Uganda Government said it expects to finalise a $2.2 billion loan deal with China’s Exim bank by the end of the year to pay for part of a railway line to connect Kenya’s Mombasa seaport with Kampala.
Uganda has also reached an agreement with Kenya where the two countries have committed to work on the project simultaneously with the aim of completing it by 2022.
The new so-called standard gauge railway (SGR) line will replace an existing old line to help to make shipments faster and cheaper.
China is helping to fund the project in both countries. As in other areas of Sub-Saharan Africa, China has become a major investor in Uganda. It has mostly put money into roads, hydro power dams, fibre optic cable networks and other infrastructure, usually offering cheap loans.
Uganda’s Works and Transport Minister Monica Azuba Ntege told a news conference in Kampala negotiations with Exim bank were in “advanced stages.”
“Their team has already been here but there are some other things that they wanted and we have already supplied them. So I really believe that any time this year they will be calling on us to sign that agreement.” she said.
A Uganda team had held discussions with Exim Bank while in China for the China-Africa forum in September, she said.
On the deal with Kenya, she said the “harmonisation” of the project between the governments of Uganda and Kenya had been undertaken. “The plan is for the two countries to have completed their respective (rail) sections ... by June 2022.”
In the long term, there are plans to extend the line deeper into the region’s hinterland to include lines to South Sudan, eastern Congo and Rwanda.
Uganda is seeking $2.2 billion from Exim Bank to fund its section of the project, about 273 kilometres from Kampala to Malaba on the border with Kenya.
China’s China Harbour and Engineering Company Ltd has been awarded the contract.
The new railway will replace a decrepit, narrow-gauge railway line built about a century ago by the British to ship copper from mines in western Uganda and other commodities from their East African colonies.
HSBC and UBS have closed their offices in Nigeria, the country’s central bank said in a report on Friday as it revealed foreign investment had fallen sharply from a year ago.
The bank said foreign direct investment in Nigeria fell to 379.84 billion naira ($1.2 billion) in the first half of the year from 532.63 billion naira ($1.7 billion) a year earlier.
It did not given reasons for the bank closures.
HSBC was not available to comment and UBS declined to comment.
The central bank said the outlook for the Nigerian economy in the second half was “optimistic” given higher oil prices and production but rising foreign debt and uncertainty surrounding the 2019 presidential election was a drawback.
Investor confidence in the West African country has been shaken since the central bank in August ordered MTN to bring back $8.1 billion to the country, part of profits which the South African telecoms firm sent abroad.
An HSBC research note dated July 18 said a second Buhari term “raises the risk of limited economic progress and further fiscal deterioration, prolonging the stagnation of his first term, particularly if there is no move towards completing reform of the exchange rate system or fiscal adjustments that diversify government revenues away from oil.”
The Nigerian Presidency has reacted furiously after British multinational banks report. In a statement, the Presidency accused the bank of thriving on "grand corruption" and helping past and present Nigerian leaders launder billions of naira.
The central bank also said three lenders failed to meet its minimum liquidity ratio of 30 percent, without naming them.
It added that non-performing loans (NPLs) have dropped to 12.4 percent as at June 2018 from 15 percent a year ago, still a long way above its 5 percent threshold.
“To further consolidate on the improvement, the Central Bank of Nigeria directed banks to intensify efforts at debt recovery, realisation of collateral for lost facilities and strengthening their risk management processes,” it said in the report.
In September, the regulator withdrew the license of Skye Bank for failing to recapitalise. It then transferred Skye’s assets to a “bridge bank” Polaris wholly-owned by the state-backed asset management company AMCON.
Nigerian banks have been trying to raise fresh capital after huge loan losses worsened by an economy that has just emerged from a recession. Diamond Bank last week denied it was in talks with investors to raise cash but said it was managing its capital, which borders on the regulatory minimum, to grow.
Another lender Unity Bank has been seeking to raise fresh funds to recapitalise.
Credit - Reuters