22nd October 2021 Trade and Financial Services Round Up

October 22, 2021 - 5 minutes read

KENYA

Auditor queries CBK law breach over board members (Source: Business Daily)

Auditor-General Nancy Gathungu has once again raised concerns over Central Bank of Kenya’s (CBK) legal breach operating with seven instead of 11 directors and the absence of a second deputy governor.

Ms Gathungu said in her latest CBK audit report for the year ended June 30, 2021, the banking regulator has four non-executive directors despite the law demanding that President Uhuru Kenyatta appoints eight of the board members.

She said there has been no amendment to the Central Bank Act to provide for the reduction in the number of directors or deputy governors adding that CBK was therefore in breach of the law. It is the second time the CBK is being faulted for the quorum breach.

The Auditor-General raised the query previously in the audited books of the CBK for the year ending June 2020.

State barred from halting Sh4 billion WB-backed tenders (Source: Business Daily)

The High Court has barred the government from cancelling a Sh4 billion World Bank-funded tender for the construction of classrooms and toilets in 30 counties.

Justice James Makau held that three firms, which were part of the 26 construction companies that participated and won the tender last year, had made a case against the government, with chances of success.

The companies including Samaha Company Ltd, Columbia Developers and Pacific General Works Ltd, argued that the government refused to formally sign the contracts, nearly one year after they were submitted.

Through lawyer Gad Ouma, the companies argued that they won the Sh4 billion tender for the construction of classrooms, laboratories and toilets in selected secondary schools in marginalised areas.

KCB agrees to waive Sh430m penalties on NCPB loan default (Source: Business Daily)

KCB Group has agreed to waive Sh430 million in interest penalties the lender slapped the National Cereals and Produce Board (NCPB) for defaulting on a loan.

The National Assembly’s Agriculture Committee heard that the bank had also committed to temporarily freeze interest chargeable on the Sh3.6 billion loan with effect from July 1, 2021.

The cash-strapped NCPB used its assets as collateral to secure a Sh3.6 billion loan to finance part of the fertiliser subsidy in the year to June 2017, but failed to repay.

MPs reject State bid to control hospital charges (Source: Business Daily)

Parliament has rejected a government-backed Bill that sought to control medical bills and doctors’ fees after health sector lobbies protested that their views had not been taken into account.

National Assembly Speaker Justin Muturi said Thursday that the Committee on Health did not show proof that it considered views from stakeholders and reasons for ignoring their input.

Under the Health (Amendment) Bill, 2021, hospital charges were to be determined and capped by an 11-member council that included the Principal Secretary for Health, the Attorney-General and a representative of the Council of Governors.

This would have seen hospital charges join fuel on the list of essential services that are controlled by the government in the push to make basic items affordable.

Civil society groups back Uhuru snub of Biden tax plan (Source: Business Daily)

Civil society groups have hit out at US President Joe Biden administration’s push for a global minimum rate of tax on multinational companies saying the deal as currently structured will not ensure equity in taxation of multinational firms – a position echoed by President Uhuru Kenyatta’s administration.

The Tax Justice Network, a group campaigning for transparency criticized the Paris-based Organisation for Economic Cooperation and Development (OECD), for failing to live up to the “original ambition” of the plan, and said that the watered down measures mean that only a “sliver of the profits” of multinationals will become taxable, while incentives to shift profits remain sizable.

UGANDA

Govt to conduct budget review, releases UGSh 5.8 trillion (Source: Daily Monitor)

The Government of Uganda has said it will conduct a budget review that will result in shifting funds to priority sectors of the economy.

While releasing about UGSh 5.8 trillion for the second quarter of the 2021/22 financial year, Mr Ramathan Ggoobi, the Ministry of Finance permanent secretary and secretary to the Treasury, said the release for the 2021/22 second quarter had prioritised health and social protection, agriculture and industry, governance, Uganda Revenue Authority, Judiciary and Legislation.

For instance, he said, out of the total release, UGSh 294.69 billion will go to health institutions and social protection, with UGSh 120.73 billion going to National Medical Stores to procure essential medicines while UGSh 42.45 billion will go to support ministries of Health, Gender, Labour and Social Development.

Five companies issued with electronic money license (Source: Daily Monitor)

Bank of Uganda has licensed five more companies to conduct digital and electronic payments under the new National Payment System law.

The five join MTN and Airtel, which were separately issued with Payment Systems Operator and Payment Service Provider licences in May.

The National Payment System Act, implemented under the National Payment Systems Regulations, seeks to streamline operations of electronic operators.

The five companies include issuers of payment instruments and trust fund operators. Ms Charity Mugumya, the Bank of Uganda director communications, yesterday told Daily Monitor that the five brings the number to seven of companies that have so far been licensed under the National Payment Systems Act.

TANZANIA

Mansa digital platform to boost SMEs in EAC (Source: The Citizen)

Arusha. Mansa digital platform will enable companies and small and medium enterprises (SMEs) to trade confidently across Africa. This will cut down the transaction cost of trading under the African Continental Free Trading Area (AfCFTA) with a huge market of 1.2 billion consumers.

This was revealed in Kampala, Uganda, early by John Bosco Kalisa, the executive director of the East African Business Council (EABC) where the facility is set for launch today. The platform is Africa’s centralised customer due diligence digital repository. It derives its name from Mansa Mussa, a former emperor of the Mali Empire in the 14th Century.

He is credited for placing Africa on the world map through his immense wealth of gold which opened the trade routes across the continent. In Uganda, the platform will be launched today by EABC in collaboration with the Private Sector Foundation of Uganda (PSFU) and Afreximbank.

25-year bond auction affects DSE trading (Source: Daily News)

The Dar es Salaam Stock Exchange (DSE) activities have been affected heavily by the auctioning of the 25-year Treasury bond to drive the market into bearish mode.

The 25-year bond bids registered a record high after the tender size reached TSh 636.6 billion which was equivalent to 4.45 per cent of the total size of listed Treasury bonds on the DSE.

Thus, the auction of the bond, with the longest tenure in the market, plunged the equity market turnover by 82.50 per cent to TSH 239.74 million last week from TSh 1.369 billion in previous week. Zan Securities said in its Weekly Market Wrap-ups that due to the 25-year bond, the equity market ended on the bearish side to end of last week, despite foreigners dominating the turnover by 60 per cent.

RWANDA

Rwanda files to acquire over 300,000 satellites (Source: New Times)

Rwanda Space Agency has filed a request to acquire two satellite constellations from the International Telecommunication Union (ITU), namely Cinnamon-217 and Cinnamon-937, according to an official statement.

The development was communicated by the agency on October 20 saying that the submission is in compliance with ITU regulations and procedures.

The detailed application for the two fleets of craft totals 327,320 satellites.

Francis Ngabo, Chief Executive of RSA, said this progress is in line with making the country a hub for the African space industry.

African Microfinance Week Opens in Kigali (Source: KTPress)

The first African Microfinance Week (referred to as ‘SAM’, the French acronym) has opened in Kigali with a call to microfinance institutions (MFIs) to turn finance access challenges into opportunities.

The meeting, which convened over 600 international inclusive finance professionals, will run from October 19-22, 2021 with a focus around the topic of resilience in the Covid-19 pandemic, sharing Pan-African insights and expertise on all aspects of inclusive finance.

ETHIOPIA

IMF Report Plain Manifestation of Unjust Pressure on Ethiopia: Economist (Source: ENA)

The recent unjust report of the International Monetary Fund (IMF) on Ethiopia’s economic growth is a clear manifestation of the well-coordinated pressures on the country, an economist said.

Despite being one of the founders of the United Nations and a symbol of African independence, the international institutions, including the UN, are recently undermining and denying Ethiopia’s long-term contributions.

The International Monetary Fund (IMF) has not released GDP growth forecast for Ethiopia in its latest World Economic Outlook for the next four years.

The recent report of the IMF on Ethiopia is part of the coordinated pressures on the nation by withholding the country’s GDP growth forecast.

Addis Ababa University Economics lecturer, Birhanu Denu told ENA that the report on Ethiopia is not based on facts on the ground.

Investors Operating in Ethiopia’s Industrial Parks Competent in Global Market (Source: ENA)

Investors engaged in different industrial parks of Ethiopia are competent in the international market, according to Industrial Parks Development Corporation.

Industrial Parks Development Corporation CEO, Sandokan Debebe told ENA that foreign investors favour Ethiopia for the availability of abundant and wage competitive labour force, fast growing infrastructures and one-stop services.

The country, according to Sandokan, is looking for additional market destinations besides  the duty-free market incentives provided by the African Growth and Opportunity Act (AGOA).

He further stated that the investors engaged in the parks have the potential to compete in the international market.

 

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