Kenyan insurance brokers operating in Tanzania will be forced to cede shareholding to locals under a new law which cut by half the ownership quota allowed for foreigners. Fresh amendments to the Insurance Act sets the mandatory stake that must be held by Tanzanian citizens to be at least two-thirds from the initial one third or 33 per cent. It is estimated that a significant chunk of Tanzania’s 124 insurance brokers are foreign-owned, with a substantial number being backed by Kenyan investors. Some of the Nairobi-based firms selling and negotiating insurance products in Dar es Salaam include Aristocrats Insurance Brokers Ltd, Eagle Africa Insurance Brokers Ltd, MIC Global Risks, and Pacific Insurance Brokers. Others are global insurance brokers such as AoN and JW Seagon, which have operations across the region. The shareholding structures of these firms was, however, not available immediately to the Business Daily, and as such it is not clear how they will be affected by the new regulations. “The changes require insurance brokers to be at least two-thirds (66 per cent plus) owned and controlled by Tanzanian citizens. “This is a 100 per cent increase from the previous local participation requirement (of one third (33 per cent),” said Shamiza Ratansi, managing partner at ATZ Law Chambers, in a research note. Peter Nyabuti, a Kenyan businessman behind Astra Insurance Brokers Ltd, said his company will not be affected by the new ownership rules as foreign shareholding complies with the new quota. “Already, Tanzanian nationals own about 70 per cent...

Uganda has had one of the strongest economic performances in sub-Saharan Africa over the past two decades, growing at about 8 per cent; more than doubling per capita income; and cutting poverty in half. But in recent years, growth has slowed and is likely to have reached less than 4 per cent last year. A difficult regional environment — impacted by the South Sudan conflict — slow private sector credit growth, and a drought have contributed to the slowdown. But there are also more structural, deep-rooted factors at play. Productivity growth has fallen, education standards have not kept up with the needs of a modern economy, and inequality has increased. The challenge now is to return to high and inclusive growth. At the International Monetary Fund, we believe that with the right policies, this is possible. Pave way for oil Uganda is expanding its infrastructure network. Improvements in transport and electricity are expected to provide space for more vigorous private sector-led growth. Oil-related infrastructure investment — including a pipeline, a refinery, roads, and an airport — is leading the way. These investments will pave the way for oil to start flowing, providing a boost to growth and public revenues. The focus on infrastructure will support growth, but should be complemented with measures to improve public investment efficiency. Ongoing efforts to enhance project selection, implementation and execution are essential to ensuring that the projects yield the expected growth through improved quality and efficiency. The emphasis on infrastructure also needs to be...

Tanzanian gas exporters have termed Kenya’s ban on imports as protectionism, as its oil marketing firms lose their share of the market. They say the move is against fair competition practice as set by the EAC Common Market rules. However, the exporters may have to wait till the end of the year for a possible resumption of business after Kenya indicated that it will take up to six months to install a gas-testing facility at its border points. The Tanzania LPG Association said that the ban has benefited select companies in Kenya. “We don’t see any plausible reason for the ban on LPG trade between Kenya and Tanzania, save for undue influence by a few oil firms in Kenya keen to monopolise the LPG business in Kenya,” the association said in a statement. “This decision is already having a major impact on Tanzanian LPG companies since these companies trade a large part of their volumes with their Kenyan counterparts. This ban will affect Kenyans as it will allow select firms to operate in a monopolistic set-up.” The traders say they can readily supply the Kenyan market. “The LPG cost in Mombasa is much higher than in Dar es Salaam. Monopoly and protectionism have pushed prices up in Mombasa. The main reason why LPG from Dar es Salaam or Tanga is cheaper is because the offloading and storage infrastructure at these two ports is more efficient. Firms in Kenya have higher storage unit costs due to facilities like floating storage, which...

Kenya has lifted restrictions on wheat flour and cooking gas imports from Tanzania, which has in turn allowed milk and cigarettes from Kenya. The countries’ Foreign Affairs ministers said in Nairobi on Sunday that the move followed discussions between presidents Uhuru Kenyatta (Kenya) and John Pombe Magufuli. “The Republic of Kenya and the United Republic of Tanzania will lift any other restrictions that affect products and services exchanged between the two countries,” they said in a statement read by Tanzania Foreign Affairs minister Augustine Mahiga, who is also in charge of the East African Community Affairs docket. Kenyans will however still have to apply for visas when travelling to Tanzania for business, though Mr Mahiga said they were looking into the issue. “If there are still some bottlenecks, we are pledging to address them to allow our citizens to travel easily,” he said. The two countries would continue to man border posts jointly while the production of an East African Community (EAC) passport would help ease movement across the states, he said. Committee The two countries also agreed to set up a joint technical committee chaired by the Foreign Affairs ministers and comprising the EAC Affairs, Trade, Finance, Interior, Energy, Agriculture, Transport and Tourism ministries and any other relevant government agency. Kenya banned the importation of cooking gas from Tanzania in April, with the Energy ministry at the time saying the move was meant to curb the proliferation of illegal filling plants. Petroleum Principal Secretary Andrew Kamau said at the...

Dar es Salaam. Economic incapability, poor quality of agricultural produce, low quantity of productions and untimely delivery of goods are challenges prohibiting Tanzanians from benefiting from the Foreign Direct Investment (FDI). Opening a day long roundtable discussion on local content development in the country's agriculture and minerals; status and opportunities on Thursday, National Economic Empowerment Content (NEEC) Acting Director of local content Ms Esther Mmbaga, called upon stakeholders to collaborate in addressing the challenges. "The government should create conducive environment for citizens to benefit from FDIs. Investors and the private sector should also take part in building capacity of the people in terms of technology and skills," she said. In her welcoming remarks, the Science Technology Innovation Policy and Research Organization (STIPRO) Executive Director, Dr Bitrina Diyamett said, the discussion was called as a result of a study on local content which established its emphasis in the Oil and Gas subsector alone. The discussion on how Tanzanians benefit on local content comes a time President John Magufuli has accented into law three mineral laws passed by the Parliament last month which will ultimately subject various mining contracts into review. Source: The Citizen

THE increased usage of natural gas instead of oil for power generation has contributed to the decline of the value of imported fuel. According to the Bank of Tanzania (BoT) monthly economic review for June, the value of oil imports, which constitutes the largest share in goods import, fell by 309.3 million US dollars to 1,852 million US dollars. Tanzania is executing power projects at Kinyerezi that make use of natural gas for power generation. Currently, the Kinyerezi II gas power project is progressing where by mid next year 240 megawatts will be entered into the national grid. The value of imports of goods and services amounted to 9,738.8 million US dollars in the year ending May 2017, about 6.6 percent lower compared with the import bill for the year ending May 2016. Much of the decrease was noted in oil and capital goods. Capital goods import declined partly due to the completion of major projects and exploration activities. However, the value of imports of food and food stuffs went up by 13.9 per cent to USD 480.2 million, owing to an increase in import of sugar and cereals. Services payment in the year ending May 2017 was 1,974.8 million US dollars compared with 2,577 million US dollars in the year ending May 2016, largely due to decline in travel and transportation payments. Travel payments fell by 36.6 per cent, while payments under transportation declined by 11.8 per cent. The decline in transportation was consistent with the fall in goods...

rwanda continues to look for new export markets besides encouraging local consumption under the Made-in-Rwanda campaign initiated by the Ministry of Trade, Industry and East African Community Affairs and the Private Sector Federation (PSF). These are some of the initiatives that seek to widen the country’s exports, support local manufacturers and help reduce the growing import bill, as well as give the Made-in-Rwanda products a competitive edge in the local, regional and global markets. This, however, challenges the private sector, particularly manufacturers to understand market trends and improve their production capacity and quality supported by the good investment and business environment in the country. Manufacturers should have knowledge about the trading systems in target markets to promote their products effectively and also be able to negotiate better prices. Benjamin Franklin once said, “Failing to prepare, you are preparing to fail” and one will never get a second chance to make a first impression. Therefore, it’s crucial for Rwandan manufacturers to understand this to be able to penetrate and access new export markets in a competitive manner. In today’s fast-changing world, market entry is facilitated by knowledge on the prevailing market trends and dynamics, skills and competitive products. That’s why strategic marketing and making of informed decisions, which are in line with market demand, could further support the Made-in-Rwanda goods, locally and in other markets. The drive, that targets to boost and stimulate local production, consumption and support the industrial sector, will play a key role in the country’s import substitution...

cross-border women traders have called on the government to support them and also improve the trading environment. The women traders operating between Rusizi-Bukavu and Rubavu-Goma border posts say corruption, sexual harassment and inadequate operating capital are affecting businesses. Janet Mukamunana, a member of Icyerekezo Cyiza Cooperative that sells tomatoes and onions, said these challenges have affected business growth and their earnings. As a result, we cannot compete with traders from the DR Congo who deal in similar products, she said during a recent tour of the cooperative by the Rusizi District leaders. According to their cooperatives, small-and-medium enterprise (SME) owners doing cross-border trade also face sexual harassment and lack facilities like early childhood development centres to support them while doing their businesses. Corruption and harassment are reportedly experienced while in the DRC. The over 200 traders working under the Tushiriki Wote project initiated by International Alert and Reseau de Femmes, a non-profit that supports women traders, say they cannot access finance as they don’t have collateral. Most of the women cross-border traders operate small businesses, like selling fish, tomatoes, milk, and other types of fruits. the Tushiriki Wote project is helping the cross-border women traders to overcome some of these challenges, and also build their capacity through training programmes in business management and entrepreneurship so that they can be able to manage their enterprises properly. Betty Mutesi, the International Alert country director, said it is important to empower cross-border women traders, noting that this helps reduce dependency on their husbands...

The International Finance Corporation (IFC) and the Global Agriculture and Food Security Programme (GAFSP) are going to launch smallholder farmer financing programmes with the United Nations World Food Programme (WFP) to improve food security among vulnerable people in Rwanda and Tanzania. The initiatives with KCB Bank Rwanda and CRDB Bank in Tanzania are part of the Farm to Market Alliance, a multi-stakeholder platform established in 2016, of which IFC and WFP are global members, to create agriculture value chains that secure sizeable local and international demand for produce from smallholder farmers, according to a statement from the two organisations. The alliance is designed to create systemic change in markets through a holistic approach to smallholder development. This approach, which is sustainable and commercially viable, benefits individual farmers and broadens the global supply base of agricultural produce to meet increasing demand. “Smallholder farmers produce most of the world’s food, but they form the majority of people living in poverty and often have food security challenges themselves,” said David Beasley, the WFP executive director. “We want to help them get better access to markets so they build more demand for their products, thus making a long-term impact on the economic future for them and their families. But WFP can’t do it alone, and that’s why we are grateful for our collaboration with others through the Farm to Market Alliance.” Philippe Le Houérou, the IFC chief executive, said agribusiness drives many African economies and creates the most jobs on the continent. “Through the...

Trade minister Amelia Kyambadde has said no payment will be made until traders who supplied goods and services to the government of South Sudan are verified. Ms Kyambadde said her ministry will write to the ministries of Finance and Foreign Affairs to avail a report of confirmed traders to be catered for. She added that they will also write to the Speaker of Parliament Rebecca Kadaga to halt the process regarding the matter. “We cannot run away from you traders when they have unfinished business. Ten years of suffering is too much for one’s business to be affected. We are going to do our part to ensure that all the processes are properly done,” the minister told a group of aggrieved traders who met her in Kampala recently. Ms Kyambadde’s remarks followed the traders’ outcry, led by Ms Joan Akello, in which they demanded for equity in the impending payment process. The traders told the minister that the ministry of Finance plans to first pay off only 10 companies out of the 32 which were verified, with a reported $41m (Shs150b) having been earmarked for the purpose. They alleged that the 10 companies lined up to be paid are owned by four persons who are colluding with officials at the ministry of Finance. In a March 22, 2016 letter, President Museveni directed the Finance minister to study how government could raise money to rescue the business persons who supplied goods to South Sudan. “…then, the government can continue with its...