Business

Kenya wants East African Portland Cement Company case dismissed

Nairobi, Kenya: The Government wants the case filed against it and the Capital Markets Authority (CMA) by East African Portland Cement Company dismissed as it does not represent the position of the company’s leadership. The Government says the case that was filed to challenge the decision by CMA to suspend resolutions passed during the company’s annual general meeting held on December 17 last year was not properly placed before the court as it was signed by three directors out of the six. Kamau Karori, who is representing the Ministry of Industrialisation in the case, said the resolution to file the case before Justice Mumbi Ngugi was signed and passed by a minority of the directors as opposed to the four majority that are required by the Articles of Association governing the company. He said some of the directors who swore the affidavits before the court had not been authorised by the company’s Chief Executive Officer Kephar Tande and that the alleged fourth director was subject to suspension by the capital markets regulator. Kamau said the appointment of Didier Tresarrieu as a director to replace Hamish Keith, who had opted to resign, was part of the resolutions reached during the AGM, yet he had been suspended. By John Muthoni, The Standard

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Employee welfare key in security matters

With the recent surge of insecurity in Kenya, private security companies have been brought to the limelight as a supplementary means of boosting security. Tony Sahni One lingering issue that has always plagued the sector has been the welfare of the security guards who have been tasked with the weighty responsibility of safe-guarding lives and property. Industry players and responsible security providers have continued to champion the rights of the security guard as a means of bolstering security in the country. Speaking on the issue, outgoing Kenya Security Industry Association (KSIA) chairman Tony Sahni, claimed the association has been in the forefront of ensuring all their member companies pay their guards the proper wages as dictated by law. Mr. Sahni who is also the Group Managing Director of Securex Agencies East Africa, insists that private security companies have had to pull up their socks when it comes to employee welfare. Mr. Sahni was speaking at the official unveiling of the Securex Scholarship Program. The program will see the security company pay for the secondary school fees of five bright children of employees who have been with the company for over ten years. The first recipients of the funds were Dickson Masinde, Timothy Wekesa, David Cheruiyot, Tom Lubega and Godfrey Milimo. “We felt the need to say thank you to those employees who have been with the company for such a long period,” said Mr. Sahni, “and this was our way of also giving back to the community, because we get to educate a child, who may as well transform the society in future,” he concluded.

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Uganda: Mobile money rates for paying utility bills increase

MTN Mobile Money has increased its transmission charges for payment of utility bills. The affected bills are those for National Water and Sewerage Corporation and Umeme electricity. For bills between sh500 to sh2500, the charges increased from sh110 to sh190 while for those ranging from sh2,501 and sh2,500 the customer will be charged sh330, a sh190 increment from sh140. The charges took effect February. Before, it cost a customer sh500 to pay bills ranging from sh5,000 to 45,000. Now they will pay sh1,000 for the first sh5001 to sh15,000 then pay sh1,600 for the next sh15,001 to sh30,000 and finally pay sh2,000 for the final sh30,001 to sh45,000. Bills ranging from 45,001 to 60,000 will now cost sh2,650 from sh550 to pay while those ranging from 60,001 to sh125,000 will cost the customer sh3,500 up from sh660. For bills ranging from sh125,001 to sh250,000, they will be paying sh3.950 up from sh950 while bills of 550,001 to sh500,000 will cost the customer sh5,050 up from sh1,250. For bills from sh500,001 to sh1m, the rate was increased from shsh3,200 to sh10,700, and for those paying bills of sh1m to sh2m the charges are sh20,500 from sh5,500. Bills of sh2m to sh4m will cost the client sh40,000 up from sh10,000. MTN Uganda’s chief marketing officer, Ernst Fonternel explained that this was done because the utility companies were reluctant to pay MTN for the transactions. He said in the circumstances, the clients of the utility companies must shoulder the cost. “The companies no longer pay us for the collection of their monies. So we recoup our share from the customer,” he said. By Billy Rwothungeyo, The New Vision

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Uganda: MV Kalangala set for private operator

The Government is looking for a competent company to manage and operate Marine Vessel (MV) Kalangala. The vessel which plies Nakiwogo landing site in Entebbe and Lutoboka in Kalangala, was assembled in 2005 as fulfilment of President Museveni’s pledge to the people of Kalangala for eased water transport and connectivity to the mainland. It was initially managed by M/S Mulowooza and Brothers between 2006 and 2010 but when the three-year contract expired, the works and transport ministry took over its management to date. The vessel is currently in Mwanza, Tanzania where it is undergoing the annual repairs to meet the international maritime safety requirements. Susan Kataike, the works and transport ministry spokesperson said the procurement process for the private operator for the vessel is ongoing. However, Kataike warned operators of private boats who are taking advantage of the absence of MV Kalangala to dangerously load passengers to and from Kalangala via Entebbe landing site. Last week a locally built boat loaded with over 70 passengers from Entebbe landing site to Kalangala got stuck on the lake after its engine stalled but they were rescued by the marine Police. Bernard Khabakha, a senior inspector of vessels with the ministry, said all passenger boats are supposed to be inspected to ascertain their seaworthiness before they are licensed to operate but many operators do not heed this. Fred Badda, the Bujumba MP said the Government should avail alternative and safe transport means to Kalangala via Entebbe whenever MV Kalangala is taken for annual inspection and repairs. By Samuel Balagadde, The New Vision

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Tanzania Postal Bank posts 606m/- profit

The Tanzania Postal Bank (TPB) net income for the quarter ending December last year increased to 606m/-, up from 579m/- registered in similar period a year before. Cumulatively, the Bank profit increased to 4.23bn/- in the year ended December compared to 4.07bn/- recorded in the previous period. According to the TPB statement of financial position, the increase of net income was largely contributed by net interest income that jumped to 6.65bn/- in the quarter under review compared to 5.19bn/- registered in the corresponding period 2012. Since lending is the core business banking, the quarter under review saw the TPB increasing its loans, advances and overdrafts to 120.4bn/- compared 112bn/- of the previous quarter. Also, the bank managed to maintain low its non performing loans to total gross loans at 4.91 per cent which is below the industrial rate. Similarly, the outstanding performance of the bank’s net profit for the period under review was contributed by increase of the non interest income to 3.64bn/- compared to 2.65bn/- registered in the corresponding period in 2012. For example, from fees and commission alone, about 2.57bn/- was garnered in the period in question compared to 1.95bn/- of the previous period. TPB is one of the banks with the widest network in the country reaching the most remote areas where other financial facilities have failed to penetrate. It is present in more than 20 regions. TPB is a member of Umoja Switch which comprises 24 banks with more than 140 ATMs across the country. The bank has 22 ATMs of its own under Umoja Switch located in most of the branches. Source Tanzania Daily News

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Save more or bear high interest rates, banks warn

The cost of borrowing will remain relatively high unless Rwandans learn to keep billions of francs stashed away in homes with commercial banks, the central bank has warned. Stakeholders at the presentation of the Monetary Policy and Financial Stability Statement yesterday. John Mbanda. John Rwangombwa, the governor of the National Bank of Rwanda (BNR), said that even after lowering the key repo rate to boost lending to the private sector, interest rates on commercial loans had not reduced significantly because customers deposits—the main source of cheaper funds for commercial banks—remain low. Last June, BNR relaxed its monetary policy by lowering the repo (the rate at which it lends to commercial banks) from 7.5 to 7 per cent hoping to stimulate credit to the private sector and boost slowing economic growth but the move fell short. Real Gross Domestic Product (GDP) growth had slowed down from 6.4 per cent in the first quarter to 5.7 per cent and the 3.9 per cent in the second and third quarters of 2013. “We [at BNR] arrived at that decision after realising that the economy had grown at a slower pace in the first quarter of last year compared to 2012 as a result of reduced government spending and lower lending to the private sector,” he said. He was presenting the quarterly Monetary Policy and Financial Stability Statement yesterday. Rwangombwa said that as a result of that decision, short-term interest rates have been declining since June last year which has led to short term liquidity in the economy. However, the average commercial bank lending rate fell marginally to 16.9 per cent from 17.2 per cent. The treasury bills rate fell to 5.6 per cent as of December last year from 10.8 per cent in June last year while the repo and interbank interest rates fell to 3.9 per cent and 5.6 per cent respectively from 6.7 per cent and 9.6 per cent in the same period. The governor said that rigidity in lending rates is due to the high operating costs representing 76.7 per cent of the total interest income on average during the last fiscal year and high provisions for bad loans. Non-performing loans rose from 6 per cent in December 2012 to the BNR’s regulatory benchmark of 7 per cent in December 2013. He added that last year commercial banks deposit rates fell to as low 15 per cent and if Rwandans would make more deposits, banks would have more sources of funding for projects that required long-term financing. Figures released by the governor however show modest increase in bank deposits from about 783 bn in December 2012, to 913.3 billion as of December 2013—a 16.7 per cent increase. Credit to the private fell to Rwf 472.5bn from Rwf 498.8bn recorded in 2012, an indication fewer borrowers were willing to take on expensive credit. James Gatera, chief executive officer of Bank of Kigali said that the public needed not to always complain about high interest rates but rather deposit more. “People must know that as banks, we are in business just like any other company

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Rwandair to launch Kigali-Dar-Bombay flights

RwandAir will soon introduce the Kigali-Dar es Salaam-Bombay flight following high demand for the service by customers interested to travel to the Asian country. The Rwandair Country Manager, Mr Hafeez Balogun, told a news conference in Dar es Salaam late Tuesday that the route would be the first one out of Africa. He said so far the airline covers about 14 countries on the African continent. “So far, Rwandair service covers only 14 countries including all the East African countries,” said the country manager during a meeting with the country based flight agencies. The Rwandair recently increased frequencies to Dubai, introducing a daily flight. The new schedule is giving more choice to business travellers between Rwanda, UAE and India. According to Rwandair Station Manager, Mr Mathew Kichao, the company was expecting to get two more brand new aircraft to join the fleet this month to expand the firm’s operations. “The arrival of two more aircraft will help to strengthen our market in Africa and out of the continent,” he said adding “More destinations on the African continent will be added upon the arrival of new planes.” Currently, from Kigali International Airport, RwandAir offers connections to Nairobi, Entebbe, Kilimanjaro, Mombasa, Dar es Salaam, Mwanza and Bujumbura. The Airline also serves Johannesburg, Dubai, Lagos, Libreville and Brazzaville. RwandAir’s fleet currently consists of Boeing 737 aircraft and one Bombardier Das-200 series. By LUDOVICK KAZOKA, Tanzania Daily News

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