Dar, Ankara eye 2tri/- trade volume

Expectations were especially high at the afternoon Tanzania-Turkey Trade Forum at the Bank of Tanzania (BoT) conference centre, after President John Magufuli had earlier hosted his Turkish counterpart Recep Tayyip Erdoğan at State House.

Dr Magufuli expressed optimism that given the link between the Tanzania’s businesspeople and their Turkish counterparts, the trade volume between the two countries would probably grow to one billion dollars from the current 190 million US dollars (about 400bn/-), in the next few years.

“Business people from both countries should exchange contacts for each of you to come up with at least one business idea at the end of this forum,” President Magufuli told the business community from the two countries.

President Erdoğan told the forum that the common problem of African countries was unemployment, proposing huge investments as one of the most powerful tools to fight the vice. “So today, the gathering between Turkish and Tanzanian businessmen here means that investments will increase, leading to creation of new jobs.

“I invite businesspeople from Tanzania to work with their Turkish counterparts to jointly invest in Turkey, Tanzania or even in other countries. I also call upon Turkish businesspeople to explore investment opportunities in Tanzania,” he said.

The visiting leader who was on a two-day state visit said the Turkish government wants to reflect the positive political ambience between the two countries to trade and economic relations. “Our meetings have been very fruitful regarding the future of both countries.

We have observed that there is huge potential for cooperation between our two countries. We want to extend this cooperation to trade, tourism, agriculture, railways, industry and construction,” he insisted.

Speaking at the State House earlier, President Erdoğan decried the low trade volume 190 million dollars between Ankara and Dar es Salaam, saying it does not reflect the real potential that exists. He instead wished the amount to increase to at least 500 million dollars, per annum.

During the forum, Tanzania Private Sector Foundation (TPSF) and its Turkish counterpart, the Forum Economic Relations Board (FERB), signed the MoU on the strengthening of good trade relations between their members.Earlier, at the news briefing at State House, the two countries inked nine MoUs to cement bi-lateral relations on industry, defence, health and tourism.

Cabinet Ministers and high-ranking officials from the two governments signed the agreements as President Magufuli and his guest watched. Speaking after the signing, Tanzania’s Minister for Natural Resources and Tourism, Prof Jumanne Maghembe, said the MoU on tourism between Dar es Salaam and Ankara will “facilitate our manpower capacity building in the tourism industry.

” “The agreement will also enable us to attract more investments from Turkey in the hospitality industry through construction of hotels, particularly along the Indian Ocean coast line,” the minister stated.

Prof Maghembe was optimistic that the visit by the Turkish leader and MoU signing will increase the number of backpackers from Turkey to Tanzania from the current 10,000 to 100,000, annually.

“There is a lot we can learn from Turkey and the agreement will enable us to achieve our targets...Turkey receives over 10 million tourists annually even though we have more tourist attractions than them,” he pointed. Minister for Health, Community Development, Gender, Elderly and Children Ummy Mwalimu explained that the signed agreement on health will help Tanzania on capacity building in specialised treatment. “We will train our people on such specialised skills and at the same time acquire medical equipment from Turkey.

“Last year, for instance, we sent out 305 patients with kidney and liver complications outside the country for treatment down from 500 in 2015...the number can be reduced if we offer such treatment domestically,” the minister remarked. She hinted as well that the Turkish government had pledged to support Tanzania towards establishment of Hospital Management Integrated System to improve efficiency in the health sector.

“The system will enable health practitioners to electronically register, trace and make follow up of patients during service delivery. It will also enable the government to track revenues generated at the health facilities,” she explained. Other signed agreements were between Air Tanzania Company Limited and Turkish Airlines, Tanzania Broadcasting Corporation and Turkey’s state broadcaster, with another MoU on education and research. Small Industries Development Organisation also inked the agreement with its Turkish counterpart.

Other MoUs were on defence co-operation and diplomatic relations. The MoU is a formal agreement between the signing parties to establish official partnerships. It’s not legally binding but it carries a degree of seriousness and mutual respect.

...Magufuli invites Turkey to multitrillion railway project

President Magufuli as well revealed that a Turkish company was among the short-listed contractors that had bid for implementation of the multitrillion shilling project that covers over 1,200 kilometres from Dar es Salaam to Mwanza.

Dr Magufuli’s disclosure came as he hosted a joint press conference at the State House with the visiting President of Turkey, Mr Recep Tayyip Erdoğan, who was in the country for a two-day state visit.

“I have appealed to government of Turkey through their EXIM Bank to provide funds for construction of a section of the standard gauge railway to which President Erdoğan has agreed...he has directed his finance minister to work on it,” the president announced.

President Magufuli said the visiting Turkish leader had pledged to support the project, “describing the 400-kilometer stretch asked for by the Tanzanian government as too small.” The two leaders had a closeddoor meeting for the better part of yesterday, reportedly dwelling in bi-lateral relations between the two countries.

“For our economy to grow, we must develop friendship and co-operation with other countries...Turkey, for instance, is ranked the seventh leading producer of food crops in the world. We can use their technology to improve agriculture in our country,” President Magufuli noted.

Adding, “Tanzania is a developing country, but eager to cooperate with developed countries in the world.” President Magufuli was hopeful as well, that direct flight between Tanzania and Turkey through Turkish Airlines will add the number of tourists visiting Dar es Salaam from Ankara. Trade volume between Tanzania and Turkey stood at US 66 million dollars in 2011 and the amount more than doubled to US 190 million dollars as of last year.

“There are currently 30 Turkish projects registered in Tanzania with a combined value of 505.08 million US dollars... the investments have created 2,950 jobs for Tanzanians,” Dr Magufuli noted. President Erdoğan pointed out that there was huge potential for cooperation between the two countries in sectors like industry, trade and tourism, among others.

“The current rate of trade volume of 190 million dollars does not reflect the real potential, I believe the amount could be as much as 500 million dollars per annum. “We want to strengthen co-operation between our countries through enhancement of investments and promotion of entrepreneurship,” he remarked.

The visiting leader, who arrived in Tanzania on Sunday and was expected to depart yesterday evening, was optimistic that authorities in Tanzania would provide smooth facilitation for Turkish investors wishing to invest in Tanzania. President Erdoğan invited President Magufuli at the inauguration of the Tanzania High Commission in Ankara, Turkey, scheduled for the near future.

In another development, President Erdoğan asked the support of President Magufuli and the government of Tanzania in flushing-out members of the Fethullah Gülen Movement from the African continent. The Turkish government accuses the movement, founded by Muhammed Fethullah Gülen, now in exile in the United States, for the failed coup attempt in Turkey last year.

“As you know Mr President there was a coup attempt in Turkey in July last year in which about 240 people were killed and over 2,000 injured, this movement (Gülen Movement) is present everywhere, including Africa.

“It is my hope that your government will support us to eradicate the movement in Africa,” he appealed.

Over 370bn/- raised through treasury bills

The Bank of Tanzania (BoT) auction summary shows that the instrument attracted bids worth 370.44bn/- in the auction held last week compared to 137bn/- offered to the market although at the end 273.98bn/- became the successful amount. The positive performance is a sign of the easing tight liquidity in the market that hit capital and money markets in the recent days.

Most investors reduced investment on long term, particularly bonds to fulfill year end periods to fulfill social and quarterly tax obligations. However, the situation did not affect treasury bills that continued to attract massive bids.

Yield rates declined slightly across all tenures, but did not affect investors’ appetite on the treasury bills. Major investors in the one year treasury bills are commercial banks, pension funds, insurance companies and some micro-finance institutions.

The two tenures 364 and 182 days contributed 98 per cent of the total bids during the trading session. The 364 and 182 days offer attracted bids worth 239.31bn/- and 128.58bn/-respectively against 85bn/-and 50bn/- offered to the market for bidding.

Yield rates for the 364 and 182 days offer were 15.78 per cent and 14.53 per cent from 15.79 per cent and 14.54 per cent of the previous session held two weeks ago. The yield rates for the 91 and 35 days tenure were 7.14 per cent and 6.81 per cent in the 24 months treasury note.

The highest and lowest bid/100 for the 364 and 182 days offers were 86.65/ 84.74 and 93.40/ 91.76 respectively while for the 91 and 35 days tenor had 98.25/ 96.63 and 99.36/ 99.35. The minimum successful price/100 for the 364, 182 and 91 days offer were 86.28, 93.07, 98.25 and 99.35 respectively.

The weighed average price for successful bid for the 364 tenure was 86.40, the 182 days offer was 93.24, 91 days offer was 98.25 and 99.35 for the 35 days offer.

Acacia in talks with Endeavour about merger

London-listed Acacia, which is majority owned by Canada’s Barrick Gold, said the two companies had held preliminary discussions that “may or may not result in agreement of a transaction”.

Toronto-listed Endeavour, which has gold mines in west Africa, also confirmed that discussions had taken place. It would be a good deal for both parties and a good deal for London because it brings another sizeable gold business Jonathan Guy, Numis A combination of the two companies would meld Acacia’s assets in Tanzania with Endeavour’s mines in Côte d’Ivoire, Burkina Faso, Mali and Ghana.

It could also create a company with more money to focus on exploration in Africa, at a time when gold supply is set to peak by the end of the decade.

Acacia has been exploring in Burkina Faso’s Houndé belt, where Endeavour is currently building a project. It would also result in a gold company with over 1m ounces of annual production, Mr. Guy said. “It would be a good deal for both parties and a good deal for London because it brings another sizeable gold business.”

After dropping from a peak of over $1,800 in 2011 to just above $1,000 in late 2015, gold prices have since rebounded to $1,197 a troy ounce, boosting shares in gold miners that have spent years trying to reduce their debts and cut costs.

Shares in Acacia have risen by 151 per cent over the past year, giving the company a market capitalisation of £1.72bn as of January 12. In March Endeavour bought True Gold Mining for C$240m, giving it access to a mine in Burkina Faso.

Its shares have risen by 220 per cent over the past year, for a market cap of C$2.132bn. The merger could give the combined company greater scope for exploration at a time when gold miners have been focused on expanding their existing assets.

Barrick Gold has said it does not expect its total gold production to expand in the next four years, leading many to forecast a supply shortage by the end of the decade.

Brad Gordon, chief executive of Acacia, told the Financial Times in November the company had developed an exploration pipeline with over 60 targets in Africa and was still looking to acquire more assets on the continent. “You’re seeing production profiles falling off a cliff in a few years— and that’s why strategically we’ve swum against the tide,” he said.

But Mr Gordon noted that the window for exploration was shrinking as other junior mining companies started to get access to capital. Last year Endeavour said it wanted to spend $35 to $40m annually on exploration over five years, targeting discovery of 10m to 15m ounces of gold.

We have food surplus, not shortage - Minister

The Minister was reacting on the recent comments on the state of food in the country. He said so far there is enough food in the country.

He said in the last season, the country had a total of 3 million metric tonnes of surplus food and that farmers were allowed to sell cereals after realizing there was enough food to feed the nation. “Until October, at least 1.5 million metric tonnes of cereals were sold from 3 million metric tonnes, this means the country remained with 1.5 million metric tonnes of food, which would not have been consumed from October to December,” he noted.

According to Dr Tizeba, so far the National Food Reserve Agency (NFRA) has not provided single kilogram of cereals to any region or district. “NFRA has not provided food to anyone, this means our stock is intact, and thus Tanzanians should not worry about anything,” he said.

However, the Minister noted that the situation on the ground indicates that food prices especially maize has increased from July, 2016. “The point to note here is that food prices especially maize has increased, but this does not means there is no enough food in the country, there are enough maize and other cereals in all markets in the country,” said Dr Tizeba.

He said an average price for a 100 kilogram bag of maize was 65,000/- by December, 2015 and that the price has increased to an average of 85,000 by December, 2016. He added that in some areas, rice prices have been going down from time to time.

According to Dr Tizeba, an average price for a 100 kilogram bag of rice was sold at an average of 152,000/- by December, 2016 compared to 176,000/- of December, 2015.

He added that beans price has decreased from 173,000/- of December, 2015 to 171,000 in December, 2016. Moreover, the Minister added that the government survey in various markets shows that the highest price for maize is 150,000/-per bag of 100 kilogram at Lindi Region market.

Moreover, a bag of 100 kilogram of rice was sold at 245,000 while the highest price for a bag of 100 kilogram of beans was sold at an average of 243,333/-.

He added that the lowest price for a bag of 100 kilograms of maize was 62,600 at Mbeya market in Mbeya Region, the lowest price for a bag of 100 kilogram bag was 99,000 at Geita market while the lowest price for a bag of 100 kilogram of beans was 136,400 in Mbeya Region.

The Minister said there have been some changes of prices for food stuff but this does not mean there is serious shortage of food in the country. He said rice price is going down because there is enough stock in almost all producing regions.

“Some farmers do not know where to sell rice, they have enough stock and they need market,” he said.

ATCL launches direct flights to Dodoma

Launching the route yesterday, Prime Minister Mr Kassim Majaliwa said the development is part of the government decision to enable Dodoma become a fulladministrative capital for the country.

“Negotiations are progressing well to build an international airport in Msalato. All the process are indeed going on well,” he announced at a gathering shortly after ATCL plane made its first landing on Dodoma soil from Dar es Salaam.

ATCL will operate twice a week scheduled flights using its Bombardier Dash 8 Q400, stretched to 78 passengers. The fleet is scheduled to be connecting to Kigoma every Monday and Friday.

The premier explained that the government will continue expanding and renovating Dodoma Airport and the airstrip after all the legible residents are fully compensated as per the law. "We're opening up new opportunities for Dodoma residents, this will give Dodoma a deserving status as the country's capital.

" Mr Majaliwa reaffirmed the government commitment to the national flag carrier but challenged ATCL management to maintain an opposedcustomer service which fit to international standards.

The new flights schedules which was announced to be cheap at a price of 180,000/- is set to raise a serious challenge to other route operators whose fare are as high as 400,000/-.

“It's high time that business people, government officials and ordinary people start flying with Air Tanzania,” The occasion was also attended by the former prime minister Mr John Malecela, the National Assembly Speaker Mr Job Ndugai, Minister in the Office of the Prime Minister (Policy, Parliament, Youth, Employments and the Disabled) Ms Jenista Mhagama and the Dodoma Regional Commissioner (RC) Mr Jordan Rugimbana.

ATCL Board Chairman Engineer Emmanuel Korosso said ATCL delayed launching flights to Dodoma and other parts of the country as pilots were pursuing training course. “We're expecting to launch flights to Mtwara, Tanga, Tabora, Mafia and Iringa.

We are determined to offer best customer services in all our routes,” he said. Minister Mhagama told the gathering that the fifth government is committed to meet all its promises including the revival of ATCL.

“All the flights which have been promised will come to service different parts of the country," she noted. On his part, Mr John Malecela, former cabinet minister said the government move to launch Dodoma route will spur economic development in the region.

The Ministry for Works, Transport and Communication embarked on an expansion plan of Dodoma Airport following the decision by the government to officially migrate to Dodoma from Dar es Salaam to allow the newly purchased flights land and take off at the airport.

U.S. and EU Reach Agreement on Insurance Regulation

United States and European Union negotiators say they have reached an agreement on reinsurance and insurance regulation. The agreement covers three areas of insurance oversight: reinsurance, group supervision and the exchange of insurance information between regulators.

According to the negotiators, U.S. and EU insurers operating in the other market will only be subject to oversight by the regulators in their home jurisdiction.  For the United States, the agreement preserves the primacy of state regulation the U.S. of U.S. insurance groups while for the EU, it preserves the primacy of EU oversight of EU insurance groups.

The agreement calls for an end to collateral and local presence requirements for EU and U.S. reinsurers.

The negotiators say that the agreement is “balanced, in the mutual interest of both the U.S. and the EU, and provides meaningful benefits for U.S. and EU insurance consumers and for U.S. and EU insurers and reinsurers that operate in both markets.”

In November 2015, the U.S. Department of the Treasury and the Office of the U.S. Trade Representative (USTR) announced their intention to begin negotiating a covered agreement with the EU.  The talks began in February. U.S. and EU representatives also met in July, May and September, 2016.

The agreement is known as a covered agreement, which is an agreement between the United States and one or more foreign governments, authorities or regulatory entities, regarding prudential measures with respect to insurance or reinsurance.

European reinsurers and regulators have wanted the U.S. to lift reinsurance collateral requirements on foreign reinsurers and treat them like U.S. reinsurers. European reinsurers and Lloyd’s of London syndicates complain they are disadvantaged compared to American competitors by the additional capital and collateral requirements of some states. They note that they must also now comply with new EU solvency [Solvency II) rules.

The agreement calls for the elimination of collateral and local presence requirements for EU and U.S. reinsurers.

U.S. and EU insurers operating in the other market will only be subject to worldwide prudential insurance group oversight by the supervisors in their home jurisdiction, the announcement said.

The limitations on worldwide group oversight outside of the home jurisdiction include limits on matters involving solvency and capital, reporting and governance.  Supervisors however preserve the ability to request and obtain information about worldwide activities “which could harm policyholders’ interests or financial stability in their territory.”

The agreement encourages insurance supervisory authorities in the United States and the EU to continue to exchange supervisory information on insurers and reinsurers that operate in the U.S. and EU markets.

Treasury Department released a fact sheet on the agreement and said the final legal text of the agreement has been given to Congress as required by the the Dodd-Frank Act. The European Union approval process involves the Council and the European Parliament.

Michael McRaith, director of the Federal Insurance Office (FIO) within Treasury who is leaving his post next week, has called negotiating a covered agreement with the European Union “a critical step toward leveling the playing field for American insurers and reinsurers.”

AIA, ACLI and RAA Comment

The American Insurance Association (AIA), the American Council of Life Insurers (ACLI) and the Reinsurance Association of America (RAA) welcomed the agreement in a joint statement:

“This agreement, which was reached on January 13, seeks to resolve significant insurance and reinsurance regulatory issues for companies doing business in both jurisdictions. We have long supported the covered agreement process and look forward to reviewing the details.

“We thank the U.S. and European Union parties who were involved in the negotiations for advancing this important initiative. We also applaud state regulators for their invaluable contributions and their continuing commitment to U.S. policyholders.”

IUA Comments

The International Underwriting Association, which represents wholesale re/insurance companies in the London market, also welcomed the announcement. This bilateral trade deal between Europe and the U.S. will greatly enhance international reinsurance regulation, make cross-border trading more efficient and promote more open global access to reinsurance services, said the IUA in a statement.

“A more level playing field can now be established between EU and U.S. reinsurers, both in terms of collateral treatment and mutual recognition of two powerful and respected trading blocs,” said Chris Jones, director of Legal and Market Services at the IUA.

“Furthermore, it sends a powerful message to other jurisdictions that protectionist regulation is not in the long term interests of clients,” he added.

“The London Market is a major reinsurer of U.S. risks and the IUA is pleased to see such effective cooperation between regulators and federal negotiators in the U.S. and Europe. ” Jones affirmed.

Before 2012, non-U.S. reinsurance companies had to post collateral equal to 100 percent of the gross reported loss when writing U.S. risks, the IUA explained. It noted, however, that the Dodd-Frank Act eventually allowed states to enact changes to this rule, reducing the collateral requirement to 10-20 percent.

State insurance regulators and some insurers are concerned that a covered agreement could potentially undermine the U.S. system of state regulation of insurance. The National Association of Insurance Commissioners (NAIC) believes states should continue to handle the situation through its model law process. The NAIC has a model law that eases the collateral requirements for foreign reinsurers that has been adopted by 32 states (about 66 percent of the market).

NAMIC Comments

The National Association of Mutual Insurance Companies (NAMIC) has been among the U.S. insurer groups questioning the need for a covered agreement and it expressed concerns again following the news about this final pact, calling it “a proposed solution to an invented problem – the question of European regulators deeming our regulatory system equivalent.”

According to Charles M. Chamness, NAMIC’s president and CEO, “Because the agreement has the authority to pre-empt U.S. insurance law and regulation, this agreement must meet a very high standard. Setting aside the specific elements of this agreement, which we’ll comment on once our analysis is complete, we note that some provisions appear to be temporary and several areas are ambiguous. This will result in confusion and potentially endless negotiations with Europe on insurance regulation.”

NAMIC said it will work with Congress and the new Trump administration to “determine if this agreement is good for American consumers and the industry.”

Comments from the NAIC

State insurance regulators and attorneys from the National Association of Insurance Commissioners (NAIC) said they are reviewing the agreement. But the group remains skeptical.

“After more than a year of secret meetings it’s disappointing that in the waning days of the administration we are finally seeing the details of what purports to be a covered agreement between the U.S. and EU,” said Ted Nickel, NAIC president and Wisconsin insurance commissioner. “As most state regulators were not allowed to participate in the process, the NAIC is coordinating a thorough review of the agreement to ensure consumer protections are not compromised through the preemption of state law, and we encourage Congress to do the same. Of great concern is the potential to use this agreement as a backdoor to force foreign regulations on U.S. companies.”

The IUA acknowledged that important efforts to reduce collateral have been made at the state level, “but this process has been time consuming and is incomplete. A covered agreement, therefore, will be an effective resolution that also offers multiple other benefits.”