14th August 2020 Trade & Financial Services Round Up

August 14, 2020 - Reading Time: 5 minutes - By The Vellum Team

Safaricom’s dollar demand tanks shilling to record low

The shilling has weakened to a record low of 108.45 units against the dollar, erasing gains made last week, with traders linking this on demand for the US currency from Safaricom ahead of Sh56.09 billion dividends payout. Wednesday’s poor run marked the ninth straight day of weakening for the shilling after gaining against the dollar, to close July at 107.70.

This means it has lost 0.75 units since August started.

CMA wants Treasury to return of tax incentive for listing firms

The Capital Markets Authority (CMA) wants the National Treasury to reinstate tax incentives for listing firms that were lowered in recent law amendments. The CMA says that the lowering of the incentive and the introduction of value added tax (VAT) on brokerage services revenue will hurt the attractiveness of Nairobi Securities Exchange (NSE) to potential listings. CMA director of policy and regulation Luke Ombara said that the securities regulator will be putting a case against the changes that were introduced by Tax Laws (Amendment) Act, 2020.

Sh9 billion Covid cash lies idle in CBK vaults

The Treasury is sitting on cash pile of Sh9.9 billion in donations from State agencies, voluntary salary cuts and money seized from graft lords amid rising coronavirus infections and a shortage of key medical kits in the counties.

Treasury Cabinet Secretary Ukur Yatani Thursday told Parliament that the idle cash includes Sh9.38 billion recovered from graft and money laundering cases as part of efforts to beef up the Covid-19 emergency fund. The recoveries were by the Office of the Director of Public Prosecutions (ODPP), the Ethics and Anti-Corruption Commission (EACC) and the Assets Recovery Authority (ARA).


Government reviews its advisory on international travel

The government reviewed its advisory on international travel on Wednesday, 5 August 2020 in a deliberate move to accommodate additional measures aimed at curbing the spread of COVID-19 from other countries. “Travelers from other countries with symptoms and signs related to COVID-19 infection will undergo enhanced screening and may be tested for RT-PCR,” said the new advisory. “Crew members shall not be subjected to present a negative test COVID-19 certificate as a condition of entry or departure,” said the new advisory. However, it explained, the crew members will be screened for symptoms and signs in line with the country’s protocol. Other measures related to adherence to Infection Prevention and Control (IPC) measures such as hand hygiene, wearing masks and keeping physical distancing as appropriate remain unchanged, as well as measures relating to truck / vehicle carrying goods and services.


Tourism stakeholders ask the government to set a timeline for re-opening airspace.

A cross section of tourism stakeholders have asked government to set a timeline within which it hopes to re-open Uganda’s airspace. Speaking on the sidelines of a stakeholders meeting in Kampala, Ms Pearl Hoareau Kakooza, the Uganda Tourism Association (UTA) president, said the president and his cabinet should consider re-opening the airport as priority for the recovery of the economy. “We have met as members [UTA] and resolved that we need an interim date for re-opening of Entebbe of International Airport so that we can plan and work out a plan for our visitors from different countries,” she said, noting it was time for government to open up the country’s airspace to revive not only tourism, but other auxiliary businesses.

MPs want some sectors to reopen

Members of Parliament want some sectors of the economy still under lockdown to re-open. They argue that the sectors are prepared to meet the standard operating procedures and adhere to the COVID-19 guidelines. Ever since the economy was locked in March 2020, some sectors have remained closed like schools, places of worship, sports and the sale of non-food items among others.

Uganda’s foreign exchange reserve stands at 3.9 bln USD

Uganda’s stock of foreign exchange reserves at end of June 2020 stood at 3.9 billion U.S. dollars, which is equivalent to 5.2 months of future imports of goods and services, the country’s central bank has said.

Adam Mugume, executive director of research Bank of Uganda said in an interview on Wednesday that the growth is attributed to the bank’s monetary policy of purchasing the dollar from the domestic money market for reserve build-up.

Earlier this year, the central bank statistics showed the foreign exchanges reserves were at 3.4 billion dollars, equivalent of four months of future imports of goods and services.

Ugandan shilling depreciates by 3%

The Ugandan shilling depreciated by 3 percent against the U.S. dollar in the first five months of 2020 due to increased outflows of investment following the COVID-19 outbreak, a new report said Wednesday. Bank of Uganda, the country’s central bank, in its monetary policy report for August 2020 said the pandemic forced foreign investors to take out their investment from Uganda.

Committee finds gaps in Health Insurance Bill

The Parliamentary Committee on Health has revealed that the Health Insurance Bill that was presented to Parliament is not clear, especially on the contributions to the Fund. Mr Ronald Bagaga, the legal counsel to the Committee, said although the Bill states how the contribution from different sections of the population will be arrived at, it does not indicate which percentage will be contributed by each of those sections. “Clause 21 of the Bill states that contributions to the Fund will be by any person who attains the age of 18 years and is ordinarily a resident in Uganda. For a salaried employee deductions will be from a wage or salary by the employer and a contribution by the employer. For a self-employed person an annual contribution is determined based on total income, by the board in consultation with the ministers of Health and Finance,” Mr Bagaga said during a media engagement on the National Health Insurance Scheme (NHIS) in Kampala. Cabinet last year approved the National Health Insurance Scheme (NHIS) 2019 that will require all Ugandans above the age of 18 years to contribute to the scheme before accessing health services across the country. The scheme is a must-pay-for by all Ugandans and foreigners in the country.


New land use masterplan is in line with Vision 2050 – official

On 29 July, the Cabinet approved a new National Land Use and Development Master Plan, a document that will guide how land in the country is used for at least 30 years, up to 2050. The document, according to officials, comes to boost the optimal use of land to spur economic transformation in the country. According to Alexis Rutagengwa, head of land use planning at the Rwanda Land Management and Use Authority, underlying and emerging land use challenges to be addressed going forward include population growth, settlement issues, and limited agriculture land. In ensuring that achievements registered so far are sustained, he noted, the revised national land use development master plan for 2020-2050 introduces pertinent “new policy and strategic measures.”

US Embassy donates medical supplies worth Rwf130m.

The US Embassy in Kigali donates Rwf131 million worth of medical supplies with an aim of supporting Rwanda’s effort to fight Covid-19.

The medical supplies will be rapidly delivered to health workers in 349 public healthcare facilities across the country; including 25 district, provincial, and referral hospitals.

Tourism sector to gain from Komeza COVID-19 recovery and resilience programme

Entrepreneurs in the tourism value chain now have the chance to receive a grant of up to USD 50,000 thanks to the new COVID-19 recovery programme. The Komeza COVID-19 recovery and resilience programme is a partnership between Entrepreneurial Solutions Partners (ESP), Equity Bank and MasterCard Foundation. It is set to benefit 120 businesses through financial support and technical assistance in the next one year. The USD 2.5-million aims at helping small and medium enterprises (SMEs) to weather the COVID-19 crisis.

Biruta: Burundian refugees free to return home.

Rwanda has no problem with the return of Burundian refugees back to their country, according to Dr. Vincent Biruta, the Foreign Affairs Minister.

He said that Rwanda currently hosts over 71,000 Burundian refugees making the country the 3rd highest host of refugees in the region.

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