Border Tariffs are not Good For Business

KAMPALA – Members of the business community engaged in cross-border trade within the East African Community countries of Kenya, Uganda, Rwanda, Burundi and Tanzania are well-positioned to start enjoying smooth trade flows in earnest when the concept of a Single Customs Territory (SCT) becomes operational. Under that arrangement, the EAC member states will adopt a destination model of clearance of imports whereby the assessment and collection of tax revenues on such consignments will be done at the first point of entry. This allows free circulation of goods within the single EAC market, with variations here and there to accommodate exports from one partner state to another. In that regard, Customs administrations in destination states retain control over the assessment of taxes. Senior EAC officials say this will crystallize the gains of regional integration characterized by minimal internal border controls and more efficient institutional mechanisms for clearing goods out of Customs control. According to Stephen Magera, the Acting Commissioner of Customs with the Uganda Revenue Authority (URA), the Single Customs Territory arrangements will lead to the removal of Customs checkpoints and weigh-bridges. For instance, “there will only be one checkpoint, at Maryakani, between Mombasa and Malaba; the others will be removed,” Magera told participants at a consultative meeting in Kampala recently. Stakeholders say that the Single Customs Territory initiative is a positive move, as it will help reduce transit time, as well as the cost of doing business. Commenting upon the matter, the secretary-general of the Uganda Freight Forwarders Association (UFFA), Jeniffer Mwijukye, said the business community would benefit immensely from the removal of Non-Tariff Barriers (NTBs). “I think it (SCT) is a good initiative. It is a positive step; it is what we in the business community have been longing for because other initiatives have failed! “In this initiative, we are looking at two very important elements as far as logistics are concerned: reduced time and, of course, reduced costs. We are looking at time because we know that if we pay taxes – especially for the compliant clients who go through ‘green’ their consignments will ultimately spend less than five days at the port; that is a positive,” Mwijukye enthused. Considering that the Kenya Ports Authority (KPA) gives importers a nine-day grace storage period, then they should be able to clear their goods out of the port within that period – and without having to pay any storage charges. This, she explained, is bound to lead to reduced costs. Mwijukye added that “the cost normally associated with Customs bonds will also b reduced, as insurance charges will not be applied. Also, those bringing in goods to be warehoused will only need one insurance bond cover… This is different from the multiple covers we’ve been having. And, of course each bond you execute for the transit cargo has got an implication on the price!” The national chairman of the Uganda Clearing Industry & Forwarding Association (UCIFA), Kassim Omar, also heaps praises on the benefits expected from the Single Customs Territory arrangements. But he adds that success of the requisite processes dependent on active participation and cooperation of all stakeholders. “The Single Customs Territory is a noble initiative,” Omar says, adding that “it will help in the reduction of NTBs. However, government needs to put in place the necessary infrastructure; ICT systems need to be put in place to enable the different systems interface so that there is facilitation of trade. “The governments have to ensure that there is compatibility of the monetary processes as well. An aligned currency factor should also be considered so that there is total harmony,” he cautioned, adding that “the SCT is in one way forward on the regional integration agenda. I know there will be some job losses here and there; but change has to take place for the better.” Sarah Mwesigye, the Assistant Commissioner for Field Services at URA, revealed that the tax body was looking to commencing a pilot study on goods for warehousing then roll out the requisite process later. “Because we are trying to remove Customs verification at the border, we shall start with those very goods that have been causing congestion at the borders. The pilot study is only for warehousing purposes, and (duties on) imports not for warehousing will be paid for at the Malaba and Busia borders,” she clarified. IN A RELATED DEVELOPMENT, THE COMMISSIONERS-GENERAL OF UGANDA, RWANDA AND KENYA REVENUE AUTHORITIES MET IN KAMPALA EARLY THIS MONTHTO DRAW UP A ROAD MAP FOR THE IMPLEMENTATION OF THE SINGLE CUSTOMS TERRITORY. During the deliberations, the Technical Committee said the Uganda and Rwanda Revenue Authorities will have to establish offices at the port of Mombasa by the end of August, while the Kenya Ports Authority (KPA) will use its local offices in Uganda and Rwanda to receive payment for port charges. During the Council of Ministers meeting that was attended by the Finance ministers of Rwanda and Uganda, the commissioners-general were tasked to remodel the report and rectify issues especially on cargo tracking and IT. Kenya Revenue Authority’s commissioner-general was, however, not able to attend the meetings following the fire that gutted the Jommo Kenyatta International Airport’s Arrivals section. According to Sarah Banage, the URA Assistant Commissioner, Public & Corporate Affairs, the meeting – which was the third leg of the commissioners-general meeting on the Single Customs Territory programme, provided a report that was presented to the Council of Ministers for action. Summing up on the Single Customs Territory concept, Banage said “this means that, for the purposes of customs clearance of goods, we become one region. We clear goods at the port of entry (say, Mombasa) where the taxes are paid and thereafter there are no road blocks all through to the country of destination…”

The Fossil Fuel Market in East Africa

Dar es Salaam: Stakeholders in Oil and Gas are expected to convene next week in Dar es Salaam for the Tanzania Oil and Gas Law Market Briefing 2016 at the Hyatt Kilimanjaro Hotel.

The briefing among other things will give a chance for stakeholders to gain insight in the state of the Tanzania’s oil and gas legislations.

This follow as a result of recent offshore successes in Tanzania, the entire East Africa margin currently has the attention of the world’s new ventures teams, explorers and gas (LNG) buyers.

According to the ministry of Energy and Minerals, natural gas reserves discovered in the country has increased by 18 per cent to 57trillion cubic feet by end of last year, from 46.5trillion cubic feet in June 2014.

With Gas reserves proven and additional acreage expected to come online in 2016, the Tanzanian Government has taken some very swift steps in providing the legal and fiscal framework for the industry in the form of The Tanzania Extractive Industries (Transparency and Accountability) Bill 2015, The Oil and Gas Revenue Management Bill 2015 and The Petroleum Bill 2015. 

However, the three legislations have faced a myriad of criticism from the opposition members and the public in general who have insisted that should the Acts be assented by the President, the country’s natural resources would benefit foreign investors rather than the locals.

According to Breakthrough Attorneys there are some remarkably clear and unambiguous requirements for transparency in the newly assented Acts. Most obviously, this includes the publication of all existing and new Mineral Development Agreements and Production Sharing Agreements.

Breakthrough Attorneys is an ultramodern legal practice based in Tanzania having a spectrum of cross-borders practices that cater for local and multinational corporations, financial institutions, government entities as well as business private individuals concerning their legal needs around the globe

However, the legal firm asserted that; “despite the shortcoming on the new Acts, it is right to say that the same are a big step forward to transparency on the overall management of the country’s resources.”

Additional opportunities and the relation to the new laws will also be discussed; farming-in into the existing exploration and production licences  and Investment in the downstream projects (cement, fertiliser, petrochemicals, power, gas distribution in the cities).

Others will include emerging services associated with Liquified Natural Gas (LNG) as well as establishing JV with local companies for participation into servicing the oil and gas industry.

The briefing is targeting participants from Oil and Gas companies, Financiers, Development Funds, Commercial Banks, Deal Brokers, Private Equity Firms and the Law Firms.

According to organizers, the briefing will revising the three bills as well as the local content policy draftand non-Citizens Employment Regulation Bill.

The opening presentation titled “Opportunities and investment in Tanzanian oil and gas exploration and development” will provide participant with an encapsulating overview of the market presently and the parameters around future oil and gas developments and subsequent business.

Other presentation will include “Key regulatory developments in oil and gas – Tanzania” by Charles Rwechungura, Founder and Managing Partner, CRB Africa Legal.

Peter Kasanda, Partner, Clyde & Co Tanzania will present the petroleum Act 2015 which will give insight on how to conduct Oil & Gas activities in Tanzania, the Government participation and local content, Domestic supply obligations, Fiscal obligations.

Kassanda will also highlight the dynamic contract negotiation over a project lifecycle, infrastructure investment and local content, Preferential Procurement obligations and Local content priorities – “Tanzania Kwanza”

The 2015 Petroleum Bill stipulates a 12.5 percent royalty for oil and gas production onshore and 7.5 percent offshore.

 

According to the bill, the government’s profit share from future oil production which will be tagged to daily production levels will range from a minimum of 50  to 70 percent while the share of profit on natural gas production will range from a minimum of 60 to 85 percent.

 

The Bill also ring-fences the recoverable costs of exploration and development licenses, establishes a Regulatory Authority and Advisory Bureaus to manage the oil and gas sector and seeks to transform the Tanzania Petroleum Development Corporation (TPDC) into the National Oil Company (NOC)

In-depth session will cover Model Production Sharing Agreement 2013, Tanzania Petroleum Act 2015 and the Tanzania Extractive Industries Transparency and accountability Act 2015, Tanzania Oil and Gas Revenues Management Act 2015 as well as Contracts Management and Negotiations.

A New Online Magazine is Proposed

Singita Grumeti Reserves recently sponsored the Mara Press Club Fundraising event held last week in Musoma region.

The Tsh 4.5 million sponsorship was in aid of facilitating the fundraising event that brought together other journalist, stakeholders and investors within the region, in aid of the establishment of an online magazine for the region.

The event, officiated by Tarime District Commissioner, Mr Glorius Luoga, managed to raise Tsh 15.8 m from other stakeholders including Acacia Gold mine, CaTa  mining and Goldland Hotel  and Tours.

“I applaud your decision to implement the online magazine initiative which will certainly go a long way towards releasing positive stories about development in Mara Region” said Ms Angela Msechu, an official from SGR.  “We have always understood the important role that the media play in raising positive awareness of issues, essentially contributing to influencing positive mindsets in people” she said. “Singita Grumeti are very happy to support you with this and we know it will be for the benefit of the entire region”, Ms Msechu said. added. She said SGR  are committed to continue supporting local media in areas where they operate.

Meanwhile, DC Luoga commended Singita Grumeti Reserves for their support. He also urged the journalists to ensure that they adhere to professionalism and ethical reporting. “Mara region is home to the world reknown Serengeti National Park, and several boasts several natural resources amongst which is Gold”, DC Luoga said. “It is time journalists started reporting on all the good things that happen within Mara and begin to influence perception of the region”, he added.

 “We sincerely appreciate the support from Singita Grumeti Reserves and all other companies and stakeholders for their generous contribution” said Mr Jacob Mgini, Chairman of Mara Press Club.

 “We see SGR as our valuable partner and stakeholder to the region. I would like to ask them to continue with the same spirit “, Mr Mugini said.

The Triumph of the Smartphone

Samsung Mobile is defying barriers once again with its launch of premium Galaxy smartphones.

This time Samsung is not only launching a new phone, but also launching a new way of thinking about what a phone can do that redefine the ways the company imagine its technology.

In Tanzania, Samsung is giving the consumers a very good reason to pre-order its new Galaxy S7 Smartphone.

The Galaxy S7 and S7 edge will make holder rethink what a phone can do.

Given that S6 swept up nearly every best smartphone award in 2015, this year March Samsung Electronics anticipate launching the most awaited galaxy series.

S7, as a high level update from any other galaxy series comes multi covered, with 5.5 inch display supported with high screen resolution.

Samsung Galaxy S7 is the first smartphone with dual-pixel technology with a fast autofocus for less blur. It allows you to capture moments as you actually see them with the new advanced sensor for catching details in low light.

Samsung say their phones go everywhere with – except in water. Samsung’s S7 has now opened up a new world to use it in- rain, shower or the pool. With a longer lasting battery, Samsung S7 is geared to keep you going all day and beyond.

“We believe in a world that is brighter, sharper, more convenient, and more fun. We strive to deliver on that vision with the Galaxy S7 and Galaxy S7 Edge by marrying elegant design with functionality and providing a seamless mobile experience,” said DJ Koh, President of Mobile Communications Business, Samsung Electronics. “We empower consumers with technology to help them get more out of life and will continue to push the frontier of what’s possible.”

“Tanzanians consumers’ lifestyles are changing fast and their demands and expectation for classic mobile phones is highly increasing. Operating System is a crucial factor when considering modern smartphones because it has a very big impact on the phone’s overall usability, functionality and convenience. The range of features available in Samsung Galaxy S7 provide access to countless high quality mobile applications to consumers”. Said Rayton Kwembe product manager Samsung electronics Tanzania.

Smartphones are as much about enjoying media as they are about communicating. One can watch movies, play games and view photos on your mobile screen and you want the crispest display around. The Crystal-clear display of Galaxy S7 is meant to provide Tanzanians with great entertainment.

Shortage of storage space and security has always been an issue to Tanzanian’s mobile users, With S7 these are no longer most gabbed-about feature on the new S7 is definitely the fingerprint sensor. Long-lasting battery and speed are still the ultimate prize in S7.

Most Standard mobiles have very limited Internet capabilities, the Internet is difficult to use because of the small screen and slower hardware. With high processing power and software compatibility, S7 can be used to perform all internet activities.

Since 4th March, Samsung is hanving having live demos of Galaxy S7 at Samsung shops at Mlimani City, City Mall & JM Mall as well as Vodacom Shops at Mlimani City & Samora Avenue.

Is There Still a Glass Ceiling?

A research conducted last year in November by Association of Tanzania Employers (ATE) through its Female Future Tanzania program has revealed that only four out of ten women’s are in managerial level.

Female Future Coordinator at the Association of Tanzania Employers (ATE)  Lilian Machera said that a research was aimed to expose and revealed bottleneck that hinder women to acquire top position in the workplaces.

‘The research was conducted to 300 companies to private sector in Dar es Salaam region with the ultimate goal of finding sustainable solution and pave the way for women to acquire top position in the workplaces,” she said.

She noted that the findings also revealed that emotional, family matters and little confidence are the bottleneck that hinder them to expose their capabilities in the workplaces.

Machera said the major aims of the programme is to get more women into management positions, decision making processes and on Corporate Boards and that it will be delivered through executive training on Leadership, Rhetoric and Board Competence where as the courses will be directly linked to participants’ daily work routine at their workplaces.

“Currently, Tanzanian unemployment rate stands at 10.3 percent; therefore, job creation should be a development agenda that the government should focus on,’’ she noted.

Vice President Samia Suluhu Hassan graced the one day forum that aims at attracting more women into leading positions and on Boards of Directors of Companies with the ultimate goal of having 50% to 50% in the long run.

VP noted that the programme would help in promoting talents to the men and women of Tanzania and attain vision 2025 which aims at ensuring the country is becoming a middle income country by 2025.

Co-organised by Kazi Service Limited in partnership with the Association of Tanzania Employers (ATE), the event  provides a platform for more than 400 women leaders and professionals drawn from the private and public sectors in areas of academia, military, judiciary, diplomatic missions and non-governmental organizations.

Female Future program was established by ATE in collaboration with the Confederation of Norwegian Enterprise (NHO), the programme will officially commence in July this year.

Medical Advances Save Child’s Life

Following the Apollo Hospital’s successfully Asia’s first en-bloc combined Heart and Liver transplant; Apollo Hospitals has performed ground-breaking surgery to a one-year-old child from Kenya who underwent an unusual liver transplant at the Indraprastha Apollo Hospital, Delhi.

A segment of the liver was donated by the child’s father. Paul was suffering from biliary atresia since birth, a condition in which the bile ducts (required to drain the bile from the liver to the intestine) were not developed. This is among the most common reasons for liver failure in infants.

The condition can be treated if detected within two months of birth. However, in Paul’s case, the condition went undetected. The only option for him was a liver transplant. The procedure was conducted at the Centre for Liver and Biliary Surgery at Apollo Hospitals Professor.

 Anupam Sibal, Group Medical Director, said: “Paul’s case was high-risk because he was severely malnourished, was born with a complex anatomy and his liver failure was rapidly worsening. Because of that he needed an urgent transplant. We took on the challenge with such a small baby weighing only six kilograms and with several risk factors as that was his only hope. ”Professor Sibal added that the child had made a remarkable recovery and was discharged two weeks after the surgery.

This successful operation took 12 hours and involved a medical team of 50 people. Dr. Subash Gupta, Chief Transplant Surgeon at the Indraprastha Apollo Hospitals, conducted the operation.

Liver transplantation involves the replacement of a diseased liver with an entire or partially functioning liver from another individual. As there is currently no machinery that can replicate the functions of the liver this risky procedure is only undertaken as a last resort due to the unavailability of other cures. Despite its recent success rate the procedure is potentially fatal due to the complication involved during and after the surgery.

Dr. Subash Gupta, Chief Transplant Surgeon at the Indraprastha Apollo Hospitals states that “there are 3 liver transplantation techniques: cadaver donor transplantation, living donor transplantation and the less used auxiliary transplantation. In Cadaver donor transplantation the donor liver is obtained from a person who is diagnosed as brain dead, whose family volunteers to donate the organ for transplantation. People who receive cadaver donors wait on the institutional / regional list until a suitable donor becomes available.”

“Living donor transplant involves a healthy family member, usually a parent, sibling, or child, or someone emotionally close, such as a spouse, volunteers to donate part of their liver for transplantation. The donor is carefully evaluated by the team to make sure no harm will come to the donor or recipient.”

“Auxiliary transplantation involves part of the liver of a healthy adult donor (living or cadaver) being transplanted into the recipient. The patient’s diseased liver remains intact until the auxiliary piece regenerates and assumes function. The diseased liver may then be removed.”

Last year a team of doctors from Apollo Hospitals – Centre for Liver Disease & Transplantation (CLDT) successfully carried out a Multi-Visceral on multiple patients courtesy of a cadaver individual. Liver transplant which is normally used for a single recipient, but occasionally split to benefit an adult and a child, on this occasion was split for two adults, a feat that is rarely achieved. In doing so the hospital group became the first to perform such an operation in India and with an individual suffering intestinal failure since childhood. The case was also the first where the abdominal wall was transplanted over and above the intestines in-order to overcome the difference in size between the donor and recipient’s abdomens.

 LIVER CARE AT APOLLO HOSPITALS

Apollo’s comprehensive liver transplant care programme aims to provide effective health care by connecting to people dealing with liver disease. A successful liver transplant, ably supplemented by Apollo’s care and commitment affords a fresh lease of life and puts the smile back on your face as you return to normalcy.

Apollo hospitals have the fastest growing Liver Transplant program in India with the biggest cadaver program for liver. Apollo hospitals in Delhi, Chennai, Hyderabad, Kolkata, Ahmedabad and Bangalore offer liver transplant surgeries thus making India’s largest liver transplant network centres in India

Indraprastha Apollo Hospitals, Delhi successfully completed 200 Liver Transplant cases of Pakistani patients, in November 2011. With a success rate of over 90%, Indraprastha Apollo Hospitals has created a milestone in the history of medicine by becoming the first hospital in the country to reach the 200 mark for patients from a single foreign country.

Over 500 Liver Transplants performed with a success rate of 90%.Apollo Hospitals performs 537 liver, kidney and heart transplants in 238 days making ours the second busiest transplant program in the world.

The Economic Crisis in Africa

THE latest (17th) meeting (NOT ‘last,’ please; it seems there’ll be many of such meetings well into the future… Mark my words) of the Summit of the East African Community (EAC) met in the Community’s statutory ‘capital,’ Arusha, March 2-3 this year.

The Summit is the supreme authority (so we’re told) of the (hitherto) five-member nations, namely: Burundi, Kenya, Rwanda, Tanzania and Uganda – named strictly in alphabetical order, NOT on any other merit!

During the Summit, a new member – Southern Sudan, hewn from The Sudan-Khartoum in 2011, becoming the world’s newest nation-state – was mollycoddled on-board the EAC using kid gloves.

South Sudan (Sudan-Juba) had earnestly pleaded for EAC membership – perhaps little-knowing what the future of the Community would be on the ground… A Community that’s navigating with considerable difficulty treacherous regional integration waters, ostensibly bent on forming an East African Federation (EAF) – complete with single this, single that and single the other… Sheesh!

Another EAC membership applicant, Somalia, metaphorically had the door slammed in its face – or what little ‘face’ that beleaguered country still has as a cohesive, viable nation-state!

But, that’s really another story…

The EAC Summit this time round brought together only four of the six eligible Heads of State, Government and Commanders-in-Chief of their Armed Forces. These were Kenya President Uhuru Kenyatta; Uganda President Yoweri Museveni, Rwanda President Paul Kagame – and, of course, the Host, Tanzania President John Magufuli…

[Incidentally, for some reason that isn’t clear, Tanzania was also ‘represented’ in Arusha by ‘another President:’ Zanzibar’s Ali Mohhammed Shein!

If Dr Shein was just another ‘invited guest,’ why was he involved in ceremonial functions like the cutting on March 3 of the tape to formally open the way for the construction of the Arusha-Holili/Taveta-Voi road…? After all, that road doesn’t traverse Zanzibar!

Again: Burundi was represented at Arusha NOT by the hale, ‘soccer-mad’ Pierre Nkurunzinza, but by his Vice-President, Joseph Butore.

South Sudan was represented NOT by its President, Salva Kirr, but by his Vice-, James Wani-Igga!

Oh… I don’t know… But, one’d have expected the real/22-carat President of the fresh-faced EAC member, South Sudan, to proudly be up there at the ‘socio-econo-political marriage’ which almost squarely puts his country with other members of the Comity of Nations!

Again: how does one explain the absence of Burundi’s strong-arm President Nkurunzinza who didn’t avail himself of the opportunity to mix it in there with his fellow Heads of State, etc, etc, during the sundowners, pray?

Oh; I (almost) get it… It’s quite possible he knew there’d be no sundowners in Arusha – what with Tanzania’s austere, no-merrymaking President Magufuli in charge…

Magufuli was confirmed the ‘new’ EAC Chairman by his colleagues – thereby practically succeeding himself in that ‘portfolio,’ as it were! Indeed, the man had virtually assumed the Summit Chieftainship from his predecessor, immediate-past President Jakaya Kikwete, on being sworn into the Presidency Nov. 5, 2015!

Then his Summit peers ‘gifted’ him with a full-year Chairmanship – ostensibly in tacit recognition of his much-vaunted prowess at Governance… Whew!

For starters, the ‘new’ Chairman criticized the choice of Ngurdoto Lodge as the Summit’s meeting place, at US$45 per person, instead of (say) the Arusha International Conference Centre ($30/person)… [Mtanzania: March 3, 2016].

There also were other positive developments… For instance: launching the 1120km Oil Pipeline Project from oil-rich Uganda to Tanga port, projected to create 15,000 jobs; and the 234.3km Arusha-Holili-Taveta-Voi Road Project…

On the face of things, one’s tempted to believe that, with Tanzania’s Magufuli at the EAC helm, who needs a Magic Man, pray?

The truth is that most consternating is the way the Summiteers tried to explain away the seemingly-endless impoverishment that beleaguers East Africans two generations post-political Independence from colonial rule!

The Summiteers correctly admitted that the EAC countries are relatively well-endowed with potential wealth in the forms of natural and other resources, as well as a myriad comparative advantages. Yet, they also freely admitted that East Africans have for inordinately-long remained relatively backward economically and socially!

So…? Says Chairman Magufuli: ‘If East Africans closely cooperate in Agriculture and Manufacturing, we’ll become autarkic, no longer depending on Western (sic) countries!’ Really…?

Uganda’s Museveni: ‘Tukizungumzia Uchumi was kisasa, Africa hakuna umaskini! Ina Utajiri mwingi wa Rasilmali isipokuwa inakosa Maendeleo tu! Shida ya wa-Afrika ni kulala; wanalala huku kumekucha…!’ (Roughly: in Modern Economics, there’s no poverty in Africa. The Continent is phenomenally-endowed with minerals and other resources. Problem is that Africans are still asleep well after dawn!

My God… What contrived abracadabra, coming from a leader 30 years at State House! What’s he done to ‘awaken’ his sleeping compatriots? What can he now achieve in his fading, failed reign – or is it feeding the greed by letting sleeping dogs lie?

The likes of Museveni should heed Kenya President Uhuru Kenyatta, who told it like it is – painting it warts and all!

Digging in deep, Kenyatta correctly averred that it’s the leaders who’ve been asleep on their watch down the years, not the people! In the event, he urged his fellow EAC leaders to change – and walk their cruel political talk which has so far been empty rhetoric.

Truer words were never said in a very, very long time… Are our leaders plain wrong or cunningly evasive on the real causes of poverty in resource-rich Africa? Cheers, anyway!

Social Security Fund Reaches Critical Mark

THE Zanzibar Social Security Fund (ZSSF) accumulated fund (net assets) grew by a quarter, to Tsh177 billion, during the year that ended on June 30, 2014 – up from Tsh141.63 billion in 2013. This indicates that the Fund is about to click Tsh200 billion mark!

The tremendous increase of the Fund in a single year was the result of increases in both contributions and investment income.

ZSSF was established under Section 4 of the Zanzibar Social Security Fund Act 1998 and re-enacted under section 4(1) of the ZSSF Act 2005 with the objective of providing social security to all eligible employees.

The Fund’s Managing Director, Abdulwakil Hafidh, says the Fund continues to invest in different portfolios such as Treasury Bills and Bonds, Government Stocks, fixed-term bank deposits, equity investments, call accounts, institutional loans, syndicated loans and in real estate.

He said that ZSSF has a total of Tsh65.96 billion currently invested in fixed term deposits, while a total of Tsh33.3 billion is invested

in Treasury bonds.

He also mentioned that a total of Tsh11.5 billion has been put in equity Investments which include TAN-RE, TPCC, UTT, CRDB and NMB.

During the period under review, overall performance of the Fund continued to meet with its corporate objectives/targets – including registration, collection of contributions, investing and payment of benefits to its members.

The Fund has captured the informal sector membership, which involves a large group of self-employed persons through Zanzibar Voluntary Social Security Scheme (ZVSSS) as its supplementary scheme.

According to the Managing Director, the Fund increased its membership size to 72,210 members reported in the year to June 30, 2014, rising from 66,488 members reported in the year to June 30, 2013. This represents an increase of seven per cent in a single year!

The total number of registered employers increased to 1,200, up from 1,091 in the period under review.

There was also an increase in contributory collections, rising from Tsh24.8bn in 2013 to Tsh29.1bn in the year which ended June 30, 2014.

The Chief Executive mentioned that, during the period under review, there was an increase in income from investments that were held by ZSSF.

“This investment income increased to Tsh146.0 billion in the year to June 30, 2014, up from the Tsh126.3 billion registered in the year to June 30, 2013: an increase of 15.66 per cent. This increase was largely due to appreciation of share values in the different institutions in which the Fund has invested, as well as increased interest rates in the money markets,” Hafidh said.

During  the review period, the total amount paid by the Fund to its members in the form of various benefits increased by 53.67 per cent.

The benefits increased to Tsh9.9 billion in the year which ended on June 30, 2014 – up from Tsh6.5 billion in the year to June 30, 2013.

The increase in benefit payments was a result of new retirees and foreigners who left the country.

Hafidh noted that, despite the achievements made by ZSSS during the year 2013/2014, the Fund has been facing a number of challenges. These include depreciation of the Tanzania Shilling, taxes on Fund’s income – both of which hinder our efforts at increasing financial sustainability of the scheme, insufficient investment opportunities and low returns on real estate.

“Also, on account of these challenges, the Fund will continue finding new investment areas; implementation of five years ICT Strategic Master Plan in order to improve efficiency and effectiveness of our daily activities; enhance risk management procedures, and use the social media to simplify communications”, the Managing Director strategized.

Corporate Social Responsibility (CSR) has been one of ZSSF’s undertakings since 1998. The Fund continued to invest in the community with the aim of improving the quality of life of the people at large.

During the period under review (2013/2014), the Fund engaged in various social projects in health, education and community development.

Uganda Bank Group Faces Challenges

FOLLOWING the recent acquisition by the Exim Group of 58.6 per cent of the former Imperial Bank of Uganda, Exim Bank has said that there will be no job losses at the Ugandan bank, renamed Exim Bank-Uganda.

Exim Bank-Tanzania Chief Finance Officer Suleiman Ponda told Business Times in an exclusive interview that the immediate intervention will be alignment of the bank to the Exim Group, headquartered in Tanzania.

“There will be an alignment of operations, as well as improvement of the Uganda subsidiary’s infrastructure and branches network,” he told Business Times in a telephone interview – adding enthusiastically that “the staff had exhibited an exceptional spirit to the cause of the bank during the period of transition!”

Exim Bank announced the acquisition this week, after the Ugandan bank had been under receivership of the central Bank of Uganda (BoU).

BoU placed the former Imperial Bank Uganda under receivership in October 2013, following a similar action on the parent company by the Central Bank of Kenya (CBBK next-door as accounts of fraud at the lender surfaced.

However, speaking during the acquisition announcement, Ponda said Exim Bank Tanzania Limited (“Exim Bank”) carried out a rigorous due diligence of the bank before buying the stake.

He told the media this week that the acquisition process was completed under purview and supervision of Bank of Uganda.

Following the acquisition, Exim Bank now holds  the majority stake in the newly formed Exim Bank Uganda Ltd, while ‘Amazal Holdings’, the prestigious ‘Mukwano Group’ having diversified business interests within and outside Uganda, holds 36.5 per cent share and the rest 4.9  per cent by Export Finance Ltd.

The bank – which was founded as Imperial Finance & Securities Company Ltd, and commenced operations as a financial institution in 1992 – had 28 branches in Kenya, and five in Uganda.

 “I am happy and excited to announce that Exim Bank has established its foot print in Uganda, in partnership with one of the most eminent and largest business groups in the country,” Ponda bubbled with enthusiasm.

 “There could not have been a more opportune time to make entry into Uganda through such an alliance, when the EAC (East African Community) itself has been actively engaged in leveraging the capacity of all the Community’s member countries in the Region,” added Ponda.

Exim Bank – the largest indigenous Bank in Tanzania – is completing 19 years after its establishment, having started operations with one branch in Dar es Salaam in August 1997!

The bank now has 37 branches at strategic centres across Tanzania, as well as two Subsidiaries overseas. The Bank’s Total Assets were at Tsh1.250 trillion (around US$580 million) as on December 31, 2015 with Shareholders Funds of nearly US$90 million.

Exim Bank-Tanzania has two banking subsidiaries in the Comoros and Djibouti, with the 3rd having been established in Uganda recently!

“The bank has traversed a cherishing journey having faced the nuances of an indigenous bank, and coming out with flying colours, always.  It makes us proud to be continually recognized as ‘One of the Most Innovative Banks in the Region,’” Ponda stated.

Exim Bank-Uganda shall have the privilege of making a strong beginning with a set of five well-established branches in Kampala, and an asset base of nearly $100 million.

Headquartered along Hannington Road with a branch at the ground level, the bank has more than 100 dedicated, loyal staff.

“We are proud to have such a bunch of committed staff,” Ponda stated, adding:  “we are also very thankful to both the Bank of Tanzania and the Bank of Uganda for their worthy approval and valued support in this landmark beginning.”

The expansion will enable Exim Bank to strengthen its presence across East Africa, thereby fulfilling its vision to become a strong regional player – and, in the process, creating a powerful platform for future growth in the region.

Exim Bank has once again exhibited a penchant for spotting the right opportunity. Businesses on both sides of the border are expected to give a thumbs-up to the bank for raising their confidence to explore upon a plethora of opportunities on cross-border trade between the two friendly nations within the East African Community.

Exim Bank has to its credit several pioneering initiatives – the salient being the launch of the first-ever Credit Card in Tanzania way back in the year 2005, doing so in affiliation with MasterCard International.

Exim Bank posted stellar financial performance for the Year-2015, with the bottom line, profit-after-tax, posting a record growth of 80 per cent over the previous year: Tsh30.666 billion (US$14 million).

The Uganda Central Bank Governor, Prof Tumusiime-Mutebile, was recently quoted as saying that the sale of the Imperial Bank stake to the Tanzanian multinational has effectively ended the regulator’s statutory management.

Imperial Bank-Uganda was yet to record a profit, having sunk deeper into the red with a loss of Ksh671.1 million as of December 2014 — up from Ksh63.5 million the year earlier! The bank had commenced operations only in January 2011!

In 2012, the Imperial recorded a loss of Ksh1.7bn. The bank’s Non-Performing Loans (NPLs) stood at Ksh9.12bn in 2014, down from Ksh11.3bn in 2013.

On Oct.13, 2013, the Bank of Uganda – the regulator of the banking industry – announced that it had “temporarily” taken over the management of Imperial Bank-Uganda as a “precautionary measure” to protect customers’ deposits.

By the end of 2014, the Imperial Bank’s core capital had shrunk to USh24.1 billion. However, shareholders – who included the Mukwano Group and the Imperial Bank of Kenya – saved the bank’s capital from further depletion and possible BoU sanctions with an injection of USh2.3 billion from issuing 2,300 ordinary shares of Ush1m each in January 2015. This brought the bank in line with regulatory requirements.

Tanzania Declines Outside Aid

Tanzania’s Finance & Planning Minister Philip Mpango left a few observers somewhat perplexed lately when he seemed to say that he won’t be looking for aid from outside!

At some point, someone said the next government budget for the 2016/2017 financial year is likely to be 80 per cent self-reliant – which, on the basis of economic events taking place, didn’t quite clash with the Minister’s affirmation.

The point is: there is aid that is likely to flow in by itself… Or, if one prefers, investments by various multilateral banks and Funds, not more – and they don’t wait for phone calls!

There were reports of new loan arrangements from the African Development Bank (AfDB). But, it is uncertain how much of this stemmed from the Minister’s efforts – or it is now the AfDB which is looking for ways of engaging with Tanzania, that is: investing in the country!

Not much has so far been heard of Tanzania’s traditional development partners – apart from AfDB and the World Bank, which can predictably act on their own.

Several others are bilateral aid organisations which need to be sounded out, perhaps by NGOs this time around, as it seems!

How far this is the mood across the whole of the government is so far uncertain – as it depends on how rapidly they can complete acceptable Budget proposals for the national Legislature, with the month of May as the deadline, without having to actively seeking out bilateral aid agencies.

So far, however, the government has been able to vastly improve the potential flow of development expenditure compared to the past, and it is this sphere which more or less depended on foreign aid for years! Aid fatigue, rising gold earnings led to some rethinking.

While the much-vaunted gas economy is not coming ashore as rapidly as many would wish, the Budget mentality – tied up with a gas economy – is more or less in place: the whole idea of questioning whether Tanzania is a poor country!

Still, it isn’t what Tanzania has in the ground which makes it less poor than before but what it can collect in revenues, and how far this meets basic or reasonable expectations among the people. MPs won’t settle for less than that!

Tanzania’s place on the global natural resources map has been wobbling, what with divestment in the gold sub-sector owing to declining prices, declining yields and aggressive taxation both at the central and local government levels.

At present, with key mining companies having become more localised as Acacia took the place of Barrick Gold-Africa, and the State Mining Corporation (StaMiCo) trying to fill the vacuum left by other divestments, the picture is different. The gold tag is shifting to lower levels, while the gas label is sticking!

Reports on even greater discoveries of natural gas potential or confirmed reserves only helped to boost the country’s investment picture in the area, with little or no budgetary impact at the moment.

That – and capital gains tax (CGT) from the sale of British Gas to Shell, which no one knows if it will clock the potential US$200m some think it will, or shoot above that figure. And it now seems Tanzania is a bit conservative in the capital gains tax slot at 20 per cent. Kenya’s rate shot from a mere 5-to-35 per cent, while Uganda’s rate stands at 30 per cent!

Analysts are still baffled at the manner in which Kenya’s policy stance has shifted – and how this squares up with existing scenarios for East African integration. The latest Summit meeting of Heads of State had some peculiar ideas both for strategies of integration and the budgetary picture as it emerges, as the presidents seem to be converging on the idea of eliminating secondhand clothing imports. The reasoning for such a move is a bit easy to sketch out, but at East Africa level, rewinds sore issues of which local industries to protect!

While the Heads of State seemed to be thinking that employment was the key reason why secondhand clothing should be removed from the East African market so that the zone can use its cotton to develop its internal clothing industry, the dangers were lurking in the corner. It was clear that selling used clothing is such an important anchor of urban life in Tanzania (and elsewhere in the region) that touching it with a ban could easily spark riots.

The government was still smarting from its move to ban cheap sugar from outside, and then blame traders for hiking the price!

The new protectionist mood in East Africa seemed to augur badly for the completion of moves to cement the European Union’s Economic Partnership Agreement (EPA) with the EAC, already signed in late 2014. The grace period before making budgetary reckoning is mid-2016 – and. we now see a sort of volte face!

As if the Heads of State were listening, retired Tanzania President Benjamin Mkapa took up an invitation to the University of Harare where he delivered a lecture blasting plans to reach an economic partnership accord with the EU!

The more enthusiastic partner states were Kenya and Rwanda, with Uganda a fellow traveller while Tanzania has always been cool to the project – but signed on the bottom-line back in November 2014! It was the same period that the idea of an East African Monetary Union by 2024 was also formally endorsed!

Yet, there is a ‘Mazruian’ situation that comes up, in having a less liberal EAC policy outlook forming a new framework for integration, as it risks bringing the EAC itself to collapse, when each country starts protecting its cloth, tyre and other factories.

The government of Tanzania has released money not just to purchase the 26 per cent shares held by Continental-AG in the Arusha-based General Tyre (EA) factory. It will also be pumping large amounts of money in to revamp it. That means it also lays the rule as to which tyres are sold on the local market: its own first!

As the EAC partner states are sugar importers in the main, rising protectionism may not change things on the ground, although it brings up strenuous policy issues at the local level, especially with regard to inflation. With the inflation rate standing at 6.5 per cent for one or two months now, it is unclear if the pricing of sugar will remain the same when current stocks dry up and new ones are sold. Ministry officials seem to suggest that local producers aren’t hiking prices but it is traders!

In that context, a less liberal government in Tanzania is influencing other countries in the sub-region to practise less liberalism, seek what are usually called ‘local solutions,’ instead of being given policy slates from the EU and the World Bank to follow.

But, precisely on that account: why should East Africa itself have a Common Market, organised on the basis of competition of firms and not planning at a sub-regional level as this failed in 1965? Is it relevant?

Just as there is no panacea for illiberal policies at the local level which reduce the market sphere in favour of planned economy – protecting local industries – so will it be for the sub-region. The sugar firms will have the market to their bidding for a while… But, if they hike prices (as they have always wished) against cheap (or ‘silly’) foreign sugar, it will boomerang.

Cabinet changes will follow, and that won’t be just the restoration of formal liberalism but other ‘vices,’ too!