Itm july augost 2015

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From the MD’s Desk Dear Readers, TANZANIA HAS CONTINUED strengthening its base for the growth of the micro-insurance market despite obstacles owing to endemic poverty.

Micro-insurance refers to the availability of insurance facilities for lower-income households. If properly planned and intermediated, such products can play an important role in reducing the susceptibility of the poor, as well as presenting a profitable market for commercial insurers.

Even though the majority of Tanzanians live under the poverty line of $2.9 a day and the country has not achieved the thresholds set by the Millennium Development Goals that come to an end this year, there has been a momentous growth in the insurance industry. Indeed, the sector has witnessed a growth of 24 per cent, well above the average of 15 per cent for most developing nations.

During the 8th micro-insurance meeting, Izrael Kamuzora, Tanzania’s Commissioner of Insurance, said it was not an easy task to make headway in spreading micro-insurance among poor individuals.

Likewise, it is difficult telling a poor person to pay for an insurance package instead of buying bread to feed his family.

In the meantime, Kamuzora said, these poor persons own mobile phones and drive the cost of telecom transactions to go up. It is time the insurance industry penetrated this segment.

The Tanzania Insurance Regulatory Authority (TIRA) has established insurance awareness campaign initiatives focusing on poor business individuals and entrepreneurs so as to stimulate the market at the lower levels.

The key players in driving micro-insurance to the poor include microfinance institutions such as savings and credit co-operative societies, village community banks, and mobile phone service providers such as TIGO, Vodacom and Zantel.

Business groups being targeted include Small Industrial Development Organization operators, “mama Ntilie” (market women), taxi drivers, and bodaboda riders,.

Insurance Times | July 2015

A good reason for the positive growth of the sector has been the concerted effort put by the regulator and other stakeholders, over the past three years, to ensure that claims are settled on time. “It is rare to hear someone complaining over unpaid claims,” said Kamuzora.

Micro-insurance programmes must now aim at promoting the development and delivery of effective insurance services for low-income groups based in rural areas.

It should also be realized that micro-insurance in Tanzania is still at an infant stage, but TIRA is nevertheless trying hard to create an impact; this has involved the use of various techniques for disseminating knowledge to low-income earners.

The idea is to have good strategies that will make low-income earners in urban and rural areas see the need to obtain micro-insurance coverage.

The chairman of the Micro-Insurance Network, Craig Churchill, has pointed out the importance of micro-insurance in East African countries, especially taking into account that the region is vulnerable to climate change and related factors.

He has urged African countries to create a friendly legal framework for the micro-insurance sector to flourish and benefit the poor, who cannot easily be covered by traditional insurance schemes.

To date, there are nearly 220 organizations providing micro-insurance sensitization campaigns in Africa, with a growing interest to tap into the low-income market. But over 38 million of the insured people in Africa are concentrated in Southern and Eastern Africa.

In Tanzania, the micro-insurance sector is developing at a steady pace, with more than 3.3 million people covered, representing a growth of around 7 per cent in recent years. In a country of over 45 million inhabitants, there is still room for growth.

A significant micro-insurance will enable insurance companies to reach more of the marginalized poor in our midst.

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

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

SUBSCRIPTION RATES Annual rate: Tsh55,000 Ksh2,750 Ush82,500 RWF18,700 BIF38,500 ZMK126,500 6-month rate: Tsh28,500 Ksh1,450 Ush43,000 RWF9,700 BIF20,000 ZMK66,000

The Editor’s Note WHY IS TEAMWORK so important?

How do we go about improving it? Even more important, it is crucial for all the members of a team to understand the need to work together as one team. Collective effort translates into excellent teamwork, and that’s what leads to success.

Teamwork is one of the most essential qualities for the success of any organization. In the absence of teamwork, teams fail to perform to the best of their abilities.

Teamwork determines the success of any entity. So much has been written about teamwork that sometimes individuals know the theory, but fail to put it into practice. We normally see “an ability to work in a team” listed as one of the attributes in various resumes, but the fact is that teamwork as a quality has been used so sluggardly over the years that it has largely ceased to be what it stands for and has become a cliché. Theory without practice, of course, is of no good.

Teamwork Principles One of the first principles of effective teamwork is clarity as to what the team wants to achieve right from the outset. It is important that you view the team as an entity and have clearly articulated goals in place. In the absence of an objective, the team members may not be able to understand their responsibilities, which may cause ambiguity.

The team members should be willing to learn from each other. Some members may be excellent with the process, while others may require more time and guidance. Team members should not be hesitant in seeking help from the senior members of the team, who should in turn step forward to help the new members.

There should be two-way communication among team members about the roles that they are assigned, so that there is an understanding and appreciation of the effort put in by everyone. This is quite essential; a lot of times when things do not

Insurance Times | July 2015

work as planned, members engage in a blame game. If members are aware about the challenges involved in carrying out a task, they are more likely to appreciate each other’s efforts.

While some control over a team is necessary, it is important that the team is given a certain amount of flexibility in carrying out their tasks. Too much interference can affect the efficiency of a team and dampen the morale of the members.

One of the most important principles of effective teamwork is effective communication. This means that information is shared among all the members of the team and that rumour mongers are kept at bay.

Involving all team members in business strategy, too, helps in making them feel appreciated. Effective communication further calls for discussing matters of importance openly.

There should be an initiative to reward and recognize team members with exemplary performance. This will encourage others to follow suit and boost the values of teamwork.

Last but not least, there should be healthy competition among team members to outperform each other. In the absence of competition, a job may cease to become interesting and monotony can creep in, which would be detrimental to the team. So, it is important that the team members are provided with enough opportunities to grow in their professional lives.

There are no hard-and-fast rules, but the points mentioned here can prove effective when practised sincerely. As Henry Ford once said, “If everyone is moving forward together, then success takes care of itself.”

Cheerio !!

Mwirabi Sise MANAGING EDITOR

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Contents MAGAZINE 8

Opinion

With firms in various industries increasingly moving out of their core areas into other profitable ventures, insurance companies have good reason to be wary of banks

10 Deposit fund behind bank stability Growth is attributed to the injection of surplus fund amounting to $18 million, which was generated from operations in the last fiscal year.

» p.34

16 Funding integration East Africa’s private sector plans to establish a special fund that will inject $20 million into infrastructure projects

26 New Governor at CBK Coming at a time when the shilling is losing rapidly to the dollar, doesthe former IMF staffer have the magic wand the country needs?

» p.12

» p.29

57 The woes of migrants A billion workers are on the move around the world, but who will pick up the tab for their social security?

62 Betting bug bites Ugandans Football betting is now one of the most lucrative businesses in Kampala – and fans are ready to risk all they have

» p.41 Insurance Times | July 2015

8

Bancassurance is an ominous sign: Firms must diversify or die OPINION

By Anne Kiruku

The traditional insurance sector in the region has reason to be very afraid, especially considering the financial muscle of the new entrants into the sector.

THERE IS A growing frenzy in East Africa for diversification of profitable business activities by all sorts of companies, both big and small, as they seek to increase their profit margins.

This bug to penetrate new markets seems to be biting every company and every sector of the economy. And it is not just horizontal expansion of business activities to other available markets that is taking place, nor introducing innovations into core areas of a firm’s operations.

The latest diversification strategy by banks, for instance, seems to be an all-out battle for the growing insurance market.

The Kenya operation of Barclays Bank has now been awarded a bancassurance licence by the country’s Insurance Regulatory Authority, entering the market by purchasing a major stake in First Assurance Ltd. The bank will now be able to offer education, credit, life, and personal accident underwriting. The insurer will also offer funeral cover to immediate and extended families of insured persons. The bank is initially targeting its half a million customers through its 122 branches in Kenya.

Barclays Africa has life insurance cover in countries such as Botswana, Zambia, South Africa and Mozambique, and is planning to use Kenya as a launching pad into the East African region.

While competition has its advantages – especially for consumers – this foray by banks

Insurance Times | July 2015

into the sector could also sound the death knell of insurance firms that will not take radical steps to remain competitive.

The traditional insurance sector in the region has reason to be very afraid, especially considering the financial muscle of these new entrants into the sector.

This trend to penetrate markets outside a firm’s core operations is not restricted to banking and insurance. Equity Bank has diversified into the telecommunications industry through its recently launched Equitel Card.

The move has seen the bank battle it out in the courts with the telecommunications industry, with the bank finally getting a go-ahead from the courts.

The Nation Media Group, the largest media house in the region, operates a courier service. It has also attempted to penetrate the financial sector through the Nation Hela card.

Safaricom Academy Recently, Safaricom entered the education sector and launched its Safaricom Academy. The firm is already well established in the financial sector, which it entered with a bang about a decade ago through the M-Pesa innovation that has won accolades across the world.

The list of companies diversifying into new lines of business is endless. This has sometimes forced disruptive changes and realignments of business activities. The M-Pesa innovation by Safaricom, for example, revolutionized financial remit-

tances and brought to an end the era of postal money orders.

After initial opposition, banks and other players grudgingly accepted that they could not turn back the clock on M-Pesa, finally finding ways to incorporate the innovation into their own services.

The reasons why companies in East Africa are diversifying into new products and services outside their main core business are varied. They range from a need to increase their profit margin to opportunities that just present themselves. New challenges arising in their lines of business often demand solutions that the company converts into innovative business ventures.

Every company or sector that desires to remain competitive should actively seek to move into other profitable ventures. Failure to do so will see companies folding up, because a huge chunk of their markets will have been taken up by more aggressive entrants.

This is particularly true following the launching of the Tripartite Free Trade Area bringing together the Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC) and the Southern African Development Community (SADC). The market’s bigger, but only the best will survive.

Anne Kiruku writes on regional and business news from Nairobi. E-mail: annekiruku@gmail. com

9 Letters Support us, say insurance students THE ASSOCIATION FOR Insurance and Risk Management (IRMA) was started by students of insurance and risk management at the Institute of Finance Management in Dar es Salaam act as a bridge between students of insurance and other stakeholders.

It is also responsible for organizing the Career Day, an event by the Department of Insurance and Risk Management.

It is an event that showcases the innovativeness of the industry and creativity of the students of insurance and risk management, and is known as IFM Career Day. We hope to have your full participation and support for the young, future players in the industry.

Omary Aziz Chairman, IRMA Dar es Salaam

Forex: The common man’s paying the price of inaction

By Matthew Madden WHILE THE DECLINE of the shilling is good for exporters who make a killing, to importers it is the reverse.

The burden will usually be shifted to ordinary consumers through increased prices of all imported goods, thus cushioning importers against losses resulting from its depreciation.

Inflation and exchange rate depreciation are closely related over the long term, but can vary widely over the short term. For example, if a country expands the money supply, say through printing money faster than the economy itself is growing, the currency would be worthless both inside and outside the nation, causing both inflation and devaluation.

Exchange rates take into account not only current inflation, but also anticipated increases. Devaluation can also lead to inflation by forcing upwards the price locals would pay for imported goods.

At the domestic market, the pinch of devaluation is felt by all Tanzanians, who at the end of the day bear the brunt of surging oil prices caused by a weakening shilling, among other factors.

The same trend is reflected in all other imported goods and raw materials, which are

purchased using foreign currencies, mainly the US dollar.

As the shilling continues to depreciate, so does the purchasing power of millions of consumers, whose power to buy is dented by the skyrocketing retail prices at local markets.

Perhaps the most appalling thing is that everyone responsible for the situation seems comfortable with such pathetic performance of the shilling against major currencies.

Central Bank Governor Prof Benno Ndulu was once quoted stating clearly that BoT would not intervene by releasing more dollars to ease a shortage then being experienced, but would only deal with economic fundamentals.

To put things into perspective, the demand for US dollars and other major foreign currencies is higher than the supply at the local market – meaning that the price of buying these currencies – known as exchange rates – would go up as importers struggle to get enough dollars to import goods.

Today in Tanzania, you can travel with millions of dollars in your suitcase without any barrier, something that isn’t so easy in countries like South Africa, which controls 33 percent of Africa’s

economy.

While in South Africa one is never allowed to purchase things in US dollars, in Tanzania prices of many goods and services are pegged to the US dollar.

In Tanzania, according to BoT, the law allows a Tanzanian resident to hold foreign currency and also pay in foreign currency. The law allows one also to hold a bank account denominated in foreign currency, a major change enacted in 1992.

“You may quote prices in foreign currency but you can’t force anybody to pay in that currency,” Professor Benno Ndulu said.

According to him, when the shilling was depreciating every year, people made use of foreign currency – and especially the dollar – as a way of protecting their wealth so that it didn’t lose value when the local currency lost value.

“While many developed nations profess to be free marketers, they will sometimes intervene to change their exchange rate. For example, the US and Japanese central banks have coordinated actions to change the dollar-yen exchange rate,” wrote Sara Silver of Columbia University, in her paper, “Foreign Exchange Crises.”

The second alternative

for the Bank of Tanzania is “Crawling Pegs and Trading Bands,” whereby the pegged exchange rate moves slowly but in line with inflation. This can work well if inflation is mild and the exchange rate is relatively constant. Chile, Colombia, Ecuador and Israel have all maintained crawling bands.

The third alternative is the “Currency Board” – a legal framework ensuring that local currency is always backed by reserves of dollars or another strong currency, in effect making the two currencies substitutes.

In monetary terms, this prevents the government from printing money to finance government operations. The scheme is used by countries that want to maintain their own currency out of pride but actually subject themselves to the monetary policies of another nation.

Analysts predict further decline of the shilling. From a villager in Geita who depends on kerosene as his or her source of energy to a parent whose children’s schools fees are charged in dollars or a manufacturer who imports raw materials to create jobs and pay taxes, it is pain and anguish as the local shilling continues its downward march.

Insurance Times | July 2015

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Dar deposit fund grows to $94m amid stability in banking sector Growth is attributed to the injection of surplus fund amounting to $18 million, which was generated from operations in the last fiscal year.

By Mathew Madden

T

he Tanzania Deposit Insurance Fund (DIF) is projected to make a strong, record growth in the 2015/2016 fiscal year, in the process boosting the stability of risks by the commercial banking sector.

The fund was expected to have a balance of $93.24 million as at June 2015, increasing from $58 million in 2013.

The growth is attributed to the injection of the surplus fund amounting to $18 million, which was generated from operations in the last fiscal year.

Emmanuel Boaz, director of the Deposit Insurance Board (DIB), told Insurance Times that in the 2013/2014 financial year, DIB realized a total income of $20 million, which was an increase of 27 per cent from the $17 million recorded in 2012/2013.

Boaz said that the increase in income is attributed to the higher receipts in premiums, which rose by

Insurance Times | July 2015

$875,340, whereas interest income increased by $3.6 million.

According to Boaz, the premium income increased by 12 per cent, from $7 million in the 2012/2013 financial year to $9 million in the 2013/2014 fiscal year. “This achievement was a result of increase in average total deposit liabilities in member institutions�, he said.

Tanzania banking regulations require premium income to be derived from the assessment made at the rate of 0.15 per cent of the annual average total deposit liabilities of every member bank and financial institution in the country.

The current maximum insurance cover provided by DIB is $900 (Tsh1,500,000) per depositor per member institution, providing full coverage to 91.4 per cent of all account holders in the country’s banking industry. This is in line with the internationally

11 BoT Governor Prof Benno Ndulu: Fund growing rapidly in the absence of bank failures.

accepted standards, which require a depositor insurer to provide full cover to at least 90 per cent of all depositors.

Prof Benno Ndulu, Governor of the Bank of Tanzania (BoT), told Insurance Times that the value of the total deposit in the banking sector was $7 billion as of June 2014, which was made up of 6.4 million deposit accounts.

Ndulu said that the value of insured deposits was $438 million, with the ratio of total insurable deposits being 11.3 per cent.

According to Ndulu, the fund continued to grow as there was no bank failure and no withdrawal from the fund.

Consistent with the DIB’s investment policy, the funds collected were invested

in government securities comprising fixed and variable rate instruments.

The central bank says that the country’s banking sector continued to grow, with notable growth in agent banking, as depicted by the continued increase in the volume and value of transactions.

As at the end of April 2015, a total of nine banks were approved by the Bank to undertake agent banking business.

Banks had contracted 2,013 active agents, facilitating 881,327 deposit transactions valued at $220 million and 272,282 withdrawals valued at $33 million.

DIB said that over the years, Tanzania’s banking sector remained sound and stable, with adequate capital and liquidity levels above regulatory requirements.

The ratio of core capital to total risk weighted assets and off balance sheet items was 16.7 perb cent, while total capital to total risk weighted assets and off-balance sheet exposures was 17.7 per cent.

Both ratios were above the minimum requirements of 10 and 12 per cent, respectively, as the ratio of liquid assets to demand liabilities stood at 35.6 per cent, which was above the minimum requirement of 20 per cent.

However, the quality of assets of the banking sector deteriorated slightly as reflected by the ratio of non-performing loans to gross loans which increased to 8.12 percent from 8.08 percent recorded at the end of June 2013.

Insurance Times | July 2015

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Tanzania’s insurance laws are among the best in Africa

This is a new column that will offer readers a general understanding of laws governing insurance practice, especially in Tanzania.

By Deusdedit Sise Muhono

T

he regulation of the insurance market in Tanzania has existed even with the liberalization of the industry in 1996. The Insurance Act Cap 394 of 1996 was a product of the economic and financial sector liberalization carried out from the second half of the 1980s to date. The Act established an agency of the government known as the Insurance Supervisory Department (ISD) under the Ministry of Finance and Economic affairs.

Insurance Times | July 2015

The main objectives of ISD, among others, were to provide superintendence of the conduct of insurers, brokers and agents; formulate standards in the conduct of the business; and afford guidance to players. As time passed, the Act fell short of expectations of the market, calling for its review.

The process of enacting a new Act commenced in 2007 and continued up to April 2009, when the National Assembly unanimously passed it and the president

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assented. Hence, the new law came into effect on 1 July 2009 through Government Notice No. 266 published on 24 July 2009. This meant that the Insurance Act Cap 394 was repealed and replaced by the new Insurance Act No. 10 of 2009.

General Overview The new Insurance Act comprises 12 parts with 168 sections; the repealed Act had only 141 sections.

The new Act establishes an independent regulatory authority known as the “Tanzania Insurance Regulatory Authority”, departing from the previous Act which established an agency of the government known as an Insurance Supervisory Department. The Authority was designed to operate independently as per the requirements of the core principles of insurance supervision formulated by the International Association of Insurance Supervisors (IAIS).

The main objectives of the Authority and its functions are provided under section 6 of the Act, and include the promotion and maintenance of efficient, fair, safe and stable insurance market for the benefit and protection of insurance policyholders.

The appointment of the Commissioner and Deputy Commissioner were previously made by the Cabinet minister responsible for the sector.

The new Act prescribes that the two shall be appointed by the president. Their qualifications are also given.

It is of interest to note here that at no point in time shall the Commissioner and Deputy Commissioner shall hail from one part of the Union.

Subsection 2 of section 8, read together with section 2 of the Act, clarifies this position.

The role of the National Insurance Board is now more functionally defined than previously, when it had a more or less advisory role to the Commissioner. This is to ensure good governance in the Authority as far as the oversight exercise of the Board is concerned. Section 14

of the Act provides core functions of the Board to include provision of guidance to the Authority generally in the supervision of insurance busines in the country, and to ensure that the Authority undertakes its activities in a competent manner.

Even the composition of the Board has changed, as per section 13 (2). It now includes professionals from the industry, such as a member from ATI, TIBA and TIAA, and from other recognized institutions that are related to the insurance sector. This can be contrasted to the previous membership structure, in which appointment was based on the wisdom of the minister.

New FeaturesThe Act establishes a special insurance tribunal, technically known as Ombudsman Services, as provided in section 122 and 124. The main function of this institution is to resolve disputes arising between policyholders and insurers on the contracts of insurance. The Insurance Ombudsman will function as a quasi-court under the leadership of a senior legal practitioner at the level of a judge of the High Court of Tanzania.

There is also establishment of an Appeals Tribunal, which is mandated to deal with all appeals of registrants against the decision of the Commissioner of Insurance. Section 126 of the Act deals with the process and timing of appeals. Any person aggrieved with the decision of the Commissioner may appeal to that Tribunal. Under the repealed law, such a complaint would go to the minister responsible for finance.

The right to declare a “bad faith claim” against an insurance company which fails to settle a claim within a statutory time limit of 45 days after admitting liability is provided. Also when liability under normal circumstances is supposed to be admitted but an insurer refuses to do so, the firm may face consequences under section 166 on general penalties.

The term “bad faith claim” is defined by Section 131 (3) to mean a delay in processing a le-

Insurance Times | July 2015

14

gitimate claim beyond a time limit, and delay to pay the claim beyond 45 days without the consent of the Commissioner. This is also a new feature which never existed before.

Composite insurance is also barred by law under section 17 of the Act; instead, insurers may transact either general insurance or life insurance, but not both. The insurers whose transactions are both longterm and general insurance are given a timeframe of three years, under regulation 19, to separate the two businesses.The new law also provides guidance to the Management of the Authority on the use of funds appropriated by Parliament or from levies, or any sum of money which the Board may borrow. Section 127 deals with the sources of funding of the Authority.

Apart from imposing an overall duty of care on directors and officers to policyholders, the new law also provides for consultation before any changes to the regulations are proposed to the government. Other features of the law include a requirement for an insurer to establish audit and investment committees, additional duties for auditors, definition of related party transactions, and the requirement that actuarial valuation of a non-life fund shall be carried out after every two years.

Offences and PenaltiesCarrying insurance business without registration by the Commissioner of Insurance is a serious offence under the new law, for which punishment upon conviction is a fine of not less than Tsh5 million ($2,700) or imprisonment of not less than two years, or both. It means the court has no discretion to issue punishment less than the one prescribed by law. Therefore, this time the insurance players should work more closely with the Authority to reduce or make illegal insurance in Tanzania something of the past.

The Commissioner of Insurance is mandated by

Insurance Times | July 2015

law to issue fines to any offender under sections 18, 26, 30, 34 and 66 instead of one having to be prosecuted in a court of law. However, if they refuse to pay the fine, then the offenders must face criminal prosecution in a court of law. The Commissioner shall compound offences and issue an order to pay a fine only if the offender admits in writing that he has committed the offence.

Offences under sections 19, 20, 73, 88 and 91 may be prosecuted in court by the Commissioner of Insurance or his representative upon obtaining consent from the Director of Public Prosecutions under the National Prosecution Services Act, 2007.In addition, the Commissioner of Insurance may exercise powers vested on him under section 165 to issue a cease and desist order to any insurance registrant where in his opinion a person registered to conduct insurance business is conducting it in an unlawful or unethical manner. Section 166 provides general penalties against whoever acts in contravention of any provision of insurance law.

Other African LegislationsBy and large, the new Insurance Act is among the best insurance legislations in Africa. This fact is attested to by looking through the salient features of the Act and the new features embraced therein.

No doubt, the changes made in the insurance market in Tanzania with the operation of the new Insurance law are quite pertinent and geared towards aligning the market’s insurance practice with best International practice. As such, every insurance player should be well conversant with the new law and adhere to its statutory requirements.

Deusdedit Sise Muhono is an advocate working with the national Audit Office of Tanzania as a Performance Auditor-Legal.

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Global risk experts warn of turbulent decade ahead A new report from the World Economic Forum (WEF) identifies the biggest risks facing the world – and the important role insurance can play in mitigating them.

By Mathew Madden

A

ccording to the 2015 Global Risks report published by WEF, international conflict is the biggest threat to world stability in the next 10 years.

The report says that interstate conflict with regional consequences – or asymmetric war – is the number one most likely risk and the fourth most serious in terms of impact.

Extreme weather events and climate change is ranked in second place, followed by failure of national governance systems, state collapse, and high unemployment.

In terms of potential impact, water crises is rated the greatest risk facing the world.

The other high impact risks include disease pandemics, weapons of mass destruction and failure of climate change adaptation.

However, the 2015 WEF report agreed that 2015 stands out as the year when geopolitical risks returned to the fore, having been in the background for the past five years.

“Twenty five years after the fall of the Berlin Wall, the world again faces the risk of a major conflict between states,” said Margareta Drzeniek-Hanouz, lead economist at the WEF. Drzeniek-Hanouz said that the means to wage such a conflict, whether through a cyber attack, competition for resources or sanctions, is broader than ever.

According to Drzeniek-Hanouz, risks to the environment outnumbered economic threats in the report this year, with experts negatively assessing the preparations in place to cope with extreme weather and climate change.

“Three of the top 10 risks in terms of impact over the next 10 years are environmental risks, water crises, and failure of climate-change adaptation as well as biodiversity loss,” she said.

The report cites forecasts that global water requirements could exceed sustainable water supplies by 40 per cent by 2030.

The report warned that water scarcity will

Margareta Drzeniek Hanouz, lead economist at the World Economic Forum.

impact more strongly on food production in the future and could even spark interstate conflict.

The WEF report stresses the cascading effects that could result from the interconnection of risks. Increasing urbanisation is a danger for different reasons.

It said that by 2025, two-thirds of the world’s population will live in cities. Too rapid urbanisation will touch all risks, exposing vulnerabilities to do with pandemic disease, infrastructure and utilities.Also, many of tomorrow’s mega cities will be located in coastal areas that are prone to flooding and in the so-called “ring of fire” belt of earthquake epicentres.

John Drzik, president of global risk and specialties at Llyod’s, said that cyber is the most visible example and

serious vulnerabilities have been highlighted just recently.

Drzik said that the cost of cyber attacks is now estimated at $400 billion annually, which is equal to the GDP of Thailand.

Other emerging technologies that pose new socio-economic threats include synthetic biology, which is increasingly used in medicine, food production and bio-fuels.

Innovation is critical to global prosperity, but synthetic biology presents new hazards, he said, reiterating the interconnection of risks, this time to do with “bio-error and bio-terror”.

Nanotechnology and artificial intelligence are other emerging technology risks that could have far reaching socio-economic risk implications.

Insurance Times | July 2015

16

For a price tag of $20m, private sector now seeks to drive integration process A steering committee made up of private sector executives will decide on the priority projects to be targeted

By Isaac Mwangi

F

or a long time, businesses in East Africa have made a litany of complaints about the numerous obstacles they face, ranging from non-tariff barriers to varying tax regimes and red tape in government offices. Now, they are taking matters into their own hands by putting their money where their mouth is, quite literally.

If all goes according to plan, the region’s corporate heavyweights hope to persuade the summit of East African Community heads of state scheduled for November to launch an EAC-Private Sector Fund that will raise at least $20 million over a period of three years.

Coming together under the stewardship of their umbrella organization, the East African Business Council (EABC), representatives of the private sector from the five partner states have already met with EAC Secretary General Dr. Richard Sezibera to hammer out the finer details of the deal.

The meeting, which was held in Nairobi in April, will be followed by another one to be held in Kampala in September to coincide with a manufacturers’ summit in the Ugandan capital. The parties in the negotiations are however holding the fine details of the talks close to their chests.

What is clear, however, is that the private sector wants to fast-track certain key areas of the integration agenda that have stalled over the years. The contention is that lack of funding is partly responsible for this state of affairs, and the increasingly frustrated private sector wants this impediment out of the way.

“There is a need for the private sector to complement the contributions of governments toward driving the integration process and addressing some of the vital issues to the business sector. Currently, the EAC secretariat is substantially dependent on donor funding and it is very important that the East African private sector should also be a party to providing that kind of support,” said EABC chairman Felix Mosha.

Insurance Times | July 2015

Mosha, a former chairman of the Confederation of Tanzania Industries, singled out the harmonization of standards in various sectors as being of prime interest to the private sector.

Without harmonization, firms have to adhere to the different and sometimes conflicting standards in all the partner states, increasing the costs of production and compliance.

Non-tariff barriers, too, have presented severe challenges to regional trade. Although there has been remarkable progress in reaching agreement in this area, implementation has been a challenge. The elimination of non-tariff barriers has often been frustrated by the introduction of new ones to take their place, putting in doubt the political commitment of governments to actually live up to their commitments.

But the fund will not be a carte blanche for the EAC Secretariat to utilize the funds in whatever way it deems fit, especially following alleged financial improprieties at the Community’s Organs and Institutions as highlighted by the Public Accounts Committee of the East African Legislative Assembly.

A steering committee made up of private sector executives will decide on the priority projects to be targeted, and the finances raised will be separated from the core budgets of the regional institution. The formula to be used in deciding how much of the funds will go toward projects in each member state has not yet been revealed.

Not that the business community has been passive this far. Over the years, the private sector has been instrumental in lobbying governments to address the various challenges

facing industries and intra-regional trade. Private sector representatives are included in many activities of the EAC Secretariat and other Organs and Institutions of the Community, and it is upon this foundation that the business community will be seeking to foster its interests further.

Opportunities The private sector in the region will be expected to reap handsomely from faster integration. “The private sector is the principal beneficiary of an integrated East African Community. If all our economies can integrate more rapidly, the private sector benefits more than any other sector in the economy,” said Mosha.

The proposed fund will itself create a lot of opportunities in terms of major infrastructure projects in all member states. The completion of these projects will then enable a better environment for doing business.

Of course, there will also be regional recognition of the firms that contribute to the new largesse. These will be graded according to their level of contribution into platinum, gold, diamond, and so forth.

The insurance sector, no doubt, will experience increased activity due to the underwriting of the major projects to be prioritized as well as the growth in economic activity that these projects will spur.

And, of course, there will be no more excuses by government bureaucrats about lack of funding to see various initiatives through and hold everyone to ransom. Plus, the common man will enjoy a smoother ride throughout the region… the marvels of what a marriage of the private sector and EAC can achieve.

17

Insurance Times | July 2015

18

COVER STORY

For going into farming, there’s sweet fruit for Uganda’s youth Conditions in Uganda are favourable for the growth of fruits, which can be produced all year round.

By Addah Zammy A small but growing number of young Ugandans is now turning to agriculture, in particular fruit farming, making fortunes that were hitherto considered impossible in the sector. Buoyed by their success, they now say agriculture has helped make them more responsible and focused.

Conditions in Uganda are favourable for the growth of fruits, which can be produced all year round. There is plenty of land and relatively cheap labour, enabling the production of exotic and off-season fruits – especially passion fruits and pineapples.

Agriculture is the single largest source of income for rural Africans and contributes a quarter of the continent’s gross domestic product. More than 70 per cent of the labour force in Africa’s low-income countries depends on the sector for a livelihood, contributing to food security and poverty reduction.

The continent has by far the highest rate of absolute poverty, estimated at 40 per cent. The growing population of young Africans between the ages of 16 and 24 do not see agriculture as a profitable venture. Yet, venturing into agriculture could solve the problems of idleness, drug abuse and other evils that are common Insurance Times | July 2015

among the youth.

Although passion fruits are vulnerable to attack by numerous pests and diseases, they can have good yields if well looked after. There is a huge market for the fruits in central Uganda.

Moreover, passion fruits are easy to grow and not bulky. The fruits can be packed in convenient paper bags, commonly known as Buveras, and sold to passerby.

According to an agricultural official, passion fruits grow on many soil types, although light sandy loam soils with a PH of 6.5 to 7.5 are most suitable. There are two varieties – the local and hybrid. The local variety fetches a higher price on the market because of its scent.

A bag of the local fruit goes for Ush300,000 ($90.9), while the hybrid goes for Ush200,000 ($60.6).

According to 23-year-old Baguma Emma, a passion fruit farmer commonly known as “Butunda Supplier” in Nakasero market, 600 passion trees are on an acre of land can yield a harvest of three to six sacks weighing 50 kg to 75 kg each per week. If managed well, passion fruit bushes can last for four years, and during that period the farmer continues harvesting fruits.

Baguma says with such a busy schedule and flow of

19

Ugandan passion fruit growers on their farm

cash, he has since ignored the saying, “Do not put all your eggs in one basket.� He has no other source of income apart from passion fruit farming. Baguma and other youth supply hotels and restaurants with passion fruits. Given their reliability, their customers are left satisfied, further boosting their fruit business.

Baguma says passion fruit juice is on demand, especially during the hot season and also during the holy month of Ramadhan in the Islamic calendar, when Muslims buy the fruit in huge quantities.

Pineapples The pineapple is also doing well in the Ugandan market fruit. Apart from being one of the most healthy foods, the pineapple has a lush, sweet and exotic flavour . It is sold locally for Ush1,000 (30 US cents) each. Pineapple growers have also found a ready market in Juba, the capital of South

Sudan. With growing demand, the youth are now forming associations.

Through the Kiwana Rural Youth Development Association, Fred Musime was able to gain practical experience in pineapple growing and management. He owns a truck, and has employed three youth to help him with sell. He says the pineapple business has dramatically changed his standard of living for the better. He has built a house in the city suburb of Maganjo. After expenses, he makes a tidy daily profit of Ush300,000 ($90.9).

Musime says that given his vast experience and technical know-how in pineapple growing, many prominent farmers and politicians have contracted him and some of his friends to run demonstration farms.

Ready market But there is still a need for more ready markets, according to the youth. They are

also happy that local industries are coming up and soon there will be a lot of demand for their products.

There are few fruit processing industries in Uganda, making the demand for juices far outstrip production. Supermarkets are therefore relying on fruit suppliers to meet this demand.

Jakana Foods, a major commercial producer of various natural fruit juices in Uganda, is one of the firms struggling to meet the high demand. The company has been processing and packaging since 1994, providing a ready market for fruits as well as generating jobs.

Through technical partners with institutions such as the African Development Foundation, UN-Habitant, and the Makerere University School of Science and Technology, Jakana is spearheading improved efficiency in the processing of natural fruit juice.

Insurance Times | July 2015

20

JUBILEE MANIFESTO

Emulate banking sector by adopting ICT, Kenyan minister urges insurers

Kenya’s ICT Cabinet Secretary Fred Matiang’i

By Anne Kiruku

T

he Cabinet Secretary in Kenya’s Ministry of Information Technology and Communications, Dr Fred Matiang’i, has asked the insurance sector in the country to adopt information communication and technology on a large scale in the manner the banking sector has done.

Speaking during the launch of the Insurance Regulatory Authority (IRA) website and Electronic Regulatory System (ERS), the Cabinet Secretary said this would enable the sector to serve its clients efficiently and effectively. The online portal is expected to improve sharing of information between the national regulator and various stakeholders in the insurance industry.

“Electronic signatures are now valid and recognised and therefore insurance companies should use online channels to reach their clients regardless of their physical location,” said Dr. Matiang’i.

The website and ERS, which were started in January by the Insurance Regulatory Authority, will change the way business is conducted in the sector across the country.

The website will enable insurance companies to file their returns to the national regulator through an online portal.

This will be expected to improve detailed capturing of data, consistency, quality and accessibility.

In addition, it will greatly enhance service delivery and efficiency in the sector. The system, which was installed with the assistance of development partners – including the World Bank – at a cost of Ksh45 million ($464,000) will now reduce the time taken to prepare data output

Insurance Times | July 2015

and analysis, which has been a major challenge to the authority.

Although the authority was already carrying out online licensing of insurance agents and brokers, filing of returns by insurance companies has so far been done manually, leading to delays, inefficiency and errors in analysis of the submitted data.

Through ERS, the companies will now submit data electronically, and the regulator will also be expected to analyse it electronically as well. As a result, it is anticipated that the time taken to generate industry reports will reduce by more than half.

Dr Matiang’i urged insurance companies to conduct business from start to finish using online portals.

For example, one should be able to fill an insurance proposal form online, pay premiums online, lay claims online and have the same processed online.

Sammy Mavoke, the Commissioner of Insurance and chief executive of IRA, said the authority had moved from a rule-based model of supervision to risk-based supervision, thus necessitating adoption of ICT in its supervisory and regulatory activities.

“We deemed it fit to adopt ERS to facilitate submission of data by insurance companies and improve the communication between ourselves and the insurance sector,” said Mr Mavoke.

All an insurance company will need to become part of the online system is a good Internet connection.

The system is expected to offer accuracy and efficiency in the analysis of the returns received from the regulated entities. The costs associated with physical delivery of returns and printing of the same will now be done away with. Kenya is the first country in East and Central Africa, and the

third in Africa after Ghana and Namibia, to adopt the system.

Mavoke exhorted the insurance sector to develop ICT-related covers as this is a sector that continues to grow and therefore holds huge business opportunities. He also asked the industry players to adopt modern technology so as to improve conduction of business.

The Association of Kenya Insurers has acknowledged that ICT adoption in the country’s insurance sector was below expectations. In a report titled, “Understanding the Uninsured Market through SBO Research Company,” the association found that the insurance industry has not fully embraced modern ICT. Doing so would enhance the level of service delivery, improve the distribution of insurance products, and support new modes of payment.

According to the study, the insurance sector is suffering a setback as a result of lagging behind when it comes to adopting modern technological advances. For example, in the distribution of information on insurance products, many people lack crucial information on existing insurance covers, the type of risks to be insured, and the processes of lodging a claim.

Still on claim payment, the study found out that many people lacked understanding on the importance of submitting claim documents for quick processing and settlement.

Many people in the low market segment of the economy are unfamiliar with insurance, the research found, because of low disposable incomes.

Through the report, AKI urges its members to embrace modern technology so as to increase their customer base as well as serve the existing clientele better.

21

Diversification sees UAP profits soar

By Anne Kiruku

K

enya’s UAP Insurance has posted an impressive 27 per cent rise in profits before tax to Ksh2.2 billion, the highest ever attained by the firm.

The rise in profits is the result of the firm’s strategy to grow its customer base by expanding into the region. This strategy was behind the firm’s acquisition of Century Insurance Tanzania Ltd, rebranding it UAP Insurance Tanzania Ltd. According to Group Managing Director Dominic Kiarie, the company’s aggressive geographical expansion campaign has seen the insurance giant extend its presence to six countries.

“We expanded our geographical coverage from five to six countries through the acquisition of a 60 per cent stake in Century Insurance,” said Kiarie.

As a result, regional business improved its growth year-on-year from Ksh2.5 billion ($25.8 million) in December 2012 to Ksh3.5 billion ($36 million) in December 2013, contributing 28 per cent of the company’s revenue.

The gross premium revenue grew by 41 per cent to Ksh12.7 billon ($130.9 million). Life insurance business grew by 55 per cent as well to Ksh1.4 bllion ($14.4 million). Income from the various investment portfolios of the company grew by

39 per cent. The total income accrued over the year by the company grew by 35 per cent to Kshs12.7 billion ($130.9 million).

The property business revenue also grew by 30 per cent.

The company managed to contain its expense growth at 21 per cent. The shareholders had something to smile about, with dividend payment up by 13 per cent from Ksh317million ($3.3 million) to Ksh359 million ($3.7 million). A payment dividend of Ksh1.7 (1.75 US cents) per share up from Kshs1.5 (1.54 US cents) was paid to the shareholders.

The company invested heavily in product innovation as well as expansion of distribution services across the region.

Investment income grew by 10 per cent as a result of an aggressive investment strategy adopted by the company.

The company registered a growth in property business following the completion of UAP Nakawa Business Park in Kampala, Uganda.

The company attributes its huge success partly to a Regional Graduate Development Programme, which is meant to nurture future UAP business leaders.

The firm has also embarked on strengthening the control process and governance functions across its opera-

Deputy Governor Bank of Uganda, Dr Louis Kasekende (R) shakes hands with Patrick Ndonye (2L), the General Manager UAP Financial Services after launching UAP Unit Trust Funds. Looking on is Dominic Kiarie UAP Group Managing Director.

tions. It has expanded the Group’s board from the previous seven members to 12.

This brought in additional skills and expertise, and with it business growth and expansion.

UAP also enhanced its business distribution network to improve customer service relations. This was done through the launch of a UAP information centre, thereby gaining customer loyalty and confidence. The company has further participated in various community programmes as a way of giving back to the community.

For 10 years running, the company has supported the Ndakaini Marathon to support its conservation agenda.

The firm hopes to acquire greater technological capabilities so as to improve efficiency of service delivery and enhance distribution of information to customers.

It also hopes to complete property projects across its various markets where it has operations.

Kiarie says that despite the challenging business environment, the company has achieved strong growth in revenue and profitability. “We look forward to offering our current and future customers innovative products and services that will deliver peace of mind and financial freedom.”

Insurance Times | July 2015

22

JUBILEE MANIFESTO

Kenindia declares $2.8m loss as IRA guidelines bite In contrast, profit before tax in 2013 had stood at $5.5 million

W

By Anne Kiruku

hen Kenindia Assurance Company Ltd released their audited financial statements for 2014, it was not business as usual; the firm had made a loss.

The loss amounted to Ksh276.2 million ($2.8 million) before tax. In contrast, profit before tax in 2013 had stood at Ksh532 million ($5.5 million). The company attributed the loss to an additional one-off provision of Ksh501 million ($5.2 million) in respect of Incurred But Not Reported (IBNR) claims reserve as a result of adopting technical guidelines issued by the Insurance Regulatory Authority (IRA) on valuation of technical liabilities.

Effective June 2013, IRA issued guidelines on valuation of insurance technical liabilities in accordance with Section 3A of the Insurance Act, for observance by insurance and reinsurance companies transacting general business.

The guidelines were meant to establish principles for the consistent measurement and reporting of insurance liabilities of all general insurers. The IRA holds to the view that financial soundness of the insurer and ultimate protection of policyholders calls for proper, realistic and consistent valuation of the insurer’s technical liabilities.

During the release of the guidelines, the Commissioner of Insurance and chief executive officer of IRA, Sammy Mavoke, said that appropriate valuation of insurance liabilities is one of the most important issues facing an insurer.

“It is important for the financial soundness of the insurer, and ultimately for the protection of the policyholders, that insurance liabilities are valued in a realistic and consistent manner,” said Mr Mavoke at the time.

Under the guidelines, the Board of an insurer must obtain a statement on the valuation of the insurer’s technical liabilities from the appointed actuary.

The liabilities include both the insurer’s outstanding claims liabilities and its premium liabilities.

The outstanding claims, which are claims incurred prior to the calculation date and have been reported but not yet settled or incurred but not yet reported, must now be taken into account in the annual company accounts and financial

statement.

Premium liabilities, which are all the costs incurred in running off the unexpired portion of an insurer’s policies composed of unearned premium reserve and unexpired reserve, among others, must also be taken into account.

Every insurer will be expected to determine and disclose the value of its unearned premium reserve for each class of business.

The reserving method used must also be consistent.

For example, in determining reserves in respect of outstanding claims incurred and reported but not settled, the regulator recommends use of the case estate method, average cost per claim method or any other method that is recognised by the regulator.

The Board of an insurer is expected to accept the appointed actuary’s statement of insurance liabilities. In the event of failure to accept the statement or if adopting a valuation of insurance liabilities that is not in accordance with the principles of IRA guidelines, the insurer will be expected to disclose in writing the reasons for rejecting the statement prior to finalizing its financial statements.

The Board of the insurer will also be expected to provide details of the methodologies and assumptions used in determining the value of the insurer’s liabilities, in case the insurer decides to use its own actuary.

In case an insurer does not follow the guidelines as directed by the regulating body, any or all administrative sanctions to correct the situation in accordance with the Insurance Act will be issued.

Following the administrative sanctions described in the guidelines, the insurer can be prohibited from declaring or paying dividends. The insurer can also be prohibited from expanding into new financial activities or establishing new branches.

The regulating body can also suspend acquisition of new fixed assets and can impose monetary penalties on the company.

The regulator also has powers to suspend an insurance company’s operations or close it down altogether.

It is important for the financial soundness of the insurer, and ultimately for the protection of the policyholders, that insurance liabilities are valued in a realistic and consistent manner.”

Sammy Mavoke

Insurance Times | July 2015

23

Insurance Times | July 2015

24

MINING

Sky is no limit as Kenya Re posts 7 per cent rise in net profit Favourable interest rates and

good returns from Treasury bills, bonds, bank deposits and the stock market have contributed to the company’s good performance

By Anne Kiruku

T

he Kenya Reinsurance Corporation (Kenya-Re) has posted an impressive 7 per cent net profit increase in its latest report for 2013.

The firm’s net profit rose from Ksh2.8 billion ($28.9 million) in 2012 to Ksh3 billion ($30.9 million) in 2013; the pre-tax profit for the same period grew by 11 per cent, from Ksh2.9 billion ($29.9 million) to Ksh3.2 billion ($33 million.

“Kenya Re has continued to expand into regional markets in Africa and the Middle East.

Presently, we have a business presence in over 45 countries and in over 160 insurance companies in Africa, Middle East and Asia,” said Nelius Kariuki, the firm’s chairman.

The audited 2013 financial accounts show a 21 per cent growth in gross premiums. It is good news to shareholders after funds increased from Ksh14.6 billion ($ million) to Ksh17.9 billion ($ million).

The parastatal attributes the growth of its reinsurance business to a strategic plan that it has adopted and is implementing. Favourable interest rates and good returns from Treasury bills, bonds, bank deposits and the stock market have also contributed to the company’s good performance.

“These good results have been achieved through consistent support and partnership of the Kenyan insurance industry, which remains to be our largest single market for the short-term as well as longterm business,” said Kenya Re managing director Jadiah Mwarania.

Gross premiums written grew by 21 per cent from Ksh7.9 billion ($81.4 million) in 2012 to Ksh9.6 billion ($99 million) in 2013. The net earned premiums grew from Ksh7 billion ($72.2 million) to Ksh8.5 billion ($87.6 million), a 22 per

Insurance Times | July 2015

cent increase. Retrocession premiums grew by 15 per cent, in line with overall growth in business and an expensive retrocession market in 2013.

The net claims incurred grew by 16 per cent from Ksh4 billion ($41.2 million) in 2012 to Ksh4.7 billion ($48.5 million) in 2013. The corporation attributes the growth in claims to both the severity and frequency of claims across its chosen markets.

The investment portfolio of the company has also remarkably increased by 19 per cent to Ksh23.9 billion ($246.4 million). The company’s assets grew by 19 per cent as well, from Ksh23.7 billion ($244.3 million) in 2012 to Ksh28.2 billion ($290.7 million) in 2013. The shareholders fund also grew by 22 per cent, from Ksh14.6 billion ($150.5 million) to Ksh17.9 billion ($184.5 million) in 2013.

Worth noting, though, is that the investment income of the company decreased by 14 per cent to Ksh2.2 billion ($22.7 million) in 2013 from Ksh2.6 billion ($26.8 million) in 2012. The company attributes this drop to a one-off gain on the sale of an asset worth Ksh310 million ($3.2 million) in 2012 and the higher interest rate regime in the same year, which averaged 12.7 per cent compared to the 2013 average of 8.3 per cent.

The investment portfolio of the company increased by 19 per cent to Ksh23.9 billion ($246.4 million).

The corporation has attributed the tremendous growth over the past five years to new treaties and facultative business, as well as the tremendous support from customers across its chosen markets.

Kenya Re has been on an aggressive marketing campaign so as to increase its clientele base. The marketing undertaken in selected markets across

the African continent, the Middle East and Asia has led to the acquisition of new and maintenance of existing treaties and facultative reinsurance business in both life and non-life portfolios.

The company also focused on setting up an efficient claims management system. New products were introduced and new covers were offered to existing and new clients.For example, a new product to cover the substantially huge and growing Muslim community in Kenya was introduced in 2013.

The launch of the Retakaful window and establishment of a shariah supervisory board to oversee its implementation was a big boost to the growth

of the profits. The Retakaful business, which is worth $10 billion worldwide, provides a big opportunity for the firm.

The firm projects it to grow to $25 billion (Ksh2.4 trillion) by 2015.

Throughout 2013, the firm conducted technical reinsurance seminars and workshops in various countries including Kenya, Rwanda, Zambia, Cameroon, Ethiopia and Senegal. This initiative is thought to have increased business and customer loyalty.

Still, the West African office has been performing well and is set to be become a full subsidiary. Additional staff have been recruited to enable the firm exploit the opportunities in fran-

cophone markets.

Considering the growing demand for housing in Nairobi, Kenya Re has invested heavily in offering affordable mortgage, thus increasing its investment portfolios.

The firm is also in the process of setting up an ultramodern high-rise green commercial building in Upper Hill to cater for the growing demand for office space in Nairobi.

Kenya Re is additionally in the process of implementing an integrated enterprise resource planning that, once complete, will enhance service delivery as well as augment risk management and corporate governance.

After rebranding, Kenya Re has tremendously improved public perceptions and its corporate personality.

This has helped in repositioning the company in the marketplace.

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Reinsurance Plaza in Nairobi, one of KenyaRe’s prime properties.

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26

Finance INVESTORS TALK

Njoroge takes over at CBK: Will this man bring down inflation?

New Central Bank of Kenya Governor Patrick Njoroge The shilling has been on a downward slide.

By Anne Kiruku

W

hen Dr Patrick Njoroge took over at the helm of the Central Bank of Kenya, many observers had little to say about the man, having been hitherto hidden from the public limelight.

Njoroge succeeded Prof Njuguna Ndung’u, who stepped down in March after serving two four-year terms. The Finance, Planning and Trade of the National Assembly swiftly approved the appointment, allowing him to formally begin his four- year renewable term.

Njoroge was among five shortlisted candidates interviewed for the position by the Public Service Commission. Appointed with him also was Jairus Mohammed Nyaoga as Chairman of the Central Bank Board of Directors, while Sheila M’Mbijjewe became second deputy governor. The latter two were similarly granted a four year term of service.

Njoroge, 54, has outstanding academic qualifications as well as wide knowledge of monetary issues.

In its 11-page report tabled before parliament, the vetting committee noted that Noroge is open-minded, independent and has an impressive knowledge on topical issue touching on monetary policy. The committee noted that he has the abilities, qual-

Insurance Times | July 2015

ifications and experience to serve as the CBK Governor.

Njoroge, who holds a doctorate degree in Economics from Yale University, has worked outside the country for most of his working life, having only briefly served at Kenya’s Finance and Planning ministries. He served as an economist briefly at the Planning Ministry in the 1980s and had a short stint at the Finance Ministry in the mid-1990s. Before his appointment, he was working as advisor to the deputy managing director of the International Monetary Fund.

Although his single status caused a stir, with some questioning his ability to run such a high profile office if he has no experience in running a family, those who know him say his single status is nothing to be surprised about. He is a member of a very conservative organisation of the Catholic Church called Opus Dei (“to work for God”). This is a group that is keen on professional lay persons and not necessarily priests or nuns. The members lead celibate lives in gender-segregated centres run by Opus Dei. Opus Dei has several layers of membership, with the most important being numeraries. These members lead normal careers but sur-

render most of their income to the organisation. It is no wonder that Njoroge told the lawmakers at the vetting panel that he had no financial assets. Njoroge once studied at Strathmore College, now Strathmore University, which is run by Opus Dei. One of Dr his brothers, Anthony Muheria, is the Bishop of the Kitui Catholic Diocese.

One of his greatest tasks will be to tackle inflation to help reduce commercial bank lending rates in East Africa’s largest economy. During the vetting process, Njoroge told the committee that the high lending rates are “a bit of a puzzle” considering the low levels of non-performing loans among commercial lenders.

His first and major priority, he said, will be to manage inflation.

This is because banks are forced to charge high interest rates when they are unsure of the direction that inflation will take. He said that currently, Kenya’s benchmark interest rate stands at 10 per cent, while the average cost of a bank loan is about 15.4 per cent. The Central Bank raised its benchmark interest rate to 10 per cent from 8.5 per cent.

The increase in benchmark interest rate is the first in three and a half years and was made after the shilling

27 plunged to its lowest level against the dollar since November 2011. This has pushed inflation to an all-time high, almost near the ceiling of the government’s 2.5 to 7.5 per cent target range.

In May, inflation rates stood at 6.9 per cent compared with 7.1 per cent in April.

Njoroge joined the US-based IMF in 1995 as an economist, thereafter rising through the ranks to become an advisor. A Mangu High School alumni from the class of 1973-1976, he proceeded to the current Strathmore University from 1977-1978 for his A-levels. Njoroge holds a Bachelor of Arts degree in Economics from the University of Nairobi. He also has a Master of Arts degree from the same University, which he pursued from 1983 to 1985. He pursued his doctorate in Economics at Yale University from 1987 to 1993, before returning to Kenya where he worked at the Ministry of Finance. He left the country to take up the position of an economist at the IMF in 1995, rising through the ranks to become an advisor.

The plate is full for the new governor as he engages commercial lenders to bring down interest rates to affordable levels. The shilling has been fast losing its value; it is now his job to determine the real exchange rate. He will be required to help Kenya overcome its socio-economic problems using monetary policy.

He must steer clear from being unduly influenced by politicians, while not appearing to snub them – a mistake that may have recently cost Interior Principal Secretary Dr Monica Juma dearly when lawmakers declined to approve her presidential appointment to the position of Secretary to the Cabinet.

The new Governor will be expected to make most of his decisions based on sound research and financial principles. He joins the Central Bank at a time when the Governor’s powers have been enhanced.

With IMF policies having been responsible for widespread suffering in developing countries ever since the advent of structural adjustment policies in the 1990s, it remains to be seen whether a staffer from the Fund will now be in a position to influence Kenya’s fiscal and monetary policy for the better.

Funeral covers come to the rescue, but everybody fears to go morbid

By Anne Kiruku

W

hen Jane Mugure, a single mother of two, lost her mother following a long and protracted battle with cancer, she was not simply grief stricken; even worse was the fact that she had no funds to bury her mother.

For three weeks, the body lay in the morgue as daughter fundraised to cover funeral expenses.

She had already spent a huge amount of money on her mother’s cancer treatment and medication.

A casual labourer at a local public university, her income was insufficient to foot the bill for an elaborate customary funeral as demanded by tradition.

Through the assistance of family and friends, Jane was finally able to bury her mother a month after her death in accordance with prevailing norms and Kikuyu tradition.

The cost of traditional funerals in Kenya is prohibitive, depending with the community, the distance from the morgue to the burial site, and religious and customary beliefs. The cost could be anything in the range of Ksh200,000 ($2,060) to Ksh500,000 ($5,150).

Insurance companies saw this gap and introduced a funeral cover package, which has had a mixed reception. Kenya being a highly religious and traditional society, most people consider talking about death and planning for it a taboo. As a result, families end up going through untold suffering when a loved one dies due to financial hardship.

Old Mutual was the first insurance company to introduce a funeral cover package. In collaboration with the Kenya National Jua Kali Cooperative Sacco, the company provides the expansive informal sector with insurance cover. The cover, dubbed Heshima Mpango Poa, is priced at between Ksh350 ($3.6) to Kshs1,400 ($14.4) annually, with benefits ranging from Ksh10,000 ($103) to Ksh100,000

($1,030) depending on the policy adopted.

The policy, which covers six members of the family – husband, wife and four children – can also cover more members of a family with an additional Ksh50 (52 US cents) per person, depending on the preferred benefit option.

The heavily advertised Pumzisha funeral cover by APA Insurance pays a lump sum in respect of each life assured so long as the cover is active and in force at the time of death. Three benefit options are available: Ksh100,000 ($1,030), Ksh70,000 ($721.6) and Ksh50,000 ($515).

Parents Liberty Insurance has gone a step further than other insurance companies to offer a funeral cover for both parents of the insured and parents-in-law. The Legacy Plan, which is an upgrade of the company’s Msiba Plan, covers parents below 75 years; the parents do not need to undergo medical check-up prior to inclusion. The new cover requires customers to pay premiums starting from Ksh260 ($2.68) per month and is offering benefits of Ksh500,000 ($5,155), Ksh200,000 ($2,060) and Ksh100,000 ($1,030).

The plan, which can be extended to a family of six, including parents, promises a lump sum payment of half the cover amount on the death of the main insured person to take care of funeral expenses, and a fifth of the cover amount to take care of immediate family needs.

Liberty Life managing director Abel Munda said the cover was intended to solve the problems faced by insured persons with a regular income when death strikes. “Insured persons with regular income in our society are expected to take care of financial stability, social security and even funeral expenses for their parents.”

Insurance Times | July 2015

28

INVESTORS TALK

In Zambia, Meanwood wants to turn hurdles into profit

By Staff Reporter

Z

ambia’s relatively young insurance market still faces many challenges, 20 years after liberalizing the country’s economy. As a result, many people are yet to learn what insurance is all about in a liberalized market.

According to Meanwood General Insurance Managing Director Tobias Milambo, there is a low dissemination of insurance information of only four per cent, which presents both a challenge and an opportunity for any new player.

The insurance market is one of many industries that largely remain underdeveloped in the African continent. As a result, local, regional and international insurance companies have begun to seek new market opportunities on the continent. This is expected to make the industry more competitive and enable it to develop into a successful market.

“Zambians need to be innovative.

Insurance Times | July 2015

We need to improve on pricing. At the moment, the market suffers from a credit risk, where many people are buying insurance on credit and are not able to pay,” Milambo said.

He added that new players in the market have to be innovative and to find ways of easing the payment of premiums. Meanwood, Milambo said, plans to create synergies with financial institutions and develop payment systems in Zambia.

Using technology to deliver additional products and services to Zambians will also be an effective market development tool, he said.

“We’re seeing a lot of insurance companies, including ourselves, investing in IT platforms where we’re able to process data very easily. Meanwood is now witnessing players having websites in order to transmit their information to clients.

We’re also seeing more advertising

than before, which means clients are now able to access information,” said Milambo.

A number of Zambian insurers have also begun to approach low income areas, stationing themselves in prime locations to expand their target market.

“The regulator, as well as the pensions and insurance authority, are doing everything possible to make life easier for the players in the industry. At the moment, we are lagging behind in many areas in which we need to develop quickly, so that people who want to buy insurance can do so easily,” said Milambo.

Meanwood is a 100 per cent Zambian-owned short-term insurance (non-life) company registered under the Companies Act and licensed by the Pensions and Insurance Authority on 10 May 2012 to transact insurance business in Zambia.

29

German consortium to build $1b fertilizer complex in Tanzania

By Mathew Madden

A

consortium led by the German company Ferrostaal Industrial Projects GmbH is keen on developing a multimillion-dollar fertilizer complex in Tanzania.

The consortium wants to develop a fertilizer complex in Mtwara in collaboration with the state-owned Tanzania Petroleum Development Corporation (TPDC).

Ferrostaal Industrial Projects emerged as the winner of a tender process for the project development of the fertilizer complex, forming a consortium with Haldor Topsoe A/S of Denmark and the Pakistani industrial enterprise Fauji Fertilizer Company Ltd. Dr Klaus Lesker, the managing director of Ferrostaal, told Insurance Times in Mtwara that by enabling the investment of more than $1 billion in the fertilizer complex, Tanzania will be in a position to exploit its enormous gas reserves, with great benefits to its economy and infrastructure.

The Managing Director of TPDC, Dr James Mataragio, told Insurance Times that the project will strengthen the country`s value creation efforts and is one of the largest investment projects in Tanzania.

In an exclusive interview, Dr Mataragio said the project will enable export of fertilizer products to neighbouring countries. “The project comes at the right time for gas utilization; it is a boost to the agriculture sector as well as the economy as a whole.”

As a preferred bidder, the consortium is currently negotiating with TPDC to establish a joint venture and with gas suppliers regarding the supply of gas for the project.

The venture is open to local participation, with the National Social Security Fund (NSSF) and Minjingu Mines having already shown interest.

Lesker said that the fertilizer complex will be operational in 2019/2020, producing 1.3 million tonnes of fertilizer per year for both the local and international mar-

kets. “Agriculture in Tanzania will stand to benefit from the multimillion-dollar complex, which will also create about 5,000 direct and indirect jobs during construction.”

Tanzania agricultural sector makes up to one-third of Tanzania’s gross domestic product, with more than 75 per cent of the population working in the agricultural sector The country has estimated gas reserves of around 50 trillion cubic feet (tcf) and more reserves are expected from untested prospects.

Haldor Topsoe Chief Executive Officer Bjerne Clausen said that the consortium was providing support through the entire project’s development, including financing, technology, product offtake as well as construction, maintenance and operation of the plant.

Clausen said that Topsoe’s role will be to deliver and license engineering, hardware and catalysts for the fertilizer plant. Mtwara has existing port facilities and connections to a future natural gas grid.

“Furthermore, Tanzanian shareholders will also play a significant part in the further development and realization of the project,” he said.

According to Clausen, the plant will leave a positive footprint, enabling the country to monetize its huge gas reserves and in the process create jobs and boost agricultural productivity.

Ammonia is the primary ingredient in fertilizer and the plant will improve local supply significantly.

From Topsoe’s perspective, the project not only represents a substantial contract value, it also holds the potential of becoming a long-term steady source of income due to the planned co-ownership of the plant.

Haldor Topsoe and Ferrostaal have already been working successfully together for some time – most recently on two major ammonia-related projects in Tanzania and Cameroon. The project is currently the largest investment project in the country.

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BUSINESS

How discovering ‘The Secret’ brought lifetime success

By Mwirabi Sise

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rom May 2008, my life hadn’t been going on well for some time and for a lot of reasons, and I was very unhappy about it.

First, I had left my work in media consultancy, a job that I had done for eight years, and joined TunCut Almasi Company as one of their public relations personnel. I enjoyed the work and was good at what I did, but it wasn’t a well-paying job.

I worked there for one year and then decided to join another company for better prospects. The new company was highly reputed and was offering salary and perks that I had always dreamed of. I was happy and life certainly felt like it was going to change for the better.

However, to my utter disappointment, the job was nothing like I had thought it would be. The working environment was extremely unprofessional and the quality of work itself was not challenging at all. I felt like my eight years’ work experience and the best years of my professional life were being wasted; it was as though I had gone backwards professionally. My boss was not a nice person at all; he was very negative and was extremely difficult to work with. To make things worse, the internal politics was really bad: disagreements, gossiping, backbiting, fights, etc., took place with alarming frequency.

Since the team was small, it was difficult to escape or stay away from it. The only good thing about it was the money; as much as I tried to be positive about that, however, it didn’t help. I literally had to drag myself to work every day, and spending eight hours a day at the office became a huge drain on my nerves.

The lack of an interesting and mentally challenging career started affecting other areas of my life as well. I felt like something was seriously missing in my life. I felt there was a lack of quality or purpose to my very existence.

I first heard about the book The Secret while browsing the Oprah website and bought it two months later while on holiday, but had stopped reading it halfway for no particular reason.

However, at this low point in my life, I decided to start reading The Secret again. I decided that I was going to apply The Secret theories and change my life by getting the things I wanted. I started keeping track

Insurance Times | July 2015

of all instructions I read from the book. I was grateful and made a list of all the things I wanted to achieve. I wrote about them in such a way as though I already had them.

The first and foremost thing I wanted was to change jobs. I had completed a year and five months in this company and I did not want to waste any more time there. Until then, I was always told that you could never have everything in life. The Secret had started to change that outlook for me. I deserved to be happy and I deserved a career or job that made me happy.

I first became clear about what exactly I was looking for in a job/career, i.e., where I wanted to work, in what capacity, etc. It took me a few months to get absolutely clear on my dream job, but finally it dawned on me.

There was an international organization that had divisional offices where I lived and I knew that was where I belonged. I further made a list of all the things I wanted to have in my career in this organization; in short, I created a perfect job scenario. I thought about this every single day until one fine day, I opened the classifieds section of the local newspaper and saw the vacancy advertisement for one of the divisional offices.

On reading the job descriptions, I found it to be exactly what I was looking for. It was a Human Resource Management position, the course I had studied for at the Institute of Management at St. Augustine University, Mwanza. I sent out my application with full gratitude and knowing fully well that one day I would work there.

Rewarding start In the meanwhile, I continued being as positive as I could and did my best at my job. A few weeks after the closing date of the vacancy, I received a call from the division office asking me to go for an interview. The moment I answered that call, I knew the job was mine.

I decided in my mind that I would join the new office in January 2014; a new year and a new rewarding start to my career. I trusted The Secret and the power of the universe with all my heart.

I trusted completely that what I had asked for, I would receive. The interview went off very well. Two weeks later, I was informed that I was among the top three candidates short-listed for the position. By mid December 2013, I received confirmation that I had been selected for the position.

Since I was on leave at the time I received this wonderful news, I resigned at the end of December 2013 and in January 2014, just as I had wanted, I joined my new company, the Tanzania Oxygen Company Ltd. Since then, there hasn’t been any looking back.

With the help of The Secret, I landed my dream job and it has been a year since I joined. I became happier.

Things are absolutely great. I enjoy every moment that I am at work. My boss is one of the nicest and kindest persons I have ever met in my lifetime. I have an excellent relationship with him and all my other colleagues. I am great at what I do.

As a strong believer of The Secret, I am truly grateful for everything I have and for what I am today. I know for sure that everything I want or wish to achieve in my life henceforth, is certainly on its way to me. Life is wonderful and just the way I wanted it to be. Thanks to The Secret book, it has changed my life.

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Boom time: In East Africa, the oil and gas party begins Tanzania and Mozambique were among African countries that saw some of the largest oil and gas discoveries in the world in 2013.

By Mwirabi Sise

S

ix of the top 10 global discoveries that year were made in Africa. More than 500 companies are now engaged in exploration work across to the continent, according to a study by PricewaterhouseCoopers.

Large gas finds have made the world “take note of East Africa as an emerging player in the global industry,” said Chris Bredenhann, the report’s advisory leader.

The boom has brought investment opportunities, despite the lingering challenges of corruption, lack of infrastructure, and a poor regulatory environment.

Transactions worth some $1 billion occurred every 17 days in Africa’s oil and gas sector last year, the report says.

Still, the continent faces fierce competition for vital investment from other parts of the world, the PwC report cautioned.

“A huge obstacle to growth in Tanzania and Mozambique is the cost of the infrastructure required, which neither country can afford without help from foreign investors,” it said.

Nearly nine million barrels of crude oil were produced every day in 2013, more than 80 per cent of which came from established players such as Nigeria, Libya, Algeria, Egypt and Angola.

Nine-tenths of annual natural gas production, 6.5 trillion cubic feet, came from Nigeria, Libya, Algeria and Egypt.

Still, Mozambique could become a major player in the Asian market on a par with Australia, the United States and Papua New Guinea when it starts exporting gas, expected in 2020, the report said.

Already, majors such as Eni, Chevron and BP have invested in its gas fields, some of the largest discovered in the past decade.

Demand for oil in Africa was also expected to “rise significantly” over the next 20 years, driven by population growth, urbanisation and the emergence of a middle class, the report said.

Bredenhann presented an overview of PwC’s recent survey of the African oil and gas industries to about 200 delegates at the SANEA lecture. The presentation consisted of a summary of the firm’s report, “African oil and gas: On the

Insurance Times | July 2015

Chris Bredenhann, PwC Africa oil and gas advisory leader

brink of a boom.” The report was based on questionnaire responses received from industry players.

Although Africa’s share of global oil production dropped from 12 per cent to 10 per cent in 2013, six of the top 10 new global discoveries were made on the continent. Furthermore, exploration for natural gas is picking up in the East African countries of Kenya, Mozambique, Tanzania, and Uganda as the industry recognises the region as an emerging supplier.

Industry players have identified Africa as an important source of oil and gas, with new deals worth $22-billion being signed.

Proven reserves continue to increase as more discoveries are made and appraised. It is believed that the continent has untapped reserves equivalent to 8 per cent of the world’s total oil supply, and over 14 trillion cubic metres of natural gas.

Bredenhann said that a growing number of respondents to the consultancy’s questionnaire indicated that safety, health, environment and quality (SHEQ) issues are likely to have a significant impact on their businesses over the next three years. Despite this, only 1 per cent reported that SHEQ could result in the cancellation of a project. SHEQ concerns appear to be at the heart of the fracking debate and delays in legislation in South Africa.

Bredenhann said that companies need to recognise that not all projects and areas are the same and that different challenges exist across various African regions. This understanding should result in companies adopting flexible business models which serve as roadmaps rather than hard-and-fast rules.

The report concludes that new discoveries of oil and gas reserves in many parts of Africa will draw increasing numbers of international investors to the continent, which will result in fierce competition and increased exploration. This activity will require huge capital investments to improve infrastructure, particularly in East African countries.

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How insurance firms make money…

The Halal way

By Muhsin Mohamed Said

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n essence, the Takaful operation can be divided into two principal activities. On the one hand, it acts as the conduit for providing financial benefits in the event of a misfortune through the various types of Takaful products that individuals as well as corporate bodies may participate in.

Technically, the product is similar to an insurance policy. From straightforward personal lines such as motor vehicle cover to the very complex requirements of the corporate sector, Takaful products fulfil the demands of all. A long-term family Takaful plan would aim to satisfy the life insurance needs of an individual; while the industrial all-risks scheme would meet the insurance needs of a sophisticated manufacturing plant belonging to a huge corporation.

As consideration for using these products, Takaful participants – whether individuals or corporate bodies – pay a certain Takaful contribution to the Takaful funds managed by the Takaful operator. Depending on the type of product, contributions in respect of family products are credited into the family Takaful fund, while contributions for general products are paid into the general Takaful fund. Essentially, these Takaful funds belong to all participants.

The basic function of the funds is to provide financial assistance in the form of claim benefits to any participant who suffers a loss due to a defined misfortune. In this sense, Takaful assumes the role of helping one another in times of need. Proceeds from the claim

Insurance Times | July 2015

benefits would come from the pooled contributions accumulated in the respective Takaful funds and not from any other fund.

In this respect, it is extremely important for the Takaful operator to ensure at all times that the Takaful funds would not in any way be harmed, endangered or unduly exposed to undesirable risks. Underwriting skills and technical knowledge are therefore critical. This is a process of selecting, checking and filtering unwanted risks from being absorbed by Takaful and hence liability for any unwarranted claim due to weak and poor selection of risks.

In order to support the general operation on Takaful, it is vital that the funds be strongly supported by investments that would ensure regular streams of income. One of the elements that distinguish Takaful from conventional insurance is the right to profit sharing by the participants of returns on the investment.

Thus, the profit of the shareholders’ fund would be taken into account as the overall profit of the operator. Dividends to shareholders are paid from this profit.

As an Islamic system, all facets of the Takaful operation must comply with Shariah principles, including its investment. Shariah compliance covers not only how but where the fund is invested; and whether the return and the purpose of the investment are permitted by Shariah. Over and above this, the investment must also comply with the regulations and guidelines of the authority.

Being a relatively new sector, investment avenues for Islamic finance are rather limited,

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including Takaful. Nonetheless, Tanzania has been in the forefront in developing and promoting new Islamic investment instruments and avenues; thanks to the players, scholars and regulatory agencies.

Islamic investment instruments began to be developed in Tanzania following the debut of Islamic banking around seven years ago. When Takaful came into being not long after that, the foundation for investment in accordance with Shariah would be established.

As the trustee and custodian of participants’ money, the hallmark of a Takaful operator’s investment philosophy should always be based on reasonable returns to both the participants and shareholders, while at the same time upholding the principle of safety and security. Greater care and prudence, in fact, has to be exercised under the trusteeship foundation.

Other avenues of investment include deposit placed with an Islamic banking institution under a Mudharabah contract.

To guarantee sufficient liquidity, a Takaful operator should prudently ensure that an adequate level of the deposit is maintained so that should any urgent payment be required in the event of a misfortune, the money would be readily available to

be delivered to the concerned participant.

Investment in properties, especially commercial buildings that would generate a steady and reasonable return to the operator, would be another attractive avenue. But it is crucial for these properties to have tenancy, from which rental income would be critical to ensure a steady flow of returns to the funds. Furthermore, ownership of properties is an investment permitted in Islam.

The Takaful operator may also invest in the equity market. Buying and selling of shares and any gains secured thereof is permissible in Islam as long as the equity concerned is a Shariah-approved counter. However, there are few Shariah-compliant securities in East Africa, meaning Islamic financial institutions have fewer options.

It is also possible for the Takaful operator to utilize part of the Takaful funds to provide credit facilities to selected clients, as long as it is undertaken prudently.

The financing transaction must be on an Islamic basis. Usually, financing of this nature is granted to a borrower to enable him to acquire fixed assets, under which the repayment shall be made over a specified fixed period. By this transaction, the party that provides the facility shall

Zubair Mughal, the chief executive officer of the Al-Huda Islamic Centre of Islamic Banking and Economics (right). The firm recently held a two-day specialized Takaful workshop for insurance and risk management professionals in Dar es Salaam.ww

purchase the assets required and re-sell to the borrower at a profit. It is usually structured based on Murabaha contract.

Granting of such a financing facility ought to have appropriate collateral as security. This is part of the steps taken to protect the participants’ money in case of default. Investment of this nature usually would be in the form of syndication with Islamic banking.

The progress of Islamic finance in general will enable the Islamic financial institutions in Tanzania and East Africa at large to develop numerous investments through Sukuk issuance. Sukuk are the certificates of equal value representing undivided shares in ownership of tangible assets, usufruct and services. In this manner, a financial institution has the opportunity to diversify its investment avenues further. Out of this development, a Takaful operator may purchase these papers or instruments as part of its investment activity for both the Takaful funds and the shareholders’ fund. The Takaful company must comply with Shariah in terms of its operation as well as its investment.

Muhsin Mohamed Said E-mail: imad.muhsin@hotmail.com

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Membe: Come, we have fertile land, raw materials and much more

Excerpts from remarks by Bernard K. Membe, Tanzania’s Minister for Foreign Affairs and International Cooperation, during the opening ceremony of the Tanzania-Comoros Trade Summit on 23 April 2015 at the Palais du Peuple in Moroni, Comoros.

IT IS A GREAT honour and pleasure for me to be part of this auspicious event. Participants are eagerly waiting to hear from us how much facilitation we are prepared to provide for their businesses to prosper.

Our bonds of friendship are natural because we are neighbours and we share blood relations. I wonder if there is any Comorian in this room who does not have a family in Zanzibar, Dar es Salaam, Tanga or Mtwara. But true friendship does not happen because of proximity and blood relations.

True friendship is a product of our leaders’ commitment to maintain these ties and our people’s resolve to live as one.

The last time I visited the Comoros was in March 2009, accompanying President Jakaya Mrisho Kikwete during his successful state visit to this country. The visit took place a few months after the completion of “Operation Democracy”, which ended the threat of secession in Anjouan.

Since then, relations between our two countries

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have been growing tremendously, with a significant increase in trade exchanges. Certainly, this increase is attributed to the political stability in the Comoros, but also to the goodwill of the leaders of the two countries.

Agreement President Kikwete’s visit in 2009 culminated in the signing of a General Agreement of Cooperation, which identifies several areas of cooperation including agriculture, education, trade, health and technical training.

Furthermore, the agreement provides for the establishment of a Joint Permanent Commission of Economic Cooperation. The Commission is envisaged to be a vehicle for the implementation of specific areas of cooperation.

It was along the same lines that Dr. Ali Mohamed Shein, president of Zanzibar and chairman of the Revolutionary Council, made a historic visit to the Comoros in September 2014. At the con-

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tances in search of goods and services such as health and education. They no longer have to travel that far. Almost all of your local needs can be satisfied in Tanzania.

Experts from Tanzania will give you technical details on that aspect. But more importantly, Tanzanians are now capable of investing in areas where you need investments as long as you facilitate them in the establishment of their businesses.

On our side, we are prepared to provide you with any facilitation you need in order to do business or to obtain goods and services from Tanzania.

Challenges I am aware of the challenges that exist. But challenges are a reality of life.

With determination and persistence, challenges can be transformed into opportunities. We often look at maritime and air transport as challenges in doing business between Tanzania and Comoros. In fact, this is an opportunity, because there are many investors who are looking for such areas to invest their resources. We need to facilitate them.

At the beginning of my statement I mentioned the increase in trade between

our two countries. Yet, the official statistics show a very small amount of exchange. This is because most commercial activities are not recorded because they are not conducted through banks.

This Forum should focus on formalizing these exchanges. Let us not do business as usual. Let us do it the modern way.

It is also important to note that even if we take into account all the formal and informal trade to make the figures look attractive, we will still find out that there are a lot of opportunities for further growth.

I therefore call upon the participants to explore the areas where improvements can be made to increase trade volumes between Tanzania and the Comoros.

I conclude my remark by extending a personal invitation to our sisters and brothers from the Comoros. Please come and make use of our fraternal and historic relations to explore investment and business opportunities in Tanzania. You will find fertile land and abundant water resources for commercial farming; diverse raw materials for industrial development; established experience in the hospitality industry; high class medical services; and up to date educational institutions, to mention but a few.

Picture | Joseph Ngari

clusion of his visit, an agreement was signed, aiming at implementing the provisions of the General Agreement signed in 2009. This Forum, therefore, though primarily private-sector-driven, shall be taken as a precursor to the establishment of the awaited commission.

This trade summit is indeed timely.

It is through such engagements that obstacles to trade development can be discussed and removed. In this regard, I wish to commend the embassy and the 361 Degrees Company for coming up with this brilliant idea. I wish to also express our gratitude to the Comorian authorities as well as to other stakeholders for supporting and facilitating the event. As for the embassy, I would say the essence of modern diplomacy is not in handling a glass of wine or in proposing a toast; the essence of it is in the promotion of fruitful exchanges between countries, such as this one. This is the kind of diplomacy we need: People-centered and action-oriented.

The people of Tanzania and their brothers and sisters in the Comoros can benefit greatly from a wide range of opportunities found in both countries. Comorians are used to travelling long dis-

Tanzania’s Minister for Foreign Affairs and International Cooperation, Bernard Membe (left), with the President of Comoros, Ikililou Dhoinine, during the Tanzania-Comoro Trade Summit.

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Despite growth figures, Tanzania’s economy still needs commitments in transparency Tanzania Finance Minister Saada Mkuya: The rate of inflation has continued to decline over the years.

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The performance of exports was weak due to lower commodity prices on international markets

n 2012 and 2013, the Tanzanian economy expanded at an annualized rate of approximately 7 per cent. Economic growth continues to be driven by growth in a few sectors, particularly the ICT, financial services, construction, trade, and mining sectors.

Except with mining, activities within these sectors are largely concentrated in urban areas. They are relatively capital intensive, creating a limited number of jobs, except through construction activities. By contrast, the rate of growth of the labour-intensive agricultural sector, which employs three quarters of the workforce and contributes to approximately 25 per cent of GDP, remained lower than that of the overall economy. This explains the relatively slower decline of poverty in rural areas and the accelerated pace of migration from rural to urban areas.

The rate of inflation has continued to decline over the years, reaching 6.1 per cent in March 2014 from a peak of 20 per cent recorded in December 2011 – during the global food and fuel price spike. The electricity tariffs increment in January 2014, by an averFortunately, the decline in age of 40 per cent, had only a limited the value of agricultural direct impact on the overall inflation rate due to its relatively low weight exports was compensated in the household consumption basby an increase in the ket, with only 18 per cent of housevalue of re-exports holds having access to electricity.

The performance of exports was weak in 2013, largely due to lower commodity prices on international markets. Indeed, lower average global gold prices have led to a decline in the value of Tanzania’s gold exports by almost 20 per cent since 2012. The volume of exports of cotton, sisal and tobacco all declined by more than 30 per cent. Fortunately, the decline in the value of agricultural exports was compensated by an increase in the value of re-exports, demonstrating the significance of Tanzania’s role as a hub for seven neighbouring

countries. At the same time, the value of revenues derived from tourism also increased.

In 2013, the current account imbalance was increasingly financed by private capital inflows, a departure from the trend where official aid was the largest source of capital inflows, accounting for almost 50 per cent of total capital inflows in 2007/8.

Gradually, however, the relative proportion of FDI inflows has increased, followed more recently by the relative proportion of public commercial borrowing. Together, these two sources of financing accounted for approximately 56 per cent of total capital inflows in 2012/13, compared to only 38 per cent in 2007/8.

In 2012/13, the government failed to achieve its fiscal target as a result of low collections of domestic revenues; an increase in public expenditure by 1.2 per cent of GDP from 2011/12 to 2012/13; and a reduction in aid inflows. This forced the government to look for other sources to finance its fiscal policies, including commercial borrowing on the domestic and international markets. Consequently, public debt rose by 10 per cent of GDP since 2008/9, reaching $12.4 billion (or 40.9 per cent of GDP) at the end of June 2013.

The “Big Results, Now” initiative (BRN) took off in 2013. The BRN initiative is inspired by a similar Malaysian programme with the aim of facilitating the achievement of Tanzania’s Development Vision 2025 by focusing government efforts on accelerating the attainment of results in six priority areas, with emphasis on leveraging private sector investment through PPPs. The inclusion of the Education sector by the Government as a priority under the BRN was appropriate, as poor outcomes at the primary and secondary levels remain a major concern. Nevertheless, a key challenge with the initiative will be attaining a fine balance in the use of public expenditure to promote economic growth while maintaining fiscal and debt sustainability over time.

The most significant transformative factor on the economy is the large natural gas reserves that

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If Tanzania is to follow the example of successful emerging countries, it will need to improve policy aspects in the areas of human development were recently discovered. While the most significant impacts of this discovery on the local economy will not be felt for at least seven to 10 years, careful management of the revenues derived from these natural resources will be required to ensure the optimal use of revenues and to achieve inclusiveness.

In the meantime, if Tanzania is to follow the example of successful emerging countries, it will need to improve policy aspects in the areas of human development (Tanzania is currently ranked 152nd out of 182 countries on the HDI index); its business environment (134th out of 185 countries); and government effectiveness (135th out of 212 countries). For the last two indicators, Tanzania’s ranking has deteriorated in recent years.

Political context Tanzania attained Independence from colonial rule in 1961. The country was formed as a union between the mainland territory, Tanganyika, and the island of Zanzibar in 1964, although the latter still maintains a semi-autonomous government and legislature.

President Jakaya Kikwete is the fourth democratically elected president of Tanzania, which continues to maintain a peaceful existence in an often turbulent post-independence period in the region. The president won his second and last term in 2010, with 61 per cent of the vote. His party, Chama cha Mapinduzi (CCM), has dominated the political landscape since 1961 when multiparty politics was abolished under the founding president, Julius Nyerere.

The country returned to multiparty democracy as part of wide-ranging political and economic reforms in 1992. Since then, the number of parties participating in the political space has grown from 11 to 19, although only six of these have won representation in Parliament, where they are considerably vocal on issues such as transparency and accountability. While they have not been successful in dislodging CCM from power, they have continued to encroach on Insurance Times | July 2015

its support base – as seen from the 2010 general election and recent by-elections.

The most prominent opposition party, CHADEMA, made significant strides in the last election, winning 44 seats in Parliament, up from only five seats in the 2005 election.

In 2012, Tanzania embarked on a process to review and rewrite the country’s 1977 constitution. A draft of the proposed new constitution is currently being debated by the Special Constituent Assembly. The law requires that a new constitution be adopted a year before the October 2015 elections.

Development challengesIn November 2013, the government announced the new official poverty figures indicating that approximately 28.2 per cent of the population lives below the poverty line – considerably lower than the corresponding figure of 33.6 per cent in 2007. Caution must however be applied in assessing the magnitude of the apparent reduction, as the two figures are not directly comparable due to changes in the survey methodology and tools. More measurements and analysis are required to determine whether these figures indicate a sustainable, ongoing trend.

Regardless of the significance in the decline of poverty over recent years, Tanzania remains a poor country. In 2012, its average per capita income stood at $570, placing it in the 176th position out of 191 countries in the world.

Even by the most optimistic poverty es-

Tanzania President Jakaya Kikwete

timates, there are still approximately 12 million poor people living in Tanzania, which is approximately the same number as in 2001. Improving the socio-economic circumstances of this large group of citizens therefore remains a top priority for Tanzanian policy makers.

Tanzania’s rank in the United Nations Development Programme (UNDP) Human Development Index has improved since 1995, but its progress toward the Millennium Development Goals (MDGs) has been uneven. The country is expected to attain only three out of eight MDGs by 2015.

Tanzania is on track to meet the MDGs related to combating HIV/AIDS and reducing infant and under-five mortality, but is lagging behind in primary school completion rates, maternal health, poverty eradication, malnutrition, and environmental sustainability.

Other MDGs involve eliminating gender disparity in primary and secondary education; as well as having an open trading system, special needs of least developed countries, debt, employment, access to medicines, and ICTs. Future economic growth will also depend on the ability of the government to remove existing constraints on businesses. The most significant constraint on growth, as reported by 80 per cent of businesses operating in Tanzania, relates to the provision of electrical energy. On transport infrastructure, Tanzania has made notable progress in the reha-

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bilitation and extension of the country’s road network. However, rural roads need more improvements as they raise production costs in the agricultural sector, and the rail systems are not effectively operated – with poor infrastructure and equipment problems. Overall, Tanzania’s business environment remains unattractive, resulting in disappointing rankings in Doing Business and Africa Competitiveness Reports.

Tanzania needs competitive labour-intensive sectors to absorb the growing youthful labour force, which is increasing by approximately 800,000 young people every year. Growth in employment has so far come largely from domestically-oriented industries, with the exception of tourism. There is a need to promote competitiveness gains in labour-intensive sectors such as manufacturing and services.

The agricultural sector contributes approximately one quarter of GDP and provides employment to approximately three quarters of all Tanzanian workers; and it remains an area where significant achievements can be made with even small undertakings. The Southern Agricultural Growth Corridor of Tanzania (SAGCOT) initiative may facilitate the establishment of linkages between small-holders and large commercial farms, thus promoting productivity gains, while the increased use of modern irrigation systems and modern inputs (seeds, fertilizers) may also result in increased productivity, at least in some specific areas.

The government needs to continue to fight corruption and strengthen transparency and accountability across sectors and at all levels. The government has made good progress in implementing the Extractive Industries Transparency Initiative, which will be increasingly important in the context of natural gas development.

Strengthening public financial management in the country, both at the central and local government levels, is essential for high quality infrastructure investments, more effective service delivery, and attracting private investment. Another challenge is to address the so-called “quiet corruption,” such as teacher and health worker absenteeism, which is less visible than big-time corruption but occurs across a much wider set of transactions, directly affecting a large number of beneficiaries.

Huge savings on the way as Dar pipeline nears completion

By Staff Writer

T

anzania will save $1 billion annually in heavy oil for electricity generation once the 542-km natural gas pipeline from Madimba in the country’s south to Dar es Salaam is completed.

James Andilile, the acting managing director of the Tanzania Petroleum Development Corporation (TPDC), said the major construction works were already by 97 per cent complete. The construction is scheduled to be completed by the end of next February.

According to Andilile, the completed works include front end engineering design, hazard operating studies, procurement and distribution of equipment, and installation of pipelines covering 506 km.

-a -for,,said The project will help the coun-

try fulfil some of the goals stipulated in the Tanzania Development Vision 2025.

These include the availability of reliable electric power supply, expansion and increase of the industrial spectrum, a cleaner environment, employment creation, extended natural gas usage, availability of clean water, and the use of petrochemicals in Tanzania’s industries.

Remaining tasks include construction of 16 valve stations to connect gas pipelines in Mtwara, Lindi and Mkuranga for industrial and domestic uses, as well as construction of pumping stations at Kinyerezi and Tegeta in Dar es Salaam. The setting of hydro-static pressure tests and final procurement of equipment is set to be completed this month.

To advertise, call Tel: +255 22 2184624 Cell: +255 752 204 220 Dar es Salaam, Tanzania Insurance Times | July 2015

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Young MPs seek greater role for the youth in tackling economy, conflicts More than 220 MPs from around the world, nearly 70 of them women, gathered recently in the Japanese city of Tokyo for the Inter-Parliamentary Union (IPU) Global Conference of Young Parliamentarians.

By Owen Mwandumbya in Tokyo, Japan

Hon. Godfrey Mgimwa makes a point during the IPU Global Conference of Young Parliamentarians which took place on 27-28 May in Tokyo, Japan. With him is Ester Bulaya and David Kafulila (behind him) who are also attending the conference. Picture: Owen Mwandumbya

Insurance Times | July 2015

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Tanzania’s delegation of young MPs attending the IPU Global Conference of Young Parliamentarians in Tokyo, Japan. From left: David Kafulila, Neema Mgaya, Godfrey Mgimwa and Ester Bulaya. Picture: Owen Mwandumbya

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rganized jointly with the National Diet of Japan, the meeting aimed to identify solutions to key global issues that impact heavily on youth, particularly the global economic crisis. c, per cent ofthe world This year’s conference was held on 27-28 May, 2015 at the Japanese Parliament.

The focus of the Tokyo conference was democracy, peace and prosperity.

Statistics show that young people are suffering a disproportionate and worsening impact in the global financial and economic crisis, and are significantly more likely than the rest of the adult population to be unemployed.

The conference called for parliaments to shape pro-employment policies that help create good jobs for young people, and to hold governments to account for their actions on youth employment. It urged young MPs to act as advocates for youth-friendly policies, and recommended that they work together across party lines to achieve the best outcomes for young people.The young MPs stressed the need for adolescent-friendly health policies, measures to support youth access to sports and arts, and efforts aimed at combating hate messages in the media and on social media.

The conference emphasized the need to include young people in UN peacebuilding missions, slash military budgets and ensure that young people participate in peacebuilding. These efforts will ensure that the youth become a key part of the solution to conflicts and that they are not seen as perpetrators.

On climate change and the Sustain-

able Development Goals, the conference called on the IPU and the UN to work together to bring a parliamentary dimension to global efforts to build risk-resilient societies. It recommended that this should be done through means such as the Sendai Framework on disaster risk reduction, agreed in Japan earlier this year, and the global pact on climate change, due to be signed in Paris this year.The Tanzania delegation comprised David Kafulila, Ester Bulaya, Godfrey Mgimwa and Neema Mgaya. They shared their practical experience on the best way of involving young people in peace building in the region.Stressing the issue of migration as a result of conflict and violence, Kafulila, said Africa was the most vulnerable continent in the world. Tanzania, he said, had managed to establish exchange programmes with youth from neighbouring countries, most of which have suffered from conflict, so that the youth from such countries could better engage themselves in peacebuilding.

“We have managed to change the mindset of youth from our neighboring countries and now they are taking part in democratic processes in their own countries instead of escalating violence,” said Kafulila.

Issues in the spotlight during the conference included ways of working towards fulfilling various aspects of young people’s vision of a prosperous world. This involved examining how they could empower their peers to address existing socioeconomic challenges.

Earlier, Mgimwa told the conference that the issue of illegal migration

Statistics show that young people are suffering a disproportionate and worsening impact in the global financial and economic crisis from the Third World to First World countries needed to be tackled by engaging the youth and empowering them through loans for small and medium enterprises.

“Migration is a serious challenge to our economic growth. This is manpower that we are losing.”With UN figures suggesting that 600 million young people live in conflict zones, and amid growing concerns over the engagement of youth in violent extremism, the role of young people in eliminating violence and conflict is receiving special special attention. So also is the issue of violence against youth, including young women and girls.

IPU believes it is crucial for young people to be fully engaged in the democratic process, and to be better represented in the world’s parliaments.

The Tokyo conference also underlined the need for a comprehensive rights-based framework of action against radicalization, such as guaranteed free education, conflict-management programmes, and laws to criminalize hate speech.

It also called for policies to ensure greater involvement of young people in campaigns, programmes and projects at the community level.

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Bankers can help out with MDGs… Kaberuka has shown the way

Excerpts from a statement

by Dr Servicus B. Likwelile, Tanzania’s Permanent Secretary, Treasury, at the annual meetings of the African Development Bank Group held in Abidjan, Ivory Coast, from 25-29 May, 2015.

I WOULD LIKE to thank and commend the AfDB Group for choosing a good theme for this year’s annual meetings, which is, “Africa and the New Global Landscape”.

The 2015 annual meetings are especially important for the Bank and all of us for three main reasons: First, during these meetings we will be celebrating 50 years since the Bank was established to serve as the premier Bank in Africa. This year’s annual meetings therefore offer us the opportunity to reflect on the work of the Bank over the past 50 years. Looking at the records, it is clear that the Bank has performed remarkably well in serving the African continent through financing essential infrastructure projects and provision of policy and legal advice.

These efforts by the Bank have contributed to many important achievements in member states in Africa, including expansion of the road and railway infrastructure networks, water supply, education, energy, health, infrastructure, and agriculture. I commend the Bank leadership over these years for steering the Bank and African countries Insurance Times | July 2015

to these achievements.

Second, the 2015 annual meetings are important because this is the last year of implementation of the Millennium Developments Goals (MDGs).

The 2015 annual meetings offer an important opportunity for the Bank and all of us to see how much progress we have made towards achieving the MDGs. According to this year’s African Development Report and other reports by the United Nations, many African countries have not been able to achieve the MDGs. The Bank should therefore use the occasion of these meetings to dialogue with member states on how best the Bank can assist countries to do better in future efforts to reduce poverty in Africa.

Third, the 2015 annual meetings are also important and special because during these meetings, we will elect a new president to lead the Bank over the next five or probably 10 years. This presidential election is especially important for two reasons: First, because of the very high leadership standard the current president has set for the Bank.

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This is a huge challenge for both the Governors who will vote to elect the new president and for the incoming president, who will be expected to match the standard set by President [Donald] Kaberuka.

My advice and appeal to the Governors is to vote and elect a president who will further lift the Bank and African continent to greater heights of success.

Second, the 2015 presidential elections are also particularly important because the incoming president will assume office when there are many complex economic and social challenges to deal with. For example, poverty remains a major challenge in Africa and governance is still a formidable challenge in many African countries.

At same time, concessional sources of finances to address these challenges are shrinking. The new president will be expected to develop strategies that will enable the Bank to effectively support Africa in dealing with these challenges.

During the past 10 years, we have witnessed very challenging economic and social shocks, namely the 2008 world economic crises, the 2009 global food shortage crisis, the rapid rise in oil prices, the Arab Spring and the emergence of Al-Shabaab and Boko Haram in East Africa and Nigeria, respectively; and more recently, the outbreak of Ebola in Liberia, Sierra Leone, and Guinea.

I am happy and proud to note that in each case, the Bank responded very effectively. For example, during the 2008 global financial and food shortage crises, the Bank coordinated and assisted African countries in designing and successfully implementing policies and strategies to mitigate the adverse effects of the crisis. As a result, many African

countries sustained robust growth at an average of 7 per cent. The Bank also represented and spoke with a loud voice at the G20 meetings to promote Africa’s interest in the global economy.

The recent intervention in the Ebola crisis in the three West African countries is yet another landmark service by the Bank to African countries. These are some of the major reflections of the able and visionary leadership of President Kaberuka. I want to commend him for successfully lifting the reputation of the Bank to this level.

Further, it is also important to note that under the leadership of President Kaberuka, the Bank has introduced several innovative initiatives in order to respond to the ever changing needs of member states. These initiatives include the creation of the Africa50 Fund. The Bank has also granted ADF-only countries access to ADB-window resources. These initiatives are intended to increase the amount of resources available for member states.

However, it is important to note that the success of these initiatives by the Bank depends on our collective support.

I would like to urge all Governors to support the Bank on these initiatives. At the same time, I want to commend the government of Morocco for offering to host the headquarters of the Africa50 Fund.

Our strong support to the Bank on this initiative is critical in order to enable the Bank to respond effectively to emerging development challenges in Africa.

The Bank has also successfully implemented the return of its operations from the temporal relocation offices in Tunis to its traditional headquarters in Abidjan. Indeed, this was not a simple task. It involved a lot of careful planning

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and the emergence of AlShabaab and Boko Haram in East Africa and Nigeria

and implementation of the roadmap. I am happy to note that as we are celebrating the 50th birthday of the Bank, most operations are now based in Abidjan. I commend President Kaberuka, his management team and all staff for their commitment to successfully accomplish this task on time. I also want to thank both the Ivorian and Tunisian governments and all other Governors for supporting and facilitating the return of the Bank’s operations to Abidjan.In 2010, we made an important decision to recapitalize the Bank through the Sixth General Capital Increase (GCI-VI). Under the sixth general capital increase of the Bank (GCI-VI), Tanzania has already paid four instalments for its shares. I want to appeal to all Governors to do everything in their power to ensure that this general capital increase is fully implemented.

Lastly, one very important activity of the 2015 annual meetings is the election of the new President of the Bank, following the coming to end of Dr Kaberuka’s second term. Dr Kaberuka has served the Bank and the African continent with distinction. Many other Governors and I have attempted to enumerate many achievements under his leadership. Indeed, it was an honour and privilege to interact with him in the course of our official duties. It is very difficult to find the right words to express our appreciation of his excellent service to the continent. I can only thank him for all the great things he has done and extend to him my best wishes in his next phase of life. Further, I want to conclude my statement by pledging my government’s full support to the next President of the Bank and the entire management.

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False claims: $2m losses force Tan-Re to exit medical insurance The firm said that insurers need to control their loss experiences in medical insurance claims so as to allow the reinsurance firm to restart the business in the near future

By Mathew Madden

Dr. Ramadhani Dau, Chairman of Tanzania National Reinsurance Corporation Ltd

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osses in the medical class of insurance business amounting to Tsh3.8 billion ($2.05 million) have forced Tanzania’s homegrown reinsurance firm to cancel its participation in local medical mandatory policies.

The distribution of claims incurred in year 2013 shows motor insurance claims leading in the category with 35 per cent, followed by medical claims with 34 per cent.

The category also shows accidents took third position with 10 per cent of claims, followed by fire claims with nine per cent, life insurance claims five per cent, engineering insurance claims four per cent, marine claims two per cent, and aviation insurance with one percentage of the claims.

The Tanzania National Reinsurance Corporation Ltd ( Tan-Re) said that it ceased operationalization of medical insurance schemes as of January 2014, until such a time as local medical insurers would have improved on their underwriting standards.

Tan-Re said that insurers need to control their loss experiences in medical insurance claims so as to allow the reinsurance firm to restart the business in the near future.

Dr. Ramadhani Dau, the chairman of TanRe, says that despite the fact that motor, fire and medical classes of business are the top three contributors of Gross Premium Income in the firm,

bad claims from the motor and medical classes of business had caused losses to the company.

According to Dau, the firm has had an underwriting loss of Tsh3.8 billion ($2.05 million) from the medical class despite the fact that the reinsurance firm’s operations delivered healthy results by posting a profit of Tsh2.5 billion ($1.35 million) attributed to prudent underwriting.

Other sources of revenue, including investment income, fair value gains, fees and commissions increased from Tsh4.7 billion ($2.54 million) which is a 22 per cent increase in the year 2012, to Tsh5.8 billion ($3.14 million) in 2013.

Tan-Re said it posted a profit before tax of Tsh3.6 billion ($1.95 million) compared to Tsh5.8 billion ($3.14 million) in year 2012, representing a decrease of 38 per cent. The sharp drop is attributed to the large loss experienced in medical business.

The firm said that it was optimistic that given the ongoing strong marketing initiatives and better services to its clients, the company will continue to post impressive results in the coming years.

The firm’s mandatory policy and treaty cession were set to expire in December 2014, but the government had granted an extension of the legal cessions from the local insurance market for a period of 10 years starting 2015.

Continued on page 56

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Cultural tourism jumps to new heights as villagers count gains

Tourists dancing with Maasai warriors in Manyara, ArushaNine new cultural tourism enterprises (CTEs) are set to enrich tourism in Arusha and surrounding regions of Tanzania.

The Tanzania Tourist Board (TTB) is behind the mushrooming of CTEs in various parts of the country. The new units will be coordinated by the Board’s Cultural Tourism Programme (CTP) based in Arusha.

By Mwirabi Sise

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ith the additional CTEs, the total number of enterprises rises to 60. The idea is to allow visitors to experience local cultures, the people, the environment and traditions unique to each of the more than 120 ethnic communities in Tanzania.

According to Elirehema Maturo, the CTP coordinator, the new CTEs include Bujora, Ukerewe and Kisesa, all in Mwanza Region.

In Kilimanjaro Region, they are Kiliman, Rau and Lyamungo Sinde. Arusha Region has Meru Forest and Momela, while Ruvuma Region has Liuli-Pomonda at Mbamba Bay. CTEs offer visitors the opportunity to leave their safari vehicles behind and spend time in local villages interacting with the people. Besides. They provide visitors with an authentic cultural experience and a unique insight into the daily lives of the local people. Visitors

are exposed to the wealth of culture as well as natural and historic tourist attractions in an area.

In addition, visitors can take part in activities such as preparing local cuisine, making local wine, helping to process coffee beans, learning how to make local handcrafts, and participating in traditional games and dances.

The cultural enterprises host a number of music and dance festivals, which attract many visitors because of their authenticity. And for the visitors who want to meet fishermen, cultivators, local mineworkers, wildlife scouts, rainmakers and story-tellers, it is all made possible.

In one of the newly registered cultural enterprises, Lyamungo Sinde, a village at the foothills of Mount Kilimanjaro, tourists can enjoy the scenery of the highest mountain in Africa while staying with villagers to make handicrafts out of banana leaves; they can also go

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out fishing in the Weruweru River.

In Kahawa Shambani, visitors are hosted by local families at coffee plantations and learn the entire coffee process, from picking to grinding and roasting to making their own fresh coffee. They get to learn about the coffee growers’ co-operative, their history, and fair trade practices and challenges.

“There’s nothing worse than arriving in a new place and making a massive cultural faux pas on day one. As long as you don’t do anything outrageous you should be fine, but a bit of information and guidelines beforehand will only help to make your stay and experience memorable,” Maturo told the Insurance Times Magazine.

Cultural tourism in Tanzania has been growing by leaps and bounds, especially since 1996 when local youth in northern Tanzania started becoming involved. The Maasai warriors used to dance alongside the mainstream northern safari road accessing Lake Manyara, Ngorongoro and the Serengeti major tourist attractions in the area. These voluntary performances resulted in tips and recognition.

Cultural tourism efforts aim to promote cultural excursions organized by local people in their natural environment where they live.

“This is a way of doing tourism so that it focuses specifically on unlock-

President Jakaya Kikwete tries out a Sukuma traditional drum at the Bujora Cultural Centre, Mwanza. Second from right is Rev Fr Sandu Nicasius, head of the centre.

Insurance Times | July 2015

Elirehema Maturo, the Cultural Tourism Programme Coordinator (right), speaks to visitors during the Tourism Exhibition Day in Dar es Salaam.

ing opportunities for the poor so that they can benefit from tourism, rather than expanding the overall size of the sector. Sustainable pro-poor tourism goes well beyond ecotourism and community-based tourism. It is an approach that attempts to maximize the potential of tourism for eradicating poverty by developing appropriate strategies in co-operation with all major groups and stakeholders including the central government, local governments, tourism operators, and local communities,” Maturo said.

The people are directly involved in designing, organizing tours and showing tourists aspects of their lives in the areas where they live.

While economic benefit is derived from these activities, some cross-cultural exchange between visitors and the local people also develops.The CTEs provide employment and income generating opportunities to local communities in rural areas, hence decreasing rural-urban migration. It is a form of tourism thatMost of the centres have convenient transportation and easy access to restaurants, accommodation, entertainment, and other services.

In 2014, over 3,000 Tanzanians were earning directly through the Cultural Tourism Program. A portion of the income from tourism for each enterprise is used for community development work such as renovating schools, providing books for students, tree planting projects, and water tap projects.

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Tanzania in ambitious $1.5m tourism rebranding project

Minister for Natural Resources and Tourism, Lazaro Nyalandu

Tanzania’s Natural Resources and Tourism Minister Lazaro Nyalandu has announced a $1.5 million tourism rebranding project that will see the production of film and television commercials.

By Mwirabi Sise

T

he Re-branding Destination Tanzania project will see the airing of these film and television commercials worldwide through various partners, including CNN and BBC. This will be expected to result in an increase in the number of tourists entering the country. The goal is to attract at least 2.5 million tourists per year in the next five years.

Nyalandu said that a US-based firm, Pursuit Production, was currently filming tourist attractions in Zanzibar, Serengeti, Mount Kilimanjaro and Ngorongoro Crater, among other areas.

“I am optimistic that the advertisements will boost tourist arrivals,” he said. Once filming was completed, President Jakaya Kikwete will preview

Insurance Times | July 2015

the advertisements before their scheduled launch in July.

The tourism sector represents nearly 3.4 per cent of the total GDP of Tanzania and employs approximately 500,000 people.

In 2013, a total of 1,135,884 tourists visited Tanzania, bringing earnings from the tourism sector to a historical high of $1.8 billion.

According to a recent World Bank report, the country’s tourism industry could generate as much as $16 billion by 2025, which would lead to even more job creation and increased revenues over the next 10 years.

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It is benefits galore as NHIF rolls out enhanced cover

By Anne Kiruku

W

ith Kenyan workers now paying higher rates to the country’s National Health Insurance Fund (NHIF) since April, the firm has started its planned rollout of enhanced benefits.

Currently, NHIF covers only inpatient charges, including maternity cover, which takes care of consultation and treatment for both mother and child. Childbirth, including caesarean section deliveries and family planning services, are also covered.

The inpatient cover currently includes consultation, daily hospital charges, and

nursing care. Diagnostic laboratory services, physician’s, surgeon’s, anaesthetic’s and physiotherapist’s fees are also covered. Operation theatre charges, specialist visits and prescribed drugs and dressings are also taken care of under the inpatient cover.

These services will now be extended to include outpatient services such as general consultation, diagnostic and treatment of common ailments, as well as laboratory and x-ray investigation services. Prescribed drugs, management of chronic ailments such as HIV/ AIDS, diabetes, asthma, hypertension and

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cancer will also be included under the new inpatient cover.

For women, the cover will include screening for breast and cervical cancers, which are some of the major killer diseases affecting women. This measure is considered a big boost to the war against cancer in the country.

Unfortunately, although the government will provide the cancer diagnostic and treatment services, the challenge lies in providing sufficient radiotherapy machines. Currently, only one machine is available at the Kenyatta National Hospital, the largest referral hospital in East and Central Africa. The machine has been breaking down frequently, leading to agony and suffering by cancer patients who cannot afford treatment in private hospitals.

Treatment of sexually transmitted diseases and minor surgical operations will also be offered. Family planning services, midwifery, ante- and post-natal services as well as referral for specialised treatment will similarly be available under the new scheme. Currently, only tubal ligation and vasectomy family planning methods are covered.

It is good news for kidney patients, too, who have for a long time complained of the high fees charged for kidney dialysis. This will now be covered under the outpatient cover. The challenge will be to equip enough hospitals with dialysis machines.

The rollout of enhanced benefits followed endorsement by organizations of workers and employers who were previously opposed to the new rates. The higher member contribution rates took effect from April 1.

It was only after agreement was achieved

Insurance Times | July 2015

that the national insurer was able to proceed.

“NHIF has been consulting and we have had a conversation on the way forward,” said FKE chairman Linus Gitahi.

The health insurer has advised employers to deduct the contributions based on the gross income of employees. The contributions are compulsory for those in formal employment, but open and voluntary for those who are self-employed and retirees.

The higher an employee earns, the higher the contribution they will be making.

The lowest monthly contribution is Ksh150 ($1.55) for those earning up to Ksh5,999 ($61.85). The highest monthly contribution will now be Ksh1,700 ($17.53) for those earning a salary of Ksh100,000 ($1,031) and above; this represents a 431 per cent increase from the previous Ksh320 (3.30).

Self-employed people will now make a monthly contribution of Ksh500 ($5.15), up from the current monthly contribution of Ksh160 ($1.65).

Workers and employers had initially put up strong opposition against the higher contributions, citing inability of the NHIF to offer comprehensive medical cover due to mismanagement and corruption. They also questioned how the new rates were arrived at. Both the Federation of Kenya Employers (FKE) and the Central Organization of Trade Unions (Cotu), the umbrella bodies of employers and workers, respectively, had raised queries.

Last October, NHIF chairman Mohamud Ali said that workers contributions would not be used to implement the government’s proposed universal healthcare system and “would only be used to serve members”.

Continued from page 48

Rajab Kakusa, chief executive officer (CEO) of Tan-Re, told Insurance Times that despite the decrease in gross premiums written, claims paid also increased by five per cent from Tsh37.4 billion ($20.22 million) paid in 2012 to Tsh39 billion ($21.08 million) paid in 2013. This is because the company was hit by claims falling within its retention in medical and motor class businesses.

Kakusa said that in 2013, there was a decrease in the rate of mandatory policy and treaty cessions from the local insurance market from 20 per cent in 2012 to 15 per cent in 2013.

“This led to a drop in premiums from policy cessions by 9 per cent, from Tsh69.2 billion ($37.41 million) to Tsh62.1 billion ($33.57 million),” he said.

However, despite the decrease in mandatory treaty shares, the treaty premium grew by 32 per cent from Tsh12.7 billion ($6.87 million) to Tsh16.8 billion ($9.08 billion). This increased premium was a result of the increase in optional treaty cessions from the local market players.

Despite the decrease in legal cession rates, most local insurance companies maintained or increased their treaty cessions to Tan-Re, a clear evidence of the faith they have in the company.

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A billion workers are on the move, so who’ll pay for their social security?

Internal migrants moving within the frontiers of their country of origin constitute over 10 per cent of the world’s population

By Harriet John

T

here are over a billion internal and international migrants worldwide.

The driving factor for migration is often the search for better conditions of work and employment, which for many is inseparable from access to social security coverage.

As part of national and international efforts to ensure adequate social security rights for all workers and their dependants, a new International Social Security Association (ISSA) Handbook on the extension of social security to migrant workers (1) underlines why meeting the social protection needs of increasing numbers of migrants is a growing necessity.

Among the billion-plus internal and

international migrants globally, international migration represents over a quarter of flows. However, the linked megatrend of evolving labour market structures or patterns of international migration is changing.

Once predominantly regarded as a global South–North issue, there are now greater South–South migrant flows. Nonetheless, patterns of North–North migration and South–North migration remain significant.

Internal migrants moving within the frontiers of their country of origin constitute over 10 per cent of the world’s population and a significant 40 per cent of these are residents of Asian countries.

In turn, considerable flows of rural to urban migration are seen in many countries. Most notably, this is the case in India and China, where it is estimated that half of workers in urban China are rural migrants. In 2013, there were a total of 269 million farmer-turned migrant workers in China alone.

From a national perspective, covering migrant workers is essential if social security systems are to meet strategic national coverage objectives. Such coverage extension is important if the international community is to make progress towards achieving, at least, basic social security for all – over 70 per cent of the global population does not have adequate access

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to social security.

Less importantly, rights to social security gained through previous contributions paid to one social security system are portable to another in the same country or abroad.

The “portability” of social security thus refers to the ability of an affiliate to preserve, maintain and transfer benefits between social security programmes, normally underpinned for international migrants by a bilateral or multilateral agreement.

Bilateral and multilateral agreements: According to the available data, there are large regional differences in the extent of such agreements – in 2009, the EU and Western Europe had 1,628 bilateral or multilateral agreements in place, including 1,034 intra-EU agreements, compared with 181 in East Asia and the Pacific, three in South Asia and 102 in Africa excluding Reunion.

Specific examples of multilateral initiatives include the General Convention on Social Security of West African States (ECOWAS); the Conference interafricaine de la prevoyance sociale (CIPRES) of Central and West Africa; the Multilateral Ibero-American Convention on Social Security; the Caribbean Community (CARICOM) agreement on social security and Latin America’s MERCOSUR SIACI agreement.

Others include the Unified Law of Insurance Protection Extension to Gulf Cooperation Council (GCC) Member States Citizens Working in other GCC Member States; and the Eurasia region’s Baku Declaration and Framework Guidance Document.

The absence of such agreements between migrant sending and host countries is likely to act as a disincentive to workers to affiliate or comply fully with social security contribution requirements in particular.

It may as a result incentivize informal forms of work and employment.

Generally, the lack of portability increases the potential vulnerability of many migrant workers while they work in the host country and, at a later date, owing to the inability to transfer earned rights, when they return to their home country.

The public policy challenges of migration presents different policy challenges for migrant sending and receiv-

ing countries.

For migrant-sending countries, the economic impact of the earnings of nationals working abroad can be significant – the remittances sent home by such workers exceed 10 per cent of gross domestic product (GDP) in a number of countries, including Nepal and the Philippines.

For migrant-receiving countries, there are many economic, demographic and social impacts of such flows, a number of which are beneficial including bringing a range of skills and competencies that may not exist or be in short supply in the host country.

Migrant workers are often entrepreneurial and hardworking and are commonly in the cohort aged between 20 and 39. On average, they tend to be younger than the general population, which may help to rejuvenate the host country’s demographic profile.

More challengingly for policy-makers, evidence suggests that migrant inflows may depress salaries in the host economy and cultural integration. Implications of such flows – particularly in migrant workers who settle in one geographical area – cannot be easily managed.

For migrant-sending countries, and particularly those that are developing economies, the exodus of significant numbers of the tertiary-educated population presents difficulties for these societies in the form of the loss of many of the best educated people.

The ISSA Handbook on the extension of social security to migrant workers reports data suggesting that, the migration rate of the tertiary-educated population aged 25 or older to OECD countries is greater than 20 per cent in Afghanistan, Bosnia and Herzegovina.

This is also the case in Cambodia, Congo-Brazzaville, Guatemala, New Zealand, Portugal and Vietnam, and greater than 40 per cent in Barbados, Ghana, Lebanon and Liberia. In the Caribbean, it is typical that well over half of tertiary-level educated adults emigrate.

Social security and migrants: There are many reasons why national social security systems should extend coverage to migrant workers and their dependants.

Over and above meeting their basic needs and social protection require-

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ments, these include advantages for social security systems in particular and society in general.

Social security systems provide essential benefits and services to help mitigate the risks faced by what are often vulnerable sections of the working population.

There is an affirmed human-rights reason for extending coverage to such workers. Wider social security coverage enhances social cohesion, facilitates economic growth and strengthens public support for social security schemes.

Coverage of migrant workers may be seen as important for equity reasons by the non-migrant population.

Migrant workers may help improve the demographic situation of a country and are often net contributors to the social security system over their lifetime.

Covering migrant workers strengthens other efforts to formalize the informal sector, encourages and supports mobility of employees and provides safeguards to prevent the exploitation of migrant workers.

Administering social security for migrants: The inclusion of migrant workers in social security programmes can nonetheless pose a challenge to social security administrations.

This is because the characteristics of migrant workers – short careers in the host economy, with frequent job changes; often active in the informal sector; separated from dependant family members; and so on – are different from the majority of workers.

In addition, migrant workers tend to be less subject to the typically assumed employer and employee relationship on which many social security systems were set up.

Challenges of extending coverage to migrant workers: It is difficult to predict the numbers and characteristics of migrant workers.

Studies show migrant workers affected in economic downturns as well as the volatile flows of such workers pose challenges to social security administrations in terms of management and planning.

Migrant workers represent a heterogeneous group. This includes the poor and vulnerable; often female workers in informal-sector activity; and the high-earning, professionally-mobile employees.

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Migrant workers are often from different cultural and linguistic backgrounds and this make coverage efforts particularly difficult.

It is difficult to separate such workers from dependant family members, thus increasing challenges of appropriately covering the worker and his or her family.

There are information gaps regarding the personal situation of migrant workers.

Their personal information may not be entered in national data systems and they may not use the same support groups as host-country citizens.

Another challenge is that migrant workers are often active in the informal sector and have generally shorter working careers. This has implications for their benefit entitlements, the portability and transferability of benefits.

The administrative requirements related to the coverage of such workers are often significant. This may include the requirement to coordinate with other agencies, often abroad, via the terms of bilateral or multilateral agreements, to manage the often complicated personal and contribution records of migrant workers and the need to communicate in different languages.

Due to their more fragmented work histories, migrant workers often accrue significantly lower levels of retirement benefits than their non-migrant worker equivalents.

This may be due to periods without coverage, “back ended� accrual rates or failure to meet minimum service requirements. While some issues may be addressed by multilateral agreements, the adequacy of retirement benefits remains a key challenge.

Bilateral agreements are most commonly found between countries with organized labour migration programmes, thus

potentially marginalizing or excluding migrant workers from countries with weaker formal links to the host country.

Some agreements, such the Ibero-American Multilateral Convention on Social Security, signed by Spain, Portugal, and 12 Latin American countries, may address the exportability of payment of benefits, but not the full portability of rights.

As a heterogeneous group, migrants have different levels of access to portable social security, including those who move under the protection of a bilateral or multilateral social security arrangement between their origin and host country.

There those who have access to social security benefits without bilateral agreements and those without access to old-age pensions and other long-term benefits, but with access to non-portable short-term benefits such as healthcare.

Also, there are those engaged in the informal economy with limited access to social security in the host country.

Studies suggest that two-thirds of documented and undocumented migrants residing in Africa, Asia or Latin America work in countries without bilateral agreements but do have access to some social security benefits.

For migrants to countries in Europe, Oceania and North America who have signed bilateral agreements with their home country, access to social security ranges from 48 to 65 per cent of migrants.

Even in the absence of agreements between countries, approximately 35 per cent of such migrants in Europe, North America and Oceania have access to some form of social security.

For those with limited social security coverage, owing to their undocumented status and for those working in the informal economy, the figure is at best 16 per cent with no access in Europe, North

America and Oceania.

Measures to facilitate migrant coverage: In response to the challenges, a number of policy, administration, management, communication and home-return measures can improve the coverage of internal and international migrant workers.

There is a need to address policy measures that include extending coverage to migrant workers by including them in the classification of workers covered by social security legislation or by adapting benefits and contribution structures.

Concerning the latter, such measures include reducing vesting requirements and waiting periods and simplifying contribution calculations.

Ensuring the accrued rights of migrant workers are safeguarded and that the transferability and portability of benefits are guaranteed is yet another important measure.

While seeking to improve portability among schemes in the same national jurisdiction and in different countries through harmonization of benefits, it is important to set down the procedures for recognition, transfer and payment of accrued benefits as well as ensuring appropriate coordination between different social security institutions so as to ensure the effective management and administration of cases.

It is also important to improve the adequacy of benefits for migrant workers provided by compulsory and voluntary schemes through effective financing mechanisms.

These measures will make it possible, through creating incentives and removing disincentives, to encourage migrant workers to participate in specific programmes.

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Insurance Times | July 2015

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Football Betting: How Kampala’s middle class makes and loses money

Men check a notice board at a sports betting centre. Betting is a form of gambling which is usually marketed by highlighting the stories of previous winners.

Insurance Times | July 2015

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en are known to be passionate about sports, especially soccer, and this has now spawned an entire industry of football betting in Kampala. Having initially started with a small segment of the betting public, it has now seemingly attracted the entire middle class.

Football betting consists of placing bets or wages on the outcome of a match, national league standings or an individual player’s performance – and even future team performance. The most basic and general form of betting is wagering on how a match between two teams will end. Bettors are also able to wager on a team’s performance, such as how many points they will score. The same applies to player performance, such as which team member will be the first to score.

Today, football betting is more popular than ever before. According to the Entertainment and Sports Programming Network (ESPN), it is estimated that the online sportsbetting industry is making billions of dollars worldwide each year.

There are many factors that contributed to this growth. And although betting on a competition ruins the integrity and morals of the sport, it’s now all about money.

Betting in Kampala’s surbubs Sport betting is now one of the most lucrative businesses in Uganda for both the punters and betting companies. Some people have become so addicted that their entire lives seem to hinge on betting – to the point of selling household items for money to purchase betting tickets.

Some have even gone to the extent of diverting school

From the look of things, sport betting is here to stay and it will likely continue to expand despite the government’s attempts to limit its growth. fees for their children, all in the name of betting.

Most of those involved take a carefree attitude as long as the government has not declared betting to be illegal in Uganda. In fact, they feel the government has encouraged the business by introducing a security bond to safeguard the general public against firms that refuse to pay clients after they have won their stake.

From the look of things, sport betting is here to stay and it will likely continue to expand despite the government’s attempts to limit its growth. This can be seen from the mushrooming of many sports betting companies in and around the city suburbs: Gals Sports Betting, Fair Betting, Premier Bet, Goal Sports Betting, Royal Sports, Victory Bet, Max Bet, Kings Sport Bet, Top Bet and Simba Sports.

Threats According to some local security officials, betting has a negative effect on students, who do not spare time to study. There are also arguments that arise and result into minor fights due to non-payment of debts.

Most times, however, the bettor is always calm since betting does not involve discussing. It simply requires reading and research.

A branch manager in one of the busy centers said that with betting, a poor savings culture could become a major problem in future. it is common, he said, to see a person betting throughout the week and yet no winning is being registered. Sport betting is also easily addictive, he said: One win is enough to motivate a bettor to continue trying, and yet luck may not be on one’s side every day.

The betting firms have not been spared losses either. There are times when a big match plays out and a lot of betting coupons are bought but the collections are low and cannot compensate the bettors.

On a positive note, betting firms say the pastime has made idle youths so occupied that the rate of hooliganism in city suburbs is slowly going down. It is a better activity than getting involved in the destructive strikes and demonstrations that had become a common sight in the Ugandan city, they say.

Some people do get luck smiling upon them and hit up to Ush1 million ($360) or even more in a day. Bettors also feel the Ush200 million ($71,500) levy by the government could force the betting companies to hike their tickets, pushing betting beyond what some of them can afford.

Insurance Times | July 2015

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Baseball comes to Tanzania

From left: Chairperson of the Association for Friends of African Baseball Shinya Tomonari with Tanzania Baseball Association Director General Alpherio Nchimbi and Tanzania Sports Association official Richard Mganga.

By Christopher Sise

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merica’s second most popular sport, baseball, has made its footprint in Tanzania, with students of Azania and Kibasila secondary schools already enjoying the game.

Baseball, which is also popular in Japan, has been introduced

by Japanese experts Tchioi and Yuki Koga. They chose the two schools in a pilot to effort to introduce the sport.

The Japanese baseball trainers and their crew have been busy training students from the two Dar es Salaam schools. Tchioi and his assistants are working on voluntary basis to popularize the game in Tanzanian schools.

They have urged teachers and students in school to embrace and support the game’s programmes, so as to lay a good foundation for the sport.

Azania Secondary School sports master Mark Hatia said the baseball promotion programme had been warmly received at his school and that students enjoyed playing the game after teaching hours.

The baseball trainer and his crew said they were shocked to learn that baseball is not played in most African countries, including in Tanzania. This has made them travel all across the continent.

The trainers have working hard, having been in the country for only a few months. During that time, they have made steady progress.

Tchoi is using students of Azania and Kibasila, as well as other schools in the country, to build momentum for the game.

Many students have been impressed by the speed at which they have learnt baseball.

One of Tchoi’s assistants, Yuki Koga, said students have quickly understood baseball. Their speed has however been checked by the many rules of the game that they must learn.

Insurance Times | July 2015

“The trainers need at least a year to establish the game to the point where the country can compete with the likes of Ghana and South Africa, which are taking a leading role in baseball in the continent,” Yuki said.

Azania and Kibasila students are expected to hold inter-school baseball matches to promote the game to other schools in the city and beyond.

The Japanese trainers said that their objective is to take Tanzania to a competitive level before featuring in international competitions such as the Commonwealth and Olympic games.

The Japan International Cooperation Agency (JICA) Tanzania Senior Representative, Tomonari Shinya, on behalf of the Japanese society, donated baseball game equipment worth $39,090 to the National Sports Council (NSC). Equipment presented to the NSC Secretary General, Henry Lihaya, included 530 balls, 252 gloves, 89 bats, 85 helmets and 10 sets of catchers.

Shinya said that apart from offering sports gear, they will also bring into the country volunteer coaches who will train students at various schools over the next two years.

Shinya said other secondary schools where the game of baseball will soon be introduced are Makongo in Dar es Salaam and Sanya Juu in Kilimanjaro.

Other schools include London of Songea–Ruvuma, St Mary’s in Mwanza and Mutama in Lindi.

Shinya named the two coaches who will be coming to Tanzania to take charge of the schools baseball game development programme as Tatsuoka Yu and Shibata Kohei.

Baseball has also been introduced in Kenya. In 2014, the Tanzania Baseball Association (TABSA) was formed, with the task of promoting the game countrywide.

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From success to depression and back, it all happened so fast

I

got married in 1990 but hardly a year later, I found myself getting estranged from the man that I had thought I would spend the rest of my life with. The reason was that he cheated on me; in turn, I did everything possible to make his life a living hell. It felt good at first, but I soon repented after realizing that I was only harming myself by trying to hurt him.

The years that followed were full of constant ups and downs, though the bad things were dominant. In early 2011, a friend introduced me to his counsellor, but I didn’t really pay much attention to him.

Towards the end of 2011, I consulted the counsellor but even though I was fascinated by his talk, I didn’t really get into the treatment regime all the way. Comes 2012, and this turned out to be a really bad year for me. At one point, I said to myself that I just didn’t want to live like this anymore. I tried to find ways out of my depression. It took me another three months to get fully involved with my friend’s counsellor.

I decided that 2013 would be my year.

I have never regretted that decision: I am now more than happy and I have turned round all of the failings in my life in a positive way.

On 2 January 2013, my friend’s counsellor told me that she had had a dream.

During that dream, she saw that I would be changing jobs in 2013. I did not believe in that at all because I was pretty happy at my job.

Soon afterward, however, things at my job got really bad. A lot of things changed and I didn’t like working there anymore.

But I was scared to look for a new job, especially since I do not have a university degree. As time went by, I felt increasingly uncomfortable at my job and I finally started applying for new jobs.

In the meantime, I continued attending my counselor’s classes and my trust in him got grew by the day. I sent off my first application at the end of April and I had my first job interview towards the end of May.

More job interviews followed and the job offers were interesting, but none of them felt “right”. I continued to send applications and I was invited to a few more interviews.

I applied for jobs at more than 60 companies before I found my dream job offer.

It was exactly the job I had always wanted and it pays almost exactly the amount that I had wished for. I couldn’t believe it. But for me, it was and is the ultimate proof that counsellors are there to keep our minds cool.

I sent off my application and even though I do not have the letter of acceptance yet, I know that this is my new job.

I manifested it into my life and this helped me and gave me assurance that it would be just a matter of time before I would be called to be told the good news and to be welcomed to a new team. I am so very grateful.

Never give up!

Insurance Times | July 2015

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The challenge of becoming a single father No one goes to the altar expecting to end up divorced, but it’s a distressingly common occurrence nonetheless.

By Dave Taylor

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ouples get together with the very best of intentions, full of hopes and dreams, white picket fences, 2.5 kids, or even a penthouse uptown. A life together, a future as a team, and perhaps some little people added to the mix.

That’s what was running through my head when I walked up the aisle almost 18 years ago, anxious, teary and excited to take the next step in my life with the woman I loved.

Then we had one, two, three children and somehow bringing tiny little people into the mix didn’t make our relationship any easier, didn’t help us find a common ground and get along smoothly. Every parent knows this, but you have to find out yourself anyway: having a child is hugely stressful on a relationship.

We tried to make it work. We talked, we tried different approaches to parenting, we worked with counsellors, we went to workshops and seminars. But that fateful day came to pass where we just realized that, kids or no kids, we were really not making it as a couple and were both perpetually unhappy and resentful.

So we split up. Theoretically, to have a break from each other, but I could read the writing on the wall and started preparing myself for what ended up being a long, contentious divorce.

Single parenting is hard. Single fathering is even harder.

I suddenly found myself a single dad, with children who were 10, 6 and 3. And while I’d always been an active, involved dad, it was a completely different experience when I didn’t have someone to help out if I was getting frustrated, was tired, not feeling well, or just had a vision of things going one way while they were quite clearly headed in another direction.

Like going from tag-team wrestling to having to take on the other opponent solo.

Worse, in a lot of situations, far from “having your back”, your ex can be eagerly waiting to point out your failings, digging that knife in just a bit deeper, while telling the children, “Daddy has issues, but at least you have me.”

Let me be blunt. It’s not easy being a single parent.

I think it’s tougher on us men, however, because we aren’t raised to nurture and be empathetic. In fact, Western society does its best through a culture of shaming, bullying, crass images of masculinity and dismal media portrayals of fathers to teach us men that we’re just not going to be successful parents.

We don’t tote babies around when we’re little, we aren’t the one hired to babysit the twins down the street when we’re in our teens, we’re instead pushed to physical activities, sports, video games and other activities that emphasize the testosterone factor rather than help us learn how to balance it with the more traditionally “feminine” aspects of humanity.

And so retrospectively, it’s no surprise to me that the first year of my single parenthood was damn hard. I had always been the disciplinarian in our household, the one who actually had – and enforced – rules and behaviours. Suddenly life was about a lot more than just being the drill instructor and I didn’t know how to handle it. A crying toddler? A grumpy daughter because a boy snubbed her? A boy devastated because he failed to make the winning shot? All new because I couldn’t rely on mom to be the sympathetic parent.

It was rocky, and there were definitely moments I look back on with great sadness and disappointment. I could have

done better, I could have handled them better. Or perhaps not. Perhaps the journey of man to loving father does require some turbulence along the way.

Interestingly, my ex’s household was chaos for years because as a single mom she faced the opposite challenge, that she’s wonderfully sympathetic and therefore rarely had rules and certainly hated to enforce them or impose consequences for violations. Her household was a zoo, with no bed times, no meal times, all replaced by lots of mom/kid cuddling and sharing.

Time has a way of healing and improving things, and after almost seven years of flying solo, I’ve learned a few things about finding the balance between innate male reactions and the need for a child to have a parent who is present, who is tough when needed but who is also sympathetic.

Sometimes a hug and a treat are the best response while other occasions require a time out or extra chore.

What I will share with any man who is just stepping into this new world of single parenting is to take a deep breath and let go of your expectations. Parenting really isn’t about tomorrow as much as it is about this very moment. Rules are good, but their little hearts, their expectations, their dreams are what it’s all about, so pay attention. Listen. Don’t “fix” things that don’t need fixing. And have fun. It took me years to be able to really just relax and enjoy my children.

And cut yourself slack. It’s a tough job, this solo parenting thing. You’ll make mistakes, but with positive intention and love, you’ll all make it through. If it’s going really poorly? Reach out and get some help.

No shame in that, brother.

Insurance Times | July 2015

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MOVIE REVIEW

Is ‘Get Hard’ great or silly?

Only you can decide…

Insurance Times | July 2015

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et Hard gets offensive. Get Hard also gets racist, and more than a little homophobic as it searches for laughs in its social and economic divides. But Get Hard frequently gets funny while throwing punches at taboo subjects. And then Get Hard gets really silly every time it tries to serve a paper-thin plot to which it feels beholden. And that’s a shame.

The truth is, Get Hard really just wanted an excuse to team Will Ferrell with red-hot-right-now comedian Kevin Hart, and other movies have existed for worse reasons. The pairing of the performers’ opposing comedic styles carries Get Hard longer than it should, with a wound-up Hart pinging and bouncing off of an intentionally demure and conservative Ferrell – pun intended.

If you like either of these comedians and have bought into their brands of humor in the past, then Get Hard has the right amount of knowingly insensitive punchlines to make you believe you haven’t wasted your evening at the cinema.

It’s impossible not to recite the premise of Get Hard without acknowledging its inherent racism. Riffing on the recent criminal activities of guys like Bernie Madoff, Ferrell plays James King, an insanely successful and wealthy trader who is convicted of massive tax evasions and ordered to serve time in San Quentin. Convinced

he needs guidance to help him prepare for life behind bars, King hires Darnell Lewis (Hart) – the black guy who washes his car – to train him on how to be a model convict… assuming Darnell served time simply because he’s black. Darnell only goes along with King’s ludicrous plan because he’s trying to save enough money to move his wife (Edwina Findley) and daughter out of the tough neighborhood of Crenshaw, and into a district where his child can attend a better school.

There are very few stereotypes Get Hard doesn’t exploit for the sake of a joke, and some are far cleverer than others. King, for example, is jamming alongside John Mayer at his private engagement party to Alison Brie the night he’s arrested, which is the whitest sentence I could have typed in this review.

Director Etan Cohen doesn’t have the same grip on the African-American or gay communities, so the punchlines aimed at those groups are less focused, more broad and usually too easy to be legitimately funny. Black people run in violent gangs. Gay guys exist to give each other oral sex. In prison, both worlds collide, repeatedly. Or so the narrative often goes in Get Hard, which doesn’t meet a single blowjob joke it isn’t eager to ram into the ground.

In between the crass prison gang-bang jokes, Hart and Ferrell are able to forge

some chemistry in the grooves of their usual on-screen personas. Ferrell often plays the conceited, clueless lout who is unaware of reality until it rises up and bites him on his swollen head. And Hart’s often asked to whip up a blustery improve of comedy in hopes of improving his material.

Get Hard gives him a sensitive, moderately formed character in Darnell, but there were opportunities when either the comedian or the movie could have dragged Get Hard to a superior place by confronting racism with honesty – there’s a scene with white supremacists that could have been Hart’s 48 Hours moment – and it never materializes.

Outside of the comedy generated by its insensitive concept, Get Hard makes the mistake of thinking it needs a story to follow. It doesn’t. It’s not meant to be that type of movie, which explains why Get Hard sputters and dies during its mismanaged third act, where James and Darnell team up to find out who framed the former (a fact that’s painfully obvious to us in the film’s first five minutes).

It’s hard to determine who will care less about that narrative: the filmmakers who create it, or the audiences who are forced to watch it. By that point, however, lenient Get Hard patrons likely will have been entertained enough to earn a verdict of “worth one’s time.”

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Insurance Times | July 2015