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review your mission statement
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the more goals, the more difficult the task becomes
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FTP files
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by audience type
marketing
by subject




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Website usability is critical to converting surfers to customers. Usability is a measure of how easily a surfer can "work" your site. The easier your site works, the more likely you'll make a sale
Don’t advertise other products or companies unless it meets your goal, generates revenue or helps your audience

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test

Fisheries: Urgent action needed on overfishing, pollution and climate change

ROME, 9 June 2014

ROME, 9 June 2014 / PRNewswire Africa / - FAO Director-General José Graziano da Silva opened a meeting of the world's only inter-governmental forum on fisheries and aquaculture issues, calling for urgent action to address climate change and other threats to sustainable fisheries and fish stocks.

FAO's Committee on Fisheries (COFI) opened its 9-13 June session to address a range of issues related to the long-term well-being of marine and inland fisheries and aquaculture and potential action by governments, regional fishery bodies, NGOs, fish workers and other actors in the international community.

Saying that fisheries and aquaculture make a "central contribution to food security and nutrition," Graziano da Silva added that sustainable development in the world's island and coastal states was especially dependent on the "vitality of oceans and fish stocks."

"Overfishing, pollution and climate change are putting this vitality at risk. The impacts are already evident. And the world's poor, in rural and coastal areas, are among the most affected," said Graziano da Silva.

"I want to stress the urgency of individual and collective action to address climate change, one of the most pressing challenges the world faces today," he said, adding that FAO was making it a priority in its work to improve sustainable development through its Blue Growth Initiative.

The Director-General pointed out that fisheries and aquaculture were the sources of 17 percent of the animal protein consumed in the world and up to 50 percent in some Small Island Developing States (SIDS) and Asian countries. They were also central to the livelihoods of some of the most vulnerable families in the world.

"The livelihoods of 12 percent of the world's population depend on this sector. In particular, small-scale fisheries are the source of employment for more than 90 percent of the world's capture fishers and fish workers, about half of whom are women," he said.

"At the same time that small-scale fishers supply most of the fish consumed in the developing world, many of their families are food-insecure themselves. This is a paradox that we are working together to overcome," he said, stressing that small-scale fishers were an integral part of efforts to improve sustainability and food security.

International forum

The Director-General joined Johan Williams, Chairperson of COFI's 31st Session, in welcoming ministers in charge of fisheries or agriculture and rural development from Algeria, Bangladesh, Brazil, the Republic of Guinea, Indonesia, Mali and Sri Lanka. Participants also included vice-ministers, deputy ministers and state ministers from Azerbaijan, Ghana, Guatemala, Honduras, the Islamic Republic of Iran, the Maldives, Namibia, Peru, Saudi Arabia and Yemen.

Among other issues, participants were to consider endorsement of two key sets of voluntary guidelines designed to improve sustainability and responsible fisheries conduct, respectively: the Voluntary Guidelines for Securing Sustainable Small-scale Fisheries and the Voluntary Guidelines for Flag State Performance.

They were also to discuss progress in the implementation of the landmark Code of Conduct for Responsible Fisheries and related instruments for international cooperation on fisheries. SOURCE Food and Agriculture Organization of the United Nations (FAO)

Norway and FAO to launch state-of-the-art research vessel

PR Newswire

ROME, 9 June 2014

ROME, 9 June 2014 / PRNewswire Africa / - Norway is to build one of the most advanced research vessels in the world as part of an ongoing project with the Food and Agriculture Organization of the United Nations (FAO) to support developing countries improve the management of their fisheries.

The new $80 million research vessel Dr Fridtjof Nansen will replace an older craft of the same name that has been navigating the coast of Africa since 1993, carrying out in-depth research into the state of the continent's marine ecosystems for the EAF-Nansen Project, the latest phase of a unique 40-year programme (see box right).

The project works with 32 coastal countries in Africa to help them obtain detailed information on their marine resources so that they can develop fisheries management plans, with a focus on maintaining ecosystem health and productivity.

Scientists from the Norwegian Institute of Marine Research (IMR) and participating African countries aboard the boat use 3D imagery to map the seabed and gather vast quantities of data on fish stocks, water and sediment quality, surveying the entire ecosystem from seabirds to fish and from whales to minute plants (phytoplankton) and animals (zooplankton).

"What makes this project unique is that developing countries take ownership of the information collected," said EAF-Nansen Project Coordinator Kwame Koranteng. "The overall goal is to enable countries to make their own assessments and prepare and implement fisheries management plans, which are critical for marine resources threatened by overfishing, pollution and climate change."

In coming years the project will extend its efforts to focus on the impacts of climate change and pollution, including environmental monitoring on offshore oil and gas mining activities.

"We hope the project will contribute, among other things, to answering the key question of how climate change will affect the distribution and abundance of marine species, which is a critical issue for the livelihoods of millions of people," said Árni M. Mathiesen, FAO Assistant Director-General for Fisheries and Aquaculture.

Funded by the Norwegian Agency for Development Cooperation (Norad), the project is run by FAO with the scientific support of IMR, and collaborates with national and regional institutions and other UN agencies.

State-of-the-art equipment

Life aboard the Dr Fridtjof Nansen can be tough, with activities carried out 24 hours a day in six hour shifts – from trawling and collecting samples to recording and analyzing data.

But conditions will improve with the new vessel, which at 70 metres long will be more spacious and even better equipped, with berths for 45 scientists, technicians and crew.

Expected to launch in 2016, the vessel will house seven laboratories, an auditorium, the latest sonar equipment to map fish distribution and a remotely-operated underwater vehicle to take vivid pictures of life on the ocean floor.

State-of-the-art equipment including a dynamic positioning system will enable it to work safely around sensitive infrastructure such as oil rigs, while a lookout compartment will be positioned on the main mast for surveys of seabirds and marine mammals.

Success stories

As a direct result of the project and with technical guidance from FAO, 16 countries in Africa have developed management plans for their fisheries.

These include Benin, Côte d'Ivoire, Ghana and Togo, which have collaborated to prepare plans to minimize damage caused by beach seine fisheries in their respective countries and in the sub-region, and Cameroon, Gabon and Nigeria, which have similarly worked on industrial shrimp fisheries in coastal Middle Africa.

On the other side of the continent, countries working on fisheries management plans include Comoros, Kenya, Madagascar, Mauritius, Mozambique, Seychelles and Tanzania.

The next step is to help countries to implement their management plans, said Koranteng. "The presence of the R/V Dr Fridtjof Nansen in the waters of developing countries has resulted in greater understanding of the need to manage marine resources sustainably and also provides a common language with which people are able to communicate at a regional and often a global level," he said.

Thorough surveys of marine life have resulted in an additional benefit: the discovery of new species. In recent years, scientists have found a new goatfish, named Parupeneus nansen, discovered off coast of Mozambique, and six new species of marine snail found off the Gulf of Guinea.SOURCE Food and Agriculture Organization of the United Nations (FAO)

International Festival of Business (IFB) is underway in London

LONDON, 9 June 2014

LONDON, 9 June 2014 / PRNewswire Africa / - African businesses will be promoting sector opportunities to UK industry from 10-12 June.

The International Festival of Business (IFB) , taking place from 9 June to 22 July in Liverpool, will be the UK's most significant international showcase and the biggest concentration of business events globally in 2014. Attracting more than 250,000 visitors from more than 100 countries, including those in Africa, it will facilitate new business-to-business relationships and international trading opportunities.

UK Trade & Investment (UKTI) has partnered with IFB to deliver a British Business Embassy showcasing the best of Britain and key bilateral trade & investment opportunities in advanced and innovative manufacturing. African businesses will also be promoting sector opportunities to UK industry from 10-12 June.

SOURCE UK Foreign & Commonwealth Office

AfDB supports Benin to mobilise resources for the 2014-2018 investment programme

TUNIS-BELVEDERE, Tunisia, 10 June 2014 / PRNewswire Africa / - On June 9, 2014, the President of Benin, Boni Yayi, paid a working visit to the African Development Bank (AfDB) in Tunis, where he met AfDB President Donald Kaberuka and members of the management team. Discussions focused on AfDB participation and support at the roundtable to be held in Paris from June 17 to 19, 2014 on the funding of development projects in Benin.

The Paris meeting aims to mobilise 2,900 billion CFA francs (approximately US $6 billion), needed for the country's development investment programme for the period 2014-2018. The goal is to support the economy of Benin in its quest for strong growth and job creation. The total cost of the investment plan is 7,950 billion CFA francs (approx. US $16 billion).

"The transformation of the Beninese economy will be through infrastructure, energy, education and health. Benin cannot go to this roundtable without AfDB," said Yayi, noting that he had come to Tunis to formalise AfDB's invitation.

Vital networks for the economy

During discussions, the Beninese delegation presented key projects in the areas of transport, energy, tourism, agriculture and health. It placed particular emphasis on the importance of road infrastructure, stressing the need for funding for the route through the city of Parakou and the Burkina Faso–Benin cotton road. "These two road networks are vital to the Beninese economy," said Benin Development Minister and AfDB Governor Marcel de Souza.

Yayi said he was delighted at the cooperation with AfDB and at the major contribution the Bank was making towards his country's transformation. As evidence of this he mentioned the significant portfolio of 266 million Units of Account (approximately US $410 million) in key sectors. "For AfDB projects to fully meet their objectives, in terms of improving beneficiaries' living conditions, we are committing ourselves here to take control of the governance of projects."

In welcoming this commitment by President Boni Yayi, Kaberuka commended the roundtable initiative and the relevance of the proposed investment programme. The AfDB President also underlined the Bank's commitment to supporting development investment and further promoting non-sovereign loans with private investors in Benin. "The AfDB will be present at the roundtable and will contribute to its full success, to secure tangible results," he added.

Strong, sustainable growth

The Beninese Government estimates that the country will now have to optimise its new economic assets to secure strong, sustainable and inclusive growth by 2018. "The recent underground survey of Benin revealed significant oil deposits and mineral resources. And our country has valleys that are sufficiently well watered to ensure not only Benin's food security but that of its neighbouring countries as well,"said Minister de Souza.

The AfDB contribution to the funding sought – 2,900 billion CFA francs – will essentially come from the African Development Fund (ADF) and the AfDB private sector funding arm.

Cooperation between AfDB and Benin goes back to 1972. Since then, funding by AfDB has amounted to more than 550 billion CFA francs (approximately US $1,140 billion) in the areas of transport, agriculture, social policy, electricity, water and sanitation, finance, industry and other multi-sectoral operations.

SOURCE African Development Bank (AfDB)

Uganda Budget 2014/2015

12th June 2014 Final Budget Speech FY 2014/15
THE REPUBLIC OF UGANDA
BUDGET SPEECH
Financial Year 2014/15
Theme: Maintaining the Momentum: Infrastructure Investment for Growth and
Social Economic Transformation
DELIVERED AT THE MEETING OF THE 4th SESSION OF THE 9TH PARLIAMENT
OF UGANDA
ON
THURSDAY, 12TH JUNE, 2014
BY
HONOURABLE MARIA KIWANUKA
MINISTER OF FINANCE, PLANNING AND ECONOMIC DEVELOPMENT
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12th June 2014 Final Budget Speech FY 2014/15
PREAMBLE
Your Excellency the President,
Your Excellency the Vice President,
Right Honourable Speaker of Parliament,
His Lordship the Chief Justice,
Right Hon. Deputy Speaker of Parliament,
Right Hon. Prime Minister,
Right Hon. Leader of the Opposition
Honourable Ministers,
Honourable Members of Parliament,
Distinguished Guests,
Ladies and Gentlemen
I. INTRODUCTION
1. In accordance with Article 155(1) of our Constitution and in exercise
of the powers delegated to me by H.E the President, I have the
honour to present the Government Revenue and Expenditure
Proposals for the FY 2014/15.
2. I beg to move that Parliament resolves itself into a Committee of
Supply to consider:
i. The Revised Revenue and Expenditure Estimates for the
Financial Year 2013/2014; and
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12th June 2014 Final Budget Speech FY 2014/15
ii. Proposals for the Estimates of Revenue and Expenditure for
the Financial Year 2014/2015.
3. Madam Speaker, despite challenges including the aftermath of the
global economic crisis, the Government has achieved significant
milestones in the socio-economic transformation journey over recent
years. These include the following:-
i. The proportion of people living below the poverty line has
declined from 56.4 percent in 1992/3 to 24% in 2009, and
further to 19.7 percent in 2012/13. This indicates that our
country has already surpassed the Millennium Development
Goal (MDG) target of halving the proportion of its population
living in extreme poverty by 2015. This is the first and most
significant MDG.
ii. An improvement in the quality and stock of physical
infrastructure with 830 km of new roads constructed; 1,630
kilometers of transmission lines were laid; and over 42,000 new
rural users were connected to the national grid.
iii. Increased quality and access to social services like education,
water and health; and
iv. An overall improved business and economic environment.
4. The challenge going forward is to ensure that we sustain this
inclusive growth trajectory towards true socio-economic
transformation. This year's Budget is a continuation of our long
journey towards creating a better Uganda for people today and future
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12th June 2014 Final Budget Speech FY 2014/15
generations. The theme for the FY 2014/15 budget is therefore
"Maintaining the Momentum: Infrastructure Investment for
Growth and Socio-Economic Transformation." It will focus on
implementing key development priorities over the next year within
existing resource constraints, continue to narrow the infrastructure
gap, while promoting economic productivity and diversification for
better job creation to satisfy Ugandans.
5. I wish to extend thanks to H.E. the President for continued guidance
in the entire budget process, my Cabinet Colleagues, Members of
Parliament, our Development Partners, Civil Society and the Uganda
people for the time dedicated to scrutinise the budget proposals and
the valuable input towards finalising the forthcoming year's budget.
This was a truly consultative budget process.
II. ECONOMIC PERFORMANCE AND OUTLOOK FOR FY 2014/15
A.MACRO-ECONOMIC PERFORMANCE AND OUTLOOK
Real GDP growth
6. Madam Speaker, Uganda's economy continued to grow through
Financial Year 2013/14 albeit more modestly than the 6.2% that was
projected year ago. This was a result of a slow-down in performance
by the manufacturing, construction, telecommunication and financial
services sub-sectors. Meanwhile the ongoing unrest in the region
reduced our export and remittance proceeds, and the last stages of the
global crisis effects were played out on the world stage towards a
new equilibrium.
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12th June 2014 Final Budget Speech FY 2014/15
7. Although the estimated growth has been less than expected it still
represents a credible performance by our economy, and is higher
than the average growth achieved by the non-oil producing countries
in sub Saharan Africa, estimated at 5.3 percent in 2013.
8. During next fiscal year, real GDP growth is projected at 6.1 per cent.
Cash crops production, manufacturing, mining and quarrying,
increased electricity production, and transport and communication
are projected to be the major drivers of growth. Government's
medium term objective is to restore real GDP growth to 7 percent per
annum. This is the minimum level of growth that can achieve socioeconomic
transformation. This will require continued
implementation of sound macro-economic policies, implementation
of financial sector reforms and the acceleration of the intervention
required in removing bottlenecks to private sector development and
competitiveness.
Annual Inflation
9. Madam Speaker, inflation has remained low this year and dropped to
5.4% by May 2014. Annual core inflation declined to 3.3% as of
end-May 2014. The slowdown in price increases followed a
reduction in food prices resulting from drought in the first half of this
financial year. The price increases were contained by coordinated
prudent fiscal and monetary policy management. Maintaining low
inflation continues to be a key objective of Government's
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12th June 2014 Final Budget Speech FY 2014/15
macroeconomic policy in order to ensure a stable investment climate
and preserve the welfare of Ugandans.
Savings and Investment
10. Madam Speaker, Government long term objective is to boost
domestic savings to provide long term development finance. This
will help match domestic project finance requirements to project
implementation profiles, as well as lower lending interest rates to
borrowers.
Exchange Rate
11. Madam Speaker, over the year, the exchange rate has remained
relatively stable, with the marginal appreciation of the Shilling by
about 2 percent against the US dollar. The strengthening of the
Shilling has largely been on account of strong foreign inflows from
investment portfolio inflows and foreign direct investment. This is
due to the attractive investment climate in Uganda. In addition, the
Shilling has appreciated as a result of the persistent weakness of the
US dollar on the global financial markets.
Balance of Payments
12. Madam Speaker during the year now ending, our balance of
payments (BOP) continued to be affected by the persistent current
account deficit, which has been largely financed by surpluses on the
capital and financial account. The current account has remained
weak due to a large trade deficit which is projected to widen from
US$ 2 billion last to US$ 2.46 billion by the close of the year. This is
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12th June 2014 Final Budget Speech FY 2014/15
equivalent of about 14 percent of GDP. This is mainly due to the
continued strong demand for imports, especially investment imports
and weaker than expected global and regional demand for our
exports. Whilst exports registered an improvement compared to last
financial year, performance was undermined by political unrest in the
region.
Exports
13. Madam Speaker, during the year now ending, Uganda's value of
exports of goods and services are projected to be US$ 5.4 billion.
This performance is due to the slow recovery in export demand in
Europe, and unrest in South Sudan. However, our demand for
Imports of goods and services remained robust with imports
expected to increase to US$ 7.9 billion during this fiscal year.
14. Government's medium term export strategy includes maintaining
and stable and competitive exchange rate, ensuring political stability
and undertaking investments in infrastructure to facilitate trade.
Government will also promote manufacturing and agro-processing.
Our Export Strategy will maximize demand for our products and
services above and beyond local effective demand, thereby spurring
demand for jobs here in Uganda. In the medium term, our
competitive advantage lies in agro-processing using locally-sourced
inputs and lower skilled labour, even as we train for higher value
added industries. This budget will focus on enhancing the business
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12th June 2014 Final Budget Speech FY 2014/15
environment for already existing firms and SMEs in rural areas, and
encourage productivity for existing key crops.
Foreign Exchange Reserves
15. The level of our foreign exchange reserves has slightly improved
from US$ 2.9 billion in June 2013 to US$ 3.1 billion, expected at the
end of June 2014. This is equivalent to 4.2 months of future imports
of goods and services. Government's medium term objective is to
maintain a level of foreign exchange reserves of at least five months
import cover, which adequately provides a buffer against external
shocks.
B. FISCAL SECTOR PERFORMANCE FY 2013/14
Domestic Revenues
16. Madam Speaker, net URA revenues for FY2013/14 were projected at
Shs. 8,578 billion, but collections are estimated at Shs. 8,104 billion
or 94% of the projected revenue, which represents a shortfall of
Shs.475 billion for this year. The underperformance of revenue
collections was mainly due to the lower than projected growth in the
economy, which affected particularly Value Added Tax and
Corporate Income Tax. However, in comparison to last financial
year, URA revenue collection have increased by 13.4%.
17. Madam Speaker, during next year, Government will take corrective
measures to improve revenue performance. This will include
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12th June 2014 Final Budget Speech FY 2014/15
strengthening tax revenue administration, and new tax revenue
enhancement measures. I will spell out these measures later when I
come to the tax proposals.
Domestic Financing
18. Madam Speaker, financing from the domestic financial markets for
the FY2013/14 budget amounted to Shs.1,747.8 billion, on a net
basis to supplement domestic revenues for the infrastructure
investment projects (especially roads). In the coming financial year,
net domestic financing will amount to Shs.2,539.1 billion, which
includes a drawdown of the energy fund to finance the Karuma and
Isimba hydropower projects, and reflects an additional Shs.791.3
billion over and above the approved levels in Financial Year
2013/14.
External Financing
19. Madam Speaker, development partners continue to provide critical
financial support in the development of our country, for which I
acknowledge. External financing has been directed towards areas
that we have prioritized in the implementation of our national
development objectives. Government has been able to accelerate
progress especially in infrastructure and social sectors. Together with
our development partners, we have strengthened public financial
management to eliminate wastage and corruption in the utilisation of
public resources.
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12th June 2014 Final Budget Speech FY 2014/15
20. Madam Speaker, during the year, external assistance to finance the
Budget was projected at US$ 1,028 million. It is projected that by
the end of the financial year, Government will realize just above half
of this assistance. The slow disbursement is largely attributed to low
absorption by sector ministries arising from slow implementation of
projects. Government agencies will be required to implement
projects as programmed in order for the country to fully accrue the
benefits from external assistance.
21. Madam Speaker, next financial year, US$ 1,017 million in external
support. Project support constitute US$991 million. In addition
general budget support amounting to US$ 25.7 million, excluding
debt relief, has been committed by our bilateral Development
Partners. We recognise that even though our development needs are
still substantial, Official Development Assistance (ODA) is declining
worldwide. We will work together with development partners to
ensure maximum value for money of the ODA.
Expenditure Performance
22. Madam Speaker, total expenditure during the year is projected to
amount to 19.7 percent of GDP, compared to 18.8 percent in the
previous financial year. Government expenditure, excluding Karuma
during the year is project to be Shs. 11.93 Trillion, 99.7 percent of
the planned.
Public Debt
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12th June 2014 Final Budget Speech FY 2014/15
23. The stock of public debt is projected to rise to US$ 7 billion by the
end of FY 2013/14, from US% 6.4 billion in financial year 2012/13.
US$ 4.2 billion of the debt is external and US$ 2.8 billion is
domestic. Notwithstanding the increase, our public debt remains
sustainable and Uganda is not under debt distress. Over the medium
term, the debt-to-GDP ratio is projected to peak at about 39.8 percent
of GDP. However, this level of debt excludes pipeline borrowings,
in particular for the Karuma and Isimba hydropower and the
Standard Gauge Railway projects.
24. Madam Speaker, as Government diversifies its sources of debt
financing, we will ensure our borrowing strategy remain sustainable
in line with our Public Debt Management Framework 2013. The
underlying principle will be to confine any commercial (or nearcommercial
financing to only infrastructure projects with an income
stream to ensure guaranteed repayments. Meanwhile, grants and
concessional financing will continue to finance social projects with
long term indirect benefits.
C. FINANCIAL SECTOR DEVELOPMENTS
Banking Sector
25. Madam Speaker, during the year now ending, the banking sector
remained stable and registered rapid asset growth, arising from
increased deposits and lending activity by bank customers. However,
interest rates have remained high, primarily because of high levels of
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12th June 2014 Final Budget Speech FY 2014/15
borrower risk. Profitability in the banking sector declined largely due
to non-performing assets which increased from 4% to 6.2%. The
good news is that the Central Bank reference interest rate was
reduced to 11% in June 2014, and average commercial bank lending
rates have also declined from 24.2% to 20% during the year.
26. The emergence of new mobile telephone technology and agency
banking have been key drivers of improving financial inclusion over
the year. During last year, 14 million persons utilized mobile money
services with transaction value of Shs. 18.6 trillion during the year.
In the next financial year, Government will deepen the financial
sector by accommodating alternative banking approaches including
mobile banking, agent banking, bank assurance, and Islamic
Banking. To this end, Government will present to Parliament
amendments to Financial Institutions Act 2004 (FIA) and Bank of
Uganda Act 2001, in line with international best practise.
Non-bank Financial Institutions
27. Madam Speaker, access to non-bank financial services increased
from 49 percent in 2009 to 65 percent in 2013. The effect of this was
a significant reduction in the financially excluded population from
4.3 million (i.e 30 percent of adults in 2009) to 2.6 million (i.e 15
percent of adults in 2013).
28. In order to promote savings and enhance consumer financial
protection for majority Ugandans. Cabinet approved the policy
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12th June 2014 Final Budget Speech FY 2014/15
principles for the Tier 4 Microfinance Law to regulate and supervise
the Microfinance institutions including SACCOs and money lenders.
The Bill will be presented to Parliament in the coming financial year.
Deepening Financial Markets
a. Retirement Benefits Sector
29. Madam Speaker, Government is making progress in reforming the
retirement benefits sector to improve savings in the economy, protect
savings of workers, and restore trust in the retirement benefits
system. The framework for regulating and providing oversight of the
sector is now fully operational. Government has liberalised the
pension sector to allow workers to have a choice in the pension
schemes they contribute to, the form of benefit payments and in
terms of annuity or lump-sum; while ensuring maximum safety of
their savings.
b. Capital Markets
30. Madam Speaker, during the year the stock market registered a record
turnover of Shs. 198 billion up from Ushs 31 billion recorded in
2012. Capital assets under professional management grew to over
Shs 800 billion by the end of 2013. This growth has mainly been
driven by the recent reforms in the pensions sector that have
encouraged more occupational pension funds to outsource
investment management to licensed professional fund managers.
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12th June 2014 Final Budget Speech FY 2014/15
31. Capital markets development is critical to attain long term
sustainable economic growth, because it plays a major role in the
mobilization of domestic resources and promoting investment. There
are currently only 40,000 registered shareholders in Uganda. Public
awareness will be stepped up in order to draw many more Ugandans
into the formal savings sector, thereby increasing investment
opportunities. This will lead to an increased level of domestic
savings, which is currently estimated at only 10% of GDP. During
the next financial year, we intend to reach an additional 20,000
potential investors in the securities market, through a focused capital
markets development campaign.
32. Government will amend the Capital Markets Authority (CMA) Act
in order to provide for a greater diversity of financing opportunities,
and to facilitate movement of capital across the East African region
in line with the EAC Common Market protocol.
c. Insurance Sector
33. Madam Speaker, during the year, gross insurance premiums rose to
Shs 457 billion, representing a 30% annual growth. Agricultural
insurance products were offered for the first time and currently 8
insurance companies are underwriting agricultural related policies.
The first ever re-insurance company, Uganda Reinsurance Company
Ltd, was licensed to underwrite risks locally and reduce on the
amount of premiums issued outside Uganda.
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12th June 2014 Final Budget Speech FY 2014/15
Anti-Money Laundering
34. During the FY 2013/14 the Anti-Money Laundering Act was passed.
This demonstrates our clear commitment to fight money laundering
and the financing of terrorism. During FY 2014/15 the Financial
Intelligence Authority will be operationalized and begin to conduct
financial sector surveillance in order to secure all international
financial transactions and insure that they occur in compliance with
the Anti-money laundering Act.
Public Private Partnerships
35. Madam Speaker, Government will use Public-Private Partnerships
(PPPs) as an important option for delivering public infrastructure
projects and services. The Public Private Partnership Bill 2012 that
supports PPP regulation is before Parliament, and I appeal for its
expeditious enactment. The law will provide the regulatory
framework for the institutional arrangements and monitoring the
implementation of PPP projects throughout the country.
36. Madam Speaker, PPPs if not well regulated, increase contingent
liabilities and fiscal obligations on the public. Contingent liabilities
create the possibility that Government may be required at some
future date to make unexpected and substantial payments. In this
respect, Government is will track and monitor PPP projects in order
to mitigate any future fiscal risks by establishing a robust PPP fiscal
risk management framework. In accordance with reporting and
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12th June 2014 Final Budget Speech FY 2014/15
disclosure principles of Public Sector Management, the PPP Project
contingent liabilities currently stand at Shs 169 billion or 0.27% of
GDP.
III. BUDGET STRATEGY FOR FY 2014/15
37. Madam Speaker, in the next financial year, Government's budget
strategy is built on four key inter-linked interventions. These
interventions are :-
i. Improving the Business Climate by undertaking key economic
infrastructure investments, while maintaining peace, security,
and macro-economic stability;
ii. Leveraging Government assistance Agriculture, Agribusiness,
Agro-processing, Tourism, Industry and Services such as ICT;
iii. Improving the Productivity of Uganda's Human Resource by
enhancing the provision of quality education, health and water
services; and
iv. Strengthening Institutional Governance, Accountability and
Transparency.
38. Madam Speaker, this budget strategy will lead to faster economic
growth and higher employment levels; acceleration in growth of per
capita incomes and sustained poverty reduction. The strategy also
ensures that Government facilitates the private sector by
implementing measures that improve efficiency and lower the cost of
doing business.
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12th June 2014 Final Budget Speech FY 2014/15
A. IMPROVING UGANDA'S BUSINESS CLIMATE
39. Madam Speaker, the budget strategy to improve Uganda's business
climate will focus on inter-linked actions that reduce the cost of
doing business. I will later elaborate on each of the sectoral actions
to improve the business environment as part of next year's sector
priorities.
Business Environment
40. Madam Speaker, Uganda ranks among the top 10 recipients of
foreign direct investment (FDI) in sub-Saharan Africa. Investment
opportunities in infrastructure development, oil and gas, agriculture,
mining and telecommunication are supported by sustained political
stability and the macro-economic environment.
41. In the next financial year 37 licenses will be abolished and
amendments to laws affecting 307 licenses will be completed. I wish
to also appeal to Parliament to expedite consideration and enactment
of the Investment Code (Amendment) Bill, the Counterfeit Bill and
the Public Private Partnerships Bill to further facilitate the business
climate and encourage investment.
42. The Uganda Investment Authority and the Uganda Registration
Services Bureau will be transformed into one-stop centers to
efficiently facilitate investors and quicken business registration.
Company Registration online will also be launched to speed-up
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12th June 2014 Final Budget Speech FY 2014/15
registration. Government will reduce the burden of multiple data
requirements for business start-ups, by use of information collected
at business registration for taxation and licensing.
43. Madam Speaker, in the next year, Government will roll-out the
National Land Information System from 6 zones to 21 land offices,
thereby significantly reducing the time and cost of undertaking land
transactions, and enhancing the security of land registration. This
will reduce fraud and corruption related to transfer and titling of
land.
Regional Integration
44. Madam Speaker, key interventions that have been implemented
under the East African Community include implementation of the
Customs Union, Common market and Monetary Union protocols.
EAC partner states are now undertaking common infrastructure
investments and reducing non-tariff barriers. By removing road
blocks, weigh bridges, and multiple bonds, the number of days it
takes a container from Mombasa to Kampala has been reduced from
18 to a maximum of 4, and to Kigali from 22 to a maximum of 7. A
Single Entry East African Tourist Visa, and Common Payment
system has also been introduced. In addition, the EAC Monetary
Union Protocol which was signed in November 2013 is undergoing
ratification in all partner states.
Science, Innovation and Industrialization
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12th June 2014 Final Budget Speech FY 2014/15
45.Madam Speaker, during the year now ending, Government has
continued to build infrastructure to ensure serviced industrial and
business parks have water, roads and power. Specific focus attention
has been placed on making the Luzira, Soroti, and Namanve
Industrial Business Parks operable.
46.Madam Speaker, in the next year, Government will enhance support
to industrial research institutions in order to develop and
commercialise technology innovations..
Financial Inclusion
47.Madam Speaker, the budget strategy will deepen the financial sector
to facilitate the availability of affordable credit for the private sector,
including agricultural and SMEs. Government has prioritized the
promotion of financial literacy to sensitize potential beneficiaries
about new products such as crop insurance, and stimulate domestic
capital mobilisation through investment clubs.
B. ENHANCING PRODUCTIVE EMPLOYMENT
Employment
48.Madam Speaker, as Uganda celebrates progress with the MDG's our
work force is growing due to better life expectancy and social service
delivery. Their pathway to stable value-added employment is our
economy's opportunity but also our challenge. SMEs are critical in
creating jobs and mobilizing the informal and rural economic
activity. It is important to note that SMEs span the whole economy
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12th June 2014 Final Budget Speech FY 2014/15
including artisans, health services, schools, entertainment tourism,
ICT agriculture and agriculture to name but a few. The two main
constraint to job creation from increased SME activity are the lack of
knowledge skills transfer; and inadequate availability of affordable
credit for viable and 'bankable' projects on a sustainable basis.
Stable value added employment will be achieved in the medium
term, within the following framework:
i. enhanced life expectancy, as depicted by progress on the
MDG's;
ii. significant opportunities presented by agriculture and
agribusiness; and
iii. emphasis on a holistic approach encompassing increased
formal employment, higher staff productivity, contract farming
and support to SMEs , both formal and informal.
49. Government's task remains how to facilitate productivity and
encourage the private sector to create jobs. Government agencies will
implementation and integrated strategy focusing on the commodity
chain, to undertake the following interventions:-
i. Curriculum reform to enhance market orientation and private
sector entrepreneurship;
ii. Implement the Skilling Uganda initiative in the Business,
Technical and Vocational Education Training with an emphasis
on provision of hands on technical skills training, business
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12th June 2014 Final Budget Speech FY 2014/15
skills development, and re-orienting the mind-set of potential
entrepreneurs
iii. Enhancing Financial Literacy and Inclusion,
IV. REVENUE AND EXPENDITURE FRAMEWORK FOR FINANCIAL YEAR
2014/15
50. Madam Speaker, the revenue and expenditure framework for the
Financial Year 2014/15 Budget has been developed in line with the
recent trends in the domestic, regional and international economy.
Next financial year, total resource inflows are projected to amount
to Shs 15,054 billion. Domestic sources will contribute Shs 12,321
billion representing 81.8% of the total budget resource for the year.
The Uganda Revenue Authority will collect taxes amounting to Shs
9,577 billion; and Non-Tax Revenues of U. Shs 206 billion will be
collected. The Budget will also be financed by issuing Government
securities worth Shs 1,437 billion on domestic markets; and net
Government drawdown from our savings of Shs 1,102 billion.
51. Total external financing of the Budget will amount to Ushs 2,733
billion, equivalent to 18.2 per cent of the total budget resources.
Budget support comprises of Shs 69 billion while Project aid
amounts to Shs. 2,664 billion, an increase of Shs. 116.3 billion
over the financial year now ending.
52. The resources available to finance discretionary Government
expenditure next year, therefore amount to Shs 11,088 billion,
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12th June 2014 Final Budget Speech FY 2014/15
excluding project aid, public debt and other statutory obligations,
which amount to Shs 3,966 billion. The total resources available
for discretionary Government expenditure next financial year
represent an additional Shs 1,546 billion above the approved level
for the year now ending.
V. SECTOR PERFORMANCE FOR FY 2013/14 AND PRIORITIES FOR FY
2014/15
53. Madam Speaker, in order for a detailed report on sector performance
over the last year, the Background to the Budget for Financial Year
2014/15 has endeavoured to cover the performance of all sectors
comprehensively. I will therefore only highlight the key
achievements of the major sectors; while emphasizing the priorities
for the forthcoming year and the medium term.
54. The FY 2014/15 budget strategy is based on the following
objectives:
i. Achieve real economic growth rate of at-least 7% per annum;
ii. Keep annual consumer price inflation within single digit;
iii. Position Uganda in the context of EAC integration to ensure
competitiveness;
iv. Maintain a prudent level of foreign exchange reserves of at
least five months import cover, that can provide a buffer
against external shocks;
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12th June 2014 Final Budget Speech FY 2014/15
v. Maintain a competitive real exchange rate which can support
export growth.
55. In order to achieve these objectives, the following priorities underpin
allocations of resources in the FY 2014/15 Budget:
i. Maintenance of National Security and Defence;
ii. Infrastructure Development in Transport and Energy;
iii. Enhancement of Scientific Research, Technology and
Innovation for Industrialization, Competitiveness and
Employment creation;
iv. Enhance production and productivity in Agriculture,
Tourism, Trade and Industrial Development;
v. Human Capital and Skills Development; and
vi. Continue to strengthen Institutional Governance and Public
Service Delivery.
A. NATIONAL DEFENCE AND SECURITY
56.Madam Speaker, peace and stability remain the cornerstone for
socio-economic transformation of our country. Under the strong
leadership of H.E. the President, we have built a strong, professional,
well equipped and pro-people army and other security forces. This
has provided a peaceful, secure and politically stable environment
that gives confidence and assurance to both foreign and local
investors to consider Uganda a viable investment destination.
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12th June 2014 Final Budget Speech FY 2014/15
57. Over the financial year now ending, Government continued to
strengthen the capabilities of our armed forces and other security
agencies by the acquisition of modern security and defence
equipment and other logistical facilities, as well as the improvement
of staff welfare and training.
58. In order to facilitate the Government programme of
professionalization and equipping the security agencies, Shs 1,005.5
billion has been allocated to the security sector in the FY 2014/15
representing 7.1% of the total budget. The key priorities will be in
professional development of our forces, consolidation of peace,
promotion of defence diplomacy, resolution of conflicts, internally,
regionally and internationally and support the country's foreign
policy of peaceful co-existence and good neighbourliness.
B. INFRASTRUCTURE DEVELOPMENT
Transport Infrastructure
Roads and Bridges
59.Madam Speaker, in the financial year 2013/14, the Transport and
Works sector was allocated Shs 2,510.66bn. These resources have
been used to upgrade to gravel 264 km, rehabilitated 178km,
completed construction of six (6) new bridges, and undertaken the
routine maintenance of 10,500 km of unpaved roads. A further 1,720
km of paved roads underwent routine maintenance. The
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12th June 2014 Final Budget Speech FY 2014/15
rehabilitation of the existing Nalubale Bridge and construction of the
New Nile Bridge at Jinja have also commenced.
60.Madam Speaker, during the year, 830km of the following roads was
completed:- Nyakahita-Kazo; Kazo-Kamwenge; Fort Portal-
Bundibugyo; Mbarara-Kikagati; Malaba-Bugiri; Tororo-Mbale;
Jinja–Kamuli; Kawempe- Kafu; Mbale-Soroti; and Kampala-
Masaka. With support from the World Bank, the rehabilitation and
reconstruction of the road networks in the following Municipalities
commenced during the year:- Mbale, Jinja, Masaka, Gulu, Lira,
Arua, Mbarara, Entebbe, Soroti, Masaka, Fort Portal, Kabale,
Moroto, Tororo and Hoima. In addition, routine and periodic
maintenance for approximately 17,650 kilometres of national,
district, urban and community access roads, including an estimated
265 kilometres of roads under Kampala Capital City Authority was
carried out. Government has commenced the rehabilitation and
constructed numerous bridges across the country. These bridges are
mainly in Northern, Karamoja, Rwenzori and other areas of North
Eastern Uganda.
61.Madam Speaker, with these interventions, the proportion of the
national unpaved road network in fair to good condition is currently
at 66% while that of National Paved Road network is at 77%. Our
target is to improve the condition of these roads further to 75% and
85% respectively over the medium term.
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12th June 2014 Final Budget Speech FY 2014/15
62.Madam Speaker, in the forthcoming financial year 2014/15, I am
increasing the allocation to the Works and Transport sector to Shs
2,575.5bn. Government has targeted the upgrading from gravel to
bitumen of 200km of roads, the reconstruction of 178 km of roads,
the construction of 10 new bridges, and the rehabilitation of 7
bridges. In addition, 12,875 km of unpaved roads are scheduled for
re-grading,
63.Madam Speaker, during the forthcoming year, Government will
accelerate the construction on at least 1,700 km of the following
ongoing Road projects:- Vura-Arua-Oraba upgrade; Buteraniro -
Ntungamo – Rwentobo; Ntungamo-Kabale –Katuna; Hoima–Kaiso–
Tonya; Kampala - Mukono – Jinja; Gulu-Atiak-Nimule upgrade;
Ishaka-Kagamba; Kampala-Entebbe Expressway; Moroto–
Nakapiripirit; Kafu – Kiryandongo; Luuku – Kalangala upgrade; Fort
Portal-Kamwenge; Mbarara Bypass; Mukono-Kyetume-
Katosi/Kisoga – Nyenga; Mpigi-Maddu-Ssembabule; Kiryandongo -
Kamdini; Kamdini – Gulu; Pakwach – Nebbi; Ntungamo-Mirama
Hills; Kampala Northern Bypass upgrade; Masaka – Bukakata;
Kigumba – Bulima- Kabwoya; Olwiyo-Gulu-Kitgum - Musingo
Road; Villa Maria – Sembabule; Musita-Lumino-Busia/Majanji;
Mubende - Kakumiro – Kagadi; and Mukono - Kayunga – Njeru.
64.Madam Speaker, construction on 650 km on the following new road
projects will also commence in Financial Year 2014/15: Kabwoya –
Kyenjojo; Tirinyi - Pallisa - Kumi/Kamonkoli; Kapchorwa-Suam;
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12th June 2014 Final Budget Speech FY 2014/15
Rukungiri-Kihihi-Ishasha-Kambuga; Kihihi - Kanungu – Kambuga;
Mbale-Bubulo-Lwakhakha; Kyenjojo - Fort Portal; Ishaka - Rugazi –
Katunguru; Sironko - Namunsi – Muyembe; Nansana – Busunju; and
Mbale – Nkokonjeru.
65.Madam Speaker, I have allocated an additional Ushs 75bn to the
Uganda Road Fund to facilitate the maintenance and rehabilitation of
approximately 10,000km of national, district, urban (including
Kampala City) roads and community access roads across the country.
Government will also continue the construction and several strategic
bridges including the Mitaano Bridge in Kanungu distict as well as
the bridges destroyed by the recent floods in Kasese and other parts
of the country.
Rail
66.Madam Speaker, in the railway sub-sector, Government, in
collaboration with other Partner States within the East African
region, is scaling up efforts to revitalize the railway transport system.
The upgrade to Standard Gauge Rail of the Tororo - Kasese and
Mirama Hills to link with Kigali in Rwanda. During FY 2014/15, the
construction of an Inland Container Depot at Mukono, and the
redevelopment and upgrading of facilities at Port Bell and Jinja piers
will commence.
Energy Infrastructure
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12th June 2014 Final Budget Speech FY 2014/15
Electricity
67.Madam Speaker, during the financial year, the total national power
generation capacity increased to 852 MW. Feasibility studies have
been completed for the several small hydropower sites, totalling to
130 MW. The sites are at Kikagati, Mitano, Lubilia, Nyagak III, Siti,
Waki, Rwimi, Ndugutu, Nkusi, Nyamwamba, Nengo Bridge, Esia
and Muzizi. Construction for these projects will begin in Financial
Year 2014/15, with the support from development partners including
the World Bank, Norway, the United Kingdom, the European Union,
and Germany; together with the Private Sector.
68.Madam Speaker, 1,630 kilometers of transmission lines were added
to the national grid during the year now ending. 16 substations were
also constructed to improve transmission and distribution efficiency.
There are ongoing procurements for 6,250 kilometers of transmission
and distribution lines for which construction will begin during
Financial Year 2014/15. The terms of the distribution concession will
be also be further enforced to reduce systems losses and increase
efficiency from 23% to 20%. This will include rolling out of the
prepaid system.
69.Madam Speaker, during the year now ending, Government has
extended electricity to under-served areas of the country as part of its
Rural Electrification Programme. An additional 15 districts have
now been connected to the national grid. These include the
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12th June 2014 Final Budget Speech FY 2014/15
Kyegegwa, Katakwi, Amuria, Kiruhura, Lamwo, Nakapiripit,
Amudat, Kaberamaido, Dokolo, Amolatar, Ntoroko, Alebtong,
Moroto, Buhweju and Napak. This brings the total number of district
with electricity connections to 98 out of 112 districts.
70.Work has commenced also commence for the connection an
additional eleven (11) districts. These are Bulisa, Adjumani, Moyo,
Amuru, Otuke Zombo, Koboko, Maracha, Yumbe, Nwoya and
Namayingo. The remaining three (3) districts of Kotido, Kaabong
and Kalangala will be supplied by the end of 2016, thus completing
the long but steady journey of supplying electricity to all district of
the country.
71.Madam Speaker, in the forthcoming year, special attention will be
placed on accelerating implementation of the construction of the
major Hydropower plants at Karuma and Isimba.
Oil, Gas and Petroleum Development
72.Madam Speaker, during the year now ending, Government has made
significant progress in Oil, Gas and Petroleum development. A total
of one hundred and sixteen (116) wells have been drilled, with
successful results from one hundred one (101) wells where oil has
been found. Of the wells with positive exploration results, Twenty
nine (29) wells have been flow tested.
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12th June 2014 Final Budget Speech FY 2014/15
73.With respect to the development of an Oil Refinery, land acquisition
has progressed with the compensation for 50% of Project Affected
Persons. In addition, the Environmental baseline study for the Oil
refinery has been concluded. The process for selection of the Lead
Investor for the Oil Refinery has also reached advanced stages
following submission of proposals by four (4) of the six (6)
shortlisted international firms.
74. The Oil Refinery will be developed as a Public-Private Partnership
(PPP) with the selected Lead Investor holding a 60% shareholding;
and Government and participating East African Community partners
states holding upto 40% of the Oil Refinery shares. Over the next
year, the engineering design of the Oil Refinery will be completed to
pave way for construction to begin.
Mineral Development
75.Madam Speaker, in the area of mineral exploration, iron ore
discoveries at Buhara, Nangara, Kisoro, Rugando, and Butogota
estimate total reserves at 116 million tonnes, with a gross value of
US$ 15.6 billion. In addition, reserves of 7.8 million ounces of gold
have been proven at Tiira in Busia, Kamalenge in Mubende,
Mashonga in Bushenyi, Kampano in Ibanda and Alupe in Busia.
These gold reserves have a total gross value of US$ 10.9 billion.
Vermiculite reserves at Namekhara in Manafwa have been valued at
US$ 11.5 billion while Limestone/Marble reserves in Hima, Dura
Muhokya and Tororo have increased to over US $ 300 million.
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12th June 2014 Final Budget Speech FY 2014/15
Government will support the development of these strategic mineral
reserves to ensure the benefits accrue to Uganda, and the localities
where the reserves have been discovered.
76.Madam Speaker, I have allocated Shs 1,675.7 billion to the Energy
and Minerals Sector to undertake mineral development.
Information and Communication Technology (ICT)
77.Madam Speaker, during the year now ending, Government has
completed construction of two phases of the National Transmission
Backbone Infrastructure (NBI). This has improved Internet
connectivity at a more affordable cost. This has reduced the cost of
bandwidth to USD 300 per Mbps (Megabit per second) per month,
down from USD 600 per Mbps prevailing on the market. Bulk
Internet bandwidth agreements have to date been signed to
Government Institutions with 18 Ministries are being supplied with
cheaper bandwidth. I encourage the private sector to utilize this
infrastructure in order to reduce their costs of doing business and
enhance their efficiency and profitability.
78.Madam Speaker, in order to increase the economic benefits the
country receives from improved connectivity, a Business Process
Outsourcing (BPO) incubation center at the Statistics House was
officially launched. The Centre employs 250 employees, directly. An
additional 4,000 employees are currently employed by other BPO
operators in the sub-sector. This represents an opportunity for
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12th June 2014 Final Budget Speech FY 2014/15
Uganda to become a business process outsourcing (BPO) hub on the
global market.
79.Madam Speaker, in the Financial Year 2014/15, Government will
accelerate the commercialization of the second phase of the National
Backbone Infrastructure project and commence construction of the
National ICT Park and Innovation Center. Government will also
promote and support the operations of Business Process Outsourcing
(BPO) centers.
C. KEY GROWTH SECTOR PRODUCTIVITY AND PRODUCTION
Agriculture Production and Productivity
80.Madam Speaker, agriculture and agribusiness is a priority to
Government to create jobs, improve productivity and expand exports
in the medium term. The sector employs 70 percent of the Uganda's
labour force, and contributes about 21 percent to the GDP.
Government plays an important support role to ensure value for
money and lower the cost of doing business.
81.Madam Speaker, during the next year, Government will support
interventions in the agriculture sector on the following key actions:-
i. Focus on provision of inputs, while minimizing expenditure on
administrative costs, seminars and workshops;
ii. Place resources available for inputs provision under a single
umbrella and leverage them to effectively focusing on the
needy and graduates
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12th June 2014 Final Budget Speech FY 2014/15
iii. Encourage small holders to produce surplus, focusing on
enterprises that provide high returns to small holder farmers
iv. For medium and commercial scale farmers, encourage
commercial ranching, large scale crop production and value
addition.
82. The above strategy will be implemented holistically by Government
agencies working in concert.
Tourism Development
83.Madam Speaker, the tourism sector will significantly contribute to
national output if its full potential is utilized. In order to realize the
tourism sector's potential, Government will formulate a
comprehensive Tourism Sector Strategy that addresses promotion,
training regulation, and infrastructure development. I have
accordingly allocated an additional Shs 5.0 billion to the Uganda
Tourism Board (UTB) for Tourism Promotion, for the formulation of
the strategy.
D. HUMAN CAPITAL AND SKILLS DEVELOPMENT
84.Madam Speaker, Government strategy for skills development entails
among others, increasing access to quality education with emphasis
on skilled development, quality health care as well as safe water and
sanitation facilities. Government spending on the three sectors of
Health, Education and Water in the forthcoming year will amount to
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12th June 2014 Final Budget Speech FY 2014/15
over Shs 3,550 billon, which is approximately 25% of the total
budget.
Education
85.Madam Speaker, during the year now ending, Government has
continued to increase the availability of school facilities
infrastructure to enhance access, improve the quality of learning
through provision of teaching materials, recruitment of additional
teachers and enhanced monitoring and supervision.
86.Madam Speaker, 8.4 million primary school age going children now
have access to an education, against a target of 8.5 million. At
secondary school level, enrolment has reached 1.26 million
compared with a target of 1.33 million students. Enrolment in
Business and Vocation Education and Training (BTVET) has also
increased to about 24,000 while enrolment in higher education
institutions is now close to 200,000 students. 2.4 million copies of
core textbooks and teachers' guides have been procured and
distributed, to improve the quality and relevance of primary
education.
87.Madam Speaker, 486 secondary schools have been rehabilitated and
constructed, with the support of the World Bank. Construction works
are on-going at an additional 639 schools.
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12th June 2014 Final Budget Speech FY 2014/15
88.Madam Speaker, I have allocated Shs 1,699.4 billion to the education
sector in the next financial year to enhance the quality of education.
Priorities to be implemented include the enhancement of Teachers'
salaries, with emphasis on Primary School Teachers. Shs 215bn has
been allocated for this purpose. I have also provided Shs. 5 billion
towards supporting Teachers' SACCOs, in addition to the Shs. 2.5
billion provided during this year.
89.Madam Speaker, I have also specifically allocated 68.7 billion for the
implementation of the Skilling Uganda programme. Workshops will
be constructed at technical schools at Kihanda in Kanugu; Namasale
in Amolator; Namisindwa in Manafwa, Bukoli in Bugiri, and St.
Joseph Kyalubingo in Kamwenge.
90.Madam Speaker, Government will also operationalise and expand
the Student Loan Scheme with emphasis on science and vocational
training. The Loan Scheme will be rolled out starting with
undergraduate students in both Public and Chartered Private
Universities.
91.Madam Speaker, in addition to the primary and secondary schools
construction programme already underway, Government will
commence the construction of 8 Primary Teachers Colleges (PTCs).
These are at Buhungiro, Paidha, Bundibugyo, Bukedea, Kapchorwa,
Arua, Ibanda and Canon Lawrence. Construction of the National
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12th June 2014 Final Budget Speech FY 2014/15
High Altitude Training Centre (NHATC) will also commence, in
addition to the rehabilitation of 6 regional stadia.
92.Madam Speaker, Government will also provide instructional
materials to support the roll out of the new curriculum for 45 Primary
Teacher Colleges Educational institutions, and also for Special
Needs Education (SNE).
Health
93.Madam Speaker, during the year now ending, Government in the
Health Sector procured and distributed medicines and drugs worth
Shs 124 billion. These include essential medicines including Anti-
Retrovirals, Tuberculosis Medicines and Reproductive Health
Supplies. The enrolment for Anti-Retroviral (ARVs) Treatment
increased from 376,000 in 2012 to 570,000 in 2013. In order to
reduce the incidence and impact of malaria, Long-lasting insecticide
treated Nets were also distributed in all districts and Indoor Residual
Spraying (IRS) has also been ongoing in the high prevalence districts
of northern Uganda, Kumi and Ngora. Vaccines for the nine (9)
vaccine-preventable diseases were also procured and distributed in
order to eliminate stock-outs completely.
94. In order to decongest the Mulago National Referral Hospital, the
construction of new hospitals in Kawempe and Kiruddu in Kampala
is ongoing. In addition, Regional Referral Hospitals at Moroto
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12th June 2014 Final Budget Speech FY 2014/15
Mityana, Nakaseke, Kiryandongo, Nebbi, Anaka, Moyo, Entebbe
and Iganga General Hospitals, are being rehabilitated.
95.Madam Speaker, in the next financial year, Government will enhance
Health workers remuneration and improve their skills through
capacity building. Health facility infrastructure at both local
government and referral levels, will also be expanded, in addition to
the construction of additional staff houses in lower level health
facilities to minimize on absenteeism.
96. Government will also implement the Malaria Strategy for effective
prevention and control through the mass distribution of Long-lasting
Insecticide-Treated Nets (LLINs), and mass Indoor Residual
Spraying (IRS), commencing in the high malaria-prone areas of Lake
Kyoga and Northern Uganda. The Malaria Strategy will also entail
the Enhanced Diagnosis and Treatment of all cases before treatment
to improve case management, and provide correct treatment.
97.Madam Speaker, I have allocated Shs 1,197.8bn to enable
implementation of the Government priority programmes in the health
sector.
Water and Sanitation
98.Madam Speaker, Government has made considerable progress in
access to clean safe water and sanitation. 65% of Ugandans now
have access to safe water within a distance of 0.5 km. The expansion
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12th June 2014 Final Budget Speech FY 2014/15
of the Ggaba Water Works and construction of Namasuba Hill
Reservoir commenced during the year. Piped water systems and
Gravity Flow schemes in Kahama in Ntungamo district, Wadelai and
Singila in Alwi dry corridor, the expansion of the Tororo-Manafwa
Water supply and Kanyampanga were completed. The cumulative
storage for water for production is estimated at 28.3 million cubic
meters. The functionality of water sources at rural water supply
points ranges between 83%-85%.
99.Madam Speaker, during the year, the construction of the Lubigi
Waste water Treatment Plant and rehabilitation of Bugolobi
sewerage treatment Plant was completed. The construction of the
Nakivubo and Kinawataka Waste water Treatment Plants was also
started. Sanitation coverage is estimated at 71% for rural areas and
83% for urban households. Our target is to improve access to safe
water and sanitation to 100% for all Ugandans by 2018.
100. Madam Speaker, in the next financial year, the Gaba Water works
will be expanded increasing water production in Kampala from
180,000 cubic meters per day to 230,000 cubic meters per day.
Government will also implement the Kampala Sanitation Master
Plan Project to increase sewerage coverage in Kampala, construct
works for the Nakivubo Treatment Plant facility and rehabilitate and
expand the water supply systems in the towns of Arua, Gulu, Mbale
and Bushenyi.
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12th June 2014 Final Budget Speech FY 2014/15
101. Madam Speaker, I have allocated an additional Ushs 30bn for the
purpose of enhancing safe water provision and sanitation.
E. STRENGTHENING INSTITUTIONAL GOVERNANCE AND PUBLIC
SERVICE DELIVERY
102. Madam Speaker, during the year now ending, Government has
vigorously instituted accountability measures to effectively and
efficiently utilize public resources.
Cash Management
103. The Treasury Single Account was implemented to strengthen day
to day cash and debt management.. All redundant Bank Accounts at
the Bank of Uganda have been closed, and the number of Bank
Accounts operated by any Government Agency have now been
restricted. We have also enforced limits on cash withdrawals to a
maximum of Ushs 20 million per day to reduce the amount of public
funds exposed to abuse. In the next financial year, Government will
strictly enforce the Commitment Control System which bars any
Accounting Officer from over-committing Government beyond the
available resources. Accounting Officers will be required to honour
payments to contractors and service providers within 14 days from
receipt of invoices.
Payroll Management
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12th June 2014 Final Budget Speech FY 2014/15
104. Madam Speaker, we have fully decentralized payroll management
in the public sector from the Ministry of Public Service and the
Ministry of Finance, Planning and Economic Development, to
Accounting Officers. This has addressed the perennial problem of
delayed salary payment and existence of "Ghosts" staff on the
Government payroll. With this arrangement, Accounting Officers are
personally and financially responsible for all salary transactions.
105. In order to improve payroll management, the biometric
information of all Public Servants across the country has been taken
and a comprehensive audit of the payroll by The Auditor General has
been completed. The Integrated Personnel and Payroll System (IPPS)
is being rolled out and will interface with the Integrated Financial
Management System (IFMS) to ensure payment of all staff salaries
through the IFMS, as Government's payment system.
106. In order to improve the management of Government Pension
and Gratuity, with effect from 1st July 2014, the budgeting and
payment of Gratuity will be decentralized from the Ministry of
Public Service to the individual institutions where the Public Officers
retire from. This decentralization will be extended to the payment of
monthly Pension, in the medium term.
Budget Transparency and Accountability
107. Madam Speaker, the Ministry of Finance, Planning and Economic
Development continues to publish the quarterly releases to all
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12th June 2014 Final Budget Speech FY 2014/15
Government Departments and Agencies in the print media. I call
upon Hon. Members of Parliament and the public to take keen
interest in this information and use it to monitor the implementation
of Government programmes and utilization of tax payers' money.
108. During the year, the Ministry of Finance, Planning and Economic
Development launched the Budget Information Website which
provides all budget related data. The budget information on the
website provides the performance of Government programmes by
locality, and serves as a platform for the public to provide feedback
and report any information related to implementation of the national
budget.
109. Madam Speaker, in the next year, budget transparency will be
enhanced by working closely with the Civil Society. The Ministry of
Finance is establishing an SMS system and Hotline for the public to
air their views, seek responses from Government agencies on
implementation of public programmes, and whistle-blow
irregularities in public financial management.
Additional Key Interventions
110. Madam Speaker, in the next year, other key priorities for
improving institutional governance, accountability and efficiency
measures will include the following:
i. Conduct the National Population and Housing Census to gather
demography and economic data critical for proper planning. I
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12th June 2014 Final Budget Speech FY 2014/15
have allocated an additional of Shs. 40 billion to the Uganda
Bureau of Statistics for the census.
ii. To ensure timely preparation for the 2016 General Elections, an
additional Shs. 105.6 billion has been allocated to the Electoral
Commission to carry out preparatory activities. I have also
allocated an additional Shs. 80 billion to the Uganda Police
Force, to cater for recruitment of required personnel and other
activities in preparation for the elections. An additional Shs 74
billion has been allocated to the implementation of the National
Security Information Systems Project, commonly known as the
National ID Project.
iii. Madam Speaker, I have allocated Shs 450 billion to enhance
the salary of all Public Servants. This includes provisions for
the teachers' pay increase in line with Government's agreement
with the Uganda National Teachers' Union (UNATU). The
salary of the lowest paid Teacher will therefore increase by
between 15% and 25%. Other Public Servants' salaries will
also be adjusted within the available resources.
iv. Government will institute tax inclusive budgeting for all goods
and services procured by Government, including those of
development partners supporting public programmes, with
effect from Financial Year 2014/15. This measure will remove
distortions and loopholes that arise by not treating Government
transactions in the same way as those of the private sector, and
also eliminate the accumulation of Government tax arrears.
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12th June 2014 Final Budget Speech FY 2014/15
v. Government currently spends colossal sums of money on
acquiring Right of Way to implement key infrastructure
projects, which causes a major fiduciary risk. Accordingly, next
financial year, Government will establish a common corridor
for key infrastructure investments to avoid double costs of
compensation. Government will not compensate any private
entity or person for investments undertaken in gazette public
facilities, especially road reserves.
vi. In order to improve service delivery at local government level,
we shall reform inter-governmental transfers system by making
it simpler, more equitable and reduce the number of conditional
grants.
vii. Madam Speaker, in accordance with the PPDA (Amendment)
Act Section 59A , it is now mandatory for all Government
agencies, when using the open bidding, to grant a 15% margin
of preference to goods which are domestically manufactured,
mined, extracted or grown in Uganda; and 7% margin of
preference for works by Ugandan contractors or services
provided by Ugandan consultants. This is meant to promote
local content.
viii. Government will work with the Utility Companies to rollout
the prepayment system for electricity and water starting with
Government institutions to address the problem of
accumulation of utility bills and eliminate domestic arrears.
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12th June 2014 Final Budget Speech FY 2014/15
VI. CONSTITUTIONAL SELF ACCOUNTING BODIES
111. Madam Speaker, the budgetary proposals of the following Self
Accounting Bodies have been submitted in compliance with Article
155(2) of the Constitution.
i). Courts of Judicature
ii). Electoral Commission
iii). Inspectorate of Government
iv). Parliamentary Commission
v). Uganda Law Reform Commission
vi). Uganda Human Rights Commission
vii). Uganda Aids Commission
viii). National Planning Authority
ix). Office of the Auditor General
112. In accordance with Article 155(3) of the Constitution, Government
has made recommendations on these proposals. I hereby lay both the
budgetary proposals and the recommendations of Government before
this august House, as required by the Constitution.
113. In order for me to submit a fully financed National Budget for your
consideration in accordance with Article 155(1) of the Constitution,
the budget provisions of these Self Accounting bodies are in
accordance with the resource envelope conveyed to them in the
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12th June 2014 Final Budget Speech FY 2014/15
course of budget preparation, including the presentation of the
National Budget Framework Paper to Parliament, in accordance with
the Budget Act 2001.
VII. FINANCIAL YEAR 2014/15 TAX AND REVENUE MEASURES
114. Madam Speaker the objectives of the various tax measures for the
Financial Year 2014/15 are to raise revenues, enhance transparency in
collection and enforcement, improve compliance and encourage
investment by promoting value addition.
115. I will propose amendments to the tax laws to achieve the above
objectives and introduce amendments to simplify the laws, clarify
ambiguous provisions and enhance compliance in the various tax
laws. I will also highlight the decisions reached at the East African
Community (EAC) Pre-Budget consultative meeting.
A. INCOME TAX
Elimination of Initial Allowances on Eligible Property
116. Madam Speaker, a person who places an item of eligible property
into service for the first time during a year of income is allowed a
double tax deduction for that year of income of accelerated
depreciation and ordinary depreciation. I, therefore, propose to
terminate initial allowance on eligible property in order to widen the
tax base. This measure is expected to generate Shs.53.2 billion.
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12th June 2014 Final Budget Speech FY 2014/15
Increase the Presumptive Tax Threshold from 1% to 3%
117. Madam speaker, a lot of businesses in Uganda are operating
informally making it difficult to apply the normal income tax regime
on them. A presumptive tax system was developed for them but the
rates of tax on their income have not been revised since 1997. I
propose to increase the presumptive tax threshold from 1% to 3% to
raise revenue. This measure is expected to generate Shs.8 billion.
Imposition of 15% tax on Sports and Pool Betting winnings and
Designation of Gambling Houses to withhold the tax
118. Madam speaker, I propose to introduce a 15% tax on winnings on
sports and pool betting and designate gambling houses as agents to
withhold the tax. This measure is expected to generate Shs.8.0 billion.
Termination of exemption on Interest Income on Agricultural Loans
119. Madam Speaker, I propose to terminate the exemption on interest
income on agricultural loans to raise revenue. This measure is
expected to generate Shs.25.1 billion.
Capital Gains Tax on sale of Commercial Property
120. Madam speaker, I propose to introduce capital gains tax on the sale
of commercial property to raise revenue. This measure is expected to
generate Shs.52 billion.
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12th June 2014 Final Budget Speech FY 2014/15
Income Tax Act Thin Capitalization Rules
121. Madam Speaker, I propose to limit deductions for interest paid to
non-associated persons not to exceed 50 percent of earnings before
interest and depreciation. This will ensure that it is effective in
limiting the avoidance of tax abuse through low taxed interest
payments.
Termination of exemption on Income derived from Educational
Institutions
122. Madam speaker, I propose to terminate the exemption on income
derived by a person from managing or running an educational
institution for commercial gain. This is consistent with the principle
of equity and transparency in tax regime, and broadening the tax base
by bringing more taxpayers into the tax net. This measure is expected
to generate Shs.15 billion.
Definition of Start-up Costs
123. Madam Speaker, currently, there is no definition of start-up of
costs in the Income Tax Act and this causes a risk of mixing start-up
costs with capital expenditure, thus getting a double benefit. I propose
to restrict start-up costs to only non-recurring preliminary costs,
which are associated with starting up a business.
Other Technical Amendments
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12th June 2014 Final Budget Speech FY 2014/15
124. Madam Speaker, I propose to other technical amendments Madam
Speaker, the details of the above proposals are contained in the
Income Tax (Amendment) Bill 2014.
B.VALUE ADDED TAX (VAT)
125. Madam Speaker, Value Added Tax (VAT) is a well-designed tax
and follows best international best practise. It is a tax designed for
generating revenue and is borne by the final consumer. However
since its introduction, changes have been introduced to address
perceived problems that have created complexity both in the
underlying tax structure and its administration. These include VAT
exemptions for intermediate inputs to various sectors. To restore its
credibility and enhance revenue mobilisation, I propose to restructure
the VAT Act to remove these distortions, with the objective of
promoting transparency, formalization of businesses, and
compliance in the management of VAT.
Termination of Exemptions under the Second Schedule of the VAT
Act
126. Madam Speaker, I propose to terminate the exemptions on the
following supply with effect from 1st July 2014:-
i. Supply of New Computers, Desktop Printers, Computer Parts
& Accessories and Computer Software Licenses;
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12th June 2014 Final Budget Speech FY 2014/15
ii. Supply of hotel accommodation in tourist lodges and hotels
outside Kampala District;
iii. Supply of Liquefied Petroleum Gas;
iv. Supply of Feeds for Poultry and Livestock
v. Supply of Agriculture and Diary Machinery
vi. Supply of Packaging Materials to the Diary and Milling
Industries
vii. Supply of Salt
viii. Supply of Insurance Services except medical and life
ix. Supply of Specialized Vehicles, Plant and Machinery services
and civil works related to roads and bridges
construction,Agriculture, Water, Education and Health.
127. Madam Speaker, the above measures are projected to generate
Shs.215 billion and the details are contained in the VAT (Amendment
Bill) 2014.
Termination of Zero-rated Supplies under the Third Schedule of
VAT Act
128. Madam Speaker, I propose that the following VAT zero-rated
supplies be terminated with effect from 1st July 2014:-
i. Supply of Printing Services for Educational Materials
ii. Supply of cereals, grown, milled or produced in Uganda
iii. Supply of processed milk and milk products
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12th June 2014 Final Budget Speech FY 2014/15
iv. Supply of Machinery and Tools for Agriculture
v. Supply of Seeds, Fertilizers, Pesticides and Hoes
129. Madam Speaker, the above measures are projected to yield
Shs.30.4 billion and the details are contained in the VAT
(Amendment Bill) 2014.
C. EXCISE DUTY
Increase of Excise Duty of 50 shilling on Petrol and Diesel
130. Madam Speaker, I propose to increase excise duty on petrol and
diesel by 50 shillings to increase revenue collections. This measure is
expected to raise about Shs.60 billion.
Reinstate Excise Duty of 200 shillings on Kerosene
131. Madam Speaker, I propose to reinstate excise duty on kerosene at
200 shillings per litre to raise revenue. The removal of the duty in
2010 did not lead to reduction of the price as expected and the oil
dealers rather than the final consumers were the beneficiaries.
Findings from the industry suggest that the reason the price of
paraffin did not reduce is the fear that unscrupulous dealers use it to
adulterate diesel. This is very hazardous to all users in industry,
transport and households. This measure is expected to generate about
Shs.15 billion.
Increase Excise Duty on Sugar from 25 shillings to 50 shillings
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12th June 2014 Final Budget Speech FY 2014/15
132. Madam Speaker, I propose to increase excise duty on sugar from
25 shillings to 50 shillings. This measure is expected to generate
about Shs.7 billion.
Introduction of 10% Excise Duty on Mobile Money Withdraw
Fees
133. Madam Speaker, in Financial Year 2013/14, I introduced a 10%
excise duty on mobile money transfer services but the estimated
revenues were not realized as the charges were transferred to
withdrawals. To correct this anomaly, I am proposing a 10% excise
duty on fees charged on withdrawals. This measure is expected to
generate about Shs.16 billion.
Excise Duty on Bank Charges and money transfer fees
134. Madam Speaker, I propose to introduce excise duty of 10 percent
on bank charges and money transfer fees to generate revenue. This
policy will yield Shs.22 billion.
135. Details of the above measures are contained in the Excise Duty
(Amendment) Bill 2014.
D.OTHER TAX MEASURES
Treatment of Government Taxes
136. Madam Speaker, the Ministry has embarked on the process of
integrating Government in the tax system and removing any
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12th June 2014 Final Budget Speech FY 2014/15
distortions and loopholes that arise by not treating Government
transactions in the same way as those of private sector.
137. Madam Speaker, I am proposing that commencing next Financial
Year, all goods and services procured by Government, directly or
with the donor support will be tax inclusive. Funds have been
allocated in the budget to the relevant sectors. Accordingly the gross
tax payment system managed under my Ministry will cease.
138. In this respect, to provide for a smooth transition for the new
policy framework, I have decided to write off all outstanding taxes
owed to Uganda Revenue Authority by both the Central Government
and Local Governments. However, this excludes PAYE, Withholding
Tax and any other taxes withheld at source which must accounted for
by the responsible persons in accordance with the law.
E. NON TAX REVENUE, NEW TAX LAWS AND OTHER REFORMS
Implementation of the Revised Non Tax Revenue rates by
Government
139. Madam Speaker, last Financial Year I revised some Non Tax
Revenue rates through the Finance Bill 2014 to raise revenue. The
exercise will continue in Financial Year 2014/15 raising further
revenue of about Shs. 40 billion. Details will be contained in the
Finance Bill 2014.
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12th June 2014 Final Budget Speech FY 2014/15
New Tax Laws and Other Reforms
140. Madam Speaker, Last Financial Year, my Ministry proposed new
Excise Duty, Stamps Duty, Lotteries and Gaming laws as well as the
Tax Procedures Code. I am happy to report that the Bills are now
before Parliament and I am hopeful that they will be considered,
enacted and implemented as part of the tax reforms and budget for the
Financial Year 2014/15. It is of necessity to expedite the enactment
of these laws as they are critical for enhancing compliance and the
overall objective of increasing revenue collection.
Tax Administration
141. Madam Speaker, modernization of the tax administration remain a
priority to enhance revenue collection. The e-tax system and other
information management systems to augment the capacity of tax
administration will be stepped up to improve taxpayer compliance.
The e-tax is to be linked with the IFMS system, and accessibility of
electronic services for small taxpayers enhanced.
142. In order to improve tax administration, a list of key performance
indictors has been developed between the Ministry and URA to
monitor efficiency gains by tax administration and ensure that URA
can deliver the set targets.
East African Community and Regional Initiatives
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12th June 2014 Final Budget Speech FY 2014/15
143. Under EAC Northern Corridor, initiatives have been implemented
to improve efficiency in the clearance of goods at Mombasa port and
along the Corridor. The focus has been on addressing the perennial
bottlenecks that increase the cost of doing business in the region.
144. Madam Speaker, I wish to report the time taken to transport cargo
from Mombasa to Kampala has been reduced from 18 to 4 days while
the time taken to load and transport fuel from Kisumu and Eldoret to
Uganda has been reduced from 3 days to 8 hours.
145. Transit bonds which have been a major complaint by the business
community have been eliminated and multiple customs
documentation substantially reduced. These improvements are
resulting into reduction in costs of transport for Uganda's cargo and
also deepening the EAC integration process.
EAC Pre-Budget Consultations
146. Madam Speaker, the East African Community Ministers of
Finance agreed on a number of decisions during the Pre-Budget
meeting, including introduction of a 1.5% infrastructure levy on
selected imports into EAC to finance railway infrastructure
development.
147. Details of the decisions will be contained in the East African
Community (EAC) Gazette.
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12th June 2014 Final Budget Speech FY 2014/15
F. REPORT OF TAX EXPENDITURES FOR FY 2013/14
148. Madam Speaker, Article 152 (2) of the Constitution requires me to
periodically report to Parliament on the exercise of powers conferred
upon me by any law to waive or vary a tax imposed by that law. This
is to report that this Financial Year, I waived Stamp duty of Shs 200
million payable by Pride Micro Finance Limited and Shs 2 billion
payable by Uganda Development Bank Limited on increase in share
capital. I also waived PAYE liability of shs 332,252,158/=for Gulu
Independent Hospital for the period July 2002 to October 2005. This
is in line with the tax waiver granted to the Northern Uganda business
community in 2006 due to hardship in the aftermath of the war.
149. Madam Speaker, Government has, as of 26th May 2014, also paid
Shillings Eleven billion, Five Hundred Three Million, Two Hundred
Fifteen Thousand, One Seven Hundred Fifty Shillings only
(Shs.11,503,215,750/=) in respect of Hotels, Textile Manufacturers,
Hospitals and Tertiary Institutions, and Non-Government
Organizations with tax exemption clauses in their agreement.
VIII. SCHEDULE OF INDEBTEDNESS
150. Madam Speaker, in accordance with the provision of Article 159
(4), Section 13 (1) and (2) of the Budget Act 2001, I hereby lay before
the House a report on Government's total indebtedness as at 31st March
2014 and all the loans contracted the grants that Government received
during financial year 2013/14. I wish to call upon Colleagues to spare
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12th June 2014 Final Budget Speech FY 2014/15
some time read and discuss the report and provide insights, comments
and guidance.
IX. CONCLUSION
151. Madam Speaker, the budget for the FY 2014/15 has been
prepared to create a better Uganda. Having a shared vision requires
working for the common good as a team. With this common
understanding, we shall transform Uganda. We shall build modern
and lasting infrastructure, we shall deliver services, create jobs,
eliminate poverty, increase incomes and ultimately improve the
overall quality of life of Ugandans.
152. The budget has prioritised implementation of actions that have
impact on livelihoods of a majority of Uganda such as education,
health, water and agriculture, among others. For rural farmers and
the business community, the budget aims at enhancing the
availability of electricity and transport infrastructure to enable in
order to reduce the cost of doing business. For potential
entrepreneurs and job seekers, especially the youth, the budget
provides opportunity for appropriate skills development for the
market, and access to investment finance. For the Uganda worker,
pension sector reforms are aimed at securing incomes in retirement,
and also ensure efficient savings mobilization for sustainable and
long term development, without compromising social security
protection of the workers.
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12th June 2014 Final Budget Speech FY 2014/15
153. Therefore, the budget proposals I have presented today are not
only a contract among a selected few. The budget proposals reflect a
shared vision and common agenda of all citizens of Uganda.
154. Madam Speaker, as I commend this budget to the people of
Uganda, I wish to urge my colleagues, Members of Parliament and
Government technocrats to play their respective roles and implement
the proposals for a better Uganda.
I beg to move.
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South Africa

Economic Statistics

Sasol Chief Financial Officer Update

Sasol delivered a strong operational performance over the first nine months of the 2014 financial year, notwithstanding a still mixed macroeconomic environment. In the last quarter, oil prices remained flat, compared to both the first six months of the current financial year, as well as the comparable period in the previous year, while Henry Hub natural gas prices have increased slightly. The exchange rate depreciated by 20% compared to the comparable period in the previous financial year. Chemical markets continue to improve, with most chemical commodity prices increasing.
We continue to advance our various growth projects, which will enable us to produce increased volumes over the near to medium term. Cash flow generation remains strong, maintaining our ungeared position and providing us with a solid platform from which to fund various growth opportunities.
Delivering on our business performance enhancement programme continues to be a key focus area for Sasol. We are on track to implement our new operating model, including the associated management structures and internal changes, on 1 July 2014. This will enable a simplified, cost-effective, efficient and competitive Sasol, which will create significant long-term shareholder value. While we are implementing these changes, we remain committed to ensuring safe, efficient and stable operations and full compliance.
As indicated previously, our new operating model will result in changes to our statutory reporting from the 2015 financial year. In turn, we are also streamlining our internal reporting processes to become more effective and efficient, and we are thus reviewing the content and frequency of the information we disclose to the market, such as this CFO update. We will communicate more on this later this year.
Best regards,
Paul Victor
Acting Chief Financial Officer
Sasol Limited


1.   Macroeconomic environment

		March 2014 YTD	March 2013 YTD	% difference
Macroeconomic indicators
Average rand/US$		10,34	8,64	20%
Brent crude oil (US$/bbl)		109,30	110,71	(1%)
Henry Hub gas price (US$/mmbtu)		4,24	3,25	30%
Product prices
SA fuel price (US$/bbl)		123	129	(5%)
Ethylene (US$/ton)		1 639	1 611	2%
Propylene (US$/ton)		1 499	1 414	6%
Polymers basket (US$/ton)		1 371	1 247	10%
Solvents basket (US$/ton)		1 202	1 240	(3%)

Prices reflect international commodities or baskets of commodities and are not necessarily Sasol specific. Sources: RSA Department of Energy, ICIS-LOR, Reuters, Platts, International Energy Agency.
Global economic growth continued at a moderate pace in the third quarter of our current financial year, although the performance of major economies was mixed. US economic growth contracted sharply, mainly due to adverse weather conditions, while Chinese economic growth eased. In Europe, business and consumer confidence showed further improvement. South Africa's economic environment remained challenging due to strikes in the platinum sector, electricity supply constraints, low levels of business and consumer confidence, and strained household finances, with GDP contracting in the quarter. Domestic inflationary pressures accelerated, with headline consumer price inflation rising to 5,9% in the first quarter of the 2014 calendar year from 5,4% in the preceding quarter, while producer price inflation rose to 7,6% from 6,2% over the same period.
2.   Operational update

		March 2014 YTD	March 2013 YTD	% difference
Total production
Sasol Mining (mton)		29,9	29,5	1%
Sasol Gas (mGJ)		130	119	9%
Sasol Synfuels (mton)		5,6	5,5	2%
Sasol Oil (m3)		6 271	5 706	10%
ORYX GTL* (mbbl)		4,1	3,3	24%
Canada shale gas asset* (mboe)		2,9	3,0	(3%)
Sasol Petroleum International group (excluding Canada) (mboe)*		14,8	13,1	13%
Sasol O&S (kton)		1 742	1 466	19%

* Sasol's share of production
Sasol Mining's year-to-date production volumes increased by 1% compared to the prior year comparable period. This was achieved through increased production at the Twistdraai complex. The overall higher production and sales volumes to the export market were also boosted by higher export rand prices. Mining costs continue to remain under pressure due to higher labour and maintenance costs.
Sasol Synfuels delivered better than expected production volumes for the period of 5 654 kilotons (kton). This represents an increase of 2% on the prior period, despite the east factory total and phase shutdown in September 2013. Normalised Sasol Synfuels volumes increased by 4% on a comparable basis. Cash unit costs increased by 7,3% compared to the previous comparable period, which is 0,6% above the producer price index (PPI). This is mainly due to higher coal and gas prices which are mostly internal to the group.
Sasol Oil's year-to-date production volumes were 10% higher than the prior year comparable period. This is mainly due to an increase in production volumes at the Natref refinery, given the postponement of the planned shutdown at Natref to the last quarter of the 2014 financial year.
Our ORYX GTL joint venture in Qatar produced 4,1 million barrels (mbbl) (Sasol's 49% share) over the nine month period. The increased production compared to the prior period was largely due to plant improvements made during the shutdown in the first quarter of the 2013 calendar year. The average utilisation rate for the nine month period was 93,5%.
In Nigeria, commissioning of the Escravos GTL project is progressing, with beneficial operation of the first train expected to be achieved during the first half of the 2014 calendar year.
The performance of our Sasol Olefins & Surfactants' (Sasol O&S) business for the period continues to be supported by favourable feedstock prices in our US operations. Our European-based businesses achieved improved results, despite increased pressure on profits due to weak demand and high feedstock prices. Total production and sales volumes, inclusive of the co-monomers product portfolio, were 19% and 17% higher, respectively, compared to the prior year comparable period. Overall gross margin for the period exceeded the prior year comparable period. In February 2014, we successfully completed commissioning of the tetramerisation project in Lake Charles, Louisiana, and expect the plant to be fully operational in the second half of the 2014 calendar year.
Our Sasol Polymers business is experiencing improved gross margins due to increased selling prices on the back of higher dollar-based prices and a weaker exchange rate, as well as the benefits of improved plant efficiencies. Production volumes were 7% higher than the prior comparable period, due to improved efficiencies and contributions from the new Ethylene Purification Unit 5 (EPU5) plant. Sales volumes were 6% higher than the prior year comparable period and are expected to be 10% higher for the full 2014 financial year. EPU5 contributed to the C₂ value chain during the year by reducing ethane flaring, and we are looking forward to realising the full benefits of this project in the 2015 financial year. The C₃ stabilisation project is being commissioned, and beneficial operation is anticipated early in the second half of the 2014 calendar year. The project is expected to be completed within budget.
Sasol Solvents' business, exclusive of the co-monomers portfolio, delivered a strong performance for the nine months compared to the corresponding period in the prior year. This was attributable to higher US dollar prices, improved sales volumes and a weaker rand/dollar exchange rate, all benefiting the South African product portfolio. The disposal of non-core Solvents Germany assets to INEOS has been finalised, and is effective from 31 May. As previously communicated, it is highly probable that a capital loss on disposal will be realised by year-end.
In our other chemical businesses, sales volumes at Sasol Wax were 0,5% higher than the prior year comparable period. In addition, the production of hard waxes has improved, providing a platform from which to expand the business as the global economy recovers.
In contrast, challenging market conditions continued to negatively impact Sasol Nitro's performance for the period. Sales and production volumes in the explosives business were lower than the prior period, mainly due to industrial action in the platinum mining sector.
At Sasol Petroleum International (SPI), production volumes from our combined assets in Mozambique, Gabon and Canada grew by 10% compared to the prior period.
The feasibility phase of the Production Sharing Agreement (PSA) development project in Mozambique is nearing completion. The full field development plan for the PSA is on track to be submitted to the Mozambican authorities by the February 2015 deadline.
In Gabon, maturation and development of additional proven oil reserves, to maintain and potentially boost production, progressed. This was enabled by the development of the Etame expansion project and the South East Etame and North Tchibala projects. Both developments remain on track for beneficial operation in the 2015 calendar year.
Our Canadian shale gas assets remain under pressure, given continued low natural gas prices. Accordingly, we are prioritising the de-risking of the asset by drilling a number of key appraisal wells. During 2014 we have seen a sustained reduction in drilling and completion costs. Notwithstanding, well productivity and overall production levels remain challenged, due to relatively low drilling activity levels.
One of the primary pillars of Sasol's overarching corporate strategy is to grow its upstream business, with short- and long-term focus areas. Australia, being a focus area for the long term, presented us with an opportunity to farm-in to an early-stage exploration position in the Beetaloo basin, which is highly prospective for shale gas and associated liquids. Accordingly, SPI and Origin Energy Resources Ltd. (Origin) signed a conditional farm-in agreement with Falcon Oil & Gas Australia Limited to each acquire a 35% interest in three onshore exploration permits in Australia's Northern Territory. The three permits, located about 500 kilometres south-east of Darwin, cover an area of more than 18 500 km² within the Beetaloo Basin. Origin will assume operatorship of the three permits.
We completed an early stage coal-bed methane (CBM) exploration programme in Botswana in March 2013. Following a comprehensive technical evaluation, we decided to withdraw from the CBM prospecting licenses. We will, however, continue to monitor the Southern African CBM landscape, as well as that for both conventional and unconventional gas reserves. In parallel, we are evaluating the potential for further gas monetisation opportunities in the region, such as gas-to-liquids (GTL) and power generation.
Through Sasol New Energy, we continued to advance the development of the US$246 million 140 megawatt gas-fired power plant at Ressano Garcia, Mozambique, in partnership with the country's state-owned power utility, Electricidade de Moçambique. Beneficial operation remains on track for early in the second half of the 2014 calendar year.
3.   Projects update
South Africa
Mine replacement projects
The development of the Impumelelo and Shondoni collieries, which are part of Sasol Mining's R14 billion mine replacement programme, remain on track. It is anticipated that the projects will be completed within budget and on schedule, reaching beneficial operation in the first half and second half of the 2015 calendar year, respectively. An external funding facility of R2,5 billion for these projects has been secured, and the first drawdowns have taken place.
FT wax expansion project
Construction on the FT wax expansion facility in Sasolburg, South Africa, continues to progress. The commissioning of the new slurry bed reactor, which is critically important for the capacity expansion, is expected during the fourth quarter of the 2014 calendar year. Commissioning of Phase 2 of the project is on track to take place during the second half of the 2016 calendar year. The total project cost for both phases remains unchanged at R13,6 billion.
Sasol Synfuels growth programme
The Sasol Synfuels growth programme is nearing completion. The beneficial operation of the entire programme is still expected to be reached at the end of the 2014 calendar year. Following the successful commissioning of the gas-heated heat exchange reformers (GHHER) East plant last year, GHHER West is being installed and beneficial operation is expected towards the end of the third quarter of the 2014 calendar year. The final cold separation modifications will be completed during the scheduled Synfuels phase shutdown in September.
Synfuels environmental initiatives
The replacement of tar tanks and separators, the volatile organic compound (VOC) abatement project, and the coal tar filtration (CTF) east projects remain under schedule and cost pressure. Beneficial operation for the replacement of tar tanks and separators and the VOC abatement project is expected in the second half of the 2015 calendar year, and the middle of the 2016 calendar year, respectively. The CTF east project is expected to reach beneficial operation in the first half of the 2017 calendar year. The total approved cost of these three projects is estimated at R7,5 billion.
Clean Fuels 2 update
The South African Petroleum Industry Association confirmed that the South African government has communicated a postponement to the 1 July 2017 introduction date of new cleaner fuels standards. A new target date is awaited. Furthermore, market trends are indicating upward pressure on octane demand. Delays in the clean fuels project schedule and a potential project scope change to allow an increased octane capacity will result in higher capital requirements. Studies are in progress to quantify the impact and to determine an appropriate way forward.
Mozambique
Mozambique to Secunda pipeline capacity expansion
The construction of a R2 billion loopline on the Mozambique to Secunda gas pipeline is progressing well. Beneficial operation is expected during the second half of the 2014 calendar year and the project is expected to be completed within budget
United States
US ethane cracker and derivatives complex
We continue to make progress on the front-end engineering and design (FEED) work and are currently finalising the capital cost estimate and associated contracting strategy for our world-scale 1,5 million tons per annum ethane cracker and derivatives complex in Westlake, Louisiana. This investment will establish our Lake Charles Chemical Complex as an integrated multi-asset site that will also facilitate and enable future growth in the region. We have secured sufficient ethane transportation capacity on various pipeline systems as well as term-based ethane supply agreements. The air and water permits for the ethane cracker and derivatives complex and the US gas-to-liquids (GTL) and chemical value adds facility have been issued.  Provided the wetlands permit is received in a timely manner, all commercial and engineering construction contracts are substantially completed and sufficient funding has been raised, we anticipate taking the final investment decision for the ethane cracker and derivatives complex later this year.
High-density polyethylene 50/50 joint venture with INEOS
Sasol and INEOS have taken the final investment decision on a world-scale 470 kilotons per annum bimodal high density polyethylene (HDPE) plant to be located at INEOS' existing Battleground Manufacturing Complex in La Porte, Texas. The plant will be debt financed and the investment decision is therefore conditional on achieving financial close. The plant, which will use INEOS' Innovene^™ S process, is expected to reach beneficial operation towards the end of calendar year 2016. The ethylene required for the production of the HDPE will be supplied by INEOS and Sasol in proportion to their respective shareholding. Sasol will initially source the ethylene from its existing Lake Charles operations and, to the extent necessary, from the merchant market. Once the new ethane cracker is operational, the ethylene from the existing Lake Charles operations will be supplemented by ethylene from the new ethane cracker. INEOS is a leading producer of ethylene from its olefins units at Chocolate Bayou. All relevant permits have been obtained.
US GTL complex
Working alongside Technip, we are progressing with the FEED phase of our planned GTL and chemicals value add facility. This facility, which is to be located adjacent to the ethane cracker and downstream derivatives complex in Westlake, Louisiana, will produce at least a nominal 96 000 barrels per day of product, with the potential to produce up to 10% more. Sasol has selected Air Products and Chemicals Inc., a leading industrial gas company, to build, own and operate a world-scale air separation plant for the long-term supply of oxygen, nitrogen, and compressed air to the US GTL facility, subject to the final investment decision being taken on the project. The final investment decision on the GTL facility is expected to follow within 24 months of that of the US ethane cracker and derivatives complex, taking into consideration progress made with the execution of the ethane cracker and derivatives complex, prevailing market conditions as well as the impact on Sasol's gearing and dividend.
Uzbekistan
Uzbekistan GTL
We are in an extended FEED phase of our Uzbekistan GTL project. The majority of the technical FEED activities have been completed. The final investment decision for this project is, amongst others, dependent on securing appropriate project funding, and confirming a suitable partner to take up 19% of our current stake in the venture. We anticipate a final decision during the second half of the 2014 calendar year.
4.   Business performance enhancement programme update
We remain on track to implement our new operating model for Sasol on 1 July 2014. Thereafter, Sasol will be organised into two upstream business units, three regional operating hubs, and four customer-facing strategic business units, supported by fit-for-purpose functions. The reorganisation of our executive, senior and middle management structures to support the new operating platform is underway. The top three management layers, which include the group executive committee, are already finalised, and the process to confirm the appointments of the organisation's fourth decision-making layer is on track for completion during June. In parallel, we are finalising a streamlined and robust internal governance and decision-making framework, which will also be effective from 1 July 2014.
Our estimates for the savings already achieved in the course of the current financial year are R205 million. Since many of these savings were realised during the second half of the financial year, the savings are equivalent to R560 million for a full year. The implementation costs for the business performance enhancement programme for the current financial year are expected to be around R1,1 billion.
We remain confident that this programme will generate sustainable savings of at least R3 billion (in real terms) annually, with the full benefit being evident from the 2016 financial year. Based on our ongoing analysis, we are encouraged that we will be in a position to communicate upside potential to this savings target in due course.
5.   Other updates
Credit rating
Based on our interactions with Standard and Poor's (S&P), and after having performed a sovereign stress test, S&P revised its outlook on Sasol from negative to stable on 15 May 2014. Our foreign currency credit rating by S&P is BBB/Stable/A-2 (previously BBB/Negative/A-2).
Moody's Investors Service (Moody's) published their latest credit opinion on 31 March 2014. Our foreign currency credit rating is Baa1/stable/P-2 and our national scale issuer rating is Aa3.za/P-1.za.
The credit ratings reflect increased confidence in our local and international activities, diversified along the integrated value chain, as well as our continued strong financial risk profile and prudent financial policies.
Competition matters
At the end of 2007, the South African Competition Commission ("Commission") initiated an investigation into the country's polymers industry. The investigation included allegations of excessive pricing in the South African monomer and polymer industries. The Commission's complaint was referred to the Competition Tribunal ("Tribunal") in 2010, contending that Sasol Chemical Industries Limited, (currently Sasol Chemical Industries (Pty) Limited), through its Sasol Polymers division ("SCI"), had, between January 2004 and December 2007, charged excessive prices for  propylene and polypropylene supplied in South Africa. The matter was ultimately heard by the Tribunal in 2013.
On 5 June 2014, the Tribunal released its decision in respect of SCI's pricing of propylene and polypropylene.  In its decision, the Tribunal found against SCI in relation to its pricing of both products for the period in question. In respect of purified propylene, the Tribunal imposed an administrative penalty of R205,2 million. In respect of polypropylene, the Tribunal imposed a penalty of R328,8 million. In addition, the Tribunal ordered a revised future pricing of propylene and polypropylene.
Sasol is currently reviewing the Tribunal's decision and considering the options available to it, including engaging with the relevant stakeholders on the way forward.
As previously reported, the Commission has, since 2008, been conducting an investigation into the South African petroleum industry. We continue to cooperate with the Commission in this investigation.
Inzalo refinancing
The partial refinancing of the Sasol Inzalo preference share debt is being agreed with the funders and will be implemented once finalized and all conditions precedent have been met. This will result in lower interest rates on a portion of the debt and thus lower debt payments, thereby creating additional value for the Inzalo BEE scheme and its shareholders.
6.   Financial update
We expect global economic growth to continue at a moderate pace for the remainder of 2014, with South African growth prospects remaining muted. Macroeconomic conditions remain volatile, impacting on our assumptions of stable crude oil prices in the near term, slightly improved natural gas prices, a moderate recovery in product prices and a weaker rand/US dollar exchange rate. The rand/US dollar exchange rate remains one of the biggest external factors impacting our profitability. We continue to focus on factors within our control - volume growth, margin improvement and cost reductions.
We expect an overall strong production performance for the 2014 financial year and remain on track to deliver on our expectations for further enhanced operational stability. Our production guidance is as follows:

• Sasol Synfuels' volume guidance, based on current performance, is anticipated to be at the top end of the previously guided range of 7,3 to 7,5 million tons for the full year;
• The full year average utilisation rate at ORYX GTL in Qatar is expected to be more than 94% of nameplate capacity; and
• Our shale gas venture in Canada will maintain stable production compared to the prior year. At present, we are optimising drilling activities, as ramp-up remains dependent on sustained natural gas price increases.

We continue to make good progress on our business performance enhancement programme to ensure that Sasol remains competitive over the long term. As costs are incurred to improve plant stability, and the weaker rand continues to exert pressure on our South African businesses, we expect that our normalised fixed costs will increase slightly above indicative South African PPI inflation. Cost reduction is a specific target within our short-term incentive scheme and, accordingly, we remain focused on controllable cost elements.
Earnings guidance will be provided once we have a reasonable degree of certainty on the full year results for the 2014 financial year, taking into account any adjustments arising from our financial year-end reporting closure process, as well as remeasurement effects, including that relating to the disposal of our Solvents Germany business.
The forecast financial information appearing in this update is the responsibility of the directors and has not been reviewed or reported on by Sasol's external auditors. We aim to publish Sasol's full-year results for the 2014 financial year on 8 September 2014.
9 June 2014, Johannesburg
7.   Contact details
Email: investor.relations@sasol.com      Phone: +27 11 441 3113
Sponsor: Deutsche Securities (SA) Proprietary Limited
Sasol Ordinary Share codes: JSE - SOL; NYSE - SSL
Sasol Ordinary ISIN codes: ZAE000006896, US8038663006   
Sasol BEE Ordinary Share code: JSE - SOLBE1
Sasol BEE Ordinary ISIN code: ZAE000151817
Forward-looking statements: 
Sasol may, in this document, make certain statements that are not historical facts and relate to analyses and other information which are based on forecasts of future results and estimates of amounts not yet determinable. These statements may also relate to our future prospects, developments and business strategies. Examples of such forward-looking statements include, but are not limited to, statements regarding exchange rate fluctuations, volume growth, increases in market share, total shareholder return and cost reductions. Words such as "believe", "anticipate", "expect", "intend", "seek", "will", "plan", "could", "may", "endeavour" and "project" and similar expressions are intended to identify such forward-looking statements, but are not the exclusive means of identifying such statements. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and there are risks that the predictions, forecasts, projections and other forward-looking statements will not be achieved. If one or more of these risks materialise, or should underlying assumptions prove incorrect, our actual results may differ materially from those anticipated. You should understand that a number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements. These factors are discussed more fully in our most recent annual report under the Securities Exchange Act of 1934 on Form 20-F filed on 9 October 2013 and in other filings with the United States Securities and Exchange Commission. The list of factors discussed therein is not exhaustive; when relying on forward-looking statements to make investment decisions, you should carefully consider both these factors and other uncertainties and events. Forward-looking statements apply only as of the date on which they are made, and we do not undertake any obligation to update or revise any of them, whether as a result of new information, future events or otherwise.
Please note: A billion is defined as one thousand million. All references to years refer to the financial year ended 30 June. Any reference to a calendar year is prefaced by the word "calendar".
SOURCE Sasol

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Profile: General Business Africa