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A case for small-scale cross-border trade as a tool for East African Integration.

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A case for small-scale cross-border trade as a tool for East African Integration.

Charles Achieng. 

The treaty for the establishment of the East African Community generated institutions and structures that have not only enhanced and energized regional economic growth and integration but also brought tangible and realistic gains to the small-scale, also known as informal cross-border traders.

In a 2014 report, Bank of Uganda defined small-scale/informal cross-border trade as transactions carried out between residents and non-residents across the economic boundaries of two or more countries that are not recorded by Customs Authorities.

Cooperation in trade liberalization and development have seen the establishment of Trade Regimes, Customs Union and Common Market protocols whose components have impacted positively and tremendously on socio-economic transformation and sustainable economic growth of the region.

With the region subscribing to COMESA-EAC-SADC Tripartite Free Trade Area, cross-border traders have the opportunity to a market access of over 600 million people from the 24-member states that have committed to this agreement. This is both incredible and commendable.

A United Nations (UN) report done in 2015 and published in May 2017 puts Kenya’s unemployment rate at 39.1 per cent among the population of working age, with Uganda claiming over 20 per cent.  A substantial number of this continues to be absorbed in smallholder cross-border trade, with a good percentage plying trade between Kenya and Uganda through the Busia One Stop Border Post (OSBP). Busia OSBP has the highest number of informal cross-border traders in the East African Community.

The actualization and realization of enhanced economic and social relations through intra-trade while widening and deepening cooperation among EAC partner states in political, social and economic field would have been served on a silver platter with recognition and appreciation of the role played by small holder cross-border traders – who move small volumes of goods several times and by many players across the border but always informally through unofficial and porous points.

Comesa initiated structuring of small scale informal cross-border traders with an objective of providing facilitation services and relevant trade information to traders crossing the border. Being a key component of trade support initiative, Comesa established Trade Information Desks (TIDs) in some of the OSBPs operating on Simplified Trade Regime (STR) without sustainable measures. OSBP committees in Busia have managed to facilitate the Trade Information Desks (TID) and Cross Border Trade Associations(CBTAs), and have officers who render services to small cross-border traders almost 24 hrs.

Trade Information Desks and Cross Border Trade Associations.

Trade support services provided by Busia Trade Information Desks and Cross-Border Traders Associations have seen 9,674 small scale traders transform and use STR-enabled structures, moving some 5,523 women small scale cross-border traders into formal trade.

This has been achieved by disseminating relevant trade support information and providing trade support services such as customs and border procedures; common traded goods (import duty free); women rights in trade; non-tariff barriers; market linkages; formalizing trade groups; guiding traders in filling customs and immigration documents and recording and reporting incidences of illegal and/or unfair treatment of traders, such cases of corruption, harassments and any forms on non-tariff barriers. The other interventions include providing information on accommodation, transport and any essential services; providing administrative services to CBTAs and small traders in terms of access to internet and e-trade services, printing, photocopying, emailing; obtaining market prices for commonly traded products; preparing monthly and quarterly reports for use by cross-border trade associations, EAC, Comesa and governments and many more cross border trade support services.

Sustainable provision of these important and crucial trade support services could be ensured by acknowledging and embracing the roles played by small scale cross-border trade, enhancing facilitation and empowerment of Trade Information Desks and Cross Border Traders’ Associations.

Busia OSBP Trade Information Desks (Kenya &Uganda) are managed by four volunteer Officers, some since the Year 2011.

 

2014 Uganda Informal Cross Border Trade Report by Bank of Uganda.

Uganda’s Informal Exports.

DR Congo was the leading informal exports destination during 2014, with exports from Uganda estimated at $139.5 million representing a 33.6 percent share of total informal exports receipts. South Sudan followed with $119.5 million (28.8 percent) which was lower than $130.8 million (31.1 percent) registered in 2013. Exports to Kenya amounted to $92.9 million (22.4 percent) compared to $69.7 million (16.5 percent) recorded in 2013. Rwanda and Tanzania followed in that order representing 5.9 percent and 5.6 percent of informal exports in 2014 respectively.

Informal exports to most of the neighbouring countries decreased significantly during 2014 except for Kenya and DR Congo which recorded growth of 33.3 percent and 3.3 percent in 2014. Tanzania recorded consecutive and significant declines of 9.9 percent and 45.9 percent in 2013 and 2014 respectively. Similarly, informal exports to Rwanda declined by 11.9 percent, while those to South Sudan and Burundi declined by 8.7 percent and 1.2 percent respectively.

Uganda’s Informal Imports.

Kenya continued to be the leading source of Uganda’s informal imports during 2014 with informal imports worth $30.8 million, accounting for 46.7 percent of total informal imports in 2014. This was higher than the estimated value of $26.5 million recorded in 2013. DR Congo ranked second, with imports amounting to $21.3 million (32.4 percent of the total) compared to $17.7 million (33.0 percent of the total) recorded in 2013. The other remaining countries Tanzania, Rwanda and South Sudan had a combined import bill of $13.7 million (20.9 percent of the total) during 2014, compared to $9.4 million (17.6 percent of the total) recorded in 2013. It should be noted that Uganda’s informal imports from Rwanda and South Sudan declined in 2014. However, in the same year, the informal imports from DR Congo, Kenya and Tanzania increased significantly.

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The writer is the chairman, Busia, Kenya Cross Border Traders Association.

busiakcbta@gmail.com

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More Cheaper Megabytes Promos are Sexy, But A Daring Eye on Quality of Service is still Critical.

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More Cheaper Megabytes Promos are Sexy, But A Daring Eye on Quality of Service is still Critical.

Innocent Kawooya.

Africa is not just a mobile first continent where access to data services by majority of the citizens is on mobile, but Africa is a mobile only continent because over 95% of the Internet access is over mobile networks and consumer mobile phones.

Given this reality, data services is a frontier for mobile telecoms growth and will continue to make a significant part of the telecoms balance sheet. Also considering the importance of Internet access as a “human right” and knowing the considerable financial benefit it would bring service providers, we are seeing a race to market the best Internet speeds. In many markets such as Uganda and Tanzania we see a stiff price competition among the operators. Many “sexy” more megabytes promos are all over our living rooms on tv, on the billboards and everywhere you look even as some are masquerading to offer 3.75G and other talking 4G/5G.

Long Term Evolution (LTE) considered a 4G technology has started setting ground on the continent and Uganda is not an exception.  This is good for Internet in Africa and these high Internet speeds are sexy but that known, more affordability and good quality of service is still critical.

Affordability of Internet in Uganda.

Speed alone is not enough to bring the massive social and economic benefit of Internet to the Africa continent on wide scale. In Uganda until recently, telecom operators have had data packages that arguably were still on the high side for the average Ugandan to consume more Internet services. This is starting to change with the playing field seeing more operators offering 3G services at much more reduced rates compared to how it was 2-5 years back. On the daily going by the 2018 quarter one data services market prices, for less than USD 1.5 (about 5000 UGX), a Ugandan is able to access 1GB of data. That same volume of data cost over USD 5 some 5 years back. As such, we can confidently say Internet services have become more affordable. Nevertheless, there is room to improve to make this 1 GB and cost per megabyte even more affordable if we compare with other countries such as Tanzania. Tanzania has lower mobile data cost as it reaps the benefits of the rollout of 3G/4G networks and intense competition from numerous operators. In Tanzania 1 GB costs TShs2000 approximately USD 0.89. The same should happen here.

Is Internet Speed the Most Important Factor?

4G, LTE very high-speed technologies are good but they are not the ultimate thing to bring more Internet to more Ugandans and Africans. With many Africans and Ugandans having phones that cannot make the best use of 4G LTE technologies, it remains that the factor of great importance to Internet access is affordability. Africans using starter smartphone which cost between USD 20 to 70 should have more affordable data packages that would propel them to consume the barging information and content that is being generated and transmitted over the Internet.

Very high speeds such like LTE are good for the current few that can afford iPhones and Samsung Galaxys but if Africa will fasten the growth of big mobile Internet market, among the issues to address, rocket fast speeds as some telecoms market them arguably comes second/third to affordability in importance. Network Operators, should nurture the masses to consume more data service by prioritizing their efforts on lowering data costs and then they can boost of rocket fast speeds with pleasure.

But how is the Internet Quality of Service?

In this day and age, data customers are searching for an enriched multimedia experience from the telecom providers. The Uganda operators are largely advertising enhanced data networks with some stating that they are offering 4G. Essentially, we would expect users of these services to have faster data services, browsing & searching & reading email will happen in very few seconds, streaming of video would be top notch fast (if you are on the right device). Despite the recent trends of the said improved networks, Quality of Service (QoS) that determines the degree of satisfaction of a user of the service is still derailing Uganda operators.

Quality of service (QoS) is the description or measurement of the overall performance of a service, such as a telephony or computer network or a cloud computing service, particularly the performance seen by the users of the network. Service quality in the Internet can be technically expressed as the combination of network-imposed delay, jitter, bandwidth and reliability.

Delay is the elapsed time for a data packet to be passed from the sender, through the network, to the receiver whereas Jitter is the variation in end-to-end transit delay.  High levels of delay and jitter in applications are unacceptable in situations where the application is real-time based, such as an audio or video call.  For interactive voice, video applications and gaming, high delay and jitter causes the system to appear unresponsive so customers that try voice over the Internet, WhatsApp/skype calls will feel a very bad experience and thus may not effectively use the purchased MBs which then would be expired by end of day and in all cases returned to the telecom revenue books.

Bandwidth is the maximum data transfer rate that can be sustained between two end points. Bandwidth is not limited only by the physical infrastructure of the traffic path within the transit networks, which provides an upper bound to available bandwidth, but is also limited by the number of other flows which share common components of this selected end-to-end path. Whereas in theory network bandwidth has increased, in practice and given the known customer complaints, the current bandwidth is not proportionate to the number of users in some areas, leading to over shared use of the Internet pipe in the last mile between the mobile phone and base station. This is felt by customers with greatly reduced speeds contrary to what is advertised.

Reliability and availability of service is commonly conceived of as a property of the transmission system, or switching system, in that a poorly configured or poorly performing switching system will be unreliable. In Uganda’s setting, there is more infrastructure problems that impact availability of service. They include power outages, network cable cuts and downright poor service providers that have not put in place proper mitigation approaches for known infrastructure risks. Based on UCC reports, there have been many reported incidents every other day of customers that purchase data bundles but end days without any Internet service due to the unreliability and unavailability of service or where data volumes have suspiciously been depleted from customer account.

As thus, while we see and welcome the more cheaper megabytes promos, the increased investment in Internet infrastructure and the reduced prices, more should be done to improve affordability in totality. Equally important Quality of service is something that needs all stakeholders and consumer protection organs to have a daring eye for if we are to have a sustained and mutually beneficial growth of Internet penetration and usage in Uganda and across Africa.

Before I forget, the rains are back, and the planting season is on.

The writer is the CEO of HiPipo (U) LTD.

ceo@hipipo.com

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Q1 Review : Price Wars, Mobile Money Fraud take Toll on Telecom Sector.

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Q1 Review : Price Wars, Mobile Money Fraud take Toll on Telecom Sector.

Our Reporter.

As is everywhere in Uganda’s business environment, the first two months of 2018 have not been rosy for the telecoms sector.

It is increasingly becoming clear that MTN Uganda and Airtel and entangled in a war of prices for both data and voice services.

On the side are smaller players trying to survive in a high operation-cost environment. While the likes of Africell are fighting on, it is increasingly likely that Smart and K2 telecom are quietly bowing out of business while Afrimax has officially kicked off an insolvency process.

In February, Afrimax (Vodafone) filed for bankruptcy, having failed to break even in Uganda’s highly competitive telecoms industry.

On February 15, Vodafone posted a statement on their website, www.vodafone.co.ug , announcing a Provisional Administrator Manager.

“Dear customers, this is to inform you that the directors of Afrimax Uganda Limited T/A Vodafone Uganda recently appointed a Provisional Administrator Manager, Mr Donald Nyakairu, who has been charged with restructuring and reorganizing the company in a bid to improve commercial and operational efficiencies.”

In the interim transition period, the statement added, customers will experience a temporary deterioration in the quality of network services as the Administrator implements the required changes and negotiates with suppliers.

“We apologise in advance for any disturbances and inconveniences caused and reassure all customers that any unused data will be reimbursed once our network is fully restored,” the statement read further.

Afrimax entered the Ugandan market less than four years ago, with a specialization in data provision.

Unfortunately, there was hardly room in the market and the company could hardly penetrate the data market. The cost of doing business was unbelievable and company struggled with very few customers.

Experts have attributed Afrimax’s demise to an unfair playing ground where bigger companies have used price wars to crowd out smaller firms.

Just as has been the case, Uganda has a duopoly (MTN and Airtel) when it comes to provision of telecom services. It is increasingly becoming impossible decision for any new telecom company to enter Uganda’s telecom market under the current conditions.

For instance, while the likes of MTN and Airtel have a nationwide coverage, Vodafone only operated in greater Kampala.

PRICE WARS.

Price wars were first introduced by Warid Telecom (now Airtel) in the late 2000s with their pakalast packages.

This trend has since gone on to spread in to the data market with big players Airtel and MTN fighting to outprice each other in what is becoming a two-horse race.

At the start of this year, Airtel announced a 3G network countrywide upgrade that will cost over Shs 180 billion. On the same day, it introduced on to the market a new internet proposition in which it cut data bundle prices by more than 50 per cent.

“Currently, 154 new sites are being rolled out. An additional 165 sites are under implementation with an objective to enhance rural capacity and coverage thus providing an unmatched internet experience to our customers. We also have the new ‘Data Blasta’ bundles priced to meet the different needs of all Airtel customers, whether daily, weekly or monthly,” VG Somasekhar, the Airtel Uganda managing director said.

In February, MTN responded in equal measure as it slashed its data rates by ‘over 100 per cent’.

“What we are currently witnessing is data revolution coming into full swing. The reduction in pricing is by 100%, indicating our commitment towards internet Connectivity and affordability for all,” said Wim Vanhellaputte, MTN Uganda CEO, while launching the data promotion.

“It is important that our customers not only get lower rates, but also experience a good quality network – where we are keen to continuously invest; everywhere. MTN Uganda over a two year period of 2017 and 2018 has budgeted over Shs 400 Billion invested in network upgrades in order to improve customer experience,” he added.

As one expert said, in the long run, we are likely to see both MTN Uganda and Airtel Uganda have the same prices, although this might not be intentional, as they try to maximize profits.

Away from these two market leaders, Africell continues to compete for the data market with its Don’t Be Cheated data product growing in popularity among the young and youths thanks to its lowered pricing too.

And this state of affairs only spells doom for the likes of Afrimax who do not have the capacity and reach of the big boys in the sector. Their only option is closing shop, unfortunately!

MTN Uganda CEO Wim Vanhelleputte (left) addresses the media at the MTN CEO Briefing held at MTN Towers on Tuesday 20th February 2018.

MTN PULSE

To tap into the youthful generation, MTN introduced MTN Pulse recently. MTN Pulse is described as a community built for the young Ugandans to give them the power to be themselves, unleash their full potential and live life with #NoFear.

Through this initiative, MTN looks to empower the youth, with data bundles, music streaming, video uploads, games and career placement and advice among others.

One can join this community by simply dialing *157# and follow the prompts, or by visiting the MTN Pulse website to register.

Vanhelleputte, MTN’s chief executive officer, said that the brand is as old as most of the young population in the country, a reason for the decision to customize products and solutions that are appealing to the youths and those that they can identify with.

“Young people want to be creative. They want to communicate. The Fear Of Missing Out – FOMO can be real. MTN Pulse will be able to allow them do gaming, listen to music, create sharable video content, get the latest updates to parties and offer data bundles that suit all their plans,” he said

Olivier Prentout, the Chief Marketing Officer for MTN Uganda, stated that for the first time ever, there will be a weekend bundle that can only be accessed through the Pulsers community code of *157#.

“We understand that the weekend is filled with activities that must be shared. Those moments can now be shared with an affordable youth friendly weekend bundle,” he said.

The launch of MTN Pulse marked the conclusion of a month-long teaser campaign called #NoFear.

During the campaign, MTN had several of its billboards in Kampala ‘defaced’ and sprayed with the words #NoFear in what was viewed as a bold, fearless act of expression, which are desirable traits sought in the Pulsers’ movement.

Whether MTN Pulse will be impactful remains to be seen as its predecessor – MTN Holla Life; even with its unmatched offering, had a premature death.

AIRTEL SUED FOR 13BN

Still this year, Airtel has been dragged to court for allegedly failing to pay commission worth more than Shs13.5 billion to a businessman who brokered the sale of Warid Telecom to Airtel.

In the case before the Commercial Court, Mr Wissam K. Fawaz contends that $3.7m (Shs13.5bn) amounts for two percent of $186.4m (Shs676.4bn), the value of Warid telecom’s assets in Uganda that were acquired by Bharti Airtel Limited.

Through his lawyers, Mr Fawaz is also claiming for the interests at a rate of 10 percent per year from May 2013 till full payment, general damages and legal costs incurred.

Fawaz says he brokered the sale of Warid to Airtel and deserves his share which was agreed upon during negotiations.

According to media reports, Airtel was summoned on January 3, 2018 to file its defence within 15 days upon receipt of the complaint.

But on January 5, Airtel Uganda Limited wrote to the lawyers of MMAKS Advocates declining service of court documents, because the company is neither an appointed agent of Bharti Airtel Limited nor party to the court proceedings nor indebted to Mr Fawaz.

MTN License back and forth.

Application for renewal of a National Telecommunication License by MTN Uganda Limited continues to be discussed at length. While it is expected that MTN’s license will be renewed considering the telecom’s massive contribution to Uganda’s development, several issues continue to come up that MTN just like other telecoms must urgently address.

“The Commission shall issue to MTN Uganda Ltd an Evaluation Report on or before the March 13, 2018 and the same shall be a matter of public record at the Commission. A public hearing shall be conducted on Monday, March 26, 2018 at the Uganda Communication Commission’s Conference Hall, located at Plot 42-44, Spring Road, Bugolobi, Kampala starting at 10:00am,” UCC recently noted.

Mobile Money and Sim-Card Registration Fraud.

While all this is happening, the biggest elephant in the house for telecoms is Sim Card registration and swapping problems that grow by the day. Several reports of criminals using sim cards to defraud unknowing customers including members of parliament and ministers are on the increase. But that is not all, criminals are using registered sim-cards to ‘kid-nap and harm’ Ugandans.

In the face of these challenges, Uganda Communications Commission (UCC) has since issued strict instructions to all sector players on how to mitigate mobile money fraud and issues related to sim-card registration. This issue is expected to top telecom discussions in the second quarter of 2018.

Send any feedback to; socialweb@hipipo.com

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Q1 Review: Banking Sector Performance over-shadowed by BOU reshuffles and court cases

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Q1 Review: Banking Sector Performance over-shadowed by BOU reshuffles and court cases

Our Reporter.

The biggest occurrence in the banking sector were the eye-catching changes at Bank of Uganda in February, with the most prominent one being that of executive director for supervision Justine Bagyenda being sent to early retirement.

Bagyenda had been in the news especially about her role in the closure of Crane bank.

She was replaced by Dr Tumubwinee Twinemanzi, who has been serving as the director of industry affairs and content at Uganda Communications Commission (UCC). Twinemanzi has a PhD in economics from University of Texas.

The fraud at Crane bank happened while Bagyenda was directly responsible for supervision. Some observers have said she slept on the job, although the closure of the bank went on smoothly with no depositor losing their money.

Some observers have said, the Crane bank saga could have instigated most of the changes in the supervision department that led to Bagyenda’s exit.

Writing in the press last year, Mutebile said: “No one in BOU believes that its supervision is perfect and cannot be improved. We will learn from the failure of Crane bank and strengthen our capacities and procedures for supervising banks. If mistakes were made, we will acknowledge this and ensure that they are not repeated in future.”

He added: “I strongly reject the allegations that my staff committed collusion or criminal offenses in the supervision of Crane bank, which have been made in some quarters without a shred of evidence to support them.”

While IGG Irene Mulyagonja tried to stop Bagyenda’s transfer, Mutebile wrote to her telling her not to tell him how to run Bank of Uganda and its affairs.

CBR REDUCED.

A February 13, 2018 monetary policy statement by governor bank of Uganda Emmanuel Tumusiime-Mutebile, reported that annual headline and core inflation declined to 3 percent and 2.6 percent in January 2018 from 3.3 percent and 3.0 percent respectively in December 2017.

He attributed this to low food prices, as annual food inflation declined to 2.7 percent in January 2018 from 3.5 percent in December 2017.

For Electricity, Fuels and Utilities (EFU) the annual inflation rate also declined to 9.8 percent from 12.5 percent in December 2017.

He, however, noted that people’s ability to borrow money from commercial banks remained below historic levels and that the cost of credit remains relatively high for micro and small loans.

He reported that inflation is forecast to increase gradually, as the economy strengthens.

“Given the objective of keeping inflation close to the target and the estimated spare capacity in the economy, a cautious easing of monetary policy is warranted to further boost private sector credit growth and to strengthen the economic growth momentum,” Mutebile wrote.

As a result, BoU reduced the Central Bank Rate (CBR) from 9.5 per cent to 9 percent.

“Consequently, the rediscount rate and the bank rate have been reduced to 13 percent and 14 percent respectively,” he said.

Despite this, most commercial banks have maintained their lending rates at not less than 18 per cent due to the volatility of the sector.

Sudhir sues DFCU for rent arrears.

It is now a year since dfcu bank inherited assets and liabilities of Crane bank, but the ride seems to be far from smooth.

Just last month, through Meera Investments Limited, former Crane bank boss Sudhir Ruparelia dragged dfcu to court claiming they owe him Shs 32bn plus interest for breach of tenancy agreements in respect to Plot 38 Kampala road (former Crane Chambers) and Plot 40A on Kampala road.

On account of being the successor in title to Crane bank (in receivership), dfcu expressly inherited all tenancy agreements and, therefore, “assumed the rights and obligations under the tenancies in respect of the suit properties.”

Sudhir says dfcu have failed to meet this rent obligation.

The case stems from a December 16, 2014 tenancy agreement in which Meera Investments let out the basement, ground, 1st, 2nd, 3rd and 7th floor of Plot 38 Kampala road (Crane Chambers) and all of Plot 40A Kampala road to Crane bank for a period of 10 years.

“Under clause 3(c) of the tenancy agreement, it was specifically agreed by the parties (Crane bank and Meera) that the tenancies shall remain firm and binding on them until the expiry of ten years,” reads part of the plaint filed by Meera.

In the above tenancy agreement, Crane bank would pay $46,980 (Shs 171m) in rent and $46,980 (Shs 171m) in ground rent per month with a seven per cent annual increment for Plot 38 Kampala road and $9,890 (Shs36m) in rent and $9,890 (Shs 36m) in ground rent for Plot 40A Kampala road. Both rents were payable a year in advance.

According to media reports, at the time of the takeover, dfcu inherited the entire premises previously rented by Crane bank and rebranded the entire premises. Dfcu also undertook to pay to Crane Management Services (managers of Meera) $531,000 (Shs 1.93bn) in restoration costs and arrears in utility bills.

According to the Meera plaint, Dfcu, in February 2017, entered into a revised contract in “respect of the basement and ground floors of Plot 38 Kampala road for a fixed period of three years.”

Dfcu, however, reportedly continued to occupy 1st, 2nd 3rd and 7th floors of Plot 38 Kampala road and Plot 40A Kampala road “under the terms and conditions of the tenancy agreement dated December 16, 2014” until April 30, 2017, when it opted to vacate them.

For Meera, this constituted a breach of clause 3(c) of the surviving tenancy agreement, that covenanted that the “tenancies shall remain firm and binding on them until the expiry of ten years” and for this breach, dfcu is “liable to pay the plaintiff the sum constituting rent for the unexpired period of 84 months being $8,660,462.34 (Shs 31.6bn).”

Meera, read Sudhir, now wants this money plus interest “at the prevailing commercial rate from the date the defendant was in default until payment in full.”

RETURN PROPERTIES

In the same vein, Sudhir sued dfcu in December last year seeking an order to dfcu to return 42 properties currently occupied by the bank.

He alleged that dfcu and the commissioner for land registration illegally took possession of his 42 properties, initially Crane bank branches, currently occupied by dfcu.

On their part, dfcu are reportedly adamant that they will hold onto the properties of both banking and undeveloped land that they took over from the Crane Bank Limited now under receivership.

Dfcu, whose asset base has since grown to three trillion shillings up from 1.8 trillion shillings since the takeover of the Crane assets, says the Crane bank acquisition, through Bank of Uganda, was legitimate.

According to dfcu, they legally paid stamp duty on each and every one of the transfers of leasehold certificates of the titles of these properties, executed in its favour, worth Shs 41.8bn.

How this drama unfolds remains to be seen as the year progresses.

DFCU STARTS BANCASSURAANCE

On a positive note, dfcu has started offering a wide range of insurance products, including motor vehicle cover, fire and burglary, Child Education, goods in transit and so much more after the Insurance Regulatory Authority of Uganda granted them a license to offer bancassurance services. DFCU now joins Stanbic and Barclays Bank; the other banks offering Bancassurance in Uganda.

As a bancassurance agent, dfcu bank now has greater flexibility to provide a more wholesome financial service tailored to customer needs.

Some of the insurance covers that will be offered will include investment clubs, salary protection, hospital, among others.

Through these covers, the bank’s customers will be able to access medical insurance, life insurance, funeral and related expenses insurance.

BOU ACT TO BE AMENDED

In January, Cabinet resolved to amend the Bank of Uganda (BOU) Act of 2000 to update the Central Bank’s objectives and functions to reflect the changing mandate and roles of a central bank

The ICT and National Guidance minister Frank Tumwebaze told the media that government had authorised the Finance ministry to issue drafting instructions to the first parliamentary council to have the amendment bill drafted and then tabled to Parliament for discussion.

Tumwebaze said the amendment seeks to ensure effective implementation of the requirements of the new national legislation and regional commitments.

He added that the amendment also seeks to strengthen the provisions in the current Act provisions that are considered inadequate in the changing environment.

CENTENARY TO FINANCE AGRICULTURE

In an unusual move, Centenary Bank has this year allocated Shs 500bn to boost agriculture financing.

This was revelaed by the bank’s head of agribusiness and agricultural finance, Evans Nakhokho.

Nakhokho, who was speaking during the 16th African Fine Coffee Conference and Exhibition in Kampala on February 15, said the bank is ready to finance all the agricultural activities along the value chain.

This came barely a month since the Uganda Agribusiness Alliance released its 2017 report on agriculture financing noting that majority of the population who need the agriculture funds are yet to have access despite increased allocations by government, private players and the donor community towards Uganda’s agriculture financing.

Banks have always shunned agriculture financing citing the high risks involved such as unpredictable weather patterns and lack of financial discipline by farmers.

URA, Stanbic launch online tax payment platform

In another development, Uganda Revenue Authority and Stanbic Bank launched an online platform on February 5 that makes it possible for taxpayers to make payments using bank cards and mobile money.

The platform is on the URA website and is available to both Stanbic and non-Stanbic customers. It allows taxpayers to meet their obligations using a debit or credit card (Visa and Master Card) or with MTN mobile money.

It was reported that over Shs74m was collected by URA through the platform in its testing phase that ran from December 1 2017 to 31 January.

Additionally, URA has collected over Shs4.5bn through similar e-payment platforms, the first of which was launched in March 2017.

The new platform is expected to reduce time and costs in tax payment activities, thus eliminating compliance obstacles.

Other payment solutions that have been launched by URA include mobile point of sale terminals on the PayWay network, MTN mobile money, a real time gross settlement system, and electronic funds transfers.

Send any feedback to; socialweb@hipipo.com

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Introducing MONEY Magazine

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Introducing MONEY Magazine

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Dear Comrade,

This is the debut issue of Money – a quarterly business magazine.
Money magazine is the latest and most authentic voice of Businesses; telling Uganda and East Africa’s business stories like no one has done before.
In every edition, we shall have Business news, Sectorial reviews, Exclusive interviews, Special reports on Financial Inclusion, Opinion and So Much More.
You can get your copy of Money magazine at UGX 20,000 or $7 USD only.
Money is a must read that you can’t miss!

#TDF2018 : Speech by Vice President, H.E Edward Ssekandi at the 2018 East African Trade Development Forum.

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#TDF2018 : Speech by Vice President, H.E Edward Ssekandi at the 2018 East African Trade Development Forum.

Derrick Kasasa.

The 2018 East African Trade Development Forum was hosted at Munyonyo Speke Resort from 28th February to 1st March. Here is the full speech by H.E Edward Kiwanuka Ssekandi, the Vice President of Uganda.

Ladies and Gentlemen,

You are welcome to the East African Trade Development forum 2018. On behalf of the Government and the people of Uganda, I extend a warm welcome to all of you and invite you to enjoy the hospitality of our Country.

We commend the good working relationship with our Development Partners in tackling the bottlenecks and the cost of doing business that hinder our export competitiveness.

I wish to thank the organizers of this trade development forum which is timely in assessing our trade facilitation journey and I reaffirm the Government of Uganda’s commitment to the EAC Integration agenda.

H.E Edward Ssekandi is ushered in to the 2018 EAC Trade Development Forum held at Speke Resort Munyonyo.

The forum provides an opportunity to share key milestones/ results achieved in our regional integration with support from our development partner Trade Mark East Africa in the past seven years. It will highlight their goals and objectives for the new six year strategy (2018 -2023).

In our EAC integration drive, we have made significant progress since the launch of EAC Customs Union in 2005 that include;

  • From 2006, EAC intra exports increased from US 1.07Bn to USD 1.22Bn Dollars by 2016 while the intra EAC imports increased from USD 1.07Bn dollars recorded in 2006 to USD 1.43Bn Dollars by end of 2016.
  • Establishment of the EAC Customs Union and the subsequent Common Market and Monetary Union that will come into force in 2023.

In the recently concluded EAC Summit of 23rd February 2018, whose theme was “Enhancing Social Economic Development for Deeper Integration of the Development of Deeper Integration of the Community,” we recommitted to the construction of 286 infrastructure projects over a ten year period and this will link the region.

As EAC Heads of States we have committed ourselves by 2025 to have upgraded 7,600km roads, laid 4,000km SGR, and increased the combined installed capacity of electrical power generation from 4245MW to 6734MW.

Hon Edward Ssekandi receives President Museveni’s gift at the 2018 EAC Trade Development Forum held at Speke Resort Munyonyo.

In additional, the region hopes to construct 3,000km of oil pipeline and an oil refinery, and improve efficiencies at the Mombasa and Dar es Salaam ports.

How is the performance of the region in improving the business / trade facilitation environment?

I note a reduction in the cost of doing business within the EAC countries from 2006 to 2015; as per the World Bank doing business statistics; costs to export and import for the EAC countries have reduced for the EAC countries.

  • Export costs per container for Burundi reduced from USD 6,742 in 2006 to USD 2,905 by 2015.
  • Export costs per container for Kenya reduced from USD 3,883 in 2006 to USD 2,255 by 2015
  • Export costs per container for Rwanda reduced from USD 5,154 in 2006 to USD 3,245 by 2015
  • Export costs per container for Uganda by end of 2015 stood at USD 2,800
  • Export costs per container for Tanzania reduced from USD 1,716 in 2006 to USD 1,090 by 2015

A number of trade facilitation initiatives have been undertaken with support of our development partners especially TradeMark East Africa.

Between 2010 and 2017, efficiency gains have been achieved at the ports and borders, and by revenue authorities in clearance of cargo and other agencies involved in the international trade clearance chain.

  • On the larger front, the average transport costs on the Northern Corridor have declined by an average of 48% from US$4.06/Km in 2010 to US$2.1/Km in 2017 while costs have declined by an average of 11% from US$3.37/km in 2010 to US$3.00/km in 2016 on the Central Corridor.
  • TMEA has invested in improving port efficiency in the Mombasa and Dar Ports. I am glad to report that there has been a 28% reduction in import time (11.6 days in June 2017 from 16 days in 2010) and 53% reduction in export time (6.8 days in June 2017 from 14.6 days in 2010) at the Dar es Salaam port.
  • TMEA has supported the implementation of the East African Single Customs Territory since 2014. Through these interventions, transit time from Mombasa to Kampala has been reduced from 18 to 4 days and from 25 to 5 days from Dar es Salaam to Kigali.
  • Automation of processing of key trade documents along the Central and Northern Corridors has contributed to the reduction of document processing time from an average of 79 hours (3.3 days) to 2 hours while the cost per transaction reduced from average of US$72 to US$10.
The 2018 EAC Trade Development Forum held at Speke Resort Munyonyo.

Other initiatives specific for Uganda that were implemented in partnership with TMEA over the last six years include;

  • Construction and operationalisation of the 3 One Stop Border Posts (OSBPs) at Busia OSBP with Kenya, Mutukula OSBP with Tanzania, Mirama Hills OSBP with Rwanda
  • Supported the establishment of Electronic single window that interconnects 16 border agencies and economic operators aimed at reducing the clearance time for international trade that includes imports, exports and transit.
  • Reduction of Non Tariff Barriers (NTBs) through the implementation of a web based NTB reporting system that is key in addressing the identified NTBs among the trade facilitating institutions.
  • Constructing a web based portal for export, import and transit information in Uganda.
  • Women in Trade – TMEA empowered women’s participation in intra-EAC trade through a number of interventions including the sensitization of 4776 women traders on EAC trade procedures.
  • In relation to Improving Business Competitiveness, TMEA has delivered a number of initiatives including supporting improvements in maize standards for farmers in pilot districts of Nakaseke, Masindi and Lira and Sesame standards.

As I conclude;

The Government of Uganda has enjoyed a productive partnership with TMEA and pledges to offer its support as TMEA embarks on its second phase 2018-2024.

I commend the Ministry of Works, URA, Ministry of Finance, URC, UNRA, Uganda Free Zones Authority and the Ministry of Trade, Industry and cooperatives for working closely with TMEA to deliver good results.

Special credit goes to Hon. Amelia Kyambadde for taking lead in the trade sector with TMEA.

We thank the Donors, TMEA CEO and TMEA Uganda Country program team for excellent results delivered.

For God and my Country.

VICE PRESIDENT, H.E EDWARD KIWANUKA SSEKANDI. 

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