The Central Bank wants commercial banks to harmonise fees charged at Automated Teller Machines (ATMs) as part of the work plan that seeks to embrace digital transactions.
While speaking at an event organised by Uganda Bankers Association (UBA) on Tuesday 22nd September, the Bank of Uganda (BoU) director national payments systems, Mackay Aumo said harmonisation of tariffs charged at ATMs is very critical in encouraging digital payments.
“Up to now, I have failed to understand it. When I go to bank A, I’m not charged, when I go to bank B, [I am charged] Shs7,000 and bank C is Shs6,500. Even when you go to Interswitch, two banks that are connecting, the international tariffs tend to reign. Instead of Shs1,500, it will be Shs5,500,” he said, noting thst the banks have no need to operate individually.
Aumo said the banks must reconsider harmonising their fees, which in turn promises a return on investment premised on economies of scale.
“You will be surprised that you can still benefit from bigger volumes of transactions,” he said.
The Bank of Uganda deputy governor, Micheal Atingi-Ego also emphasized the need for the harmonisation to grow digital transactions, stating that the move will depend on the willingness of the commercial banks.
“The players in the industry first of all, will discuss among themselves if that is the best way to go forward. So if they don’t agree on something, that will make the central bank rethink that, in the spirit of wanting to promote financial inclusion and improving e-payments. Is this the best way to go forward? If it is not, then we would have to think about it,” he said.
According to charge schedules released by the Central Bank in January, bank ATM withdrawal charges range from Shs600 to Shs1,500 while whole cross bank transactions range between Shs7,000and Shs15,000.
The reluctance among the public to embrace digital transactions has been on the increase for a while and this has been blamed on high costs of transactions.
Bank of Uganda is seeking to at least have achieved a cashless economy by 2021 through the National Payment Systems Policy.
The Central Bank did however recently indicate that achieving the cashless economy might take longer than initially planned.
Up to 75 per cent of payments in Uganda are still cash transactions.
The UBA chairman Mathias Katamba, said the discussion to harmonise costs has been ongoing, but like many other things, was interrupted by the Covid-19 pandemic.
He further explained that while the lenders are on board with the move, there is need for infrastructure sharing, for harmonisation to be realized.
“That is something we have been working on with the Central Bank for quite a long time and it is just about putting in place the enabling infrastructure that can be shared to lead to harmonisation of tariffs,” he said, attributed the difference in costs to the independent nature of cost structures employed by different banks.
Tanzania Inaugurates $59m Leather Factory, To Produce 1.2 Million Shoes Annually
Tanzania’s President John Magufuli on Thursday inaugurated the $59m leather factory in Kilimanjaro region, saying the new facility will end importation of leather goods.
The Kilimanjaro International Leather Industries Company Limited is a joint venture between the Public Service Social Security Fund (PSSSF) and the Prisons Corporation.
Speaking shortly before he inaugurated the factory, Magufuli said construction of the facility would help to expand the market for hides and skins in the east African nation.
“Livestock keepers are throwing away hides and skins of their animals for lack of markets. With the construction of the new leather factory this will now be history,” he said.
In Africa, Tanzania has the second largest herd of livestock after Ethiopia, and produces 3.9 million bovine hides, 2.5 million goat skins and 2.3 million sheep skins annually.
Magufuli said Tanzania’s demand for shoes stood at 54 million pairs annually, while the country’s five leather industries were producing a total of 1.715 million pairs each year.
“In the next one to two years, I hope Tanzanians will stop wearing imported shoes. We should start cultivating the habit of buying locally made goods,” said the president.
Hosea Kashimba, PSSSF Director-General, said the initial production capacity for the new factory was 1.2 million pairs of shoes annually and 184,500 pieces of other leather products, including belts and wallets.
Kashimba said the factory had created 3,000 direct jobs and 7,000 indirect jobs.
Statistics from the Ministry of Livestock and Fisheries show that Tanzania had 25 million cattle and 16.7 million goats.
Kashimba said Karanga Prison provided land for the industry while PSSF which was managing the project provides the machinery and buildings under the consultancy of Tanzania Industrial Research and Development Organization (TIRDO) who were paid Sh2 billion.
He further noted that the machinery was imported from Italy to a cost of Sh60 billion (Euro23.6 million).
Uganda Establishes First Free Zone at Entebbe Airport
The government of Uganda through the Uganda Free Zone Authority (UFZA) has finalised plans to establish the first public free zone at Entebbe International Airport. The free zone is projected to boost export-oriented investment in the country.
The project will be implemented by the National Enterprise Corporation (NEC) on a five acre piece of land acquired from the Uganda Civil Aviation Authority (UCAA) at the Entebbe International Airport premises.
Under the arrangement, the project targets sectors which include food processing, mineral processing, warehousing, storage and simple assembly, where all operators in the public free zone will process their products for onward export through Entebbe International Airport.
The development of the Public Free Zone projected to cost UGX 48billion will, on completion house seven production units and trade houses such as offices of the Uganda Free Zones Authority, Uganda Revenue Authority, and other government offices to promote enterprise. The Government of Uganda (GoU) has already awarded UGX 12.5 Billion for the first phase of the project.
Speaking at the site handover event, Hez Kimoomi Alinda, the Uganda Free Zones Authority Executive Director, said the project is expected to contribute cargo volumes, create hundreds of direct jobs and significantly improve Uganda’s exports.
“On completion, the project will support increased production quality assurance and value addition to commodities that are widely produced by the masses to improve household incomes, create employment and eliminate poverty as well as improve the value of Uganda’s exports,” he said.
Alinda was speaking while handing over the site for the construction of the Entebbe International Airport Free Zone at which he said they had acquired five acres from the Uganda Civil Aviation Authority for the development and contracted National Enterprise Corporation, the commercial arm of the UPDF for the construction.
Somali Petroleum Authority Appoints Independent Directors
The Somali Petroleum Authority (SPA) has announced the appointment of six Independent Directors to its Board, each representing a Member State and one Independent Director representing the Federal Government – following the approval of the Prime Minister and the Council of Ministers.
The announcement follows the appointment of Ibrahim Hussein as Chairman and Chief Executive of the SPA, representing the Federal Government, and is in line with the provisions of the Petroleum Law.
The Board will oversee all the SPA’s activities to ensure that it develops a sustainable and competitive industry in the interests of all Somali people, in keeping with its mandate.
The newly appointed Board Members to the SPA are Asha Osman Ahmed, Vice Chair and Board Member representing Banadir Regional Authority;
Ibrahim Ahmed Layte, Board Member representing Hirshabelle State;
Abdulkadir Aden Mohamud, Board Member representing Galmudug State;
Ibrahim Abdulkadir Mohamed, Board Member representing South West State; Ahmed Haji Abdi, Board Member representing Jubaland State;
Abdihafid Ali Dirir, Board Member representing Somaliland State; and
Mahad Mohamed Sh. Hassan, Board member representing the Federal Government.
There are nine positions on the Board of the SPA representing seven Members States and two representing the Federal Government. The Board focuses on the SPA’s long-term objectives and priorities to be one of the world’s leading petroleum authorities, promoting the development of a sustainable oil and gas industry. Specifically, the Board will ensure that the regulatory and fiscal regime being developed will apply the principles of equality, openness, accountability, transparency and non-discrimination in the interests of all the Somali people. The Board is committed to upholding the highest standards of health and safety for people in all activities relating to the exploration of petroleum in Somalia, as well as maintaining world-class environmental standards. Moreover, the Board will work to maintain sound risk management, internal control systems and reviews on the efficacy of these annually.
In June 2019, The Ministry of Petroleum and Mineral Resources announced details of the Petroleum Ownership Management and Revenue Sharing Agreement between the Federal Government and its Member States, which delivers by far the highest percentage of potential revenues from the industry to non-Federal institutions of any comparable agreement. The structure of the Board, with seven of its nine members representing the Member States, will underpin the SPA’s commitment to develop the petroleum industry in the interests of all the Somali people.
Commenting on the appointment Ibrahim Hussein, Chairman and Chief Executive, said: “We are very excited to welcome new colleagues onto the Board of the newly established SPA, as together we work to develop the country’s petroleum industry. The structure of our Board will ensure that all the Member States are able to help shape the development of the industry in the interests of the whole country. The SPA is committed to rigorous standards of corporate governance in order to achieve our goal of attracting international investment to maximize the economic recovery of the country’s oil and gas reserves. This will enable Member States to significantly increase investment in education, transport, agriculture and healthcare infrastructure.”
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