Dar es Salaam. Good morning! The Chanzo is here with a rundown of major news stories reported in Tanzania on the Monday.
Government security market underperform, only 30 percent of treasury bond value sold
The latest report from the Bank of Tanzania shows that the September 2023 security market did not go according to plan.
The report shows while the government conducted two treasury bills auctions with a tender size of TZS 345.8 billion, the auction was undersubscribed attracting bids amounting t TZS 309.3 billion, of which 306.7 billion was accepted.
The results come as the weighted average yield has increased to 7.44 percent from 6.92 percent.
On the other hand treasury bond performance was way off below the target with only 30 percent of the auctioned bonds sold. The Bank had issued a combined tender for 2-year and 15-year treasury bonds valued at TZS 288.1 billion.
About TZS 196.2 bids were received and only TZS 87.5 billion was accepted by the bank.
The latest results show a liquidity challenge in the market, which is also reflected in the fall of transactions in the interbank cash market (IBCM). In September 2023, transactions in the IBCM decreased to TZS 2.3 trillion from 2.7 trillion recorded in August 2023.
The trend of actors taking up treasury bills that mature in a short duration (35 days, 91 days, 182 days or 364 days) than bonds has continued which shows that actors are more interested in short-term commitment, also reflecting liquidity trend in the market.
The main investors in the government security market are commercial banks and pension funds.
BOT intensified its intervention in the foreign exchange market with a sale of USD 150 Million
For months now, the Bank of Tanzania (BOT) has remained the major trader in the interbank foreign exchange market which had essentially dried due to the foreign exchange pressure.
In its latest move to ease pressure, in September 2023, the Bank sold about USD 150.5 million in the interbank exchange. This is the largest lot sold by the Bank this year, which is double the amount (USD 73.5) sold in the previous month. Up to September 2023, the Bank has sold more than USD 439 million in the exchange market.
The Bank has initiated several interventions in curbing the scarcity of the US dollar in the economy. While there are several policy measures undertaken, the Bank has also allowed for the exchange rate to reflect the demand and supply forces in the economy, which has so far seen a depreciation of shilling.
In its latest report, the International Monetary Fund has advised countries with floating exchange rates ‘to allow currency to adjust as much as possible, since efforts to resist fundamentals-based movements come at a significant cost.’
Some of the cost associated with artificially maintaining the rate include the emergence of a parallel market (black market), which essentially dry out foreign currencies from the official channels.
Several countries in Africa are facing increasing exchange rate pressure including Nigeria, Malawi, Kenya, Tanzania, Ethiopia, and Rwanda just to mention a few.
In October this year, the governor of the Central Bank of Kenya told the Kenyan parliamentary committee that the Bank had tried to ‘artificially maintain a strong currency’ for years.
Government admits faults in designing Jangwani bridge
The government, represented by the Minister of the President’s Office, Regional Administration, and Local Government Tanzania (PO-RALG), Mohamed Mchengerwa, has acknowledged the presence of design flaws in the current Jangwani bridge.
Jangwani, a segment of Morogoro Road, is notorious for flooding during rainfall. This month, the issue resurfaced, leading to temporary road closures whenever there is heavy rainfall.
“We need to be honest about this; both the experts and the consultant let us down,” stated Mchengerwa. “They should currently be in court,” he emphasized.
Funded by a USD 350 Million loan from the World Bank, the government aims to revitalize the entire zone around the Msimbazi river basin. This initiative includes the construction of a 390-meter bridge on the Jangwani/Morogoro road section.
Legal controversy arises as President Samia reinstates the Chairman who was removed from TCRA
President Samia Suluhu Hassan has reinstated Dr. Jones A. Killimbe as the Chairman of the Board of Directors of the Tanzania Communications Regulatory Authority (TCRA), raising several legal questions among analysts in the country.
This appointment comes approximately 14 months after Dr. Killimbe was removed from this crucial position, and succeeded by Othman Sharif Khatib.
In the announcement made on November 13, 2023, Juma Hassan Reli was appointed as the Vice Chairman of the TCRA Board of Directors.
Dr. Killimbe, an expert in communication who has worked both domestically and internationally, was initially appointed as the Chairman of the TCRA Board on November 17, 2016.
After completing his four-year term, President Samia reappointed him to the position on April 19, 2021. Dr. Killimbe served in that capacity until September 18, 2022, when his appointment was revoked.
The law governing the Tanzania Communications Regulatory Authority states that the Chairman of the Board of Directors shall serve for a term of four years. Furthermore, the law specifies that board members, including the Chairman, and Vice Chairman, ‘shall each be eligible for
re-appointment for one further successive term but shall not otherwise be eligible for re-appointment.’
Some analysts question that although Dr. Kilimbe did not complete his four-year term in his second appointment, his third appointment is taking place while there was another Chairman who had assumed office before the revocation of his appointment.
Critics use this argument to point out that Dr. Kilimbe’s appointment is not in a ‘successive terms’, as the law stipulates.
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