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Tag Archives: Business News

Treasury bonds oversubscribed‏

HIGH demand from investors greeted the second 10-year treasury bonds attracting bids almost two times the amount offered to the market for bidding, thus ending up the
show overly subscribed.

The first 10-year treasury bonds auctioned on February, this year, attracted few bids
from investors ending the show under subscribed.

Funds raised from the sale of the long-term debt government securities are targeted to finance development projects like road and railway infrastructures that are necessary cutting down cost of transport.

Some of the key investors in government securities include pension funds, insurance firms, some microfinance companies and few commercial banks.

The second 10-year treasury bonds was auctioned last week and is expected to mature in
April 2026. It attracted bids 105.14/- compared to 49.20/- offered for bidding.

The Bank of Tanzania (BoT) auction summary shows, however, that the government retained only 21.70bn/- which is far below even the amount sought to be raised.

The weighted average yield to maturity increased slightly to 18.84 per cent compared to
18.82 per cent of the session held in February, this year.

The weighted average coupon yield also made slight increase to 17.03 per cent
compared to 17.00 per cent of the previous session.

The weighted average price for successful bids declined to 67.14 compared to 67.26.

Only seven bids that were received out of 75 emerged successful. The highest bid offered at the auction was 69.36 while the lowest is 57.50; the minimum successful bid/100 was 67.01.

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Acacia Mining to pay $20m in corporate tax in 2016‏

ACACIA Mining PLC is to pre-pay 20 million US dollars in corporate taxes this year after signing a Memorandum of Understanding with the Tanzania Revenue Authority (TRA) last month in Dar es Salaam.

According to the Acacia’s CEO, Bradley Gordon, this proactive move was initiated by Acacia Mining PLC in recognition of the time the company has been operating in the country.

Acacia Mining, which entered the Tanzania mining sector as Barrick and later as African Barrick Gold 15 years ago has been making profit, according to Mr Gordon, in his internal communication to Acacia staff at the weekend.

However, much as the company has in most cases declared net profit across the mines it owns the fact of the matter is it has not yet recouped the USD 3.8bn it has invested into building and developing the three mines it owns.

Under Tanzanian mining law and the terms of the Mineral Development Agreements between Acacia Mining PLC and the government any profit made is used to offset the initial investment and therefore during that period the company is not required to pay any corporate tax.

Mr Gordon says in elaborating the issue of profit that “when running a business one needs to first exclude all costs from your income before you can declare a profit – the cost in this case is the initial capital cost that has been invested to develop the mines”.

“Whilst we make net profits, these are not taxable and our current projections are we aren’t due to pay corporate taxes until 2018”, he says.

According to Mr Gordon, the fact that the MOU between Acacia and TRA has been signed and has been recognised as a pre-payment by all parties makes it clear that in the TRA’s opinion, no corporate tax is currently owed by Acacia and therefore none has been evaded.

In its recent ruling, the Tax Revenues Appeals Tribunal (TRAR) accused the gold mining giant of running a sophisticated tax evasion scheme in the country.

Acacia has since appealed to the Court of Appeal against the ruling asserting that the company’s financial reports conformed to international best practices and were audited by global accounting firms and government organisations.

 

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Financing Agriculture not risky

LENDING to agriculture is no longer a risky undertaking, the Private Agricultural Sector Support (PASS), which has recovered over 95 per cent of its guaranteed credits to the sector, affirmed in Dar es Salaam yesterday.
PASS

The TADB Executive Director Mr. Thomasi Samkyi (Left) and PASS Director General Mr. Nicomed Bohay (Right) Picture by: Issa Michuzi Blog

“The common perception that agriculture sector is not credit worthy is a myth,” PASS Managing Director Nicomed Bohay said, dismissing as unfounded the lame excuses of denying funding to agriculture on the pretext that the sector is highly risky.

He said the trust that operates as service provider between agriculture and financial sectors has so far guaranteed 314bn/- loans to agriculture, with 95 per cent of the amount recovered.

Mr Bohay, speaking at the signing of the guarantee facility agreement between PASS and Tanzania Agricultural Development Bank (TADB), invited more Tanzanians to explore business opportunities in agriculture to qualify for the affordable funding under the arrangement.

“All the commercial banks, which we work with haven’t been able to exhaust the financial resources available,” said Mr Bohay, hinting that the PASS managed Credit Guarantee Fund remains underutilised by 75 per cent.

TADB and PASS have under the agreement embarked on the promotion of lending to agriculture through risk mitigation, focusing on smallholder peasants, medium and large scale farmers as well as other stakeholders in the agricultural value chains.

TADB Managing Director, Thomas Samkyi said his bank was determined to work with low fee charging guarantee partners like PASS, saying high costs of agriculture production requires cheap funding, “If the guarantees costs are high, the overall financing cost increases, making it difficult to repay the loans.”

Mr Samkyi said the bank’s focus to youth agriculture enterprises require guarantees as majority of the youth lack the required collateral at their first engagement in agriculture activities.

Eligible beneficiaries of the Credit Guarantees, the bank boss said, will be farmers and other entrepreneurs in the agriculture value chains–agricultural producers, agro-processors, storage facility constructors, irrigation technology providers and other agriculture infrastructure developers.

Mr Samkyi said the bank whose key objective is to catalyse investments in the agricultural sector envisages to issue loans of at least 60bn/- to over 100,000 small peasants, 10 youth enterprises and one big farmer this year at an interest rate of between seven and 12 per cent.

“TADB invites farmers and other players to access the credit facilities for agricultural development projects in the priority value chains under this guarantee arrangement,” said Mr Samkyi, reaffirming his bank’s tenacity to work with other strategic partners to promote interventions aimed at transforming the agricultural sector.

TADB becomes the 10th bank to partner with PASS, which is already working with CRDB Bank, Amana Bank, Akiba Commercial Bank, Exim Bank, TIB Bank, FBME Bank, National Microfinance Bank, ACB Bank and BOA Bank.

Tanzania and Danish governments founded PASS under DANIDA funding in 2000. It operated as a project under the Agricultural Sector Programme Support until 2007 when it was registered as a trust, not for profit organisation, to help commercialisation of subsistence farming.

The trust invested 56bn/- in agriculture last year alone, in support of crop production, input supply, irrigation, tractor purchases, agro-processing, crop trading and transportation.

 

 
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Posted by on April 5, 2016 in Business News

 

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Buzz word: Money Laundering

What is ‘Money Laundering’

Money laundering is the process of creating the appearance that large amounts of money obtained from serious crimes, such as drug trafficking or terrorist activity, originated from a legitimate source.

Money Laundering Scheme

Money Laundering Cycle Source: http://www.unodc.org

There are three steps involved in the process of laundering money: placement, layering, and integration. Placement refers to the act of introducing “dirty money” (money obtained through illegitimate, criminal means) into the financial system in some way; “layering” is the act of concealing the source of that money by way of a series of complex transactions and bookkeeping gymnastics; and integration refers to the act of acquiring that money in purportedly legitimate means.

One of the more common ways that laundering takes place is when a criminal organization funnels their illegally obtained cash through a cash-based business, slightly inflating the daily take. These organizations are often referred to as “fronts.” In the popular television series “Breaking Bad,” the methamphetamine dealer funnels his earnings from selling illicit drugs through a series of car-wash businesses.

Other common forms of money laundering include smurfing (A smurf is a colloquial term for a money launderer. Also refers to one who seeks to evade scrutiny from government agencies by breaking up a transaction involving a large amount of money into smaller transactions that are below the reporting threshold. The term is derived from the cartoon characters known as The Smurfs) , where a person breaks up large chunks of cash and deposits them over an extended period of time in a financial institution, or simply smuggles large amounts of cash across boarders to deposit them in offshore accounts where money laundering enforcement is less strict.

 

 

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Lack of women still a hot topic at Davos‏

It’s a strange thing about Davos: Women represented only 18 percent of the actual delegates, but as a topic, women ranked among the top three — right up there with refugees and climate change.

In fact, the topic of gender parity was the third most tweeted, generating a whopping 10,000 tweets. And among the top quotes:

“You’ve heard a lot about the Internet of Things; I think we need an Internet of women,” said
IMF chief Christine Lagarde.

And from Coca-Cola CEO Muhtar Kent: “We need the three W’s: women, water and well-being.”

Why were women such a minority? And more importantly, how can we engage women in ways that really drive growth in our organizations, our communities and our economies?

It’s a topic I’ve kept my pulse on closely since my days in Silicon Valley, where I founded and later sold Women’s Financial Network.

Fast-forward to Davos, and two things come to mind: First, while women haven’t necessarily made huge strides in organizations, as our global When Women Thrive research will reveal on Wednesday (join the launch here), there are companies — and executives — waking up to the fact that women can truly shape their corporate trajectories.

In fact, we kicked off Davos by previewing our global research to be released and a powerful CEO conversation on the very topic: the role of leaders and, in particular, men.

As we’ll share on Wednesday, only 57 percent of leaders globally are engaged in diversity efforts. Worse, only 38 percent of men are engaged, down a full 10 percentage points, from 49 percent in 2014. And yet leadership engagement on a personal level is one of the six pillars of a successful gender strategy — one that drives real business impact.

Our event led to more than 400 registrants — close to three times last year’s — and, more importantly, shined the klieg lights on some powerful and innovative moves some top CEOs are making, from eBay and Cisco to Marriott and UBS.

It’s a strange thing about Davos: Women represented only 18 percent of the actual delegates, but as a topic, women ranked among the top three — right up there with refugees and climate change.

In fact, the topic of gender parity was the third most tweeted, generating a whopping 10,000 tweets.

LaGarde 2

(From L) International Monetary Fund (IMF) Managing Director Christine Lagarde, British Finance Minister George Osborne, Indian Finance Minister Arun Jaitley and Governor of the Bank of Japan, Haruhiko Kuroda shake hands after a session of the World Economic Forum annual meeting on January 23, 2016.

And among the top quotes:

“You’ve heard a lot about the Internet of Things; I think we need an Internet of women,” said
IMF chief Christine Lagarde.

And from Coca-Cola CEO Muhtar Kent: “We need the three W’s: women, water and well-being.”

Why were women such a minority? And more importantly, how can we engage women in ways that really drive growth in our organizations, our communities and our economies?

It’s a topic I’ve kept my pulse on closely since my days in Silicon Valley, where I founded and later sold Women’s Financial Network.

Fast-forward to Davos, and two things come to mind: First, while women haven’t necessarily made huge strides in organizations, as our global When Women Thrive research will reveal on Wednesday (join the launch here), there are companies — and executives — waking up to the fact that women can truly shape their corporate trajectories.

In fact, we kicked off Davos by previewing our global research to be released and a powerful CEO conversation on the very topic: the role of leaders and, in particular, men.

As we’ll share on Wednesday, only 57 percent of leaders globally are engaged in diversity efforts. Worse, only 38 percent of men are engaged, down a full 10 percentage points, from 49 percent in 2014. And yet leadership engagement on a personal level is one of the six pillars of a successful gender strategy — one that drives real business impact.

Our event led to more than 400 registrants — close to three times last year’s — and, more importantly, shined the klieg lights on some powerful and innovative moves some top CEOs are making, from eBay and Cisco to Marriott and UBS.

Real Accountability. Jűrg Zeltner, CEO of UBS Wealth Management, was perhaps the most adamant, saying, “There’s no more excuses.” He doesn’t want to go into a boardroom without women. He’s directly holding his business managers accountable for more women, saying they’ll be fired if he doesn’t see greater numbers.

Three years ago, eBay president and CEO Devin Wenig decided to start publishing its pay equity data to help identify gaps — and that’s led others to be accountable. “The only thing worse than avoiding the issue is talking about it and not doing anything about it,” Wenig said.

Real data. The real strength of any strategy — whether it’s business or even gender — comes from having real data to identify what works and what doesn’t. Cisco CEO Chuck Robbins put it this way: “If we review sales numbers, let’s also review the people numbers.”

He’s invested $2 million-plus specifically on building a data and analytic framework to focus on pay parity. It’s a great example of one of the other pillars of a successful gender strategy: proof.

Rethinking programs. Hanzade Dogan Boyner, a leading figure in Turkey‘s online and digital world, asked at our panel: “Why do women give up at some point? Because it’s very difficult to rise to the CEO level and raise two kids. So we need to change the culture.”

There’s a lot of talk about flexible leave and returnship programs, to name just a few, and their importance to women. But there are a host of issues including the lack of engagement and training of middle managers on how to have conversations with their female workforce that are impacting the ultimate goal of greater representation throughout all career levels.

Wenig of eBay surprised the group by talking about other life events demanding programs to keep women engaged in the workforce like elder care sorely needed by women as they juggle kids and aging parents and their job in the middle. That, he said, is worthy of at least the same attention we pay to maternity/paternity leave programs.

I would have liked to see more women business women in Davos. Their unique skills like flexibility and inclusive team management are more important than ever in today’s complex world.

“Men have a unique opportunity in this, as we still make up 80 percent of the executive ranks and even more than that at the CEO level,” said Julio A. Portalatin, Mercer president and CEO. “We have a unique obligation to be out in front on growing women in the workforce. It’s not a women’s issue. This is a workforce issue.”

 
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Posted by on January 26, 2016 in Business News, International News

 

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Tanzania Inflation Reaches6.8% In December 2015 Due To Higher Growth And Demand

According to The National Bureau of Statistics of Tanzania (NBS) the Annual Headline Inflation Rate for the month of December 2015 rose to 6.8% from 6.6% in November, 2015.
TZ INFLATION DEC 2015
The National Consumer Price Index (NCPI) which measures the change over time in the cost of a fixed basket of 224 goods and services purchased by a representative sample of households in Tanzania on monthly basis, increased from 150.92 in Dec, 2014 to 161.24 in Dec, 2015. According to the NBS, it follows higher rates of demand from households and international markets which drove the Tanzanian GDP to grow 6.3% in the Q3-2015 thanks to higher activity in construction, transport and mining sectors. Food and Non Alcoholic Beverages Inflation Rate for the Month of Dec 2015 has decreased to 11.1% from 11.2% recorded in Nov, 2015, however, food annual inflation has stabilized at 10.9% in the same period. The 12 months index change for non-food products for the month of Dec, 2015 has increased to 1.8% from 1.2% recorded in Dec, 2015. The Annual Inflation Rate which excludes food and energy for the month of Dec, 2015 has increased to 2.4% from 2.3% recorded in Nov, 2015.

 
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Posted by on January 20, 2016 in Business News, Tanzania News

 

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JK lists NMB Bank among success stories‏

JK lists NMB Bank among success stories‏
president Jakaya Kikwete with NMB Staff at the Launching Ceremony

president Jakaya Kikwete with NMB Staff at the Launching Ceremony

PRESIDENT Jakaya Kikwete has inaugurated 65 million US dollars (140bn/-) worth state-of-the-art National Microfinance Bank (NMB) building and pledged continued government support to the bank’s efforts to promote financial inclusion.

The modern building with capacity to accommodate over 1000 staff, modern rooms, canteen to cater for all staff and modern private bank proves the solidity and sustainability of the bank.

With the widest network of more than 170 branches and over 600 ATMs as well as 95 per cent coverage of all districts.

“NMB Bank is one of the successful and model of privatisation stories. It pays dividends as well as various taxes to the government,” President Kikwete said in Dar es Salaam at the weekend while pointing finger to other public institutions are still depending on government subsidy.

He said NMB success as the best and most profitable Tanzanian bank followed a transformation process done during his 10 years term in office.

Government has 30 per cent stake in the bank and 20 per cent is owned by Tanzanians through the Dar bourse.

He urged the bank to continue promoting financial inclusion to reach more the financially under-served population.

Tanzania is the global leader in providing mobile money banking.

“When I became president 10 years ago, NMB was a very small bank and was referred as the proletariat bank, but today it is the biggest bank in the country with the widest network, the most profitable and sustainable bank. I am very proud of you,” he said.

Also Mr Kikwete launched a modern private banking located at the new head office powered by four teller cubicles and two ATM machines. It is the third after NMB Bunge Dodoma and NMB Oyster plaza branch in Masaki.

Most of the money spent in constructing the seven storey building was paid to local contractors with few foreign contractors.

Rais Jakaya Kikwete akikata utepe kufungua jengo la makao makuu ya NMB jijini Dar es Salaam.
The NMB Bank Managing Director, Ms Ineke Bussemaker, said the new head office reflects the priorities of the bank as it complies with all standards set by the bank.

“The building is a symbol of what NMB can achieve together, it consumes spacious working area, modern and stylish features with high end finishing, high safety detectors and fire systems with number of meeting rooms for staff, customers and visitors, semi-industrial kitchen,” she said.

 
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Posted by on October 19, 2015 in Business News, Tanzania News

 

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