10th June 2022 Trade & Financial Services Round Up

June 10, 2022 - Reading Time: 4 minutes - By Amrit Labhuram

Kenya FDI declines Kshs 31.5 billion amid rebound in the EAC

Kenya’s foreign direct investment (FDI) inflows went against a regional recovery trend in 2021 after falling by $269 million (Kshs 31.47 billion), a United Nations survey showed on Thursday.

The UN Conference on Trade and Development’s (UNCTAD’s) World Investment Report 2022 estimates the FDIs amounted to $448 million (Sh52.42 billion using a conversion rate of Sh117 per dollar) from $717 million (Sh83.89 billion) in 2020.

The 37.52 per cent dip in foreign investment deals went against a recovery witnessed in major countries in Eastern Africa, where average FDIs jumped 35 per cent to $8.2 billion (Kshs 959.4 billion).

UNCTAD says FDIs in Kenya were partly driven by project finance deals around “four bridge projects” aimed at bringing “connectivity with remote areas”.

(Source: Business Daily)


NMB and CRDB Bank dominate bancassurance trade

Two commercial banks handled about 89.3 per cent of the life bancassurance business while the rest transacted the remaining share.

NMB Bank PLC transacted the largest share at 52.4 per cent, followed by CRDB Bank PLC, which accounted for 36.6 per cent from July to September last year, according to Tanzania Insurance Regulatory Authority (TIRA) quarterly performance report.

The recent report showed that the total premium collected by agents in respect of long-term bancassurance business amounted to Sh36.3 billion, equivalent to 76.5 per cent of the industry gross premium.

Since its inception in 2019, the bancassurance has allowed commercial banks to sell insurance services. In the non-life bancassurance business, three commercial banks handled 74.6 per cent of the entire non-life bancassurance business, while the rest transacted the remaining 25.4 per cent.

(Source: The Citizen)


Kenya slaps new levies on Ugandan eggs 

Traders dealing in poultry and poultry products are being charged Kshs70 [Ush2,500] to secure entry of their eggs into Kenya, which goes against earlier agreements. 

Multiple traders and trade associations that Daily Monitor spoke to indicate that the levy is among other restrictive measures that have been imposed on eggs from Uganda. 

This comes six months after Kenya lifted a ban imposed on Uganda’s poultry and poultry products in December as it sought to protect its farmers from the effects of Covid-19. 

Mr Fred Odhiambo, a trader in Busia, described the new levy as “restrictive” and violated the “protocols on the free movement of goods and services from East African Community [EAC] member states, of which Kenya is a signatory”. 

(Source: The Monitor) 


Government subsidies fuel to contain price surge

The price of a litre of diesel has increased to Rwf 1,503, while that of petrol has gone up to Rwf 1,460.

Diesel cost rose by 9.9 per cent or Rwf 135 a litre, while petrol rose by 7.4 per cent or Rwf 101 a litre.

Ernest Nsabimana, the Minister of Infrastructure, announced the new prices on Thursday, 9th June 2022, during a programme that was aired on Rwanda Broadcasting Agency. 

Nsabimana observed that although there was an increase in fuel costs to be incurred by consumers, the Government has provided significant financial support to contain their surge– about Rwf 200 for a litre of diesel and petrol. 

Overall, he said that the Government will subsidise fuel costs with over Rwf14 billion in two months — June and July – the support he said will help prevent transport costs from going too high. 

Such subsidy is in the form of a tax that the Government will waive on fuel consumption.

(Source: New Times) 


Chinese Company Keen to Invest in Green Development Projects in Ethiopia

A Chinese company called CGCOC Group expressed a keen interest in investing in green development projects in Ethiopia.

Today, the Ethiopian Ambassador to China, Teshome Toga, held a fruitful discussion with the vice president of CGCOC Group and Managing Director of the East African Branch, Gao Lei.

According to the Ministry of Foreign Affairs, the two sides exchanged views on how the company can invest in the Green Development Projects, focusing on Solar Energy, Electric City Bus and Juncao Technology.

During the discussion, Ambassador Teshome noted that the Ethiopian Government is committed to carrying on Green Development Projects and encouraging companies like CGCOC to invest in Ethiopia.

Ethiopia is blessed with significant renewable energy resources, with massive potential for hydro, solar, wind, and geothermal power. He called on the company to work in a joint venture with Ethiopian investors interested in related areas.

(Source: Ethiopian News Agency)  


New SDG 1,000 Note Proves Sudan Pound’s Plunging Purchasing Power

The announcement by the Central Bank of Sudan on Monday that it will issue a new banknote of SDG 1,000 reflects the rising inflation in the country and the continued erosion of the purchasing power of the Sudanese Pound, despite a relatively stable exchange rate.

In an interview with Radio Dabanga’s Sudan Today programme, economic and political analyst Hafiz Ismail said that issuing the SDG 1,000 denomination is a sign of rising inflation and the continued erosion of the purchasing power of the Sudanese Pound. However, at the moment, the exchange rate of the Sudanese Pound against international currencies is relatively stable. The SDG 1.000 note is the newest addition in a series of new notes of increasingly higher values issued over the last few years.

Ismail says that the marked increase in taxes and customs duties will also have significant inflationary effects and attributes the considerable rise in inflation to the state of depression in the country. This is exacerbated by the fact that the large commercial banks must service extensive debts to the Bank of Sudan so they are hesitant to lend money to their clients.

He attributes the relative current stability of the Pound rate to the recession and the cessation of commercial movement, and the unaffordable process for consumer basics

(Source: Radio Dabanga)

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