Insurance Times Magazine Issue No 1

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From the MD’s Desk Dear Readers, ON BEHALF OF the Board of Directors of Zurich Group, I’m privileged and honoured to introduce to you our first edition of Insurance Times, the only analytical news magazine that will broaden the understanding of all stakeholders on the scope of insurance business, environmental issues, political and economic factors, security, and other critical issues concerning the insurance industry in the region.

Zurich Group, as the sole owner of the magazine, believes that its introduction is central to its strategy of investing in a diverse mix of businesses and extending our reach to potential clients in the Great Lakes Region and Sub-Saharan countries.The Board is positive that given the ongoing strong marketing initiatives and better services to its esteemed clients, the magazine has begun on a strong footing and will continue to offer an impressive array of quality articles on the insurance industry to our esteemed policyholders, advertisers, readers, partners and subscribers across the continent of Africa.

With the company’s clear strategy for growth, focus on exceptional performance, and a committed management team and editorial staff, the Insurance Times Magazine’s growth story is set to become a compelling one, especially considering its relatively young and aggressive employees from across the East African region.

As an insurance company, we understand the fact that future

Insurance Times | April 2015

economic fortunes are increasingly becoming unpredictable, and that the market environment and economic conditions are even more difficult to determine.

However, we at Zurich Group believe that the magazine’s future is promising; we will be focusing on consolidating the firm’s international market penetration, with particular focus on growing the company’s voluntary business portfolio.

The Group will consider new opportunities as a result of the recent discoveries of oil and gas in East Africa, and also the opening of a window for Takaful (Islamic insurance) operations. In order to take advantage of these opportunities, it is necessary for the company to substantially increase its penetration to other markets outside East Africa.

I am confident that the company can count on the support of its aggressive staff to achieve the new growth needs. We will continue to grow from strength to strength and I am confident that the best is yet to come.

Apart from Tanzania, the Group is active in other countries around the region such as Burundi, Rwanda, Uganda, Kenya and the Democratic Republic of Congo. In addition, the Group believes that partnering and trading with the Southern African countries of Botswana, Malawi, Mozambique, Namibia, South Africa, Zambia and Zimbabwe will make it possible for the magazine to grow beyond the region’s borders.

On behalf of the Board, I once again take the opportunity to thank our clients and business partners

for their continued support. I also want to thank our shareholders for their commitment and inspiration.

Without their commitment, most of the achievements that we are starting to record would not have been possible.

As a Group, we reaffirm our commitment to the continued fulfillment of our corporate mandate to promote the national and regional interest, generate profit and create and add value for our shareholders. The latter have extended tremendous support toward the Group’s success and the initiation of this magazine, for which we are extremely grateful.

On behalf of the Zurich Group team of management and staff, I wish to take this opportunity to extend our sincere appreciation to the government of Tanzania, through the Ministry of Information, Youth and Culture as well as other local and international stakeholders, for making it possible to publish this magazine in due time.

I would like to thank everyone at Zurich Group whose creativity and hard work have played an instrumental role in the establishment of this Insurance Times Magazine.

The management and staff have shown tremendous dedication, professionalism and hard work in attaining our objectives.

It is a great honour to work with such a committed and efficient team of staff.

Thank you and best wishes in 2015.

Fatma Abdulrazaq (Mrs) MANAGING DIRECTOR

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LETTER FROM THE EDITORS

PUBLISHER ZURICH GROUP LTD 5th Floor Green Leaf Tower Lumumba/Mkunguni Street P o Box 14310 Dar es Salaam, Tanzania Tel: +255 22 2184624 Fax: +255 22 2184623 www.zurichgroup.co.tz

The Editor’s Note

MANAGING DIRECTOR Fatma Abdulrazaq PROJECT MANAGER Gerva Lyenda MANAGING EDITOR Mwirabi Sise CHIEF SUB-EDITOR Isaac Mwangi CONTRIBUTORS Mathew Madden, Jamila Abdalla, Victor Babatunde, Maksudi Zamy Graphic Designer Joe Ngari

SUBSCRIPTION RATES Annual rate: Tanzania Tsh77,000 Kenya Ksh3,850 Uganda Ush121,000 Burundi BIF66,000 Rwanda RWF29,700 Zambia ZMK297,000 6-month rate: Tanzania Tsh40,000 Kenya Ksh2,000 Uganda Ush63,000 Burundi BIF34,500 Rwanda RWF15,500 Zambia ZMK155,000

Insurance Times | April 2015

IT GIVES ME great pleasure to present to you the first issue of Insurance Times Magazine. This will be a monthly magazine specifically aimed at helping to develop, promote and maintain an inclusive, efficient, fair, safe and stable insurance market for the benefit and protection of policy holders across East, Central and Southern Africa.

The magazine aims at promoting the role of the insurance sector as an effective catalyst for enhanced economic growth, as well as strengthening and promoting the industry’s healthy and orderly growth across the region. It will do this by providing news, analysis, features and information about opportunities for insurance firms seeking to expand to various markets across the Great Lakes countries and the African continent as a whole.

The establishment of this magazine was no accident; it is deliberately positioned to foster discipline in the insurance industry – allowing policyholders, clients and readers to air their views and opinions about the development of the industry in these challenging times.

Insurance Times, which is the sole insurance magazine domiciled in the Tanzanian market, aims at carrying Africa’s interest forward, believing that having a policyholder and readership platform is critical to its strategy.

Starting with this first edition, we seek to establish a reputation for analytical and insightful analysis that will make Insurance Times the magazine of choice for insurance businesses and clients across the region’s economies. We aim to reach everyone with a stake in the insurance industry – the academia, politicians, decision makers, and common citizens.

Due to the fact that prospects for Africa’s insurance market are extremely good, our readership is vital to our strat-

egy of not only encouraging the growth of the insurance sector, but also ensuring the sustainability of this magazine. We are therefore more than willing to satisfy your subscription and advertising needs at very competitive rates. Beginning with its base in Tanzania, the magazine remains committed to providing incisive coverage of the insurance markets in Uganda, Kenya, Rwanda, Burundi, the Democratic Republic of Congo (DRC), South Sudan, Sudan, Malawi, Zambia, Mozambique, Zimbabwe and beyond.

Everyone in these countries needs to experience the safety of insurance; it is our business to make sure that this happens.

As a member of the Zurich Group brand, Insurance Times will be poised to encourage new heights in industry standards by going the extra mile to keep our clients across the Group satisfied, and as a mark of appreciation for their continued support.

That support and patronage is the reason the Group found it necessary to introduce this magazine and to have so much confidence in its growth and success. We refuse to take such immense support for granted.

Finally, I would like to thank my colleagues on the Zurich Group Board, the management and editorial staff, for their unwavering support in overcoming numerous challenges to ensure that this magazine becomes a reality.

I look forward to your continued support, dedication and commitment in the remaining months of 2015 and beyond.

Together, we can bring about a positive transformation of the insurance industry in the region. Please contact us on editorial@insursancetimesmagazine.com for your comments and support.

Thank you, Mwirabi Sise MANAGING EDITOR

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Contents MAGAZINE 8

Opinion

The insurance sector ought to be more involved in the regional integration process, with the changing environment demanding quick harmonization of policies

11 Q&A with William Erio Zep-Re chairman explains the critical role of insurance in the region: If there’s no insurance, no investor will risk his money

16 Health for All…

» p.42

Kenya inches closer to achieving Universal Health Coverage, having already abolished fees for birth deliveries in public health facilities

18 Financing infrastructure Dar gets $300 million to improve key services for its fast growing population, as the city retains brilliant insurance prospects

22 Gold belongs to Caesar Mining companies begin paying service levies at the rate of 0.3 per cent of their annual turnover, which now replaces the previous cap limit » p.20

» p.14

24 Museveni wants money Ugandan president urges his countrymen working abroad to invest back home, saying his government has addressed the key bottlenecks

30 Takaful makes a grand entry The introduction of Islamic insurance in Tanzania is set to cause major ripples, with industry players expecting a warm reception from consumers

» p.54 Insurance Times | April 2015

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To reap the most from insurance, just come together as a region OPINION

By Isaac Mwangi

The proliferation of different products and introduction of new ones, such as Takaful (Islamic) insurance is bound to affect the regional market.

WE CANNOT RUN away from this simple fact: Harmonization is the next big thing happening around East Africa.

Lawyers, engineers, businessmen, farmers, and just about every other occupation in East Africa are in a rush not to be left behind.

In all these efforts, the insurance sector is often relegated to the backburner. Perhaps largely by default rather than by design, insurance has been lumped together with other financial services and has not stood out prominently despite its critical role in underwriting many of the infrastructure and other projects that regional integration entails.

Businesspeople, of course, have always been way ahead of everyone else. Intra-regional trade has grown in leaps and bounds; non-tariff barriers have come tumbling down; new homegrown transnational companies are coming up right here in East Africa; and petty traders can move across borders more easily.

But these gains didn’t just happen by chance. Businesspeople across the region organized themselves and lobbied hard. The East African Business Council, the apex organization of the private sector in East Africa, has been instrumental in these efforts.

Professionals soon followed suit, borrowing a leaf from the private sector and organizing themselves around various interests. As a result, a number of regional organizations have been formed – all with varying degrees of suc-

Insurance Times | April 2015

cess in championing their respective interests and obtaining recognition from the East African Community Organs, Institutions and partner states.

Indeed, these professional organizations are responsible for much of the activity being witnessed to try and harmonize the standards and operations of various sectors. Only recently, for instance, regional MPs debated the East African Cross-Border Legal Practice Bill that will govern the operations of lawyers opening offices in other sister states.

But the fact remains that the regional integration process is lagging far behind schedule. This year, the Common Market is supposed to come into full operation – a precondition for beginning the implementation of the East African Monetary Union. This will see the harmonization of fiscal policies and the macroeconomic environment across the Community, culminating in the introduction of a single currency regime in 2024.

Naturally, the insurance sector must anticipate and be prepared for these changing circumstances, which are bound to have a profound impact on its operations. One way of doing so is by examining the regulatory frameworks, policies and practices that affect the sector in East Africa with a view to harmonization.

That, in turn, calls for proactive action from key stakeholders – ranging from regulatory authorities to insurance brokerages and from govern-

ment officials to private sector executives. And because of the nature of insurance business, it will often be found necessary to consult other related stakeholders – tax authorities, for instance.

Within the partner states themselves, it is an open secret that regulation hasn’t worked as effectively as would be expected. The regulation of professional charges by various authorities, to start with, is rarely adhered to. This is due to intense competition, made worse in the insurance sector by the entry of non-insurance entities to offer insurance products, such as banks.

Again, the proliferation of different products and introduction of new ones, such as Takaful (Islamic) insurance is bound to affect the regional market. A regional approach is best when tackling such issues, since the option is obviously to have every country make its own policies and decisions – which will likely be at variance with those of other partner states.

All these are weighty matters that will determine the direction and fortunes of the insurance industy in East Africa. That is why harmonization of the sector is now not just something for stakeholders to ponder about, but to actually get down to business.

Isaac Mwangi is a communications lecturer and consultant based in Nairobi, and is chief sub-editor of Insurance Times. E-mail: isaacmwangi@minachariots.com

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CARTOON Dear Readers, We value your ideas and welcome any contributions that can enrich public debate on the many issues of interest to our readers. We invite you to send your views, letters, and other contributions for possible publication. The Editor reserves the right to publish or not to do so.

Articles may also be edited for clarity and brevity.

Please send your contributions to: The Editor Insurance Times Magazine P.O. Box 14310 Dar es Salaam, Tanzania E-mail: editorial@insurancetimesmagazine.com

Why social security is being counted as a human right

By Matthew Madden ON 20 FEBRUARY, the United Nations observed the World Day of Social Justice, which is itself an acknowledgement that human rights to social security remain at best piecemeal for a significant part of the world’s population.

Social justice is inseparable from full respect for fundamental freedoms and human rights – including access to social security.

This has made the International Social Security Association (ISSA) to call upon its member organizations to strive to work together towards social justice, in the realization that there can be no social justice without social security.

These principles are clearly set out in the Universal Declaration of Human Rights (1948), the International Covenant on Economic, Social and Cultural Rights (1966), and other human rights instruments adopted under the auspices of the United Nations.

In practical terms, social security administrations, as well as the conventions and recommendations of the International Labour Organization, define the normative basis for the realization of this right.

In this regard, the Social Security (Minimum Standards) Conven-

tion, 1952 (No. 102) and the Recommendation concerning National Floors of Social Protection, 2012 (No. 202), are highly relevant.

These are commonly cited as core references for the elaboration of national social protection strategies and legislation and regional-level social security agreements.

ISSA says that for an important majority of the world’s population, these legal and normative bases have yet to guarantee universal, effective access to an essential basket of cash benefits or universal, effective access to adequate healthcare.

It said that globalization – leading to growing interconnectivity and wider access to information – is contributing to the heightened expectation of improved livelihoods and wellbeing among the common people everywhere.

Hans-Horst Konkolewsky, the Secretary General of ISSA, says that access to comprehensive systems of social security coverage for all across the life course is an important aspect of this. He says grassroots demand for such access is growing.

“This is influencing political will, facilitating social security administrations to more effectively

meet their mandates,” he said.

National social security systems can contribute to achieving global social justice. Realizing social justice in the 21st century implies, first, the continuing adaptation of the institutional design, objectives and financing of social policy, including social security systems.

Second, the professional tools and services provided through the ISSA’s Centre for Excellence have a guiding role to play in helping drive administrative improvements in existing arrangements.

The original role of many social security systems was predominantly to replace the lost income of essential, insured workers and their families in response to the commencement of determined risks.

However, the role of social insurance remains central, increasing a broader expectation for social security systems to contribute to proactive and foresighted social investment, which ISSA calls “Dynamic Social Security.”

Social security benefits should be more strategically combined with sufficient support and promotion of socially and culturally compliant norms, as well as access to adequate healthcare and education.

Insurance Times | April 2015

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‘Shock’ performance as regional firm exceeds expectations Pan African regional reinsurer in record 25pc growth in premiums

By Mathew Madden

P

an-African reinsurance company (also known as PTA Reinsurance Company), has said that its premiums for last year rose by 25 per cent, beating analysts’ estimates.

William Erio, Chairman of Ze-Re, told Insurance Times that investment income for 2014 was $10 million, producing an average dollar return on investments of 9.7 per cent and beating the investment income of $9.1 million for the previous year, a growth of 8 per cent.

In an exclusive interview, Erio said that the firm’s total assets as at 31 December 2013 and 2014 were $201.8 million and $255.7 million, respectively.

According to Erio, the total comprehensive income for 2013 and 2014 were $18 million and $20.7 million, respectively, producing an average dollar return on assets of 10.1 per cent and 9 per cent in 2013 and 2014, respectively.

“The shareholders’ funds as at 31 December 2013 and 2014 were $105.7 million and $143.6 million, respectively,” he said.

The profits for 2013 and 2014 were $15.4 million and $18.7 million, respectively, a growth of 21.4 per cent. The average return on equity was 14.5 per cent and 13 per cent in 2013 and 2014, respectively.

Ze-Re believes that what continues to attract investors to the firm is its continuing strong operating performance, steady growth in brand value, financial strength and capacity and the African growth opportunity.

The regional insurance firm operational activities are driven by the desire to provide excellent technical services to all its clients and to actively participate in and support the development of the region’s insurance and reinsurance industry.

Rajni Varia, Managing Director of ZEPRe, said that the Common Market for Eastern and Southern Africa (Comesa) trade bloc re-

Insurance Times | April 2015

GROSS PREMIUMS 2013 $100.2 m mains Ze-Re’s key market, with over 68.1 per cent of business underwritten by the company originating from this region.

Varia said that the rest of Africa contributed 14.9 per cent of the business, while 17 per cent came from regions outside Africa – in particular the Indian sub-continent.

The managing director added that the company was able to achieve these milestones as a result of the support that it has continued to receive from its customers across the

2014 $125.4 m

continent and beyond.

“In response to this overwhelming confidence from its customers, the company has taken deliberate steps to entrench its brand across the African continent by taking reinsurance solutions close to its customers, through the creation of regional hubs that are located in strategic regional economic blocs across Africa,” he said.

The increase in profitability is attributable to improved underwriting results and lower operating and other expenses.

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If there’s no insurance, no prudent investor will risk his money

Zep-Re is among the top rated reinsurers in Africa, whose main goal is to offer reliable security to insurance companies, enabling them to promptly pay their claims. Mathew Madden spoke to William Erio, chairman of the pan-African reinsurance company, about the opportunities for the firm all over Africa, ranging from infrastructure, energy, oil, gas, and engineering to life cover.

Insurance Times: What has been the performance of PTA Reinsurance Company in terms of volume of business handled in the region in the 2014 financial year?

Erio: Zep-Re achieved a gross premium written of $100.2 million in 2013 and $125.4 million in 2014, posting a 25 per cent growth in 2014.

Insurance Times: How does the 12-month outlook for Zep-Re returns compare to asset classes?

Erio: At the close of 2013, Zep-Re investment portfolio was $147.1 million, which increased to $194.2 million by close of 2014, a growth of 32 per cent. The investment income for 2013 and 2014 was $9.1 million and $10.9 million, respectively, producing an average dollar return on investments of 9.7 per cent and 8 per cent in 2013 and 2014, respectively.

The company’s total assets as at 31 December 2013 and 2014 were $201.8 million and $255.7 million, respectively.

The total comprehensive income for 2013 and 2014 were $18 million and $20.7 million, respectively, pro-

ducing an average dollar return on assets of 10.1 per cent and 9 per cent in 2013 and 2014, respectively.

Insurance Times: How does the 12-month outlook for fund ROE returns compare with reinsurance equity?

Erio: The shareholders’ funds as at 31 December 2013 and 2014 were $105.7 million and $143.6 million, respectively.

The profits for 2013 and 2014 were $15.4 million and $18.7 million, respectively producing an average return on equity of 14.5 per cent and 13.0 per cent in 2013 and 2014, respectively.

Insurance Times: Apart from improved reinsurance pricing, what could draw more capital into insurance-linked funds?

Erio: We believe that what continues to attract investors to Zep-Re is the company’s continuing strong operating performance, steady growth in brand value, financial strength and capacity, and the African growth opportunity.

Insurance Times: How does the Zep-Re Centre of Excellence in Engi-

neering help to broaden skills among member states and professionals?

Erio: The Zep-Re Centre of Excellence in Engineering is in the forefront to develop and broaden skills in sub-Saharan Africa. Engineering is a key driver of human development.

This means that regions with low engineering capabilities and knowledge are poorly developed and vice versa. The attainment of many of the [Millennium] Development Goals requires the achievement of sufficient engineering capacity to develop infrastructure and sustainable technological development.

The discipline of engineering is extremely broad, and by its nature it is intertwined with society and human behaviour. Every product or construction used by modern society will have been influenced by an engineering design. This has made engineering a very powerful tool in making changes to the environment, societies and economies.

Sub-Saharan Africa, in particular, has a very small engineering capacity.

This has resulted in many African nations being unable to develop crucial

Insurance Times | April 2015

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Losses usually affect a number of parties, namely the owner, the financial institutions, contractors, and sometimes the public. When these losses occur, there needs to be in place a structured way of recovering financially, to enable continuity.

infrastructure necessary for development.

There is, however, an ongoing process to build the necessary infrastructure for speedy socio-economic development. The infrastructure comprises projects ranging from airports and roads to bridges, dams, tunnels, power stations, ports and harbours, refineries, pipelines, factories, hospitals, etc. These require the involvement of enormous inputs in the form of capital, human resources and technical expertise.

Increasing developments in emerging African economies have also led to increased use of machines in industries. These machines are exposed to accidental breakdown or unforeseen damages involving not only heavy costs of repairs or replacement but also loss of production, and third party liability.

The projects and assets involved are vulnerable to physical loss or damage by a variety of perils. When the perils occur, in addition to the loss of the assets, there would be additional financial losses in terms of loss of anticipated income, third party liability, etc. These losses will usually affect a number of parties, namely the owner, the financial institutions, contractors, and sometimes the public. When these losses occur, there needs to be in place a structured way of recovering financially, to enable continuity.

This has led to the need for protection in the form of project insurances at the construction/ erection phase. They include contractors all risks policies, erection all risks, and machinery breakdown covers.

In view of the above, the Center of Excellence continues to broaden knowledge that will

Insurance Times | April 2015

among other things tackle engineering insurance related matters, since engineering is key to growth and development. This is done through conducting of external training through seminars and workshops, offering internship to various insurance companies to develop technical capacities in engineering, in-house training to enhance technical expertise, quotation of engineering large risks within the region to conform to regulator requirements, market sharing experience in the region, and providing engineering manuals to underwrite the large risks.

Insurance Times: Looking ahead, how do you see Zep-Re and the insurance sector evolving?

Erio: In the past, the insurance sector has been involved mainly in offering traditional products such as the life, fire, engineering and accident classes.

There has been and will continue to be technological advancements, and with it new challenges that will require new insurance solutions.

These developments will be expected to drive new products and new ways of doing business.

Zep-Re, as an institution, is heavily involved in these developments through the provision of reinsurance capacity as well as human resource development.

We appreciate that African countries are in their respective take-off stages in their economic development agendas. Kenya, for example, was recently declared a middle income state.

This effectively means that the industry has got to cope with the new demands of this emerging state of the economies. We have to revolutionize our products to meet emerging needs.

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dynamic world we are operating in today.

Risks will always broaden depending on the ability and capacities of the investors and the consumer demand for the products and/ or services. New risks and methods of production cannot stop, given that the world has become a global village. Insurance, as you are aware, is key to any development activities. No prudent investor will risk his money if there is no relevant insurance protection in place.

The current limitations to insurance and reinsurance, particularly in Sub-Saharan Africa, are low capitalization and expertise.

These challenges are being dealt with at different levels. Companies are doing all they can to increase their investments in the sector, and we can already see the re-entrance of foreign firms into the African continent resulting in injections of foreign direct investment into the regional economies.

Investing in people and training them is going on, albeit slowly.

Insurance Times: Are investors wary of multi-year (long tail) risks?

Erio: No. The investors and insurers have developed enough capacities in these areas and are able to cope for now. However, going into the future, there could be situations of increase in liabilities due to the changing attitudes and ways of doing business. The increasing technical and actuarial expertise in the region will continue to consistently assist in prudent pricing and reserving of such long tail risks.

Most infrastructural developments that are taking place in Africa are being locally insured, and ZEP-Re is set to benefit a lot from these developments.

Illustration | Joseph Ngari

Property (fire & engineering classes) will remain the focus of business growth in the Comesa region. The African economy has undergone fundamental changes over the past decade. Growth in investor interest is driven by strong economic growth, rising foreign exchange reserves, quality and cost competitiveness and encouraging government policy-making. The strong level of economic growth achieved in Africa in recent years has led to an expansion of industry, commerce and per capita income. This, in turn, has fuelled demand for infrastructure developments including energy, transportation, ICT, water supply, growing agriculture and urban infrastructure. Most infrastructural developments that are taking place in Africa are being locally insured, and ZEP-Re is set to benefit a lot from these developments.

Activities related to mining of minerals, and exploration and exploitation of oil, gas & energy projects, are on the rise in the Comesa region. These capital-intensive projects require first-class insurance protection. To reduce the outflow of premiums abroad, ZEP-Re is set to provide capacity to assist in the development of the local oil & gas and mining markets.

To this end, the company has the requisite technical capacity that will help with the underwriting process of these specialized classes of business. Pools to manage oil and gas are being set up in Ghana and Uganda. This will enhance our growth as participants of the pools As African economies grow, the wellbeing of its citizenry is enhanced. ZEP-Re will continue to provide life reassurance cover to the increasing populace in Africa which is witnessing renewed growth due to improved economic growth, as well as a growing entrepreneurial class in the continent.

In order to bridge the gap between the rich and the poor, Zep-Re supports micro-insurance geared towards increasing access to insurance services on the low income end. Toward this end, we give support to agriculture insurance (crop and livestock insurance), life, health, property and credit insurance. This has boosted the financial inclusion in the emerging African economy, and an increase in insurance penetration which will continue contributing significantly to GDP. This is the new emerging insurance frontier for Africa.

Insurance Times: What are some of the limiting factors to the broadening of risks?

Erio: There are no limiting factors to the growth and broadening of risks in the

Insurance Times | April 2015

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Renewable energy can transform Tanzania’s economy, Dar told

By Victor Babatunde

D

ar has been told to invest in research and development (R&D) in renewable sources of energy if it hopes to transform the country into middle income status by 2025.

Even though the basis of the development blueprint Vision 2025 is science, technology and innovation, the country is lagging behind in technological development and applied research.

Ashok Chaudhuri, General Manager of Ankur Scientific Energy Technologies Ltd from India, told Insurance Times that the government should open a door for engaging private companies willing to invest in R&D. Chaudhuri said that to boost the renewable energy sector, the government should come up with proactive policies that encourage banks and other financial institutions to get involved – and even overseas investors.

“The future of the economy depends on the development of new products as these enhance a country’s competitiveness in the export markets,” said Chaudhuri.

This means the government must increase research spending, place greater importance on research and innovation in its economic plan, encourage the development of a skilled workforce, and make sure expert scientific advice is available to policy makers.

According to Chaudhuri, the renewable energy sector has a huge market in Tanzania and if foreign investors can be found, the country can develop renewable energy technologies and use them on a large scale. The operation can be also expanded to other East African countries.

The energy firm boss also challenged the government to improve the efficiency of energy use, saying there was enormous potential for improved efficiency improvement in the transport, building and industrial sectors.

Innovation drives critical recovery and is the foundation of a knowledge economy, he said, adding that Tanzanians have to move towards greater use of renewable sources of energy.

The major challenges holding back the implementation of renewable projects include unfavourable policies, lack of public awareness, lack of a fast single window clearance system, and an unfriendly financial system.

If the government can collaborate with international funding agencies, then the financial system can help entre-

Insurance Times | April 2015

preneurs, said Chaudhuri.

In order to end bureaucratic roadblocks for investors and improve the investment climate, the government has to develop a “one-single window system” where investors can log on to seek all required clearances, he said.

Amit Patel, President of the Federation of Gujarat Industries (FGI) said the initiative will ensure that investment proposals do not get entangled in red tape during the approval and permission process.

Patel said that the move will bring transparency and get rid of all middlemen and opportunities for corruption, adding that it will also solve the fundamental problem of projects being held up and address the causes of delays.

“Everything will have a timeline. Whenever there will be a delay, it will be known where it is happening and who is responsible for it. So there would be no more blame games,” he said.

According to Patel, the one-stop single window system will revolutionise the clearance seeking procedures for industry. Rather than going to every ministry and pleading in or in some cases even extending favours, companies will have to simply submit everything online, from where every file would go to the concerned department.

Interested investors will be required to log into this platform, specify the sector and the system will automatically direct them to a page detailing all clearances required from the central and government departments.

The system will facilitate faster and efficient trade, improve the business environment and open a new chapter for entrepreneurs to track their applications through the portal being developed.

Dr. Mario Ragwitz from the Fraunhofer Institute for Systems and Innovation Research said that to keep electricity, heat and transportation prices affordable in the future, people should use energy efficiently and devote more research to the development of renewable sources.

Ragwitz said there was urgent need to sustain investment in renewable energy.

He said it was worth the effort, not only to secure the supply of raw materials and to protect the environment, but also economically when changing from a mid to long-term perspective.

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Insurance Times | April 2015

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COVER STORY

Kenya paces ahead on health coverage Picture | Isaac Mwangi

For Kenyans, health for all isn’t just a dream…

By Mwirabi Sise

T

he past two years have witnessed an escalating focus on Universal Health Coverage, defined as the prerequisite of quality, inexpensive healthcare across the population, in Sub-Saharan Africa. Formerly, seen as the purview of strong welfare states such as Denmark and Sweden or socialist countries such as Cuba, this situation is now changing.

Countries like Thailand with 70 million inhabitants, and closer home Rwanda with a health service exposure rate of over 90 per cent, have shown that Universal Health Coverage is a goal that can be embraced and indeed achieved by Southern nations – as long as an uttered apparent preparation, and strong leadership, is in place to drive it.

“This could have a significant effect on lowering maternal and neonatal mortality rates across the country,” said a health expert in Nairobi.

When the manifesto of the governing Jubilee coalition was endorsed in 2012, it highlighted both social protection and health goals that openly speak to the idea of Universal Health Coverage. A few hurdles notwithstanding, the Jubilee government recently made good its political pledge of eradicating fees for birth deliveries in public health facilities.

Already, Kenya has witnessed an increase of patients seeking deliveries in health facilities across the country.

With continued effort, this could have a slight effect on lowering maternal and neonatal mortality rates in the country. This increase in service deployment is an important factor of Universal Health Coverage, which eventu-

Insurance Times | April 2015

ally seeks to remove the financial differences that stop people from acquiring healthcare when they need it.

In July, 2012, the National Hospital Insurance Fund (NHIF) released the results of a study funded by the Rockefeller Foundation on the establishment of a Household Insurance Subsidy Programme (HISP). As a prerequisite, the HISP will require a full inand out-patient healthcare service for the deprived. The implementation plan for putting it into place is now under progress between Kenya’s Ministry of Health and a number of stakeholders.

This subsidy programme will enable several thousand households across the country to access “free-to-patient” health care services, which should lead people to seeking health services earlier at the onset of illness.

As of now, there is good progress in moving Kenya towards Universal Health Coverage.

The Kenyan Constitution states that, “Every Kenyan has a right to quality and affordable healthcare,” and recognizes the role of the government in removing barriers to access.

This was recently affirmed in Sessional Paper No. 7 of 2012 on Universal Health Care. The Kenya government’s commitment to providing healthcare for all its citizens is clearly moving in the right direction.

The NHIF is actually the primary health insurance provider in Kenya, and it is obligatory for all salaried employees. Contributions are graduated based on the income of employees and are automatically deducted through the payroll. The Fund is using mobile money

Kenya’s Ministry of Health headquarters in

A few hurdles notwithstanding, the Jubilee government recently made good its political pledge of eradicating fees for birth deliveries in public health facilities.

Already, Kenya has witnessed an increase of patients seeking deliveries in health facilities across the country.

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n Nairobi.

to expand access to workers in the informal sector through creating a more expedient way to pay monthly premiums.

It is at this juncture, therefore, that the National Hospital Insurance Fund (NHIF) requires enforced membership for all salaried employees, with contributions automatically deducted through the payroll.

These contributions are calculated on a graduated scale based on income. Starting in April 2015, the Fund has increased contribution rates considerably. Employees earning a maximum of Ksh5,999 ($66.66) will contribute Ksh150 ($1.67) monthly. Those earning Ksh100,000 ($1,111) monthly will pay Ksh1,700 ($18.89). Self-employed persons will pay Ksh500 ($5.56).

Previously, contributions stood at between Ksh30 (33 US cents) and Ksh320 ($3.55) per month. Self-employed members and others in the informal sector paid a fixed premium of Ksh160 ($1.78) per month.

To be affiliated to the Fund, one must simply be a Kenyan resident aged 18 or older.

Services cover certain dependants of the primary policy holder automatically, including spouses, children under the age of 18, students (even if over the age of 18), and dependants of persons with disabilities. Other adult family members require separate premium contributions to be enclosed.

The NHIF is responsible for enrolling and registering all entitled members from the formal and informal sectors. The reimbursement package includes coverage of inpatient expenses, with the share of expenses

covered determined largely by the type of hospital.

The state-owned health insurer has partnered with Safaricom Ltd to provide a flexible and suitable platform for transfer of funds for monthly insurance premium contributions from informal sector members.

The use of the highly successful and innovative M-Pesa money transfer platform has enabled the Fund to widen health services to informal sector workers, who are not included in formal payroll systems and whose incomes are often less regular or predictable.

To use the M-Pesa payment platform, members must already be registered users of M-Pesa and possess a national identification card, a requirement for using the M-Pesa system. This has helped to minimize travel and queues at NHIF offices.

The question now turns to what Universal Health Coverage looks like for Kenya. The focus of the Jubilee government is framed around free primary healthcare for all Kenyans, starting with women, expectant and breastfeeding mothers, and persons with disabilities, by increasing health financing from 6 per cent to 15 per cent.

In order for Kenya to maintain its status as a reputable health service provider to its people, there must be a well dedicated balance of political promises, fiscal austerity and quality service aspirations. However, with Kenya a country that has come of age at 50 years, as evidenced by commitments that have led to a stronger judiciary and constitutional reform, Universal Health Coverage

This [Universal Health Coverage] could have a significant effect on lowering maternal and neonatal mortality rates across the country, Health Expert - Nairobi

is an implementable idea whose time has unreservedly come.

Kenya’s economy is believed to be 25 per cent larger than previously estimated following rebasing based on a change in the way its size is calculated. According to the World Bank, Kenya is the ninth-largest economy in Africa. It is now the fourth biggest economy in sub-Saharan Africa after Nigeria, South Africa and Angola.

According to the Minister for Devolution and Planning, Anne Waiguru, the country’s economic output was calculated to be Ksh4.76 trillion ($53.1bn) in 2013 after rebasing, up from Ksh3.8 trillion ($42.2 billion).

Standard Chartered Bank Africa economist Razia Khan said Kenya’s economy has demonstrated good momentum and has been growing faster than the official data indicated all along. “It fits with much of the anecdotal evidence available to us – still-robust business confidence and healthy private sector credit growth.”

Ms Khan said the rebasing lifted the average per capita income in Kenya to $1,246, “Effectively meaning that the country moves to lower middle income status.”

Insurance Times | April 2015

18

JUBILEE MANIFESTO

Dar gets $300m for infrastructure …but retains top spot in specialty insurance

By Mathew Madden

C

onstraints in infrastructure and lack of planning are costing the city of Dar es Salaam dearly as it struggles to keep pace with the growth of commercial specialty insurance, in the process losing 2 to 3 per cent of market share.

Despite these challenges, Dar es Salaam still remains comfortably ahead of Kenya, Uganda and Rwanda as the largest commercial specialty risk market taker in the region.

This has made the government to seek $300 million to improve the key services in Tanzania’s largest city. This will be achieved through the acquisition of a credit line from the International Development Association (IDA) for the new Dar es Salaam Metropolitan Development Project (DMPD).

The funding will improve services directly for 1.9 million residents and indirectly for the city’s overall population of 4.6 million.

Dar es Salaam, whose population growth rate averaged 5.6 per cent between 2002 and 2012, is among the fastest growing cities in the world.

Services have not kept up with the rapid development, leading to the sprawling growth of informal settlements, congestion, flooding, and other constraints to the business environment.

The IDA credit will improve key services to address flooding, urban mobility, and basic infrastructure in low-income communities, while DMDP shall improve the capacity of local governments to better plan and provide services. It will focus on adoption of a metropolitan approach to addressing the region’s challenges.

World Bank Country Director in Tanzania Philippe Dongier says that in the next 15 years, Dar es Salaam will be a mega city with a population of over 10 million residents, with more than

Insurance Times | April 2015

800,000 new job seekers entering the market every year.

Dongier said many job seekers are looking to Dar es Salaam for opportunities, while investments over the next five years are important in helping establish the foundations to develop and manage a booming metropolitan population.

“The development of the metropolitan area will allow enterprises to thrive and create productive jobs, providing an improved quality of life to residents,” he said.

According to Dongier, the DMDP has three components, including the development of priority infrastructure covering roads, flood control and storm water drainage, and enhancement of disaster preparedness.

The second component will focus on the improvement of basic services for low-income communities as well as enhancing their capacity to undertake important works.

Institutional strengthening, which constitutes the third component and which is partly funded by the Nordic Development Fund, will develop governance arrangements and systems, local government revenue collection systems, integrated transport and land use planning, operations and maintenance systems, and urban planning systems.

“Given the complex challenges that Dar es Salaam faces, this project attempts to respond to both the immediate service provision demands as well as the capacity building requirements for a future megacity,” said Andre Bald, the World Bank Senior Urban Specialist who is also the Task Team Leader for DMDP. Bald said that while the DMDP focuses on Dar es Salaam, it is only the latest of ongoing ur-

Picture | Joseph Ngari

19

The city of Dar es Salaam.

ban interventions in which Tanzania and the World Bank have partnered, covering 29 urban local governments, to improve infrastructure and service delivery so as to deal effectively with the rapid urbanization that the country is experiencing.

“The others are the Tanzania Strategic Cities Project (TSCP), the Urban Local Government Strengthening Program (UGLSP), the Zanzibar Urban Services Project (ZUSP) and the Second Central Transport Corridor Project (CTCP2),” he said.

The World Bank’s recent Country Economic Memorandum with Tanzania underscored the importance of improving the competitiveness and efficiency of cities in order to nurture greater agglomeration benefits and create productive jobs for the 800,000 young people who enter the job market every year.

Most of these youths end up in the informal sector, to which they are almost permanently consigned as there are not enough jobs to absorb them in the formal sector.

Investing in infrastructure and service gaps in the urban areas is one way of addressing this challenge, as it would encourage agglomeration effects while reducing congestion.

Dar es Salaam is expected to continue being the engine of growth for the nation. If the urbanization process is managed well, tremendous economic, environmental and quality of life benefits could be captured from improved efficiencies.

Agglomeration economies also provide support in poverty reduction: While Tanzania has seen an overall decline in poverty, Dar es Salaam has observed the highest poverty decline, from 14.1 per cent in 2007 to 4 per cent in 2012/2013.

Davis Shemangale, a project coordinator for regional administration and local government, said that

the city has fundamental barriers limiting the quality and potential of its future development.

Shemangale says that these barriers include a backlog in infrastructure investments, with growth outpacing infrastructure development, poor connectivity and the mushrooming of un-serviced informal settlements.

Others are sprawling energy-intensive settlement patterns, the absence of effective metropolitan planning and governance arrangements, and capacity constraints for management and service delivery.

“All of these factors impact the business environment, competitiveness, and the enabling environment for job creation,” he said.

Over the years, the City local authorities are under-performing in own source revenue collection and remains dependent on inter-governmental transfers.

The major local revenue sources include property tax, general service and development levies, trade licences, and fees for a variety of facilities. The Dar es Salaam Local Authorities (DLAs) had its own source revenues of around 20-30 per cent of total revenues, while intergovernmental transfers were around 7080 per cent in 2011/2012.

Local revenue has increased recently, with the three DLAs increasing total revenues from roughly $19 million in 2009/2010 to $57 million in 2013/2014 despite the current antiquated systems in place.

There is significant space to improve own-source revenue collection for the DLAs by upgrading the current antiquated systems, improving billing and collection practices, upgrading the valuation rolls, and other measures to improve transparency and customer orientation.

Practices and guidelines are also lacking to capitalize on infrastructure improvements and enable the public to benefit from higher land value.

Insurance Times | April 2015

20

JUBILEE MANIFESTO

Rich countries take up mobile-phone lessons from innovations in East Africa

By Victor Babatunde

R

ich nations are expected to begin adopting mobile financial technologies that have transformed the lives of the poor in East Africa. These technologies include M-Pesa, Airtel Money and Tigo-Pesa.

According to Microsoft founder Bill Gates, two billion unbanked people will by 2030 be storing money and making payments using their phones.

By then, mobile money providers will be offering the full range of financial services, from interest-bearing savings accounts to credit and insurance. But operators should be wary of the remaining challenges, including regulation and market sizes.

This year, mobile insurance, credit and savings services are expected to reach a number of markets, increasing the impact of mobile financial services and financial inclusion of more people in insurance and credit schemes.

The GSMA system will also see an increase in the use of mobile money to serve ancillary industries, including agriculture, health, and education, to improve access to basic utility services such as water and electricity. All this will serve to deepen the social and economic impact of mobile phones.

“One interesting feature of digital financial innovation is that some of it is happening in poor

Insurance Times | April 2015

countries first. If we waited a few decades, banks in developed countries would invent digital banking tools, and they would trickle down eventually to developing countries,” Gates said.

He pointed out that because there is strong demand for banking among the poor, and because the poor can in fact be a profitable customer base, entrepreneurs in developing countries are doing exciting work — some of which will trickle up to developed countries over time.

Some 60 per cent of developing markets now have access to mobile money services, many of which are growing in sophistication.

Last year, mobile phone providers in Tanzania, Pakistan and Sri Lanka interconnected their mobile money services, but there is much more that could be done to improve the reach and range of services available.

Anne Bouverot, Director General at the GSMA, said that to bring the industry to an optimal level, operators need to continue to invest in systems, technology and partnerships that will enable more businesses to use mobile money.

“In 2015, we are focused on working to help the mobile money industry mature and reach the scale of commercial and social impact needed to deepen its contribution to the digital services economy,” she said.

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GSMA predicts that sub-Saharan Africa had a penetration rate of around 15 per cent last year, but that figure is expected to rise dramatically to nearly 60 per cent by 2020.

Other regions are all experiencing a similar increase; for example, Asia Pacific had a smartphone penetration of 40 per cent last year, but that is projected to rise to 65 per cent by 2020.

The figures are nearly identical for the Middle East, while Latin America is estimated to increase penetration even faster, coming from a lower starting point to overtake both regions and approaching 70 per cent by the end of the decade.

Bouverot articulated that as smartphone penetration rises, so does competition over mobile money markets.

The number of registered mobile money accounts had reached 300 million by the end of 2014, but these accounts only represent 8 per cent of mobile connections in the markets where mobile money services are available, suggesting there is plenty of room to grow.

This is especially so in developing markets, where there are now 16 countries that have more mobile money accounts than bank accounts. In total, there are 21 financial services that now have more than a million active accounts.

There was also a “steep increase� in the number of international remittances via mobile money, which is good news for overseas workers and their families, since the median cost of sending $100 via mobile is $4, less than half the average cost to send

money via traditional money transfer channels.

While mobile money is a growing industry, there are still major barriers, particularly in certain regions. One of the main obstacles from a business perspective is the geography of some smaller countries.

There are 54 countries that do not have a live mobile money service, of which 70 per cent have a population of less than 10 million and are therefore relatively unattractive to investors.

The fact that many of these countries are also relatively small in terms of territory means that it becomes harder to market P2P services.

However, in the 13 of these 54 developing markets that do have a population of over 10 million, there are 14 mobile money services in the offing.

GSMA believes that an increasing number of regulators are recognising the role mobile money can play in boosting financial inclusion and growth, said Bouverot.

For example, new regulation has been passed in Colombia, Kenya, India and Liberia last year. The biggest single barrier, however, is the absence of a licensing authorisation framework for non-banks.

This can slow down or even prevent companies from setting up mobile money services. Other regulatory obstacles include transaction and balance limits that are too low, onerous customer identification requirements, rules preventing companies from earning interest on pooled funds, and restrictions on international remittances, particularly outgoing remittances.

The mobile money industry continues to evolve, yet obstacles remain and need to be overcome in many markets. The industry will need to instil a best practice culture to continually improve quality of service, said Bouverot.

The GSMA boss said providers will need to engage with regulators and standards bodies to create a more enabling regulatory environment to allow these services to flourish, fostering sustainable investment in the services that underpin a strong digital financial ecosystem.

There are 54 countries that do not have a live mobile money service, of which 70 per cent have a population of less than 10 million and are therefore relatively unattractive to investors

In 2015, we are focused on working to help the mobile money industry mature.�

Anne Bouverot

Insurance Times | April 2015

22

MINING

Giving gold unto Caesar MINING FIRMS TO PAY LEVIES BASED ON TURNOVER

T Annual turnover to be paid to relevant districts from 2015

wo Tanzanian mining firms have for the first time started paying service levies to the relevant areas in which they operate.

Geita Gold Mine (GGM), a subsidiary of AngloGold Ashanti, and Bulyanhulu, Buzwagi and North Mara Gold Mines, owned by Acacia Mining, will from 2015 be paying service levies at the rate of 0.3 per cent of the annual turnover to relevant districts.

Ngosi Mwihava, Permanent Secretary in the Ministry of Energy and Minerals, told Insurance Times that the firms will be paying the 0.3 per cent service levies of the annual turnover instead of the cap limit payment of $200,000 per annum stipulated in the Mining Development Agreements (MDAs).

Mwihava said that the new payment system comes into effect following an agreement between the government and the mining firms to make amendments to all MDAs as per Local

Government Finance Act, Cap. 290 – Revised Edition of 2002.

“The beneficiaries of this service levy include Geita Town Coucil, Geita District Council, Msalala District Council, Kahama Town Council and Tarime District Council,” he said.

In Tanzania, MDAs are signed between the government and large-scale investors on mutual understanding, mainly to create security of tenure for the investors.

The fiscal terms for mining projects provided by tax statutes, mining royalties and lease rents together with local levies are highly balanced to optimize returns to investors and the public.

There are special concessions which reflect different realities that are given to large-scale investors through signed MDAs. Paul Masanja, Commissioner for Minerals in the Ministry of Energy and Minerals, told Insurance Times that the government has optimized returns from mining activities by local and foreign investors in a manner that reflects the different realities they face.

Masanja said that the government has to strengthen its capacity and negotiate financial terms as well as conditions of MDAs and administer tax systems and agreements so as to deal with transfer pricing issues and audit the results.

According to Masanja, negotiations of MDAs are done by a government negotiation team which comprises of highly knowledgeable senior government officials from different relevant ministries, depending on the nature of the project.

Masanja said that the MDAs were established to stabilize fiscal terms to legislation prevailing at the time of signing the agreement, while articulating environmental and land compensation rules to be adhered to by the investor.

MDAs are aimed at amplifying the legal responsibility of the investor to procure goods and services available in Tanzania.

The MDAs also guarantee employment, training and succession of Tanzanians, and provide for state participation in strategic mining projects.

The beneficiaries of this service levy include Geita Town Coucil, Geita District Council, Msalala District Council, Kahama Town Council and Tarime District Council.”

Ngosi Mwihava

Insurance Times | April 2015

24

INVESTORS TALK

‘Come and invest at home’ Museveni tells diaspora

President Yoweri Museveni of Uganda

PRESIDENT YOWERI MUSEVENI of Uganda has once again called upon Ugandans living in the diaspora to invest at home, saying even the inhabitants of the developed countries where they now live sacrificed and invested heavily in the past.

Insurance Times | April 2015

25

By Maksudi Zamy

Picture | Russell Watkins

I

n a speech read for him by Vice President Edward Ssekandi at the 25th Ugandan North American Association (UNAA) convention late last year, Museveni said both the US and Canada cover an area of 3 million square kilometers each and to develop them, they first paid a price.

“Government has since 1986 worked hard to address all key bottlenecks hindering development, among them security. Please invest at home to develop our country”, he said. The whole country was now peaceful, he said, and “we have invested heavily in infrastructure to create a conducive investment climate.”

Apart from ensuring tranquility, he said his main concerns were the socio-economic transformation of Ugandan society and economy, and the economic and political integration of the African continent.

Concerning the battle for socio-economic transformation, the president informed the delegates that he identified 10 strategic bottlenecks that he first highlighted to the country during the country’s Golden Jubilee celebrations in 2012.

The bottlenecks the president indicated then included ideological disorientation, whereby reactionaries fragment African peoples into sectarian divisions of tribe and religion as well as gender prejudice.

Secondly, he mentioned ideological disorientation. This, he said, cannot allow the reactionaries to build practical and competent state pillars such as the army, civil service, judiciary, etc. Consequently, any slight disturbance or challenge leads to the collapse of state authority to the detriment of the people. As a result, killings and rapes, defilement and looting, as well as all sorts of crime, are committed with impunity against the people.

The third factor is that owing to insufficient analysis, there have been attacks against the private sector, including the physical exclusion of elements of the entrepreneurial class as done by the regime of Idi Amin. Even where there is no direct attack on the private sector, corruption, bribery, extortion and poor administration or regulation also hamper the thriving of the private sector.Fundraising activities by politicians and other groups, e.g. churches and mosques, can also dis-

Killings and rapes, defilements and looting, as well as all sorts of crimes, are committed with impunity against the peoples. rupt the growth of the private sector and the accumulation of capital. A poor savings culture on account of conspicuous consumption, drunkenness, and other forms of social indiscipline can also interfere with capital accumulation and, therefore, the strengthening of the private sector.

The fourth bottleneck is an underdeveloped human resource (manpower) on account of lack of education proper healthcare. A non-literate, non-skilled population does not fully realize its potential.

Yet another bottleneck is the inadequate infrastructure that causes the cost of doing business to go up, thereby bringing down the profitability of companies operating in Uganda.

The sixth bottleneck is small internal markets on account of the excessive balkanization of Africa, making it difficult to support large-scale agricultural and industrial production. There was also neglect in developing export-oriented industries, with most of the continent exporting unprocessed minerals and other raw-materials.

The seventh problem is lack of industrialization, whereby Uganda exports unrefined agricultural products and minerals, thereby losing money and jobs to outsiders.

Other bottlenecks are the underdeveloped services and agricultural sectors, and the lack of democracy.

Museveni assured the diaspora that although Uganda’s economy is still small, it is fast expanding through the process of East African integration.The president said the government had invested in infrastructure development and that with high investments in the electricity sector, the problem of unemployment would be tackled. This is because of the investment and employment opportunities that will be available as a result of the government’s intervention.

Museveni called upon the diaspora to ignore negative elements that misrepresent issues, citing the recently passed Public Order and Management Act, which is intended for the maintenance of law and order but was being misrepresented.

“We shall not allow anybody to disrupt business and destroy people’s property in the city,» he warned.

President Museveni has been assuring Ugandans and foreign investors about the economic prospects of the country. He said projections of the Authorized Economic Operator (or AEO, which deals with international trade) indicates a consolidation of trends, with GDP growth reaching 6.6 per cent in 2014 and 7 per cent in 2015.

Insurance Times | April 2015

26

INVESTORS TALK

Drop in tax revenue collection, dwindling donor funding gets officials worried

By Staff Reporter

T

anzania has initiated various policy and administrative measures to improve domestic revenues following the failure of tax collection systems to beef up state coffers.

The new measures are aimed at reducing donor dependence, an issue that is gaining prominence as promised donor grants fail to materialize. For years, there has been a delay in the disbursement of programme grants, which is against the Basket Support Grants (GBS) arrangement of frontloading. The government says that it has failed to collect more taxes due to the lack of enforcement, and a lack of sufficient capacity from the implementing bodies.

Minister for Finance Saada Mkuya told Insurance Times magazine that, during the first quarter of the period 2014/2015, local government authorities’ own source revenue collection performance had improved and recorded Tsh92.2 billion ($49.8 million), being 80 per cent of the target.

Mkuya said the collection was below the target due to poor systems in management and monitoring of collection of revenues from various sources.

“Overall performance for the first quarter of the budget year 2014/15 was below the target for both revenue collection and expenditure,” she said.

Revenue performance was 87 per cent of the estimate, with low performance emanating from excise tax and non-tax collection of overall government operations, resulting in a drawdown of government deposits amounting to Tsh872.8 billion ($471.8 million).

According to Mkuya, measures have now been formulated to bridge the gap in tax revenue collection in various areas.

The measures include increasing domestic revenue collection by strengthening existing sources and identifying new potential sources. Another measure is strengthening the effective use of Electronic Fiscal Devices – EFDs – which are

Insurance Times | April 2015

linked to the Tanzania Revenue Authority (TRA) database to ensure that the government gets appropriate tax revenue.

According to the Bank of Tanzania (BoT) Monetary Policy Statement for February 2015, tax revenue collections amounted to Tsh2,401.2 billion ($1.3 billion) or 89 per cent of the estimate of Tsh2,700.7 billion ($1.5 billion).

The report said that non-tax revenue continued to perform significantly below the estimates during this period. The actual revenue collection from this category was Tsh143 billion ($7.7 million) against estimates of Tsh220 billion ($11.9 million), equivalent to a 65 per cent achievement only. This was however an increase of 53 per cent compared to the corresponding period in 2013/2014.

Value Added Tax Prof. Benno Ndulu, Governor of the central bank, said that collections of taxes on imports and duties during the first quarter of the fiscal year 2014/2015 amounted to Tsh775.6 billion ($419.2 million) reflecting a performance of 90 per cent of the target estimate of Tsh864 billion ($467 million).

Ndulu said that the gross collection for the period was 6 per cent higher than the collection in the year 2013/2014.

“All taxes and duties on importation performed below target, except for Value Added Tax (VAT) on imports, which amounted to Tsh373 billion ($201.6 million), being 106 per cent of the target of Tsh352.9 billion ($190.8 million),” he said.

Import duty collection was Tsh204.4 billion ($110.5 million) being 89 per cent of the target collection of Tsh229 billion ($123.8 million), while fuel levies collection achieved Tsh153.9 billion ($83.2 million), or 83 per cent of the targeted Tsh184.6 billion ($99.8 million).Juma Reli, Deputy Governor in charge of Administration and Internal Controls a BoT,

said that the overall income tax collection during the first quarter of fiscal year 2014/2015 was Tsh879.3 billion ($475.3 million) which is 82 per cent of the target of Tsh1,074.6 billion ($580.9 million). This is an increase of 15 per cent over the collection registered in the same period in 2013/2014 fiscal year.

“However, a good performance was demonstrated on withholding tax and whose collections were 104 and 119 per cent respectively, while Pay As You Earn, corporate and parastatal, individual and rental income tax underperformed during the period,” he said.

The performance of income tax was affected by declining oil and gold prices in the world market; operating expenses continued increasing, leading to a reduction of taxable amounts.

During the last quarter of 2014, revenue collected by the central government amounted to Tsh2,696 billion ($1.5 billion), which is 13.4 per cent below the target.

Tax revenue amounted to Tsh2,564.3 billion ($1.4 billion) or 88.7 per cent of the target for the quarter, and accounted for 93.1 per cent of total revenue.

BoT says that the under-performance was partly due to a decline in the importation of dutiable goods, while grants disbursed amounted to Tsh131.4 billion ($71 million) against the projection of Tsh333.2 billion ($180.1 million) for the quarter.

The performance of income tax was affected by declining oil and gold prices in the world market; operating expenses continued increasing, leading to a reduction of taxable amounts.

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Insurance in Uganda

Gradual growth despite a chequered history.

By Addah Zamm

I

nsurance in Uganda is as old as the country itself.

However, due to the political instabilities that consumed the country in the s1970s and early 1980s, the insurance business was disrupted. Not until the early 1990s did the industry begin to rise again – after the dust of political instability had settled down. However, despite the current peace and stability in Uganda, the growth of the insurance sector has been slow.

Up to the late 1990s and early 2000s, the penetration of insurance in Uganda in general was low, and this can be attributed to a lack of sensitization among the masses. Most Ugandans didn’t know about other types of insurance other than motor third party insurance, and this is partly because it is mandatory for cars to be insured if they have be used on the road. Many people had started investing in cars both for leisure and business.

However, as the years went by and as a consequence of the prevailing peace and relative freedom of the press, a lot of media houses – both print and broadcast – began to run adverts on radio, television and newspapers. This, in addition to billboards, started creating awareness among the masses; with time, there has been rising appreciation of insurance from

the public.

Through media reports, Ugandans have come to acknowledge the benefits of insurance. For instance, following a fire outbreak in one of the biggest and busiest markets in Kampala, most people have come to believe in the insurance business after witnessing the compensation given to the affected people. The market resumed operations and the victims their businesses.

As a result, the need to be insured against any calamity is now slowly sinking into the people’s psyche. Many in the general population, for instance, can now talk of life assurance, child education policies, health insurance, goods in transit insurance, money insurance, and marine cargo insurance, among others.

With the Insurance Regulatory Authority of Uganda (IRA) firmly in place, there are no concerns regarding dubious business in the sector.

This authority oversees all activities of insurance companies in the country. All insurance players in Uganda are required to be licensed by the IRA annually before transacting any insurance business.

Today, there are about 30 insurance companies in Uganda, all of them duly licensed. Of these, 21 are non-life insurers, eight are life insurers and one is a reinsurance company. The non-life insurance companies include Statewide Insurance Company Ltd, Jubilee Insurance Company, Pax Insurance Company Ltd, and UAP Insurance Company Ltd. Life assurance firms in Uganda include The Gold Star Life Assurance Company Ltd, ICEA Life Assurance Company Ltd, Liberty Life Assurance Company Ltd, NIC Life Assurance and Sanlam Life Assurance Company Ltd. The Ministry of Finance and Economic Development, under Cabinet Minister Dr. Ezra Surum, is responsible for supervision of the overall financial affairs and budgeting policies of the country, including regulation of the insurance sector.

The city of Kampala: Today, there are about 30 insurance companies in Uganda.

Insurance Times | April 2015

28

BUSINESS

Tanzania GDP grew by 8.2pc – statistics report A recent report released by the Tanzania National Bureau of Statistics (NBS) shows that the country’s Gross Domestic Product (GDP) reached Tsh21 trillion ($11.4 billion) during the third quarter of 2014.

By Staff Writer

T

his represented a growth of 8.2 per cent for the period July–September 2014, as compared to Tsh19.4 trillion ($10.5 billion) recorded during the corresponding period in 2013.

Tanzania GDP for the third quarter of 2014, in absolute terms, was Tsh10.7 trillion ($5.8 billion) compared to Tsh 10 trillion ($5.4 billion) for the corresponding quarter of 2013.

The country’s GDP increased at a rate of 6.8 per cent in the third quarter of 2014, compared to 7.4 per cent for the corresponding period of 2013.

The third quarter GDP estimates for 2014 at present and constant price is the first quarterly release of the revised GDP series with 2007 as the base year.

The leading sector was mining and quarrying, which recorded a growth rate of 5.2 per cent in the third quarter of 2014 compared to 3.3 per cent in the similar quarter of 2013.

Diamond production in the third quarter of 2014 was 66,508 carats, compared to 27,828 carats produced in the reference period in 2013.

The second area is manufacturing activity, which recorded a growth rate of 10.8 per cent in the third quarter of 2014 compared to 10.4 per cent in 2013. This is followed by financial intermediation and insurance, which increased by 7.3 per cent in the third quarter of 2014 compared to 6.8 per cent in the third quarter of 2013.

Insurance Times | April 2015

“The growth was mainly attributed to increased processing and preservation of meat, fish, fruit, vegetable oils and fats,” said Oyuke.

He added that electricity and water supply activities also increased by 7.7 per cent in the period under review compared to 5 per cent in the corresponding period of the previous year.

“The growth rate was attributed to the increase in electricity generated from thermal and gas plants,” he said.

The fourth category is real estate which increased by 2.2 per cent in the third quarter of 2014 compared to 2.1 per cent of the reference period under review in 2013.

The last was the agricultural sector, which registered a growth rate of 2 per cent in the third quarter of 2014 compared to 3.4 per cent recorded in the similar quarter of 2013.

The growth of the agricultural sector was attributed to the increased production of food and tobacco products, textiles and cement.

A government agency, NBS is the National Statistical Office of Tanzania. It was established from the former Central Bureau of Statistics to provide more efficient services.

As a customer-focused entity, NBS carries out its activities in a businesslike manner, using commercial financial management and business-planning techniques.

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‘Takaful’ comes to Tanzania: Islamic insurance all set to cause ripples in industry (Part 1)

Takaful (Islamic insurance) has been established in its modern form for more than 28 years, with firms that offer Shari’ah-compliant insurance protection growing significantly in both number and scale of operations.

Takaful contributions (premiums) are expected to increase in volume substantially over the next decade.

By Mwirabi Sise

Insurance Times | April 2015

Illustration | Joseph Ngari

I

slamic insurance, or Takaful, is a concept of mutual cooperation to guarantee mutual protection of members.

Takaful is derived from the Arabic word kafalah, which is a pact that guarantees individuals in a group against loss or damage sustained by any one of them.

According to the Takaful Act of Malaysia, 1984: “Takaful is a scheme based on brotherhood, solidarity and mutual assistance which provides for mutual financial aid and assistance to the participants in case of need, whereby the participants mutually agree to contribute for that purpose.”

Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) standard No. 26, Sharia, describes Takaful as, “An agreement between persons who are exposed to risks to protect themselves against harms arising from the risks by paying contributions on the basis of ‘commitment to donate’ (iltizam bi al tabarru’).”

The Islamic Financial Services Board and International Association of Insurance Supervisors give the following discretion; “Takaful is the Islamic counterpart of conventional insurance, and exists in both life (family) and general forms. It is based on the concept of mutual solidarity and a typ-

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ical Takaful undertaking will consist of a two-tier structure that is hybrid of a mutual and commercial form of company.”

The development of Takaful in modern times was originally undertaken in Sudan in 1979 and Malaysia in 1984. It was also a result of the 1985 Fiqh Academy in India ruling, which declared that conventional insurance was haram (forbidden), while insurance based on cooperative principles, sharia compliance, and charitable donations was acceptable.

The performance of Islamic insurance, widely known as Takaful, has shown a remarkable growth from time to time.

This can be seen by the growing number of Takaful operators in the present day, and is of course evidenced by the average growth of 20 per cent annually at present.

Takaful has no conventional insurance because of two reasons: One, it is incompatible with Sharia rules and principles.

Second, conventional insurance suffers from fundamental problems in its modus operandi, mainly due to the occurrence of Sharia non-compliant elements.

Someone may ask, “What are the bases and objectives of Takaful?” According to the Institute of Islamic Banking and Insurance, the objectives of Takaful are simply to broaden the risk horizons among members. In reality, the main difference in this area between conventional insurance and Takaful is that, in insurance, the risk is transferred to the insurer, while in Takaful the risk is shared reciprocally by the members of the common Takaful Fund under the Takaful scheme. In brief, Takaful aims at: 1. Helping and protecting the community from the negative impact of hostile circumstances; 2. Improving quality of life through the peace of mind that comes from security; and 3. Saving and investing money through a shared system that distributes profit on premiums (subscriptions/contributions) invested by policyholders on an annual basis.

The Sharia basis of takaful can be deduced from the holy Qur’an and Sunnah, which states that: “Whosoever removes a worldly hardship from a believer; Allah

will remove from him one of the hardships of the hereafter.” ,In other words, people are urged to take certain precautions or strategies to mitigate or reduce risk. The Prophet (pbuh) gives an example of a Bedouin who leaves a camel and asks, “Why don’t you tie down your camel?” The Bedouin replied “I put my trust in Allah.” The Prophet said, “Tie your camel first, then put your trust in Allah.” This story teaches us to take measures to safeguard our properties against risk of loss.

Finally, there is also a legal proverb that is relevant to Takaful, which reads, “ad darar yuzal,” meaning, “Damage or harm is removed.” The proverb means that once any damage occurs, efforts must be made to remove it. In this sense, Takaful can be considered as an effort to remove damage or harm when it occurs, through the payment of compensation or coverage to the victim or family.

According to Jacky Lim and others, there are several important differences between Takaful and conventional insurance: i) Conventional insurance is a buysell (sale) contract in which the insurance company offers and sells protection and the participants (policyholders) accept and buy it at a certain price. The contract under Takaful usually involves the concepts of tabarru, mudaraba and wakala. ii) Conventional insurance accepts the transfer of risk from the insured against the price or premium. In Islamic insurance, members share all risks in cooperation and no transfer of risk is involved. Participants pooling their contributions basically own the Takaful fund and the Takaful operator acts like a trustee of that pool to manage the business professionally with insurance know-how, and provides the resources for doing so.

The participants are the insured and the insurers in the first instance. The risk is therefore borne by the participants collectively and they share in any excess or loss from the pool. iii) Conventional insurance is based on profit-motive and its goal is to make best use of revenue to shareholders. Islamic insurance, in contrast, is based on the mo-

Conventional insurance is based on profit-motive. Islamic insurance, in contrast, is based on the motive of community welfare and protection. tive of community welfare and protection. The nature of business is non-profit-oriented, though the Shari’ah upholds profit incentives from business ventures provided these are achieved by ethical ways and means for the overall benefit of society and the environment without undue excesses and exploitation. iv) When there is no claim during the period agreed, the policyholder in conventional insurance will lose the premium paid to the insurer. In Islamic insurance, however, when there is no claim made during the period agreed, the underwriting surplus is given back to the policyholder, or donated to charity. v) In conventional insurance, the investment of premiums is completely at the discretion of the insurer, with no involvement of policyholders. In that case, such investment usually involves forbidden elements of riba and maisir. In distinction, the Takaful contract specifies how and where the premiums would be invested. Usually, the Takaful operator will invest the premiums in shari’ah-compliant areas. vi) The conventional system of insurance is subject to exploitation. For example, it is possible to charge a high premium (especially in monopolistic situations) and the full benefit of such overpricing goes to the company.

The Takaful system has a built-in method to counteract such overpricing

There were discussions in the inner circles followed by board resolutions by some insurance companies to offer Takaful products under the Takaful window, Since

Insurance Times | April 2015

32 through its feature of profit sharing. No matter what premium is charged, if the overall results are good, any surplus goes back to the participants in proportion to their contributions. vii) The Islamic insurance company has an additional obligation to pay annual zakat while in conventional insurance, there is no such obligation.

Since 2008/2009, there were discussions in the inner circles followed by board resolutions by some insurance companies to offer Takaful products under the Takaful window.

One such company was the Zanzibar Insurance Corporation, which went ahead to form a steering committee to study and report on how best and what needed to be done to enable the company offer Takaful products.

The establishment of a steering committee on the basics of Takaful enabled

them to positively find the way forward for Zanzibar Insurance Corporation to start offering Takaful products.

However, the regulator – the Tanzania Insurance Regulatory Authority (TIRA) – may not have been ready by then to grant approval for such an undertaking, citing the need for a regulatory framework for Takaful as essential before Takaful could kick off.

Time passed without considerable progress until 2011, when TIRA formed a three-member team to undertake a study on the subject. What followed was a report in 2012 titled, “TIRA Study Report and Recommendations.” The report found that in a country where a large percentage of the population is Muslim, there is likely to be a significant and growing demand for Takaful.

To ensure a level playing field and given the likely sensitivities as far as finan-

The Executive Secretary of the Inter-University Council for East Africa, Prof. Mayunga-Nkunya of Tanzania, addresses a press conference in Kigali, Rwanda, on the sidelines of a recent conference organized jointly with the East African Business Council. The Academia-Private-Public Sector Partnership Forum and Exhibitions debated complaints by employers regarding the shortcomings of graduates from the region’s universities.

Insurance Times | April 2015

cial products structured around religious beliefs are concerned, it was recommended that the right regulatory framework be put in place for Takaful to be practised in the market. This led to the development of a separate Takaful Bill and Regulations in 2013.

Meantime, the draft regulations are awaiting relevant approvals. It is therefore expected that in 2015, they will be gazetted and operationalized.

Tanzanians and other financial stakeholders are expected to enter first. However, there are some investors waiting for licences, while others are organizing themselves to join this business and provide alternative insurance products for the betterment of communities.

Read Part II in the next edition.

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Liberalization: The sweetener that changed the growth curve in insurance The Tanzania insurance sector has remained stable over the years since liberalization, which allowed the private sector to take part in the business. This was buoyed by the satisfactory performance of the global and local economy.

Tanzania’s Commissioner of Insurance Israel Kamuzora.

By Mathew Madden

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he insurance sector has continued to face several challenges in the Tanzanian market.

From an underwriting perspective, the general insurers attained a premium growth rate of at least 15 percent during the past five years.

On the long-term assurance side, the industry has recorded a satisfactory growth in business volume and the life fund during the past five years.

Israel Kamuzora, Commissioner of Insurance at the Tanzania Insurance Regulatory Authority (TIRA) says that, despite the various challenges facing the insurance industry, the sector has good prospects for growth and improvement in the future.

Kamuzora said that whereas the insurance industry grew at an average annual growth rate of 19.9 per cent during the past five years, the national Gross Domestic Product (GDP) and the finance intermediation sector grew at nominal annual growth rates of 16.3 per cent and 18.6 per cent, respectively.

Insurance Times | April 2015

According to Kamuzora, this indicates that the insurance sector has experienced a higher annual growth rate than the wider finance intermediation sector and the national GDP. “Based on TIRA’s projections, the insurance sector will grow at a rate of at least 20 per cent to more than Tsh571 billion ($308,600) in 2015,” he said.

TIRA said that the country’s insurance penetration in premiums as a percentage of GDP has remained largely at 0.9 per cent during the three years from 2011 to 2013.

This is mainly attributed to parallel growths that have been recorded in the national economy during the period under review.

Saada Mkuya, Minister for Finance, said that the penetration ratio is projected to consistently grow during the next five years to reach approximately 2 per cent in 2019.

Mkuya said that the contribution of the insurance industry premiums as a percentage of Finance Intermediation

GDP decreased slightly from 49.2 per cent in 2012 to 48.6 per cent in 2013.

“But the ratio has shown a consistent increase during the past 10 years, from 34.8 per cent in 2004 to 48.6 per cent in 2013,” she said.

During the financial year ending 2014, the Tanzania insurance market grew by 17.1 per cent in gross premiums written from 2013.

The market growth was consistent with the growth of the national nominal GDP and financial intermediation sector nominal GDP during the period under review.

The performance was however slightly lower than the set target of 18 per cent annual premium growth for the industry.

The industry’s contribution to the national GDP was 0.9 per cent, similar to the contribution made in 2012.

General insurance business showed a growth of 15.1 per cent in gross premium income from Tsh362.9 billion ($196.2 million) during 2012 to

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Product Mix However, the general insurance product mix shows a share of motor insurance business growing at 33 per cent followed by fire with 20 per cent, health with 19 per cent and marine with 12 per cent.

Other general insurance classes had a total share of 16 per cent of general insurance business.

Life assurance, on the other hand, was dominated by the Group Life class at 72 per cent, followed by Individual Life at 28 per cent.

Underwriting & Profitability The general insurance underwriting result improved to an underwriting loss of Tsh3.5 billion ($ 1.9 million) compared to the previous year’s loss of Tsh11.9 billion ($6.4 million).

The insurers recorded a combined ratio of 102 per cent in 2013, being above the maximum early warning test ratio of 100 per cent.

From an underwriting perspective, the operations of general insurers were unprofitable.

But the marine, motor and engineering classes of business recorded underwriting profits of Tsh1.8 billion ($970,000), Tsh1.2 billion ($649,000) and Tsh1.1 billion ($595,000), respectively.

From an investment point of view, general insurers attained investment income amounting to Tsh20.7 billion ($11.2 million) in 2013, having improved by 32.7 per cent compared to an investment income of Tsh15.6 billion ($8.4 million) earned in 2012.

The insurers had however attained a return on equity of 10.1 per cent in 2013, compared to a return of 4 per cent the previous year.

The higher return on equity in 2013 is partly attributed to a more favourable underwriting result and higher return on investment.

Asset Position and Investment Portfolio As at the end of the underwriting year 2013, the total assets of insurers had increased by 15 per cent to Tsh519 billion ($280.5 million) from Tsh451 billion ($243.8 million) of the previous year.

Total insurers’ investments have increased by 16 per cent, from Tsh300 billion ($162.2 million) in 2012 to Tsh349 billion ($188.6 million) in 2013.

The largest share of insurers’ investment assets comprised term deposits accounting for 48.5 per cent of the total, followed by real estate investments at 19.7 per cent, government securities 12.6 per cent, shares 12.2 per cent and investments in related parties 5.9 per cent.

Dar es Salaam waterfront Picture | Joseph Ngari

Tsh417.7 billion ($225.8 million) in 2013.

The volume of life assurance business increased by 29.2 per cent, from Tsh43.7 billion ($ 23.6 million) in 2012 to Tsh56.4 billion ($ 30.5 million) in 2013. This has made the total insurance premium for the year 2013 to stand at Tsh474.1 billion ($256.3 million) as compared to Tsh406.6 billion ($ 219.8 million) for the year 2012.

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Fringe benefits: Why most employees can’t make head or tail of HR policies Mr. Charles Mwamtobe, Manager Sales & Marketing at Utamaduni African Art.

F

These are the extra benefits provided to employees outside a stated wage or salary.

ringe benefits are “indirect forms of the total compensation; they include paid time away from work, insurance and health protection, employee services and retirement income.” Moreover, fringe benefits can be expressed as “those rewards that employees receive for being members of the organization and for their position in the organization; unlike wages, salaries and incentives, benefits are usually not related to employee performance.”

In addition, fringe benefits are the extra benefits provided to employees outside a stated wage or salary. Sometimes referred to as forms of additional compensation, they may include bonus payments, premiums, and rewards that supplement an employee’s wage or salary. Common examples of fringe benefits include housing allowances, medical insurance schemes, sick pay, meals pay, educational assistance, vocation pay, uses of company car as well as employee discounts.

There are a number of principles that a manager can use to implement fringe benefits in an organization. Those principles as stated by Aswathappa (2014:450) inFrom Tanzania’s perspective, volve benefits and services that need there is a sound basis for the to be provided to the employee on the basis of a genuine interest in the proprovision of fringe benefits. tection and promotion of their wellbeing. The management should not feel that the fringe benefit is thrust upon them, nor should they feel that they are providing the benefits as a matter of charity. Every benefit needs to satisfy a real need, and employees can resist any benefit they do not like. The benefits also need to be cost effective.

Benefits need to be as broad based as possible. Administration of the benefits must be preceded by sound planning. The wishes of employees are expressed by their union representatives and the bargaining power of their union needs to be considered. Employees need to be educated to make use of their benefits.

Insurance Times | April 2015

Human resource managers have their own targets or objectives of providing fringe benefits to employees. Such objectives include boosting employee morale; motivating employees by identifying and satisfying their unsatisfied needs; creating and improving sound industrial relations; providing security to employees against social risks through old age and maternity benefits; and providing a qualitative work environment and work life.

Other objectives include protecting the health and safety of employees against accidents; promoting employee welfare by providing recreation facilities; and creating sense of belonging among employees so as to retain them in the firm; and meeting the requirements of various laws relating to fringe benefits.

From Tanzania’s perspective, there is a sound basis for the provision of fringe benefits. Some benefits are stated by the country’s laws, especially those under labour laws (statutory rights). An example is those that are stated in the Employment and Labour Relations Act, No. 6 of 2004, and Labour Institution Act, No. 7 of 2004.

Employment security benefits: This kind of fringe benefit refers to physical and job security to the employee, which should be provided with a view to promote the security of the employee and his or her family members, such that a benefit of confirmation of the employee job creates a sense of job security. Further, a minimum and continuous wage or salary gives a sense of security of tenure. Benefits of this type in Tanzania’s context include the following:Maternity leave benefits are offered by employers to employees in both the private and public sectors as provided for under the Employment and Labour Relations Act, No 6.of 2004. In addition, cost of living bonus is offered to different employees such as soldiers. Most of all, the annual leave with pay is provided to employees in a variety of organizations in Tanzania.

Health protection benefits are those benefits that are concerned with safety and health con-

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a benefit that includes sick leave with pay, vacation pay, paid rest, travel time, bargaining time, relief time, paid lunch periods and grievance time, is also offered by many employers.

In Tanzania’s context, benefits of payment for time not worked are particularly relevant to the semi-independent Tanzania National Electric Supply Company (Tanesco) which every so often participates in vacation programmes for which the employees are paid. The National Micro Finance Bank (NMB) also has this type of benefit for payment of time not worked.

siderations. Employee safety and health should be taken care of in order to protect employees against accidents and unhealthy working conditions, as well as to protect workers’ capacity. Benefits under this type in Tanzania include sick and disability benefits, including benefits accruing in the event of accidents. As an example, in Dar es Salaam the water sewerage authority offers sick benefits to employees as part of the medical benefits it offers.

Extra pay for time worked: This is a category of fringe benefit covering benefits like premium pay, incentive bonus, shift premium, old age insurance, profit sharing, Christmas bonus, food cost subsidy, housing subsidy and recreation benefits. Property fringe benefits: This may be used by organizations to provide employees with access to property, either free or at a discount. This includes all items of clothing or uniform, musical instruments, real estate such as land and housing, and shares such as those of the National Housing Corporation (NHC).

Employees may also be provided with housing facilities, as is the case with the Tanzania Zambia Railways Authority (TAZARA), which houses its employees so as to enhance a conducive

Old age and retirement benefits: This involves money that is provided as a source of income to people who have retired, representing money paid for past services. The calculation of how much an employee should be paid must be done in a defined manner as a defined benefit plan.

This is the pension plan under which an employer pledges to provide a benefit determined by a definite formula at the employee’s retirement date. The benefits in Tanzania’s context for retired employees, who have either retired voluntarily or mandatorily according to the law, include the schemes under the National Social Security Fund (NSSF) and the People Pension Fund (PPF). They also provide medical benefits for retired employees.

Personnel identification, participation and stimulation benefits: These are benefits which recognize the participation of workers in a diligent, efficient and committed way toward accomplishment of the tasks of a given organization. They include benefits such as membership of cooperative societies, assistance with income tax forms, provision of educational facilities, counseling facilities, quality bonus, recreational programmes, attendance sbonus, canteen facilities, and safety measures.

Moreover, most banks in Tanzania do offer personnel identification and stimulation benefits to employees; this is recognition by the management of workers’ efficiency, hence offering an attendance bonus.

Payment for time not worked, which is

environment for work, in the process boosting workers’ morale.Generally, administration faces various problems in the provision of fringe benefits. Often, managers have little interest in the benefit programmes, which means they are not even aware of the company’s policy toward benefits and their contribution to the quality of employees’ life. In addition, employees have little choice in their benefit package, meaning that most employees are unaware of all the benefits to which they are entitled.

Moreover, this is often caused by lack of knowledge by the employees that they could request more benefits to meet their needs; for example, older workers may want to improve their retirement plans, while younger women may want to seek improved insurance coverage for dependants.

Nevertheless, employees are usually unaware of all the benefits to which they are entitled. Once a fringe benefit is designed by the company, employees have little discretion in the matter; for example, the same pension formula is usually granted to all workers, but younger employee see pensions as distant and largely irrelevant, and older female workers also feel that maternity benefits fail to recognize workforce diversity.

Charles Mwamtobe works with Mzumbe University.

E-mail: charzy03@gmail.com

A worker at a greenhouse near Nairobi. Many workers are unaware of their rights and fringe benefits.

Insurance Times | April 2015

Picture | Isaac Mwangi

Employees have little choice in their benefit package, meaning that most employees are unaware of all the benefits to which they are entitled.

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How falling exchange rates have wreaked havoc in Tanzania

Dar is on track, IMF says

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bout a year ago, the alarm bells sounded in the financial markets as the Tanzanian shilling depreciated rapidly against major currencies. Between April and late June, 2014, the currency at one point reached a low of 1,700 to the US dollar.

Tanzanian exporters continued to gain from the depreciation of the shilling against other world currencies, while importers suffered as the plummeting value added to the the cost of imported goods.

The inter-bank market shows that the shilling continues to lose ground due to surging demand by importers, although economists belittle the depreciation as normal currency behaviour.

Speaking during the launching of the 38th Dar es Salaam International Trade Fair (DITF), Charles Sama of the Economic and Research Directorate of the Bank of Tanzania (BoT), said that in those three months, the Tanzanian shilling depreciated alarmingly.

Normally, he said, exchange rate gains and fluctuations are determined by demand and supply of the dollar in any given season.

“There are times when there is a high demand for dollars, while the supply is poor partly due to having few exports visà-vis huge imports. It is through exports that the country gets more dollars,” said the economist.

Sama further said that the pressure on the shilling eases from July to September due to increased exports, which in turn generate more dollars in the market.

He pointed out that in the high season, there is a big influx of tourist arrivals that come with their dollars to spend; more importantly, it is during this time that development partners also begin to inject funds into the fiscal budget and other projects.

In order to make the shilling remain stable against the dollar and other world currencies, Sama has called upon the Tanzanian business community to export more and earn more dollars.

According to Sama, although the central bank is the one that supervises and gives licences to forex bureaus in the country, it does not intervene in the market to control the exchange rate. The exchange rate can only be controlled by more exports that can generate more dollars.

In the past, the shilling depreciated alarmingly in July 2011, but back then local analysts as well as BoT officials attributed the trend to the Greece debt crisis. Locally, the depreciation was also suspected to have been linked to the election fever generated by the 2010 general election.

During that period, the value of the shilling against the US dollar declined rapidly from 1,380 to a low of 1,570, causing panic as the country’s economy depends a lot more on imports than on exports.

IMF Deputy Managing Director Min Zhu

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he Executive Board of the International Monetary Fund (IMF) has completed its first review of the economic performance of Tanzania under a programme that is supported by the Policy Support Instrument (PSI), with reports indicating that Tanzania’s macro-economic developments are still favourable.

The IMF’s Deputy Managing Director Min Zhu Tabling the report of the Boars, the Deputy Managing Director and Acting Chair of the Executive Board, Min Zhu, said that the first half of 2014 reported strong economic growth and inflation levels of 7 per cent, which is in line with the authorities’ target of 5 per cent by June 2015.

“Macroeconomic developments in Tanzania remain favourable,” he said. “Inflation remains in mid-single digits.” Given the current economic situation, Mr Zhu urged commitment and reaffirmed the intention on the part of the Tanzanian government to meet the budget deficit target and to review revenues and regulate expenditures accordingly.

He also articulated a need to strengthen the bringing together of fiscal and monetary policies.

The PSI is an instrument of the IMF that assists countries and creates more efficient economic programmes to be accepted by the IMF Executive Board in an effort to show donors, mutual development banks, and markets that a country’s policies have been supported and endorsed by the IMF.

To advertise, call Tel: +255 22 2184624 Dar es Salaam, Tanzania Published by Zurich Group Ltd Insurance Times | April 2015

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‘There has been a 300pc increase in trade’ Excerpts from the State of the EAC address delivered by the chairman of the East African Community, Tanzania President Jakaya Kikwete, to members of the East African Legislative Assembly (EALA) in Bujumbura, Burundi, on 19 March, 2015.

I

thank you for affording me this rare opportunity to address this august Assembly. This is the fourth time in the past six years I do so. It has always been a pleasure and an honour for me to share my thoughts with the distinguished Members of the East African Legislative Assembly about the East African Community and the East African integration process.

Status of Regional Trade In the Charter establishing the East African Community, it was agreed that the entry point in our integration process will be the Customs Union, followed by the Common Market, later the Monetary Union and ultimately the Political Federation. The Customs Union, which started in 2000, involved two things. Firstly, the free movement of goods produced in any EAC member state and secondly, a common external tariff. Goods are supposed to move freely across the borders of member countries without tariffs being charged and not encumbered by Non-Tariff Barriers.

It is heartwarming, indeed, to note that implementation of the Customs Union has been a success. Indeed, goods which meet the criteria of rule of origin have been moving across borders without paying taxes. However, non-tariff barriers remain a challenge. Progress has been made, but the matter has not been resolved fully yet.

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The EAC headquarters in Arusha, Tanzania.

Indeed, it has proven helpful in reducing encumbrances to importers and in discouraging dumping and diversion of transit goods. Ultimately, it will be an effective tool of promoting trade and curbing revenue loss to governments.

Non-Tariff Barriers It is incumbent upon us, therefore, to ensure that all remaining non-tariff barriers to trade are removed in the East African region. We all admit that we have done very well in eliminating tariff-related barriers; we must resolve to do away with the remaining non-tariff barriers. Commendable work has been and continues to be done to address the transport-related ones such as roadblocks, weighbridges and other checkpoints on the roads as well as Customs red-tape at ports and exit points. The progress made so far at the ports of Mombasa and Dar es Salaam, and on the Northern Corridor with regard to roadblocks, shows that it is possible to eliminate these non-tariff barriers. Measures are being taken in earnest to reduce roadblocks on the Tanzania side of the Central Corridor. I am sure [that] in the next few months we will notice a huge improvement.

Police checkpoints have been reduced from 15 points to six points. Our

It is incumbent upon us to ensure that all remaining non-tariff barriers to trade are removed in the East African region. aim is to reduce them to none except when need arises. The Tanzania Revenue Authority checks [have reduced] from 3 to 0. Weighbridges have remained eight, but our plan is to reduce them to three. We are introducing weigh-in-motion technology: One is already done at Vigwaza, two are on their way for Manyoni and Nyakahura. I am told with the current improvements alone, for a container to move from the port of Dar es Salaam to Kigali takes three days from the previous eight days. It takes three and a half days to Bujumbura from the previous eight days.

I pledged during the 16th Summit that during my time as chair of the EAC I will give due attention to elimination of Non-Tariff Barriers in the East African Community. I intend to follow up on this pledge. I would appreciate the partnership and support of the East African Legislative Assembly in this endeavour. We must make the EAC region the best place to do business.

Picture | Isaac Mwangi

These challenges notwithstanding, intra-EAC trade has registered phenomenal increase in this short period of 10 to 15 years. Trade is now at 23 per cent, over and above the intra-African trade figure of 12 per cent. There has been a 300 per cent increase in the value of trade, from $2 billion in 2005 to $6 billion in 2014. These numbers, coupled with the combined EAC GDP of $110.3 billion with an average annual rate growth of 2.6 per cent, makes our region a formidable trade and economic bloc in Africa. At the same time, government revenues have recorded an increase year after year from 89.55 per cent of the target in 2010, to 96.86 per cent of the target in 2013. During the discussions on the establishment of the Customs Union, the loss of government revenues Employees have little choice in their benefit package, meaning that most employees are unaware of all the benefits to which they are entitled. was among the leading fears. It has turned out different. One can, indeed, brag to say the EAC is next to none on the African continent.

We envisage increased revenues when the Single Customs Territory becomes fully operational in the near future. So far, the piloting exercises are progressing well in all member states.

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State of Regional Infrastructure We must do everything within our power to reduce infrastructure-related costs at the shortest possible time. These are responsible, in a big way, for the high cost of doing business in our region. It is estimated that costs of transport in our region are four to five times higher than the developed countries. It is estimated that it accounts for about 30 to 40 per cent of the price of goods in the landlocked countries. Investing in better and efficient ports, railways, roads, aviation services, energy and telecommunications are things we must continue to do.

As you may recall, at the 2nd East African Community Heads of State Retreat on Infrastructure Development and Financing held in Nairobi on 29th November, 2012, we undertook to close the infrastructure gap by 2020. I note with a deep sense of satisfaction the ongoing work, both in the Northern Corridor and the Central Corridor, in this regard. The East African Legislative Assembly should regularly request member states to report on progress being made on the implementation of the outcomes of the retreat.

Let us be reminded that the full integration of the East African Community region very much depends on the success of these efforts. We must also know that the world we are in, and that ahead of us, has no place for fragmented markets, isolated industrial value chains and inadequate in-country or cross-border infrastructure. [We will] work with the Council of Ministers to devise ways and means to secure investments and funding for East African infrastructure programmes and projects.

The State of the Common Market As stipulated in the Charter establishing the East African Community, the Common Market is the next stage after the Customs Union. As you may recall, the Common Market Protocol was signed in 2009 and came into force in 2010. This Common Market is what answers the very question about movement of people, capital and services within the region. The feedback from the East African Community Common Market Scorecard 2014 presented at the last East African Community Summit in Nairobi shows that progress is not good enough. For example, with regard to the Free Movements of Services, 63 measures out of 500 key sectoral laws and regulations of partner states were identified to be inconsistent with the Common

When conceiving the new Community, we all agreed that we should not repeat the mistakes of history, neither be prisoners of it.

Insurance Times | April 2015

Market Protocol. Seventy-three per cent of these are exclusively related to professional services.

With regard to movement of goods, a lot has been done, apart from non-tariff barriers related to sanitary and phytosanitary measures. In terms of movement of capital, only two out of 20 capital operations are free of restrictions in all partner states. These two are related to external borrowing and repatriation of proceeds from sale of assets.

The scorecard reminds us that partner states are behind schedule in reviewing and amending national laws in accordance with the Common Market protocol. This impedes progress in the implementation of the Protocol and the East African integration process.

I appreciate the fact that, there are before this Assembly Bills that will help advance the building of the Common Market. I have in mind the East African Community Cross Border Legal Practice Bill (2014); the East African Community Electronic Transactions Bill (2014); and the East African Community Competition (Amendment) Bill (2015). I hope you will treat them with the urgency they deserve.

Peace, Security and Stability Ours is a regional integration undertaking derived from historical lessons of the defunct East African Community (1967–1977). Also, from the gains made by the Tripartite Commission on East African Cooperation (1996-1999). We all know what contributed to the demise of the previous EAC. It is not my intension to dwell on the narration or the reasons and circumstances of its collapse.

When conceiving the new Community, we all agreed that we should not repeat the mistakes of history, neither be prisoners of it. We also agreed to move cautiously, making every step we take the building block of the next. Indeed, we started with the Tripartite Commission on East African Cooperation in 1996 and later in 1999 graduated into the East African Community.

The principle of growth by stages is well enshrined in the Charter establishing the East African Community. We have remained faithful to this principle. We started as three members; we are now five, with provision for others to join if they meet the terms and conditions. The terms include sharing a common border with a member of the East African Community and subscribing to its ideals. So far, South Sudan and Somalia have applied.

Subscribing to the ideals of the democracy, good governance, human rights and the rule of law are critical tenets of the East African Community. We all agree that better-governed member states contribute to a prosperous region. It is also true that badly-governed member states frustrate the integration process.

It impedes trade, cooperation, as well as movement of people, goods, services and capital. Moreover, it deters investment and makes the region an unfavourable destination for investment and trade.

Peace, security and stability must and should continue to be high on our agenda. I am happy that

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To my Burundi brothers and sisters, let me say that I am aware of the anxiety over the electoral process ahead of you. There are whispers and fears that this great country may lose the prevailing peace and stability garnered over the past decade and a half. There could be violence, some say.�

The city of Kigali.

as I address this House, our region is peaceful, secure and stable. Democratic values and institutions continue to take root and shape in our countries. This year, we will be having elections in Burundi, and a Referendum on a proposed Constitution and General Elections in Tanzania.

Burundi To my Burundi brothers and sisters, let me say that I am aware of the anxiety over the electoral process ahead of you. There are whispers and fears that this great country may lose the prevailing peace and stability garnered over the past decade and a half. There could be violence, some say. Honestly, that fear [is in] all of us and we dread the idea of violence coming back to Burundi. God forbid.

In my view, there are ways of doing things right and avoiding political instability and violence. The leaders and the people of Burundi should do the following: 1) Respect the constitution of Burundi and the Arusha Peace Accord to the letter and spirit.

In the same vein, respect the electoral laws of Burundi.

2) Desist from resorting to violence in resolving your problems. That may land your country into bigger problems.

3) Use dialogue as much as you can. There are many wise men and women, and institutions, to enable you do that.

4) Involve the laws of Burundi when you feel the constitution or the electoral laws have been violated.

Insurance Times | April 2015

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We all have trust in you that you will rise to the current challenges and overcome them. You have been able to manage even more challenging situations than this. I do not see why you should fail this time. Pluck up courage, muster political will, and everything will fall into place.

I want to assure you that the EAC stands ready to assist. We will walk with you all step of the way as we did in the past.

Our region is not without security challenges. The fact that we are surrounded by other countries and regions in conflict, poses a security challenge to our region. Therefore, we cannot avoid keeping our eyes on them and being of assistance when need arises. It is in this regard that our region is involved in the DRC, South Sudan and Somalia.

East African Court of Justice I am glad to report that another historic milestone has been laid with regard to the functions of the East African Court of Justice. At the 16th Summit of Heads of State of the East African Community held in Nairobi on 20th February, 2015, we adopted and signed the Protocol to operationalize the Extended Jurisdiction of the East African Court of Justice. The extended jurisdiction covers trade and investment matters, as well as issues associated with the East African Monetary Union.

This is yet another important avenue to East Africans to access justice and reap more benefits from their Community. It consolidates the integration process.

Picture | Isaac Mwangi

Role of EALA This esteemed House is one of the important pillars of our Community. It is the organ that carries the voice and aspirations of our people. This is where people’s interests are raised, aggregated and translated into laws. Since ours is a people’s integration, then this House is at the heart of our integration endeavours.

I commend the good work being done by this House. This is amply evident. The Bills passed by this House give life and meaning to our integration aspirations. It could not be possible for the EAC to achieve so much within this short period of its existence or without the good work being done by the EALA. Many of the Bills passed by this House and Resolutions adopted have contributed immensely towards advancing the EAC integration process.

Insurance Times | April 2015

Kenya’s Cabinet Secretary Felix Koskei at an exhibition in Katumani, Machakos County, during the groundbreaking ceremony for construction of an Aflasafe factory, the only one of its kind in East Africa. Aflatoxin poisoning affects millions of people in the region.

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Tan-Re invests in Uganda, sets sights on continent

Rajab Kakusa, Chief Executive Officer of Tan-Re

Even as it invests in the country’s northern neighbour, the Tanzania National Reinsurance Corporation Ltd (Tan-Re), the country’s sole reinsurer, is seeking to diversify its business by looking for opportunities further afield

By Mathew Madden

R

ajab Kakusa, Chief Executive Officer of Tan-Re, says that in 2013, the firm successfully incorporated new reinsurance business into its fast-expanding portfolio.

In that year, Tan-Re expanded its business in the region by investing in newly-established Uganda-Re to implement its strategic marketing programme across the region.

Kakusa said that as a reinsurance entity in the region, Tan-Re continues seeking active participation in local and regional networks with potential markets and allies.

“It is a known fact that reinsurance business is a matter of “know- who,” and the company values its customers and business partners with the highest regard,” he said.

The firm said that it was committed to ensuring adequate management of risks in the region and working closely with new and upcoming reinsurers.

Tan-Re will continue to expand its capital base to ensure steady growth and expansion of its market reach, Kakusa said.

According to Kakusa, Tan-Re is strategically positioned to seize new opportunities emanating from recent discoveries of oil and gas in Tanzania.

The company has consistently enjoyed favourable ratings from Global Credit Rating (GCR) of South Africa.

However, the firm believes that it should now be rated by a more influential glob-

al firm and is in the final stages of preparations for rating by AM Best (Alfred Magilton Best).The company said that it will continue to increase its efforts to grow both local and international optional business and source for more subscriptions to the company’s shares so as to enhance capitalization. This will help it to achieve a higher credit rating.

Ramadhani Dau, Chairman of TanRe, said expansion of the firm’s investments was necessitated by the growth of the insurance market.

The local insurance market, he said, has been growing steadily at an annual rate of 15 per cent, which is considerably high when compared with other economic sectors.

Dau said that in the Tanzanian market, the company has a diverse mix of business sources trading with over 180 companies on the African continent.

Tan-Re said that it is trading with firms from across 46 markets in the continent, including Algeria, Angola, Bangladesh, Benin, Botswana, Burkina Faso and Burundi.

Other trading partners include Cameroon, Congo Brazzaville, Djibouti, Equatorial Guinea, Eritrea, Ethiopia, Gabon, Gambia, Ghana, Guinea, Ivory Coast, Jordan, Kenya, Kuwait, Liberia and Libya.

Others are Madagascar, Malawi, Maldives, Mauritius, Mozambique, Namibia, Nepal, Niger, Nigeria, Oman, Qatar and Rwanda.

Insurance Times | April 2015

There are also firms from Sudan, Senegal, Sierra Leone, Seychelles, South Sudan, Sudan, Tanzania, Togo, Tunisia, United Arab Emirates, Uganda, Zambia and Zimbabwe.

Tan-Re believes that having a diversified portfolio is critical to its strategy.

It fosters discipline, allowing the company to take maximum advantage of market opportunities as they arise, with the flexibility to decline underpriced business as conditions warrant.

From an underwriting perspective, Tan-Re saw a year-to-year improvement in its underwriting performance from 2009 to 2011, followed by a significant decline in 2012 and an improvement during 2013.

The company’s combined ratio has consistently deteriorated for three consecutive years, from 88.1 per cent in 2011 to 95.4 per cent in 2013.

The local insurance market has been growing steadily at an annual rate of 15 per cent, which is considerably high when compared with other economic sectors.

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Picture | Isaac Mwangi

Enko Capital acquires minority stake in Zambia’s largest private insurer

Enko Capital Managers (ECM) has acquired a minority stake in Madison Financial Services (MFS), Zambia’s largest private insurer.

By Mathew Madden

T

he Zambian firm, which listed on the Lusaka stock exchange last year, has benefited from impressive annual growth rates of 16 per cent over the past three years and generates revenues of up to $64 million.

It has nearly tripled its operating profits over the same period.

The funding, through Enko Africa Private Equity Fund (EAPEF) – a pan-African private equity fund managed by ECM – will further help to create jobs in the Southern African country.

Founded in 1992 as the first private insurance company in Zambia, MFS operates general and life insurance businesses, along with asset management and microfinance activities in Zambia, and a general insurance business in Tanzania. The group has a strong brand name and client base, ranking among the top three players in both general and life insurance. It operates 31

Insurance Times | April 2015

branches in Zambia and five in Tanzania, and employs about 400 staff in Zambia.

The company is recognized as a well-established player in Zambia’s insurance sector with a solid market presence, and is ideally positioned to meet the rapidly-expanding demand for a range of financial consumer products, including insurance, pension administration and investment services, property development, micro, small and medium enterprise loans.

“MFS is a high-quality business with a strong and diversified operating model coupled with an experienced management team,” said Ralph Gilchrist, a partner at ECM. Gilchrist said this would be a landmark first investment for the Enko Africa Private Equity Fund and a milestone for a long-term partnership with MFS. The firm said that it is looking forward to create value together and support the high growth potential of the

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insurance company.

Cyrille Nkontchou, managing partner at ECM, said this was the firm’s first investment in Zambia. He said the country had good growth prospects, strong macroeconomic fundamentals and had just witnessed a peaceful political transition.

Dr. Lawrence Sikutwa, group executive chairman of MFS, said that Enko had chosen to partner with MFS and he believed that Enko’s regional expertise and close engagement will contribute to enhancing further the development of the Group.

Sikutwa said that Madison Finance Company (MFC) had also received funding from the African Development Bank (AfDB), which through its private sector window had approved a $3 million line of credit to reach small and medium enterprises (SMEs) across a wide range of sectors including trade, agriculture, construction, manufacturing, and hospitality and services.

“The facility is expected to support at least 1,000 SMEs, including 500 female-owned businesses, over the project period,” he said.

According to Sikutwa, leveraging the medium tenure of the AfDB facility is expected to increase the average

loan size and tenure for SME clients, who can consequently invest towards enhancing their productive capacity and undertake capital investment, rather than using loans solely for financing of working capital.

In addition to the line of credit, MFC will benefit from technical assistance supported by the Fund for African Private Sector Assistance (FAPA) and governments of Japan and Austria.

Medium to long-term assistance The project falls under the AfDB’s Africa SME Programme. Approved by the AfDB Board of Directors in July 2013, the Africa SME Programme is a four-year, $125-million funding programme combined with a $3.98-million technical assistance package granted by FAPA. The goal of the Africa SME Programme is to provide medium to longterm finance and technical assistance in order to address constraints faced by financial institutions and their SME clients across Africa.

The Africa SME Programme will avail further longer-term resources to thousands of SMEs, including businesses owned by women and youth, thus contributing to job creation, poverty reduction and inclusive growth on

the continent.

The Fund for African Private Sector Assistance (FAPA) is a multi-donor thematic trust fund that provides grant funding for technical assistance and capacity building to support implementation of the Bank’s Private Sector Development Strategy.

The governments of Japan and Austria, the African Development Bank, and the Austrian Development Bank are the contributors to the fund, which has to date provided $42 million to 47 projects across the African continent.

The FAPA portfolio includes regional and national projects in sectors such as business-enabling environment, financial intermediation, infrastructure, trade, and micro, small and medium enterprises.

MFC is a rapidly growing financial institution targeting local SMEs in Zambia by offering various financial products and services such as term loans, leasing, invoice discounting and insurance.

The firm is gradually increasing its SME portfolio share, targeting 30 per cent by the end of 2015, with plans to reach 40 per cent by 2016. It aims to serve up to s6,000 Zambian SMEs by 2017.

A busy shopping centre in Nairobi. The Africa SME Programme will avail long-term resources to thousands of SMEs.

Picture | Isaac Mwangi

The goal of the Africa SME Programme is to provide medium to long-term finance and technical assistance in order to address constraints faced by financial institutions and their SME clients across Africa.

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New port facilities ar higher container tra

dabaniwe uhimbi, a senior official in the inistry of Transport, ublic ervice and uipment in Burundi, says that although ports are capital intensive infrastructures, they are associated with wide economic impact.

BY VICTOR KAREGA

Insurance Times | April 2015

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re needed to handle affic, Burundi says

R

uhimbi said that there are numerous expectations by the public sector, which often provides substantial capital investments, to see concrete and measurable economic impacts and benefits resulting from these investments.

According to Ruhimbi, the existing literature is relatively scarce about the formal impact of ports on East and Central Africa’s regional development. “Economic impacts concern the wide range of changes brought by infrastructure projects, while economic benefits tend to be directly measurable impacts in terms of a monetary value,� he said.

Port forecast models are rarely accurate and regularly provide erroneous assessments, he said, adding that the estimation of economic impacts of port investments is an inexact field, which focuses on the effectiveness of transport infrastructure as a catalyst of indirect and induced benefits.

Seaborne trade has increased substantially, in part because of the massive redistribution of manufacturing to low cost locations and in part because of ongoing economic growth. This underlines the growing importance of logistics to organise the resulting complex distribution system.

The maritime and port industry is increasingly controlled by large shipping companies and terminal operators, who have engaged in strategic alliances as well as mergers and acquisitions.

Their goal is to provide a high level of vertical and horizontal integration, which is improving the performance of the port transport chain.

This has in turn led a number of ports to set up inland terminals, Ruhimbi said. Port developments have also become more capital intensive, while relying on less labour and consuming

Insurance Times | April 2015

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more land.

Heiko Ifland, a senior consultant at Germany-based railway consulting and engineering firm Railistics, said the imperatives of maritime shipping companies have been felt on ports as they increasingly tend to compete to attract traffic, particularly since hinterlands tend to be more contested.

Ifland said that the industry is expecting lower tariffs and lower port times in light of a highly competitive environment and low profit margins.

“Ports acting in a monopolistic fashion are finding themselves with less leverage, with a negative impact on their activity and regional economies,” he said.

According to Ifland, a spatial framework of the port is also changing as many port areas have seen the relocation of port industries to new sites, either within the East and Central Africa region or to other countries altogether.

The changes have been associated with a dislocation of the relationships of many ports with their localities and regions. This has been labelled as port regionalisation.

While the port remains a strategically important infrastructure, its economic benefits are less directly apparent within the community, with weaker but more complex relations at the regional and global levels.

The impacts of port infrastructure investments are based upon a positive influence of port throughput on local economic development.

However, evidence across the world underlines that this influence is weak, with elasticity levels between throughput and employment typically below 0.05.

Poor-performing ports represent a missed opportunity – and wasted resources for the creation of added value and jobs for the region.

This elasticity is among the weakest in the transport sector, mostly in regard to airports – the infrastructure with the highest elasticity.

Port infrastructure investment projects are critical when a port is nearing its operational capacity, said Ifland, adding that a lack of investments would lead to congestion and undermine the competitiveness of the country and region as a whole.

There is also a need to ensure the transparency of financing and accounting systems in ports in order to be able to verify that public funds are well spent.

According to experts, ports expand the market opportunity of both national and international firms.

By expanding the market areas of firms, ports increase competition, resulting in lower prices for the consumers of port traffic.

These involve all sectors of economic activity, including manufacturing firms, heavy industries, resource extraction industries and retailers.

Insurance Times | April 2015

A peep into the hellish life of a single father This is the true story of a young man whose wife died of cancer.

Thereafter, he led a miserable life with his only son. Life was hard, and he considers his experience a source of encouragement to other young men facing a similar situation >>

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it became very annoying after a while.

Many single mothers I know tell me about how hard it was to find a partner due to their commitments. I agree.

It is hard! There seems to be an insight that men with kids have it easier, but that is nonsense.

Usually this would go like this: “Oh, you have a kid?” Half of my dates

By Staff Writer

M

y son’s mother passed away three days after his birth. When we knew she was expecting, we had to decide between taking care for her cancerous condition or the infant, and fortunately she made that difficult decision for us. For this reason alone, my son is more to me than I can possibly explain. He has become what he is today because of her sacrifice.

At the beginning, it was hard. Single mothers have a hard enough life, but single fathers go through the really stormy waters. Many support programmes are customized to cater for single mothers, a lot of books are written from a female perspective and both employers and society look at single male parents with a different perception.

Since I cannot breastfeed, I had to make a decision between feeding formula and finding a surrogate. I opted for a surrogate and while women have access to tools to assist them, men do not. Walking into a hospital as a man and asking for a funnel machine got me the weirdest looks.

Changing my son on the go was another issue. Many child changing stations are inside the female lavatories, so I had to carry a tarp and often change him one-handed when there was no surface to work with.

Being a single man with a small child raises many more flags than being a single woman. More than once, I was pulled aside by women because I carried a two-year old throwing a temper tantrum on my back. While I appreciate the diligence of women and their screaming,

“With single mothers, most people think the cause was accidental pregnancy; with single fathers they all assume a misfortune.”

lost interest. “What happened to the mother?” “She died” – mood ruined, be lucky if you get a second date with someone who doesn’t mind nursing you and your son from bachelor hell.

I have been in some relationships since the death, mostly superficial.

Until very recently, I was more or less happy with this. At the moment, I am heavily rethinking and contemplating different situations. “We will see!” Three years of this have built quite a shell around me. I have let that shell down, recently, and the assault was raw and painful. I know it was worth it, even though I made some terrible mistakes because of it.

I am extremely fortunate in some ways. I have people who consider my son family at this point and will care for him as much as they can while I am at work or following other pursuits. In fact, he considers them his parents, too. But because this is not a romantic or biological link, there is always a chance of this changing and I am well aware of it.

Society has a hard time with single dads. As one of my single mom friends once said, very sadly, “With

single mothers, most people think the cause was accidental pregnancy; with single fathers they all assume a misfortune.”

We are a rare breed and as much as we try to make relationships about us, both professionally and romantically, our kid comes up much more often than if we were female.

Mostly out of curiosity, of course, but it gets old fast.

I always carry my son’s birth certificate with me when we go to recreation areas. A random single man sitting on a park bench watching kids play will get the cops called. After the first time, I started carrying the birth certificate. I have used it quite a bit since.

I should clarify this. I am heavily tattooed and I am a cross between a long-haired Harley driver and disjoint professor. I don’t wear suits, ties, even polo shirts, and the most expensive set of pants I own is a pair of jeans. I also live in a street known for its vigilance and zeal.

I spent more than a year trying to find more single fathers in my area and connect with them. Almost everyone I have met that way is, years later, still facing issues; many are still single and few could maintain their job. While at it, it is much, much, harder to get assistance if you are male.

It takes me a while before I allow romantic interests into my home and to meet my son there. Women seem to have an easier time making a case for this; I am usually looked at like someone who has something to hide. I am more comfortable, at least in the beginning, to meet her somewhere else and spend time at her place than have her come into my house.

This is not because I distrust her or because I have something to hide, but it takes a while for me to be comfortable with a new partner. This is the same on both genders, but men get looked at differently for it.

But! And here it comes – I would not, for one second, trade my situation for anything. Seeing my son grow up, watching him learn things, hearing his first coherent sentences with the right tense and inflection, hearing the “I love you, daddy” as I put him to bed, all that makes for a life that I would trade nothing else for. Never, ever!

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Advertorial

How I Read Your CV Reading your CV is an important part when searching for the perfect candidate.

Here are three things for both employers and employees to look out for when it comes to reading and writing a CV.

The Gap Year It’s common knowledge that a gap in a CV raises some eyebrows but that doesn’t always have to be the case.

My advice to employers is; they don’t have to be too hasty. There are many good reasons as to why people should have a gap in their CVs. Perhaps it’s a returning mum who is now ready to focus on her career, therefore as employers we cannot discriminate this and so we should not write-off these kinds of candidates straight away.

Explaining gaps in your CV can be a little bit tricky since many people are already frightened form the very beginning.

I meet a lot of candidates who hav1nis so you have to be natural – don’t blag it! Whatever the answer is; be open, be honest and make sure you reflect it in a way that doesn’t make you look irresponsible.

Beware of the Hoppers!

“Hoppers” is the name I’ve given to people who are always jumping from job to job. When you’re first starting out in your career, I agree you should be gaining as much experience as possible. However, if you go from competitor to competitor and spend a maximum of six months in a job, I will start to question how loyal you will be to my brand and how much you will value the investment I put in to developing you.

It is very important for candidates to stay in a job for more than two years. It is usually true that people who are not committed can’t hold a job for a long time.

Understanding Soft Skills I am interested in soft skills. I hire people for their overall character, not just their academic qualifications. Illustrating these skills is vital to me because I want to find someone who I’m confident with and will fit in with the company’s culture. To do this, I’d suggest using real-life examples that show how you have used your soft skills.

Insurance Times | April 2015

Every employer needs to be able to recognise soft skills in a CV and every potential employee needs to illustrate them effectively. So if you’ve been part of a sports club for the last few years, tell me and I will prove you’re a team player. If you’re a stickler for timekeeping, tell me.

I’ll be glad to know you’re efficient. In other words, it is crucial to keep track of your achievements up to date.

Finally, I think I speak for all employers when I say this, “Make sure your personality shines through! Reading a CV should leave me wanting to meet you, it shouldn’t bore me.”

Forget the ordinary jargon because I want to know what you can bring to the table which nobody else can. Show me how you want the job more than anybody else.

The worst mistakes you can make in an interview Love your interviewees or hate them; they are a very important part of your job search and there is simply no avoiding them. I’m not one for ‘hand holding’ a candidate through the interview process. I’ll give some advice and tips as any recruiter does but a lot of the onus should be on the interviewee to ensure that they are completing the right research and ensuring they maximise their chances of being successful.

These are cardinal sins when interviewing, yet sometimes candidates just won’t spend as much time on their delivery as they do on research.

v Poor presentation Turning up to an interview with messy or even worse dirty hair which would be better use as a birds nest are unacceptable. Take some time in your appearance and ensure you’re presenting yourself in a way which is appropriate.

v Ignoring the dress code Don’t shows up to an interview dressed like a slob. I can’t tell you how many driven or brilliant people I interview that I would never hire because they didn’t spend ten minutes to dress well or put themselves together for an interview. How are these people going to dress after they got the job? Dress to impress.

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Advertorial v Poor body language I once interviewed a candidate who for the entire time was slouched in the chair as if he had lost all ability to sit up and was always not maintaining eye contact.

Eventually, I mentioned this poor body language to him.

He soon collected his things and left in embarrassment.

Keep in mind that a poor and negative body language is detrimental to your interview. Don’t do it.

were slightly worried if this candidate was serious,

or just really bad at trying to be funny. Ensure your answers are clear, concise and that you’re professional.

v CV spelling mistakes There is no excuse to have these. It’s very important to write a CV and one of the key things is that you spellcheck it.

v Answering the phone

v Work history issue

Phones are to be off, in a bag or coat pocket. If you care more about what your friends had for lunch, then you probably aren’t interested in the position you’re interviewing for. You should tell your family and friends you’ll be in an interview so if it is an absolute emergency then they can cover it until you’re out.

Job hopping is one of the main culprits of having issues. If a candidate changes job every six months, it’s a concern that either they left off their own back, or they didn’t pass their probation. For any employer, having a number of jobs in quick succession looks bad and raises questions around your commitment to the employers you’ve had previously.

v Rude behaviour This comes in a variety of ways, from over-familiarity and showing too much personality to being arrogant. It’s important for you to show who you are in an interview, but an inappropriate joke your friends would find funny is possibly not right in an interview situation.

Are you looking for an opportunity for your next job?

v A limp handshake An adequate handshake is something you can practice at home and it needs to be firm, dry (sweaty palms aren’t nice) and with conviction.

Contact CVPEOPLE AFRICA

v Chewing gum Please just don’t do it. Fresh breath is a must but do take the gum out and dispose of it. Another point with this is, make sure that those who smoke do not smoke before the interview. As a former smoker, I get that passion to calm those last minute nerves but we forget on how potent that nicotine smell can be and it can be off putting to those non-smoker interviews.

v Unusual comments I once had a candidate who was asked by one of my clients however they overcame objections. The candidate replied ‘it’s like a wall, I like running through walls, I do it daily although I now suffer migraines and have to go to the doctors weekly to make sure I’m not doing damage’.

When my client told me this answer, they genuinely

Address : Plot 336, Kinondoni Rd, Opposite Togo Tower- 2nd Floor Phone : +255 687751168, +255715500164/5: Email: jobstz@ cvpeopleafrica.com

Tanzania|Zambia|Uganda|Zimbabwe.

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The roof of this block of flats in Juja near Nairobi was blown off during heavy rains early this year. In 2014, there were significant losses from both natural and man-made catastrophes.

By Mathew Madden

$33b global insured losses the lowest in 6 years

G

lobal insured losses in 2014 were approximately $33 billion, a dramatic drop when compared to the historic insured losses seen in 2011, which totalled $125 billion. This makes last year’s losses the lowest since 2009.

The latest Global Catastrophe Review shows that although insured losses for 2014 were among the lowest recorded in years, there was still a powerful impact and significant losses from both natural and man-made catastrophes.

Dr. James Waller, a research meteorologist at Guy Carpenter & Company, LLC, a leading global risk and reinsurance specialist, said that notable insured losses from around the globe included the 2014 February snowstorms in Japan, hail and windstorms in Europe, severeflooding in the United Kingdom and a cold, stormy winter in the eastern half of North America.

Waller said that in total, insured losses in Europe, Africa, and the Middle East accounted for about 21 per cent of global insured losses in 2014.

According to Waller, the hail and windstorm Ela hitting Germany, France, Belgium and Austria, created insured losses of around $2.8 billion.

“The UK saw plenty of coastal erosion and widespread and persistent inland flooding, with December to January experiencing the highest rainfall totals since record keeping began in 1910,” he said.

In the UK alone, insured losses are estimated around $1.8 billion. Asia and Aus-

Insurance Times | April 2015

tralasia natural and manmade catastrophes in 2014 accounted for 23 per cent of estimated global insured losses for the year.

In the Northwest Pacific Basin, no new tropical cyclones developed in the month of August, which has not occurred in the past 60 years. Nevertheless, five tropical cyclones affected China throughout 2014.

Guy Carpenter said that the strongest of the five, Typhoon Rammasun, was the most impactful storm to hit the region since 1973, bringing heavy rainfall, flooding, and wind to China, Vietnam, and the Philippines.

Malaysian aircraft Carpenter said that while the estimated insured losses from Rammasun totalled $250 million, the estimated economic impact is $4.6 billion.

“The most costly event affecting the Asia region, however, was caused by two big snowstorms that hit Japan in early 2014,” said GC. The snowstorms accounted for $3.1 billion in insured losses, disrupted operations for a large number of businesses, and caused hundreds of thousands of power outages, as well as a number of fatalities and injuries.

Outside of natural catastrophes, 2014 also saw the disappearance of Malaysian Airlines Flight 370 in March, the loss of Malaysian Airlines Flight 17 which was shot down over Ukraine in July, and an AirAsia flight that crashed into the sea near Indonesia in late December.

The Americas comprised 57 per cent of global losses in 2014, as compared to 48 per cent in 2013. In the US and Canada, the frigid winter caused

Picture | Isaac Mwangi

Insurance catastrophes decline

$2.3 billion in insured losses alone.

Despite several tornadoes across the southern US, hail reports in 2014 were below the 2005 to 2013 average.

Guy Carpenter noted: “Earthquakes also played an important role in insured losses for the year, with magnitude 7.3 and 6 tremors present along the Nicaragua-El Salvador border and in the Napa Valley of California, respectively.”

The North Atlantic Basin experienced six hurricanes in 2014, one of which hit the mainland of North America.

In the East Pacific, 2014 was the most active hurricane year since 1992, with 16 hurricanes and nine major hurricanes impacting the region.

The most impactful hurricane of the season, Odile, struck the Baja Peninsula of Mexico and caused an estimated $1.6 billion in insured losses.

Notably, tropical storm Iselle made land fall on the Big Island of Hawaii, the first time this has happened in more than 50 years.

Meanwhile, Hurricanes Fay and Gonzalo gave no respite to Bermuda, downing trees and power lines across the island in quick succession.

“Though the eye of Hurricane Gonzalo passed directly over Bermuda, exceptional damage was offset in part due to the area’s resilient building codes,” said Waller.

“Although 2014 was a relatively quiet year for catastrophes, events such as Odile and Gonzalo reaffirm the importance of continued education and the implementation of innovative risk management strategies to mitigate the losses experienced from a catastrophe,” he added.

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EA hit by severe shortage of actuaries

The University of Dar es Salaam. Lack of a sufficient number of actuaries is compromising the insurance industry in Tanzania.

By Mathew Madden

Lack of experts hurting sector’s competitiveness.

A severe shortage of insurance professionals, especially in certain key disciplines such as actuarial science, is compromising the competitiveness of the insurance industry in Tanzania.

According to Peter Ilomo, chairman of the National Insurance Board of the Tanzania Insurance Regulatory Authority (TIRA), this shortage is due to lack of local professional institutions which offer relevant qualifications.

Over the years, Tanzania’s insurance industry has continued to play a strategic role in the national economy by providing underwriting capacity and contributing towards mobilization of financial resources for sustainable economic development of the country.

This has created a need for the industry to improve its competitiveness in the market, seven years since liberalization was introduced into the industry.

However, the liberalization of the insurance industry, which sought to transform it into a sound and competitive agent for mobilization of national savings and channeling of development investment, has for years faced many challenges.

Ilomo says the government is now taking measures to address the issues afflicting the sector.

Corrective measures, he said, needed to be taken for the industry to remain healthy. Such measures

Insurance Times | April 2015

are vital for profitable business operations and general sustainability of insurance business in the country.

This has made TIRA to continue collaborating with higher learning institutions, including the University of Dar es Salaam, with a view to offering a Bachelor of Science degree in actuarial science.

It is anticipated that graduates in actuarial science will be absorbed by the insurance industry as well as other employers in the wider financial sector.

Sandeep Chavda, the Secretary General of the Actuarial Society of Tanzania (AST), says that the liberalization of the insurance industry had stimulated demand for actuarial expertise in the country.

Chavda said that this has forced the few professionals available to establish the Actuarial Society of Tanzania so as to create awareness among the general public and the industry at large.

According to the AST Secretary General, there are currently no reliable statistics on the number of actuaries in Tanzania, and there is also no proper definition of an actuary in use.

“The profession is still at an infant stage and is among the least recognized in Tanzania,” said Chavda.

AST is currently seeking more members to join the society and trying to establish an accurate num-

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Picture | Isaac Mwangi

ber of the actuarial professionals in the country.

So far, the statistics available on the numbers of actuarial professionals have been obtained through peerage.

The peerage statistics shows that there are six actuarial students who have done the course and 18 who are currently studying at various higher learning institutions in the country and overseas. Those involved have undergone postgraduate studies at Masters level and most pursue the qualification process through institutes and faculty in the United Kingdom.

“But there is no sole qualification process recognized by Tanzania authorities,” said Chavda.

The bias is towards recognizing those actuaries who have undergone training using the British System, regardless of the fact that there has been work done by actuaries from Sweden and the International Labour Organization (ILO), with educational background from France and Sweden.

The society says that career development for actuaries in Tanzania is somehow limited. Most actuaries work at a junior levels and there is a lack of experienced actuaries to offer guidance and advice.

It is said that there is potential for career growth of professionals – through progression to a Fellow – with any reputable international organization.

“In Tanzania, practice areas are still traditional ones – pensions, life insurance and general insurance,” AST said, adding that there are a few professionals working in the health insurance and investment fields.

The actuaries are recognized in legislation, and some laws do provide some of the tasks to be performed by actuaries, including the Public Service Retirement Benefit Act, which requires Actuarial Valuation to be done at least every five years by an actuary.

Among others, AST seeks to play an active role in the teaching of actuarial science, consider the actuarial aspects of existing and proposed legislation, and take action as may be considered desirable.

The society will provide a forum for discussion on actuarial matters, assist in shaping actuarial aspects of legislation, and make recommendations.

It is also anticipated that in the long term, AST will find ways of promoting the profession to the wider public.

The society also hopes to act as a link between different universities and exchange programmes for members to get work experience in different countries.

The society was formally registered in January 2008. The idea of forming it was conceived way back in 2003 but the registration could not go ahead as planned due to the stringent registration requirements at the Ministry of Home Affairs.

Career development for actuaries in Tanzania is somehow limited. Most actuaries work at junior levels and there is a lack of experienced actuaries to offer guidance and advice.

Graduands and guests at the University of Nairobi graduation ceremony in December 2014. TIRA is collaborating with higher learning institutions in the training of actuaries in Tanzania.

Insurance Times | April 2015

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Insurance Times | April 2015

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Why insurers remain confident It’s an economic boom for $50b Middle East, North Africa markets

By Jamila Abdalla

The offices of the apex organization of the private sector in the region, the East African Business Council, in Arusha, Tanzania.

While the region’s average income per capita is similar to the global level, insurance penetration remains extraordinarily low, with premiums accounting for a mere 1.3 per cent of GDP, a fifth of the global average.

This gap is narrowing, however, as MENA insurance markets outpace regional GDP growth.

Between 2008 and 2013, total non-life and life insurance premium volumes in the region expanded from about $30 billion to more than $50 billion.

Going forward, Swiss Re expects premiums to grow at an inflation-adjusted 5.5 per cent for 2015 to 2016, higher than the International Monetary Fund’s economic growth forecast for the region.

Major projects The executives polled in the MENA Insurance Barometer see the region’s strong economic and direct insurance market growth as its most important current strength, followed by a massive pipeline of major infrastructure and construction projects and a relatively moderate natural catastrophe exposure.

Personal lines are viewed as the key future opportunity of MENA insurance markets, due to population growth, legislation and, partially, improving rates.

The prospect of additional major infrastructure and construction projects in the Gulf region ranks second. Low penetration levels are the third most frequently mentioned opportunity.

The Barometer found that 86 per cent and 34 per cent of executives polled view current prices in MENA commercial and personal business lines, respectively, as being below the average of the past five years.

About 81 per cent and 89 per cent, respectively, expect rates of commercial and personal lines to remain stable or improve over the next 12 months, very similar to last year.

However, in commercial and personal lines, the share of those expecting rate increases has grown from 19 per cent to 30 per cent and 21 per cent to 37 per cent, respectively.

Rate expectations remain moderately positive as prices appear to have hit the bottom and regulators continue to take supportive action.

Insurance Times | April 2015

Picture | Isaac Mwangi

C

onfidence prevails in the Middle East and North Africa (MENA) insurance markets as insurers expect regional premiums to outgrow Gross Domestic Products (GDP) and rates to finally stabilize or even start rising.

Shashank Srivastava, chief executive officer of Qatar Financial Centre (QFC) Authority says that MENA Insurance Barometer is strong, based on the fact that the region’s strong economic fundamentals remain intact.

Srivastava said that insurance penetration is on the rise, demographics are favourable, and the ability of most Gulf countries to withstand short-term volatility in oil pricing is strong.

“The most recent survey is based on 37 in-depth interviews with senior executives of regional and international reinsurance companies and intermediaries, who have shared their assessment of the current state and nearterm prospects of the $50 billion MENA insurance markets,” he said.

According to the International Monetary Fund, the region’s economy is expected to grow at an annual inflation-adjusted rate of 4.1 per cent from 2014 to 2019, slightly ahead of the projected global average of 3.9 per cent per annum.

Although political instability is prevalent in countries such as Iraq, Syria or Libya, conditions in others such as Iran and Egypt are expected to improve.

In the Gulf Cooperation Countries, the current pipeline of investments into infrastructure and construction projects comprises projects in the magnitude of $690 billion to be awarded from 2015 to 2018.

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MOVIE REVIEW

WILD CARD (2015) N

ick Wild (Jason Statham) is a recovering gambling addict, who takes odd jobs in Las Vegas to support his addiction. He accepts a job by self-made millionaire Cyrus Kinnick (Michael Angarano), to show him around Vegas and provide him with protection while he gambles.

While eating at a dinner, the waitress gives Nick a note from Holly (Dominik Garcia-Lorido) – who asks him to stop by her house. At her house, Holly explains to Nick that she had a date the previous night at ‘The Golden Nugget’. After the date, she was brutally raped and beaten by three unknown men in their hotel room. Holly tells Nick that she wants him to find out who they are so that she can sue them, though unbeknown to Nick, she plans to take revenge.

Nick discovers that the man responsible for raping Holly is a gangster called Danny DeMarco (Milo Ventimiglia). It is also revealed that after raping and beating Holly, DeMarco had his two men dump her in a hospital car park. Nick goes to the hotel to confront DeMarco, disguised as someone sent by another criminal. The confrontation turns out to be unsuccessful but Nick defends himself. DeMarco and his men are tied up and Nick calls Holly. After arriving at the hotel room, Holly contemplates castrating DeMarco, though after DeMarco breaks down and begs for forgiveness, Holly decides to take $50,000 from DeMarco’s desk and leave. Outside the hotel, Holly splits DeMarco’s money with Nick, and decides to leave Las Vegas. After Holly departs, Nick decides to take Cyrus to a casino and gamble with his half of DeMarco’s money. He suddenly has a winning streak, and eventually has a total of $506,000 in casino chips. When cashing in the money, Nick has a sudden anxiety attack and tells Cyrus that even though the $500,000 will last him for many years; it isn’t enough to

last him for a lifetime. After going back to the casino tables, Nick loses all of his money in a single bet. When leaving the hotel, Nick is attacked by DeMarco’s men, and has to fight his way out of the casino.

The next day, Nick goes to a meeting with Baby (Stanley Tucci), who happens to be the mafia boss of Las Vegas. It is revealed during the meeting that Baby has received a complaint from DeMarco.

DeMarco claims that Nick broke into his hotel room, pistol-whipped him, and killed two of his men – all to fund his gambling addiction. Baby warns Nick that if he cannot prove his innocence, he will have to be killed for assaulting DeMarco and for murdering two members of the mafia. Nick tells Baby that DeMarco is lying, explaining that DeMarco had raped Holly, and had killed two of his own men because they had witnessed him pleading for his life. To prove he is telling the truth, Nick tells Baby that when Holly considered castrating DeMarco, she had cut the side of his penis with garden shears. Baby asks DeMarco to pull down his pants and prove Nick wrong, but after he refuses, Baby concludes that DeMarco is lying and lets Nick go free.

After the meeting with Baby, Nick goes back to his local diner for some coffee. At the diner, he is confronted by Cyrus. Cyrus offers Nick $500,000 and a plane ticket to Corsica, but only if he helps him ‘become’ a man. While Nick is considering the offer, DeMarco and his men appear in the diner.

Cyrus then starts singing, creating a distraction for Nick. After realizing that DeMarco won’t stop until he is dead, Nick finally kills DeMarco and all of his men with two eating utensils. Before Nick leaves, Cyrus gives him a cheque for $500,000 and the plane ticket, telling him that he has earned it. After accepting the gift, Nick and Cyrus say goodbye to each other. Nick then leaves Las Vegas for good.

Insurance Times | April 2015

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Insurance Times | April 2015

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Tiger Woods I

n 2009, Woods took a hiatus from golf, returning in 2010, but as his personal life took a turn for the worse, the golfer was not at the top of his game. From 2001 to 2012, he was cited by Forbes as the highest-paid professional athlete.

In 2012, Woods won the AT&T National, becoming the second-leading golfer for Professional Golfers’ Association of America (PGA) wins—beating Jack Nicklaus’s long-held record for the spot. Woods as the only child of Earl Woods and Kultida Punsawad, was identified as their talented son at an unusually early age. “The young boy was only three at the time, and he was quickly hailed as a prodigy, or a child with remarkable talent. Not long after that, when he was five years old, Woods was featured on the popular television show. That’s Incredible!” Earl Woods reports.

His parents say he was playing with a putter before he could walk. Woods was gifted not only with exceptional playing abilities, but also possessed a passion for the sport.

Woods first gained national attention on a talk show when he beat the famed comedian and avid golfer Bob Hope (1903) in a putting contest.

Tiger’s father has never denied that he devoted his energies to developing his son’s talent and to furthering the boy’s career as a golfer. During practice sessions, Tiger learned to maintain his composure and to hold his concentration while his father with determination made extremely loud noises and created other distractions.

All the while, Tiger’s mother made sure that her son’s rare talent and his budding golf career would not interfere with his childhood or his future happiness. His mother was a native of Thailand and passed on to her son the spiritual ideals of Buddhism, an eastern religion that seeks to go beyond human suffering and existence.

In many ways, Woods grew up as a typical middle-class American boy. He developed a taste for junk food and affection for playing video games. He also spent a fair share of his time joking around in front of his father’s ever-present video camera. As for playing golf, there is no question that the sport was the focus of his childhood.

He spent many hours practicing his swing and playing in youth tournaments. When he was eight years old, Woods won his first formal competition. From that point he be-

Insurance Times | April 2015

came virtually inevitable, winning trophies and breaking amateur records everywhere. Media accounts of the boy phenomenon had reached nearly legendary proportions by 1994, when he entered Stanford University as a freshman on a full golf scholarship. During Woods’s first year of college, he won the U.S. Amateur title and qualified to play in the Masters tournament in Augusta, Georgia, in the spring of 1995. Although he played as an amateur, Woods’s reputation preceded him. By 1996, Woods had won three U.S. Amateur titles, one after another, an amazing accomplishment in itself. Woods was only 20 years old, and in August of 1996, he decided to quit college in order to play professional golf.

Four months later in December, Woods celebrated his twenty-first birthday. He marked the occasion with a legal name change, from Eldrick to Tiger. Woods had been called Tiger by his father even as a youngster. The nickname stuck, and Woods had always been known to his friends and to the press, as Tiger. It soon became evident that he was destined for success.

Sports Illustrated named him 1996 “Sportsman of the Year,” and by January of 1997, he had already won three professional tournaments. He was a media sensation. Only eight months into Woods’s professional career, he played in the prestigious (im- portant and famous) Masters tournament held at Georgia’s Augusta National Golf Club. The Masters title is perhaps the great- est honor in the world of golf. In addition to hefty prize money, first-place winners are awarded a green blazer to symbolize their membership among the top golfers in the world.

When the tournament was over, Woods had made history as the youngest person ever to win the Masters title. His score was an unprecedented 270 strokes. His victory margin set another record, twelve strokes ahead of the runner-up.

This achievement was enhanced by the fact that Woods was the first man of colour ever to win the title. He accepted all of these honours with grace and humbleness and gave tribute to the African American golfers who came before him and helped pave the way. He also honoured his mother.

Picture | Christopher Hanewinckel

Professional and legend golf player Tiger Woods was born in Cyprus, California, on December 30, 1975. Woods won the U.S. Masters at Augusta in 1997 with a record score at the age of 21. Being the youngest man and first African American he earned the title.

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Insurance Times | April 2015

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Fashion

A glimpse into Nshuti’s world Insurance Times | April 2015

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Dear Readers,

I

am Godwin Nshuti, a Ugandan model, signed to RADG International Model Management.

As a face for African International Fashion icon Sylvia Owori, I also do both commercial modelling advertising for Telecom companies like Vodafone, and runway modelling around East African cities like Kigali in Rwanda and Kampala in Uganda during fashion weeks.

I am a cheerful person, in love with fashion and style. Being a sports fan, I like basketball and boxing. My favourite clothes brands are Zara man, H&M and Levi Strauss.

As a sucker for sports apparel such as sneakers (trainers), I like wearing Nike and Adidas shoes.

My lifestyle is unique because I am really diverse, funky, cool, uptown and vintage.

I believe that some fashion tips for guys are here to stay! I suggest that every guy should own V-neck T-shirts, chino pants and chuck Taylor converse shoes.

These never go out of style and can be worn anywhere at any occasion. I would recommend a fedora hat also as a hip for both rural and urban men!

I had the zeal for modelling since I was at high school. I got motivated by my friends and family who urged me to try it out because of my height and appearance. I easily got along with it.

A designer known as Anna Clare Lukoma, the owner of Lulu Fashion in Kampala, mentored and inspired me. She urged me to take modelling seriously and gave me my first runway presentation and fashion photo shoot for her clothing line at the Bayimba International Festival in Kampala.

This is the event that put me in the realm of the fashion and modelling industry.

Hopefully, I will be participating in both the Mercedes Benz Africa Fashion and Swahili Fashion Week in the near future, with an ambition to expand my career as a model all over the world and in Africa in particular. “Becoming a world fashion model is my dream and it has to come true!�

Insurance Times | April 2015

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UAP insures Musician Diamond Platnum to cover house reconstruction

“Thanks to UAP because my brother can now continue with the construction of his building with a happy mood.”

Esma Platnumz

Insurance Times | April 2015

By Mwirabi Sise

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asibu Abdul Juma popularly known as Diamond Platnumz, the top East African musician has secured Tsh. 14, 019,060 payment from, the Tanzania based insurance firm Union des Assurances De Paris (UAP) to cover for the damaged wall of his maisonette.

The wall of the building collapsed recently following a heavy down pour in Dar es Salaam City.

Esma Platnumz, the young sister of Diamond Platnumz said said that having Insurance is a good thing and that without being ensured by UAP Diamond Platnumz could incur heavy cost.

Esma said that the insurance cover from UAP has enabled Diamond to build a maisonette that is very expensive.

“Thanks to UAP because my brother can now continue with the construction of his building with a happy mood,” she said.

The 26 years old top East African musician is a Bongo Flava recording artist and singer from Tanzania.

He is famous for his popular song ‘Number One’. He was in May 2012 invited to perform at the Big Brother Africa 7 eviction show in South Africa.

Diamond is considered prominent among his fans, and is said to be the most respected and ornamented Tanzanian artist at the moment.

The singer is among the highest selling Tanzanian artist of ringtones by mobile phone companies in 2013, as well as being among the artists earning the highest income in the African Great Lakes region’s music industry.

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Diamond’s house under construction

Insurance Times | April 2015