Month: May 2025

Article 47 of the Constitution of Kenya, 2010 (the Constitution) guarantees that every person shall enjoy the right to fair administrative action that is expeditious, efficient, lawful, reasonable, and procedurally fair. An inherent aspect of this right is the obligation placed on the government to provide written reasons for administrative action that is likely to adversely affect any person. This is what is referred to as the duty to give reasons for administrative actions or decisions.

In the arena of taxation, the duty to give reasons for tax-related decisions made by the Kenya Revenue Authority (KRA) is crucial if the Government of Kenya is to establish a public finance system that promotes an equitable society where the tax burden is shared equally as required by Article 201 of the Constitution.

However, in practice, this duty to give reasons is not always adhered to. Frequently, taxpayers find themselves at a loss when faced with KRA’s decisions that fail to elaborate the reasons upon which tax assessments or other decisions have been made.

Fortunately, the High Court has considered and made its determination on KRA’s duty to provide reasons in a recent tax decision. In this article, we analyse a recent Judgment of the High Court (Majanja J) delivered in Joseph Muriithi Ndirangu t/a Ndirangu Hardware v Commissioner of Domestic Taxes (2023) KEHC 19357 (KLR).

Background to the Case

In this instance, the appeal to the Court arose from a Judgment of the Tax Appeals Tribunal (the Tribunal) in Joseph Muriithi Ndirangu t/a Ndirangu Hardware v Commissioner of Domestic Taxes (Tax Appeals Tribunal, Tax Appeal No. 202 of 2018) setting aside an assessment on the grounds that KRA failed to give written reasons for its decision to issue a Value Added Tax (VAT) assessment of KES 8,576,321 to Ndirangu Hardware (the Appellant).

Ordinarily, when a taxpayer lodges an objection from a tax assessment with KRA, KRA is obligated to consider the objection and respond in writing with an objection decision detailing the reasons for either accepting or rejecting the objection. This was the Tribunal’s previous finding in Local Productions Kenya Limited v Commissioner of Domestic Taxes (Tax Appeals Tribunal, Tax Appeal No. 50 of 2017).

By providing a detailed and reasoned decision as required by the Constitution and the law, a taxpayer is better equipped to challenge such a decision whether through an appeal to the Tribunal or by way of an application to the High Court for judicial review of the decision.

However, these statutory avenues to challenge KRA’s decisions are meaningless in circumstances where taxpayers do not understand the basis or reasoning for tax assessments or other decisions taken by KRA and therefore cannot easily ascertain whether such assessments or decisions are inaccurate or unlawful.

The genesis of this dispute was KRA’s selection of the Appellant’s case as part of its Revenue Enhancement Initiatives (REI) flowing from data collected under the Government’s Integrated Financial Management Information System (IFMIS) in the year 2015.

KRA issued additional assessments on the taxpayer for the years 2015 and 2016 based on a verification exercise of the Appellant’s VAT declarations, which exercise elicited a finding that the Appellant had not declared VAT charged on taxable supplies to the Kenya Forest Service (KFS).

The Appellant objected to the additional assessments, following which KRA issued an objection decision affirming the assessments on 14th August 2018 (the Objection Decision).

Aggrieved by the Objection Decision, the Appellant lodged an appeal to the Tribunal against the Objection Decision on the grounds that KRA rendered the Objection Decision without giving reasons. In response, KRA contended that the Appellant had made taxable supplies to the KFS in the year 2015 for which VAT was not declared. KRA further contended that the Appellant did not discharge its burden of proof by availing evidence to support its claim of having remitted VAT for the taxable supplies to KFS.

Having heard all the parties, the Tribunal found that the Appellant’s claim of having remitted VAT for the taxable supplies to KFS was not supported by evidence. Consequently, the Tribunal held that KRA was well within the law to raise the additional assessments.

High Court Decision

At the High Court, it was found that the issues raised on appeal were similar to those raised at the Tribunal. The Court reconsidered KRA’s Objection Decision and found that KRA did not provide adequate reasons for rejecting the Appellant’s objection as required by the Constitution and statute.

The Court opined that the requirement to give reasons for an Objection Decision under the Constitution and section 51(10) of the Tax Procedures Act, 2015 (TP Act) was couched in mandatory terms. Consequently, the Court agreed with the Appellant’s contention that the purported Objection Decision was inadequate for failure to give reasons and did not amount to a valid Objection Decision as contemplated by law.

In the Court’s view, the duty to give reasons was not a trifling requirement as it is a Constitutional mandate embedded in the right to fair administrative action guaranteed by Article 47 of the Constitution. Further, the Court held that the right to fair administrative action as protected by the Fair Administrative Action Act, 2015 (the FAA Act) requires administrative bodies to provide reasons for an administrative action as a matter of course where a right under the Bill of Rights has been or is likely to be adversely affected by administrative action.

The Court’s conclusion was that the Objection Decision was inadequate for not providing adequate written reasons for the decision. As such, the Objection Decision was null and void ab initio. The Tribunal’s Judgment was set aside with the Appellant’s objection to the tax assessment being consequently allowed.

The High Court’s decision in Joseph Muriithi Ndirangu t/a Ndirangu Hardware v Commissioner of Domestic Taxes largely affirms the earlier decision by the Tribunal in Local Productions Kenya Limited v Commissioner of Domestic Taxes (Tax Appeals Tribunal, Tax Appeal No. 50 of 2017). In this case, the Tribunal also held that taxpayers have a constitutioal right to be given reasons for tax decisions made by KRA in line with the Constitution, the TP Act and the FAA Act. The case concerned an appeal lodged by Local Production Kenya Limited (LPK) against a tax decision by the KRA. LPK was engaged in the business of producing and commissioning production of television content as well as provision of quality review and control services for television content and sought input VAT refunds based on its supply of zero-rated exported services to its non-resident customers. Following negotiations between LPK and KRA, it was agreed that KRA would disallow a portion of the refund claims.

However, KRA disallowed the entirety of the refund claim through a notice uploaded on LPK’s account on KRA’s iTax web portal, which notice did not give reasons for the tax decision rejecting LPK’s refund claim. Following this notice, LPK was aggrieved and filed an objection, providing supplementary information which KRA had failed to consider in arriving at its tax decision. LPK thereafter appealed to the Tribunal.

LPK’s position was that KRA acted in complete disregard of section 49 of the TP Act as well as section 4 of the FAA Act by failing to give reasons for its decision to reject LPK’s tax refund claim. The law requires KRA to provide written reasons where it refuses a taxpayer’s application under any tax law.

KRA’s position was that there were no procedural lapses in rejecting the LPK’s input VAT refund. KRA claimed that the refund was rejected because LPK failed to separate its own export services from those performed on behalf of its clients.

The Tribunal held that section 49 of the TP Act imposes a mandatory duty on KRA to provide a statement of reasons for tax decisions. The Tribunal further observed that the duty to give reasons for tax decisions is interpreted through the lens of the right to fair administrative action as enshrined under Article 47 of the Constitution.

In light of the above reasoning, the Tribunal found that KRA acted in violation of LPK’s right to fair administrative action contrary to section 4 of the FAA Act which requires written reasons be given for administrative actions taken by public authorities that negatively affect individuals.

Key Takeaway

From the foregoing cases, it clearly emerges that KRA is under a duty to provide reasons for tax assessments and its other tax decisions. This is a crucial aspect of maintaining a fair, just and transparent tax dispute resolution regime. The provision of reasons for tax decisions ensures that taxpayers understand and have access to the rationale behind tax assessments and other KRA decisions, facilitating their right to challenge any inaccurate tax assessments or unlawful decisions made by KRA. This can only promote the fundamental constitutional values of justice, fairness, transparency, and accountability.

At any rate, as the maker of the decision, KRA should have no difficulty explaining the reasoning behind the decision, failure to which it may be inferred that the decision lacked any reasoning in the first place. Giving reasons for the decision is thus beneficial for both KRA and the taxpayer.

For a continent that has historically maintained the lowest carbon footprint globally, Africa’s recent strides in low-carbon development signal two critical shifts. First, the urgency to address climate change is undeniable, as its impacts threaten to reverse decades of hard-won development progress. Second, Africa is positioning itself at the heart of the global transition to a low-carbon economy, leveraging its vast natural resources, human capital, and innovative potential to drive sustainable growth on its own terms.

Guided by the African Union’s Agenda 2063, which envisions economic transformation in harmony with climate priorities, Africa’s green transition is unfolding at multiple levels—regional, national, and local. Governments, businesses, and communities are actively implementing to cut carbon emissions and advance green growth.

Policy and Strategic Milestones

A major milestone in Africa’s green transition occurred at the 38th African Union Summit in February 2025, where Heads of State adopted strategies on sustainable aviation fuels, green hydrogen, energy efficiency, and climate-smart infrastructure. These commitments build on the Nairobi Declaration on Climate Change and Call to Action (September 2023) and are already shaping national strategies or the other way around. Ghana, for instance, has outlined a pathway to net-zero emissions by 2060, emphasizing a shift to biofuels in aviation and shipping. South Africa’s Just Energy Transition Implementation Plan (2023-2027) prioritizes renewable energy investments, energy efficiency, and climate-smart rail infrastructure, aligning with its 2050 energy transition goals.

Private Sector-Led Low-Carbon Projects

The private sector is playing an increasing role in Africa’s low-carbon transition, particularly through public-private partnerships (PPPs). One example is the 200 MW Sanankoroba Solar Power Station in Mali, which broke ground in May 2024 under a PPP between the Malian government and NovaWind (a subsidiary of Rosatom). The project, which is West Africa’s largest solar plant, is expected to significantly expand Mali’s renewable energy capacity. Similarly, South Africa’s 140 MW Umsinde Emoyeni Wind Power Station, currently under construction, will supply power to Sibanye-Stillwater, a major mining conglomerate, through a 20-year power purchase agreement. The project is led by a consortium that includes African Clean Energy Developments and Energy Infrastructure Management Services.

Green Financing Accelerates Climate Action

Private sector investment in climate financing in Africa is gaining momentum. This is an upside development for the continent, having historically depended heavily on public funds from external sources to finance climate action. At the global level, the Climate Investment Funds (CIF) issued its inaugural $500 million bond in January 2025 to mobilize private sector capital for low-carbon technologies in emerging markets. The bond was highly oversubscribed, attracting orders exceeding $3 billion, highlighting strong investor interest in climate-aligned initiatives, particularly in developing economies.

It is also encouraging to see funding availability for private sector-led climate action. In July 2024, Helios Investment Partners launched the Helios Climate, Energy Access, and Resilience (CLEAR) Fund, securing an initial $200 million to support mid-sized African companies in sectors such as low-carbon energy, climate-smart agriculture, sustainable mobility, recycling, and digital climate solutions. The fund is backed by major development finance institutions, including the UK’s development finance institution, the European Investment Bank, and the Dutch Development Bank.

Looking Ahead: Strategic Steps to Accelerate Momentum in 2025 and Beyond

As 2025 marks a crucial year for revising Nationally Determined Contributions (NDCs) under the Paris Agreement, Africa’s top greenhouse gas emitters are expected to raise their emissions reduction targets. Key areas of focus will include scaling up renewable energy investments, enhancing energy efficiency, deploying electric vehicles, and decarbonizing high-to-abate sectors. Africa must carefully navigate key challenges, opportunities, and critical factors that will shape the success of its green transition.

Africa’s green transition is constrained by a massive financing gap, with only 17.8% of mitigation and 20% of adaptation finance needs met between 2021 and 2022. Overreliance on external public funding—82% of which 76% comes from multilateral institutions and bilateral donors—is unsustainable, especially amid potential cuts following a U.S. Paris Agreement exit. To diversify funding sources by attracting private capital, Africa must scale carbon markets, explore carbon taxes, and introduce take-back obligations in hard-to-abate sectors, which require legal reforms in industries like oil and gas. Senegal, Nigeria, Mozambique, Zambia, Uganda, and Zimbabwe are advancing carbon pricing instruments, signaling a regional shift toward innovative climate finance solutions. Countries without carbon market/carbon tax regimes must urgently develop regulatory frameworks to secure investor confidence in navigating risks.

Energy transition as a key component of Africa’s green transition is often framed as expanding renewables to electrify millions of Africans without power. However, less focus is placed on the business case for private sector-led clean energy investments in productive sectors. Stimulating demand requires strategic policies—tax incentives, tariff adjustments, and industrial policies—to align energy supply with industry needs and drive growth.

Carbon Capture and Storage (CCS) is emerging as a key decarbonization tool for Africa’s high-emitting industries, with countries like Ghana, Uganda, Egypt, Nigeria, and South Africa integrating it into their energy transition strategies. Many African countries may overlook the fact that CCS could usher in a new era of resource extraction, given the continent’s favorable geology, particularly the East African Rift basalts. Africa cannot afford to remain on the sidelines while the rest of the world advances in CCS innovation. To fully capitalize on this potential, a deep understanding of CCS technology is essential. South Africa leads in CCS research and pilot project, backed by the World Bank, while Nigeria hosts the Africa Center of Excellence for Carbon Management Technology and Innovation to advance and accelerate the deployment of carbon management technologies in Africa including CCS. To harness CCS effectively, African governments must establish robust policy, legal, and regulatory frameworks for CCS, invest in R&D, and develop infrastructure through public-private partnerships to accelerate industry growth and attract investment. Additionally, governments need to commit funding to accelerate the development of a viable CCS industry.

Africa’s green transition plans must align with global decarbonization trends. Africa does not operate in isolation—its industries are shaped by global decarbonization policies such as the EU’s Carbon Border Adjustment Mechanism (CBAM), just as its actions influence international markets. However, it appears that some national transition plans fail to reflect this reality. Ghana’s energy transition and investment plan, for instance, aims for net-zero emissions in the steel and cement industries beginning in 2040, yet the CBAM, which prohibits  such high-emission products’ entry into the EU, will take full effect by 2026. This 14-year misalignment could leave Ghanaian businesses noncompetitive in the EU market. To avoid such risks, African countries must align their transition strategies with global policies, ensuring competitiveness and meaningful climate action.

In conclusion, Africa’s green transition presents vast opportunities, but success hinges on strategic financing, regulatory clarity, and alignment with global decarbonization policies. By scaling carbon markets, supporting clean energy in industries, and leveraging technologies like CCS, Africa can drive sustainable development while remaining competitive in the evolving global economy.

Interim measures of protection in arbitration have emerged as a vital tool in safeguarding the interests of parties engaged in dispute resolution. In Kenya, this aspect of arbitration law has garnered significant attention, as it bridges the gap between the initiation of arbitration proceedings and the final award. The ability to secure interim relief can be crucial in preserving assets, maintaining the status quo, and ensuring that the arbitration process remains effective and equitable. With the rise of complex commercial disputes and the increasing reliance on arbitration as a preferred method of dispute resolution, understanding the nuances of interim measures in Kenya is more pertinent than ever. This article delves into the evolving landscape of interim measures of protection in Kenyan arbitration, exploring landmark cases, legislative frameworks, and the delicate balance between Court intervention and arbitral autonomy.

Nature of Interim Measures of Protection

An interim measure of protection is an order issued by either a Court or an arbitral tribunal aimed at preserving the status quo or preventing the dissipation of assets pending the resolution of the dispute. These measures can be granted either before the commencement of the proceedings before the tribunal or during the proceedings, but before an award has been rendered. Importantly, the granting of these measures is discretionary and not a matter of right. Various conditions must be met before a tribunal or Court can grant them, particularly when it comes to Court-issued measures. This discretion ensures that Courts do not overstep their bounds and usurp the role of the arbitral tribunal.

Originally, Courts were the sole judicial authority empowered to grant interim measures of protection. However, this position has evolved, with many countries revising their national arbitration laws to explicitly recognize the concurrent jurisdiction of both Courts and arbitral tribunals. Arbitral tribunals in Kenya are permitted to grant preliminary and/or interim relief under both the Arbitration Act, 1995 (the Arbitration Act) and institutional rules applicable within the Kenyan jurisdiction. Specifically – Section 18 (1) (a) of the Arbitration Act – An arbitral tribunal can order a party to take such interim measures of protection as it deems necessary or appropriate.

• Rule 18 (2) (i) of the Chartered Institute of Arbitrators Rules (CIArb Rules) – An arbitral tribunal has jurisdiction to make one or more interim awards, including injunctive relief and conservatory measures.
• Rule 27 (1) of the Nairobi Centre for International Arbitration Rules, 2015 (NCIA Rules) – An arbitral tribunal, subject to the agreement between the parties, can issue a range of interim or conservatory orders in the arbitration.

An interim award made pursuant to the CIArb Rules and the NCIA Rules is final and binding upon the parties pursuant to the Arbitration Act and the institutional rules, which define an “arbitral award”  to include any award by the arbitral tribunal, including an interim award. There is no automatic right of appeal against a decision allowing an application for security for costs brought under section 18 of the Arbitration Act. A party may only appeal such a decision on a point of law that arises within the arbitration or stemming from an award to the High Court (under section 39 of the Arbitration Act). This recourse, however, is only available where parties have expressly reserved their right of appeal. In the absence of such an agreement by the parties, an Arbitrator’s award is final and binding and can only be set aside or its enforcement challenged on the basis of the limited grounds set out under section 35 and section 37 of the Arbitration Act.

Role of the Courts

Section 7 (1) of the Arbitration Act provides that the High Court may allow applications for interim measures when so moved by either of the parties. The primary objective of Courts when intervening is to ensure that the subject matter of the arbitration proceedings is not jeopardised before an award is issued, thereby rendering the entire proceedings otiose.

This purpose was well elaborated in the case of CMC Holdings Limited v Jaguar Land Rover Exports Limited (2013) eKLR as follows: “In practice, parties to international arbitrations normally seek interim measures of protection. They provide a party to the arbitration an immediate and temporary injunction if an award subsequently is to be effective. The measures are intended to preserve assets or evidence which are likely to be wasted if conservatory orders are not issued. These orders are not automatic. The purpose of an interim measure of protection is to ensure that the subject matter will be in the same state as it was at the commencement or during the arbitral proceedings. The Court must be satisfied that the subject matter of the arbitral proceedings will not be in the same state at the time the arbitral reference is concluded before it can grant an interim measure of protection.”

Section 7 (2) of the Arbitration Act states that where a party applies to the High Court for an injunction or other interim order and the arbitral tribunal has already ruled on any matter relevant to the application, the High Court shall treat the ruling, or any finding of fact made in the course of the ruling as conclusive for the purposes of the application.

Conditions for Grant of an Interim Measure of Protection

The conditions that a Court or arbitral tribunal must consider before granting interim measures of protection have become well established under Kenyan law. These principles were clearly outlined in the landmark case of Safaricom Limited v Ocean View Beach Limited & 2 Others (2010) eKLR which set out the following criteria for consideration: The existence of an arbitration agreement.

• Whether the subject matter of the arbitration is under threat.
• A careful assessment of the appropriate measure of protection based on the merits of the application.
• If the measure is requested before the arbitration proceedings commence, the Court or tribunal must specify the duration of the measure to prevent overstepping the tribunal’s authority.

In addition, the case of Futureway Limited v National Oil Corporation of Kenya (2017) eKLR introduced further considerations, including:

• The urgency with which the applicant has approached the Court.
• The risk of substantial (though not necessarily irreparable) harm or prejudice if the protection is not granted.

These criteria underscore the careful balance that must be struck between providing necessary protection and respecting the autonomy of the arbitral process. As Kenyan jurisprudence continues to evolve, these guiding principles ensure that interim measures are applied judiciously and fairly, maintaining the integrity of both the arbitration process and the subject matter in dispute.

Emergency Arbitration

In certain cases, the urgency of a matter may require one party to seek interim measures even before an arbitral tribunal has been fully constituted. To address such situations, an increasing number of the leading arbitral institutional rules now include provisions for the appointment of emergency arbitrators. Emergency arbitrators enable parties to obtain urgent relief before the tribunal is constituted and without having to go to Court.

Emergency arbitration is a process that allows parties to seek urgent interim relief before a full arbitral tribunal is constituted. This mechanism is typically invoked when a dispute requires immediate attention, and the parties cannot afford to wait for the formation of the standard tribunal. An emergency arbitrator is usually appointed to hear an application for interim relief pending the substantive arbitration.

Key advantages of emergency arbitration over seeking interim measures from Courts include maintaining the confidentiality of the proceedings, avoiding the jurisdictional pitfalls in seeking Court intervention highlighted above and, in some cases, assuaging the concerns of parties that are apprehensive of obtaining justice from local Courts, especially in the case of foreign parties seeking remedies against national governments and their institutions.

In Kenya, the Arbitration Act and Arbitration Rules do not specifically address emergency or expedited arbitration. However, both the NCIA Rules and the CIArb Rules have provisions in place for managing expedited and emergency arbitrations. Under the CIArb Rules, an emergency arbitrator must be appointed within two (2) days of an application, with the expectation that the arbitrator will resolve the issues raised in the request for interim measures as quickly as possible, ideally within fifteen (15) days of their appointment. Importantly, the emergency arbitrator is also required to ensure that all parties receive reasonable notice and an opportunity to be heard.

The NCIA Rules equally require an emergency arbitrator to be appointed within two (2) days, and the arbitrator is required to establish a schedule for considering the emergency arbitration within two (2) days and make an order or award within fifteen (15) days from appointment, subject to any extensions as may be agreed by the parties. Under Rule 28 (4) of the NCIA Rules, upon expedited formation of the arbitral tribunal, the emergency arbitrator shall have no further power to act in the dispute. Under Rule 28 (6) of the NCIA Rules, an order or award made by the emergency arbitrator is binding on all the parties upon being issued.

It is expected that going forward, parties will increasingly adopt emergency arbitration in seeking interim measures of protection.

In a significant milestone for Zimbabwe’s environmental policy, the government enacted the Carbon Trading (General) Regulations Statutory Instrument 48 of 2025. This regulation marks a critical step towards integrating Zimbabwe into the global carbon market, creating avenues for sustainable development, environmental conservation, and economic growth.

Significance of the Regulations

The SI 48/2025 establishes a comprehensive legal framework for the operation of carbon trading in Zimbabwe. It formalizes procedures for monitoring, reporting, and verification (MRV) of carbon emissions, and sets standards for voluntary and compliance-based carbon market activities.

The regulation aligns Zimbabwe with international climate agreements such as the Paris Agreement, demonstrating the country’s commitment to reducing greenhouse gases (GHGs). It also aims to incentivize local industries, farmers, and communities to adopt sustainable practices by providing financial benefits through carbon credits.

Furthermore, the regulation emphasizes transparency, legitimacy, and environmental integrity in transactions, fostering trust among international buyers and local stakeholders. This can galvanize investment in Zimbabwe’s carbon projects, including reforestation, renewable energy, and sustainable agriculture.

Opportunities Presented by SI 48/2025

1. Economic Diversification and Revenue Generation:
   By entering the carbon market, Zimbabwe can generate new revenue streams through the sale of carbon credits. This can boost the economy, especially in rural areas, and create employment opportunities in project development, monitoring, and trading.
2. Promotion of Sustainable Projects:
   The regulations incentivize investments in renewable energy (solar, wind), reforestation, and climate-smart agriculture, aligning environmental preservation with economic development.
3. Enhanced Climate Resilience:
   Projects developed under the regulation can improve local climate resilience, supporting communities vulnerable to climate change impacts like droughts and floods.
4. Strengthening Regional Climate Diplomacy:
   Zimbabwe’s active participation in carbon markets can enhance its stature within regional climate initiatives like the Southern African Development Community (SADC).
5. Capacity Building and Technology Transfer:
   Implementation requires developing local expertise in MRV systems, carbon accounting, and project development, fostering technological advancement.

Challenges and Outlook

While the regulations open promising avenues, challenges such as establishing robust monitoring mechanisms, potential market volatility, and ensuring equitable benefit distribution remain. Capacity gaps in local institutions and awareness among communities need addressing to maximize benefits.

Looking forward, the outlook is optimistic if Zimbabwe leverages these regulations proactively. The government’s emphasis on environmental sustainability and economic growth suggests a strategic long-term vision. Collaboration with international investors, NGOs, and climate finance institutions can further accelerate progress.

Conclusion

Zimbabwe’s Carbon Trading (General) Regulations SI 48 of 2025 marks a pioneering move toward integrating climate action with economic opportunity. By harnessing its natural resources and committing to sustainable development, Zimbabwe has the potential to become a regional leader in carbon trading, supporting both environmental goals and economic resilience.

This regulatory framework promises a future where environmental stewardship and economic growth go hand in hand, but success will depend on effective implementation and stakeholder engagement across all levels.

Energy, Natural Resources and Extractives sectors

1. Theres renewed focus by the regulators and the government to advance the conversation on the linkage between the Mining industry and the Energy Transition with a focus on optimally utilizing strategic minerals for socio-economic transformation.
2. Government of Uganda commissioned the Karuma Hydropower Plant with an installed capacity of 600MW. The project was financed by the Government of Uganda and the People’s Republic of China, through a loan from the Exim Bank of China contributing up to 85% (US$1.435 billion) of the Engineering, Procurement and Construction (EPC) cost, while Government of Uganda contributed 15%( US$253.26 million) bringing the total to US $1,688,380,000. This development comes amidst the constant need for investments in the energy sector to reduce of power for industrialization. The government is keen on offering support to private investments in the energy sector.
3. Following the landmark Final Investment Decision announced in 2022 by the joint venture partners—TotalEnergies E&P Uganda, China National Offshore Oil Company (CNOOC) Uganda Ltd, and Uganda National Oil Company (UNOC)—Uganda’s vision to develop its oil and gas sector continues to grow. The key projects include the Tilenga and Kingfisher projects in the Upstream sector, with investments upwards of US $6 billion, alongside the East African Crude Oil Pipeline (EACOP) valued at US $5 billion, and the Uganda Refinery project, estimated at US $4 billion, both in the Midstream sector. Many companies continue to pay keen attention to the oil and gas sector of Uganda due to the increased opportunities brought about by the FID for the East African Crude Oil Pipeline Project and the Uganda Refinery Project.  In December 2023, the Government signed a Memorandum of Understanding (MOU) with Alpha MBM Investments LLC from the UAE for the development of Uganda’s refinery. Negotiations for the key commercial agreements, including the Implementation, Crude Oil Supply, and Shareholders Agreements between the Government and Alpha MBM Investments LLC began in January 2024 and are currently ongoing. Once these agreements are finalised, the consortium is expected to promptly begin the project implementation.
4. The Engineering, Procurement, Construction Management and Commissioning (EPCMC) activities for the East African Crude Oil Pipeline project are ongoing in London, and Dar es Salaam. Worley is undertaking this work with its subcontractors – ICS Engineering in Uganda and Norplan in Tanzania. The overall progress of the EPCMC activities is at 39.2%; the engineering phase at 81.1%, procurement at 54.5%, and construction and commissioning at 15.4%. Detailed engineering, being carried out by Worley, at 89.1%. China Petroleum Pipeline Engineering Ltd (CPP), the pipeline construction contractor, has begun civil works at the Pump Stations (PS) and Main Camp and Pipe Yard (MCPY) sites in both Uganda and Tanzania.
5. The Government continues efforts to make new discoveries to enhance current petroleum resources, which stand at 6.5 billion barrels (with 1.5 billion recoverable). In February and May 2023, additional exploration licenses were granted to Uganda National Oil Company and DGR Energy Turaco Uganda SMC Limited for the Kasuruban and Turaco contract areas, respectively. These licenses concluded the Second Competitive Licensing Round, which began in 2019. Both companies are now conducting technical studies and gathering data in preparation for exploration drilling. The Ministry is also conducting preliminary petroleum exploration studies in the Moroto-Kadam Basin to assess its oil and gas potential.
6. Similar surveys have started in the Kyoga Basin, with plans to initiate studies in the Hoima Basin soon. Early results suggest the potential for commercial oil and gas in the Moroto-Kadam Basin. These exploration efforts are expected to increase Uganda’s petroleum reserves. In January 2023, TotalEnergies E&P applied for certificates of surrender for the Jobi-East and Mpyo discoveries, followed by the Lyec discovery in December 2023. Field assessments were conducted to evaluate site conditions and address compliance issues, with the goal of finalizing these handovers. The process is expected to be completed by the end of 2024.

Corporate, Banking and Finance

• Uganda Banking Sector launched the ESG framework. The passing of the ESG framework for the Banking and Financial Sector follows a meeting between Uganda Bankers Association and the Bank of Uganda in January 2023 regarding the institutionalization of the ESG agenda in Uganda. The framework mandates of the finance sector to embed ESG within their core strategy and way of doing business, so as to establish a culture of sustainability and responsible banking practices within the banks, Integrate financing strategies/ products such as green loans, financing for businesses from marginalized communities, promoting sustainable practices, financial inclusivity and ensure a holistic risk and resilience approach and strengthening the banks’ existing practices with the inclusion of ESG-specific impact variables
• The High court of Uganda granted an arbitration award premised on London interbank offered Rate (LIBOR). The decision offers support to lenders with similar LIBOR referenced contracts in Uganda. There is no need to novate the affected contracts to reference the new synthetic rates being used post LIBOR.
• The Bank of Uganda projected its external debt servicing to account for about 35% of the GDP in 2024/2025 in lieu of the fact that public debt had increased to 96.1 trillion Uganda shillings(25.3billion US Dollars as of 2024.

 

TAX MATTERS

• The Convention on Mutual Administrative Assistance in Tax Matters (Implementation) Act, 2023 gives force of law in Uganda to the Convention on Mutual Administrative Assistance in Tax Matters, the Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information and the Standard for Automatic Exchange of Financial Account Information in tax and related matters.
• The 2024 Income Tax Amendment Act exempts of certain incomes including the following income, these include incomes derived from a private equity or venture capital funds regulated under the Capital Markets Authority Act of Uganda, incomes derived from the disposal of government securities on the secondary market and those earned by strategic investors manufacturing electric vehicles, batteries, charging equipment and fabricators of electric vehicle bodies.
• The 2024 Income Tax Amendment Act introduced the term a “permanent establishment” to replace ” a branch” and new profit attribution rules to replace the current computation of a branch’s chargeable income in assessing incomes of Multi-National Companies and a 10% withholding tax on commissions paid to payment service providers in lieu of the growth of Psps in Uganda.

GOVERNMENT BUSINESS AND REGULATION

• Uganda National Bureau of Statistics issued guidelines for beauty products/cosmetic products in Uganda Issued on March 19^th, 2024.
• Government is in the process of enacting a law on Human assisted reproductive technology. The bill if enacted will provide a legal framework for registration of IVF facilities, prohibition of use of genetic materials not from human origins and strict data protection and privacy requirements.(Human assisted reproductive technology bill of 2023)
• Rationalization of government agencies tabled in parliament to merge government agencies with line ministries.
• The government in the process of passing the contract farming bill to regulate contract farming ie agreements between buyers and farmers for future produce, block farming(consolidation of small plots for mass production). It is believed that the the law will free up large tracts of land for commercial production.
• The regulations on data protection by the data protection office will be launched in the by January 2025.
• The competition and antitrust law enacted into law in Uganda after several years.
• The latest Africa attractiveness report by Ernst and Young shows Uganda recorded FDI of 10.2 billion Us Dollars the highest in East Africa in 2023.
• Uganda removed from the FAFT grey list.

INFRUSTRUCTURE & PPPS

• The constitutional court ruled in favor of governments commitment towards PPP The decision affirms the powers of government to initiate procurement for PPPs and executive sovereign financial instruments such as promissory notes as commitments to undertake PPPS in Uganda under the Public finance management act.
• Uganda Communications Commission launched a digital audio broadcasting pilot to identify policy, regulatory and operational requirements to harness digital radio alongside FM, internet and satellite radio.

AFRICA TRADE, COUNTRY EXPANSION AND SMES AND TMT

• Uganda National Bureau of Statistics issued guidelines for beauty products/cosmetic products in Uganda Issued on March 19^th
• The regulations on data protection by the data protection office will be launched in the by January 2025.
• The competition and antitrust law enacted into law in Uganda after several years.
• The latest Africa attractiveness report by Ernst and Young shows Uganda in the lead within the East African region.