Chiefs are demanding powers to issue gold mining permits in areas which fall under their jurisdiction as well inclusion in various indigenisation boards.

Speaking at the just ended chiefs’ annual conference in Bulawayo, Chiefs Council leader, Fortune Charumbira said the Mines and Minerals Act should be repealed so that chiefs are also involved in the process of granting gold mining licences to prospective miners within the chiefs’ respective areas.

According to the current Mines and Minerals Act, mining licences are applied for through the Mining Commissioners from the mining districts in which the resource is located.

“As custodians of the land, chiefs are the ones who are supposed to allocate mining claims. We are not happy with the current situation where gold prospectors just invade our areas armed with licences from the ministry of mines without our knowledge. As chiefs, we own that gold and we should be consulted,” said Charumbira.

He also claimed that several gold prospectors were living in constant conflict with the local communities because chiefs were not involved in the issuance of gold claims processes.

Charumbira also demanded the inclusion of chiefs and headmen in indigenisation and economic empowerment boards under the community share ownership trust scheme which was set up by the government through sourcing funds from foreign-owned mining companies operating in various parts of the country.

“Chiefs are left out in community share ownership trust. Only one mining company, Ngezi platinum, has embraced chiefs in this project. We all want our chiefs to be directors of the community share ownership trust scheme. These companies should be forced to accept us as the trustees,” said Charumbira.

Officially opening the chiefs’ indaba on Saturday, President Robert Mugabe promised the chiefs farms and other luxuries, saying the traditional leaders deserved to be pampered with all kinds of niceties because they play a very “important role”.

The president also assured the chiefs that within a fortnight the chiefs will take delivery of brand new Isuzu Double Cab vehicles.

“If we promise people, we always make sure that the promises are fulfilled and in two week’s time, the chiefs will be coming to get their vehicles in Harare. (Kasukuwere) make sure these chiefs are given their cars. These cars should be quality cars that are in good condition so that they carry out their duties,” said Mugabe amid unrestrained cheers from the chiefs and their spouses.

By Tsegay Hagos

Small and Medium Enterprises are contributing to the import substitution efforts.

Obviously, most sophisticated private industries which sell their brand products in almost all parts of the globe had once been confined to small manufacturing sheds and at a local market.

The silver bullet to the success of these businesses might be a mix of two factors – the hard work of the individuals or the team that has started the businesses and the enabling ground their governments created. For instance, governments that have paid due attention to Small and Medium Scale Enterprises (MSEs) have championed in nurturing private innovations to a high-tech based industrialization.

The government of Ethiopia has recognized the role of MSEs in the socio-economic development of the society. Hence, due to its increased supports to the Enterprises, a number of MSEs have transformed themselves to large scale industries.

Availing the required finance to entrepreneurs and innovators is the pillar to the translation of the innovations from a business proposal to real business activities.

Ethiopia, with its 70 percent young demographic base, has bright ambitions of becoming stable and strong nation in Africa both economically and politically. Its huge youth population is, therefore, the main driver of the attainment of the ambition. That is why it has established microfinance institutions which enable the youth businesses to flex their muscles financially.

The MSEs and the financial institutions have also been made to feed on one another.

Federal Micro and Small Development Enterprises Agency (FMESDA) as well as many other micro-finance institutions are supporting the youth entrepreneurship to come to fruition.

The loan and saving services are benefiting the youth, including women, who have limited financial access. These segments of the society have in turn secured jobs to themselves and other fellow citizens as well.

Owing to this, the youth have been engaging in a range of sectors such as manufacturing, service, and industry. And the amount of finance needed to set up the enterprises also varies.

Micro scale business enterprises in the industrial sector–manufacturing, construction and mining–comprise up to five persons including the owner and/or has total asset not exceeding Birr 100,000.

Similarly, if the enterprise operates in the service sector–retailer, transport, hotel, tourism, Information Communication Technology (ICT) and maintenance–five persons can establish it while the asset cannot exceed 50,000 Birr. If it operates in the industrial sector, it can employ from 6 to 30 persons or can have a paid-up capital or total asset not exceeding 1.5 million Birr.

A small service sector enterprise is one that has between 6 and 30 persons and or has total asset or paid-up capital of 500,000 Birr.

Nowadays, the number of MSEs is increasing at a faster pace in Ethiopia. When we see the production of MSEs in Addis Ababa, it is accounted for over 15.2 % of Ethiopia’s total GTP employment opportunity plan in 2015/16 fiscal year, FMESDA discloses.

The unbearable collateral requirement of private and state banks used to discourage small business from thriving. But, the loaning systems of the financial institutions have helped to bridge this gap.

Numerous SMEs which operate throughout the country have created over 1.7 million jobs to citizens, discloses Abozenech Negash, Deputy Public Relations Coordination Office with the Federal Urban Job Creation and Food Security Agency.

The institutions played a huge role in curbing poverty and unemployment says Mesfin Fituma, Business Development Head of Addis Credit and Saving Institution (ADCSI). “Quite many of the operators have transformed both their enterprises and lives.”

The linkage between SMEs and micro-finance institutions has also grown meaningfully. Many of them have built good reputations in repaying their debts and growing their savings, he adds.

“For instance, 250,000 customers have saved seven billion Birr. This saving in turn has also gone to the enterprises in the form of loan.”

In a nutshell, the micro-finance institutions have been playing massive roles in baking the youths to realize their vision. MSEs have been proven to be very important in many ways like promoting youth innovation, creating employment, diversifying businesses and increasing youth income as well as in fostering asset creation, import substitution, among others, he explains.

“We have understood that our clients are changing their livelihood. We always inspect and supervise micro and small enterprises. Based on that, most of them have achieved great success; even there are MSEs which have transformed their business into industry level. Not only this, there are enterprises that employs 50-60 people,” the manager discloses.

To back his assertion, Mesfin indicates as quite many of the MSEs have already started exporting their products. “Especially those who involved in leather and leather products have penetrated the international market. There are also people who bake Injera (staple food made from Teff flour.) and export it to the Ethiopian Diaspora communities in North American and European countries.”

In addition, Saudi-repatriates have also created their own business in their country.

Besides exporting products, enterprises are enjoying the local market opportunity.

The construction sector’s huge appetite has become the largest local market opportunity to the enterprises, he points out, mentioning the massive construction of industrial parks, condominium houses as well as mega projects’ undertakings.

As a result, enterprises, which previously took small amount of loans, have dramatically scaled up their loan demands. “We are striving to satisfy their growing demands.”

Amara Credit and Saving Institution (ACSI), General Manager Mekonnen Yelewumwosen for his part notes as the micro-finance institutions have become reliable financial source to MSEs which operate in the areas of agriculture and trade activities.

ACSI was founded in 2006 to create financial access to urban and rural low income society, he says. “The enterprises’ growth has increased the financial capacity of our institution too.”

Various segments of the society such as the youth, women, elderly people and people with disabilities have got the opportunity to run their own businesses. Beekeeping, animal fattening, poultry production, and retail businesses are some of the areas the MSEs operators have engaged, Mesfin adds.

The General Manager indicates that ACSI has enhanced the number of its clients to five million. Customers have also saved 350 million Birr only in 2016.

Apart from providing loan and saving services, ACSI also consults its customers on the feasibility of their business plans, he adds.

“We often go to the business areas and witness their day-to-day activities first hand.”

Regarding the major challenges facing the micro-finance institutions, he says that some operators fail to repay loans timely. On top of this, most micro-finance institutions are subjected to extra expenses for office rent.

Having realized this, state banks and Ethiopian Microfinance Institutions (AEMFI) are applying various endeavors.

The government is also providing every necessary support to step up the efforts of micro-finance institutions.

The government envisions increasing the accessibility of micro- finance institution during the second growth and transformation plan (GTP II). During this period, the institutions attempt to reach 50 percent of the rural community. By so doing, the rural community will have reliable access to finance to run on-farm and off-farm business. Side by side with this, the effort will help the same community to nurture its culture of saving, which in turn will put its impact on the domestic saving at national level.

Econet Wireless’ mobile money platform, EcoCash has launched a ‘Swipe into EcoCash’ service that enables customers whose banks have not integrated with EcoCash to be able to swipe their monies from their bank account into their EcoCash accounts. All ZimSwitch enabled cards can access the facility. At present, only five banks are yet to connect on EcoCash platform.

The service will be available at selected merchants as well as agents and customers can swipe up to $2 000 per transaction. However, the number of swipes and limits depend on individual bank’s terms and conditions. EcoCash general manager Natalie Jabangwe Morris, said this was part of the firm’s efforts to enhance inter-operability and convenience at a time the country is facing cash shortages and relying on electronic platforms for transacting.

“Our idea is to go beyond mobile money. This is about improving on payment systems,” she said during the launch of the service today. As at June 30, 2017 an estimated 6, 8 million customers were active on the EcoCash platform as it remains the largest mobile money service provider. The mobile money platform is now driving an estimated 90 percent of mobile money in the country ahead competition from Telecel and NetOne’s mobile money platforms.

Reserve Bank of Zimbabwe (RBZ) national payments systems deputy director Josphat Mutepfa, who officially launched the swipe service said this a commendable innovation at a time consumers seek convenience. He, however, implored on the financial services sector to be on the lookout for risks associated with digital payment systems as customers also need security.

“This will bring convenience to the banking community. Over the years, we have witnessed collaboration between banks and mobile networks which has resulted improved inter-operability,” he said. A recent report by the Posts and Telecommunications Regulatory Authority of Zimbabwe (Potraz), outlining the industry’s performance in the second quarter of 2017, gave Ecocash’s market share (as at the end of June 2017) at 98,7 percent, confirming its leadership position in the mobile money sector. Ecocash is managed by Econet Wireless’ Cassava business unit, and has been leading the mobile money market since its inception in 2011.

The Potraz report said $836 million worth of transactions had been conducted via mobile money in the second quarter of this year alone (from April to June 2017). The launch of Ecocash Swipe is expected to further strengthen Ecocash’s leading market position by broadening the base of customers that can use the service through the integration with ZimSwitch. Mr Mutepfa however issued a word of caution to all financial institutions and service providers regarding security of transactions and robustness of their platforms.

“The Issues of risk and security must be diligently addressed and managed by all banks, operators and payment systems suppliers”, he said, stressing the importance of continuous investment and on-going co-operation between the financial services players and the Central Bank, which supervises all banks and financial technology (fintech) companies and solution providers in the country.

By Mnaku Mbani

Dar es Salaam — Tanzania’s public debt rose by 15 per cent during the 2016/17 financial year even as the government grapples with own sources of development financing amid growing unpredictability of funds disbursements from development partners.

Latest figures show that the debt had reached Sh53.3 trillion (about $24.514 billion) during the financial year that ended on June 30, 2017.

Among the mega projects which President John Magufuli’s administration is currently executing are the standard gauge railway that will connect Tanzania to the landlocked neighbouring countries of the Democratic Republic of Congo, Zambia, Rwanda, Burundi and Uganda.

Construction of the first phase of the railway project – a 205-kilometre stretch from Dar es Salaam on the Indian Ocean coast to Morogoro – is already ongoing, whereby part of the funding was sourced as a loan from the Turkish state-owned Export Credit Bank of Turkey (Exim Bank).

In a related development, the government announced earlier this month that a Turkish firm, Yapi Merkezi – which is building the first phase Dar es Salaam and Morogoro stretch – has also won the tender to construct the second phase connecting Morogoro to Makutupora in Dodoma region. The contract is worth $1.92 billion.

Alongside the standard gauge railway project, the government is also implementing road projects in other parts of the country. One that readily comes to mind is the much-anticipated Ubungo Interchange which is being constructed using funds from local and foreign sources.

Then again, the government has been purchasing airplanes for the national flag carrier Air Tanzania Company Limited (ATCL) even as it continues to implement a number of other socio-economic development projects across the country.

Put in perspective, the Sh53.3 trillion national debt is roughly the equivalent of half the country’s gross domestic product (GDP), which hit the Sh103.7 trillion mark in 2016.

That aside, the debt growth rate for 2016/17 was the lowest to have been registered in recent years. During the 2015/16 financial year, the debt jumped by 20 per cent, reaching Sh46 trillion in June 2016 – up from Sh38.2 trillion as of June 2015.

In June this year, the central government borrowed a total of $505.0 million from Switzerland’s Credit Suisse.

The central government debt accounted for the largest share, reaching $14.948 billion as of June 2017.

The country report of the International Monetary Fund (IMF) in June revealed that the debt sustainability analysis (DSA) conducted in June 2016 suggested that Tanzania could afford a higher fiscal deficit of up to 4.5 per cent of Gross Domestic Product (GDP) for a few years – and still maintain a low risk of debt distress.

The IMF analysis indicated that all the three debt stock indicators (relative-to-GDP, exports, and revenue) increased slightly in the medium-term before declining to below initial levels by the end of the projection period – and remained well below their policy-dependent thresholds under the baseline and all shock scenarios.

The debt service-to-revenue ratio, however, increased over the medium-term and remained slightly above initial levels at the end of the projection period.

“Under the most extreme stress test, external debt service as a ratio-to-revenue slightly breached its threshold in 2020/23 in the event of a one-time 30 per cent depreciation in the nominal exchange rate,” the IMF states in its assessment report.

The Fund also said that, in such a borderline case, the results show that – under this approach – Tanzania’s risk of debt distress remains low for all external debt indicators.

A Bank of Tanzania (BOT) analysis conducted in late-2016 revealed that matured external debt repayment using domestic revenue had reached 11.5 per cent, against the desired 20 per cent. External debt repayment using exports was found to stand at 7.8 per cent – also against the desired level of 20 per cent.

The central bank noted that a large portion of Tanzania’s debt is payable under ‘long term maturity’ agreements – with the average time to maturity set at 11.9 years.

This means that effects of debt repayment on the government budget are ‘low refinance risk.’ Also, according to the ‘Economic Development in Africa Report-2016’ by the United Nations Conference on Trade and Development (Unctad), a higher level of domestic debt in Tanzania is likely to be sustained without compromising the country’s economic growth.

President Muhammadu Buhari on Tuesday in Niamey, Niger, urged members of the Economic Community of West African States (ECOWAS) to tread carefully in pushing for a single currency in the sub-region by 2020, drawing attention to the challenges faced by the European Union (EU) in realising the same goal.

In his speech at the fourth meeting of the Presidential Task Force on the ECOWAS Currency Programme, President Buhari said the necessary economic fundamentals among countries continue to differ over the years, making it more difficult to pull through with the project by 2020.

“Nigeria advises that we proceed cautiously with the integration agenda, taking into consideration the above concerns and the lessons currently unfolding in the EU. To that end, Nigeria will caution against any position that pushes for a fast-track approach to monetary union, while neglecting fundamentals and other pertinent issues,” he said.

President Buhari, according to Premium Times, noted that some of the obstacles to realising the roadmap for the implementation of a single currency include diverse and uncertain macro-economic fundamentals of many countries, unrealistic inflation targeting based on flexible exchange rate regime and inconsistency with the African Monetary Co-operation Programme.

The president said domestic issues in ECOWAS member countries relating to their constitutions and dependence on aid continue to affect the framework for implementing the single currency in the sub-region.

He said: “Although the ECOWAS Commission has anchored its pursuit of the new impetus to monetary integration on “the information presented to the Heads of State which were the basis for their recommendations,” we are concerned that we have not properly articulated and analysed a comprehensive picture of the state of preparedness of individual countries for monetary integration in ECOWAS by 2020.

“In previous meetings, we had specifically raised observations on the state of preparedness of the member states, the credibility of the union if anchored on watered down criteria, and the continuing disparities between macroeconomic conditions in ECOWAS countries, amongst others. And I would like to reiterate this concerns.”

The president told the Heads of State that the conditions that pushed Nigeria into withdrawing from the process in the past had not changed.

“Nigeria had earlier withdrawn from the process because its key questions and concerns were ignored and till date, none of the issues has come up as an agenda issue to be considered by the taskforce. Consequently, the Roadmap which did not involve widespread consultation with national stakeholders is not sufficiently inclusive,” he added.

Going forward with the project, President Buhari suggested a thorough review of the convergence roadmap and the constitution of an expert committee on each of the subject areas to come up with acceptable time frame, defined cost and funding sources identified.

“This should also consider stakeholders such as the Ministries of Finance, customs, parliamentary groups, tax authorities, immigration authorities to achieve comprehensiveness,” he said.

The president said there should be a push towards ratification and domestication of legal instruments and related protocols, while fiscal, trade and monetary policies and statistical systems, which had not gone far, could be harmonised.

Buhari noted that the West African Economic and Monetary Union, UEMOA, countries should make a presentation on a clear roadmap towards delinking from the French Treasury.

He also advised an examination of the African Union position on the same issue, which the African Central Bank Governors, in line with the African Union programme of monetary convergence, recommended a convergence deadline of 2034 for the establishment of Regional Central Banks in all sub-regions.

In his remarks, the President of the ECOWAS Commission, Marcel Alain de Souza, said the single currency for the West African sub-region was a laudable and historical project, but regretted that it had taken too long to be actualised.

The president said the creation of a Central Bank for the West Coast would accelerate the process.

He noted that Nigeria constitutes more than 70 per cent of the GDP of the West African region, with a population of 180 million, and would play a significant role in facilitating the process of realising a single currency for the sub-region.

By Kennedy Kimanthi

A new 4.8-kilometre runway that can handle larger aircraft is set to be built at the Jomo Kenyatta International Airport.

The runway, which will be 75 metres wide, is significantly better than the current one that is 4.2 kilometres long and 60 metres wide.

Once the work is complete, the new runway will be able to handle the new generation extra-wide-bodied aeroplanes such as the Airbus A380 and Boeing B747-800.

Construction is scheduled to begin in June next year, after the African Development Bank (AfDB) approves a loan of Sh19 billion for the Sh37 billion project.

AfDB director-general for East Africa Gabriel Negatu said the loan will be approved towards the end of 2017.

Besides providing financial support for the runway, the bank is also responsible for the design of the path.

MEET SPECIFICATIONS

According to Kenya Airports Authority (KAA) chief executive officer Jonny Andersen, the technology of the proposed facility will meet the International Civil Aviation Organisation’s category II specifications

“The project will reduce mishaps on the path as it will nearly double the aircraft movement, from 25 to 45 aeroplanes per hour. Moreover, the technology will also enable operations in bad weather, thus avoiding diversion of aircraft,” he said.

According to KAA statistics, the number of passengers this year dropped by six per cent to 530,000 from 560,000 in the same period last year.

The volume of cargo handled at the airport went down by two per cent to 20.3 million tonnes from 20.7 million tonnes in March last year.

Aircraft movement declined by 0.4 per cent to 9,196 in March compared with 9,232 in the corresponding period in 2016.

By Nduta Waweru

#GoodMorningAfrica from Rwanda, which received one of the 2017 international coffee awards. The land of a thousand hills received the 2017 Ernesto Illy International Coffee Award at a ceremony in New York, USA.

The land of a thousand hills received the 2017 Ernesto Illy International Coffee Award at a ceremony in New York, USA.

Jean Bosco Ngabonziza of Rusizi Coffee Washing Station won the first place for “a medium full-bodied coffee with a balanced flavour. Strong caramel notes, toasted bread is mixed with a sight coffee chocolate aftertaste.”

Tumwamini Ndamwerema Jean Paul and Faustin Nhzabarakize of Liza and Mashehsa Coffee washing station respectively came in second and third place.

Rwanda’s ambassador to the United Nations Valentine Rugwabiza received the award on behalf of the winners.

Read: Model Villages for the poor of Rwanda

Rwandan dark roast coffee beans. Photo: Wiki/ Creative commons/Evan-Amos

The win comes at the time when Rwanda’s National Agricultural Exports Board and stakeholders started a countrywide campaign to distribute more than 4,700 tonnes of fertilisers to coffee farmers. The move is geared towards increasing coffee production and export. The board is working together with the Coffee Exporters and Processors Association of Rwanda (CEPAR) to ensure that all farmers enjoy the benefits of the project.

Coffee is one of the contributors to the country’s agricultural exports at 24 per cent over the last decade.

Just last month, the board is also running another campaign to boost coffee production and consumption. The head of the board, Dr Celestin Gatarayiha said the sensitisation will make the over 400,000 farmers in Rwanda embrace good agricultural and post-harvest practices that will not only increase productivity and enhance the quality of their coffee.

The plan is to increase domestic consumption to contribute towards stabilising the price fluctuations in the global market.

#Rwanda awarded at the 2nd Ernesto Illy Int’l Coffee Award @UN.Award recognizes top quality growers of the best coffee beans across the 🌎 pic.twitter.com/oQ9Jh4grRk

The Ernesto Illy awards has 27 contestants from different countries including Nicaragua, India, Honduras, Guatemala, Colombia, Costa Rica, Ethiopia, and Brazil. The annual award by the Illy Family recognises three best coffee from these countries and celebrates individual players who make the Illy espresso blend possible.

Jose Abelardo Diaz Enamorado from Honduras won the Best of the Best and Coffee Lovers Award, as determined by blind consumer tastings.

The top scoring coffees from each of the nine countries will be made available at select Illy retail locations.

By Waikwa Maina

A coffee farmers union has come up with a four-year strategy that it hopes will get the ailing sub-sector out of bed. It comprises value chain monitoring, marketing, succession through youth training and research.

The plan is to be implemented with strategic partners that include the French government, Kenya Co-operative Coffee Exporters (KCCE), Kenya Coffee Research Institute and Murang’a County Government.

The French government is financing implementation of the plan with Sh140 million, KCCE takes charge of the marketing while Coffee Research is responsible for agronomy services.

Mugama Farmers’ Co-operative Union, an umbrella body covering 43 societies, says the plan is to involve growers at all stages of production and marketing.

“Coffee growers have over the years complained of poor international markets and marketing agents as a major frustration. But there are other contributing factors such as poor husbandry and coffee farming succession plan,” says union manager Kimani Kirigwi.

Mr Kirigwi says the biggest challenge with commercial millers is that they keep farmers in the dark throughout the process.

“KCCE is farmers owned, its marketing systems are transparent where farmers are fully involved and consulted in the entire market system. Farmers are invited to monitor the grading and how the process is undertaken,” says the union chairman, Mr Francis Githiga.

On succession, Mr Kirigwi says the average age of a coffee farmer is 65, and that while many young people do not want to be associated with coffee farming citing poor payments, a contradiction is that most parents are unwilling to part with their bushes.

To address this challenge, the union is training more than 1,000 young people interested in coffee farming at the Coffee Research Institute, who will act as role models for other youths in their home areas.

He says coffee societies with many youths have maintained improved cherry quality and quantity, citing Kangunu Farmers’ Co-operative Society with highest percentage of young growers in Murang’a County that has maintained a Sh95 pay per kilogramme over the years while others get as low as Sh30 for the same quantity.

“We are transforming the 60-acre Ikundu Farm at Maragua to an ideal demonstration centre for coffee growers. The union is heavily investing towards achieving the goals, our partners are very supportive and we have no doubt about achieving our 300,000 kg target and transforming the farm into a resource centre,” says Mr Githiga.

Generally, production in Murang’a has dropped from over 130,000 metric tonnes in 1988 to about 50,000 metric tonnes in recent years.

In the strategic plan, the union intends to regain its production capacity, and the general manager is optimistic going by the trend witnessed in the last three years and innovations prior to the introduction of the strategic plan and partners engagement.

In the two years, output at Ikundu farm has improved from less than 50,000 kilos to 80,000 kilos.

“We have a milling plant and a roaster machine already installed by the county government that are idle for lack of adequate cherry to process.

KCCE will play a key role in specialty marketing. What I can tell the farmers is that there is hope in coffee and they should go back to their farms.

We have combined efforts with county government, Coffee Research Institute, and other organisations to revitalise the industry,” said Mr Githiga.

ANALYSIS

President John Magufuli yesterday appointed a new Central Bank governor in style, breaking a norm of choosing an economist; instead, he has opted for taxation law Professor Florens Luoga.

His appointment to replace Prof Benno Ndulu was a surprise — emerging in the course of another event to reward the members of the three committees he formed to investigate the mining sector.

His unexpected naming of Prof Luoga as successor to Prof Ndulu is a move which made the participants in the event at the State House burst into cheers.

Expressing why he ditched appointing an economist, President Magufuli said being a professor in taxation, Luoga would help in strengthening checks on capital flight by some foreign firms that use tax havens. “… taxation law is very crucial … it’s one area where we have been highly deceived,” Dr Magufuli said.

Shortly after his appointment, Prof Luoga told the journalists that he would first have to learn how to cope with his new brief, admitting he was not familiar with central bank activities.

Thanking the head of state for his appointment, Prof Luoga pledged that he would ensure that he brought his law taxation experience to bear on the Bank of Tanzania operations. “The challenge here is to make every person perform effectively,” he said.

Luoga currently serves as deputy vice-chancellor of the University of Dar es Salaam, the country’s premiere public university. In July, he was also appointed chairman of the board of directors of the Tanzania Revenue Authority (TRA). Prof Ndulu’s tenure as the sixth BoT governor is about to end in line with the requirements of the Bank of Tanzania Act, 2006. Prof Luoga will take office as the seventh governor of Central Bank since 1966. Section 8 (1) of the Act gives powers to the president to appoint the governor of Central Bank.

It reads, in part: “There shall be appointed by the President a Governor who shall, unless he dies or resigns or vacates or is removed from his office for good cause or is disqualified, hold office for a period of five years and shall be eligible for a re- appointment.”

Two days ago, President Magufuli hinted on Prof Luoga’s appointment after handing certificates of appreciation to various officials who participated in investigating and preparing reports on mineral sands. The Head of State also handed certificates to a team of experts that was officially formed to engage in negotiations with Barrick Gold.

The team was headed by the Minister for Justice and Constitutional Affairs, Professor Palamagamba Kabudi. President Magufuli said all experts who participated in the process did a good job and that the nation was proud of them.

“From these people, I have appointed one to head the Central Bank… Should I mention him now… he is Prof Luoga,” said President Magufuli. Economic and political analysts who spoke to The ‘Daily News’ described Prof Luoga as the “right person” to head the BoT.

University of Dar es Salaam Senior Lecturer Prof Haji Semboja also described Prof Luoga as a person “fit for the position” since he had a wide knowledge on taxation, procurement and commercial laws.

According to Prof Semboja, the Head of State had appointed Prof Luoga on account of his ability and patriotic spirit in serving the nation. “I am very confident that Prof Luoga fits to that position especially at this time when the fifth government is striving to make changes in various areas,” he noted.

He added: “Prof Luoga is smart and talented in analysing issues, he is an expert and keen on both economic and legal matters, I believe, he is going to do a good job,” Mzumbe University Senior Lecturer, Prof Honest Ngowi said traditionally most of BoT’s governors were economists or had economic related backgrounds.

He said the new appointed governor will need a strong economists team to support him since he is not an economist. “I believe Prof Luoga will deliver, but he needs a supporting team of economists to advise him,” he said.

According to Prof Ngowi, a Central Bank governor needs to understand various issues related to country’s economic stability, reaction of economic variables and many other of such nature. Dr Hildebrand Shayo, a banker and senior economist said President Magufuli had appointed Prof Luoga for good reasons.

He said many Tanzanians expected the Head of State to appoint an economist or someone from the circles of the World Bank. He added that the president had proved to the world that he appoints officials based on ability to perform.

By George Kamau

Central Bank of Kenya has returned to profit with a Ksh17 billion ($170 million) surplus for the year ended June despite having gaps in top management.

The regulator, which posted a Ksh4.6 billion ($46 million) loss last year, has more than half of its top executives holding office in an acting capacity, its policy making committee not fully constituted and the office of the deputy governor vacant.

Currently, the Monetary Policy Committee has five members against the required nine. The Cabinet Secretary of the National Treasury is yet to appoint new members following the death of Prof Francis Mwega in February and the exit of Farida Abdul whose term ended in April.

Election year

The delayed appointments mean that should any member be unavailable for MPC sittings then the committee, which sets the country’s monetary policy, cannot conduct business as its quorum is set at five.

The committee consists of the governor, deputy governor, two employees of CBK, National Treasury Permanent Secretary and four members appointed by the Treasury CS.

The CBK posted revaluation gains of Ksh8.5 billion ($85 million) compared with a Ksh19.9 billion ($199 million) loss last year due to depreciation of the shilling.

The shilling dropped from an average of 101.3 units to the dollar to 103.5 by the end of June, resulting in higher local values for the foreign currency held by the regulator.

Profit from ordinary operations dropped 28.2 per cent to Ksh9.9 billion ($99 million) due to growth in operating expenses and a decline in interest income and trading income associated with the forex business.

The bank earned Ksh1.2 billion ($12 million) from the overdraft facility it extended to the government, a decline from the Ksh4 billion ($40 million) in 2016.

Interest from commercial banks dropped 35.8 per cent to Ksh3.4 billion ($34 million).

“The drop is due to reduced utilisation of the government of Kenya overdraft facility and reduced advances to commercial banks due to a relatively stable market during the year as compared with the previous year,” the CBK said.

The cost of printing new currency rose to Ksh2.3 billion ($23 million) due to higher releases of notes and coins, this being an election year.

Penalties and fines collected from commercial banks dropped by Ksh10 million ($100,000) to Ksh30 million ($300,000) indicating improved discipline among financial players.

Despite the record profits, CBK will not pay a dividend to the government as it forwarded the surplus to its general reserves which now stand at Ksh114.2 billion ($1.14 billion).

The bank has not remitted a dividend for the past five years, a period throughout which the government borrowed heavily and would welcome relief in income from state corporations. The law allows the bank to retain at least 10 per cent of it profit.

Central Bank subsidiary, the Kenya School of Monetary Studies, which offers hospitality and tutorial services reported an income of Ksh379 million ($3.8 million), up from Ksh217 million ($2.17 million) the previous year.

Licence fees from commercial banks and forex bureaus rose to Ksh292 million ($2.92 million) from Ksh250 million ($2.5 million) as CBK welcomed Dubai Islamic Bank, SBM Holdings and Mayfair Bank into the sector.

Change of guard

Regarding the gaps in management, President Kenyatta has not appointed a deputy governor to the CBK following the exit of Dr Haron Siruma two years ago.

The bank is supposed to have two deputy governors, with one expected to be in charge of operations and the other monetary policy issues.

Currently, Sheila M’Mbijjiwe is the only deputy governor.

In the past financial year, the bank did not conduct a single board meeting due to failure by the Executive to appoint board members who were finally gazetted last November.

Seven of its 12 directors currently hold office in an acting capacity, with some having acted for up to four years.

The CBK had announced plans to undertake restructuring exercise in 2014 and advertised vacancies for eight director’s positions and two heads of department.

A change of guard in 2015 saw a plan drawn up by international advisory firm PriceWaterhouseCoopers shelved with the lack of a substantive board to take the matter forward.

Peter Wanyagi has been acting director for currency operations and branch administration department since July 12, 2013.

Peter Kigondu was appointed acting director in charge of Procurement, Logistics and Supplies in April, replacing Erastus Miriti who retired before he was confirmed in the position he held in acting capacity for two years.

Others holding brief are Terry Ng’ang’a as head of human resources, since 2015, John Birech, financial markets from 2015 and Mwenda Marete, in charge of banking, national payments and risk management, since last year.

Joshua Kimoro and Moses Ngotho were also given offices earlier this year in acting capacities. Mr Kimoro is the acting executive director of the Kenya School of Monetary Studies, replacing the long serving Prof Kinandu Muragu while Mr Ngotho is acting head of finance and ICT.