4th February 2022 Trade & Financial Services Round Up

February 4, 2022 - 5 Minutes Read - By Amrit Labhuram

Firms slow down on hiring for first time in nine months

Kenyan firms in January slashed expenditure on workers for the first time in nine months, citing a sharp fall in sales compared with December amid the Omicron threat.

Findings of Stanbic Bank Kenya’s Purchasing Managers Index (PMI) suggested Thursday that businesses suffered the first drop in demand for goods and services since partial lockdowns to contain the third wave of the pandemic in April 2021.

Firms responded by cutting down on output since April last year, hiring at the slowest pace since last July and slashing staff salaries marginally as a precaution to stay afloat in future amid uncertainties surrounding the Omicron coronavirus variant.

“Domestic demand fell significantly as client spending was negatively affected by rising inflation and a resurgence in Covid-19 due to the Omicron variant,” Stanbic Bank regional economist Kuria Kamau wrote in the PMI report.

“As a result of the lower demand, firms were forced to reduce their output and purchases of raw materials for the first time since April 2021.”

The overall PMI reading — a measure for month-on-month private sector activity such as output, new orders and employment — fell to 47.6 in January from a 14-month high of 53.7 in December.

PMI reading above 50 denotes month-on-month growth in business deals, while that below signals a contraction.

The marginal slash on salaries and slowest growth in employment in six months because of “weaker sales” will worry job seekers who have been optimistic of a turnaround in the labour market which was hit by layoffs, pay cuts and unpaid leave policies at the height of the pandemic.

(Source: Business Daily)

American fund buys Kenyan cell tower firm

American private equity fund Everstrong Capital has bought a majority stake in SealTowers Limited, a Kenya-based independent provider of cell towers founded five years ago, the firms announced yesterday.

The deal is subject to regulatory approvals. The companies did not disclose the size of the majority stake being sold to Everstrong Capital, which has offices in the US, Kenya and South Africa and has been targeting deals in energy, water, ICT, transport and healthcare sectors.

Under the deal, Everstrong through its local fund dubbed the Kenya Infrastructure Fund will partly inject $12.5 million (Sh1.4 billion) to finance the construction of additional 200 towers.

“We believe that the partnership with Everstrong Capital will enable us to tap into massive opportunities in the telecommunications sector in both urban and rural locations,” said SealTowers founder and chief executive Tony Monda in a statement.

“The expansion of 4G and 5G networks will require many more infill tower sites to support networks. In addition, large buildings, malls, commercial and educational institutions provide an opportunity for in-door network solutions and provide expansion opportunities for SealTowers.”

Everstrong earlier announced it had raised $50 million (Sh5.6 billion) from institutional investors targeting infrastructure projects in Kenya and Africa.

“We are excited to announce this investment in SealTowers Limited and look forward to helping expand network access throughout the country,” said Everstrong Capital managing partner Philip Dyk.

Started in 2016, SealTowers targets to build, own, lease, and manage telecommunication towers and infrastructure for Kenyan telcos.

The company says it has running framework, build and lease contracts with five unnamed mobile and internet service providers in Kenya allowing them to host telecommunication equipment on its infrastructure.

(Source: Business Daily)


Friendly monetary policy speeds up Tanzania’s recovery

The Monetary Policy Committee (MPC) of the Bank of Tanzania has maintained an accommodative monetary policy to support the economic recovery after noticing progress.

In a statement issued by central bank governor Prof Florens Luoga, the team said it was satisfied with the policy outcome to the performance of the economy.

The Accommodative monetary policy includes measures such as lowering statutory reserve requirement and cutting of discount rate to expand money supply in the economy.

The MPC, which met on Monday to review recent developments, observed that growth of Tanzania’s mainland economy was satisfactory, at 4.9 percent in the first three quarters of 2021.

“The growth was driven by construction, agriculture, mining and quarrying, manufacturing and transport. Inflation gradually increased to 4.2 percent in December 2021 from 3.8 percent in July 2021 due to supply-side factors, but remained within the target of 3-5 percent,” it stated.

The Zanzibar economy also grew impressively by 8.8 percent in the third quarter of 2021, higher than growth of 3.3 percent in the corresponding quarter of 2020, largely driven by resumption of economic activities, particularly tourism.

“The external sector of the economy has continued to recover from the effects of the Covid-19 pandemic, with resumption in tourism,” he said.

Foreign exchange reserves remained adequate, the committee said, amounting to $6.4 billion and sufficient to cover 6.6 months of imports, in line with the minimum requirement of four months.

The statement added that the government budget execution was in conformity with the estimates due to improvement in revenue collection and receipt of foreign grants and loans.

“The MPC observed that, due to the recent satisfactory performance of the economy and continuing recovery of the global economy, macroeconomic targets for 2021/22 set forth in the Monetary Policy Statement, issued in June 2021, will be achieved,” he said.

(Source: The Citizen)

NBC registers record TSh60 billion gross profit

The National Bank of Commerce (NBC) had a wonderful year in 2021 as its profit before tax ballooned to a record TSh60 billion.

The amount translates to a 702.39 percent improvement compared to the profit before tax of Sh7.48 billion that the bank recorded in 2020.

The money was largely due to a rise in the interest income stream which rose from TSh132.7 billion in 2020 to TSh158.3 billion in 2021.

Managing director Theobald Sabi (pictured) attributed the growth to the conducive regulatory environment in the country along with a ‘smart’ execution of NBC’s key business focus areas.

“Our focus has been on our customers. We are expanding our customer base across the country, expanding provision of loans, investing on transactional systems for the convenience of our customers and working with our partners through agency banking to provide services near our customers,” he said.

He said with the improvement in profits, the bank’s shareholders can expect better dividends as the lender continues to strive for growth and higher profitability.

In 2020, NBC’s results were affected by the Covid-19 pandemic and some legal obligations.

As a result, financial statements show that though it had a profit before tax of TSh7.48 billion in the year 2020, the actual performance had to be adjusted to a loss TSh22.46 billion.

“2020 results were affected by one off adjustments related, among others, to the Covid-19 pandemic impairment provisions,” he said.

However the bank has made a substantial comeback in 2021 in many aspects including management of its operation efficiency keeping the Non-Performing Loans (NPLs) below the five percent benchmark at 4.1 percent.

The bank’s assets now stood at TSh2.26 trillion at the end of Quarter-4/2021 as compared to TSh2.16 trillion at the end of Quarter-3/2021.

According to the statement, NBC’s loans and advances increased by 10.8 percent to TSh1.38 trillion in Q-4/2021, courtesy of strong growth in its key market segments including agri-business, SME and Personal Loans.

Total Deposits grew by 7.1 percent, to TSh1.5 trillion, at the end of December 2021 compared to TSh1.46 trillion in September 2021.

(Source: The Citizen)


URA registers revenue shortfall of UgSh 900 billion in six months 

The Uganda Revenue Authority (URA) incurred a revenue shortfall of UgSh 901 billion between July to December 2021.

This was revealed by John Musinguzi, URA Commissioner General, during a news conference on Wednesday while highlighting the revenue performance for the period of July to December 2021.

Musinguzi said the tax body was given a revenue target of UgSh 22.4 trillion which is 16.10% higher than the actual revenue collection from the last financial year.

As a result, in the last six months, Musinguzi said URA had projected to collect UgSh 11 trillion but collected slightly over UgSh 10 trillion.

“A shortfall of UgSh 900.81 billion was incurred with a performance of 91.86%,” he said.

In this period, Musinguzi said domestic tax revenue collections were UgSh 6.23 trillion against a target of UgSh 7.2 trillion.

He categorised the shortfalls as thus: direct domestic taxes (UgSh 274 billion), indirect domestic taxes (UgSh 487 billion) and Non Tax Revenue (NTR) (UgSh 191 billion).

“Customs tax collections in the first 6 months of the 2021/2022 were UgSh 4.1 trillion against a target of UgSh 4.102 trillion, posting a shortfall of UgSh 26 .33 billion, and performance of 99.36%,” he said.

(Source: Nile Post News)

CNOOC ready for oil production after signing final investment decision

Chinese oil company, CNOOC Uganda Limited  has said it is ready for production after signing the  Final Investment Decision (FID) for the Kingfisher Project.

The FID was signed Tuesday, February 1, following accomplishment of the Host Government Agreements (HGA) agreement signed between Government of Uganda and Tanzania for the EACOP project in 2021, ESIA certificate award for the Kingfisher Project in 2020 and passing of East African Crude Oil Pipeline (EACOP, Special Provisions) Bill into Act of Parliament in 2021, which all paved the way for commercialization of the oil and gas resource in a sustainable manner.

The KFDA Project shall produce 40,000 barrels of oil per day during peak production and a Central Processing Facility shall be constructed at Buhuka Flats. Other facilities include 31 wells on four well pads; access roads; water intake point; safety check station; 46km feeder pipeline; camps and laydown areas among others.

All the land needed for the project facilities has been acquired in line with international best practices.

To date, over 99% of Affected Persons have been compensated and currently construction of 56 resettlement homes as in kind compensation for affected primary residents is ongoing.

As an energy company with a strong sense of social responsibility, CNOOC Uganda Limited has undertaken various initiatives to enhance the livelihoods of Ugandans through direct and indirect employment of the locals, stimulating local demand for goods and services by the company, its contractors and subcontractors. Initiatives include training of Heavy Good Vehicle drivers and welders.

(Source: Nile Post News)


The World Bank report lauds Rwanda for stable economy

The 18th report, prepared by the World Bank’s Rwanda Economy Department, shows that the country has done a lot to help the economy recover faster.

Mona Haddad, the World Bank’s director of trade and investment, says Rwanda has a lot to do with what it will do and what efforts will be made by the report.

“Rwanda is doing a lot of good things, Rwanda is building a better environment with environmental protection and we need to be aware that it is the private sector that does business, so we have a business policy that facilitates the private sector and sets guidelines for those in the business,” he said. 

“Rwanda has done a lot in technology and business development through technology, which has made Rwanda as a small economy a place to take advantage of that technology in the regional business.”

“The cost of trade is still high as the cost of container transportation from Dar es Salaam to the DRC has been declining for the past 10 years, while the cost of transport inside the country has continued to rise due to the infrastructure gap, so that’s part of the mission of Rwanda. “

This 18-point report highlights the role of the private sector in the development of national investment, rather than the privatization of the state and the facilitation of investment.

(Source: Rwanda Broadcasting Agency)

Exporters, farmers optimistic as Rwanda’s agriculture exports shore up

The performance of the second quarter of fiscal year 2021/2022 whereby Rwanda’s agricultural export revenues increased by 39 percent compared to the same period of last fiscal year, has offered optimism among exporters and farmers alike.

The latest statistics released by the National Agricultural Export Development Board (NAEB) on Tuesday, February 1, indicated that agriculture exports fetched over $158.5 million (about Rwf160 billion) during this period.

They include figures of production, export volumes and generated revenues from agricultural commodities in a three-month period covering the months of October, November, and December, 2021.

In the second quarter of 2020/2021, Rwanda had generated slightly over $114 million from agricultural exports, reflecting a 5.5 per cent drop compared to the performance of the same period in the previous fiscal year.

Specifically, the latest statistics show that coffee export revenues went up to $38.4 million from $26.1 million registered in the second quarter of 2020/2021.

This data represents a substantial increase of 47 percent, attributed mainly to the good price at the international market, where the average price rose to $4.9/kilo from $3.7/kilo in the previous period under review, a rise of 32 percent.

(Source: The New Times)


Russian company seeks to invest in Ethiopia’s energy sector

Ethiopia’s Ministry of Foreign Affairs has disclosed that one of the major energy companies in Russia, Energy solutions, electro technical holding company, ERSO, has shown interest in investing in the energy sectors of the country.

The Ethiopian Embassy in Russia briefed investment opportunities in the Energy sector in Ethiopia for the company’s management recently that was led by Mr. Goran Malbasic.

“The Ethiopian Embassy in the Russian Federation had a very fruitful and productive discussion yesterday with Goran Malbasic, CEO of ERSO Energy solutions, electro technical holding company with global presence (ERSO) on investment opportunities in the Energy sector,” the ministry said.

“ERSO is one of the most respected companies having100 years of service in the energy industry, excelling in specialized supplies, servicing and exporting of high, medium and low voltage power generation distribution and transmission equipment which include distribution transformers, power reactors and renewable energy solution,” according to the ministry.

The company’s profile states that ERSO is a diversified integrated company focused on complex equipment and implementation of new construction projects, reconstruction and modernization of energy facilities, it revealed.

The group of companies includes 4 production sites, its own design and research institutes, a design office, service and testing centers.

It is recalled that the government of Ethiopia and Russia signed a deal a few years ago to develop nuclear energy for Ethiopia to be used for medical and other non-military applications.

(Source: Ethiopian Herald)

Ethio Telecom secures 28 billion Birr ($558 Million) Six-Month Revenues

Ethiopia’s state-owned Ethio Telecom announced it has obtained 28 billion Birr in revenue in six months, since the Ethiopian fiscal year began on July 8, 2021. The amount shows a 6.7 percent increase compared to last year, and stands at 86.4 percent of the company’s target for the period.

Frehiwot Tamiru, Ethio Telecom’s CEO, briefing the media, said the company has been extensively engaged in multiple projects and operations aimed at expanding telecom infrastructures and systems, as well as improving service quality, and increasing reach.

Ethio Telecom has also managed to save over 12 billion birr by implementing a cost optimization strategy during the six-month period, the CEO pointed out.

“This achievement is realized through network optimization works to enhance customer experience and satisfaction,” Ms. Frehiwot explained, by “offering 23 new and 19 revamped local and international products and services, generating $74.8 million from international business and scoring 89.3 percent of the target [for the products and services],” Ms. Frehiwot said.

(Source: 2merkato) 


Micro-credit and saving program in Southern Region witnesses growth

The micro-credit and saving program in the Southern Region reported that in 2021 over 22 million Nakfa ($1.46 million) has been disbursed to customers in 12 sub-zones of the region and 17 million Nakfa ($1.13 million) has been collected from beneficiaries of the loan.

According to the report presented at the activity assessment meeting conducted in Mendefera on January 28, 8,691 people have been beneficiaries at individual and at group levels.

Indicating that 63% of the beneficiaries have been females, Mr. Tirfe Gebreyohannes, head of the program in the Southern Region, said that out of the beneficiaries 32% are engaged in agricultural activities, 29% in small scale trade and the remaining are government employees.

Pointing out that there is untapped investment opportunity in the region, Mr. Tirfe called on the sub-zonal administrations to support the program in its effort to expand its activity in the region.

Calling for providing due attention in supporting females to become beneficiaries of the program and improve their livelihoods, Mr. Habteab Tesfatsion, Governor of the Southern Region, called on all concerned institutions to support the program in all its endeavors.

Micro-credit and saving program in the Southern Region has village banks in 160 administrative areas and in 661 villages.

(Source: Ministry of Information Eritrea) 


US Senators seek Sudan sanctions

A number of members of the US Senate Foreign Relations Committee have demanded the imposition of sanctions on the authority in Sudan. Molly Phee, Assistant Secretary of State for African Affairs, said – during the committee session held on Tuesday entitled Sudan’s Threatened Transition and American Policy Following the October 25 Coup – that the administration does not have sufficient powers, but the Democrats in the committee confirmed the existence of powers approved by Congress. They offered to approve new powers.

Phee confirmed that the US administration is reviewing the tools to limit the funding available to the Sudanese army and isolate the companies controlled by the army. She said that the security forces in Sudan are not monolithic, and some of their elements want to see a transitional process, but they do not know how to implement it. She added, “I have hope. The Sudanese people are great and have a commitment and a vision that they will not abandon. In response to a question about the reasons for not imposing sanctions yet, Phee said we are looking into the matter and will cooperate with Congress in this regard. Phee stressed the violence against peaceful demonstrators by the security forces must end, and said that the US administration will use its authority and will look into the illegal prospecting for gold in Sudan.

The Chairman of the Committee on Foreign Relations, Robert Menendez, said that he is working with Republicans to enact a bill that sets conditions for the release of aid. He explained, during a meeting of the Senate Foreign Relations Committee on Tuesday, that the bill establishes a system for imposing targeted sanctions against those who carried out the coup and continue to threaten the transition to democracy and violate human rights. Menendez stressed the need to impose consequences on those responsible for human rights violations and on officials in high positions who planned the coup. He said that the aid freeze is good but not sufficient to stop the violence. He pointed out that the Sudanese army continued to kill, torture, violate and arrest protesters and civil society activists, despite its public pledge of dialogue to resolve the current crisis.

Senator Jim Risch, the top Republican, said that the documented violence against civilians before and after the 25th coup proves that the Sudanese army is brutal and untrustworthy. He made it clear during the Senate Foreign Relations Committee meeting on Tuesday that the army is unable to lead the democratic transition in Sudan. He called on the United States to make decisions that hold the army and other obstructionists of the transition process responsible. He referred to the unremitting efforts to coordinate between the two parties to pass a bill that guarantees accountability, and that reconsiders the US aid and policy towards Sudan.

(Source: Radio Dabanga)


Foreign minister discusses bilateral relations with Ethiopian Deputy PM

The Minister of Foreign Affairs Abdisaid Muse Ali, on Thursday, held a bilateral meeting in Addis Ababa with Demeke Mekonnen Hassen, Deputy Prime Minister and Minister of Foreign Affairs of the Federal Democratic Republic of Ethiopia. 

Ahead of the African Union Summit, both Ministers discussed a range of common issues pertinent to both countries including on the evolving threats that require coordinated efforts, exchanged views on political developments in the Horn of Africa and discussed strengthening multilateral coordination.  

“I received today Foreign Affairs Minister Abdisaid Muse and discussed relevant issues to reinforce bilateral relations and current situations in Ethiopia. We appreciate the gov’t of Somalia for taking the right decision during the special session on Ethiopia that was initiated by the UN Human Rights body in Geneva,” said Deputy Prime Minister, Demeke Mekonnen.

The Foreign Minister thanked the Deputy Prime Minister and Foreign Minister for the  strong cooperation which exists between the Federal Republic of Somalia and the Federal Democratic Republic of Ethiopia. He underscored Somalia’s commitment to enhance its historic bilateral relations with Ethiopia underpinned by mutual respect for sovereignty, territorial integrity, political independence and unity of the Federal Republic of Somalia and the Federal Democratic Republic of Ethiopia.

(Source: Radio Dalsan)

UAE welcomes PM Roble’s apology over funds seized in 2018

The UAE has welcomed the apology made by Mohamed Hussein Roble, Prime Minister of the Federal Republic of Somalia, for the incident that took place at Mogadishu Airport in April 2018, involving seizure of funds and aid sent to support the people of Somalia. 

The Ministry of Foreign Affairs and International Cooperation said in a statement that the Somali Prime Minister’s initiative reflects the depth of historic ties between the two brotherly countries and the appreciation to the UAE’s role in supporting the government and people of Somalia. 

”The UAE has welcomed the apology made by Mohamed Hussein Roble, Prime Minister of the Federal Republic of Somalia, for the incident that took place at Mogadishu Airport in April 2018, involving seizure of funds and aid sent to support the people of Somalia.” UAE Ministry of Foreign Affairs said in a statement. 

The Ministry also lauded Roble’s move and his expression of appreciation to the UAE for its decades-long support of his country. It emphasised that the UAE will continue strengthening historic relations with the brotherly people of Somalia and providing necessary support to achieve peace, stability and development in the country.

(Source: Radio Dalsan)

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