing the prospect of deportation would act as a deterrent to drive down the number of people crossing the English Channel.  By Brooke Davies, Metro

Ugandans’ century-long journey home to Ethiopia

Tensions were high in Ethiopia as the New Year began, with the country emerging from civil war and ethnic divisions running deep. But in January, surprising news brought hope: over a hundred Ugandans arrived, returning to their ancestral homeland after a century away. Their journey began with a drought a hundred years prior, which forced their forefathers to flee – but now a vision called them home.

A century ago, the small Nyangatom village in southern Ethiopia’s Omo River valley faced devastation as the longest drought crippled their pastoralist community. Facing starvation and death, the elders made the fateful decision to migrate east, crossing into Uganda to escape the drought.

There, they adapted, taking up farming to survive in their new land. But memories of their origin remained.

 

Each harvest, the elders would gather the young and recite the tale of their people – of the “blessed sky” and soil they left behind. Many longed to see their beloved country one final time. According to community leader Vincent Ocen (Pastor), “Our elder received a vision that the time had come to return home.”

And so, in January, over one hundred Ugandans of Nyangatom descent arrived back on Ethiopian shores.

The Foreign Ministry announced their arrival, sparking public intrigue – rumors swirled they were fleeing an apocalyptic prophecy. Uganda police launched an investigation into why so many would suddenly depart. 

But for these returnees, home was not a place to flee doom, but a place to find peace after a century-long journey caused by forces outside their control.

Vincent refuted earlier speculation, stating “We are Ethiopians. Our ancestors were from Nyangatom. Our parents raised us telling us our origin is here and that we should always remember.”

“Many had passed longing to see their homeland once more, begging on their deathbeds to be buried in their ancestral soil,” the Pastor says. “So we did not come, we simply returned home.”

Last January, 372 people from eastern Uganda’s Turkana community made the journey to return. For three months they stayed at Light of Life Church in Nyangatom, welcomed by John Aticho (Pastor). “We discussed housing them long-term with the local government and community,” he explained. The residents agreed to provide land so the returnees could contribute permanently.

“A while back, there was a road construction and near to it was the camp where the workers were stationed. After 3 months of accommodations within the church compound we moved them to the old camp site,” John said.

He says the move to house them long-term was carried out after discussions were held with the “Narwe” kebelle residents (where the camp and the church is located in) and the Nyangatom Woreda authorities. It was then agreed to provide land so the returnees could contribute to community permanently.

Language and culture foster close ties between communities and also smooth the transition. “We have the same culture and have almost the same language. They understand and speak Nyangatom at about 75 percent,” said a local resident, noting they descend from the same clan scattered across Ethiopia, South Sudan, Kenya and Uganda.

The Intergovernmental Authority on Development registered the area as Karamoja Cluster – land straddling about 8,382 km of border area touching eight countries and peoples. While this cross-border area holds 13 pastoralist and agro-pastoralist communities, seven to eight groups reside in Uganda, one has now resettled in Ethiopia.

Pastor Vincent leads the 372 who began in Turkana. “It was not a simple decision,” he stated. “We planned how to reach Nyangatom safely, where we could live, and affordable travel for all.” The returnees sold possessions for one-way tickets home. Security along the journey posed difficulties as well, as conflicts sometimes erupt on the route.

“Traveling was not easy. We didn’t do it at a snap of our fingers,” he stated. “Right after we decided to come back we had to figure out how we would reach Nyangatom, where we could reside and even explore safe and affordable ways for all of us to travel.”

The people had sold their properties and their belongings to have a one-way ticket to home. The leader explained that the issue of road security was another matter they had to consider, as conflicts sometimes erupt on the route.

To facilitate the different needs of the 13 communities, IGAD established the Karamoja Cross-Border Development Facilitation Unit (CBDFU). Considering the Cluster as one ecological zone, the Authority states that its development is best achieved through a consolidated development plan introducing cross-border cooperation and an institutional framework.

The CBDFU will focus on four key intervention areas to unify the region. This includes cross-border dialogues to resolve pending issues, developing community-driven projects, supporting programming and policy dialogues, and promoting rural growth, conflict prevention, and partnership-building.

The community who relocated from Uganda have found acceptance in Ethiopia’s Narwe kebelle, providing Identification cards. “We are Ethiopians. We had early discussions with the Nyangatom Woreda authorities and Ministry of Foreign Affairs, who believed us,” said Pastor Vincent.

The returnees have taken up farming, although residents remain mostly pastoralist

Upon receiving their land, the returnees preferred agriculture. “It was our primary livelihood in Uganda, what we learned there and brought back home,” explains Pastor Vincent.

Community leader said, “We are plowing the land and working to establish a permanent irrigation system. We are doing the things you do when you are home.”

The CBDFU aims to foster sustainable development and regional stability by overcoming boundaries and better coordinating grassroots initiatives across the Karamoja cluster. Time will tell if this new collaborative approach can truly unite disparate communities as “one ecological zone.”

The resettled Ugandans of Nyangatom descents are putting down roots in their ancestral land once more through community and agriculture: shared roots and heritage can still call estranged peoples home. By Nardos Yoseph, The Reporter

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