POWER POINT PRESENTATION BY

H.E. AMBASSADOR TOMUSANGE

AT

N.H.O. – NORWAY

ON 31 MARCH 2011

CONTENTS OF THE PRESENTATION

1. MAP OF AFRICA2. MAP OF UGANDA3. MAP OF THE OIL FIELDS4. WHAT IS THE ”LOCAL CONTENT”?5. OBJECTIVES6. OPPORTUNITIESS7. CHALLENGES8. PROPOSED SOLUTIONS9. INCENTIVES10. CONCLUSION

UGANDA A LEADING INVESTMENT DESTINATION

2Durban

MARKETUganda - 30 millionEast Africa - 150 millionGreat Lakes Region- 159 millionCOMESA

- 23 member countries- 300 million people.- Imports over US$ 170 billion annually.

AGOAEU – Preferential Treatment of Exports

UGANDA’S STRATEGIC LOCATION IN THE HEART OF AFRICA

UGANDAMombasa

Dar es salaam

4

16. UGANDA TODAY AND TOMORROWNATIONAL VISION

• Vision 2025 “ Prosperous People,

Harmonious Nation, Beautiful Country.”

• Poverty Reduction Strategy Country Paper (PRSCP)

• Poverty Eradication Action Plan (PEAP)

Target: By 2017 Poverty will have been reduced to less than 10%

• Private Sector Led Economy

- EXPLORATION AREAS 1,2 AND 3 PETROLEUM EXPLORATION AND PRODUCTION DEPT., UGANDA

WHAT IS THE “LOCAL CONTENT”?

A. THE PERCENTAGE OF COMPONENTS OF A PRODUCT WHICH IS MANUFACTURED, MANPOWER AND SERVICES.

B. IN CASE OF OIL, THE LOCAL CONTENT COULD BE ALLOCATED TO INDIGENOUS COMAPNIES AND PEOPLE.

- EXPLORATION - DRILLING- PLATFORM, REFINERY AND PIPELINE CONSTRUCTION.- PETROCHEMICAL INDUSTRIES- MARKETING PROCESS- ADMINISTRATION OVERHEADS.- PROVISION OF SERVICES

5. OBJECTIVES

1. PROTECT THE WELFARE OF THE PEOPLE

2. INCREASE THE SOCIAL BENFITS

3. MANAGE THE SOCIAL IMPACT OF THE INVESTMENT

4. INCLUDE/INCREASE INDIGENOUS PARTICIPATION

5. PROMOTE VALUE ADDITION

6. PROMOTE BUNESSS LINKAGES

7. BUILD CAPACITY

8. DEVELOPMENT OF FUNDING SYSTEMS.

6. OPPORTUNITIES

1. JOB CREATION

2. INFRASTRUCTURE DEVELOPMENT

3. SOCIAL INVESTMENT

4. INCOME GENERATION/POVERTY REDUCTION

5. SKILL DEVELOPMENT/VOCATIONAL TRAINING

6. LOW SOURCING COSTS

7. SUSTAINABLE IMPACT ON LOCAL ECONOMY

7. CHALLENGES

1. DEBT SERVICING

2. MISMANAGEMENT OF REVENUE/CORRUPTION

3. REVENUE SPENT ON RECURENT EXPENDITURE

4. LIMITED REVENUE IS INVESTED IN PRODUCTIVE INVESTMENT

5. DEATH OF JOBS AND LOW SKILL DEVELOPMENT

6. LOW CAPACITY

7. WEAK PUBLIC SYSTEMS AN INSTITUTIONS

8. REPARTRIATION OF INVESTMENT

9. THEREFORE OIL REVENUE NOT TRANSFORMED INTO GROWTH.

8. PROPOSED SOLUTIONS

1. LOCATION OF INVESTMENT IN THE HOST COUNTRY

2. FOCUS ON JOBS AND CAPACITY BUILDING

3. WORK TOWARDS VALUE ADDTION

4. HELP TO MITIGATE THE CRIPPLING SOCIAL SERVICES (HEALTH

EDUCATION)

5. RE-INVEST IN DOWN STREAM INDUSTRIES (ENERGY, REFINERY,

PETROCHEMICAL INDUSTRIES)

6. FOCUS ON THE LOCAL CONTENT OBJECTIVES.

WHAT HAS THE GOVERNMENT DONE?

9 . ATTRACTIVE CURRENT INCENTIVE REGIME

A. CAPITAL ALLOWANCE

INITIAL ALLOWANCE ON PLANT AND MACHINERY LOCATED IN KAMPALA, ENTEBBE AND JINJA 50%

INITIAL ALLOWANCE ON PLANT AND MACHINERY LOCATED OUTSIDE KAMPALA, ENTEBBE AND JINJA 75%

START UP COSTS SPREAD OVER THE FIRST 4 YEARS 25%

SCIENTIFIC RESEARCH EXPENDITURE 100% TRAINING EXPENDITURE 100% MINERAL EXPLORATION EXPENDITURE 100 %

B. EXTERNALIZATION OF FUNDS

LOAN REPAYMENT IN A FOREIGN COUNTRY PAYMENT OF FINANCIAL EARNINGS TO FOREIGN PERSONNEL PAYMENT OF ROYALTIES OR FEES PAYMENT OF PROFITS AND PROCEEDS ON DISPOSABLE ASSETS

INVESTMENT TRADER:

REFUNDS OF INPUT (VAT) GENERATOR AND FUEL FOR THE GENERATOR IMPORTED INPUTS MANUFACTURE UNDER BOND SPECIAL INCENTIVE FOR THE AVIATION SECTOR.

C. DEDUCTIBLE ANNUAL ALLOWANCES(DEPRECIABLE ASSESTS)

COMPUTERS AND DATA HANDLING EQUIPMENT 40%

AUTOMOBILES, CONSTRUCTION AND EARTH

MOVING EQUIPMENT 35%

BUSES, GOODS VEHICLES, TRACTOR TRAILERS,

PLANT AND MACHINERY FOR FARMING,

MANUFACTURING AND MINING 30%

RAILROAD CARS, LOCOMOTIVES, VESSELS, OFFICE

FURNITURE AND FIXTURES 20%

D. OTHER ANNUAL DEPRECIATION ALLOWANCES

INDUSTRIAL BUILDINGS HOTELS

AND HOSPITALS 5%

FARMING – GENERAL FARMWORK 20%

IMPORT DUTY EXEMPTION

DUTY DRAWBACK FACILITIES

FIRST ARRIVAL PRIVILEDGES

CORPORATION TAX 30%

10. CONCLUSION

THE PRINCIPLES

THE LAW ON ”LOCAL CONTENT”

PENALTIES

SUPPORT BY THE GOVENMENT OF NORWAY

THANK YOU