10th December 2021 Trade & Financial Services Round Up

December 10, 2021 - 5 minutes read

KENYA

Kenya paid China Sh29bn to ease debt repayment standoff

Kenya wired Sh29.86 billion ($264.4 million) to China in the quarter to September 2021 to ease a standoff over debt repayments that delayed disbursements to projects funded by Chinese loans.

Treasury documents reveal that Kenya paid the billions in a period when Chinese lenders, especially Exim Bank, had opposed Kenya’s application for a debt repayment holiday.

Kenya asked for an extension of the debt repayment moratorium from bilateral lenders, including China, by another six months to December 2021, saving it from committing billions to Beijing lenders. The moratorium started in January 2021.

China postponed the repayments in January, helping Kenya temporarily retain Sh27 billion that was due for six months ending June 30.

China, which accounts for about one-third of Kenya’s 2021-22 external debt service costs, is the nation’s biggest foreign creditor after the World Bank.

Kenya plans to spend a total of Sh117.7 billion ($1.04 billion) on Chinese debt in the period, of which about Sh24.7 billion is in interest payments and almost Sh93 billion in redemptions, according to budget documents.

(Source: Business Daily)

A third of borrowers now on CRBs blacklist

A third of Kenyan loan accounts are negatively listed as defaulted with the country’s credit reference bureaus (CRBs) in an economy where Covid-induced job cuts and business closures have pushed thousands of people into a debt trap.

Data from the CRBs show that the accounts negatively listed stood at 4.6 million out of the 15 million accounts, reflecting a jump from 3.2 million accounts in April last year.

The bulk of the new listings is for mobile digital loans despite the government having frozen the blacklisting of defaulted loans below Sh1,000 from April to December last year.

The suspension was aimed at cushioning Kenyans from the economic fallout that came with Covid-19.

Workers and businesses defaulted on bank loans worth Sh93 billion in the year to February following the imposition of stringent measures to contain the spread of the coronavirus.

Data from the Central Bank of Kenya (CBK) shows that non-performing loans (NPLs) rose from Sh351 billion in February 2020 to Sh444 billion at the end of February this year — the sharpest one-year increase in recent history.

But this excludes defaults from unregulated digital mobile lenders who were also barred from forwarding the names of loan defaulters to CRBs.

(Source: Business Daily)

UGANDA

Fish exports register 25 percent increase

Fish exports have registered a 25 percent growth, the highest since last year, according to data from Bank of Uganda.

In data contained in the monthly Bank of Uganda commodity performance report, fish earned Uganda $11.4m (Shs40b) up from $8.4m (Shs30b) earned in September. This was a Shs10b or 25 percent increase in earnings during the period. 

According to the report, a total of 1,608 metric tonnes were exported, increasing from 1,139 metric tonnes in September, which represented an increase of 29 percent in volume. 

Mr Sujal Goswami, the Uganda Fish Processors and Exporters Association chairman, said the growth in value and volume had been noticed in October, November and part of December, building on a three-year trend.”

Data from Uganda Bureau of Statistics indicates that Uganda annually exports an average of 14,976 tonnes of fish and fish products.  

The largest exports remain coffee at 364,298 tonnes per annum compared to cotton which contributes 19,595 tonnes. Tea contributes 75,189 tonnes while tobacco stands at 23,038 tonnes. 

(Source: The Monitor) 

URA sets new tax rule for land buyers, sellers

Anyone buying or selling land worth Shs10 million or more must now have a tax identification number, Uganda Revenue Authority (URA) has said in a leaked internal memo. The requirement will increase URA’s scrutiny of the real estate sector, allow it to go after tax dodgers more easily, and widen the tax base. 

Ms Milly Isingoma Nalukwago, the assistant commissioner for research, planning and development at URA, in the memo said the requirement took effect yesterday.

“This is aimed at registering all the potential taxpayers and widening the current tax base.”

This is the latest move by URA to target the real estate industry after a new tax on rental income instituted this financial year. URA is keen to widen the tax contribution to Gross domestic product (GDP) which has, for over a decade, stagnated at between 12 and 13 percent, which is lower than in Kenya, Tanzania and Rwanda. The tax-to-GDP ratio, which records how much of a country’s output goes to the government in form of tax receipts, is also lower than the sub-Saharan African average of 16 percent.

Government’s five-year domestic revenue mobilisation strategy aims to raise the tax-to-GDP ratio to 16 percent by 2023. In the Financial Year 2020/2021, URA collected net revenue of Shs19.2 trillion, a 14 percent growth from the previous year, which translated into a tax-to-GDP ratio of 12.99 percent. 

In real terms, this reflected a growth in revenue of Shs25 trillion – the highest in four years – and a growth in the ratio by 1 percent.

(Source: The Monitor) 

TANZANIA

US puts Tanzania, five other countries on travel red list

The United States has put five countries, including Tanzania, on its red list, advising its citizens against travel to these nations.

The US Centers for Disease Control and Prevention (CDC) has put Tanzania together with France, Portugal, Andorra, Cyprus, Jordan and Lichtenstein under its high risk countries, discouraging American citizens from travelling to these destinations over Covid-19 related risks.

“Avoid travel to Tanzania,” CDC said in its latest notice, adding that, if one must travel to Tanzania, they should make sure they are fully vaccinated before travel.

On Sunday, it emerged that a traveller from Tanzania had tested positive for Omicron variant in New Delhi, India, prompting authorities to ‘start investigations’.

Despite frequent warning alerts from Tanzania’s Health Ministry, public compliance to Covid-19 prevention measure has remained low, the US Embassy said.

(Source: The Citizen) 

Bank of Tanzania gives ‘all-clear’ to fourth bureau de change

The Bank of Tanzania (BoT) has awarded a licence to a fourth bureau de change since closure of most of them in 2018. Fast Forex Bureau joins three others which are currently operating. In September, the central bank said it received five applications which are being scrutinised and the owners will be given operating licences if they meet all the criteria to operate a bureau de change in the country.

Reports show that the BoT had closed down almost all bureaus that were operating in the country by 2018. Subsequently, the central bank conducted a physical supervisory compliance review of the bureaux de change in Tanzania. The review resulted in closure of all bureau de change in the country to pave the way for compliance review and re-licensing.

Several reasons were mentioned for the closure of the bureaux de change. Some bureau de change outlets were said to be sources of money laundering, tax evasion and poor Know Your Customer (KYC) compliance regulations on Foreign Exchange, namely; the Foreign Exchange (Bureau de Change) Regulations, 2019 (GN No. 450 of 2019) published on June 7, 2019.

According to new requirements of operating a bureau de change, any application for a business licence must be accompanied with a written declaration and assurance of availability of not less than Sh1 billion set aside as capital. Any addition of Capital must have Central Bank approval.

A Bureau de change may increase or add its branch network in Tanzania but only upon obtaining a license from the Central Bank.

(Source: The Citizen) 


ETHIOPIA

Ethio Telecom to Pilot 5G Network in Ethiopia

Ethio Telecom is ready to pilot 5th generation (5G) network for the first time in Ethiopia, with its launch expected some time next week. The network is expected to be available on hotspot areas in Addis Ababa, including the area around Ethio Telecom’s Head Office and the premises of Bole International Airport.

Ethiopia’s state-owned telecom giant will use Huawei’s technology for the services, it has been learned. Ethio Telecom has been said to have been preparing for the 5G launch over the last two months.

The 5G technology is expected to be introduced to help facilitate data traffic in dense urban networks, being implemented on the existing 4G infrastructure. The move is set to make Ethiopa an early adopter of 5G network in Africa.

“Ethio Telecom is undergoing network infrastructure and system enhancements to pilot 5G networks soon and we’ve made some of our networks ready for 5G,” Frehiwot Tamiru, the company’s CEO, had said a few months back, speaking on the occasion of Ethio Teleocm’s expansion plans.

(Source: 2merkato)

National Bank of Ethiopia Amends Foreign Exchange Management Directive – Reveals Foreign Currency Allocation, Priorities

The National Bank of Ethiopia (NBE) issued a new directive, amending an earlier directive in use since October 2020. The NBE explained that the new directive would enable it to carefully manage its scarce reserve foreign exchange and ensure its efficient and proper allocation. The directive also laid out foreign exchange allocations and priorities in Three categories.

The national bank in the amended directive indicated that there is a need to ensure foreign exchange is allocated in a transparent and sound manner to priority and other economic sectors without opening a room for rent seeking behavior and malpractice.

The new directive put as a first priority comprises pharmaceuticals; like medicine, inputs for manufacturing of pharmaceuticals and laboratory reagents, while it has newly inserted inputs for manufacturing of edible oil, that has not been listed in any of three priorities previously is now set in the first category of the priorities in the new directive along with liquefied petroleum gas (LPG).

As a second priority it put inputs for agriculture and inputs for manufacturing including fertilizer, Seed, Pesticide and Chemicals. Its third priority arrays broader spectrum of listings including motor oil and lubricants; agricultural inputs and machineries; pharmaceutical products; manufacturing industries requests for procurement of machineries, equipment, spare parts, and accessories; import of nutritious food for babies; spare part for construction machineries for own use construction companies whose total values not exceeding USD 50,000 and educational materials. Profit and dividend transfer; transfer of excess sales of foreign airlines and sales from share and liquidation of companies by FDI are also to be prioritized under this category.

(Source: Addis Standard)

RWANDA

MTN Rwanda to invest Rwf40bn ($40 million) in technology in 2022 – says CEO

Mitwa Ng’ambi, the Chief Executive of MTN Rwanda, has provided insights into the year’s progress (2021) including MTN’s growth, financial position, Mobile Money, Connect Rwanda and network expansion. 

The overall business grew quite well, higher than 20 per cent (year on year) as of September and compared to last year. A lot of the growth drivers are not unique to previous years. Voice grew well, by about 12% primarily due to the growth of MTN’s customer base. Mobile Money grew by more than 50%, which is among the fastest growing parts of the businesses. Within Mobile Money, person to person transfers and cash out makeup close to 80 %.

MTN has had to re-think its investment profile, where MTN’s technology investments in 2021 has grown to $32 million from an average of $22 million in previous years. This technology investment will rise to about $40 million in 2022.

The technology investments in 2022 will include a rollout of at least 200 network sites, compared to 140 rolled out in 2021 and 80 in 2020. MTN Rwanda wants to provide customers with the ability to pick up their phones and make calls without interruption. 

(Source: The New Times) 

Rwanda and China sign agreement to abolish double taxation

Rwanda and China on 7th December 2021 signed an agreement to abolish double taxation of goods from one country to another, which is expected to boost investment and trade between the two countries.

The agreement was signed by the Minister of Finance and Planning, Dr Uzziel Ndagijimana, and the Chinese Ambassador to Rwanda, Rao Hongwei.

Dr. Uzziel Ndagijimana points out that such agreements as Rwanda will benefit because China is a good and large market, and it will also help prevent tax evasion.

“China is the largest market in the world, and we have a great deal to do with it because it will allow Chinese investors to come and work in Rwanda because we have removed them from coming here in Rwanda and taxing them, returning them home and taxing them,” he said. The agreement states, however, that there is a need to increase the exchange of information on taxation so that no Rwandan tax evader from China, or any Rwandan working there, can be tax evaders. “

Chinese Ambassador to Rwanda Rao Hongwei says the agreement is a key factor in boosting trade between the two countries, and promises to be a catalyst for increasing Chinese investment in Rwanda.

(Source: Rwanda Broadcasting Agency)

ERITREA

Announcement from the Ministry of Health

Twenty-nine patients have been diagnosed positive for COVID-19 in tests carried out today at Quarantine Centers and Testing Stations in the Central, Southern, Anseba, and Southern Red Sea Regions.

Out of these, twenty patients are from Quarantine Centers (8) and Testing Stations (12); Central Region. Six patients are from Testing Stations in Adi-Quala (3), Senafe (2), and Adi-Keih (1); Southern Region. Two are from Testing Stations in Hamelmalo (1) and Hagaz (1); Anseba Region. The last patient is from Testing Station in Assab, Southern Red Sea Region.

On the other hand, forty patients who have been receiving medical treatment in hospitals in the Southern (24), Central (15), and Gash Barka (1) Regions have recovered fully and have been discharged from these facilities. Sadly, sixty years old patient from the Southern Region has passed away due to the pandemic.

The total number of recovered patients has accordingly increased to 7,311 while the number of deaths has risen to 62. The total number of confirmed cases in the country to date has increased to 7,513.

(Source: The Ministry of Information Eritrea)

SUDAN

Central Bank of Sudan: 15th foreign exchange auction worth $50 million

The activities of the 15th foreign exchange auction No. 7/2021 kicked off on 7th December at the premises of the Central Bank of Sudan, with a value of $50 million.

Some 16 banks participated in the auction and the applications received totalled 49 requests.

The number of applications that were allocated for reached 40 requests. The highest exchange rate for allocations reached SDG449.65, and the lowest rate was SDG425.

It is worth noting that these auctions organized by the Central Bank of Sudan come in implementation of the policies of the bank regarding implementation of the flexible managed exchange rate policy and within the framework of the efforts made to stabilize the exchange rate of the national currency.

(Source: Sudan News Agency) 

Northern State begins border trade procedures with Egypt and Libya

The Higher Committee for Border Trade in the Northern State has held a meeting headed by the Secretary General of the Government of the State, Hassan Taj El-Din Ayes, where the meeting received a briefing from the state’s trade commissioner on the arrangements made to initiate border trade procedures between the state and each of Egypt and Libya.

The meeting also discussed defining the paths and securing  Al Mothalas-Kufra-Dongola and Arqin-Dongola roads.

The Secretary-General of the Government of the State stressed that the government relies a lot on border trade in providing goods and services for the benefit of the people of the state.

(Source: Sudan News Agency) 

SOMALIA

PM Roble and UAE Ambassador Discuss Bilateral Relations
Somali Prime Minister Mohamed Hussein Roble has held talks with the ambassador of the United Arab Emirates, Mohamed Ahmed Al’uthman, PM’s office said in a statement.

The high-level meeting comes years after the UAE severed ties with Somalia following a political wrangle over Mogadishu’s refusal to join Gulf Arab nations in their blockade on Qatar, a key ally and staunch supporter of the Somali government led by President Mohamed Abdullahi Farmajo.

“During the meeting, they discussed bilateral relations between the two brotherly countries and ways to develop them and the UAE’s contribution to helping those affected by the drought that hits large parts of the country,” the office of the prime minister said.

According to the prime minister’s office, they discussed with the UAE government how to contribute to the relief efforts for the Somali people affected by the ongoing drought across the country.

Roble’s office did not provide further details on the meeting. The UAE embassy in Mogadishu has not yet commented on the meeting.

In May 2018 Somalia and the UAE severed diplomatic relations after Somali authorities seized nearly $10 million USD in “mystery cash” from a Royal Jet airliner arriving from Abu Dhabi.

The move by the Somali government also ended the UAE’s role in the military affairs of Somalia.

Since then the UAE has developed ties with the Somali autonomous regions of Puntland and Somaliland, as well as providing support to opposition politicians in Mogadishu.

(Source: Radio Dalsan)

Somali, British Governments Discuss Economic Issues

Minister of Finance FGS Dr; Abdirahman Duale Beyle, today met in Mogadishu with the British Ambassador to Somalia Kiin Foster, to discuss strengthening cooperation between the two governments.

The meeting focused on the country’s economic reforms and how to further strengthen the close cooperation between the Federal Government of Somalia and the United Kingdom.

“We have had fruitful discussions on economic reform in Somalia, and we have also discussed the remaining challenges and the way forward,” said Minister Beyle.

UK Ambassador to Somalia Kiin Foster FCDO has lauded the government’s efforts to streamline the country’s economy.

The Minister of Finance, Abdirahman Duale Beyle, thanked Kiin Foster and the United Kingdom for their full support to the people and government of Somalia.

(Source: Radio Dalsan)

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