OPINIONBy Desire Ngabonziza

Rwanda, under the leadership of President Paul Kagame, who is also the chair of the UN Broadband Commission for Sustainable Development, is among the African countries that are working towards realising the broadband connectivity targets necessary for meeting the Sustainable Development Goals launched this year.

Among the innovative ways to achieve these connectivity targets, include the unique broadband deployment model that Rwanda has chosen and has proven to be the best at least for any country looking at realising universal broadband access in shortest time possible and save on required traditional investment.

Now that broadband is accessible in major cities of the country and continues to expand, innovation and creativity towards utilising this opportunity is timely.

Indeed, it has started being witnessed from e-commerce platforms to various smart initiatives: smart logistics, smart lighting, smart surveillance and many more ventures still on small scale.

It’s needleless to mention that the availability of broadband connectivity plays a crucial role in improving key sectors for the socio-economic transformation of the country such as education, health and environment.

Many players in wide-ranging sectors of the economy have started taking advantage of the broadband access by initiating services to instill efficiency, be it in public or private sectors; the best example being the Irembo platform that offers public services online.

At its early stage the impact is huge on people’s lives; no more queuing up for hours, no more unnecessary travels; the list is endless.

Apart from Government initiatives such as Irembo or online tax declaration and payments, there has been a tremendous change within financial institutions who day-on-day keep taking their services closer to the clients in the most innovative ways through online financial transactions, as well as through integration of mobile-based payment systems (commonly referred to as mobile money) with traditional banking and making it possible to control transactions on finger tips.

Such development constitutes a ground breaking for the needed fully fledged e-commerce, mainly handicapped by lack of well integrated payment gateways accessible and affordable to many in the supply chain.

As deliberated and stressed in the Dubai meeting in April 2016 by commissioners of the UN Broadband Commission for Sustainable Development, broadband networks, services and applications have enormous potential to deliver dramatic results in education, health and socio-economic growth;

Rwanda has made it a priority to capitalise on the realised broadband connectivity and impact the required changes in the service delivery.

The Government of Rwanda is taking the lead by improving the education, health, local administration and security and safety towards well connected, integrated and well managed systems towards efficiency; and very soon the results shall be witnessed at large and more innovations are expected to build on such integrated systems.

The universal wireless broadband connectivity adopted by the country is well aligned with the world’s trends in consumer mobile device usage and adoption, especially the smartphones where the number of smartphone connections globally will increase by 2.6 billion by 2020 (GSMA Mobile Economy 2016).

The same report points out that at the end of 2015, up to 2.5 billion individuals across the developing world were accessing internet through mobile devices.

Although Rwanda is slightly below the current average of 40% mobile broadband connection in developing world, the combined efforts by operators and policy makers, mainly through 4G broadband connectivity, will soon lead to a tremendous improvement in the number of connections.

Equally important to mention is the cost of compatible devices that is dramatically decreasing with some of the 4G devices costing ~ 40 USD.

Based on the realities on the ground and the trends in mobile ecosystem, it’s fair to say that all elements are in place to expand what has been seen on small scale and create the needed impact to cause socio-economic transformation.

Developers, systems integrators and services providers across the industry are more needed than ever.

INTERVIEWBy Dorothy Nakaweesi

Uganda Bankers Association brings together 25 licensed commercial banks plus Uganda Development Bank. It promotes harmony and best practices among its members

Tell us about Uganda Bankers Association?

It brings together 25 licensed commercial banks plus Uganda Development Bank. It promotes harmony and best practices among its members. We discuss industry issues, interact with ministry of Finance on policy and parliamentarians and this engagement is run through the secretariat, to negotiate and contribute to debates to cope with industry trends.

What is your view on the industry in terms of growth?

We have come a long way. The industry is now regulated since we have stepped up capital requirements. Risk monitoring is much higher and the industry is very strong. When we talk about the number of players -this depends on how you look at it, we have 25 players.

But the key thing we need to do is to spread our presence in the remote places which need more coverage. The business itself -credit and lending is central to the banking business. We are working with the Credit Reference Bureau (CRB) to improve the quality of credit information. We are not yet where we want to be but there are still sources of information that are not captured. For example if you borrow money from a money lender this is not captured.

The other key issue is that while we want to increase our presence instead we are moving away from physical brick and mortar branches because they are expensive to run. We will be embracing technologies and handheld devices so that we can reach many more people. There is a lot to do to improve the industry; the level of financial literacy is low and appreciation of financial matters. We intend to increase awareness through radios, specific group and social media to allow people appreciate the dynamics of the industry.

Many people downtown fear going to banking halls because they think these are places for the rich and literate. What is UBA doing to see that this changes?

We have witnessed that and discussed it with our members. One is putting non-English front office staff who speaks local dialects so that the customers understand. This will make them save with our members instead of the informal ways which are risky. However, sensitisation is key if this is to be achieved.

Secondly we are rolling out agency banking where customers do not need to visit a banking hall but can access basic services from these agencies which are like mobile money kiosks. This will attract the unbanked population.

There is a growing fear on the state of the economy in Uganda. How has this impacted the banking industry?

Business levels have dropped judging from the level of activity on business accounts. The economy is not doing well and this has implications like payments not coming in time; imports may not come in time, projects are slower and this has led to loan defaults as projects are stuck.

This is not a good state and it is a concern to banks. But the important issue is what are the specific causes and how can they be addressed? Our advice to the banks is that if certain clients are facing challenges to pay back the loans, they should sit with them and come to a common ground. The businesses have to look for alternatives, then banks have to review the relationships with their clients, government should be mindful of how it is investing in large infrastructure projects that will have a multiplier effect on local content.

Embracing technology comes with challenges such as increased fraud. How is the industry addressing this?

The risk of fraud is constant in the financial sector. While there are inbuilt security systems or measures, we have to be on the alert and cope with trends. As an industry, there are international security standards we adopt like authentication of transactions and cross-checking. But the biggest part of the security goes to the customers’ safety of their codes and lately there is documented fraud done by the importers. With all these measures in place, we also train our staff in handling this. We also report to the Financial Intelligent Authority when we get fraud alerts. We also collaborate with the security agencies. Still on security, banks have embraced a system called Euro Money Visa on card technology which uses PIN codes.

What is your opinion on capping interest rates in Uganda like Kenya did?

We previously indicated our position. We believe that interest rates should gradually come down in an environment where the cost of credit is high and does not favour business and economic growth. Generally, the cost of credit should gradually come down. However, capping is not the best way to address this challenge because there are other factors that cause high interest rates. Interest rate is just a tip of the iceberg; it is the ingredients that cause the interest rates to go high that should be addressed. Critical among these causes that we need to address to bring the interest rates down, is the savings level of an economy and the tax to GDP ratio.

Once government collects less tax than it can fund its budget, it is forced to borrow domestically or externally. When it borrows domestically through the treasury bonds, it takes money from banks and offers the interest rate. The price at which government borrows this money is the bench mark at which we will start indicating interest rates and this can be a big driver. That aside, banks are reviewing their operations to cut the interest rates. These are important dynamics to look at much as some are long-term. Once these are addressed, the interest rates will come down. This is a discussion we shall continue engaging in as stakeholders because we also want the economy to grow.

Banking sector

Mr Wilbrod Humphrey Owor, executive director, Uganda Bankers Association

On capping interest rates. Interest control regime would stifle free market forces, discourage credit growth, constrain sector appetite and encourage black credit market at very high cost and terms.

By Sylivester Domasa

Air Tanzania Company Limited (ATCL) and Moroccan Royal Air Maroc are scheduled to sign a codeshare agreement to open direct flight between Dar es Salaam and Rabat.

Speaking shortly after signing the 21 bilateral deals between Tanzania and Morocco in the city yesterday, President John Magufuli said he had principally agreed with his visitor to launch the direct flights between the two cities.

He said the flights will help boost tourist arrivals, with Moroccan figures indicating that last year, the North African country registering 10.5 million tourist arrivals amid the target of 14 million tourists this year.

“There will be direct flights to Rabat…we will enhance cooperation with Royal Air Maroc,” President Magufuli said at State House, noting that the two countries had agreed to strengthen security cooperation, with Tanzania expected to deploy some 150 uniformed personnel anytime next year for an exchange programme.

President John Magufuli told his audience, including Vice President Samia Hassan Suluhu, Prime Minister Kassim Majaliwa, cabinet ministers, members of diplomatic mission and business community that the king had agreed to finance construction of the state of the art mosque in Dar es Salaam.

“We are here to build a modern economy,” Magufuli said, insisting that the friendliness between Morocco and Tanzania is deep rooted. At the ceremony, Prof Makame Mbarawa, on behalf of the government, signed an agreement with Moroccan Foreign Affairs Minister Salahddine Mezouar on air cooperation.

The agreement was just after Tanzania Foreign Affairs and International Cooperation Minister Dr Augustine Mahiga had inked another deal with Mr Mezouar on economy, science, technology and culture.

ATCL, reopened its domestic flights on October 15, after the government support on the procurement of Bombardier Dash 8 Q400, thanks to President Magufuli’s commitment to revitalise the almost collapsing national flag carrier.

This is the first time King Mohammed VI is visiting the country, thanks to efforts by Tanzania’s Consular General in Morocco, Mr Fouad Mustafa.

Mr Mustafa has reportedly played a significant role in facilitating cordial relationship and cooperation between Tanzania and Morocco, with special focus on foreign relations, security, infrastructure, education and investments as well as private sector development.

By Nelson Bwire

The Central Bank has refuted claims that the country’s financial sector is crumbling following the recent takeover of Crane Bank Limited.

In a statement from the Director Communications, Ms Christine Alupo, she dispels any rumors or claims regarding instability in the financial sector, urging the public to continue going about their banking business “without panic”.

“Following Bank of Uganda’s takeover of management and control of Crane Bank Ltd on October 20, 2016, there have been false and malicious rumours circulating on social media platforms regarding the state of the financial sector as a whole. The Bank of Uganda hereby dispels all those rumours and reaffirms that the financial sector as a whole is stable, sound and resilient,” the statement reads in part.

“The public is hereby advised to continue conducting their banking business without panic. Should anyone have any inquiries on Crane Bank Ltd, in particular, and the health of the financial sector in general, please contact the Director Communications,” the statement continues.

Last week, Bank of Uganda took over management of Crane Bank and suspended all members of the board.

According to Bank of Uganda governor Emmanuel Mutebile, Crane Bank is under-capitalised and poses systemic risk to the banking sector. However, Mr Mutebile noted that the bank remains open to customers under the management of Bank of Uganda.

“Crane Bank has been on the BOU watch list since September 2015 after regular onsite tests and external audit report. Crane Bank capital had fallen below the 50 per cent legal requirement under the law,” he said.

Mr Mutebile also ascertained that the suspension of Crane Bank top management by the Central Bank would have no bearing on the daily operations of Uganda’s fourth largest bank by assets.

The takeover, he said, was not necessarily a closure but the Central Bank would station appointed managers at the bank’s entire 47 branch to supervise and oversee daily operations until when the bank returns to stability.

This, according to analysts, means that Central Bank, at its discretion, might in future invite potential investors to recapitalise the bank or wholly sale out to an entity or investor that might choose to run the bank in its current form or under a changed entity which might include change of trading name and composition of directorship.

By Deus Ngowi

Moshi — Moshi District Council has completed a special operation to kill about 5.6 million quelea quelea birds which had invaded 2,135 hectares of paddy in three irrigation schemes in Moshi Rural District.

Moshi District Council Executive Director, Butamo Ndalahwa, confirmed here yesterday that the exercise was successful despite some minor challenges. He said farmers were happy and they expect bumper harvest.

The government, he said, acted fast to avert loss of yield as the red-billed weavers had proved destructive. The Moshi council secured 325 litres of poison from the Ministry of Agriculture, Livestock and Fisheries in Dar es Salaam to contain the destructive birds.

On October 3, Ndalahwa consulted the coordinator of the Arusha Plant Health Centre as well as Kilimo Anga Arusha manager to get an airplane from Nairobi.

The world’s most abundant wild bird species have been destroying paddy at the 440-hectare Lower Moshi Scheme, the 270-hectare Mandaka Mnono Scheme and the 1,425-hectare Mawala Scheme. Agricultural experts had found out there were four beddings situated at TPC Company sugarcane plantations as well as in nearby places.

The birds were usually seen during the morning and evening hours feeding on paddy while spending nights at their beddings in sugarcane plantations. The red-billed diochs have an estimated adult breeding population of 1.5 billion pairs.

The overall world population is expected to be as large as 10 billion. They are found in sub-Saharan Africa but are absent from thickly forested regions and the southern reaches of South Africa.

By Deogratius Kamagi

Dar es Salaam — Two North Korean ships have been seized by the government in Zanzibar for using Tanzania’s national flag in breach of a United Nations resolution, which imposes sanctions on the culpapble state.

Speaking exclusively to The Citizen on Wednesday, the minister of Foreign Affairs and East African Cooperation, Dr Augustine Mahiga, said investigations by the government and international agencies were underway to determine all vessels owned or linked to North Korea that were flying the Tanzanian flag.

He, however, couldn’t give details of the seized vessels.

He said for North Korea to use the Tanzanian flag was a breach of the UN resolution and that the government was keen on ensuring the issue was resolved as soon as practicable.