The Exchange - East Africa's Source for Financial News The Exchange MAY 2017 - FINAL (1) | Page 6

6 .
TANZANIA
MAY 2017

President Magufuli launches construction of SGR

President of the United Republic of Tanzania , Dr . John Pombe Magufuli cutting the ribbon marking the official launch of the construction project of Standard Gauge Railway from Dar es Salaam to Morogoro with a length of 300 kilometers . From right is the Secretary General of the Ministry of Works , Transport and Communications Engineer Leornard Chamrilo , First Lady Mama Janeth Magufuli , Minister of Works , Transport and Communications Professor Makame Mbarawa and Representative of Yapi Merkezi company from Turkey , Emre Aykar . Photo by George Lupatu / MediaPix
President of the United Republic of Tanzania , Dr . John Pombe Magufuli holding the certificate of artwork for the Standard Gauge Railway immediately after laying the foundation stone . Photo by George Lupatu / MediaPix
By Athanasius Lupatu

Mid-April saw President of the United Republic of Tanzania , Dr . John Pombe Magufuli lay the foundation stone for Phase 1 of the construction of the Standard Gauge Railway ( SGR ) in Pugu , a few kilometres from Dar es Salaam city . This first oneof--kind electric railway will run 300km from Dar es Salaam to Morogoro region . When completed the rail will transport an average of 10,000 tonnes of goods and have passenger trains travelling at speed of 160km / hr . The project is expected to create employment for an estimated 600,000 people , of which 30,000 will be directly employed . President Magufuli instructed Minister of Works , Transport and Communication , Prof . Makame Mbarawa to ensure that Pugu residents were given first priority on the employment . The project is also seen to benefit different sectors in the economy such as trade with neighbouring countries , tourism
and other economic sectors . According to President Magufuli lack of proper infrastructure is estimated to lower trade volumes by 40 per cent in Africa , thus its share in global trade is below five per cent and intra-African trade is below 15 per cent , while in other continents it is between 40 to 60 per cent . In 2016 , the government of Tanzania secured a $ 7.6 billion loan from China ’ s Export-Import Bank ( Exim ) for construction of the SGR , of which the Dar es Salaam Morogoro phase cost a total of US $ 1.215bn . President Magufuli has instructed contractors to ensure they complete work within the set deadline . The companies awarded the tender to construct the electric rail are Yapi Merkez Insaat Ve Sanayi from Turkey and Mota-Engil , Engenharie & Construcao Africa , SA from Portugal . They have been entrusted with the responsibility for seeing the rail completed in 30 months ’ time . Prof . Makame Mbarawa said the government has already invited bidders
President of the United Republic of Tanzania , Dr . John Pombe Magufuli posing for a group photo with Tanzania government officials and workers of Yapi Merkezi company from Turkey . Photo by George Lupatu / MediaPix
for the construction of the remaining Morogoro-Mwanza stretch . The work includes design and construction of a 336 kilometre stretch of the SGR from Morogoro to Makutopora , a 294 kilometre stretch from Makutopora to Tabora , 133 kilometre long Tabora to Isaka and 294 kilometre stretch from Isaka to Mwanza . The SGR is part of the EAC initiative to have a common rail that will help facilitate trade , create efficient regional links , improve business within the
President of the United Republic of Tanzania , Dr . John Pombe Magufuli posing for a group photo with Tanzania government officials . Photo by George Lupatu / MediaPix
EAC and foster strong multilateral relationships . Countries like Tanzania and Kenya stand to benefit from the SGR as they are the entry point of many landlocked countries in East and Central Africa such as Rwanda , Uganda and the DRC , which means these countries will be using the railway more often to access the ports easily and cost effectively than to rely on roads that can sometime be hazardous and inaccessible .

The ABCs of ABT

By Mariam Kibwana

As Tanzania is approving various development projects to meet economic growth in its Vision 2025 goals of becoming a middle-income country , various institutions have amplified their efforts to ensure the goal is met . The country is also implementing its Sustainable Development Goals ( SDGs ) as the 2030 agenda in achieving substantial economic growth . The banking sector has continue to receive tremendous growth with more banks being established while the already established ones have added more branches across the country . Tanzania has emerged as a regional leader in its push to provide a conducive environment for financial inclusion , because of the bold policy approach by the Bank of Tanzania to allow non-banking institutions to providefinancial services . In May 2015 , the state implemented the Tanzania Automated Clearing House ( TACH ), which has increased the security features on cheque instruments while reducing clearing days , to the benefit of clients . Additionally , electronic funds transfers can now be processed more quickly and efficiently by providing multiple settlement windows within a day . Ultimately , the new system will allow cheques to be processed within hours , while introducing penalties for banks that incur delays for cheque clearance . According to BMI Research , continued growth in mobile phone usage and an expansion in mobile money services has driven the performance of the mobile banking and financial sector . This in tandem with provision of micro-loans will continue to be the main drivers of growth within the sector . The Tanzanian banking sector ’ s funding structure is relatively strong . The sector ’ s loan-to-deposit ratio sat at 78 percent in 2015 which though higher than its five-year average of 69 percent , remains comfortable . This implies that Tanzania ’ s banks are predominantly domestically funded , less reliant on external financing , and thus less exposed to external shocks . Besides this , some banks including Access Bank Tanzania have instituted positive changes in the banking sector to meet substantial economic development . Access Bank Tanzania ( ABT ) is a socially responsible commercial bank with a special focus on micro and SME finance . It has been almost six months now since the launch of the Access Bank Kikundi

Account which is powered by Access Mobile . Access Bank came up with a new way of saving the cashbox money by starting the Kikundi account that is connected to mobile phones and works thus : every transaction will be initiated by the group chairman and approved by two treasurers through their mobile phones . More than 170 loans and savings groups from across the country have joined the Kikundi account which is specifically tailored for informal savings and loan groups that are keen to save and loan to their group members . Access Bank has partnered with international NGO , Care International which has been involved in the teaching and monitoring of these informal savings and loans groups , many of which are located within local towns and villages . These groups usually have 15 – 30 members who meet at least once a week for the purpose of buying shares , taking loans as well as debating on other current affairs influencing today ’ s generation . According to Access Bank ’ s Chief Business Development Officer , Andrea Ottina , there has been a positive response from many savings and loans groups that have joined this account . “ This is a very unique account which is tailor-made to assist informal groups to keep their money safe and manage it in a more modern and digital way . This is a more effective way of saving and managing money that records and keeps all transaction information that was never there before with the groups , including
Deputy Permanent Secretary of the Ministry of Finance and Planning Hon . Dorothy Mwanyika delivering a speech during the launch of KIKUNDI account by Access Bank Tanzania , ( L ) Care Tanzania representative Mr Christian Pennotti and ( R ) Access Bank Tanzania , Head of Business Development , Andrea Ottina . Photo Courtesy of Access Bank Tanzania .
the all-important security feature . He also said that these informal groups have a total savings with the bank of more than TShs . 134 billion . Commenting on this , Senior Marketing Officer at Access Bank Tanzania , Sijaona Simon said : “ Kikundi account has helped many informal groups with the issue of security ; furthermore , the group ’ s members have enjoyed free banking services through their mobile phones . AccessBank through its AccessMobile services offers free mobile banking services to its customers that have opened a Kikundi account . A customer who has subscribed to Access Mobile can transact using his / her account without any charges . This is a service that has attracted many of our customers . Kikundi as we know is powered by AccessMobile thereby making instant mobile banking transactions that benefit these groups at no fee or charge .”