Posts tagged as: standard

Kenya: Lenders Face Fresh Pressure Over Credit

By Maryanne Gicobi

Kenyan banks are expected to shy away from lending due to the cap on borrowing rate and a new set of global accounting rules.

The new accounting standards require banks to make higher loan loss provisions to withstand any possible shocks.

Barclays Bank of Kenya chief executive Jeremy Awori said with the coming into force of the new guidelines in January 2018 known as International Financial Reporting Standard 9 (IFRS), banks will be moving away from unsecured and small business loans towards government securities.

Data shows that banks have moved more than Ksh104 billion ($1 billion) of customer deposits into government securities since the capping law came to effect.

In a departure from the past, the new accounting standard, IFRS 9, will require banks to provide a certain amount of money on a loans based on historic credit on that particular portfolio in the lender’s books.

There will be a transitional increase in bank’s balance sheet provisions in line with the IFRS 9 requirements. Currently, loans are impaired based on the actual performance of the money borrowed.

“When you add that cost along with the interest rate cap, it makes it hard to get a decent return for banks. So you will find with a cap of 14 per cent and this impairment level is high and your returns now start becoming sub-optimal and it will actually be easier and less risky to invest in government security,” said Mr Awori at the sidelines of the third annual East Africa Investor Conference.

Unsecured lending

Regional lender Equity Bank last month announced it was also moving away from unsecured lending due to the IFRS 9, saying the use of historical ratio to make provisions at the point of booking the loans was not sustainable with a margin of seven per cent.

According to CBK data, growth of credit to the private sector fell to 2.1 per cent over the 12 months to May 2017, blamed on the rate caps and pre-election jitters.

The Central Bank of Kenya is also in the process of reviewing the interest rate cap. But CBK Governor Patrick Njoroge has warned that if the law were repealed, banks would need to be disciplined not to charge the high interest rates that they have been charging before the ceiling was put.

“CBK’s study on impact on the interest rate cap has progressed and it is clear to us that capping has been problematic in many ways and going forward we will reverse the measures and let ourselves go back to a regime with freely determined interest rates but in a disciplined environment,” said Dr Njoroge.

Mr Awori was also of the same opinion saying: “The banking industry is mindful that even if the law is revised or reviewed we are not going back to the days where the interest was high, so we need to try and keep interest rate at low as possible to extend credit to the consumers.”

Last year’s capping of interest rates shaved Ksh26.3 billion ($255.6 million) off commercial banks’ lending income in the first six months of the year, setting the lenders up for lower profitability this year.

The capping law into effect in September 2016, limiting interest charges to a maximum of four percentage points above the prevailing Central Bank Rate, currently standing at 10 per cent.

Kenya

Duale to Seek MPs Approval of Sh11.5 Billion for Poll

Majority Leader in the National Assembly Aden Duale says he will be requesting MPs to approve the release of Sh11.5… Read more »

Major Hurdles Ahead of Election Rerun

Doubts are growing over Kenya’s ability to hold a rerun of its presidential election in just one month as key players remain unable to agree on how to conduct a credible vote.

Legalbrief reports that there have been several significant developments over the past week which indicate that the chasm between all the key role players is widening.

Riots last week broke out in the opposition stronghold of Kisumu city after a rumour spread about alleged efforts to rig the election. Several people were injured as police clashed with youths who blocked roads in the south-western city and threw stones.

In another significant development, opposition MPs boycotted the opening of Parliament to protest against President Uhuru Kenyatta’s decision to address it after a court annulled his election win.

BBC News reports that they say it should not have been convened until after the election rerun slated for 17 October.

Kenyatta, however, said he still had the power to convene Parliament. ‘The set term of a President is embedded until a new one is sworn in as per the constitution,’ he told lawmakers. ‘I want to assure every Kenyan and the world that every arm of government is in place and operational,’ he added. Full BBC News report

Analysts say bickering on all sides and confusion over the process have only increased as the clock ticks down to the fresh vote which was called after the Supreme Court annulled the initial election.

A report on the News24 site notes that the opposition has vowed to boycott the election if its list of demands is not met, including staff changes at the electoral commission (IEBC), which it accuses of rigging the poll.

‘ The challenges are pretty extraordinary,’ said John Githongo, a prominent anti-corruption campaigner in Kenya.

A key hurdle is that the Supreme Court has yet to deliver its full judgment detailing why exactly it decided to annul Kenyatta’s victory. Chief Justice David Maraga mentioned only ‘irregularities and illegalities’, notably in the transmission of election results.

The court has until Friday to deliver the full ruling, which would give the IEBC little time to make any necessary changes. ‘It is very uncertain,’ said Nic Cheeseman, a professor of African politics at the University of Birmingham in England. Full report on the News24 site

An audit of the electronic system used to tally votes in the cancelled poll showed no manipulation of data, the French biometrics firm that supplied the system has confirmed.

Opposition leader Raila Odinga has accused the company, OT-Morpho, of being complicit in alleged rigging of the election.

OT-Morpho said an ‘in-depth audit’ of the system showed the opposition’s claims about hacking were untrue. The Nation reports that COO Frederic Beylier said the audit, undertaken with help from external experts from security software companies, had shown the system ‘in no way suffered manipulation of data, attacks, attempts to penetrate the system or anything of that kind’.

OT-Morpho supplied the 45 000 tablets used to identify voters biometrically and an associated system used to transmit the results of votes counted by electoral officials as well as a photograph of the paper form 34A on which votes were tallied. Full report in The Nation

Kenya’s electoral body must be transformed before the election rerun as its credibility to hold a free and fair vote ‘is seriously questionable’.

That’s the view of political analyst Benji Ndolo who told News24 that the IEBC must be ‘sincerely reformed’ before the election rerun to avoid a serious ‘negative impact on the east African country’s economy’. Ndolo said that there were a lot of issues at stake if the election rerun was again disputed.

‘ Heads must roll. The institution has to be outside of the influence of any outside players. This is why the opposition has moved to have the chairperson moved and held accountable,’ Ndolo is quoted in the report as saying. Full report on the News24 site

Meanwhile, Jubilee MPs and senators are planning to trim the powers of the judiciary following the Supreme Court’s ruling which annulled Kenyatta’s poll win.

Senate Majority Leader Kipchumba Murkomen confirmed that they will enact laws which will deny the Supreme Court powers to overturn presidential election verdicts.

‘ We shall pass laws to protect the decision of the voter to stop some institutions from making decisions that annul the decision of a voter,’ he said. A report on the allAfrica site notes that the senator said the purpose of the law will be to protect the right of citizens where their sovereign right is robbed through ‘legal technicalities’. The law will clarify the foundations of our democracy because the decision of the Supreme Court is unacceptable,’ Murkomen added, according to the report.

Kenyatta says his criticism of the Chief Justice should not be viewed as an attack on Maraga’s Kisii community.

The Standard reports that he was addressing a delegation of more than 15 000 members of the Abagusii community at State House. Kenyatta said the Supreme Court decision to nullify his presidential election win was the most painful moment of his life.

He said his attack on Maraga and the three judges was justified because he believed the highest court in the land had erred in its ruling. Odinga claimed that the criticism of Maraga – who was part of the panel that nullified the election result – was an attack on his community. Full report in The Standard

Tanzania: Govt Looking for Financiers to Extend SGR

By Rosemary Mirondo

Dar es Salaam — The government is looking for investors to finance the construction of the remaining part of the Standard Gauge Railway (SGR) that will connect Tanzania with some landlocked countries.

The government wants to upgrade the railway from Dar es Salaam to Kigoma and Dar es Salaa-Mwanza into the standard gauge.

Already the construction of the first part comprising of 205km from Dar es Salaam to Morogoro and the government expects to sign a contract for the second part (Morogoro-Makutupora in Dodoma) soon.

The Minister for Works, Transport and Communication Prof Makame Mbarawa now says the government was looking for investors who will finance the next part which stretches from Dodoma through Tabora to Isaka and Kwanza.

“For the second part of the construction from Morogoro to Makutupora, 336km, we expect to sign a contract in two weeks’ time,” he said during the 8th East and Central Africa Road and Rail Infrastructure summit 2017 yesterday.

He said Tanzania plans to connect with neighboring landlocked countries of Burundi, DR Congo, Rwanda, Uganda and Zambia which depend on the Tanzania Sea and Lake Ports for their imports and exports through the Standard Guage Railways.

Tanzania

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Lesotho: NUL Showcases Products Range

By Mamohlakola Letuka

THE National University of Lesotho (NUL) Innovation Hub recently unveiled four new products including sorghum biscuits and soap.

The products were unveiled at the recent annual Science, Technology and Innovation Week at Manthabiseng Convection Centre in Maseru.

The Innovation Hub also unveiled the Pius IIV incubator for chickens.

The Minister of Education and Training, Mokhele Moletsane, officially unveiled the products on behalf of NUL at the function which was held by the latter in collaboration with the Ministry of Communication, Science and Technology.

Mr Moletsane acknowledged the important role played by science and technology in the country’s development, saying, “It is encouraging to see that the products that were made by local scientists”.

“Scientific research and innovation are gaining momentum and Lesotho will begin to improve economically.”

He called for the establishment of institutions to coordinate research activities and ensure results do not just end up in scientific papers instead of being fully utiliised for the benefit of the country.

He said it was also imperative to ensure researchers were adequately funded to enable them to contribute to overall national development.

“In less developed countries like Lesotho research endeavours are halted because of lack of resources, yet it is the same research that has the potential to lift the country out of poverty,” he said, adding, “We need to create mechanisms to fund scientific researches the way they need to be funded”.

septemberHe added that the nutritious snacks made out of local sorghum are a clear testimony that Lesotho can do better in nutritional production.

Mr Moletsane also promised to encourage the cabinet to buy the biscuits for their weekly sittings in support of local products.

Speaking on behalf of the sponsors, Lesotho Post Bank Head of Human Resource, Itumeleng Matela, called on companies to support NUL Innovations so that we can develop the nation together.

In conclusion of the event, six high school students from St Mary’s, Thetsane and Christ the King High Schools were awarded trophies and prize money by Standard Bank for their projects.

Lesotho

Political Violence Unleashes ‘Reign of Terror’ – Opposition

The June 2017 elections were supposed to soothe the troubled politics of Lesotho, a tiny enclave surrounded on all sides… Read more »

Kenya: KCB Ranked Most Attractive Bank With Long-Term Growth Prospects

By Margaret Njugunah

Nairobi — KCB Group is Kenya’s most attractive bank based on its strong franchise value and the intrinsic value score.

Cytonn Investment’s Half-year banking sector report places KCB ahead of Co-operative Bank, Diamond Trust Bank and NIC Bank.

National Bank of Kenya, HF Group and Standard Chartered Bank ranked the lowest respectively among the 11 listed banks.

“The franchise score measures the broad and comprehensive business strength of the company across 13 different metrics, and the intrinsic score measures the investment return potential,” said Investment Analyst Caleb Mugendi.

Equity Group improved to Position 5 from Position 6 due to impressive Net Interest Margin at 9.7 percent, above industry average of 8.6 percent, and a Return on average Equity of 19.7 percent, above the industry average of 18.1 percent, with the bank adequately diversified with Non-Funded income at 42.0 percent of the total operating income, higher than the industry average of 31.3 percent.

On the other hand, Standard Chartered dropped from position 8 in the previous year due to a low intrinsic valuation, with a potential return of -12. The bank has been weighed down by high non-performing loans at 13.1 percent, versus an industry average of 11.5 percent, which affected it’s Franchise Value ranking.

The report also analyzed the results of the listed banks in the period so as to determine which banks are the most attractive and stable for investment from a franchise value and from a future growth opportunity perspective.

Kenya

Duale to Seek MPs Approval of Sh11.5 Billion for Poll

Majority Leader in the National Assembly Aden Duale says he will be requesting MPs to approve the release of Sh11.5… Read more »

Nigeria: NPA Reiterates Concern About Safety of Nigeria’s Territorial Waters

By Eromosele Abiodun

The Managing Director of the Nigerian Ports Authority (NPA), Hadiza Bala Usman has reiterated management’s concern over the safety and security of operations and activities on the nation’s territorial waters.

She said this through the organisation’s Executive Director in charge of Finance and Administration, Mohammed Bello Koko, who represented her when the federal government team for the implementation of the Harmonised Standard Operating Procedure on the Arrest, Detention and Prosecution of Offenders in the Maritime Environment, paid a working visit to the corporate headquarters of the NPA in Marina, Lagos.

Addressing stakeholders during the session, the Managing Director pledged to synergise with the committee in order to holistically harmonise issues from stakeholders towards covering all areas of concern in respect of the subject in the front burner.

She stated that the NPA management was paying premium towards contributing effectively in the area of providing arrested vessels location on the nation’s waters while calling for swift actions to be taken in order to evacuate such vessels, an activity she said would create a better enabling environment for greater operational efficiency admit a safe and secured environment, restoring sanity at our anchorages.

She added that it would help generate more funds for the nation.

Furthermore, she stated that the NPA was soliciting support from stakeholders on the subject adding that the place of information sharing in attaining a successful task in this respect cannot be over emphasised.

Earlier, the chairman of the committee Rear Admiral FD Bobai informed the NPA management that the committee came as part of sensitisation efforts at parleying with stakeholders to ensure adequate collaboration and cooperation in efforts aimed at coordinating the agenda and targets set before them so as to bring about a safe Maritime Harbours in line with best practices.

Bobai told stakeholders that the major agenda facing the committee was to partner regional and sub-regional governance on Maritime safety and security for the nation to harness plausible natural endowment accruable to her by nature and consequently join the comity successful of Maritime nations.

He commended the NPA for the milestones achieved in various facets and enjoined that they should not relent as the task of lifting the nation up was for all.

Nigeria

Govt to Swear in New Lawyers, Including Professor Indicted for Sex Scandal

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Ethiopia: Company Commences Aluminum Export

By Robel Yohannes

An Ethiopian aluminum company – B&C Aluminum PLC – is to start exporting aluminum products to Egypt.

This is said to have positive implications on the country’s Metals and Engineering sector. Industry State Minister Dr. Alemu Sime said that the Company’s endeavor does not only contribute in terms of bringing in foreign currency, but in terms of increasing their productivity and competitiveness as well.

He added that as the Metals and Engineering sector is prioritized to substitute import and save foreign currency, the local investors that are involved in the sector are expected to save foreign currency by substituting importation of similar products.

“As country’s foreign currency demand is increasing hugely parallel to nation’s socio-economic development, it would be beneficial if every sector can be involved in export.”

Mentioning the country’s industry policy priority in producing goods that are internationally competitive, the State Minister pointed out that exporting aluminum to foreign market allows the country to see where it stands in terms of the global market standard, demand and competitiveness.

“Also, it has implication with regards to the industry sector in terms of strengthening our capability and competitiveness by scaling up technology.”

Furthermore, he touched upon the multidimensional support the government has been giving to the manufacturing sector in general, ranging from providing various tax incentives to sharing the cost in bringing in experts from abroad to the sector.

Company CEO Haimanot Abate relays his belief that the implication of company’s exportation to Egypt cannot be underestimated given the fact that Egypt has huge extrusion industry.

The CEO also mentioned Company’s role in filling the local market demand for aluminum and in saving foreign currency. As of now, we believe we have 30-40 percent of the local market share, producing 10 tons a day, he added.

According to him, the Company has been involved in various big construction gigs such as the 40-60 condominium housing scheme at ‘Crown’ and ‘Senga Tera’ sites.

Haimanot also talked about the interlinkage they have with various small and micro enterprises, and the government’s support. “The industry sector is not a sector, where you clap only with one hand; it needs the involvement of all the relevant stakeholders. We should take the industry level of our country to new heights and to the level where other countries have reached by working hand in hand.”

According to the Owner and Managing Director of the Company, Biruk Haile, the significance of the event far exceeds foreign currency and filling local market demand for aluminum.

For him, it is a showcase that the country is capable of doing anything up to the level and standard of other countries. It also shows the country’s next generation entrepreneurs and industrialists’ capability to take over the mantle when the country’s economy transfer to an industry led one.

He further stated that it shows other Ethiopians that they can compete with other countries as long as they work hard, and he added; “we showed that it is possible by exporting aluminum products to a country that has huge extrusion industry by meeting their standard and breaking into their market.”

It is learned that the Company operates with an investment capital of 40 to 60 million ETB, with an employees of 550 to 600 Ethiopians.

Ethiopia

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Namibia: Standard Bank Supports Retirement Funds Industry

Windhoek — In its ongoing quest to promote national development objectives in the country, Standard Bank is the only commercial bank gave its support to the launch of the Retirement Funds Institute of Namibia’s (RFIN) 11th Annual Conference slated for Swakopmund as on September 14 and 15.

The upcoming conference presents the opportunity for relevant stakeholders in this sector to deliberate on policies that continue to drive the economy and the Capital market by building dialogue confronting topical issues affecting the retirement industry and to network.

As a platinum sponsor, Standard Bank calls Namibia its home and it is passionate in driving her growth. To this note, the Bank has contributed N$50,000 towards this year’s RFIN conference, continuing with its support to this sector over the years.

“We are proud to be associated with RFIN, which has the role to protect, promote and advance the interests of retirement funds. This strongly aligns with our corporate investment banking Investor Services offering which encompasses the safekeeping of securities, securities settlements and the processing of corporate actions and income collection, Securities Lending, Investment Administration, Issuer Serves to mention but a few our service offering,” said Standard Bank’s head of investor services, Corny Zaaruka. She further added that Standard Bank is inspired to advance national development objectives. “We believe the conference is critical for joint collaborations as such deliberations through various speakers is important for the industry to reach common goals and objectives, well as enhance inclusivity,” added Zaaruka, This year’s RFIN’s conference will be held under the theme: “Contemporary Developments in the Local Retirement Funds Industry.”

Namibia

Vendors Demonstrate Against New Open Market

Hundreds of disgruntled vendors yesterday demonstrated peacefully at the Helao Nafidi town at Oshikango in the Ohangwena… Read more »

Kenya Borrowed Sh430 Billion in Four Months – Report

By David Mwere

The government borrowed over Sh430 billion between February 1 and June 30 this year, a report tabled in the National Assembly shows.

The, according the National Treasury, will be used to finance various development projects.

29 LOANS

The report tabled by Leader of Majority Aden Duale on Wednesday shows the amount will come from the 29 loans signed between the government and bilateral, multilateral and commercial creditors.

The document notes that some Sh156 billion worth of the loans from commercial creditors– PTA Bank and a consortium of lenders comprising the Standard Chartered Bank, Standard Bank, CITI Bank and Rand Merchant bank–has already been disbursed.

Disbursements from other bilateral and multilateral lenders are expected over the medium term, the document states.

The report comes amid concerns over Kenya’s growing appetite for loans, with some pundits arguing that the country may be borrowing more than it can sustain.

The National Treasury has dismissed the claims.

The loans are mainly to fund infrastructure projects, including roads, irrigation, water supply, energy, health and education.

KENYA POWER

The report is a requirement by the Public Finance Management Act that compels National Treasury Cabinet secretary to update the National Assembly on all the new loans obtained from outside the country or denominated in foreign currency after every four months.

Irrigation and water supply projects include Sh2.3 bilion Ruiru II water supply funded by France and Sh20.8 billion Kenya Karimenu II Dam water project funded by Exim Bank.

Others are Kimwarer Dam at Sh4.3 billion, Arror Dam Trance I and II at Sh38.6 billion, funded by Intensa Sao Paulo of Italy, and water sanitation development project worth Sh30 billion.

Under the energy sector, the government intends to modernise Kenya Power distribution system and strengthen it at a cost of Sh7.6 billion and pump Sh8.8 billion into Kenya Power transmission expansion project.

The two projects funded by the Exim Bank of China seek to improve stability of electricity supply, lower the costs of transmission as well as that of doing business.

SH40 BILLION

The Last Mile connectivity programme will be financed by France to improve the stability of electricity supply at a cost of Sh10 billion as well as the Sh3 billion Rabai- Kilifi transmission line to diversify and increase electricity generation.

In the roads sector, over Sh40 billion will be spent on the proposed North Eastern transport improvement project, Kapchorwa-Suam-Kitale and Eldoret bypass project and construction of Nairobi ICD Yard and access roads.

Others are the Kenya-South Sudan regional corridor as well as the Mombasa Port road access project.

The road projects will be financed by African Development Bank, African Development Fund and Exim Bank of China.

In the education sector, Sh14 billion from Exim Bank will finance the Kenya Technical and Vocational Training laboratories project with the Health sector getting Sh1 billion for cancer centre at Kisii Hospital.

Over 1000 Participants Set for Chemususu Dam Half Marathon

Nairobi — Over 20 elite athletes have confirmed participation at this year’s Chemususu Dam Half Marathon to be graced by 1992 Olympic champion Matthew Birir when the annual race will held on Saturday in Eldama Ravine, Baringo County.

Speaking during the launch of the fourth edition that received Sh6m sponsorship boost from various corporate on Wednesday, chairman of the race Josephat Kigen said they are targeting over 1000 participants as they aim to fundraise to help educate the needy in the Eldama Ravine constituency.

“The objective of the race is to raise funds to educate the needy bright children in the Eldama Ravine constituency. We are expecting atleast 1000 runners because the race is getting popular. We have already 14 elite athletes so we shall have over 20 of them. This race is becoming a national function and our hope in future is to reach the heights of Ndakaini Half Marathon,” Kigen said.

Delhi, 2010 Commonwealth Games women’s marathon champion Irene Jerotich who comes from the region has called on upcoming athletes to compete in the race on Saturday, because the event is a breeding ground for world beaters.

“Chemususu has helped the village and t has been the training ground for many champions. This initiative has brought upcoming athletes who have gone ahead to win major races in the world. As home residents we urge other athletes to come and join us in this event,” Jerotich said.

Jerotich, who won the 2006 Nairobi Standard Chartered Marathon, has been out of competition for four years after picking a toe injury but she is optimistic of returning to active racing in 2018.

The race received a major boost including Sh1.5m sponsorship from the title sponsors Rift Valley water services, Sh500,000 each from Kenya Power and Lightening Company, Kenya Commercial Bank, Transnational Bank ,CFC Stanbic Bank and Kenya Civil Aviation among others.

This is the first time the race has been included in the Athletics Kenya calendar and will see athletes compete in the 21km and 10 km races.

Kenya

Duale to Seek MPs Approval of Sh11.5 Billion for Poll

Majority Leader in the National Assembly Aden Duale says he will be requesting MPs to approve the release of Sh11.5… Read more »

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