August 19, 2022 - 5 minutes read

19th August 2022 Trade & Financial Services Round Up

By Amrit Labhuram
KENYA

New President inherits half a trillion shillings of unpaid bills

Kenya’s new President will inherit more than Sh500 billion owed to suppliers and contractors by ministries and State agencies in bills that have exposed many small and medium-sized businesses to closures and auctions.

Latest Treasury statistics show pending bills climbed to Sh504.7 billion at the end of the last financial year in June, a 40.39 percent jump over Sh359.5 billion the previous year, making it the biggest annual jump on record.

Cash-strapped parastatals, including public universities, account for the largest share of the unpaid bills, which is hurting cash flow among suppliers and contractors with State deals.

Many Kenyan small and medium-sized businesses bid for government contracts because the State is the biggest spender in the country.

The arrears have continued to mount amid tough rules requiring payments be made within 60 days of goods or services being supplied.

Surprisingly, half of the Sh145.20 billion new arrears for the last financial year were accrued in the April-June period after Treasury Cabinet Secretary Ukur Yatani directed State entities to clear verified bills before the year closed in June.

(Source: Business Daily)

TANZANIA

Investors snap up NMB stocks after record half-year results

Foreign investors returned to the Dar es Salaam Stock Exchange (DSE) last week when they injected over TSh5.34 billion at the NMB Bank Plc counter in their attempts to cash in on lucrative financial results for some listed equities.

NMB Bank Plc, which is currently the most profitable bank in the country, traded a total of 1.9 million shares at the DSE last week.

As a result, it accounted for 86 percent of last week’s TSh6.244 billion turnover.

During the preceding week, a total turnover of TSh2.133 billion was realized.

NMB Bank Plc’s net profit for the first six months of the current calendar year rose to Sh208 billion, a 53 percent rise from TSh135.5 billion that was registered during a similar period last year.

This, the bank’s chief executive officer, Ms Ruth Zaipuna, said recently, was a reflection of solid business momentum, strong efficiency gains, and significant improvements in the loan portfolio quality.

(Source: The Citizen)

UGANDA

Central Bank records dollar outflows worth $274m 

At least $52m was drawn out of Uganda in the second half of the 2021/22 financial years, completing a combined draw out of $274 million in the full year period ended June. 

This, according to Bank of Uganda, was almost double the $145 million, which the country earned from foreign exchange thus exposing the shilling to further volatility during the period. 

“There has been a shift in the direction of portfolio flows to net outflows of $274 million, from net inflows of $145 million the previous year. In the second half of 2021/22 financial year, offshore withdrawals of $52 million were observed.  Other investment net inflows contracted by 14 percent,” the Central Bank said, noting that a decrease in loan disbursements amid increased external debt service payments, was also observed. 

The shilling has been under pressure amid an increase in dollar demand due to a rapid surge in the import bill yet dollar outflows continue to grow due to existing offshore investors and capital outflows. 

For instance, Bank of Uganda noted that in the six months to June, offshore investors withdrew $52 million form government papers, putting more pressure on the shilling, which has since the beginning of the year depreciated by more than 6 percent. 

Bank of Uganda data also indicates that during the period, the balance of payment recorded a surplus of $51 million but was a 79 percent contraction from a surplus of $241 million recorded in the same period in the 2020/21 financial year.

(Source: The Monitor)

RWANDA

PM launches construction of $530m natural gas plant

The construction of a multi-million plant to produce compressed natural gas for cooking, vehicles and industries from Lake Kivu methane gas is expected to be complete within two years in Karongi district, Prime Minister Edouard Ngirente has announced.

He was speaking on August 18, 2022 while officiating a ground-breaking ceremony for the compressed natural gas production facilities at Lake Kivu.

GasMeth Energy LTD is set to undertake the project.

Ngirente said that methane gas provides an energy resource, valued at billions of dollars for the Lake Kivu region.

This key strategic project will create a level of energy independence for Rwanda to reduce the dependency on imported energy sources,” he said.

The use of natural gas, he noted, will also contribute to the reduction of greenhouse gas (GHG) emissions by releasing less carbon dioxide into the atmosphere than other fossil fuels, in line with the country’s Green Growth and Climate Resilience Programme.

“This new source of energy will help reduce usage of firewood where national dependency level is over 85% despite strong efforts to reduce this. It will also improve the health and safety dangers related to possible gas eruptions,” he said.

“In order to get the value stored in the methane gas, the Government of Rwanda welcomed the Gasmeth project aimed at extracting natural gas directly from Lake Kivu, processing and distributing it throughout Rwanda.

(Source: The New Times)

ETHIOPIA

Ministry focuses on solving export bottlenecks in Ethiopian fiscal year

Ministry of Trade and Regional Integration said it will focus on solving bottlenecks for the export sector in order to achieve the target set for this Ethiopian fiscal year.

The ministry plans to earn 5.4 billion USD from export in the year.

Export Trade Executive Director at the ministry, Gemechis Melaku told ENA that contraband and illegal trade are the major bottlenecks observed in the sector.

Both legal and illegal traders are believed to participate in the illegal activities.

“As a nation, contraband and illegal trading are the major bottleneck hampering the growth of export performance and both legal and illegal traders are participants in these activities,” the director said.

He pointed out that though the export performance of the country has been growing, illegal activities in the sector are negatively affecting the export performance of the country.

As a result, the ministry will focus on solving the bottlenecks and supporting legal exporters to achieve the target of the year.

However, he stated that the bottlenecks in the sector cannot be solved by the ministry alone. The effort would need the engagement and collaboration of stakeholders and regional bodies

(Source: Ethiopian News Agency) 

SUDAN

Sudanese Pound under pressure amid forex scarcity

The Sudanese Pound (SDG) has fallen sharply against major international currencies over the last two days. Traders active on Khartoum’s parallel market ascribe the flux to a scarcity of foreign currency – an ongoing issue in Sudan’s ailing economy, that is driving an increasing number of Sudanese into poverty and hunger.

On Sunday, parallel market traders were buying the US Dollar for SDG 478, while the greenback was selling at SDG 574 on the streets of Khartoum. The Central Bank of Sudan currently quotes the middle US Dollar rate at SDG447.07

Political and economic instability resulting in hyperinflation in Sudan are forcing more Sudanese into poverty, and inability to afford the basic necessities of life. The latest estimates show that currently one-third of the population, or 15 million people, face food insecurity throughout the lean season in Sudan, which lasts through September.

The latest UN World Food Programme (WFP) Market Monitor for Sudan in July, shows that the cost of a WFP local food basket in Sudan increased in June by 8.4 per cent over the previous month, which at SDG457.80, represents a 57.8 percent increase since January, according to the WFP. By comparison, in June 2021, a local food basket cost SDG198.00

(Source: Radio Dabanga)

SOMALIA

New communications and technology minister holds meeting with heads of telecommunication companies

The Minister of Communications and Technology of the Federal Government of Somalia, Mr. Jama Hassan Khalif, today held a special meeting with the heads of the country’s telecommunications companies, and discussed the strengthening and cooperation between the Ministry and the telecommunications companies.

First of all, Mr Khalif praised the work of the telecommunication companies for the Somali community and how they have brought a lot of wealth to the country which is a major part of the country’s economic growth.

“As we follow the world, companies from all countries are proud, the Ministry works for Somali businessmen, you need to strengthen the laws to protect you and be ready, the circumstances you work in, I understand and hope that the competition of companies will be Minister Jama said that it will be efficient and in the interest of the Somali community.

The heads of the telecommunications companies thanked the special meeting they had with the Minister of Communications and Technology, and promised to work closely together.

(Source: Radio Dalsan)

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