18th September 2020 Trade & Financial Services Round Up

September 18, 2020 - Reading Time: 6 minutes - By The Vellum Team

The East Africa Community (EAC) Secretariat and its partner states held a virtual roll out event to mark the technical completion and development of the Regional Electronic Cargo and Driver Tracking System (RECDTS). RECDTS is designed as a mobile phone application and will enable the issuance of the EAC COVID-19 digital certificates that are mutually recognised by partner states, thus eliminating need for multiple testing as well as contributing to alleviating ongoing congestion at East Africa border crossing points. RECDTS provides a surveillance system to monitor long distance truckers crew health and enables contact tracing. It allows partner states to electronically share truck drivers’ COVID-19 test results; therefore, minimising the need for multiple COVID-19 tests in a single trip.


KAM launch policy toolkit to aid the recovery of the sector from the COVID-19 pandemic.

Kenya’s manufacturers on Wednesday, 9 September launched a policy toolkit to aid the recovery of the sector from the COVID-19 pandemic. The toolkit highlights overarching interventions needed to aid in the recovery of the manufacturing sector and economy, as businesses try to navigate different challenges brought about by the pandemic.
The strategy also recommends a number of robust actions that stakeholders in the manufacturing sector need to undertake in order to be in a position to stay resilient during this crisis and beyond.

In duplum rule- current legal position

Imagine taking a loan of 3 million shillings and having to repay over 18 million for the loan and still losing property you had used to guarantee the loan. This was the case of Scholarstica Nyaguthii Muriithi who took a loan from Housing Finance(HF) Group and placed two of her properties as collateral for the loan, she lost both pieces of property having paid 18 million for a 3 million shilling loan. The Court of Appeal in its decision in favour of Scholastica upheld the “in duplum” rule.
According to the common law rule one basically cannot be charged more than double the initial loan amount for a loan by a lender. The rule provides that arrears interest ceases to accrue once the sum of the unpaid (accrued) interest equals the amount of capital outstanding at the time. The rule directly translates to “double the amount”. The rule provides reprieve for borrowers and mainly protects their rights to property. Kenya has had a real estate boom so securitized properties have had tremendous increase in value. The in-duplum rule shall allow property owners to be protected from losing the entire current value of their property as banks can only collect double of what they borrowed.


International flights resume in Nigeria

Activities were resumed at the international wing of Nigeria’s ever-busy capital airport on Monday, 7 September as the country recorded its first batch of scheduled flight operations at the facility after about six months of shutdown due to the COVID-19 pandemic. Local aviation industry experts and officials have described the resumption of international flights as a huge breakthrough in the aviation industry in the most populous African country. The country’s ministry of aviation said in a statement that about 1,280 passengers would be allowed into Abuja and Lagos airports on a daily basis.

NNPC invites bidders for crude oil contracts for 2021

Nigeria’s state-owned hydrocarbon company, the Nigerian National Petroleum Corporation (NNPC) launched a tender for the purchase of Nigerian crude grades on Wednesday, 2 September. The Corporation has invited local and international companies to submit bids to lift Nigerian crude and condensates for the year 2021. Successful bidders will be awarded with contracts valid for one year, and the deadline for submission of bids is 15 October 2020 at midday (Nigerian time). Refineries, companies forming part of a government-to-government arrangement, global crude oil traders, and Nigerian companies engaged in oil and gas downstream activities will be eligible to apply in different capacities. According to the tender, the crude will continue to be sold on a Free On Board basis, subject to the execution of a sales and purchase agreement with selected buyers. The current 2018-2020 crude term contracts held by over 60 recipients, which were expected to expire in mid-2020, will be rolled over until the end of the year.


The National Bank of Rwanda (BNR) released the half-year Monetary Policy and Financial Stability Statement (MPFSS) 2020

The National Bank of Rwanda (BNR) released the half-year Monetary Policy and Financial Stability Statement (MPFSS) 2020, which looks promising in the financial sector despite multi-sectoral shocks due to COVID-19. The statement released on Monday, 7 September indicates that Rwanda’s Economic growth averaged 7.4% (in the last five years) and Real GDP by 3.6% in Quarter 1, but key sectors and development drivers were affected by the COVID-19 pandemic, except a few like the services and financial sectors. “The service sector was most affected by the COVID-19 pandemic through its negative effect on trade services, passenger transport services and tourism services, which also had negative spillover on financial services,” BNR said. Though the financial services experienced a drop, an assessment of the statement indicates that sector had highs, lows and generally performed better as a result of many factors, including growth in cashless transactions.


P2P lending now has its own specific licence

On 31 August 2020, the Mauritian Financial Services Commission (FSC) published the licensing criteria for Peer-to-Peer (P2P) lending. Prior to this, P2P operators were operating under the regulatory sandbox licensing. The Financial Services (Peer to Peer Lending) Rules 2020 came into force on 15 August 2020. P2P lending is an emerging Fintech practice that enables a person to lend funds through an online portal or electronic platform, whereby a P2P operator facilitates the access to finance by matching borrowers and lenders on its online platform. The three important pillars of P2P lending are: a platform, operated by a P2P operator that is a corporate body established in Mauritius; a borrower with a detailed project that needs financing; and a lender agreeing to provide funds in its own name.


Kigali launches a call for projects for intelligent waste management

While the city of Kigali is experiencing rapid population growth, one of the urgent needs of the Rwandan government is to improve waste management, especially in the capital. The authorities want to implement an intelligent waste management system in Kigali. Thus, as part of a partnership with Smart Africa Secretariat, an organisation of the African Union, the Rwandan Ministry of ICT (Information and Communication Technologies) and Innovation is looking for a company to set up an intelligent waste management system. In agreement with the municipality of Kigali, the government intends to sign a contract with the selected company to implement its intelligent waste management solution by December 2020. The system, whose pilot phase will cost USD100,000, will collect, transport, treat, recycle and dispose of waste. In concrete terms, the company chosen by the authorities will set up intelligent garbage cans with a real-time monitoring system, which will use sensor technology to alert collectors to waste fill levels. The system will also operate with closed-circuit cameras and a Geographic Information System (GIS) for the security of the waste collection facilities.

Public procurement still marred by payment delays

The Rwanda Public Procurement Authority (RPPA) is pushing contract management to be added to e-procurement in a move it hopes will finally eliminate late payment complaints raised by private contractors hired to execute government projects. According to the RPPA Act, for every purchase exceeding RWF100,000, a public entity is expected to issue a tender notice, inviting contractors through an open bidding process. Goretti Buhiga, the director of the Monitoring and Audit at RPPA explained that the issue of delays in payments continues to haunt public procurement even when the laws are clear. She further explained that to fix the issue, RPPA is currently requesting government institutions to share copies of invoices and details of payment. Buhiga explained that there are ongoing plans to update the system and add contract management among others to eliminate some of the issues that they have. “When that part is up and running, invoices will cease being issued by hand. The system will clearly indicate when the request for payment was made, and reason why if any, there was a delay. We will know who exactly to hold accountable,” she said.


NSSF launches online benefits claim – payment to be effected within eight days

Workers saving with the National Social Security Fund (NSSF) will have their claims processed within eight days, and without the need for the claimants to walk to the Fund’s offices. With time, the claims will be processed and paid in one day. This follows the launch of the NSSF Online Benefits Claims system that allows the saver to process their application either using a mobile phone application or their computer. This is part of NSSF’s five-year strategic plan that seeks to among others, process and pay claims within one day. Previous digital developments at the Fund include the remittance of savings via mobile money, by both the savers and the employers, checking balances, registering as a member or amending savers’ details, among others. NSSF head of Communications and Marketing, Barbra Arimi says it is more vital today than ever before that corporations create online solutions as more people are getting adapted to working from home, but adds that the new system also enhances efficiency.

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