“President John Pombe Magufuli has advised President Museveni to sacrifice part of the 185m USD tax bill charged by the URA to conclude plans for the construction of the crude oil pipeline and begin the project forthwith in order to create jobs” (NTV Uganda, 07.09.2019).
Today, is yet another day of hypocrisy. It is not new, but just another story like that. As the Tanzanian President Magufuli is right that Uganda Revenue Authority and their winning of a Court Case, which entails a tax-dispute between Tullow Oil has suspended the development of the pipeline and the drilling in parts of the Lake Albert Basin. As the farm-down agreement between three parties, Tullow, Total and CNOOC is on-hold.
That is where the Tanzanian President is right. Period. However, he is wrong in a whole other sense. Should President Yoweri Kaguta Museveni tell his counter-part, that he should mind his own business? Yes, actually. Because, in this manner. The Tanzanian one is doing the same battle with anther extraction industry. The mining industry, the Acacia Mining tax scandal. Where the the company has to back-pay the government.
This the Tanzanian counterparts slapped on the company by in 2017. The same sort of settlement the Ugandan did with Tullow in 2015, as the Republic wanted back-taxes for the investments done in the territory. That is why Magufuli shouldn’t whine about this.
Surely, we know Magufuli wanted the man-power, the taxing rate of the movement of goods through his United Republic and secure the usage of Tanga Port. Museveni knows this, but he wants the tax for the operations done by both Heritage and Tullow. That is trying to ditch the back-pay on other companies whose buying their stake in the Lake Albert Basin.
Therefore, with the knowledge of the Acacia scandal, that is still going on to this day. Magufuli wanted back-pay for lack of taxes from the mining industry. Which is righteous, just like Museveni does at his place. The Tullow has now used years from 2015 to 2019. Acacia has now used 2017 to 2019. In 2018, the ownership of Acacia said it looked forward to negotiations with the government. This year in February, the company still have no resolution to the back-pay of taxes. That means the government of Magufuli have not fixed the same issue.
Just like the Ugandans haven’t fixed the farm-down and back-pay of operational taxes. Because, the company trying to configure itself out of taxes. Surely, Tanzania see the same acts by their mining industry. But in this regard, Magufuli wants to earn a dime on the oil exploitation in the Lake Albert Basin.
So, before the Tanzanian get it fixed with Acacia or Barrick in their own dominion. They should give time for Ugandans to fix their own tax dispute. They have even won it in an International Court. Therefore, the Ugandan case is stronger, than the one of Acacia. Whose only internally disputed.
That is why, this isn’t the faults of Uganda Revenue Authority, but of Tullow, whose trying to deflect the payment of taxes in the Republic. Something, Magufuli wouldn’t allow anyone operating in his territory. If so, why this hustle against Acacia and still not stopping it?
Because, Magufuli want the taxes and the proper payment for doing business in the United Republic. Just like Museveni want the proper payment for doing business in the Republic.
So, please Joseph, get your own domain straight, before throwing other people under the bus. Maybe, once in the while accept criticism. That might given your argument a more flair and less selfish reasons for addressing a neighbour and an ally. Peace.
In the Republic now its official that the companies that was supposed to buy the stake and the licences to drill for oil from Tullow Oil have backed out. This means, that Total and CNOOC is not operating or willing to foot-the-bill that Tullow left behind.
This is all a play for guards, they all want the slice of the price, but don’t want to be taxed for it. They want tax-holidays for operating and extracting the oil, even as the incentives to build the oil pipeline to Tanga, Tanzania is put on hold. Since a big part of the Lake Albert Basin is still in question. Since, the Tullow Oil doesn’t want to deal with the taxes in question.
Tullow Oil have to back-pay taxes, which it lost in court. They are obliged to pay these, but want the other companies to foot-the-bill, since they will drill and exploit situation. The others gather that this has occurred before they did and that Tullow should pay it. That is why it’s a dead-lock. Because, none of the companies want to pay the taxes.
This is the infamous taxes, which led to the Presidential Handshake drama and wobbling defence of it. That made all the people and civil servants dance for a hot minute. Now, we are seeing the deadlock because of this one.
The state is allowed and should tax the ones whose operating in their territory. Without a question or without any hesitation. Because, they should be able to pay for your rights to be able to do business somewhere. However, here it’s a mismatch of the amounts gained in courts and the planned surrender of Tullow.
Tullow considered that their Farm-Down deal with Total and CNOOC would clear their old debts with the Republic. Instead, the other companies want its shares, but not its past invoices. Which is natural. Because, your paying for other peoples misfortune and cost of operating. That is simple math.
It is Tullow that has done business, who has been operating and whose been in charge of certain parts of Lake Albert Basin. They got to stay responsible. Now, they just looking like a shell-company wanting to be a tax-evasion corporation, who puts their costs on their trading partners.
Within that reason, its understandable that Total and CNOOC wants to have other options and other obligations, also pay their taxes and returns, if they start to drill on the licences previously kept by Tullow. But at this moment, the company think it can get the hook and crook.
Because the victory of the President Handshake isn’t a bargain, but a huge toll for the company. That is why it wish to push the envelope to someone else. This is not natural, but not without a consequence. That they are backing out and giving way. Instead of going into business on these sectors of Lake Albert.
The loss, is also the proposed earnings, the supposed development of the oil sector and the pipeline to Tanzania. As everything stops and shuts its operations. As the CNOOC is sacking employees and who knows what Total does too. Tullow might even do it too, until they find someone who wants to pay their bills. Because, from history they showing that they don’t want too.
The state one, what was theirs, but the companies doesn’t want to pay to play. They want tax-holidays and a free ride to the promised land. That doesn’t happen and therefore, the stalemate and yet another set-back for the oil development there. Peace.
Today, the agreement published between Tullow, Total and CNOOC made a Sale and Purchase Agreement (SPA) on Area 1 and Area 2 in the Lake Albert Basin in the Republic of Uganda. That deal was issued on the 30th August 2016.
Now, nearly three years later. Tullow Oil has now back-tracked and said the deal didn’t go through. Surely the SPA and the Joint Venture Agreement wasn’t settled properly. If not, then the press release of Tullow wouldn’t say this:
“Tullow Oil plc (“Tullow”) announces it has been informed that its farm-down to Total and CNOOC will terminate at the end of today, 29 August 2019, following the expiry of the Sale and Purchase Agreements (SPAs)” (…) “The termination of this transaction is a result of being unable to agree all aspects of the tax treatment of the transaction with the Government of Uganda which was a condition to completing the SPAs. While Tullow’s capital gains tax position had been agreed as per the Group’s disclosure in its 2018 Full Year Results, the Ugandan Revenue Authority and the Joint Venture Partners could not agree on the availability of tax relief for the consideration to be paid by Total and CNOOC as buyers” (…) “Tullow will now initiate a new sales process to reduce its 33.33% Operated stake in the Lake Albert project which has over 1.5 billion barrels of discovered recoverable resources and is expected to produce over 230,000 bopd at peak production” (Tullow Oil plc – ‘Termination of farm-down agreement with Total and CNOOC in Uganda’ 29.08.2019).
This deal fell through because the companies didn’t want to compensate each other for back-taxes or the taxation of the possible profits to the Government of Uganda. Something that was approved upon the Joint Venture Agreement in August 2016 with Total and CNOOC.
This shows how hard it is start-up and the issues by operating in Uganda. Even Tullow Oil plc is trying to figure this one out. It was only in January 2017, when the Total was supposed to buy the biggest part of operated stake of 21,5% from Tullow. Surely, with the announcement in 2018 and now in 2019. This has all backfired and stopped, because URA and the companies couldn’t agree on their fees.
That dispute is the one that was interconnected with the “Presidential Handshake” of 2017. As the 6 billions shillings was doled around to civil servants and high ranking officials, who secure the capital tax gain from Heritage/Tullow Oil, which was awarded in February 2015.
Therefore, Tullow has to now find new buyers for their USD $167m stake in the Lake Albert Basin. This would be the payment of the Capital Gain Taxes (Awarded $157 Million) to the Uganda Revenue Authority. Apparently, Total and CNOOC didn’t want to do that apparently.
So from August 2016 to August 2019, the three companies and URA couldn’t come to an agreement on Capital Tax Gain, which Tullow owe URA after losing their case in February 2015. This shows, that the big victory of the state in this matter. Is actually making it harder to find someone who can afford or see it feasible to drill for oil in Area 1 and Area 2.
This is how it seems and the two other companies didn’t want to pay for what Tullow did before them. Peace.
“There is a lot of fake news about what is happening. We have been told that 11 people have died but that is not true. No one has died as a result of the drought and we are working round the clock to ensure that no one dies of hunger” – Deputy President William Ruto
The Deputy President William Ruto better just shut-up, listen to some advice and do something sincere, if it is first time in his life since he left the role as a wandering preacher. It is time for the hustler, the grand standing man of big PR Stunts to act swiftly and actually coordinate the government combined with the whole Nairobi machinery and all authorities. To ensure that the 1 million whose in jeopardy over a warned drought in Turkana gets help.
This is if the DP cares or even has a heart, unless he wants to continue to live lavish and enriching himself on others tragedy, because that is what he does. He sits in air-conditioned home, with a nice green garden, big pool and expensive cars. While fellow citizens go without food for days, because the DP cannot do his, neither any of the other Cabinet Secretaries.
This is really insulting to the people of Turkana. A people who deserves the state to act upon this. Even some people have suggested that its happen every ten years in the region. This means, the state has known about this, as this has happen every ten year. Not only the possible FEWS NET warning in December, which stated this and the state didn’t upon that. Not the Local Government, neither the National Government. They both didn’t act or see it fit to act differently, as the drought, the shortfall of rain was on the horizon. Still, they didn’t think of the consequences, because they are living good, secured and has a pantry with food, anyway.
There been reports of dead in various of villages and counties, however, the state does whatever it can to downplay this. Which is a disgrace, not only to the deceased, but to the public, which knows better. It is insulting to the ones who are struggling and lacking the basics, because the state didn’t plan to grain storage, education in caring for the environment or lean months. Alas, the state haven’t prepared or secured, the food insecurity, which it should have. Instead, they have busy scheduling corruption scandals.
The Jubilee, the DP and the cabinet combined with the local government in the drought hit region. Got to act, wisely and with measures to secure the lives at stake in Turkana. That is, if they really care or more preoccupied with keeping power by any means, while citizens are starving… it is happening on their watch. Still, they are trying to deflect that, its one million citizens who struggles to eat. They got nothing and awaiting handouts, because the state haven’t been concerned about their food insecurity.
DP Ruto, shut-up, listen and take some advice. DP Ruto, please open your ears, get some valuable advice and do something. Not try to PR Stunt this away. That is demeaning and insulting to the public of not only Turkana, but anyone who cares about humanity. Every single person dying because of this, is a foolish death. Because, you and your people could have ensured and facilitated the public and region. So, that it would be prepared for the upcoming dry-season, the shortfall of rain and the IPC 3 level. However, you where busy doing everything else. Peace.
Today is a day of warning, where the government, the local government and its authorities haven’t been prepared or cared for it. In its ignorance, the citizens of Turkana and its draught is happening, because their representatives and the state haven’t prepared for the shortfall of food nor water in the region. Even if there was waning signs months ago.
This is not just made up that Governor Josphat Nanok of Turkana County, CEO of NDMA James Odur, CS of Ministry of Devolution and ASALs Eugene Wamwalwa and so on. Can put the blame on everything else, but not on the intial inaction of their own government post. Even if that is true, because the FEWS warned about this in August/December 2018, because of lack of rain. Still, the government kept pumping like there was no tomorrow. Did nothing about it or didn’t handle it all. Since, who would make a fuzz anyway, right?
FEWS Network Warning Des. 2018:
“Performance of the October to December short rains was highly mixed across Kenya, leading to below-average crop performance and inadequate replenishment of rangeland resources in rainfall-deficit areas. In many pastoral and southeastern marginal agricultural areas, rainfall was below 85 percent of normal, while rainfall in the rest of the country was above average. Stressed (IPC Phase 2) outcomes are likely to persist in most pastoral and marginal agricultural areas through May, and an increase in the number of poor households in Crisis (IPC Phase 3) is expected in localized areas of Turkana, Wajir, and Garissa by February” (FEWS Net, 31.12.2018).
Kenyan Government response:
“The National Government has provided total of Kshs. 1,351,196,000 for response during the period of February, March and April 2019 as follows: Food and safety net Kshs. 601,196,000. Support to household irrigation water storage program (excavation of small water pans) Kshs. 600,000,000. Support to water trucking, maintenance and rehabilitation of boreholes Kshs. 150,000,000. Water trucking by NDMA in Mandera, Wajir, Turkana, Garissa, Marsabit and Tana River and maintenance of water points in selected areas. Hunger Safety Net Programme cash transfers by NDMA in Turkana, Wajir, Mandera and Marsabit” (…) “Nevertheless, the below-average short rains have slightly increased the food insecure population from 655,800 in August 2018 to current number of 1,111,500, with the top 12 counties having a total of 865,300 food insecure people” (Government of Kenya – ‘BRIEF ON CURRENT DROUGHT AND FOOD SECURITY SITUATION IN ASAL COUNTIES, MARCH 2019’ 15.03.2019).
What is sad is the amount of people starving in a midst of draught, in region, where the state could have acted more swiftly and with more manpower. Because, they knew perfectly well that this was happening. This is in a region where Tullow Oil Company plans to drill oil with over 300 oil wells. Meaning, there is money and resources, which should lead to progress and development. So, that the region and county isn’t as impoverish as it is. However, there seems to be little or none of the seeds of the oil to go to needed projects or facilities to help out the locals.
Instead, the international oil companies, which reached an agreement last year in 2018. Have had the ability to drill for oil and the leaders have been pocketing money. While the state and the local county officials haven’t secure the public. That is what is the initial bargain in all of this. The public officials have been busy eating and now the public aren’t even getting bread-crumbs of the spoils. That’s what is even more sad about this situation. Knowing the region had hopes for the oil adventure and now seeing a drought, which brings even more despair.
Lochikar Basin haven’t brought anything to the local community, other than foreign investors pumping out their valuable resources, while the deal between Tullow and Government remains secret. As well, as the scarcity of water and other needed components of life, continue to run rampant in a region, which should have gotten some of the spoils of the wealth that is created there. Instead, the government cartels and public officials, who does not want to associate with the demise of the people in the drought, eat that up.
This could have been avoided, the state could have acted and the Turkana with their Oil should have had the resources to cope with it and be able to buy the needed imports of food and water. Alas, someone else is eating that, as long as the oil trucks are driving to Mombasa and the public see less or little of trade of it all.
While the sun is burning, little or no rain, while they await for a handout, when the government could have footed the bill, by the earnings of the oil alone. Peace.