Browsing: East African Community

There has not been a more demanding time for Africa to adopt modern agriculture methods than now. In the wake of the Covid-19 pandemic, food security in Africa is threatened at all levels and farming activities have nearly been brought to a standstill.

African farmers lost market as borders closed and flights were grounded to curb the spread of Covid-19. As a result the, pandemic severely affected the agriculture value chains from supply of inputs to transporting the end product.

Africa now finds itself more in need of modern farming methods to increase production in a cost effective manner. However, while attempting to increase production, African farmers must also mitigate the effects of climate change by adopting climate smart agriculture.

There is need to use improved seed varieties even in the backdrop of the side effects of using hybrid seeds. Improved seed varieties are more resistant to disease and poor …

After slow production during the Covid-19 lock down,  Zimbabwe’s gold sector has had a drastic come back reporting gold revenue is up almost 50 percent at least one of its major mines.

The total revenue recorded for the second quarter of 2020 clocked and impressive to USD23. 6 million, that is almost double (48 percent) the revenue brought in during the same period last year.

Having topped last year’s production by USD15. 9 million, Blanket Gold Mine that is based in the Gwanda region, increased production all through the first quarter this despite glitches caused by the Covid-19 pandemic.

The mine is owned by the Caledonia Mining Corporation and was proud to announce it had produced 14,233 ounces of gold in the second quarter up from the 11,948 produced during the same period last year.

The production level is very impressive given the fact that other miners could not access …

Tanzania has joined the rest of the continent in lowering borrowing rates for commercial banks in a bid to maintain their liquidity.

Tanzania’s Central Bank the Bank of Tanzania, (BoT) has cut down interest on borrowing from 7 percent to 5 percent, a move that has been welcomed by the business community.

It has also chopped rates on government securities by half, starting with treasury bills which it brought down to 5 percent from 10 percent and treasury bonds to from 40 percent to 20 percent.

These latest series of monetary measure is backed with the lowering of the required minimum cash reserve that commercial banks are otherwise required to maintain at the Central Bank.

The goal is to stimulate the economy by giving commercial banks the leeway to lower their lending rates which in turn should see business access the operating capital they need. The BoT did not stop …

Did you know, last year (2019) Africa spent more money servicing debts than the amount it spent on health issues of its public? This obviously a general statement, it does not mean that each and every country in Africa spent more on debt servicing that the money it allocated to its health center, but the fact holds true for most of Africa’s 53 countries.

It is not that Africa does not care about the health of its people, on the contrary, its just that, according to World Bank stats, Africa is home to the World’s highest number of heavily indebted poor countries owing a total of USD 493.6 billion in long term debts.

As the World Bank and International Monetary Fund issue funding aid to help support Africa respond to the effects of the COVID-19 global pandemic, many African countries including Tanzania and Rwanda have asked that the international community …

China has been funding a lot of Africa’s development especially in the past two decades and in that time, Beijing has loaned to Africa a whopping USD160 billion.

This debt burden is here to stay, and to stay for a long time, that is unless China is willing to forego or at least ease the terms of the loans.  To put it in the words of the US Secretary of State Mike Pompeo;

“It is something that the African countries should consider, too, in asking China to possibly enter debt relief on some deals that have incredibly onerous terms that will impact the African people for an awfully long time, if relief is not granted.”

This should not be a problem for the runner’s up for World’s biggest economy, in fact China is among the world’s richest 20 countries which are known as the Great 20 or more …

Total Uganda has bought out the financial struggling Tullow Oil for a whopping USD575 million as the latter gears up to leave the East African market.

The buyout will be paid in part by a USD 500 million initial payment payable upon completion and another USD75 million payable when the project pact is finalized.

With completion of the sell, Total Uganda will now own Tullow’s assets on the humongous Lake Albert Development project and the even larger East African Crude Oil Pipeline project. Tullow, a British owned conglomerate has been struggling and the just inked Uganda buy out will help improve its liquidity.

The move is not due to the ongoing global coronivrus pandemic, it is rather a strategic plan that was on the table long before the pandemic begun. At the start of the year, the sale and purchase agreement had already been signed, well before the Covi-19 virus …

Even as share values for US futures on crude oil prices hit rock bottom, spotting a worrisome negative figure (-4.0 USD) there are still several functions that claim the crush of oil prices in the US and around the World will have no effect on stock shares in Tanzania, the numbers are giving a different story. Lets start with the optimistic side.

As US futures for oil price continue to free fall some are of the view that it will have no effect on Tanzania’s sole bourse, the Dar es Salaam Stock Exchange (DSE). Why? Well, simple, most African countries, Tanzania included, are oil importers so, the fall of oil prices will mean positive balance of payments.

In turn, favourable balance of payment means good exchange rates of the shilling for the dollar, again another plus for the shilling. Good exchange rates translates to higher value of the shilling and …

Members of Parliament in Tanzania are urging the government to consider giving tax breaks to businesses in a bid to help them stay afloat.

Alternatively, the government is encouraged, through the Central Bank, to scrap interest on loans so that borrowers do not fall into default.

At the moment, despite the global slowdown, businesses are still operational but they are operating way below their year revenue projections. Already, at the start of the second quarter, the country is facing potentially huge loan defaults by both large corporations as well as small and medium sized companies.

Big businesses are now turning to the government to intervene. While the Central Bank, the Bank of Tanzania (BoT) has already issued a stimulus package for commercial banks, the Tanzania Private Sector Foundation (TPSF) is working on an arrangement to save large borrowers from mega defaults that would in effect ripple throughout the economy.

Commercial …

The falling price of crude oil spells good favour for importers in Africa. The price of crude has been on a steady drop despite attempts by producers to cut output. As a result, many African countries are taking advantage of the situation and stock piling their reserves.

Take for instance the case of East Africa, crude oil represents more than 20 percent of Tanzania’s annual imports. So a drop in price of crude means the country can afford to buy more and reserve for future use. However no official report has been issued as to the government policy on the matter.

The issue that arises here is the matter of crude versus refined oil. Africa, Tanzania included, imports refined oil which is more costly than crude but with falling prices of crude then follows that  even the price of refined oil has taken a dive

As such, the country is …