11th February 2022 Trade & Financial Services Round Up

February 11, 2022 - Reading Time: 11 minutes - By Amrit Labhuram

CBK tests market with digital Kenya shilling

The proposed Central Bank of Kenya (CBK) digital currency will for the first time allow Kenyans to directly keep cash at the apex bank, placing it in direct competition with commercial banks for deposits.

The Kenyan version of the Central Bank Digital Currency (CBDC), whose introduction has been under debate for the last few years, will be exchangeable on a one-to-one basis with physical cash.

It will enable customers to bypass banks, with the CBK taking on a new role of keeping track of holdings, transactions and settlements.

The CBDC is being eyed mainly to ease cross-border payments and complement mobile money in the local digital payments space.

The CBK on Thursday invited the public to give their views on the potential introduction of the digital currency, in a shift from its original opposition to crypto assets.

The regulator noted, however, that having its own digital currency for retail customers could lead to a migration of deposits from commercial banks to the CBDC.

A CBDC could make the financial system safer by allowing individuals, private sector companies and non-bank financial institutions to settle directly in central bank money, rather than bank deposits,” said the CBK in the discussion paper.

This would significantly reduce the concentration of liquidity and credit risk in payment systems. This in turn reduces the systemic importance of large banks and PSPs [payment service providers]. However, the central bank would enter into direct competition with the banks and payment service providers it regulates.”

In Africa, Ghana and Nigeria have already piloted their CBDCs, while Kenya, South Africa, Rwanda and Tanzania have been conducting research ahead of rolling out their own versions.

The International Monetary Fund says around 100 countries are exploring CBDCs, at different levels — researching, testing, and distributing to the public.

(Source: Business Daily)

New EAC trade watchdog now expected April

A new regulator or ombudsman for regional trade disputes is now likely to be in place by April after missing an earlier December target, a regional bloc official has said.

East Africa Community (EAC) Secretary-General Peter Mathuki told the Business Daily that the Trade Remedies Committee (TRC) could be in place by the end of the first quarter or beginning of the second quarter.

The body will assist businesses in the bloc’s five-member states when they have concerns over unfair trade deals from foreign rivals.

It will have powers to investigate and address unfair trade practices and subsidies. 

TRC will investigate any complaints and make recommendations to government ministers for corrective anti-subsidy or anti-dumping measures that could be imposed to address any injury caused to the domestic industry in question.

The committee will investigate for example any unexpected surge in imports of a particular product and take steps to prevent harm to domestic industry by imposing temporary safeguard measures.

Mr Mathuki had earlier said the body would be in place by December last year.

“It remains a priority item in our to-do list, there is some progress because the matter is now at the coordination committee (Permanent Secretaries) together with the CET (EAC Common External Tariff), issue, we hope to have the matter finalised,” said Mr Mathuki in an interview.

Experts have often warned the delay by the bloc to operationalise the TRC is negatively affecting the business community, prolonging resolution of trade disputes and impacting trade within the region.

Spats among member States have in recent times almost paralysed trade and led to huge losses incurred by traders.

In one of the recent flare-ups of a trade spat involving EAC member states, Uganda recently protested a 79 percent cut on its scheduled sugar exports to Kenya, reigniting trade disputes between the two neighbouring states.

(Source: Business Daily)


Blue economy: DCB Bank out to play role in Zanzibar

The DCB Commercial Bank is set to open a branch in Zanzibar as it seeks to play a role in the development of blue economy.

The bank’s top management, led by managing director Godfrey Ndalahwa (pictured), is currently undertaking a week-long tour of the isles, as they explore investment opportunities.

Zanzibar President Hussein Ali Mwinyi has been the main supporter of the blue economy, saying that it is the best way to develop the isles’ economy.

The World Bank defines a blue economy as the “sustainable use of ocean resources for economic growth, improved livelihoods, and jobs while preserving the health of the ocean ecosystem”.

“There are massive opportunities in a blue economy. We at DCB are poised to offer financial services to players across the entire society from the grassroots, starting with small and medium entreprises, groups of entrepreneurs, women and the youth,” said Mr Ndalahwa.

Speaking with the DCB delegation, the Zanzibar Minister of State in the President’s Office (Economy and Investment), Mr Mudrik Ramadhan Soraga, said the government was ready to work with DCB and other investors by putting in place a conducive environment for investment in the Isles.

(Source: The Citizen)

How Dodoma Ring Road Project Will Boost Regional Trade

President Samia Suluhu Hassan has laid a foundation stone for the 110.2km-Dodoma City Outer Ring Road Construction Project which will link Tanzania’s capital city and neighbouring countries to stimulate trade.

The completion of the Tsh 249.99 billion project will help the country to translate the recently signed African Continental Free Trade Area (AfCFTA) into actuality, according to the Head of State.

At the event attended by public top officials, development partner representatives, President Samia thanked the African Development Bank (AfDB) President Dr. Akinwumi Adesina for funding various development projects including roads, water and agricultural sector.

The financial institution has so far pumped in a total of 2.458tri/- in 11 road projects in the country which cover 1914.8km.

The amount, according to President Samia, is almost 66 percent of the entire budget of the Ministry of Works and Transport for the entire 2021/22 financial year.

“On behalf of the Government and People of the United Republic of Tanzania we thank and salute you Mr President (Dr. Akinwumi Adesina) and the bank for the strategic support given to our country,” President Samia said.

Weighing up on the funding of 11 projects from only one sector (works), the Head of State said the “African Development Bank is real for Africans’ development.”

While the country pumped in a lot of funds to execute various road projects, the President asked Wananchi to protect and use the infrastructures wisely since they cost a lot.

Only kilometre of a road can cost between Tsh 1.2 billion to Tsh 1.5 billion depending on the nature of the soil of an area, she said and added that the same amount can be used to implement a huge district hospital building.

She assured Wananchi that the sixth phase government will continue to implement all projects raised during the previous government.

Speaking at the event, Minister of Works and Transport Prof Makame Mbarawa said that the Dodoma project will boost transport and manufacturing sectors, reduce traffic jams in the city centre.

(Source: Daily News)


Government paying UShs87.7b ($24.8 Million) for unused electricity

Government pays at least Shs87b on average for unused electricity annually, according to the Auditor General.

During the period ended June 2021, according to the Auditor General, the government paid Shs87.7b for failure to dispatch or evacuate electricity generated by independent power producers (IPP) for the 2020/21 financial year.

Unused power also known as deemed energy is electricity that is available for dispatch by an independent power producer, but due to non-existent or a weak grid infrastructure and or insufficient demand, the power is not evacuated.

Therefore, under certain conditions in their concessions such electricity is billed and is payable by the government. 

In his report, Auditor General John Muwanga, demonstrated concern over the continued payment of significant amounts of money by Uganda Electricity Transmission Company Limited relating to deemed energy, noting that the market risk is effectively transferred from investors to government.

Payment for deemed energy is mostly negotiated in power purchase agreements and other implementation agreements that are signed between independent power producers and government.

(Source: The Monitor)

Government withdraws 377 acres of land allocated to investors

At least 377 acres of undeveloped land in the Kampala Industrial Business Park in Namanve, Mukono District have been withdrawn from investors, according to State Minister in charge of Privatisation and Investment Evelyn Anite.

The land had initially been allocated to different investors, some of which have not shown intention of developing it for more than 20 years.

Government provides investors at least 18 months within which they must have put in place plans to develop offered land.

However, while speaking during a status update on the development of the industrial park in Namanve, Ms Anite, said a number of investors had abandoned land that had been allocated to them without providing any plans of developing it.

“What we have unfortunately seen as we manage this land is that there are a number of investors who [have not been] able to execute their projects and the land has been sitting there idle for long periods of time. As a result, we have withdrawn it,” she said.

Ms Anite noted that land had been withdrawn from investors such as Mariana Agencies, which had been allocated 76 acres to establish a soap and vegetable oil plant or factory in 2014.

However, Mariana, she indicated, has since 2014 only backfilled a portion of the land without constructing a factory as it had been planned. 

(Source: The Monitor)


RDB says the partnership with Arsenal has yielded significant results

The National Development Agency, RDB, said that the partnership with Arsenal has been instrumental in boosting the tourism sector and expanding the country’s culture around the world.

The two Arsenal players, Robert Pires and Ray Parlor of England, who are in Rwanda, said they were happy with the country and what they had seen during their visit since the beginning of this week’s Visit Rwanda program.

They made the announcement on Wednesday when they met with their fans in Rwanda.

“This partnership is comparable to the talent in football as we have compared the talent of the players but now it has become a tourist attraction, so this partnership is a great opportunity for me because Arsenal is a world-famous team more than just England,” Pires said. Rwanda and Arsenal can now be compared as one family.”

“In fact, people didn’t know about Rwanda before this partnership, people were wondering where it was in Africa and they wondered where it was?” It simply came to our notice then.

According to the RDB, Rwanda has a lot to achieve, and it has even reached the stage of promoting national culture, which is famous all over the world.

Kageruka Ariella, Head of Tourism at RDB, said: “It is good because it continues to promote tourism, to showcase the beautiful image of Rwanda from the beautiful animals, beautiful mountains, beautiful lakes and our culture. It is good to work with others in various programs, especially those for the promotion of tourism, and work with everyone around the world.”

(Source: Rwanda Broadcasting Agency)

The value of the Rwandan franc: What about the currency market?

Foreign exchange traders say they are seeing a steady increase in foreign exchange demand, which they believe is affecting the Rwandan currency. Economic analysts see efforts to increase the size of exports to Rwanda as one of the solutions.

According to a report by the Central Bank of Rwanda, when you compare the Rwandan currency against the currency over the past two years, it has lost its value because before this Euro you see that the Rwandan currency has depreciated against the rate of 3.2% by 2020, while by 2021 it is valued at 11.5%.

In those years, the Rwandan currency also depreciated by 4.3% in 2020 before the dollar, while in 2021 it depreciated by 5.3%.

Gasana Vianney, CEO of the Rwanda Foreign Exchange Service Association, says the need for foreign exchange is on the rise due to the nature of international trade.

Rwanda’s exports to the international market in 2020/2021 were valued at $1.487 billion from $1.277 billion in 2019-2020, an increase of 16.4%.

Robert Bafakulera, President of the Rwanda Private Sector Federation, says that Rwandan investment still has its limitations on the price of basic raw materials and that they are imported and traded in foreign exchange.

Economic analyst Manirakinga Manasseh says good progress has been made in increasing the number of manufacturing industries in the country, but there is still a need to increase their productivity in order to increase the amount of foreign exchange earnings.

The Minister of Finance and Economic Planning, Dr Uzziel Ndagijimana, said that although the country’s economy was hit by the Covid-19 epidemic, it did not prevent it from recurring due to the ongoing monetary management measures.

Rwanda’s economy has grown at a rate of 10.2% in 2021, largely based on the implementation of the Covid-19 epidemic, which is expected to grow by 2022.

(Source: Rwanda Broadcasting Agency)


EEP loses 1.64 billion Birr ($32.3 Million) due to terrorist TPLF’s belligerences

The Ethiopia Electric Power (EEP) announced that it lost an estimated 1.64 billion Birr due to electricity infrastructural damage that has been caused by TPLF’s belligerence of Amhara and Afar states and for the restoration activities.

In a press conference he gave yesterday, EEP, Corporate Communication Director Moges Mekonnen said the damages and lootings TPLF forces executed on electric infrastructure including transmission lines, power transformers, mobile power stations and other facilities caused the stated sum of loss. 53.3 percent of the high voltage transmission grids in Amhara and Afar states are damaged by the conflict.

Also, from August 2, 2021 to December 18, 2021, the EEP lost 231.9 million Birr that would be obtained from electric power sales. The damage and lootings in mobile power stations accounts for over two hundred million Birr.

Noting over 23 million USD is required to fully restore the damaged electric infrastructure and resume the dependable service; the director indicated that 29.5 million Birr is allotted to the speedy restoration of the affected facilities thereby supporting the local communities.

Moges further highlighted that the Debre Berhan- Weldiya, Bahir Dar- Weldiya and Akesta – Merhabete electric lines have resumed service after repair. “In most areas the people are forced to remain for longer periods without electricity, and their socioeconomic activities have been adversely affected as a result.”

(Source: Ethiopian Press Agency)

Ethiopia’s Telebirr Partners with Ghana’s Zeepay

Ethiopia’s Telebirr has partnered with Zeepay, the Ghanaian fintech company, to facilitate cross-border payments. The partnership aims to open up digital payments across Africa, and give Telebirr access to over 150 million customers.

Founded in 2014 in Ghana, Zeepay focuses on digital rails to connect digital assets such as mobile money wallets, cards, ATMs, bank accounts, and digital tokens to international money transfer operators, payments, subscriptions, international airtime and refugee payments. Zeepay says theirs is an effort to promote and improve financial inclusion, which in turn will make the world a better place to live.

“It is a delight to see where Zeepay is going, and a privilege to be among the first fintechs to have been accepted by the Ethiopian central bank,” Dede Quarshie, Zeepay’s Commercial GM commented. “We do not take this show of confidence for granted. We look forward to growing with Ethio Telecom and deepening our partnership with Telebirr.”

The collaboration between Telebirr and Zeepay also aims to cater to the money transfer needs of over two million diaspora who send remittance home.

Launched in May 2021 by Ethiopia’s telecom giant Ethio Telecom, Telebirr is a mobile money service that allows customers of Ethio Telecom, to send, store and receive money using only their phone number, with an aim to extend mobile services to our financially excluded sections of society.

(Source: 2merkato)


Concerted Measures for Animal and Plant Health

Ensuring plant and animal health is securing societal health as humans consume plants and animals. The Ministry of Agriculture (MoA) regularly checks locally produced food and drinks as well as imported products to ensure they meet set standards.

Brucellosis and other zoonotic diseases have been addressed under one health approach, an approach practiced globally. The MoA and the Ministry of Health (MoH) have been jointly working towards the eradication of such diseases, and all major animal and plant diseases have been addressed systematically through the concerted efforts of concerned bodies and active participation of farmers across the country.

In an effort to control and prevent the dire consequences of major deadly animal diseases, the MoA administered a total of 3.5 million vaccinations against PPR, anthrax, brucellosis, Foot and Mouth Disease (FMD), Lumpy Skin Disease, Newcastle, Rabies, and other tropical diseases.

As part of the long term plan to control and eradicate major animal diseases, the MoA mapped out a national strategic plan for the eradication of Pestes Despetites Ruminants (PPR) and Rabies by 2030. In line with the ongoing efforts to control vaccine-controlled diseases, a total of 2.4 million livestock have been vaccinated against PPR, and vaccination against Rabies has been regularly given across the country.

(Source: Ministry of Information Eritrea)


Somali FM signs MoU with his Rwandan counterpart

Somali Minister of Foreign Affairs Mr. Abdisaid Muse Ali, on Saturday, signed a Memorandum of Understanding on Political Consultations on the sidelines of the 35th African Union Summit in Addis Ababa, with Vincent Biruta, Minister of Foreign Affairs, Rwanda.

“Pleased to sign an MoU on Political Consultations with Vincent Biruta, Minister of Foreign Affairs & Int’l Cooperation of Rwanda on the sidelines of the AU Summit,” minister Abdisaid said.

This formally sets out a framework in deepening our bilateral cooperation in key areas of mutual interest,” Mr Abdisaid added.

This formally sets out the framework for deepening and strengthening bilateral relations in key areas of mutual interest. This includes but is not limited to political, economic, commercial, scientific, technical and cultural cooperation.

The signing of this MoU reaffirms the commitment of the Federal Republic of Somalia and the Republic of Rwanda to take bilateral relations to a new level and will begin with the implementation.

(Source: Radio Dalsan)

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