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Uganda’s export earnings, reach all-time high, despite Rwanda conflict

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FRENEMIES? Ugandan President, Yoweri Museveni and Rwanda’s Paul Kagame chat in South Africa during the swearing-in ceremony of Cyril Ramaphosa as president of South Africa

Uganda’s export earnings grew by 35% reaching USD1,079.87 million in Q1, 2019, up from USD799.77 million in Q4, 2018.

This is the highest ever, quarterly earnings- as per Bank of Uganda and Uganda Bureau of Statistics records, dating to 1997.

The record-earnings were boosted by significant growth in earnings from the Middle East that grew by 82.54%, from USD223.72 million to USD408.4 million and a 1428.6% growth in exports earnings from Turkey- USD114.14 million, up from USD7.47 million.

Uganda’s exports earnings from the Middle East were singularly boosted by exports to the United Arab Emirates that grew from USD96.56 million in Q1, 2018, reaching USD212.73 million in Q4, 2018. In Q1, 2019 this further jumped by a whole 86.85% to USd397.48 million.

As of Q1, 2019 the Middle East became Uganda’s largest trading block, overtaking the Comesa countries and the European Union who have previously been the top 2 exporting partners to Uganda.  This is gold overtook coffee as Uganda’s biggest export earner.

According to the Central Bank, Uganda exported gold worth $514 million in 2018 compared to USD418 million in 2017.

Kenya and Rwanda hurt Comesa earnings

Comesa, the 21-country bloc has traditionally been Uganda’s biggest source of export revenue, bringing in USD1,489.55 million in 2018, but a political cum trade spat between Uganda and Rwanda, followed by sustained declining earnings from Kenya are slowly diminishing export earnings from the region.

Kenya and Rwanda are the top 2 destinations for Ugandan exports within Comesa, accounting for nearly 50%.

Quarterly earnings from Kenya have been falling since the start of 2018, by 68.82% from USD204.14 million in Q1, 2018 to USD63.66 million by end of Q1, 2019- the lowest ever in 6 years.

On the other hand, a political feud between Rwanda and Uganda- the sisterly nations turned frenemies has all of a sudden led to a 34.31% decline in Rwandan export earnings from USD51.94 million in Q4, 2018 to USD34.12 million in Q1, 2019.

The sharpest decline was recorded between February (the start of the conflict) and April 2019.

Figures from Bank of Uganda show that between February and March, exports earnings from Rwanda fell by 81.79% from USD14.51 million to USD2.64 million. Between March and April 2019, Ugandan export earnings fell by a further 56.14% from USD2.64 million to USD1.16 million. This is the lowest in 13 years, since May 2006 when monthly exports were USD0.28 million.

Rwanda accuses Uganda of supporting her political enemies, an accusation that Uganda has flatly denied.

Rwanda has since February closed all its common border posts with Uganda including; Katuna, Kagitumba, Mirama Hills and Cyanika and ordered its citizens not to travel to Uganda. Rwanda is also said to have ordered its nationals doing business on especially the Ugandan side of the boarder to pack up and go home.  

Uganda mainly exports food items, cement, steel, personal care products, beverages and animal products.  

At the end of May, Rwandan security officers shot dead two people, a Ugandan and Rwandan at at Hamisavu trading center in Mpororo in Kiruhura village in Kashekye parish, Kamwezi sub-county on the border with Uganda.

The dead Rwandan is said to have been a smuggler who was evading arrest at the time he met his death.

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Finance

Kwame Ejalu’s Kent Holdings, acquires Alexander Forbes’ Ugandan unit; rebrands to Zamara

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Zamara Group’s logo; now the new face of Alexander Forbes Uganda, who have rebranded into Zamara Uganda

Alexander Forbes Financial Services Uganda Limited is now Zamara Actuaries, Administrators and Consultants (U) Limited.

This follows the ongoing exit of the South African financial services group from Uganda and the sale of their 51% stake in Uganda to Kent Holdings Limited- a Ugandan financial services group with interests in insurance brokerage and pensions management.

The two companies affirmed the sale, in a joint statement on August 21st, by Bonga Mokoena the Alexander Forbes Emerging Markets (AFEM) Chief Executive Officer and Kwame Ejalu, the Kent Holdings Limited Chairman.

Kwame Ejalu, the Kent Holdings Limited Chairman wields a rich experience in Uganda’s financial services industry. The Kent/Zamara partnership blends Kent Holdings’ 22 years of local experience and strategic leadership with Zamara’s 23-year African heritage and technical capacity

“Alexander Forbes Emerging Markets (AFEM) and Kent Holdings are pleased to announce that an agreement has been reached on a sale of shares to Kent Holdings Limited. On 2 July 2019, a sale of shares agreement was executed in terms of which, AFEM sold 51% in Alexander Forbes Financial Services Uganda Limited, to Kent Holdings Limited, a co-shareholder in Alexander Forbes Financial Services Uganda Limited,” read the statement.

Kent Holdings, previously owned 49% of the Ugandan operations.  

The statement however said that “the sale of shares agreement is subject to fulfilment of conditions precedent.”

“The terms and conditions of the sale agreement remain confidential,” both executives announced, but confirmed that Alexander Forbes has effected a name change and will now be known as Zamara Actuaries Administrators and Consultants (Uganda) Limited.

The name change was gazetted on 17th July 2019.

“Alexander Forbes Financial Services (Uganda) Limited, has been by a special resolution passed on 10th July 2019 and with the approval of the registrar of companies changed its name to Zamara Actuaries Administrators and Consultants Limited- 17th July 2019,” reads General Notice No. 762 of 2019, extracted from the Gazette.

Miriam Ekirapa Musaali, the Zamara Uganda Chief Operating Officer. She possesses over 11 years in Uganda’s capital markets industry- where she rose to the Director Market Supervision role at Uganda’s capital markets regulator – Capital Markets Authority, from whence she became the Alexander Forbes Uganda (Now Zamara Uganda) COO and Head of Business for slightly for slightly over 2 years. She says, the name change shall not in any way impede the quality of service as the team remains the same “enthusiastic, energetic, creative” team.

In a separate announcement, media announcement run in the local dailies, Zamara also confirmed their entry into the Ugandan market, promising that they called “fresh perspective in the delivery of financial services in Africa.”

Who is Zamara?

According to their media announcement, the Zamara Group is a specialised financial services group providing actuarial advice and retirement administration solutions in financial services, umbrella retirement solutions, investment and risk sectors to individuals, corporates, parastatals and retirement fund clients. 

The firm currently administers assets in excess of KSh. 280 billion an equivalent of UGX 9.995 trillion and is the only actuarial, consulting, accounting and pension administration firm in Kenya to be ISO 9001:2015 certified.

Zamara Group Executive Director , James Olubayi

Uganda is the sixth Zamara operation after Kenya, Nigeria, Rwanda, Tanzania and Malawi. Zamara started operations in Kenya over 23 years ago as Hymans Robertson and later changed to Alexander Forbes (East Africa) Limited before renaming to Zamara Actuaries, Administrators and Consultants Limited, following the exit of Alexander Forbes from the Kenyan market in 2017.

For four consecutive years, Zamara, their umbrella fund, the Zamara Fanaka Retirement Fund (formerly Alexander Forbes Retirement Fund) and Zamara Vuna Pension Plan (formerly Alexander Forbes Vuna Pension Plan), Zamara’s individual pension plan have been variously awarded in Kenya’s Think Business Awards.  

A brand that embodies a fresh perspective on the delivery of financial services

Commenting on the entry of Zamara into Uganda, Kwame Ejalu, the Kent Holdings Chairman said: “We are enthusiastic about this partnership between Kent Holdings and Zamara Group as it marks the entry into Uganda, of a formidable brand that embodies a fresh perspective on the delivery of financial services in Africa. This partnership blends Kent Holdings’ 22 years of local experience and strategic leadership with Zamara’s 23-year African heritage and technical capacity, to deliver innovative and excellent services to our clients, underpinned by simplicity, empathy and trust,” adding: “Zamara Uganda will now add to our portfolio pan-African expertise, actuarial services and other online solutions that we previously did not offer.”

Asked if Zamara had acquired the stake, previously held by Alexander Forbes, he said he would comment on this after “the Alexander Forbes-Kent Holdings transaction is fully complete and all conditions precedent are fulfilled.”

Ejalu however said that Zamara Uganda inherits and will continue to run a managed private pension funds sector in Uganda and managed assets under administration portfolio in excess of UGX380 billion- roughtly 40% sector market share.

James Olubayi, the Zamara Group Executive Director said that the Zamara Group looked at Uganda as “one of the key strategic regions in the market for growth of the group.”

“Zamara aims to elevate the quality of advice and solutions offered to stakeholders and inevitably be a game changer for clients it serves in Uganda. We look forward to the extended partnership with Kent Holdings, clients, stakeholders across Africa,” he said.

Miriam Ekirapa Musaali, Chief Operating Officer, Zamara Uganda who previously was the Alexander Forbes COO said “We remain the same enthusiastic, energetic, creative team that is committed to serving our clients in Uganda. We will no doubt continue to offer superior consulting, advisory and administration services to pension funds in Uganda and further enhance our offering and advice to truly world class levels.”  

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Finance

Stanbic Bank scoops June/July best gov’t securities dealer award

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The Governor Prof. Emmanuel Tumusiime-Mutebile has given an award to Stanbic Bank Uganda (LTD) for being the best performing bank in dealing government securities for the months of June and July 2019. The award was received by Stanbic Bank CEO Mr. Patrick Mweheire during the quarterly Uganda Bankers Association (UBA) meeting at BoU headquarters in Kampala.

Governor BOU Prof. Emmanuel Mutebile(L) and Patrick Mweheire(R), CEO Stanbic Bank Uganda(LTD) at the do

The bank has been recognised by the regulator for its role in the primary dealer system that helps in developing Financial Markets and in reducing the costs associated with issuing Government Securities; through increasing demand, market efficiency, encouraging secondary market trading and improving the quality of Financial Market information.

A primary dealer is a pre-approved bank, broker or financial institution that is able to lend money to the government through treasury bonds and treasury bills. 

Background information on best performing banks in government securities award

In January 2005, the Bank of Uganda initiated the “Award for the Best Performing Primary Dealer in Uganda Government Securities for the Month” to recognize the Primary Dealer that performed best in trading Uganda Government Securities and transmitting information regarding the status of the financial markets to the Central Bank.

A Primary Dealer is any financial intermediary that has signed a Memorandum of Understanding with the Bank of Uganda to execute the following actions on a consistent basis:

§ To participate as counter-party in Uganda Government securities auctions conducted by the Bank of Uganda.
§ To provide the public with prices or yields that they will buy and sell “On-the Run” (the most recently auctioned) Uganda Government securities. i.e. Treasury bills and Treasury bonds on a continuous basis.
§ To provide the public with prices or yields that they will buy Off-the-Run (Other than the most recently auctioned) Uganda Government securities on a continuous basis.
§ To trade with the public Uganda Government securities at the prices or yields that they have quoted.
§ To make available information on the status of the market to the Bank of Uganda on a timely basis.

The points allocated for the Award to the Best Performing Primary Dealer in Uganda Government Securities for the Month are aggregated to determine the winner of the prestigious award.

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Travel

Unscrupulous Tour Operator Arrested

Tourism police have arrested a rogue tour operator accused of fleecing tourists of $21,500. The suspect has been identified as Richard Tusasibwe, director of Gatatu Safaris Limited in Kigezi.   According to CP Frank Mwesigwa, Tusasibwe, he was arrested at Arcadia Cottages in Kabale; near Lake Bunyonyi; where he had taken other tourists for a […]

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Tourism police in Kabale have arrested a rogue tour operator accused of fleecing tourists of $21,500. The suspect has been identified as Richard Tusasibwe, the director of Gatatu Safaris Limited in Kigezi.  

According to CP Frank Mwesigwa, Tusasibwe, was arrested at Arcadia Cottages in Kabale; near Lake Bunyonyi; where he had taken other tourists for a trip.

He added that the arrest came after a tip off by suspecting people who had fallen victims of his unscrupulous behavior and the covert teams at check-in were able to arrest him. He is currently being held at Kabale Police station and charged with obtaining money by false pretense.

Richard Tusasibwe(centre) in handcuffs

Tusasibwe is alleged to have been contracted by 5 American tourists to organize chimpanzee and gorilla tracking expedition in Uganda. After an airport pickup and arrival in Kisoro, Tusasibwe abandoned the tourists at a lodge and has been on the run for the past two weeks.

Uganda Tourism Board Quality Assurance Manager, Samora Semakula said that the board was working around the clock to ensure that quality standards and the law are upheld in the tourism sector and that rogue operators face the law.

“We are pleased that the police has arrested a rogue operator who has been on the run for the last two weeks since this case was brought to our attention. Rogue tour operators are a peril to the growth and development of the sector. Uganda Tourism Board will continue to work with the tourism police and other players in the sector to ensure that the vice is brought to a conclusive end,” Semakula said.

Mwesigwa reassures tourists saying, “As tourism police, we are committed to clean up quack tour operators who con our tourists. Uganda remains a peaceful and secure country and all efforts together with stakeholders is to ensure that law and order is upheld in the tourism sector and the country at large.”

As mandated by the Tourism Act (2008) Uganda Tourism Board earlier this year kicked of a registration and licensing exercise of all tour operators and facilities in the tourism value chain. This process is aimed to effectively regulate the tourism sector and promote quality assurance across the value chain.

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