Thursday 7 April 2011

Uganda Buys Fighter Jets

KAMPALA, Uganda—Uganda has bought at least eight fighter jets and other military hardware worth $744 million from Russia as it prepares to start oil production in the Lake Albert region, along its border with restive eastern Congo, government officials said.
The jets and military hardware will enable the country to deal with any "eventuality" relating to rising security threats, Kabakumba Matsiko, Uganda's information minister said Thursday.
"Every country needs to be well equipped to defend its strategic interests," she said.
The initial payment was made around December last year, and according to intelligence sources at least $446 million has been paid so far.
Intelligence officials say Uganda is facing rising threats stemming from neighboring Southern Sudan's impending secession from Khartoum, following an independence vote. Southern Sudan's administration has already accused the Sudanese government of arming militias in the disputed Abyei region. Uganda traditionally has been an ally of South Sudan, which is set to become independent in July.
Uganda also fears possible incursions from the lawless eastern Congo, which borders the Lake Albert oil region in western Uganda. U.K.-based Tullow Oil PLC, France's Total SA and China's Cnooc Ltd. are preparing to start a $10 billion project there to develop Uganda's oil fields this year.
The Ugandan army is already building a new army base at Hoima, near the shores of Lake Albert.
Last week, the Ugandan president asked ruling-party lawmakers to approve the cost of the fighter jets retrospectively.
Opposition lawmakers have described the procurement as illegal, and accused the government of draining the central bank's reserves without parliamentary approval, according to Nandala Mafabi, the head of parliament's public-accounts committee. People familiar with the situation say that the reserves are expected to be replaced by proceeds from taxes on recent oil transactions involving Tullow, Cnooc and Total.
Last week, Tullow announced that it would pay at least $469 million to the Ugandan government as tax-related payments, as a result of its takeover of Heritage Oil PLC's stakes in the country, as well as the sale of a third of its interests to Cnooc and Total.

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