28th August 2020 Trade & Financial Services Round Up

  • 28 Aug 2020
  • 4 Mins Read
  • 〜 by The Vellum Team

Akinwumi Adesina Re-elected as President of the AfDB Group

Dr. Akinwumi Adesina (PhD) has been re-elected to serve a second five year term as President of the African Development Bank Group on Thursday, August 27, 2020 by the Board of Governors of the Bank.

The election took place on the final day of the 2020 Annual Meetings of the African Development Bank Group which was held virtually in Abidjan, Côte d’Ivoire, on Wednesday, 26 August 2020.The election took place on the final day of the 2020 Annual Meetings of the African Development Bank Group, which was held virtually for the first time in the Bank’s history.

The election result, which gave him a hundred percent of votes of all regional and non-regional members of the Bank, was announced by the Chairperson of the Board of Governors of the Bank, Niale Kaba, and Minister of National Planning of Côte d’Ivoire. 


Banks to get CBK approval before declaring dividends

The Central Bank of Kenya (CBK) has directed banks to seek its approval before declaring dividends for the current financial year. The directive is focused on ensuring lenders have enough capital to ride out the Covid-19 pandemic. The CBK’s directive indicates that investors on the Nairobi Securities Exchange will forego dividends running into billions of shillings.

The regulator has given banks up to the end of October to submit their revised capital levels through changes to their ICAAPs (Internal Capital Adequacy Assessment Process). The CBK relies on ICAAP among other tools to assess whether a bank’s capital levels are adequate and consistent with its business plans, strategies, risk profiles and prevailing operating environment.

In 2016, Governor Patrick Njoroge introduced the capital-measuring process which requires banks to identify, measure and monitor risks and use this as the basis for allocating their funds. The CBK will now have the final decision on whether or not it agrees with the new capital levels that each bank will submit. This will then determine if it will endorse any board’s decision to pay dividends.

The CBK sees Covid-19 as a major disruption that requires banks to change their current models and assumptions by making them more conservative. The move by the CBK mirrors what has happened in markets such as South Africa where the regulator told banks to make capital preservation a priority by freezing dividend payment or bonuses to top executives.

Public Notice Fraudulent and Unlicensed Financial Schemes

In a bid to protect the members of the public, the government is warning the public of the re -emergence of fraudulent and unlicensed financial schemes seeking to take advantage of Kenyans during these challenging times. These rogue entities include online pyramid schemes, unlicensed credit and savings schemes, and unlicensed online forex brokers and traders. Kenyans have been victims of many scams such as Gakuyo and long ago, Desi. Some of the fraudulent entities have styled themselves as online global networking companies that seek to recruit members of the public to join and make cash deposits purportedly to buy shares in the company. The encouragement to recruit new members in order to receive more benefits is a characteristic of a fraudulent pyramid scheme. 

The Central Bank of Kenya, Sacco Societies Regulatory Authority, Capital Markets Authority, Insurance Regulatory Authority and the Retirements Benefits Authority have published a notice to warn members of the public against dealing with unlicensed financial schemes and unlicensed online forex dealers. The public should only deal with licensed financial institutions and entities in order to protect themselves from being defrauded and losing their money. The notice reminds the members of the public that in addition to a business permit, regulated financial institutions are required to have a valid license issued by a financial sector regulator. To verify these licenses, the public are encouraged to check the state of their registration in relevant government websites.

Employers suspend Sh2.1bn pension contribution due to COVID

Employers have suspended a total of Sh2.1 billion in contributions to pension schemes since March as companies took advantage of the Retirement Benefits Authority (RBA) authorised payment holiday to maintain their cash flows.


Uganda Revenue Authority board appoints new commissioners

The Uganda Revenue Authority-URA board has appointed new commissioners to replace those fired in May 2020. The appointments made after the August 26, 2020 sitting saw Abel Kagumire appointed as the commissioner customs. Kagumire had been acting in the position since early this year. Richard Kariisa  has also been appointed the commissioner domestic taxes while John Tinka Katungwensi has been appointed assistant commissioner in charge of large taxpayers, according to a brief from the tax body.

The new appointments replace former commissioners Dickson Kateshumbwa, Henry Saka, and Silajji Kanyesigye who were fired in May. Kateshumbwa has since moved to stand for the Sheema Municipality Parliamentary seat. President Yoweri Museveni later said after the 2020/21 budget address that the former URA commissioners were sacked because of corruption.


TBA and VISA Tanzania launched ‘be smart go cashless’ campaign 

Tanzania Bankers Association (TBA) in collaboration with VISA Tanzania yesterday launched a campaign dubbed ‘be smart go cashless’ to promote use of self-service channels, which include the electronic payment. The campaign is being implemented by 45 banks, which are members of the TBA.


Fitch Ratings affirms Rwanda’s credit standing as stable

International credit rating agency, Fitch Rating has rated Rwanda’s creditworthiness at B+ with a stable outlook. In its latest release, the agency noted a stable macroeconomic performance, marked by high potential growth and relatively low inflation prior to the coronavirus shock and underpinned by strong governance and a conducive business environment.

The Covid-19 pandemic was found to have dented the economic landscape in ways such as current account deficits, growing debt and reduced income. The agency further observed that a return to strong GDP growth consistent with stabilising debt will enable Rwanda to absorb the adverse impact of the coronavirus pandemic on its creditworthiness at the ‘B+’ level.


Ethio Telecom plans to generate 55.55 billion birr revenue

Ethio Telecom announced that it has planned to generate 55.55 billion birr revenue and increase total subscribers to 52.12 million in the current Ethiopian fiscal year.

Ethio-Telecom has unveiled its 3-year strategic plan and 2020/21 annual business plan and announced its discounted package offers today.the company has planned to increase its revenue and number of subscribers by 16.4 percent and 13 percent respectively during the current Ethiopian Fiscal Year as compared to the concluded budget year. Ethio Telecom had secured 47.7 billion Birr revenue during last budget year.

More than 5.47 million additional mobile network capacities will be installed in Addis Ababa and the regions in the current fiscal year.