CRDB Bank targets bigger pie of the blue economy proceeds in the Spice Islands

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Pemba. CRDB Bank yesterday opened a branch in Wete, Pemba as it seeks to play a role in supporting Zanzibar’s economic growth aspirations, particularly, through the government’s blue economy model.

Zanzibar President Hussein Ali Mwinyi graced the branch opening event, which also involved the distribution of over 272 motorcycles and 94 boats to economic undertakings owned by the youth and women groups in the Isles.

In February, this year, Zanzibar government and CRDB Bank signed an agreement that will have the latter disbursing Sh81.8 billion to stimulate economic activities in the Isles.

The package encompasses Sh60 billion that will be disbursed in form of interest-free loans to income-generating groups in Zanzibar while the remaining Sh21.8 billion will be allocated for improvement of the necessary infrastructure in the Isles that will enable the income-generating groups to conduct their undertakings in modern facilities.

CRDB Bank’s managing director Abdulmajid Nsekela said since February, the lender has already disbursed a total of Sh6.7 billion in interest-free loans to entrepreneurs in Zanzibar whereby Sh2.8 billion has gone to Pemba.

“I thank the government for entrusting us with the management of its Sh60 billion fund for loaning to SMEs under the blue economy model. This trust is what has led us to expand our branch network to Wete District in North Pemba,” Mr Nsekela said.

The beneficiaries include 6,178 women and 5,628 men.

The Wete Branch will offer both traditional and Islamic banking services.

The branch opening also saw the bank handing over Sh273.8 million to Shirikani, Umoja ni Nguvu and Mategemeo cooperative societies in the Isles.

In his remarks, Dr Mwinyi said the disbursement of the funds was in line with his campaign pledge of lifting lives of the people of Zanzibar through the blue economy model.

“We have promised and now we are implementing. As soon as I was sworn in, I asked banks to open more branches in Unguja and Pemba and CRDB Bank has been in the forefront of implementing my wish,” Dr Mwinyi said as he graced the opening CRDB’s Wete Branch in North Pemba along Mtemani Road at Sunda.

Tanzania: Dar Port Strengthens Regional Market Share

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SIGNIFICANT expansion and improvement of efficiency at Tanzania’s principal port of Dar es Salaam has enabled it to offer faster and cost-effective trade and transport solutions compared to other seaports in the region, a new report by GBS Africa has shown.

According to the dossier by the advisory services firm, Dar es Salaam Port is becoming a regional transshipment hub for exports and imports for both Tanzania and its land-linked countries in the East African Community (EAC) and Southern African Development Community (SADC).

“Land-linked countries like the Democratic Republic of Congo (DRC), Malawi, Uganda, Zambia, Rwanda, and Zimbabwe are increasingly opting for Dar es Salaam Port,” reads part of the report.

The report mentioned some of the products which are transported through the harbour as metals like copper as well as agricultural produce such as tea, coffee, tobacco, oilseeds, cotton, sisal, and cashew nuts.

The port of Dar es Salaam is one of three major ocean ports in Tanzania and handles over 95 per cent of the country’s international cargo traffic.

“Although it is smaller than Durban (South Africa) and Maputo (Mozambique), Dar es Salaam port is fast catching up on the market share for Indian Ocean commerce and trade,” the report stated.

The Dar es Salaam port is designed to handle more than 10 million tonnes of cargo annually including approximately four million tonnes of dry general cargo, six million tonnes of liquid bulk, and one million tonnes of containers.

An expansion programme namely Dar es Salaam Maritime Gateway Programme (DMGP) is being implemented by the Tanzania Ports Authority (TPA) to improve efficiency in handling cargo and will cost at least 421 US million dollars (about 968.3bn/-) upon its completion in 2024.

Commenting on the report, GBS Africa’s Managing Partner, Ms Agnes Gitau, said for the African continent to be fully integrated and for the vision of the African Continental Free Trade Area (AfCFTA) to be realised there is need to invest in Africa’s ports.

A separate report issued in 2016 by the United Nations Economic Commission for Africa (UNECA) pointed to the importance of sea ports in facilitating trade and investments in the continent.

“In Africa as with the rest of the world, the importance of seaports to trade, and therefore, to the continent’s economic performance cannot be overstated.

“Ports are crucial for trade of most African countries due to the continent’s high dependency on exports of raw materials and imports of food, manufactured goods and fuel,” UNECA said in the report.

According to the report by UNECA, more than 90 per cent of Africa’s total trade (including imports and exports) pass through seaports.

“This demonstrates the importance of having well-managed, transparent and efficient operations and management at Africa’s ports,” the report read in part.

While expansion projects and purchasing of modern equipment at the Dar es Salaam Port are ongoing, the government has also been eager to attract businesses and investment which in turn increases imports and exports through the country’s ports.

Since President Samia Suluhu Hassan assumed the country’s top office in March, last year, attracting businesses and investment has been among her top priorities.

The DMGP is carried out with funds from three sources, including a loan of 345 million US dollars from the World Bank, 12 million US dollars grant from the UK Government’s Department for International Development (DfID) and domestic revenues totaling 64 million US dollars.

Upon completion of the project in 2024 it would enable the Dar es Salaam Port to handle 25 million tonnes of cargo from the current capacity of handling over 10 million tonnes annually.

The port will also be able to serve big vessels with length of up to 303 metres which can carry 8,000 containers. That will position the port among ports with capacity and high efficiency in the East African coastline.

Cement firms on a roll despite delayed merger

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Dar es Salaam. Investors have maintained a bullish outlook for Tanga Cement Company Limited and Twiga Cement despite delays in the cement manufacturers’ merger plan, available data shows.

An analysis of the two firms’ performance at the Dar es Salaam Stock Exchange (DSE) shows that the two firms, which performed well during the first half of the year, have maintained that positive trend throughout the first three weeks of July.

Tanga Cement shares closed at Sh1,460 during the last day of trading in June but had since jumped to Sh1,680 as of Friday, July 22, 2022.

On the other hand, the share price of Twiga Cement – which trades as Tanzania Portland Cement Company Ltd (TPCC) – rose to Sh3,900 last week, from Sh3,720.

Analysts say with infrastructure improvement remaining a top priority for the government, investors remain optimistic that even if the merger fails, the two firms will continue to do well in the market.

“The way we see it is that Twiga Cement is already a mature company and it needs a room to breathe/expand going forward. Availability of quality limestone is a critical part in cement manufacturing and Tanga acquisition decision could not be more appropriate,” said the capital markets manager from Vertex International Securities Ltd, Mr Ahmed Nganya.

During the year ending December 2021, Twiga recorded a net profit of Sh88.48 billion while Tanga Cement reported an annual net profit of Sh3.7 billion. That was an encouraging comeback from a Sh2.1 billion annual loss it incurred in 2020.

The acquisition deal was announced last year where Scancem International DA (Scancem), a subsidiary of Heidelberg Cement AG, which owns Twiga Cement, and AfriSam Mauritius Investment Holdings Limited, owner of Tanga Cement, announced that they had finalized the terms upon which the former would acquire 68.33 percent of shareholding in Tanga Cement.

However since then the deal – which was slated to be finalised by the end of second quarter – has been delayed due to some regulatory issues.

“Twiga Cement is one of the perennial performers in terms of earnings and price momentum. Acquisition of Tanga would provide room for expansion due to Tanga’s vast and quality limestone resources. Currently, the acquisition has been delayed due to some regulatory hurdles but that is nothing to bother investors,” said Mr Nganya.

Last week, Twiga emerged as the top market mover at the DSE, accounting for nearly 70 percent of the week’s turnover of Sh1.85 billion.

CRDB voted Best Bank in Tanzania by EuroMoney

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Dar es Salaam. CRDB Bank Plc has been voted as the best bank in Tanzania, thanks to its transformative approach.

The bank was named  by Euromoney, a London-based monthly magazine that focuses on business and finance, it was revealed yesterday.

CRDB Bank Plc managing director, Mr Abdulmajid Nsekela said in Dar es Salaam yesterday that the award was in recognition of the bank’s transformation journey which focuses on creating sustained value, upping financial inclusion and building inclusive economic prosperity through innovative ways of delivering its products and services to clients.

“This award is proof that we are a leading bank in the country. It is also a sign of recognition to our transformative journey that has led to a sustainable growth of our bank,” said the CRDB boss.

Adding: “Our bank’s transformative journey has benefited our customers, investors and the country’s economy at large.”

Euromoney also recognised the bank’s digital revolution’s contribution, saying to a large extent it had bolstered financial inclusion.

“We have been in a forefront to help various sectors, agriculture and entrepreneurship, in particular,” he recounted.

Adding: “These sectors have been a catalyst for the country’s economic development.”

Mr Nsekela went further saying Euromoney recognised the bank for its pivotal role in facilitating strategic development projects implemented by the government and private sector.

He backed up his sentiments by citing examples of the Standard Gauge Railway (SGR) and Julius Nyerere Hydropower Station.

In 2004 CRDB became the first bank to be awarded the likes of the award by Euromoney.

“Winning the same award this year suggests that our bank keeps on growing day after day and we are proud that this has been recognised internationally,” said Mr Nsekela.

The bank was last year named by the Global Finance Journal as the best leading innovative bank in the country’s banking sector.

During the same year, the bank was awarded the 2021 ‘Quality Choice Prize’ by the European Society for Quality Research (ESQR)

Kenya Airways, South Africa carrier sign codeshare deal

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South African Airways (SAA) has inked a codeshare agreement with Kenya Airways (KQ) on flights to and from their home countries in a bid to increase their reach.
The deal, which became effective immediately, will see each airline sell, under its own code, flights operated by each other while travellers will combine flight segments and baggage on a single ticket.
The pact will also give passengers travelling out of South Africa more options to travel to African destinations, including Nairobi, Dar es Salaam, Entebbe, Mombasa and Kisumu.
KQ passengers, on the other hand, will have more choices for travel into Southern Africa, including Cape Town, Durban, and Harare immediately.
The growth of the partnership, the two airlines said, will see the addition of Zanzibar, Kilimanjaro, Juba, Douala, Lusaka, Ghana and Nigeria, subject to government approval as the two carriers seek to offer more options for travellers within Africa.
“We are very pleased to implement the codeshare with SAA, which offers our shared customers more options and flight combinations,’’ Allan Kilavuka, Kenya Airways CEO and group managing director, said on Tuesday.
“We are looking forward to introducing Kenya Airways customers to our award-winning service, and to working closely with Kenya Airways as our partnership will improve the connections between our respective networks,” says Prof John Lamola, interim CEO of South African Airways.
KQ is a member of the Sky Team — the second-largest airline network — while the South African carrier belongs to Star Alliance, so far the largest of the three major aviation clubs with a membership of 28 airlines.
The two carriers signed a strategic partnership framework in South Africa last November, which will see them eventually form a Pan-African carrier amid common longstanding financial woes exacerbated by the Covid-19 pandemic, among other problems.
It is expected that the partnership will improve the financial viability of the two airlines currently struggling to stay afloat.

Tanzania: NMB Eyes Three Key Sectors With 9 Pc Interest

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NMB Bank has urged farmers, fishermen and livestock keepers to tap loan opportunities offered by the lender after slashing interest rates to 9 per cent from May this year.

This was said by the NMB official responsible for Control and Implementation, Oscar Nyirenda said here over the weekend during the meeting with members of the business club from Lindi and Mtwara.

“Farmers, fishermen and livestock keepers have a reason to increase borrowing and expand their economic activities after NMB cut down lending cost to 9 per cent from over 10 per cent last year,” he said.

He added, “The reduction of lending rates to single digit is the implementation of the plea made by President Samia Suluhu Hassan last year seeking commercial lenders to cut down cost of lending to give relief to borrowers,”

He said also that special arrangement for interest rates will be made for small scale business people borrowing between 500,000/- and 5m/- when they meet the criteria.

He said before President Samia’s call for commercial lenders to reduce interest rates, NMB had already slashed it to 10 per cent last year and heeding to the Head of the State plea, the lender cut it down again to 9 per cent.

The NMB Southern Zone Manager Janeth Shango said that NMB is ready to serve and provide business people with loans and financial education that are necessary in expanding their business.

Read the original article on Daily News.

Dollar loses steam, euro on front foot as ECB meeting looms

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SINGAPORE — The U.S. dollar retreated further on Wednesday as the euro extended its overnight bounce on relief Europe might avoid the worst fears concerning energy shortages, and on the chance the European Central Bank may deliver a more aggressive rate hike.

Russian gas flows via the Nord Stream 1 pipeline are seen restarting on time on Thursday after the completion of scheduled maintenance, Reuters reported on Tuesday.

The euro tacked on 0.25% to $1.0245, having risen 0.75% the previous day, its strongest daily gain in a month.

Aiding sentiment was news that the ECB is considering raising interest rates by a larger-than-expected 50 basis points at their meeting on Thursday.

“If we do see Russian gas flows resume tomorrow, that will be good news for the euro/dollar and in the near term, euro can get a little boost and get away further from parity,” said Carol Kong, a currency strategist at Commonwealth Bank of Australia.

“But I am still worried about the euro/dollar, I think downsides still persist … the potential hawkish pivot from the ECB may not be able to give sustained support.”

The euro has lost about 2.3% since the beginning of July, and broke parity with the dollar for the first time in two decades last week following a red-hot U.S. inflation print and fears about a sharp economic downturn in the eurozone.

Other major currencies similarly rallied on the back of the weakening greenback, and as central banks around the world become more hawkish in their efforts to tame soaring inflation.

The U.S. dollar index measure against a basket of key currencies was down 0.14% to 106.52, well off its two-decade peak of 109.29 last week.

The U.S. currency’s retreat has also coincided with reduced expectations of a supersized 100-basis-point rate hike at next week’s Federal Reserve policy review.

The Aussie was up 0.4% at $0.6925, after rising 1.3% overnight, also the largest in a month.

Ahead of the Fed’s meeting next week, markets are pricing in a 23.2% chance of a 100 bp rate hike., with expectations of the jumbo rate increase easing after policymakers were quick to pour cold water on it.

Minutes of the Reserve Bank of Australia’s (RBA) July policy meeting out the day earlier showed that the central bank sees a need for more policy tightening to curb inflation.

Earlier on Wednesday, RBA Governor Philip Lowe also suggested that rates could at least double from current low levels.

Sterling likewise advanced 0.28% to $1.2031.

Bank of England Governor Andrew Bailey said on Tuesday that a 50-basis-point rate hike will be “among the choices on the table” at the BoE’s next meeting.

Conversely, the Japanese yen remained an outlier on Wednesday morning, and last traded 138.155 per dollar, as the Bank of Japan seems determined to stand by its dovish stance.

“Sticking to its dovish guns will entail sharpening policy trade-offs for the BOJ. The most pressing of which, is the sharp drop in the JPY; which has fallen a gut-wrenching 20-21% since the September FOMC,” said Vishnu Varathan, head of economics and strategy at Mizuho Bank in Singapore.

Over in the cryptoverse, Bitcoin was steady at $23,300, just off a five-week high hit the day before.

(Reporting by Rae Wee in Singapore and Alun John in Hong Kong Editing by Shri Navaratnam)

NSE sheds Sh95bn in days on profit-taking

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Investors’ wealth at the Nairobi Securities Exchange (NSE) plunged Sh95 billion as local traders raced to profit from stocks bought cheaply a month ago.

The NSE’s market capitalisation closed at Sh2.15 trillion on Monday, down from Sh2.25 trillion last Thursday as a result of the profit taking, analysts said.

The drop followed a rally at the Nairobi bourse as local investors scrambled to buy shares that were trading at multiple-year lows following a sell-off by foreigners.

Before Thursday, the NSE had gained Sh433 billion from June 27 when the market value dipped to a five-year low of Sh1,820 trillion.

“It is probably just some profit taking. Safaricom moved from Sh23 to Sh32 so investors who bought low are crystallising their gains. Also, those who wanted to sell but thought prices were too low now have the opportunity,” said Muathi Kilonzo, head of equities at EFG Hermes Kenya.

The profit taking has been more pronounced in the Safaricom stock after the share rose from Sh23.15 on June 27 to Sh32 last Thursday, translating to gains of Sh354 billion.

The gain prompted investors, especially locals, to sell the telco’s shares over the past two days. The sell-off saw Safaricom’s shares drop to Sh30 at the close of trading on Monday or Sh82 paper loss.

This means Safaricom accounted for 86 percent of the bourse paper loss despite the firm closing its books on July 29 for dividend payment of Sh0.75 a share.

The telco accounts for 56 percent of the entire NSE market wealth, a dominance that is making it difficult for investors to gauge the performance of the bourse.

East Africa Breweries Limited (EABL) shed Sh2.17 billion in the two days, followed by KCB Group (Sh1.76 billion) and Equity (Sh1.5 billion).

Despite the two-day loss, investor wealth at the NSE has risen Sh338 billion in the past three weeks, following increased trading on Safaricom, Equity Group, EABL and KCB.

The four stocks, which account for three-quarters of the market’s total valuation, had fallen to 52-week lows towards the end of June on the back of sustained foreign investor selling.

Renewed local investor demand due to favourable entry prices has seen analysts forecast the market making gains despite the profit taking on Safaricom.

This is because there is still ample supply from foreign investors who have continued to move their capital to markets such as the US after an upward review of rates to fight rising inflation, which has raised returns on western bonds.

This inflationary pressure across the globe is a result of high energy and food prices following Russia’s invasion of Ukraine in February, which cut off wheat and fuel exports from the Black Sea region.

Supply chain constraints have also raised the cost of goods, largely due to higher shipping costs, feeding the inflationary pressure.

Similar price pressures have hit the Kenyan economy, where prices of essential food items such as flour and cooking oil have risen sharply, pushing inflation to a 58-month high of 7.9 percent.

Due to the flight of capital from emerging markets, local stock prices fell sharply in June.

The impact

Multiple stocks fell to 52-week lows, ushering in a buyers’ market where there were attractive entry prices offering good dividend yields and potential for capital gains once the market corrected itself.

“Foreign investors are still recording net outflows, which has provided a steady supply for local investors looking to get into the market, hence the rise,” said Melodie Ndanu, an analyst at Genghis Capital.

The impact of the four counters on the fortunes of the NSE has once again exposed the exposure risk facing the market, making it difficult for investors to gauge the true health of the stock market.

The performance of these four stocks often shows a market that is either in good health or in trouble, disregarding underlying fundamentals for a majority of counters.

For instance, a sharp gain in the Safaricom stock results in a significant jump in investor wealth and the NSE Al Share Index, even when other counters record limited movement, due to the telco’s massive footprint on the bourse.

These stocks also dominate the foreign trading desk and daily traded turnovers, giving foreign investors outsize influence on the bourse despite holding just 20 percent of the issued shares.

Local investor apathy has also helped cement this dominance by foreign investors.

Most local retail investors entered the market during the IPO boom of the mid-2000s, but rarely traded actively afterwards after cashing in on their stock or were locked in by low prices for the new market entrants whose fortunes dipped after listing.

Earlier this year, the Central Depository and Settlement Corporation (CDSC) revealed that nearly 97 percent of equity accounts used for trading at the NSE had been dormant in the past two years, meaning that only 61,000 of the 2.03 million share accounts at the depository have participated in trading over the period.

INDICATIVE EXCHANGE RATES 20-07-2022

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Africa’s largest renewable energy IPP to be sold to Egyptian company

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Mainstream Renewable Power together with investment company Actis have announced the sale of Africa’s largest pure-play renewable energy independent power producer (IPP) Lekela Power, to Egyptian company Infinity Group and Africa Finance Corporation (AFC).

News of the sale was revealed in a joint statement by Mainstream and Actis on Monday, months after reports of the potential transfer – estimated to be worth approximately $1 billion – surfaced a few weeks ago.Although the deal awaits regulatory approval, should authorities give the greenlight, AFC will acquire Lekela’s one gigawatt (GW) fully-operational wind assets, as well as five operational wind farms located in South Africa, one operational wind farm in Egypt and Senegal each, together with other development opportunities Lekela has in Ghana, Senegal and Egypt.

“We’re proud to leave Lekela Power strongly positioned for its next phase of growth as an acknowledged sustainability leader, supplying much-needed clean energy to communities across Africa, building on our net zero commitment,” Actis’ partner and head of energy infrastructure Lucy Heintz says.

SA’s power crisis

Forming part of Lekela’s South Africa portfolio is the Khobab Wind Farm located in Loeriesfontein – a small town in the Northern Cape. According to Lekela’s website, the wind farm provides about 564 000 MWh of clean energy to the country’s national grid every year, serving approximately 170 000 South African households.

In the face of South Africa’s energy supply crisis, IPPs like Lekela will play an important role in helping alleviate pressure from struggling state-owned power utility Eskom, which has been vocal about its inability to meet electricity demand in the country, as well as the role that renewables will play in closing that supply gap.In the meantime, South Africans who have been bearing the brunt of the worst bout of power cuts in the last few weeks wait with bated breath for President Cyril Ramaphosa to reveal his grand plan that will hopefully see a nearing end to the country’s energy supply crisis. “Our vision is of a world electrified by renewable energy. Together with our strategic shareholders Aker Horizons and Mitsui, we are well positioned to lead and truly accelerate the transition to renewables in South Africa, across the African continent and in markets globally.”