Tanzania: Magufuli, Museveni in Key Business Meeting

Dar/Kampala — President John Magufuli and his Ugandan counterpart Yoweri Museveni are today set to address a joint business forum by traders from the two countries, as they look to boost bilateral relations.

Some 1,460 delegates had registered by last night to participate in the two day forum to be held in Dar es Salaam.

Ugandan High Commissioner to Tanzania Richard Kabonero confirmed 312 Ugandan businessmen were registered to participate.

High cost of doing business, non-tax trade barriers and mistrust by authorities of the private sector are among issues to be discussed.

"We are determined to push the private sector to take a lead in our economic development and this forum will tackle some of the challenges that inhibit trade," said Mr Kabonero.

The forum will start with an exhibition by the traders before going into panel presentations on areas such as the extraction industry value addition, investment climate and the cost of doing business. Trade volumes between the two countries rose from Tsh178bn in 2015 to Tsh359bn last year, according to President Magufuli.

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Meanwhile the forum has come at a time when Uganda is trying to respond to a reported decision by French oil giant, Total, to withdraw from the proposed $3.6 billion East African Crude Oil Pipeline (EACOP).

Government sources in Uganda told Daily Monitor that President Museveni and President Magufuli would chart the way forward on the project on the sidelines of the Tanzania-Uganda Business Forum.

Earlier on Wednesday, Ugandan High Commissioner to Tanzania Richard Kabonero told The Citizen that the matter would be part of the agenda for a ministerial meeting in Dar es Salaam yesterday.

"I don't know the status (Of EACOP) but we are going to discuss that tomorrow (yesterday) during the ministerial meeting between the two countries," he said in a telephone interview.

Efforts by The Citizen to get comment from Tanzanian authorities since Wednesday were futile. Investment minister Angela Kairuki yesterday declined to comment when reached on phone, instead asking that all queries on the project be directed to the minister for energy who was unavailable.

Recently, President Magufuli appealed to Tanzanian and Ugandan ministries overseeing the construction of the more than 1,400 kilometres Hoima-Tanga oil pipeline to urgently clear pending issues that had stalled project.

The Uganda sources said the two would discuss an urgent response to Friday's Total E&P, the lead developer on EACOP, to "decommission" both activities and staff on the project. The firm cited "uncertain business" environment in Uganda following a collapse last week of a deal for Tullow Oil Company to sell its stakes to Total and China National Offshore Oil Company (Cnooc), technically referred to as a farm-down.

Total E&P, which rooted for the Tanzanian route as choice for the pipeline, established Total East Africa Midstream B.V. as the interim developer for the crude oil export pipeline from Hoima in mid-western Uganda to Tanga Port at the Indian Ocean in Tanzania.

President Museveni, according to the Ugandan officials, is expected to furnish his counterpart with the details of the latest developments on Uganda side in regard to the continuity of the oil pipeline.

Uganda's Energy ministry Permanent Secretary Robert Kasande neither denied nor confirmed the meeting. He said: "There is a meeting taking place this week between Uganda and Tanzania and all projects we are working on together [are] on the agenda."

The decommissioning of activities and staff on the oil pipeline project is as a result of the ongoing standoff between the Ugandan government and the joint venture partners/oil companies; Total E&P, Tullow Oil, and Cnooc, over a list of demands and objections by both sides.

The stalemate climaxed last Thursday with the collapse of Tullow Oil firm's deal to sell 21.5 per cent of its stake in Uganda to Total E&P and Cnooc, after the Sale and Purchase Agreements of the transaction expired on the same day.

Chief among the objections is the tax bill of $185m which President Museveni, riding on advice tendered by technocrats in Uganda Revenue Authority and Petroleum Authority of Uganda, has insisted the oil companies must pay.

This is besides the Capital Gains Tax of $167m assessed on an earlier Tullow sales transaction. The oil companies initially contested the liability, but later capitulated.

The back-to-back developments, including collapse of the farm-down deal and suspension of activities on the pipeline, is a major sets back to Uganda's revised 2023 oil production time line.

The news is also a heart break to service providers, including those in Tanzania.

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