Agriculture in Africa: How far, how well?

Foreign investors eye Ugandan mines and food

Foreign investors are keenly pursuing opportunities in the small East African nation of Uganda in the fields of mining and agro-processing. Key among these are the Qatari and Chinese.

Qatari investors visit Kampala

Last week saw a contingent of Qatari investors arrive in Kampala, the capital city of Uganda, to seek out possible mining and agro-processing investment opportunities. The delegation included Qatari government officials and businesspeople, and was led by Sheikh Faisal Bin Saoud Al Thani, a member of the ruling family of the United Arab Emirates.

The delegation visited the Uganda Investment Authority (UIA), a parastatal organisation established in 1991, where they met with the organisation’s Executive Director Dr Frank Sebbowa. The two parties discussed investment proposals that had previously been set forth by the UIA in partnership with the Ministry of Foreign Affairs by way of Uganda’s Embassy in Saudi Arabia.

Key attendees at this meeting included representatives from the Business Development Department of the Kingdom of Qatar, the Qatari Ministry of Economy and Commerce, state-owned Qatar Petroleum, Hassad Food, and Qatar Mining (QM), the latter of which seeks out sources of raw material to fuel local industry. Ms Amina Herse, the Somali tycoon with several multi-million dollar projects in Kampala, also attended the meeting.

$620 million Chinese investment moving ahead

The final hurdle to development of the Guangzhou Dongsong Energy Group’s plan to build a phosphate fertiliser deposit in the east of the country was the issue of community displacement, and the Ugandan Government has recently overcome this by paying compensation to those who will be relocated. The Dongsong Group has therefore received the green flag to begin development.

The site under question is in the Sukulu mining area, and is believed to house 230 million tons of phosphate. Dongsong will undertake to deliver 300,00 metric tons of phosphate annually, as well as 200,00 metric tons of sulphuric acid.

The fertiliser is sorely needed by local farmers as well as those in the other East African Community countries (Kenya, Tanzania, Rwanda and Burundi) as they currently rely heavily on imported fertiliser, which is prohibitively expensive for small-scale farmers. According to the International Food Policy Research Institute, corn yields in Uganda are low in large part due to the poor quality of the soil.

Government to revise mining laws

The Ministry of Energy and Mineral Development recently announced its intention to review the existing mining laws, as these were established in 2001 and institutionalised in the Mining Act of 2003.

Fred Kabagambe-Kaliisa, Permanent Secretary of the Ministry of Energy and Mineral Development, said last month during a three-day mining workshop in Kampala that globalisation has opened the country’s doors to potential new investors interested in exploration and mining development in the country. The secretary also pointed out that, in light of the global financial crisis, Uganda needs to do everything it can to draw as much of the limited international capital pool within its own border, and “it is [therefore] imperative to review the current legal regime that shall be able to attract and respond to the demands of the foreign investor”.

Explaining that laws other than those directly impacting mining also affect investment decisions, Kabagambe-Kaliisa said, “It is for this reason that this review not only focused on the provisions of the Mining Act 2003 but also the land laws, and tax laws in Uganda that directly impact on the development of the country’s mineral sector.”

David Okwara

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