17th December 2021 Trade & Financial Services Round Up

  • 17 Dec 2021
  • 7 Mins Read
  • 〜 by Amrit Labhuram

Oil companies to get Sh8bn for unchanged fuel prices

The State will pay oil marketers an estimated Sh8.12 billion ($71.8m) for keeping fuel prices unchanged in the monthly review that will lapse on January 15.

Compensation for diesel will be highest at Sh4.82 billion followed by that of petrol at Sh3.03 billion and kerosene at Sh0.26 billion based on the average consumption of the three fuels.

Industry regulator, Energy and Petroleum Regulatory Authority (Epra), retained the margins for suppliers at zero per litre of petrol, diesel and kerosene in the latest review for the second month running.

It also cut petrol prices by Sh4.57 a litre, diesel Sh7.90 and Kerosene Sh9.43 —keeping the costs of the products unchanged at Sh129.72, Sh110.60 and Sh103.54 in Nairobi respectively.

This was meant to cushion motorists from rising global fuel prices on the back of a speedier than expected economic recovery as vaccines are rolled out.

Without the subsidy, petrol would have hit a historic high of Sh148.04 a litre, diesel Sh132.49 a litre and kerosene Sh127.07 a litre, in what would have reignited public anger over the increased cost of living.

(Source: Business Daily) 

Half of mobile phone borrowers in default

More than half of loans taken through mobile phone platforms are in default in the wake of Covid-19-induced job cuts and business closures that have pushed thousands of people into a debt trap, a new survey reveals

The findings of the household survey by the Central Bank of Kenya (CBK), FSD Kenya and the Kenya National Bureau of Statistics (KNBS),show that 50.9 percent of the respondents have defaulted on mobile loans.

The mounting defaults emerged in a period digital lenders have flooded Kenya with high interest rates that rise up to 520 percent per year.

The Covid-19 economic hardships also saw an average of 41.8 percent of borrowers default on loans tapped from friends and relatives while 40.8 percent were unable to settle goods borrowed on credit from shopkeepers.

The least default for credit borrowed outside the mainstream banking system was on advances to staff by employers at 11.3 percent, given the ease to recover the cash from monthly salaries.

(Source: Business Daily) 


Tanzania enters into more joint ventures with mining firms

The Tanzanian government on Monday, December 13, signed an agreement with four mining companies to form joint ventures (JV), a move which is meant to set the stage for Tanzanians to benefit from the country’s natural resources.

The companies born out of the JV – and which are to invest a total of TSh1.755 trillion – are Faru Graphite Corporation, Petra Diamonds Ltd (PDL), Nyati Mineral Sands Ltd and Sotta Mining Corporation Ltd.

The negotiation team’s chairman, Prof Palamagamba Kabudi, said in all companies except the PDL, the government enjoys 16 percent free-carried interest.

For PDL, Prof Kabudi said the government had agreed an issue of shares in the mine’s holding company Williamson Diamonds Ltd (WDL).

The deal with the London-listed miner will increase the government’s interest to 37 percent from 25 percent.

This suggests that the deal will reduce Petra’s stake in the mine to 63 percent from 75 percent.

(Source: The Citizen)

How Tanzania plans to spend TSh7 trillion Badea loans, grants

News that Tanzania is eyeing loans and grants amounting to $3 billion (about TSh7 trillion) from the Arab Bank for Economic Development (Badea) in Africa in the next five years was welcomed by some analysts and the business community, all of whom are optimistic that the monies will stimulate economic growth.

The Ministry of Finance and Planning said in a statement that the Arab lender agreed to give the money to finance various development projects, including roads, energy, education, agriculture, and private companies’ capacity-building programmes.

The bank arrived at that decision following talks between Tanzania’s Finance and Planning Minister Mwigulu Nchemba and Badea’s Director-General, Dr Sidi Ould Tah.

The statement went further to explain that the money will be disbursed over five years of implementation of the country’s third Five-Year Development Plan (FYDP-III: 2021/22–2025/26).

“We have had detailed and meaningful discussion with the Tanzanian Finance and Planning minister and his delegation and have decided to dish out $3 billion to cement our relationship with the government of Tanzania,” Dr Tah noted in the statement.

(Source: The Citizen)


Trade dispute: Uganda considers ban on Kenyan produce

Uganda is considering restricting some of Kenya’s raw and processed agricultural products from its market, saying it will be merely reciprocating Nairobi’s continued ban on Kampala’s produce.

Kenya is Uganda’s biggest trade partner. Kenyan exports to Uganda in 2020 amounted to $673.66 million while Uganda’s exports to Kenya stood at $465.55 million during the same period.

Observers say the trade row between the two countries could have long-running implications for imports and exports across the East African region, adding that the restrictions go against a Customs Union Protocol established by the East African Community (EAC) single market.

(Source: The Monitor)

Post Bank becomes Uganda’s 27th commercial bank

Bank of Uganda has granted Post Bank a tier one licence, which effectively completes its transformation into a commercial bank. 

Post Bank, which as of February 2021, operated a branch network of 33 fixed branches and 17 mobile banking units, has been operating as a non-bank credit institution in the tier II category. 

In an email inquiry yesterday, Dr Bazinzi Natamba, the Bank of Uganda acting director of communications, confirmed Post Bank’s elevation, noting the licence had already been issued.

Post Bank becomes the 27th bank to operate in Uganda under the tier one category. In April, 

Post Bank told Daily Monitor it had completed a five-year strategy in which it had sought to transition into a fully-fledged commercial bank.

The completion, Post Bank said then, was part of the large plan through which the bank had upgraded a number of systems to fit and compete with large commercial banks.

(Source: The Monitor)


Sweden donates 8 billion Frw to Rwanda

Sweden has provided Rwf8 billion ($7.7 million) and Rwf900,000 to Rwanda to help with climate change in the Eastern Province.

The funding agreement was signed between Sweden, which was represented by the country’s ambassador to Rwanda, Johanna Teague, and the Minister of Finance and Planning, Dr. Uzziel Ndagijimana on the Rwandan side.

These activities include 35 conserved areas, planting trees on 400km of roadsides, 400km on land and on the banks of rivers and lakes, and 8,000 hectares of community farms on which mixed crops will be planted.

The goal is to find a sustainable solution to the ecosystem and to improve performance based on environmental protection. 

Rwanda needs $11 billion to reduce air pollution by 38% by 2030.

(Rwandan Broadcasting Agency)


Ethiopia Secures Over 54Bn Birr from Customs in 5 Months

Ethiopian Customs Commission (ECC) announced it has collected over 54 billion Birr ($1.1 billion) revenues during the past five months. The amount has shown an increase of 8.2 billion Birr or 18.5 percent, compared to the same period last year.

ECC said it plans to secure a collection of 155 billion Birr ($3.16 billion) or more in the 2021/22 Ethiopian fiscal year that started on July 8.

During the previous year, the Commission had collected 112.5 billion Birr, 89.5 percent of the target it set.

ECC has pointed out it has been engaged in cracking down on contraband trade. During the past four months, the Commission related, its officials have seized contraband items worth 1.2 billion Birr. Furthermore, 265.2 million Birr that was to be smuggled out of the country for illicit purposes has been seized, along with 293 related arrests.

The Commission pointed out it has seized contraband items worth 7.7 billion Birr during the past two and half years, and vows to continue its crackdown on contraband trade in tandem with federal and regional security forces.

(Source: 2merkato) 

Ethiopian Electric Power Signs Deal with French, Chinese Companies to Build National Power Control Center

Ethiopian Electric Power has inked a deal with the French General Electric and the Chinese Sinohydro companies to have a national power control centre built.

The deal includes the building of two national power control centers, as well as laying down a control and follow up system with power distribution stations.

Signing the deal were Ashebir Balcha, CEO of Ethiopian Electric Power, Manyazewal Tesfaye, General Electric Head of Sales for East Africa, as well as Tian Hongjun, a representative of Sinohydro.

The project will take three years to complete, and has €57.67 million, in addition to 102 million Birr, budgeted for it.

A third of the project’s expenses is covered by Ethiopian Electric Power while the rest is financed by the French Development Agency, Agence Française de Développement.

(Source: 2merkato) 


11 test positive for Covid-19: Ministry of Health

Eleven patients have been diagnosed positive for Covid-19 in tests carried out today at Quarantine Centers and Testing Stations in the Central, Northern Red Sea, and Southern Regions.

Out of these, six patients are from Quarantine Centers (1) and Testing Stations (5) in Asmara, Central Region. Three patients are from Testing Stations in Ghinda (1), Gelalo (1), and Massawa (1); Northern Red Sea Region. Two patients are from a Testing Station in Senafe, Southern Region.

On the other hand, 41 patients who have been receiving medical treatment in hospitals in the Central (24) and Southern (17) regions have recovered fully and have been discharged from these facilities. Sadly, an 85-year-old patient from the Central region died.

The total number of recovered patients has accordingly increased to 7,490 while the number of deaths has risen to 65.

The total number of confirmed cases in the country to date has increased to 7,686.

(Source: Ministry of Information Eritrea)


US $150m Electricity Recovery Project Aims to Help Light Up Somalia

The Somalia Electricity Recovery Project is set to increase access to cleaner, lower cost electricity for 1.1 million households, or approximately seven million people, of which 3.5 million are women. The project also aims to reestablish a stable electricity supply and support regional integration.

Out of a population of about 15 million, nine million Somalis lack access to electricity services, and the cost of power is among the highest in the world. In addition, almost nine out of ten Somali households are deprived in at least one dimension of poverty–monetary, energy, education, or water and sanitation (World Bank (2019) Somalia Poverty and Vulnerability Assessment).

The combined impacts of the pandemic, devastating flooding, droughts, and a desert locust infestation further undermine economic recovery and efforts to reduce poverty.

90% of Somalia’s electricity is supplied through isolated diesel-based mini-grids operated by private energy service providers (ESPs).

The combination of a highly fragmented private electricity sector along with an installed capacity that is inadequate to serve current and future demand, has resulted in an inefficient and expensive supply given the lack of economies of scale. Somalia also has significant potential for using renewable energy for electricity generation, particularly solar and wind energy, as identified by numerous assessments by the World Bank.

(Source: Radio Dalsan)

Despite Election Chaos, Somalia Transition Plan Takes Shape

Somalia’s Transition Plan, one in which the country hopes to start carrying its own obligations more than donors and international partners, has started taking shape.

And in spite of the fiasco surrounding the much-delayed elections, officials have started meeting regularly to discuss possible working cooperation between the federal government and federal member states often known as FMS.

This week, a two-day consultative meeting held in the Somali capital Mogadishu agreed on the inauguration of the Somali Transition Plan Strategic Steering Committee (STP SSC) on Thursday.

The Federal Government of Somalia led the meeting, but attracted representatives from the Federal Member States, Benadir Regional Administration (Governorship of Mogadishu and surrounding areas), the Somali Security Forces and Somalia’s key partners supporting the security sector of the Horn of Africa country.

Various portfolios including the prime minister’s office, the foreign affairs, internal security, interior affairs, chief of defence forces and the police commissioner have all endorsed the key decisions that were reached by the SSC Secretariat on the agreed priorities of the STP for the next quarter.

Somalia’s initiative is to have a transition plan to see the peacekeepers serving under the auspices of the African Union Mission in Somalia (AMISOM) exit the country completely by 2023, having begun transferring security duties to local authorities from January next year.

(Source: Daily Nation)