26th November 2021 Financial & Trade Services Round Up

November 26, 2021 - 5 minutes read

KENYA

Shilling weakens further on rising dollar demand 

The shilling ceded further ground to the dollar Wednesday, November 24, trading at a new low of 112.38 units amid the end of month demand for dollars from importers even as supply remained low.

It has shed value against the dollar in each of the past 42 trading sessions, triggering concern over inflation going up for households ahead of the financially demanding festive season. Last month, inflation stood at 6.45 percent, having eased from 6.91 percent in September.

The shilling opened trading yesterday at an average of 112.35 to the greenback, before depreciating slightly in the day’s trading as has been the case in the last two months.

Traders said that those holding dollars are reluctant to loosen their positions out of concern about further depreciation, constraining greenback supply that would ease pressure on the local currency.

The shilling has come under pressure following the reopening of the economy last month when the Covid-induced night curfew was lifted, with businesses reporting rising demand for goods that have translated to higher dollar demand from importers.

(Source: Business Daily)

Kenya’s trade deficit up 38pc to Sh988bn ($8.89 billion) 

Kenya’s trade deficit for nine months to September widened 38.57% due to a growing appetite for foreign manufactured goods, fuel and the soaring cost of imports following Covid-19 related supply chain disruptions.

Trade data collated by the Kenya National Bureau of Statistics (KNBS) shows the gap between merchandise imports and exports climbed to Sh988.51 billion in the review period from Sh713.37 billion in the same period a year ago.

The cost of imports has soared globally on persistent disruptions in global supply chains which have increased shipping expenses amid a resurgence in global oil prices for non-oil producing countries such as Kenya.

The provisional data indicate Kenyan traders spent Sh1.53 trillion in the January-September 2021 period on imports, a 28.04 percent year-on-year jump compared to Sh1.2 trillion in the previous period.

Economists reckon that a persistently higher trade deficit slows down the creation of new jobs for Kenya’s growing skilled youth as most revenue is spent on buying goods from foreign factories, raising production and job openings in source markets. 

(Source: Business Daily)

Co-op gets Sh6.3 billion EU bank loan for SMEs lending

Co-operative Bank  has received Sh6.3 billion (50 million euros) from the European Investment Bank for onward lending to small businesses to help them recover from the impact of the Covid-19 pandemic.

Co-op Bank chief executive officer Gideon Muriuki said micro, small and medium-sized (MSME) enterprises with up to 250 workers can apply for the loan.

The long-term loan will be repayable in seven years and will assist MSMEs fund the acquisition of tangible business assets, working capital, development of distribution networks innovation and business research.

Mr Muriuki said the lending is part of the bank’s effort to contribute to the recovery of Kenya’s businesses following the Covid-19 challenges.

The credit facility will be available for up to a maximum of Sh1.5 billion per customer for a maximum tenor of seven years,” he said.

(Source: Business Daily)

TANZANIA

Finance meeting to discuss Covid-19 recovery, cryptos 

Economic recovery from Covid-19 and digital currencies are among subjects which will be discussed during the Conference of Financial Institutions (Cofi).  

Economic experts, financial institutions representatives, government officials and members of the private sector will gather to discuss priorities and policy options on how to accelerate economic growth.

Tanzania was not spared the effects of Covid-19 that disrupted economic activities around the world, with the government saying economic growth slowed to 4.8 percent in 2020 compared to average growth of seven percent in the past decade. Other topics include accelerating digitalisation for sustainable growth and digital currencies, where 300 participants are expected to share experiences and deliberate risks and regulatory issues.

“This year’s topics have been carefully selected in line with the current situation where the global economy is recovering from the effects of the Covid-19 pandemic experienced since the beginning of 2020, and digital technologies and currencies that are gaining popularity across the globe,” the Bank of Tanzania (BoT) said in a statement.

The meeting, themed “Tanzania Economy: Recovery from Covid-19 Pandemic and Beyond”, is expected to be opened by President Samia Suluhu Hassan.

(Source: The Citizen)

Air Tanzania ups stake for East African skies 

Air Tanzania is set to step up competition in the East African skies with the launch of flights on the Dar es Salaam-Nairobi route from November 26, and plans for Bujumbura later in the month.

The airline’s first flight to Nairobi from Julius Nyerere International Airport will cost $334 for a return trip and approximately $210 one way.

The Tanzanian national carrier began operating three flights a week to Ndola in Zambia and the eastern DR Congo city of Lubumbashi, respectively, from November 18.

The Dar–Nairobi route will also offer competitive pricing for Ugandan flyers who have previously been connecting to various capitals through Nairobi, Addis Ababa or Kigali on Kenya Airways, Ethiopian Airlines or RwandaAir respectively.

“The resumption of Air Tanzania operations between Dar es Salaam and Nairobi, as at the best as a game changer in the bilateral engagement between Tanzania and Kenya,” said the High Commissioner of United Republic of Tanzania in Nairobi John Stephen Simbachawene Friday.

(Source: The Citizen)

UGANDA

Will Uganda finally be able to tax online multinationals? 

Uganda Revenue Authority says the Global Tax Agreement reached recently, presents Uganda with an opportunity to tax companies that have no physical address in the country.

The question now being asked by tax experts and civil society, is whether this could be an onslaught on Uganda’s Taxing Rights and that of the region as a whole?

According to Regina Navuga, a tax analyst with Seatini Uganda,  such global tax agreements eventually impact national and regional tax regimes although EAC countries such as Uganda and Kenya are not part of the 136 signatories to the agreement.

The decision on the global minimum tax rate, according to Seatini Uganda and Tax Justice Network, is critical for developing countries including Uganda due to their heavy reliance on corporate income tax.

As for the taxman, global tax deals present a rare opportunity to tax companies that generate revenue from Uganda but have no physical presence such as Facebook and Google, among others.

“What this global tax deal is saying is that we should be able to tax a proportion of the profits they make from Uganda,” Robert Luvuma, the URA manager of large taxpayers, says.

This is important because the current design of the country’s tax system only caters for taxation of companies that are physically present yet most companies have shifted business online.

(Source: The Monitor)

How SMEs Can Tap Into Oil and Gas as First Oil Nears 

Small and medium-sized enterprises need to enhance their capital base, embrace partnerships and adhere to high corporate governance standards to reap from the upcoming oil and gas sector, sector players said.

Patrick Mweheire, the Chief Executive at Standard Bank Group, Eastern Africa and Chairman of Uganda Chamber of Mines and Petroleum, said, during the 2-day East African SMEs Oil and Gas conference held at the Kampala Serena Hotel from November 18-19, that SMEs continue to face big challenges especially in record keeping which among others limits lenders’ ability to support them financially.

Mr. Mweheire cited the Stanbic Business Incubator where SMEs are being supported to bridge their gaps to enable them participate in the oil and gas sector. The Incubator allows small and medium-sized businesses interested in and/or engaged in the oil and gas industry to skill and train in order to address prevalent business challenges in Uganda.

Uganda’s oil and gas sector is expected to benefit SMEs in more than 16 sectors including; transport, security, foods and beverages, hotel accommodation and catering, human resource management, office supplies, fuel supply, land surveying, clearing and forwarding, crane hire, locally available construction materials, civil works, supply of locally available drilling and production materials, environment studies and impact assessment, communications and information technology services and waste management.

(Source: The Independent)

RWANDA

Rwanda’s Economic Growth Revised to 10.2pc for 2021 

Rwanda’s economic growth projection has been revised upwards to 10.2 percent from a previous 5.1 percent set earlier in the year, a recent International Monetary Fund mission noted.

Rwanda’s economy contracted by 3.4 per cent in 2020 as a result of the Covid-19 pandemic. 

The IMF noted that the growth was driven by unprecedented policy support, robust remittances, efforts to step up the vaccination rate as well as progress in structural reforms that are supporting economic recovery in 2021.

The assessment also found Rwanda’s banking system to be stable, liquid, and well-capitalized while non-performing loans remained relatively as a resort of policy support and moratorium measures which had been set up. “The authorities should continue with intensive monitoring of credit risk and prudent loan classification and provisioning,” the post engagement summary noted.

The IMF noted that going forward, Rwanda’s monetary policy should remain data-dependent, guided by inflation expectations, and supportive of the economic recovery.

(Source: The New Times)

BRD and EIB sign € 30 million loan agreement 

The Development Bank of Rwanda and the European Investment Bank, which signed a 30-million euro agreement on Tuesday, November 23, will provide loans to both sides in Rwanda.

It is an agreement based on the bank’s plan to meet the investment and economic impact of the Covid-19 epidemic in the East African region.

The Minister of Finance and Planning, Dr. Uzziel Ndagijimana, said the government’s economic recovery strategy was mainly based on advocating for the private sector to help create new jobs.

BRD’s chief executive, Kampeta Sayinzoga, said the money would be added to the capacity of the bank if it continued to build on accelerated development through large-scale projects but also encouraged commercial banks to invest in the private sector with projects that would boost the development of many Rwandans.

(Source: Rwanda Broadcasting Agency)

SUDAN

Five vessels loaded with fuel arrive in Sudan

Five vessels loaded with fuel arrived in Sudan’s main port, the energy and oil ministry said on Wednesday, adding that the country’s fuel reserves are sufficient. Three vessels were loaded with diesel, one with cooking gas and one with petrol, the ministry said.

“The supply situation is very reassuring,” it said, adding that work is under way to implement Sudan’s import plan for December.

(Source: Reuters)

SOMALIA

National Treasury Says Millions of Dollars Stolen From Government Budget 

Somali National Auditor-General Mohamed Mohamud Ali Afgoye has released an annual report on the audit of Somali government departments. According to the report, 25 entities and three embassies have been audited.

The Auditor-General said contracts worth $31 million are not registered with his office and the existence of unauthorised bank accounts outside the Treasury Single Account.

For the first time, they audited the fishing sector and found an under-collection of $56 million in revenue from fishing vessels. In 3 years, the Ministry of fishery issued licenses to 43 domestic companies, 15 cooperatives, 83 foreign companies affiliated to China, collecting only $3.3 million.

According to the report, the 2020 budget was $ 685 million and the audit was $ 287.8 million. The report also states that the cost of the various agencies without proper documentation is $9.1 million.

(Source: Dalsan Radio Mogadishu)

Farmajo Offers COMESA Countries Investment Opportunities In Somalia 

The President of the Federal Republic of Somalia Mohamed Abdullahi Farmajo, who attended the East and Southern Africa Market Summit (COMESA) Summit, presented a wide range of investment opportunities in Somalia.

The President pointed out that economic cooperation and trade facilitation of the countries of the region is the basis of plans at the continental level to improve the lives of poor people, eradicate poverty and achieve the goal of inclusive development.

President Farmajo commended the efforts of COMESA Heads of State in the implementation of the Economic Integration Plan, in finding a lasting solution to the scourge that has delayed the lives of the people and recovery from the devastating effects of Covid-19 on their economies.

(Source: Dalsan Radio Mogadishu)

ERITREA

Safe water, safe life 

According to the Director-General of the Department of Water Development and Projects in the Ministry of Land, Water and Environment, Mr. Msghna Gebreslase, sufficient and safe water is one of the pillars in ensuring the health of citizens in a country. Therefore, the main task of the department is to pave the way for citizens to safeguard their health and ensure their continuity by providing them easy access to water especially those who live in remote areas. He added that the government has been working thoroughly in this sector despite eminent challenges over the past 30 years. Building dams in villages can be taken as an example and it has reduced health risks and granted the dwellers access to drinking water. Mr. Msghna added that the department earnestly works, as a priority task, to provide people in all corners of the country access to potable water within their locality.

According to documents from the Department of water, over 80% of the villages in Eritrea have become beneficiaries of clean water. However, to ensure this achievement, many obstacles had to be vaulted. This includes the geographic location of some peripheral villages and the need for the relocation of scattered households and establishing new villages to make the installation of the projects practical.

By making the needed efforts and allocating a total budget of almost 5 billion Nakfa, 1,738 villages became beneficiaries of clean water through the construction of micro-dams, distribution of 285 generators, 479 solar energy sources, and 932 manual water pumps. Mr. Misghna stressed the active participation of the local population in the completion of such projects in line with the government’s commitment towards that cause.

(Source: Ministry of Information Eritrea)

Announcement from the Ministry of Health 

Twenty-seven patients have tested positive for Covid-19 in tests carried out today at Quarantine Centers and Testing Stations in the Central, Southern, and Anseba Regions.

Out of these, 10 patients are from Quarantine Center (3) and Testing Stations in Arbaete Asmara (1), Kehawta (1), Maekel-Ketema (1), Godaif (1), Paradiso (1), Gejeret (1), and Adi-Gombolo (1); Central Region. Sixteen patients are from Testing Station in Adi-Keih (5), Dubarwa (5), Mendefera (4), Senafe (1), and Adi-Gulti (1); Southern Region. The last patient is from a Testing Station in Keren, Anseba Region.

On the other hand, 32 patients who have been receiving medical treatment in hospitals in Central (16) and Southern (16) Regions have recovered fully and have been discharged from these facilities. A 96-year-old patient from the Southern Region and a 93-year-old patient from Anseba Region died of Covid-19..

The total number of recovered patients has accordingly increased to 7,014 while the number of deaths has risen to 57. The total number of confirmed cases in the country to date has increased to 7,250.

(Source: Ministry of Information Eritrea)

ETHIOPIA

Ethiopia Secures $1.1 Billion in Remittance during Past Three Months

Ethiopia has secured 1.1 billion USD in the form of remittance during the past three months via legal channels, according to the Ethiopian Diaspora Agency.

Agency Communication Director Wondwossen Girma told ENA that the remittance being transferred through legal channels from the Ethiopian Diaspora has been increasing from time to time.

Citing that the remittance secured from the diaspora was 3.6 billion USD last year, he said the 1.1 billion USD has been legally transferred from the diaspora to Ethiopia in three months alone which shows significant improvement from previous periods.

 (Source: ENA)

Nation Earns over $1.2 Billion from Export in four Months

Ethiopia has earned 1.28 billion USD over the past four months, which is close to 98 percent of the 1.31 billion USD target, according to the Ministry of Trade and Regional Integration.

During his press conference today, Trade and Regional Integration Minister Gebremeskel Chala said the 1.28 billion USD earned in the past four months is a good indication to achieve the over 5 billion USD plan for the current Ethiopian fiscal year.

“Our plan was to generate 1.31 billion USD and we have earned 1.28 billion USD in four months, which is over 97 percent performance against the target,” he said.

Out of the total earnings, 904 million USD was obtained from agriculture, 157 million USD from manufacturing and 188 million USD from mines, it was indicated.

 (Source: ENA)  

Israel’s Mining Companies “Committed” to Continue Investment in Ethiopia

Senior management of Leica Geosystems, a company headquartered in Israel involved in mining operations in Ethiopia, have met and held talks with Takele Uma, Ethiopia’s Minister of Mines. The company’s management expressed their commitment to continue their investment in Ethiopia.

Mr. Takele has expressed his gratitude to the Israeli mining company for “standing with the Ethiopian people and government”, highlighting that private investments remain highly valued during the current season of turmoil.

Reta Alemu, Ethiopia’s Ambassador to Israel, said the participation of Israeli companies in mining in Ethiopia has been “encouraging”. He further highlighted how the involvement of the private sector can help strengthen the long-standing ties between Ethiopia and Israel.

 (Source: 2merkato)

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