21st October 2022 Trade and Financial Round Up

  • 21 Oct 2022
  • 4 Mins Read
  • 〜 by The Vellum Team

President Ruto to reverse Uhuru’s termination of JKIA deal

President William Ruto’s administration plans to revive the Sh56 billion airport tender cancelled eight years ago, reversing another major infrastructure decision by former President Uhuru Kenyatta.

Roads, Transport and Public Works Cabinet Secretary nominee Kipchumba Murkomen told Parliament that if appointed, he would reopen talks with a Chinese firm that had won the contract to build the second terminal at Jomo Kenyatta International Airport (JKIA) as a greenfield terminal.

The tender was cancelled in March 2016 after Sh4.2 billion had been paid to the contractor in advance and Sh75 million spent on a groundbreaking ceremony that was presided over by Mr Kenyatta on May 23, 2014. Chinese firms Anhui Civil Engineering Group (ACEG) and China Aero Technology Engineering International Corporation (Catic) had been selected to build the Sh56 billion terminal, which was expected to handle 20 million passengers a year.

The Chinese firm, ACEG-CATIC JV, has since slapped the Kenya Airports Authority (KAA) with a Sh17.6 billion bill for an airport project that never took off. “If approved, my priority will be to relook at the Greenfield terminal tender which was cancelled in 2016 after the contractor had been paid Sh4.2 billion,” Mr. Murkomen said.

(Source: Business Daily)


Credit to agriculture highest third month in row

Credit to the agriculture sector has for the third month in a row registered highest growth, thanks to the monetary policy measures rolled out by the Central bank to support credit intermediation to the sector.

According to the Bank of Tanzania (BoT) monthly economic review for September, credit to agriculture sector rose by 42.6 per cent in the year ending August compared to negative 14 per cent registered in the similar period last year.

Credit extended to the mining and quarrying as well as manufacturing sectors increased to 37.7 per cent and 35.8 per cent, respectively compared to negative 3 per cent and negative 0.8 per cent recorded in the similar period last year.

Domestic credit, consisting of credit extended by the banking system to the private sector and central government, grew at an annual rate of 27.3 per cent in August compared with 8.7 per cent in the corresponding period last year. During the period under review, private sector credit also maintained an upward trend, recording an annual growth of 20.7 per cent from 3.2 per cent in August 2021.

(Source: Daily News)


Legal reforms behind Uganda’s insurance boom

Uganda’s insurance sector is more than seven decades old but momentous growth has only been recorded in the past 10 years as multinational and local insurers scramble for a pie of the emerging market.

Big insurers such as German’s Allianz, Mauritius-based Mauritius Union Assurance Ltd, British-based Prudential Assurance Ltd, Kenya’s GA Insurance, and South Africa’s Sanlam and Old Mutual with a mix of local players such as Statewide Insurance Corporation (SWICO) have set up a presence in Kampala with tentacles stretching to the rest of East Africa.

Most players have recently set up foot in Kampala to tap into the growing middle class, investment in infrastructure development and prospects in the country’s fledgling oil and gas sector.

Latest statistics from the Insurance Regulatory Authority of Uganda, the country’s sector regulator, show that the country’s gross written premiums for both non-life and life have more than quadrupled over the past decade from merely Shs 240 billion in 2010 to 1, 180 billion in 2021.

Life insurance business’ contribution towards the gross written premiums has more than tripled from merely 10% to 33% during the same period under review, signaling increasing customer appetite for life insurance policies such as education, whole life insurance, and health among others.

Similarly, insurance penetration has increased from 0.65% in 2010 to 0.8% in 2021 while insurance density has increased from Shs7, 278 to Ush28, 059 during the same period.  Claims pay-out increased from Shs 82.14 billion in 2010 to Shs 564.79 billion in 2021, representing a nearly 600% growth.

“The constant review of the relevant laws and a strong regulator who is able to listen to complaints and make decisions has contributed to the current growth,” said Maurice Amogola, a former CEO of Minet, an insurance broker in Uganda.

(Source: The Independent)


Rwanda gears up for 5G network

Rwanda is in preparation to adopt the 5th Generation mobile network to drive its digital economy as part of the newly released broadband policy over the next five years.

A fifth-generation technology ecosystem, if realized, will enable mobile and fixed wireless connectivity and services tailored to use in long-range applications, mission-critical settings, and ultra-high-capacity broadband. Using low, mid-range, and high-frequency bands, 5G can provide speeds of 100 megabits per second (Mbps) in urban and suburban areas and up to 10 Gigabits per second (Gbps) in hotspot applications.

Mbps are units of measurement for network bandwidth. They are used to show how fast a network or internet connection is. Each Mbps represents the capacity to transfer 1 million bits each second, or roughly one small photo per second while Gbps represents one billion bytes per second and it is a measurement of peripheral data transfer or network transmission speed.

The ambitious policy suggests a Rwf200 billion that will be invested, mainly by the private sector with catalytic seed funding by the government the investment seeks to ignite the growth and access to efficient and quality broadband services, as well as trigger steps to broaden high-speed fiber connections nationwide.

This will ensure that fiber reaches more homes, businesses, public institutions, schools and hospitals.

(Source: New Times)


Embassy in Washington, DC, 50+ companies discuss Ethiopia’s AGOA reinstatement

At a workshop organied by the Embassy of Ethiopia, Eyob Tekalign, State Minister of Finance, and Ambassador Seleshi Bekele, Ethiopia’s ambassador to the US, held discussions with about 50 investors, manufacturers, and exporting companies in the apparel and footwear sectors. The main focus of the workshop was to review the impacts of the termination of Ethiopia’s AGOA benefits on Ethio-American business and economic relations.

State Minister Eyob and Ambassador Seleshi briefed the participants on the various concrete measures the Ethiopian Government has undertaken regarding all of the concerns expressed by the U.S. Government when it announced the termination of AGOA.

The participants highlighted that the decision made to suspend Ethiopia’s AGOA benefits is counterproductive and it disproportionately affects thousands of poor employees as well as the manufacturers and investors in the sector who relied on the AGOA program when they developed their businesses in Ethiopia.

Since the U.S. Government terminated Ethiopia’s AGOA eligibility in January 2022, thousands of workers in the textile and footwear sectors have lost their jobs and livelihoods (mostly young women who support children and elderly parents). The participants have expressed their concern that thousands of additional jobs will be lost if the AGOA benefits are not restored.

(Source: ena)