Wednesday, November 15, 2017

Tanzanians advised to but shares in bouses

Tanzanians have been advised to develop a culture of buying shares on initial public offers (IPOs) if they have to effectively participate to and own the country’s economy. Through IPOs, companies float shares publicly, giving members of the public an opportunity to own the economy. TCCIA Investment PLC Board Chairman Aloys Mwamanga said many Tanzanians were unnecessarily missing opportunities to buy shares and ultimately owning the economy. “Shares are certificates that show your commitment and preparedness to really own the economy,” Mr Mwamanga told the company’s recently organised 12th Annual General Meeting. He said the government under President John Magufuli is determined to have all Tanzanians participating effectively to the economy, the goal that can be realised easily through purchase of shares in public companies. “Share trading plays a critical role towards realising the mid-sized, industrial based economy...many companies raise capitals and invest in big projects through sales of shares,” he explained. Established in 2005, TCCIA Investment started buying shares in NMB Bank, gradually growing its current 28bn/- capital. Apart from NMB, TCCIA Investment has shares in Twiga Cement, Tanzania Cigarette Company, SWISSPORT, CRDB Bank, Simba Cement, Dar es Salaam Commercial Bank (DCB) and Tanzania Breweries Limited, all listed on the Dar es Salaam Stock Exchange, Mr Mwamanga said. The firm’s Chief Executive Officer who doubles as the Board Secretary, Mr Donald Kamori described this year’s 12th AGM as a success, saying new shareholders were trained on shares. “We discovered that many people want to see money re maining in hands or banks. They are ignorant on shares, which they see as a new tradition and not appropriate for their money,” Mr Kamori said. He said through annual seminars, the understanding of investments in shares is on the rise and called for more public sensitisation on shares. One shareholder, Ms Salma Mpokonya, conceded that she knew nothing about shares before the seminar, but was now conversant with the concept. “In the past I had wrong notion that only affluent people were eligible to own shares,” she said, urging all Tanzanians to embrace share buying habit for their bright future, economically.

Entropy is ruining EAC integration dream

The week was a mixed bag of fortune where Rwanda was acclaimed by World Bank among the globe’s top 50 investment-friendly countries, got ranked 4th globally by World Economic Forum among nations with the least gender gap. However, these wins came amid regional body scratches. Although body scratches taint the image of a beautiful car, they often don’t affect the engine’s capacity to continue performing efficiently; for today, let’s have this analogy in mind as we reflect on one neighbour’s rather messy megaphone diplomacy campaign against Kigali. Rwanda has suffered countless body scratches ever since it set out on its path to self-re-discovery, renaissance and transformation; it is a path that has no space for the halfhearted as the President said in a recent speech. It’s a path that requires full commitment, to follow. Like body tattoos, these scratches are lined all over Rwanda but they have never succeeded in stopping its engine from powering the country towards its development agenda, this explains why, in spite of many setbacks, this country has never lost its winning attitude. Also, these scratches are inferior, compared to the deep scars of history sustained through the tough battles to liberate this nation from the abyss. But entropy is one major obstacle that stands in Rwanda’s way as it firmly continues walking the path towards further transformation. To define it, entropy is a lack of order or predictability of a situation, leading to gradual decline into disorder - one thing Rwanda hasn’t had on its side is time. While for most countries, the epoch of colonialism helped build firm economic foundations to support future governments. In Rwanda’s case, colonialism instead of building, destroyed the social stratum of the nation when it embarked on the campaign of sowing seeds of ethnic hatred; the result wasn’t just a body scratch, it was a blow that blew the engine causing a national standstill. The engine would be restarted in July 1994, after bringing the car to a grinding halt from its mad rush down the hill before it could hit the bottom potentially killing everyone onboard. The survivors of that national tragedy have since been running a game of catch-up, building from almost zero. As the life-span of Rwandans rose above 70 years of age, that of regional fortune continues to suffer, often dying before the age of five, in many a neighbour’s case. With entropy entrenched in the region’s politics, the spirit of planning for long-term development has suffered great damage. EAC integration projects are among those that are suffocating underneath the heavy weight and bad breathe of this regional entropy. On July 1, 2013, I wrote: “So when the trinity of Kagame, Kenyatta and Kaguta met in Kampala last week, it was good news when Rwandans, Kenyans and Ugandans heard that their leaders had discussed not politics but projects that would ease trade and increase business opportunities for them.” Thousands of words were typed in positive commentary about the then ‘new hope for EAC regional integration, the collaboration of the three states to invest in infrastructural projects on the northern corridor and help East Africans move faster towards their transformation. A secretariat was set up to coordinate these projects and every quarter, Presidents of the three countries would meet to get updated by their technical teams, to sign off things and command action on ready to implement projects. In the media, we loved to call it ‘a new wave of political will.” We all hoped. We all almost thought, after all, politicians can be trusted. We though for once, they had added their respective national dreams to create one big dream that would have space for all our aspirations. The dream had even started expanding in all directions, spreading to South Sudan, Ethiopia and at some point, DR Congo. Fast forward into 2017; the dream has fazed. For all the positive commentary, it appears we were all in a slumber; there was never a dream. I mean, what else would explain this tendency to move five steps forward and then eight backwards? Thanks to our entropy, the real issues that should concern the attention of our governments have been thrown under the bus as focus shifted to domestic political squabbles. In Kenya, a second presidential election in two months was concluded recently but a 3rd might be on the cards and demos have brought business to a standstill including in Mombasa where at least 30 percent of Rwanda’s external trade is processed. No one is talking about the Standard Gauge railway anymore; there’s no more talk about developing infrastructure that would connect the three countries to and enable Rwanda to buy additional electricity from Kenya and Ethiopia. There’s no talk of the joint oil refinery investment; nothing. The last time our leaders met over this business was in April 2016. It is almost 2018; seven meetings skipped without explanation and I hear some partners have even developed new ideas, totally different from the agreed to direction; a classical example of entropy.

SOUIRCE: DAILY NEWSPAPER

Digital transformation to farmers is in place

Full implementation of digital marketplace is soon to become a relief to smallholder farmers engaged in organic farming who have been struggling to reap reasonable prices and reliable markets for their produce. And, already some 420 tomato farmers in Iringa have expressed willingness to use the application to sell their produce. Through a mobile application developed by an Israeli company Farmster, the farmers will be connected to local and international buyers where they can negotiate and settle for reasonable offers for their crops. “Many farmers have been held back by lack of reliable markets but this new application will enable them to have a wider access to buyers,” the Chief Executive Officer and founder of Farmster, Mr Adam Abramson, said in Dar es Salaam on Monday evening. The application is available to farmers with either smart phones or the normal cell phones, he explained, expressing optimism that the technology will do away with middlemen who have been exploiting farmers. The expat made the explanation during a presentation to members of Living Green Network at an event where the company and network signed a Memorandum of Understanding (MoU) for implementation of the initiative. The CEO of Living Green Network, Mr Adam Ngamange, was highly optimistic that the arrangement would enable the farmers to engage in fully-fledged commercial farming. “Markets for organic crops are available globally but our farmers have not been able to access the opportunities, this is the right time for them since you can connect to buyers even before harvesting the crops,” Mr Ngamange said. During the signing ceremony, the network which has 6,000 members signed an agreement with B and B Insurance Brokers to provide insurance cover for the farmers against risks such as floods, drought, fire as well as diseases. Mr Ngamange pointed further that plans are to engage Tanzania Women Bank (TWB) and Equity Bank to provide credit facilities to members of the network. A farmer from Bagamoyo in Coast Region, Mr Walter Muze, spoke highly of the technology, describing it as a relief to farmers who have been falling ‘prey’ to greedy middlemen. He was equally optimistic that the technology will play a great deal to members of the network who are engaged in block farming in Morogoro Region.

East Africa Currency to be worked out by 2014

EAST African Community (EAC) states are aspiring for a single EAC currency by 2024. Tanzania, Kenya and Uganda are determined to merge their respective shillings with Rwanda and Burundian Francs to form the single legal tender for the bloc in the next seven years. South Sudan will also lose its relatively valuable pound, melting Juba’s currency into the envisaged EA currency. Latest reports on the process for the proposed Monetary Union (MU) for the six EAC member states indicate that the envisaged MU is expected in 2024, with introduction of the common currency to replace the national currencies as well as establishment of the regional central bank, East Africa Central Bank (EACB). “Transition to the EA Monetary Union (EAMU) is as a two-phase process, with the initial convergence phase enabling partners to work towards achieving preconditions designed to limit the union’s exposure to internal economic strains,” said EAC Principal Communication Officer Simon Owaka. He revealed the preconditions as macroeconomic convergence criteria, full implementation of the Common Market protocol, establishment of institutions to support the MU and harmonization of policies and practices. “Once these preconditions are satisfied, partners will enter the final conversion phase, announcing a predetermined date for the union formation.” According to the EAMU protocol, the EAC members have agreed on four primary convergence criteria, which all partner states have to attain and maintain for at least three years before joining the MU. The criteria are headline inflation of eight per cent ceiling, reserve cover of 4.5 months of import; ceiling on overall fiscal deficit of three per cent of GDP, including grants; as well as ceiling on gross public debt of 50 per cent of GDP in net present value terms. With exception of South Sudan, current annual headline inflation in all countries is below eight per cent, with all EAC partners, except Kenya, having debt to GDP ratios of below 50 per cent. According to Mr Owaka, besides Uganda and Kenya, other EAC countries have not achieved the 4.5 months of import cover criterion since 2014. Also compliance with the fiscal deficit criterion, including grants, has averagely been challenging for most EAC partners, especially South Sudan, Kenya and Burundi. But, the targets have to be achieved by 2021 and there is therefore no reason to doubt that any of EAC state will fail to achieve the convergence targets in 2024. Central Banks in Tanzania, Kenya, Uganda, Rwanda and Burundi have agreed to converge in terms of monetary policy regimes and exchange rate policies, moving from reserve money based framework to forward-looking price based monetary policy framework by December 2018. “The Bank of Uganda has already taken bold steps, having introduced the Inflation Targeting Lite (ITL) in July 2011 and replacing the reserve money with interest rate as operating target. Kenya has also adopted the forward-looking approach to monetary policy, with a view to move towards inflation targeting,” said the EAC officer. Central banks in the EAC states are currently implementing legal, regulatory and supervisory amendments in their national legal instruments to harmonise banking supervision and regulatory frameworks in the region. Two policy documents have so far been developed to guide tax harmonization process. The EAC Tax Treaty Policy was developed to provide guideline framework for future treaty negotiations by EAC partner states. And, the EAC Model Tax treaty is expected to further develop partner states’ economic relationship and enhance cooperation in tax issues to eliminate double taxation without creating opportunities for tax evasion or avoidance. The partner states have developed the draft Policy Framework for Domestic Tax harmonization, which identifies possible areas for harmonization and coordination as well as establishing the Regional Technical Working Group (RTWG) on harmonization of national laws. EAC