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Africa’s average rate of productivity growth falls to 1.7%

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Strong GDP growth in Africa has masked disappointing productivity, according to The Institute of Chartered Accountants in England and Wales (ICAEW’s) latest Economic Insight: Africa Quarter 2 report. Uganda in particular has seen a lower economic activity than anticipated during the past one year, primarily as a result of the sharp decline in commodity prices, which negatively affected export earnings.

Over the last 15 years, trade and investment have buffered the continent against the global financial crisis. However, according to the ICAEW, this has hidden low productivity figures – despite much greater potential for economic ‘catch up’.

According to the 2016-2017 Uganda national budget, the lower growth of Uganda’s economy arose from the drastic fall in international commodity prices of exports such as coffee, tea, minerals; the decline in private sector credit growth as a result of high interest rates, which have constrained domestic activity; and the strengthening of the US Dollar as a result of the recovery in the US economy which led to depreciation of Uganda’s shilling causing domestic inflation.

The ICAEW report notes that from the year 2000 to 2015, the average GDP growth across Africa was 4.8% per annum, a full 2.3 percentage points faster than the global average during the 1990s. This is only marginally slower than the ASEAN region, which grew by an average 5.6% per annum and around 0.2 percentage points faster than the Middle East region.

Michael Armstrong, Regional Director at ICAEW Middle East, Africa and South Asia said “Matching the performance of some other emerging market regions might, at face value, seem respectable enough. But the truth is that Africa is starting from a much lower level of economic development than these economies.”

African economies should be in a position to improve productivity in the agriculture sector, thanks to low cost labour and climate. However, so far progress has been disappointing. The ICAEW report notes that the East African region has especially been s back by inflation. The recent El Niño rains caused major fluctuations in food prices across the southern half of the continent, with greater than usual rainfall in Tanzania and Kenya. On the other hand, southern countries suffered from severe drought. Ethiopia has been particularly hard hit by adverse weather conditions, with the worst drought in around 30 years pushing food inflation to a peak of 16.2% year on year in October 2015 and easing only gradually in the first half of 2016.

“Poor agricultural output had an additional inflationary effect in some countries especially as agricultural goods constitute a large proportion of East African exports. This, combined with weaker exports, undermined currencies in the region, further fueling inflationary pressure,” added Armstrong. In Uganda for instance Tea prices have dropped from US Dollar cents 403.03 per Kg in July 2015 to US Dollar cents 237.99 per Kg in April 2016 while Copper from US$ 5,456.75 per tonne to US$ 4,872.74 per tonne.

The ICAEW report further states that in an attempt to limit the acceleration in price growth, central banks across the region adopted tighter monetary policies, with some countries such as Kenya and Uganda aggressively raising interest rates. This was also echoed by the 2016-17 Uganda’s national budget that stated that commercial bank lending rates have remained high largely due to the limited availability of long term capital, resulting in the mismatch between the commercial bank financing products and the nature of the investments being undertaken.

Subtracting this component, as well as the modest contributions from increasing labour participation and utilization, the continent is left with the improvement in output per worker, which has grown by just 1.7% per annum from 2000-2015 in non-oil sub-Saharan economies overall. This, however, is substantially slower than in low-income economies in other regions, and suggests capital is not being allocated to the most productive uses. Almost all GDP growth came from an increase in the working age population in many countries.

Tom Rogers, Associate Director, Macro Consulting at Oxford Economics, said: “Excluding oil intensive economies such as Angola, Nigeria, Equatorial Guinea and Mozambique, average output per worker in sub-Saharan Africa grew by just 1.7% per annum from 2000 to 2015, and in half of sub-Saharan economies by less than 1% per year. The fact is that Africa has tremendous economic potential, but realizing it will depend on being able to move up the value chain and deliver productivity improvements. For example, crop yields in largely agrarian economies are typically lower than in other major producers. Solving these problems would enable African producers to compete more effectively with farmers from other parts of the world, freeing up labour to move to manufacturing sectors.”

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Ugandan cosmetic line, Minama launches new skin care product

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By Our Reporter

Ugandan beauty and cosmetics brand, Minama has released a new skin care product on the market.

The brand’s C.E.O Afsana Pey S.K has announced the release of its Minama skin oil, which goes on the market today, in Uganda and across the continent.

“Minama skin glow oil has really helped many of our clients and myself, particularly for ailments like Acne, blemishes, black spots, scars etc. It also clears your skin and leaves it glowing with that beautiful shine,” she explains.

When asked what was her motivation for setting up the skin care line, Afsana explains that she suffered with skin issues for a long time, and being as there weren’t many solutions available on the market, she decided to start up her own skin care line, whose many other products include lotions, soaps, creams and other cosmetics.

“I know first-hand how bad skin can affect you, especially your confidence, so I started the line to help others and myself. We have more products launching in December, and we can’t wait for all our clients, old and new to get their hands on this skin oil,” she concludes.

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Vivo Energy donates 15 million shillings worth of school materials to Kiswa Primary School

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By Staff Writer

Vivo Energy Uganda, the company that distributes and markets Shell branded fuels and lubricants in Uganda, has today visited Kiswa Primary School in Bugolobi, Kampala and donated school materials and sanitary towels worth Fifteen million Uganda shillings to enhance its Schools’ Education Support programme.

The donation was handed over by Vivo Energy Uganda Managing Director, Mr. Gilbert Assi in the presence of the school community, Vivo Energy Group Chairman, Mr. John Daly, Non-Executive Director, Ms. Hixonia Nyasulu, Executive Vice President for East and Southern Africa, Mr. Hans Paulsen and staff. 

Kampala Capital City Authority’s Director of Education and Social Services, Miss Juliet Nambi Namuddu was the guest of honour at the colourful function that was also attended by the Mayor of Nakawa Division, Hon. Ronald Bamwezo under whose jurisdiction the school is located.

Speaking at the school visit, Mr. Gilbert Assi remarked that education is one of Vivo Energy’s priority areas of community investment.

“We believe in empowering the future generation of leaders by giving them opportunities to learn. We hope that the support that we have given to this school today will in turn lead to improved literacy, better grades and overall improvement of the school’s performance.”

He added, “Vivo Energy Uganda’s Schools’ Road Safety Education programmes have in the past five years trained pupils in over 120 primary schools as road safety ambassadors. Kiswa Primary School was one of the first schools that we approached at the time. We are pleased that this relationship has progressed to the point where we are confident in the abilities of the children to support fellow children to observe safe road practices. We focus on children as the future drivers in order to inculcate in them a culture of road safety at a young age. Children can also be effective in influencing their parents’ behaviour and through these efforts, we would like to win them over first as a way to reach their parents.”

Ms. Aisha Bagaya Ntege, the Head Teacher of Kiswa Primary School commended Vivo Energy Uganda for identifying the school’s challenges and supporting the administration to address them.

“Our school population consists of over 2000 children, drawn from the less fortunate communities near and far from our location. We try our best to manage the existing challenges such as limited learning resources, nutrition, absenteeism of female students due to poor management of menstruation and more. I am delighted that companies such as Vivo Energy Uganda have a heart for the communities around them and reach out to support education. We appreciate this gesture.”

KCCA Director of Education and Social Services, Ms. Juliet Nambi Namuddu expressed her appreciation to Vivo Energy Uganda for supporting education in Uganda: “On behalf of KCCA, that manages public schools in the city, we commend Vivo Energy Uganda for continually partnering with us to make education experience for the children less of a challenge. We encourage like-minded organisations to join us in a similar initiative.”

Adding, “It is a sad reality that one out of 10 African girls skip school or drop out of school entirely due to lack of menstrual products and proper access to proper sanitation according to United Nations Children’s Fund. However, this hindrance to the education of female students is now a priority for the KCCA and for the Ministry of Education.”

Vivo Energy Group Chairman John Daly and Non-Executive Director, Ms. Hixonia Nyasulu are currently in the country on a business familiarization tour of Vivo Energy Uganda.

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Nsenene Ku Beat Event slated for November

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By Staff Writer

Ruspolia differens aka katydids, locally known as ‘Nsenene’ is a Uganda delicacy that’s mostly consumed in the months of April to May and November to December.

The lastest is that Striddle Events Africa, an events company has come up with several recipes such as Samosa Nsenene, Burger Nsenene, Pancake Nsenene, Bread Nsenene and Chapati Nsenene which will be exclusively unleashed for the ardent consumers to enjoy whilst dancing to soothing musical beats by our local talents.

Speaking to the press, Sebulime Peter alias Demo Riley the CEO Nsenene Ku Beat, asserted that they were supposed to have this event in May this year but decided to postpone it to November so they can prepare well enough to give people a better experience.

He added that the idea is to promote food tourism and this event thus presents a unique opportunity for Uganda’s vendors, consumers, corporate companies and tourism institutions to celebrate the country’s rich and original snack Nsenene and music culture.

There will be activities like cooking competitions, games, live video mixing, live band, celebrity cookouts and artists performance.

The event which will happen on Sunday 24th November at HillTop Garden, Naguru and gates will be opened at 10am till late. The cover charge is only UGX 10k and children enter for free.

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