@Kaigangio.... Ur arguments and facts cannot be disputed but again UG's exports for 2008 were about $2 Billion and imports amounted to $3.5 Billion... the so called oil deposits are of poor quality useful only for making paraffin... Assuming that the Paraffin exports will be adequate to make up the Exports/import differential,why would m7 then go ahead and increase his import (and export) costs by going through a different more expensive port rather than Mombasa?

What we are saying is that Uganda Shilling has depreciated by 30% in the last 4 months. Read the Business Daily of 18 May 09 to understand. Though some are saying this is as a result of global crises,why hasn’t Kenya & TZ been affected the same way yet they are in the same zone? Let’s agree…the aggressiveness of Uganda has scared many potential investors and tourists…..and this has had an effect on foreign direct investment.. hence contributing to some negative effect on their shilling.

@Kaigangio

Which specific goods does Uganda stand to benefit were it to devalue its currency. And in any way,how exactly do you suppose they are devaluing their currency.

Remember currency valuation will only work if you can control the prices,e.g UG exports coffee,should they devalue their currency agaiinst the $,the International prices will remain constant while UG will be getting artificially higher local prices but which they will still spend importing petrol. On top of this,they will have to spend more money since they import more than they export.

Secondly,the southern route will always be a dream,I honestly have no idea what TZdians do,the port is so clogged that vessel surcharge is practically double what is chargeable at Kilindini. Secondly because of the amount of cargo traffic at Mombasa,its easier to get vessels landing than Dar .

My take is that at this point,UG needs its currency to strengthen up,the main reason is that they will need to import very expensive oil extraction and related equipment. This sought of capital expenditure will put added strain on the countries import bill. Secondly a weak/unstable currency will attract higher interest payments and additional hedging costs from the foreign loans that they will need to borrow to develop its oil fields.

My guess is that the reason for the UG currency decline has to do with the oil,the countries currency had already factored in the oil discoveries,now with the low cost of oil,the sustained development of alternative fuels and the lack of credit and the quality of the oil plus its under a lake. This find is becoming less and less atractive to prospective investors. If I was M7,I would be boarding a plane for china,they seem to have an endless supply of cash.



I guess if you can't win with facts,you can always pen bile-laced,xenophobic rants to distract everyone.

Indeed Kaigangio... Maybe Tz may end up being the cheaper route... but this being Africa,I would exercise caution before burning my bridges with Kenya... (we know the history of white elephants that stalks our continent)... From Obi's post,the Dar port appears to be doing much worse than we are (didn't think that was possible)... However,now I ask myself,why haven't Rwanda and Burundi followed suit...