By Antonio Guerrero
Good to go: Tullow resolves dispute over Uganda's oil fields
Uganda moved closer to becoming an oil producer after UK-based Tullow Oil reached an agreement with the government over a tax dispute. Tullow, which paid $1.5 billion in July to acquire Heritage Oil's concessions in the Lake Albert basin, saw the deal halted by government claims that it owed $404 million in capital gains taxes from the transaction. Tullow had been unable to initiate operations or launch a partnership with China National Offshore Oil Corporation and France's Total Oil until the issue was resolved. Tullow did not disclose details of the agreement.
Botswana, the world's largest diamond producer by value, plans to complete privatization of Botswana Telecommunications (BTC) by April. It will sell shares in BTC through an IPO in March, with the government retaining the right to buy back shares from local shareholders who decide to dispose of their stock at a later date. Under the deal, investors and BTC employees may take a 49% stake in BTC, while the government will retain a 51% controlling stake. Proceeds from the privatization, first mooted in 2006, will be used to plug the government's 10% budget gap, with the finance ministry predicting a balanced budget by 2012–2013. Authorities are forecasting 7.9% GDP growth this year, reflecting an increase in mining output.
Senegal is reportedly eyeing the launch of a debut sovereign Sukuk bond next year, with Citibank as arranger. The terms of the Islamic bond deal, including the amount and maturity, have not been revealed. Senegal presents strong growth opportunities for Islamic finance, as 94% of Senegalese are Muslim and only 6% of the population has bank accounts. As Islamic financial institutions target Africa for growth, the government of Sudan says it will also partially finance its 3.2% budget deficit for 2011 through the sale of Sukuk.
Nigeria's efforts to revive its banking industry got a boost this month after the state-owned company acquiring bad loans from local banks announced plans to buy back nearly $15 billion of bad debts from lenders. Asset Management Corp of Nigeria had initially expected to buy $10 billion of loans. Lenders that failed a central bank audit this year are Afribank Nigeria, Finbank, Union Bank of Nigeria, Oceanic Bank International, Unity Bank, Spring Bank, Intercontinental Bank, Equatorial Trust Bank and Wema Bank. Having their bad debts underwritten paves the way for consolidation.