Disquiet as State fails to pay oil subsidy billions
The government has defaulted on fuel subsidy billions that continue to be paid under a cloud of secrecy, sparking disquiet among the oil marketing companies ahead of the fresh pricing review to be effected from midnight.
The Business Daily has learnt that oil marketers are grappling with delays in the compensation after they took a cut for keeping pump prices low.
A number of chief executives who requested anonymity said that the government has not paid a single cent for the December-January review that lapses today in addition to other pending payments for November last year.
Sources at the Oil Marketers Association of Kenya (Omak), the industry lobby, have revealed that they now want the government to pay interest on the delayed funds, in what will come with another cost to taxpayers.
Documents seen by Business Daily show that oil dealers were paid Sh1.753 billion for two shipments in the November-December cycle while two others are pending.
The delays have pushed marketers into cash-flow hitches, especially the independent firms who tap bank loans to pay for the fuel and foot distribution costs.
Industry regulator Energy and Petroleum Regulatory Authority (Epra) has since last year cut margins for the oil marketers to keep pump prices unchanged and contain public outrage. The State uses funds from a fuel subsidy to compensate dealers.
Epra will today announce a new pricing schedule for the month to February 14 where dealers look set to take more hits if the State opts to cut their margins and keep prices unchanged.
(Source: Business Daily)
Shilling decline boosts value of dollar holdings
Rich Kenyans stacked up Sh798.7 billion in dollar accounts in November as depositors turn back to the dollar for higher returns and depreciation of the country’s currency shores up the value of greenback holdings.
Latest Central Bank of Kenya data shows dollar deposits have surged 7.1 per cent from a low of Sh745.4 billion in May.
The movement has coincided with the depreciation of the shilling which has been on a slide since mid-May when it stood at Sh106.40.
The shilling is currently exchanging at 113.4 on the combination of weak inflows and strong dollar demand across sectors.
The shilling has declined to an all-time low against the dollar as importers increase demand for the greenback with the economy recovering from the impact of the pandemic.
The decline of the shilling has been a mixed bag. It is helping to inflate the wealth of rich Kenyans with dollar deposits, recipients of diaspora remittances and exporters while hurting importers and widening the national debt.
The value of Kenya’s diaspora remittances rose by 20 percent to $2.71 billion (Sh307 billion) in the nine months to September compared to $2.27 billion (Sh257 billion) in the corresponding period of last year.
Exporters such as tea and coffee producers are also winners in the shilling’s depreciation, which has the effect of making their products more competitive in the international markets besides boosting their revenue in local currency terms.
(Source: Business Daily)
BHP to invest $100m in Tanzania nickel supply
BHP, the world’s biggest mining company, has thrown its weight behind a huge nickel project in Tanzania as it seeks to access the metals and minerals needed for the electrification of the global economy.
The decision to invest $100m in private UK miner Kabanga Nickel, which is developing the project, marks a further shift in strategy for BHP, which has traditionally focused on less risky mining jurisdictions such as Australia, Chile and Canada that have been extensively developed.
Kabanga is regarded as the world’s largest development-ready, high-grade nickel sulphide deposit. However, it is in a remote location in the north-west of the country, close to the border with Burundi and Rwanda, and lacks infrastructure.
The project’s new owner, Kabanga Nickel, anticipates first production in 2025 and says the deposit has the resources to churn out at least 40,000 tonnes a year of battery grade nickel for more than three decades. It will also produce 4,000 tonnes a year of cobalt, another battery metal.
The 2.7m-tonnes-a-year global nickel market is expected to grow rapidly owing to the increasing popularity of electric vehicles. Demand for the metal, which is used in more powerful EV batteries, is set to grow 19-fold by 2040 if the world meets the Paris climate goals, according to the International Energy Agency.
(Source: The Financial Times)
Tanzania’s trade surplus across East Africa rose to $484 million
Tanzania’s trade surplus across the East African Community region rose to $484.5 million in 2020, from $343.8 million the previous year, according to latest updated Central Bank figures.
The country also reported a highly-improved trade surplus of $1.09 billion with Southern Africa Development Community (SADC) countries, indicating a further expansion of its sub-Saharan trade network.
Kenya remained Tanzania’s main trading partner within the EAC bloc, accounting for 28.4 percent of intra-EAC exports and 76.4 percent of imports in 2020. Export figures to Rwanda, Uganda and Burundi also rose sharply while imports from those countries dwindled.
According to the Bank of Tanzania’s 2020/2021 Annual Report released on December 31, Tanzania exported goods worth $811.2 million to the EAC region in 2020, up from $678.5 million in the previous year, while imports from the bloc declined slightly from $334.7 million to $326.7 million.
Exports to Kenya were valued at $230 million in total against $249.6 million of imports. Exports to Rwanda hit the $207.7 million mark in 2020, up by over $15 million from 2019, while exports to Uganda and Burundi also registered much improved figures of $190.9 million and $179.1 million in 2020 against $124.4 million and $88.4 million in 2019, respectively.
(Source: The Citizen)
Entebbe Expressway monies to help sort China loan
Payment of user toll fees has started at the Kampala-Entebbe Expressway.
Works and Transport Minister Gen. Edward Katumba Wamala, who launched the commencement of toll collections at Kajjansi, said the collections will be used to maintain and repay a $350 million loan that Uganda used to construct the expressway. The government acquired the loan from the Exim Bank of China in May 2011, to finance the construction of the 51.4km Kampala-Entebbe Expressway.
The four-lane expressway comprises two road-sections– a 36.94-kilometer-long section and a 12.68-kilometer-long link road.
According to the loan agreement, the loan repayment schedule runs from July 21, 2019, to January 21, 2032. In the 13-year repayment period, the government plans to pay 26.8 million US Dollars a year.
Initially, the government had planned to repay the loan through revenues from the road toll on the Expressway upon its completion. However, the road toll system had not been implemented and the road was opened to traffic in June 2018.
Now, with the legal framework in place, Katumba says that tolling roads will be a source of revenue generation to curb borrowing for infrastructure projects.
Users are paying between Ugshs3,000 to shillings Ugshs18,000 per trip with discounted rates for weekly and monthly trips.
The tolling exercise which is implemented by French Firm Egis Operations SPA started from the Kajjansi toll station at 10 a.m., Busega at 2 p.m. and 5 p.m. at Mpala tolling station.
It is estimated that 2,000 cars pass through the Mpala tolling station daily. Among these are incoming air passengers, airport taxis, visitors and Entebbe residents.
Joy Nabaasa, the Public Relations Manager of French Firm Egis, which was contracted to maintain the road and collect the toll, says the tolling exercise started without a glitch and that the company will ensure cards are accessible at petrol stations. She is encouraging users to get cards according to their movements so that they avoid making losses for trips not taken. Nabaasa says the trips paid for expire once the paid-for period elapses.
But residents of Entebbe who work, or travel frequently to Kampala have wanted Egis to revise their policy on expired trips.
(Source: The Independent)
More gloom to taxpayers as public debt raises to Shs 73.7trillion
Coronavirus pandemic induced borrowing has seen Uganda’s public debt rise 3.1% to Ugshs73.78 trillion compared to June 2021, says the Bank of Uganda in its latest report on the status of the economy.
The report released late last month says the increase in debt between June and October 2021 was mainly due to a Ugshs1.67 trillion increase in domestic debt.
“The external debt exposure amounted to Ugshs 45.3 trillion (US$ 12.7 billion) as of the end of October 2021, an increase of 2.7% compared to June mainly on account of increased debt from multilateral creditors and private banks,” the report states.
The country’s total external debt exposure (outstanding stock of disbursed debt and committed but undisbursed debt) accounted for 62 percent of the total public debt in October. However, the committed but undisbursed external debt stood at Ugshs15.6 trillion (US$4.4billion) as of end-October.
The Debt Sustainability Analysis (DSA) indicates that external debt burden and public debt indicators remain moderate. This is owed to the fact that although the FY2020/21 fiscal deficit widened to 9.1% of Gross Domestic Product (GDP), bringing public debt to 48.3% of GDP from 41.7% in FY2019/2020, and closer to the 50 percent of GDP target, the fiscal target for FY2021/22 reflects post-Covid-19 consolidation, with a fiscal deficit to GDP of 6.4 percent.
However, the debt service to tax revenue ratio gradually increased to 27.1% in October 2021, up from 24.4 percent in October 2020.
(Source: The Independent)
Corporate moves: Gaga joins Airtel Money from Equity Bank
Jean Claude Gaga has joined the telecom industry as the Managing Director for Airtel Money. He previously served as the Commercial Director at Equity Bank Rwanda where he oversaw product and service innovation among other tasks.
Gaga also previously served as CEO of RSwitch, the national electronic payment processor which was delivering payment interoperability.
Gaga has also worked at MTN Rwanda as a Channel Development Manager for Mobile Money as well as a Mobile Money Sales Manager.
He holds a Master’s Degree in Financial Services from the University of Salford in the UK.
The development comes at a time when many would say MTN Rwanda has a head start in Mobile Money payment and fintech services considering that they have set up an independent subsidiary for Fin-tech as well as have a significant market share.
However, Fin-tech has been billed as a significant opportunity in the finance sector due to its potential in driving up access to financial services especially for the unbanked market segment.
(Source: The New Times)
National Bank of Ethiopia lifts bank transfer limits
The National Bank of Ethiopia (NBE) announced it has lifted the limit it put on the number of bank transfers allowed per week. NBE had restricted the number of bank transfers allowed per week to just five per week for a year, since January 2021.
Solomon Desta, NBE’s Vice Governor of Financial Institutions, said the National Bank’s restrictions “have met their target,” adding the decision to lift the restrictions is aimed at addressing “the negative effects” they may have on financial exchanges.
NBE’s restriction of transfers had been effective on all forms of bank transfers, including mobile and internet banking, as well as using ATM and POS machines.
Ethiopia introduces online air cargo booking platform
Ethiopian Cargo and Logistics Services, Africa’s largest network operator, announced it has launched a new feature that enables customers to make online reservations for their cargo.
The platform enables customers to check flight schedules, space availability, loadability of freight and make real-time booking of their shipment in a single and convenient way on https://cargobooking.ethiopianairlines.com/.
Eritrean nationals in Cairo conduct seminar
At a seminar conducted on December 26, 2021, Eritrean nationals residing in Cairo, Egypt, expressed readiness to strengthen organisational capacity and participation in the success of national development and resilience programmes.
Speaking at the seminar, the Eritrean Ambassador to Egypt, Mr. Fasil Gebreslasie, underlining the timeliness of the resilience programs in the prevailing era called for strong participation and contribution of nationals.
Indicating that the timely national programmes include developmental, national security, political, diplomatic, as well as information and cultural programmes, Ambassador Fasil gave detailed briefing on each subject.
Extensive briefing on the objective national situation, regional as well as international developments was also provided, the report indicated.
Participants, finally, expressing their readiness to strengthen participation in the success of the national programmes called for enhanced awareness raising campaigns toward the youth abroad.
(Source: Ministry of Information Eritrea)
Italy supports Somalia in rebuilding and developing its economy
The Minister of Foreign Affairs and International Cooperation, Abdisaid Muse Ali, received in Mogadishu the Director of the Italian Agency for Development Cooperation, Luca Maestripieri, to discuss the strengthening of mutually beneficial cooperation between the two countries.
The director shared views with the Minister on Italy’s development strategy for strengthening Somalia’s relations in the areas of reconstruction and economic development, noting that his visit to Somalia demonstrates the importance of the Italian government’s cooperation with Somalia.
The minister thanked the Italian government for its support and underlined that Somalia is committed to developing bilateral relations with Italy.
(Source: Radio Dalsan)
Jubbaland signs agreement with oil company
The President of Jubaland state, Mr Ahmed Mohamed Islam Ahmed Madobe, chaired a Cabinet meeting which was held in Kismayo today.
The meeting was preceded by a briefing by the President of the House on the overall situation in the country and the ongoing elections to finalize the seats in the Lower House of the Somali Parliament.
The Jubaland Ministry of Health reported on the health situation, informed the council that Covid-19 is still in place, and is continuing to raise public awareness and efforts to control the disease.
The Jubaland Ministry of Security submitted a report to the council on security in Jubaland. She said the security forces were on high alert as the country was in the process of holding elections and would prevent any untoward incidents.
Meanwhile, the Cabinet approved an agreement between the Jubaland Ministry of Ports and Maritime Transport and a Jubaland business company, which will invest in Kismayo port’s oil reserves to develop Jubaland’s economic resources.
The Jubaland Ministry of Livestock and Animal Husbandry said that the drought-stricken areas of Jubaland are still in a state of disarray and that relief efforts are still underway.
(Source: Radio Dalsan)
Northern Sudan farmers protest electricity bills, block road to Egypt
In a protest against an increase on electricity tariffs in Northern State, activists and farmers in Ed Debba yesterday set up a sit-in and closed the Sheryan El Shimal highway to Egypt.
Abde Ali Hussein, member of the Resistance Committees Coordination in Dongola, told Radio Dabanga that “the authorities in the state raised the electricity tariffs without any justification. Farmers in particular are negatively affected.”
In response, the Ed Debba Resistance Committees Coordination organised a sit-in and closed the highway to Egypt for buses and lorries. “Transport of wounded and sick people by ambulances and private vehicles is still possible.”
Farmers and members of resistance committees from all localities of Northern State are participating in the sit-in. “They will only open the road again when the decision to increase the electricity bills is cancelled, and other demands, including compensation for properties lost because of the construction of the Meroe Dam, have been met,” Hussein explained.
Separately, farmers in El Golid met with the locality’s executive director and director of agriculture on Sunday, and gave them 72 hours to cancel the electricity tariffs increase, activist Soheib Osman told Radio Dabanga yesterday.
Last year, the federal Ministry of Finance planned a significant increase in electricity prices for 2022, as it decided to continue with lifting subsidies on consumer goods, in order to meet the demands of the World Bank. In early January 2021, the power tariffs increased by 500 per cent.
(Source: Radio Dabanga)