Home > Insights > Uganda, Total reach agreement bringing crude pipeline construction closer
Tuesday, 15 Sep 2020

Uganda, Total reach agreement bringing crude pipeline construction closer

Insights Africa

Economic Outlook

Economic Outlook

  • The World Bank Board of Directors today approved a grant of 8 MM USD from the International Development Association (IDA) to ease the movement of goods and people and improve access to social services and job opportunities in the refugee hosting districts in the West Nile sub-region of Uganda.
  • The middle-income class in Kampala, Jinja and Masaka has registered the highest levels of inflation in 2019, according to the Uganda Bureau of Statistics (UBoS). Since the lockdown was eased, Uganda inflation rate has been rising although in some cases, it decreased in a marginal range.
  • Tanzania and Uganda signed an agreement paving the way for the construction of a crude oil pipeline running from Ugandan oilfields to the Tanzanian port of Tanga. Uganda discovered oil reserves in 2006 and needs the planned 1,445-km (900-mile) East African Crude Oil Pipeline to be in place to start commercial production. The pipeline is estimated to cost 5 BN USD.
  • Kenya economic growth is expected to drop to 6% in 2020 compared to 5.4% in 2019, mainly due to COVID-19. The economy remained resilient in Q1-2020 reaching 4.9% compared to 5.5% in Q1-2019.
  • Kenya has lost at least 33 jobs on average per company due to the Covid-19 pandemic, according to the Federation of Kenya Employers (FKE). Moreover, the Ministry of Labour and Social Protection data, shared with FKE, shows that 604 companies countrywide have let go of some of their employees due to the negative effects of Covid -19 on businesses.
  • In Zimbabwe, reserve money has significantly dropped in the past month from 66 BN ZWD (201.7 MM USD) in July to 12.11 BN ZWD (146.7 MM USD) in August 2020. The effect has been felt on the parallel market where the exchange rate has maintained at around 1 USD: 100 ZWD in the same period.
  • Namibia has approved an additional 342,000 NAD (19,700 USD) as part of the grant to bail out the country's arts sector, which has been grounded by a state of emergency imposed as a result of the COVID-19 pandemic. The country first approved 5 MM NAD (335,786 USD) grant to bail out the country's arts sector.
Political Events

Political Events

  • Ethiopian authorities warned of a possible “terror attack" in the capital Addis Abba. The warning came as nearly 110 million citizens across the country began celebrations on the eve of Ethiopia's New Year. Addis Ababa Police Commission said security agents have found pre-incident indicators of a terror attack targeting New Year celebrations in the city.
  • The US, United Kingdom and Uganda have topped the list of arrivals to Kenya since the resumption of international flights on August 1. The US had 2,768 arrivals, UK (2,469), and Uganda (506). The suspension of international flights in March was among several measures taken by the government to curb the spread of the coronavirus.
Stock Market

Stock Market

  • Nigerian bourse ended the trading week on a positive a note. The All Share Index gained 28% to close at 25,591.95 basis points as against 0.38% appreciation recorded on Thursday. Its Year-to-Date (YTD) returns currently stands at -4.66%.
  • Shoprite Holdings announced that it would leave the East African nation of Kenya after entering the market 2 years ago and will be closing 2 more stores. The company announced this on Tuesday, citing the Kenyan business has continued to under perform relative to the return requirements. This comes as Shoprite also announced it would reduce operations in Nigeria.

                         Note:  Weekly values are calculated on Friday of each week.

Companies Transactions

Companies Transactions

  • Nestle A, Switzerland, the parent company of Nestle Nigeria Plc and the majority shareholder of the company, has increased its stake in the Nigerian subsidiary, as it purchased about 748,047 additional shares in August 2020 at an average price of 1,174.74 NGN per share which totally worth around 878.8 MM NGN (2.27 MM USD).
  • Uganda and France Total have reached an agreement that will bring the oil firm and its partners closer to starting construction of a crude pipeline to neighboring Tanzania. The 1,445-km (900-mile) East African Crude Oil Pipeline, costing 5 BN USD, would pass through neighboring Tanzania to the Indian Ocean port of Tanga.
  • One of Nigeria second-tier commercial banks, Fidelity Bank Plc, has concluded plans to issue up to 50 BN NGN (131.3 MM USD) in local bonds by Q4-2020, in order to refinance existing debts as the yields drop. The Fidelity Bank top executive disclosed that the new issue will be made to redeem the existing 30 BN NGN (77.81 MM USD) bond which was issued at 48%.
  • Equity Bank Chief Executive James Mwangi is involved in a court battle with a private company over a property in Muthaiga, Nairobi County. The firm, Mount Pleasant Ltd, has dragged the banker to court accusing him of trespass and using the police for an alleged forced entry.
  • In Nigeria, the Minister of Finance, Budget and National Planning, Zainab Ahmed, stated that when Dangote Refinery kicks off in 2021, it may not significantly reduce the price of petrol because the refinery will be selling at the international price. Adding that this is because that the refinery is located at the Export Processing Zone in Lagos State.
  • Stanbic Bank Zimbabwe jumped from 624 MM USD loss posted in H1-2019 to 2 MM USD adjusted profit after tax for H1-2020. A subsidiary of Standard Bank Group of South Africa, the bank attributed the impressive performance to an improvement in its non-funded income that includes trading revenue, fee and commission income and fair value adjustments on investment properties.
  • The Development Bank of Rwanda (BRD), the World Bank, and the Swedish International Development Agency (SIDA) have announced a strategic fund-raising and collaboration to raise capital for Ignite Power. Ignite Power is a Rwandan renewable energy firm with investment in solar energy. The firm also has presence in other African countries.


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