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Intervention by Central Banks on the Economic Impact of Covid-19


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27 March 2020 Views: 71

Intervention by Central Banks on the Economic Impact of Covid-19


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27 March 2020 Views: 71

COMMUNIQUÉ OF PRIVATE SECTOR ASSOCIATIONS IN THE EAC ON COVID-19 (NATIONAL FOCAL POINTS CHIEF EXECUTIVE OFFICERS) COORDINATED BY THE EAST AFRICAN BUSINESS COUNCIL ON 26TH MARCH 2020.


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27 March 2020 Views: 129

COMMUNIQUÉ OF PRIVATE SECTOR ASSOCIATIONS IN THE EAC ON COVID-19 (NATIONAL FOCAL POINTS CHIEF EXECUTIVE OFFICERS) COORDINATED BY THE EAST AFRICAN BUSINESS COUNCIL ON 26TH MARCH 2020.


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27 March 2020 Views: 129

IMPORTANT INFORMATION ON PREVENTIVE MEASURES FOR THE COVID-19


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21 March 2020 Views: 676

IMPORTANT INFORMATION ON PREVENTIVE MEASURES FOR THE COVID-19


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21 March 2020 Views: 676

NOTICE - POSTPONEMENT OF THE HIGH-LEVEL INDUSTRIALIZATION BUSINESS CONVENTION & CEO BREAKFAST ROUND TABLE ON 30TH -31ST MARCH, 2020 AT JOHARI ROTANA HOTEL, DAR ES SALAAM TANZANIA.


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17 March 2020 Views: 977

NOTICE - POSTPONEMENT OF THE HIGH-LEVEL INDUSTRIALIZATION BUSINESS CONVENTION & CEO BREAKFAST ROUND TABLE ON 30TH -31ST MARCH, 2020 AT JOHARI ROTANA HOTEL, DAR ES SALAAM TANZANIA.


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17 March 2020 Views: 977

Opportunity: ITC MARKUP - Application for Coffee Marketing and Communication Skills Workshop and the World of Coffee 2020, Warsaw


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16 March 2020 Views: 918

Opportunity: ITC MARKUP - Application for Coffee Marketing and Communication Skills Workshop and the World of Coffee 2020, Warsaw


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16 March 2020 Views: 918

Republic of Kenya- Central Bank Interventions.

 On 23rd March 2020, the Monetary Policy Committee (MPC) of the Central Bank of Kenya (CBK) met and analyzed the impact of the COVID-19 to Kenya’s economy and in light of the adverse economic outlook, the MPC unveiled the following policy actions to prevent the COVID-19 health crisis from becoming a severe economic and financial crisis:

  • Lowering the Central Bank Rate (CBR) from 8.25 percent to 7.25 percent
  • Reducing the Cash Reserve Ration (CRR) from 5.25 percent to 4.25 percent
  • Releasing KES35.2 billion as additional liquidity availed to banks to directly support borrowers that are distressed as a result of COVID-19.

The implications of these measures will mitigate the adverse impact of the COVID-19 to Kenya's economy and more importantly to the financial sector. The policy actions will definitely boost liquidity in the market as well as support commercial banks with cash which they can lend to various borrowers.  Also, the policy actions will give incentives to banks to avoid increasing lending rates.

Similarly, the CBK announced various measures to mitigate the negative impact of the COVID-19 which include:

  • Commercial Banks to provide relief to borrowers on their loans due to the COVID-19 pandemic;
  • Commercial Banks to provide a one-year relief period on personal loans (include mobile money borrowers). The relief will also apply to mobile money borrowers.
  • Banks to make it possible for Micro and Small Media Enterprise (MSME’s) and corporate borrowers to contact their banks so that they can assess and restructure their loans based on special circumstances that have been caused by the COVID-19 pandemic;
  • Commercial Banks to bear the cost required to extend and restructure loans during the time of COVID-19 pandemic;
  • Banks to waive all charges for balance inquiries

Given the fact that about 28 percent of lending in Kenya comprises of personal loans, these reliefs and measures will significantly cushion Kenyans against the impact of the COVID-19. The relief will ensure liquidity in the market and keep businesses afloat during this difficult time of COVID-19 pandemic.

The CBK has also unveiled a set of emergency measures to increase the use of mobile money transfers and curb the spread of coronavirus (Covid-19). The measures which will be effective until 30th June 2020 include:

  • zero charges for the mobile transactions of up to Kshs 1,000;
  • increasing the transaction limit to Kshs 150,000 (USD1447.730;
  • the mobile money wallet limit and daily transactions limit is placed at Kshs300,000 (USD 2895.46);
  • removing monthly transactions limit, and eliminating the transfers between mobile money wallets and bank accounts.

The implication of the measures will be to encourage Kenyans to use digital channels and contactless mobile payments. These measures will not only strengthen efforts to curb the spread of the Covid-19 but also sustain the payment of transactions even during the lockdown measures.

  

Republic of Rwanda- Central Bank Interventions.

 

As Rwanda braces for a lockdown, closed borders, grounded aircraft all aimed at preventing the spread of the deadly coronavirus, there is a significant effect on the economy. The Central Bank of Rwanda has come out with various interventions aimed at not only combating the spread of the COVID 19 but also reduce the effect of doing business. It is, therefore, worthwhile to delve into the interventions and look at the impact on business.

  1. Extension of Lending Facility: More than 80% of the liquidity in local banks is generated from the domestic market. With businesses slowing down, deposits coming to banks will decline. It is anticipated that banks might get affected with short term liquidity challenges because of the pandemic. The National Bank of Rwanda has put in place a liquidity window to allow the banks to continue serving their customers.

 

To facilitate the private sector borrowers, a fund close to $52 million has been earmarked to bridge liquidity challenges and commercial banks can access this facility at the central bank rate. The stimulus whose beneficiaries include individuals, SMEs and large corporates regardless of their sector of operation, is meant to relax measures on loans and giving clients some room to breathe, given that the crisis does not go beyond six (6) months.

 

  1. Lowering Reserve Ratio: The Central Bank announced lowering the requirement ratio from 5% to 4% to allow banks more liquidity to support affected businesses. Normally, the central bank maintains a range of liquidity facilities such as intra-day liquidity facility, overnight lending facility, reverse repo for seven days and refinancing facility for seven days which ensures than tanks can lend.

 

Effective April 1, BNR is expected to lower the reserve requirement ratio from 5% to 4% to allow banks more liquidity to support affected businesses. This will increase liquidity by up to Rwf 26 billion, effectively increasing funds available for lending to the economy.

 

  1. Review of Treasury Bonds: For the next six months, BNR has offered to buy back bonds at the prevailing market rate. The regulator also reduced the waiting period if one fails to sell the bond at the secondary market from the current 30 days to 15 days. The implication is that money will flow from the Central Bank to individual banks leading to increased borrowing, hence there will be increased money circulation in the economy for the producers and consumers to use.

 

  1. Restructuring Loans: The Central Bank anticipates that customers with huge loans would face challenges in servicing those loans thus creating liquidity problems to the banks. This is why banks are allowed to engage their customers and re-negotiate terms especially to those with outstanding loans facing temporary cash flow challenges arising from the pandemic. Restructuring these debts will mean making lower repayments each month, freeing up cash for running businesses and avoiding closure, and consolidating existing debts could mean that one pays a lower interest rate overall, reducing the cost of finance to your business from outstanding loans.

 

  1. Zero charges on Mobile Money Transfers: Charges have been removed on P2P transactions (sending money from one person to another). This is in a bid to encourage the public to use “cashless means of payment”. The limit for individual transfers using mobile money wallets has been increased from Rwf 500,000 to Rwf1.500,000 for Tier I customers and from Rwf 1million to Rwf 4million for Tier II customers. Digital channels and contactless mobile payments are efforts aimed at limiting the risk of transmission of Corona Virus through handling cash and other non-virtual means of payment for the next three months and effective from March 19th, 2020. However, projects that require huge disbursements will be affected in terms of operation and rollout deadlines.

 

United Republic of Tanzania- Central Bank Interventions.

 

With 12 reported cases of COVID-19, Bank of Tanzania has not yet effected any monetary policy interventions as of 24th March 2020. It conducted a consultative session with bankers through Tanzania Bankers Association where it encouraged cashless transactions and other alternative payment channels. Further to this, the bank is set to declare interventions that will promote the stability of Tanzania’s economy amid this pandemic. Similarly, the graph below shows the trend of the value of USD to TZS over the period before and after COVID-19 pandemic.

Source: Trading Economics

With the first case reported on 16th March, the Tanzanian shilling has remained consistent in terms of its value with an average of 2302. However, at the beginning of the year, it depreciated until the end of February where it appreciated. This trend took a turn on March 16th where the first case of COVID-19 was reported in Tanzania and the currency depreciated with a slight recovery in the past 2 days. The implication of this is higher prices for imported products including consumer and producer goods. This calls for an intervention from the Bank of Tanzania so as to mitigate the negative impact of higher prices.

 

Republic of Uganda- Central Bank Interventions.

 

Bank of Uganda to provide exceptional liquidity assistance for one year to financial institutions and waive limitations on restructuring credit facilities of financial institutions that may be going into distress

This is meant to strengthen the banking institutions to remain afloat amidst this stalemate as few borrowers will be able to pay back their loan obligations. Therefore, with this intervention, the financial institutions are unlikely to go into financial distress and the business community can still continue to borrow.

Intervention in the forex market to smoothen out excess volatility arising from the global financial markets.

The central bank has given assurance that amidst this pandemic it will intervene in the foreign exchange market in a moderate way to deter the shilling from falling further. Since the pandemic, the shilling has been depreciating and by far has lost by 3.9%.

This, therefore, implies that the dollar is managed at levels that can allow the business community to continue importing hence avoiding a spike in commodity prices.

Mechanism to minimize the likelihood of sound business going into insolvency due to lack of credit.

The Central bank realizes that businesses need credit to finance their investments and remain solvent.

Therefore, this facility/mechanism assures the business community that the central bank will avail credit to finance their investments and thus avoid going into distress

 

Engaging Mobile Network Operators (MNOs) and commercial banks to:

  • Further, reduce fees on mobile money transactions and digital payment charges to limit the use of cash and bank branch visits.
  • Increase daily transaction and wallet size limits for mobile money limits

The public has been cautioned against the use of paper money as well as coins given the health risks associated with the spread of the Coronavirus.

Thus, the intervention by the central bank to reduce fees on mobile money transactions and increasing wallet-size limits encourage digital payments which then reduces the risk of infections.

 

COMMUNIQUÉ OF PRIVATE SECTOR ASSOCIATIONS IN THE EAC ON COVID-19 (NATIONAL FOCAL POINTS CHIEF EXECUTIVE OFFICERS) COORDINATED BY THE EAST AFRICAN BUSINESS COUNCIL ON 26TH MARCH 2020.

We, the Chief Executive Officers of National Private Sector Apex Body Associations in the EAC region held an online meeting today, 26th March 2020 on the preparedness and response measures against the outbreak of Coronavirus disease (Covid-19) in the EAC region.

Noting that Covid-19 pandemic has infected 28,41,12, 14 in the Republic of Kenya, Republic of Rwanda, United Republic of Tanzania and the Republic of Uganda respectively as of 26th March 2020. As we remain optimistic that together we shall overcome this global pandemic, the EAC region has reported 4 cases of recovered patients and no reported cases of infection in the Republics of South Sudan and Burundi.

Acknowledging the paramount importance of protecting the health, and safety of the East African people, as the regional private sector we commit and join hands with the governments to ensure that the business community complies with the measures to protect the lives of our fellow citizens.

 

Further, noting the ongoing Covid-19 presents a significant challenge to EAC economies, disrupting global and regional value chains hence impacting business operations from supplies, production capacity, distribution channels and utilization of resources. We commit to remain resilient

Appreciating, the recent efforts by the EAC Council of Ministers geared towards facilitating the free movement of goods and services across the EAC Partner States, following the joint statement by Ministers Responsible for Health and EAC Affairs issued on 25th March 2020 on Covid-19 preparedness and response in the EAC region.

Further, we appreciate and acknowledge, the EAC Partner States for engaging and incorporating the private sector in the National Coordination Committee on Covid-19 in the Partner States.

Committing to partner in information sharing, learning, monitoring amongst ourselves and collaborate closely with the governments of the EAC Partner States on Covid-19.

 

Noting the importance of the growth of EAC industries, food security and competitiveness of the EAC bloc in light of the pandemic, we recommend as follows:

 

  1. The EAC to come up with a common Post Covid-19 recovery/rebound strategy for the region with a focus on intra-EAC trade and investments.
  2. The EAC Partner States to replicate and learn best practices from each other towards compacting the pandemic.
  • Private Sector to collaborate closely with the governments to combat Covid-19 pandemic in the EAC region.
  1. The EAC region to ensure the borders remain fully operational and facilitate the free movement of goods and services across the EAC Partner States.
  2. The EAC Council of Ministers to hold meeting more frequently for information sharing and collaboration.
  3. As a prosperity measure, the EAC Partner States to regulate recurrent expenditures and focus on increasing budgetary allocation on health, social services and food security.
  • The EAC Partner States to allocate more funding towards the recruitment of health personnel to support combating the Covid-19 scourge.
  • The EAC Council of Ministers to come up with harmonized fiscal incentives for businesses in the region due to the impact of Covid-19.
  1. The EAC to come up with practical measures aimed at enhancing regional value chains to reduce over-reliance on imports.
  2. Private Sector Associations to collaborate and share information on the short term and long-term impact of Covid-19 to inform the business Post Covid-19 recovery strategy.
  3. The EAC to ensure food security, promote agro-processing and urban farming to carter for food provision in our urban setups
  • Fast track and enhance EAC framework for e-commerce to ensure ease and access to essential goods within the region.
  • The EAC to facilitate easier access to inputs and intermediate products for industries.
  • The EAC region to reduce port and transport fees, levies and charges affecting the competitiveness of the EAC bloc.
  1. Urge development partners to support the EAC and private sector initiatives of combating the Covid-19 outbreak in the region and also initiate donor round tables to support priority areas.

 

In conclusion, we appreciate and salute Trade Mark East Africa (TMEA) in their role in promoting trade facilitation for increased trade and investments in the EAC region.

 

Signed on this 26th Day of March 2020.

 

 

 

Mr. Stephen Ruzibiza

Chief Executive Officer, Private Sector Federation- Rwanda (PSF).

 

 

 

 

 

Mr. Godfrey Simbeye

Executive Director, Tanzania Private Sector Foundation (TPSF).

 

 

Mr. Gideon Badagawa

Executive Director, Private Sector Foundation Uganda (PSFU).

 

 

 

 Dr. Peter Mathuki             

CEO/ Executive Director, East African Business Council (EABC).

 

Mr. Denis Nshimirimana 

Secretary General, Federal Chamber of Commerce Industries and Agriculture – Burundi (CFCIB).       

 

 

Ms. Carole Kariuki

Chief Executive Officer, Kenya Private Sector Alliance (KEPSA).

 

Mr. Hamad Hamad

Executive Director, Zanzibar Chamber of Commerce (ZNCC).

 

 

Mr. Simon Deng

Secretary General, South Sudan Chamber of Commerce Industries and Agriculture (SSCCIA).

 

The East African Business Council wishes to advise the East African business community to take the following precautionary measures in light of the outbreak of the coronavirus (Covid-19).

  1. Implement strictly the preventive measures as directed by the respective Ministries of Health in the EAC Partner States.
  2. Companies are highly advised to clean and disinfect the workplace, to install hand sanitizer dispensers at all entry and exit points.
  3. Avoid unnecessary travel for staff.
  4. Sensitize employees and customers on the precautionary measures for protection.
  5. Promote the use of online communication technology and e-commerce platforms in the workplace to interact with staff, customers, suppliers, distributor and all actors along the industry chain.
  6. Maintain 1 Metre distance among customers in the workplace.
  7. Where applicable advise your staff team to work from home to minimize the risk of contracting COVID-19.
  8. Private Sector players are encouraged to continue manufacturing, exporting and selling goods across the EAC Partner State.
  9. Refrain from unjustifiable hiking of prices for products.
  10. Refrain from trading of substandard products.
  11. If you experience any symptoms including fever, cough and difficulty breathing, kindly seek medical advice immediately.
  12. Avoid congregating in places of mass social contact.
  13. Sanitize and clean your hands often-wash with soap and water and especially after you have been in a public place, or after blowing your nose, coughing, or sneezing.
  14. Stay informed and follow the advice given by your healthcare provider.
  15. Revise and implement the business continuity and resilience plan.

 

Emergency Contacts and Referral Hospitals

Tanzania

 

Toll Free Number: 0800110124 | 0800110125 | 08800110037

Referral hospitals

  • Dar es Salaam– Mloganzila
  • Mwanza Kituo cha Buswelu
  • Kilimanjaro -Mawenzi
  • Zanzibar -Mnazi Mmoja
  • Pemba – ChakeChake

Or any other medical facility near you.

 

Kenya

Toll Free Number 0729 471414 | 0732 353535 | Country Code: 254

Referral Hospitals

Kenyatta National Hospital (KNH)

Hospital Road Upper hill, Nairobi.
Tel. 020-2726300
Cell: 0709 854000/ 0730 643000

Hotline: 020 2737390 | Referral: 0719 510510

Email: knhadmin@knh.or.ke

 

Mbagathi District Hospital

Mbagathi way, Nairobi.

Tel:  020 2728530, 2724712

Kenya Country Code: +254

 

Or any other medical facility near you.

 

Uganda

 

Toll Free Number 0800203033 | 0800100066

Contact Persons:

  • Atek Kagirita Cell: 0782909153
  • Allan Muruta Cell: 0772460297

Country Code: 256

 

Rwanda

Toll Free Number: 114

For any inquires and feedback, kindly contact the Executive Director’s Office Email: admin@eabc-online.com  and director@eabc-online.com.

 

Issued by

Dr. Peter Mathuki

Chief Executive Officer/Executive Director.

NOTICE OF ADJOURNMENT 

POSTPONEMENT OF THE HIGH-LEVEL INDUSTRIALIZATION BUSINESS CONVENTION & CEO BREAKFAST ROUND TABLE ON 30TH -31ST MARCH, 2020 AT JOHARI ROTANA HOTEL, DAR ES SALAAM TANZANIA.

 

This is to inform all EABC members, development partners, sponsors and government officials that due to the outbreak of the Coronavirus (Covid-19), the East African Business Council (EABC) in consultation with the Tanzania Private Sector Foundation (TPSF), Confederation of Tanzania Industries (CTI) and Tanzania Chambers of Commerce Industries and Agriculture (TCCIA), has adjourned the Industrialization Business Convention and the CEO Round Table Breakfast Meeting scheduled to be held on 30th -31st March 2020 at Johari Rotana Hotel in Dar es Salaam, Tanzania, until further notice.

 

The EABC stands in solidarity with the East African Community (EAC) Partner States’ measures in an attempt to control Covid-19 infections.

 

Apologies for any inconvenience caused, the new date for the event will be communicated accordingly.

 

Issued on 16th March 2020.

Dr. Peter Mathuki

Executive Director/CEO

East African Business Council (EABC)

 The International Trade Centre (ITC) is implementing the "Market Access Upgrade Programme" (MARKUP) in five East African Community (EAC) partner countries, particularly aiming to contribute to the overall economic development of Burundi, Kenya, Rwanda, Tanzania and Uganda. More specifically, the programme supports various Small and Medium Enterprises (SMEs) in increasing their export competitiveness within select sectors, including coffee. More information about MARKUP can be found here

 

Market access is one of the most often mentioned needs of coffee exporting SMEs; accessing and understanding new markets, finding and meeting new buyers, and being able to better market and communicate themselves and their products against global competitors. MARKUP provides the opportunity to help address this need by offering the opportunity for SMEs to participate in the following:

 

  1. A Marketing and Communications workshop which will cover introductory advice and individual coaching on marketing and branding; and effective buyer negotiations – May 2020
  2. The SCA World of Coffee 2020 (WOC2020) in Warsaw, which will include a workshop on European buyer expectations and market demand and how to be effective during the exhibition, individual exhibition space in the MARKUP booth, and a coffee cupping event – June 2020.

 

Applications are therefore welcome from SMEs operating in the specialty coffee export segments of the EAC, who wish to participate in the Marketing and Communication Skills Workshop in May 2020 and the World of Coffee 2020 (WOC2020) in Warsaw, Poland in June. A total of 25 participants will be selected with 5 participants each from Burundi, Kenya, Rwanda, Tanzania and Uganda.

 

Applications are accepted only online. Please apply at this link: https://form.jotform.com/200562977442055

 

APPLICATION DEADLINE: APRIL 3, 2020