NSSF partners with DFCU to ease social security fund transactions

By Deo Wasswa

The National Social Security Fund (NSSF) has unveiled the agency service that will enable its members to make their social security transactions at the nearest agent in their neighborhood without visiting the Fund offices.

While unveiling the innovation at Workers House, Richard Byarugaba, and NSSF Managing Director said it is part of the Fund’s channels that will further ease access to their services for its members. Byaruhanga said, “We have a branch network of 19 branches serving over 2 million customers. With this service, it means that NSSF Customers don’t need to travel long distances to access our offices, but can make transactions at the nearest bank agent at flexible working hours.”

In addition, the service is expected to reduce the Fund’s operation and administrative costs especially in establishment of temporary service centers where it doesn’t have a footprint.

The service will be executed in partnership with DFCU Bank and the Agent Banking Company (ABC) Limited. DFCU will provide its bank agents to facilitate the NSSF transactions countrywide while the Agent Banking Company provides the technology that links all bank agents countrywide.

Matthias Katamba, DFCU Bank Managing Director said the service is in line with their strategy to increase financial inclusion in the country. “We are proud to be the first bank to partner with NSSF on this front. Adding social security transactions to our list of financial services through the agency banking model, gives us an opportunity to further extend more financial services, more conveniently, to our customers, the under banked or unbanked population. Partnerships such as this one with NSSF are testament to our commitment to delivering on DFCU’s brand promise of making more possible.”

For now, members can only be able to submit their NSSF contributions at the 300 dfcu agent locations. In the near future, the agents will provide other NSSF services like employer and individual or employee registrations.

Inflation declines to 4.6%

By Edwin Muhumuza

Annual Headline Inflation for August 2020 has declined to 4.6% compared to 4.7% in July 2020.

It is largely due to Annual Energy Fuel Utilities (EFU) Inflation that decreased to 4.3% in August compared to 6.6% in July 2020.

According to the director of Macro economic statistics at the Uganda Bureau of Statistics, Aliziki Khauda , while highlighting the trends of Inflation across the country, on the different products, the decrease in EFU inflation was due to solid Fuels Inflation that decreased to 13.4% in August compared 20.6 % in July 2020.

Annual Energy, Fuels and Utilities (EFU) Inflation declined to 4.3% in August and this covers charcoal Inflation which individually declined to 13.6% in August compared to 20.9% in July.

The Annual Food Crops and related Items Inflation increased to -5.4% in August compared to -5.5% in July, while In that same period, fruit prices increased to -12.3% in August, and -12.6% in July.

On a month to month basis, those that have recorded a rise in prices include, Malewa, Matooke(bananas), mangoes, green pepper, cassava dry, chicken, fresh beans, milk, whole cassava and milk while those whose prices have reduced include, peas, okra, onions, maize flour and whole grain maize, according to the Uganda Bureau of Statistics.

The highest inflation was registered amongst the Kampala Middle income people, with 5.5% inflation in August compared to the 4.8% registered in July. Jinja and Masaka inflation was registered at 5.4% in August compared to 5.2% in July while Fort Portal registered 3.1%

The Monthly Headline Inflation for August 2020 rose by 0.3% compared to 0.1% rise recorded in July 2020, due to the Food Crops and Related Items Inflation that rose by 1.2% in August 2020, compared to minus 4.9% in July 2020.

Monthly Fruits Inflation increased by 4.6% in August 2020, compared to 3.7% drop for July. The Monthly Energy Fuel and Utilities Inflation dropped by 0.3% in August 2020 from the 1.0% drop recorded in July 2020. Monthly Core Inflation increased by 0.2% in Aug 2020, July was 0.9%.

It is worth noting that with the advent of the rainy season, food stuff prices like vegetables and Matooke have gone up while Maize and onion prices have reduced due to the bumper harvest according to Nakayenga Juliet, a statistician at the Bureau.

UBA Provides $200 Million for Nigeria’s Petroleum Industry

By Edwin Muhumuza

The United Bank for Africa Plc (UBA),Group Chairman, Tony O. Elumelu has challenged the private sector in Africa to unite and contribute meaningfully to their economies.

This is as UBA provided $200 million, approximately UGX 750 billion, to the Nigerian National Petroleum Corporation to support investment growth and liquidity requirements.

He made the remarks while the leading pan-African financial services group, acted as Facility Agent Bank for the Nigerian Commercial Banks in a consortium with other international banks in a $1.5 Billion Pre-Export Finance Facility for the Nigerian National Petroleum Corporation (NNPC) and its upstream subsidiary, the Nigerian Petroleum Development Company (NPDC).

This move follows a sharp drop in the price of oil and the ensuing hardship that followed the onset of the Covid-19 pandemic.

Elumelu said, ‘this facility is clear evidence of this – UBA is providing investment that will significantly improve Nigeria’s production capacity and in doing so also demonstrating the strength, depth, and sophistication of our commercial banking capability. I believe that together, working with governments, we can create more jobs and more wealth for people, not only in Nigeria, but across Africa’.

UBA has a strong track record in the resources sector across Africa, having facilitated oil prepayment deals with the NNPC, including its 2013 $100 million participation in the PXF Funding Limited transaction, and a further $60 million in the 2015 Phoenix Export Funding Limited transaction.

In Senegal, UBA was responsible for the EUR 240m Revolving Crude Oil Financing Facility for the Société Africaine de Raffinage and in Congo Brazzaville co-funded the $250m crude oil prepayment facility for Orion Oil Limited.

Other participants in the NNPC deal include Standard Chartered Bank, Afrexim Bank, Union Bank and two oil trading companies, Vitol and Matrix.

In Uganda, UBA is participating in the upstream, midstream and downstream of the oil and gas sector through financing and provision of financial services to players in each of these sectors.

“We are committed to ensuring that our corporate clients in the oil and gas sector of Uganda get access to the best financial services the market has got to offer.” said Mr. Joseph Balikuddembe, Executive Director/Head of Business- UBA Uganda.

Uganda’s inflation hits 4.7%

By Edwin Muhumuza

Uganda’s annual headline inflation has been recorded at 4.7percent for the year ended July 2020 from 4.1 percent registered in June 2020.

This on account of an increase in annual core inflation that was recorded at 5.8percent in July compared to 4.9 percent in June which was mainly driven by services inflation specifically transport services inflation that increased to 47.3 percent in July from 34.2 percent in June.

According to the Uganda Bureau of Statistics (UBOS) Principal Statistician, Sam Kaisiromwe, the lifting of the lock down to allow cars and vehicles to resume domestic and long haul distance travel is testament to these results.

Relatedly, there was a reduction in consumer prices of food crops which registered a minus 5.8 percent in July compared to minus 5.0 percent in June.

Food crop prices have decreased for the second month running.

The decline is attributed to annual vegetable inflation that declined however fruits inflation increased, in other wards fruits prices are still going down but the rate at which they are going down have reduced in this month compared to last month, he added.

This trend was mainly driven by reduction in prices of vegetables such as green pepper, eggplants, tomatoes, round onions and green cabbage. Others were fresh beans, banana-standard, Irish potatoes, beans, sugarcane, tomato ketchup and whole cassava.

However, those that increased include, bus fares, taxi fares for medium distance while food items like water melon, ice cream, and whole grain maize increased in price.

In the Energy Fuel and Utilities sector, inflation declined to 6.6 percent for the year ended July 2020 compared to 8.3percent for the year ended June 2020.The decrease is mainly due prices of solid fuels mainly charcoal which has declined to 21.0percent from 26.4 percent. Additionally prices of firewood declined.

It is however noteworthy that annual prices of liquid fuels specifically petrol increased from a minus 7.4percent to minus 6.4 percent while monthly liquid energy fuels increased by 0.4 percent in July compared to 0.5 percent rise in June.

In the health sector, a combination of medical products, appliances and equipment, out- patient services and hospital services registered a decrease to 3.1 percent from 3.2 percent, but hospital services specifically registered a 4.1 percent rise from 3.7 percent.

Analysis by geographical areas and income groups revealed that Jinja city registered the highest inflation of 5.6 percent followed by Kampala High Income and Masaka centers at 5.2 percent. The main driver was transport, food and non-alcoholic beverages which saw an increase in prices.

The least annual inflation was registered in Mbale at 2.8 percent which was due to decrease in prices of food and non-alcoholic beverages coupled with a reduction in prices of clothing and footwear

UBA appoints new managing director

By Edwin Muhumuza

United Bank of Africa has appointed a new Managing Director who has replaced Johnson Agoreyo who has been at the helm of the bank for the last 4 years.

The appointment of Chioma Mang as the incoming Managing Director/ Chief Executive Officer (MD/CEO) of UBA Uganda comes with over 30 years’ experience in banking.

Prior to this role, she was the CEO of UBA Gabon and UBA Liberia.

The new MD/CEO takes over from Johnson Agoreyo whose key achievements as the Managing Director of UBA Uganda has been the successful turnaround of UBA Uganda’s operation after 8 years of loss making to profitability.

As at December 31st , 2019, UBA ranked 12th / 25 in Profit before Tax and 15th /25 in liabilities in the banking industry.

Among other includes Strong Risk management and corporate governance, Improved Brand visibility and market perception of UBA in Uganda, Improved BOU rating to satisfactory, Obtained Banc assurance and agent banking licenses in Uganda, Growth of the Branch network from 9 to 16,Relocation of the Head Office to a more strategic befitting Corporate office ,Won Various mandates including Fuel cards management and E-Voucher system for the government of Uganda and Increased Digital Banking play in Uganda with introduction of key products for example LEO Chat banking – a first in the market.

The new appointment represents further strategic recognition of the growth of UBA’s business in Uganda and its critical importance to the UBA Group says a statement from the bank.

UBA is one of Africa’s leading financial institutions, with operations in 20 countries and 3 global financial centers: London, Paris and New York.

UBA Uganda represents UBA pioneer country activities in the East and Southern African sub-region.

Delay of final investment decision affecting growth prospects

By Edwin Muhumuza

The current stalemate in the local oil and gas industry that has led to the delay in commercializing Uganda’s petroleum resources is going to have an effect on Uganda’s growth prospects.

This is according to Standard Chartered Bank ,Africa Strategist Ms. Eva Wanjiku Otieno as she was presenting the Macroeconomic & Global Geopolitical Outlook of the region.

Ms Wanjiku noted that Uganda has a mixed growth outlook supported by public investment in infrastructure but the delay of the Final Investment Decision (FID) and upcoming elections would weigh on business prospects.

Ahead of the 2021 general election, she said that Election related uncertainty may increase supply concerns going into H2 of 2020 which may pressure yields higher.

She made the remarks during a Manufacturer’s Business Forum for over 150 manufacturers and various stakeholders at Hotel Mestil, with the aim to provide a platform for market players to network, share forward-looking insights and best practices.

The forum was themed “Practices for Sustainable Business Growth” which brought together subject matter experts and leading manufacturing businesses to deliberate on current trends affecting business growth in Uganda as well as share the latest research on important and policy-relevant topics.

Albert Saltson the Chief Executive Officer, Standard Chartered Bank Uganda said that “This new decade presents immense opportunities for business growth. It is critical that business leaders make insight led and research-based business decisions in partnership with strong and reliable financial partners who will help them stimulate their business growth.”

The Ugandan economy reported strong growth in 2019, estimated at 6.3%, largely driven by the expansion of services. Services growth averaged 7.6% in 2019, and industrial growth 6.2%, driven by construction and mining.

Agriculture grew at just 3.8%. Retail, construction, and telecommunications were key economic drivers. And Inflation is expected to remain below 5%, strengthening the domestic economy.

The Central Bank policy rate being at a historical low level due to subdued inflation has allowed for past easing.

However Government spending continues to increase and expenditures have increased faster than domestic revenues, widening the fiscal deficit which is largely financed through external borrowing, supplemented with domestic securities.

Despite the rise in the deficit, Uganda is classified at low risk of debt distress. But, debt reached an estimated 43.6% of GDP in 2019, up from 25% in 2012, raising medium-term concerns. Lending remains within IMF limits, but risks have increased due to higher costs of debt servicing and infrastructure investments.

This engagement granted an opportunity to the Bank’s clients to learn, engage, network and be empowered to improve their operating environment.

Bank of Uganda losses worry MPs

By Edwin Muhumuza

The parliamentary Finance committee has expressed concern as to why Bank of Uganda is making losses , a trend that is affecting the national reserves.

The committee heard that the central bank had invested Uganda’s reserves in Europe ,a move which did not yield any profits following the negative interest rates.

The revelation was made by officials led by Dr. Adam Mugume, Executive Director of Research, at Bank of Uganda while appearing before legislators to account for another 450bn shillings for re-capitalization.

Mugume told the committee that currently Uganda’s reserves have been invested in the United states of America,whose market offers an interest rate of 2%.

This though did not go well with members of the committee chaired by Hon.Paul Musasizi ,Member of Parliament, Rubanda County East Kigezi Sub Region amid concerns stemming from the conservative investment approach of the central bank with eyes on overseas financial markets.

Uganda has reserves now amounting to US $32billion but these could be swept away in a blink of an eye following poor investment decisions, warned the director of research.

During the interface, Amos Lugolobi ,a member of the committee and chair of the budget committee of parliament wondered why the central bank was adding to Uganda’s debt burden with such demands even after over 200bn was advanced to the bank in the previous financial year for re-capitalization.

Among the central bank’s expenses include monitory policy infrastructure, increased use of garnish orders, and high costs of currency infrastructure.

The Auditor General’s report 2018 notes that Uganda’s debt to GDP ratio of 41 per cent is still below the International Monetary Fund (IMF) risky threshold of 50 per cent and compares well with other East African countries. However economic analysts challenge that figure stating that the country is already well above the threshold with estimates at 55% which they say is unfavourable compared to national revenue collected which is the highest in the region at 54 percent”.

Concerns have always been about the sustainability of debt, taking in more commercial loans, whose conditionalities are probably not very conducive for Uganda as a developing country.

Meanwhile Parliament has resolved to have a national dialogue with officials from Bank of Uganda and the ministry of finance about the fate of Uganda’s economy more so over the ever increasing national debt as a result of multi-year programs that need constant funding as well as supplementary expenditure.

Airtel slashes transaction rates

By Moses Kidandi

Mobile phone company Airtel lowers money transaction rates.

Airtel Uganda has reduced money transfer rates for its customers by 79 percent.

The offer which takes immediate effect will see customers enjoy a reduction of person to person withdrawal charges by 79 and 60 percent which is the most competitive rate on market right now.

The massive reductions will apply to all transactions between one million and seven million shillings.

By lowering rates Airtel wants the see an increase in the number of mobile money users and improve access to affordable and basic financial services across the country.

NSSF declares 11% interest rate for 2018/2019 financial year

By Deo Wasswa
The National Social Security Fund (NSSF) has today declared an interest rate of 11% for the Financial Year 2018/2019 to its members, over and above the 10 year average rate of inflation now at 6.71%.

This was announced by the Minister of Finance, Planning and Economic Development, Matia Kasaija, during the Fund’s 7th Annual Members Meeting at Serena Hotel.

The interest declared is lower than last year’s 15% interest due to a decline in regional equity prices and strengthening of the Uganda shilling, which affected the valuation of the Fund’s holdings in all foreign currency balances and equity valuations, thus impacting the Fund’s over all income.

“The stock exchanges in East Africa, and generally in the whole of Africa suffered significant reduction in value of the listed entities, affecting entities like the Fund that invests regionally,” the Minister said.

The new rate translates into UGX 978 billion and will be calculated and credited on the balance outstanding on the members accounts as of 1st July 2018, in accordance with provisions of the NSSF Act.

“Although lower than what I declared last year, the rate I have declared today is higher than 6.7% – the 10 year average rate of inflation, the Fund’s benchmark. It is also higher than annual inflation of 3.4% recorded last Financial Year,” he said.

“Most important, the Fund has paid its members a real return, thus eliminating the risk of erosion of the value of their saving as a result of inflation.

NSSF Managing Director Richard Byarugaba said that in spite of the difficult investment environment, the Fund performed over and above most performance targets.

“Overall, we created value for our members. In fiscal year 2012/2013, we committed to pay members a real return – at least 2% above the 10 year inflation. We have consistently delivered on this promise and have done so again this year,” he said.

NSSF Board Chairman, Patrick Byabakama reassured members that the Fund was on a growth trajectory, having grown its assets under management by 13.6% from UGX9.9Trillion in the previous financial year to UGX11.3 trillion in 2018/2019.

He also said that the Fund’s focus going forward will be to conclude the Real Estate projects as well as innovations to be responsive to needs of the members that will be occasioned by the proposed NSSF Amendment Bill.

Samasource Kampala center to employ 250 youth

By: Gloria Nakiyimba

More Ugandan youth are to be employed by U.S technology company Samasource which has opened its Kampala offices at Kanjokya Street in Kamwokya. The new Kampala tech hub was opened on Friday by, US ambassador Deborah Malac who noted that as technology usages around the world become more sophisticated and complex Samasource will empower its employees to help Uganda adopt Artificial Intelligence to transform business.

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“U.S companies here have promoted impact sourcing as a hiring strategy to combat youth unemployment, support inclusive economic development and promote tangible business benefits. I am particularly impressed by Samasource’s ability to generate employment for and upgrade the skills of workers from low income and vulnerable communities allowing them to perform high-quality, information-based services” Ambassador Malac remarked.

She emphasized that the private sector plays a critical role in growing economic growth sustainably, pledging that her government will continue to engage with the government of Uganda on how it can best attract diverse investment and trade by fighting corruption and cutting bureaucratic red tape.

A leader in providing secure, high –quality training data for Artificial Intelligence[AI] technologies, Samsource first established its footprint in Gulu in northern Uganda where it has been operating for seven years now. The pioneer Gulu office has created more than 500 jobs targeting tech-savvy youth in that part of the country.

According to Leilah Janah founder and CEO of Samasource, “the opening of our new facility in Kampala is a representation of all we stand for at Samasource-connecting people to digital work and giving them the skills need to uplift and empower themselves and their communities”.

With the opening of the Kampala center, the company will be able to employ more than 250 members of the community. Samasource trains data for computer vision and NLP use cases which companies use to propel their AI technology forward in industries such as automotive, consumer internet, e-commerce, robotics and many more.