Browsing: East African Community

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 …

Rwanda is poised to launch what it refers to as the ‘COVID-19 recovery fund’ that will serve to finance economic recovery efforts post the virus pandemic.

Among the sectors slated to benefit from the recovery fund is the country’s tourism sector. It only makes sense since, the tourism sector is one of the most affected sectors along with the catering and hospitality sectors as well.

In so doing Rwanda, which actually called for an emergency East Africa Community (EAC)  Heads of State meeting to deliberate regional response to the coronavirus pandemic, has again set precedent been the first country in the region to set aside recovery funds for the coronavirus aftermath.

The affected businesses across various economic sectors will be afforded access to low interest and even interest free loans. The loans are expected to help the business get back on their feet serving as operating capital.

Of these, it …

Most businesses are looking for digital options to conduct their businesses and banks are no exception. Already the economy was tipping towards digitizing most all its activities but with the onslaught of the coronavirus, digitizing is no longer optional but a must.

Banks are now pushing for 100 percent digital migration of their customers seeking at least 90 percent of their services to be offered remotely. In Tanzania, CRDB Bank has announced that it is aiming to increase online and simbanking to 90 percent by the end of the year.

To achieve this goal, the bank has launched a campaign to mobilize online and mobile phone services for all their customers. The bank is now working to raise public awareness and increase use on online services rather than going with the traditional way of standing in line at the bank.

The press release quotes a high ranking bank official, the …

For over two months now, companies in Tanzania are holding back contractor payments blaming it on the global coronavirus crisis.

Chinese companies are particularly in the spotlight with contractors complaining of delayed payments for goods delivered and services done. In an exclusive with this paper, an aggregate mine operator (name withheld) said payments due to the company from Chinese companies are still pending two months down the road.

This is the exact scenario that the government tried to evade when it throughout the Central Bank, Bank of Tanzania, it released a stimulus package to cushion the economy to ensure business stay liquid and are able to make all due payments.

It is not far fetched to think companies are taking advantage of the ongoing health crisis not to pay their debts or even government taxes and fees. I mean, non performing loans and tax evasion were profound well before the …

The higher your salary, the higher your taxes, that is why it is called P.A.Y.E that is Pay-As-You-Earn. You earn more, you pay more, its that simple, or is it.

Apparently it is not that simple. Companies are giving the top management and expatriates leeway to weasel out of the earning tax. You see, PAYE is a function of your earning that is, it is tax deducted from your monthly salary.

The way it works is that you earn a gross amount from which taxes are deducted and your pension contribution is also deducted as well. What remains after these deductions is your take home salary otherwise called net salary.

Legal consultant for corporate law in Tanzania Mr. Peter Makinda told a press conference that to keep their salaries up, top management in many companies under report their gross earnings for themselves on the one hand and to attract expatriates …

The East African Community (EAC) has put off what would have been the bloc’s first attempt to develop a regional response to the coronavirus pandemic.

This emergency meeting falls under the jurisdiction of the regional charter that allows for convening of what is referred to as an ‘extraordinary’ meeting. It is extraordinary because it occurs outside the scheduled ‘Ordinary’ meetings.

Well, speaking of putting off meetings, even the scheduled Ordinary meeting that was due to be held at the end of February was also postponed.

Back to the coronavirus response extraordinary meeting, the sitting East African Community (EAC) Chairman, Rwanda’s President Paul Kagame called the meeting.

If or rather, when it is held, this will be the first time the whole region comes together to formulate a response plan. Other than two or more member states reaching their own consensus, usually on border trade agreements; there has not been a …

As the number of new coronavirus infections reaches 53, the government of Tanzania has ordered schools to stay closed indefinitely, evidence of the uncertainty that haunts these murky coronavirus times.

It is the crowded commercial port city of Dar es Salaam that is most affected, in fact all the  53 new Covid-19 reported cases are in the city of 6 million plus people.

There are 4 new cases since the last new infection was reported on Monday making it 4 new cases in just 3 days, that is a rate of almost one new infection per day this week.

The development comes inspight of all precautionary measures that the city has taken including having hand sanitizers in every store, government office, market place and even public transport vehicles.

Union & Labour Day cancelled days from annual celebrations

With the exponential increase in rate of infections, and the spicy Islands …