Tanzania - Robust Financial Sector Hooks World Attention

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Credit : Daily News - Dar es Salaam

TANZANIA's financial sector has continued to shine locally and internationally, thanks to an enabling environment put in place by the fifth phase government. This enabling environment put in place through policies, legal and regulatory frameworks have ensured growth of a strong, efficient and effective sector in the country.

In the latest move, about 40 local banks participated in the 2020 Euromoney award programme that covers 20 global awards, more than 50 regional awards and best awards in close to 100 countries. In this Euromoney award where 1,500 submissions were received worldwide, NMB bank Plc scooped the top award as the best bank for the eighth year in row outshining the other 40 Tanzania's banks.

Early this month, President John Magufuli commended the central bank, commercial banks and the financial sector for their contributions, which enabled Tanzania to join the league of middle income economy countries. The World Bank recently declared Tanzania as a lower middle income economy after attaining the position of per capita income between 1,036 US dollars and 4,045 US dollars. The Euromoney award issued by the London-based global financial markets magazine is given after measuring a number of metrics including financial performance, digital banking strategy, financial inclusion, product offerings and the approach to cyber security as well as corporate social responsibility.

This award is a clear demonstration that NMB bank is more than a provider of financial products and services to being a catalyst of economic change through digital transformation and technology coupled with the ability to deliver innovative solutions to the market. Speaking before receiving the award, the NMB Board Chairman Dr Edwin Mhede said as the country has attained a middle income status, NMB bank will continue to reposition itself to serve and support the growing economy from where it is to the higher level.

"NMB will continue to reposition itself to support the government endeavours in building robust economic growth," he said. He said research shows that the industrial upgrade and investment in social services are major contributors to attaining middle income status. Thus the bank will continue to support the endeavours so that the government and its predictable policies could easily be implemented.

As the most profitable bank in the country, NMB bank reported 142bn/- after tax profit, which is equivalent to 46 per cent increase from 98bn/- posted in the previous year. The NMB Acting Managing Director, Ruth Zaipuna said the award reflects the progress that the bank has made in delivering services that meet customers' satisfaction thus making it the best bank for financial inclusion in the country. "We are today a bank known for reliance, focus on technology and innovation," she said adding that the NMB purpose is to drive Tanzania's growth and endeavour to enhance the lives of our fellow Tanzanians by offering convenience and accessibility of our banking services across the country.

She said, "We are leveraging the best technology in digital banking, innovative products, out extensive branch network and alternative channels to add real value to our customers lives," The bank has 225 branches, over 7000 agents and more than 800 ATMs with over 3 million customers. The Euromoney excellence award confirms the bank's investment in digital transformation and technology and its ability to deliver innovative solutions to the market.

The other metrics considered by Euromoney are namely market capitalisation, return on equity, return on assets, market share of deposits, market share of loans, loans to deposits ratio, non-performing loans ratio and non-performing loan coverage ratio. The Euromoney editor Clive Horwood said, "We continue to seek the best of the best in all countries offering banking services.

As every year, size is important but certainly not paramount. Profitability is of course vital, but so is an ability to demonstrate growth, relative outperformance compared with peers and the ability to adapt to changing market conditions or client needs."

Slowly but surely, we will reach our goals.

 

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Tanzania Daily News (Dar es Salaam)
Credit: Abduel Elinaza

THE 15-year government bond oversubscription has spiked 82 per cent thanks to the increased investors' appetite --amid plunging average yields to maturity rate.

The debt market analysts projected early this week that the yields rate for the bond was likely to go down owing to the augmented appetite.

The government wanted to borrow from public 122bn/-through central bank but the market instead offered 222.288bn/-. The government ended picking up 95.779bn/-.

Orbit Securities Head of Research and Analytics, Imani Muhingo said limited viable alternatives in the financial markets have pushed investors to increasingly opt for Treasury securities as safer and more profitable investment destination.

"Bank of Tanzania used the opportunity to substantially lower the government's cost of borrowing," Mr Muhingo told 'Daily News' on Thursday.

The tightened spread between the highest and lowest bid prices, which was skewed to the upside, lowered the weighted average yield to maturity (WAYTM) 46.7basis points (bps) to a yield of 13.83 per cent.

Mr Muhingo said, for instance, the 15 years Treasury bond had a WAYTM of 15.67per cent in the similar period last year with a weighted average price (WAP) of 87.5459 compared to the current 98.1254.

Analysts, early this week, projected the bond to experience a decline in yields rate. Zan Securities Chief Executive Officer (CEO), Raphael Masumbuko projected yields rate declining based to fortnight Treasury bill auction.

"We expect a decline in yields in the next week's Treasury bond auction owing to [last] week auction results," Mr Masumbuko said through Zan's Weekly Market Wrap-Ups.

Also, Tanzania Securities' Weekly Market Blast estimated the yields to decline while the bond expected to be oversubscribed based on growing appetite for government securities.

"The government securities yield curve may continue to remain normal, and weighted average yields are expected to decline. "... This indicates low funding cost by the government," Tanzania Securities said.

Good news for investors, there is a big appetite shown on our investments. Watanzania tuchangamkie fursa.

 

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Na hizi ni rasharasha tu, mambo bado.​

 

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Tanzania: JPM Cherishes Mining Reforms​

13 OCTOBER 2020

TANZANIA's revenue from the mining sector continues to swell, proving yet another determination by the fifth-phase government under President John Magufuli, to boost and finance its socio-economic development.

The country has received a 100bn/- dividend from the Twiga Mineral Corporation Limited, a joint venture between the government and Barrick Gold Corporation.

"Tanzania is very rich and there is no reason to fail implementing development projects over lack of funds...unlike in the past when we even asked donors to construct pit latrines for our schools," Dr Magufuli stated at an event to receive the dividend staged at the Julius Nyerere International Convention Centre (JNICC) in Dar es Salaam.

Twiga Mining Company handed over the share to the government alongside the State Mining Corporation (STAMICO), which gave a dividend of 1bn/- to the State. After the handing over of the dummy cheques to the government, President Magufuli pointed out that the money would go to bring impact to the country's social services.

"We have got 100bn/-, which will be channeled towards improving social services provision such as education, health care and so on," Dr Magufuli explained. He attributed the success to the mining sector reforms during his first five-year term of his government, whereby in February 2019, a series of changes were made to Tanzanian mining laws and regulations.

The government amended the Mining Act which, among other provisions, raised the royalty rate from 4 to 6 per cent with respect to minerals exports such as gold, copper, silver and platinum. As per the new mining legislation, the government is entitled to acquire (in total) up to 50 per cent of the shares in a mining company, proportional with the quantified value of tax expenditures incurred by the government in favour of the mining company.

Under these legal reforms, the government and the Barrick formed the Twiga Mineral Corporation under the agreement that the government holds 16 per cent of shares and the Barrick taking 84 per cent. However, the profit from the company is shared under the 50/50 arrangement. "These agreements are now bringing a positive impact to the poor Tanzanians," Dr Magufuli said, as he commended a team of experts led by Prof Palamagamba Kabudi during talks with the Barrick for review of the mining agreements.

He said the agreement that the government entered with the Barrick was one of its kind in the history of the mining sector in the country and beyond. "Even my fellow Presidents from other countries have been asking me over how we managed to do it," he explained.

President Magufuli noted that since the reforms in the sector, a lot of achievements have been attained, including raising the contribution of the mining sector to the country's Gross Domestic Product (GDP) from 3.4 per cent in 2015 to over 5 per cent currently. The revenues from the mining has risen during the past five years from 168bn/- to 528bn/- currently.

Speaking over the STAMICO, the President noted that the state company has now undergone massive transformation and was making profit. The company was making final touches to establish a Gold Refinery in Mwanza city that would have capacity of processing 480kg of gold per day.

"I take this opportunity to encourage investors to come and invest in the mining sector, Tanzania has a good environment for investment," he said. Earlier, the Minister for Minerals, Doto Biteko said President Magufuli has completely changed the sector after introducing several measures meant to increase government share from the precious resources.

Wenye wivu wajinyonge, Tanzania tunaenda kuonyesha wengine kwamba hapa hatulali hadi kieleweke.