3rd December 2021 Financial and Trade Services Round Up

December 3, 2021 - Reading Time: 8 minutes - By Amrit Labhuram


Shilling hits all-time low of 112.5 to dollar

The shilling has declined to a new all-time low of 112.5 against the dollar as importers increase demand for the greenback with the economy recovering from the impact of the pandemic.

Reuters quoted the shilling at 112.45/65 per dollar on Thursday, a record low, after hitting its previous all-time low of 112.30/50 earlier in the week.

Sustained demand for dollars for imports is pushing the shilling downwards with traders projecting further decline against the greenback. The shilling depreciation is set to hit consumers with higher prices of imported goods like cars, electronics and second-hand clothes as well as that of electricity.

The shilling is on shaky ground on demand for dollar for imports, higher oil prices and repayment of dollar-denominated loans against slower recovery of exports and tourism receipts.

Kenya is hoping diaspora remittances and new multilateral loans will help provide the supply of dollars. The Central Bank of Kenya also has dollar reserves of Sh978.7 billion ($8.7 billion) enough to meet import demand for 5.3 months.

The weakening of the shilling has triggered fears of a fresh round of inflationary pressure, which has become a political headache for the government that has recently been forced to offer fuel subsidies to defuse social tension.

(Source: Business Daily)

China signals cuts in loans to Africa after reduction of financing pledge

China has signalled a reduction in loans to Kenya and other African countries in coming years after it cut financial commitment to projects in the continent by as much as a third in the next three years.

Nairobi has been a major beneficiary of China’s loans for the development of mega infrastructure projects such as roads and a modern railway over the last decade, making Beijing the largest bilateral creditor since 2015.

President Xi Jinping on Monday pledged — through a video link to the Eighth Ministerial Conference of the Forum on China-Africa Cooperation (FOCAC) in Senegal — to invest $40 billion (Sh4.5 trillion) in African countries for three years.

That represents a 33.33 percent drop from the $60 billion (Sh6.75 trillion) the world’s second-largest economy has committed to African countries in the last two FOCAC summits, which takes place every three years.

(Source: Business Daily)

The first Quarterly Economic and Budgetary Review Report (QEBR) for the FY 2021-22 has been published.

Herein below are the key findings:

  1. Improved revenue collection surpassing quarterly target by Ksh 26 Billion;
  2. Expenditure and net lending amounting to Ksh 631 billion against a quarterly target of Ksh 665 billion;
  3. Net foreign financing amounting to Ksh 28.2 billion;
  4. Domestic borrowing increased by Ksh 480 billion from Ksh 3.4 trillion to Ksh 3.9 trillion;
  5. Total external stock debt including sovereign bond amounted to ksh 4.05 trillion;
  6. Total outstanding National Government pending bills amounted to Ksh 423 billion as at 30th September 2021; and
  7. The QEBR lacks information on county transfers during the period under review.  

(Source: National Treasury)


Uganda’s foreign exchange reserve rises to Shs15 trillion ($4.2 Billion)

The International Monetary Fund (IMF) has said Uganda’s foreign exchange reserve level now stands at $4.3b (Shs15.4 trillion) following the disbursement of Special Drawing Rights (SDR).

This indicates a rise in the volume of Uganda’s foreign exchange reserve to cater for future imports of goods and services. Prior, Uganda’s foreign exchange reserve up to June 2021 was at $3.567b.

The IMF resident representative, Ms Izabela Karpowicz, said: “We project that, excluding oil-related financing and investment imports, reserves will remain at about 4 months of imports in the near term before rising to the East Africa Community target of 4.5 months of imports by 2025/26.” 

Uganda imports more than it exports. As a result, Uganda’s wide current account deficit is increasingly financed by the portfolio inflows into government securities.

(Source: The Monitor)

UAE investors to construct tea processing factories in Uganda

The government of Uganda has attracted investors from the United Arab Emirates (UAE) who are said to be planning to construct tea processing factories in some of the tea growing districts in western and northern parts of the country.

The executive director and board member of Elite Agro group of the United Arab Emirates Dr Abdul Monem led the investors group that appreciated the tea gardens in Kisoro district and said the construction of the tea processing factory would commence after the necessary paperwork and general survey is completed.

The Minister of Works and Transport, Gen Katumba Wamala has promised to work on the roads connecting to the tea growing sub counties and said plans are underway to extend hydropower electricity to the proposed site where the tea processing factory is scheduled to be constructed. 

(Source: The Monitor)


Pain at the pump as fuel prices hit record high

Motorists with effect from December 1 have started paying more for fuel, according to the latest price list released by the Energy and Water Utilities Regulatory Authority (EWURA).

The new prices have hit a record high even after the recent interventions by the Energy ministry to strike off certain charges and levies that were considered a burden to the consumer.

With the increase, consumers will pay Sh2,510 per liter of Petrol  in Dar es Salaam, while those  in Tanga and Mtwara will pay Sh2,525 shillings per liter and Sh2,569 shillings per liter, respectively.

According to the statement, the price of petrol at the Dar es Salaam port has increased by Sh84, diesel Sh29, while kerosene sees its price jump by Sh18.

(Source: The Citizen)

CRDB Bank, Visa International unveil new campaign to promote cashless transactions

The CRDB Bank has partnered with Visa International to launch a campaign that is geared at creating a culture of using the cards in making financial transactions.

Dubbed “Tisha Na TemboCARD Visa”, customers stand a chance to win various prizes, including watching Africa Cup of Nations Championship (Afcon) 2022 in Cameroon.

CRDB’s retail banking director, Mr Boma Raballa appealed to the Bank’s customers and Tanzanians in general to actively participate in the campaign by using their TemboCARD Visa cards to make payments while urging them to continue the practice even after the campaign as the aim is to make Bank card use a regular part of payment transactions as a strategy to build a cashless society.

CRDB Bank’s senior manager for card business, Ms Erica Mwaipopo, said to participate, one is expected to use their TemboCARD Visa cards to pay for purchases and services at shops, supermarkets, restaurants, hotels and petrol stations, purchasing equipment (PoS), as well as online payments, including paying for air tickets.

(Source: The Citizen)


KCB eyes total buyout of Rwandan lender 

Rwandan bank BPR Atlas Mara has said it is finalising modalities to allow local shareholders sell their stake in the lender amid interest by Nairobi-headquartered KCB Group.

Managing director Maurice Toroitich said the bank is targeting to finalise the process before end of year to enable Rwandan BPR shareholders to offload up to 23.7 percent of their shares.

The major beneficiary is expected to be KCB Group, which acquired 62 percent of BPR shares from Atlas Mara Ltd in November 2020 and an additional 14 percent from private equity firm Arise in August this year, bringing its ownership in BPR to 76 percent. It now has its sights on the remaining 24 percent minority stake in the hands of local shareholders to claim full ownership of the Rwandan lender.
(Source: The East African)

Rwanda, DR Congo commit to boost trade through transportation

The Minister of Infrastructure, Ambassador Claver Gatete and his DRC counterpart, Cherubin Okende Senga on Wednesday, December 1 held a bilateral exchange on the development of air, road and railway infrastructure projects.

The meeting that aimed at bolstering regional trade services was held on the sidelines of the 33rd plenary session of the African Civil Aviation Commission meeting, currently underway in Kigali.

Officials from both sides were assessing the implementation of agreed on projects in the transportation sector that are meant to improve bilateral relations and how they can be accelerated.

Speaking to the media, Minister Gatete highlighted that their discussions involved measures to perfect and pave the way for the agreements facilitating air and land movements between the residents of the two countries.

(Source: The New Times) 


Ethiopian Pharmaceuticals Supplies Agency Imports Supplies Worth Over 1 Billion Birr ($20.7 Million)

Ethiopian Pharmaceuticals Supplies Agency (EPSA) announced that it has imported medicines worth over a billion birr and they are ready for distribution.

Nahom Gemechu, Medicines and Medical Equipment Purchasing Contract Director at EPSA, said the medicines are stored in the agency’s warehouses. Out of these are, life-saving medicines worth 1.78 billion birr, basic medicines worth 161.5 million birr, and medical equipment worth 2.42 million birr, Mr. Nahom pointed out.

The agency has spent over 1.24 billion birr to purchase the supplies, which are expected to fill the existing demand and supply gap in pharmaceuticals, it has been learned.

(Source: 2Merkato)

AfDB Approves $217Mn Loan to Facilitate Road Transport Among Kenya, Somalia, Ethiopia

The African Development Bank Group (AfDB) said its Board of Directors has approved $217 million in loans to fund a project that will improve road transport services among Kenya, Somalia, and Ethiopia. 

The road transport services, primarily in Kenya’s northeastern region, are joined by the Kenyan government’s contribution of $6.3 million. The $223.3 million project covers the 740 km Isiolo-Mandera corridor and will enhance regional integration and trade between Kenya, Somalia, and Ethiopia. About 867,000 people who reside around the project area are expected to benefit from the initiative, AfDB noted.

The loans comprise $75 million from the non-concessional window of the Bank Group and $142 million from the concessional lending division, known as the African Development Fund, the Bank related. 

The road network, including the 142 km El Wak-Rhamu stretch, is one of the four priority corridors identified under the Horn of Africa Initiative, driven by the governments of Kenya, Ethiopia, Somalia, Sudan, Eritrea and Djibouti. The initiative is supported by the African Development Bank, World Bank and European Union. The road project is expected to contribute to the socio-economic development of communities along the corridor, which is characterized by high poverty levels and prone to insecurity. 

(Source: 2Merkato)


Permanent Representative of Eritrea to the United Nations pledges continued commitment to SDG Agenda 

During the annual Ministerial meeting of the G77 and China, Permanent Representative of Eritrea to the United Nations Ambassador Sophia Tesfamariam pledged its continued commitment to the fulfillment of the SDG agenda. 

Eritrea will continue its path to ensure an inclusive and people-centred development with the principle of social justice at its core. It has made strides in improving educational and health services, agricultural productivity, and infrastructure with meagre resources. Eritrea will also continue to contribute towards creating a peaceful and collaborative neighbourhood in Horn of Africa and the Red Sea.

Ambassador Tesfamariam stated that Eritrea has suffered incessant hostilities by successive US Administrations, including diplomatic pressures, sanctions and economic sabotage. As a result, Eritrea faces challenges in the economic, social and environmental areas and the overarching goal of addressing and eliminating poverty in all its shapes is becoming more elusive by 2030. 

Ambassador Tesfamariam emphasised Eritrea’s readiness to closely work with the sisterly member countries of the Group of 77 to realize the objective of a fair, just, peaceful and equitable global political and economic order.

(Source: The Ministry of Information Eritrea)


Covid-19 ‘Omicron’ – Sudan Imposes Travel Ban on Countries from Southern Africa

The health authorities in Sudan have issued a decision banning entry to travellers arriving from six Southern African countries, due to the outbreak of the new ‘Omicron’ mutation of COVID-19 that was identified in South Africa.

Sudanese authorities say that one case of infection with the new mutation has been reported by Khartoum International Airport, regarding a passenger from South Africa.

The ban, effective from tomorrow until February 27 next year, includes arrivals from South African countries Zimbabwe, Botswana, Lesotho, Namibia, and Lesotho. The decision stipulates that entry to Sudan will not be allowed for people who have been in or passed through those countries over the past 14 days.

Sudan echoes similar bans adopted this week by the European Union, UK, and USA.

(Source: Radio Dabanga)


Farmajo, Emir Of Qatar Discuss Strengthening Bilateral Relations

President Farmajo and Prince Sheikh Tamim discussed a number of issues related to strengthening relations between Somalia and Qatar and their common interests in order to promote effective and mutually beneficial cooperation.

The President thanked the Emir of Qatar for implementing road construction projects in Mogadishu, Afgoye, Balad and Jowhar, building key government facilities and expanding basic services, noting the efforts of the Somali people and government to build infrastructure. important for the country’s recovery and development.

For his part, the Emir of Qatar Tamim bin Hamad commended the Government and people of Somalia for their close cooperation, unity and solidarity in the recovery of the country, expressing a sense of brotherhood towards the country’s progress and the significant achievements we have achieved in recent years

(Source: Radio Dalsan)

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