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The East African : Aug 16th 2015
14 Regional currencies have fallen against the dollar. Picture: File The EastAfrican NEWS AUGUST 15-21,2015 WEAKENED ECONOMIES Import bill puts pressure on falling regional currencies Rising inflation, weak expo≥t ea≥nings and an inc≥eased impo≥t bill blamed fo≥ fall in cu≥≥encies THE EAST AFRICA TRADE AND INVESTMENT HUB (EATIH) CALL FOR APPLICATIONS FOR INDIVIDUAL CONSULTANTS (IC) The East Africa Trade and Investment Hub (the Hub) is the U.S. government’s flagship project under the presidential Trade Africa initiative, launched in 2013 to boost trade and investment with and within Africa. The Hub partners with East African and U.S. businesses to attract investment needed to transform the East African private sector into vibrant global trading partners. Improving the region’s trade competitiveness, encouraging the diversification of exports beyond natural resources, and promoting broader, more-inclusive economic growth will lead to more food secure and resilient East African communities. The goal of the Hub is to deepen regional integration, increase the competitiveness of select regional agricultural value chains, promote two-way trade with the U.S. under the African Growth and Opportunity Act (AGOA) and facilitate investment and technology to drive trade growth intra-regionally and to global markets. The project pursues these goals through four integrated components: 1. Investment and technology 2. Agriculture and agribusiness 3. Trade promotion and African Growth and Opportunity Act (AGOA) 4. Trade policy and regulatory reform Under the EATIH project components 2 and 4, we invite qualified consultants (Individuals) with technical expertise and a proven record to develop an Electronic Notification System (ENS) for Sanitary and Phytosanitary (SPS) measures and Technical Barriers to Trade (TBT) regulatory and conformity assessments for the East Africa Community (EAC) member states. Member countries of the World Trade Organization (WTO) are required under the SPS Agreement and the TBT Agreement to report to the WTO, all proposed SPS measures and technical regulations that could affect trade with other member countries. The WTO Secretariat distributes this information in the form of “notifications” to all member countries. By using the electronic SPS and TBT notification systems, EAC member states’ private and public sector users will receive, via e-mail, notifications of drafts or changes to domestic and foreign technical regulations for manufactured and other products. SPECIFIC TASKS The Consultant will undertake a short-term assignment to develop the ENS, under the guidance of the Hub, existing sector players and EAC member states. The consultant will be responsible for, but not limited to, the following tasks: 1. Review of recent IT SPS/TBT ENS activities 2. Incorporate Sanitary and Phytosanitary notifications into the TBT ENS platform 3. Regional rollout of ENS in collaboration with USAID, The Hub and EAC member states’ TBT teams 4. Train and sensitize public and private sectors on ENS Details on the specific tasks and the complete Scope of Work can be found here: http:// www.eatradehub.org/partnership_fund_opportunities Qualifications: The minimum qualifications required for this position are: • An IT Specialist with at least 5 years of web-based multi user systems development, database interfacing systems and user training skills • Bachelor’s degree in computer science / information systems / business analysis • Demonstrated ability to work collaboratively with institutional and private sector partners and stakeholders in a multi-country setting DAI will only respond to written questions regarding this Call for Applications through the email address: ProcurementTIH@eatradehub.org.Questions must be submitted no later than Friday, August 21st 2015 at 11:59 PM HOW TO APPLY: Download the detailed scope of work from http://www.eatradehub.org/partnership_fund_opportunities Interested candidates should send their proposal to procurementTIHInbox@eatradehub.org by Friday, August 28th 2015, 5.00pm East African Time. The proposal submitted should have: • Curriculum Vitae (not more than 5 pages). • Proposed technical approach to the development of the ENS • Past work experience schedule stating assignment title, brief description of the assignment, client name, value of work done and point of contact. • Three (3) referees (references listed should be from supervisors or other individuals who reviewed consultancy work completed). • A copy of the highest awarded education certificate Fiscal outlook The fiscal outlook for the region is complicated by the upcoming elections in Tanzania this October, and in Uganda in early 2016. Kenya has the biggest fis- cal deficit at 7.5 per cent of its GDP, followed by Tanzania at 5.7 per cent and Uganda at 2.3 per cent. Tanzania’s current account deficit is the highest in the region at 11 per cent of its GDP, followed by Kenya at 9 per cent and Uganda at 8 per cent. Early last week, Uganda raised its benchmark lending rate from 14.5 per cent to 16 per cent in a bid to stem inflationary pressure and currency volatility. This decision comes barely a month after the Bank of Uganda increased the Central Bank Rate (CBR) by 150 basis points to 14.5 per cent, from 13 per cent in May. The country’s interbank lending rates rose to 15 per By ALLAN OLINGO The EastAfrican T he increase in fiscal and current account deficits in regional economies will continue to put pressure on their currencies, weakening them further in the first half of next year. East Africa has seen the value of its currencies plummet this year, against a backdrop of rising inflation, weak export earnings and an increased import bill. According to Citi’s chief Africa economist David Cowan, there will be increased pressure on these currencies because of a mismatch between financing inflows and demand. “We are seeing intense pressure on these regional currencies. Kenya’s fiscal deficit is the most problematic as it is most dependent on short-term financing. Uganda is the weakest link in the region as its export earnings have fallen drastically while its import bill has increased. It also has seen volatility continue, despite several attempts by its central bank to clamp down on the losses,” Mr Cowan said. cent last month, up from 5 per cent in April. Explaining the rise, BoU Governor Prof Emmanuel Tumusiime-Mutebile said that tighter monetary measures are required to forestall the risks of inflationary pressure. “We are trying to ensure that the annual inflation figures remain within single digits and are below our policy target of 5 per cent,” Prof Tumusiime-Mutebile said. Razia Khan, the manag- ing director for Africa global research at Standard Chartered, said the move by Uganda was anticipated as the BoU needed to proactively stabilise its foreign exchange market. Uganda’s inflation rose to 5.4 per cent in July, from 4.9 per cent the previous month. The local shilling has also fared badly against the dollar, shedding close to 27 per cent this year. Mr Cowan said the Ugan- dan market is flaccid at the moment, with most players apprehensive that the country will go back to the 2011 inflation and interest rates crisis. “The market sentiment on Uganda is very fluid. Despite the currency strengthening its position at 3,575 units to the dollar, the increase in the CBR and the rising inflation are sending signals that the central bank policy isn’t really as effective as many had expected,” Mr Cowan said. No gains The region is also yet to fully benefit from the fall in global oil prices because the rising import bill and exchange rates losses have wiped out any gains. Save for Rwanda, all the East African countries have recorded a rise in the retail price of fuel, which is expected to lead to a further increase in inflation. “The benefit of lower global oil prices looks likely to be relatively limited within the region because of the current currency depreciations being witnessed,” Mr Cowan said. Dr Louis Kasekende, the Deputy Governor of BoU, said the tight monetary policy STABILITY The Kenya shilling, which is down 10 per cent against the dollar this year, has been stable due to a shortage of the local currency in the domestic money markets. The Tanzanian shilling, which has depreciated 22.4 per cent this year, dropped 0.78 per cent last week to trade at an average of 2,150 units to the dollar. Analysts at Citibank expect it to reach 2,335 units to the dollar in the first half of next year. that the bank is undertaking has seen less money in the domestic market, leading to a low uptake of Treasury bills and bonds. “It is however important to note that we are using the CBR to tame inflation. Had we not raised these rates, then we would have seen double digits inflation figures of up to 10 per cent. I believe that we are going to witness a slower rise in inflation, a contraction in private sector credit growth, and a rise in the lending rate,” Dr Kasekende said. The Kenya shilling has strengthened by 1.4 per cent in the past month, buoyed by an aggressive mopping up policy by the central bank and tightening of the monetary policy. Philip Omuya, a treasury dealer, said the shilling has become stronger in the past month. “The positive feel in the market from the Global Entrepreneurship Summit, coupled with the interventions of the Central Bank, have seen the shilling strengthen. We expect this stabilisation to continue in the medium term,” Mr Omuya said. Interbank rates rose to 23.58 per cent, from 17.3 per cent at the beginning of July; the shilling is currently trading at 102.25 units to the dollar.
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