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6th May 2022 Trade & Financial Services Round Up

KENYA 

Economy grows fastest in 11 years on easing Covid curbs

Kenya’s economy rebounded in 2021 to grow at the fastest pace in 11 years on easing of Covid-19 restrictions which boosted recovery in key sectors excluding agriculture whose activities were hit by poor rainfall. Data from the Kenya National Bureau of Statistics (KNBS) showed economic activities expanded 7.5 percent compared with a contraction of 0.3 percent a year earlier when activities almost ground to a halt because of measures to contain the spread of the pandemic.

This was the highest expansion since 2010 at 8.1 percent when economic activities recovered from the aftermath of the twin shocks of the global financial crisis and post-election skirmishes in 2008 followed by a biting drought in 2009. The growth in 2021 was largely supported by improved performance in manufacturing, trade, transportation, real estate and financial services which befitted from re-opening of the economy. Farming activities, which account for about 22.4 of Kenya’s economic output, however, contracted 0.2 percent as a result of poor rainfall which hurt production of key crops such tea, maize and coffee.

(Source: Business Daily)

TANZANIA 

CRDB Bank Plc registered a record Sh90 billion profit after tax during the first quarter of the current calendar year, thanks to its impressive growth in both interest and non-interest income streams.

This is a 111 percent growth compared to a similar period last year, the bank said yesterday.

Announcing the bank’s financial results in Dar es Salaam yesterday, the CRDB Bank’s chief executive officer, Mr Abdulmajid Nsekela said interest income grew by 16 percent year on year due to a growth in lending, particularly retail loan book.

The non interest income grew by 80 percent, thanks to the lender’s concerted efforts in driving use of alternative channels. 

(Source: The Citizen) 

UGANDA

Central Bank likely to raise CBR

Bank of Uganda has said it is closely monitoring movements in commodity and energy prices, which continue to present heightened inflationary pressures. 

Dr Michael Atingi-Ego, the Bank of Uganda deputy governor, said that whereas they had kept the Central Bank Rate (CBR) low because of the need to support economic recovery, the current uncertainties resulting from disruptions in global supply and the Russia-Ukraine conflict, are likely to impact inflation due to higher commodity and fuel prices. 

Considering this, therefore, he said, the CBR will be adjusted depending on how fast the economy recovers and how quickly inflation evolves against the Central Bank target of 5 percent.

(Source: The Monitor)  

Uganda losing agricultural advantage to neighbours

Uganda is losing its agricultural productivity advantage to neighboring countries due to lack of sufficient development in the sector, according to the United Nations Capital Development Fund.   

Speaking during the Agribusiness Mkutano (conference) in Kampala, Dr Dmitry Pozhidaev, the United Nations Capital Development Fund country and regional head, said before the 2000s, Uganda was ahead of all East African member states in terms of agriculture productivity, but Rwanda and Kenya have since become superior.

(Source: The Monitor)

Listed banks hold onto billions of shillings in divided payouts

Listed commercial banks will hold back billions of shillings in dividend payments for the period ended December 2021 following a directive by Bank of Uganda requiring such financial institutions to continue withholding discretionary, dividend and bonus payments.

This is the second year commercial banks have not paid dividend and discretionary payments following a directive by the Central Bank on March 24, 2020 directing them to suspend such payment due to the need to stock up enough liquidity buffers to insulate them again Covid-19 related shocks.

(Source: The Monitor)

MTN mobile money deposits grow to Shs959.9b

MTN held Shs959.9b in mobile money deposits for the period ended December 2021, according to details published in the telecom’s financial results. This was an increase of more than Shs 304.6b from Shs 655.3b the telecom held in the same period in 2020. 

It is the first time MTN has published details of its mobile money business, whose regulation was last year moved to the Bank of Uganda. 

Under the National Payment Systems Act, the law requires that mobile money, which largely is a financial function, is separated from telecommunications services. 

Therefore, under the law, MTN, just like other telecoms that operate mobile money businesses, are required to publish details of their financial position

(Source: The Monitor)

RWANDA

East Africa’s largest lender by assets Equity Group Holdings (EGH) Ltd is fighting to keep its underperforming subsidiaries in Tanzania, South Sudan and Rwanda afloat through additional funding to strengthen its ‘vertical’ growth plan, mooted after abandoning further cross-border acquisitions last year.

(Source: The Monitor)

ETHIOPIA 

Ethiopia, South Sudan Review Implementation of Road Building Agreements

Nebil Mahdi, Ethiopia’s Ambassador to South Sudan, has met and discussed with Simon Mijok Mijak, Minister of Roads and Bridges of the Republic of South Sudan, focusing on implementing previously held agreements to interconnect the two Countries by road infrastructures.

During their talk, Ambassador Nebil reaffirmed Ethiopia’s commitment to materialize agreements pledged to build roads and cement the socio-economic linkages between the two countries, Ethiopia’s Ministry of Foreign Affairs announced.

Highlighting the longstanding relationships between Ethiopia and South Sudan and the strong people-to-people ties, Simon Mijok Mijak noted the impact of poor road infrastructure interconnection in limiting options that the two countries could have gotten in trade and investment engagements.

(Source: 2merkato)

ERITREA

Training on technology and information system

The Central Region administration organized one month training on technology and information system to 40 sub-zonal administrators and managing directors.

Speaking at the concluding event of the program held today 5 May, Mr. Tedros Tekle, head of Statistics and Cartographic Information in the Central Region, said that the objective of the training was to upgrade the capacity of the administrators and managing directors and enable them provide effective and timely administrative service to the public.

Commending for the training opportunity they were provided, the representative of the trainees expressed conviction to apply the training they received practically on the ground and serve the public with commitment.

(Source: Ministry of Information, Eritrea)

SUDAN

Sudanese Pound decreased 20 times in five years

The economic situation has continued to deteriorate in Sudan during 2022. The United Nations Office for the Coordination of Humanitarian Affairs (OCHA) in Sudan revealed the continued deterioration of the economic situation. Reports indicate that the value of the local currency has decreased 20 times (2,000 per cent) during the past five years.

In its latest report, OCHA states that the suspension of economic support provided by the international community (following the October 25 military coup in 2021) led to the suspension of more than $7.2 billion, and indicated that the decline in foreign exchange reserves, limited economic activity, and continued political instability led to the depreciation of the Sudanese Pound (SDG).

The exchange rate for the US dollar rose in commercial banks from about SDG442 at the beginning of 2022 to more than SDG565 by 31 March 2022 according to the Central Bank of Sudan.

On March 7, the Central Bank of Sudan announced the unification of the Sudanese Pound exchange rate to allow for the determination of currency exchange rates without interference from the Central Bank. Foreign exchange dealers on the parallel market reported that the Dollar exchange rate recorded SDG560 the previous day.

Since the October 25 military coup, the parallel market has started to become more powerful again and divert from the official exchange rate.

Economic conditions in Sudan have been harsh and many basic daily needs have become unaffordable for people as the Sudanese Pound plunges further and further.

(Source: Radio Dabanga)

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