TCCIA News and Events Blog

African countries are engaged in efforts to review their mining laws in attempts to enhance public ownership of the sector.

While Tanzania parliament has recently passed the new mining Act, Ethiopia and Angola are currently working on theirs with the aim of engaging members of the public so that they can reap benefits gained from mineral resources.

“We are working on the establishment of a mining law with the aim that the sector will benefit the citizens more than it is currently doing,” said Mr Joaquim David, Angola’s minister for Geology, Mines and Industry.

He was speaking at the 30th Governing Council meeting for the Southern and Eastern Africa Mineral Center (SEAMIC) held yesterday in Dar es Salaam.

Although mining activities have been carried out in the continent for almost a century now, many governments have realized that they are gaining less from the sector, mainly due to weakness in their existing mining laws.

“We need a paradigm change in our mineral sectors, including down-streaming value addition, so as to reap all the benefits possible,” said Mr Kabelo Tlhapi, the mining program officer at the Southern African Development Community (SADC).

Tanzania is Africa’s third largest gold producer, but also has reserves of uranium, nickel and coal. Gold exports alone earned the country $1.076 billion in 2009, up from $932.4 million the previous year.

The Mining Act 2010 passed last month also requires mining companies to list on the Dar es Salaam Stock Exchange so that the local population can benefit through buying shares.

“The new law also creates room for state participation in the shareholding structures of mining companies in the country,” said Mathias Chikawe, the minister for Constitutional Affairs and Justice.

As part of the new legislation, Tanzania will not issue new gemstone mining licenses to foreign companies, although current agreements with foreign mining companies remain unchanged.

Earlier when opening the meeting, the minister for Energy and Minerals, William Ngeleja, urged the SEIMC member countries to expedite submission of their contributions since the center was facing financial constraints.

The centre, which is located in Dar es Salaam, offers training in the fields of geo-information management, gemology, small-scale mining techniques and environmental studies.

The association comprising of seven countries has projected a $615,000 budget for the coming financial year, compared to $215,000 for the past year.

The minister called for private and government institutions from the rest of the African countries to seek membership to the SEAMIC centre and join in mineral resources development efforts.

Source – The Citizen

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The Tanzanian shilling is seen easing on the back of corporate demand and continued concerns about the euro.

Commercial banks quoted the shilling at 1,498/1,508 to the dollar on Wednesday, compared to 1,460/1,470 at last Thursday’s close. Traders said they expected it to trade in the 1,540-1,570 range in the coming days.

“There is still going to be pressure on the shilling next week because we are not seeing anything on the supply side,” said Aziz Chacha, Barclays Bank Tanzania’s treasurer.

He said end-of-month dollar inflows were minimal. Traders said they expected the shilling to remain weak in the coming days until certainty returns to the euro-zone.

“The shilling has been appreciating in early trading today. But the central bank has been intervening with little amounts,” said Fred Siwali, a trader at CRDB Bank.

Between last Thursday and Wednesday, the central Bank of Tanzania traded $16 million on its Interbank Foreign Exchange Market, according to statistics on its website.
Elsewhere in East Africa; Uganda’s shilling is likely to bounce back next week against the dollar after another week of heavy selling, while Europe’s debt crisis and investor concerns about risk are likely to weigh on other African units.
Commercial banks in Kampala traded the shilling at 2,240/2,245 on Wednesday compared to 2,205/2,215 at last Wednesday’s close. Traders predicted it was likely to trade within the 2,230-2,260 range in the days ahead.

“Demand is beginning to wane from the corporate clients. We expect some correction at around 2,230/2,240 levels in the coming week,” said Faisal Bukenya, head of market making at Barclays Bank Uganda.
The Kenyan shilling fell heavily against the dollar this week, breaking through the 80.00 barrier for the first time in more than a year, on the back of continued concerns about the performance of the euro.

“While the shilling is steady today, we expect it to continue dancing to global risk perspective,” said Peter Njuguna, head of trading at Commercial Bank of Africa. “We expect the shilling to oscillate in the coming week between 79.25 and 80.25.”
Traders said the local currency would remain at the mercy of the crisis in the euro zone.

Source – The citizen

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A Telecom operator, Zantel, on Tuesday re-launched ‘ZPesa’, its mobile banking service in Zanzibar in an effort to revamp the services. In its statement released yesterday, Zantel said the re-launch of the service with additional features will enable subscribers to pay for several utilities through mobile phone.

Such services include electricity, water, air tickets, DSTV and cable TV, as well as sending and receiving money and buying airtime. The firm’s chief executive officer, Mr Noel Herrity underscored the importance of easy access to banking services, particularly to the majority, who are not bank clients, but owned mobile phone.

“We are known for being an innovative brand, that is why we always strive to enable Tanzanians to access affordable means of communication; and in this case, quick and reliable banking services to all our subscribers, especially those who do not have access to banking services,” he said. Zantel is constantly enhancing the ZPesa service by signing agreements with other service providers, who delivers value. Mr Norman Moyo, Zantel’s chief commercial officer, has encouraged business community, organisations and societies countrywide to explore ZPesa vendors and agents’ opportunity.

“In this case, Zantel is empowering local businesses to be productive through appointing and equipping them to work as vendors or agents; in turn increasing their income and allow them to expand their services to untapped areas,” he said. He added that, societies too are able to earn extra income for their members and assist them in their day-to-day running of their businesses. The ZPesa service has also been integrated with the Sim card registration exercise, to enable more Zantel subscribers to register their Sim card before the June 30th deadline.

Zantel subscribers who will register for ZPesa services, will have being automatically registered their Sim cards and are entitled to receive bonuses, which they can redeem either as cash or as airtime at any ZPesa cash points and outlets. The redeemable amount in cash is Sh300 or Sh1,000 worth of airtime. The re-launch of ZPesa services will be conducted in phases starting with Zanzibar, moving on to other regions countrywide. Zantel is the first mobile company in the country to introduce mobile banking services three years ago.

Source The Citizen

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About 45,000 clients have benefited from loans amounting to Sh700 billion granted by the National Microfinance Bank (NMB) countrywide since 2001, a senior bank official revealed here yesterday

Mr Ernest Olomi, the NMB Clock Tower branch manager in Arusha said that the bank would continue with efforts to increase twice the number of loans beneficiaries in the near future.

“Apart from doubles the number of its loans beneficiary to 90,000 from the current 45,000 countrywide, the bank is also carrying an expansion program, in which more branches and Automated Teller Machine (ATM) cash points would be installed,” said Mr Olomi adding that the plan would reduce long queues in the banks.

Speaking during the launching of the NMB Business Club, Mr Olomi said that, the bank was also upbeat in expanding its operations by opening more branches and ATM outlets in Arusha.

He officially announced that, two more branches would be opened in the municipality before the end of the year.

“Currently, the bank has only two branches, which does not cope with the increasing demands and expanding economic activities in the region,” he said.

“Arusha economy has been growing in the last 15 years and NMB is here to support the business enterprises” he told about 100 bank clients.

He added that, the business club would be a forum, where of bank clients and other entrepreneurs could exchange ideas and give feedback on how the bank could improve its products and services.

Mr Olomi said that, the establishment of such business clubs is an initiative by the bank to expand its client base amid increasing competition in the banking sector.

NMB was privatised in 2005 with 49 per cent of its shares being in the hands of a consortium of banks, private banks and firms led by Rabo Bank of The Netherlands. The bank is listed at the Dar es Salaam Stock Exchange.

Customer queues inside the banking halls as well as at the ATM outlets have recently become common in most of local banks.

Source – The Citizen

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Zanzibar current account balance improved to a surplus of $32.6 million (about Sh45.6 billion) in the year ending in March this year, according to Bank of Tanzania April monthly economic report.

The report shows that, the surplus shoot up from a deficit of $2.7 million (about Sh3.7 billion) during in the 12-month period ending on March last year.

The report said that, the surplus arose from current transfers and exports proceeds, noting that during the period, transfers increased by $19.2 million to $62.7 million, whereas export of goods and services increased by $13.3 million to $125.1 million

The central bank bulletin added that, the Isle’s export of goods and services amounted to $125.1 million, compared to $111.8 million was recorded in the year ending March 2009.

“The increase was largely associated with a rise in services receipts to $99.0 million from $95.5 million during the period,” reads the report in part.

The value of cloves exported during the period under review increased to $13.0 million from $4.8 million, while the rise in cloves export was on account of increase in the volume of the crop that rose to 3.6 metric tons from 1.5 metric tones.

The report showed that exports of seaweeds and manufactured goods also increased to $2.9 million and $5.2 million from $2.1 million and $4.8 million respectively.

Imports of goods declined to $102.0 million in the year ending March from $124.2 million in the corresponding period in 2009, mainly due to decrease in the value of oil, industrial raw materials and other consumer goods.

The value of imported oil declined to $26.9 million in the period under review, compared to $33.7 million, while that of industrial raw materials fell to $7.7 million from $11.6 million in the year ending March 2009.

Meanwhile, during the month under review, the value exports of goods shipped from Zanzibar was $1.4 million in March 2010, slightly lower than $1.5 million in the preceding month.

Also service receipts amounted to $9.3 million in the month under review, being higher than $8.7 million recorded in the previous month.

On the other hand, value of goods shipped into Zanzibar was $7.8 million in the month of March below $8.0 million recorded in February 2010, owing to a decrease in import value of oil.
The services account balance improved to a surplus of $2.9 million in the month under review, from $1.8 million registered in February, this year, said the report.

Source – The Citizen

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For the ambitious Kilimo Kwanza (agriculture first) programme to be successful, the government must improve infrastructure and train farmers on financial skills, a member of South Africa’s Free State provincial legislature, Abrie Oosthuizen, has said.

Speaking to ournalists shortly after meeting members of Tanzania’s Parliamentary Committee on Agriculture, Water and Livestock in Dar es Salaam yesterday, Oosthuizen noted that the poor state of infrastructure in Tanzania was an obstacle to agricultural development.

“If there is sound infrastructure in place and farmers are equipped with financial skills so that they are able to access funds for their projects then improvement of agriculture could be possible,” said the visiting legislator who is also the chairperson of the Free State provincial legislature’s Agriculture and Rural Development Committee.

He is among a delegation of some ten MPs and other officials from South Africa who are on a familiarization tour of Tanzania that focuses on agriculture and rural development.

“Lack of financial skills, coupled with poor infrastructure, are serious obstacles hindering development of agriculture. Our visit to Tanzania has enabled us to learn that circumstances of agriculture and rural development may not be the same but the principles are the same,” he added.

The visiting legislator pointed out that in South Africa there is a project similar to Kilimo Kwanza dubbed “Emerging Farmers” which seeks to commercialize agriculture.

On her part, the Limpopo province chairperson, Nandi Ndalane, said the tour aims to share experiences between the two countries on areas of agriculture, rural development and poverty eradication.

Speaking earlier, Tanzanian legislator Janet Mbene decried lack of finances in the agriculture sector and called for linkages between commercial and small-scale farmers.

Her sentiments were echoed by Charles Keenja who said the private sector in the country should be encouraged to mobilize resources to invest in agriculture

Source – The Citizen

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after the previous day’s US official oil data showed some increase in fuel demand.

Market focus will shift later today to preliminary first-quarter Gross Domestic Product figures from the United States, the world’s largest economy and top energy consumer, for continued evidence of recovery.
By 0900 GMT, US crude futures for July rose $1.12 to $72.63 a barrel. ICE Brent crude futures gained 73 cents to $72.47. Yesterday US crude jumped 4 per cent, its biggest one day percentage gain in over three months after data from the

Energy Information Administration showed increases in US demand for refined oil products such as gasoline and diesel. “Today, US demand does still play a part,” Christopher Bellew with Bache Commodities said.
“Macro economic data is absolutely the most important, also confidence in the recovery is reflected in prices for equities,” he added.

US crude rose to a premium to ICE Brent crude for the first time since mid-April. It fell to a discount as deep as $6.57 in mid-May due to a build-up in inventories at storage in Cushing, Oklahoma.
But crude was helped higher after Wednesday’s data showed inventories at Cushing, the physical delivery point of US crude, fell from record high levels.

Barclays Capital analyst Paul Horsnell noted the rise in US diesel demand in the weekly report. As diesel is used for large trucks, its demand is often used as a gauge of the health of economic activity.

US GDP data for the first quarter will be released at 1230 GMT. Analysts in a Reuters poll forecast 3.4 per cent growth. Asian and European shares rose today mainly because China denied a report it was reviewing its investments in euro zone debt.

Source – The Citizen

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Cassava farmers in Tanzania have been advised to improve the quality of their crop if they are to access better markets for their harvests.

Speaking at a workshop for agricultural officers and cassava farmers early this week in Kibaha, the trainer, Dr Nanam Tay Dziedzoave, who is the country manager (Ghana) of Cassava: Adding Value for Africa (C:AVA) project at the Food Research Institute (CSIR) said many cassava famers use old methods to grow the crop, which leads to poor quality harvests.

“If cassava farms are well taken care of, consumers will be satisfied with cassava and their good health will be guaranteed,” Said Dr Nanam.

The acting director of the International Institute of Tropical Agriculture, Edward Kanji, said most Tanzanians still look down on cassava as a staple food even though the crop has been significant in the food chain and the economies of other countries in the word.

“Cassava will solve the problem of hunger because it can be used to make various products such as flour, biscuits and cakes,” He said.
He urged farmers to start viewing the crop as business opportunity through which they can upgrade their lives.

The Source – Citizen

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The government plans to borrow about $1.5 billion (about Sh2.1 trillion) from local and international lenders to help finance this year’s budget, most of which will fund development projects.
Finance and Economic Affairs minister Mustafa Mkulo said yesterday getting the money will be possible because the country’s credit rating and worthiness is now high.

He told journalists in Dar es Salaam that even the International Monetary Fund approves the country’s borrowing since it has the capacity to honour its loan obligations without affecting the macroeconomic, fiscal and monetary fundamentals.
“Apart from the $250 million we are sure to get from the Stanbic Financial Group, we also expect more funds from other financiers who have shown interest to support us,” the minister told the press conference, the second in two days on the same issue, short of disclosing possible lenders.
According to him, talks with them are still going on and progressing well; therefore it would be premature to disclose them. On Friday, Mr Mkulo addressed another press conference on a similar topic, reacting to donors’ financial reduction of budget support in the forthcoming financial year.
Yesterday, he reiterated that their cutting of funds for the 2010/11 budget by $220 million will not have much impact since the government is optimistic of getting up to $2 billion from other sources.

He said the $1.5 billion it plans to borrow will especially be used for undertaking infrastructure projects such as roads, water infrastructure and electricity supply services.
Most of the General Budget Support (GBS) is used for financing development expenditure. The minister said already Ireland has promised to provide $1 million to support the general budget, saying everything will be in order before reading of the budget next month.
“The money will be invested in areas with economic value and meaningful returns on investment and not for paying allowances or seminars and workshops,” he emphasized.
In its budget guidelines for 2010/11 and medium outlook, the government forecast this year’s budget to reach about Sh10 trillion. The expected borrowing, most of which is expected from Asia, will be a fifth of the next budget.
The GBS donors pointed at the government’s failure to timely undertake critical reforms as the reason for cutting their support which is a major component of the budget funding.

The move raised fears that financing the 2010/11 budget would face difficulties which could lead to frustrating efforts to undertake social and development projects.
The reforms included reducing cess from five to three per cent, failure to improve the agriculture marketing environment for the private sector and delay in enacting legislation for public/private partnership.
On Friday, Mr Mkulo admitted there were areas that called for reform, such as public finance management and the legal framework, but said measures are already underway to do that.

According to him, reforms have already been carried out in public finance management, local government finance and establishment of the post of internal auditor general at the Treasury.
Ends.

Source – the citizen

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Speculation has been cited as a key factor in the depreciation of the shilling with the government blaming banks for their bullish behaviour that distorts money markets.

Various experts have warned that the current devaluation rate may take time to heal unless authorities take short and long term measures to ensure its stability against major currencies and those of its trading partners.

Pessimists of its performance said the depreciation will continue for the whole of this year so long as the speculation of key market players persists. On the other hand, optimists consider the current unprecedented depreciation trend temporary, saying the shilling will remain only constrained for the first half of this year.

The Treasury says in a recent publication that the decline in the value of the shilling was mainly due to speculation of fluctuation in foreign exchange supply following the global financial crisis. It adds that the bullish tendencies gained momentum after the outset of the crisis at the end of 2008.

Economist Dr Honest Ngowi said the recent decision by some donors to cut their budget support funding has intensified speculation in money markets increasing the demand for dollars.

“The banks’ speculation is partly reflected through accumulation of foreign assets during the (crisis) period,” the Ministry of Finance and Economic Affairs notes in the February document.

Data in the document show that during the year ending December 2009 foreign assets in banks increased to a stock of $985.8 million from $652 million recorded in November 2008. In contrast, during the corresponding period in 2008, foreign assets declined by $181 million.

“The shilling will remain under pressure in the first half of 2010 due to a persistent imbalance between demand and supply of dollars in the economy… it will rebound towards the end of the year being lifted by export earnings particularly from gold,” a treasury expert at the Stanbic Bank Tanzania said on Wednesday evening.

Speaking on condition of anonymity, he said the shilling might trade at 1,352 to the dollar by the end of September. He, however, noted that the quick stability of the local currency will also depend on how quickly the Bank of Tanzania (BoT) acts on the prevailing depreciation trend.

Yesterday, BoT’s indicative mean exchange rate was Sh1363 compared to Sh1353 on Wednesday, Sh1351 in April, Sh1340 in March, Sh1338 in February and Sh1332 in January.

On Wednesday dollar buyers were parting with Sh143,600 for the 100 bill and sellers getting only Sh142,500 for the same amount of the greenback at some bureaux de change in Dar es Salaam.

The value of the shilling against the dollar depreciated on average by 10.3 per cent to about Sh1,318 in 2009 from an average of Sh1,195 in 2008.

The speculation outlook is also shared by some senior economists, including the executive director of research think tank, the Economic and Social Research Foundation (ESRF), Dr Bohela Lunogelo.

In a report co-authored with economists Apronius Mbilinyi and Monica Hang, he says speculative tendencies have been increasing in the Tanzania foreign exchange market since October 2008.

The three economists argue that the bullish behaviour in the market has partly been driven by anxiety about foreign exchange availability in view of the global financial crisis.

Source – The Citizen

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