The East African

Uganda’s Minister of Finance Matia Kasaija on Tuesday declared a 10 percent interest rate for National Social Security Fund (NSSF) members for the 2022/2023 financial year, arguing that it is consistent with the fund’s commitment made in 2013 to pay savers a real annual return, that is, at least 2 percentage points above the 10-year rate of inflation.

According to the minister, the new rate which is equivalent to Ush1.591 billion ($422,800) in total, will be calculated and credited to the balance outstanding on the members’ accounts as of July 1, 2022.“Last financial year, the 10-year average rate of inflation was 4.2 percent. The rate I have just declared is 5.8 percent above the 10-year average, which means that the Fund has once again delivered on its promise and surpassed it by almost 3.8 percent. To the members, thank you for trusting the NSSF with your money. The fund is an institution we are proud of,” Kasaija said during the NSSF 11th annual members meeting in Kampala.

Read: Uganda NSSF savers expect higher interest rateDuring the meeting, the NSSF management reported assets growth from Ush17.26 trillion ($4.6 billion) in Financial Year 2021/22 to Ush18.56 trillion ($4.93 billion) in financial year 2023/24.“Many naysayers did not imagine the possibility of growing this fund to Ush20 trillion ($5.3 billion). Achieving this strategic objective, a year ahead of schedule is laudable,” the minister remarked seeming to thwart members’ fears and anxiety in the aftermath of media reports of a poorly managed fund which saw the former managing director Richard Byarugaba clash with one of his supervisors, Minister for Gender, Labour and Social Development Betty Amongi.“The second KPI I am interested in is the money you generated during the year because that shows the productivity of the investments that I approved during the year. I am therefore glad that the total realised income earned increased by 15 percent from Ush1.9 trillion ($504.92 million) in the financial year 2022/22 to Ush2.2 trillion ($584.64 million) in the financial year 2022/23.

This is very commendable given the turmoil in Europe due to the Russia-Ukraine war, investor flight from most of the developing markets back to the US, reduction in value across all East African stock markets and increased scrutiny that the fund underwent in the third quarter of the just concluded financial year,” he said.

Earlier, the fund’s Chairman Board of Directors Peter Kimbowa reported that member contributions had increased by 15.4 percent from Ush1.49 trillion ($396 million) in Financial Year 2021/22 to Ush1.72 trillion ($457.1 million) in financial year 2022/23.“Total Realised Income earned increased by 15 percent from Ush1.9 trillion in the financial year 2022/22 to Ush2.2 trillion in the financial year 2022/23. Benefits paid to qualifying members increased by 1 percent from Ush1.189 trillion in the financial year 2021/22 to Ush1.199 trillion in the financial year 2022/23. The cost-to-income ratio improved from 11.7 percent in the financial year 2021/22 to 9.4 percent in the financial year 2022/23,” he said.

Read: Uganda pension grows its key assets by $400m post-CovidAccording to him, the fund’s cost of administration reduced from 1.18 percent of total assets to 1.02 percent.

Amongi tasked the fund managers to change in the way “we are conducting business at the fund” and innovate solutions for its members based on the three dimensions, during the three lifecycles so as to provide actual social protection.

The fund declared an interest rate of 9.5 percent in the financial year 2021/2022 down from 12.5 percent it declared in the previous year and the lowest in recent years.

NSSF former managing director Byarugaba said the decline in the 12.5 percent interest rate paid the previous year was mainly attributed to the reallocation of investment in long-term to short-term fixed income instruments to provide liquidity for mid-term payouts, inflation pressures and spillovers from turbulence in the global economy. 

Nigerian Tribune

Niger Governor, Mohammed Umaru Bago has sought a collaborative effort between the State Government and the German Agency for International Cooperation (GIZ) for the creation of a Free Trade Zone to be located in Tafa, Bida and Minna.

Governor Umaru Bago stated this at the Government House Minna when he received members of the GIZ team on a courtesy visit at the government house, Minna.

He said the free trade zones will enable local entrepreneurs and farmers to have value for their products, pointing out that value chain cluster production brings about positive development.

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The governor who acknowledged the developmental strides of GIZ in different aspects of the nation also sought further collaboration with the development partner in the area of ICT and Scholarship to enable people to develop their careers.

The leader of the team and Head of Pro-growth and Promotion of Employment in Nigeria SEDIN who also doubles as the Coordinator, of the Sustainable Economic Development Cluster (SEDEC), Mr Marcus Wauschkuhn said GIZ has been partnering with the state for over 2 decades in the areas of employment and private sector promotion.

He said the team would be focusing on economic development, improved market access and access to finance for MSME in the new phase of its programme which will commence from 2023 to 2026.

Mr Wauschkuhn said the project would also be extended to students to catch them young in skills acquisition.

Reuters

The South African rand weakened in early trade on Tuesday as the U.S. dollar rose, ahead of a leading business cycle indicator release and other economic data points later in the week.

At 0634 GMT, the rand traded at 18.8950 against the dollar , almost 0.7% weaker than its previous close.

The dollar last traded around 0.15% stronger against a basket of global currencies.

At 0700 GMT the South African Reserve Bank will release the country’s leading business cycle indicator for July and at around 0900 GMT the government will hold its weekly government bond auction.

South Africa will also release producer price inflation, money supply, trade balance and budget figures for August this week, which will give clues on the health of the economy.

“While the rand has been doing very well, there is no point in fighting against a stronger USD,” said Rand Merchant Bank (RMB) analysts in a research note.

The dollar has surged following comments by the Federal Reserve that suggested it might keep interest rates higher for longer, RMB added.

Like other risk-sensitive currencies, the rand is often swayed by global factors like U.S. monetary policy.

South Africa’s benchmark 2030 government bond was weaker in early deals, with the yield up 9 basis points to 10.745%.

The East African

Somalia is attempting its national identity card system to establish a central data base of unique numbers for its citizens for the first time in three decades.

On September 16, President Hassan Sheikh Mohamud received his national identity card while in Dusamareb town in Central Somalia, about 511 km north of Mogadishu, on Saturday. It was a symbolic ceremony that indicates desire to pool and know the size of the country’s adults, a missing link in 33 years.

Mohamud who has been in parts of Central Somalia for over a month, leading military operations against the extremist group Al-Shabaab, managed to take part in two-day conference in Mogadishu marking the official launching of the National Identification, via a video link.

Read: Somali legislators endorse National ID Authority BillSomali Prime Minister Hamza Abdi Barre who presided the conference held at Afasyioni Hall inside the perimeter of Aden Abdulle International Airport on September 16-17 was honoured to receive his ID.“Today’s event represents a grand day for Somalia as we finally lay the foundations of a reliable and all-inclusive national identification system that is recognised across the world,” Barre remarked.

Organised by Somalia’s National Identification & Registration Authority (NIRA), the conference introduced Somalia to digital identity system, over three decades after the identification system collapsed with the military regime in early 1990s.

Barre argued that identification of citizens will contribute to the fighting against threat to security, terrorism and identity fraud.“The system being introduced will improve our businesses and performance of our economy, our banks, communication and Hawala money transfer systems.”“It will severely deal with terror networks and the fight against extremism.”The United Nations Special Representative for Somalia, Catriona Laing, was one of the high-profile diplomats who attended the inauguration of the Somali National ID Conference.

Laing commended Somali government for fore fronting the initiative she viewed as noble and emphasised the potential of the National ID system in strengthening good governance.“The system propels both private and financial sector growth,” the SRSG Laing stated.

The project has been sponsored by the World Bank and its Country Manager for Somalia Kristina Svensson says the launch is significant progress made in establishing an inclusive and trustworthy national identification system for Somalia.

Read: East Africa countries eye issuance of digital IDs“I greatly feel optimism that the national ID will help in the fight against the Al Shabaab terror group,” Svensson remarked.

Somalia’s main database for citizens collapsed as Somalia fell among warlords after they defeated the military regime of Siad Barre.

Most of the related institutions are now just being rebuilt with financial and technical support from development partners.

Recently, the country established its first statistics agency in three decades which will also be expected to finally conduct census and know the size of adults in the country.

But a lack of a single form of trusted identification has meant that Somalis can’t even use their formal names consistently, enabling crimes such as terrorism to thrive. 

Reuters News

Ghana’s economy grew 3.2% year-on-year in the second quarter of 2023, compared with a revised growth rate of 3.3% in the previous quarter, the country’s statistics agency said on Wednesday. 

The South African rand was steady in early trade on Monday, ahead of local and international interest rate announcements this week.

At 0718 GMT, the rand traded at 18.9800 against the dollar , not far from its previous close of 18.9850.

The dollar last traded near its previous close of 105.260 against a basket of global currencies.

The South African Reserve Bank (SARB) will announce its interest rate decision on Thursday and provide clues on the country’s future rate path.

“The SARB is expected to keep rates unchanged but remain hawkish on the back of concerns of an uptick in inflation on the back of the higher fuel price,” said Andre Cilliers, currency strategist at TreasuryONE.

The U.S. Federal Reserve is also expected to keep rate unchanged when it meets on Wednesday, he added, “but with a hawkish outlook given the higher oil price and higher inflation numbers”.

Shares on the Johannesburg Stock Exchange opened lower, with the blue-chip Top-40 index last trading down more than 0.6%.

South Africa’s benchmark 2030 government bond was marginally weaker in early deals, with the yield up 0.5 basis points to 10.480%.

Nigerian Tribune

NIGERIA in 2022 unlocked $3.2 billion as additional economic output through the development and utilisation of electronic payments, particularly real-time payment services.

This was made known at the weekend by the Chief Finance Officer (CFO), Parthian Partners, Mr Oluyinka Arewa, at the 2023 annual conference of the Finance Correspondents Association of Nigeria (FICAN).

This is just as the Nigeria Communications Commission (NCC) said that strengthening digital infrastructure for efficient and innovative payment systems in Nigeria requires a multi-faceted approach involving various stakeholders.

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According to Arewa, electronic payments continue to attract substantial global investments and have exhibited the highest returns and growth within the sector over the past decade.

As one of Africa’s largest economies, Arewa observed that Nigeria is well-positioned to harness the potential within the sector.

Indeed, Nigeria has witnessed a remarkable digital transformation with over 100 million active mobile phone users as of 2023.

This statistics signals the advent of a fully digitised financial services sector. However, he noted that despite these advancements, Nigeria’s payment system predominantly relies on cash. Recent events, such as the implementation of the cashless policy following the naira redesign late last year/early this year, highlighted the challenges associated with the country’s transition to a cashless economy.

“We understand that these challenges may appear formidable, but we are gathered here today because we believe these challenges are not insurmountable.

“One of the significant challenges facing electronic payments in Nigeria is the inadequacy of infrastructure, including operational and telecommunications facilities, as well as reliable electricity supply. Many e-payment systems depend on stable power sources and robust IT infrastructure, such as laptops, mobile phones, POS terminals and dependable internet connectivity,” Arewa said.

During the period of cash scarcity earlier this year, banks faced unprecedented e-payment failures, prompting the urgent need for technological infrastructure upgrades. The failure of e-payment channels on such a scale compelled customers to wait for banks’ networks to stabilise before completing their transactions.

Furthermore, Arewa added that fintech companies, initially considered a lifeline, also encountered challenges due to increased pressure. The issue of failed transactions has persistently affected numerous businesses reliant on electronic payment systems, he stated.

Also speaking, the Deputy Director, Technical Standards and Network Integrity, NCC, Mr Anthony Ikemefuna, said strengthening digital infrastructure for efficient and innovative payment systems in Nigeria requires a multi-faceted approach involving various stakeholders, including government agencies, regulatory bodies, financial institutions, technology providers and the private sector.

He listed key strategies and the way forward for achieving this goal to include, “Expand and upgrade broadband and mobile network infrastructure, particularly in underserved and rural areas; invest in data centers and reliable power supply to ensure the resilience and availability of digital payment systems.

“Launch nationwide digital literacy campaigns to educate citizens, especially those in rural areas, about digital payment systems; encourage the adoption of mobile banking and agency banking to reach unbanked and under-banked populations; update and streamline regulatory frameworks to accommodate digital payment innovations while ensuring consumer protection, security and financial stability.

“Collaborate with industry stakeholders to establish clear standards and interoperability requirements; develop and enforce robust cybersecurity regulations to protect digital payment systems from cyber threats and promote the adoption of encryption, multi-factor authentication, and fraud detection technologies, among others.”

Ikemefuna further called for the promotion of a competitive environment by preventing monopolistic practices and ensuring fair market access for new players; encourage fintech innovation through regulatory sandboxes and support for startups; implementing robust consumer protection mechanisms, including dispute resolution processes and complaint handling as well as raising awareness about the security and benefits of digital payments through public campaigns.

Agence France-Presse (AFP)

Nigeria’s President Bola Ahmed Tinubu has named a US-educated former investment banker as his new central bank chief months after the predecessor was arrested as part of a criminal investigation, the government said on Friday.

Tinubu’s appointee, Olayemi Michael Cardoso, is a Harvard graduate and former Citibank director in Nigeria, according to local media reports.

Since the Nigerian leader came to office in May, Tinubu has swiftly implemented reforms to attract more investment to Africa’s largest economy as part of his “Renewed Hope” agenda.

“President Bola Tinubu has approved the nomination of Dr. Olayemi Michael Cardoso to serve as the new Governor of the Central Bank of Nigeria (CBN),” the presidency said in a statement.

Lawmakers will have to approve the nomination of Cardoso and a new central bank board.

A major oil producer in Africa and the continent’s most populous country, Nigeria is struggling with rising inflation now at 25 percent, high debt and a weakening naira currency.

A former Lagos governor, Tinubu has won praise from investors and foreign governments for his early economic reforms, ending a long-standing subsidy to keep petrol prices low and freeing up the naira.

But the short-term impact has seen fuel prices triple, a sharp depreciation of the naira against the dollar and inflation quicken even as the government asks Nigerians for patience.

Former central bank governor Godwin Emefiele, who critics questioned for his unorthodox policies, was detained by the national security agency in June after Tinubu suspended him. He is still under investigation.

The East African

Uganda is turning to local pension funds as a survival measure following external freezing of funding from the World Bank.

The EastAfrican has learnt that the government is in talks with the World Bank for the lender to rescind its decision to withhold budget support for Kampala worth Ush6.7 trillion ($1.787 billion). The bank suspended funding last month in the wake of Kampala’s decision to pass a new anti-homosexual law deemed by the West as a violation of rights of minorities.

Last week, the National Planning Authority, technical officials at the Ministry of Finance, Parliament’s Committee on National Economy, Budget Committee and Finance Committee held a retreat over the economy. Officials said the Treasury is rethinking its fiscal strategy to increase domestic revenue collection, reduce borrowing, cut nugatory public expenditure and reduce supplementary budgets of government agencies spending above their vote.

At least 100 state agencies have become a source of wastefulness in spending. The government also took commercial loans from domestic and foreign lenders at unfavourable terms to fund key priorities and splurge on luxuries for government executives.“The Secretary to the Treasury said that should concessional loans fail; we should look at other sources. And pension funds, like National Social Security Fund are some of the options. It’s something we should start looking at because other countries have done it,” Namugga said.

Ugandan legislator Robert Migadde who chairs the Committee on National Economy told The EastAfrican that the government agencies agreed that borrowing from the domestic market should only be a last resort.

In June, Uganda presented a Ush52.74 trillion ($14 billion) budget for financial year 2023/24, which the government targets to finance to the tune of 55 percent through domestic revenue, while the remainder is donor money that funds programmes in health, education, water, energy and infrastructure.

Reuters

South Africa’s Growthpoint Properties said on Wednesday its full-year distributable income rose by 1.3% as vacancies at home improved.

Growthpoint said distributable income per share, the primary measure of underlying financial performance in the listed property sector, rose to 157.6 cents in the year to June 30 from 155.6 cents a year earlier.