International Finance takes over CFUB
By Moses John, Dar es Salaam
I&M Bank announces its entry into commercial banking in Tanzania with the acquisition of a majority stake in CF Union Bank Ltd (CFUB) of Tanzania.
CFUB has been operating in Tanzania since 2002 and has two branches in Dar es
Salaam and one in Arusha with a staff compliment of fifty seven, it enjoys a good reputation in the Tanzanian market with quality and profitable operations, and has a balance sheet of Tsh 80 billion (US Dollars 61 million), as of 31st December 2009.
Following this acquisition, which involved a buyout of the existing shareholders of CFUB, the new board has taken over under the chairmanship of Mr. Sarit S Raja Shah, who is also executive director of I&M Bank.
Also participating in the equity buy-out is PROPARCO, a French development financial institution, and an existing shareholder of I&M Bank, together with the Kibo Fund, and Mr. Michael N Shirima, a significant shareholder of Precision Air.
‘The Kibo Fund’, is a Mauritius based private equity fund whose major investors are Ciel Investments Ltd, FMO the Dutch Development Financial Institution and DEG, a member of KfW Bankengruppe - kfw banking group of Germany. The Ciel Group also partners with I&M Bank in the joint holding of Bank One Mauritius.
Mr. S Gopalan, the long serving chief executive officer of CFUB, said: “We welcome our new shareholders who will add considerable value to the bank in terms of their international expertise in managing financial institutions. CFUB will continue to serve its existing customers with the same diligence as always, and will look to further deepen these long-standing relationships with added-value products and services.
Our new association will also help CFUB broaden the customer base through an enhanced capability to handle larger and more varied transactions, particularly in the field of trade finance where I&M Bank is a leader.”
The acquisition of CFUB is thus the second international footprint of I&M Bank, after its acquisition of Bank One Mauritius in 2008. Says Arun Mathur, CEO of I&M Bank: “This strategic move is another key milestone for I & M and expansion into Tanzania will enable our existing corporate customers, who already have a presence there, to benefit from an integrated cross-border banking relationship.
It could also influence other corporates who require cross-border financial structures, as well as those who have extensive trade dealings within the region, to move to us, since we have a presence in Tanzania. Trade between the two countries is increasing steadily, and our entry into Tanzania will create further opportunities for customers in both countries.”
Adds Sarit Shah, executive director of I&M Bank, “Our acquisition in Tanzania makes us a truly regional bank, and with an insurance company – GA Insurance Company, as part of the I&M Group, we can now help our customers to accelerate their growth in the region with the unique advantage that we have of offering both banking and insurance services.
“I&M Bank’s philosophy in utilising state-of-the-art technology to offer a wide range of modern banking products and services is likely to migrate in the coming months to CFUB, which should add further impetus to the already impressive growth that CFUB has seen in the last few years.
We are grateful to the Bank of Tanzania for welcoming us as investors into the country, and are very excited to participate and contribute to Tanzania’s future economic growth.” Mr. Shah also mentioned: “This acquisition is an important step for I&M Bank’s evolution into a multinational bank, and we will continue to explore such expansion opportunities in other countries in the region.”
By Elias Mhegera
Dar es Salaam
A new bank, Ecobank , has opened its main and first ever branch in Tanzania, promising that most of its profits will remain in this country through employment and corporate social responsibility.
Speaking to journalists on Friday last week at the bank’s headquarters in Uhuru St, Dar es Salaam, Managing Director James Cantamantu Koomson promised Tanzanians better service, worthy of their expectations.
“The opening of this bank in Tanzania marks a long awaited relationship between a bank driven by a Pan African vision, and a country noted for its hard work ethos”, said Koomson. (First time I’ve ever heard that- Ed.) Flanked by his assistant Robert Kwami, who is the executive director, Koomson said that his bank has a long experience in running businesses on this continent, Tanzania being the 30th. The bank has over 700 branches.
Having started over 21 years ago, the bank is already in full operation in other East African countries, Rwanda, Kenya, Uganda, Burundi, and now Tanzania.
The new branch offers a full range of retail and commercial banking products and services, as well as foreign exchange and capital markets expertise.
“We believe that Ecobank, with its network in over 30 countries and territories, has a compelling advantage over other institutions, and one which we aim to maximize by offering our banking services to customers across Tanzania” said the MD.
He further promised that his bank will support the country’s initiatives particularly in education and health. He said that it was normal practice for the bank to generate employment opportunities to the indigenous people wherever it has branches.
Through that programme, the MD promised that a good number of fresh graduates will receive on-the-job training, to become bankers of international standard.
Meanwhile the bank has promised to open other branches in this country, probably at all regional centres. He said that in such a way a good number of Tanzanians will be employed and secure good remuneration.
Recapping on the bank’s history, Koomson said that in 1985 it was incorporated, now it is part of Ecobank Transnational Incorporated (ETI), which is the parent company of the leading independent regional banking groups in Africa.
Ecobank is a full service bank, providing wholesale, retail, investment and transactional banking services and products to governments, financial institutions, multinationals, international organizations, medium, small and micro businesses and individuals.
The parent company of Eccobank, Ecobank Transnational Incorporated, is listed on the stock exchange in Lagos, Accra and the West African Economic and Monetary Union ( UEMOA) – the BRVM .The group is owned by more than 140,000 shareholders including institutional investors. It has over 11,000 employees from 30 different countries in over 700 branches.
Fight for the Market between Importers and Industries
By Moses John,
Dar es Salaam
TEXTILE industries plus the government in Tanzania are faced with great challenges about bringing a revolution concerning the type of clothes chosen by the national consumer, it has been revealed.
Speaking in an exclusive interview with The Express in Dar es Salaam, the managing director of a local textile firm,( Ihembe Textile 2005 (T) Ltd.), Edgar Nkunda, said the industries in this country have a great task in front of them to meet the consumer’s needs and demands.
He remarked that at the present time, Tanzania is importing a large bulk of second-hand articles of clothing, commonly known as mitumba, whereas the nation is producing a great percentage of cotton which is not used for the benefit of its people.
The fact is that Tanzania is among the countries in Africa and in the world which imports used things or materials, like clothes, footwear, machinery, equipment, motor cars and spare parts. The market for the second-hand has been increasing year by year, particularly from the early 1980s onwards.
Recently, there has been a big debate within Tanzania about the impact of the second-hand or used clothes on the society, in particular on the economy. Therefore this is at the same time a challenge to textiles in this country to play their part and stimulate the abolition of the used clothes market.
The textiles industries in Tanzania since independence have been invested in heavily, so that they can satisfy the demands of the consumer in terms of clothes and other items produced by, first the cotton growers, and then the manufacturers of the nation.
According to the Ministries of Industry, Trade and Marketing’s report of about five years ago, on the status of the textile industries in Tanzania, 50 textile firms were established by the year 2002, by the government and private companies.
However only 23, that is about 46 percent of the established industries, are operating, these industries are involved in dyeing, spinning, weaving, printing khangas and kitenges, bed sheets and a variety of garments, and in knitting woven blankets and socks.
In the 1960s and 1970s, Tanzania was able to meet the demands of the market in terms of clothing. The industries produced adequate clothes and materials for making clothes. Furthermore the industries were major employers and contributors to GDP. They employed about 25 percent of the working force and contributed 25 percent of GDP in the manufacturing sector.
In the current situation, the textile industries at present are not even buying the locally-produced cotton to satisfy the need for clothes in this country.
Although Tanzania is one of the countries with a high demand for clothes, the local textile industries are not able to meet the demand of the market in terms of quality and choice. Therefore the used clothes imports fill up the gap.
The second-hand clothes are beneficial to the poor as they are affordable by them, since used clothes are sold at low prices compared to those of the textile industries’ products, within the country or outside it. Though the clothes from Asia are even cheaper than those factory-made here, used clothes are still the cheapest, and due to that most people in rural or even urban areas buy second-hand clothes.
According to Nkunda, used clothes are retarding the growth of the local textile industry. People do not see the necessity of buying clothes from the manufacturers. Hence, our textile industries’ products have a limited market.
He said in Tanzania, there are many locally handmade clothes, such as batik and tie and dye. These producers also are affected by the imports because used clothes are very cheap compared to their products.
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